Edesa Biotech (EDSA) 10-K 28 Dec 21 2021 FY Annual report Financial data

Cover

Cover - USD ($)	12 Months Ended
	Sep. 30, 2021	Dec. 27, 2021	Mar. 31, 2021
Cover [Abstract]
Entity Registrant Name	EDESA BIOTECH, INC.
Entity Central Index Key	0001540159
Document Type	10-K
Amendment Flag	false
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	No
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		13,518,799
Entity Public Float			$ 42,402,749
Document Annual Report	true
Document Transition Report	false
Entity File Number	001-37619
Entity Incorporation State Country Code	Z4
Entity Address Address Line 1	100 Spy Court
Entity Address Address Line 2	Markham
Entity Address City Or Town	ON
Entity Address Country	CA
Entity Address Postal Zip Code	L3R 5H6
City Area Code	289
Local Phone Number	800-9600
Security 12b Title	Common Shares, without par value
Trading Symbol	EDSA
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 7,839,259	$ 7,213,695
Accounts and other receivable	3,302,827	87,446
Prepaid expenses and other current assets	948,645	802,877
Total current assets	12,090,731	8,104,018
Non-current assets:
Property and equipment, net	14,989	14,815
Intangible asset, net	2,382,364	2,483,536
Operating lease right-of-use assets	96,571	160,006
Total assets	14,584,655	10,762,375
Current liabilities:
Accounts payable and accrued liabilities	1,379,842	1,460,127
Short-term operating lease liabilities	78,808	69,730
Total current liabilities	1,458,650	1,529,857
Non-current liabilities:
Long-term payables	47,202	29,928
Long-term operating lease liabilities	20,512	94,460
Total liabilities	1,526,364	1,654,245
Temporary equity:
Convertible preferred shares	0	2,476,955
Shareholders' equity:
Capital shares Authorized unlimited common and preferred shares without par value Issued and outstanding:13,295,403 common shares (September 30, 2020 - 9,615,119)	34,887,721	18,500,853
Additional paid-in capital	4,871,461	1,550,480
Accumulated other comprehensive loss	(205,262)	(287,204)
Accumulated deficit	(26,495,629)	(13,132,954)
Total shareholders' equity	13,058,291	6,631,175
Total liabilities, shareholders' equity and temporary equity	$ 14,584,655	$ 10,762,375

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Sep. 30, 2020
Consolidated Balance Sheets
Capital shares, par value	$ 0	$ 0
Capital shares, issued	13,295,403	9,615,119
Capital shares, outstanding	13,295,403	9,615,119

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Revenues:
Product sales	$ 0	$ 328,801
Expenses:
Cost of sales	0	17,601
Research and development	17,947,072	3,329,451
General and administrative	5,734,260	3,382,591
Expenses net	23,681,332	6,729,643
Loss from Operations	(23,681,332)	(6,400,842)
Other Income (Loss):
Reimbursement grant income	10,340,839	0
Interest income	11,165	37,778
Foreign exchange loss	(13,022)	(366)
Total Other income (Loss)	10,338,982	37,412
Loss before income taxes	(13,342,350)	(6,363,430)
Income tax expense	800	800
Net Loss	(13,342,350)	(6,363,430)
Exchange differences on translation	81,942	54,870
Net Comprehensive Loss	$ (13,261,208)	$ (6,309,360)
Weighted average number of common shares	12,077,822	8,607,161
Loss per common share - basic and diluted	$ (1.10)	$ (0.74)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash Flows from Operating Activities:
Net loss	$ (13,342,350)	$ (6,363,430)
Adjustments for:
Depreciation and amortization	118,788	57,563
Share-based compensation	3,195,469	598,359
Changes in working capital items:
Accounts and other receivable	(3,229,954)	127,131
Prepaid expenses and other current assets	(281,361)	(404,066)
Accounts payable and accrued liabilities	(124,724)	998,903
Net cash used in operating activities	(13,664,932)	(4,986,340)
Cash Flows from Investing Activities:
Proceeds on sales of property and equipment	0	53,412
Purchase of property and equipment	(6,146)	(4,856)
Purchase of intangible assets	0	(29,483)
Purchase of short-term investments	0	(500,000)
Proceeds from maturities of short-term investments	0	500,000
Net cash provided by (used in) investing activities	(6,146)	19,073
Cash Flows from Financing Activities:
Proceeds from issuance of common shares and warrants	12,662,357	4,360,500
Proceeds from exercise of warrants	1,658,769	3,223,804
Proceeds from exercise of share options	41,981	11,571
Payments for issuance costs of common shares	(188,366)	(475,720)
Payments for issuance costs of convertible preferred shares	0	(57,154)
Proceeds from borrowings	0	29,748
Net cash provided by financing activities	14,174,741	7,092,749
Effect of exchange rate changes on cash and cash equivalents	121,901	57,630
Net change in cash and cash equivalents	625,564	2,183,112
Cash and cash equivalents, beginning of year	7,213,695	5,030,583
Cash and cash equivalents, end of year	7,839,259	7,213,695
Supplemental Disclosure of Non-Cash Financing Activities:
Preferred shares converted from temporary equity to common shares	2,496,480	0
Issuance costs withheld from gross proceeds from issuance of common shares	1,087,184	0
Fair value of compensation warrants to underwriter	407,022	0
Issuance of convertible preferred shares to acquire license	0	2,500,000
Fair value of placement agent warrants	$ 0	$ 18,051

Consolidated Statements of Chan

Consolidated Statements of Changes in Shareholders Equity - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated other comprehensive loss	Retained Earnings (Accumulated Deficit)
Balance, shares at Sep. 30, 2019		7,504,468
Balance, amount at Sep. 30, 2019	$ 5,256,130	$ 12,005,051	$ 327,768	$ (342,074)	$ (6,734,615)
Issuance of common shares in equity offerings, shares		1,354,691
Issuance of common shares in equity offerings, amount	4,360,500	$ 3,070,358	1,290,142
Issuance costs including fair value of underwriter warrants, amount	(475,720)	$ (349,756)	(125,964)
Issuance of common shares upon exercise of warrants, shares		751,510
Issuance of common shares upon exercise of warrants, amount	3,223,804	$ 3,754,265	(530,461)
Issuance of common shares upon exercise of share options, shares		4,450
Issuance of common shares upon exercise of share options, amount	11,571	$ 20,935	(9,364)
Preferred return on convertible preferred shares	(34,109)				(34,109)
Share-based compensation	598,359		598,359
Net loss and comprehensive loss	(6,309,360)			54,870	(6,364,230)
Balance, shares at Sep. 30, 2020		9,615,119
Balance, amount at Sep. 30, 2020	6,631,175	$ 18,500,853	1,550,480	$ (287,204)	$ (13,132,954)
Issuance of common shares in equity offerings, shares		2,148,963
Issuance of common shares in equity offerings, amount	13,749,541	$ 13,749,541
Issuance costs including fair value of underwriter warrants, amount	(1,434,391)	$ (1,841,413)	407,022
Issuance of common shares upon exercise of warrants, shares		381,650
Issuance of common shares upon exercise of warrants, amount	1,658,769	$ 1,912,725	(253,956)
Issuance of common shares upon exercise of share options, shares		19,746
Issuance of common shares upon exercise of share options, amount	41,981	$ 69,535	$ (27,554)
Preferred return on convertible preferred shares	(19,525)
Share-based compensation	3,195,469
Net loss and comprehensive loss	(13,261,208)
Conversion of convertible preferred shares, shares		1,129,925
Conversion of convertible preferred shares, amount	2,496,480	$ 2,496,480
Balance, shares at Sep. 30, 2021		13,295,403
Balance, amount at Sep. 30, 2021	$ 13,058,291

Nature of operations

Nature of operations	12 Months Ended
	Sep. 30, 2021
Nature of operations
NOTE - 1 Nature of operations	1. Nature of operations Edesa Biotech, Inc. (the Company or Edesa) is a biopharmaceutical company focused on acquiring, developing and commercializing clinical stage drugs for inflammatory and immune-related diseases with clear unmet medical needs. The Company is organized under the laws of British Columbia, Canada and is headquartered in Markham, Ontario. It operates under its wholly owned subsidiaries, Edesa Biotech Research, Inc., an Ontario, Canada corporation, and Edesa Biotech USA, Inc. (formerly known as Stellar Biotechnologies, Inc. prior to November 2020), a California, USA corporation. The Company’s common shares trade on The Nasdaq Capital Market in the United States under the symbol “EDSA”. Liquidity The Company’s operations have historically been funded through issuances of common shares, exercises of common share purchase warrants, convertible preferred shares, convertible loans, government grants and tax incentives. For the years ended September 30, 2021 and 2020, the Company reported net losses of $13.34 million and $6.36 million, respectively. Under the Company’s contribution agreement with the Canadian government’s Strategic Innovation Fund (SIF), the Company is eligible to receive cash reimbursements up to C$14.05 million ($11 million USD) in the aggregate for certain research and development expenses related to the Company’s EB05 clinical development program. For the year ended September 30, 2021, the Company recorded $10.34 million in grant income. On March 2, 2021, the Company completed a registered public offering of an aggregate of 1,562,500 common shares, no par value, of the Company at an offering prices of $6.40 per share for net proceeds of $8.89 million, after deducting underwriter fees and related offering expenses. For year ended September 30, 2021, the exercise of warrants and options as well as sales under the Company’s equity distribution agreement with RBC Capital Markets, LLC resulted in the issuance of 987,859 common shares and net cash proceeds to the Company of $5.12 million. At September 30, 2021, the Company had cash and cash equivalents of $7.84 million, working capital of $10.63 million, shareholders’ equity of $13.06 million and an accumulated deficit of $26.50 million. The Company plans to finance operations for at least the next twelve months with cash and cash equivalents on hand, equity sales under the at-the-market offering program and reimbursements of eligible research and development expenses under the Company’s agreement with the Canadian government’s SIF. Impact of COVID-19 The ongoing COVID-19 pandemic has severely impacted global economic activity and has caused material disruptions to almost every industry directly or indirectly. The full impact of the pandemic remains uncertain and ongoing developments related to the pandemic may cause material impacts to the Company’s future operations, clinical study timelines and financial results. While the full impact of the COVID-19 pandemic to business and operating results presents additional uncertainty, the Company’s management continues to use reasonably available information to assess impacts to the Company’s business plans and financial condition.

