Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Sep. 10, 2023 | Dec. 31, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | INNOVATION PHARMACEUTICALS INC. | ||
Entity Central Index Key | 0001355250 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Jun. 30, 2023 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Entity Common Stock Shares Outstanding | 514,013,755 | ||
Entity Public Float | $ 9,197,344 | ||
Entity File Number | 001-37357 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 30-0565645 | ||
Entity Address Address Line 1 | 301 Edgewater Place | ||
Entity Address Address Line 2 | Suite 100 | ||
Entity Address City Or Town | Wakefield | ||
Entity Address State Or Province | MA | ||
Entity Address Postal Zip Code | 01880 | ||
City Area Code | 978 | ||
Local Phone Number | 921-4125 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Icfr Auditor Attestation Flag | false | ||
Auditor Firm Id | 6117 | ||
Auditor Name | Pinnacle Accountancy Group of Utah | ||
Auditor Location | Farmington, Utah |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Current Assets: | ||
Cash | $ 1,518,000 | $ 3,807,000 |
Prepaid expenses and other current assets | 116,000 | 145,000 |
Total Current Assets | 1,634,000 | 3,952,000 |
Equity investment | 3,806,000 | 3,978,000 |
Other Assets: | ||
Patent costs - net | 1,999,000 | 2,312,000 |
Deferred offering costs | 0 | 59,000 |
Security deposit | 78,000 | 78,000 |
Total Other Assets | 2,077,000 | 2,449,000 |
Total Assets | 7,517,000 | 10,379,000 |
Current Liabilities: | ||
Accounts payable - (including related party payables of approx. $1,511,000 and $1,511,000, respectively) | 2,985,000 | 2,567,000 |
Accrued expenses - (including related party accruals of approx. $24,000 and $12,000, respectively) | 73,000 | 92,000 |
Accrued salaries and payroll taxes - (including related party accrued salaries of approx. $1,613,000 and $1,563,000, respectively) | 1,690,000 | 1,640,000 |
Operating lease - current liability | 55,000 | 197,000 |
Convertible note payable - related party | 213,000 | 250,000 |
Accrued dividend - Series B 5% convertible preferred stock | 5,000 | 62,000 |
Total Current Liabilities | 5,021,000 | 4,808,000 |
Other Liabilities: | ||
Series B 5% convertible preferred stock liability at $1,080 stated value; 360 shares and 620 shares issued and outstanding at June 30, 2023 and 2022, respectively | 457,000 | 786,000 |
Operating lease - long term liability | 0 | 55,000 |
Total Liabilities | 5,478,000 | 5,649,000 |
Stockholders' Equity | ||
Preferred stock, $0.001 par value, 10,000,000 designated shares, no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 129,566,000 | 129,090,000 |
Accumulated deficit | (125,325,000) | (122,157,000) |
Treasury Stock, at cost (10,874,593 shares as of June 30, 2023 and 2022, respectively) | (2,254,000) | (2,254,000) |
Total Stockholders' Equity | 2,039,000 | 4,730,000 |
Total Liabilities and Stockholders' Equity | 7,517,000 | 10,379,000 |
Common Class A Member | ||
Stockholders' Equity | ||
Common Stock, value | 51,000 | 49,000 |
Common Class B Member | ||
Stockholders' Equity | ||
Common Stock, value | $ 1,000 | $ 2,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Related party payables | $ 1,511,000 | $ 1,511,000 |
Related party accruals | 24,000 | 12,000 |
Related party accrued salaries | 1,613,000 | 1,563,000 |
Series B 5% convertible preferred stock liability | $ 1,080 | $ 1,080 |
Series B 5% Preferred Stock, Shares issued | 360 | 620 |
Series B 5% Preferred Stock, Shares Outstanding | 360 | 620 |
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Designated | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Treasury Stock Shares | 10,874,593 | 10,874,593 |
Common Class A Member | ||
Treasury Stock Shares | 8,516,056 | |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 |
Common Stock, Shares Issued | 522,529,811 | 496,741,729 |
Common Stock, Shares Outstanding | 514,013,755 | 488,225,673 |
Common Class B Member | ||
Treasury Stock Shares | 2,358,537 | |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 6,692,473 | 18,000,000 |
Common Stock, Shares Outstanding | 4,333,936 | 15,641,463 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenues | $ 0 | $ 18,000 |
Operating expenses: | ||
Research and development expenses | 1,462,000 | 4,814,000 |
General and administrative expenses | 750,000 | 1,223,000 |
Officers' payroll and payroll tax expenses | 482,000 | 428,000 |
Professional fees | 245,000 | 452,000 |
Total operating expenses | 2,939,000 | 6,917,000 |
Equity in loss from equity investment | (172,000) | (22,000) |
Total Other Operating Income and (Loss) | (172,000) | (22,000) |
Loss from operations | (3,111,000) | (6,921,000) |
Other income (expenses) | ||
Other income | 0 | 172,000 |
Change in fair value of preferred stock | 0 | (177,000) |
Interest expense - debt | (28,000) | (68,000) |
Interest expense - preferred stock | (29,000) | (47,000) |
Total other income (expenses) | (57,000) | (120,000) |
Loss before provision for income taxes | (3,168,000) | (7,041,000) |
Provision for income taxes | 0 | 0 |
Net loss | $ (3,168,000) | $ (7,041,000) |
Net loss per share, basic and diluted | $ (0.01) | $ (0.01) |
Basic and Diluted Weighted Average Common Shares Outstanding | 505,767,599 | 503,867,136 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) | Total | Common stock B Member | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Common Stock A [Member] | Treasury Stock |
Balance, shares at Jun. 30, 2021 | 15,641,463 | 418,157,142 | 10,874,593 | |||
Balance, amount at Jun. 30, 2021 | $ 7,509,000 | $ 2,000 | $ 124,835,000 | $ (115,116,000) | $ 42,000 | $ (2,254,000) |
Offering cost | (718,000) | 0 | (718,000) | 0 | $ 0 | 0 |
Conversion of 4,452 preferred stock into 69,901,865 common stocks, shares | 69,901,865 | |||||
Conversion of 4,452 preferred stock into 69,901,865 common stocks, amount | 4,374,000 | 0 | 4,367,000 | 0 | $ 7,000 | 0 |
Shares issued for exercise of stock options, shares | 166,666 | |||||
Shares issued for exercise of stock options, amount | 23,000 | 0 | 23,000 | 0 | $ 0 | 0 |
Shares issued to employee for services | 8,000 | 0 | 8,000 | 0 | 0 | 0 |
Stock options issued to consultant for services | 60,000 | 0 | 60,000 | 0 | 0 | 0 |
Stock options issued to director for services | 423,000 | 0 | 423,000 | 0 | 0 | 0 |
Stock options issued to employee for services | 92,000 | 0 | 92,000 | 0 | 0 | 0 |
Net loss | (7,041,000) | $ 0 | 0 | (7,041,000) | $ 0 | $ 0 |
Balance, shares at Jun. 30, 2022 | 15,641,463 | 488,225,673 | 10,874,593 | |||
Balance, amount at Jun. 30, 2022 | 4,730,000 | $ 2,000 | 129,090,000 | (122,157,000) | $ 49,000 | $ (2,254,000) |
Offering cost | $ (59,000) | 0 | $ (59,000) | 0 | $ 0 | 0 |
Conversion of 4,452 preferred stock into 69,901,865 common stocks, shares | 329,000 | 327,000 | 25,690,759 | |||
Conversion of 4,452 preferred stock into 69,901,865 common stocks, amount | 0 | $ 2,000 | 0 | |||
Shares issued to employee for services | $ 4,000 | 0 | $ 4,000 | 0 | 0 | 0 |
Stock options issued to consultant for services | 3,000 | 0 | 3,000 | 0 | 0 | 0 |
Stock options issued to director for services | 161,000 | 0 | 161,000 | 0 | 0 | 0 |
Stock options issued to employee for services | 39,000 | 0 | 39,000 | 0 | $ 0 | 0 |
Net loss | (3,168,000) | (3,168,000) | ||||
Restricted common stock award issued to employee for services, shares | 97,323 | |||||
Restricted common stock award issued to employee for services, amount | 0 | $ 0 | 0 | 0 | $ 0 | $ 0 |
Shares surrendered by Stockholder, shares | (11,307,527) | |||||
Shares surrendered by Stockholder, amount | 0 | $ (1,000) | 1,000 | |||
Balance, shares at Jun. 30, 2023 | 4,333,936 | 514,013,755 | 10,874,593 | |||
Balance, amount at Jun. 30, 2023 | $ 2,039,000 | $ 1,000 | $ 129,566,000 | $ (125,325,000) | $ 51,000 | $ (2,254,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,168,000) | $ (7,041,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Patent write off | 0 | 141,000 |
Stock based compensation | 207,000 | 583,000 |
Amortization of patent costs | 373,000 | 382,000 |
Gain on forgiveness of loans payable | 0 | (172,000) |
Change in fair value of preferred stock | 0 | 177,000 |
Equity in loss from equity investment | 172,000 | 22,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 29,000 | 350,000 |
Accounts payable | 418,000 | 4,000 |
Accrued expenses | (19,000) | (256,000) |
Accrued officers' salaries and payroll taxes | 50,000 | (352,000) |
Operating lease liability | (197,000) | (165,000) |
Accrued dividend | 29,000 | 47,000 |
Net cash used in operating activities | (2,106,000) | (6,280,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Equity investment contribution | 0 | (4,000,000) |
Patent costs | (60,000) | (80,000) |
Net cash used in investing activities | (60,000) | (4,080,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of preferred stock warrants | 0 | 4,983,000 |
Proceeds from exercise of stock options | 0 | 23,000 |
Repayment of note payable to officer | (37,000) | (1,033,000) |
Dividend paid to Preferred stockholders | (86,000) | 0 |
Net cash provided by (used in) financing activities | (123,000) | 3,973,000 |
NET INCREASE (DECREASE) IN CASH | (2,289,000) | (6,387,000) |
CASH, BEGINNING OF YEAR | 3,807,000 | 10,194,000 |
CASH, END OF YEAR | 1,518,000 | 3,807,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest | 12,000 | 59,000 |
Cash paid for income taxes | 0 | 0 |
INVESTING AND FINANCING ACTIVITIES | ||
Cancellation of 6,980,583 Class A shares for the purchase of 13,072,730 shares of Common Stock Class B | 1,000 | 0 |
Conversion of Series B convertible preferred stock to Common stock | $ 329,000 | $ 4,374,000 |
Basis of Presentation and Natur
Basis of Presentation and Nature of Operations | 12 Months Ended |
Jun. 30, 2023 | |
Basis of Presentation and Nature of Operations | |
