STOCK OPTIONS

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

STOCK OPTIONS

13. 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 year ended December 31, 2022 and the three-month period ended March 31, 2023:

	Number of shares			Exercise price per share		Weighted average exercise price
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
Exercised		(8,000	)	$	1.70	$	1.70
Balance, March 31, 2023		1,678,000			$ 1.75 – 4.13	$	3.27
Exercisable, March 31, 2023		672,000			$ 1.75 – 4.13	$	2.94

The weighted average remaining contractual life of options outstanding is 3.9 years.

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

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

During the three months ended March 31, 2023 and 2022, the Company did not grant any new options to consultants. Options granted in previous quarters resulted in expenses in the amount of $15,797 for consultants (2022 - $15,794). During the three months ended March 31, 2023, the Company did not grant any new options to employees (2022 – 5,000) stock options, which resulted in expenses of $nil (2022 – $1,825). Options granted in previous quarters resulted in additional expenses in the amount of $165,431 for employees during the three months ended March 31, 2023 (2022 - $36,652). There were 8,000 employee stock options exercised during the three months ended March 31, 2023 (2022 – 22,500 employee).

As of March 31, 2023, there was approximately $1,251,732 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 2.4 years.

The aggregate intrinsic value of vested options outstanding at March 31, 2023 is $161,430 (2022 – $578,660). The intrinsic value of options exercised during the three months ended March 31, 2023 was $11,520 (2022 - $29,360).