Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2018 | May 06, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | INNOVATION PHARMACEUTICALS INC. | |
Entity Central Index Key | 1,355,250 | |
Trading Symbol | ipix | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Common Stock, Shares Outstanding | 155,091,427 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2018 | Jun. 30, 2017 |
Current Assets: | ||
Cash | $ 1,336,000 | $ 4,141,000 |
Prepaid expenses | 40,000 | 308,000 |
Security deposits | 78,000 | |
Subscription receivable | 26,000 | |
Total Current Assets | 1,454,000 | 4,475,000 |
Other Assets: | ||
Patents - net | 4,032,000 | 4,212,000 |
Equipment - net | 93,000 | 120,000 |
Deferred offering costs - net | 173,000 | 227,000 |
Security deposits | 78,000 | |
Total Other Assets | 4,298,000 | 4,637,000 |
Total Assets | 5,752,000 | 9,112,000 |
Current Liabilities: | ||
Accounts payable - (including related party payables of approximately $1,486,000 and 1,506,000, respectively) | 4,122,000 | 4,699,000 |
Accrued expenses - (including related party accruals of approximately $25,000 and $38,000, respectively) | 306,000 | 711,000 |
Accrued salaries and payroll taxes - (including related party accrued salaries of approximately $2,953,000 and $2,953,000, respectively) | 3,017,000 | 3,144,000 |
Convertible note payable - related party | 2,022,000 | 2,022,000 |
Total Current Liabilities | 9,467,000 | 10,576,000 |
Total Liabilities | 9,467,000 | 10,576,000 |
Commitments and contingencies (Note 7) | ||
Stockholders' Deficiency | ||
Preferred stock, $0.001 par value, 10,000,000 designated shares, no shares issued and outstanding | ||
Additional paid-in capital | 77,324,000 | 68,295,000 |
Accumulated deficit | (81,054,000) | (69,553,000) |
Treasury Stock, at cost (0 shares and 262,080 shares as of March 31, 2018 and June 30, 2017, respectively) | 0 | (220,000) |
Total Stockholders' Deficiency | (3,715,000) | (1,464,000) |
Total Stockholders' Deficiency | 5,752,000 | 9,112,000 |
Common Class A | ||
Stockholders' Deficiency | ||
Common Stock, Value | 15,000 | 14,000 |
Common Class B | ||
Stockholders' Deficiency | ||
Common Stock, Value |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2018 | Jun. 30, 2017 |
Current Liabilities: | ||
Accounts payable, related party payables (in dollars) | $ 1,486,000 | $ 1,506,000 |
Accrued expenses, related party accruals (in dollars) | 25,000 | 38,000 |
Accrued salaries, due to related parties (in dollars) | $ 2,953,000 | $ 2,953,000 |
Stockholders' Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares designated (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury Stock value | 0 | 262,080 |
Common Class A | ||
Stockholders' Equity | ||
Common Stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common Stock, shares issued (in shares) | 147,091,427 | 135,536,501 |
Common Stock, shares outstanding (in shares) | 147,091,427 | 135,274,421 |
Common Class B | ||
Stockholders' Equity | ||
Common Stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, shares issued (in shares) | 0 | 0 |
Common Stock, shares outstanding (in shares) | 0 | 0 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Statements Of Operations | ||||
Revenues | ||||
Operating expenses: | ||||
Research and development expenses | 1,776,000 | 3,182,000 | 9,544,000 | 8,142,000 |
General and administrative expenses | 295,000 | 331,000 | 889,000 | 1,037,000 |
Officers' payroll and payroll tax expenses | 132,000 | 138,000 | 392,000 | 398,000 |
Professional fees | 195,000 | 201,000 | 525,000 | 562,000 |
Total operating expenses | 2,398,000 | 3,852,000 | 11,350,000 | 10,139,000 |
Loss from operations | (2,398,000) | (3,852,000) | (11,350,000) | (10,139,000) |
Other income (expenses) | ||||
Interest income | 1,000 | 2,000 | ||
Interest expense | (51,000) | (51,000) | (152,000) | (152,000) |
Total other income - net | (51,000) | (51,000) | (151,000) | (150,000) |
Loss before provision for income taxes | (2,449,000) | (3,903,000) | (11,501,000) | (10,289,000) |
Provision for income taxes | ||||
Net loss | $ (2,449,000) | $ (3,903,000) | $ (11,501,000) | $ (10,289,000) |
Basic and diluted loss per share | $ (0.02) | $ (0.03) | $ (0.08) | $ (0.08) |
Weighted average number of common shares outstanding | 146,071,627 | 127,270,598 | 141,296,395 | 125,599,470 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOW (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (11,501,000) | $ (10,289,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock and stock options issued as payment for compensation, services rendered and financing costs | 1,665,000 | 1,026,000 |
Amortization of patent costs | 289,000 | 277,000 |
Depreciation of equipment | 28,000 | 24,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and security deposits | 268,000 | 165,000 |
Accounts payable | (578,000) | 664,000 |
Accrued expenses | (406,000) | 130,000 |
Accrued officers' salaries and payroll taxes | (127,000) | 54,000 |
Net cash used in operating activities | (10,362,000) | (7,949,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property, plant and equipment | (63,000) | |
Patent costs | (108,000) | (256,000) |
Net cash used in investing activities | (108,000) | (319,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Sales of common stock, net of offering costs | 7,837,000 | 7,571,000 |
Purchase of treasury stock | (172,000) | |
Net cash provided by financing activities | 7,665,000 | 7,571,000 |
NET DECREASE IN CASH | (2,805,000) | (697,000) |
CASH, BEGINNING OF PERIOD | 4,141,000 | 6,310,000 |
CASH, END OF PERIOD | 1,336,000 | 5,613,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest | 156,000 | 44,000 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INVESTING AND FINANCING ACTIVITIES | ||
Commitment shares issued as deferred offering costs | 215,000 | |
Reversal of subscription receivable to treasury stock | $ 26,000 |
Basis of Presentation and Natur
Basis of Presentation and Nature of Operations | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 1 - Basis of Presentation and Nature of Operations | Unaudited Interim Financial Information The accompanying unaudited condensed financial statements of Innovation Pharmaceuticals Inc. have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended June 30, 2017, included in our Annual Report on Form 10-K for the year ended June 30, 2017. In the opinion of the management of Innovation Pharmaceuticals Inc., all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month and nine-month periods have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms Company, we, us or our mean Innovation Pharmaceuticals Inc. Basis of Presentation and Name Change Innovation Pharmaceuticals Inc. (the Company) was incorporated on August 1, 2005 in the State of Nevada. Effective June 5, 2017, the Company amended its Articles of Incorporation and changed its name from Cellceutix Corporation to Innovation Pharmaceuticals Inc. In accordance with Section 92A.180 of the Nevada Revised Statutes, stockholder approval of the name change was not required. The Company is a clinical stage biopharmaceutical company and has no customers, products or revenues to date. The Companys common stock is quoted on OTCQB, symbol IPIX. 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 inflammatory diseases, cancer, dermatology and anti-infectives. 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, Brilacidin, 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 and Liquidity
Going Concern and Liquidity | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 2 - Going Concern and Liquidity | As of June 30, 2017, the Company adopted Accounting Standards Codification 205-40. This guidance amended the existing requirements for disclosing information about an entitys ability to continue as a going concern and explicitly requires management to assess an entitys ability to continue as a going concern and to provide related disclosure in certain circumstances. This guidance was effective for annual reporting periods ending after December 15, 2016, and for annual and interim reporting periods thereafter. The following information reflects the results of managements assessment, plans and conclusion of the Companys ability to continue as a going concern. We have incurred recurring losses since inception and expect to continue to incur losses as a result of costs and expenses related to our research and continued development of our compounds and our corporate general and administrative expenses. As of March 31, 2018, the Company has an accumulated deficit of approximately $81.1 million, representative of recurring losses since inception. The Company is a development stage pharmaceutical company that has no sales as it does not have any products in the market and will continue to not have any revenues until it begins to market its products after it has obtained the necessary Federal Drug Administration (the FDA) approval. As a result, the Company expects to continue to incur losses over the next 12 months from the date of this filing. At March 31, 2018, the Companys cash amounted to $1.3 million and current liabilities amounted to $9.5 million, of which $6.5 million were payables to related parties with no immediate payment terms (See Note 8- Related Party Transactions in the Notes to Condensed Financial Statements section below). The Company had expended substantial funds on its clinical trials and expects to continue our spending on research and development expenditures. The Companys net cash used in operating activities for the nine months ended March 31, 2018 was approximately $10.4 million, and current projections indicate that the Company will have continued negative cash flows from operating activities for the foreseeable future. Our net losses incurred for the nine months ended March 31, 2018 and 2017, amounted to $11.5 million and $10.3 million, respectively, and we had a working capital deficit of approximately $8.0 million and $6.1 million, respectively at March 31, 2018 and June 30, 2017. Accordingly, the Companys planned