| SHARE CAPITAL | 18. SHARE CAPITAL All Common Shares are equally eligible to receive dividends and the repayment of capital and represent one vote at shareholders’ meetings. All Preferred Shares have no voting rights at shareholders’ meetings but on liquidation, winding-up or other distribution of the Company’s assets are entitled to participate in priority to Common Shares. There are no Preferred Shares issued outstanding (a) Authorized Unlimited number of Common Shares without par value. Unlimited number of Preferred Shares without par value. The Company may issue its Preferred Shares from time to time in one or more series. The terms of each series of Preferred Shares, including the number of shares, the designation, rights, preferences, privileges, priorities, restrictions, conditions and limitations, will be determined at the time of creation of each such series by our board of directors, without shareholder approval, provided that all Preferred Shares will rank equally within their class as to dividends and distributions in the event of our dissolution, liquidation or winding-up. 18. SHARE CAPITAL (continued) (a) Authorized (continued) All share and per share amounts are net of share issuance costs and have been adjusted to retroactively reflect the impact of the September 18, 2018 reverse stock split on a 1 1 Common Shares Contributed Number Amount Surplus Balance, January 1, 2019 2,801,720 $ 304,460,533 $ 26,260,806 Common Shares issued from public offerings (i) 2,222,222 7,802,417 315,611 Common Shares issued from private placement (ii) 334,951 1,664,662 — Common Shares issued from exercise Series B Warrants (iii) 223,304 16,931 — Common Shares issued from exercise of Series C Warrants (iv) 822 1,186,027 — Common Shares issued from exercise of 2017 Notes (v) 3,074,136 13,095,938 — Common Shares issued from exchange of Series A and Series E Warrants (vi) 49,624 234,173 — Share-based payments — — 3,189,808 Balance, December 31, 2019 8,706,779 $ 328,460,681 $ 29,766,225 Common Shares issued from public offerings Series A (vii) 1,185,000 4,111,950 — Common Shares issued from exercise of Series B Pre-funded warrants (viii) 1,241,490 3,885,746 — Transaction costs for both Series A and Series B — (462,880) — Broker warrants (See Note 18 (f)) — (82,597) 82,597 Common Shares issued from Warrant conversion (ix) 672,937 969,133 — Common Shares issued from conversion of 2017 Notes (x) 500,014 1,293,093 — Common Shares issued from public offering (xi) 3,883,036 9,591,099 — Transaction costs for public offering — (1,215,274) — Broker warrants (See Note 18 (f)) — (162,467) 162,467 Common Shares issued from public offering (xii) 4,532,772 12,238,484 — Transaction costs for public offering — (1,057,302) — Broker warrants (See Note 18 (f)) — (242,989) 242,989 Common Shares issued from Warrant conversion (xiii) 1,925,049 7,718,346 — Common Shares issued from public offering (xiv) 6,230,803 5,333,567 — Transaction costs for public offering — (659,410) — Broker warrants (See Note 18 (f)) — (96,114) 96,114 Common Shares issued from exercise of restricted share units 50,986 151,938 (151,938) Common Shares issued from exercise of stock options 50 378 (174) Share-based payments — — 4,846,776 Balance, December 31, 2020 28,928,916 $ 369,775,383 $ 35,045,056 Common Shares issued from public offering (xv) 36,000,000 72,000,000 — Transaction costs for public offering — (5,131,089) — Broker warrants (See Note 18 (f)) — (1,898,959) 1,898,959 Common Shares issued from warrant conversion (xvi) 125,000 417,092 — Common Shares issued from warrant conversion (xvii) 1,828,479 3,287,736 — Common Shares issued from exercise of restricted share units 772,334 1,423,294 (1,423,294) Share-based payments — — 4,835,231 Balance, December 31, 2021 67,654,729 $ 439,873,457 $ 40,355,952 (i) (ii) (iii) 18. SHARE CAPITAL (continued) (a) Authorized (continued) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) 18. SHARE CAPITAL (continued) (a) Authorized (continued) (xv) (xvi) (xvii) Between January 1, 2021 and March 31, 2021, (xviii) Between January 1, 2021 and March 31, 2021, (xix) (b) Stock options The Company adopted an equity-settled stock option plan under which the directors of the Company may grant options to purchase Common Shares to directors, officers, employees