Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 31, 2021 | Feb. 07, 2022 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39683 | |
Entity Registrant Name | Rezolute, Inc. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 27-3440894 | |
Entity Address, Address Line One | 201 Redwood Shores Parkway | |
Entity Address, Address Line Two | Suite 315 | |
Entity Address, City or Town | Redwood City | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94065 | |
City Area Code | 650 | |
Local Phone Number | 206-4507 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | RZLT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,556,516 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001509261 | |
Amendment Flag | false |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 77,403 | $ 41,047 |
Prepaid expenses and other | 695 | 946 |
Total current assets | 78,098 | 41,993 |
Restricted cash | 5,000 | 0 |
Right-of-use assets, net | 237 | 396 |
Deferred offering costs and other | 48 | 191 |
Property and equipment, net | 22 | 29 |
Total assets | 83,405 | 42,609 |
Current liabilities: | ||
Accounts payable | 4,349 | 1,035 |
Accrued liabilities: | ||
Compensation and benefits | 1,472 | 77 |
Insurance premiums | 242 | |
Other | 477 | 349 |
Current portion of operating lease liabilities | 147 | 265 |
Total current liabilities | 6,445 | 1,968 |
Long term debt, net of discount | 14,178 | 13,968 |
Embedded derivative liability | 383 | 387 |
Operating lease liabilities, net of current portion | 134 | 187 |
Total liabilities | 21,140 | 16,510 |
Commitments and contingencies (Notes 4 and 8) | ||
Shareholders' equity: | ||
Preferred Stock, $0.001 par value; 400 shares shares authorized; no shares issued and outstanding | ||
Common Stock, $0.001 par value, 40,000 shares authorized ; 15,556 and 8,352 shares issued and outstanding as of December 31, 2021 and June 30, 2021, respectively | 16 | 8 |
Additional paid-in capital | 250,816 | 194,229 |
Accumulated deficit | (188,567) | (168,138) |
Total shareholders' equity | 62,265 | 26,099 |
Total liabilities and shareholders' equity | $ 83,405 | $ 42,609 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Unaudited Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 400 | 400 |
Preferred stock, shares, issued | 0 | 0 |
Preferred stock, shares, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares issued | 15,556 | 8,352 |
Common stock, shares outstanding | 15,556 | 8,352 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | ||||
Research and development | $ 9,452 | $ 4,496 | $ 15,226 | $ 6,840 |
General and administrative | 2,697 | 2,656 | 4,563 | 3,935 |
Total operating expenses | 12,149 | 7,152 | 19,789 | 10,775 |
Operating loss | (12,149) | (7,152) | (19,789) | (10,775) |
Non-operating income (expense): | ||||
Interest expense | (445) | (888) | ||
Gain (loss) on change in fair value of embedded derivative liability | (12) | 4 | ||
Employee retention credit | 231 | |||
Other income | 13 | 55 | 13 | 58 |
Total non-operating income (expense), net | (444) | 55 | (640) | 58 |
Net loss | $ (12,593) | $ (7,097) | $ (20,429) | $ (10,717) |
Net loss per common share - basic (in dollars per share) | $ (0.80) | $ (0.88) | $ (1.69) | $ (1.54) |
Net loss per common share - diluted (in dollars per share) | $ (0.80) | $ (0.88) | $ (1.69) | $ (1.54) |
Weighted average number of common shares outstanding - basic (in shares) | 15,680 | 8,045 | 12,097 | 6,956 |
Weighted average number of common shares outstanding - diluted (in shares) | 15,680 | 8,045 | 12,097 | 6,956 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Jun. 30, 2020 | $ 6 | $ 154,595 | $ (147,236) | $ 7,365 |
Balance (in shares) at Jun. 30, 2020 | 5,867 | |||
Share-based compensation | 1,775 | 1,775 | ||
Issuance of Units for cash | $ 2 | 40,998 | 41,000 | |
Issuance of Units for cash (in shares) | 2,485 | |||
Advisory fees and other offering costs | (3,550) | (3,550) | ||
Issuance of common stock for services | 7 | 7 | ||
Fair value of warrants issued to consultants for services | 6 | 6 | ||
Net loss | (10,717) | (10,717) | ||
Balance at Dec. 31, 2020 | $ 8 | 193,831 | (157,953) | 35,886 |
Balance (in shares) at Dec. 31, 2020 | 8,352 | |||
Balance at Jun. 30, 2020 | $ 6 | 154,595 | (147,236) | 7,365 |
Balance (in shares) at Jun. 30, 2020 | 5,867 | |||
Net loss | 20,900 | |||
Balance at Jun. 30, 2021 | $ 8 | 194,229 | (168,138) | 26,099 |
Balance (in shares) at Jun. 30, 2021 | 8,352 | |||
Balance at Sep. 30, 2020 | $ 6 | 155,232 | (150,856) | 4,382 |
Balance (in shares) at Sep. 30, 2020 | 5,867 | |||
Share-based compensation | 1,141 | 1,141 | ||
Issuance of Units for cash | $ 2 | 40,998 | 41,000 | |
Issuance of Units for cash (in shares) | 2,485 | |||
Advisory fees and other offering costs | (3,550) | (3,550) | ||
Issuance of common stock for services | 7 | 7 | ||
Fair value of warrants issued to consultants for services | 3 | 3 | ||
Net loss | (7,097) | (7,097) | ||
Balance at Dec. 31, 2020 | $ 8 | 193,831 | (157,953) | 35,886 |
Balance (in shares) at Dec. 31, 2020 | 8,352 | |||
Balance at Jun. 30, 2021 | $ 8 | 194,229 | (168,138) | 26,099 |
Balance (in shares) at Jun. 30, 2021 | 8,352 | |||
Common stock | $ 6 | 39,950 | 39,956 | |
Common stock (in shares) | 6,147 | |||
Pre-Funded Warrants | 10,783 | 10,783 | ||
Gross proceeds from issuance of common stock for cash in Registered Direct Offering | $ 1 | 4,999 | 5,000 | |
Gross proceeds from issuance of common stock for cash In Registered Direct Offering (In shares) | 769 | |||
Gross proceeds from issuance of common stock for cash Under Equity Distribution Agreement | $ 1 | 1,518 | 1,519 | |
Gross proceeds from issuance of common stock for cash Under Equity Distribution Agreement (in shares) | 138 | |||
Gross Proceeds from Issuance of Common Stock for Cash In Under LPC Purchase Agreement | 1,172 | 1,172 | ||
Gross proceeds from issuance of common stock for cash In Under LPC Purchase Agreement (In shares) | 116 | |||
Underwriting discounts and other equity offering costs | (4,136) | (4,136) | ||
Share-based compensation | 1,851 | 1,851 | ||
Commitment shares issued under LPC Purchase Agreement | $ 34 | 450 | 450 | |
Net loss | (20,429) | (20,429) | ||
Balance at Dec. 31, 2021 | $ 16 | 250,816 | (188,567) | 62,265 |
Balance (in shares) at Dec. 31, 2021 | 15,556 | |||
Balance at Sep. 30, 2021 | $ 9 | 197,524 | (175,974) | 21,559 |
Balance (in shares) at Sep. 30, 2021 | 8,640 | |||
Common stock | $ 6 | 39,950 | 39,956 | |
Common stock (in shares) | 6,147 | |||
Pre-Funded Warrants | 10,783 | 10,783 | ||
Gross proceeds from issuance of common stock for cash in Registered Direct Offering | $ 1 | 4,999 | 5,000 | |
Gross proceeds from issuance of common stock for cash In Registered Direct Offering (In shares) | 769 | |||
Underwriting discounts and other equity offering costs | (3,449) | (3,449) | ||
Share-based compensation | 1,009 | 1,009 | ||
Net loss | (12,593) | (12,593) | ||
Balance at Dec. 31, 2021 | $ 16 | $ 250,816 | $ (188,567) | $ 62,265 |
Balance (in shares) at Dec. 31, 2021 | 15,556 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (20,429) | $ (10,717) |
Share-based compensation expense | 1,851 | 1,775 |
Accretion of debt discount and issuance costs | 211 | |
Non-cash lease expense | 159 | 139 |
Depreciation and amortization expense | 7 | 6 |
Change in fair value of embedded derivative liability | (4) | |
Fair value of shares of common stock issued for services | 7 | |
Fair value of warrants issued for services | (6) | |
Changes in operating assets and liabilities: | ||
Decrease (increase) in prepaid expenses and other assets | 238 | (2) |
Increase (decrease) in accounts payable | 3,320 | (412) |
Increase in other accrued liabilities | 1,109 | 1,193 |
Decrease in license fees payable to Xoma | (1,809) | |
Net Cash Used In Operating Activities | (13,538) | (9,814) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Underwritten Public Offering | 50,738 | |
Proceeds from Registered Direct Offering | 5,000 | |
Proceeds from issuances of common stock | 2,690 | |
Proceeds from issuance of Units | 41,000 | |
Payments for professional fees and other offering costs | (3,430) | (3,541) |
Payments for debt discount and issuance costs | (104) | |
Net Cash Provided by Financing Activities | 54,894 | 37,459 |
Net increase in cash, cash equivalents and restricted cash | 41,356 | 27,645 |
Cash, cash equivalents and restricted cash at beginning of period | 41,047 | 9,955 |
Cash, cash equivalents and restricted cash at end of period | 82,403 | 37,600 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||
Cash and cash equivalents, end of period | 77,403 | |
Restricted cash, end of period | 5,000 | |
Total cash, cash equivalents and restricted cash, end of period | 82,403 | 37,600 |
SUPPLEMENTARY CASH FLOW INFORMATION: | ||
Cash paid for interest | 680 | |
Right-of-use assets acquired in exchange for operating lease liabilities | 302 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 184 | 140 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of commitment shares for deferred offering costs subsequently charged to additional paid-in capital | $ 450 | |
Increase in payables for deferred offering costs | 32 | |
