Edesa Biotech (EDSA) 10-Q 8 May 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2019	May 06, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Registrant Name	Stellar Biotechnologies, Inc.
Entity Central Index Key	0001540159
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Trading Symbol	SBOT
Entity Common Stock, Shares Outstanding		5,330,715
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Small Business	true

Condensed Interim Consolidated

Condensed Interim Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Sep. 30, 2018
Current assets:
Cash and cash equivalents	$ 7,684,120	$ 4,225,521
Accounts receivable	40,046	41,246
Short-term investments	0	6,078,031
Inventory	243,972	224,267
Prepaid and other assets	170,792	86,919
Total current assets	8,138,930	10,655,984
Noncurrent assets:
Equity investment in joint venture	0	46,456
Property, plant and equipment, net	996,745	1,062,195
Deposits	15,340	15,340
Total noncurrent assets	1,012,085	1,123,991
Total Assets	9,151,015	11,779,975
Current liabilities:
Accounts payable and accrued liabilities	801,407	493,385
Deferred revenue	80,000	0
Total Current Liabilities	881,407	493,385
Commitments (Note 7)
Shareholders' equity:
Common shares, unlimited common shares authorized, no par value, 5,330,715 issued and outstanding at March 31, 2019 and September 30, 2018	56,652,957	56,652,957
Accumulated share-based compensation	5,109,824	5,064,625
Accumulated deficit	(53,493,173)	(50,430,992)
Total Shareholders' Equity	8,269,608	11,286,590
Total Liabilities and Shareholders' Equity	$ 9,151,015	$ 11,779,975

Condensed Interim Consolidate_2

Condensed Interim Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Sep. 30, 2018
Common shares, par value	$ 0	$ 0
Common shares, shares issued	5,330,715	5,330,715
Common shares, shares outstanding	5,330,715	5,330,715

Condensed Interim Consolidate_3

Condensed Interim Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Revenues:
Total Revenues	$ 117,755	$ 64,052	$ 170,788	$ 84,539
Expenses:
Cost of sales	64,378	65,623	92,371	68,424
Costs of aquaculture	35,408	74,424	113,688	172,474
Research and development	375,734	493,873	846,017	1,124,907
General and administrative	1,325,693	773,989	2,208,491	1,452,470
Total Expenses	1,801,213	1,407,909	3,260,567	2,818,275
Loss from Operations	(1,683,458)	(1,343,857)	(3,089,779)	(2,733,736)
Other Income (Loss)
Foreign exchange gain (loss)	7,645	(16,218)	(19,494)	(34,147)
Investment income	19,336	7,548	47,892	15,410
Other Income (Loss), Total	26,981	(8,670)	28,398	(18,737)
Loss Before Income Tax	(1,656,477)	(1,352,527)	(3,061,381)	(2,752,473)
Income tax expense	0	0	800	800
Net Loss	$ (1,656,477)	$ (1,352,527)	$ (3,062,181)	$ (2,753,273)
Loss per common share:
Basic and diluted	$ (0.31)	$ (0.90)	$ (0.57)	$ (1.83)
Weighted average number of common shares outstanding:
Basic and diluted	5,330,715	1,502,870	5,330,715	1,502,870
Product [Member]
Revenues:
Revenue from Contract with Customer	$ 117,755	$ 64,052	$ 170,788	$ 84,539

Condensed Interim Consolidate_4

Condensed Interim Consolidated Statements of Cash Flows - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Cash Flows Used In Operating Activities:
Net loss	$ (1,656,477)	$ (1,352,527)	$ (3,062,181)	$ (2,753,273)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			80,159	95,894
Share-based compensation			45,199	94,168
Foreign exchange (gain) loss	(7,645)	16,218	19,494	34,147
Loss on sale of subsidiary			18,928	0
Transfer equipment to research and development			32,018	12,419
Change in equity investment in joint venture			46,456	0
Changes in working capital items:
Accounts receivable			1,175	(61,549)
Inventory			(19,705)	(137,250)
Prepaid and other assets			(83,914)	(86,269)
Accounts payable and accrued liabilities			308,122	268,845
Deferred revenue			80,000	0
Net cash used in operating activities			(2,534,249)	(2,532,868)
Cash Flows From Investing Activities:
Purchase of property, plant and equipment			(67,035)	(205,891)
Proceeds on sale of subsidiary			1,000	0
Purchase of short-term investments			(21,969)	(505,222)
Proceeds on sales and maturities of short-term investments			6,100,000	2,000,000
Net cash provided by investing activities			6,011,996	1,288,887
Effect of exchange rate changes on cash and cash equivalents			(19,148)	(33,960)
Net change in cash and cash equivalents			3,458,599	(1,277,941)
Cash and cash equivalents - beginning of period			4,225,521	4,570,951
Cash and cash equivalents - end of period	7,684,120	3,293,010	7,684,120	3,293,010
Cash (demand deposits)	2,347,734	2,788,805	2,347,734	2,788,805
Cash equivalents	5,336,386	504,205	5,336,386	504,205
Cash and cash equivalents	$ 7,684,120	$ 3,293,010	7,684,120	3,293,010
Supplemental cash flow information:
Cash paid during the period for taxes			$ 800	$ 800

