Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018CAD ($)shares | |
Document And Entity Information | |
Entity Registrant Name | Mogo Finance Technology Inc. |
Entity Central Index Key | 0001602842 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
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 |
Is Entity Emerging Growth Company? | true |
Entity Filer Category | Non-accelerated Filer |
Entity Public Float | $ | $ 0 |
Entity Common Stock, Shares Outstanding | shares | 23,226,846 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2018 |
Entity Shell Company | false |
Entity Ex Transition Period | false |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | [1] |
Assets | |||
Cash | $ 20,439 | $ 40,560 | |
Loans receivable (Note 4) | 86,347 | 73,460 | |
Prepaid expenses, deposits and other assets | 3,501 | 1,827 | |
Deferred cost (Note 6) | 273 | 410 | |
Investment tax credits | 343 | ||
Property and equipment (Note 7) | 3,016 | 3,206 | |
Intangible assets (Note 8) | 18,658 | 14,897 | |
Total assets | 132,234 | 134,703 | |
Liabilities | |||
Accounts payable and accruals | 9,651 | 7,468 | |
Other liabilities | 973 | 1,089 | |
Credit facilities (Note 9) | 75,934 | 57,110 | |
Debentures (Note 10) | 41,625 | 39,680 | |
Convertible debentures (Note 11) | 11,781 | 12,864 | |
Derivative financial liability (Note 18d) | 964 | 2,697 | |
Total liabilities | 140,928 | 120,908 | |
Shareholders Equity (Deficit) | |||
Share capital (Note 18a) | 75,045 | 71,389 | |
Contributed surplus | 7,045 | 6,033 | |
Deficit | (90,784) | (63,627) | |
Total Shareholders' Equity | (8,694) | 13,795 | |
Total Liabilities and Shareholders' Equity | $ 132,234 | $ 134,703 | |
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - CAD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | [1] | Dec. 31, 2016 | [1] | |
Revenue | |||||
Subscription and services | $ 26,733 | $ 12,972 | $ 8,334 | ||
Interest revenue | 26,433 | 18,187 | 15,593 | ||
Loan fees | 8,111 | 17,522 | 25,943 | ||
Total revenue | 61,277 | 48,681 | 49,870 | ||
Cost of revenue | |||||
Provision for loan losses, net of recoveries (Note 4) | 16,367 | 11,409 | 15,683 | ||
Transaction costs | 6,059 | 4,463 | 3,478 | ||
Cost of revenue | 22,426 | 15,872 | 19,161 | ||
Gross profit | 38,851 | 32,809 | 30,709 | ||
Operating expenses | |||||
Technology and development | 14,747 | 11,373 | 10,114 | ||
Marketing | 8,772 | 6,854 | 6,724 | ||
Customer service and operations | 8,383 | 7,663 | 7,325 | ||
General and administration | 11,177 | 9,826 | 10,240 | ||
Total operating expenses | 43,079 | 35,716 | 34,403 | ||
Loss from operations | (4,228) | (2,907) | (3,694) | ||
Other expenses | |||||
Credit facility interest expense (Note 9) | 9,353 | 7,178 | 6,120 | ||
Debenture interest expense (Note 10, 11) | 8,036 | 7,503 | 6,260 | ||
Unrealized exchange loss (gain) | 651 | (379) | (217) | ||
Unrealized (gain) loss on derivative liability (Note 18d) | (1,733) | 2,207 | (90) | ||
Other one-time expenses (Note 7) | 1,487 | 313 | 1,325 | ||
Total other expenses | 17,794 | 16,822 | 13,398 | ||
Loss and comprehensive loss | $ (22,022) | $ (19,729) | $ (17,092) | ||
Loss per share | |||||
Basic and fully diluted (Note 14) | $ (0.97) | $ (1.07) | $ (0.94) | ||
Weighted average number of basic and fully diluted common shares (in 000’s) | 22,714 | 18,381 | 18,251 | ||
[1] | (1)The consolidated statement of comprehensive loss for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (Deficit) - CAD ($) shares in Thousands, $ in Thousands | Share capital | Contributed surplus | Deficit | Total | ||
Begning balance, Amount at Dec. 31, 2015 | $ 45,314 | $ 1,518 | $ (26,806) | $ 20,026 | ||
Begning balance, Shares at Dec. 31, 2015 | 18,162 | |||||
Loss and comprehensive loss | (17,092) | (17,092) | [1] | |||
Stock based compensation | 1,067 | 1,067 | [2] | |||
Options exercised, Amount | $ 341 | (93) | 248 | |||
Options exercised, Shares | 118 | |||||
Issuance of warrants | 1,453 | 1,453 | ||||
Ending balance, Amount at Dec. 31, 2016 | $ 45,655 | 3,945 | (43,898) | 5,702 | ||
Ending balance, Shares at Dec. 31, 2016 | 18,280 | |||||
Loss and comprehensive loss | (19,729) | (19,729) | [1] | |||
Shares issued, net, Amount | $ 24,397 | 24,397 | ||||
Shares issued, net, Shares | 3,750 | |||||
Shares issued - convertible debentures (Note 11), Amount | $ 814 | 814 | ||||
Shares issued - convertible debentures (Note 11), Shares | 142 | |||||
Stock based compensation | 1,343 | 1,343 | [2] | |||
Options exercised, Amount | $ 250 | (102) | 148 | |||
Options exercised, Shares | 62 | |||||
Conversion of restricted share units (“RSUs”), Amount | $ 273 | (273) | ||||
Conversion of restricted share units (“RSUs”), Shares | 41 | |||||
Equity component of convertible debentures | 973 | 973 | ||||
Amortization of warrants | 147 | 147 | ||||
Impact of adopting IFRS 9 at January 1, 2018(1) | [3] | (5,135) | (5,135) | |||
Ending balance, Amount at Dec. 31, 2017 | $ 71,389 | 6,033 | (68,762) | 13,795 | [4] | |
Ending balance, Shares at Dec. 31, 2017 | 22,275 | |||||
Loss and comprehensive loss | (22,022) | (22,022) | ||||
Shares issued - convertible debentures (Note 11), Amount | $ 3,157 | (132) | 3,025 | |||
Shares issued - convertible debentures (Note 11), Shares | 766 | |||||
Stock based compensation | 1,320 | 1,320 | ||||
Options exercised, Amount | $ 451 | (140) | 311 | |||
Options exercised, Shares | 156 | |||||
Conversion of restricted share units (“RSUs”), Amount | $ 86 | (86) | ||||
Conversion of restricted share units (“RSUs”), Shares | 30 | |||||
Amortization of warrants | 50 | 50 | ||||
Share issuance costs | (38) | (38) | ||||
Ending balance, Amount at Dec. 31, 2018 | $ 75,045 | $ 7,045 | $ (90,784) | $ (8,694) | ||
Ending balance, Shares at Dec. 31, 2018 | 23,227 | |||||
[1] | (1)The consolidated statement of comprehensive loss for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. | |||||
[2] | (1)The consolidated statement of cash flows for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. | |||||
[3] | (1)The consolidated statement of changes in equity (deficit) for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. | |||||
[4] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - CAD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Operating activities | |||||
Loss and comprehensive loss | $ (22,022) | $ (19,729) | [1] | $ (17,092) | [1] |
Items not affecting cash: | |||||
Depreciation and amortization | 7,062 | 4,045 | [2] | 2,707 | [2] |
Amortization of deferred finance costs | 410 | 525 | [2] | 483 | [2] |
Accretion of convertible debentures | 689 | 395 | [2] | [2] | |
Other one-time expenses | 1,105 | 118 | [2] | 1,180 | [2] |
Provision for loan losses | 18,406 | 13,343 | [2] | 16,988 | [2] |
Stock based compensation expense | 1,320 | 1,343 | [2] | 1,067 | [2] |
Unrealized (gain) loss on derivative liability | (1,733) | 2,207 | [1] | (90) | [1] |
Unrealized foreign exchange loss (gain) | 668 | (403) | [2] | (234) | [2] |
Cash flows from (used in) operations before changes in working capital | 5,905 | 1,844 | [2] | 5,009 | [2] |
Changes in working capital accounts | |||||
Net issuance of loans receivable | (36,428) | (24,927) | [2] | (17,095) | [2] |
Investment tax credits | 343 | (186) | [2] | 1,459 | [2] |
Prepaid expenses, deposits and other assets | (1,824) | (462) | [2] | (236) | [2] |
Accounts payable and accruals | 2,917 | 2,489 | [2] | (1,660) | [2] |
Other liabilities | (116) | (116) | [2] | (214) | [2] |
Net cash used in operating activities | (29,203) | (21,358) | [2] | (12,737) | [2] |
Investing activities | |||||
Purchases of property and equipment | (3,409) | (404) | [2] | (934) | [2] |
Investment in intangible assets | (7,644) | (5,017) | [2] | (6,402) | [2] |
Net cash used in investing activities | (11,053) | (5,421) | [2] | (7,336) | [2] |
Financing activities | |||||
Net proceeds from issuance of convertible debentures | 13,528 | [2] | [2] | ||
Net proceeds from issuance of common shares | 24,397 | [2] | [2] | ||
Net advances from debentures | 1,410 | [2] | [2] | ||
Net advances from credit facilities | 18,414 | 10,642 | [2] | 5,076 | [2] |
Options exercised | 311 | 148 | [2] | 247 | [2] |
Net cash provided by financing activities | 20,135 | 48,715 | [2] | 6,973 | [2] |
Increase (decrease) in cash resources | (20,121) | 21,936 | [2] | (13,100) | [2] |
Cash, beginning of year | 40,560 | 18,624 | [2] | 31,724 | [2] |
Cash, end of year | $ 20,439 | $ 40,560 | $ 18,624 | [2] | |
[1] | (1)The consolidated statement of comprehensive loss for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. | ||||
[2] | (1)The consolidated statement of cash flows for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Nature of operations
Nature of operations | 12 Months Ended |
Dec. 31, 2018 | |
Nature Of Operations | |
1. Nature of operations | Mogo Finance Technology Inc. (“Mogo” or the "Company") was incorporated under the Business Corporations Act Mogo — a financial technology company — is a digital challenger to the banks in Canada, empowering consumers with simple solutions to help them manage and control their finances. Users can sign up for a free MogoAccount in only three minutes and get access to six products including free credit score monitoring, identity fraud protection (“MogoProtect”), digital spending account with Mogo Visa* Platinum Prepaid Card (“MogoCard”), digital mortgage experience (“MogoMortgage”), the MogoCrypto account (“MogoCrypto”), the first product within MogoWealth, which enables the buying and selling of bitcoin, and access to smart consumer credit products (“MogoMoney”). The platform has been engineered to deliver a best-in-class digital experience, with best-in-class financial products all through one account. |
Basis of presentation
Basis of presentation | 12 Months Ended |
Dec. 31, 2018 | |
Basis Of Presentation | |
2. Basis of presentation | Statement of compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The policies applied in these consolidated financial statements were based on IFRS issued and outstanding at December 31, 2018. The Company presents its consolidated statements of financial position on a non-classified basis in order of liquidity. Certain revenue and expense captions in the consolidated statements of comprehensive loss were renamed and/or reallocated during the year, to provide greater clarity and a broader description that appropriately captures new revenue streams or to reflect a more appropriate classification by function. These consolidated financial statements for the years ended December 31, 2018, 2017 and 2016 were authorized for issue by the Company’s Board of Directors (the “Board”) on April 29, 2019. These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due in the normal course. Management routinely plans future activities including forecasting future cash flows. Management has reviewed their plan with the Board and has collectively formed a judgment that the Company has adequate resources to continue as a going concern for the foreseeable future, which Management and the Board have defined as being at least the next 12 months. In arriving at this judgment, Management has considered the following: (i) cash flow projections of the Company, which incorporates a rolling forecast and detailed cash flow modeling through the current fiscal year, (ii) global capital markets, and (iii) the base of investors and debt lenders historically available to the Company. The expected cash flows have been modeled based on anticipated revenue and profit streams with debt and equity funding programmed into the model. For these reasons, the Company continues to adopt a going concern basis in preparing the consolidated financial statements. Functional and presentation currency These consolidated financial statements are presented in Canadian dollars, which is the Company's and its subsidiaries functional currency. Basis of consolidation The Company has consolidated the assets, liabilities, revenues and expenses of all its subsidiaries and its structured entity. The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries, Mogo Financial (Alberta) Inc., Mogo Financial (B.C.) Inc., Mogo Financial Inc., Mogo Financial (Ontario) Inc., Mogo Mortgage Technology Inc., Hornby Loan Brokers (Ottawa) Inc., Hornby Leasing Inc., Mogo Technology Inc. (a US subsidiary), Mogo Blockchain Technology Inc., Mogo Wealth Technology Inc., Thurlow Management Inc., Thurlow Capital (Alberta) Inc., Thurlow Capital (B.C.) Inc., Thurlow Capital (Manitoba) Inc., Thurlow Capital (Ontario) Inc., and Thurlow Capital (Ottawa) Inc. and its structured entity, Mogo Finance Trust (the “Trust”). The financial statements of the subsidiaries and the Trust are prepared for the same reporting period as the Company, using consistent accounting policies. All inter-company balances, income and expenses and unrealized gains and losses resulting from inter-company transactions are eliminated in full. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | |
3. Significant accounting policies | Revenue recognition Revenue is comprised of subscription and services, interest revenue and loan fees from our legacy short-term loan products, which were phased out in the third quarter of 2018. The Company recognizes interest revenue, loan fees, nonsufficient funds fees, and any other fees or charges permitted by applicable laws and pursuant to the agreement with the borrower. We record revenue on a net basis for those sales in which we have in substance acted as an agent or broker in the transaction. Subscription and services is comprised of MogoProtect subscriptions, MogoCard revenue, MogoMortgage brokerage commissions, premium account revenues, loan protection premiums, MogoCrypto revenue, Bitcoin mining revenue, and other fees and charges. Subscription and services revenue is recognized when the underlying transactions have been completed or services are rendered and collection is reasonably assured. In 2018, the Company, through a third-party hosting agreement, joined a Bitcoin mining pool that provides transaction verification services on the Bitcoin network. The Company receives Bitcoin as compensation for these services, which are recognized as revenue and measured at fair value according to the spot price at the time they were mined. Bitcoin is considered earned upon the addition of a block to the Bitcoin blockchain at which time the economic benefit is received and can be reliably measured. Management has exercised judgement in determining this accounting treatment for the recognition of revenue from Bitcoin mining, as there is no definitive guidance in IFRS for the accounting of digital currency mining activities. Interest revenue represents interest on our long-term loan products. Our long-term loans fall into two categories: line of credit accounts and installment loans. For line of credit accounts, interest is recognized during the period based upon the balance outstanding and the contractual interest rate, and fees are recognized when assessed to the customer. For installment loans, revenue is recognized on an effective interest basis over the term of the loan and fees are recognized when assessed to the customer. For legacy short-term loans that the Company offered, loan fees were recognized when assessed to the customer. Cost of revenue Cost of revenue consists of provision for loan losses and transaction costs. Transaction costs are expenses that relate directly to the acquisition and processing of new customers (excluding marketing) and include expenses such as credit scoring fees, loan system transaction fees, insurance commission expense, and certain fees related to the MogoCard and MogoProtect programs. Loans receivable Loans receivable consist of unsecured installment loans and lines of credit. The Company phased out its legacy short-term loan products from its business in the third quarter of 2018. Loans receivable are reported net of an allowance for loan losses. The Company maintains an allowance for loan losses that reduces the carrying value of loans identified as impaired to their estimated realizable amounts. Financial instruments Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the contract is discharged, cancelled or expires. Classification and measurement of financial assets At initial recognition, financial assets are classified as measured at amortized cost, at fair value through profit or loss (“FVTPL”), or at fair value through other comprehensive income. IFRS 9, Financial Instruments, removes the previous IAS 39 classifications of loans and receivables, held to maturity, and available for sale. The Company measures financial assets at amortized cost if the financial asset is held within a “hold to collect” business model, and if the contractual cash flows associated with the financial asset are solely payments of principal and interest on the principal amount outstanding. Financial assets fall with a “hold to collect” business model when the Company’s primary objective is to collect contractual cash flows on the assets rather than selling them. Loans receivable are classified as amortized cost. They are initially recognized at fair value, and subsequently measured at amortized cost using the effective interest method, less any allowance for loan losses. Impairment of financial assets Expected credit loss model The expected credit loss (“ECL”) model is a three-stage impairment approach used to measure the allowance for loan losses on all financial assets at each reporting period date. Loans are classified under one of three stages based on changes in credit quality since initial recognition. Stage 1 loans consist of performing loans that have not had a significant increase in credit risk since initial recognition. Loans that have experienced a significant increase in credit risk since initial recognition are classified as Stage 2, and loans considered to be credit-impaired are classified as Stage 3. The Company routinely refinances its existing customers, and accordingly, does not consider a modification to be an indicator of increased credit risk. The allowance for loan losses on both Stage 2 and Stage 3 loans is measured at lifetime ECLs. The allowance for loan losses on Stage 1 loans is measured at an amount equal to 12-month ECLs, representing the portion of lifetime ECLs expected to result from default events possible within 12 months of the reporting date. Assessment of significant increase in credit risk Significant increases in credit risk are assessed based on changes in probability of default of a financial asset subsequent to initial recognition. The Company uses past due information to determine whether credit risk has increased significantly since initial recognition. Financial assets are considered to have experienced a significant increase in credit risk and are reclassified to Stage 2 if a contractual payment is more than 30 days past due as at the reporting date. The Company defines default as the earlier of when a contractual loan payment is more than 90 days past due or when a loan becomes insolvent as a result of customer bankruptcy. Loans that have experienced a default event are considered to be credit-impaired and are reclassified as Stage 3 loans. Measurement of expected credit losses ECLs are measured as the calculated expected value of cash shortfalls over the remaining life of a financial instrument, using a probability-weighted approach that reflects reasonable and supportable information about past events, current conditions and forward looking indicators such as forecasts of future events and macroeconomic conditions. The measurement of ECLs primarily involves using this information to determine both the expected probability of a default event occurring and expected losses resulting from such default events. Loans are grouped according to product type, customer tenure and aging for the purpose of assessing ECLs. Scenarios and probability weights are re-assessed quarterly and subject to management review. Summary of IFRS 9 adoption impact The Company has elected not to restate comparative information for prior periods with respect to classification and measurement (including impairment) requirements. Therefore, comparative periods have not been restated. