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STOCKHOLDERS’ EQUITY
 12 Months Ended
Jun. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 10 — STOCKHOLDERS’ EQUITY

 

Preferred Stock — The Company has 10,000,000 authorized shares of Preferred Stock, par value $0.0001 per share, 1,000,000 of which have been designated as Series A Convertible Preferred Stock. At June 30, 2024 and 2023, there were zero shares of Preferred Stock issued and outstanding.

 

Voting — Holders of Series A Preferred Stock shall be permitted to vote on all matters required or permitted to be voted on by the holders of Common Stock of the Company and shall be entitled to that number of votes equal to ten votes for the number of shares of Common Stock into which such holder’s shares of Preferred Stock could then be converted in accordance with conversion rights.

 

Dividends — The Company shall pay dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of Preferred Stock.

 

Liquidation Rights — In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, an amount in cash equal to the aggregate liquidation value of all shares held by such holder. The Series A Preferred Stock is not participating preferred.

 

Conversion Rights — On or after the date of issuance, any holder of Series A Preferred Stock shall have the right by written election (a “Series A Election Notice”) to the Company to convert all or any portion of the outstanding Shares of Series A Preferred Stock held by such holder into an aggregate number of shares of Common Stock as is determined by multiplying the number of Shares to be converted by ten (10) (the “Conversion Ratio”).

 

Common Stock — The Company has 350,000,000 authorized shares of Common Stock, par value $0.0001 per share. At June 30, 2024 and 2023, there were 158,452,644 and 63,698,144 shares issued and outstanding, respectively. At June 30, 2024 the Company has 5,615,071 shares issuable, which are included in shares outstanding, related to the contingent consideration settlement (see Notes 4 and 13).

 

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 Company’s Board of Directors from time to time may declare out of funds legally available.

 

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

 

Purchase Agreement with Lincoln Park Capital

 

On June 20, 2023, the Company entered into a purchase agreement (the “2023 Purchase Agreement”) with Lincoln Park, pursuant to which the Company may sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $20,000,000 of shares of Common Stock over the 36-month term of the 2023 Purchase Agreement. Concurrently with entering into the 2023 Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park, pursuant to which it agreed to provide Lincoln Park with certain registration rights related to the shares issued under the 2023 Purchase Agreement.

 

In consideration for entering into the 2023 Purchase Agreement, the Company issued 696,021 shares of Common Stock to Lincoln Park as a commitment fee on June 20, 2023.

 

During the years ended June 30, 2024 and June 30, 2023 no shares of Common Stock to Lincoln Park were sold under the Purchase Agreement.

 

 Preferred Stock Issuances

 

On August 1, 2023, the Company closed a private placement of 280,505 units (the “Units”), each consisting of (i) one share of the Company’s Series A Convertible Preferred Stock, (the “Preferred Stock”) and (ii) one Common Stock purchase warrant (each, a “Warrant”, and together with the Units and the shares of Preferred Stock, the “Securities”) to purchase five shares of the Company’s Common Stock, at a price per Unit equal to $7.13 for aggregate proceeds to the Company of $2,000,000 in cash. In addition, the Company issued 280,505 Units in connection with the conversion of $2,000,000 of the Promissory Note (see Note 8).

 

The Company issued an aggregate of 561,010 shares of Preferred Stock, which were initially convertible into an aggregate of 5,610,100 shares of Common Stock. In connection with the private placement, the Company sold warrants to purchase an aggregate of 2,805,050 shares of Common Stock. The warrants are exercisable for five years from the date of issuance and have an exercise price of $0.65 per share, payable in cash.

 

On February 13, 2024 pursuant to the acquisition of Renovaro Cube, the 561,010 shares of Preferred Stock were converted into an aggregate of 5,610,100 shares of Common Stock. As of June 30, 2024 there were zero shares of Preferred Stock outstanding. The extinguishment loss of $120,018 is recorded in Other Income/Loss in the Statement of Operations (see Note 8).

