INTELGENX TECHNOLOGIES CORP., 10-K/A filed on 4/15/2020
Amended Annual Report
v3.20.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2019
Mar. 25, 2020
Jun. 30, 2019
Document and Entity Information [Abstract]      
Document Type 10-K/A    
Amendment Flag false    
Document Period End Date Dec. 31, 2019    
Entity Registrant Name IntelGenx Technologies Corp.    
Entity Central Index Key 0001098880    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Entity Common Stock, Shares Outstanding   110,259,653  
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well Known Seasoned Issuer No    
Entity Public Float     $ 42,290,549
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Entity Shell Company false    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Interactive Data Current Yes    
v3.20.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current    
Cash $ 1,332 $ 6,815
Short-term investments 580 4,180
Accounts receivable 381 815
Prepaid expenses 170 462
Investment tax credits receivable 375 416
Inventory 382 375
Total current assets 3,220 13,063
Leasehold improvements and equipment, net 6,365 6,248
Security deposits 752 707
Operating lease right-of-use-asset 683  
Total assets 11,020 20,018
Current    
Accounts payable and accrued liabilities 1,941 2,030
Current portion of long-term debt 727 692
Current portion of operating lease liability 137  
Convertible debentures 5,642  
Total current liabilities 8,447 2,722
Deferred lease obligations   49
Long-term debt 470 1,140
Convertible debentures   5,047
Convertible notes 1,255 1,073
Operating lease liability 555  
Total liabilities 10,727 10,031
Commitments
Subsequent event
Shareholders' equity    
Capital stock, common shares, $0.00001 par value; 200,000,000 shares authorized; 93,942,652 shares issued and outstanding (2018: 93,477,473 common shares) 1 1
Additional paid-in capital 42,635 42,048
Accumulated deficit (41,507) (30,896)
Accumulated other comprehensive loss (836) (1,166)
Total shareholders' equity 293 9,987
Total liabilities and shareholders' equity $ 11,020 $ 20,018
v3.20.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Common stock, par value per share (in dollars per share) $ 0.00001 $ 0.00001
Common Stock, Shares Authorized 200,000,000 200,000,000
Common Stock, Shares, Issued 93,942,652 93,477,473
Common Stock, Shares, Outstanding 93,942,652 93,477,473
v3.20.1
Consolidated Statement of Shareholders' Equity - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Loss [Member]
Total
Beginning Balance at Dec. 31, 2017 $ 1 $ 25,253 $ (20,788) $ (637) $ 3,829
Beginning Balance (in shares) at Dec. 31, 2017 67,031,467        
Other comprehensive loss (income)       (529) (529)
Common stock issued, net of transaction costs of $1,906   11,647     11,647
Common stock issued, net of transaction costs of $1,906 (Shares) 22,017,295        
Warrants issued, net of transaction costs of $322   1,873     1,873
Agents' warrants issued   330     330
Interest paid by issuance of common shares   231     231
Interest paid by issuance of common shares (in shares) 307,069        
Conversion of convertible debentures   16     16
Conversion of convertible debentures (in shares) 17,036        
Warrants exercised   2,295     2,295
Warrants exercised (in shares) 4,044,606        
Options exercised   33     33
Options exercised (in shares) 60,000        
Stock-based compensation   370     370
Net loss for the year     (10,108)   (10,108)
Ending Balance at Dec. 31, 2018 $ 1 42,048 (30,896) (1,166) 9,987
Ending Balance (in shares) at Dec. 31, 2018 93,477,473        
Modified retrospective adjustment upon adoption of ASC 842     49   49
Other comprehensive loss (income)       330 330
Interest paid by issuance of common shares   233     233
Interest paid by issuance of common shares (in shares) 415,179        
Options exercised   21     21
Options exercised (in shares) 50,000        
Stock-based compensation   333     333
Net loss for the year     (10,660)   (10,660)
Ending Balance at Dec. 31, 2019 $ 1 $ 42,635 $ (41,507) $ (836) $ 293
Ending Balance (in shares) at Dec. 31, 2019 93,942,652        
v3.20.1
Consolidated Statement of Shareholders' Equity (Parenthetical)
$ in Thousands
12 Months Ended
Dec. 31, 2018
USD ($)
Statement of Stockholders' Equity [Abstract]  
Common stock transaction cost $ 1,906
Warrants transaction cost $ 322
v3.20.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Revenues    
Revenues $ 742 $ 1,824
Total revenues 742 1,824
Expenses    
Research and development expense 3,774 5,104
Selling, general and administrative expense 5,800 4,999
Depreciation of tangible assets 718 719
Total expenses 10,292 10,822
Operating loss (9,550) (8,998)
Interest income 97 11
Financing and interest expense (1,207) (1,121)
Net financing and interest expense (1,110) (1,110)
Loss before income taxes (10,660) (10,108)
Income taxes 0 0
Net loss (10,660) (10,108)
Other comprehensive income (loss)    
Change in fair value 46 3
Foreign currency translation adjustment 284 (532)
Total other comprehensive income (loss) 330 (529)
Comprehensive loss $ (10,330) $ (10,637)
Basic and diluted:    
Weighted average number of shares outstanding (in shares) 93,525,413 74,121,922
Basic and diluted loss per common share (in dollars per share) $ (0.11) $ (0.14)
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Funds (used) provided - Operating activities    
Net loss $ (10,660) $ (10,108)
Depreciation of tangible assets 718 719
Stock-based compensation 333 370
Accretion expense 514 396
DSU expense 105 160
Interest paid by issuance of common shares 228 231
Lease non-cash expense 8  
Conversion of convertible debentures   (16)
Total Adjustment (8,754) (8,248)
Changes in non-cash items related to operations:    
Accounts receivable 426 (192)
Prepaid expenses 292 (259)
Investment tax credits receivable 41 (102)
Inventory   (375)
Security deposits   (11)
Accounts payable and accrued liabilities (204) 658
Deferred lease obligations   (1)
Net change in non-cash items related to operations 555 (282)
Net cash used in operating activities (8,199) (8,530)
Financing activities    
Repayment of long-term debt (711) (749)
Proceeds from exercise of warrants and stock options 21 2,328
Net proceeds from private placement   4,004
Transaction costs of private placement   (82)
Net proceeds from public offering   11,405
Transaction costs of public offering   (502)
Net cash (used in) provided by financing activities (690) 16,404
Investing activities    
Additions to leasehold improvements and equipment (525) (1,096)
Acquisitions of short-term investments (1,535) (4,273)
Redemptions of short-term investments 5,265 3,192
Net cash provided by (used in) investing activities 3,205 (2,177)
(Decrease) Increase in cash (5,684) 5,697
Effect of foreign exchange on cash 201 (473)
Cash    
Beginning of year 6,815 1,591
End of year $ 1,332 $ 6,815
v3.20.1
Basis of Presentation
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation [Text Block]

1. Basis of Presentation

IntelGenx Technologies Corp. ("IntelGenx" or the "Company") prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("USA"). This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. 

The consolidated financial statements include the accounts of the Company and its subsidiary companies.  On consolidation, all inter-entity transactions and balances have been eliminated.

The financial statements are expressed in U.S. funds.

v3.20.1
Going Concern
12 Months Ended
Dec. 31, 2019
Going Concern [Abstract]  
Going Concern [Text Block]

2.         Going Concern

The Company has financed its operations to date primarily through public offerings of its common stock, bank loans, royalty, up-front and milestone payments, license fees, proceeds from exercise of warrants and options, research and development revenues and the sale of U.S. royalty on future sales of Forfivo XL®.  The Company has devoted substantially all of its resources to its drug development efforts, conducting clinical trials to further advance the product pipeline, the expansion of its facilities, protecting its intellectual property and general and administrative functions relating to these operations.  The future success of the Company is dependent on its ability to develop its product pipeline and ultimately upon its ability to attain profitable operations. As of December 31, 2019, the Company had cash and short-term investments totaling approximately $1,912. The Company does not have sufficient existing cash and short-term investments to support operations for the next year following the issuance of these financial statements.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans to alleviate these conditions include pursuing one or more of the following steps to raise additional funding, none of which can be guaranteed or are entirely within the Company's control:

•    Raise funding through the possible sale of the Company's common stock, including public or private equity financings.

•    Raise funding through debt financing.

•    Continue to seek partners to advance product pipeline.

•    Initiate oral film manufacturing activities.

•    Initiate contract oral film manufacturing activities.

