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SHARE-BASED COMPENSATION AND WARRANTS | 9 Months Ended
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Mar. 31, 2024
SHARE-BASED COMPENSATION AND WARRANTS |
SHARE-BASED COMPENSATION AND WARRANTS | NOTE 8 — SHARE-BASED COMPENSATION AND WARRANTS Inducement Grant In connection with the hiring of the company’s Chief Financial Officer in January 2024, the Board of Directors granted a stock option exercisable for the purchase of 275,000 shares of the Company’s common stock at an exercise price of $1.02 per share. This stock option is considered an inducement grant (the “Inducement Grant”) pursuant to Nasdaq Listing Rule 5635(c)(4) whereby the underlying shares were not authorized under any of the Company’s stock option plans. The Inducement Grant is exercisable until January 2029 and vests for (i) one-fourth of the option shares on the one-year anniversary of the grant date, and (ii) one thirty-sixth of the remaining option shares shall vest on the same day of each month thereafter until the Inducement Grant is 100% vested. The fair value of the Inducement Grant of $0.2 million was computed using the Black-Scholes-Merton (“BSM”) option pricing model. Stock Option Plans Presented below is a summary of the number of shares outstanding, authorized, and available for future grants under the Company’s stock option plans and the Inducement Grant as of March 31, 2024 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Number of Shares
Description |  | Authorized |  | Outstanding |  | Available
​ | ​ | ​ | ​ | ​ | ​ | ​
2015 Plan |  | 17 |  | 17 |  | —
2016 Plan |  | 123 |  | 123 |  | —
2019 Plan |  | 200 |  | 200 |  | —
2021 Plan | ​ | 10,695 | ​ | 10,293 | ​ | 402
Inducement Grant | ​ | 275 | ​ | 275 | ​ | —
Total |  | 11,310 |  | 10,908 |  | 402
​ ​ 2022 Employee Stock Purchase Plan On June 16, 2022, the Company’s shareholders approved the adoption of the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP provides an opportunity for employees to purchase the Company’s common stock through accumulated payroll deductions. The 2022 ESPP has consecutive offering periods that begin approximately every 6 months commencing on the first trading day on or after July 1 and terminating on the last trading day of the offering period ending on December 31 and commencing on the first trading day on or after January 1 and terminating on the last trading day of the offering period ending on June 30. The 2022 ESPP reserves 0.5 million shares for purchases. There have been no offering periods under the 2022 ESPP through March 31, 2024. ​ ​ Stock Options Outstanding For the nine months ended March 31, 2024, the following table sets forth a summary of the activity with respect to all outstanding options (shares in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Shares |  | Price (1) |  | Term (2)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding, June 30, 2023 |  | 8,745 | ​ | $ | 4.56 | ​ | 8.8
Grants to employees | ​ | 2,482 | ​ | ​ | 1.18 | ​ | ​
Exercises | ​ | (5) | ​ | ​ | 1.92 | ​ | ​
Expired | ​ | (43) | ​ | ​ | 9.49 | ​ | ​
Forfeited | ​ | (271) | ​ | ​ | 2.66 | ​ | ​
Outstanding, March 31, 2024 |  | 10,908 | (3) |  | 3.82 |  | 8.3
Vested, March 31, 2024 |  | 4,374 | (4) |  | 5.59 |  | 7.7
(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.
(3) | As of March 31, 2024, the intrinsic value of outstanding options was approximately $3.6 million.
(4) | As of March 31, 2024, the aggregate intrinsic value of vested stock options was approximately $0.2 million.
