NOTE 2 INVESTMENTS

The Company’s investment portfolio consists of marketable equity securities and warrants of certain publicly-traded companies. As at December 31, 2017, the Company classified the marketable equity securities as available-for-sale securities, which are recorded at fair value based upon quoted market prices with changes in fair value recorded in Other Comprehensive Income (“OCI”). The gains and losses for available-for-sale securities are not reported in Net (Loss) in the Statement of Operations until the securities are sold or if there is an other-than-temporary decline in fair value below cost. In the comparable period ending March 31, 2017, the Company recorded a gain, net of tax, in other comprehensive income, of $3.9 million.

The Company adopted ASU 2016-01 as of January 1, 2018 and as a result has reclassified the accumulated OCI balance of $3.0 million related to marketable equity securities to beginning Accumulated Deficit (see Statement of Changes in Shareholders Equity). As a result of adoption of this guidance, the Company now recognizes changes in fair value of these securities in the Statement of Operations. During the three months ended March 31, 2018, the Company sold marketable equity securities for proceeds of $2.7 million. The Company realized a loss of $0.8 million on the sale, which is included in the Statement of Operations. During the comparable period ended March 31, 2017, the Company did not sell any marketable equity securities. During the three months ended, March 31, 2018, the Company had an unrealized loss on equity securities in the amount of $1.1 million, which is included in the Statement of Operations

The Company maintains a portfolio of warrants on equity interests in publicly-traded securities for investment purposes which are not used in any hedging activities. The warrants are recorded at fair value using the Black-Scholes option pricing model. As the warrants meet the definition of derivative instruments, unrealized gains or losses arising from their revaluation are recorded in the Statement of Operations. During the three months ended March 31, 2018, the Company recorded an unrealized loss of $0.9 million (March 31, 2017 – $1.8 million gain).

The following is a summary of the balances as of March 31, 2018 and December 31, 2017:


							Other		Statement of
	Opening		Additions		Disposals		Comprehensive		Operations		Fair Value
	balance		during		during		Income (Loss)		(Loss)		end of the
As of March 31, 2018	(January 1)		period		period		(pre-tax)		Income		period
Marketable equity securities	$	6,404	$	—	$	(3,397)	$	—	$	(1,137)	$	1,870
Warrants		1,567		—		—		—		(864)		703
Investments	$	7,971	$	—	$	(3,397)	$	—	$	(2,001)	$	2,573


							Other		Statement of
	Opening		Additions		Disposals		Comprehensive		Operations		Fair Value
	balance		during		during		Income (Loss)		(Loss)		end of the
As of December 31, 2017	(January 1)		year		year		(pre-tax)		Income		year
Marketable equity securities	$	6,749	$	—	$	(2,163)	$	1,334	$	484	$	6,404
Warrants		1,794		—		—		—		(227)		1,567
Investments	$	8,543	$	—	$	(2,163)	$	1,334	$	257	$	7,971

As of March 31, 2018, the cost of the marketable equity securities and warrants was approximately $1.4 million (December 31, 2017 - $3.3 million).