Consolidated Statements of Chan

Consolidated Statements of Changes in Equity - USD ($)	Total	Common Shares [Member]	Accumulated Share-Based Compensation [Member]	Accumulated Deficit [Member]
Beginning Balance at Sep. 30, 2017	$ 7,399,058	$ 48,351,701	$ 4,439,400	$ (45,392,043)
Beginning Balance (in shares) at Sep. 30, 2017		1,502,870
Share-based compensation	94,168	$ 0	94,168	0
Net loss	(2,753,273)	0	0	(2,753,273)
Ending balance at Mar. 31, 2018	4,739,953	$ 48,351,701	4,533,568	(48,145,316)
Ending balance (in shares) at Mar. 31, 2018		1,502,870
Beginning Balance at Dec. 31, 2017	6,019,018	$ 48,351,701	4,460,106	(46,792,789)
Beginning Balance (in shares) at Dec. 31, 2017		1,502,870
Share-based compensation	73,462	$ 0	73,462	0
Net loss	(1,352,527)	0	0	(1,352,527)
Ending balance at Mar. 31, 2018	4,739,953	$ 48,351,701	4,533,568	(48,145,316)
Ending balance (in shares) at Mar. 31, 2018		1,502,870
Beginning Balance at Sep. 30, 2018	11,286,590	$ 56,652,957	5,064,625	(50,430,992)
Beginning Balance (in shares) at Sep. 30, 2018		5,330,715
Share-based compensation	45,199	$ 0	45,199	0
Net loss	(3,062,181)	0	0	(3,062,181)
Ending balance at Mar. 31, 2019	8,269,608	$ 56,652,957	5,109,824	(53,493,173)
Ending balance (in shares) at Mar. 31, 2019		5,330,715
Beginning Balance at Dec. 31, 2018	9,907,925	$ 56,652,957	5,091,664	(51,836,696)
Beginning Balance (in shares) at Dec. 31, 2018		5,330,715
Share-based compensation	18,160	$ 0	18,160	0
Net loss	(1,656,477)	0	0	(1,656,477)
Ending balance at Mar. 31, 2019	$ 8,269,608	$ 56,652,957	$ 5,109,824	$ (53,493,173)
Ending balance (in shares) at Mar. 31, 2019		5,330,715

Nature of Operations

Nature of Operations	6 Months Ended
	Mar. 31, 2019
Nature of Operations [Abstract]
Nature of Operations [Text Block]	1. Nature of Operations Stellar Biotechnologies, Inc. (the Company) is organized under the laws of British Columbia, Canada. The Company’s business is the aquaculture, research and development, manufacture and commercialization of Keyhole Limpet Hemocyanin (KLH). The Company markets and distributes its KLH products to biotechnology and pharmaceutical companies, academic institutions, and clinical research organizations primarily in Europe, Asia, and the United States. The Company’s common shares have been listed for trading on The Nasdaq Capital Market in the United States under the symbol “SBOT” since November 5, 2015. In April 2010, the Company changed its name from CAG Capital, Inc. to Stellar Biotechnologies, Inc. and completed a reverse merger transaction with Stellar Biotechnologies, Inc., a California corporation, which was founded in September 1999, and remains the Company’s wholly-owned subsidiary and principal operating entity. In January 2017, the California subsidiary and the Company established a wholly-owned Mexican subsidiary under the name BioEstelar, S.A. de C.V. in Ensenada, Baja California to perform aquaculture research and development activities in Mexico. On March 29, 2019, the Company entered into an agreement to sell BioEstelar rather than pursue a more costly wind-down of the subsidiary. The Company’s executive offices are located at 332 E. Scott Street, Port Hueneme, California, 93041, USA, and its registered and records office is 1500 Royal Centre, 1055 West Georgia Street, Vancouver, BC, V6E 4N7, Canada. On March 7, 2019, the Company entered into a Share Exchange Agreement (the Exchange Agreement) with Edesa Biotech Inc., a privately-held Canadian company focused on the development of innovative therapeutics for dermatological and gastrointestinal indications (Edesa), and its shareholders. Upon the terms and subject to the satisfaction of the conditions described in the Exchange Agreement, including approval of the transaction by Stellar’s shareholders, Stellar will acquire the entire issued share capital of Edesa in exchange for newly-issued Stellar common shares, with Edesa becoming a wholly-owned subsidiary of Stellar (the Exchange). Following the closing of the Exchange, current Stellar shareholders are expected to own approximately 10%, and the current shareholders and option holders of Edesa are expected to own approximately 90%, of the combined company on a fully-diluted basis, subject to a 2% upward or downward adjustment based upon the amount of Stellar's working capital balance on the day before closing. Liquidity Company operations have historically been funded by the issuance of common shares, exercise of warrants, grant revenues, contract services revenue and product sales. For the six months ended March 31, 2019 and 2018, the Company reported net losses of $3.1 million and $2.8 million, respectively. As of March 31, 2019, the Company had an accumulated deficit of $53.49 million and working capital of $7.26 million. The Company expects to incur additional losses as it operates its business and pursues additional growth opportunities. The Company plans to finance company operations over the course of the next twelve months with cash and investments on hand and product sales. Management has flexibility to adjust planned expenditures based on a number of factors including the size and timing of capital expenditures, staffing levels, inventory levels, and the status of customer clinical trials. In light of the proposed share exchange agreement with a third party, management has taken steps to conserve working capital, while maintaining the core competencies, technology and . To help fund its operations and meet its obligations, the Company may also seek additional financing through debt and/or equity financings in the future as and when it considers appropriate, subject to market conditions and the availability of favorable terms.

