Share based compensation

12 Months Ended

Dec. 31, 2025

Share based compensation

Share Based Compensation

18. Share-based compensation

The Company has an equity compensation program in place for its executives, employees and directors. Executives and employees are given equity compensation grants that vest based on a recipient’s continued employment. The Company’s stock-based compensation awards outstanding as at December 31, 2025, include stock options, DSUs, RSUs, and the employee share purchase plan (“ESP Plan”). The following tables provide information about stock option, RSUs, DSUs, and ESP Plan activity.

		For the years ended December 31,
		2025				2024				2023
Stock Option Expense		$	205,859			$	118,849			$	92,500
Deferred Share Units			155,000				15,000				-
Compensation Expense (Note 16)			-				52,634				55,821
Stock-based compensation expense in Contributed Capital			360,859				186,483				148,321

Employee Share Purchase Plan			43,494				41,619				30,508
Restricted Stock Units			298,527				40,632				62,442
Total stock-based compensation expense			702,880				268,734				241,271

Stock Options:

The following is a summary of stock options which are outstanding as at December 31, 2025.

Exercise price per share	# of options outstanding	# of options exercisable	Average remaining life (in years)
$0.200	166,200	166,200	2.4
$0.203	1,400,000	-	4.2
$0.216	1,553,334	440,000	2.0
$0.252	78,850	78,850	2.7
$0.259	100,000	33,333	2.7
$0.260	52,650	52,650	2.0
$0.264	177,200	177,200	2.0
$0.309	4,350,000	50,000	5.0
	7,878,234	998,233	4.0

The continuity of the number of stock options which are outstanding at the end of the current year and as at the prior years ended December 31, 2024, and 2023 are as follows:

		For the years ended December 31,
		2025								2024
						weighted								Weighted
		# of stock				average				# of stock				Average
		Options				exercise price				Options				exercise price
Options outstanding, start of the year			2,647,820				$0.30				2,927,820				$0.32
Granted			5,750,000				$0.28				-				$-
Exercised			(310,799	)			$(0.21	)			-				$-
Forfeited			-				$-				(180,000	)			$(0.22	)
Expired			(208,787	)			$(0.48	)			(100,000	)			$(0.52	)
Options outstanding, end of the year			7,878,234				$0.27				2,647,820				$0.24
Options exercisable, end of the year			998,233				$0.23				777,820				$0.30

		For the year ended December 31,
		2023
						Weighted
		# of stock				Average
		Options				exercise price
Options outstanding, start of the year			461,320				$0.51
Granted			2,716,500				$0.22
Forfeited			(100,000	)			$(0.22	)
Expired			(150,000	)			$(0.59	)
Options outstanding, end of the year			2,927,820				$0.25
Options exercisable, end of the year			877,820				$0.32

Stock options granted generally expire, if unexercised, five years from the date granted and entitlement to exercise them generally vests at a rate as determined by the Board of Directors.

On December 16, 2025, the Company granted 4,300,000 incentive stock options at a strike price of $0.309 to employees and directors of the Company. One half of these stock options will vest when the Company achieves a trailing twelve-month free cash flow per share of $0.15. The other half will vest when the Company achieves a trailing 12-month revenue of $25,000,000. The Company is recognizing Stock based compensation expense (“SBCE”) for these stock options. None have vested as of December 31, 2025.

On February 24, 2025, the Company granted 1,400,000 incentive stock options at a strike price of $0.203 to directors of the Company. These stock options will vest upon the achieving of a trailing twelve-month free cash flow per share of $0.10. The Company is recognizing Stock based compensation expense (“SBCE”) for these stock options. None have vested as of December 31, 2025.

On January 6, 2023, the Company announced the grant of 2,050,000 performance stock options at a price of $0.216 to employees, officers and directors. These stock options vest upon receipt of cash for SFD^® services performed as per the following schedule.

Vesting Target	Vested
1/3 vest upon the collection of US$6.5 million	Yes
1/3 vest upon the collection of the next US$7.0 million	No
1/3 vest upon the collection of an additional US$7.5 million	No

Approximately 1,653,334 of these options are outstanding as of December 31, 2025, of which 473,333 are vested.

Stock-based compensation expense is calculated based on the fair value attributed to grants of stock options using the Black-Scholes valuation model and utilizing the following weighted average assumptions:

For the year ended		2025				2024				2023
Expected dividends paid per common share		Nil					-			Nil
Expected life in years			5.0				-				5.0
Weighted average expected volatility in the price of common shares			115	%			-				79	%
Weighted average risk-free interest rate			3.16	%			-				3.32	%
Weighted average fair market value per share at grant date			$0.23				$-				$0.22
Forfeiture rate			11.5	%			-				18.5	%

Deferred Stock Units:

A continuity of the number of DSUs which are outstanding at the end of the current year and as at the prior years ended December 31, 2024, and 2023 are as follows:

		For the years ended December 31,
Opening balance		2025				2024				2023
Opening balance			120,226				37,354				37,354
Granted			404,927				82,872				-
Closing balance			525,153				120,226				37,354

The DSUs plan is a long-term incentive plan that permits the grant of DSUs to qualified directors. DSUs granted under the DSUs plan are to be settled at the retirement, resignation or death of the Board member holding the DSUs.

Restricted Stock Units:

RSUs entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company’s common shares upon vesting of such units or a cash payment equal to the value of the underlying shares. The RSUs vest at a rate of one-third at the end of each of the first three years following the date of grant. Historically, the Company settled the RSUs that vested with shares and cash.

A continuity of the number of RSUs, including fair value (“FV”) which are outstanding at the end of the current year and as the end of the prior years ended December 31, 2024 and 2023 are as follows:

		For the years ended December 31,
		2025		2024
		# of RSUs	FV/Unit	# of RSUs	FV/Unit
RSUs outstanding, start of the year		915,000	$0.16	-	-
Granted		1,875,000	$0.20	1,035,000	$0.14
Common shares issued		(194,206)	($0.20)	-	-
Payroll withholdings settled in cash		(110,796)	($0.20)	-	-
Forfeited		-	-	(120,000)	($0.14)
RSUs outstanding, end of the year		2,484,998	$0.35	915,000	$0.16

		For the year ended December 31,
		2023
		# of RSUs				FV/Unit
RSUs outstanding, start of the year			348,334				$0.21
Granted			-				-
Common shares issued			(256,619	)			$(0.26	)
Payroll withholdings settled in cash			(91,715	)			$(0.23	)
RSUs outstanding, end of the year			-				-

Employee Share Purchase Plan:

The ESP Plan allows employees and other individuals determined by the Board to be eligible to contribute a minimum of 1% and a maximum of 10% of their earnings to the plan for the purchase of common shares in the capital of the Company, of which the Company will make an equal contribution. Common shares contributed by the Company may be issued from treasury or acquired through the facilities of the TSX. Historically, the Company has elected to issue common shares from treasury.

A continuity of the number of commons shares under the ESP Plan which are outstanding at the end of the current year and as at the prior years ended December 31, 2024, and 2023 are as follows:

		2025								2024
		# of shares				$ amount				# of shares				$ amount
Purchased by employees			132,904			$	43,495				234,974			$	41,620
Matched by the Company			132,904				43,494				234,973				41,619
Total Common Shares issued			265,808				86,989				469,947				83,239

		For the year ended December 31,
		2023
		# of shares				$ amount
Purchased by employees			168,515			$	36,246
Matched by the Company			140,994				30,509
Total Common Shares issued			309,509				66,755