5.	Stockholders' Equity

Authorized capital stock

The Company’s authorized capital stock consists of an unlimited number of shares of no par common stock.

Equity financings

On November 22, 2013, the Company completed the closing of non-brokered private placement of 1,333 units for gross proceeds of $1,600. Each unit was issued at a price of $1.20 per unit and consisted of one common share of the Company and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one common share at a price of $1.50 per share for a period of five years from the date of issuance.

On December 3, 2014, the Company completed the closing of a non-brokered private placement of 732 units for gross proceeds of $2,197. Each unit was issued at a price of $3.00 per unit and consisted of one common share of the Company and one half of a common share purchase warrant. Each whole warrant entitles the holder thereof to purchase one common share of the Company during the period ending on the day following the earlier of: (A) the day that is two years from the date of issue or (B) if at any time from the date of issue (i) the common shares trade on the Toronto Stock exchange (the “TSX”) at a price greater than CAD$5.00 per common share (subject to customary adjustments) for at least twenty-five (25) trading days within any thirty (30) trading day period (the “Triggering Event”) and (ii) the Company elects to deliver a notice to the holder within ten (10) trading days of the Triggering Event, the day that is 30 days after such notice, in either event at a price equal to $3.60 per whole common share.

Warrants to Purchase Common Stock

During the quarter ended June 30, 2015, the Company had 1,307 warrants expire on April 30, 2015. These warrants were originally issued April 30, 2010 and had a weighted average exercise price of CAD$4.32. The expiration of these Canadian denominated warrants represents a reduction in the amount of derivative securities which the Company presents at each balance sheet date.

The Company also had exercises of warrants which resulted in the issuance of 299 new common shares and net cash to the Company of $449. These exercised warrants were originally issued April 30, 2010.

At June 30, 2015, the Company had the following warrants outstanding to purchase common stock priced in Canadian dollars with a weighted average exercise price of CAD$4.32 and a weighted average remaining life of 0.75 years. The Company also had warrants outstanding to purchase common stock priced in U.S. dollars with a weighted average price of $1.93 and a weighted average remaining life of 2.88 years:

Warrant	Common Shares Issuable Upon Exercise of		Exercise Price
Description	Outstanding Warrants at June 30, 2015		$CAD/$USD		Expiration Date
Investor warrants⁽¹⁾		821	$	4.32 CAD	March 29, 2016
Investor warrants⁽²⁾		74	$	1.50 USD	March 29, 2016
Investor warrants⁽³⁾		1,333	$	1.50 USD	November 22, 2018
Investor warrants⁽⁴⁾		366	$	3.60 USD	December 3, 2016
Total		2,594

(1) On March 29, 2011, the Company announced that it had completed a non-brokered rights offering of 84,559 units, at a price of CAD$0.03 per unit for total net proceeds of CAD$2,547. Each unit consisted of one common share and one common share purchase warrant. As a result of the share consolidations, each fifty-four (54) warrants now entitle the holder thereof to purchase one common share of the Company at a purchase price of CAD$4.32 per whole share for a period of five years from the issue date.

(2) On June 30, 2014, the Company announced a tender offer to exchange all Canadian denominated warrants with an expiration date of March 29, 2016 for a new warrant. New warrants could be obtained by exchanging one hundred eighty (180) original warrants. New warrants would expire March 29, 2016 and have a strike price of $0.50. As a result of the September 3, 2014 share consolidation, three new warrants entitle the holder to purchase one common share at a price of $1.50.

(3) On November 22, 2013, the Company announced it had completed the closing of a non-brokered private placement of 4,000 units, at a price of $0.40 per unit for net gross proceeds of $1,600. Each unit consisted of one common share of the Company and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one common share of the Company at a price of $0.50 per share for a period of five years from the date of issuance. As a result of the September 3, 2014 share consolidation, each three (3) warrants now entitle the holder thereof to purchase one common share of the Company at a purchase price of $1.50 per whole share for a period of five years from the issue date.

(4) On December 3, 2014, the Company completed the closing of a non-brokered private placement of 732 units for gross proceeds of $2,197. Each unit was issued at a price of $3.00 per unit and consisted of one common share of the Company and one half of a common share purchase warrant. Each whole warrant entitles the holder thereof to purchase one common share of the Company during the period ending on the day following the earlier of: (A) the day that is two years from the date of issue or (B) if at any time from the date of issue (i) the common shares trade on the TSX at a price greater than CAD$5.00 per common share (subject to customary adjustments) for at least twenty-five (25) trading days within any thirty (30) trading day period (the “Triggering Event”) and (ii) the Company elects to deliver a notice to the holder within ten (10) trading days of the Triggering Event, the day that is 30 days after such notice, in either event at a price equal to 3.60 per whole common share. Proceeds from this transaction were allocated between common shares and the warrants based on their relative fair value.