Basis of preparation

Basis of preparation	12 Months Ended
	Sep. 30, 2021
Nature of operations
NOTE - 2 Basis of preparation	2. Basis of preparation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and include the accounts of the Company and its wholly owned subsidiaries, Edesa Biotech Research, Inc. and Edesa Biotech USA, Inc. All intercompany balances and transactions have been eliminated upon consolidation. The accompanying consolidated financial statements include the years ended September 30, 2021 and 2020.

Significant accounting policies

Significant accounting policies	12 Months Ended
	Sep. 30, 2021
Significant accounting policies
NOTE - 3 Significant accounting policies	3. Significant accounting policies Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period or year. Actual results could differ from those estimates. Areas where significant judgment is involved in making estimates are valuation of accounts and other receivable; valuation and useful lives of property and equipment; intangible assets; operating lease right-of-use assets; deferred income taxes; classification of convertible preferred shares as liability or equity; the determination of fair value of share-based compensation; the determination of fair value of warrants in order to allocate proceeds from equity issuances; and forecasting future cash flows for assessing the going concern assumption. Functional and reporting currencies The consolidated financial statements of the Company are presented in U.S. dollars, unless otherwise stated, which is the Company’s and its wholly owned subsidiary’s, Edesa Biotech USA, Inc., functional currency. The functional currency of the Company’s wholly owned subsidiary, Edesa Biotech Research, Inc., as determined by management, is Canadian dollars. Cash and cash equivalents Cash and cash equivalents consist of demand deposits with financial institutions and highly liquid investments which are readily convertible into cash with maturities of three months or less when purchased. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature. Investments There were no investments during the year ended September 30, 2021. Investments during the year ended September 30, 2020 consisted of U.S. Treasury bills with original maturities between 13 and 52 weeks. They were reported at amortized cost, which approximated fair value. The Company regularly reviewed these investments to determine whether any decline in fair value below the amortized cost basis occurred that was other than temporary. If a decline in fair value occurred that was determined to be other than temporary, the cost basis of the investment would be written down to fair value. There were no investments outstanding at September 30, 2021 and 2020. Accounts and other receivable Property and equipment Property and equipment are recorded at historical cost less accumulated depreciation and any accumulated impairment losses. Depreciation is recorded to write off the cost of assets less their residual values over their useful lives, using the declining balance and straight-line methods. Assets not in use and on consignment for sale are carried at the expected net proceeds value. Maintenance and repair expenditures that do not improve or extend the life are expensed in the period incurred. Any gain or loss arising on the disposal or retirement of an item of property and equipment is recognized as the difference between the sales proceeds and the carrying amount of the asset. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis. The depreciation policy for the principal asset categories are calculated as follows: Computer equipment 30% declining balance method or straight line 3 years Furniture and equipment 20% declining balance method Intangible assets Intangible assets represent the exclusive world-wide rights to know-how, patents and data relating to certain monoclonal antibodies (the Constructs), including sublicensing rights, acquired by entering into a license agreement with a pharmaceutical development company. Unless earlier terminated, the term of the license agreement will remain in effect for 25 years from the date of first commercial sale of licensed products containing the Constructs. Subsequently, the license agreement will automatically renew for five-year periods unless either party terminates the agreement in accordance with its terms. Intangible assets are stated at their historical cost, amortized on a straight-line basis over their expected useful lives, which is 25 years, and subject to impairment review at the end of each reporting period. Impairment of long-lived assets Long-lived assets are tested for impairment when indicators of impairment exist. When a significant change in the expected timing or amount of the future cash flows of the financial asset is identified, the carrying amount of the financial asset is reduced and the amount of the write-down is recognized as a loss. A previously recognized impairment loss may be reversed to the extent of the improvement, provided it is not greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously, and the amount of the reversal is recognized in net income (loss). Fair value measurement The Company uses the fair value measurement framework for valuing financial assets and liabilities. See Note 12. Revenue recognition Reimbursement grant income is recognized based on the reimbursement rate included in the government contribution agreement when allowable expenses have been incurred. Research and development Research and development expenses principally consist of (i) contract research organizations for clinical trial management services, (ii) contract manufacturing organizations for manufacturing the drug compound(s) for use in clinical trials and (iii) salaries of employees directly involved in research and development efforts. Research and development costs are expensed as incurred. Share-based compensation The Company measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted since the fair value of the goods or services received by the Company cannot be reliably estimated. The Company grants options to buy common shares of the Company to its directors, officers, employees and consultants, and grants other equity- based instruments such as warrants to non-employees. The fair value of share-based compensation is measured on the date of grant, using the Black- Scholes option valuation model and is recognized over the vesting period net of estimated forfeitures for employees or the service period for non-employees. The provisions of the Company’s share-based compensation plans do not require the Company to settle any options by transferring cash or other assets, and therefore the Company classifies the awards as equity. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. Translation of foreign currency transactions The Company’s reporting currency is the U.S. dollar. The financial statements of the wholly owned Canadian subsidiary is measured using the Canadian dollar as the functional currency. Assets and liabilities of the Canadian operation have been translated at year-end exchange rates and related revenue and expenses have been translated at average exchange rates for the year. Accumulated gains and losses resulting from the translation of the financial statements of the Canadian operation are included as part of accumulated other comprehensive loss, a separate component of shareholders’ equity. For other transactions denominated in currencies other than the Company’s functional currency, the monetary assets and liabilities are translated at the year-end rates. Revenue and expenses are translated at rates of exchange prevailing on the transaction dates. Non-monetary balance sheet and related income statement accounts are remeasured into U.S. dollar using historical exchange rates. All of the exchange gains or losses resulting from these other transactions are recognized in the statements of operations and comprehensive loss. Income taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts using enacted tax rates and laws in effect in the year in which the differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized. The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. The Company is subject to examination by taxing authorities in Canada and the U.S. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying financial statements. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense. The Company accounts for income taxes on a tax jurisdictional basis. The Company files income tax returns in Canada, the provinces of British Columbia and Ontario, the U.S. and the state of California. Earnings (loss) per share Basic earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. The computation of diluted earnings (loss) per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on earnings (loss) per share. The dilutive effect of convertible securities would be reflected in diluted earnings per share by application of the “if converted” method. The dilutive effect of outstanding options and warrants and their equivalents would be reflected in diluted earnings per share by application of the treasury stock method. However, conversion of outstanding convertible preferred shares, options and warrants would have an antidilutive effect on loss per share for the years ended September 30, 2021 and 2020 and are therefore excluded from the computation of diluted loss per share. See Notes 8 and 9 for outstanding convertible preferred shares, options and warrants at September 30, 2021 and 2020. See Note 14 for subsequent issuance of common shares. Segmented Information The Company’s operations comprise a single reportable segment engaged in the research and development, manufacturing and commercialization of innovative pharmaceutical products. As the operations comprise a single reportable segment, amounts disclosed in the consolidated financial statements for net loss, comprehensive loss, depreciation and total assets also represent segmented amounts. Adoption of Recent Accounting Pronouncements On October 1, 2020, the Company adopted ASC Topic 326 Measurement of Credit Losses on Financial Instruments, which includes provisions that require financial assets measured at amortized cost basis to be presented at the net amount expected to be collected and credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses, which requires recognition of an estimate of all current expected credit losses. The Company did not record any credit losses as a result of adoption and there was no impact to opening accumulated deficit. Future accounting pronouncements

Property and equipment

Property and equipment	12 Months Ended
	Sep. 30, 2021
Property and equipment
NOTE - 4 Property and equipment	4. Property and equipment Property and equipment, net consisted of the following: September 30, 2021 September 30, 2020 Computer equipment $ 42,855 $ 34,651 Furniture and equipment 5,987 5,694 48,842 40,345 Less: accumulated depreciation (33,853 ) (25,530 ) Total property and equipment, net $ 14,989 $ 14,815 Depreciation expense amounted to $8,323 and $9,602 for the years ended September 30, 2021 and 2020, respectively.

Intangible assets

Intangible assets	12 Months Ended
	Sep. 30, 2021
Intangible assets
NOTE - 5 Intangible assets	5. Intangible assets Acquired License In April 2020, the Company entered into a license agreement with a pharmaceutical development company to obtain exclusive world-wide rights to know-how, patents and data relating to certain monoclonal antibodies (the Constructs), including sublicensing rights. Unless earlier terminated, the term of the license agreement will remain in effect for 25 years from the date of first commercial sale of licensed products containing the Constructs. Subsequently, the license agreement will automatically renew for five-year periods unless either party terminates the agreement in accordance with its terms. Under the license agreement, the Company is exclusively responsible, at its expense, for the research, development manufacture, marketing, distribution and commercialization of the Constructs and licensed products and to obtain all necessary licenses and rights. The Company is required to use commercially reasonable efforts to develop and commercialize the Constructs in accordance with the terms of a development plan established by the parties. The Company has determined that the license has multiple alternative future uses in research and development projects and sublicensing in other countries or for other disease indications. The value of the acquired license is recorded as an intangible asset with amortization over the estimated useful life of 25 years and evaluation for impairment at the end of each reporting period. The required upfront license payment of $2.5 million was paid by issuance of Series A-1 Convertible Preferred Shares. The value of the license includes acquisition legal costs. See Note 7 for license commitments and Note 8 for temporary equity. Intangible assets, net consisted of the following: September 30, 2021 September 30, 2020 The Constructs $ 2,529,483 $ 2,529,483 Less: accumulated amortization (147,119 ) (45,947 ) Total intangible assets, net $ 2,382,364 $ 2,483,536 Amortization expense amounted to $101,172 and $45,947 for the years ended September 30, 2021, and 2020, respectively. Total estimated future amortization of intangible assets for each fiscal year is as follows: Year Ending September 30, 2022 $ 101,172 September 30, 2023 101,172 September 30, 2024 101,172 September 30, 2025 101,172 September 30, 2026 101,172 Thereafter 1,876,504 $ 2,382,364