On February 11, 2020, the Company announced that it has closed its offering (the "Offering") of 16,317,000 units (the "Units") at a price of CAD$0.50 per Unit (the "Offering Price") for gross proceeds of CAD$8,158,500.

If the Company is unable to raise further capital when needed or on attractive terms, or if it is unable to procure partnership arrangements to advance its programs, the Company would be forced to delay, reduce or eliminate its research and development programs.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The accompanying consolidated financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due.

v3.20.1
Nature of Business
12 Months Ended
Dec. 31, 2019
Nature of Business [Abstract]  
Nature of Business [Text Block]

3. Nature of Business

IntelGenx was incorporated in the State of Delaware as Big Flash Corp. on July 27, 1999. On April 28, 2006 Big Flash Corp. completed, through the Canadian holding corporation, the acquisition of IntelGenx Corp., a company incorporated in Canada on June 15, 2003 and headquartered in Montreal, Quebec. IntelGenx Corp. has continued operations as our operating subsidiary.

IntelGenx Corp. is a drug delivery company focused on the development and manufacturing of novel oral thin film products for the pharmaceutical market. More recently, the Company has made the strategic decision to enter the Canadian cannabis market with a non-prescription cannabis infused oral film. In addition, IntelGenx is offering partners a comprehensive portfolio of pharmaceutical services, including pharmaceutical research and development, clinical  monitoring, regulatory support, technology transfer and manufacturing scale-up, and commercial manufacturing. The Company's main product development efforts are based upon three delivery platform technologies: (1) VersaFilm™, an oral film technology, (2) AdVersa®, a mucoadhesive tablet technology and (3) the VetaFilmTM technology platform for veterinary applications.

The Company's opportunity assessment and product development strategies primarily focus on addressing unmet market needs and utilize the U.S. Food and Drug Administration's ("FDA") 505(b)(2) approval process to obtain more timely and efficient approval of new formulations of previously approved products.  The Company's primary growth strategy is based on three pillars: (1) out licensing commercial rights of existing pipeline products, (2) partnering in contract development and manufacturing projects leveraging its various technology platforms, and (3) expanding its current pipeline.

The Company's product pipeline currently consists of 11 products in various stages of development from inception through commercialization, including products for the treatment of Alzheimer's disease, opioid dependence, erectile dysfunction, migraine, schizophrenia, idiopathic pulmonary fibrosis, and pain management. Of the products currently under development, 10 utilize the VersaFilm™ technology and one utilizes the AdVersa™ technology.

v3.20.1
Adoption of New Accounting Standards
12 Months Ended
Dec. 31, 2019
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Adoption of New Accounting Standards [Tex Block]

4.    Adoption of New Accounting Standards

The Company adopted Topic 842 Leases with a date of the initial application of January 1, 2019.  As a result, the Company has changed its accounting policy for leases as detailed below.

The Company adopted Topic 842 using a modified retrospective approach with a date of initial application of January 1, 2019, which requires the recognition of the right-of-use assets and related operating and finance lease liabilities on the balance sheet.  As a result, the consolidated balance sheet prior to January 1, 2019 was not restated, continues to be reported under ASC Topic 840, Leases, or ASC 840, which did not require the recognition of operating lease liabilities on the balance sheet, and is not comparative.  Under ASC 842, all leases are required to be recorded on the balance sheet and are classified as either operating or finance leases. The lease classification affects the expense recognition in the income statement.  Operating lease charges are recorded entirely in selling, general and administrative expense.  Finance lease charges are split, where amortization of the right-of-use asset is recorded in selling, general and administrative expense and an implied interest component is recorded in financing and interest expense.  At the moment of initial application, the Company did not hold any finance leases.  The expense recognition for operating leases under ASC 842 is substantially consistent with ASC 840.  As a result, there is no significant difference in our results of operations presented in our consolidated income statement and consolidated statement of comprehensive loss for each period presented.

The adoption of ASC 842 had a substantial impact on the Company's balance sheet. The most significant impact was the recognition of the operating lease right-of-use asset and operating lease liability. Upon adoption, leases that were classified as operating leases under ASC 840 were classified as operating leases under ASC 842, and the Company recorded an adjustment of $726 to operating lease right-of-use asset and the related operating lease liability. The operating lease liability is based on the present value of the remaining minimum lease payments, determined under ASC 840, discounted using our secured incremental borrowing rate at the effective date of January 1, 2019, using the original lease term and the tenor. As permitted under ASC 842, the Company elected to use the practical expedient that permits to use hindsight in determining the lease term. The application of the practical expedients did not have a significant impact on the measurement of the operating lease liability.

The impact of the adoption of ASC 842 on the balance sheet as at December 31, 2018 was:

  As reported
December 31, 2018
  Adoption of ASC 842
Increase (Decrease)
  Balance
 January 1, 2019
 
Operating lease right-of-use assets$ $726 $726 
Total assets 20,018  726  20,744 
Total current liabilities 2,722  127  2,849 
Deferred lease obligations 49  (49)  
Operating lease liability   599  599 
Total liabilities 10,031  677  10,708 
Total shareholders' equity 9,987  49  10,036 
Total liabilities and shareholders' equity 20,018  726  20,744 


The FASB issued ASU 2018-07 to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. These amendments are effective for a public business entity for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this statement did not have a material effect on the Company's financial position of results.

v3.20.1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies [Text Block]

5.    Summary of Significant Accounting Policies

Revenue Recognition

The Company may enter into licensing and collaboration agreements for product development, licensing, supply and manufacturing for its product pipeline. The terms of the agreements may include non-refundable signing and licensing fees, milestone payments and royalties on any product sales derived from collaborations. These contracts are analyzed to identify all performance obligations forming part of these contracts. The transaction price of the contract is then determined. The transaction price is allocated between all performance obligations on a residual standalone selling price basis. The stand-alone selling price is estimated based on the comparable market prices, expected cost plus margin and the Company's historical experience.

Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

The following is a description of principal activities - separated by nature - from which the Company generates its revenue.

Research and Development Revenue

Revenues with corporate collaborators are recognized as the performance obligations are satisfied over time, and the related expenditures are incurred pursuant to the terms of the agreement. 

Licensing and Collaboration Arrangements

Licenses are considered to be right-to-use licenses. As such, the Company recognizes the licenses revenues at a point in time, upon granting the licenses.

Milestone payments are considered variable consideration. As such, the Company estimates variable consideration at the most likely amount to which we expect to be entitled. The estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, research and other revenues in the period during which the adjustment is recognized. The process of successfully achieving the criteria for the milestone payments is highly uncertain. Consequently, there is significant risk that the Company may not earn all of the milestone payments for each of its contracts.

Royalties are typically calculated as a percentage of net sales realized by the Company's licensees of its products (including their sub-licensees), as specifically defined in each agreement. The licensees' sales generally consist of revenues from product sales of the Company's product pipeline and net sales are determined by deducting the following: estimates for chargebacks, rebates, sales incentives and allowances, returns and losses and other customary deductions in each region where the Company has licensees. Revenues arising from royalties are considered variable consideration. As such, the Company estimates variable consideration at the most likely amount to which we expect to be entitled. The estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The financial statements include estimates based on currently available information and management's judgment as to the outcome of future conditions and circumstances. Significant estimates in these financial statements include the useful lives and impairment of long-lived assets, stock-based compensation costs, and the investment tax credits receivable. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

Accounts Receivable

The Company accounts for trade receivables at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a quarterly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer's financial condition, credit history and current economic conditions. The Company writes off trade

receivables when they are deemed uncollectible and records recoveries of trade receivables previously written off

when they receive them. Management has determined that no allowance for doubtful accounts is necessary in order to adequately cover exposure to loss in its December 31, 2019 accounts receivable (2018: $). A bad debt expense in the amount of $ (2018: $) is recorded in the year ended December 31, 2019.

Investment Tax Credits

Investment tax credits relating to qualifying expenditures are recognized in the accounts at the time at which the related expenditures are incurred and there is reasonable assurance of their realization. Management has made estimates and assumptions in determining the expenditures eligible for investment tax credits claimed. Investment tax credits received in the year ended December 31, 2019 totaled $416 thousand (2018: $289).

Inventory

The Company values inventory at the lower of cost and net realizable value where net realizable value represents the expected sale price upon disposition less make-ready costs and the costs of disposal and transportation and determines the cost of raw material inventory using the average-cost method. The Company analyzes its inventory levels quarterly and adjusts inventory to its net realizable value, if required, for obsolete, or has a cost basis in excess of its expected net realizable value.

