British
Columbia, Canada
|
|
N/A
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
100
Spy Court
|
|
|
Markham,
Ontario, Canada
|
|
L3R
5H6
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Title of each class
|
|
Trading Symbol
|
|
Name of exchange on which registered
|
Common
Shares, without par value
|
|
EDSA
|
|
The
Nasdaq Stock Market LLC
|
Large
accelerated filer
|
☐
|
Accelerated
filer
|
☐
|
Non-accelerated
filer
|
☒
|
Smaller
reporting company
|
☒
|
|
Emerging
growth company
|
☒
|
3
|
|
|
|
3
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
|
6
|
|
|
|
7
|
|
|
|
18
|
|
|
|
21
|
|
|
|
21
|
|
|
|
22
|
|
|
|
22
|
|
|
|
22
|
|
|
|
22
|
|
|
|
22
|
|
|
|
22
|
|
|
|
22
|
|
|
|
23
|
|
December
31,
2020
|
September
30,
2020
|
|
|
|
Assets:
|
|
|
|
|
|
Current assets:
|
|
|
Cash
and cash equivalents
|
$6,305,293
|
$7,213,695
|
Accounts
and other receivable
|
168,030
|
87,446
|
Prepaid
expenses and other current assets
|
1,194,002
|
802,877
|
|
|
|
Total
current assets
|
7,667,325
|
8,104,018
|
|
|
|
Non-current assets:
|
|
|
Property
and equipment, net
|
14,788
|
14,815
|
Intangible
asset, net
|
2,458,243
|
2,483,536
|
Operating
lease right-of-use assets
|
150,413
|
160,006
|
|
|
|
Total
assets
|
$10,290,769
|
$10,762,375
|
|
|
|
|
|
|
Liabilities, shareholders' equity and temporary
equity:
|
|
|
|
|
|
Current liabilities:
|
|
|
Accounts
payable and accrued liabilities
|
$831,450
|
$1,460,127
|
Short-term
operating lease liabilities
|
74,877
|
69,730
|
|
|
|
Total
current liabilities
|
906,327
|
1,529,857
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
Long-term
payables
|
47,082
|
29,928
|
Long-term
operating lease liabilities
|
79,923
|
94,460
|
|
|
|
Total
liabilities
|
1,033,332
|
1,654,245
|
|
|
|
Commitments (Note 6)
|
|
|
|
|
|
Temporary equity:
|
|
|
Convertible
preferred shares
|
1,372,213
|
2,476,955
|
|
|
|
Shareholders' equity:
|
|
|
Capital
shares
|
|
|
Authorized
unlimited common and preferred shares without par
value
|
|
|
Issued
and outstanding:
|
|
|
10,523,087 common
shares (September 30, 2020 - 9,615,119)
|
21,696,459
|
18,500,853
|
Additional
paid-in capital
|
2,156,719
|
1,550,480
|
Accumulated
other comprehensive loss
|
(183,777)
|
(287,204)
|
Accumulated
deficit
|
(15,784,177)
|
(13,132,954)
|
|
|
|
Total
shareholders' equity
|
7,885,224
|
6,631,175
|
|
|
|
Total
liabilities, shareholders' equity and temporary equity
|
$10,290,769
|
$10,762,375
|
|
Three Months
Ended
|
|
|
December
31,
2020
|
December
31,
2019
|
|
|
|
Revenues:
|
|
|
Product
sales
|
$-
|
$107,800
|
|
|
|
Expenses:
|
|
|
Cost
of sales
|
-
|
3,778
|
Research
and development
|
1,379,654
|
527,998
|
General
and administrative
|
1,234,148
|
681,706
|
|
|
|
|
2,613,802
|
1,213,482
|
|
|
|
Loss from Operations
|
(2,613,802)
|
(1,105,682)
|
|
|
|
Other Income (Loss):
|
|
|
Interest
income
|
922
|
14,192
|
Foreign
exchange loss
|
(24,732)
|
(2,043)
|
|
|
|
|
(23,810)
|
12,149
|
|
|
|
Loss before income taxes
|
(2,637,612)
|
(1,093,533)
|
|
|
|
Income
tax expense
|
-
|
800
|
|
|
|
Net Loss
|
(2,637,612)
|
(1,094,333)
|
|
|
|
Exchange
differences on translation
|
103,427
|
18,114
|
|
|
|
Net Comprehensive Loss
|
$(2,534,185)
|
$(1,076,219)
|
|
|
|
Weighted
average number of common shares
|
10,277,750
|
7,504,468
|
|
|
|
Loss
per common share - basic and diluted
|
$(0.26)
|
$(0.15)
|
|
Three Months
Ended
|
|
|
December
31,
2020
|
December
31,
2019
|
|
|
|
Cash Flows From Operating Activities:
|
|
|
Net
loss
|
$(2,637,612)
|
$(1,094,333)
|
Adjustments
for:
|
|
|
Depreciation
and amortization
|
28,843
|
2,403
|
Share-based
compensation
|
722,909
|
8,775
|
Change
in working capital items:
|
|
|
Accounts
and other receivable
|
(75,127)
|
108,882
|
Prepaid
expenses and other current assets
|
(377,308)
|
9,263
|
Accounts
payable and accrued liabilities
|
(672,234)
|
175,298
|
|
|
|
Net
cash used in operating activities
|
(3,010,529)
|
(789,712)
|
|
|
|
Cash Flows From Investing Activities:
|
|
|
Proceeds
on sales of property and equipment
|
-
|
22,497
|
Purchase
