Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2018 | Nov. 02, 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 | Sep. 30, 2018 | |
Is Entity's Reporting Status Current? | Yes | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Entity Common Stock, Shares Outstanding | 163,676,190 | |
Is Entity Emerging Growth Company? | false | |
Entity Small Business | false | |
Elected Not To Use the Extended Transition Period | false |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Current Assets: | ||
Cash | $ 306,000 | $ 2,424,000 |
Prepaid expenses and other current assets | 55,000 | 98,000 |
Security deposit | 78,000 | |
Total Current Assets | 361,000 | 2,600,000 |
Other Assets: | ||
Patents - net | 3,705,000 | 3,780,000 |
Equipment - net | 2,000 | 2,000 |
Deferred offering costs - net | 159,000 | 159,000 |
Security deposits | 78,000 | |
Total Other Assets | 3,944,000 | 3,941,000 |
Total Assets | 4,305,000 | 6,541,000 |
Current Liabilities: | ||
Accounts payable - (including related party payables of approximately $1,504,000 and 1,504,000, respectively) | 2,790,000 | 3,185,000 |
Accrued expenses - (including related party accruals of approximately $44,000 and $58,000, respectively) | 174,000 | 266,000 |
Accrued salaries and payroll taxes - (including related party accrued salaries of approximately $3,129,000 and $2,953,000, respectively) | 3,291,000 | 3,219,000 |
Convertible note payable - related party | 2,022,000 | 2,022,000 |
Total Current Liabilities | 8,277,000 | 8,692,000 |
Total Liabilities | 8,277,000 | 8,692,000 |
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 | 83,976,000 | 83,747,000 |
Accumulated deficit | (87,965,000) | (85,915,000) |
Total Stockholders' Deficiency | (3,972,000) | (2,151,000) |
Total Liabilities and Stockholders' Deficiency | 4,305,000 | 6,541,000 |
Common Class A | ||
Stockholders' Deficiency | ||
Common Stock, Value | ||
Common Class B | ||
Stockholders' Deficiency | ||
Common Stock, Value | $ 17,000 | $ 17,000 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Current Liabilities: | ||
Accounts payable, related party payables (in dollars) | $ 1,504,000 | $ 1,504,000 |
Accrued expenses, related party accruals (in dollars) | 44,000 | 58,000 |
Accrued salaries and payroll taxes, due to related parties (in dollars) | $ 3,129,000 | $ 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 |
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) | 163,676,190 | 163,103,927 |
Common Stock, shares outstanding (in shares) | 163,676,190 | 163,103,927 |
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 | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Statements Of Operations | ||
Revenues | ||
Operating expenses: | ||
Research and development expenses | 1,357,000 | 3,805,000 |
General and administrative expenses | 260,000 | 297,000 |
Officers' payroll and payroll tax expenses | 123,000 | 130,000 |
Professional fees | 259,000 | 252,000 |
Total operating expenses | 1,999,000 | 4,484,000 |
Loss from operations | (1,999,000) | (4,484,000) |
Other income (expense) | ||
Interest income | 1,000 | |
Interest expense | (51,000) | (51,000) |
Total other expense - net | (51,000) | (50,000) |
Loss before provision for income taxes | (2,050,000) | (4,534,000) |
Provision for income taxes | ||
Net loss | $ (2,050,000) | $ (4,534,000) |
Basic and diluted loss per share attributable to common stockholders | $ (0.01) | $ (0.03) |
Weighted average number of common shares | 163,284,314 | 137,171,811 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,050,000) | $ (4,534,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock and stock options issued as employee compensation and payment for services rendered and financing costs | 229,000 | 369,000 |
Amortization of patent costs | 94,000 | 96,000 |
Depreciation of equipment | 9,000 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and security deposits | 43,000 | 121,000 |
Accounts payable | (395,000) | 711,000 |
Accrued expenses | (92,000) | (355,000) |
Accrued officers' salaries and payroll taxes | 72,000 | (106,000) |
Net cash used in operating activities | (2,099,000) | (3,689,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Patent costs | (19,000) | (22,000) |
Net cash used in investing activities | (19,000) | (22,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Sales of common stock, net of offering costs | 2,508,000 | |
Purchase of treasury stock | (5,000) | |
Net cash provided by financing activities | 2,503,000 | |
NET DECREASE IN CASH | (2,118,000) | (1,208,000) |
CASH, BEGINNING OF PERIOD | 2,424,000 | 4,141,000 |
CASH, END OF PERIOD | 306,000 | 2,933,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest | 63,000 | 32,000 |
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 | 3 Months Ended |
Sep. 30, 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, 2018, included in our Annual Report on Form 10-K for the year ended June 30, 2018. 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 periods have been made. Results for the interim period 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 Innovation Pharmaceuticals Inc. 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. The Company is a clinical stage biopharmaceutical company and has no customers, products or revenues to date. The Company’s common stock is quoted on 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 | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 2 - Going Concern and Liquidity | These financial statements have been prepared on the assumption that the Company is a going concern, which contemplates the realization of its assets and the settlement of its liabilities in the normal course of operations. 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 September 30, 2018, the Company has an accumulated deficit of approximately $88.0 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. Accordingly, the Company’s planned operations, including total budgeted expenditures of approximately $14 million for the next twelve months, raise substantial doubt about its ability to continue as a going concern. At September 30, 2018, the Company’s cash amounted to $0.3 million and current liabilities amounted to $8.3 million, of which $6.7 million were payables to related parties with no immediate payment terms (See Note 8- Related Party Transactions). Subsequent to September 30, 2018, in October 2018, aggregate gross proceeds of approximately $2.0 million were raised through the sale of convertible preferred stock (see below). The Company had expended substantial funds on its clinical trials and expects to continue our spending on research and development expenditures. The Company’s net cash used in operating activities for the three months ended September 30, 2018 was approximately $2.1 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 three months ended September 30, 2018 and 2017, amounted to $2.1 million and $4.5 million, respectively, and we had a working capital deficit of approximately $7.9 million and $6.1 million, respectively at September 30, 2018 and June 30, 2018. The Company's primary sources of liquidity are cash and cash equivalents as well as issuances of its equity securities. The Company is party to a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”) that 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 Company's common stock over the 36-month term of the Purchase Agreement. As of September 30, 2018, the available balance under the Purchase Agreement is approximately $22.3 million. However, as of date of this report, the conditions for sales under the Purchase Agreement are not satisfied and no sales may occur thereunder. In particular, the Purchase Agreement provides that the Company and Aspire Capital will not affect any sales under the Purchase Agreement when the closing sales price of the Company’s common stock is less than $0.25 per share. Recently, the Company’s common stock has traded below $0.25 per share, and there is substantial uncertainty regarding the Company’s continued ability to sell shares under the Purchase Agreement in order to meet the Company's projected working capital requirements