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SHAREHOLDERS’ EQUITY
 3 Months Ended
Sep. 30, 2025
Equity [Abstract]  
SHAREHOLDERS’ EQUITY

NOTE 8. SHAREHOLDERS’ EQUITY

 

Common Stock

 

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.01 per share, of which 9,098,357 and 7,323,261 were outstanding as of September 30, 2025, and June 30, 2025, respectively.

 

Preferred Stock

 

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.01 per share, of which 4,012,276 shares have been designated Series C Convertible Preferred Stock and 5,728,723 shares have been designated Series E Convertible Preferred Stock. There were no shares of preferred stock issued or outstanding as of September 30, 2025, and June 30, 2025.

 

Warrants

 

As of September 30, 2025, there were warrants outstanding to purchase 7,935,928 shares of common stock, held by certain shareholders, with exercise prices ranging from $0.01 to $4,488 per share and a weighted-average exercise price of $10.41 per share. 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.

 

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

 

Agreement (the “ATM Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”). Pursuant to the terms of the ATM Agreement, the Company originally was permitted to sell from time to time through Ladenburg, as sales agent or principal, shares of the Company’s common stock with initial aggregate sales price of up to $3.0 million. On March 11, 2025, the Company filed a prospectus supplement (the “2025 March ATM Supplement”) to the 2024 ATM Prospectus (defined below) in connection with the offer, sale, and issuance of up to $1,376,530 shares of Common Stock. Prior to the expiration of our “shelf” registration statement on Form S-3 (File No. 333-264218), which became effective on April 20, 2022 (“2022 Shelf”), any sale of shares pursuant to the ATM Agreement were made under 2022 Shelf and included base prospectus, and under the related prospectus supplement filed with the SEC, dated September 18, 2024 (the “2024 ATM Prospectus”), as supplemented by the 2025 March ATM Supplement. On April 11, 2025, the company filed a new “shelf” registration statement on Form S-3 (File No. 333-286489), which became effective on September 10, 2025 (“2025 Shelf”), and subsequently filed prospectus supplement (the “2025 September ATM Supplement”) in connection with the offer, sale, and issuance of up to $1,211,174 shares of Common Stock under the ATM Agreement. Since the expiration of the 2022 Shelf, any sale of shares pursuant to the ATM Agreement are made under the Company’s 2025 Shelf and included base prospectus, and under the related 2025 September ATM Supplement.

 

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 $2,801,271 (net of commissions of approximately $86,639 paid to Ladenburg) as of November 10, 2025. Of this amount, the Company raised approximately $2,465,291 (net of commissions of approximately $76,248 paid to Ladenburg) through the sale and issuance of 1,557,923 shares of Company common stock pursuant to the ATM Agreement during the period between September 18, 2024, through September 30, 2025. During the three months ended September 30, 2025, the Company raised approximately $213,750 (net of commissions of approximately $6,611 paid to Ladenburg) through the sale and issuance of 123,264 shares of Company common stock pursuant to the ATM Agreement.

 

Inducement Agreements

 

On July 25, 2025, the Company entered into warrant exercise inducement offer letters (each an “Inducement Agreement”) with certain existing holders (the “Holders”) of certain outstanding Company warrants to receive new warrants (the “Series J Warrants”) to purchase up to a number of shares of the Company’s common stock equal to 200% of the number of warrant shares issued pursuant to the exercise (or prepayment) of outstanding Series G Warrants and outstanding Series H-1 Warrants (the “2025 Warrant Inducement Transaction”).

 

Pursuant to the Inducement Agreements, the Holders agreed to (i) exercise their outstanding Series G and Series H-1 Warrants at a reduced exercise price of $1.90 per share (the “Reduced Exercise Price”) to purchase an aggregate 1,545,494 shares of the Company’s common stock and (ii) prepay $1.89 per share toward the Reduced Exercise Price for the exercise of Series H-1 Warrants to purchase an additional 477,734 shares, in exchange for the Company’s agreement to further reduce the exercise price of the prepaid Series H-1 Warrants to $0.01 per share, issue Series J Warrants to purchase up to 4,046,456 shares of common stock, and reduce the exercise price of the Series H-2 Warrants to the Reduced Exercise Price for up to 1,568,680 shares. The 2025 Warrant Inducement Transaction closed on July 28, 2025.

 

As a result of the exercises of the Series G and Series H-1 Warrants, the Company issued an aggregate of 1,545,494 shares of common stock. In addition, as a result of the prepayment of the remaining Series H-1 Warrants, the Company amended such warrants to permit the purchase of 477,734 shares of common stock at an exercise price of $0.01 per share. The Company received aggregate gross proceeds of approximately $3,839,356 and raised approximately $3,332,646, net of underwriting discounts and commissions of approximately $410,542 and legal and compliance costs of $96,168.

 

Subsequent to the inducement agreements through to September 30, 2025, the Company raised approximately $982 and issued 98,174 shares of common stock in connection with the exercise of outstanding prepaid warrants.

 

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 months ended September 30, 2025, the Company recognized $12,000 of expense related to the ClearThink Agreement in the accompanying unaudited condensed consolidated statements of operations and issued 8,164 shares of restricted stock to ClearThink.