SHARE CAPITAL [Text Block] | 5. SHARE CAPITAL Authorized share capital Unlimited number of common shares without par value. On July 14, 2023, the Directors of the Company approved the consolidation of the Company's issued and outstanding common shares on a 5:1 basis. All common shares, stock options, restricted share units and warrant references in these consolidated financial statements reflect the effect of the share consolidation. Issued share capital for the year ended September 30, 2024 On December 22, 2023, the Company issued 661,765 Units of the Company at a price per unit of $1.36 for aggregate gross proceeds of $900,000. Each Unit is comprised of one common share and one common share purchase warrant ("Warrant") of the Company. Each Warrant is exercisable to acquire one common share of the Company at an exercise price of $1.70 per share until December 22, 2028. On December 13, 2023, 30,000 RSUs were exercised and $232,500 was reclassified from reserves to share capital upon the exercise. During the year ended September 30, 2024, 60,250 pre funded warrants ("PFWs") were exercised for gross proceeds of $302. $376,261 was reclassified from pre-funded warrants to share capital upon the exercise. Each PFW was exercised into one common share and one warrant of the Company. Issued share capital for the year ended September 30, 2023 On December 2, 2022, the Company issued 133,200 PFWs of the Company at a price per PFW of $6.245 and 194,800 Units of the Company at a price per Unit of $6.25 for aggregate gross proceeds of $2,049,334. Each PFW is exercisable into one Unit at an exercise price of $0.005 per Unit on the date that is the earlier of (a) the date the holder thereof elects to exercise the PFWs and pays the exercise price, and (b) December 2, 2024. Each Unit is comprised of one common share and one warrant of the Company. Each Warrant is exercisable to acquire one common share of the Company at an exercise price of $6.75 per share until December 2, 2024. The PFWs are classified as a component of permanent shareholders' equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the Units with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed number of common shares upon exercise. On March 10, 2023, 30,000 RSUs were exercised and $232,500 was reclassified from reserves to share capital upon the exercise. During the year ended September 30, 2023, an aggregate of 28,800 warrants were exercised for gross proceeds of $253,440. Issued share capital for the year ended September 30, 2022 On April 11, 2022, the Company entered into a scientific advisory board agreement with Karl Deisseroth ("Deisseroth") pursuant to which the Company will pay Deisseroth a monthly fee of US$4,167 and issued an aggregate 5,000 common shares (the "Payment Shares") in the capital of the Company at a fair market value of $5.45 per share (total fair market value of $27,250). The Payment Shares will be issued in escrow and released to Deisseroth over a period of four years commencing on March 8, 2023 (see Note 7). On August 30, 2022, the Company issued 571,600 Units of the Company at a price per unit of $7.00 for aggregate gross proceeds of $4,001,200. Each Unit is comprised of one common share and one warrant of the Company. Each Warrant is exercisable to acquire one common share of the Company at an exercise price of $8.80 per share until August 30, 2024. The agent was paid a cash finder's fee $280,084 and expenses of $176,065 and received compensation warrants entitling them to purchase an aggregate of 26,808 Units of the Company at a per unit price of $7.00 for a period of twenty-four months following closing, with the Units having the same terms as the Units sold pursuant to the Offering. An advisor was additionally paid a cash finder's fee of $259,245 and received compensation warrants entitling them to purchase an aggregate of 18,232 Units of the Company at a per unit price of $7.00 for a period of twenty-four months following closing, with the Units having the same terms as the Units sold pursuant to the Offering. The Company incurred additional share issue costs of $84,585 in connection with the offering. In September 2022, 45,040 compensation warrants were exercised for gross proceeds of $315,277. Upon exercise, $531,000 was reclassified from reserves to share capital. During the year ended September 30, 2022, 529,960 warrants priced at $0.25, $8.80, and $47.30 per unit were exercised for gross proceeds of $1,653,170. Escrowed securities On January 28, 2021, the Company entered into an escrow agreement under National Policy 46-201 Escrow for Initial Public Offerings 96,016 - on the date that the Company's shares are listed on the CSE (February 8, 2021); and 144,024 - 6, 12, 18, 24, 30 and 36 months after the listing date. As at