operations, including total budgeted expenditures of approximately $12.2 million for the next twelve months, raise doubt about its ability to continue as a going concern. The Companys plans to alleviate the doubt of its ability to continue as a going concern primarily include controlling the timing and spending on its research and development programs, thereby being able to decrease its current budgeted expenditures mentioned above for the next 12 months, as needed and to continue raising additional funds through equity financings from its common stock purchase agreement with Aspire Capital Fund, LLC, an Illinois limited liability company (Aspire Capital). The Company may consider other plans to fund operations including: (1) raising additional capital through debt financings or from other sources; (2) additional funding through new relationships to help fund future clinical trial costs (i.e. licensing and partnerships); (3) reducing spending on one or more research and development programs by discontinuing development; and/or (4) restructuring operations to change its overhead structure. The Company may issue securities, including shares of common stock, shares of preferred stock and stock purchase contracts through private placement transactions or registered public offerings, pursuant to its registration statement on Form S-3 filed with the SEC on September 11, 2017 and declared effective on September 21, 2017. Pursuant to the instructions to Form S-3, if the Companys non-affiliate market capitalization as of an applicable measurement time, such as upon the filing of the Companys Annual Report on Form 10-K, does not equal or exceed $75 million, the Company will be unable to offer and sell securities from its effective shelf registration statement on Form S-3. The Companys future liquidity needs, and ability to address those needs, will largely be determined by the success of its product candidates and key development and regulatory events and its decisions in the future. The Company believes that the actions discussed above are probable of occurring and alleviating the substantial doubt raised by our historical operating results and satisfying our estimated liquidity needs twelve months from the issuance of the accompanying financial statements. On September 6, 2017, the Company entered into a new $30 million common stock purchase agreement with Aspire Capital (the 2017 Agreement) to replace the prior 2015 $30 million common stock purchase agreement with Aspire Capital (the 2015 Agreement). During the period from July 1, 2017 to September 5, 2017, the Company generated proceeds of approximately $2.1 million under the 2015 Agreement from the sale of approximately 2.6 million shares of its common stock. During the period from September 6, 2017 to March 31, 2018, the Company generated proceeds of approximately $5.7 million under the 2017 Agreement from the sale of approximately 8.7 million shares of its common stock. As of March 31, 2018, the available balance under the 2017 Agreement is approximately $24.3 million. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 3 - Significant Accounting Policies and Recent Accounting Pronouncements | Use of Estimates The preparation of financial statements in conformity with U.S. 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. Net Loss Per Share Basic and diluted loss per share is computed based on the weighted-average common shares and common share equivalents outstanding during the period. Common share equivalents consist of stock options, convertible notes payable underlying shares and unvested restricted stock. Common share equivalents of 47 million and 46 million shares of common stock were excluded from the computation of diluted loss per share for the nine months ended March 31, 2018 and 2017, respectively, because we incurred net losses for the nine months ended March 31, 2018 and 2017, and the effect of including these potential common shares in the net loss per share calculations would be anti-dilutive and are therefore not included in the calculations. Treasury Stock The Company accounts for treasury stock using the cost method. There were 0 shares and 262,080 shares of treasury stock outstanding, purchased at a total cumulative cost of $0 and $220,000 at March 31, 2018 and June 30, 2017, respectively (see Note 10). Treasury stock, representing shares of the Companys common stock that have been acquired for payroll tax withholding on vested stock grants, is recorded at its acquisition cost and these shares are not considered outstanding. Accounting for Stock Based Compensation The stock-based compensation expense incurred by the Company 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, an 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 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 counterpartys 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 is 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 vesting method over the requisite service period of the equity awards. The components of stock-based compensation expense included in the Companys Condensed Statements of Operations for the three months and nine months ended March 31, 2018 and 2017 are as follows (rounded to nearest thousand): Three months ended March 31 Nine months ended March 31 2018 2017 2018 2017 Research and development expenses Professional fees $ 80,000 $ 5,000 $ 80,000 $ 55,000 Employees bonus 41,000 48,000 115,000 110,000 Officers bonus 144,000 283,000 1,470,000 861,000 Total stock-based compensation expense $ 265,000 $ 336,000 $ 1,665,000 $ 1,026,000 Recent Adopted Accounting Pronouncements Stock Compensation - In June 2014, the FASB issued ASU 2014-12, CompensationStock Compensation. The amendments in this ASU apply to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target can be achieved after the requisite service period. This ASU is the final version of Proposed ASU EITF-13D, CompensationStock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which has been deleted. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period in which the performance target could be achieved) may differ from the requisite service period. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The implementation of this standard did not have a material impact on the Companys accompanying condensed financial statements. Recently Issued Accounting Guidance In May 2014, the FASB issued authoritative guidance that defines how companies should report revenues from contracts with customers. The standard requires an entity to recognize revenue to depict the transfer of promised goods or 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. It provides companies with a five-step, principles-based model to use in accounting for revenue and supersedes current revenue recognition requirements, including most industry-specific and transaction-specific revenue guidance. In August 2015, the FASB deferred the effective date of the new revenue standard by one year. As a result, the new standard would not be effective for the Company until 2019. In addition, the FASB is allowing companies to early adopt this guidance for non-public entities beginning in fiscal year 2017. The guidance permits an entity to apply the standard retrospectively to all prior periods presented, with certain practical expedients, or apply the requirements in the year of adoption, through a cumulative adjustment. The Company will apply this new guidance when it becomes effective and has not yet selected a transition method. The Company, due to not having any revenue currently and in the foreseeable future, has concluded that the impact of the adoption of this accounting standard on its financial statements will not be material. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right of use asset representing its right to use the underlying asset for the lease term. The guidance requires the following for finance leases: the right-of-use asset and a lease liability will be initially measured at the present value of the lease payments, in the statement of financial position; interest on the lease liability will be recognized separately from amortization of the right-of-use asset in the statement of comprehensive income; and repayments of the principal portion of the lease liability will be classified within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. The guidance requires the following for operating leases: the right-of-use asset and a lease liability will be initially measured at the present value of the lease payments, in the statement of financial position; a single lease cost will be recognized, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; and all cash payments will be classified within operating activities in the statement of cash flows. Under Topic 842 the accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. The amendments in Topic 842 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management has determined that based on current accounting and lease contract information the adoption of ASU No. 2016-02 is not expected to have a significant impact on the Companys financial position, results of operations and disclosures. However, management is continually evaluating the future impact of ASU No. 2016-02 based on changes in the Companys financial statements through the period of adoption. Intangibles, Goodwill and Other Statement of Cash Flows |
Patents, net
