7. SHAREHOLDERS’ EQUITY

Stock-based compensation

As of March 31, 2026, the Company had 2,685,000 issued and outstanding stock options that were issued under the 10% Rolling Stock Option Plan, as amended and restated (the “2011 Plan”) and 820,000 issued and outstanding stock options that were issued under its 2022 Equity Incentive Plan (the “2022 Plan”).

The 2011 Plan was replaced in 2022 by the 2022 Plan and, as such, no additional stock options can be granted under the 2011 Plan. The maximum term of any stock option grant under the 2011 Plan was 10 years.

Under the 2022 Plan, as approved by the Company’s shareholders at the annual meeting of shareholders on August 23, 2022, the Board of Directors (the “Board”) is authorized to grant stock options, stock appreciation rights, restricted stock units, performance stock units and other cash and share-based awards to eligible directors, officers, employees, or consultants up to a maximum of 17,236,689 common shares. The maximum term of any grant under the 2022 Plan is 10 years.

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The following table summarizes the Company’s stock option activity for each of the three months ended March 31, 2026 and 2025:

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On January 28, 2026, being the exercise date, the 200,000 options exercised during the three months ended March 31, 2026, had an intrinsic value of $108.

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The following table summarizes the intrinsic value and weighted average remaining life for stock options as of March 31, 2026:

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Stock-based compensation expense is included in corporate administration expenses within the Company’s interim condensed consolidated statements of operations. For the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense of $nil and $4, respectively.  

As of March 31, 2026, all outstanding stock options are fully vested and exercisable.

2026 Rights Offering

On March 4, 2026, the Company completed the 2026 Rights Offering for gross proceeds of $30,968 in which each holder of the Company’s common shares as of the record date of January 30, 2026, was eligible to participate. Terms of the 2026 Rights Offering included the issuance of twenty-five hundredths (or 0.25) of a subscription right for each common share owned by each holder on the record date, with each subscription right entitling the holder to purchase one common share of the Company at a subscription price of $0.24 per share (the “Basic Subscription Privilege”). For any holder exercising its Basic Subscription Privilege in full, the holder could also exercise an oversubscription privilege to purchase additional common shares that were unsubscribed for at the expiration of the 2026 Rights Offering, subject to availability and pro rata allocation of shares among persons exercising the oversubscription privilege. The 2026 Rights Offering, which generated $30,478 in net proceeds after deducting $490 in transactions costs, resulted in the issuance of 129,033,678 common shares of the Company.

The net proceeds from the 2026 Rights Offering will be used to support (i) the continued operation of the Demonstration Plant; (ii) the advancement of projects for the as-constructed Demonstration Plant beyond the current neodymium/praseodymium (Nd/Pr) separation objectives, including applying the technology to the separation of heavy REEs (“HREEs”) and to third-party feed sources; (iii) the completion of federal and state permitting and licensing for the Bear Lodge REE Project; and (iv) for other general corporate purposes.

Loss per Share

After adjustment for the bonus element included in the 2026 Rights Offering (see Note 2), the weighted average number of shares outstanding used in the Company’s loss per share calculations for the three months ended March 31, 2026 increased from 553,548,886 shares to 623,924,888 shares and for the three months ended March 31, 2025 from 516,114,475 shares to 586,505,290 shares.