CAPITAL STOCK

12 Months Ended

Jul. 31, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 10: CAPITAL STOCK

Equity Financing

During Fiscal 2014, the Company filed a Form S-3 “Shelf” Registration Statement effective January 10, 2014 (the “2014 Shelf”) providing for the public offer and sale of certain securities of the Company from time to time, at its discretion, up to an aggregate offering of $100 million.

On March 10, 2016, the Company completed a registered offering of 12,364,704 units at a price of $0.85 per unit for gross proceeds of $10,510,000 (the “March 2016 Offering”) pursuant to a prospectus supplement to the 2014 Shelf. Each unit is comprised of one share of the Company and half of one share purchase warrant, with each whole warrant being exercisable at a price of $1.20 to purchase one share of the Company totaling 6,182,351 for a three year period from the date of issuance. The Company issued share purchase warrants to agents as part of share issuance costs to purchase 411,997 shares of the Company exercisable at a price of $1.20 per share also for a three year period.

The shares were valued at the Company’s closing price of $0.81 per share at March 10, 2016. The share purchase warrants were valued using the Black-Scholes option pricing model with the following assumptions:

Expected Risk Free Interest Rate	1.11	%
Expected Annual Volatility	74.34	%
Expected Contractual Life in Years	3.00
Expected Annual Dividend Yield	0.00	%

The net proceeds from the March 2016 Offering were allocated to the fair value of the shares and share purchase warrants as presented below:

Fair Value of Shares	$	10,015,410
Fair Value of Share Purchase Warrants		1,938,995
Total Fair Value Before Allocation to Net Proceeds	$	11,954,405
Gross Proceeds	$	10,510,000
Share Issuance Costs - Cash		(525,483)
Net Cash Proceeds Received	$	9,984,517
Relative Fair Value Allocation to:
Shares	$	8,365,037
Share Purchase Warrants		1,619,480
	$	9,984,517

On June 25, 2015, the Company completed a public offering of 5,000,000 units at a price of $2.00 per unit for gross proceeds of $10,000,000 (the “June 2015 Offering”) pursuant to a prospectus supplement to the 2014 Shelf. Each unit was comprised of one share of common stock of the Company and one-half of one share purchase warrant, each whole warrant exercisable at a price of $2.35 for a three year period to purchase one share of the Company totaling 2,500,000 shares. The Company issued share purchase warrants to agents as part of share issuance costs to purchase 350,000 shares of the Company exercisable at a price of $2.35 per share for a three year period.

The shares were valued at the Company’s closing price of $1.60 at June 25, 2015. The share purchase warrants were valued using the Black-Scholes option pricing model with the following assumptions:

Expected Risk Free Interest Rate	1.06	%
Expected Annual Volatility	71.23	%
Expected Contractual Life in Years	3.00
Expected Annual Dividend Yield	0	%

The net proceeds from the June 2015 Offering were allocated to the fair value of the shares and share purchase warrants as presented below:

Fair Value of Shares	$	8,000,000
Fair Value of Share Purchase Warrants		1,475,235
Total Fair Value Before Allocation to Net Proceeds	$	9,475,235
Gross Proceeds	$	10,000,000
Share Issuance Costs - Cash		(891,635)
Net Cash Proceeds Received	$	9,108,365
Relative Fair Value Allocation to:
Shares	$	7,690,249
Share Purchase Warrants		1,418,116
	$	9,108,365

At July 31, 2016, a total of $35.1 million of the 2014 Shelf was utilized through the following registered offerings and sales of units, with a remaining available balance of $64.9 million under the 2014 Shelf:

⋅ on June 25, 2015: $10.0 million in gross proceeds through an offering of units consisting of the Company’s shares and share purchase warrants and $6.7 million representing the aggregate exercise price of those share purchase warrants and agents’ share purchase warrants should they be exercised in full; and

⋅ on March 10, 2016: $10.5 million in gross proceeds through an offering of units consisting of the Company’s shares and share purchase warrants and $7.9 million representing the aggregate exercise price of those share purchase warrants and agents’ share purchase warrants should they be exercised in full.

On October 23, 2013, the Company completed a public offering of 3,380,954 units at a price of $2.10 per unit for gross proceeds of $7,100,003 pursuant to a prospectus supplement to a Form S-3 “Shelf” Registration Statement effective September 2, 2011 (the “2011 Shelf”). Each unit was comprised of one share of the Company and 0.55 of one share purchase warrant, each whole warrant exercisable at a price of $2.60 for a three year period to purchase one share of the Company totaling 1,859,524 shares.

