Profound Medical (PROF) 40-F 3 Mar 20 2019 FY Annual report (Canada) Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2019shares
Document and Entity Information [Abstract]
Entity Registrant Name	Profound Medical Corp.
Entity Central Index Key	0001628808
Document Type	40-F
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding	11,852,749
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets	Dec. 31, 2019CAD ($)	Dec. 31, 2018CAD ($)
Current assets
Cash	$ 19,222,195	$ 30,687,183
Trade and other receivables (note 5)	4,058,136	2,686,112
Investment tax credits receivable	240,000	480,000
Inventory (note 6)	4,764,458	3,631,623
Prepaid expenses and deposits	1,335,620	434,871
Total current assets	29,620,409	37,919,789
Property and equipment (note 7)	684,718	1,207,357
Intangible assets (note 8)	3,128,820	4,013,561
Right-of-use assets (notes 2 and 9)	2,199,381	0
Goodwill (note 8)	3,409,165	3,409,165
Total assets	39,042,493	46,549,872
Current liabilities
Accounts payable and accrued liabilities	3,933,114	3,912,350
Deferred revenue	654,763	312,558
Long-term debt (note 11)	5,144,461	1,339,583
Provisions (note 10)	134,956	1,352,017
Other liabilities (notes 11 and 12)	286,858	567,296
Derivative financial instrument (note 11)	254,769	98,203
Lease liabilities (notes 2 and 13)	258,685
Income taxes payable	15,763	297,353
Total current liabilities	10,683,369	7,879,360
Long-term debt (note 11)	6,719,924	10,615,662
Deferred revenue	829,784	379,044
Provisions (note 10)	19,005	49,319
Other liabilities (notes 11 and 12)		1,000,153
Lease liabilities (notes 2 and 13)	2,125,873
Total liabilities	20,377,955	19,923,538
Shareholders' Equity
Share capital (note 14)	130,266,880	120,932,404
Contributed surplus	19,580,338	16,756,294
Accumulated other comprehensive loss	(117,188)	(28,703)
Deficit	(131,065,492)	(111,033,661)
Total Shareholders' Equity	18,664,538	26,626,334
Total Liabilities and Shareholders' Equity	$ 39,042,493	$ 46,549,872

Consolidated Statements of Loss

Consolidated Statements of Loss and Comprehensive Loss - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue.
Products	$ 4,895,427	$ 2,421,331
Services	632,144	180,947
Total revenue	5,527,571	2,602,278
Cost of sales (note 16)	2,361,805	1,778,501
Gross profit	3,165,766	823,777
Operating expenses (note 16)
Research and development - net of investment tax credits of $nil (2018 - $240,000)	12,466,149	10,265,388
General and administrative	7,678,672	6,656,723
Selling and distribution	2,789,042	4,091,347
Total operating expenses	22,933,863	21,013,458
Operating Loss	19,768,097	20,189,681
Other income and expense
Finance costs (note 17)	711,588	826,312
Finance income	(481,309)	(483,788)
Total other income and expense	230,279	342,524
Loss before taxes	19,998,376	20,532,205
Income taxes (note 18)	193,874	230,784
Net loss attributed to shareholders for the year	20,192,250	20,762,989
Item that may be reclassified to profit or loss
Foreign currency translation adjustment - net of tax	(88,485)	29,226
Net loss and comprehensive loss for the year	$ 20,103,765	$ 20,792,215
Loss per share (note 19)
Basic and diluted loss per common share	$ 1.82	$ 2.07

Consolidated Statements of Lo_2

Consolidated Statements of Loss and Comprehensive Loss (Parenthetical) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Loss and Comprehensive Loss
Investment Tax Credits	$ 0	$ 240,000

Consolidated Statements of Chan

Consolidated Statements of Changes in Shareholders' Equity - CAD ($)	Share capital	Contributed surplus	Accumulated other comprehensive income (loss)	Deficit	Total
Balance at the beginning at Dec. 31, 2017	$ 98,365,770	$ 6,103,970	$ (57,929)	$ (90,270,672)	$ 14,141,139
Balance at the beginning (in shares) at Dec. 31, 2017	7,311,738
Net loss for the year				(20,762,989)	(20,762,989)
Cumulative translation adjustment - net of tax of nil			29,226		29,226
Exercise of share options	$ 306,882	(201,625)			105,257
Exercise of share options (in shares)	43,756
Share-based compensation (note 15)		1,086,199			1,086,199
Issuance of units from offering (note 14)	$ 22,259,752	9,767,750			32,027,502
Issuance of units from offering (in shares)	3,450,000
Balance at the end at Dec. 31, 2018	$ 120,932,404	16,756,294	(28,703)	(111,033,661)	$ 26,626,334
Balance at the end (in shares) at Dec. 31, 2018	10,805,494				10,805,494
Net loss for the year					$ (20,192,250)
Balance at the end at Dec. 31, 2019	$ 130,266,880	19,580,338	(117,188)	(131,065,492)	$ 18,664,538
Balance at the end (in shares) at Dec. 31, 2019	11,852,749				11,852,749
Balance at the beginning (Change in accounting policy for IFRS 16 (note 2)) at Jan. 01, 2019				160,419	$ 160,419
Balance at the beginning at Jan. 01, 2019	$ 120,932,404	16,756,294	(28,703)	(110,873,242)	26,786,753
Balance at the beginning (in shares) at Jan. 01, 2019	10,805,494
Net loss for the year				(20,192,250)	(20,192,250)
Cumulative translation adjustment - net of tax of nil			(88,485)		(88,485)
Exercise of share options	$ 10,080	(4,681)			5,399
Exercise of share options (in shares)	1,800
Share-based compensation (note 15)		1,676,844			1,676,844
Issuance of units from offering (note 14)	$ 9,324,396	1,151,881			10,476,277
Issuance of units from offering (in shares)	1,045,455
Balance at the end at Dec. 31, 2019	$ 130,266,880	$ 19,580,338	$ (117,188)	$ (131,065,492)	$ 18,664,538
Balance at the end (in shares) at Dec. 31, 2019	11,852,749				11,852,749

Consolidated Statements of Ch_2

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Changes in Shareholders' Equity
Cumulative translation adjustment, tax	$ 0	$ 0

Consolidated Statement of Cash

Consolidated Statement of Cash Flow - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Operating activities
Net loss for the year	$ (20,192,250)	$ (20,762,989)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation of property and equipment (note 7)	472,685	546,001
Amortization of intangible assets (note 8)	1,134,741	1,128,437
Depreciation of right-of-use assets (note 9)	406,397
Share-based compensation (note 15)	1,676,844	1,086,199
Interest and accretion expense (note 17)	1,369,928	1,028,843
Change in deferred rent		7,108
Deferred revenue	792,945	450,286
Change in fair value of derivative financial instrument (note 11)	156,566	(96,619)
Change in fair value of contingent consideration (note 12)	(968,883)	(325,253)
Changes in non-cash working capital balances
Investment tax credits receivable	240,000	(240,000)
Trade and other receivables	(1,372,024)	1,565,546
Prepaid expenses and deposits	(1,110,749)	141,157
Inventory	(1,132,835)	(2,200,466)
Accounts payable and accrued liabilities	(24,162)	(1,167,336)
Provisions	(1,198,056)	319,875
Income taxes payable	(281,590)	224,574
Net cash flow used in operating activities	(20,030,443)	(18,294,637)
Investing activities
Purchase of intangible assets	(250,000)
Total cash used in investing activities	(250,000)
Financing activities
Issuance of common shares	11,500,001	34,500,000
Transaction costs paid	(1,023,724)	(2,472,498)
Proceeds from bank loan		12,500,000
Bank loan costs paid		(735,698)
Payment of other liabilities	(16,205)	(5,851,489)
Payment of long-term debt and interest	(1,331,771)	(166,975)
Proceeds from share options exercised	5,399	105,257
Payment of lease liabilities	(318,245)
Total cash from financing activities	8,815,455	37,878,597
Net change in cash during the year	(11,464,988)	19,583,960
Cash - Beginning of year	30,687,183	11,103,223
Cash - End of year	$ 19,222,195	$ 30,687,183

Description of business

Description of business	12 Months Ended
	Dec. 31, 2019
Description of business
Description of business	1 Description of business Profound Medical Corp. (Profound) and its subsidiaries (together, the Company) were incorporated under the Ontario Business Corporations Act on July 16, 2014. The Company is a medical technology Company developing treatments to ablate the prostate gland, uterine fibroids and nerves for palliative pain relief for patients with metastatic bone disease. The Company’s registered address is 2400 Skymark Avenue, Unit 6, Mississauga, Ontario, L4W 5K5.

Summary of significant accounti

Summary of significant accounting policies and basis of preparation	12 Months Ended
	Dec. 31, 2019
Summary of significant accounting policies and basis of preparation
Summary of significant accounting policies and basis of preparation	2 Summary of significant accounting policies and basis of preparation Basis of preparation The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). The Board of Directors approved these consolidated financial statements on March 3, 2020. These consolidated financial statements comply with IFRS. Adoption of new accounting standards A new amended standard became applicable for the current reporting period and the Company had to change its accounting policies as a result. The impact of the adoption of this standard is disclosed below: · IFRS 16, Leases (IFRS 16) IFRS 16 sets out the principles for the recognition, measurement and disclosure of leases. IFRS 16 provides revised guidance on identifying a lease and for separating lease and non-lease components of a contract. IFRS 16 introduces a single accounting model for all lessees, thereby removing the distinction between operating and finance leases. IFRS 16 requires a lessee to recognize an asset (right-to-use the leased item) and a financial liability to pay rentals on the interim condensed consolidated balance sheets with terms of more than 12 months, unless the underlying asset is of low value. The standard permits either a full retrospective or a modified retrospective approach for the adoption. IFRS 16 was effective for annual periods beginning on or after January 1, 2019. The Company has adopted IFRS 16 retrospectively from January 1, 2019, but has not restated comparative information, as permitted under the specific transitional provisions in the standard in accordance with the modified retrospective approach for adoption. The reclassifications and the adjustments arising from the new leasing standard are therefore recognized in the opening consolidated balance sheet on January 1, 2019. Adjustments recognized on adoption of IFRS 16 On adoption of IFRS 16, the Company recognized lease liabilities in relation to leases, which had previously been classified as operating leases under the principles of IAS 17, Leases (IAS 17). These liabilities were measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate as of January 1, 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 4%. $ Operating lease commitments as at December 31, 2018 3,313,292 Asset retirement obligation 111,100 Discounted using the Company’s average incremental borrowing rate of 4.0% (836,665) Lease liabilities recognized as at January 1, 2019 2,587,727 The change in accounting policy affected the following items in the consolidated balance sheet on January 1, 2019: Increase (decrease) $ Right-of-use assets 2,616,773 Lease liabilities 2,587,727 Prepaid expenses and deposits (210,001) Provisions (49,319) Other liabilities (292,055) Deficit 160,419 Practical expedients applied The Company has elected to apply the practical expedient not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term. The Company has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Company has relied on its assessment made applying IAS 17 and IFRIC 4, Determining whether an Arrangement contains a Lease. Accounting policy At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The assets are depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option. Lease terms range from four to ten years for offices. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. Use of estimates and judgments The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3. Consolidation Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The wholly owned subsidiaries of Profound are consolidated from the date control is obtained. All intercompany transactions, balances, income and expenses on transactions with the subsidiaries are fully eliminated. These consolidated financial statements include the following wholly owned subsidiaries of the Company: Profound Medical Inc., Profound Medical Oy, Profound Medical GmbH and Profound Medical (U.S.) Inc. Business combinations The acquisition method of accounting is used to account for business combinations. The consideration transferred in a business combination is measured at fair value at the date of acquisition. Acquisition-related transaction costs are recognized in the consolidated statements of loss and comprehensive loss as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are initially recognized at their fair value. Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and is included as part of the consideration transferred in a business combination. Changes in the acquisition date fair values of the identifiable assets, liabilities and contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Other than measurement period adjustments, contingent consideration that is classified as a financial liability is remeasured at subsequent reporting dates, with the corresponding gain or loss recognized in the consolidated statements of loss and comprehensive loss. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the chief executive officer. Foreign currency translation The Company has a functional currency of Canadian dollars and the functional currency of each subsidiary is determined based on facts and circumstances relevant for each subsidiary. Where the Company’s presentation currency of Canadian dollars differs from the functional currency of a subsidiary, the assets and liabilities of the subsidiary are translated from the functional currency into the presentation currency at the exchange rates as at the reporting date. The income and expenses of the subsidiaries are translated at rates approximating the exchange rates at the dates of the transactions. Exchange differences arising on the translation of the financial statements of the Company’s subsidiaries are recognized in other comprehensive loss (income). Foreign currency transactions are translated into the functional currency of the Company or its subsidiaries, using the exchange rates prevailing at the dates of these transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than an entity’s functional currency are recognized in the consolidated statements of loss and comprehensive loss, within finance costs. Investment tax credits The benefits of refundable investment tax credits (ITCs) for scientific research and experimental development (SR&ED) expenditures are recognized in the year the qualifying expenditure is made providing there is reasonable assurance of recoverability. The refundable ITCs recorded are based on management’s estimates of amounts expected to be recovered and are subject to audit by taxation authorities. The refundable ITCs reduce the research and development expenses to which they relate. Financial assets The Company classifies its financial assets in the following measurement categories: · those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss); and · those to be measured at amortized cost. The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows. The Company does not currently have any assets measured subsequently at fair value. At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortized cost. For trade and other receivables, the Company applies the simplified approach permitted by IFRS 9, Financial Instruments (IFRS 9), which requires lifetime expected credit losses to be recognized at the time of initial recognition of the receivables. Inventories Inventories are valued at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost is determined using the first-in, first-out method for finished goods and weighted average cost for raw materials. Property and equipment Property and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to the consolidated statements of loss and comprehensive loss during the year in which they are incurred. The major categories of property and equipment are depreciated on a straight-line basis as follows: Furniture and fittings 20 % per year Research and manufacturing equipment 30 % per year Computer equipment 45 % per year Computer software 100 % per year Leasehold improvements over the term of the lease Residual values, methods of depreciation and useful lives of the assets are reviewed annually and adjusted if appropriate. Goodwill Goodwill represents the excess fair value of the consideration transferred over the fair value of the underlying net assets in a business combination and is measured at cost less accumulated impairment losses. Goodwill is not amortized but is tested for impairment on an annual basis or more frequently if there are indications the goodwill may be impaired. For the purposes of impairment testing, goodwill is allocated to each of the Company’s cash generating units (CGUs) or group of CGUs that are expected to benefit from the synergies of the acquisition. If the recoverable amount of the CGU or group of CGUs is less than the carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill and then to other assets of the CGU or group of CGUs. Identifiable intangible assets The Company’s intangible assets are stated at cost, less accumulated amortization and are amortized on a straight-line basis in the consolidated statements of loss and comprehensive loss over their estimated useful lives. The major categories of intangible assets are amortized as follows: Exclusive licence agreement 20 years Software 5 years Brand 5 years Proprietary technology 5 years Impairment of non-financial assets Property and equipment and intangible assets are tested for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flow CGUs. The recoverable amount is the higher of an asset’s fair value, less costs of disposal and value in use (which is the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized as the amount by which the asset’s carrying amount exceeds its recoverable amount. The Company evaluates impairment losses for potential reversals when events or circumstances warrant such consideration. Accounts payable and accrued liabilities These amounts represent liabilities for goods and services provided to the Company before the end of the financial year, which are unpaid. Accounts payable and accrued liabilities are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Long-term debt Long-term debt is initially recognized at fair value, net of transaction costs incurred. Long-term debt is subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the consolidated statements of loss and comprehensive loss over the period of the long-term debt using the effective interest method. Long-term debt is removed from the consolidated balance sheets when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished and the consideration paid is recognized in the consolidated statements of loss and comprehensive loss within finance costs. Financial liabilities and equity instruments · Classification as debt or equity Instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Provisions A provision is recognized when the Company has a legal or constructive obligation as result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Revenue To determine revenue recognition for arrangements the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company derives its revenues primarily from the sale of medical devices. Revenue is recognized when a contractual promise to a customer (performance obligation) has been fulfilled by transferring control over the promised goods or services, generally at the point in time of shipment to or receipt of the products by the customer or when the services are performed. When contracts contain customer acceptance provisions, revenue is recognized on the satisfaction of the specific acceptance criteria. The amount of revenue to be recognized is based on the consideration the Company expects to receive in exchange for its goods and services. For contracts that contain multiple performance obligations, the Company allocates the consideration to which it expects to be entitled to each performance obligation based on relative standalone selling prices and recognizes the related revenue when or as control of each individual performance obligation is transferred to customers. Service revenue related to installation and training is recognized over the period in which the services are performed. Service revenue related to extended warranty service is deferred and recognized on a straight-line basis over the extended warranty period covered by the respective customer contract. Under the terms of certain of the Company’s partnership agreements, the Company retains a percentage of all amounts earned with the remaining percentage due to the partner. Accordingly, associated revenue is recognized net of the consideration due to the partner. Cost of sales Cost of sales primarily includes the cost of finished goods, inventory provisions, royalties, warranty expense, freight and direct overhead expenses necessary to acquire or manufacture the finished goods. Income taxes Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the differences between the tax basis and carrying amounts of assets and liabilities, for operating losses and for tax credit carry-forwards. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which temporary differences can be utilized. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates and laws. Share-based compensation The Company grants share options periodically to certain employees, directors, officers and advisers. Options currently outstanding vest over four years and have a contractual life of ten years. Each tranche in an award is considered a separate award with its own vesting period and grant date fair value. The fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model. Compensation expense is recognized over the tranche’s vesting period using the graded vesting method by increasing contributed surplus based on the number of awards expected to vest. Research and development costs Research costs are charged to expense as incurred. Development costs are capitalized and amortized when the criteria for capitalization are met, otherwise they are expensed as incurred. No development costs have been capitalized to date. Clinical trial expenses result from obligations under contracts with vendors, consultants and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company. The appropriate level of clinical trial expenses is reflected in the Company’s consolidated financial statements by matching period expenses with period services and efforts expended. These expenses are recorded according to the progress of the clinical trial as measured by patient progression and the timing of various aspects of the clinical trial. Clinical trial accrual estimates are determined through discussions with internal clinical personnel and outside service providers as to the progress or state of completion of clinical trials, or the services completed. Service provider status is then compared to the contractually obligated fees to be paid for such services. During the course of a clinical trial, the Company may adjust the rate of clinical expense recognized if actual results differ from management’s estimates. Loss per share Basic loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the year. Diluted loss per share is calculated by dividing the applicable net loss by the sum of the weighted average number of shares outstanding during the year and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued during the year. The computation of diluted loss per share is equal to the basic loss per share due to the anti-dilutive effect of the share options and warrants.