Patents, net | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 4 - Patents, net | Patents, net consisted of the following (rounded to nearest thousand): Useful life March 31, June 30, (years) 2018 2017 Purchased Patent Rights Brilacidin, and related compounds 14 $ 4,082,000 $ 4,082,000 Purchased Patent Rights Anti-microbial surfactants and related compounds 12 144,000 144,000 Patents Kevetrin and related compounds 17 1,417,000 1,308,000 5,643,000 5,534,000 Less: Accumulated amortization for Brilacidin, Anti-microbial- surfactants and related compounds (1,386,000 ) (1,158,000 ) Accumulated amortization for Patents Kevetrin and related compounds (225,000 ) (164,000 ) $ 4,032,000 $ 4,212,000 The patents are amortized on a straight-line basis over the useful lives of the assets, determined to be 12-17 years from the date of acquisition. Amortization expense was approximately $96,000 and $95,000, for the three months ended March 31, 2018 and 2017, respectively and was approximately $289,000, and $277,000 for the nine months ended March 31, 2018 and 2017, respectively. At March 31, 2018, the future amortization period for all patents was approximately 7.43 years to 16.75 years. Future estimated annual amortization expenses are approximately $96,000 for the year ending June 30, 2018, $383,000 for each year from 2019 to 2025, $374,000 for the year ending June 30, 2026, $371,000 for the year ending June 30, 2027, $134,000 for the year ending June 30, 2028, $80,000 for the years ending June 30, 2029 through the years ended 2032, $41,000 for the year ending June 30, 2033, $10,000 for the year ending June 30, 2034 and $2,000 for the year ending June 30, 2035. Compounds with Activity Against Gram-Negative Bacteria and Fungi As research at the Company is now focused on supporting its clinical trials, we have reduced costs associated with the licensing of intellectual property for gram-negative bacteria and anti-fungal compounds by returning our patent portfolio titled Compounds and Methods for Treating Candidiasis and Aspergillus Infections back to the university co-licensor. The Company at this time does not have any active gram-negative or anti-fungal programs and therefore has decided not to pay for the maintenance of these Patent Rights. The net book value of the impaired patent as of March 31, 2018 is not material. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 5 - Accrued Expenses | Accrued expenses consisted of the following (rounded to nearest thousand): March 31, June 30, 2018 2017 Accrued research and development consulting fees $ 281,000 $ 673,000 Accrued rent (Note 8) – related parties 13,000 21,000 Accrued interest – (Note 9) related parties 12,000 17,000 Total $ 306,000 $ 711,000 |
Accrued Salaries and Payroll Ta
Accrued Salaries and Payroll Taxes - Related Parties And Other | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 6 - Accrued Salaries and Payroll Taxes - Related Parties And Other | Accrued salaries and payroll taxes consisted of the following (rounded to nearest thousand): March 31, June 30, 2018 2017 Accrued salaries - related parties $ 2,823,000 $ 2,823,000 Accrued payroll taxes - related parties 130,000 130,000 Accrued employee bonuses - 86,000 Withholding tax - payroll 64,000 105,000 Total $ 3,017,000 $ 3,144,000 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 7 - Commitments and Contingencies | Lease Commitments Operating Leases Rental Property The Company 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 $18,000. Innovative Medical Research Inc., a company owned by Leo Ehrlich and Dr. Krishna Menon, officers of the Company, has co-signed the lease and subleases 200 square feet of space previously used by the Company and pays the Company $900 per month. As of March 31, 2018, future minimum lease payments to Cummings Properties required under the non-cancelable operating lease are as follows (rounded to nearest thousand): Year ending June 30, 2018 $ 54,000 2019 54,000 Total minimum payments $ 108,000 Rent expense, net of lease income, under this operating lease agreement was approximately $53,000 and $52,000 for the three months ended March 31, 2018 and 2017, respectively and was approximately $157,000 and $153,000 for the nine months ended March 31, 2018 and 2017, respectively. Before September 2013, the Company paid rent to Kard Scientific for office space and details are shown at Note 8 - Related Party Transactions below. Operating Leases - Equipment We leased equipment under a non-cancelable operating lease that expired in April, 2018. As of March 31, 2018, there was no future minimum rental commitment for our operating lease for the next twelve months. Contractual Commitments The Company has total contractual minimum commitments of approximately $1.0 million to contract research organizations as of March 31, 2018. Expenses are recognized when services are performed by the contract research organizations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 8 - Related Party Transactions | Office Lease Dr. Menon, the Company’s principal shareholder, President of Research, 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, and since September 1, 2013, the Company no longer leases space from KARD. At March 31, 2018 and June 30, 2017, rent payable to KARD of approximately $13,000 and $21,000, respectively, were included in accrued expenses. In September 2013, the Company 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 $18,000. The Company had taken over the space occupied by KARD. In addition, Innovative Medical Research Inc., (“Innovative Medical”) a company owned by Mr. Ehrlich and Dr. Menon, officers of the Company, has co-signed the lease and rents approximately 200 square feet of office space, the space previously used by the Company and pays the Company $900 per month, the same amount the Company previously paid KARD. Innovative Medical paid total rent of approximately $3,000 and $9,000 to the Company for both of the three months and nine months ended March 31, 2018 and 2017 and the rental payment was offset with the accrued rent owed to KARD. Clinical Studies The Company previously 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 now has its own research study capabilities and no longer uses KARD. At March 31, 2018 and June 30, 2017, the accrued research and development expenses payable to KARD was approximately $1,486,000 and this amount was included in accounts payable. Other related party transactions are disclosed in Note 9 below. |
Convertible Note Payable - Rela
Convertible Note Payable - Related Party | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 9 - Convertible 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 Class A 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 (approximate) $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 this 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 principal 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 March 31, 2018 and June 30, 2017, approximately $12,000 and $17,000, respectively, is the accrued interest payable on this note. At March 31, 2018 and June 30, 2017, principal balance of this demand note was approximately $2,022,000. |
Equity Incentive Plans, Stock-B
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 10 - Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding | Current Equity Incentive Plan 2016 Equity Incentive Plan On June 30, 2016, the Board of Directors adopted the Companys 2016 Equity Incentive Plan (the 2016 Plan). The 2016 Plan became effective upon adoption by the Board of Directors on June 30, 2016. Up to 20,000,000 shares of the Companys Class A common stock may be issued under the 2016 Plan (subject to adjustment as described in the 2016 Plan); provided that (1) no Outside Director (as defined in the 2016 Plan) may be granted awards covering more than 250,000 shares of common stock in any year and (2) no participant shall be granted, during any one year period, options to purchase common stock and stock appreciation rights with respect to more than 4,000,000 shares of common stock in the aggregate or any other awards with respect to more than 2,500,000 shares of common stock in the aggregate. The 2016 Plan permits the grant of ISOs, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards and performance compensation awards to employees, directors, and consultants of the Company and its affiliates. In connection with adoption of the 2016 Plan, the Board of Directors also approved forms of Incentive Stock Option Agreement for Employees, Non-qualified Stock Option Agreement for Employees, Non-qualified Stock Option Agreement for Non-Employee Directors, Restricted Stock Award Agreement for Employees and Restricted Stock Award Agreement for Non-Employee Directors that will be utilized by the Company to grant options and restricted shares under the 2016 Plan. Stock Options Issued and Outstanding The following table summarizes all stock option activity under the Companys equity incentive plans: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2017 40,655,245 $ 0.22 3.61 $ 31,662,730 Granted 1,070,826 0.75 8.14 Forfeited/expired (277,924 ) 2.44 Outstanding at March 31, 2018 41,448,147 0.22 3.01 $ 14,819,300 Exercisable at March 31, 2018 40,452,299 0.21 2.87 $ 14,819,300 The fair value of options granted for the nine months ended March 31, 2018 and 2017 was estimated on the date of grant using the Black Scholes model that uses assumptions noted in the following table. Nine months ended March 31, 2018 2017 Expected term (in years) 5 - 10 3 - 10 Expected stock price volatility 52.80% to 106.01% 57.63% to 111.62% Risk-free interest rate 2.15% to 2.56% 0.71% to 2.49% Expected dividend yield 0 0 Stock-Based Compensation The Company recognized approximately $265,000 and $336,000 of total stock-based compensation costs related to stock and stock options awards for the three months ended March 31, 2018 and 2017, respectively. The Company recognized approximately $1,665,000 and $1,026,000 of total stock-based compensation costs related to stock and stock options awards for the nine months ended March 31, 2018 and 2017, respectively. The $1,665,000 of total stock-based compensation expense for the nine months ended March 31, 2018 included approximately $677,000 of stock options expense and $988,000 of stock awards. For the nine months ended March 31, 2018 On February 1, 2018, the Company agreed to issue options to purchase 75,000 shares of common stock to each of two consultants for specified services to be provided from February 1, 2018 to January 31, 2019 in accordance with agreements with the consultants. During the nine months ended March 31, 2018, the Company recorded approximately $8,000 of related stock-based compensation. On