Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Sep. 22, 2021 | Dec. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Innovation Pharmaceuticals Inc. | ||
Entity Central Index Key | 0001355250 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Jun. 30, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 437,096,222 | ||
Entity Public Float | $ 63,972,816 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Current Assets: | ||
Cash | $ 10,194,000 | $ 6,018,000 |
Prepaid expenses and other current assets | 495,000 | 92,000 |
Total Current Assets | 10,689,000 | 6,110,000 |
Other Assets: | ||
Patent costs - net | 2,754,000 | 3,060,000 |
Deferred offering costs | 778,000 | 0 |
Security deposit | 78,000 | 78,000 |
Total Other Assets | 3,610,000 | 3,138,000 |
Total Assets | 14,299,000 | 9,248,000 |
Current Liabilities: | ||
Accounts payable - (including related party payables of approx. $1,511,000 and $1,498,000, respectively) | 2,563,000 | 2,043,000 |
Accrued expenses - (including related party accruals of approx. $8,000 and $19,000, respectively) | 348,000 | 59,000 |
Accrued salaries and payroll taxes - (including related party accrued salaries of approx. $1,915,000 and $2,777,000, respectively) | 1,992,000 | 3,215,000 |
Operating lease - current liability | 165,000 | 138,000 |
Note payable - related party | 1,283,000 | 1,822,000 |
Accrued dividend - Series B 5% convertible preferred stock | 15,000 | 13,000 |
Loan payable | 172,000 | 79,000 |
Total Current Liabilities | 6,538,000 | 7,369,000 |
Other Liabilities: | ||
Operating lease - long term liability | 252,000 | 417,000 |
Total Liabilities | 6,790,000 | 7,786,000 |
Commitments and contingencies (Note 9) | 0 | 0 |
Stockholders' Equity | ||
Preferred stock, $0.001 par value, 10,000,000 designated shares, no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 124,835,000 | 102,819,000 |
Accumulated deficit | (115,116,000) | (101,244,000) |
Treasury Stock, at cost (10,874,593 shares and 659,448 shares as of June 30, 2021 and June 30, 2020, respectively) | (2,254,000) | (146,000) |
Total Stockholders' Equity | 7,509,000 | 1,462,000 |
Total Liabilities and Stockholders' Equity | 14,299,000 | 9,248,000 |
Common Class A [Member] | ||
Stockholders' Equity | ||
Common stock value | 42,000 | 33,000 |
Common Class B [Member] | ||
Stockholders' Equity | ||
Common stock value | $ 2,000 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Related party payables | $ 1,511,000 | $ 1,498,000 |
Related party expenses | 8,000 | 19,000 |
Related party accrued salaries | $ 1,915,000 | $ 2,777,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares designated | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury Stock Shares | 10,874,593 | 659,448 |
Common Class A [Member] | ||
Treasury Stock Shares | 8,516,056 | 659,448 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 600,000,000 | 600,000,000 |
Common Stock, shares issued | 426,673,198 | 329,829,992 |
Common Stock, shares outstanding | 418,157,142 | 329,170,544 |
Common Class B [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 18,000,000 | 1,818,180 |
Common Stock, shares outstanding | 15,641,463 | 1,818,180 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenues | $ 0 | $ 423,000 |
Operating expenses: | ||
Research and development expenses | 7,016,000 | 2,792,000 |
General and administrative expenses | 963,000 | 1,429,000 |
Officers' payroll and payroll tax expenses | 499,000 | 480,000 |
Professional fees | 537,000 | 357,000 |
Total operating expenses | 9,015,000 | 5,058,000 |
Loss from operations | (9,015,000) | (4,635,000) |
Other expenses | ||
Change in fair value of preferred stock | 0 | (102,000) |
Interest expense - debt | (155,000) | (208,000) |
Interest expense - preferred stock | (4,702,000) | (52,000) |
Warrants modification expense | 0 | (1,212,000) |
Impairment expense of operating lease | 0 | (643,000) |
Total other expenses | (4,857,000) | (2,013,000) |
Loss before provision for income taxes | (13,872,000) | (6,648,000) |
Provision for income taxes | 0 | 0 |
Net loss | $ (13,872,000) | $ (6,648,000) |
Net loss per share, basic and diluted | $ (0.04) | $ (0.03) |
Basic and Diluted Weighted Average Common Shares Outstanding | 386,163,208 | 238,436,372 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) | Total | Common Stock A | Common Stock B | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock |
Balance, shares at Jun. 30, 2019 | 4,129,000 | 202,631,923 | 909,090 | 90,537,000 | (94,596,000) | 228,218 |
Balance, amount at Jun. 30, 2019 | $ 21,000 | $ 91 | $ (91,000) | |||
Stock options issued to consultant for services at $0.089 - $0.43 | $ 34,000 | 0 | 0 | $ 34,000 | $ 0 | 0 |
Stock options issued to employee for services at $0.398 - $1.37 | 76,000 | 0 | 0 | 76,000 | 0 | 0 |
Stock options issued to officer as equity awards at $0.1 to $0.705 | 205,000 | 0 | 0 | 205,000 | 0 | 0 |
Shares issued to consultant for services at $0.84 - $1.38 | 5,000 | 0 | 0 | 5,000 | 0 | 0 |
Shares issued to employee for services at $0.132 - $1.37 | 28,000 | 0 | 0 | 28,000 | 0 | 0 |
Shares issued to officer as equity awards at $0.1 to $0.705 | 330,000 | $ 0 | $ 0 | $ 330,000 | 0 | $ 0 |
Issuance of 1,525,500 shares to directors and Consultant, shares | 1,525,000 | |||||
Issuance of 1,525,500 shares to directors and Consultant, amount | 0 | $ 0 | $ 0 | $ 0 | 0 | $ 0 |
Issuance of 1,066,667 shares to Officer & 421,611 shares were withheld for tax purposes as Treasury shares, shares | 1,066,667 | |||||
Issuance of 1,066,667 shares to Officer & 421,611 shares were withheld for tax purposes as Treasury shares, amount | 0 | $ 0 | $ 0 | $ 0 | 0 | $ 0 |
Issuance of 58,394 shares to employee & 9,619 shares were withheld for tax purposes as Treasury shares, shares | 58,394 | |||||
Issuance of 58,394 shares to employee & 9,619 shares were withheld for tax purposes as Treasury shares, amount | 0 | $ 0 | $ 0 | $ 0 | 0 | $ 0 |
Issuance of shares for tax purposes as Treasury Shares, shares | (431,230) | 431,230 | ||||
Issuance of shares for tax purposes as Treasury Shares, amount | (55,000) | $ 0 | $ 0 | 0 | 0 | $ (55,000) |
Conversion of preferred stocks to common stock, shares | 116,319,790 | |||||
Conversion of preferred stocks to common stock, amount | 4,917,000 | $ 11,000 | $ 0 | 4,906,000 | 0 | $ 0 |
Excess of exercise price of 8,912 warrants over fair value | 2,580,000 | 0 | 0 | 2,580,000 | 0 | 0 |
To reverse the option expense & stock awards granted for our resigned CMO | (251,000) | 0 | 0 | (251,000) | 0 | 0 |
To adjust the 41 Pref stock from $982.5 to $535.12 | 18,000 | $ 0 | $ 0 | 18,000 | 0 | $ 0 |
Cancellation of debt for the purchase of 909,090 shares of Common Stock Class B, shares | 909,090 | |||||
Cancellation of debt for the purchase of 909,090 shares of Common Stock Class B, amount | 100,000 | $ 0 | $ 0 | 100,000 | 0 | $ 0 |
Exercise of 8,000,000 warrants at $0.38, shares | 8,000,000 | |||||
Exercise of 8,000,000 warrants at $0.38, amount | 3,040,000 | $ 1,000 | $ 0 | 3,039,000 | 0 | $ 0 |
Warrants modification expense | 1,212,000 | 0 | 0 | 1,212,000 | 0 | 0 |
Net loss | (6,648,000) | $ 0 | $ 0 | 0 | (6,648,000) | $ 0 |
Balance, shares at Jun. 30, 2020 | 329,170,544 | 1,818,180 | 659,448 | |||
Balance, amount at Jun. 30, 2020 | 1,462,000 | $ 33,000 | $ 0 | 102,819,000 | (101,244,000) | $ (146,000) |
Issuance of shares for tax purposes as Treasury Shares, shares | (21,606) | 21,606 | ||||
Net loss | (13,872,000) | $ 0 | $ 0 | 0 | (13,872,000) | $ 0 |
Shares sold to Aspire Capital under 2020 Agreement at $0.20 - $0.22 range, shares | 22,500,000 | |||||
Shares sold to Aspire Capital under 2020 Agreement at $0.20 - $0.22 range, amount | 4,603,000 | $ 2,000 | $ 1,000 | 4,600,000 | 0 | $ 0 |
Shares issued as commitment fee of $1,438,000 on 7/31/2020 at $0.23, net of amortization of offering costs of $120,000, shares | 6,250,000 | |||||
Shares issued as commitment fee of $1,438,000 on 7/31/2020 at $0.23, net of amortization of offering costs of $120,000, amount | 1,438,000 | $ 1,000 | $ 0 | 1,437,000 | 0 | $ 0 |
Offering cost | (659,000) | 0 | 0 | (659,000) | 0 | 0 |
Shares issued to employee for services at $0.132 to $0.398 | 16,000 | 0 | 0 | 16,000 | 0 | 0 |
Stock options issued to employee for services at $0.132 to $0.398 | 44,000 | 0 | 0 | 44,000 | 0 | 0 |
Stock options issued to consultant for services at $0.14 to $0.43 | 123,000 | $ 0 | $ 0 | 123,000 | 0 | $ 0 |
Issuance of 2,200,000 shares of Common Stock Class B to Officer & 412,238 shares were withheld for tax purposes as Treasury shares, shares | 2,200,000 | |||||
Issuance of 2,200,000 shares of Common Stock Class B to Officer & 412,238 shares were withheld for tax purposes as Treasury shares, amount | 242,000 | $ 0 | $ 0 | 242,000 | 0 | $ 0 |
Issuance of shares for tax purposes as Treasury Shares, shares | (412,238) | 412,238 | ||||
Issuance of shares for tax purposes as Treasury Shares, amount | (90,000) | $ 0 | $ 0 | 0 | 0 | $ (90,000) |
Issuance of 58,394 shares to employee & 21,606 shares were withheld for tax purposes as Treasury shares, shares | 58,394 | |||||
Issuance of 58,394 shares to employee & 21,606 shares were withheld for tax purposes as Treasury shares, amount | 0 | $ 0 | $ 0 | 0 | 0 | $ 0 |
Issuance of shares for tax purposes as Treasury Shares, amount | (3,000) | $ 0 | $ 0 | 0 | 0 | $ (3,000) |
Cancellation of debt for the purchase of 909,090 shares of Common Stock Class B & 181,096 shares were withheld for tax purposes as Treasury shares, shares | 909,090 | |||||
Cancellation of debt for the purchase of 909,090 shares of Common Stock Class B & 181,096 shares were withheld for tax purposes as Treasury shares, amount | 100,000 | $ 0 | $ 0 | 100,000 | 0 | $ 0 |
Issuance of shares for tax purposes as Treasury Shares, shares | (181,096) | 181,096 | ||||
Issuance of shares for tax purposes as Treasury Shares, amount | (37,000) | $ 0 | $ 0 | 0 | 0 | $ (37,000) |
To record Series B Discount - Warrants | 1,410,000 | 0 | 0 | 1,410,000 | 0 | 0 |
To record issuance costs Series 1 & 2 Warrants | (10,000) | 0 | 0 | (10,000) | 0 | 0 |
To record beneficial conversion feature associated with the issuance of the 5,089 shares of Series B-2 preferred stock | 3,253,000 | $ 0 | $ 0 | 3,253,000 | 0 | $ 0 |
Conversion of 10,207 preferred stocks into 68,034,812 common stocks, shares | 68,034,812 | |||||
Conversion of 10,207 preferred stocks into 68,034,812 common stocks, amount | 10,029,000 | $ 7,000 | $ 0 | 10,022,000 | 0 | $ 0 |
Cancellation of 6,980,583 Class A shares to satisfy the purchase of 13,072,730 shares of Common Stock Class B, shares | (6,980,583) | 13,072,730 | 6,980,583 | |||
Cancellation of 6,980,583 Class A shares to satisfy the purchase of 13,072,730 shares of Common Stock Class B, amount | 0 | $ (1,000) | $ 1,000 | 1,438,000 | 0 | $ (1,438,000) |
Shares were withheld for tax purposes as Treasury Shares, shares | (854,419) | (1,765,203) | 2,619,622 | |||
Shares were withheld for tax purposes as Treasury Shares, amount | (540,000) | $ 0 | $ 0 | 0 | 0 | $ (540,000) |
Balance, shares at Jun. 30, 2021 | 418,157,142 | 15,641,463 | 10,874,593 | |||
Balance, amount at Jun. 30, 2021 | $ 7,509,000 | $ 42,000 | $ 2,000 | $ 124,835,000 | $ (115,116,000) | $ (2,254,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (13,872,000) | $ (6,648,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 183,000 | 427,000 |
Amortization of patent costs | 378,000 | 372,000 |
Depreciation of equipment | 0 | 1,000 |
Interest expense-preferred stock | 4,663,000 | 52,000 |
Change in fair value of preferred stock | 0 | (102,000) |
Warrants modification expense | 0 | 1,212,000 |
Impairment expense of operating lease | 0 | 643,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (403,000) | (46,000) |
Accounts payable | 520,000 | (84,000) |
Accrued expenses | 289,000 | (26,000) |
Accrued officers' salaries and payroll taxes | (1,223,000) | 52,000 |
Operating lease liability | (138,000) | (88,000) |
Accrued dividend | 15,000 | 0 |
Loan payable | 93,000 | 79,000 |
Net cash used in operating activities | (9,495,000) | (4,156,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Patent costs | (72,000) | (91,000) |
Net cash used in investing activities | (72,000) | (91,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Sale of common stock, net of offering costs | 4,603,000 | 0 |
Proceeds from issuance of Series B Preferred stocks, net of financing costs | 4,990,000 | 0 |
Proceeds from exercise of preferred stock warrants | 5,017,000 | 6,701,000 |
Proceeds from exercise of common stock warrants | 0 | 3,040,000 |
Purchase of treasury stock | (670,000) | (55,000) |
Repayment of note payable to officer | (197,000) | 0 |
Net cash provided by financing activities | 13,743,000 | 9,686,000 |
NET DECREASE IN CASH | 4,176,000 | 5,439,000 |
CASH, BEGINNING OF YEAR | 6,018,000 | 579,000 |
CASH, END OF YEAR | 10,194,000 | 6,018,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest | 59,000 | 216,000 |
Cash paid for income taxes | 0 | 0 |
INVESTING AND FINANCING ACTIVITIES | ||
Initial warrant valuation | 0 | 1,212,000 |
Shares issued as deferred offering costs | 1,438,000 | 0 |
Cancellation of 6,980,583 Class A shares for the purchase of 13,072,730 shares of Common Stock Class B | 1,438,000 | 0 |
Conversion of Series B Convertible Preferred stock to Common stock | 10,029,000 | 4,907,000 |
Excess of exercise price of warrants at $850-$950 over fair value of $535 | 0 | 2,598,000 |
Cancellation of shareholder debt for the purchase of 909,090 shares of Common Stock Class B shares | 342,000 | 100,000 |
Dividend paid by Series B-2 Preferred Shares | $ 13,000 | $ 0 |
Basis of Presentation and Natur
Basis of Presentation and Nature of Operations | 12 Months Ended |
Jun. 30, 2021 | |
Basis of Presentation and Nature of Operations | |
1. Basis of Presentation and Nature of Operations | 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. On February 15, 2019, the Company formed IPIX Pharma Limited (“IPIX Pharma”), a wholly-owned subsidiary incorporated under the Companies Act 2014 of Ireland. IPIX Pharma is a Private Company Limited by Shares. The subsidiary is intended to serve as a key hub for strategic collaboration with European companies and medical communities in addition to providing cost-saving efficiencies and flexibility with respect to developing Brilacidin under European Medicines Agency standards. The Company is a clinical stage biopharmaceutical company. The Company’s common stock is quoted on OTCQB, symbol “IPIX.” Basis of Consolidation These consolidated financial statements include the accounts of Innovation Pharmaceuticals Inc., a Nevada corporation, and our wholly-owned subsidiary, IPIX Pharma, an Ireland limited company. All significant intercompany transactions and balances have been eliminated in consolidation. There was no translation gain and loss for the year ended June 30, 2021 and 2020. 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 and Kevetrin, and advancing them as quickly as possible along the regulatory pathway. We aim to develop the highest quality data and broadest intellectual property to support our compounds. In December 2020, the U.S. Food and Drug Administrations (FDA) approved the Company’s Investigational New Drug (IND) application to proceed with initiation of a randomized, placebo-controlled Phase 2 clinical trial of Brilacidin in moderate-to-severe hospitalized patients with COVID-19. Similar regulatory approval was obtained from the Russian Ministry of Health. The clinical trial is in progress. We currently own all development and marketing rights to our products, other than the license rights granted to Alfasigma S.p.A. in July 2019 for the development, manufacturing and commercialization of locally-administered Brilacidin for ulcerative proctitis/ulcerative proctosigmoiditis (“UP/UPS”). In order to successfully develop and market our products, we may have to partner with additional 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. |
