Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Sep. 05, 2014 | Dec. 31, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'Cellceutix CORP | ' | ' |
Entity Central Index Key | '0001355250 | ' | ' |
Trading Symbol | 'ctix | ' | ' |
Current Fiscal Year End Date | '--06-30 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Public Float | ' | ' | $132,592,800 |
Entity Common Stock, Shares Outstanding | ' | 111,687,129 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Current Assets: | ' | ' |
Cash | $4,988,000 | $2,955,000 |
Prepaid expenses and security deposits | 568,000 | 5,000 |
Total Current Assets | 5,556,000 | 2,960,000 |
Other Assets: | ' | ' |
Patent costs - net | 4,962,000 | 10,000 |
Property, plant and equipment -net | 39,000 | ' |
Deferred offering costs | 295,000 | ' |
Total Other Assets | 5,296,000 | 10,000 |
Total Assets | 10,852,000 | 2,970,000 |
Current Liabilities: | ' | ' |
Accounts payable - (including related party payables of approx. $1,708,000 and $1,704,000, respectively) | 2,664,000 | 1,849,000 |
Accrued expenses - (including related party accruals of approx. $290,000 and $354,000, respectively) | 336,000 | 554,000 |
Accrued salaries and payroll taxes -(including related party accrued salaries of approx. $3,210,000 and $3,427,000, respectively) | 3,224,000 | 3,431,000 |
Accrued settlement costs | ' | 284,000 |
Note payable - related party | 2,022,000 | 2,022,000 |
Redeemable Common Stock | 1,400,000 | ' |
Total Current Liabilities | 9,646,000 | 8,140,000 |
Total Liabilities | 9,646,000 | 8,140,000 |
Stockholders' Equity (Deficit) | ' | ' |
Preferred stock, $0.001 par value, 500,000 designated shares, no shares issued and outstanding | ' | ' |
Additional paid-in capital | 29,215,000 | 14,868,000 |
Accumulated deficit | -28,020,000 | -19,773,000 |
Treasury stock - 0 and 1,382,084 shares at cost - as of June 30, 2014 and June 30, 2013, respectively | ' | -275,000 |
Total Stockholders' Equity (Deficit) | 1,206,000 | -5,170,000 |
Total Liabilities and Stockholders' Equity (Deficit) | 10,852,000 | 2,970,000 |
Common Class A | ' | ' |
Stockholders' Equity (Deficit) | ' | ' |
Common Stock, Value | 11,000 | 10,000 |
Common Class B | ' | ' |
Stockholders' Equity (Deficit) | ' | ' |
Common Stock, Value | ' | ' |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Accounts payable, related party payables (in dollars) | $1,708,000 | $1,704,000 |
Accrued expenses, related party accruals (in dollars) | 290,000 | 354,000 |
Accrued Salaries, due to related parties (in dollars) | $3,210,000 | $3,427,000 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | ' | ' |
Preferred stock, shares outstanding (in shares) | ' | ' |
Treasury stock, shares (in shares) | 0 | 1,382,084 |
Common Class A | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 109,787,129 | 100,456,068 |
Common stock, shares outstanding (in shares) | 109,787,129 | 99,073,984 |
Common Class B | ' | ' |
Number of votes entitled in class of stock (in votes) | 10 | 10 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | ' | ' |
Common stock, shares outstanding (in shares) | ' | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Consolidated Statements Of Operations | ' | ' | ' |
Revenues | ' | ' | ' |
Operating expenses: | ' | ' | ' |
Research and development expenses | 6,344,000 | 1,510,000 | 633,000 |
General and administrative expenses | 872,000 | 399,000 | 304,000 |
Officers' payroll and payroll tax expense | 505,000 | 459,000 | 2,413,000 |
Professional fees | 317,000 | 615,000 | 847,000 |
Total operating expenses | 8,038,000 | 2,983,000 | 4,197,000 |
Loss from operations | -8,038,000 | -2,983,000 | -4,197,000 |
Other expenses | ' | ' | ' |
Interest income | 1,000 | ' | ' |
Interest expense | -210,000 | -241,000 | -257,000 |
Loss on financial instruments | ' | ' | -440,000 |
Total other expenses | -209,000 | -241,000 | -697,000 |
Loss before provision for income taxes | -8,247,000 | -3,224,000 | -4,894,000 |
Provision for income taxes | ' | ' | ' |
Net loss | -8,247,000 | -3,224,000 | -4,894,000 |
Deemed dividends | -1,980,000 | -212,000 | -66,000 |
Net loss attributable to common stockholders | ($10,227,000) | ($3,436,000) | ($4,960,000) |
Basic and diluted loss per share attributable to common stockholders | ($0.10) | ($0.04) | ($0.06) |
Weighted average number of common shares | 105,044,985 | 94,980,552 | 90,159,045 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total |
Beginning Balance, Amount at Jun. 30, 2011 | ' | $9,172 | $4,839,000 | ($11,377,000) | ($759,000) | ($7,288,000) |
Beginning Balance, Shares at Jun. 30, 2011 | ' | 91,720,646 | ' | ' | 4,142,084 | ' |
Issuance of stock options | ' | ' | 2,114,000 | ' | ' | 2,114,000 |
Convertible debentures converted to common stock, Shares | ' | 707,277 | ' | ' | ' | ' |
Convertible debentures converted to common stock, Amount | ' | 71 | 354,000 | ' | ' | 354,000 |
Shares issued for services, August 29, 2011 to June 29,2012 at $0.38 to $0.62, Shares | ' | 1,165,228 | ' | ' | ' | ' |
Shares issued for services, August 29, 2011 to June 29,2012 at $0.38 to $0.62, Amount | ' | 116 | 548,000 | ' | ' | 548,000 |
Issuance of capital stock, Shares | ' | 2,500,000 | ' | ' | ' | ' |
Issuance of capital stock, Amount | ' | 250 | 582,000 | ' | ' | 582,000 |
Reclassification of warrants into equity | ' | ' | 858,000 | ' | ' | 858,000 |
Issuance of preferred stock, Shares | 10,000 | ' | ' | ' | ' | ' |
Issuance of preferred stock, Amount | 10 | ' | 100,000 | ' | ' | 100,000 |
Conversion of preferred stock to common stock, Shares | -10,000 | 255,754 | ' | ' | ' | ' |
Conversion of preferred stock to common stock, Amount | -10 | 26 | ' | ' | ' | ' |
Cancellation of treasury stock, Shares | ' | -1,380,000 | ' | ' | -1,380,000 | ' |
Cancellation of treasury stock, Amount | ' | -138 | -232,000 | ' | 232,000 | ' |
Deemed dividends | ' | ' | 66,000 | -66,000 | ' | ' |
Net loss | ' | ' | ' | -4,894,000 | ' | -4,894,000 |
Ending Balance, Amount at Jun. 30, 2012 | ' | 9,497 | 9,229,000 | -16,337,000 | -527,000 | -7,626,000 |
Ending Balance, Shares at Jun. 30, 2012 | ' | 94,968,905 | ' | ' | 2,762,084 | ' |
Issuance of stock options | ' | ' | 217,000 | ' | ' | 217,000 |
Issuance of preferred stock, Shares | 30,000 | ' | ' | ' | ' | ' |
Issuance of preferred stock, Amount | 30 | ' | 30,000 | ' | ' | 30,000 |
Conversion of preferred stock to common stock, Shares | -30,000 | 592,330 | ' | ' | ' | ' |
Conversion of preferred stock to common stock, Amount | -30 | 59 | ' | ' | ' | ' |
Cancellation of treasury stock, Shares | ' | -1,380,000 | ' | ' | -1,380,000 | ' |
Cancellation of treasury stock, Amount | ' | -138 | -252,000 | ' | 252,000 | ' |
Deemed dividends | ' | ' | 212,000 | -212,000 | ' | ' |
Shares issued for services, at $0.59 to $1.78, Shares | ' | 13,000 | ' | ' | ' | ' |
Shares issued for services, at $0.59 to $1.78, Amount | ' | 14 | 97,000 | ' | ' | 97,000 |
Shares sold to Aspire from December 6, 2012 to June 30, 2013 at $0.89 to $1.97, Shares | ' | 2,712,208 | ' | ' | ' | ' |
Shares sold to Aspire from December 6, 2012 to June 30, 2013 at $0.89 to $1.97, Amount | ' | 271 | 4,382,000 | ' | ' | 4,382,000 |
Shares issued as commitment fee, December 6, 2012 at $0.89, Shares | ' | 336,625 | ' | ' | ' | ' |
Shares issued as commitment fee, December 6, 2012 at $0.89, Amount | ' | 34 | 300,000 | ' | ' | 300,000 |
Offering cost | ' | ' | -300,000 | ' | ' | -300,000 |
Shares issued for charity donation, May 31, 2013 at $2.2, Shares | ' | 10,000 | ' | ' | ' | ' |
Shares issued for charity donation, May 31, 2013 at $2.2, Amount | ' | 10 | 220,000 | ' | ' | 220,000 |
Exercise of stock options, Shares | ' | 2,255,000 | ' | ' | ' | ' |
Exercise of stock options, Amount | ' | 225 | 278,000 | ' | ' | 278,000 |
Exercise of warrants, Shares | ' | 741,000 | ' | ' | ' | ' |
Exercise of warrants, Amount | ' | 74 | 185,000 | ' | ' | 185,000 |
Net loss | ' | ' | ' | -3,224,000 | ' | -3,224,000 |
Ending Balance, Amount at Jun. 30, 2013 | ' | 10,046 | 14,868,000 | -19,773,000 | -275,000 | -5,170,000 |
Ending Balance, Shares at Jun. 30, 2013 | ' | 100,456,068 | ' | ' | 1,382,084 | ' |
Issuance of stock options | ' | ' | 109,000 | ' | ' | 109,000 |
Cancellation of treasury stock, Shares | ' | -1,382,083 | ' | ' | -1,382,084 | ' |
Cancellation of treasury stock, Amount | ' | -138 | -275,000 | ' | 275,000 | ' |
Offering cost | ' | ' | -77,000 | ' | ' | -77,000 |
Exercise of stock options, Shares | ' | 25,000 | ' | ' | ' | ' |
Exercise of stock options, Amount | ' | 2 | 5,000 | ' | ' | 5,000 |
Exercise of warrants, Shares | ' | 3,148,084 | ' | ' | ' | ' |
Exercise of warrants, Amount | ' | 315 | 2,700,000 | ' | ' | 2,700,000 |
Shares issued for assets of Polymedix at $1.93, net of $1.4 million Redeemable Common Stock liability, Shares | ' | 1,400,000 | ' | ' | ' | ' |
Shares issued for assets of Polymedix at $1.93, net of $1.4 million Redeemable Common Stock liability, Amount | ' | 140 | 1,302,000 | ' | ' | 1,302,000 |
Shares sold to Aspire under December 2012 Agreement at $1.66-$1.94, Shares | ' | 3,204,537 | ' | ' | ' | ' |
Shares sold to Aspire under December 2012 Agreement at $1.66-$1.94, Amount | ' | 320 | 5,617,000 | ' | ' | 5,618,000 |
Shares issued to employees for year ended bonus at $1.85 for 5,000 shares and $1.6 for 60,000 shares, Shares | ' | 65,000 | ' | ' | ' | ' |
Shares issued to employees for year ended bonus at $1.85 for 5,000 shares and $1.6 for 60,000 shares, Amount | ' | 7 | 105,000 | ' | ' | 105,000 |
Shares sold to Aspire under October 2013 Agreement at $1.64-$1.82, Shares | ' | 2,500,000 | ' | ' | ' | ' |
Shares sold to Aspire under October 2013 Agreement at $1.64-$1.82, Amount | ' | 250 | 4,154,000 | ' | ' | 4,155,000 |
Shares issued for offering cost at $1.77, Shares | ' | 210,523 | ' | ' | ' | ' |
Shares issued for offering cost at $1.77, Amount | ' | 21 | 373,000 | ' | ' | 373,000 |
Shares issued to consultants at $1.64-$2.09, Shares | ' | 160,000 | ' | ' | ' | ' |
Shares issued to consultants at $1.64-$2.09, Amount | ' | 16 | 305,000 | ' | ' | 305,000 |
Issuance of stock warrants | ' | ' | 29,000 | ' | ' | 29,000 |
Net loss | ' | ' | ' | -8,247,000 | ' | -8,247,000 |
Ending Balance, Amount at Jun. 30, 2014 | ' | $10,979 | $29,215,000 | ($28,020,000) | ' | $1,206,000 |
Ending Balance, Shares at Jun. 30, 2014 | ' | 109,787,129 | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net loss | ($8,247,000) | ($3,224,000) | ($4,894,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Loss on disposal of fixed assets | 73,000 | ' | ' |
Common stock and stock options issued as payment for services compensation, services rendered and charitable contributions and financing costs | 548,000 | 299,000 | 2,566,000 |
Common stock issued as charitable contributions | ' | 220,000 | 138,000 |
Amortization of accrued settlement costs | ' | 39,000 | 60,000 |
Amortization of patent costs | 285,000 | 1,000 | ' |
Depreciation of equipment | 4,000 | ' | ' |
Loss on financial instruments | ' | ' | 440,000 |
Changes in operating assets and liabilities: | ' | ' | ' |
Other receivables | ' | ' | 204,000 |
Prepaid expenses and security deposits | -563,000 | -5,000 | -1,000 |
Accounts payable | 815,000 | -117,000 | -174,000 |
Accrued expenses | -218,000 | 238,000 | 208,000 |
Accrued officers' salaries and payroll taxes | -207,000 | 642,000 | 759,000 |
Net cash used in operating activities | -7,510,000 | -1,907,000 | -694,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Proceeds from disposal of fixed assets | 24,000 | ' | ' |
Additions to property, plant and equipment | -43,000 | ' | ' |
Patent Costs | -2,631,000 | -11,000 | ' |
Net cash used in investing activities | -2,650,000 | -11,000 | ' |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Sale of common stock | 9,772,000 | 4,382,000 | 100,000 |
Sale of preferred stock | ' | 300,000 | ' |
Payment of settlement liabilities | -284,000 | -300,000 | -300,000 |
Loan from officer | ' | ' | 20,000 |
Redemption of convertible debentures | ' | ' | -167,000 |
Proceeds from subscription | ' | ' | 1,000,000 |
Exercise of stock options and warrants | 2,705,000 | 464,000 | ' |
Net cash provided by financing activities | 12,193,000 | 4,846,000 | 653,000 |
NET INCREASE (DECREASE) IN CASH AND CASH | 2,033,000 | 2,928,000 | -41,000 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 2,955,000 | 27,000 | 68,000 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 4,988,000 | 2,955,000 | 27,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ' | ' | ' |
Cash paid for interest | 259,000 | 223,000 | 83,000 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INVESTING AND FINANCING ACTIVITIES | ' | ' | ' |
Debt converted to common stock | ' | ' | 354,000 |
Cancellation of treasury stock | -275,000 | -253,000 | -232,000 |
Reclassification of warrants to equity | ' | ' | 858,000 |
Deemed dividend from beneficial conversion feature on preferred stock | ' | 53,000 | 18,000 |
Deemed dividend - warrants | 1,980,000 | 159,000 | 48,000 |
Conversion of preferred stock into common stock | ' | ' | ' |
Shares issued as deferred offering costs | 373,000 | 300,000 | ' |
Shares issued for acquisition of patent and equipment | 2,702,000 | ' | ' |
Redeemable Common Stock | $1,400,000 | ' | ' |
Basis_of_Presentation_and_Natu
Basis of Presentation and Nature of Operations | 12 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 1 - Basis of Presentation and Nature of Operations | ' |
Basis of Presentation | |
Cellceutix Corporation, formerly known as EconoShare, Inc., (“Cellceutix” or the “Company”) was incorporated on August 1, 2005. On December 6, 2007, the Company acquired Cellceutix Pharma, Inc. which was incorporated in the State of Delaware on June 20, 2007, in exchange for newly issued shares of the Company’s common stock. As a result of the exchange, Cellceutix Pharma, Inc. became a wholly-owned subsidiary of the Company. The Company is a clinical stage biopharmaceutical company and has no customers, products or revenues to date. | |
The Company’s Common Stock is quoted on the Over the Counter Bulletin Board (OTCBB), symbol “CTIX”. | |
All amounts, where it is designated in these notes to the financial statements as an approximate amount, are rounded to the nearest thousand dollars. | |
Nature of Operations | |
Overview | |
We are in the business of developing innovative small molecule therapies to treat diseases with significant medical need, particularly in the areas of cancer and inflammatory disease. Our strategy is to use our business and scientific expertise to maximize the value of our pipeline. We will do this by focusing initially on our lead compounds, Kevetrin and Prurisol and advancing them as quickly as possible along the regulatory pathway. We will develop the highest quality data and broadest intellectual property to support our compounds. | |
We currently own all development and marketing rights to our products. In order to successfully develop and market our products, we may have to partner with other companies. Prospective partners may require that we grant them significant development and/or commercialization rights in return for agreeing to share the risk of development and/or commercialization. |
Going_Concern
Going Concern | 12 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 2 - Going Concern | ' |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. At June 30, 2014, we had $4,988,000 in cash and cash equivalents. We have expended substantial funds on the research and development of our product candidates. Our net losses incurred during the three fiscal years ended June 30, 2014, 2013 and 2012, amounted to $8,247,000, $3,224,000, and $4,894,000, respectively and a working capital deficit of approximately $4,090,000 and $5,180,000, respectively at June 30, 2014 and 2013. In view of these matters, the ability of the Company to continue as a going concern is dependent upon the Company’s ability to generate additional financing. Since inception, the Company has financed its activities principally from the use of equity securities, debt issuance and loans from an officer to pay for its operations. The Company intends on financing its future development activities and its working capital needs largely from the issuance of debt and the sale of equity securities, until such time that funds provided by operations are sufficient to fund working capital requirements. On October 25, 2013, we terminated a previous agreement with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”), and entered into a new stock purchase agreement (the “Purchase Agreement”) with Aspire Capital. | |