of property and equipment
|
(1,135)
|
-
|
Purchase
of short-term investments
|
-
|
(499,790)
|
|
|
|
Net
cash used in investing activities
|
(1,135)
|
(477,293)
|
|
|
|
Cash Flows From Financing Activities:
|
|
|
Proceeds
from issuance of common shares
|
1,026,528
|
-
|
Proceeds
from issuance of common shares subscribed
|
-
|
45,000
|
Proceeds
from exercise of warrants
|
995,038
|
-
|
Payments
for issuance costs of common shares
|
(41,940)
|
-
|
Proceeds
from borrowings
|
15,346
|
-
|
|
|
|
Net
cash provided by financing activities
|
1,994,972
|
45,000
|
|
|
|
Effect
of exchange rate changes on cash and cash equivalents
|
108,290
|
18,472
|
|
|
|
Net
change in cash and cash equivalents
|
(908,402)
|
(1,203,533)
|
Cash
and cash equivalents, beginning of period
|
7,213,695
|
5,030,583
|
|
|
|
Cash and cash equivalents, end of period
|
$6,305,293
|
$3,827,050
|
|
|
|
Supplemental Disclosure of Non-cash Financing
Activities:
|
|
|
Preferred
shares converted from temporary equity to common
shares
|
$1,118,353
|
-
|
|
Shares
#
|
Common
Shares
|
Common
Shares Subscribed
|
Additional
Paid-in Capital
|
Accumulated
Other Comprehensive Loss
|
Accumulated
Deficit
|
Total
Shareholders' Equity
|
Balance -
September 30, 2020
|
9,615,119
|
$18,500,853
|
$-
|
$1,550,480
|
$(287,204)
|
$(13,132,954)
|
6,631,175
|
|
|
|
|
|
|
|
|
Issuance of common shares in equity
offering
|
169,753
|
1,026,528
|
-
|
-
|
-
|
-
|
1,026,528
|
Issuance costs
|
-
|
(60,983)
|
-
|
-
|
-
|
-
|
(60,983)
|
Issuance of common shares upon
exercise of warrants
|
243,369
|
1,111,708
|
-
|
(116,670)
|
-
|
-
|
995,038
|
Issuance of common
shares upon conversion of preferred shares
|
494,846
|
1,118,353
|
|
|
|
|
1,118,353
|
Preferred return on convertible
preferred shares
|
-
|
-
|
-
|
-
|
-
|
(13,611)
|
(13,611)
|
Share-based
compensation
|
-
|
-
|
-
|
722,909
|
-
|
-
|
722,909
|
Net loss and comprehensive
loss
|
-
|
-
|
-
|
-
|
103,427
|
(2,637,612)
|
(2,534,185)
|
|
|
|
|
|
|
|
|
Balance -
December 31, 2020
|
10,523,087
|
$21,696,459
|
$-
|
$2,156,719
|
$(183,777)
|
$(15,784,177)
|
$7,885,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance -
September 30, 2019
|
7,504,468
|
$12,005,051
|
$-
|
$327,768
|
$(342,074)
|
$(6,734,615)
|
$5,256,130
|
|
|
|
|
|
|
|
|
Common shares
subscribed
|
-
|
-
|
45,000
|
-
|
-
|
-
|
45,000
|
Share-based
compensation
|
-
|
-
|
-
|
8,775
|
-
|
-
|
8,775
|
Net loss and comprehensive
loss
|
-
|
-
|
-
|
-
|
18,114
|
(1,094,333)
|
(1,076,219)
|
|
|
|
|
|
|
|
|
Balance -
December 31, 2019
|
7,504,468
|
$12,005,051
|
$45,000
|
$336,543
|
$(323,960)
|
$(7,828,948)
|
$4,233,686
|
|
December
31,
2020
|
September
30,
2020
|
|
|
|
Computer
equipment
|
$36,376
|
$34,651
|
Furniture
and equipment
|
5,972
|
5,694
|
|
|
|
|
42,348
|
40,345
|
Less:
accumulated depreciation
|
(27,560)
|
(25,530)
|
|
|
|
Total
property and equipment, net
|
$14,788
|
$14,815
|
|
December
31,
2020
|
September
30,
2020
|
|
|
|
The
Constructs
|
$2,529,483
|
$2,529,483
|
|
|
|
Less:
accumulated amortization
|
(71,240)
|
(45,947)
|
|
|
|
Total
intangible assets, net
|
$2,458,243
|
$2,483,536
|
Year Ending
|
|
September
30, 2021
|
$75,879
|
September
30, 2022
|
101,172
|
September
30, 2023
|
101,172
|
September
30, 2024
|
101,172
|
September
30, 2025
|
101,172
|
Thereafter
|
1,977,676
|
|
|
|
$2,458,243
|
|
Balance
Sheet Caption
|
December
31,
2020
|
Assets:
|
|
|
Operating
lease assets
|
Operating
lease right-of-use assets
|
$150,413
|
|
|
|
Liabilities:
|
|
|
Current:
|
|
|
Operating
lease liabilities
|
Short-term
operating lease liabilities
|
$74,877
|
Long-term:
|
|
|
Operating
lease liabilities
|
Long-term
operating lease liabilities
|
79,923
|
|
|
|
Total
lease liabilities
|
|
$154,800
|
|
Statements
of Operations Caption
|
Quarter
Ended
December
31,
2020
|
Operating
lease cost
|
General
and administrative
|
$19,688
|
|
December
31,
2020
|
Remaining
lease term (months):
|
24
|
Estimated
incremental borrowing rate:
|
6.5%
|
Year Ending
|
|
September
30, 2021
|
$62,081
|
September
30, 2022
|
82,732
|