Leasehold Improvements and Equipment

Leasehold improvements and equipment are recorded at cost. Provisions for depreciation are based on their estimated useful lives using the methods as follows:

On the declining balance method - 
  
Laboratory and office equipment20%
Computer equipment30%
  
On the straight-line method - 
  
Leasehold improvementsover the lease term
Manufacturing equipment5 - 10 years

 

Upon retirement or disposal, the cost of the asset disposed of and the related accumulated depreciation are removed from the accounts and any gain or loss is reflected in income. Expenditures for repair and maintenance are expensed as incurred.

Leases

Leases are classified as either finance leases or operating leases.  A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset.  A lease is classified as an operating lease if it does not meet any one of these criteria.

Substantially all of the Company's operating leases are comprised of office space and property leases and the Company does not hold any finance leases.

For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized.  The right-of-use asset represents the right to use the leased asset for the lease term.  The lease liability represents the present value of the lease payments under the lease.

The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial costs incurred, consisting mainly of brokerage commissions, less any lease incentives received.  All right-of-use assets are reviewed for impairment.  The lease liability is initially measured the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's secured incremental borrowing rate for the same term as the underlying lease.

Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early.

Lease modifications result in remeasurement of the lease liability.

Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term.  Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-tern leases that have a term of 12 months or less.  The effect of short-term leases on our right-of-use asset and lease liability was not material.

Security Deposits

Security deposits represent a refundable deposit paid to the landlord in accordance with the lease agreement and deposits held as guarantees by the Company's lenders in accordance with the lending facilities. The deposits will be repaid to the Company at the end of the lease.

Impairment of Long-lived Assets

Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the estimated

undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value there of.

Foreign Currency Translation

The Company's reporting currency is the U.S. dollar. The Canadian dollar is the functional currency of the Company's Canadian operations, which is translated to the United States dollar using the current rate method. Under this method, accounts are translated as follows:

 Assets and liabilities - at exchange rates in effect at the balance sheet date;

 Revenue and expenses - at average exchange rates prevailing during the year;

 Equity - at historical rates.

Gains and losses arising from foreign currency translation are included in other comprehensive income.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740 "Income Taxes". Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Unrecognized Tax Benefits

The Company accounts for unrecognized tax benefits in accordance with FASB ASC 740 "Income Taxes". ASC 740 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon ultimate settlement with a taxing authority, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

Additionally, ASC 740 requires the Company to accrue interest and related penalties, if applicable, on all tax positions for which reserves have been established consistent with jurisdictional tax laws. The Company elected to classify interest and penalties related to the unrecognized tax benefits in the income tax provision.

Share-Based Payments

The Company accounts for share-based payments to employees in accordance with the provisions of FASB ASC 718 "Compensation-Stock Compensation" and accordingly recognizes in its financial statements share-based payments at their fair value.  In addition, the Company will recognize in the financial statements an expense based on the grant date fair value of stock options granted to employees. The expense will be recognized on a straight-line basis over the vesting period and the offsetting credit will be recorded in additional paid-in capital.  Upon exercise of options, the consideration paid together with the amount previously recorded as additional paid-in capital will be recognized as capital stock. The Company uses the Black-Scholes option pricing model to determine the fair value of the options.

The Company measures compensation expense for its non-employee stock-based compensation under ASC 718, "Compensation-Stock Compensation" and accordingly recognizes in its financial statements share-based payments at their fair value. In addition, the Company will recognize in the financial statements as expense over the service period, as if the Company had paid cash for the services.

Loss Per Share

Basic loss per share is calculated based on the weighted average number of shares outstanding during the year.  Any antidilutive instruments are excluded from the calculation of diluted loss per share.

Fair Value Measurements

ASC 820 applies to all assets and liabilities that are being measured and reported on a fair value basis. ASC 820 requires disclosure that establishes a framework for measuring fair value in US GAAP, and expands disclosure about fair value measurements. This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to ASC 820. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Short-term investments are classified Level 1.

Fair Value of Financial Instruments

The fair value represents management's best estimates based on a range of methodologies and assumptions.  The carrying value of receivables and payables arising in the ordinary course of business and the investment tax credits receivable approximate fair value because of the relatively short period of time between their origination and expected realization. 

Recent Accounting Pronouncements

ASU 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The FASB issued ASU 2019-12 which removes specific exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles (GAAP). It eliminates the need for an organization to analyze whether the following apply in a given period:

-Exception to the incremental approach for intraperiod tax allocation;

-Exceptions to accounting for basis differences when there are ownership changes in foreign investments; and

-Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses.

The ASU also improves financial statement preparers' application of income tax-related guidance and simplifies GAAP for:

-Franchise taxes that are partially based on income;

-Transactions with a government that result in a step up in the tax basis of goodwill;

-Separate financial statements of legal entities that are not subject to tax; and

-Enacted changes in tax laws in interim periods.

These amendments are effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments - Credit Losses

The FASB issued ASU 2019-11 which clarifies guidance around how to report expected recoveries. "Expected recoveries" describes a situation in which an organization recognizes a full or partial writeoff of the amortized cost basis of a financial asset, but then later determines that the amount written off, or a portion of that amount, will in fact be recovered. This ASU permits organizations to record expected recoveries on PCD assets.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2019-08 Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-Based Consideration Payable to a Customer

The FASB issued ASU 2019-08 which requires companies to measure and classify (on the balance sheet) share-based payments to customers by applying the guidance in Topic 718, Compensation-Stock Compensation. As a result, the amount recorded as a reduction in revenue would be measured based on the grant-date fair value of the share-based payment.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2019-05 Credit Losses (Topic 326): Targeted Transition Relief

The FASB issued ASU 2019-05 which provides entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments - Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326.  The fair value option election does not apply to held-to-maturity debt securities.  An entity that elects the fair value option should subsequently apply the guidance in Subtopics 820-10, Fair Value Measurement - Overall, and 825-10.

These amendments are effective for fiscal years beginning after December 15, 2019.  The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments-Credit Losses

The FASB issued ASU 2018-19 which mitigates transition complexity by requiring entities other than public business entities, including not-for-profit organizations and certain employee benefit plans, to implement the credit losses standard issued in 2016, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. This aligns the implementation date for their annual financial statements with the implementation date for their interim financial statements. The guidance also clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the leases standard.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2018-18 Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606

The FASB issued ASU 2018-18 which provides guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard.

The ASU also provides more comparability in the presentation of revenue for certain transactions between collaborative arrangement participants. It accomplishes this by allowing organizations to only present units of account in collaborative arrangements that are within the scope of the revenue recognition standard together with revenue accounted for under the revenue recognition standard.  The parts of the collaborative arrangement that are not in the scope of the revenue recognition standard should be presented separately from revenue accounted for under the revenue recognition standard.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement

The FASB issued ASU 2018-13 which modifies the disclosure requirements in Topic 820 as follows:

Removals

-The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;

-The policy for timing of transfers between levels;

-The valuation processes for Level 3 fair value measurements; and

-For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period.

Modifications

-In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities;

-For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee's assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and

-The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date

Additions

-The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and

- The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative

information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

v3.20.1
Short-term investments
12 Months Ended
Dec. 31, 2019
Cash and Cash Equivalents [Abstract]  
Short-term investments [Text Block]

6.  Short-term investments

 As at December 31, 2019, short-term investments consisted of investments in mutual funds of $580 thousand (CAD$754 thousand) (2018 - $4,180 (CAD$5,703 million)) and are with a Canadian financial institution having a high credit rating.

v3.20.1
Inventory
12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Inventory

7. Inventory

Inventory as at December 31, 2019 consisted of raw materials in the amount of $382 thousand (2018 - $375 thousand).

v3.20.1
Leasehold Improvements and Equipment
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Leasehold improvements and Equipment [Text Block]

8.  Leasehold improvements and Equipment

        2019  2018 
     Accumulated  Net Carrying  Net Carrying 
  Cost  Depreciation  Amount  Amount 
             
Manufacturing equipment$4,657 $879 $3,778 $3,512 
Laboratory and office equipment 1,368  870  498  562 
Computer equipment 125  85  40  39 
Leasehold improvements 3,325  1,276  2,049  2,135 
             
 $9,475 $3,110 $6,365 $6,248 

 