Basis of Presentation

Basis of Presentation	6 Months Ended
	Mar. 31, 2019
Basis of Presentation [Abstract]
Basis of Accounting [Text Block]	2. Basis of Presentation The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. These condensed interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018. The accompanying condensed interim consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, Stellar Biotechnologies, Inc., a California corporation in the U.S. and, prior to March 29, 2019, BioEstelar, S.A. de C.V. a Baja California corporation in Mexico. All significant intercompany balances and transactions have been eliminated in consolidation. All adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the period presented have been included in the interim period. Operating results for the six months ended March 31, 2019 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2019. The condensed interim consolidated financial data at September 30, 2018 is derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018, as filed on November 30, 2018 with the SEC. The preparation of financial statements in conformity with U.S. GAAP for interim financial information requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Functional Currency The condensed interim consolidated financial statements of the Company are presented in U.S. dollars, unless otherwise stated, which is the Company’s functional currency. Adoption of Recent Accounting Pronouncements On October 1, 2018, the Company adopted Accounting Standards Codification (ASC) 606 Revenue Recognition – Revenue from Contracts with Customers using the modified retrospective method applied to those contracts which were not completed as of this date. Results for reporting periods beginning after October 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historical accounting under ASC Topic 605. There was no impact to the historical condensed interim consolidated financial statements resulting from the Company’s adoption of ASC Topic 606. Revenues and accounts receivable are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company’s revenue consists of sales of its KLH products, which are recognized upon shipment when the customer obtains control of the product and the Company has no further performance obligations. Deferred revenue is recorded when a customer pays consideration before they obtain control of the product. The Company’s product sales by geographic area are presented in Note 9.

Investments

Investments	6 Months Ended
	Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]	3. Investments Short-term investments consisted of U.S. Treasury Bills at March 31, 2019 and September 30, 2018. U.S. Treasury Bills are carried at amortized cost which approximates fair value and are classified as held-to-maturity investments.

Inventory

Inventory	6 Months Ended
	Mar. 31, 2019
Inventory [Abstract]
Inventory Disclosure [Text Block]	4. Inventory Raw materials include inventory of manufacturing supplies. Work in process includes manufacturing supplies, direct and indirect labor, contracted manufacturing and testing, and allocated manufacturing overhead for inventory in process at the end of the period. Finished goods include products that are complete and available for sale. At March 31, 2019 and September 30, 2018, the Company recorded work in process and finished goods inventory only for those products with recent sales levels to evaluate net realizable value. Inventory consisted of the following: March 31, September 30, 2019 2018 Raw materials $ 51,002 $ 46,670 Work in process 149,789 83,297 Finished goods 43,181 94,300 $ 243,972 $ 224,267

Property, Plant and Equipment,

Property, Plant and Equipment, net	6 Months Ended
	Mar. 31, 2019
Property, Plant and Equipment, net [Abstract]
Property, Plant and Equipment Disclosure [Text Block]	5. Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following: March 31, September 30, 2019 2018 Aquaculture system $ 126,257 $ 126,257 Laboratory facilities 62,033 62,033 Computer and office equipment 125,859 125,859 Manufacturing and laboratory equipment 990,492 1,042,993 Vehicles 49,347 77,994 Leasehold improvements 347,360 347,360 1,701,348 1,782,496 Less: accumulated depreciation (1,179,976 ) (1,146,566 ) Depreciable assets, net 521,372 635,930 Construction in progress 475,373 426,265 $ 996,745 $ 1,062,195 Depreciation and amortization expense amounted to approximately $80,000 and $96,000 for the six months ended March 31, 2019 and 2018, respectively.

Commitments

Commitments	6 Months Ended
	Mar. 31, 2019
Commitments [Abstract]
Commitments and Contingencies Disclosure [Text Block]	6. Commitments Operating leases The Company leases buildings and facilities used in its operations under two sublease agreements. In June 2015, the Company exercised its option to extend these sublease agreements for an additional five-year term beginning in October and November 2015. The Company negotiated an option to extend the leases for two additional five-year terms. The Company leases facilities used for executive offices and laboratories and pays a portion of the common area maintenance. In July 2018, the Company extended this lease for a two-year term, with options to renew for three successive two-year terms. The Company leased undeveloped land in Baja California, Mexico to assess the potential development of an additional aquaculture locale and expansion of production. In February 2018, the lease was transferred to its subsidiary BioEstelar and the Company has no further obligation under the lease after the sale of its subsidiary on March 29, 2019. Aggregate future minimum lease payments at March 31, 2019 are as follows: Year Ending September 30, 2019 92,000 Year Ending September 30, 2020 167,000 Year Ending September 30, 2021 6,000 $ 265,000 Rent expense on these lease agreements amounted to approximately $106,000 and $120,000 for the six months ended March 31, 2019 and 2018, respectively. Purchase obligations The Company has commitments totaling approximately $10,000 at March 31, 2019 under signed agreements for leasehold improvements and equipment. Supply agreements The Company has commitments under supply agreements with customers for fixed prices per gram of KLH in connection with clinical trials on a non-exclusive basis except within that customer’s field of use. The expiration dates of these supply agreements range from October 2019 to February 2022, and are generally renewable upon written request of the customer. Joint venture agreement In May 2016, the Company entered into a joint venture agreement with another party for the formation of a joint venture company to manufacture and sell conjugated therapeutic vaccines. The joint venture is organized as a French simplified corporation. The Company holds a 30% equity interest in the joint venture in exchange for an initial capital contribution of €120,000. One-half of the initial contribution, approximately $67,000, was paid during the year ended September 30, 2016 with the balance due upon the occurrence of certain defined future events. Pursuant to the joint venture agreement, on December 31, 2018, the Company notified the other party that it no longer wished to pursue the project and the parties subsequently agreed to proceed with actions to dissolve and liquidate the joint venture company by mutual consent. Impairment loss of approximately $30,000 is included in general and administrative expenses in the accompanying condensed interim consolidated statements of operations for the six months ended March 31, 2019. Retirement savings plan 401(k) contributions The Company sponsors a 401(k) retirement savings plan that requires an annual non-elective safe harbor employer contribution of 3% of eligible employee wages. Contributions to the 401(k) plan were approximately $27,000 and $38,000 for the six months ended March 31, 2019 and 2018, respectively. Related party commitments On August 14, 2002, through its California subsidiary, the Company entered into a patent royalty agreement with a director and officer of the Company, whereby he would receive royalty payments in exchange for assignment of his patent rights to the Company. The royalty is 5% of gross receipts from products using this invention in excess of $500,000 annually. The Company’s current operations utilize this invention. There was no royalty expense incurred during the six months ended March 31, 2019 and 2018.