Critical accounting estimates a

Critical accounting estimates and judgments	12 Months Ended
	Dec. 31, 2019
Critical accounting estimates and judgments
Critical accounting estimates and judgments	3 Critical accounting estimates and judgments Critical accounting judgments · Complex financial instruments and provisions The Company makes various judgments when determining the accounting for certain complex financial instruments and provisions. The Company has concluded that the contingent consideration in a business combination represents a financial liability measured at fair value through profit or loss. The revenue share obligation represented an executory contract and is accounted for as a best estimate provision. Critical accounting estimates The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed as follows: · Revenue share obligation The revenue share obligation provision was determined using certain assumptions described in note 10. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on conditions existing at the end of each reporting period. · Impairment of non-financial assets The Company reviews amortized non-financial assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may be impaired. It also reviews goodwill annually for impairment. If the recoverable amount of the respective non-financial asset is less than its carrying amount, it is considered to be impaired. In the process of measuring the recoverable amount, management makes assumptions about future events and circumstances. The actual results may vary and may cause significant adjustments. · Accounting for acquisitions and contingent consideration Areas of estimation include the determination and fair value measurement of the contingent consideration, which includes the Company developing its best estimate of projected revenue, the probability of the contingency being achieved and the discount rate. Management is also required to make estimates of the fair value of assets acquired and liabilities assumed.

Share consolidation

Share consolidation	12 Months Ended
	Dec. 31, 2019
Share consolidation
Share consolidation	4 Share consolidation On October 16, 2019, the Company completed a consolidation (Share Consolidation) of its share capital on the basis of ten existing common shares for one new common share. As a result of the Share Consolidation, the 118,527,485 common shares issued and outstanding as at that date were consolidated to 11,852,749 common shares outstanding. The Share Consolidation was previously approved by the shareholders at the Annual General Meeting held on June 13, 2019. All information in these consolidated financial statements is presented on a post-Share Consolidation basis, including comparatives.

Trade and other receivables

Trade and other receivables	12 Months Ended
	Dec. 31, 2019
Trade and other receivables
Trade and other receivables	5 Trade and other receivables The trade and other receivables balance comprises the following: $ $ Trade receivables 2,588,470 1,791,688 Interest receivable 32,287 55,730 Tax receivables 1,108,340 565,832 Other receivables 329,039 272,862 Total trade and other receivables 4,058,136 2,686,112 Amounts past due represent trade receivables past due based on the customer’s contractual terms. The Company applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. At December 31, 2019 and 2018, there were no trade receivables that are past due.

Inventory

Inventory	12 Months Ended
	Dec. 31, 2019
Inventory
Inventory	6 Inventory $ $ Finished goods 2,384,704 2,305,746 Raw materials 2,403,652 1,383,572 Inventory provision (23,898) (57,695) Total inventory 4,764,458 3,631,623 During the year ended December 31, 2019, $2,280,545 (2018 - $1,648,728) of inventory was recognized in cost of sales. The Company decreased its inventory provision by $33,797 during the year ended December 31, 2019 (2018 – $25,930). There were no other inventory writedowns charged to cost of sales during the year ended December 31, 2019.

Property and equipment

Property and equipment	12 Months Ended
	Dec. 31, 2019
Property and equipment
Property and equipment	7 Property and equipment Property and equipment consist of the following: Research Furniture and and manufacturing Leasehold Computer Computer fittings equipment improvements equipment software Total $ $ $ $ $ $ Year ended December 31, 2018 Opening net book value 134,883 947,588 605,789 37,890 — 1,726,150 Foreign exchange — 27,208 — — — 27,208 Depreciation (38,318) (403,554) (69,282) (34,847) — (546,001) Closing net book value 96,565 571,242 536,507 3,043 — 1,207,357 At December 31, 2018 Cost 235,169 1,386,692 718,742 212,541 176,462 2,729,606 Accumulated depreciation (138,604) (815,450) (182,235) (209,498) (176,462) (1,522,249) Net book value 96,565 571,242 536,507 3,043 — 1,207,357 Year ended December 31, 2019 Opening net book value 96,565 571,242 536,507 3,043 — 1,207,357 Foreign exchange — (49,954) — — — (49,954) Depreciation (38,318) (362,041) (69,283) (3,043) — (472,685) Closing net book value 58,247 159,247 467,224 — — 684,718 At December 31, 2019 Cost 235,169 1,386,692 718,742 212,541 176,462 2,729,606 Accumulated depreciation (176,922) (1,227,445) (251,518) (212,541) (176,462) (2,044,888) Net book value 58,247 159,247 467,224 — — 684,718

Intangible assets

Intangible assets	12 Months Ended
	Dec. 31, 2019
Intangible assets
Intangible assets	8 Intangible assets Intangible assets consist of the following: Exclusive licence Proprietary agreement Software technology Brand Total $ $ $ $ $ Year ended December 31, 2018 Opening net book value 27,500 189,766 4,115,187 809,545 5,141,998 Amortization (2,500) (51,450) (897,859) (176,628) (1,128,437) Closing net book value 25,000 138,316 3,217,328 632,917 4,013,561 As at December 31, 2018 Cost 50,000 257,254 4,489,295 883,140 5,679,689 Accumulated amortization (25,000) (118,938) (1,271,967) (250,223) (1,666,128) Net book value 25,000 138,316 3,217,328 632,917 4,013,561 Year ended December 31, 2019 Opening net book value 25,000 138,316 3,217,328 632,917 4,013,561 Addition 250,000 — — — 250,000 Amortization (8,802) (51,452) (897,859) (176,628) (1,134,741) Closing net book value 266,198 86,864 2,319,469 456,289 3,128,820 As at December 31, 2019 Cost 300,000 257,254 4,489,295 883,140 5,929,689 Accumulated amortization (33,802) (170,390) (2,169,826) (426,851) (2,800,869) Net book value 266,198 86,864 2,319,469 456,289 3,128,820 The Company has a licence agreement (the licence) with Sunnybrook Health Sciences Centre (Sunnybrook), pursuant to which Sunnybrook licenses to the Company certain intellectual property. Pursuant to the licence, the Company has exclusively licenced-in rights that enable the Company to use Sunnybrook’s technology for MRI-guided trans-urethral ultrasound therapy. Under the licence, the Company is subject to various obligations, including a milestone payment of $250,000, which was paid on August 16, 2019 upon FDA approval. In addition, the Company has a further option to acquire rights to improvements to the relevant technology and intellectual property. If the Company fails to comply with any of its obligations or otherwise breaches this agreement, Sunnybrook may have the right to terminate the licence. In accordance with the Company’s accounting policy, the carrying value of goodwill is assessed annually as well as assessed for impairment triggers at each reporting date to determine whether there exists any indicators of impairment. When there is an indicator of impairment of non-current assets within a CGU or group of CGUs containing goodwill, the Company tests the non-current assets for impairment first and recognizes any impairment loss on goodwill before applying any remaining impairment loss against the non-current assets within the CGU. The Company completed its annual goodwill impairment testing on the goodwill related to the Sonalleve MR-HIFU CGU, which comprises all of the goodwill of the Company, on December 31, 2019. The recoverable amount of the Sonalleve MR-HIFU CGU was calculated using fair value less costs of disposal (FVLCD). The calculation of the recoverable amount of the Sonalleve MR-HIFU CGU was determined using discounted cash flow projections based on financial forecasts approved by management covering a four-year period (Level 3 of the fair value hierarchy) and a terminal growth assumption of 4%. The key assumptions and estimates used in determining the FVLCD are related to revenue and EBITDA assumptions, which are based on the financial forecast and assumed growth rates, working capital assumptions, the effective tax rate of 26.5% and the discount rate of 18% applied to the cash flow projections. As a result of the impairment testing performed, it was determined that the recoverable amount of the Sonalleve MR-HIFU CGU of $7,494,000 exceeded the carrying value of $6,304,000 and no impairment writedown was required.

Right-of-use assets

Right-of-use assets	12 Months Ended
	Dec. 31, 2019
Right-of-use assets
Right-of-use assets	9 Right-of-use assets Leased premises $ As at January 1, 2019 Cost 2,616,773 Accumulated depreciation — Net book value 2,616,773 Year ended December 31, 2019 Opening net book value 2,616,773 Foreign exchange (10,995) Depreciation (406,397) Closing net book value 2,199,381 As at December 31, 2019 Cost 2,616,773 Accumulated depreciation (417,392) Net book value 2,199,381 The Company leases office premises in Mississauga, Canada and Vantaa, Finland. These lease agreements are typically entered into for four to ten-year periods.

Provisions

Provisions	12 Months Ended
	Dec. 31, 2019
Provisions
Provisions	10 Provisions Asset Revenue retirement share Warranty obligation obligation provision Total $ $ $ $ As at January 1, 2018 44,204 921,906 115,351 1,081,461 Additions — 208,242 65,079 273,321 Expiry — — (74,582) (74,582) Foreign exchange — 111,509 4,512 116,021 Accretion expense 5,115 — — 5,115 As at December 31, 2018 49,319 1,241,657 110,360 1,401,336 Change in accounting policy for IFRS 16 (note 2) (49,319) — — (49,319) Restated balance as at January 1, 2019 — 1,241,657 110,360 1,352,017 Additions — — 144,754 144,754 Expiry — (1,241,657) (93,835) (1,335,492) Foreign exchange — — (7,318) (7,318) As at December 31, 2019 — — 153,961 153,961 Less: Current portion — — 134,956 134,956 Long-term portion — — 19,005 19,005 Asset retirement obligation The asset retirement obligation was related to the Company’s leasehold improvements. This amount was transferred as part of the adoption of IFRS 16 (note 2). Revenue share obligation During January 2019, the Company replaced the original co-marketing and co-selling agreement with Siemens with a new agreement. Under the new agreement, all prior financial commitments and obligations owed to Siemens are released and replaced with a non-exclusive licence resulting in a one-time fixed licence fee and a per annum payment per device interfaced to a Siemens MRI scanner. In exchange for the one-time fixed licence fee and per annum payments, the Company obtained a non-exclusive licence and reasonable support for the term of the agreement. Warranty provision The warranty provision is related to the Company’s estimate of future warranty obligations on product sales, which generally have a term of 12 to 24 months.

