0001558370-23-004948 | 10-K | XBRL Viewer | Fennec Pharmaceuticals INC

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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2022	Mar. 27, 2023	Jun. 30, 2022
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Entity File Number	001-32295
Entity Registrant Name	FENNEC PHARMACEUTICALS INC.
Entity Incorporation, State or Country Code	CA
Entity Tax Identification Number	20-0442384
Entity Address, Address Line One	PO Box 13628, 68 TW Alexander Drive
Entity Address, City or Town	Research Triangle Park
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27709
City Area Code	919
Local Phone Number	636-4530
Title of 12(b) Security	Common Shares, no par value
Trading Symbol	FENCF
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,411,520
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0001211583
Amendment Flag	false
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Public Float			$ 98,210,075
ICFR Auditor Attestation Flag	false
Auditor Name	HASKELL & WHITE LLP
Auditor Firm ID	200
Auditor Location	Irvine, California

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 23,774	$ 21,100
Accounts receivable, net	1,545
Prepaid expenses	770	1,034
Inventory	576
Other current assets	63	253
Total current assets	26,728	22,387
Non-current assets
Deferred issuance cost, net amortization	211	27
Total non-current assets	211	27
Total assets	26,939	22,414
Current liabilities:
Accounts payable	2,390	777
Accrued liabilities	2,219	877
Total current liabilities	4,609	1,654
Long term liabilities
Term loan	25,000	5,000
PIK interest	260
Debt discount	(361)	(12)
Total long term liabilities	24,899	4,988
Total liabilities	29,508	6,642
Commitments and Contingencies (Note 6)
Stockholders' deficit:
Common stock, no par value; unlimited shares authorized; 26,361 shares issued and outstanding (2021 26,014)	142,591	140,801
Additional paid-in capital	56,797	53,214
Accumulated deficit	(203,200)	(179,486)
Accumulated other comprehensive income	1,243	1,243
Total stockholders' deficit	(2,569)	15,772
Total liabilities and stockholders' deficit	$ 26,939	$ 22,414

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Common stock, no par value	$ 0
Common stock, shares issued	26,361	26,014
Common stock, shares outstanding	26,361	26,014

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cost of products sold	$ (86)
Gross profit	1,449
Operating expenses:
Research and development	3,531	$ 4,981
Selling and marketing	2,785
General and administrative	17,722	12,242
Total operating expenses	24,038	17,223
Loss from operations	(22,589)	(17,223)
Other (expense)/income
Unrealized foreign exchange loss	(9)	(10)
Amortization expense	(149)	(16)
Unrealized (loss)/gain on securities	(184)	(25)
Interest income	195	54
Interest expense	(978)	(126)
Total other (expense)/income	(1,125)	(123)
Net loss	$ (23,714)	$ (17,346)
Basic net loss per common share	$ (0.90)	$ (0.67)
Diluted net loss per common share	$ (0.90)	$ (0.67)
Weighted-average number of common shares outstanding basic	26,275	26,006
Weighted-average number of common shares outstanding diluted	26,275	26,006
PEDMARK
Revenue	$ 1,535

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital Grantee Status - Employees	Additional Paid-in Capital Grantee Status - Contractors or Consultants	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Grantee Status - Employees	Grantee Status - Contractors or Consultants	Total
Balance at Dec. 31, 2020	$ 140,733			$ 49,234	$ (162,140)	$ 1,243			$ 29,070
Balance (in shares) at Dec. 31, 2020	26,003
Stock options issued		$ 3,749	$ 266				$ 3,749	$ 266
Exercise of stock options	$ 68			(35)					33
Exercise of stock options (in shares)	11
Net loss					(17,346)				(17,346)
Balance at Dec. 31, 2021	$ 140,801			53,214	(179,486)	1,243			15,772
Balance (in shares) at Dec. 31, 2021	26,014
Stock options issued		$ 4,087	$ 133				$ 4,087	$ 133
Exercise of stock options	$ 1,790			(862)					928
Exercise of stock options (in shares)	273
Restricted stock unit release				(216)					(216)
Restricted stock unit release (in shares)	74
Warrants issued to Petrichor				441					441
Net loss					(23,714)				(23,714)
Balance at Dec. 31, 2022	$ 142,591			$ 56,797	$ (203,200)	$ 1,243			$ (2,569)
Balance (in shares) at Dec. 31, 2022	26,361

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Operating activities:
Net loss	$ (23,714)	$ (17,346)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt access fees	132	14
Amortization of debt discount	17	2
Unrealized loss/(gain) on securities	184	25
Stock-based compensation - consultants	133	266
Stock-based compensation - employees	4,087	3,749
Changes in operating assets and liabilities:
Accounts receivables	(1,545)
Prepaid expenses	264	(237)
Inventory	(576)
Other assets	6	(2)
Accounts payable	1,612	(794)
Accrued liabilities	1,342	101
Net cash used in operating activities	(18,058)	(14,222)
Financing activities:
Issuance of shares, options exercise	928	33
Proceeds from long-term debt	24,935	5,000
Long-term debt paid	(5,000)
Debt discount	238	(14)
Cash paid for taxes on restricted share release	(194)
Capitalized deferred issuance costs	(175)	(41)
Net cash provided by financing activities	20,732	4,978
Increase/(decrease) in cash and cash equivalents	2,674	(9,244)
Cash and cash equivalents - Beginning of period	21,100	30,344
Cash and cash equivalents - End of period	23,774	21,100
Non-cash investing and financing activities:
Financed insurance policy	550	$ 466
Warrants issued in connection with term loan	$ 441

Nature of Business and Liquidity

12 Months Ended

Dec. 31, 2022

Nature of Business and Liquidity

Nature of Business and Liquidity

1. Nature of Business and Liquidity

Fennec Pharmaceuticals Inc. (“Fennec,” “the Company,” “we,” “us,” or “our”) was originally formed as a British Columbia corporation under the name Adherex Technologies Inc. and subsequently changed its name on September 3, 2014. Fennec, together with its wholly owned subsidiaries Oxiquant, Inc. (“Oxiquant”) and Fennec Pharmaceuticals, Inc., both Delaware corporations, and Cadherin Biomedical Inc. (“CBI”), a Canadian corporation and Fennec Pharmaceuticals (EU) Limited (“Fennec Limited”), collectively referred to herein as the “Company,” is a biopharmaceutical company with one FDA approved product developed to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors. With the exception of Fennec Pharmaceuticals, Inc., all subsidiaries are inactive.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) that are applicable to a going concern which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

During the year ended December 31, 2022, the Company incurred a net loss from operations of $23,714. At December 31, 2022, it had an accumulated deficit of $203,200 and had experienced negative cash flows from operating activities in the amount of $18,058 for the year ended December 31, 2022.

On August 1, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”) with Petrichor Opportunities Fund I LP (the “Investor”) in connection with the issuance of up to $45,000 of senior secured floating rate convertible notes (the “Notes”), issuable in multiple tranches (the “Note Financing”). On August 19, 2022, the Company closed on the initial tranche of $5,000 (the “First Closing Note”) which has an Initial Conversion Price equal to $8.11 per share, which was calculated based on a 20% premium of the 5-day volume weighted average price of the Company’s common shares as traded on the Nasdaq Capital Market (the “VWAP”) immediately prior to the announcement of the Securities Purchase Agreement (“SPA”) dated August 1, 2022. In connection with the first closing, the Company repaid in full its secured indebtedness with Bridge Bank in the amount of $5,000.

On September 23, 2022, the Company closed on the second tranche of the Note Financing in the amount of $20,000 (the “Second Closing Note”), which has an Initial Conversion Price equal to $7.89 per share, which was calculated based on a 20% premium of the 5-day VWAP immediately prior to September 20, 2022, which was the date the Company obtained FDA approval of PEDMARK^®.

Subsequent to the funding of the Second Closing Note, and before December 31, 2023, the Company may draw up to $20,000 of additional financing under the SPA, in one or more tranches of $10,000 upon mutual agreement of the Company and the Investor (the “Subsequent Closing Notes”). The Subsequent Closing Notes will be convertible at a price per share equal to $7.89 per share, which price is calculated on the same basis as for the Second Closing Note.

A commitment fee of 2.0% of the Notes was payable under the SPA. Half of such fee was paid by the issuance on the first closing of warrants to purchase 55,498 Fennec common shares (“First Closing Warrant”) and half was payable in cash or warrants of 55,498 Fennec common shares (“Second Closing Warrant”), at our election, on the second closing. The warrants are exercisable at a price per share of $8.11 and will have a term of five years from the date of the grant. The Company elected to have all the commitment fee of the Notes payable in warrants.

The Company believes current funds, which include funds from the First Closing Note and the Second Closing Note, provide sufficient funding for the Company to carry out its planned activities, including the continuation of commercialization efforts for at least the next twelve months of PEDMARK^®.

These financial statements do not reflect the potentially material adjustments in the carrying values of assets and liabilities, the reported expenses, and the balance sheet classifications used, that would be necessary if the going concern assumption were not appropriate.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Significant Accounting Policies

Significant Accounting Policies

2. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Fennec and of all its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Significant estimates include revenue recognition, allowance against trade receivables, measurement of stock-based compensation and estimates of the Company’s capital requirement over the next twelve months from the date of issuance of the consolidated financial statements. Actual results could differ from those estimates.

Segment and Geographic Information

Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment principally in the United States. As of December 31, 2022 and 2021, the Company has no net assets located outside of the United States.

Stock-Based Compensation

Under the Company’s stock-based compensation programs, the Company periodically grants stock options and restricted stock to employees, directors and consultants. The Company also issues shares under an employee stock purchase plan. The fair value of each award is recognized in the Company’s statements of operations over the requisite service period for such award.

