SHARE CAPITAL | 8. SHARE CAPITAL: Common shares a) Authorized: Unlimited number of common shares, without par value. The holders of common shares are entitled to receive dividends which are declared from time to time, and are entitled to one vote per share at meetings of the Company. All shares are ranked equally with regards to the Companys residual assets. b) Stock transactions: During the year ended April 30, 2016, the Company completed the following stock transactions: i) On July 10, 2015, the Company issued 1,085,297 common shares with a fair value of $228,775 including 693,573 shares having a fair value of $136,735 which the Company had committed to issue at April 30, 2015. The common shares were issued as debt discounts pursuant to the Promissory Notes and the Second Promissory Notes (Notes 5 and 6). ii) On July 14, 2015, the Company issued 2,267,685 common shares with a fair value of $427,177 as settlement of accrued interest payable on Promissory Notes and Second Promissory Notes (Notes 5 and 6). iii) On December 15, 2015, the Company issued 2,948,431 common shares with a fair value of $536,541 as settlement of accrued interest payable on Promissory Notes and Second Promissory Notes (Notes 5 and 6). iv) On January 5, 2016, the Company issued 746,811 common shares with a fair value of $180,256. The common shares were issued as debt discounts pursuant to the Second Promissory Notes (Note 6). v) On January 29, 2016, the Company issued 25,000 shares on the exercise of share purchase warrants. During the year ended April 30, 2015, the Company completed the following stock transactions: i) On May 7, 2014, the Company issued 100,000 common shares on the exercise of stock options with an exercise price of CAD$0.10 per common share resulting in gross proceeds of CAD$10,000 ($9,185). ii) On July 31, 2014, the Company issued 412,193 common shares with a fair value of $96,000 including 313,350 shares having a fair value of $79,223 for which the Company had committed to issue at April 30, 2014. The common shares were issued as a debt discount pursuant to the Promissory Notes. iii) On August 12, 2014, the Company issued 741,233 common shares with a fair value of $152,701 as settlement of accrued interest payable on Promissory Notes (Note 5). iv) On December 17, 2014, the Company issued 1,622,029 common shares with a fair value of $313,571 as settled of accrued interest payable on Promissory Notes (Note 5). v) On January 13, 2015, the Company issued 360,567 common shares with a fair value of $72,000. The common shares were issued as a debt discount pursuant to the Promissory Notes (Note 5). c) Stock options: The Company has granted stock options under the terms of its Stock Option Plan (the Plan). The Plan provides that the directors of the Company may grant options to purchase common shares to directors, officers, employees and service providers of the Company on terms that the directors of the Company may determine are within the limitations set forth in the Plan. The maximum number of shares available under the Plan is limited to 10% of the issued common shares. The maximum term of stock options is ten years. All stock options vest on the date of grant, unless otherwise stated. As at April 30, 2016, the Company had 2,797,895 stock options available for grant pursuant to the Plan (2015 - 2,790,573). The Companys stock options outstanding as at April 30, 2016 and 2015 and the changes for the years then ended are as follows: Number Outstanding Weighted Average Exercise Price (in CAD$) Balance outstanding at April 30, 2014 4,160,000 0.26 Granted 2,425,000 0.25 Exercised (100,000) 0.10 Expired (1,250,000) 0.40 Forfeited (100,000) 0.25 Balance outstanding at April 30, 2015 5,135,000 0.22 Granted 1,200,000 0.25 Expired (500,000) 0.40 Balance outstanding at April 30, 2016 5,835,000 0.21 Balance exercisable at April 30, 2016 5,225,000 0.21 The intrinsic value of options exercised during the year ended April 30, 2015 was CAD$18,000 based on a stock price of CAD$0.28 on the date of exercise. Summary of stock options outstanding at : Security Number Outstanding Exercise Price (CAD$) Expiry Date Remaining Contractual Life (years) Stock options 1,300,000 0.10 July 30, 2018 2.25 Stock options 260,000 0.15 July 30, 2018 2.25 Stock options 300,000 0.25 July 30, 2018 2.25 Stock options 200,000 0.25 November 19, 2018 2.56 Stock options 150,000 0.25 January 8, 2019 2.69 Stock options 300,000 0.25 May 23, 2019 3.06 Stock options 150,000 0.25 December 16, 2017 1.63 Stock options 1,975,000 0.25 January 29, 2020 3.75 Stock options 200,000 0.25 August 4, 2020 4.27 Stock options 1,000,000 0.25 February 25, 2018 1.82 The weighted average grant date fair value of stock options granted during the years ended April 30, 2016 and 2015 of CAD$0.11 (2015 CAD$0.16) was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: 