Share capital

3 Months Ended

Feb. 28, 2022

Share capital.

Share capital

6)    Share capital

Authorized:

unlimited common shares, no par value

	in thousands of dollars, except share amounts
	Number of shares	Ascribed value
		$
November 30, 2021	145,009,811	180,820
Exercise of options	31,674	50
Restricted Share Units	391,332	650
Joint venture equity contribution (note 3(b))	31,469	51
February 28, 2022, issued and outstanding	145,464,286	181,571

(a) Stock options

During the three-month period ended February 28, 2022, the Company made an annual grant of 1,734,500 stock options (2021 - 3,374,150 stock options) at an exercise price of CDN$2.21 (2021 - CDN$2.52) 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 fair value attributable to options granted in the period was CDN$0.90 (2021 - CDN$1.07).

For the three-month period ended February 28, 2022, Trilogy recognized a stock-based compensation charge of $0.86 million (2021 - $2.1 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, 2022 are as provided below.

	February 28, 2022
Risk-free interest rates	1.07%
Exercise price	CDN$2.20
Expected life	3 years
Expected volatility	60.6%
Expected dividends	Nil

As of February 28, 2022, there were 2,317,838 non-vested options outstanding with a weighted average exercise price of CDN$2.43; the non-vested stock option expense not yet recognized was $0.83 million. This expense is expected to be recognized over the next year.

A summary of the Company’s stock option plan and changes during the three-month period ended February 28, 2022 is as follows:

	February 28, 2022
		Weighted average
		exercise price
	Number of options	CDN$
Balance – beginning of the period	10,539,324	2.54
Granted	1,734,500	2.21
Exercised	(31,674)	0.70
Balance – end of the period	12,242,150	2.50

During the three-month period ended February 28, 2022, the Company received net proceeds of $17,640 upon the exercise of 31,674 options.

The following table summarizes information about the stock options outstanding at February 28, 2022.

	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 exercise price (CDN$)	options	to expiry	CDN$	options	CDN$	options
$0.50 to $1.00	50,000	0.19	0.94	50,000	0.94	—
$1.01 to $1.50	870,000	0.77	1.05	870,000	1.05	—
$2.01 to $2.50	2,599,500	4.10	2.26	1,676,498	2.29	923,002
$2.51 to $3.00	6,925,150	3.20	2.64	5,530,314	2.66	1,394,836
$3.01 to $3.41	1,797,500	2.82	3.03	1,797,500	3.03
	12,242,150	3.15	2.50	9,924,312	2.51	2,317,838

The aggregate intrinsic value of vested share options (the market value less the exercise price) at February 28, 2022 was $0.15 million (2021 - $3.3 million) and the aggregate intrinsic value of exercised options for the three months ended February 28, 2022 was $0.03 million (2021 - $0.17 million).

(b) Restricted Share Units and Deferred Share Units

The Company has a Restricted Share Unit Plan (“RSU Plan”) to provide long-term incentives to employees and consultants and a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”) to offset cash payments for fees to directors.  Awards under the RSU Plan and DSU Plan have been settled in common shares of the Company with each restricted share unit (“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company.  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, 2022 is as follows:

	Number of RSUs	Number of DSUs
Balance – beginning of the period	—	1,277,445
Granted	648,600	160,740
Vested	(391,332)	—
Balance – end of the period	257,268	1,438,185

For the three-month period ended February 28, 2022, Trilogy recognized a stock-based compensation charge of $1.0 million (2021 - $0.04 million), net of estimated forfeitures.