Share Capital

Share Capital	6 Months Ended
	Mar. 31, 2019
Stockholders' Equity Note [Abstract]
Stockholders' Equity Note Disclosure [Text Block]	7. Share Capital Reverse Share Split On May 4, 2018, the Company effected a share consolidation (reverse split) of the Company's common shares at a ratio of 1-for-7. As a result of the reverse split, every seven shares of the issued and outstanding common shares, without par value, consolidated into one newly-issued outstanding common share, without par value, after fractional rounding. The number of warrants and options were proportionately adjusted by the split ratio and the exercise prices correspondingly increased by the same split ratio. All shares and exercise prices are presented on a post-split basis in these condensed interim consolidated financial statements. Black-Scholes option valuation model The Company uses the Black-Scholes option valuation model to determine the fair value of share-based compensation for placement agent warrants and share options granted. 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 and share options. Warrants A summary of the Company’s warrants activity is as follows: Number of Warrants Weighted Average Exercise Price Balance - September 30, 2017 180,805 $ 31.50 Granted 5,665,528 2.68 Granted pre-funded warrants 687,076 .01 Exercised (1,752,373 ) 2.65 Exercised pre-funded warrants (687,076 ) .01 Balance - September 30, 2018 4,093,960 $ 3.96 Expired (2,044,152 ) 2.65 Balance - March 31, 2019 2,049,808 $ 5.27 The weighted average contractual life remaining on the outstanding warrants at March 31, 2019 is 48 months. The following table summarizes information about the warrants outstanding at March 31, 2019: Exercise Price Number of Warrants Expiry Date $ 31.50 180,805 January 2022 2.65 1,645,175 May 2023 3.31 223,828 May 2023 2,049,808 Share Options The Company adopted an incentive compensation plan in 2017 (the Incentive Plan), which amended and restated the 2013 fixed share option plan and is administered by the Board of Directors. Options, restricted shares and restricted share units are eligible for grants under the Incentive Plan. The number of shares available for issuance under the Incentive Plan is 228,143, including shares available for the exercise of outstanding options under the 2013 fixed share option plan. No restricted shares or restricted share units have been granted as of March 31, 2019. The exercise price of an option is set at the closing price of the Company’s common shares on the date of grant. Share options granted to directors, officers, employees and certain individual consultants for past service are subject to the following vesting schedule: (a) one-third shall vest immediately, (b) one-third shall vest at 12 months from the date of grant and (c) one-third shall vest at 18 months from the date of grant. Share options granted to directors, officers, employees and certain individual consultants for future service are subject to the following vesting schedule: (x) one-third shall vest at 12 months from the date of grant, (y) one-third shall vest at 24 months from the date of grant and (z) one-third shall vest at 36 months from the date of grant. Share options granted to certain individual investor relations consultants are subject to the following vesting schedule: (aa) 25% shall vest at 3 months from the date of grant, (bb) 25% shall vest at 6 months from the date of grant, (cc) 25% shall vest at 12 months from the date of grant and (dd) 25% shall vest at 15 months from the date of grant. Options have been granted under the Incentive Plan allowing the holders to purchase common shares of the Company as follows: Number of Options Weighted Average Exercise Price Balance – September 30, 2017 58,711 $ 40.18 Granted 29,426 5.88 Expired (2,266 ) 84.87 Expired (15,373 ) 42.07 CDN $ Balance – September 30, 2018 70,498 $ 25.42 Granted 2,142 1.25 Expired (7,927 ) 30.65 Expired (7,786 ) 56.73 CDN $ Balance – March 31, 2019 56,927 $ 20.97 The weighted average contractual life remaining on the outstanding options is 45 months. The following table summarizes information about the options under the Incentive Plan outstanding and exercisable at March 31, 2019: Number of Options Exercisable at March 31, 2019 Range of exercise prices Expiry Dates 12,479 12,479 CDN$15.00 - 35.00 Apr 2019-Dec 2019 35,903 26,213 $1.00 - 20.00 Sep 2023-Mar 2026 2,214 2,214 CDN$40.00 - 70.00 May 2020-Jun 2022 1,901 1,901 $50.00 - 60.00 Dec 2022 1,644 1,644 CDN$105.00 - 110.00 Nov 2021 2,786 2,786 $120.00 - 130.00 Nov 2020 56,927 47,237 The estimated fair value of the share options granted during the six months ended March 31, 2019 was determined using a Black-Scholes option valuation model with the following weighted average assumptions: Six Months Ended March 31, March 31, 2019 2018 Risk free interest rate 1.67 % 2.13 % Expected life (years) 7.00 7.00 Expected share price volatility 153 % 155 % Expected dividend yield 0 % 0 % The weighted average fair value of share options granted during the six months ended March 31, 2019 and 2018 was $1.20 and $5.67 respectively. As of March 31, 2019, the Company had approximately $23,000 of unrecognized share-based compensation expense, which is expected to be recognized over a period of 22 months.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Fair Value Disclosures [Text Block]	8. Fair Value of Financial Instruments The Company uses the fair value measurement framework for valuing financial assets and liabilities measured on a recurring basis in situations where other accounting pronouncements either permit or require fair value measurements. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying value of certain financial instruments such as accounts receivable, accounts payable, accrued liabilities, and deferred revenue approximates fair value due to the short-term nature of such instruments. Short-term investments in U.S. Treasury Bills are recorded at amortized cost, which approximates fair value. The Company follows the fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1: Quoted prices in active markets for identical or similar assets and liabilities. Level 2: Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company reports its short-term investments in U.S. Treasury Bills at fair value using Level 1 inputs in the fair value hierarchy. The following table summarizes fair values for those assets and liabilities with fair value measured on a recurring basis. Fair Value Measurements Using Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value September 30, 2018 Assets Short-term investments in U.S. Treasury Bills $ 6,078,031 $ - $ - $ 6,078,031 There were no short-term investments outstanding at March 31, 2019.

