Newtopia Inc. — Interim / Quarterly Report 2021

May 20, 2021

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Condensed Interim Financial Statements of

NEWTOPIA INC.

For the Three Months Ended March 31, 2021 and 2020 (Unaudited)

(Expressed in Canadian Dollars)

NEWTOPIA INC.

Condensed interim financial statements (Unaudited) Three months ended March 31, 2021 and 2020

Table of Contents
	Page
Condensed Interim Statements of Financial Position		1
Condensed Interim Statements of Loss and Comprehensive Loss		2
Condensed Interim Statements of Changes in Equity		3
Condensed Interim Statements of Cash Flows		4
Notes to the Condensed Interim Financial Statements	5	- 13

NEWTOPIA INC.

Condensed Interim Statements of Financial Position (Unaudited) As at March 31, 2021 and December 31, 2020

(Expressed in Canadian Dollars)

As at March 31, 2021 and December 31, 2020 (Expressed in Canadian Dollars)
		March 31,	December 31,
	Note	2021	2020
		$	$
Assets
Current assets
Cash		2,628,575	4,673,683
Trade and other receivables	3	1,093,674	1,067,123
Unbilled revenue		59,000	426,000
Prepaid expenses and deposits		594,656	465,285
Inventories		277,559	278,696
Deferred costs	4	204,163	232,089
		4,857,627	7,142,876
Property and equipment		111,941	129,913
Right-of-use asset		508,110	554,305
Intangible asset		540,441	68,948
		6,018,119	7,896,042
Liabilities
Current liabilities
Trade and other payables		2,646,488	2,765,583
Lease obligations		227,998	215,532
Derivative liability	7(c)	2,989	47,508
		2,877,475	3,028,623
Non-current lease obligations		596,565	667,558
		3,474,040	3,696,181
Equity
Common shares	7(b)	45,177,120	44,648,952
Common shares to be issued	11	-	528,168
Contributed surplus	8	10,667,327	10,046,621
Deficit		(53,300,368)	(51,023,880)
		2,544,079	4,199,861
		6,018,119	7,896,042

Nature of business 1

Signed on behalf of the Board:

"Jeffrey Ruby"

"Karen Basian"

Director

Director

The accompanying notes form an integral part of and should be read in conjunction with these unaudited condensed interim financial statements.

Page 1

NEWTOPIA INC.

Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited) Three Months Ended March 31, 2021 and 2020

(Expressed in Canadian Dollars)

Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)
	Note	2021	2020
		$	$
Revenue		2,619,171	3,862,986
Cost of revenue	9	1,300,867	2,208,557
Gross profit		1,318,304	1,654,429
Operating expenses
Technology and development	9	730,007	776,666
Sales and marketing	9	976,482	728,482
General and administrative	9	1,215,719	934,567
Share-based compensation	10	549,820	134,432
		3,472,028	2,574,147
Other expenses (income)
Depreciation of property and equipment		17,972	21,554
Depreciation of right-of-use asset		46,195	46,192
Interest and accretion expense	5	-	233,542
Interest on lease obligations		31,268	37,849
Finance charges		5,136	-
Amortization of deferred finance charges	4	38,916	-
Foreign exchange loss (gain)		27,796	(203,111)
Change in value of convertible debenture derivative
liabilities	5	-	270,993
Change in value of derivative liability	7(c)	(44,519)	13,628
Loss on settlement of related party payable	11	-	167,716
		122,764	588,363
Net loss and comprehensive loss		(2,276,488)	(1,508,081)
Loss per share
Basic and diluted		(0.02)	(0.10)
Weighted average number of common shares outstanding
Basic and diluted		100,492,786	15,535,919

The accompanying notes form an integral part of and should be read in conjunction with these unaudited condensed interim financial statements.

Page 2

NEWTOPIA INC.

