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Commitments

9 Months Ended

Jun. 30, 2018

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,
2018			$	34,232
2019				68,463
			$	102,695

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, 2016				1,809,309			$	2.70
Exercised				(200,000	)		$	3.00
Balance, September 30, 2017				1,609,309			$	2.66
Exercised				(18,750	)		$	1.24
Balance, June 30, 2018				1,590,559			$	2.68

At June 30, 2018, the Company had share purchase warrants outstanding of 1,590,559, 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
12,500		$1.24		May 31, 2019
7,500		$1.04		May 31, 2019
1,590,559

Subsequent to June 30, 2018, an aggregate of 737,393 share purchase warrants at $3.00 per share were exercised on a cashless basis, pursuant to which the Company issued 117,150 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.

b)

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, 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				1,930,000				2.98			$	2.56
Forfeited				(7,709	)			4.32
Exercised				(150,833	)			1.18
Outstanding at June 30, 2018				6,863,488			$	3.87
Exercisable at June 30, 2018				3,974,821			$	3.64
Exercisable at September 30, 2017				3,326,223			$	3.10

At June 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		$	510,000				5.01
	37,500				37,500			$	1.20			May 7, 2024			53,250				5.85
	125,000				125,000			$	1.32			May 8, 2024			162,500				5.86
	618,750				618,750			$	0.92			April 2, 2025			1,051,875				6.76
	29,167				29,167			$	1.44			June 8, 2025			34,417				6.94
	50,000				50,000			$	1.76			June 15, 2025			43,000				6.96
	265,208				266,250			$	5.04			September 18, 2025			—				7.22
	1,500				1,500			$	5.64			September 30, 2025			—				7.25
	31,250				28,646			$	5.68			October 2, 2025			—				7.26
	25,000				22,916			$	8.98			October 16, 2025			—				7.30
	1,500				1,500			$	5.57			December 31, 2025			—				7.50
	1,500				1,500			$	4.90			March 31, 2026			—				7.75
	1,500				1,500			$	5.66			April 27, 2026			—				7.82
	19,697				19,697			$	4.09			May 18, 2026			—				7.88
	1,500				1,500			$	6.11			June 30, 2026			—				8.00
	379,625				221,448			$	6.26			July 5, 2026			—				8.01
	861,429				502,500			$	7.06			July 18, 2026			—				8.05
	1,006,696				1,006,696			$	3.28			September 22, 2026			—				8.23
	64,166				39,164			$	3.63			October 3, 2026			—				8.26
	15,000				8,750			$	4.35			December 9, 2026			—				8.44
	50,000				16,667			$	5.39			February 7, 2027			—				8.61
	40,000				20,000			$	5.26			February 17, 2027			—				8.64
	780,000				325,002			$	5.92			May 12, 2027			—				8.87
	12,500				4,167			$	3.42			August 9, 2027			—				9.11
	15,000				5,000			$	4.33			September 19, 2027			—				9.22
	545,000				90,834			$	3.30			December 13, 2027			—				9.45
	50,000				—			$	2.60			March 2, 2028			1,000				9.67
	200,000				16,667			$	2.72			March 19, 2028			—				9.72
	150,000				12,500			$	2.30			March 15, 2028			48,000				9.71
	635,000				—			$	2.30			March 15, 2028			203,200				9.71
	350,000				—			$	4.19			June 18, 2028			—				9.97
	6,863,488				3,974,821									$	2,107,242

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 June 30, 2018.

During the three and nine months ended June 30, 2018, the Company recognized stock-based compensation expense of $1,643,274 and $4,025,412, respectively (2017: $1,159,716 and $3,017,876, 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 June 30,								Nine months ended June 30,
		2018				2017				2018				2017
General and administrative		$	802,591			$	574,470			$	1,999,633			$	1,452,181
Research and development			840,683				585,246				2,025,779				1,565,695
Total share based compensation		$	1,643,274			$	1,159,716			$	4,025,412			$	3,017,876

An amount of approximately $8,597,000 in stock-based compensation is expected to be recorded over the remaining term of such options through June, 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		2.73%		1.98%
Expected life of options (years)		6.84		6.82
Annualized volatility		108.67%		111.67%
Dividend rate		0.00%		0.00%