The Purchase Agreement provides that upon meeting the terms of the agreement, Aspire Capital is committed to purchase up to an aggregate of $20,000,000 of our shares of Class A Common Stock over the approximately 36-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, the Company issued to Aspire Capital 210,523 shares of its Class A Common Stock as a commitment fee. The commitment fee will be amortized as the funding is received. The unamortized portion is carried on the balance sheet as deferred offering costs. Concurrently with entering into the Purchase Agreement, the Company agreed to file one or more registration statements as permissible and necessary under the Securities Act of 1933, as amended, or the Securities Act, for the sale of shares of our Class A Common Stock that have been and may be issued to Aspire Capital under the Purchase Agreement. On November 4, 2013, the Company filed a Form S-3 registration statement and the registration statement was declared effective by the SEC on November 15, 2013. | |
These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should the Company be unable to continue as a going concern. |
Significant_Accounting_Policie
Significant Accounting Policies and Recent Accounting Pronouncements | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 3 - Significant Accounting Policies and Recent Accounting Pronouncements | ' | ||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, recoverability of long-lived assets, measurement of stock-based compensation, and the periods of performance under collaborative research and development agreements. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
Cash and cash equivalents consist of cash and short-term highly liquid investments purchased with original maturities of three months or less. There were no cash equivalents at June 30, 2014 and 2013. | |||||||||||||
Property, Plant and Equipment | |||||||||||||
Property and equipment are stated at cost, net of accumulated depreciation. Expenditures that extend the life, increase the capacity, or improve the efficiency of property and equipment are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation is recognized using the straight-line method over the following approximate useful lives: | |||||||||||||
Machinery and equipment 5 Years | |||||||||||||
Intangible Assets – Patents | |||||||||||||
Costs incurred to file patent applications and acquired intangibles are capitalized when the Company believes that there is a high likelihood that the patent will be issued and there will be future economic benefit associated with the patent. These costs will be amortized on a straight-line basis over a 12 - 17 years life from the date of patent filing. All costs associated with abandoned patent applications are expensed. In addition, the Company will review the carrying value of patents for indicators of impairment on a periodic basis and if it determines that the carrying value is impaired, it values the patent at fair value. As of June 30, 2014 and 2013, carrying value of patent was approximately $4,962,000 and $10,000, respectively. Amortization expense for the fiscal years ended June 30, 2014, 2013 and 2012, was approximately $285,000, $1,000 and $0, respectively. | |||||||||||||
As of June 30, 2014, the Company has expensed the costs associated with obtaining patents that have not yet developed products nor which have gained market acceptance and the Company has or will let these patents go abandoned. For the fiscal years ended June 30, 2014, 2013 and 2012, the Company has charged to operations approximately $136,000, $29,000 and $99,000, respectively as patent expenses included in general and administration expenses. | |||||||||||||
In accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. During the fiscal years ended June 30, 2014, 2013 and 2012, no impairment expense was recorded. | |||||||||||||
Financial Instruments | |||||||||||||
The Company’s financial instruments include cash, accounts payable and accrued liabilities. The carrying amounts of these financial instruments approximate their fair value, due to the short-term nature of these items. The fair value hierarchy has the following three levels: | |||||||||||||
Level 1—quoted prices in active markets for identical assets and liabilities. | |||||||||||||
Level 2—observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |||||||||||||
Level 3—unobservable inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability. | |||||||||||||
Certain Risks and Uncertainties | |||||||||||||
Product Development | |||||||||||||
We devote significant resources to research and development programs in an effort to discover and develop potential future product candidates. The product candidates in our pipeline are at various stages of preclinical and clinical development. The path to regulatory approval includes three phases of clinical trials in which we collect data to support an application to regulatory authorities to allow us to market a product for treatment of a specified disease. There are many difficulties and uncertainties inherent in research and development of new products, resulting in a high rate of failure. To bring a drug from the discovery phase to regulatory approval, and ultimately to market, takes many years and significant cost. Failure can occur at any point in the process, including after the product is approved, based on post-market factors. New product candidates that appear promising in development may fail to reach the market or may have only limited commercial success because of efficacy or safety concerns, inability to obtain necessary regulatory approvals, limited scope of approved uses, reimbursement challenges, difficulty or excessive costs of manufacture, alternative therapies or infringement of the patents or intellectual property rights of others. Uncertainties in the FDA approval process and the approval processes in other countries can result in delays in product launches and lost market opportunities. Consequently, it is very difficult to predict which products will ultimately be submitted for approval, which have the highest likelihood of obtaining approval and which will be commercially viable and generate profits. Successful results in preclinical or clinical studies may not be an accurate predictor of the ultimate safety or effectiveness of a drug or product candidate. | |||||||||||||
Expenditures for research, development, and engineering of products are expensed as incurred. For the fiscal years ended June 30, 2014, 2013 and 2012, the Company incurred approximately $6,344,000, $1,510,000 and $633,000 of research and development costs, respectively. | |||||||||||||
Concentrations of Credit Risk | |||||||||||||
All cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. | |||||||||||||
Income Taxes | |||||||||||||
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||||||
The Company has generated net losses since inception and accordingly has not recorded a provision for income taxes. The deferred tax assets were primarily comprised of federal and state tax net operating loss, or NOL, carryforwards. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these tax assets, a full valuation allowance has been established to offset the deferred tax assets. Additionally, the future utilization of the NOL carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. If necessary, the deferred tax assets will be reduced by any carryforwards that expire prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. | |||||||||||||
The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. | |||||||||||||
The Company has identified its U.S. Federal income tax return and its State return in Massachusetts as its major tax jurisdictions. The fiscal 2012 and forward years are still open for examination. | |||||||||||||
Basic Earnings (Loss) per Share | |||||||||||||
Basic and diluted earnings per share are computed based on the weighted-average common shares and common share equivalents outstanding during the period. Common share equivalents consist of stock options, warrants and convertible notes payable. Common share equivalents were excluded from the computation of diluted earnings per share for the years ended June 30, 2014, 2013 and 2012, because their effect is anti-dilutive (See note 12). | |||||||||||||
Accounting for Stock Based Compensation | |||||||||||||
The stock-based compensation expense incurred by Cellceutix for employees and directors in connection with its stock option plan is based on the employee model of ASC 718, and the fair market value of the options is measured at the grant date. Under ASC 718 employee is defined as “An individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S.“tax regulations”. Our consultants do not meet the employer-employee relationship as defined by the IRS and therefore are accounted for under ASC 505-50. | |||||||||||||
ASC 505-50-30-11 (previously EITF 96-18) further provides that an issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates, referred to as the measurement date: | |||||||||||||
i. | The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a performance commitment); and | ||||||||||||
ii. | The date at which the counterparty’s performance is complete. | ||||||||||||
We have elected to use the Black-Scholes-Merton pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units are measured based on the fair market values of the underlying stock on the dates of grant. We recognize stock-based compensation using the straight-line method. | |||||||||||||
The components of stock based compensation related to stock options in the Company’s Statement of Operations for the fiscal years ended June 30, 2014, 2013 and 2012 are as follows(rounded to nearest thousand): | |||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-12 | |||||||||||
Research and development expenses | |||||||||||||
Professional fees | $ | 389,000 | $ | - | $ | - | |||||||
General and administrative expenses | |||||||||||||
Employees’ bonus | $ | 105,000 | $ | - | $ | - | |||||||
Consulting | 54,000 | 299,000 | 571,000 | ||||||||||
Charitable contribution | - | 220,000 | 138,000 | ||||||||||
Officers’ payroll and payroll expenses | - | - | 1,995,000 | ||||||||||
Total share-based compensation expense | $ | 548,000 | $ | 519,000 | $ | 2,704,000 | |||||||
Recent Accounting Pronouncements | |||||||||||||
Recently Adopted Standards | |||||||||||||
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation." This ASU removes the definition of a development stage entity from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the ASU eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and stockholders’ equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This ASU is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The Company has elected to early adopt this ASU effective with this Annual Report on Form 10-K and its adoption resulted in the removal of previously required development stage disclosures. | |||||||||||||
Standards Issued Not Yet Adopted | |||||||||||||
In June 2014, the FASB issued guidance that clarifies the accounting for share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. In this case, the performance target would be required to be treated as a performance condition, and should not be reflected in estimating the grant-date fair value of the award. The guidance also addresses when to recognize the related compensation cost. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Management is currently reviewing this guidance to determine the impact it may have, if any, on our financial statements. | |||||||||||||
In May 2014, the FASB issued guidance on the accounting for revenue from contracts with customers that will supersede most existing revenue recognition guidance, including industry-specific guidance. The core principle requires an entity to recognize revenue to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the guidance requires enhanced disclosures regarding the nature, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. This guidance is effective for interim and annual reporting periods beginning on or after December 15, 2016. Entities can choose to apply the guidance using either the full retrospective approach or a modified retrospective approach. Management believes that the adoption of this guidance will not have a material impact on our financial statements. | |||||||||||||
In April 2014, the FASB issued guidance for the reporting of discontinued operations, which also contains new disclosure requirements for both discontinued operations and other disposals that do not meet the definition of a discontinued operation. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Management believes that the adoption of this guidance will not have a material impact on our financial statements. |
Polymedix_Inc_Asset_Acquisitio
Polymedix Inc. Asset Acquisition Patent Rights and Equipment | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
Note 4 - Polymedix Inc. Asset Acquisition -Patent Rights and Equipment | ' | ||||
On September 4, 2013, the Company purchased substantially all of the assets (“Purchased Assets”) of Polymedix Inc, and Polymedix Pharmaceuticals, Inc. (“Seller”) from the U.S. Bankruptcy Court. | |||||
The aggregate purchase price for the sale and transfer of the Purchased Assets was $2.1 million in cash, plus 1.4 million shares of the Company’s Class A common stock (the “Registrable Securities”), for a total aggregate purchase price of approximately $4.8 million. These common shares were valued at $1.93 per share, based on the September 4, 2013 opening stock price as quoted on the OTB Bulletin Board, resulting in approximately $2.7 million of stock issued to acquire the Purchased Assets. The Purchased Assets Agreement also provides the Seller with the right to require the Company to redeem the Common Stock held by such Seller (the “Put Option”) at any time between one day after the closing and three hundred and sixty-five days after the closing, the seller or any holder of the registrable securities may make written demand upon the purchase for the purchase to repurchase the registrable securities for $1 per share. | |||||
Because the Company is required to repurchase these issued common shares if the Seller exercises the above Put Option, this redemption feature meets the definition under the ASC 480-10-25-8, “Obligations to Repurchase Issuer’s Equity Shares by Transferring Assets”. Per ASC 480-10-25-8, the obligation to repurchase an issuer’s own shares by transferring assets should be recognized as a liability at inception date. Therefore, the number of potential shares needed to repurchase the Common Stock under this Put Option was 1,400,000 shares as of December 31, 2013. This obligation was recorded as a current liability of $1.4 million of Redeemable Common Stock liability in the accompanying balance sheet. | |||||
