SHARE-BASED PAYMENTS

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

SHARE-BASED PAYMENTS

The Company, under the 2021 Amended and Restated Omnibus Equity Incentive Compensation Plan (the “Compensation Plan”), maintains an equity incentive plan for directors, executives, eligible employees and consultants. Equity incentive awards include employee stock options, restricted stock units (“RSUs”) and stock appreciation rights (“SARs”). The Company issues new shares of common stock to satisfy exercises and vesting under all of its equity incentive awards. At March 31, 2021, a total of 14,081,650 Common Shares were authorized for equity incentive plan awards.

Employee Stock Options

The Company, under the Compensation Plan, may grant options to directors, executives, employees and consultants to purchase Common Shares of the Company. The exercise price of the options is set as the higher of the Company’s closing share price on the day before the grant date and the five-day volume weighted average price (“VWAP”). Stock options granted under the Compensation Plan generally vest over a period of two years or more and are generally exercisable over a period of five years from the grant date, such period not to exceed 10 years. The value of each option award is estimated at the grant date using the Black-Scholes Option Valuation Model. There were 0.16 million options granted in the three months ended March 31, 2021 (March 31, 2020 – 0.57 million options). At March 31, 2021, there were 1.47 million options outstanding with 1.18 million options exercisable, at a weighted average exercise price of $3.02 and $3.17, respectively, with a weighted average remaining contractual life of 2.92 years and 2.71 years, respectively. The fully vested options had an intrinsic value of $3.17 million at March 31, 2021.

The fair value of the options granted under the Compensation Plan for the three months ended March 31, 2021 was estimated at the date of grant, using the Black-Scholes Option Valuation Model, with the following weighted average assumptions:


Risk-free interest rate	0.42		%
Expected life	5.0 years
Expected volatility	61.88		%	*
Expected dividend yield	—		%
Weighted average grant date fair value	$	2.03

* Expected volatility is measured based on the Company’s historical share price volatility over a period equivalent to the expected life of the options.

The summary of the Company’s stock options at March 31, 2021 and December 31, 2020, and the changes for the fiscal periods ending on those dates, is presented below:


	Range of Exercise Prices	Weighted Average Exercise Price		Number of Options
Balance, December 31, 2019	$1.70 - $15.61	$	3.43	1,487,433
Granted	1.76 - 3.06	1.77		711,414
Exercised	1.70 - 2.92	1.97		(302,707)
Forfeited	1.70 - 5.18	3.26		(188,541)
Expired	4.12 - 5.22	4.40		(98,512)
Balance, December 31, 2020	$1.70 - $15.61	$	2.91	1,609,087
Granted	3.89 - 7.14	3.93		162,920
Exercised	1.70 - 4.48	2.40		(278,111)
Forfeited	—	—		—
Expired	2.12 - 15.61	9.65		(22,836)
Balance, March 31, 2021	$1.70 - $12.59	$	3.02	1,471,060

A summary of the status and activity of non-vested stock options for the three months ended March 31, 2021 is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested December 31, 2020	403,990	$	0.94
Granted	162,920	2.03
Vested	(280,438)	1.35
Forfeited	—	—
Non-vested March 31, 2021	286,472	$	1.16

Restricted Stock Units

The Company grants RSUs to directors, executives and eligible employees. Awards are determined as a target percentage of base salary and generally vest over periods of three years. Prior to vesting, holders of RSUs do not have voting rights. The RSUs are subject to forfeiture risk and other restrictions. Upon vesting, the employee is entitled to receive one share of the Company’s common stock for each RSU for no additional payment. During the three months ended March 31, 2021, the Company’s Board of Directors issued 0.44 million RSUs under the Compensation Plan (March 31, 2020 - 0.74 million).

A summary of the status and activity of non-vested RSUs for the three months ended March 31, 2021 is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested December 31, 2020	1,094,056	$	1.98
Granted	441,241	3.89
Vested	(635,233)	1.94
Forfeited	—	—
Non-vested March 31, 2021	900,064	$	2.94

The total intrinsic value and fair value of RSUs that vested and were settled for equity in the three months ended March 31, 2021 was $2.67 million (March 31, 2020 – $1.21 million).

Stock Appreciation Rights

During the year ended December 31, 2019, the Company’s Board of Directors issued 2.20 million SARs under the Compensation Plan with a fair value of $1.25 per SAR. These SARs are intended to provide additional long-term performance-based equity incentives for the Company’s senior management. The SARs are performance based because they only vest upon the achievement of performance goals designed to significantly increase shareholder value.

Each SAR outstanding entitles the holder, on exercise, to a payment in cash or shares (at the election of the Company) equal to the difference between the market price of the Common Shares at the time of exercise and $2.92 (the market price at the time of

grant) over a five-year period, but vest only upon the achievement of the following performance goals: as to one-third of the SARs granted upon the 90-calendar-day VWAP of the Common Shares on the NYSE American equaling or exceeding $5.00 for any 90-calendar day period; as to an additional one-third of the SARs granted, upon the 90-calendar-day VWAP of the Common Shares on the NYSE American equaling or exceeding $7.00 for any 90-calendar-day period; and as to the final one-third of the SARs granted, upon the 90-calendar-day VWAP of the Common Shares on the NYSE American equaling or exceeding $10.00 for any 90-calendar-day period. The first of these vesting performance goals was reached during the three months ended March 31, 2021.

The summary of the Company’s SARs at March 31, 2021 and December 31, 2020, and the changes for the fiscal periods ending on those dates, is presented below:


	Weighted Average Exercise Price		Number of SARs
Balance, December 31, 2019	$	2.92	2,165,509
Granted	—		—
Exercised	—		—
Forfeited	2.92		(444,886)
Expired	—		—
Balance, December 31, 2020	$	2.92	1,720,623
Granted	—		—
Exercised	—		—
Forfeited	—		—
Expired	—		—
Balance, March 31, 2021	$	2.92	1,720,623

A summary of the status and activity of non-vested SARs for the three months ended March 31, 2021 is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested December 31, 2020	1,720,623	$	1.25
Granted	—	—
Vested	(573,537)	1.25
Forfeited	—	—
Non-vested March 31, 2021	1,147,086	$	1.25

The share-based compensation recorded during the three months ended March 31, 2021 was $0.20 million, $0.36 million, and $0.14 million for stock options, RSU awards, and SARs, respectively (March 31, 2020 - $0.26 million, $0.41 million, and $0.33 million).

At March 31, 2021, there were $0.18 million, $1.88 million, and $0.14 million of unrecognized compensation costs related to the unvested stock options, RSU awards and SARs, respectively, to be recognized over a weighted average period of 1.65 years, 2.57 years, and 0.56 years, respectively.