 

June 2024 Private Placement

 

On June 14, 2024, Renovaro Inc., a Delaware corporation (the “Company”) closed a private placement of 5,315,215 of the Company’s units, each such Unit consisting of (i) one share of the Company’s common stock, $0.0001 par value per share and (ii) one common stock purchase warrant to purchase one-tenth of a share of Common Stock, with certain investors (the “Private Placement”). The Warrants are exercisable for five years from the date of issuance and have an exercise price of $1.4726 and $1.4765 per share, payable in cash.

 

The Private Placement was completed pursuant to Regulation S promulgated under the Securities Act of 1933, as amended (“Regulation S”).

 

In the Private Placement, the Company sold 2,325,869 Units at a price per Unit equal to $1.4726 to a certain investor who paid in cash and settlement of debt an aggregate amount of $3,425,075 in consideration for the Units.

 

Additionally, the Company sold 2,671,631 Units to certain investors who surrendered and terminated $3,955,033 in aggregate principal amount and interest accrued thereon of certain convertible promissory notes issued by the Company in 2023 and 2024 and paid in cash an aggregate amount of $478,060 to the Company in consideration for the Units.

 

Additionally, the Company sold 317,715 Units to an investor who surrendered and terminated $468,453 in aggregate principal amount and interest accrued thereon of a convertible promissory note issued in 2023 and paid in cash an aggregate amount of $66,000 to the Company in consideration for the Units. 

 

In relation to the June 14, 2024 Private Placement the Company recognized a loss on the settlement of debt for $1,183,560 which was recorded in other income (expense) in the statement of operations for the year ended June 30, 2024. 

 

Common Stock Issuances

 

On April 5, 2024, the Company issued 33,760 shares of common stock for consulting services valued at $94,190.

 

On February 20, 2024, 2,953,700 warrants outstanding were exercised at prices ranging from $0.53 to $0.65 per share and the aggregate $1,750,000 of a promissory note held by the holder was applied to the exercise price of the warrants (see Note 8).

 

On February 20, 2024, 471,699 warrants outstanding were exercised at $0.53 per share valued at $250,000. A promissory note held by the holder was applied to the exercise price of the warrants in lieu of cash proceeds (see Note 9).

 

On February 15, 2024, the Company issued 50,000 shares of Common Stock for consulting services valued at $100,000.

 

On February 15, 2024, the Company closed a private placement of 344,827 shares of Common Stock, $0.0001 par value, at $2.90 per share for aggregate proceeds to the Company of $1,000,000 in cash.

  

On February 16, 2024, the Company recognized 3,425,399 shares of common stock to be issued in settlement of the contingent consideration as a result of the Company’s acquisition of GEDi Cube Intl Ltd. As further described in Note 12.

  

On February 13, 2024, the Company issued 70,834,183 valued at $136,001,631 (see Note 13) shares of Common Stock pursuant to the Stock Purchase Agreement of Renovaro Cube.

 

On December 4, 2023, the Company issued 525,945 shares of Common Stock pursuant to warrants exercised for cash proceeds of $341,865.

 

On October 23, 2023, the Company issued 1,000,000 shares of Common Stock valued at $2,760,000 for advisory services to Avram Miller, a member of the Company’s board of directors.

 

Between July 28, 2023, and September 28, 2023, the Company issued 2,000,000 shares of Common Stock for consulting services valued at $4,470,000.

 

On June 26, 2023, the Company issued 4,718,532 shares of Common Stock and warrants to purchase 2,359,266 shares of common stock resulting in proceeds of $1,300,823 in a private placement offering and the reduction of notes payable of $1,200,000. The warrants were immediately exercisable and had an exercise term of five years with an exercise price of $0.53 per share. The combined purchase price for one share of Common Stock and one warrant was $0.53 per share.

 

On June 26, 2023, the Company issued 4,718,532 shares of Common Stock and warrants to purchase 2,359,266 shares of common stock resulting in proceeds of $1,300,823 in a private placement offering and the aforementioned reduction of notes payable of $1,200,000. The warrants were immediately exercisable and had an exercise term of five years with an exercise price of $0.53 per share. The combined purchase price for one share of Common Stock and one warrant was $0.53 per share.

