INTELGENX TECHNOLOGIES CORP., S-1 filed on 7/22/2013
Securities Registration Statement
Document and Entity Information
15 Months Ended
Mar. 31, 2013
Document Type
S-1 
Amendment Flag
false 
Document Period End Date
Mar. 31, 2013 
Trading Symbol
igxt 
Entity Registrant Name
IntelGenx Technologies Corp. 
Entity Central Index Key
0001098880 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Smaller Reporting Company 
Entity Current Reporting Status
Yes 
Entity Voluntary Filers
No 
Entity Well Known Seasoned Issuer
No 
Document Fiscal Year Focus
2013 
Document Fiscal Period Focus
FY 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Current
 
 
 
Cash and cash equivalents
$ 2,168 
$ 2,059 
$ 3,505 
Accounts receivable
170 
1,282 
263 
Prepaid expenses
89 
102 
68 
Loan receivable
 
85 
Investment tax credits receivable
243 
213 
375 
Total Current Assets
2,670 
3,656 
4,296 
Leasehold Improvements and Equipment
438 
387 
149 
Intangible assets
106 
116 
125 
Total Assets
3,214 
4,159 
4,570 
Current
 
 
 
Accounts payable and accrued liabilities
498 
1,058 
666 
Deferred license revenue
308 
308 
Total Curent Liabilities
806 
1,366 
666 
Deferred license revenue, non-current portion
539 
615 
Total Liabilities
1,345 
1,981 
666 
Commitments
 
Shareholders' Equity
 
 
 
Capital Stock
Additional Paid-in-Capital
16,554 
16,342 
15,918 
Accumulated Deficit
(14,949)
(14,463)
(12,213)
Accumulated Other Comprehensive Income
263 
299 
199 
Total Stockholder Equity
1,869 
2,178 
3,904 
Total Liabilities and Stockholders Equity
$ 3,214 
$ 4,159 
$ 4,570 
Consolidated Statements of Comprehensive Loss (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Dec. 31, 2011
Revenues
 
 
 
 
Royalties
$ 80 
$ 0 
 
 
License and other revenue
77 
100 
 
 
Revenue
 
 
1,198 
433 
Other Income
 
 
10 
Total Revenues
157 
100 
1,208 
440 
Expenses
 
 
 
 
Research and development
167 
239 
1,935 
1,524 
Research and development tax credits
 
 
(212)
(188)
Selling, general and administrative expense
456 
439 
 
 
Management salaries
 
 
716 
586 
General and administrative
 
 
347 
333 
Professional fees
 
 
582 
594 
Depreciation
10 
46 
37 
Amortization of intangible assets
10 
 
 
Foreign exchange loss
 
 
41 
Interest and financing fees
 
 
Total Costs and Expenses
643 
686 
3,458 
2,892 
Loss from Operations
(486)
(586)
 
 
Other Income
 
 
 
 
Interest and other income
 
 
Total Other Income
 
 
Loss Before Income Taxes
 
 
(2,250)
(2,452)
Income taxes
 
 
Net Loss
(486)
(582)
(2,250)
(2,452)
Other Comprehensive Income
 
 
 
 
Foreign currency translation adjustment
(36)
91 
100 
49 
Comprehensive Loss
$ (522)
$ (491)
$ (2,150)
$ (2,403)
Basic and Diluted Weighted Average Number of Shares Outstanding
50,236,255 
49,324,531 
49,637,908 
43,736,003 
Basic and Diluted Loss Per Common Share
$ (0.01)
$ (0.01)
$ (0.04)
$ (0.05)
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Dec. 31, 2011
Funds Provided (Used) - Operating Activities
 
 
 
 
Net loss
$ (486)
$ (582)
$ (2,250)
$ (2,452)
Depreciation
20 
46 
37 
Stock-based compensation
18 
15 
59 
51 
Accounts receivable write-off
 
 
53 
Total Adjustments
(448)
(559)
(2,145)
(2,311)
Changes in assets and liabilities
 
 
 
 
Accounts receivable
1,112 
18 
(1,019)
(38)
Prepaid and other assets
13 
(15)
(34)
(21)
Other receivables
(30)
249 
247 
(263)
Accounts payable and other accrued liabilities
(560)
(270)
390 
317 
Deferred revenue
(77)
1,000 
923 
Net change in assets and liabilities
458 
982 
507 
(5)
Net Cash Provided by Operating Activities
10 
423 
(1,638)
(2,316)
Financing Activities
 
 
 
 
Issuance of common stock and warrants
 
 
3,231 
Proceeds from exercise of warrants, agents' warrants and stock options
195 
233 
365 
1,918 
Transaction costs
 
 
(369)
Net Cash Provided by Financing Activities
195 
233 
365 
4,780 
Investing Activities
 
 
 
 
Additions to leasehold improvements and equipment
(69)
(189)
(270)
(34)
Additions to intangible assets
 
 
(125)
Net Cash used in iInvesting Activities
(69)
(189)
(270)
(159)
Increase (Decrease) in Cash and Cash Equivalents
136 
467 
(1,543)
2,305 
Effect of Foreign Exchange on Cash and Cash Equivalents
(27)
88 
97 
56 
Beginning of Year
2,059 
3,505 
3,505 
1,144 
End of Year
$ 2,168 
$ 4,059 
$ 2,059 
$ 3,505 
Consolidated Statement of Shareholders Equity (USD $)
In Thousands, except Share data
Capital Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Income [Member]
Total
Beginning Balance at Dec. 31, 2010
$ 0 
$ 11,087 
$ (9,761)
$ 150 
$ 1,476 
Beginning Balance (Shares) at Dec. 31, 2010
39,581,271 
 
 
 
 
Foreign currency translation adjustment
 
 
 
49 
49 
Issue of common stock, net of transaction costs of $390
 
2,024 
 
 
2,024 
Issue of common stock, net of transaction costs of $390 (Shares)
4,821,342 
 
 
 
 
Warrants issued, net of transaction costs of $132
 
685 
 
 
685 
Agents' Warrants
 
153 
 
 
153 
Warrants exercised
 
1,458 
 
 
1,458 
Warrants exercised (Shares)
3,418,009 
 
 
 
 
Agents warrants exercised
 
142 
 
 
142 
Agents warrants exercised (Shares)
299,406 
 
 
 
 
Options exercised
 
318 
 
 
318 
Options exercised (Shares)
775,000 
 
 
 
 
Stock-based compensation
 
51 
 
 
51 
Net loss for the period
 
 
(2,452)
 
(2,452)
Ending Balance at Dec. 31, 2011
15,918 
(12,213)
199 
3,904 
Ending Balance (Shares) at Dec. 31, 2011
48,895,028 
 
 
 
 
Foreign currency translation adjustment
 
 
 
100 
100 
Warrants exercised
 
233 
 
 
233 
Warrants exercised (Shares)
726,080 
 
 
 
 
Agents warrants exercised
 
104 
 
 
104 
Agents warrants exercised (Shares)
219,313 
 
 
 
 
Options exercised
 
28 
 
 
28 
Options exercised (Shares)
50,000 
 
 
 
 
Stock-based compensation
 
59 
 
 
59 
Net loss for the period
 
 
(2,250)
 
(2,250)
Ending Balance at Dec. 31, 2012
16,342 
(14,463)
299 
2,178 
Ending Balance (Shares) at Dec. 31, 2012
49,890,421 
 
 
 
 
Foreign currency translation adjustment
 
 
 
(36)
(36)
Warrants exercised
171 
 
 
172 
Warrants exercised (Shares)
362,500 
 
 
 
 
Options exercised
 
23 
 
 
23 
Options exercised (Shares)
50,000 
 
 
 
 
Stock-based compensation
 
18 
 
 
18 
Net loss for the period
 
 
(486)
 
(486)
Ending Balance at Mar. 31, 2013
$ 1 
$ 16,554 
$ (14,949)
$ 263 
$ 1,869 
Ending Balance (Shares) at Mar. 31, 2013
50,302,921 
 
 
 
 
Basis of Presentation
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Basis of Presentation [Text Block]
1.

