Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document And Entity Information | ' |
Entity Registrant Name | 'Tribute Pharmaceuticals Canada Inc. |
Entity Central Index Key | '0001159019 |
Document Type | '10-Q |
Document Period End Date | 30-Sep-13 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--12-31 |
Is Entity a Well-known Seasoned Issuer? | 'No |
Is Entity a Voluntary Filer? | 'No |
Is Entity's Reporting Status Current? | 'Yes |
Entity Filer Category | 'Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 51,081,238 |
Document Fiscal Period Focus | 'Q3 |
Document Fiscal Year Focus | '2013 |
CONDENSED_INTERIM_CONSOLIDATED
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (CAD) | Sep. 30, 2013 | Dec. 31, 2012 |
ASSETS | ' | ' |
Cash and cash equivalents | 2,749,234 | 2,283,868 |
Accounts receivable, net of allowance of $nil (December 31, 2012 - $nil) | 1,308,868 | 1,205,087 |
Inventories (Note 2) | 1,142,500 | 1,000,557 |
Taxes recoverable | 545,326 | 261,400 |
Loan receivable | 15,814 | 15,814 |
Prepaid expenses and other receivables (Note 3) | 403,181 | 118,910 |
Current portion of debt issuance costs, net (Note 6) | 82,908 | 185,403 |
Total current assets | 6,247,831 | 5,071,039 |
Property, plant and equipment, net (Note 4) | 1,112,236 | 1,159,375 |
Intangible assets, net (Note 5) | 9,949,193 | 10,883,179 |
Goodwill | 3,599,077 | 3,599,077 |
Debt issuance costs, net (Note 6) | 266,566 | 115,862 |
Total assets | 21,174,903 | 20,828,532 |
LIABILITIES | ' | ' |
Accounts payable and accrued liabilities | 3,242,485 | 5,455,664 |
Current portion of long term debt (Note 6) | ' | 1,305,840 |
Warrant liability (Note 7c) | 4,078,296 | 202,213 |
Total current liabilities | 7,320,781 | 6,963,717 |
Long term debt (Note 6) | 5,617,124 | 1,815,791 |
Deferred tax liability (Note 13) | ' | 314,900 |
Total liabilities | 12,937,905 | 9,094,408 |
SHAREHOLDERS EQUITY | ' | ' |
AUTHORIZED Unlimited non-voting, convertible redeemable and retractable preferred shares with no par value Unlimited common shares with no par value ISSUED (Note 7a) Common shares 51,081,238 (December 31, 2012 - 39,610,042) | 19,950,384 | 17,589,957 |
Additional paid-in capital options (Note 7b) | 2,296,205 | 1,867,723 |
Deficit | -14,009,591 | -7,723,556 |
Total shareholders equity | 8,236,998 | 11,734,124 |
Total liabilities and shareholders equity | 21,174,903 | 20,828,532 |
CONDENSED_INTERIM_CONSOLIDATED1
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
Shareholders Equity | ' | ' | ' |
Common Shares Authorized | 51,081,238 | 50,972,542 | 39,610,042 |
CONDENSED_INTERIM_CONSOLIDATED2
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS COMPREHENSIVE (LOSS) INCOME AND DEFICIT (Unaudited) (CAD) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenues | ' | ' | ' | ' |
Licensed domestic product net sales | 2,242,333 | 2,267,509 | 6,378,621 | 6,104,160 |
Other domestic product sales | 790,362 | 576,174 | 2,618,710 | 1,707,336 |
International product sales | 347,551 | 369,816 | 1,037,103 | 1,193,219 |
Royalty and licensing revenues | 99,884 | ' | 197,924 | ' |
Total revenues (Note 14) | 3,480,130 | 3,213,499 | 10,232,358 | 9,004,715 |
Cost of Sales | ' | ' | ' | ' |
Licensor sales and distribution fees | 1,501,243 | 1,526,690 | 4,262,968 | 4,226,247 |
Cost of products sold | 409,358 | 327,582 | 1,232,701 | 922,983 |
Total Cost of Sales | 1,910,601 | 1,854,272 | 5,495,669 | 5,149,230 |
Gross profit | 1,569,529 | 1,359,227 | 4,736,689 | 3,855,485 |
Expenses | ' | ' | ' | ' |
Selling, general and administrative (Notes 12 and 15) | 2,224,457 | 21,231,379 | 7,681,179 | 6,240,007 |
Amortization of assets (non-manufacturing property, plant and equipment) | 313,635 | 155,807 | 977,693 | 380,270 |
Total operating expenses | 2,538,092 | 2,287,186 | 8,658,872 | 6,620,277 |
(Loss) from operations | -968,563 | -927,959 | -3,922,183 | -2,764,792 |
Non-operating income (expenses) | ' | ' | ' | ' |
Change in warrant liability (Note 7c) | -660,325 | 66,183 | -1,510,800 | 203,396 |
Cost of extending the warrant expiration | ' | ' | ' | 135,157 |
Change in fair value of contingent consideration | ' | ' | ' | 79,724 |
Research and development | ' | -6,590 | ' | -14,916 |
Accretion expense | -20,895 | -45,826 | -68,123 | -100,193 |
Loss on disposal of intangible asset (Note 5) | -161,200 | ' | -1,261,200 | ' |
Loss on extinguishment of loan (Note 6) | -620,835 | ' | -620,835 | ' |
Interest income | 268 | 12,150 | 2,235 | 12,150 |
Interest expense | -152,026 | -103,551 | -320,029 | -158,175 |
Loss and comprehensive loss before tax | -2,583,576 | -1,005,593 | -6,600,935 | -2,877,963 |
Current income tax recovery | ' | 71,153 | ' | 71,153 |
Deferred income tax recovery (Note 13) | ' | 215,800 | 314,900 | 730,440 |
Net loss and comprehensive loss for the period | -2,583,576 | -718,640 | -6,286,035 | -2,076,410 |
Deficit, beginning of period | -11,426,015 | -5,732,360 | -7,723,556 | -4,374,590 |
Deficit, end of period | -14,009,591 | -6,451,000 | -14,009,591 | -6,451,000 |
Loss per share (Note 8) - Basic and diluted | -0.05 | -0.02 | -0.13 | -0.05 |
CONDENSED_INTERIM_CONSOLIDATED3
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (CAD) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from (used in) operating activities | ' | ' |
Net (loss) | -6,286,035 | -2,076,410 |
Items not affecting cash: | ' | ' |
Deferred income tax recovery | -314,900 | -730,440 |
Amortization | 995,758 | 412,490 |
Change in warrant liability (Note 7c) | 1,510,800 | -203,396 |
Cost of extending the warrant expiration | ' | 135,157 |
Change in fair value of contingent consideration | ' | -79,724 |
Loss on extinguishment of loan | 620,835 | ' |
Loss on disposal of intangible asset | 161,200 | ' |
Stock-based compensation (Note 7b) | 428,482 | 460,332 |
Accretion expense | 68,123 | 100,193 |
Change in non-cash operating assets and liabilities (Note 9) | -2,629,186 | -249,493 |
Cash flows (used in) operating activities | -5,444,922 | -2,231,251 |
Cash flows from (used in) investing activities | ' | ' |
Additions to property, plant and equipment | -25,562 | -32,489 |
Payment of contingent liabilities | -460,000 | ' |
Increase in intangible assets | ' | -32,270 |
Increase in patents and licensing agreements | -13,180 | -425,000 |
Cash flows from (used in) investing activities | -498,742 | -489,759 |
Cash flows from (used in) financing activities | ' | ' |
Financing costs deferred | -305,227 | -343,934 |
Long term debt issued | 6,084,437 | 3,500,000 |
Units issued (Note 7a) | 4,713,787 | ' |
Long term debt repayment | -3,386,630 | ' |
Debt extinguishment costs | -348,420 | ' |
Share issuance costs | -433,871 | ' |
Cash flows from (used in) financing activities | 6,324,076 | 3,156,066 |
Changes in cash and cash equivalents | 380,412 | 435,056 |
Change in cash due to changes in foreign exchanges | 84,954 | -54,378 |
Cash and cash equivalents, beginning of period | 2,283,868 | 2,227,973 |
Cash and cash equivalents, end of period | 2,749,234 | 2,608,651 |
1_Basis_of_Presentation
1. Basis of Presentation | 9 Months Ended | ||
Sep. 30, 2013 | |||
Accounting Policies [Abstract] | ' | ||
1. Basis of Presentation | ' | ||
These unaudited condensed interim financial statements should be read in conjunction with the financial statements for Tribute Pharmaceuticals Canada Inc.’s (formerly Stellar Pharmaceuticals Inc.) ("Tribute" or the "Company") most recently completed fiscal year ended December 31, 2012. These condensed interim financial statements do not include all disclosures required in annual financial statements, but rather are prepared in accordance with recommendations for interim financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These unaudited condensed interim financial statements have been prepared using the same accounting policies, and methods as those used by the Company in the annual audited financial statements for the year ended December 31, 2012, except when disclosed below. | |||
The unaudited condensed interim financial statements contain all adjustments (consisting of only normal recurring adjustments) which are necessary to present fairly the financial position of the Company as at September 30, 2013, and the results of its operations for the three and nine month periods ended September 30, 2013 and 2012 and its cash flows for the nine month periods ended September 30, 2013 and 2012. Note disclosures have been presented for material updates to the information previously reported in the annual audited financial statements. | |||
a) | Estimates | ||
The preparation of these financial statements has required management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of the revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to provision for doubtful accounts, accrued liabilities, income taxes, stock based compensation, revenue recognition and intangible assets. The Company bases its estimates on historical experiences and on various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. As adjustments become necessary, they are reported in earnings in the period in which they become known. | |||
b) | Recently Adopted Accounting Standards | ||
On January 1, 2013, the Company adopted the accounting standard set out below. | |||
In July 2012, the FASB issued an accounting standards update that gives an entity the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. This guidance will be effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, which will be the Company's 2013 fiscal year. The adoption of this guidance did not have a material impact on the Company’s financial statements. | |||
2_Inventories
2. Inventories | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
