16.Warrant Liability

In February 2021, the Company issued 16,930,530 warrants to purchase 8,465,265 common shares at $1.35 per common share for a term of three years.  All the warrants were exercised on or before their expiration.  See note 19.

In February 2023, the Company issued 39,100,000 warrants to purchase 19,550,000 common shares at $1.50 per common share for a term of three years. As of December 31, 2025, 38,273,500 warrants to purchase 19,136,750 common shares were outstanding.

As discussed in note 2, the Company’s functional currency is the Canadian dollar and because the warrants are priced in U.S. dollars, a derivative financial liability was created (the “Warrant Liability”).  The Warrant Liability is recorded at fair value on the Company’s consolidated balance sheets and mark-to-market adjustments in fair value are recorded in earnings. Using Level 2 inputs of the fair value hierarchy under US GAAP, the liability created is measured and recorded at fair value, using the Black-Scholes model described below as there is no active market for the warrants.

Activity with respect to the warrant liabilities is presented in the following table:

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The fair value of the warrant liabilities on December 31, 2025 and 2024, was determined using the Black-Scholes model with the following assumptions:

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