Annual report pursuant to Section 13 and 15(d)

Share Capital

v3.22.0.1
Share Capital
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Share Capital
Note 9—Share Capital
(a) Share Capital
Au
thorized: Unlimited common shares. The shares have no
par value.
The Company’s common shares are voting and dividend-paying. There were no common share issuances for the year ended December 31
, 2021
.
The following is a summary of the common share issuances for the year ended December 31, 2020:
 
 
•
 
75 common shares of the Company were issued to settle outstanding obligations, with share issuance costs of $0.2 million.
(b) Warrants
The following table summarizes certain information in respect of the Company’s warrants:
 
 
  
For the Year Ended

December 31, 2021
 
  
For the Year Ended

December 31, 2020
 
 
  
Units
 
  
Weighted Average
Exercise Price (C$)
 
  
Units
 
  
Weighted Average
Exercise Price (C$)
 
Warrants outstanding, beginning
      49,236      $ 4.06        49,236      $ 4.06  
Granted
      —          —          —          —    
Exercised
      —          —          —          —    
Expired
      (26,596 )       3.84        —          —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Warrants outstanding, ending
   
 
22,640
 
   
$
3.56
 
   
 
49,236
 
   
$
4.06
 
    
 
 
     
 
 
     
 
 
     
 
 
  
During the year ended December 31, 2021 and 2020, no full share equivalent warrants were granted.
During the year ended December 31, 2021 and 2020, no full share equivalent warrants were exercised resulting in no cash proceeds. In addition, during the year ended December 31, 2021, full share equivalent warrants expired were 26,596 
(December 31, 2020—Nil).

T
he aggregate intrinsic value of outstanding warrants as of December 
31
,
2021
and
2020
, was $
Nil
and $
Nil
,
respectively.
As of December 31, 2021 and 2020, warrants classified as derivative liabilities on the consolidated balance sheets were revalued with the following inputs:

 
 
  
December 31, 2021
 
 
December 31, 2020
 
Risk-free interest rate
      0.9 %      0.2 % 
Expected dividend yield
      0.0 %      0.0 % 
Expected volatility
      93.7
 
–
 
297.1		 %      148.0
 
–251.1		 % 
Expected life
      0.9 years       0.9 years  
The Company uses an expected volatility based on its historical trading data.
The revaluation of the warrants classified as derivative liabilities resulted in a fair value of less than $0.1 million for these instruments as of December 31, 2021 (December 31, 2020—$0.2 million). As a result of the revaluation, the Company recognized a gain of $0.2 million for the year ended December 31, 2021 (December 31, 2020 – gain of $4.8 million), on the consolidated statements of operations.
Full share equivalent warrants outstanding and exercisable are as follows:

 
 
  
For the Year Ended December 31,
2021
 
  
For the Year Ended December 31,
2020
 
Year of expiration
  
Number
Outstanding
 
  
Weighted Average
Exercise Price (C$)
 
  
Number
Outstanding
 
  
Weighted Average
Exercise Price (C$)
 
2021
      —        $ —          26,596      $ 4.37  
2022
      20,855        3.47        20,855        3.62  
2023
      1,785        4.57        1,785        4.57  
    
 
 
     
 
 
     
 
 
     
 
 
  
Warrants outstanding
   
 
22,640
 
   
$
3.56
 
   
 
49,236
 
   
$
4.06
 
    
 
 
     
 
 
     
 
 
     
 
 
  
(c) Potentially Dilutive Securities
The following table summarizes potentially dilutive securities, and the resulting common share equivalents outstanding as of December 31, 2021 and 2020:
 
 
  
December 31, 2021
 
  
December 31, 2020
 
Common share options
      10,504        11,510  
Warrants
      22,640        49,236  
Secured notes
      46,458        46,458  
Debentures
      10,135        10,135  
MPX dilutive instruments
(1)
      408        408  
    
 
 
     
 
 
  
Total
   
 
90,145
 
   
 
117,747
 
    
 
 
     
 
 
  
 
(1)
Prior to the MPX Acquisition, MPX had instruments outstanding that were potentially dilutive and as a result of the MPX Acquisition, the Company assumed certain of these instruments.
Total potentially dilutive securities does not include the shares that would potentially be issued upon conversion of the accrued interest on the Company’s long-term debt. As of December 31, 2021, this would amount to 16.4 million common shares (December 31, 2020
 
–
 8.0 million common shares).
(d) Stock Options
In November 2015, ICM established the ICM 2015 Equity Compensation Plan (the “Plan”), which was subsequently amended on October 15, 2018. The Plan authorized the issuance of up to 2,000,000 Class A common shares. Options granted generally vest over a period of 3 years, and typically have a life of 10 years.
The option price under the Plan is determined at the sole discretion of management and the exercise price of all stock options shall be the higher of the closing price on the grant date, the closing price of the previous trading day before the grant date, or
 
if and when appropriate
, the
five-day
volume weighted average price. Following the Class A conversion, no new class A shares were issued under the Plan, and all existing Class A options are convertible into common shares.
The Company also has a rolling stock option plan (the “ICH Plan”), in which the maximum number of common shares which can be reserved for issuance under the plan is 20.0% of the issued and outstanding common shares of the Company. The exercise price of each option shall not be less than the closing price of the common shares on the trading day immediately preceding the day on which the option is granted, less any discount permitted by the CSE.
The following table summarizes certain information in respect of option activity under the Company’s stock option plan:
 
 
  
For The Year Ended December 31, 2021
 
  
For The Year Ended December 31, 2020
 
 
  
Units
 
 
Weighted
Average
Exercise
Price
(C$)
 
  
Weighted
Average
Contractual
Life
 
  
Units
 
 
Weighted
Average
Exercise
Price
(C$)
 
  
Weighted
Average
Contractual
Life
 
Options outstanding, beginning
  
 
   11,510     $ 4.86    
 
   —      
 
   19,578     $ 4.80    
 
   —    
Granted
  
 
   —         —      
 
   —      
 
   135       0.82    
 
   —    
Exercised
  
 
   —         —      
 
   —      
 
   —         —      
 
   —    
Forfeited/Expired
  
 
   (1,006 )      3.96    
 
   —      
 
   (8,203 )      4.99    
 
   —    
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Options outstanding, ending
  
 
 
10,504
 
  
$
4.95
 
  
 
 
6.24
 
  
 
 
11,510
 
  
$
4.86
 
  
 
 
7.34
 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
During the year ended December 31, 2021, no stock options were granted. During the year ended December 31, 2020, 135 incentive stock options were granted with an exercise price of C$0.82 per common share.
No stock options were exercised during the year ended December 31, 2021 and 2020.
The aggregate intrinsic value of outstanding options as of December 31, 2021 and 2020, was $Nil and $Nil, respectively.
The Company used the Black-Scholes option pr
icing model to estimate the fair value of the options at the grant date
using the following ranges of assumptions:
 
 
  
December 31, 2021
 
  
December 31, 2020
 
Risk-free interest rate
  
 
—  
 
  
 
0.6
% 
Expected dividend yield
  
 
—  
 
  
 
0.0
% 
Expected volatility
  
 
—  
 
  
 
85.0
% 
Expected option life
  
 
—  
 
  
 
7 years
 
The Company uses an expected volatility based on its historical trading data.
The related share-based compensation expense for the year ended December 31, 2021 was $6.5 million (December 31, 2020—$11.4 million), and is presented in the selling, general and administrative expenses line on the consolidated statements of operations.
As of December 31, 2021, the weighted average period over which compensation cost on
non-vested
stock options is expected to be recognized is 0.4 years and the unrecognized expense is $1.9 million.