Basis of Presentation and Nature of Operations | 1. Basis of Presentation and Nature of Operations Innovation Pharmaceuticals Inc. was incorporated on August 1, 2005 in the State of Nevada. Effective June 5, 2017, the Company amended its Articles of Incorporation and changed its name from Cellceutix Corporation to Innovation Pharmaceuticals Inc. On February 15, 2019, the Company formed IPIX Pharma Limited (“IPIX Pharma”), a wholly-owned subsidiary incorporated under the Companies Act 2014 of Ireland. IPIX Pharma is a Private Company Limited by Shares. The subsidiary is intended to serve as a key hub for strategic collaboration with European companies and medical communities in addition to providing cost-saving efficiencies and flexibility with respect to developing Brilacidin under European Medicines Agency standards. The Company is a clinical stage biopharmaceutical company. The Company’s common stock is quoted on the OTC Pink, symbol “IPIX.” Basis of Consolidation These consolidated financial statements include the accounts of Innovation Pharmaceuticals Inc., a Nevada corporation, and our wholly-owned subsidiary, IPIX Pharma, an Ireland limited company. All significant intercompany transactions and balances have been eliminated in consolidation. There was no translation gain and loss for the years ended June 30, 2023 and 2022. Nature of Operations - Overview We are in the business of developing or licensing innovative small molecule therapies to treat diseases with significant medical need, particularly in the areas of inflammatory diseases, cancer, dermatology and anti-infectives. Our strategy is to maximize the value of our drug compound Brilacidin by advancing indications along the regulatory pathway as well as seeking additional health care-related investment opportunities with the aim of diversifying the Company’s assets. Ongoing activities include Brilacidin drug manufacturing, scientific report writing, and supportive research activities. The Company also acquired a non-controlling interest in BT BeaMedical Technologies Ltd. (“BTL”), formerly known as Squalus Medical Ltd., a private company developing a novel image guided surgical laser platform. Management is focused on other avenues of business development, including, but not limited to, joint ventures, mergers and acquisitions, strategic investments, and licensing agreements, for the purpose of diversifying corporate assets. While no assurances are expressed or implied that any agreement will be consummated in the future, the Company is committed toward executing on opportunities at hand. We currently own all development and marketing rights to our products, other than the license rights granted to Alfasigma S.p.A. in July 2019 for the development, manufacturing and commercialization of locally-administered Brilacidin for ulcerative proctitis/ulcerative proctosigmoiditis (“UP/UPS”). In order to successfully develop and market our products, we may have to partner with additional companies. Prospective partners may require that we grant them significant development and/or commercialization rights in return for agreeing to share the risk of development and/or commercialization. |
Liquidity Going Concern and Man
Liquidity Going Concern and Managements Plan | 12 Months Ended |
Jun. 30, 2023 | |
Liquidity Going Concern and Managements Plan | |
Liquidity, Going Concern and Management's Plan | 2. Liquidity, Going Concern and Management’s Plan Our financial statements were prepared assuming we will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the fiscal year ended June 30, 2023, the Company had a net loss of $3.2 million and negative cash flow from operations of $2.1 million. As of June 30, 2023, the Company has negative working capital of $3.4 million. As of June 30, 2023, the Company’s cash amounted to $1.5 million and current liabilities amounted to $5.0 million. The Company has expended substantial funds on its clinical trials and expects to continue our spending on research and development expenditures. We expect to incur further losses in the development of our business and have been dependent on funding operations from inception. These conditions raise substantial doubt about our ability to continue as a going concern. Management’s plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. However, no assurance can be given at this time as to whether we will be able to achieve these objectives. The financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 12 Months Ended |
Jun. 30, 2023 | |
Significant Accounting Policies and Recent Accounting Pronouncements | |
Significant Accounting Policies and Recent Accounting Pronouncements | 3. Significant Accounting Policies and Recent Accounting Pronouncements Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, recoverability of long-lived assets, valuation of equity grants and income tax valuation. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Cash Cash consists of bank deposits. There were no cash equivalents at June 30, 2023 and 2022. Intangible Assets - Patents Costs incurred to file patent applications and acquired intangibles are capitalized when the Company believes that there is a high likelihood that the patent will be issued and there will be future economic benefit associated with the patent. These costs are amortized on a straight-line basis over a 12 - 17 years life from the date of patent filing. All costs associated with abandoned patent applications are expensed. In addition, the Company will review the carrying value of patents for indicators of impairment on a periodic basis and if it determines that the carrying value is impaired, it values the patent at fair value. As of June 30, 2023 and 2022, carrying value of patents was approximately $1,999,000 and $2,312,000, respectively. Amortization expense for the fiscal years ended June 30, 2023 and 2022, was approximately $373,000 and $382,000, respectively. As of June 30, 2023, the Company expensed the costs associated with obtaining patents that have not yet resulted in products or gained market acceptance and the Company has or will let these patents go abandoned. During the years ended June 30, 2023 and 2022, the patent expenses were insignificant. In accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. During the years ended June 30, 2023 and 2022, the Company recorded patent write offs of approximately $0 and $141,000, respectively, and included them in general and administrative expenses. Certain Risks and Uncertainties Product Development We devote significant resources to research and development programs in an effort to discover and develop potential future product candidates. The product candidates in our pipeline are at various stages of preclinical and clinical development. The path to regulatory approval includes three phases of clinical trials in which we collect data to support an application to regulatory authorities to allow us to market a product for treatment of a specified disease. There are many difficulties and uncertainties inherent in research and development of new products, resulting in a high rate of failure. To bring a drug from the discovery phase to regulatory approval, and ultimately to market, takes many years and significant cost. Failure can occur at any point in the process, including after the product is approved, based on post-market factors. New product candidates that appear promising in development may fail to reach the market or may have only limited commercial success because of efficacy or safety concerns, inability to obtain necessary regulatory approvals, limited scope of approved uses, reimbursement challenges, difficulty or excessive costs of manufacture, alternative therapies or infringement of the patents or intellectual property rights of others. Uncertainties in the FDA approval process and the approval processes in other countries can result in delays in product launches and lost market opportunities. Consequently, it is very difficult to predict which products will ultimately be submitted for approval, which have the highest likelihood of obtaining approval and which will be commercially viable and generate profits. Successful results in preclinical or clinical studies may not be an accurate predictor of the ultimate safety or effectiveness of a drug or product candidate. Expenditures for research, development, and engineering of products are expensed as incurred. For the years ended June 30, 2023 and 2022, the Company incurred approximately $1.5 million and $4.8 million of research and development costs, respectively. Concentrations of Credit Risk The Company maintains its cash in bank deposit and checking accounts that at times exceed federally insured limits of $250,000. Approximately $1.3 million is subject to credit risk at June 30, 2023. However, these cash balances are maintained at creditworthy financial institutions. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. Commitments and Contingencies The Company follows Subtopic 450-20 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. The Company’s legal costs associated with contingent liabilities are recorded to expense as incurred. Accrued Outsourcing Costs Substantial portions of our preclinical studies and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors, or collectively “CROs.” These CROs generally bill monthly or quarterly for services performed, or bill based upon milestone achievement. For preclinical studies, we accrue expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. We monitor patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to us by the CROs, correspondence with the CROs and clinical site visits. Our estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the status of each program and total program spending. We periodically evaluate the estimates to determine if adjustments are necessary or appropriate based on information we receive. Income Taxes Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has generated net losses since inception and accordingly has not recorded a provision for income taxes. The deferred tax assets were primarily comprised of federal and state tax net operating loss, or NOL, carryforwards. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these tax assets, a full valuation allowance has been established to offset the deferred tax assets. Additionally, the future utilization of the NOL carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. If necessary, the deferred tax assets will be reduced by any carryforwards that expire prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. Basic and Diluted Loss per Share Basic and diluted loss per share are computed based on the weighted-average common shares and common share equivalents outstanding during the period. Except with respect to certain voting, conversion and transfer rights and as otherwise expressly provided in the Company’s Articles of Incorporation or required by applicable law, shares of the Company’s Class A common stock and Class B common stock have the same rights and privileges and rank equally, share ratably and are identical in all respects as to all matters. Accordingly, basic and diluted net income (loss) per share are the same for both classes. Common share equivalents consist of stock options, restricted stock, warrants, convertible related party notes payable, and convertible preferred stock. Common share equivalents were excluded from the computation of diluted earnings per share for the years ended June 30, 2023 and 2022, because their effect was anti-dilutive. Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows: Year Ended June 30, 2023 2022 Net loss per share, basic and diluted $ (0.01 ) $ (0.01 ) Weighted average shares outstanding: Class A common stock 495,764,410 488,225,673 Class B common stock 10,003,189 15,641,463 Total weighted average shares outstanding 505,767,599 503,867,136 Antidilutive securities not included: Stock options 7,778,269 8,268,269 Stock options arising from convertible note payable and accrued interest 457,467 508,448 Restricted stock grants 19,463 58,392 Convertible preferred stock 35,571,821 36,000,000 Total 43,827,020 44,835,109 Treasury Stock The Company accounts for treasury stock using the cost method. The 10,874,593 treasury shares include 8,516,056 shares of Class A common stock and 2,358,537 shares of Class B common stock held in treasury, and they were purchased at a total cumulative cost of approximately $2.3 million as of June 30, 2023 and 2022 (see Note 15. Equity Transactions). Treasury stock, representing shares of the Company’s common stock that have been acquired for payroll tax withholding on vested stock grants and to satisfy the exercise price on vested stock options, is recorded at its acquisition cost and these shares are not considered outstanding. Revenue Recognition The Company follows the guidance of accounting standard ASC 606, Revenue from Contracts with Customers, and all the related amendments. The Company has acquired and further developed license rights to Functional Intellectual Property (“functional IP”) that it licenses to customers for defined license periods. A functional IP license is a license to intellectual property that has significant standalone functionality that does not include supporting or maintaining the intellectual property during the license period. The Company’s patented drug formulas have significant standalone functionality in their abilities to treat a disease or condition. Further, there is no expectation that the Company will undertake any activities to change the functionality of the drug formulas during the license periods (see Note 8. Exclusive License Agreement and Patent Assignment Agreement). Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. If a promised good or service is not distinct, it is combined with other performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The terms of the Company’s licensing agreement include the following: (i) up-front fees; (ii) milestone payments related to the achievement of development, regulatory, or commercial goals; and (iii) royalties on net sales of licensed products. License of Intellectual Property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. If not distinct, the license is combined with other performance obligations in the contract. For licenses that are combined with other performance obligations, the Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of each arrangement that includes developmental and regulatory milestone payments, the Company evaluates whether the achievement of each milestone specifically relates to the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service within a performance obligation. If the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service and the receipt of the payment is based upon the achievement of the milestone, the associated milestone value is allocated to that distinct good or service. If the milestone payment is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the amount is allocated to all performance obligations using the relative standalone selling price method. The Company also evaluates the milestone to determine whether they are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated, otherwise, such amounts are constrained and excluded from the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the transaction price. Any such adjustments to the transaction price are allocated to the performance obligations on the same basis as at contract inception. Amounts allocated to a satisfied performance obligation shall be recognized as revenue, or as a reduction of revenue, in the period in which the transaction price changes. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied) in accordance with the royalty recognition constraint. Accounting for Stock Based Compensation The stock-based compensation expense incurred by the Company for employees, non-employees and directors in connection with its equity incentive plan is based on ASC 718, and the fair market value of the equity awards is measured at the grant date. Awards with service-based vesting conditions only: Expense is recognized on a straight-line basis over the requisite service period of the award. Awards with performance-based vesting conditions: Expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight-line basis from the award date. The award will continue to be expensed on a straight-line basis over the requisite service period basis until a higher performance-based condition is met, if applicable. Awards with market-based vesting conditions: Expense recognized on a straight-line basis over the requisite service period, which is the lesser of the derived service period or the explicit service period if one is present. However, if the market condition is satisfied prior to the end of the requisite service period, the Company will accelerate all remaining expense to be recognized. Awards with both performance-based and market-based vesting conditions: If an award vesting or exercisability is conditional upon the achievement of either a market condition or performance or service conditions, the requisite service period is generally the shortest of the explicit, implicit, and derived service period. We have elected to use the Black-Scholes-Merton pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units are measured based on the fair market values of the underlying stock on the dates of grant. The grant date is also the valuation date for the non-employee awards. We recognize stock-based compensation using the straight-line method. Investments For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. For those investments in which the Company does not have such significant influence, the Company applies the accounting guidance for certain investments in debt and equity securities. Recent Accounting Pronouncements The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). This standard requires a financial asset to be presented at the net amount expected to be collected. The financial assets of the Company in scope of ASU 2016-13 will primarily be accounts receivable. The Company will estimate an allowance for expected credit losses on accounts receivable that result from the inability of customers to make required payments. In estimating the allowance for expected credit losses, consideration will be given to the current aging of receivables, historical experience, and a review for potential bad debts. The Company adopted this guidance in the first quarter of fiscal 2023 and it did not have an impact on its results of operations, financial position, and disclosures. |
Equity Investment
Equity Investment | 12 Months Ended |
Jun. 30, 2023 | |
Equity Investment | |
Equity Investment | 4. Equity Investment BT BeaMedical Technologies Ltd. (formerly known as Squalus Medical Ltd.) On June 9, 2022, the Company entered into a Series A Preferred Share Purchase Agreement (the “Purchase Agreement”) with BT BeaMedical Technologies Ltd. (formerly known as Squalus Medical Ltd.), a company established under the laws of the State of Israel (“BTL”), pursuant to which the Company purchased 55,556 shares of BTL’s Series A Redeemable Preferred Shares (the “Series A Shares”) and a warrant to purchase 27,778 Series A Shares for aggregate consideration of $4,000,000, or approximately $72.00 per Series A Share. Following the closing under the Purchase Agreement, the Company owns approximately 35.7% of BTL’s issued and outstanding equity securities and approximately 41.6% of BTL’s equity securities on a fully diluted basis. The Company also entered into customary investor rights and indemnification agreements with BTL. The Company therefore recorded an equity investment on our June 30, 2023 and 2022 consolidated balance sheets. The Company’s equity in losses in excess of its investment are accounted for under the equity method and consisted of the following as of June 30, 2023 and June 30, 2022 (rounded in nearest thousand): June 30, June 30, 2023 2022 BT BeaMedical Technologies Ltd. Ownership Interest 35.7 % 35.7 % Carrying Amount Total contributions $ 4,000,000 $ 4,000,000 Less: Share of the loss in investment in BTL (194,000 ) (22,000 ) Equity losses in excess of investment $ 3,806,000 $ 3,978,000 The Company invested $4,000,000 in BTL as of June 30, 2023 and 2022. The cash balance in BTL at June 30, 2023 was approximately $0.6 million and the short-term time deposits in BTL at June 30, 2023 was approximately $2.7 million. During the year ended June 30, 2023, BTL incurred a loss of approximately $481,000, and accordingly, the Company recorded its share of the loss in investment in BTL, in accordance with the provisions in the purchase agreement, of approximately $172,000 in the accompanying consolidated statement of operations. During for the period from June 9, 2022 (date of acquisition) to June 30, 2022, BTL incurred a loss of approximately $63,000, and accordingly, the Company recorded its share of the loss in investment in BTL, in accordance with the provisions in the purchase agreement, of approximately $22,000 in the accompanying consolidated statement of operations. Summarized balance sheet information for the Company’s equity method investee BTL as of June 30, 2023 and 2022 is presented in the following table (rounded to nearest thousand): June 30, June 30, BT BeaMedical Technologies Ltd. 2023 2022 Assets Cash $ 575,000 $ 3,850,000 Short term investment 2,694,000 — Other current assets 144,000 1,000 Total current assets $ 3,413,000 $ 3,851,000 Long-term assets 162,000 — Total assets $ 3,575,000 $ 3,851,000 Liabilities and equity Current liabilities $ 230,000 $ 195,000 Long-term liabilities 101,000 — Total liabilities $ 331,000 $ 195,000 Equity Equity $ 3,804,000 $ 3,735,000 Accumulated deficits (560,000 ) (79,000 ) Total equity 3,244,000 3,656,000 Total liabilities and equity $ 3,575,000 $ 3,851,000 Summarized income statement information for the Company’s equity method investee BTL is presented in the following table for the period from June 9, 2022 (date of acquisition) to June 30, 2022 and for the year ended June 30, 2023 (rounded to nearest thousand): For the period From June 9, 2022 For the Year Ended (date of acquisition) June 30, to June 30, BT BeaMedical Technologies Ltd. 2023 2022 Net sales and revenue $ 25,000 $ — Research and development costs $ 533,000 $ 7,000 Administrative expenses 100,000 55,000 Total operating expense 633,000 62,000 Loss from operations $ (608,000 ) $ (62,000 ) Other income (expense) 127,000 (1,000 ) Net loss $ (481,000 ) $ (63,000 ) |
Patents net
Patents net | 12 Months Ended |
Jun. 30, 2023 | |
Patents net | |