Basis of Presentation

 

 

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal and recurring nature.

 

 

 

These financial statements should be read in conjunction with the audited consolidated financial statements at December 31, 2012. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). 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.

 

 

 

Management has performed an evaluation of the Company’s activities through the date and time these financial statements were issued and concluded that there are no additional significant events requiring recognition or disclosure.

Basis of Presentation [Text Block]
1.

Basis of Presentation

   
 

IntelGenx Technologies Corp. (“IntelGenx” or the “Company”) prepares its 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.

   

 

Nature of Business
Nature of Business [Text Block]
2.

Nature of Business

   
 

The Company specializes in the development of pharmaceutical products in co-operation with various pharmaceutical companies.

   
 

Technologies

   
 

The Company has developed three proprietary delivery platforms; including an immediate release oral film “ VersaFilm™ ”, a mucoadhesive tablet “ AdVersa™ ” and a multilayer controlled release tablet “ VersaTab™ ”.

   
 

The three technology platforms have been designed to address the challenges commonly encountered in oral drug delivery, such as first-pass metabolism, gastrointestinal (“GI”) side effects, or incomplete absorption of the drug in the GI tract. IntelGenx’ technologies are broadly applicable and have the ability to improve the performance of a wide variety of existing pharmaceutical compounds.

   
 

Product Pipeline

   
 

IntelGenx’ product pipeline currently consists of 9 products in various stages of development, including products for the treatment of hypertension, erectile dysfunction, benign prostatic hyperplasia, migraine, insomnia, idiopathic pulmonary fibrosis, allergies and pain management. Of the products currently under development, 6 utilize the VersaFilm™ technology, 2 utilize the VersaTab™ technology, and one utilizes the AdVersa™ technology.

   
 

Approved and Commercialized Products

   
 

The Company’s first FDA-approved product, Forfivo XL™, was launched in the USA in October 2012 under a licensing partnership with Edgemont Pharmaceuticals LLP. Forfivo XL™ is indicated for the treatment of Major Depressive Disorder (MDD) and is the only extended-release bupropion HCl product to provide a once-daily, 450mg dose in a single tablet. The active ingredient in Forfivo XL is bupropion, the same active ingredient used in Wellbutrin XL®.

   
 

Sales of the Company’s first commercialized product, a pre-natal multivitamin supplement, marketed in the USA as Gesticare®, were discontinued in the third quarter of 2011. The Company received final royalties from the sale of the product in the fourth quarter of 2011 from Azur Pharma, now part of Jazz Pharmaceuticals plc.

Adoption of New Accounting Standards
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Adoption of New Accounting Standards [Text Block]
2.

Adoption of New Accounting Standards

 

 

 

Revenue Recognition and Disclosures

 

 

 

In December 2011, the FASB issued Update No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities”. The objective of this Update is to provide enhanced disclosures that will enable users of financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhanced disclosures by requiring improved information about derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria or subject to a master netting arrangement or similar agreement. In January 2013, the FASB also issued Update No. 2013-01, which clarifies that ordinary trade receivables and receivables are not in the scope of ASU 2011 - 11. ASU 2011 - 11 and ASU 2013 - 01 are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Retrospective disclosure is required for all comparative periods presented. The adoption of this Statement did not have a material effect on the Company’s financial position or results of operations.

   
 

In February 2013, the FASB has issued Update No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. This Update has been issued to improve the transparency of reporting these reclassifications. The amendments in this Update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011 - 05 and 2011 - 12 for all public and private organizations. The amendments would require an entity to provide additional information about reclassifications out of accumulated other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual), effective for reporting periods beginning after December 15, 2012. The adoption of this Statement did not have a material effect on the Company’s financial position or results of operations.

Adoption of New Accounting Standards [Text Block]
3. Adoption of New Accounting Standards
   
 

In May 2011, the FASB issued Update No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. The amendments in this Update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, FASB does not intend for the amendments in this Update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. For public entities, ASU 2011-4 is effective during interim and annual periods beginning after December 15, 2011. The adoption of this Statement did not have a material effect on the Company’s financial position or results of operations.

 

 

 

In June 2011, the FASB issued Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”. Under the amendments, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This Update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments in this Update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. ASU 2011-05 should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. In December 2011 however, the FASB issued Update No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”. The amendments in this Update supersede changes to those paragraphs in Update 2011-05 that pertain to how, when, and where reclassification adjustments are presented. The adoption of this Statement did not have a material effect on the Company’s financial position or results of operations.

 

Significant Accounting Policies
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Significant Accounting Policies [Text Block]
3.

Significant Accounting Policies

   
 

Recently Issued Accounting Pronouncements

   
 

In December 2011, the FASB issued Update No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”. The amendments in this Update supersede changes to those paragraphs in Update 2011 - 05 that pertain to how, when, and where reclassification adjustments are presented. The adoption of this amendment is not expected to have a material effect on the Company’s financial position or results of operations, but may affect the presentation of Other Comprehensive Income in the Company’s financial statements.

   
 

In February 2013, the FASB issued Update No. 2013-04, “Liabilities (Topic 405)—Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date”. The amendments in this Update provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. For public entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments shall be applied retrospectively to all prior periods presented for those obligations that exist at the beginning of the fiscal year of adoption. Early adoption is permitted. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

   
 

In March 2013, the FASB issued Update No. 2013-05, “Foreign Currency Matters (Topic 830)—Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity”. The amendments in this Update resolve the diversity in practice about whether Subtopic 810 - 10, Consolidation—Overall, or Subtopic 830 - 30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. For public entities, the amendments in this ASU are effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2013. Early adoption is permitted. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

Significant Accounting Policies [Text Block]
4.

Summary of Significant Accounting Policies

   
 

Revenue Recognition

   
 

The Company recognizes revenue from research and development contracts as the contracted services are performed or when milestones are achieved, in accordance with the terms of the specific agreements and when collection of the payment is reasonably assured. In addition, the performance criteria for the achievement of milestones are met if substantive effort was required to achieve the milestone and the amount of the milestone payment appears reasonably commensurate with the effort expended. Amounts received in advance of the recognition criteria being met, if any, are included in deferred income.

