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Stockholders' Equity | 6 Months Ended
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Dec. 31, 2019
Stockholders' Equity Note [Abstract] |
STOCKHOLDERS' EQUITY | NOTE 9 - STOCKHOLDERS' EQUITY Common Stock During the six months ended December 31, 2019 and the years ended June 30, 2019 and 2018, the Company issued 42,644, 24,991, and 4,437 shares of common stock for cashless exercise of 88,751, 25,004, and 4,443 warrants, respectively. During the six months ended December 31, 2019, the Company issued 61,484 shares of common stock for cashless exercise of 67,578 options. During the six months ended December 31, 2019, the Company closed on a private placement of 3,833,334 shares of common stock. The price per share was $30.00 to the public (with a price to the underwriters of $28.00 per share). The net proceeds from the closing was $108,621,733. Approximately, $478,000 of legal and professional fees were incurred in relation to the closing. The Company also closed on a private placement of 117,965 shares for $7.00 per share and net proceeds of $825,749 during the 3rd calendar quarter of 2019. During the year ended June 30, 2019, the Company closed on private placements of securities pursuant to Unit Purchase Agreements and Subscription Agreements, each dated as shown below. The price per unit (comprising one common stock and a 5 year warrant to purchase 2.60 or 2.00 of a share of common stock) was $3.60, $5.60 or $6.00. The Company issued an aggregate of 3,975,115 shares of common stock to investors in these closings, for net proceeds of $17,839,656. Approximately $79,000 of legal costs were incurred that were not allocated to the individual closings.
Date of closing |  | Common Stock Issued |  |  | Warrants issued |  |  | Unit Price |  |  | Net proceeds |  |  | Warrant exercise price |  |  | Warrant coverage |
October 12, 2018 |  |  | 501,027 |  |  |  | 325,668 |  |  | $ | 3.60 |  |  | $ | 1,630,991 |  |  | $ | 6.00 |  |  |  | .65 |
October 18, 2018 |  |  | 410,084 |  |  |  | 266,555 |  |  | $ | 3.60 |  |  | $ | 1,287,007 |  |  | $ | 6.00 |  |  |  | .65 |
November 2, 2018 |  |  | 374,864 |  |  |  | 243,662 |  |  | $ | 3.60 |  |  | $ | 1,215,242 |  |  | $ | 6.00 |  |  |  | .65 |
December 5, 2018 |  |  | 334,694 |  |  |  | 217,550 |  |  | $ | 3.60 |  |  | $ | 1,083,307 |  |  | $ | 6.00 |  |  |  | .65 |
February 12, 2019 |  |  | 201,389 |  |  |  | 130,903 |  |  | $ | 3.60 |  |  | $ | 725,000 |  |  | $ | 6.00 |  |  |  | .65 |
March 27, 2019 |  |  | 178,572 |  |  |  | 89,286 |  |  | $ | 5.60 |  |  | $ | 1,000,000 |  |  | $ | 9.00 |  |  |  | .50 |
May 14, 2019 |  |  | 569,083 |  |  |  | 284,541 |  |  | $ | 6.00 |  |  | $ | 3,168,865 |  |  | $ | 9.00 |  |  |  | .50 |
June 14, 2019 |  |  | 612,914 |  |  |  | 306,456 |  |  | $ | 6.00 |  |  | $ | 3,274,331 |  |  | $ | 9.00 |  |  |  | .50 |
June 20, 2019 |  |  | 720,799 |  |  |  | 360,399 |  |  | $ | 6.00 |  |  | $ | 4,059,050 |  |  | $ | 9.00 |  |  |  | .50 |
June 28, 2019 |  |  | 71,689 |  |  |  | 35,845 |  |  | $ | 6.00 |  |  | $ | 395,863 |  |  | $ | 9.00 |  |  |  | .50 |
Total |  |  | 3,975,115 |  |  |  | 2,260,865 |  |  |  |  |  |  | $ | 17,839,656 |  |  |  |  |  |  |  |  |
Approximately $177,000 of the June 28 financing was in Other Receivable at June 30, 2019 and was received in July, 2019. The October 12, 2018 and October 18, 2018 financings represented an Equity Financing as defined in the Convertible Promissory Note agreement. As a result of the October 12, 2018 and October 18, 2018 financings, the Company's outstanding 7% Convertible Promissory Notes and accumulated interest converted into 2,682,917 shares of common stock. During the six months ended December 31, 2019, and years ended June 30, 2019 and 2018, the Company issued 0, 0 and 938 shares of common stock for issuances of restricted common stocks, respectively. Placement Agent Warrants During the year ended June 30, 2019, the Company issued an aggregate of 357,396 warrants to the placement agent in connection with