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Commitments

6 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 5

Commitments

a)

Lease Commitment

The Company is committed to lease payments as follows:

Fiscal year ending September 30,
	2018			$	68,463
	2019				68,463
				$	136,926

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/or 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:

							Weighted Average
			Number of Shares				Exercise Price
Balance, October 1, 2016				1,809,309			$	2.70
Exercised				(200,000	)		$	3.00
Balance, September 30, 2017 and March 31, 2018				1,609,309			$	2.66

At March 31, 2018, 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.

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:

											Weighted
							Weighted				Average
			Number of				Average				Grant Date
			Shares				Exercise Price				Fair Value
Outstanding at October 1, 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				795,000				3.11			$	2.68
Forfeited				(6,667	)			4.20
Exercised				(13,333	)			3.06
Outstanding at March 31, 2018				5,867,030			$	4.00
Exercisable at March 31, 2018				3,782,650			$	3.45
Exercisable at September 30, 2017				3,326,223			$	3.10

During the six months ended March 31, 2018, 13,333 stock options exercisable at $3.06 were exercised on a cashless basis into 970 shares of common stock.

Subsequent to March 31, 2018, 100,000 stock options exercisable at $0.92 per share, 37,500 stock options exercisable at $1.20 per share, and 18,750 stock options exercisable at $1.24 per share, were exercised on a cashless basis into an aggregate of 86,274 shares of common stock.

At March 31, 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		$	580,000				5.26
	75,000				75,000			$	1.20			May 7, 2024			117,000				6.10
	125,000				93,750			$	1.32			May 8, 2024			180,000				6.11
	718,750				718,750			$	0.92			April 2, 2025			1,322,500				7.01
	29,167				29,167			$	1.44			June 8, 2025			38,500				7.19
	50,000				33,333			$	1.76			June 15, 2025			50,000				7.21
	266,250				244,063			$	5.04			September 18, 2025			—				7.47
	1,500				1,500			$	5.64			September 30, 2025			—				7.50
	31,250				26,042			$	5.68			October 2, 2025			—				7.51
	25,000				20,833			$	8.98			October 16, 2025			—				7.55
	1,500				1,500			$	5.57			December 31, 2025			—				7.75
	1,500				1,500			$	4.90			March 31, 2026			—				8.00
	1,500				1,500			$	5.66			April 27, 2026			—				8.07
	19,697				19,697			$	4.09			May 18, 2026			—				8.13
	1,500				1,500			$	6.11			June 30, 2026			—				8.25
	379,625				189,813			$	6.26			July 5, 2026			—				8.26
	861,429				430,715			$	7.06			July 18, 2026			—				8.30
	1,006,696				1,006,696			$	3.28			September 22, 2026			—				8.48
	64,166				34,166			$	3.63			October 3, 2026			—				8.51
	15,000				7,500			$	4.35			December 9, 2026			—				8.69
	50,000				16,667			$	5.39			February 7, 2027			—				8.86
	40,000				16,666			$	5.26			February 17, 2027			—				8.88
	780,000				260,000			$	5.92			May 12, 2027			—				9.11
	12,500				3,125			$	3.42			August 9, 2027			—				9.36
	15,000				3,750			$	4.33			September 19, 2027			—				9.47
	545,000				45,417			$	3.30			December 13, 2027			—				9.70
	50,000				—			$	2.60			March 2, 2028			8,000				9.92
	200,000				—			$	2.72			March 19, 2028			8,000				9.97
	5,867,030				3,782,650									$	2,304,000

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, 2018.

During the three and six months ended March 31, 2018, the Company recognized stock-based compensation expense of $1,225,696 and $2,347,681, respectively (2017: $968,893 and $1,858,160, respectively) 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:

		Three months ended March 31,								Six months ended March 31,
		2018				2017				2018				2017
General and administrative		$	625,679			$	450,128			$	1,197,041			$	877,711
Research and development			600,017				518,765				1,150,640				980,449
Total share based compensation		$	1,225,696			$	968,893			$	2,347,681			$	1,858,160

An amount of approximately $8,067,929 in stock-based compensation is expected to be recorded over the remaining term of such options through March 31, 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
Risk-free interest rate			2.43	%			1.76	%
Expected life of options (years)			6.57				6.79
Annualized volatility			112.23	%			111.81	%
Dividend rate			0.00	%			0.00	%