Condensed Interim Statements of Changes in Equity (Unaudited) Three Months Ended March 31, 2021 and 2020

(Expressed in Canadian Dollars)

		Common	Shares To	Preferred	Special	Contributed
	Note	Shares	Be Issued	Shares	Warrants	Surplus	Deficit	Total
		$	$	$	$	$	$	$
Balance, December 31, 2020		44,648,952	528,168	-	-	10,046,621	(51,023,880)	4,199,861
Net loss and comprehensive loss		-	-	-	-	-	(2,276,488)	(2,276,488)
Share-based compensation		-	-	-	-	549,820	-	549,820
Issuance of shares	11	528,168	(528,168)	-	-	-	-	-
Settlement of related party payable	11	-	-	-	-	70,886	-	70,886
Balance, March 31, 2021		45,177,120	-	-	-	10,667,327	(53,300,368)	2,544,079
Balance, December 31, 2019		4,643,945	-	13,011,033	9,164,731	5,172,192	(43,204,384)	(11,212,483)
Net loss and comprehensive loss		-	-	-	-	-	(1,508,081)	(1,508,081)
Share-based compensation		-	-	-	-	134,432	-	134,432
Settlement of related party payable	11	-	528,168	-	-	39,548	-	567,716
Balance, March 31, 2020		4,643,945	528,168	13,011,033	9,164,731	5,346,172	(44,712,465)	(12,018,416)

The accompanying notes form an integral part of and should be read in conjunction with these unaudited condensed interim financial statements.

Page 3

NEWTOPIA INC.

Condensed Interim Statements of Cash Flows Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

NEWTOPIA INC. Condensed Interim Statements of Cash Flows Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)
	Note	2021	2020
		$	$
Cash flows used in operating activities
Net loss and comprehensive loss		(2,276,488)	(1,508,081)
Depreciation of property and equipment		17,972	21,554
Depreciation of right-of-use asset		46,195	46,192
Amortization of deferred finance charges		38,916	-
Interest and accretion expense		-	233,542
Interest on lease obligations		31,268	37,849
Change in value of convertible debenture derivative
liabilities		-	270,993
Change in value of derivative liability		(44,519)	13,628
Stock-based compensation		549,820	134,432
Loss on settlement of related party payable		-	167,716
		(1,636,836)	(582,175)
Change in non-cash working capital
Trade and other receivables		(26,551)	(134,275)
Unbilled revenue		367,000	-
Prepaid expenses and deposits		(129,371)	124,017
Inventories		1,137	248,122
Trade and other payables		(48,209)	141,294
		(1,472,830)	(203,017)
Cash flows used in investing activities
Purchase of property and equipment		-	(11,842)
Intangible asset development costs		(471,493)	-
		(471,493)	(11,842)
Cash flows used in financing activities:
Credit facility financing costs	4	(10,990)	-
Repayment of lease obligations		(89,795)	(64,213)
		(100,785)	(64,213)
Net change in cash during the period		(2,045,108)	(279,072)
Cash, beginning of period		4,673,683	2,386,341
Cash, end of period		2,628,575	2,107,269
Supplemental cash flow information
Non-cash settlement of debt	11	70,886	400,000

The accompanying notes form an integral part of and should be read in conjunction with these unaudited condensed interim financial statements.

Page 4

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

1. Nature of business

Newtopia Inc. (“Newtopia” or the "Company") is a technology enabled habit change company that delivers disease prevention solutions by leveraging genetic testing, social and behavioral science to help individuals prevent chronic disease and reduce costs for health insurers. Newtopia was incorporated on May 9, 2008, pursuant to the provisions under the Business Corporations Act of Ontario, Canada. The Company’s corporate headquarters and registered head office are located at 4101 Yonge Street, Suite 706, Toronto, Ontario, M2P 1N6. On May 4, 2020, the Company commenced trading on the TSX Venture Exchange (the "TSX-V") under the symbol "NEWU".

On March 12, 2020, the World Health Organization declared the global outbreak of the COVID-19 virus as a pandemic. The outbreak has spread throughout Europe, the Middle East, Canada and the United States, causing companies and various international jurisdictions to impose restrictions, such as quarantines, closures, cancellations and travel restrictions. Although effective vaccines are currently being distributed worldwide, the emergence of new and more infectious variants of the virus could slow the relaxing of restrictions and the recovery of the global economy. While these effects are expected to be temporary, significant uncertainty still remains as to the potential impact on the Company's ability to access capital and on its results of operations and financial condition. To date, the Company's operations have remained stable as the pandemic continues to progress and evolve.