The shares were valued at the Company’s closing price of $1.89 at October 23, 2013. The share purchase warrants were valued using the Black-Scholes option pricing model with the following assumptions:

Expected Risk Free Interest Rate	0.60	%
Expected Annual Volatility	66.34	%
Expected Contractual Life in Years	3.00
Expected Annual Dividend Yield	0	%

The net proceeds from the equity financing were allocated to the fair values of the shares and share purchase warrants as presented below:

Fair Value of Shares	$	6,390,003
Fair Value of Share Purchase Warrants		627,775
Total Fair Value Before Allocation to Net Proceeds		7,017,778
Gross Proceeds		7,100,003
Share Issuance Costs		(567,880)
Net Proceeds Received		6,532,123
Relative Fair Value Allocation to:
Shares		5,947,792
Share Purchase Warrants		584,331
	$	6,532,123

During Fiscal 2015, the Company completed a public offer and sale of 280,045 shares at a price of $1.70 per share for gross proceeds of $474,788 under the 2011 Shelf through the “at-the-market” offerings pursuant to a Controlled Equity Offering^SM Sales Agreement effective December 31, 2013 between Cantor Fitzgerald & Co. and the Company. 

The 2011 Shelf expired on September 2, 2014. As a result, no further public offer and sale of the Company’s shares may be completed pursuant to an ATM Offering under the 2011 Shelf.

Share Transactions

A summary of the Company’s share transactions for Fiscal 2016, 2015 and 2014 are as follows:

	Common		Value per Share				Issuance
Period / Description	Shares Issued		Low		High		Value
Balance, July 31, 2013		86,032,285
Equity Financing		3,380,954		1.76		1.76		5,947,792
Credit Facility		386,834		1.71		1.77		676,058
Consulting Services		635,303		1.06		2.41		1,101,932
Options Exercised (1)		470,492		0.33		0.45		27,401
Share Bonus		30,386		1.81		1.81		55,000
Advance Royalty for Workman Creek		30,304		1.15		1.15		34,850
Balance, July 31, 2014		90,966,558
Equity Financing		5,280,045		1.70		2.00		7,659,139
Consulting Services		1,108,390		1.07		2.90		1,851,074
Options Exercised (2)		304,657		0.33		1.32		24,550
Share Bonuses		174,437		1.35		1.35		235,490
Balance, July 31, 2015		97,834,087
Equity Financing		12,364,704		0.85		0.85		9,984,517
Credit Facility		1,711,933		0.83		1.20		1,700,000
Asset Acquisition		1,333,560		0.92		0.92		1,226,875
Settlement of Current Liabilities		487,574		0.93		0.93		453,444
Consulting Services		1,429,650		0.72		1.38		1,372,381
Options Exercised		682,167		0.33		0.33		225,115
Shares Issued Under Stock Incentive Plan		826,782		0.73		1.08		726,244
Balance, July 31, 2016		116,670,457

(1) 631,250 options were exercised on a forfeiture basis resulting in 387,842 net shares issued.

(2) 535,000 options were exercised on a forfeiture basis resulting in 230,267 net shares issued.

Share Purchase Warrants

A summary of share purchase warrants outstanding and exercisable at July 31, 2016 are as follows:

Weighted Average Exercise Price		Number of Warrants Outstanding		Expiry Date	Weighted Average Remaining Contractual Life (Years)
$	1.20		6,594,348	March 10, 2019		2.61
	1.35		2,600,000	January 30, 2020		3.50
	1.95		50,000	June 3, 2018		1.84
	2.35		2,850,000	June 25, 2018		1.90
	2.60		1,859,524	October 23, 2016		0.23
$	1.65		13,953,872			2.31

On February 9, 2016, as part of the terms of the Second Amended and Restated Credit Agreement, the 2,600,000 bonus warrants originally issued under the Credit Agreement were re-priced to $1.35 from $2.50 and extended by one and a half years to January 30, 2020. Refer to Note 8.

Stock Options

At July 31, 2016, the Company had one stock option plan, the 2016 Stock Incentive Plan (the “2016 Plan”). The 2016 Plan provides for up to 18,892,856 shares of the Company that may be issued and consists of (i) 10,467,134 shares issuable pursuant to awards previously granted that were outstanding under the 2015 Stock Incentive Plan (the “2015 Plan”); (ii) 7,225,722 shares remaining available for issuance under the 2015 Plan; and (iii) 1,200,000 additional shares that may be issued pursuant to awards that may be granted under the 2016 Plan. The 2016 Plan supersedes and replaces the Company’s prior 2015 Plan, which superseded and replaced the Company’s prior 2014, 2013, 2009 and 2006 Stock Incentive Plans (collectively the “Stock Incentive Plan”), such that no further shares are issuable under those prior plans.

