Stockholders' Equity | 7. Stockholders’ equity Preferred stock Series C Preferred Stock Series C Preferred Stock Number $ Balance – June 30, 2021 20,092 14,652 Conversion of Series C Preferred stock to common stock ( 3,254 ) ( 2,377 ) Balance – June 30, 2022 16,838 12,275 Conversion of Series C Preferred stock to common stock ( 2,630 ) ( 1,909 ) Balance – June 30, 2023 14,208 10,366 In August 2020, the Company issued 25,028 shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) in three separate closings of a private placement (Series C-1, C-2, and C-3). Each share of Series C Preferred Stock was issued at a purchase price of $ 1,000 per share and is convertible into shares of common stock based on the respective conversion prices which were determined at the closing of each round of the private placement. The conversion prices for the Series C-1 Preferred Stock, Series C-2 Preferred Stock, and the Series C-3 Preferred Stock are $ 58.00 , $ 60.70 , and $ 57.50 , respectively. Subject to ownership limitations, the owners of the Series C-1 Preferred Stock, the Series C-2 Preferred Stock, and the Series C-3 Preferred Stock are entitled to receive dividends, payable in shares of common stock at a rate of 10 %, 15 %, 20 % and 25 %, respectively, of the number of shares of common stock issuable upon conversion of the Series C Preferred Stock, on the 12 th , 24 th , 36 th and 48 th month, anniversary of the initial closing of the private placement. The Company paid the 12 th , 24 th , and 36 th month anniversary dividends of 10 %, 15 %, and 20 % common stock dividends on August 19, 2021, 2022, and 2023, respectively. The Series C Preferred Stock dividends do not require declaration by the board of directors and are accrued annually as of the date the dividend is earned in an amount equal to the fair value of the Company’s common stock on the dates the respective dividends are paid. The fair value of the Series C Preferred Stock dividend paid on August 19, 2022, was determined by multiplying the dividends paid of 43 shares of common stock by the Company’s closing share price on August 19, 2022, of $ 8.34 per share for a total fair value of $ 362 . Any outstanding shares of Series C Preferred Stock will automatically convert to shares of common stock on August 19, 2024. In addition, as part of the Series C Preferred financing, the Company issued warrants to the placement agent (“Series C Agent Warrants”). The Series C Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series C Preferred Stock. The Series C Preferred Stock is pari passu in liquidation to the Company’s Series A Preferred Stock. The liquidation value of the Series C Preferred Stock at June 30, 2023, is the stated value of $ 10,366 (June 30, 2022 - $ 12,275 ). The Company’s Series C Preferred Stock outstanding, conversion shares, and future dividends as of June 30, 2023, are as follows: Series Number Conversion Price Number of conversion shares Dividend Shares Series 1 11,415 58.00 197 153 Series 2 898 60.70 15 10 Series 3 1,895 57.50 33 25 14,208 245 188 Series C Dividends Dividend Shares 10% - August 19, 2021 (actual) 34 15% - August 19, 2022 (actual) 43 20% - August 19, 2023 (estimated) 49 25% - August 19, 2024 (estimated) 62 188 Series A Preferred Stock Effective September 30, 2014, the Company filed a Certificate of Designation of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of Nevada. Pursuant to the Series A Certificate of Designation, the Company designated 279 shares of preferred stock as Series A Preferred Stock. The shares of Series A Preferred Stock have a stated value of $ 1.00 per share (the “Series A Stated Value”) and are not convertible into common stock. The holder of the Series A Preferred Stock is entitled to dividends at the rate of 3 % of the Series A Stated Value per year, payable quarterly in arrears. Upon any liquidation of the Company, the holder of the Series A Preferred Stock will be entitled to be paid, out of any assets of the Company available for distribution to stockholders, the Series A Stated Value of the shares of Series A Preferred Stock held by such holder, plus any accrued but unpaid dividends thereon, prior to any payments being made with respect to the common stock. The Series A Preferred Stock is held by Valent (note 5). The Series A Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock, and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series A Preferred Stock. The Series A Preferred Stock is pari passu in liquidation to the Company’s Series C Preferred Stock. The liquidation