Liquidity
Liquidity | 12 Months Ended |
Jun. 30, 2021 | |
Liquidity | |
2. Liquidity | As of June 30, 2021, the Company’s cash amounted to $10.2 million and current liabilities amounted to $6.5 million. The Company has expended substantial funds on its clinical trials and expects to continue our spending on research and development expenditures. Our net losses incurred for the years ended June 30, 2021 and 2020, amounted to $13.9 million and $6.6 million, respectively, and we had working capital of approximately $4.2 million at June 30, 2021 and a working capital deficit of approximately $(1.3) million at June 30, 2020. On July 31, 2020, the Company entered into a new common stock purchase agreement (the “2020 Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”) which 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 24-month term of the 2020 Agreement. In consideration for entering into the 2020 Agreement, the Company issued to Aspire Capital 6,250,000 shares of its Class A Common Stock as a commitment fee. The commitment fee of approximately $1.4 million was recorded as deferred financing costs and additional paid-in capital and this asset will be amortized over the life of the 2020 Agreement. As of June 30, 2021, the available balance was $25.4 million. We anticipate that future budget expenditures will be approximately $10.2 million for the next 12 months, including approximately $8.2 million for clinical activities, supportive research, and drug product. Alternatively, if we decide to pursue a more aggressive plan with our clinical trials, we will require additional sources of capital during the fiscal year 2022 to meet our working capital requirements for our planned clinical trials. Potential sources for capital include grant funding for COVID-19 research and equity financings. There can be no assurances that we will be successful in receiving any grant funding for our programs. Management believes that the amounts available from Aspire Capital and under the Company’s effective shelf registration statement will be sufficient to fund the Company’s operations for the next 12 months. If we are unable to generate enough working capital from our current or future financing agreements with Aspire Capital when needed or secure additional sources of funding, it may be necessary to significantly reduce our current rate of spending through reductions in staff and delaying, scaling back or stopping certain research and development programs, including more costly Phase 2 and Phase 3 clinical trials on our wholly-owned development programs as these programs progress into later stage development. Insufficient liquidity may also require us to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to us and our stockholders than we would otherwise choose in order to obtain up-front license fees needed to fund operations. These events could prevent us from successfully executing our operating plan. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 12 Months Ended |
Jun. 30, 2021 | |
Significant Accounting Policies and Recent Accounting Pronouncements | |
3. Significant Accounting Policies and Recent Accounting Pronouncements | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, recoverability of long-lived assets, 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, restricted stock, warrants and convertible related party notes payable. Common share equivalents were excluded from the computation of diluted earnings per share for the years ended June 30, 2021 and 2020, because their effect was anti-dilutive. Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows: Year Ended June 30, 2021 2020 Net loss per share, basic and diluted $ (0.04 ) $ (0.03 ) Net loss per common shares outstanding: Common stock - Class A $ (0.04 ) $ (0.03 ) Common stock - Class B $ (1.46 ) $ (5.84 ) Total of Class A and Class B $ (0.04 ) $ (0.03 ) Weighted average shares outstanding: Class A common stock 376,659,381 237,298,768 Class B common stock 9,503,827 1,137,604 Total weighted average shares outstanding 386,163,208 238,436,372 Antidilutive securities not included: Stock options 6,017,294 21,457,124 Stock options arising from convertible note payable and accrued interest 2,567,476 3,666,190 Restricted stock grants 116,786 116,787 Total 8,701,556 25,240,101 Treasury Stock The Company accounts for treasury stock using the cost method. There were 8,516,056 shares of Class A common stock and 2,358,537 shares of Class B common stock held in treasury, purchased at a total cumulative cost of approximately $2.3 million as of June 30, 2021. There were 659,448 shares of Class A common stock held in treasury, purchased at a total cumulative cost of $146,000 as of June 30, 2020 (see Note 14. Equity Transactions). Treasury stock, representing shares of the Company’s common stock that have been acquired for payroll tax withholding on vested stock grants, is recorded at its acquisition cost and these shares are not considered outstanding. Revenue Recognition On July 1, 2019, the Company adopted the new accounting standard ASC 606 (Topic 606), Revenue from Contracts with Customers, and all the related amendments using the modified retrospective method applied to those contracts which were not completed as of July 1, 2019. The adoption of ASC 606 did not have an impact on the Company’s consolidated financial statements or cash flows, for the Company had no revenue and no contracts which were not completed as of July 1, 2019. The Company has acquired and further developed license rights to Functional Intellectual Property (“functional IP”) that it licenses to customers for defined license periods. A functional IP license is a license to intellectual property that has significant standalone functionality that does not include supporting or maintaining the intellectual property during the license period. The Company’s patented drug formulas have significant standalone functionality in their abilities to treat a disease or condition. Further, there is no expectation that the Company will undertake any activities to change the functionality of the drug formulas during the license periods (see Note 7. Exclusive License Agreement to the consolidated financial statements). Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. If a promised good or service is not distinct, it is combined with other performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The terms of the Company’s licensing agreement include the following: (i) up-front fees; (ii) milestone payments related to the achievement of development, regulatory, or commercial goals; and (iii) royalties on net sales of licensed products. License of Intellectual Property: Milestone Payments: Royalties: 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.” On July 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Beginning with the adoption of ASU 2018-07 options granted to our consultants are accounted for in the same manner as options issued to employees. Awards with service-based vesting conditions only – Expense recognized on a straight-line basis over the requisite service period of the award. Awards with performance-based vesting conditions – Expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight-line basis from the award date. The award will continue to be expensed on a straight-line basis over the requisite service period basis until a higher performance-based condition is met, if applicable. Awards with market-based vesting conditions – Expense recognized on a straight-line basis over the requisite service period, which is the lesser of the derived service period or the explicit service period if one is present. However, if the market condition is satisfied prior to the end of the requisite service period, the Company will accelerate all remaining expense to be recognized. Awards with both performance-based and market-based vesting conditions – if an award vesting or exercisability is conditional upon the achievement of either a market condition or performance or service conditions, the requisite service period is generally the shortest of the explicit, implicit, and derived service period. 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. |
Patents, net
Patents, net | 12 Months Ended |
Jun. 30, 2021 | |
Patents, net | |
4. Patents, net | Patents, net consisted of the following (rounded to nearest thousand): Useful life (years) June 30, 2021 June 30, 2020 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 1,280,000 1,208,000 5,506,000 5,434,000 Less: Accumulated amortization for Brilacidin, Anti-microbial- surfactants and related compounds (2,373,000 ) (2,069,000 ) Accumulated amortization for Patents-Kevetrin and related compounds (379,000 ) (305,000 ) Total $ 2,754,000 $ 3,060,000 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 years ended June 30, 2021 and 2020 was approximately $378,000 and $372,000, respectively. At June 30, 2021, the future amortization period for all patents was approximately 4.18 years to 16.75 years. Future estimated amortization expenses are approximately $379,000 for each year from 2022 to 2026, and a total of $859,000 for the year ending June 30, 2027 and thereafter. |
Accrued Expenses Related Partie
Accrued Expenses Related Parties and Other | 12 Months Ended |
Jun. 30, 2021 | |
Accrued Expenses Related Parties and Other | |
5. Accrued Expenses - Related Parties and Other | Accrued expenses consisted of the following (rounded to nearest thousand): June 30, 2021 June 30, 2020 Accrued research and development consulting fees $ 340,000 $ 40,000 Accrued rent (Note 10) - related parties 8,000 8,000 Accrued interest (Note 11) - related parties — 11,000 Total $ 348,000 $ 59,000 |
Accrued Salaries and Payroll Ta
Accrued Salaries and Payroll Taxes Related Parties and Other | 12 Months Ended |
Jun. 30, 2021 | |
Accrued Salaries and Payroll Taxes Related Parties and Other | |
6. Accrued Salaries and Payroll Taxes - Related Parties and Other | Accrued salaries and payroll taxes consisted of the following (rounded to nearest thousand): June 30, 2021 June 30, 2020 Accrued salaries - related parties $ 1,785,000 $ 2,647,000 Accrued payroll taxes - related parties 130,000 130,000 Accrued salaries – others — 279,000 Accrued salaries – employee — 91,000 Withholding tax - payroll 77,000 68,000 Total $ 1,992,000 $ 3,215,000 |
Exclusive License Agreement
Exclusive License Agreement | 12 Months Ended |
Jun. 30, 2021 | |
Exclusive License Agreement | |
7. Exclusive License Agreement | On July 18, 2019, the Company entered into an Exclusive License Agreement (the “License Agreement”) with Alfasigma S.p.A., a global pharmaceutical company (“Alfasigma”), granting Alfasigma the worldwide right to develop, manufacture and commercialize locally-administered Brilacidin for the treatment of UP/UPS. Under the terms of the License Agreement, Alfasigma made an initial upfront non-refundable payment of $0.4 million to the Company in July, 2019 and will make additional payments of up to $24.0 million to the Company based upon the achievement of certain milestones, including a $1.0 million payment due following commencement of the first Phase 3 clinical trial of Brilacidin for UP/UPS and an additional $1.0 million payment upon the filing of a marketing approval application with the U.S. Food and Drug Administration or the European Medicines Agency. At this time, Alfasigma has completed a Phase 1 clinical trial with Brilacidin. In addition to the milestones, Alfasigma will pay a royalty to the Company equal to six percent of net sales of Brilacidin for UP/UPS, subject to adjustment as provided in the License Agreement. The Company generated revenue of $0 million and $0.4 million for the years ended June 30, 2021 and 2020, respectively. Revenue during the years ended June 30, 2020 represented the initial non-refundable payment of $0.4 million received from Alfasigma. |
Operating Leases
Operating Leases | 12 Months Ended |
Jun. 30, 2021 | |
Operating Leases | |
8. Operating Leases | Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. We have elected to account for these lease and non-lease components as a single lease component. We are also electing not to apply the recognition requirements to short-term leases of twelve months or less and instead will recognize lease payments as expense on a straight-line basis over the lease term. The Company determined that the operating lease right-of-use asset was fully impaired on December 31, 2019. As such, the Company recognized an impairment loss of approximately $643,000, after recording amortization of the right-of-use asset for July, August, and September 2019 totaling approximately $27,000, resulting in a carrying value of $0 since December 31, 2019. The Company vacated the leased office space in December 2019, and in January 2020 the Company initiated a lawsuit against the lessor relating to an automatic extension of the lease for the office space and related matters (See Note 9. Commitments and Contingencies). The components of lease expense and supplemental cash flow information related to leases for the year are as follows: Year Ended June 30, 2021 Lease Cost Operating lease cost (included in general and administrative in the Company’s consolidated statement of operations) $ 86,000 Variable lease cost 12,000 $ 98,000 Other Information Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2021 $ 134,000 Weighted average remaining lease term – operating leases (in years) 2.5 Average discount rate – operating leases 18 % The supplemental balance sheet information related to leases for the year is as follows: At June 30, 2021 Operating leases Short-term operating lease liabilities $ 165,000 Long-term operating lease liabilities 252,000 Total operating lease liabilities $ 417,000 The following table provides maturities of the Company’s lease liabilities at June 30, 2021 as follows: Operating Leases Fiscal Year Ending June 30, 2022 $ 223,000 2023 223,000 2024 (remaining 3 months) 60,000 Total lease payments 506,000 Less: Imputed interest/present value discount (89,000 ) Present value of lease liabilities $ 417,000 Operating lease cost for the years ended June 30, 2021 was approximately $86,000. Operating lease cost for the years ended June 30, 2020 was approximately $117,000. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies | |
9. Commitments and Contingencies | Litigation On January 22, 2020, the Company filed a complaint against Cummings Properties, LLC in the Superior Court of the Commonwealth of Massachusetts (C.A. No. 20-77CV00101), seeking, among other things, declaratory relief that the lease for the Company’s prior principal executive offices did not automatically extend for an additional five years from September 2018, return of the Company’s security deposit, and damages. The Company is currently unable to determine the probability of the outcome or reasonably estimate the loss or gain, if any. Contractual Commitments The Company has total non-cancellable contractual minimum commitments of approximately $4.8 million to contract research organizations as of June 30, 2021. Expenses are recognized when services are performed by the contract research organizations. Contingent Liability - Disputed Invoices As described in Note 6. Accrued Salaries and Payroll Taxes, the Company accrued payroll to Dr. Krishna Menon, ex-President of Research of approximately $1,443,000 for his past services with the Company, and this amount was included in accrued salaries and payroll taxes. As described in Note 10. Related Party Transactions, the Company has a payable to Kard Scientific, Inc. (“KARD”) of approximately $1,486,000 for its research and development expenses and this amount was included in accounts payable. KARD is a company owned by Dr. Menon. Dr. Menon’s employment was terminated with the Company on September 18, 2018, and Dr. Menon resigned from the Company’s Board of Directors on December 11, 2018. Dr. Menon, on behalf of himself and KARD, demanded payment of these amounts in October 2019; however, the Company disputes the underlying basis for these amounts and notified Dr. Menon in November 2019 of the Company’s intent not to pay them. All of the above disputed invoices were reflected as current liabilities as of June 30, 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions | |
10. Related Party Transactions | Pre-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 June 30, 2021 and 2020, the accrued research and development expenses payable to KARD was approximately $1,486,000 and this amount was included in accounts payable. Dr. Menon, on behalf of himself and KARD, demanded payment of these amounts in October 2019; however, the Company disputes the underlying basis for these amounts and notified Dr. Menon in November 2019 of the Company’s intent not to pay them. Share Issuance On February 23, 2020, the Company issued (i) options for the purchase of 500,000 shares of Class A common stock at an exercise price of $0.10 per share, which is 110% of the previous per share closing price of $0.09 on February 21, 2020, and (ii) 500,000 shares of Class A common stock to each member of the Company’s Board of Directors, consisting of Leo Ehrlich, Barry Schechter and Zorik Spektor. Other related party transactions are disclosed in Note 11. Convertible Note Payable - Related Party below. |
Convertible Note Payable Relate
Convertible Note Payable Related Party | 12 Months Ended |
Jun. 30, 2021 | |
Convertible Note Payable Related Party | |
11. Convertible Note Payable - Related Party | The Ehrlich Promissory Note C is an unsecured demand note with Mr. Ehrlich, the Company’s Chairman and CEO, that originated in 2010, bears 9% simple interest per annum and is convertible into the Company’s Class A common stock at $0.50 per share. On December 29, 2010, the Company issued 18,000,000 Equity Incentive Options to Mr. Ehrlich, which are exercisable at $0.11 per share. On May 8, 2012, the Company did not have the ability to repay the Ehrlich Promissory Note C loan of approximately $2,022,000 and agreed to change the interest rate 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. On January 29, 2019, the Company issued 909,090 shares of Class B common stock at the option exercise price of $0.11 per share to Mr. Ehrlich for his partial exercise of his option, paid by the cancellation of debt to Mr. Ehrlich of $100,000 to satisfy the exercise price (as permitted pursuant to the terms of the option agreement). On March 30, 2020, the Company issued 909,090 shares of Class B common stock at the option exercise price of $0.11 per share to Mr. Ehrlich for his partial exercise of his option, paid by the cancellation of debt to Mr. Ehrlich of $100,000 to satisfy the exercise price (as permitted pursuant to the terms of the option agreement). On September 8, 2020, the Company issued 1,787,762 shares of Class B common shares (net of 412,238 shares of Class B common shares withheld to satisfy taxes) at the option exercise price of $0.11 per share to Mr. Ehrlich for his partial exercise of his option, paid by the cancellation of debt to Mr. Ehrlich of $242,000 to satisfy the exercise price (as permitted pursuant to the terms of the option agreement). As of June 30, 2021 and 2020, the principal balance of this convertible note payable to Mr. Ehrlich, the Company’s Chairman and CEO was approximately $1,283,000 and $1,822,000, respectively. As of June 30, 2021 and 2020, the balance of accrued interest payable was $0 and $11,000, respectively (see Note 5. Accrued Expenses – Related Parties and Other). As of June 30, 2021 and 2020, the total outstanding balances of principal and interest were approximately $1,283,000 and $1,833,000, respectively. |
Loan payable
Loan payable | 12 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions | |
12. Loan payable | On May 10, 2020 and April 19, 2021, the Company received loan proceeds in the amount of approximately $93,000 and $79,000, respectively, under the Paycheck Protection Program (“PPP”) and it was recorded under loan payable. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. The Company applied for the forgiveness of the first loan and such application is in process. The Company intends to apply for forgiveness of the second PPP loan during fiscal 2022. |
Equity Incentive Plans, Stock-B
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding | 12 Months Ended |
Jun. 30, 2021 | |
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding | |
13. Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding | Stock-based Compensation – Stock Options 2016 Equity Incentive Plan On June 30, 2016, the Board of Directors adopted the Company’s 2016 Plan. The 2016 Plan became effective upon adoption by the Board of Directors on June 30, 2016. On February 23, 2020, the Board of Directors approved an amendment to Section 4.1 of the 2016 Plan to increase the annual limit on the number of awards under such Plan to outside directors from 250,000 to 1,500,000. 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). Stock Options The fair value of options granted for the years ended June 30, 2021 and 2020 was estimated on the date of grant using the Black-Scholes-Merton Model that uses assumptions noted in the following table. Years Ended June 30, 2021 2020 Expected term (in years) 3 – 10 3 - 10 Expected stock price volatility 89.88% to 109.33% 73.68% to 92.21% Risk-free interest rate 0.31% to 0.68% 0.41% to 1.50% Expected dividend yield 0 0 The components of stock-based compensation expense included in the Company’s Consolidated Statement of Operations for the years ended June 30, 2021 and 2020 are as follows (rounded to nearest thousand): Years ended June 30, 2021 2020 Stock-based compensation – officers $ — $ 298,000 Stock-based compensation – employees 59,000 104,000 Stock-based compensation – consultants 124,000 39,000 Reversal of forfeited stock-based compensation — (251,000 ) – included in Research and Development expenses 183,000 190,000 Stock-based compensation – officers – included in General and Administration expenses — 237,000 Total Stock-based compensation, net $ 183,000 $ 427,000 During the year ended June 30, 2021 and 2020 On June 11, 2021, the Company agreed to issue 105,000 stock options to purchase shares of the Company’s common stock to one consultant for his one-year contract. These options were issued with an exercise price of $0.22 per share and vested immediately. The value of these options was approximately $15,000. During the year ended June 30, 2021, the Company recorded approximately $15,000 of related stock-based compensation. The assumptions we used in the Black Scholes option-pricing model were disclosed above. On February 10, 2021, the Company agreed to issue 75,000 stock options to purchase shares of the Company’s common stock to one consultant for his one-year contract. These options were issued with an exercise price of $0.38 per share and vest 33 1/3% on February 10, 2021, 33 1/3% on July 1, 2021, and 33 1/3% on January 1, 2022. The value of these options was approximately $20,000. During the year ended June 30, 2021, the Company recorded approximately $13,000 of related stock-based compensation. The assumptions we used in the Black Scholes option-pricing model were disclosed above. On September 11, 2020, 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. The Company also issued 172,987 options to purchase common stock. These stock options with 3 years vesting period were valued at approximately $33,000 and these 58,394 shares of the Company’s common stock were valued at approximately $13,000, based on the closing bid price as quoted on the OTC on September 11, 2020 at $0.22 per share. During the year ended June 30, 2021, the Company recorded approximately $12,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $9,000 of stock option expense and $3,000 of stock awards. On July 23, 2020, the Company agreed to issue 100,000 stock options to purchase shares of the Company’s common stock to two consultants for their one-year contracts. These options were issued with an exercise price of $0.32 per share and vest 33 1/3% on July 23, 2020, 33 1/3% on January 23, 2021, and 33 1/3% on July 23, 2021. The value of these options was approximately $28,000. During the year ended June 30, 2021, the Company recorded approximately $27,000 of related stock-based compensation. The assumptions we used in the Black Scholes option-pricing model were disclosed above. On May 18, 2020, the Company agreed to issue 500,000 stock options to purchase shares of the Company’s common stock each to two consultants for their one-year contracts. These options were issued with an exercise price of $0.14 per share and vest 33 1/3% on July 1, 2020, 33 1/3% on January 1, 2021, and 33 1/3% on July 1, 2021. The value of these options was approximately $78,000. During the years ended June 30, 2021 and 2020, the Company recorded approximately $53,000 and $25,000 of related stock-based compensation, respectively. The assumptions we used in the Black Scholes option-pricing model were disclosed above. On March 20, 2020, the Company agreed to issue 250,000 stock options to purchase shares of the Company’s common stock to one consultant for his one-year contract. These options were issued with an exercise price of $0.086 per share and vested immediately. The value of these options was approximately $12,000. During the year ended June 30, 2020, the Company recorded approximately $12,000 of related stock-based compensation. The assumptions we used in the Black Scholes option-pricing model were disclosed above. On February 23, 2020, the Company issued 500,000 options each to our Chairman and CEO and two other Board members, with 1,500,000 options in total, which are exercisable for 10 years at $0.10 per share of common stock. These stock options, which were vested immediately, were valued at approximately $102,000 and we recognized approximately $102,000 of stock-based compensation costs and charged to additional paid-in capital as of June 30, 2020. The assumptions we used in the Black Scholes option-pricing model were disclosed above. The Company also issued 500,000 shares of Class A common stock each to our Chairman and CEO and two other Board members, which shares were vested on June 30, 2020 (See Note 14. Equity Transactions). On September 1, 2019, 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. The Company also issued 172,987 options to purchase common stock. These stock options with 3 years vesting period were valued at approximately $20,000, based on the closing bid price as quoted on the OTC on August 30, 2019 at $0.132 per share. During the year ended June 30, 2021, the Company recorded approximately $9,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $7,000 of stock option expense and $2,000 of stock awards. During the year ended June 30, 2020, the Company recorded approximately $7,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $5,000 of stock option expense and $2,000 of stock awards. On September 1, 2019, the Company issued to Dr. Arthur Bertolino, the President and Chief Medical Officer of the Company, 1,066,667 shares of common stock. The Company also issued 617,839 stock options to purchase shares of the Company’s common stock. These stock options were valued at approximately $71,000, based on the closing bid price as quoted on the OTC on August 30, 2019 at $0.132 per share. Due to the fact that Dr. Bertolino resigned on December 19, 2019, the Company recorded the forfeiture of this 2019 options and shares after 60 days of his resignation. During the year ended June 30, 2020, the Company reversed the stock-based compensation expenses of approximately $251,000 in total based on the amount of those unvested options and stock awards we expensed in the current year (see below Note to Forfeiture of options) On September 1, 2018, the Company also issued to Ms. Harness 58,394 shares of the Company’s common stock. 