2. Inventories | ' | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Raw materials | $ | 306,428 | $ | 215,332 | ||||
Finished goods | 353,695 | 284,147 | ||||||
Packaging materials | 61,099 | 91,476 | ||||||
Work in process | 421,278 | 409,602 | ||||||
$ | 1,142,500 | $ | 1,000,557 |
3_Prepaid_Expenses_and_Other_R
3. Prepaid Expenses and Other Receivables | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
3. Prepaid Expenses and Other Receivables | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Prepaid operating expenses | $ | 219,143 | $ | 113,735 | |||||
Deposits | 178,188 | - | |||||||
Interest receivable on loan receivables | 5,850 | 5,175 | |||||||
$ | 403,181 | $ | 118,910 | ||||||
4_Property_Plant_and_Equipment
4. Property, Plant and Equipment | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||||
4. Property, Plant and Equipment | ' | ||||||||||||
30-Sep-13 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Land | $ | 90,000 | $ | - | $ | 90,000 | |||||||
Building | 618,254 | 262,158 | 356,096 | ||||||||||
Leasehold improvements | 10,359 | 2,072 | 8,287 | ||||||||||
Office equipment | 61,308 | 47,259 | 14,049 | ||||||||||
Manufacturing equipment | 1,103,525 | 568,217 | 535,308 | ||||||||||
Warehouse equipment | 17,085 | 16,571 | 514 | ||||||||||
Packaging equipment | 111,270 | 50,175 | 61,095 | ||||||||||
Computer equipment | 128,880 | 81,993 | 46,887 | ||||||||||
$ | 2,140,681 | $ | 1,028,445 | $ | 1,112,236 | ||||||||
31-Dec-12 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Land | $ | 90,000 | $ | - | $ | 90,000 | |||||||
Building | 618,254 | 238,973 | 379,281 | ||||||||||
Leasehold improvements | 10,359 | 518 | 9,841 | ||||||||||
Office equipment | 61,315 | 44,137 | 17,178 | ||||||||||
Manufacturing equipment | 1,103,523 | 541,880 | 561,643 | ||||||||||
Warehouse equipment | 17,085 | 15,989 | 1,096 | ||||||||||
Packaging equipment | 111,270 | 42,302 | 68,968 | ||||||||||
Computer equipment | 103,313 | 71,945 | 31,368 | ||||||||||
$ | 2,115,119 | $ | 955,744 | $ | 1,159,375 |
5_Intangible_Assets
5. Intangible Assets | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||
5. Intangible Assets | ' | ||||||||||||
30-Sep-13 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Patents | $ | 248,621 | $ | 36,692 | $ | 211,929 | |||||||
Licensing asset | 1,005,820 | 77,371 | 928,449 | ||||||||||
Licensing agreements | 10,004,000 | 1,195,185 | 8,808,815 | ||||||||||
$ | 11,258,441 | $ | 1,309,248 | $ | 9,949,193 | ||||||||
31-Dec-12 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Patents | $ | 235,441 | $ | 28,139 | $ | 207,302 | |||||||
Licensing asset | 1,005,820 | 19,343 | 986,477 | ||||||||||
Licensing agreements | 10,212,000 | 522,600 | 9,689,400 | ||||||||||
$ | 11,453,261 | $ | 570,082 | $ | 10,883,179 | ||||||||
The Company recorded a loss of $161,200 on intangible assets during the nine month period ended September 30, 2013, due to the termination of the Gelfoam promotion and marketing agreement. | |||||||||||||
Amortization expense of intangible assets for the three and nine month periods ended September 30, 2013 were $260,852 and $785,966 (2012 - $85,202 and $258,005). | |||||||||||||
The Company has patents pending of $95,034 at September 30, 2013 (December 31, 2012 - $81,854). |
6_Long_Term_Debt_and_Debt_Issu
6. Long Term Debt and Debt Issuance Costs | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||
6. Long Term Debt and Debt Issuance Costs | ' | |||||||||||
On May 11, 2012, the Company entered into a loan and security agreement (the "MidCap Loan Agreement") with MidCap Funding III, LLC (the "Lender" or "MidCap") for a 36 month term loan that is due May 11, 2015. The term loan allowed for a total advancement of US$6,000,000 ($6,170,935). An amount of US$3,500,000 ($3,554,743) was drawn on execution of the MidCap Loan Agreement and the remainder was available to be advanced if the Company raised an amount of not less than US$6,000,000 ($6,170,935) from any combination of: an equity issuance; upfront payments associated with a pharmaceutical partnership; or upfront payments in conjunction with the acquisition or in-licensing of pharmaceutical products. The availability of advancements of the remainder of the loan expired on March 31, 2013. The MidCap Loan Agreement was secured by all assets of the Company and contained customary covenants that, among other things, generally restricted the Company’s ability to incur additional indebtedness. The Loan Agreement included a financial covenant to raise not less than US$3,000,000 ($3,046,923) by March 31, 2013 in the form of an equity raise or cash from an upfront payment associated with a pharmaceutical partnership, which was completed prior to March 31, 2013 (see Note 7a). The first six (6) payments were interest-only, with principal and interest payments due monthly thereafter. Interest was calculated at the higher of 4% or the thirty (30) day London Inter Bank Offered Rate ("LIBOR") plus 7%. Pursuant to the below Credit Agreement, the Loan agreement with MidCap Funding III, LLC was repaid in full. | ||||||||||||
On August 8, 2013, SWK Funding LLC ("SWK"), a wholly-owned subsidiary of SWK Holdings Corporation entered into a credit agreement (the "Credit Agreement") pursuant to which the lenders party thereto provided to the Company a term loan in the principal amount of US$6,000,000 ($6,208,609) (the "Loan") which may be increased by an additional US$2,000,000 ($2,056,978) at the Company's request on or before December 31, 2014. SWK served as the agent under the Credit Agreement. The Loan matures on August 8, 2018. Interest and principal under the Loan will be paid by a Revenue Based Payment that is charged on quarterly revenues of the Company, applied in the following priority (i) first, to the payment of all fees, costs, expenses and indemnities due and owing to SWK under the Credit Agreement, (ii) second, to the payment of all fees, costs, expenses and indemnities due and owing to the lenders under the Credit Agreement, (iii) third, to the payment of all accrued but unpaid interest until paid in full; and (iv) fourth, for each quarter after August 8, 2014, to the payment of all principal under the Loan up to a maximum of US$650,000 ($668,518) in respect of any fiscal quarter. All amounts applied under the Revenue Based Payment will be made to each lender according to its pro-rata share of the Loan. The lenders will be entitled to certain additional payments in connection with repayments of the Loan, both on maturity and in connection with a prepayment or partial prepayment. Pursuant to the terms of the Credit Agreement, the Company entered into a Guaranty and Collateral Agreement granting the lenders a security interest in substantially all of the Company’s assets (the "Collateral"). The Credit Agreement contains customary affirmative and negative covenants for credit facilities of its type, including but not limited to, limiting the Company’s ability to pay dividends or make any distributions, incur additional indebtedness, grant additional liens, engage in any other line of business, make investments, merge, consolidate or sell all or substantially all of its assets and enter into transactions with related parties. The Credit Agreement also contains certain financial covenants, including, but not limited to, certain minimum net sales requirements and a requirement to maintain at least $1,000,000 of unencumbered liquid assets at the end of each fiscal quarter. The Credit Agreement includes customary events of default, including but not limited to, failure to pay principal, interest or fees when due, failure to comply with covenants, default under certain other indebtedness, certain insolvency or bankruptcy events, the occurrence of certain material judgments the institution of any proceeding by a government agency or a change of control of the Company. The obligations under the Credit Agreement to repay the Loan may be accelerated upon the occurrence of an event of default under the Credit Agreement. A 4% agent fee on the above mentioned transaction was paid on the amounts borrowed above US$3,500,000 ($3,599,712). | ||||||||||||
The Loan shall accrue interest at an annual rate of 11.5% plus the Libor Rate (as defined in the Credit Agreement), with the Libor Rate being subject to a minimum floor of 2%, such that that minimum interest rate is 13.5%. In the event of a change of control, a merger or a sale of all or substantially all of the Company’s assets, the Loan shall be due and payable. | ||||||||||||
In connection with the MidCap Loan Agreement, the Company granted warrants to purchase an aggregate of 750,000 common shares in the capital of the Company at an exercise price of US$0.56 ($0.58). The grant date fair value of the warrants was $312,000. Of this amount, $208,000 for 500,000 warrants was recorded as a warrant liability, with an equal amount recorded as a discount to the carrying value of the loan in the accompanying financial statements. The remaining $104,000 was in respect of 250,000 warrants which were granted for compensation of the transaction and has been classified as debt issuance costs and recorded as a warrant liability. In connection with the Loan the Company issued to SWK 755,794 common share purchase warrants with each warrant entitling SWK to acquire one common share in the capital of the Company at an exercise price of US$0.5954 ($0.6124), at any time prior to August 8, 2020. The grant date fair value of the warrants was $445,794, which was recorded as warrant liability, with an equal amount recorded as a discount to the carrying value of the loan. In addition, an origination fee of US$120,000 ($124,172) was paid to SWK and treated as a discount to the carrying value of the loan. | ||||||||||||
