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 September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Outstanding, beginning of period		2,276,897			1,983,674			1,910,823			1,721,472
Granted		1,050			22,044			447,550			321,444
Exercised⁽¹⁾		—			(42,012	)		(71,006	)		(72,541	)
Forfeited and expired		(70,567	)		(4,753	)		(79,987	)		(11,422	)
Outstanding, end of period		2,207,380			1,958,953			2,207,380			1,958,953
Exercisable, end of period		1,417,660			1,200,614			1,417,660			1,200,614

⁽¹⁾

During the nine months ended September 30, 2017, 63,425 stock options were exercised for the same number of common shares for cash (nine months ended September 30, 2016 – 30,176). In the same period, the Company issued 4,405 common shares (nine months ended September 30, 2016 – 27,421) for the cashless exercise of 7,581 stock options (nine months ended September 30, 2016 – 42,365).

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 September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Average risk-free interest rate		1.99	%		1.33	%		2.41	%		1.58	%
Expected volatility		81	%		75	%		81	%		75	%
Average expected term (in years)		6.50			6.19			7.48			6.22
Expected dividend yield		0	%		0	%		0	%		0	%

The weighted-average fair value of options granted during the nine months ended September 30, 2017 was $6.10 (nine months ended September 30, 2016 – $4.93) per option.