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 were recognized in retained earnings as at 1 January 2018. Accordingly, the information presented for 2017 does not generally reflect the requirements of IFRS 9, but rather those of IAS 39. The following table summarizes the classifications and carrying amounts of the Company’s financial instruments as previously established under IAS 39 as at December 31, 2017, and the new IFRS 9 classifications and carrying amounts established as at January 1, 2018. Original classification under IAS 39 New classification under IFRS 9 Original carrying amount, IAS 39 New carrying amount, IFRS 9 Cash Loans and receivables Amortized cost 40,560 40,560 Loans receivable, net Loans and receivables Amortized cost 73,460 68,325 Accounts payable and accruals Amortized cost Amortized cost 7,468 7,468 Credit facilities Amortized cost Amortized cost 57,110 57,110 Debentures Amortized cost Amortized cost 39,680 39,680 Convertible debentures Amortized cost Amortized cost 12,864 12,864 Derivative financial liabilities FVTPL FVTPL 2,697 2,697 Financial assets reclassified from loans and receivables under IAS 39 to amortized cost under IFRS 9 were previously also subject to the amortized cost measurement method under IAS 39. The following table summarizes the transition adjustment required upon adoption of IFRS 9 as at January 1, 2018: As at January 1, 2018 Original carrying amount, IAS 39 Transition Adjustment (1) New carrying amount, IFRS 9 Gross loans receivable 80,894 - 80,894 Allowance for loan losses (7,434 ) (5,135 ) (12,569 ) Loans receivable, net 73,460 (5,135 ) 68,325 Deficit (63,627 ) (5,135 ) (68,762 ) Loss per share (1.07 ) (0.28 ) (1.35 ) (1) Re-measurement of the allowance for loan losses relates to the application of the ECL impairment methodology effective upon transition to IFRS 9. Under IFRS 9, credit losses are recognized earlier than under IAS 39, since it replaces the “incurred loss” model in IAS 39 with “ECL” model. This adjustment was recorded to the opening deficit as at January 1, 2018. Accounts payable and accruals, deferred revenue, credit facilities, debentures, and convertible debentures are classified as “other financial liabilities” and are initially recorded at fair value, net of any transaction costs incurred. Subsequently, these items are measured at amortized cost using the effective interest method. Derivative financial liabilities are classified as “financial liabilities at fair value through profit or loss” and are initially and subsequently measured at fair value. The subsequent changes in fair value are recorded as a gain or loss in the consolidated statements of comprehensive loss. The Company has also adopted consequential amendments to IFRS 7 Financial Instruments: Disclosures that are applied to disclosures about 2018 but have not been generally applied to comparative information. Property and equipment All property and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items of property and equipment. All assets having limited useful lives are depreciated using the declining balance method at rates intended to depreciate the cost of assets over their estimated useful lives except leasehold improvements, which are depreciated over the term of lease. The depreciation rate for each class of asset during the current and comparative period are as follows: Rate Computer equipment 30 % Computer equipment – Bitcoin rigs 75 % Furniture and fixtures 20 % Leasehold improvements Term of lease The useful lives of items of property and equipment are reviewed periodically and the useful life is altered if estimates have changed significantly. Intangible assets Intangible assets are stated at cost less accumulated amortization and impairment losses. Intangible assets include both internally generated and acquired software with finite useful lives. Internally generated software costs primarily consist of salaries and payroll-related costs for employees directly involved in the development efforts and fees paid to outside consultants. Amortization is recorded at rates intended to amortize the cost of the intangible assets over their estimated useful lives as follows: Rate Software - Internally generated 5 years straight line Software - Acquired 30% declining balance Development costs, including those related to the development of software, are recognized as an intangible asset when the Company can demonstrate: • the technical feasibility of completing the intangible asset so that it will be available for use or sale; • its intention to complete and its ability to use or sell the asset; • how the asset will generate future economic benefits; • the availability of resources to complete the asset; and • the ability to measure reliably the expenditure during development. Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. During the period of development, the asset is tested for impairment annually. Impairment of non-financial assets At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating units (“CGU”) to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGU’s, or otherwise they are allocated to the smallest group of CGU’s for which a reasonable and consistent allocation basis can be identified. The Company has identified its intangible asset, the digital platform, as one CGU for the purpose of assessing impairment as synergies are realized between its digital products such that the products cannot be considered in insolation. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statements of comprehensive loss. Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized immediately in the consolidated statements of comprehensive loss. Foreign currencies Transactions in foreign currencies are initially recorded at the foreign currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency of the Company at the rates prevailing on the balance sheet date. For the purpose of presenting consolidated financial statements, the assets and liabilities of foreign operations with a functional currency other than Canadian dollars are translated into Canadian dollars using exchange rates prevailing as at the balance sheet date. Leases Leases which do not transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are classified as operating leases. Leases entered into by the Company are solely operating leases, with costs recognized within general and administration expenses in the consolidated statements of comprehensive loss in the period incurred. Income taxes Income tax expense is comprised of current and deferred tax. Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Investment tax credits The benefits of investment tax credits for scientific research and development expenditures are recognized in the year the qualifying expenditure is made, providing there is reasonable assurance of recovery. Provisions Provisions are recognized when the Company has a present legal or constructive obligation that is the result of a past event, when it is probable that the Company will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risk specific to the obligation. Earnings per share The computation of earnings per share is based on the weighted average number of shares outstanding during the period. Diluted earnings per share are computed in a similar way to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares assuming the exercise of share options or warrants, or conversion of convertible debentures, if dilutive. Share-based payments The Company measures equity settled stock options granted based on their fair value at the grant date and recognizes compensation expense over the vesting period. Measurement inputs include the Company’s share price on the measurement date, the exercise price of the option or warrant, the expected volatility of the Company’s shares, the expected life of the options or warrants, and the risk-free rate of return. Dividends are not factored in as the Company does not expect to pay dividends in the foreseeable future. Expected forfeitures are estimated at the date of grant and subsequently adjusted if further information indicates actual forfeitures may vary from the original estimate. Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payments transactions. In situations where equity instruments are issued and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. For each restricted share unit (“RSU”) granted, compensation expense is recognized equal to the market value of one common share at the date of grant based on the number of RSUs expected to vest, recognized over the term of the vesting period, with a corresponding credit to contributed surplus. Significant accounting judgements, estimates and assumptions The preparation of the consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, and the reported amount of revenues and expenses during the year. Actual results may differ from these estimates. Estimates, assumptions, and judgments are reviewed on an ongoing basis. Revisions to accounting estimates are recognized on a prospective basis beginning from the period in which they are revised. Significant accounting judgements The following are the critical judgements, apart from those involving estimations that have been made in the process of applying the Company’s accounting policies, which have the most significant effect on the amounts recognized in the consolidated financial statements. Capitalization of intangible assets In applying its accounting policy for costs incurred during the development phase for new software, the Company must determine whether the criteria for capitalization have been met. The most difficult and subjective estimate is whether a project will generate probable future economic benefits. Management considers all appropriate facts and circumstances in making this assessment including historical experience, costs and anticipated future economic conditions. Significant accounting estimates and assumptions These estimates and assumptions are based on management’s historical experience, best knowledge of current events, conditions and actions that the Company may undertake in the future and other factors that management believes are reasonable under the circumstances. These estimates and assumptions are reviewed periodically, and the effect of a change in accounting estimate or assumption is recognized prospectively by including it in the consolidated statement of comprehensive loss in the period of the change and in any future periods affected. The areas where estimates and assumptions have the most significant effect on the amounts recognized in the consolidated financial statements include the following: Valuation of long-lived assets and asset impairment Estimated useful lives of property and equipment and intangible assets are based on management’s judgment and experience. When management identifies that the actual useful lives for these assets differ materially from the estimates used to calculate depreciation and amortization, that change is adjusted prospectively. Due to the significant investment in intangible assets by the Company, variations between actual and estimated useful lives could impact operating results both positively and negatively. Asset lives, depreciation and amortization methods, and residual values are reviewed periodically. The Company periodically assesses the recoverability of values assigned to long-lived assets after considering potential impairment indicated by such factors as significant changes in technological, market, economic or legal environment, business and market trends, future prospects, current market value and other economic factors. In performing its review of recoverability, management estimates either the value in use or fair value less costs to sell. Allowance for loan losses Our provision for loan losses consists of amounts charged to the consolidated statement of comprehensive loss during the period to maintain an adequate allowance for loan losses. Our allowance for loan losses represents our estimate of the expected credit losses inherent in our existing loan portfolio and is based on a variety of factors, including the composition and quality of the portfolio, loan-specific information gathered through our collection efforts, delinquency levels, our historical charge-off and loss experience, our expectations of future loan performance, and general forward-looking macroeconomic conditions. The methodology and assumptions used in setting the loan loss allowance are reviewed regularly to reduce any difference between loss estimates and actual loss experience. Fair value of share-based payments The Company uses the Black-Scholes valuation model to determine the fair value of equity-settled stock options. Management exercises judgment in determining certain inputs to this model including the expected life of the options, expected volatility and forfeiture rates, and expected dividend yield. Variation in actual results for any of these inputs will result in a different fair value of the stock option as compared to the original estimate. Income taxes Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by tax authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. Derivative financial liability Warrants issued with a cashless exercise option are recorded at fair value, and classified as a derivative financial liability at initial recognition. Subsequent changes in fair value recorded as a gain or loss in the consolidated statements of comprehensive loss. As the warrants are exercised, the value of the recorded liability will be included in share capital along with the proceeds from the exercise. If these warrants expire, the related liability is reversed through the consolidated statements of comprehensive loss. Recent IFRS standards adopted in 2018 We adopted the following new accounting standards and amendments, which are effective for our interim and annual consolidated financial statements commencing January 1, 2018. IFRS 9, Financial Instruments On January 1, 2018, the Company adopted IFRS 9, Financial Instruments Recognition and Measurement IFRS 9 is effective for annual periods beginning on or after January 1, 2018. As permitted by the standard, the Company has chosen not to restate comparative consolidated financial statements. Refer to “Summary of IFRS 9 adoption impact” earlier within Note 3 to these consolidated financial statements for further discussion. IFRS 15, Revenue from Contacts with Customers On January 1, 2018, the Company adopted IFRS 15 – Revenue from Contracts with Customers IFRS 9 – Financial Instruments IFRS 15 is effective for annual periods beginning on or after January 1, 2018, and supersedes IAS 11, Construction Contracts, and IAS 18, Revenue, as well as various International Financial Reporting Interpretative Committee ( “ ” “ ” New IFRS standards and interpretations not yet applied IFRS 16, Leases In January 2016, the IASB issued IFRS 16, Leases Leases IFRS 16 removes the distinction between operating and finance leases from the lessee’s perspective and introduces a single lessee accounting model. The standard requires a lessee to recognize a “right of use” asset and a corresponding lease liability for substantially all leases, with the exception of leases with terms less than 12 months and leases of low value assets. Requirements for lessor accounting are largely unchanged from IAS 17. IFRS 16 will also result in reclassification of the nature of lease expenses to depreciation and interest expense, from their classification of “premises expense” under IAS 17. IFRS 16 offers a range of transition options. The Company plans to apply IFRS 16 using the modified retrospective approach. Therefore the cumulative effect of adopting IFRS 16, if any, will be recognized as an adjustment to opening retained earnings as at January 1, 2019, with no restatement of comparative information. Under this method using the practical expedient available the Company is planning to recognize the right of use asset equal to the lease liability. Additionally, the Company will elect to apply the standard to contracts that were previously identified as leases applying IAS 17 and IFRIC 4. Based on the information currently available, the Company estimates that it will recognize a lease liability and right to use asset of approximately $6.0 million to $7.5 million as at January 1, 2019. This preliminary estimate is subject to adjustment as management continues to monitor and refine certain elements of its IFRS 16 adoption in advance of Q1 2019 reporting. The Company is on track to complete its implementation of IFRS 16 effective January 1, 2019. Further, the Company has discussed the impact of IFRS 16 adoption with its lender and concluded that the adoption of the Standard will have no impact on the financial covenants as described in Note 9. |
Loans receivable
Loans receivable | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable | |
4. Loans receivable | Loans receivable represent unsecured installment loans and lines of credit advanced to customers in the normal course of business. The terms of the loans vary from 2-5 years for installment loans and 1 year for lines of credit. The Company phased out its legacy short-term loan products from its business in the third quarter of 2018. Installment loans are issued with maturity dates beyond one year and are thus considered non-current. The breakdown of the Company’s gross loans receivable as at December 31, 2018 and 2017 is as follows: December 31, 2018 December 31, 2017 Current 62,439 46,977 Non-Current 39,317 33,917 101,756 80,894 The following table provides a breakdown of gross loans receivable and allowance for loan losses by aging bucket according to their IFRS 9 ECL measurement stage. In this presentation, the entire customer loan balance is aged in the same category as its oldest individual past due payment, to align with the stage groupings used in calculating the allowance for loan losses under IFRS 9: As at December 31, 2018 Stage 1 Stage 2 Stage 3 Total Not past due 88,035 - 99 88,134 1-30 days past due 3,097 - 257 3,354 31-60 days past due - 1,838 491 2,329 61-90 days past due - 1,240 469 1,709 91-180 days past due - - 6,230 6,230 Gross loans receivable 91,132 3,078 7,546 101,756 Allowance for loan losses (6,951 ) (2,118 ) (6,340 ) (15,409 ) Loans receivable, net 84,181 960 1,206 86,347 The following table presents the aging of loans as at December 31, 2017 and 2016 in accordance with IAS 39. In contrast to IFRS 9, these receivables were aged on an individual payment basis rather than at the customer balance level: As at December 31, Age analysis of loans receivable 2017 2016 Not past due 73,965 61,648 1-30 days past due 1,546 1,338 31-60 days past due 1,296 1,205 61-90 days past due 1,183 1,223 91-180 days past due 2,904 3,772 Gross loans receivable 80,894 69,186 Allowance for loan losses (7,434 ) (7,311 ) Loans receivable, net 73,460 61,875 The following table provides an analysis of changes in the allowance for loan losses according to their IFRS 9 stage grouping for the year ended December 31, 2018: Stage 1 Stage 2 Stage 3 Total Balance as at January 1, 2018 6,853 1,579 4,137 12,569 Gross loans originated 5,354 - - 5,354 Principal payments and net re-measurement of allowance (3,688 ) (176 ) 334 (3,530 ) Transfers to: Stage 1 – 12 month ECLs 5 (24 ) (16 ) (35 ) Stage 2 – Lifetime ECLs (270 ) 2,116 - 1,846 Stage 3 – Lifetime ECLs (1,303 ) (1,377 ) 17,451 14,771 Net amounts written off against allowance - - (15,566 ) (15,566 ) Balance as at December 31, 2018 6,951 2,118 6,340 15,409 The overall changes in the allowance for loan losses are summarized below for December 31, 2018 and 2017: Allowance for loan losses 2018 2017 Balance, beginning of period 7,434 7,311 January 1, 2018 IFRS 9 adjustment 5,135 - Provision for loan losses 18,406 13,343 Charge offs (15,566 ) (13,220 ) Balance, end of period 15,409 7,434 The provision for loan losses in the consolidated statement of comprehensive loss is recorded net of recoveries of $2,039 (2017 –$1,934). |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
5. Related party transactions | The significant related-party transactions that occurred during the year ended December 31, 2018 were transactions with debenture holders that incur interest. Related party debentures at year end totaled $3,287 (December 31, 2017 – $3,145) with principal amounts maturing at various periods through to August 1, 2021. The debentures bear interest rates from 12.0% to 18.0% (December 31, 2017 – 15.0% to 18.0%) with interest expense of $538 for the year ended December 31, 2018 (December 31, 2017 – $498). The related parties involved in such transactions include shareholders, officers, directors, and management; members of their families; or entities which are directly or indirectly controlled by members of their families. The debentures are ongoing contractual obligations that are used to fund our corporate and operational activities. These debentures are contractually obligated to be paid on the maturity date. Key management personnel Key management personnel (“KMP”) are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly. Key management personnel consists of officers and directors. Aggregate compensation of KMP during the year consisted of: 2018 2017 Salary and short term benefits 2,087 3,281 Share – based payments 489 632 2,576 3,913 |
Deferred cost
Deferred cost | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Cost | |
6. Deferred cost | The Company and Postmedia Network Inc. (“Postmedia”) entered into a three year Marketing Collaboration Agreement (the “Postmedia Agreement”) effective January 25, 2016, whereby Postmedia provides Mogo with a minimum value of $50 million of promotional commitments in exchange for entering into a revenue sharing arrangement with Mogo. During April 2018, Mogo extended the term of the Postmedia Agreement for an additional two years beyond the end of the original agreement. The extended agreement is effective until December 31, 2020 and provides Mogo a similar minimum annual media value from Postmedia to the original agreement. Under the extended agreement, Postmedia receives a fixed quarterly payment equivalent to the Q4 2017 revenue share payment, instead of receiving a percentage of Mogo’s revenue. In connection with the amendment of the Postmedia Agreement, the vesting and term of the Performance Warrants previously granted to Postmedia were also adjusted. See Note 18(d) for further information. In 2016, Mogo paid Postmedia a one-time program setup fee of $1,171 plus tax, which is being amortized over the life of the Postmedia Agreement, until December 31, 2020. The remaining balance as at December 31, 2018 is $273 (December 31, 2017 - $410). |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property And Equipment | |
7. Property and equipment | Computer equipment Furniture and fixtures Leasehold improvements Total Cost Balance at December 31, 2016 2,067 1,585 2,592 6,244 Additions 271 30 65 366 Disposals (1 ) (115 ) (148 ) (264 ) Balance at December 31, 2017 2,337 1,500 2,509 6,346 Additions 3,814 2 - 3,816 Impairment (1,105 ) - - (1,105 ) Balance at December 31, 2018 5,046 1,502 2,509 9,057 Accumulated depreciation Balance at December 31, 2016 1,031 612 679 2,322 Additions 357 168 457 982 Disposals (1 ) (32 ) (131 ) (164 ) Balance at December 31, 2017 1,387 748 1,005 3,140 Additions 2,285 151 465 2,901 Balance at December 31, 2018 3,672 899 1,470 6,041 Net book value At December 31, 2017 950 752 1,504 3,206 At December 31, 2018 1,374 603 1,039 3,016 During 2018, the Company recognized $1,105 of impairment on Bitcoin mining equipment due to a reduction in the market value of mining equipment and the market price of Bitcoin. This non-cash expense was recorded within other one-time expenses in the consolidated statement of comprehensive loss. The recoverable amount of the Bitcoin mining equipment was determined to be $504 under the fair value less costs to sell method, using a Level 1 input under the fair value hierarchy. Depreciation of leasehold improvements are included in general and administration expenses. Depreciation expense for all other property and equipment are included in technology and development costs. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets | |
8. Intangible assets | Internally generated – Completed Internally generated – In Process Vendor Purchases Total Cost Balance at December 31, 2016 8,593 6,333 3,340 18,266 Additions - 5,143 11 5,154 Transfers 7,935 (7,935 ) - - Balance at December 31, 2017 16,528 3,541 3,351 23,420 Additions - 7,730 5 7,735 Transfers 10,373 (10,373 ) - - Balance at December 31, 2018 26,901 898 3,356 31,155 Accumulated depreciation Balance at December 31, 2016 3,122 - 2,895 6,017 Additions 2,369 - 137 2,506 Balance at December 31, 2017 5,491 - 3,032 8,523 Additions 3,883 - 91 3,974 Balance at December 31, 2018 9,374 - 3,123 12,497 Net book value At December 31, 2017 11,037 3,541 319 14,897 At December 31, 2018 17,527 898 233 18,658 Intangible assets include both internally generated and acquired software with finite useful lives. Amortization of intangible assets is included in technology and development costs. |
Credit facilities
Credit facilities | 12 Months Ended |
Dec. 31, 2018 | |
Credit Facilities | |
9. Credit facilities | The Company currently has two credit facilities, the “Credit Facility – Liquid”, which is used to finance the Company’s installment loan products (“Liquid loans”), and the “Credit Facility – Other”, which is used to finance other loan products. On September 1, 2015 the Company entered into the Credit Facility – Liquid through a structured entity called Mogo Finance Trust. The Credit Facility – Liquid consists of a term loan that authorizes an operating line for a maximum of $50 million and matures on August 31, 2020. Under the terms of the agreement, the facility may be increased up to $200 million upon certain conditions. The amount drawn on the facility as at December 31, 2018 was $32,375 (December 31, 2017 – $29,439) with unamortized deferred financing costs of $554 (December 31, 2017 – $887) netted against the amount owing. The term loan bears interest at a variable rate of LIBOR plus 8.00% (with a LIBOR floor of 1.50%), payable on the greater of the actual aggregate unpaid principal balance, or the prescribed minimum balance under the term loan agreement. For the three month period ended December 31, 2018 the prescribed minimum balance was $44 million. The prescribed minimum balance is reset to $33 million in the first quarter of 2019, and will rise incrementally up to $44 million by the maturity date. As at December 31, 2018, LIBOR was 2.50% (December 31, 2017 – 1.56%). Interest expense on the Credit Facility - Liquid is included in credit facility interest expense in the consolidated statements of comprehensive loss. On September 25, 2017, the Company finalized a new senior secured credit facility of up to $40 million (“Credit Facility – Other” and, together with the Credit Facility – Liquid) which was used to repay and replace Mogo’s previous $30 million “Credit Facility – ST” entered into on February 24, 2014. This transaction resulted in the extinguishment of the (“Credit Facility – ST”). The Credit Facility – Other matures on July 2, 2020, compared to the maturity date of July 2, 2018 under the previous facility. On December 18, 2018, the Company increased the borrowing limit on the Credit Facility – Other from $40 million to $50 million. The facility bears interest at a variable rate of LIBOR plus 12.50% (with a LIBOR floor of 2.00%) up to the first $40 million of borrowing, a decrease from the variable rate of LIBOR plus 13.00% (with a LIBOR floor of 2.00%) under the previous Credit Facility - ST. The incremental portion of facility borrowings above $40 million bears interest at a variable rate of LIBOR plus 11.00% (with a LIBOR floor of 2.00%). Consistent with the previous facility, there is a 0.33% fee on the available but undrawn portion of the $50 million facility. The amount drawn on the new facility as at December 31, 2018 was $44,327 (December 31, 2017 – $28,749) with unamortized deferred financing costs of $214 (December 31, 2017 – $191) netted against the amount owing. Both credit facilities are subject to certain covenants and events of default. As of December 31, 2018, the Company is in compliance with these covenants. Interest expense on both credit facilities is included in credit facility interest expense in the consolidated statements of comprehensive loss. |
Debentures
Debentures | 12 Months Ended |
Dec. 31, 2018 | |
Debentures | |
10. Debentures | Debentures require monthly interest only payments and bear interest at annual rates ranging between 10.0% and 18.0% (2017 – 12.0% and 18.2%) with principal amounts due at various periods up to March 1, 2022. Interest expense on the debentures is included in debenture interest expense in the consolidated statements of comprehensive loss. Debentures are subordinated to the Credit Facility – Other and are secured by the assets of the Company. The Debentures are governed by the terms of a trust deed and, among other things, are subject to a subordination agreement which effectively extends the earliest maturity date of such debentures to July 2, 2020, the maturity date of the Credit Facility – Other. Management routinely reviews its outstanding debentures and actively renegotiates terms, including interest rates and maturity dates, and will continue to refinance these long-term debentures as they become due and payable. The debenture principal repayment dates, after giving effect to the subordination agreement referenced above, are as follows: 2019 - 2020 27,968 2021 9,787 2022 3,870 41,625 |
Convertible debentures
Convertible debentures | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Debentures | |
11. Convertible debentures | On June 6, 2017, the Company issued 10% convertible debentures of $15.0 million aggregate principal amount at a price of one thousand dollars per debenture. The interest is payable semi-annually on November 30 and May 31. The convertible debentures are subordinated to existing credit facilities, but senior to all other secured and subordinated indebtedness, and are secured by the assets of the Company. The maturity date of the convertible debentures is June 6, 2020. The convertible debentures are convertible, at the option of the holder, in whole or in part, into common shares of the Company at any time before the maturity date at a price of $5.00 per common share (the “Conversion Price”). Principal and interest are payable in cash or, at the Company’s option, subject to regulatory approval and provided no events of default have occurred, in common shares of the Company issued at a price equal to the volume weighted average trading price (“VWAP”) of the common shares for the 20 trading days ending on the fifth day prior to the maturity date or the date on which the Interest payment is due, as applicable. Prepayment The Company may, at its option any time after 12 months from the closing date and at any time prior to maturity, subject to regulatory approval and provided that no events of default have occurred, prepay the convertible debentures in whole or in part, plus accrued interest, in cash. If the prepayment occurs: (i) within 24 months of the closing date, then the debenture holders are entitled to receive (1) an additional payment equal to 5% of the prepayment amount and (2) the interest that would have accrued from the date of prepayment to, but excluding, the day that is 24 months from the closing date; or (ii) after 24 months of the closing date but prior to the maturity date, then the debenture holders are entitled to receive the interest that would have accrued from the date of prepayment to, but excluding, the maturity date. Early Conversion The Company may at any time that the 20-day VWAP of the common shares exceeds 115% of the Conversion Price, subject to regulatory approval and provided no events of default have occurred, convert the convertible debentures in whole or in part, including any accrued interest, to common shares at the Conversion Price of $5.00 per common share. On the date of issuance, the gross proceeds of $15.0 million were first allocated to the debt component of the convertible debentures by discounting the future principal and interest payments at the prevailing interest rate at the date of issuance for a similar non-convertible debt instrument. The difference between gross proceeds and the debt component, or residual value, was then allocated to contributed surplus within shareholders’ equity. Transaction costs were allocated to the debt and equity components on a pro-rata basis, and amortized as a component of accretion of the convertible debenture. The following table summarizes the carrying value of the convertible debentures as at December 31, 2018 and 2017: Liability component of convertible debentures Equity component of convertible debentures Net book value 2018 Net book value 2017 Convertible debentures 11,973 939 12,912 14,905 Transaction costs (1,248 ) (98 ) (1,346 ) (1,472 ) Net proceeds 10,725 841 11,566 13,433 Accretion in carrying value of debenture liability 1,056 - 1,056 404 11,781 841 12,622 13,837 Interest expense, which includes interest payable and the accretion of the convertible debenture, in the amounts of $1,947 for the year ended December 31, 2018 (December 31, 2017 – $1,248) is included in debenture interest expense in the consolidated statements of comprehensive loss.In 2018, the Company issued 367,270 shares in lieu of interest payable (December 31, 2017 – 122,655) and 398,600 (December 31, 2017 – 19,000) shares for the conversion of $1,865 of principal (December 31, 2017 – $87). |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
12. Income taxes | (a) Provision for income taxes The major components of provision for income taxes are as follows: 2018 2017 Current tax expense - - Provision for income taxes - - The reconciliation of the provision for income taxes to the amount of income taxes calculated using statutory income tax rates applicable to the Company in Canada is as follows: 2018 2017 Canadian federal and provincial recovery of income taxes using statutory rate of 27% (2017 – 27%) (5,946 ) (5,381 ) Change in unrecognized deductible temporary differences and unused tax losses 6,098 4,397 Permanent differences and other (152 ) 984 Provision for income taxes - - (b) Deferred tax assets As at December 31, the Company’s deferred tax assets are as follows: 2018 2017 Unused tax losses 141 776 (c) Deferred tax liabilities As at December 31, the Company’s deferred tax liabilities are as follows: 2018 2017 Convertible debentures 67 233 Deferred cost 74 111 Intangible assets - 250 Investment tax credits - - Property and equipment - 182 141 776 (d) Deductible temporary differences and unused tax losses As at December 31, the Company has deductible temporary differences for which no deferred tax assets are recognized as follows: 2018 2017 Property and equipment 2,250 - Intangible assets 4,368 1,412 Debentures 1,658 1,123 Financing costs 2,390 4,161 Research and development expenditures 1,163 1,342 Other 21 326 11,850 8,364 As at December 31, the company has unused tax losses for which no deferred tax assets are recognised as follows: 2018 2017 Expires 2024 610 610 Expires 2025 1,075 1,075 Expires 2026 2,136 2,136 Expires 2027 5,203 5,203 Expires 2028 2,064 2,064 Expires 2029 4,663 4,663 Expires 2030 3,698 3,698 Expires 2031 1,614 1,614 Expires 2032 4,849 4,849 Expires 2033 10,454 10,454 Expires 2034 7,416 7,416 Expires 2035 9,835 9,835 Expires 2036 19,008 19,008 Expires 2037 19,824 19,824 Expires 2038 16,277 - 108,726 92,449 |
Expenses by nature
Expenses by nature | 12 Months Ended |
Dec. 31, 2018 | |
Expenses By Nature | |
13. Expenses by nature | 2018 2017 2016 Personnel expense 16,702 17,869 18,552 Marketing 8,291 5,916 5,277 Depreciation and amortization 7,062 4,045 2,707 Hosting and software licences 4,110 2,075 1,999 Professional services 1,281 1,389 1,628 Premises 1,036 1,053 1,235 Insurance and licenses 1,091 470 391 Others 3,506 2,899 2,614 43,079 35,716 34,403 |
Loss per share
Loss per share | 12 Months Ended |
Dec. 31, 2018 | |
Loss Per Share | |