the closings. The agent warrants have an exercise price between $3.96 and $9.00, are non-cancellable, vest upon issuance and expire on the fifth anniversary of the warrant date of issuance. Warrants have a five year term and an aggregate fair value of approximately $1,809,535 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rates between 1.74-3.09% (2) expected life of 5 years, (3) expected volatility between 100.7-103.4%, and (4) zero expected dividends. Stock-based compensation - options The Company uses the simplified method for share-based compensation to estimate the expected term for employee option awards for share-based compensation in its option-pricing model. Prior to the adoption of ASU 2018-07 on October 1, 2018, the Company used the contractual term for non-employee options to estimate the expected term, for share-based compensation in its option-pricing model. On December 19, 2019, the Company granted employees options to purchase a total of 1,295,000 shares of common stock. The options have a ten-year term and have an exercise price of $43.47 and vest over 4 years. The options have an aggregate fair value of $46,904,043 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.79% (2) expected life of 6.25 years, (3) expected volatility of 108.2%, and (4) zero expected dividends. On December 19, 2019, the Company granted a consultant options to purchase a total of 10,000 shares of common stock. The options have a ten-year term and have an exercise price of $43.47 and vest immediately. The options have an aggregate fair value of $338,992 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.73% (2) expected life of 5 years, (3) expected volatility of 107.4%, and (4) zero expected dividends. On April 1, 2019, the Company granted various employees options to purchase a total of 37,500 shares of common stock. The options have a ten-year term and have an exercise price of $7.04 and vest over 4 years. The options have an aggregate fair value of $214,000 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.37% (2) expected life of 6.25 years, (3) expected volatility of 101.5%, and (4) zero expected dividends. On December 20, 2018, the Company granted various employees options to purchase a total of 675,000 shares of common stock. The options have a ten-year term and have an exercise price of $4.60 and vest over 4 years. The options have an aggregate fair value of $2,500,000 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.69% (2) expected life of 6.25 years, (3) expected volatility of 102.3%, and (4) zero expected dividends. During the year ended June 30, 2018, the Company granted employees options to purchase a total of 662,500 shares of common stock. The options have a ten-year term and have an exercise price ranging from $3.20 to $3.52 per share. 612,500 options vest at a rate of 6.25% each quarter over 4 years. 50,000 options vest on the accomplishment of a clinical trial event. During the year ended June 30, 2019, the Company recorded approximately $133,000 of compensation expense based on the probably of the clinical trial event occurring. The fair value of the options on the grant date ranges from $2.60 to $2.84 per share using the Black-Scholes Option pricing model. A summary of the changes in options outstanding for the periods ended December 31, 2019, June 30, 2019 and 2018 is as follows:
|  | Number of Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Outstanding and expected to vest at June 30, 2017 |  |  | 139,997 |  |  | $ | 25.64 |  |  |  | 6.7 |  |  | $ | - |
Granted |  |  | 662,500 |  |  |  | 3.28 |  |  |  | 9.3 |  |  |  | 511,000 |
Forfeited |  |  | (35,277 | ) |  |  | 37.00 |  |  |  | - |  |  |  | - |
Outstanding and expected to vest at June 30, 2018 |  |  | 767,220 |  |  | $ | 5.80 |  |  |  | 8.8 |  |  | $ | 511,000 |
Granted |  |  | 712,500 |  |  |  | 4.73 |  |  |  | 9.5 |  |  |  | - |
Forfeited |  |  | (6,406 | ) |  |  | - |  |  |  | - |  |  |  | - |
Outstanding and expected to vest at June 30, 2019 |  |  | 1,473,314 |  |  | $ | 5.18 |  |  |  | 8.6 |  |  | $ | 4,668,153 |
