Exhibit 99.1 |
|
Tel: 416 865 0200
Fax: 416 865 0887
www.bdo.ca
|
BDO Canada LLP
222 Bay Street
Suite 2200, PO Box 131
Toronto ON M5K 1H1 Canada
|
Note
|
December 31, 2020
|
December 31, 2019
|
|||||||||
Assets
|
|||||||||||
Current Assets:
|
|||||||||||
Cash and cash equivalents
|
$
|
25,468,805
|
$
|
814,492
|
|||||||
Amounts receivable
|
71,566
|
84,097
|
|||||||||
Deposits
|
765,599
|
481,400
|
|||||||||
Prepaid expense
|
642,214
|
369,453
|
|||||||||
Total Current Assets
|
$
|
26,948,184
|
$
|
1,749,442
|
|||||||
Property, plant, and equipment
|
3
|
245,372
|
-
|
||||||||
Right of use assets - leases
|
4
|
866,601
|
30,394
|
||||||||
Patent rights
|
5
|
1,777,978
|
1,601,745
|
||||||||
Total Assets
|
$
|
29,838,135
|
$
|
3,381,581
|
|||||||
Liabilities
|
|||||||||||
Current Liabilities:
|
|||||||||||
Accounts payable and accrued liabilities
|
6
|
$
|
4,528,890
|
$
|
11,412,896
|
||||||
Current portion of lease liability
|
4
|
165,768
|
21,071
|
||||||||
Note payable
|
7
|
1,885,497
|
$
|
-
|
|||||||
Warrant liability
|
8
|
36,316,681
|
3,621,444
|
||||||||
Total Current Liabilities
|
$
|
42,896,836
|
$
|
15,055,411
|
|||||||
Long-term lease liability
|
4
|
750,791
|
8,001
|
||||||||
Total Liabilities
|
$
|
43,647,627
|
$
|
15,063,412
|
|||||||
Shareholders' Deficiency
|
|||||||||||
Share capital
|
9
|
$
|
215,819,053
|
$
|
194,859,415
|
||||||
Contributed surplus
|
9,400,885
|
8,303,527
|
|||||||||
Deficit
|
(239,029,430
|
)
|
(214,844,773
|
)
|
|||||||
Shareholders' Deficiency
|
$
|
(13,809,492
|
)
|
$
|
(11,681,831
|
)
|
|||||
Total Liabilities and Deficiency
|
$
|
29,838,135
|
$
|
3,381,581
|
Commitments (Note 11)
|
Subsequent events (Note 17)
|
See notes to the consolidated financial statements
|
Approved on behalf of the Board:
|
"signed"
|
"signed"
|
|
Paul Cataford
|
David McNally
|
|
Director
|
Chairman and CEO
|
Note
|
December 31, 2020
|
December 31, 2019
|
|||||||||
Revenue
|
$
|
20,000,000
|
$
|
-
|
|||||||
Expenses
|
|||||||||||
Amortization
|
$
|
236,842
|
$
|
32,555
|
|||||||
Consulting fees
|
536,968
|
1,136,146
|
|||||||||
Foreign exchange loss (gain)
|
113,972
|
37,972
|
|||||||||
Impairment of patent rights
|
5
|
45,981
|
-
|
||||||||
Insurance
|
698,961
|
480,362
|
|||||||||
Interest charges
|
1,091,216
|
422,989
|
|||||||||
Management salaries and fees
|
2,549,924
|
2,547,484
|
|||||||||
Marketing and investor relations
|
140,976
|
289,350
|
|||||||||
Office and general
|
385,163
|
436,051
|
|||||||||
Professional fees
|
2,150,958
|
943,535
|
|||||||||
Rent
|
41,320
|
58,064
|
|||||||||
Research and development
|
7,937,171
|
51,418,056
|
|||||||||
Stock based compensation
|
9 b
|
|
1,097,358
|
1,651,119
|
|||||||
Travel
|
27,622
|
272,594
|
|||||||||
$
|
17,054,432
|
$
|
59,726,277
|
||||||||
Net Earnings (Loss) from Operations
|
2,945,568
|
(59,726,277
|
)
|
||||||||
Finance Income (Cost)
|
|||||||||||
Interest received from investments
|
$
|
29,143
|
$
|
115,584
|
|||||||
Gain on settlements
|
6
|
2,512,626
|
-
|
||||||||
Gain (loss) on change in fair value of warrants
|
8
|
(27,855,678
|
)
|
19,800,645
|
|||||||
