Company: EDSA
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001171843-25-003189
Chunk: 27

Company: Edesa Biotech, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 27
---
 an at-the-market equity offering program for up to $3.87 million in gross proceeds. The Company has no obligation to sell any of the Common Shares and may at any time suspend sales or terminate the equity distribution agreement in accordance with its terms. For the six months ended March 31, 2025, the Company sold a total of 304,057 Common Shares pursuant to the agreement for net proceeds of $0.8 million after deducting sales agent commissions of $25,000. The Company has not sold any Common Shares pursuant to the HCW ATM subsequent to March 31, 2025.

11

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 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 warrant activity is as follows:

			Number of Warrant Shares 

			(#)

			Weighted Average Exercise Price

			Six Months Ended March 31, 2025

			Balance - September 30, 2024

			609,717

			$
			21.74

			Issued

			326,560

			3.45

			Expired

			(1,687
			)

			22.40

			Balance - March 31, 2025

			934,590

			$
			15.35

			Six Months Ended March 31, 2024

			Balance - September 30, 2023

			720,909

			$
			19.