Granted |  |  | 2,205,000 |  |  |  | 29.32 |  |  |  | 9.8 |  |  |  | - |
Exercised |  |  | (62,712 | ) |  |  | - |  |  |  | - |  |  | $ | - |
Outstanding and expected to vest at December 31, 2019 |  |  | 3,615,602 |  |  | $ | 19.96 |  |  |  | 9.2 |  |  | $ | 74,837,043 |
Options exercisable at December 31, 2019 |  |  | 632,301 |  |  | $ | 7.83 |  |  |  | 7.7 |  |  | $ | 19,924,698 |
At December 31, 2019, the Company has unrecognized stock-based compensation expense of approximately $54,814,000 related to unvested stock options over the weighted average remaining service period of 3.86 years. The weighted average fair value of options granted during the six months ended December 31, 2019 and 2018, and the years ended June 30, 2019 and 2018 was approximately $29.32, $4.60 (unaudited), $3.84 and $2.64 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following assumptions:
|  |  |  |  | (Unaudited) |  |  |  |  |  |  |
|  | Six Months Ended |  |  | Six Months Ended |  |  | Year ended |  |  | Year ended |
|  | December 31, |  |  | December 31, |  |  | June 30, |  |  | June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Risk free interest rate |  |  | 1.73 to 1.79 | % |  |  | 2.69 | % |  |  | 2.37 to 2.69 | % |  |  | 2.14 to 2.61 | %
Dividend yield |  |  | 0 | % |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
Volatility |  |  | 107.4-108.2 | % |  |  | 102.3 | % |  |  | 101.5-102.3 | % |  |  | 99.9-101.6 | %
Expected term (in years) |  |  | 5 to 6.25 |  |  |  | 6.25 |  |  |  | 6.25 |  |  |  | 6.25 |
Stock-based compensation – restricted common stock A summary of the changes in outstanding restricted stocks during the periods ended December 31, 2019, June 30, 2019 and 2018 is as follows:
|  | Number of Shares |  |  | Weighted Average Fair Value Per Share |
Outstanding and expected to issue at June 30, 2017 |  |  | 2,188 |  |  | $ | 61.00 |
Issued |  |  | (938 | ) |  | $ | 61.00 |
Forfeited |  |  | (1,250 | ) |  | $ | 61.00 |
Outstanding and vested at June 30, 2018 |  |  | - |  |  | $ | - |
Issued |  |  | - |  |  | $ | - |
Forfeited |  |  | - |  |  | $ | - |
Outstanding and vested at June 30, 2019 |  |  | - |  |  | $ | - |
Issued |  |  | - |  |  | $ | - |
Forfeited |  |  | - |  |  | $ | - |
Outstanding and vested at December 31, 2019 |  |  | - |  |  | $ | - |
As of December 31, 2019, June 30, 2019 and 2018, all restricted stock shares are issued. Warrants A summary of the changes in outstanding warrants during the periods ended December 31, 2019, June 30, 2019 and 2018 is as follows:
|  | Number of Shares |  |  | Weighted Average Exercise Price Per Share |
Outstanding and vested at June 30, 2017 |  |  | 971,718 |  |  | $ | 30.85 |
Issued |  |  | 1,486,482 |  |  | $ | 6.00 |
Exercised |  |  | (4,443 | ) |  | $ | 0.004 |
Outstanding and vested at June 30, 2018 |  |  | 2,453,757 |  |  | $ | 15.845 |
Issued |  |  | 2,691,123 |  |  | $ | 7.10 |
Exercised |  |  | (25,004 | ) |  | $ | 0.004 |
Forfeited/Expired |  |  | (689,894 | ) |  | $ | 18.94 |
Outstanding and vested at June 30, 2019 |  |  | 4,429,982 |  |  | $ | 7.12 |
Issued |  |  | 21,250 |  |  | $ | 10.25 |
Exercised |  |  | (740,694 | ) |  | $ | 7.80 |
Forfeited/Expired |  |  | (63,666 | ) |  | $ | 13.89 |
Outstanding and vested at December 31, 2019 |  |  | 3,646,872 |  |  | $ | 6.83 |
Included in the warrants outstanding at June 30, 2018 are 643,643 warrants that expired in the year ended June 30, 2019. These warrants had an exercise price that was subject to downward adjustment on the sale of equity at prices below their original exercise price. On October 8, 2019, the Company granted 15,000 warrants to a contractor with exercise price of $10.85, non-cancellable term and immediate vesting. The warrants have an aggregated fair value of $121,252 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.36% (2) expected life of 5 years, (3) expected volatility of 100%, and (4) zero expected dividends. On August 1, 2019, the Company granted 6,250 warrants to a contractor with exercise price