Warrant liability issue cost
|
(1,816,316
|
)
|
(2,097,031
|
)
|
|||||||
$
|
(27,130,225
|
)
|
$
|
17,819,198
|
|||||||
Net and Comprehensive Loss
|
$
|
24,184,657
|
$
|
41,907,079
|
|||||||
Basic and Diluted Loss per Share
|
$
|
0.36
|
$
|
1.37
|
|||||||
Weighted Average Number of Common Shares
|
|||||||||||
Basic and Diluted
|
67,008,897
|
30,689,545
|
|||||||||
See notes to the consolidated financial statements
|
Note
|
Share Capital
Number
|
Share Capital
Amount
|
Contributed
Surplus
|
Deficit
|
Total
Deficiency
|
||||||||||||||||||
Balance - December 31, 2018
|
21,675,849
|
$
|
170,502,394
|
$
|
6,652,409
|
$
|
(172,937,694
|
)
|
$
|
4,217,109
|
|||||||||||||
Issued pursuant to agency agreement
|
9 a
|
|
8,455,882
|
13,717,131
|
-
|
-
|
13,717,131
|
||||||||||||||||
Issued pursuant to private placements
|
9 a
|
|
8,757,444
|
5,727,971
|
-
|
-
|
5,727,971
|
||||||||||||||||
Share issue expense
|
-
|
(2,090,124
|
)
|
-
|
-
|
(2,090,124
|
)
|
||||||||||||||||
Warrants exercised during the year
|
9 a
|
|
1,018,506
|
7,002,043
|
-
|
-
|
7,002,043
|
||||||||||||||||
Stock based compensation
|
9 b
|
|
-
|
-
|
1,651,118
|
-
|
1,651,118
|
||||||||||||||||
Net and comprehensive loss
|
-
|
-
|
-
|
(41,907,079
|
)
|
(41,907,079
|
)
|
||||||||||||||||
Balance - December 31, 2019
|
39,907,681
|
$
|
194,859,415
|
$
|
8,303,527
|
$
|
(214,844,773
|
)
|
$
|
(11,681,831
|
)
|
Balance - December 31, 2019
|
39,907,681
|
$
|
194,859,415
|
$
|
8,303,527
|
$
|
(214,844,773
|
)
|
$
|
(11,681,831
|
)
|
||||||||||||
Issued pursuant to agency agreement1
|
9 a
|
|
23,923,700
|
12,818,657
|
-
|
-
|
12,818,657
|
||||||||||||||||
Share issue expense
|
-
|
(487,788
|
)
|
-
|
-
|
(487,788
|
)
|
||||||||||||||||
Common stock equivalents converted
|
9 a
|
|
11,500,000
|
1,150
|
-
|
-
|
1,150
|
||||||||||||||||
Warrants exercised during the year
|
9 a
|
|
7,853,462
|
8,627,619
|
-
|
-
|
8,627,619
|
||||||||||||||||
Stock based compensation
|
9 b
|
|
-
|
-
|
1,097,358
|
-
|
1,097,358
|
||||||||||||||||
Net and comprehensive loss
|
-
|
-
|
-
|
(24,184,657
|
)
|
(24,184,657
|
)
|
||||||||||||||||
Balance - December 31, 2020
|
83,184,843
|
$
|
215,819,053
|
$
|
9,400,885
|
$
|
(239,029,430
|
)
|
$
|
(13,809,492
|
)
|
1. Includes net proceeds from the issuance of common share equivalents (see note 9 a)
|
See notes to the consolidated financial statements
|
Note
|
December 31, 2020
|
December 31, 2019
|
|||||||||
Cash provided by (used in):
|
|||||||||||
Operating activities:
|
|||||||||||
Net and comprehensive loss
|
$
|
(24,184,657
|
)
|
$
|
(41,907,079
|
)
|
|||||
|
|||||||||||
Items not involving cash:
|
|||||||||||
Amortization
|
236,842
|
32,555
|
|||||||||
Impairment of patent rights
|
45,981
|
-
|
|||||||||
Non-cash interest on lease
|
36,274
|
-
|
|||||||||
Stock based compensation
|
1,097,358
|
1,651,119
|
|||||||||
Warrant liability-fair value adjustment
|
27,855,678
|
(19,800,645
|
)
|
||||||||
Warrant liability-foreign exchange adjustment
|
95,631
|
17,687
|
|||||||||
Non-cash issue costs
|
764,132
|
744,501
|
|||||||||
Non-cash settlements
|
6, 9 a
|
|
(2,262,052
|
)
|
-
|
||||||
