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 194,798,105 shares and 170,253,752 shares were issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

On February 4, 2021, the Company closed an underwritten public offering of 14,722,200 common shares and accompanying warrants to purchase up to 7,361,100 common shares, at a combined public offering price of $0.90 per common share and accompanying warrant. The warrants will have an exercise price of $1.35 per whole common share and will expire three years from the date of issuance. Ur-Energy also granted the underwriters a 30-day option to purchase up to an additional 2,208,330 common shares and warrants to purchase up to 1,104,165 common shares on the same terms. The option was exercised in full. Including the exercised option, Ur-Energy issued a total of 16,930,530 common shares and 16,930,530 warrants to purchase up to 8,465,265 common shares. The gross proceeds to Ur‑Energy from this offering were approximately $15.2 million. After fees and expenses of $1.3 million, net proceeds to the Company were approximately $13.9 million.

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 is summarized as follows:

 Stock Option Activity

December 31, 2020

Exercised

Forfeited

June 30, 2021

The exercise price of a new grant is set at the closing price for the shares on the Toronto Stock Exchange (TSX) on the trading day immediately preceding the grant date and there is no intrinsic value as of the date of grant.

We received $1.2 million from options exercised in the six months ended June 30, 2021. No options were exercised in the six months ended June 30, 2020.

Stock-based compensation expense from stock options was $0.3 million and $0.3 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, there was approximately $0.8 million unamortized stock-based compensation expense related to the Option Plan. The expenses are expected to be recognized over the remaining weighted-average vesting period of 1.9 years under the Option Plan.

As of June 30, 2021, outstanding stock options are as follows:

 Exercise

 price

$

0.59

2021-12-16

0.59

2022-09-07

0.73

2022-12-15

0.62

2023-03-30

0.75

2023-08-20

0.73

2023-12-14

0.64

2024-11-05

0.51

2025-11-13

0.62

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 as of the last trading day in the six months ended June 30, 2021 (approximately US$1.40), that would have been received by the option holders had they exercised their options on that date. There were 9,807,551 in-the-money stock options outstanding and 4,728,345 in-the-money stock options exercisable as of June 30, 2021.

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

Expected forfeiture rate

5.8% - 6.0

%

5.3% - 6.0

%

Expected life (years)

3.7 - 3.8

Expected volatility

53.8% - 55.0

%

56.0% - 57.5

%

Risk free rate

1.9% -2.1

%

1.0% - 1.6

%

Expected dividend rate

Black-Scholes value (CAD$)

$0.33 - $0.39

$0.32 - $0.44

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”), as subsequently amended. The RSU Plan was approved by our shareholders most recently on May 2, 2019. Amendments to the RSU Plan were approved by our shareholders on June 3, 2021, and the plan is now known as the Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”).

Eligible participants under the RSU&EI 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 is summarized as follows:

 Restricted Share Unit Activity

December 31, 2020

 Forfeited

June 30, 2021

Stock-based compensation expense from RSUs was $0.2 million and $0.2 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, there was approximately $0.3 million unamortized stock-based compensation expense related to the RSU&EI Plan. The expenses are expected to be recognized over the remaining weighted-average vesting periods of 1.1 years under the RSU&EI Plan.

As of June 30, 2021, outstanding RSUs are as follows:

RSUs outstanding

 Number

 of RSUs

#

2021-11-05

2022-11-13

The fair value of restricted share units on their respective grant dates was determined using the Intrinsic Value Method with the following assumptions:

Restricted Share Unit Fair Value Assumptions

Expected forfeiture rate

Grant date fair value (CAD$)

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. In February 2021, the Company issued 16,930,530 warrants to purchase 8,465,265 of our Common Shares at $1.35 per full share.

The following represents warrant activity during the period ended June 30, 2021:

Warrant Activity

December 31, 2020

Issued

Exercised

June 30, 2021

 Exercise

 price

$

1.00

2021-09-25

0.75

2022-08-04

1.35

2024-02-04

1.11

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

Expected forfeiture rate

Expected life (years)

Expected volatility

Risk free rate

Expected dividend rate

Black-Scholes value (CAD$)

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.