Patents, Net | 5. Patents, net Patents, net consisted of the following (rounded to nearest thousand): Useful life (years) June 30, 2023 June 30, 2022 Purchased Patent Rights- Brilacidin and related compounds 14 $ 4,082,000 $ 4,082,000 Purchased Patent Rights-Anti-microbial- surfactants and related compounds 12 144,000 144,000 Patents - Kevetrin and related compounds 17 1,206,000 1,146,000 Total patents cost 5,432,000 5,372,000 Less: Accumulated amortization (3,433,000 ) (3,060,000 ) Patents, net $ 1,999,000 $ 2,312,000 The patents are amortized on a straight-line basis over the useful lives of the assets, determined to be 12-17 years from the date of acquisition. Amortization expense for the years ended June 30, 2023 and 2022 was approximately $373,000 and $382,000, respectively. The Company wrote off the patent costs relating to Kevetrin of approximately $141,000 during the fourth quarter of 2022 due to discontinuation of its Kevetrin program. At June 30, 2023, the future amortization period for all patents was approximately 2.18 years to 16.75 years. Future estimated amortization expenses are approximately $372,000 for each year from 2024 to 2025, $362,000 for the year ending June 30, 2026, $360,000 for the year ending June 30, 2027 and a total of $533,000 for the year ending June 30, 2028 and thereafter. |
Accrued Expenses Related Partie
Accrued Expenses Related Parties and Other | 12 Months Ended |
Jun. 30, 2023 | |
Accrued Expenses Related Parties and Other | |
Accrued Expenses - Related Parties and Other | 6. Accrued Expenses - Related Parties and Other Accrued expenses consisted of the following (rounded to nearest thousand): June 30, 2023 June 30, 2022 Accrued research and development consulting fees $ 49,000 $ 80,000 Accrued rent - related parties (Note 11. Related Party Transactions) 8,000 8,000 Accrued interest - related parties (Note 12. Convertible Note Payable - Related Party) 16,000 4,000 Total $ 73,000 $ 92,000 |
Accrued Salaries and Payroll Ta
Accrued Salaries and Payroll Taxes Related Parties and Other | 12 Months Ended |
Jun. 30, 2023 | |
Accrued Salaries and Payroll Taxes Related Parties and Other | |
Accrued Salaries and Payroll Taxes - Related Parties and Other | 7. Accrued Salaries and Payroll Taxes - Related Parties and Other Accrued salaries and payroll taxes consisted of the following (rounded to nearest thousand): June 30, 2023 June 30, 2022 Accrued salaries - related parties $ 1,543,000 $ 1,492,000 Accrued payroll taxes - related parties 71,000 71,000 Withholding tax - payroll 76,000 77,000 Total $ 1,690,000 $ 1,640,000 |
Exclusive License Agreement and
Exclusive License Agreement and Patent Assignment Agreement | 12 Months Ended |
Jun. 30, 2023 | |
Exclusive License Agreement and Patent Assignment Agreement | |
Exclusive License Agreement and Patent Assignment Agreement | 8. Exclusive License Agreement and Patent Assignment Agreement On July 18, 2019, the Company entered into an Exclusive License Agreement (the “License Agreement”) with Alfasigma S.p.A., a global pharmaceutical company (“Alfasigma”), granting Alfasigma the worldwide right to develop, manufacture and commercialize locally-administered Brilacidin for the treatment of UP/UPS. Under the terms of the License Agreement, Alfasigma made an initial upfront non-refundable payment of $0.4 million to the Company in July, 2019 and will make additional payments of up to $24.0 million to the Company based upon the achievement of certain milestones, including a $1.0 million payment due following commencement of the first Phase 3 clinical trial of Brilacidin for UP/UPS and an additional $1.0 million payment upon the filing of a marketing approval application with the U.S. Food and Drug Administration or the European Medicines Agency. At this time, Alfasigma has completed Phase 1 clinical research with Brilacidin. In addition to the milestones, Alfasigma will pay a royalty to the Company equal to six percent of net sales of Brilacidin for UP/UPS, subject to adjustment as provided in the License Agreement. The Company received an initial upfront non-refundable payment of $0.4 million and reported as revenue in July, 2019 and the Company did not receive any further milestone payment during the years ended June 30, 2023 and 2022. On April 13, 2022, the Company entered a Patent Assignment Agreement with Fox Chase Chemical Diversity Center, Inc. (“FCCDC”), pursuant to which the Company assigned the title, rights and interest in and to the applications of certain patents in accordance with an earlier collaborative research agreement related to antifungal drug discovery work to which the Company had rights. On May 3, 2022, the Company received payment of $18,000 from FCCDC based on FCCDC’s third-party license of broad-spectrum anti-fungals and a separate agreement between the Company and FCCDC. Some of the preliminary data used in the FCCDC research program had been obtained as part of an earlier collaboration with the Company supported by funding from the National Institutes of Health. On January 18, 2023, the Company was notified by FCCDC that its third-party license with Basilea Pharmaceutica for development of broad-spectrum antifungals was terminated by the licensee. |
Operating Leases
Operating Leases | 12 Months Ended |
Jun. 30, 2023 | |
Operating Leases | |
Operating Leases | 9. Operating Leases Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. We have elected to account for these lease and non-lease components as a single lease component. We are also electing not to apply the recognition requirements to short-term leases of twelve months or less and instead will recognize lease payments as expense on a straight-line basis over the lease term. The Company determined that the operating lease right-of-use asset was fully impaired on December 31, 2019. As such, the Company recognized an impairment loss of approximately $643,000, after recording amortization of the right-of-use asset for July, August, and September 2019 totaling approximately $27,000, resulting in a carrying value of $0 since December 31, 2019. The Company vacated the leased office space in December 2019, and in January 2020 the Company initiated a lawsuit against the lessor relating to an automatic extension of the lease for the office space and related matters (See Note 10. Commitments and Contingencies). The components of lease expense and supplemental cash flow information related to leases for the year are as follows: Year Ended June 30, 2023 Lease Cost Operating lease cost (included in general and administrative in the Company’s consolidated statement of operations) $ 26,000 Variable lease cost 12,000 $ 38,000 Other Information Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2023 $ 197,000 Weighted average remaining lease term – operating leases (in years) 0.25 Average discount rate – operating leases 18 % The supplemental balance sheet information related to leases for the period is as follows: At June 30, 2023 Operating leases Short-term operating lease liabilities $ 55,000 Long-term operating lease liabilities — Total operating lease liabilities $ 55,000 The following table provides maturities of the Company’s lease liabilities at June 30, 2024 as follows: Operating Leases Fiscal Year Ending June 30, 2024 (remaining 3 months) $ 56,000 Total lease payments 56,000 Less: Imputed interest/present value discount (1,000 ) Present value of lease liabilities $ 55,000 Operating lease cost for the years ended June 30, 2023 and 2022 was approximately $26,000 and $59,000, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2023 | |
Commitments and contingencies (Note 10) | |
Commitments and Contingencies | 10. Commitments and Contingencies Litigation On January 22, 2020, the Company filed a complaint against Cummings Properties, LLC in the Superior Court of the Commonwealth of Massachusetts (C.A. No. 20-77CV00101), seeking, among other things, declaratory relief that the lease terminated in September 2018, as the Company’s prior principal executive offices did not automatically extend for an additional five years, return of the Company’s security deposit, and damages. On August 29, 2023, the trial for this case commenced and as of September 28, 2023, this trial is ongoing. The Company is currently unable to determine the probability of the trial outcome or reasonably estimate the loss or gain, if any. Contractual Commitments The Company has total non-cancellable contractual minimum commitments of approximately $0.6 million to contract research organizations as of June 30, 2023. Expenses are recognized when services are performed by the contract research organizations. Contingent Liability - Disputed Invoices The Company accrued payroll to Dr. Krishna Menon, ex-President of Research of approximately $1,443,000 for his past services with the Company, and this amount was included in accrued salaries and payroll taxes (see Note 7. Accrued Salaries and Payroll Taxes). As described in Note 11. Related Party Transactions, the Company has a payable to Kard Scientific, Inc. (“KARD”) of approximately $1,486,000 for its research and development expenses and this amount was included in accounts payable. KARD is a company owned by Dr. Menon. Dr. Menon’s employment was terminated with the Company on September 18, 2018, and Dr. Menon resigned from the Company’s Board of Directors on December 11, 2018. Dr. Menon, on behalf of himself and KARD, demanded payment of these amounts in October 2019; however, the Company disputes the underlying basis for these amounts and notified Dr. Menon in November 2019 of the Company’s intent not to pay them. As of June 30, 2023 and 2022, all of the above disputed invoices were reflected as current liabilities. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | 11. Related Party Transactions Pre-clinical Studies The Company previously engaged KARD to conduct specified pre-clinical studies. The Company did not have an exclusive arrangement with KARD. All work performed by KARD needed prior approval by the executive officers of the Company, and the Company retained all intellectual property resulting from the services by KARD. The Company no longer uses KARD to conduct research study. At June 30, 2023 and 2022, the accrued research and development expenses payable to KARD was approximately $1,486,000 and this amount was included in accounts payable. Dr. Menon, the Company’s ex-principal shareholder and Director, on behalf of himself and KARD, demanded payment of these amounts in October 2019; however, the Company disputes the underlying basis for these amounts and notified Dr. Menon in November 2019 of the Company’s intent not to pay them. Since September 1, 2013, the Company no longer leases space from KARD. As of June 30, 2023 and 2022, rent payables to KARD of approximately $8,000, were included in accrued expenses. |
Convertible Note Payable Relate
Convertible Note Payable Related Party | 12 Months Ended |