for the next 12 months from the date of the issuance of the financial statements (or available to be issued). After the date of the financial statements, on October 5, 2018, the Company entered into a securities purchase agreement with one multi-family office for the sale of an aggregate of 2,000 shares of the Company’s newly-created Series B 5% convertible preferred stock for aggregate gross proceeds of approximately $2.0 million. Under the securities purchase agreement, the Company issued to the investors warrants to purchase up to an additional 8,000 shares of preferred stock. As the Company cannot be certain the remaining warrants will be exercised, there can be no assurance those funds will be available when needed. The Company expects to seek to obtain additional funding through business development activities (i.e. licensing and partnerships) and future equity issuances. There can be no assurance as to the availability or terms upon which such financing and capital might be available. The Company will be unable to proceed with its planned drug development programs, meet its administrative expense requirements, capital costs, or staffing costs without additional financing from Aspire Capital, the multi-family office or another source of capital. These financial statements do not include any adjustments related to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Sep. 30, 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 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, valuation of equity grants and income tax valuation. 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. Basic 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 56,271,542 and 47,242,085 shares of common stock were excluded from the computation of diluted loss per share for the three months ended September 30, 2018 and 2017, respectively, because we incurred net losses for the three months ended September 30, 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. 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 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 units are measured based on the fair market values of the underlying stock on the dates of grant. We recognize stock-based compensation using the straight-line method. The components of stock-based compensation expense included in the Company’s Condensed Statement of Operations for the three months ended September 30, 2018 and 2017 are as follows (rounded to nearest thousand): Three months ended September 30 2018 2017 Research and development expenses Professional fees $ 13,000 $ - Employees’ bonus 44,000 32,000 Officers’ bonus 172,000 337,000 Total stock-based compensation expense $ 229,000 $ 369,000 Recent Adopted Accounting Pronouncements In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The adoption of ASU 2017-11, during the year ended June 30, 2018, did not have any impact on the financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. This new pronouncement has been adopted in the fourth quarter of fiscal 2018 and did not have a material effect on the Company’s financial position, results of operations or cash flows. 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 June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. The adoption of ASU 2018-07 will not have a material impact on the financial statements. In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02 (Topic 842) Leases, which requires lessees to recognize a right-of-use asset and lease liability for most lease arrangements. The new standard is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, and must be adopted using the modified retrospective approach. The Company intends to adopt the standard on the effective date of December 30, 2018. Interpretations are on-going and could have a material impact on the Company's implementation. Currently, the Company expects that the adoption of the ASU 2016-02 (Topic 842) Leases will have a material impact on its consolidated balance sheet due to the recognition of right-of-use assets and lease liabilities principally for certain leases currently accounted for as operating leases, and expects it to have a material impact on our results of operations. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)” (“ASU No. 2016-15”). ASU No. 2016-15 clarifies how certain cash receipts and payments should be presented in the statement of cash flows. ASU No. 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted the new standard effective July 1, 2018. The application of this standard did not have a material impact on the Company’s unaudited condensed statements of cash flows. |
Patents, net
Patents, net | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 4 - Patents, net | Patents, net consisted of the following (rounded to nearest thousand): Useful life September 30, 2018 June 30, 2018 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 1,238,000 1,219,000 5,464,000 5,445,000 Less: Accumulated amortization for Brilacidin, Anti-microbial- surfactants and related compounds (1,538,000 ) (1,462,000 ) Accumulated amortization for Patents-Kevetrin and related compounds (221,000 ) (203,000 ) Total $ 3,705,000 $ 3,780,000 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 for the three months ended September 30, 2018 and 2017 was approximately $94,000 and $96,000, respectively. At September 30, 2018, the future amortization period for all patents was approximately 6.93 years to 16.75 years. Future estimated annual amortization expenses are approximately $282,000 for the year ending June 30, 2019, $376,000 for each year from 2020 to 2025, $367,000 for the year ending June 30, 2026, $364,000 for the year ending June 30, 2027, $127,000 for the year ending June 30, 2028, $73,000 for the years ending June 30, 2029 through the years ended 2031, $53,000 for the year ending June 30, 2032, $24,000 for the year ending June 30, 2033, $9,000 for the year ending June 30, 2034 and $3,000 for the year ending June 30, 2035. |
Accrued Expenses - Related Part
Accrued Expenses - Related Parties and Other | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 5 - Accrued Expenses Related Parties and Other | Accrued expenses consisted of the following (rounded to nearest thousand): September 30, 2018 June 30, 2018 Accrued research and development consulting fees $ 130,000 $ 208,000 Accrued rent (Note 8) - related parties 8,000 10,000 Accrued interest (Note 9) - related parties 36,000 48,000 Total $ 174,000 $ 266,000 |
Accrued Salaries and Payroll Ta
Accrued Salaries and Payroll Taxes - Related Parties And Other | 3 Months Ended |
Sep. 30, 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): September 30, 2018 June 30, 2018 Accrued salaries - related parties $ 2,999,000 $ 2,823,000 Accrued payroll taxes - related parties 130,000 130,000 Accrued employee bonuses 114,000 214,000 Withholding tax - payroll 48,000 52,000 Total $ 3,291,000 $ 3,219,000 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 7 - Commitments and Contingencies | Lease Commitments Operating Leases – Rental Property On September 30, 2018, the Company’s lease agreement with Cummings Properties automatically renewed. The lease is for a term of five years ending on September 30, 2023, and requires monthly payments of approximately $19,000. As of September 30, 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, 2019 $ 228,000 2020 228,000 2021 228,000 2022 228,000 2023 228,000 $ 1,140,000 Rent expense, net of lease income, under this operating lease agreement was approximately $52,000 and $52,000 for the three months ended September 30, 2018 and 2017, respectively. Contractual Commitments The Company has total non-cancelable contractual minimum commitments of approximately $3 million to contract research organizations as of September 30, 2018. Expenses are recognized when services are performed by the contract research organizations. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 8 - Related Party Transactions | Office Lease The Company charged Kard Scientific $1,800 for space for the two months of July and August, 2018. Dr. Menon, the Company’s principal shareholder, and former President of Research, also serves as the Chief Operating Officer and Director of Kard Scientific. Dr. Menon’s employment was terminated with the Company on September 18, 2018. Dr. Menon continues to serve on the Company’s Board of Directors. As of September 1, 2018, KARD no longer leases space from the Company. 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 no longer uses KARD. At September 30, 2018 and June 30, 2018, 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 | 3 Months Ended |
