Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Note 13 - Capital and Other Components of Equity

v3.8.0.1
Note 13 - Capital and Other Components of Equity
12 Months Ended
Mar. 31, 2018
Statement Line Items [Line Items]  
Disclosure of share capital, reserves and other equity interest [text block]
13.
Capital and other components of equity
 
(a) Share capital:
 
Authorized capital stock:
 
Unlimited number of shares:
Ø
Class A shares (Common Shares), voting (
one
vote per share), participating and without par value
 
Ø
Class B shares, voting (
ten
votes per share), non-participating, without par value and maximum annual non-cumulative dividend of
5%
on the amount paid for said shares. Class B shares are convertible, at the holder’s discretion, into Class A shares (Common Shares), on a
one
-for-
one
basis, and Class B shares are redeemable at the holder’s discretion for
$0.80
per share, subject to certain conditions.
(
1
)
 
Ø
Class C shares, non-voting, non-participating, without par value and maximum annual non-cumulative dividend of
5%
on the amount paid for said shares. Class C shares are convertible, at the holder’s discretion, into Class A shares (Common Shares), on a
one
-for-
one
basis, and Class C shares are redeemable at the holder’s discretion for
$0.20
per share, subject to certain conditions.
(
1
)
 
Ø
Class D and E shares, non-voting, non-participating, without par value and maximum monthly non-cumulative dividend between
0.5%
and
2%
on the amount paid for said shares. Class D and E shares are convertible, at the holder’s discretion, into Class A shares (Common Shares), on a
one
-for-
one
basis, and Class D and E shares are redeemable at the holder’s discretion, subject to certain conditions.
(
1
)
(
1
)
None
issued and outstanding
 
(b) Public offering –
December 27, 2017:
 
On
December 27, 2017,
the Corporation closed a public offering issuing
9,900,990
units of Acasti (“Units”) at a price of
US$1.01
per Unit for gross proceeds of
$12.6
million (
US$10
million). The units issued consist of
9,900,990
Class A shares (Common Shares) and
8,910,891
warrants with the right to purchase
one
Common Share (“Warrant”) of Acasti. As part of this closing, the underwriters’ also partially exercised for
nil
consideration the over-allotment option for warrants, which were issued for a right to purchase
892,044
Class A Common Shares at an exercise price of
US$1.26.
 
On
January 22, 2018,
the underwritters exercised a portion of their over-allotment option by purchasing an additional
766,179
common shares at a price of
US$1.01
per share, for additional gross proceeds of
$963
(
US$773
).
 
The Warrants forming part of the Units are derivative liabilities (“Derivative Warrant Liabilities”) for accounting purposes due to the currency of the exercise price being different from the Corporation’s functional currency. The proceeds of the offering are required to be split between the Derivative Warrant Liabilities and the equity-classified Class A share at the time of issuance of the Units. The fair value of the Derivative Warrant Liabilities at the time of issuance was determined to be
$5.9
million and the residual of the proceeds were allocated to the Class A shares. Total issue costs related to this transaction totaled approximately
$2.7
million. The issue costs have been allocated between the Warrants and Class A shares based on relative value. The portion allocated to the Warrants was recognized in finance costs in the Statements of Earnings and Comprehensive Loss, whereas the portion allocated to Class A shares was recognized as a reduction to share capital, in the Statements of Financial Position.
 
 The fair value of the public offering warrants in
2017
was estimated according to the Black-Scholes option pricing model and based on the following assumptions:
 
      December 27,
2017
 
Exercise price    
US $1.26
 
Share price    
US $0.97
 
Risk-free interest    
2.22
%
Estimated life (in years)    
5
 
Expected volatility    
93.52
%
 
The fair value of the public offering warrants issued was determined to be
$0.60
per warrant as at
December 27, 2017.
Changes in the fair value of the Warrants are recognized in finance expenses.
 
As part of the transaction, the Company also issued broker warrants to purchase up to
495,050
Common Shares. Each Broker Warrant entitles the holder thereof to acquire
one
Common Share of the Corporation at an exercise price of
US$1.2625,
at any time until
December 27, 2022.
The broker warrants are considered for compensation to non-employees under IFRS
2,
stock-based compensation, and are accounted for at fair value at issuance date and
not
subsequently revalued. To determine the fair value of the Broker Warrants, the Black-Scholes pricing model was used based on the following assumptions:
 
      December 27,
2017
 
Exercise price    
US $1.2625
 
Share price    
US $0.97
 
Risk-free interest    
2.22
%
Estimated life (in years)    
5
 
Expected volatility    
93.52
%
 
The total cost associated with the Broker Warrants amounted to
$406
and was allocated to contributed surplus.
 
  (c) Public offering -
February 21, 2017:
 
Concurrent with the private placement described in Note
12,
on
February 21, 2017,
the Corporation closed a public offering (“Public Offering”) issuing
3,930,518
units of Acasti (“Units”) at a price of
$1.45
per Unit for gross proceeds of
$5,699.
Each Unit consists of
one
class A share (Common Share) and
one
half of
one
class A or common share purchase warrant. Each whole warrant entitles the holder thereof to purchase
one
common share at an exercise price of
$2.15
per common share, at any time until
February 21, 2022.
The Units issued as part of the public offering are considered equity instruments. The transaction costs associated with the Public Offering amounted to
$1,190.
The proceeds and transaction costs were allocated to share capital.
 
