Document and Entity Information
Document and Entity Information | 3 Months Ended |
Sep. 30, 2017shares | |
Document And Entity Information | |
Entity Registrant Name | BIOVIE INC. |
Entity Central Index Key | 1,580,149 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --06-30 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 94,594,091 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2,017 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
CURRENT ASSETS: | ||
Cash | $ 21,705 | $ 5,140 |
Total Current Assets | 21,705 | 5,140 |
OTHER ASSETS: | ||
Intangible Assets (Net of Amortization) | 1,956,013 | 2,013,357 |
Goodwill | 345,711 | 345,711 |
Total Fixed Assets | 2,301,724 | 2,359,068 |
TOTAL ASSETS | 2,323,430 | 2,364,209 |
CURRENT LIABILITIES: | ||
Accounts Payable and accrued expenses | 467,783 | 470,973 |
Related Party Loan | 10,000 | 35,000 |
Accrued Payroll | 187,500 | 125,000 |
Total Current Liabilities | 665,283 | 630,973 |
LONG TERM LIABILITIES: | ||
Accrued Expenses | 173,333 | 173,334 |
Accrued Payroll | 402,584 | 402,584 |
Total Long Term Liabilities | 575,917 | 575,918 |
TOTAL LIABILITIES | 1,241,200 | 1,206,891 |
STOCKHOLDERS' EQUITY | ||
Preferred stock; $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, $0.0001 par value; 300,000,000 shares authorized; shares issued and 94,594,091 and 91,925,000 shares issued and outstanding, respectively | 9,459 | 9,192 |
Additional paid in capital | 4,070,619 | 3,483,134 |
Accumulated deficit | (2,997,849) | (2,335,009) |
Total Stockholders' Equity | 1,082,229 | 1,157,318 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,323,430 | $ 2,364,209 |
BALANCE SHEETS (Unaudited) (Par
BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common Stock Shares Issued | 94,594,091 | 91,925,000 |
Common stock, shares outstanding | 94,594,091 | 91,925,000 |
STATEMENTS OF OPERATION (Unaudi
STATEMENTS OF OPERATION (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUE: | ||
Sales | ||
COST OF GOODS SOLD | ||
GROSS MARGIN | ||
OPERATING EXPENSES | ||
Amortization | 57,344 | 57,344 |
Research and development expenses | 41,854 | 127,270 |
Payroll expenses | 71,348 | 71,348 |
Professional fees | 453,611 | 93,165 |
Selling, general and administrative expenses | 38,075 | 2,226 |
TOTAL OPERATING EXPENSES | 662,231 | 351,353 |
LOSS FROM OPERATIONS | (662,231) | (351,353) |
OTHER EXPENSE (INCOME) | ||
Interest Expense | 611 | |
Interest income | (1) | (11) |
TOTAL OTHER EXPENSE (INCOME) | 609 | (11) |
NET LOSS | $ (662,841) | $ (351,342) |
NET LOSS PER COMMON SHARE, BASIC AND DILUTED | $ (0.01) | $ 0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 93,301,583 | 87,205,550 |
STATEMENT OF STOCKHOLDERS' EQUI
STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock | Capital in Excess of Par Value | Prepaid Services Paid with Common Sock | Accumulated Deficit | Total |
Beginning Balance at Jun. 30, 2016 | $ 8,716 | $ 2,911,560 | $ (1,004,337) | $ 1,915,939 | |
Beginning Balance (in shares) at Jun. 30, 2016 | 87,160,001 | ||||
Issuance of common stock for services | $ 477 | 479,523 | 479,999 | ||
Issuance of common stock for services, (in shares) | 4,764,999 | ||||
Option vested | 92,051 | 92,051 | |||
Net Loss | (1,330,672) | (1,330,672) | |||
Ending Balance at Jun. 30, 2017 | $ 9,193 | 3,483,134 | (2,335,009) | 1,157,318 | |
Ending Balance (in shares) at Jun. 30, 2017 | 91,925,000 | ||||
Issuance of common stock for services | $ 267 | 574,733 | 575,000 | ||
Issuance of common stock for services, (in shares) | 2,669,091 | ||||
Option vested | 12,752 | 12,752 | |||
Net Loss | (662,841) | (662,841) | |||
Ending Balance at Sep. 30, 2017 | $ 9,460 | $ 4,070,619 | $ (2,997,850) | $ 1,082,229 | |
Ending Balance (in shares) at Sep. 30, 2017 | 94,594,091 |
STATEMENT OF CASH FLOWS (Unaudi
STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (662,841) | $ (351,342) |
Adjustments to reconcile net loss to net cash to cash used by operating activities: | ||
Services paid with common stock | 330,000 | |
Amortization of intangible assets | 57,344 | 57,344 |
Share based compensation expense | 12,751 | 8,848 |
Changes in operating assets and liabilities: | ||
Increase in prepaid expenses | 6,982 | |
Accounts Payable | (3,190) | 87,656 |
Accrued Payroll | 62,500 | 62,500 |
Net cash used by operating activities | (203,436) | (128,012) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net cash used by investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from loan payable | (25,000) | 8,000 |
