Stockholders' Deficiency

6 Months Ended

Sep. 30, 2019

Equity [Abstract]

Stockholders' Deficiency

7. STOCKHOLDERS’ DEFICIENCY

a) Authorized stock

As at September 30, 2019, the Company is authorized to issue 125,000,000 (March 31, 2019 – 125,000,000) shares of common stock ($0.001 par value) and 10,000,000 (March 31, 2019 – 10,000,000) shares of preferred stock ($0.001 par value).

At September 30, 2019, there were 31,910,330 (March 31, 2019 – 31,048,571) shares of common stock issued and outstanding. Additionally, at September 30, 2019, there were 4,181,423 (March 31, 2019 – 4,313,085) outstanding exchangeable shares. There is currently one share of the Special Voting Preferred Stock issued and outstanding held by one holder of record, which is the Trustee in accordance with the terms of the Trust Agreement.

b) Exchange Agreement

As initially described in Note 1 above, on February 2, 2016:

● The Company issued approximately 1.197 shares of its common stock in exchange for each common share of iMedical held by the iMedical shareholders who in general terms, are not residents of Canada (for the purposes of the Income Tax Act (Canada). Accordingly, the Company issued 13,376,947 shares;

● Shareholders of iMedical who in general terms, are Canadian residents (for the purposes of the Income Tax Act (Canada)) received approximately 1.197 Exchangeable Shares in the capital of Exchangeco in exchange for each common share of iMedical held. Accordingly, the Company issued 9,123,031 Exchangeable Shares;

● Each outstanding option to purchase common shares in iMedical (whether vested or unvested) was exchanged, without any further action or consideration on the part of the holder of such option, for approximately 1.197 economically equivalent replacement options with an inverse adjustment to the exercise price of the replacement option to reflect the exchange ratio of approximately 1.197:1;

● Each outstanding warrant to purchase common shares in iMedical was adjusted, in accordance with the terms thereof, such that it entitles the holder to receive approximately 1.197 shares of the common stock of the Company for each warrant, with an inverse adjustment to the exercise price of the warrants to reflect the exchange ratio of approximately 1.197:1

● Each outstanding advisor warrant to purchase common shares in iMedical was adjusted, in accordance with the terms thereof, such that it entitles the holder to receive approximately 1.197 shares of the common stock of the Company for each advisor warrant, with an inverse adjustment to the exercise price of the Advisor Warrants to reflect the exchange ratio of approximately 1.197:1; and

● The outstanding 11% secured convertible promissory notes of iMedical were adjusted, in accordance with the adjustment provisions thereof, as and from closing, so as to permit the holders to convert (and in some circumstances permit the Company to force the conversion of) the convertible promissory notes into shares of the common stock of the Company at a 25% discount to purchase price per share in Biotricity’s next offering.

Issuance of common stock, exchangeable shares and cancellation of shares in connection with the reverse takeover transaction as explained above represents recapitalization of capital retroactively adjusting the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree.

c) Share issuances

Share issuances during the year ended March 31, 2019

During the year ended March 31, 2019, the Company issued common shares as part of series of closings under a registered offering, which raised gross proceeds of $3,718,010 through the issuance of 2,635,353 common shares. Issuance costs pursuant to this offering amounted to $80,000.

During the year ended March 31, 2019, the Company also issued an aggregate of 641,329 common stock and has recognized its obligation to issue a further 41,835 shares of common stock (see paragraph d, below), to various consultants. The fair value of these shares determined by using the market price of the common stock as at the date of issuance amounted to $1,145,455 were recognized as general and administrative and research and development expenses, as applicable, in the statement of operations, with corresponding credit to common shares, shares to be issued and additional paid-in-capital, respectively.

During the year ended March 31, 2019, the Company also issued an aggregate of 227,428 shares of its common stock upon exercise of employee stock options and warrants; it received $50,835 of exercise cash proceeds.

Share issuances during the three and six months ended September 30, 2019

During the three and six months ended September 30, 2019, the Company issued common shares as part of a series of closings under a registered offering, for gross proceeds of $14,563 and $28,565, respectively, through the issuance of 25,000 and 47,585 common shares during those respective periods.

During the three and six months ended September 30, 2019, the Company also issued an aggregate of 651,677 and 682,512 shares of its common stock, respectively, pursuant to obligations to issue these as compensation, the fair value of these shares was determined by using the market price of the common stock as at the date of issuance. The Company has recognized the expenses with a corresponding credit to additional paid-in-capital.

d) Shares to be issued

At September 30, 2019, the Company had recognized its obligation to issue a total of 6,250 shares of its common stock to a consultants and advisor. The fair value of these shares amounted to $3,625 and has been expensed to research and development expenses in the consolidated statement of operations, with a corresponding credit to additional paid-in-capital. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance. 

e) Warrant issuances and exercises

Warrant issuances during the year ended March 31, 2019

During the year ended March 31, 2019, the Company issued 849,601 warrants as compensation for advisor and consultant services, which were fair valued at $467,411 and expensed in general and administrative expenses, with a corresponding credit to additional paid in capital. Their fair value has been estimated using a multi-nominal lattice model with an expected life of 2 to 3 years, a risk free rate ranging from 2.13% to 2.81%, stock price of $0.48 to $4.15 and expected volatility of 97.8% to 141.1%.