value of the Series A Preferred stock at June 30, 2023, is its stated value of $ 279 (June 30, 2022 - $ 279 ). There was no change to the Series A Preferred stock for the years ended June 30, 2023, or 2022. Common stock Amended articles of incorporation On June 30, 2023, the Company amended its articles of incorporation to increase the number of authorized shares of common stock from 5,500 to 75,000 shares. Stock issuances Year ended June 30, 2023 On August 2, 2022, the Company entered into a stock purchase agreement, dated as of August 2, 2022, (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to a maximum of $ 20,000 of shares of the Company’s common stock (the “Purchase Shares”). Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park, pursuant to which it agreed to take certain actions relating to the registration of the offer and sale of the Purchase Shares available for issuance under the Purchase Agreement. Upon execution of the Purchase Agreement, the Company issued 33 shares of common stock to Lincoln Park as a commitment fee in connection with entering into the Purchase Agreement. Pursuant to the Purchase Agreement, the Company has the right, in its sole discretion, to present Lincoln Park with a purchase notice directing Lincoln Park to purchase up to 10 Purchase Shares provided that the closing sale price of the common stock on the purchase date is not below a threshold price set forth in the Purchase Agreement (a “Regular Purchase”). The Company and Lincoln Park may mutually agree to increase the Regular Purchase amount with respect to any Regular Purchase under the Purchase Agreement, provided that Lincoln Park’s maximum committed purchase obligation under any single Regular Purchase shall not exceed $ 2,000 . The purchase price per share for each Regular Purchase is based on prevailing market prices of the common stock immediately preceding the time of sale as computed in accordance with the terms set forth in the Purchase Agreement. There are no upper limits on the price per share that Lincoln Park must pay for the Purchase Shares under the Purchase Agreement. If the Company directs Lincoln Park to purchase the maximum number of shares of common stock that the Company may sell in a Regular Purchase, then in addition to such Regular Purchase, and subject to certain conditions and limitations in the Purchase Agreement, the Company may direct Lincoln Park to purchase additional shares of common stock in an “accelerated purchase” (each, an “Accelerated Purchase”) and an “additional accelerated purchase” (each, an “Additional Accelerated Purchase”) (including multiple Additional Accelerated Purchases on the same trading day) as provided in the Purchase Agreement. The purchase price per share for each Accelerated Purchase and Additional Accelerated Purchase will be based on market prices of the common stock on the applicable purchase date for such Accelerated Purchases and such Additional Accelerated Purchases. The aggregate number of shares that the Company can issue or sell to Lincoln Park under the Purchase Agreement may in no case exceed 262 shares of the common stock (which is equal to approximately 19.99 % of the shares of the common stock outstanding immediately prior to the execution of the Purchase Agreement) (the “Exchange Cap”), unless (i) stockholder approval is obtained to issue Purchase Shares above the Exchange Cap, in which case the Exchange Cap will no longer apply, or (ii) the average price of all applicable sales of our common stock to Lincoln Park under the Purchase Agreement equals or exceeds $ 10.12 per share (which represents the lower of (A) the official closing price of the Company’s common stock on Nasdaq on the trading day immediately preceding the date of the Purchase Agreement and (B) the average official closing price of the Company’s common stock on Nasdaq for the five consecutive trading days ending on the trading day on the date of the Purchase Agreement, adjusted such that the transactions contemplated by the Purchase Agreement are exempt from the Exchange Cap limitation under applicable Nasdaq rules). The Purchase Agreement may be terminated by the Company at any time, at its sole discretion, without any cost or penalty, by giving one business day notice to Lincoln Park to terminate the Purchase Agreement. During the year ended June 30, 2023, the Company sold 229 shares of common stock for total net proceeds of approximately $ 1,903 under the Purchase Agreement. As of June 30, 2023, the sales made under the Purchase Agreement are the maximum