At June 30, 2022, the Corporation has in place a stock option plan for directors, officers, employees, and consultants of the Corporation (“Stock Option Plan”). An amendment of the Stock Option Plan was approved by shareholders on August 26, 2021. The amendment provides for an increase to the existing limits for common shares reserved for issuance under the Stock Option Plan as well as certain changes to the minimum vesting period applicable to options granted to directors under the Stock Option Plan.

The Stock Option Plan continues to provide for the granting of options to purchase common shares. The exercise price of the stock options granted under this amended plan is not lower than the closing price of the common shares on the TSXV at the close of markets the day preceding the grant. The maximum number of common shares that may be issued upon exercise of options granted under the amended Stock Option Plan shall not exceed 10% of the aggregate

number of issued and outstanding shares of the Corporation. The terms and conditions for acquiring and exercising options are set by the Corporation’s Board of Directors, subject among others, to the following limitations: the term of the options cannot exceed ten years and (i) all options granted to a director will be vested evenly on a monthly basis over a period of at least twelve (12) months, and (ii) all options granted to an employee will be vested evenly on a quarterly basis over a period of at least thirty-six (36) months.

The total number of shares issued to any one consultant within any twelve-month period cannot exceed 2% of the Corporation’s total issued and outstanding shares (on a non-diluted basis). The Corporation is not authorized to grant within any twelve-month period such number of options under the Stock Option Plan that could result in a number of common shares issuable pursuant to options granted to (a) related persons exceeding 2% of the Corporation’s issued and outstanding common shares (on a non-diluted basis) on the date an option is granted, or (b) any one eligible person in a twelve-month period exceeding 2% of the Corporation’s issued and outstanding common shares (on a non-diluted basis) on the date an option is granted.

The following table summarizes information about activities within the Stock Option Plan for the three month period ended:


	June 30, 2022					June 30, 2021
	Weighted average exercise price		Number of options			Weighted average exercise price		Number of options
	CAD$					CAD$
Outstanding at beginning of period		3.94		2,989,381			8.33		911,871
Granted		1.15		1,262,500			—		—
Exercised		—		—			—		—
Forfeited		7.66		(22,263	)		10.35		(7,995	)
Expired		36.00		(2,113	)		—		—
Outstanding at end of period		3.07		4,227,505			8.32		903,876

Exercisable at end of period		6.49		1,197,835		9.13			672,081

The fair value of options granted was estimated using the Black-Scholes option pricing model, resulting in the following weighted average assumptions for the options granted:


	Three Months ended
	June 30, 2022
		$
Exercise price	CAD $		1.15
Share price	CAD $		1.15
Weighted average grant-date fair value per award	CAD $		0.99
Volatility			117.47	%
Risk-free interest rate			3.29	%
Expected life			5.81
Dividend			—

The fair value of stock-based compensation transactions is measured using the Black-Scholes option pricing model. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility for a duration equal to the estimated weighted average life of the instruments, life based on the average of the vesting and contractual periods for employee awards as minimal prior exercises of options in which to establish historical exercise experience; and contractual life for broker warrants), and the risk-free interest rate (based on government bonds). Service and performance conditions attached to the transactions, if any, are not taken into account in determining fair value. The expected life of the stock options is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

Compensation expense recognized under the Stock Option Plan for the three months ended June 30, 2022 and 2021 was as follows:


	Three Months ended
	June 30, 2022		June 30, 2021
	$		$
Research and development expenses		158		50
General and administrative expenses		282		103
Sales and marketing expenses		24		—
		464		153