and service providers (the “optionees”) of the Company on terms that the directors of the Company may determine within the limitations set forth in the stock option plan. Effective June 4, 2018, at the Annual General Meeting (“AGM”), the board of directors and shareholders of the Company approved an amendment to the Company’s incentive stock option plan to increase the number of options available for grant under the plan to 15% of the number of Common Shares of the Company outstanding at any time. Options under the Company’s stock option plan granted to directors, officers and employees vest immediately on the grant date, unless a vesting schedule is specified by the board. The directors of the Company have discretion within the limitations set forth in the stock option plan to determine other vesting terms on options granted to directors, officers, employees, and others. The minimum exercise price of a stock option cannot be less than the applicable market price of the Common Shares on the date of the grant and the options have a maximum life of ten years from the date of grant. The following table summarizes stock option activity for the respective years as follows: 18. SHARE CAPITAL (continued) (b) Stock options (continued) Weighted Average average remaining Number of exercise contractual life options price (years) Options outstanding, January 1, 2019 369,726 $ 76.78 7.88 Options exercisable, January 1, 2019 146,263 $ 127.04 7.62 Granted 697,150 4.27 Cancelled/Forfeited (13,344) 58.64 Expired (1,867) 4,997.06 Options outstanding, December 31, 2019 1,051,665 $ 20.63 7.09 Options exercisable, December 31, 2019 398,596 $ 35.69 6.97 Granted 2,495,100 2.48 Exercised (50) 4.10 Cancelled/Forfeited (468,238) 23.10 Expired (1,329) 3,498.28 Options outstanding, December 31, 2020 3,077,148 $ 4.10 7.19 Options exercisable, December 31, 2020 1,081,760 $ 6.01 6.93 Granted 5,993,050 $ 1.09 Cancelled/Forfeited (1,966,983) 3.44 Expired (64) 3,675.03 Options outstanding, December 31, 2021 7,103,151 $ 1.71 7.25 Options exercisable, December 31, 2021 1,878,532 $ 2.99 6.90 The following table lists the options outstanding as at December 31, 2021 by exercise price: Weighted average Weighted average Options remaining term Options remaining term Exercise price outstanding (yrs) exercisable (yrs) $0.60 1,710,050 7.96 339,910 7.96 $0.72 132,000 7.92 — — $0.84 551,000 7.62 — — $1.38 3,040,240 7.21 619,760 7.21 $2.11 298,750 6.73 153,250 6.73 $2.17 585,000 6.77 292,500 6.77 $2.42 448,625 6.48 228,813 6.48 $2.43 - $1,504 337,486 5.44 244,299 5.33 7,103,151 1,878,532 18. SHARE CAPITAL (continued) (b) Stock Options (continued) The following table lists the options outstanding as at December 31, 2020 by exercise price: Weighted average Weighted average Options remaining term Options remaining term Exercise price outstanding (yrs) exercisable (yrs) $2.11 486,875 7.72 138,125 7.72 $2.17 695,000 7.76 173,750 7.76 $2.27 1,500 7.61 1,500 7.61 $2.42 640,000 7.47 176,032 7.47 $3.35 493,766 7.05 133,495 7.05 $4.10 481,150 6.23 251,550 6.23 $4.11 - $3,878.39 278,857 6.07 207,308 6.01 3,077,148 1,081,760 The following table lists the options outstanding as at December 31, 2019 by exercise price: Weighted average Weighted average Options remaining term Options remaining term Exercise price outstanding (yrs) exercisable (yrs) $4.10 561,050 7.23 140,450 7.23 $5.00 130,950 7.41 32,738 7.41 $8.80 88,800 6.92 59,242 6.92 $27.20 263,250 6.75 162,268 6.75 $27.30 - $9,276.86 7,615 4.71 3,898 3.69 1,051,665 398,596 18. SHARE CAPITAL (continued) (b) Stock Options (continued) During the year ended December 31, 2021, the Company recorded $2,426,971 as compensation expense for share-based compensation awarded to eligible optionees (years ended December 31, 2020 and 2019: $3,873,557 and $3,166,959, respectively). The Company used the Black-Scholes Option Pricing Model to estimate the fair value of the options at each measurement date using the following weighted average assumptions: 2021 2020 2019 Weighted average fair value $ 0.82 $ 1.99 $ 3.60 Weighted average exercise price $ 1.09 $ 2.48 $ 4.30 Weighted average share price at grant $ 1.09 $ 2.48 $ 4.30 Dividend yield nil nil nil Volatility 117 % 124 % 141 % Risk-free interest rate 0.91 % 0.94 % 1.51 % Expected life 4 years 