Share capital

6 Months Ended

May 31, 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	328,635	76
Restricted Share Units	501,332	763
Joint venture equity contribution (note 3(b))	31,469	51
May 31, 2022, issued and outstanding	145,871,247	181,710

(a) Stock options

During the first quarter, the Company granted 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$0.84). No stock options were granted during the second quarter.

For the six-month period ended May 31, 2022, Trilogy recognized a stock-based compensation charge of $1.2 million (2021 - $2.6 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 six-month period ended May 31, 2022 are as provided below.

	May 31, 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 May 31, 2022, there were 2,312,838 non-vested options outstanding with a weighted average exercise price of CDN$2.43; the non-vested stock option expense not yet recognized was $0.57 million. This expense is expected to be recognized over the next twelve months.

A summary of the Company’s stock option plan and changes during the six-month period ended May 31, 2022 is as follows:

	May 31, 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	(81,674)	0.85
Expired	(5,000)	2.52
Balance – end of the period	12,187,150	2.50

During the six-month period ended May 31, 2022, the Company received net proceeds of $54,295 upon the exercise of 81,674 options.

The following table summarizes information about the stock options outstanding at May 31, 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
$1.01 to $1.50	870,000	0.52	1.05	870,000	1.05	—
$2.01 to $2.50	2,599,500	3.84	2.26	1,676,498	2.29	923,002
$2.51 to $3.00	6,920,150	2.95	2.64	5,530,314	2.66	1,389,836
$3.01 to $3.41	1,797,500	2.56	3.03	1,797,500	3.03	—
	12,187,150	2.91	2.50	9,874,312	2.52	2,312,838

The aggregate intrinsic value of vested stock options (the market value less the exercise price) at May 31, 2022 was $0.13 million (2021 - $6.8 million) and the aggregate intrinsic value of exercised options for the six-month period ending May 31, 2022 was $0.05 million (2021 - $0.71 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 six-month period ending May 31, 2022 is as follows:

	Number of RSUs	Number of DSUs
Balance – beginning of the period	—	1,277,445
Granted	758,600	193,740
Vested	(501,332)	—
Balance – end of the period	257,268	1,471,185

For the six-month period ending May 31 2022, Trilogy recognized a stock-based compensation charge of $1.2 million (2021 - $0.07 million), net of estimated forfeitures.