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Warrants

9 Months Ended

Mar. 31, 2022

16. Warrants

Equity Classified Warrants

On March 7, 2022, the Company closed on an underwriting agreement, pursuant to which, the Company sold, (i) 3,030,000 shares of the Company’s common stock, (ii) Pre-Funded Warrants to purchase up to 3,030,000 shares of common stock, and (iii) Common Warrants to purchase up to 6,666,000 shares of common stock. The shares of common stock and the Pre-Funded Warrants were each sold in combination with corresponding Common Warrants, with one Common Warrant to purchase 1.1 shares of common stock for each share of common stock or each Pre-Funded Warrant sold. The Pre-Funded Warrants have an exercise price of $0.0001 per share of common stock and were exercised in full in April 2022. The Common Warrants have an exercise price of $1.30 per share of common stock and are exercisable six months after the date of issuance and have a term of five years from the date of exercisability (see Note 14 – Capital Structure).

On January 26, 2022, as consideration for entering into the Avenue Capital Agreement, the Company issued Avenue Capital Warrants to the Avenue Capital Lenders to purchase shares of common stock at an exercise price of $1.21 per share, subject to adjustment. The Avenue Capital Warrants were immediately exercisable and expire on January 31, 2027. On March 7, 2022, the Company closed on an equity offering of shares of common stock and warrants at an offering price of $1.25 per share. As this offering precluded the Company from pursuing any equity financing prior to July 7, 2022 and the effective price of the March 7, 2022 offering was more than the exercise price of the Avenue Capital Warrants, the number of common stock issuable upon exercise of the Avenue Capital Warrants were set to 867,769 shares at an exercise price of $1.21. As a result, on March 7, 2022, the Company reclassified the Avenue Capital Warrants from a liability to equity (see Note 11 – Long-term Debt, Note 12 – Fair Value Considerations and Note 14 – Capital Structure).

Significant assumptions used in valuing these warrants were as follows:


	March 7,
	2022
Valuation method	Black-Scholes
Expected volatility	54.45	%
Equivalent term (years)	4.89 - 5.00
Risk-free rate	1.71	%
Dividend yield	0.00	%

On July 1, 2020, 92,302 warrants previously issued to a placement agent with a weighted average exercise price of $15.99 per warrant expired. In addition, during the nine months ended March 31, 2022, 31,925 various other warrants with a weighted average exercise price of $483.75 per warrant to purchase the Company’s shares of common stock expired.

A summary of equity-based warrants is as follows:


				Weighted
				Average
		Weighted		Remaining
	Number of	Average		Contractual
	Warrants	Exercise Price		Life in Years
Outstanding June 30, 2021	1,254,952	$	35.85	2.83
Warrants issued	10,563,769		0.92	5.37
Warrants expired	(124,250)		124.69	—
Outstanding March 31, 2022	11,694,471	$	3.43	4.98

Liability Classified Warrants

As of March 31, 2022, the Company had 24,105 liability warrants outstanding with a weighted-average exercise price of $720.0 per share. These warrants expire on August 25, 2022.