4 years 4 years Forfeiture rate 7.00 % 7.00 % 7.00 % (c) Restricted share units On December 2, 2019, the Company adopted a Restricted Share Unit (“RSU”) Plan which provides for RSUs to be awarded to directors, officers, employees and service providers. The maximum number of Common Shares authorized and reserved for issuance under the RSU Plan is equal to 5% of the issued and outstanding Common Shares of the Company. The shareholders of the Company approved the amended RSU Plan at the annual meeting of the shareholders on September 3, 2020, which falls within 12 months of the effective date of the RSU Plan. The granting of RSUs is considered an equity-settled share-based payment transaction. The fair value of the grant was determined by multiplying the Company’s share price at the grant date by the number of RSUs granted and is recognized over the vesting period of the grant. The expense recognized for the year ended December 31, 2021, was $2,408,260 (years ended December 31, 2020 and 2019: $973,219 and $22,848, respectively). As of December 31, 2021, the total remaining unrecognized compensation cost related to RSUs amounted to approximately $1,222,145 which will be amortized over the remaining vesting periods. 18. SHARE CAPITAL (continued) (c) Restricted share units (continued) RSU transactions are summarized as follows: Weighted Average Grant Date Number of Fair Value RSUs Per Share Outstanding, January 1, 2019 — — Granted 152,956 $ 2.98 Outstanding, December 31, 2019 152,956 $ 2.98 Granted 706,044 $ 2.72 Vested/Exercised (50,986) $ 0.85 Cancelled/Forfeited (30,000) $ 2.74 Outstanding, December 31, 2020 778,014 $ 2.76 Granted 2,900,000 $ 1.32 Vested/Exercised (772,334) $ 1.84 Cancelled/Forfeited (251,999) $ 1.81 Outstanding, December 31, 2021 2,653,681 $ 1.65 (d) Share appreciation rights On September 22, 2020, the Company adopted a Share Appreciation Rights (“SAR”) Plan which provides for SARs to be awarded to directors, officers, employees and service providers. The granting of SARs is considered a cash-settled payment transaction. The fair value of the SAR is measured applying an option pricing model, taking into account the terms and conditions on which the SARs are granted. The liability of the SAR is measured initially at grant date and at the end of each reporting period until settled. The fair value of the SAR as of December 31, 2021, is $2,624,160 which will be recorded over the vesting period of the SAR. The Company recognizes a $450,583 expense at December 31, 2021. SAR transactions are summarized as follows: Weighted Average Number of Grant Date Fair SARs Value Per Share Outstanding, January 1, 2019 and 2020 — — Granted 1,811,768 $ 0.185 Outstanding, December 31, 2020 1,811,768 $ 0.185 Granted 5,600,000 $ 0.000 Cancelled (1,811,768) $ 0.185 Outstanding, December 31, 2021 5,600,000 $ 0.000 18. SHARE CAPITAL (continued) (e) Warrants The following table lists the number of warrants issued on November 17, 2017 as well as the number issued, exercised, and exchanged since then and the remaining warrants outstanding at December 31, 2021. As at November 17, As at December 31, Warrants 2017 Issued Exercised Exchanged 2019, 2020 and 2021 Series A 25,676,368 10,273,972 — (35,950,340) — Series B 25,676,368 10,273,972 (35,950,340) — — Series C 10,273,972 — (10,273,972) — — Series D 3,573,830 — (3,573,830) — — Series E 22,431,506 — — (22,431,506) — Series F 22,431,506 — (22,431,506) — — On September 18, 2018, the Company effected a share consolidation (reverse stock split in the ratio of 1 The September 2018 share consolidation adjusted the notional exercise price of the Series A Warrants, Series B Warrants Series E Warrants Series F Warrants On March 12, 2019, the Company entered into exchange agreements with the holders of all of its outstanding Series A Warrants and Series E Warrants, pursuant to which the Company issued an aggregate of 49,624 Common Shares for the surrender and cancellation of all of the Series A Warrants and Series E Warrants outstanding, on the basis of 0.085 of a Common Share for each Series A Warrant or Series E Warrant (the “Exchange”). Following completion of the Exchange, there are no longer any warrants outstanding from the 2017 Financings. Under IFRIC 19, the surrender and cancellation of Series