September
30, 2023
|
20,683
|
|
|
Total
lease payment
|
165,464
|
Less
imputed interest
|
10,696
|
|
|
Present
value of lease liabilities
|
154,768
|
Less
current installments
|
74,877
|
|
|
Long-term
lease liabilities excluding current installments
|
$79,923
|
|
Statements
of Cash Flows Caption
|
Quarter
Ended
December
31,
2020
|
Cash
paid for amounts included in the measurement of lease
liabilities
|
Accounts
payable and accrued liabilities
|
$19,689
|
Year Ending
|
|
September
30, 2021
|
$4,128,000
|
September
30, 2022
|
2,574,000
|
September
30, 2023
|
28,000
|
September
30, 2024
|
25,000
|
|
|
|
$6,755,000
|
|
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
|
-
|
13,611
|
Preferred
Shares converted
|
(110)
|
(1,118,353)
|
|
|
|
Balance
–December 31, 2020
|
140
|
$1,372,213
|
|
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
|
|
|
|
Exercised
|
(243,369)
|
$4.09
|
|
|
|
Balance
– December 31, 2020
|
749,352
|
$5.19
|
Number of Warrant
(#)
|
Exercise
Prices
|
Expiry
Dates
|
28,124
|
$15.90
|
May
2023
|
701,966
|
$4.80
|
July
2023
|
7,484
|
$4.81
|
June
2024
|
11,778
|
$3.20
|
January
2025
|
749,352
|
|
|
|
Number of Options
(#)
|
Weighted Average
Exercise Price
|
Balance
– September 30, 2019
|
319,645
|
$3.39
|
|
|
|
Granted
|
366,365
|
3.35
|
Exercised
|
(4,450)
|
2.60
|
Forfeited
|
(5,790)
|
2.73
|
Expired
|
(333)
|
145.20
|
|
|
|
Balance
– September 30, 2020
|
675,437
|
$3.30
|
|
|
|
Granted
|
430,000
|
7.44
|
Expired
|
(238)
|
-
|
|
|
|
Balance
– December 31, 2020
|
1,105,199
|
$4.77
|
Number of Options
(#)
|
Exercisable
at
December 31, 2020
(#)
|
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
|
311,883
|
304,323
|
C$2.16
|
Aug 2027-Dec
2028
|
345,365
|
178,239
|
$3.16
|
Feb
2030
|
14,000
|
776
|
$8.07
|
Sep
2030
|
430,000
|
35,847
|
$7.44
|
Oct
2030
|
1,105,199
|
523,136
|
|
|
|
Three Months
Ended
|
|
December
31,
2020
|
|
|
Risk free interest
rate
|
0.31%
|
Expected
life
|
5
years
|
Expected share
price volatility
|
97.28%
|
Expected dividend
yield
|
0.00%
|
|
Number
of Common Shares (#)
|
Common
Shares
|
Balance
– September 30, 2019
|
7,504,468
|
$12,005,051
|
|
|
|
Common
shares issued
|
1,354,691
|
$3,070,358
|
Common
shares issued upon exercise of warrants
|
751,510
|
3,754,265
|
Common
shares issued upon exercise of share options
|
4,450
|
20,935
|
Share
issuance costs
|
-
|
(349,756)
|
|
|
|
Balance
– September 30, 2020
|
9,615,119
|
$18,500,853
|
|
|
|
Common
shares issued
|
169,753
|
$1,026,528
|
Common
shares issued upon exercise of warrants
|
243,369
|
1,111,708
|
Common
shared issued upon conversion of preferred shares
|
494,846
|
1,118,353
|
Share
issuance costs
|
-
|
(60,983)
|
|
|
|
Balance
– December 31, 2020
|
10,523,087
|
$21,696,459
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1+
|
|
Strategic
Innovation Fund Agreement among Edesa Biotech Research, Inc., Edesa
Biotech, Inc., and her Majesty the Queen in right of Canada as
represented by the Minister of Industry, dated February 2, 2021
(included as Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on February 2, 2021, and incorporated herein by
reference).
|
|
|
|
|
Certification
of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
Certification
of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
|
|
|
|
Certification
of the Principal Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished
herewith).
|
|
|
|
|
|
Certification
of the Principal Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished
herewith).
|
|
|
|
|
101.INS
|
|
XBRL
Instance Document
|
|
|
|
101.SCH
|
|
XBRL
Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL
Taxonomy Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL
Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL
Taxonomy Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL
Taxonomy Presentation Linkbase Document
|
Date:
February 16, 2021
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EDESA BIOTECH, INC.
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/s/
Kathi Niffenegger