Long-term debt

Long-term debt	12 Months Ended
	Dec. 31, 2019
Long-term debt
Long-term debt	11 A summary of the long-term debt is as follows: $ $ CIBC loan 11,864,385 11,955,245 Less: Current portion 5,144,461 1,339,583 Long-term portion 6,719,924 10,615,662 On July 30, 2018, the Company signed a term loan agreement with CIBC Innovation Banking (CIBC) to provide a secured loan for total initial gross proceeds of $12,500,000 maturing on July 29, 2022 with an interest rate based on prime plus 2.5%. The Company is required to make interest only payments until October 31, 2019 and monthly repayments on the principal of $378,788 plus accrued interest commencing on October 31, 2019. All obligations of the Company under the term loan agreement are guaranteed by current and future subsidiaries of the Company and include security of first priority interests in the assets of the Company and its subsidiaries. The Company has a financial covenant in relation to the CIBC loan where unrestricted cash is required to be greater than operating cash expenditures for a trailing three-month period, reported on a monthly basis. The Company is in compliance with this financial covenant as at December 31, 2019. Subsequent to year end, on February 4, 2020, the full amount of the CIBC loan, plus interest, was repaid for a total payment of $12,041,032. $ $ Balance - Beginning of period 11,955,245 — Proceeds received — 12,500,000 Transaction costs — (930,520) Interest and accretion expense 1,240,911 517,409 Repayment (1,331,771) (131,644) Balance - End of period 11,864,385 11,955,245 Less: Current portion 5,144,461 1,339,583 Long-term portion 6,719,924 10,615,662 In connection with this term loan agreement on July 31, 2018, the Company also issued 32,171 common share purchase warrants to CIBC, with each warrant entitling the holder to acquire one common share at a price of $9.70 per common share until the date that is 60 months from the closing of the term loan agreement, with a cashless exercise feature. The cashless exercise feature causes the conversion ratio to be variable and the warrants are therefore classified as a financial liability. Gains and losses on the warrants are recorded within finance costs on the consolidated statements of loss and comprehensive loss. A pricing model with observable market based inputs was used to estimate the fair value of the warrants issued. The estimated fair value of the warrants as at December 31, 2019 and 2018 was $254,769 and $98,203, respectively. The variables used to determine the fair values are as follows: 2019 2018 Share price $ 14.75 $ 5.50 Volatility 54 % 86 % Expected life of warrants 3.6 years 4.6 years Risk free interest rate 1.68 % 1.88 % Dividend yield — — The Federal Economic Development Agency (FedDev) loan with total proceeds of $867,000 was unsecured and non-interest bearing. The final repayment of $563,550 was made on July 25, 2018. During the year ended December 31, 2018, the Company recognized $90,775 of interest and accretion expense on this loan. The Health Technology Exchange (HTX) loans with total proceeds of $1,500,000 were unsecured and bore interest at 4.50% per annum. The final repayment of $1,094,698, including accrued interest, was made on March 31, 2018. During the year ended December 31, 2018, the Company recognized $18,078 of interest and accretion expense on these loans. On April 30, 2015, Profound Medical Inc. signed an agreement with Knight Therapeutics Inc. (Knight) to provide a secured loan of $4,000,000 (the Knight Loan) for an initial period of four years with an interest rate of 15% per annum, with payments of interest and principal deferred until June 30, 2017. As part of the agreement, Knight was also granted a royalty of 0.5% on net sales resulting from global sales of the Company’s products until May 20, 2019 (the royalty). In addition, the Company also entered into a distribution, licence and supply agreement with Knight pursuant to which Knight will act as the exclusive distributor of the Company’s product in Canada for an initial ten-year term, renewable for successive ten-year terms by either party. In connection with these arrangements, the Company issued to Knight 4% of the common shares of the Company (171,745 common shares). On July 25, 2018, the full amount of the Knight Loan, including prepayment fees, was repaid for a total payment of $3,188,023. The royalty was initially recorded at fair value and was subsequently carried at amortized cost using the effective interest rate method. The initial fair value of the royalty was determined using future revenue forecasts for the term of the loan and a discount rate of 18%. During the year ended December 31, 2019, the Company revised the fair value of the royalty, using future revenue forecasts for the term of the loan and a discount rate of 18%, and recognized an interest accretion recovery of $3,450 (2018 - $63,322).

Other liabilities

Other liabilities	12 Months Ended
	Dec. 31, 2019
Other liabilities
Other liabilities	12 Other liabilities Knight royalty Contingent Deferred payable consideration rent Total $ $ $ $ As at January 1, 2018 96,894 1,734,050 284,947 2,115,891 Additions — — 7,108 7,108 Amounts paid (13,919) (153,056) — (166,975) Change in fair value (note 17) — (325,253) — (325,253) Accretion recovery (note 17) (63,322) — — (63,322) As at December 31, 2018 19,653 1,255,741 292,055 1,567,449 Change in accounting policy for IFRS 16 (note 2) — — (292,055) (292,055) Restated balance as at January 1, 2019 19,653 1,255,741 — 1,275,394 Amounts paid (16,203) (102,786) — (118,989) Change in fair value — (866,097) — (866,097) Accretion recovery (note 17) (3,450) — — (3,450) As at December 31, 2019 — 286,858 — 286,858 Less: Current portion — 286,858 — 286,858 Long-term portion — — — — Knight royalty payable As part of the Knight Loan, Knight was granted a royalty of 0.5% on net sales resulting from global sales of the Company’s products until May 20, 2019. Contingent consideration On July 31, 2017, the Company entered into an Asset and Share Purchase Agreement (the agreement) to acquire all of the issued and outstanding shares and certain assets of Royal Philips’ (Philips) Sonalleve MR-HIFU business (Sonalleve). The agreement includes certain contingent consideration payments payable monthly in euro tied to future revenue levels of the Sonalleve business summarized as follows: · 5% of revenue between the date of acquisition and December 31, 2017; · 6% of revenue during the year ending December 31, 2018; · 7% of revenue during the years ending December 31, 2019 and 2020; and · if total revenues are in excess of a defined amount from the date of acquisition to December 31, 2020, then the Company will be required to pay 7% of revenue from the date of acquisition to December 31, 2019. The contingent consideration is classified as a Level 3 financial liability within the fair value hierarchy given its fair value is estimated using the discounted value of estimated future payments. The key assumptions in valuing the contingent consideration include: estimated projected net sales; the likelihood of certain levels being reached; and a discount rate of 15%. Deferred rent The deferred rent obligation was related to the Company’s straight-line rent accrual for its current premises. This amount was transferred as part of the adoption of IFRS 16 (note 2).

Lease liabilities

Lease liabilities	12 Months Ended
	Dec. 31, 2019
Lease liabilities
Lease liabilities	13 Lease liabilities $ As at January 1, 2019 2,587,727 Repayments (318,245) Foreign exchange (17,391) Interest and accretion expense 132,467 Balance - End of period 2,384,558 Less: Current portion 258,685 Long-term portion 2,125,873

Share capital

Share capital	12 Months Ended
	Dec. 31, 2019
Share capital
Share capital	14 Share capital Common shares The Company is authorized to issue an unlimited number of common shares. Issued and outstanding (with no par value) $ $ 11,852,749 (2018 – 10,805,494) common shares 130,266,880 120,932,404 On September 20, 2019, the Company closed an offering, resulting in the issuance of 1,045,455 units at a price of $11.00 per unit, for gross proceeds of $11,500,001 ($10,476,277, net of cash transaction costs). Each unit consisted of one common share of the Company and one-half of one warrant, with each whole warrant entitling the holder to acquire one common share at a price of $15.50 per common share until the date that is 24 months from the closing of the offering. On October 16, 2019, the Company completed a consolidation of its share capital on the basis of ten existing common shares for one new common share (note 5). As a result of the Share Consolidation, the 118,527,485 common shares issued and outstanding as at that date were consolidated to 11,852,749 common shares outstanding. On March 20, 2018, the Company closed a bought deal financing, resulting in the issuance of 3,450,000 units at a price of $10.00 per unit, for gross proceeds of $34,500,000 ($32,027,502, net of cash transaction costs). Each unit consisted of one common share of the Company and one-half of one warrant, with each whole warrant entitling the holder to acquire one common share at a price of $14.00 per common share until the date that is 60 months from the closing of the bought deal financing. Subsequent to year end, on January 27, 2020, the Company closed an offering, resulting in the issuance of 3,392,500 common shares at a price of US$11.65, for gross proceeds of US$39,522,625. Warrants As a result of the September 20, 2019 offering, 522,727 warrants were issued. As a result of the March 20, 2018 bought deal financing, 1,725,000 warrants were issued. A summary of warrants outstanding is shown below: Weighted Weighted average average remaining exercise contractual Number of price life warrants $ (years) Balance - January 1, 2018 500,000 14.00 2.72 Granted 1,757,171 13.90 4.23 Balance - December 31, 2018 2,257,171 13.90 2.92 Granted 522,727 15.50 1.73 Balance - December 31, 2019 2,779,898 14.20 2.49 The Company estimated the fair value of the warrants granted during the period using the Black-Scholes option pricing model with the following assumptions: September 20, March 20, Share price on date of issuance $ 10.60 $ 10.60 Expected volatility 58 % 71 % Expected life of warrants 2 years 5 years Risk-free interest rate 1.61 % 2.00 % Dividend yield — — Due to the absence of company specific volatility rates for the expected life of the warrants, the Company chose comparable companies in the medical device industry. The fair value of the warrants issued as part of the September 20, 2019 offering was $1,151,881, or $2.20 per warrant, and was recorded in contributed surplus. The fair value of the warrants issued as part of the March 20, 2018 bought deal financing was $9,767,750, or $5.56 per warrant, and was recorded in contributed surplus. Subsequent to year end, there were 309,671 warrants exercised for $4,425,394 in cash proceeds.

Share-based payments

Share-based payments	12 Months Ended
	Dec. 31, 2019
Share-based payments
Share-based payments	15 Share options Effective January 26, 2017, the Company adopted amendments to the share option plan (the Share Option Plan). The maximum number of common shares reserved for issuance under this plan is 1,540,857 common shares or such other number as may be approved by the holders of the voting shares of the Company. As at December 31, 2019, 1,109,943 (2018 – 624,478) options are outstanding. Each option granted allows the holder to purchase one common share, at an exercise price not less than the lesser of the closing trading price of the common shares on the TSX, on the date a share option is granted and the volume-weighted average price of the common shares for the five trading shares immediately preceding the date the share option is granted. Share options granted under the Share Option Plan generally have a maximum term of ten years and vest over a period of up to four years. A summary of the share option changes during the period presented and the total number of share options outstanding as at those dates are set forth below: Weighted average exercise Number price of options $ Balance - January 1, 2018 531,828 10.90 Granted 199,950 10.50 Exercised (43,656) 2.40 Forfeited/expired (63,644) 11.20 Balance - December 31, 2018 624,478 11.34 Granted 580,440 9.63 Exercised (1,800) 3.00 Forfeited/expired (93,175) 10.78 Balance - December 31, 2019 1,109,943 10.51 The Company estimated the fair value of the share options granted during the period using the Black-Scholes option pricing model with the weighted average assumptions below. Due to the absence of Company-specific volatility rates for the expected life of the share options, the Company chose comparable companies in the medical device industry. May 15, May 16, November 18, Share price on date of issuance $ 9.10 $ 9.40 $ 11.08 Expected volatility 82 % 82 % 82 % Expected life of share options 6 years 6 years 6 years Risk-free interest rate 1.59 % 1.59 % 1.40 % Dividend yield — — — Number of share options issued 13,300 484,940 82,200 March 28, May 22, June 15, August 23, November 19, Volatility 96 % 82 % 83 % 70 % 80 % Expected life of share options 6 years 6 years 6 years 6 years 6 years Risk-free interest rate 2.14 % 2.30 % 2.19 % 2.25 % 2.47 % Dividend yield — — — — — Number of share options issued 3,300 91,800 11,550 90,000 3,300 The following table summarizes information about the share options outstanding as at December 31, 2019: Weighted average Number of remaining Number of Exercise price options contractual life options $ outstanding (years) exercisable 2.40 21,275 2.70 21,275 6.00 3,300 8.91 1,100 8.50 31,500 7.90 16,402 9.10 13,300 9.39 — 9.20 484,240 9.40 — 9.30 50,000 8.67 16,667 9.70 4,950 7.34 3,850 9.90 2,800 8.26 1,224 10.20 9,900 8.48 5,500 11.00 197,172 6.97 149,034 11.23 82,200 9.89 — 11.90 51,800 8.41 20,504 13.50 8,300 6.63 7,571 14.60 93,406 6.66 77,838 15.00 55,800 5.68 55,800 1,109,943 8.16 376,765 Compensation expense related to share options for the year ended December 31, 2019 was $1,676,844 (2018 - $1,086,199). Subsequent to year end, there were 134,657 options exercised for total cash proceeds of $1,480,555.

Nature of expenses

Nature of expenses	12 Months Ended
	Dec. 31, 2019
Nature of expenses
Nature of expenses	16 Nature of expenses $ $ Production and manufacturing costs 1,670,816 1,303,246 Salaries and benefits 9,621,647 9,692,860 Consulting fees 5,493,882 5,041,562 Research and development expenses 2,933,105 1,005,843 Sales and marketing expenses (recovery) (193,369) 1,236,712 Amortization and depreciation 2,013,823 1,674,438 Share-based compensation 1,676,844 1,086,199 Rent 358,148 738,198 Bad debt expense 324,699 — Insurance 507,993 117,758 Other expenses 888,080 895,143 25,295,668 22,791,959

Finance costs

Finance costs	12 Months Ended
	Dec. 31, 2019
Finance costs
Finance costs	17 Finance costs $ $ CIBC loan (note 11) 1,240,911 517,409 Change in fair value of contingent consideration (note 12) (968,883) (325,253) Change in fair value of derivative financial instrument (note 11) 156,566 (96,619) Lease liability interest expense (note 13) 132,467 — Knight Loan (note 11) — 465,903 Provisions (note 10) — 5,115 Royalty interest recovery (notes 11 and 12) (3,450) (63,322) HTX and FedDev loans (note 11) — 108,853 Foreign exchange loss 153,977 214,226 711,588 826,312

Income taxes

Income taxes	12 Months Ended
	Dec. 31, 2019
Income taxes
Income taxes	18 Income taxes Income tax expense differs from the tax recovery amount that would be obtained by applying the statutory income tax rate to the respective year’s loss before income taxes as follows: $ $ Loss before income taxes 19,998,376 20,532,205 Recovery based on combined federal and provincial statutory rate of 26.5% (2018 - 26.5%) (5,299,570) (5,441,034) Permanent differences (182,660) (770,593) Change in deferred tax assets not recognized 5,658,576 6,460,542 Effect of tax rates in foreign jurisdictions 17,528 (18,131) Net income tax expense 193,874 230,784 Deferred tax assets are recognized for tax loss carry-forwards and unused tax credits to the extent that the realization of the related tax benefit through future taxable profits is probable. The Company has not recognized deferred tax assets that can be carried forward against future taxable income. Permanent differences are primarily comprised of non-refundable tax credits and deductible finance fees not recorded in the consolidated statements of loss and comprehensive loss, offset by non-deductible share-based compensation and accretion expense. The Company has non-capital loss carry-forwards of approximately $73,324,000 as at December 31, 2019 that expire in varying amounts from 2028 to 2039. The Company has SR&ED expenditures of approximately $16,589,000 as at December 31, 2019, which can be carried forward indefinitely to reduce future years’ taxable income. The Company has approximately $3,311,000 of federal and provincial tax credits that are available to be applied against federal and provincial taxes otherwise payable in future years and that expire in varying amounts from 2028 to 2039.

Loss per share

Loss per share	12 Months Ended
	Dec. 31, 2019
Loss per share
Loss per share	19 Loss per share The following table shows the calculation of basic and diluted loss per share: Net loss for the year $ 20,192,250 $ 20,762,989 Weighted average number of common shares 11,098,719 10,039,565 Basic and diluted loss per share $ 1.82 $ 2.07 Of the 1,109,943 (2018 – 624,478) share options and 2,779,898 (2018 – 2,257,171) warrants not included in the calculation of diluted loss per share for the period ended December 31, 2019, 3,156,663 (2018 – 2,505,302) were exercisable.