amounts available due to ownership limitations under Nasdaq rules. Shares issued for services During the year ended June 30, 2023, the Company issued 16 shares of common stock for services for a total value of $ 110 . Year ended June 30, 2022 Registered direct financing - September 28, 2021 On September 28, 2021, the Company closed on the sale of (i) 144 shares of its common stock, par value $ 0.001 per share, (ii) pre-funded warrants (“PFW”) to purchase an aggregate of 96 shares of common stock and (iii) common warrants to purchase an aggregate of 240 shares of common stock (“2022 Investor Warrants”) in the Company’s registered direct offering (the “September Offering”). Each share of common stock, or PFW as applicable, was sold together with a 2022 Investor Warrant to purchase one share of common stock at a combined effective price of $ 62.50 per share of common stock and accompanying 2022 Investor Warrant. The 2022 Investor Warrants have been valued at $ 7,023 and have been treated as equity. They have been valued using a Black-Scholes valuation with a risk-free rate of 0.55 %, a contractual term of 3.5 years, a volatility of 116.7 %, and a dividend rate of 0 %. The estimated volatility of the Company’s common stock is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the contractual life of the instrument at the valuation date. The term is based on the contractual term of the warrant. The net proceeds from the September Offering were $ 13,634 after deducting commissions and other offering expenses. The 2022 Investor Warrants are exercisable at $ 62.50 per share until their expiry on March 28, 2025 , and the PFW are exercisable at $ 0.05 per share at any time after September 28, 2021. The Company also issued 12 agent warrants that are exercisable at $ 78.13 per share commencing September 28, 2021 , until their expiry on March 28, 2025 (the “2022 Agent Warrants”). The 2022 Agent Warrants have been valued at $ 333 and have been treated as non-cash issue costs of the common stock, 2022 Investor Warrants, and PFW. The 2022 Agent Warrants have been valued using a Black-Scholes valuation with a risk-free rate of 0.55 %, a contractual term of 3.5 years, a volatility of 116.7 %, and a dividend rate of 0 %. The estimated volatility of the Company’s common stock is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the contractual life of the instrument at the valuation date. The term is based on the contractual term of the warrant. As of June 30, 2022, all of the 96 PFW have been exercised at $ 0.05 per PFW for proceeds of $ 4.8 . Registered direct financing - April 14, 2022 On April 14, 2022, the Company closed on the sale of 324 shares of its common stock, par value $ 0.001 per share, and common warrants to purchase an aggregate of 324 shares of common stock (“2022 April Investor Warrants”) in the Company’s registered direct offering (the “April Offering”). Each share of common stock was sold together with a 2022 April Investor Warrant to purchase one share of common stock at a combined effective price of $ 26.50 per share of common stock and accompanying 2022 April Investor Warrant. The 2022 April Investor Warrants have been valued at $ 3,898 and have been treated as equity. They have been valued using a Black-Scholes valuation with a risk-free rate of 0.54 %, a contractual term of 5 years, a volatility of 109.4 %, and a dividend rate of 0 %. The estimated volatility of the Company’s common stock is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the contractual life of the instrument at the valuation date. The term is based on the contractual term of the warrant. The net proceeds from the April Offering were approximately $ 7,900 after deducting commissions and other offering expenses. The 2022 April Investor Warrants are exercisable at $ 20.50 per share until their expiry on April 14, 2027 . The Company also issued 32 agent warrants that are exercisable at $ 33.13 per share commencing October 14, 2022 , until their expiry on October 14, 2026 (the "2022 April Agent Warrants"). The 2022 April Agent Warrants have been valued at $ 350 and have been treated as non-cash issue costs of the common stock and the 2022 April Investor Warrants. The 2022 April Agent Warrants have been valued using a Black-Scholes valuation with a risk-free rate of 0.54 %, a contractual term of 4.5 years, a volatility of 112.3 %, and a dividend rate of 0 %. The estimated volatility of the Company’s common stock is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the contractual life of the instrument at the valuation date. The term is based on the contractual term of the warrant. 