On February 22, 2021, the Company completed an underwritten public offering for aggregate gross proceeds of $149,999,985 (the “February 2021 Financing”). The Company issued a total of 5,555,555 common shares of the Company at a public offering price of $27.00 per share, which includes the underwriters having exercised their 30-day option to purchase an additional 724,637 common shares. In connection with the February 2021 Financing, the Company paid cash commissions of $8,999,999 and incurred other transaction costs of $229,451.

On July 31, 2020, the Company completed an underwritten public offering for aggregate gross proceeds of $48,990,000 (the “July 2020 Financing”). The Company issued a total of 7,100,000 common shares of the Company at a public offering price of $6.00 per share. Additionally, the underwriters exercised a 30-day option to purchase up to an additional 1,065,000 common shares. In connection with the July 2020 Financing, the Company paid cash commissions of $2,939,400 and incurred other transaction costs of $212,256.

On August 27, 2019, the Company closed a public offering of equity securities of the Company in Canada and a concurrent private placement of equity securities in the United States (the “August 2019 Financing”). The Company issued a total of 6,080,596 common shares and 11,919,404 pre-funded warrants in lieu of common shares of the Company at a price of $2.00 per security for aggregate gross proceeds of $36,000,000. Each pre-funded warrant entitles the holder thereof to acquire one common share at a nominal exercise price for a period of five years. In connection with the August 2019 Financing, the Company paid cash commissions of $1,978,770 and incurred other transaction costs of $698,162.

In connection with a January 2016 private placement of 227,273 Units, a Unit consisting of one common share, one 7-year warrant and one-half of one 2-year warrant, of the Company, Clarus Lifesciences III, L.P. (“Clarus”) acquired 106,061 common shares. Clarus is entitled to nominate two directors to the board of directors of the Company, one of which must be an independent director and preapproved by the Company. These nomination rights will continue for so long as Clarus holds greater than or equal to 53,030 common shares, subject to adjustment in certain circumstances.

The Company has adopted a Restricted Share Unit Plan (“RSU Plan”) consistent with the policies and rules of the Nasdaq. Pursuant to the RSU Plan, RSUs may be granted with vesting criteria and periods are approved by the Board of Directors at its discretion. The RSUs issued under the RSU Plan may be accounted for as either equity-settled or cash-settled share-based payments. At June 30, 2021, there are no RSUs outstanding.

As of June 30, 2021 the Stock Option Plan and RSU Plan have a combined maximum of 7,342,788 common shares which may be reserved for issuance.

The Company has adopted an Employee Share Purchase Plan (“ESPP”) under which qualifying employees may be granted purchase rights (“Purchase Rights”) to the Company’s common shares at not less of 85% of the market price at the lesser of the date the Purchase Right is granted or exercisable. The Company currently holds offerings consisting of nine-month periods commencing on January 1 and July 1 and ending on June 30 and December 31 of each calendar year. As of June 30, 2021, the ESPP has a maximum of 252,418 (2020 – 284,887) common shares reserved for issuance.

Eligible employees are able to contribute up to 15% of their gross base earnings for purchases under the ESPP through regular payroll deductions. Purchase of shares under the ESPP are limited for each employee at $25,000 worth of the Company’s common shares (determined using the lesser of (i) the market price of a common share on the first day of an applicable purchase period and (ii) the market price of a common share on the purchase date) for each calendar year in which a purchase right is outstanding.

During the nine months ended June 30, 2021, the Company issued 10,702 shares (2020 – 16,506) upon the exercise of Purchase Rights. The Company recognizes compensation expense for purchase rights on a straight-line basis over the service period.

The Company measures the purchase rights based on their estimated grant date fair value using the Black-Scholes option pricing model and the estimated number of shares that can be purchased. The following weighted average assumptions were used for the valuation of purchase rights:

The Company has adopted a Stock Option Plan consistent with the policies and rules of the Nasdaq. Pursuant to the Stock Option Plan, options may be granted with expiry terms of up to 10 years, and vesting criteria and periods are approved by the Board of Directors at its discretion. The options issued under the Stock Option Plan are accounted for as equity-settled share-based payments.

*	Options exercisable in Canadian dollars as of June 30, 2021 are translated at current rates to reflect the current weighted average exercise price in US dollars for all outstanding options.

At June 30, 2021, options were outstanding enabling holders to acquire common shares as follows:


			Weighted average remaining
	Exercise price	Number of options	contractual life (years)

$	2.20	4,584	7.95
$	3.23	3,794,603	8.27
$	3.59	26,667	8.30
$	3.81	185,816	7.62
$	4.00	539,518	6.48
$	4.67	183,511	8.34
$	7.00	1,508,146	9.45
$	13.96	190,000	9.54
$	29.63	100,000	9.83
$	31.62	75,000	9.92
C$	4.90	163,154	6.06
C$	5.06	32,231	7.62
		6,803,230	8.40

Share-based compensation

During the nine months ended June 30, 2021, the Company granted a total of 1,889,646 (2020 – 4,218,000) stock options with a weighted average fair value of $9.87 per option (2020 – $3.31).

The Company recognized share-based payments expense for options granted and vesting, net of recoveries on cancellations of unvested options, during the three months ended June 30, 2021 and 2020 with allocations to its functional expense as follows:


	For the three months				For the nine months
	ended June 30,				ended June 30,
	2021			2020	2021			2020

Research and development expense	$	1,234,669	$	363,527	$	2,299,369	$	1,539,851
General and administrative		1,522,769		1,080,540		4,294,101		4,736,318

	$	2,757,438	$	1,444,067	$	6,593,470	$	6,276,169

The following weighted average assumptions were used for the Black-Scholes option-pricing model valuation of stock options granted:




	2021			2020

Risk-free interest rate		0.44	%	1.54	%
Expected life of options		10.00	years	10.00	years
Expected annualized volatility		78.16	%	77.00	%
Dividend		—		—

Warrants

Warrant transactions are summarized as follows:


		Weighted
	Number	Average
	of Warrants	Exercise Price

Balance, September 30, 2019	12,393,092	$	1.31
Warrants exercised	(3,120,115)		(0.08)

Balance, September 30, 2020	9,272,977	$	1.73
Warrants exercised	(3,913,227)		(0.10)

Balance outstanding and exercisable, June 30, 2021	5,359,750	$	2.92

At June 30, 2021, warrants were outstanding enabling holders to acquire common shares as follows:


Number
of Warrants		Exercise Price		Expiry Date

227,273	⁽¹⁾	US$	66.00	January 14, 2023
7,477		US$	42.80	November 18, 2023
80,000		US$	4.00	January 9, 2023
5,045,000	⁽²⁾	US$	0.0001	August 23, 2024
5,359,750

(1)	Detailed terms of the 2016 Warrants are included in Note 9.

(2)	2,125,000 prefunded warrants exercised subsequent to June 30, 2021. (Note 14)