XML 24 R12.htm IDEA: XBRL DOCUMENT
v3.25.1

Note 6 - Capital Shares | 6 Months Ended
--- | ---
Mar. 31, 2025
Notes to Financial Statements |
Equity [Text Block] | 6. Capital Shares Series B-1 Preferred Shares Offering On February 12, 2025, the Company entered into a Securities Purchase Agreement (Series B-1 Purchase Agreement) with certain investors, including members of the Company’s board of directors and executive officers (the Series B-1 Investors), pursuant to which the Company issued and sold to the Series B-1 Investors in a private placement (the Private Placement), an aggregate of (i) 834 shares (the Series B-1 Preferred Shares) of the Company’s newly designated Series B-1 Convertible Preferred Shares, stated value $10,000 per share, each of which is initially convertible into approximately 5,208 common shares (the Series B-1 Conversion Shares), without par value, of the Company (the Common Shares) at a conversion price of $1.92 per Series B-1 Conversion Share, and (ii) 3,468,746 Common Shares. The purchase price per Series B-1 Preferred Share was $10,000 and the purchase price per Common Share was $1.92. The gross proceeds to the Company were approximately $15.0 million, prior to deducting offering expenses payable by the Company which were allocated between the Series B-1 Preferred Shares and Common Shares based on the market price of the Company’s Common Shares on the issuance date. A Series B-1 Investor will not have the right to convert any portion of its Series B-1 Preferred Shares if, together with its affiliates, it would beneficially own in excess of 4.99%, 9.99% or 19.99% of the number of Common Shares outstanding immediately after giving effect to such conversion. The Series B-1 Purchase Agreement contains customary representations and warranties and agreements of the Company and the Series B-1 Investors and customary indemnification rights and obligations of the parties. The Series B-1 Preferred Shares are presented as permanent shareholders’ equity. The Series B-1 Preferred Shares did not exist in the comparative period; therefore, no prior-period disclosure is presented. Issues and Outstanding Series B-1 Preferred Shares
|  | Series B-1 Preferred Shares (#) |  |  | Series B-1 Preferred Shares |
Six Months Ended March 31, 2025 |  |  |  |  |  |  |  |
Balance - September 30, 2024 |  |  | - |  |  |  | - |
Issuance of Series B-1 Preferred Shares |  |  | 834 |  |  | $ | 8,340,000 |
Series B-1 Preferred Shares issuance costs |  |  | - |  |  |  | (171,937 | )
Balance - March 31, 2025 |  |  | 834 |  |  | $ | 8,168,063 |
Series A-1 Preferred Shares Offering On October 30, 2024, the Company entered into a Securities Purchase Agreement (Series A-1 Purchase Agreement) with an entity controlled by the Company’s Chief Executive Officer, Secretary and member of the board of directors of the Company (Series A-1 Purchaser), pursuant to which the Company agreed to issue and sell to the Series A-1 Purchaser in a private placement, up to $5,000,000 of shares of the Company’s newly designated Series A-1 Convertible Preferred Shares, stated value $10,000 per share (the Series A-1 Preferred Shares), each of which is initially convertible into approximately 2,903 Common Shares (Series A-1 Conversion Shares), at a conversion price of $3.445 per Series A-1 Conversion Share, and warrants (Warrants) to purchase Common Shares (Series A-1 Warrant Shares) at an exercise price of $3.445 per Series A-1 Warrant Share. The Series A-1 Preferred Shares and the Warrants are being sold together in a fixed combination of one Series A-1 Preferred Share and a Warrant to purchase a number of Common Shares equal to 75% of the underlying Series A-1 Conversion Shares at a combined purchase price of $10,272.13 per Series A-1 Preferred Share and related Warrants. Under the Series A-1 Purchase Agreement, the Series A-1 Purchaser has purchased 150 Series A-1 Preferred Shares initially convertible into an aggregate of 435,414 Series A-1 Conversion Shares and Warrants to purchase up to an aggregate of 326,560 Warrant Shares for an aggregate purchase price of $1,540,819. The offering of the Series A-1 Preferred Shares and Warrants was structured as an at-market offering under the rules of The Nasdaq Stock Market. The Series A-1 Purchaser will not have the right