2017 Omnibus Incentive Plan As subsequently approved by the Company’s stockholders at an annual meeting of stockholders, on April 11, 2018, the Company’s board of directors approved the adoption of the Company’s 2017 Omnibus Equity Incentive Plan (the “2017 Plan”), as amended. The board of directors also approved a form of Performance Stock Unit Award Agreement to be used in connection with grants of performance stock units (“PSUs”) as well as a Restricted Stock Unit ("RSU") award under the 2017 Plan. As approved by the Company’s stockholders on June 21, 2022, the number of common shares available under the 2017 Plan as of June 30, 2023, is 440 shares, less the number of shares of common stock issued under the Del Mar (BC) 2013 Amended and Restated Stock Option Plan (the “Legacy Plan”), or that are subject to grants of stock options made, or that may be made, under the Legacy Plan, or that have been previously exercised. The following table sets forth the aggregate information on all equity compensation plans as of June 30, 2023: Plan Category (in thousands, except per share amounts) Number of shares of common stock to be issued upon exercise of outstanding stock options and rights Weighted-average exercise price of stock options and rights Number of shares of common stock remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders - 2017 Plan (1) 275 $ 34.72 160 Equity compensation plans not approved by security holders - Del Mar (BC) 2013 Amended and Restated Stock Option Plan 1 $ 2,160.10 — Totals 276 $ 51.71 160 (1) The Del Mar (BC) 2013 Amended and Restated Stock Option Plan refers to the Company’s previous equity compensation plan. (2) The balance of 161 shares of common stock available for issuance under the 2017 Plan as of June 30, 2023, is net of stock options previously exercised. The maximum number of shares of Company common stock with respect to which any one participant may be granted awards during any calendar year is 8 % of the Company’s fully diluted shares of common stock on the date of grant (excluding the number of shares of common stock issued under the 2017 Plan and/or the Legacy Plan or subject to outstanding awards granted under the 2017 Plan and/or the Legacy Plan). No award will be granted under the 2017 Plan on, or after, July 7, 2027. Stock options During the year ended June 30, 2023, a total of 70 stock options to purchase shares of common stock were granted to directors and officers of the Company. Of the total stock options granted, six have an exercise price of $ 12.75 per share and vest in 12 equal monthly installments beginning on August 1, 2022, while 64 stock options granted have an exercise price of $ 8.785 per share and vest as to 25% on August 1, 2023, with the remaining portion vesting in equal monthly installments over a period of 36 months commencing on September 1, 2023. All of the options to purchase shares of common stock granted have a 10 -year term and are subject to cancellation upon the grantees’ termination of service for the Company, with certain exceptions. The following table sets forth changes in stock options outstanding under all plans: Number of Weighted Balance – June 30, 2021 128 112.84 Granted 79 49.46 Expired ( 6 ) 151.19 Forfeited ( 25 ) 83.76 Balance – June 30, 2022 176 87.05 Granted 78 8.79 Expired ( 56 ) 102.65 Balance – June 30, 2023 198 51.71 The following table summarizes stock options outstanding and exercisable under all plans at June 30, 2023: Exercise price Number Weighted Number 6.04 9 9.64 — 8.79 64 9.10 — 12.75 to 16.25 6 9.30 6 30.50 to 48.00 83 8.01 40 62.00 to 68.50 14 7.89 13 85 21 7.22 20 1,055.00 to 2,660.00 1 2.48 1 198 80 Stock options issued during the years ended June 30, 2023, and 2022, have been valued using a Black-Scholes pricing model with the following assumptions: June 30, June 30, Dividend rate — % — % Volatility 91.4 % 91.7 % Risk-free rate 2.67 % 1.18 % Term – years 6.1 6.0 The estimated volatility of the Company’s common stock at the date of issuance of the stock options is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the stock options at the valuation date. The expected life of the stock options has been estimated using the plain vanilla method. The Company has recognized the following amounts as stock option expense for the periods noted: Years ended June 30, 2023 2022 Research and development 451 601 General and administrative 1,039 1,647 1,490 2,248 All of the stock option expense for the periods ended June 30, 2023, and 