       From the balance of manufacturing equipment, an amount of $1,788 thousand (2018 - $1,703 thousand) represents assets which are still under construction as at December 31, 2019 and are consequently not depreciated.  The commitment of the Company for the remainder of the project is as disclosed in note 13.

v3.20.1
Bank indebtedness
12 Months Ended
Dec. 31, 2019
Bank Indebtedness [Abstract]  
Bank indebtedness [Text Block]

9.      Bank Indebtedness

The Company's credit facility is subject to review annually and consists of an operating demand line of credit of up to CAD$250 thousand ($192 thousand) and corporate credits cards of up to CAD$75 thousand ($58 thousand), and foreign exchange contracts limited to CAD$425 thousand ($327 thousand). Borrowings under the operating demand line of credit bear interest at the Bank's prime lending rate plus 2%. The credit facility and term loan (see note 10) are secured by a first ranking movable hypothec on all present and future movable property of the Company for an amount of CAD$4,250,000 ($3,272,000) plus 20%, and a 50% guarantee by Export Development Canada, a Canadian Crown corporation export credit agency. The terms of the banking agreement require the Company to comply with certain debt service coverage and debt to net worth financial covenants on an annual basis at the end of the Company's fiscal year. As at December 31, 2019, the Company was not in compliance with its financial covenants and has not drawn on its credit facility. The Company has obtained a waiver from the lender.

v3.20.1
Long-term debt
12 Months Ended
Dec. 31, 2019
Other Liabilities Disclosure [Abstract]  
Long-term debt [Text Block]

10.    Long-term debt

The components of the Company’s debt are as follows:

  December 31, 2019  December 31, 2018 
    $ 
       
       
Term loan facility 1,005  1,502 
Secured loan 192  330 
Total debt 1,197  1,832 
       
Less: current portion 727  692 
       
Total long-term debt 470  1,140 

 

The Company’s term loan facility consists of a total of CAD$4 million ($3.08 million) bearing interest at the Bank’s prime lending rate plus 2.50%, with monthly principal repayments of CAD$62 thousand ($48 thousand). The term loan is subject to the same security and financial covenants as the bank indebtedness (see note 9).

The secured loan has a principal balance authorized of CAD$1 million ($770 thousand) bearing interest at prime plus 7.3%, reimbursable in monthly principal payments of CAD$17 thousand ($13 thousand). The loan is secured by a second ranking on all present and future property of the Company. The terms of the banking agreement require the Company to comply with certain debt service coverage and debt to net worth financial covenants on an annual basis at the end of the Company’s fiscal year. As at December 31, 2019, the Company was not in compliance with its financial covenants. The Company has obtained a waiver from the lender.

Principal repayments due in each of the next two years are as follows:

2020727 (CAD 945)
2021470 (CAD 610)

 
v3.20.1
Convertible Debentures
12 Months Ended
Dec. 31, 2019
Convertible Debt [Abstract]  
Convertible Debentures [Text Block]

11.    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 ($5,265,000). Pursuant to the Offering, the Corporation issued an aggregate principal amount of CAD$6,838,000 ($5,265,000) of Debentures at a price of CAD$1,000 ($770) 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 ($1.04) (the "Conversion Price") per common share of the Corporation ("Share"), being a conversion rate of approximately 740 Shares per CAD$1,000 ($770) 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 ($587,000).

Together with the principal amount of CAD$6,838,000 ($5,265,000) of Debentures issued on July 12, 2017, the Corporation issued a total aggregate principal amount of CAD$7,600,000 of Debentures at a price of CAD$1,000 ($770) per Debenture.

The convertible debentures have been recorded as a liability. Total transactions costs in the amount of CAD$1,237,000 ($952,000) were recorded against the liability. The accretion expense for the year ended December 31, 2019 amounts to CAD$443,000 ($334,000) compared to CAD$383,000 ($296,000) for the year ended December 31, 2018.

During the year ended December 31, 2018, CAD$23,000 ($17,000) of convertible debentures were converted into 17,036 common shares at the option of the holders, resulting in an increase in additional paid-in capital of $16 thousand.

The components of the convertible debentures are as follows:

   December 31,   December 31,  
   2019  2018 
          
          
Face value of the convertible debentures $ 5,835  $ 5,556  
Transaction costs  (952)  (907)
Accretion  759   398  
Convertible debentures $ 5,642  $ 5,047  
 

Interest accrued during the year ended December 31, 2019 on the convertible debentures amounts to CAD$606 thousand ($457 thousand) out of which and CAD$303 thousand ($229 thousand) was paid in cash on June 27, 2019 and CAD$303 thousand ($228 thousand) was paid by issuance of 415,179 common shares on December 31, 2019.

Interest accrued during the year ended December 31, 2018 on the convertible debentures amounts to CAD$607 thousand ($468 thousand) out of which CAD$304 thousand ($231 thousand) was paid by issuance of 307,069 common shares on July 3, 2018 and CAD$303 thousand ($237 thousand) was paid in cash on December 28, 2018.

v3.20.1
Convertible Note
12 Months Ended
Dec. 31, 2019
Convertible Notes [Abstract]  
Convertible Notes [Text Block]

12.    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 year ended December 31, 2019 amounts to $182,000 (2018: $98,000). The warrants have been recorded as equity.

The components of the convertible notes are as follows:

   December 31,   

  December 31,

   2019  

2018

        
        
Attributed value of net proceeds to convertible notes $ 975   975
Accretion  280   98
Convertible notes $ 1,255   

1,073

 

The interest on the convertible notes for the year ended December 31, 2019 amounts to $96,000 (2018: $63,000) and is recorded in financing and interest expense.

The proceeds of the Units are attributed to liability and equity components based on the fair value of each component. Management has determined the value attributed to the common stock is $1,460 and $437 for the warrants issued, resulting in an increase in additional paid-in-capital of $1,897.

v3.20.1
Commitments
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments [Text Block]

13. Commitments

 

The Company has initiated a project to expand the existing manufacturing facility. The Company has signed agreements in the amount of Euro1,911 thousand with three suppliers with respect to equipment for solvent film manufacturing. As at December 31, 2019 an amount of Euro1,425 thousand has been paid with respect to these agreements (note 8).

v3.20.1
Capital Stock
12 Months Ended
Dec. 31, 2019
Stockholders' Equity Note [Abstract]  
Capital Stock [Text Block]

14.    Capital Stock

  2019  2018 
Authorized -      
       
200,000,000 common shares of $0.00001 par value      
  20,000,000 preferred shares of $0.00001 par value      
       
Issued -      
       
  93,942,652 (December 31, 2018: 93,477,473) common shares$ 1 $ 1 


Private placement

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, resulting in an increase in additional paid-in-capital of $50 thousand.

The proceeds of the Units are attributed to liability and equity components based on the fair value of each component, resulting in an increase in additional paid-in-capital of $1,897. Management has determined the value attributed to common stock is $1,460 and $437 for the warrants issued.

Private Placement Financing

On November 13, 2018, the Company announced the closing of Tilray Inc.’s strategic investment in IntelGenx by way of a private placement. Pursuant to the private placement, the Company issued 1,428,571 common shares at a subscription price of $0.70 per common share for gross proceeds of $1,000,000, resulting in an increase in additional paid-in capital of $1,000,000.

Public Offering

On October 22, 2018, IntelGenx announced the closing of 17,144,314 units at a price of US$0.70 for gross proceeds of approximately US$12 million in the United States and the Canadian provinces of Alberta, British Columbia, Manitoba, Ontario and Quebec.

On October 26, 2018 IntelGenx announced that Echelon Wealth Partners Inc., who acted as the Company’s exclusive placement agent in Canada in connection with the Offering, had exercised its option to place a further 903,610 Units pursuant to its over-allotment option, resulting in additional gross proceeds to the Company of US$632,527.

Each Unit will consist of one share of common stock of the Company and one half of one warrant, each whole Warrant to purchase one share of common stock of the Company at an exercise price of US$1.00 per share. The Warrants are exercisable immediately and will expire on the third anniversary of the date of their issuance. Management has determined the value attributed to common stock is $9,187 and $1,436 for the warrants issued, resulting in an increase in additional paid-in-capital of $10,623.

In connection with the Offering, the Company paid to the Agents a cash commission of approximately $560,000 in the aggregate and issued non-transferable agents’ warrants to the Agents, entitling the Agents to purchase 1,226,360 common shares at a price of $0.875 per share until June 1, 2021. Management has determined the value of the agents’ warrants to be $280,000, resulting in an increase in additional paid-in-capital of $280 thousand.