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Kathi
Niffenegger
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Chief
Financial Officer
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(Principal
Financial Officer and Duly Authorized Officer)
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Date:
February 16, 2021
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By:
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/s/
Pardeep Nijhawan
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Pardeep
Nijhawan
Director,
Chief Executive Officer and Corporate Secretary
(Principal
Executive Officer)
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Date:
February 16, 2021
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By:
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/s/
Kathi Niffenegger
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Kathi
Niffenegger
Chief
Financial Officer
(Principal
Financial Officer)
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Date: February 16,
2021
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By: /s/
Pardeep Nijhawan
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Pardeep
Nijhawan
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Director, Chief
Executive Officer and Corporate Secretary
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(Principal
Executive Officer)
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Date: February 16,
2021
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By: /s/
Kathi Niffenegger
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Kathi
Niffenegger
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Chief Financial
Officer
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(Principal
Financial Officer)
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Document and Entity Information - shares |
3 Months Ended | |
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Dec. 31, 2020 |
Feb. 12, 2021 |
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Document And Entity Information | ||
Entity Registrant Name | Edesa Biotech, Inc. | |
Entity Central Index Key | 0001540159 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | A1 | |
Entity File Number | 001-37619 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | true | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,048,980 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended |
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Dec. 31, 2020 |
Sep. 30, 2020 |
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Statement of Financial Position [Abstract] | ||
Capital shares, par value | $ 0 | $ 0 |
Capital shares, authorized | Unlimited | Unlimited |
Capital shares, issued | 10,523,087 | 9,615,119 |
Capital shares, outstanding | 10,523,087 | 9,615,119 |
Consolidated Statements of Operations and Comprehensive Loss - USD ($) |
3 Months Ended | |
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Dec. 31, 2020 |
Dec. 31, 2019 |
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Revenues: | ||
Product sales | $ 0 | $ 107,800 |
Expenses: | ||
Cost of sales | 0 | 3,778 |
Research and development | 1,379,654 | 527,998 |
General and administrative | 1,234,148 | 681,706 |
Total expenses | 2,613,802 | 1,213,482 |
Loss from operations | (2,613,802) | (1,105,682) |
Other income (loss): | ||
Interest income | 922 | 14,192 |
Foreign exchange loss | (24,732) | (2,043) |
Total other income (loss) | (23,810) | 12,149 |
Loss before income taxes | (2,637,612) | (1,093,533) |
Income tax expense | 0 | 800 |
Net loss | (2,637,612) | (1,094,333) |
Exchange differences on translation | 103,427 | 18,114 |
Net comprehensive loss | $ (2,534,185) | $ (1,076,219) |
Weighted average number of common shares | 10,277,750 | 7,504,468 |
Loss per share - basic and diluted | $ (0.26) | $ (0.15) |
Nature of Operations |
3 Months Ended |
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Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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, Canada.
