Quarterly report pursuant to Section 13 or 15(d)

STOCK OPTIONS

v3.3.1.900
STOCK OPTIONS
6 Months Ended
Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
10.
STOCK OPTIONS
 
The purpose of the Company’s stock option plan, is to attract, retain and motivate persons of training, experience and leadership to the Company, including their directors, officers and employees, and to advance the interests of the Company by providing such persons with the opportunity, through share options, to acquire an increased proprietary interest in the Company.
 
Options may be granted in respect of authorized and unissued shares, provided that the aggregate number of shares reserved for issuance upon the exercise of all Options granted under the Plan, shall not exceed  10,800,000 or such greater number of shares as may be determined by the Board and approved, if required, by the shareholders of the Company and by any applicable stock exchange or other regulatory authority. Optioned shares in respect of which options are not exercised shall be available for subsequent options.
 
On April 11, 2014 and June 20, 2014 the Company issued 657,430 and 264,230 options to employees and a consultant at an exercise price of $0.165 and $0.23, respectively, with a term of seven years. The options vest one-third on grant date and two thirds equally over the subsequent two years on the anniversary date. During the year ended December 31, 2014, 125,824 of the 657,430 options were cancelled. On February 26, 2015, as a result of the Merger, the options were revalued. The fair value, as re-measured, of the 531,606 April issuance and the 264,230 June issuance was $230,930 and $118,957 respectively. During the six month period ended June 30, 2015, 104,853 options were cancelled and $93,025 and $45,909 (June 30, 2014 - $67,616 and $22,670) has been recorded as stock-based compensation related to the vesting of these stock options. During the three month period ended June 30, 2015, $19,165 and $9,225 (June 30, 2014 - $14,194 and $5,554) has been recorded as stock-based compensation related to the vesting of these stock options.
 
On July 1, 2014, the Company issued 2,972,592 options to management of the Company, at an exercise price of $0.23 with a term of 7 years, which vest May 27, 2015. On February 26, 2015, as a result of the Merger, the options were re-valued at a fair value of $1,259,487 which has been recorded as stock based compensation related to the vesting of these options on June 26, 2015 for the three and six month periods ended June 30, 2015.
 
On February 17, 2015 the Company issued 314,560 options to a director, employees and a consultant with an exercise price of $0.23, that vest one third immediately and two thirds over the next two anniversary dates with an expiry date of seven years. The grant date fair value of the options was $136,613. During the period ended June 30, 2015 52,428 options were cancelled and $60,451 has been recorded as stock-based compensation related to the vesting of these stock options. During the three month period ended June 30, 2015, $9,681 has been recorded as stock-based compensation related to the vesting of these stock options.
 
These options granted and revalued during the period ended June 30, 2015 were valued using the Black-Scholes option pricing model with the following key assumptions:
 
 
 
February 17,
2015
 
 
July 1,
2014
 
 
June 20,
2014
 
 
April 11,
2014
 
Expected life in years
 
 
5
 
 
 
4.35
 
 
 
6.32
 
 
 
4.14
 
Risk free rate
 
 
1.59
%
 
 
1.59
%
 
 
1.59
%
 
 
1.59
%
Dividend yield
 
 
0
%
 
 
0
%
 
 
0
%
 
 
0
%
Forfeiture rate
 
 
0
%
 
 
0
%
 
 
0
%
 
 
0
%
Expected volatility
 
 
114
%
 
 
114
%
 
 
114
%
 
 
114
%
 
A summary of the Company’s outstanding options is as follows:
 
 
 
Number of Options
 
Weighted-Average 
Exercise Price ($)
 
Outstanding, December 31, 2013
 
 
1,310,665
 
 
0.19
 
Exercised
 
 
(1,310,665)
 
 
0.19
 
Issued
 
 
3,894,252
 
 
0.22
 
Cancelled
 
 
(125,824)
 
 
0.17
 
Outstanding, December 31, 2014
 
 
3,768,428
 
 
0.22
 
Cancelled as a result of Merger
 
 
(3,768,428)
 
 
0.22
 
Re-issued as part of Merger
 
 
3,768,428
 
 
0.22
 
Issued
 
 
314,560
 
 
0.23
 
Cancelled
 
 
(157,281)
 
 
0.23
 
Outstanding, June 30, 2015
 
 
3,925,707
 
 
0.22
 
 
The following is a summary of stock options outstanding as of June 30, 2015:
 
Exercise Price ($)
 
Number of Options
 
Expiry Date
 
Number of
Exercisable Options
 
0.165
 
 
531,606
 
April 1, 2021
 
 
354,404
 
0.23
 
 
159,377
 
June 20, 2021
 
 
123,727
 
0.23
 
 
2,972,592
 
July 1, 2021
 
 
2,972,592
 
0.23
 
 
262,132
 
February 17, 2022
 
 
104,857
 
 
 
 
3,925,707
 
 
 
 
3,555,580