Annual report pursuant to Section 13 and 15(d)

Note 15 - Stock-based Compensation

v3.20.2
Note 15 - Stock-based Compensation
12 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
15.
Stock based compensation:
 
At
March 31, 2020,
the Corporation has the following stock-based compensation arrangement:
 
(a) Corporation stock option plan:
 
The Corporation has in place a stock option plan for directors, officers, employees and consultants of the Corporation. An amendment of the stock option plan was approved by shareholders on
August 27, 2019.
The amendment provides for an increase to the existing limits for Common Shares reserved for issuance under the stock option plan. The stock option plan continues to provide for the granting of options to purchase Common Shares. The exercise price of the stock options granted under this amended plan is
not
lower than the closing price of the Common Shares on the TSXV at the close of markets the day preceding the grant. The maximum number of Common Shares that
may
be issued upon exercise of options granted under the amended stock option plan was increased from
5,494,209
representing
15%
of the issued and outstanding Common Shares as of
June 27, 2018,
to
11,719,910
representing
15%
of the issued and outstanding Common Shares o as of
April 9, 2019.
The terms and conditions for acquiring and exercising options are set by the Corporation’s Board of Directors in accordance with and subject to the terms and conditions of the stock option plan, and have a contractual life of
10
years.
 
The total number of shares issued to any
one
consultant within any
twelve
-month period cannot exceed
2%
of the Corporation’s total issued and outstanding Common Shares (on a non-diluted basis). The Corporation is
not
authorized to grant within any
twelve
-month period such number of options under the stock option plan that could result in a number of Common Shares issuable pursuant to options granted to (a) related persons exceeding
2%
of the Corporation’s issued and outstanding Common Shares (on a non-diluted basis) on the date an option is granted, or (b) any
one
eligible person in a
twelve
-month period exceeding
2%
of the Corporation’s issued and outstanding Common Shares (on a non-diluted basis) on the date an option is granted.
 
The following tables summarize information about activities within the stock option plan:
    Number of
options
    Weighted average
exercise price
    Weighted average
grant date fair value
 
          CAD $     CAD $  
Outstanding, March 31, 2018    
2,284,388
     
1.81
     
1.16
 
Granted    
2,173,523
     
0.77
     
0.51
 
Exercised    
(4,167
)    
0.77
     
0.55
 
Forfeited    
(407,067
)    
1.84
     
1.21
 
Outstanding, March 31, 2019    
4,046,677
     
1.25
     
0.81
 
Granted    
6,140,517
     
0.85
     
0.85
 
Exercised    
(54,625
)    
1.11
     
0.79
 
Forfeited    
(188,583
)    
1.64
     
1.16
 
Expired    
(7,500
)    
6.50
     
3.02
 
Outstanding, March 31, 2020    
9,936,486
     
1.00
     
0.83
 
Exercisable at end of year    
3,172,234
     
1.34
     
0.98
 
 
 
    March 31,
2020
    March 31,
2019
 
Weighted average fair value of the options granted to employees and directors of the Corporation    
CAD$0.85
     
CAD$0.51
 
 
Stock-based compensation recognized under the stock option plan for the year ended
March 31, 2020
was
$442,975
(CAD
$592,469
) included in research and development expenses and
$1,510,026
(CAD
$2,021,361
) included in general and administrative expenses (for the year ended
March 31, 2019,
amounted to
$183,636
(CAD
$240,802
) included in research and development expenses and
$593,555
(CAD
$779,059
) included in general and administrative expenses). As of
March 31, 2020,
there was
$1,992,002
(CAD $
2,801,154
) (as of
March 31, 2019,
$468,698
)( CAD
$608,840
)) of total unrecognized compensation cost, related to non
-
vested share options, which is expected to be recognized over a remaining weighted average vesting period of
1.4
years (as of
March 31, 2019,
1.25
years).
 
(a) Corporation stock option plan (continued):
 
A summary of the non-vested stock option activity and related information for the Corporation’s stock options granted is as follows:
 
    Number of
options
    Weighted average
grant date fair value
 
          CAD ($)  
Non- vested, March 31, 2019    
2,433,477
     
1.05
 
Options granted    
6,140,517
     
0.85
 
Options vested    
(1,798,075
)    
1.19
 
Options forfeited and cancelled    
(11,667
)    
1.04
 
                 
Non- vested, March 31, 2020    
6,764,252
     
0.83
 
 
The fair value of options granted was estimated using the Black-Scholes option pricing model, resulting in the following weighted average assumptions for options granted during the periods ended:
 
             
    March 31, 2020
CAD
Weighted average
    March 31, 2019
CAD
Weighted average
 
             
Exercise price   $
0.85
    $
0.77
 
Share price   $
1.09
    $
0.73
 
Dividend    
     
 
Risk-free interest    
0.88
%    
2.21
%
Estimated life (years)    
5.71
     
5.68
 
Expected volatility    
99.11
     
86.10
 
 
The following tables summarize the status of the outstanding and exercisable options of the Corporation:
 
 
March 31, 2020
Exercise price CAD      
Weighted average
remaining
contractual life
     
Number of
options
outstanding
     
Number of
options
exercisable
 
$
0.53
     
10.00
     
3,836,000
     
-
 
$
0.77
     
8.25
     
1,862,106
     
1,012,674
 
$
0.78
     
8.48
     
200,000
     
100,000
 
$
0.91
     
8.66
     
50,000
     
20,833
 
$
1.28
     
9.04
     
1,991,059
     
540,573
 
$
1.46
     
9.24
     
150,000
     
37,500
 
$
1.56
     
3.11
     
525,000
     
525,000
 
$
1.65
     
6.90
     
123,333
     
123,333
 
$
1.77
     
7.20
     
747,500
     
498,333
 
$
1.99
     
3.15
     
265,700
     
265,700
 
$
2.82
     
9.63
     
150,000
     
12,500
 
$
4.50
     
2.16
     
22,500
     
22,500
 
$
4.80
     
2.38
     
13,288
     
13,288
 
 
 
     
 
     
9,936,486
     
3,172,234
 
 
 
(a) Corporation stock option plan (continued):
 
Stock-based compensation payment transactions and broker warrants:
 
The fair value of stock-based compensation transactions is measured using the Black-Scholes option pricing model. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility for a duration equal to the weighted average life of the instruments, life based on the average of the vesting and contractual periods for employee awards as minimal prior exercises of options in which to establish historical exercise experience; contractual life for broker warrants), and the risk-free interest rate (based on government bonds). Service and performance conditions attached to the transactions, if any, are
not
taken into account in determining fair value. The expected life of the stock options is
not
necessarily indicative of exercise patterns that
may
occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which
may
also
not
necessarily be the actual outcome.
 
(b) Corporation equity incentive plan:
 
The Corporation established an equity incentive plan for employees, directors and consultants. The plan provides for the issuance of restricted share units (
RSUs
), performance share units, restricted shares, deferred share units and other stock-based awards, subject to restricted conditions as
may
be determined by the Board of Directors. There were
no
such awards outstanding as of
March 31, 2020
and
March 31, 2019,
and
no
stock-based compensation was recognized for the period ended
March 31, 2020
and
March 31, 2019.