XML 27 R13.htm IDEA: XBRL DOCUMENT

Commitments

12 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 6

Commitments

Lease Commitment

The Company is committed to lease payments as follows:

Fiscal year ending September 30,
2018	$	115,189
2019		57,594
	$	172,783

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.

Share Purchase Warrants

A summary of the status of the Company’s outstanding share purchase warrants is presented below:

	Number of Shares			Weighted Average Exercise Price
Balance, October 1, 2015		4,272,890		$	2.11
Exercised		(2,463,581	)	$	1.67
Balance, September 30, 2016		1,809,309		$	2.70
Exercised		(200,000	)	$	3.00
Balance,September 30, 2017		1,609,309		$	2.66

At September 30, 2017, the Company had share purchase warrants outstanding of 1,609,309, with a weighted average exercise price of $2.66 as follows:

Number		Exercise Price		Expiry Date
	1,262,180	$	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
	1,609,309

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.

During the year ended September 30, 2017, 200,000 share purchase warrants were cashless exercised, resulting in the issuance of 52,562 shares of common stock.

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.

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 shall be at least equal to the fair market value on such date. If the grantee is a 10% stockholder on the grant date, then the exercise price shall not be less than 110% of fair market value of the Company’s shares of common stock on the grant date. 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 is presented below:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Outstanding at October 1, 2015		1,822,500		$	2.00
Granted		2,401,500			5.22	$	4.38
Expired		(25,000	)		14.68
Outstanding at September 30, 2016		4,199,000			3.76
Granted		1,107,500			5.51	$	5.44
Forfeited		(214,470	)		4.06
Outstanding at September 30, 2017		5,092,030		$	4.13
Exercisable at September 30, 2017		3,326,223		$	3.10
Exercisable at September 30, 2016		2,290,716		$	2.42

At September 30, 2017, 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	$	1,270,000		5.76
75,000		75,000	$	1.20	May 7, 2024		220,500		6.60
125,000		93,750	$	1.32	May 8, 2024		352,500		6.60
718,750		718,750	$	0.92	April 2, 2025		2,314,375		7.50
29,167		29,167	$	1.44	June 8, 2025		78,751		7.69
50,000		33,333	$	1.76	June 15, 2025		119,000		7.71
266,250		199,688	$	5.04	September 18, 2025		—		7.97
1,500		1,500	$	5.64	September 30, 2025		—		8.00
31,250		20,833	$	5.68	October 2, 2025		—		8.01
25,000		16,666	$	8.98	October 16, 2025		—		8.04
1,500		1,500	$	5.57	December 31, 2025		—		8.25
1,500		1,500	$	4.90	March 31, 2026		—		8.50
1,500		1,500	$	5.66	April 27, 2026		—		8.57
19,697		19,697	$	4.09	May 18, 2026		985		8.63
1,500		1,500	$	6.11	June 30, 2026		—		8.75
379,625		126,542	$	6.26	July 5, 2026		—		8.76
861,429		287,143	$	7.06	July 18, 2026		—		8.80
13,333		13,333	$	3.06	September 7, 2026		14,400		8.94
1,006,696		1,006,696	$	3.28	September 22, 2026		865,759		8.98
69,166		29,164	$	3.63	October 3, 2026		35,275		9.01
15,000		5,000	$	4.35	December 9, 2026		—		9.19
50,000		—	$	5.39	February 7, 2027		—		9.36
40,000		10,000	$	5.26	February 17, 2027		—		9.38
781,667		131,669	$	5.92	May 12, 2027		—		9.61
12,500		1,042	$	3.42	August 9, 2027		9,000		9.86
15,000		1,250	$	4.33	September 19, 2027		—		9.97
5,092,030		3,326,223				$	5,280,544

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, 2017.

The Company recognized stock based compensation expense of $4,135,570 during the year ended September 30, 2017 (2016: $4,452,267; 2015: $413,979) in connection with the issuance and vesting of stock options in exchange for services, and $Nil (2016: $610,000; 2015 $1,220,000), in connection with the vesting of restricted stock 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:

	2017		2016		2015
General and administrative	$	2,017,199	$	3,208,220	$	1,633,979
Research and development		2,118,371		1,854,047		—
Total share based compensation	$	4,135,570	$	5,062,267	$	1,633,979

An amount of approximately $7,964,225 in stock based compensation is expected to be recorded over the remaining term of such options through June 30, 2020.

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:

	2017			2016			2015
Risk-free interest rate		2.11	%		1.28	%		1.63	%
Expected life of options (years)		6.86			5.88			6.30
Annualized volatility		111.58	%		114.75	%		98.41
Dividend rate		0.00	%		0.00	%		0.00	%

The fair value of restricted stock compensation charges recognized during the years ended September 30, 2016 and 2015 was determined with reference to the quoted market price of the Company’s shares on the commitment date.