February 10, 2017, the Company entered into verbal agreements with two consultants to issue options to purchase 50,000 shares of common stock and 75,000 shares of common stock, respectively, to the two consultants for services to be performed from February 13, 2017 to January 31, 2018 in accordance with their consulting agreements. The Company formally signed the agreements with the two consultants on March 13, 2018. During the nine months ended March 31, 2018, the Company recorded approximately $72,000 of related stock-based compensation. On September 1, 2017, the Company agreed to grant to Dr. Arthur Bertolino, the President and Chief Medical Officer of the Company, under the 2016 Plan (i) 1,066,667 shares of restricted stock and (ii) a ten-year option to purchase 617,839 shares of the Companys Class A common stock at an exercise price of $0.705 per share. Both shares and options shall vest upon the earliest to occur of the following: (1) 50% upon the first anniversary of the effective date and the remaining 50% upon the second anniversary of the effective date; (2) shares of the Companys common stock close above $3.00 per share (as may be adjusted for any stock splits or similar actions); (3) the commencement of trading of shares of the Companys common stock on a national securities exchange; or (4) upon a change in control of the Company. The 1,066,667 shares were valued at approximately $752,000 and the 617,839 stock options valued at approximately $399,000. Both shares and options will be amortized over 2 years to September 1, 2019 unless the probability of the other above vesting requirements occurring are met at an earlier date. At March 31, 2018, the Company determined that it was not probable that these accelerated vesting provisions would occur earlier than the scheduled vesting date. During the three months and nine months ended March 31, 2018, the Company recorded approximately $144,000 and $336,000 of total stock-based compensation, respectively. The $144,000 of stock-based compensation expense for the three months ended March 31, 2018 included approximately $50,000 of stock option expense and $94,000 of stock awards. The $336,000 of stock-based compensation expense for the nine months ended March 31, 2018 included approximately $117,000 of stock option expense and $219,000 of stock awards. On September 1, 2017, the Company agreed to grant to Ms. Jane Harness, the Senior Vice President, Clinical Sciences and Portfolio Management of the Company under the 2016 Plan (i) 58,394 shares of restricted stock and (ii) a ten-year option to purchase 172,987 shares of the Companys Class A common stock at an exercise price of $0.705 per share. Both shares and options shall vest upon the earliest to occur of the following: (1) one third upon the first anniversary of the effective date, one third upon the second anniversary of the effective date, and the remaining one third upon the third anniversary of the effective date; or (2) upon a change in control of the Company. The 58,394 shares were valued at approximately $41,000 and the 172,987 stock options valued at approximately $112,000. Both shares and options will be amortized over 3 years to September 1, 2020 unless the other vesting requirements are met sooner. During the three months and nine months ended March 31, 2018, the Company recorded approximately $13,000 and $30,000 of total stock-based compensation, respectively. The $13,000 of stock-based compensation expense for the three months ended March 31, 2018 included approximately $9,000 of stock option expense and $4,000 of stock awards. The $30,000 of stock-based compensation expense for the nine months ended March 31, 2018 included approximately $22,000 of stock option expense and $8,000 of stock awards. On September 1, 2017, the Company agreed to grant to Anne Ponugoti, under the 2016 Plan, ten-year options to purchase 5,000 shares of the Companys common stock at an exercise price of $0.705 per share, which shall vest upon the earliest to occur of the following: (1) one third upon the first anniversary of the effective date, one-third upon the second anniversary of the effective date, and the remaining one-third upon the third anniversary of the effective date; or (2) upon a change in control of the Company. The 5,000 stock options were valued at approximately $3,000 and will be amortized over 3 years to September 1, 2020 unless the other vesting requirements are met sooner. During the three months and nine months ended March 31, 2018, the Company recorded approximately $300 and $700 of stock option expense for this option grant. On January 9, 2017, the Company and Ms. Ponugoti entered into an executive employment agreement as the Companys Associate Director, Clinical Sciences, effective on February 1, 2017. Pursuant to the employment agreement, the Company issued 10,000 shares of restricted stock and options to purchase 30,000 shares of common stock under the 2016 Plan. During the three months and nine months ended March 31, 2018, the Company recorded approximately $3,000 and $9,000 of total stock-based compensation, respectively. The $3,000 of stock-based compensation expense for the three were months ended March 31, 2018 included approximately $2,000 of stock option expense and $1,000 of stock awards. The $10,000 of stock-based compensation expense for the nine months ended March 31, 2018 included approximately $7,000 of stock option expense and $3,000 of stock awards. Purchase of Treasury Stock - cash paid to Federal and State Taxing Authorities arising from the withholding of common shares from officers vested restricted stock grant issuance and issuance of Treasury Stock and the reversal of outstanding stock subscription receivable On September 1, 2017, 19,465 shares of the Companys restricted stock vested to Ms. Harness according to Ms. Harnesss employment agreement. The total taxable compensation to Ms. Harness for the 19,465 vested shares was $14,000, which is priced at the closing stock price on September 1, 2017 at $0.705 a share. The Company issued 12,409 common shares (net share issuance amount), which is approximately 64% of the total vested common share amount of 19,465 common shares due to be issued to Ms. Harness. The remaining 7,056 shares of common stock were withheld from Ms. Harness for the payment of payroll taxes to the Federal and State taxing authorities and these shares withheld are being reported by the Company as treasury stock, at cost, on the Companys accompanying balance sheets. On December 22, 2017, 533,334 shares of the Companys restricted stock vested to Dr. Bertolino according to Dr. Bertolinos employment agreement. The total taxable compensation to Dr. Bertolino for the 533,334 vested shares was $373,334, which is priced at the closing stock price on December 21, 2017 at $0.7 a share. The Company issued 295,286 common shares (net share issuance amount), which is approximately 55% of the total vested common share amount of 533,334 common shares due to be issued to Dr. Bertolino. The remaining 238,048 shares of common stock were withheld from Dr. Bertolino for the payment of payroll taxes to the Federal and State taxing authorities and these shares withheld are being reported by the Company as treasury stock, at cost, on the Companys accompanying balance sheets. In addition, the Company reversed an outstanding stock subscription receivable of $26,000 for 60,000 shares of common stock and recorded this amount as the cost of treasury stock. On February 1, 2018, 3,333 shares of the Companys restricted stock vested to Ms. Anne Ponugoti according to Ms. Ponugotis employment agreement. The total taxable compensation to Ms. Ponugoti for the 3,333 vested shares was $2,433, which is priced at the closing stock price on January 31, 2018 at $0.73 a share. The Company issued 2,645 common shares (net share issuance amount), which is approximately 79% of the total vested common share amount of 3,333 common shares due to be issued to Ms. Ponugoti. The remaining 688 shares of common stock were withheld from Ms. Ponugoti for the payment of payroll taxes to the Federal and State taxing authorities. On February 5, 2018, the Board of Directors approved the retirement of 567,872 shares of its common stock in treasury, which shares are issued but are not outstanding. These shares included the 688 shares withheld from Ms. Ponugoti, as a result, all treasury shares of the Company were retired. There were 0 shares and 262,080 shares of treasury stock outstanding at March 31, 2018 and June 30, 2017, respectively, purchased at a total cumulative cost of $0 and $220,000 at March 31, 2018 and June 30, 2017, respectively. Restricted Stock Awards Outstanding The following summarizes our restricted stock activity for our restricted stock issuances: Weighted Average Grant Number of Date Fair Shares Value Total awards outstanding at June 30, 2017 601,728 $ 1.39 Total shares granted 1,125,061 0.71 Total shares vested (556,132 ) 1.40 Total shares forfeited Total unvested shares outstanding at March 31, 2018 1,170,657 $ 0.73 Scheduled vesting for outstanding restricted stock awards at March 31, 2018 is as follows: Year Ending June 30, 2018 2019 2020 2021 Total Scheduled vesting 0 575,596 575,597 19,464 1,170,657 As of March 31, 2018, there was approximately $0.6 million of net unrecognized compensation cost related to unvested restricted stock-based compensation arrangements. This compensation is recognized on a straight-line basis resulting in approximately $0.4 million of compensation expected to be expensed over the next twelve months, and the total unrecognized stock-based compensation expense having a weighted average recognition period of 1.48 years. For the nine months ended March 31, 2017 Issuances of Common Stock and Stock Options Pursuant to New Employment Agreements On June 27, 2016, the Company and Dr. Bertolino entered into an executive employment agreement as our President and Chief Medical Officer of the Company, effective on June 27, 2016 and the Company agreed to grant to Dr. Bertolino under the