14. Loss per share | Loss per share is based on consolidated comprehensive loss for the year divided by the weighted average number of shares outstanding during the year. Diluted loss per share is computed in accordance with the treasury stock method and is based on the weighted average number of shares and dilutive share equivalents. The following reflects consolidated comprehensive loss and weighted average number of shares used in the basic and diluted loss per share computations: 2018 2017 2016 Loss attributed to shareholders (22,022 ) (19,729 ) (17,092 ) Basic weighted average number of shares (in 000s) 22,714 18,381 18,251 Basic and diluted loss per share (0.97 ) (1.07 ) (0.94 ) The outstanding stock options and warrants were excluded from the calculation of diluted loss per share because their effect is anti-dilutive. |
Capital management
Capital management | 12 Months Ended |
Dec. 31, 2018 | |
Capital Management | |
15. Capital management | The Company’s objectives when managing capital are to maintain financial flexibility in order to preserve its ability to meet financial obligations and continue as a going concern, and to deploy capital to provide future investment return to its shareholders. The Company sets the amount and type of capital required relative to its assessment of risk and makes adjustments when necessary to respond to changes to economic conditions, the risk characteristics of the underlying assets, and externally imposed capital requirements. In order to maintain or modify its capital structure, the Company may issue new shares, seek other forms of financing, or sell assets to reduce debt. The Company manages the following as capital: 2018 2017 Share capital 75,045 71,389 Deficit (90,784 ) (63,627 ) Debentures 41,625 39,680 Convertible debentures 12,622 13,837 Credit facilities 75,934 57,110 There have been no changes in the Company’s capital management objectives, policies and processes during the year. There are certain capital requirements of the Company resulting from the Company’s credit facility that include financial covenants and ratios. Management uses these capital requirements in the decisions made in managing the level and make-up of the Company’s capital structure. The Company is in compliance with all of the financial covenants as at December 31, 2018. Changes in the share capital of the Company over the year ended December 31, 2018 are mainly attributed to the conversion of convertible debentures and related interest, and the conversion of stock options and RSUs, as disclosed in Note 11 and Note 18, respectively. |
Fair value of financial instrum
Fair value of financial instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Of Financial Instruments | |
16. Fair value of financial instruments | Assets and liabilities recorded at fair value in the consolidated statement of financial position are measured and classified in a hierarchy consisting of three levels for disclosure purposes. The three levels are based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability’s classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. The input levels are defined as follows: • Level 1: Unadjusted quoted prices in an active market for identical assets and liabilities. • Level 2: Quoted prices in markets that are not active or inputs that are derived from quoted prices of similar (but not identical) assets or liabilities in active markets. Level 2 inputs include quoted prices for assets in markets that are considered less active. • Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the estimated fair value of the assets or liabilities. The fair value of cash, current loans receivable, accounts payable and accruals, and other liabilities is approximated by their carrying amount due to their short-term nature. The fair value of the Company’s non-current loans receivable is determined by discounting expected future contractual cash flows, taking into account expected prepayments and using management’s best estimate of average market interest rates with similar remaining terms, which are classified as Level 3 input within the fair value hierarchy: December 31, 2018 December 31, 2017 Total Fair Value Total Carrying Value Total Fair Value Total Carrying Value Loans Receivable – Non-Current (Level 3) 41,595 39,317 36,567 33,917 The fair values of the Company’s debentures and convertible debentures are estimated using discounted cash flows based upon the Company’s current borrowing rates for similar borrowing arrangements, which are classified as Level 2 inputs within the fair value hierarchy. The carrying values of debentures approximate their fair value as new debt granted with similar risk profiles bear similar rates of return. The fair value of the Company’s derivative financial liability is determined using the Black Scholes option pricing model and is classified as Level 2. Management has determined that the fair values of the credit facilities do not materially differ from its carrying values as the facilities are subject to a floating interest rate, effecting current market conditions, and there have been no significant changes in the Company’s risk profile since issuance of the credit facilities. During the year ended December 31, 2018, there were no transfers of assets or liabilities within the fair value hierarchy levels. |
Nature and extent of risk arisi
Nature and extent of risk arising from financial instruments | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of detailed information about financial instruments [abstract] | |
17. Nature and extent of risk arising from financial instruments | Risk management policy In the normal course of business, the Company is exposed to financial risk that arises from a number of sources. Management’s involvement in operations helps identify risks and variations from expectations. As a part of the overall operation of the Company, Management takes steps to avoid undue concentrations of risk. The Company manages the risks as follows: Credit risk Credit risk is the risk of financial loss to the Company if a customer or counter-party to a financial instrument fails to meet its contractual obligations and arises primarily from the Company’s loans receivable. The maximum amount of credit risk exposure is limited to the gross carrying amount of the loans receivable disclosed in these financial statements. The Company acts as a lender of unsecured consumer loans and lines of credit and has little concentration of credit risk with any particular individual, company or other entity, relating to these services. However, the credit risk relates to the possibility of default of payment on the Company’s loans receivable. The Company performs on-going credit evaluations, monitors aging of the loan portfolio, monitors payment history of individual loans, and maintains an allowance for loan loss to mitigate this risk. The credit risk decisions on the Company’s loans receivable are made in accordance with the Company’s credit policies and lending practices, which are overseen by the Company’s senior management. Credit quality of the customer is assessed based on a credit rating scorecard and individual credit limits are defined in accordance with this assessment. The consumer loans receivable are unsecured. The Company develops underwriting models based on the historical performance of groups of customer loans which guide its lending decisions. To the extent that such historical data used to develop its underwriting models is not representative or predictive of current loan book performance, the Company could suffer increased loan losses. The Company cannot guarantee that delinquency and loss levels will correspond with the historical levels experienced and there is a risk that delinquency and loss rates could increase significantly. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due or will not receive sufficient funds from its third party lenders to advance to the Company’s customers. The Company manages all liquidity risk through maintaining a sufficient working capital amount through daily monitoring of controls, cash balances and operating results. The Company’s principal sources of cash are funds from operations, which the Company believes will be sufficient to cover its normal operating and capital expenditures. The Company’s accounts payable and accruals are substantially due within 12 months. The maturity schedule of the Company’s credit facilities, debentures, and convertible debentures are described in Notes 9, 10 and 11 respectively. Management will continue to refinance any outstanding amounts owing under the credit facilities and debentures as they become due and payable. Foreign currency risk Currency risk is the risk that changes in foreign exchange rates may have an effect on future cash flows associated with financial instruments. The Company is exposed to foreign currency risk on the following financial instruments denominated in U.S. dollars. A 5% increase or decrease in the U.S. dollar exchange rate would increase or decrease the unrealized exchange gain (loss) by $266. December 31, 2018 December 31, 2017 December 31, 2016 Cash 874 171 65 Debentures 4,770 4,770 4,870 Interest rate risk Changes in market interest rates may have an effect on the cash flows associated with some financial assets and liabilities, known as cash flow risk, and on the fair value of other financial assets or liabilities, known as price risk. The Company is exposed to interest rate risk primarily relating to its credit facilities that bear interest fluctuating with LIBOR. The credit facilities have a LIBOR floor of 1.5% & 2.0% for Credit Facility – Liquid and Credit Facility – Other, respectively. As at December 31, 2018, LIBOR is 2.50% (December 31, 2017 – 1.56%; December 31, 2016 – 0.77%). A 0.50 basis point increase in LIBOR would increase annual credit facility interest expense by $428. The debentures and convertible debentures have fixed rates of interest and are not subject to interest rate risk. Other price risk Other price risk is the risk that changes in market prices, including commodity or equity prices, will have an effect on future cash flows associated with financial instruments. The cash flows associated with financial instruments of the Company are not exposed to other price risk. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Statement Line Items | |
18. Equity | (a) Share capital The Company’s authorized share capital is comprised of an unlimited number of common shares and an unlimited number of preferred shares issuable in one or more series, the latter of which was approved by the Company’s shareholders on September 15, 2017. The Board is authorized to determine the rights and privileges and number of shares of each series. As at December 31, 2018, there are 23,226,846 common shares and no preferred shares issued and outstanding. (b) Options The Company has a stock option plan (the “Plan”) that provides for the granting of options to directors, officers, employees and consultants. On June 18, 2018, the Company’s shareholders approved an amendment to increase the maximum number of common shares reserved for issuance under the Plan to the greater of i) 15% of the number of common shares issued and outstanding of the Company and ii) 3,800,000. The exercise price of an option is set at the time that such option is granted under the Plan. Each option converts into one common share of the Company upon exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of expiry, based on a maximum term of eight years. A summary of the status of the stock options and changes in the period is as follows: Options Outstanding (000s) Weighted Average Grant Date Fair Value $ Weighted Average Exercise Price $ Options Exercisable (000s) Weighted Average Exercise Price $ As at December 31, 2015 1,506 5.17 567 2.44 Options granted 1,127 0.63 1.89 Exercised (118 ) 2.10 Forfeited (213 ) 3.56 As at December 31, 2016 2,302 3.50 767 4.01 Options granted 984 1.87 4.60 Exercised (62 ) 2.39 Forfeited (125 ) 5.67 As at December 31, 2017 3,099 3.80 1,529 3.85 Options granted 468 1.26 4.13 Exercised (156 ) 1.99 Forfeited (303 ) 4.38 As at December 31, 2018 3,108 3.88 1,965 3.80 The above noted options have expiry dates ranging from November 2021 to November 2026. The fair value of each option granted was estimated using the Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2018, 2017 and 2016: 2018 2017 2016 Risk-free interest rate 2.07 – 2.47 % 1.08 – 1.90 % 0.53 – 1.35 % Expected life 5 years 5 years 5 years Expected volatility in market price of shares 50 % 50 % 40-50 % Expected dividend yield 0 % 0 % 0 % Expected forfeiture rate 15 % 15 % 15 % These options generally vest either immediately or monthly over a three to four year period after an initial one year cliff. Volatility is estimated using historical data of comparable publicly traded companies operating in a similar segment. Total share based compensation costs related to options and RSUs for the year ended December 31, 2018 were $1,320 (2017 - $1,343; 2016 – $1,067). (c) Restricted share units RSUs are granted to executives and other key employees. The fair value of an RSU at the grant date is equal to the market value of one of the Company’s common shares. Executives and other key employees are granted a specific number of RSUs for a given performance period based on their position and level of contribution. RSUs vest fully after three years of continuous employment from the date of grant and, in certain cases, if performance objectives are met as determined by the Board of Directors. On June 18, 2018, the Company’s shareholders approved an amendment to increase the maximum number of shares which may be made subject to issuance under RSUs awarded under the RSU Plan to 500,000. A summary of the outstanding RSUs and changes in the period is as follows: Number of RSUs (000s) Outstanding, December 31, 2015 100 Granted 73 Expired (28 ) Outstanding, December 31, 2016 145 Granted 71 Converted (41 ) Expired (30 ) Outstanding, December 31, 2017 145 Granted 164 Converted (30 ) Expired (33 ) Outstanding, December 31, 2018 246 (d) Warrants Warrants Outstanding (000s) Weighted Average Grant Date Fair Value $ Weighted Average Exercise Price $ Warrants Exercisable (000s) Weighted Average Exercise Price $ As at December 31, 2015 182 4.89 182 4.89 Warrants granted 1,696 1.23 2.69 As at December 31, 2016 1,878 2.90 881 2.84 Warrants expired (99 ) 0.90 7.35 As at December 31, 2017 1,779 2.66 783 2.28 As at December 31, 2018 1,779 2.66 982 2.42 The 1,779,453 warrants noted above have expiry dates ranging from January 2021 to September 2025. There are 583,333 warrants outstanding to Drawbridge Special Opportunities Fund LP, an affiliate of Fortress Credit Co LLC, that contain a net equity settlement option based on share prices on the open market at the time of exercise, and the exercise price attached to the outstanding warrants. These warrants are treated as a derivative financial liability subject to re-measurement at each reporting period end, and the fair value movement during the period is recognized in the consolidated statement of comprehensive loss. The fair value of the warrants outstanding was estimated using the Black-Scholes option pricing model with the following assumptions for the year ended December 31, 2018, 2017 and 2016: 2018 2017 2016 Risk-free interest rate 1.88 - 2.49 % 0.64 - 2.10 % 0.64 - 1.58 % Expected life 2-8 years 2-10 years 2-10 years Expected volatility in market price of shares 50 % 50 - 55 % 50 - 55 % Expected dividend yield 0 % 0 % 0 % Expected forfeiture rate 0 % 0 % 0 % On January 25, 2016, in connection with the original Postmedia Agreement, Mogo issued Postmedia five year warrants to acquire 1,196,120 common shares of Mogo at an exercise price of $2.96. 50% of the warrants were to vest in equal instalments over three years while the remaining 50% (the “Performance Warrants”) were to vest based on Mogo achieving certain quarterly revenue targets. During April 2018, the Postmedia Agreement was extended for an additional two years beyond the end of the current agreement, as described in Note 6. In connection with this amendment, Postmedia and Mogo agreed to change the vesting and term of the 598,060 Performance Warrants so that i) they vest equally over the remaining two years of the collaboration (50% in January 2020 and 50% in January 2021); and ii) their term is extended an additional two years, now expiring January 2023. |
Cash flow changes from financin
Cash flow changes from financing activities | 12 Months Ended |
Dec. 31, 2018 | |
Cash Flow Changes From Financing Activities | |
19. Cash flow changes from financing activities | Details of changes in financing activities for the year ended December 31, 2018 are as follows: Non-cash changes January 1, 2018 Cash flows Conversion Foreign exchange Fair Value/ Amortization December 31, 2018 Share capital 71,389 311 3,345 - - 75,045 Credit facility 57,110 18,414 - - 410 75,934 Debentures 39,680 1,410 - 535 - 41,625 Convertible debentures 12,864 - (1,735 ) - 652 11,781 Derivative financial liability 2,697 - - - (1,733 ) 964 Total 183,740 20,135 1,610 535 (671 ) 205,349 Details of changes in financing activities for the year ended December 31, 2017 are as follows: Non-cash changes January 1, 2017 Cash flows Conversion Foreign exchange Fair Value/ Amortization December 31, 2017 Share capital 45,655 24,397 1,337 - - 71,389 Credit facility 45,943 10,642 - - 525 57,110 Debentures 40,092 5 - (417 ) - 39,680 Convertible debentures - 12,460 - - 404 12,864 Derivative financial liability 490 - - - 2,207 2,697 Total 132,180 47,504 1,337 (417 ) 3,136 183,740 |
Subsequent event
Subsequent event | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Event | |
20. Subsequent event | On April 15, 2018, the Company announced the signing of a definitive agreement (the “Arrangement Agreement”) to merge the Company (the “Transaction”) with Difference Capital Financial Inc. (“Difference”). The Transaction will be accounted for as a business combination under IFRS 3, Business Combinations, On April 15, 2018, the Company announced the signing of a definitive agreement (the “Arrangement Agreement”) to merge the Company (the “Transaction”) with Difference Capital Financial Inc. (“Difference”). Under the terms of the Arrangement Agreement, each Mogo common share, excluding those already owned by Difference, will be exchanged for one Difference common share. As a result of the exchange, former Mogo shareholders will hold approximately 80% of the common shares of the resulting company (the “Resulting Issuer”), and former Difference shareholders will hold approximately 20% of the common shares of the Resulting Issuer. Following the combination, the Resulting Issuer is expected to be named Mogo Inc. As at December 31, 2018, Difference held 2,449,163 Mogo common shares. Michael Wekerle, Difference’s Executive Chair and largest minority shareholder, also directly held 2,550,972 Mogo common shares. Difference is an investment company with cash resources and a portfolio of investments in some of the premier private technology companies in Canada. The Transaction has been unanimously approved by the Special Committees and Board of Directors of both Mogo and Difference and is expected to close in the second quarter of 2019. The Transaction is subject to customary closing conditions, including required regulatory approvals, as well as approval by the Company’s shareholders. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies Policies Abstract | |
