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SHARE CAPITAL (Tables)
 12 Months Ended
Dec. 31, 2017
SHARE CAPITAL  
Schedule of shares capital issued and outstanding

                                                                                                                                                                                                        

 

 

 

Common Shares

 

 

 

 

 

 

Contributed
Surplus

 

 

 

 

Number

 

Amount

 

 

Balance, January 1, 2015

 

 
53,842,344

 

$
89,357,061

 

$
17,632,809

 

 

Issued for cash pursuant to an underwritten public offering(i)

 

 
10,415,000

 

 
74,883,850

 

 

—

 

 

Share issue costs(i)

 

 

—

 

 
(5,004,640

)

 

—

 

 

Issued for cash on exercise of options

 

 
2,507,603

 

 
2,268,766

 

 
(1,177,864

)

 

Share-based payments

 

 

—

 

 

—

 

 
4,114,165

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2016

 

 
66,764,947

 

$
161,505,037

 

$
20,569,110

 

 

 

 

 

 

 

 

 

 

 

Issued for cash pursuant to a private placement(ii)

 

 
11,817,000

 

 
7,090,200

 

 

—

 

 

Share issue costs(ii)

 

 

—

 

 
(35,540

)

 

—

 

 

Issued for cash on exercise of options

 

 
101,398

 

 
152,976

 

 
(77,784

)

 

Share-based payments

 

 

—

 

 

—

 

 
1,810,111

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2016

 

 
78,683,345

 

$
168,712,673

 

$
22,301,437

 

 

 

 

 

 

 

 

 

 

 

Issued from Series A and Series B units(iii)

 

 
22,102,538

 

 

—

 

 

—

 

 

Common shares issued from exercise of Series D Warrants(iv)

 

 
1,874,989

 

 
1,127,057

 

 

—

 

 

Issued for cash on exercise of options

 

 
254,702

 

 
1,964,086

 

 
(1,729,134

)

 

Share-based payments

 

 

—

 

 

—

 

 
2,484,543

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2017

 

 
102,915,574

 

$
171,803,816

 

$
23,056,846

 

 

 

 

 

 

 

 

 

 

 

(i) On February 3, 2015, the Company closed an underwritten public offering of 12,075,000 common shares of the Company (of which 10,415,000 common shares were issued from treasury) at a price per share of $7.19 for aggregate gross proceeds of $74,883,850 for the Company and $11,935,400 for the selling security holders (including some directors, officers and employees). The share issue costs incurred by the Company were $5,004,640.

(ii) On December 12, 2016, the Company closed a non-brokered private placement of 11,817,000 common shares of the Company at a price per share of $0.60 for aggregate gross proceeds of $7,090,200. All of the shares issued were purchased by Boston Scientific Corporation ("Boston Scientific"). Immediately following the closing of the private placement Boston Scientific owned 15% of the issued and outstanding common shares of the Company. The share issue costs incurred by the Company were $35,540. Concurrent to, and contingent upon, the non-brokered private placement Boston Scientific purchased certain assets from the Company.

(iii) On November 17, 2017, Neovasc completed an underwritten public offering of 6,609,588 Series A Units and 19,066,780 Series B Units of the Company, at a price of $1.46 per Unit for gross proceeds of $37,487,497. No amount has been recognized with respect to the common shares within equity because the fair value of the derivative instruments issued (being the warrants which form part of the Units issued) exceeded the cash proceeds received.