Leases

Leases	12 Months Ended
	Sep. 30, 2021
Leases
NOTE - 6 Leases	6. Leases Related party operating lease The Company leases facilities used for executive offices from a related company for a six-year term through December 2022, with options to renew for another two-year term. The option period is not included in the operating lease right-of-use assets and liabilities. The gross amounts of assets and liabilities related to operating leases were as follows: September 30, 2021 September 30, 2020 Assets: Operating lease right-of-use assets $ 96,571 $ 160,006 Liabilities: Current: Short-term operating lease liabilities $ 78,808 $ 69,730 Long-term: Long-term operating lease liabilities 20,512 94,460 Total lease liabilities $ 99,320 $ 164,190 The components of lease cost were as follows: Years Ended September 30, 2021 September 30, 2020 Operating lease cost, included in general and administrative on the Statements of Operations $ 81,207 $ 76,331 Lease terms and discount rates were as follows: September 30, 2021 September 30, 2020 Remaining lease term (months): 15 27 Estimated incremental borrowing rate: 6.5 % 6.5 % The approximate future minimum lease payments under operating leases at September 30, 2021 were as follows: Year Ending September 30, 2022 $ 82,942 September 30, 2023 20,736 Total lease payment 103,678 Less imputed interest 4,358 Present value of lease liabilities 99,320 Less current installments 78,808 Long-term lease liabilities excluding current installments $ 20,512 Cash flow information was as follows: Years Ended September 30, 2021 September 30, 2020 Cash paid for amounts included in the measurement of lease liabilities, included in accounts payable and accrued liabilities on the Statements of Cash Flows $ 81,209 $ 76,331 Other operating leases The Company also leased facilities through its California subsidiary under two operating leases that expired in September 2020. The total rent under these leases included in general and administrative expenses was $201,421 for the year ended September 30, 2020. There was no rent under these leases during the year ended September 30, 2021.

Commitments

Commitments	12 Months Ended
	Sep. 30, 2021
Commitments (Note 6)
NOTE - 7 Commitments	7. Commitments Research and other commitments The Company has commitments for contracted research organizations who perform clinical trials for the Company’s ongoing clinical studies, other service providers and the drug substance acquired in connection with a license agreement. Aggregate future contractual payments at September 30, 2021 are as follows: Year Ending September 30, 2022 $ 3,315,000 September 30, 2023 201,000 September 30, 2024 57,000 September 30, 2025 38,000 $ 3,611,000 License and royalty commitments In April 2020, through its Ontario subsidiary, the Company entered into a license agreement with a third party to obtain exclusive world-wide rights to certain know-how, patents and data relating to certain monoclonal antibodies (the Constructs), including sublicensing rights. An intangible asset for the acquired license has been recognized. See Note 5 for intangible assets. Under the license agreement, the Company is committed to payments of up to an aggregate amount of $356 million contingent upon meeting certain milestones outlined in the license agreement, primarily relating to future potential commercial approval and sales milestones. The Company also has a commitment to pay royalties based on any net sales of products containing the Constructs in the countries where the Company directly commercializes the products containing the Constructs and a percentage of any sublicensing revenue received by the Company and its affiliates in the countries where it does not directly commercialize the products containing the Constructs. No royalty or sublicensing payments were made to the third party during the year ended September 30, 2021. In connection with this license agreement and pursuant to a purchase agreement entered into in April 2020, the Company acquired drug substance of one of the Constructs for an aggregate purchase price of $5.0 million, payable in two future installments, the first when the Company is ready to initiate a Phase 2 trial and the second when the Company is ready to initiate a Phase 3 trial. A payment of $2.5 million was made for the drug substance during the year ended September 30, 2021. The remaining purchase commitment is included in the table above for the year ending September 30, 2022. In 2016, through its Ontario subsidiary, the Company entered into a license agreement with a third party to obtain exclusive rights to certain know- how, patents and data relating to a pharmaceutical product. The Company will use the exclusive rights to develop the product for therapeutic, prophylactic and diagnostic uses in topical dermal applications and anorectal applications. No intangible assets have been recognized under the license agreement with the third party. Under the license agreement, the Company is committed to payments of various amounts to the third party upon meeting certain milestones outlined in the license agreement, up to an aggregate amount of $18.6 million. Upon divestiture of substantially all of the assets of the Company, the Company shall pay the third party a percentage of the valuation of the licensed technology sold as determined by an external objective expert. The Company also has a commitment to pay the third party a royalty based on net sales of the product in countries where the Company, or an affiliate, directly commercializes the product and a percentage of sublicensing revenue received by the Company and its affiliates in the countries where it does not directly commercialize the product. No license or royalty payments were made to the third party during the years ended September 30, 2021 and 2020, respectively. In March 2021, through its Ontario subsidiary, the Company entered into a license agreement with the inventor of the same pharmaceutical product to acquire global rights for all fields of use beyond those named under the 2016 license agreement. For the year ended September 30, 2021, the Company recorded an expense of $212,000 as a result of meeting milestones outlined in the 2021 license agreement. The Company is committed to remaining payments of up to an aggregate amount of $69.1 million, primarily relating to future potential commercial approval and sales milestones. In addition, if the Company fails to file an investigational new drug application or foreign equivalent (IND) for the product within a certain period of time following the date of the agreement, the Company is required to remit to the inventor a fixed license fee annually as long as the requirement to file an IND remains unfulfilled. Retirement savings plan 401(k) contributions Executive officers and employees of our California subsidiary are eligible to receive the Company’s non-elective safe harbor employer contribution of 3% of eligible compensation under a 401(k) plan to provide retirement benefits. Employees are 100% vested in employer contributions and in any voluntary employee contributions. Contributions to the 401(k) plan were $23,786 and $11,936 during the years ended September 30, 2021 and 2020, respectively.

Temporary Equity

Temporary Equity	12 Months Ended
	Sep. 30, 2021
Temporary equity:
NOTE - 8 Temporary Equity	8. Temporary Equity Series A-1 Convertible Preferred Shares As described in Note 5, in April 2020, the Company issued 250 convertible preferred shares valued at $2.5 million designated as Series A-1 Convertible Preferred Shares (the “Series A-1 Shares”) to acquire a license. The Series A-1 Shares had no par value, a stated value of $10,000 per share and ranked, with respect to redemption payments, rights upon liquidation, dissolution or winding-up of the Company, or otherwise, senior in preference and priority to the Company’s common shares. Subject to certain exceptions and adjustments for share splits, each Series A-1 Share was convertible six months after its date of issuance into a number of the Company’s common shares calculated by dividing (i) the sum of the stated value of such Series A-1 Share plus a return equal to 3% of the stated value of such Series A-1 Share per annum (collectively, the “Preferred Amount”) by (ii) a fixed conversion price of $2.26. Because the convertible preferred shares were redeemable outside the control of the Company, they were presented as temporary equity rather than permanent shareholders’ equity until they were converted or redeemed. At September 30, 2021 all 250 Series A-1 Shares have been converted to common shares. Issued and outstanding Series A-1 Convertible Preferred Shares: Series A-1 Convertible Preferred Shares (#) Series A-1 Convertible Preferred Shares Balance - September 30, 2019 - $ - Issuance of convertible preferred shares 250 2,500,000 Convertible preferred share issuance costs - (57,154 ) Preferred return on convertible preferred shares - 34,109 Balance - September 30, 2020 250 $ 2,476,955 Preferred return on convertible preferred shares - 19,525 Conversion to common shares (250 ) (2,496,480 ) Balance - September 30, 2021 - $ -