Companys 2016 Equity Incentive Plan (i) 1,066,667 shares of restricted stock and (ii) a ten-year option to purchase 617,839 shares of the Companys Class A common stock at an exercise price of $1.39 per share. Both shares and options shall vest upon the earliest to occur of the following: (1) 50% upon the first anniversary of the effective date, and the remaining 50% upon the second anniversary of the effective date (2) completion of both a Phase 2b psoriasis study and a Phase 2 oral mucositis study; (3) the Companys common stock closes above $3.00 per share (as may be adjusted for any stock splits or similar actions); (4) the commencement of trading of the Companys common stock on a national securities exchange (e.g. Nasdaq or the NYSE); or (5) upon a Change in Control of the Company (as defined in the employment agreement). The 1,066,667 shares were valued at approximately $1.5 million, which will be amortized over two years to June 27, 2018. The 617,839 stock options valued at approximately $800,000 and will be exercisable for 10 years at an exercise price of $1.39 per share. During the three months and nine months ended March 31, 2018, the Company recorded approximately $0 and $1,134,000 of total stock-based compensation, respectively. There was no stock-based compensation expense for the three months ended March 31, 2018 for it was fully expensed. The $1,134,000 of stock-based compensation expense for the nine months ended March 31, 2018 included approximately $396,000 of stock option expense and $738,000 of stock awards. In December, 2017 and October, 2017, respectively, the Company was able to conclude both the Phase 2b psoriasis study and a Phase 2 oral mucositis study; therefore the remaining 50% of the shares and options vested to Dr. Bertolino, and all remaining shares and options granted on June 27, 2016 were fully amortized and expensed in December, 2017. On July 18, 2016, the Company issued 7,500 stock options to purchase shares of the Companys common stock to a consultant for services rendered, exercisable for 3 years at $1.38 per share of common stock. The value of these 7,500 options was approximately $4,000. During the three months ended September 30, 2016, the Company recorded approximately $4,000 of stock option expense for this option grant. On September 1, 2016, the Company and Ms. Harness entered into an executive employment agreement as the Companys VP, Clinical Sciences and Portfolio Management, effective on September 1, 2016. Commencing on September 1, 2016, the Company agreed to pay Ms. Harness an annual salary of $250,000. In addition, the Company agreed to grant to Ms. Harness, under the 2016 Plan (i) 58,394 shares of restricted stock, which shall vest upon the earliest to occur of the following: (1) one third upon the first anniversary of the effective date, one-third upon the second anniversary of the effective date, and the remaining one-third upon the third anniversary of the effective date; or (2) upon a Change in Control (as defined in the employment agreement) of the Company, and (ii) ten-year options to purchase 172,987 shares of the Companys common stock were also granted at an exercise price of $1.37 per share, which shall vest upon the earliest to occur of the following: (1) one-third upon the first anniversary of the effective date, and the remaining balance vesting monthly in equal portions over the following 24 months; and (2) upon a Change in Control (as defined in the employment agreement) of the Company. The 58,394 shares were valued at approximately $80,000, which will be amortized over three years to September 1, 2019. The 172,987 stock options were valued at approximately $220,000 and will be exercisable for 10 years at an exercise price of $1.37 per share. They will be amortized over 3 years to September 1, 2019. During the three months and nine months ended March 31, 2018, the Company recorded approximately $25,000 and $75,000 of total stock-based compensation, respectively. The $25,000 of stock-based compensation expense for the three months ended March 31, 2018 included approximately $18,000 of stock option expense and $7,000 of stock awards. The $75,000 of stock-based compensation expense for the nine months ended March 31, 2018 included approximately $54,000 of stock option expense and $21,000 of stock awards. Exercise of options During the three months and nine months ended March 31, 2018 and 2017, there were no stock options exercised. |
Equity Transactions
Equity Transactions | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 11 - Equity Transactions | $30 million Class A Common Stock Purchase Agreement with Aspire Capital On September 6, 2017, the Company entered into a common stock purchase agreement with Aspire Capital, which replaced the prior 2015 $30 million Aspire Capital stock purchase agreement and provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $30.0 million of the Companys common stock over the 36-month term of the Stock Purchase Agreement. The Company issued 300,000 shares of its Class A common stock to Aspire Capital as a commitment fee. The commitment fee of approximately $215,000 is amortized pro-rata as the funding is received. The amortized amount of $41,000 was recorded to additional paid-in capital for the nine months ended March 31, 2018. The unamortized portion is carried on the balance sheet as deferred offering costs and was $173,000 at March 31, 2018. The Company registered the sale of all shares that Aspire Capital will purchase under this common stock purchase agreement. To the extent Aspire Capital purchases shares under this Purchase Agreement and subsequently sells those shares purchased, the other holders of shares of our Class A common stock may experience dilution, which may be substantial. In addition, the sale of a substantial number of shares of our Class A common stock by Aspire Capital, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we might otherwise wish to effect sales. During the period from September 6, 2017 to March 31, 2018, the Company generated proceeds of approximately $5.7 million under the new 2017 agreement with Aspire Capital from the sale of approximately 8.7 million shares of its common stock. As of March 31, 2018, the available balance under the new equity line agreement was approximately $24.3 million. On March 30, 2015, the Company entered into its prior common stock purchase agreement with Aspire Capital, which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $30.0 million of the Companys common stock over the 36-month term of the Purchase Agreement. In consideration for entering into this stock purchase agreement, the Company issued to Aspire Capital 160,000 shares of its Class A common stock as a commitment fee. The commitment fee of approximately $499,000 was amortized as the funding was received. The unamortized portion of deferred offering costs from this stock purchase agreement of $227,000 was recorded to additional paid-in capital in September, 2017, since the Company entered into a new $30 million common stock purchase agreement with Aspire Capital, to replace this prior $30 million 2015 Aspire Capital agreement, on September 6, 2017. During the period from July 1, 2017 to September 5, 2017, the Company generated proceeds of approximately $2.1 million under this 2015 agreement with Aspire Capital, from the sale of approximately 2.6 million shares of its common stock. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Note 12 - Subsequent Events | Equity Transactions From April 1, 2018 to May 9, 2018, the Company has generated additional proceeds of approximately $2.0 million under the Common Stock Purchase Agreement with Aspire Capital from the sale of approximately 8.0 million shares of its common stock. |
Significant Accounting Polici18
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies And Recent Accounting Pronouncements Policies | |
Use of Estimates | The preparation of financial statements in conformity with U.S. 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. |
Net Loss Per Share | Basic and diluted loss per share is computed based on the weighted-average common shares and common share equivalents outstanding during the period. Common share equivalents consist of stock options, convertible notes payable underlying shares and unvested restricted stock. Common share equivalents of 47 million and 46 million shares of common stock were excluded from the computation of diluted loss per share for the nine months ended March 31, 2018 and 2017, respectively, because we incurred net losses for the nine months ended March 31, 2018 and 2017, and the effect of including these potential common shares in the net loss per share calculations would be anti-dilutive and are therefore not included in the calculations. |
Treasury Stock | The Company accounts for treasury stock using the cost method. There were 0 shares and 262,080 shares of treasury stock outstanding, purchased at a total cumulative cost of $0 and $220,000 at March 31, 2018 and June 30, 2017, respectively (see Note 10). Treasury stock, representing shares of the Company’s common stock that have been acquired for payroll tax withholding on vested stock grants, is recorded at its acquisition cost and these shares are not considered outstanding. |
Accounting for Stock Based Compensation | The stock-based compensation expense incurred by the Company 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, an 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 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 is 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 vesting method over the requisite service period of the equity awards. The components of stock-based compensation expense included in the Company’s Condensed Statements of Operations for the three months and nine months ended March 31, 2018 and 2017 are as follows (rounded to nearest thousand): Three months ended March 31 Nine months ended March 31 2018 2017 2018 2017 Research and development expenses Professional fees $ 80,000 $ 5,000 $ 80,000 $ 55,000 Employees’ bonus 41,000 48,000 115,000 110,000 Officers’ bonus 144,000 283,000 1,470,000 861,000 Total stock-based compensation expense $ 265,000 $ 336,000 $ 1,665,000 $ 1,026,000 |