Furniture and equipment received as inducement under operating lease | $ 10 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2021 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Rezolute, Inc. (the “Company”) is a clinical stage biopharmaceutical company developing transformative therapies for metabolic diseases related to chronic glucose imbalance. Change in Domicile In June 2021, the Company merged with and into its wholly owned subsidiary, Rezolute Nevada Merger Corporation, a Nevada corporation (“Merger Sub”), pursuant to an Agreement and Plan of Merger, dated as of June 18, 2021 (the “Reincorporation Merger Agreement”), between the Company and Merger Sub, with Merger Sub as the surviving corporation (the “Reincorporation Merger”). At the effective time of the Reincorporation Merger (the “Effective Time”), the Merger Sub was renamed “Rezolute, Inc.” and succeeded to the assets, continued its business and assumed its rights and obligations by operation of law. The Reincorporation Merger Agreement was approved by the Company’s shareholders at the 2021 annual meeting of its shareholders held on May 26, 2021. Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the SEC for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The condensed consolidated balance sheet as of June 30, 2021, has been derived from the Company’s audited consolidated financial statements. The unaudited interim financial statements should be read in conjunction with the Company’s 2021 Form 10-K, which contains the Company’s audited financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended June 30, 2021. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnote disclosures necessary for a comprehensive presentation of financial position, results of operations, and cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) that are necessary for a fair financial statement presentation have been made. The interim results for the three and six months ended December 31, 2021 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the fiscal year ending June 30, 2022. Consolidation The Company has two wholly owned subsidiaries consisting of Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, the fair value of derivative liabilities, fair value of share-based payments, management’s assessment of going concern, and clinical trial accrued liabilities. Actual results could differ from those estimates. Risks and Uncertainties The Company’s operations may be subject to significant risks and uncertainties including financial, operational, regulatory and other risks associated with a clinical stage company, including the potential risk of business failure as discussed further in Note 2, and the future impact of COVID-19 as discussed in Note 8. Significant Accounting Policies The Company’s significant accounting policies are described in Item 8 of the 2021 Form 10-K. Recent Accounting Pronouncements Standard Required to be Adopted in Future Periods. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. |
LIQUIDITY
LIQUIDITY | 6 Months Ended |
Dec. 31, 2021 | |
LIQUIDITY | |
LIQUIDITY | NOTE 2 — LIQUIDITY The Company is in the clinical stage and has not yet generated any revenues. For the six months ended December 31, 2021, the Company incurred a net loss of $20.4 million and net cash used in operating activities amounted to $13.5 million. For the fiscal year ended June 30, 2021, the Company incurred a net loss of $20.9 million and net cash used in operating activities amounted to $20.4 million. As of December 31, 2021, the Company had an accumulated deficit of $188.6 million, unrestricted cash and cash equivalents of $77.4 million, and total current liabilities of $6.4 million. As discussed in Note 4, the Company is subject to license agreements that provide for future contractual payments upon achievement of various milestone events. Pursuant to the Xoma Agreement, the next milestone includes a $2.0 million payment upon dosing of the last patient in the Company’s ongoing Phase 2b clinical trial for RZ358. Dosing of the last patient in the ongoing Phase 2b study occurred in January 2022. Additionally, pursuant to the ActiveSite Agreement, the next milestone will consist of a $3.0 million payment upon dosing of the first patient in a Phase 2 clinical trial for RZ402. As discussed in Note 6, in October and November 2021 the Company completed an underwritten public offering for net proceeds of $47.3 million and a registered direct offering for net proceeds of $5.0 million, resulting in total net proceeds of approximately $52.3 million. In addition, for the six months ended December 31, 2021, the Company received net proceeds of approximately $2.7 million from equity issuances under the Equity Distribution Agreement and the LPC Purchase Agreement discussed in Note 6. If additional capital resources are required in the future, the Company has the ability to raise additional equity financing proceeds as discussed in Note 6 under the captions Equity Distribution Agreement LPC Purchase Agreement Management believes the Company’s unrestricted cash and cash equivalents balance of $77.4 million will be adequate to carry out currently planned activities at least through February 2023. |
OPERATING LEASES
OPERATING LEASES | 6 Months Ended |
Dec. 31, 2021 | |
OPERATING LEASES | |
OPERATING LEASES | NOTE 3 — OPERATING LEASES The carrying value of right-of-use (“ROU”) assets and operating lease liabilities are as follows (in thousands): December 31, June 30, 2021 2021 Right-of-Use Assets, net $ 237 $ 396 Operating Lease Liabilities: Current $ 147 $ 265 Long-term 134 187 Total $ 281 $ 452 For the three and six months ended December 31, 2021 and 2020, operating lease expense was as follows (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Research and development $ 71 $ 61 $ 150 $ 110 General and administrative 20 30 43 54 Total $ 91 $ 91 $ 193 $ 164 As of December 31, 2021, the weighted average remaining lease term under operating leases was 1.9 years, and the weighted average discount rate for operating lease liabilities was 6.6%. Future payments under all operating lease agreements as of December 31, 2021 are as follows (in thousands): Fiscal year ending June 30, Remainder of fiscal year 2022 $ 100 2023 117 2024 79 Total lease payments 296 Less imputed interest (15) Present value of operating lease liabilities $ 281 |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 6 Months Ended |
Dec. 31, 2021 | |
LICENSE AGREEMENTS | |
LICENSE AGREEMENTS | NOTE 4 — LICENSE AGREEMENTS Xoma License Agreement In December 2017, the Company entered into a license agreement (“License Agreement”) with XOMA Corporation (“Xoma”), through its wholly-owned subsidiary, XOMA (US) LLC, pursuant to which Xoma granted an exclusive global license to the Company to develop and commercialize Xoma 358 (formerly X358, now RZ358) for all indications. In January 2019, the License Agreement was amended with an updated payment schedule, as well as revising the amount the Company was required to expend on development of RZ358 and related licensed products, and revised provisions with respect to the Company’s diligence efforts in conducting clinical studies. Upon the achievement of certain clinical and regulatory events under the License Agreement, the Company will be required to make up to $37.0 million in aggregate milestone payments to Xoma, including the next scheduled payment of $2.0 million due upon the dosing of the last patient in the Company’s ongoing Phase 2b clinical trial for RZ358. The dosing of the last patient in the Company’s ongoing Phase 2b study occurred in January 2022. ActiveSite License Agreement On August 4, 2017, the Company entered into a Development and License Agreement with ActiveSite Pharmaceuticals, Inc. (“ActiveSite”) pursuant to which the Company acquired the rights to ActiveSite’s Plasma Kallikrein Inhibitor program (“PKI Portfolio”). The Company is initially using the PKI Portfolio to develop an oral PKI therapeutic for diabetic macular edema (RZ402) and may use the PKI Portfolio to develop other therapeutics for different indications. The ActiveSite Development and License Agreement requires various milestone payments up to $46.5 million. The first milestone payment for $1.0 million was paid in December 2020 after clearance was received for an Initial Drug Application, or IND, filed with the U.S. Food and Drug Administration (“FDA”). The next milestone payment of $3.0 million will be due upon dosing of the first patient in a Phase 2 clinical trial for RZ402. |
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT | 6 Months Ended |
Dec. 31, 2021 | |
LOAN AND SECURITY AGREEMENT | |
