3. SIGNIFICANT ACCOUNTING POLICIES (Continued) 

h) Share-based Payments 

The Company has a stock option plan that is describ ed in Note 6(b). Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods using the graded vesting method. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The amount recognized as an expense is adjusted to reflect the number of awards expected to vest. The offset to the recorded cost is to share-based payments reserve. Consideration received on the exercise of stock options is recorded as share capital and the related share -based payments reserve is transferred to share capital. 

i) Financial Instruments 

(i) Financial assets 

The Company classifies its financial assets in the following categories: held -to-maturity, fair value through profit or loss, loans and receivables, and available-for-sale (“AFS”). The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at recognition. 

## Held-to-maturity 

Held-to-maturity financial assets are reco gnized on a trade-date basis and are initially measured at fair value using the effective interest rate method. The Company has no assets classified as held-to-maturity. 

## Financial assets at fair value through profit or loss 

Financial assets at fair val ue through profit or loss are initially recognized at fair value with changes in fair value recorded through income. Cash is included in this category of financial assets. 

## Loans and receivables 

Loans and receivables are non -derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets or non -current assets based on their maturity date. Loans and receivables are carri ed at amortized cost using the effective interest rate method, less any impairment. 

## Available-for-sale financial assets 

AFS financial assets are non -derivatives that are either designated as AFS or not classified in any of the other financial asset cat egories. Changes in the fair value of AFS financial assets are recognized as other comprehensive income and classified as a component of equity. The Company has no assets classified as AFS. 

