| Share Capital |
Authorized
capital
The
Company’s authorized share capital consists of:
| ● |
an
unlimited number of common shares without par value; and |
| |
|
| ● |
an
unlimited number of preferred shares issuable in series. |
Common
shares
For
the three months ended March 31, 2026:
| ● | On
March 12, 2026, the Company issued 8,152,200
common shares to two investors for cash proceeds of $1,500,000. Warrants issued with the common shares with an issuance date fair value of $1,103,119 were netted against the gross
proceeds, yielding net proceeds of $396,881. |
| ● | On
March 24, 2026, 135,206
common shares previously issued to an investor were returned to treasury for $30,742. |
As
of March 31, 2026, the Company had 265,964,990 common shares issued and outstanding.
For
the three months ended March 31, 2025:
| ● | On
January 13, 2025, the Company issued 1,858,032
common shares at an average price of CAD $0.6660 per share totaling $935,618
to the former shareholders of The Leaf at 73740 LLC. |
| ● | On
March 12, 2025, the Company issued 600,000 common shares for services, with a grant date
fair value of $100,000. |
Preferred
shares
For
the three months ended March 31, 2026:
| ● | On
March 12, 2026, the Company issued 10,726,579
Series A-1 preferred shares to an investor in a private placement for aggregate gross proceeds of $3,000,000
(CAD $0.38
per share, determined using the Bank of Canada USD:CAD exchange rate published two business days prior to closing). The preferred
shares have no par value and were issued under the authority in the Company’s articles to issue an unlimited number of
preferred shares in series. Each preferred share is convertible, at the option of the holder at any time, into one common share of
the Company at a conversion price of CAD $0.38
per common share, subject to customary adjustments. This conversion provision was determined to have an inception date fair value of
$910,517, which was netted against the gross proceeds, yielding net proceeds of $2,089,483. At any time after the eighteen-month
anniversary of issuance (September 12, 2027), the Company may cause all outstanding preferred shares to be converted into common
shares at the conversion price then in effect, upon the occurrence of either (i) a change of control of the Company, or (ii) the
20-day volume-weighted average trading price of the common shares being at least CAD $0.70
during any 20-trading-day period following the eighteen-month anniversary. The preferred shares are entitled to cumulative dividends
at a rate of 15%
per annum, payable quarterly in arrears. Two-thirds of each dividend (equal to 10%
per annum) is payable in cash, and one-third (equal to 5%
per annum) is payable in kind in additional preferred shares. The Company may, on one or more occasions, defer the cash portion of a
dividend payment until the next succeeding dividend payment date; however, if a cash dividend payment is deferred by more than 45
days, the full 15% per annum rate applies to the deferred cash portion (rather than 10%). In the event of a liquidation, dissolution
or winding-up of the Company, holders of preferred shares are entitled to receive, in preference to holders of common shares, an
amount equal to CAD $0.38
per preferred share plus any declared but unpaid dividends, before any distribution is made to common shareholders. Except as
required by law, the preferred shares do not carry voting rights and holders of preferred shares are not entitled to vote at any
shareholder meeting. Upon conversion, the resulting common shares carry the voting rights associated with common shares. The
preferred shares are not redeemable at the option of either the holder or the Company. The preferred shares and the underlying
conversion shares are subject to a four-month hold period under Canadian securities laws and CSE policies, and have not been and
will not be registered under the U.S. Securities Act; they were issued in reliance on Section 4(a)(2) and/or Regulation D under the
U.S. Securities Act. The Company has covenanted to use its best efforts, following expiry of the applicable hold periods, to
register the conversion shares for sale on the Canadian Securities Exchange, or other similar exchange. |
As of March 31, 2026, the Company had 10,726,579
Series A-1 preferred shares issued and outstanding.
Warrants
In
August 2025, in connection with the equity issuance in Q3 2025, a total of 8,603,800 warrants to purchase the Company’s stock were
issued. The warrants are exercisable at a price of CAD$0.30 per share (USD $0.22) for a period of 24 months from the date of issuance.
The Company recorded a derivative liability of $1,108,817 related to the issuance of these warrants during the year ended December 31,
2025.
In
December 2025, in connection with the conversion of convertible debentures, a total of 60,155,339 warrants to purchase the Company’s
stock were issued. The warrants are exercisable at a price of CAD$0.30 per share (USD $0.22) for a period of 36 months from the date
of issuance. The Company recorded a derivative liability of $7,708,258 related to the issuance of these warrants during the year ended
December 31, 2025.
