Share Capital | 12 Months Ended |
Aug. 31, 2014 |
Equity [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
| 8 | Share Capital | | | | | | | | | | |
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Authorized: unlimited common shares without par value. |
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Private Placements During the Year Ended August 31, 2014: |
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The Company closed a private placement and issued 11,428,570 units for total gross proceeds of $12,000,000, completed in two closings. The private placement included a brokered portion sold to institutional and accredited investors totaling $5,000,000 (4,761,903 units) (the “brokered offering”) and a non-brokered portion totaling $7,000,000 (6,666,667 units) (the “non-brokered offering”). The non-brokered offering included a $5,000,000 investment by a privately-held Taiwan biopharmaceuticals manufacturer. Each unit, sold for $1.05, consisted of (i) one share of the Company’s common shares and (ii) one half of a share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to purchase one additional share of the Company’s common shares at a purchase price of $1.35 for a period of three years from the issuance date of the Warrants. Subject to additional requirements imposed by the United States Securities Act of 1933, as amended requiring longer hold-periods on certain of the securities for resale by U.S. subscribers in the U.S. market and a lock-up agreement with certain holders of the securities, the securities issued in the initial closing (2,857,143 brokered offering units, 6,666,667 non-brokered offering units, and 200,000 broker warrants) were subject to a hold period that expired January 10, 2014 and the securities issued in the final closing (1,904,760 brokered offering units and 133,333 broker warrants) were subject to a hold period that expired January 21, 2014. The Company issued 333,333 broker warrants valued at $387,000 using the Black Scholes model and paid $521,000 cash share issuance costs in relation to the private placement. |
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Private Placements During the Year Ended August 31, 2013: |
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| a) | In October 2012, the Company issued 4,000,000 units at a price of CDN$0.25 per unit for total gross proceeds of $1,007,900 (CDN$1,000,000). Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each warrant entitles the holder to purchase one common share of the Company at a price of CDN$0.40 and is exercisable on or before October 25, 2015. The warrants were valued at $831,000. The Company issued 400,000 broker units valued at $91,000 and paid $50,000 of cash share issuance costs in relation to the private placement. | | | | | | | | | | |
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| b) | In January 2013, the Company issued 1,998,400 units at a price of CDN$0.25 per unit for total gross proceeds of $502,098 (CDN$499,600). Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each warrant entitles the holder to purchase one common share of the Company at a price of CDN$0.40 and is exercisable on or before January 4, 2016. The warrants were valued at $448,000. The Company issued 97,200 broker units valued at $24,000 and paid $24,000 of cash share issuance costs in relation to the private placement. | | | | | | | | | | |
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| c) | In April 2013, the Company issued 3,260,000 units at a price of CDN$0.50 per unit for total gross proceeds of $1,605,877 (CDN$1,630,000). Each unit consisted of one common share of the Company and one half of a transferable share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of CDN$0.75 and is exercisable on or before October 2, 2014. The warrants were valued at $470,000. The Company issued 102,000 broker units valued at $36,000 and paid $50,000 of cash share issuance costs in relation to the private placement. | | | | | | | | | | |
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Performance Shares |
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There were 10,000,000 common shares were allotted for officers, directors and employees of the Company based on meeting milestones related to completion of method development for commercial-scale manufacture of KLH, compilation and regulatory submittal of all required chemistry, manufacturing and control data and completion of preclinical toxicity and immunogenicity testing of products under a performance share plan (the “Performance Share Plan”). Share-based compensation was recorded over the estimated vesting period. |
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No amounts were recorded as share-based compensation during the years ended August 31, 2014 or 2013 since the performance shares had fully vested during the prior years. Share-based compensation expense for the year ended August 31, 2012 was $1,209,000. |
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During the year ended August 31, 2011, the Company determined that one of the three milestones set forth in the Performance Share Plan was successfully met and the Board authorized the issuance of an aggregate of 3,333,335 common shares of the Company to all participants in the Performance Share Plan. Accordingly, $930,000 was transferred from accumulated share-based compensation to common shares. |
