12. 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 224,699,621 shares and 216,782,694 shares were issued and outstanding as of December 31, 2022, and December 31, 2021, respectively.

In August 2020, the Company closed a $4.68 million registered direct offering of 9,000,000 common shares and accompanying one-half common share warrants to purchase up to 4,500,000 common shares, at a combined public offering price of $0.52 per common share and accompanying warrant, with gross proceeds to the Company of $4.68 million. After fees and expenses of $0.4 million, net proceeds to the Company were $4.3 million. The warrants had an exercise price of $0.75 per whole common share and were all exercised prior to expiry in August 2022. Because the warrants were priced in U.S. dollars and the functional currency of Ur-Energy Inc. is Canadian dollars, this created a derivative financial liability. The fair value of the liability was recorded and adjusted monthly using the Black-Scholes technique described herein as there is no active market for the warrants. Any gain or loss was reflected in net income for the period.

During the year ended December 31, 2020, the Company sold 259,640 common shares through its At Market facility for $0.1 million, net of issue costs. The Company also received $0.1 million from the exercise of 159,982 stock options and exchanged 356,071 common shares for vested RSUs.

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. 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. The warrants have an exercise price of $1.35 per whole common share and will expire in February 2024. Because the warrants are priced in U.S. dollars and the functional currency of Ur-Energy Inc. is Canadian dollars, this creates a derivative financial liability. The fair value of the liability is recorded and adjusted monthly using the Black-Scholes technique described herein as there is no active market for the warrants. Any gain or loss is reflected in net income for the period.

During the year ended December 31, 2021, the Company sold 19,151,457 common shares through its At Market facility for $33.4 million. After issue costs of $0.8 million, net proceeds to the Company were $32.6 million. The Company also received $6.9 million from the exercise of 14,050,920 warrants for 7,025,460 underlying common shares, and $1.8 million from the exercise of 2,929,101 stock options. The Company also exchanged 492,394 common shares for vested RSUs.

During the year ended December 31, 2022, the Company sold 2,231,930 common shares through its At Market facility for $3.8 million. After issue costs of $0.1 million, net proceeds to the Company were $3.7 million. The Company also received $2.9 million from the exercise of 7,638,000 warrants for 3,819,000 underlying common shares, and $0.9 million from the exercise of 1,308,625 stock options. The Company also exchanged 557,372 common shares for vested RSUs.

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: one-third on the first anniversary, one-third on the second anniversary, and one-third on the third anniversary of the grant. The term of the options is five years.

Activity with respect to stock options outstanding is summarized as follows:

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

We received $0.9 million, $1.8 million, and $0.1 million from options exercised in the years ended December 31, 2022, 2021, and 2020, respectively.

Stock-based compensation expense from stock options was $0.8 million, $0.7 million, and $0.6 million for the years ended December 31, 2022, 2021, and 2020, respectively.

As of December 31, 2022, there was approximately $0.6 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 1.6 years under the Option Plan.

As of December 31, 2022, outstanding stock options were as follows:

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 of CAD$1.57 (approximately US$1.15) as of the last trading day in the year ended December 31, 2022, that would have been received by the option holders had they exercised their options on that date. There were 8,399,904 in-the-money stock options outstanding and 6,856,772 in-the-money stock options exercisable as of December 31, 2022.

The fair value of the options on their respective grant dates was determined using the Black-Scholes model with the following assumptions:

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”). Amendments to the RSU Plan were approved by our shareholders on June 3, 2021, and the plan is now known as the Amended and Restated Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”). The RSU&EI Plan was approved most recently by our shareholders on June 2, 2022.

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 outstanding is summarized as follows:

Stock-based compensation expense from RSUs was $0.3 million, $0.4 million, and $0.3 million for the years ended December 31, 2022, 2021, and 2020, respectively.

As of December 31, 2022, there was approximately $0.1 million of 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 0.7 years under the RSU&EI Plan.

As of December 31, 2022, outstanding RSUs were as follows:

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

Warrants

In September 2018, the Company issued 13,062,878 warrants to purchase 6,531,439 of our common shares at $1.00 per whole common share. In August 2020, the Company issued 9,000,000 warrants to purchase 4,500,000 of our common shares at $0.75 per whole common share. In February 2021, the Company issued 16,930,530 warrants to purchase 8,465,265 of our common shares at $1.35 per whole common share.

Activity with respect to warrants outstanding is summarized as follows:

We received $2.9 million and $6.9 million from warrants exercised in the years ended December 31, 2022, and 2021, respectively. No warrants were exercised in the year ended December 31, 2020. The unexercised portion of the 2018 warrants expired in 2021.

As of December 31, 2022, the outstanding warrants were as follows:

Fair value calculations of stock options, restricted share units, and warrants

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 Benchmark Bond Yield rates with maturities that approximate the expected life. The Company has never paid dividends and currently has no plans to do so. Forfeitures and expected lives were estimated based on actual historical experience.

Share-based compensation expense related to stock options and restricted share units is recognized net of estimated pre-vesting forfeitures, which results in expensing the awards that are ultimately expected to vest over the expected life.