Concentrations of Credit Risk

Concentrations of Credit Risk	6 Months Ended
	Mar. 31, 2019
Concentrations of Credit Risk [Abstract]
Concentration Risk Disclosure [Text Block]	9. Concentrations of Credit Risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, U.S Treasury Bills, and accounts receivable. The Company estimates its maximum credit risk at the amount recorded on the balance sheet. Management’s assessment of the Company’s credit risk for cash and cash equivalents is low as they are held in major financial institutions believed to be credit worthy or U.S. Treasury Bills with maturities of 90 days or less. The Company limits its exposure to credit loss for short-term investments by holding U.S. Treasury Bills with maturities of 1 year or less. Based on credit monitoring and history, the Company considers the risk of credit losses due to customer non-performance on accounts receivable to be low. The Company had the following concentrations of revenues by customers, each of which accounted for more than 10% of revenues in the applicable period: Six Months Ended March 31, March 31, 2019 2018 Product sales 80% from 1 customer 72% from 2 customers The Company had the following concentrations of revenues by geographic areas: Six Months Ended March 31, March 31, 2019 2018 North America 88 % 81 % Europe 12 % 19 % The Company had the following concentrations of accounts receivable from its customers, each of which accounted for more than 10% in the applicable period: March 31, September 30, 2019 2018 Accounts receivable 88% from 2 customers 87% from 2 customers

Inventory (Tables)

Inventory (Tables)	6 Months Ended
	Mar. 31, 2019
Inventory [Abstract]
Schedule of Inventory, Current [Table Text Block]	Inventory consisted of the following: March 31, September 30, 2019 2018 Raw materials $ 51,002 $ 46,670 Work in process 149,789 83,297 Finished goods 43,181 94,300 $ 243,972 $ 224,267

Property, Plant and Equipment_2

Property, Plant and Equipment, net (Tables)	6 Months Ended
	Mar. 31, 2019
Property, Plant and Equipment, net [Abstract]
Property, Plant and Equipment [Table Text Block]	Property, plant and equipment, net consisted of the following: March 31, September 30, 2019 2018 Aquaculture system $ 126,257 $ 126,257 Laboratory facilities 62,033 62,033 Computer and office equipment 125,859 125,859 Manufacturing and laboratory equipment 990,492 1,042,993 Vehicles 49,347 77,994 Leasehold improvements 347,360 347,360 1,701,348 1,782,496 Less: accumulated depreciation (1,179,976 ) (1,146,566 ) Depreciable assets, net 521,372 635,930 Construction in progress 475,373 426,265 $ 996,745 $ 1,062,195

Commitments (Tables)

Commitments (Tables)	6 Months Ended
	Mar. 31, 2019
Commitments [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]	Aggregate future minimum lease payments at March 31, 2019 are as follows: Year Ending September 30, 2019 92,000 Year Ending September 30, 2020 167,000 Year Ending September 30, 2021 6,000 $ 265,000

Share Capital (Tables)