Proceeds from issuance of common stock | 245,001 | 5,000 |
Net cash provided by financing activities | 220,001 | 13,000 |
Net increase (decrease) in cash | 16,565 | (115,012) |
Cash, beginning of period | 5,140 | 123,757 |
Cash, end of period | 21,705 | 8,745 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | ||
Cash paid for income tax |
Background Information
Background Information | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Background Information | 1. Background Information BioVie Inc. is a clinical-stage company pursuing the discovery, development, and commercialization of innovative drug therapies. The Company is currently focused on developing and commercializing BIV201, a novel approach to the treatment of ascites due to chronic liver cirrhosis. In March 2017, BioVie received notification from the FDA that it could initiate a Phase 2a US clinical trial. In April the Company signed a Cooperative Research and Development Agreement (CRADA) with the McGuire Research Institute/VA in Richmond, VA, and began dosing patients with BIV201 in September 2017. BIV201 has the potential to improve the health of thousands of patients suffering from life-threatening complications of liver cirrhosis due to hepatitis, NASH, and alcoholism. It has Orphan Drug designation for the most common of these complications, ascites, which represents a significant unmet medical need. The FDA has never approved any drug specifically for treating ascites. For more information about BioVie and BIV201, please visit our website: www.biovieinc.com. The BIV201 development program began at LAT Pharma LLC. On April 11, 2016, the Company acquired LAT Pharma LLC and the rights to its BIV201 development program. We currently own all development and marketing rights to our drug candidate, except as noted previously, the Company and PharmaIN have exchanged small (low single-digit) ownership rights to each other’s ascites drug development programs. The Company has an issued US Patent covering the use of BIV201 for the treatment of ascites patients in the outpatient setting using ambulatory pump infusion, and has filed a patent application for its drug candidate in Japan, as well as a PCT in Europe. The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the company’s business plan. |
Going Concern
Going Concern | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Going Concern | 2. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three months ended September 30, 2017, the Company had a net loss of $662,841. As of September 30, 2017, the Company has not earned any revenues. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of public equity securities. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes and proceeds from sub-licensing agreements until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 3. Significant Accounting Policies Unaudited Interim Financial Statements The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our cash balances were fully insured at September 30, 2017. Financial Instruments The Company’s financial instruments include cash and accounts payable. The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items. Research and Development Research and development costs are charged to operations when incurred and are included in operating expenses. The Company expensed $41,854 for research and development for the quarter ended September 30, 2017. Income Taxes Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending on the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company follows the provisions of FASB ASC 740-10 “ Uncertainty in Income Taxes Earnings (Loss) per Share Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. For the quarter ended September 30, 2017 all outstanding options have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. Stock-based Compensation The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). Fair Value Measurements In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2013 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued payroll. Recent accounting pronouncements The Company has reviewed recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC and did not or are not believed by management to have a material impact on the Company’s financial statements. |
Related Party Loan
