Stock-based Compensation Plans
 9 Months Ended
Nov. 30, 2018
Notes to Financial Statements  
Note 8. Stock-based Compensation Plans

Equity Incentive Plan

 

On July 6, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”). A total of 3,000,000 shares of common stock were reserved for issuance under the Plan with annual automatic share reserve increases amounting to the lessor of (i) 1,500,000 shares, (ii) 5% of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) or such number of shares determined by the Administrator of the Plan. 1,264,102 units were issued under the plan in the year ended February 28, 2018 and the balance of units available for issuance under the Plan at February 28, 2018 was 1,735,898.

    

At November 30, 2018, total number of shares available for issuance, net of shares issued, forfeited and expired amounted to 3,271,496. The table below summarizes activity in the number of shares available for issuance under the Plan for the nine months ended November 30, 2018:

 

For the nine months ended November 30, 2018   Number of units available for issuance  
Balance, February 28, 2018     1,735,898  
Automatic share reserve increase     1,500,000  
Units granted     (116,027 )
Units forfeited     101,625  
Units expired     50,000  
Balance, November 30, 2018     3,271,496  

 

Warrants

 

The following table summarizes the continuity of the Company’s warrants during the nine months ended November 30:

 

    2018     2017  
   

Number of

warrants

    Weighted average exercise price    

Number of

warrants

     Weighted average exercise price  
Outstanding, beginning of period     2,515,248     $ 8.21       1,647,670     $ 2.91  
Granted     13,209       11.52       2,310,000       9.23  
Exercised     (20,000 )     0.80       (213,770 )     5.52  
Forfeited     (100,000 )     5.25       (515,418 )     4.95  
Expired     (62,500 )     4.80       (543,900 )     5.86  
Outstanding, end of period     2,345,957     $ 8.44       2,684,582     $ 7.16  
Exercisable, end of period     1,206,081     $ 8.15       966,250     $ 4.90  

 

The following table summarizes information concerning outstanding warrants as at November 30:

 

      2018     2017  
Exercise price    

Number of warrants

outstanding

    

Weighted average

remaining life

    

Number of

warrants outstanding

    

Weighted average

remaining life

  
$ 0.80       582,081       7.00       912,082       6.21  
$ 3.00       -       -       12,500       0.50  
$ 5.25       380,000       8.74       530,000       9.74  
$ 11.52       13,209       9.61       -       -  
$ 12.00       840,667       7.34       700,000       9.79  
$ 13.49       250,000       8.88       250,000       9.88  
$ 13.89       280,000       0.07       280,000       9.94  
Outstanding, end of period       2,345,957       6.79       2,684,582       7.51  
Exercisable, end of period       1,206,081       6.74       966,250       7.54  

 

Warrants were valued using the Black-Scholes pricing model. The following table shows key inputs into the valuation model for the nine months ended November 30:

 

    2018     2017  
Exercise price   $ 11.52     $ 5.25 to 13.89  
Risk-free interest rate     2.82%     1.46 to 2.15%  
Expected dividend yield     0%       0%  
Expected volatility     78%     80% to 94%  
Expected life   6.5 years     3 to 6 years  

 

During the three and nine months ended November 30, 2018, an expense of $0.8 million and $2.6 million, respectively (2017 – $4.3 million and $5.2 million, respectively) was recorded in the condensed consolidated statement of operations in relation to warrants.

    

Restricted Stock Units

 

The following table summarizes the continuity of the restricted stock units (“RSUs”) during the three months ended November 30:

 

    2018     2017  
    Number of RSUs     Number of RSUs  
Outstanding, beginning of period     34,102       -  
Granted     102,818       34,102  
Vested     (35,797 )     -  
Forfeited     (1,625 )     -  
Outstanding, end of period     99,498       34,102  
Weighted average remaining life (in years)     1.96       0.50  

 

During the three and nine months ended November 30, 2018, an expense of $0.2 million and $0.6 million, respectively (2017 – $0.1 million and $0.1 million, respectively) was recorded in the condensed consolidated statement of operations in relation to RSUs.