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7. CAPITAL AND RESERVES
 12 Months Ended
Dec. 31, 2021
Notes  
7. CAPITAL AND RESERVES

7. CAPITAL AND RESERVES 

 

(a)Authorized: 

 

At December 31, 2021, the authorized share capital was comprised of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.

 

(b)Share consolidation 

 

On December 21, 2020, the Company consolidated its share capital on the basis of one new share for every 4 old shares. All references to the number of shares and per share amounts have been retroactively restated to reflect the consolidation.

 

(c)Share issuances:  

 

i.On February 25, 2019, the Company completed the third tranche of a non-brokered private placement by issuing 500,000 units (“Unit”) at a price of $0.20 per Unit for gross proceeds of $100,000. Each Unit consists of one common share and one non-transferable warrant. Each warrant entitles the holder to purchase one additional common share for a 3-year period at a price of $0.40. The warrants were ascribed a value of $35,234. If however the closing price of the Company’s shares are $0.80 or greater for a period of 20 consecutive trading days, the warrants will expire on the earlier of the 30th day after such notice is given and the original expiry date. 

 

In connection with the financing, a total of $29,673 share issue costs were incurred.

 

ii.On December 18, 2019, the Company completed a non-brokered private placement by issuing 910,000 units (“Unit”) at a price of $0.20 per Unit for gross proceeds of $182,000. Each Unit consists of one common share and one half of one non-transferable warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.20 until December 18, 2021. The warrants were ascribed a value of $42,000.  

 

In connection with the financing, a total of $24,360 share issue costs were incurred.

 

iii.On October 23, 2020, the Company completed a non-brokered private placement by issuing 4,219,641 units (“Unit”) at a price of $0.12 per Unit for gross proceeds of $506,357. Each Unit consists of one common share and one non-transferable warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.20 until October 23, 2023. The warrants were ascribed a value of $223,080.  

 

In connection with the financing, a total of $21,537 share issue costs were incurred.

 

(d)Share Purchase Option Compensation Plan:  

 

The Company has established a stock option plan whereby the Company may grant options to directors, officers, employees and consultants of up to 10% of the common shares outstanding at the time of grant. The exercise price, term and vesting period of each option are determined by the board of directors within regulatory guidelines.

 

On December 21, 2020, the Company’s stock options were consolidated on a 4 for 1 basis and the exercised prices were reflected as such (Note 7(b)).

Stock option transactions and the number of stock options for the year ended December 31, 2021 are summarized as follows:

 

 

                                                      

Exercise

December 31,

 

 

 

Expired/

December 31,

Expiry date

price

2020

Granted

 

Exercised

cancelled

2021

September 26, 2021

$0.72

393,750

-

 

-

(393,750)

-

April 26, 2022 (1)

$0.40

327,500

-

 

-

-

327,500

March 14, 2023

$0.40

450,000

-

 

-

-

450,000

March 26, 2023

$0.40

10,000

-

 

-

-

10,000

January 7, 2024

$0.20

45,750

-

 

-

-

45,750

Options outstanding

 

1,227,000

-

 

-

(393,750)

833,250

Options exercisable

 

1,227,000

-

 

-

(393,750)

833,250

Weighted average exercise price

 

$0.50

$Nil

 

$Nil

$0.72

$0.39

 

(1)Subsequently, these options expired unexercised. 

 

As of December 31, 2021, the weighted average contractual remaining life is 0.90 years (December 31, 2020 – 1.53 years).

 

Stock options transactions and the number of stock options for the year ended December 31, 2020 are summarized as follows:

 

 

                                                      

Exercise

December 31,

 

 

 

Expired/

December 31,

Expiry date

price

2019

Granted

 

Exercised

cancelled

2020

July 15, 2020

$0.40

503,750

-

 

-

(503,750)

-

September 26, 2021

$0.72

393,750

-

 

-

-

393,750

April 26, 2022

$0.40

327,500

-

 

-

-

327,500

March 14, 2023

$0.40

450,000

-

 

-

-

450,000

March 26, 2023

$0.40

10,000

-

 

-

-

10,000

January 7, 2024

$0.20

45,750

-

 

-

-

45,750

Options outstanding

 

1,730,750

-

 

-

(503,750)

1,227,000

Options exercisable

 

1,730,750

-

 

-

(503,750)

1,227,000

Weighted average exercise price

 

$0.47

$Nil

 

$Nil

$0.40

$0.50

 

Stock option transactions and the number of stock options for the year ended December 31, 2019 are summarized as follows:

 

 

                                                      

Exercise

December 31,

 

 

 

Expired/

December 31,

Expiry date

price

2018

Granted

 

Exercised

cancelled

2019

March 3, 2019

$0.66

50,000

-

 

-

(50,000)

-

July 15, 2020

$0.40

503,750

-

 

-

-

503,750

September 26, 2021

$0.72

393,750

-

 

-

-

393,750

April 26, 2022

$0.40

327,500

-

 

-

-

327,500

March 14, 2023

$0.40

450,000

-

 

-

-

450,000

March 26, 2023

$0.40

10,000

-

 