The Company uses the Black-Scholes option pricing model to value stock option awards without market conditions, which requires the Company to make certain assumptions regarding the expected volatility of its common stock price, the expected term of the option grants, the risk-free interest rate and the dividend yield with respect to its common stock. The Company calculates volatility using its historical stock price data. Due to the lack of the Company’s own historical data, the Company elected to use the “simplified” method for “plain vanilla” options to estimate the expected term of the Company’s stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option. The risk-free interest rate used for each grant is based on the United States Treasury yield curve in effect at the time of grant for instruments with a similar expected life. The Company utilizes a dividend yield of zero based on the fact that the Company has never paid cash dividends and at present, has intention to pay cash dividends.

Inventory

Inventories are valued under a standard costing methodology on a first-in, first-out basis and are stated at the lower of cost or net realizable value. The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of costs. Capitalized costs of inventories mainly include third party manufacturing, logistics and distribution

costs. The Company assesses recoverability of inventory each reporting period to determine any write down to net realizable value resulting from excess or obsolete inventories. The manufacturing costs for PEDMARK^®prior to regulatory approval were not capitalized as inventory but were expensed as research and development costs. The Company expensed pre-launch inventory as it could not reasonably anticipate FDA approval of PEDMARK^®.

Revenue Recognition

Under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration which the Company determines it expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligation(s). As part of the accounting for these arrangements, the Company must make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation.

Net Product Revenue

On September 20, 2022, the FDA approved PEDMARK^® in the United States to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors. PEDMARK^® became commercially available on October 17, 2022. PEDMARK^® is the Company’s first commercial product. The Company sells its products principally through the following specialty distributors: Amerisource Specialty Distribution (“ASD”), McKesson Plasma and Biologics, McKesson Specialty and Cardinal Health Specialty (collectively the "Customers" and each a "Customer"). These Customers subsequently resell the Company’s products to health care providers and patients. In addition to distribution agreements with Customers, the Company enters into arrangements with health care providers and payors that provide for government-mandated and/or privately- negotiated rebates, chargebacks and discounts with respect to the purchase of the Company’s products. Revenues from product sales are recognized when the Customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the Customer.

Product Sales Discounts and Allowances

The Company records revenues from product sales at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established primarily from discounts, chargebacks, rebates, co-pay assistance, returns and other allowances that are offered within contracts between the Company and its Customers, health care providers, payors and other indirect customers relating to the sales of its products. These reserves are based on the amounts to be claimed on the related sales and are classified as a contra-asset or a current liability. Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, forecasted Customer buying and payment patterns, and the Company’s historical experience that will develop over time as PEDMARK^® is the Company’s first commercial product. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of its contracts. The amount of variable consideration that is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known.

Chargebacks: Chargebacks are discounts that occur when contracted customers purchase directly from a specialty distributor. Contracted customers, which currently consist of Public Health Service institutions and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The specialty distributor, in turn, charges back to the Company the difference between the price initially paid by the specialty distributor

and the discounted price paid to the specialty distributor by its contracted customer. The allowance for chargebacks is based on actual chargebacks received and an estimate of sales by the specialty distributor to its contracted customers.

Discounts for Prompt Payment: The Customers receive a discount of 0.65% for prompt payment. The Company expects its Customers will earn 100% of their prompt payment discounts and, therefore, the Company deducts the full amount of these discounts from total product sales when revenues are recognized.

Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program and other government programs. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid. The allowance for rebates is based on statutory or contractual discount rates and expected utilization. The Company’s estimates for the expected utilization of rebates are based on Customer and payer data received from the specialty distributors and historical utilization rates that will develop over time as PEDMARK^® is the Company’s first commercial product. Rebates are generally invoiced by the payor and paid in arrears, such that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s shipments to the Customers, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, the Company may need to adjust its accruals, which would affect net product revenues in the period of adjustment.

Co-payment Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using Customer data provided by the third party that administers the copay program.

Other Customer Credits: The Company pays fees to its Customers for account management, data management and other administrative services. To the extent the services received are distinct from the sale of products to its Customers, the Company classifies these payments in selling, general and administrative expenses in its Consolidated Statements of Operations.

The following table summarizes net product revenues for PEDMARK^® in the United States earned in the years ended December 31, 2022 and 2021, respectively:


		Year Ended
		December 31,		December 31,
In thousands		2022		2021
Product revenues:
Gross product revenues	$	1,769	$	—
Discounts and allowances		(234)		—
Net product revenues	$	1,535	$	—

The following table summarizes the percentage of total product revenues for PEDMARK^® in the United States by any Customer who individually accounted for 10% or more of total product revenues earned in the years ended December 31, 2022 and 2021, respectively:


	Year Ended
	December 31,		December 31,
In thousands	2022		2021
Cardinal Health Specialty	72	%	—	%
ASD	16		—
	88	%	—	%

The activities and ending allowance balances for each significant category of discounts and allowances for PEDMARK^® (which constitute variable consideration) for the year ended December 31, 2022 were as follows:



		Chargebacks,		Rebates, Customer
		Discounts for		Fees/Credits
		Prompt Pay and		and Co-Pay
In thousands		Other Allowances		Assistance		Totals
Balance at December 31, 2021	$	—	$	—	$	—
Provision related to sales made in:
Current period		72		163		235
Prior periods		—		—		—
Payments and customer credits issued		(1)		—		(1)
Balance at December 31 2022	$	71	$	163	$	234

The allowances for chargebacks, fees due to Customers, rebates and discounts for prompt payment are recorded as a contra-asset to accounts receivable, while Medicaid rebates and return allowances are in accrued liabilities in the accompanying Consolidated Balance Sheets.

Trade Receivables

The Company records gross trade receivables at the time of product sale to its Customers. Amounts estimated for the associated chargebacks, cash discounts for prompt payment and any allowances for credit losses are booked as a reserve against accounts receivable and reduction of revenue. The Company considers its historical losses, if any, to estimate credit losses. The Customers are specialty distributors, and accordingly, the Company considers the risk of potential credit losses to be low.

Cost of Products Sold

Cost of products sold is related to the Company's product revenues for PEDMARK^® and consists primarily of product production costs associated with finished goods inventory and royalty (1% of net sales), payments the Company is required to pay to Oregon Health & Science University (“OHSU”) on all net sales of PEDMARK^®. Cost of products sold also consists of shipping and other third-party logistics and distribution costs for the Company’s product. The Company considered regulatory approval of its product candidate to be uncertain and product manufactured prior to regulatory approval could not have been sold unless regulatory approval was obtained. As such, the manufacturing costs for PEDMARK^® incurred prior to regulatory approval were not capitalized as inventory but were expensed as research and development costs. After FDA approval in September 2022, the Company had various lots of PEDMARK^® in various stages of production in connection with the fourth quarter product launch. As of December 31, 2022, the Company capitalized approximately $0.6 million of costs as inventory on the Consolidated Balance Sheet. Of the items capitalized, $0.4 million was capitalized as work in process, $0.2 million was capitalized into finished goods, with $0.1 million of that being reclassified to cost of product sold.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities at the date of purchase of three months or less.

The Company places its cash and cash equivalents in investments held by highly rated financial institutions in accordance with its investment policy designed to protect the principal investment. At December 31, 2022, the Company had $23.8 million in cash and money market accounts (2021- $21.1 million). Money market investments typically have minimal risks. While the Company has not experienced any loss or write-down of its money market investments, the amounts it holds in money market accounts are substantially above the $250,000 amount insured by the FDIC and may lose value.

Financial Instruments

Financial instruments recognized on the balance sheets at December 31, 2022 and December 31, 2021 consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and term loans, the carrying values of which approximate fair value due to their relatively short time to maturity or interest rates that approximate market interest rates. The Company does not hold or issue financial instruments for trading.

The Company’s investment policy is to manage investments to achieve, in the order of importance, the financial objectives of preservation of principal, liquidity and return on investment. Investments, when made, are made in U.S. or Canadian bank securities, commercial paper of U.S. or Canadian industrial companies, utilities, financial institutions and consumer loan companies, and securities of foreign banks provided the obligations are guaranteed or carry ratings appropriate to the policy. Securities must have a minimum Dun & Bradstreet rating of A for bonds or R1 low for commercial paper.

The policy risks are primarily the opportunity cost of the conservative nature of the allowable investments. The Company has chosen to avoid investments of a trading or speculative nature to preserve cash.

Common Shares and Warrants

The Company has 0.2 million warrants with a weighted average strike price of $7.71 outstanding to purchase common shares that were denominated in United States dollars (“USD”) and have a weighted average life of 5.05 years.

Research and Development Costs and Investment Tax Credits

Research costs, including employee compensation, laboratory fees, lab supplies, and research and testing performed under contract by third parties, are expensed as incurred. Development costs, including drug substance costs, clinical study expenses and regulatory expenses are expensed as incurred.

Investment tax credits, which are earned as a result of qualifying research and development expenditures, are recognized when the expenditures are made and their realization is reasonably assured. They are applied to reduce related capital costs and research and development expenses in the year recognized.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents, and accounts receivable. The Company maintains deposits in highly-rated, federally-insured financial institutions in excess of federally insured limits. The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the high credit quality standards outlined in the Company’s investment policy. This policy also limits the amount of credit exposure to any one issue or type of instrument.

The Company’s trade receivables, includes amounts billed to Customers for product sales of PEDMARK^®. The Customers are a limited group of specialty distributors, and accordingly, the Company considers the risk of potential credit losses to be low.

Income Taxes

The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2022, and 2021, we maintained a full valuation allowance against our deferred tax assets.

The provisions of the Financial Accounting Standards Board (“FASB”) ASC 740-10, Uncertainty in Income Taxes, address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10, we may recognize the tax benefit from an uncertain tax position only if it is

more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position.

Foreign Currency Translation

The U.S. dollar is the functional currency for the Company’s consolidated operations. All gains and losses from currency translations are included in results of operations.

Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted net loss per share is computed using the same method, except the weighted average number of common shares outstanding includes convertible debentures, stock options and warrants, if dilutive, as determined using the if-converted method and treasury methods. Accordingly, warrants to purchase 0.2 million of our common shares and options to purchase 4.5 million of our common shares at December 31, 2022, were not included in loss per share. Such options would have an antidilutive effect. In 2021, warrants to purchase 0.04 million of our common shares and options to purchase 4.3 million common shares were excluded from the computation of loss per share as their inclusion would have been antidilutive.