Capital shares

Capital shares	12 Months Ended
	Sep. 30, 2021
Capital shares
NOTE - 9 Capital shares	9. Capital shares Equity offerings On March 2, 2021, the Company closed an underwritten offering of 1,562,500 common shares, no par value, at a price to the public of $6.40 per share less underwriting discounts and commissions. Gross proceeds from the offering amounted to $10,000,000. The Company granted to the underwriters a 30-day option to purchase up to an additional 234,375 common shares, which expired with no further shares issued. On the closing date the Company issued Underwriter Warrants to purchase an aggregate of up to 109,375 common shares at an exercise price of $8.00 per share, expiring on February 26, 2026. The direct costs related to the issuance of the common shares were $1,106,625. These direct costs were recorded as an offset against gross proceeds. The Company also recorded the fair value of underwriter warrants in the amount of $407,022 as share-based compensation to non-employees under additional paid-in capital and an offset against gross proceeds. On January 8, 2020, the Company closed a registered direct offering of 1,354,691 common shares, no par value and a concurrent private placement of Class A Purchase Warrants to purchase an aggregate of up to 1,016,036 common shares and Class B Purchase Warrants to purchase an aggregate of up to 677,358 common shares. Gross proceeds from the offering amounted to $4,360,500. The Class A Purchase Warrants were exercisable on or after July 8, 2020, at an exercise price of $4.80 per share and will expire on July 8, 2023. The Class B Purchase Warrants were exercisable on or after July 8, 2020, at an exercise price of $4.00 per share and expired on November 8, 2020. In connection with the offering, the Company also issued warrants to purchase an aggregate of 12,364 common shares to certain affiliated designees of the placement agent as part of the placement agent’s compensation. The placement agent warrants were exercisable on or after July 6, 2020, at an exercise price of $3.20 per share, and will expire on January 6, 2025. The warrants are considered contracts on the Company’s own shares and are classified as equity. The Company allocated gross proceeds with $3,070,358 as the value of common shares and $1,008,743 as the value of Class A Purchase Warrants and $281,399 as the value of Class B Purchase Warrants under additional paid-in capital in the consolidated statements of changes in shareholders’ equity on a relative fair value basis. The direct costs related to the issuance of the common shares and warrants were $468,699. These direct costs were recorded as an offset against gross proceeds with $330,025 being recorded under common shares and $138,674 being recorded under additional paid-in capital on a relative fair value basis. The Company also recorded the fair value of placement agent warrants in the amount of $18,051 as share based compensation to nonemployees under additional paid-in capital and an offset against gross proceeds with $12,710 being recorded under common shares and $5,341 being recorded under additional paid-in capital on a relative fair value basis. Equity distribution agreements On September 28, 2020, the Company entered into an equity distribution agreement with RBC Capital Markets, LLC (RBCCM), as sales agent, pursuant to which the Company could offer and sell, from time to time, common shares through an at-the-market equity offering program for up to $9.2 million in gross cash proceeds. The distribution agreement was terminated on February 25, 2021. During the year ended September 30, 2021, 586,463 shares were sold under the distribution agreement, resulting in $3,749,542 in gross proceeds. The commissions and direct costs of the offering program totaled $325,199 and were recorded as an offset against gross proceeds. No shares were sold during the year ended September 30, 2020. Subsequent to September 30, 2021, the Company entered into a new Equity Distribution Agreement with RBCCM, as sales agent, 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 $15 million in gross cash proceeds. RBCCM will use commercially reasonable efforts to sell the common shares from time to time, based upon the Company’s instructions. The Company has no obligation to sell any of the shares, and may at any time suspend sales under the distribution agreement or terminate the agreement in accordance with its terms. The total amount of cash that may be generated under this distribution agreement is uncertain and depends on a variety of factors, including market conditions and the trading price of the Company’s common shares. 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 warrants activity is as follows: Number of Warrant Shares (#) Weighted Average Exercise Price Balance - September 30, 2019 48,914 $ 11.19 Issued 1,705,758 4.47 Exercised (761,951 ) 4.31 Balance - September 30, 2020 992,721 $ 4.92 Issued 109,375 8.00 Exercised (381,650 ) 4.35 Balance - September 30, 2021 720,446 $ 5.69 The weighted average contractual life remaining on the outstanding warrants at September 30, 2021 is 25 months. The following table summarizes information about the warrants outstanding at September 30, 2021: Number of Warrants (#) Exercise Prices Expiry Dates 28,124 $ 15.90 May 2023 563,685 $ 4.80 July 2023 7,484 $ 4.81 June 2024 11,778 $ 3.20 January 2025 109,375 $ 8.00 February 2025 720,446 The fair value of warrants issued during the years ended September 30, 2021 and 2020 was estimated using the Black-Scholes option valuation model using the following assumptions: Year Ended September 30, 2021 Year Ended September 30, 2020 Underwriter Warrants Class A Warrants Class B Warrants Placement Agent Warrants Risk free interest rate 0.67 % 1.61 % 1.55 % 1.61 % Expected life 5 years 3.5 years 0.83 years 5 years Expected share price volatility 94.20 % 103.81 % 134.15 % 101.89 % Expected dividend yield 0.00 % 0.00 % 0.00 % 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. Options, restricted shares and restricted share units are eligible for grant under the 2019 Plan. The number of shares available for issuance under the 2019 Plan at September 30, 2021 is 2,625,951 including shares available for the exercise of outstanding options. 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 Balance - September 30, 2019 319,645 $ 3.39 $ 2.72 Granted 366,365 3.35 2.54 Exercised (4,450 ) 2.60 1.91 Forfeited (5,790 ) 2.73 2.03 Expired (333 ) 145.20 145.20 Balance - September 30, 2020 675,437 $ 3.30 $ 2.56 Granted 1,145,000 6.21 4.65 Exercised (19,746 ) 2.10 1.35 Forfeited (22,566 ) 6.02 4.02 Expired (1,906 ) 102.49 101.12 Balance - September 30, 2021 1,776,219 $ 5.06 $ 3.79 In October 2020 and April 2021, the independent members of the Board of Directors granted a total of 430,000 and 603,000 options, respectively, to directors, officers and employees of the Company pursuant to the 2019 Plan. The options have a term of 10 years and an exercise price equal to the Nasdaq closing price on the grant dates. Options granted for directors in April 2021 have monthly vesting in equal proportions over 12 months beginning on the grant date. Options granted for directors in October 2020 and all options for officers and current employees have monthly vesting in equal proportions over 36 months beginning on the grant date. During the year ended September 30, 2021, the independent members of the Board of Directors granted a total of 112,000 options to new employees of the Company pursuant to the 2019 Plan. The options have a term of 10 years with vesting in equal proportions over 36 months beginning on the monthly anniversary of the grant date following 90 days of employment, and an exercise price equal to the Nasdaq closing price on the grant dates. In February 2020, the independent members of the Board of Directors granted a total of 352,365 options to directors, officers and employees of the Company pursuant to the 2019 Plan. The options have a term of 10 years with 33% vesting on the grant date, with a pro rata amount of the balance vesting monthly for the next 36 months and an exercise price equal to the Nasdaq closing price on the grant date. In September 2020, the independent members of the Board of Directors granted a total of 14,000 options to new employees of the Company pursuant to the 2019 Plan. The options have a term of 10 years with vesting in equal proportions over 36 months beginning on the monthly anniversary of the grant date following 90 days of employment, and an exercise price equal to the Nasdaq closing price on the grant date. The aggregate intrinsic values of options outstanding at September 30, 2021 and 2020 were $4.46 million and $3.71 million, respectively. The aggregate intrinsic value of options exercised during the years ended September 30, 2021 and 2020 were $0.09 million and $0.01 million, respectively. The weighted average contractual life remaining on the outstanding options at September 30, 2021 is 103 months. The following table summarizes information about the options under the 2019 Plan outstanding and exercisable at September 30, 2021: Number of Options (#) Exercisable at Range of Exercise Prices Expiry Dates 214 214 C$ 638.40 Nov 2021 238 238 $ 304.08 Dec 2022 3,499 3,499 $ 35.28 - 93.24 Sep 2023-Mar 2025 296,403 294,783 C$ 2.16 Aug 2027-Dec 2028 335,365 229,248 $ 3.16 Feb 2030 429,000 142,652 $ 7.44 - 8.07 Sep 2030-Oct 2030 711,500 151,072 $ 5.25 - 5.74 Jan 2031-Sep 2031 1,776,219 821,706 The options exercisable at September 30, 2021 had a weighted average exercise price of $4.21, an intrinsic value of $2.93 million and a weighted average remaining life of 94 months. There were 954,513 options at September 30, 2021 that had not vested with a weighted average exercise price of $5.80 an intrinsic value of $1.53 million and a weighted average remaining life of 111 months. The fair value of options granted during the years ended September 30, 2021 and 2020 was estimated using the Black-Scholes option valuation model using the following assumptions: Years Ended September 30, 2021 September 30, 2020 Risk free interest rate 0.31% - 0.90 % 0.28% - 1.45 % Expected life 5 years 5 years Expected share price volatility 85.33% - 97.28 % 94.42% - 104.14 % Expected dividend yield 0.00 % 0.00 % The Company recorded $3,195,469 and $598,359 of share-based compensation expenses for the years ended September 30, 2021 and 2020, respectively. As of September 30, 2021, the Company had approximately $2.18 million of unrecognized share-based compensation expense, which is expected to be recognized over a period of 36 months.

Reimbursement Grant Income and

Reimbursement Grant Income and Receivable	12 Months Ended
	Sep. 30, 2021
Reimbursement Grant Income and Receivable
NOTE - 10 Reimbursement Grant Income and Receivable	10. Reimbursement Grant Income and Receivable Reimbursement grant income for the Company’s federal grant with the Canadian government’s Strategic Innovation Fund (SIF) is recorded based on the claim period. Claims during the year ended September 30, 2021 included reimbursement of eligible costs from the eligibility date in the SIF contribution agreement through September 30, 2021. At September 30, 2021, grant reimbursements receivable of $3,030,005 were included in accounts and other receivable.

Income Tax

Income Tax	12 Months Ended
	Sep. 30, 2021
Income Tax
NOTE - 11 Income Tax	11. Income Tax The reconciliation of the combined Canadian federal and provincial statutory income tax rate to the approximate effective tax rate is as follows: Years Ended September 30, 2021 September 30, 2020 Net loss before recovery of income taxes $ (13,342,350 ) $ (6,363,430 ) Canadian federal and provincial statutory income tax rate 26.5 % 26.5 % Expected income tax recovery $ (3,536,000 ) $ (1,686,000 ) Permanent differences 847,000 159,000 Effect of foreign currency and foreign tax rate differences (309,200 ) 23,800 Share issuance cost booked through equity or capitalization (447,000 ) (144,000 ) Change in valuation allowance 3,446,000 1,648,000 Income tax (recovery) expense $ 800 $ 800 Components of the net deferred tax asset or liability Deferred taxes are provided as a result of temporary differences that arise due to the difference between the income tax values and the carrying amount of assets and liabilities. Approximate deferred tax assets and liabilities are as follows: September 30, 2021 September 30, 2020 Non-capital losses carried forward - Canada $ 8,073,000 $ 4,881,000 Non-capital losses carried forward - U.S. 1,628,000 1,609,000 Research and development tax credits 1,294,000 1,253,000 Share issuance and financing costs 628,000 473,000 Operating lease liabilities 26,000 43,000 Other temporary differences 15,000 16,000 Subtotal 11,664,000 8,275,000 Less: valuation allowance (11,620,000 ) (8,173,000 ) Total net deferred tax assets $ 44,000 $ 102,000 Property and equipment $ (18,000 ) $ (17,000 ) Operating lease right-of-use assets (26,000 ) (42,000 ) Deferred share issuance costs - (43,000 ) Total deferred tax liabilities $ (44,000 ) $ (102,000 ) Net deferred taxes $ - $ - Realization of the deferred tax assets is dependent upon the generation of future taxable income, the amount and timing of which are uncertain. It is more likely than not that a tax benefit will not be realized. Accordingly, net deferred tax assets have been fully offset by a valuation allowance. Non-capital losses, capital losses, and research and development credits generated by Edesa Biotech USA, Inc. prior to changes in share ownership that occurred as a result of the reverse acquisition are substantially limited. It is unlikely that tax losses totaling $25.6 million and credits totaling $0.6 million will be utilized to offset potential future taxable income before expiration and they are excluded from deferred tax assets above. The approximate Canadian non-capital losses carried forward at September 30, 2021 expire as follows: 2025 C$ 21,000 2026 56,000 2027 114,000 2028 233,000 2029 688,000 2030 860,000 2031 685,000 2032 673,000 2033 266,000 2034 1,708,000 2035 2,207,000 2036 2,216,000 2037 2,123,000 2038 3,714,000 2039 1,732,000 2040 7,046,000 2041 14,046,000 Total C$ 38,388,000 Share issuance and financing costs will be fully amortized in 2025. The U.S. non-capital losses carried forward at September 30, 2021 totaled approximately $7,655,000, which do not expire for federal taxes. The U.S. state research and development tax credits carried forward at September 30, 2021 totaled approximately $619,000, which do not expire for state taxes. The approximate U.S. state non-capital losses carried forward at September 30, 2021 expire as follows: 2039 $ 70,000 2040 150,000 2041 68,000 Total $ 288,000