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 OTCQB on August 31, 2018 at $0.40 per share. During the year ended June 30, 2021, the Company recorded approximately $29,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $21,000 of stock option expense and $8,000 of stock awards. During the year ended June 30, 2020, the Company recorded approximately $29,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $21,000 of stock option expense and $8,000 of stock awards. On September 1, 2017, the Company agreed to grant to Ms. Harness under the 2016 Plan (i) 58,394 shares of restricted stock and (ii) a ten-year option to purchase 172,987 shares of the Company’s Class A common stock at an exercise price of $0.705 per share. The 58,394 shares were valued at approximately $41,000 and the 172,987 stock options valued at approximately $112,000. Both shares and options were planned to be amortized over 3 years to September 1, 2020 unless the other vesting requirements are met sooner. During the year ended June 30, 2021, the Company recorded approximately $8,000 of stock-based compensation expense in connection with the foregoing equity awards including approximately $6,000 of stock option expense and $2,000 of stock awards. During the year ended June 30, 2020, the Company recorded approximately $51,000 of stock-based compensation expense in connection with the foregoing equity awards including approximately $37,000 of stock option expense and $14,000 of stock awards. On September 1, 2016, the Company and Ms. Harness entered into an executive employment agreement as the Company’s VP, Clinical Sciences and Project Management, effective on September 1, 2016. Commencing on September 1, 2016, the Company agreed to pay Ms. Harness an annual salary of $250,000. In addition, the Company agreed to grant to Ms. Harness under the Company 2016 Equity Incentive Plan 58,394 shares of restricted stock. Ten-year options to purchase 172,987 shares of the Company’s common stock were also granted at an exercise price of $1.37 per share. The 58,394 shares were valued at approximately $80,000, which were amortized over three years to September 1, 2019. The 172,987 stock options were valued at approximately $220,000 and will be exercisable for 10 years at an exercise price of $1.26 per share. They were amortized over 3 years to September 1, 2019. During the year ended June 30, 2021, the Company recorded approximately $0 of stock-based compensation expense in connection with the foregoing equity awards. During the year ended June 30, 2020, the Company recorded approximately $17,000 of stock-based compensation expense in connection with the foregoing equity awards including approximately $12,000 of stock option expense and $5,000 of stock awards. Exercise of options There were exercises of options to purchase Class B common stock during the years ended June 30, 2021 and 2020. The details of exercises of options to purchase Class B common stock are disclosed in Note 14. Equity Transactions. Forfeiture of options There was forfeiture of 294,330 options to purchase Class A common stock during the years ended June 30, 2021 relating to the expiry of options of 12 consultants. Dr. Bertolino resigned as President and Chief Medical Officer and as a member of the Board of Directors of the Company on December 19, 2019. On February 17, 2020, all 2,471,356 options he held were forfeited, representing the options he was granted since June 27, 2016 to September 1, 2019. During the year ended June 30, 2020, the Company reversed the $251,000 of unvested options and shares that were expensed in the current year and prior years. Stock Options Issued and Outstanding The following table summarizes all stock option activity under the Company’s equity incentive plans: Number of Weighted Average Weighted Average Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2019 22,669,883 $ 0.24 2.41 $ 1,340,000 Granted 3,540,826 $ 0.09 7.44 — Exercised (909,090 ) $ 0.11 — — Forfeited/expired (2,498,521 ) $ 0.67 — — Outstanding at June 30, 2020 22,803,098 $ 0.18 1.83 $ 5,857,312 Granted 452,987 $ 0.27 6.96 — Exercised (16,181,820 ) $ 0.11 — — Forfeited/expired (294,330 ) $ 0.55 — — Outstanding at June 30, 2021 6,779,935 $ 0.35 4.45 $ 345,923 Exercisable at June 30, 2021 6,017,294 $ 0.37 4.12 $ 309,108 Unvested stock options at June 30, 2021 762,641 $ 0.20 7.07 $ 36,815 Restricted Stock Awards Outstanding The following summarizes our restricted stock activity: Weighted Average Number of Grant Date Shares Fair Value Total awards outstanding at June 30, 2019 1,729,288 $ 0.51 Total shares granted 2,625,061 $ 0.11 Total shares vested (2,637,561 ) $ 0.29 Total shares forfeited (1,600,001 ) $ 0.22 Total unvested shares outstanding at June 30, 2020 116,787 $ 0.32 Total shares granted 58,394 $ 0.22 Total shares vested (58,395 ) $ 0.41 Total shares forfeited — $ — Total unvested shares outstanding at June 30, 2021 116,786 $ 0.22 Scheduled vesting for outstanding restricted stock awards at June 30, 2021 is as follows: Year Ending June 30, 2022 2023 2024 Total Scheduled vesting 58,394 38,928 19,464 116,786 As of June 30, 2021, there was approximately $14,000 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 $8,000 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 1.78 years. Stock Warrants Outstanding Warrants to Purchase Series B 5% convertible preferred stock (“2018 Series B 5% convertible preferred stock”) On October 5, 2018, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with one multi-family office for the sale of 2,000 shares of the Company’s newly-created Series B 5% convertible preferred stock (“Series B preferred stock” or “preferred stock”), for aggregate gross proceeds of approximately $2.0 million. Each share of preferred stock was initially 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 (later extended to 15 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. On May 9, 2019, the Company entered into a warrant restructuring and additional issuance agreement (the “Issuance Agreement”) with the holders of the Series B preferred stock and warrants pursuant to which the Company issued an additional 100 shares of Series B preferred stock and Series 4 warrants to purchase an additional 2,500 shares of preferred stock, and the holders of the Series B preferred stock and warrants agreed to exercise warrants to purchase up to $2.0 million of Series B preferred stock through November 2019 subject to the conditions set forth in the Issuance Agreement. The Series 4 warrant entitles the holder thereof to purchase 2,500 shares of preferred stock at $982.50 per share for approximately $2.5 million in aggregate exercise price, for a period of up to nine months following issuance. In addition, the Company extended the termination date for the Series 1 warrants by six months, and agreed to issue one additional share of preferred stock to the Series B investors for each five shares issued upon the exercise of the existing warrants or Series 4 warrants through November 9, 2019, up to a maximum of 400 shares of preferred stock. All 400 shares of preferred stock were issued from May 2019 to September, 2019. On December 26, 2019, the Company extended the termination date for each series of warrants to December 31, 2021 and decreased the exercise price for each series of warrants to $850.00 per share of preferred stock. The warrants modification expense of $1,212,000 was computed as the incremental value of the modified warrants over the unmodified warrants on the modification date using a per share price of $0.05 per share, which was the market price on December 26, 2019. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows: Average risk-free interest rate 1.64 % Average expected life-years 2 Expected volatility 99.03 % Expected dividends 0 % The warrants issued in connection with the Series B preferred stock are deemed to be free standing equity instruments and are recorded in permanent equity (additional paid in capital) based on a relative fair value allocation of proceeds (i.e. warrants’ relative fair value to the Series B preferred stock fair value (without the warrants)) with an offsetting discount to the Series B preferred stock. During the period from October 5, 2018 (date of issuance of preferred stock and warrants) to June 30, 2020, the Company issued all 10,500 shares of its Series B 5% convertible preferred stock, for aggregate gross proceeds of $9.43 million. As of June 30, 2021 and 2020, all Series 1-4 warrants to purchase shares of Series B preferred stock were exercised, and no Series 1-4 warrants were outstanding. Warrants to Purchase Series B-2 5% convertible preferred stock See Note 14 for a description of the warrants to purchase shares of the Company’s Series B-2 5% convertible preferred stock. Warrants to Purchase Common Stock On June 28, 2018, the Company entered into a Securities Purchase Agreement with Aspire Capital Fund, LLC (“Aspire Capital”), pursuant to which the Company 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. The Company issued to Aspire Capital 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-Merton Model. The value of the warrants issued was approximately $1.7 million. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows: Average risk-free interest rate 2.73 % Average expected life-years 5 Expected volatility 52.77 % Expected dividends 0 % All 8,000,000 warrants to purchase shares of the Company’s common stock were exercised at an exercise price of $0.38 per share on June 18, 2020 and June 23, 2020. |
Equity Transactions
Equity Transactions | 12 Months Ended |
Jun. 30, 2021 | |
Equity Transactions | |
14. Equity Transactions | $30 million Class A Common Stock Purchase Agreement with Aspire Capital On July 31, 2020, the Company entered into the 2020 Agreement with Aspire Capital which 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 24-month term of the Agreement. In consideration for entering into the 2020 Agreement, the Company issued to Aspire Capital 6,250,000 shares of its Class A Common Stock as a commitment fee. The commitment fee of approximately $1.4 million was recorded as deferred financing costs and additional paid-in capital and this asset will be amortized over the life of the 2020 Agreement. The amortized amount of approximately $0.6 million was recorded to additional paid-in capital for the years ended June 30, 2021. The unamortized portion is carried on the balance sheet as deferred offering costs and was approximately $0.8 million at June 30, 2021. During the period from July 31, 2020 to June 30, 2021, the Company generated proceeds of approximately $4.6 million under the 2020 Agreement with Aspire Capital from the sale of approximately 22.5 million shares of its common stock. As of June 30, 2021, the available balance under the 2020 Agreement was approximately $25.4 million. Class B Common Stock On January 29, 2019, the Company issued 909,090 shares of Class B common stock at the option exercise price of $0.11 per share to Mr. Ehrlich for his partial exercise of his option, paid by the cancellation of debt to Mr. Ehrlich of $100,000 to satisfy the exercise price (as permitted pursuant to the terms of the option agreement). On March 30, 2020, the Company issued 909,090 shares of Class B common stock at the option exercise price of $0.11 per share to Mr. Ehrlich for his partial exercise of his option, paid by the cancellation of debt to Mr. Ehrlich of $100,000 to satisfy the exercise price On September 8, 2020, Mr. Ehrlich exercised 2.2 million options to purchase 2.2 million shares of Class B common stock at the option exercise price of $0.11 per share. Mr. Ehrlich paid for this exercise of his option by the cancellation of debt to Mr. Ehrlich of $242,000 to satisfy the exercise price (See Note 11. Convertible Note Payable). The Company issued 1,787,762 shares of Class B common stock (net share issuance amount), to Mr. Ehrlich. The remaining 412,238 shares of Class B common stock were withheld from Mr. Ehrlich for the payment of payroll taxes. On October 2, 2020, Mr. Ehrlich exercised 909,090 options to purchase 909,090 shares of Class B common stock at the option exercise price of $0.11 per share. Mr. Ehrlich paid for this exercise of his option by the cancellation of debt to Mr. Ehrlich of $100,000 to satisfy the exercise price (See Note 11. Convertible Note Payable to the consolidated financial statements). The Company issued 727,994 shares of Class B common stock (net share issuance amount), to Mr. Ehrlich. The remaining 181,096 shares of Class B common stock were withheld from Mr. Ehrlich for the payment of payroll taxes. On December 28, 2020, Mr. Ehrlich exercised his option to purchase 13,072,730 shares of Class B common stock, at the option exercise price at $0.11 per shares for the shares, paid by the cancellation of 6,980,583 shares of Class A common stock held by Mr. Ehrlich of $1,438,000 to satisfy the exercise price. The total taxable compensation to Mr. Ehrlich for the 13,072,730 shares was approximately $540,000, based upon the closing stock price on December 29, 2020 of $0.21 a share. The Company withheld 1,765,203 shares of Class B common stock and cancelled additional 854,419 shares of Class A common stock held by Mr. Ehrlich. As a result, the Company issued 11,307,527 shares of Class B common shares (net of 1,765,203 shares of Class B common shares withheld to satisfy taxes), and cancelled 7,835,002 shares of Class A common stock held by Mr Ehrlich. These shares withheld are being reported by the Company as treasury stock, at cost, on the Company’s accompanying balance sheets. As of June 30, 2021 and 2020, the total issued number of Class B common stock were 18 million shares and 1,818,180 shares, respectively, and the total outstanding number of Class B common stock were 15,641,463 shares and 1,818,180 shares, respectively. Class A Common Stock On February 23, 2020, the Company issued 500,000 options each to our Chairman and CEO and two other Board members (see Note 13) and the Company also issued 500,000 shares of Class A common stock each to our Chairman and CEO and two other Board members, which shares were vested on February 24, 2020. During the year ended June 30, 2020, the Company recorded approximately $237,000 of stock-based compensation expense to our Chairman and CEO and two other Board members including approximately $102,000 of stock option expense and $135,000 of stock awards. Series B 5% convertible preferred stock purchase agreement (“2018 Series B 5% convertible preferred stock”) On October 5, 2018, as modified on May 9, 2019 (see Warrant Restructuring and Additional Issuance Agreement as described above), 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 preferred stock, for aggregate gross proceeds of approximately $2.0 million. An initial closing for the sale of 1,250 shares of the Series B preferred stock closed on October 9, 2018, and a second closing for the sale of 750 shares of the Series B 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 issuance costs associated with the Series B preferred stock transaction were attributed to the Series B preferred stock (without the warrants) and to the Series 1, Series 2 and Series 3 warrants based on their relative fair values. The issuance costs attributed to the warrants of $32,000 were reflected as a reduction to additional paid-in capital. The issuance costs associated with the Series B preferred stock liability of $41,000 was recorded immediately as an element of interest cost, which is reflected in interest expense - preferred stock. The Company recognized change in fair value of preferred stock liabilities of $0 and $102,000 under Other (income) expense in the accompanying consolidated Statements of Operations for the years ended June 30, 2021 and 2020, respectively. Underlying Series B preferred stock dividends, paid quarterly, was accrued as interest (given the liability classification of the Series B preferred stock) on a daily basis given fixed dividend terms under the Series B preferred stock. The Company recorded 5% dividend accretion on total outstanding Series B preferred stock up to June 30, 2020. The total dividends of approximately $0 and $52,000 are treated as interest expense – preferred stock during the years ended June 30, 2021 and 2020, respectively. Balance of unpaid dividends of $0 and $13,000 relating to 2018 Series B 5% convertible preferred stock was included at accrued dividend under current liabilities as of June 30, 2021 and 2020, respectively. Terms of the 2018 Series B 5% convertible 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) $0.32 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. 