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TERM LOAN | 6 Months Ended
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Jun. 30, 2025
Debt Disclosure [Abstract] |
TERM LOAN | 8. TERM LOAN The Company had a three-year term loan (the “Term Loan”) with Cymbria Corporation (“Cymbria”), the lender and an affiliate of the Company’s largest shareholder, EdgePoint Investment Group Inc. (“EdgePoint”), in the amount of $20,882,353 which bore interest at a rate of 10% per annum and was to mature on June 28, 2026. On March 18, 2025, the Company closed a financing transaction (the “March 2025 Financing”) which included a non-brokered private placement (Note 10(a)) and the conversion of the Term Loan to equity (the “Debt Conversion”). The Company issued to Cymbria an aggregate of 3,480,392 units (each, a “Settlement Unit”) at a deemed issue price of $6.00 per Settlement Unit in full satisfaction of the $20,882,353 principal amount outstanding under the Term Loan. Accrued interest under the Term Loan, up to the date of the Debt Conversion, in the amount of $268,896, was settled in cash. Each Settlement Unit consisted of one Common Share of the Company and one Common Share purchase warrant (each, a “Settlement Warrant”) of the Company. Each Settlement Warrant entitles the holder to acquire one additional Common Share of the Company at a price of $8.00 per Common Share until March 18, 2028. If, at any time prior to the expiry date, the volume-weighted average trading price of the Common Shares is at least $40.00 per Common Share for a period of 20 trading days, the Company may, at its option, accelerate the expiry date with 30 days’ notice to the Settlement Warrant holders. The fair value of the Common Shares issued as part of the Settlement Units was estimated at $17,727,018 and was determined by applying an implied discount for lack of marketability to the market observed price on the date of issuance. The fair value of the Settlement Warrants was estimated at $7,398,104 using a Monte Carlo model. The $5,982,434 difference between the fair value of the Settlement Units issued of $25,125,122 and the carrying amount of the Term Loan of $19,142,687 was recognized as a loss in the current period. Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the three and six months ended June 30, 2025 and 2024 (Expressed in Canadian dollars) The Monte Carlo model used to value the Settlement Warrants was based on the following assumptions: SCHEDULE OF FAIR VALUE OF SETTLEMENT WARRANTS
|  | Settlement Warrants |
Expected dividend yield |  |  | 0 | %
Share price |  | $ | 5.00 |
Expected share price volatility |  |  | 81.8 | %
Risk free interest rate |  |  | 2.57 | %
Expected life of warrant |  |  | 3 years |
The volatility was determined by calculating the historical volatility of the Company’s share price over a 3-year period using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns. The same implied discount for lack of marketability for purposes of the Common Shares valuation was also applied to the share price for the Settlement Warrants valuation. In connection with the March 2025 Financing, the Company issued: (i) 200,000 Common Shares to TriView Capital Ltd. (“TriView”) for its services as finder; (ii) 450,000 Common Shares to Fiore Management and Advisory Corp. (“Fiore”) and 187,500 Common Shares to Bowering Projects Ltd. (“Bowering”) for certain advisory services; and (iii) 179,335 Common Shares to a financial advisor for financial advisory services. The fair value of these shares was determined to be $5,179,586. In addition to the Common Shares, the Company incurred various legal, listing and financing fees payable in cash totalling $2,371,203. Certain of these fees were allocated between the non-brokered private placement (Note 10(a)) and Debt Conversion transactions based on the value of the units issued under each transaction. All securities issued as part of the Debt Conversion are subject to a hold period which expired July 19, 2025, with the exception of the Common Shares issued to Fiore and Bowering which have a hold period expiring March 19, 2026. The following is a continuity of the Term Loan: SCHEDULE OF CONTINUITY OF TERM LOAN
|  | $ |
Term Loan balance, December 31, 2023 |  |  | 17,956,423 |
Accrued interest |  |  | 2,082,530 |
Accretion of warrant value and transaction costs |  |  | 1,026,789 |
Interest paid |  |  | (2,082,530 | )
Term Loan balance, December 31, 2024 |  |  | 18,983,212 |
Accrued interest |  |  | 268,896 |
Accretion of warrant value and transaction costs |  |  | 159,475 |
Interest paid |  |  | (268,896 | )
Debt Conversion |  |  | (19,142,687 | )
Term Loan balance, June 30, 2025 |  |  | - |

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