SHARE-BASED PAYMENTS

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

SHARE-BASED PAYMENTS

The Company maintains an equity incentive plan, known as the 2021 Amended and Restated Omnibus Equity Incentive Compensation Plan (the “Compensation Plan”), for directors, executives, eligible employees and consultants. Existing equity incentive awards include employee non-qualified stock options, RSUs and SARs. The Company issues new Common Shares to satisfy exercises and vesting under its equity incentive awards. As of March 31, 2023, a total of 15,802,941 Common Shares were authorized for future equity incentive plan awards.

The Company’s share-based compensation expense, by type of award, is as follows:


	Three Months Ended March 31,
		2023		2022
RSUs(1)		$	644	$	484
SARs		436		346
Stock options		106		32
Total share-based compensation expense(2)		$	1,186	$	862

(1)The fair value of the RSUs granted under the Compensation Plan for the three months ended March 31, 2023 and 2022 was estimated at the date of grant, using the stated market price on the NYSE American.

(2)Share-based compensation is included in Selling, general and administration in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Restricted Stock Units

The Company grants RSUs to directors, executives and eligible employees. Awards for executives and eligible employees are determined as a target percentage of base salary and generally vest over three years. Holders of unvested RSUs do not have voting rights on those RSUs. The RSUs are subject to forfeiture risk and other restrictions. Upon vesting, the employee is entitled to receive one Common Share of the Company for each RSU at no additional payment.

A summary of the Company’s non-vested RSUs activity is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value




Non-vested, December 31, 2022	747,425	$	4.77
Granted	450,232	7.36
Vested	(448,883)	4.24
Forfeited	—	—
Non-vested, March 31, 2023	748,774	$	6.64

The total intrinsic value and fair value of RSUs that vested and were settled for equity was $3.38 million for the three months ended March 31, 2023.

Stock Appreciation Rights

The Company may grant SARs to directors, executives, and eligible employees.

On January 26, 2023, the Company’s Board of Directors issued SARs under the Compensation Plan, which are intended to provide additional long-term equity incentives for the Company’s senior management.

Each SAR granted entitles the holder to receive, upon a valid exercise, payment from the Company in cash or Common Shares (at the sole discretion of the Company) in an amount representing the difference between the fair market value (“FMV”) of the Company’s Common Shares on the date of exercise and $7.36 (the closing market price or “Grant Price” at the time of grant). Fair Market Value as used herein means the closing price of the Shares on the TSX or the NYSE American on the last trading day immediately prior to the date of exercise. The term of the SARs grant is five years, with SARs vesting only upon the achievement of the following goals: as to one-third of the SARs granted, automatically upon the 90-calendar-day VWAP of the Company’s Common Shares on the NYSE American equaling or exceeding $12.00 for any continuous 90-calendar-day period; as to an additional one-third of the SARs granted, automatically upon the 90-calendar-day VWAP of the Company’s Common Shares on the NYSE American equaling or exceeding $14.00 for any continuous 90-calendar-day period; and as to the final one-third of the SARs granted, automatically upon the 90-calendar-day VWAP of the Company’s Common Shares on the NYSE American equaling or exceeding $16.00 for any continuous 90-calendar-day period. Further, notwithstanding the foregoing vesting schedule, no SARs were able to be exercised by the holder for an initial period of one year from the Date of Grant; the date first exercisable being January 24, 2024.

The fair value of the SARs granted during the three months ended March 31, 2023 was estimated at the date of grant using a Monte Carlo simulation, with the following weighted average assumptions:


Risk-free interest rate	3.58		%
Expected life(1)	5.0 years
Expected volatility(2)	55.00		%
Expected dividend yield	—		%
Weighted average grant date fair value	$	3.45

(1)Monte Carlo analysis of SARs assumes employee suboptimal exercise at first vesting time for each tranche.

(2)Expected volatility is measured based on the Company’s historical share price volatility over a period equivalent to the expected life of the SARs.

A summary of the Company’s SARs activity is as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Intrinsic Value





Outstanding, December 31, 2022	2,452,768	$	4.07
Granted	308,333	7.36
Exercised	—	—
Forfeited	(5,554)	6.47
Expired	—	—
Outstanding, March 31, 2023	2,755,547	$	4.43	2.12	$	4,413
Exercisable, March 31, 2023	1,092,143	$	2.92	0.81	$	2,905

A summary of the Company’s non-vested SARs activity is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value




Non-vested, December 31, 2022	1,360,625	$	2.81
Granted	308,333	3.45
Vested	—	—
Forfeited	(5,554)	5.20
Non-vested, March 31, 2023	1,663,404	$	2.92

Employee Stock Options

The Company, under the Compensation Plan, may grant stock options to directors, executives, employees and consultants to purchase Common Shares of the Company. The exercise price of the stock options is set as the higher of the Company’s closing share price on the NYSE American on the last trading day before the grant date and the five-day volume weighted average price (“VWAP”) on the NYSE American ending on the last trading day before the grant date. 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 fair value of the stock options granted under the Compensation Plan for the three months ended March 31, 2023 was estimated at the date of grant, using the Black-Scholes Option Valuation Model, with the following weighted average assumptions:


Risk-free interest rate	3.89		%
Expected life	3.25 years
Expected volatility(1)	74.29		%
Expected dividend yield	—		%
Weighted average grant date fair value	$	3.98

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

A summary of the Company’s stock option activity is as follows:


	Range of Exercise Prices	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Intrinsic Value





Outstanding, December 31, 2022	$1.70 - $8.41	767,678	$	3.24
Granted	5.34 - 7.36	120,237	7.28
Exercised	1.70 - 2.92	(34,219)	1.88
Forfeited	3.89 - 7.36	(17,388)	6.51
Expired	—	—	—
Outstanding, March 31, 2023	$1.70 - $8.41	836,308	$	3.83	2.19	$	1,767
Exercisable, March 31, 2023	$1.70 - $7.14	667,523	$	2.99	1.56	$	1,766

A summary of the Company’s non-vested stock option activity is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value




Non-vested, December 31, 2022	140,586	$	4.12
Granted	120,237	3.98
Vested	(74,651)	3.76
Forfeited	(17,388)	3.87
Non-vested, March 31, 2023	168,784	$	3.97

As of March 31, 2023, there were $0.51 million, $3.32 million, and $1.03 million of unrecognized compensation costs related to the unvested stock options, RSUs and SARs, respectively. This expense is expected to be recognized over a weighted average period of 1.64 years, 2.27 years, and 0.94 years, respectively.