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Equity Transactions
 3 Months Ended
Sep. 30, 2022
Equity [Abstract]  
Equity Transactions

9. Equity Transactions

 

Stock Options

 

The following table summarizes the activity relating to the Company’s stock options for the three months ended September 30, 2022:

 

                    
   Options   Weighed-
Average Exercise Price		   Weighted Remaining Average Contractual Term   Aggregate Intrinsic Value 
Outstanding at June 30, 2022   3,398,764    7.42    6.8    - 
Granted   -    -    -    - 
Options Expired   (25,600)   4.71    -    - 
Options Canceled   (24,834)   7.74    -    - 
Options Forfeited   -    -    -    - 
Outstanding at September 30, 2022   3,348,330   $7.40    6.4   $143,136 
Exercisable at September 30, 2022   1,113,341   $9.11    5.6   $39,440 

 

The fair value of each option grant on the date of grant is estimated using the Black-Scholes option. The pricing model reflects the following weighted-average assumptions for the three months ended September 30, 2021 and no stock options were issued for the three months ended September 30, 2022:

 

    
   September 30, 2021
Expected life of options (In years)   5
Expected volatility   74.96%
Risk free interest rate   0.80%
Dividend Yield   0%

 

Expected volatility is based on the historical volatilities of the daily closing price of the common stock of three comparable companies and the expected life of options is based on historical data with respect to employee exercise periods. The Company accounts for forfeitures as they are incurred.

 

The Company recorded stock option-based compensation expense of $878,640 and $1,926,962 for three-month periods ended September 30, 2022 and 2021, respectively.

 

The following is a summary of stock options outstanding and exercisable by exercise price as of September 30, 2022:

 

                 
Exercise Price   Outstanding   Weighted Average Contract Life   Exercisable 
$1.69    124,520    4.8    - 
$1.81    10,000    4.7    - 
$1.98    72,000    4.7    2,000 
$2.74    124,167    9.4    - 
$2.80    7,200    2.4    7,200 
$3.20    248,167    9.4    24,833 
$3.24    25,000    9.5    - 
$3.75    4,800    1.4    4,800 
$5.04    755,000    4.6    188,750 
$6.25    1,600    1.1    1,600 
$7.50    1,600    3.4    1,600 
$7.74    1,341,001    8.3    546,333 
$8.75    1,600    1.5    1,600 
$9.54    800    3.1    800 
$9.90    800    3.1    800 
$12.50    4,000    0.4    4,000 
$13.91    618,475    3.3    321,425 
$25.00    800    0.1    800 
$26.25    2,000    0.1    2,000 
$28.75    800    0.2    800 
$42.09    4,000    3.4    4,000 
      3,348,330         1,113,341 

 

Issuance of common stock for cash

 

During the 3 months ended September 30,2021, the Company issued 2,592,000 of its Class A common stock at $8.00 per share in connection with its registered public offering of approximately $18.5 million, net of issuance costs of approximately $2.2 million.

 

On August 31, 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. and B. Riley Securities, Inc. (collectively, the “Agents”), pursuant to which the Company may issue and sell from time-to-time shares of Company’s Class A common stock, par value $0.0001 per share, through the Agents, subject to the terms and conditions of the Sales Agreement. As of September 30, 2022, the Company has issued 1,544,872 shares under the Sales Agreement for a total net proceeds of $ 5.9 million after commissions and expenses of approximately $400,000.

 

Issuance of Shares for Services

 

On August 20, 2021, the Company awarded 58,759 restricted stock units (“RSUs”) to the President and CEO under the Company’s 2019 Omnibus Incentive Equity Plan (the “2019 Omnibus Plan”) as his salary for the period from April 27, 2021, the date of his appointment, through December 31, 2021. The number of RSUs awarded was based on a prorated annual base salary of $600,000 at a 10% discount to the grant date fair value of $7.74 per share of the Company’s common stock. Each RSU awarded to the CEO entitles him to receive one share of common stock upon vesting. A total of 15,339 RSUs (representing the pro rata portion of the RSU award for the period from April 27, 2021 to June 30, 2021) vested at the grant date, 21,710 vested at September 30, 2021 and 21,710 vested at December 31, 2021. Accordingly, the common stock was issued to the CEO at each of the quarter end vesting dates.

 

On June 21, 2022, the Company awarded 124,520 RSUs to the President and CEO under the Company’s 2019 Omnibus. Each RSU awarded to the CEO entitles him to receive one share of common stock upon vesting. The RSUs vest in equal installments over three years on the anniversary Grant date. The grant date fair value was $1.69 per share of the Company’s common stock. The stock-based compensation expense related to these RSUs totaled $17,537 for the three months ended September 30, 2022.

 

Issuance of Stock Options

 

On August 20, 2021, the Company granted, under the 2019 Omnibus Plan, stock options to purchase 1,365,835 shares of common stock to the executive management team. Twenty percent (20%) of the shares underlying the options awarded vested on the grant date, and the remaining 80% vest equally over a 5-year period, on the first, second, third, fourth and fifth anniversary of the grant date. The exercise price of the options is $7.74 per share, the grant date fair value of the stock, and the options terminate on the earlier of the tenth anniversary of the grant date or the date as of which the options were fully exercised.

 

Pursuant to a former employee Separation Agreement, dated April 11, 2022, the Company modified a former employee’s stock option award granted on August 20, 2021 pursuant to the 2019 Omnibus Plan (“2021 Options Grant”). Pursuant to the terms of the Separation Agreement of the employee, effective on July 8, 2022, (“the Separation Date”), the Company accelerated the vesting of options to purchase 74,500 shares of common stock as deemed vested, (“Accelerated Options”) and after giving effect to the Accelerated Options, extended the exercise period of the total vested outstanding and unexercised options totaling 99,333 of the 2021 Options Grant as of July 8, 2022 to one year following the Separation Date. The unvested portion of the 2021 option grant of 24,834 was canceled. The modification were remeasured as of the July 8, 2022 and the incremental difference totaled $181,154, net credit; due to the original exercise price of $7.74 is greater than the stock price of $1.80 on the remeasurement date and accordingly was recognized on July 8, 2022.

 

Stock Warrants

 

The following table summarizes warrant activity during the three months ended September 30, 2022:

 

                    
   Number of Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (Years)   Aggregate Intrinsic Value 
Outstanding and exercisable at June 30, 2022   510,372   $6.17    3.8   $- 
Granted   7,272,728    1.82    4.9    - 
Expired   (3,906)   75.00    -    - 
Exercised   -    -    -    - 
Outstanding and exercisable at September 30, 2022   7,779,194   $2.07    4.8   $4,899,997 

 

Of the above warrants, 909 expire in the fiscal year ending June 30, 2023, 109,380 expire in the fiscal year ending June 30, 2025, 35,175 expire in the fiscal year ending June 30, 2026, and 7,633,730 expire in the fiscal year ending June 30, 2027.