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Warrants
 12 Months Ended
Dec. 31, 2022
Warrants  
Warrants

16. Warrants

 

A continuity of the Company’s outstanding share purchase warrants for the year ended December 31, 2022 and the year ended December 31, 2021 is presented below:

 

 

 

   Number of
warrants		   Weighted average exercise price 
Outstanding, January 1, 2021   35,865,312   $0.10 
Issued   14,017,663    0.10 
Exercised   (31,270,314)   0.09 
Expired   (10,768,332)   0.13 
Outstanding, December 31, 2021   7,844,329   $0.10 
Issued   105,055,189    0.34 
Exercised   (10,926,828)   0.13 
Expired   (35,001)   0.07 
Outstanding, December 31, 2022   101,937,689   $0.34 

 

At December 31, 2022, the Company had the following outstanding share purchase warrants:

 

 

 

Outstanding  Exercise Price   Expiry Date 
50,000   0.32 USD    June 6, 2023 
21,705,438   0.33 USD    March 15, 2024 
3,383,939   0.33 USD    March 16, 2024 
2,954,545   0.33 USD    March 17, 2024 
10,614,123   0.33 USD    March 18, 2024 
21,431,754   0.33 USD    March 24, 2024 
2,653,000   0.33 USD    March 28, 2024 
37,643,450   0.37 USD    June 29, 2025 
1,501,440   0.23 USD    June 29, 2025 
101,937,689          

 

As at December 31, 2022, the weighted average remaining contractual life of outstanding warrants is 1.71 years (2021 – 1.63 years).

 

During the year ended December 31, 2021, in connection to a prior private placement in which warrants were owed to certain subscribers, the Company issued 75,000 warrants with an exercise price of US$0.32 per warrant and a contractual life of 24 months. The fair value of the warrants on issuance was determined to be $15,616 which was recognized in the consolidated statements of loss and comprehensive loss.

 

 

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2022 and 2021

(Expressed in U.S. dollars)

 

16. Warrants (continued)

 

As at December 31, 2021, the Company had 3,776,249 warrants issued in connection with private placements, or debt settlements. The exercise price of such warrants was denominated in CAD, when the functional currency prior to January 1, 2022 was the USD. As such the warrants were classified as derivate liabilities with a fair value of $472,899. As a result of the change in functional currency of the Company to CAD on January 1, 2022, such warrants were reclassified to equity.

 

Due to the change in functional currency of the Company, 4,068,080 warrants with a carrying value of $163,162 were reassessed to be derivative liabilities as the exercise prices are denominated in USD, when the new functional currency is the CAD. Immediately before the reclassification, the fair value of the warrants were remeasured using the Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0%, expected volatility - 159%, risk-free interest rate – 0.89% and an expected remaining life – 1.56 years. The Company recognized a loss in fair value change on the derivative liabilities of $288,618 on January 1, 2022. As at December 31, 2022, the fair value of the warrants were remeasured at $4,827 using Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0%, expected volatility - 111%, risk-free interest rate – 4.52% and an expected remaining life of 0.43 years. The Company recognized a loss on fair value change of $686,504 for the year ended December 31, 2022.

 

The following is a continuity of the Company’s derivative warrant liability:

 

 

 

   Total 
Balance, January 1, 2021  $1,804,572 
Issued   621,500 
Extinguished   (479,535)
Exercise of warrants   (3,064,400)
Change in fair value of derivative   1,590,762 
Balance, December 31, 2021  $472,899 
Effect of change in functional currency   (309,006)
Exercise of warrants   (822,950)
Change in fair value of derivative   686,504 
Foreign currency translation   (22,620)
Balance, December 31, 2022  $4,827 

 

The fair values for finder’s warrants granted during the year ended December 31, 2022 and the warrants granted during the year ended December 31, 2021, have been estimated using the Black-Scholes option pricing model using the following assumptions:

 

 

 

   2022   2021 
Risk-free interest rate   1.21% - 3.13%   0.16%
Expected life (years)   2-3    2 
Expected volatility   154%-182%   215%
Dividend yield   0%   0%