Jun. 30, 2023 | |
Convertible Note Payable Related Party | |
Convertible Note Payable - Related Party | 12. Convertible Note Payable - Related Party The Ehrlich Promissory Note C is an unsecured demand note with Mr. Ehrlich, the Company’s Chairman and CEO, that originated in 2010, bears 9% simple interest per annum and is convertible into the Company’s Class A common stock at $0.50 per share. On December 29, 2010, the Company issued 18,000,000 Equity Incentive Options to purchase Class B common stock to Mr. Ehrlich, which are exercisable at $0.11 per share. On May 8, 2012, the Company did not have the ability to repay the Ehrlich Promissory Note C loan of approximately $2,022,000 and agreed to change the interest rate from 9% simple interest to 10% simple interest, and the Company issued 2,000,000 Equity Incentive Options exercisable at $0.51 per share equal to 110% of the closing bid price of $0.46 per share on May 7, 2012. All these stock options were valid for ten years from the date of issuance and expired in May, 2022. During the years ended June 30, 2023 and 2022, the Company repaid the principal of $37,000 and $1,033,000, respectively to Mr. Ehrlich. As of June 30, 2023 and 2022, the principal balance of this convertible note payable to Mr. Ehrlich was approximately $213,000 and $250,000, respectively. As of June 30, 2023 and 2022, the balance of accrued interest payable was $16,000 and $4,000, respectively (see Note 6. Accrued Expenses - Related Parties and Other). As of June 30, 2023 and 2022, the total outstanding balances of principal and interest were approximately $229,000 and $254,000, respectively. |
Loan Payable
Loan Payable | 12 Months Ended |
Jun. 30, 2023 | |
Loan Payable | |
Loan Payable | 13. Loan payable On May 10, 2020 and April 19, 2021, the Company received loan proceeds in the amount of approximately $93,000 and $79,000, respectively, under the Paycheck Protection Program (“PPP”) and it was recorded under loan payable. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. During the year ended June 30, 2022, the Company obtained the approval of the forgiveness of the above mentioned two loans, and the Company recorded the total loan forgiveness of $172,000 under other income. |
Equity Incentive Plans StockBas
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding | 12 Months Ended |
Jun. 30, 2023 | |
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding | |
Equity Incentive Plans, Stock-Based Compensation, Exercise of Options and Warrants Outstanding | 14. Equity Incentive Plans, Stock-Based Compensation, Exercise of Stock Options and Warrants Outstanding Stock-based Compensation - Stock Options 2016 Equity Incentive Plan (the “2016 Plan”) On June 30, 2016, the Board of Directors adopted the Company’s 2016 Plan. The 2016 Plan became effective upon adoption by the Board of Directors on June 30, 2016. On February 23, 2020, the Board of Directors approved an amendment to Section 4.1 of the 2016 Plan to increase the annual limit on the number of awards under such Plan to outside directors from 250,000 to 1,500,000. On October 10, 2021, the Board of Directors approved amendments to the 2016 Plan to increase the number of shares of common stock available for issuance thereunder to 225,000,000 shares and to increase the annual limit on the number of awards under such Plan to outside directors from 1,500,000 to 5,000,000, among other changes. Up to 225,000,000 shares of the Company’s Class A common stock may be issued under the 2016 Plan (subject to adjustment as described in the 2016 Plan). Stock Options The fair value of stock options granted during the year ended June 30, 2022 was estimated on the date of grant using the Black-Scholes-Merton Model that uses assumptions noted in the following table. There was no option grant during the year ended June 30, 2023. Year ended June 30, 2022 Expected term (in years) 5-10 Expected stock price volatility 80.84% to 112.37 % Risk-free interest rate 0.69% to 1.61 % Expected dividend yield 0 The components of stock-based compensation expense included in the Company’s Statements of Operations for the years ended June 30, 2023 and 2022 are as follows (rounded to nearest thousand): Years ended June 30, 2023 2022 Research and development expenses $ 46,000 $ 160,000 General and administrative expenses 161,000 423,000 Total stock-based compensation expense $ 207,000 $ 583,000 During the year ended June 30, 2023 and 2022 Directors and Employee On October 10, 2021, the Compensation Committee approved the issuance of 1 million stock options to purchase shares of the Company’s common stock each to 2 independent directors of the Company, and 1 million stock options to purchase shares of Company’s common stock to Mr. Ehrlich, the CEO, which are exercisable for 10 years at $0.24 per share of common stock. These 3 million stock options with 1 year vesting period were valued at approximately $585,000. During the years ended June 30, 2023 and 2022, the Company recorded approximately $161,000 and $423,000 of stock-based compensation costs, respectively. The assumptions used in the Black-Scholes-Merton option-pricing model are disclosed above. On October 10, 2021, the Company also issued to Ms. Jane Harness, the Senior Vice President, Clinical Sciences and Portfolio Management of the Company, 500,000 stock options to purchase common stock, which are exercisable for 10 years at $0.24 per share of common stock. These stock options with 1 year vesting period were valued at approximately $98,000. During the years ended June 30, 2023 and 2022, the Company recorded approximately $27,000 and $71,000 of related stock-based compensation cost, respectively. The assumptions used in the Black-Scholes-Merton option-pricing model are disclosed above. On September 11, 2020, the Company issued to Ms. Harness 58,394 shares of the Company’s common stock. The Company also issued 172,987 stock options to purchase common stock. These stock options with 3 years vesting period were valued at approximately $33,000 and these 58,394 shares of the Company’s common stock were valued at approximately $13,000, based on the closing bid price as quoted on the OTC on September 11, 2020 at $0.22 per share. During the years ended June 30, 2023, the Company recorded approximately $15,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $11,000 of stock option expense and $4,000 of stock awards. During the years ended June 30, 2022, the Company recorded approximately $15,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $11,000 of stock option expense and $4,000 of stock awards. On September 1, 2019, the Company issued to Ms. Harness 58,394 shares of the Company’s common stock. The Company also issued 172,987 stock options to purchase common stock. These stock options with 3 years vesting period were valued at approximately $20,000, based on the closing bid price as quoted on the OTC on August 30, 2019 at $0.132 per share. During the years ended June 30, 2023, the Company recorded approximately $1,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $1,000 of stock option expense. During the years ended June 30, 2022, the Company recorded approximately $9,000 of stock-based compensation expense in connection with the foregoing equity awards, including approximately $6,000 of stock option expense and $3,000 of stock awards. Consultants On January 1, 2022, the Company agreed to issue stock options to purchase 75,000 shares of the Company’s common stock to one consultant for his one-year contract. These stock options were issued with an exercise price of $0.044 per share and vest 33 1/3% on January 1, 2022, 33 1/3% on July 1, 2022 and 33 1/3% on January 1, 2023. The value of these stock options was approximately $3,000. During the years ended June 30, 2023 and 2022, the Company recorded approximately $1,000 and $2,000 of related stock-based compensation. The assumptions used in the Black-Scholes-Merton option-pricing model are disclosed above. On July 30, 2021, the Company agreed to issue stock options to purchase 100,000 shares of the Company’s common stock to one consultant for his one-year contract. These stock options were issued with an exercise price of $0.27 per share and vest 33 1/3% on July 30, 2021, 33 1/3% on January 30, 2022, and 33 1/3% on July 30, 2022. The value of these stock options was approximately $19,000. During the years ended June 30, 2023 and 2022, the Company recorded approximately $2,000 and $18,000 of related stock-based compensation, respectively. The assumptions used in the Black-Scholes-Merton option-pricing model are disclosed above. On July 1, 2021, the Company agreed to issue stock options to purchase 225,000 shares of the Company’s common stock to one consultant for his one-year contract. These stock options were issued with an exercise price of $0.21 per share and vest 33 1/3% on July 1, 2021, 33 1/3% on January 1, 2022, and 33 1/3% on July 1, 2022. The value of these stock options was approximately $33,000. During the years ended June 30, 2023 and 2022, the Company recorded $0 and approximately $32,000 of related stock-based compensation, respectively. The assumptions used in the Black-Scholes-Merton option-pricing model are disclosed above. Exercise of Stock Options There was no exercise of stock options to purchase Class B common stock during the years ended June 30, 2023 and 2022. During the year ended June 30, 2022, the Company received approximately $23,000 of net proceeds from the exercise of 166,666 stock options to purchase Class A common stock at $0.14 per share. Forfeiture of Stock Options There was forfeiture of 490,000 stock options and 2,245,000 stock options to purchase Class A common stock during the years ended June 30, 2023 and 2022, respectively, relating to the expiry of stock options of consultants. Stock Options Issued and Outstanding The following table summarizes all stock option activity under the Company’s equity incentive plans: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2021 6,779,935 $ 0.35 4.45 $ 345,923 Granted 3,900,000 $ 0.24 8.75 — Exercised (166,666 ) $ 0.14 — — Forfeited/expired (2,245,000 ) $ 0.54 — — Outstanding at June 30, 2022 8,268,269 $ 0.25 6.91 $ — Granted — $ — — — Exercised — $ — — — Forfeited/expired (490,000 ) $ 0.50 — — Outstanding at June 30, 2023 7,778,269 $ 0.23 6.31 $ — Exercisable at June 30, 2023 7,720,607 $ 0.23 6.30 $ — Unvested stock options at June 30, 2023 57,662 $ 0.22 7.21 $ — Restricted Stock Awards Outstanding The following summarizes our restricted stock activity: Weighted Average Number of Grant Date Shares Fair Value Total awards outstanding at June 30, 2021 116,786 $ 0.22 Total shares granted — $ — Total shares vested (58,394 ) $ 0.25 Total shares forfeited — $ — Total unvested shares outstanding at June 30, 2022 58,392 $ 0.19 Total shares granted — $ — Total shares vested (38,928 ) $ 0.18 Total shares forfeited — $ — Total unvested shares outstanding at June 30, 2023 19,464 $ 0.22 Scheduled vesting for outstanding restricted stock awards at June 30, 2023 is as follows: Year Ending June 30, 2024 Total Scheduled vesting 19,464 19,464 As of June 30, 2023, there was approximately $1,000 of net unrecognized compensation cost related to unvested restricted stock-based compensation arrangements. This compensation is recognized on a straight-line basis resulting in approximately $1,000 of compensation expected to be expensed over the next twelve months, and the total unrecognized stock-based compensation expense having a weighted average recognition period of 0.2 years. |
