SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

The Company adopted two equity incentive plans where the Company may grant Class A stock options. Under the terms of the plans, the maximum number of stock options which may be granted are a total of 10% of the number of shares outstanding assuming conversion of all shares to SVS. The exercise price for stock options issued under the plans will be set by the Compensation Committee of the Board of Directors but will not be less than 100% of the fair market value of the Company’s shares on the grant date. Stock options have a maximum term of 10 years from the date of grant. Stock options vest at the discretion of the Board.

As of December 31, 2023, the Company had 43,672,411 options exercisable and 91,702,766 options outstanding, with exercise prices ranging from C$0.10 to C$1.63. The following table summarizes the Company’s stock option activity and related information:


	Number of Options	Weighted Average Price (CAD$)		Weighted Average Years
Balance, December 31, 2021	54,282,752	$	0.94	2.97
Granted	35,161,000	$	0.68	4.80
Exercised	(133,333)	$	0.80	—
Forfeited/Expired	(13,683,459)	$	0.96	—
Balance, December 31, 2022	75,626,960	$	0.86	3.46
Granted	68,294,666	$	0.20	4.52

Forfeited/Expired	(52,218,860)	$	0.84	—
Balance, December 31, 2023	91,702,766	$	0.34	3.78

During the year ended December 31, 2023 and 2022, the Company recognized share-based compensation of $6.0 million and $7.2 million respectively. In determining the amount of share-based compensation, the Company used the Black-Scholes option pricing model to establish the fair value of options granted during the year with the following key assumptions:


	For the Years Ended December 31,
	2023		2022
Risk-Free Interest Rate	4.02	%	3.44	%
Expected Life (years)	3.51		3.01
Expected Annualized Volatility	86.83	%	82.73	%
Expected Dividend Yield	—		—

Cashless Exercises

During the year ended December 31, 2023, there were no share issuances resulting from cashless exercises. During the year ended December 31, 2022, the Company issued an aggregate of 51,975 Class A shares pursuant to the exercise of 133,333 options. As part of the Company’s equity incentive plans, the Company may permit cashless exercise. The Company withheld exercised shares from the holders to cover the strike price upon issuance. The number of options exercised under the cashless method was 133,333 with shares withheld to cover these costs as of December 31, 2022 being 106,666, resulting in total shares issued to option holders upon cashless exercise of options being 26,667.

Restricted Share Units

On July 27, 2023, the Company issued a total of 9,853,830 restricted share units ("RSUs"), at a issue price of C$0.165 based on the closing price of its Subordinate Voting Shares, to certain officers and employees of the Company. The RSUs are fully vested as of the grant date and expire upon the earlier of 18 months following the grant date or the occurrence of certain events. As of December 31, 2023, the Company recognized share-based compensation of $1.2 million for these fully vested RSU grants.

On November 13, 2023, in connection with the $10.0 million senior secured credit facility agreement, the Company issued 15,900,000 restricted stock units to the lender, ALT Debt II, LP wherein each RSU is exercisable into one (1) Class A Subordinate Voting Share upon the earliest of certain specified conditions at an issue price of $0.20 per RSU.