12. SHARE BASED COMPENSATION

The Company has granted share-based compensation consisting of share purchase options and restricted share units ("RSUs") under the terms of the 2021 Stock and Incentive Plan, which was approved by shareholders in May 2021 and adopted by the Board in September 2021. The options and RSUs have been granted with time-based vesting provisions over a period of 0 to 3 years. Vested RSUs will settle in Subordinate Voting Shares on a one-to-one basis as soon as practicable following the vesting date, and vested options will settle in Subordinate Voting Shares on a one-to-one basis as soon as practicable following the exercise date.

Additionally, the Company awarded deferred share units ("DSUs") to directors as compensation for service under the terms of the Deferred Share Unit Plan, which was approved by shareholders in May 2021 and adopted by the Board in September 2021. The initial tranche of DSUs vested on June 1, 2022, and subsequent awards vest twelve months following the date of grant. Vested DSUs will settle in Subordinate Voting Shares on a one-to-one basis as soon as practicable following the termination of service of an eligible director.

Compensation expense for share-based awards was $10,197,720 during year ended December 31, 2022 (December 31, 2021 - $5,405,548). These amounts are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss). The activity and assumptions for the share-based compensation plans are included below.

Share Purchase Options

The options outstanding under this plan are as follows:

	Stock options outstanding		Weighted- average exercise price	Weighted average remaining contractual term (years)		Aggregate Intrinsic Value
Outstanding, January 1, 2022	2,834,288	$	3.56
Granted	-		-
Forfeited	-		-
Expired	-		-
Exercised¹	-		-
Outstanding, December 31, 2022	2,834,288	$	3.56	8.95	$	4,166,403
Exercisable, December 31, 2022	1,803,985	$	3.56	8.95	$	2,651,858

¹No options were exercised during the years ended December 31, 2022 or 2021

The weighted average assumptions used to determine the fair value of the options granted, using the Black-Scholes options pricing model are as follows:

For the year ended, December 31,	2022	2021
Fair value of options granted	N/A	2.21
Valuation assumptions:
Expected life (years)	5.55	5.72
Risk-free interest rate	1.27%	1.27%
Average forfeiture rate	0.00%	0.00%
Expected dividend yield	0.00%	0.00%
Expected volatility	71.62%	71.62%

The Company incurred share-based compensation expense related to the stock options of $2,046,166 during the year ended December 31, 2022 (December 31, 2021 - $2,858,702). As of December 31, 2022, the Company had $1,293,484 of unrecognized compensation expense related to non-vested stock options. The remaining expense is expected to be recognized over a weighted average period of approximately 1.4 years.

Restricted Share Units

As of December 31, 2022, the Company's nonvested RSUs outstanding are as follows:

	Restricted Share Units			Weighted- average grant date fair value	Weighted average remaining contractual term (years)		Aggregate Intrinsic Value
Nonvested, January 1, 2022	892,580		$	3.56
Granted¹	1,214,321			5.75
Forfeited	-			-
Vested and settled²	(2,024,401	)		4.78
Nonvested, December 31, 2022	82,500		$	5.75	0.67	$	414,975

¹The weighted-average grant-date fair value of the RSUs granted in 2021 was $3.56 per unit.

²The settlement date fair value of the RSUs that vested and settled during the years ended December 31, 2022 and 2021 was $11,609,135 and $nil, respectively.

The Company incurred share-based compensation expense related to the RSUs of $7,415,252 during the year ended December 31, 2022 (December 31, 2021 - $2,488,955). As of December 31, 2022, the Company had $252,724 of unrecognized compensation expense related to non-vested RSUs. The expense is expected to be recognized over a weighted average period of approximately 0.67 years.

Deferred Share Units

As of December 31, 2022, the Company's DSUs outstanding are as follows:

	Deferred Share Units		Weighted- average grant date fair value	Weighted average remaining contractual term (years)		Aggregate Intrinsic Value
Outstanding, January 1, 2022	137,641	$	3.56
Granted¹	88,694		5.75
Forfeited	-		-
Settled	-		-
Outstanding, December 31, 2022	226,335	$	4.42	0.42	$	1,138,465
Vested², December 31, 2022	137,641	$	3.56	N/A	$	692,334

¹The weighted-average grant-date fair value of the DSUs granted in 2021 was $3.56 per unit.

²The fair value of the DSUs that vested during the years ended December 31, 2022 and 2021 was $490,002 and $nil, respectively.

The Company incurred share-based compensation expense related to the DSUs of $736,302 during the year ended December 31, 2022 (December 31, 2021 - $51,891). As of December 31, 2022, the Company had $211,800 of unrecognized compensation expense related to non-vested DSUs. The expense is expected to be recognized within one year of grant.