Quarterly report pursuant to Section 13 or 15(d)

FINANCIAL INSTRUMENTS

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FINANCIAL INSTRUMENTS
 3 Months Ended
Feb. 29, 2020
Investments, All Other Investments [Abstract]  
FINANCIAL INSTRUMENTS [Text Block]
17. FINANCIAL INSTRUMENTS
  The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them.
  i) Currency Risk
   

The Company held its cash balances within banks in Canada in both US dollars and Canadian dollars, with banks in the US in US dollars, and with banks in South Africa in US dollars and South African rand. The Company's operations are conducted in the US, Canada and South Africa. The value of the Canadian dollar and South African rand against the US dollar may fluctuate with the changes in economic conditions.
   

During the three months ended February 29, 2020, in comparison to the prior year period, the US dollar strengthened in relation to both the Canadian dollar and South African rand, and upon the translation of the Company's subsidiaries' revenues, expenses, assets and liabilities held in Canadian dollars and South African rand, respectively, the Company recorded a translation adjustment loss of $36,596, which primarily related to the South African rand and Canadian dollar (2019: a loss of $3,740), in other comprehensive loss.
    The Company's Canadian and South African subsidiary revenues, cost of goods sold, operating costs and capital expenditures are denominated in Canadian dollars and South African rand, respectively. Consequently, fluctuations in the US dollar exchange rate against the Canadian dollar and South African rand increases the volatility of sales, cost of goods sold and operating costs and overall net earnings when translated into US dollars. The Company is not using any forward and option contracts to fix the foreign exchange rates. Using a 10% fluctuation in the US exchange rate, the impact on the loss and stockholders’ deficit is not material.
  ii) Credit Risk
    Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable. The Company maintains cash with high credit quality financial institutions located in the US, Canada and South Africa. The Company maintains cash and cash equivalent balances with financial institutions in the United States in excess of amounts insured by the Federal Deposit Insurance Corporation.
    The Company provides credit to its customers in the normal course of its operations. It carries out, on a continuing basis, credit checks on its customers.