Financial assets and liabilitie

Financial assets and liabilities	12 Months Ended
	Dec. 31, 2019
Financial assets and liabilities
Summary of classification of financial instruments	20 Financial assets and liabilities Classification of financial instruments Financial Fair value Financial liabilities through assets at at profit or amortized amortized loss cost cost $ $ $ Cash — 19,222,195 — Trade and other receivables — 4,058,136 — Accounts payable and accrued liabilities — — 3,933,114 Long-term debt — — 11,864,385 Other liabilities 286,858 — — Lease liabilities — — 2,384,558 Derivative financial instrument 254,769 — — 541,627 23,266,001 18,182,057 Financial Fair value Financial liabilities through assets at at profit or amortized amortized loss cost cost $ $ $ Cash — 30,687,183 — Trade and other receivables — 2,686,112 — Accounts payable and accrued liabilities — — 3,912,350 Long-term debt — — 11,955,245 Other liabilities 1,255,741 — 19,653 Derivative financial instrument 98,203 — — 1,353,944 33,373,295 15,887,248 Credit risk Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligation. The Company is exposed to credit risk on its cash and trade and other receivable balances. The Company’s cash management policies include ensuring cash is deposited in Canadian chartered banks. The Company applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade and other receivables. To measure the expected credit losses, trade and other receivables are grouped based on shared credit risk characteristics and the days past due. On that basis, the loss allowance as at December 31, 2019 and 2018 is nominal as the Company only transacts with hospitals and private clinics and has not incurred a sustained trend of any credit losses since revenue began. Trade and other receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, failure to make contractual payments for a period of greater than 120 days past due. Market risk Market risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, including interest rate risk and foreign currency risk. · Interest rate price risk Interest rate price risk is the risk the cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company is exposed to such fluctuations relating to the long-term debt, as it bears interest at a floating rate, whose interest rates are based on the prime rate. If interest rates had been 1% higher on the average long-term debt balance, with all other variables held constant, loss before income taxes would have been $125,000 higher for the year ended December 31, 2019 (2018 - $52,083). · Foreign currency risk Foreign currency risk occurs as a result of foreign exchange rate fluctuations between the time a transaction is recorded and the time it is settled. The Company purchases goods and services denominated in foreign currencies and, accordingly, is subject to foreign currency risk. The Company’s financial instruments denominated in foreign currencies are shown below in Canadian dollars. US Canadian dollars Euro dollars Total $ $ $ $ Cash 63,087 909,232 18,249,876 19,222,195 Trade and other receivables 1,446,684 2,227,605 383,847 4,058,136 Accounts payable and accrued liabilities (707,654) (2,296,621) (928,839) (3,933,114) Other liabilities — (286,858) — (286,858) Lease liabilities — (223,511) (2,161,046) (2,384,558) US Canadian dollars Euro dollars Total $ $ $ $ Cash 136,879 1,039,205 29,511,099 30,687,183 Trade and other receivables 613,890 1,450,661 621,561 2,686,112 Accounts payable and accrued liabilities (472,431) (2,758,294) (681,625) (3,912,350) Other liabilities (excluding deferred rent) — (1,255,741) (19,653) (1,275,394) As at December 31, 2019, if foreign exchange rates had been 5% higher, with all other variables held constant, loss before income taxes would have been $63,890 (2018 – $62,292) higher, mainly as a result of the translation of foreign currency denominated cash, trade and other receivables, accounts payable and accrued liabilities, other liabilities and lease liabilities. The Company does not use derivatives to reduce exposure to foreign currency risk. Liquidity risk Liquidity risk is the risk the Company may encounter difficulties in meeting its financial liability obligations as they come due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company controls liquidity risk through management of working capital, cash flows and the availability and sourcing of financing. The Company’s ability to accomplish all of its future strategic plans is dependent on obtaining additional financing or executing other strategic options; however, there is no assurance the Company will achieve these objectives. The following table summarizes the Company’s significant contractual, undiscounted cash flows related to its financial liabilities. Future Between Greater Carrying cash Less than 1 year and than 5 amount flows 1 year 5 years years $ $ $ $ $ Accounts payable and accrued liabilities 3,933,114 3,933,114 3,933,114 — — Long-term debt 11,864,385 13,506,619 5,653,979 7,852,640 — Lease liability 2,384,558 2,865,755 382,080 2,076,630 407,045 Other liabilities 286,858 300,945 300,945 — — 18,468,915 20,606,433 10,270,118 9,929,270 407,045 Future Between Greater Carrying cash Less than 1 year and than 5 amount flows 1 year 5 years years $ $ $ $ $ Accounts payable and accrued liabilities 3,912,350 3,912,350 3,912,350 — — Long-term debt 11,955,245 14,497,042 1,936,455 12,560,587 — Other liabilities (excluding deferred rent) 1,275,394 1,365,217 429,426 935,791 — 17,142,989 19,774,609 6,278,231 13,496,378 — Fair value The fair values of cash, trade and other receivables, accounts payable and accrued liabilities and lease liabilities approximate their carrying values, due to their relatively short periods to maturity. The fair value of long-term debt approximates its carrying amount as it has a floating interest rate.

Related party transactions

Related party transactions	12 Months Ended
	Dec. 31, 2019
Related party transactions
Related party transactions	21 Related party transactions Key management includes the Company’s directors and senior management team. The remuneration of directors and the senior management team was as follows: $ $ Salaries and employee benefits 1,325,004 1,746,024 Termination benefits — 114,750 Directors’ fees 136,875 113,132 Share-based compensation 1,204,533 959,234 2,666,412 2,933,140 Executive employment agreements allow for additional payments in the event of a liquidity event, or if the executive is terminated without cause.

Commitments and contingencies

Commitments and contingencies	12 Months Ended
	Dec. 31, 2019
Commitments and contingencies
Commitments and contingencies	22 Commitments and contingencies All directors and officers of the Company are indemnified by the Company for various items including, but not limited to, all costs to settle lawsuits or actions due to their association with the Company, subject to certain restrictions. The Company has purchased directors’ and officers’ liability insurance to mitigate the cost of any potential future lawsuits or actions. The term of the indemnification is not explicitly defined, but is limited to events for the period during which the indemnified party served as a director or officer of the Company. The maximum amount of any potential future payment cannot be reasonably estimated but could have a material adverse effect on the Company. The Company has also indemnified certain lenders and underwriters in relation to certain debt and equity offerings and their respective affiliates and directors, officers, employees, shareholders, partners, advisers and agents and each other person, if any, controlling any of the underwriters or lenders or their affiliates against certain liabilities.

Capital management

Capital management	12 Months Ended
	Dec. 31, 2019
Capital management
Capital management	23 Capital management The Company’s capital management objectives are to safeguard its ability to continue as a going concern and to provide returns for shareholders and benefits for other stakeholders by ensuring it has sufficient cash resources to fund its research and development activities, to pursue its commercialization efforts and to maintain its ongoing operations. The Company includes its share capital, deficit and long-term debt in the definition of capital. A summary of the Company’s capital structure is as follows: $ $ Common shares 130,266,880 120,932,404 Deficit (131,065,492) (111,033,661) Long-term debt 11,864,385 11,955,245 11,065,773 21,853,988

Segment reporting

Segment reporting	12 Months Ended
	Dec. 31, 2019
Segment reporting
Segment reporting	24 Segment reporting The Company’s operations are categorized into one industry segment, which is medical technology focused on magnetic resonance guided ablation procedures for the treatment of prostate disease, uterine fibroids and palliative pain treatment for patients with metastatic bone disease. The Company is managed geographically in Canada, Germany and Finland. For the year ended December 31, 2019: Canada Germany Finland Total $ $ $ $ Revenue Product 3,002,906 1,892,521 — 4,895,427 Services 214,060 418,084 — 632,144 3,216,966 2,310,605 — 5,527,571 Cost of sales 1,199,864 1,161,941 — 2,361,805 Gross profit 2,017,102 1,148,664 — 3,165,766 Operating expenses Research and development 9,706,011 — 2,760,138 12,466,149 General and administrative 7,300,051 — 378,621 7,678,672 Selling and distribution 721,158 1,837,824 230,060 2,789,042 Total operating expenses 17,727,220 1,837,824 3,368,819 22,933,863 Operating loss 15,710,118 689,160 3,368,819 19,768,097 Net finance costs 230,279 Loss for the year before income taxes 19,998,376 For the year ended December 31, 2018: Canada Germany Finland Total $ $ $ $ Revenue Product 1,400,341 1,020,990 — Services 36,313 144,634 — 1,436,654 1,165,624 — Cost of sales 844,015 934,486 — Gross profit 592,639 231,138 — Operating expenses Research and development 7,844,125 — 2,421,263 General and administrative 6,256,746 — 399,977 Selling and distribution 2,004,143 1,676,389 410,815 Total operating expenses 16,105,014 1,676,389 3,232,055 Operating loss 15,512,375 1,445,251 3,232,055 Net finance costs Loss for the year before income taxes Other financial information by segment as at December 31, 2019: Canada Germany Finland Total $ $ $ $ Total assets 34,894,056 1,056,759 3,091,678 39,042,493 Goodwill and intangible assets 6,537,985 — — 6,537,985 Property and equipment 565,638 — 119,080 684,718 Right-of-use assets 1,980,405 — 218,976 2,199,381 Amortization of intangible assets 1,134,741 — — 1,134,741 Depreciation of property and equipment 231,657 267 240,761 472,685 Depreciation of right-of-use asset 293,393 — 113,004 406,397 Other financial information by segment as at December 31, 2018: Canada Germany Finland Total $ $ $ $ Total assets 42,437,691 1,093,184 3,018,997 Goodwill and intangible assets 7,422,726 — — Property and equipment 797,296 266 409,795 Amortization of intangible assets 1,128,437 — — Depreciation of property and equipment 296,093 3,100 246,808

Summary of significant accoun_2

Summary of significant accounting policies and basis of preparation (Policies)	12 Months Ended
	Dec. 31, 2019
Summary of significant accounting policies and basis of preparation
Basis of preparation	Basis of preparation The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). The Board of Directors approved these consolidated financial statements on March 3, 2020. These consolidated financial statements comply with IFRS.
Adoption of new accounting standards	Adoption of new accounting standards A new amended standard became applicable for the current reporting period and the Company had to change its accounting policies as a result. The impact of the adoption of this standard is disclosed below: · IFRS 16, Leases (IFRS 16) IFRS 16 sets out the principles for the recognition, measurement and disclosure of leases. IFRS 16 provides revised guidance on identifying a lease and for separating lease and non-lease components of a contract. IFRS 16 introduces a single accounting model for all lessees, thereby removing the distinction between operating and finance leases. IFRS 16 requires a lessee to recognize an asset (right-to-use the leased item) and a financial liability to pay rentals on the interim condensed consolidated balance sheets with terms of more than 12 months, unless the underlying asset is of low value. The standard permits either a full retrospective or a modified retrospective approach for the adoption. IFRS 16 was effective for annual periods beginning on or after January 1, 2019. The Company has adopted IFRS 16 retrospectively from January 1, 2019, but has not restated comparative information, as permitted under the specific transitional provisions in the standard in accordance with the modified retrospective approach for adoption. The reclassifications and the adjustments arising from the new leasing standard are therefore recognized in the opening consolidated balance sheet on January 1, 2019. Adjustments recognized on adoption of IFRS 16 On adoption of IFRS 16, the Company recognized lease liabilities in relation to leases, which had previously been classified as operating leases under the principles of IAS 17, Leases (IAS 17). These liabilities were measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate as of January 1, 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 4%. $ Operating lease commitments as at December 31, 2018 3,313,292 Asset retirement obligation 111,100 Discounted using the Company’s average incremental borrowing rate of 4.0% (836,665) Lease liabilities recognized as at January 1, 2019 2,587,727 The change in accounting policy affected the following items in the consolidated balance sheet on January 1, 2019: Increase (decrease) $ Right-of-use assets 2,616,773 Lease liabilities 2,587,727 Prepaid expenses and deposits (210,001) Provisions (49,319) Other liabilities (292,055) Deficit 160,419 Practical expedients applied The Company has elected to apply the practical expedient not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term. The Company has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Company has relied on its assessment made applying IAS 17 and IFRIC 4, Determining whether an Arrangement contains a Lease. Accounting policy At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The assets are depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option. Lease terms range from four to ten years for offices. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Use of estimates and judgments	Use of estimates and judgments The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.
Consolidation	Consolidation Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The wholly owned subsidiaries of Profound are consolidated from the date control is obtained. All intercompany transactions, balances, income and expenses on transactions with the subsidiaries are fully eliminated. These consolidated financial statements include the following wholly owned subsidiaries of the Company: Profound Medical Inc., Profound Medical Oy, Profound Medical GmbH and Profound Medical (U.S.) Inc.
Business combinations	Business combinations The acquisition method of accounting is used to account for business combinations. The consideration transferred in a business combination is measured at fair value at the date of acquisition. Acquisition-related transaction costs are recognized in the consolidated statements of loss and comprehensive loss as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are initially recognized at their fair value. Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and is included as part of the consideration transferred in a business combination. Changes in the acquisition date fair values of the identifiable assets, liabilities and contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Other than measurement period adjustments, contingent consideration that is classified as a financial liability is remeasured at subsequent reporting dates, with the corresponding gain or loss recognized in the consolidated statements of loss and comprehensive loss.
Segment reporting	Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the chief executive officer.
Foreign currency translation	Foreign currency translation The Company has a functional currency of Canadian dollars and the functional currency of each subsidiary is determined based on facts and circumstances relevant for each subsidiary. Where the Company’s presentation currency of Canadian dollars differs from the functional currency of a subsidiary, the assets and liabilities of the subsidiary are translated from the functional currency into the presentation currency at the exchange rates as at the reporting date. The income and expenses of the subsidiaries are translated at rates approximating the exchange rates at the dates of the transactions. Exchange differences arising on the translation of the financial statements of the Company’s subsidiaries are recognized in other comprehensive loss (income). Foreign currency transactions are translated into the functional currency of the Company or its subsidiaries, using the exchange rates prevailing at the dates of these transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than an entity’s functional currency are recognized in the consolidated statements of loss and comprehensive loss, within finance costs.
Investment tax credits	Investment tax credits The benefits of refundable investment tax credits (ITCs) for scientific research and experimental development (SR&ED) expenditures are recognized in the year the qualifying expenditure is made providing there is reasonable assurance of recoverability. The refundable ITCs recorded are based on management’s estimates of amounts expected to be recovered and are subject to audit by taxation authorities. The refundable ITCs reduce the research and development expenses to which they relate.
Financial assets	Financial assets The Company classifies its financial assets in the following measurement categories: · those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss); and · those to be measured at amortized cost. The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows. The Company does not currently have any assets measured subsequently at fair value. At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortized cost. For trade and other receivables, the Company applies the simplified approach permitted by IFRS 9, Financial Instruments (IFRS 9), which requires lifetime expected credit losses to be recognized at the time of initial recognition of the receivables.
Inventories	Inventories Inventories are valued at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost is determined using the first-in, first-out method for finished goods and weighted average cost for raw materials.
Property and equipment	Property and equipment Property and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to the consolidated statements of loss and comprehensive loss during the year in which they are incurred. The major categories of property and equipment are depreciated on a straight-line basis as follows: Furniture and fittings 20 % per year Research and manufacturing equipment 30 % per year Computer equipment 45 % per year Computer software 100 % per year Leasehold improvements over the term of the lease Residual values, methods of depreciation and useful lives of the assets are reviewed annually and adjusted if appropriate.
Goodwill	Goodwill Goodwill represents the excess fair value of the consideration transferred over the fair value of the underlying net assets in a business combination and is measured at cost less accumulated impairment losses. Goodwill is not amortized but is tested for impairment on an annual basis or more frequently if there are indications the goodwill may be impaired. For the purposes of impairment testing, goodwill is allocated to each of the Company’s cash generating units (CGUs) or group of CGUs that are expected to benefit from the synergies of the acquisition. If the recoverable amount of the CGU or group of CGUs is less than the carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill and then to other assets of the CGU or group of CGUs.
Identifiable intangible assets	Identifiable intangible assets The Company’s intangible assets are stated at cost, less accumulated amortization and are amortized on a straight-line basis in the consolidated statements of loss and comprehensive loss over their estimated useful lives. The major categories of intangible assets are amortized as follows: Exclusive licence agreement 20 years Software 5 years Brand 5 years Proprietary technology 5 years
Impairment of non-financial assets	Impairment of non-financial assets Property and equipment and intangible assets are tested for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flow CGUs. The recoverable amount is the higher of an asset’s fair value, less costs of disposal and value in use (which is the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized as the amount by which the asset’s carrying amount exceeds its recoverable amount. The Company evaluates impairment losses for potential reversals when events or circumstances warrant such consideration.
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities These amounts represent liabilities for goods and services provided to the Company before the end of the financial year, which are unpaid. Accounts payable and accrued liabilities are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
Long-term debt	Long-term debt Long-term debt is initially recognized at fair value, net of transaction costs incurred. Long-term debt is subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the consolidated statements of loss and comprehensive loss over the period of the long-term debt using the effective interest method. Long-term debt is removed from the consolidated balance sheets when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished and the consideration paid is recognized in the consolidated statements of loss and comprehensive loss within finance costs.
Financial liabilities and equity instruments	Financial liabilities and equity instruments · Classification as debt or equity Instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Provisions	Provisions A provision is recognized when the Company has a legal or constructive obligation as result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Revenue	Revenue To determine revenue recognition for arrangements the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company derives its revenues primarily from the sale of medical devices. Revenue is recognized when a contractual promise to a customer (performance obligation) has been fulfilled by transferring control over the promised goods or services, generally at the point in time of shipment to or receipt of the products by the customer or when the services are performed. When contracts contain customer acceptance provisions, revenue is recognized on the satisfaction of the specific acceptance criteria. The amount of revenue to be recognized is based on the consideration the Company expects to receive in exchange for its goods and services. For contracts that contain multiple performance obligations, the Company allocates the consideration to which it expects to be entitled to each performance obligation based on relative standalone selling prices and recognizes the related revenue when or as control of each individual performance obligation is transferred to customers. Service revenue related to installation and training is recognized over the period in which the services are performed. Service revenue related to extended warranty service is deferred and recognized on a straight-line basis over the extended warranty period covered by the respective customer contract. Under the terms of certain of the Company’s partnership agreements, the Company retains a percentage of all amounts earned with the remaining percentage due to the partner. Accordingly, associated revenue is recognized net of the consideration due to the partner.
Cost of sales	Cost of sales Cost of sales primarily includes the cost of finished goods, inventory provisions, royalties, warranty expense, freight and direct overhead expenses necessary to acquire or manufacture the finished goods.
Income taxes	Income taxes Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the differences between the tax basis and carrying amounts of assets and liabilities, for operating losses and for tax credit carry-forwards. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which temporary differences can be utilized. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates and laws.
Share-based compensation	Share-based compensation The Company grants share options periodically to certain employees, directors, officers and advisers. Options currently outstanding vest over four years and have a contractual life of ten years. Each tranche in an award is considered a separate award with its own vesting period and grant date fair value. The fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model. Compensation expense is recognized over the tranche’s vesting period using the graded vesting method by increasing contributed surplus based on the number of awards expected to vest.
Research and development costs	Research and development costs Research costs are charged to expense as incurred. Development costs are capitalized and amortized when the criteria for capitalization are met, otherwise they are expensed as incurred. No development costs have been capitalized to date. Clinical trial expenses result from obligations under contracts with vendors, consultants and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company. The appropriate level of clinical trial expenses is reflected in the Company’s consolidated financial statements by matching period expenses with period services and efforts expended. These expenses are recorded according to the progress of the clinical trial as measured by patient progression and the timing of various aspects of the clinical trial. Clinical trial accrual estimates are determined through discussions with internal clinical personnel and outside service providers as to the progress or state of completion of clinical trials, or the services completed. Service provider status is then compared to the contractually obligated fees to be paid for such services. During the course of a clinical trial, the Company may adjust the rate of clinical expense recognized if actual results differ from management’s estimates.
Loss per share	Loss per share Basic loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the year. Diluted loss per share is calculated by dividing the applicable net loss by the sum of the weighted average number of shares outstanding during the year and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued during the year. The computation of diluted loss per share is equal to the basic loss per share due to the anti-dilutive effect of the share options and warrants.

