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Capital Stock
 9 Months Ended
Jun. 30, 2015
Capital Stock [Text Block]
Note 6 Capital Stock

Authorized

On March 26, 2015, the Company received stockholder approval to approve an amendment to the Company’s articles of incorporation to increase the Company’s authorized common stock from 150,000,000 to 400,000,000 shares.

Equity Transactions

On October 22, 2014, the Company entered into a Securities Purchase Agreement (the “10/14 Purchase Agreement”) with one investor for an equity investment of $500,000 at a price of $0.25 per unit. Pursuant to the terms of the 10/14 Purchase Agreement, the Company agreed to sell, and the Investor agreed to purchase, 2,000,000 shares of common stock. In addition, the Company agreed to issue an aggregate of 4,000,000 stock purchase warrants, of which 2,000,000 are exercisable at $0.30 per share and 2,000,000 are exercisable at $0.42 per share, each for a period of five years, subject to normal adjustment for stock splits, combinations, and reclassification events.

As discussed in Note 5, the warrants issued were required to be accounted for as derivative liabilities at their date of issuance, pursuant to the guidance of ASC 815. Consequently, the Company allocated the proceeds from the issuance of the units first to the warrants, at their fair value of $527,000 with an amount of $2,000 being allocated to equity at par value. The $29,000 excess of the sum of fair value and par value over the proceeds received of $500,000 was recorded as a component of financing related charges and adjustments on the statement of operations during the nine months ended June 30, 2015. The fair value of the warrants was determined based on the binomial option pricing model using the following weighted average assumptions: risk-free interest rate: 1.46%, expected life: 5 years, expected volatility: 100.21%, dividend yield: 0%.

The Company paid a finder’s fee of $50,000 in connection with the 10/14 Purchase Agreement. This amount was expensed as a component of financing related charges and adjustments during the nine months ended June 30, 2015.

On February 28, 2014, the Company received $30,000 in share subscriptions in respect of the issuance of 100,000 units at $0.30 per unit. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase additional common shares at $0.75 per share for a period of five years from the date of issuance. These shares were issued during the nine months ended June 30, 2015.

On March 16, 2015, pursuant to an anti-dilution provision contained in private placement subscription agreements dated May 31, 2012, the Company adjusted the price of 2,634,447 shares of common stock from $0.50 to $0.25 per share. Consequently, the Company issued 2,634,447 shares of common stock for no additional consideration.

Common stock to be issued

Included in common stock to be issued at June 30, 2015 is an amount of $610,000 (September 30, 2014: $610,000) related to 1,000,000 of common stock issuable to a director and officer of the Company pursuant to the terms of an employment agreement with that director and officer (Note 8).

Also included in common stock to be issued at June 30, 2015 is an amount of $167,415 (September 30, 2014: nil) related to the application of an incorrect conversion price to conversion notices received during the nine months ended June 30, 2015. These shares were issued subsequent to June 30, 2015.