Financial instruments

Financial instruments	12 Months Ended
	Sep. 30, 2021
Financial instruments
NOTE - 12 Financial instruments	12. Financial instruments (a) Fair values 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 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. Observable inputs are inputs that reflect assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. There are three levels of inputs that may be used to measure fair value: · Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets and liabilities in markets that are not active. · Level 3 - Unobservable inputs for the asset or liability that are supported by little or no market activity. The carrying value of certain financial instruments such as cash and cash equivalents, accounts and other receivable, accounts payable and accrued liabilities 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 using level 1 inputs. (b) Interest rate and credit risk Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in interest rates. The Company does not believe that the results of operations or cash flows would be affected to any significant degree by a significant change in market interest rates, relative to interest rates on cash and cash equivalents due to the short-term nature of these balances. The Company is also exposed to credit risk at period end from the carrying value of its cash and cash equivalents and accounts and other receivable. The Company manages this risk by maintaining bank accounts with Canadian Chartered Banks, U.S. banks believed to be credit worthy, U.S. Treasury Bills and money market mutual funds of U.S. government securities. The Company’s cash is not subject to any external restrictions. The Company assesses the collectability of accounts receivable through a review of the current aging, as well as an analysis of historical collection rates, general economic conditions and credit status of customers. Credit risk for reimbursement grant and HST refunds receivable are not considered significant since amounts are due from the Canadian government’s Strategic Innovation Fund (SIF) and the Canada Revenue Agency. (c) Foreign exchange risk The Company and its subsidiary have balances in Canadian dollars that give rise to exposure to foreign exchange (FX) risk relating to the impact of translating certain non-U.S. dollar balance sheet accounts as these statements are presented in U.S. dollars. A strengthening U.S. dollar will lead to a FX loss while a weakening U.S. dollar will lead to a FX gain. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks. At September 30, 2021, the Company and its Canadian subsidiary had assets denominated in Canadian dollars of approximately C$9.8 million and the U.S. dollar exchange rate as at this date was equal to 1.2711 Canadian dollars. Based on the exposure at September 30, 2021, a 10% annual change in the Canadian/U.S. exchange rate would impact the Company’s loss and other comprehensive loss by approximately $773,000. (d) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty raising liquid funds to meet commitments as they fall due. In meeting its liquidity requirements, the Company closely monitors its forecasted cash requirements with expected cash drawdown.

Related party transactions

Related party transactions	12 Months Ended
	Sep. 30, 2021
Related party transactions
NOTE - 13 Related party transactions	13. Related party transactions During the years presented, the Company incurred the following related party transactions: · During the years ended September 30, 2021 and 2020, the Company incurred rent expense of $81,000 and $76,000 from a company controlled by the Company's CEO, respectively. These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by both parties.

Subsequent events

Subsequent events	12 Months Ended
	Sep. 30, 2021
Reimbursement Grant Income and Receivable
NOTE - 14 Subsequent events	14. Subsequent events On November 22, 2021, the Company entered into a new Equity Distribution Agreement with RBC Capital Markets, LLC (RBCCM), as sales agent, 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 $15 million in gross cash proceeds. Subsequently, 223,396 common shares were sold under the distribution agreement with RBCCM for gross proceeds of approximately $1.29 million.

Significant accounting polici_2

Significant accounting policies (Policies)	12 Months Ended
	Sep. 30, 2021
Significant accounting policies
Use of estimates	The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period or year. Actual results could differ from those estimates. Areas where significant judgment is involved in making estimates are valuation of accounts and other receivable; valuation and useful lives of property and equipment; intangible assets; operating lease right-of-use assets; deferred income taxes; classification of convertible preferred shares as liability or equity; the determination of fair value of share-based compensation; the determination of fair value of warrants in order to allocate proceeds from equity issuances; and forecasting future cash flows for assessing the going concern assumption.
Functional and reporting currencies	The consolidated financial statements of the Company are presented in U.S. dollars, unless otherwise stated, which is the Company’s and its wholly owned subsidiary’s, Edesa Biotech USA, Inc., functional currency. The functional currency of the Company’s wholly owned subsidiary, Edesa Biotech Research, Inc., as determined by management, is Canadian dollars.
Cash and cash equivalents	Cash and cash equivalents consist of demand deposits with financial institutions and highly liquid investments which are readily convertible into cash with maturities of three months or less when purchased. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature.
Investments	There were no investments during the year ended September 30, 2021. Investments during the year ended September 30, 2020 consisted of U.S. Treasury bills with original maturities between 13 and 52 weeks. They were reported at amortized cost, which approximated fair value. The Company regularly reviewed these investments to determine whether any decline in fair value below the amortized cost basis occurred that was other than temporary. If a decline in fair value occurred that was determined to be other than temporary, the cost basis of the investment would be written down to fair value. There were no investments outstanding at September 30, 2021 and 2020.
Accounts and other receivable	The Company assesses the collectability of its accounts receivable through a review of its current aging, as well as an analysis of its historical collection rate, general economic conditions and credit status of its customers. Accounts and other receivable include reimbursement grant income for the Company’s federal grant with the Canadian government’s Strategic Innovation Fund (SIF) and Harmonized Sales Tax (HST) refunds receivable. As of September 30, 2021, all outstanding accounts, grants and HST refunds receivable were deemed to be fully collectible, and therefore, no allowance for doubtful accounts was recorded.
Property and equipment	Property and equipment are recorded at historical cost less accumulated depreciation and any accumulated impairment losses. Depreciation is recorded to write off the cost of assets less their residual values over their useful lives, using the declining balance and straight-line methods. Assets not in use and on consignment for sale are carried at the expected net proceeds value. Maintenance and repair expenditures that do not improve or extend the life are expensed in the period incurred. Any gain or loss arising on the disposal or retirement of an item of property and equipment is recognized as the difference between the sales proceeds and the carrying amount of the asset. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis. The depreciation policy for the principal asset categories are calculated as follows: Computer equipment 30% declining balance method or straight line 3 years Furniture and equipment 20% declining balance method
Intangible assets	Intangible assets represent the exclusive world-wide rights to know-how, patents and data relating to certain monoclonal antibodies (the Constructs), including sublicensing rights, acquired by entering into a license agreement with a pharmaceutical development company. Unless earlier terminated, the term of the license agreement will remain in effect for 25 years from the date of first commercial sale of licensed products containing the Constructs. Subsequently, the license agreement will automatically renew for five-year periods unless either party terminates the agreement in accordance with its terms. Intangible assets are stated at their historical cost, amortized on a straight-line basis over their expected useful lives, which is 25 years, and subject to impairment review at the end of each reporting period.
Impairment of long-lived assets	Long-lived assets are tested for impairment when indicators of impairment exist. When a significant change in the expected timing or amount of the future cash flows of the financial asset is identified, the carrying amount of the financial asset is reduced and the amount of the write-down is recognized as a loss. A previously recognized impairment loss may be reversed to the extent of the improvement, provided it is not greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously, and the amount of the reversal is recognized in net income (loss).
Fair value measurement	The Company uses the fair value measurement framework for valuing financial assets and liabilities. See Note 12.
Revenue recognition	The Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC Topic 606: (1) identify contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenues when (or as) the Company satisfies the performance obligation(s). Revenues consist of sales of product inventory obtained in the reverse acquisition completed in June 2019, which are recognized upon shipment when the customer obtains control of the product and the Company has no further performance obligations. Reimbursement grant income is recognized based on the reimbursement rate included in the government contribution agreement when allowable expenses have been incurred.
Research and development	Research and development expenses principally consist of (i) contract research organizations for clinical trial management services, (ii) contract manufacturing organizations for manufacturing the drug compound(s) for use in clinical trials and (iii) salaries of employees directly involved in research and development efforts. Research and development costs are expensed as incurred.
Share-based compensation	The Company measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted since the fair value of the goods or services received by the Company cannot be reliably estimated. The Company grants options to buy common shares of the Company to its directors, officers, employees and consultants, and grants other equity- based instruments such as warrants to non-employees. The fair value of share-based compensation is measured on the date of grant, using the Black- Scholes option valuation model and is recognized over the vesting period net of estimated forfeitures for employees or the service period for non-employees. The provisions of the Company’s share-based compensation plans do not require the Company to settle any options by transferring cash or other assets, and therefore the Company classifies the awards as equity. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option.
Translation of foreign currency transactions	The Company’s reporting currency is the U.S. dollar. The financial statements of the wholly owned Canadian subsidiary is measured using the Canadian dollar as the functional currency. Assets and liabilities of the Canadian operation have been translated at year-end exchange rates and related revenue and expenses have been translated at average exchange rates for the year. Accumulated gains and losses resulting from the translation of the financial statements of the Canadian operation are included as part of accumulated other comprehensive loss, a separate component of shareholders’ equity. For other transactions denominated in currencies other than the Company’s functional currency, the monetary assets and liabilities are translated at the year-end rates. Revenue and expenses are translated at rates of exchange prevailing on the transaction dates. Non-monetary balance sheet and related income statement accounts are remeasured into U.S. dollar using historical exchange rates. All of the exchange gains or losses resulting from these other transactions are recognized in the statements of operations and comprehensive loss.
Income taxes	Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts using enacted tax rates and laws in effect in the year in which the differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized. The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. The Company is subject to examination by taxing authorities in Canada and the U.S. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying financial statements. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense. The Company accounts for income taxes on a tax jurisdictional basis. The Company files income tax returns in Canada, the provinces of British Columbia and Ontario, the U.S. and the state of California.
Earnings (loss) per share	Basic earnings (loss) per share is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. The computation of diluted earnings (loss) per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on earnings (loss) per share. The dilutive effect of convertible securities would be reflected in diluted earnings per share by application of the “if converted” method. The dilutive effect of outstanding options and warrants and their equivalents would be reflected in diluted earnings per share by application of the treasury stock method. However, conversion of outstanding convertible preferred shares, options and warrants would have an antidilutive effect on loss per share for the years ended September 30, 2021 and 2020 and are therefore excluded from the computation of diluted loss per share. See Notes 8 and 9 for outstanding convertible preferred shares, options and warrants at September 30, 2021 and 2020. See Note 14 for subsequent issuance of common shares.
Segmented Information	The Company’s operations comprise a single reportable segment engaged in the research and development, manufacturing and commercialization of innovative pharmaceutical products. As the operations comprise a single reportable segment, amounts disclosed in the consolidated financial statements for net loss, comprehensive loss, depreciation and total assets also represent segmented amounts.
Adoption of Recent Accounting Pronouncements	On October 1, 2019, the Company adopted Accounting Standards Codification (ASC) Topic 842 Leases using the modified retrospective transition method, applying the new standard to all leases existing at the date of initial application. In addition, the Company elected the package of practical expedients in transition, which permitted the Company not to reassess prior conclusions about lease identification, lease classification and initial direct costs on leases that commenced prior to adoption of the new standard. The Company also elected the ongoing practical expedient not to recognize operating lease right-of-use assets and operating lease liabilities for short-term leases. As a result of adopting the new standard, the Company recognized operating lease right-of-use (ROU) assets of approximately $234,000 and operating lease liabilities of approximately $234,000 on the balance sheet for one operating lease with a term longer than 12 months at adoption. There was no impact to opening accumulated deficit. The Company had three short-term operating leases upon adoption that did not follow the ROU model. The ROU assets are initially measured at cost and amortized using the straight-line method through the end of the lease term. The lease liabilities are measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company’s incremental borrowing rate. On October 1, 2020, the Company adopted ASC Topic 326 Measurement of Credit Losses on Financial Instruments, which includes provisions that require financial assets measured at amortized cost basis to be presented at the net amount expected to be collected and credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses, which requires recognition of an estimate of all current expected credit losses. The Company did not record any credit losses as a result of adoption and there was no impact to opening accumulated deficit.
Future accounting pronouncements	In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, modifying ASC Topic 740, Income Taxes. The amendments in ASU 2019-12, among other things, remove certain exceptions to the general principles in ASC 740 and seek more consistent application by clarifying and amending the existing guidance. The guidance is effective for public entities for fiscal years beginning after December 15, 2020, including interim periods within those years, with early adoption permitted for periods for which financial statements  have not yet been issued. These standards are effective for the Company during the fiscal year ending September 30, 2022. Management expects that ASU 2019-12, will not have a significant impact on the Company’s consolidated financial statements.