The Company’s common shares trade on The Nasdaq Capital Market in the United States under the symbol “EDSA”.
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.
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Basis of Presentation |
3 Months Ended |
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Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. These condensed interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2020, which were filed with the Securities and Exchange Commission (SEC) on December 7, 2020.
The accompanying condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Edesa Biotech Research, Inc., an Ontario corporation, and Edesa Biotech USA, Inc., a California corporation in the U.S. All intercompany balances and transactions have been eliminated in consolidation. All adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included in the interim periods. Operating results for the three months ended December 31, 2020 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2021.
Use of estimates
The preparation of the unaudited condensed interim 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 unaudited condensed interim consolidated financial statements and the reported amounts of revenue and expenses during the period. 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 condensed interim 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.
Future accounting pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which includes provisions that require the measurement of an estimate of all current expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial assets measured at amortized cost basis are to be presented at the net amount expected to be collected and credit losses relating to available-for-sale debt securities are to be recorded through an allowance for credit losses. The guidance is effective for public entities for fiscal years beginning after December 15, 2019, including interim periods within those years, with early adoption permitted for fiscal years beginning after December 15, 2018, however the effective date is delayed by one year for smaller reporting companies as defined by the SEC. These standards are effective for the Company during the fiscal year ending September 30, 2022. Management expects that ASU 2016-13, as updated, will not have a significant impact on the Company’s consolidated financial statements.
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Property and Equipment |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and equipment, net consisted of the following:
Depreciation expense amounted to $1,619 and $2,403 for the three months ended December 31, 2020 and 2019, respectively.
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Intangible Assets |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 quarterly.
The required upfront license payment of $2.5 million was paid by issuance of Series A-1 Convertible Preferred Shares. See Note 8 for convertible preferred shares. The value of the license includes acquisition legal costs. The license agreement requires certain development, approval and commercialization milestone payments contingent on certain future events. The Company also has a commitment to pay royalties based on any net sales of licensed products and a percentage of any sublicensing revenue. See Note 6 for license commitments and Note 7 for temporary equity.
Intangible assets, net consisted of the following:
Amortization expense amounted to $25,293 for the three months ended December 31, 2020. There was no amortization expense for three months ended December 31, 2019.
Total estimated future amortization of intangible assets for each fiscal year is as follows:
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 an option to renew for an additional 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 are as follows:
The components of lease cost were as follows:
Lease terms and discount rates were as follows:
The approximate future minimum lease payments under operating leases at December 31, 2020 were as follows:
Cash flow information was as follows:
The Company leased facilities through its California subsidiary under two operating leases that expired in September 2020. Total rent under these leases included in general and administrative expenses was $0 and $68,508 for the three month ended December 31, 2020 and 2019, respectively. There was no rent under these leases prior to the completion of the reverse acquisition on June 7, 2019.
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Commitments |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
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 December 31, 2020 are as follows:
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 asset. 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. Effective December 31, 2020, the parties mutually agreed to change the timing of the first milestone event to February 28, 2021. The Company also has a commitment to pay royalties based on any net sales of the products 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 three months ended December 31, 2020.
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. The purchase commitment is included in the table above in 2021 and 2022. No amounts have been paid for the drug substance during the three months ended December 31, 2020.
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 three months ended December 31, 2020 and 2019.
Related party patent royalty commitments
On August 14, 2002, through its California subsidiary, the Company entered into a patent royalty agreement with a director of the Company, whereby he would receive royalty payments in exchange for assignment of his patent rights to the Company. The royalty is 5% of gross receipts from products using this invention in excess of $500,000 annually. There were no royalty expenses during the three months ended December 31, 2020 and 2019.