2016 2015 Stock price (CAD$) 0.23 0.22 Exercise price (CAD$) 0.25 0.25 Risk-free interest rate (%) 1.0 2.0 Expected life (years) 2.5 4.9 Expected volatility (%) 86 94 Expected dividends ($) Nil Nil Expected volatility was determined by reference to the historical volatility of the Companys common shares trading on the TSX Venture Exchange. Non-Employee Stock Options In accordance with the guidance of ASC 815-40-15, stock options awarded to non-employees that are fully vested and exercisable in Canadian dollars are required to be accounted for as derivative liabilities because they are considered not to be indexed to the Companys stock due to their exercise price being denominated in a currency other than the Companys functional currency. Stock options awarded to non-employees that are not vested are accounted for as equity awards until the terms associated with their vesting requirements have been met. As at April 30, 2016, there were no non-employee stock option awards that had not vested (2015 112,500). The non-employee stock options are accounted for at their respective fair values and are summarized as follows for the years ended April 30, 2016 and 2015: 2016 $ 2015 $ Fair value of non-employee options, beginning of the period 116,615 68,859 Fair value of options granted 102,273 - Fair value of options on vesting 11,366 80,361 Change in fair value of non-employee stock options during the period (41,047) (32,605) Fair value of non-employee options, end of the period 189,207 116,615 The Company determined the fair value of its non-employee stock options as at April 30, 2016 and 2015 using the Black-Scholes option pricing model with the following weighted average assumptions: 2016 2015 Stock price (CAD$) 0.23 0.25 Exercise price (CAD$) 0.23 0.19 Risk-free interest rate (%) 1.34 1.23 Expected life (years) 2.43 3.82 Expected volatility (%) 87 101 Expected dividends ($) Nil Nil The non-employee options are required to be re-valued with the change in fair value of the liability recorded as a gain or loss on the change of fair value of derivative liability and included in other items in the Companys Consolidated Statements of Loss at the end of each reporting period. The fair value of the options will continue to be classified as a liability until such time as they are exercised, expire or there is an amendment to the respective agreements that renders these financial instruments to be no longer classified as a liability. As at , the unamortized compensation cost of options is $41,579 and the intrinsic value of options expected to vest is $124,516 (CAD$156,250). Share-based payments are classified in the Companys Statement of Loss during the years ended April 30, 2016 and 2015 as follows: 2016 $ 2015 $ Management and consulting fees 105,606 309,723 105,606 309,723 d) Share purchase warrants: A summary of fully-exercisable share purchase warrants as at and 2015 and the changes for the years then ended are as follows: Number Outstanding Weighted Average Exercise Price (CAD$) Balance at April 30, 2014 23,402,612 0.38 Issued 1,152,983 0.23 Balance at April 30, 2015 24,555,595 0.37 Issued 1,487,860 0.25 Expired (20,175,000) 0.40 Exercised (25,000) 0.25 Balance at April 30, 2016 5,843,455 0.27 Summary of warrants outstanding and issuable at : Security Number Outstanding Exercise Price ($CAD) Expiry Date Warrants 1,550,000 0.40 January 31, 2017 Warrants 667,520 0.14 December 1, 2016 (1) Warrants 122,142 0.14266 December 1, 2016 (1) Warrants 104,119 0.165 December 1, 2016 (1) Warrants 76,723 0.17 December 1, 2016 (1) Warrants 87,818 0.17223 December 1, 2016 (1) Warrants 111,762 0.185 December 1, 2016 (1) Warrants 132,208 0.217 December 1, 2016 (1) Warrants 62,002 0.222 December 1, 2016 (1) Warrants 58,181 0.225 December 1, 2016 (1) Warrants 165,326 0.23 December 1, 2016 (1) Warrants 51,202 0.25 December 1, 2016 (1) Warrants 92,357 0.276 December 1, 2016 (1) Warrants 200,091 0.28 December 1, 2016 (1) Warrants 45,439 0.29 December 1, 2016 (1) Warrants 96,261 0.292 December 1, 2016 (1) Warrants 52,459 0.305 December 1, 2016 (1) Warrants 730,848 0.22 December 31, 2018 (1) Warrants 96,278 0.227 December 31, 2018 (1) Warrants 242,545 0.23 December 31, 2018 (1) Warrants 89,798 0.239 December 31, 2018 (1) Warrants 194,344 0.24 December 31, 2018 (1) Warrants 37,203 0.245 December 31, 2018 (1) Warrants 85,308 0.25 December 31, 2018 (1) Warrants 77,941 0.255 December 31, 2018 (1) Warrants 192,206 0.259 December 31, 2018 (1) Warrants 126,843 0.265 December 31, 2018 (1) Warrants 198,750 0.272 December 31, 2018 (1) Warrants 95,781 0.291 December 31, 2018 (1) Notes: (1) The warrants are exercisable until the earlier of the date disclosed or the date that the promissory note or second promissory note advance, including interest, is repaid (Notes 5 and 6). |