Share capital

3 Months Ended

Feb. 28, 2021

Share capital.

Share capital

8)    Share capital

Authorized:

unlimited common shares, no par value

	in thousands of dollars, except share amounts
	Number of shares	Ascribed value
		$
November 30, 2019	140,427,761	177,971
Exercise of options	3,297,588	1,133
Restricted Share Units	412,501	642
November 30, 2020	144,137,850	179,746
Exercise of options	76,635	334
February 28, 2021, issued and outstanding	144,214,485	180,080

(a) Stock options

During the three-month period ended February 28, 2021, the Company granted 3,374,150 options (2020 - 2,050,000 options) at a weighted-average exercise price of CAD$2.52 (2020 - CAD$3.02) to employees, consultants and directors exercisable for a period of five years with various vesting terms from immediate vesting to vesting over a two-year period. The weighted-average fair value attributable to options granted in the period was $0.84 (2020 - $0.99).

For the three-month period ended February 28, 2021, Trilogy recognized a stock-based compensation charge of $2.10 million (2019 – $1.16 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

The fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model.

Assumptions used in the pricing model for the three-month period ended February 28, 2021 are as provided below.

	February 28, 2021
Risk-free interest rates	0.31%
Exercise price	CAD$2.52
Expected life	3 years
Expected volatility	64.4%
Expected dividends	Nil

As of February 28, 2021, there were 3,374,150 non-vested options outstanding with a weighted average exercise price of $2.07; the non-vested stock option expense not yet recognized was $1.63 million. This expense is expected to be recognized over the next two years.

A summary of the Company’s stock option plan and changes during the three-month period ended February 28, 2021 is as follows:

	February 28, 2021
		Weighted average
		exercise price
	Number of options	$
Balance – beginning of the period	8,647,500	1.88
Granted	3,374,150	1.98
Exercised	(381,373)	1.97
Cancelled	(120,000)	2.42
Balance – end of the period	11,520,277	1.90

The following table summarizes information about the stock options outstanding at February 28, 2021.

	Outstanding			Exercisable		Unvested
			Weighted		Weighted
	Number of	Weighted	average	Number of	average	Number of
	outstanding	average years	exercise price	exercisable	exercise price	unvested
Range of price	options	to expiry	$	options	$	options
$0.55 to $1.00	1,705,627	1.34	0.69	1,705,627	0.69	—
$1.01 to $1.50	75,000	1.81	1.15	75,000	1.15	—
$1.51 to $2.00	4,277,150	4.54	1.95	2,779,483	1.94	1,497,667
$2.01 to $2.50	5,425,000	3.72	2.24	3,618,330	2.28	1,806,670
$2.51 to $3.00	37,500	3.23	2.68	37,500	2.68	—
	11,520,277	3.66	1.90	8,215,940	1.82	3,304,337

The aggregate intrinsic value of vested share options (the market value less the exercise price) at February 28, 2021 was $3.3 million (2020 - $5.9 million) and the aggregate intrinsic value of exercised options for the three months ended February 28, 2021 was $0.17 million (2020 - $0.04 million).

(b) Restricted Share Units and Deferred Share Units

The Company has a Restricted Share Unit Plan (“RSU Plan”) and a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”) to provide long-term incentives to employees, officers and directors.  Awards under the RSU Plan and DSU Plan

may be settled in cash and/or common shares of the Company at the Company’s election with each restricted share unit (“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company or equivalent value.  All units are accounted for as equity-settled awards.

A summary of the Company’s unit plans and changes during the three-month period ended February 28, 2021 is as follows:

	Number of DSUs
Balance – beginning of the period	1,218,520
Granted	19,992
Balance – end of the period	1,238,512

For the three-month period ended February 28, 2021, Trilogy recognized a stock-based compensation charge of $0.04 million (2020- $0.04 million), net of estimated forfeitures.  The Company did not issue any RSU grants during the three-month period ended February 28, 2021. As of February 28, 2021, there were no outstanding RSU grants.