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Dilution through outstanding common share options and warrants could adversely affect the trading price of
our common shares.
Because our success is highly dependent upon our employees and consultants, we have granted to some or
all of our key employees, directors and consultants options to purchase common shares as non-cash incentives. To
the extent that significant numbers of such options may be granted and exercised, the interests of the other
shareholders may be diluted. We also issued warrants to purchase up to 4,349,481 common shares in September
2013 and April 2015. As of December 31, 2015, there were 4,578,700 common share purchase options outstanding,
which, if exercised, would result in an additional 4,578,700 common shares being issued and outstanding, which
equals approximately 8.6% of our common shares outstanding as of December 31, 2015.
Future sales of our securities in the public or private markets could adversely affect the trading price of our
common shares or our ability to continue to raise funds in new equity offerings.
It is likely that we will sell common shares, or securities exercisable or convertible into common shares, in
order to finance our planned development activities. Future sales of substantial amounts of our securities in the
public or private markets would dilute our existing shareholders and potentially adversely affect the trading prices of
our common shares or could impair our ability to raise capital through future offerings of securities. Alternatively,
we may rely on debt financing and assume debt obligations that require us to make substantial interest and principal
payments that could adversely affect our business or future growth potential.
Price volatility of our publicly traded securities could adversely affect investors’ portfolios.
In recent years and months, the securities markets in the United States and Canada have experienced high
levels of price and volume volatility, and the market prices of securities of many companies have experienced wide
fluctuations that have not necessarily been related to the operating performance, underlying asset values or prospects
of such companies. There can be no assurance that continual fluctuations in the market price of our common shares
will not occur. It may be anticipated that any quoted market for the common shares will be subject to market trends
and conditions generally, notwithstanding any potential success we have in creating revenues, cash flows or
earnings. The price of our common shares has been subject to price and volume volatility in the past and will likely
continue to be subject to such volatility in the future.
Our transition to the OTCQB marketplace from the NYSE MKT may impact our trading volume and
liquidity, lower prices of our common shares and make it more difficult for us to raise capital.
Our common shares were listed on the NYSE MKT as of December 31, 2015; however, due to our low
stock price, the desire to reduce costs and other factors, we voluntarily delisted from the NYSE MKT. Since
February 29, 2016, our common shares have been trading on the OTCQB marketplace. If an adequate trading
market for our common shares does not develop on the OTCQB marketplace, shareholders’ ability to buy and sell
our common shares could be materially impaired, which could have an adverse effect on the market price of, and the
efficiency of the trading market for, our common shares. In addition, the recent delisting of our common shares
from both the NYSE MKT and the TSX could significantly impair our ability to raise capital.
Because our common shares are not listed on a national securities exchange, a broker-dealer may find it more
difficult to trade our common shares, and an investor may find it more difficult to acquire or dispose of our
common shares in the secondary market.
We are now subject to the so-called “penny stock” rules. The SEC has adopted regulations that define a
“penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain
exceptions, such as any securities listed on a national securities exchange. For any transaction involving a “penny
stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain
exceptions. A broker-dealer may find it more difficult to trade, and an investor may find it more difficult to acquire
or dispose of, our common shares on the OTCQB marketplace. These factors could significantly negatively affect
the market price of our common shares and our ability to raise capital.