   
 

IntelGenx has license agreements that specify that certain royalties are earned by the Company on sales of licensed products in the licensed territories. Licensees usually report sales and royalty information in the 45 days after the end of the quarter in which the activity takes place and typically do not provide forward estimates or current-quarter information. Because the Company is not able to reasonably estimate the amount of royalties earned during the period in which these licensees actually ship products, royalty revenue is not recognized until the royalties are reported to the Company and the collection of these royalties is reasonably assured.

   
 

In August 2010 the Company entered into a joint development and commercialization agreement with RedHill Biopharma (“RedHill”), an Israeli company, for an anti-migraine product based upon the Company’s VersaFilm™ technology. In accordance with the terms of the agreement, RedHill made up-front and milestone payments in the aggregate amount of $600 thousand, of which $100 thousand was received by the Company in 2012 upon production of pivotal batches. RedHill is required to make additional milestone payments of up to $700,000 as follows:

   
 

$200 thousand upon the filing of an NDA and acceptance of the filing by the U.S. Food and Drug Administration; and

   
 

$500 thousand upon receipt of U.S. Food and Drug Administration marketing approval for the product.

   
 

Product Sales:

   
 

The Company launched Forfivo XL™ in the USA in October 2012 under a licensing partnership with Edgemont Pharmaceuticals LLP (“Edgemont”). Under the terms of the agreement with Edgemont, the commercial launch of Forfivo XL™ triggered launch-related milestone payments for IntelGenx of up to $4.0 million, of which $1 million was invoiced by the Company to Edgemont and recognized as revenue in the fourth quarter of 2012 and the cash received in February 2013. Additional milestones of up to a further $23.5 million are payable upon achieving certain sales and exclusivity targets and the Company expects to commence receiving royalties from sales of the product in the first quarter of 2013.

   
 

Upon entering into the licensing agreement, Edgemont paid the Company an upfront fee of $1 million, which the Company recognized as deferred license revenue. The deferred license revenue will be amortized in income over the period where sales of Forfivo XL™ are expected to be exclusive. As a result of this policy, the Company has a deferred revenue balance of $923 thousand at December 31, 2012 that has not been recognized as revenue.

 

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, the investment tax credits receivable, the determination of the fair value of warrants issued as part of fundraising activities, and the resulting impact on the allocation of the proceeds between the common shares and the warrants.

   
 

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.

   
 

Financial Instruments

   
 

The Company estimates the fair value of its financial instruments based on current interest rates, market value and pricing of financial instruments with comparable terms. Unless otherwise indicated, the carrying value of these financial instruments approximates their fair value.

   
 

Cash and Cash Equivalents

   
 

Cash and cash equivalents is comprised of cash on hand and term deposits with original maturity dates of less than three months that are stated at cost, which approximates fair value.

   
 

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. In the first quarter of 2011, the Company wrote-off a receivable in the amount of $53 thousand that was owed to the Company by Circ Pharma Limited, Ireland, which was deemed to be no longer collectible. The Company 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, 2012 accounts receivable (2011 - $Nil). The accounts receivable balance of $1,282 thousand as at December 31, 2012 includes $1 million from Edgemont that was received by IntelGenx in February 2013.

 

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.

   

 

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 equipment 20%
         Computer equipment 30%
     
  On the straight-line method -  
     
         Leasehold improvements over the lease term
         Manufacturing equipment 5 – 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.

Intangible Assets

Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in other intangibles, net of accumulated amortization.

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 thereof.

 

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 estimates its forfeiture rate in order to determine its compensation expense arising from stock-based awards. 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 505-50, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital. For common stock issuances to non-employees that are fully vested and are for future periods, the Company classifies these issuances as prepaid expenses and expenses the prepaid expenses over the service period. At no time has the Company issued common stock for a period that exceeds one year.

 

 

 

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 new 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. There are no assets or liabilities measured at fair value as at December 31, 2012.

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

In December 2011, the FASB issued Update No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities”. The objective of this Update is to provide enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either Section 210-20-45 or Section 815-10-45. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Retrospective disclosure is required for all comparative periods presented. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

 

In December 2011, the FASB issued Update No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”. The amendments in this Update supersede changes to those paragraphs in Update 2011-05 that pertain to how, when, and where reclassification adjustments are presented. The adoption of this amendment is not expected to have a material effect on the Company’s financial position or results of operations, but will affect the presentation of Other Comprehensive Income in the Company’s financial statements.

   
Leasehold Improvements and Equipment
Leasehold Improvements and Equipment [Text Block]
5.

Leasehold Improvements and Equipment


                  2012     2011  
  In US$ thousands         Accumulated     Net Carrying     Net Carrying  
      Cost     Depreciation     Amount     Amount  
                           
  Manufacturing equipment $ 225   $ 0   $ 225   $ 0  
  Laboratory and office equipment   418     265     153     138  
  Computer equipment   43     34     9     11  
  Leasehold improvements   63     63     0     0  
                           
    $ 749   $ 362   $ 387   $ 149  

 

As of December 31, 2012 no depreciation has been recorded on manufacturing equipment as the equipment is not yet being utilized.

Intangible Assets
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Intangible Assets [Text Block]
4.

Intangible Assets

   
 

As of March 31, 2013 NDA acquisition costs of $106 thousand (December 31, 2012 - $116 thousand) were recorded as intangible assets on the Company’s balance sheet and represent the net book value of the final progress payment related to the acquisition of 100% ownership of Forfivo XL™. The asset will be amortized over its estimated useful life of 39 months. The Company commenced amortization upon commercial launch of the product in October 2012.

Intangible Assets [Text Block]
6.

Intangible Assets

   
 

As of December 31, 2012 NDA acquisition costs of $116 thousand (December 31, 2011 - $125 thousand) were recorded as intangible assets on the Company’s balance sheet and represent the net book value of the final progress payment related to the acquisition of 100% ownership of Forfivo XL™. The asset will be amortized over its estimated useful life of 39 months and the Company commenced amortization upon commercial launch of the product in October 2012.

Deferred License Revenue
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Deferred License Revenue [Text Block]
5.

Deferred License Revenue

   
 

Deferred license revenue represents upfront payments received for the granting of licenses to the Company’s patents, intellectual property, and proprietary technology, for commercialization. Deferred license revenue is recognized in income over the period where sales of the licensed products will occur.

   
 

Upon entering into the licensing agreement with Edgemont Pharmaceuticals the Company received an upfront fee of $1 million, which the Company recognized as deferred license revenue. The deferred license revenue will be amortized in income over a period of 39 months, which is the minimum period where sales of Forfivo XL™ are expected to be exclusive. As a result of this policy, the Company has a deferred revenue balance of $847 thousand at March 31, 2013 that has not been recognized as revenue.

Deferred License Revenue [Text Block]
7.

Deferred License Revenue

   
 

Deferred license revenue represents upfront payments received for the granting of licenses to the Company’s patents, intellectual property, and proprietary technology, for commercialization. Deferred license revenue is recognized in income over the period where sales of the licensed products will occur.

