0001654954-21-001660 | 10-Q | XBRL Viewer

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Dec. 31, 2020	Feb. 12, 2021
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 - USD ($)	Dec. 31, 2020	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 6,305,293	$ 7,213,695
Accounts and other receivable	168,030	87,446
Prepaid expenses and deposits	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
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
Temporary equity:
Convertible preferred shares	1,372,213	2,476,955
Shareholders' equity:
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

Consolidated Balance Sheets (Parenthetical) - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020
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
	Dec. 31, 2020	Dec. 31, 2019
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)

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2020	Dec. 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 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	0	22,497
Purchase of property and equipment	(1,135)	0
Purchase of short-term investments	0	(499,790)
Net cash provided by investing activities	(1,135)	(477,293)
Cash flows from financing activities:
Proceeds from issuance of common shares	1,026,528	0
Proceeds from issuance of common shares subscribed	0	45,000
Proceeds from exercise of warrants	995,038	0
Payments for issuance costs of common shares	(41,940)	0
Proceeds from borrowings	15,346	0
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	$ 0

Consolidated Statements of Changes in Shareholders' Equity - USD ($)	Common Shares	Common Shares Subscribed	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Beginning balance, shares at Sep. 30, 2019	7,504,468
Beginning balance, amount at Sep. 30, 2019	$ 12,005,051	$ 0	$ 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)
Ending balance, shares at Dec. 31, 2019	7,504,468
Ending balance, amount at Dec. 31, 2019	$ 12,005,051	45,000	336,543	(323,960)	(7,828,948)	4,233,686
Beginning balance, shares at Sep. 30, 2019	7,504,468
Beginning balance, amount at Sep. 30, 2019	$ 12,005,051	0	327,768	(342,074)	(6,734,615)	5,256,130
Issuance of common shares upon exercise of warrants, shares	751,510
Issuance of common shares upon exercise of warrants, amount	$ 3,754,265
Issuance of common shares in equity offering, shares	1,354,691
Issuance of common shares in equity offering, amount	$ 3,070,358
Issuance costs	$ (349,756)
Ending balance, shares at Sep. 30, 2020	9,615,119
Ending balance, amount at Sep. 30, 2020	$ 18,500,853					6,631,175
Issuance of common shares upon exercise of warrants, shares	243,369
Issuance of common shares upon exercise of warrants, amount	$ 1,111,708		(116,670)			995,038
Issuance of common shares in equity offering, shares	169,753
Issuance of common shares in equity offering, amount	$ 1,026,528					1,026,528
Issuance of common shares upon conversion of preferred shares, shares	494,846
Issuance of common shares upon conversion of preferred shares, amount	$ 1,118,353					1,118,353
Issuance costs	$ (60,983)					(60,983)
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)
Ending balance, shares at Dec. 31, 2020	10,523,087
Ending balance, amount at Dec. 31, 2020	$ 21,696,459	$ 0	$ 2,156,719	$ (183,777)	$ (15,784,177)	$ 7,885,224

Nature of Operations

3 Months Ended

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.

Basis of Presentation

3 Months Ended

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.

Property and Equipment

3 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment, net consisted of the following:

	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

Depreciation expense amounted to $1,619 and $2,403 for the three months ended December 31, 2020 and 2019, respectively.

Intangible Assets

3 Months Ended

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:

	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

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:

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

Leases

3 Months Ended

Dec. 31, 2020

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:

	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

The components of lease cost were as follows:

Statements of Operations Caption

Quarter Ended

December 31,

2020

Operating lease cost

General and administrative

19,688

Lease terms and discount rates were as follows:

December 31,

2020

Remaining lease term (months):

Estimated incremental borrowing rate:

6.5

The approximate future minimum lease payments under operating leases at December 31, 2020 were as follows:

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

Cash flow information was as follows:

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

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.

Commitments

3 Months Ended

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:

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

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.

Temporary Equity

3 Months Ended

Dec. 31, 2020

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:

	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

Capital Shares

3 Months Ended

Dec. 31, 2020

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:

	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

The following table summarizes information about the warrants outstanding at December 31, 2020:

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

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:

	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

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:

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

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:

	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	%

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:

	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

Financial Instruments

3 Months Ended

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:

●	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.

(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

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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Loss Per Share

3 Months Ended

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.

Related Party Transactions

3 Months Ended

Dec. 31, 2020

Related Party Transactions

During the periods presented, the Company incurred the following related party transactions:

●

During the three months ended December 31, 2020 and 2019, the Company incurred rent expense of $19,688 and $19,440 from a related company, 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.

●

No royalty expenses to a director related to product sales by the California subsidiary were incurred during the three months ended December 31, 2020 and 2019. Included in accounts payable and accrued liabilities at December 31, 2019 was royalty payable of $23,457 to that director for product sales by the California subsidiary during 2019.

Subsequent Events

3 Months Ended

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.