LOAN AND SECURITY AGREEMENT | NOTE 5 — LOAN AND SECURITY AGREEMENT On April 14, 2021, the Company entered into a $30.0 million Loan and Security Agreement (the “Loan Agreement”) with SLR Investment Corp. and certain other lenders (the “Lenders”). The Lenders agreed to loan up to $30.0 million in three tranches consisting of (i) a $15.0 million term A loan that was funded on April 14, 2021, (ii) a $7.5 million term B loan to be funded upon request by the Company no later than January 25, 2022, and (iii) a $7.5 million term C loan to be funded upon request by the Company no later than September 25, 2022. Funding of the term B and term C loans was subject to the Company’s ability to obtain prescribed amounts of equity or subordinated debt financing and the achievement of certain clinical milestones related to RZ358 and RZ402. The Company did not achieve the initial clinical milestones to qualify for funding of the term B and term C loans. The term A loan has a maturity date of April 1, 2026 (the “Maturity Date”). In addition, the Company’s cash and cash equivalents became subject to a blocked account control agreement (“BACA”) in favor of the Lenders whereby a cash balance of at least $5.0 million was required beginning on December 31, 2021. Accordingly, the Company has classified $5.0 million as a long-term restricted cash asset in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2021. In the event of a default under the Loan Agreement, the BACA would enable the Lenders to prevent the release of funds from the Company’s cash accounts. Outstanding borrowings under the Loan Agreement bear interest at a floating rate equal to (a) 8.75% per annum plus (b) the greater of (i) the rate per annum published by the Intercontinental Exchange Benchmark Administration Ltd. (“IEBA”) for a term of one month and (ii) 0.12% per annum. For the period from April 14, 2021 through December 31, 2021, the IEBA rate for a term of one month was approximately 0.12% per annum. Therefore, the contractual rate was 8.87% as of December 31, 2021 and June 30, 2021. The Company is permitted to make interest-only payments on the term A loan through May 1, 2023. At the Company’s request, the interest-only period can be extended until May 1, 2024, if the Company obtains at least $70.0 million of equity or subordinated debt financing by September 2022 and no event of default shall have occurred. The Company will be required to make monthly payments of principal and interest commencing at the end of the interest-only period. The Company is obligated to pay the Lenders (i) a non-refundable facility fee in the amount of 1.00% of the term A loan that was funded (the “Facility Fee”), and (ii) a final fee equal to 4.75% of the aggregate amount of the term A loan that was funded (the “Final Fee”). As of December 31, 2021, the Company incurred debt discounts for an aggregate of $1.7 million that consisted of $0.4 million for financial advisory and legal fees, an aggregate of $0.9 million for the Facility Fee and the Final Fee, and an aggregate of $0.4 million as an exit fee as discussed below. The Final Fee is payable upon the earliest to occur of (i) the Maturity Date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans. The total debt discount of $1.7 million related to the term A loan is being accreted to interest expense using the effective interest method that results in an overall current effective interest rate of 12.6% as of December 31, 2021 and June 30, 2021. Concurrently with the execution of the Loan Agreement, the Company entered into an exit fee agreement (the “Exit Fee Agreement”) that provides for a fee of 4.00% of the funded principal balance of each term loan in the event certain transactions (defined as “Exit Events”) occur prior to April 13, 2031. Exit Events include, but are not limited to, sales of substantially all assets, certain mergers, change of control transactions, and issuances of common stock that result in new investors owning more than 35% of the Company’s shares. As of April 14, 2021, the Company allocated a portion of the proceeds from the term A loan to recognize a liability for the fair value of this embedded derivative for approximately $354,000. Fair value was determined based on the Company’s strategic corporate development plans and management has performed a detailed evaluation of the different types of Exit Events that could occur and using a discounted rate equivalent to the effective rate for the term A loan. Fair value of this embedded derivative is assessed at the end of each reporting period with changes in fair value recognized as a nonoperating gain or loss. The Company has the option to prepay all, but not less than all, of the outstanding principal balance of the term loans. In the event of a voluntary or mandatory prepayment prior to the Maturity Date, the Company will incur a prepayment fee ranging from 1.00% to 3.00% of the outstanding principal balance. The Company’s obligations under the Loan Agreement are secured by a first-priority security interest in substantially all the Company’s assets, including its intellectual property. This security interest will not be released until all obligations are repaid, including the requirement to pay an Exit Fee of $0.6 million for certain fundamental transactions that may occur through April 13, 2031. The Loan Agreement contains customary representations, warranties and covenants and also includes customary events of default, including payment defaults, breaches of covenants, and a default upon the occurrence of a material adverse change affecting the Company. Upon the occurrence of an event of default, a default interest rate of an additional 5.00% per annum may be applied to the outstanding loan balance, and the Lenders may declare all outstanding obligations immediately due and payable and exercise all of their rights and remedies as set forth in the Loan Agreement. As of December 31, 2021, the Company had outstanding contractual obligations under the Loan Agreement consisting of the principal balance of $15.0 million and the Final Fee of $0.7 million for a total of $15.7 million. After deducting the unaccreted discount of $1.5 million, the net carrying value was $14.2 million as of December 31, 2021. Future minimum principal payments and the net carrying value of the term A loan are as follows as of December 31, 2021 (in thousands): Fiscal year ending June 30, Remainder of fiscal year 2022 $ — 2023 833 2024 5,000 2025 5,000 2026 4,880 Total contractual payments 15,713 Less unaccreted debt discount (1,535) Net carrying value $ 14,178 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Dec. 31, 2021 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 6 — SHAREHOLDERS’ EQUITY Changes in Shareholders’ Equity for the Three Months Ended December 31, 2021 and 2020 The following table presents changes in shareholders’ equity for the three months ended December 31, 2021 and 2020: Additional Total Common Stock Paid-in Accumulated Shareholders’ Shares Amount Capital Deficit Equity Three Months Ended December 31, 2021: Balances as of September 30, 2021 8,640 $ 9 $ 197,524 $ (175,974) $ 21,559 Gross proceeds from issuance of equity securities for cash in Underwritten Offering: Common stock 6,147 6 39,950 — 39,956 Pre-Funded Warrants — — 10,783 — 10,783 Gross proceeds from issuance of common stock for cash in Registered Direct Offering 769 1 4,999 — 5,000 Underwriting discounts and other equity offering costs — — (3,449) — (3,449) Share-based compensation — — 1,009 — 1,009 Net loss — — — (12,593) (12,593) Balances as of December 31, 2021 15,556 $ 16 $ 250,816 $ (188,567) $ 62,265 Three Months Ended December 31, 2020: Balances as of September 30, 2020 5,867 $ 6 $ 155,232 $ (150,856) $ 4,382 Issuance of Units for cash 2,485 2 40,998 — 41,000 Advisory fees and other offering costs — — (3,550) — (3,550) Share-based compensation — — 1,141 — 1,141 Issuance of common stock for services — — 7 — 7 Fair value of warrants issued to consultants for services — — 3 — 3 Net loss — — — (7,097) (7,097) Balances as of December 31, 2020 8,352 $ 8 $ 193,831 $ (157,953) $ 35,886 For changes in shareholders’ equity for the six months ended December 31, 2021 and 2020, please refer to the unaudited condensed consolidated statements of shareholders’ equity. Underwritten Public Offering On October 12, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Oppenheimer & Co., Inc., as representative of the underwriters listed therein (the “Underwriters”) for the planned issuance and sale of equity securities in an underwritten public offering (the “Underwritten Offering”). On October 15, 2021, closing occurred for the Underwritten Offering resulting in the issuance of (i) 6,030,847 shares of common stock at $6.50 per share for gross proceeds of $39.2 million, and (ii) 1,661,461 pre-funded warrants to purchase 1,661,461 shares of common stock at an issuance price of $6.49 per warrant (the “Pre-Funded Warrants”) for gross proceeds of $10.8 million. The aggregate gross proceeds from the Underwritten Offering amounted to $50.0 million, excluding the Underwriters’ Option discussed below, and before deductions for underwriting discounts and commissions of 6.0% of the gross proceeds and other offering costs of approximately $0.3 million. After deducting total offering costs of $3.3 million, the net proceeds of the Underwritten Offering amounted to approximately $46.7 million. The Company granted the Underwriters a 30 In connection with the Underwritten Offering, certain of the Company’s officers and directors agreed not to sell or otherwise dispose of any common stock held by them through January 10, 2022 (the “Lock-Up Period”). In addition, during the Lock-Up Period the Company agreed to refrain from selling any shares of its common stock under the LPC Purchase Agreement or the EDA discussed below. Pre-Funded Warrants The Pre-Funded Warrants have an exercise price of $0.01 per share, which