Equity Transactions
Equity Transactions | 12 Months Ended |
Jun. 30, 2023 | |
Equity Transactions | |
Equity Transactions | 15. Equity Transactions $30 million Class A Common Stock Purchase Agreement with Aspire Capital On July 31, 2020, the Company entered into the 2020 Stock Purchase Agreement (the “2020 Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $30.0 million of the Company’s common stock over the 24-month term of the Agreement. In consideration for entering into the 2020 Purchase Agreement, the Company issued to Aspire Capital 6,250,000 shares of its Class A Common Stock as a commitment fee. The commitment fee of approximately $1.4 million was recorded as deferred financing costs and additional paid-in capital and this asset was be amortized over the life of the 2020 Purchase Agreement. All deferred offering costs were fully amortized on July 31, 2022 (date of expiration of the agreement). During the period from July 1, 2022 to July 31, 2022 (date of expiration of the agreement), the Company did not sell any shares to Aspire Capital. During the period from July 31, 2020 to June 30, 2022, the Company generated proceeds of approximately $4.6 million under the 2020 Purchase Agreement with Aspire Capital from the sale of approximately 22.5 million shares of its common stock. Series B-2 5% convertible preferred stock (“2020 Series B-2 5% convertible preferred stock”) On December 4, 2020, the Company entered into a securities purchase agreement (the “Series B-2 Securities Purchase Agreement”) with KIPS Bay Select LP for the sale of an aggregate of 5,089 shares of the Company’s Series B-2 5% convertible preferred stock (the “Series B-2 preferred stock”), for aggregate gross proceeds of approximately $5.0 million. An initial closing for the sale of 3,053 shares of the Series B-2 preferred stock closed on December 9, 2020 for aggregate gross proceeds of approximately $3.0 million, and a second closing for the sale of 2,036 shares of the Series B-2 preferred stock closed on February 8, 2021 for aggregate gross proceeds of approximately $2.0 million. Under the Series B-2 Securities Purchase Agreement, the Company also issued to the investors warrants to purchase up to an additional 10,178 shares of preferred stock. The Series B-2 preferred stock is mandatorily redeemable under certain circumstances and, as such, is presented as a liability on the consolidated balance sheets. The Company has elected to measure the value of its preferred stock using the fair value method with offsetting discounts associated with the fair value allocated to the warrants and for the intrinsic value attributed to the beneficial conversion feature (“BCF”). The fair value of the Series B-2 preferred stock (without the warrants) will be assessed at each subsequent reporting date with changes in fair value recorded in the profit and loss as a separate line item below the “loss from operations” section (See ASC 480-10-35-5). The warrants issued in connection with the Series B-2 preferred stock are deemed to be free standing equity instruments and are recorded in permanent equity under additional paid in capital, based on a relative fair value allocation of proceeds, that is the warrants’ relative fair value to the Series B-2 preferred stock fair value (without the warrants), with an offsetting discount to the Series B-2 preferred stock. Given that the Series B-2 preferred stock is convertible at any time under these features, the underlying warrant discounts were accreted upon issuance and recorded as interest, resulting in no remaining discount to the Series B-2 preferred stock liability after the issuance. The Company recorded the December 9, 2020 issuance of 3,053 shares Series B-2 Preferred Stock at approximately $2.1 million and the underlying Series 1 and Series 2 warrants at approximately $0.9 million in total by allocating the gross proceeds to Series B-2 preferred stock (without the warrants) and warrants based on their relative fair values or direct valuation as appropriate. The Company recorded BCF of approximately $1.8 million associated with the issuance of the 3,053 shares of Series B-2 preferred stock to additional paid-in capital. The Company then recorded interest of approximately $2.7 million for the BCF and warrant discounts as a first day interest given that the Series B-2 convertible preferred shares can be converted at any time to common stock and given no set term. The issuance costs associated with the Series B-2 preferred stock transaction were attributed to the Series B-2 preferred stock (without the warrants) and to the Series 1 and Series 2 warrants based on their relative fair values. The issuance costs attributed to the warrants of approximately $10,000 were reflected as a reduction to additional paid-in capital. The issuances costs associated with the Series B-2 preferred stock liability of $25,000 was recorded immediately as an element of interest cost, which are reflected in interest expense - preferred stock on December 11, 2020. The Company recorded the February 8, 2021 issuance of 2,036 shares Series B-2 Preferred Stock at approximately $1.5 million and the underlying Series 1 and Series 2 warrants at approximately $0.5 million in total by allocating the gross proceeds to Series B-2 preferred stock (without the warrants) and warrants based on their relative fair values or direct valuation as appropriate. The Company recorded BCF of approximately $1.5 million associated with the issuance of the 2,036 shares of Series B-2 preferred stock to additional paid-in capital. The Company then recorded interest of approximately $2.0 million for the BCF and warrant discounts as a first day interest given that the Series B-2 convertible preferred shares can be converted at any time to common stock and given no set term. Underlying Series B-2 preferred stock dividends, paid quarterly, was accrued as interest (given the liability classification of the Series B-2 preferred stock) on a daily basis given fixed dividend terms under the Series B-2 preferred stock. The 5% accrued dividend is reported in interest expense-preferred stock in the consolidated statements of operation. The Company accrued 5% accrued dividend of $29,000 and $47,000 during the years ended June 30, 2023 and 2022, respectively. The unpaid accrued dividends of $5,000 and $62,000 was included under current liability as of June 30, 2023 and 2022, respectively. Terms of the 2020 Series B-2 5% convertible preferred stock The rights and preferences of the preferred stock are set forth in a Certificate of Designation of Preferences, Rights and Limitations of Series B-2 5% Convertible Preferred Stock filed with the Nevada Secretary of State on December 4, 2020 (the “Certificate of Designation”). Each share of preferred stock has an initial stated value of $1,080 and may be converted at any time at the holder’s option into shares of the Company’s common stock at a conversion price equal of the lower of (i) $0.35 until August 15, 2021 and $0.50 thereafter, and (ii) 85% of the lowest volume weighted average price of the Company’s common stock on a trading day during the ten trading days prior to and ending on, and including, the conversion date. The conversion price may be adjusted following certain triggering events and subsequent equity sales and is subject to appropriate adjustment in the event of stock splits, stock dividends, recapitalization or similar events affecting the Company’s common stock. The holders of the preferred stock are limited in the amount of stated value of the preferred stock they can convert on any trading day. The conversion cap limits conversions by the holders to the greater of $75,000 and an amount equal to 30% of the aggregate dollar trading volume of the Company’s common stock for the five trading days immediately preceding, and including, the conversion date. However, the conversion cap will be increased if the trading volume in the first 30 minutes of any trading session exceeds certain trailing average daily volume amounts. In addition, the holders of the preferred stock may not convert shares of preferred stock if, after giving effect to the conversion, a holder together with its affiliates would beneficially own in excess of 9.99% of the outstanding shares of the Company’s common stock. Redemption Rights Following 90 days after the scheduled date for the second closing date, the Company may elect to redeem the preferred stock for 120% of the aggregate stated value then outstanding, plus all accrued but unpaid dividends and all liquidated damages and other amounts due in respect of the preferred stock. The Company’s right to redeem the preferred stock is contingent upon it having complied with a number of conditions, including compliance with its obligations under the Certificate of Designation. Shares of preferred stock generally have no voting rights, except as required by law and except that the Company shall not take certain actions without the consent of the holders of the preferred stock. 