During Fiscal 2016, the Company granted stock options under the Stock Incentive Plan to the Company’s directors, officers, employees and consultants to purchase a total of 3,033,000 shares of the Company exercisable at a price range from $0.93 to $1.32 per share over a five-year term.

During Fiscal 2015, the Company granted stock options under the Stock Incentive Plan to the Company’s directors, officers, employees and consultants to purchase a total of 7,640,000 shares of the Company exercisable at a price range from $1.20 to $1.32 per share over a five-year term.

Majority of these stock options are subject to an 18-month vesting provision whereby at the end of each of the first three, six, 12 and 18 months after the grant date, 25% of the total stock option grant becomes exercisable.

The five-year contractual term for the above grants is significantly different from the 10-year contractual term generally applicable to the stock options previously granted by the Company. Since no relevant historical information was available to provide a reasonable basis in estimating the expected life, the Company adopted the simplified method, being the mid-point of the average vesting date and the end of the contractual term, to estimate the expected life for these stock options.

A summary of stock options granted by the Company during Fiscal 2016, including corresponding grant date fair values and assumptions using the Black-Scholes option pricing model, is as follows:

Date	Options Issued		Exercise Price		Term (Years)		Fair Value		Expected Life (Years)		Risk-Free Interest Rate			Dividend Yield			Expected Volatility
August 7, 2015		105,000	$	1.32		5	$	68,824		2.90		1.04	%		0.00	%		77.17	%
October 14, 2015		1,000,000		1.14		5		563,195		2.90		0.81	%		0.00	%		77.01	%
January 12, 2016		300,000		0.98		5		145,902		2.90		1.15	%		0.00	%		76.96	%
July 28, 2016		1,628,000		0.93		5		800,059		2.90		0.81	%		0.00	%		83.49	%
Total		3,033,000					$	1,577,980

A continuity schedule of outstanding stock options for the underlying common shares at July 31, 2016, and the changes during the periods, is as follows:

	Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balance, July 31, 2013		8,966,189	$	2.02		5.72
Exercised		(713,900)		0.41		2.75
Expired		(41,575)		4.85		-
Forfeited		(223,500)		3.46		5.48
Balance, July 31, 2014		7,987,214		2.10		4.97
Issued		7,640,000		1.32		4.10
Exercised		(609,390)		1.16		3.87
Expired		(15,599)		5.13		-
Forfeited		(126,250)		2.52		6.20
Cancelled		(4,294,000)		2.59		5.59
Balance, July 31, 2015		10,581,975		1.38		3.68
Issued		3,033,000		1.02		4.65
Exercised		(682,167)		0.33		0.01
Expired		(1,950)		5.90		-
Forfeited		(825,000)		1.48		0.02
Balance, July 31, 2016		12,105,858	$	1.34		3.36

In December 2014, the Company cancelled certain stock options previously granted to the Company’s directors, officers, employees and consultants to purchase a total of 4,294,000 shares of the Company exercisable at prices ranging from $2.25 to $5.65 per share with original contractual terms of 10 years.

At July 31, 2016, the aggregate intrinsic value under the provisions of ASC 718 of all outstanding stock options was estimated at $671,353 (vested: $622,513 and unvested: $48,840).

At July 31, 2016, unrecognized compensation cost related to non-vested stock options granted under the Company’s Stock Incentive Plans was $921,345 expected to be recognized over 0.78 years.

A summary of stock options outstanding and exercisable at July 31, 2016 is as follows:

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Outstanding at July 31, 2016		Weighted Average Exercise Price		Exercisable at July 31, 2015		Weighted Average Exercise Price
$0.45 to $0.96		2,897,634	$	0.73		1,269,634	$	0.47
$0.97 to $2.45		8,322,500		1.35		7,627,500		1.37
$2.46 to $5.70		885,724		3.31		885,724		3.31
		12,105,858	$	1.34		9,782,858	$	1.43

Stock-Based Compensation

A summary of stock-based compensation expense for Fiscal 2016, 2015 and 2014 is as follows:

	Year Ended July 31,
	2016		2015		2014
Stock-Based Compensation for Consultants
Common stock issued for consulting services	$	1,630,635	$	1,869,074	$	1,101,932
Stock options issued to consultants		78,014		588,207		74,992
		1,708,649		2,457,281		1,176,924
Stock-Based Compensation for Management
Common stock issued to management		262,130		105,998		55,000
Stock options issued to management		735,991		1,617,937		-
		998,121		1,723,935		55,000
Stock-Based Compensation for Employees
Common stock issued to employees		205,860		111,492		-
Stock options issued to employees		171,533		1,325,040		82,321
		377,393		1,436,532		82,321
Stock-based compensation charged to inventory		-		-		(4,795)
	$	3,084,163	$	5,617,748	$	1,309,450