Sep. 30, 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 approximately $997,000 which brought the total balance of the demand note to approximately $2,002,000. During the year ended June 30, 2012, Mr. Ehrlich loaned the Company an additional $20,000 which brought the balance of 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 years from the date of issuance. As of September 30, 2018 and June 30, 2018, approximately $36,000 and $48,000, respectively, is the accrued interest payable on this note. As of September 30, 2018 and June 30, 2018, 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 | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 10 - Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding | Equity Incentive Plans 2016 Equity Incentive Plan On June 30, 2016, the Board of Directors adopted the Company’s 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 Company’s 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 Company’s equity incentive plans: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2018 41,643,571 0.22 2.76 $ 17,523,113 Granted 795,826 0.40 10.0 Exercised - - Forfeited/expired (50,000 ) 2.49 Outstanding at September 30, 2018 42,389,397 0.22 2.65 $ 3,240,000 Exercisable at September 30, 2018 41,020,636 $ 0.21 2.43 $ 3,240,000 The fair value of options granted for the three months ended September 30, 2018 and 2017 was estimated on the date of grant using the Black Scholes model that uses assumptions noted in the following table. Three months ended September 30, 2018 2017 Expected term (in years) 10 10 Expected stock price volatility 104.11 % 106.01 % Risk-free interest rate 2.86 % 2.15 % Expected dividend yield 0 0 Stock-Based Compensation The Company recognized approximately $229,000 and $369,000 of total stock-based compensation costs related to equity grant awards for the three months ended September 30, 2018 and 2017, respectively. The $229,000 of stock-based compensation expense for the three months ended September 30, 2018 included approximately $102,000 of stock options expense and $127,000 of restricted stock awards. The $369,000 of stock-based compensation expense for the three months ended September 30, 2017 included approximately $141,000 of stock options expense and $228,000 of restricted stock awards. (see Note 11). During the three months ended September 30, 2018 On September 1, 2018, the Company issued to Dr. Arthur Bertolino, the President and Chief Medical Officer of the Company, for his services rendered 1,066,667 shares of common stock, vesting 50% upon the first anniversary of the grant date and 50% upon the second anniversary of the grant date, with acceleration in certain circumstances as provided in the award agreement. The Company also issued 617,839 stock options to purchase shares of the Company’s common stock. These stock options are valued at approximately $225,000, based on the closing bid price as quoted on the OTC on August 31, 2018 at $0.398 per share. These options were issued with an exercise price of $0.398 and vest 50% upon the first anniversary of the grant date and 50% upon the second anniversary of the grant date, with acceleration as defined in award agreement, with a ten year option term. These options have piggyback registration rights. During the three months ended September 30, 2018, the Company recorded approximately $26,000 of stock-based compensation expense for these equity grants, including approximately $9,000 of stock option expense and $17,000 for the stock awards. On September 1, 2018, the Company also issued to Ms. Jane Harness, the Senior Vice President, Clinical Sciences and Portfolio Management of the Company, 58,394 shares of the Company’s common stock, 33 1/3% vesting upon the first anniversary of the grant date, 33 1/3% upon the second anniversary of the grant date and 33 1/3% upon the third anniversary of the grant date, with acceleration in certain circumstances as provided in the award agreement. The Company also issued 172,987 options to purchase common stock. These stock options are valued at approximately $63,000, based on the closing bid price as quoted on the OTC on August 31, 2018 at $0.398 per share. These options were issued with an exercise price of $0.398 and vest 33 1/3% upon the first anniversary of the grant date, 33 1/3% upon the second anniversary of the grant date, and 33 1/3% upon the third anniversary of the grant date, with acceleration of vesting upon certain events. During the three months ended September 30, 2018, the Company recorded approximately $2,000 of stock-based compensation expense for these equity grants, including approximately $1,000 of stock option expense and $1,000 for the stock awards. Restricted Stock Awards Outstanding The following summarizes our restricted stock activity for our restricted stock issuances: Number of Shares Weighted Average Grant Date Fair Value Total awards outstanding at June 30, 2018 1,208,157 $ 0.72 Total shares granted 1,130,061 $ 0.40 Total shares vested (572,263 ) $ 0.73 Total shares forfeited - $ - Total unvested shares outstanding at September 30, 2018 1,765,955 $ 0.51 Scheduled vesting for outstanding restricted stock awards at September 30, 2018 is as follows: Year Ending June 30, 2019 2020 2021 2022 Total Scheduled vesting 28,333 1,142,563 573,929 21,130 1,765,955 As of September 30, 2018, there was approximately $0.8 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 $0.6 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 1.03 years. Exercise of options During the three months ended September 30, 2018 and 2017, there were no stock options exercised. Stock Warrants Outstanding During the three months ended September 30, 2018 and 2017, there were no warrants issued. On June 28, 2018, the Company issued warrants to purchase 8,000,000 shares of its common stock exercisable for 5 years at an exercise price of $0.38 per share. The warrants were recorded within stockholders’ deficiency. The fair value of the warrants issued on June 28, 2018 was estimated on the date of issuance using the Black Scholes Model that uses assumptions noted in the following table. Expected term (in years) 3 Expected stock price volatility 82.36 % Risk-free interest rate 2.73 % Expected dividend yield 0 The following table summarizes the outstanding stock warrants: Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2018 8,000,000 $ 0.38 5.0 $ - Extended - - - Granted - - - Exercised - - - Expired - - - Outstanding at September 30, 2018 8.000.000 $ 0.38 4.75 $ - |
Equity Transactions
