Stockholders' Equity (Deficiency):

The holders of common stock are entitled to

one

vote for each share held. There are

restrictions that limit the Company's ability to pay dividends on its common stock. The Company has

not

declared any dividends since incorporation. The Company's common stock has

par value per common stock.

(a) Common stock issuances:

Fiscal

2018

June 2018,

the related party warrant holders exercised their warrants for

1,200,000

shares at

CAD$0.65

(

US$0.50

) per share through the settlement of the promissory notes, in a non-cash transaction.

February 2018,

a warrant holder exercised their warrant for

15,000

shares at

$0.44

per share raising a total of

$6,600.

February 2018,

the Company closed a TSX Venture Exchange approved private placement financing totaling

$2,551,500.

The private placement consisted of

7,290,000

common shares priced at

$0.35

per share. Pursuant to the private placement the Company paid a commission of

$253,750

and incurred share issuance expense of

$18,342.

Fiscal

2017

December 2017,

two

warrant holders exercised their warrants and acquired

121,111

common shares of the Company at

CAD$0.55

(approximately

$0.43

) per share totaling

$52,310.

October 2017,

the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling

$45,011.

The private placement consisted of

128,600

units priced at

$0.35

per unit. Each Unit was comprised of

one

common share and

one

share purchase warrant. Each share purchase warrant is exercisable into

one

common share of the Company for

months following closing. The exercise price of the warrants is

$0.44

per share for the

first

six

months following closing and

$0.52

per share for the period which is

months following closing.

September 30, 2017,

the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling

$1,010,763.

The private placement consisted of

2,887,895

units priced at

$0.35

per unit. Each Unit was comprised of

one

common share and

one

share purchase warrant. Each share purchase warrant is exercisable into

one

common share of the Company for

months following closing. The exercise price of the warrants is

$0.44

per share for the

first

six

months following closing and

$0.52

per share for the period which is

months following closing.

In ended

June 2017,

the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling

CAD$1.045

million (approximately

$790,281

). The private placement consisted of

2,323,779

units priced at

CAD$0.45

(

$0.34

) per unit. Each Unit was comprised of

one

common share and

one

share purchase warrant. Each share purchase warrant is exercisable into

one

common share of the Company for

months following closing. The exercise price of the warrants is

CAD$0.55

per share for the

first

six

months following closing and

CAD$0.65

per share for the period which is

months following closing.

The Company incurred issuance costs of

$25,816

from the private placements and warrant exercise.

Fiscal

2019

Subsequent to the year ended

December 31, 2018,

the Company closed a TSX Venture Exchange approved private placement financing totaling

$2,000,000.

The private placement consisted of

5,000,000

shares priced at

$0.40

per share. Pursuant to the private placement the Company paid a commission of

$200,000

and incurred share issuance expense of

$13,546.

(b) Warrants

A summary of warrant activity for the warranty for the years ended

December 31, 2018

and

2017

are as follows:

	Number of warrants			Weighted average exercise price
Outstanding, December 31, 2016		-			$-

Granted		2,323,779		0.43	-	0.49
Granted		2,887,895		0.44	-	0.52
Granted		128,600		0.44	-	0.52
Exercised		(121,111	)		(0.43)

Outstanding, December 31, 2017		5,219,163			0.48

Granted		-			-
Exercised		(1,215,000	)		(0.50)
Expired, unexercised		(4,004,163	)		(0.51)

Outstanding December 31, 2018		-			$-

2015

stock option plan

In the year ended

December 31, 2015,

the shareholders approved the

2015

stock option plan and the

1999,

2001

and the

2005

plans were discontinued. The

2015

stock option plan is intended to provide incentive to employees, directors, advisors and consultants of the Company to encourage proprietary interest in the Company, to encourage such employees to remain in the employ of the Company or such directors, advisors and consultants to remain in the service of the Company, and to attract new employees, directors, advisors and consultants with outstanding qualifications. The maximum number of shares issuable under the Plan shall

not

exceed

10%

of the number of Shares of the Company issued and outstanding as of each Award Date unless shareholder approval is obtained in advance in accordance unless shareholder approval is obtained in advance in accordance. The Board of Directors determines the terms of the options granted, including the number of options granted, the exercise price and their vesting schedule. The maximum term possible is

years. Under the

2015

plan we have reserved

10%

of the number of Shares of the Company issued and outstanding as of each Award Date.

During the year ended

December 31, 2018,

the Company granted

2,130,000

options, of which

710,000

options were fully vested expiring on

June 4, 2023,

with an exercise price of

CAD$0.54

(

US$0.42

1,275,000

options were fully vested expiring on

June 4, 2023,

with an exercise price of

$0.50

and

145,000

options were issued where

10%

vests on grant date,

15%

one

year following grant date and

per month thereafter, with an exercise price of

CAD$0.54

(

US$0.42

) to employees and consultants.

During the year ended

December 31, 2017,

the Company granted

725,000

options of which

350,000

options were fully vested expiring on

November 8 ,

2022,

with an exercise price of

CAD$0.54

(

US$0.42

) and

375,000

options were issued where

10%

vests on grant date,

15%

one

year following grant date and

per month thereafter, with an exercise price of

CAD$0.54

(

US$0.42

As at

December 31, 2018,

there were a total of

3,575,000

stock options (

2017

1,605,000

) outstanding. During the year ended

December 31, 2018,

there were

nil

options exercised (

2017

nil

) and

160,000

options expired unexercised (

2017

130,000

Of the options outstanding at

December 31, 2018,

a total of

3,190,000

(

2017

1,230,000

) were fully vested and a total of

385,000

(

2017

375,000

) were issued where

10%

vests at the grant date,

15%

one

year following the grant date and

per month starting

months after the grant date. A total of

3,273,550

(

2017

1,267,500

) of these common stock purchase options had vested at

December 31, 2018.

A summary of stock option activity for the stock option plans for the years ended

December 31, 2018

and

2017

are as follows:

	Number of options			Weighted average exercise price
Outstanding, December 31, 2016		1,010,000		$	0.42

Granted		725,000			0.42
Exercised		-			-
Cancelled		(130,000	)		(0.42	)

Outstanding, December 31, 2017		1,605,000			0.42

Granted		2,130,000			0.47
Exercised		-			-
Cancelled		(160,000	)		(0.42	)

Outstanding December 31, 2018		3,575,000		$	0.45

The aggregate intrinsic value for options as of

December 31, 2018

was

$nil

(

2017

$nil

The following table summarizes information concerning outstanding and exercisable stock options at

December 31, 2018:

Range of exercise prices per share		Number outstanding		Number exercisable		Expiry date
$	0.42		855,000		855,000	December 20, 2021
	0.42		615,000		421,550	November 8, 2022
	0.42		830,000		722,000	June 4, 2023
	0.50		1,275,000		1,275,000	June 4, 2023
			3,575,000		3,273,550

The Company recorded stock-based compensation of

$595,580

on the

2,130,000

options granted and vested (

2017

$43,212

on the

725,000

options granted and vested) and as per the Black-Scholes option-pricing model, with a weighted average fair value per option of

$0.29

(

2017

$0.13

Subsequent to the year ended

December 31, 2018,

110,000

options were cancelled unexercised.