2022, has been recognized as additional paid in capital. The aggregate intrinsic value of stock options outstanding at June 30, 2023, was nil (2022 - nil ) and the aggregate intrinsic value of stock options exercisable at June 30, 2023, was nil (2022 - nil ). As of June 30, 2023, there was $ 812 in unrecognized compensation expense that will be recognized over the next 2.55 years. The following table sets forth changes in unvested stock options under all plans: Number of Weighted Unvested at June 30, 2021 77 80.18 Granted 79 49.46 Vested ( 48 ) 78.23 Forfeited ( 24 ) 83.76 Unvested at June 30, 2022 84 51.23 Granted 78 8.79 Vested ( 44 ) 48.53 Unvested at June 30, 2023 118 24.12 The aggregate intrinsic value of unvested stock options at June 30, 2023 was nil (2022 - nil ). The unvested stock options have a remaining weighted average contractual term of 8.83 (2022 – 9.19 ) years. Restricted stock units On August 1, 2022, the Company issued 18 RSUs to its officers. Subject to providing continuous service to the Company, the RSUs vest in four equal annual installments commencing August 1, 2023 . The RSUs were valued using the closing price of the Company’s common stock on the date of issuance with the total expense of $ 155 being recognized over the vesting period of four years . On June 1, 2023, the Company issued 60 RSU to one of its officers. Subject to providing continuous service to the Company, the RSUs all fully vest on June 1, 2024. The RSUs were valued using the closing price of the Company’s common stock on the date of issuance with the total expense of $ 186 being recognized over the vesting period of one year . As of June 30, 2023, none of the RSUs had vested. During the year ended June 30, 2023, the Company recognized a total of $ 90 (2022 - nil ) related to RSU. Number of Number of Balance – June 30, 2021 and 2022 — — Issuance of RSU 78 — Balance – June 30, 2023 78 — Common stock warrants The following table sets forth changes in outstanding warrants: Number of Weighted average exercise price Balance – June 30, 2021 139 167.21 Issuance of 2022 Investor Warrants 240 62.50 Issuance of PFW 96 0.05 Issuance of 2022 Agent Warrants 12 78.13 Issuance of 2022 April Investor Warrants 324 20.50 Issuance of 2022 April Agent Warrants 32 33.13 Exercise of PFW ( 96 ) 0.05 Exercise of 2020 Investor Warrants ( 1 ) 50.00 Expiry of warrants (i) ( 26 ) 427.51 Balance – June 30, 2022 720 49.36 Expiry of 2018 Investor and Agent warrants ( 7 ) 625.68 Balance – June 30, 2023 713 43.55 i) Expired warrants include: 21 Adgero replacement warrants with an exercise price of $ 159.00 , four 2017 Investor Warrants with an exercise price of $ 1,750.00 , and one 2017 Agent Warrant with an exercise price of $ 2,030.00 . The following table summarizes the Company’s outstanding warrants as of June 30, 2023: Description of warrants Number Exercise Expiry date 2022 April Investor warrants 325 20.50 April 14, 2027 2022 Investor warrants 240 62.50 March 28, 2025 2020 Investor warrants 65 50.00 August 16, 2024 2019 Investor warrants 15 155.00 June 5, 2024 NBTS Warrants 3 54.50 June 19, 2025 Warrants issued for services 20 32.00 to 450.00 September 22, 2023 to February 25, 2024 2022 April Agent warrants 32 33.12 October 14, 2026 2022 Agent warrants 12 78.12 March 28, 2025 2019 Agent warrants 1 193.75 June 3, 2024 713 Series C preferred stock warrants In connection with the Series C Preferred Stock private placement, the Company issued 2,504 Series C Agent Warrants. The Series C Agent Warrants have an exercise price of $ 1,000 per share, provide for a cashless exercise feature, and are exercisable for a period of four years from August 19, 2020. The Series C Preferred Stock issuable upon exercise of the Series C Agent Warrants is convertible into shares of common stock in the same manner as each respective underlying series of outstanding Series C Preferred Stock and will be entitled to the same dividend rights as each respective series. The following table sets forth changes in outstanding Series C Agent Warrants: Balance, Number of Number of Balance, Exercise Issuance of Preferred Series C-1 Agent Warrants 1,929 — — 1,929 58.00 Issuance of Preferred Series C-2 Agent Warrants 219 — — 219 60.70 Issuance of Preferred Series C-3 Agent Warrants 296 — — 296 57.50 2,444 — — 2,444 The following table summarizes the Company’s outstanding Series C Agent Warrants as of June 30, 2022: Series C Agent Warrants Number Conversion Number of Cumulative Series 1 1,929 58.00 33 23 Series 2 219 60.70 4 3 Series 3 296 57.50 5 4 2,444 42 30 |