4.	Derivative Instruments

The Company's outstanding warrants denominated in Canadian dollars are not considered to be indexed to its own stock because the exercise price is denominated in Canadian dollars and the Company's functional currency is United States dollars. Therefore, these warrants have been treated as derivative financial instruments and recorded at their fair value as a liability. All other outstanding convertible instruments are considered to be indexed to the Company's stock, because their exercise price is denominated in the same currency as the Company's functional currency, and are included in stockholders' equity.

The Company's derivative instruments include options to purchase 39 common shares, the exercise prices for which are denominated in a currency other than the Company's functional currency, as follows:

Contractor options to purchase 20 common shares exercisable at CAD$1.89 per whole common share that expire on November 19, 2017;

Contractor options to purchase 17 common shares exercisable at CAD$1.62 per whole common share that expire on April 4, 2018;

Contractor options to purchase 2 common shares exercisable at CAD$2.43 per whole common share that expire on May 18, 2018.

These options have been recorded at their fair value as a liability at issuance and will continue to be re-measured at fair value as a liability at each subsequent balance sheet date until they are exercised, forfeited or expire. Any change in value between reporting periods will be recorded as unrealized gain/(loss). The fair value of these warrants and options is estimated using the Black-Scholes option-pricing model using the following assumptions for the current balance sheet date: expected dividend 0%; risk-free interest rate 0.76%; expected volatility between 97% - 100%; and an expected life between 0.5 – 0.63 years.

Comparative data related to gain/(loss) recorded on re-measurement of the derivative liability for the three and nine month period ended September 30, 2017 and 2016 are summarized in the table below. There is no cash flow impact for these derivatives until the warrants and/or options are exercised. If these warrants or options are exercised, the Company will receive the proceeds from the exercise at the current exchange rate at the time of exercise.

During the fiscal years ended December 31, 2011 and 2010, the Company issued 36 and 29, respectively, options to contractors with a Canadian dollar denominated strike price. Consequently, the Company now has derivatives relating to these options since the strike price is denominated in a currency other than the US dollar functional currency of the Company. While there is an exception to this rule for employees in ASU 2010-13 "Compensation-Stock Compensation (Topic 718): Effect of denominating the exercise price of a share based payment award in the currency of the market in which the underlying equity security trades", no such exception exists for contractors. These options will be marked to market until the earlier of their expiry, exercise or forfeiture.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Gain/(Loss) on Derivative Instruments	2017		2016		2017		2016
Derivatives expired March 29, 2016	$	-	$	-	$	-	$	41
Options to contractors		(183)		19		(340)		4
Gain/(loss) on Derivative Instruments	$	(183)	$	19	$	(340)	$	45

The table below summarizes Canadian dollar denominated contractor option activity, during the interim period:

Contractor Options in $CAD	Three Month Period		Nine Month Period		Weighted-Average
Options in Thousands	Ending September 30, 2017				Exercise Price
Opening balance		39		40	$	1.81
Exercised		-		(1)		2.05
Forfeited		-		-		-
Expired		-		-		-
Ending balance		39		39	$	1.80

Canadian dollar denominated options issued to contractors vest immediately and are treated as derivative liabilities. 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. During the three and nine month period ended September 30, 2017, there was an exercise of 1 Canadian denominated option being treated as a derivative liability. This exercise resulted in $2 gross proceeds to the Company.