​ For the nine months ended March 31, 2024, the aggregate fair value of stock options granted for approximately 2.5 million shares of common stock amounted to $2.3 million or approximately $0.92 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 nine months ended March 31, 2024, the fair value of stock options was estimated on the respective dates of grant, with the following weighted-average assumptions: ​
​ | ​ | ​ | ​ | ​
Market price of common stock on grant date | ​ | $ | 1.18 | ​
Expected volatility |  | ​ | 99 | %
Risk free interest rate |  | ​ | 4.1 | %
Expected term (years) |  | ​ | 5.6 | ​
Dividend yield |  | ​ | 0 | %
​ Share-based compensation expense for the three and nine months ended March 31, 2024 and 2023 is included under the following captions in the unaudited condensed consolidated statements of operations and comprehensive loss (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine Months Ended | ​
​ | ​ | March 31, | ​ | March 31, | ​
​ |  | 2024 |  | 2023 | ​ | 2024 |  | 2023 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Research and development | ​ | $ | 863 | ​ | $ | 849 | ​ | $ | 2,544 | ​ | $ | 2,449 | ​
General and administrative | ​ |  | 1,040 | ​ |  | 1,006 | ​ |  | 3,045 | ​ |  | 3,016 | ​
Total | ​ | $ | 1,903 | ​ | $ | 1,855 | ​ | $ | 5,589 | ​ | $ | 5,465 | ​
​ Unrecognized share-based compensation expense is approximately $13.0 million as of March 31, 2024. This amount is expected to be recognized over a weighted average period of 2.4 years. Pre-Funded Warrants In connection with an underwritten offering in October 2021, the Company issued 1,661,461 pre-funded warrants (“PFWs”) 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 “2021 PFWs”). The 2021 PFWs may be exercised at any time by paying the exercise price of $0.01 per share, subject to certain ownership restrictions. On March 7, 2024, a holder of 2021 PFWs provided notice of cashless exercise of their 1,538,461 2021 PFWs, resulting in the issuance of 1,529,890 shares of common stock on March 11, 2024. No cash proceeds were received by the Company as a result of this exercise. As of March 31, 2024, there are 123,000 of the 2021 PFWs which may be exercised at any time by paying the exercise price of $0.01 per share, subject to certain ownership restrictions. In connection with a registered direct offering in May 2022, the Company issued 1,973,684 Class A PFWs and 10,947,371 Class B PFWs to purchase an aggregate of 12,921,055 shares of common stock at an issuance price of $3.799 per warrant (collectively, the “2022 PFWs”). On October 4, 2023, a holder of Class B PFW’s provided notice of cashless exercise of their 2,800,000 Class B PFW’s, resulting in the issuance of 2,797,404 shares of common stock on October 6, 2023. Subsequently, on March 1, 2024, another investor provided notice of cashless exercise of 1,973,684 Class A PFW’s, resulting in the issuance of 1,972,486 shares of common stock on March 5, 2024. No cash proceeds were received by the Company as a result of either of these exercises. As of March 31, 2024, there are 8,147,371 of the 2022 PFWs which may be exercised at any time by paying the exercise price of $0.001 per share, subject to certain ownership restrictions. As discussed in Note 7, the Company issued 3,000,000 Exchange PWFs on March 8, 2024. As of March 31, 2024, all Exchange PFWs remain outstanding and may be exercised at any time by paying the exercise price of $0.001 per share, subject to certain ownership restrictions. Other Warrants In connection with an equity financing in October 2020, the Company issued warrants entitling the holders to purchase approximately 0.8 million shares of common stock. The warrants are exercisable at $19.50 per share for a period of seven years, may be exercised on a cash or cashless basis at the election of the holders, and the holders are entitled to share in any dividends or distributions payable to holders of common stock on an as-converted basis. In addition, the Company has issued warrants in conjunction with various debt and equity financings and for services. As of March 31, 2024, all of the warrants were vested. These warrants are collectively referred to as the “Other Warrants.” ​ For the nine months ended March 31, 2024, no Other Warrants were granted or exercised. The following table sets forth a summary of all Other Warrants for the nine months ended March 31, 2024 (shares in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Shares |  | Price (1) |  | Term (2)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding, June 30, 2023 |  | 888 |  | $ | 22.10 |  | 4.1
Expirations |  | (27) |  |  | 78.60 |  |
Outstanding, March 31, 2024 |  | 861 |  |  | 20.28 |  | 3.5
(1) | Represents the weighted average exercise price.
(2) | Represents the weighted average remaining contractual term for the number of years until the warrants expire.

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