Retirement savings plan 401(k) contributions
Executive officers and employees of the 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 $4,640 and $1,556 during the three months ended December 31, 2020 and 2019 respectively.
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Temporary Equity |
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Temporary equity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity | Series A-1 Convertible Preferred Shares
As described in Notes 4 and 6, 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. In exchange for the exclusive rights to develop and commercialize the Constructs, 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). The Series A-1 Shares have no par value, a stated value of $10,000 per share and rank, 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.
A holder of Series A-1 Shares is not entitled to receive dividends unless declared by the Company’s Board of Directors. Subject to certain exceptions and adjustments for share splits, each Series A-1 Share is 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. A holder of Series A-1 Shares will not have the right to convert any portion of its Series A-1 Shares if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of common shares outstanding immediately after giving effect to such conversion (the “Beneficial Ownership Limitation”); provided, however, that upon notice to the Company, the holder may increase the Beneficial Ownership Limitation to a maximum of 9.99%. The Series A-1 Shares do not have the right to vote on any matters except as required by law and do not contain any variable pricing features, or any price-based anti-dilutive features.
In the event of any liquidation, dissolution or winding-up of the Company, a holder of Series A-1 Shares shall be entitled to receive, before any distribution or payment may be made with respect to the Company’s common shares, an amount in cash equal to the Preferred Amount per share, plus any unpaid accrued dividends on all such shares.
At any time, the Company may redeem some or all outstanding Series A-1 Shares for a cash payment per share equal to the Preferred Amount. A holder of Series A-1 Shares may require the Company to redeem the Series A-1 Shares for cash beginning 18 months after issuance if at any time after such date the 30-day volume weighted average price of the Company’s common shares is below the conversion price of $2.26. In the event of a required redemption, at the election of the Company, the redemption amount (which is equal to the Preferred Amount) may be paid in full or in up to twelve equal monthly payments with any unpaid redemption amounts accruing interest at a rate of 3% annually, compounded monthly. On the third anniversary of the date of issuance of the Series A-1 Shares, the Company has the right to convert any outstanding Series A-1 Shares into common shares.
Because the convertible preferred shares are redeemable outside the control of the Company, they are presented as temporary equity rather than permanent shareholders’ equity.
Issued and outstanding Series A-1 convertible preferred shares:
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Capital Shares |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Shares | Equity Offering
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 condensed interim 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 Agreement
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 may 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. 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. During the three months ended December 31, 2020, 169,753 shares were sold under the distribution agreement, resulting in $1,026,528 in gross proceeds and $35,928 in commissions.
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 (2019: 4 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:
The following table summarizes information about the warrants outstanding at December 31, 2020:
There were no warrants issued during the three months ended December 31, 2020 and 2019.
Share Options
The Company adopted an Equity Incentive Compensation Plan in 2019 (the 2019 Plan) administered by the Board of Directors, which amended and restated the 2017 Incentive Compensation Plan (the 2017 Plan). 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 is 1,148,697, including shares available for the exercise of outstanding options under the 2017 Plan. Option holders under Edesa Biotech Research, Inc.’s option plan received substitute options under the Company’s incentive plan upon completion of the reverse acquisition.
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:
On October 13, 2020, the independent directors of the Board of Directors granted a total of 430,000 options to directors, officers and employees of the Company pursuant to the 2019 Plan. The options have a term of 10 years with monthly vesting in equal proportions over 36 months beginning on the grant date and an exercise price equal to the Nasdaq closing price on the grant date.
The weighted average contractual life remaining on the outstanding options at December 31, 2020 is 104 months.
The following table summarizes information about the options under the Incentive Plan outstanding and exercisable at December 31, 2020:
The fair value of options granted during the three months ended December 31, 2020 was estimated using the Black-Scholes option valuation model using the following assumptions:
There were no options granted during the three months ended December 31,2019.
The Company recorded $722,909 and $8,755 of share-based compensation expenses for the three months ended December 31, 2020 and 2019, respectively.
As of December 31, 2020, the Company had approximately $1,944,000 of unrecognized share-based compensation expense, which is expected to be recognized over a period of 34 months.
Issued and outstanding common shares:
|
Financial Instruments |
3 Months Ended | ||||||
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Dec. 31, 2020 | |||||||
Fair Value Disclosures [Abstract] | |||||||
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:
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.