A warrants and Series E warrants created a loss on extinguishment of $39,367 and $24,565, respectively. On January 6, 2020, the Company completed a registered direct offering of an aggregate of 1,185,000 series A units (“Series A Units”) and 1,241,490 series B units (“Series B Units”): Series B Units at a price of $4.1351 per Series A Unit and $4.135 per Series B Unit for aggregate gross proceeds to the Company of $10,053,474. Each Series A Unit consists of one Common Share of Neovasc and one warrant (“January 2020 Warrant”). Each January 2020 Warrant entitles the holder to acquire one Common Share of Neovasc at a price of US$4.1351 at any time prior to four years following the date of issuance. Each Series B Unit consists of one pre-funded warrant (“Pre-Funded Warrant”) of Neovasc and one January 2020 Warrant. Each Pre-Funded Warrant entitles the holder to acquire one Common Share of Neovasc at a price of US$0.0001 at any time until the exercise in full of each Pre-Funded Warrant. 18. SHARE CAPITAL (continued) (e) Warrants (continued) All Pre-Funded Warrants were exercised between January 6, 2020 and March 31,2020. The January 2020 Warrants include a cashless exercise option which is effective only if the Company does not have an effective registration statement in the United States at the time of the exercise. In accordance with IAS 32 – Financial instruments; presentation, the January 2020 Warrants have been accounted for as derivative financial liabilities and measured at FVTPL. The fair value at issuance date of $6,145,620 for the January 2020 Warrants and Pre-Funded Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.60%; b) expected life of 1 years; c) the price of the stock on the grant date of $3.47; d) expected volatility of 70%; and e) no expected dividend payments. The fair value on December 31, 2021 of $172 for the January 2020 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.18%; b) expected life of 2 years; c) the price of the stock on December 31, 2021 of $0.47; d) expected volatility of 56.89%; and e) no expected dividend payments. On May 26, 2020, the Company granted 2,573,959 warrants with an exercise price of $2.634 and term of 4 years (“the May 2020 Warrants”). The May 2020 Warrants are convertible into Common Shares of the Company at the option of the holder (however, the holder may not own greater than 9.99% of the total outstanding Common Shares of the Company as a result of the conversion). The May 2020 Warrants include a cashless exercise option which is effective only if the Company does not have an effective registration statement in the United States at the time of the exercise. In accordance with IAS 32 – Financial instruments; presentation, the May 2020 Warrants have been accounted for as derivative financial liabilities and measured at FVTPL. The fair value at issuance date of $4,526,732 of the May 2020 Warrants were calculated using a binomial option pricing model and have been classified as level 3 in the fair value hierarchy. On July 23, 2020 1,424,049 May 2020 Warrants were exercised and on August 17, 2020 501,000 May 2020 Warrants were exercised leaving 648,910 May 2020 Warrants remaining. The total exercise proceeds of $4,877,225 net of interest and prepayment penalty has been applied to the principal of the 2019 Note. The fair value at on December 31, 2021 of $5,866 of the May 2020 Warrants were calculated using a binomial option pricing model and have been classified as level 3 in the fair value hierarchy. 18. SHARE CAPITAL (continued) (e) Warrants (continued) On May 28, 2020 the Company entered into a settlement agreement to issue 500,000 settlement warrants (“2020 Settlement Warrants”). Each Settlement Warrant entitles the holder to purchase one Common Share in the capital of the Company at an exercise price of $2.634 per Settlement Warrant for a period of 4 years following issuance and are subject to transfer/leak-out restrictions, including volume and public float restrictions. The 2020 Settlement Warrants include a cashless exercise option which is effective only if the Company does not have an effective registration statement in the United States at the time of the exercise. In accordance with IAS 32 – Financial instruments; presentation, the 2020 Settlement Warrants have been