7.	Share Capital

(a)

Financing:

On September 13, 2016, the Company completed an underwritten public offering of 3,450,000 of its common shares at a public offering price of $7.50 per common share. The Company received approximately $24.3 million of proceeds, net of underwriting discounts and commissions but before offering expenses.

(b)

Stock-based compensation:

The following table presents stock option activity for the period:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Outstanding, beginning of period		2,258,237			1,934,734			1,910,823			1,721,472
Granted		29,750			65,450			446,500			299,400
Exercised⁽¹⁾		(3,085	)		(14,283	)		(71,006	)		(30,529	)
Forfeited and expired		(8,005	)		(2,227	)		(9,420	)		(6,669	)
Outstanding, end of period		2,276,897			1,983,674			2,276,897			1,983,674
Exercisable, end of period		1,374,535			1,195,883			1,374,535			1,195,883

⁽¹⁾

During the six months ended June 30, 2017, 63,425 stock options were exercised for the same number of common shares for cash (six months ended June 30, 2016 – 29,270). In the same period, the Company issued 4,405 common shares (six months ended June 30, 2016 – 741) for the cashless exercise of 7,581 stock options (six months ended June 30, 2016 – 1,259).

The fair value of each option granted to employees and non-employees is estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Average risk-free interest rate		2.05	%		1.44	%		2.41	%		1.60	%
Expected volatility		81	%		74	%		81	%		75	%
Average expected term (in years)		7.68			6.14			7.49			6.23
Expected dividend yield		0.00	%		0.00	%		0.00	%		0.00	%

The weighted-average fair value of options granted during the six months ended June 30, 2017 was $6.11 (six months ended June 30, 2016 – $4.90) per option.