Non-cash note payable expenses and accrued interest
|
385,496
|
-
|
|||||||||
Changes in non-cash working capital items:
|
|||||||||||
Amounts receivable, prepaid expenses and deposits
|
(544,429
|
)
|
8,336,486
|
||||||||
Accounts payable and accrued liabilities
|
(4,371,371
|
)
|
4,965,008
|
||||||||
Cash used in operating activities
|
(845,117
|
)
|
(45,960,368
|
)
|
|||||||
Financing activities:
|
|||||||||||
Net proceeds from issuance of common shares and warrants1
|
24,688,851
|
35,766,754
|
|||||||||
Note payable
|
1,500,000
|
-
|
|||||||||
Repayment of lease liabilities
|
(90,053
|
)
|
(5,100
|
)
|
|||||||
Cash provided by financing activities
|
26,098,798
|
35,761,654
|
|||||||||
Investing Activities:
|
|||||||||||
Purchase of property, plant and equipment
|
(280,410
|
)
|
-
|
||||||||
Cost of patents
|
(318,958
|
)
|
(458,037
|
)
|
|||||||
Cash used in investing activities
|
(599,368
|
)
|
(458,037
|
)
|
|||||||
Increase (decrease) in cash and cash equivalents
|
24,654,313
|
(10,656,751
|
)
|
||||||||
Cash and cash equivalents, beginning of the period
|
814,492
|
11,471,243
|
|||||||||
Cash and cash equivalents, end of the period
|
$
|
25,468,805
|
$
|
814,492
|
|||||||
Cash and cash equivalents comprise:
|
|||||||||||
Cash
|
$
|
1,302,037
|
$
|
141,768
|
|||||||
Cash equivalents
|
24,166,768
|
672,724
|
|||||||||
$
|
25,468,805
|
$
|
814,492
|
1. Includes net proceeds from the issuance of common share equivalents - see note 9 a.
|
See notes to the consolidated financial statements
|
(a) |
Statement of Compliance
|
(b) |
Basis of Measurement
|
(c) |
Basis of Consolidation
|
(d) |
Functional and Presentation Currency
|
1. |
DESCRIPTION OF BUSINESS (continued)
|
(e) |
Use of Estimates and Judgements
|
• |
incremental borrowing rate used to measure lease liabilities
|
• |
fair value estimate of the measurement of leases and warrant liabilities
|
(f) |
COVID-19
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
(a) |
Cash and Cash Equivalents
|
(b) |
Property, plant, and equipment
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
|
Computer equipment |
3 years |
|
|
|
|
Furniture and fixtures | 3 years |
|
|
|
|
Machinery | 3 years |
Leasehold improvements | Remaining term of the lease |
(c) |
Leases
|
(d) |
Patent Rights
|
(e) |
Impairment of Long-Lived Assets
|
(f) |
Deferred Income Taxes
|
(g) |
Foreign Currency
|
(h) |
Warrant Liability
|
(i) |
Fair Value Measurement
|
(j) |
Stock-Based Compensation
|
(k) |
Research and Development Costs
|
(l) |
Investment Tax Credits
|
(m) |
Financial Instruments
|
(n) |
Revenue Recognition
|
(o) |
Short-term Employee Benefits
|
(p) |
Provisions
|
(q) |
Earnings (Loss) per Share
|
(r) |
Adoption of New Accounting Standard
|
• |
IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment – Disclosure
Initiative – Definition of Material;
|
• |
Revisions to the Conceptual Framework for Financing Reporting;
|
• |
Definition of a Business (Amendments to IFRS 3);
|
• |
Interest Rate Benchmark Reform – IBOR ‘phase 2’ (Amendments to IFRS 9 and IAS 39) and
|
• |
COVID-19 – Related Rent Concessions (Amendments to IFRS 16).
