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Commitments

6 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 6

Commitments

a)

Lease Commitment

The Company is committed to lease payments as follows:

Fiscal year ending September 30,
2017		$	56,094
2018			112,189
2019			56,094
		$	224,377

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 status of 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, March 31, 2017			1,609,309			$	2.66

At March 31, 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 six months ended March 31, 2017, 200,000 share purchase warrants were cashless exercised, resulting in the issuance of 52,562 shares of common stock.

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 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			245,000			$	4.30			$	3.70
Outstanding at March 31, 2017			4,444,000			$	3.80
Exercisable at March 31, 2017			2,608,133			$	2.86
Exercisable at September 30, 2016			2,290,716			$	2.41

At March 31, 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		$	2,070,000				6.26
	75,000				50,000			$	1.20			May 7, 2024			340,500				7.10
	125,000				62,500			$	1.32			May 8, 2024			552,500				7.10
	718,750				479,170			$	0.92			April 2, 2025			3,464,375				8.01
	50,000				29,167			$	1.44			June 8, 2025			215,000				8.19
	50,000				16,667			$	1.76			June 15, 2025			199,000				8.21
	278,750				162,604			$	5.04			September 18, 2025			195,125				8.47
	1,500				1,500			$	5.64			September 30, 2025			150				8.50
	31,250				15,625			$	5.68			October 2, 2025			1,875				8.51
	25,000				12,500			$	8.98			October 16, 2025			-				8.54
	1,500				1,500			$	5.57			December 31, 2025			255				8.75
	1,500				1,500			$	4.90			March 31, 2026			1,260				9.00
	1,500				1,500			$	5.66			April 27, 2026			120				9.07
	50,000				19,697			$	4.09			May 18, 2026			82,500				9.13
	1,500				1,500			$	6.11			June 30, 2026			-				9.25
	379,625				63,271			$	6.26			July 5, 2026			-				9.26
	861,429				143,572			$	7.06			July 18, 2026			-				9.30
	40,000				10,000			$	3.06			September 7, 2026			107,200				9.44
	1,006,696				1,006,696			$	3.28			September 22, 2026			2,476,472				9.48
	140,000				23,331			$	3.63			October 3, 2026			295,400				9.51
	15,000				2,500			$	4.35			December 9, 2026			20,850				9.69
	50,000				-			$	5.39			February 7, 2027			17,500				9.86
	40,000				3,333			$	5.26			February 17, 2027			19,200				9.88
	4,444,000				2,608,133									$	10,059,282

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 March 31, 2017.

The Company recognized stock based compensation expense of $968,893 and $1,858,160, respectively, during the three and six months ended March 31, 2017 (2016: $222,690 and $438,710, respectively) in connection with the issuance and vesting of stock options in exchange for services, and $0 and $0 respectively (2016: $0 and $610,000, respectively), 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:

		Three months ended March 31,								Six months ended March 31,
		2017				2016				2017				2016
General and administrative		$	450,128			$	143,672			$	877,711			$	574,235
Research and development			518,765				79,019				980,449				474,476
Total share based compensation		$	968,893			$	222,690			$	1,858,160			$	1,048,710

An amount of approximately $6,898,526 in stock based compensation is expected to be recorded over the remaining term of such options through December 31, 2019.

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
Risk-free interest rate			1.76	%			1.68	%
Expected life of options (years)			6.79				6.76
Annualized volatility			111.81	%			101.92	%
Dividend rate			0.00	%			0.00	%

The fair value of restricted stock compensation charges during the six months ended March 31, 2016 was determined with reference to the quoted market price of the Company’s shares on the commitment date.