The discount to the carrying value of the Loan is being amortized as a non-cash interest expense over the term of the Loan using the effective interest rate method. The grant date fair value of the warrants issued to MidCap was determined using the Black-Scholes model with the following assumptions: expected volatility of 124.6%, a risk-free interest rate of 1.48%, an expected life of five years, and no expected dividend yield. The grant date fair value of the warrants issued to SWK was determined using the Black-Scholes model with the following assumptions: expected volatility of 128%, a risk-free interest rate of 2.26%, an expected life of seven years, and no expected dividend yield. | ||||||||||||
During the three and nine month periods ended September 30, 2013, the Company accreted $20,895 and $68,123, respectively (2012 - $38,201 and $38,201, respectively) in non-cash accretion expense in connection with the long term loans, which is included in accretion expense on the condensed interim statements of operations, comprehensive loss and deficit. | ||||||||||||
During 2012, the Company also incurred $341,489 in financing fees and legal costs related to closing the MidCap Loan Agreement. These fees and costs were classified as debt issuance costs on the balance sheets and were being amortized as a non-cash interest expense using the effective interest rate method. Upon repayment of the MidCap Loan all financing fees and legal costs associated with the MidCap Loan not yet amortized were expensed to loss on extinguishment of loan on the condensed interim statements of operations, comprehensive loss and deficit. During 2013, the Company also incurred US$294,971 ($303,374) in financing fees and legal costs related to closing the Credit Agreement and recorded US$60,000 ($61,710) related to an exit fee payable to SWK upon the retirement of the Loan. These fees and costs were classified as debt issuance costs on the balance sheets. These assets are being amortized as a non-cash interest expense over the term of the outstanding Loan using the effective interest rate method. During the three and nine month periods ended September 30, 2013, the Company amortized $31,263 and $137,092, respectively (2012 – $58,639 and $89,936, respectively) in non-cash interest expense, which is included in amortization expense on the condensed interim statements of operations, comprehensive loss and deficit. | ||||||||||||
During the nine month period ended September 30, 2013, the Company made principal payments of US$3,281,250 ($3,386,630) (December 31, 2012 - US$218,750 ($215,185)) and interest payments of US$237,951 ($244,733) (December 31, 2012 – US$217,164 ($213,624)) under the MidCap and SWK loan agreements. The Company has estimated the following revenue-based principal and interest payments over the next five years ended December 31 based on the assumption that only the minimum revenue requirements will be met under the Credit Agreement: | ||||||||||||
Principal Payments | Interest Payments | |||||||||||
2013 | - | US$207,000 | ($212,897) | |||||||||
2014 | US$192,415 | ($197,899) | US$817,834 | ($841,143) | ||||||||
2015 | US$1,029,808 | ($1,059,158) | US$732,692 | ($753,574) | ||||||||
2016 | US$1,226,439 | ($1,261,393) | US$581,061 | ($597,621) | ||||||||
2017 | US$1,450,105 | ($1,491,417) | US$402,395 | ($413,863) | ||||||||
2018 | US$2,146,232 | ($2,207,400) | US$145,608 | ($149,758) |
7_Capital_Stock
7. Capital Stock | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Equity [Abstract] | ' | |||||||||||||
7. Capital Stock | ' | |||||||||||||
(a) | Common Shares | |||||||||||||
During the year ended December 31, 2012, the Company issued 2,000,000 common shares related to a contingent liability recorded on December 1, 2011. The difference between the fair value of these shares at December 31, 2011 and the fair value on the date of issuance was a credit of $79,724 which was recorded as a reduction of expense to the “change in fair value of contingent consideration” on the statements of operations, comprehensive loss and deficit. | ||||||||||||||
During the nine month period ended September 30, 2013, the Company completed two private placement offerings in which 11,471,196 units were issued for gross proceeds of US$4,595,000 ($4,713,787). As a part of the private placements, the Company issued 11,362,500 units at a price of US$0.40 ($0.41) per unit and granted 11,362,500 common share purchase warrants to the participants. Each unit consisted of one common share of the Company's stock and one-half of one Series A common share purchase warrant (a "Series A Warrant") and one-half of one Series B common share purchase warrant (a "Series B Warrant"). Each whole Series A Warrant entitles the holder thereof to acquire one common share of the Company at any time during the period ending 24 months after the date of issuance at a price of US$0.50 ($0.51) per common share. Each whole Series B Warrant entitles the holder thereof to acquire one common share of the Company at a price of US$0.60 ($0.62) per share at any time during the period ending 60 months after the date of issuance. The terms of the Series B Warrants provide the Company with a right to call the Series B Warrants at a price of US$0.001 per warrant if certain conditions are met including the common shares trading at a volume weighted average price for 20 out of 30 consecutive trading days at a price which exceeds US$1.20 (subject to adjustment for stock splits, recapitalizations and other corporate transactions) with average daily volume during such period of at least US$30,000. The remaining 108,696 units were issued at a price of US$0.46 ($0.47) per unit. Each unit consists of one common share of the Company’s stock and one warrant exercisable at any time during the period ending 60 months after the date of the issuance at a price of US$0.55 ($0.57). | ||||||||||||||
Directors, officers and individuals related to directors purchased 6,046,196 units for gross proceeds of US$2,425,000 ($2,412,147) pursuant to this private placement. | ||||||||||||||
In connection with the private placement, the Company paid cash commissions of US$248,219 ($252,101) and issued 345,188 Series A broker warrants and 345,188 Series B broker warrants valued at US$168,491 ($172,986). See note 7c. Each Series A broker warrant entitles the holder to purchase one common share at an exercise price of US$0.50 ($0.51) for a period of twenty four months. Each Series B broker warrant entitles the holder to purchase one common share at an exercise price of $0.60 ($0.62) for a period of 60 months after the date of issuance. Total other issuance costs associated with the private placements were $181,770. The Series B broker warrants also contain a call right similar to the Series B Warrant described above. | ||||||||||||||
Number of Shares | Amount | |||||||||||||
Balance, December 31, 2012 | 39,610,042 | $ | 17,589,957 | |||||||||||
Common shares issued | 11,362,500 | 4,662,700 | ||||||||||||
Common share purchase warrants – valuation | — | -1,723,693 | ||||||||||||
Share issuance costs | — | -428,857 | ||||||||||||
Broker warrants – valuation allocation | — | -172,986 | ||||||||||||
Balance, March 31, 2013 and June 30, 2013 | 50,972,542 | $ | 19,927,121 | |||||||||||
Common shares issued | 108,696 | 51,087 | ||||||||||||
Share issuance costs | — | -5,014 | ||||||||||||
Common share purchase warrants – valuation | — | -22,810 | ||||||||||||
Balance, September 30, 2013 | 51,081,238 | $ | 19,950,384 | |||||||||||
(b) Stock Based Compensation | ||||||||||||||
During the three and nine month periods ended September 30, 2013, there were 167,000 and 1,173,250 options granted to officers and employees of the Company (2012 – 30,000 and 275,000, respectively). The exercise price of 286,250 of these options is $0.40, with quarterly vesting terms at 25% on each of March 31, June 30, September 30 and December 31, 2014, upon achieving certain financial objectives. Since stock-based compensation is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture rate (based on historical experience and projected employee turnover) to unvested awards for the purpose of calculating compensation expense. The grant date fair value of these options was estimated as $0.33 using the Black-Scholes option pricing model, based on the following assumptions: expected dividend yield of 0%; expected volatility of 123%; risk free interest rate of 1.49%; and expected term of 5 years. | ||||||||||||||
Additionally, 720,000 options had an exercise price of $0.42, with vesting as to one-twelfth at the end of each fiscal quarter over a three year period, commencing on September 30, 2013. The grant date fair value of these options was estimated as $0.34 using the Black-Scholes option pricing model, based on the following assumptions: expected dividend yield of 0%; expected volatility of 122%; risk free interest rate of 1.84%; and expected term of 5 years. | ||||||||||||||
The remaining 167,000 options had an exercise price as follows: 150,000 at $0.53 and 17,000 at $0.39. Of these options 150,000 will vest as to one-eighth over a period of two years in equal installments at the end of every fiscal quarter starting on the first day of the first fiscal quarter following the quarter in which the performance criteria has been met. The remaining 17,000 options will vest quarterly over the next two years with the first vesting date being September 30, 2013. The weighted average grant date fair value of these options was estimated as $0.42 using the Black-Scholes option pricing model, based on the following assumptions: expected dividend yield of 0%; expected volatility of 122%; risk free interest rate of 1.89%; and expected term of 4.96 years. | ||||||||||||||