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During the year ended August 31, 2012, the Company determined that it had successfully met the final two milestones set forth in the Performance Share Plan and issued an aggregate of 1,313,130 common shares of the Company to non-director participants in the Performance Share Plan. Accordingly, $366,363 was transferred from accumulated share-based compensation to common shares. |
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During the year ended August 31, 2014, the Company issued 1,515,152 common shares of the Company to a former director named in the Performance Share Plan. Accordingly, $422,728 was transferred from accumulated share-based compensation to common shares. |
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At August 31, 2014, there are 3,838,383 performance shares outstanding to be issued. |
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License Agreement |
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During the year ended August 31, 2013, the Company entered into a license agreement and issued 371,200 common shares and warrants to purchase up to 278,400 of the Company’s common shares to the licensor. Each warrant entitles the holder to purchase one common share of the Company at a price of CDN$1.25 per share on or before January 23, 2015. The common shares were subject to a hold period that ended on November 25, 2013. The value of the shares and warrants were recorded as research and development expense. |
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Black-Scholes option valuation model |
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The Company uses the Black-Scholes option valuation model to determine the fair value of warrants, broker units and stock options. Option valuation models require the input of highly subjective assumptions including the expected price volatility. The Company has used historical volatility to estimate the volatility of the share price. 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, broker units and stock options. |
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Warrants |
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A summary of the Company’s warrants activity is as follows: |
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| | Number of | | Weighted | | | | | |
Warrants | Average | | |
| Exercise Price | | |
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Balance - August 31, 2012 | | | 7,713,000 | | $ | 1.02 | | CDN $ | | |
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Granted | | | 7,908,300 | | | 0.5 | | CDN $ | | |
Exercised | | | -2,735,000 | | | 0.57 | | CDN $ | | |
Expired | | | -1,560,000 | | | 0.53 | | CDN $ | | |
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Balance - August 31, 2013 | | | 11,326,300 | | $ | 0.57 | | CDN $ | | |
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Granted | | | 38,100 | | | 0.46 | | CDN $ | | |
Granted | | | 6,047,612 | | | 1.33 | | | | |
Exercised | | | -5,832,300 | | | 0.68 | | CDN $ | | |
Exercised | | | -60,000 | | | 1.35 | | | | |
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Balance - August 31, 2014 | | | 11,519,712 | | $ | 0.97 | | CDN $ | | |
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The weighted average contractual life remaining on the outstanding warrants at August 31, 2014 is 1.57 years. |
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The following table summarizes information about the warrants outstanding at August 31, 2014: |
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Exercise Price | | Number of | | Expiry Date | | | | | | | | |
Warrants | | | | | | |
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CDN$0.75 | | 975,300 | | 2-Oct-14 | | | | | | | | |
CDN$1.25 | | 278,400 | | 23-Jan-15 | | | | | | | | |
CDN$0.40 | | 4,000,000 | | 25-Oct-15 | | | | | | | | |
CDN$0.40 | | 278,400 | | 4-Jan-16 | | | | | | | | |
$1.35 | | 4,701,902 | | 9-Sep-16 | | | | | | | | |
$1.05 | | 200,000 | | 9-Sep-16 | | Broker warrants | | | | | | |
$1.35 | | 952,377 | | 20-Sep-16 | | | | | | | | |
$1.05 | | 133,333 | | 20-Sep-16 | | Broker warrants | | | | | | |
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| | 11,519,712 | | | | | | | | | | |
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Warrant Liability |
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Equity offerings conducted by the Company in prior years included the issuance of warrants with exercise prices denominated in Canadian dollars. The Company’s functional currency is in U.S. dollars. As a result of having exercise prices denominated in other than the Company’s functional currency, these warrants meet the definition of derivatives and are therefore classified as derivative liabilities measured at fair value with adjustments to fair value recognized through the consolidated statements of operations. As these warrants are exercised, the fair value of the recorded warrant liability on date of exercise is included in common shares along with the proceeds from the exercise. If these warrants expire, the related decrease in warrant liability is recognized in profit or loss, as part of the change in fair value of warrant liability. There is no cash flow impact as a result of this accounting treatment. |
