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STOCKHOLDERS' EQUITY

6 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

NOTE 5 — STOCKHOLDERS’ EQUITY

Preferred Stock — The Registrant has 10,000,000 authorized shares of Preferred Stock, par value $0.0001 per share. At December 31, 2018, and June 30, 2018 there were zero shares issued and outstanding.

Common Stock — The Registrant has 100,000,000 authorized shares of Common Stock, par value $0.0001 per share. At December 31, 2018, and June 30, 2018, there were 38,789,310 and 36,163,924 shares issued and outstanding, respectively.

Voting — Holders of Common Stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders, including the election of directors, and do not have any right to cumulate votes in the election of directors.

Dividends — Holders of Common Stock are entitled to receive ratably such dividends as the Board from time to time may declare out of funds legally available.

Liquidation Rights — In the event of any liquidation, dissolution or winding-up of affairs of the Company, after payment of all of our debts and liabilities, the holders of Common Stock will be entitled to share ratably in the distribution of any of our remaining assets.

Common Stock Issuances — On December 27, 2018, the Company issued 1,307,693 shares in exchange for an equal number of warrants exercisable at $1.30. Proceeds received by the Company amounted to $1.7 million. In addition, on December 27, 2018, the Company issued 1,307,693 common shares to the stockholders of Enochian Biopharma in accordance with the Acquisition Agreement. These Contingent Shares were valued at the closing market stock price of $7.20 per share. The Company recorded a charge of $9.4 million to change in fair value of contingent consideration.

Acquisition of EBI / Contingently issuable shares — On February 16, 2018, the Acquisition was completed when the Acquisition Sub merged with and into Enochian Biopharma, with Enochian Biopharma as the surviving corporation. As consideration for the Acquisition, the stockholders of Enochian Biopharma received (i) 18,081,962 shares of Common Stock, and (ii) the right to receive Contingent Shares pro rata upon the exercise or conversion of warrants which were outstanding at closing. At December 31, 2018, 5,180,429 Contingent Shares are issuable in connection with the Acquisition of Enochian Biopharma.

Recognition of Options

The Company recognizes compensation costs for stock option awards to employees and directors based on their grant-date fair value. The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the fair values of the stock options granted using the Black-Scholes option-pricing model are as follows:

		Enochian Biosciences Inc.
Expected term (in years)			3-10
Volatility			94.37-98.15	%
Risk free interest rate			3.06-3.23	%
Dividend yield			0	%

The Company recognized stock-based compensation expense (excluding other non-cash compensation expense) related to the options of $1,780,059 and $0 for the three months ended December 31, 2018 and 2017, respectively, and $1,866,225 and $112,837 for the six months ended December 31, 2018 and 2017, respectively. At December 31, 2018, the Company had approximately $298,689 of unrecognized compensation cost related to non-vested options.

Acquisition of DanDrit Denmark — At December 31, 2018 and June 30, 2018, the Registrant maintained a reserve of 129,596 Escrow Shares, respectively, all of which are reflected as issued and outstanding in the accompanying financial statements. The Escrow Shares are reserved to acquire the 86,490 and 123,464 shares held by non-consenting shareholders of DanDrit Denmark at December 31, 2018 and 2017, respectively, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark. During the year ended June 30, 2018, the Registrant issued 55,457 shares of Common Stock to such non-consenting shareholders of DanDrit Denmark. On November 15, 2018, the Company changed the name of DanDrit BioTech ApS to Enochian BioSciences Denmark ApS.

Stock Grants -On September 15, 2016, the Board granted the right to acquire 300,000 shares of Common Stock at a strike price of $2.00 per share in what the Board originally described as “options” (the “Grants”) to each of Eric Leire, APE Invest A/S for Aldo Petersen and N.E. Nielson in consideration of their service to the Registrant. These Grants vested immediately and expire on December 31, 2019. In October of 2017, the Registrant issued warrants to APE Invest A/S and N.E. Nielsen, and in January 2018, the Registrant issued a warrant to Eric Leire (each a “Grant Warrant” collectively the “Grant Warrants”) to evidence the Grants for an aggregate of 900,000 Grant Warrants.