The Company’s stock-based compensation program (the "Plan") includes stock options in which some options vest based on continuous service, while others vest based on performance conditions such as profitability and sales goals. For those equity awards that vest based on continuous service, compensation expense is recorded over the service period from the date of grant. For performance-based awards, compensation expense is recorded over the remaining service period when the Company determines that achievement is probable. | ||||||||||||||
For the three and nine month periods ended September 30, 2013, the Company recorded $138,513 and $428,482, respectively (2012 – $139,909 and $460,332, respectively) as compensation expense for options previously issued to directors, officers and employees based on continuous service. This expense was recorded as selling, general and administrative expense on the condensed interim statements of operations, comprehensive loss and deficit. Due to termination of employment, 40,000 options issued to employees in 2012 and 25,000 options in 2013 were removed from the number of options issued. | ||||||||||||||
The activities in additional paid in-capital options are as follows: | ||||||||||||||
Amount | ||||||||||||||
Balance, December 31, 2012 | $ | 1,867,723 | ||||||||||||
Expense recognized for options issued to employees/directors | 428,482 | |||||||||||||
Balance, September 30, 2013 | $ | 2,296,205 | ||||||||||||
The total number of options outstanding as at September 30, 2013 was 4,320,752 (December 31, 2012 – 3,212,502). | ||||||||||||||
The maximum number of options that may be issued under the Plan is floating at an amount equivalent to 10% of the issued and outstanding common shares, or 5,108,124 shares as at September 30, 2013 (December 31, 2012 –3,961,004). | ||||||||||||||
The weighted average fair value of options expensed during the three and nine month periods ended September 30, 2013 was estimated at $0.46 and $0.48, respectively (2012 - $0.50 and $0.50, respectively). | ||||||||||||||
(c) | Warrants | |||||||||||||
As at September 30, 2013, the following warrants were outstanding: | ||||||||||||||
Number of | Weighted Average | Fair | ||||||||||||
Exercise | ||||||||||||||
Expiry Date | Warrants | Price | Value | |||||||||||
11-May-17 | 750,000 | US$0.56 | ($0.58) | $ | 271,999 | |||||||||
27-Feb-15 | 4,429,688 | US$0.50 | ($0.51) | $ | 853,450 | |||||||||
27-Feb-18 | 4,429,687 | US$0.60 | ($0.62) | $ | 1,679,517 | |||||||||
5-Mar-15 | 1,253,000 | US$0.50 | ($0.51) | $ | 238,829 | |||||||||
5-Mar-18 | 1,253,000 | US$0.60 | ($0.62) | $ | 475,075 | |||||||||
11-Mar-15 | 343,750 | US$0.50 | ($0.51) | $ | 70,125 | |||||||||
11-Mar-18 | 343,750 | US$0.60 | ($0.62) | $ | 130,333 | |||||||||
8-Aug-18 | 755,794 | US$0.60 | ($0.61) | $ | 316,375 | |||||||||
20-Sep-18 | 108,696 | US$0.55 | ($0.57) | $ | 42,593 | |||||||||
13,667,365 | US$0.55 | ($0.57) | $ | 4,078,296 | ||||||||||
In connection with a private placement offering in October 2010, the Company granted 1,500,000 warrants to the participants, each exercisable into one common share as follows: 500,000 at US$1.50 ($1.54), 500,000 at US$2.00 ($2.06) and 500,000 at US$2.50 ($2.57) each for a period of 18 months, ending on April 8, 2012. The exercise price of the 1,500,000 warrants is denominated in US dollars while the Company’s functional and reporting currency is the Canadian dollar. As a result, the fair value of the warrants fluctuates based on the current stock price, volatility, the risk free interest rate, time remaining until expiry and changes in the exchange rate between the US and Canadian dollar. On April 5, 2012, the Company granted a one year extension on these warrants and recorded $135,157 to cost of extending the warrant expiration on the condensed interim statements of operations, comprehensive loss and deficit. The fair value of these warrants on date of grant was estimated using the Black-Scholes option pricing model, based on the following assumptions: expected dividend yield of 0%; expected volatility of 107%; risk free interest rate of 1.43%; and expected term of 1 year. These warrants expired during the nine month period ended September 30, 2013. | ||||||||||||||
On May 11, 2012, the Company granted 750,000 warrants in connection with the long-term debt obligation, at an exercise price of US$0.56 ($0.58). Subsequently, the pro rata exercise price of the 1,500,000 warrants described above was adjusted due to the exercise rate of the 750,000 new warrants being lower than the original exercise price of the October 2010 warrants. The effect of this pro rata change was as follows: 500,000 at US$1.47 ($1.51), 500,000 at US$1.96 ($2.02) and 500,000 at US$2.46 ($2.53). The fair value of these warrants fluctuates based on the current stock price, volatility, the risk free interest rate, time remaining until expiry and changes in the exchange rate between the US and Canadian dollar. The fair value of the warrant liability at the date of grant was estimated using the Black-Scholes option pricing model, based on the following assumptions: expected dividend yield of 0%; expected volatility of 124%; risk free interest rate of 1.48%; and expected term of 5 years. | ||||||||||||||
In connection with the SWK Loan the Company issued to SWK 755,794 common share purchase warrants with each warrant entitling SWK to acquire one common share in the capital of the Company at an exercise price of US$0.5954 ($0.6124), at any time prior to August 8, 2020. | ||||||||||||||
In connection with a private placement offerings completed during the nine month period ended September 30, 2013, the Company granted an aggregate of 12,161,571 share purchase warrants to the participants each exercisable into one common share as follows: 6,026,438 at US$0.50 ($0.51) exercisable on or before March 11, 2015 and 6,026,437 at US$0.60 ($0.62) exercisable on or before March 11, 2018. The exercise price of the 12,052,875 warrants is denominated in US dollars while the Company’s functional and reporting currency is the Canadian dollar. As a result, the fair value of the warrants fluctuates based on the current stock price, volatility, the risk free interest rate, time remaining until expiry and changes in the exchange rate between the US and Canadian dollar. The fair value of the warrant liability at the date of grant for these warrants was $1,896,679 and was estimated using the Black-Scholes option pricing model, based on the following weighted average assumptions: expected dividend yield of 0%; expected volatility of 117.4%; risk free interest rate of 1.16%; and expected term of 3.5 years. The remaining 108,696 share purchase warrants are exercisable on or before September 20, 2018 at US$0.55 ($0.57). The fair value of the warrant liability at the date of grant for these warrants was $22,810 and was estimated using the Black-Scholes option pricing model, based on the following weighted average assumptions: expected dividend yield of 0%; expected volatility of 130.0%; risk free interest rate of 1.89%; and expected term of 5 years. | ||||||||||||||
ASC 815 "Derivatives and Hedging" indicates that warrants with exercise prices denominated in a different currency other than an entity’s functional currency should not be classified as equity. As a result, these warrants have been treated as derivatives and recorded as liabilities carried at their fair value, with period-to-period changes in the fair value recorded as a gain or loss in the condensed interim statements of operations, comprehensive loss and deficit. The Company treated the compensation warrants as a liability upon their issuance. | ||||||||||||||
As at September 30, 2013, the fair value of the warrant liability of $4,078,296 (December 31, 2012 - $202,213) was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions: expected dividend yield of 0% (December 31, 2012 – 0%) expected volatility of 117.1% (December 31, 2012 – 108.4%) risk-free interest rate of 1.58% (December 31, 2012 – 1.20%) and expected term of 3.19 years (December 31, 2012 – 1.65 years). |
8_Loss_Per_Share
8. Loss Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
8. Loss Per Share | ' | ||||||||||||||||
The treasury stock method assumes that proceeds received upon the exercise of all warrants and options outstanding in the period is used to repurchase the Company’s shares at the average share price during the period. The diluted earnings per share is not computed when the effect of such calculation is anti-dilutive. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. Potentially dilutive securities, which were not included in diluted weighted average shares for the three and nine month periods ended September 30, 2013 and September 30, 2012, consist of outstanding stock options (4,350,752 and 3,202,502, respectively) and outstanding warrant grants (13,667,365 and 2,250,000, respectively) | |||||||||||||||||
The following table sets forth the computation of (loss) per share: | |||||||||||||||||
For the Three Month Period | For the Nine Month Period | ||||||||||||||||
Ended September 30 | Ended September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net (loss) available to common shareholders | $ | (2,583,576 | ) | $ | (718,640 | ) | $ | (6,286,035 | ) | $ | (2,076,410 | ) | |||||
Denominator: | |||||||||||||||||