Recent Accounting Pronouncements

In May 2021, the FASB issued Accounting Standards Update ("ASU") 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU provides measurement guidance for a modification, or an exchange of a freestanding equity classified written call option that is not within the scope of another Topic. The Company adopted the ASU as of January 1, 2022 and its adoption did not have a significant impact on the Company's consolidated financial statements. The Company will apply the amendments prospectively to modifications or exchanges occurring on or after January 1, 2022.

In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments – Credit Losses (Topic 326) and subsequently related amendments (ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2022-02). This guidance replaces the existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost based on expected credit losses. The estimate of expected credit losses requires the incorporation of historical information, current conditions, and reasonable and supportable forecasts. This ASU will be effective for the quarter ended March 31, 2023. The Company is evaluating the effect the adoption of this ASU will have on the consolidated financial statements.

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The new standard eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity's own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity's own equity. This ASU will be effective for the year ended December 31, 2024. The Company is currently evaluating the effect the adoption of this ASU will have on the consolidated financial statements.

In June 2022, the FASB issued Accounting Standards Update ("ASU") 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which (1) clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to contractual restrictions that prohibit the sale of an equity security and (2) requires specific disclosures related to such an equity security. This ASU will be effective for the year ended December 31, 2024. The Company is currently evaluating the effect the adoption of this ASU will have on the consolidated financial statements.

Loss per Share

12 Months Ended

Dec. 31, 2022

Loss per Share

Loss per Share

3. Loss per Share

Loss per common share is presented under two formats: basic loss per common share and diluted loss per common share. Basic loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period, plus the potentially dilutive impact of common shares equivalents (e.g. stock options and warrants). Dilutive common share equivalents consist of the incremental common shares issuable upon exercise of stock options and warrants. The following table sets forth the computation of basic and diluted net loss per share (in thousands except per share data):


	Year Ended December 31,
	2022		2021
Numerator:
Net loss	$	(23,714)	$	(17,346)

Denominator:
Weighted-average common shares, basic		26,275		26,006
Dilutive effect of stock options		—		—
Dilutive effect of warrants		—		—
Incremental dilutive shares		—		—
Weighted-average common shares, diluted		26,275		26,006
Net loss per share, basic and diluted	$	(0.90)	$	(0.67)

The following outstanding options and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (in thousands):


	Year Ended December 31,
	2022	2021
Options to purchase common shares	4,539	4,259
Warrants to purchase common shares	150	39

Stock options

12 Months Ended

Dec. 31, 2022

Stock options

Stock options

4. Stock Options

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 common shares issuable under the stock option plan from a fixed number of 6.7 million to the number of shares that represents twenty-five percent (25%) of the total number of all issued and outstanding common shares. Based upon the current shares outstanding, a maximum of 6.6 million of our common shares 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 ten years from the date of grant. The stock option plan, as amended, allows the issuance of Canadian and U.S. dollar grants. A summary of the stock option transactions, U.S. dollar grants, for the years ended December 31, 2022 and 2021 is below. There are no outstanding $CAD denominated options.

Summary of $USD Option Activity


	Number of
	Options				Weighted
	(in thousands)		Range		Average
Outstanding and exercisable at December 31, 2020	2,952	$	0.45 – 12.59	$	4.82
Granted	1,412		4.08 – 7.53		5.93
Exercised	(11)		1.05 – 5.10		3.15
Forfeited	(94)		7.40 – 8.09		7.79
Outstanding and exercisable at December 31, 2021	4,259	$	0.45 – 12.59	$	5.13
Granted	1,015		5.59 - 8.10		6.50
Exercised	(273)		0.45 - 8.38		3.29
Forfeited	(462)		5.59 - 8.10		6.79
Outstanding and exercisable at December 31, 2022	4,539	$	0.45 – 12.59	$	5.43

Summary of $USD Option Remaining Life


Number Outstanding and Exercisable at	Weighted Average Strike Price	Weighted Average
December 31, 2022	December 31, 2022	Remaining Life
(in thousands)	US Dollars	(years)

4,539	$5.43	6.67

Stock compensation expense for the fiscal years ended December 31, 2022 and 2021 was $4.2 million and $4.0 million, respectively. These amounts have been included in general and administrative expenses for the respective periods. The weighted average fair value per share of options granted and or vested during the fiscal years ended December 31, 2022 and 2021 was $5.43 and $5.93, respectively. The intrinsic value (being the difference between the share price at December 31, 2022 and exercise price) of stock options exercisable at December 31, 2022 was $15.63 million. The intrinsic value of options exercised during the fiscal year ended December 31, 2022 was $1.81 million.

The fair value of all options vested during the fiscal year ended December 31, 2022 was $3.8 million. The fair values of options granted in fiscal years ended December 31, 2022 and 2021 were estimated on the date the options were granted based on the Black-Scholes option-pricing model, using the following weighted average assumptions for all options with a ten-year expiration:


	Year Ended December 31, 2022		Year Ended December 31, 2021
Expected dividend	0	%	0	%
Risk-free interest rate	1.18 - 3.96	%	1.41 - 1.62	%
Expected volatility	71	%	122	%
Expected life	5 - 6 years		10 years

The Company uses the historical volatility and adjusts for available relevant market information pertaining to the Company’s share price.

Restricted Share Units Activity

The Plan allows for the issuance of restricted share units (“RSUs”). The following is a summary of RSU activity for the years ended December 31, 2022 and 2021. All granted RSUs are denominated in U.S. dollars. Prior to June 2021, there was no activity involving RSUs. Of the 219 RSUs awarded, 86 were forfeited in fiscal year 2022 and 98 were released from restriction. The Company recognized $0.3 million in RSU expense for the year ended December 31, 2022 and $0.1 million for the same period in 2021. Standard vesting of RSUs is over three years with 1/3 vesting on the first anniversary date of the grant and then 1/24 on the last day of each subsequent month. There were 26 RSUs awarded to employees with standard vesting released from restriction in 2022. The Compensation Committee may also award RSUs with alternative

vesting. There were 34 RSUs awarded to various contractors which were released from restriction in 2022 on the one year anniversary of the award. There were 38 RSUs awarded to our CFO which conditionally released from restriction upon FDA approval of PEDMARK^® in 2022. The Company recognized all of the expense associated with this release upon FDA approval of PEDMARK^®.


		Number of Restricted
US Denominated RSU's		Share Units (thousands)
Outstanding at December 31, 2020		—
Granted		219
Outstanding at December 31, 2021		219
Granted		—
Forfeited		(86)
Released		(98)
Outstanding at December 31, 2022		35

Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Fair Value Measurements

5. Fair Value Measurements

The Company has adopted ASC 820 Fair Value Measurements and Disclosure Topic of the FASB. This Topic applies to certain assets and liabilities that are being measured and reported on a fair value basis. The Fair Value Measurements Topic defines fair value, establishes a framework for measuring fair value in accordance with US GAAP, and expands disclosure about fair value measurements. This Topic 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 Topic requires that financial 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.

Financial assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company measures the fair value of its Processa common shares by taking into consideration valuations obtained from public financial markets. The Company uses Yahoo Finance to obtain share price data and Oanda for foreign currency pricing services to estimate fair value. These inputs include reported trades of and broker- dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs.

As of December 31, 2022, the Company had financial assets valued based on Level 1 inputs consisting of cash and cash equivalents and had financial assets based on Level 2 inputs consisting of Processa common shares. During the year ended December 31, 2022, the Company did not have any transfers of financial assets between Levels 1 and 2.

Assets/Liabilities Measured at Fair Value on a Recurring Basis

Fair Value Measurement at December 31, 2022 and December 31, 2021

(in thousands)

Quoted Price in Active

Market for Identical

Significant Other

Significant

Instruments

Observable Inputs

Unobservable Inputs

Level 1

Level 2

Level 3

Total

2022

2021

2022

2021

2022

2021

2022

2021

Assets

Cash and cash equivalents

307

⁽¹⁾

23,467

21,018

—

23,774

21,100

Processa common shares

⁽²⁾

—

240

—

240

(1)

The Company held approximately, $307 in cash as of December 31, 2022, of which approximately $33 was in Canadian funds (translated into U.S. dollars). As of December 31, 2021, the Company held approximately $82, of which approximately $34 was in Canadian funds (translated into U.S. dollars).

(2)

The Company received 41 restricted common shares of Processa (PSCA). The share restriction expired in three tranches: 50%, 25% and 25% at the 6, 9 and 12 month intervals, respectively from October 30, 2020. As of December 31, 2022, the restrictions have expired.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity

Stockholders' Equity

6. Stockholders’ Equity

Authorized Capital Stock

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

Warrants to Purchase Common Shares

At December 31, 2022, the Company had 150 warrants outstanding to purchase common shares at a weighted average exercise price of $7.71.

The following table summarized our warrant activity for the fiscal years ended December 31, 2022 and 2021.


	Number of
	Warrants				Weighted
	(in thousands)		Range		Average
Outstanding and exercisable at December 31, 2020	$	39	$	6.80	$	6.80
Granted		—		—		—
Outstanding and exercisable at December 31, 2021	$	39	$	6.80	$	6.80
Granted		111		8.11		8.00
Outstanding and exercisable at December 31, 2022	$	150	$	7.71	$	7.71

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

Oregon Health & Science University (“OHSU”) Agreement

On February 20, 2013, Fennec entered into a new exclusive license agreement with OHSU for exclusive worldwide license rights to intellectual property directed to thiol-based compounds, including PEDMARK^® and their use in oncology (the "OHSU Agreement"). OHSU will receive certain milestone payments, royalty on net sales for licensed products and a royalty on any consideration received from sublicensing of the licensed technology.