The proceeds of the Units are attributed to equity components based on the fair value of each component as follows:

   Gross proceeds   Transaction costs   Net proceeds  
          
Common stock $ 10,926  $ 1,739  $ 9,187  
Warrants  1,708   272   1,436  
  $ 12,634  $ 2,011  $ 10,623  

 

Stock options

During the year ended December 31, 2019 a total of 50,000 stock options were exercised for 50,000 common shares having a par value of $0 thousand in aggregate, for cash consideration of $21 thousand, resulting in an increase in additional paid-in capital of $21 thousand.

During the year ended December 31, 2018 a total of 60,000 stock options were exercised for 60,000 common shares having a par value of $0 thousand in aggregate, for cash consideration of $33 thousand, resulting in an increase in additional paid-in capital of $33 thousand.

Stock-based compensation of $333 thousand and $370 thousand was recorded during the year ended December 31, 2019 and 2018 respectively. An amount of $286 thousand (2018 - $356 thousand) expensed relates to stock options granted to employees and directors and an amount of $47 thousand (2018- $14 thousand) relates to stock options granted to consultants during the year ended December 31, 2018. As at December 31, 2019 the Company has $157 thousand (2018 - $453 thousand) of unrecognized stock-based compensation, of which $36 thousand (2018 – $83) relates to options granted to consultants.

Warrants

In the year ended December 31, 2018 a total of 4,044,606 warrants were exercised for 4,044,606 common shares having a par value of $ Nil in aggregate, for cash consideration of approximately $2,295 thousand, resulting in an increase in additional paid-in capital of approximately $2,295 thousand. No warrants were exercised in 2019.

v3.20.1
Additional Paid-In Capital
12 Months Ended
Dec. 31, 2019
Additional Paid in Capital [Abstract]  
Additional Paid-In Capital [Text Block]

15.    Additional Paid-In Capital
 

Stock Options

On May 9, 2016, the Board of Directors of the Company adopted the 2016 Stock Option Plan which amended and restated the 2006 Stock Option. As a result of the adoption of the 2016 Stock Option Plan, no additional options will be granted under the 2006 Stock Option Plan and all previously granted options will be governed by the 2016 Stock Option Plan. The 2016 Stock Option Plan permits the granting of options to officers, employees, directors and eligible consultants of the Company. A total of 9,347,747 shares of common stock were reserved for issuance under this plan, which includes stock options granted under the previous 2006 Stock Option Plan. Options may be granted under the 2016 Stock Option Plan on terms and at prices as determined by the Board except that the options cannot be granted at less than the market closing price of the common stock on the TSX- V. on the date prior to the grant. Each option will be exercisable after the period or periods specified in the option agreement, but no option may be exercised after the expiration of 10 years from the date of grant. The 2016 Stock Option Plan provides the Board with more flexibility when setting the vesting schedule for options which was otherwise fixed in the 2006 Stock Option Plan.

The fair value of options granted has been estimated according to the Black-Scholes valuation model and based on the weighted average of the following assumptions for options granted to employees and directors during the years ended:

   2019  2018 
Exercise price  0.69   0.74  
Expected volatility  64%   5.9%  
Expected life  5.63 years   5.63 years  

Risk‑free interest rate

 2.18%   2.73%  
Dividend yield   Nil    Nil  

The weighted average fair value of the options granted to employees during the year ended December 31, 2019 is $0.40 (2018 - $0.40) .

The weighted average fair value of the options granted to consultants during the year ended December 31, 2018 is $0.19. No options were granted to consultants during the year ended December 31, 2019.

Information with respect to employees and directors stock option activity for 2018 and 2019 is as follows:

       Weighted average  
   Number of options   exercise price  
         
          
Outstanding – January 1, 2018 2,939,818   0.65  
          
Granted  1,250,000   0.74  
Forfeited  (175,000)  (0.69)
Expired  (100,000)  (0.52)
Exercised  (60,000)  (0.56)
          
Outstanding – December 31, 2018 3,854,818   0.68  
          
Granted  100,000   0.69  
Forfeited  (37,500)  (0.66)
Expired  (402,500)  (0.67)
Exercised  (50,000)  (0.41)
          
Outstanding – December 31, 2019 3,464,818   0.68  

 

         Information with respect to consultant's stock option activity for 2018 and 2019 is as follows:

 

      Weighted average  
  Number of options   exercise price  
       
         
Outstanding – January 1, 2018 50,000   0.73  
       
Granted  500,000   0.72  
         
Outstanding – December 31, 2018 and 2019 550,000   0.72  


        Details of stock options outstanding as at December 31, 2019 are as follows:

   Outstanding options   Exercisable options  
                              
           Weighted           Weighted      
       Weighted average   average   Aggregate       average   Aggregate  
Exercise  Number of   remaining   exercise   intrinsic   Number of   exercise    intrinsic  
prices  options   contractual life   price   value   options   price   value  
$      (years)   $  $      $  $ 
                              
0.41  275,000   0.07   0.03       275,000   0.03      
0.58  675,000   0.09   0.10       675,000   0.12      
0.62  150,000   0.01   0.02       150,000   0.03      
0.66  200,000   0.41   0.03       150,000   0.03      
0.69  100,000   0.23   0.02       25,000   0.01      
0.70  475,000   0.35   0.08       237,500   0.05      
0.73  525,000   0.82   0.10       525,000   0.11      
0.76  905,000   1.87   0.17       705,000   0.16      
0.77  359,818   0.69   0.07       359,818   0.08      
0.78  100,000   0.04   0.02       50,000   0.01      
0.89  250,000   0.44   0.06       250,000   0.07      
   4,014,818   5.02   0.70   16,500   3,402,318   0.70   16,500  

 

Stock-based compensation expense recognized in 2019 with regards to the stock options was $333 thousand (2018: $345 thousand). As at December 31, 2019 the Company has $157 thousand (2018 - $453 thousand) of unrecognized stock-based compensation, of which $36 thousand (2018 – $83 thousand) relates to options granted to consultants. The amount of $157 thousand will be recognized as an expense over a period of two years. A change in control of the Company due to acquisition would cause the vesting of the stock options granted to employees and directors to accelerate and would result in $157 thousand being charged to stock-based compensation expense.

Warrants

In the year ended December 31, 2018 a total of 4,044,606 warrants were exercised for 4,044,606 common shares having a par value of $ Nil in aggregate, for cash consideration of approximately $2,295 thousand, resulting in an increase in additional paid-in capital of approximately $2,295 thousand. No warrants were exercised in 2019.

Information with respect to warrant activity for 2018 and 2019 is as follows:

   Number of   Weighted average  
   warrants   exercise price  
   (All Exercisable)   $ 
Outstanding - January 1, 2018 4,070,902   0.5646  
       
Granted  12,954,397   0.9464  
       
Exercised  (4,044,606)  (0.5675)
       
Expired  (76,296)  (0.5646)
       
Outstanding - December 31, 2018 and 2019 12,904,397   0.9470  

 

        Deferred Share Units ("DSUs")

 

Effective February 7, 2018, the Board approved a Deferred Share Unit Plan (DSU Plan) to compensate non-employee directors as part of their annual remuneration. Under the DSU Plan, the Board may grant Deferred Share Units ("DSUs") to the participating directors at its discretion and, in addition, each participating director may elect to receive all or a portion of his or her annual cash stipend in the form of DSUs. To the extent DSUs are granted, the amount of compensation that is deferred is converted into a number of DSUs, as determined by the market price of our Common Stock on the effective date of the election. These DSUs are converted back into a cash amount at the expiration of the deferral period based on the market price of our Common Stock on the expiration date and paid to the director in cash in accordance with the payout terms of the DSU Plan. As the DSUs are on a cash-only basis, no shares of Common Stock will be reserved or issued in connection with the DSUs. On March 27, 2019, 271,740 DSUs (287,355 on May 16, 2018) have been granted under the DSU Plan, accordingly, an amount of $128 thousand ($160 thousand in 2018) has been recognized in general and administrative expenses.