2. Significant accounting policies

(a) Statement of compliance

These condensed interim financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”), using International Accounting Standard (“IAS 34”), Interim Financial Reporting.

These unaudited condensed interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2020 and accompanying notes. The Company has followed the same basis of presentation, accounting policies and method of computation for these unaudited condensed interim financial statements as were disclosed in the audited financial statements for the year ended December 31, 2020.

The unaudited condensed interim financial statements were approved for issuance by the Board of Directors on May 19, 2021.

3. Trade and other receivables

Trade and other receivables as at March 31, 2021 and December 31, 2020 are comprised of the following:

	March 31,	December 31,
	2021	2020
	$	$
Trade receivables	1,043,648	955,705
Indirect taxes receivable	50,026	111,418
	1,093,674	1,067,123

4. Credit facility

On December 4, 2020, the Company closed an Operating Credit Line Agreement (the “Facility”) in the amount of $5,000,000. The Company may avail itself of the operating credit under the Facility by way of either Canadian dollars at prime lending rate plus 2.25% or United States dollars at the U.S. base lending rate plus 2.25%. The

Page 5

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

4. Credit facility (cont'd)

Facility matures on December 4, 2022 (the “Maturity Date”), is secured by all Newtopia property and is subject to certain covenants where the Company is required to meet minimum cash runway ratios. The Company intends to use the operating line facility to fund working capital requirements as needed.

In connection with the Facility, the Company was required to obtain a guarantee from Export Development Canada of 50% of the available Facility plus accrued and unpaid interest up to a maximum of 120 days (the "Guaranteed Amount"). The Company agreed to pay a guarantee fee of 2.35% of the Guaranteed Amount and guaranteed interest on outstanding amounts at the Lender’s Prime Rate minus 0.05%. The initial guarantee covers the period from October 14, 2020 to September 30, 2021 (the "Guarantee Period").

In accordance with the terms of the Facility, the Lender received 210,526 Warrants (the "Warrants") on December 4, 2020, with each Warrant entitling the Lender to acquire one common share at a price of $0.95 at any time within the earlier of the Maturity Date and December 4, 2025. The fair value of the Warrants was determined at $84,314 using the Black Scholes valuation model with the following assumptions: risk free interest rate of 0.27%, expected life of 5 years and expected volatility of 73.75%. The Company has classified the Warrants within equity with the value of the Warrants being treated as a transaction cost and deferred and amortized over the term of the Facility.

The Company has also incurred cash transaction costs of $138,805 in connection to the Facility. As the Facility can be drawn upon and then repaid by the Company repeatedly throughout the term, the transaction costs are in the nature of a facility fee and not specific to an amount borrowed. On this basis, the Company has deferred and amortized the transaction costs over the term of the Facility regardless of whether there have been any drawdowns by the Company. Guarantee fees paid to March 31, 2021 in the amount of $32,960 are treated similarly but amortized over the Guarantee Period. Amortization of the deferred transaction costs recorded in the statement of loss and comprehensive loss during the three months ended March 31, 2021 was $38,916 (March 31, 2020 - $NIL). As at March 31, 2021, the balance of unamortized deferred transaction costs was $204,163.

No amounts have been drawn down by the Company under the Facility. If amounts are drawn down under the Facility, the amounts drawn will be initially recognized at fair value and subsequently measured at amortized cost.

The Company was in compliance with all Facility covenants as at March 31, 2021.

