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Stock Options
 3 Months Ended
Mar. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock Options

18. Stock Options

 

Under the Company’s 2015 Equity Incentive Plan the number of common shares reserved for issuance under the option plan shall not exceed 10% of the issued and outstanding common shares of the Company, have a maximum term of 10 years and vest at the discretion of the Board of Directors.

 

 

Worksport Ltd.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

 

18. Stock Options (continued)

 

All equity-settled share-based payments are ultimately recognized as an expense in the statement of operations and comprehensive loss with a corresponding credit to “Additional Paid in Capital.” If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense recognized in prior periods if share options ultimately exercised are different to that estimated on vesting.

 

On December 29, 2021 the Company granted 400,000 and 300,000 performance stock units (“PSU”) to the Company’s Chief Executive Officer and a director, respectively. The PSU will vest in 5% increments according to a schedule that correlates with the Company’s stock price. The first 5% of the PSUs vest upon the Company’s stock price closing at $3.00. 50% will have vested at a closing price of $16.50 and 100% will have vested at a closing price of $31.50. the fair value of the PSU was estimated to be $2,308,012, which will be expensed as stock-based compensation over a five year period. As of March 31, 2022, no PSUs have been vested and the Company recognized $115,400 (2021 - $0) to stock-based compensation expense. It is uncertain whether any of these grants will vest as of the date of this report.

 

On August 6, 2021, the Company granted 140,000 options to directors, advisors and officers with an exercise price of $5.50 and an expiry date of August 6, 2026. The stock options vested on January 1, 2022. The fair value of the options on grant date was estimated to be $754,189. The Company recognized $5,096 (2021 - $0) to consulting expense during the three months ended March 31, 2022.

 

On July 23, 2021, the Company granted 15,000 options to a director with an exercise price of $5.50 and an expiry date of July 23, 2026. The stock options vested on January 1, 2022. The fair value of the options on grant date was estimated to be $129,480. The Company recognized $799 (2021 - $0) to consulting expense during the three months ended March 31, 2022.

 

On September 1, 2021, the Company granted 400,000 options to a consultant with an exercise price of $5.32 and an expiry date of September 1, 2026. The options have a vesting period of 6 months from the initial grant date; 100,000 vested on March 1, 2022, 100,000 shall vest on September 1, 2022, 100,000 shall vest on March 1, 2023 and 100,000 shall vest on September 1, 2023. The fair value of the options on grant date was estimated to be $2,112,000. The Company recognized $264,787 (2021 - $0) to consulting expense during the three months ended March 31, 2022.

 

On October 7 and November 2, 2021, the Company granted 5,000 and 62,500 options respectively, to advisors with an exercise price of $5.50 and $5.24. The options will expire on October 7, 2026 and November 2, 2026 respectively. The stock options vested on January 1, 2022. The fair value of the options on grant date was estimated to be $326,498. The Company recognized $5,294 (2021 - $0) to consulting expense during the three months ended March 31, 2022.

 

On December 29, 2021, the Company granted in aggregate of 90,000 options to members of the board with an exercise price of $2.51. The options will expire on December 29, 2026. The options have a vesting period of 1 year from the initial grant date; 10,000 shall vest on December 29, 2022, 10,000 shall vest on December 29, 2023 and 10,000 shall vest on December 29, 2024. The fair value of the options on grant date was estimated to be $224,280. The Company recognized $18,844 (2021 - $0) to consulting expense during the three months ended March 31, 2022.

 

On February 7, 2022, the Company granted 10,000 options to an advisor with an exercise price of $2.19. The options will expire on February 7, 2027. The options vested immediately upon issuance. The fair value of the options on grant date was estimated to be $21,780. The Company recognized $21,780 to consulting expense during the three months ended March 31, 2022.

 

   March 31, 2022   December 31, 2021 
   Number of stock options   Weighted average price   Number of stock options   Weighted average price 
Balance, beginning of year   712,500   $5.00    -   $- 
Granted   10,000   $2.19    712,500   $5.00 
Balance, end of period   722,500   $4.93    712,500   $5.00 

 

 

   Range of Exercise prices   Outstanding   Weighted average life (years)   Weighted average exercise price   Exercisable on March 31, 2022 
Stock options  $ 2.19 - 5.50    722,500    4.40   $4.93    332,500 

 

 

Worksport Ltd.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)