(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 HST refunds receivable is not considered significant since amounts are due from the Canada Revenue Agency.
(c) Foreign exchange risk
The Company’s subsidiary has 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 December 31, 2020, the Company’s Ontario subsidiary had assets of C$3 million and the U.S. dollar was equal to 1.2744 Canadian dollars. Based on the exposure at December 31, 2020, a 10% annual change in the Canadian/U.S. exchange rate would impact the Company’s loss and other comprehensive loss by approximately $235,000.
(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.
|
Segmented Information |
3 Months Ended |
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Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
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 financial statements for loss for the period, depreciation and total assets also represent segmented amounts.
|
Loss Per Share |
3 Months Ended |
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Dec. 31, 2020 | |
Earnings Per Share, Basic [Abstract] | |
Loss Per Share | The Company had securities outstanding which could potentially dilute basic EPS in the future but were excluded from the computation of diluted loss per share in the periods presented, as their effect would have been anti-dilutive.
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Related Party Transactions |
3 Months Ended | ||||
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Dec. 31, 2020 | |||||
Related Party Transactions [Abstract] | |||||
Related Party Transactions | During the periods presented, the Company incurred the following related party transactions:
|
Subsequent Events |
3 Months Ended |
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Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent to December 31, 2020 and through February 12, 2021, the Company received $3.13 million as follows: 416,710 common shares were issued under the equity distribution agreement with RBCCM with gross proceeds of approximately $2.72 million and commissions of approximately $0.10 million; 98,437 common shares were issued upon exercise of Class A warrants with proceeds of approximately $0.47 million; and 10,746 common shares were issued upon exercise of share options with proceeds of approximately $0.03 million.
On February 2, 2021, the Company, through its wholly owned Ontario subsidiary, entered into a multi-year contribution agreement with the Canadian government’s Strategic Innovation Fund. Under this agreement, the Government of Canada committed up to C$14.05 million ($11 million) in nonrepayable funding toward 75% of our eligible reimbursable expenses for (i) the Phase 2 portion of the ongoing Phase 2/3 study of the investigation therapy EB05 in hospitalized COVID-19 patients, and (ii) certain pre-clinical research intended to potentially broaden the application of our experimental therapy.
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Property and Equipment (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment |
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Intagible Assets (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets |
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Estimated future amortization of intagible assets |
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease assets and liabilities |
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Lease cost components |
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Lease terms and discount rates |
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Future minimum lease payments |
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Cash paid-lease liabilities |
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Commitments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Future contractual payments |
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Temporary Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Temporary equity |
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Capital Shares (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant activity |
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Warrants outstanding |
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Stock option activity |
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Stock options outstanding |
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Fair value of options granted assumptions |
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Issued and outstanding common and preferred shares |
|
Property and Equipment (Details) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Property and equipment, gross | $ 42,348 | $ 40,345 |
Less: accumulated depreciation | (27,560) | (25,530) |
Total property and equipment, net | 14,788 | 14,815 |
Computer Equipment | ||
Property and equipment, gross | 36,376 | 34,651 |
Furniture and Equipment | ||
Property and equipment, gross | $ 5,972 | $ 5,694 |
Property and Equipment (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,619 | $ 2,403 |
Intangible Assets (Details) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
The Constructs | $ 2,529,483 | $ 2,529,483 |
Less: accumulated amortization | (71,240) | (45,947) |
Intangible assets, net | $ 2,458,243 | $ 2,483,536 |