Equity Transactions | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 11 - Equity Transactions | On June 28, 2018, we entered into a Securities Purchase Agreement with Aspire Capital Fund, LLC, pursuant to which the Company has agreed to sell up to $7.0 million of shares of the Company’s Class A common stock to Aspire Capital, without an underwriter or placement agent. Pursuant to the Securities Purchase Agreement, and in connection with Aspire Capital’s commitment to purchase additional securities from the Company, on June 28, 2018, the Company agreed to (i) sell to Aspire Capital 5,263,158 shares for a purchase price of $2.0 million and (ii) issue to Aspire Capital 2,736,842 shares of common stock and warrants to purchase 8,000,000 shares of common stock, with such warrants having an exercise price equal to $0.38 per share (the “Commitment Fee”). The Securities Purchase Agreement provides for the sale of up to an additional $5.0 million of the Company’s common stock to Aspire Capital upon the achievement of certain milestones by September 30, 2018, which were not achieved by the Company. The total commitment fee of $2.7 million was allocated to the $2 million offering first based on historical price discounts that Aspire Capital has received and the balance of the commitment fee was allocated to the $5 million of potential future milestone funding from Aspire Capital. The portion of the commitment fee allocated to the $2 million of initial proceeds was approximately $0.5 million and was effectively netted against the $2 million of initial proceeds, resulting in a discounted purchase price of $0.29 per share. The remaining $2.2 million of the commitment fee was allocated to the future milestone funding and was fully expensed under Other Expenses as of June, 30, 2018. As of September 30, 2018, the $5 million of milestone funding was not received and expired. $30 million Class A Common Stock Purchase Agreement with Aspire Capital On September 6, 2017, the Company entered into the 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 Company’s 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 $55,000 was recorded to additional paid-in capital for the year ended June 30, 2018. The unamortized portion is carried on the balance sheet as deferred offering costs and was $159,000 at June 30, 2018 and September 30, 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 September 30, 2018, the Company generated proceeds of approximately $7.7 million under the new 2017 agreement with Aspire Capital from the sale of approximately 9.5 million shares of its common stock. As of September 30, 2018, the available balance under the new equity line agreement was approximately $22.3 million. However, as of date of this report, the conditions for sales under the Purchase Agreement are not satisfied and no sales may occur thereunder. See Note 2, Going Concern and Liquidity. 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 Company’s common stock over the 36-month term of the 2015 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 | 3 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Note 12 - Subsequent Events | On October 5, 2018, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with one multi-family office for the sale of an aggregate of 2,000 shares of the Company’s newly-created Series B 5% convertible preferred stock (the “preferred stock”), for aggregate gross proceeds of approximately $2.0 million. An initial closing for the sale of 1,250 shares of preferred stock closed on October 9, 2018, and a subsequent closing for the sale of 750 shares of preferred stock closed on October 12, 2018. Under the Securities Purchase Agreement, the Company also issued to the investors warrants to purchase up to an additional 8,000 shares of preferred stock. The rights and preferences of the preferred stock are set forth in a Certificate of Designation of Preferences, Rights and Limitations of Series B 5% Convertible Preferred Stock filed with the Nevada Secretary of State on October 5, 2018 (the “Certificate of Designation”). Each share of preferred stock has an initial stated value of $1,080 and may be converted at any time at the holder’s option into shares of the Company’s common stock at a conversion price equal of the lower of (i) $0.31625 per share and (ii) 85% of the lowest volume weighted average price of the Company’s common stock on a trading day during the ten trading days prior to and ending on, and including, the conversion date. The conversion price may be adjusted following certain triggering events and subsequent equity sales and is subject to appropriate adjustment in the event of stock splits, stock dividends, recapitalization or similar events affecting the Company’s common stock. The holders of the preferred stock are limited in the amount of stated value of the preferred stock they can convert on any trading day. The conversion cap limits conversions by the holders to the greater of $75,000 and an amount equal to 30% of the aggregate dollar trading volume of the Company’s common stock for the five trading days immediately preceding, and including, the conversion date. However, the conversion cap will be increased if the trading volume in the first 30 minutes of any trading session exceeds certain trailing average daily volume amounts. In addition, the holders of the preferred stock may not convert shares of preferred stock if, after giving effect to the conversion, a holder together with its affiliates would beneficially own in excess of 9.99% of the outstanding shares of the Company’s common stock. Following 30 days after the initial closing, the Company may elect to redeem the preferred stock for 120% of the aggregate stated value then outstanding, plus all accrued but unpaid dividends and all liquidated damages and other amounts due in respect of the preferred stock. The Company’s right to redeem the preferred stock is contingent upon it having complied with a number of conditions, including compliance with its obligations under the Certificate of Designation. Shares of preferred stock generally have no voting rights, except as required by law and except that the Company shall not take certain actions without the consent of the holders of the preferred stock. Each share of preferred stock was sold together with three warrants: (i) a Series 1 warrant, which entitles the holder thereof to purchase 1.25 shares of preferred stock at $982.50 per share, or 2,500 shares of preferred stock in the aggregate for approximately $2.5 million in aggregate exercise price, for a period of up to nine months following issuance, (ii) a Series 2 warrant, which entitles the holder thereof to purchase 1.25 shares of preferred stock at $982.50 per share, or 2,500 shares of preferred stock in the aggregate for approximately $2.5 million in aggregate exercise price, for a period of up to 15 months following issuance, and (iii) a Series 3 warrant, which entitles the holder thereof to purchase 1.50 shares of preferred stock at $982.50 per share, or 3,000 shares of preferred stock in the aggregate for approximately $2.9 million in aggregate exercise price, for a period of up to 24 months following issuance. Subject to the satisfaction of certain circumstances, the Company had the option to compel the holders to exercise up to $250,000 of the Series 1 warrants 30 days after the initial closing of the sale of the preferred stock. On November 2, 2018, the Company notified the holders of the warrants of the Company’s election to compel the exercise of $250,000 of warrants, which exercise is scheduled to occur on or about November 8, 2018. In addition, subject to the satisfaction of certain circumstances, the Company may call for cancellation any or all of the warrants following 90 days after their issuance, for a payment in cash equal to 8% of the aggregate exercise price of the warrants being called. The warrants subject to any such call notice will be cancelled 30 days following the Company’s payment of the call fee, provided that the warrant holders have not exercised the warrants prior to cancellation. The Company intends to use the net proceeds from the offering for general corporate purposes, including research and development. |
Significant Accounting Polici_2
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Significant Accounting Policies And Recent Accounting Pronouncements Policies | |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, recoverability of long-lived assets, valuation of equity grants and income tax valuation. 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. |
Basic 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 56,271,542 and 47,242,085 shares of common stock were excluded from the computation of diluted loss per share for the three months ended September 30, 2018 and 2017, respectively, because we incurred net losses for the three months ended September 30, 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. |