accounted for as derivative financial liabilities and measured at FVTPL. The fair value at issuance date of $807,977 of the 2020 Settlement Warrants were calculated using the Cox Ross Rubinstein binomial tree model and have been classified as level 3 in the fair value hierarchy. The fair value on December 31, 2021 of $4,539 of the 2020 Settlement Warrants were calculated using the Cox Ross Rubinstein binomial tree model and have been classified as level 3 in the fair value hierarchy. On June 16, 2020, the Company completed a registered direct offering of an aggregate 3,883,036 units (the “June 2020 Units”) at a price of $2.973 per unit for aggregate gross proceeds to the Company of $11,544,266 less $1,215,274 in underwriting commission, a $162,467 fair value charge for compensation warrants “June 2020 Compensation Warrants”, and $278,482 in other share issuance costs. Each June 2020 Unit consists of one Common Share of the Company and three-quarters of one warrant (each whole warrant, a “June 2020 Warrant”) to purchase one Common Share issuing 2,912,277 June 2020 Warrants in total. Each June 2020 Warrant entitles the holder to acquire one Common Share of the Company at a price of $2.88 at any time prior to June 16, 2025. The June 2020 Warrants include a cashless exercise option which is effective only if the Company does not have an effective registration statement in the United States at the time of the exercise. In accordance with IAS 32 – Financial instruments; presentation, the June 2020 Warrants have been accounted for as derivative financial liabilities and measured at FVTPL. The fair value at issuance date of $2,404,957 for the June 2020 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.32%; b) expected life of 2 years; c) the price of the stock on the grant date of $2.47; d) expected volatility of 70%; and e) no expected dividend payments. The fair value on December 31, 2021 of $42,004 for the June 2020 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.18%; b) expected life of 3 years; c) the price of the stock on December 31, 2021 of $0.47; d) expected volatility of 56.89%; and e) no expected dividend payments. On July 23, 2020, the Company issued repayment warrants (“July 2020 Repayment Warrants”) to purchase up to 481,778 Common Shares at an exercise price of $7.50 per Common Share at any time prior to July 23, 2025. The exercise price is adjusted as the conversion price of the 2019 Note is adjusted. The fair value at issuance date of $134,718 for the July 2020 Repayment Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.29%; b) expected life of 2 years; c) the price of the stock on the grant date of $2.54; d) expected volatility of 70%; and e) no expected dividend payments. The fair value on December 31, 2021 of $54 for the July 2020 Repayment Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.18%; b) expected life of 2 years; c) the price of the stock on December 31, 2021 of $0.47; d) expected volatility of 56.89%; and e) no expected dividend payments. 18. SHARE CAPITAL (continued) (e) Warrants (continued) On August 12, 2020, the Company completed a registered direct offering of an aggregate 4,532,772 units (the August 2020 Units") at a price of $2.775 per unit for aggregate gross proceeds to the Company of $12,578,442 less $1,057,302 in underwriting commission, a $242,989 fair value charge for Compensation Warrants “August 2020 Compensation Warrants”, and $109,918 in other share issuance costs. Each August 2020 Unit consists of one Common Share of the Company and three- quarters of one warrant (each whole warrant, an “August 2020 Warrant”) issuing 3,399,579 August 2020 Warrants in total. Each August 2020 Warrant entitles the holder to acquire one Common Share of the Company at an exercise price of $2.69 per share at any time prior to August 12, 2025. The August 2020 Warrants include a cashless exercise option which is effective only if the Company does not have an effective registration statement in the United States at the time of the exercise. In accordance with IAS 32 – Financial instruments; presentation, the August 2020 Warrants have been accounted for as derivative financial liabilities and measured at FVTPL. The fair value at issuance date of $3,511,115 for the August 2020 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.32%; b) expected life of 2 years; c) the price of the stock on the grant date of $2.70; d) expected volatility of 70%; and e) no expected dividend payments. 