Warrant issuances during the three and six months ended September 30, 2019

During the three and six months ended September 30, 2019, the Company issued 311,350 and 395,100 warrants, respectively, as compensation for advisor and consultant services, which were fair valued at $79,669 and $99,624, respectively, and expensed in general and administrative expenses, with a corresponding credit to additional paid in capital. Their fair value has been estimated using a multi-nomial lattice model with an expected life of 3 years, a risk free rate of 1.63%, stock price of $0.52 to $0.66 and expected volatility of 114.3% to 129.2%.

Warrant exercises during the year ended March 31, 2019

During the year ended March 31, 2019, 62,838 warrants issued to consultants and advisors were exercised at an average exercise price of $0.81, such that the Company received cash proceeds of $50,835.

Warrant exercises during the three and six months ended September 30, 2019

No warrants were exercised during the three and six months ended September 30, 2019.

Warrant issuances, exercises and expirations or cancellations during the three months ended June 30, 2019 and preceding periods resulted in warrants outstanding at the end of those respective periods as follows:

	Broker Warrants			Consultant Warrants			Warrants Issued on Conversion of Convertible Notes		Private Placement Warrants		Total
As at March 31, 2018		384,152			669,972	*		2,734,530		1,163,722		4,952,376
Less: Exercised		(62,838	)		-			-		-		(62,838	)
Less: Expired/cancelled		-			(31,250	)		-		-		(31,250	)
Add: Issued		-			65,000			-		-		65,000
As at June 30, 2018		321,314			703,722	*		2,734,530		1,163,722		4,923,288
Less: Exercised		-			-			-		-		-
Less: Expired/cancelled		-			-			-		-
Add: Issued		-			393,333			-		-		393,333
As at September 30 2018		321,314			1,097,055	*		2,734,530		1,163,722		5,316,621
Less: Exercised		-			-			-		-		-
Less: Expired/cancelled		-			(126,250	)**		-		-		(126,250	)
Add: Issued		-			50,000			-		-		50,000
As at December 31, 2018		321,314			1,020,805	*		2,734,530		1,163,722		5,240,371
Less: Exercised		-			-			-		-		-
Less: Expired/cancelled		-			(184,916	)**		-		-		(184,916	)
Add: Issued		-			341,268			-		-		341,268
As at March 31, 2019		321,314			1,177,157	*		2,734,530		1,163,722		5,396,723
Less: Exercised		-			-			-		-		-
Less: Expired/cancelled		-			(5,000	)		-		-		(5,000	)
Add: Issued		-			83,750			-		-		83,750
As at June 30, 2019		321,314			1,255,907	*		2,734,530		1,163,722		5,475,473
Less: Exercised		-			-			-		-		-
Less: Expired/cancelled		-			(10,000	)		-		-		(10,000	)
Add: Issued		-			311,350			-		-		311,350
As at September 30, 2019		321,314			1,557,257	*		2,734,530		1,163,722		5,776,823
Exercise Price	$	0.78-$3.00		$	0.48-$7.59			2.00		3.00
Expiration Date		March 2022 to July 2022			September 2019 to June 2022			March 2020 to November 2022		April 2020 to July 2020

*Consultant Warrants include warrants issued to directors and officers of the Company who were not members of the Company’s options plan at the time of issuance. As at September 30, 2019, Consultant Warrants include an aggregate of 488,806 warrants provided to an officer of the Company as compensation while he was not a member of any Company options plan.

** Subsequent to September 30, 2019, 149,626 warrants issued to brokers expired unexercised.

f) Stock-based compensation

2015 Equity Incentive Plan

On March 30, 2015, iMedical approved a Directors, Officers and Employees Stock Option Plan, under which it authorized and issued 3,000,000 options. This plan was established to enable the Company to attract and retain the services of highly qualified and experience directors, officers, employees and consultants and to give such person an interest in the success of the Company. As of March 31, 2018, and March 31, 2017, there were no outstanding vested options and 137,500 unvested options at an exercise price of $.0001 under this plan. These options now represent the right to purchase shares of the Company’s common stock using the same exchange ratio of approximately 1.1969:1, thus there were 164,590 (35,907 had been cancelled) adjusted unvested options as at March 31, 2018. These remaining 164,590 options were exercised during the year ended March 31, 2019. No other grants will be made under this plan.

