As
at
|
As
at
|
||||||
(amounts
in 000's)
|
November
30, 2006
|
May
31, 2006
|
|||||
(Canadian
dollars)
|
(Unaudited)
|
(Audited)
|
|||||
ASSETS
|
|||||||
Current
|
|||||||
Cash
and cash equivalents
|
$
|
7,040
|
$
|
2,692
|
|||
Marketable
securities and other investments (note 4)
|
2,848
|
5,627
|
|||||
Prepaid
expenses and other assets
|
785
|
515
|
|||||
10,673
|
8,834
|
||||||
Long-term
|
|||||||
Marketable
securities and other investments (note 4)
|
5,686
|
-
|
|||||
Fixed
assets
|
685
|
885
|
|||||
Deferred
financing charges
|
429
|
481
|
|||||
Goodwill
|
606
|
606
|
|||||
Acquired
patents and licenses
|
-
|
655
|
|||||
7,406
|
2,627
|
||||||
$
|
18,079
|
$
|
11,461
|
||||
LIABILITIES
|
|||||||
Current
|
|||||||
Accounts
payable
|
$
|
584
|
$
|
555
|
|||
Accrued
liabilities (note 5)
|
2,046
|
2,460
|
|||||
2,630
|
3,015
|
||||||
Long-term
|
|||||||
Secured
convertible debentures (note 6)
|
11,448
|
11,002
|
|||||
SHAREHOLDERS'
EQUITY
|
|||||||
Common
shares (note 2)
|
157,190
|
145,001
|
|||||
Equity
portion of secured convertible debentures
|
3,814
|
3,814
|
|||||
Stock
options (note 3(c))
|
4,743
|
4,525
|
|||||
Contributed
surplus (note 2(e))
|
7,702
|
7,665
|
|||||
Warrants
(note 2)
|
991
|
991
|
|||||
Deficit
accumulated during development stage
|
(170,439
|
)
|
(164,552
|
)
|
|||
4,001
|
(2,556
|
)
|
|||||
$
|
18,079
|
$
|
11,461
|
Period
|
||||||||||||||||
Three
|
Three
|
Six
|
Six
|
from
inception
|
||||||||||||
(amounts
in 000's except for per common share data)
|
months
ended
|
months
ended
|
months
ended
|
months
ended
|
Sept.
5, 1986 to
|
|||||||||||
(Canadian
dollars)
|
Nov
30, 2006
|
Nov
30, 2005
|
Nov
30, 2006
|
Nov
30, 2005
|
Nov
30, 2006
|
|||||||||||
REVENUE
|
$
|
23
|
$
|
6
|
$
|
30
|
$
|
7
|
$
|
736
|
||||||
EXPENSES
|
||||||||||||||||
Cost
of sales
|
3
|
1
|
6
|
1
|
93
|
|||||||||||
Research
and development (note 5)
|
1,122
|
2,631
|
2,453
|
6,588
|
112,928
|
|||||||||||
General
and administrative (note 5)
|
1,407
|
1,619
|
2,195
|
2,695
|
49,670
|
|||||||||||
Stock-based
compensation (note 3)
|
150
|
414
|
263
|
705
|
7,013
|
|||||||||||
Depreciation
and amortization of fixed assets
|
100
|
130
|
200
|
260
|
9,023
|
|||||||||||
Operating
expenses
|
2,782
|
4,795
|
5,117
|
10,249
|
178,727
|
|||||||||||
Interest
expense on convertible debentures
|
262
|
209
|
527
|
407
|
1,709
|
|||||||||||
Accretion
in carrying value of convertible debentures
|
227
|
180
|
446
|
366
|
1,662
|
|||||||||||
Amortization
of deferred financing charges
|
27
|
19
|
52
|
39
|
223
|
|||||||||||
Interest
income
|
(158
|
)
|
(95
|
)
|
(225
|
)
|
(210
|
)
|
(11,146
|
)
|
||||||
Loss
for the period
|
3,117
|
5,102
|
5,887
|
10,844
|
170,439
|
|||||||||||
Deficit,
beginning of period
|
167,322
|
152,385
|
164,552
|
146,643
|
-
|
|||||||||||
Deficit,
end of period
|
$
|
170,439
|
$
|
157,487
|
$
|
170,439
|
$
|
157,487
|
$
|
170,439
|
||||||
Basic
and diluted loss per common share
|
$
|
0.01
|
$
|
0.03
|
$
|
0.03
|
$
|
0.06
|
||||||||
Weighted
average number of common shares outstanding used in the calculation
of
basic and diluted loss per share
|
209,992
|
173,110
|
198,261
|
172,911
|
Period
|
||||||||||||||||
Three
|
Three
|
Six
|
Six
|
from
inception
|
||||||||||||
(amounts
in 000's)
|
months
ended
|
months
ended
|
months
ended
|
months
ended
|
Sept.