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Sep. 30, 2021
Property and equipment
Property and equipment	September 30, 2021 September 30, 2020 Computer equipment $ 42,855 $ 34,651 Furniture and equipment 5,987 5,694 48,842 40,345 Less: accumulated depreciation (33,853 ) (25,530 ) Total property and equipment, net $ 14,989 $ 14,815

Intagible Assets (Tables)

Intagible Assets (Tables)	12 Months Ended
	Sep. 30, 2021
Intangible assets
Intangible assets	September 30, 2021 September 30, 2020 The Constructs $ 2,529,483 $ 2,529,483 Less: accumulated amortization (147,119 ) (45,947 ) Total intangible assets, net $ 2,382,364 $ 2,483,536
Estimated future amortization of intagible assets	Year Ending September 30, 2022 $ 101,172 September 30, 2023 101,172 September 30, 2024 101,172 September 30, 2025 101,172 September 30, 2026 101,172 Thereafter 1,876,504 $ 2,382,364

Leases (Tables)

Leases (Tables)	12 Months Ended
	Sep. 30, 2021
Leases
Lease assets and liabilities	September 30, 2021 September 30, 2020 Assets: Operating lease right-of-use assets $ 96,571 $ 160,006 Liabilities: Current: Short-term operating lease liabilities $ 78,808 $ 69,730 Long-term: Long-term operating lease liabilities 20,512 94,460 Total lease liabilities $ 99,320 $ 164,190
Lease cost components	Years Ended September 30, 2021 September 30, 2020 Operating lease cost, included in general and administrative on the Statements of Operations $ 81,207 $ 76,331
Lease terms and discount rates	September 30, 2021 September 30, 2020 Remaining lease term (months): 15 27 Estimated incremental borrowing rate: 6.5 % 6.5 %
Future minimum lease payments	Year Ending September 30, 2022 $ 82,942 September 30, 2023 20,736 Total lease payment 103,678 Less imputed interest 4,358 Present value of lease liabilities 99,320 Less current installments 78,808 Long-term lease liabilities excluding current installments $ 20,512
Cash paid-lease liabilities	Years Ended September 30, 2021 September 30, 2020 Cash paid for amounts included in the measurement of lease liabilities, included in accounts payable and accrued liabilities on the Statements of Cash Flows $ 81,209 $ 76,331

Commitments (Tables)

Commitments (Tables)	12 Months Ended
	Sep. 30, 2021
Commitments (Note 6)
Future contractual payments	Year Ending September 30, 2022 $ 3,315,000 September 30, 2023 201,000 September 30, 2024 57,000 September 30, 2025 38,000 $ 3,611,000

Temporary Equity (Tables)

Temporary Equity (Tables)	12 Months Ended
	Sep. 30, 2021
Temporary equity:
Temporary equity	Series A-1 Convertible Preferred Shares (#) Series A-1 Convertible Preferred Shares Balance - September 30, 2019 - $ - Issuance of convertible preferred shares 250 2,500,000 Convertible preferred share issuance costs - (57,154 ) Preferred return on convertible preferred shares - 34,109 Balance - September 30, 2020 250 $ 2,476,955 Preferred return on convertible preferred shares - 19,525 Conversion to common shares (250 ) (2,496,480 ) Balance - September 30, 2021 - $ -

Capital Shares (Tables)

Capital Shares (Tables)	12 Months Ended
	Sep. 30, 2021
Capital shares
Warrant activity	Number of Warrant Shares (#) Weighted Average Exercise Price Balance - September 30, 2019 48,914 $ 11.19 Issued 1,705,758 4.47 Exercised (761,951 ) 4.31 Balance - September 30, 2020 992,721 $ 4.92 Issued 109,375 8.00 Exercised (381,650 ) 4.35 Balance - September 30, 2021 720,446 $ 5.69
Warrants outstanding	Number of Warrants (#) Exercise Prices Expiry Dates 28,124 $ 15.90 May 2023 563,685 $ 4.80 July 2023 7,484 $ 4.81 June 2024 11,778 $ 3.20 January 2025 109,375 $ 8.00 February 2025 720,446
Warrant valuation model	Year Ended September 30, 2021 Year Ended September 30, 2020 Underwriter Warrants Class A Warrants Class B Warrants Placement Agent Warrants Risk free interest rate 0.67 % 1.61 % 1.55 % 1.61 % Expected life 5 years 3.5 years 0.83 years 5 years Expected share price volatility 94.20 % 103.81 % 134.15 % 101.89 % Expected dividend yield 0.00 % 0.00 % 0.00 % 0.00 %
Stock option activity	Number of Options (#) Weighted Average Exercise Price Weighted Average Grant Date Fair Value Balance - September 30, 2019 319,645 $ 3.39 $ 2.72 Granted 366,365 3.35 2.54 Exercised (4,450 ) 2.60 1.91 Forfeited (5,790 ) 2.73 2.03 Expired (333 ) 145.20 145.20 Balance - September 30, 2020 675,437 $ 3.30 $ 2.56 Granted 1,145,000 6.21 4.65 Exercised (19,746 ) 2.10 1.35 Forfeited (22,566 ) 6.02 4.02 Expired (1,906 ) 102.49 101.12 Balance - September 30, 2021 1,776,219 $ 5.06 $ 3.79
Stock options outstanding	Number of Options (#) Exercisable at Range of Exercise Prices Expiry Dates 214 214 C$ 638.40 Nov 2021 238 238 $ 304.08 Dec 2022 3,499 3,499 $ 35.28 - 93.24 Sep 2023-Mar 2025 296,403 294,783 C$ 2.16 Aug 2027-Dec 2028 335,365 229,248 $ 3.16 Feb 2030 429,000 142,652 $ 7.44 - 8.07 Sep 2030-Oct 2030 711,500 151,072 $ 5.25 - 5.74 Jan 2031-Sep 2031 1,776,219 821,706
Fair value of options granted assumptions	Years Ended September 30, 2021 September 30, 2020 Risk free interest rate 0.31% - 0.90 % 0.28% - 1.45 % Expected life 5 years 5 years Expected share price volatility 85.33% - 97.28 % 94.42% - 104.14 % Expected dividend yield 0.00 % 0.00 %

Income Tax (Tables)