is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. Each Pre-Funded Warrant is exercisable at any time and from time to time after issuance with no stated expiration date. In the event of certain corporate transactions, the holders of the Pre-Funded Warrants will be entitled to receive, upon exercise of the Pre-Funded Warrants, the kind and amount of securities, cash or other property that the holders would have received had they exercised the Pre-Funded Warrants immediately prior to such transaction. The Pre-Funded Warrants do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of Common Stock are entitled. The gross proceeds of $10.8 million received from issuance of the Pre-Funded Warrants was recorded as a component of shareholders’ equity within additional paid-in capital. In accordance with the terms of the warrant agreement, holders of the outstanding warrants are not entitled to exercise any portion of the Pre-Funded Warrant if, upon exercise of such portion of the warrant, the holder’s aggregate ownership of the Company’s common stock or the combined voting power beneficially owned by such holder would exceed a designated percentage elected by the holder ranging from 4.99% to 19.99%, after giving effect to the exercise (the “Maximum Ownership Percentage”). Upon at least 61 days’ prior notice to the Company, any warrant holder may elect to increase or decrease the Maximum Ownership Percentage to any other percentage not to exceed 19.99%. As of December 31, 2021, no shares underlying the Pre-Funded Warrants have been exercised. Registered Direct Offering Concurrently with the Underwritten Offering, a major shareholder (the “Purchaser”) that is affiliated with a member of our Board of Directors entered into a subscription agreement for a registered direct offering, pursuant to which the Company agreed to sell to the Purchaser an aggregate of 769,231 shares of the Company’s common stock at a purchase price of $6.50 per share. The closing for the registered direct offering occurred on October 27, 2021, whereby the Company received gross proceeds of $5.0 million. Equity Distribution Agreement In December 2020, the Company and Oppenheimer & Co. Inc. (the “Agent”) entered into an Equity Distribution Agreement (the “EDA”) that provides for an “at the market offering” for the sale of up to $50.0 million in shares of the Company’s common stock (the “Placement Shares”) through the Agent. The Agent is acting as sales agent and is required to use commercially reasonable efforts to sell all of the Placement Shares requested to be sold by the Company, consistent with the Agent’s normal trading and sales practices, on mutually agreed terms between the Agent and the Company. The EDA will terminate when all of the Placement Shares have been sold, or earlier upon the election of either the Company or the Agent. The Company has no obligation to sell any of the Placement Shares under the EDA. The Company intends to use the net proceeds, if any, from amounts sold under the EDA for general corporate purposes, including working capital. Under the terms of the EDA, the Company agreed to pay the Agent a commission equal to 3.0% of the gross sales price of the Placement Shares plus certain expenses incurred by the Agent in connection with the offering. For the six months ended December 31, 2021, the Company sold 138,388 shares of its common stock pursuant to the EDA for net proceeds of approximately $1.5 million. Accordingly, the maximum amount remaining for sale under the EDA amounts to approximately $48.5 million as of December 31, 2021. LPC Purchase Agreement In August 2021, the Company entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “RRA”) with Lincoln Park Capital Fund, LLC (“LPC”), which provides that the Company may sell to LPC up to an aggregate of $20.0 million of shares (the “Purchase Shares”) of its common stock. The Company concurrently filed a prospectus supplement with the SEC to register the shares issuable under the Purchase Agreement. The aggregate number of shares that the Company can sell to LPC under the Purchase Agreement may not exceed 1,669,620 shares of common stock, subject to certain exceptions set forth in the Purchase Agreement. LPC’s initial purchase consisted of 95,708 Purchase Shares at a purchase price of approximately $10.45 per share for a total purchase price of $1.0 million. Concurrently, the Company issued 33,799 shares of common stock to LPC as an initial fee for its commitment to purchase shares of common stock under the Purchase Agreement. Subject to the terms of the Purchase Agreement, the Company has the right, in its sole discretion, to present LPC with a purchase notice (a “Regular Purchase Notice”), directing LPC to purchase up to 25,000 Purchase Shares (a “Regular Purchase”), which amounts may be increased under certain circumstances. LPC’s committed obligation under any single Regular Purchase generally will not exceed $2.0 million. The Purchase Agreement provides for a purchase price per share for each Regular Purchase (the “Purchase Price”) equal to the lesser of (i) the lowest sale price of the common stock on the Nasdaq Capital Market (“NCM”) on the purchase date of such shares; and (ii) the average of the three lowest closing sale prices for the common stock traded on the NCM during the ten consecutive business days ending on the business day immediately preceding the purchase date of such shares. In addition, on any date on which the Company submits a Regular Purchase Notice for the maximum amount allowed for such a Regular Purchase to LPC, the Company also has the right, in its sole discretion, to present LPC with an accelerated purchase notice (an “Accelerated Purchase Notice”), directing LPC to purchase an amount of Purchase Shares (an “Accelerated Purchase”), which number of Purchase Shares will not exceed the lesser of (i) 300% of the number of shares purchased pursuant to such Regular Purchase Notice and (ii) 30% of the total volume of shares of the common stock traded on the NCM during the Accelerated Purchase period. The Purchase Price per Purchase Share for each such Accelerated Purchase will be equal to the lesser of 97% of (i) the volume-weighted average price of the common stock on the NCM during the applicable Accelerated Purchase period on the applicable Accelerated Purchase date; and (ii) the closing sale price of the common stock on the NCM on the applicable Accelerated Purchase date. On September 17, 2021, the Company submitted a regular purchase notice, resulting in the sale of 20,000 Purchase Shares to LPC for net proceeds of approximately $0.2 million. Accordingly, LPC is obligated to purchase up to a maximum of $18.8 million under the Purchase Agreement as of December 31, 2021. Pursuant to the RRA, the Company agreed to use its reasonable best efforts to maintain effectiveness of the registration statement and the related prospectus supplement within prescribed deadlines set forth in the RRA. In addition, the Company is required to use its reasonable best efforts to secure and maintain its listing of the Purchase Shares on the NCM. LPC has no obligation to purchase shares under the Purchase Agreement unless the Company complies with the terms of the RRA. |
SHARE-BASED COMPENSATION AND WA
SHARE-BASED COMPENSATION AND WARRANTS | 6 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED COMPENSATION AND WARRANTS | |
SHARE-BASED COMPENSATION AND WARRANTS | NOTE 7 — SHARE-BASED COMPENSATION AND WARRANTS Stock Option Plans Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans as of December 31, 2021 (in thousands): Termination Number of Shares Description Date Authorized Outstanding Available 2015 Plan February 2020 50 50 — 2016 Plan October 2021 260 260 — 2019 Plan July 2029 200 200 — 2021 Plan March 2030 1,200 797 403 Total 1,710 1,307 403 Stock Options Outstanding The following table sets forth a summary of the stock option activity under all of the Company’s stock option plans for the six months ended December 31, 2021 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2021 1,285 $ 16.35 8.7 Granted 109 7.69 Forfeited (87) 19.33 Outstanding, December 31, 2021 1,307 15.43 8.6 Vested, December 31, 2021 541 20.13 7.