5, 1986 to
|
|||||||||||
(Canadian
Dollars)
|
Nov
30, 2006
|
Nov
30, 2005
|
Nov
30, 2006
|
Nov
30, 2005
|
Nov
30, 2006
|
|||||||||||
OPERATING
ACTIVITIES
|
||||||||||||||||
Loss
for the period
|
$
|
(3,117
|
)
|
$
|
(5,102
|
)
|
$
|
(5,887
|
)
|
$
|
(10,844
|
)
|
$
|
(170,439
|
)
|
|
Add
items not requiring a current outlay of cash:
|
||||||||||||||||
Stock-based
compensation
|
150
|
414
|
263
|
705
|
7,013
|
|||||||||||
Interest
expense on convertible debentures
|
262
|
209
|
527
|
407
|
1,709
|
|||||||||||
Accretion
in
carrying value of convertible debentures
|
227
|
180
|
446
|
366
|
1,662
|
|||||||||||
Amortization
of
deferred financing charges
|
27
|
19
|
52
|
39
|
223
|
|||||||||||
Depreciation,
amortization and write-down of fixed assets and acquired patents
and
licenses
|
362
|
522
|
855
|
1,045
|
21,584
|
|||||||||||
Other
|
-
|
-
|
-
|
-
|
707
|
|||||||||||
Net
change in non-cash working capital balances related to operations
|
(496
|
)
|
1,398
|
(655
|
)
|
1,113
|
937
|
|||||||||
Cash
used in operating activities
|
(2,585
|
)
|
(2,360
|
)
|
(4,399
|
)
|
(7,169
|
)
|
(136,604
|
)
|
||||||
INVESTING
ACTIVITIES
|
||||||||||||||||
Maturity
(purchase) of marketable securities and other investments,
net
|
(3,661
|
)
|
6,759
|
(2,907
|
)
|
14,988
|
(8,534
|
)
|
||||||||
Business
acquisition, net of cash received
|
-
|
-
|
-
|
-
|
(539
|
)
|
||||||||||
Acquired
patents and licenses
|
-
|
-
|
-
|
-
|
(715
|
)
|
||||||||||
Additions
to fixed assets
|
-
|
(3
|
)
|
-
|
(73
|
)
|
(6,049
|
)
|
||||||||
Cash
proceeds on sale of fixed assets
|
-
|
-
|
-
|
-
|
348
|
|||||||||||
Cash
(used in) provided by investing activities
|
(3,661
|
)
|
6,756
|
(2,907
|
)
|
14,915
|
(15,489
|
)
|
||||||||
FINANCING
ACTIVITIES
|
||||||||||||||||
Issuance
of debentures, of issuance costs
|
-
|
-
|
-
|
-
|
12,948
|
|||||||||||
Issuance
of warrants
|
-
|
-
|
-
|
-
|
37,405
|
|||||||||||
Issuance
of common shares, net
|
-
|
-
|
11,654
|
-
|
109,025
|
|||||||||||
Additions
to deferred financing charges
|
-
|
-
|
-
|
-
|
(245
|
)
|
||||||||||
Cash
provided by financing activities
|
-
|
-
|
11,654
|
-
|
159,133
|
|||||||||||
(Decrease)
increase in cash and cash equivalents during the
period
|
(6,246
|
)
|
4,396
|
4,348
|
7,746
|
7,040
|
||||||||||
Cash
and cash equivalents, beginning of period
|
13,286
|
6,126
|
2,692
|
2,776
|
-
|
|||||||||||
Cash
and cash equivalents, end of period
|
$
|
7,040
|
$
|
10,522
|
$
|
7,040
|
$
|
10,522
|
$
|
7,040
|
(amounts
and units in 000's)
|
Common
Shares
|
Warrants
|
|||||||||||
Number
|
Amount
|
Number
|
Amount
|
||||||||||
Balance
at May 31, 2005
|
172,541
|
$
|
144,119
|
3,000
|
$
|
991
|
|||||||
Interest
payments (b)
|
265
|
198
|
-
|
-
|
|||||||||
Balance
at August 31, 2005
|
172,806
|
$
|
144,317
|
3,000
|
$
|
991
|
|||||||
Interest
payments (b)
|
537
|
209
|
-
|
-
|
|||||||||
Balance
at November 30, 2005
|
173,343
|
$
|
144,526
|
3,000
|
$
|
991
|
|||||||
Interest
payments (b)
|