Related Party Loan | 3 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Loan | 4. Related Party Loan LAT Pharma was given a zero-interest bearing loan by the company’s General Partner, Jonathan Adams in the amount of $5,000 in August 2015 and $5,000 in November 2015. The total of $10,000 was outstanding when the Company merged with LAT Pharma. On June 16 th th |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Office Lease On January 1, 2014 the Company executed a lease agreement with Cummings Properties for the company’s office of 270 square feet at 100 Cummings Center, Suite 247-C, Beverly, MA 01915. The lease is for a term of five years from January 1, 2014 to December 30, 2018 and requires monthly payments of $369. Employment Agreements On April 11, 2016 the Company entered into employment agreement with CEO Jonathan Adams. The Company’s agreement provides for a three-year term with minimum annual base salary of $250,000 per year. Effective April 11, 2016, the (previous) CEO/CFO resigned. On September 24, 2017, the Board of Directors of BioVie Inc. appointed R. Richard Wieland II as an interim Chief Financial Officer of BioVie. Mr. Wieland is an experienced executive in the healthcare field, having previously served as Chief Financial Officer of several other biopharmaceutical companies. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. Due to the valuation allowance for deferred tax assets, as noted below, there were no net deferred tax benefit or expense for the quarter ended September 30, 2017. There is no current or deferred income tax expense or benefit allocated to continuing operations for the quarter ended September 30, 2017. The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows: September 30, 2017 June 30, 2017 Tax expense (benefit) at U.S. statutory rate $ (69,168 ) $ (528,229 ) State income tax expense (benefit), net of federal benefit $ (10,172 ) $ (42,074 ) Effect of non-deductible expenses $ — $ — Other $ — $ — Change in valuation allowance $ 79,340 $ 570,303 $ — $ — The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at September 30, 2017 were as follows: Deferred tax assets (liability), noncurrent: Net operating loss $ 1,041,491 Valuation allowance (1,041,491 ) $ — Change in valuation allowance: Balance, June 30, 2017 $ 962,151 Increase in valuation allowance 79,340 Balance, September 30, 2017 1,041,491 Since management of the Company believes that it is more likely than not that the net deferred tax assets will not provide future benefit, the Company has established a 100 percent valuation allowance on the net deferred tax assets as of September 30, 2017. As of September 30, 2017, the Company had federal and state net operating loss carry-forwards totaling approximately $1,800,000 which begin expiring in 2022. |
Purchase of LAT Pharma
Purchase of LAT Pharma | 3 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Purchase of LAT Pharma | 7. Purchase of LAT Pharma On April 11, 2016, the Company entered into and consummated an Agreement and Plan of Merger (the “Merger Agreement”), with LAT Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition”) and LAT Pharma, LLC an Illinois limited liability company (“LAT”). Pursuant to the terms of the Merger Agreement, Acquisition merged with and into LAT in a statutory triangular merger (the “Merger”) with LAT surviving as a wholly-owned subsidiary of the Company. As consideration for the Merger, the Company issued the interest holders of LAT (the “LAT Holders”) an aggregate of 39,820,000 shares of our Common Stock issued to the LAT Holders in accordance with their pro rata ownership of LAT membership interests prior to the Merger. Following the Merger, the Registrant will continue the development of LAT’s lead clinical therapeutic candidate Continuous low-dose Infusion (CI) Terlipressin. Immediately prior to the Merger, the Company had 87,210,000 shares of Common Stock issued and outstanding. In connection with the Merger, certain shareholders of the Company collectively agreed to retire and cancel an aggregate of 39,869,999 shares of Common Stock. Following the consummation of the Merger, the issuance of the Merger Shares of the 39,820,000 shares of Common Stock, the Company had 87,160,001 shares of Common Stock issued and outstanding and the LAT Holders beneficially own 39,820,000 shares or approximately forty-six percent (46%) of such issued and outstanding Common Stock. Under the purchase method of accounting, the transaction was valued for accounting purposes at $2,389,200, which was the estimated fair value of the consideration paid by the Company. The estimate was based on the consideration paid of 39,820,000 shares of common stock valued based on the closing price on 04/11/2016 of $0.06 per share. The assets and liabilities of LAT Pharma, Inc. were recorded at their respective fair values as of the closing date of the Merger Agreement, and the following table summarizes these values based on the balance sheet at April 11, 2016. $ 2,303,682 Assets Purchased 260,193 Liabilities Assumed 2,043,489 Net Assets Purchased 2,389,200 Purchase Price $ 345,711 Goodwill from Purchase Intangible asset detail $ 2,293,770 Intangible Intellectual Property 345,711 Goodwill 2,639,481 Intangible Asset from Purchase Under the 338(h)(10) election, intangibles related to the acquisition of LAT Pharma will be fully deductible for tax purposes. The intangible intellectual property is amortized over 10 years. September 2017 September 2016 Intangible Assets subject to Amortization $ 2,293,770 $ 2,293,770 Amortization Expense for Quarter $ 57,344 $ 57,344 Accumulated Amortization at Quarter end $ 337,757 $ 108,380 The estimated Amortization expense for each of the five succeeding fiscal years will be approximately $229,300 per year. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | 8. Stock Options In connection with the employment agreement signed with the Chief Executive Officer on April 11, 2016, Jonathan Adams received options to acquire 3 million shares exercisable at $0.06 per share, the closing price on that date. These Options Group A shall become vested and exercisable (i) as to 1 million shares on April 11, 2017, (ii) as to 1 million shares on April 11, 2018, and (iii) as to 1 million shares on April 11, 2019. The fair market value of the stock options is estimated using the Black Scholes valuation model and the Company uses the following methods to determine its underlying assumptions: expected volatilities are based on the historical volatilities of 3 comparable companies of the daily closing price of their respective common stock; the expected term of options granted is based on the average time outstanding method; and the risk free interest rate is based on the US Treasury bonds issued with similar life terms to the expected life of the grant. The following key assumptions were used in the valuation model to value stock option grants for each respective period: Valuation Date 4/11/2016 4/11/2016 4/11/2016 Stock Price $ 0.06 $ 0.06 $ 0.06 Exercise Price $ 0.06 $ 0.06 $ 0.06 Term (expected term for options) 1.00 2.00 3.00 Volatility 56.49 % 58.45 % 97.82 % Annual Rate of Quarterly Dividends 0.00 % 0.00 % 0.00 % Discount Rate - Bond Equivalent Yield 0.53 % 0.70 % 0.85 % Call Option Value ($Millions) $ 0.01 $ 0.02 $ 0.04 Fair Value $ 13,467 $ 19,523 $ 36,489 The Company issued stock options to consultants and board of directors for services provided to the company. The following key assumptions were used in the valuation model to value stock option grants for each respective period: Valuation Date 11/16/2016 12/18/2016 03/14/2017 05/02/2017 09/21/2017 Stock Price $ 0.25 $ 0.21 $ 0.22 $ 0.23 $ 0.20 Exercise Price $ 0.25 $ 0.21 $ 0.22 $ 0.23 $ 0.20 Term (expected term for options) 2.000 2.000 2.000 2.000 2.000 Volatility 43.12% 43.12% 40.02% 36.76% 32.75% Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00% Discount Rate - Bond Equivalent Yield 1.02% 1.15% 1.40% 1.27% 1.45% Call Option Value ($Millions) $ 0.06 $ 0.05 $ 0.05 $ 0.05 $ 0.39 Fair Value $ 30,919 $ 15,646 $ 5,143 $ 4,951 $ 3,903 Stock option transactions under the Company’s plans for the period ended September 30, 2017 is summarized below: Weighted Weighed- Average Aggregate Average Remaining Intrinsic Shares Exercise Contractual Value Options (Thousands) Price Term (Thousands) Outstanding at July 1, 2016 3,000 0.06 2 - Granted 1,000 0.24 2 - Exercised - - - - Forfeited - - - - Outstanding at June 30, 2017 4,000 0.10 2 - Granted 100 0.20 2 - Exercised - - - - Forfeited - - - - Outstanding at September 30, 2017 4,100 0.11 2 - The compensation expense for the quarter ended September 30, 2017 includes $8,848 related to the stock options described above. The legal and professional expenses for the quarter ended September 30, 2017 includes $3,903 related to the stock options described above. Offerings of Common Stock and Warrants In September 2016, the Company sold and issued an aggregate of 