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Share-based Compensation Plans
12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Share-based Compensation Plans

12. Share-based compensation plans

Share-based payments expense

Total share-based payments expense was as follows:

 

For the years ended

 

 

 

 

 

 

 

 

 

 

 

 

For the Twelve Months Ended

 

 

 

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

December 31, 2020

 

Stock options

 

$

9,485

 

 

$

13,988

 

 

$

9,700

 

Restricted share units

 

$

2,677

 

 

$

954

 

 

$

686

 

Warrants

 

 

 

 

 

 

 

 

89

 

Total share-based payments

 

$

12,162

 

 

$

14,942

 

 

$

10,475

 

As of December 31, 2022, the total unrecognized compensation cost related to nonvested stock options is $27,976. The weighted-average period over which it is expected to be recognized is 8.21 for options.

Common shares issued for compensation

On March 25, 2020, the Company issued 1,625,701 common shares to an entity controlled by the minority shareholders of NJ, pursuant to services surrounding the granting of certain licenses in the state of New Jersey to NJ.

Stock Options

The Company’s Board of Directors approved the Stock Option Plan (the “Plan”) effective March 8, 2017. The Plan provides for the granting of stock options to directors, officers, employees and consultants of the Company. Stock options are granted for a term not to exceed ten years at an exercise price, which is the greater of the closing market price of the shares on the CSE on the trading day immediately preceding the date the options are granted and on the same day of the option grant. The options are not transferrable. The Plan is administered by the Board of Directors, which determines individual eligibility under the Plan, number of shares reserved for optioning to each individual (not to exceed 5% of issued and outstanding shares to any one individual) and the vesting period. The maximum number of shares of the Company that are issuable pursuant to the Plan is limited to 10% of the fully diluted shares of the Company at the date of the grant of options.

The stock options outstanding noted below consist of service-based options granted to employees to purchase common stock, the majority of which vest over a one to three-year period and have a five to ten-year contractual term. These awards are subject to the risk of forfeiture until vested by virtue of continued employment or service to the Company.

The following table summarizes the stock option activity:

 

 

 

Number of Stock Options

 

 

Weighted average remaining contractual life (in years)

 

 

Weighted Average Exercise Price (per share) $

 

 

Aggregate intrinsic value

 

 

Weighted average fair value of nonvested options (per share) $

 

Outstanding, December 31, 2019

 

 

10,493,015

 

 

 

4.04

 

 

$

4.26

 

 

$

1,877

 

 

$

3.30

 

Granted

 

 

12,861,050

 

 

 

 

 

 

2.82

 

 

 

 

 

 

 

Exercised

 

 

(1,816,496

)

 

 

 

 

 

2.46

 

 

 

 

 

 

 

Forfeited (1)

 

 

(4,174,221

)

 

 

 

 

 

4.19

 

 

 

 

 

 

 

Outstanding, December 31, 2020

 

 

17,363,348

 

 

 

3.96

 

 

$

3.49

 

 

$

112,675

 

 

$

2.58

 

Granted

 

 

3,905,000

 

 

 

 

 

 

10.11

 

 

 

 

 

 

 

Exercised

 

 

(1,376,496

)

 

 

 

 

 

3.97

 

 

 

 

 

 

 

Forfeited (1)

 

 

(6,838,347

)

 

 

 

 

 

4.46

 

 

 

 

 

 

 

Expired

 

 

(198,986

)

 

 

 

 

 

5.95

 

 

 

 

 

 

 

Outstanding, December 31, 2021

 

 

12,854,519

 

 

 

4.84

 

 

$

4.85

 

 

$

27,557

 

 

$

4.22

 

Granted

 

 

7,058,840

 

 

 

 

 

 

3.69

 

 

 

 

 

 

 

Replacement options granted on acquisition of Gage

 

 

4,940,364

 

 

 

 

 

 

2.99

 

 

 

 

 

 

 

Exercised

 

 

(778,245

)

 

 

 

 

 

0.62

 

 

 

 

 

 

 

Forfeited (1)

 

 

(3,397,022

)

 

 

 

 

 

5.96

 

 

 

 

 

 

 

Expired

 

 

(567,211

)

 

 

 

 

 

7.14

 

 

 

 

 

 

 

Outstanding, December 31, 2022

 

 

20,111,246

 

 

 

4.86

 

 

$

3.63

 

 

 

320

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable, December 31, 2022

 

 

12,447,071

 

 

 

2.80

 

 

$

3.23

 

 

 

320

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonvested, December 31, 2022

 

 

7,664,172

 

 

 

8.21

 

 

$

4.28

 

 

$

-

 

 

N/A

 

(1) For stock options forfeited, represent one share for each stock option forfeited.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Company’s closing stock price at the end of the period and the exercise price, multiplied by the number of the in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on December 31, 2022, 2021, and 2020, respectively.

