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SHAREHOLDERS’ EQUITY
 9 Months Ended
Mar. 31, 2025
Equity [Abstract]  
SHAREHOLDERS’ EQUITY

NOTE 9. SHAREHOLDERS’ EQUITY

 

Warrants

 

As of March 31, 2025, there were warrants outstanding to purchase 5,516,754 shares of common stock, held by certain shareholders. Each warrant initially represented the right to purchase one share of the Company’s common stock and was subject to adjustment upon the occurrence of specified events including reverse stock splits.

 

During the nine months ended March 31, 2025, the Company raised approximately $7,939 and issued 794,555 shares of common stock in connection with the exercise of outstanding warrants.

 

The Company accounts for warrants in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging - Contracts on an Entity’s Own Equity, and determined that the warrants do not meet the criteria for liability treatment thereunder.

 

At The Market (ATM) Offering

 

As a result of the sale of shares of common stock by the Company pursuant to the previously disclosed ATM Agreement between the Company and Ladenburg, the Company has raised approximately $1,621,691 (net of commissions of approximately $50,157 paid to Ladenburg) as of May 9, 2025. Of this amount, the Company raised approximately $1,486,340 (net of commissions of approximately $45,971 paid to Ladenburg) through the sale and issuance of 920,363 shares of Company common stock pursuant to the ATM Agreement during the period between September 18, 2024, through to March 31, 2025. During the three months ended March 31, 2025, the Company raised approximately $809,721 (net of commissions of approximately $25,044 paid to Ladenburg) through the sale and issuance of 481,996 shares of Company common stock pursuant to the ATM Agreement.

 

February Offering

 

On February 20, 2025, the Company entered into an underwriting agreement with Ladenburg, as representative (the February Representative) for the underwriters named in Schedule 1 thereto, relating to an underwritten public offering of 1,304,348 shares of the Company’s common stock. The public offering price for each share was $2.00 per share and the February Underwriters agreed to purchase 1,304,348 shares. The Company granted the February Underwriters a 45-day option to purchase an additional 195,652 shares of common stock at the public offering price of $2.00 per share, less the underwriting discounts and commissions. On February 20, 2025, the February Representative fully exercised the over-allotment option to purchase an additional 195,652 shares of common stock. All of the shares were sold by the Company. The February Offering closed on February 21, 2025. As a result of the over-allotment option being exercised in full, the Company raised approximately $2,645,000 (net of underwriting discounts and commissions of approximately $355,000).

 

Advisory Agreement

 

On February 29, 2024, the Company entered into an Investor Relations and Corporate Development Advisory Agreement (the “ClearThink Agreement”) with ClearThink Capital LLC (“ClearThink”) pursuant to which ClearThink provides certain advisory and investor relations services to the Company. As consideration for such services, the Company agreed pay a fee consisting of: (a) an initial grant of 5,260 restricted shares of common stock (the “Initial Grant”) and (b) a monthly fee consisting of (i) a cash fee of a $5,000 per month, and (ii) a grant of restricted common stock with a value of $4,000 per month ($12,000 per three-month period (a “Quarter”)), with the number of shares of common stock in each such Quarterly issuance (each a “Quarterly Grant”) calculated on the first business day of each Quarter based on the closing price of the Company’s common stock on the last trading day of the immediately preceding Quarter. The ClearThink Agreement remains in effect until terminated by either party after three months from the effective date. For the three and nine months ended March 31, 2025, the Company recognized $12,000 and $36,000, respectively, of expense related to the ClearThink Agreement in the accompanying condensed consolidated statements of operations. The Company issued 4,706 and 23,977 restricted stocks to ClearThink during the three and nine months ended March 31, 2025, respectively.

 

Stock-based payments under 2019 Stock Incentive Plan

 

On September 25, 2024, the Company granted its employees 99,500 shares of common stock as compensation. The Company recorded stock compensation expense of $190,045, based on a grant date fair value of $1.91 per share in the accompanying condensed consolidated statement of operations. All shares of common stock granted vested immediately.