of $8.80, a 10-year term and immediate vesting. The warrants have an aggregated fair value of $41,386 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.68% (2) expected life of 5 years, (3) expected volatility of 101.1%, and (4) zero expected dividends. On March 9, 2019, the Company granted 17,857 warrants to a consultant with exercise price of $7.00, a 5-year term and immediate vesting. The warrants have an aggregated fair value of $95,131 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.42% (2) expected life of 5 years, (3) expected volatility of 102.0%, and (4) zero expected dividends. On January 1, 2019, the Company granted 30,000 warrants to a contractor with exercise price of $4.60, a 10-year term and quarterly vesting over four years vesting. The warrants have an aggregated fair value of $112,183 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.49% (2) expected life of 6.25 years, (3) expected volatility of 102.0%, and (4) zero expected dividends. On December 20, 2018, the Company granted 25,000 warrants to a contractor with exercise price of $4.60, a 10-year term and immediate vesting. The warrants have an aggregated fair value of $93,762 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.69% (2) expected life of 6.25 years, (3) expected volatility of 102.3%, and (4) zero expected dividends. During the year ended June 30, 2019, the Company issued an aggregate of 2,260,860 warrants to investors in connection with private placements, with a fair value of approximately $11,420,300. The exercise price ranges from $6.00 to $9.00, vested upon issuance, are non-cancellable and expire on the fifth anniversary from issuance. Variables used in the Black-Scholes option-pricing model include: (1) discount rates of 1.74-3.09% (2) expected life of 5 years, (3) expected volatility of 100.7-103.4%, and (4) zero expected dividends. During the year ended June 30, 2018, the Company issued an aggregate of 84,650 warrants to consultants for services rendered. The exercise price was determined on trading price of the Company's common stock at warrant issuance date and range from $3.00 to $6.60 per share. The warrants are non-cancellable, vest upon issuance or over the service period and expire on the tenth or the seventh anniversary of the date of issuance. In addition, the Company issued an aggregate of 1,200,833 and 201,000 warrants to the holders of promissory notes payable and placement agent, respectively, during the year ended June 30, 2018. These warrants have exercise price from $6.00 to $6.60. The warrants are non-cancellable, vest upon issuance or over the service period and expire the seventh anniversary of the date of issuance At December 31, 2019, the Company had $129,000 of unrecognized stock based compensation expense related to outstanding warrants. At December 31, 2019, the aggregate intrinsic value of warrants vested and outstanding was $115,731,488. During the six months ended December 31, 2019, and the years ended June 30, 2019 and June 30, 2018, the Company recorded approximately $0, $0 and $50,000 of expenses, respectively, from issuances of warrants. Stock-based compensation by class of expense The following summarizes the components of stock-based compensation expense which includes common stock, stock options, warrants and restricted stock in the consolidated statements of operations (rounded to nearest $00):
|  |  |  |  | (Unaudited) |  |  |  |  |  |  |
|  | Six Months Ended |  |  | Six Months Ended |  |  | Year ended |  |  | Year ended |
|  | December 31, |  |  | December 31, |  |  | June 30, |  |  | June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Research and development |  | $ | 174,500 |  |  | $ | 29,500 |  |  | $ | 215,900 |  |  | $ | 62,500 |
General and administrative |  |  | 2,192,500 |  |  |  | 386,300 |  |  |  | 998,100 |  |  |  | 455,500 |
Total |  | $ | 2,367,000 |  |  | $ | 415,800 |  |  | $ | 1,214,000 |  |  | $ | 518,000 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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