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Commitments and Contingencies | 12 Months Ended
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Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies |
Note 9 | Commitments and Contingencies
| a) | Lease Commitment
On September 30, 2015, the Company entered into a sublease agreement commencing October 1, 2015 and expiring August 31, 2016. On August 22, 2016 the sublease agreement was amended and extended to March 31, 2019. The Company is committed to lease payments as follows:
Fiscal year ending September 30, |  | Amount |
2017 |  | $ | 112,189 |
2018 |  |  | 112,189 |
2019 |  |  | 56,094 |
|  | $ | 280,472 |
| b) | Litigation
The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company's consolidated financial statements. The Company does not believe that any of such pending claims and legal proceedings will have a material adverse effect on its consolidated financial statements.
| c) | Share Purchase Warrants
A summary of the Company’s share purchase warrants outstanding is presented below:
|  | Number of Shares |  |  | Weighted Average Exercise Price |
Balance, October 1, 2014 |  |  | 18,728,910 |  |  | $ | 1.59 |
Expired |  |  | (62,500 | ) |  | $ | 1.40 |
Exercised |  |  | (15,468,520 | ) |  | $ | 1.43 |
Issued |  |  | 1,075,000 |  |  | $ | 0.76 |
Balance, September 30, 2015 |  |  | 4,272,890 |  |  | $ | 2.11 |
Exercised |  |  | (2,463,581 | ) |  | $ | 1.67 |
Balance, September 30, 2016 |  |  | 1,809,309 |  |  | $ | 2.70 |
During the year ended September 30, 2016, the Company issued 1,979,246 shares of common stock pursuant to the exercise of 2,421,894 share purchase warrants on a cashless basis, and 41,687 shares of common stock pursuant to the exercise of warrants for cash. At September 30, 2016, the Company had 1,809,309 currently exercisable share purchase warrants outstanding as follows:
Number |  |  | Exercise Price |  |  | Expiry Date
| 1,462,180 |  |  | $ | 3.00 |  |  | July 5, 2018
| 30,000 |  |  | $ | 4.00 |  |  | February 24, 2019
| 277,127 |  |  | $ | 1.20 |  |  | March 13, 2019
| 1,252 |  |  | $ | 1.68 |  |  | March 13, 2019
| 31,250 |  |  | $ | 1.24 |  |  | May 31, 2019
| 7,500 |  |  | $ | 1.04 |  |  | May 31, 2019
| 1,809,309 |  |  |  |  |  |  |
All of the warrants expiring on July 5, 2018 contain a contingent call provision whereby the Company may have the option to call for cancellation of all or any portion of the warrants for consideration equal to $0.001 per share, provided the quoted market price of the Company’s common stock exceeds $6.00 for a period of twenty consecutive trading days, subject to certain minimum volume restrictions and other restrictions as provided in the warrant agreements.
| d) | Stock–based Compensation Plan
2015 Stock Option Plan On September 18, 2015, the Company’s board of directors approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which provides for the grant of stock options and restricted stock awards to directors, officers, employees and consultants of the Company. The maximum number of our common shares reserved for issue under the plan is 6,050,553 shares subject to adjustment in the event of a change of the Company’s capitalization. As a result of the adoption of the 2015 Plan, no further option awards will be granted under any previously existing stock option plan. Stock option awards previously granted under previously existing stock option plans remain outstanding in accordance with their terms. The 2015 Plan is administered by the board of directors, except that it may, in its discretion, delegate such responsibility to a committee of such board. The exercise price will be determined by the board of directors at the time of grant, and the exercise price of each option shall be at least the fair market value on the grant date; provided, however, that in the event that a grantee owns more than 10% of the Company’s common stock as of the date of grant, the exercise price of an option granted to such grantee that is intended to be an incentive stock option shall be not less than 110% of the fair market value on the date of grant. Stock options may be granted under the 2015 Plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by the board, subject to earlier termination in accordance with the terms of the 2015 Plan. A summary of the status of Company’s outstanding stock purchase options for the years ended September 30, 2016 and 2015 is presented below:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Grant Date fair value |
