14.     Shareholders' Equity

Authorized Share Capital

The authorized share capital of the Company is comprised of an unlimited number of common shares without par value and an unlimited number of compressed shares without par value.

The holders of the common shares shall be entitled to receive notice of and to vote at every meeting of the shareholders of the Company and shall have one vote for each common share so held. Holders of common shares are entitled to receive as and when declared by the directors of the Company, dividends in cash or property of the Company.

LP Units of JJ LP

The limited partnership units (“LP Units”) of JJ LP, a subsidiary of the Company, are exchangeable for one common share at any time per request of the owner of the LP Units and are not saleable or transferable without the Company’s authorization. During the years ended December 31, 2023 and 2022, there were no LP Units of JJ LP converted to common shares. As of December 31, 2023 and 2022, 43,821,379 LP Units of JJ LP were issued and outstanding, respectively.

Warrants

In connection with the issuance of the 2019 Senior Notes, the Company issued 1,800 common share purchase warrants (the “Financing Warrants”) to the subscribers for each $1 principal amount of 2019 Senior Notes subscribed, for a total aggregate of approximately 64,449,020 Financing Warrants. Each Financing Warrant is exercisable for one common share at a price ranging from C$0.33 to C$0.39 per common share for a period of 36 months from the applicable closing date. Each whole Financing Warrant entitles the holder to purchase one common share. The Financing Warrants are not subject to vesting conditions. The Financing Warrants are classified as derivative instruments liabilities and reported at fair value with changes in fair value charged or credited to earnings in the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2022, all Financing Warrants valued at market had expired and there was no warrant liability as of December 31, 2022.

On November 22, 2019, the Company granted 9,045,691 common share purchase warrants in connection with the separation of several founders (the “Founders Separation Warrants”). Each Founders Separation Warrant is exercisable for one common share at C$1.05 and all Founders Separation Warrants expire on September 30, 2024.

During 2019 and 2020, the Company issued 1,250,000 warrants to consultants (the “Consultant Warrants”). Each Consultant Warrant is exercisable for one common share. As of December 31, 2022, there were 500,000 warrants available for exercise at a price of C$0.33, which expired on January 28, 2023.

During the year ended December 31, 2022, 63,609,520 of the Financing Warrants and 750,000 Consultant Warrants expired.

In connection with the NPA Amendment, the Company issued Debt Modification Warrants to purchase 2,421.05 common shares of the Company for every one thousand dollar principal amount of the 2023 Refinanced Notes held by each Holder, for a total aggregate of 91,999,901 Debt Modification Warrants, all of which were classified as equity at the time of issuance and were recorded at a fair value of $5,106. Each Debt Modification Warrant is exercisable at any time prior to its expiration for one common share of the Company at an exercise price of $0.07084 per common share. The Debt Modification Warrants expire on February 15, 2030 and contain customary anti-dilution adjustment provisions.

The fair value of the Debt Modification Warrants upon issuance was determined using the Black-Scholes option pricing model with the following assumptions:

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The following table summarizes the warrants that remain outstanding as of December 31, 2023:

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A rollforward of warrant activity is as follows:

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Share-based Compensation

Under the Amended and Restated 2018 Stock and Incentive Plan (the “2018 Plan”), the Company has reserved 60,000,000 common shares to be issued as awards to employees, management, directors and consultants of the Company (“Eligible Persons”), as designated by the Company’s board of directors (the “Board”) or the compensation committee of the Board (the “Compensation Committee”). “Award” is defined in the 2018 Plan to include options, stock appreciation rights, restricted stocks, restricted stock units, performance stock units, dividend equivalents and stock-based awards. As of December 31, 2023, 31,051,783 common shares are available for issuance under the 2018 Plan.

Restricted Stock Units (“RSUs”)

RSUs are issued to Eligible Persons and vest on a date determined by the Compensation Committee when the shares are awarded. The award recipient must be providing a service as an employee or member of the Board of the Company on the vesting date in order for the shares to vest. Share-based compensation expense related to RSUs is recognized ratably between the grant date and the vest date, with vest dates varying by award. Upon vesting of the RSUs on each vesting date, the Company issues common shares in accordance with the vesting terms.

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A summary of the status of the RSUs outstanding is as follows:

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During the years ended December 31, 2023 and 2022, the Company recorded $295 and $1,539 of total net share-based compensation expense relating to RSUs, respectively.

On June 12, 2023, the Company approved the grant of 2,468,301 RSUs to the audit committee chair of the Board, and 7,404,903 RSUs to three new members of the Board. These RSUs were issued at a weighted average grant date fair value of $0.03, and share-based compensation expense of $241 was recognized related to these RSUs during the year ended December 31, 2023.

During April 2023, the Company’s former Chief Executive Officer (“CEO”), Gary F. Santo, Jr. forfeited various share awards, including RSUs. The forfeiture of RSUs resulted in a share-based compensation benefit of $22 for the three months ended June 30, 2023. There was no share-based compensation expense recognized related to these RSUs during the six months ended December 31, 2023. The net share-based compensation benefit relating to RSUs held by the former CEO was $4 for the year ended December 31, 2023.

