Convertible Debentures

3 Months Ended

Mar. 31, 2019

Convertible Debentures [Text Block]

9.	Convertible Debentures
	On July 12, 2017, the Company closed its previously announced prospectus offering (the “Offering”) of convertible unsecured subordinated debentures of the Corporation (the “Debentures”) for gross aggregate proceeds of CAD$6,838,000 ($5,117,000). Pursuant to the Offering, the Corporation issued an aggregate principal amount of CAD$6,838,000 ($5,117,000) of Debentures at a price of CAD$1,000 ($748) per Debenture. The Debentures will mature on June 30, 2020 and bear interest at annual rate of 8% payable semi-annually on the last day of June and December of each year, commencing on December 31, 2017. The interest may be paid in common shares at the option of the Corporation. The Debentures will be convertible at the option of the holders at any time prior to the close of business on the earlier of June 30, 2020 and the business day immediately preceding the date specified by the Corporation for redemption of Debentures. The conversion price will be CAD$1.35 ($1.01) (the “Conversion Price”) per common share of the Corporation (“Share”), being a conversion rate of approximately 740 Shares per CAD$1,000 ($748) principal amount of Debentures, subject to adjustment in certain events.
	On August 8, 2017, the Company closed a second tranche of its prospectus Offering of convertible unsecured subordinated debentures of the Corporation for which a first closing took place on July 12, pursuant to which it had raised additional gross proceeds of CAD$762,000 ($570,000).
	Together with the principal amount of CAD$6,838,000 ($5,117,000) of Debentures issued on July 12, 2017, the Corporation issued a total aggregate principal amount of CAD$7,600,000 ($5,687,000) of Debentures at a price of CAD$1,000 ($748) per Debenture.
	The convertible debentures have been recorded as a liability. Total transactions costs in the amount of CAD$1,237,000 ($926,000) were recorded against the liability. The accretion expense for the three-month period ended March 31, 2019 amounts to CAD$105,000 ($79,000), compared to CAD$91,000 ($73,000) for the comparative period in 2018.
	The components of the convertible debentures are as follows:

		March 31,			December 31,
		2019			2018
Face value of the convertible debentures	$	5,672		$	5,556
Transaction costs		(926	)		(907	)
Accretion		485			398
Convertible debentures	$	5,231		$	5,047

The interest accrued on the convertible debentures for the three-month period ended March 31, 2019 amounts to CAD$152 thousand ($114 thousand) and is recorded in financing and interest expense. The interest on the convertible debentures amounted to CAD$152 thousand ($120 thousand) for the three-month period ended March 31, 2018.