49,999 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $5,000. The purchase price for the common stock was $0.10 per share. In October 2016, the Company sold and issued an aggregate of 225,000 shares of common stock and warrants to purchase 112,500 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $45,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance. In November 2016, the Company sold and issued an aggregate of 250,000 shares of common stock and warrants to purchase 125,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $50,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance. In December 2016, the Company sold and issued an aggregate of 100,000 shares of common stock and warrants to purchase 50,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $20,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance. In January 2017, the Company, entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”) which provides that, on the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $12.0 million of shares of the Company’s common stock over the 30-month term of the Purchase Agreement (the “Aspire Equity Line”). On execution of the Purchase Agreement, the Company agreed to sell to Aspire Capital 1,000,000 shares of common stock and warrants to purchase 500,000 shares of common stock for proceeds of $200,000. The Warrant Shares will each have a five-year term and will be exercisable at $0.50 per share. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the “Registration Rights Agreement”), in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended (the “Securities Act”), registering the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the Purchase Agreement. Under the Purchase agreement, after the Securities and Exchange Commission (the “SEC”) has declared effective the registration statement referred to above, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 100,000 shares of the Company’s common stock per business day, up to $12.0 million of the Company’s common stock in the aggregate at a per share price (the “Purchase Price”) equal to the lesser of: the lowest sale price of the Company’s common stock on the purchase date; or • the arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date. In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount equal to 100,000 shares and the closing sale price of our stock is equal to or greater than $0.30 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date. The Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed. The Purchase Agreement provides that the Company and Aspire Capital shall not affect any sales under the Purchase Agreement on any purchase date where the closing sale price of the Company’s common stock is less than $0.10. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued to Aspire Capital 2,400,000 shares of the Company’s common stock (the “Commitment Shares”). The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the Purchase Agreement. Any proceeds that the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes. In March 2017, the Company sold and issued an aggregate of 500,000 shares of common stock and warrants to purchase 250,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $100,000. The purchase price for the common stock and warrants was $0.20 per share. The warrants are exercisable at an exercise price of $0.50 at any time from date of issuance until 5 years from the date of issuance. In May 2017, the Company sold and issued an aggregate of 240,000 shares of common stock and warrants to purchase 120,000 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $60,000. The purchase price for the common stock and warrants was $0.25 per share. The warrants are exercisable at an exercise price of $0.75 at any time from date of issuance until 5 years from the date of issuance. In August 2017, the Company sold and issued an aggregate of 886,364 shares of common stock and warrants to purchase 443,182 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $195,000. The purchase price for the common stock and warrants was $0.22 per share. The warrants are exercisable at an exercise price of $0.60 at any time from date of issuance until 5 years from the date of issuance. In August 2017, the Company issued 1,500,000 shares of common stock to Aspire Capital in a private placement transaction in exchange for services. The shares were valued at $0.22 per share, and the value of the services