ASC 805, Business Combinations, provides guidance on determining whether an acquired set of assets meets the definition of a business for accounting purposes. Under the framework, the acquired set of activities and assets have to be capable of being operated as a business, from the viewpoint of a market participant as defined in ASC 820, Fair Value Measurements. Two essential elements required for an integrated set of activities are inputs and outputs. The Company evaluated the Asset Purchase Agreement and in accordance with the guidance, determined it did not meet the definition of a business acquisition as the acquisition consisted solely of the two primary compounds, Brilacidin and related compounds, and Delparantag and related compounds, and certain other tangible assets. The Company did not acquire the right to any employees previously involved with the technology, or research processes previously in place at Seller. The Company has therefore accounted for the transaction as an asset acquisition. | |||||
The purchase price was allocated to the identified tangible and intangible assets acquired based on their relative fair values, which were derived from their individual estimated fair values of $96,000 and $4,706,000, respectively. | |||||
The following table summarizes the purchase price allocation for the assets acquired: | |||||
Intangible assets – patents rights – Brilacidin, Delparantag and other related compounds | $ | 4,706,000 | |||
Tangible assets - Laboratory equipment and computer systems | $ | 96,000 | |||
These acquired tangible assets of $96,000 were expensed to research and development costs in September 2013. |
Patents_net
Patents, net | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Notes to Financial Statements | ' | |||||||||||
Note 5 - Patents, net | ' | |||||||||||
Patents, net consisted of the following (rounded to nearest thousand): | ||||||||||||
Useful life | 30-Jun-14 | June 30, | ||||||||||
2013 | ||||||||||||
Purchased Patent Rights– Brilacidin, and related compounds (note 4) | 14 | $ | 4,082,000 | $ | - | |||||||
Purchased Patent Rights–Delparantag and related compounds (note 4) | 12 | 480,000 | - | |||||||||
Purchased Patent Rights–Anti-microbial- surfactants and related compounds (note 4) | 12 | 144,000 | - | |||||||||
Patents – Kevetrin and related compounds | 17 | 542,000 | 11,000 | |||||||||
$ | 5,248,000 | $ | 11,000 | |||||||||
Accumulated amortization | 286,000 | 1,000 | ||||||||||
$ | 4,962,000 | $ | 10,000 | |||||||||
The patents are amortized on a straight-line basis over the estimated remaining useful lives of the assets, determined 12-17 years from the date of acquisition. | ||||||||||||
Amortization expense for the fiscal years ended June 30, 2014, 2013 and 2012, was approximately $285,000, $1,000 and $0, respectively. | ||||||||||||
At June 30, 2014, the amortization period for all patents was approximately 11.25 to 16.7 years. Future estimated annual amortization expenses are approximately $375,000 for years from 2015 to 2025, $333,000 for the year 2026, $323,000 for the year 2027, $86,000 for the year 2028 and $32,000 for Year 2029 and 2031. |
Property_plant_and_equipment_n
Property, plant and equipment net | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 6 - Property, plant and equipment net | ' | ||||||||
Property, plant and equipment, net consisted of the following (rounded to nearest thousand): | |||||||||
June 30, | June 30, | ||||||||
2014 | 2013 | ||||||||
Testing equipment | $ | 43,000 | $ | - | |||||
Accumulated depreciation | 4,000 | - | |||||||
$ | 39,000 | $ | - | ||||||
Depreciation expense for the fiscal years ended June 30, 2014, 2013 and 2012 was approximately $4,000, $0 and $0, respectively. |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 7 - Accrued Expenses | ' | ||||||||
Accrued expenses consisted of the following (rounded to nearest thousand): | |||||||||
June 30, | June 30, | ||||||||
2014 | 2013 | ||||||||
Accrued research and development consulting fees | $ | 46,000 | $ | 200,000 | |||||
Accrued rent (Note 10) – related parties | 53,000 | 60,000 | |||||||
Accrued interest – related parties | 237,000 | 294,000 | |||||||
Total | $ | 336,000 | $ | 554,000 | |||||
Accrued_Salaries_and_Payroll_T
Accrued Salaries and Payroll Taxes - Related Parties And Other | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 8 - Accrued Salaries and Payroll Taxes - Related Parties And Other | ' | ||||||||
Accrued salaries and payroll taxes consisted of the following (rounded to nearest thousand): | |||||||||
June 30, | June 30, | ||||||||
2014 | 2013 | ||||||||
Accrued salaries – related parties | $ | 3,032,000 | $ | 3,244,000 | |||||
Accrued payroll taxes – related parties | 149,000 | 152,000 | |||||||
Withholding tax – related parties | 29,000 | 31,000 | |||||||
Other | 14,000 | 4,000 | |||||||
Total | $ | 3,224,000 | $ | 3,431,000 | |||||
On December 29, 2010, the Company entered into employment agreements with its two executive officers, Leo Ehrlich, the Company’s Chief Executive Officer, and Krishna Menon, Chief Scientific Officer. Both agreements provide for a three year term with each executive receiving an annual base salary of $350,000 per year commencing January 1, 2011, with an annual increase of 10% for each year commencing January 2012. The Board, at its discretion, may increase the base salary based upon relevant circumstances. On January 1, 2014 the Board approved the extension of the employment agreements for a one year period with a 10% increase in salary from the calendar year 2013 annual salary of $423,500, to an annual salary of $465,850. | |||||||||
During the fiscal years ended June 30, 2014, 2013 and 2012, the total payroll paid to two executive officers was $889,000, $809,000 and $735,000, respectively. Out of these, the Company has included approximately $400,000, $364,000 and $331,000 of payroll expense paid to Mr. Krishna Menon in research and development expense, respectively. The remaining balance of $489,000, $445,000 and $404,000 was included in officers’ payroll and payroll tax expenses during the fiscal years ended June 30, 2014, 2013 and 2012, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
Note 9 - Commitments and Contingencies | ' | ||||
Legal | |||||
Formatech is a former vendor of ours which had received 184,375 shares of Cellceutix Class A Common Stock (“Cellceutix Stock”) for services that were not completed. Formatech had gone bankrupt while still in possession of the Cellceutix Stock. In July 2012, the US Bankruptcy Court allowed the trustee of the Formatech estate to sell the Cellceutix Stock. We have been advised that the stock has been sold in 2013 and the funds released to the secured creditors of Formatech. Cellceutix presently is in the unsecured creditors class and does not expect to receive any proceeds. On August 27, 2014 an offer has been made by the court trustee in the case of our litigation with the Estate of Formatech, offering Cellceutix $10,000 and the Board of Directors approved the acceptance of this offer to be collected by our counsel, Joe Evans. | |||||
Lease Commitments | |||||
Operating Leases | |||||
Cellceutix Corporation signed a lease extension agreement with Cummings Properties which began on October 1, 2013. The lease is for a term of five years ending on September 30, 2018, and requires monthly payments of $17,000. Innovative Medical Research Inc., a company owned by Leo Ehrlich and Dr. Krishna Menon, officers of Cellceutix, have co-signed the lease and will sublease 200 square feet of space previously used by Cellceutix and pay Cellceutix $900 per month. | |||||
Future minimum lease payments required under the non-cancelable operating lease are as follows (rounded to nearest thousand): | |||||
Year ending June 30, | |||||
2015 | $ | 207,000 | |||
2016 | 207,000 | ||||
2017 | 207,000 | ||||
2018 | 207,000 | ||||
2019 | 54,000 | ||||
Total minimum payments | $ | 882,000 | |||
Rent expense, net of lease income, under this operating lease agreement was approximately $162,000, $11,000 and $11,000 for the years ended June 30, 2014, 2013 and 2012, respectively. Before September, 2013, the Company paid rent to KARD for share of office space and details are shown at Note 10. Related Party Transactions. | |||||
Contractual Commitments | |||||
Clinical Trial Agreements between the Company and Contract Research Organizations- ABSSSI Trial | |||||
In December 2013, the Company entered into Clinical Trial Agreements with a Contract Research Organization (“CRO”). Terms include the Company making an upfront study advance of approximately $460,000 to the CRO and seven additional similar monthly payments to the CRO while the study is actively recruiting and treating patients. The advance will be earned as subjects are randomized into the Study. The Company has other terms with the CRO which allow for a bonus payment of $125,000, which the CRO has met; a non-refundable administrative start-up cost of $12,500 per Study Site; payment to CRO for pass-through costs within thirty days of receipt of invoice and third-party documentation from CRO; and pass-through costs which are subject to a 15% invoicing fee. | |||||
Starting from December 2013 to June 30, 2014, the Company expensed approximately $1.87 million related to this CRO, and recorded the expenses under research and development costs in the statements of operations. | |||||
Clinical Trial Agreements between the Company and Contract Research Organizations- Phase 1 Trial | |||||
In December 2013, the Company entered into a Clinical Trial Agreement with a Contract Research Organization (“CRO”) to conduct a Phase 1 Pharmacokinetic and Bioequivalence study for the Company. The Company has agreed to pay the CRO approximately $250,000 for this study. | |||||
Starting from December 2013 to June 30, 2014, the Company expensed approximately $96,000 related to this CRO, and recorded the expenses under research and development costs in the statements of operations. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 10 - Related Party Transactions | ' |
Office Lease | |
Dr. Menon, the Company’s principal shareholder, President, and Director, also serves as the Chief Operating Officer and Director of Kard Scientific (“KARD”). On December 7, 2007, the Company began renting office space from KARD, on a month to month basis for $900 per month. This continued through August 2013 and since September 1, 2013, the Company no longer leases space from Kard. For the years ended June 30, 2014, 2013 and 2012, the Company has included approximately $1,800, $10,800 and $10,800 of rent expense paid to KARD in general and administrative expenses, respectively. At June 30, 2014 and June 30, 2013, rent payables to KARD of approximately $53,000 and $60,000, respectively, were included in accrued expenses. | |
In September 2013, Cellceutix Corporation signed a lease extension agreement with Cummings Properties for the company’s offices and laboratories at 100 Cummings Center, Suite 151-B Beverly, MA 01915. The lease is for a term of five years from October 1, 2013 to September 30, 2018 and requires monthly payments of approximately $17,000. Cellceutix had taken over the space occupied by KARD. In addition, Innovative Medical Research Inc., (“Innovative Medical”) a company owned by Leo Ehrlich and Dr. Krishna Menon, officers of Cellecutix has co-signed the lease and will rent approximately 200 square feet of office space, the space previously used by Cellceutix and will pay Cellceutix $900 per month , the same amount Cellceutix previously paid KARD. Innovative Medical paid total rent of $9,000 to Cellceutix from September 1, 2013 to June 30, 2014 and the rental payment was offset with the accrued rent owed to KARD. | |
Clinical Studies | |
As of September 28, 2007 the Company engaged KARD to conduct specified pre-clinical studies. The Company did not have an exclusive arrangement with KARD. All work performed by KARD needed prior approval by the executive officers of the Company, and the Company retained all intellectual property resulting from the services by KARD. The Company has now developed its own research study capabilities and no longer uses KARD. At June 30, 2014 and June 30, 2013, the accrued research and development expenses to KARD of approximately $1,686,000 was included in accounts payable. |
Note_PayableRelated_Party
Note Payable-Related Party | 12 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 11 - Note Payable - Related Party | ' |
During the year ended June 30, 2010, Mr. Ehrlich loaned the Company a total of approximately $973,000. A condition for this note was that the Ehrlich Promissory Note A and Ehrlich Promissory Note B be replaced with a new note, Ehrlich Promissory Note C. The Ehrlich Promissory Note C is an unsecured demand note that bears 9% simple interest per annum and is convertible into the Company’s common stock at $0.50 per share. The note requires that the interest rate on the amounts due on Ehrlich Promissory Notes A and B be changed retroactively, beginning October 1, 2009, to 9%. On April 1, 2011, the Company amended the Ehrlich Promissory Note C and agreed to retroactively convert accrued interest of approximately $97,000 through December 31, 2010 into additional principal. During the year ended June 30, 2011, Mr. Ehrlich loaned the Company an additional approximately $997,000 which brought the total balance of the demand note to approximately $2,002,000. During the year ended June 30, 2012, Mr. Ehrlich loaned the Company an additional $20,000 which brought the balance of the demand note to approximately $2,022,000. | |
On May 8, 2012, the Company did not have the ability to repay the Ehrlich Promissory Note C loan and agreed to change the interest rate on the outstanding balance of principle and interest of approximately $2,248,000, as of March 31, 2012, from 9% simple interest to 10% simple interest, and the Company issued 2,000,000 Equity Incentive Options exercisable at $0.51 per share equal to 110% of the closing bid price of $0.46 per share on May 7, 2012. Options are valid for ten (10) years from the date of issuance. | |
At June 30, 2014 and June 30, 2013, approximately $237,000 and $294,000 was accrued as interest expense on this note. As of June 30, 2014 and 2013, principal balances of the demand note was approximately $2,022,000 and $2,022,000, respectively. |
Weighted_Average_Shares_Outsta
Weighted Average Shares Outstanding | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 12 - Weighted Average Shares Outstanding | ' | ||||||||||||
Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows: | |||||||||||||
Years Ended June 30, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average shares outstanding-basic | 105,044,985 | 94,980,552 | 90,159,045 | ||||||||||
Dilutive options and restricted stock | - | - | - | ||||||||||
Weighted average shares outstanding-diluted | 105,044,985 | 94,980,552 | 90,159,045 | ||||||||||
Antidilutive securities not included: | |||||||||||||
Options | 43,485,670 | 43,774,022 | 45,855,288 | ||||||||||
Warrants | 2,448,000 | 5,571,084 | 5,719,754 | ||||||||||
45,933,670 | 49,345,106 | 51,575,042 | |||||||||||
Stock_Options_and_Warrants
Stock Options and Warrants | 12 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Note 13 - Stock Options and Warrants | ' | ||||||||||||||||
Consulting Agreement | |||||||||||||||||
On April 1, 2009, the Company entered into an agreement, subsequently amended, with a Consultant to assist the Company’s Chief Scientific Officer to organize, manage and display data from animal studies as well as information relating to Active Pharmaceutical Ingredients and formulations of the Company’s products through November 2010. The Consultant was compensated at the rate of $4,000 per month payable on the last day of each month. In addition, at the end of each month of services provided, the Consultant is granted options to purchase 10,000 shares of Company’s common stock. Effective September 1, 2010, the Company has extended the current agreement and beginning in August 2010, the monthly fee was increased to $5,000. The monthly fee was increased to $6,000 beginning in November 2012. The remainder of the agreement remains unchanged. Through June 30, 2013, the Consultant had been awarded a total of 480,000 options to purchase common stock valued at inception approximately $284,000 to be vested over one year from date of issuance. Effective April 1, 2013, the consulting agreement was terminated and the consultant was employed as an employee. For the fiscal years ended June 30, 2014, 2013 and 2012, the Company has expensed $54,000, $217,000 and $65,000, respectively, to professional fees expense, related to these options and remeasurement. | |||||||||||||||||