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 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 units are measured based on the fair market values of the underlying stock on the dates of grant. We recognize stock-based compensation using the straight-line method. The components of stock-based compensation expense included in the Company’s Condensed Statement of Operations for the three months ended September 30, 2018 and 2017 are as follows (rounded to nearest thousand): Three months ended September 30 2018 2017 Research and development expenses Professional fees $ 13,000 $ - Employees’ bonus 44,000 32,000 Officers’ bonus 172,000 337,000 Total stock-based compensation expense $ 229,000 $ 369,000 |
Recent Adopted Accounting Pronouncements | In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The adoption of ASU 2017-11, during the year ended June 30, 2018, did not have any impact on the financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. This new pronouncement has been adopted in the fourth quarter of fiscal 2018 and did not have a material effect on the Company’s financial position, results of operations or cash flows. |
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 June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. The adoption of ASU 2018-07 will not have a material impact on the financial statements. In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02 (Topic 842) Leases, which requires lessees to recognize a right-of-use asset and lease liability for most lease arrangements. The new standard is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, and must be adopted using the modified retrospective approach. The Company intends to adopt the standard on the effective date of December 30, 2018. Interpretations are on-going and could have a material impact on the Company's implementation. Currently, the Company expects that the adoption of the ASU 2016-02 (Topic 842) Leases will have a material impact on its consolidated balance sheet due to the recognition of right-of-use assets and lease liabilities principally for certain leases currently accounted for as operating leases, and expects it to have a material impact on our results of operations. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)” (“ASU No. 2016-15”). ASU No. 2016-15 clarifies how certain cash receipts and payments should be presented in the statement of cash flows. ASU No. 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted the new standard effective July 1, 2018. The application of this standard did not have a material impact on the Company’s unaudited condensed statements of cash flows. |
Significant Accounting Polici_3
Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Sep. 30, 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 | The components of stock-based compensation expense included in the Company’s Condensed Statement of Operations for the three months ended September 30, 2018 and 2017 are as follows (rounded to nearest thousand): Three months ended September 30 2018 2017 Research and development expenses Professional fees $ 13,000 $ - Employees’ bonus 44,000 32,000 Officers’ bonus 172,000 337,000 Total stock-based compensation expense $ 229,000 $ 369,000 |
Patents, net (Tables)
Patents, net (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Patents Net Tables | |
Schedule of patents | Patents, net consisted of the following (rounded to nearest thousand): Useful life September 30, 2018 June 30, 2018 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 1,238,000 1,219,000 5,464,000 5,445,000 Less: Accumulated amortization for Brilacidin, Anti-microbial- surfactants and related compounds (1,538,000 ) (1,462,000 ) Accumulated amortization for Patents-Kevetrin and related compounds (221,000 ) (203,000 ) Total $ 3,705,000 $ 3,780,000 |
Accrued Expenses - Related Pa_2
Accrued Expenses - Related Parties and Other (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Accrued Expenses Tables | |
Schedule of accrued expenses | Accrued expenses consisted of the following (rounded to nearest thousand): September 30, 2018 June 30, 2018 Accrued research and development consulting fees $ 130,000 $ 208,000 Accrued rent (Note 8) - related parties 8,000 10,000 Accrued interest (Note 9) - related parties 36,000 48,000 Total $ 174,000 $ 266,000 |
Accrued Salaries and Payroll _2
Accrued Salaries and Payroll Taxes - Related Parties And Other (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Accrued Salaries And Payroll Taxes - Related Parties And Other Tables | |
Schedule of accrued salaries and payroll taxes | Accrued salaries and payroll taxes consisted of the following (rounded to nearest thousand): September 30, 2018 June 30, 2018 Accrued salaries - related parties $ 2,999,000 $ 2,823,000 Accrued payroll taxes - related parties 130,000 130,000 Accrued employee bonuses 114,000 214,000 Withholding tax - payroll 48,000 52,000 Total $ 3,291,000 $ 3,219,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Tables | |
Future minimum lease payments required under the non-cancelable operating lease | As of September 30, 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, 2019 $ 228,000 2020 228,000 2021 228,000 2022 228,000 2023 228,000 $ 1,140,000 |
Equity Incentive Plans, Stock_2
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Schedule of Restricted Stock Award Activity | The following summarizes our restricted stock activity for our restricted stock issuances: Number of Shares Weighted Average Grant Date Fair Value Total awards outstanding at June 30, 2018 1,208,157 $ 0.72 Total shares granted 1,130,061 $ 0.40 Total shares vested (572,263 ) $ 0.73 Total shares forfeited - $ - Total unvested shares outstanding at September 30, 2018 1,765,955 $ 0.51 |
Schedule of vesting outstanding restricted stock | Scheduled vesting for outstanding restricted stock awards at September 30, 2018 is as follows: Year Ending June 30, 2019 2020 2021 2022 Total Scheduled vesting 28,333 1,142,563 573,929 21,130 1,765,955 |
Warrant [Member] | |
Schedule of stock options/warrants activity | The fair value of the warrants issued on June 28, 2018 was estimated on the date of issuance using the Black Scholes Model that uses assumptions noted in the following table. Expected term (in years) 3 Expected stock price volatility 82.36 % Risk-free interest rate 2.73 % Expected dividend yield 0 |
Valuation assumptions for stock options/warrants and SARs | The following table summarizes the outstanding stock warrants: Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2018 8,000,000 $ 0.38 5.0 $ - Extended - - - Granted - - - Exercised - - - Expired - - - Outstanding at September 30, 2018 8.000.000 $ 0.38 4.75 $ - |
Stock Options [Member] | |
Schedule of stock options/warrants activity | The following table summarizes all stock option activity under the Company’s equity incentive plans: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2018 41,643,571 0.22 2.76 $ 17,523,113 Granted 795,826 0.40 10.0 Exercised - - Forfeited/expired (50,000 ) 2.49 Outstanding at September 30, 2018 42,389,397 0.22 2.65 $ 3,240,000 Exercisable at September 30, 2018 41,020,636 $ 0.21 2.43 $ 3,240,000 |
Valuation assumptions for stock options/warrants and SARs | The fair value of options granted for the three months ended September 30, 2018 and 2017 was estimated on the date of grant using the Black Scholes model that uses assumptions noted in the following table. Three months ended September 30, 2018 2017 Expected term (in years) 10 10 Expected stock price volatility 104.11 % 106.01 % Risk-free interest rate 2.86 % 2.15 % Expected dividend yield 0 0 |
Basis of Presentation and Nat_2
Basis of Presentation and Nature of Operations (Details Narrative) | 3 Months Ended |
Sep. 30, 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 ($) | Oct. 05, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Accumulated deficit | $ (87,965,000) | $ (85,915,000) | |||
Total budgeted expenditures | 14,000,000 | ||||
Cash and cash equivalents | 306,000 | $ 2,933,000 | 2,424,000 | $ 4,141,000 | |
Current liabilities | 8,277,000 | 8,692,000 | |||
Due to related parties | 6,700,000 | ||||
Net cash used in operating activities | (2,099,000) | (3,689,000) | |||
Net loss | (2,050,000) | $ (4,534,000) | |||
Working capital (deficit) | (7,900,000) | $ (6,100,000) | |||
2017 agreement [Member] | Aspire Capital Fund LLC [Member] | |||||