Weighted average number of common shares | 50,985,538 | 39,610,042 | 48,525,136 | 39,018,801 | |||||||||||||
Effect of dilutive common shares | - | - | - | - | |||||||||||||
Diluted weighted average number of common shares outstanding | 50,985,538 | 39,610,042 | 48,525,136 | 39,018,801 | |||||||||||||
(Loss) per share – basic and diluted | $ | (0.05 | ) | $ | (0.02 | ) | $ | (0.13 | ) | $ | (0.05 | ) | |||||
9_Statement_of_Cash_Flows
9. Statement of Cash Flows | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
9. Statement of Cash Flows | ' | ||||||||
Changes in non-cash balances related to operations are as follows: | |||||||||
For the Nine Months Ended September 30 | |||||||||
2013 | 2012 | ||||||||
Accounts receivable | $ | (103,781 | ) | $ | (444,232 | ) | |||
Inventories | (141,943 | ) | 111,182 | ||||||
Prepaid expenses and other receivables | (284,271 | ) | (224,855 | ) | |||||
Taxes recoverable | (283,926 | ) | (7,203 | ) | |||||
Accounts payable and accrued liabilities | (1,815,265 | ) | 315,615 | ||||||
$ | (2,629,186 | ) | $ | (249,493 | ) | ||||
During the nine month period ended September 30, 2013, there was $320,029 (2012 - $158,186) in interest paid and $nil in taxes paid (2012 – $nil). | |||||||||
During the nine month period ended September 30, 2013, there was $137,092 (2012 - $89,936) of non-cash debt issuance costs expensed as amortization of assets (see note 6). | |||||||||
During the nine month period ended September 30, 2013, broker warrants were issued with a grant date value of $172,986 (2012 - $nil). |
10_Contingencies_and_Commitmen
10. Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
10. Contingencies and Commitments | ' |
The Company has royalty, licensing and manufacturing agreements that have remained in effect for the Company during the quarter. In addition, there were no material changes to the lease agreements during the period. | |
(a) License Agreements | |
On December 1, 2011, the Company acquired 100% of the outstanding shares of Tribute Pharmaceuticals Canada Ltd. and Tribute Pharma Canada Inc. Included in this transaction were the following license agreements: | |
On June 30, 2008, Tribute signed a Sales, Marketing and Distribution Agreement with Actavis Group PTC ehf (“Actavis”) to perform certain sales, marketing, distribution, finance and other general management services in Canada in connection with the importation, marketing, sales and distribution of Bezalip® SR and Soriatane® (the “Products”). On January 1, 2010, a first amendment was signed with Actavis to grant the Company the right and obligation to more actively market and promote the Products in Canada. On March 31, 2011, a second amendment was signed with Actavis that extended the term of the agreement, modified the terms of the agreement and increased the Company’s responsibilities to include the day-to-day management of regulatory affairs, pharmacovigilance and medical information relating to the Products. The Company pays Actavis a sales and distribution fee up to an annual base-line net sales forecast plus an incremental fee for incremental net sales above the base-line. The Company agreed and fulfilled a marketing budget for the first three years of not less than $3,750,000. On May 4, 2011, the Company signed a Product Development and Profit Share Agreement with Actavis to develop, obtain regulatory approval of and market Bezalip SR in the USA. The Company shall pay US$5,000,000 to Actavis within 30 days of receipt of the regulatory approval to market Bezalip SR in the USA. | |
On November 9, 2010, the Company signed a license agreement (the "License Agreement") with Nautilus Neurosciences, Inc. (“Nautilus”) for the exclusive rights to develop, register, promote, manufacture, use, market, distribute and sell Cambia® in Canada. On August 11, 2011, the Company and Nautilus executed the first amendment to the License Agreement and on September 30, 2012 executed the second amendment to the License Agreement. The payments under this agreement include: a) US$250,000 ($257,125) upfront payment to Nautilus upon the execution of this agreement - paid; and b) the following milestone payments; i) US$750,000 ($771,375) to be paid upon the earlier of the first commercial sale of the product or six months after all regulatory approvals. As per the second amendment of the License Agreement, a payment of US$250,000 ($257,125) was paid in October 2012, while the remaining US$500,000 ($514,250) was made on March 1, 2013. Additional one-time performance based sales milestones are due as follows: i) US$250,000 ($257,125) the first year in which annual net sales exceed US$2,500,000 ($2,622,675), ii) US$500,000 ($514,250) the first year in which the annual net sales exceed US$5,000,000 ($5,142,500), iii) US$750,000 ($771,375) the first year in which the annual net sales exceed US$7,500,000 ($7,713,750), iv) US$1,000,000 ($1,028,500) the first year in which the annual net sales exceed US$10,000,000 ($10,285,000), v) US$1,500,000 ($1,542,750) the first year the annual net sales exceed US$15,000,000 ($15,427,500), and vi) US$2,000,000 ($2,057,000) the first year in which the annual net sales exceed US$20,000,000 ($20,570,000). Royalty rates are tiered and payable at rates ranging from 22.5-25.0% of net sales. The initial term of the agreement expires on September 30, 2025 but is subject to automatic renewals under certain circumstances. | |
On December 30, 2011, the Company signed a License Agreement to commercialize MycoVa in Canada. As of September 30, 2013 this product has not been filed with Health Canada and to-date no upfront payments have been paid. Within 10 days of execution of a manufacturing agreement, the Company shall pay an up-front license fee of $200,000. Upon Health Canada approval the Company shall pay $400,000. Sales milestones payments of $250,000 each are based on the achievement of aggregate net sales in increments of $5,000,000. Royalties are payable at rates ranging from 20% to 25% of net sales. | |
(b) Executive Termination Agreements | |
The Company currently has employment agreements with the provision of termination and change of control benefits with certain officers and executives of the Company. The agreements for the officers and executives provide that in the event that any of their employment is terminated during the initial term (i) by the Company for any reason other than just cause or death; (ii) by the Company because of disability; (iii) by the officer or executive for good reason; or (iv) by a change of control, the officer or executive shall be entitled to the balance of the remuneration owing for the remainder of the initial term of up to an aggregate amount of $952,200 as of September 30, 2013 (December 31, 2012 - $1,314,167) or if a change of control occurs subsequent to the initial term, while the officers or executives are employed on an indefinite basis, a lump sum payment of up to an aggregate amount of $1,527,200 (based on current base salaries). | |
11_Significant_Customers
11. Significant Customers | 9 Months Ended |
Sep. 30, 2013 | |
Risks and Uncertainties [Abstract] | ' |
11. Significant Customers | ' |
During the three month period ended September 30, 2013, the Company had two significant wholesale customers that represented 58.7% of product sales (2012 – 54.4% (two major wholesalers)). | |
During the nine month period ended September 30, 2013, the Company had two significant wholesale customers that represented 57.9% of product sales (2012 – 54.3% (two major wholesalers)). | |
The Company believes that its relationship with these customers is satisfactory. |
12_Related_Party_Transactions
12. Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
12. Related Party Transactions | ' |
Fees were paid to LMT Financial Inc. ("LMT") (a company beneficially owned by a director and former officer of the Company and his spouse) for consulting services. For the three and nine month periods ended September 30, 2013, the Company recorded and paid an aggregate of $6,000 and $42,000, respectively to LMT (2012 - $37,500 and $112,500, respectively) which has been recorded as selling, general and administrative expense in the condensed interim statements of operations, comprehensive loss and deficit. | |
See Note 7 (a). |
13_Income_Taxes
13. Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
13. Income Taxes | ' |
The Company has no taxable income under Canadian Federal and Provincial tax laws for the nine month periods ended September 30, 2013 and 2012. The Company has non-capital loss carry-forwards at September 30, 2013 totaling approximately $9,500,000, which may be offset against future taxable income. If not utilized, the loss carry-forwards will expire between 2014 and 2033. The cumulative carry-forward pool of SR&ED expenditures as at September 30, 2013, that may be offset against future taxable income, with no expiry date, is $1,798,300. | |
The non-refundable portion of the tax credits as at September 30, 2013 was $341,300. |
14_Segmented_Information
14. Segmented Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
14. Segmented Information | ' | ||||||||||||||||
The Company is a specialty pharmaceutical company with a primary focus on the acquisition, licensing, development and promotion of healthcare products in Canada. The Company targets several therapeutic areas in Canada, but has a particular interest in products for the treatment of pain, dermatology and endocrinology/cardiology. The Company also sells Uracyst® and NeoVisc® internationally through a number of strategic partnerships. Currently, all of the Company’s manufacturing assets are located in Canada. All direct sales take place in Canada. Licensing arrangements have been obtained to distribute and sell the Company’s products in various countries around the world. | |||||||||||||||||