Revenue recognition | Revenue is comprised of subscription and services, interest revenue and loan fees from our legacy short-term loan products, which were phased out in the third quarter of 2018. The Company recognizes interest revenue, loan fees, nonsufficient funds fees, and any other fees or charges permitted by applicable laws and pursuant to the agreement with the borrower. We record revenue on a net basis for those sales in which we have in substance acted as an agent or broker in the transaction. Subscription and services is comprised of MogoProtect subscriptions, MogoCard revenue, MogoMortgage brokerage commissions, premium account revenues, loan protection premiums, MogoCrypto revenue, Bitcoin mining revenue, and other fees and charges. Subscription and services revenue is recognized when the underlying transactions have been completed or services are rendered and collection is reasonably assured. In 2018, the Company, through a third-party hosting agreement, joined a Bitcoin mining pool that provides transaction verification services on the Bitcoin network. The Company receives Bitcoin as compensation for these services, which are recognized as revenue and measured at fair value according to the spot price at the time they were mined. Bitcoin is considered earned upon the addition of a block to the Bitcoin blockchain at which time the economic benefit is received and can be reliably measured. Management has exercised judgement in determining this accounting treatment for the recognition of revenue from Bitcoin mining, as there is no definitive guidance in IFRS for the accounting of digital currency mining activities. Interest revenue represents interest on our long-term loan products. Our long-term loans fall into two categories: line of credit accounts and installment loans. For line of credit accounts, interest is recognized during the period based upon the balance outstanding and the contractual interest rate, and fees are recognized when assessed to the customer. For installment loans, revenue is recognized on an effective interest basis over the term of the loan and fees are recognized when assessed to the customer. For legacy short-term loans that the Company offered, loan fees were recognized when assessed to the customer |
Cost of revenue | Cost of revenue consists of provision for loan losses and transaction costs. Transaction costs are expenses that relate directly to the acquisition and processing of new customers (excluding marketing) and include expenses such as credit scoring fees, loan system transaction fees, insurance commission expense, and certain fees related to the MogoCard and MogoProtect programs. |
Loans receivable | Loans receivable consist of unsecured installment loans and lines of credit. The Company phased out its legacy short-term loan products from its business in the third quarter of 2018. Loans receivable are reported net of an allowance for loan losses. The Company maintains an allowance for loan losses that reduces the carrying value of loans identified as impaired to their estimated realizable amounts. |
Financial Instruments | Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the contract is discharged, cancelled or expires. |
Classification and measurement of financial assets | At initial recognition, financial assets are classified as measured at amortized cost, at fair value through profit or loss (“FVTPL”), or at fair value through other comprehensive income. IFRS 9, Financial Instruments, removes the previous IAS 39 classifications of loans and receivables, held to maturity, and available for sale. The Company measures financial assets at amortized cost if the financial asset is held within a “hold to collect” business model, and if the contractual cash flows associated with the financial asset are solely payments of principal and interest on the principal amount outstanding. Financial assets fall with a “hold to collect” business model when the Company’s primary objective is to collect contractual cash flows on the assets rather than selling them. Loans receivable are classified as amortized cost. They are initially recognized at fair value, and subsequently measured at amortized cost using the effective interest method, less any allowance for loan losses. |
Impairment of financial assets | Expected credit loss model The expected credit loss (“ECL”) model is a three-stage impairment approach used to measure the allowance for loan losses on all financial assets at each reporting period date. Loans are classified under one of three stages based on changes in credit quality since initial recognition. Stage 1 loans consist of performing loans that have not had a significant increase in credit risk since initial recognition. Loans that have experienced a significant increase in credit risk since initial recognition are classified as Stage 2, and loans considered to be credit-impaired are classified as Stage 3. The Company routinely refinances its existing customers, and accordingly, does not consider a modification to be an indicator of increased credit risk. The allowance for loan losses on both Stage 2 and Stage 3 loans is measured at lifetime ECLs. The allowance for loan losses on Stage 1 loans is measured at an amount equal to 12-month ECLs, representing the portion of lifetime ECLs expected to result from default events possible within 12 months of the reporting date. Assessment of significant increase in credit risk Significant increases in credit risk are assessed based on changes in probability of default of a financial asset subsequent to initial recognition. The Company uses past due information to determine whether credit risk has increased significantly since initial recognition. Financial assets are considered to have experienced a significant increase in credit risk and are reclassified to Stage 2 if a contractual payment is more than 30 days past due as at the reporting date. The Company defines default as the earlier of when a contractual loan payment is more than 90 days past due or when a loan becomes insolvent as a result of customer bankruptcy. Loans that have experienced a default event are considered to be credit-impaired and are reclassified as Stage 3 loans. Measurement of expected credit losses ECLs are measured as the calculated expected value of cash shortfalls over the remaining life of a financial instrument, using a probability-weighted approach that reflects reasonable and supportable information about past events, current conditions and forward looking indicators such as forecasts of future events and macroeconomic conditions. The measurement of ECLs primarily involves using this information to determine both the expected probability of a default event occurring and expected losses resulting from such default events. Loans are grouped according to product type, customer tenure and aging for the purpose of assessing ECLs. Scenarios and probability weights are re-assessed quarterly and subject to management review. |
Summary of IFRS 9 adoption impact | The Company has elected not to restate comparative information for prior periods with respect to classification and measurement (including impairment) requirements. Therefore, comparative periods have not been restated. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 were recognized in retained earnings as at 1 January 2018. Accordingly, the information presented for 2017 does not generally reflect the requirements of IFRS 9, but rather those of IAS 39. The following table summarizes the classifications and carrying amounts of the Company’s financial instruments as previously established under IAS 39 as at December 31, 2017, and the new IFRS 9 classifications and carrying amounts established as at January 1, 2018. Original classification under IAS 39 New classification under IFRS 9 Original carrying amount, IAS 39 New carrying amount, IFRS 9 Cash Loans and receivables Amortized cost 40,560 40,560 Loans receivable, net Loans and receivables Amortized cost 73,460 68,325 Accounts payable and accruals Amortized cost Amortized cost 7,468 7,468 Credit facilities Amortized cost Amortized cost 57,110 57,110 Debentures Amortized cost Amortized cost 39,680 39,680 Convertible debentures Amortized cost Amortized cost 12,864 12,864 Derivative financial liabilities FVTPL FVTPL 2,697 2,697 Financial assets reclassified from loans and receivables under IAS 39 to amortized cost under IFRS 9 were previously also subject to the amortized cost measurement method under IAS 39. The following table summarizes the transition adjustment required upon adoption of IFRS 9 as at January 1, 2018: As at January 1, 2018 Original carrying amount, IAS 39 Transition Adjustment (1) New carrying amount, IFRS 9 Gross loans receivable 80,894 - 80,894 Allowance for loan losses (7,434 ) (5,135 ) (12,569 ) Loans receivable, net 73,460 (5,135 ) 68,325 Deficit (63,627 ) (5,135 ) (68,762 ) Loss per share (1.07 ) (0.28 ) (1.35 ) (1) Re-measurement of the allowance for loan losses relates to the application of the ECL impairment methodology effective upon transition to IFRS 9. Under IFRS 9, credit losses are recognized earlier than under IAS 39, since it replaces the “incurred loss” model in IAS 39 with “ECL” model. This adjustment was recorded to the opening deficit as at January 1, 2018. Accounts payable and accruals, deferred revenue, credit facilities, debentures, and convertible debentures are classified as “other financial liabilities” and are initially recorded at fair value, net of any transaction costs incurred. Subsequently, these items are measured at amortized cost using the effective interest method. Derivative financial liabilities are classified as “financial liabilities at fair value through profit or loss” and are initially and subsequently measured at fair value. The subsequent changes in fair value are recorded as a gain or loss in the consolidated statements of comprehensive loss. The Company has also adopted consequential amendments to IFRS 7 Financial Instruments: Disclosures that are applied to disclosures about 2018 but have not been generally applied to comparative information. |
Property and equipment | All property and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items of property and equipment. All assets having limited useful lives are depreciated using the declining balance method at rates intended to depreciate the cost of assets over their estimated useful lives except leasehold improvements, which are depreciated over the term of lease. The depreciation rate for each class of asset during the current and comparative period are as follows: Rate Computer equipment 30 % Computer equipment – Bitcoin rigs 75 % Furniture and fixtures 20 % Leasehold improvements Term of lease The useful lives of items of property and equipment are reviewed periodically and the useful life is altered if estimates have changed significantly. |
Intangible assets | Intangible assets are stated at cost less accumulated amortization and impairment losses. Intangible assets include both internally generated and acquired software with finite useful lives. Internally generated software costs primarily consist of salaries and payroll-related costs for employees directly involved in the development efforts and fees paid to outside consultants. Amortization is recorded at rates intended to amortize the cost of the intangible assets over their estimated useful lives as follows: Rate Software - Internally generated 5 years straight line Software - Acquired 30% declining balance Development costs, including those related to the development of software, are recognized as an intangible asset when the Company can demonstrate: · the technical feasibility of completing the intangible asset so that it will be available for use or sale; · its intention to complete and its ability to use or sell the asset; · how the asset will generate future economic benefits; · the availability of resources to complete the asset; and · the ability to measure reliably the expenditure during development. Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. During the period of development, the asset is tested for impairment annually. |
Impairment of non-financial assets | At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating units (“CGU”) to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGU’s, or otherwise they are allocated to the smallest group of CGU’s for which a reasonable and consistent allocation basis can be identified. The Company has identified its intangible asset, the digital platform, as one CGU for the purpose of assessing impairment as synergies are realized between its digital products such that the products cannot be considered in insolation. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statements of comprehensive loss. Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized immediately in the consolidated statements of comprehensive loss. |
Foreign currencies | Transactions in foreign currencies are initially recorded at the foreign currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency of the Company at the rates prevailing on the balance sheet date. For the purpose of presenting consolidated financial statements, the assets and liabilities of foreign operations with a functional currency other than Canadian dollars are translated into Canadian dollars using exchange rates prevailing as at the balance sheet date. |
Leases | Leases which do not transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are classified as operating leases. Leases entered into by the Company are solely operating leases, with costs recognized within general and administration expenses in the consolidated statements of comprehensive loss in the period incurred. |
Income taxes | Income tax expense is comprised of current and deferred tax. Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. |
Investment tax credits | The benefits of investment tax credits for scientific research and development expenditures are recognized in the year the qualifying expenditure is made, providing there is reasonable assurance of recovery. |
Provisions | Provisions are recognized when the Company has a present legal or constructive obligation that is the result of a past event, when it is probable that the Company will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risk specific to the obligation. |
Earnings per share | The computation of earnings per share is based on the weighted average number of shares outstanding during the period. Diluted earnings per share are computed in a similar way to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares assuming the exercise of share options or warrants, or conversion of convertible debentures, if dilutive. |
Share-based payments | The Company measures equity settled stock options granted based on their fair value at the grant date and recognizes compensation expense over the vesting period. Measurement inputs include the Company’s share price on the measurement date, the exercise price of the option or warrant, the expected volatility of the Company’s shares, the expected life of the options or warrants, and the risk-free rate of return. Dividends are not factored in as the Company does not expect to pay dividends in the foreseeable future. Expected forfeitures are estimated at the date of grant and subsequently adjusted if further information indicates actual forfeitures may vary from the original estimate. Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payments transactions. In situations where equity instruments are issued and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. For each restricted share unit (“RSU”) granted, compensation expense is recognized equal to the market value of one common share at the date of grant based on the number of RSUs expected to vest, recognized over the term of the vesting period, with a corresponding credit to contributed surplus. |
Significant accounting judgements, estimates and assumptions | The preparation of the consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, and the reported amount of revenues and expenses during the year. Actual results may differ from these estimates. Estimates, assumptions, and judgments are reviewed on an ongoing basis. Revisions to accounting estimates are recognized on a prospective basis beginning from the period in which they are revised. |
Significant accounting judgements | The following are the critical judgements, apart from those involving estimations that have been made in the process of applying the Company’s accounting policies, which have the most significant effect on the amounts recognized in the consolidated financial statements. |
Capitalization of intangible assets | In applying its accounting policy for costs incurred during the development phase for new software, the Company must determine whether the criteria for capitalization have been met. The most difficult and subjective estimate is whether a project will generate probable future economic benefits. Management considers all appropriate facts and circumstances in making this assessment including historical experience, costs and anticipated future economic conditions. |
Significant accounting estimates and assumptions | These estimates and assumptions are based on management’s historical experience, best knowledge of current events, conditions and actions that the Company may undertake in the future and other factors that management believes are reasonable under the circumstances. These estimates and assumptions are reviewed periodically, and the effect of a change in accounting estimate or assumption is recognized prospectively by including it in the consolidated statement of comprehensive loss in the period of the change and in any future periods affected. The areas where estimates and assumptions have the most significant effect on the amounts recognized in the consolidated financial statements include the following: |
Valuation of long-lived assets and asset impairment | Estimated useful lives of property and equipment and intangible assets are based on management’s judgment and experience. When management identifies that the actual useful lives for these assets differ materially from the estimates used to calculate depreciation and amortization, that change is adjusted prospectively. Due to the significant investment in intangible assets by the Company, variations between actual and estimated useful lives could impact operating results both positively and negatively. Asset lives, depreciation and amortization methods, and residual values are reviewed periodically. The Company periodically assesses the recoverability of values assigned to long-lived assets after considering potential impairment indicated by such factors as significant changes in technological, market, economic or legal environment, business and market trends, future prospects, current market value and other economic factors. In performing its review of recoverability, management estimates either the value in use or fair value less costs to sell. |
