SHARE CAPITAL | 7. 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 Company’s residual assets. b) Stock transactions: During the three months ended July 31, 2017, the Company completed the following stock transactions: i) On July 11, 2017, the Company issued 112,433 common shares with a fair value of $39,375 including 88,089 common shares having a fair value of $29,625 which the Company had committed to issue at April 30, 2017. The common shares were issued as debt discounts pursuant to the Third Promissory Notes (Note 5). c) Stock options: The Company has granted stock options under the terms of its Stock Option Plan (the “Plan”). The Plan provides that the directors of the Company may grant options to purchase common shares to directors, officers, employees and service providers of the Company on terms that the directors of the Company may determine are within the limitations set forth in the Plan. The maximum number of shares available under the Plan is limited to 10% of the issued common shares. The maximum term of stock options is ten years. All stock options vest on the date of grant, unless otherwise stated. As at July 31, 2017, the Company had 2,393,479 stock options available for grant pursuant to the Plan (April 30, 2017 - 2,382,236). The Company’s stock options outstanding as at July 31, 2017 and April 30, 2017 and the changes for the periods then ended are as follows: Number Outstanding Weighted Average Exercise Price (in CAD$) Balance outstanding at April 30, 2017 6,555,000 0.22 Balance outstanding at July 31, 2017 6,555,000 0.22 Balance exercisable at July 31, 2017 5,925,000 0.22 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 1.00 Stock options 260,000 0.15 July 30, 2018 1.00 Stock options 300,000 0.25 July 30, 2018 1.00 Stock options 200,000 0.25 November 19, 2018 1.30 Stock options 150,000 0.25 January 8, 2019 1.44 Stock options 300,000 0.25 May 23, 2019 1.81 Stock options 150,000 0.25 December 16, 2017 0.38 Stock options 1,975,000 0.25 January 29, 2020 2.50 Stock options 200,000 0.25 August 4, 2020 3.01 Stock options 1,000,000 0.25 February 25, 2018 0.57 Stock options 20,000 0.22 May 19, 2018 0.80 Stock options 300,000 0.30 July 21, 2021 3.98 Stock options 400,000 0.30 November 3, 2021 4.26 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 Company’s stock due to their exercise price being denominated in a currency other than the Company’s 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 July 31, 2017, there were 200,000 (April 30, 2017 – 300,000) non-employee stock option awards that had not yet vested. The non-employee stock options are accounted for at their respective fair values and are summarized as follows for the three months ended July 31, 2017 and 2016: 2017 $ 2016 $ Fair value of non-employee options, beginning of the period 446,354 189,207 Fair value of options on vesting 32,798 - Change in fair value of non-employee stock options during the period (148,251) 62,023 Fair value of non-employee options, end of the period 330,901 251,230 The Company determined the fair value of its non-employee stock options as at July 31, 2017 and April 30, 2017 using the Black-Scholes option pricing model with the following weighted average assumptions: July 31, 2017 April 30, 2017 Stock price (CAD$) 0.38 0.48 Exercise price (CAD$) 0.23 0.23 Risk-free interest rate (%) 0.90 0.83 Expected life (years) 1.44 1.56 Expected volatility (%) 58 59 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 Company’s 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 $60,675 and the intrinsic value of options expected to vest is $740,304 (CAD$924,225). Share-based payments are classified in the Company’s Statement of Loss during the three months ended July 31, 2017 and 2016 as follows: 2017 $ 2016 $ Management and consulting fees 9,829 72,169 9,829 72,169 d) Share purchase warrants: A summary of fully-exercisable share purchase warrants as at and April 30, 2017 and the changes for the periods then ended are as follows: Number Outstanding Weighted Average Exercise Price (CAD$) Balance at April 30, 2017 4,349,932 0.31 Issued 55,771 0.50 Balance at July 31, 2017 4,405,703 0.31 Summary