Total available balance | 22,300,000 | ||||
Stock purchase agreement [Member] | Aspire Capital Fund LLC [Member] | |||||
Shares reserved for future issuance under agreement, Value | $ 30,000,000 | ||||
Common stock, closing sales price, description | <font style="font: 10pt Times New Roman, Times, Serif">The Company and Aspire Capital will not affect any sales under the Purchase Agreement when the closing sales price of the Company’s common stock is less than $0.25 per share. Recently, the Company’s common stock has traded below $0.25 per share, and there is substantial uncertainty regarding the Company’s continued ability to sell shares under the Purchase Agreement.</font></p>" id="sjs-C14"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company and Aspire Capital will not affect any sales under the Purchase Agreement when the closing sales price of the Company’s common stock is less than $0.25 per share. Recently, the Company’s common stock has traded below $0.25 per share, and there is substantial uncertainty regarding the Company’s continued ability to sell shares under the Purchase Agreement.</font></p> | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Convertible Preferred Stock [Member] | |||||
Proceeds from Sale of convertible preferred stock | $ 2,000,000 | ||||
Additional preferred stock shares | 8,000 | ||||
Securities purchase agreement, description | Company entered into a securities purchase agreement with one multi-family office for the sale of an aggregate of 2,000 shares |
Significant Accounting Polici_4
Significant Accounting Policies and Recent Accounting Pronouncements (Details 1) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Research and development expenses: | ||
Professional fees | $ 259,000 | $ 252,000 |
Total stock-based compensation expense | 229,000 | 369,000 |
Research and Development Expense [Member] | ||
Research and development expenses: | ||
Professional fees | 13,000 | |
Employees' bonus | 44,000 | 32,000 |
Officers' bonus | 172,000 | 337,000 |
Total stock-based compensation expense | $ 229,000 | $ 369,000 |
Significant Accounting Polici_5
Significant Accounting Policies and Recent Accounting Pronouncements (Detail Narrative) - shares | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Significant Accounting Policies And Recent Accounting Pronouncements Detail Narrative | ||
Diluted earnings (loss) per share | 56,271,542 | 47,242,085 |
Patents, net (Details)
Patents, net (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Purchased Patent Rights | $ 5,464,000 | $ 5,445,000 |
Patent costs - net | $ 3,705,000 | 3,780,000 |
Patents [Member] | ||
Useful life | 14 years | |
Purchased Patent Rights | $ 4,082,000 | 4,082,000 |
Accumulated amortization | $ (1,538,000) | (1,462,000) |
Patents Two [Member] | ||
Useful life | 12 years | |
Purchased Patent Rights | $ 144,000 | 144,000 |
Patents Three [Member] | ||
Useful life | 17 years | |
Purchased Patent Rights | $ 1,238,000 | 1,219,000 |
Accumulated amortization | $ (221,000) | $ (203,000) |
Patents, net (Details Narrative
Patents, net (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Amortization expense | $ 94,000 | $ 96,000 |
Year 2033 [Member] | ||
Estimated annual amortization expense | 24,000 | |
Year 2032 [Member] | ||
Estimated annual amortization expense | 53,000 | |
Year 2020 - 2025 [Member] | ||
Estimated annual amortization expense | 376,000 | |
Year 2019 [Member] | ||
Estimated annual amortization expense | $ 282,000 | |
Patents [Member] | ||
Future amortization period | 14 years | |
Year 2026 [Member] | ||
Estimated annual amortization expense | $ 367,000 | |
Year 2027 [Member] | ||
Estimated annual amortization expense | 364,000 | |
Year 2028 [Member] | ||
Estimated annual amortization expense | 127,000 | |
Year 2029 - 2031 [Member] | ||
Estimated annual amortization expense | 73,000 | |
Year 2034 [Member] | ||
Estimated annual amortization expense | 9,000 | |
Year 2035 [Member] | ||
Estimated annual amortization expense | $ 3,000 | |
Minimum [Member] | IntangibleAssets [Member] | Patents [Member] | ||
Estimated remaining useful lives of the assets | 12 years | |
Future amortization period | 6 years 11 months 4 days | |
Maximum [Member] | IntangibleAssets [Member] | Patents [Member] | ||
Estimated remaining useful lives of the assets | 17 years | |
Future amortization period | 16 years 9 months |
Accrued Expenses - Related Pa_3
Accrued Expenses - Related Parties and Other (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Accrued research and development expenses | ||
Accrued research and development consulting fees | $ 130,000 | $ 208,000 |
Accrued rent (Note 8) - related parties | 8,000 | 10,000 |
Accrued interest (Note 9) - related parties | 36,000 | 48,000 |
Total | $ 174,000 | $ 266,000 |
Accrued Salaries and Payroll _3
Accrued Salaries and Payroll Taxes - Related Parties And Other (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Accrued Salaries And Payroll Taxes - Related Parties And Other Details | ||
Accrued salaries - related parties | $ 2,999,000 | $ 2,823,000 |
Accrued payroll taxes - related parties | 130,000 | 130,000 |
Accrued employee bonuses | 114,000 | 214,000 |
Withholding tax - payroll | 48,000 | 52,000 |
Total | $ 3,291,000 | $ 3,219,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Sep. 30, 2018USD ($) |
Year ending June 30, | |
2,019 | $ 228,000 |
2,020 | 228,000 |
2,021 | 228,000 |
2,022 | 228,000 |
2,023 | 228,000 |
Total minimum payments | $ 1,140,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Equity Incentive Plans Stock-based Compensation Exercise Of Options And Warrants Outstanding Details 2 | ||
Operating leases, rental expense | $ 52,000 | $ 52,000 |
Lease term | 5 years | |
Lease expiry date | Sep. 30, 2023 | |
Rent expense (monthly) | $ 19,000 | |
Total contractual commitments | $ 3,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2018 | Jul. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | |
Rent expense | $ 19,000 | |||
Kard Scientific [Member] | ||||
Rent expense | $ 1,800 | $ 1,800 | ||
Clinical Studies [Member] | ||||
Accrued research and development expenses | $ 1,486,000 | $ 1,486,000 |
Convertible Note Payable - Re_2
Convertible Note Payable - Related Party (Details Narrative) - USD ($) | May 07, 2012 | Jun. 30, 2012 | Jun. 30, 2011 | Jun. 30, 2010 | Sep. 30, 2018 | Jun. 30, 2018 | May 08, 2012 | Mar. 31, 2012 | Dec. 31, 2010 | Oct. 01, 2009 |
Accrued interest - related parties | $ 36,000 | $ 48,000 | ||||||||
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% | |||||||||
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% | |||||||||
Minimum [Member] | Ehrlich Promissory Note C [Member] | ||||||||||
Interest rate | 9.00% | |||||||||
Maximum [Member] | Ehrlich Promissory Note C [Member] | ||||||||||
Interest rate | 10.00% |
Equity Incentive Plans, Stock_3
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details) | 3 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Number of Options | |
Number of Outstanding, Beginning Balance | shares | 1,208,157 |
Number of Outstanding, Ending Balance | shares | 1,765,955 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.72 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.51 |
Stock Options [Member] | |
Number of Options | |
Number of Outstanding, Beginning Balance | shares | 41,643,571 |
Granted | shares | 795,826 |
Exercised | shares | |
Forfeited/expired | shares | (50,000) |
Number of Outstanding, Ending Balance | shares | 42,389,397 |
Number of Outstanding, Exercisable | shares | 41,020,636 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.22 |
Granted | $ / shares | 0.40 |
Exercised | $ / shares | |
Forfeited/expired | $ / shares | 2.49 |
Weighted Average Exercise Price, Ending Balance | $ / shares | 0.22 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.21 |
Weighted Average Remaining Contractual Life (Years) | |
Weighted average remaining contractual life (Years), Outstanding, Beginning Balance | 2 years 9 months 3 days |
Granted | 10 years |
Weighted average remaining contractual life (Years), Outstanding, Ending Balance | 2 years 7 months 24 days |