Recent Adopted Accounting Pronouncements | Stock Compensation - In June 2014, the FASB issued ASU 2014-12, CompensationStock Compensation. The amendments in this ASU apply to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target can be achieved after the requisite service period. This ASU is the final version of Proposed ASU EITF-13D, CompensationStock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which has been deleted. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period in which the performance target could be achieved) may differ from the requisite service period. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The implementation of this standard did not have a material impact on the Companys accompanying condensed financial statements. |
Recently Issued Accounting Guidance | In May 2014, the FASB issued authoritative guidance that defines how companies should report revenues from contracts with customers. The standard requires an entity to recognize revenue to depict the transfer of promised goods or 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. It provides companies with a five-step, principles-based model to use in accounting for revenue and supersedes current revenue recognition requirements, including most industry-specific and transaction-specific revenue guidance. In August 2015, the FASB deferred the effective date of the new revenue standard by one year. As a result, the new standard would not be effective for the Company until 2019. In addition, the FASB is allowing companies to early adopt this guidance for non-public entities beginning in fiscal year 2017. The guidance permits an entity to apply the standard retrospectively to all prior periods presented, with certain practical expedients, or apply the requirements in the year of adoption, through a cumulative adjustment. The Company will apply this new guidance when it becomes effective and has not yet selected a transition method. The Company, due to not having any revenue currently and in the foreseeable future, has concluded that the impact of the adoption of this accounting standard on its financial statements will not be material. In February 2016, FASB issued ASU No. 2016-02, “Leases (Topic 842)”. The guidance requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right of use asset representing its right to use the underlying asset for the lease term. The guidance requires the following for finance leases: the right-of-use asset and a lease liability will be initially measured at the present value of the lease payments, in the statement of financial position; interest on the lease liability will be recognized separately from amortization of the right-of-use asset in the statement of comprehensive income; and repayments of the principal portion of the lease liability will be classified within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. The guidance requires the following for operating leases: the right-of-use asset and a lease liability will be initially measured at the present value of the lease payments, in the statement of financial position; a single lease cost will be recognized, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; and all cash payments will be classified within operating activities in the statement of cash flows. Under Topic 842 the accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. The amendments in Topic 842 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management has determined that based on current accounting and lease contract information the adoption of ASU No. 2016-02 is not expected to have a significant impact on the Company’s financial position, results of operations and disclosures. However, management is continually evaluating the future impact of ASU No. 2016-02 based on changes in the Company’s financial statements through the period of adoption. Intangibles, Goodwill and Other Statement of Cash Flows |
Significant Accounting Polici19
Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
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 | Three months ended March 31 Nine months ended March 31 2018 2017 2018 2017 Research and development expenses Professional fees $ 80,000 $ 5,000 $ 80,000 $ 55,000 Employees’ bonus 41,000 48,000 115,000 110,000 Officers’ bonus 144,000 283,000 1,470,000 861,000 Total stock-based compensation expense $ 265,000 $ 336,000 $ 1,665,000 $ 1,026,000 |
Patents, net (Tables)
Patents, net (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Patents Net Tables | |
Schedule of patents | Useful life March 31, June 30, (years) 2018 2017 Purchased Patent Rights – Brilacidin, and related compounds 14 $ 4,082,000 $ 4,082,000 Purchased Patent Rights – Anti-microbial – surfactants and related compounds 12 144,000 144,000 Patents – Kevetrin and related compounds 17 1,417,000 1,308,000 5,643,000 5,534,000 Less: Accumulated amortization for Brilacidin, Anti-microbial- surfactants and related compounds (1,386,000 ) (1,158,000 ) Accumulated amortization for Patents –Kevetrin and related compounds (225,000 ) (164,000 ) $ 4,032,000 $ 4,212,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Accrued Expenses Tables | |
Schedule of accrued expenses | March 31, June 30, 2018 2017 Accrued research and development consulting fees $ 281,000 $ 673,000 Accrued rent (Note 8) – related parties 13,000 21,000 Accrued interest – (Note 9) related parties 12,000 17,000 Total $ 306,000 $ 711,000 |
Accrued Salaries and Payroll 22
Accrued Salaries and Payroll Taxes - Related Parties And Other (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Accrued Salaries And Payroll Taxes - Related Parties And Other Tables | |
Schedule of accrued salaries and payroll taxes | March 31, June 30, 2018 2017 Accrued salaries - related parties $ 2,823,000 $ 2,823,000 Accrued payroll taxes - related parties 130,000 130,000 Accrued employee bonuses - 86,000 Withholding tax - payroll 64,000 105,000 Total $ 3,017,000 $ 3,144,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Tables | |
Future minimum lease payments required under the non-cancelable operating lease | Year ending June 30, 2018 $ 54,000 2019 54,000 Total minimum payments $ 108,000 |
Equity Incentive Plans, Stock24
Equity Incentive Plans, Stock-Based Compensation and Warrants (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Equity Incentive Plans Stock-based Compensation And Warrants Tables | |
Schedule of stock option activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2017 40,655,245 $ 0.22 3.61 $ 31,662,730 Granted 1,070,826 0.75 8.14 Forfeited/expired (277,924 ) 2.44 Outstanding at March 31, 2018 41,448,147 0.22 3.01 $ 14,819,300 Exercisable at March 31, 2018 40,452,299 0.21 2.87 $ 14,819,300 |
Valuation assumptions for stock options/warrants and SARs | Nine months ended March 31, 2018 2017 Expected term (in years) 5 - 10 3 - 10 Expected stock price volatility 52.80% to 106.01% 57.63% to 111.62% Risk-free interest rate 2.15% to 2.56% 0.71% to 2.49% Expected dividend yield 0 0 |
Schedule of Restricted Stock Award Activity | Weighted Average Grant Number of Date Fair Shares Value Total awards outstanding at June 30, 2017 601,728 $ 1.39 Total shares granted 1,125,061 0.71 Total shares vested (556,132 ) 1.40 Total shares forfeited Total unvested shares outstanding at March 31, 2018 1,170,657 $ 0.73 |
Schedule of vesting outstanding restricted stock | Year Ending June 30, 2018 2019 2020 2021 Total Scheduled vesting 0 575,596 575,597 19,464 1,170,657 |
Basis of Presentation and Nat25
Basis of Presentation and Nature of Operations (Details Narrative) | 9 Months Ended |
Mar. 31, 2018 | |
Basis Of Presentation And Nature Of Operations Details Narrative | |
State of incorporation | Nevada |
Date of incorporation | Aug. 1, 2005 |
Going Concern and Liquidity (De
Going Concern and Liquidity (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | |||||
Sep. 05, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 06, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated deficit | $ (81,054,000) | $ (81,054,000) | $ (81,054,000) | $ (69,553,000) | |||||
Cash and cash equivalents | 1,336,000 | $ 5,613,000 | 1,336,000 | 1,336,000 | $ 5,613,000 | 4,141,000 | $ 6,310,000 | ||
Net cash used in operating activities | (10,362,000) | (7,949,000) | |||||||
Net loss | (2,449,000) | (3,903,000) | (11,501,000) | (10,289,000) | |||||
Working capital (deficit) | (8,000,000) | $ (6,100,000) | (8,000,000) | (8,000,000) | $ (6,100,000) | ||||
Current liabilities | 9,467,000 | 9,467,000 | 9,467,000 | $ 10,576,000 | |||||
Related parties liabilities | 6,500,000 | 6,500,000 | 6,500,000 | ||||||
Total budgeted expenditures | (12,200,000) | ||||||||
Total available balance | $ 24,300,000 | $ 24,300,000 | $ 24,300,000 | ||||||
Aspire Capital Fund LLC [Member] | 2017 agreement [Member] | |||||||||
Common stock purchase agreement shares sold | 8,700,000 | ||||||||
Additional proceeds from common stock purchase agreement | $ 5,700,000 | ||||||||
Aspire Capital Fund LLC [Member] | April 2015 agreement [Member] | |||||||||
Common stock purchase agreement shares sold | 2,600,000 | ||||||||
Additional proceeds from common stock purchase agreement | $ 2,100,000 | ||||||||
Aspire Capital Fund LLC [Member] | Stock purchase agreement [Member] | |||||||||
Shares reserved for future issuance under agreement, Value | $ 30,000,000 | ||||||||
Share reserved for future issuance, Value cancelled | $ 30,000,000 |
Significant Accounting Polici27
Significant Accounting Policies and Recent Accounting Pronouncements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Research and development expenses: | ||||
Professional fees | $ 195,000 | $ 201,000 | $ 525,000 | $ 562,000 |
Total stock-based compensation expense | 400,000 | |||
Research and Development Expense [Member] | ||||
Research and development expenses: | ||||
Professional fees | 80,000 | 5,000 | 80,000 | 55,000 |