125,000 August 2020 Warrants have been exercised and there are 3,274,579 August 2020 Warrants outstanding at December 31, 2021. The fair value on December 31, 2021 of $54,308 for the August 2020 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.18%; b) expected life of 3 years; c) the price of the stock on December 31, 2021 of $0.47; d) expected volatility of 56.89%; and e) no expected dividend payments. On August 17, 2020, the Company issued repayment warrants (“August 2020 Repayment Warrants”, the July 2020 Repayment Warrants and the August 2020 Repayment Warrants collectively the “2020 Repayment Warrants”) to purchase up to 168,518 Common Shares at an exercise price of $7.50 per Common Share at any time prior to August 17, 2025. The exercise price is adjusted as the conversion price of the 2019 Note is adjusted. The fair value at issuance date of $27,002 for the August 2020 Repayment Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.31%; b) expected life of 2 years; c) the price of the stock on the grant date of $2.13; d) expected volatility of 68%; and e) no expected dividend payments. The fair value on December 31, 2021 of $20 for the August 2020 Repayment Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.18%; b) expected life of 2 years; c) the price of the stock on December 31, 2021 of $0.47; d) expected volatility of 56.89%; and e) no expected dividend payments. 18. SHARE CAPITAL (continued) (e) Warrants (continued) On December 8, 2020, the Company completed a registered direct offering of an aggregate 6,230,803 units (the “December 2020 Units”) at a price of $0.9801 per unit for aggregate gross proceeds to the Company of $6,106,810 less $659,410 in underwriting commission, a $96,114 fair value charge for compensation warrants “December 2020 Compensation Warrants”, and $178,968 in other share issuance costs. Each December 2020 Unit consists of one Common Share of the Company and one warrant (a “December 2020 Warrant”) to purchase one Common Share issuing 6,230,803 December 2020 Warrants in total. Each December Warrant entitles the holder to acquire one Common Share of the Company at an exercise price of $0.86 per share at any time prior to December 8, 2025. The December 2020 Warrants include a cashless exercise option which is effective only if the Company does not have an effective registration statement in the United States at the time of the exercise. In accordance with IAS 32 – Financial instruments; presentation, the December 2020 Warrants have been accounted for as derivative financial liabilities and measured at FVTPL. The fair value at issuance date of $2,051,657 for the December 2020 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.33%; b) expected life of 2 years; c) the price of the stock on the grant date of $0.86; d) expected volatility of 70%; and e) no expected dividend payments. 3,724,287 December 2020 Warrants have been exercised and there are 2,506,516 December 2020 Warrants outstanding at December 31, 2021. The fair value on December 31, 2021 of $445,092 for the December 2020 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.18%; b) expected life of 3 years; c) the price of the stock on December 31, 2021 of $0.47; d) expected volatility of 56.89%; and e) no expected dividend payments. On February 12, 2021 the Company completed a registered direct offering of an aggregate 36,000,000 units (the February 2021 Units”) at a price of $2.00 per unit for aggregate gross proceeds to the Company of $72,000,000 less $5,760,000 in underwriting commission, a $1,898,959 fair value charge for compensation warrants “February 2021 Compensation Warrants”, and $917,900 in other share issuance costs. February 2021 Units consists of one Common Share of the Company and one half of one warrant (each whole warrant, a “February 2021 Warrant”) issuing 18,000,000 February 2021 Warrants in total. Each February 2021 Warrant entitles the holder to acquire one Common Share of the Company at an exercise price of $2.30 per share at any time prior to February 12, 2026. The February 2021 Warrants include a cashless exercise option