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The fair value of the warrants is determined using the Black-Scholes option valuation model at the end of each reporting period. Upon exercise of the warrants, the fair value of warrants included in derivative liabilities is reclassified to equity. |
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The fair value of warrants exercised during the years ended August 31, 2014, 2013 and 2012 was determined using the Black-Scholes option valuation model, using the following weighted average assumptions: |
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| | 2014 | | | 2013 | | | 2012 | |
Risk free interest rate | | | 1.07 | % | | | 1.23 | % | | | 2.49 | % |
Expected life (years) | | | 0.27 | | | | 1.17 | | | | 0.11 | |
Expected share price volitility | | | 106 | % | | | 111 | % | | | 110 | % |
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There were no warrants granted during the year ended August 31, 2012. The fair value of warrants granted during the years ended August 31, 2014 and 2013 was determined using the Black-Scholes option valuation model, using the following weighted average assumptions at the date of the grant: |
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| | 2014 | | | 2013 | | | | | |
Risk free interest rate | | | 1.48 | % | | | 1.18 | % | | | | |
Expected life (years) | | | 3 | | | | 2.76 | | | | | |
Expected share price volitility | | | 112 | % | | | 123 | % | | | | |
Expected dividend yield | | | 0 | % | | | 0 | % | | | | |
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Broker units |
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The Company granted broker units as finders’ fees in conjunction with equity offerings in prior years. Broker units are fully vested when granted and allow the holders to purchase equity units. A unit consists of one common share and either one whole warrant or one half warrant. |
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A summary of broker units activity is as follows: |
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| | Number of | | Weighted | | | | | | |
Units | Average | | | |
| Exercise Price | | | |
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Balance - August 31, 2012 | | | 345,600 | | $ | 0.6 | | CDN $ | | | | |
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Granted | | | 599,200 | | | 0.29 | | CDN $ | | | | |
Exercised | | | -3,000 | | | 0.5 | | CDN $ | | | | |
Expired | | | -345,600 | | | 0.6 | | CDN $ | | | | |
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Balance - August 31, 2013 | | | 596,200 | | $ | 0.29 | | CDN $ | | | | |
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Exercised | | | -45,000 | | | 0.33 | | CDN $ | | | | |
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Balance - August 31, 2014 | | | 551,200 | | $ | 0.29 | | CDN $ | | | | |
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The weighted average contractual life remaining on the outstanding broker units is 1.01 years. |
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The following table summarizes information about the broker units outstanding at August 31, 2014: |
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Exercise Price | | Number of | | Expiry Date | | | | | | | |
Units | | | | | | | |
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CDN$0.50 | | 85,200 | | 2-Oct-14 | | | | | | | |
CDN$0.25 | | 400,000 | | 25-Oct-15 | | | | | | | |
CDN$0.25 | | 66,000 | | 4-Jan-16 | | | | | | | |
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| | 551,200 | | | | | | | | | | |
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The broker units expiring October 2, 2014 include one-half warrant. The broker units expiring October 25, 2015 and January 4, 2016 include one warrant. |
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There were no broker units granted during the years ended August 31, 2014 or 2012. The estimated fair value of the broker units granted during the year ended August 31, 2013 was determined using a Black-Scholes option valuation model with the following weighted average assumptions: |
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| | 2013 | | | | | | | | | |
Risk free interest rate | | | 1.17 | % | | | | | | | | |
Expected life (years) | | | 2.83 | | | | | | | | | |
Expected share price volitility | | | 123 | % | | | | | | | | |
Expected dividend yield | | | 0 | % | | | | | | | | |
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The weighted average fair value of broker units awarded during the year ended August 31, 2013 was CDN$0.25. |
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Options |
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The Company has a 2013 fixed stock option plan (“the Plan”) to be administered by the Board of Directors, which has the discretion to grant up to an aggregate of 10,000,000 options. The exercise price of an option is set at the closing price of the Company’s common shares on the date of grant. Stock options granted to directors, officers, employees and consultants are subject to the following vesting schedule: |