Income Tax (Tables)	12 Months Ended
	Sep. 30, 2021
Income Tax
Income tax rate reconciliation	Years Ended September 30, 2021 September 30, 2020 Net loss before recovery of income taxes $ (13,342,350 ) $ (6,363,430 ) Canadian federal and provincial statutory income tax rate 26.5 % 26.5 % Expected income tax recovery $ (3,536,000 ) $ (1,686,000 ) Permanent differences 847,000 159,000 Effect of foreign currency and foreign tax rate differences (309,200 ) 23,800 Share issuance cost booked through equity or capitalization (447,000 ) (144,000 ) Change in valuation allowance 3,446,000 1,648,000 Income tax (recovery) expense $ 800 $ 800
Deferred tax assets and liabilities	September 30, 2021 September 30, 2020 Non-capital losses carried forward - Canada $ 8,073,000 $ 4,881,000 Non-capital losses carried forward - U.S. 1,628,000 1,609,000 Research and development tax credits 1,294,000 1,253,000 Share issuance and financing costs 628,000 473,000 Operating lease liabilities 26,000 43,000 Other temporary differences 15,000 16,000 Subtotal 11,664,000 8,275,000 Less: valuation allowance (11,620,000 ) (8,173,000 ) Total net deferred tax assets $ 44,000 $ 102,000 Property and equipment $ (18,000 ) $ (17,000 ) Operating lease right-of-use assets (26,000 ) (42,000 ) Deferred share issuance costs - (43,000 ) Total deferred tax liabilities $ (44,000 ) $ (102,000 ) Net deferred taxes $ - $ -
Non-capital income tax losses	2025 C$ 21,000 2026 56,000 2027 114,000 2028 233,000 2029 688,000 2030 860,000 2031 685,000 2032 673,000 2033 266,000 2034 1,708,000 2035 2,207,000 2036 2,216,000 2037 2,123,000 2038 3,714,000 2039 1,732,000 2040 7,046,000 2041 14,046,000 Total C$ 38,388,000 Share issuance and financing costs will be fully amortized in 2025. The U.S. non-capital losses carried forward at September 30, 2021 totaled approximately $7,655,000, which do not expire for federal taxes. The U.S. state research and development tax credits carried forward at September 30, 2021 totaled approximately $619,000, which do not expire for state taxes. The approximate U.S. state non-capital losses carried forward at September 30, 2021 expire as follows: 2039 $ 70,000 2040 150,000 2041 68,000 Total $ 288,000

Nature of operations (Details N

Nature of operations (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Reimbursement grant income	$ 10,340,000
Net Loss	13,340,000	$ 6,360,000
Research and development expenses	11,000,000
Cash and cash equivalents	7,840,000
Working capital	10,630,000
Shareholders' equity	13,060,000
Accumulated deficit	26,500,000
RBC Capital Markets, LLC [Member] | Equity Distribution Agreement [Member]
Issuance of common shares upon exercise of warrants	987,859
Net cash proceeds	5,120,000
March 2, 2021 [Member]
Common shares in public offerings, shares	1,562,500
Common shares in public offerings, value	$ 8,890,000
Common shares in public offerings price per share	$ 6.40

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Property and equipment, gross	$ 48,842	$ 40,345
Less: accumulated depreciation	(33,853)	(25,530)
Total property and equipment, net	14,989	14,815
Computer Equipment
Property and equipment, gross	42,855	34,651
Furniture and Equipment
Property and equipment, gross	$ 5,987	$ 5,694

Property and Equipment (Detai_2

Property and Equipment (Details Narrative) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Property and equipment
Depreciation expense	$ 8,323	$ 9,602

Intangible Assets (Details)

Intangible Assets (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Intangible assets
The Constructs	$ 2,529,483,000,000	$ 2,529,483,000,000
Less: accumulated amortization	147,119,000,000	45,947,000,000
Intangible assets, net	$ 2,382,364	$ 2,483,536

Intagible Assets (Details 1)

Intagible Assets (Details 1)	Sep. 30, 2021USD ($)
Intangible assets
September 30, 2022	$ 101,172
September 30, 2023	101,172
September 30, 2024	101,172
September30, 2026	101,172
September 30, 2025	101,172
Thereafter	1,876,504
Total	$ 2,382,364

Intagible Assets (Details Narra

Intagible Assets (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Intangible assets
Amortization expense	$ 101,172	$ 45,947
Description of licence agreement	The required upfront license payment of $2.5 million was paid by issuance of Series A-1 Convertible Preferred Shares

Leases (Details)

Leases (Details) - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Assets:
Operating lease right-of-use assets	$ 96,571	$ 160,006
Current:
Short-term operating lease liabilities	78,808	69,730
Long-term:
Long-term operating lease liabilities	20,512	94,460
Total lease liabilities	$ 99,320	$ 164,190

Leases (Details 1)

Leases (Details 1) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
General and Administrative Expense
Operating lease cost	$ 81,207	$ 76,331

Leases (Details 2)

Leases (Details 2)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Leases
Remaining lease term (months)	15 years	27 years
Estimated incremental borrowing rate	6.50%	6.50%

Leases (Details 3)

Leases (Details 3) - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Year Ending September 30,
September 30, 2022	$ 82,942
September 30, 2023	20,736
Total	103,678
Less imputed interest	4,358
Present value of lease liabilities	99,320	$ 164,190
Less current installments	78,808	69,730
Long-term lease liabilities excluding current installments	$ 20,512	$ 94,460

Leases (Details 4)

Leases (Details 4) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Leases
Cash paid for amounts included in the measurement of lease liabilities	$ 81,209	$ 76,331

Leases (Details Narrative)

Leases (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
General and administrative expenses	$ 5,734,260	$ 3,382,591
California [Member] | Operating Lease [Member]
General and administrative expenses	$ 201,421

Commitments (Details)

Commitments (Details) $ in Millions	Sep. 30, 2021USD ($)
Year Ending September 30,
September 30, 2022	$ 3,315,000
September 30, 2023	201,000
September 30, 2024	57,000
September 30, 2025	38,000
Total	$ 3,611,000

Commitments (Details Narrative)

Commitments (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Employer contributions to 401K plan	$ 23,786,000,000	$ 11,936,000,000
Eligible compensarion,percentage	3.00%
April 2020 [Member] | License Commitments [Member]
Remaining payments of contingent	$ 356,000,000
Expenses	$ 2,500,000
Description of acquired drugs	the Company acquired drug substance of one of the Constructs for an aggregate purchase price of $5.0 million, payable in two future installments, the first when the Company is ready to initiate a Phase 2 trial and the second when the Company is ready to initiate a Phase 3 trial. A payment of $2.5 million was made for the drug substance during the year ended September 30, 2021
2021 [Member] | License Commitments Agreement [Member]
Payments to investors	$ 69,100,000
License expenses	212,000
2016 [Member] | License Commitments [Member]
Payments to third party	$ 18,600,000

Temporary Equity (Details)

Temporary Equity (Details) - Series A-1 Convertible Preferred Shares - USD ($)	1 Months Ended	12 Months Ended
	Apr. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Beginning balance, shares		250	0
Beginning balance, amount		$ 2,476,955	$ 0
Issuance of convertible preferred shares, shares			250
Issuance of convertible preferred shares, amount			$ 2,500,000
Convertible preferred shares issuance costs, shares			0
Convertible preferred shares issuance costs, amount			(57,154)
Preferred return on convertible preferred shares, shares		0	0
Preferred return on convertible preferred shares, amount		$ 19,525	$ 34,109
Conversion to common shares, shares	250,000,000	(250)
Conversion to common shares, amount		$ (2,496,480)
Preferred shares converted, shares		0	0
Preferred shares converted, amount		$ 0	$ 0

Temporary Equity (Details Narra

Temporary Equity (Details Narrative) - Series A-1 Convertible Preferred Shares - USD ($)	1 Months Ended	12 Months Ended
	Apr. 30, 2020	Sep. 30, 2021
Conversion of preferred shares,amount	$ 2.5
Description of shares splits	the Company’s common shares calculated by dividing (i) the sum of the stated value of such Series A-1 Share plus a return equal to 3% of the stated value of such Series A-1 Share per annum (collectively, the “Preferred Amount”) by (ii) a fixed conversion price of $2.26
Conversion of preferred shares, shares	250,000,000	(250)
Stated price of shares, amount	$ 10,000
Conversion price		$ 2.26
Interest rate		3.00%

Capital Shares (Details)

Capital Shares (Details) - $ / shares	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Capital shares
Number of warrants, beginning balance	992,721	48,914
Issued	109,375	1,705,758
Exercised	(381,650)	(761,951)
Number of warrants, ending balance	720,446	992,721
Weighted average exercise price, beginning balance	$ 4.92	$ 11.19
Issued	8	4.47
Exercised	4.35	4.31
Weighted average exercise price, ending balance	$ 5.69	$ 4.92

Capital Shares (Details 1)

Capital Shares (Details 1) - $ / shares	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Sep. 30, 2019
Number of warrants, beginning balance	720,446	720,446	760,290	992,721	48,914
Weighted average exercise price, beginning balance	$ 5.69	$ 5.65		$ 4.92	$ 11.19
Warrant 1
Number of warrants, beginning balance		28,124
Weighted average exercise price, beginning balance		$ 15.90
Expiry date	May 2023
Warrant 2
Number of warrants, beginning balance		563,685
Weighted average exercise price, beginning balance		$ 4.80
Expiry date	July 2023
Warrant 3
Number of warrants, beginning balance		7,484
Weighted average exercise price, beginning balance		$ 4.81
Expiry date	June 2024
Warrant 4
Number of warrants, beginning balance		11,778
Weighted average exercise price, beginning balance		$ 3.20
Expiry date	January 2025
Warrant 5
Number of warrants, beginning balance		109,375
Weighted average exercise price, beginning balance		$ 8
Expiry date	February 2025

Capital Shares (Details 2)

Capital Shares (Details 2)	12 Months Ended
	Sep. 30, 2021
Underwriter Warrants
Risk free interest rate	0.67%
Expected life (years)	5 years
Expected share price volatility	94.20%
Expected dividend yield	0.00%
Class A Warrants
Risk free interest rate	1.61%
Expected life (years)	3 years 6 months
Expected share price volatility	103.81%
Expected dividend yield	0.00%
Class B Warrants
Risk free interest rate	1.55%
Expected life (years)	9 months 29 days
Expected share price volatility	134.15%
Expected dividend yield	0.00%
Placement Agent Warrants
Risk free interest rate	1.61%
Expected life (years)	5 years
Expected share price volatility	101.89%
Expected dividend yield	0.00%

Capital Shares (Details 3)

Capital Shares (Details 3) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Capital shares
Number of options, beginning balance	675,437	319,645
Number of options granted	1,145,000	366,365
Number of options, exercised	(19,746)	(4,450)
Number of options, forfeited	(22,566)	(5,790)
Number of options expired	(1,906)	(333)
Number of options, ending balance	1,776,219	675,437
Weighted average exercise price, beginning balance	$ 3.30	$ 3.39
Weighted average exercise price granted	6.21	3.35
Weighted average exercise price exercised	2.10	2.60
Weighted average exercise price forfeited	6.02	2.73
Weighted average exercise price expired	102.49	145.20
Weighted average exercise price, ending balance	$ 5.06	$ 3.30
Weighted average grant date fair value, beginning balance	$ 2,560,000	$ 2,720,000
Weighted average grant date fair value, granted	4,650,000	2,540,000
Weighted average grant date fair value, exercised	1,350,000	1,910,000
Weighted average grant date fair value, forfeited	4,020,000	2,030,000
Weighted average grant date fair value, expired	101,120,000	145,200,000
Weighted average grant date fair value, ending balance	$ 3,790,000	$ 2,560,000