Stock Options | |||||||||||||||||
On April 5, 2009 the Board of Directors of the Registrant adopted the 2009 Stock Option Plan (“the Plan”). The Plan permits the grant of 2,000,000 shares of both Incentive Stock Options (“ISOs”), intended to qualify under section 422 of the Code, and Non-Qualified Stock Options. | |||||||||||||||||
Under the 2010 Equity Incentive Plan the total number of shares of Common Stock reserved and available for issuance under the Plan shall be 45,000,000 shares. Shares of Common Stock under the Plan (“Shares”) may consist, in whole or in part, of authorized and unissued shares or treasury shares. The term of each Stock Option shall be fixed by the Committee; provided, however, that an Incentive Stock Option may be granted only within the ten-year period commencing from the Effective Date and may only be exercised within ten years of the date of grant (or five years in the case of an Incentive Stock Option granted to an optionee who, at the time of grant, owns Common Stock possessing more than 10% of the total combined voting power of all classes of voting stock of the Company (“10% Shareholder”). | |||||||||||||||||
On April 1, 2014 the Board of Directors approved a stock option grant, for services rendered from January 7, 2014 to July 6, 2014, to a consultant to purchase 40,000 shares of common stock exercisable at $1.64 per share. The option was vested on April 1, 2014,the option life is 5 years and will expire on March 31, 2019. In addition, the Company will pay the consultant $20,000 per month during the six month period from January 7, 2014 to July 6, 2014. The total value of this 40,000 shares of stock option was $55,396 and charged to additional paid-in capital on April 1, 2014. The assumptions we used in the Black Scholes option-pricing model were disclosed as below. | |||||||||||||||||
The fair value of options granted for the years ended June 30, 2014, 2013 and 2012 was estimated on the date of grant using the Black Scholes model that uses assumptions noted in the following table. | |||||||||||||||||
Year Ended June 30 | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected term (in years) | 5-Mar | 10-May | 10-Mar | ||||||||||||||
Expected stock price volatility | 91.25% - 124.94 | % | 133.51% - 137.33 | % | 138.64% - 148.15 | % | |||||||||||
Risk-free interest rate | 0.9% – 1.98 | % | 0.55% – 1.98 | % | 0.43% – 3.0 | % | |||||||||||
Expected dividend yield | 0 | 0 | 0 | ||||||||||||||
The following table summarizes all stock option activity under the plans: | |||||||||||||||||
Number of | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Options | Exercise Price | Remaining Contractual Life (Years) | Intrinsic | ||||||||||||||
Value | |||||||||||||||||
Outstanding at June 30, 2011 | 39,042,500 | $ | 0.12 | 9.4 | $ | 24,003,000 | |||||||||||
Granted | 2,235,000 | 0.52 | 9.47 | ||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited/expired | - | - | |||||||||||||||
Outstanding at June 30, 2012 | 41,277,500 | $ | 0.14 | 8.46 | $ | 21,186,000 | |||||||||||
Granted | 120,000 | 1.09 | |||||||||||||||
Exercised | (2,255,000 | ) | 0.12 | ||||||||||||||
Forfeited/expired | - | ||||||||||||||||
Outstanding at June 30, 2013 | 39,142,500 | $ | 0.14 | 7.47 | $ | 64,169,000 | |||||||||||
Granted | - | - | |||||||||||||||
Exercised | (25,000 | ) | 0.2 | ||||||||||||||
Forfeited/expired | (150,000 | ) | 0.23 | ||||||||||||||
Outstanding at June 30, 2014 | 38,967,500 | $ | 0.14 | 6.5 | $ | 59,613,000 | |||||||||||
Exercisable at June 30, 2014 | 38,967,500 | $ | 0.14 | 6.5 | $ | 59,613,000 | |||||||||||
The exercise of 25,000 Common Stock options at $0.20 per share at $5,000 on March 18, 2014 was disclosed at Note 14 Equity Transactions. | |||||||||||||||||
The Company recognized approximately $548,000, $519,000 and $2,704,000 of stock based compensation costs related to stock and stock options awards for the years ended June 30, 2014, 2013 and 2012, respectively. | |||||||||||||||||
Stock Warrants | |||||||||||||||||
For the fiscal year ended June 30, 2012 | |||||||||||||||||
During the months of October, November and December 2011, warrants to purchase 2,500,000 shares of the Company’s Class A common stock were issued to an investor pursuant to his purchase of 2,500,000 shares of the Company’s Class A common stock at $0.40 per share. Under ASC 815-40-25, the fair value of these warrants should be reported as a liability, Pursuant to the Warrant Agreement, because there is currently no effective registration statement covering the shares of common stock underlying these warrants, these warrants are currently subject to a cashless exercise whereby the warrant holders may surrender their warrants to the company in exchange for shares of common stock. The number of shares of common stock into which a warrant would be exchangeable in such a cashless exercise depends on both the exercise price of the warrants and the market price of the common stock, each at or near the time of exercise. Because both of these factors are variable, it is possible that the company could have insufficient authorized shares to satisfy a cashless exercise. In this scenario, if the company were unable to obtain shareholder approval to increase the number of authorized shares, the company could be obligated to settle such a cashless exercise with cash rather than by issuing shares of common stock. Further, ASC 815-40-25 requires that we record the potential settlement obligation at each reporting date using the current estimated fair value of the warrants, with any changes being recorded through our statement of operations. The warrants were valued at $417,608 at the time of issuance and recorded as a liability. At December 31, 2011, the warrants were valued at $1,327,500 and the warrant liability was increased by $909,892. On January 12, 2012, the subscription agreement was modified to remove the cashless exercise provision, and provide for “piggy-back” registration rights. The warrants were valued as of January 12, 2012 and the value reduced by $470,000. The remaining $857,000 of warrant value was reclassified from a liability to equity. | |||||||||||||||||
In June 2012, warrants to purchase 255,754 shares of the Company’s Class A common stock were issued to an investor pursuant to the conversion of 10,000 shares of Series A Convertible Preferred Stock into 255,754 shares of the Company’s Class A common stock at $0.39 per share of common stock. The exercise price of the warrants is $0.39 per share. | |||||||||||||||||
For the fiscal year ended June 30, 2013 | |||||||||||||||||
On March 5, 2013 the Company issued 370,500 Class A common shares par value $.0001 to each of two warrant holders upon exercise of Common Stock Purchase Warrants exercisable at $0.25 per share. The Company received an aggregate of $185,250. The issuance was exempt from registration under Section 4(2) of the Securities Act. | |||||||||||||||||
For the fiscal year ended June 30, 2014 | |||||||||||||||||
From July 19, 2013 to June 30, 2014, the Company issued 2,300,000 Class A common shares par value $.0001 to a warrant holder upon exercise of Common Stock Purchase Warrants exercisable at $1 per share. The Company received an aggregate of $2,300,000. The issuance was exempt from registration under Section 4(2) of the Securities Act. In addition, on January 3, 2014, the Company issued 200,000 Class A common shares par value $.0001 to same warrant holder upon exercise of Common Stock Purchase Warrants exercisable at $1 per share and received an aggregate of $200,000 (See Note 14 Equity Transactions). | |||||||||||||||||
On December 31, 2013, the Company issued 848,084 Class A common shares par value $.0001 to two warrant holders upon exercise of Common Stock Purchase Warrants exercisable at the range from $0.39 to $0.53 per share, with total of $400,000. The Company received $400,000 as a Subscription Receivable on April 1, 2014. The issuance was exempt from registration under Section 4(2) of the Securities Act. | |||||||||||||||||
Extension of the expiration date of an aggregate of 2,223,000 Series B, Series C, and Series D common share purchase warrants | |||||||||||||||||
On December 1, 2013, 2,223,000 Series B, Series C, and Series D common share purchase warrants issued by the Company were modified to extend their maturity date to December 31, 2015. As the Company is in an accumulated deficit position, the deemed dividend was charged against additional paid-in-capital for common shares, there being no retained earnings from which to declare a dividend. The net income (loss) attributable to common shareholders reflects both the net income (loss) and the deemed dividend. | |||||||||||||||||
The deemed dividend of $1,980,000 was computed as the incremental value of the modified warrants over the unmodified warrants on the modification date using a per share price of the range from $0.50 to $1.50 per share which were the contemporaneous private placement offering price. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows: | |||||||||||||||||
Average risk-free interest rate | 0.29 | % | |||||||||||||||
Average expected life- years | 2 | ||||||||||||||||
Expected volatility | 55.22 | % | |||||||||||||||
Expected dividends | 0 | ||||||||||||||||
On January 23, 2014, the Company issued 25,000 shares of restricted common stock and 25,000 common share purchase warrants exercisable at $1.79 a share to one consultant. The shares vested on March 31, 2014, valued at approximately $45,000 and the option life is three years and valued at approximately $29,000. | |||||||||||||||||
The following table summarizes stock warrants: | |||||||||||||||||
Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate | ||||||||||||||
Intrinsic | |||||||||||||||||
Value | |||||||||||||||||
Outstanding at June 30, 2011 | 2,964,000 | $ | 0.81 | 2.51 | $ | 408,000 | |||||||||||
Granted | 2,755,754 | 0.4 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited/expired | - | - | - | ||||||||||||||
Outstanding at June 30, 2012 | 5,719,754 | $ | 0.87 | 2.02 | $ | 475,000 | |||||||||||
Granted | 592,330 | 0.51 | 4.17 | ||||||||||||||
Exercised | (741,000 | ) | 0.25 | - | |||||||||||||
Forfeited/expired | - | - | - | ||||||||||||||
Outstanding at June 30, 2013 | 5,571,084 | $ | 0.92 | 1.43 | $ | 4,794,000 | |||||||||||
Extended | 2,223,000 | 1 | 1.5 | ||||||||||||||
Granted | 25,000 | 1.79 | 2.57 | ||||||||||||||
Exercised | (3,148,084 | ) | 1 | - | |||||||||||||
Expired | (2,223,000 | ) | 1 | - | |||||||||||||
Outstanding at June 30, 2014 | 2,448,000 | $ | 1.01 | 1.43 | $ | 1,623,000 | |||||||||||
Exercisable at June 30, 2014 | 2,448,000 | $ | 1.01 | 1.43 | $ | 1,623,000 |
Equity_Transactions
Equity Transactions | 12 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 14 - Equity Transactions | ' |
For the fiscal year ended June 30, 2012 | |
Series A Convertible Preferred Shares Subscription Agreement | |
On May 8, 2012, the Company entered into a subscription agreement for Series A Convertible Preferred shares with an accredited investor for an aggregate of $1,000,000. The subscription agreement provides for installment funding Amounts, at Cellceutix’s discretion, to take place every thirty days after initial closing date for an amount of the lesser of (i) $75,000 or (ii) twenty five (25%) per cent of the dollar value of the total volume traded during the preceding 22 trading days. The Series A Preferred Shares are convertible into common stock at the lesser of 85% of the closing bid price on the date of prior to each closing, or 85% of the lowest bid price for the fifteen (15) days prior to conversion. At no time may a holder of shares of Series A Preferred Stock convert shares of the Series A Preferred Stock if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by such holder at such time, the number of shares of Common Stock which would result in such holder beneficially owning more than 9.99% of all of the Common Stock outstanding. Additionally, for each common share issued upon conversion of Series A preferred share, a five year common stock purchase warrant is issued to the Subscriber. The warrant is exercisable at the conversion price of the common shares issued. The fair value of the common stock into which the Series A Preferred Stock is convertible will exceed the price at which the common stock will be issued on the date of issuance of the preferred stock. The amount by which the fair value of the common stock exceeds the issue price of the common stock is a beneficial conversion feature. The Company will recognize the beneficial conversion feature as a one-time, non-cash deemed dividend to the holders of the Series A Preferred Stock on the date of issuance, which is the date the preferred stock first became convertible. The Series A Convertible Preferred shares do not pay dividends. The Common shares underlying the Series A Preferred Shares and the common stock purchase warrants are subject to piggy back registration rights and were registered by the Company. To date an aggregate of $400,000 was funded, and the Company issued an aggregate of 848,084 common shares and 848,084 common stock purchase warrants. The subscription for the remaining $600,000 subscription agreement was mutually terminated between the parties on January 8, 2013. | |
On June 25, 2012 the subscriber converted 10,000 Preferred Shares equal to $100,000 face value at $0.39 per share based on 85% of the closing bid price on May 7, 2012 of $0.46. The company issued to the subscriber 255,754 shares of Cellceutix common stock. In connection thereto the Company issued 255,754 warrants to purchase common shares of Cellceutix Corporation at $0.39 per share valid for five years. | |
Issuance of Common Stock to Consultants For Services | |
On August 29, 2011, the Company issued 100,000 shares of Class A common stock to consultants for services rendered in the first quarter of fiscal year 2012.The 100,000 shares of common stock are valued at a total of $38,000. | |
On September 9, 2011, the company issued 471,518 common shares of the company stock to White Star LLC and 235,759 common shares to Dahlia Nordlicht upon conversion of convertible debentures. | |
On November 8, 2011, the Company issued a total of 125,000 shares of Class A common stock to two consultants and a member of its scientific advisory board valued at approximately $51,000. | |
On January 11, 2012, the Company issued a total of 200,000 shares of Class A common stock to a consultant valued at $90,000. | |
On February 2, 2012 the Company paid $300,000 to Mr. Evans and cancelled 1,380,000 shares of common stock related to Mr. Evans settlement agreement. | |
On April 26, 2012, the Company issued 300,000 shares of Class A common stock to a consultant valued at $138,000. | |
On May 3, 2012, the Company issued a total of 100,000 shares of Class A common stock to two consultants valued at $49,000. | |
On May 29, 2012, the Company issued 25,000 shares of Class A common stock to a consultant valued at approximately $13,000. | |
On June 29, 2012, the Company issued 50,000 shares of Class A common stock to a consultant valued at approximately $31,000. | |
Issuance of Common Stock For Charity Donation | |
On March 7, 2012, the Company issued a total of 265,228 shares of Class A common stock as charitable contributions valued at approximately $138,000. | |
For the fiscal year ended June 30, 2013 | |
Series A Convertible Preferred Shares Subscription Agreement | |
From July 3, 2012 to September 20, 2012, four tranche funding made to purchase Series A Convertible Preferred shares in the amount of $75,000 each for the purchase 7,500 Series A Convertible Preferred Shares, with total of $300,000. | |