2018 Series B 5% convertible preferred stock Warrants See Note 13 for a description of the Series 1-4 warrants issued in connection with the 2018 Series B 5% convertible preferred stock. No Series 1-4 warrants issued in connection with the 2018 Series B 5% convertible preferred stock were outstanding as of June 30, 2020. Conversion of 2018 Series B 5% convertible preferred stock to common stock During the year ended June 30, 2020, the two preferred stockholders converted 9,190 shares of 2018 Series B 5% convertible preferred stock into 116.3 million shares of common stock. As of June 30, 2020, all preferred stock to common stock were converted into common stock and there was no 2018 preferred stock was outstanding. Series B-2 5% convertible preferred stock (“2020 Series B-2 5% convertible preferred stock”) On December 4, 2020, the Company entered into a securities purchase agreement (the “Series B-2 Securities Purchase Agreement”) with KIPS Bay Select LP for the sale of an aggregate of 5,089 shares of the Company’s Series B-2 5% convertible preferred stock (the “Series B-2 preferred stock”), for aggregate gross proceeds of approximately $5.0 million. An initial closing for the sale of 3,053 shares of the Series B-2 preferred stock closed on December 9, 2020 for aggregate gross proceeds of approximately $3.0 million, and a second closing for the sale of 2,036 shares of the Series B-2 preferred stock closed on February 8, 2021 for aggregate gross proceeds of approximately $2.0 million. Under the Series B-2 Securities Purchase Agreement, the Company also issued to the investors warrants to purchase up to an additional 10,178 shares of preferred stock. The Series B-2 preferred stock is mandatorily redeemable under certain circumstances and, as such, is presented as a liability on the consolidated balance sheets. The Company has elected to measure the value of its preferred stock using the fair value method with offsetting discounts associated with the fair value allocated to the warrants and for the intrinsic value attributed to the beneficial conversion feature (“BCF”). The fair value of the Series B-2 preferred stock (without the warrants) will be assessed at each subsequent reporting date with changes in fair value recorded in the profit and loss as a separate line item below the “loss from operations” section (See ASC 480-10-35-5). The warrants issued in connection with the Series B-2 preferred stock are deemed to be free standing equity instruments and are recorded in permanent equity (additional paid in capital) based on a relative fair value allocation of proceeds (i.e. warrants’ relative fair value to the Series B-2 preferred stock fair value (without the warrants)) with an offsetting discount to the Series B-2 preferred stock. Given that the Series B-2 preferred stock is convertible at any time under these features, the underlying warrant discounts were accreted upon issuance and recorded as interest (resulting in no remaining discount to the Series B-2 preferred stock liability after the issuance). The Company recorded the December 9, 2020 issuance of 3,053 shares Series B-2 Preferred Stock at approximately $2.1 million and the underlying Series 1 and Series 2 warrants at approximately $0.9 million in total by allocating the gross proceeds to Series B-2 preferred stock (without the warrants) and warrants based on their relative fair values or direct valuation as appropriate. The Company recorded BCF of approximately $1.8 million associated with the issuance of the 3,053 shares of Series B-2 preferred stock to additional paid-in capital. The Company then recorded interest of approximately $2.7 million for the BCF and warrant discounts as a first day interest given that the Series B-2 preferred shares can be converted at any time to common stock and given no set term. The Company recorded the February 8, 2021 issuance of 2,036 shares Series B-2 Preferred Stock at approximately $1.5 million and the underlying Series 1 and Series 2 warrants at approximately $0.5 million in total by allocating the gross proceeds to Series B-2 preferred stock (without the warrants) and warrants based on their relative fair values or direct valuation as appropriate. The Company recorded BCF of approximately $1.5 million associated with the issuance of the 2,036 shares of Series B-2 preferred stock to additional paid-in capital. The Company then recorded interest of approximately $2.0 million for the BCF and warrant discounts as a first day interest given that the Series B-2 preferred shares can be converted at any time to common stock and given no set term. The issuance costs associated with the Series B-2 preferred stock transaction were attributed to the Series B-2 preferred stock (without the warrants) and to the Series 1 and Series 2 warrants based on their relative fair values. The issuance costs attributed to the warrants of approximately $10,000 were reflected as a reduction to additional paid-in capital. The issuances costs associated with the Series B-2 preferred stock liability of $25,000 was recorded immediately as an element of interest cost, which are reflected in interest expense - preferred stock. The change in fair value of the total Series B-2 preferred stock was $0 during the years ended June 30, 2021. Underlying Series B-2 preferred stock dividends, paid quarterly, was accrued as interest (given the liability classification of the Series B-2 preferred stock) on a daily basis given fixed dividend terms under the Series B-2 preferred stock. The Company recorded 5% dividend accretion on total outstanding Series B-2 preferred stock and the total dividends accrued of approximately $15,000 are treated as interest during the year ended June 30, 2021, respectively. Terms of the 2020 Series B-2 5% convertible 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-2 5% Convertible Preferred Stock filed with the Nevada Secretary of State on December 4, 2020 (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) $0.35 until August 15, 2021 and $0.50 thereafter, 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. Redemption Rights Following 90 days after the scheduled date for the second closing date, 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. 2020 Series B-2 5% convertible preferred stock warrants Each share of preferred stock was sold together with two warrants: (i) a Series 1 warrant, which entitles the holder thereof to purchase one share of preferred stock at $982.50 per share, or 5,089 shares of preferred stock in the aggregate for approximately $5.0 million in aggregate exercise price, for a period of up to 18 months following issuance, and (ii) a Series 2 warrant, which entitles the holder thereof to purchase one shares of preferred stock at $982.50 per share, or 5,089 shares of preferred stock in the aggregate for approximately $5.0 million in aggregate exercise price, for a period of up to 24 months following issuance. 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 10 days following the Company’s payment of the call fee, provided that the warrant holders have not exercised the warrants prior to cancellation. Exercise of 2020 Series B-2 5% convertible preferred stock warrants During the year ended June 30, 2021, the Company issued 3,053 shares of its Series B-2 5% convertible preferred stock, for aggregate gross proceeds of $2,999,573, upon exercise of 3,053 Series 1 warrants issued by the Company. In addition, the Company issued 2,053 shares of its Series B-2 5% convertible preferred stock, for aggregate gross proceeds of $2,017,073, upon exercise of 2,053 Series 2 warrants issued by the Company. With regard to the exercise of these 5,106 warrants, the Company recorded gross proceeds of approximately $5,017,000 to the preferred stock liability. As of June 30, 2021, 5,072 Series 1 and 2 warrants to purchase 5,072 shares of Series B-2 5% convertible preferred stock were outstanding. Conversion of 2020 Series B-2 5% convertible preferred stock to common stock During the year ended June 30, 2021, the 2020 Series B-2 5% convertible preferred stockholder converted a total of 10,207 shares of Series B-2 preferred stock into a total of 68,034,812 shares of common stock. With regard to conversions, the Company reversed Series B-2 5% convertible preferred stock liability relating to the conversion and recorded as Additional paid-in capital at par value. The Company reversed the amount of approximately $10,017,000 based on the proportion of Series B-2 5% convertible preferred stock converted relative to the original total issued. As of June 30, 2021, there are no 2020 Series B-2 5% convertible preferred stock outstanding and the 2020 Series B-2 5% convertible preferred stock liability is $0. Treasury Stock Regarding the exercise of options to purchase 2.2 million shares of Class B common stock on September 8, 2020 by Mr. Ehrlich, the Company issued 1,787,762 shares of Class B common stock (net share issuance amount), to Mr. Ehrlich. The remaining 412,238 shares of Class B common stock were withheld from Mr. Ehrlich for the payment of payroll taxes and were reported by the Company as treasury stock, at cost, on the Company’s accompanying balance sheets. Regarding the exercise of options to purchase 909,090 shares of Class B common stock on October 2, 2020, the Company issued 727,994 shares of Class B common stock (net share issuance amount), to Mr. Ehrlich. The remaining 181,096 shares of Class B common stock were withheld were withheld from Mr. Ehrlich for the payment of payroll taxes and were reported by the Company as treasury stock, at cost, on the Company’s accompanying balance sheets. Regarding the exercise of options to purchase 13,072,730 shares of Class B common stock on December 28, 2020, the Company cancelled 6,980,583 shares of Class A common stock held by Mr. Ehrlich of $1,438,000 to satisfy the exercise price. The Company withheld 1,765,203 shares of Class B common stock and cancelled additional 854,419 shares of Class A common stock held by Mr. Ehrlich. As a result, the Company issued 11,307,527 shares of Class B common shares (net of 1,765,203 shares of Class B common shares withheld to satisfy taxes), and cancelled 7,835,002 shares of Class A common stock held by Mr Ehrlich. Both the 1,765,203 shares of Class B common stock and the 7,835,002 shares of Class A common stock were reported by the Company as treasury stock, at cost, on the Company’s accompanying balance sheets. There were 8,516,056 shares of Class A common stock and 2,358,537 shares of Class B common stock held in treasury, purchased at a total cumulative cost of approximately $2.3 million as of June 30, 2021. There were 659,448 shares of Class A common stock and 0 shares of Class B common stock held in treasury, purchased at a total cumulative cost of approximately $146,000 as of June 30, 2020. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurement | |
15. Fair value measurement | The Company has elected to measure its preferred stock using the fair value method. The fair value of the preferred stock is the estimated amount that would be paid to redeem the liability in an orderly transaction between market participants at the measurement date. The Company calculates the fair value of: A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The three levels of valuation hierarchy are defined as follows: • Level 1: Observable inputs such as quoted prices in active markets; • Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company has elected to measure its preferred stock using the fair value method. The fair value of the preferred stock is the estimated amount that would be paid to redeem the liability in an orderly transaction between market participants at the measurement date. The Company calculates the fair value of the Series B-2 Preferred stock using a lattice model that takes into consideration the future redemption value on the instrument, which is tied to the Company’s stock price. These valuations are considered to be Level 3 fair value measurements as the significant inputs are unobservable and require significant management judgment or estimation. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company’s estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. Significant assumptions used in the fair value models include: the estimates of the redemption dates; credit spreads; dividend payments; and the market price of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The table below sets forth a reconciliation of the Company’s beginning and ending Level 3 Series B-2 preferred stock liability balance for the year ended June 30, 2021: FY 2021 Balance, beginning of period $ — Issuance of Series B-2 preferred stock at fair value 5,000,000 Exercise of Series 1 and 2 warrants 5,017,000 Conversion of Series B-2 preferred stock to common stock (10,017,000 ) Change in fair value of Series B-2 preferred stock (1) (— ) Balance, end of period $ — (1) Change in fair value of preferred stock is reported in interest expense—preferred stock. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
16. Income Taxes | Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the financial statements. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized as income or expense in the period that included the enactment date. The Company has incurred operating losses since its inception and therefore no tax liabilities have been incurred for the periods presented. The amount of unused tax losses (“NOL”) available for carryforward and to be applied against taxable income in future years totaled approximately $98.7 million at June 30, 2021. The Tax Cuts and Jobs Act changes the rules on NOL carryforwards. The 20-year limitation was eliminated for losses incurred for the 2018 tax year, giving the taxpayer the ability to carry forward losses indefinitely. However, NOL carry forward arising after January 1, 2018, will now be limited to 80% of taxable income. Internal Revenue Code Sec. 382 places limitations on the utilization of net operating losses. The income tax provision benefit differs from the amount of tax determined by applying the Federal and States statutory rates as follows: June 30, 2021 June 30, 2020 Book income at federal statutory rate 21.00 % 21.00 % State income tax, net of federal tax benefit 6.32 % 6.32 % Change in valuation allowance (25.36 %) (30.44 %) Research and development credit — % 4.20 % Permanent difference — % — % Change in Federal Statutory Rate — % — % Others - net (1.96 %) (1.08 %) Total 0.00 % 0.00 % There was no current or deferred provision or benefit for income taxes for the fiscal years ended June 30, 2021 and 2020. The components of deferred tax assets as of June 30, 2021 and 2020 are as follows ( ) June 30, 2021 June 30, 2020 Deferred tax assets: Net operating loss carry forwards $ 26,958,015 $ 23,160,000 Accrued payroll 806,829 807,000 Stock compensation 2,943,278 2,943,000 Research and development credit 5,193,602 5,473,000 Other 99,761 100,000 $ 36,001,485 $ 32,483,000 Valuation allowance (36,001,485 ) (32,483,000 ) Total deferred taxes $ — $ — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2021 | |
Subsequent Events | |