   
 

Upon entering into the licensing agreement with Edgemont Pharmaceuticals the Company received an upfront fee of $1 million, which the Company recognized as deferred license revenue. The deferred license revenue will be amortized in income over a period of 39 months, which is the minimum period where sales of Forfivo XL™ are expected to be exclusive. As a result of this policy, the Company has a deferred revenue balance of $923 thousand at December 31, 2012 that has not been recognized as revenue.

Commitments
Commitments [Text Block]
8.

Commitments

   
 

The Company currently operates out of a 3,500 square feet leasehold facility consisting of laboratories and office space at 6425 Abrams, Saint-Laurent, Quebec. The original lease agreement expired in August 2009, since when it has been extended for varying periods whilst the Company sought alternative premises. The most recent extension is defined as the day immediately preceding the fulfillment of certain conditions relating to the occupation of new leased premises at 6410 - 6420 Abrams. In the first half of 2013, the Company plans to enter into an addendum to its existing lease to include the relocation of the Company’s operations to larger premises consisting of approximately 28,600 of rentable square feet. The term of the amended lease is 10 years following relocation, which is expected to commence in the autumn of 2013 upon completion of certain leasehold improvements.

   
 

As of December 31, 2012 future minimum payments under operating leases for facilities were as follows (in thousands):


2013   15  
2014   0  
Total $ 15  

On October 1, 2009, the Company signed new agreements with each of Little Gem Life Science Partners and SectorSpeak Inc. for investor relation services in the USA and in Canada, respectively. Under the terms of these agreements, the Company was required to pay $4.5 thousand a month to Little Gem Life Science Partners and CDN$5.0 thousand (US$5.0 thousand) monthly to Sector Speak Inc. The Company renegotiated these agreements in May 2012 and reduced payments to $2.5 thousand and CDN$2.5 thousand (US$2.5 thousand) respectively. The agreements automatically renew unless specifically terminated.

On May 7, 2010, the Company executed a Project Transfer Agreement with one of its former development partners whereby the Company acquired full rights to, and ownership of, Forfivo XL™, a novel, high strength formulation of Bupropion hydrochloride, the active ingredient in Wellbutrin XL®. In accordance with the Project Transfer Agreement, and following commercial launch of Forfivo XL™ in October 2012, the Company is required to pay to its former development partner 10% of net sales royalties received under the commercialization agreement that was executed with Edgemont Pharmaceuticals in February 2012.

Capital Stock
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Capital Stock [Text Block]
6.

Capital Stock


      March 31,     December 31,  
      2013     2012  
  Authorized -            
  100,000,000 common shares of $0.00001 par value            
  20,000,000 preferred shares of $0.00001 par value            
  Issued -            
  50,302,921 (December 31, 2012 - 49,890,421) common shares $ 503   $ 499  
Capital Stock [Text Block]
9.

Capital Stock


      2012     2011  
  Authorized -            
  100,000,000 common shares of $0.00001 par value            
    20,000,000 preferred shares of $0.00001 par value            
  Issued -            
    49,890,421 (December 31, 2011 - 48,895,028) common shares $ 499   $ 489  

On June 21, 2011, as part of two concurrent private placement offerings, the Company issued approximately 4.8 million shares of common stock, and three-year warrants to purchase up to approximately 2.4 million shares of common stock, for aggregate gross proceeds of approximately US$3.2 million. Each warrant entitles the holder to purchase one half of one common share at an exercise price of $0.74 per common share and expires 36 months after the date of issuance. Proceeds were allocated between the common shares and the warrants based on their relative fair value. The common shares were recorded at a value of $2,024 thousand. (See note 10 for the portion allocated to the warrants).

The private placements consisted of a definitive securities purchase agreement with certain accredited and institutional investors for the issuance and sale in a private placement transaction (the "US Private Offering") of 2,582,536 shares and warrants to purchase up to 1,291,268 shares of common stock, for aggregate gross proceeds of approximately $1.7 million, and a definitive subscription agreement solely with Canadian investors for the issuance and sale in a concurrent non-brokered private placement transaction (the "Canadian Private Offering") of 2,238,806 shares and warrants to purchase up to 1,119,403 shares of common stock, for aggregate gross proceeds of approximately $1.5 million.

The Company paid an agent cash commissions in the amount of approximately $121 thousand, representing 7% of the aggregate gross proceeds received by the Company in the US Private Offering, plus expenses in the amount of approximately $28 thousand, and issued warrants to the agent to purchase 180,778 shares of common stock, representing 7% of the amount of shares sold in the US Private Offering. The Company also paid cash finder’s fees in the amount of approximately $105 thousand, representing 7% of the aggregate gross proceeds received by the Company in the Canadian Private Offering; and issued warrants to purchase 156,716 shares of common stock, representing 7% of the amount of shares sold in the Canadian Private Offering. Each warrant entitles the holder to purchase one half of one common share at an exercise price of $0.74 per common share and expires 36 months after the date of issuance.

In addition, the Company paid approximately $114 thousand in cash consideration for other transaction costs, which have been reflected as a reduction of the common shares and the warrants based on their relative fair values. All of the above transaction costs have been reflected as a reduction to the common shares and the warrants based on their relative fair values.

 

In the year ended December 31, 2012 a total of 50,000 (2011 – 775,000) stock options were exercised for 50,000 (2011 – 775,000) common shares having a par value of $0 thousand (2011 - $Nil) in aggregate, for cash consideration of $28 thousand ($318 thousand), resulting in an increase in additional paid-in capital of $28 thousand (2011 – $318 thousand).

   
 

During the year ended December 31, 2012 a total of 219,313 (2011 - 299,406) agents’ warrants were exercised for 219,313 (2011 - 299,406) common shares having a par value of $0 thousand in aggregate, for cash consideration of approximately $104 thousand (2011 - $142 thousand), resulting in an increase in additional paid- in capital of approximately $104 thousand (2011 - $142 thousand).

   
 

Also in the year ended December 31, 2012 a total of 1,205,668 warrants were exercised, of which 491,382 warrants were exercised for 491,382 common shares having a par value of $0 thousand in aggregate, for cash consideration of approximately $233 thousand, resulting in an increase in additional paid-in capital of approximately $233 thousand, and a total of 714,286 warrants were exercised for 234,698 common shares in cashless exercises, resulting in an increase in additional paid-in capital of $Nil.

   
 

In the year ended December 31, 2011 a total of 4,366,904 warrants were exercised, of which 2,902,618 warrants were exercised for 2,902,618 common shares having a par value of $0 thousand in aggregate, for cash consideration of approximately $1,458 thousand, resulting in an increase in additional paid-in capital of approximately $1,458 thousand, and a total of 1,464,286 warrants were exercised for 515,391 common shares in cashless exercises, resulting in an increase in additional paid-in capital of $Nil.

Income Tax
Income Tax [Text Block]
11.