From August 1, 2012 to September 24, 2012 the subscribers converted 30,000 Preferred Shares equal to $300,000 face value at $0.485 to $0.527 per share based on 85% of the closing bid price on July 25, 2012 of $0.59 to August 31, 2012 of $0.62. The company issued to the subscribers 592,230 shares of Cellceutix Class A common stock. In connection thereto the Company issued 592,230 warrants to purchase Class A common shares of Cellceutix Corporation at a range of $0.485 to $0.527 per share and is valid for five years. The shares and the warrants were subject to piggy back registration rights and were registered in the Company’s Form S-3 filed January 18, 2013. | |
$10 million Class A Common Stock Purchase Agreement with Aspire Capital Fund, LLC- December 2012 Agreement | |
On December 6, 2012, the Company entered into a Class A Common Stock Purchase Agreement with Aspire Capital Fund, LLC, which provides that upon meeting the terms of the agreement, Aspire Capital is committed to purchase up to an aggregate of $10,000,000 of our shares of Class A Common Stock over the approximately 36-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, the Company issued to Aspire Capital 336,625 shares of our Class A Common Stock as a commitment fee and sold to Aspire Capital 112,208 shares of Class A Common Stock for $100,000.The deferred offering costs were fully amortized during the year ended June 30, 2013 as a significant amount of funding was received and the remaining funding is reasonably assured. | |
Concurrently with entering into the Purchase Agreement, the Company agreed to file one or more registration statements as permissible and necessary under the Securities Act of 1933, as amended, or the Securities Act, for the sale of shares of our Class A Common Stock that have been and may be issued to Aspire Capital under the Purchase Agreement. On January 22, 2012, the Company filed a Form S-3 registration statement and the registration statement was declared effective by the SEC on February 14, 2013. Thereafter, on every and any business day selected by the Company, the Company shall have the right to direct Aspire Capital Fund to purchase (each such purchase, a “Regular Purchase”), up to 100,000 shares on each and any business day chosen by the Company; however, in any event, the amount of a Regular Purchase will not exceed $500,000 per business day. The purchase price for Regular Purchases (the “Regular Purchase Price”), shall be equal to the lesser of: (i) the lowest sale price of the shares on the purchase date, or (ii) the average of the three (3) lowest closing sale prices of the shares during the twelve (12) business days prior to the purchase date. The Regular Purchase Price will be known at the time of notice and before any shares are sold to Aspire Capital Fund. | |
In addition to the Regular Purchases, with one day’s prior written notice, the Company shall also have the right to require the ACF Investor to purchase up to an additional 20% of the trading volume of the shares for the next business day at a purchase price (the “VWAP Purchase Price”), equal to the lesser of: (i) the closing sale price of the shares on the purchase date, or (ii) ninety-five percent (95%) of the next business day’s volume weighted average price (each such purchase, a “VWAP Purchase”). The Company shall have the right, in its sole discretion, to determine a maximum number of shares and set a minimum market price threshold for each VWAP Purchase. The Company can only require a VWAP Purchase if (a) the closing sale price for the Company Class A common shares on the notice day for the VWAP Purchase is higher than $0.50, and (b) the Company has also submitted a Regular Purchase on the notice date for the VWAP Purchase. There are no limits on the number of VWAP Purchases that the Company may require. | |
Aspire Capital Fund has no right to require any sales by the Company, but is obligated to make purchases from the Company as the Company directs it in accordance with the Purchase Agreement. The Company can also accelerate the amount of Class A Common Stock to be purchased under certain circumstances. There are no limitations on use of proceeds, financial or business covenants, restrictions on future funding, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. | |
The Company is never under any obligation to sell shares to Aspire Capital Fund. Aspire Capital Fund has no rights to require the Company to sell shares. | |
During the fiscal year ended June 30, 2014 and 2013, the Company, under its prior purchase agreement with Aspire, had completed sales to Aspire totaling 3,204,537 shares and 2,712,208 shares of common stock generating gross proceeds of approximately $10,000,000 and $4,383,000, respectively. | |
Issuance of Common Stock to Consultants For Services | |
On July 25, 2012, the Company issued a total of 25,000 Class A common shares to consultants for services, valued at approximately $15,000 based on the closing bid price as quoted on the OTC Bulletin Board on July 24, 2012 at $.59 per share. | |
On August 26, 2012, the Company issued a total of 50,000 Class A common shares to consultants for services, valued at $30,000 based on the closing bid price as quoted on the OTC Bulletin Board on August 25, 2012 at $0.60 per share. | |
On October 24, 2012 the Company issued a total of 50,000 Class A common shares to consultants for services through December 31, 2012, valued at approximately $44,000 based on the closing bid price as quoted on the OTC Bulletin Board on October 23, 2012 at $0.87 per share. | |
On June 30, 2013, the Company issued 5,000 Class A common shares to a consultant for service, valued at $8,900 based on the closing bid price as quoted on the OTC Bulletin Board on June 30, 2013 at $1.78 per share. | |
Issuance of Common Stock For Charity Donation | |
On May 31, 2013, the Company issued 100,000 Class A common shares to a charity donation, valued at $220,000 based on the closing bid price as quoted on the OTC Bulletin Board on May 31, 2013 at $2.20 per share. | |
Issuance of Common Stock by Exercise of 2,255,000 Common Stock Options | |
On September 7, 2012 a consultant exercised their option to purchase 250,000 shares of Class A common shares at $0.20, resulting in a payment to the Company of $50,000 and the issuance of 250,000 shares of Class A common stock. | |
On June 16, 2013, a consultant exercised his option to purchase 5,000 shares of Class A common shares at $0.25, resulting in a payment to the Company of $1,250 and the issuance of 5,000 shares of Class A common stock. | |
On December 19, 2012 the Company issued 320,000 Class A common shares par value $.0001 to a consultant upon exercise of stock options granted to him pursuant to the Company’s 2009 and 2010 Equity Incentive Plans of which 80,000 were granted on March 2, 2009, exercisable at $0.14 per share; 200,000 were granted on February 8, 2011, exercisable at $0.20 per share; and 40,000 were granted on February 17, 2011 exercisable at $.20 per share. The Company received approximately $59,000. | |
On December 21, 2012 the Company issued 1,680,000 Class A common shares to a consultant upon exercise of Stock Options granted on December 29, 2010 under the Company’s 2010 Equity Incentive Plan and exercisable at $0.10 per share. The Company received $168,000. | |
For the fiscal year ended June 30, 2014 | |
Polymedix Trustee | |
On September 4, 2013, the Company purchased substantially all of the assets of Polymedix Inc, and Polymedix Pharmaceuticals, Inc. from the U.S. Bankruptcy Court. The purchase price included the issuance of 1,400,000 shares of the Company’s Class A common stock at $1.93 and recorded at $1,302,000, net of $1,400,000 of Redeemable Common Stock Liability under Current Liability. | |
$20 million Class A Common Stock Purchase Agreement with Aspire Capital Fund, LLC – October 2013 Agreement | |
On October 25, 2013, we terminated a previous agreement with Aspire Capital Fund, LLC, an Illinois limited liability company (Aspire Capital), and entered into a new Class A Common Stock Purchase Agreement (the “Purchase Agreement”) with Aspire Capital, which provides that upon meeting the terms of the agreement, Aspire Capital is committed to purchase up to an aggregate of $20,000,000 of our shares of Class A Common Stock over the approximately 36-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, the Company issued to Aspire Capital 210,523 shares of our Class A Common Stock as a commitment fee. The commitment fee of $373,000 will be amortized as the funding is received. The amortized amount of $77,000 was debited to additional paid-in capital. The unamortized portion is carried on the balance sheet as deferred offering costs and was $295,000 at June 30, 2014. | |
Concurrently with entering into the Purchase Agreement, the Company agreed to file one or more registration statements as permissible and necessary under the Securities Act of 1933, as amended, or the Securities Act, for the sale of shares of our Class A Common Stock that have been and may be issued to Aspire Capital under the Purchase Agreement. On November 4, 2013, the Company filed a Form S-3 registration statement and the registration statement was declared effective by the SEC on November 15, 2013. | |
Under the Purchase Agreement, on any trading day selected by Cellceutix which the closing sale price of our Class A Common Stock exceeds $0.25 per share, we may direct Aspire Capital to purchase up to 200,000 shares of our Class A Common Stock per trading day. The Purchase Price of such shares is equal to the lesser of a) the lowest sale price of our Class A Common Stock on the purchase date; or b) the arithmetic average of the three lowest closing sale prices for our Class A Common Stock during the twelve consecutive trading days ending on the trading day immediately preceding the purchase date. | |
In addition, on any date on which we submit a Purchase Notice to Aspire Capital for purchase of at least 100,000 Purchase Shares and the closing sale price of our stock is equal to or greater than $0.50 per share, we also have the right to direct Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the our Class A Common Stock traded on the OTC Bulletin Board on the next trading day, subject to the VWAP Purchase Share Volume Maximum and the VWAP Minimum Price Threshold, which is equal to the greater of (a) 90% of the closing price of our Class A Common Stock on the business day immediately preceding the VWAP Purchase Date or (b) such higher price as set forth by the Company in the VWAP Purchase Notice. The VWAP Purchase Price of such shares is the lower of (a) the Closing Sale Price on the VWAP Purchase Date; or 95% of the volume-weighted average price for our Class A Common Stock traded on the OTC Bulletin Board; and (b)on the VWAP Purchase Date, if the aggregate shares to be purchased on that date have not exceeded the VWAP Purchase Share Volume Maximum or during that portion of the VWAP Purchase Date until such time as the sooner to occur of (i) the time at which the aggregate shares traded on the OTC Bulletin Board exceed the VWAP Purchase Share Volume Maximum or (ii) the time at which the sale price of our Class A Common Stock falls below the VWAP Minimum Price Threshold. | |
The purchase price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the trading day(s) used to compute the purchase price. We may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed. | |
Under the Purchase Agreement, we and Aspire Capital may not affect any sales of shares of our Class A Common Stock under the Purchase Agreement on any trading day that the closing sale price of our Class A Common Stock is less than $0.25 per share. | |
The Company is never under any obligation to sell shares to Aspire Capital Fund. Aspire Capital Fund has no rights to require the Company to sell shares. | |
During the period from October 25, 2013 to June 30, 2014, the Company had completed sales to Aspire totaling 2,500,000 shares of common stock generating gross proceeds of approximately $4.2 million. As of June 30, 2014, a balance of $15.8 million remains and is available under the financing arrangement. From July 1, 2014 to September 10, 2014, the Company has generated additional proceeds of approximately $3,215,000 under the Common Stock Purchase Agreement with Aspire from the sale 1,900,000 shares of its common stock. | |
Issuance of Common Stock by Exercise of Common Stock Purchase Warrants | |
During the year ended June 30, 2014, the Company issued 2,300,000 Class A common shares par value $.0001 to a warrant holder upon exercise of Common Stock Purchase Warrants exercisable at $1 per share. The Company received an aggregate of $2,300,000 from the exercise of these warrants. The issuance was exempt from registration under Section 4(2) of the Securities Act. | |
On December 31, 2013, the Company issued 848,084 Class A common shares par value $.0001 to two warrant holders upon exercise of Common Stock Purchase Warrants exercisable at the range from $0.39 to $0.53 per share, with a total exercise price of $400,000. The issuance was exempt from registration under Section 4(2) of the Securities Act. | |
Issuance of Common Stock by Exercise of Common Stock Options | |
On March 18, 2014, the Company issued 25,000 Class A common shares par value $.0001 upon exercise of 25,000 Common Stock options at $0.20 per share, for total proceeds of $5,000. | |
Issuance of Common Stock to Consultants and Employees | |
On December 17, 2013, the Company issued 5,000 shares of restricted Class A common shares par value $.0001 to one consultant valued at approximately $9,000 for prior services. | |
On December 31, 2013, the Company issued 50,000 shares of restricted Class A common shares par value $.0001 to two consultants valued at approximately $105,000 for prior services. | |
On December 31, 2013, the Company issued 60,000 shares of restricted Class A common shares par value $.0001 to six employees as a year-end bonus valued at approximately $96,000. | |
On October 17, 2013, the Board of Directors approved the stock grant of 35,000 shares of restricted Class A common stock to be issued and vested on January 6, 2014 to a consultant valued at $70,000. | |
On January 23, 2014, the Company issued 25,000 shares of restricted Class A common stock and 25,000 stock options exercisable at $1.79 per share to a consultant. The shares were granted on January 23, 2014 and vested on March 31, 2014 were valued at $44,750. The option life is three years and valued at approximately $29,000. | |
On January 23, 2014, the Company further issued 25,000 shares of restricted Class A common shares par value $.0001 at $1.79 per share to a consultant. The shares were granted on January 23, 2014, vested on March 31, 2014, and were valued at approximately $45,000. | |
On March 31, 2014, the Company issued 25,000 shares of restricted Class A common shares, par value $.0001, to a consultant for prior services rendered. The shares were granted and vested on March 31, 2014. The shares were valued at $41,000. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 15 - Income Taxes | ' | ||||||||||||
Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the financial statements. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized as income or expense in the period that included the enactment date. | |||||||||||||
The Company has incurred operating losses since its inception and, therefore, no tax liabilities have been incurred for the periods presented. The amount of unused tax losses available to carry forward and apply against taxable income in future years totaled approximately $17,195,000 at June 30, 2014. The loss carryforwards expire beginning in 2028. Internal Revenue Code Sec. 382 places limitations on the utilization of net operating losses. Due to the potential limitation and the Company’s historical losses, the Company has placed a full valuation allowance. The valuation allowance increased by approximate $3,619,000 at June 30, 2014, $1,359,000 at June 30, 2013 and $1,278,000 at June 30, 2012. | |||||||||||||