17. Subsequent Events | Equity Transactions From July 1, 2021 to the date of the issuance of these financial statements, the Company issued 2,036 shares of its Series B-2 5% convertible preferred stock, for aggregate gross proceeds of $2.0 million, upon exercise of 2,036 Series 1 warrants issued by the Company. In addition, the Company issued 1,000 shares of its Series B-2 5% convertible preferred stock, for aggregate gross proceeds of $1.0 million, upon exercise of 1,000 Series 2 warrants issued by the Company. At the same time, there were 3,036 preferred stock shares converted to approximately 18.9 million shares of common stock. The Company has evaluated events subsequent to June 30, 2021 through the issuance of these financial statements and determined that there were no additional events requiring disclosure. |
Significant Accounting Polici_2
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Jun. 30, 2021 | |
Significant Accounting Policies and Recent Accounting Pronouncements | |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, recoverability of long-lived assets, 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, restricted stock, warrants and convertible related party notes payable. Common share equivalents were excluded from the computation of diluted earnings per share for the years ended June 30, 2021 and 2020, because their effect was anti-dilutive. Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows: Year Ended June 30, 2021 2020 Net loss per share, basic and diluted $ (0.04 ) $ (0.03 ) Net loss per common shares outstanding: Common stock - Class A $ (0.04 ) $ (0.03 ) Common stock - Class B $ (1.46 ) $ (5.84 ) Total of Class A and Class B $ (0.04 ) $ (0.03 ) Weighted average shares outstanding: Class A common stock 376,659,381 237,298,768 Class B common stock 9,503,827 1,137,604 Total weighted average shares outstanding 386,163,208 238,436,372 Antidilutive securities not included: Stock options 6,017,294 21,457,124 Stock options arising from convertible note payable and accrued interest 2,567,476 3,666,190 Restricted stock grants 116,786 116,787 Total 8,701,556 25,240,101 |
Treasury Stock | The Company accounts for treasury stock using the cost method. There were 8,516,056 shares of Class A common stock and 2,358,537 shares of Class B common stock held in treasury, purchased at a total cumulative cost of approximately $2.3 million as of June 30, 2021. There were 659,448 shares of Class A common stock held in treasury, purchased at a total cumulative cost of $146,000 as of June 30, 2020 (see Note 14. Equity Transactions). Treasury stock, representing shares of the Company’s common stock that have been acquired for payroll tax withholding on vested stock grants, is recorded at its acquisition cost and these shares are not considered outstanding. |
Revenue Recognition | On July 1, 2019, the Company adopted the new accounting standard ASC 606 (Topic 606), Revenue from Contracts with Customers, and all the related amendments using the modified retrospective method applied to those contracts which were not completed as of July 1, 2019. The adoption of ASC 606 did not have an impact on the Company’s consolidated financial statements or cash flows, for the Company had no revenue and no contracts which were not completed as of July 1, 2019. The Company has acquired and further developed license rights to Functional Intellectual Property (“functional IP”) that it licenses to customers for defined license periods. A functional IP license is a license to intellectual property that has significant standalone functionality that does not include supporting or maintaining the intellectual property during the license period. The Company’s patented drug formulas have significant standalone functionality in their abilities to treat a disease or condition. Further, there is no expectation that the Company will undertake any activities to change the functionality of the drug formulas during the license periods (see Note 7. Exclusive License Agreement to the consolidated financial statements). Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. If a promised good or service is not distinct, it is combined with other performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The terms of the Company’s licensing agreement include the following: (i) up-front fees; (ii) milestone payments related to the achievement of development, regulatory, or commercial goals; and (iii) royalties on net sales of licensed products. License of Intellectual Property: Milestone Payments: Royalties: |
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.” On July 1, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Beginning with the adoption of ASU 2018-07 options granted to our consultants are accounted for in the same manner as options issued to employees. Awards with service-based vesting conditions only – Expense recognized on a straight-line basis over the requisite service period of the award. Awards with performance-based vesting conditions – Expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight-line basis from the award date. The award will continue to be expensed on a straight-line basis over the requisite service period basis until a higher performance-based condition is met, if applicable. Awards with market-based vesting conditions – Expense recognized on a straight-line basis over the requisite service period, which is the lesser of the derived service period or the explicit service period if one is present. However, if the market condition is satisfied prior to the end of the requisite service period, the Company will accelerate all remaining expense to be recognized. Awards with both performance-based and market-based vesting conditions – if an award vesting or exercisability is conditional upon the achievement of either a market condition or performance or service conditions, the requisite service period is generally the shortest of the explicit, implicit, and derived service period. 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. |
Significant Accounting Polici_3
Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Significant Accounting Policies and Recent Accounting Pronouncements | |
Schedule of basic and diluted earning per share | Year Ended June 30, 2021 2020 Net loss per share, basic and diluted $ (0.04 ) $ (0.03 ) Net loss per common shares outstanding: Common stock - Class A $ (0.04 ) $ (0.03 ) Common stock - Class B $ (1.46 ) $ (5.84 ) Total of Class A and Class B $ (0.04 ) $ (0.03 ) Weighted average shares outstanding: Class A common stock 376,659,381 237,298,768 Class B common stock 9,503,827 1,137,604 Total weighted average shares outstanding 386,163,208 238,436,372 Antidilutive securities not included: Stock options 6,017,294 21,457,124 Stock options arising from convertible note payable and accrued interest 2,567,476 3,666,190 Restricted stock grants 116,786 116,787 Total 8,701,556 25,240,101 |
Patents, net (Tables)
Patents, net (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Patents, net (Tables) | |
Schedule of patents | Useful life (years) June 30, 2021 June 30, 2020 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 1,280,000 1,208,000 5,506,000 5,434,000 Less: Accumulated amortization for Brilacidin, Anti-microbial- surfactants and related compounds (2,373,000 ) (2,069,000 ) Accumulated amortization for Patents-Kevetrin and related compounds (379,000 ) (305,000 ) Total $ 2,754,000 $ 3,060,000 |
Accrued Expenses Related Part_2
Accrued Expenses Related Parties and Other (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Accrued Expenses Related Parties and Other | |
Schedule of accrued expenses | June 30, 2021 June 30, 2020 Accrued research and development consulting fees $ 340,000 $ 40,000 Accrued rent (Note 10) - related parties 8,000 8,000 Accrued interest (Note 11) - related parties — 11,000 Total $ 348,000 $ 59,000 |
Accrued Salaries and Payroll _2
Accrued Salaries and Payroll Taxes Related Parties And Other (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Accrued Salaries and Payroll Taxes Related Parties and Other | |
Schedule of accrued salaries and payroll taxes | June 30, 2021 June 30, 2020 Accrued salaries - related parties $ 1,785,000 $ 2,647,000 Accrued payroll taxes - related parties 130,000 130,000 Accrued salaries – others — 279,000 Accrued salaries – employee — 91,000 Withholding tax - payroll 77,000 68,000 Total $ 1,992,000 $ 3,215,000 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Operating Leases | |
Schedule of components of lease expense | Year Ended June 30, 2021 Lease Cost Operating lease cost (included in general and administrative in the Company’s consolidated statement of operations) $ 86,000 Variable lease cost 12,000 $ 98,000 Other Information Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2021 $ 134,000 Weighted average remaining lease term – operating leases (in years) 2.5 Average discount rate – operating leases 18 % |
Schedule of operating lease liabilities | At June 30, 2021 Operating leases Short-term operating lease liabilities $ 165,000 Long-term operating lease liabilities 252,000 Total operating lease liabilities $ 417,000 |
Schedule of maturities of the lease liabilities | Operating Leases Fiscal Year Ending June 30, 2022 $ 223,000 2023 223,000 2024 (remaining 3 months) 60,000 Total lease payments 506,000 Less: Imputed interest/present value discount (89,000 ) Present value of lease liabilities $ 417,000 |
Equity Incentive Plans StockBas
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Tables) | |
Schedule of fair value of the warrants assumptions | Years Ended June 30, 2021 2020 Expected term (in years) 3 – 10 3 - 10 Expected stock price volatility 89.88% to 109.33% 73.68% to 92.21% Risk-free interest rate 0.31% to 0.68% 0.41% to 1.50% Expected dividend yield 0 0 |
Components of stock-based compensation expense | Years ended June 30, 2021 2020 Stock-based compensation – officers $ — $ 298,000 Stock-based compensation – employees 59,000 104,000 Stock-based compensation – consultants 124,000 39,000 Reversal of forfeited stock-based compensation — (251,000 ) – included in Research and Development expenses 183,000 190,000 Stock-based compensation – officers – included in General and Administration expenses — 237,000 Total Stock-based compensation, net $ 183,000 $ 427,000 |
Schedule of stock option activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2019 22,669,883 $ 0.24 2.41 $ 1,340,000 Granted 3,540,826 $ 0.09 7.44 — Exercised (909,090 ) $ 0.11 — — Forfeited/expired (2,498,521 ) $ 0.67 — — Outstanding at June 30, 2020 22,803,098 $ 0.18 1.83 $ 5,857,312 Granted 452,987 $ 0.27 6.96 — Exercised (16,181,820 ) $ 0.11 — — Forfeited/expired (294,330 ) $ 0.55 — — Outstanding at June 30, 2021 6,779,935 $ 0.35 4.45 $ 345,923 Exercisable at June 30, 2021 6,017,294 $ 0.37 4.12 $ 309,108 Unvested stock options at June 30, 2021 762,641 $ 0.20 7.07 $ 36,815 |
Schedule of Restricted Stock Award Activity | Weighted Average Number of Grant Date Shares Fair Value Total awards outstanding at June 30, 2019 1,729,288 $ 0.51 Total shares granted 2,625,061 $ 0.11 Total shares vested (2,637,561 ) $ 0.29 Total shares forfeited (1,600,001 ) $ 0.22 Total unvested shares outstanding at June 30, 2020 116,787 $ 0.32 Total shares granted 58,394 $ 0.22 Total shares vested (58,395 ) $ 0.41 Total shares forfeited — $ — Total unvested shares outstanding at June 30, 2021 116,786 $ 0.22 |
Schedule of vesting outstanding restricted stock | Year Ending June 30, 2022 2023 2024 Total Scheduled vesting 58,394 38,928 19,464 116,786 |
Schedule of outstanding Series B preferred stock warrants | Average risk-free interest rate 1.64 % Average expected life-years 2 Expected volatility 99.03 % Expected dividends 0 % |
Schedule of assumptions used in the Black Scholes option-pricing model | Average risk-free interest rate 2.73 % Average expected life-years 5 Expected volatility 52.77 % Expected dividends 0 % |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurement | |
Schedule of Change in fair value of preferred stock | FY 2021 Balance, beginning of period $ — Issuance of Series B-2 preferred stock at fair value 5,000,000 Exercise of Series 1 and 2 warrants 5,017,000 Conversion of Series B-2 preferred stock to common stock (10,017,000 ) Change in fair value of Series B-2 preferred stock (1) (— ) Balance, end of period $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
Schedule of federal statutory rate | June 30, 2021 June 30, 2020 Book income at federal statutory rate 21.00 % 21.00 % State income tax, net of federal tax benefit 6.32 % 6.32 % Change in valuation allowance (25.36 %) (30.44 %) Research and development credit — % 4.20 % Permanent difference — % — % Change in Federal Statutory Rate — % — % Others - net (1.96 %) (1.08 %) Total 0.00 % 0.00 % |
Schedule of deferred tax assets | June 30, 2021 June 30, 2020 Deferred tax assets: Net operating loss carry forwards $ 26,958,015 $ 23,160,000 Accrued payroll 806,829 807,000 Stock compensation 2,943,278 2,943,000 Research and development credit 5,193,602 5,473,000 Other 99,761 100,000 $ 36,001,485 $ 32,483,000 Valuation allowance (36,001,485 ) (32,483,000 ) Total deferred taxes $ — $ — |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Cash | $ 10,200,000 | ||
Total Current Liabilities | 6,538,000 | $ 7,369,000 | |
Net loss | (13,872,000) | (6,648,000,000,000) | |
Working capital (deficit) | (4,200,000) | $ (1,300,000) | |
Future budget expenditures | 10,200,000 | ||
Clinical activities | 8,200,000 | ||
2020 Agreement [Member] | Class A Common Stock [Member] | Aspire Capital [Member] | |||
Aggregate Purchase | $ 30,000,000 | ||
Common stock, shares issued | 6,250,000 | ||
Commitment fee | $ 1,400,000 | ||
Available balance | $ 25,400,000 |
Significant Accounting Polici_4
Significant Accounting Policies and Recent Accounting Pronouncements (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Net loss per share, basic and diluted | $ (0.04) | $ (0.03) |
Class A Common Stock [Member] | ||
Net loss per share, basic and diluted | (0.04) | (0.03) |
Common Class B [Member] | ||
Net loss per share, basic and diluted | (1.46) | (5.84) |
Class A and Class B [Member] | ||
Net loss per share, basic and diluted | $ (0.04) | $ (0.03) |
Significant Accounting Polici_5
Significant Accounting Policies and Recent Accounting Pronouncements (Details 1) - shares | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Weighted average shares outstanding | 386,163,208 | 238,436,372 |
Class A Common Stock [Member] | ||
Weighted average shares outstanding | 376,659,381 | 237,298,768 |
Class B Common Stock [Member] | ||
Weighted average shares outstanding | 9,503,827 | 1,137,604 |
Significant Accounting Polici_6
Significant Accounting Policies and Recent Accounting Pronouncements (Details 2) - shares | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive securities not included: | ||
Stock options | 6,017,294 | 21,457,124 |
Stock options arising from convertible note payable and accrued interest | 2,567,476 | 3,666,190 |
Restricted stock grants | 116,786 | 116,787 |
Total | 8,701,556 | 25,240,101 |
Significant Accounting Polici_7
Significant Accounting Policies and Recent Accounting Pronouncements (Details Narrative) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Treasury Stock, value | $ 2,300,000 | $ 146,000 |
Treasury Stock, shares | 10,874,593 | 659,448 |