On May 18, 2015, Fennec negotiated an amendment ("Amendment 1") to the OHSU Agreement, which expands Fennec's exclusive license to include the use of N-acetylcysteine as a standalone therapy and/or in combination with PEDMARK^® for the prevention of ototoxicity induced by chemotherapeutic agents to treat cancers. Further, Amendment 1 adjusts select milestone payments entered in the OHSU Agreement including but not limited to the royalty rate on net sales for licensed

products, royalty rate from sublicensing of the licensed technology and the fee payable upon the regulatory approval of a licensed product. Certain milestone payments are due upon FDA approval and achievement of sufficient positive EBITDA over a specified period. PEDMARK^® received FDA approval in September 2022, however at this time, due to significant uncertainty surrounding timing and magnitude of certain milestones, the Company has only recorded a royalty liability associated with net revenue.

The term of the OHSU Agreement as amended by Amendment 1 expires on the date of the last to expire claim(s) covered in the patents licensed to Fennec or 8 years, whichever is later. The Company now has a licensed product with regulatory approval that is covered by the Orphan Drug Designation, the parties amended the term of the agreement. Sodium thiosulfate is currently protected by methods of use patents that the Company exclusively licensed from OHSU that expired in Europe in 2021 and that expire in the United States in 2038. The OHSU Agreement is terminable by either Fennec or OHSU in the event of a material breach of the agreement by either party after 45 days prior written notice. Fennec also has the right to terminate the OHSU Agreement at any time upon 60 days prior written notice and payment of all fees due to OHSU under the OHSU Agreement. The Company had accrued approximately $15 (1% net sales) in royalty expense to OHSU at December 31, 2022.

Leases

We have an operating lease in Research Triangle Park, North Carolina utilizing small space within a commercial building. The operating lease has payments of $0.4 per month with no scheduled increases. This operating lease is terminable with 30 days’ notice and has no penalties or contingent payments due.

On January 23, 2020, the Company entered into an Office Service Agreement (the “Office Service Agreement”) with Regus to lease office space at in Hoboken, New Jersey. Per the terms of the Office Service Agreement, the monthly rent payments are $1. The Company was required to pay a security deposit of $2, which is the equivalent to two months of rent. The Office Service Agreement commenced on January 27, 2020, and terminates on July 31, 2020, thereafter the lease may continue on a month-to-month basis with either party being able to terminate the agreement by providing one months’ advance written notice of termination.

Securities Class Action Suit

Chapman v. Fennec Pharmaceuticals Inc. et al.

On September 3, 2020, plaintiff Jim Chapman filed a putative federal securities class action lawsuit against the Company, our Chief Executive Officer, Rostislav Raykov, and Chief Financial Officer, Robert Andrade, in the United States District Court for the Middle District of North Carolina, captioned Chapman v. Fennec Pharmaceuticals Inc. et al., Case No. 1:20-cv-00812. The complaint alleged that prior to our August 10, 2020 receipt of a CRL from the FDA concerning our NDA for PEDMARK^®, defendants made materially false or misleading statements and failed to disclose material facts about our third-party PEDMARK^® product manufacturing facility and the impact the facility would have on regulatory approval for PEDMARK^®. On December 3, 2020, the court appointed a lead plaintiff to represent the putative class. On February 1, 2021, the lead plaintiff filed an amended complaint. The amended complaint added members of our Board of Directors as defendants, asserts a putative class period from December 20, 2018 through August 10, 2020, makes allegations similar to those in the original complaint, claims the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, and seeks an unspecified amount of compensatory damages and attorneys’ fees and costs.

On March 3, 2021, defendants filed a motion to dismiss the amended complaint. On April 2, 2021, lead plaintiff filed an opposition to the motion to dismiss. On April 16, 2021, defendants filed a reply in support of the motion to dismiss, and on December 16, 2021, the Magistrate Judge entered an order recommending that defendants’ motion to dismiss be granted in its entirety. On January 24, 2022, lead plaintiff filed objections to the Magistrate Judge’s recommendation, and defendants filed their response on February 3, 2022. On March 2, 2022, the U.S. District Court Judge adopted the Magistrate Judge’s order and recommendation and entered an order and judgment dismissing the amended complaint with prejudice.

On March 30, 2022, lead plaintiff filed a motion for post judgment relief, seeking leave to file a second amended complaint. In his proposed second amended complaint, lead plaintiff seeks to add allegations stemming from the receipt of a second CRL following our resubmission of our NDA for PEDMARK^®, which we received on November 29, 2021, among other things. Defendants filed an opposition to plaintiff’s motion for post judgment relief on April 20, 2022. On May 4, 2022, lead plaintiff submitted a reply in support of his motion. On September 27, 2022, defendants filed a request for judicial notice regarding the FDA’s press release announcing that it has approved PEDMARK^®. On October 18, 2022, lead plaintiff filed his opposition to request for judicial notice. On October 21, 2022, defendants filed a reply in support of the request for judicial notice. On February 15, 2023, the Magistrate Judge recommended the motion for post judgment relief be denied. Lead plaintiff filed no timely objection to the recommendation, and on March 2, 2023, the U.S. District Court Judge issued an order adopting the Magistrate Judge’s recommendation, denying the motion for post judgment relief, and entering judgment for defendants.

We believe that this lawsuit is without merit and intend to defend it vigorously. We cannot predict the outcome of this lawsuit. Failure by us to obtain a favorable resolution of the lawsuit could have a material adverse effect on our business, results of operations, and financial condition. We have not recorded a liability as of December 31, 2022, because we believe a potential loss is not probable or reasonably estimable given the nature of the proceedings and our success so far by obtaining a dismissal with prejudice of the amended complaint.

Fisher v. Fennec Pharmaceuticals Inc. et al.

On February 9, 2022, plaintiff Jeffrey D. Fisher filed a putative federal securities class action lawsuit against the Company and our CEO and CFO in the United States District Court for the Middle District of North Carolina, captioned Fisher v. Fennec Pharmaceuticals Inc. et al., Case No. 1:22-cv-00115. The complaint asserts a putative class period from May 28, 2021 through November 28, 2021, and alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by making materially false and misleading statements or omissions regarding the status of our third-party PEDMARK^® product manufacturing facility, the facility’s compliance with cGMP, and the impact its status and compliance would have on regulatory approval for PEDMARK^® in the period leading up to the Company’s November 29, 2021 receipt of a CRL for a subsequent NDA for PEDMARK^®. The complaint seeks an unspecified amount of damages and attorneys’ fees and costs. On April 11, 2022, plaintiff Jeffrey D. Fisher filed a motion to be appointed lead plaintiff and represent the putative class and on May 9, 2022, the court appointed him as lead plaintiff.

On June 23, 2022, lead plaintiff filed an amended complaint. The amended complaint asserts the same putative class period from May 28, 2021 through November 28, 2021, is brought against the same defendants and makes allegations similar to those in the original complaint. On August 5, 2022, defendants filed a motion to dismiss the amended complaint. On August 26, 2022, lead plaintiff filed an opposition to the motion to dismiss. On September 9, 2022, defendants filed a reply in support of the motion to dismiss.

On September 27, 2022, defendants filed a request for judicial notice regarding the FDA’s press release announcing that it approved PEDMARK^® On September 30, 2022, lead plaintiff filed an opposition to the request for judicial notice. On October 6, 2022, defendants filed a reply in support of the request for judicial notice. On October 12, 2022, the U.S. District Court Judge issued a memorandum opinion and order dismissing the amended complaint in its entirety and with prejudice, and on October 14, 2022, entered judgment. Lead plaintiff had until November 14, 2022 to file a notice of appeal and did not file a notice of appeal.

We believe that the lawsuit is without merit and intend to defend it vigorously. We cannot predict the outcome of this lawsuit. Failure by us to obtain a favorable resolution of the lawsuit could have a material adverse effect on our business, results of operations, and financial condition. We have not recorded a liability as of December 31, 2022, because we believe a potential loss is not probable or reasonably estimable given the nature of the proceedings and our success so far by obtaining a dismissal with prejudice of the amended complaint.

Hope Medical Enterprises, Inc. Inter Partes Review (IPR) Challenges

On October 29, 2021, Hope Medical Enterprises, Inc. (“Hope”) filed two petitions for inter partes review (“IPR”) with the Patent Trial and Appeal Board (“PTAB”) of the USPTO. In its petitions, Hope seeks to invalidate our U.S. Patent

No. 10,596,190 (“US ‘190 Patent”), which is exclusively in-licensed from Oregon Health & Science University (“OHSU”) and relates to a method of using our PEDMARK^® product, and our U.S. Patent No. 10,792,363 (“US ’363 Patent”), which relates to an anhydrous form of STS and its method of manufacture, which is the active pharmaceutical ingredient in our PEDMARK^® product. The US ‘190 Patent was issued on March 24, 2020. The US ‘363 Patent was issued on October 6, 2020.

On January 11, 2022, OHSU filed a Request for Supplemental Examination of US ‘190 Patent (Control No. 96.000,390) requesting the consideration by the Central Re-examination Unit (“CRU”) of the USPTO of certain prior art references, including references cited by Hope in its Petition for IPR that are relevant to the granted claim of the patent. On January 28, 2022, the CRU issued a Supplemental Examination Certificate, identified a Substantial New Question (“SNQ”) on the patentability of the US ‘190 Patent claims, and ordered a Reexamination of US ‘190 Patent on March 9, 2022. On May 9, the PTAB granted Hope Medical’s Petition to Institute the IPR against the US ‘190 Patent and a stayed the US ‘190 Patent Reexamination pending the result of the US ‘190 Patent IPR. On August 12, 2022, OHSU filed a Motion to Amend the single claim of the US ‘190 Patent in the IPR to focus on the treatment of medulloblastoma. On December 5, 2022, OHSU filed a Revised Motion to Amend the single claim of the US ‘190 Patent. We expect a decision in the ‘190 Patent IPR in May 2023, which can be appealed by the losing party.