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the stock options expire. For the six months ended December 31, 2021, the aggregate fair value of stock options granted for approximately 0.1 million shares of common stock that provide solely for time-based vesting, amounted to $0.6 million or approximately $5.72 per share as of the grant dates. Fair value was computed using the BSM option-pricing model and will result in the recognition of compensation cost ratably over the expected vesting period of the stock options. For the six months ended December 31, 2021, the fair value of stock options was estimated on the date of grant, with the following weighted-average assumptions: Market price of common stock on grant date $ 7.69 Expected volatility 90 % Risk free interest rate 1.1 % Expected term (years) 6.1 Dividend yield 0 % Share-based compensation expense for the three and six months ended December 31, 2021 and 2020 is included under the following captions in the unaudited condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Research and development $ 378 $ 493 $ 687 $ 814 General and administrative 631 648 1,164 961 Total $ 1,009 $ 1,141 $ 1,851 $ 1,775 Unrecognized share-based compensation expense is approximately $6.9 million as of December 31, 2021. This amount is expected to be recognized over a weighted average period of 2.4 years. Warrants In connection with the Underwritten Offering discussed in Note 6, the Company issued 1,661,461 Pre-Funded Warrants to purchase 1,661,461 shares of common stock at an issuance price of $6.49 per warrant for gross proceeds of $10.8 million. The Pre-Funded Warrants may be exercised at any time by paying the exercise price of $0.01 per share, subject to the terms discussed in Note 6. In addition, the Company has issued warrants in conjunction with various debt and equity financings and for services. The following table sets forth a summary of the warrant activity (excluding the Pre-Funded Warrants) for the six months ended December 31, 2021 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2021 1,252 $ 28.91 4.8 Warrants expired (65) 82.50 Outstanding, December 31, 2021 1,187 25.97 4.5 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 — COMMITMENTS AND CONTINGENCIES Commitments Please refer to Note 4 for further discussion of commitments to make milestone payments and to pay royalties under license agreements with Xoma and ActiveSite. COVID-19 The current COVID-19 pandemic, which is impacting worldwide economic activity, poses risks that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. The extent to which COVID-19 impacts the Company’s business, including its clinical trials and financial condition, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease. As COVID-19 continues to spread around the globe, including the spread of more contagious and virulent variants, we could experience disruptions, including delays or difficulties in enrolling patients in our clinical trials, delays or difficulties in clinical site initiation, interruption of key clinical trial activities, delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials, and delays in necessary interactions with local regulatory authorities. COVID-19 may also impact the Company’s ability to raise additional capital on a timely basis or at all, which could negatively impact long-term liquidity. Registration Rights Agreement In connection with the LPC Purchase Agreement discussed in Note 6, the Company entered into a Registration Rights Agreement whereby it agreed to register all the shares issuable under the Purchase Agreement. The Company filed a prospectus supplement to meet this obligation in August 2021 and is required to maintain the effectiveness of the prospectus supplement on a reasonable best-efforts basis. Legal Matters From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of December 31, 2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the Company’s results of operations. At each reporting period, the Company evaluates known claims to determine whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 9 — RELATED PARTY TRANSACTIONS On September 15, 2020, the Company entered into an exclusive license agreement with Handok, Inc. (the “Handok License”) for the territory of the Republic of Korea. The Handok License relates to pharmaceutical products in final dosage form containing the pharmaceutical compounds developed or to be developed by the Company, including those related to RZ358 and RZ402. The Handok License is in effect for a period of 20 years after the first commercial sale of each product and requires (i) milestone payments to the Company of $0.5 million upon approval of a New Drug Application (“NDA”) for each product in the territory, and (ii) the Company will sell products ordered by Handok at a transfer price equal to 70% of the net selling price of the products. To date, no milestone payments have been earned by the Company. In addition, Handok was the sole investor in the Registered Direct Offering discussed in Note 6. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 10 — INCOME TAXES Income tax expense during interim periods is based on applying an estimated annualized effective income tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. The computation of the annualized estimated effective tax rate for each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating results for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes. For the three and six months ended December 31, 2021 and 2020, the Company did not record any income tax benefit due to a full valuation allowance on its deferred tax assets. The Company did not have any material changes to its conclusions regarding valuation allowances for deferred income tax assets or uncertain tax positions for the three and six months ended December 31, 2021 and 2020. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 6 Months Ended |
Dec. 31, 2021 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | NOTE 11 — NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares and Pre-Funded Warrants outstanding during the period, without consideration for potentially dilutive securities. The Pre-Funded Warrants are included in the computation of basic and diluted net loss per share as the exercise price is negligible and the Pre-Funded Warrants are fully vested and exercisable. Accordingly, weighted average shares outstanding is computed as follows for the three and six months ended December 31, 2021 and 2020 (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Common Stock 14,289 8,045 11,402 6,956 Pre-Funded Warrants 1,391 — 695 — Total 15,680 8,045 12,097 6,956 For the three and six months ended December 31, 2021 and 2020, basic and diluted net loss per share were the same since all other common stock equivalents were anti-dilutive. As of December 31, 2021 and 2020, the following outstanding potential common stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands): 2021 2020 Stock options 1,307 948 Other warrants 1,187 1,438 Total 2,494 2,386 |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 6 Months Ended |
Dec. 31, 2021 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | NOTE 12 — FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1—Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2—Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any market activity for the asset or liability at the measurement date. The Company’s embedded derivative liability is classified under Level 3 of the hierarchy and is required to be measured and recorded at fair value on a recurring basis. Fair value is determined based on management’s assessment of the probability and timing of occurrence for the Exit Events discussed in Note 5 using a discount rate equal to the effective interest rate for the term A loan. The following table sets forth changes in the fair value of the embedded derivative liability for the six months ended December 31, 2021 (in thousands): Fair value as of June 30, 2021 $ 387 Gain from change in fair value (4) Fair value as of December 31, 2021 $ 383 Except for the embedded derivative liability, the Company did not have any other assets or liabilities measured at fair value on a recurring basis as of December 31, 2021 and June 30, 2021. Due to the relatively short maturity of the respective instruments, the fair value of cash and cash equivalents, restricted cash, accounts payable, and accrued liabilities approximated their carrying values as of December 31, 2021 and June 30, 2021. Due to the unique terms of the Loan Agreement discussed in Note 5, it was measured on a non-recurring basis at fair value using Level 3 inputs when it was entered into in April 2021. Due to the lack of observable inputs, the Company was unable to determine fair value of the Loan Agreement as of December 31, 2021. The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the six months ended December 31, 2021 and 2020, the Company did not have any transfers of its assets or liabilities between levels of the fair value hierarchy. Significant Concentrations Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains its cash, cash equivalents and restricted cash at high-quality financial institutions. For the six months ended December 31, 2021, cash deposits have exceeded the amount of federal insurance provided on such deposits. As of December 31, 2021 and June 30, 2021, the Company had cash, cash equivalents and restricted cash with a single financial institution with an aggregate balance of $82.4 million and $41.0 million, respectively. The Company has never experienced any losses related to its investments in cash and cash equivalents. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 13 — SUBSEQUENT EVENT As noted in Note 2 and Note 4, in January 2022, the Company dosed the last patient in their Phase 2b clinical trial for RZ358. This dosing triggered a payment due to Xoma in the amount of $2.0 million within 30 days of the event. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2021 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | Nature of Operations Rezolute, Inc. (the “Company”) is a clinical stage biopharmaceutical company developing transformative therapies for metabolic diseases related to chronic glucose imbalance. |