(iv) On December 27, 2017, 1,874,989 of the Series D Warrants that were issued as part of the Series B Units were exercised for cash proceeds of $18,750. In addition, the fair value of the related derivative liability of $1,108,306 (see Note 15) was recognized within equity upon conversion. The holders of Series D Warrants have the option to purchase one common share of Neovasc at a nominal exercise price of $0.01 per share for each Series D warrant held.
Summary of stock option activity

                                                                                                                                                                                                               

 

 

 

Number of
options

 

Weighted
average
exercise
price

 

Average
remaining
contractual
life (years)

 

 

Options outstanding, January 1, 2015

 

 
9,346,389

 

C$
2.37

 

 
2.19

 

 

Granted

 

 
1,423,677

 

 
8.57

 

 

 

 

 

Exercised

 

 
(2,507,603

)

 
0.53

 

 

 

 

 

Forfeited

 

 
(127,760

)

 
8.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options outstanding, December 31, 2015

 

 
8,134,703

 

C$
3.92

 

 
2.22

 

 

Options exercisable, December 31, 2015

 

 
6,491,040

 

C$
3.15

 

 
1.78

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 
170,061

 

 
4.90

 

 

 

 

 

Exercised

 

 
(101,398

)

 
1.00

 

 

 

 

 

Forfeited

 

 
(271,862

)

 
6.37

 

 

 

 

 

Expired

 

 
(56,800

)

 
1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options outstanding, December 31, 2016

 

 
7,874,704

 

C$
3.91

 

 
1.52

 

 

Options exercisable, December 31, 2016

 

 
6,800,066

 

C$
3.40

 

 
1.26

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 
1,844,500

 

 
1.90

 

 

 

 

 

Exercised

 

 
(2,174,093

)

 
1.04

 

 

 

 

 

Forfeited

 

 
(471,867

)

 
4.74

 

 

 

 

 

Expired

 

 
(1,294,934

)

 
1.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options outstanding, December 31, 2017

 

 
5,778,310

 

C$
4.84

 

 
2.28

 

 

Options exercisable, December 31, 2017

 

 
4,512,878

 

C$
4.99

 

 
1.94

 

 

 

 

 

 

 

 

 

 

 

Summary of options outstanding by exercise price

The following table lists the options outstanding at December 31, 2017 by exercise price:

                                                                                                                                                                                                                   

 

Exercise price

 

Options
outstanding

 

Weighted average
remaining term (yrs)

 

Options
exercisable

 

Weighted average
remaining term (yrs)

 

 

C$0.01

 

 
64,128

 

 
0.08

 

 
64,128

 

 
0.08

 

 

C$0.02 - 1.99

 

 
1,739,300

 

 
4.26

 

 
984,500

 

 
4.25

 

 

C$2.00 - 4.99

 

 
920,397

 

 
0.50

 

 
875,705

 

 
0.37

 

 

C$5.00 - 6.99

 

 
2,272,985

 

 
1.56

 

 
2,066,845

 

 
1.49

 

 

C$7.00 - 9.99

 

 
344,600

 

 
2.31

 

 
225,600

 

 
2.26

 

 

C$10.00 - 13.00

 

 
436,900

 

 
2.21

 

 
296,100

 

 
2.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
5,778,310

 

 

 

 

 
4,512,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table lists the options outstanding at December 31, 2016 by exercise price:

                                                                                                                                                                                    

 

 

Exercise price

 

Options
outstanding

 

Weighted average
remaining term (yrs)

 

Options
exercisable

 

Weighted average
remaining term (yrs)

 

 

 

C$0.01

 

 
79,482

 

 
1.05

 

 
79,482

 

 
1.05

 

 

 

C$0.97 - 1.45

 

 
3,452,300

 

 
0.31

 

 
3,452,300

 

 
0.31

 

 

 

C$2.00 - 4.25

 

 
1,045,111

 

 
1.56

 

 
883,817

 

 
1.34

 

 

 

C$5.00 - 7.00

 

 
2,433,311

 

 
2.63

 

 
1,963,667

 

 
2.47

 

 

 

C$7.00 - 9.00

 

 
412,400

 

 
3.36

 

 
191,000

 

 
3.31

 

 

 

C$10.00 - 13.00

 

 
452,100

 

 
3.21

 

 
229,800

 

 
3.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
7,874,704

 

 

 

 

 
6,800,066

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table lists the options outstanding at December 31, 2015 by exercise price:

                                                                                                                                                                                    