During the three months ended June 30, 2023, the Company determined achievement of the milestones related to projects of its joint venture in CGSF was no longer probable. As a result, the Company reversed all share-based compensation expense recognized for the performance awards and recorded share-based compensation benefit of $1,234 for the six months ended June 30, 2023. No share-based compensation benefit or expense was recognized related to this event during the six months ended December 31, 2023.

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During August 2023, the Company granted 3,196,678 RSUs and issued 538,425 shares to certain employees in connection with their employment with the Company. Of these RSUs, 143,525 vested on September 1, 2023 and 443,537 vested on December 1, 2023. The remaining RSUs are scheduled to vest annually, with vesting dates spread across quarters through December 1, 2026. These RSUs were issued at a weighted-average grant date fair value of $0.0294, and share-based compensation expense of $50 was recognized related to these RSUs during the year ended December 31, 2023.

As of December 31, 2023, there was $128 of remaining RSU expense to be recognized over the weighted average remaining period of 1.02 years.

During the year ended December 31, 2022, the Company recorded $1,539 of share-based compensation expense relating to RSUs. For year ended December 31, 2022, the share-based compensation expense relating to RSUs included $862 related to the performance awards for achievement of milestones relating to the projects of the Company’s joint venture in CGSF.

Share Options

In accordance with its 2018 Plan, the Company granted employees and consultants share options totaling 17,837,463 at an exercise price ranging from CAD $0.39-$0.65. In accordance with the 2018 Plan, the vesting period for employees was 15% as of the date of issuance, 25% vested on December 31, 2020, and 60% vested on December 31, 2021.

For founding members of the board of directors, the options granted were fully vested on the date of grant. For non-founding members of the board of directors, 50% of the options were vested on December 31, 2020, and 50% were vested on December 31, 2021.

The weighted average grant date fair value of share options outstanding as of December 31, 2023 was $0.50, and the options had no intrinsic value. As of December 31, 2023, 7,595,131 share options were vested and exercisable and 957,030 share options were unvested, with vesting dates ranging from June 2024 to December 2025. Share-based compensation expense related to the share options is recognized ratably between the grant date and the vest date, with vest dates varying by award.

A summary of the status of the share options outstanding is as follows:

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For the years ended December 31, 2023 and 2022, the Company recorded $56 and $136, respectively, of share-based compensation expense related to these options. As of December 31, 2023, there was $48 of remaining expense to be recognized over the weighted average remaining period of 0.92 years.

The following table summarizes the share options that remain outstanding as of December 31, 2023:

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Performance Stock Units (“PSUs”)

PSUs are issued to Eligible Persons and vest based on the achievement of one or more performance goals within a determined performance period, both of which are established by the Compensation Committee. The vesting of these units is tied to the Company’s share price; if the target share price is not achieved, the PSUs do not vest and expire on the last day of the performance period. Share-based compensation expense related to PSUs is recognized ratably between the grant date and the vest date, with vest dates varying by award. Upon vesting of the PSUs on each vesting date, depending on the achievement of the target stock price, the Company issues common shares in accordance with the vesting terms.

On June 18, 2021, the Company awarded 1,400,000 PSUs to a former Chief Executive Officer Mark Scatterday, in connection with the creation of intellectual property. The vesting of these PSUs is contingent upon subsequent sales of a product by Jupiter. On March 31, 2022, 700,000 of these units vested, and the remaining 700,000 are unvested with an expiration date in June 2031.

During April 2023, the Company’s former CEO, Gary F. Santo, Jr. forfeited various share or share-based awards, including PSUs. The forfeiture of PSUs resulted in share-based compensation benefit of $944 and $812 for the three and six months ended June 30, 2023, respectively. No additional expense or benefit was recognized related to this forfeiture during the six months ended December 31, 2023.

On September 26, 2023, the Company entered into an employment agreement with Tim Conder, pursuant to which Tim Conder serves as permanent CEO of the Company. Under the terms of the employment agreement, Mr. Conder is entitled to receive an equity grant of 2,000,000 PSUs under the 2018 Plan. Of this amount, 1,000,000 will vest upon Board’s approval of whether metrics set forth in the employment agreement have been achieved as of December 31, 2023, and the remaining 1,000,000 will vest upon Board’s approval of whether metrics set forth in the employment agreement have been achieved as of June 30, 2024. The vesting of these PSUs is dependent on Mr. Conder’s continued employment by the Company and certain non-market conditions applicable to the vesting periods.

A summary of the status of the PSUs outstanding is as follows:

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During the years ended December 31, 2023 and 2022, the Company recorded $782 of share-based compensation benefit and $1,652 of share-based compensation expense relating to PSUs, respectively. As of December 31, 2023, there was $175 of remaining expense to be recognized over the weighted average remaining period of 1.18 years.

A summary of the PSU awards granted containing market conditions as of December 31, 2023 is as follows:

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