Class B Common Stock [Member] | ||
Treasury Stock, shares | 2,358,537 | |
Class A Common Stock [Member] | ||
Treasury Stock, shares | 8,516,056 | 659,448 |
Patents, net (Details)
Patents, net (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Patent costs - gross | $ 5,506,000 | $ 5,434,000 |
Patent costs - net | 2,754,000 | 3,060,000 |
Patents [Member] | ||
Patent costs - gross | $ 4,082,000 | 4,082,000 |
Useful life | 14 years | |
Accumulated amortization | $ (2,373,000) | (2,069,000) |
Patents Two [Member] | ||
Patent costs - gross | $ 144,000 | 144,000 |
Useful life | 12 years | |
Patents Three [Member] | ||
Patent costs - gross | $ 1,280,000 | 1,208,000 |
Useful life | 17 years | |
Accumulated amortization | $ (379,000) | $ (305,000) |
Patents, net (Details Narrative
Patents, net (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Amortization of patent costs | $ 378,000 | $ 372,000 |
Patents [Member] | ||
June 30, 2022 | 379,000 | |
June 30, 2023 | 379,000 | |
June 30, 2024 | 379,000 | |
June 30, 2025 | 379,000 | |
June 30, 2026 | 379,000 | |
June 30, 2027 and Thereafter | $ 859,000 | |
Future amortization period | 14 years | |
Patents [Member] | Minimum [Member] | IntangibleAssets [Member] | ||
Estimated remaining useful lives of the assets | 12 years | |
Future amortization period | 4 years 2 months 5 days | |
Patents [Member] | Maximum [Member] | IntangibleAssets [Member] | ||
Estimated remaining useful lives of the assets | 17 years | |
Future amortization period | 16 years 8 months 30 days |
Accrued Expenses Related Part_3
Accrued Expenses Related Parties and Other (Details) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Accrued Expenses Related Parties and Other | ||
Accrued research and development consulting fees | $ 340,000 | $ 40,000 |
Accrued rent (Note 10) - related parties | 8,000 | 8,000 |
Accrued interest (Note 11) - related parties | 0 | 11,000 |
Total | $ 348,000 | $ 59,000 |
Accrued Salaries and Payroll _3
Accrued Salaries and Payroll Taxes Related Parties And Other (Details) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Accrued Salaries and Payroll Taxes Related Parties and Other | ||
Accrued salaries - related parties | $ 1,785,000 | $ 2,647,000 |
Accrued payroll taxes - related parties | 130,000 | 130,000 |
Accrued salaries - others | 0 | 279,000 |
Accrued Salaries - employee | 0 | 91,000 |
Withholding tax - payroll | 77,000 | 68,000 |
Total | $ 1,992,000 | $ 3,215,000 |
Exclusive License Agreement (De
Exclusive License Agreement (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jul. 18, 2019 | |
Non-refundable payment | $ 400,000 | ||
Revenues | $ 0 | $ 423,000 | |
Alfasigma [Member] | |||
Revenues | $ 400,000 | ||
License Agreement [Member] | |||
Non-refundable payment | $ 400,000 | ||
Payment due following commencement of first phase III clinical trial of Brilacidin | 1,000,000 | ||
Payment due upon filing of a marketing approval application | 1,000,000 | ||
Additional payments payable upon achievement of certain milestones under agreement by related party | $ 24,000,000 |
Operating Leases (Details)
Operating Leases (Details) | 12 Months Ended |
Jun. 30, 2021USD ($) | |
Lease Cost | |
Operating lease cost (included in general and administrative in the Company's consolidated statement of operations) | $ 86,000 |
Variable lease cost | 12,000 |
Total operating cost | 98,000 |
Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2021 | $ 134,000 |
Weighted average remaining lease term - operating leases (in years) | 2 years 5 months 30 days |
Average discount rate - operating leases | 18.00% |
Operating Leases (Details 1)
Operating Leases (Details 1) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Operating leases | ||
Short-term operating lease liabilities | $ 165,000 | $ 138,000 |
Long-term operating lease liabilities | 252,000 | $ 417,000 |
Total operating lease liabilities | $ 417,000 |
Operating Leases (Details 2)
Operating Leases (Details 2) | Jun. 30, 2021USD ($) |
Fiscal Year Ending June 30, | |
2022 | $ 223,000 |
2023 | 223,000 |
2024 (remaining 3 months) | 60,000 |
Total lease payments | 506,000 |
Less: Imputed interest/present value discount | (89,000) |
Present value of lease liabilities | $ 417,000 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Leases (Details Narrative) | |||
Amortization of the right-of-use asset | $ 27,000 | ||
Operating lease cost | $ 86,000 | $ 117,000 | |
Impairment expense of operating lease | 643,000 | $ 0 | $ 643,000 |
Operating lease carrying value | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Jun. 30, 2021USD ($) |
Contractual commitments | $ 4,800,000 |
Dr Krishna Menon [Member] | |
Accrued salaries and payroll taxes | 1,443,000 |
Accounts payable | $ 1,486,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | ||
Feb. 23, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Clinical Studies [Member] | |||
Accrued research and development expenses | $ 1,486,000 | $ 1,486,000 | |
Common Class A [Member] | |||
Options to purchase shares | 500,000 | ||
Exercise price | $ 0.10 | ||
Exercise price description | A common stock at an exercise price of $0.10 per share, which is 110% of the previous per share closing price of $0.09 on February 21, 2020 | ||
Common Class A [Member] | Zorik Spektor [Member] | |||
Common stock, Shares issued | 500,000 |
Convertible Note Payable Rela_2
Convertible Note Payable Related Party (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
May 07, 2012 | Jun. 30, 2021 | Dec. 28, 2020 | Sep. 08, 2020 | Jun. 30, 2020 | Mar. 30, 2020 | Jan. 29, 2019 | May 08, 2012 | |
Total outstanding balance of principal and interest | $ 1,283,000 | $ 1,833,000 | ||||||
Accrued interest - related parties | $ 0 | $ 11,000 | ||||||
Treasury Stock Shares | 10,874,593 | 659,448 | ||||||
Common Class B [Member] | ||||||||
Common stock shares issued upon extinguishment of debt | 1,787,762 | |||||||
Common Class B [Member] | Mr. Ehrlich [Member] | ||||||||
Exercise price | $ 0.11 | |||||||
Amount of debt extinguished | $ 242,000 | $ 100,000 | $ 100,000 | |||||
Common stock shares issued upon extinguishment of debt | 13,072,730 | 1,787,762 | 909,090 | 909,090 | ||||
Treasury Stock Shares | 1,765,203 | 1,765,203 | 412,238 | |||||
Ehrlich Promissory Note C [Member] | ||||||||
Exercise price | $ 0.51 | |||||||
Principal balance of demand notes | $ 2,022,000 | |||||||
Equity incentive shares | 2,000,000 | |||||||
Interest rate | 10.00% | |||||||
Closing bid price per share | $ 0.46 | |||||||
Percentage of closing bid price | 110.00% | |||||||
Mr. Ehrlich [Member] | ||||||||
Principal balance of demand notes | $ 1,283,000 | $ 1,822,000 | ||||||
Mr. Ehrlich [Member] | Common Class B [Member] | ||||||||
Exercise price | $ 0.11 | $ 0.11 | ||||||
Amount of debt extinguished | $ 100,000 | $ 100,000 | ||||||
Common stock shares issued upon extinguishment of debt | 909,000 | 909,090 | ||||||
December 29, 2010 [Member] | Mr. Ehrlich [Member] | ||||||||
Exercise price | $ 0.11 | |||||||
Option issued | 18,000,000 | |||||||
Originated In 2010 [Member] | Ehrlich Promissory Note C [Member] | ||||||||
Interest rate | 9.00% | |||||||
Common stock price per share | $ 0.50 |
Loan payable (Details Narrative
Loan payable (Details Narrative) - Paycheck Protection Program [Member] - USD ($) | May 10, 2020 | Apr. 19, 2021 | Jun. 30, 2021 |
Payroll expenses description | The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. | ||
Loan proceeds | $ 93,000 | $ 79,000 |
Equity Incentive Plans StockB_2
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details) - Stock Option [Member] | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Expected term (in years) | 3 years | 3 years |
Expected stock price volatility | 89.88% | 73.68% |
Risk-free interest rate | 0.31% | 0.41% |
Maximum [Member] | ||
Expected term (in years) | 10 years | 10 years |
Expected stock price volatility | 109.33% | 92.21% |
Risk-free interest rate | 0.68% | 1.50% |
Equity Incentive Plans StockB_3
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Tables) | ||
Stock-based compensation - officers | $ 0 | $ 298,000 |
Stock-based compensation - employees | 59,000 | 104,000 |
Stock-based compensation - consultants | 124,000 | 39,000 |
Reversal of forfeited stock-based compensation | 0 | (251,000) |
Included in Research and Development expenses | 183,000 | 190,000 |
Stock-based compensation - officers - included in General and Administration expenses | 0 | 237,000 |
Total Stock-based compensation, net | $ 183,000 | $ 427,000 |
Equity Incentive Plans StockB_4
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 2) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Exercised | (6,017,294) | (21,457,124) |
Stock Option [Member] | ||
Beginning balance, outstanding | 22,803,098 | 22,669,883 |
Granted | 45,298 | 3,540,826 |
Exercised | (16,181,820) | (909,090) |
Forfeited/expired | (294,330) | (2,498,521) |
Ending balance, outstanding | 6,779,935 | 22,803,098 |
Exercisable | 6,017,294 | |
Unvested stock options | 762,641 | |
Weighted average exercise price, beginning balance | $ 0.18 | $ 0.24 |
Weighted average exercise price, granted | 0.27 | 0.09 |
Weighted average exercise price, exercised | 0.11 | 0.11 |
Weighted average exercise price, forfeited/expired | 0.55 | 0.67 |
Weighted average exercise price, ending balance | 0.35 | $ 0.18 |
Weighted average exercise price, exercisable | 0.37 | |
Weighted average exercise price, unvested stock options | $ 0.20 | |
Weighted average remaining contractual life, beginning balance | 1 year 9 months 29 days | 2 years 4 months 28 days |
Weighted average remaining contractual life, granted | 6 years 11 months 16 days | 7 years 5 months 9 days |
Weighted average remaining contractual life, ending balance | 4 years 5 months 12 days | 1 year 9 months 29 days |
Weighted average remaining contractual life, Exercisable | 4 years 1 month 13 days | |
Weighted average remaining contractual life, Unvested stock options | 7 years 26 days | |
Aggregate intrinsic value beginning | $ 5,857,312 | $ 1,340,000 |
Aggregate intrinsic value ending | 345,923 | $ 5,857,312 |
Aggregate intrinsic value Exercisable | 309,108 | |
Aggregate intrinsic value unvested stock options | $ 36,815 |
Equity Incentive Plans StockB_5
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 3) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Awards outstanding, Beginning balance | 116,787 | 1,729,288 |
Total shares granted | 58,394 | 2,625,061 |
Total shares vested | (58,395) | (2,637,561) |
Total shares forfeited | (1,600,001) | |
Awards outstanding, Ending balance | 116,786 | 116,787 |
Weighted average, Beginning balance | $ 0.32 | $ 0.51 |
Weighted average, total shares granted | 0.22 | 0.11 |
Weighted average, total shares vested | 0.41 | 0.29 |
Weighted average, total shares forfeited | 0 | 0.22 |
Weighted average, ending balance | $ 0.22 | $ 0.32 |
Equity Incentive Plans StockB_6
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 4) | 12 Months Ended |
Jun. 30, 2021shares | |
Scheduled vesting | 116,786 |
Year Ending June 30, 2024 [Member] | |
Scheduled vesting | 19,464 |
Year Ending June 30, 2022 [Member] | |
Scheduled vesting | 58,394 |
Year Ending June 30, 2023 [Member] | |
Scheduled vesting | 38,928 |
Equity Incentive Plans StockB_7
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 5) - Black Scholes Option [Member] | 12 Months Ended |
Jun. 30, 2021 | |
Average expected life-years | 2 years |
Average risk-free interest rate | 1.64% |
Expected volatility | 99.03% |
Expected dividends | 0.00% |
Equity Incentive Plans StockB_8
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 6) - Warrants to Purchase Common Stock [Member] | 12 Months Ended |
Jun. 30, 2021 | |
Average risk-free interest rate | 2.73% |
Average expected life-years | 5 years |
Expected volatility | 52.77% |
Expected dividends | 0.00% |
Equity Incentive Plans StockB_9
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details Narrative) - USD ($) | Jun. 11, 2021 | Feb. 10, 2021 | Sep. 11, 2020 | Oct. 05, 2018 | Jul. 23, 2020 | May 18, 2020 | Mar. 20, 2020 | Feb. 17, 2020 | May 09, 2019 | Oct. 05, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 26, 2019 | Aug. 30, 2019 |
Unrecognized compensation cost related to unvested restricted stock-based compensation | $ 14,000 | |||||||||||||
Compensation cost not yet recognized, period for recognition | 1 year 9 months 11 days | |||||||||||||
Warrants modification expenses | $ 1,212,000 | |||||||||||||
Expected share based compensation expenses | $ 8,000 | |||||||||||||
Exercise price of preferred stock | $ 850 | |||||||||||||
Price per share | $ 0.05 | |||||||||||||
Forfeiture of options | 294,330 | |||||||||||||
Stock based compensation | $ 183,000 | $ 427,000 | ||||||||||||
Stock issued, shares | 3,036 | |||||||||||||
Proceeds from issuance of warrants | $ 4,990,000 | 0 | ||||||||||||
Foregoing Equity Awards [Member] | ||||||||||||||
Stock based compensation | 12,000 | |||||||||||||
Series B [Member] | Series 1-4 warrants [Member] | ||||||||||||||
Stock issued, shares | 10,500 | |||||||||||||
Series B [Member] | Securities Purchase Agreement [Member] | Series 1 warrant [Member] | ||||||||||||||
Rights and preferences of preferred stock description | 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 (later extended to 15 months following issuance), | |||||||||||||
Series B [Member] | Securities Purchase Agreement [Member] | Series 2 warrant [Member] | ||||||||||||||
Rights and preferences of preferred stock description | 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 | |||||||||||||
Series B [Member] | Securities Purchase Agreement [Member] | Series 4 warrant [Member] | ||||||||||||||
Rights and preferences of preferred stock description | The Series 4 warrant entitles the holder thereof to purchase 2,500 shares of preferred stock at $982.50 per share for approximately $2.5 million in aggregate exercise price, for a period of up to nine months following issuance. In addition, the Company extended the termination date for the Series 1 warrants by six months, and agreed to issue one additional share of preferred stock to the Series B investors for each five shares issued upon the exercise of the existing warrants or Series 4 warrants through November 9, 2019, up to a maximum of 400 shares of preferred stock. All 400 shares of preferred stock were issued from May 2019 to September, 2019 | |||||||||||||
Series 1-4 [Member] | Securities Purchase Agreement [Member] | Series 3 warrant [Member] | ||||||||||||||
Rights and preferences of preferred stock description | 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 | |||||||||||||
Black Scholes Option [Member] | ||||||||||||||
Stock based compensation | 15,000 | 12,000 | ||||||||||||
Black Scholes Option One [Member] | ||||||||||||||
Stock based compensation | 13,000 | |||||||||||||
Black Scholes Option Two [Member] | ||||||||||||||
Stock based compensation | 27,000 | |||||||||||||
Black Scholes Option Three [Member] | ||||||||||||||
Stock based compensation | 53,000 | 25,000 | ||||||||||||
On September 1, 2019 [Member] | ||||||||||||||
Stock based compensation | 9,000 | |||||||||||||
Closing bid price | $ 20,000 | |||||||||||||