Allowance for loan losses | Our provision for loan losses consists of amounts charged to the consolidated statement of comprehensive loss during the period to maintain an adequate allowance for loan losses. Our allowance for loan losses represents our estimate of the expected credit losses inherent in our existing loan portfolio and is based on a variety of factors, including the composition and quality of the portfolio, loan-specific information gathered through our collection efforts, delinquency levels, our historical charge-off and loss experience, our expectations of future loan performance, and general forward-looking macroeconomic conditions. The methodology and assumptions used in setting the loan loss allowance are reviewed regularly to reduce any difference between loss estimates and actual loss experience. |
Fair value of share-based payments | The Company uses the Black-Scholes valuation model to determine the fair value of equity-settled stock options. Management exercises judgment in determining certain inputs to this model including the expected life of the options, expected volatility and forfeiture rates, and expected dividend yield. Variation in actual results for any of these inputs will result in a different fair value of the stock option as compared to the original estimate. |
Income taxes | Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by tax authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. |
Derivative financial liability | Warrants issued with a cashless exercise option are recorded at fair value, and classified as a derivative financial liability at initial recognition. Subsequent changes in fair value recorded as a gain or loss in the consolidated statements of comprehensive loss. As the warrants are exercised, the value of the recorded liability will be included in share capital along with the proceeds from the exercise. If these warrants expire, the related liability is reversed through the consolidated statements of comprehensive loss. |
Recent IFRS standards adopted in 2018 | We adopted the following new accounting standards and amendments, which are effective for our interim and annual consolidated financial statements commencing January 1, 2018. IFRS 9, Financial Instruments On January 1, 2018, the Company adopted IFRS 9, Financial Instruments Recognition and Measurement IFRS 9 is effective for annual periods beginning on or after January 1, 2018. As permitted by the standard, the Company has chosen not to restate comparative consolidated financial statements. Refer to “Summary of IFRS 9 adoption impact” earlier within Note 3 to these consolidated financial statements for further discussion. IFRS 15, Revenue from Contacts with Customers On January 1, 2018, the Company adopted IFRS 15 – Revenue from Contracts with Customers IFRS 9 – Financial Instruments IFRS 15 is effective for annual periods beginning on or after January 1, 2018, and supersedes IAS 11, Construction Contracts, and IAS 18, Revenue, as well as various International Financial Reporting Interpretative Committee ( “ ” “ ” |
New IFRS standards and interpretations not yet applied | IFRS 16, Leases In January 2016, the IASB issued IFRS 16, Leases Leases IFRS 16 removes the distinction between operating and finance leases from the lessee’s perspective and introduces a single lessee accounting model. The standard requires a lessee to recognize a “right of use” asset and a corresponding lease liability for substantially all leases, with the exception of leases with terms less than 12 months and leases of low value assets. Requirements for lessor accounting are largely unchanged from IAS 17. IFRS 16 will also result in reclassification of the nature of lease expenses to depreciation and interest expense, from their classification of “premises expense” under IAS 17. IFRS 16 offers a range of transition options. The Company plans to apply IFRS 16 using the modified retrospective approach. Therefore the cumulative effect of adopting IFRS 16, if any, will be recognized as an adjustment to opening retained earnings as at January 1, 2019, with no restatement of comparative information. Under this method using the practical expedient available the Company is planning to recognize the right of use asset equal to the lease liability. Additionally, the Company will elect to apply the standard to contracts that were previously identified as leases applying IAS 17 and IFRIC 4. Based on the information currently available, the Company estimates that it will recognize a lease liability and right to use asset of approximately $6.0 million to $7.5 million as at January 1, 2019. This preliminary estimate is subject to adjustment as management continues to monitor and refine certain elements of its IFRS 16 adoption in advance of Q1 2019 reporting. The Company is on track to complete its implementation of IFRS 16 effective January 1, 2019. Further, the Company has discussed the impact of IFRS 16 adoption with its lender and concluded that the adoption of the Standard will have no impact on the financial covenants as described in Note 9. |
Significant accounting polici_3
Significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies Abstract | |
Schedule of Classifications and carrying amounts of Company's financial instruments | Original classification under IAS 39 New classification under IFRS 9 Original carrying amount, IAS 39 New carrying amount, IFRS 9 Cash Loans and receivables Amortized cost 40,560 40,560 Loans receivable, net Loans and receivables Amortized cost 73,460 68,325 Accounts payable and accruals Amortized cost Amortized cost 7,468 7,468 Credit facilities Amortized cost Amortized cost 57,110 57,110 Debentures Amortized cost Amortized cost 39,680 39,680 Convertible debentures Amortized cost Amortized cost 12,864 12,864 Derivative financial liabilities FVTPL FVTPL 2,697 2,697 |
Schedule of Summarization of financial assets' transition adjustment required upon adoption | As at January 1, 2018 Original carrying amount, IAS 39 Transition Adjustment (1) New carrying amount, IFRS 9 Gross loans receivable 80,894 - 80,894 Allowance for loan losses (7,434 ) (5,135 ) (12,569 ) Loans receivable, net 73,460 (5,135 ) 68,325 Deficit (63,627 ) (5,135 ) (68,762 ) Loss per share (1.07 ) (0.28 ) (1.35 ) |
Schedule of Depreciation Rate Class of Asset | Rate Computer equipment 30 % Computer equipment – Bitcoin rigs 75 % Furniture and fixtures 20 % Leasehold improvements Term of lease |
Schedule of Intangible Assets Estimated Useful Lives | Rate Software - Internally generated 5 years straight line Software - Acquired 30% declining balance |
Loans receivable (Tables)
Loans receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable Tables Abstract | |
Schedule of Gross Loans Receivable | December 31, 2018 December 31, 2017 Current 62,439 46,977 Non-Current 39,317 33,917 101,756 80,894 |
Schedule of Age Analysis of Loans Receivable | As at December 31, 2018 Stage 1 Stage 2 Stage 3 Total Not past due 88,035 - 99 88,134 1-30 days past due 3,097 - 257 3,354 31-60 days past due - 1,838 491 2,329 61-90 days past due - 1,240 469 1,709 91-180 days past due - - 6,230 6,230 Gross loans receivable 91,132 3,078 7,546 101,756 Allowance for loan losses (6,951 ) (2,118 ) (6,340 ) (15,409 ) Loans receivable, net 84,181 960 1,206 86,347 The following table presents the aging of loans as at December 31, 2017 and 2016 in accordance with IAS 39. In contrast to IFRS 9, these receivables were aged on an individual payment basis rather than at the customer balance level: As at December 31, Age analysis of loans receivable 2017 2016 Not past due 73,965 61,648 1-30 days past due 1,546 1,338 31-60 days past due 1,296 1,205 61-90 days past due 1,183 1,223 91-180 days past due 2,904 3,772 Gross loans receivable 80,894 69,186 Allowance for loan losses (7,434 ) (7,311 ) Loans receivable, net 73,460 61,875 |
Schedule of Allowance for Loan Losses | Stage 1 Stage 2 Stage 3 Total Balance as at January 1, 2018 6,853 1,579 4,137 12,569 Gross loans originated 5,354 - - 5,354 Principal payments and net re-measurement of allowance (3,688 ) (176 ) 334 (3,530 ) Transfers to: Stage 1 – 12 month ECLs 5 (24 ) (16 ) (35 ) Stage 2 – Lifetime ECLs (270 ) 2,116 - 1,846 Stage 3 – Lifetime ECLs (1,303 ) (1,377 ) 17,451 14,771 Net amounts written off against allowance - - (15,566 ) (15,566 ) Balance as at December 31, 2018 6,951 2,118 6,340 15,409 The overall changes in the allowance for loan losses are summarized below for December 31, 2018 and 2017: Allowance for loan losses 2018 2017 Balance, beginning of period 7,434 7,311 January 1, 2018 IFRS 9 adjustment 5,135 - Provision for loan losses 18,406 13,343 Charge offs (15,566 ) (13,220 ) Balance, end of period 15,409 7,434 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions Tables Abstract | |
Schedule of Aggregate compensation of KMP | 2018 2017 Salary and short term benefits 2,087 3,281 Share – based payments 489 632 2,576 3,913 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property And Equipment Tables Abstract | |
Schedule of property and equipment | Computer equipment Furniture and fixtures Leasehold improvements Total Cost Balance at December 31, 2016 2,067 1,585 2,592 6,244 Additions 271 30 65 366 Disposals (1 ) (115 ) (148 ) (264 ) Balance at December 31, 2017 2,337 1,500 2,509 6,346 Additions 3,814 2 - 3,816 Impairment (1,105 ) - - (1,105 ) Balance at December 31, 2018 5,046 1,502 2,509 9,057 Accumulated depreciation Balance at December 31, 2016 1,031 612 679 2,322 Additions 357 168 457 982 Disposals (1 ) (32 ) (131 ) (164 ) Balance at December 31, 2017 1,387 748 1,005 3,140 Additions 2,285 151 465 2,901 Balance at December 31, 2018 3,672 899 1,470 6,041 Net book value At December 31, 2017 950 752 1,504 3,206 At December 31, 2018 1,374 603 1,039 3,016 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets Tables Abstract | |
Schedule of intangible assets | Internally generated – Completed Internally generated – In Process Vendor Purchases Total Cost Balance at December 31, 2016 8,593 6,333 3,340 18,266 Additions - 5,143 11 5,154 Transfers 7,935 (7,935 ) - - Balance at December 31, 2017 16,528 3,541 3,351 23,420 Additions - 7,730 5 7,735 Transfers 10,373 (10,373 ) - - Balance at December 31, 2018 26,901 898 3,356 31,155 Accumulated depreciation Balance at December 31, 2016 3,122 - 2,895 6,017 Additions 2,369 - 137 2,506 Balance at December 31, 2017 5,491 - 3,032 8,523 Additions 3,883 - 91 3,974 Balance at December 31, 2018 9,374 - 3,123 12,497 Net book value At December 31, 2017 11,037 3,541 319 14,897 At December 31, 2018 17,527 898 233 18,658 |
Debentures (Tables)
Debentures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debentures Tables Abstract | |
Schedule of contractual repayment dates | 2019 - 2020 27,968 2021 9,787 2022 3,870 41,625 |
Convertible debentures (Tables)
Convertible debentures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Debentures Tables Abstract | |
Schedule of convertible debentures | Liability component of convertible debentures Equity component of convertible debentures Net book value 2018 Net book value 2017 Convertible debentures 11,973 939 12,912 14,905 Transaction costs (1,248 ) (98 ) (1,346 ) (1,472 ) Net proceeds 10,725 841 11,566 13,433 Accretion in carrying value of debenture liability 1,056 - 1,056 404 11,781 841 12,622 13,837 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes Tables Abstract | |
Schedule of provision for income taxes | 2018 2017 Current tax expense - - Provision for income taxes - - |
Schedule of statutory income tax rates | 2018 2017 Canadian federal and provincial recovery of income taxes using statutory rate of 27% (2017 – 27%) (5,946 ) (5,381 ) Change in unrecognized deductible temporary differences and unused tax losses 6,098 4,397 Permanent differences and other (152 ) 984 Provision for income taxes - - |
Schedule of deferred tax assets | 2018 2017 Unused tax losses 141 776 |
Schedule of deferred tax liabilities | 2018 2017 Convertible debentures 67 233 Deferred cost 74 111 Intangible assets - 250 Investment tax credits - - Property and equipment - 182 141 776 |
Deductible temporary differences deferred tax assets | 2018 2017 Property and equipment 2,250 - Intangible assets 4,368 1,412 Debentures 1,658 1,123 Financing costs 2,390 4,161 Research and development expenditures 1,163 1,342 Other 21 326 11,850 8,364 |
Deductible temporary unused tax losses | 2018 2017 Expires 2024 610 610 Expires 2025 1,075 1,075 Expires 2026 2,136 2,136 Expires 2027 5,203 5,203 Expires 2028 2,064 2,064 Expires 2029 4,663 4,663 Expires 2030 3,698 3,698 Expires 2031 1,614 1,614 Expires 2032 4,849 4,849 Expires 2033 10,454 10,454 Expires 2034 7,416 7,416 Expires 2035 9,835 9,835 Expires 2036 19,008 19,008 Expires 2037 19,824 19,824 Expires 2038 16,277 - 108,726 92,449 |
Expenses by nature (Tables)
Expenses by nature (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Expenses By Nature Tables Abstract | |
Expenses by nature | 2018 2017 2016 Personnel expense 16,702 17,869 18,552 Marketing 8,291 5,916 5,277 Depreciation and amortization 7,062 4,045 2,707 Hosting and software licences 4,110 2,075 1,999 Professional services 1,281 1,389 1,628 Premises 1,036 1,053 1,235 Insurance and licenses 1,091 470 391 Others 3,506 2,899 2,614 43,079 35,716 34,403 |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loss Per Share Tables Abstract | |
Schedule of consolidated comprehensive loss | 2018 2017 2016 Loss attributed to shareholders (22,022 ) (19,729 ) (17,092 ) Basic weighted average number of shares (in 000s) 22,714 18,381 18,251 Basic and diluted loss per share (0.97 ) (1.07 ) (0.94 ) |
Capital management (Tables)
Capital management (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Capital Management Tables Abstract | |
Schedule of capital management | 2018 2017 Share capital 75,045 71,389 Deficit (90,784 ) (63,627 ) Debentures 41,625 39,680 Convertible debentures 12,622 13,837 Credit facilities 75,934 57,110 |
Fair value of financial instr_2
Fair value of financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Of Financial Instruments Tables Abstract | |
Schedule of fair value | December 31, 2018 December 31, 2017 Total Fair Value Total Carrying Value Total Fair Value Total Carrying Value Loans Receivable – Non-Current (Level 3) 41,595 39,317 36,567 33,917 |
Nature and extent of risk ari_2
Nature and extent of risk arising from financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Nature And Extent Of Risk Arising From Financial Instruments | |
Foreign currency risk | December 31, 2018 December 31, 2017 December 31, 2016 Cash 874 171 65 Debentures 4,770 4,770 4,870 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options [Member] | |
Statement Line Items [Line Items] | |
Schedule of Stock Options | Options Outstanding (000s) Weighted Average Grant Date Fair Value $ Weighted Average Exercise Price $ Options Exercisable (000s) Weighted Average Exercise Price $ As at December 31, 2015 1,506 5.17 567 2.44 Options granted 1,127 0.63 1.89 Exercised (118 ) 2.10 Forfeited (213 ) 3.56 As at December 31, 2016 2,302 3.50 767 4.01 Options granted 984 1.87 4.60 Exercised (62 ) 2.39 Forfeited (125 ) 5.67 As at December 31, 2017 3,099 3.80 1,529 3.85 Options granted 468 1.26 4.13 Exercised (156 ) 1.99 Forfeited (303 ) 4.38 As at December 31, 2018 3,108 3.88 1,965 3.80 |
Schedule of fair value of options granted | 2018 2017 2016 Risk-free interest rate 2.07 – 2.47 % 1.08 – 1.90 % 0.53 – 1.35 % Expected life 5 years 5 years 5 years Expected volatility in market price of shares 50 % 50 % 40-50 % Expected dividend yield 0 % 0 % 0 % Expected forfeiture rate 15 % 15 % 15 % |
RSU [Member] | |
Statement Line Items [Line Items] | |
Schedule of Restricted share units | Number of RSUs (000s) Outstanding, December 31, 2015 100 Granted 73 Expired (28 ) Outstanding, December 31, 2016 145 Granted 71 Converted (41 ) Expired (30 ) Outstanding, December 31, 2017 145 Granted 164 Converted (30 ) Expired (33 ) Outstanding, December 31, 2018 246 |
Warrants [Member] | |
Statement Line Items [Line Items] | |
Schedule of Stock Options | Warrants Outstanding (000s) Weighted Average Grant Date Fair Value $ Weighted Average Exercise Price $ Warrants Exercisable (000s) Weighted Average Exercise Price $ As at December 31, 2015 182 4.89 182 4.89 Warrants granted 1,696 1.23 2.69 As at December 31, 2016 1,878 2.90 881 2.84 Warrants expired (99 ) 0.90 7.35 As at December 31, 2017 1,779 2.66 783 2.28 As at December 31, 2018 1,779 2.66 982 2.42 |
Schedule of fair value of options granted | 2018 2017 2016 Risk-free interest rate 1.88 - 2.49 % 0.64 - 2.10 % 0.64 - 1.58 % Expected life 2-8 years 2-10 years 2-10 years Expected volatility in market price of shares 50 % 50 - 55 % 50 - 55 % Expected dividend yield 0 % 0 % 0 % Expected forfeiture rate 0 % 0 % 0 % |
Cash flow changes from financ_2
Cash flow changes from financing activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash Flow Changes From Financing Activities Tables Abstract | |
Schedule of changes in financing activities | Non-cash changes January 1, 2018 Cash flows Conversion Foreign exchange Fair Value/ Amortization December 31, 2018 Share capital 71,389 311 3,345 - - 75,045 Credit facility 57,110 18,414 - - 410 75,934 Debentures 39,680 1,410 - 535 - 41,625 Convertible debentures 12,864 - (1,735 ) - 652 11,781 Derivative financial liability 2,697 - - - (1,733 ) 964 Total 183,740 20,135 1,610 535 (671 ) 205,349 Details of changes in financing activities for the year ended December 31, 2017 are as follows: Non-cash changes January 1, 2017 Cash flows Conversion Foreign exchange Fair Value/ Amortization December 31, 2017 Share capital 45,655 24,397 1,337 - - 71,389 Credit facility 45,943 10,642 - - 525 57,110 Debentures 40,092 5 - (417 ) - 39,680 Convertible debentures - 12,460 - - 404 12,864 Derivative financial liability 490 - - - 2,207 2,697 Total 132,180 47,504 1,337 (417 ) 3,136 183,740 |
Nature of operations (Details N
Nature of operations (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Nature Of Operations Details Narrative Abstract | |
County or state of incorporation | British Columbia |
Date of incorporation | Aug. 26, 2003 |
Significant accounting polici_4
Significant accounting policies (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Line Items [Line Items] | |||
Cash | $ 20,439 | $ 40,560 | [1] |
Convertible debentures | 12,622 | $ 13,837 | |
Original carrying amount, IAS 39 [Member] | December 31, 2017 [Member] | |||
Statement Line Items [Line Items] | |||
Cash | 40,560 | ||
Loans receivable, net | 73,460 | ||
Accounts payable and accruals | 7,468 | ||
Credit facilities | 57,110 | ||
Debentures | 39,680 | ||
