The Company adopted a long-term incentive plan on December 2, 2021 (the “Plan”) whereby it can grant stock options, restricted share units (“RSUs”), Deferred Share Units (“DSUs”), and Performance Share Units (“PSUs”) to directors, officers, employees, and consultants of the Company.

Stock options generally vest in equal tranches over three years. The grant date fair value is determined using the Black-Scholes Option Pricing Model and this value is recognized as an expense over the vesting period. DSUs vest immediately but cannot be exercised until the holder ceases to be a Director or Officer of Electra. DSUs are valued based on the market price of the Company’s common shares on the grant date, with the full value expensed immediately. PSUs generally vest over an 18–24-month period if certain performance metrics have been achieved. They are valued based on the market price of the Company’s shares on the grant date and this value is expensed over the vesting period. RSUs generally vest over a 24–36-month period. They are valued based on the market price of the Company’s shares on the grant date and this value is expensed over the vesting period.

The maximum number of shares that may be reserved for issuance under the Plan is limited to 2,333,333 shares.

During the year ended December 31, 2021:

●

The Company granted 51,389 stock options to new employees under its long-term incentive plan. The options may be exercised within 5 years from the date of the grant at a price range of $6.21 to $7.29 per share. The fair value of the options at the date of the grant was $164 using the Black-Scholes Option Pricing Model, assuming a risk-free rate of 0.20% to 0.92% per year, an expected life of 2.5 years, an expected volatility in the range of 69.72% to 83.57%, no expected dividends and a share price range of $6.12 to $7.83.

Incentive stock options outstanding and exercisable (vested) at December 31, 2022 are summarized as follows:


		Options Outstanding				Options Exercisable

			Weighted	Weighted
		Number of	Average	Average		Number of	Weighted
		Shares Issuable	Remaining Life	Exercise		Shares Issuable	Average
Exercise Price		on Exercise	(Years)	Price		on Exercise	Exercise Price
$	2.52	174,259	1.68	$	2.52	143,704	$	1.68
	2.61	27,778	2.66		2.61	27,778		2.66
	2.88	16,667	1.75		2.88	16,667		1.75
	3.21	130,000	4.87		3.21	—		4.87
	3.24	55,556	1.14		3.24	55,556		1.14
	4.38	30,000	4.48		4.38	—		4.48
	4.63	19,444	4.40		4.63	—		4.40
	4.90	40,000	4.44		4.90	—		4.44
	5.40	190,016	4.05		5.40	—		4.05
	5.76	19,444	4.25		5.76	—		4.25
	6.21	31,944	3.29		6.21	10,648		3.29
	6.48	116,667	2.74		6.48	116,667		2.74
	7.29	5,556	2.13		7.29	2,778		2.13
	8.82	109,630	0.48		8.82	109,630		0.48
	9.32	25,000	0.08		9.32	25,000		0.08

		991,960	2.86	$	4.95	508,426	$	1.62

During the year ended December 31, 2022, the Company has expensed $505 (December 31, 2021 - $212) for options valued at share prices $2.52 to $9.32, as shared-based payment expense.

(b)DSUs, RSUs and PSUs

Restricted Share Units

The Company’s RSU plan transactions during the years ended December 31, 2022 and 2021 were as follows:


Number of Units	2022	2021
Balance, January 1	63,711	72,222
Granted	50,890	16,025
Exercised	(29,108)	(23,147)
Expired	(7,204)	(1,389)
Balance, December 31	78,289	63,711

Performance Share Units

The Company’s PSU plan transactions during the years ended December 31, 2022 and 2021 were as follows:


Number of Units	2022	2021
Balance, January 1	87,500	—
Granted	18,057	87,500
Exercised	(28,474)	—
Expired	(13,194)	—
Balance, December 31	63,889	87,500

Deferred Shares Units

The Company’s DSU plan transactions during the years ended December 31, 2022 and 2021 were as follows:


Number of Units	2022	2021
Balance, January 1	176,331	173,361
Granted	71,474	15,817
Exercised	(12,493)	(12,847)
Balance, December 31	235,312	176,331

During the year ended December 31, 2022, the Company has expensed $189 (December 31, 2021 - $103) for DSUs, $291 (December 31, 2021 - $285) for PSUs, and $297 (December 31, 2021 - $131) for RSUs as shared-based payment expense.

Warrants

Details regarding warrants issued and outstanding are summarized as follows:


Canadian denominated warrants
	Weighted
	average		Number of shares issued
	exercise price		or issuable on exercise
Balance - December 31, 2020	$	3.96	1,885,195
Issuance of warrants	$	9.00	875,917
Issuance of warrants	$	5.58	105,110
Exercised warrants	$	4.86	(308,230)
Exercised warrants	$	3.78	(818,971)
Exercised warrants	$	3.78	(442,014)
Warrant expiries	$	1.08	(11,111)
Warrant expiries	$	4.86	(11,111)
Balance - December 31, 2021	$	7.53	1,274,785
Exercised warrants	$	3.78	(210,545)
Expired warrants	$	3.78	(83,213)
Balance - December 31, 2022	$	8.66	981,027

United States Dollar denominated warrants


	Weighted
	average		Number of shares issued or
	exercise price		issuable on exercise
Balance – December 31, 2021	$	0.00	—
Issuance of warrants	US$	3.10	2,483,150
Balance - December 31, 2022			2,483,150
Total warrants
Balance - December 31, 2021			1,274,785
Balance - December 31, 2022			3,464,177

The expiry of warrants are as follows:


			Number of warrants		Weighted Average
Grant Date	Expiry Date		outstanding		Exercise Price

January 22, 2021		January 22, 2023		875,917	$	9.00
January 22, 2021		January 22, 2023		105,110		5.58
United States Dollar denominated warrants
November 15, 2022		November 15, 2025		2,483,150	US$	3.10
				3,464,177	$	8.63 – US$3.10

During the year ended December 31, 2022, 210,545 warrants of the Company were exercised for gross proceeds of $807. The Company issued a total of 2,483,150 share purchase warrants in conjunction with its November 2022 best-efforts, overnight-marketed offering. During the year ended December 31, 2022, a total of 83,213 warrants expired.

On November 15, 2022, 2,345,000 warrants were issued to subscribers in the Company’s best-efforts, overnight-marketed offering. As Warrants issued are denominated in foreign currency that is different from the Company’s functional currency, the warrants are determined to be financial derivative liabilities and the total fair value of US$2,087 was recorded as such. The fair value of the warrants was estimated using the Monte Carlo Simulation Model assuming a risk-free interest rate of 4.172%, an expected volatility of 62.89%, share price of US$2.35, strike price of US$3.10.

As part of the November 15, 2022 Offering, 138,150 Broker Warrants Units (consisting of one common share and one warrant) were issued as transaction costs. The Broker Warrants are equity-settled and was issued for services received; hence the Company has recorded US$325 in reserve, which was measured at fair value of services received.

During the year ended December 31, 2021, 1,569,215 warrants of the Company were exercised for gross proceeds of $6,217. The Company issued a total of 981,027 share purchase warrants in conjunction with its January 2021 bought deal financing. During the year ended December 31, 2021, a total of 22,222 warrants expired.

On January 22, 2021, 875,917 warrants were issued to subscribers in the Company’s bought deal financing. 105,110 warrants were issued as broker warrants associated with the bought deal financing. The total fair value of $1,667 was recorded in reserves. The fair value of the warrants was estimated using the Black-Scholes Option Pricing Model assuming a risk-free interest rate of 0.17%, an expected life of 2 years, an expected volatility of 77.10%, no expected dividends, and a share price of $0.315.