to convert any portion of its Series A-1 Preferred Shares if, together with its affiliates, it would beneficially own in excess of 19.99% of the number of Common Shares outstanding immediately after giving effect to such conversion. The Warrants expire five years from the issuance date. The Warrants may only be exercised on a cashless basis if there is no registration statement registering, or the prospectus contained therein is not available for, the issuance or resale of the Common Shares issuable upon exercise of the Warrants to or by the holders thereof. The exercise price of the Warrants is subject to customary antidilution adjustments in the event of share splits, reclassifications, recapitalizations and similar events. The Series A-1 Purchaser will not have the right to exercise any portion of its Warrants if, together with its affiliates, it would beneficially own in excess of 19.99% of the number of Common Shares outstanding immediately after giving effect to such exercise. The Company has the right to require the Series A-1 Purchaser to purchase additional Series A-1 Preferred Shares and Warrants (up to an aggregate investment of $5.0 million); provided however, no more than an aggregate of $2.0 million of Series A-1 Preferred Shares and Warrants may be issued and sold pursuant to the Series A-1 Purchase Agreement without shareholder approval in accordance with applicable Canadian securities laws. The Series A-1 Purchase Agreement contains customary representations and warranties and agreements of the Company and the Series A-1 Purchaser and customary indemnification rights and obligations of the parties. The Company has the option to redeem the Series A-1 Preferred Shares, and upon conversion or liquidation, holders are entitled to receive the stated value plus a 10% annual return on capital, payable in Common Shares at the conversion price, calculated daily until the three-year anniversary of issuance. The Series A-1 Preferred Shares are presented as permanent shareholders’ equity. The total proceeds were allocated between the Series A-1 Preferred Shares and warrants using relative fair value. The fair value of the Series A-1 Preferred Shares was determined as a reference to the fair value of Common Shares on the issuance date and the fair value of the warrants was determined using Black-Scholes option pricing model as detailed below. The Series A-1 Convertible Preferred Shares did not exist in the comparative period; therefore, no prior-period disclosure is presented. Issued and Outstanding Series A-1 Convertible Preferred Shares
|  | Series A-1 Preferred Shares (#) |  |  | Series A-1 Preferred Shares |
Six Months Ended March 31, 2025 |  |  |  |  |  |  |  |
Balance - September 30, 2024 |  |  | - |  |  |  | - |
Issuance of Series A-1 Preferred Shares |  |  | 150 |  |  |  | 998,915 |
Series A-1 Preferred Shares issuance costs |  |  | - |  |  |  | (43,220 | )
Preferred return on Series A-1 Preferred Shares |  |  | - |  |  |  | 62,055 |
Balance - March 31, 2025 |  |  | 150 |  |  | $ | 1,017,750 |
Equity distribution agreements In October 2024, the Company entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC as a sales agent (HCW ATM) pursuant to which the Company may offer and sell, from time to time, Common Shares through an at-the-market equity offering program for up to $3.87 million in gross proceeds. The Company has no obligation to sell any of the Common Shares and may at any time suspend sales or terminate the equity distribution agreement in accordance with its terms. For the six months ended March 31, 2025, the Company sold a total of 304,057 Common Shares pursuant to the agreement for net proceeds of $0.8 million after deducting sales agent commissions of $25,000. The Company has not sold any Common Shares pursuant to the HCW ATM subsequent to March 31, 2025. Black-Scholes option valuation model The Company uses the Black-Scholes option valuation model to determine the fair value of share-based compensation for share options and compensation warrants granted and the fair value of warrants issued. Option valuation models require the input of highly subjective assumptions including the expected price volatility. The Company calculates expected volatility based on historical volatility of the Company’s share