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Commitments and Contingencies

12 Months Ended

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	%