Outstanding at October 1, 2014 |  |  | 792,500 |  |  | $ | 2.82 |  |  |  |  |
Forfeited |  |  | (67,500 | ) |  | $ | 12.00 |  |  |  |  |
Granted |  |  | 1,097,500 |  |  | $ | 2.02 |  |  | $ | 1.66 |
Outstanding at September 30, 2015 |  |  | 1,822,500 |  |  | $ | 2.00 |  |  |  |  |
Forfeited |  |  | - |  |  | $ | - |  |  |  |  |
Granted |  |  | 2,401,500 |  |  | $ | 5.22 |  |  | $ | 4.38 |
Expired |  |  | (25,000 | ) |  | $ | 14.68 |  |  |  |  |
Outstanding at September 30, 2016 |  |  | 4,199,000 |  |  | $ | 3.76 |  |  |  |  |
Exercisable at September 30, 2016 |  |  | 2,290,716 |  |  | $ | 2.41 |  |  |  |  |
Exercisable at September 30, 2015 |  |  | 825,002 |  |  | $ | 1.78 |  |  |  |  |
At September 30, 2016, the following stock options were outstanding:
Number of Shares |  |  |  |  |  |  |  | Aggregate |  |  | Remaining |
|  |  | Number |  |  | Exercise |  |  |  |  | Intrinsic |  |  | Contractual |
Total |  |  | Vested |  |  | Price |  |  | Expiry Date |  | Value |  |  | Life (yrs) |
| 500,000 |  |  |  | 500,000 |  |  | $ | 1.60 |  |  | July 5, 2023 |  |  | 1,015,000 |  |  |  | 6.76 |
| 75,000 |  |  |  | 50,000 |  |  | $ | 1.20 |  |  | May 7, 2024 |  |  | 182,250 |  |  |  | 7.60 |
| 125,000 |  |  |  | 62,500 |  |  | $ | 1.32 |  |  | May 8, 2024 |  |  | 288,750 |  |  |  | 7.60 |
| 718,750 |  |  |  | 479,170 |  |  | $ | 0.92 |  |  | April 2, 2025 |  |  | 1,947,813 |  |  |  | 8.50 |
| 50,000 |  |  |  | 20,834 |  |  | $ | 1.44 |  |  | June 8, 2025 |  |  | 109,500 |  |  |  | 8.69 |
| 50,000 |  |  |  | 16,667 |  |  | $ | 1.76 |  |  | June 15, 2025 |  |  | 93,500 |  |  |  | 8.71 |
| 278,750 |  |  |  | 116,146 |  |  | $ | 5.04 |  |  | September 18, 2025 |  |  | - |  |  |  | 8.97 |
| 1,500 |  |  |  | 1,500 |  |  | $ | 5.64 |  |  | September 30, 2025 |  |  | - |  |  |  | 9.00 |
| 31,250 |  |  |  | 10,416 |  |  | $ | 5.68 |  |  | October 2, 2025 |  |  | - |  |  |  | 9.00 |
| 25,000 |  |  |  | 8,333 |  |  | $ | 8.98 |  |  | October 16, 2025 |  |  | - |  |  |  | 9.04 |
| 1,500 |  |  |  | 1,500 |  |  | $ | 5.57 |  |  | December 31, 2025 |  |  | - |  |  |  | 9.25 |
| 1,500 |  |  |  | - |  |  | $ | 4.90 |  |  | March 31, 2026 |  |  | - |  |  |  | 9.50 |
| 1,500 |  |  |  | 1,500 |  |  | $ | 5.66 |  |  | April 27, 2026 |  |  | - |  |  |  | 9.57 |
| 50,000 |  |  |  | 12,121 |  |  | $ | 4.09 |  |  | May 18, 2026 |  |  | - |  |  |  | 9.63 |
| 1,500 |  |  |  | - |  |  | $ | 6.11 |  |  | June 30, 2026 |  |  | - |  |  |  | 9.75 |
| 379,625 |  |  |  | - |  |  | $ | 6.26 |  |  | July 5, 2026 |  |  | - |  |  |  | 9.76 |
| 861,429 |  |  |  | - |  |  | $ | 7.06 |  |  | July 18, 2026 |  |  | - |  |  |  | 9.80 |
| 40,000 |  |  |  | 3,333 |  |  | $ | 3.06 |  |  | September 7, 2026 |  |  | 22,800 |  |  |  | 9.94 |
| 1,006,696 |  |  |  | 1,006,696 |  |  | $ | 3.28 |  |  | September 22, 2026 |  |  | 352,344 |  |  |  | 9.98 |
| 4,199,000 |  |  |  | 2,290,716 |  |  |  |  |  |  |  |  | $ | 4,011,956 |  |  |  |  |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price of the Company’s stock for the options that were in-the-money at September 30, 2016.
The Company recognized stock based compensation expense of $4,452,267 during the year ended September 30, 2016 (2015: $413,979; 2014: $27,925) in connection with the issuance and vesting of stock options in exchange for services. These amounts have been included in general and administrative expenses and research and development expenses on the Company’s statement of operations as follows:
|  | 2016 |  |  | 2015 |  |  | 2014 |
General and administrative |  | $ | 2,903,220 |  |  | $ | 413,979 |  |  | $ | 27,925 |
Research and development |  |  | 1,549,047 |  |  |  | - |  |  |  | - |
|  | $ | 4,452,267 |  |  | $ | 413,979 |  |  | $ | 27,925 |
An amount of $7,741,573 in stock based compensation is expected to be recorded over the remaining term of such options through December 31, 2018. The fair value of each option award is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Risk-free interest rate |  |  | 1.28 | % |  |  | 1.63 | % |  |  | 2.27 | %
Expected life of options (years) |  |  | 5.88 |  |  |  | 6.30 |  |  |  | 6.81 |
Annualized volatility |  |  | 114.75 | % |  |  | 98.41 |  |  |  | 89.19 |
Dividend rate |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | %

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