Performance and Restricted Share Units ("PRSUs")

At the Annual Meeting on May 8, 2018, the shareholders approved the IntelGenx Technologies Corp. Performance and Restricted Share Unit Plan (PRSU Plan) which the Board of Directors had approved on March 19, 2018. The primary purpose of this PRSU Plan is to provide the Company with a share-related mechanism to attract, retain and motivate qualified executive officers of the Company and its Subsidiaries and to reward such executive officers for their contributions toward the long-term goals and success of the Company and to enable and encourage such executive officers to acquire shares of Common Stock as long-term investments and proprietary interests in the Company. As at December 31, 2018, 53,846 rewards have been issued under the PRSU Plan, accordingly an amount of $25 thousand has been recognized as stock-based compensation in general and administrative expenses in 2018. No rewards were granted under the PRSU Plan in 2019.

v3.20.1
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes [Text Block]

16. Income Taxes

Income taxes reported differ from the amount computed by applying the statutory rates to net income (losses).  The reasons are as follows:

  2019  2018 
Statutory income taxes$(2,398)$(2,421)
Net operating losses for which no tax benefits have been recorded 1,189  1,185 
Deficiency of depreciation over capital cost allowance (178) (236)
Non-deductible expenses 667  422 
Undeducted research and development expenses 820  1,167 
Investment tax credit (100) (117)
       
 $ $ 


The major components of the deferred tax assets classified by the source of temporary differences are as follows:

  2019  2018 
Leasehold improvements and equipment$440 $418 
Net operating losses carryforward 6,396  4,170 
Undeducted research and development expenses 2,903  2,774 
Non-refundable tax credits carryforward 2,082  1,982 
       
  11,821  9,344 
Valuation allowance (11,821) (9,344)
 $ $ 

As at December 31, 2019, management determined that enough uncertainty existed relative to the realization of deferred income tax asset balances to warrant the application of a full valuation allowance. Management continues to believe that enough uncertainty exists relative to the realization of the remaining deferred income tax asset balances such that no recognition of deferred income tax assets is warranted.

There were Canadian and provincial net operating losses of approximately $23,101 thousand (2018: $14,934 thousand) and $25,264 thousand (2018: $16,498 thousand) respectively, that may be applied against earnings of future years.  Utilization of the net operating losses is subject to significant limitations imposed by the change in control provisions.  Canadian and provincial losses will be expiring between 2026 and 2039. A portion of the net operating losses may expire before they can be utilized.

As at December 31, 2019, the Company had non-refundable tax credits of $2,486 thousand (2018: $1,981 thousand) of which $8 thousand is expiring in 2026, $10 thousand is expiring in 2027, $174 thousand is expiring in 2028, $152 thousand is expiring in 2029, $130 thousand is expiring in 2030, $138 thousand is expiring in 2031, $173 thousand is expiring in 2032, $115 thousand is expiring in 2033, $87 thousand expiring in 2034, $102 thousand is expiring in 2035, $141 thousand expiring in 2036,  $270 thousand is expiring in 2037, $582 thousand expiring in 2038 and $404 thousand expiring in 2039 and undeducted research and development expenses of $14,282 thousand (2018: $10,663 thousand) with no expiration date.

The deferred tax benefit of these items was not recognized in the accounts as it has been fully provided for.

Unrecognized Tax Benefits

The Company does not have any unrecognized tax benefits.

Tax Years and Examination

The Company files tax returns in each jurisdiction in which it is registered to do business.  For each jurisdiction a statute of limitations period exists. After a statute of limitations period expires, the respective tax authorities may no longer assess additional income tax for the expired period. Similarly, the Company is no longer eligible to file claims for refund for any tax that it may have overpaid. The following table summarizes the Company's major tax jurisdictions and the tax years that remain subject to examination by these jurisdictions as of December 31, 2019:

Tax Jurisdictions

 

Tax Years

Federal - Canada

 

2015 and onward

Provincial - Quebec

 

2015 and onward

Federal - USA           2015 onward
v3.20.1
Revenues
12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenues

17. Revenues

The following table presents our revenues disaggregated by revenue source.  Sales and usage-based taxes are excluded from revenues:

  December 31, 2019   December 31, 2018 
       
Research and development agreements$742 $1,824 

The following table presents our revenues disaggregated by timing of recognition:

  December 31, 2019    December 31, 2018 
       
Product and services transferred at point in time$372 $ 
Products and services transferred over time 370  1,824 
 $742 $1,824 


The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers:

  December 31, 2019     December 31, 2018 
       
Europe$534  1,715 
Canada 208  109 
 $742 $1,824 

     
Remaining performance obligations

As at December 31, 2019, the aggregate amount of the transaction price allocated to the remaining performance obligation is $1,084 representing research and development agreements, the majority of which is expected to be recognized in the next twelve months. The Company is also eligible to receive up to $4,169 in research and development milestone payments, approximately 60% of which is expected to be recognized in the next three years, with the remaining 40% expected in the two years following; up to $28,376 in commercial sales milestone payments which are wholly dependent on the marketing efforts of our development partners. In addition, the Company is entitled to receive royalties on potential sales.

The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about the remaining performance obligations that have original expected durations of one year or less.

v3.20.1
Statement of Cash Flows Information
12 Months Ended
Dec. 31, 2019
Supplemental Cash Flow Information [Abstract]  
Statement of Cash Flows Information [Text Block]

18.    Statement of Cash Flows Information

In US$ thousands 2019  2018 
       
Additional Cash Flow Information:      
       
Interest paid$ 465 $ 476 
v3.20.1
Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases [Text Block]

19. Leases
 

Substantially all our operating lease right-of-use assets and operating lease liability represents leases for office space and property to conduct our business.
 

The operating lease expense for the year ended December 31, 2019 included in general and administrative expenses is $152 thousand. The cash outflows from operating leases for the year ended December 31, 2019 was $144 thousand.
 

The weighted average remaining lease term and the weighted average discount rate for operating leases at December 31, 2019 were 6.2 years and 10%, respectively.
 

The following table reconciles the undiscounted cash flows for the operating leases as et December 31, 2019 to the operating lease liabilities recorded on the balance sheet:

 

    
  Operating Leases 
    
2020$150 
2021 152 
2022 156 
2023 158 
2024 161 
Thereafter 188 
Total undiscounted lease payments 965 
Less: Interest 273 
Present value of lease liabilities$692 

 

Current portion of operating lease liability$137 
Operating lease liability$555 
v3.20.1
Related Party Transactions
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Related Party Transactions [Text Block]

20.    Related party transactions

 

Included in management salaries are $67 thousand (2018 - $75 thousand) for options and PRSUs granted to the Chief Executive Officer, $50 thousand (2018 - $46 thousand) for options and PRSUs granted to the President and Chief Financial Officer, $29 thousand (2018 - $24) for options granted to the Vice-President, Research and Development, $29 thousand (2018 - $54) for options granted to the Vice-President, Business and Corporate Development, and $36 thousand (2018 - $12) for options granted to the Vice-President, Operations under the 2016 Stock Option Plans and$Nil (2018 - $11 thousand) for options granted to non-employee directors.

 

Included in general and administrative expenses are director fees of $231 thousand (2018: $250 thousand).

 

The above related party transactions have been measured at the exchange amount which is the amount of the consideration established and agreed upon by the related parties.

v3.20.1
Basic and Diluted Loss Per Common Share
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Basic and Diluted Loss Per Common Share [Text Block]

21.    Basic and Diluted Loss Per Common Share

Basic and diluted loss per common share is calculated based on the weighted average number of shares outstanding during the year. Common equivalent shares from stock options, warrants and convertible debentures are also included in the diluted per share calculations unless the effect of the inclusion would be antidilutive.

v3.20.1
Subsequent Event
12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Event [Text Block]

22.    Subsequent events

 

On February 11, 2020, the Company announced that it has closed its offering (the "Offering") of 16,317,000 units (the "Units") at a price of CAD$0.50 per Unit (the "Offering Price") for gross proceeds of CAD$8,158,500.

 

Each Unit consists of one share of common stock (the "Offered Shares") and one warrant (a "Warrant") entitling the holder to purchase one share of common stock of the Company at an exercise price of CAD$0.75 per share (a "Warrant Share"). The Warrants are exercisable immediately and will expire on the third anniversary of the date of their issuance.

 

The Units were distributed under a short form prospectus dated January 27, 2020 filed by the Company in connection with the Offering and have been registered with the United States Securities and Exchange Commission pursuant to a Form S-1 Registration Statement that was declared effective on January 31, 2020 (the "Registration Statement"). The Offering was conducted, on a best efforts basis, by Echelon Wealth Partners Inc. (the "Agent"). In consideration for the services rendered by the Agent, the Company has paid the Agent an agency fee equal to 7% of the gross proceeds of the Offering and has issued the Agent a number of warrants (the "Agent Warrants") equal to 7% of the number of Units issued under the Offering, each Agent Warrant entitling the holder to purchase one share of common stock of the Company at an exercise price of CAD$0.75 per share until the third anniversary of the date of their issuance. After the payment of the Agent's commissions and the reimbursement of certain of the Agent's Offering expenses and the payment of other Offering expenses, the Company expects the net proceeds from the Offering to be approximately CAD$7.4 million.

