Transition report pursuant to Rule 13a-10 or 15d-10

STOCK OPTIONS

v3.5.0.1
STOCK OPTIONS
3 Months Ended
Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
9.
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 nine month period 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 re-valued. The fair value, as re-measured, of the 531,606 options issued in April 2014 and the 264,230 options issued in June 2014 was $230,930 and $118,957 respectively.
 
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 vested 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 vest immediately.
 
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.
 
On November 24, 2015, the Company issued 650,000 options granted to employees that vest over three years at the anniversary date. The grant date fair value of the options was $694,384.
 
On December 14, 2015, the Company issued 2,495,000 options granted to employees, directors and consultants that vest over three years at the anniversary date. The grant date fair value of the options was $1,260,437
 
During the three and twelve month period ended March 31, 2016 the Company recorded $158,244 and $1,464,837, respectively in share based compensation related to the vesting of stock options. During the year ended December 31, 2015 and the nine month period ended December 31, 2014 the Company recorded $1,467,907 and $112,573, respectively in share based compensation related to the vesting of stock options.
 
These options granted and revalued during the year ended March 31, 2016 were valued using the Black-Scholes option pricing model with the following key assumptions:
 
Grant date
 
Expected life
in years
 
Risk
free rate
 
Dividend
rate
 
Forfeiture
rate
 
Expected
volatility
 
Grant date
fair value
 
February 17, 2015
 
 
5
 
 
1.59
%
 
0
%
 
0
%
 
114
%
$
136,613
 
July 1, 2014
 
 
4.35
 
 
1.59
%
 
0
%
 
0
%
 
114
%
$
1,259,487
 
June 20, 2014
 
 
6.32
 
 
1.59
%
 
0
%
 
0
%
 
114
%
$
118,957
 
April 11, 2014
 
 
4.14
 
 
1.59
%
 
0
%
 
0
%
 
114
%
$
230,930
 
November 24, 2015
 
 
7
 
 
1.59
%
 
0
%
 
0
%
 
114
%
$
694,384
 
December 14, 2015
 
 
7
 
 
1.59
%
 
0
%
 
0
%
 
114
%
$
1,260,437
 
 
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
 
Outstanding March 31, 2015
 
 
4,082,988
 
 
0.22
 
Issued
 
 
3,145,000
 
 
1.05
 
Cancelled
 
 
(267,379)
 
 
0.22
 
Outstanding, December 31, 2015
 
 
6,960,609
 
 
0.59
 
Cancelled
 
 
(355,729)
 
 
0.97
 
Outstanding, March 31, 2016
 
 
6,604,880
 
 
0.57
 
 
The following is a summary of stock options outstanding and exercisable as of March 31, 2016:
 
Exercise Price ($)
 
Number of Options
 
Expiry Date
 
Number of
Exercisable Options
 
 
0.165
 
 
437,236
 
April 1, 2021
 
 
291,492
 
 
0.23
 
 
99,610
 
June 20, 2021
 
 
67,107
 
 
0.23
 
 
2,972,592
 
July 1, 2021
 
 
2,972,592
 
 
0.23
 
 
225,442
 
February 17, 2022
 
 
157,285
 
 
1.22
 
 
400,000
 
November 24, 2022
 
 
-
 
 
1.00
 
 
2,470,000
 
December 14, 2022
 
 
-
 
 
 
 
 
6,604,880
 
 
 
 
3,488,476
 
 
The weighted-average remaining contractual term of the outstanding options is 5.89 (March 31, 2015 – 6.27 December 31, 2015 and 2014 – 6.16 and 6.47, respectively) and for the options that are exercisable 5.26 (March 31, 2015 – 6.31, December 31, 2015 and 2014 – 5.49 and 6.33, respectively).