Change in Domicile | Change in Domicile In June 2021, the Company merged with and into its wholly owned subsidiary, Rezolute Nevada Merger Corporation, a Nevada corporation (“Merger Sub”), pursuant to an Agreement and Plan of Merger, dated as of June 18, 2021 (the “Reincorporation Merger Agreement”), between the Company and Merger Sub, with Merger Sub as the surviving corporation (the “Reincorporation Merger”). At the effective time of the Reincorporation Merger (the “Effective Time”), the Merger Sub was renamed “Rezolute, Inc.” and succeeded to the assets, continued its business and assumed its rights and obligations by operation of law. The Reincorporation Merger Agreement was approved by the Company’s shareholders at the 2021 annual meeting of its shareholders held on May 26, 2021. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the SEC for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The condensed consolidated balance sheet as of June 30, 2021, has been derived from the Company’s audited consolidated financial statements. The unaudited interim financial statements should be read in conjunction with the Company’s 2021 Form 10-K, which contains the Company’s audited financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended June 30, 2021. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnote disclosures necessary for a comprehensive presentation of financial position, results of operations, and cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) that are necessary for a fair financial statement presentation have been made. The interim results for the three and six months ended December 31, 2021 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the fiscal year ending June 30, 2022. |
Consolidation | Consolidation The Company has two wholly owned subsidiaries consisting of Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, the fair value of derivative liabilities, fair value of share-based payments, management’s assessment of going concern, and clinical trial accrued liabilities. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations may be subject to significant risks and uncertainties including financial, operational, regulatory and other risks associated with a clinical stage company, including the potential risk of business failure as discussed further in Note 2, and the future impact of COVID-19 as discussed in Note 8. |
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are described in Item 8 of the 2021 Form 10-K. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standard Required to be Adopted in Future Periods. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
OPERATING LEASES | |
Schedule of carrying value of ROU assets and operating lease liabilities | The carrying value of right-of-use (“ROU”) assets and operating lease liabilities are as follows (in thousands): December 31, June 30, 2021 2021 Right-of-Use Assets, net $ 237 $ 396 Operating Lease Liabilities: Current $ 147 $ 265 Long-term 134 187 Total $ 281 $ 452 |
Schedule of operating lease expense | For the three and six months ended December 31, 2021 and 2020, operating lease expense was as follows (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Research and development $ 71 $ 61 $ 150 $ 110 General and administrative 20 30 43 54 Total $ 91 $ 91 $ 193 $ 164 |
Summary of future payments under operating lease agreements | Fiscal year ending June 30, Remainder of fiscal year 2022 $ 100 2023 117 2024 79 Total lease payments 296 Less imputed interest (15) Present value of operating lease liabilities $ 281 |
LOAN AND SECURITY AGREEMENT (Ta
LOAN AND SECURITY AGREEMENT (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
LOAN AND SECURITY AGREEMENT | |
Schedule of Future minimum principal payments and the net carrying value of the term A Loan | Fiscal year ending June 30, Remainder of fiscal year 2022 $ — 2023 833 2024 5,000 2025 5,000 2026 4,880 Total contractual payments 15,713 Less unaccreted debt discount (1,535) Net carrying value $ 14,178 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
SHAREHOLDERS' EQUITY | |
Summary of changes in stockholders' equity | Additional Total Common Stock Paid-in Accumulated Shareholders’ Shares Amount Capital Deficit Equity Three Months Ended December 31, 2021: Balances as of September 30, 2021 8,640 $ 9 $ 197,524 $ (175,974) $ 21,559 Gross proceeds from issuance of equity securities for cash in Underwritten Offering: Common stock 6,147 6 39,950 — 39,956 Pre-Funded Warrants — — 10,783 — 10,783 Gross proceeds from issuance of common stock for cash in Registered Direct Offering 769 1 4,999 — 5,000 Underwriting discounts and other equity offering costs — — (3,449) — (3,449) Share-based compensation — — 1,009 — 1,009 Net loss — — — (12,593) (12,593) Balances as of December 31, 2021 15,556 $ 16 $ 250,816 $ (188,567) $ 62,265 Three Months Ended December 31, 2020: Balances as of September 30, 2020 5,867 $ 6 $ 155,232 $ (150,856) $ 4,382 Issuance of Units for cash 2,485 2 40,998 — 41,000 Advisory fees and other offering costs — — (3,550) — (3,550) Share-based compensation — — 1,141 — 1,141 Issuance of common stock for services — — 7 — 7 Fair value of warrants issued to consultants for services — — 3 — 3 Net loss — — — (7,097) (7,097) Balances as of December 31, 2020 8,352 $ 8 $ 193,831 $ (157,953) $ 35,886 |
SHARE-BASED COMPENSATION AND _2
SHARE-BASED COMPENSATION AND WARRANTS (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED COMPENSATION AND WARRANTS | |
Schedule of the number of shares authorized, outstanding, and available for future grants under stock option | Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans as of December 31, 2021 (in thousands): Termination Number of Shares Description Date Authorized Outstanding Available 2015 Plan February 2020 50 50 — 2016 Plan October 2021 260 260 — 2019 Plan July 2029 200 200 — 2021 Plan March 2030 1,200 797 403 Total 1,710 1,307 403 |
Summary of the stock option activity | The following table sets forth a summary of the stock option activity under all of the Company’s stock option plans for the six months ended December 31, 2021 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2021 1,285 $ 16.35 8.7 Granted 109 7.69 Forfeited (87) 19.33 Outstanding, December 31, 2021 1,307 15.43 8.6 Vested, December 31, 2021 541 20.13 7.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the stock options expire. |
Schedule of the fair value of stock options was estimated on the date of grant using the BSM option-pricing model using following weighted-average assumptions | Market price of common stock on grant date $ 7.69 Expected volatility 90 % Risk free interest rate 1.1 % Expected term (years) 6.1 Dividend yield 0 % |
Schedule of share-based compensation expense | Share-based compensation expense for the three and six months ended December 31, 2021 and 2020 is included under the following captions in the unaudited condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Research and development $ 378 $ 493 $ 687 $ 814 General and administrative 631 648 1,164 961 Total $ 1,009 $ 1,141 $ 1,851 $ 1,775 |
Schedule of warrant activity | In addition, the Company has issued warrants in conjunction with various debt and equity financings and for services. The following table sets forth a summary of the warrant activity (excluding the Pre-Funded Warrants) for the six months ended December 31, 2021 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2021 1,252 $ 28.91 4.8 Warrants expired (65) 82.50 Outstanding, December 31, 2021 1,187 25.97 4.5 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire. |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
NET LOSS PER SHARE | |
Summary of potential common stock equivalents were excluded from the computation of diluted net loss per share | Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares and Pre-Funded Warrants outstanding during the period, without consideration for potentially dilutive securities. The Pre-Funded Warrants are included in the computation of basic and diluted net loss per share as the exercise price is negligible and the Pre-Funded Warrants are fully vested and exercisable. Accordingly, weighted average shares outstanding is computed as follows for the three and six months ended December 31, 2021 and 2020 (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Common Stock 14,289 8,045 11,402 6,956 Pre-Funded Warrants 1,391 — 695 — Total 15,680 8,045 12,097 6,956 For the three and six months ended December 31, 2021 and 2020, basic and diluted net loss per share were the same since all other common stock equivalents were anti-dilutive. As of December 31, 2021 and 2020, the following outstanding potential common stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands): 2021 2020 Stock options 1,307 948 Other warrants 1,187 1,438 Total 2,494 2,386 |
Schedule of weighted average shares outstanding | Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Common Stock 14,289 8,045 11,402 6,956 Pre-Funded Warrants 1,391 — 695 — Total 15,680 8,045 12,097 6,956 |
FINANCIAL INSTRUMENTS AND SIG_2
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Summary of changes in the fair value of the Company's derivative liabilities, fair value ,Level 3 inputs | Fair value as of June 30, 2021 $ 387 Gain from change in fair value (4) Fair value as of December 31, 2021 $ 383 |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Dec. 31, 2021subsidiary | |