Further, in May 2022, the PTAB granted Hope Medical’s Petition to Institute the IPR against the ‘363 Patent. During the ‘363 Patent IPR, we disclaimed the ‘363 Patent claims directed to the anhydrous morphic form of STS, and filed a Motion to Amend the remaining method of manufacture claims. On December 14, 2022, we filed a Revised Motion to Amend the remaining claims in the ‘363 Patent. We expect a decision in the ‘363 IPR in May 2023, which can be appealed by the losing party.

We plan to vigorously defend our intellectual property rights related to PEDMARK^®. However, we are unable to predict the outcome of Hope’s IPR petitions, or the Reexamination. While we now have, or will shortly receive, additional U.S. patents that cover PEDMARK^® over the IPR challenged patents, an invalidation of our patents covering PEDMARK^® could have a material adverse effect on our ability to protect our rights in PEDMARK^® beyond periods of marketing exclusivity for PEDMARK^® possible in the United States under Orphan Drug Designation and in Europe under European Market Exclusivity for Pediatric Use (“PUMA”).

CIPLA ANDA Litigation

On December 1, 2022, we received a letter dated November 30, 2022, notifying us that CIPLA Ltd. and CIPLA USA (“CIPLA”) submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK^® (sodium thiosulfate solution) that contains Paragraph IV Certifications on two of our patents covering PEDMARK^®: the OHSU licensed US ‘190 Patent, expiration date January 2038; and our US 11,291,728 Patent, expiration date July 2039. On January 6, 2023, we received a letter dated January 5, 2023, notifying us that CIPLA submitted to the FDA a Paragraph IV Certification on our newly issued US 11,510,984 Patent. These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for PEDMARK^®. The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution.

Under the Food and Drug Cosmetic Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, as amended, after receipt of a valid Paragraph IV notice, the Company may bring a patent infringement suit in a federal district court against CIPLA within 45 days from the receipt of the Notice Letter and if such a suit is commenced within the 45-day period, the Company is entitled to a 30 month stay on the FDA’s ability to give final approval to any proposed products that reference PEDMARK^®. In addition to the 30-month stay, because we have received Orphan Drug Exclusivity, the FDA may not approve CIPLA’s ANDA for at least 7 years from PEDMARK^®’s FDA approval date of September 20, 2022.

On January 10, 2023, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 3:23-cv-00123), for infringement of the ‘190 Patent and the ‘728 Patent. The suit is ongoing.

Executive Severance

In the event of his termination with us other than for cause, we will be obligated to pay Mr. Raykov a one-time severance payment equal to twelve months of salary (currently $513). In the event of his termination with us other than for cause, we will be obligated to pay Mr. Andrade a one-time severance payment equal to six months of salary (currently $ 186).

Employee Benefit Plan

In May 2021, the Company established the Fennec Pharmaceuticals, Inc. 401(k) Plan (the “401(k) Plan”) for its employees, which is designed to be qualified under Section 401(k) of the Code. Eligible employees are permitted to contribute to the 401(k) Plan within statutory and 401(k) Plan limits. As of December 31, 2022 the Company does not offer matching contributions.

Term Loans

12 Months Ended

Dec. 31, 2022

Term Loans

Term Loans

8. Term Loans

On August 1, 2022, the Company entered into the SPA with the Investor in connection with the issuance of up to $45,000 of Notes, issuable in multiple tranches. On August 19, 2022, the Company closed on the initial tranche of $5,000, which has an Initial Conversion Price equal to $8.11 per share, which was calculated based on a 20% premium of the 5-day VWAP immediately prior to the announcement of the SPA. In connection with the first closing, the Company repaid in full its secured indebtedness with Bridge Bank in the amount of $5,000. The Notes become due on the maturity date, which is August 19, 2027.

On September 23, 2022, the Company closed on the second tranche of the Note Financing in the amount of $20,000, which has an Initial Conversion Price equal to $7.89 per share, which was calculated based on a 20% premium of the 5-day VWAP immediately prior to the Second Closing Trigger.

A commitment fee of 2.0% of the Notes is payable under the SPA. Half of such fee was paid by the issuance on the first closing of warrants to purchase 55,498 Fennec common shares and half was payable in cash or warrants of 55,498 Fennec common shares, at our election, on the second closing. The Company chose to issue warrants to satisfy the payable on both the first and second closing. The warrants are exercisable at a price per share of $8.11 and respectively, and both have a maturity date of August 19, 2027.

Cash interest on outstanding principal shall accrue at a rate of prime, plus 4.5% per annum, from the date of funding (11% as of December 31, 2022). Cash interest is due on the first business day of each calendar quarter (“Interest Date”). Payment-in-kind (“PIK”) interest will commence on funding date and accrue at a rate of 3.5% per annum. PIK interest will stop accruing on August 24, 2024. Any accrued PIK interest shall remain outstanding and be payable on each Interest Date and be added to the outstanding principal amount. The Company has accrued $0.26 in PIK interest and has classified the PIK interest in long-term liabilities.

The SPA notes are convertible into fully paid, non-assessable share of common shares at any point after their issuance dates and before the maturity date. Any amount of the SPA notes may be converted into common shares so long as it does not create partial shares. The conversion rate is determined by dividing the conversion amount by the conversion price. Provisions of the PSA create legal, valid and enforceable liens on, and security interests in, all of the Company’s and each of its subsidiaries assets.

Aggregate annual payments due on the SPA as of December 31, 2022, are as follows (in thousands):


Years Ending December 31,			Amount
2022			—

2023		—
2024		—
2025		—
2026		—
2027		25,000
Total future payments		25,000
Add: PIK interest		260
Less: unamortized debt discount		(361)
Total term loan, net of debt discount	$	24,899

In the event of default or change of control, all unpaid principal and all accrued and unpaid interest amounts (if any) become immediately due and payable. Events of default include, but are not limited to, a payment default, a material adverse change, and insolvency. The SPA facility is secured by all of the Company’s assets, including all capital stock held by the Company.

Debt issuance costs of $175 were paid in cash for legal fees and to the Investor in 2022 and warrants valued at $441 were granted the Investor to secure access to the SPA. These amounts were capitalized and are being amortized over the access period of the SPA. Upon drawing tranche 1 and tranche 2, the Company recorded a debt discount of $314, which was based on a pro-rata allocation of the issue costs to secure the SPA, reducing the capitalized amount by the same amount. The debt discount is being amortized over the life of the SPA.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2022
Subsequent Events
Subsequent Events	9. Income Taxes

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

The Company operates in both U.S. and Canadian tax jurisdictions. Its income is subject to varying rates of tax and losses incurred in one jurisdiction cannot be used to offset income taxes payable in another. A reconciliation of the combined Canadian federal and provincial income tax rate with the Company’s effective tax rate is as follows (in thousands except for percentage rates):


	Year Ended			Year Ended
	December 31,			December 31,
	2022			2021
Domestic loss	$	(10,548)		$	(9,122)
Foreign loss		(13,117)			(8,173)
Loss before income taxes		(23,665)			(17,295)

Expected statutory rate		26.50	%		26.50	%
Expected provision for (recovery of) income tax		(6,271)			(4,583)
Permanent differences		1,170			993
Change in valuation allowance		4,669			3,086
Effect of foreign exchange rate differences					—
Effect of change in future enacted tax rates					—
Tax credits and other adjustments					—
Effect of tax rate changes and other		432			504
Provision for income taxes	$	—		$	—

The Canadian statutory income tax rate of 26.5 percent is comprised of federal income tax at approximately 15.0 percent and provincial income tax at approximately 11.5 percent.

The primary temporary differences which gave rise to future income taxes (recovery) at December 31, 2022 and December 31, 2021:


	December 31,		December 31,
	2022		2021
Future tax assets:
SR&ED expenditures	$	2,086	$	2,086
Income tax loss carryforwards		34,948		30,007
Non-refundable investment tax credits		421		700
Share issue costs		62		77
Fixed and intangible assets		1,083		1,083
Debt discount		22		—
		38,622		33,953
Less: valuation allowance		(38,596)		(33,927)
Net future tax assets	$	26	$	26

10. Subsequent Events

Management has evaluated subsequent events through the date of this filing and concluded there are no events of significance which require disclosure.

Tax Cuts and Jobs Act

On December 22, 2017, the then President of the United States signed into law an Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (commonly known as “the Tax Cuts and Jobs Act” (“TCJA”)), which introduced a comprehensive set of tax reforms. The Tax Cuts and Jobs Act significantly revises U.S. tax law by, among other provisions, lowering the Company’s corporate tax rate from 34% to 21% and eliminating or reducing certain income tax deductions.

In December 2017, in accordance with the SEC Staff Accounting Bulletin (“SAB”) 118–Income Tax Accounting Implications of the TCJA, the Company recorded tax effects on a provisional basis based on a reasonable estimate. The TCJA did not have a material impact on the Company's financial statements because its deferred temporary differences are fully offset by a valuation allowance and the Company does not have any offshore earnings from which to record the mandatory transition tax. During 2018, the Company completed its analysis under SAB 118 and no additional tax effects due to rate-remeasurement were required to be recorded.

There are no current income taxes owed, nor are any income taxes expected to be owed in the near term. At December 31, 2022, the Company has unclaimed Scientific Research and Experimental Development ("SR&ED") expenditures, income

tax loss carry-forwards and non-refundable investment tax credits. The unclaimed amounts and their expiry dates are as listed below:


			Province/
	Federal		State
SR&ED expenditures (no expiry)	$	7,872	$	—
Income tax loss carryforwards (expiry date):
2023		1,588		—
2024		4,849		—
2025		6,143		—
2026		13,868		—
2027		8,136		—
2028		10,509		4,164
2029		8,185		2,116
2030		2,608		700
2031		3,378		789
2032		3,491		651
2033		1,789		655
2034		1,812		617
2035		1,804		941
2036		2,208		1,013
2037		4,641		1,638
2038		5,267		-
2039		5,848		-
2040		5,792		-
2041		5,340		-
2042		6,192		-
No expiration		35,974		24,580
Investment tax credits (expiry date):
2023		169
2024		189
2025		82
2026		86
2027		47

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Fennec and of all its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.

