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Commitments and Contingencies
 12 Months Ended
Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 6        Commitments and Contingencies

 

  a) Lease

 

During the year ended September 30, 2021 the Company incurred office lease expense of $130,784 (2020: $233,423).

 

b)Employee 401(k) Benefit Plan

 

The Company has a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers all United States based employees. United States based employees eligible to participate in the plan may contribute up to the current statutory limits under the Internal Revenue Service regulations. The 401(k) plan permits the Company to make additional matching contributions on behalf of contributing employees. During the year ended September 30, 2021, the Company made $128,856 (2020: $98,058) in matching contributions under the 401(k) plan.

 

  c) 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.

 

 

The following table summarizes the warrant activity during the years ended September 30, 2021 and 2020:

 

           
      Weighted
      Average
      Exercise Price
   Number of Shares  ($)
Balance, September 30, 2019    350,000    4.19 
Granted    150,000    3.17 
Balance, September 30, 2020    500,000    3.88 
Granted    60,000    12.00 
Exercised    (350,000)   4.19 
Balance, September 30, 2021    210,000    5.69 

 

At September 30, 2021 the Company had share purchase warrants outstanding as follows:

 

            
Number  Exercise Price  Expiry Date
 150,000   $3.17    May 6, 2024 
 60,000   $12.00    April 21, 2026 
 210,000         

 

 

2015 Stock Option Plan

 

On September 18, 2015, the Company’s board of directors approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which provided 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 was 6,050,553 shares, subject to adjustment in the event of a change of the Company’s capitalization. At September 30, 2021, 146,371 (2020: 133,036) options remain available for issue under the 2015 Plan.

 

2019 Stock Option Plan

 

On January 15, 2019, the Board approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which provides for the grant of stock options and restricted stock awards to directors, officers, employees, consultants and advisors of the Company. Under the terms of the 2019 Plan, 6,000,000 additional shares of Common Stock are available for issuance under the 2019 Plan, in addition to the shares available under the 2015 Plan. Any awards outstanding under the 2015 Plan or the Company’s 2007 Stock Option Plan (the “2007 Plan”) will remain subject to and be paid under the 2015 Plan or the 2007 Plan, respectively, and any shares subject to outstanding awards under the 2015 Plan or the 2007 Plan that subsequently cease to be subject to such awards (other than by reason of settlement of the awards in shares) will automatically become available for issuance under the 2019 Plan.

 

 

The 2019 Plan provides that it may be administered by the Board, or the Board 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 2019 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 2019 Plan. At September 30, 2021, 456,332 (2020: 3,161,665) options remain available for issue under the 2019 Plan.

 

A summary of the status of Company’s outstanding stock purchase option activity during the years ended September 30, 2021 and 2020 is presented below:

  

                     
         Weighted   
      Weighted  Average Grant  Aggregate
      Average Exercise  Date Fair  intrinsic value
   Number of Shares  Price ($)  Value ($)  ($)
Outstanding, September 30, 2019    8,462,933    3.58         4,115,032 
Granted    1,695,000    2.96    2.27      
Forfeited    (68,332)   3.01    2.44      
Exercised    (13,335)   3.15    2.61    2,400 
Outstanding, September 30, 2020    10,076,266    3.48         14,982,581 
Granted    2,732,000    12.55    9.32      
Forfeited    (55,834)   3.04    2.43      
Exercised    (1,421,529)   2.89    2.43    24,446,305 
Outstanding, September 30, 2021    11,330,903    5.74         140,132,451 
Exercisable, September 30, 2021    7,228,488    3.73         102,786,851 

 

 

The following summarizes information about stock options at September 30, 2021 by a range of exercise prices:

 

                                
      Number of  Weighted average remaining  Weighted average  Number of  Weighted average
Range of exercise prices  outstanding  contractual life  exercise  vested  exercise
From  To  options  (in years)  price  options  price
$0.92   $2.96    4,309,349    6.25    2.31    3,167,682    2.10 
$3.15   $4.80    2,117,500    6.33    3.30    1,830,836    3.29 
$5.04   $8.98    3,397,054    6.45    6.05    2,207,054    6.35 
$12.00   $13.01    230,000    9.52    12.44    22,916    12.42 
$18.11   $24.58    1,277,000    9.82    19.33    —    — 
           11,330,903              7,228,488      

 

The weighted average grant date fair value of options vested during the year ended September 30, 2021 was $2.54 (2020: $2.55). At September 30, 2021, the weighted average contractual life of options outstanding was 6.79 years (2020: 6.96 years) and for options exercisable was 5.51 years (2020: 6.25 years).

 

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, 2021.

 

The Company recognized stock-based compensation expense of $8,231,403 during the year ended September 30, 2021 (2020: $4,876,906) in connection with the issuance and vesting of stock options and warrants in exchange for services. These amounts have been included in general and administrative expenses and research and development expenses on the Company’s consolidated statements of operations as follows:

 

          
   2021  2020
General and administrative  $3,571,335   $2,210,789 
Research and development  $4,660,068   $2,666,117 
Total stock-based compensation  $8,231,403   $4,876,906 

 

 

An amount of approximately $21,650,000 in stock-based compensation is expected to be recorded over the remaining term of such options and warrants through fiscal 2024.

 

The fair value of each option and warrant award is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions:

 

          
   2021  2020
Risk-free interest rate   0.73%   1.57%
Expected life of options (years)   5.74    5.53 
Annualized volatility   93.43%   95.99%
Dividend rate   0.00%   0.00%

 

The fair value of stock compensation charges recognized during the years ended September 30, 2021 and 2020 was determined with reference to the quoted market price of the Company’s shares on the grant date.