672
|
224
|
-
|
-
|
|||||||||
Balance
at February 28, 2006
|
174,015
|
$
|
144,750
|
3,000
|
$
|
991
|
|||||||
Interest
payments (b)
|
679
|
251
|
-
|
-
|
|||||||||
Balance
at May 31, 2006
|
174,694
|
$
|
145,001
|
3,000
|
$
|
991
|
|||||||
Equity
issuance (c)
|
33,800
|
11,640
|
-
|
-
|
|||||||||
Interest
payments (b)
|
792
|
265
|
-
|
-
|
|||||||||
Stock
option exercises
|
46
|
22
|
-
|
-
|
|||||||||
Balance
at August 31, 2006
|
209,332
|
$
|
156,928
|
3,000
|
$
|
991
|
|||||||
Interest
payments (b)
|
1,031
|
262
|
-
|
-
|
|||||||||
Balance
at November 30, 2006
|
210,363
|
$
|
157,190
|
3,000
|
$
|
991
|
Year
to date
|
Year
to date
|
||||||
(amounts
in 000's)
|
2007
|
2006
|
|||||
Balance
at beginning of the year
|
$
|
7,665
|
$
|
6,733
|
|||
Forfeiture
of vested options
|
37
|
16
|
|||||
Balance
at end of the period
|
$
|
7,702
|
$
|
6,749
|
Six
months
ended
Nov
30, 2006
(000’s)
|
Weighted
average
exercise
price
six
months
ended
Nov
30, 2006
|
Six
months
ended
Nov
30, 2005
(000’s)
|
Weighted
average
exercise
price
six
months
ended
Nov
30, 2005
|
||||||||||
Outstanding
at beginningof period
|
10,300
|
$
|
0.70
|
8,035
|
$
|
0.96
|
|||||||
Granted
|
5,318
|
$
|
0.30
|
4,044
|
$
|
0.77
|
|||||||
Exercised
|
(46
|
)
|
$
|
0.30
|
―
|
―
|
|||||||
Forfeited
|
(1,506
|
)
|
$
|
0.48
|
(372
|
)
|
$
|
0.84
|
|||||
Outstanding
at end of period
|
14,066
|
$
|
0.55
|
11,707
|
$
|
0.86
|
Three
months
ended
Nov
30, 2006
|
Six
months
ended
Nov
30, 2006
|
Three
months
ended
Nov
30, 2005
|
Six
months
ended
Nov
30, 2005
|
|
Risk
free interest rate
|
4.50%
|
4.50%
|
3.00%
|
2.25
- 3.00%
|
Expected
dividend yield
|
0%
|
0%
|
0%
|
0%
|
Expected
volatility
|
75%
|
75-80%
|
70-80%
|
70-80%
|
Expected
life of options
|
5
years
|
5
years
|
1-5
years
|
1-5
years
|
Weighted
average fair value of options granted or modified in the
period
|
$0.18
|
$0.20
|
$0.22
|
$0.40
|
(amounts
in 000's)
|
2007
|
2006
|
|||||
Balance
at beginning of the year
|
$
|
4,525
|
$
|
4,252
|
|||
Forfeiture
of
vested stock options
|
(16
|
)
|
-
|
||||
Stock
option exercise
|
(8
|
)
|
-
|
||||
Stock
option expense
|
113
|
291
|
|||||
Balance
at August 31,
|
$
|
4,614
|
$
|
4,543
|
|||
Stock
option expense
|
150
|
414
|
|||||
Forfeiture
of
vested stock options
|
(21
|
)
|
(16
|
)
|
|||
Balance
at November 30,
|
$
|
4,743
|
$
|
4,941
|
Less
than
one
year
maturities
|
Greater
than
one
year
maturities
|
Total
|
Yield
to
maturity
|
||||||||||
Fixed
income government investments
|
$
|
2,848
|
$
|
1,559
|
$
|
4,407
|
3.64-3.91
|
%
|
|||||
Corporate
instruments
|
―
|
4,127
|
4,127
|
4.01-4.12
|
%
|
||||||||
Balance
|
$
|
2,848
|
$
|
5,686
|
$
|
8,534
|
Less
than
one
year
maturities
|
Greater
than
one
year
maturities
|
Total
|
Yield
to
maturity
|
||||||||||
Fixed
income government investments
|
$
|
2,838
|
$
|
―
|
$
|
2,838
|
3.55-3.64
|
%
|
|||||
Corporate
instruments
|
2,789
|
―
|
2,789
|
3.46-3.87
|
%
|
||||||||
Balance
|
$
|
5,627
|
$
|
―
|
$
|
5,627
|