Convertible Note

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements [Abstract]

Convertible Notes [Text Block]

10.	Convertible Notes
	On May 8, 2018, the Company closed its previously announced offering by way of private placement (the “Offering”). In connection with the Offering, the Company issued 320 units (the “Units”) at a subscription price of $10,000 per Unit for gross proceeds of $3,200,000. A related party of the Company participated in the Offering and subscribed for an aggregate of two Units.
	Each Unit is comprised of (i) 7,940 common shares of the Corporation (“Common Shares”), (ii) a $5,000 convertible 6% note (a “Note”), and (iii) 7,690 warrants to purchase common shares of the Corporation (“Warrants”). Each Note bears interest at a rate of 6% (payable quarterly, in arrears, with the first payment being due on September 1, 2018), matures on June 1, 2021 and is convertible into Common Shares at a conversion price of $0.80 per Common Share. Each Warrant entitles its holder to purchase one Common Share at a price of $0.80 per Common Share until June 1, 2021.
	In connection with the Offering, the Company paid to the Agents a cash commission of approximately $157,800 in the aggregate and issued non-transferable agents’ warrants to the Agents, entitling the Agents to purchase 243,275 common shares at a price of $0.80 per share until June 1, 2021. Management has determined the value of the agents’ warrants to be $50,000.
	The proceeds of the Units are attributed to liability and equity components based on the fair value of each component as follows:

		Gross proceeds		Transaction costs		Net proceeds
Common stock	$	1,627	$	167	$	1,460
Convertible notes		1,086		111		975
Warrants		487		50		437
	$	3,200	$	328	$	2,872

The convertible notes have been recorded as a liability. Total transactions costs in the amount of $111 thousand were recorded against the liability. The accretion expense for the three-month period ended March 31, 2019 amounts to $42,000 (2018: $Nil).

The components of the convertible notes are as follows:

		March 31,		December 31,
		2019		2018
Attributed value of net proceeds to convertible notes	$	975	$	975
Accretion		139		98
Convertible note	$	1,114	$	1,073

The interest on the convertible notes for the three-month period ended March 31, 2019 amounts to $24 thousand and is recorded in financing and interest expense (2018: $Nil).