Employees' bonus | 41,000 | 48,000 | 115,000 | 110,000 |
Officers' bonus | 144,000 | 283,000 | 1,470,000 | 861,000 |
Total stock-based compensation expense | $ 265,000 | $ 336,000 | $ 1,665,000 | $ 1,026,000 |
Significant Accounting Polici28
Significant Accounting Policies and Recent Accounting Pronouncements (Detail Narrative) - USD ($) | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2017 | |
Significant Accounting Policies And Recent Accounting Pronouncements Detail Narrative | |||
Treasury Stock value | 0 | 262,080 | |
Purchase of treasury stock, value | $ 0 | $ 220,000 | |
Diluted earnings (loss) per share | 47,000,000 | 46,000,000 |
Patents, net (Details)
Patents, net (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2017 | |
Purchased Patent Rights | $ 5,643,000 | $ 5,534,000 |
Patent costs - net | $ 4,032,000 | 4,212,000 |
Patents [Member] | ||
Useful life | 14 years | |
Purchased Patent Rights | $ 4,082,000 | 4,082,000 |
Accumulated amortization | $ (1,386,000) | (1,158,000) |
Patents Two [Member] | ||
Useful life | 12 years | |
Purchased Patent Rights | $ 144,000 | 144,000 |
Patents Three [Member] | ||
Useful life | 17 years | |
Purchased Patent Rights | $ 1,417,000 | 1,308,000 |
Accumulated amortization | $ (225,000) | $ (164,000) |
Patents, net (Details Narrative
Patents, net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Amortization expense | $ 96,000 | $ 95,000 | $ 289,000 | $ 277,000 |
Minimum and Intangible Assets - Patent (Member) | ||||
Estimated remaining useful lives of the assets | 12 years | |||
Amortization period | 7 years 5 months 5 days | |||
Maxiimum and Intangible Assets - Patent (Member) | ||||
Estimated remaining useful lives of the assets | 17 years | |||
Amortization period | 16 years 9 months | |||
Year 2026 [Member] | ||||
Estimated annual amortization expense | $ 374,000 | |||
Year 2019 - 2025 [Member] | ||||
Estimated annual amortization expense | 383,000 | |||
Year 2018 [Member] | ||||
Estimated annual amortization expense | 96,000 | |||
Year 2027 [Member] | ||||
Estimated annual amortization expense | 371,000 | |||
Year 2028 [Member] | ||||
Estimated annual amortization expense | 134,000 | |||
Year 2029 - 2032 [Member] | ||||
Estimated annual amortization expense | 80,000 | |||
Year 2033 [Member] | ||||
Estimated annual amortization expense | 41,000 | |||
Year 2034 [Member] | ||||
Estimated annual amortization expense | 10,000 | |||
Year 2035 [Member] | ||||
Estimated annual amortization expense | $ 2,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Mar. 31, 2018 | Jun. 30, 2017 |
Accrued Expenses Details | ||
Accrued research and development consulting fees | $ 281,000 | $ 673,000 |
Accrued rent (Note 8) - related parties | 13,000 | 21,000 |
Accrued interest (Note 9) - related parties | 12,000 | 17,000 |
Total | $ 306,000 | $ 711,000 |
Accrued Salaries and Payroll 32
Accrued Salaries and Payroll Taxes - Related Parties And Other (Details) - USD ($) | Mar. 31, 2018 | Jun. 30, 2017 |
Accrued Salaries And Payroll Taxes - Related Parties And Other Details | ||
Accrued salaries - related parties | $ 2,823,000 | $ 2,823,000 |
Accrued payroll taxes - related parties | 130,000 | 130,000 |
Accrued salaries - employees | 86,000 | |
Withholding tax - payroll | 64,000 | 105,000 |
Total | $ 3,017,000 | $ 3,144,000 |
Commitments and Contingencies33
Commitments and Contingencies (Details) | Mar. 31, 2018USD ($) |
Year ending June 30, | |
2,018 | $ 54,000 |
2,019 | 54,000 |
Total minimum payments | $ 108,000 |
Commitments and Contingencies34
Commitments and Contingencies (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018USD ($)ft² | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)ft² | Mar. 31, 2017USD ($) | |
Operating leases, rental expense | $ 53,000 | $ 52,000 | $ 157,000 | $ 153,000 |
Lease term | 5 years | |||
Lease expiry date | Sep. 30, 2018 | |||
Rent expense (monthly) | $ 18,000 | |||
Lease commencement date | Oct. 1, 2013 | |||
Total contractual commitments | $ 1,000,000 | $ 1,000,000 | ||
Sublease [Member] | ||||
Rental income | $ 900 | |||
Area used by officers | ft² | 200 | 200 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2018USD ($)ft² | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)ft² | Mar. 31, 2017USD ($) | Jun. 30, 2017USD ($) | |
Lease term | 5 years | ||||
Rent expense (monthly) | $ 18,000 | ||||
Lease commencement date | Oct. 1, 2013 | ||||
Lease expiry date | Sep. 30, 2018 | ||||
Sublease [Member] | |||||
Rental income | $ 900 | ||||
Area used by officers | ft² | 200 | 200 | |||
Clinical Studies [Member] | |||||
Accrued research and development expenses | $ 1,486,000 | $ 1,486,000 | $ 1,486,000 | ||
Innovative Medical Research Inc [Member] | |||||
Accrued rent expenses | 3,000 | $ 3,000 | 9,000 | $ 9,000 | |
Kard Scientific [Member] | |||||
Rent payable | $ 13,000 | $ 13,000 | $ 21,000 |
Convertible Note Payable - Re36
Convertible Note Payable - Related Party (Details Narrative) - USD ($) | May 07, 2012 | Jun. 30, 2012 | Jun. 30, 2011 | Jun. 30, 2010 | Mar. 31, 2018 | Jun. 30, 2017 | May 08, 2012 | Mar. 31, 2012 | Dec. 31, 2010 | Oct. 01, 2009 |
Accrued interest - related parties | $ 12,000 | $ 17,000 | ||||||||
Principal balance of demand notes | $ 2,022,000 | $ 2,022,000 | ||||||||
Ehrlich Promissory Note C [Member] | ||||||||||
Accrued interest - related parties | $ 97,000 | |||||||||
Principal balance of demand notes | $ 2,248,000 | |||||||||
Interest rate | 9.00% | |||||||||
Common stock price per share | $ 0.50 | |||||||||
Equity Incentive shares | 2,000,000 | |||||||||
Options exercisable, price per share | $ 0.51 | |||||||||
Closing bid price per share | $ 0.46 | |||||||||
Percentage of closing bid price | 110.00% | |||||||||
Equity incentive options exercisable period | 10 years | |||||||||
Mr. Ehrlich [Member] | ||||||||||
Principal balance of demand notes | $ 2,022,000 | $ 2,002,000 | ||||||||
Additional loan amount | $ 20,000 | $ 997,000 | $ 973,000 | |||||||
Ehrlich Promissory Notes A and B [Member] | ||||||||||
Interest rate | 9.00% | |||||||||
Maximum [Member] | Ehrlich Promissory Note C [Member] | ||||||||||
Interest rate | 10.00% | |||||||||
Minimum [Member] | Ehrlich Promissory Note C [Member] | ||||||||||
Interest rate | 9.00% |
Equity Incentive Plans, Stock37
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details) | 9 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Number of Outstanding, Beginning Balance | shares | 601,728 |
Number of Outstanding, Ending Balance | shares | 1,170,657 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1.39 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.73 |
Stock Options [Member] | |
Number of Outstanding, Beginning Balance | shares | 40,655,245 |
Granted | shares | 1,070,826 |
Forfeited/expired | shares | (277,924) |
Number of Outstanding, Ending Balance | shares | 41,448,147 |
Number of Outstanding, Exercisable | shares | 40,452,299 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.22 |
Granted | $ / shares | 0.75 |
Forfeited/expired | $ / shares | 2.44 |
Weighted Average Exercise Price, Ending Balance | $ / shares | 0.22 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.21 |
Weighted average remaining contractual life (Years), Outstanding, Beginning Balance | 3 years 7 months 10 days |
Granted | 8 years 1 month 20 days |
Weighted average remaining contractual life (Years), Outstanding, Ending Balance | 3 years 4 days |
Weighted average remaining contractual life (Years), Exercisable | 2 years 10 months 13 days |
Aggregate intrinsic value, Beginning Balance | $ | $ 31,662,730 |
Aggregate intrinsic value, Ending Balance | $ | 14,819,300 |
Aggregate intrinsic value, Exercisable | $ | $ 14,819,300 |
Equity Incentive Plans, Stock38
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 1) - Stock Options [Member] | 9 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Expected term (in years) | 5 years | 3 years |
Expected stock price volatility | 52.80% | 57.63% |
Risk-free interest rate | 2.15% | 0.71% |
Expected dividend yield | ||
Maximum [Member] | ||
Expected term (in years) | 10 years | 10 years |
Expected stock price volatility | 106.01% | 111.62% |
Risk-free interest rate | 2.56% | 2.49% |
Expected dividend yield |
Equity Incentive Plans, Stock39
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 2) | 9 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Equity Incentive Plans Stock-based Compensation Exercise Of Options And Warrants Outstanding Details 2 | |
Number of Outstanding, Beginning Balance | shares | 601,728 |
Total shares granted | shares | 1,125,061 |
Total shares vested | shares | (556,132) |
Total shares forfeited | shares | |
Number of Outstanding, Ending Balance | shares | 1,170,657 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1.39 |
Total shares granted | $ / shares | 0.71 |
Total shares vested | $ / shares | 1.40 |
Total shares forfeited | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.73 |
Equity Incentive Plans, Stock40
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 3) - shares | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Scheduled vesting | 1,170,657 | ||||
Restricted Stock [Member] | |||||
Scheduled vesting | 19,464 | 575,597 | 575,596 | 0 |
Equity Incentive Plans, Stock41
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock based compensation | $ 265,000 | $ 336,000 | $ 1,665,000 | $ 1,026,000 | ||||
Stock option expenses | 677,000 | |||||||
Restricted stock awards | 988,000 | |||||||
Cash | $ 1,336,000 | $ 5,613,000 | 1,336,000 | 5,613,000 | $ 4,141,000 | $ 6,310,000 | ||
Proceeds from exercise of rights | ||||||||
Reversal of subscription receivable to treasury stock | $ 26,000 | |||||||
Shares issued | 60,000 | 60,000 | ||||||
Treasury stock, shares outstanding | 0 | 0 | 262,080 | |||||
Treasury Stock | $ 0 | $ 0 | $ 220,000 | |||||
Unrecognized compensation cost related to unvested restricted stock-based compensation | $ 600,000 | $ 600,000 | ||||||
Compensation cost not yet recognized, period for recognition | 1 year 5 months 23 days | |||||||
Expected share based compensation expenses | $ 400,000 | |||||||