|
(s) |
Standards, Amendments, and Interpretations not yet Effective
|
3. |
PROPERTY, PLANT, AND EQUIPMENT
|
For the year ended December 31, 2020
|
Cost
|
Accumulated
depreciation
|
Net Book
Value
|
|||||||||
Computer equipment
|
||||||||||||
Balance at December 31, 2019
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Additions
|
49,721
|
-
|
49,721
|
|||||||||
Depreciation in the year
|
-
|
(12,827
|
)
|
(12,827
|
)
|
|||||||
Furniture and fixtures
|
||||||||||||
Balance at December 31, 2019
|
-
|
-
|
-
|
|||||||||
Additions
|
53,689
|
-
|
53,689
|
|||||||||
Depreciation in the year
|
-
|
(20,352
|
)
|
(20,352
|
)
|
|||||||
Leasehold improvements
|
||||||||||||
Balance at December 31, 2019
|
-
|
-
|
-
|
|||||||||
Additions
|
23,619
|
-
|
23,619
|
|||||||||
Depreciation in the year
|
-
|
(1,858
|
)
|
(1,858
|
)
|
|||||||
Machinery
|
||||||||||||
Balance at December 31, 2019
|
-
|
-
|
-
|
|||||||||
Additions
|
153,380
|
-
|
153,380
|
|||||||||
Depreciation in the year
|
-
|
-
|
-
|
|||||||||
Balance at December 31, 2020
|
$
|
280,409
|
$
|
(35,037
|
)
|
$
|
245,372
|
For the year ended December 31, 2019
|
Cost
|
Accumulated
depreciation
|
Net Book
Value
|
|||||||||
Computer equipment
|
||||||||||||
Balance at December 31, 2018
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Furniture and fixtures
|
||||||||||||
Balance at December 31, 2018
|
-
|
-
|
-
|
|||||||||
Leasehold improvements
|
||||||||||||
Depreciation in the year
|
-
|
-
|
-
|
|||||||||
Machinery
|
||||||||||||
Balance at December 31, 2019
|
-
|
-
|
-
|
|||||||||
Balance at December 31, 2019
|
$
|
-
|
$
|
-
|
$
|
-
|
4. |
LEASES
|
Right of use assets
For the year ended December 31, 2020
|
Cost
|
Accumulated
amortization
|
Net Book
Value
|
|||||||||
Head Office
|
||||||||||||
Balance at December 31, 2019
|
$
|
34,172
|
$
|
(3,778
|
)
|
$
|
30,394
|
|||||
Amortization in the year
|
-
|
(22,670
|
)
|
(22,670
|
)
|
|||||||
Chapel Hill
|
||||||||||||
Balance at December 31, 2019
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Additions
|
941,268
|
-
|
941,268
|
|||||||||
Amortization in the year
|
-
|
(82,391
|
)
|
(82,391
|
)
|
|||||||
Balance at December 31, 2020
|
$
|
975,440
|
$
|
(108,839
|
)
|
$
|
866,601
|
For the year ended December 31, 2019
|
Cost
|
Accumulated
amortization
|
Net Book
Value
|
|||||||||
Head Office
|
||||||||||||
Balance at December 31, 2018
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Additions
|
34,172
|
-
|
34,172
|
|||||||||
Amortization in the year
|
-
|
(3,778
|
)
|
(3,778
|
)
|
|||||||
-
|
||||||||||||
Balance at December 31, 2019
|
$
|
34,172
|
$
|
(3,778
|
)
|
$
|
30,394
|
4. |
LEASES (continued)
|
Lease liabilities – maturity analysis
|
2020
|
2019
|
||||||
Less than one year
|
$
|
165,768
|
$
|
21,071
|
||||
One to three years
|
646,481
|
8,001
|
||||||
Four to five years
|
104,310
|
-
|
||||||
Total lease liabilities at December 31, 2020
|
$
|
916,559
|
$
|
29,072
|
5. |
PATENT RIGHTS
|
For the year ended December 31, 2020
|
Cost
|
Accumulated
Amortization
|
Net Book
Value
|
|||||||||
Balance at December 31, 2019
|
$
|
1,856,750
|
$
|
(255,005
|
)
|
$
|