Weighted average remaining contractual life (Years), Exercisable | 2 years 5 months 5 days |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, Beginning Balance | $ | $ 17,523,113 |
Aggregate intrinsic value, Ending Balance | $ | 3,240,000 |
Aggregate intrinsic value, Exercisable | $ | $ 3,240,000 |
Equity Incentive Plans, Stock_4
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 1) - Stock Options [Member] | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Expected term (in years) | 10 years | 10 years |
Expected stock price volatility | 104.11% | 106.01% |
Risk-free interest rate | 2.86% | 2.15% |
Expected dividend yield | 0.00% | 0.00% |
Equity Incentive Plans, Stock_5
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 2) | 3 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Disclosure Equity Incentive Plans Stockbased Compensation Exercise Of Options And Warrants Outstanding Details 2Abstract | |
Number of Outstanding, Beginning Balance | shares | 1,208,157 |
Total shares granted | shares | 1,130,061 |
Total shares vested | shares | (572,263) |
Total shares forfeited | shares | |
Number of Outstanding, Ending Balance | shares | 1,765,955 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.72 |
Total shares granted | $ / shares | 0.40 |
Total shares vested | $ / shares | 0.73 |
Total shares forfeited | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.51 |
Equity Incentive Plans, Stock_6
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 3) - shares | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Scheduled vesting | 1,765,955 | ||||
Restricted Stock [Member] | |||||
Scheduled vesting | 21,130 | 573,929 | 1,142,563 | 28,333 |
Equity Incentive Plans, Stock_7
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 4) - Warrant [Member] | 3 Months Ended |
Sep. 30, 2018 | |
Expected term (in years) | 3 years |
Expected stock price volatility | 82.36% |
Risk-free interest rate | 2.73% |
Expected dividend yield | 0.00% |
Equity Incentive Plans, Stock_8
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details 5) | 3 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Number of Options | |
Number of Outstanding, Beginning Balance | shares | 1,208,157 |
Number of Outstanding, Ending Balance | shares | 1,765,955 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.72 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.51 |
Warrant [Member] | |
Number of Options | |
Number of Outstanding, Beginning Balance | shares | 8,000,000 |
Extended | shares | |
Granted | shares | |
Exercised | shares | |
Expired | shares | |
Number of Outstanding, Ending Balance | shares | 8,000,000 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.38 |
Extended | $ / shares | |
Granted | $ / shares | |
Exercised | $ / shares | |
Expired | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.38 |
Weighted Average Remaining Contractual Life (Years) | |
Weighted average remaining contractual life (Years), Outstanding, Beginning Balance | 5 years |
Weighted average remaining contractual life (Years), Outstanding, Ending Balance | 4 years 9 months |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, Beginning Balance | $ | |
Aggregate intrinsic value, Ending Balance | $ |
Equity Incentive Plans, Stock_9
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Stock based compensation | $ 229,000 | $ 369,000 | |
Unrecognized compensation cost related to unvested restricted stock-based compensation | $ 800,000 | ||
Compensation cost not yet recognized, period for recognition | 1 year 11 days | ||
Expected share based compensation expenses | $ 600,000 | ||
Restricted Stock Member [Member] | |||
Stock based compensation | 127,000 | 228,000 | |
Stock options [Member] | |||
Stock based compensation | $ 102,000 | $ 141,000 | |
On September 1, 2018 [Member] | Ms. Jane Harness [Member] | |||
Stock option vested, description | the Company’s common stock, 33 1/3% vesting upon the first anniversary of the grant date, 33 1/3% upon the second anniversary of the grant date and 33 1/3% upon the third anniversary of the grant date</p>" id="sjs-B12"><p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">the Company’s common stock, 33 1/3% vesting upon the first anniversary of the grant date, 33 1/3% upon the second anniversary of the grant date and 33 1/3% upon the third anniversary of the grant date</p> | ||
Stock based compensation | $ 2,000 | ||
Stock option expenses | 1,000 | ||
Stock awards | $ 1,000 | ||
Stock options to purchase shares | 172,987 | ||
Stock issued, shares | 58,394 | ||
Stock issued, value | $ 63,000 | ||
On September 1, 2018 [Member] | Ms. Jane Harness [Member] | |||
Stock option exercise price | $ 0.398 | ||
On September 1, 2018 [Member] | Dr. Arthur Bertolino [Member] | |||
Exercisable period | 10 years | ||
Stock option vested, description | <font style="font: 10pt Times New Roman, Times, Serif">(1) 50% upon the first anniversary of the effective date, and the remaining 50% upon the second anniversary of the effective date</font></p>" id="sjs-B23"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(1) 50% upon the first anniversary of the effective date, and the remaining 50% upon the second anniversary of the effective date</font></p> | ||
Stock based compensation | $ 26,000 | ||
Stock option expenses | 9,000 | ||
Stock awards | $ 17,000 | ||
Stock options to purchase shares | 617,839 | ||
Stock option exercise price | $ 0.398 | ||
Stock issued, shares | 1,066,667 | ||
Stock issued, value | $ 225,000 | ||
On June 30, 2016 [Member] | 2016 Equity Incentive Plan [Member] | |||
Stock option vested, description | <font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>" id="sjs-B32"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Up to 20,000,000 shares of the Company’s 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.</font></p> | ||
Warrant [Member] | On June 28, 2018 [Member] | |||
Exercise price | $ 0.38 | ||
Common stock shares issued | 8,000,000 | ||
Warrants exercisable period | 5 years | ||
Common Class A | |||
Common stock shares issued | 163,676,190 | 163,103,927 | |
Common Class A | Securities Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | |||
Common stock shares issuable under agreement | 7,000,000 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | Sep. 06, 2017 | Jun. 28, 2018 | Mar. 30, 2015 | Sep. 05, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Deferred offering costs | $ 159,000 | $ 159,000 | $ 159,000 | |||||
Securities Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | ||||||||
Common stock shares issuable under agreement, Purchase price | $ 2,000,000 | |||||||
Common stock shares reserve for future issuance | 5,263,158 | |||||||
Allocation of commitment fee description | <font style="font: 10pt Times New Roman, Times, Serif">The total commitment fee of $2.7 million was allocated to the $2 million offering first based on historical price discounts that Aspire Capital has received and the balance of the commitment fee was allocated to the $5 million of potential future milestone funding from Aspire Capital. The portion of the commitment fee allocated to the $2 million of initial proceeds was approximately $0.5 million and was effectively netted against the $2 million of initial proceeds, resulting in a discounted purchase price of $0.29 per share. The remaining $2.2 million of the commitment fee was allocated to the future milestone funding and was fully expensed under Other Expenses as of June, 30, 2018. As of September 30, 2018, the $5 million of milestone funding was not received and expired.</font></p>" id="sjs-F6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The total commitment fee of $2.7 million was allocated to the $2 million offering first based on historical price discounts that Aspire Capital has received and the balance of the commitment fee was allocated to the $5 million of potential future milestone funding from Aspire Capital. The portion of the commitment fee allocated to the $2 million of initial proceeds was approximately $0.5 million and was effectively netted against the $2 million of initial proceeds, resulting in a discounted purchase price of $0.29 per share. The remaining $2.2 million of the commitment fee was allocated to the future milestone funding and was fully expensed under Other Expenses as of June, 30, 2018. As of September 30, 2018, the $5 million of milestone funding was not received and expired.</font></p> | |||||||