Share Capital (Tables)	6 Months Ended
	Mar. 31, 2019
Class of Warrant or Right [Line Items]
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]	A summary of the Company’s warrants activity is as follows: Number of Warrants Weighted Average Exercise Price Balance - September 30, 2017 180,805 $ 31.50 Granted 5,665,528 2.68 Granted pre-funded warrants 687,076 .01 Exercised (1,752,373 ) 2.65 Exercised pre-funded warrants (687,076 ) .01 Balance - September 30, 2018 4,093,960 $ 3.96 Expired (2,044,152 ) 2.65 Balance - March 31, 2019 2,049,808 $ 5.27
Schedule Of Warrants Outstanding [Table Text Block]	The following table summarizes information about the warrants outstanding at March 31, 2019: Exercise Price Number of Warrants Expiry Date $ 31.50 180,805 January 2022 2.65 1,645,175 May 2023 3.31 223,828 May 2023 2,049,808
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Options have been granted under the Incentive Plan allowing the holders to purchase common shares of the Company as follows: Number of Options Weighted Average Exercise Price Balance – September 30, 2017 58,711 $ 40.18 Granted 29,426 5.88 Expired (2,266 ) 84.87 Expired (15,373 ) 42.07 CDN $ Balance – September 30, 2018 70,498 $ 25.42 Granted 2,142 1.25 Expired (7,927 ) 30.65 Expired (7,786 ) 56.73 CDN $ Balance – March 31, 2019 56,927 $ 20.97
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding [Table Text Block]	The following table summarizes information about the options under the Incentive Plan outstanding and exercisable at March 31, 2019: Number of Options Exercisable at March 31, 2019 Range of exercise prices Expiry Dates 12,479 12,479 CDN$15.00 - 35.00 Apr 2019-Dec 2019 35,903 26,213 $1.00 - 20.00 Sep 2023-Mar 2026 2,214 2,214 CDN$40.00 - 70.00 May 2020-Jun 2022 1,901 1,901 $50.00 - 60.00 Dec 2022 1,644 1,644 CDN$105.00 - 110.00 Nov 2021 2,786 2,786 $120.00 - 130.00 Nov 2020 56,927 47,237
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	The estimated fair value of the share options granted during the six months ended March 31, 2019 was determined using a Black-Scholes option valuation model with the following weighted average assumptions: Six Months Ended March 31, March 31, 2019 2018 Risk free interest rate 1.67 % 2.13 % Expected life (years) 7.00 7.00 Expected share price volatility 153 % 155 % Expected dividend yield 0 % 0 %

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]	The following table summarizes fair values for those assets and liabilities with fair value measured on a recurring basis. Fair Value Measurements Using Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value September 30, 2018 Assets Short-term investments in U.S. Treasury Bills $ 6,078,031 $ - $ - $ 6,078,031

Concentrations of Credit Risk (

Concentrations of Credit Risk (Tables)	6 Months Ended
	Mar. 31, 2019
Concentrations of Credit Risk [Abstract]
Schedules of Concentration of Risk, by Risk Factor [Table Text Block]	The Company had the following concentrations of revenues by customers, each of which accounted for more than 10% of revenues in the applicable period: Six Months Ended March 31, March 31, 2019 2018 Product sales 80% from 1 customer 72% from 2 customers The Company had the following concentrations of revenues by geographic areas: Six Months Ended March 31, March 31, 2019 2018 North America 88 % 81 % Europe 12 % 19 % The Company had the following concentrations of accounts receivable from its customers, each of which accounted for more than 10% in the applicable period: March 31, September 30, 2019 2018 Accounts receivable 88% from 2 customers 87% from 2 customers

Nature of Operations (Details T

Nature of Operations (Details Textual) - USD ($)	Mar. 07, 2019	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2018
Nature of Operations [Line Items]
Expected Shareholding Adjustment Percentage	2.00%
Net loss		$ (1,656,477)	$ (1,352,527)	$ (3,062,181)	$ (2,753,273)
Accumulated deficit		(53,493,173)		(53,493,173)		$ (50,430,992)
Working capital		$ 7,260,000		$ 7,260,000
Shareholders Of Stellar [Member]
Nature of Operations [Line Items]
Expected Shareholding Percentage	10.00%
Shareholders Of Edesa [Member]
Nature of Operations [Line Items]
Expected Shareholding Percentage	90.00%

Inventory (Details)

Inventory (Details) - USD ($)	Mar. 31, 2019	Sep. 30, 2018
Raw materials	$ 51,002	$ 46,670
Work in process	149,789	83,297
Finished goods	43,181	94,300
Inventory	$ 243,972	$ 224,267

Property, Plant and Equipment_3

Property, Plant and Equipment, net (Details) - USD ($)	Mar. 31, 2019	Sep. 30, 2018
Property, Plant and Equipment [Line Items]
Depreciable assets, gross	$ 1,701,348	$ 1,782,496
Less: accumulated depreciation	(1,179,976)	(1,146,566)
Depreciable assets, net	521,372	635,930
Construction in progress	475,373	426,265
Property, plant and equipment, net	996,745	1,062,195
Aquaculture system [Member]
Property, Plant and Equipment [Line Items]
Depreciable assets, gross	126,257	126,257
Laboratory facilities [Member]
Property, Plant and Equipment [Line Items]
Depreciable assets, gross	62,033	62,033
Computer and office equipment [Member]
Property, Plant and Equipment [Line Items]
Depreciable assets, gross	125,859	125,859
Manufacturing and laboratory equipment [Member]
Property, Plant and Equipment [Line Items]
Depreciable assets, gross	990,492	1,042,993
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Depreciable assets, gross	49,347	77,994
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Depreciable assets, gross	$ 347,360	$ 347,360