Intagible Assets (Details 1) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
September 30, 2021 | $ 75,879 | |
September 30, 2022 | 101,172 | |
September 30, 2023 | 101,172 | |
September 30, 2024 | 101,172 | |
September 30, 2025 | 101,172 | |
Thereafter | 1,977,676 | |
Intangible assets, net | $ 2,458,243 | $ 2,483,536 |
Leases (Details) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
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Assets: | ||
Operating lease right-of-use assets | $ 150,413 | $ 160,006 |
Current: | ||
Short-term operating lease liabilities | 74,877 | 69,730 |
Long-term: | ||
Long-term operating lease liabilities | 79,923 | $ 94,460 |
Total lease liabilities | $ 154,800 |
Leases (Details 1) |
3 Months Ended |
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Dec. 31, 2019
USD ($)
| |
General and Administrative Expense | |
Operating lease cost | $ 19,688 |
Leases (Details 2) |
Dec. 31, 2020 |
---|---|
Leases [Abstract] | |
Remaining lease term (months) | 2 years |
Estimated incremental borrowing rate | 6.50% |
Leases (Details 3) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Year Ending September 30, | ||
September 30, 2021 | $ 62,081 | |
September 30, 2022 | 82,732 | |
September 30, 2023 | 20,683 | |
Total | 165,464 | |
Less imputed interest | 10,696 | |
Present value of lease liabilities | 154,800 | |
Less current installments | 74,877 | $ 69,730 |
Long-term lease liabilities excluding current installments | $ 79,923 | $ 94,460 |
Leases (Details 4) |
3 Months Ended |
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Dec. 31, 2020
USD ($)
| |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 19,689 |
Leases (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | ||
Rent expense | $ 0 | $ 68,508 |
Commitments (Details) |
Dec. 31, 2020
USD ($)
|
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Year Ending September 30, | |
September 30, 2021 | $ 4,128,000 |
September 30, 2022 | 2,574,000 |
September 30, 2023 | 28,000 |
September 30, 2024 | 25,000 |
Total | $ 6,755,000 |
Commitments (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Employer contributions to 401K plan | $ 4,640 | $ 1,556 |
Temporary Equity (Details) - Series A-1 Convertible Preferred Shares - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2020 |
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 | $ 13,611 | $ 34,109 |
Preferred shares converted, shares | (110) | |
Preferred shares converted, amount | $ (1,118,353) | |
Ending balance, shares | 140 | 250 |
Ending balance, amount | $ 1,372,213 | $ 2,476,955 |
Capital Shares (Details) - $ / shares |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
|
Stockholders' Equity Note [Abstract] | ||
Number of warrants, beginning balance | 992,721 | 48,914 |
Issued | 1,705,758 | |
Exercised | (243,369) | (761,951) |
Number of warrants, ending balance | 749,352 | 992,721 |
Weighted average exercise price, beginning balance | $ 4.92 | $ 11.19 |
Issued | .00 | 4.47 |
Exercised | 4.09 | 4.31 |
Weighted average exercise price, ending balance | $ 5.19 | $ 4.92 |
Capital Shares (Details 1) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Number of warrants | 749,352 | 992,721 | 48,914 |
Exercise price | $ 5.19 | $ 4.92 | $ 11.19 |
Warrant 1 | |||
Number of warrants | 28,124 | ||
Exercise price | $ 15.90 | ||
Expiry date | May 2023 | ||
Warrant 2 | |||
Number of warrants | 701,966 | ||
Exercise price | $ 4.80 | ||
Expiry date | July 2023 | ||
Warrant 3 | |||
Number of warrants | 7,484 | ||
Exercise price | $ 4.81 | ||
Expiry date | June 2024 | ||
Warrant 4 | |||
Number of warrants | 11,778 | ||
Exercise price | $ 3.20 | ||
Expiry date | January 2025 |
Capital Shares (Details 2) - $ / shares |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
|
Stockholders' Equity Note [Abstract] | ||
Number of options, beginning balance | 675,437 | 319,645 |
Number of options granted | 430,000 | 366,365 |
Number of options, exercised | (4,450) | |
Number of options, forfeited | (5,790) | |
Number of options expired | (238) | (333) |
Number of options, ending balance | 1,105,199 | 675,437 |
Weighted average exercise price, beginning balance | $ 3.30 | $ 3.39 |
Weighted average exercise price granted | 7.44 | 3.35 |
Weighted average exercise price exercised | .00 | 2.60 |
Weighted average exercise price forfeited | .00 | 2.73 |
Weighted average exercise price expired | .00 | 145.20 |
Weighted average exercise price, ending balance | $ 4.77 | $ 3.30 |
Capital Shares (Details 4) |
3 Months Ended |
---|---|
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Risk free interest rate | 0.31% |
Expected life (years) | 5 years |
Expected share price volatility | 97.28% |
Expected dividend yield | 0.00% |
Capital Shares (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Stockholders' Equity Note [Abstract] | ||
Shares remaining under 2019 Plan | 1,148,697 | |
Weighted average contractual life remaining on outstanding options | 104 months | |
Share-based compensation | $ 722,909 | $ 8,775 |
Unrecognized share-based compensation | $ 1,944,000 | |
Unrecognized share-based compensation recognition period | 34 months |
Related Party Transactions (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Related Party Transactions [Abstract] | ||
Rent expense | $ 19,688 | $ 19,440 |
Royalty payable | $ 23,457 |
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