5. Convertible debentures

On November 6, 2018, the Company closed a private placement offering (the "Offering") of 4,000 7% unsecured convertible debenture units (the "Debenture Units") at a price of $1,000 per unit for aggregate gross proceeds of $4,000,000. Each Debenture Unit consisted of one $1,000 principal amount of subordinated unsecured convertible debentures (the "Convertible Debentures") and such number of warrants (the "Unit Warrants") equal to 33% of the principal amount divided by the Unit Warrant exercise price. Each Unit Warrant entitles the holder to purchase one common share (the "Common Share") in the capital stock of the Company at the Unit Warrant exercise price for a period of 36 months to November 7, 2021. The Unit Warrant exercise price shall be determined upon a liquidity event ("Liquidity Event") involving the Company at the fair market value (the "Fair Market Value") of one Common Share on the date of such Liquidity Event. The Unit Warrants cannot be exercised prior to a Liquidity Event. The Liquidity Event is stated to mean the listing of the Company's Common Shares on a recognized exchange, the sale of all its outstanding shares or assets, or a merger involving the Company. The Convertible Debentures were to mature and be repaid on November 6, 2019 together with an additional fee equal to 3% of the principal amount. The conversion price (the "Conversion Price"), subject to adjustment in certain circumstances, shall be set upon a Liquidity Event at 70% of the deemed market price per share upon a Liquidity Event, after taking into account customary adjustments. All issued and outstanding Convertible Debentures including interest shall automatically be converted into fully paid Common Shares at the Conversion Price upon a Liquidity Event.

In October 2019, holders of $3,850,000 of the $4,000,000 Debenture Units consented to the extension of the maturity dates of their Debenture Units from November 6, 2019 to March 31, 2020 and as such the debentures were payable on this date. The extension of the maturity date of the Debenture Units resulted in the derecognition of the host debt at its amortized cost of $4,137,878 and the recognition at its fair value of

Page 6

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

5. Convertible debentures (cont'd)

$3,729,100.

On March 30, 2020, the Company obtained both the final receipt from the OSC for its Final Prospectus and the conditional approval to list from the TSX-V. The Common Shares from the automatic conversion of the Convertible Debentures were issued when the Company's shares commenced trading on May 4, 2020.

The following table is a summary of the accretion to amortized cost and conversion of the host contract:

	$
Residual value of liability component at issuance	1,951,530
Less: issuance costs	200,967
	1,750,563
Interest and accretion expense for the year ended December 31, 2018	399,230
Balance, December 31, 2018	2,149,793
Interest and accretion up to October 23, 2019	2,148,584
Repayment	(160,500)
Debt extinguishment	(4,137,878)
Recognition of new debt	3,729,100
Interest and accretion	264,659
Balance, December 31, 2019	3,993,758
Interest and accretion	233,542
Balance, March 31, 2020	4,227,300
Converted to Common Shares and Unit Warrants	(4,227,300)
Balance, December 31, 2020 and March 31, 2021	-

6. Retractable preferred shares

Retractable preferred shares were issued during the period from 2008 to 2014 and are comprised of Series 1 class A preferred shares, voting and participating by series, issuable in series with rights, privileges, restrictions and conditions as determined by the directors and officers of Newtopia at the time of issuance. In April 2019, holders of Series 1 class A preferred shares consented to the conversion of Series 1 class A preferred shares into common shares on a one for one basis. The conversion of 27,344,395 preferred shares to common shares occurred on May 4, 2020.

There were no retractable preferred shares issued during the three months ended March 31, 2021 and 2020.

The Company is authorized to issue an unlimited number of retractable preferred shares.

Page 7

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

7. Equity

(a) Authorized

Unlimited Series 2, class A preferred shares, voting and participating by series, issuable in series with rights, privileges, restrictions and conditions as determined by the directors and officers of Newtopia at the time of issuance. Series 2, class A preferred shares are convertible to common shares at a stated conversion ratio on the earlier of: (i) qualifying initial public offering; (ii) qualified merger or acquisition; and (iii) at majority consent of the Series 2, class A preferred shareholders. On liquidation, Series 2, class A preferred shareholders are entitled to receive whether in cash, securities or other property payment of the greater of the threshold price per share and the pro rata share of the proceeds to which each holder would be entitled to if they had converted to common shares, in preference to the common shareholders. In April 2019, holders of the Series 2 class A preferred shares approved the conversion of Series 2 class A preferred shares into common shares on a one for one basis. The conversion of the 4,430,285 preferred shares to common shares occurred on May 4, 2020.