price. When there is insufficient data available, the Company uses a peer group that is publicly traded to calculate expected volatility. The Company adopted interest-free rates by reference to the U.S. treasury yield rates. The Company calculated the fair value of share options granted based on the expected life of 5 years considering expected forfeitures during the option term of 10 years. Expected life of warrants is based on warrant terms. The Company did not and is not expected to declare any dividends. Changes in the subjective input assumptions can materially affect the fair value estimates, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s warrants and share options. Warrants A summary of the Company’s warrant activity is as follows:
|  | Number of Warrant Shares (#) |  |  | Weighted Average Exercise Price |
Six Months Ended March 31, 2025 |  |  |  |  |  |  |  |
Balance - September 30, 2024 |  |  | 609,717 |  |  | $ | 21.74 |
Issued |  |  | 326,560 |  |  |  | 3.45 |
Expired |  |  | (1,687 | ) |  |  | 22.40 |
Balance - March 31, 2025 |  |  | 934,590 |  |  | $ | 15.35 |
Six Months Ended March 31, 2024 |  |  |  |  |  |  |  |
Balance - September 30, 2023 |  |  | 720,909 |  |  | $ | 19.51 |
Expired |  |  | (110,122 | ) |  |  | 7.00 |
Balance - March 31, 2024 |  |  | 610,787 |  |  | $ | 21.76 |
The weighted average contractual life remaining on the outstanding warrants at March 31, 2025 is 34 months. The following table summarizes information about the warrants outstanding at March 31, 2025:
Number of Warrants (#) |  |  | Exercise Prices |  |  | Expiry Dates
173,614 |  |  | $ | 10.50 |  |  | December 2025
15,627 |  |  | $ | 56.00 |  |  | February 2026
27,399 |  |  | $ | 31.94 |  |  | March 2027
391,390 |  |  | $ | 24.64 |  |  | September 2027
326,560 |  |  | $ | 3.45 |  |  | October 2029
934,590 |  |  |  |  |  |  |
The fair value of warrants granted during the six months ended March 31, 2025 was estimated using the Black-Scholes option valuation model using the following assumptions:
|  | Six Months Ended March 31, 2025 |
|  | Class A Pref Share |
Risk free interest rate |  |  | 4.14 | %
Expected life |  | 5 years |
Expected share price volatility |  |  | 91.24 | %
Expected dividend yield |  |  | 0.00 | %
Share options The Company adopted an Equity Incentive Compensation Plan in 2019 (the 2019 Plan) administered by the independent members of the board of directors, which amended and restated prior plans. Options, restricted shares and restricted share units are eligible for grant under the 2019 Plan. The total number of shares available for issuance under the terms of the 2019 Plan is 642,737. The remaining number of shares available to grant at March 31, 2025 is 85,329. The Company’s 2019 Plan allows options to be granted to directors, officers, employees and certain external consultants and advisers. Under the 2019 Plan, the option term is not to exceed 10 years and the exercise price of each option is determined by the independent members of the board of directors. Options have been granted under the 2019 Plan allowing the holders to purchase Common Shares of the Company as follows:
|  | Number of Options (#) |  |  | Weighted Average Exercise Price |  |  | Weighted Average Grant Date Fair Value |
Six Months Ended March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |
Balance - September 30, 2024 |  |  | 383,040 |  |  | $ | 24.93 |  |  | $ | 18.33 |
Expired |  |  | (374 | ) |  |  | 246.96 |  |  |  | 246.96 |
Balance - March 31, 2025 |  |  | 382,666 |  |  | $ | 24.66 |  |  | $ | 18.10 |
Six Months Ended March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Balance - September 30, 2023 |  |  | 420,615 |  |  | $ | 25.60 |  |  | $ | 18.84 |
Granted |  |  | 500 |  |  |  | 4.10 |  |  |  | 3.10 |
Forfeited |  |  | (1,333 | ) |  |  | 15.55 |  |  |  | 11.08 |
Expired |  |  | (106 | ) |  |  | 596.82 |  |  |  | 596.82 |
Balance - March 31, 2024 |  |  | 419,676 |  |  | $ | 25.47 |  |  | $ | 18.70 |
During the three and six months ended March 31, 2025, there were no employee or director options granted. During the three and six months ended March 31, 2024, there were 500 employee options granted and no director options granted. The options have a term of 10 years and an exercise price equal to the Nasdaq closing price on the grant date. The weighted average contractual life remaining on the outstanding options at March 31, 2025 is 74 months. The following table summarizes information about the options under the 2019 Plan outstanding and exercisable at March 31, 2025:
Number of Options (#) |  | Exercisable at March 31, 2025 (#) |  |  | Range of Exercise Prices |  | Expiry Dates
37,719 |  | 37,719 |  | C$ | 15.12 |  | August 2027 - Dec 2028
43,031 |  | 43,031 |  | $ | 22.12 |  | Feb 2030
51,006 |  | 51,006 |  | $ | 52.08 - 56.49 |  | September 2030 - Oct 2030
81,041 |  | 81,041 |  | $ | 36.75 - 40.18 |  | March 2025 - Sep 2031
58,753 |  | 57,304 |  | $ | 25.97 |  | March 2025 - Feb 2032
111,116 |  | 70,025 |  | $ | 4.10 - 10.01 |  | March 2025 - Oct 2033
382,666 |  | 340,126 |  |  |  |  |
The options exercisable at March 31, 2025 had a weighted average exercise price of $24.66, no intrinsic value and a weighted average remaining life of 72 months. There were 33,354 options at March 31, 2025 that had not vested with a weighted average exercise price of $7.12, no intrinsic value and a weighted average remaining life of 98 months. The fair value of options granted during the six months ended March 31, 2025 and 2024 was estimated using the Black-Scholes option valuation model using the following assumptions:
|  | Six Months Ended March 31, 2024 |
Risk free interest rate |  |  | 4.92 | %
Expected life |  | 5 years |
Expected share price volatility |  |  | 97.26 | %
Expected dividend yield |  |  | 0.00 | %
The Company recorded $0.1 million and $0.1 million of share-based compensation expenses for the three months ended March 31, 2025 and 2024, respectively and $0.1 million and $0.3 million for the six months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had approximately $0.1 million of unrecognized share-based compensation expense, which is expected to be recognized over a period of 18 months. Restricted share units (RSU) The Company’s 2019 Plan allows restricted share units (RSUs) to be granted to directors, officers, employees and certain external consultants and advisers. Under the 2019 Plan, the RSU term is not to exceed 10 years. The fair value is based on the 5-day VWAP of the Company’s Common Shares up to the date of grant. The following is a summary of changes in the status of RSUs from October 1, 2024 through March 31, 2025:
|  | Number of RSU (#) |  |  | Weighted Average Grant Date Fair Value |
Six Months Ended March 31, 2025 |  |  |  |  |  |  |  |
Balance - September 30, 2024 |  |  | 63,204 |  |  | $ | 5.10 |
Granted |  |  | 37,429 |  |  |  | 2.39 |
Exercised |  |  | (2,486 | ) |  |  | 5.60 |
Balance - March 31, 2025 |  |  | 98,147 |  |  | $ | 4.06 |
Six Months Ended March 31, 2024 |  |  |  |  |  |  |  |
Balance - September 30, 2023 |  |  | 33,045 |  |  | $ | 5.60 |
Granted |  |  | 8,651 |  |  |  | 4.77 |
Balance - March 31, 2024 |  |  | 41,696 |  |  | $ | 5.43 |
The following table summarizes information about the RSUs under the 2019 Plan outstanding and exercisable at March 31, 2025:
|  | Number of RSU (#) |  |  | Expiry Date
Fully-vested RSUs |  |  | 98,147 |  |  | August 2033 - March 2035
All RSUs that were granted vested immediately upon the grant date. The outstanding RSUs can be converted to Common Shares by the holder at any time prior to the expiry date. There is no future unrecorded compensation expense for the RSUs.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for equity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 235 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477968/946-235-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 235 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477968/946-235-50-2 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org/1943274/2147478448/946-505-50-6 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-6 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480008/505-10-S99-1 Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-14 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-14 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 16 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-16 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 + Details
Name: | us-gaap_StockholdersEquityNoteDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration