STOCK OPTIONS

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

STOCK OPTIONS

15. Stock Options.

The Company has a stock option plan (“Plan”). The purpose of this Plan is to provide additional incentives to key employees, officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel for positions of responsibility and otherwise promote the success of the Company’s business. It is intended that options issued under this Plan constitute non-qualified stock options. The general terms of awards under the option plan are that 100% of the options granted will vest the year following the grant. The maximum term of options granted is 5 years and the exercise price for all options are issued for not less than fair market value at the date of the grant.

The following table summarizes the Company’s stock option activities for the years ended December 31, 2022 and 2021:

	Number of shares			Exercise price per share		Weighted average exercise price
Balance, December 31, 2020		749,000		$	0.75 – 4.13	$	2.42
Granted		170,000		$	3.61	$	3.61
Cancelled or expired		(34,799	)	$	1.42 – 3.46	$	2.30
Exercised		(94,701	)	$	0.75 – 3.46	$	1.58
Balance, December 31, 2021		789,500		$	1.42 – 4.13	$	2.78
Granted		981,000		$	3.55 – 3.61	$	3.55
Cancelled or expired		(13,486	)	$	1.70 – 3.61	$	2.32
Exercised		(71,014	)	$	1.42 – 2.44	$	1.98
Balance, December 31, 2022		1,686,000		$	1.70 – 4.13	$	3.26
Exercisable, December 31, 2022		680,000		$	1.70 – 4.13	$	2.92

The weighted-average remaining contractual life of outstanding options is 3.90 years.

The fair value of each option grant is calculated using the following weighted average assumptions:

	2022			2021
Expected life – years		3.0			3.0
Interest rate		1.76 – 3.64	%		1.23	%
Volatility		66.01 - 69.66	%		63.28	%
Weighted average fair value of options granted	$	1.46 – 1.65		$	1.23

During the year ended December 31, 2022, the Company granted 46,000 (2021 – 45,000) stock options to consultants and has applied ASC 718 using the Black-Scholes option-pricing model, which resulted in expenses of $14,850 (2021 - $13,860). Options granted in other years resulted in additional expenses of $62,187 (2021 – $51,210). During the year ended December 31, 2022, employees were granted 935,000 (2021 – 125,000) stock options, which resulted in expenses of $172,731 (2021 – $38,500). Options granted in other years resulted in additional expenses in the amount of $149,380 for employees during the year ended December 31, 2022 (2021 - $106,542). There were 54,500 employee and 16,514 consultant stock options exercised during the year ended December 31, 2022 (2021 – 61,500 employee; 33,201 consultant).

As of December 31, 2022, there was approximately $1,432,960 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 3.9 years.

The aggregate intrinsic value of vested options outstanding at December 31, 2022 is $69,190 (2021 – $712,945). The intrinsic value of options exercised during the year ended December 31, 2022 was $96,989 (2021 - $203,701).