• Unlimited Series 3, class A preferred shares, voting and participating by series, issuable in series with rights, privileges, restrictions and conditions as determined by the directors and officers of Newtopia at the time of issuance. Series 3, class A preferred shares are convertible to common shares at a stated conversion ratio on the earlier of: (i) qualifying initial public offering; (ii) qualified merger or acquisition; and (iii) at majority consent of the Series 3, class A preferred shareholders. On liquidation, Series 3, class A preferred shareholders are entitled to receive whether in cash, securities or other property payment of the greater of the threshold price per share and the pro rata share of the proceeds to which each holder would be entitled to if they had converted to common shares, in preference to the common shareholders. In April 2019, holders of the Series 3 class A preferred shares consented to the conversion of Series 3 class A preferred shares into common shares on a one for one basis. The conversion of 10,294,118 preferred shares to common shares occurred on May 4, 2020.

• Unlimited Series 4, class A preferred shares, voting and participating by series, issuable in series with rights, privileges, restrictions and conditions as determined by the directors and officers of Newtopia at the time of issuance. Series 4, class A preferred shares are convertible to common shares at a stated conversion ratio on the earlier of: (i) qualifying initial public offering; (ii) qualified merger or acquisition; and (iii) at majority consent of the Series 4, class A preferred shareholders. On liquidation, Series 4, class A preferred shareholders are entitled to receive whether in cash, securities or other property payment of 80% of the threshold price per share and the pro rata share of the proceeds to which each holder would be entitled to if they had converted to common shares, in preference to the common shareholders. In April 2019, holders of the Series 4 class A preferred shares consented to the conversion of Series 4 class A preferred shares into common shares on a one for one basis. The conversion of 9,191,175 preferred shares to common shares occurred on May 4, 2020.

Unlimited Common shares.

Page 8

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

7. Equity (cont'd)

(b) Common shares, issued and outstanding

	Number of
	Shares	Amount
		$
Balance, December 31, 2020	99,626,937	44,648,952
Shares issued on settlement of related party payable (Note 11)	865,849	528,168
Balance, March 31, 2021	100,492,786	45,177,120

(c) Series 2, class A preference shares

During the period from 2015 to 2016, the Company issued 4,430,285 units as part of a private placement at $0.68 per unit. Each unit comprised of one Series 2 class A preference share and one purchase warrant eligible to purchase one-fifth of a common share of the Company at $0.68 per common share (each whole warrant, a “Series 2 warrant”). The warrants are exercisable for a period of up to five years from the date of issuance.

Since the purchase warrants contain a cashless exercise feature and the number of common shares to be issued by the Company upon the exercise of the purchase warrants are not fixed, the purchase warrants do not meet the criteria for equity classification and have been classified as a derivative liability and deducted from the carrying value of the units. The residual value is allocated on a pro rata basis to the preferred shares and to the option to convert the preferred shares in to common shares.

During the year ended December 31, 2020, 14,705 of the Series 2 warrants were exercised and 588,234 had expired. At December 31, 2020, the derivative liability related to the remaining 282,003 outstanding Series 2 warrants was revalued at $47,508 using the Black-Scholes valuation model with the following inputs and assumptions: expected volatility – 53.70%, risk-free interest rate – 0.24%, expected dividend yield – 0%, and expected life – 0.4 years.

At March 31, 2021, the derivative liability related to the 282,003 outstanding Series 2 warrants was revalued at $2,989 based on the Black-Scholes valuation model using the following inputs and assumptions: expected volatility – 62.77%, risk-free interest rate – 0.21%, expected dividend yield – 0%, and expected life – 0.2 years.

