Capital stock

9 Months Ended

Sep. 30, 2014

Capital stock [Text Block]

8.	Capital stock
	On March 11, 2014, the Company completed a private placement of 8,333,329 shares of common stock at a price of US$0.09 per share for total proceeds of US$750,000. The Company also issued a total of 4,166,659 warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.20 per share for a period of five years from the closing date.

In connection with the offering, the Company paid to a registered broker-dealer a commission of US$71,000 in cash and share purchase warrants to acquire 788,888 shares of common stock of the Company at a price of US$0.09 per share for a period of five years from the closing date. The warrants may be exercised on a cashless basis.

On March 27, 2014, the Company completed a private placement of 16,502,220 shares of common stock at a price of US$0.09 per share for total proceeds of US$1,485,200. The Company also issued a total of 8,251,107 warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.20 per share for a period of five years from the closing date.

On March 31, 2014, the Company issued an additional 277,778 shares of common stock at a price of US$0.09 per share for total proceeds of US$25,000. The Company also issued 138,888 warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.20 per share for a period of five years from the closing date.

In connection with the offerings, the Company paid to a registered broker-dealer a commission of US$35,604 in cash and share purchase warrants to acquire 395,599 shares of common stock of the Company at a price of US$0.09 per share for a period of five years from the closing date. The warrants may be exercised on a cashless basis.

Stock Options:

All stock options granted are exercisable in US$. A summary of the stock option activity is as follows:

			Weighted average
	Number of options		Exercise price
Outstanding at December 31, 2012	8,206,875		US$0.05
Expired/cancelled	(6,577,500	)	US$0.05
Outstanding at December 31, 2013	1,629,375		US$0.08
Granted	10,411,450		US$0.10
Outstanding at September 30, 2013	12,040,825		US$0.09

A summary of the stock options outstanding and exercisable at September 30, 2014 is as follows:

			Weighted average		Weighted average		Aggregate
	Exercise Price	Number	remaining contractual life		exercise price		intrinsic value
US$	0.04	65,625	1.48 years	US$	0.04	$	3,281
	0.06	33,750	1.48 years		0.06		1,013
	0.08	1,500,000	1.78 years		0.08		15,000
	0.09	1,105,000	4.88 years		0.09		-
	0.09	9,161,450	4.88 years		0.09		-
	0.10	105,000	2.77 years		0.10		-
	0.10	40,000	2.91 years		0.10		-
	0.15	22,500	1.48 years		0.15		-
	0.20	7,500	1.48 years		0.20		-
		12,040,825	4.15 years	US$	0.09	$	$19,294

The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of US$0.09 per share as of September 30, 2014, which would have been received from the option holders had all option holders exercised their options as of that date. The total number of in-the-money options vested and exercisable as of September 30, 2014 was 1,599,375 (December 31, 2013 – 1,599,375).

Warrants:

On May 30, 2013, the Company issued 230,000 warrants to a consultant in connection with a advisory services agreement. These warrants have an exercise price of US$0.20 and expire on May 30, 2016. The fair value of these warrants is $20,087 using the Black-Scholes option pricing model with the following assumptions: expected life of 3 years; volatility of 157%; risk-free interest rate of 0.49%; and a dividend rate of 0%.

On April 4, 2014, the Company issued a board member 250,000 warrants, each warrant is exercisable to acquire one common share of the Company at an exercise price of US$0.09 per share for a period of three years expiring April 4, 2017.

On April 14, 2014, the Company issued board members 2,690,000 warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.10 per share for a period of five years expiring April 14, 2019. The Company also issued to a board member 250,000 warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.09 per share for a period of five years expiring April 14, 2019.

On April 16, 2014, the Company extended the term of 4,162,650 warrants issued as part of a private placement that closed on April 16, 2007 and expired on April 16, 2012, for a period of three years expiring April 16, 2017. Each warrant is exercisable to acquire an additional share of the Company at an exercise price of US$0.25 per share.

The Company issued common shares at a price of US$0.10 per share and share purchase warrants of the Company exercisable at an exercise price of US$0.20 per share pursuant to securities purchase agreements entered into between the Company and certain investors in May 2013. These May 2013 shares and and May 2013 warrants are subject to adjustment due to the issuance of common shares at a price of US$0.09 per share in the Company’s private placement that closed on March 11, 2014. On May 20, 2014, pursuant to the adjustment, the Company issued to investors of the 2013 Offering a total of 749,998 shares of common stock at a price of US$0.09 per share as fully paid and non-assessable and 374,996 warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.18 per share for a term of two years expiring May 17, 2016.

On July 4, 2014, the Company extended the term of 2,500,000 warrants issued as part of a professional service agreement in 2011 and expired on June 22, 2014 for a period of a further two years expiring June 22, 2016. Each warrant is exercisable to acquire an additional share of the Company at an exercise price of US$0.065 per share. The fair value of these warrants is $191,631 using the Black-Scholes option pricing model with the following assumptions: expected life of 2 years; volatility of 131%; risk-free interest rate of 0.52%; and a dividend rate of 0%.

On July 8, 2014, the Company issued a board member 250,000 warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.095 per share for a period of five years expiring July 8, 2019.

On September 4, 2014, the Company issued a consultant 250,000 compensation warrants, each warrant exercisable to acquire an additional share of the Company at an exercise price of US$0.09 per share for a period of three years expiring September 4, 2017.

A summary of warrant activity during the nine months ended September 30, 2014 is as follows:

			Weighted average
	Number of warrants		exercise price
Outstanding at December 31, 2012	54,392,014	$	0.08
Issued as part of private placement	4,050,000		0.20
Issued as compensation to consultant	230,000		0.20
Outstanding at December 31, 2013	58,672,014		0.09
Issued as part of private placements	13,741,141		0.20
Issued at compensation warrants	8,227,646		0.09
Outstanding at September 30, 2014	80,640,801	$	0.085

A summary of the warrants outstanding and exercisable at September 30, 2014 is as follows:

			Weighted Average
Weighted Average Exercise Price		Number	Remaining Contractual Life
US$	0.080	2,499,999	1.19 years
$	0.080	9,500,001	1.19 years
US$	0.080	3,000,000	1.23 years
$	0.080	3,000,000	1.23 years
US$	0.080	3,600,000	1.42 years
$	0.080	7,350,000	1.42 years
$	0.150	2,500,000	1.73 years
$	0.010	1,000,000	0.18 years
US$	0.065	12,285,012	2.68 years
US$	0.050	2,457,002	2.68 years
US$	0.065	1,000,000	3.06 years
US$	0.050	200,000	3.06 years
US$	0.010	5,000,000	3.15 years
US$	0.050	1,000,000	3.15 years
US$	0.200	2,375,000	1.63 years
US$	0.200	675,000	1.64 years
US$	0.200	1,000,000	1.64 years
US$	0.200	230,000	1.67 years
US$	0.200	4,955,547	4.45 years
US$	0.200	8,641,151	4.49 years
US$	0.200	144,443	4.50 years
US$	0.090	250,000	2.51 years
US$	0.090	250,000	4.54 years
US$	0.090	250,000	2.93 years
US$	0.095	250,000	4.77 years
US$	0.100	1,540,000	4.54 years
US$	0.100	1,150,000	4.54 years
US$	0.080	4,162,650	2.55 years
US$	0.180	263,886	1.63 years
US$	0.180	111,110	1.63 years
$	0.085	80,640,801	2.47 years