The following table summarizes the stock option activities of the Company:

	Number of options			Weighted average exercise price ($)
Granted		3,591,000			0.0001
Exercised		(3,390,503	)		0.0001
Outstanding as of December 31, 2015		200,497			0.0001
Cancelled during 2016		(35,907	)		0.0001
Outstanding as of March 31, 2018		164,590			0.0001
Exercised		(164,590	)		0.0001
Outstanding as of September 30 and March 31, 2019		-

The fair value of options at the issuance date were determined at $2,257,953 which were fully expensed during the twelve months ended December 31, 2015 based on vesting period and were included in general and administrative expenses with corresponding credit to additional paid-in-capital. During the twelve months ended December 31, 2015, 3,390,503 (2,832,500 Pre-exchange Agreement) options were exercised by those employees who met the vesting conditions; 50% of the grants either vest immediately or at the time of U.S. Food and Drug Administration (FDA) filing date and 50% will vest upon Liquidity Trigger. Liquidity Trigger means the day on which the board of directors resolve in favor of i) the Company is able to raise a certain level of financing; ii) a reverse takeover transaction that results in the Company being a reporting issuer, and iii) initial public offering that results in the Company being a reporting issuer.

2016 Equity Incentive Plan

On February 2, 2016, the Board of Directors of the Company approved 2016 Equity Incentive Plan (the “Plan”). The purpose of the Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The Plan seeks to achieve this purpose by providing for awards in the form of options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, performance shares, performance units and other stock-based awards.

The Plan shall continue in effect until its termination by the board of directors or committee formed by the board; provided, however, that all awards shall be granted, if at all, on or before the day immediately preceding the tenth (10th) anniversary of the effective date. The maximum number of shares of stock that may be issued under the Plan shall be equal to 3,750,000 shares; provided that the maximum number of shares of stock that may be issued under the Plan pursuant to awards shall automatically and without any further Company or shareholder approval, increase on January 1 of each year for not more than 10 years from the effective date, so the number of shares that may be issued is an amount no greater than 15% of the Company’s outstanding shares of stock and shares of stock underlying any outstanding exchangeable shares as of such January 1; provided further that no such increase shall be effective if it would violate any applicable law or stock exchange rule or regulation, or result in adverse tax consequences to the Company or any participant that would not otherwise result but for the increase.

During July 2016, the Company granted an officer options to purchase an aggregate of 2,499,998 shares of common stock at an exercise price of $2.20 subject to a 3 year vesting period, with the fair value of the options being expensed over a 3 year period. Two additional employees were also granted 175,000 options to purchase shares of common stock at an exercise price of $2.24 with a 1 year vesting period, with the fair value of the options being expensed over a 1 year period. One additional employee was also granted 35,000 options to purchase shares of common stock at an exercise price of $2.24 with a 2 year vesting period, with the fair value of the options expensed over a 2 year period.

During the year ended March 31, 2019, an additional 1,437,500 stock options were granted with a weighted average remaining contractual life from 2.76 to 9.51 years.

During the year ended March 31, 2019, an additional 270,521 stock options were granted with a weighted average remaining contractual life from 2.76 to 9.51 years. During the year ended March 31, 2019, the Company recorded stock based compensation of $1,451,261 in connection with ESOP 2016 Plan (March 31, 2018 - $1,002,201) under general and administrative expenses with corresponding credit to additional paid in capital.

During the three and six months ended September 30, 2019, the Company granted 5,000 options to an employee, as performance-based compensation.

The following table summarizes the stock option activities of the Company:

	Number of options		Weighted average exercise price ($)
Granted		4,418,019		3.1436
Exercised		-		-
Outstanding as of June 30and March 31, 2019		4,418,019		3.1436
Granted		5,000		1.2500
Exercised		-		-
Outstanding as of September 30, 2019		4,423,019		3.1414

During the three and six months ended September 30, 2019, the Company recorded stock-based compensation of $154,996 and $493,885, respectively, in connection with the 2016 equity incentive plan ($372,932 and $728,163 for the three and six months ended September 30, 2018) under general and administrative expenses with a corresponding credit to additional paid in capital.

The fair value of each option granted is estimated at the time of grant using multi-nomial lattice model using the following assumptions:

	2019		2017-2018		2016-2017		2015-2016
Exercise price ($)		0.58		1.24-7.59		2.00 – 2.58		0.0001
Risk free interest rate (%)		1.63-2.5		1.98-2.81		0.45 - 1.47		0.04 - 1.07
Expected term (Years)		3		3		1 - 3		10
Expected volatility (%)		114.3 to 129.2		97.8-145.99		101 – 105		94
Expected dividend yield (%)		0		0		0		0
Fair value of option ($)		0.212		0.6		0.88		0.74
Expected forfeiture (attrition) rate (%)		0.00		0.00		0.00 – 5.00		5.00 - 20.00