Securities Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | Stock And Warrant [Member] | ||||||||
Common stock shares issued | 8,000,000 | |||||||
Amortization recorded to additional paid in capital | $ 5,000,000 | |||||||
Common stock shares reserve for future issuance | 2,736,842 | |||||||
Exercise price | $ 0.38 | |||||||
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 | $ 159,000 | 159,000 | $ 159,000 | |||||
Common stock shares issued | 300,000 | 160,000 | ||||||
Common stock shares sold | 2,600,000 | 9,500,000 | ||||||
Proceeds from issuance of common stock | $ 2,100,000 | $ 7,700,000 | ||||||
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 | $ 55,000 | |||||||
Total available balance | $ 22,300,000 | $ 22,300,000 | ||||||
Common Class A | Securities Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | ||||||||
Common stock shares sold | 7,000,000 | |||||||
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] - Securities Purchase Agreement [Member] - Series B [Member] | Oct. 05, 2018USD ($)shares |
Stock issued | 2,000 |
Proceeds from issuance of shares | $ | $ 2,000,000 |
Stock issued description | <font style="font: 10pt Times New Roman, Times, Serif">An initial closing for the sale of 1,250 shares of preferred stock closed on October 9, 2018, and a subsequent closing for the sale of 750 shares of preferred stock closed on October 12, 2018.</font></p>" id="sjs-B4"><p style="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">An initial closing for the sale of 1,250 shares of preferred stock closed on October 9, 2018, and a subsequent closing for the sale of 750 shares of preferred stock closed on October 12, 2018.</font></p> |
Warrants to purchase additional shares | 8,000 |
Rights and preferences of the preferred stock description | <font style="font: 10pt Times New Roman, Times, Serif">Each share of preferred stock has an initial stated value of $1,080 and may be converted at any time at the holder’s option into shares of the Company’s common stock at a conversion price equal of the lower of (i) $0.31625 per share and (ii) 85% of the lowest volume weighted average price of the Company’s common stock on a trading day during the ten trading days prior to and ending on, and including, the conversion date.</font></p>" id="sjs-B6"><p style="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Each share of preferred stock has an initial stated value of $1,080 and may be converted at any time at the holder’s option into shares of the Company’s common stock at a conversion price equal of the lower of (i) $0.31625 per share and (ii) 85% of the lowest volume weighted average price of the Company’s common stock on a trading day during the ten trading days prior to and ending on, and including, the conversion date.</font></p> |
Conversion cap limits description | <font style="font: 10pt Times New Roman, Times, Serif">The conversion cap limits conversions by the holders to the greater of $75,000 and an amount equal to 30% of the aggregate dollar trading volume of the Company’s common stock for the five trading days immediately preceding, and including, the conversion date.</font></p>" id="sjs-B7"><p style="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The conversion cap limits conversions by the holders to the greater of $75,000 and an amount equal to 30% of the aggregate dollar trading volume of the Company’s common stock for the five trading days immediately preceding, and including, the conversion date.</font></p> |
Series 1 warrant [Member] | |
Rights and preferences of the preferred stock description | <font style="font: 10pt Times New Roman, Times, Serif">Series 1 warrant, which entitles the holder thereof to purchase 1.25 shares of preferred stock at $982.50 per share, or 2,500 shares of preferred stock in the aggregate for approximately $2.5 million in aggregate exercise price, for a period of up to nine months following issuance</font></p>" id="sjs-B9"><p style="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Series 1 warrant, which entitles the holder thereof to purchase 1.25 shares of preferred stock at $982.50 per share, or 2,500 shares of preferred stock in the aggregate for approximately $2.5 million in aggregate exercise price, for a period of up to nine months following issuance</font></p> |
Warrants exercised description | Subject to the satisfaction of certain circumstances, the Company had the option to compel the holders to exercise up to $250,000 of the Series 1 warrants 30 days after the initial closing of the sale of the preferred stock. On November 2, 2018, the Company notified the holders of the warrants of the Company’s election to compel the exercise of $250,000 of warrants, which exercise is scheduled to occur on or about November 8, 2018. In addition, subject to the satisfaction of certain circumstances, the Company may call for cancellation any or all of the warrants following 90 days after their issuance, for a payment in cash equal to 8% of the aggregate exercise price of the warrants being called. The warrants subject to any such call notice will be cancelled 30 days following the Company’s payment of the call fee, provided that the warrant holders have not exercised the warrants prior to cancellation</font></p>" id="sjs-B10"><p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0; text-align: justify">Subject to the satisfaction of certain circumstances, the Company had the option to compel the holders to exercise up to $250,000 of the Series 1 warrants 30 days after the initial closing of the sale of the preferred stock. On November 2, 2018, the Company notified the holders of the warrants of the Company’s election to compel the exercise of $250,000 of warrants, which exercise is scheduled to occur on or about November 8, 2018. In addition, subject to the satisfaction of certain circumstances, the Company may call for cancellation any or all of the warrants following 90 days after their issuance, for a payment in cash equal to 8% of the aggregate exercise price of the warrants being called. The warrants subject to any such call notice will be cancelled 30 days following the Company’s payment of the call fee, provided that the warrant holders have not exercised the warrants prior to cancellation</font></p> |
Series 2 warrant [Member] | |
Rights and preferences of the preferred stock description | <font style="font: 10pt Times New Roman, Times, Serif">Series 2 warrant, which entitles the holder thereof to purchase 1.25 shares of preferred stock at $982.50 per share, or 2,500 shares of preferred stock in the aggregate for approximately $2.5 million in aggregate exercise price, for a period of up to 15 months following issuance</font></p>" id="sjs-B12"><p style="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Series 2 warrant, which entitles the holder thereof to purchase 1.25 shares of preferred stock at $982.50 per share, or 2,500 shares of preferred stock in the aggregate for approximately $2.5 million in aggregate exercise price, for a period of up to 15 months following issuance</font></p> |
Series 3 warrant [Member] | |
Rights and preferences of the preferred stock description | <font style="font: 10pt Times New Roman, Times, Serif">Series 3 warrant, which entitles the holder thereof to purchase 1.50 shares of preferred stock at $982.50 per share, or 3,000 shares of preferred stock in the aggregate for approximately $2.9 million in aggregate exercise price, for a period of up to 24 months following issuance</font></p>" id="sjs-B14"><p style="font: 12pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Series 3 warrant, which entitles the holder thereof to purchase 1.50 shares of preferred stock at $982.50 per share, or 3,000 shares of preferred stock in the aggregate for approximately $2.9 million in aggregate exercise price, for a period of up to 24 months following issuance</font></p> |