6. Shareholders’ Equity

(a)

Authorized shares

The Company is authorized to issue an unlimited number of Common Shares with no par value and an unlimited number of Preferred Shares with no par value.

(b)

Purchases of Equity Shares

Prior to moving the Company listing from the TSX to the NASDAQ, and prior to the purchase of the equity shares on the NASDAQ shown below, the Company purchased shares through a normal-course issuer bid (“NCIB”) program with the TSX, which expired February 28, 2019. On the TSX, the Company repurchased and retired 57,100 shares of common stock through the year ended December 31, 2019. The repurchased stock had an average price of $4.26 per share. The average share price (converted to US$ using a rate of Cdn$1.33 to US$1) on the TSX from January 1, 2019 through the last day of trading on the TSX, March 15, 2019, was $4.22 (for the year ended December 31, 2018, $3.98).

Commencing on May 20, 2019, the Company entered into a share repurchase program on the NASDAQ conducted in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934. The Company is authorized to repurchase up to 1,367,762 of its outstanding common shares, representing 5% of the outstanding common shares of Epsilon as of May 20, 2019, for an aggregate purchase price of not more than $2.5 million. The program will end on May 19, 2020 unless the maximum amount of common shares is purchased before then or Epsilon provides earlier notice of termination.

Repurchases may be made at management’s discretion from time to time through the facilities of the NASDAQ Global Market. The price paid for the common shares will be, subject to applicable securities laws, the prevailing market price of such common shares on the NASDAQ Global Market at the time of such purchase. The Company intends to fund the purchase out of available cash and does not expect to incur debt to fund the share repurchase program.

The following table contains information about our repurchase of equity securities during the year ended December 31, 2019:


				Total number		Maximum number
				of shares		of shares that
				purchased as		may yet be
	Total number	Average price		part of publicly		purchased under
	of shares	paid per		announced plans		the plans or
	purchased	share		or programs		programs
Beginning balance at May 20, 2019					—		1,367,762
May 2019	16,148	$	4.17
June 2019	221,041	$	4.12
July 2019	55,112	$	3.90
August 2019	56,432	$	3.66
September 2019	14,797	$	3.79
October 2019	42,307	$	3.38
November 2019	290,259	$	3.41
Total for the year ended December 31, 2019	696,096	$	3.72		696,096		671,666

(c)

Stock Options

The Company maintains a stock option plan for directors, officers, employees and consultants of the Company and its subsidiaries.

Through December 31, 2019, the Company had issued stock options covering 245,000 Common Shares at an overall average price of $5.27 per Common Share to directors, officers and employees of the Company and its subsidiaries. A maximum amount of 755,000 Common Shares are available for future option issuances.

The following table summarizes stock option activity for the years ended December 31, 2019 and 2018:


	Year ended			Year ended
	December 31, 2019			December 31, 2018
		Weighted				Weighted
	Number of	Average		Number of		Average
	Options	Exercise		Options		Exercise
Exercise price in US$	Outstanding	Price (1)		Outstanding		Price (1)
Balance at beginning of period	290,750	$	5.02		330,750	$	5.14
Exercised	(25,000)		2.17		—		—
Expired/Forfeited	(20,750)		5.37		(40,000)		6.00
Balance at period-end	245,000	$	5.27		290,750	$	5.02

Exercisable at period-end	206,670	$	5.32		210,249	$	5.02

At December 31, 2019, the Company had unrecognized stock based compensation related to these options of $1,867 to be recognized over a weighted average period of 0.08 years (for the year ended December 31, 2018: $27,877 over 1.1 years). The aggregate intrinsic value at December 31, 2019 was nil (at December 31, 2018: $58,664).

During the year ended December 31, 2019, the Company awarded no stock options (During the year ended December 31, 2018: no stock options).

The following table summarizes information for stock options outstanding at December 31, 2019:


					Weighted
			Option		Average
	Number of	Number of	Pricing		Remaining
	Options	Options	Model		Contractual Life
Exercise Price	Outstanding	Exercisable	Valuations		(in years)
As of December 31, 2019
$5.02	115,000	76,670	$	201,630	4.08
$5.50	130,000	130,000		276,299	2.43
Total	245,000	206,670	$	477,929	3.04

The value of the options was recorded as stock based compensation expense, with an offsetting amount to additional paid‑in capital based on the vesting terms. Stock based compensation for the options, for the years ended December 31, 2019 and 2018, was $25,203 and $83,328, respectively.

(d)

Share Compensation Plan

A Share Compensation Plan (the “Plan”) was adopted by the Board on April 13, 2017 and approved by the shareholders at the Annual General Meeting in April 2017. The Plan provides that designated participants may, as determined by the Board, be issued Common Shares in an amount up to 100% of the participant’s compensation paid by the Company in consideration of the participant’s service for the current year divided by the market price of the Common Shares on the NASDAQ at the date of issuance of the Common Shares in the current year.

In December 2019, 184,500 common shares of Restricted Stock were awarded to the Company’s officers, employees, and board of directors (in December 2018, 174,500 shares). These shares vest over a three year period, with one-third of the shares being issued per period on the anniversary of the award resolution. The vesting of the shares is contingent on the individuals continued employment or service. The vesting of the shares is contingent on the individuals continued employment or service. The Company determined the fair value of the granted Restricted Stock based on the market price of the common shares of the Company on the date of grant. Stock compensation expense for the granted Restricted Stock is recognized over the vesting period. Stock compensation expense recognized during the years ended December 31, 2019 and 2018 was $485,257 and $246,904, respectively.

At December 31, 2019, the Company had unrecognized stock based compensation related to these shares of $1,641,295 to be recognized over a weighted average period of 1.12 years (for the year ended December 31, 2018: $1,767,975 over 1.42 years).

The following table summarizes Restricted Stock activity for the years ended December 31, 2019 and 2018:


	Year ended		Year ended
	December 31, 2019		December 31, 2018
		Weighted		Weighted
	Number of	Average	Number of	Average
	Shares	Remaining Life	Shares	Remaining Life
	Outstanding	(years)	Outstanding	(years)
Balance non-vested Restricted Stock at beginning of period	282,833	2.56	162,500	1.87
Granted	184,500	3.00	174,500	3.00
Vested	(106,834)	—	(54,167)	—
Forfeited	(14,000)	2.64	—	—
Balance non-vested Restricted Stock at end of period	346,499	1.67	282,833	2.56