Convertible debentures | 12,864 | ||
Derivative financial liabilities | 2,697 | ||
New carrying amount, IFRS 9 [Member] | January 1, 2018 [Member] | |||
Statement Line Items [Line Items] | |||
Cash | 40,560 | ||
Loans receivable, net | 68,325 | ||
Accounts payable and accruals | 7,468 | ||
Credit facilities | 57,110 | ||
Debentures | 39,680 | ||
Convertible debentures | 12,864 | ||
Derivative financial liabilities | $ 2,697 | ||
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Significant accounting polici_5
Significant accounting policies (Details 1) - CAD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Statement Line Items [Line Items] | ||||||
Gross loans receivable | $ 101,756 | $ 80,894 | $ 69,186 | |||
Allowance for loan losses | (15,409) | (7,434) | (7,311) | |||
Loans receivable, net | 86,347 | 73,460 | [1] | $ 61,875 | ||
Deficit | $ (90,784) | $ (63,627) | [1] | |||
Loss per share | $ (0.97) | $ (1.07) | [2] | $ (0.94) | [2] | |
Original carrying amount, IAS 39 [Member] | January 1, 2018 [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Gross loans receivable | $ 80,894 | |||||
Allowance for loan losses | (7,434) | |||||
Loans receivable, net | 73,460 | |||||
Deficit | $ (63,627) | |||||
Loss per share | $ (1.07) | |||||
Transition Adjustment [Member] | January 1, 2018 [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Gross loans receivable | [3] | |||||
Allowance for loan losses | [3] | (5,135) | ||||
Loans receivable, net | [3] | (5,135) | ||||
Deficit | [3] | $ (5,135) | ||||
Loss per share | $ (0.28) | |||||
New carrying amount, IFRS 9 [Member] | January 1, 2018 [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Gross loans receivable | $ 80,894 | |||||
Allowance for loan losses | (12,569) | |||||
Loans receivable, net | 68,325 | |||||
Deficit | $ (68,762) | |||||
Loss per share | $ (1.35) | |||||
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. | |||||
[2] | (1)The consolidated statement of comprehensive loss for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. | |||||
[3] | Re-measurement of the allowance for loan losses relates to the application of the ECL impairment methodology effective upon transition to IFRS 9. This adjustment was recorded to the opening deficit as at January 1, 2018. |
Significant accounting polici_6
Significant accounting policies (Details 2) | 12 Months Ended |
Dec. 31, 2018 | |
Computer equipment [Member] | |
Statement Line Items [Line Items] | |
Depreciation rate | 30% |
Computer equipment – Bitcoin rigst [Member] | |
Statement Line Items [Line Items] | |
Depreciation rate | 75% |
Furniture and fixtures [Member] | |
Statement Line Items [Line Items] | |
Depreciation rate | 20% |
Leasehold improvements [Member] | |
Statement Line Items [Line Items] | |
Depreciation rate | Term of lease |
Significant accounting polici_7
Significant accounting policies (Details 3) | 12 Months Ended |
Dec. 31, 2018 | |
Software - Internally generated [Member] | |
Statement Line Items [Line Items] | |
Amortization rate | 5 years straight line |
Software - Acquired [Member] | |
Statement Line Items [Line Items] | |
Amortization rate | 30% declining balance |
Significant accounting polici_8
Significant accounting policies (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies Details Narrative Abstract | |
Description of recognize a lease liability and right to use assets | the Company estimates that it will recognize a lease liability and right to use asset of approximately $6.0 million to $7.5 million as at January 1, 2019. |
Loans receivable (Details)
Loans receivable (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loans Receivable Details Abstract | |||
Current | $ 62,439 | $ 46,977 | |
Non-Current | 39,317 | 33,917 | |
Gross loans receivable | $ 101,756 | $ 80,894 | $ 69,186 |
Loans receivable (Details 1)
Loans receivable (Details 1) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | ||||
Gross loans receivable | $ 101,756 | $ 80,894 | $ 69,186 | |
Allowance for loan losses | (15,409) | (7,434) | (7,311) | |
Loans receivable, net | 86,347 | 73,460 | [1] | 61,875 |
Stage 1 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 91,132 | |||
Allowance for loan losses | (6,951) | |||
Loans receivable, net | 84,181 | |||
Stage 2 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 3,078 | |||
Allowance for loan losses | (2,118) | |||
Loans receivable, net | 960 | |||
Stage 3 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 7,546 | |||
Allowance for loan losses | (6,340) | |||
Loans receivable, net | 1,206 | |||
Not past due [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 88,134 | 73,965 | 61,648 | |
Not past due [Member] | Stage 1 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 88,035 | |||
Not past due [Member] | Stage 2 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | ||||
Not past due [Member] | Stage 3 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 99 | |||
1-30 days past due [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 3,354 | 1,546 | 1,338 | |
1-30 days past due [Member] | Stage 1 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 3,097 | |||
1-30 days past due [Member] | Stage 2 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | ||||
1-30 days past due [Member] | Stage 3 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 257 | |||
31-60 days past due [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 2,329 | 1,296 | 1,205 | |
31-60 days past due [Member] | Stage 1 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | ||||
31-60 days past due [Member] | Stage 2 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 1,838 | |||
31-60 days past due [Member] | Stage 3 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 491 | |||
61-90 days past due [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 1,709 | 1,183 | 1,223 | |
61-90 days past due [Member] | Stage 1 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | ||||
61-90 days past due [Member] | Stage 2 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 1,240 | |||
61-90 days past due [Member] | Stage 3 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 469 | |||
91-180 days past due [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | 6,230 | $ 2,904 | $ 3,772 | |
91-180 days past due [Member] | Stage 1 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | ||||
91-180 days past due [Member] | Stage 2 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | ||||
91-180 days past due [Member] | Stage 3 [Member] | ||||
Statement Line Items [Line Items] | ||||
Gross loans receivable | $ 6,230 | |||
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Loans receivable (Details 2)
Loans receivable (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2018CAD ($) | |
Statement Line Items [Line Items] | |
Allowance for loan losses beginning balance | $ 12,569 |
Gross loans originated | 5,354 |
Principal payments and net re-measurement of allowance | (3,530) |
Transfers to: Stage 1 12 month ECLs | (35) |
Transfers to: Stage 2 Lifetime ECLs | 1,846 |
Transfers to: Stage 3 Lifetime ECLs | 14,771 |
Net amounts written off against allowance | (15,566) |
Allowance for loan losses ending balance | 15,409 |
Stage 1 [Member] | |
Statement Line Items [Line Items] | |
Allowance for loan losses beginning balance | 6,853 |
Gross loans originated | 5,354 |
Principal payments and net re-measurement of allowance | (3,688) |
Transfers to: Stage 1 12 month ECLs | 5 |
Transfers to: Stage 2 Lifetime ECLs | (270) |
Transfers to: Stage 3 Lifetime ECLs | (1,303) |
Net amounts written off against allowance | |
Allowance for loan losses ending balance | 6,951 |
Stage 2 [Member] | |
Statement Line Items [Line Items] | |
Allowance for loan losses beginning balance | 1,579 |
Gross loans originated | |
Principal payments and net re-measurement of allowance | (176) |
Transfers to: Stage 1 12 month ECLs | (24) |
Transfers to: Stage 2 Lifetime ECLs | 2,116 |
Transfers to: Stage 3 Lifetime ECLs | (1,377) |
Net amounts written off against allowance | |
Allowance for loan losses ending balance | 2,118 |
Stage 3 [Member] | |
Statement Line Items [Line Items] | |
Allowance for loan losses beginning balance | 4,137 |
Gross loans originated | |
Principal payments and net re-measurement of allowance | 334 |
Transfers to: Stage 1 12 month ECLs | (16) |
Transfers to: Stage 2 Lifetime ECLs | |
Transfers to: Stage 3 Lifetime ECLs | 17,451 |
Net amounts written off against allowance | (15,566) |
Allowance for loan losses ending balance | $ 6,340 |
Loans receivable (Details 3)
Loans receivable (Details 3) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans Receivable Details 3Abstract | ||
Allowance for loan losses, Beginning | $ 7,434 | $ 7,311 |
January 1, 2018 IFRS 9 adjustment | 5,135 | |
Provision for loan losses | 18,406 | 13,343 |
Charge offs | (15,566) | (13,220) |
Allowance for loan losses, Ending | $ 15,409 | $ 7,434 |
Loans receivable (Details Narra
Loans receivable (Details Narrative) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
Description for terms of loans | The terms of the loans vary from 2-5 years for installment loans and 1 year for lines of credit. The Company phased out its legacy short-term loan products from its business in the third quarter of 2018. | |
Provision for loan losses, recoveries | $ 2,039 | $ 1,934 |
Related party transactions (Det
Related party transactions (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions Details Abstract | ||
Salary and short term benefit | $ 2,087 | $ 3,281 |
Share - based payments | 489 | 632 |
Total | $ 2,576 | $ 3,913 |
Related party transactions (D_2
Related party transactions (Details Narrative) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Minimum [member] | ||
Statement Line Items [Line Items] | ||
Interest rates | 10.00% | 12.00% |
Maximum [member] | ||
Statement Line Items [Line Items] | ||
Interest rates | 18.00% | 18.20% |
Debentures [Member] | ||
Statement Line Items [Line Items] | ||
Due to related parties | $ 3,287 | $ 3,145 |
Interest on debenture | $ 538 | $ 498 |
Debentures [Member] | Minimum [member] | ||
Statement Line Items [Line Items] | ||
Interest rates | 12.00% | 15.00% |
Debentures [Member] | Maximum [member] | ||
Statement Line Items [Line Items] | ||
Interest rates | 18.00% | 18.00% |
Deferred cost (Details Narrativ
Deferred cost (Details Narrative) - CAD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 25, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | [1] | |
Statement Line Items [Line Items] | ||||
Deferred cost | $ 273 | $ 410 | ||
Postmedia Agreement [Member] | ||||
Statement Line Items [Line Items] | ||||
Program setup fee paid to postmedia | $ 1,171 | |||
Term of agreement | 3 years | |||
Amount of promotional commitments receivable from postmedia | $ 50,000 | |||
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Property and equipment (Details
Property and equipment (Details) - CAD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Statement Line Items [Line Items] | ||||
Beginning balance | $ 3,206 | [1] | $ 6,244 | |
Additions | 3,816 | 366 | ||
Disposal | (1,105) | (264) | ||
Ending balance | 3,016 | 3,206 | [1] | |
ACCUMULATED DEPRECIATION | ||||
Beginning balance | 3,140 | 2,322 | ||
Additions | 2,901 | 982 | ||
Disposal | (164) | |||
Ending balance | 6,041 | 3,140 | ||
Property and equipment | 3,016 | 3,206 | ||
Computer equipment [Member] | ||||
Statement Line Items [Line Items] | ||||
Beginning balance | 2,337 | 2,067 | ||
Additions | 3,814 | 271 | ||
Disposal | (1,105) | (1) | ||
Ending balance | 5,046 | 2,337 | ||
ACCUMULATED DEPRECIATION | ||||
Beginning balance | 1,387 | 1,031 | ||
Additions | 2,285 | 357 | ||
Disposal | (1) | |||
Ending balance | 3,672 | 1,387 | ||
Property and equipment | 1,374 | 950 | ||
Furniture and fixtures [member] | ||||
Statement Line Items [Line Items] | ||||
Beginning balance | 1,500 | 1,585 | ||
Additions | 2 | 30 | ||
Disposal | (115) | |||
Ending balance | 1,502 | 1,500 | ||
ACCUMULATED DEPRECIATION | ||||
Beginning balance | 748 | 612 | ||
Additions | 151 | 168 | ||
Disposal | (32) | |||
Ending balance | 899 | 748 | ||
Property and equipment | 603 | 752 | ||
Leasehold improvements [Member] | ||||
Statement Line Items [Line Items] | ||||
Beginning balance | 2,509 | 2,592 | ||
Additions | 65 | |||
Disposal | (148) | |||
Ending balance | 2,509 | 2,509 | ||
ACCUMULATED DEPRECIATION | ||||
Beginning balance | 1,005 | 679 | ||
Additions | 465 | 457 | ||
Disposal | (131) | |||
Ending balance | 1,470 | 1,005 | ||
Property and equipment | $ 1,039 | $ 1,504 | ||
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Property and equipment (Detai_2
Property and equipment (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2018CAD ($) | |
Property And Equipment Details Narrative Abstract | |
Impairment on Bitcoin mining equipment | $ 1,105 |
Fair value less costs to sell method | $ 504 |
Intangible assets (Details)
Intangible assets (Details) - CAD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Statement Line Items [Line Items] | |||
Beginning balance | $ 23,420 | $ 18,266 | |
Additions | 7,735 | 5,154 | |
Transfers | |||
Ending balance | 31,155 | 23,420 | |
Accumulated depreciation | |||
Beginning balance | 8,523 | 6,017 | |
Additions | 3,974 | 2,506 | |
Ending balance | 12,497 | 8,523 | |
Net book value | |||
Intangible assets | 18,658 | 14,897 | [1] |
Internally Generated Completed [Member] | |||
Statement Line Items [Line Items] | |||
Beginning balance | 16,528 | 8,593 | |
Additions | |||
Transfers | 10,373 | 7,935 | |
Ending balance | 26,901 | 16,528 | |
Accumulated depreciation | |||
Beginning balance | 5,491 | 3,122 | |
Additions | 3,883 | 2,369 | |
Ending balance | 9,374 | 5,491 | |
Net book value | |||
Intangible assets | 17,527 | 11,037 | |
Internally Generated In Process [Member] | |||
Statement Line Items [Line Items] | |||
Beginning balance | 3,541 | 6,333 | |
Additions | 7,730 | 5,143 | |
Transfers | (10,373) | (7,935) | |
Ending balance | 898 | 3,541 | |
Accumulated depreciation | |||
Beginning balance | |||
Additions | |||
Ending balance | |||
Net book value | |||
Intangible assets | 898 | 3,541 | |
Vendor Purchases [Member] | |||
Statement Line Items [Line Items] | |||
Beginning balance | 3,351 | 3,340 | |
Additions | 5 | 11 | |
Transfers | |||
Ending balance | 3,356 | 3,351 | |
Accumulated depreciation | |||
Beginning balance | 3,032 | 2,895 | |
Additions | 91 | 137 | |
Ending balance | 3,123 | 3,032 | |
Net book value | |||
Intangible assets | $ 233 | $ 319 | |
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Credit facilities (Details Narr
Credit facilities (Details Narrative) - CAD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 18, 2018 | Sep. 25, 2017 | Sep. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | ||||||
Credit facility, amount borrowed | $ 75,934 | $ 57,110 | ||||
Credit Facility - ST [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Credit facility, maturity date | Jul. 2, 2018 | |||||
Description for interest rate | The facility bears interest at a variable rate of LIBOR plus 12.50% (with a LIBOR floor of 2.00%) up to the first $40 million of borrowing, a decrease from the variable rate of LIBOR plus 13.00% (with a LIBOR floor of 2.00%) under the previous Credit Facility - ST. The incremental portion of facility borrowings above $40 million bears interest at a variable rate of LIBOR plus 11.00% (with a LIBOR floor of 2.00%). | |||||
Repayment of term loan | $ 30,000 | |||||
Description for fee payable under facility | Consistent with the previous facility, there is a 0.33% fee on the available but undrawn portion of the $50 million facility. | |||||
Credit facility [Member] | Minimum [member] | ||||||
Statement Line Items [Line Items] | ||||||
Credit facility other | $ 40,000 | |||||
Credit facility [Member] | Maximum [member] | ||||||
Statement Line Items [Line Items] | ||||||
Credit facility other | $ 50,000 | |||||
Credit New Facility [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Unamortized deferred financing costs | 214 | 191 | ||||
Credit facility, amount borrowed | $ 44,327 | 28,749 | ||||
Credit Facility - Other [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Credit facility, maturity date | Jul. 2, 2020 | |||||
Senior secured credit facility, maximum borrowing capacity | $ 40,000 | |||||
Term Loan Agreement [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Description for the prescribed minimum balance | The prescribed minimum balance was $44 million. The prescribed minimum balance is reset to $33 million in the first quarter of 2019, and will rise incrementally up to $44 million by the maturity date. | |||||
Credit Facility - Liquid [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Credit facility, maturity date | Aug. 31, 2020 | |||||
Unamortized deferred financing costs | $ 554 | $ 887 | ||||
Description for interest rate | The term loan bears interest at a variable rate of LIBOR plus 8.00% (with a LIBOR floor of 1.50%) | |||||
LIBOR | 2.50% | 1.56% | 0.77% | |||
Credit facility, amount borrowed | $ 32,375 | $ 29,439 | ||||
Credit Facility - Liquid [Member] | September 1, 2015 [Member] | ||||||
Statement Line Items [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | 50,000 | |||||
Conditional credit facility may be borrowed under agreement | $ 200,000 |
Debentures (Details)
Debentures (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | [1] |
Debentures Details Abstract | |||
2019 | |||
2020 | 27,968 | ||
2021 | 9,787 | ||
2022 | 3,870 | ||
Debentures | $ 41,625 | $ 39,680 | |
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Debentures (Details Narrtive)
Debentures (Details Narrtive) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Line Items [Line Items] | ||
Debenture principal amounts due date | Mar. 1, 2022 | |
Terms of subordination agreement | The Debentures are governed by the terms of a trust deed and, among other things, are subject to a subordination agreement which effectively extends the earliest maturity date of such debentures to July 2, 2020, the maturity date of the Credit Facility Other. | |
Minimum [member] | ||
Statement Line Items [Line Items] | ||
Debentures, monthly interest rate | 10.00% | 12.00% |
Maximum [member] | ||
Statement Line Items [Line Items] | ||
Debentures, monthly interest rate | 18.00% | 18.20% |
Convertible debentures (Details
Convertible debentures (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Line Items [Line Items] | ||
Convertible debentures | $ 12,912 | $ 14,905 |
Transaction costs | (1,346) | (1,472) |
Net proceeds | 11,566 | 13,433 |
Accretion in carrying value of debenture liability | 1,056 | 404 |
Convertible debentures Net book value | 12,622 | $ 13,837 |
Liability component of convertible debentures [Member] | ||
Statement Line Items [Line Items] | ||
Convertible debentures | 11,973 | |
Transaction costs | (1,248) | |
Net proceeds | 10,725 | |
Accretion in carrying value of debenture liability | 1,056 | |
Convertible debentures Net book value | 11,781 | |
