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Note 13 - Share-based Compensation

12 Months Ended

Nov. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 13 – SHARE-BASED COMPENSATION

Share incentive awards include a stock option plan for directors, executives, employees and eligible consultants, a PSU plan for executives, employees, and eligible consultants and a DSU plan for non-executive directors of the Company. Options granted to purchase common shares have exercise prices not less than the fair market value of the underlying share at the date of grant. As of November 30, 2023, 30,610,851 common shares were available for future share incentive plan awards under all three plans.

The Company recognized share-based compensation expense (see Note 12 - General and administrative) as follows:

		Years ended November 30,
		2023				2022				2021
Stock options		$	4,594			$	4,642			$	4,721
Performance share unit plan			3,910				3,345				3,278
Deferred share unit plan			227				227				236
		$	8,731			$	8,214			$	8,235

Stock options

Stock options granted under the Company’s share-based incentive plans generally expire five years after the date of grant and vest in one-third annual increments beginning on the first anniversary of the date of grant. The value of each option award is estimated at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected term of the option award and share price volatility. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination experience. The expected volatility is based on the historical volatility of the Company’s shares at the date of grant over the same length of term. These estimates involve inherent uncertainties and the application of management’s judgment. In addition, management estimates the expected forfeiture rate and only recognizes expense for those options expected to vest. As a result, if other assumptions had been used, the recorded share-based compensation expense would have been different from that reported.

A summary of stock options outstanding as of November 30, 2023, and activity during the year ended November 30, 2023 are as follows:

		Number of stock options				Weighted- average exercise price per share				Weighted- average remaining contractual term (years)				Aggregate intrinsic value
November 30, 2022			7,717,413			$	6.18
Granted			2,291,800				5.71
Exercised			(1,914,311	)			(3.73	)
Cancelled			(488,702	)			(7.08	)
November 30, 2023			7,606,200			$	6.59				2.38			$	505
Vested and exercisable as of November 30, 2023			3,881,316			$	6.75				1.28			$	505

The following table summarizes other stock option-related information:

		Years ended November 30,
		2023				2022				2021
Weighted-average assumptions used to value stock option awards:
Expected volatility			48.4	%			46.5	%			47.2	%
Expected term of options (years)			4				4				4
Expected dividend rate			—				—				—
Risk-free interest rate			3.85	%			1.13	%			0.3	%
Expected forfeiture rate			2.8	%			2.9	%			3.0	%
Weighted-average grant-date fair value		$	2.40			$	2.49			$	3.63
Intrinsic value of options exercised		$	2,339			$	5,723			$	12,543
Cash received from options exercised		$	—			$	—			$	—

As of November 30, 2023, the Company had $2,721 of unrecognized compensation cost related to 3,724,884 non-vested stock options expected to be expensed and vest over a period of approximately two years.

Performance share units

The Company has a PSU plan that provides for the issuance of PSUs in amounts as approved by the Company’s Compensation Committee. Each PSU award entitles the participant to receive one common share of the Company at the end of a specified period. The Compensation Committee may adjust the number of common shares for the achievement of certain performance and vesting criteria established at the time of grant. The actual performance against each of these criteria generates a multiplier that varies from 0% to 150%. Thus, the common shares that may be issued vary between 0% and 150% of the number of PSUs granted, as reduced by the amounts for participants no longer with the Company on the vesting date.

The value of each PSU granted is estimated at the grant date using a Monte Carlo simulation model. The Monte Carlo simulation model requires the input of subjective assumptions, including the share price volatility of the Company’s stock, as well as comparator index and the correlation of returns between the comparator index and the Company. Expected volatility is based on the historical volatility of the Company’s shares and the comparator index at the grant date. These estimates involve inherent uncertainties and the application of management’s judgment. As a result, if other assumptions had been used, our recorded share-based compensation expense would have been different from that reported.

A summary of PSU awards outstanding and activity during the year ended November 30, 2023 are as follows:

		Number of PSU awards				Weighted- average grant day fair value per award				Aggregate intrinsic value
November 30, 2022			1,257,200			$	7.65
Granted			605,500				5.77
Retention awards granted			181,700				5.64
Expired			(438,900	)			(6.96	)
November 30, 2023			1,605,500			$	6.89			$	760

As of November 30, 2023, the Company had 1,605,500 non-vested PSU awards outstanding of which 319,300 were fully expensed and subsequently expired with no value. The remaining 1,286,200 non-vested PSU awards with $3,771 of unrecognized compensation cost will be expensed over a period of approximately two years. On December 15, 2022, 181,700 PSUs were granted to the Company’s executive officers as a retention incentive and will fully vest if their employment continues through June 30, 2024.

The following table summarizes other PSU-related information:

		Years ended November 30,
		2023				2022				2021
Performance multiplier on PSUs vested			—	%			93	%			150	%
Common shares issued			—				430,045				574,379
Total fair value of common shares issued		$	—			$	2,903			$	5,723
Withholding tax paid on PSUs vested		$	—			$	2,122			$	731

Deferred share units

The Company has a DSU plan that provides for the issuance of DSUs in amounts where the Directors receive half of their annual retainer in DSUs and have the option to elect to receive all or a portion of the other half of their annual retainer in DSUs. Each DSU entitles the Directors to receive one common share or the market value thereof in cash, at the Company’s option, when they retire from the Company. The Company granted 43,658, 38,470, and 25,957 DSUs to Directors with a weighted-average grant day fair value of $5.04, $5.74, and $8.86 per DSU during 2023, 2022, and 2021, respectively. The Company issued 48,446, 52,930, and nil common shares under the DSU plan in 2023, 2022, and 2021, respectively. As of November 30, 2023, there were 287,072 DSUs outstanding.