were $330,000. Between July 2017 and September 2017, the Company sold an aggregate of 250,000 shares of common stock in transactions under the Aspire Equity Line for aggregate gross proceeds of $50,000. The average purchase price for the common stock was $0.20 per share. In August 2017, the Company issued an aggregate of 32,727 shares of common stock to compensate certain initial investors who purchased common stock at a $0.25 share price in a Series C offering prior to a reduction in the offering price to $0.22 per share. The following table summarizes the warrants that have been issued: Aggregate Number of Warrants Issued Exercise Price Issue Date Expiration Date 5,000,000 $0.50 April 2013 April 2018 112,500 $0.50 October 2016 October 2021 125,000 $0.50 November 2016 November 2021 50,000 $0.50 December 2016 December 2021 500,000 $0.50 January 2017 January 2022 250,000 $0.50 March 2017 March 2022 120,000 $0.60 May 2017 May 2022 79,545 $0.60 July 2017 July 2022 363,636 $0.60 August 2017 August 2022 |
Renegotiated Debt
Renegotiated Debt | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Renegotiated Debt | 9. Renegotiated Debt On March 23, 2017, Barrett Ehrlich agreed to defer the payment of his consulting fee debt of $173,333.33 until December 31, 2019, through the issuance of a Promissory note. The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019. The consulting fee debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full. On March 23, 2017, Elliot Ehrlich agreed to forgive 50% of his salary debt of $444,056.25. The adjusted salary debt is $222,028.13. Elliot Ehrlich also agreed to defer the payment of his salary debt of $222,028.13 until December 31, 2019, through the issuance of a Promissory note. The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019. The salary debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet and the salary debt forgiven has been reflected on the income statement as other income. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full. On March 23, 2017, Jonathan Adams agreed to defer the payment of his salary debt of $180,555.64 until December 31, 2019, through the issuance of a Promissory note. The promissory note does not carry any interest charge as long as the amount is paid in full before December 31, 2019. The salary debt has thereby been reclassified from a current liability to a long-term liability on the balance sheet. Any portion of the balance due under the note that remains unpaid after December 31, 2019 will accrue interest at a rate of 5% per annum until paid in full. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Event In October 2017, the Company sold and issued an aggregate of 227,273 shares of common stock and warrants to purchase 113,636 shares of common stock in a private placement transaction for aggregate gross proceeds of approximately $50,000. The purchase price for the common stock and warrants was $0.22 per share. The warrants are exercisable at an exercise price of $0.60 at any time from date of issuance until 5 years from the date of issuance. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. |
Basis of Presentation | Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash | Cash Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our cash balances were fully insured at September 30, 2017. |
Financial Instruments | Financial Instruments The Company’s financial instruments include cash and accounts payable. The carrying amounts of cash and accounts payable approximate their fair value, due to the short-term nature of these items. |
Research and Development | Research and Development Research and development costs are charged to operations when incurred and are included in operating expenses. The Company expensed $41,854 for research and development for the quarter ended September 30, 2017. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending on the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company follows the provisions of FASB ASC 740-10 “ Uncertainty in Income Taxes |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding and dilutive options outstanding during the year. For the quarter ended September 30, 2017 all outstanding options have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. |
Stock-based Compensation | Stock-based Compensation The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). |