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| (a) | One-third shall vest immediately; | | | | | | | | | | |
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| (b) | One-third shall vest 12 months from the date of grant; and | | | | | | | | | | |
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| (c) | One-third shall vest 18 months from the date of grant. | | | | | | | | | | |
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Stock options granted to investor relations consultants vest over a period of not less than 12 months as to 25% on the date that is three months from the date of grant, and a further 25% on each successive date that is three months from the date of the prior vesting. |
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Options have been issued under the Plan allowing the holders to purchase common shares of the Company as follows: |
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| | Number of | | Weighted | | | | | | |
Options | Average | | | |
| Exercise Price | | | |
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Balance - August 31, 2012 | | | 5,789,200 | | $ | 0.42 | | CDN $ | | | | |
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Granted | | | 1,200,000 | | | 0.43 | | CDN $ | | | | |
Exercised | | | -164,999 | | | 0.45 | | CDN $ | | | | |
Expired | | | -40,000 | | | 0.7 | | CDN $ | | | | |
Forfeited | | | -195,333 | | | 0.45 | | CDN $ | | | | |
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Balance - August 31, 2013 | | | 6,588,868 | | $ | 0.42 | | CDN $ | | | | |
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Granted | | | 195,000 | | | 1.42 | | CDN $ | | | | |
Granted | | | 595,000 | | | 1.83 | | | | | | |
Exercised | | | -1,441,668 | | | 0.41 | | CDN $ | | | | |
Expired | | | -1,667 | | | 0.42 | | CDN $ | | | | |
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Balance - August 31, 2014 | | | 5,935,533 | | $ | 0.61 | | CDN $ | | | | |
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The weighted average contractual life remaining on the outstanding options is 4.17 years. |
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The following table summarizes information about the options under the Plan outstanding and exercisable at August 31, 2014: |
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Exercise Price | | Number of | | Exercisable at | | Expiry Date | | | | | | |
Options | August 31, 2014 | | | | | |
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CDN$0.25 | | 125,000 | | 125,000 | | 23-Oct-15 | | | | | | |
CDN$0.28 | | 1,645,000 | | 1,645,000 | | 9-Apr-17 | | | | | | |
CDN$0.25 | | 55,000 | | 55,000 | | 17-May-17 | | | | | | |
CDN$0.28 | | 20,000 | | 20,000 | | 28-Jun-17 | | | | | | |
CDN$0.28 | | 70,000 | | 70,000 | | 13-Jul-17 | | | | | | |
CDN$0.64 | | 70,000 | | 70,000 | | 25-Oct-17 | | | | | | |
CDN$1.00 | | 60,000 | | 60,000 | | 10-Feb-18 | | | | | | |
CDN$0.65 | | 848,600 | | 848,600 | | 8-Aug-18 | | | | | | |
CDN$0.50 | | 5,000 | | 5,000 | | 26-Sep-18 | | | | | | |
CDN$1.87 | | 100,000 | | 33,333 | | 7-Nov-18 | | | | | | |
CDN$0.40 | | 70,000 | | 70,000 | | 22-Dec-18 | | | | | | |
CDN$0.42 | | 853,600 | | 853,600 | | 13-Apr-19 | | | | | | |
CDN$0.29 | | 90,000 | | 90,000 | | 18-Jun-19 | | | | | | |
CDN$0.37 | | 150,000 | | 150,000 | | 9-Aug-19 | | | | | | |
CDN$0.37 | | 150,000 | | 150,000 | | 16-Aug-19 | | | | | | |
CDN$0.25 | | 58,333 | | 58,333 | | 23-Oct-19 | | | | | | |
CDN$0.25 | | 215,000 | | 215,000 | | 19-Dec-19 | | | | | | |
CDN$0.58 | | 560,000 | | 373,333 | | 14-May-20 | | | | | | |
CDN$0.58 | | 100,000 | | 66,667 | | 23-May-20 | | | | | | |
$1.83 | | 495,000 | | 165,000 | | 1-Nov-20 | | | | | | |
$1.84 | | 100,000 | | 33,333 | | 15-Nov-20 | | | | | | |
CDN$0.94 | | 95,000 | | 31,667 | | 27-Jun-21 | | | | | | |
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| | 5,935,533 | | 5,188,866 | | | | | | | | |
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The estimated fair value of the stock options granted during the years ended August 31, 2014, 2013 and 2012 was determined using a Black-Scholes option valuation model with the following weighted average assumptions: |
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| | 2014 | | | 2013 | | | 2012 | |
Risk free interest rate | | | 2.01 | % | | | 1.55 | % | | | 1.63 | % |
Expected life (years) | | | 6.75 | | | | 6.17 | | | | 7 | |
Expected share price volitility | | | 120 | % | | | 123 | % | | | 147 | % |
Expected dividend yield | | | 0 | % | | | 0 | % | | | 0 | % |
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The weighted average fair value of stock options awarded during the years ended August 31, 2014, 2013 and 2012 was CDN$1.58, CDN$0.38 and CDN$0.40, respectively. |
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As of August 31, 2014, the Company had approximately $327,000 of unrecognized share-based compensation expense, which is expected to be recognized over a period of 1.32 years. |
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The intrinsic value of the options exercised during the years ended August 31, 2014, 2013 and 2012 was $1.38, $0.67, and $0.05 respectively. The intrinsic value of the vested options at August 31, 2014 was $1.25. |
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