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STOCKHOLDERS’ EQUITY
 9 Months Ended
Mar. 31, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 9 — STOCKHOLDERS’ EQUITY

 

Preferred Stock — The Company has 10,000,000 authorized shares of Preferred Stock, par value $0.0001 per share, of which 1,000,000 shares have been designated as Series A Convertible Preferred Stock. At March 31, 2024, and June 30, 2023, there were zero shares of Series A Convertible 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 —During the period ended March 31, 2024, the Company increased its authorized shares of Common Stock. The Company has 350,000,000 authorized shares of Common Stock, par value $0.0001 per share. At March 31, 2024, and June 30, 2023, there were 150,913,997 and 63,698,144 shares issued and outstanding, respectively. At March 31, 2024, the Company has 3,425,399 shares issuable, which are included in shares outstanding, related to the contingent consideration settlement (see Notes 4 and 12).

 

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 debts and liabilities and preferences to holders of preferred stock, the holders of Common Stock will be entitled to share ratably in the distribution of any of the 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 Capital Fund, LLC (“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 three and nine months ended March 31, 2024, 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 are 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 March 31, 2024 there were zero shares of Preferred Stock outstanding.

 

Common Stock Issuances

 

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

 

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

 

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

 

On February 13, 2024 the Company issued 70,834,183 shares of Common Stock pursuant to the Stock Purchase Agreement of Renovaro Cube.

  

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.

 

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 15, 2024 the Company issued 50,000 shares of Common Stock for consulting services.

 

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 20, 2024, 2,953,700 warrants outstanding were exercised 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 ranging at $0.53 per share and $250,000 of a promissory note held by the holder was applied to the exercise price of the warrants (see Note 8).

 

Acquisition of Renovaro Denmark — At March 31, 2024, and June 30, 2023, the Company maintained a reserve of 17,414 shares of Common Stock of the Registrant held in escrow according to Danish law (the “Escrow Shares”), all of which are reflected as issued and outstanding in the accompanying consolidated financial statements. The Escrow Shares are reserved to acquire the shares of Renovaro Denmark held by non-consenting shareholders of Renovaro Denmark on both March 31, 2024, and June 30, 2023, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark. There have been 167,639 shares of Common Stock issued to non-consenting shareholders of Renovaro Denmark as of March 31, 2024. During the three and nine months ended March 31, 2024, the Company issued zero shares of Common Stock to such non-consenting shareholders of Renovaro Denmark. There is no impact on outstanding shares as these shares are reflected as issued and outstanding.

 

Stock-based Compensation

 

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 in the three months ended March 31, 2024:

  

     
   Renovaro Inc.
Expected term (in years)   5.0 – 6.5 
Volatility   84.33% – 108.79%
Risk free interest rate   3.12% – 4.83%
Dividend yield   0%

  

On February 13, 2024, the Company repriced 3,849,931 eligible employee and consultant options from the original issued exercise price to $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 $886,849 for the period ended March 31, 2024.

 

In total, the Company recognized stock-based compensation expense related to options of $1,326,592 and $2,775,793 for the three and nine months ended March 31, 2024, respectively. The Company recognized stock-based compensation expense related to options of $1,076,203 and $2,922,166 for the three and nine months ended March 31, 2023, respectively. At March 31, 2024, the Company had approximately $579,305 of unrecognized compensation cost related to non-vested options.

 

Plan Options

 

On February 6, 2014, the Board 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. 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 zero and 366,500 shares of Common Stock to employees with a three-year vesting period during the three and nine months ended March 31, 2024, respectively under the 2019 and 2023 Plan. The Company granted options to purchase 15,000 and 193,000 shares of Common Stock to employees with a three-year vesting period during the three and nine months ended March 31, 2023, respectively under the 2019 Plan.

  

During the three and nine months ended March 31, 2024, respectively, the Company granted options to purchase zero shares of Common Stock to employees with a six-month vesting period under the 2023 Plan. During the three and nine months ended March 31, 2023, the Company granted options to purchase zero and 184,800 issued and 18,960 forfeited shares of Common Stock to employees with a six-month vesting period, respectively under the 2019 Plan.

