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Shareholders' Equity and Capital Stock | 12 Months Ended
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Dec. 31, 2020
Shareholders' Equity and Capital Stock |
Note - 13 Shareholders' Equity and Capital Stock |
13. | Shareholders’ Equity and Capital Stock
Common shares The Company’s share capital consists of an unlimited amount of Class A preferred shares authorized, without par value, of which no shares are issued and outstanding; and an unlimited amount of common shares authorized, without par value, of which 170,253,752 shares and 160,478,059 shares were issued and outstanding as of December 31, 2020 and December 31, 2019, respectively. In September 2018, we completed a US$10 million public offering of Common Shares, which included the offering of 12,195,122 Common Shares and accompanying warrants to purchase up to 6,097,561 Common Shares, at a combined public offering price of US$0.82 per Common Share and accompanying warrant. We also granted the underwriters a 30-day option to purchase up to 1,829,268 additional Common Shares and warrants to purchase up to an aggregate of 914,634 Common Shares on the same terms. The underwriters exercised a portion of their option to purchase additional securities at closing, acquiring 867,756 additional warrants to purchase an aggregate of 433,878 Common Shares. Including the partial exercise of the option, the Company issued a total of 12,195,122 Common Shares and 13,062,878 warrants to purchase up to 6,531,439 Common Shares. During the year ended December 31, 2018, the Company exchanged 505,510 Common Shares for vested RSUs. In addition, 496,838 stock options were exercised for proceeds of $0.3 million. During the year ended December 31, 2019, the Company exchanged 425,038 Common Shares for vested RSUs. In addition, 323,618 stock options were exercised for proceeds of $0.2 million. During the year ended December 31, 2020, the Company exchanged 356,071 Common Shares for vested RSUs. In addition, 159,982 stock options were exercised for proceeds of $0.1 million. In August 2020, the Company closed a $4.68 million registered direct offering of 9,000,000 common shares and accompanying one-half common share warrants to purchase up to 4,500,000 common shares, at a combined public offering price of $0.52 per common share and accompanying warrant, with gross proceeds to the Company of $4.68 million. After fees and expenses of $0.4 million, net proceeds to the Company were $4.3 million. The common share warrants will expire two years from the date of issuance and will allow the holders to purchase our common shares at an exercise price of $0.75 per whole common share. Because the warrants are priced in US$ and the functional currency of Ur-Energy Inc. is Cdn$, this creates a derivative financial liability. The fair value of the liability will be recorded and adjusted quarterly using the Black-Scholes technique described herein as there is no active market for the warrants. Any gain or loss will be reflected in net income for the period. Stock options In 2005, the Company’s Board of Directors approved the adoption of the Company's stock option plan (the “Option Plan”). The Option Plan was most recently approved by the shareholders on May 7, 2020. Eligible participants under the Option Plan include directors, officers, employees, and consultants of the Company. Under the terms of the Option Plan, grants of options will vest over a three-year period: 33.3% on the first anniversary, 33.3% on the second anniversary, and 33.4% on the third anniversary of the grant. The term of the options is five years. Activity with respect to stock options outstanding is summarized as follows:
|  | Outstanding |  |  | Weighted-average |
Stock Option Activity |  | Options |  |  | exercise price |
|  | # |  |  | $ |
December 31, 2017 |  |  | 9,459,401 |  |  | $ | 0.70 |
Granted |  |  | 2,182,955 |  |  |  | 0.70 |
Exercised |  |  | (496,838 | ) |  |  | 0.58 |
Forfeited |  |  | (275,085 | ) |  |  | 0.72 |
Expired |  |  | (1,138,821 | ) |  |  | 0.83 |
December 31, 2018 |  |  | 9,731,612 |  |  | $ | 0.64 |
Granted |  |  | 2,852,386 |  |  |  | 0.61 |
Exercised |  |  | (323,618 | ) |  |  | 0.63 |
Forfeited |  |  | (395,851 | ) |  |  | 0.71 |
Expired |  |  | (787,946 | ) |  |  | 0.83 |
December 31, 2019 |  |  | 11,076,583 |  |  | $ | 0.64 |
Granted |  |  | 2,950,180 |  |  |  | 0.48 |
Exercised |  |  | (159,982 | ) |  |  | 0.63 |
Forfeited |  |  | (534,425 | ) |  |  | 0.64 |
Expired |  |  | (1,421,932 | ) |  |  | 0.66 |
December 31, 2020 |  |  | 11,910,424 |  |  | $ | 0.61 |
The exercise price of a new grant is set at the closing price for the stock on the Toronto Stock Exchange (TSX) on the trading day immediately preceding the grant date so there is no intrinsic value as of the date of grant. As of December 31, 2020, outstanding stock options were as follows:
|  |  | Options outstanding |  |  | Options exercisable |  |  |
|  |  |  |  |  | Weighted- |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |  |
|  |  |  |  |  | average |  |  |  |  |  |  |  |  | average |  |  |  |  |  |
|  |  |  |  |  | remaining |  |  | Aggregate |  |  |  |  |  | remaining |  |  | Aggregate |  |  |
Exercise |  |  | Number |  |  | contractual |  |  | intrinsic |  |  | Number |  |  | contractual |  |  | intrinsic |  |  |
price |  |  | of options |  |  | life (years) |  |  | value |  |  | of options |  |  | life (years) |  |  | value |  |  | Expiry
$ |  |  | # |  |  |  |  |  | $ |  |  |  |  |  |  |  |  | $ |  |  |
| 0.57 |  |  |  | 2,238,988 |  |  |  | 1.0 |  |  |  | 514,967 |  |  |  | 2,238,988 |  |  |  | 1.0 |  |  |  | 514,967 |  |  | 2021-12-16
| 0.80 |  |  |  | 300,000 |  |  |  | 1.2 |  |  |  | - |  |  |  | 300,000 |  |  |  | 1.2 |  |  |  | - |  |  | 2022-03-02
| 0.57 |  |  |  | 200,000 |  |  |  | 1.7 |  |  |  | 46,000 |  |  |  | 200,000 |  |  |  | 1.7 |  |  |  | 46,000 |  |  | 2022-09-07
| 0.71 |  |  |  | 1,668,089 |  |  |  | 2.0 |  |  |  | 150,128 |  |  |  | 1,668,089 |  |  |  | 2.0 |  |  |  | 150,128 |  |  | 2022-12-15
| 0.60 |  |  |  | 200,000 |  |  |  | 2.2 |  |  |  | 40,000 |  |  |  | 133,333 |  |  |  | 2.2 |  |  |  | 26,667 |  |  | 2023-03-30
| 0.73 |  |  |  | 929,269 |  |  |  | 2.6 |  |  |  | 65,049 |  |  |  | 622,298 |  |  |  | 2.6 |  |  |  | 43,561 |  |  | 2023-08-20
| 0.71 |  |  |  | 777,037 |  |  |  | 3.0 |  |  |  | 69,933 |  |  |  | 515,660 |  |  |  | 3.0 |  |  |  | 46,409 |  |  | 2023-12-14
| 0.62 |  |  |  | 2,646,861 |  |  |  | 3.8 |  |  |  | 476,435 |  |  |  | 867,128 |  |  |  | 3.8 |  |  |  | 156,083 |  |  | 2024-11-05
| 0.49 |  |  |  | 2,950,180 |  |  |  | 4.9 |  |  |  | 914,556 |  |  |  | - |  |  |  | - |  |  |  | - |  |  | 2025-11-13
| 0.61 |  |  |  | 11,910,424 |  |  |  | 3.0 |  |  |  | 2,277,068 |  |  |  | 6,545,496 |  |  |  | 2.0 |  |  |  | 983,815 |  |  |