Revenue for the three and nine month periods ended September 30, 2013 and 2012 includes products sold in Canada and international sales of products. Revenue earned is as follows: | |||||||||||||||||
For the Three Month Period | For the Nine Month Period | ||||||||||||||||
Ended September 30 | Ended September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Product sales: | |||||||||||||||||
Domestic sales | $ | 3,022,993 | $ | 2,830,118 | $ | 8,964,777 | $ | 7,773,046 | |||||||||
International sales | 347,551 | 369,816 | 1,037,103 | 1,193,219 | |||||||||||||
Other revenue | 9,702 | 13,565 | 32,554 | 38,450 | |||||||||||||
Total | $ | 3,380,246 | $ | 3,213,499 | $ | 10,034,434 | $ | 9,004,715 | |||||||||
For the Three Month Period | For the Nine Month Period | ||||||||||||||||
Ended September 30 | Ended September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Royalty revenues: | |||||||||||||||||
Royalty revenues | $ | 99,884 | $ | - | $ | 197,924 | $ | - | |||||||||
Total | $ | 99,884 | $ | - | $ | 197,924 | $ | - | |||||||||
The Company currently sells its own products and is in-licensing other products in Canada. In addition, revenues include products which the Company out-licenses throughout most countries in Europe, the Caribbean, Austria, Germany, Italy, Lebanon, Kuwait, Malaysia, Portugal, Romania, Spain, South Korea, Turkey, Egypt, Hong Kong and the United Arab Emirates. The operations reflected in the condensed interim statements of operations, comprehensive loss and deficit includes the Company’s activity in these markets. |
15_Foreign_Currency_Gain_Loss
15. Foreign Currency Gain (Loss) | 9 Months Ended |
Sep. 30, 2013 | |
Foreign Currency [Abstract] | ' |
15. Foreign Currency Gain (Loss) | ' |
The Company enters into foreign currency transactions in the normal course of business. During the three and nine month periods ended September 30, 2013, the Company had a foreign currency (gain) loss of ($20,060) and $76,204, respectively (2012 – $184,319 and $105,281). These amounts have been included in selling, general and administrative expenses in the condensed interim statement of operations, comprehensive loss and deficit. |
16_Financial_Instruments
16. Financial Instruments | 9 Months Ended | |
Sep. 30, 2013 | ||
Investments, All Other Investments [Abstract] | ' | |
16. Financial Instruments | ' | |
(a) | Financial assets and liabilities – fair values | |
The carrying amounts of cash and cash equivalents, accounts receivable, certain other current assets, accounts payables and accrued liabilities are a reasonable estimate of their fair values because of the short maturity of these instruments. | ||
Warrant liability is a financial liability where fluctuations in market rates will affect the fair value of this financial instrument. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: | ||
Level 1: quoted prices in active markets for identical assets or liabilities | ||
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly | ||
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. | ||
Cash equivalents and warrant liability are classified as Level 2 financial instruments within the fair value hierarchy. | ||
(b) | Liquidity risk | |
The Company generates sufficient cash from operating and financing activities to fund its operations and fulfill its obligations as they become due. The Company has sufficient funds available through its cash, cash equivalents, and financing arrangements, should its cash requirements exceed cash generated from operations to cover financial liability obligations. The Company’s investment policy is to invest excess cash resources into highly liquid short-term investments purchased with an original maturity of three months or less with tier one financial institutions. As at September 30, 2013, there were no restrictions on the flow of these funds nor have any of these funds been committed in any way, except as outlined in the detailed notes. | ||
(c) | Concentration of credit risk and major customers | |
The Company considers its maximum credit risk to be $1,324,682 (December 31, 2012 - $1,220,901). This amount is the total of the following financial assets: accounts receivables and loan receivable. The Company’s cash and cash equivalents are held through various high grade financial institutions. | ||
The Company is exposed to credit risk from its customers and continually monitors its customers’ credit. It establishes the provision for doubtful accounts based upon the credit risk applicable to each customer. In line with other pharmaceutical companies, the Company sells its products through a small number of wholesalers and retail pharmacy chains in addition to hospitals, pharmacies, physicians and other groups. Note 11 discloses the significant customer details and the Company believes that the concentrations on the Company’s customers are considered normal for the Company and its industry. | ||
(d) | Foreign exchange risk | |
The Company principally operates within Canada; however, a portion of the Company’s revenues, expenses, and current assets and liabilities, are denominated in United States dollars and the EURO. The Company’s long term debt is repayable in U.S. dollars, which may expose the Company to foreign exchange risk due to changes in the value of the Canadian dollar. As at September 30, 2013, a 5% change in the foreign exchange rate would increase/decrease the long term debt balance by $300,000 and would increase/decrease both interest expense and net loss by approximately $7,600 for the nine months ended September 30, 2013. The Company believes a near-term change in foreign exchange rates would not have a material adverse effect on the financial position or results of operations. Accordingly, the Company does not enter into financial hedging or other derivative contracts. | ||
(e) | Interest rate risk | |
The Company is exposed to interest rate fluctuations on its cash and cash equivalents as well as its long term debt. The Company does not believe that the results of operations or cash flows would be materially affected to any significant degree by a sudden change in market interest rates relative to interest rates on the cash equivalents. At September 30, 2013, the Company had an outstanding long term debt balance of US$6,000,000 ($6,171,000), which bears interest annually at a rate of 11.5% plus the Libor Rate with the Libor Rate being subject to a minimum floor of 2%, such that that minimum interest rate is 13.5%, which may expose the Company to market risk due to changes in interest rates. For the nine month period ended September 30, 2013, a 1% increase in interest rates would increase interest expense and net loss by approximately $9,100. However, based on current LIBOR interest rates, which are currently under the minimum floor set at 2% and based on historical movements in LIBOR rates, the Company believes a near-term change in interest rates would not have a material adverse effect on the financial position or results of operations. |
1_Basis_of_Presentation_Policy
1. Basis of Presentation (Policy) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Estimates | ' |
The preparation of these financial statements has required management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of the revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to provision for doubtful accounts, accrued liabilities, income taxes, stock based compensation, revenue recognition and intangible assets. The Company bases its estimates on historical experiences and on various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. As adjustments become necessary, they are reported in earnings in the period in which they become known. | |
Recently Adopted Accounting Standards | ' |
On January 1, 2013, the Company adopted the accounting standard set out below. | |
In July 2012, the FASB issued an accounting standards update that gives an entity the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. This guidance will be effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, which will be the Company's 2013 fiscal year. The adoption of this guidance did not have a material impact on the Company’s financial statements. |
2_Inventories_Tables
2. Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of Inventory | ' | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Raw materials | $ | 306,428 | $ | 215,332 | ||||
Finished goods | 353,695 | 284,147 | ||||||
Packaging materials | 61,099 | 91,476 | ||||||
Work in process | 421,278 | 409,602 | ||||||
$ | 1,142,500 | $ | 1,000,557 |
3_Prepaid_Expenses_and_Other_R1
3. Prepaid Expenses and Other Receivables (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Schedule of Prepaid Expenses and Other Receivables | ' | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Prepaid operating expenses | $ | 219,143 | $ | 113,735 | ||||
Deposits | 178,188 | - | ||||||
Interest receivable on loan receivables | 5,850 | 5,175 | ||||||
$ | 403,181 | $ | 118,910 |
4_Property_Plant_and_Equipment1
4. Property, Plant and Equipment (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||||
Schedule of Property, Plant and Equipment | ' | ||||||||||||
30-Sep-13 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Land | $ | 90,000 | $ | - | $ | 90,000 | |||||||
Building | 618,254 | 262,158 | 356,096 | ||||||||||
Leasehold improvements | 10,359 | 2,072 | 8,287 | ||||||||||
Office equipment | 61,308 | 47,259 | 14,049 | ||||||||||