 

On June 20, 2023, the Company issued 696,021 shares of Common Stock to Lincoln Park as a commitment fee as part of a purchase agreement.

 

On April 27, 2023, there were 100,000 shares issued that immediately vested and were converted into shares of Common Stock in exchange for consulting services valued at $120,000.

 

During March 2023, the Company issued 2,378,070 shares of Common Stock and warrants to purchase 1,189,036 shares of Common Stock resulting in proceeds of $2,711,000 in a private placement offering. The Company effected the issuances of the shares of Common Stock from March 13, 2023 to March 29, 2023. The purchase warrants were immediately exercisable and had an exercise term of five years with an exercise price of $1.14 per share. The combined purchase price for one share of Common Stock and one Purchase Warrant was $1.14 per share.

 

On February 10, 2023, there were 100,000 restricted share units issued that immediately vested and were converted into shares of Common Stock in exchange for consulting services valued at $108,000.

 

On December 30, 2022, the Company issued 198,439 shares of Common stock valued at $204,392 based on the closing price of the common stock on that date, issued in lieu of prepaid interest related to the amended and restated secured notes (see Note 8).

 

On July 14, 2022, certain of our warrant holders exercised warrants to purchase 1,250,000 shares of Common Stock for total proceeds to the Company of $1,625,000, with corresponding earn-out distribution of the same number of shares in connection with the acquisition of Renovaro Biosciences, based on the share price on that date of $2.21. This non-cash earn-out distribution impacted stockholders’ equity in the amount of $2,762,500 based on the share price on July 14, 2022, of $2.21.  

 

2017 Warrants

 

On July 14, 2022, certain of our warrant holders exercised warrants to purchase 1,250,000 shares of Common Stock for total proceeds to the Company of $1,625,000, with corresponding earn-out distribution of the same number of shares in connection with the acquisition of Renovaro Biosciences. This non-cash earn-out distribution impacted stockholders’ equity in the amount of $2,762,500 based on the share price on July 14, 2022 of $2.21. The Company recorded a loss on extinguishment of contingent consideration liability of $419,182 during the year ended June 30, 2024 which reflected the difference between the fair value of the shares and the contingent consideration liability at the time of extinguishment. As of June 30, 2023, all outstanding warrants as of the date of acquisition of Renovaro Biosciences (the “2017 Warrants”) were exercised and there is no further contingent consideration liability related to the 2017 Warrants remaining as of June 30, 2024.

 

Acquisition of Renovaro Biopharma / Contingently issuable shares

 

On February 16, 2018, the acquisition of Renovaro Biosciences was completed. As part of the acquisition, the stockholders of Renovaro Biosciences received (i) 18,081,962 shares of Common Stock, and (ii) the right to receive Contingent Shares of Common Stock pro rata upon the exercise or conversion of warrants, which were outstanding at closing. As of June 30, 2024, no further Contingent Shares are issuable.

 

Acquisition of Renovaro Denmark

 

At June 30, 2024 and 2023, the Company maintained a reserve of 17,414 Escrow Shares, all of which are reflected as issued and outstanding in the accompanying financial statements. The Escrow Shares are reserved to acquire the shares of Renovaro Denmark held by non-consenting shareholders of Renovaro Denmark on both June 30, 2024 and 2023, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of Renovaro Denmark. There have been 167,639 shares of Common Stock issued to non-consenting shareholders of Renovaro Denmark as of June 30, 2024. During the years ended June 30, 2024 and 2023, the Company did not issue any shares of Common Stock to such non-consenting shareholders of Renovaro Denmark.

