Share Capital and Other Equity Instruments

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Share Capital and Other Equity Instruments

NOTE 7 - SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

Authorized Capital

The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Upon the liquidation, dissolution, or winding up of the Company, holders of common stock are entitled to share rateably in all assets of the Company that are legally available for distribution. As of December 31, 2020, 100,000,000 shares of common stock were authorized under the Company’s articles of incorporation.

On December 30, 2020, the Company amended its articles of incorporation to designate and authorize 20,000,000 shares of Series B preferred stock. The Company’s Series B preferred stock is convertible by the holder at any time into common stock at a rate of one to one.

Conversion of Series B Preferred Stock

On December 30, 2020, a holder of the Company’s Series B Preferred Stock converted 250,000 shares of Series B Preferred Stock into 250,000 shares of common stock.

Issuance of Common Stock for Accounts Payable

During the year ended December 31, 2020, the Company issued 433,047 shares of common stock to various vendors in connection with the payment of accounts payable of $756,523. The shares were valued at the book value of the accounts payable, as that value was more readily determinable.

Shares Issued in Exchange for Services

During the year ended December 31, 2019, the Company issued 38,116 shares to consultants in exchange for services. The Company valued these shares at $88,465.

September Private Placement

On September 25, 2020, the Company issued 36,871 shares of its common stock for gross proceeds of $250,000 and net proceeds of $227,500.

December Private Placement

On December 8, 2020, the Company issued 221,225 shares of its Series B preferred stock for gross proceeds of $300,000 and net proceeds of $260,500.

Conversion of Related Party Advance

On July 21, 2020, the Company issued 239,326 shares of common stock in exchange for the February 2019 Note (face value of $66,000), the March 2019 Note (face value of $150,000) and related party advances in the amount of $22,000. Given that the holder of these notes and advances is a related party, this was treated as a capital transaction and no gain or loss was recognized.

Stock Options

	Number of Shares			Weighted Average Exercise Price (USD)		Weighted Average Grant Date Fair Value (USD)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (USD)
Outstanding – January 1, 2019		689,832		$	1.94	$	1.94
Granted		448,713		$	1.99	$	1.49
Expired, forfeited, or cancelled		(341,172	)	$	1.99	$	0.36
Outstanding – December 31, 2019		797,373		$	1.99	$	0.72
Granted		378,800		$	0.94	$	5.22
Expired forfeited, or cancelled		(246,408	)	$	1.94	$	0.88
Outstanding – December 31, 2020		929,765		$	1.53	$	2.50		6.1	$	2,537,245
Exercisable at December 31, 2020		929,765		$	1.53	$	2.50		6.1	$	2,537,245

The Company’s stock based compensation expense related to stock options for the years ended December 31, 2020 and 2019 was $1,977,155 and $535,587, respectively. As of December 31, 2020, the Company had $0 in unamortized stock option expense.

The Company utilized the Black-Scholes option-pricing model to determine the fair value of these stock options, using the assumptions as outlined below.

Stock Price	$	5.92
Dividend Yield		0	%
Expected Volatility		84.7	%
Weighted Average Risk-Free Interest Rate		0.37	%
Expected life (in years)		1.5 – 4.2

Stock price – Based on closing price of the Company’s common stock on the date of grant.

Weighted average risk-free interest rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities, which correspond to the expected term of the Company’s stock options.

Dividend yield —The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future.

Expected volatility —Based on the historical volatility of comparable companies in a similar industry.

Expected term —The Company has had no stock options exercised since inception. The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method provided in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment, which averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options.

Warrants

On February 24, 2020, the Company issued warrants to purchase 130,920 shares of common stock to the lender of the February 2020 Note. The warrants are exercisable at $0.38 USD ($0.50 CAD) per share, are fully vested at the date of issuance, and expire on February 24, 2025. The warrants were accounted for as a component of equity, as the instrument contains no features which would preclude such classification. As discussed in Note 4, the warrants were recorded as a discount in the amount of $50,000 on the note payable and amortized over the term of the note.

The following table summarizes information about shares issuable under warrants outstanding at December 31, 2020:

	Warrant shares outstanding			Weighted average exercise price (USD)			Weighted average remaining life		Intrinsic value
Outstanding at January 1, 2019		219,510		$	2.95			0.08
Issued		84,381		$	3.21
Outstanding at December 31, 2019		303,891		$	3.02			1.06	$	-
Issued		3,222,331		$	1.96
Forfeited		(274,816	)	$	(3.00	)
Outstanding at December 31, 2020		3,251,406		$	1.95			4.97	$	-
Exercisable at December 31, 2020		3,251,406		$	1.95			4.97	$	8,040,545