Manufacturing equipment | 1,103,525 | 568,217 | 535,308 | ||||||||||
Warehouse equipment | 17,085 | 16,571 | 514 | ||||||||||
Packaging equipment | 111,270 | 50,175 | 61,095 | ||||||||||
Computer equipment | 128,880 | 81,993 | 46,887 | ||||||||||
$ | 2,140,681 | $ | 1,028,445 | $ | 1,112,236 | ||||||||
31-Dec-12 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Land | $ | 90,000 | $ | - | $ | 90,000 | |||||||
Building | 618,254 | 238,973 | 379,281 | ||||||||||
Leasehold improvements | 10,359 | 518 | 9,841 | ||||||||||
Office equipment | 61,315 | 44,137 | 17,178 | ||||||||||
Manufacturing equipment | 1,103,523 | 541,880 | 561,643 | ||||||||||
Warehouse equipment | 17,085 | 15,989 | 1,096 | ||||||||||
Packaging equipment | 111,270 | 42,302 | 68,968 | ||||||||||
Computer equipment | 103,313 | 71,945 | 31,368 | ||||||||||
$ | 2,115,119 | $ | 955,744 | $ | 1,159,375 |
5_Intangible_Assets_Tables
5. Intangible Assets (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Intangible Assets Tables | ' | ||||||||||||
Schedule of Intangible Assets | ' | ||||||||||||
30-Sep-13 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Patents | $ | 248,621 | $ | 36,692 | $ | 211,929 | |||||||
Licensing asset | 1,005,820 | 77,371 | 928,449 | ||||||||||
Licensing agreements | 10,004,000 | 1,195,185 | 8,808,815 | ||||||||||
$ | 11,258,441 | $ | 1,309,248 | $ | 9,949,193 | ||||||||
31-Dec-12 | |||||||||||||
Cost | Accumulated | Net Carrying | |||||||||||
Amortization | Amount | ||||||||||||
Patents | $ | 235,441 | $ | 28,139 | $ | 207,302 | |||||||
Licensing asset | 1,005,820 | 19,343 | 986,477 | ||||||||||
Licensing agreements | 10,212,000 | 522,600 | 9,689,400 | ||||||||||
$ | 11,453,261 | $ | 570,082 | $ | 10,883,179 | ||||||||
6_Long_Term_Debt_and_Debt_Issu1
6. Long Term Debt and Debt Issuance Costs (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||
Schedule of payments for Long-term Debt | ' | |||||||||||
Principal Payments | Interest Payments | |||||||||||
2013 | - | US$207,000 | ($212,897) | |||||||||
2014 | US$192,415 | ($197,899) | US$817,834 | ($841,143) | ||||||||
2015 | US$1,029,808 | ($1,059,158) | US$732,692 | ($753,574) | ||||||||
2016 | US$1,226,439 | ($1,261,393) | US$581,061 | ($597,621) | ||||||||
2017 | US$1,450,105 | ($1,491,417) | US$402,395 | ($413,863) | ||||||||
2018 | US$2,146,232 | ($2,207,400) | US$145,608 | ($149,758) |
7_Capital_Stock_Tables
7. Capital Stock (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Equity [Abstract] | ' | |||||||||||||
Schedule of Common Stock Outstanding | ' | |||||||||||||
Number of Shares | Amount | |||||||||||||
Balance, December 31, 2012 | 39,610,042 | $ | 17,589,957 | |||||||||||
Common shares issued | 11,362,500 | 4,662,700 | ||||||||||||
Common share purchase warrants – valuation | — | -1,723,693 | ||||||||||||
Share issuance costs | — | -428,857 | ||||||||||||
Broker warrants – valuation allocation | — | -172,986 | ||||||||||||
Balance, March 31, 2013 and June 30, 2013 | 50,972,542 | $ | 19,927,121 | |||||||||||
Common shares issued | 108,696 | 51,087 | ||||||||||||
Share issuance costs | — | -5,014 | ||||||||||||
Common share purchase warrants – valuation | — | -22,810 | ||||||||||||
Balance, September 30, 2013 | 51,081,238 | $ | 19,950,384 | |||||||||||
Schedule of Paid-in Capital Options | ' | |||||||||||||
The activities in additional paid in-capital options are as follows: | ||||||||||||||
Amount | ||||||||||||||
Balance, December 31, 2012 | $ | 1,867,723 | ||||||||||||
Expense recognized for options issued to employees/directors | 428,482 | |||||||||||||
Balance, September 30, 2013 | $ | 2,296,205 | ||||||||||||
Schedule of warrants outstanding | ' | |||||||||||||
As at September 30, 2013, the following warrants were outstanding: | ||||||||||||||
Number of | Weighted Average | Fair | ||||||||||||
Exercise | ||||||||||||||
Expiry Date | Warrants | Price | Value | |||||||||||
11-May-17 | 750,000 | US$0.56 | ($0.58) | $ | 271,999 | |||||||||
27-Feb-15 | 4,429,688 | US$0.50 | ($0.51) | $ | 853,450 | |||||||||
27-Feb-18 | 4,429,687 | US$0.60 | ($0.62) | $ | 1,679,517 | |||||||||
5-Mar-15 | 1,253,000 | US$0.50 | ($0.51) | $ | 238,829 | |||||||||
5-Mar-18 | 1,253,000 | US$0.60 | ($0.62) | $ | 475,075 | |||||||||
11-Mar-15 | 343,750 | US$0.50 | ($0.51) | $ | 70,125 | |||||||||
11-Mar-18 | 343,750 | US$0.60 | ($0.62) | $ | 130,333 | |||||||||
8-Aug-18 | 755,794 | US$0.60 | ($0.61) | $ | 316,375 | |||||||||
20-Sep-18 | 108,696 | US$0.55 | ($0.57) | $ | 42,593 | |||||||||
13,667,365 | US$0.55 | ($0.57) | $ | 4,078,296 |
8_Loss_Per_Share_Tables
8. Loss Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Computation of Earnings Per Share | ' | ||||||||||||||||
The following table sets forth the computation of (loss) per share: | |||||||||||||||||
For the Three Month Period | For the Nine Month Period | ||||||||||||||||
Ended September 30 | Ended September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net (loss) available to common shareholders | $ | (2,583,576 | ) | $ | (718,640 | ) | $ | (6,286,035 | ) | $ | (2,076,410 | ) | |||||
Denominator: | |||||||||||||||||
Weighted average number of common shares | 50,985,538 | 39,610,042 | 48,525,136 | 39,018,801 | |||||||||||||
Effect of dilutive common shares | - | - | - | - | |||||||||||||
Diluted weighted average number of common shares outstanding | 50,985,538 | 39,610,042 | 48,525,136 | 39,018,801 | |||||||||||||
(Loss) per share – basic and diluted | $ | (0.05 | ) | $ | (0.02 | ) | $ | (0.13 | ) | $ | (0.05 | ) | |||||
9_Statement_of_Cash_Flows_Tabl
9. Statement of Cash Flows (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Changes in non-cash balances | ' | ||||||||
Changes in non-cash balances related to operations are as follows: | |||||||||
For the Nine Months Ended September 30 | |||||||||
2013 | 2012 | ||||||||
Accounts receivable | $ | (103,781 | ) | $ | (444,232 | ) | |||
Inventories | (141,943 | ) | 111,182 | ||||||
Prepaid expenses and other receivables | (284,271 | ) | (224,855 | ) | |||||
Taxes recoverable | (283,926 | ) | (7,203 | ) | |||||
Accounts payable and accrued liabilities | (1,815,265 | ) | 315,615 | ||||||
$ | (2,629,186 | ) | $ | (249,493 | ) |
14_Segmented_Information_Table
14. Segmented Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Segment Reporting | ' | ||||||||||||||||
Revenue for the three and nine month periods ended September 30, 2013 and 2012 includes products sold in Canada and international sales of products. Revenue earned is as follows: | |||||||||||||||||
For the Three Month Period | For the Nine Month Period | ||||||||||||||||
Ended September 30 | Ended September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Product sales: | |||||||||||||||||
Domestic sales | $ | 3,022,993 | $ | 2,830,118 | $ | 8,964,777 | $ | 7,773,046 | |||||||||
International sales | 347,551 | 369,816 | 1,037,103 | 1,193,219 | |||||||||||||
Other revenue | 9,702 | 13,565 | 32,554 | 38,450 | |||||||||||||
Total | $ | 3,380,246 | $ | 3,213,499 | $ | 10,034,434 | $ | 9,004,715 | |||||||||
Schedule of Revenue by Royalties and licensing revenue | ' | ||||||||||||||||
For the Three Month Period | For the Nine Month Period | ||||||||||||||||
Ended September 30 | Ended September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Royalty revenues: | |||||||||||||||||
Royalty revenues | $ | 99,884 | $ | - | $ | 197,924 | $ | - | |||||||||
Total | $ | 99,884 | $ | - | $ | 197,924 | $ | - |
2_Inventories_Details
2. Inventories (Details) (CAD) | Sep. 30, 2013 | Dec. 31, 2012 |
Inventories Details | ' | ' |
Raw materials | 306,428 | 215,332 |
Finished goods | 353,695 | 284,147 |
Packaging materials | 61,099 | 91,476 |
Work in process | 421,278 | 409,602 |
Inventories | 1,142,500 | 1,000,557 |
3_Prepaid_Expenses_and_Other_R2
3. Prepaid Expenses and Other Receivables (Details) (CAD) | Sep. 30, 2013 | Dec. 31, 2012 |
Prepaid Expenses And Other Receivables Details | ' | ' |
Prepaid operating expenses | 219,143 | 113,735 |
Deposits | 178,188 | ' |
Interest receivable on loan receivables | 5,850 | 5,175 |
Prepaid expenses and other receivables | 403,181 | 118,910 |
4_Property_Plant_and_Equipment2
4. Property, Plant and Equipment (Details) (CAD) | Sep. 30, 2013 | Dec. 31, 2012 |
Cost | 2,140,681 | 2,115,119 |
Accumulated Amortization | 1,028,445 | 955,744 |
Net Carrying Amount | 1,112,236 | 1,159,375 |
Land | ' | ' |
Cost | 90,000 | 90,000 |
Accumulated Amortization | ' | ' |
Net Carrying Amount | 90,000 | 90,000 |
Building | ' | ' |
Cost | 618,254 | 618,254 |
Accumulated Amortization | 262,158 | 238,973 |
Net Carrying Amount | 356,096 | 379,281 |
Leasehold Improvements | ' | ' |
Cost | 10,359 | 10,359 |
Accumulated Amortization | 2,072 | 518 |
Net Carrying Amount | 8,287 | 9,841 |
Office Equipment | ' | ' |
Cost | 61,308 | 61,315 |
Accumulated Amortization | 47,259 | 44,137 |
Net Carrying Amount | 14,049 | 17,178 |
Manufacturing equipment | ' | ' |
Cost | 1,103,525 | 1,103,523 |
Accumulated Amortization | 568,217 | 541,880 |
Net Carrying Amount | 535,308 | 561,643 |
Warehouse equipment | ' | ' |
Cost | 17,085 | 17,085 |
Accumulated Amortization | 16,571 | 15,989 |
Net Carrying Amount | 514 | 1,096 |
Packaging equipment | ' | ' |
Cost | 111,270 | 111,270 |
Accumulated Amortization | 50,175 | 42,302 |
Net Carrying Amount | 61,095 | 68,968 |
Computer equipment | ' | ' |
Cost | 128,880 | 103,313 |
Accumulated Amortization | 81,993 | 71,945 |
Net Carrying Amount | 46,887 | 31,368 |
5_Intangible_Assets_Details
5. Intangible Assets (Details) (CAD) | Sep. 30, 2013 | Dec. 31, 2012 |
Cost | 11,258,441 | 11,453,261 |
Accumulated Amortization | 1,309,248 | 570,082 |
Net Carrying Amount | 9,949,193 | 10,883,179 |