 

Exercise price

 

Options
outstanding

 

Weighted average
remaining term (yrs)

 

Options
exercisable

 

Weighted average
remaining term (yrs)

 

 

C$0.01

 

 
86,280

 

 
2.06

 

 
86,280

 

 
2.06

 

 

C$0.97 - 1.45

 

 
3,608,500

 

 
0.68

 

 
3,570,700

 

 
0.61

 

 

C$2.00 - 4.25

 

 
982,606

 

 
2.27

 

 
775,804

 

 
2.25

 

 

C$5.00 - 7.00

 

 
2,550,570

 

 
3.62

 

 
1,806,347

 

 
3.40

 

 

C$7.00 - 9.00

 

 
373,000

 

 
4.58

 

 
77,000

 

 
4.58

 

 

C$10.00 - 13.00

 

 
533,747

 

 
4.23

 

 
174,909

 

 
4.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
8,134,703

 

 

 

 

 
6,491,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimate of fair value of options weighted average assumptions

                                                                                                                                                                                                           

 

 

 

2017

 

2016

 

2015

 

 

Weighted average fair value

 

$
1.49

 

$
3.02

 

$
4.85

 

 

Weighted average exercise price

 

$
1.90

 

$
4.90

 

$
8.57

 

 

Weighted average share price at grant

 

$
1.90

 

$
4.90

 

$
8.57

 

 

Dividend yield

 

 

nil

 

 

nil

 

 

nil

 

 

Volatility

 

 
110

%

 
76

%

 
76

%

 

Risk-free interest rate

 

 
1.12

%

 
0.75

%

 
0.75

%

 

Expected life

 

 

5 years

 

 

5 years

 

 

5 years

 

 

Forfeiture rate

 

 
6

%

 
1

%

 
1

%

 

Schedule of warrants issued and exercised

                                                                                                                                                                                                           

 

Warrants

 

As at
November 17,
2017

 

Exercised

 

As at
December 31,
2017

 

Exercise Price

 

Weighted
average
remaining
contractual
life (years)

 

 

Series A Warrants

 

 
25,676,368

 

 

—

 

 
25,676,368

 

$
1.61

 

 
4.88

 

 

Series B Warrants

 

 
25,676,368

 

 

—

 

 
25,676,368

 

$
1.61

 

 
1.88

 

 

Series C Warrants

 

 
10,273,972

 

 

—

 

 
10,273,972

 

$
1.46

 

 
1.88

 

 

Series D Warrants

 

 
3,573,830

 

 
(1,874,989

)

 
1,698,841

 

$
0.01

 

 
1.88

 

 

Series E Warrants

 

 
22,431,506

 

 

—

 

 
22,431,506

 

$
1.61

 

 
4.88

 

 

Series F Warrants

 

 
22,431,506

 

 

—

 

 
22,431,506

 

$
1.61

 

 
1.88

 

 

Series B Warrants Alternative Net Number reflecting relevant market data

                                                                                                                                                                                                         

 

 

 

As at
December 31,
2017

 

 

Number of Series B Warrants outstanding

 

 
25,676,368

 

 

Estimated potential number of equivalent shares(a)

 

 
58,218,075

 

 

Applicable VWAP, as calculated per above

 

$
0.55

 

 

(a)

The number of common shares that would be issued pursuant to an Alternate Net Number cashless exercise if the exercise of all of the Series B Warrants had occurred on December 31, 2017.
Series F Warrants Alternative Net Number reflecting relevant market data

                                                                                                                                                                                                         

 

 

 

As at
December 31,
2017

 

 

Number of Series F Warrants outstanding

 

 
22,431,506

 

 

Estimated potential number of equivalent shares(a)

 

 
50,860,741

 

 

Applicable VWAP, as calculated per above

 

$
0.55

 

 

(a)

The number of common shares that would be issued pursuant to an alternative cashless exercise if the exercise of all of the Series F Warrants had occurred on December 31, 2017.