 

Stock-based Compensation

 

The Company recognizes compensation costs for stock option awards to employees 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. In the year ended June 30, 2024, the weighted-average assumptions used to estimate the grant date fair values of the stock options granted using the Black-Scholes option-pricing model are as follows:

 

       
    Renovaro Inc.
Expected term (in years)     5.0 – 6.5  
Volatility     84.33% – 114.88 %
Risk free interest rate     3.12%- 4.83 %
Dividend yield     0 %

 

The Company recognized stock-based compensation expense related to all equity instruments of $4,673,129 and $3,535,051 for the years ended June 30, 2024 and 2023, respectively. At June 30, 2024, the Company had approximately $250,373 of unrecognized compensation cost related to non-vested options.

 

Plan Options

 

On February 6, 2014, the Company’s Board of Directors adopted the Company’s 2014 Equity Incentive Plan (the “2014 Plan”), and the Company had reserved 1,206,000 shares of Common Stock for issuance in accordance with the terms of the 2014 Plan.

 

On October 30, 2019, the Board approved and on October 31, 2019, the Company’s stockholders adopted its 2019 Equity Incentive Plan (the “2019 Plan”), which replaced the 2014 Plan. The 2019 Plan provided that the maximum aggregate number of shares of the Company’s Common Stock reserved and available for issuance under the 2019 Plan was the sum of (1) 6,000,000 new shares, and (2) the number of shares available for the grant of awards as of the effective date under the 2014 Plan plus any options related to awards that expire, are terminated, surrendered, or forfeited for any reason without issuance of shares under the 2014 Plan after the effective date of the 2019 Plan.

 

Effective July 21, 2023, the Company adopted the Renovaro Biosciences Inc. 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan replaced the 2019 Plan. The 2023 Plan provides that the maximum aggregate number of shares of the Company’s Common Stock reserved and available for issuance under the 2023 Plan was the sum of (1) 4,000,000 new shares, and (2) the number of shares available for the grant of awards as of the effective date under the 2019 Plan. Any awards outstanding under the 2019 Plan as of the date of adoption of the 2023 Plan remain subject to and will be available under the 2019 Plan, and any shares subject to outstanding awards under the 2019 Plan that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares automatically become available for issuance under the 2023 Plan.

 

 The Company granted options to purchase 369,500 shares of Common Stock to employees with a three-year vesting period during the year June 30, 2024 under the 2019 and 2023 Plan. For the year ended June 30, 2023, the Company granted options to purchase 193,000 shares to employees with a three-year vesting period under the 2019 Plan.

 

During the year ended June 30, 2024 and 2023, the Company granted options to purchase zero and 184,800, respectively, and zero and 18,960 forfeited shares of Common stock to employees with a six-month vesting period, respectively under the 2019 Plan.

  

During the year ended June 30, 2024 and 2023, the Company granted options to purchase zero and 73,200 issued and 12,640 forfeited, and 65,000 shares of Common stock, respectively, to employees with a one-year vesting period, respectively under the 2019 Plan.

 

During the years ended June 30, 2024 and 2023, the Company granted options to purchase 424,412 and 355,359 shares, respectively, to the Board of Directors and Scientific Advisory Board Members with a one-year vesting period, under the 2019 and 2023 Plan.

 

During the years ended June 30, 2024 and 2023, the Company granted options to purchase 329,729 and zero shares, respectively, to the Board of Directors and Scientific Advisory Board Members with immediate vesting, under the 2019 and 2023 Plan.

 

During the years ended June 30, 2024, and 2023, the Company granted options to purchase 10,000 and 75,000 shares, respectively, for consulting services with a one-year vesting period, under the 2019 and 2023 Plan.

 

All of the above options are exercisable at the market price of the Company’s Common Stock on the date of the grant. On February 13, 2024, the Company repriced 3,849,931 eligible employee and consultant options from the original issued exercise price to a new exercise price of $1.92 per share, the closing price of the Company’s Common Stock on February 13, 2024. The Company recognized stock-based compensation expense related to the repricing of options of $921,254 during the year ended June 30, 2024.

 

 To date the Company has granted options under the 2014, 2019 and 2023 Plans (“Plan Options”) to purchase 6,665,821 shares of Common Stock. At June 30, 2024, the Company has 4,515,873 options available to be issued under the 2023 Plan.