Property and Equipment (Tables)

3 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and equipment

	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

Intagible Assets (Tables)

3 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

	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

Estimated future amortization of intagible assets

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

Leases (Tables)

3 Months Ended

Dec. 31, 2020

Leases [Abstract]

Lease assets and liabilities

	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

Lease cost components

Statements of Operations Caption

Quarter Ended

December 31,

2020

Operating lease cost

General and administrative

19,688

Lease terms and discount rates

December 31,

2020

Remaining lease term (months):

Estimated incremental borrowing rate:

6.5

Future minimum lease payments

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

Cash paid-lease liabilities

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

Commitments (Tables)

3 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Future contractual payments

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

Temporary Equity (Tables)

3 Months Ended

Dec. 31, 2020

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		-			13,611
Preferred Shares converted		(110	)		(1,118,353	)

Balance –December 31, 2020		140		$	1,372,213

Capital Shares (Tables)

3 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

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

Exercised		(243,369	)	$	4.09

Balance – December 31, 2020		749,352		$	5.19

Warrants outstanding

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

Stock option activity

	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

Stock options outstanding

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

Fair value of options granted assumptions

	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	%

Issued and outstanding common and preferred shares

	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

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

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+ Details

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 ($)	3 Months Ended
Property and Equipment (Details Narrative) - USD ($)	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
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
Leases (Details 1)	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
Leases (Details 4)	Dec. 31, 2020 USD ($)
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 19,689

Leases (Details Narrative) - USD ($)	3 Months Ended
Leases (Details Narrative) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Rent expense	$ 0	$ 68,508

Commitments (Details)	Dec. 31, 2020 USD ($)
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 ($)	3 Months Ended
Commitments (Details Narrative) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Employer contributions to 401K plan	$ 4,640	$ 1,556

- Definition

Amount of contribution received by defined benefit plan from employer which increases plan assets.

+ References + Details

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
Capital Shares (Details) - $ / shares	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
Capital Shares (Details 1) - $ / shares	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
Capital Shares (Details 2) - $ / shares	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 3) - $ / shares	3 Months Ended
Capital Shares (Details 3) - $ / shares	Dec. 31, 2020	Sep. 30, 2020	Sep. 30, 2019
Options outstanding	1,105,199	675,437	319,645
Options exercisable	523,136
Range of exercise prices	$ 4.77	$ 3.30	$ 3.39
Stock Option 1
Options outstanding	214
Options exercisable	214
Range of exercise prices	$ 638.40
Expiry dates	November 2021
Stock Option 2
Options outstanding	238
Options exercisable	238
Range of exercise prices	$ 304.08
Expiry dates	December 2022
Stock Option 3
Options outstanding	3,499
Options exercisable	3,499
Stock Option 3 \| Minumum
Range of exercise prices	$ 35.28
Expiry dates	September 2023
Stock Option 3 \| Maximum
Range of exercise prices	$ 93.24
Expiry dates	March 2025
Stock Option 4
Options outstanding	311,883
Options exercisable	304,323
Range of exercise prices	$ 2.16
Stock Option 4 \| Minumum
Expiry dates	August 2027
Stock Option 4 \| Maximum
Expiry dates	December 2028
Stock Option 5
Options outstanding	345,365
Options exercisable	178,239
Range of exercise prices	$ 3.16
Expiry dates	February 2030
Stock Option 6
Options outstanding	14,000
Options exercisable	776
Range of exercise prices	$ 8.07
Expiry dates	September 2030
Stock Option 7
Options outstanding	430,000
Options exercisable	35,847
Range of exercise prices	$ 7.44
Expiry dates	October 2030

Capital Shares (Details 4)	3 Months Ended
Capital Shares (Details 4)	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 5) - USD ($)	3 Months Ended		12 Months Ended
Capital Shares (Details 5) - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2020
Beginning balance, amount	$ 6,631,175	$ 5,256,130	$ 5,256,130
Preferred return for Class A preferred shares, amount	13,611
Common shares subscribed		45,000
Issuance of common shares in equity offering, amount	1,026,528
Issuance of common shares upon exercise of warrants, amount	$ 995,038
Common shares issued upon exercise of share options, shares			4,450
Issuance of common shares upon conversion of preferred shares, amount	$ 1,118,353
Issuance costs	(60,983)
Ending balance, amount	$ 7,885,224	$ 4,233,686	$ 6,631,175
Common Shares
Beginning balance, shares	9,615,119	7,504,468	7,504,468
Beginning balance, amount	$ 18,500,853	$ 12,005,051	$ 12,005,051
Issuance of common shares in equity offering, shares	169,753		1,354,691
Issuance of common shares in equity offering, amount	$ 1,026,528		$ 3,070,358
Issuance of common shares upon exercise of warrants, shares	243,369		751,510
Issuance of common shares upon exercise of warrants, amount	$ 1,111,708		$ 3,754,265
Common shares issued upon exercise of share options, shares			4,450
Common shares issued upon exercise of share options, shares			$ 20,935
Issuance of common shares upon conversion of preferred shares, shares	494,846
Issuance of common shares upon conversion of preferred shares, amount	$ 1,118,353
Issuance costs	$ (60,983)		$ (349,756)
Ending balance, shares	10,523,087	7,504,468	9,615,119
Ending balance, amount	$ 21,696,459	$ 12,005,051	$ 18,500,853

Capital Shares (Details Narrative) - USD ($)	3 Months Ended
Capital Shares (Details Narrative) - USD ($)	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