Common Class A | ||||||||
Common stock shares issued | 147,091,427 | 147,091,427 | 135,536,501 | |||||
Common stock per shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock value | $ 15,000 | $ 15,000 | $ 14,000 | |||||
On June 30, 2016 [Member] | 2016 Equity Incentive Plan [Member] | ||||||||
Stock option vested, description | Up to 20,000,000 shares of the Companys Class A common stock may be issued under the 2016 Plan (subject to adjustment as described in the 2016 Plan); provided that (1) no Outside Director (as defined in the 2016 Plan) may be granted awards covering more than 250,000 shares of common stock in any year and (2) no participant shall be granted, during any one year period, options to purchase common stock and stock appreciation rights with respect to more than 4,000,000 shares of common stock in the aggregate or any other awards with respect to more than 2,500,000 shares of common stock in the aggregate. | |||||||
Board of Directors [Member] | On February 5, 2018 [Member] | ||||||||
Common stock shares withheld | 688 | |||||||
Treasury Stock | $ 567,872 | $ 567,872 | ||||||
Ms. Ponugoti [Member] | Stock Options [Member] | ||||||||
Restricted stock | 10,000 | 10,000 | ||||||
Stock based compensation | $ 3,000 | $ 9,000 | ||||||
Stock option expenses | 2,000 | 7,000 | ||||||
Restricted stock awards | $ 1,000 | 3,000 | ||||||
Stock based compensation expense | $ 10,000 | |||||||
Ms. Ponugoti [Member] | On February 1, 2018 [Member] | Employment Agreement [Member] | ||||||||
Restricted stock | 3,333 | 3,333 | ||||||
Common stock closing price | $ 0.73 | $ 0.73 | ||||||
Stock based compensation | $ 2,433 | |||||||
Options vested or expected to vest | 3,333 | 3,333 | ||||||
Stock issued, Shares | 2,645 | |||||||
Common stock shares withheld | 688 | |||||||
Vested percent | 79.00% | |||||||
Consultant One [Member] | On February 1, 2018 [Member] | Stock Options [Member] | ||||||||
Stock based compensation | $ 8,000 | |||||||
Stock issued, Shares | 75,000 | |||||||
Consultant One [Member] | On February 10, 2017 [Member] | Stock Options [Member] | ||||||||
Stock based compensation | $ 72,000 | |||||||
Stock issued, Shares | 75,000 | |||||||
Consultant [Member] | On February 1, 2018 [Member] | Stock Options [Member] | ||||||||
Stock based compensation | $ 8,000 | |||||||
Stock issued, Shares | 75,000 | |||||||
Consultant [Member] | On February 10, 2017 [Member] | Stock Options [Member] | ||||||||
Stock based compensation | $ 72,000 | |||||||
Stock issued, Shares | 50,000 | |||||||
Consultant [Member] | On July 18, 2016 [Member] | Stock Options [Member] | ||||||||
Exercisable period | 3 years | |||||||
Stock option expenses | $ 4,000 | |||||||
Stock options to purchase shares | 7,500 | |||||||
Stock options to purchase shares, value | $ 4,000 | |||||||
Common stock per shares | $ 1.38 | $ 1.38 | ||||||
Ms. Jane Harness [Member] | ||||||||
Exercisable period | 3 years | |||||||
Stock option vested, description | approximately 64% of the total vested common share amount of 19,465 common shares due to be issued to Ms. Harness. | |||||||
Stock issued, Shares | 12,409 | |||||||
Common stock shares withheld | 7,056 | |||||||
Ms. Jane Harness [Member] | Stock Options [Member] | ||||||||
Exercisable period | 3 years | |||||||
Stock based compensation | $ 13,000 | $ 30,000 | ||||||
Stock option expenses | 9,000 | 22,000 | ||||||
Restricted stock awards | 4,000 | $ 8,000 | ||||||
Stock options to purchase shares | 172,987 | |||||||
Stock options to purchase shares, value | $ 112,000 | |||||||
Ms. Jane Harness [Member] | On September 1, 2016 [Member] | ||||||||
Exercise price | $ 1.37 | |||||||
Exercisable period | 10 years | |||||||
Restricted stock | 58,394 | 58,394 | ||||||
Stock option vested, description | i) 58,394 shares of restricted stock, which shall vest upon the earliest to occur of the following: (1) one third upon the first anniversary of the effective date, one-third upon the second anniversary of the effective date, and the remaining one-third upon the third anniversary of the effective date; or (2) upon a Change in Control (as defined in the employment agreement) of the Company | |||||||
Stock based compensation | 25,000 | 75,000 | ||||||
Stock option expenses | 18,000 | 54,000 | ||||||
Restricted stock awards | $ 7,000 | $ 21,000 | ||||||
Stock options to purchase shares | 172,987 | |||||||
Stock options to purchase shares, value | $ 220,000 | |||||||
Stock option exercise price | $ 1.37 | $ 1.37 | ||||||
Stock issued, Shares | 58,394 | |||||||
Stock issued, Value | $ 80,000 | |||||||
Annual salary | $ 250,000 | |||||||
Ms. Jane Harness [Member] | On September 1, 2017 [Member] | ||||||||
Common stock closing price | $ 0.705 | $ 0.705 | ||||||
Stock based compensation | $ 14,000 | |||||||
Options vested or expected to vest | 19,465 | 19,465 | ||||||
Restricted stock forfeited | 19,465 | |||||||
Ms. Jane Harness [Member] | On September 1, 2017 [Member] | Common Class A | ||||||||
Exercisable period | 10 years | |||||||
Restricted stock | 58,394 | 58,394 | ||||||
Stock option vested, description | (1) one third upon the first anniversary of the effective date, one third upon the second anniversary of the effective date, and the remaining one third upon the third anniversary of the effective date | |||||||
Stock options to purchase shares | 172,987 | |||||||
Stock option exercise price | $ 0.705 | $ 0.705 | ||||||
Stock issued, Shares | 58,394 | |||||||
Stock issued, Value | $ 41,000 | |||||||
Dr. Arthur Bertolino [Member] | ||||||||
Exercisable period | 2 years | |||||||
Stock based compensation | $ 0 | 1,134,000 | ||||||
Stock option expenses | 396,000 | |||||||
Restricted stock awards | $ 738,000 | |||||||
Dr. Arthur Bertolino [Member] | Stock Options [Member] | ||||||||
Exercisable period | 2 years | |||||||
Stock based compensation | 144,000 | $ 336,000 | ||||||
Stock option expenses | 50,000 | 117,000 | ||||||
Restricted stock awards | $ 94,000 | $ 219,000 | ||||||
Stock options to purchase shares | 617,839 | |||||||
Stock options to purchase shares, value | $ 399,000 | |||||||
Dr. Arthur Bertolino [Member] | Stock option [Member] | ||||||||
Exercisable period | 10 years | |||||||
Stock options to purchase shares | 617,839 | |||||||
Stock options to purchase shares, value | $ 800,000 | |||||||
Stock option exercise price | $ 1.39 | |||||||
Stock issued, Shares | 1,066,667 | |||||||
Stock issued, Value | $ 1,500,000 | |||||||
Dr. Arthur Bertolino [Member] | On June 27, 2016 [Member] | Common Class A | ||||||||
Exercisable period | 10 years | |||||||
Restricted stock | 1,066,667 | 1,066,667 | ||||||
Stock option vested, description | (1) 50% upon the first anniversary of the effective date, and the remaining 50% upon the second anniversary of the effective date | |||||||
Common stock closing price | $ 3 | $ 3 | ||||||
Stock option exercise price | $ 1.39 | $ 1.39 | ||||||
Stock issued, Shares | 617,839 | |||||||
Dr. Arthur Bertolino [Member] | On September 1, 2017 [Member] | Common Class A | ||||||||
Exercisable period | 10 years | |||||||
Restricted stock | 1,066,667 | 1,066,667 | ||||||
Stock option vested, description | (1) 50% upon the first anniversary of the effective date, and the remaining 50% upon the second anniversary of the effective date | |||||||
Common stock closing price | $ 3 | $ 3 | ||||||
Stock options to purchase shares | 617,839 | |||||||
Stock option exercise price | 0.705 | $ 0.705 | ||||||
Stock issued, Shares | 1,066,667 | |||||||
Stock issued, Value | $ 752,000 | |||||||
Dr. Bertolino [Member] | ||||||||
Stock option vested, description | approximately 55% of the total vested common share amount of 533,334 common shares due to be issued to Dr. Arthur P. Bertolino | |||||||
Stock issued, Shares | 295,286 | |||||||
Common stock shares withheld | 238,048 | |||||||
Dr. Bertolino [Member] | On December 22, 2017 [Member] | ||||||||
Common stock closing price | $ 0.7 | $ 0.7 | ||||||
Stock based compensation | $ 373,334 | |||||||
Options vested or expected to vest | 533,334 | 533,334 | ||||||
Restricted stock forfeited | 533,334 | |||||||
Anne Ponugoti [Member] | Stock Options [Member] | ||||||||
Exercisable period | 3 years | |||||||
Restricted stock | 5,000 | 5,000 | ||||||
Stock option vested, description | (1) one third upon the first anniversary of the effective date, one-third upon the second anniversary of the effective date, and the remaining one-third upon the third anniversary of the effective date | |||||||
Stock option expenses | $ 300 | $ 700 | ||||||
Stock options to purchase shares | 5,000 | |||||||
Stock options to purchase shares, value | $ 3,000 | |||||||
Stock option exercise price | $ 0.705 | $ 0.705 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | Sep. 06, 2017 | Mar. 30, 2015 | Sep. 05, 2017 | Mar. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Deferred offering costs | $ 173,000 | $ 173,000 | $ 227,000 | ||||
Total available balance | 24,300,000 | 24,300,000 | |||||
Common Class A | 30 Million Common Stock Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | |||||||
Term of the purchase agreement | 36 months | 36 months | |||||
Deferred offering costs | $ 173,000 | 173,000 | |||||
Common stock shares issued | 300,000 | 160,000 | |||||
Common stock shares sold | 2,600,000 | 8,700,000 | |||||
Proceeds from issuance of common stock | $ 2,100,000 | $ 5,700,000 | |||||
Value of common stock shares issuable under agreement | $ 30,000,000 | $ 30,000,000 | |||||
Amortization of commitment fee, Amount amortized | $ 215,000 | $ 499,000 | |||||
Amortization recorded to additional paid in capital | 41,000 | ||||||
Total available balance | $ 24,300,000 | $ 24,300,000 | |||||
Common Class A | New 30 Million Common Stock Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | |||||||
Deferred offering costs | $ 227,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Aspire Capital Fund LLC [Member] - Equity Transactions [Member] | 1 Months Ended |
May 09, 2018USD ($)shares | |
Common stock shares sold | shares | 8,000,000 |
Common stock shares sold, value | $ | $ 2,000,000 |