 

A summary of the Plan Options outstanding at June 30, 2024 is presented below:

 

                                    
   Options Outstanding     Options Exercisable
  

Exercise

Price

Ranges

 

Number

Outstanding

 

Weighted

Average

Remaining

Contractual

Life (years)

 

Weighted

Average

Exercise

Price

 

Number

Exercisable

 

Weighted

Average

Remaining

Contractual

Life (years)

 

Weighted

Average

Exercise

Price

   $0.45–4.50    5,244,987    7.38   $1.89    3,817,105    7.15   $1.92 
    $4.51–6.50    167,634    6.48   $5.33    135,376    5.81   $5.49 
    $6.51–12.00    115,231    4.66   $7.63    111,585    4.57   $7.61 
Total         5,527,852    7.29   $2.11    4,064,066    7.03   $2.20 

  

A summary of changes are presented below:

 

                     
   Shares  Weighted Average Exercise
Price		  Average Remaining Life  Weighted Average Intrinsic
Value
             
Outstanding at June 30, 2023    4,401,211   $4.78    7.82   $— 
Granted    4,983,572   $1.94           
Exercised    —   $—           
Forfeited    —   $—           
Expired/Canceled     (3,856,931)  $4.94           
Outstanding at June 30, 2024    5,527,852   $2.11    7.30   $— 
Exercisable at June 30, 2024    4,064,066   $2.20    7.05   $525,943 

  

At June 30, 2024, the Company had Plan Options to purchase 4,064,066 shares of common stock that were exercisable. The total intrinsic value of options exercisable at June 30, 2024, was $525,943. Intrinsic value is measured using the fair value at the date of exercise (for shares exercised) and at June 30, 2024 (for outstanding options), less the applicable exercise price.

 

Common Stock Purchase Warrants

 

A summary of the status of the Common Stock Purchase Warrants outstanding at June 30, 2024, is presented below:

  

                     
   Warrants Outstanding  Warrants Exercisable
  

Exercise

Price

 

Number

Outstanding

 

Weighted

Average

Remaining

Contractual

Life (years)

 

Weighted

Average

Exercise

Price

 

Number

Exercisable

 

Weighted

Average

Remaining

Contractual

Life (years)

 

Weighted

Average

Exercise

Price

    $0.53    471,698    1.33        471,698    1.33     
    $0.65    741,274    3.07        741,274    3.07     
    $1.14    1,189,036    3.73        1,189,036    3.73     
    $1.47    642,128    4.96        642,128    4.96     
    $1.48    50,740    4.99        50,740    4.99     
 Total         3,094,876    3.48   $1.00    3,094,876    3.48   $1.00 

 

A summary of the warrant activity is presented below:

 

               
    Shares  Weighted Average Exercise
Price		  Weighted Average Remaining
Life
          
Outstanding at June 30, 2023   3,548,302   $0.73    4.80 
Granted   3,497,918   $0.81    4.27 
Exercised   (3,951,344)  $0.59    — 
Cancelled/Expired   —   $—    — 
Outstanding and exercisable at June 30, 2024   3,094,876   $1.00    3.48 

  

At June 30, 2024, the Company had 3,094,876 exercisable Common Stock Purchase Warrants outstanding. The total intrinsic value of warrants exercisable at June 30, 2024, was $2,309,681. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) and at June 30, 2024 (for outstanding warrants), less the applicable exercise price.

 

Restricted Stock Awards (RSA)

 

The Company recognized stock-based compensation expense related to RSAs of $1,415,157 for the year ended June 30, 2024. The restricted stock awards are related to a grant of 1,000,000 shares of restricted stock with a 3-year vesting period made to a director as consideration for advisory services, with a total value of $2,760,000. At June 30, 2024, the Company had $1,344,843 of unrecognized stock-based compensation expense remaining to be amortized.

  

The Company recognized stock-based compensation expense related to other RSAs of $108,000 for the year ended June 30, 2023. These restricted stock awards are related to a grant of 100,000 shares of restricted stock made to a consultant as consideration for consulting services.