Stock option plan

The Compensation Committee of the Board of Directors administers the Company’s stock option plan. The Compensation Committee designates eligible participants to be included under the plan and approves the number of options to be granted from time to time under the plan. On June 24, 2010, at the Company’s annual meeting, shareholders approved an amendment to the Company’s Stock Option Plan (the “Plan Maximum Amendment”). The Plan Maximum Amendment relates to changing the maximum number of shares of common stock issuable under the stock option plan from a fixed number of 6,666 to the number of shares that represent twenty five percent (25%) of the total number of all issued and outstanding shares of common stock from time to time. Based upon the current shares outstanding, a maximum of 2,730 options are authorized for issuance under the plan. The option exercise price for all options issued under the plan is based on the fair value of the underlying shares on the date of grant. All options vest within three years or less and are exercisable for a period of seven years⁽¹⁾ from the date of grant. The stock option plan, as amended, allows the issuance of Canadian and U.S. dollar grants. The table below outlines recognized contractor and employee expense for the three and six month periods ended June 30, 2015 and 2014.

	Three Months Ended June 30,				Six Months Ended June 30,
Gain/(Loss) on Derivative Instruments	2015		2014		2015		2014
Contractor options expense recognized		-		-		-		129
Employee options expense recognized		10		339		19		472
Total option expense recognized		10		339		19		601

(1) December 31, 2014 Grant to a contractor was exercisable for a period of two years. Grant expense was calculated by same method as all other options with the exception of a two year, versus seven year expiration. The expected dividend rate used was 0%, risk-free rate of interest was 0.67% and the calculated 2 year volatility was 125%.

Stock option activity

The following is a summary of option activity for the six months ended June 30, 2015 for stock options denominated in Canadian dollars:

	Number of	Weighted-Average
Canadian Denominated Options	Options (thousands)	Exercise Price $CAD
Outstanding at December 31, 2014	1,338	$	2.38
Exercised	(10)		2.04
Forfeited	-		-
Expired	-		-
Outstanding at March 31, 2015	1,328	$	2.39
Exercised	-		-
Forfeited	(1)		1.82
Expired	-		-
Outstanding at June 30, 2015	1,327	$	2.38

Canadian dollar denominated options issued to contractors vest immediately and are treated as derivative liabilities. They are recorded at fair value estimated using the Black-Scholes model with the gain or loss reported as unrealized gain (loss).

Upon exercise, expiration or forfeiture of those options denominated in Canadian dollars and treated as derivative liabilities the Company re-measures the derivative liability prior to exercise, expiration or forfeiture and records a gain or loss accordingly. In the case a derivative option is exercised, upon the exercise date, the Company extinguishes the derivative liability, records the cash received and the shares issued into common stock and additional paid in capital accordingly. There were no exercises of Canadian dollar denominated options treated as derivative liabilities during the three month period ended June 30, 2015. For the six month period ended June 30, 2015, there were exercises of Canadian dollar denominated options treated as derivative liabilities. These exercises resulted in 10 shares being issued and cash received of $17.

The following is a summary of option activity for the six months ended June 30, 2015 for stock options denominated in U.S. dollars (all exercisable and fully vested at grant date):

	Number of	Weighted-Average
U.S. Dollar Denominated Options	Options (thousands)	Exercise Price $USD
Outstanding at December 31, 2014	1,072	$	1.77
Granted	4		2.51
Exercised	(17)		0.60
Forfeited	-		-
Expired	-		-
Outstanding at March 31, 2015	1,059	$	1.80
Granted	4		2.30
Exercised	-		-
Forfeited	(2)		0.54
Expired	(1)		15.66
Outstanding at June 30, 2015	1,060	$	1.78

There were no exercises of U.S. dollar denominated options during the three month period ended June 30, 2015. For the six month period ended June 30, 2015, there were exercises of U.S. dollar denominated options. These exercises resulted in 17 shares being issued and cash received of $10.

Valuation assumptions

For the three-months ended March 31, 2015 and the six-months ended June 30, 2015, the value of options granted were estimated using the Black-Scholes option pricing model using the following assumptions: expected dividend 0%; risk-free interest rate of 1.90% and 2.00%, respectively; expected volatility of 127% and 139%, respectively; and a 7 year expected life. The expected volatility was determined using historical volatility of our stock based on the contractual life of the award.