Use of Estimates

Segment and Geographic Information

Segment and Geographic Information

Inventory

Stock-Based Compensation

Inventory

Revenue Recognition

Net Product Revenue

Net Product Revenue

Product Sales Discounts and Allowances

Product Sales Discounts and Allowances

The following table summarizes net product revenues for PEDMARK^® in the United States earned in the years ended December 31, 2022 and 2021, respectively:


		Year Ended
		December 31,		December 31,
In thousands		2022		2021
Product revenues:
Gross product revenues	$	1,769	$	—
Discounts and allowances		(234)		—
Net product revenues	$	1,535	$	—


	Year Ended
	December 31,		December 31,
In thousands	2022		2021
Cardinal Health Specialty	72	%	—	%
ASD	16		—
	88	%	—	%



		Chargebacks,		Rebates, Customer
		Discounts for		Fees/Credits
		Prompt Pay and		and Co-Pay
In thousands		Other Allowances		Assistance		Totals
Balance at December 31, 2021	$	—	$	—	$	—
Provision related to sales made in:
Current period		72		163		235
Prior periods		—		—		—
Payments and customer credits issued		(1)		—		(1)
Balance at December 31 2022	$	71	$	163	$	234

Trade Receivables

Trade Receivables

Cost of Goods Sold

Cost of Products Sold

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities at the date of purchase of three months or less.

Financial Instruments

Common Shares and Warrants

Research and Development Costs and Investment Tax Credits

Concentrations of Credit Risk

Income Taxes

more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position.

Foreign Currency Translation

The U.S. dollar is the functional currency for the Company’s consolidated operations. All gains and losses from currency translations are included in results of operations.

Loss Per Share

Recent Accounting Pronouncements

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Significant Accounting Policies

Schedule of PEDMARK Revenues

The following table summarizes net product revenues for PEDMARK^® in the United States earned in the years ended December 31, 2022 and 2021, respectively:


		Year Ended
		December 31,		December 31,
In thousands		2022		2021
Product revenues:
Gross product revenues	$	1,769	$	—
Discounts and allowances		(234)		—
Net product revenues	$	1,535	$	—

Schedule of PEDMARK Revenues From Significant Customers


	Year Ended
	December 31,		December 31,
In thousands	2022		2021
Cardinal Health Specialty	72	%	—	%
ASD	16		—
	88	%	—	%

Schedule of PEDMARK Revenue Discounts and Allowances



		Chargebacks,		Rebates, Customer
		Discounts for		Fees/Credits
		Prompt Pay and		and Co-Pay
In thousands		Other Allowances		Assistance		Totals
Balance at December 31, 2021	$	—	$	—	$	—
Provision related to sales made in:
Current period		72		163		235
Prior periods		—		—		—
Payments and customer credits issued		(1)		—		(1)
Balance at December 31 2022	$	71	$	163	$	234

Loss per Share (Tables)

12 Months Ended

Dec. 31, 2022

Loss per Share

Schedule of Earnings Per Share, Basic and Diluted


	Year Ended December 31,
	2022		2021
Numerator:
Net loss	$	(23,714)	$	(17,346)

Denominator:
Weighted-average common shares, basic		26,275		26,006
Dilutive effect of stock options		—		—
Dilutive effect of warrants		—		—
Incremental dilutive shares		—		—
Weighted-average common shares, diluted		26,275		26,006
Net loss per share, basic and diluted	$	(0.90)	$	(0.67)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share


	Year Ended December 31,
	2022	2021
Options to purchase common shares	4,539	4,259
Warrants to purchase common shares	150	39

Stock options (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Stock Option Fair Value Assumptions


	Year Ended December 31, 2022		Year Ended December 31, 2021
Expected dividend	0	%	0	%
Risk-free interest rate	1.18 - 3.96	%	1.41 - 1.62	%
Expected volatility	71	%	122	%
Expected life	5 - 6 years		10 years

Schedule of Restricted Share Unit Activity


		Number of Restricted
US Denominated RSU's		Share Units (thousands)
Outstanding at December 31, 2020		—
Granted		219
Outstanding at December 31, 2021		219
Granted		—
Forfeited		(86)
Released		(98)
Outstanding at December 31, 2022		35

Currency, U.S. Dollar [Member]

Schedule of Stock Option Activity

Summary of $USD Option Activity


	Number of
	Options				Weighted
	(in thousands)		Range		Average
Outstanding and exercisable at December 31, 2020	2,952	$	0.45 – 12.59	$	4.82
Granted	1,412		4.08 – 7.53		5.93
Exercised	(11)		1.05 – 5.10		3.15
Forfeited	(94)		7.40 – 8.09		7.79
Outstanding and exercisable at December 31, 2021	4,259	$	0.45 – 12.59	$	5.13
Granted	1,015		5.59 - 8.10		6.50
Exercised	(273)		0.45 - 8.38		3.29
Forfeited	(462)		5.59 - 8.10		6.79
Outstanding and exercisable at December 31, 2022	4,539	$	0.45 – 12.59	$	5.43

Summary of $USD Option Remaining Life


Number Outstanding and Exercisable at	Weighted Average Strike Price	Weighted Average
December 31, 2022	December 31, 2022	Remaining Life
(in thousands)	US Dollars	(years)

4,539	$5.43	6.67

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Schedule of Assets/Liabilities Measured at Fair Value on Recurring Basis

Assets/Liabilities Measured at Fair Value on a Recurring Basis

Fair Value Measurement at December 31, 2022 and December 31, 2021

(in thousands)

Quoted Price in Active

Market for Identical

Significant Other

Significant

Instruments

Observable Inputs

Unobservable Inputs

Level 1

Level 2

Level 3

Total

2022

2021

2022

2021

2022

2021

2022

2021

Assets

Cash and cash equivalents

307

⁽¹⁾

23,467

21,018

—

23,774

21,100

Processa common shares

⁽²⁾

—

240

—

240

(1)

(2)

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity

Schedule of Warrants Outstanding to Purchase Common Stock

The following table summarized our warrant activity for the fiscal years ended December 31, 2022 and 2021.


	Number of
	Warrants				Weighted
	(in thousands)		Range		Average
Outstanding and exercisable at December 31, 2020	$	39	$	6.80	$	6.80
Granted		—		—		—
Outstanding and exercisable at December 31, 2021	$	39	$	6.80	$	6.80
Granted		111		8.11		8.00
Outstanding and exercisable at December 31, 2022	$	150	$	7.71	$	7.71

Fair values of options granted using weighted average assumptions


	Year Ended December 31, 2022		Year Ended December 31, 2021
Expected dividend	0	%	0	%
Risk-free interest rate	1.18 - 3.96	%	1.41 - 1.62	%
Expected volatility	71	%	122	%
Expected life	5 - 6 years		10 years

Term Loans (Tables)

12 Months Ended

Dec. 31, 2022

Term Loans

Schedule of Aggregate Annual Term-Loan Payments

Aggregate annual payments due on the SPA as of December 31, 2022, are as follows (in thousands):


Years Ending December 31,			Amount
2022			—

2023		—
2024		—
2025		—
2026		—
2027		25,000
Total future payments		25,000
Add: PIK interest		260
Less: unamortized debt discount		(361)
Total term loan, net of debt discount	$	24,899

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of Income Taxes, Combined US and Canadian Effective Tax Rate


	Year Ended			Year Ended
	December 31,			December 31,
	2022			2021
Domestic loss	$	(10,548)		$	(9,122)
Foreign loss		(13,117)			(8,173)
Loss before income taxes		(23,665)			(17,295)

Expected statutory rate		26.50	%		26.50	%
Expected provision for (recovery of) income tax		(6,271)			(4,583)
Permanent differences		1,170			993
Change in valuation allowance		4,669			3,086
Effect of foreign exchange rate differences					—
Effect of change in future enacted tax rates					—
Tax credits and other adjustments					—
Effect of tax rate changes and other		432			504
Provision for income taxes	$	—		$	—

Schedule of Net Future Tax Assets

The primary temporary differences which gave rise to future income taxes (recovery) at December 31, 2022 and December 31, 2021:


	December 31,		December 31,
	2022		2021
Future tax assets:
SR&ED expenditures	$	2,086	$	2,086
Income tax loss carryforwards		34,948		30,007
Non-refundable investment tax credits		421		700
Share issue costs		62		77
Fixed and intangible assets		1,083		1,083
Debt discount		22		—
		38,622		33,953
Less: valuation allowance		(38,596)		(33,927)
Net future tax assets	$	26	$	26

10. Subsequent Events

Management has evaluated subsequent events through the date of this filing and concluded there are no events of significance which require disclosure.