 

The TSX Venture Exchange (the "TSXV") has approved the listing of the Warrants and the common stock that will be issued by the Company in the Offering, including the shares of common stock issuable upon the exercise of the Warrants and the Agent Warrants.

 

The Warrants are listed on the TSXV under the symbol "IGX.WT" and commenced trading effective at the opening of the market on Thursday, February 13, 2020.

 

On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a global pandemic, which continues to spread throughout Canada and around the world. On March 23, 2020, the government of Quebec ordered the closure of all non-essential businesses effective March 25, 2020, through April 13, 2020. Because of the nature of its operations, the Company is only partially affected by this order. As of March 26, 2020, the Company is aware of the impact on its business as a result of COVID-19 but uncertain as to the extent of this impact on its consolidated financial statements. This partial disruption, even temporary, may impact our operations and overall business by delaying the progress of our research and development programs and production activities. There is uncertainty as to the duration and hence the potential impact. As a result, we are unable to estimate the potential impact on our business as of the date of this filing.

v3.20.1
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Revenue [Policy Text Block]

Revenue Recognition

The Company may enter into licensing and collaboration agreements for product development, licensing, supply and manufacturing for its product pipeline. The terms of the agreements may include non-refundable signing and licensing fees, milestone payments and royalties on any product sales derived from collaborations. These contracts are analyzed to identify all performance obligations forming part of these contracts. The transaction price of the contract is then determined. The transaction price is allocated between all performance obligations on a residual standalone selling price basis. The stand-alone selling price is estimated based on the comparable market prices, expected cost plus margin and the Company's historical experience.

Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

The following is a description of principal activities - separated by nature - from which the Company generates its revenue.

Research and Development Revenue

Revenues with corporate collaborators are recognized as the performance obligations are satisfied over time, and the related expenditures are incurred pursuant to the terms of the agreement. 

Licensing and Collaboration Arrangements

Licenses are considered to be right-to-use licenses. As such, the Company recognizes the licenses revenues at a point in time, upon granting the licenses.

Milestone payments are considered variable consideration. As such, the Company estimates variable consideration at the most likely amount to which we expect to be entitled. The estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, research and other revenues in the period during which the adjustment is recognized. The process of successfully achieving the criteria for the milestone payments is highly uncertain. Consequently, there is significant risk that the Company may not earn all of the milestone payments for each of its contracts.

Royalties are typically calculated as a percentage of net sales realized by the Company's licensees of its products (including their sub-licensees), as specifically defined in each agreement. The licensees' sales generally consist of revenues from product sales of the Company's product pipeline and net sales are determined by deducting the following: estimates for chargebacks, rebates, sales incentives and allowances, returns and losses and other customary deductions in each region where the Company has licensees. Revenues arising from royalties are considered variable consideration. As such, the Company estimates variable consideration at the most likely amount to which we expect to be entitled. The estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Use of Estimates [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The financial statements include estimates based on currently available information and management's judgment as to the outcome of future conditions and circumstances. Significant estimates in these financial statements include the useful lives and impairment of long-lived assets, stock-based compensation costs, and the investment tax credits receivable. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions.

Accounts Receivable [Policy Text Block]

Accounts Receivable

The Company accounts for trade receivables at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a quarterly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer's financial condition, credit history and current economic conditions. The Company writes off trade

receivables when they are deemed uncollectible and records recoveries of trade receivables previously written off

when they receive them. Management has determined that no allowance for doubtful accounts is necessary in order to adequately cover exposure to loss in its December 31, 2019 accounts receivable (2018: $). A bad debt expense in the amount of $ (2018: $) is recorded in the year ended December 31, 2019.

Investment Tax Credits [Policy Text Block]

Investment Tax Credits

Investment tax credits relating to qualifying expenditures are recognized in the accounts at the time at which the related expenditures are incurred and there is reasonable assurance of their realization. Management has made estimates and assumptions in determining the expenditures eligible for investment tax credits claimed. Investment tax credits received in the year ended December 31, 2019 totaled $416 thousand (2018: $289).

Inventory, Policy [Policy Text Block]

Inventory

The Company values inventory at the lower of cost and net realizable value where net realizable value represents the expected sale price upon disposition less make-ready costs and the costs of disposal and transportation and determines the cost of raw material inventory using the average-cost method. The Company analyzes its inventory levels quarterly and adjusts inventory to its net realizable value, if required, for obsolete, or has a cost basis in excess of its expected net realizable value.

Leasehold Improvements and Equipment [Policy Text Block]

Leasehold Improvements and Equipment

Leasehold improvements and equipment are recorded at cost. Provisions for depreciation are based on their estimated useful lives using the methods as follows:

On the declining balance method - 
  
Laboratory and office equipment20%
Computer equipment30%
  
On the straight-line method - 
  
Leasehold improvementsover the lease term
Manufacturing equipment5 - 10 years

 

Upon retirement or disposal, the cost of the asset disposed of and the related accumulated depreciation are removed from the accounts and any gain or loss is reflected in income. Expenditures for repair and maintenance are expensed as incurred.

Leases [Policy Text Block]

Leases

Leases are classified as either finance leases or operating leases.  A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset.  A lease is classified as an operating lease if it does not meet any one of these criteria.

Substantially all of the Company's operating leases are comprised of office space and property leases and the Company does not hold any finance leases.

For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized.  The right-of-use asset represents the right to use the leased asset for the lease term.  The lease liability represents the present value of the lease payments under the lease.

The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial costs incurred, consisting mainly of brokerage commissions, less any lease incentives received.  All right-of-use assets are reviewed for impairment.  The lease liability is initially measured the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's secured incremental borrowing rate for the same term as the underlying lease.

Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early.

Lease modifications result in remeasurement of the lease liability.

Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term.  Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-tern leases that have a term of 12 months or less.  The effect of short-term leases on our right-of-use asset and lease liability was not material.

Security Deposits [Policy Text Block]

Security Deposits

Security deposits represent a refundable deposit paid to the landlord in accordance with the lease agreement and deposits held as guarantees by the Company's lenders in accordance with the lending facilities. The deposits will be repaid to the Company at the end of the lease.

Impairment of Long-lived Assets [Policy Text Block]

Impairment of Long-lived Assets

Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the estimated

undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value there of.

Foreign Currency Translation [Policy Text Block]

Foreign Currency Translation

The Company's reporting currency is the U.S. dollar. The Canadian dollar is the functional currency of the Company's Canadian operations, which is translated to the United States dollar using the current rate method. Under this method, accounts are translated as follows:

 Assets and liabilities - at exchange rates in effect at the balance sheet date;

 Revenue and expenses - at average exchange rates prevailing during the year;

 Equity - at historical rates.

Gains and losses arising from foreign currency translation are included in other comprehensive income.

Income Taxes [Policy Text Block]

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740 "Income Taxes". Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Unrecognized Tax Benefits [Policy Text Block]

Unrecognized Tax Benefits

The Company accounts for unrecognized tax benefits in accordance with FASB ASC 740 "Income Taxes". ASC 740 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon ultimate settlement with a taxing authority, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

Additionally, ASC 740 requires the Company to accrue interest and related penalties, if applicable, on all tax positions for which reserves have been established consistent with jurisdictional tax laws. The Company elected to classify interest and penalties related to the unrecognized tax benefits in the income tax provision.

Share-based Payment Arrangement [Policy Text Block]

Share-Based Payments

The Company accounts for share-based payments to employees in accordance with the provisions of FASB ASC 718 "Compensation-Stock Compensation" and accordingly recognizes in its financial statements share-based payments at their fair value.  In addition, the Company will recognize in the financial statements an expense based on the grant date fair value of stock options granted to employees. The expense will be recognized on a straight-line basis over the vesting period and the offsetting credit will be recorded in additional paid-in capital.  Upon exercise of options, the consideration paid together with the amount previously recorded as additional paid-in capital will be recognized as capital stock. The Company uses the Black-Scholes option pricing model to determine the fair value of the options.