Property, Plant and Equipment_4

Property, Plant and Equipment, net (Details Textual) - USD ($)	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 80,000	$ 96,000

Commitments (Details)

Commitments (Details)	Mar. 31, 2019USD ($)
For The Year Ending September 30,
Year Ending September 30, 2019	$ 92,000
Year Ending September 30, 2020	167,000
Year Ending September 30, 2021	6,000
Future minimum lease payments, Total	$ 265,000

Commitments (Details Textual)

Commitments (Details Textual)	6 Months Ended
	Mar. 31, 2019USD ($)	Mar. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2016EUR (€)	Aug. 14, 2002USD ($)
Other Commitments [Line Items]
Lessee, Operating Lease, Term of Contract	5 years
Rent expense on lease agreements	$ 106,000	$ 120,000
Equity Method Investments	0		$ 46,456
Impairment Loss	30,000
Joint venture agreement [Member]
Other Commitments [Line Items]
Equity Method Investments Committed Capital | €					€ 120,000
Equity Method Investment, Ownership Percentage				30.00%	30.00%
Equity Method Investments				$ 67,000
Director and Officer [Member] | Royalty Agreements [Member]
Other Commitments [Line Items]
Royalty percentage of gross receipts over base amount						5.00%
Gross receipt base amount for royalty calculation						$ 500,000
Royalty expense	0	0
Retirement Savings Plan 401(k) [Member]
Other Commitments [Line Items]
Employer contributions	$ 27,000	$ 38,000
Annual non-elective safe harbor employer contribution	3.00%
Three buildings and facilities used in its operations [Member]
Other Commitments [Line Items]
Lessee, Operating Lease, Renewal Term	5 years
Facilities used for executive offices and laboratories [Member]
Other Commitments [Line Items]
Lessee, Operating Lease, Renewal Term	2 years
Undeveloped land in Baja, Mexico
Other Commitments [Line Items]
Lessee, Operating Lease, Renewal Term	3 years
Leasehold Improvements [Member]
Other Commitments [Line Items]
Purchase obligations	$ 10,000

Share Capital (Details)

Share Capital (Details) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2019	Sep. 30, 2018
Number of Warrants, Ending Balance	2,049,808
Warrant [Member]
Number of Warrants, Beginning Balance	4,093,960	180,805
Number of Warrants, Granted		5,665,528
Number of Warrants, Granted pre-funded warrants		687,076
Number of Warrants, Exercised		(1,752,373)
Number of Warrants, Exercised pre-funded warrants		(687,076)
Number of Warrants, Expired	(2,044,152)
Number of Warrants, Ending Balance	2,049,808	4,093,960
Weighted Average Exercise Price, Beginning Balance	$ 3.96	$ 31.50
Weighted Average Exercise Price, Granted		2.68
Weighted Average Exercise Price, Granted pre-funded warrants		0.01
Weighted Average Exercise Price, Exercised		2.65
Weighted Average Exercise Price, Exercised pre-funded warrants		0.01
Weighted Average Exercise Price, Expired	2.65
Weighted Average Exercise Price, Ending Balance	$ 5.27	$ 3.96

Share Capital (Details 1)

Share Capital (Details 1)	6 Months Ended
	Mar. 31, 2019$ / sharesshares
Number of Warrants	2,049,808
Warrant One [Member]
Exercise Price | $ / shares	$ 31.50
Number of Warrants	180,805
Expiry Date	Jan. 31, 2022
Warrant Two [Member]
Exercise Price | $ / shares	$ 2.65
Number of Warrants	1,645,175
Expiry Date	May 31, 2023
Warrant Three [Member]
Exercise Price | $ / shares	$ 3.31
Number of Warrants	223,828
Expiry Date	May 31, 2023

Share Capital (Details 2)

Share Capital (Details 2)	6 Months Ended		12 Months Ended
	Mar. 31, 2019$ / sharesshares	Mar. 31, 2019$ / sharesshares	Sep. 30, 2018$ / sharesshares	Sep. 30, 2018$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options, Beginning Balance | shares	70,498	70,498	58,711	58,711
Number of Options, Granted | shares	2,142	2,142	29,426	29,426
Number of Options, Expired | shares	(7,927)	(7,927)	(2,266)	(2,266)
Number of Options, Expired | shares	(7,786)	(7,786)	(15,373)	(15,373)
Number of Options, Ending Balance | shares	56,927	56,927	70,498	70,498
Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 25.42		$ 40.18
Weighted Average Exercise Price, Granted | $ / shares	1.25		5.88
Weighted Average Exercise Price, Expired | $ / shares	30.65		84.87
Weighted Average Exercise Price, Expired | $ / shares		$ 56.73		$ 42.07
Weighted Average Exercise Price, Ending Balance | $ / shares	$ 20.97		$ 25.42

Share Capital (Details 3)