1,601,745
|
|||||
Impairment losses
|
(45,981
|
)
|
-
|
(45,981
|
)
|
|||||||
Additions during the year
|
318,958
|
-
|
318,958
|
|||||||||
Amortization in the year
|
-
|
(96,744
|
)
|
(96,744
|
)
|
|||||||
Balance at December 31, 2020
|
$
|
2,129,727
|
$
|
(351,749
|
)
|
$
|
1,777,978
|
For the year ended December 31, 2019
|
Cost
|
Accumulated
Amortization
|
Net Book
Value
|
|||||||||
Balance at December 31, 2018
|
$
|
1,398,713
|
$
|
(226,228
|
)
|
$
|
1,172,485
|
|||||
Impairment losses
|
-
|
-
|
-
|
|||||||||
Additions during the year
|
458,037
|
-
|
458,037
|
|||||||||
Amortization in the year
|
-
|
(28,777
|
)
|
(28,777
|
)
|
|||||||
Balance at December 31, 2019
|
$
|
1,856,750
|
$
|
(255,005
|
)
|
$
|
1,601,745
|
6. |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
|
7. |
NOTE PAYABLE
|
8. |
WARRANT LIABILITY
|
For the year ended December 31, 2020
|
Number of
Warrants
|
Amount
|
||||||
Opening Balance
|
21,203,411
|
$
|
3,621,444
|
|||||
Issue of warrants expiring, March 27, 2025
|
3,500,000
|
475,300
|
||||||
Issue of warrants expiring, November 6, 2025
|
2,757,252
|
508,200
|
||||||
Issue of warrants expiring, June 10, 2024
|
9,000,000
|
9,709,200
|
||||||
Warrants exercised during the year
|
(7,257,252
|
)
|
(5,948,771
|
)
|
||||
Warrants expired during the year
|
(233,740
|
)
|
(26,198
|
)
|
||||
Foreign exchange adjustment during the year
|
-
|
95,631
|
||||||
Fair value adjustment during the year
|
-
|
27,881,875
|
||||||
Balance at December 31, 2020
|
28,969,671
|
$
|
36,316,681
|
8. |
WARRANT LIABILITY (continued)
|
For the year ended December 31, 2019
|
Number of
Warrants
|
Amount
|
||||||
Opening Balance
|
13,901,859
|
$
|
11,250,167
|
|||||
Issue of warrants expiring, March 21, 2024
|
8,455,882
|
15,897,059
|
||||||
Warrants exercised during the year
|
(1,018,506
|
)
|
(3,742,824
|
)
|
||||
Warrants expired during the year
|
(135,824
|
)
|
-
|
|||||
Foreign exchange adjustment during the year
|
-
|
17,687
|
||||||
Fair value adjustment during the year
|
-
|
(19,800,645
|
)
|
|||||
Balance at December 31, 2019
|
21,203,411
|
$
|
3,621,444
|
Listed Warrants
|
Expiry date
|
Exercise
Price CDN$
|
Number issued
|
Number
outstanding
|
|||||||||
TMD.W.T.G
|
12-Feb-21
|
$
|
30.00
|
447,253
|
444,920
|
||||||||
TMD.W.T.H
|
31-Mar-21
|
$
|
36.00
|
577,106
|
577,106
|
||||||||
TMD.W.T.I
|
20-Sep-21
|
$
|
22.50
|
637,111
|
637,111
|
||||||||
Balance at December 31, 2020
|
1,661,470
|
1,659,137
|
Unlisted Warrants (in CDN$)
|
Expiry date
|
Exercise
Price CDN$
|
Number issued
|
Number
outstanding
|
|||||||||
March 2017
|
16-Mar-21
|
$
|
15.00
|
357,787
|
355,253
|
||||||||
June 2017
|
29-Jun-22
|
$
|
6.00
|
1,983,522
|
446,377
|
||||||||
August 2017
|
24-Aug-22
|
$
|
6.00
|
563,067
|
563,067
|
||||||||
December 2017
|
5-Dec-22
|
$
|
18.00
|
1,533,333
|
1,533,333
|
||||||||
April 2018
|
10-Apr-18
|
$
|
10.50
|
1,295,554
|
1,295,554
|
||||||||
Balance at December 31, 2020
|
5,733,263
|
4,193,584
|
Unlisted Warrants (in USD$)
|
Expiry date
|
Exercise
Price USD$
|
Number issued
|
Number
outstanding
|
|||||||||
August 20181
|
10-Aug-23
|
$
|
2.9200
|
7,679,574
|
6,661,068
|
||||||||
March 20192
|
21-Mar-24
|
$
|
3.9500
|
8,455,882
|
8,455,882
|
||||||||
March 2020
|
27-Mar-25
|
$
|
0.1900
|
3,500,000
|
-
|
||||||||
May 2020
|
6-Nov-25
|
$
|
0.3002
|
2,757,252
|
-
|
||||||||
June 2020
|
10-Jun-24
|
$
|
1.0000
|
9,000,000
|
8,000,000
|
||||||||
Balance at December 31, 2020
|
31,392,708
|
23,116,950
|
|||||||||||
Total Warrants Outstanding
|
38,787,441
|
28,969,671
|
9. |
SHARE CAPITAL
|
(a)
|
Authorized:
|
unlimited number of common shares, no par value
|
||
Issued:
|
83,184,843 (December 31, 2019: 39,907,681)
|
9. |
SHARE CAPITAL (continued)
|
Grant Date
|
Common shares
issued
|
Value
|
||||||
January 3, 2020
|
500,000
|
$
|
219,600
|
|||||
January 6, 2020
|
500,000
|
229,300
|
||||||
January 8, 2020
|
400,000
|
195,160
|
||||||
January 10, 2020
|
500,000
|
247,550
|
||||||
January 17, 2020
|
600,000
|
303,000
|
||||||
January 23, 2020
|
600,000
|
295,320
|
||||||
February 6, 2020
|
600,000
|
282,000
|
||||||
February 13, 2020
|
708,048
|
300,000
|
||||||
4,408,048
|
$
|
2,071,930
|
9. |
SHARE CAPITAL (continued)
|
Grant Date
|
Common shares
issued
|
Value
|
||||||
August 30, 2019
|
2,417,162
|
$
|
3,000,000
|
|||||
November 8, 2019
|
100,000
|
42,560
|
||||||
November 8, 2019
|
100,000
|
42,560
|
||||||
November 12, 2019
|
100,000
|
42,970
|
||||||
November 12, 2019
|
100,000
|
42,000
|
||||||
November 13, 2019
|
100,000
|
42,970
|
||||||
November 14, 2019
|
300,000
|
128,910
|
||||||
November 15, 2019
|
2,500,000
|
1,074,250
|
||||||
November 19, 2019
|
2,067,282
|
888,311
|
||||||
|
7,784,444
|
$
|
5,304,531
|
9. |
SHARE CAPITAL (continued)
|
(b) |
Stock Options and Compensation Options
|
Grant date / recipient
|
Number of
options
|
Exercise price
|
Vesting conditions
|
Contractual
life of
options
|
January 28, 2020, options
granted to a director
|
25,765
|
CDN $0.657
|
Options vest immediately
|
7 years
|
July 30, 2020, options granted
to a director
|
22,425
|
CDN $1.266
|
Options vest immediately
|
7 years
|
July 30, 2020, options granted
to employees
|
1,350,000
|
USD $0.962
|
Options vest as to ¼ of the total
number of options granted,
every year from grant date
|
7 years
|
September 29, 2020, options
granted to board members
|
27,304
19,568
|
CDN $0.960
USD $0.730
|
Options vest immediately
|
7 years
|
September 30, 2020, options
granted to a consultant
|
4,723
|
USD $0.745
|
Options vest immediately
|
3 years
|
December 10, 2020, options
granted to employees
|
4,000
623,000
|
CDN $1.700
USD $1.310
|
Options vest as to ¼ of the total
number of options granted,
every year from grant date
|
7 years
|
9. |
SHARE CAPITAL (continued)
|
STOCK OPTIONS OUTSTANDING
|
CANADIAN DOLLAR
|
UNITED STATES DOLLAR
|
||||||||||||||
Number
stock
options
|
Weighted
Average
Exercise Price
|
Number of
stock
options
|
Weighted
Average
Exercise Price
|
|||||||||||||
Balance at December 31, 2019
|
860,379
|
$
|
5.89
|
854,042
|
$
|
2.65
|
||||||||||
Granted
|
79,494
|
0.99
|
1,997,291
|
0.96
|
||||||||||||
Expired / forfeited
|
(105,908
|
)
|
8.39
|
(761,528
|
)
|
2.66
|
||||||||||
Balance at December 31, 2020
|
833,965
|
$
|
5.10
|
2,089,805
|
$
|
1.13
|