Fair Value Measurements | Fair Value Measurements In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2013 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued payroll. |
Recent accounting pronouncements | Recent accounting pronouncements The Company has reviewed recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC and did not or are not believed by management to have a material impact on the Company’s financial statements. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of the federal statutory income tax rate to income tax expense expense | The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows: September 30, 2017 June 30, 2017 Tax expense (benefit) at U.S. statutory rate $ (69,168 ) $ (528,229 ) State income tax expense (benefit), net of federal benefit $ (10,172 ) $ (42,074 ) Effect of non-deductible expenses $ — $ — Other $ — $ — Change in valuation allowance $ 79,340 $ 570,303 $ — $ — |
Schedule of gross amounts of deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at September 30, 2017 were as follows: Deferred tax assets (liability), noncurrent: Net operating loss $ 1,041,491 Valuation allowance (1,041,491 ) $ — Change in valuation allowance: Balance, June 30, 2017 $ 962,151 Increase in valuation allowance 79,340 Balance, September 30, 2017 1,041,491 |
Purchase of LAT Pharma (Tables)
Purchase of LAT Pharma (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Purchase Of Lat Pharma Tables | |
Schedule of Assets and Liabilities of LAT Pharma, Inc. | The assets and liabilities of LAT Pharma, Inc. were recorded at their respective fair values as of the closing date of the Merger Agreement, and the following table summarizes these values based on the balance sheet at April 11, 2016. $ 2,303,682 Assets Purchased 260,193 Liabilities Assumed 2,043,489 Net Assets Purchased 2,389,200 Purchase Price $ 345,711 Goodwill from Purchase Intangible asset detail $ 2,293,770 Intangible Intellectual Property 345,711 Goodwill 2,639,481 Intangible Asset from Purchase |
Schedule of intangible intellectual property amortized | The intangible intellectual property is amortized over 10 years. September 2017 September 2016 Intangible Assets subject to Amortization $ 2,293,770 $ 2,293,770 Amortization Expense for Quarter $ 57,344 $ 57,344 Accumulated Amortization at Quarter end $ 337,757 $ 108,380 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Tables | |
Schedule of Stock option grants for each respective period | The following key assumptions were used in the valuation model to value stock option grants for each respective period: Valuation Date 4/11/2016 4/11/2016 4/11/2016 Stock Price $ 0.06 $ 0.06 $ 0.06 Exercise Price $ 0.06 $ 0.06 $ 0.06 Term (expected term for options) 1.00 2.00 3.00 Volatility 56.49 % 58.45 % 97.82 % Annual Rate of Quarterly Dividends 0.00 % 0.00 % 0.00 % Discount Rate - Bond Equivalent Yield 0.53 % 0.70 % 0.85 % Call Option Value ($Millions) $ 0.01 $ 0.02 $ 0.04 Fair Value $ 13,467 $ 19,523 $ 36,489 The Company issued stock options to consultants and board of directors for services provided to the company. The following key assumptions were used in the valuation model to value stock option grants for each respective period: Valuation Date 11/16/2016 12/18/2016 03/14/2017 05/02/2017 09/21/2017 Stock Price $ 0.25 $ 0.21 $ 0.22 $ 0.23 $ 0.20 Exercise Price $ 0.25 $ 0.21 $ 0.22 $ 0.23 $ 0.20 Term (expected term for options) 2.000 2.000 2.000 2.000 2.000 Volatility 43.12% 43.12% 40.02% 36.76% 32.75% Annual Rate of Quarterly Dividends 0.00% 0.00% 0.00% 0.00% 0.00% Discount Rate - Bond Equivalent Yield 1.02% 1.15% 1.40% 1.27% 1.45% Call Option Value ($Millions) $ 0.06 $ 0.05 $ 0.05 $ 0.05 $ 0.39 Fair Value $ 30,919 $ 15,646 $ 5,143 $ 4,951 $ 3,903 Stock option transactions under the Company’s plans for the period ended September 30, 2017 is summarized below: Weighted Weighed- Average Aggregate Average Remaining Intrinsic Shares Exercise Contractual Value Options (Thousands) Price Term (Thousands) Outstanding at July 1, 2016 3,000 0.06 2 - Granted 1,000 0.24 2 - Exercised - - - - Forfeited - - - - Outstanding at June 30, 2017 4,000 0.10 2 - Granted 100 0.20 2 - Exercised - - - - Forfeited - - - - Outstanding at September 30, 2017 4,100 0.11 2 - The following table summarizes the warrants that have been issued: Aggregate Number of Warrants Issued Exercise Price Issue Date Expiration Date 5,000,000 $0.50 April 2013 April 2018 112,500 $0.50 October 2016 October 2021 125,000 $0.50 November 2016 November 2021 50,000 $0.50 December 2016 December 2021 500,000 $0.50 January 2017 January 2022 250,000 $0.50 March 2017 March 2022 120,000 $0.60 May 2017 May 2022 79,545 $0.60 July 2017 July 2022 363,636 $0.60 August 2017 August 2022 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Notes to Financial Statements | |||