The total pre-tax intrinsic value (the difference between the market price of the Company’s common stock on the exercise date and the price paid by the options to exercise the option) related to stock options exercised is presented below:

 

For the years ended

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

December 31, 2020

 

Exercised

 

$

1,355

 

 

$

6,667

 

 

$

10,123

 

The Gage Acquisition included consideration in the form of 4,940,364 replacement options that had been issued on the acquisition date to employees of Gage. The post-combination options vest over a 1-3 year period. The fair value of the replacement options are estimated using the Black-Scholes Option Pricing Model with the following assumptions:

 

 

March 10, 2022

 

Volatility

 

55.0%-80.0%

 

Risk-free interest rate

 

1.22%-1.94%

 

Expected life (years)

 

1.00-5.00

 

Dividend yield

 

 

0

%

 

The fair value of the various stock options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

 

 

December 31, 2022

 

 

December 31, 2021

 

 

December 31, 2020

 

Volatility

 

77.55% - 77.89%

 

 

79.05% - 81.51%

 

 

82.29% - 87.09%

 

Risk-free interest rate

 

1.63% - 3.51%

 

 

0.90% - 1.72%

 

 

0.35% - 1.60%

 

Expected life (years)

 

9.62 - 10.01

 

 

4.57 - 10.05

 

 

4.76 - 4.95

 

Dividend yield

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Forfeiture rate

 

 

26.11

%

 

23.21%-27.73%

 

 

 

23.21

%

Volatility was estimated by using the historical volatility of the Company. The expected life in years represents the period of time that the options issued are expected to be outstanding. The risk-free rate is based on U.S. treasury bond issues with a remaining term approximately equal to the expected life of the options. Dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future.

The total estimated fair value of stock options that vested during the years ended December 31, 2022, 2021, and 2020, was $8,352, $14,840, and $9,035, respectively.

Restricted Share Units

Effective November 19, 2019, the Company adopted the Share Unit Plan, which allows for the granting of performance share units (PSUs) and restricted share units (RSUs) to directors, officers, employees, and consultants of the Company and provides them the opportunity to defer certain compensation and equity awards paid or grated for their service in the form of stock units (“Stock Units”). The Stock Units are used solely as a device for determining the amount of cash benefit to eventually be paid to the grantee. Each Stock Unit has the same value as one share of the Company’s common stock. The PSUs generally become vested upon attainment of established performance conditions, as well as service conditions. The RSUs generally become vested upon completion of continuous employment over the requisite service period.

The following table summarizes the activities for the RSUs:

 

 

Number of RSUs

 

 

Number of RSUs vested

 

 

Weighted average remaining contractual life (in years)

Outstanding, December 31, 2019

 

 

 

 

 

 

 

N/A

Granted

 

 

280,099

 

 

 

 

 

 

Vested

 

 

(157,788

)

 

 

 

 

 

Outstanding, December 31, 2020

 

 

122,311

 

 

 

33,733

 

 

N/A

Granted

 

 

174,408

 

 

 

 

 

 

Vested

 

 

(40,665

)

 

 

 

 

 

Forfeited

 

 

(63,883

)

 

 

 

 

 

Outstanding, December 31, 2021

 

 

192,171

 

 

 

13,294

 

 

N/A

Granted

 

 

1,176,397

 

 

 

 

 

 

Vested

 

 

(669,478

)

 

 

 

 

 

Forfeited

 

 

(283,450

)

 

 

 

 

 

Outstanding, December 31, 2022

 

 

415,640

 

 

 

13,050

 

 

N/A

Of the RSU's granted during the year ended December 31, 2022, 106,840 vested on the grant date and the rest will vest over a 6- month to 4-year term. The RSUs granted during the year ended December 31, 2021 will vest over a 3 to 4-year term. Of the RSUs granted during the year ended December 31, 2020, 191,521 vested on the grant date and the remaining will vest over a 4-year term.

As of December 31, 2022, there was $3,368 of total unrecognized compensation cost related to unvested RSUs.