 

During the three and nine months ended March 31, 2024, respectively, the Company granted options to purchase zero shares of Common Stock to employees with a one-year vesting period under the 2023 Plan. During the three and nine months ended March 31, 2023, the Company granted options to purchase zero and 73,200 issued and 12,640 forfeited shares of Common Stock to employees with a one-year vesting period, respectively under the 2019 Plan.

 

During the three and nine months ended March 31, 2024, the Company granted options to purchase 28,196 and 371,595 shares of Common Stock, to the Board of Directors and Scientific Advisory Board Members with a one-year vesting period under the 2023 Plan and the 2019 Plan, respectively. During the three and nine months ended March 31, 2023, the Company granted options to purchase 64,655 and 275,572 shares of Common Stock, to the Board of Directors and Scientific Advisory Board Members with a one-year vesting period under the 2019 Plan, respectively.

 

During the three and nine months ended March 31, 2024, the Company granted options to purchase zero and 26,000 shares, respectively of Common Stock for Scientific Advisory Board members with immediate vesting under the 2023 Plan. During the three and nine months ended March 31, 2023, the Company did not grant options to Scientific Advisory Board members to purchase shares of Common Stock with immediate vesting.

 

During the three and nine months ended March 31, 2024, the Company granted options to purchase 10,000 shares of Common Stock to a consultant with ten months vesting. During the three and nine months ended March 31, 2024, the Company forfeited zero and 7,000 options, respectively, to purchase shares of Common Stock to a consultant with immediate vesting.

 

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 $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 $886,849 for the period ended March 31, 2024.

 

 To date the Company has granted options under the 2014, 2019 and 2023 Plans (“Plan Options”) to purchase 6,306,275 shares of Common Stock. At March 31, 2024, the Company has 4,875,419 options available to be issued under the 2023 Plan.

  

A summary of the status of the Plan Options outstanding at March 31, 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    4,885,441    7.43   $1.91    3,410,589    7.10   $1.98 
   $4.51–6.50    167,634    6.73   $5.33    135,376    6.06   $5.49 
   $6.51–12.00    115,231    4.91   $7.63    111,585    4.82   $7.61 
Total        5,168,306    7.35   $2.15    3,657,550    6.99   $2.28 

 

A summary of the status of the Plan Options at March 31, 2024, and changes since July 1, 2023, are presented below:

  

                                 
    Shares   Weighted Average Exercise
Price		   Average Remaining Life   Weighted Average Intrinsic
Value
                 
Outstanding at beginning of period       4,401,211     $ 4.78       7.82     $ —  
Granted       4,624,026     $ 1.97                  
Exercised       —     $ —                  
Forfeited       —     $ —                  
Expired/Canceled       (3,856,931 )   $ 4.94                  
Outstanding at end of period       5,168,306     $ 2.15       7.35     $ —  
Exercisable at end of period       3,657,550     $ 2.28       6.99     $ 3,839,725  

  

At March 31, 2024, the Company had Plan Options to purchase 3,657,550 shares of common stock that were exercisable. The total intrinsic value of options exercisable at March 31, 2024, was $3,839,725. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) and at March 31, 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 March 31, 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    1.41        471,698    1.41     
   $0.65    741,274    3.25        741,274    3.25     
   $1.14    1,189,036    3.98        1,189,036    3.98     
Total         2,402,008    3.25   $0.87    2,402,008    3.25   $0.87 

  

A summary of the warrants outstanding at March 31, 2024, and changes since July 1, 2023, are presented below:

  

               
    Shares  Weighted Average Exercise
Price		  Weighted Average Remaining
Life
          
Outstanding at beginning of period   3,548,302   $0.73    4.80 
Granted   2,805,050   $0.65    3.25 
Exercised   (3,951,344)  $0.59    — 
Cancelled/Expired   —   $—    — 
Outstanding and exercisable at end of period   2,402,008   $0.87    3.25 

  

At March 31, 2024, the Company had 2,402,008 exercisable Common Stock Purchase Warrants outstanding. The total intrinsic value of warrants exercisable at March 31, 2024, was $4,277,992. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) and at March 31, 2024 (for outstanding warrants), less the applicable exercise price.

 

Restricted Stock Awards (RSA)

 

The Company recognized stock-based compensation expense related to RSAs of $535,009 and $1,068,865 for the three and nine months ended March 31, 2024, respectively. 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 March 31, 2024, the Company had $1,691,135 of unrecognized stock-based compensation expense remaining to be amortized.