Common shares

The Company’s share capital consists of an unlimited amount of Class A preferred shares authorized, without par value, of which no shares are issued and outstanding; and an unlimited amount of common shares authorized, without par value, of which 364,819,260 shares and 364,101,038 shares were issued and outstanding as of March 31, 2025, and December 31, 2024, respectively.

The basic and diluted losses per common share for the three months ended March 31, 2025 and 2024, were $0.03 and $0.07 per share, respectively. The diluted loss per common share is equal to the basic loss per common share due to the anti-dilutive effect of all convertible securities in periods of loss.  The shares excluded from the computation of diluted loss per share due to their anti-dilutive effect were 28,415,763, and 28,988,071 as of March 31, 2025, and March 31, 2024, respectively.

Stock options

In 2005, the Company’s Board of Directors approved the adoption of the Company’s stock option plan (the “Option Plan”). The Option Plan was most recently approved by the shareholders on June 2, 2023. Eligible participants under the Option Plan include directors, officers, employees, and consultants of the Company. Under the terms of the Option Plan, grants of options will vest over a three-year period: one-third on the first anniversary, one-third on the second anniversary, and one-third on the third anniversary of the grant. The term of the options is five years.

Activity with respect to stock options outstanding is summarized as follows:

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The exercise price of a new grant is set at the closing price for the shares on the Toronto Stock Exchange (TSX) on the trading day immediately preceding the grant date and there is no intrinsic value as of the date of grant. The total intrinsic value of options exercised was $0.2 million for the three months ended March 31, 2025.

We received $0.2 million and $0.1 million from options exercised in the three months ended March 31, 2025 and 2024, respectively.

Stock-based compensation expense from stock options was $0.6 million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there was approximately $1.9 million of unamortized stock-based compensation expense related to the Option Plan. The expenses are expected to be recognized over the remaining weighted-average vesting period of 2.2 years under the Option Plan.

The aggregate intrinsic value of options outstanding, exercisable, and vested and exercisable is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s shares

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As of March 31, 2025, outstanding stock options are as follows (expressed in U.S. dollars):

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The aggregate intrinsic value of the options in the preceding table represents the total pre-tax intrinsic value for stock options, with an exercise price less than the Company’s TSX closing stock price of CAD$0.97 (approximately US$0.67) as of the last trading day in the three months ended March 31, 2025, that would have been received by the option holders had they exercised their options on that date. There were 2,051,482 in-the-money stock options outstanding and 2,051,482 in-the-money stock options exercisable as of March 31, 2025.

The fair value of the options on their respective grant dates was determined using the Black-Scholes model.  There were no options granted in the three months ended March 31, 2025.

Liability-classified stock options

As discussed in note 2 to the consolidated financial statements of the Company dated December 31, 2024, U.S. based employees’ stock options previously classified as equity were reclassified as liabilities. The affected options were remeasured and had a value of $0.5 million on March 31, 2025 and $1.8 million as of December 31, 2024.

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Activity with respect to liability-classified stock options outstanding is summarized as follows:

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The fair value of the liability-classified options on their respective grant dates for the three-months ended March 31, 2025 was determined using the Black-Scholes model with the following assumptions:

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Restricted share units

On June 24, 2010, the Company’s shareholders approved the adoption of the Company’s restricted share unit plan (the “RSU Plan”). Amendments to the RSU Plan were approved by our shareholders on June 3, 2021, and the plan is now known as the Amended and Restated Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”). The RSU&EI Plan was approved most recently by our shareholders on June 2, 2022.

Eligible participants under the RSU&EI Plan include directors and employees of the Company. Granted RSUs are redeemed on the second anniversary of the grant. Upon an RSU redemption, the holder of the RSU will receive one common share, for no additional consideration, for each RSU held.

Activity with respect to RSUs outstanding is summarized as follows:

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Stock-based compensation expense from RSUs was $0.1 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively. The total fair value of RSUs vested was $0.3 million for the three months ended March 31, 2025.

As of March 31, 2025, there was approximately $0.6 million of unamortized stock-based compensation expense related to the RSU&EI Plan. The expenses are expected to be recognized over the remaining weighted-average vesting periods of 1.5 years under the RSU&EI Plan.

As of March 31, 2025, outstanding RSUs were as follows (expressed in U.S. dollars):

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The fair value of the restricted share units on their respective grant dates was determined using the Black-Scholes model.  There were no restricted share units granted in the three months ended March 31, 2025.

Warrants

In February 2023, the Company issued 39,100,000 warrants to purchase 19,550,000 of our common shares at $1.50 per full share.

Activity with respect to warrants is summarized as follows:

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As of March 31, 2025, outstanding warrants were as follows (expressed in U.S. dollars):

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The fair value of the warrants on their issue date was determined using the Black-Scholes model. There were no warrants issued in the three months ended March 31, 2025

Fair value calculation assumptions for stock options and restricted share units

The Company estimates expected future volatility based on daily historical trading data of the Company’s common shares. The risk-free interest rates are determined by reference to Canadian Benchmark Bond Yield rates with maturities that approximate the expected life. The Company has never paid dividends and currently has no plans to do so. Forfeitures and expected lives were estimated based on actual historical experience.

Share-based compensation expense related to stock options and restricted share units is recognized net of estimated pre-vesting forfeitures, which results in expensing the awards that are ultimately expected to vest over the expected life.