which is effective only if the Company does not have an effective registration statement in the United States at the time of the exercise. In accordance with IAS 32 – Financial instruments; presentation, the February 2021 Warrants have been accounted for as derivative financial liabilities and measured at FVTPL. The fair value at issuance date of $15,666,819 for the February 2021 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.33%; b) expected life of 2 years; c) the price of the stock on the grant date of $2.29; d) expected volatility of 70%; and e) no expected dividend payments. The fair value on December 31, 2021 of $405,508 for the February 2021 Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.18%; b) expected life of 3 years; c) the price of the stock on December 31, 2021 of $0.47; d) expected volatility of 56.89%; and e) no expected dividend payments. (f) Broker Warrants In February and March of 2019, the Company completed two $5 million underwritten public offerings and issued 144,444 broker warrants (“2019 Broker Warrants”) as part of the underwriter’s commission. The Company uses the Black-Scholes pricing model to calculate the fair value of the 2019 Broker Warrants. The fair value for the February 28, 2019 $5 million public offering and 72,222 2019 Broker Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 2.51%; b) expected life of three years; c) the price of the stock on the grant date of $4.50; d) expected volatility of 81%; and e) no expected dividend payments. The fair value at issuance date for the March 15, 2019 $5 million public offering and 72,222 2019 Broker Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 2.43%; b) expected life of three years; c) the price of the stock on the grant date of $4.50; d) expected volatility of 82%; and e) no expected dividend payments. 18. SHARE CAPITAL (continued) (f) Broker Warrants (continued) On January 6, 2020, the Company issued the January 2020 Broker Warrants to purchase up to 157,721 Common Shares at an exercise price of $5.1689 per Common Share at any time prior to January 6, 2023. The fair value at issuance date of $82,597 for the January 2020 broker warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 1.60%; b) expected life of one year; c) the price of the stock on the grant date of $3.47; d) expected volatility of 70%; and e) no expected dividend payments. On June 16, 2020, the Company issued the June 2020 Compensation Warrants to purchase up to 252,397 Common Shares at an exercise price of $3.71 per Common Share at any time prior to June 16, 2025. The fair value at issuance date of $162,467 for the June 2020 Compensation Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk- free interest rate of 0.32%; b) expected life of two years; c) the price of the stock on the grant date of $2.47; d) expected volatility of 70%; and e) no expected dividend payments. On August 12, 2020, the Company issued the August 2020 Compensation Warrants to purchase up to 294,630 Common Shares at an exercise price of $3.47 per Common Share at any time prior to August 12, 2025. The fair value at issuance date of $242,989 for the August 2020 Compensation Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.32%; b) expected life of two years; c) the price of the stock on the grant date of $2.70; d) expected volatility of 70%; and e) no expected dividend payments. On December 8, 2020, the Company issued the December 2020 Compensation Warrants to purchase up to 405,002 Common Shares at an exercise price of $1.22 per Common Share at any time prior to December 8, 2025. The fair value at issuance date of $96,114 for the December 2020 Compensation Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-free interest rate of 0.33%; b) expected life of two years; c) the price of the stock on the grant date of $0.86; d) expected volatility of 70%; and e) no expected dividend payments. On February 12, 2021, the Company issued the February 2021 Compensation Warrants to purchase up to 2,340,000 Common Shares at an exercise price of $2.50 per Common Share at any time prior to February 12, 2026. The fair value at issuance date of $1,898,959 for the February 2021 Compensation Warrants was computed using the Black-Scholes pricing model with the following assumptions: a) average risk-f |