Income Taxes

   
 

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


      2012     2011  
  Statutory income taxes $ (605 ) $ (694 )
  Net operating losses for which no tax benefits have been recorded   368     514  
  Excess of depreciation over capital cost allowance   3     (2 )
  Non-deductible expenses   18     4  
  Undeducted research and development expenses   273     231  
  Tax deductible portion of transaction costs   -     -  
  Investment tax credit   (57 )   (53 )
  Modification of warrants terms   -     -  
               
               
    $ -   $   -  

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

      2012     2011  
               
  Leasehold Improvements and equipment $ 13   $ 14  
  Net operating losses carryforward   2,278     2,140  
  Undeducted research and development expenses   1,301     1,141  
  Non-refundable tax credits carryforward   914     807  
               
               
      4,506     4,102  
               
  Valuation allowance   (4,506 )   (4,102 )
               
    $ -   $   -  

The valuation allowance at December 31, 2011 was $4,102 thousand. The net change in the valuation allowance during the period ended December 31, 2012, was an increase of $404 thousand. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2012.

 

There were Canadian and provincial net operating losses of approximately $8,390 thousand (2011 - $7,608 thousand) and $8,566 thousand (2011 - $7,437 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 2027 and 2032. A portion of the net operating losses may expire before they can be utilized.

   
 

As at December 31, 2012, the Company had non-refundable tax credits of $914 thousand (2011 - $803 thousand) of which $24 thousand is expiring in 2017, $213 thousand is expiring in 2018, $193 thousand is expiring in 2019, $186 thousand is expiring in 2020, $187 thousand is expiring in 2021 and $111 thousand is expiring in 2022 and undeducted research and development expenses of $4,464 thousand (2011 - $3,656 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 expect its unrecognized tax benefits to change significantly over the next twelve months.

   
 

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, 2012:


Tax Jurisdictions         Tax Years
Federal - Canada   2010 and onward
Provincial - Quebec   2010 and onward
Statement of Cash Flows Information
Statement of Cash Flows Information [Text Block]
12.

Statement of Cash Flows Information


  In US$ thousands   2012     2011  
               
  Additional Cash Flow Information:            
               
  Interest paid $ 3   $ 3  
Related Party Transactions
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Related Party Transactions [Text Block]
8.

Related Party Transactions

   
 

Included in management salaries are $2 thousand (2012 - $1 thousand) for options granted to the Chief Financial Officer and $3 thousand (2012 - $2 thousand) for options granted to the Chief Executive Officer under the 2006 Stock Option Plan and $4 thousand (2012 - $7 thousand) for options granted to non-employee directors.

   
 

Also included in management salaries are director fees of $22 thousand (2012 - $27 thousand) for attendance to board meetings and audit committee meetings and $54 thousand (2012 - $Nil) for fees paid to a director under a management consultancy agreement.

   
 

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

Related Party Transactions [Text Block]
13. Related Party Transactions
   
 

Included in management salaries are $6 thousand (2011 - $4 thousand) for options granted to the Chief Financial Officer and $6 thousand (2011 - $4 thousand) for options granted to the Chief Executive Officer under the 2006 Stock Option Plan and $23 thousand (2011 - $10 thousand) for options granted to non-employee directors.

 

 

 

Included in general and administrative expenses are director fees of $114 thousand (2011 - $87 thousand) for attendance at board meetings and audit committee meetings.

 

 

 

A short term loan of $85 thousand bearing interest at 1% per annum was provided to an employee, who is also an officer of the Company, on November 9, 2011. The loan amount, together with interest accrued, was repaid to the Company on February 28, 2012.

 

 

 

In the year ended December 31, 2012 the amount included in accounts payable and accrued liabilities payable to shareholders, who are also officers of the Company, is $Nil (2011 - $1 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.

Basic and Diluted Loss Per Common Share
2 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Basic and Diluted Loss Per Common Share [Text Block]
9.

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 period. The warrants, share-based compensation and convertible notes have been excluded from the calculation of diluted loss per share since they are anti-dilutive.

Basic and Diluted Loss Per Common Share [Text Block]
14.

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 period. The warrants and stock options have been excluded from the calculation of diluted loss per share since they are anti-dilutive.

Subsequent Events
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Subsequent Events [Text Block]
10.

Subsequent Events

   
 

Subsequent to the end of the quarter, the Company's board of directors granted options to acquire 680,000 common shares under the 2006 Stock Option Plan, as amended. Of the total stock options granted, 480,000 were granted to the Chief Operating Officer and Chief Scientific Officer, Dr. Rajiv Khosla, and 200,000 were granted to the Chief Financial Officer, Mr. Paul A. Simmons. The options have an exercise price of CAD$0.67 (US$0.65) and expire on April 23, 2018. All of the options granted to Dr. Khosla vest on December 31, 2015. The options granted to Mr. Simmons vest over a period of two years at the rate of 25% every six months. In addition, 37,500 unvested options that were granted to Dr. Khosla in November 2011 expired upon issuance of the above options.

   
 

Subsequent to the end of the quarter, 995,500 warrants were exercised for 995,500 common shares having a par value of $0 thousand for cash consideration of approximately $472 thousand, resulting in an increase in additional paid-in capital of approximately $472 thousand.

Subsequent Events [Text Block]
15.

Subsequent Events

 

 

 

Subsequent top the year ended December 31, 2012, 362,500 warrants were exercised for 362,500 common shares having a par value of $0 thousand for cash consideration of approximately $172 thousand, resulting in an increase in additional paid-in capital of approximately $172 thousand

.

Comparative Figures
Comparative Figures [Text Block]
11.

Comparative Figures

   
 

Certain reclassifications of March 31, 2012 amounts have been made to facilitate comparison with the current period.

Summary of Significant Accounting Policies (Policies)
 

Revenue Recognition

   
 

The Company recognizes revenue from research and development contracts as the contracted services are performed or when milestones are achieved, in accordance with the terms of the specific agreements and when collection of the payment is reasonably assured. In addition, the performance criteria for the achievement of milestones are met if substantive effort was required to achieve the milestone and the amount of the milestone payment appears reasonably commensurate with the effort expended. Amounts received in advance of the recognition criteria being met, if any, are included in deferred income.

   
 

IntelGenx has license agreements that specify that certain royalties are earned by the Company on sales of licensed products in the licensed territories. Licensees usually report sales and royalty information in the 45 days after the end of the quarter in which the activity takes place and typically do not provide forward estimates or current-quarter information. Because the Company is not able to reasonably estimate the amount of royalties earned during the period in which these licensees actually ship products, royalty revenue is not recognized until the royalties are reported to the Company and the collection of these royalties is reasonably assured.

   
 

In August 2010 the Company entered into a joint development and commercialization agreement with RedHill Biopharma (“RedHill”), an Israeli company, for an anti-migraine product based upon the Company’s VersaFilm™ technology. In accordance with the terms of the agreement, RedHill made up-front and milestone payments in the aggregate amount of $600 thousand, of which $100 thousand was received by the Company in 2012 upon production of pivotal batches. RedHill is required to make additional milestone payments of up to $700,000 as follows:

   
 

$200 thousand upon the filing of an NDA and acceptance of the filing by the U.S. Food and Drug Administration; and

   
 

$500 thousand upon receipt of U.S. Food and Drug Administration marketing approval for the product.