Grant Warrants/ Plan Options

On February 6, 2014, the Board adopted the Registrant’s 2014 Equity Incentive Plan (the “Plan”), and the Registrant has reserved 1,206,000 shares of Common Stock for issuance in accordance with the terms of the Plan. To date the Registrant has granted options under the Plan (“Plan Options”) to purchase 403,091 shares of Common Stock.

On September 19, 2018 the Company increased the compensation of the Board’s existing independent directors who are members of committees of the Board to $60,000 per year, along with an increase of the annual compensation to the Chair of the Audit Committee to $15,000 per year and the addition of cash retainers in the amount of $7,500, $5,000 and $4,000 to the members of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, respectively. In addition, the Company granted additional options to the existing independent directors who are members of committees of the Board to increase their non-cash compensation to $75,000 per annum. All newly granted options will have exercise prices as of the market price of the Company’s common stock on the date of grant.

On October 30, 2018, the Company granted options to a new independent director in the amount of $75,000, with a three-year vesting period and exercisable at the market price of the Company’s common stock on the date of grant.

On November 21, 2018, the Company granted 300,000 fully vested options to the newly named Executive Vice Chair of the Board exercisable at the market price of the Company’s common stock on the date of grant.

A summary of the status of the Plan Options and Grant Warrants outstanding at December 31, 2018 is presented below:

Options Outstanding												Options Exercisable
		Exercise Prices				Number Outstanding				Weighted Average Remaining Contractual Life (years)				Weighted Average Exercise Price				Number Exercisable			Weighted Average Exercise Price
		$	8.00				69,235				9.32			$	8.00				-			-
			5.74				15,679				9.72				5.74				-			-
			3.95				5,064				9.54				3.95				-			-
			2.00				650,000				1.00				2.00				650,000			2.00
			5.72				13,113				9.84				5.72				-			-
		$	6.50				300,000				9.90			$	6.50				300,000		$	6.50
Total			-				1,053,091				4.36			$	3.79				950,000		$	3.42

A summary of the status of the Plan Options and the Grant Warrants at December 31, 2018 and changes during the period are presented below:

		Shares				Weighted Average Exercise Price				Average Remaining Life				Weighted Average Intrinsic Value

Outstanding at beginning of period			690,621			$	2.00				2.50			$	-
Granted			362,470				6.52				10				-
Exercised			-				-				-				-
Forfeited			-				-				-				-
Expired			-				-				-				-
Outstanding at end of period			1,053,091			$	3.79				4.36			$	3,451,984
Vested and expected to vest			950,000			$	3.42				3.81			$	3,400,000
Exercisable end of period			950,000			$	3.42				3.81			$	3,400,000

At December 31, 2018, all Grant Warrants are exercisable, and 300,000 Plan Options are exercisable. The total intrinsic value of options at December 31, 2018 was $3,435,006. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) at December 31, 2018 (for outstanding options), less the applicable exercise price.

Common Stock Purchase Warrants

A summary of the status of shares of Common Stock which can be purchased underlying the warrants outstanding at December 31, 2018 is presented below:

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Life

Outstanding at beginning of period			5,838,122			$	1.33				-
Granted			-				-				-
Exercised			(1,307,693	)			-				1.30
Cancelled/Expired			-				-				-
Outstanding at end of period			4,530,429			$	1.30				3.38
Exercisable end of period			4,530,429			$	1.30				3.34

			Equivalent Shares Underlying Warrants Outstanding												Equivalent Shares Exercisable
Exercise Prices			Equivalent Shares				Weighted Average Remaining Contractual Life (years)				Weighted Average Exercise Price				Number Exercisable					Weighted Average Exercise Price
$	1.30			4,505,429			3.37				$	1.30				4,505,429		$	1.30
$	8.00			25,000			2.12				$	8.00				25,000		$	8.00

	Total			4,530,429			3.37				$	1.34				4,530,429		$	1.34

The exercise price of certain warrants and the number of shares underlying the warrants are subject to adjustment for stock dividends, subdivisions of the outstanding shares of Common Stock and combinations of the outstanding shares of Common Stock. For so long as the warrants remain outstanding, we are required to keep reserved from our authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the shares underlying the warrants