Net Loss | $ 662,841 | $ 351,342 | $ 1,330,672 |
Related Party Loan (Details Nar
Related Party Loan (Details Narrative) - Jonathan Adams [Member] - USD ($) | Jun. 16, 2017 | Nov. 30, 2015 | Aug. 31, 2015 | Sep. 30, 2017 |
Loan Received | $ 25,000 | $ 5,000 | $ 5,000 | |
Loan Repaid | $ 2,500 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 1 Months Ended |
Jun. 30, 2017USD ($) | |
Notes to Financial Statements | |
Lease rental | $ 369 |
Lease term (in years) | 5 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Tax expense (benefit) at U.S. statutory rate | $ (69,168) | $ (146,889) |
State income tax expense (benefit), net of federal benefit | (10,172) | (21,659) |
Effect of non-deductible expenses | ||
Other | ||
Change in valuation allowance | 79,340 | 168,548 |
Total |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
Deferred tax assets (liability) | ||
Net operating loss | $ 1,041,491 | |
Valuation allowance | (1,041,491) | $ (962,151) |
Total | ||
Federal and State net operating loss carry-forwards | $ 1,800,000 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jun. 30, 2016 | |
Change in valuation allowance: | ||
Beginning Balance | $ 962,151 | |
Increase in valuation allowance | 79,340 | $ 168,548 |
Ending Balance | $ 1,041,491 |
Purchase of LAT Pharma (Details
Purchase of LAT Pharma (Details) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Apr. 11, 2016 |
Goodwill | $ 345,711 | $ 345,711 | ||
Intangible Intellectual Property | $ 2,293,710 | $ 2,293,770 | ||
LAT Pharma, Inc. [Member] | ||||
Assets Purchased | $ 2,303,682 | |||
Liabilities Assumed | 260,193 | |||
Net Assets Purchased | 2,043,489 | |||
Purchase Price | 2,389,200 | |||
Goodwill | 345,711 | |||
Intangible Intellectual Property | 2,293,770 | |||
Intangible Asset from Purchase | $ 2,639,481 |
Purchase of LAT Pharma (Detai28
Purchase of LAT Pharma (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jun. 30, 2017 | |
Purchase Of Lat Pharma Details 2 | ||||
Intangible Assets subject to Amortization | $ 2,293,770 | $ 2,293,710 | ||
Amortization Expense | $ 57,344 | $ 57,344 | 57,344 | |
Accumulated Amortization | $ 108,380 | $ 337,757 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jun. 30, 2016 | |
Stockholders Equity Details | ||
Option Outstanding at beginning of year | 4,000 | 3,000 |
Option Granted | 100 | 1,000 |
Option Exercised | ||
Option Forfeited | ||
Option Outstanding at end of year | 4,100 | 4,000 |
Outstanding Weighted Average Exercise Price at the beginning | $ 0.10 | $ .06 |
Weighted Average Exercise Price, Granted | .20 | .24 |
Outstanding Weighted Average Exercise Price at the end | $ .11 | $ .10 |
Weighted Average Remaining Contractual Term (in years) | 2 years | 2 years |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) | Sep. 21, 2017 | May 02, 2017 | Mar. 14, 2017 | Dec. 18, 2016 | Nov. 16, 2016 | Apr. 11, 2016 |
Equity Option [Member] | ||||||
Stock Price | $ .20 | $ 0.23 | $ 0.22 | $ 0.21 | $ 0.25 | $ 0.06 |
Exercise Price | $ .20 | $ 0.23 | $ 0.22 | $ 0.21 | $ 0.25 | $ 0.06 |
Term | 2 years | 2 years | 2 years | 2 years | 2 years | 1 year |
Volatility | 32.75% | 36.76% | 40.02% | 43.12% | 43.12% | 56.49% |
Annual Rate of Quarterly Dividends | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Discount Rate - Bond Equivalent Yield | 1.45% | 1.27% | 1.40% | 1.15% | 1.02% | 0.53% |
Call Option Value | $ 390,000 | $ 500,000 | $ 500,000 | $ 500,000 | $ 600,000 | $ 100,000 |
Fair Value | $ 3,903 | $ 4,951 | $ 5,143 | $ 15,646 | $ 30,919 | $ 13,467 |
StockOptionTwoMember | ||||||
Stock Price | $ 0.06 | |||||
Exercise Price | $ 0.06 | |||||
Term | 3 years | |||||
Volatility | 97.82% | |||||
Annual Rate of Quarterly Dividends | 0.00% | |||||
Discount Rate - Bond Equivalent Yield | 0.85% | |||||
Call Option Value | $ 400,000 | |||||
Fair Value | $ 36,489 | |||||
Stock Option [Member] | ||||||
Stock Price | $ 0.06 | |||||
Exercise Price | $ 0.06 | |||||
Term | 2 years | |||||
Volatility | 58.45% | |||||
Annual Rate of Quarterly Dividends | 0.00% | |||||
Discount Rate - Bond Equivalent Yield | 0.70% | |||||
Call Option Value | $ 200,000 | |||||
Fair Value | $ 19,523 |