September 30, 2024, all common shares are released from escrow. Stock options The Company's stock option plan provides for stock options to be issued to directors, officers, employees and consultants of the Company, its subsidiaries and any personal holding company of such individuals so that they may participate in the growth and development of the Company. Subject to the specific provisions of the stock option plan, eligibility, vesting period, terms of the options and the number of options granted are to be determined by the Board of Directors at the time of grant. The stock option plan allows the Board of Directors to issue up to 10% of the Company's outstanding common shares as stock options. Options granted during the year ended September 30, 2024 On March 22, 2024, the Company granted 130,000 options to the directors and consultants of the Company. The options have an exercise price of $1.84 per share, expire on March 22, 2029 and vest as follows: 25% on the grant date, 25% on the first anniversary of the grant date, 25% on the second anniversary of the grant date, and 25% on the third anniversary of the grant date. The fair value of these stock options was measured using the Black Scholes option pricing model using the following inputs: i) exercise price: $1.84; ii) share price: $1.80; iii) term: 5 years; iv) volatility: 122.84%; v) discount rate: 3.48%; and dividends: nil. Options granted during the year ended September 30, 2023 On December 1, 2022, the Company granted 60,000 options to the Chief Medical Officer of the Company. The options have an exercise price of $8.25 per share, expire on December 1, 2027 and vest as follows: 25% on the first anniversary of the grant date, 25% on the second anniversary of the grant date, 25% on the third anniversary of the grant date, and 25% on the fourth anniversary of the grant date. The fair value of these stock options was measured using the Black Scholes option pricing model using the following inputs: i) exercise price: $8.25; ii) share price: $7.75; iii) term: 5 years; iv) volatility: 141.61%; v) discount rate: 3.05%; and dividends: nil. On December 1, 2022, the Company and a consultant mutually agreed to cancel 16,000 options that were previously granted on April 28, 2021. On February 16, 2023, the Company granted 47,000 options to the consultants and a director of the Company. The options have an exercise price of $5.25 per share, expire on February 16, 2028 and vest as follows: 25% on the first anniversary of the grant date, 25% on the second anniversary of the grant date, 25% on the third anniversary of the grant date, and 25% on the fourth anniversary of the grant date. The fair value of these stock options was measured using the Black Scholes option pricing model using the following inputs: i) exercise price: $5.25; ii) share price: $4.85; iii) term: 5 years; iv) volatility: 135.92%; v) discount rate: 3.45%; and dividends: nil. The following table summarizes the movements in the Company's outstanding stock options for the years ended September 30, 2024 and September 30, 2023: Number of options Weighted average exercise price Balance at September 30, 2022 183,161 $ 18.20 Granted 107,000 $ 6.93 Cancelled (1), (2) (78,000 ) $ 20.52 Balance at September 30, 2023 212,161 $ 11.65 Granted 130,000 $ 1.84 Expired (1,761 ) $ 38.20 Balance at September 30, 2024 340,400 $ 7.76 (1) 30,000 and 16,000 options were forfeited 90 days after the termination of the services of a former Chief Medical Officer and a director of the Company. As at September 30, 2024, the options have a weighted average remaining life of 3.13 years (September 30, 2023 - 3.28). The following table summarizes the stock options issued and outstanding: Options Outstanding and Exercisable Expiry Date Number of options Exercisable Exercise price Remaining life (Years) November 17, 2025 71,400 71,400 $6.25 1.13 April 28, 2026 (2) 16,000 12,000 $38.00 1.58 June 15, 2026 16,000 12,000 $38.00 1.71 December 1, 2027 60,000 15,000 $8.25 3.17 February 16, 2028 47,000 11,750 $5.25 3.38 March 22, 2029 130,000 32,500 $1.84 4.48 (2) On December 1, 2022, the Company and a consultant mutually agreed to cancel 16,000 options, and an additional 16,000 options were cancelled on the retirement of a consultant (Note 7). Restricted share unit plan The Company's restricted share unit ("RSU") plan provides RSUs to be issued to directors, officers, employees and consultants of the Company, its subsidiaries and any personal holding company of such individuals so that they may participate in the growth and development of the Company. Subject to the specific provisions of the RSU plan, eligibility, vesting period, terms of the RSUs and the number of RSUs granted are to be determined by the Board of Directors at the time of the