Nature of operations and Significant accounting policies | |
Number of wholly owned subsidiaries | 2 |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Nov. 30, 2021 | Oct. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net loss | $ (12,593) | $ (7,097) | $ (20,429) | $ (10,717) | $ 20,900 | ||||
Net cash used in operating activities | (13,538) | $ (9,814) | 20,400 | ||||||
Accumulated deficit | (188,567) | (188,567) | (168,138) | ||||||
Cash and cash equivalents | 77,403 | 77,403 | 41,047 | $ 77,403 | $ 37,600 | ||||
Current liabilities | $ 6,445 | 6,445 | $ 1,968 | ||||||
Net proceeds from the offering | $ 52,300 | $ 52,300 | |||||||
Gross proceeds from sale of equity | 2,700 | ||||||||
Underwritten Offering | |||||||||
Net proceeds from the offering | 47,300 | 47,300 | |||||||
Registered Direct Offering [Member] | |||||||||
Net proceeds from the offering | $ 5,000 | $ 5,000 | |||||||
Phase 2 Clinical Trial RZ402 | |||||||||
Milestone closing payment | 3,000 | ||||||||
Phase 2 Clinical Trial RZ358 | |||||||||
Milestone closing payment | $ 2,000 |
OPERATING LEASES - Additional I
OPERATING LEASES - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING LEASES | ||
Weighted average remaining lease term under operating leases | 1 year 10 months 24 days | |
Weighted average discount rate for operating lease liabilities | 6.60% | |
Cash paid for amounts included in measurement of operating lease liabilities | $ 184 | $ 140 |
OPERATING LEASES - Assets and o
OPERATING LEASES - Assets and operating lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Carrying value of ROU assets and operating lease liabilities | ||
Right-of-Use Assets, net | $ 237 | $ 396 |
Operating Lease Liabilities: | ||
Current | 147 | 265 |
Long-term | 134 | 187 |
Total | $ 281 | $ 452 |
OPERATING LEASES - Operating le
OPERATING LEASES - Operating lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease Cost [Line Items] | ||||
Total | $ 91 | $ 91 | $ 193 | $ 164 |
Research and development | ||||
Lease Cost [Line Items] | ||||
Total | 71 | 61 | 150 | 110 |
General and administrative | ||||
Lease Cost [Line Items] | ||||
Total | $ 20 | $ 30 | $ 43 | $ 54 |
OPERATING LEASES - Operating _2
OPERATING LEASES - Operating lease agreements (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Future lease payments related to operating lease agreements | ||
Remainder of fiscal year 2022 | $ 100 | |
2023 | 117 | |
2024 | 79 | |
Total lease payments | 296 | |
Less imputed interest | (15) | |
Present value of operating lease liabilities | $ 281 | $ 452 |
LICENSE AGREEMENTS (Details)
LICENSE AGREEMENTS (Details) - USD ($) $ in Millions | Aug. 04, 2017 | Dec. 31, 2021 |
ActiveSite Pharmaceuticals, Inc. [Member] | ||
License Agreements | ||
Maximum Amount of Milestone Events | $ 46.5 | |
First milestone payment due after completion of the preclinical work | $ 1 | |
Xoma | ||
License Agreements | ||
Milestone closing payment | $ 37 | |
Phase 2 Clinical Trial RZ402 | ||
License Agreements | ||
Milestone closing payment | 3 | |
Phase 2 Clinical Trial RZ358 | ||
License Agreements | ||
Milestone closing payment | $ 2 |
LOAN AND SECURITY AGREEMENT (De
LOAN AND SECURITY AGREEMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Debt Instrument [Line Items] | ||
Net carrying value | $ 14,178 | $ 13,968 |
Loan and security agreement | ||
Debt Instrument [Line Items] | ||
Less unaccreted debt discount | (1,700) | |
Loan and security agreement | Term A loan | ||
Debt Instrument [Line Items] | ||
Remainder of fiscal year 2022 | 0 | |
2023 | 833 | |
2024 | 5,000 | |
2025 | 5,000 | |
2026 | 4,880 | |
Total contractual payments | 15,713 | |
Less unaccreted debt discount | (1,535) | |
Net carrying value | $ 14,178 |
LOAN AND SECURITY AGREEMENT - A
LOAN AND SECURITY AGREEMENT - Additional Information (Details) - USD ($) | Apr. 13, 2031 | Apr. 14, 2021 | Nov. 30, 2021 | Oct. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Jun. 30, 2021 |
Debt Instrument [Line Items] | |||||||
Net proceeds from the offering | $ 52,300,000 | $ 52,300,000 | |||||
Restricted cash noncurrent | $ 5,000,000 | $ 5,000,000 | $ 0 | ||||
Net carrying value | $ 14,178,000 | $ 14,178,000 | $ 13,968,000 | ||||
Loan and security agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 30,000,000 | ||||||
Funding based on ability to obtain equity or subordinated debt financing and the achievement of certain clinical milestones | $ 70,000,000 | ||||||
Stated interest rate | 8.75% | ||||||
Variable margin rate | 0.12% | 0.12% | |||||
Contractual rate | 8.87% | 8.87% | 8.87% | ||||
Non-refundable facility fee | 1.00% | ||||||
Final fee | 4.75% | ||||||
Debt discounts | $ 1,700,000 | $ 1,700,000 | |||||
Financial advisory and legal fees | 400,000 | 400,000 | |||||
Facility Fee and Final Fee | $ 900,000 | $ 900,000 | |||||
Exit fee on the funded principal balance | 4.00% | ||||||
Percentage of entity's shares held by investors | 35.00% | ||||||
Default interest rate | 5.00% | ||||||
Loan and security agreement | Term A loan | |||||||
Debt Instrument [Line Items] | |||||||
Gross proceeds from issuance of debt | $ 15,000,000 | ||||||
Stated interest rate | 12.60% | 12.60% | 12.60% | ||||
Total debt discount | $ 1,700,000 | ||||||
Embedded derivative associated with the exit fee and prepayment fee related to the term A loan | 400,000 | ||||||
Debt discounts | 1,535,000 | $ 1,535,000 | |||||
Fair value of embedded derivatives | 354,000 | ||||||
Outstanding principal balance | 15,000,000 | 15,000,000 | |||||
Outstanding Final Fee | 700,000 | 700,000 | |||||
Total contractual payments | 15,713,000 | 15,713,000 | |||||
Net carrying value | $ 14,178,000 | $ 14,178,000 | |||||
Loan and security agreement | Term B loan | |||||||
Debt Instrument [Line Items] | |||||||
Remaining borrowing capacity | 7,500,000 | ||||||
Cash balance requirement | 5,000,000 | ||||||
Loan and security agreement | Term C loan | |||||||
Debt Instrument [Line Items] | |||||||
Remaining borrowing capacity | $ 7,500,000 | ||||||
Registered Direct Offering [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Net proceeds from the offering | 5,000,000 | 5,000,000 | |||||
Underwritten Offering | |||||||
Debt Instrument [Line Items] | |||||||
Net proceeds from the offering | $ 47,300,000 | $ 47,300,000 | |||||
Minimum [Member] | Loan and security agreement | |||||||
Debt Instrument [Line Items] | |||||||
Prepayment fee | 1.00% | ||||||
Maximum [Member] | Loan and security agreement | |||||||
Debt Instrument [Line Items] | |||||||
Prepayment fee | 3.00% | ||||||
Forecast | Loan and security agreement | |||||||
Debt Instrument [Line Items] | |||||||
Exit fee | $ 600,000 |
SHAREHOLDERS' EQUITY - Addition
SHAREHOLDERS' EQUITY - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 27, 2021 | Oct. 15, 2021 | Sep. 17, 2021 | Nov. 30, 2021 | Aug. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||||||||||
Gross proceeds from sale of equity | $ 2,700 | |||||||||
Proceeds from warrants issued | $ 10,800 | |||||||||
Warrant price (per share) | $ 0.01 | $ 0.01 | ||||||||
Minimum Period For Increase Or Decrease In Ownership Percentage | 61 days | |||||||||
Gross proceeds from issuance of stock | $ 5,000 | $ 5,000 | ||||||||
Issuance of Units for cash | $ 41,000 | $ 41,000 | ||||||||
Gross proceeds from issuance of common stock for cash In Under LPC Purchase Agreement | 1,172 | |||||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 2,485,000 | 2,485,000 | ||||||||
Gross proceeds from issuance of stock | $ 1 | $ 1 | ||||||||
Issuance of Units for cash | $ 2 | $ 2 | ||||||||
Maximum number of shares issued | 116,000 | |||||||||
Maximum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants Designated Percentage Elected By Holder | 19.99% | |||||||||
Minimum [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants Designated Percentage Elected By Holder | 4.99% | |||||||||
Underwritten Public Offering | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 6,030,847 | 116,266 | ||||||||
Sale of Stock, Price Per Share | $ 6.50 | $ 6.50 | $ 6.50 | |||||||
Gross proceeds from sale of equity | $ 39,200 | $ 800 | ||||||||
Pre-funded warrants to purchase shares of common stock | 1,661,461 | |||||||||
Warrants issued (In shares) | 1,661,461 | |||||||||
Shares issue price | $ 6.49 | |||||||||
Proceeds from warrants issued | $ 10,800 | |||||||||
Gross proceeds from underwritten offering excluding underwriting options | $ 50,000 | |||||||||
Underwriting discounts and commissions ( In percentage) | 6.00% | |||||||||
Other offering costs | $ 300 | |||||||||
Total offering Cost | 3,300 | |||||||||
Net Proceeds from underwritten offering | $ 46,700 | |||||||||
Underwriters option period | 30 days | |||||||||
Maximum number of additional shares issued | 1,153,845 | |||||||||
Registered Direct Offering | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 769,231 | |||||||||
Sale of Stock, Price Per Share | $ 6.50 | $ 6.50 | ||||||||
Gross proceeds from issuance of stock | $ 5,000 | |||||||||
Equity Distribution Agreement | ||||||||||
Class of Stock [Line Items] | ||||||||||
Gross proceeds from sale of equity | $ 48,500 | |||||||||
Underwriting discounts and commissions ( In percentage) | 3.00% | |||||||||