Summary of significant accoun_3

Summary of significant accounting policies and basis of preparation (Tables)	12 Months Ended
	Dec. 31, 2019
Summary of significant accounting policies and basis of preparation
Schedule of Lease liabilities	$ Operating lease commitments as at December 31, 2018 3,313,292 Asset retirement obligation 111,100 Discounted using the Company’s average incremental borrowing rate of 4.0% (836,665) Lease liabilities recognized as at January 1, 2019 2,587,727
Schedule of Effect of adoption of IFRS 16	The change in accounting policy affected the following items in the consolidated balance sheet on January 1, 2019: Increase (decrease) $ Right-of-use assets 2,616,773 Lease liabilities 2,587,727 Prepaid expenses and deposits (210,001) Provisions (49,319) Other liabilities (292,055) Deficit 160,419
Schedule of Depreciation rates of Assets	Furniture and fittings 20 % per year Research and manufacturing equipment 30 % per year Computer equipment 45 % per year Computer software 100 % per year Leasehold improvements over the term of the lease
Schedule of Useful Lives of Identifiable Intangible Assets	Exclusive licence agreement 20 years Software 5 years Brand 5 years Proprietary technology 5 years

Trade and other receivables (Ta

Trade and other receivables (Tables)	12 Months Ended
	Dec. 31, 2019
Trade and other receivables
Schedule of Trade and other receivables	$ $ Trade receivables 2,588,470 1,791,688 Interest receivable 32,287 55,730 Tax receivables 1,108,340 565,832 Other receivables 329,039 272,862 Total trade and other receivables 4,058,136 2,686,112

Inventory (Tables)

Inventory (Tables)	12 Months Ended
	Dec. 31, 2019
Inventory
Schedule of Inventories	$ $ Finished goods 2,384,704 2,305,746 Raw materials 2,403,652 1,383,572 Inventory provision (23,898) (57,695) Total inventory 4,764,458 3,631,623

Property and equipment (Tables)

Property and equipment (Tables)	12 Months Ended
	Dec. 31, 2019
Property and equipment
Schedule of Property and equipment	Research Furniture and and manufacturing Leasehold Computer Computer fittings equipment improvements equipment software Total $ $ $ $ $ $ Year ended December 31, 2018 Opening net book value 134,883 947,588 605,789 37,890 — 1,726,150 Foreign exchange — 27,208 — — — 27,208 Depreciation (38,318) (403,554) (69,282) (34,847) — (546,001) Closing net book value 96,565 571,242 536,507 3,043 — 1,207,357 At December 31, 2018 Cost 235,169 1,386,692 718,742 212,541 176,462 2,729,606 Accumulated depreciation (138,604) (815,450) (182,235) (209,498) (176,462) (1,522,249) Net book value 96,565 571,242 536,507 3,043 — 1,207,357 Year ended December 31, 2019 Opening net book value 96,565 571,242 536,507 3,043 — 1,207,357 Foreign exchange — (49,954) — — — (49,954) Depreciation (38,318) (362,041) (69,283) (3,043) — (472,685) Closing net book value 58,247 159,247 467,224 — — 684,718 At December 31, 2019 Cost 235,169 1,386,692 718,742 212,541 176,462 2,729,606 Accumulated depreciation (176,922) (1,227,445) (251,518) (212,541) (176,462) (2,044,888) Net book value 58,247 159,247 467,224 — — 684,718

Intangible assets (Tables)

Intangible assets (Tables)	12 Months Ended
	Dec. 31, 2019
Intangible assets
Schedule of Intangible assets	Exclusive licence Proprietary agreement Software technology Brand Total $ $ $ $ $ Year ended December 31, 2018 Opening net book value 27,500 189,766 4,115,187 809,545 5,141,998 Amortization (2,500) (51,450) (897,859) (176,628) (1,128,437) Closing net book value 25,000 138,316 3,217,328 632,917 4,013,561 As at December 31, 2018 Cost 50,000 257,254 4,489,295 883,140 5,679,689 Accumulated amortization (25,000) (118,938) (1,271,967) (250,223) (1,666,128) Net book value 25,000 138,316 3,217,328 632,917 4,013,561 Year ended December 31, 2019 Opening net book value 25,000 138,316 3,217,328 632,917 4,013,561 Addition 250,000 — — — 250,000 Amortization (8,802) (51,452) (897,859) (176,628) (1,134,741) Closing net book value 266,198 86,864 2,319,469 456,289 3,128,820 As at December 31, 2019 Cost 300,000 257,254 4,489,295 883,140 5,929,689 Accumulated amortization (33,802) (170,390) (2,169,826) (426,851) (2,800,869) Net book value 266,198 86,864 2,319,469 456,289 3,128,820

Right-of-use assets (Tables)

Right-of-use assets (Tables)	12 Months Ended
	Dec. 31, 2019
Right-of-use assets
Schedule of right-of-use assets	Leased premises $ As at January 1, 2019 Cost 2,616,773 Accumulated depreciation — Net book value 2,616,773 Year ended December 31, 2019 Opening net book value 2,616,773 Foreign exchange (10,995) Depreciation (406,397) Closing net book value 2,199,381 As at December 31, 2019 Cost 2,616,773 Accumulated depreciation (417,392) Net book value 2,199,381

Provisions (Tables)

Provisions (Tables)	12 Months Ended
	Dec. 31, 2019
Provisions
Schedule of components of the company's provisions and their changes during the period	Asset Revenue retirement share Warranty obligation obligation provision Total $ $ $ $ As at January 1, 2018 44,204 921,906 115,351 1,081,461 Additions — 208,242 65,079 273,321 Expiry — — (74,582) (74,582) Foreign exchange — 111,509 4,512 116,021 Accretion expense 5,115 — — 5,115 As at December 31, 2018 49,319 1,241,657 110,360 1,401,336 Change in accounting policy for IFRS 16 (note 2) (49,319) — — (49,319) Restated balance as at January 1, 2019 — 1,241,657 110,360 1,352,017 Additions — — 144,754 144,754 Expiry — (1,241,657) (93,835) (1,335,492) Foreign exchange — — (7,318) (7,318) As at December 31, 2019 — — 153,961 153,961 Less: Current portion — — 134,956 134,956 Long-term portion — — 19,005 19,005

Long-term debt (Tables)

Long-term debt (Tables)	12 Months Ended
	Dec. 31, 2019
Long-term debt
Schedule of the long-term debt	$ $ CIBC loan 11,864,385 11,955,245 Less: Current portion 5,144,461 1,339,583 Long-term portion 6,719,924 10,615,662
Schedule of changes during the period for long-term debt	$ $ Balance - Beginning of period 11,955,245 — Proceeds received — 12,500,000 Transaction costs — (930,520) Interest and accretion expense 1,240,911 517,409 Repayment (1,331,771) (131,644) Balance - End of period 11,864,385 11,955,245 Less: Current portion 5,144,461 1,339,583 Long-term portion 6,719,924 10,615,662
Schedule of variables used to determine the fair value of purchase warrants issued for borrowings	2019 2018 Share price $ 14.75 $ 5.50 Volatility 54 % 86 % Expected life of warrants 3.6 years 4.6 years Risk free interest rate 1.68 % 1.88 % Dividend yield — —

Other liabilities (Tables)

Other liabilities (Tables)	12 Months Ended
	Dec. 31, 2019
Other liabilities
Schedule of changes during the period for other liabilities	Knight royalty Contingent Deferred payable consideration rent Total $ $ $ $ As at January 1, 2018 96,894 1,734,050 284,947 2,115,891 Additions — — 7,108 7,108 Amounts paid (13,919) (153,056) — (166,975) Change in fair value (note 17) — (325,253) — (325,253) Accretion recovery (note 17) (63,322) — — (63,322) As at December 31, 2018 19,653 1,255,741 292,055 1,567,449 Change in accounting policy for IFRS 16 (note 2) — — (292,055) (292,055) Restated balance as at January 1, 2019 19,653 1,255,741 — 1,275,394 Amounts paid (16,203) (102,786) — (118,989) Change in fair value — (866,097) — (866,097) Accretion recovery (note 17) (3,450) — — (3,450) As at December 31, 2019 — 286,858 — 286,858 Less: Current portion — 286,858 — 286,858 Long-term portion — — — —

Lease liabilities (Tables)

Lease liabilities (Tables)	12 Months Ended
	Dec. 31, 2019
Lease liabilities
Schedule of changes in lease liabilities	$ As at January 1, 2019 2,587,727 Repayments (318,245) Foreign exchange (17,391) Interest and accretion expense 132,467 Balance - End of period 2,384,558 Less: Current portion 258,685 Long-term portion 2,125,873

Share capital (Tables)

Share capital (Tables)	12 Months Ended
	Dec. 31, 2019
Share capital
Schedule of issued and outstanding common shares (with no par value)	$ $ 11,852,749 (2018 – 10,805,494) common shares 130,266,880 120,932,404
Schedule of warrants outstanding	Weighted Weighted average average remaining exercise contractual Number of price life warrants $ (years) Balance - January 1, 2018 500,000 14.00 2.72 Granted 1,757,171 13.90 4.23 Balance - December 31, 2018 2,257,171 13.90 2.92 Granted 522,727 15.50 1.73 Balance - December 31, 2019 2,779,898 14.20 2.49
Schedule of assumptions used to determine the fair value of warrants	September 20, March 20, Share price on date of issuance $ 10.60 $ 10.60 Expected volatility 58 % 71 % Expected life of warrants 2 years 5 years Risk-free interest rate 1.61 % 2.00 % Dividend yield — —

Share-based payments (Tables)

Share-based payments (Tables)	12 Months Ended
	Dec. 31, 2019
Share-based payments
Summary of the share option changes during the period presented and the total number of share options outstanding	Weighted average exercise Number price of options $ Balance - January 1, 2018 531,828 10.90 Granted 199,950 10.50 Exercised (43,656) 2.40 Forfeited/expired (63,644) 11.20 Balance - December 31, 2018 624,478 11.34 Granted 580,440 9.63 Exercised (1,800) 3.00 Forfeited/expired (93,175) 10.78 Balance - December 31, 2019 1,109,943 10.51
Summary of estimated the fair value of the share options granted	May 15, May 16, November 18, Share price on date of issuance $ 9.10 $ 9.40 $ 11.08 Expected volatility 82 % 82 % 82 % Expected life of share options 6 years 6 years 6 years Risk-free interest rate 1.59 % 1.59 % 1.40 % Dividend yield — — — Number of share options issued 13,300 484,940 82,200 March 28, May 22, June 15, August 23, November 19, Volatility 96 % 82 % 83 % 70 % 80 % Expected life of share options 6 years 6 years 6 years 6 years 6 years Risk-free interest rate 2.14 % 2.30 % 2.19 % 2.25 % 2.47 % Dividend yield — — — — — Number of share options issued 3,300 91,800 11,550 90,000 3,300
Summary of the share options outstanding	Weighted average Number of remaining Number of Exercise price options contractual life options $ outstanding (years) exercisable 2.40 21,275 2.70 21,275 6.00 3,300 8.91 1,100 8.50 31,500 7.90 16,402 9.10 13,300 9.39 — 9.20 484,240 9.40 — 9.30 50,000 8.67 16,667 9.70 4,950 7.34 3,850 9.90 2,800 8.26 1,224 10.20 9,900 8.48 5,500 11.00 197,172 6.97 149,034 11.23 82,200 9.89 — 11.90 51,800 8.41 20,504 13.50 8,300 6.63 7,571 14.60 93,406 6.66 77,838 15.00 55,800 5.68 55,800 1,109,943 8.16 376,765

