2025 Stock Option Plan

At its June 2025 Annual Meeting of Shareholders, the Company’s 2025 Stock Option and Incentive Plan (“2025 Option Plan”) was approved by the shareholders. The 2025 Option Plan replaces the 2015 Stock Option Plan (“2015 Option Plan”), originally referred to as the 2007 Option Plan. No new awards can be issued under the 2015 Option Plan.  The Company reserved 2,946,719 Common Shares for issuance under the 2025 Option Plan at the time of adoption. As of September 30, 2025 and December 31, 2024, the Company had 2,004,978 and 2,963,385 options available for grant under the 2025 Option Plan and 2015 Option Plan, respectively. The Common Shares underlying any awards under the 2025 Option Plan and 2015 Option Plan that are forfeited, canceled, or otherwise terminated (other than by exercise) are added back to the shares available for issuance under the 2025 Option Plan. Share options are granted in either USD or CAD. Upon the change in the Company’s functional currency, effective July 1, 2023, CAD share options previously classified as equity were reclassified as liabilities. All grants following the Company’s change in functional currency are in USD.

Canadian Dollar Share Options

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The following table summarizes the C$ share options outstanding under the 2025 Option Plan and 2015 Option Plan for the nine months ended September 30, 2025.

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The aggregate intrinsic value of options outstanding and vested and exercisable is calculated as the difference between the exercise price of the underlying options, and the fair value of the Company’s Common Shares when the exercise price is below fair value.  There were 58,333 and 355,760 CAD options forfeited and expired, respectively, during the nine months ended September 30, 2025.

Upon the change in the Company’s functional currency effective July 1, 2023 CAD share options previously classified as equity were reclassified as liabilities. The CAD options were re-measured as of December 31, 2023 and had a fair value of $422,002.

A summary of share-based compensation liability activity, measured using level 3 fair value inputs, for the period ended September 30, 2025 is as follows:

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A summary of share-based compensation liability activity, measured using level 3 fair value inputs, for the year ended December 31, 2024 is as follows:

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The following table summarizes the weighted average of significant assumptions used to calculate the fair value of CAD share options outstanding and exercisable as of September 30, 2025 and December 31, 2024:

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Expected volatility is based on historical volatility of the Company’s Common Shares over the expected life of the option, as the Company’s options are not readily tradable.

US Dollar Share Options

The Company began making share option grants denominated in USD following the Company’s change in functional currency in July 2023. The following table summarizes the USD share options outstanding under the 2025 Option Plan for the nine months ended September 30, 2025.

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During the nine months ended September 30, 2025, the Company granted 1,385,000 USD share options with a grant date fair value of $448,566.

The fair value of the USD share options granted was estimated using a Black-Scholes model with the following assumptions:

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DSU Plan

The Company has a Deferred Share Unit plan (“DSU Plan”) for senior officers. Under the DSU Plan, rights to the Company’s Common Shares may be awarded on a deferred payment basis up to a maximum of 16,666 common share units. Each common share unit will fully vest upon cessation of employment with the Company and then can be redeemed for one common share of the Company by the unitholder. The Company has 1,061 units outstanding as of September 30, 2025.

Share-based Payment Expense

The following table summarizes total share-based compensation included in the Company’s accompanying unaudited condensed consolidated statements of operations and comprehensive loss:

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As of September 30, 2025, there was $4,139 of unrecognized share-based compensation liability related to C$ options outstanding but unvested, which is expected to be recognized over weighted-average remaining service period of 0.5 years. There was $1,468,793 of unrecognized share-based compensation expense related to US$ options outstanding but unvested, which is expected to be recognized over the remaining service period of 2.8 years.

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