CANADIAN DOLLAR
|
UNITED STATES DOLLAR
|
|||||||||||||||
Number
stock
options
|
Weighted
Average
Exercise Price
|
Number of
stock
options
|
Weighted
Average
Exercise Price
|
|||||||||||||
Balance at December 31, 2018
|
875,433
|
$
|
18.20
|
50,349
|
$
|
1.55
|
||||||||||
Granted
|
35,719
|
4.54
|
843,693
|
2.72
|
||||||||||||
Expired / forfeited
|
(50,773
|
)
|
31.79
|
(40,000
|
)
|
3.72
|
||||||||||
Balance at December 31, 2019
|
860,379
|
$
|
5.89
|
854,042
|
$
|
2.65
|
9. |
SHARE CAPITAL (continued)
|
Canadian Dollar Denominated Options
|
||||||||||||
Exercise Price (CDN)
|
Number
Outstanding
|
Weighted-average remaining
contractual life (years)
|
Options Exercisable
|
|||||||||
$0.66
|
25,765
|
6.08
|
25,765
|
|||||||||
$0.96
|
27,304
|
6.75
|
27,304
|
|||||||||
$1.27
|
22,425
|
6.58
|
22,425
|
|||||||||
$1.70
|
4,000
|
6.95
|
-
|
|||||||||
$3.28
|
31,498
|
4.66
|
31,498
|
|||||||||
$4.54
|
682,422
|
3.09
|
360,237
|
|||||||||
$9.00
|
11,481
|
4.52
|
11,481
|
|||||||||
$30.00
|
28,260
|
0.65
|
28,260
|
|||||||||
$32.40
|
810
|
0.07
|
810
|
|||||||||
833,965
|
3.61
|
507,780
|
United States Dollar Denominated Options
|
||||||||||||
Exercise Price (USD)
|
Number
Outstanding
|
Weighted-average remaining
contractual life (years)
|
Options Exercisable
|
|||||||||
$0.73
|
19,568
|
6.75
|
19,568
|
|||||||||
$0.75
|
4,723
|
2.75
|
4,723
|
|||||||||
$0.96
|
1,350,000
|
6.58
|
-
|
|||||||||
$1.31
|
623,000
|
6.95
|
-
|
|||||||||
$1.55
|
50,349
|
0.96
|
50,349
|
|||||||||
$2.20
|
2,165
|
5.55
|
2,165
|
|||||||||
$3.72
|
40,000
|
1.69
|
-
|
|||||||||
2,089,805
|
6.45
|
76,805
|
||||||||||
Total
|
2,923,770
|
5.64
|
584,585
|
9. |
SHARE CAPITAL (continued)
|
CANADIAN DOLLARS
|
UNITED STATES DOLLARS
|
||||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||||
Fair value at grant
|
$
|
0.82
|
1.61
|
0.89
|
1.48
|
||||||||
Share price at grant
|
1.01
|
2.90
|
1.04
|
2.36
|
|||||||||
Exercise price
|
1.04
|
4.54
|
1.07
|
2.72
|
|||||||||
Expected option life
|
4 years
|
3.4 years
|
4.0 years
|
3.5 years
|
|||||||||
Risk free interest rate
|
0.67%
|
|
1.43%
|
|
0.29%
|
|
1.50%
|
|
|||||
Expected volatility
|
145.61%
|
|
98.10%
|
|
149.77
|
97.90%
|
|
||||||
Expected dividends
|
Nil
|
Nil
|
Nil
|
Nil
|
(c) |
Warrants
|
Expiry date
|
Exercise
Price
|
Outstanding
at
December
31, 20191
|
Issued
|
Exercised
|
Expired
|
Outstanding
at December
31, 20201
|
||||||||||||||||||
April 12, 2020
|
$
|
9.00000
|
89,795
|
-
|
-
|
(89,795
|
)
|
-
|
||||||||||||||||
August 10, 2020
|
$
|
2.50000
|
537,570
|
-
|
-
|
(537,570
|
)
|
-
|
||||||||||||||||
March 21, 2021
|
$
|
3.40000
|
591,911
|
-
|
-
|
-
|
591,911
|
|||||||||||||||||
June 10, 2024
|
$
|
1.25000
|
-
|
1,260,000
|
-
|
-
|
1,260,000
|
|||||||||||||||||
March 27, 2025
|
$
|
0.21250
|
-
|
490,000
|
(335,650
|
)
|
-
|
154,350
|
||||||||||||||||
November 6, 2025
|
$
|
0.45335
|
-
|
386,015
|
(260,560
|
)
|
-
|
125,455
|
||||||||||||||||
Ending balance
|
1,219,276
|
2,136,015
|
(596,210
|
)
|
(627,365
|
)
|
2,131,716
|
10. |
INCOME TAXES
|
(a) |
Current income taxes
|
December 31, 2020
|
December 31, 2019
|
|||||||
Net loss before income taxes
|
$