grant. The RSU plan allows the Board of Directors to issue common shares of the company as equity settled RSUs, provided that, when combined, the maximum number of common shares reserved for issuance under all share-based compensation arrangements of the Company does not exceed 10% of the Company's outstanding common shares. On December 1, 2022, the Company issued 220,000 RSUs to the directors of the Company. These RSUs vest on an annual basis over a period of four years commencing on December 1, 2022 and expiring on December 1, 2027. The estimated fair value of these RSUs is $1,705,000 and will be recognized as an expense over the vesting period of the RSUs. On April 27, 2022, the Company issued 20,000 RSUs to a director of the Company and these RSU's vest as follows: 25% on the date of grant and 25% each on April 27, 2024, 2025 and 2026. The estimated fair value of these RSUs is $127,000 and will be recognized as an expense over the vesting period of the RSUs. On February 4, 2022 and February 11, 2022, the Company issued 5,000 RSUs and 7,000 RSUs, respectively. These RSUs vest on an annual basis over a period of four years. The estimated fair value of these RSUs is $181,250 and will be recognized as an expense over the vesting period of the RSUs. The following table summarizes the movements in the Company's outstanding RSUs for the years ended September 30, 2024 and September 30, 2023: Number of RSUs Weighted average exercise price Balance at September 30, 2022 108,000 $ 13.15 Granted 220,000 $ 7.75 Exercised (30,000 ) $ 7.75 Forfeited* (76,000 ) $ 6.25 Balance at September 30, 2023 222,000 $ 10.89 Exercised (30,000 ) $ 7.75 Balance at September 30, 2024 192,000 $ 11.38 * On November 23, 2022, 76,000 RSUs were forfeited on the termination of the services of former Chief Medical Officer of the Company. As at September 30, 2024, the RSUs have a weighted average remaining life of 3.06 years (September 30, 2023 - 4.07 years). The following table summarizes the RSUs issued and outstanding: RSUs Outstanding and Exercisable Expiry Date Number of RSUs Exercisable Exercise price Remaining life February 1, 2027 5,000 2,500 $15.25 2.34 February 1, 2027 7,000 3,500 $15.00 2.34 April 27, 2027 20,000 10,000 $38.20 2.57 December 1, 2027 160,000 50,000 $7.75 3.17 The weighted average share price of RSUs exercised during the years ended September 30, 2024 and September 30, 2023 are detailed below: Exercise date Exercise price Number of RSUs Weighted average March 10, 2023 $7.75 30,000 $3.60 December 13, 2023 $7.75 30,000 $1.97 Share-based compensation expense recognized in the consolidated statements of comprehensive income (loss) is comprised of the following: For the year ended: September 30, 2024 September 30, September 30, $ $ $ Stock options 386,975 50,350 643,911 Restricted share units - equity settled grants 452,796 1,101,781 231,145 Total equity settled share-based compensation expense 839,771 1,152,131 875,056 Restricted share units - cash settled grants - - - Total share-based compensation expense 839,771 1,152,131 875,056 Share-based compensation expense is included in the consolidated statements of comprehensive income (loss) as follows: For the year ended: September 30, 2024 September 30, September 30, $ $ $ Consulting fees 47,861 43,736 3,858 Directors' compensation 493,793 1,156,523 99,438 Research and development 298,117 (48,128 ) 771,760 Total share-based compensation expense 839,771 1,152,131 875,056 Warrants The following table summarizes the movements in the Company's outstanding warrants for years ended September 30, 2024 and September 30, 2023: Number of warrants Weighted average exercise price Balance at September 30, 2022 881,520 $ 23.89 Issued 194,800 6.75 (28,800 ) 8.80 Balance at September 30, 2023 1,047,520 $ 21.12 Issued 722,015 2.12 (852,720 ) 24.40 Balance at September 30, 2024 916,815 $ 3.10 On August 30, 2022, the Company granted 45,040 compensation warrants at an exercise price of $7.00 per compensation warrant expiring on August 30, 2024. Each compensation warrant comprises the one Unit under the same terms of the offering which closed on August 30, 2022. The fair value of these compensation warrants of $315,000 was measured using the Black Scholes option pricing model using the following inputs: i) exercise price: $7.00; ii) share price: $14.65; iii) term: 2 years; iv) volatility: 147.31%; v) discount rate:3.63%; and dividends: nil. As at September 30, 2024, the warrants have a weighted average remaining life of 3.10 (September 30, 2023 - 0.80) years. The following table summarizes the warrants issued and outstanding: Warrants Outstanding Expiry Date Number of Exercise price Remaining life December 2, 2024 194,800 $ 6.75 0.17 December 2, 2024 60,250 $ 6.75 0.17 December 22, 2028 661,765 $ 1.70 4.23 |