17. Share-based Payments

Stock Options

During the three- and nine-month periods ended November 30, 2022, the Company granted 972,000 stock options with a weighted average exercise price of $2.68 (2021 – nil), no stock options were exercised (2021 – 17,081 with a weighted average exercise price of $0.80), no stock options were forfeited (2021 – nil), and no stock options expired (2021 – nil).

The Company applies the fair value method of accounting for stock-based compensation awards granted. Fair value is calculated based on a Black-Scholes option pricing model. There were no new issuances of stock options for the three- and nine-month periods ended November 30, 2021. The principal components of the pricing model for the stock options granted in the three-month period ended November 30, 2022 were as follows:

The total number of stock options outstanding as at November 30, 2022 was 2,542,000 (2021 – 1,570,000) with a weighted average exercise price of $5.27 (2021 - $6.87), of which 1,670,000 were exercisable (2021 – 1,286,667) with a weighted average exercise price of $6.84 (2021 – $7.48).

During the three-month periods ended November 30, 2022 and 2021, stock-based compensation expense attributable to stock options amounted to $551,363 and $311,004, respectively. During the nine-month periods ended November 30, 2022 and 2021, stock-based compensation expense attributable to stock options amounted to $1,180,963 and $1,203,975, respectively, and is included in operating expenses.

Restricted Stock Units

During the three-month period ended November 30, 2022, the Company granted no restricted stock units (“RSUs”) (2021 – 62,638 with a weighted average fair value of $13.64), settled 38,878 RSUs (2021 – 200,000) with a weighted average fair value of $13.08 (2021 – $0.80), and 53,037 RSUs were forfeited (2021 – 17,988) with a weighted average fair value of $13.40 (2021 – $8.73).

During the nine-month period ended November 30, 2022, the Company granted 151,605 restricted stock units (“RSUs”) (2021 – 349,580) with a weighted average fair value of $5.14 (2021 – $10.16), settled 51,531 RSUs (2021 – 231,660) with a weighted average fair value of $13.07 (2021 – $1.90), and 81,838 RSUs were forfeited (2021 – 313,512) with a weighted average fair value of $11.74 (2021 – $7.97).

The Company applies the fair value method of accounting for awards granted through the issuance of restricted stock units. Fair value is calculated based on the closing share price at grant date multiplied by the number of restricted stock unit awards granted.

The total number of RSUs outstanding as at November 30, 2022 was 4,036,803 (2021 – 4,014,928), of which 1,563,497 were vested (2021 – 525,313).

During the three-month periods ended November 30, 2022 and 2021, stock-based compensation attributable to RSUs amounted to $322,802 and $331,005, respectively, and is included in expenses.

During the nine-month periods ended November 30, 2022 and 2021, stock-based compensation attributable to RSUs amounted to $8,788,190 and $157,769, respectively, and is included in operating expenses. During the nine-month period ended November 30, 2022, the Company recorded a stock-based compensation expense of $7,740,000 related to the achievement of a performance milestone for 1,000,000 RSUs granted to the Company’s CEO (Note 13). During the nine-month period ended November 30, 2021, the Company recorded a reversal of expenses for forfeitures for a total of $963,022

Stock-Based Compensation Expenses

During the three-month periods ended November 30, 2022 and 2021, stock-based compensation included in research and development expenses amounted to $455,013 and $362,435, respectively, and in general and administrative expenses amounted to $419,152 and $279,574, respectively.

During the nine-month periods ended November 30, 2022 and 2021, stock-based compensation included in research and development expenses amounted to $1,170,554 and $1,152,506, respectively, and in general and administrative expenses amounted to $8,798,599 and $209,236, respectively. The amount recorded in general and administrative expenses for the nine-month period ended November 30, 2022 includes $7,740,000 related to the achievement of a performance milestone for 1,000,000 RSUs granted to the Company’s CEO (Note 13). Stock-based compensation included in general and administrative expenses in the nine-month period ended November 30, 2021 includes reversal of expenses for forfeitures for a total of $935,837.