On
February 27, 2026, the Company amended and restated a warrant to purchase common stock originally issued on May 25, 2023, reducing
the exercise price from CAD $0.80 to CAD$0.30
per share and extending the exercise period by five years from February 27, 2026 to February 26, 2031.
In
March 2026, in connection with the equity issuance in Q1 2026, a total of 8,152,200 warrants to purchase the Company’s stock were
issued. The warrants are exercisable at a price of CAD$0.30 per share (USD $0.22) for a period of 24 months from the date of issuance.
The Company recorded a derivative liability of $1,103,118 related to the issuance of these warrants during the three months ended March
31, 2026.
The
following table summarizes the warrants outstanding that remain outstanding as of March 31, 2026:
Schedule
of Warrants Outstanding
| Expiration Date | |
Outstanding | | |
Exercise Price | |
| April 19, 2026 | |
| 22,395,950 | | |
$ | 1.10 | |
| August 19, 2026 | |
| 2,742,519 | | |
$ | 0.44 | |
| December 9, 2026 | |
| 8,473,500 | | |
$ | 0.29 | |
| December 15, 2026 | |
| 2,341,600 | | |
$ | 0.29 | |
| August 14, 2027 | |
| 8,603,800 | | |
$ | 0.22 | |
| March 19, 2028 | |
| 8,152,200 | | |
$ | 0.22 | |
| November 30, 2028 | |
| 60,155,339 | | |
$ | 0.22 | |
| February 26, 2031 | |
| 5,687,500 | | |
$ | 0.22 | |
| Total warrants outstanding | |
| 118,552,408 | | |
| | |
2019
Stock incentive plan
The
omnibus 2019 stock incentive plan permits the Board of Directors of the Company to grant options to employees and non-employees to acquire
common shares of the Company at fair market value on the date of approval by the Board of Directors. Vesting is determined on an award-by-award
basis.
There
were a total of 1,035,000 and 579,744 options granted during the three months ended March 31, 2026 and year ended December 31, 2025,
respectively. As of March 31, 2026 and December 31, 2025, there were 13,077,060 and 12,042,060, respectively, options outstanding. For
the three months ended March 31, 2026 and 2025, there was $6,577 and $234,668, respectively, of share-based compensation expense related
to the 2019 stock incentive plan. For the three months ended March 31, 2026 and year ended December 31, 2025, there were 0 and 302,666
options exercised. All option exercises were on a cashless basis.
Stock
option activity is summarized as follows:
Schedule of Stock Option Activity
| | |
Number of Stock Options | | |
Weighted-Average Exercise Price | | |
Weighted-Average Remaining Contractual Life | | |
Aggregate Intrinsic Value | |
| Balance as of December 31, 2024 | |
| 13,815,048 | | |
$ | 0.39 | | |
| 4.21 | | |
$ | 740,452 | |
| Granted | |
| 579,744 | | |
$ | 0.19 | | |
| 9.06 | | |
$ | 27,854 | |
| Exercised | |
| (302,666 | ) | |
$ | 0.15 | | |
| 4.09 | | |
$ | 55,575 | |
| Forfeited | |
| (2,050,066 | ) | |
$ | 0.15 | | |
| 4.15 | | |
$ | 68,400 | |
| Balance as of December 31, 2025 | |
| 12,042,060 | | |
$ | 0.38 | | |
| 3.35 | | |
$ | 644,330 | |
| Granted | |
| 1,035,000 | | |
$ | 0.20 | | |
| 9.90 | | |
$ | 46,575 | |
| Balance as of March 31, 2026 | |
| 13,077,060 | | |
$ | 0.37 | | |
| 3.40 | | |
$ | 690,905 | |
The
Company used the Black-Scholes Option Pricing model to estimate the fair value of the options granted during the three months ended March
31, 2026 and year ended December 31, 2025, using the following range of assumptions:
Schedule
of Black-Scholes Option Pricing Model Assumptions
| |
|
March
31,
2026 |
|
|
December
31,
2025 |
|
| |
|
|
|
|
|
|
| Expected
stock price volatility |
|
|
156.19 |
% |
|
|
156.11%
- 239.57 |
% |
| Risk-free
annual interest rate |
|
|
3.71 |
% |
|
|
4.11%
- 5.23 |
% |
| Expected
life (years) |
|
|
6.5 |
|
|
|
1.5
– 9.8 |
|
| Expected
annual dividend yield |
|
|
0.00 |
% |
|
|
0.00 |
% |
The
following table summarizes the stock options that remain outstanding as of March 31, 2026:
Schedule
of Options Remain Outstanding
| Exercise Price (CAD$) | | |
Date | |
Outstanding | | |
Exercisable | | |
Vesting Condition |
| $ | 0.25 | | |
October 2026 | |
| 300,000 | | |
| 141,667 | | |
One year vesting |
| $ | 0.25 | | |
November 2026 | |
| 300,000 | | |
| 300,000 | | |
One year vesting |
| $ | 0.65 | | |
February 2029 | |
| 12,548 | | |
| 12,548 | | |
One year vesting |
| $ | 0.65 | | |
February 2029 | |
| 76,009 | | |
| 76,009 | | |
Immediate vesting |
| $ | 0.65 | | |
February 2029 | |
| 2,560,083 | | |
| 2,560,083 | | |
Three year vesting |
| $ | 0.65 | | |
February 2029 | |
| 6,274 | | |
| 6,274 | | |
Immediate vesting |
| $ | 0.65 | | |
February 2029 | |
| 264,836 | | |
| 264,836 | | |
Immediate vesting |
| $ | 0.65 | | |
July 2029 | |
| 2,824,918 | | |
| 2,824,918 | | |
Immediate vesting |
| $ | 0.15 | | |
October 2029 | |
| 60,000 | | |
| 60,000 | | |
One year vesting |
| $ | 0.15 | | |
November 2029 | |
| 1,985,000 | | |
| 1,985,000 | | |
One year vesting |
| $ | 0.15 | | |
November 2029 | |
| 1,957,500 | | |
| 1,957,500 | | |
One year vesting |
| $ | 0.01 | | |
October 2030 | |
| 887,112 | | |
| 887,112 | | |
One year vesting |
| $ | 1.05 | | |
October 2031 | |
| 31,369 | | |
| 31,369 | | |
Immediate vesting |
| $ | 0.15 | | |
July 2034 | |
| 66,667 | | |
| 66,667 | | |
Immediate vesting |
| $ | 0.15 | | |
July 2034 | |
| 66,667 | | |
| 66,667 | | |
One year vesting |
| $ | 0.15 | | |
July 2034 | |
| 200,000 | | |
| 111,111 | | |
Three year vesting |
| $ | 0.20 | | |
January 2035 | |
| 443,077 | | |
| 443,077 | | |
One year vesting |
| $ | 0.25 | | |
February 2035 | |
| 1,035,000 | | |
| 28,750 | | |
Three year vesting |
| | | | |
| |
| 13,077,060 | | |
| 11,823,588 | | |
|
Restricted
Share Unit Plan
In
December 2022, the Company formally adopted the Restricted Share Unit Plan (“RSU Plan”). The RSU Plan permits the Board of
Directors of the Company to grant Restricted Share Units (“RSU’s”) to employees and non-employees to acquire common
shares of the Company at fair market value on the date of approval by the Board of Directors. Vesting is determined on an award-by-award
basis. The granted shares are not considered outstanding until exercised. During the three months ended March 31, 2026 and year ended
December 31, 2025, 0 and 26,084,258 units were granted, 0 and 10,128,496 units were vested, 0 and 7,380 were forfeited, and 0 and 7,185,206
were exercised, respectively. For the three months ended March 31, 2026 and 2025, the Company recognized share-based compensation expense
of $482,890 and $232,794, respectively, for units that were vested. The average grant-date fair value of the RSU’s during the year
ended December 31, 2025 was $0.20.
Restricted
share unit activity is summarized as follows:
Schedule
of Restricted Share Unit Activity
| | |
Number of Restricted Share Units | | |
Weighted-Average Exercise Price | | |
Weighted-Average Remaining Contractual Life | |
| Balance as of December 31, 2024 | |
| 7,192,586 | | |
$ | 0.17 | | |
| 4.73 | |
| Granted | |
| 26,084,258 | | |
$ | 0.20 | | |
| 4.96 | |
| Exercised | |
| (7,185,206 | ) | |
$ | 0.15 | | |
| 3.87 | |
| Forfeited | |
| (7,380 | ) | |
$ | 0.15 | | |
| 3.87 | |
| Balance as of December 31, 2025 | |
| 26,084,258 | | |
$ | 0.20 | | |
| 4.71 | |
| Granted | |
| - | | |
$ | - | | |
| - | |
| Exercised | |
| - | | |
$ | - | | |
| - | |
| Forfeited | |
| - | | |
$ | - | | |
| - | |
| Balance as of March 31, 2026 | |
| 26,084,258 | | |
$ | 0.20 | | |
| 4.71 | |
Reserves
Reserves
includes accumulated foreign currency translation adjustments and the accumulated fair value of share-based compensation and warrants
transferred from share-based payment reserve and warrant reserve upon cancellation or expiry of the share options and warrants.
|