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6-K
CIPHER PHARMACEUTICALS INC filed this Form 6-K on 11/15/2016
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6ACCOUNTS PAYABLE AND ACCRUED LIABILITIES AND PROVISIONS

 

   As at   As at 
   Sept 30, 2016   Dec 31, 2015 
   $   $ 
         
Trade accounts payable   10,988    10,725 
Accrued liabilities   2,699    2,629 
    13,687    13,354 

 

Provisions relate to estimates made for returns, rebates and other price adjustments. Although the estimates for rebates and other price adjustments relate to revenue recognition transactions, namely product sales, the payments made for the underlying transactions are made directly to the claimants concerned and not to the original customer. The recorded provisions are for the uninvoiced portion of these costs and estimates. The provision for product returns relates to potential returns due to expiration or other return rights under the terms of distribution and supply agreements with customers. The adequacy of the provisions are evaluated based on product sales activity, pricing and estimates of expiring products in the distribution chain.

 

7SHARE CAPITAL

 

Authorized share capital

 

The authorized share capital consists of an unlimited number of preference shares, issuable in series, and an unlimited number of voting common shares, with no par value.

 

The Company has three stock-based compensation plans: the Stock Option Plan ("SOP"), the Employee Share Purchase Plan ("ESPP") Restricted Share Units and Performance Share Units ("PR Plan"). Full descriptions of the four stock-based compensation plans are included in Note 13 “Share Capital” to the Company’s annual consolidated financial statements for the year ended December 31, 2015.

 

On May 6, 2016, shareholders of Cipher approved resolutions which provide that the maximum number of common shares issuable in aggregate pursuant to outstanding awards or grants under the SOP, the ESPP and the PR Plan at any time shall be 15% of the number of common shares then issued and outstanding.

 

Share purchase plan

 

The Company's ESPP was established to allow employees and directors to share in the growth of the Company through share ownership. Through the ESPP, employees and directors may contribute amounts to purchase shares of the Company at a 15% discount from the prevailing trading price. Plan members must hold their shares for a period of at least six months before they can be sold. The shares issued under the ESPP are new shares issued from treasury.

 

During the three month period ended September 30, 2016, 24,456 shares were issued under the ESPP (28,498 in Q3 2015). Included in share-based compensation expense is $17 ($10 in Q3 2015), which represents the discount on the shares issued during the period.

 

During the nine month period ended September 30, 2016, 82,157 shares were issued under the ESPP (37,383 in 2015). Included in share- based compensation expense is $59 ($25 in 2015), which represents the discount on the shares issued during the period.

 

Stock option plan

 

The following is a summary of the changes in the stock options outstanding from January 1, 2015 to September 30, 2016:

 

   Number of   Weighted average 
   options   exercise price 
   (in thousands)   $ 
         
Balance outstanding - January 1, 2015   1,284    4.03 
Granted in 2015   533    9.79 
Exercised in 2015   (315)   1.96 
Forfeited in 2015   (88)   8.33 
Balance outstanding - December 31, 2015   1,414    6.39 
           
Granted during the period   688    4.94 
Exercised during the period   (116)   2.49 
Forfeited/expired during the period   (191)   6.50 
Balance outstanding - September 30, 2016   1,795    5.68 

 

At September 30, 2016, 763,287 options were fully vested and exercisable (546,100 at September 30, 2015).