RE:Financials are up on Sedar Now Issued and Outstanding Share Capital
The Company’s authorized capital consists of an unlimited number of common shares, of which
112,318,429 common shares are issued and outstanding as of the date of this MD&A.
At the annual and special meeting of holders of common shares (the “Shareholders”) held on June 18, 2014
(the “Shareholders Meeting”), Shareholders approved an increase in the fixed maximum number of common
shares reserved for issuance under the Company’s stock option plan (the “Stock Option Plan”) from
3,788,215 common shares to 5,250,000 common shares, representing approximately 4.7% of the issued
and outstanding common shares as at the date of the MD&A. As at the date of this MD&A, options to
purchase up to an aggregate of 3,853,292 common shares were outstanding and options to purchase up to
an additional1,396,708common shares are available for grant under the Stock Option Plan.
At the Shareholders Meeting, Shareholders also approved an increase in the fixed maximum number of
common shares reserved for grant under the Company’s restricted share unit plan (the “RSU Plan”) from
3,788,215 common shares to 5,250,000 common shares, representing approximately 4.7% of the issued
and outstanding common shares as at the date of this MD&A. As at the date of this MD&A, an aggregate of
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3,233,590 restricted share unit awards were outstanding, 1,190,451 restricted share unit awards are
available for grant and 825,959 common shares have been issued under the RSU Plan.
As at the date of this MD&A, there are broker and compensation warrants outstanding to purchase up to
839,316 common shares and charitable options outstanding to purchase up to 16,435 common shares.
Liquidity and Capital Resources
Historically, the Company has funded its operations from the sale of equity securities and from bank loans.
On March 28, 2014 and April 28, 2014, the Company closed a public offering of 26,833,333 Units (including
the exercise of the over-allotment option in full) at a price of CDN $0.30 per Unit for gross proceeds of CDN
$8.05 million (the “Offering”).
During the three months ended December 31, 2014, the Company received proceeds of CDN $5.182 million
and issued 11,889,102 common shares composed of 326,658 broker warrants at CDN $0.55 per share,
1,506,710 broker warrants at CDN $0.30 per share, 170,000 broker warrants at CDN $0.60 per share and
9,885,734 non-broker warrants at CDN $0.45 per share. Also during the three months ended December 31,
2014, the Company issued 1,506,710 non-broker warrants as a result of the exercise of 1,506,710 broker
warrants at CDN $0.30 per unit (each unit consisting of one common share and one non-broker warrant).
Subsequent to the year-end, the Company received $6,957,433 (CDN $8,705,409) and issued 19,555,760
common shares and 639,956 non-broker common share purchase warrants as a result of the exercise of
639,956 broker warrants at CDN $0.30 per Unit, 13,104 broker warrants at CDN $0.55 per share and
18,902,700 non-broker common share purchase warrants at CDN $0.45 per share.
The Company’s objectives are to grow revenue by expanding its product lines and entering new markets,
to finance investment in research and development and to ensure that capital resources are readily
available to meet obligations as they become due. Liquidity risk arises when the Company is challenged to
fund its on-going operations through either the sale of equity or bank loans.
The Company may face challenges in generating sufficient amounts of cash and cash equivalents in the
short-term and potentially beyond due to such factors as:
challenges in the supply chain whereby lead times to secure components can run between
8-20 weeks and often require the Company to prepay or make deposits to secure the
components;
delays in the development of new products and bring them to market;
acceptance of new products in the market and sales volatility as a result of transitions to
new product lines;
transition from a Canadian controlled private corporation to a publicly traded corporation
has eliminated the refundable portion of the SRED tax incentive program; and
repayment of the bank loan which commenced on March 1, 2014 at the rate of $100
thousand per month for 30 months.