Nature of expenses (Tables)

Nature of expenses (Tables)	12 Months Ended
	Dec. 31, 2019
Nature of expenses
Schedule of nature of expenses	$ $ Production and manufacturing costs 1,670,816 1,303,246 Salaries and benefits 9,621,647 9,692,860 Consulting fees 5,493,882 5,041,562 Research and development expenses 2,933,105 1,005,843 Sales and marketing expenses (recovery) (193,369) 1,236,712 Amortization and depreciation 2,013,823 1,674,438 Share-based compensation 1,676,844 1,086,199 Rent 358,148 738,198 Bad debt expense 324,699 — Insurance 507,993 117,758 Other expenses 888,080 895,143 25,295,668 22,791,959

Finance costs (Tables)

Finance costs (Tables)	12 Months Ended
	Dec. 31, 2019
Finance costs
Schedule of finance costs	$ $ CIBC loan (note 11) 1,240,911 517,409 Change in fair value of contingent consideration (note 12) (968,883) (325,253) Change in fair value of derivative financial instrument (note 11) 156,566 (96,619) Lease liability interest expense (note 13) 132,467 — Knight Loan (note 11) — 465,903 Provisions (note 10) — 5,115 Royalty interest recovery (notes 11 and 12) (3,450) (63,322) HTX and FedDev loans (note 11) — 108,853 Foreign exchange loss 153,977 214,226 711,588 826,312

Income taxes (Tables)

Income taxes (Tables)	12 Months Ended
	Dec. 31, 2019
Income taxes
Summary of income taxes expense	$ $ Loss before income taxes 19,998,376 20,532,205 Recovery based on combined federal and provincial statutory rate of 26.5% (2018 - 26.5%) (5,299,570) (5,441,034) Permanent differences (182,660) (770,593) Change in deferred tax assets not recognized 5,658,576 6,460,542 Effect of tax rates in foreign jurisdictions 17,528 (18,131) Net income tax expense 193,874 230,784

Loss per share (Tables)

Loss per share (Tables)	12 Months Ended
	Dec. 31, 2019
Loss per share
Schedule of basic and diluted loss per share	Net loss for the year $ 20,192,250 $ 20,762,989 Weighted average number of common shares 11,098,719 10,039,565 Basic and diluted loss per share $ 1.82 $ 2.07

Financial assets and liabilit_2

Financial assets and liabilities (Tables)	12 Months Ended
	Dec. 31, 2019
Financial assets and liabilities
Summary of classification of financial instruments	Financial Fair value Financial liabilities through assets at at profit or amortized amortized loss cost cost $ $ $ Cash — 19,222,195 — Trade and other receivables — 4,058,136 — Accounts payable and accrued liabilities — — 3,933,114 Long-term debt — — 11,864,385 Other liabilities 286,858 — — Lease liabilities — — 2,384,558 Derivative financial instrument 254,769 — — 541,627 23,266,001 18,182,057 Financial Fair value Financial liabilities through assets at at profit or amortized amortized loss cost cost $ $ $ Cash — 30,687,183 — Trade and other receivables — 2,686,112 — Accounts payable and accrued liabilities — — 3,912,350 Long-term debt — — 11,955,245 Other liabilities 1,255,741 — 19,653 Derivative financial instrument 98,203 — — 1,353,944 33,373,295 15,887,248
Summary of financial instruments denominated in foreign currencies	US Canadian dollars Euro dollars Total $ $ $ $ Cash 63,087 909,232 18,249,876 19,222,195 Trade and other receivables 1,446,684 2,227,605 383,847 4,058,136 Accounts payable and accrued liabilities (707,654) (2,296,621) (928,839) (3,933,114) Other liabilities — (286,858) — (286,858) Lease liabilities — (223,511) (2,161,046) (2,384,558) US Canadian dollars Euro dollars Total $ $ $ $ Cash 136,879 1,039,205 29,511,099 30,687,183 Trade and other receivables 613,890 1,450,661 621,561 2,686,112 Accounts payable and accrued liabilities (472,431) (2,758,294) (681,625) (3,912,350) Other liabilities (excluding deferred rent) — (1,255,741) (19,653) (1,275,394)
Summary of significant contractual, undiscounted cash flows related to its financial liabilities	Future Between Greater Carrying cash Less than 1 year and than 5 amount flows 1 year 5 years years $ $ $ $ $ Accounts payable and accrued liabilities 3,933,114 3,933,114 3,933,114 — — Long-term debt 11,864,385 13,506,619 5,653,979 7,852,640 — Lease liability 2,384,558 2,865,755 382,080 2,076,630 407,045 Other liabilities 286,858 300,945 300,945 — — 18,468,915 20,606,433 10,270,118 9,929,270 407,045 Future Between Greater Carrying cash Less than 1 year and than 5 amount flows 1 year 5 years years $ $ $ $ $ Accounts payable and accrued liabilities 3,912,350 3,912,350 3,912,350 — — Long-term debt 11,955,245 14,497,042 1,936,455 12,560,587 — Other liabilities (excluding deferred rent) 1,275,394 1,365,217 429,426 935,791 — 17,142,989 19,774,609 6,278,231 13,496,378 —

Related party transactions (Tab

Related party transactions (Tables)	12 Months Ended
	Dec. 31, 2019
Related party transactions
Summary of remuneration of directors and the senior management team	$ $ Salaries and employee benefits 1,325,004 1,746,024 Termination benefits — 114,750 Directors’ fees 136,875 113,132 Share-based compensation 1,204,533 959,234 2,666,412 2,933,140

Capital management (Tables)

Capital management (Tables)	12 Months Ended
	Dec. 31, 2019
Capital management
Schedule of capital management	$ $ Common shares 130,266,880 120,932,404 Deficit (131,065,492) (111,033,661) Long-term debt 11,864,385 11,955,245 11,065,773 21,853,988

Segment reporting (Tables)

Segment reporting (Tables)	12 Months Ended
	Dec. 31, 2019
Segment reporting
Schedule of financial information of geographical segments	Canada Germany Finland Total $ $ $ $ Revenue Product 3,002,906 1,892,521 — 4,895,427 Services 214,060 418,084 — 632,144 3,216,966 2,310,605 — 5,527,571 Cost of sales 1,199,864 1,161,941 — 2,361,805 Gross profit 2,017,102 1,148,664 — 3,165,766 Operating expenses Research and development 9,706,011 — 2,760,138 12,466,149 General and administrative 7,300,051 — 378,621 7,678,672 Selling and distribution 721,158 1,837,824 230,060 2,789,042 Total operating expenses 17,727,220 1,837,824 3,368,819 22,933,863 Operating loss 15,710,118 689,160 3,368,819 19,768,097 Net finance costs 230,279 Loss for the year before income taxes 19,998,376 Canada Germany Finland Total $ $ $ $ Revenue Product 1,400,341 1,020,990 — Services 36,313 144,634 — 1,436,654 1,165,624 — Cost of sales 844,015 934,486 — Gross profit 592,639 231,138 — Operating expenses Research and development 7,844,125 — 2,421,263 General and administrative 6,256,746 — 399,977 Selling and distribution 2,004,143 1,676,389 410,815 Total operating expenses 16,105,014 1,676,389 3,232,055 Operating loss 15,512,375 1,445,251 3,232,055 Net finance costs Loss for the year before income taxes Canada Germany Finland Total $ $ $ $ Total assets 34,894,056 1,056,759 3,091,678 39,042,493 Goodwill and intangible assets 6,537,985 — — 6,537,985 Property and equipment 565,638 — 119,080 684,718 Right-of-use assets 1,980,405 — 218,976 2,199,381 Amortization of intangible assets 1,134,741 — — 1,134,741 Depreciation of property and equipment 231,657 267 240,761 472,685 Depreciation of right-of-use asset 293,393 — 113,004 406,397 Canada Germany Finland Total $ $ $ $ Total assets 42,437,691 1,093,184 3,018,997 Goodwill and intangible assets 7,422,726 — — Property and equipment 797,296 266 409,795 Amortization of intangible assets 1,128,437 — — Depreciation of property and equipment 296,093 3,100 246,808

Summary of significant accoun_4

Summary of significant accounting policies and basis of preparation - Adoption Of New accounting standards (Details) - CAD ($)	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Lease liabilities
Operating lease commitments as at December 31, 2018		$ 3,313,292
Asset retirement obligation		111,100
Discounted using the Company's average incremental borrowing rate of 4.0%		(836,665)
Lease liabilities recognized as at January 1, 2019	$ 2,384,558	$ 2,587,727	$ 2,587,727
Weighted average lessee's incremental borrowing rate		4.00%

Summary of significant accoun_5

Summary of significant accounting policies and basis of preparation - Change in accounting policy effenct on Balance sheet (Details)	Dec. 31, 2019USD ($)	Dec. 31, 2019CAD ($)	Jan. 01, 2019CAD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2018CAD ($)	Dec. 31, 2017USD ($)
Disclosure of initial application of standards or interpretations [line items]
Right-of-use assets		$ 2,199,381			$ 2,616,773
Lease liabilities		2,384,558	$ 2,587,727		2,587,727
Prepaid expenses and deposits		1,335,620			434,871
Provisions (note 10)		(19,005)			(49,319)
Other liabilities	$ (286,858)			$ (1,567,449)		$ (2,115,891)
Deficit		$ (131,065,492)			$ (111,033,661)
Ifrs16
Disclosure of initial application of standards or interpretations [line items]
Right-of-use assets			2,616,773
Lease liabilities			2,587,727
Prepaid expenses and deposits			(210,001)
Provisions (note 10)			(49,319)
Other liabilities			(292,055)
Deficit			$ 160,419

Summary of significant accoun_6

Summary of significant accounting policies and basis of preparation - Property and equipment (Details)	12 Months Ended
	Dec. 31, 2019
Furniture and fittings
Disclosure Of Significant Accounting Policies
Depreciation of property and equipment	20.00%
Research and manufacturing equipment
Disclosure Of Significant Accounting Policies
Depreciation of property and equipment	30.00%
Computer equipment
Disclosure Of Significant Accounting Policies
Depreciation of property and equipment	45.00%
Computer software
Disclosure Of Significant Accounting Policies
Depreciation of property and equipment	100.00%

Summary of significant accoun_7

Summary of significant accounting policies and basis of preparation - Identifiable Intangiable assets (Details)	12 Months Ended
	Dec. 31, 2019
Exclusive license agreement
Disclosure Of Significant Accounting Policies
Useful life	20 years
Software
Disclosure Of Significant Accounting Policies
Useful life	5 years
Brand
Disclosure Of Significant Accounting Policies
Useful life	5 years
Proprietary technology
Disclosure Of Significant Accounting Policies
Useful life	5 years

Share consolidation (Details)

Share consolidation (Details) - shares	Dec. 31, 2019	Oct. 16, 2019	Oct. 15, 2019	Dec. 31, 2018
Share consolidation
Common shares issued	11,852,749			10,805,494
Common shares outstanding	11,852,749	11,852,749	118,527,485	10,805,494
Ordinary shares
Share consolidation
Common shares issued		118,527,485
Common shares outstanding		11,852,749

Trade and other receivables (De

Trade and other receivables (Details) - CAD ($)	Dec. 31, 2019	Dec. 31, 2018
Trade and other receivables
Trade receivables	$ 2,588,470	$ 1,791,688
Interest receivable	32,287	55,730
Tax receivables	1,108,340	565,832
Other receivables	329,039	272,862
Total trade and other receivables	$ 4,058,136	$ 2,686,112

Inventory (Details)

Inventory (Details) - CAD ($)	Dec. 31, 2019	Dec. 31, 2018
Inventory
Finished goods	$ 2,384,704	$ 2,305,746
Raw materials	2,403,652	1,383,572
Inventory provision	(23,898)	(57,695)
Total inventory	$ 4,764,458	$ 3,631,623

Inventory - Narrative (Details)

Inventory - Narrative (Details)	12 Months Ended
	Dec. 31, 2019CAD ($)	Dec. 31, 2018USD ($)
Inventory
Inventory recognized in cost of sales	$ 2,280,545	$ 1,648,728
Decrease in Inventory provision	33,797	$ 25,930
Inventory writedown charged to Cost of sales	$ 0

Property and equipment (Details

Property and equipment (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Property and equipment
Opening net book value	$ 1,207,357	$ 1,726,150
Foreign exchange	(49,954)	27,208
Depreciation	(472,685)	(546,001)
Closing net book value	684,718	1,207,357
Cost			$ 2,729,606	$ 2,729,606
Accumulated depreciation			(2,044,888)	(1,522,249)
Net book value	684,718	1,207,357	684,718	1,207,357
Furniture and fittings
Property and equipment
Opening net book value	96,565	134,883
Depreciation	(38,318)	(38,318)
Closing net book value	58,247	96,565
Cost			235,169	235,169
Accumulated depreciation			(176,922)	(138,604)
Net book value	58,247	96,565	58,247	96,565
Research and manufacturing equipment
Property and equipment
Opening net book value	571,242	947,588
Foreign exchange	(49,954)	27,208
Depreciation	(362,041)	(403,554)
Closing net book value	159,247	571,242
Cost			1,386,692	1,386,692
Accumulated depreciation			(1,227,445)	(815,450)
Net book value	159,247	571,242	159,247	571,242
Leasehold improvements
Property and equipment
Opening net book value	536,507	605,789
Depreciation	(69,283)	(69,282)
Closing net book value	467,224	536,507
Cost			718,742	718,742
Accumulated depreciation			(251,518)	(182,235)
Net book value	467,224	536,507	467,224	536,507
Computer equipment
Property and equipment
Opening net book value	3,043	37,890
Depreciation	(3,043)	(34,847)
Closing net book value		3,043
Cost			212,541	212,541
Accumulated depreciation			(212,541)	(209,498)
Net book value	$ 3,043	$ 3,043		3,043
Computer software
Property and equipment
Cost			176,462	176,462
Accumulated depreciation			$ (176,462)	$ (176,462)

Intangiable assets (Details)

Intangiable assets (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Opening net book value	$ 4,013,561	$ 5,141,998
Addition	250,000
Amortization	(1,134,741)	(1,128,437)
Closing net book value	3,128,820	4,013,561
Cost			$ 5,929,689	$ 5,679,689
Accumulated amortization			(2,800,869)	(1,666,128)
Net book value	3,128,820	4,013,561	3,128,820	4,013,561
Exclusive license agreement
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Opening net book value	25,000	27,500
Addition	250,000
Amortization	(8,802)	(2,500)
Closing net book value	266,198	25,000
Cost			300,000	50,000
Accumulated amortization			(33,802)	(25,000)
Net book value	266,198	25,000	266,198	25,000
Software
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Opening net book value	138,316	189,766
Amortization	(51,452)	(51,450)
Closing net book value	86,864	138,316
Cost			257,254	257,254
Accumulated amortization			(170,390)	(118,938)
Net book value	86,864	138,316	86,864	138,316
Proprietary technology
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Opening net book value	3,217,328	4,115,187
Amortization	(897,859)	(897,859)
Closing net book value	2,319,469	3,217,328
Cost			4,489,295	4,489,295
Accumulated amortization			(2,169,826)	(1,271,967)
Net book value	2,319,469	3,217,328	2,319,469	3,217,328
Brand
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Opening net book value	632,917	809,545
Amortization	(176,628)	(176,628)
Closing net book value	456,289	632,917
Cost			883,140	883,140
Accumulated amortization			(426,851)	(250,223)
Net book value	$ 456,289	$ 632,917	$ 456,289	$ 632,917

