On April 10, 2016, the Company incurred the obligation to issue warrants to placement agents relating to fundraising. The Company accounted for the obligation based on an estimate of the fair value of warrants issued using the Black-Scholes Model (“BSM”) and the Company recorded $484,009 as a liability and a reduction to proceeds of the equity offering (additional paid-in-capital). The Company assessed the fair value for each reporting period of the liability and recorded changes to additional paid-in capital. At February 28, 2017, the date the warrants were issued, the obligation was reversed to additional paid-in capital and no outstanding liability existed. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Equity”, the Company determined that the warrants issued as placement agent warrants are classified as equity in additional paid-in capital.

On July 3, 2017, the Company entered into a finders agreement with a placement agent whereby they incurred an obligation to issue warrants once a private placement has successfully been entered into. On August 31, 2017, the performance condition had been satisfied and the Company issued the related warrants. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Equity”, the Company determined that the warrants issued as placement agent warrants are classified as equity in additional paid-in capital.

On September 1, 2017, the Company issued warrants to placement agents in lieu of fees for consultancy services to be provided over a period of 6 months. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Equity”, the Company determined that the warrants issued in lieu of consultancy fees are classified as equity in additional paid in-capital.

The fair value of the warrants at the date of issuance has been calculated based on the following inputs and assumptions using the Black-Scholes Model:


	September 1, 2017	August 31, 2017	February 28, 2017
Fair value at issuance date	$1,420,456	$424,179	$2,914,884
Warrants issued	374,000	112,000	1,440,501
Exercise Price	$0.60	$0.65	$0.37
Stock Price	$4.00	$4.00	$2.10
Expected Term (Years)	10	10	10
Volatility %	91%	91%	105%
Discount Rate - Bond Equivalent Yield	2.35%	2.35%	2.55%
Dividend Yield	—%	—%	—%

Discount rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities which correspond to the expected term of the Company’s stock options.

Dividend yield —The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future.

Expected volatility —Based on the historical volatility of seven different comparable Companies’ stock.

The following table summarizes warrant activity for the nine months ended June 30, 2018:


	Number of Warrants	Weighted Average Exercise Price Per Option	Weighted Average remaining Contractual Life (years)	Aggregate Intrinsic Value
Outstanding balance at September 30, 2017	1,926,501	0.43	8.86	6,875,819

Granted	—	—	—	—

Forfeited	—	—	—	—

Outstanding balance at June 30, 2018	1,926,501	0.43	8.11	$	1,288,966

Warrants exercisable at June 30, 2018	1,926,501	0.43	8.11	$	1,288,966

The performance related warrants issued on August 31, 2017 are fully vested and do not have any forfeiture conditions attached.

During the three and nine months ended June 30, 2018, $0 and $522,350 of costs were recognized for consultancy related warrants respectively. These costs are included within the Consultancy fees third parties and related parties expense category in the consolidated financial statements. As of February 28, 2018, the consultancy warrants were fully vested.