Capital Shares (Details 4)

Capital Shares (Details 4) - $ / shares	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Sep. 30, 2019
Number of options, beginning balance	1,776,219	1,772,719	1,772,719	675,437	319,645
Options exercisable	821,706
Weighted average exercise price, beginning balance	$ 5.06	$ 5.07		$ 3.30	$ 3.39
Stock Option 1
Number of options, beginning balance	214
Options exercisable	214
Weighted average exercise price, beginning balance	$ 638.40
Expiry dates	Nov 2021
Stock Option 2
Number of options, beginning balance	238
Options exercisable	238
Weighted average exercise price, beginning balance	$ 304.08
Expiry dates	Dec 2022
Stock Option 3
Number of options, beginning balance	3,499
Options exercisable	3,499
Stock Option 3 | Minumum
Weighted average exercise price, beginning balance	$ 35.28
Expiry dates	Sep 2023
Stock Option 3 | Maximum
Weighted average exercise price, beginning balance	$ 93.24
Expiry dates	Mar 2025
Stock Option 4
Number of options, beginning balance	296,403
Options exercisable	294,783
Weighted average exercise price, beginning balance	$ 2.16
Stock Option 4 | Minumum
Expiry dates	Aug 2027
Stock Option 4 | Maximum
Expiry dates	Dec 2028
Stock Option 5
Number of options, beginning balance	335,365
Options exercisable	229,248
Weighted average exercise price, beginning balance	$ 3.16
Expiry dates	Feb 2030
Stock Option 6
Number of options, beginning balance	429,000
Options exercisable	142,652
Stock Option 6 | Minumum
Weighted average exercise price, beginning balance	$ 7.44
Expiry dates	Sep 2030
Stock Option 6 | Maximum
Weighted average exercise price, beginning balance	$ 8.07
Expiry dates	Oct 2030
Stock Option 7
Number of options, beginning balance	711,500
Options exercisable	151,072
Stock Option 7 | Minumum
Weighted average exercise price, beginning balance	$ 5.25
Expiry dates	Jan 2031
Stock Option 7 | Maximum
Weighted average exercise price, beginning balance	$ 5.74
Expiry dates	Sep 2031

Capital Shares (Details 5)

Capital Shares (Details 5)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Expected life (years)	5 years	5 years
Expected dividend yield	0.00%	0.00%
Minumum
Risk free interest rate	0.31%	0.28%
Expected share price volatility	85.33%	94.42%
Maximum
Risk free interest rate	0.90%	1.45%
Expected share price volatility	97.28%	104.14%

Capital Shares (Details Narrati

Capital Shares (Details Narrative) - USD ($)	Jan. 08, 2020	Nov. 22, 2021	Apr. 30, 2021	Oct. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021	Sep. 30, 2019
Shares remaining under 2019 Plan					2,625,951
Weighted average contractual life remaining on outstanding options					103 years
Aggregate intrinsic values					$ 4,460,000	$ 3,710,000
Aggregate intrinsic values,options exercised					90,000	10,000
Share-based compensation					$ 3,195,469	$ 598,359
Unrecognized share-based compensation							$ 2,740,000
Unrecognized share-based compensation recognition period					36 years
Granted option shares			603,000	430,000	112,000
Expected term					10 years
Warrants exercise price					$ 5.69	$ 4.92	$ 5.65	$ 11.19
Share-based compensation					$ 3,195,469	$ 598,359
Proceeds from issuance of common shares					1,106,625
Gross proceeds		$ 15,000,000
Non Employees [Member]
Share-based compensation					407,022
Equity Distribution Agreement [Member]
Gross proceeds					3,749,542,000,000	9,200,000
Direct costs					325,199
Proceeds from public offering					$ 15,000,000
Common shares					586,463
March 2, 2021 [Member]
Warrants exercise price					$ 8
Gross proceeds					$ 10,000,000,000,000	$ 9,200,000
Warrants to purchase common shares					109,375
Common shares in public offerings price per share					$ 6.40
Common shares in public offerings, shares					$ 1,562,500
Additional of common share					234,375
Warrant expiry date					Feb. 26, 2026
February 2020 [Member]
Granted option shares					352,365
Expected term					10 years
Grant date					36 years
September 2020 [Member]
Granted option shares					14,000
Expected term					10 years
Grant date					36 years
January 8 2020 [Member] | Private Placement [Member]
Warrants exercise price					$ 3.20
Share-based compensation					$ 18,051
Common shares					1,354,691
Maturity date	Jan. 6, 2025
Class A Purchase Warrants to purchase common shares					1,016,036
Gross proceeds	$ 3,070,358				$ 4,360,500
Class A Purchase Warrants were exercisable price					$ 4.80
Class B Purchase Warrants were exercisable price					$ 4
Warrants to purchase common shares					12,364
Class A Purchase Warrants to purchase common shares, amount					$ 1,008,743
Class B Purchase Warrants to purchase common shares, amount					281,399
Direct costs					468,699
Offset gross proceeds	12,710				330,025
Additional paid-in capital	$ 5,341				$ 138,674
Class B Purchase Warrants to purchase common shares					677,358

Reimbursement Grant Income an_2

Reimbursement Grant Income and Receivable (Details Narrative)	Sep. 30, 2021USD ($)
Reimbursement Grant Income and Receivable (Details Narrative)
Grant reimbursements receivable	$ 3,030,005

Income Tax (Details)

Income Tax (Details) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Tax
Net loss before recovery of income taxes	$ (13,342,350)	$ (6,363,430)
Canadian federal and provincial statutory income tax rate	26.50%	26.50%
Expected income tax recovery	$ (3,536,000)	$ (1,686,000)
Permanent differences	847,000	159,000
Effect of foreign currency and foreign tax rate differences	(309,200)	23,800
Share issuance cost booked through equity or capitalization	(447,000)	(144,000)
Change in valuation allowance	3,446,000	1,648,000
Income tax (recovery) expense	$ 800	$ 800

Income Tax (Details 1)

Income Tax (Details 1) - USD ($)	Sep. 30, 2021	Sep. 30, 2020
Income Tax
Non-capital losses carried forward - Canada	$ 8,073,000	$ 4,881,000
Non-capital losses carried forward - US	1,628,000	1,609,000
Research and development tax credits	1,294,000	1,253,000
Share issuance and financing costs	628,000	473,000
Operating lease liabilities	26,000	43,000
Other temporary differences	15,000	16,000
Subtotal	11,664,000	8,275,000
Less: valuation allowance	(11,620,000)	(8,173,000)
Total net deferred tax assets	44,000	102,000
Property and equipment	(18,000)	(17,000)
Operating lease right-of-use assets	(26,000)	(42,000)
Deferred share issuance costs	0	(43,000)
Total deferred tax liabilities	44,000	102,000
Net deferred taxes	$ 0	$ 0

Income Tax (Details 2)

Income Tax (Details 2) - Sep. 30, 2021	CAD ($)	USD ($)
Canada
Non-capital income tax losses	$ 38,388,000
Canada | 2028
Non-capital income tax losses	233,000
Canada | 2041
Non-capital income tax losses	14,046,000
Canada | 2025
Non-capital income tax losses	21,000
Canada | 2026
Non-capital income tax losses	56,000
Canada | 2027
Non-capital income tax losses	114,000
Canada | 2039
Non-capital income tax losses	1,732,000
Canada | 2029
Non-capital income tax losses	688,000
Canada | 2030
Non-capital income tax losses	860,000
Canada | 2031
Non-capital income tax losses	685,000
Canada | 2032
Non-capital income tax losses	673,000
Canada | 2033
Non-capital income tax losses	266,000
Canada | 2034
Non-capital income tax losses	1,708,000
Canada | 2035
Non-capital income tax losses	2,207,000
Canada | 2036
Non-capital income tax losses	2,216,000
Canada | 2037
Non-capital income tax losses	2,123,000
Canada | 2038
Non-capital income tax losses	3,714,000
Canada | 2040
Non-capital income tax losses	$ 7,046,000
United States
Non-capital income tax losses		$ 288,000
United States | 2039
Non-capital income tax losses		70,000
United States | 2040
Non-capital income tax losses		150,000
United States | 2041
Non-capital income tax losses		$ 68,000

Income Tax (Details Narrative)

Income Tax (Details Narrative)	12 Months Ended
	Sep. 30, 2021USD ($)
Income Tax
U.S. non-capital losses carried forward	$ 7,655,000
Credits totaling	600,000
Tax losses totaling future income	$ 25,600,000

Financial Instruments (Details

Financial Instruments (Details Narrative) $ / shares in Units, $ in Millions	12 Months Ended
	Sep. 30, 2021USD ($)$ / shares	Sep. 30, 2021CAD ($)	Sep. 30, 2020USD ($)
Assets	$ 14,584,655		$ 10,762,375
Other comprehensive loss	$ 773,000
Ontario Subsidary [Member]
Assets		$ 9.8
Currency exchange rate description	Based on the exposure at September 30, 2021, a 10% annual change in the Canadian/U.S. exchange rate would impact the Company’s loss and other comprehensive loss by approximately $773,000
USD to CAD [Member]
Currency exchange rate | $ / shares	$ 1.2711

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2020
Related party transactions
Rent expense	$ 81,000	$ 76,000
Royalty payable			$ 23,457

Subsequent events (Details Narr

Subsequent events (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
	Nov. 22, 2021	Sep. 30, 2021	Sep. 30, 2020
Reimbursement Grant Income and Receivable
Gross cash proceeds	$ 15,000,000
Common shares sold	223,396
Gross proceeds	$ 1,290,000	$ 12,662,357	$ 4,360,500