Equity component of convertible debentures [Member] | ||
Statement Line Items [Line Items] | ||
Convertible debentures | 939 | |
Transaction costs | (98) | |
Net proceeds | 841 | |
Accretion in carrying value of debenture liability | ||
Convertible debentures Net book value | $ 841 |
Convertible debentures (Detai_2
Convertible debentures (Details Narrative) shares in Thousands, $ in Thousands | Jun. 06, 2017CAD ($) | Dec. 31, 2018CAD ($)shares | Dec. 31, 2017CAD ($)shares | Jun. 06, 2017$ / shares | Jun. 06, 2017CAD ($) |
Convertible Debentures Details Narrative Abstract | |||||
Convertible debentures principal amount | $ 15,000 | ||||
Price per debentures | $ / shares | $ 1 | ||||
Convertible debentures, maturity date | Jun. 6, 2020 | ||||
Conversion price per share | $ / shares | $ 5 | ||||
Description for the payment of convertible debentures | Principal and interest are payable in cash or, at the Company's option, subject to regulatory approval and provided no events of default have occurred, in common shares of the Company issued at a price equal to the volume weighted average trading price ("VWAP") of the common shares for the 20 trading days ending on the fifth day prior to the maturity date or the date on which the Interest payment is due, as applicable. | ||||
Convertible debentures, terms of conversion feature | The convertible debentures are convertible, at the option of the holder, in whole or in part, into common shares of the Company at any time before the maturity date at a price of $5.00 per common share (the "Conversion Price"). | ||||
Terms of early conversion | The Company may at any time that the 20-day VWAP of the common shares exceeds 115% of the Conversion Price, subject to regulatory approval and provided no events of default have occurred, convert the convertible debentures in whole or in part, including any accrued interest, to common shares at the Conversion Price of $5.00 per common share. | ||||
Net proceeds from issuance of convertible debentures | $ 15,000 | ||||
Interest expense including interest payable and accretion of convertible debentures | $ 1,947 | $ 1,248 | |||
Debt conversion converted instrument shares issued | shares | 398,600 | 19,000 | |||
Debt conversion converted amount | $ 1,865 | $ 87 | |||
Shares issued in lieu of interest payable | shares | 367,270 | 122,655 | |||
Convertible debentures, prepayment description | The Company may, at its option any time after 12 months from the closing date and at any time prior to maturity, subject to regulatory approval and provided that no events of default have occurred, prepay the convertible debentures in whole or in part, plus accrued interest, in cash. If the prepayment occurs: within 24 months of the closing date, then the debenture holders are entitled to receive (1) an additional payment equal to 5% of the prepayment amount and (2) the interest that would have accrued from the date of prepayment to, but excluding, the day that is 24 months from the closing date; or after 24 months of the closing date but prior to the maturity date, then the debenture holders are entitled to receive the interest that would have accrued from the date of prepayment to, but excluding, the maturity date. |
Income taxes (Details)
Income taxes (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes Details Abstract | ||
Current tax expense | ||
Provision for income taxes |
Income taxes (Details 1)
Income taxes (Details 1) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes Details 1Abstract | ||
Canadian federal and provincial recovery of income taxes using statutory rate of 27% (2017 - 27%) | $ (5,946) | $ (5,381) |
Change in unrecognized deductible temporary differences and unused tax losses | 6,098 | 4,397 |
Permanent differences and other | (152) | 983 |
Provision for income taxes |
Income taxes (Details 2)
Income taxes (Details 2) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Taxes Details 2Abstract | ||
Unused tax losses | $ 141 | $ 776 |
Income tax (Details 3)
Income tax (Details 3) - Deferred Tax Liabilities [Member] - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Line Items [Line Items] | ||
Convertible debenture | $ 67 | $ 233 |
Deferred cost | 74 | 111 |
Intangible assets | 250 | |
Investment tax credits | ||
Property and equipment | 182 | |
Net deferred income tax liabilities | $ 141 | $ 776 |
Income tax (Details 4)
Income tax (Details 4) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | ||||
Property and equipment | $ 3,016 | $ 3,206 | [1] | $ 6,244 |
Intangible assets | 18,658 | 14,897 | [1] | |
Deferred Tax Assets [Member] | ||||
Statement Line Items [Line Items] | ||||
Property and equipment | 2,250 | |||
Intangible assets | 4,368 | 1,412 | ||
Debentures | 1,658 | 1,123 | ||
Financing costs | 2,390 | 4,161 | ||
Research and development expenditures | 1,163 | 1,342 | ||
Other | 21 | 326 | ||
Deferred tax assets | $ 11,850 | $ 8,364 | ||
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Income tax (Details 5)
Income tax (Details 5) - Unused tax losses [member] - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Line Items [Line Items] | ||
Expires 2024 | $ 610 | $ 610 |
Expires 2025 | 1,075 | 1,075 |
Expires 2026 | 2,136 | 2,136 |
Expires 2027 | 5,203 | 5,203 |
Expires 2028 | 2,064 | 2,064 |
Expires 2029 | 4,663 | 4,663 |
Expires 2030 | 3,698 | 3,698 |
Expires 2031 | 1,614 | 1,614 |
Expires 2032 | 4,849 | 4,849 |
Expires 2033 | 10,454 | 10,454 |
Expires 2034 | 7,416 | 7,416 |
Expires 2035 | 9,835 | 9,835 |
Expires 2036 | 19,008 | 19,008 |
Expires 2037 | 19,824 | 19,824 |
Expires 2038 | 16,277 | |
Total | $ 108,726 | $ 92,449 |
Expenses by nature (Details)
Expenses by nature (Details) - CAD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Expenses By Nature Details Abstract | |||||
Personnel expense | $ 16,702 | $ 17,869 | $ 18,552 | ||
Marketing | 8,291 | 5,916 | 5,277 | ||
Depreciation and amortization | 7,062 | 4,045 | [1] | 2,707 | [1] |
Hosting and software licences | 4,110 | 2,075 | 1,999 | ||
Professional services | 1,281 | 1,389 | 1,628 | ||
Premises | 1,036 | 1,053 | 1,235 | ||
Insurance and licenses | 1,091 | 470 | 391 | ||
Others | 3,506 | 2,899 | 2,614 | ||
Expenses by nature | $ 43,079 | $ 35,716 | $ 34,403 | ||
[1] | (1)The consolidated statement of cash flows for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Loss per share (Details)
Loss per share (Details) - CAD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | [1] | Dec. 31, 2016 | [1] | |
Loss Per Share Details Abstract | |||||
Loss attributed to shareholders | $ (22,022) | $ (19,729) | $ (17,092) | ||
Basic weighted average number of shares (in 000s) | 22,714 | 18,381 | 18,251 | ||
Basic and diluted loss per share | $ (0.97) | $ (1.07) | $ (0.94) | ||
[1] | (1)The consolidated statement of comprehensive loss for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Capital management (Details)
Capital management (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Capital Management Details Abstract | |||
Share capital | $ 75,045 | $ 71,389 | [1] |
Deficit | (90,784) | (63,627) | [1] |
Debentures | 41,625 | 39,680 | [1] |
Convertible debentures | 12,622 | 13,837 | |
Credit facilities | $ 75,934 | $ 57,110 | |
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Fair value of financial instr_3
Fair value of financial instruments (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Line Items [Line Items] | ||
Loans Receivable Non-Current (Level 3) | $ 39,317 | $ 33,917 |
Total Fair Value [Member] | ||
Statement Line Items [Line Items] | ||
Loans Receivable Non-Current (Level 3) | 41,595 | 36,567 |
Total Carrying Value [Member] | ||
Statement Line Items [Line Items] | ||
Loans Receivable Non-Current (Level 3) | $ 39,317 | $ 33,917 |
Nature and extent of risk ari_3
Nature and extent of risk arising from financial instruments (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | ||||
Cash | $ 20,439 | $ 40,560 | [1] | |
Foreign Currency Risk [Member] | ||||
Statement Line Items [Line Items] | ||||
Cash | 874 | 171 | $ 65 | |
Debentures | $ 4,770 | $ 4,770 | $ 4,870 | |
[1] | (1)The consolidated statement of financial position as at December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Nature and extent of risk ari_4
Nature and extent of risk arising from financial instruments (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | |||
Description for effect on foreign exchange rates | A 5% increase or decrease in the U.S. dollar exchange rate would increase or decrease the unrealized exchange gain (loss) by $266. | ||
Credit Facility - Liquid [Member] | |||
Statement Line Items [Line Items] | |||
LIBOR floor | 1.50% | ||
LIBOR | 2.50% | 1.56% | 0.77% |
Credit Facility - Other [Member] | |||
Statement Line Items [Line Items] | |||
LIBOR floor | 2.00% | ||
LIBOR [Member] | |||
Statement Line Items [Line Items] | |||
Description for impact of change in LIBOR | A 0.50 basis point increase in LIBOR would increase annual credit facility interest expense by $428. |
Equity (Details)
Equity (Details) - Stock Options [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Options Outstanding | |||
Options Outstanding shares, Beginning | 3,099 | 2,302 | 1,506 |
Options Outstanding, Options granted | 468 | 984 | 1,127 |
Options Outstanding, Exercised | (156) | (62) | (118) |
Options Outstanding, Forfeited | (303) | (125) | (213) |
Options Outstanding shares, Ending | 3,108 | 3,099 | 2,302 |
Weighted Average Grant Date Fair Value | |||
Weighted Average Grant Date Fair Value, Options granted | 1 year 3 months 4 days | 1 year 10 months 14 days | 7 months 17 days |
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Beginning | $ 3.80 | $ 3.50 | $ 5.17 |
Weighted Average Exercise Price, Options granted | 4.13 | 4.60 | 1.89 |
Weighted Average Exercise Price, Exercised | 1.99 | 2.39 | 2.10 |
Weighted Average Exercise Price, Forfeited | 4.38 | 5.67 | 3.56 |
Weighted Average Exercise Price, Ending | $ 3.88 | $ 3.80 | $ 3.50 |
Options Exercisable, Beginning | 1,529 | 767 | 567 |
Options Exercisable, Options granted | |||
Options Exercisable, Exercised | |||
Options Exercisable, Forfeited | |||
Options Exercisable, Ending | 1,965 | 1,529 | 767 |
Weighted Average Exercise Price Options Exercisable | |||
Weighted Average Exercise Price Options Exercisable, Beginning | $ 3.85 | $ 4.01 | $ 2.44 |
Weighted Average Exercise Price Options Exercisable, Options granted | |||
Weighted Average Exercise Price Options Exercisable, Exercised | |||
Weighted Average Exercise Price Options Exercisable, Forfeited | |||
Weighted Average Exercise Price Options Exercisable,Ending | $ 3.80 | $ 3.85 | $ 4.01 |
Equity (Details 1)
Equity (Details 1) - Stock Options [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | |||
Expected life | 5 years | 5 years | 5 years |
Expected volatility in market price of shares | 50.00% | 50.00% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected forfeiture rate | 15.00% | 15.00% | 15.00% |
Minimum [member] | |||
Statement Line Items [Line Items] | |||
Risk-free interest rate | 2.07% | 1.08% | 0.53% |
Expected volatility in market price of shares | 40.00% | ||
Maximum [member] | |||
Statement Line Items [Line Items] | |||
Risk-free interest rate | 2.47% | 1.90% | 1.35% |
Expected volatility in market price of shares | 50.00% |
Equity (Details 2)
Equity (Details 2) - RSU [Member] - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | |||
Restricted share units, Beginning | 145 | 145 | 100 |
Restricted share units, Granted | 164 | 71 | 73 |
Restricted share units, Converted | (30) | (41) | |
Restricted share units, Expired | (33) | (30) | (28) |
Restricted share units, Ending | 246 | 145 | 145 |
Equity (Details 3)
Equity (Details 3) - Warrants [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Options Outstanding | |||
Options Outstanding shares, Beginning | 1,779 | 1,878 | 182 |
Options Outstanding, Warrants granted | 1,696 | ||
Options Outstanding, Options expired | (99) | ||
Options Outstanding shares, Ending | 1,779 | 1,779 | 1,878 |
Weighted Average Grant Date Fair Value | |||
Weighted Average Grant Date Fair Value, Warrants granted | 1 year 2 months 23 days | ||
Weighted Average Grant Date Fair Value, Options expired | 10 months 25 days | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Beginning | $ 2.66 | $ 2.90 | $ 4.89 |
Weighted Average Exercise Price, Warrants granted | 2.69 | ||
Weighted Average Exercise Price, Options expired | 7.35 | ||
Weighted Average Exercise Price, Ending | $ 2.66 | $ 2.66 | $ 2.90 |
Options Exercisable, Beginning | 783 | 881 | 182 |
Options Exercisable, Ending | 982 | 783 | 881 |
Weighted Average Exercise Price Options Exercisable | |||
Weighted Average Exercise Price Options Exercisable, Beginning | $ 2.28 | $ 2.84 | $ 4.89 |
Weighted Average Exercise Price Options Exercisable,Ending | $ 2.42 | $ 2.28 | $ 2.84 |
Equity (Details 4)
Equity (Details 4) - Warrants [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Line Items [Line Items] | |||
Expected volatility in market price of shares | 50.00% | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected forfeiture rate | 0.00% | 0.00% | 0.00% |
Minimum [member] | |||
Statement Line Items [Line Items] | |||
Risk-free interest rate | 1.88% | 0.64% | 0.64% |
Expected life | 2 years | 2 years | 2 years |
Expected volatility in market price of shares | 50.00% | 50.00% | |
Maximum [member] | |||
Statement Line Items [Line Items] | |||
Risk-free interest rate | 2.49% | 2.10% | 1.58% |
Expected life | 8 years | 10 years | 10 years |
Expected volatility in market price of shares | 55.00% | 55.00% |
Equity (Details Narrative)
Equity (Details Narrative) - CAD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Jun. 18, 2018 | Apr. 30, 2018 | Jan. 25, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 15, 2017 | Dec. 31, 2015 | |||
Statement Line Items [Line Items] | ||||||||||
Shares based compensation expense | $ 1,320 | $ 1,343 | [1] | $ 1,067 | [1] | |||||
Stock Option Plan [Member] | ||||||||||
Statement Line Items [Line Items] | ||||||||||
Stock option plan description | the Company’s shareholders approved an amendment to increase the maximum number of common shares reserved for issuance under the Plan to the greater of i) 15% of the number of common shares issued and outstanding of the Company and ii) 3,800,000. | |||||||||
Stock option granted shares | 3,800,000 | |||||||||
Stock option maturity date | November 2021 to November 2026. | |||||||||
Postmedia Agreement [Member] | ||||||||||
Statement Line Items [Line Items] | ||||||||||
Stock option maturity date | Five year warrants | |||||||||
Common stock shares issued | 1,196,120 | |||||||||
Exercise price of warrants | $ 2.96 | |||||||||
Warrants vesting description | In connection with this amendment, Postmedia and Mogo agreed to change the vesting and term of the 598,060 Performance Warrants so that i) they vest equally over the remaining two years of the collaboration (50% in January 2020 and 50% in January 2021); and ii) their term is extended an additional two years, now expiring January 2023. | 50% of the warrants were to vest in equal instalments over three years while the remaining 50% (the “Performance Warrants”) were to vest based on Mogo achieving certain quarterly revenue targets. | ||||||||
Warrants [Member] | ||||||||||
Statement Line Items [Line Items] | ||||||||||
Stock option maturity date | January 2021 to September 2025. | |||||||||
Warrants issued | 1,779,453 | |||||||||
Outstanding warrants issued | 1,779 | 1,779 | 1,878 | 182 | ||||||
Warrants [Member] | Drawbridge Special Opportunities Fund LP [Member] | ||||||||||
Statement Line Items [Line Items] | ||||||||||
Outstanding warrants issued | 583,333 | |||||||||
RSU [Member] | Maximum [member] | ||||||||||
Statement Line Items [Line Items] | ||||||||||
Common shares issuable under plan | 500,000 | |||||||||
[1] | (1)The consolidated statement of cash flows for the year ended December 31, 2018 reflects the adoption of IFRS 9 on January 1, 2018. The comparative information has not been restated. For additional information on IFRS 9 adoption, refer to the sections "Impairment of financial assets" and "Summary of IFRS 9 adoption impact" within Note 3 to these consolidated financial statements. |
Cash flow changes from financ_3
Cash flow changes from financing activities (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Line Items [Line Items] | ||
Non-cash changes in financing activities beginging | $ 183,740 | $ 132,180 |
Cash flows | 20,135 | 47,504 |
Conversion | 1,610 | 1,337 |
Foreign exchange | 535 | (417) |
Fair Value/Amortization | (671) | 3,136 |
Non-cash changes in financing activities ending | 205,349 | 183,740 |
Share capital [Member] | ||
Statement Line Items [Line Items] | ||
Non-cash changes in financing activities beginging | 71,389 | |
Cash flows | 311 | |
Conversion | 3,345 | |
Foreign exchange | ||
Fair Value/Amortization | ||
Non-cash changes in financing activities ending | 75,045 | |
Debentures [Member] | ||
Statement Line Items [Line Items] | ||
Non-cash changes in financing activities beginging | 39,680 | 40,092 |
Cash flows | 1,410 | 5 |
Conversion | ||
Foreign exchange | 535 | (417) |
Fair Value/Amortization | ||
Non-cash changes in financing activities ending | 41,625 | 39,680 |
Convertible debenture [Member] | ||
Statement Line Items [Line Items] | ||
Non-cash changes in financing activities beginging | 12,864 | |
Cash flows | 12,460 | |
Conversion | (1,735) | |
Foreign exchange | ||
Fair Value/Amortization | 652 | 404 |
Non-cash changes in financing activities ending | 11,781 | 12,864 |
Derivative financial liability [Member] | ||
Statement Line Items [Line Items] | ||
Non-cash changes in financing activities beginging | 2,697 | 490 |
Cash flows | ||
Conversion | ||
Foreign exchange | ||
Fair Value/Amortization | (1,733) | 2,207 |
Non-cash changes in financing activities ending | 964 | 2,697 |
Share capital [Member] | ||
Statement Line Items [Line Items] | ||
Non-cash changes in financing activities beginging | 45,655 | |
Cash flows | 24,397 | |
Conversion | 1,337 | |
Foreign exchange | ||
Fair Value/Amortization | ||
Non-cash changes in financing activities ending | 71,389 | |
Credit facility [Member] | ||
Statement Line Items [Line Items] | ||
Non-cash changes in financing activities beginging | 57,110 | 45,943 |
Cash flows | 18,414 | 10,642 |
Conversion | ||
Foreign exchange | ||
Fair Value/Amortization | 410 | 525 |
Non-cash changes in financing activities ending | $ 75,934 | $ 57,110 |
Subsequent event (Details Narra
Subsequent event (Details Narrative) - Arrangement Agreement [Member] - Subsequent Event [Member] shares in Thousands | 12 Months Ended |
Dec. 31, 2018shares | |
Former Mogo Shareholders [Member] | |
Statement Line Items [Line Items] | |
Ownership interest | 80.00% |
Common shares held | 2,550,972 |
Difference Capital Financial Inc [Member] | |
Statement Line Items [Line Items] | |
Ownership interest | 20.00% |
Common shares held | 2,449,163 |