|
(24,184,657
|
)
|
$
|
(41,907,079
|
)
|
||
Income taxes at statutory rates
|
(6,408,934
|
)
|
(11,105,376
|
)
|
||||
Tax effect of expenses not deductible for income tax purposes:
|
||||||||
Permanent differences
|
7,648,554
|
(4,800,780
|
)
|
|||||
Unrecognized share issue costs
|
(129,264
|
)
|
(625,220
|
)
|
||||
Tax / foreign rate changes and other adjustments
|
(49,409
|
)
|
93,724
|
|||||
Total tax recovery
|
1,060,947
|
(16,437,652
|
)
|
|||||
Tax recovery not recognized
|
(1,060,947
|
)
|
16,437,652
|
|||||
$
|
-
|
$
|
-
|
(b) |
Deferred income taxes
|
December 31, 2020
|
December 31, 2019
|
|||||||
Non-capital losses
|
$
|
62,773,915
|
$
|
63,740,497
|
||||
Qualifying research and development expenditure
|
1,493,309
|
1,493,309
|
||||||
Share issue costs and other
|
1,868,633
|
1,999,584
|
||||||
Total tax assets
|
66,135,857
|
67,233,390
|
||||||
Tax assets not recognized
|
(66,135,857
|
)
|
(67,233,390
|
)
|
||||
Net deferred tax assets
|
$
|
-
|
$
|
-
|
10. |
INCOME TAXES (continued)
|
(c) |
Losses carried forward
|
Expiry year
|
Non-capital losses
|
||||
2031
|
$
|
9,674,326
|
|||
2032
|
10,454,774
|
||||
2033
|
10,210,370
|
||||
2034
|
13,784,437
|
||||
2035
|
43,934,918
|
||||
2036
|
28,260,911
|
||||
2037
|
19,604,159
|
||||
2038
|
40,239,997
|
||||
2039
|
60,718,805
|
||||
$
|
236,882,697
|
(d) |
Investment tax credits
|
11. |
COMMITMENTS
|
12. |
RELATED PARTY TRANSACTIONS
|
December 31, 2020
|
December 31, 2019
|
|||||||||||||||
Common Shares Held by Directors and Officers
|
Number of
shares
|
%
|
Number of
shares
|
%
|
||||||||||||
David McNally
|
4,167
|
0.01
|
4,167
|
0.01
|
||||||||||||
Monique Delorme1
|
32,333
|
0.04
|
-
|
-
|
||||||||||||
Perry Genova
|
514
|
0.00
|
-
|
-
|
||||||||||||
Stephen Randall2
|
22,993
|
0.03
|
22,993
|
0.06
|
||||||||||||
John Barker3
|
NA
|
NA
|
32,714
|
0.08
|
||||||||||||
John Schellhorn4
|
NA
|
NA
|
294
|
-
|
||||||||||||
Total
|
60,007
|
0.08
|
60,168
|
0.15
|
||||||||||||
Common Shares Outstanding
|
83,184,843
|
100.00
|
39,907,681
|
100.00
|
1. |
Monique Delorme was appointed Chief Financial Officer on October 1, 2020.
|
2. |
Stephen Randall retired as Chief Financial Officer on September 30, 2020. He remains on the board of directors.
|
3. |
John Barker retired as directors effective September 30, 2020.
|
4. |
John Schellhorn retired as a director effective June 4, 2020.
|
13. |
FINANCIAL INSTRUMENTS
|
(a) |
Credit risk
|
(b) |
Liquidity risk
|
13. |
FINANCIAL INSTRUMENTS (continued)
|
(c) |
Market risk
|
i. |
Interest rate risk
|
ii. |
Foreign currency risk
|
(d) |
Sensitivity analysis
|
13. |
FINANCIAL INSTRUMENTS (continued)
|
5% strengthening
|
December 31, 2020
|
December 31, 2019
|
||||||
Canadian dollar current assets
|
$
|
(7,659
|
)
|
$
|
(19, 687
|
)
|
||
Canadian dollar accounts payable and accrued liabilities
|
226,669
|
52,228
|
||||||
Change in profit (loss)
|
$
|
219,010
|
$
|
32,541
|
14. |
REVENUES
|
15. |
SEGMENTED REPORTING
|
16. |
CAPITAL MANAGEMENT
|
17. |
SUBSEQUENT EVENTS
|
(a) |
Warrants exercised
|
(b) |
Options exercised
|
(c) |
Equity offerings
|
17. |
SUBSEQUENT EVENTS (continued)
|