Net Proceeds from underwritten offering | $ 1,500 | |||||||||
Issuance of Units for cash | $ 50,000 | |||||||||
Equity Distribution Agreement | Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 138,388 | |||||||||
LPC Purchase Agreement | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued | 95,708 | |||||||||
Gross proceeds from sale of equity | $ 1,000 | |||||||||
Shares issue price | $ 10.45 | $ 10.45 | ||||||||
Maximum Number Of Shares Purchased | 20,000 | |||||||||
Maximum purchase price committed obligation | $ 18,800 | $ 18,800 | ||||||||
Maximum percentage of number of shares purchased pursuant to Regular Purchase Notice | 300.00% | 300.00% | ||||||||
Maximum volume of shares of common stock traded on NCM | 30.00% | 30.00% | ||||||||
Maximum percentage of Purchase Price for Each Accelerated Purchase | 97.00% | 97.00% | ||||||||
Net proceeds from transfer of shares | $ 200 | |||||||||
Common Stock | LPC Purchase Agreement | ||||||||||
Class of Stock [Line Items] | ||||||||||
Gross proceeds from issuance of common stock for cash In Under LPC Purchase Agreement | $ 20,000 | |||||||||
Maximum number of shares issued | 1,669,620 | |||||||||
Commitment shares issued | 33,799 | |||||||||
Maximum Number Of Shares Purchased | 25,000 | 25,000 | ||||||||
Maximum purchase price committed obligation | $ 2,000 | $ 2,000 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Balance | $ 21,559 | $ 4,382 | $ 26,099 | $ 7,365 | $ 7,365 |
Common stock | 39,956 | 39,956 | |||
Pre-Funded Warrants | 10,783 | 10,783 | |||
Gross proceeds from issuance of common stock for cash in Registered Direct Offering | 5,000 | 5,000 | |||
Underwriting discounts and other equity offering costs | (3,449) | (4,136) | |||
Share-based compensation | 1,009 | 1,141 | 1,851 | 1,775 | |
Issuance of Units for cash | 41,000 | 41,000 | |||
Advisory fees and other offering costs | (3,550) | (3,550) | |||
Issuance of common stock for services | 7 | 7 | |||
Fair value of warrants issued to consultants for Services | 3 | 6 | |||
Net Loss | (12,593) | (7,097) | (20,429) | (10,717) | 20,900 |
Balance | 62,265 | 35,886 | 62,265 | 35,886 | 26,099 |
Common Stock | |||||
Balance | $ 9 | $ 6 | $ 8 | $ 6 | $ 6 |
Balance (in shares) | 8,640 | 5,867 | 8,352 | 5,867 | 5,867 |
Common stock | $ 6 | $ 6 | |||
Common stock (in shares) | 6,147 | 6,147 | |||
Gross proceeds from issuance of common stock for cash in Registered Direct Offering | $ 1 | $ 1 | |||
Gross proceeds from issuance of common stock for cash In Registered Direct Offering (In shares) | 769 | 769 | |||
Issuance of Units for cash | $ 2 | $ 2 | |||
Issuance of Units for cash (in shares) | 2,485 | 2,485 | |||
Balance | $ 16 | $ 8 | $ 16 | $ 8 | $ 8 |
Balance (in shares) | 15,556 | 8,352 | 15,556 | 8,352 | 8,352 |
Additional Paid-in Capital | |||||
Balance | $ 197,524 | $ 155,232 | $ 194,229 | $ 154,595 | $ 154,595 |
Common stock | 39,950 | 39,950 | |||
Pre-Funded Warrants | 10,783 | 10,783 | |||
Gross proceeds from issuance of common stock for cash in Registered Direct Offering | 4,999 | 4,999 | |||
Underwriting discounts and other equity offering costs | (3,449) | (4,136) | |||
Share-based compensation | 1,009 | 1,141 | 1,851 | 1,775 | |
Issuance of Units for cash | 40,998 | 40,998 | |||
Advisory fees and other offering costs | (3,550) | (3,550) | |||
Issuance of common stock for services | 7 | 7 | |||
Fair value of warrants issued to consultants for Services | 3 | 6 | |||
Balance | 250,816 | 193,831 | 250,816 | 193,831 | 194,229 |
Accumulated Deficit | |||||
Balance | (175,974) | (150,856) | (168,138) | (147,236) | (147,236) |
Net Loss | (12,593) | (7,097) | (20,429) | (10,717) | |
Balance | $ (188,567) | $ (157,953) | $ (188,567) | $ (157,953) | $ (168,138) |
SHARE-BASED COMPENSATION AND _3
SHARE-BASED COMPENSATION AND WARRANTS - Stock option plans (Details) - shares shares in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 1,710 | |
Number of shares outstanding | 1,307 | 1,285 |
Number of shares available | 403 | |
2015 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 50 | |
Number of shares outstanding | 50 | |
2016 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 260 | |
Number of shares outstanding | 260 | |
2019 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 200 | |
Number of shares outstanding | 200 | |
2021 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 1,200 | |
Number of shares outstanding | 797 | |
Number of shares available | 403 |
SHARE-BASED COMPENSATION AND _4
SHARE-BASED COMPENSATION AND WARRANTS - Stock options outstanding (Details) - $ / shares shares in Thousands | 6 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Jun. 30, 2021 | |
Number of Options | ||
Outstanding | 1,285 | |
Granted | 109 | |
Forfeited | (87) | |
Outstanding | 1,307 | 1,285 |
Vested | 541 | |
Weighted Average Exercise Price | ||
Outstanding | $ 16.35 | |
Granted | 7.69 | |
Forfeited | 19.33 | |
Outstanding | 15.43 | $ 16.35 |
Vested | $ 20.13 | |
Weighted Average Remaining Contractual Life | ||
Weighted Average Remaining Contractual Lives | 8 years 7 months 6 days | 8 years 8 months 12 days |
Vested | 7 years 9 months 18 days |
SHARE-BASED COMPENSATION AND _5
SHARE-BASED COMPENSATION AND WARRANTS - Weighted average assumptions (Details) - Time-Based | 6 Months Ended |
Dec. 31, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Market price of common stock on grant date | $ 7.69 |
Expected volatility | 90.00% |
Risk free interest rate | 1.10% |
Expected term (years) | 6 years 1 month 6 days |
Dividend yield | 0.00% |
SHARE-BASED COMPENSATION AND _6
SHARE-BASED COMPENSATION AND WARRANTS - Share based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 1,009 | $ 1,141 | $ 1,851 | $ 1,775 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | 378 | 493 | 687 | 814 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 631 | $ 648 | $ 1,164 | $ 961 |
SHARE-BASED COMPENSATION AND _7
SHARE-BASED COMPENSATION AND WARRANTS - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Dec. 31, 2021 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Proceeds from warrants issued | $ 10.8 | |
Warrant price (per share) | $ 0.01 | |
Weighted average exercise price (Per share) | $ 0.01 | |
Pre-Funded Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants issued (In shares) | 1,661,461 | |
Pre-funded warrants to purchase shares of common stock | 1,661,461 | |
Shares issue price | $ 6.49 | |
Proceeds from warrants issued | $ 10.8 | |
Warrant price (per share) | $ 0.01 | |
Weighted average exercise price (Per share) | 0.01 | |
Excluding Pre-Funded Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrant price (per share) | $ 25.97 | $ 28.91 |
Warrants outstanding-Beginning (In shares) | 1,252,000 | |
Warrants expired | (65,000) | |
Warrants outstanding-Ending (In shares) | 1,187,000 | |
Weighted average exercise price( Per share) | $ 28.91 | |
Warrants expired (in dollars per share) | 82.50 | |
Weighted average exercise price (Per share) | $ 25.97 | |
Weighted average remaining contractual term | 4 years 6 months | 4 years 9 months 18 days |
SHARE-BASED COMPENSATION AND _8
SHARE-BASED COMPENSATION AND WARRANTS (Details) $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares | 109 |
Hybrid Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ | $ 6.9 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 4 months 24 days |
Time-based vesting [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares | 100 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 5.72 |
Estimated fair value of stock options | $ | $ 0.6 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Handok License[Member] | Sep. 15, 2020USD ($) |
Related Party Transaction [Line Items] | |
Pharmaceutical License Agreement, Term | 20 years |
Pharmaceutical License Agreement, Milestone Payment | $ 500,000 |
Pharmaceutical License Agreement, Transfer Price | 70.00% |
Milestone payments earned | $ 0 |
NET LOSS PER SHARE - Weighted a
NET LOSS PER SHARE - Weighted average shares outstanding (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total | 15,680 | 8,045 | 12,097 | 6,956 |
Pre-Funded Warrants | ||||
Total | 1,391 | 695 | ||
Common Stock | ||||
Total | 14,289 | 8,045 | 11,402 | 6,956 |
NET LOSS PER SHARE - Anti-dilut
NET LOSS PER SHARE - Anti-dilutive (Details) - shares shares in Thousands | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2,494 | 2,386 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,307 | 948 |
Other warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,187 | 1,438 |
FINANCIAL INSTRUMENTS AND SIG_3
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||||
Cash, cash equivalents and restricted cash | $ 82,403 | $ 41,047 | $ 37,600 | $ 9,955 |
FINANCIAL INSTRUMENTS AND SIG_4
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Summary of changes in the fair value (Details) - Embedded derivative liability $ in Thousands | 6 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning | $ 387 |
Gain from change in fair value | (4) |
Balance at the end | $ 383 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] - Xoma $ in Millions | 1 Months Ended |
Jan. 31, 2022USD ($) | |
Subsequent Event [Line Items] | |
Trigger closing cash payment for patient | $ 2 |
Minimum Duration For Payment Of Fee for Dosing The Patients | 30 days |