The income tax provision benefit differs from the amount of tax determined by applying the Federal statutory rate as follows: | |||||||||||||
June 30, | June 30, | June 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Book income at federal statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State income tax, net of federal tax benefit | 5.33 | % | 5.51 | % | 4.72 | % | |||||||
Change in valuation allowance | (43.87 | %) | (42.15 | %) | (25.86 | %) | |||||||
Research and development credit | 7.69 | % | 4.68 | % | 1.28 | % | |||||||
Permanent difference | (2.62 | %) | (1.59 | %) | (6.22 | %) | |||||||
Others - net | (0.53 | %) | (0.45 | %) | (7.92 | %) | |||||||
Total | 0 | % | 0 | % | 0 | % | |||||||
There was no current or deferred provision or benefit for income taxes for the years ended June 30, 2014 and 2013. The components of deferred tax assets as of June 30, 2014 and 2013 are as follows (rounded to nearest thousand): | |||||||||||||
June 30, | June 30, | ||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax (liability) asset: | |||||||||||||
Net operating loss carry forwards | 6,839,000 | 3,256,000 | |||||||||||
Accrued payroll | $ | 1,265,000 | $ | 1,351,000 | |||||||||
Stock compensation | 1,567,000 | 1,964,000 | |||||||||||
Other | 164,000 | 212,000 | |||||||||||
Research and development credit | 936,000 | 370,000 | |||||||||||
$ | 10,771,000 | $ | 7,153,000 | ||||||||||
Valuation allowance | (10,771,000 | ) | (7,153,000 | ) | |||||||||
Total deferred taxes | $ | - | $ | - |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
Note 16 - Subsequent Events | ' |
Equity Transactions | |
From July 1, 2014 to September 10, 2014, the Company has generated additional proceeds of approximately $3,215,000 under the Common Stock Purchase Agreement with Aspire from the sale 1,900,000 shares of its common stock. | |
On July 11, 2014, the Company received an exercise notice from a warrant holder for exercise of 200,000 warrants and the Company received the $200,000 on July 11, 2014. | |
Contractual Commitments | |
Clinical Trial Agreements between the Company and Contract Research Organizations- Oral Mucositis Trial | |
On September 8, 2014, the Company entered into a Clinical Trial Project Work Agreement with a Contract Research Organization (“CRO”). Terms include the Company making an upfront study advance retainer of $142,500 to the CRO from which all CRO Services and Pass-Through Costs will be deducted. For the duration of the Study, each time the amount remaining in the retainer falls below $50,000, Cellceutix will pay to the CRO $50,000 within 15 days of such notice (invoice), increasing the available retainer to approximately $100,000. | |
Clinical Costs. The clinical costs (Site Fees) will be invoiced separately based on monthly grant management reporting which is payable within 15 days upon invoice receipt. The costs will be determined by the number of patients needed for completion of the study which is unknown at this time. The agreement includes budgets for a wide range of the number of patients which may be needed in the study. The approximate budget range is from $1.5 million to $3 million. | |
End of study. Within 60 days of the project’s completion date, the CRO will deliver to cellceutix a final accounting of the projects funding. Any unused funds will be returned to Cellceutix with 45 days of delivery of such final accounting. |
Selected_Quarterly_Results_of_
Selected Quarterly Results of Operations (unaudited) | 12 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||
Note 17 - Selected Quarterly Results of Operations (unaudited) | ' | ||||||||||||||||||||
A summary of the Company’s quarterly results of operations for the years ended June 30, 2014 and 2013 is as follows (rounded to nearest thousand, except for per share data): | |||||||||||||||||||||
Years Ended June 30, 2014 | |||||||||||||||||||||
Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Total | |||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||
Revenues | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Gross profit | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Net loss | $ | (977,000 | ) | $ | (1,596,000 | ) | $ | (2,334,000 | ) | $ | (3,340,000 | ) | $ | (8,247,000 | ) | ||||||
Net loss attributable to common stockholders (a) | $ | (977,000 | ) | $ | (3,576,000 | ) | $ | (2,334,000 | ) | $ | (3,340,000 | ) | $ | (10,227,000 | ) | ||||||
Loss per share attributable to common stockholders | |||||||||||||||||||||
- Basic | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.10 | ) | ||||||
- Diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.10 | ) | ||||||
Weighted average number of common shares | 100,678,604 | 104,640,788 | 106,542,850 | 108,386,580 | 105,044,985 | ||||||||||||||||
Years Ended June 30, 2013 | |||||||||||||||||||||
Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Total | |||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||||
Revenues | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Gross profit | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Net loss | $ | (469,000 | ) | $ | (749,000 | ) | $ | (867,000 | ) | $ | (1,140,000 | ) | $ | (3,224,000 | ) | ||||||
Net loss attributable to common stockholders (a) | $ | (681,000 | ) | $ | (749,000 | ) | $ | (867,000 | ) | $ | (1,140,000 | ) | $ | (3,436,000 | ) | ||||||
Loss per share attributable to common stockholders | |||||||||||||||||||||
- Basic | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | ||||||
- Diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | ||||||
Weighted average number of common shares | 92,496,542 | 93,507,421 | 96,091,495 | 97,882,446 | 94,980,552 | ||||||||||||||||
(a) Net loss attributable to common stockholders represents our net loss plus deemed dividends. Other than deemed dividends of $1,980,000 in quarter 2 of 2014 and $212,000 in quarter 1 of 2013, the net loss attributable to common stockholders was equal to our net loss for all other periods presented. |
Significant_Accounting_Policie1
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Significant Accounting Policies And Recent Accounting Pronouncements Policies | ' | ||||||||||||
Use of Estimates | ' | ||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, recoverability of long-lived assets, measurement of stock-based compensation, and the periods of performance under collaborative research and development agreements. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. | |||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||
Cash and cash equivalents consist of cash and short-term highly liquid investments purchased with original maturities of three months or less. There were no cash equivalents at June 30, 2014 and 2013. | |||||||||||||
Property, plant and Equipment | ' | ||||||||||||
Property and equipment are stated at cost, net of accumulated depreciation. Expenditures that extend the life, increase the capacity, or improve the efficiency of property and equipment are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation is recognized using the straight-line method over the following approximate useful lives: | |||||||||||||
Machinery and equipment 5 Years | |||||||||||||
Intangible Assets - Patents | ' | ||||||||||||
Costs incurred to file patent applications and acquired intangibles are capitalized when the Company believes that there is a high likelihood that the patent will be issued and there will be future economic benefit associated with the patent. These costs will be amortized on a straight-line basis over a 12 - 17 years life from the date of patent filing. All costs associated with abandoned patent applications are expensed. In addition, the Company will review the carrying value of patents for indicators of impairment on a periodic basis and if it determines that the carrying value is impaired, it values the patent at fair value. As of June 30, 2014 and 2013, carrying value of patent was approximately $4,962,000 and $10,000, respectively. Amortization expense for the fiscal years ended June 30, 2014, 2013 and 2012, was approximately $285,000, $1,000 and $0, respectively. | |||||||||||||
As of June 30, 2014, the Company has expensed the costs associated with obtaining patents that have not yet developed products nor which have gained market acceptance and the Company has or will let these patents go abandoned. For the fiscal years ended June 30, 2014, 2013 and 2012, the Company has charged to operations approximately $136,000, $29,000 and $99,000, respectively as patent expenses included in general and administration expenses. | |||||||||||||
In accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. During the fiscal years ended June 30, 2014, 2013 and 2012, no impairment expense was recorded. | |||||||||||||
Financial Instruments | ' | ||||||||||||
The Company’s financial instruments include cash, accounts payable and accrued liabilities. The carrying amounts of these financial instruments approximate their fair value, due to the short-term nature of these items. The fair value hierarchy has the following three levels: | |||||||||||||
Level 1—quoted prices in active markets for identical assets and liabilities. | |||||||||||||
Level 2—observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |||||||||||||
Level 3—unobservable inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability. | |||||||||||||
Certain Risks and Uncertainties | ' | ||||||||||||
Product Development | |||||||||||||
We devote significant resources to research and development programs in an effort to discover and develop potential future product candidates. The product candidates in our pipeline are at various stages of preclinical and clinical development. The path to regulatory approval includes three phases of clinical trials in which we collect data to support an application to regulatory authorities to allow us to market a product for treatment of a specified disease. There are many difficulties and uncertainties inherent in research and development of new products, resulting in a high rate of failure. To bring a drug from the discovery phase to regulatory approval, and ultimately to market, takes many years and significant cost. Failure can occur at any point in the process, including after the product is approved, based on post-market factors. New product candidates that appear promising in development may fail to reach the market or may have only limited commercial success because of efficacy or safety concerns, inability to obtain necessary regulatory approvals, limited scope of approved uses, reimbursement challenges, difficulty or excessive costs of manufacture, alternative therapies or infringement of the patents or intellectual property rights of others. Uncertainties in the FDA approval process and the approval processes in other countries can result in delays in product launches and lost market opportunities. Consequently, it is very difficult to predict which products will ultimately be submitted for approval, which have the highest likelihood of obtaining approval and which will be commercially viable and generate profits. Successful results in preclinical or clinical studies may not be an accurate predictor of the ultimate safety or effectiveness of a drug or product candidate. | |||||||||||||
Expenditures for research, development, and engineering of products are expensed as incurred. For the fiscal years ended June 30, 2014, 2013 and 2012, the Company incurred approximately $6,344,000, $1,510,000 and $633,000 of research and development costs, respectively. | |||||||||||||
Concentrations of Credit Risk | ' | ||||||||||||
All cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. | |||||||||||||
Income Taxes | ' | ||||||||||||
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||||||
The Company has generated net losses since inception and accordingly has not recorded a provision for income taxes. The deferred tax assets were primarily comprised of federal and state tax net operating loss, or NOL, carryforwards. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these tax assets, a full valuation allowance has been established to offset the deferred tax assets. Additionally, the future utilization of the NOL carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. If necessary, the deferred tax assets will be reduced by any carryforwards that expire prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. | |||||||||||||
The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. | |||||||||||||
The Company has identified its U.S. Federal income tax return and its State return in Massachusetts as its major tax jurisdictions. The fiscal 2012 and forward years are still open for examination. | |||||||||||||
Basic Earnings (Loss) per Share | ' | ||||||||||||
Basic and diluted earnings per share are computed based on the weighted-average common shares and common share equivalents outstanding during the period. Common share equivalents consist of stock options, warrants and convertible notes payable. Common share equivalents were excluded from the computation of diluted earnings per share for the years ended June 30, 2014, 2013 and 2012, because their effect is anti-dilutive (See note 12). | |||||||||||||
Accounting for Stock Based Compensation | ' | ||||||||||||
The stock-based compensation expense incurred by Cellceutix for employees and directors in connection with its stock option plan is based on the employee model of ASC 718, and the fair market value of the options is measured at the grant date. Under ASC 718 employee is defined as “An individual over whom the grantor of a share-based compensation award exercises or has the right to exercise sufficient control to establish an employer-employee relationship based on common law as illustrated in case law and currently under U.S.“tax regulations”. Our consultants do not meet the employer-employee relationship as defined by the IRS and therefore are accounted for under ASC 505-50. | |||||||||||||
ASC 505-50-30-11 (previously EITF 96-18) further provides that an issuer shall measure the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions as of the earlier of the following dates, referred to as the measurement date: | |||||||||||||
i. | The date at which a commitment for performance by the counterparty to earn the equity instruments is reached (a performance commitment); and | ||||||||||||
ii. | The date at which the counterparty’s performance is complete. | ||||||||||||
We have elected to use the Black-Scholes-Merton pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units are measured based on the fair market values of the underlying stock on the dates of grant. We recognize stock-based compensation using the straight-line method. | |||||||||||||
The components of stock based compensation related to stock options in the Company’s Statement of Operations for the fiscal years ended June 30, 2014, 2013 and 2012 are as follows(rounded to nearest thousand): | |||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-12 | |||||||||||
Research and development expenses | |||||||||||||
Professional fees | $ | 389,000 | $ | - | $ | - | |||||||
General and administrative expenses | |||||||||||||
Employees’ bonus | $ | 105,000 | $ | - | $ | - | |||||||
Consulting | 54,000 | 299,000 | 571,000 | ||||||||||
Charitable contribution | - | 220,000 | 138,000 | ||||||||||
Officers’ payroll and payroll expenses | - | - | 1,995,000 | ||||||||||
Total share-based compensation expense | $ | 548,000 | $ | 519,000 | $ | 2,704,000 | |||||||
Recent Accounting Pronouncements | ' | ||||||||||||
Recently Adopted Standards | |||||||||||||
