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Commitments

12 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 5

Commitments

a)

Lease Commitment

The Company has entered into an office lease agreement expiring March 31, 2019. The Company is committed to lease commitments as follows:

Fiscal year ending September 30, 2019			$	70,022
			$	70,022

During the year ended September 30, 2018 the Company recorded rent expense of $151,405 (2017: $127,993, 2016: $125,317) which is included in general and administrative expenses on the consolidated statement of operations.

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 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
Issued				350,000			$	4.19
Exercised				(756,143	)		$	2.96
Expired				(524,787	)		$	3.00
Balance, September 30, 2018				678,379			$	2.87

At September 30, 2018, the Company had 678,379 share purchase warrants outstanding, with a weighted average exercise price of $2.87 as follows:

Number			Exercise Price				Expiry Date
30,000			$	4.00			February 24, 2019
277,127			$	1.20			March 13, 2019
1,252			$	1.68			March 13, 2019
12,500			$	1.24			May 31, 2019
7,500			$	1.04			May 31, 2019
350,000			$	4.19			June 30, 2021
678,379

During the year ended September 30, 2018, 350,000 options granted to a consultant to the Company were converted to 350,000 warrants with the same exercise price.

During the year ended September 30, 2018, an aggregate of 737,393 share purchase warrants at $3.00 per share and 18,750 share purchase warrants at $1.24 per share were exercised on a cashless basis, pursuant to which the Company issued 125,748 shares of common stock and an additional 80,981 shares of common stock were to be issued. The remaining 524,787 share purchase warrants exercisable at $3.00 per share until July 5, 2018 expired unexercised.

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.

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 the previously existing stock option plans remain outstanding in accordance with their terms.

The 2015 Plan provides that it may be administered by the board of directors, or the board of directors may delegate such responsibility to a committee. 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	)			4.09
Outstanding at September 30, 2017				5,092,030			$	4.13
Granted				1,730,000			$	2.71			$	2.09
Forfeited				(164,280	)		$	3.66
Exercised				(150,833	)		$	1.18
Outstanding at September 30, 2018				6,506,917			$	3.83
Exercisable at September 30, 2018				4,108,028			$	3.75
Exercisable at September 30, 2017				3,326,223			$	3.10

At September 30, 2018, 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		$	565,000				4.76
	37,500				37,500			$	1.20			May 7, 2024			57,375				5.60
	125,000				125,000			$	1.32			May 8, 2024			176,250				5.60
	618,750				618,750			$	0.92			April 2, 2025			1,119,938				6.51
	29,167				29,167			$	1.44			June 8, 2025			37,625				6.69
	50,000				50,000			$	1.76			June 15, 2025			48,500				6.71
	253,750				253,750			$	5.04			September 18, 2025			—				6.97
	1,500				1,500			$	5.64			September 30, 2025			—				7.00
	31,250				31,250			$	5.68			October 2, 2025			—				7.01
	25,000				25,000			$	8.98			October 16, 2025			—				7.04
	1,500				1,500			$	5.57			December 31, 2025			—				7.25
	1,500				1,500			$	4.90			March 31, 2026			—				7.50
	1,500				1,500			$	5.66			April 27, 2026			—				7.57
	1,500				1,500			$	6.11			June 30, 2026			—				7.75
	379,625				253,083			$	6.26			July 5, 2026			—				7.76
	861,429				574,286			$	7.06			July 18, 2026			—				7.80
	906,696				906,696			$	3.28			September 22, 2026			—				7.98
	60,000				39,999			$	3.63			October 3, 2026			—				8.01
	8,750				8,750			$	4.35			December 9, 2026			—				8.19
	50,000				16,667			$	5.39			February 7, 2027			—				8.36
	40,000				23,333			$	5.26			February 17, 2027			—				8.38
	774,166				389,170			$	5.92			May 12, 2027			—				8.61
	12,500				5,209			$	3.42			August 9, 2027			—				8.86
	15,000				6,250			$	4.33			September 19, 2027			—				8.97
	540,834				135,834			$	3.30			December 13, 2027			—				9.20
	50,000				—			$	2.60			March 2, 2028			6,500				9.42
	200,000				33,334			$	2.72			March 19, 2028			2,000				9.47
	780,000				25,000			$	2.30			May 15, 2028			335,400				9.62
	150,000				12,500			$	2.70			August 6, 2028			4,500				9.85
	6,506,917				4,108,028									$	2,353,088

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, 2018.

The Company recognized stock-based compensation expense of $5,517,004 during the year ended September 30, 2018 (2017: $4,135,570; 2016: $4,452,267) in connection with the issuance and vesting of stock options and warrants in exchange for services, and $Nil (2017: $Nil 2016: $610,000), 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:

		2018				2017				2016
General and administrative		$	2,699,557			$	2,017,199			$	3,208,220
Research and development			2,817,447				2,118,371				1,854,047
Total share based compensation		$	5,517,004			$	4,135,570			$	5,062,267

An amount of approximately $6,827,054 in stock-based compensation is expected to be recorded over the remaining term of such options through June 30, 2021.

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:

		2018				2017				2016
Risk-free interest rate			2.73	%			2.11	%			1.28	%
Expected life of options (years)			5.60				6.86				5.88
Annualized volatility			106.45	%			111.58	%			114.75	%
Dividend rate			0.00	%			0.00	%			0.00	%

The fair value of restricted stock compensation charges recognized during the years ended September 30, 2018, 2017 and 2016 was determined with reference to the quoted market price of the Company’s shares on the commitment date.