   
 

Product Sales:

   
 

The Company launched Forfivo XL™ in the USA in October 2012 under a licensing partnership with Edgemont Pharmaceuticals LLP (“Edgemont”). Under the terms of the agreement with Edgemont, the commercial launch of Forfivo XL™ triggered launch-related milestone payments for IntelGenx of up to $4.0 million, of which $1 million was invoiced by the Company to Edgemont and recognized as revenue in the fourth quarter of 2012 and the cash received in February 2013. Additional milestones of up to a further $23.5 million are payable upon achieving certain sales and exclusivity targets and the Company expects to commence receiving royalties from sales of the product in the first quarter of 2013.

   
 

Upon entering into the licensing agreement, Edgemont paid the Company an upfront fee of $1 million, which the Company recognized as deferred license revenue. The deferred license revenue will be amortized in income over the period where sales of Forfivo XL™ are expected to be exclusive. As a result of this policy, the Company has a deferred revenue balance of $923 thousand at December 31, 2012 that has not been recognized as revenue.

 

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, the investment tax credits receivable, the determination of the fair value of warrants issued as part of fundraising activities, and the resulting impact on the allocation of the proceeds between the common shares and the warrants.

   
 

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.

   
 

Financial Instruments

   
 

The Company estimates the fair value of its financial instruments based on current interest rates, market value and pricing of financial instruments with comparable terms. Unless otherwise indicated, the carrying value of these financial instruments approximates their fair value.

   
 

Cash and Cash Equivalents

   
 

Cash and cash equivalents is comprised of cash on hand and term deposits with original maturity dates of less than three months that are stated at cost, which approximates fair value.

   
 

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. In the first quarter of 2011, the Company wrote-off a receivable in the amount of $53 thousand that was owed to the Company by Circ Pharma Limited, Ireland, which was deemed to be no longer collectible. The Company 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, 2012 accounts receivable (2011 - $Nil). The accounts receivable balance of $1,282 thousand as at December 31, 2012 includes $1 million from Edgemont that was received by IntelGenx in February 2013.

 

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.

   
 

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 equipment 20%
         Computer equipment 30%
     
  On the straight-line method -  
     
         Leasehold improvements over the lease term
         Manufacturing equipment 5 – 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.

Intangible Assets

Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in other intangibles, net of accumulated amortization.

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 thereof.

 

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 estimates its forfeiture rate in order to determine its compensation expense arising from stock-based awards. 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 505-50, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital. For common stock issuances to non-employees that are fully vested and are for future periods, the Company classifies these issuances as prepaid expenses and expenses the prepaid expenses over the service period. At no time has the Company issued common stock for a period that exceeds one year.

 

 

 

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 new 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. There are no assets or liabilities measured at fair value as at December 31, 2012.

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

In December 2011, the FASB issued Update No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities”. The objective of this Update is to provide enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either Section 210-20-45 or Section 815-10-45. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Retrospective disclosure is required for all comparative periods presented. The Company is currently evaluating the impact of this Statement on its consolidated financial statements.

 

In December 2011, the FASB issued Update No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”. The amendments in this Update supersede changes to those paragraphs in Update 2011-05 that pertain to how, when, and where reclassification adjustments are presented. The adoption of this amendment is not expected to have a material effect on the Company’s financial position or results of operations, but will affect the presentation of Other Comprehensive Income in the Company’s financial statements.

   
Significant Accounting Policies (Tables)
Schedule of Estimated Useful Lives of Leasehold Improvements and Equipment [Table Text Block]
  On the declining balance method -  
     
         Laboratory and office equipment 20%
         Computer equipment 30%
     
  On the straight-line method -  
     
         Leasehold improvements over the lease term
         Manufacturing equipment 5 – 10 years
Leasehold Improvements and Equipment (Tables)
Schedule of Leasehold Improvements and Equipment [Table Text Block]
                  2012     2011  
  In US$ thousands         Accumulated     Net Carrying     Net Carrying  
      Cost     Depreciation     Amount     Amount  
                           
  Manufacturing equipment $ 225   $ 0   $ 225   $ 0  
  Laboratory and office equipment   418     265     153     138  
  Computer equipment   43     34     9     11  
  Leasehold improvements   63     63     0     0  
                           
    $ 749   $ 362   $ 387   $ 149  
Commitments (Tables)
Schedule of future minimum payments under operating leases [Table Text Block]
2013   15  
2014   0  
Total $ 15  
Capital Stock (Tables)
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Schedule of Stock by Class [Table Text Block]
      March 31,     December 31,  
      2013     2012  
  Authorized -            
  100,000,000 common shares of $0.00001 par value            
  20,000,000 preferred shares of $0.00001 par value            
  Issued -            
  50,302,921 (December 31, 2012 - 49,890,421) common shares $ 503   $ 499  
Schedule of Stock by Class [Table Text Block]
      2012     2011  
  Authorized -            
  100,000,000 common shares of $0.00001 par value            
    20,000,000 preferred shares of $0.00001 par value            
  Issued -            
    49,890,421 (December 31, 2011 - 48,895,028) common shares $ 499   $ 489  
Income Tax (Tables)
      2012     2011  
  Statutory income taxes $ (605 ) $ (694 )
  Net operating losses for which no tax benefits have been recorded   368     514  
  Excess of depreciation over capital cost allowance   3     (2 )
  Non-deductible expenses   18     4  
  Undeducted research and development expenses   273     231  
  Tax deductible portion of transaction costs   -     -  
  Investment tax credit   (57 )   (53 )
  Modification of warrants terms   -     -  
               
               
    $ -   $   -  
      2012     2011  
               
  Leasehold Improvements and equipment $ 13   $ 14  
  Net operating losses carryforward   2,278     2,140  
  Undeducted research and development expenses   1,301     1,141  
  Non-refundable tax credits carryforward   914     807  
               
               
      4,506     4,102  
               
  Valuation allowance   (4,506 )   (4,102 )
               
    $ -   $   -  
Statement of Cash Flows Information (Tables)
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]
  In US$ thousands   2012     2011  
               
  Additional Cash Flow Information:            
               
  Interest paid $ 3   $ 3  
Nature of Business (Narrative) (Details)
12 Months Ended
Dec. 31, 2012
Nature Of Business 1
Nature Of Business 2
Nature Of Business 3
Significant Accounting Policies (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2012
D
Significant Accounting Policies 1
45 
Significant Accounting Policies 2
$ 600,000 
Significant Accounting Policies 3
100,000 
Significant Accounting Policies 4
700,000 
Significant Accounting Policies 5
200,000 
Significant Accounting Policies 6
500,000 
Significant Accounting Policies 7
4,000,000 
Significant Accounting Policies 8
1,000,000 
Significant Accounting Policies 9
23,500,000 
Significant Accounting Policies 10
1,000,000 
Significant Accounting Policies 11
923,000 
Significant Accounting Policies 12
53,000 
Significant Accounting Policies 13
Significant Accounting Policies 14
1,282,000 
Significant Accounting Policies 15
$ 1,000,000 
Significant Accounting Policies 16
50.00% 
Intangible Assets (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2013
M
Dec. 31, 2012
M
Intangible Assets 1
$ 106 
 