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation." This ASU removes the definition of a development stage entity from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the ASU eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and stockholders’ equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This ASU is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The Company has elected to early adopt this ASU effective with this Annual Report on Form 10-K and its adoption resulted in the removal of previously required development stage disclosures. | |||||||||||||
Standards Issued Not Yet Adopted | |||||||||||||
In June 2014, the FASB issued guidance that clarifies the accounting for share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. In this case, the performance target would be required to be treated as a performance condition, and should not be reflected in estimating the grant-date fair value of the award. The guidance also addresses when to recognize the related compensation cost. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Management is currently reviewing this guidance to determine the impact it may have, if any, on our financial statements. | |||||||||||||
In May 2014, the FASB issued guidance on the accounting for revenue from contracts with customers that will supersede most existing revenue recognition guidance, including industry-specific guidance. The core principle requires an entity to recognize revenue to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the guidance requires enhanced disclosures regarding the nature, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. This guidance is effective for interim and annual reporting periods beginning on or after December 15, 2016. Entities can choose to apply the guidance using either the full retrospective approach or a modified retrospective approach. Management believes that the adoption of this guidance will not have a material impact on our financial statements. | |||||||||||||
In April 2014, the FASB issued guidance for the reporting of discontinued operations, which also contains new disclosure requirements for both discontinued operations and other disposals that do not meet the definition of a discontinued operation. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Management believes that the adoption of this guidance will not have a material impact on our financial statements. |
Significant_Accounting_Policie2
Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Significant Accounting Policies And Recent Accounting Pronouncements Tables | ' | ||||||||||||
Schedule of components of stock based compensation related to stock options recognized in the company's statement of operations | ' | ||||||||||||
The components of stock based compensation related to stock options in the Company’s Statement of Operations for the fiscal years ended June 30, 2014, 2013 and 2012 are as follows(rounded to nearest thousand): | |||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-12 | |||||||||||
Research and development expenses | |||||||||||||
Professional fees | $ | 389,000 | $ | - | $ | - | |||||||
General and administrative expenses | |||||||||||||
Employees’ bonus | $ | 105,000 | $ | - | $ | - | |||||||
Consulting | 54,000 | 299,000 | 571,000 | ||||||||||
Charitable contribution | - | 220,000 | 138,000 | ||||||||||
Officers’ payroll and payroll expenses | - | - | 1,995,000 | ||||||||||
Total share-based compensation expense | $ | 548,000 | $ | 519,000 | $ | 2,704,000 | |||||||
Polymedix_Inc_Asset_Acquisitio1
Polymedix Inc. Asset Acquisition Patent Rights and Equipment (Tables) | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Polymedix Inc. Asset Acquisition Patent Rights And Equipment Tables | ' | ||||
Schedule of purchase price allocation for the assets acquired | ' | ||||
The following table summarizes the purchase price allocation for the assets acquired: | |||||
Intangible assets – patents rights – Brilacidin, Delparantag and other related compounds | $ | 4,706,000 | |||
Tangible assets - Laboratory equipment and computer systems | $ | 96,000 |
Patents_net_Tables
Patents, net (Tables) | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Patents Net Tables | ' | |||||||||||
Schedule of patents | ' | |||||||||||
Patents, net consisted of the following (rounded to nearest thousand): | ||||||||||||
Useful life | 30-Jun-14 | June 30, | ||||||||||
2013 | ||||||||||||
Purchased Patent Rights– Brilacidin, and related compounds (note 4) | 14 | $ | 4,082,000 | $ | - | |||||||
Purchased Patent Rights–Delparantag and related compounds (note 4) | 12 | 480,000 | - | |||||||||
Purchased Patent Rights–Anti-microbial- surfactants and related compounds (note 4) | 12 | 144,000 | - | |||||||||
Patents – Kevetrin and related compounds | 17 | 542,000 | 11,000 | |||||||||
$ | 5,248,000 | $ | 11,000 | |||||||||
Accumulated amortization | 286,000 | 1,000 | ||||||||||
$ | 4,962,000 | $ | 10,000 |
Property_plant_and_equipment_n1
Property, plant and equipment net (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Property Plant And Equipment Net Tables | ' | ||||||||
Summary of property, plant and equipment net | ' | ||||||||
Property, plant and equipment, net consisted of the following (rounded to nearest thousand): | |||||||||
June 30, | June 30, | ||||||||
2014 | 2013 | ||||||||
Testing equipment | $ | 43,000 | $ | - | |||||
Accumulated depreciation | 4,000 | - | |||||||
$ | 39,000 | $ | - | ||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Accrued Expenses Tables | ' | ||||||||
Schedule of accrued expenses | ' | ||||||||
Accrued expenses consisted of the following (rounded to nearest thousand): | |||||||||
June 30, | June 30, | ||||||||
2014 | 2013 | ||||||||
Accrued research and development consulting fees | $ | 46,000 | $ | 200,000 | |||||
Accrued rent (Note 10) – related parties | 53,000 | 60,000 | |||||||
Accrued interest – related parties | 237,000 | 294,000 | |||||||
Total | $ | 336,000 | $ | 554,000 | |||||
Accrued_Salaries_and_Payroll_T1
Accrued Salaries and Payroll Taxes - Related Parties And Other (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Accrued Salaries And Payroll Taxes - Related Parties And Other Tables | ' | ||||||||
Schedule of accrued salaries and payroll taxes | ' | ||||||||
Accrued salaries and payroll taxes consisted of the following (rounded to nearest thousand): | |||||||||
June 30, | June 30, | ||||||||
2014 | 2013 | ||||||||
Accrued salaries – related parties | $ | 3,032,000 | $ | 3,244,000 | |||||
Accrued payroll taxes – related parties | 149,000 | 152,000 | |||||||
Withholding tax – related parties | 29,000 | 31,000 | |||||||
Other | 14,000 | 4,000 | |||||||
Total | $ | 3,224,000 | $ | 3,431,000 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments And Contingencies Tables | ' | ||||
Future minimum lease payments required under the non-cancelable operating lease | ' | ||||
Future minimum lease payments required under the non-cancelable operating lease are as follows (rounded to nearest thousand): | |||||
Year ending June 30, | |||||
2015 | $ | 207,000 | |||
2016 | 207,000 | ||||
2017 | 207,000 | ||||
2018 | 207,000 | ||||
2019 | 54,000 | ||||
Total minimum payments | $ | 882,000 | |||
Weighted_Average_Shares_Outsta1
Weighted Average Shares Outstanding (Tables) | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Weighted Average Shares Outstanding Tables | ' | ||||||||||||
Weighted average shares of common stock basic and diluted earnings per share | ' | ||||||||||||
Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows: | |||||||||||||
Years Ended June 30, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average shares outstanding-basic | 105,044,985 | 94,980,552 | 90,159,045 | ||||||||||
Dilutive options and restricted stock | - | - | - | ||||||||||
Weighted average shares outstanding-diluted | 105,044,985 | 94,980,552 | 90,159,045 | ||||||||||
Antidilutive securities not included: | |||||||||||||
Options | 43,485,670 | 43,774,022 | 45,855,288 | ||||||||||
Warrants | 2,448,000 | 5,571,084 | 5,719,754 | ||||||||||
45,933,670 | 49,345,106 | 51,575,042 |
Stock_Options_and_Warrants_Tab
Stock Options and Warrants (Tables) | 12 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stock Warrants [Member] | ' | ||||||||||||||||
Valuation assumptions for stock options/warrants and SARs | ' | ||||||||||||||||
Assumptions used in the Black Scholes option-pricing model for these warrants were as follows: | |||||||||||||||||
Average risk-free interest rate | 0.29 | % | |||||||||||||||
Average expected life- years | 2 | ||||||||||||||||
Expected volatility | 55.22 | % | |||||||||||||||
Expected dividends | 0 | ||||||||||||||||
Schedule of stock option activity | ' | ||||||||||||||||
The following table summarizes stock warrants: | |||||||||||||||||
Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate | ||||||||||||||
Intrinsic | |||||||||||||||||
Value | |||||||||||||||||
Outstanding at June 30, 2011 | 2,964,000 | $ | 0.81 | 2.51 | $ | 408,000 | |||||||||||
Granted | 2,755,754 | 0.4 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited/expired | - | - | - | ||||||||||||||
Outstanding at June 30, 2012 | 5,719,754 | $ | 0.87 | 2.02 | $ | 475,000 | |||||||||||
Granted | 592,330 | 0.51 | 4.17 | ||||||||||||||
Exercised | (741,000 | ) | 0.25 | - | |||||||||||||
Forfeited/expired | - | - | - | ||||||||||||||
Outstanding at June 30, 2013 | 5,571,084 | $ | 0.92 | 1.43 | $ | 4,794,000 | |||||||||||
Extended | 2,223,000 | 1 | 1.5 | ||||||||||||||
Granted | 25,000 | 1.79 | 2.57 | ||||||||||||||
Exercised | (3,148,084 | ) | 1 | - | |||||||||||||
Expired | (2,223,000 | ) | 1 | - | |||||||||||||
Outstanding at June 30, 2014 | 2,448,000 | $ | 1.01 | 1.43 | $ | 1,623,000 | |||||||||||
Exercisable at June 30, 2014 | 2,448,000 | $ | 1.01 | 1.43 | $ | 1,623,000 | |||||||||||
Stock Options [Member] | ' | ||||||||||||||||
Valuation assumptions for stock options/warrants and SARs | ' | ||||||||||||||||
The fair value of options granted for the years ended June 30, 2014, 2013 and 2012 was estimated on the date of grant using the Black Scholes model that uses assumptions noted in the following table. | |||||||||||||||||
Year Ended June 30 | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected term (in years) | 5-Mar | 10-May | 10-Mar | ||||||||||||||
Expected stock price volatility | 91.25% - 124.94 | % | 133.51% - 137.33 | % | 138.64% - 148.15 | % | |||||||||||
Risk-free interest rate | 0.9% – 1.98 | % | 0.55% – 1.98 | % | 0.43% – 3.0 | % | |||||||||||
Expected dividend yield | 0 | 0 | 0 | ||||||||||||||
Schedule of stock option activity | ' | ||||||||||||||||
The following table summarizes all stock option activity under the plans: | |||||||||||||||||
Number of | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Options | Exercise Price | Remaining Contractual Life (Years) | Intrinsic | ||||||||||||||
Value | |||||||||||||||||
Outstanding at June 30, 2011 | 39,042,500 | $ | 0.12 | 9.4 | $ | 24,003,000 | |||||||||||
Granted | 2,235,000 | 0.52 | 9.47 | ||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited/expired | - | - | |||||||||||||||
Outstanding at June 30, 2012 | 41,277,500 | $ | 0.14 | 8.46 | $ | 21,186,000 | |||||||||||
Granted | 120,000 | 1.09 | |||||||||||||||
Exercised | (2,255,000 | ) | 0.12 | ||||||||||||||
Forfeited/expired | - | ||||||||||||||||
Outstanding at June 30, 2013 | 39,142,500 | $ | 0.14 | 7.47 | $ | 64,169,000 | |||||||||||
Granted | - | - | |||||||||||||||
Exercised | (25,000 | ) | 0.2 | ||||||||||||||
Forfeited/expired | (150,000 | ) | 0.23 | ||||||||||||||
Outstanding at June 30, 2014 | 38,967,500 | $ | 0.14 | 6.5 | $ | 59,613,000 | |||||||||||
Exercisable at June 30, 2014 | 38,967,500 | $ | 0.14 | 6.5 | $ | 59,613,000 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Income Taxes Tables | ' | ||||||||||||
Income tax provision benefit | ' | ||||||||||||
The income tax provision benefit differs from the amount of tax determined by applying the Federal statutory rate as follows: | |||||||||||||
June 30, | June 30, | June 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Book income at federal statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State income tax, net of federal tax benefit | 5.33 | % | 5.51 | % | 4.72 | % | |||||||
Change in valuation allowance | (43.87 | %) | (42.15 | %) | (25.86 | %) | |||||||
Research and development credit | 7.69 | % | 4.68 | % | 1.28 | % | |||||||
Permanent difference | (2.62 | %) | (1.59 | %) | (6.22 | %) | |||||||
Others - net | (0.53 | %) | (0.45 | %) | (7.92 | %) | |||||||
Total | 0 | % | 0 | % | 0 | % | |||||||
Deferred tax assets | ' | ||||||||||||
The components of deferred tax assets as of June 30, 2014 and 2013 are as follows (rounded to nearest thousand): | |||||||||||||
June 30, | June 30, | ||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax (liability) asset: | |||||||||||||
Net operating loss carry forwards | 6,839,000 | 3,256,000 | |||||||||||
Accrued payroll | $ | 1,265,000 | $ | 1,351,000 | |||||||||
Stock compensation | 1,567,000 | 1,964,000 | |||||||||||
Other | 164,000 | 212,000 | |||||||||||
Research and development credit | 936,000 | 370,000 | |||||||||||
$ | 10,771,000 | $ | 7,153,000 | ||||||||||
Valuation allowance | (10,771,000 | ) | (7,153,000 | ) | |||||||||
Total deferred taxes | $ | - | $ | - |
Selected_Quarterly_Results_of_1
Selected Quarterly Results of Operations (Tables) | 12 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Selected Quarterly Results Of Operations Tables | ' | ||||||||||||||||||||
Quarterly results of operations | ' | ||||||||||||||||||||
A summary of the Company’s quarterly results of operations for the years ended June 30, 2014 and 2013 is as follows (rounded to nearest thousand, except for per share data): | |||||||||||||||||||||
Years Ended June 30, 2014 | |||||||||||||||||||||
Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Total | |||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||||
Revenues | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Gross profit | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Net loss | $ | (977,000 | ) | $ | (1,596,000 | ) | $ | (2,334,000 | ) | $ | (3,340,000 | ) | $ | (8,247,000 | ) | ||||||
Net loss attributable to common stockholders (a) | $ | (977,000 | ) | $ | (3,576,000 | ) | $ | (2,334,000 | ) | $ | (3,340,000 | ) | $ | (10,227,000 | ) | ||||||
Loss per share attributable to common stockholders | |||||||||||||||||||||
- Basic | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.10 | ) | ||||||
- Diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.10 | ) | ||||||
Weighted average number of common shares | 100,678,604 | 104,640,788 | 106,542,850 | 108,386,580 | 105,044,985 | ||||||||||||||||
Years Ended June 30, 2013 | |||||||||||||||||||||
Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Total | |||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||||
Revenues | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Gross profit | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Net loss | $ | (469,000 | ) | $ | (749,000 | ) | $ | (867,000 | ) | $ | (1,140,000 | ) | $ | (3,224,000 | ) | ||||||
Net loss attributable to common stockholders (a) | $ | (681,000 | ) | $ | (749,000 | ) | $ | (867,000 | ) | $ | (1,140,000 | ) | $ | (3,436,000 | ) | ||||||
Loss per share attributable to common stockholders | |||||||||||||||||||||
- Basic | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | ||||||
- Diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | ||||||
Weighted average number of common shares | 92,496,542 | 93,507,421 | 96,091,495 | 97,882,446 | 94,980,552 | ||||||||||||||||
(a) Net loss attributable to common stockholders represents our net loss plus deemed dividends. Other than deemed dividends of $1,980,000 in quarter 2 of 2014 and $212,000 in quarter 1 of 2013, the net loss attributable to common stockholders was equal to our net loss for all other periods presented. |
Going_Concern_Details_Textual
Going Concern (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2011 | |
Going Concern Details Textual | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $4,988,000 | ' | ' | ' | $2,955,000 | ' | ' | ' | $4,988,000 | $2,955,000 | $27,000 | $68,000 |