Patents | ' | ' |
Cost | 248,621 | 235,441 |
Accumulated Amortization | 36,692 | 28,139 |
Net Carrying Amount | 211,929 | 207,302 |
Licensing asset | ' | ' |
Cost | 1,005,820 | 1,005,820 |
Accumulated Amortization | 77,371 | 19,343 |
Net Carrying Amount | 928,449 | 986,477 |
Licensing agreements | ' | ' |
Cost | 10,004,000 | 10,212,000 |
Accumulated Amortization | 1,195,185 | 522,600 |
Net Carrying Amount | 8,808,815 | 9,689,400 |
5_Intangible_Assets_Details_Na
5. Intangible Assets (Details Narrative) (CAD) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Intangible Assets Details Narrative | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 260,852 | 85,202 | 785,966 | 258,005 | ' |
Patents pending not amortized | 95,034 | ' | 95,034 | ' | 81,854 |
6_Long_Term_Debt_and_Debt_Issu2
6. Long Term Debt and Debt Issuance Costs (Details) (CAD) | Sep. 30, 2013 |
Long Term Debt And Debt Issuance Costs Details | ' |
Principle Payments - 2013 | ' |
Principle Payments - 2014 | 197,899 |
Principle Payments - 2015 | 1,059,158 |
Principle Payments - 2016 | 1,261,393 |
Principle Payments - 2017 | 1,491,417 |
Principle Payments - 2018 | 2,207,400 |
Interest Payments - 2013 | 212,897 |
Interest Payments - 2014 | 841,143 |
Interest Payments - 2015 | 753,574 |
Interest Payments - 2016 | 597,621 |
Interest Payments - 2017 | 413,863 |
Interest Payments - 2018 | 149,758 |
6_Long_Term_Debt_and_Debt_Issu3
6. Long Term Debt and Debt Issuance Costs (Details Narrative) (CAD) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Long Term Debt And Debt Issuance Costs Details Narrative | ' | ' | ' | ' |
Non-cash accretion expense | 20,895 | 38,201 | 68,123 | 38,201 |
Non-cash interest expense | 31,263 | 58,639 | 137,092 | 89,936 |
Principal payments | ' | ' | 3,386,630 | 215,185 |
Interest payments | ' | ' | 244,733 | 213,624 |
7_Capital_Stock_Details
7. Capital Stock (Details) (CAD) | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | |
Capital Stock Details | ' | ' | ' |
Begining Balance, Number of Shares | 50,972,542 | 39,610,042 | 39,610,042 |
Begining Balance, Amount | 19,927,121 | 17,589,957 | 17,589,957 |
Common shares issued, Number of Shares | 108,696 | ' | ' |
Common shares issued, Amount | 51,087 | ' | ' |
Common share purchase warrants - valuation, Amount | -22,810 | -1,723,693 | ' |
Share issuance costs, Amount | -5,014 | -428,857 | -433,871 |
Broker warrants - valuation allocation, Amount | ' | -172,986 | ' |
Ending Balance, Number of Shares | 51,081,238 | 50,972,542 | 51,081,238 |
Ending Balance, Amount | 19,950,384 | 19,927,121 | 19,950,384 |
7_Capital_Stock_Details_1
7. Capital Stock (Details 1) (CAD) | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
Paid-in Capital Options, Beginning | 1,867,723 |
Expense recognized for options issued to employees/directors | 428,482 |
Paid-in Capital Options, Ending | 2,296,205 |
7_Capital_Stock_Details_2
7. Capital Stock (Details 2) (CAD) | Sep. 30, 2013 | Sep. 30, 2012 |
Number of Warrants | 13,667,365 | 2,250,000 |
Weighted Average Exercise Price | 0.57 | ' |
Fair Value @ September 30, 2013 | 4,078,296 | ' |
Option 1 | ' | ' |
Expiration Date | 11-May-17 | ' |
Number of Warrants | 750,000 | ' |
Weighted Average Exercise Price | 0.58 | ' |
Fair Value @ September 30, 2013 | 271,999 | ' |
Option 2 | ' | ' |
Expiration Date | 27-Feb-15 | ' |
Number of Warrants | 4,429,688 | ' |
Weighted Average Exercise Price | 0.51 | ' |
Fair Value @ September 30, 2013 | 853,450 | ' |
Option 3 | ' | ' |
Expiration Date | 27-Feb-18 | ' |
Number of Warrants | 4,429,687 | ' |
Weighted Average Exercise Price | 0.62 | ' |
Fair Value @ September 30, 2013 | 1,679,517 | ' |
Option 4 | ' | ' |
Expiration Date | 5-Mar-15 | ' |
Number of Warrants | 1,253,000 | ' |
Weighted Average Exercise Price | 0.51 | ' |
Fair Value @ September 30, 2013 | 238,829 | ' |
Option 5 | ' | ' |
Expiration Date | 5-Mar-18 | ' |
Number of Warrants | 1,253,000 | ' |
Weighted Average Exercise Price | 0.62 | ' |
Fair Value @ September 30, 2013 | 475,075 | ' |
Option 6 | ' | ' |
Expiration Date | 11-Mar-15 | ' |
Number of Warrants | 343,750 | ' |
Weighted Average Exercise Price | 0.51 | ' |
Fair Value @ September 30, 2013 | 70,125 | ' |
Option 7 | ' | ' |
Expiration Date | 11-Mar-18 | ' |
Number of Warrants | 343,750 | ' |
Weighted Average Exercise Price | 0.62 | ' |
Fair Value @ September 30, 2013 | 130,333 | ' |
Option 8 | ' | ' |
Expiration Date | 8-Aug-18 | ' |
Number of Warrants | 755,794 | ' |
Weighted Average Exercise Price | 0.61 | ' |
Fair Value @ September 30, 2013 | 316,375 | ' |
Option 9 | ' | ' |
Expiration Date | 20-Sep-18 | ' |
Weighted Average Exercise Price | 0.57 | ' |
Fair Value @ September 30, 2013 | 42,593 | ' |
7_Capital_Stock_Details_Narrat
7. Capital Stock (Details Narrative) (CAD) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Private placement units issued | 108,696 | ' | 11,471,196 | ' |
Private placement units issued price per unit | 0.47 | ' | 0.41 | ' |
Directors purchased units | ' | ' | 6,046,196 | ' |
'Gross proceeds from directors | ' | ' | 2,412,147 | ' |
Cash commissions paid | ' | ' | 252,101 | ' |
Options granted to officers and employees | 167,000 | 30,000 | 1,173,250 | 275,000 |
Options issued | ' | ' | 286,250 | ' |
Exercise price of options | ' | ' | 0.4 | ' |
Expected dividend yield | ' | ' | 0.00% | ' |
Expected volatility | ' | ' | 123.00% | ' |
Risk free interest rate | ' | ' | 1.49% | ' |
Expected term | ' | ' | '5 years | ' |
Compensation expense for options issued | 138,513 | 139,909 | 428,482 | 460,332 |
Number of options issued terminated | ' | ' | 65,000 | ' |
Series A Warrant[Member] | ' | ' | ' | ' |
Private placement units issued | ' | ' | 6,026,438 | ' |
Private placement units issued price per unit | ' | ' | 0.51 | ' |
Series B [Member] | ' | ' | ' | ' |
Private placement units issued | ' | ' | 6,026,437 | ' |
Private placement units issued price per unit | ' | ' | 0.62 | ' |
8_Loss_Per_Share_Details
8. Loss Per Share (Details) (CAD) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Numerator: | ' | ' | ' | ' |
Net (loss) earnings available to common shareholders | -2,583,576 | -718,640 | -6,286,035 | -2,076,410 |
Weighted average number of common shares | 50,985,538 | 39,610,042 | 48,525,136 | 39,018,801 |
Effect of dilutive common shares | ' | ' | ' | ' |
Diluted weighted average number of common shares outstanding | 50,985,538 | 39,610,042 | 48,525,136 | 39,018,801 |
Income (loss) per share - basic and diluted | -0.05 | -0.02 | -0.13 | -0.05 |
8_Loss_Per_Share_Details_Narra
8. Loss Per Share (Details Narrative) | Sep. 30, 2013 | Sep. 30, 2012 |
Notes to Financial Statements | ' | ' |
Outstanding stock options | 4,350,752 | 3,202,502 |
Outstanding warrant grants | 13,667,365 | 2,250,000 |
9_Statement_of_Cash_Flows_Deta
9. Statement of Cash Flows (Details) (CAD) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Notes to Financial Statements | ' | ' |
Accounts receivable | -103,781 | -444,232 |
Inventories | -141,943 | 111,182 |
Prepaid expenses and other receivables | -284,271 | -224,855 |
Taxes recoverable | -283,926 | -7,203 |
Accounts payable and accrued liabilities | -1,815,265 | 315,615 |
Change in non-cash operating assets and liabilities | 2,629,186 | 249,493 |
Contingencies_and_Commitments_
Contingencies and Commitments (Details Narrative) (CAD) | 9 Months Ended |
Sep. 30, 2013 | |
Licence fees | 200,000 |
Payment to company | 400,000 |
Sales milestones payments | 250,000 |
Aggregate net sales in increments | 5,000,000 |
Remuneration to executive | 952,200 |
Minimum [Member] | ' |
Royalties payable rates | 20.00% |
Maximum [Member] | ' |
Royalties payable rates | 25.00% |
11_Significant_Customers_Detai
11. Significant Customers (Details Narrative) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Risk percentage | 57.90% | 54.30% |
Concentration Risk, Customer | '2 | '2 |
Major customer | ' | ' |
Risk percentage | 58.70% | 54.40% |
Concentration Risk, Customer | '2 | '2 |
12_Related_Party_Transactions_
12. Related Party Transactions (Details Narrative) (CAD) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Notes to Financial Statements | ' | ' |
Related Party, consulting services | 6,000 | 42,000 |
13_Income_Taxes_Details_Narrat
13. Income Taxes (Details Narrative) (CAD) | 9 Months Ended |
Sep. 30, 2013 | |
Non-capital loss carry-forwards | 9,500,000 |
Carry-forward expenditures offset against future taxable income | 1,798,300 |
Tax credits, non-refundable | 341,300 |
Minimum [Member] | ' |
Loss Carryforwards Expiration Dates | '2014 |
Maximum [Member] | ' |
Loss Carryforwards Expiration Dates | '2033 |
14_Segmented_Information_Detai
14. Segmented Information (Details) (CAD) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Product sales: | ' | ' | ' | ' |
Other revenue | 9,702 | 13,565 | 32,554 | 38,450 |
Total | 3,380,246 | 3,213,499 | 10,034,434 | 9,004,715 |
Domestic Sales | ' | ' | ' | ' |
Product sales: | ' | ' | ' | ' |
Product Sales | 3,022,993 | 2,830,118 | 8,964,777 | 7,773,046 |
International Sales | ' | ' | ' | ' |
Product sales: | ' | ' | ' | ' |
Product Sales | 347,551 | 369,816 | 1,037,103 | 1,193,219 |
14_Segmented_Information_Detai1
14. Segmented Information (Details 1) (CAD) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Royalty revenue: | ' | ' | ' | ' |
Royalty revenues | 99,884 | 0 | 197,924 | 0 |
Total royalty revenues | 99,884 | 0 | 197,924 | 0 |
15_Foreign_Currency_Gain_Loss_
15. Foreign Currency Gain (Loss) (Details Narrative) (CAD) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Notes to Financial Statements | ' | ' | ' | ' |
Foreign currency (gain) loss | -20,060 | 184,319 | 76,204 | 105,281 |