2020 Series B-2 5% convertible preferred stock warrants Each share of preferred stock was sold together with two warrants: (i) a Series 1 warrant, which entitles the holder thereof to purchase one share of preferred stock at $982.50 per share, or 5,089 shares of preferred stock in the aggregate for approximately $5.0 million in aggregate exercise price, for a period of up to 18 months following issuance, and (ii) a Series 2 warrant, which entitles the holder thereof to purchase one share of preferred stock at $982.50 per share, or 5,089 shares of preferred stock in the aggregate for approximately $5.0 million in aggregate exercise price, for a period of up to 24 months following issuance. Subject to the satisfaction of certain circumstances, the Company may call for cancellation any or all of the warrants following 90 days after their issuance, for a payment in cash equal to 8% of the aggregate exercise price of the warrants being called. The warrants subject to any such call notice will be cancelled 10 days following the Company’s payment of the call fee, provided that the warrant holders have not exercised the warrants prior to cancellation. Exercise of 2020 Series B-2 5% convertible preferred stock warrants During the year ended June 30, 2023, there was no exercise of warrants because all warrants were exercised since November 4, 2021. During the year ended June 30, 2022, the Company issued 5,072 shares of its Series B-2 5% convertible preferred stock, for aggregate gross proceeds of approximately $5.0 million, upon exercise of 3,036 Series 1 warrants and exercise of 2,036 Series 2 warrants issued by the Company. With regard to the exercise of these 5,072 warrants, the Company recorded gross proceeds of approximately $5.0 million to the preferred stock liability. Conversion of 2020 Series B-2 5% convertible preferred stock to common stock During the year ended June 30, 2023, the 2020 Series B-2 5% convertible preferred stockholder converted a total of 260 shares of Series B-2 preferred stock into a total of approximately 25,690,759 shares of common stock. With regard to conversions, the Company reversed Series B-2 5% convertible preferred stock liability relating to the conversion and recorded $0.3 million as additional paid-in capital at par value. The Company reversed the amount of approximately $0.3 million based on the proportion of Series B-2 5% convertible preferred stock converted relative to the original total issued. During the year ended June 30, 2022, the 2020 Series B-2 5% convertible preferred stockholder converted a total of 4,452 shares of Series B-2 preferred stock into a total of approximately 69,901,865 shares of common stock. With regard to conversions, the Company reversed Series B-2 5% convertible preferred stock liability relating to the conversion and recorded $4.4 million as Additional paid-in capital at par value. The Company reversed the amount of approximately $4.4 million based on the proportion of Series B-2 5% convertible preferred stock converted relative to the original total issued. As of June 30, 2023 and 2022, Series B-2 5% convertible preferred stock liability was approximately $0.5 million and $0.8 million, respectively. The fair value of the Series B convertible preferred stock is measured in accordance with ASC 820 “Fair Value Measurement,” using option pricing methodologies, incorporating the following inputs: June 30, 2022 Expected dividend yield 5 % Expected stock-price volatility 60 % Risk-free interest rate 2.92 % Stock price $ 0.03 Exercise price $ 982.5 Treasury Stock All treasury stock, representing shares of the Company’s common stock that have been acquired for payroll tax withholding on vested stock grants and to satisfy the exercise price on vested stock options, is recorded at its acquisition cost and these shares are not considered outstanding. As of June 30, 2023 and 2022, the Company had the total of 10,874,593 treasury shares, representing 8,516,056 shares of Class A common stock and 2,358,537 shares of Class B common stock held in treasury, and they were purchased at a total cumulative cost of approximately $2.3 million as of as of June 30, 2023 and 2022. Surrender of Shares On December 29, 2022, Mr. Ehrlich entered into a Share Surrender Agreement with the Company pursuant to which Mr. Ehrlich permanently surrendered all legal right, title, and interest in 11,307,527 shares of Class B common stock to the Company and relinquished all rights in such shares, free and clear of any liens, mortgages, adverse claims, charges, security interests, encumbrances, any interest of any third party, or other restrictions or limitations whatsoever of any kind. Mr. Ehrlich received no consideration from the Company or any other party in connection with the surrender. Mr. Ehrlich effected the Surrender solely for his individual tax planning purposes. These 11,307,527 shares of Class B common stock were retired and returned to Class B common stock on the same day. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 16. Fair Value Measurements We disclose and recognize the fair value of our assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes three levels of the fair value hierarchy as follows: Level 1 Level 2 Level 3 Our financial instruments consist of cash and cash equivalents, short-term and long-term investments, accounts payable, accrued liabilities and preferred stock liability. At June 30, 2023 and 2022, the carrying values of cash and cash equivalents, accounts payable, and accrued liabilities approximated fair value due to their short-term maturities. The Company has elected to measure its preferred stock using the fair value method. The fair value of the preferred stock is the estimated amount that would be paid to redeem the liability in an orderly transaction between market participants at the measurement date. The Company calculates the fair value of the Series B-2 Preferred stock using a lattice model that takes into consideration the future redemption value on the instrument, which is tied to the Company’s stock price. These valuations are considered to be Level 3 fair value measurements as the significant inputs are unobservable and require significant management judgment or estimation. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company’s estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. Significant assumptions used in the fair value models include: the estimates of the redemption dates; credit spreads; dividend payments; and the market price of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The table below sets forth a reconciliation of the Company’s beginning and ending Level 3 Series B-2 preferred stock liability balance for the years ended June 30, 2023 and 2022: FY 2023 Balance, June 30, 2021 $ — Exercise of Series 1 and 2 warrants 4,983,000 Conversion of Series B-2 preferred stock to common stock (4,374,000 ) Change in fair value of Series B-2 preferred stock (1) 177,000 Balance, June 30, 2022 $ 786,000 Conversion of Series B-2 preferred stock to common stock (329,000 ) Change in fair value of Series B-2 preferred stock (1) — Balance, June 30, 2023 $ 457,000 (1) Change in fair value of preferred stock is reported in interest expense-preferred stock. (2) The 5% accrued dividend is reported in interest expense-preferred stock in the consolidated statements of operations. The Company accrued 5% accrued dividend of $29,000 and $47,000 during the years ended June 30, 2023 and 2022, respectively. The unpaid accrued dividends of $5,000 and $62,000 was included under current liability as of June 30, 2023 and 2022, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Income Taxes | 17. Income Taxes Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the financial statements. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities and the tax effects of net operating loss and capital loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized as income or expense in the period that included the enactment date. The Company has a net operating loss carry-forward for federal and state tax purposes of approximately $107.8 million at June 30, 2023, that is potentially available to offset future taxable income. The Tax Cuts and Jobs Act (the “Tax Act”) changes the rules on net operating loss (NOL) carry-forwards. The 20-year limitation was eliminated for losses incurred after January 1, 2018, giving the taxpayer the ability to carry forward losses indefinitely. However, NOL carry forward arising after January 1, 2018, will now be limited to 80% of taxable income. The $107.8 million available at June 30, 2023 includes $53.0 million of post 2017 NOLs without expiration dates and $54.8 million of pre-2018 NOLs expiring from 2024 to 2037. Given the Company’s projections of taxable income for the years between 2024 and 2037, it’s likely these NOLs will expire unused. The income tax provision benefit differs from the amount of tax determined by applying the Federal and States statutory rates as follows: June 30, 2023 June 30, 2022 Book income at federal statutory rate 21.00 % 21.00 % State income tax, net of federal tax benefit 6.32 % 6.32 % Change in valuation allowance (17.76 )% (39.84 )% Research and development credit — % 12.42 % Permanent difference — % — % Change in Federal Statutory Rate — % — % Others - net (9.56 )% 0.10 % Total 0.00 % 0.00 % There was no current or deferred provision or benefit for income taxes for the fiscal years ended June 30, 2023 and 2022. The components of deferred tax assets as of June 30, 2023 and 2022 are as follows ( ) June 30, 2023 June 30, 2022 Deferred tax assets: Net operating loss carry forwards $ 29,863,962 $ 28,888,330 Accrued payroll 394,091 806,829 Stock compensation 2,943,278 2,943,278 General business credit 6,068,138 6,068,138 Other 99,761 99,761 $ 39,369,230 $ 38,806,336 Valuation allowance (39,369,230 ) (38,806,336 ) Total deferred taxes $ — $ — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2023 | |
Subsequent Events | |
Subsequent Events | 18. Subsequent Events The Company has evaluated events subsequent to June 30, 2023 through the issuance of these consolidated financial statements and determined that there were no additional events requiring disclosure. |
Significant Accounting Polici_2
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Jun. 30, 2023 | |
Significant Accounting Policies and Recent Accounting Pronouncements | |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include contract research accruals, recoverability of long-lived assets, valuation of equity grants and income tax valuation. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Cash | Cash consists of bank deposits. There were no cash equivalents at June 30, 2023 and 2022. |
Intangible Assets - Patents | Costs incurred to file patent applications and acquired intangibles are capitalized when the Company believes that there is a high likelihood that the patent will be issued and there will be future economic benefit associated with the patent. These costs are amortized on a straight-line basis over a 12 - 17 years life from the date of patent filing. All costs associated with abandoned patent applications are expensed. In addition, the Company will review the carrying value of patents for indicators of impairment on a periodic basis and if it determines that the carrying value is impaired, it values the patent at fair value. As of June 30, 2023 and 2022, carrying value of patents was approximately $1,999,000 and $2,312,000, respectively. Amortization expense for the fiscal years ended June 30, 2023 and 2022, was approximately $373,000 and $382,000, respectively. As of June 30, 2023, the Company expensed the costs associated with obtaining patents that have not yet resulted in products or gained market acceptance and the Company has or will let these patents go abandoned. During the years ended June 30, 2023 and 2022, the patent expenses were insignificant. In accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. During the years ended June 30, 2023 and 2022, the Company recorded patent write offs of approximately $0 and $141,000, respectively, and included them in general and administrative expenses. |