Schedule of Unclaimed Tax Credits and Expiration Dates


			Province/
	Federal		State
SR&ED expenditures (no expiry)	$	7,872	$	—
Income tax loss carryforwards (expiry date):
2023		1,588		—
2024		4,849		—
2025		6,143		—
2026		13,868		—
2027		8,136		—
2028		10,509		4,164
2029		8,185		2,116
2030		2,608		700
2031		3,378		789
2032		3,491		651
2033		1,789		655
2034		1,812		617
2035		1,804		941
2036		2,208		1,013
2037		4,641		1,638
2038		5,267		-
2039		5,848		-
2040		5,792		-
2041		5,340		-
2042		6,192		-
No expiration		35,974		24,580
Investment tax credits (expiry date):
2023		169
2024		189
2025		82
2026		86
2027		47

Nature of Business and Liquidity (Details) $ / shares in Units, $ in Thousands				12 Months Ended
	Sep. 23, 2022 USD ($) $ / shares	Aug. 19, 2022 USD ($) $ / shares	Aug. 01, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)
Nature of Business and Going Concern [Line Items]
Loss from operations				$ 22,589	$ 17,223
Net loss				23,714	17,346
Accumulated deficit				(203,200)	(179,486)
Cash flows from operating activities				(18,058)	$ (14,222)
Petrichor Financing \| Securities Purchase Agreements \| Convertible Note Borrowings
Nature of Business and Going Concern [Line Items]
Maximum borrowing capacity			$ 45,000
Remaining borrowing capacity				$ 20,000
Commitment fee percentage				2.00%
Petrichor Financing \| Securities Purchase Agreements \| First Closing Note
Nature of Business and Going Concern [Line Items]
Borrowings, face amount		$ 5,000
Initial conversion price \| $ / shares		$ 8.11
Premium over 5-day VWAP		20.00%
VWAP term		5 days
Petrichor Financing \| Securities Purchase Agreements \| Second Closing Note
Nature of Business and Going Concern [Line Items]
Borrowings, face amount	$ 20,000
Initial conversion price \| $ / shares	$ 7.89
Premium over 5-day VWAP	20.00%
VWAP term	5 days
Petrichor Financing \| Securities Purchase Agreements \| Subsequent Closing Notes
Nature of Business and Going Concern [Line Items]
Borrowings, face amount				$ 10,000
Initial conversion price \| $ / shares				$ 7.89
Exercise price of warrants issued \| $ / shares				$ 8.11
Petrichor Financing \| Securities Purchase Agreements \| Subsequent Closing Notes \| Minimum
Nature of Business and Going Concern [Line Items]
Number of loan tranches for remaining borrowing capacity				1
Petrichor Financing \| Securities Purchase Agreements \| First Closing Warrant
Nature of Business and Going Concern [Line Items]
Commitment fees payable in warrants				50.00%
Common shares available through issuance of warrants \| shares				55,498
Petrichor Financing \| Securities Purchase Agreements \| Second Closing Warrant
Nature of Business and Going Concern [Line Items]
Common shares available through issuance of warrants \| shares				55,498
Commitment fees payable in cash or warrants				50.00%
Exercise price of warrants issued \| $ / shares				$ 8.11
Exercise term of warrants				5 years
Bridge Bank \| Bridge Bank Term Loan
Nature of Business and Going Concern [Line Items]
Repayment of term loan		$ 5,000	$ 5,000

Significant Accounting Policies - Additional Information (Details) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares
Summary Of Significant Accounting Policies [Line Items]
Number of Operating Segments	1
Discounts for prompt payment	0.65%
Percentage of prompt payment discounts expected to pay out	100.00%
Cash \| $			$ 8
FDIC insured amount \| $	$ 250,000
Warrants outstanding	150	39	39
Warrants exercise price \| $ / shares	$ 7.71	$ 6.80	$ 6.80
Money Market Funds
Summary Of Significant Accounting Policies [Line Items]
Cash \| $	$ 23,800	$ 21,100
Warrants
Summary Of Significant Accounting Policies [Line Items]
Warrants outstanding	200
Warrants exercise price \| $ / shares	$ 7.71
Exercise term of warrants	5 years 18 days
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	200	40
Common Stock \| Employee Options
Summary Of Significant Accounting Policies [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,500	4,300

Significant Accounting Policies - Revenue recognition (Details) - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
	Oct. 30, 2020	Dec. 31, 2022
PEDMARK
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalties		1.00%
Revenues		$ 1,535
Processa Pharmaceuticals, Inc \| License agreement \| Restricted shares
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares to be issued under agreement	41

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
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+ Details

Significant Accounting Policies - Product Sales Discounts and Allowances (Details) - USD ($) $ in Thousands	12 Months Ended	24 Months Ended
	Dec. 31, 2022	Dec. 31, 2022
Revenue Benchmark \| Customer Concentration Risk
Contribution of revenue percentage denoting significant customers		10.00%
PEDMARK
Gross product revenue	$ 1,769
Discounts and allowances	(234)
Revenue	$ 1,535
PEDMARK \| Revenue Benchmark \| Customer Concentration Risk
Concentration Risk, Percentage	88.00%
PEDMARK \| Revenue Benchmark \| Customer Concentration Risk \| ASD
Concentration Risk, Percentage	72.00%
PEDMARK \| Revenue Benchmark \| Customer Concentration Risk \| Cardinal Health Specialty
Concentration Risk, Percentage	16.00%

Significant Accounting Policies - Product Sales Discounts and Allowances Continued (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Current period	$ 235
Payments and customer credits issued	(1)
Provision for discounts and allowances, ending balance	234
Chargebacks, Discounts for Prompt pay and Other allowances
Current period	72
Payments and customer credits issued	(1)
Provision for discounts and allowances, ending balance	71
Rebates, Customer Fees/Credits and Co-pay Assistance
Current period	163
Provision for discounts and allowances, ending balance	$ 163

Significant Accounting Policies - Cost of Products Sold (Details) - PEDMARK $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)
Percentage of royalties	1.00%
Manufacturing costs capitalized to inventory	$ 0.6
Manufacturing costs capitalized to inventory, work-in-process	0.4
Manufacturing costs capitalized to inventory, finished goods	0.2
Manufacturing costs capitalized to inventory, cost of products sold	$ 0.1

Loss per Share - Computation of Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Numerator:
Net loss	$ (23,714)	$ (17,346)
Denominator:
Weighted-average common shares, basic	26,275	26,006
Weighted-average common shares, dilutive	26,275	26,006
Basic net loss per common share	$ (0.90)	$ (0.67)
Diluted net loss per common share	$ (0.90)	$ (0.67)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Loss per Share - Outstanding Options and Warrants (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Employee Options
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,539	4,259
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	150	39

Stock Options - Options Granted Under The Stock Option Plan Exercisable In Canadian Dollars And U.S Dollars (Details) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Employee Options
Vesting period	3 years
Expiration term	10 years
Currency, U.S. Dollar [Member]
Number of Options Outstanding and Exercisable at Beginning	4,259	2,952
Number of Options Granted	1,015	1,412
Number of Options Exercised	(273)	(11)
Number of Options Forfeited	(462)	(94)
Number of Options Outstanding and Exercisable at Ending	4,539	4,259
Weighted Average Exercise Price Outstanding and Exercisable at Beginning	$ 5.13	$ 4.82
Weighted- Average Granted	6.50	5.93
Weighted- Average Exercised	3.29	3.15
Weighted- Average Forfeited or expired	6.79	7.79
Weighted Average Exercise Price Outstanding and Exercisable at Ending	5.43	5.13
Currency, U.S. Dollar [Member] \| Minimum
Outstanding and Exercisable Range	0.45	0.45
Granted Range	5.59	4.08
Exercised Range	0.45	1.05
Forfeited or expired Range	5.59	7.40
Outstanding and Exercisable Range	0.45	0.45
Currency, U.S. Dollar [Member] \| Maximum
Outstanding and Exercisable Range	12.59	12.59
Granted Range	8.10	7.53
Exercised Range	8.38	5.10
Forfeited or expired Range	8.10	8.09
Outstanding and Exercisable Range	$ 12.59	$ 12.59

Stock Options - Price In US Dollars (Details) - Currency, U.S. Dollar [Member] - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Number Outstanding and Exercisable	4,539	4,259	2,952
Weighted Average Strike Price in US Dollars	$ 5.43
Weighted Average Remaining Life (years)	6 years 8 months 1 day

Stock Options - Options Were Granted Based On The Black Scholes Option Pricing Model (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Expected dividend	0.00%	0.00%
Expected volatility	71.00%	122.00%
Expected life		10 years
Minimum
Risk-free interest rate	1.18%	1.41%
Expected life	5 years
Maximum
Risk-free interest rate	3.96%	1.62%
Expected life	6 years

Stock options - Restricted Share Units Activity (Details) - USD ($) shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSU expense recognized	$ 0.3	$ 0.1
Chief Financial Officer And Chief Compliance officer [Member]
US Denominated RSU's
Awarded	38
Equity Incentive Plan \| US Denominated RSU's
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested	26
US Denominated RSU's
Outstanding at beginning of period	219	0
Awarded	0	219
Forfeited	(86)
Released	(98)
Vested	26
Outstanding at end of period	35	219
Equity Incentive Plan \| US Denominated RSU's \| Vesting on the first anniversary date of the grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Vesting percentage	33.00%
US Denominated RSU's
Awarded	34
Equity Incentive Plan \| US Denominated RSU's \| Vesting on the last day of each subsequent month
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	4.17%

Stock Options - Modification of Existing US Dollar Denominated Option (Details)	12 Months Ended
	Dec. 31, 2021
Stock options
Expected Life (Years)	10 years

Stock options - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions		12 Months Ended
	Jun. 24, 2010	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value		$ 15,630
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value		1,810
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value		$ 3,800
Expiration period		10 years
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense		$ 4,200	$ 4,000
Plan Maximum Amendment [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issuable under Stock Option Plan	6.6
Percentage Of Total Number Of Share Issued and Outstanding	25.00%
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issuable under Stock Option Plan	6.7
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 5.43	$ 5.93

Fair Value Measurements - Assets/Liabilities Measured at Fair Value (Details) - USD ($) shares in Thousands, $ in Thousands	Oct. 30, 2020	Dec. 31, 2022	Dec. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Cash and cash equivalents		$ 23,774	$ 21,100
Quoted Price in Active Markets for Identical Instruments Level 1
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Cash and cash equivalents		307	82
Significant Other Observable Inputs Level 2
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Cash and cash equivalents		23,467	21,018
Significant Unobservable Inputs Level 3
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Cash and cash equivalents		0	0
Processa Pharmaceuticals, Inc
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Processa common shares		56	240
Processa Pharmaceuticals, Inc \| Quoted Price in Active Markets for Identical Instruments Level 1
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Processa common shares		56
Processa Pharmaceuticals, Inc \| Significant Other Observable Inputs Level 2
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Processa common shares			240
Processa Pharmaceuticals, Inc \| Significant Unobservable Inputs Level 3
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Processa common shares		$ 0	$ 0
License agreement \| Processa Pharmaceuticals, Inc \| Restricted shares
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares to be issued under agreement	41
License agreement \| Processa Pharmaceuticals, Inc \| Restricted shares \| 6 month interval
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Expiration of share restriction	50.00%
Share Restriction Term	6 months
License agreement \| Processa Pharmaceuticals, Inc \| Restricted shares \| 9 month interval
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Expiration of share restriction	25.00%
Share Restriction Term	9 months
License agreement \| Processa Pharmaceuticals, Inc \| Restricted shares \| 12 month interval
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Expiration of share restriction	25.00%
Share Restriction Term	12 months