The aggregate intrinsic value of the options in the preceding table represents the total pre-tax intrinsic value for stock options, with an exercise price less than the Company’s TSX closing stock price of CAD$1.04 (approximately US$0.80) as of the last trading day in the year ended December 31, 2020, that would have been received by the option holders had they exercised their options on that date. There were 11,610,424 in-the-money stock options outstanding and 6,245,496 in-the-money stock options exercisable as of December 31, 2020. The fair value of the stock options on their respective grant dates was determined using the Black-Scholes model with the following assumptions:
Stock Option Fair Value Assumptions |  | 2020 |  |  | 2019 |  |  | 2018 |
Expected forfeiture rate |  |  | 6.1 | % |  |  | 6.2 | % |  | 5.8% - 6.0% |
Expected life (years) |  |  | 3.9 |  |  |  | 3.7 |  |  | 3.7 - 3.8 |
Expected volatility |  |  | 63.2 | % |  |  | 58.6 | % |  | 54.6% - 55.0% |
Risk free rate |  |  | 0.4 | % |  |  | 1.6 | % |  | 1.9% - 2.1% |
Expected dividend rate |  |  | 0.0 | % |  |  | 0.0 | % |  |  | 0.0 | %
Black-Scholes value (CAD$) |  | $ | 0.30 |  |  | $ | 0.35 |  |  | $0.33 - $0.39 |
Restricted share units On June 24, 2010, the Company’s shareholders approved the adoption of the Company’s restricted share unit plan (the “RSU Plan”). The RSU Plan was approved most recently by our shareholders on May 2, 2019. Eligible participants under the RSU Plan include directors and employees of the Company. Granted RSUs are redeemed on the second anniversary of the grant. Upon an RSU vesting, the holder of the RSU will receive one Common Share, for no additional consideration, for each RSU held. Activity with respect to RSUs outstanding is summarized as follows:
|  |  |  |  | Weighted average |
|  | Outstanding |  |  | grant date |
Restricted Share Unit Activity |  | RSUs |  |  | fair value |
December 31, 2017 |  |  | 1,175,952 |  |  | $ | 0.65 |
Granted |  |  | 470,756 |  |  | $ | 0.71 |
Released |  |  | (621,092 | ) |  | $ | 0.63 |
Forfeited |  |  | (40,120 | ) |  | $ | 0.57 |
December 31, 2018 |  |  | 985,496 |  |  | $ | 0.67 |
Granted |  |  | 713,106 |  |  | $ | 0.61 |
Released |  |  | (542,674 | ) |  | $ | 0.68 |
December 31, 2019 |  |  | 1,155,928 |  |  | $ | 0.65 |
Granted |  |  | 737,553 |  |  | $ | 0.48 |
Released |  |  | (475,086 | ) |  | $ | 0.70 |
Forfeited |  |  | (13,433 | ) |  | $ | 0.61 |
December 31, 2020 |  |  | 1,404,962 |  |  | $ | 0.54 |
As of December 31, 2020, outstanding RSUs were as follows:
RSUs outstanding |
|  |  | Weighted- |  |  |  |  |  |  |
|  |  | average |  |  |  |  |  |  |
|  |  | remaining |  |  | Aggregate |  |  |  |
Number |  |  | contractual |  |  | intrinsic |  |  | Redemption |
of RSUs |  |  | life (years) |  |  | value |  |  | Date |
# |  |  |  |  |  | $ |  |  |  |
| 667,409 |  |  |  | 0.8 |  |  |  | 533,927 |  |  | 2021-11-05 |
| 737,553 |  |  |  | 1.9 |  |  |  | 590,042 |  |  | 2022-11-13 |
| 1,404,962 |  |  |  | 1.4 |  |  |  | 1,123,969 |  |  |  |
The fair value of restricted share units on their respective grant dates was determined using the Black-Scholes model with the following assumptions:
Restricted Share Unit Fair Value Assumptions |  | 2020 |  |  | 2019 |  |  | 2018 |
Expected forfeiture rate |  |  | 4.2 | % |  |  | 4.8 | % |  | 5.5% - 5.9% |
Grant date fair value (CAD$) |  | $ | 0.63 |  |  | $ | 0.79 |  |  | $0.91 - $0.93 |
Warrants In September 2018, the Company issued 13,062,878 warrants to purchase 6,531,439 of our Common Shares at $1.00 per full share. In August 2020, the Company issued 9,000,000 warrants to purchase 4,500,000 of our Common Shares at $0.75 per full share (see note 12). Activity with respect to warrants outstanding is summarized as follows:
|  |  |  |  | Number of |  |  |  |
|  | Outstanding |  |  | shares to be issued |  |  | Per share |
Warrant Activity |  | warrants |  |  | upon exercise |  |  | exercise price |
December 31, 2017 |  |  | 5,844,567 |  |  |  | 5,844,567 |  |  |  | 0.97 |
Issued |  |  | 13,062,878 |  |  |  | 6,531,439 |  |  |  | 1.00 |
Expired |  |  | (5,844,567 | ) |  |  | (5,844,567 | ) |  |  | 0.97 |
December 31, 2018 |  |  | 13,062,878 |  |  |  | 6,531,439 |  |  |  | 1.00 |
December 31, 2019 |  |  | 13,062,878 |  |  |  | 6,531,439 |  |  |  | 1.00 |
Issued |  |  | 9,000,000 |  |  |  | 4,500,000 |  |  |  | 0.75 |
December 31, 2020 |  |  | 22,062,878 |  |  |  | 11,031,439 |  |  |  | 0.90 |
As of December 31, 2020, the outstanding warrants were as follows:
|  |  |  |  |  | Weighted- |  |  |  |  |  |  |
|  |  |  |  |  | average |  |  |  |  |  |  |
|  |  |  |  |  | remaining |  |  | Aggregate |  |  |  |
Exercise |  |  | Number |  |  | contractual |  |  | Intrinsic |  |  |  |
price |  |  | of warrants |  |  | life (years) |  |  | Value |  |  | Expiry |
$ |  |  | # |  |  |  |  |  | $ |  |  |  |
| 1.00 |  |  |  | 13,062,878 |  |  |  | 0.7 |  |  |  | - |  |  | 2021-09-25 |
| 0.75 |  |  |  | 9,000,000 |  |  |  | 1.6 |  |  |  | 225,000 |  |  | 2022-08-04 |
| 0.90 |  |  |  | 22,062,878 |  |  |  | 1.1 |  |  |  | 225,000 |  |  |  |
The fair value of the warrants on their respective grant dates was determined using the Black-Scholes model with the following assumptions:
Warrant Fair Value Assumptions |  | 2020 |  |  | 2019 |  |  | 2018 |
Expected forfeiture rate |  |  | 0.0 | % |  |  | - |  |  |  | 0.0 | %
Expected life (years) |  |  | 2.0 |  |  |  | - |  |  |  | 3.0 |
Expected volatility |  |  | 71.2 | % |  |  | - |  |  |  | 55.2 | %
Risk free rate |  |  | 0.2 | % |  |  | - |  |  |  | 2.2 | %
Expected dividend rate |  |  | 0.0 | % |  |  | - |  |  |  | 0.0 | %
Black-Scholes value (CAD$) |  | $ | 0.26 |  |  | $ | 0.00 |  |  | $ | 0.34 |
Share-based compensation expense Stock-based compensation expense was $1.0 million, $0.8 million, and $0.9 million for the years ended December 31, 2020, 2019, and 2018, respectively. The expenses are expected to be recognized over a weighted-average remaining life of 3.0 years and 1.4 years under the Option Plan and RSU Plan, respectively As of December 31, 2020, there was approximately $1.1 million unamortized stock-based compensation expense related to the Option Plan and $0.5 million related to the RSU Plan. The expenses are expected to be recognized over a weighted-average remaining life of 3.0 years and 1.4 years under the Option Plan and RSU Plan, respectively. Cash received from stock options exercised during the years ended December 31, 2020, 2019, and 2018 was $0.1 million, $0.2 million, and $0.3 million, respectively. Fair Value Calculations The Company estimates expected future volatility based on daily historical trading data of the Company’s common shares. The risk-free interest rates are determined by reference to Canadian Treasury Note constant maturities that approximate the expected life. The Company has never paid dividends and currently has no plans to do so. Share-based compensation expense is recognized net of estimated pre-vesting forfeitures, which results in expensing the awards that are ultimately expected to vest over the expected life. Forfeitures and expected lives were estimated based on actual historical experience.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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