As part of the transaction, the Company also issued broker warrants (the “Broker Warrants”) to purchase up to
234,992
Common Shares. Each Broker Warrant entitles the holder thereof to acquire
one
Common Share of the Corporation at an exercise price of
$2.15
per common share, at any time until
February 21, 2018.
The broker warrants are considered for compensation to non-employees under IFRS
2,
stock-based compensation, and are accounted for at fair value through contributed surplus. To determine the fair value of the Broker Warrants, the Black-Scholes pricing model was used. The total costs associated with the Broker Warrants amounted to
$144
and were allocated to share capital.
 
The warrants issued as part of the Units of the Public Offering and the broker warrants include an “Acceleration Right”, related to the Corporation’s right to accelerate the expiry date of the warrants. The Acceleration Right clause means the right of the Corporation to accelerate the expiry date to a date that is
not
less than
30
days following delivery of the acceleration notice if, at any time at least
four
months after the effective date, the volume weighted average trading price of the common shares equals or exceeds
$2.65
for a period of
20
consecutive trading days on the TSXV.
 
Furthermore, as part of the
February 2017
Public Offering and convertible debt transactions, a total of
60,000
Common Shares were issued as equity settled share-based payments for services received from an employee of the previous parent at a price of
$1.57
per share for a total cost of
$94.
The equity settled share-based payment costs have been allocated to share capital for a cost that amounted to
$85
and to debt for a cost that amounted to
$9
based on relative value.
 
The value of the broker warrants was estimated using the Black-Scholes option pricing model and based on the following assumptions:
 
     
February 21, 2017
 
         
Exercise price  
$2.15
 
Share price  
$1.70
 
Dividend    
 
Risk-free interest    
0.79
%
Estimated life (in years)    
1.00
 
Expected volatility    
112.09
%
 
The total cost associated with the Broker Warrants amounted to
$144
and was allocated to contributed surplus.
 
(d) Issuance of shares:
 
The following table summarizes the shares issued to settle the payment of accrued interest on the unsecured convertible debentures with the corresponding amount recorded to share capital.
 
Accrued interest as at     Share issuance date       Number of shares       Amount
$
 
                         
March 31, 2017    
April 7, 2017
     
9,496
     
17
 
June 30, 2017    
August 15, 2017
     
23,885
     
40
 
September 30, 2017    
December 27, 2017
     
22,783
     
40
 
December 31, 2017    
March 27, 2018
     
33,605
     
40
 
     
 
     
89,769
     
137
 
 
(e) Warrants:
 
The warrants of the Corporation are composed of the following as at
March 31, 2018,
March 31, 2017
and
February 28, 2017:
 
     
March 31, 2018
     
March 31, 2017
      February 28, 2017
(Unaudited)
      February 29, 2016  
     
Number
outstanding
      Amount      
Number
outstanding
      Amount      
Number outstanding
      Amount      
Number outstanding
      Amount  
             
$
             
$
             
$
             
$
 
Liability                                                                
Series December 2017                                                                
US public offering Warrants 2017 (i)    
9,802,935
     
6,405
     
     
     
     
     
     
 
Series 8 Public offering                                                                
Warrants December 2013 (note 11) (ii)    
18,400,000
     
21
     
18,400,000
     
209
     
18,400,000
     
187
     
18,400,000
     
156
 
     
28,202,935
     
6,426
     
18,400,000
     
209
     
18,400,000
     
187
     
18,400,000
     
156
 
Equity                                                                
Public offering warrants                                                                
Series December 2017 US Broker warrants (v)    
495,050
     
406
     
     
     
     
     
     
 
Series 2017 BW Broker warrants (iii)    
     
     
234,992
     
144
     
234,992
     
144
     
     
 
Public offering warrants February 2017 (iv)    
1,904,034
     
     
1,965,259
     
     
1,965,259
     
     
     
 
Private Placement – contingent warrants                                                                
2017 Unsecured convertible debenture conversion option and contingent warrants (vi)    
1,052,630
     
309
     
1,052,630
     
309
     
1,052,630
     
309
     
     
 
Series 9 Private Placement warrants 2013 (vii)    
161,654
     
     
161,654
     
     
161,654
     
     
161,654
     
 
     
3,613,368
     
715
     
3,414,535
     
453
     
3,414,535
     
453
     
161,654
     
 
(i)
Warrant to acquire
one
Common Share of the Corporation at an exercise price of
US$1.26,
expiring on
December 27, 2022.
(ii)
In order to obtain
one
Common Share of the Corporation at an exercise price of
US$15.00,
10
warrants must be exercised. Warrants expire on
December 
3,
2018.
(iii)
Warrant to acquire
one
Common Share of the Corporation at an excersise price of
2.15
expiring on
February 21, 2018.
117,496
warrants amounted to
$71
were exercised in
November 2017
and
117,496
warrants expired on
February 21, 2018.
(iv)
Warrant to acquire
one
Common Share of the Corporation at an exercise price of
US$1.2625,
expiring on
December 27, 2022.
61,225
warrants amounted to
$132
were exercised in
November 2017.
(v)
Warrant to acquire
one
Common Share of the Corporation at an exercise price of
$2.15,
expiring on
February 21, 2022.
(vi)
Warrant to acquire
one
Common Share of the Corporation at an exercise price of
$1.90
expiring on
February 21, 2020,
net of deferred tax expense of
$129.
(vii)
Warrant to acquire
one
Common Share of the Corporation at an exercise price of
$13.30,
expiring on
December 3, 2018.