		March 31,	December 31,
		2021	2020
		$	$
Series A2	warrants	2,989	47,508

Page 9

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

7. Equity (cont'd)

(d) Warrants

The following table is a summary of the activities of the Company’s warrants:

		Weighted
		average
	Number of	exercise
	warrants	price
		$
Balance, December 31, 2020 and March 31, 2021	17,401,772	0.89
Balance, December 31, 2019	3,840,093	0.57
Bonus Warrants issued in lieu of Bonus Shares_(i)_	2,000,000	0.0001
Balance, March 31, 2020	5,840,093	0.38

The following table is a summary of the warrants outstanding as at March 31, 2021:

	Exercise	Number of
Expiry date	Price	Warrants
	$
April 2021	0.68	176,011
May 2021	0.68	7,300
June 2021	0.68	98,692
August 2021	0.68	514,705
September 2021	0.68	1,112
November 2021	0.70	334,286
May 2022	0.70	633,450
September 2022	1.00	7,211,411
February 2025_(i)_	0.0001	2,000,000
October 2022	1.30	3,950,000
October 2022	0.95	763,526
May 2023	0.70	1,711,279
		17,401,772

(i) During the year ended December 31, 2018, the Company issued a series of 13% secured debentures (the "Debentures") for an aggregate amount of $2,600,000, to be drawn in tranches as determined between the Company and the lenders. On the Repayment Date, the lender is entitled to one common share in the capital of the company for each $1 advanced, to a maximum issuance of 2 million common shares (the "Bonus Shares"). The Debentures were fully settled by December 31, 2019.

On February 20, 2020, the lender of the Debentures agreed to accept 2 million warrants of the Company (the "Bonus Warrants") in lieu of the 2 million Bonus Shares. The Bonus Warrants are exercisable into common shares at an exercise price of $0.0001 per common share until February 20, 2025, provided that the holder of the Bonus Warrants, together with its affiliates, are prohibited from exercising Bonus Warrants in common shares, if, as a result of the conversion, the holder, together with its affiliates, would own more than 9.99% of the total number of common shares issued and outstanding immediately after giving effect to the exercise.

Page 10

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

8. Contributed surplus

	March 31,	December 31,
	2021	2020
	$	$
Stock options	5,954,188	5,333,482
Warrants	4,713,139	4,713,139
	10,667,327	10,046,621

9. Expenses by nature

Expenses by nature for the three months ended March 31, 2021 and 2020 consisted of the following:

	2021	2020
	$	$
Cost of sales
Employee costs	1,012,712	1,133,484
Welcome kits	288,155	1,075,073
	1,300,867	2,208,557
Technology and development
Employee costs	451,491	543,593
Information technology	204,057	231,377
Research and development	74,459	1,696
	730,007	776,666
Sales and marketing
Employee costs	598,418	586,161
Advertising and promotion	378,064	142,321
	976,482	728,482
General and administrative
Employee costs	536,718	311,427
Corporate expenses	465,296	342,632
Professional fees	213,705	280,508
	1,215,719	934,567

10. Share-based payment arrangements

The Company has established a stock option plan for the benefit of its employees, directors, officers and consultants. The maximum number of options that may be granted under the plan cannot exceed 18,114,870. The options are exercisable for a period of up to 5 years.

The Board of Directors determines the vesting schedule, exercise price per common share and the number of common shares which may be allocated to each director, officer, employee and consultant and all other terms and conditions of the option. Vesting is contingent upon continuous service and or employment through the specific vesting date and have an exercise price as set forth in the option certificate issued in respect of such option and in any event shall not be less than market price of the common shares as of the award date.

The number and weighted-average exercise price of options under the stock option program were as follows:

Page 11

NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

10. Share-based payment arrangements (cont'd)

		Weighted
		average
	Number of	exercise
	options	price
		$
Outstanding, as at December 31, 2020	15,610,020	0.58
Expired	(300,000)	0.68
Forfeited	(48,335)	0.85
Options outstanding, March 31, 2021	15,261,685	0.58
Outstanding, as at December 31, 2019	10,838,421	0.45
Granted to settle related party payable (Note 11)	188,571	0.70
Expired	(230,000)	0.42
Options outstanding, March 31, 2020	10,796,992	0.46

The Company recognized share-based compensation expense of $549,820 for the three months ended March 31, 2021 with a corresponding amount recognized to Contributed Surplus (March 31, 2020 - $134,432). There were no stock options granted during the three months ended March 31, 2021. The fair value of stock options granted during the three months ended March 31, 2020 were determined using the Black-Scholes pricing model at the weighted average assumptions as follows:

	2021	2020
Share price	N/A	$0.61
Expected volatility	N/A	75.43%
Expected life	N/A	1.7 years
Expected dividends	N/A	-%
Risk-free interest rate	N/A	1.75%

Expected volatility has been based on comparable companies listed on various exchanges.

