Equity Transactions

3 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 9 - Equity Transactions

On July 11, 2018 the Board of Directors approved an extension of the employment agreement with Dr. Anil Diwan, the Company’s President. Pursuant to the terms of the employment agreement, the Company’s Board of Directors authorized the issuance of 525,000 of the Company’s Series A preferred stock to Dr. Anil Diwan. The shares shall be vested in one-third increments on June 30, 2019, June 30, 2020 and June 30, 2021 and are subject to forfeiture. The Company recognized a non-cash compensation expense related to the issuance of the Series A Preferred stock of $47,260 for the three months ended September 30, 2018. The balance of $513,430

will be recognized as the shares vest and service is rendered

For the three months ended September 30, 2018, the Company’s Board of Directors authorized the issuance of 7,716 fully vested shares of its Series A Convertible Preferred stock for employee compensation. The Company recorded an expense of $7,767.

The fair value of the Series A Preferred stock was the following for the dates indicated:

Date	Shares		Value
7/11/2018		525,000	$	560,690
7/31/2018		2,572		2,795
8/31/2018		2,572		2,374
9/30/2018		2,572		2,598
		532,716	$	568,457

There is currently no market for the shares of Series A Preferred Stock and they can only be converted into shares of common stock upon a Change of Control of the Company as more fully described in the Certificate of Designation. The Company, therefore, estimated the fair value of the Series A Preferred stock granted to various employees and others on the date of grant. The Series A Preferred stock fair value is based on the greater of i) the converted value to common at a ratio of 1:3.5; or ii) the value of the voting rights since the Holder would lose the voting rights upon conversion. The conversion of the shares is triggered by a Change of Control. The valuations of the Series A Preferred stock at each issuance used the following inputs:

The common stock price was in the range $.42 to $.58;

The calculated weighted average number of shares of common stock in the period;

26.63

% premium over the common shares for the voting preferences;

The calculated weighted average number of total voting shares and the monthly shares representing voting rights of 19.22% to 19.25% of the total;

The conversion value is based on an assumption for calculation purposes only of a Change of Control in 4 years from October 31, 2016 and a remaining restricted term of 2.34 to 2.09 years;

29.42% to 32.24% restricted stock discount (based on a restricted stock analysis and call-put analysis curve: 55.76% to 61.17% volatility, 2.09% to 2.11% risk free rate) applied to the converted common.

On July 19, 2018, the Company entered into an Employment Agreement with Dr. Irach Taraporewala as Chief Executive Officer of the Company beginning on September 1, 2018. Dr. Taraporewala was granted options to purchase up to 300,000 shares of the Company’s common stock, par value $0.001 per share at an exercise price equal to 20% above the closing bid price of $0.41

of the common stock on September 1, 2018 (“Effective Date”). The options shall vest in three, equal, annual installments commencing on the Effective Date. The fair value of the options

was $35,761 of which $11,920 was recognized and recorded as compensation expense for the three months ended September 30, 2018.

The Company estimated the fair value of the options granted to Dr. Taraporewala on the date of grant using a lattice simulation model that values the options based upon a stock price modeled such that it follows a geometric Brownian motion with constant drift and volatility.

In August 2018, the Scientific Advisory Board (SAB) was granted fully vested warrants to purchase 11,432 shares of common stock with an exercise price of $

.41

per share expiring in August 2022. The fair value of the warrants was $1,543 and was recorded as consulting expense for the three months ended September 30, 2018.

The Company estimated the fair value of the warrants granted to the Scientific Advisory Board on the date of grant using the Black-Scholes Option-Pricing Model with the following weighted-average assumptions:

Expected life (year)	4

Expected volatility	55.12	%

Expected annual rate of quarterly dividends	0.00	%

Risk-free rate(s)	2.71	%

For the three months ended September 30, 2018, the Company’s Board of Directors authorized the issuance of 191,510 fully vested shares of its common stock with a restrictive legend for consulting services. The Company recorded an expense of $79,460 for the three months, which was the fair value on the dates of issuance.

For the three months ended September 30, 2018, the Company’s Board of Directors authorized the issuance of 19,310

fully vested shares of its common stock with a restrictive legend for Director Services. The Company recorded an expense

of $7,500

for the three months, which was the fair value on the date of

issuance.