of warrants outstanding and issuable at : Security Number Outstanding Exercise Price ($CAD) Expiry Date Warrants 730,848 0.22 December 31, 2018 (1) Warrants 242,545 0.23 December 31, 2018 (1) Warrants 194,344 0.24 December 31, 2018 (1) Warrants 37,203 0.245 December 31, 2018 (1) Warrants 393,058 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) Warrants 100,373 0.295 December 31, 2018 (1) Warrants 101,095 0.298 December 31, 2018 (1) Warrants 49,294 0.299 December 31, 2018 (1) Warrants 150,246 0.310 December 31, 2018 (1) Warrants 58,496 0.335 December 31, 2018 (1) Warrants 30,139 0.405 December 31, 2018 (1) Warrants 40,761 0.460 December 31, 2018 (1) Warrants 25,621 0.470 December 31, 2018 (1) Warrants 63,756 0.475 December 31, 2018 (1) Warrants 24,344 0.540 December 31, 2018 (1) Warrants 1,550,000 0.40 January 31, 2019 Notes: (1) The warrants are exercisable until the earlier of the date disclosed or the date that the promissory note advance, including interest, is repaid (Note 5). | 7. 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 Company’s residual assets. b) Stock transactions: During the year ended April 30, 2017, the Company completed the following stock transactions: i) On June 14, 2016, the Company issued 980,000 common shares on the exercise of stock options with an exercise price of CAD$0.22 per common share resulting gross proceeds of CAD$215,600 ($167,736). ii) On September 23, 2016, the Company issued 486,346 common shares with a fair value of $116,756 including 349,325 shares having a fair value of $81,112 which the Company had committed to issue at April 30, 2016. The common shares were issued as debt discounts pursuant to the Second Promissory Notes and the Third Promissory Notes (Note 5). iii) On December 1, 2016, the Company issued 1,170,084 common shares on the exercise of share purchase warrants with exercise prices ranging from CAD$0.14 to CAD$0.185 for gross proceeds of $132,838. iv) On January 25, 2017, the Company issued 366,216 common shares with a fair value of $84,000. The common shares were issued as debt discounts pursuant to the Third Promissory Notes (Note 5). v) On March 28, 2017, the Company issued 40,761 common shares with a fair value of $14,013. The common shares were issued as debt discounts pursuant to the Fourth Promissory Notes (Note 5). 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 (Note 5). 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 (Note 5). 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 (Note 5). iv) On January 5, 2016, the Company issued 746,811 common shares with a fair value of $180,256. The common shares were issued as debt discounts pursuant to the Second Promissory Notes (Note 5). v) On January 29, 2016, the Company issued 25,000 shares on the exercise of share purchase warrants. c) Stock options: The Company has granted stock options under the terms of its Stock Option Plan (the “Plan”). The Plan provides that the directors of the Company may grant options to purchase common shares to directors, officers, employees and service providers of the Company on terms that the directors of the Company may determine are within the limitations set forth in the Plan. The maximum number of shares available under the Plan is limited to 10% of the issued common shares. The maximum term of stock options is ten years. All stock options vest on the date of grant, unless otherwise stated. As at April 30, 2017, the Company had 2,382,236 stock options available for grant pursuant to the Plan (2016 - 2,797,895). The Company’s stock options outstanding as at April 30, 2017 and 2016 and the changes for the years then ended are as follows: Number Outstanding Weighted Average Exercise Price (in CAD$) 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 Granted 1,700,000 0.25 Exercised (980,000) 0.22 Balance outstanding at April 30, 2017 6,555,000 0.22 Balance exercisable at April 30, 2017 5,825,000 0.22 The intrinsic value of options exercised during the year ended was CAD$88,200 based on a stock price of CAD$0.31 on the date of exercise. Summary of stock options outstanding at : Security Number Outstanding Exercise Price (CAD$) Expiry