Intangiable assets - Additional

Intangiable assets - Additional information (Details) - CAD ($)	Aug. 16, 2019	Dec. 31, 2019
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Effective tax rate		26.50%
Sonalleve MR-HIFU
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Terminal growth assumption		4.00%
Effective tax rate		26.50%
Discount rate		18.00%
Recoverable amount of asset or cash-generating unit		$ 7,494,000
Amount by which unit's recoverable amount exceeds its carrying amount		6,304,000
Impairment loss		$ 0
Exclusive license agreement | Sunnybrook Health Sciences
Disclosure of reconciliation of changes in intangible assets and goodwill [line items]
Milestone payment	$ 250,000

Right-of-use assets (Details)

Right-of-use assets (Details)	12 Months Ended
	Dec. 31, 2019CAD ($)
Disclosure of quantitative information about right-of-use assets [line items]
Opening net book value	$ 2,616,773
Foreign exchange	(10,995)
Depreciation	406,397
Closing net book value	$ 2,199,381
Minimum
Disclosure of quantitative information about right-of-use assets [line items]
Lease agreement term	4 years
Maximum
Disclosure of quantitative information about right-of-use assets [line items]
Lease agreement term	10 years
Cost
Disclosure of quantitative information about right-of-use assets [line items]
Opening net book value	$ 2,616,773
Closing net book value	2,616,773
Accumulated depreciation
Disclosure of quantitative information about right-of-use assets [line items]
Opening net book value	0
Closing net book value	$ (417,392)

Provisions (Details)

Provisions (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disclosure of other provisions [line items]
Beginning balance	$ 1,401,336	$ 1,081,461
Change in accounting policy for IFRS 16 (note 2)		(49,319)
Restated balance as at January 1, 2019		1,352,017
Additions	144,754	273,321
Expiry	(1,335,492)	(74,582)
Foreign exchange	(7,318)	116,021
Accretion expense		5,115
Closing balance	153,961	1,401,336
Less: Current portion	134,956	1,352,017
Long-term portion	19,005	49,319
Asset retirement obligation
Disclosure of other provisions [line items]
Beginning balance	49,319	44,204
Change in accounting policy for IFRS 16 (note 2)		(49,319)
Accretion expense		5,115
Closing balance		49,319
Revenue share obligation
Disclosure of other provisions [line items]
Beginning balance	1,241,657	921,906
Restated balance as at January 1, 2019		1,241,657
Additions		208,242
Expiry	(1,241,657)
Foreign exchange		111,509
Closing balance		1,241,657
Warranty provision
Disclosure of other provisions [line items]
Beginning balance	110,360	115,351
Restated balance as at January 1, 2019		110,360
Additions	144,754	65,079
Expiry	(93,835)	(74,582)
Foreign exchange	(7,318)	4,512
Closing balance	153,961	$ 110,360
Less: Current portion	134,956
Long-term portion	$ 19,005
Minimum
Disclosure of other provisions [line items]
Term of the warranty	12 months
Maximum
Disclosure of other provisions [line items]
Term of the warranty	24 months

Long-term debt - CIBC Loan (Det

Long-term debt - CIBC Loan (Details) - CAD ($)	Feb. 04, 2020	Jul. 30, 2018	Oct. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Disclosure of detailed information about borrowings [line items]
CIBC loan				$ 11,864,385	$ 11,955,245	$ 11,864,385	$ 11,955,245
Less: Current portion						5,144,461	1,339,583
Long-term portion						6,719,924	10,615,662
Total initial gross proceeds					12,500,000
Changes during the period
Balance - Beginning of period				11,955,245	0
Proceeds received					12,500,000
Transaction costs					(930,520)
Interest and accretion expense				1,240,911	517,409
Repayment				(1,331,771)	(131,644)
Balance - End of period				$ 11,864,385	$ 11,955,245
Less: Current portion						5,144,461	1,339,583
Long-term portion						$ 6,719,924	$ 10,615,662
CIBC loan
Disclosure of detailed information about borrowings [line items]
Total initial gross proceeds		$ 12,500,000
Adjustment to interest rate basis (as a percent)		2.50%
Principal including accrued interest amount			$ 378,788
Financial covenant, trailing period				3 months
CIBC loan | Repayment of CIBC loan
Disclosure of detailed information about borrowings [line items]
Amount repaid	$ 12,041,032

Long-term debt - Purchase warra

Long-term debt - Purchase warrants issued to CIBC (Details) - CAD ($)	Sep. 20, 2019	Jan. 20, 2019	Mar. 20, 2018	Jul. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Disclosure of detailed information about borrowings [line items]
Number of warrants issued		522,727	1,725,000
Variables used to determine the fair value of warrants
Share price	$ 10.60		$ 10.60
Volatility	58.00%		71.00%
Expected life of warrants	2 years		5 years
Risk free interest rate	1.61%		2.00%
CIBC loan
Disclosure of detailed information about borrowings [line items]
Number of warrants issued				32,171
Number of common share that each warrant entitles the holder				1
Purchase warrant price per common share				$ 9.70
Term of the warrant				60 months
Fair value of warrants					$ 254,769	$ 98,203
Variables used to determine the fair value of warrants
Share price					$ 14.75	$ 5.50
Volatility					54.00%	86.00%
Expected life of warrants					3 years 7 months 6 days	4 years 7 months 6 days
Risk free interest rate					1.68%	1.88%
Dividend yield					0.00%	0.00%

Long-term debt - FedDey & HTX l

Long-term debt - FedDey & HTX loans (Details) - CAD ($)	May 20, 2019	Jul. 25, 2018	Apr. 30, 2015	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Disclosure of detailed information about borrowings [line items]
Total initial gross proceeds						$ 12,500,000
Interest accretion recovery					$ 3,450	63,322
FedDev Loan
Disclosure of detailed information about borrowings [line items]
Total initial gross proceeds						867,000
Amount repaid		$ 563,550
Interest and accretion expense						90,775
HTX loans
Disclosure of detailed information about borrowings [line items]
Total initial gross proceeds						$ 1,500,000
Interest rate (as a percent)						4.50%
Amount repaid				$ 1,094,698
Interest and accretion expense						$ 18,078
Knight Loan
Disclosure of detailed information about borrowings [line items]
Total initial gross proceeds			$ 4,000,000
Interest rate (as a percent)			15.00%
Amount repaid		$ 3,188,023
Term of the debt			4 years
Royalty payment (as a percent)			0.50%
Initial term of the distribution, licence and supply agreement	10 years
Renewal term of the distribution, licence and supply agreement	10 years
Common shares issued (as a percent)	4.00%
Number of common shares issued	171,745
Discount rate (as a percent)					18.00%
Interest accretion recovery					$ 3,450	$ 63,322

Other liabilities (Details)

Other liabilities (Details)	12 Months Ended
	Dec. 31, 2019USD ($)	Dec. 31, 2019CAD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2018CAD ($)	Dec. 31, 2019CAD ($)	Jan. 01, 2019USD ($)	Jan. 01, 2019CAD ($)
Disclosure of contingent liabilities [line items]
Beginning balance	$ 1,567,449		$ 2,115,891
Change in accounting policy for IFRS 16 (note 2)						$ (292,055)
Restated balance						$ 1,275,394
Additions			7,108
Amounts paid	(118,989)		(166,975)
Change in fair value (note 17)	(866,097)		(325,253)
Accretion recovery (note 17)	(3,450)		(63,322)
Ending balance	286,858		$ 1,567,449
Less: Current portion	$ 286,858			$ 567,296	$ 286,858
Long-term portion				1,000,153
Knight Royalty Payable
Disclosure of contingent liabilities [line items]
Beginning balance		$ 19,653		96,894
Restated balance							$ 19,653
Amounts paid		(16,203)		(13,919)
Accretion recovery (note 17)		(3,450)		(63,322)
Ending balance				19,653
Contingent consideration
Disclosure of contingent liabilities [line items]
Beginning balance		1,255,741		1,734,050
Restated balance							1,255,741
Amounts paid		(102,786)		(153,056)
Change in fair value (note 17)		(866,097)		(325,253)
Ending balance		286,858		1,255,741
Less: Current portion					$ 286,858
Deferred Rent
Disclosure of contingent liabilities [line items]
Beginning balance		$ 292,055		284,947
Change in accounting policy for IFRS 16 (note 2)							$ (292,055)
Additions				7,108
Ending balance				$ 292,055

Other liabilities - Additional

Other liabilities - Additional Information (Details)	May 20, 2019	Dec. 31, 2020	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019
Knight Royalty Payable
Disclosure of contingent liabilities [line items]
Royalty payment (as a percent)	0.50%
Contingent consideration
Disclosure of contingent liabilities [line items]
Contingent consideration payment (as a percent)			6.00%	5.00%	7.00%
Contingent consideration | Forecast
Disclosure of contingent liabilities [line items]
Contingent consideration payment, when total revenues are in excess of a defined amount (as a percent)		7.00%
Contingent consideration | Forecast | Discount rate
Disclosure of contingent liabilities [line items]
Significant unobservable input, liabilities		15

Lease liabilities (Details)

Lease liabilities (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Lease liabilities
As at January 1, 2019	$ 2,384,558	$ 2,384,558	$ 2,587,727	$ 2,587,727
Repayments	(318,245)
Foreign exchange	(17,391)
Interest and accretion expense	132,467
Balance End of period	$ 2,384,558
Less: Current portion		258,685
Long-term portion		$ 2,125,873

Share capital - Common shares (

Share capital - Common shares (Details)	Jan. 27, 2020USD ($)$ / sharesshares	Oct. 16, 2019shares	Sep. 20, 2019CAD ($)$ / sharesshares	Jan. 20, 2019shares	Mar. 20, 2018CAD ($)$ / sharesshares	Dec. 31, 2019CAD ($)shares	Oct. 15, 2019shares	Dec. 31, 2018CAD ($)shares
Share capital
Common shares issued (in shares)						11,852,749		10,805,494
Common shares outstanding (in shares)		11,852,749				11,852,749	118,527,485	10,805,494
Common shares issued and outstanding | $						$ 130,266,880		$ 120,932,404
Number of existing shares per new share		10
Number of warrants issued				522,727	1,725,000
Offering
Share capital
Number of units issued			1,045,455
Offering price per unit | $ / shares			$ 11
Gross proceeds | $			$ 11,500,001
Net proceeds | $			$ 10,476,277
Number of common shares in units issued			1
Number of warrants in units issued			0.5
Number of common share that each warrant entitles the holder			1
Warrant exercise price per common share | $ / shares			$ 15.50
Term of the warrant			24 months
Offering | Major ordinary share transactions
Share capital
Offering price per unit | $ / shares	$ 11.65
Gross proceeds | $	$ 39,522,625
Number of shares issued	3,392,500
Bought deal financing
Share capital
Gross proceeds | $					$ 34,500,000
Net proceeds | $					$ 32,027,502
Number of common shares in units issued					1
Number of warrants in units issued					0.5
Warrant exercise price per common share | $ / shares					$ 14
Term of the warrant					60 months
Number of shares issued					3,450,000
Offering price per share | $ / shares					$ 10

Share capital - Summary of warr

Share capital - Summary of warrants outstanding (Details) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of warrants
Opening balance	2,779,898	2,257,171	500,000
Granted	522,727	1,757,171
Ending balance	2,779,898	2,257,171	500,000
Weighted average exercise price
Opening balance	$ 13.90	$ 14
Granted	15.50	13.90
Ending balance	$ 14.20	$ 13.90	$ 14
Weighted average remaining contractual life (years)
Granted	1 year 8 months 23 days	4 years 2 months 23 days
Weighted Average Remaining Contractual Life	2 years 5 months 27 days	2 years 11 months 1 day	2 years 8 months 19 days

Share capital - Fair value of t

Share capital - Fair value of the warrants granted (Details) - CAD ($)	Sep. 20, 2019	Mar. 20, 2018	Dec. 31, 2020
Share capital
Share price on date of issuance	$ 10.60	$ 10.60
Expected volatility	58.00%	71.00%
Expected life of warrants	2 years	5 years
Risk free interest rate	1.61%	2.00%
Major ordinary share transactions
Share capital
Warrants exercised			309,671
Cash proceeds from exercise of warrants			$ 4,425,394
Offering
Share capital
Fair value of warrants	$ 1,151,881
Fair value of warrants (in CAD per share)	$ 2.20
Bought deal financing
Share capital
Fair value of warrants		$ 9,767,750
Fair value of warrants (in CAD per share)		$ 5.56

Share-based payments - Share op

Share-based payments - Share options (Details)	Jan. 26, 2017CAD ($)	Dec. 31, 2019CAD ($)shares	Dec. 31, 2018CAD ($)
Share-based payments
Number of share options granted in share-based payment arrangement		580,440	199,950
Share Option Plan
Share-based payments
Number of share options granted in share-based payment arrangement	1,540,857
Number of other equity instruments outstanding in share-based payment arrangement		1,109,943	624,478
Number of each option granted to purchase common shares | shares		1
Number of trading shares preceding the date the share option granted | shares		5
Maximum term of share options granted		10 years
Maximum period of share options vested		4 years

Share-based payments - Share _2

Share-based payments - Share option changes and outstanding (Details)	12 Months Ended
	Dec. 31, 2019$ / shares	Dec. 31, 2019	Dec. 31, 2019CAD ($)	Dec. 31, 2018CAD ($)$ / shares
Share-based payments
Number of share options outstanding in share-based payment arrangement at beginning of period | $			624,478	531,828
Granted | $			580,440	199,950
Exercised		(134,657)	(1,800)	(43,656)
Forfeited/expired | $			(93,175)	(63,644)
Number of share options outstanding in share-based payment arrangement at end of period		1,109,943	1,109,943	624,478
Weighted average exercise price of share options outstanding in share-based payment arrangement at beginning of period	$ 11.34			$ 10.90
Granted	9.63			10.50
Exercised	3			2.40
Forfeited/expired	10.78			11.20
Weighted average exercise price of share options outstanding in share-based payment arrangement at end of period	$ 10.51			$ 11.34

Share-based payments - estimate

Share-based payments - estimated the fair value of the share options granted (Details)	Nov. 18, 2019$ / shares	May 16, 2019$ / shares	May 15, 2019$ / shares	Nov. 19, 2018	Aug. 23, 2018	Jun. 15, 2018	May 22, 2018	Mar. 28, 2018	Dec. 31, 2019	Dec. 31, 2019CAD ($)	Dec. 31, 2018CAD ($)	Dec. 31, 2017CAD ($)
Share-based payments
Share price on date of issuance	$ 11.08	$ 9.40	$ 9.10
Expected volatility	82.00%	82.00%	82.00%	80.00%	70.00%	83.00%	82.00%	96.00%
Expected life of share options (in years)	6	6	6	6	6	6	6	6
Risk-free interest rate	1.40%	1.59%	1.59%	2.47%	2.25%	2.19%	2.30%	2.14%
Number of share options issued	82,200	484,940	13,300	3,300	90,000	11,550	91,800	3,300	1,109,943	1,109,943	624,478	531,828