The Company measures compensation expense for its non-employee stock-based compensation under ASC 718, "Compensation-Stock Compensation" and accordingly recognizes in its financial statements share-based payments at their fair value. In addition, the Company will recognize in the financial statements as expense over the service period, as if the Company had paid cash for the services.

Loss Per Share [Policy Text Block]

Loss Per Share

Basic loss per share is calculated based on the weighted average number of shares outstanding during the year.  Any antidilutive instruments are excluded from the calculation of diluted loss per share.

Fair Value Measurements [Policy Text Block]

Fair Value Measurements

ASC 820 applies to all assets and liabilities that are being measured and reported on a fair value basis. ASC 820 requires disclosure that establishes a framework for measuring fair value in US GAAP, and expands disclosure about fair value measurements. This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to ASC 820. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Short-term investments are classified Level 1.

Fair Value of Financial Instruments [Policy Text Block]

Fair Value of Financial Instruments

The fair value represents management's best estimates based on a range of methodologies and assumptions.  The carrying value of receivables and payables arising in the ordinary course of business and the investment tax credits receivable approximate fair value because of the relatively short period of time between their origination and expected realization. 

Recent Accounting Pronouncements [Policy Text Block]

Recent Accounting Pronouncements

ASU 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The FASB issued ASU 2019-12 which removes specific exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles (GAAP). It eliminates the need for an organization to analyze whether the following apply in a given period:

-Exception to the incremental approach for intraperiod tax allocation;

-Exceptions to accounting for basis differences when there are ownership changes in foreign investments; and

-Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses.

The ASU also improves financial statement preparers' application of income tax-related guidance and simplifies GAAP for:

-Franchise taxes that are partially based on income;

-Transactions with a government that result in a step up in the tax basis of goodwill;

-Separate financial statements of legal entities that are not subject to tax; and

-Enacted changes in tax laws in interim periods.

These amendments are effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments - Credit Losses

The FASB issued ASU 2019-11 which clarifies guidance around how to report expected recoveries. "Expected recoveries" describes a situation in which an organization recognizes a full or partial writeoff of the amortized cost basis of a financial asset, but then later determines that the amount written off, or a portion of that amount, will in fact be recovered. This ASU permits organizations to record expected recoveries on PCD assets.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2019-08 Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-Based Consideration Payable to a Customer

The FASB issued ASU 2019-08 which requires companies to measure and classify (on the balance sheet) share-based payments to customers by applying the guidance in Topic 718, Compensation-Stock Compensation. As a result, the amount recorded as a reduction in revenue would be measured based on the grant-date fair value of the share-based payment.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2019-05 Credit Losses (Topic 326): Targeted Transition Relief

The FASB issued ASU 2019-05 which provides entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments - Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326.  The fair value option election does not apply to held-to-maturity debt securities.  An entity that elects the fair value option should subsequently apply the guidance in Subtopics 820-10, Fair Value Measurement - Overall, and 825-10.

These amendments are effective for fiscal years beginning after December 15, 2019.  The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments-Credit Losses

The FASB issued ASU 2018-19 which mitigates transition complexity by requiring entities other than public business entities, including not-for-profit organizations and certain employee benefit plans, to implement the credit losses standard issued in 2016, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. This aligns the implementation date for their annual financial statements with the implementation date for their interim financial statements. The guidance also clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the leases standard.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2018-18 Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606

The FASB issued ASU 2018-18 which provides guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard.

The ASU also provides more comparability in the presentation of revenue for certain transactions between collaborative arrangement participants. It accomplishes this by allowing organizations to only present units of account in collaborative arrangements that are within the scope of the revenue recognition standard together with revenue accounted for under the revenue recognition standard.  The parts of the collaborative arrangement that are not in the scope of the revenue recognition standard should be presented separately from revenue accounted for under the revenue recognition standard.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement

The FASB issued ASU 2018-13 which modifies the disclosure requirements in Topic 820 as follows:

Removals

-The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;

-The policy for timing of transfers between levels;

-The valuation processes for Level 3 fair value measurements; and

-For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period.

Modifications

-In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities;

-For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee's assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and

-The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date

Additions

-The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and

- The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative

information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.

These amendments are effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

v3.20.1
Adoption of New Accounting Standards (Tables)
12 Months Ended
Dec. 31, 2019
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Schedule of impact of the adoption of ASC 842 on the balance sheet [Table Text Block]
  As reported
December 31, 2018
  Adoption of ASC 842
Increase (Decrease)
  Balance
 January 1, 2019
 
Operating lease right-of-use assets$ $726 $726 
Total assets 20,018  726  20,744 
Total current liabilities 2,722  127  2,849 
Deferred lease obligations 49  (49)  
Operating lease liability   599  599 
Total liabilities 10,031  677  10,708 
Total shareholders' equity 9,987  49  10,036 
Total liabilities and shareholders' equity 20,018  726  20,744 
v3.20.1
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Notes to Financial Statements [Abstract]  
Schedule of estimated useful lives of leasehold improvements and equipment [Table Text Block]
On the declining balance method - 
  
Laboratory and office equipment20%
Computer equipment30%
  
On the straight-line method - 
  
Leasehold improvementsover the lease term
Manufacturing equipment5 - 10 years
v3.20.1
Leasehold Improvements and Equipment (Tables)
12 Months Ended
Dec. 31, 2019
Notes to Financial Statements [Abstract]  
Schedule of leasehold improvements and equipment [Table Text Block]
        2019  2018 
     Accumulated  Net Carrying  Net Carrying 
  Cost  Depreciation  Amount  Amount 
             
Manufacturing equipment$4,657 $879 $3,778 $3,512 
Laboratory and office equipment 1,368  870  498  562 
Computer equipment 125  85  40  39 
Leasehold improvements 3,325  1,276  2,049  2,135 
             
 $9,475 $3,110 $6,365 $6,248 
v3.20.1
Long-term debt (Tables)
12 Months Ended
Dec. 31, 2019
Other Liabilities Disclosure [Abstract]  
Schedule of term loan [Table Text Block]
  December 31, 2019  December 31, 2018 
    $ 
       
       
Term loan facility 1,005  1,502 
Secured loan 192  330 
Total debt 1,197  1,832 
       
Less: current portion 727  692 
       
Total long-term debt 470  1,140 
Schedule of term loan principal repayments [Table Text Block]
2020727 (CAD 945)
2021470 (CAD 610)
v3.20.1
Convertible Debentures (Tables)
12 Months Ended
Dec. 31, 2019
Convertible Debt [Abstract]  
Schedule of convertible debt [Table Text Block]
   December 31,   December 31,  
   2019  2018 
          
          
Face value of the convertible debentures $ 5,835  $ 5,556  
Transaction costs  (952)  (907)
Accretion  759   398  
Convertible debentures $ 5,642  $ 5,047  
v3.20.1
Convertible Note (Tables)
12 Months Ended
Dec. 31, 2019
Convertible Notes [Abstract]  
Schedule of Capital Units [Table Text Block]
   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  
Schedule of Components of the Convertible Notes [Table Text Block]
   December 31,   

  December 31,

   2019  

2018

        
        
Attributed value of net proceeds to convertible notes $ 975   975
Accretion  280   98
Convertible notes $ 1,255   

1,073

v3.20.1
Capital Stock (Tables)
12 Months Ended
Dec. 31, 2019
Stockholders' Equity Note [Abstract]  
Schedule of Stock by Class [Table Text Block]
  2019  2018 
Authorized -      
       
200,000,000 common shares of $0.00001 par value      
  20,000,000 preferred shares of $0.00001 par value      
       
Issued -      
       
  93,942,652 (December 31, 2018: 93,477,473) common shares$ 1 $ 1 
Schedule Of Proceeds Of Equity Components Based On Fair Value [Table Text Block]
   Gross proceeds   Transaction costs   Net proceeds  
          
Common stock $ 10,926  $ 1,739  $ 9,187  
Warrants  1,708   272   1,436  
  $ 12,634  $ 2,011  $ 10,623  
v3.20.1
Additional Paid-In Capital (Tables)
12 Months Ended
Dec. 31, 2019
Schedule of Additional Paid In Capital [Line Items]  
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
   2019  2018 
Exercise price  0.69   0.74  
Expected volatility  64%   5.9%  
Expected life  5.63 years   5.63 years  

Risk‑free interest rate

 2.18%   2.73%  
Dividend yield   Nil    Nil  
Share-based Payment Arrangement, Option, Activity [Table Text Block]
       Weighted average