Current report filing

Note 8 - Stock-based Compensation

v3.19.1
Note 8 - Stock-based Compensation
 6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
8.
 Stock-based compensation:
 
(a)
 Stock options
 
Under the Company’s stock option plan, options, rights and other entitlements
may
be granted to directors, officers, employees and consultants of the Company to purchase up to a maximum of
17.5%
of the total number of outstanding common shares, estimated at
6.02
million options, rights and other entitlements as at
June 30, 2018.
Options are granted at the fair market value of the common shares on the closing trading price of the Company’s stock on the day prior to the grant if the grant is made during the trading day or the closing trading price on the day of grant if the grant is issued after markets have closed. Options vest at various rates (immediate to
four
years) and have a term of
10
years.
 
Stock option transactions for the
six
months ended
June 
30,
2018,
are summarized as follows:
 
Option numbers are in (000’s)                
        Three months ended
June 30, 2018		   Weighted
average		   Aggregate
      Options     Weighted average
exercise price		   remaining
contractual
life (years)		   Intrinsic
Value
                 
Outstanding, beginning of year    
2,344
     $
3.46
      
 
      
 
  
Granted    
2,084
      
2.96
      
 
      
 
  
Exercised    
(77
 )    
2.31
      
 
      
 
  
Expired    
-
      
-
      
 
      
 
  
Forfeited    
(18
 )    
2.01
      
 
      
 
  
Outstanding, end of the period    
4,333
      
3.16
      
8.2
     $
4,486,981
  
Exercisable, end of the period    
2,561
      
3.51
      
7.5
      
2,180,402
  
Vested and expected to vest, end of the period    
4,067
      
3.20
      
8.2
      
4,140,994
  
 
Aggregate intrinsic value represents the excess of the value of the closing stock price on the previous trading day of the respective balance sheet dates over the exercise price of the stock options. Total intrinsic value of options exercised was
$98
thousand for the
six
-month period ending
2018
and
nil
for
2017.
 
As of
June 30, 2018,
there was
$1.90
million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over an estimated weighted-average period of
1.74
years.
 
The following table presents the weighted average assumptions that were used in the Black-Scholes option pricing model to determine the fair value of stock options granted during the period, and the resultant weighted average fair values:
 
     
Six months ended
June 31, 2018
      
Six months ended
June 30, 2017
  
                 
Risk-free interest rate    
2.39
 %    
1.24
 %
Expected dividend yield    
-
      
-
  
Expected volatility    
93.9
 %    
100.2
 %
Expected life of options (in years)    
5
      
5
  
Grant date fair value   $
2.14
     $
0.81
  
 
The Company uses historical data to estimate the expected dividend yield and expected volatility of its common shares in determining the fair value of stock options. The expected life of the options represents the estimated length of time the options are expected to remain outstanding.
 
Stock options granted by the Company during the
six
months ended
June 30, 2018
vest
50%
after
one
year and
16.67%
on each of the next
three
anniversaries, except for
116,000
options which vest
50%
after
one
year and
25%
on each of the next
two
anniversaries and
850,000
options which vested immediately on the grant date.
 
(b)
 Restricted share units
 
The Company has a stock incentive plan (SIP) pursuant to which the Board
may
grant stock-based awards comprised of restricted stock units or dividend equivalents to employees, officers, consultants, independent contractors, advisors and non-employee directors of the Company. Each restricted unit is automatically redeemed for
one
common share of the Company upon vesting. The following table presents the activity under the SIP plan for the
six
months ended
June 30, 2018
the units outstanding.
 
 
    Six months ended,
June 30, 2018		   Six months ended,
June 30, 2017
      Number
(in thousands)		      
Weighted
average grant
date fair value
       Number
(in thousands)		       Weighted
average
grant date
fair value		  
Outstanding, beginning of period    
-
     $
-
      
-
     $
-
  
Granted    
-
      
-
      
150
      
1.14
  
Redeemed    
-
      
-
      
(150
 )    
1.14
  
Outstanding, end of period    
-
     $
-
      
-
     $
-
  
 
On
March 28, 2017
the Company granted
150,000
restricted share units (RSUs) with a vesting term of
three
months.
 
The grant date fair value of the
March 28, 2017
RSUs was determined as the closing value of the common shares of the Company on the Toronto Stock Exchange on the date prior to the date of grant.
 
The Company recorded share-based payment expense related to stock options and RSUs as follows:
 
    Three months ended
June 30,		   Nine months ended
June 30,
      2018       2017       2018       2017  
                                 
Research and development   $
152
     $
73
     $
518
     $
124
  
General and administrative    
363
      
376
      
2,225
      
386
  
    $
515
     $
449
     $
2,743
     $
510