Share Capital (Details 3)	6 Months Ended
	Mar. 31, 2019$ / sharesshares	Mar. 31, 2019$ / sharesshares	Sep. 30, 2018shares	Sep. 30, 2017shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options	56,927	56,927	70,498	58,711
Exercisable at March 31, 2019	47,237	47,237
Stock Option One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options	12,479	12,479
Exercisable at March 31, 2019	12,479	12,479
Range of exercise prices, Lower Range Limit | $ / shares		$ 15
Range of exercise prices, Upper Range Limit | $ / shares		$ 35
Expiry Dates, Start	2019-04	2019-04
Expiry Dates, End	2019-12	2019-12
Stock Option Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options	35,903	35,903
Exercisable at March 31, 2019	26,213	26,213
Range of exercise prices, Lower Range Limit | $ / shares	$ 1
Range of exercise prices, Upper Range Limit | $ / shares	$ 20
Expiry Dates, Start	2023-09	2023-09
Expiry Dates, End	2026-03	2026-03
Stock Option Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options	2,214	2,214
Exercisable at March 31, 2019	2,214	2,214
Range of exercise prices, Lower Range Limit | $ / shares		$ 40
Range of exercise prices, Upper Range Limit | $ / shares		$ 70
Expiry Dates, Start	2020-05	2020-05
Expiry Dates, End	2022-06	2022-06
Stock Option Four [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options	1,901	1,901
Exercisable at March 31, 2019	1,901	1,901
Range of exercise prices, Lower Range Limit | $ / shares	$ 50
Range of exercise prices, Upper Range Limit | $ / shares	$ 60
Expiry Dates	2022-12	2022-12
Stock Option Five [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options	1,644	1,644
Exercisable at March 31, 2019	1,644	1,644
Range of exercise prices, Lower Range Limit | $ / shares		$ 105
Range of exercise prices, Upper Range Limit | $ / shares		$ 110
Expiry Dates	2021-11	2021-11
Stock Option Six [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options	2,786	2,786
Exercisable at March 31, 2019	2,786	2,786
Range of exercise prices, Lower Range Limit | $ / shares	$ 120
Range of exercise prices, Upper Range Limit | $ / shares	$ 130
Expiry Dates	2020-11	2020-11

Share Capital (Details 4)

Share Capital (Details 4) - Employee Stock Option [Member]	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Risk free interest rate [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value assumptions rate	1.67%	2.13%
Expected life (years) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (years)	7 years	7 years
Expected share price volatility [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value assumptions rate	153.00%	155.00%
Expected dividend yield [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair Value assumptions rate	0.00%	0.00%

Share Capital (Details Textual)

Share Capital (Details Textual) - USD ($)	1 Months Ended	6 Months Ended
	May 04, 2018	Mar. 31, 2019	Mar. 31, 2018
Share Capital [Line Items]
Weighted average contractual life remaining on the outstanding warrants		48 months
Weighted average contractual life remaining on the outstanding options		45 months
Share based compensation, share option vesting schedule		Share options granted to directors, officers, employees and certain individual consultants for future service are subject to the following vesting schedule: (x) one-third shall vest at 12 months from the date of grant, (y) one-third shall vest at 24 months from the date of grant and (z) one-third shall vest at 36 months from the date of grant.
Weighted average fair value of share options awarded		$ 1.20	$ 5.67
Unrecognized share-based compensation expense		$ 23,000
Unrecognized share-based compensation expense, recognition period		22 months
Stockholders' Equity, Reverse Stock Split	1-for-7
Stockholders' Equity Note, Stock Split	As a result of the reverse split, every seven shares of the issued and outstanding common shares, without par value, consolidated into one newly-issued outstanding common share, without par value, after fractional rounding. The number of warrants and options were proportionately adjusted by the split ratio and the exercise prices correspondingly increased by the same split ratio.
Employee Share Option [Member]
Share Capital [Line Items]
Share based compensation, shares reserved for issuance		228,143
Share based compensation, share option vesting schedule		The exercise price of an option is set at the closing price of the Company’s common shares on the date of grant. Share options granted to directors, officers, employees and certain individual consultants for past service are subject to the following vesting schedule: (a) one-third shall vest immediately, (b) one-third shall vest at 12 months from the date of grant and (c) one-third shall vest at 18 months from the date of grant.
Employee Stock Option Two [Member]
Share Capital [Line Items]
Share based compensation, share option vesting schedule		Share options granted to certain individual investor relations consultants are subject to the following vesting schedule: (aa) 25% shall vest at 3 months from the date of grant, (bb) 25% shall vest at 6 months from the date of grant, (cc) 25% shall vest at 12 months from the date of grant and (dd) 25% shall vest at 15 months from the date of grant.

Fair Value of Financial Instr_3

Fair Value of Financial Instruments (Details)	Sep. 30, 2018USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments in U.S. Treasury Bills	$ 6,078,031
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments in U.S. Treasury Bills	6,078,031
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments in U.S. Treasury Bills	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments in U.S. Treasury Bills	$ 0

Concentrations of Credit Risk_2

Concentrations of Credit Risk (Details)	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Customer Concentration Risk [Member] | Product sales [Member] | One Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	80.00%
Customer Concentration Risk [Member] | Product sales [Member] | Two Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage		72.00%
Customer Concentration Risk [Member] | Accounts receivable [Member] | Two Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	88.00%	87.00%
Geographic Concentration Risk [Member] | Revenue [Member] | Europe [Member]
Concentration Risk [Line Items]
Concentration risk percentage	12.00%	19.00%
Geographic Concentration Risk [Member] | Revenue [Member] | North America [Member]
Concentration Risk [Line Items]
Concentration risk percentage	88.00%	81.00%