Date Remaining Contractual Life (years) Stock options 1,300,000 0.10 July 30, 2018 1.25 Stock options 260,000 0.15 July 30, 2018 1.25 Stock options 300,000 0.25 July 30, 2018 1.25 Stock options 200,000 0.25 November 19, 2018 1.56 Stock options 150,000 0.25 January 8, 2019 1.69 Stock options 300,000 0.25 May 23, 2019 2.06 Stock options 150,000 0.25 December 16, 2017 0.63 Stock options 1,975,000 0.25 January 29, 2020 2.75 Stock options 200,000 0.25 August 4, 2020 3.27 Stock options 1,000,000 0.25 February 25, 2018 0.82 Stock options 20,000 0.22 May 19, 2018 1.05 Stock options 300,000 0.30 July 21, 2021 4.23 Stock options 400,000 0.30 November 3, 2021 4.52 The weighted average grant date fair value of stock options granted during the year ended April 30, 2017 of CAD$0.14 (2016 – CAD$0.11) was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: 2017 2016 Stock price (CAD$) 0.25 0.23 Exercise price (CAD$) 0.25 0.25 Risk-free interest rate (%) 1.1 1.0 Expected life (years) 3.2 2.5 Expected volatility (%) 85 86 Expected dividends ($) Nil Nil Expected volatility was determined by reference to the historical volatility of the Company’s 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 Company’s stock due to their exercise price being denominated in a currency other than the Company’s 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, 2017, there were 300,000 (2016 - nil) non-employee stock option awards that had not yet vested. The non-employee stock options are accounted for at their respective fair values and are summarized as follows for the years ended April 30, 2017and 2016: 2017 $ 2016 $ Fair value of non-employee options, beginning of the period 189,207 116,615 Fair value of options granted - 102,273 Fair value of options on vesting 23,415 11,366 Change in fair value of non-employee stock options during the period 233,732 (41,047) Fair value of non-employee options, end of the period 446,354 189,207 The Company determined the fair value of its non-employee stock options as at April 30, 2017 and 2016 using the Black-Scholes option pricing model with the following weighted average assumptions: 2017 2016 Stock price (CAD$) 0.48 0.23 Exercise price (CAD$) 0.23 0.23 Risk-free interest rate (%) 0.83 1.34 Expected life (years) 1.56 2.43 Expected volatility (%) 59 87 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 Company’s 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 $76,732 and the intrinsic value of options expected to vest is $1,098,333 (CAD$1,499,225). Share-based payments are classified in the Company’s Statement of Loss during the years ended April 30, 2017 and 2016 as follows: 2017 $ 2016 $ Management and consulting fees 202,886 105,606 202,886 105,606 d) Share purchase warrants: A summary of fully-exercisable share purchase warrants as at and April 30, 2016 and the changes for the years then ended are as follows: Number Outstanding Weighted Average Exercise Price (CAD$) Balance at April 30, 2015 24,555,595 0.37 Issued 1,456,617 0.25 Expired (20,175,000) 0.40 Exercised (25,000) 0.25 Balance at April 30, 2016 5,812,212 0.27 Issued 663,330 0.33 Exercised (1,170,084) 0.15 Expired (955,526) 0.26 Balance at April 30, 2017 4,349,932 0.31 Summary of warrants outstanding and issuable at : Security Number Outstanding Exercise Price ($CAD) Expiry Date Warrants 730,848 0.22 December 31, 2018 (1) Warrants 242,545 0.23 December 31, 2018 (1) Warrants 194,344 0.24 December 31, 2018 (1) Warrants 37,203 0.245 December 31, 2018 (1) Warrants 393,058 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) Warrants 100,373 0.295 December 31, 2018 (1) Warrants 101,095 0.298 December 31, 2018 (1) Warrants 49,294 0.299 December 31, 2018 (1) Warrants 150,246 0.310 December 31, 2018 (1) Warrants 58,496 0.335 December 31, 2018 (1) Warrants 30,139 0.405 December 31, 2018 (1) Warrants 40,761 0.460 December 31, 2018 (1) Warrants 25,621 0.470 December 31, 2018 (1) Warrants 32,329 0.475 December 31, 2018 (1) Warrants 1,550,000 0.40 January 31, 2019 Notes: (1) The warrants are exercisable until the earlier of the date disclosed or the date that the promissory note advance, including interest, is repaid (Note 5). |