Intangible Assets 2
116 
 
Intangible Assets 3
100.00% 
 
Intangible Assets 4
39 
 
Intangible Assets 1
 
116,000 
Intangible Assets 2
 
$ 125,000 
Intangible Assets 3
 
100.00% 
Intangible Assets 4
 
39 
Deferred License Revenue (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2013
M
Dec. 31, 2012
M
Deferred License Revenue 1
$ 1,000,000 
 
Deferred License Revenue 2
39 
 
Deferred License Revenue 3
847 
 
Deferred License Revenue 1
 
1,000,000 
Deferred License Revenue 2
 
39 
Deferred License Revenue 3
 
$ 923,000 
Commitments (Narrative) (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
USD ($)
Y
Dec. 31, 2012
CAD ($)
Commitments 1
3,500 
3,500 
Commitments 2
6,425 
6,425 
Commitments 3
6,410 
6,410 
Commitments 4
6,420 
6,420 
Commitments 5
28,600 
28,600 
Commitments 6
10 
10 
Commitments 7
$ 4 
 
Commitments 8
 
Commitments 9
 
Commitments 10
 
Commitments 11
 
Commitments 12
$ 2 
 
Commitments 13
10.00% 
10.00% 
Capital Stock (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2012
M
Capital Stock 1
4,800,000 
Capital Stock 2
2,400,000 
Capital Stock 3
$ 3,200,000 
Capital Stock 4
0.74 
Capital Stock 5
36 
Capital Stock 6
2,024,000 
Capital Stock 7
2,582,536 
Capital Stock 8
1,291,268 
Capital Stock 9
1,700,000 
Capital Stock 10
2,238,806 
Capital Stock 11
1,119,403 
Capital Stock 12
1,500,000 
Capital Stock 13
121,000 
Capital Stock 14
7.00% 
Capital Stock 15
28,000 
Capital Stock 16
180,778 
Capital Stock 17
7.00% 
Capital Stock 18
105,000 
Capital Stock 19
7.00% 
Capital Stock 20
156,716 
Capital Stock 21
7.00% 
Capital Stock 22
0.74 
Capital Stock 23
36 
Capital Stock 24
114,000 
Capital Stock 25
50,000 
Capital Stock 26
775,000 
Capital Stock 27
50,000 
Capital Stock 28
775,000 
Capital Stock 29
Capital Stock 30
Capital Stock 31
28,000 
Capital Stock 32
318,000 
Capital Stock 33
28,000 
Capital Stock 34
318,000 
Capital Stock 35
219,313 
Capital Stock 36
299,406 
Capital Stock 37
219,313 
Capital Stock 38
299,406 
Capital Stock 39
Capital Stock 40
104,000 
Capital Stock 41
142,000 
Capital Stock 42
104,000 
Capital Stock 43
142,000 
Capital Stock 44
1,205,668 
Capital Stock 45
491,382 
Capital Stock 46
491,382 
Capital Stock 47
Capital Stock 48
233,000 
Capital Stock 49
233,000 
Capital Stock 50
714,286 
Capital Stock 51
234,698 
Capital Stock 52
Capital Stock 53
4,366,904 
Capital Stock 54
2,902,618 
Capital Stock 55
2,902,618 
Capital Stock 56
Capital Stock 57
1,458,000 
Capital Stock 58
1,458,000 
Capital Stock 59
1,464,286 
Capital Stock 60
515,391 
Capital Stock 61
$ 0 
Income Tax (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Income Tax 1
$ 4,102 
Income Tax 2
404 
Income Tax 3
8,390 
Income Tax 4
7,608 
Income Tax 5
8,566 
Income Tax 6
7,437 
Income Tax 7
914 
Income Tax 8
803 
Income Tax 9
24 
Income Tax 10
213 
Income Tax 11
193 
Income Tax 12
186 
Income Tax 13
187 
Income Tax 14
111 
Income Tax 15
4,464 
Income Tax 16
$ 3,656 
Related Party Transactions (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Related Party Transactions 1
$ 2 
 
Related Party Transactions 2
 
Related Party Transactions 3
 
Related Party Transactions 4
 
Related Party Transactions 5
 
Related Party Transactions 6
 
Related Party Transactions 7
22 
 
Related Party Transactions 8
27 
 
Related Party Transactions 9
54 
 
Related Party Transactions 10
 
Related Party Transactions 1
 
6,000 
Related Party Transactions 2
 
4,000 
Related Party Transactions 3
 
6,000 
Related Party Transactions 4
 
4,000 
Related Party Transactions 5
 
23,000 
Related Party Transactions 6
 
10,000 
Related Party Transactions 7
 
114,000 
Related Party Transactions 8
 
87,000 
Related Party Transactions 9
 
85,000 
Related Party Transactions 10
 
1.00% 
Related Party Transactions 11
 
Related Party Transactions 12
 
$ 1,000 
Subsequent Events (Narrative) (Details)
3 Months Ended 12 Months Ended
Mar. 31, 2013
USD ($)
Mar. 31, 2013
CAD ($)
Dec. 31, 2012
USD ($)
Subsequent Events 1
680,000 
680,000 
 
Subsequent Events 2
480,000 
480,000 
 
Subsequent Events 3
200,000 
200,000 
 
Subsequent Events 4
 
$ 0.67 
 
Subsequent Events 5
0.65 
 
 
Subsequent Events 6
25.00% 
25.00% 
 
Subsequent Events 7
37,500 
37,500 
 
Subsequent Events 8
995,500 
995,500 
 
Subsequent Events 9
995,500 
995,500 
 
Subsequent Events 10
 
 
Subsequent Events 11
472 
 
 
Subsequent Events 12
472 
 
 
Subsequent Events 1
 
 
362,500 
Subsequent Events 2
 
 
362,500 
Subsequent Events 3
 
 
Subsequent Events 4
 
 
172,000 
Subsequent Events 5
 
 
$ 172,000 
Schedule of Estimated Useful Lives of Leasehold Improvements and Equipment (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Provisions for depreciation 1
20.00% 
Provisions for depreciation 2
30.00% 
Provisions for depreciation 3
$ 5 
Provisions for depreciation 4
10 
Schedule of Leasehold Improvements and Equipment (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 1
$ 225 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 2
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 3
225 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 4
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 5
418 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 6
265 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 7
153 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 8
138 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 9
43 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 10
34 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 11
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 12
11 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 13
63 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 14
63 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 15
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 16
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 17
749 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 18
362 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 19
387 
Leasehold Improvements And Equipment Schedule Of Leasehold Improvements And Equipment 20
$ 149 
Schedule of future minimum payments under operating leases (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Commitments Schedule Of Future Minimum Payments Under Operating Leases 1
$ 15 
Commitments Schedule Of Future Minimum Payments Under Operating Leases 2
Commitments Schedule Of Future Minimum Payments Under Operating Leases 3
$ 15 
Schedule of Stock by Class (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Capital Stock Schedule Of Stock By Class 1
$ 0 
 
