Quarterly report pursuant to Section 13 or 15(d)

EQUITY

v3.23.3
EQUITY
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
EQUITY
 12. EQUITY
Authorized, Issued and Outstanding
The authorized share capital of the Company consists of an unlimited number of SVS, Multiple Voting Shares, Super Voting Shares, and Preferred Shares. As of September 30, 2023, the Company had 196,631,598 SVS issued and outstanding and no Multiple Voting Shares, Super Voting Shares or Preferred Shares issued and outstanding.
Warrants
Each warrant entitles the holder to purchase one SVS. Certain warrants may be net share settled. The following table summarizes the status of warrants and related transactions:
Non-Derivative (Equity) Warrants
Derivative Liabilities Warrants (1)
Total Number of Warrants Weighted - Average Exercise Price
Balance as of January 1, 2023
30,673,635 55,375,202 86,048,837 $ 1.40 
Granted 851,471  —  851,471  $ 0.61 
Cancelled/forfeited/expired (337,500) —  (337,500) $ 1.49 
Reclassification 17,512,280  (17,512,280) — $ — 
Balance as of September 30, 2023
 48,699,886 37,862,922 86,562,808 $ 1.16 
Exercisable as of September 30, 2023
46,524,886 37,862,922 84,387,808 $ 1.14 
(1)In June 2023, 5,890,000 warrants were repriced from $1.25 to $1.00. Additionally, 17,512,280 warrants were reclassified from derivative liability warrants to non-derivative (equity) warrants and repriced from $2.086 to $1.00. Refer to Note 11 - Derivative Liabilities for additional information.
Share-based payment award plans
Plan summary and description
Under the Company’s 2019 Equity Incentive Plan, as amended, (the “2019 Plan”), non-transferable options to purchase SVS and restricted SVS of the Company may be issued to directors, officers, employees, or consultants of the Company. The 2019 Plan authorizes the issuance of up to 15% (plus an additional 2% inducements for hiring employees and senior management) of the number of outstanding shares of common stock (of all classes) of the Company (the “Share Reserve”). Incentive stock options are limited to the Share Reserve, and the maximum number of incentive awards available for issuance under the 2019 Plan, including additional awards available for certain new hires, was 5,051,423 as of September 30, 2023.

Stock Options
The stock options issued by the Company are options to purchase SVS of the Company. All stock options issued have been issued to directors and employees under the Company’s 2019 Plan. Such options generally expire ten years from the date of grant and generally vest ratably over three years from the grant date. The options generally may be net share settled. The following table summarizes the status of stock options and related transactions:
Number of Stock Options Weighted-Average Per Share Exercise Price
Issued and Outstanding as of January 1, 2023 30,752,259  $ 2.58 
Granted 4,112,000  $ 0.51 
Cancelled/forfeited/expired (6,490,171) $ 2.60 
Issued and Outstanding as of September 30, 2023 28,374,088  $ 2.27 
Exercisable as of September 30, 2023 17,364,078  $ 2.49 
The fair value of the stock options granted was determined using the Black-Scholes option-pricing model. The following assumptions were used for the calculation at date of grant:
Nine Months Ended September 30,
2023 2022
Weighted average stock price $0.51 $2.02
Weighted average expected stock price volatility 76.9% 73.1%
Expected annual dividend yield 0% 0%
Weighted average expected life 6.0 years 5.8 years
Weighted average risk-free annual interest rate 3.6% 2.6%
Weighted average grant date fair value $0.34 $1.45
Restricted Stock

The Company grants restricted SVS to independent directors, management, former owners of acquired businesses or assets, and to consultants and other employees. The restricted SVS are included in the issued and outstanding SVS, and the fair value of the restricted stock granted was estimated based on the SVS price at grant date. The following table summarizes the status of restricted stock and related transactions:
Number of Restricted Subordinate Voting Shares
Unvested restricted stock as of January 1, 2023 1,156,319
Cancelled/forfeited (54,774)
Vested and Released (1,099,684)
Unvested restricted stock as of September 30, 2023 1,861
Generally, restricted stock awards will vest either one-third on each anniversary of service from the vesting start date or will be fully vested on the completion of one year of full service from the vesting start date, depending on the award.
Share-based compensation cost

The components of share-based compensation expense are as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Stock options $ 712  $ 4,569  $ 4,170  $ 14,369 
Restricted stock —  347  293  1,625 
Warrants 344  550  1,267 1,120
Total share-based compensation expense $ 1,056  $ 5,466  $ 5,730  $ 17,114 
As of September 30, 2023, the Company had $6,268 of unrecognized share-based compensation cost related to unvested stock options, restricted stock and warrants, which is expected to be recognized as share-based compensation cost over a weighted average period of 1.9 years.