-

-

10,000

January 7, 2024

$0.20

-

45,750

 

-

-

45,750

Options outstanding

 

1,735,000

45,750

 

-

(50,000)

1,730,750

Options exercisable

 

1,735,000

45,750

 

-

(50,000)

1,730,750

Weighted average exercise price

 

$0.48

$0.20

 

$Nil

$0.66

$0.47

The weighted average assumptions used to estimate the fair value of options for the years ended December 31, 2021, 2020 and 2019 were:

 

2021

2020

2019

Risk-free interest rate

n/a

n/a

1.33%

Expected life

n/a

n/a

5 years

Expected volatility

n/a

n/a

123.92%

Expected dividend yield

n/a

n/a

Nil

 

Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable measure of the fair value of the Company’s share purchase options.

 

(e)Finder’s Options:  

 

The continuity of finder’s options for the year ended December 31, 2019 is as follows:

 

 

 

Exercise

December 31,

 

 

 

 

December 31,

Expiry date

price

2018

Issued

 

Exercised

Expired

2019

July 4, 2019

$0.40

102,813

-

 

-

(102,813)

-

Outstanding

 

102,813

-

 

-

(102,813)

-

Weighted average exercise price

 

$0.40

$Nil

 

$Nil

$0.40

$Nil

 

(f)Warrants:  

 

On December 21, 2020, the Company’s warrants were consolidated on a 4 for 1 basis and the exercised prices were reflected as such (Note 7(b)).

 

The continuity of warrants for the year ended December 31, 2021 is as follows:

 

 

 

Exercise

December 31,

 

 

 

 

December 31,

Expiry date

price

2020

Issued

 

Exercised

Expired

2021

November 9, 2021 (1)

$0.40

2,500,000

-

 

-

(2,500,000)

-

December 17, 2021 (1)

$0.40

1,160,000

-

 

-

(1,160,000)

-

December 18, 2021

$0.20

455,000

-

 

-

(455,000)

-

February 25, 2022 (1)(2)

$0.40

500,000

-

 

-

-

500,000

October 23, 2023

$0.20

4,219,641

-

 

-

-

4,219,641

Outstanding

 

8,834,641

-

 

-

(4,115,000)

4,719,641

Weighted average exercise price

 

$0.29

$Nil

 

$Nil

$0.38

$0.22

 

(1)These warrants have a forced exercise price. If the closing price of the Company’s shares is $0.80 or greater for a period of 20 consecutive trading days, the warrants will expire on the earlier of the 30th day after such notice is given and the original expiry date. 

(2)Subsequently, these warrants expired unexercised. 

 

As of December 31, 2021, the weighted average contractual life is 1.64 years (December 31, 2020 – 1.82 years).

The continuity of warrants for the year ended December 31, 2020 is as follows:

 

 

 

Exercise

December 31,

 

 

 

 

December 31,

Expiry date

price

2019

Issued

 

Exercised

Expired

2020

March 26, 2020

$0.48

1,718,750

-

 

-

(1,718,750)

-

July 12, 2020

$0.60

2,542,500

-

 

-

(2,542,500)

-

November 9, 2021 (1)

$0.40

2,500,000

-

 

-

-

2,500,000

December 17, 2021 (1)

$0.40

1,160,000

-

 

-

-

1,160,000

December 18, 2021

$0.20

455,000

-

 

-

-

455,000

February 25, 2022 (1)

$0.40

500,000

-

 

-

-

500,000

October 23, 2023

$0.20

-

4,219,641

 

-

-

4,219,641

Outstanding

 

8,876,250

4,219,641

 

-

(4,261,250)

8,834,641

Weighted average exercise price

 

$0.46

$0.20

 

$Nil

$0.55

$0.29

 

The continuity of warrants for the year ended December 31, 2019 is as follows:

 

 

 

Exercise

December 31,

 

 

 

 

December 31,

Expiry date

price

2018

Issued

 

Exercised

Expired

2019

July 4, 2019

$0.60

3,386,750

-

 

-

(3,386,750)

-

March 26, 2020

$0.48

1,718,750

-

 

-

-

1,718,750

July 12, 2020

$0.60

2,542,500

-

 

-

-

2,542,500

November 9, 2021 (1)

$0.40

2,500,000

-

 

-

-

2,500,000

December 17, 2021 (1)

$0.40

1,160,000

-

 

-

-

1,160,000

December 18, 2021

$0.20

-

455,000

 

-

-

455,000

February 25, 2022 (1)

$0.40

-

500,000

 

-

-

500,000

Outstanding

 

11,308,000

955,000

 

-

(3,386,750)

8,876,250

Weighted average exercise price

 

$0.52

$0.30

 

$Nil

$0.60

$0.46

 

The weighted average assumptions used to estimate the fair value of warrants for the years ended December 31, 2021, 2020 and 2019 were:

 

2021

2020

2019

Risk-free interest rate

n/a

1.46%

1.55%

Expected life

n/a

3 years

2.52 years

Expected volatility

n/a

149.71%

118.63%

Expected dividend yield

n/a

Nil

Nil