Closing stock price | $ 0.132 | |||||||||||||
On June 28, 2018 [Member] | Warrant [Member] | ||||||||||||||
Purchase of warrants | 8,000,000 | |||||||||||||
On June 28, 2018 [Member] | Common Class A [Member] | Securities Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | ||||||||||||||
Proceeds from issuance of warrants | $ 1,700,000 | |||||||||||||
Warrants exercisable period | 5 years | |||||||||||||
Exercise price | 0.38 | |||||||||||||
Common stock shares issuable under agreement | 7,000,000 | |||||||||||||
On October 5, 2018 [Member] | Warrant [Member] | ||||||||||||||
Purchase of warrants | 8,000,000 | |||||||||||||
Beginning balance, Shares | 2,000 | 2,000 | ||||||||||||
Dr. Bertolino [Member] | September 1, 2018 [Member] | ||||||||||||||
Unrecognized compensation cost related to unvested restricted stock-based compensation | 251,000 | |||||||||||||
Stock based compensation | $ 7,000 | 7,000 | ||||||||||||
Stock awards | 2,000 | 2,000 | ||||||||||||
Stock option expenses | $ 7,000 | 5,000 | ||||||||||||
Forfeited shares issued | 2,471,356 | |||||||||||||
Dr. Bertolino [Member] | On September 1, 2018 [Member] | ||||||||||||||
Stock issued, shares | 1,066,667 | |||||||||||||
Stock options to purchase shares | 617,839 | |||||||||||||
Consultant [Member] | On March 30, 2020 [Member] | Stock Option [Member] | ||||||||||||||
Stock based compensation | $ 12,000 | |||||||||||||
Ms. Harness [Member] | On September 1, 2016 [Member] | ||||||||||||||
Stock based compensation | $ 0 | |||||||||||||
Stock awards | 5,000 | |||||||||||||
Stock option expenses | 12,000 | |||||||||||||
Common stock, exercise price | $ 1.37 | |||||||||||||
Exercisable period | 10 years | |||||||||||||
Stock issued, shares | 58,394 | |||||||||||||
Stock options to purchase shares | 172,987 | |||||||||||||
Options purchase period | 10 years | |||||||||||||
Salary annual | $ 250,000 | |||||||||||||
Restricted stock, shares | 58,394 | |||||||||||||
Restricted stock, amount | 80,000 | |||||||||||||
Common stock, granted | 172,987 | |||||||||||||
Shares issued, value | $ 220,000 | |||||||||||||
Amortization period of restricted stock | 3 years | |||||||||||||
Ms. Harness [Member] | On September 1, 2018 [Member] | ||||||||||||||
Stock based compensation | $ 29,000 | |||||||||||||
Stock awards | 8,000 | |||||||||||||
Stock option expenses | $ 21,000 | 17,000 | ||||||||||||
Stock options reserved for future issuance | 172,987 | |||||||||||||
Stock option exercise price | $ 0.40 | |||||||||||||
Stock issued, value | $ 63,000 | |||||||||||||
Vested shares | 58,394 | |||||||||||||
Rights and preferences of preferred stock description | 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 (later extended to 15 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 | |||||||||||||
Dr. Arthur Bertolino [Member] | On September 1, 2019 [Member] | ||||||||||||||
Stock based compensation | $ 251,000 | |||||||||||||
Stock options to purchase shares, value | 71,000 | |||||||||||||
Ms. Harness [Member] | On September 1, 2017 [Member] | Common Class A [Member] | 2016 Equity Incentive Plan [Member] | ||||||||||||||
Stock based compensation | 8,000 | 51,000 | ||||||||||||
Stock awards | $ 3,000 | 2,000 | 14,000 | |||||||||||
Stock option expenses | $ 9,000 | $ 6,000 | $ 37,000 | |||||||||||
Stock issued, shares | 58,394 | 58,394 | ||||||||||||
Stock options to purchase shares | 105,000 | 75,000 | 172,987 | 100,000 | 500,000 | 250,000 | 172,987 | |||||||
Amortization period of restricted stock | 3 years | |||||||||||||
Stock options to purchase shares, value | $ 41,000 | |||||||||||||
Stock options reserved for future issuance | 172,987 | |||||||||||||
Stock option exercise price | $ 0.22 | $ 0.38 | $ 0.22 | $ 0.086 | $ 0.705 | |||||||||
Stock issued, value | $ 15,000 | $ 20,000 | $ 33,000 | $ 28,000 | $ 78,000 | $ 112,000 | ||||||||
Vested shares | 58,394 | |||||||||||||
Common stock shares issued | 58,394 | |||||||||||||
Common stock period value | $ 13,000 | |||||||||||||
Stock options vesting period | 3 years | |||||||||||||
Restricted shares issued | 58,394 | |||||||||||||
Ms. Harness [Member] | On September 1, 2019 [Member] | ||||||||||||||
Stock options to purchase shares, value | $ 20,000 | |||||||||||||
Stock options reserved for future issuance | 172,987 | |||||||||||||
Restricted shares issued | 58,394 | |||||||||||||
Chairman and CEO [Member] | On February 23, 2020 [Member] | Common Class A [Member] | Two other Board Members [Member] | ||||||||||||||
Stock based compensation | $ 237,000 | |||||||||||||
Stock option expenses | $ 102,000 | |||||||||||||
Stock issued, shares | 500,000 | |||||||||||||
Stock options to purchase shares | 1,500,000 | |||||||||||||
Stock options to purchase shares, value | $ 102,000 | |||||||||||||
Two Consultant [Member] | On February 1, 2019 [Member] | ||||||||||||||
Stock options, vested percentage description | These options were issued with an exercise price of $0.38 per share and vest 33 1/3% on February 10, 2021, 33 1/3% on July 1, 2021, and 33 1/3% on January 1, 2022. | These options were issued with an exercise price of $0.32 per share and vest 33 1/3% on July 23, 2020, 33 1/3% on January 23, 2021, and 33 1/3% on July 23, 2021 | These options were issued with an exercise price of $0.14 per share and vest 33 1/3% on July 1, 2020, 33 1/3% on January 1, 2021, and 33 1/3% on July 1, 2021 |
Equity Transaction 2 (Details N
Equity Transaction 2 (Details Narrative) - USD ($) | Feb. 08, 2021 | Dec. 09, 2020 | Dec. 04, 2020 | Sep. 08, 2020 | Dec. 28, 2020 | Jul. 31, 2020 | Oct. 05, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | Mar. 30, 2020 | Dec. 26, 2019 | Jan. 29, 2019 |
Proceeds From sale of common stock | $ 3,000,000 | ||||||||||||
Treasury Stock Shares | 10,874,593 | 659,448 | |||||||||||
Warrants exercised | 6,017,294 | 21,457,124 | |||||||||||
Stock based compensation | $ 183,000 | $ 427,000 | |||||||||||
Proceeds from exercise price | $ 0 | $ 3,040,000 | |||||||||||
Redemption rights percentage | 120.00% | ||||||||||||
Exercise price | $ 0.05 | ||||||||||||
common shares issued | 3,036 | ||||||||||||
Warrant [Member] | |||||||||||||
Warrants exercised | 8,000,000 | ||||||||||||
Stock issuance cost | $ 32,000 | ||||||||||||
October 5, 2018 [Member] | Warrant [Member] | |||||||||||||
Proceeds from issuance of shares | $ 200,000 | ||||||||||||
Sale of preferred stock | 1,250 | ||||||||||||
Warrants to purchase additional shares | 8,000 | ||||||||||||
Two Preferred Stockholders [Member] | |||||||||||||
Conversion of Series B Convertible Preferred stock to Common stock, reversed | 0 | 9,190 | |||||||||||
Common stock shares issued upon conversion of preferred stock | 0 | 11,630,000 | |||||||||||
Common Class A [Member] | |||||||||||||
Treasury Stock Shares | 7,835,002 | 8,516,056 | 659,448 | ||||||||||
Cancellation shares | 854,419 | ||||||||||||
Common stock, shares issued | 426,673,198 | 329,829,992 | |||||||||||
Cumulative cost | $ 2,100,000 | $ 146,000 | |||||||||||
Common Stock, shares outstanding | 418,157,142 | 329,170,544 | |||||||||||
Common Class A [Member] | Mr. Ehrlich [Member] | |||||||||||||
Cancellation shares | 7,835,002 | 7,835,002 | |||||||||||
Common Class A [Member] | Chairman and CEO [Member] | On February 23, 2020 [Member] | Two other Board Members [Member] | |||||||||||||
Warrants exercised | 500,000 | ||||||||||||
Stock based compensation | $ 237,000 | ||||||||||||
common shares issued | 500,000 | ||||||||||||
Stock option expense | $ 102,000 | ||||||||||||
Stock awards | $ 135,000 | ||||||||||||
Common Class B [Member] | |||||||||||||
Common stock, shares issued | 18,000,000 | 1,818,180 | 1,818,180 | ||||||||||
Cumulative cost | $ 2,300,000 | ||||||||||||
Common Stock, shares outstanding | 15,641,463 | 1,818,180 | 1,818,180 | ||||||||||
Option exercised | $ 2,200,000 | ||||||||||||
Common stock shares issued upon extinguishment of debt | 1,787,762 | ||||||||||||
Treasury shares | 412,238 | ||||||||||||
Common stock held in treasury | 2,358,537 | ||||||||||||
Common Class B [Member] | Mr. Ehrlich [Member] | |||||||||||||
Treasury Stock Shares | 412,238 | 1,765,203 | 1,765,203 | ||||||||||
Proceeds from exercise price | $ 1,438,000 | ||||||||||||
Cancellation shares | 6,980,583 | ||||||||||||
Option exercised | $ 2,200,000 | ||||||||||||
Common stock shares issued upon extinguishment of debt | 1,787,762 | 13,072,730 | 909,090 | 909,090 | |||||||||
Exercise price | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.11 | |||||||||
Amount of debt extinguished | $ 242,000 | $ 100,000 | $ 100,000 | ||||||||||
common shares issued | 11,307,527 | ||||||||||||
Common Class B [Member] | Mr. Ehrlich [Member] | October 2, 2020 [Member] | |||||||||||||
Option exercised | $ 909,090 | ||||||||||||
Common stock shares issued upon extinguishment of debt | 727,994 | ||||||||||||
Treasury shares | 181,096 | 0 | |||||||||||
Common Class B [Member] | Mr. Ehrlich [Member] | |||||||||||||
Common stock shares issued upon extinguishment of debt | 909,000 | 909,090 | |||||||||||
Amount of debt extinguished | $ 100,000 | $ 100,000 | |||||||||||
Class A Common Stock [Member] | |||||||||||||
Treasury Stock Shares | 8,516,056 | 659,448 | |||||||||||
Class A Common Stock [Member] | 2020 Agreement [Member] | Aspire Capital [Member] | |||||||||||||
Proceeds From sale of common stock | $ 4,600,000 | ||||||||||||
Common stock, shares issued | 6,250,000 | ||||||||||||
Aggregate Purchase | $ 30,000,000 | ||||||||||||
Common stock shares issued during the period | 22,500,000 | ||||||||||||
Amortized expenses | $ 600,000 | ||||||||||||
Deferred offering costs | 800,000 | ||||||||||||
Commitment fee | $ 1,400,000 | ||||||||||||
Available balance, Amount | 25,400,000 | ||||||||||||
Series B Convertible Preferred Stock [Member] | 2020 Series B 5% Convertible Preferred Stock 1 [Member] | |||||||||||||
Warrants amount | $ 1,500,000 | 21,000,000 | |||||||||||
Warrant discounts | 2,000,000 | $ 2,700,000 | |||||||||||
Reduction in warrant additional paid-in capital | $ 10,000 | ||||||||||||
Preferred stock liability | 25,000 | ||||||||||||
Change in fair value | 0 | ||||||||||||
Accrued dividends | 150,000 | ||||||||||||
Preferred stock conversion amount | $ 1,080 | ||||||||||||
Conversion price, Description | lower of (i) $0.35 until August 15, 2021 and $0.50 thereafter, | ||||||||||||
Conversion amount limits | $ 75,000 | ||||||||||||
Conversion percentage | 30.00% | ||||||||||||
Sale of aggregate shares | 2,036 | 3,053 | 5,089 | ||||||||||
Gross proceeds | $ 2,000,000 | $ 900,000 | $ 5,000,000 | ||||||||||
Beneficially own in excess coversion | 9.99% | ||||||||||||
Series B Convertible Preferred Stock [Member] | 2020 Series B 5% Convertible Preferred Stock [Member] | |||||||||||||
Sale of aggregate shares | 3,053 | 5,089 | |||||||||||
Gross proceeds | $ 2,000,000 | $ 3,000,000 | $ 5,000,000 | ||||||||||
Additional warrant purchase | 10,178 | ||||||||||||
Series B Convertible Preferred Stock [Member] | 2018 Series B 5% Convertible Preferred Stock [Member] | |||||||||||||
Unpaid dividend | 0 | $ 13,000 | |||||||||||
Dividend | 0 | $ 52,000 | |||||||||||
Stock issuance cost | 41,000 | ||||||||||||
Change in fair value of preferred stock liabilities | $ 0 | $ 102,000 | |||||||||||
Series B Convertible Preferred Stock warrants [Member] | 2020 Series B 5% Convertible Preferred Stock Warrant [Member] | |||||||||||||
Preferred stock shares | 5,089 | ||||||||||||
Per share | $ 982.50 | ||||||||||||
Preferred stock amount | $ 5,000,000 | ||||||||||||
Series B Convertible Preferred Stock warrants [Member] | Exercise of 2020 Series B 5% Convertible Preferred Stock Warrant [Member] | |||||||||||||
Preferred stock liability | 5,017,000 | ||||||||||||
Gross proceeds | $ 2,999,573 | ||||||||||||
Convertible preferred stock, shares | 3,053 | ||||||||||||
Convertible preferred stock, exercise | 3,053 | ||||||||||||
Warrant shares | 5,106 | ||||||||||||
Warrant purchase | 5,072 | ||||||||||||
Series B Convertible Preferred Stock warrants [Member] | 2020 Series B 5% Convertible Preferred Stock Warrant 1 [Member] | |||||||||||||
Preferred stock shares | 5,089 | ||||||||||||
Per share | $ 982.50 | ||||||||||||
Preferred stock amount | $ 5,000,000 | ||||||||||||
Cash payment percentage | 8.00% | ||||||||||||
Series B Convertible Preferred Stock warrants [Member] | Exercise of 2020 Series B 5% Convertible Preferred Stock Warrants 1 [Member] | |||||||||||||
Gross proceeds | $ 2,017,073 | ||||||||||||
Convertible preferred stock, shares | 2,053 | ||||||||||||
Convertible preferred stock, exercise | 2,053 | ||||||||||||
Series B Convertible Preferred Stock warrants [Member] | Conversion of 2020 Series B-2 5% convertible preferred stock to common stock [Member] | |||||||||||||
Preferred stock liability | $ 0 | ||||||||||||
Convertible preferred stock, shares | 10,207 | ||||||||||||
Convertible preferred stock into common stock | 68,034,812 | ||||||||||||
Reversed amount | $ 10,017,000 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Series B 5 Percent Convertible Preferred Stock [Member] | 12 Months Ended |
Jun. 30, 2021USD ($) | |
Beginning Balance | $ 0 |
Issuance of Series B-2 preferred stock at fair value | 5,000,000 |
Exercise of Series 1 and 2 warrants | 5,017,000 |
Conversion of Series B-2 preferred stock to common stock | (10,017,000) |
Change in fair value of Series B-2 preferred stock | 0 |
Ending Balance | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Income Taxes | ||
Book income at federal statutory rate | 21.00% | 21.00% |
State income tax, net of federal tax benefit | 6.32% | 6.32% |
Change in valuation allowance | (25.36%) | (30.44%) |
Research and development credit | 0.00% | 4.20% |
Permanent difference | 0.00% | 0.00% |
Change in Federal Statutory Rate | 0.00% | 0.00% |
Others - net | (1.96%) | (1.08%) |
Total | 0.00% | 0.00% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Deferred tax asset: | ||
Net operating loss carry forwards | $ 26,958,015 | $ 23,160,000 |
Accrued payroll | 806,829 | 807,000 |
Stock compensation | 2,943,278 | 2,943,000 |
Research and development credit | 5,193,602 | 5,473,000 |
Other | 99,761 | 100,000 |
Deferred tax assets, Total | 36,001,485 | 32,483,000 |
Valuation allowance | (36,001,485) | (32,483,000) |
Total deferred taxes | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Jun. 30, 2021USD ($) | |
Income Taxes | |
Operating loss carryforward | $ 98,700,000 |
Description for the ability to carryforward losses | The 20-year limitation was eliminated for losses incurred for the 2018 tax year, giving the taxpayer the ability to carry forward losses indefinitely. However, NOL carry forward arising after January 1, 2018, will now be limited to 80% of taxable income. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 12 Months Ended |
Jun. 30, 2021USD ($)shares | |
Gross proceeds | $ | $ 1,000,000 |
Series B-2 5% convertible preferred stock shares issued | 1,000 |
Warrants shares issued | 1,000 |
Preferred stock shares | 3,036 |
Conversion of Preferred Stock into common stock shares | 189,000,000 |
July 1, 2021 [Member] | |
Gross proceeds | $ | $ 2,000,000 |
Series B-2 5% convertible preferred stock shares issued | 2,036 |
Warrants shares issued | 2,036 |