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Cash			$ 8
Quoted Price in Active Markets for Identical Instruments Level 1
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Cash	$ 307	$ 8
Quoted Price in Active Markets for Identical Instruments Level 1 \| Canadian funds translated into USD
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
Cash	$ 33	$ 34

Stockholders' Equity - Warrants to Purchase Common Stock (Details) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Class of Warrant or Right [Line Items]
Outstanding and exercisable at the beginning	39	39
Granted	111	0
Outstanding and exercisable at the end	150	39
Weighted-Average Outstanding, beginning	$ 6.80	$ 6.80
Granted (in dollars per share)	8.11	0
Weighted-Average Outstanding, end	7.71	6.80
Weighted Average [Member]
Class of Warrant or Right [Line Items]
Weighted-Average Outstanding, beginning	6.80	6.80
Granted (in dollars per share)	8.00	0
Weighted-Average Outstanding, end	7.71	$ 6.80
Exercised	$ 7.71

Commitments and Contingencies (Details)			12 Months Ended
Commitments and Contingencies (Details)	Jan. 27, 2020 USD ($)	May 18, 2015	Dec. 31, 2022 USD ($)
Oregon Health & Science University Agreement
Licensing term OHSU agreement		8 years
Days notice required to terminate OHSU agreement		45 days
Days notice required by Fennec to terminate OHSU agreement		60 days
Accrued royalty expenses			$ 15,000
Percentage of royalties			1.00%
Lease Contingencies \| Triangle Park, North Carolina
Monthly lease expense			$ 400,000
Operating lease, number of scheduled payment increases			0
Operating lease, days notice required to terminate agreement			30 days
Operating lease, penalties and contingent payments payable			$ 0
Lease Contingencies \| Hoboken, New Jersey \| Office Service Agreement
Monthly lease expense	$ 1,000
Security deposit	$ 2,000
CIPLA ANDA Litigation
Days following receipt of Notice Letter to file patent infringement suit			45 days
Duration of FDA's ability to give final approval to proposed products that reference PEDMARK			30 months
PEDMARK's Orphan Drug Exclusivity period			7 years
Executive Severance \| Rostislav Raykov
Severance payments due			$ 513,000
Number of severance payments			1
Severance payment term			P12M
Executive Severance \| Robert Andrade
Severance payments due			$ 186,000
Number of severance payments			1
Severance payment term			P6M

Term Loans (Details) $ / shares in Units, $ in Thousands				12 Months Ended
Term Loans (Details) $ / shares in Units, $ in Thousands	Sep. 23, 2022 USD ($) $ / shares	Aug. 19, 2022 USD ($) $ / shares	Aug. 01, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)
Term Loans [Line Items]
Debt discount				$ (361)	$ (12)
Accrued Paid-in-Kind Interest				260
Petrichor Financing \| Securities Purchase Agreements \| Convertible Note Borrowings
Term Loans [Line Items]
Maximum borrowing capacity			$ 45,000
Remaining borrowing capacity				$ 20,000
Commitment fee percentage				2.00%
Debt issuance costs				$ 175
Debt discount				(314)
Fair value warrants				$ 441
Cash interest accrual rate over Prime				4.50%
Accrual rate, PIK interest				3.50%
Accrued Paid-in-Kind Interest				$ 260
Petrichor Financing \| Securities Purchase Agreements \| First Closing Note
Term Loans [Line Items]
Borrowings, face amount		$ 5,000
Initial conversion price \| $ / shares		$ 8.11
Premium over 5-day VWAP		20.00%
VWAP term		5 days
Petrichor Financing \| Securities Purchase Agreements \| Second Closing Note
Term Loans [Line Items]
Borrowings, face amount	$ 20,000
Initial conversion price \| $ / shares	$ 7.89
Premium over 5-day VWAP	20.00%
VWAP term	5 days
Petrichor Financing \| Securities Purchase Agreements \| Subsequent Closing Notes
Term Loans [Line Items]
Borrowings, face amount				$ 10,000
Initial conversion price \| $ / shares				$ 7.89
Exercise price of warrants issued \| $ / shares				$ 8.11
Petrichor Financing \| Securities Purchase Agreements \| Subsequent Closing Notes \| Minimum
Term Loans [Line Items]
Number of loan tranches for remaining borrowing capacity				1
Petrichor Financing \| Securities Purchase Agreements \| First Closing Warrant
Term Loans [Line Items]
Commitment fees payable in warrants				50.00%
Common shares available through issuance of warrants \| shares				55,498
Petrichor Financing \| Securities Purchase Agreements \| Second Closing Warrant
Term Loans [Line Items]
Common shares available through issuance of warrants \| shares				55,498
Commitment fees payable in cash or warrants				50.00%
Exercise price of warrants issued \| $ / shares				$ 8.11
Exercise term of warrants				5 years
Bridge Bank \| Bridge Bank Term Loan
Term Loans [Line Items]
Repayment of term loan		$ 5,000	$ 5,000

Term Loans - Aggregate annual payments due on Term Loan (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Aggregate annual payments due on Term Loan
2027	$ 25,000
Total future payments	25,000	$ 5,000
Add: PIK Interest	260
Less: unamortized debt discount	(361)	$ (12)
Total term Loan	$ 24,899

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Term Loans - Summary of term loans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Term Loans
Principal of term loan	$ 25,000	$ 5,000
Less: unamortized debt discount	(361)	$ (12)
Total term Loan	$ 24,899

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Income Taxes - Canadian federal and provincial income tax rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2018
Income Taxes
Domestic (loss)/gain	$ (10,548)	$ (9,122)
Foreign loss	(13,117)	(8,173)
Loss before income taxes	$ (23,665)	$ (17,295)
Expected statutory rate (recovery)	26.50%	26.50%	34.00%
Expected provision for (recovery of) income tax	$ (6,271)	$ (4,583)
Permanent differences	1,170	993
Change in valuation allowance	4,669	3,086
Effect of foreign exchange rate differences		0
Effect of change in future enacted tax rates		0
Tax credits and other adjustments		0
Effect of tax rate changes and other	432	504
Provision for income taxes	$ 0	$ 0

Income Taxes- Future Income Taxes (Recovery) (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Income Taxes Future Recovery Disclosure [Line Items]
Future tax assets gross	$ 38,622	$ 33,953
Less: valuation allowance	(38,596)	(33,927)
Net future tax assets	26	26
SR&ED expenditures [Member]
Income Taxes Future Recovery Disclosure [Line Items]
Future tax assets gross	2,086	2,086
Non refundable Investment Tax Credits [Member]
Income Taxes Future Recovery Disclosure [Line Items]
Future tax assets gross	421	700
Share Issue Costs [Member]
Income Taxes Future Recovery Disclosure [Line Items]
Future tax assets gross	62	77
Income Tax Loss Carry forwards [Member]
Income Taxes Future Recovery Disclosure [Line Items]
Future tax assets gross	34,948	30,007
Fixed and intangible assets [Member]
Income Taxes Future Recovery Disclosure [Line Items]
Future tax assets gross	1,083	1,083
Reserves [Member]
Income Taxes Future Recovery Disclosure [Line Items]
Future tax assets gross	$ 22	$ 0

Income Taxes - Income Tax Loss Carry Forwards And Non-Refundable Investment tax Credits (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Province / State
Income Tax [Line Items]
SR & ED expenditures (no expiry)	$ 0
Province / State \| Year 2023
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2024
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2025
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2026
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2027
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2028
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	4,164
Province / State \| Year 2029
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	2,116
Province / State \| Year 2030
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	700
Province / State \| Year 2031
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	789
Province / State \| Year 2032
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	651
Province / State \| Year 2033
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	655
Province / State \| Year 2034
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	617
Province / State \| Year 2035
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	941
Province / State \| Year 2036
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	1,013
Province / State \| Year 2037
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	1,638
Province / State \| Year 2038
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2039
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2040
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2041
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| Year 2042
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	0
Province / State \| No expiration
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	24,580
Federal \| Year 2023
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	1,588
Investment tax credits (expiry date)	169
Federal \| Year 2024
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	4,849
Investment tax credits (expiry date)	189
Federal \| Year 2025
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	6,143
Investment tax credits (expiry date)	82
Federal \| Year 2026
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	13,868
Investment tax credits (expiry date)	86
Federal \| Year 2027
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	8,136
Investment tax credits (expiry date)	47
Federal \| Year 2028
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	10,509
Federal \| Year 2029
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	8,185
Federal \| Year 2030
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	2,608
Federal \| Year 2031
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	3,378
Federal \| Year 2032
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	3,491
Federal \| Year 2033
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	1,789
Federal \| Year 2034
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	1,812
Federal \| Year 2035
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	1,804
Federal \| Year 2036
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	2,208
Federal \| Year 2037
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	4,641
Federal \| Year 2038
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	5,267
Federal \| Year 2039
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	5,848
Federal \| Year 2040
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	5,792
Federal \| Year 2041
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	5,340
Federal \| Year 2042
Income Tax [Line Items]
Income tax loss carryforwards (expiry date)	6,192
Federal \| No expiration
Income Tax [Line Items]
SR & ED expenditures (no expiry)	7,872
Income tax loss carryforwards (expiry date)	$ 35,974

Income Taxes - Additional Information (Details)	12 Months Ended
Income Taxes - Additional Information (Details)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2018
Income Taxes Disclosure Additional Information [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	26.50%	26.50%	34.00%
Canadian Statutory Income Tax
Income Taxes Disclosure Additional Information [Line Items]
Income tax Rate	26.50%
Federal Income Tax
Income Taxes Disclosure Additional Information [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%
Income tax Rate	15.00%
Provincial Income Tax
Income Taxes Disclosure Additional Information [Line Items]
Income tax Rate	11.50%