Net loss | -3,340,000 | -2,334,000 | -1,596,000 | -977,000 | -1,140,000 | -867,000 | -749,000 | -469,000 | -8,247,000 | -3,224,000 | -4,894,000 | ' |
Working capital deficit | $4,090,000 | ' | ' | ' | $5,180,000 | ' | ' | ' | $4,090,000 | $5,180,000 | ' | ' |
Significant_Accounting_Policie3
Significant Accounting Policies and Recent Accounting Pronouncements (Details) (USD $) | 12 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2014 | |
Stock Options [Member] | |||
Research and development expenses | ' | ' | ' |
Professional fees | ' | ' | $389,000 |
Employees' bonus | ' | ' | 105,000 |
Consulting | 299,000 | 571,000 | 54,000 |
Charitable contribution | 220,000 | 138,000 | ' |
Officers' payroll and payroll expenses | ' | 1,995,000 | ' |
Total | $519,000 | $2,704,000 | $548,000 |
Significant_Accounting_Policie4
Significant Accounting Policies and Recent Accounting Pronouncements (Detail Textual) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Cash and Cash Equivalents | $0 | $0 | ' |
Property, plant and Equipment useful lives | '5 years | '5 years | '5 years |
Intangible assets patents carrying value | 4,962,000 | 10,000 | ' |
Amortization expense | 285,000 | 1,000 | 0 |
Amount charged to operations | 136,000 | 29,000 | 99,000 |
Impairment expense | 0 | 0 | 0 |
Research and development costs | $6,344,000 | $1,510,000 | $633,000 |
Minimum and Intangible Assets - Patent (Member) | ' | ' | ' |
Amortization period | '12 years | ' | ' |
Maxiimum and Intangible Assets - Patent (Member) | ' | ' | ' |
Amortization period | '17 years | ' | ' |
Polymedix_Inc_Asset_Acquisitio2
Polymedix Inc. Asset Acquisition - Patent Rights and Equipment (Details) (Polymedix Inc And Polymedix Pharmaceuticals Inc [Member], USD $) | Jun. 30, 2014 |
Polymedix Inc And Polymedix Pharmaceuticals Inc [Member] | ' |
Intangible assets - patents rights - Brilacidin, Delparantag and other related compounds | $4,706,000 |
Tangible assets - Laboratory equipment and computer systems | $96,000 |
Patents_net_Details
Patents, net (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Purchased Patent Rights | $5,248,000 | $11,000 |
Accumulated amortization | 286,000 | 1,000 |
Patent costs - net | 4,962,000 | 10,000 |
Patents [Member] | ' | ' |
Useful life | '14 years | ' |
Purchased Patent Rights | 4,082,000 | ' |
Patents Two [Member] | ' | ' |
Useful life | '12 years | ' |
Purchased Patent Rights | 480,000 | ' |
Patents Three [Member] | ' | ' |
Useful life | '12 years | ' |
Purchased Patent Rights | 144,000 | ' |
Patents Four [Member] | ' | ' |
Useful life | '17 years | ' |
Purchased Patent Rights | $542,000 | $11,000 |
Patents_net_Details_Textual
Patents, net (Details Textual) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Amortization expense | $285,000 | $1,000 | ' |
Year 2015-2025 [Member] | ' | ' | ' |
Estimated annual amortization expense | 375,000 | ' | ' |
Year 2026 [Member] | ' | ' | ' |
Estimated annual amortization expense | 333,000 | ' | ' |
Year 2027 [Member] | ' | ' | ' |
Estimated annual amortization expense | 323,000 | ' | ' |
Year 2028 [Member] | ' | ' | ' |
Estimated annual amortization expense | 86,000 | ' | ' |
Year 2029 and 2031 [Member] | ' | ' | ' |
Estimated annual amortization expense | $32,000 | ' | ' |
Minimum and Intangible Assets - Patent (Member) | ' | ' | ' |
Estimated remaining useful lives of the assets | '12 years | ' | ' |
Amortization period | '11 years 3 months | ' | ' |
Maxiimum and Intangible Assets - Patent (Member) | ' | ' | ' |
Estimated remaining useful lives of the assets | '17 years | ' | ' |
Amortization period | '16 years 8 months 12 days | ' | ' |
Property_plant_and_equipment_n2
Property, plant and equipment net (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Property Plant And Equipment Net Details | ' | ' |
Testing equipment | $43,000 | ' |
Accumulated depreciation | 2,000 | ' |
Property, plant and equipment, net | $39,000 | ' |
Property_plant_and_equipment_n3
Property, plant and equipment net (Details Textual) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Property Plant And Equipment Net Details Textual | ' | ' | ' |
Depreciation expense | $4,000 | ' | ' |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Accrued Expenses Details | ' | ' |
Accrued research and development consulting fees | $46,000 | $200,000 |
Accrued rent (Note 10) - related parties | 53,000 | 60,000 |
Accrued interest - related parties | 237,000 | 294,000 |
Total | $336,000 | $554,000 |
Accrued_Salaries_and_Payroll_T2
Accrued Salaries and Payroll Taxes - Related Parties And Other (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Accrued Salaries And Payroll Taxes - Related Parties And Other Details | ' | ' |
Accrued salaries - related parties | $3,032,000 | $3,244,000 |
Accrued payroll taxes - related parties | 149,000 | 152,000 |
Withholding tax-related parties | 29,000 | 31,000 |
Other | 14,000 | 4,000 |
Total | $3,224,000 | $3,431,000 |
Accrued_Salaries_and_Payroll_T3
Accrued Salaries and Payroll Taxes - Related Parties And Other (Details Textual) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Payroll paid | ' | ' | ' |
Two Executive Officers [Member] | ' | ' | ' |
Payroll paid | 889,000 | 809,000 | 735,000 |
Payroll tax expenses | 489,000 | 445,000 | 404,000 |
Krishna Menon [Member] | ' | ' | ' |
Research and development payroll expenses | $400,000 | $364,000 | $331,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Jun. 30, 2014 |
Year ending June 30, | ' |
2015 | $207,000 |
2016 | 207,000 |
2017 | 207,000 |
2018 | 207,000 |
2019 | 54,000 |
Total minimum payments | $882,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2014 | |
Contract Research Organization (CRO) - ABSSSI Trial [Member] | Contract Research Organization (CRO) - Phase 1 Trial [Member] | ||||
Operating leases, rental expense | $162,000 | $11,000 | $11,000 | ' | ' |
Research and development cost | ' | ' | ' | $1,870,000 | $96,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Kard Scientific [Member] | ' | ' | ' |
Rent expense | $1,800 | $10,800 | $10,800 |
Rent payables included in accrued expenses | 53,000 | 60,000 | ' |
Clinical Studies [Member] | ' | ' | ' |
Accrued research and development expenses | $1,686,000 | $1,686,000 | ' |
Note_Payable_Related_Party_Det
Note Payable - Related Party (Details Textual) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Note Payable - Related Party Details Textual | ' | ' |
Interest accrued | $237,000 | $294,000 |
Principal balances of the demand note | $2,022,000 | $2,022,000 |
Weighted_Average_Shares_Outsta2
Weighted Average Shares Outstanding (Details) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Weighted Average Shares Outstanding Details | ' | ' | ' |
Weighted average shares outstanding-basic | 105,044,985 | 94,980,552 | 90,159,045 |
Dilutive options and restricted stock | ' | ' | ' |
Weighted average shares outstanding-diluted | 105,044,985 | 94,980,552 | 90,159,045 |
Antidilutive securities not included: | ' | ' | ' |
Options | 43,485,670 | 43,774,022 | 45,855,288 |
Warrants | 2,448,000 | 5,571,084 | 5,719,754 |
Antidilutive securities excluded from computation of earnings per share | 45,933,670 | 49,345,106 | 51,575,042 |
Stock_Options_and_Warrants_Det
Stock Options and Warrants (Details) (Stock Options [Member], USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Expected dividend yield | $0 | $0 | $0 |
Minimum | ' | ' | ' |
Expected term (in years) | '3 years | '5 years | '3 years |
Expected stock price volatility | 91.25% | 133.51% | 138.64% |
Risk-free interest rate | 0.90% | 0.55% | 0.43% |
Maximum | ' | ' | ' |
Expected term (in years) | '5 years | '10 years | '10 years |
Expected stock price volatility | 124.94% | 137.33% | 148.15% |
Risk-free interest rate | 1.98% | 1.98% | 3.00% |
Stock_Options_and_Warrants_Det1
Stock Options and Warrants (Details 1) (Stock Options [Member], USD $) | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2011 | |
Stock Options [Member] | ' | ' | ' | ' |
Number of Outstanding, Beginning Balance | 39,142,500 | 41,277,500 | 39,042,500 | ' |
Granted | ' | 120,000 | 2,235,000 | ' |
Exercised | -25,000 | -2,255,000 | ' | ' |
Forfeited/expired | -150,000 | ' | ' | ' |
Number of Outstanding, Ending Balance | 38,967,500 | 39,142,500 | 41,277,500 | 39,042,500 |
Number of Outstanding, Exercisable | 38,967,500 | ' | ' | ' |
Weighted Average Exercise Price, Beginning Balance | $0.14 | $0.14 | $0.12 | ' |
Granted | ' | $1.09 | $0.52 | ' |
Exercised | $0.20 | $0.12 | ' | ' |
Forfeited/expired | $0.23 | ' | ' | ' |
Weighted Average Exercise Price, Ending Balance | $0.14 | $0.14 | $0.14 | $0.12 |
Weighted Average Exercise Price, Exercisable | $0.14 | ' | ' | ' |
Weighted average remaining contractual life (Years), Outstanding | '6 years 6 months | '7 years 5 months 19 days | '8 years 5 months 16 days | '9 years 4 months 24 days |
Granted | ' | ' | '9 years 5 months 19 days | ' |
Weighted average remaining contractual life (Years), Exercisable | '6 years 6 months | ' | ' | ' |
Aggregate intrinsic value, Outstanding | $64,169,000 | $21,186,000 | $24,003,000 | ' |
Aggregate intrinsic value, Outstanding | 64,169,000 | 64,169,000 | 21,186,000 | 24,003,000 |
Aggregate intrinsic value, Exercisable | $59,613,000 | ' | ' | ' |
Stock_Options_and_Warrants_Det2
Stock Options and Warrants (Details 2) (Stock Warrants [Member]) | 12 Months Ended |
Jun. 30, 2014 | |
Stock Warrants [Member] | ' |
Average risk-free interest rate | 0.29% |
Average expected life- years | '2 years |
Expected volatility | 55.22% |
Expected dividends | 0.00% |
Stock_Options_and_Warrants_Det3
Stock Options and Warrants (Details 3) (Stock Warrants [Member], USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Stock Warrants [Member] | ' | ' | ' |
Number of Outstanding, Beginning Balance | 5,571,084 | 5,719,754 | 2,964,000 |
Extended | 2,223,000 | ' | ' |
Granted | 25,000 | 592,330 | 2,755,754 |
Exercised | -3,148,084 | -741,000 | ' |
Forfeited/expired | -2,223,000 | ' | ' |
Number of Outstanding, Ending Balance | 2,448,000 | 5,571,084 | 5,719,754 |
Number of Outstanding, Exercisable | 2,448,000 | 2,223,000 | 592,330 |
Weighted Average Exercise Price, Beginning Balance | $0.92 | $0.87 | $0.81 |
Extended | $1 | ' | ' |
Granted | $1.79 | $0.51 | $0.40 |
Exercised | $1 | $0.25 | ' |
Forfeited/expired | $1 | ' | ' |
Weighted Average Exercise Price, Ending Balance | $1.01 | $0.92 | $0.87 |
Weighted Average Exercise Price, Exercisable | $1.01 | ' | ' |
Weighted average remaining contractual life (Years), Outstanding | '1 year 5 months 5 days | '2 years 7 days | '2 years 6 months 4 days |
Weighted average remaining contractual life (Years), Extended | '1 year 6 months | ' | ' |
Weighted average remaining contractual life (Years), Granted | '2 years 6 months 26 days | '4 years 2 months 1 day | ' |
Weighted average remaining contractual life (Years), Outstanding | '1 year 5 months 5 days | '1 year 5 months 5 days | '2 years 7 days |
Weighted average remaining contractual life (Years), Exercisable | '1 year 5 months 5 days | ' | ' |
Aggregate intrinsic value, Outstanding | ' | $475,000 | $408,000 |
Aggregate intrinsic value, Outstanding | 1,623,000 | ' | 475,000 |
Aggregate intrinsic value, Exercisable | $1,623,000 | ' | $4,794,000 |
Stock_Options_and_Warrants_Det4
Stock Options and Warrants (Details Textual) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Professional fees expense | $317,000 | $615,000 | $847,000 |
Common stock issued during period, value | 5,618,000 | ' | ' |
Stock Warrants [Member] | ' | ' | ' |
Common stock, shares issued during period | 2,300,000 | ' | ' |
Common stock purchase warrant exercisable price | $1 | ' | ' |
Common stock, par value | $0.00 | ' | ' |
Common stock issued during period, value | 2,300,000 | ' | ' |
Stock Options [Member] | ' | ' | ' |
Stock based compensation | 548,000 | 519,000 | 2,704,000 |
Consulting Agreement [Member] | ' | ' | ' |
Professional fees expense | $54,000 | $217,000 | $65,000 |
Equity_Transactions_Details_Te
Equity Transactions (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Common Class A | Common Class A | Common Class A | 10 Million Common Stock Purchase Agreement [Member] | 10 Million Common Stock Purchase Agreement [Member] | $20 million Class A Common Stock Purchase Agreement [Member] | $20 million Class A Common Stock Purchase Agreement [Member] | Common Stock Purchase Agreement Warrants [Member] | ||||
Consultant [Member] | Common Class A | Common Class A | Aspire Capital Fund Llc [Member] | Common Class A | Common Class A | ||||||
Aspire Capital Fund Llc [Member] | Aspire Capital Fund Llc [Member] | Common Class A | Aspire Capital Fund Llc [Member] | ||||||||
Number of common stock shares sold | ' | ' | ' | ' | ' | ' | 3,204,537 | 2,712,208 | ' | ' | ' |
Value of common stock shares sold | ' | ' | ' | ' | ' | ' | $10,000,000 | $4,383,000 | ' | ' | ' |
Common stock, shares issued | ' | ' | ' | 109,787,129 | 100,456,068 | 5,000 | ' | ' | ' | ' | ' |
Common Stock, Value | ' | ' | ' | 11,000 | 10,000 | 8,900 | ' | ' | ' | ' | ' |
Closing bid price | ' | ' | ' | ' | ' | $1.78 | ' | ' | ' | ' | ' |
Common stock, par value | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | $0.00 |
Commitment fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | 373,000 | ' |
Amortization amount | 39,000 | 60,000 | ' | ' | ' | ' | ' | ' | ' | 77,000 | ' |
Deferred offering costs | ' | ' | 295,000 | ' | ' | ' | ' | ' | 295,000 | ' | ' |
Amount available under the financing arrangement | ' | ' | ' | ' | ' | ' | ' | ' | $15,800,000 | ' | ' |
Common stock, shares issued during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 |
Common stock purchase warrant exercisable price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 |
Income_Taxes_Details
Income Taxes (Details) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Income Taxes Details | ' | ' | ' |
Book income at federal statutory rate | 34.00% | 34.00% | 34.00% |
State income tax, net of federal tax benefit | 5.33% | 5.51% | 4.72% |
Change in valuation allowance | -43.87% | -42.15% | -25.86% |
Research and development credit | 7.69% | 4.68% | 1.28% |
Permanent difference | -2.62% | -1.59% | -6.22% |
Others - net | -0.53% | -0.45% | -7.92% |
Total | 0.00% | 0.00% | 0.00% |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Deferred tax (liability) asset: | ' | ' |
Net operating loss carry forwards | $6,839,000 | $3,256,000 |
Accrued payroll | 1,265,000 | 1,351,000 |
Stock compensation | 1,567,000 | 1,964,000 |
Other | 164,000 | 212,000 |
Research and development credit | 936,000 | 370,000 |
Deferred tax assets, Total | 10,771,000 | 7,153,000 |
Valuation allowance | -10,771,000 | -7,153,000 |
Total deferred taxes | ' | ' |
Income_Taxes_Detail_Textuals
Income Taxes (Detail Textuals) (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Income Taxes Detail Textuals | ' | ' | ' |
Operating loss carryforward | $17,195,000 | ' | ' |
Amount of change in Valuation allowance | $3,619,000 | $1,359,200 | $1,278,300 |
Selected_Quarterly_Results_of_2
Selected Quarterly Results of Operations (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2012 | |
Selected Quarterly Results Of Operations Details | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | -3,340,000 | -2,334,000 | -1,596,000 | -977,000 | -1,140,000 | -867,000 | -749,000 | -469,000 | -8,247,000 | -3,224,000 | -4,894,000 |
Net loss attributable to common stockholders | ($3,340,000) | ($2,334,000) | ($3,576,000) | ($977,000) | ($1,140,000) | ($867,000) | ($749,000) | ($681,000) | ($10,227,000) | ($3,436,000) | ($4,960,000) |
Loss per share attributable - Basic | ($0.03) | ($0.02) | ($0.03) | ($0.01) | ($0.01) | ($0.01) | ($0.01) | ($0.01) | ($0.10) | ($0.04) | ' |
Loss per share attributable - Diluted | ($0.03) | ($0.02) | ($0.03) | ($0.01) | ($0.01) | ($0.01) | ($0.01) | ($0.01) | ($0.10) | ($0.04) | ' |
Weighted average number of common shares | 108,386,580 | 106,542,850 | 104,640,788 | 100,678,604 | 97,882,446 | 96,091,495 | 93,507,421 | 92,496,542 | 105,044,985 | 94,980,552 | 90,159,045 |