A summary of the stock options outstanding as at March 31, 2021 are as follows:

		Options Outstanding	Options Outstanding		Options Exercisable	Options Exercisable
		Weighted
		average	Weighted			Weighted
		remaining	average			average
	Number	contractual	exercise		Number	exercise
Exercise price range	outstanding	life (years)	price		exercisable	price
$	#	#		$	#	$
0.21 - 0.40	1,040,882	3.6		0.27	1,040,882	0.27
0.41 - 0.60	8,707,539	2.1		0.45	6,756,812	0.44
0.61 - 0.80	728,571	0.9		0.69	633,571	0.69
0.81-1.00	4,784,693	4.6		0.85	461,528	0.85
Balance, March 31, 2021	15,261,685	3.0		0.58	8,892,793	0.46

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NEWTOPIA INC. Notes to the Condensed Interim Financial Statements (Unaudited) Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

10. Share-based payment arrangements (cont'd)

A summary of the Company’s stock options outstanding as at March 31, 2020 are as follows:

		Options Outstanding	Options Outstanding		Options Exercisable	Options Exercisable
		Weighted
		average	Weighted			Weighted
		remaining	average			average
	Number	contractual	exercise		Number	exercise
Exercise price range	outstanding	life (years)	price		exercisable	price
$	#	#		$	#	$
0.21 - 0.40	1,040,882	4.6		0.27	1,040,882	0.27
0.41 - 0.60	8,707,539	3.1		0.45	5,031,449	0.43
0.61-0.80	1,048,571	1.5		0.68	813,571	0.68
Balance, March 31, 2020	10,796,992	3.1		0.46	6,885,902	0.44

11. Related party transactions and balances

The Company’s key management personnel are comprised of the Board of Directors and current and former members of the executive team of the Company. Key management personnel compensation for the three months ended March 31, 2021 and 2020 consisted of the following:

	2021	2020
	$	$
Salaries, fees and short-term benefits	612,712	398,081
Share-based benefits	348,237	99,317
	960,949	497,398

On March 2, 2020, the Company and the CEO of the Company agreed to settle $400,000 of unpaid bonuses related to years prior to 2019 with 865,849 common shares and 188,571 stock options. The stock options are exercisable at $0.70 per common share until November 6, 2021. The fair value of the common shares and stock options at the date of the settlement was determined to be $528,168 and $39,548, respectively. The fair value of the stock options was determined using the Black-Scholes pricing model with the following assumptions: risk free interest rate of 1.75%, expected life of 1.7 years and expected volatility of 75.43%. The difference from the bonus payable of $400,000 being $167,716 was recognized as a loss on settlement of debt in the Statements of Loss and Comprehensive Loss. The shares were issued to the CEO in March 2021 and $528,168 was allocated from shares to be issued to Common Shares in the statement of equity.

On November 16, 2020, the Company issued 348,028 stock options to the directors of the Company as settlement of unpaid 2020 directors fees of $160,000. Each option vests quarterly over one year and is exercisable at a price of $0.85 per common share at any time up to November 16, 2025. The fair value of the stock options of $178,956 was determined using the Black-Scholes option pricing model with the following assumptions: risk free interest rate 1.29%, expected life of 5 years and expected volatility of 73.99%. The unpaid fees are being reduced by the amortization of the fair value of the stock options over the vesting period. At December 31, 2020, the outstanding 2020 fees owing was $114,102. During the three months ended March 31, 2021, the 2020 directors fees liability was reduced by $70,886 and as at March 31, 2021, the remaining balance owing was $43,216.

As at March 31, 2021, aggregate bonuses payable to members of the Company's executive team was $749,850 (March 31, 2020 - $600,000).

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