Share-based payments - Share _3

Share-based payments - Share options outstanding (Details)

Jan. 01, 2020CAD ($)

Dec. 31, 2019CAD ($)$ / shares

Dec. 31, 2018CAD ($)

Dec. 31, 2019

Dec. 31, 2019CAD ($)

Nov. 18, 2019

May 16, 2019

May 15, 2019

Nov. 19, 2018

Aug. 23, 2018

Jun. 15, 2018

May 22, 2018

Mar. 28, 2018

Dec. 31, 2017CAD ($)

Disclosure of terms and conditions of share-based payment arrangement [line items]

Number of options outstanding

624,478

1,109,943

1,109,943

82,200

484,940

13,300

3,300

90,000

11,550

91,800

3,300

531,828

Weighted average remaining contractual life (years)

8 years 1 month 28 days

Number of options exercisable

2,505,302

376,765

3,156,663

Compensation expense | $

$ 1,676,844

$ 1,086,199

Options exercised

134,657

43,656

Proceeds from option exercised | $

$ 1,480,555

$ 5,399

$ 105,257

Exercise Price 2.40

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 2.40

Number of options outstanding

21,275

Weighted average remaining contractual life (years)

2 years 8 months 12 days

Number of options exercisable

21,275

Exercise Price 6.00

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 6

Number of options outstanding

3,300

Weighted average remaining contractual life (years)

8 years 10 months 28 days

Number of options exercisable

1,100

Exercise Price 8.50

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 8.50

Number of options outstanding

31,500

Weighted average remaining contractual life (years)

7 years 10 months 24 days

Number of options exercisable

16,402

Exercise Price 9.10

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 9.10

Number of options outstanding

13,300

Weighted average remaining contractual life (years)

9 years 4 months 21 days

Exercise Price 9.20

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 9.20

Number of options outstanding

484,240

Weighted average remaining contractual life (years)

9 years 4 months 24 days

Exercise Price 9.30

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 9.30

Number of options outstanding

50,000

Weighted average remaining contractual life (years)

8 years 8 months 1 day

Number of options exercisable

16,667

Exercise Price 9.70

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 9.70

Number of options outstanding

4,950

Weighted average remaining contractual life (years)

7 years 4 months 2 days

Number of options exercisable

3,850

Exercise Price 9.90

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 9.90

Number of options outstanding

2,800

Weighted average remaining contractual life (years)

8 years 3 months 4 days

Number of options exercisable

1,224

Exercise Price 10.20

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 10.20

Number of options outstanding

9,900

Weighted average remaining contractual life (years)

8 years 5 months 23 days

Number of options exercisable

5,500

Exercise Price 11.00

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 11

Number of options outstanding

197,172

Weighted average remaining contractual life (years)

6 years 11 months 19 days

Number of options exercisable

149,034

Exercise Price 11.23

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 11.23

Number of options outstanding

82,200

Weighted average remaining contractual life (years)

9 years 10 months 21 days

Exercise Price 11.90

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 11.90

Number of options outstanding

51,800

Weighted average remaining contractual life (years)

8 years 4 months 28 days

Number of options exercisable

20,504

Exercise Price 13.50

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 13.50

Number of options outstanding

8,300

Weighted average remaining contractual life (years)

6 years 7 months 17 days

Number of options exercisable

7,571

Exercise Price 14.60

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 14.60

Number of options outstanding

93,406

Weighted average remaining contractual life (years)

6 years 7 months 28 days

Number of options exercisable

77,838

Exercise Price 15.00

Disclosure of terms and conditions of share-based payment arrangement [line items]

Exercise price

$ 15

Number of options outstanding

55,800

Weighted average remaining contractual life (years)

5 years 8 months 5 days

Number of options exercisable

55,800

Nature of expenses (Details)

Nature of expenses (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Nature of expenses
Production and manufacturing costs	$ 1,670,816	$ 1,303,246
Salaries and benefits	9,621,647	9,692,860
Consulting fees	5,493,882	5,041,562
Research and development expenses	2,933,105	1,005,843
Sales and marketing expenses (recovery)	(193,369)	1,236,712
Amortization and depreciation	2,013,823	1,674,438
Share-based compensation	1,676,844	1,086,199
Rent	358,148	738,198
Bad debt expense	324,699
Insurance	507,993	117,758
Other expenses	888,080	895,143
Nature of expenses, total	$ 25,295,668	$ 22,791,959

Finance costs (Details)

Finance costs (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Finance costs
CIBC loan (note 11)	$ 1,240,911	$ 517,409
Change in fair value of contingent consideration (note 12)	(968,883)	(325,253)
Change in fair value of derivative financial instrument (note 11)	156,566	(96,619)
Lease liability interest expense (note 13)	132,467
Knight Loan (note 11)		465,903
Provisions (note 10)		5,115
Royalty interest recovery (notes 11 and 12)	(3,450)	(63,322)
HTX and FedDev loans (note 11)		108,853
Foreign exchange loss	153,977	214,226
Finance costs. Total	$ 711,588	$ 826,312

Income taxes (Details)

Income taxes (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income taxes
Loss before income taxes	$ 19,998,376	$ 20,532,205
Recovery based on combined federal and provincial statutory rate of 26.5% (2018 - 26.5%)	(5,299,570)	(5,441,034)
Permanent differences	(182,660)	(770,593)
Change in deferred tax assets not recognized	5,658,576	6,460,542
Effect of tax rates in foreign jurisdictions	17,528	(18,131)
Total tax expense (income)	$ 193,874	$ 230,784
Federal and provincial statutory rate (as a percent)	26.50%
Non-capital loss carry-forwards	$ 73,324,000
SR&ED expenditures	16,589,000
Federal and provincial tax credits	$ 3,311,000

Loss per share (Details)

Loss per share (Details)	12 Months Ended
	Dec. 31, 2019CAD ($)	Dec. 31, 2019CAD ($)$ / sharesshares	Dec. 31, 2018CAD ($)$ / sharesshares	Dec. 31, 2019CAD ($)
Loss per share
Net loss for the year | $	$ 20,192,250	$ 20,192,250	$ 20,762,989
Weighted average number of common shares		11,098,719	10,039,565
Basic and diluted loss per share | $ / shares		$ 1.82	$ 2.07
Share options		1,109,943	624,478
Warrants		2,779,898	2,257,171
Exercisable	376,765	376,765	2,505,302	3,156,663

Financial assets and liabilit_3

Financial assets and liabilities (Details) - CAD ($)	Dec. 31, 2019	Dec. 31, 2018
Fair value through profit or loss
Financial assets and liabilities
Financial assets	$ 541,627
Financial assets at amortized cost
Financial assets and liabilities
Financial liabilities	18,182,057	$ 15,887,248
Accounts payable and accrued liabilities | Financial assets at amortized cost
Financial assets and liabilities
Financial liabilities	3,933,114	3,912,350
Long-term debt | Financial assets at amortized cost
Financial assets and liabilities
Financial liabilities	11,864,385	11,955,245
Other liabilities | Fair value through profit or loss
Financial assets and liabilities
Financial assets	286,858
Financial liabilities		1,255,741
Other liabilities | Financial assets at amortized cost
Financial assets and liabilities
Financial liabilities		19,653
Lease liabilities | Financial assets at amortized cost
Financial assets and liabilities
Financial liabilities	2,384,558
Derivative financial instrument | Fair value through profit or loss
Financial assets and liabilities
Financial assets	254,769
Financial liabilities		98,203
Fair value through profit or loss | Financial assets at amortized cost
Financial assets and liabilities
Financial liabilities		1,353,944
Financial assets at amortized cost
Financial assets and liabilities
Financial assets	23,266,001	33,373,295
Cash | Financial assets at amortized cost
Financial assets and liabilities
Financial assets	19,222,195	30,687,183
Trade and other receivables | Financial assets at amortized cost
Financial assets and liabilities
Financial assets	$ 4,058,136
Financial liabilities		$ 2,686,112

Financial assets and liabilit_4

Financial assets and liabilities - Risk Management Strategy (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Interest rate risk [member]
Resonably possible increase in interest rates
Loss before income taxes	$ 125,000	$ 52,083

Financial assets and liabilit_5

Financial assets and liabilities - Risk Management Strategy and Loss before income taxes (Details) - Foreign currency risk - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Resonably possible increase in interest rates
Reasonably possible increase in interest rates	5.00%
Loss before income taxes	$ 63,890	$ 62,292
Accounts payable and accrued liabilities
Resonably possible increase in interest rates
Financial liabilities	(3,933,114)	(3,912,350)
Other liabilities
Resonably possible increase in interest rates
Financial liabilities	(286,858)	(1,275,394)
Lease liabilities
Resonably possible increase in interest rates
Financial liabilities	(2,384,558)
Cash
Resonably possible increase in interest rates
Financial assets	19,222,195	30,687,183
Trade and other receivables
Resonably possible increase in interest rates
Financial assets	4,058,136	2,686,112
US dollars | Accounts payable and accrued liabilities
Resonably possible increase in interest rates
Financial liabilities	(707,654)	(472,431)
US dollars | Cash
Resonably possible increase in interest rates
Financial assets	63,087	136,879
US dollars | Trade and other receivables
Resonably possible increase in interest rates
Financial assets	1,446,684	613,890
Euro | Accounts payable and accrued liabilities
Resonably possible increase in interest rates
Financial liabilities	(2,296,621)	(2,758,294)
Euro | Other liabilities
Resonably possible increase in interest rates
Financial liabilities	(286,858)	(1,255,741)
Euro | Lease liabilities
Resonably possible increase in interest rates
Financial liabilities	(223,511)
Euro | Cash
Resonably possible increase in interest rates
Financial assets	909,232	1,039,205
Euro | Trade and other receivables
Resonably possible increase in interest rates
Financial assets	2,227,605	1,450,661
Canadian dollars | Accounts payable and accrued liabilities
Resonably possible increase in interest rates
Financial liabilities	(928,839)	(681,625)
Canadian dollars | Other liabilities
Resonably possible increase in interest rates
Financial liabilities		(19,653)
Canadian dollars | Lease liabilities
Resonably possible increase in interest rates
Financial liabilities	(2,161,046)
Canadian dollars | Cash
Resonably possible increase in interest rates
Financial assets	18,249,876	29,511,099
Canadian dollars | Trade and other receivables
Resonably possible increase in interest rates
Financial assets	$ 383,847	$ 621,561

Financial assets and liabilit_6

Financial assets and liabilities - Liquidity risk (Details) - Liquidity risk - CAD ($)	Dec. 31, 2019	Dec. 31, 2018
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Carrying amount	$ 18,468,915	$ 17,142,989
Future cash flows	20,606,433	19,774,609
Less than 1 year
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	10,270,118	6,278,231
Between 1 year and 5 years
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	9,929,270	13,496,378
Greater than 5 years
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	407,045
Accounts payable and accrued liabilities
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Carrying amount	3,933,114	3,912,350
Future cash flows	3,933,114	3,912,350
Accounts payable and accrued liabilities | Less than 1 year
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	3,933,114	3,912,350
Long-term debt
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Carrying amount	11,864,385	11,955,245
Future cash flows	13,506,619	14,497,042
Long-term debt | Less than 1 year
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	5,653,979	1,936,455
Long-term debt | Between 1 year and 5 years
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	7,852,640	12,560,587
Lease liabilities
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Carrying amount	2,384,558
Future cash flows	2,865,755
Lease liabilities | Less than 1 year
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	382,080
Lease liabilities | Between 1 year and 5 years
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	2,076,630
Lease liabilities | Greater than 5 years
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	407,045
Other liabilities
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Carrying amount	286,858	1,275,394
Future cash flows	300,945	1,365,217
Other liabilities | Less than 1 year
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows	$ 300,945	429,426
Other liabilities | Between 1 year and 5 years
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Future cash flows		$ 935,791

Related party transactions (Det

Related party transactions (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Related party transactions
Salaries and employee benefits	$ 1,325,004	$ 1,746,024
Termination benefits		114,750
Directors' fees	136,875	113,132
Share-based compensation	1,204,533	959,234
Remuneration of directors and the senior management team	$ 2,666,412	$ 2,933,140

Capital management (Details)

Capital management (Details) - CAD ($)	Dec. 31, 2019	Dec. 31, 2018
Capital management
Common shares	$ 130,266,880	$ 120,932,404
Deficit	(131,065,492)	(111,033,661)
Long-term debt	11,864,385	11,955,245
Capital structure	$ 11,065,773	$ 21,853,988

Segment reporting (Details)

Segment reporting (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue
Products	$ 4,895,427	$ 2,421,331
Services	632,144	180,947
Total revenue	5,527,571	2,602,278
Cost of sales	2,361,805	1,778,501
Gross profit	3,165,766	823,777
Operating expenses
Research and development	12,466,149	10,265,388
General and administrative	7,678,672	6,656,723
Selling and distribution	2,789,042	4,091,347
Total operating expenses	22,933,863	21,013,458
Operating Loss	19,768,097	20,189,681
Net finance costs	230,279	342,524
Loss before taxes	19,998,376	20,532,205
Canada
Revenue
Products	3,002,906	1,400,341
Services	214,060	36,313
Total revenue	3,216,966	1,436,654
Cost of sales	1,199,864	844,015
Gross profit	2,017,102	592,639
Operating expenses
Research and development	9,706,011	7,844,125
General and administrative	7,300,051	6,256,746
Selling and distribution	721,158	2,004,143
Total operating expenses	17,727,220	16,105,014
Operating Loss	15,710,118	15,512,375
Germany
Revenue
Products	1,892,521	1,020,990
Services	418,084	144,634
Total revenue	2,310,605	1,165,624
Cost of sales	1,161,941	934,486
Gross profit	1,148,664	231,138
Operating expenses
Selling and distribution	1,837,824	1,676,389
Total operating expenses	1,837,824	1,676,389
Operating Loss	689,160	1,445,251
Finland
Operating expenses
Research and development	2,760,138	2,421,263
General and administrative	378,621	399,977
Selling and distribution	230,060	410,815
Total operating expenses	3,368,819	3,232,055
Operating Loss	$ 3,368,819	$ 3,232,055

Segment reporting - Other finan

Segment reporting - Other financial information (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Geographical areas
Total assets	$ 39,042,493	$ 46,549,872
Goodwill and intangible assets	6,537,985	7,422,726
Property and equipment (note 7)	684,718	1,207,357	$ 1,726,150
Right-of-use assets (notes 2 and 9)	2,199,381	0
Amortization of intangible assets	1,134,741	1,128,437
Depreciation of property and equipment	472,685	546,001
Depreciation of right-of-use assets (note 9)	406,397
Canada
Geographical areas
Total assets	34,894,056	42,437,691
Goodwill and intangible assets	6,537,985	7,422,726
Property and equipment (note 7)	565,638	797,296
Right-of-use assets (notes 2 and 9)	1,980,405
Amortization of intangible assets	1,134,741	1,128,437
Depreciation of property and equipment	231,657	296,093
Depreciation of right-of-use assets (note 9)	293,393
Germany
Geographical areas
Total assets	1,056,759	1,093,184
Property and equipment (note 7)		266
Depreciation of property and equipment	267	3,100
Finland
Geographical areas
Total assets	3,091,678	3,018,997
Property and equipment (note 7)	119,080	409,795
Right-of-use assets (notes 2 and 9)	218,976
Depreciation of property and equipment	240,761	$ 246,808
Depreciation of right-of-use assets (note 9)	$ 113,004