Capital Stock Schedule Of Stock By Class 2
100,000,000 
 
Capital Stock Schedule Of Stock By Class 3
0.00001 
 
Capital Stock Schedule Of Stock By Class 4
20,000,000 
 
Capital Stock Schedule Of Stock By Class 5
0.00001 
 
Capital Stock Schedule Of Stock By Class 7
50,302,921 
 
Capital Stock Schedule Of Stock By Class 8
49,890,421 
 
Capital Stock Schedule Of Stock By Class 9
503 
 
Capital Stock Schedule Of Stock By Class 10
499 
 
Capital Stock Schedule Of Stock By Class 1
 
100,000,000 
Capital Stock Schedule Of Stock By Class 2
 
0.00001 
Capital Stock Schedule Of Stock By Class 3
 
20,000,000 
Capital Stock Schedule Of Stock By Class 4
 
0.00001 
Capital Stock Schedule Of Stock By Class 5
 
49,890,421 
Capital Stock Schedule Of Stock By Class 6
 
48,895,028 
Capital Stock Schedule Of Stock By Class 7
 
499 
Capital Stock Schedule Of Stock By Class 8
 
$ 489 
Schedule of Stock Options Valuation - May 12, 2011 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Stock Options Valuation - May 12, 2011 1
115.00% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - May 12, 2011 2
3.1 
Additional Paid-in Capital Schedule Of Stock Options Valuation - May 12, 2011 3
0.96% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - May 12, 2011 4
$ 0 
Schedule of Stock Options Valuation - November 29, 2011 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Stock Options Valuation - November 29, 2011 1
101.00% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - November 29, 2011 2
3.1 
Additional Paid-in Capital Schedule Of Stock Options Valuation - November 29, 2011 3
0.40% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - November 29, 2011 4
$ 0 
Schedule of Stock Options Valuation - June 13, 2012 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Stock Options Valuation - June 13, 2012 1
83.00% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - June 13, 2012 2
3.1 
Additional Paid-in Capital Schedule Of Stock Options Valuation - June 13, 2012 3
0.40% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - June 13, 2012 4
$ 0 
Schedule of Stock Options Valuation - August 8, 2012 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Stock Options Valuation - August 8, 2012 1
81.00% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - August 8, 2012 2
1.8 
Additional Paid-in Capital Schedule Of Stock Options Valuation - August 8, 2012 3
0.38% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - August 8, 2012 4
$ 0 
Schedule of Stock Options Valuation - December 4, 2012 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 4, 2012 1
78.00% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 4, 2012 2
3.1 
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 4, 2012 3
0.34% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 4, 2012 4
$ 0 
Schedule of Stock Options Valuation - December 12, 2012 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 12, 2012 1
70.00% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 12, 2012 2
1.8 
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 12, 2012 3
0.25% 
Additional Paid-in Capital Schedule Of Stock Options Valuation - December 12, 2012 4
$ 0 
Schedule of Stock Option Activity (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Additional Paid-in Capital Schedule Of Stock Option Activity 1
$ 1,698,088 
Additional Paid-in Capital Schedule Of Stock Option Activity 2
0.53 
Additional Paid-in Capital Schedule Of Stock Option Activity 3
290,000 
Additional Paid-in Capital Schedule Of Stock Option Activity 4
0.54 
Additional Paid-in Capital Schedule Of Stock Option Activity 5
(150,000)
Additional Paid-in Capital Schedule Of Stock Option Activity 6
(0.76)
Additional Paid-in Capital Schedule Of Stock Option Activity 7
(65,000)
Additional Paid-in Capital Schedule Of Stock Option Activity 8
(0.59)
Additional Paid-in Capital Schedule Of Stock Option Activity 9
(775,000)
Additional Paid-in Capital Schedule Of Stock Option Activity 10
(0.41)
Additional Paid-in Capital Schedule Of Stock Option Activity 11
998,088 
Additional Paid-in Capital Schedule Of Stock Option Activity 12
0.59 
Additional Paid-in Capital Schedule Of Stock Option Activity 13
195,000 
Additional Paid-in Capital Schedule Of Stock Option Activity 14
0.57 
Additional Paid-in Capital Schedule Of Stock Option Activity 15
(45,000)
Additional Paid-in Capital Schedule Of Stock Option Activity 16
(0.49)
Additional Paid-in Capital Schedule Of Stock Option Activity 17
(32,500)
Additional Paid-in Capital Schedule Of Stock Option Activity 18
(1.15)
Additional Paid-in Capital Schedule Of Stock Option Activity 19
(50,000)
Additional Paid-in Capital Schedule Of Stock Option Activity 20
(0.55)
Additional Paid-in Capital Schedule Of Stock Option Activity 21
$ 1,065,588 
Additional Paid-in Capital Schedule Of Stock Option Activity 22
0.58 
Schedule of Share-based Compensation, Stock Options, and Warrants or Rights Activity (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 1
0.31 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 2
$ 25,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 3
1.25 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 4
0.31 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 5
25,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 6
0.31 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 7
0.37 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 8
75,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 9
2.67 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 10
0.37 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 11
75,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 12
0.37 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 13
0.45 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 14
0.47 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 15
175,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 16
1.42 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 17
0.46 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 18
175,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 19
0.46 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 20
0.51 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 21
40,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 22
4.50 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 23
0.51 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 24
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 25
0.00 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 26
0.52 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 27
0.54 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 28
270,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 29
3.89 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 30
0.54 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 31
147,500 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 32
0.54 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 33
0.55 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 34
50,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 35
2.67 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 36
0.55 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 37
12,500 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 38
0.55 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 39
0.60 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 40
55,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 41
5.00 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 42
0.60 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 43
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 44
0.00 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 45
0.61 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 46
125,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 47
1.51 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 48
0.61 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 49
125,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 50
0.61 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 51
0.62 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 52
50,000 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 53
3.00 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 54
0.62 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 55
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 56
0.00 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 57
0.85 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 58
200,588 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 59
0.63 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 60
0.85 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 61
200,588 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 62
0.85 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 63
1,065,588 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 64
2.60 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 65
0.58 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 66
114,050 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 67
760,588 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 68
0.59 
Additional Paid-in Capital Schedule Of Share-based Compensation, Stock Options, And Warrants Or Rights Activity 69
$ 86,725 
Schedule of Warrants Valuation - June 21, 2011 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 1
117.00% 
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 2
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 3
0.69% 
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 4
$ 0 
Schedule of Warrants Valuation - June 21, 2011 (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Y
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 1
117.00% 
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 2
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 3
0.69% 
Additional Paid-in Capital Schedule Of Warrants Valuation - June 21, 2011 4
$ 0 
Schedule of Stockholders' Equity Note, Warrants or Rights, Activity (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 1
$ 21,291,223 
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 2
0.66 
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 3
2,748,165 
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 4
0.74 
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 5
(299,406)
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 6
(0.47)
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 7
(4,366,904)
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 8
(0.51)
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 9
19,373,078 
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 10
0.71 
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 11
(219,313)
Additional Paid-in Capital Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 12
(0.47)