Certain Risks and Uncertainties | Product Development We devote significant resources to research and development programs in an effort to discover and develop potential future product candidates. The product candidates in our pipeline are at various stages of preclinical and clinical development. The path to regulatory approval includes three phases of clinical trials in which we collect data to support an application to regulatory authorities to allow us to market a product for treatment of a specified disease. There are many difficulties and uncertainties inherent in research and development of new products, resulting in a high rate of failure. To bring a drug from the discovery phase to regulatory approval, and ultimately to market, takes many years and significant cost. Failure can occur at any point in the process, including after the product is approved, based on post-market factors. New product candidates that appear promising in development may fail to reach the market or may have only limited commercial success because of efficacy or safety concerns, inability to obtain necessary regulatory approvals, limited scope of approved uses, reimbursement challenges, difficulty or excessive costs of manufacture, alternative therapies or infringement of the patents or intellectual property rights of others. Uncertainties in the FDA approval process and the approval processes in other countries can result in delays in product launches and lost market opportunities. Consequently, it is very difficult to predict which products will ultimately be submitted for approval, which have the highest likelihood of obtaining approval and which will be commercially viable and generate profits. Successful results in preclinical or clinical studies may not be an accurate predictor of the ultimate safety or effectiveness of a drug or product candidate. Expenditures for research, development, and engineering of products are expensed as incurred. For the years ended June 30, 2023 and 2022, the Company incurred approximately $1.5 million and $4.8 million of research and development costs, respectively. |
Concentrations of Credit Risk | The Company maintains its cash in bank deposit and checking accounts that at times exceed federally insured limits of $250,000. Approximately $1.3 million is subject to credit risk at June 30, 2023. However, these cash balances are maintained at creditworthy financial institutions. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. |
Commitments and Contingencies | The Company follows Subtopic 450-20 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. The Company’s legal costs associated with contingent liabilities are recorded to expense as incurred. |
Accrued Outsourcing Costs | Substantial portions of our preclinical studies and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors, or collectively “CROs.” These CROs generally bill monthly or quarterly for services performed, or bill based upon milestone achievement. For preclinical studies, we accrue expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. We monitor patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to us by the CROs, correspondence with the CROs and clinical site visits. Our estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the status of each program and total program spending. We periodically evaluate the estimates to determine if adjustments are necessary or appropriate based on information we receive. |
Income Taxes | Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has generated net losses since inception and accordingly has not recorded a provision for income taxes. The deferred tax assets were primarily comprised of federal and state tax net operating loss, or NOL, carryforwards. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these tax assets, a full valuation allowance has been established to offset the deferred tax assets. Additionally, the future utilization of the NOL carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. If necessary, the deferred tax assets will be reduced by any carryforwards that expire prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. |
Basic and Diluted Loss per Share | Basic and diluted loss per share are computed based on the weighted-average common shares and common share equivalents outstanding during the period. Except with respect to certain voting, conversion and transfer rights and as otherwise expressly provided in the Company’s Articles of Incorporation or required by applicable law, shares of the Company’s Class A common stock and Class B common stock have the same rights and privileges and rank equally, share ratably and are identical in all respects as to all matters. Accordingly, basic and diluted net income (loss) per share are the same for both classes. Common share equivalents consist of stock options, restricted stock, warrants, convertible related party notes payable, and convertible preferred stock. Common share equivalents were excluded from the computation of diluted earnings per share for the years ended June 30, 2023 and 2022, because their effect was anti-dilutive. Weighted average shares of common stock outstanding used in the calculation of basic and diluted earnings per share were as follows: Year Ended June 30, 2023 2022 Net loss per share, basic and diluted $ (0.01 ) $ (0.01 ) Weighted average shares outstanding: Class A common stock 495,764,410 488,225,673 Class B common stock 10,003,189 15,641,463 Total weighted average shares outstanding 505,767,599 503,867,136 Antidilutive securities not included: Stock options 7,778,269 8,268,269 Stock options arising from convertible note payable and accrued interest 457,467 508,448 Restricted stock grants 19,463 58,392 Convertible preferred stock 35,571,821 36,000,000 Total 43,827,020 44,835,109 |
Treasury Stock | The Company accounts for treasury stock using the cost method. The 10,874,593 treasury shares include 8,516,056 shares of Class A common stock and 2,358,537 shares of Class B common stock held in treasury, and they were purchased at a total cumulative cost of approximately $2.3 million as of June 30, 2023 and 2022 (see Note 15. Equity Transactions). Treasury stock, representing shares of the Company’s common stock that have been acquired for payroll tax withholding on vested stock grants and to satisfy the exercise price on vested stock options, is recorded at its acquisition cost and these shares are not considered outstanding. |
Revenue Recognition | The Company follows the guidance of accounting standard ASC 606, Revenue from Contracts with Customers, and all the related amendments. The Company has acquired and further developed license rights to Functional Intellectual Property (“functional IP”) that it licenses to customers for defined license periods. A functional IP license is a license to intellectual property that has significant standalone functionality that does not include supporting or maintaining the intellectual property during the license period. The Company’s patented drug formulas have significant standalone functionality in their abilities to treat a disease or condition. Further, there is no expectation that the Company will undertake any activities to change the functionality of the drug formulas during the license periods (see Note 8. Exclusive License Agreement and Patent Assignment Agreement). Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. If a promised good or service is not distinct, it is combined with other performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The terms of the Company’s licensing agreement include the following: (i) up-front fees; (ii) milestone payments related to the achievement of development, regulatory, or commercial goals; and (iii) royalties on net sales of licensed products. License of Intellectual Property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. If not distinct, the license is combined with other performance obligations in the contract. For licenses that are combined with other performance obligations, the Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of each arrangement that includes developmental and regulatory milestone payments, the Company evaluates whether the achievement of each milestone specifically relates to the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service within a performance obligation. If the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service and the receipt of the payment is based upon the achievement of the milestone, the associated milestone value is allocated to that distinct good or service. If the milestone payment is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the amount is allocated to all performance obligations using the relative standalone selling price method. The Company also evaluates the milestone to determine whether they are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated, otherwise, such amounts are constrained and excluded from the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the transaction price. Any such adjustments to the transaction price are allocated to the performance obligations on the same basis as at contract inception. Amounts allocated to a satisfied performance obligation shall be recognized as revenue, or as a reduction of revenue, in the period in which the transaction price changes. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied) in accordance with the royalty recognition constraint. |
Accounting for Stock Based Compensation | The stock-based compensation expense incurred by the Company for employees, non-employees and directors in connection with its equity incentive plan is based on ASC 718, and the fair market value of the equity awards is measured at the grant date. Awards with service-based vesting conditions only: Expense is recognized on a straight-line basis over the requisite service period of the award. Awards with performance-based vesting conditions: Expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight-line basis from the award date. The award will continue to be expensed on a straight-line basis over the requisite service period basis until a higher performance-based condition is met, if applicable. Awards with market-based vesting conditions: Expense recognized on a straight-line basis over the requisite service period, which is the lesser of the derived service period or the explicit service period if one is present. However, if the market condition is satisfied prior to the end of the requisite service period, the Company will accelerate all remaining expense to be recognized. Awards with both performance-based and market-based vesting conditions: If an award vesting or exercisability is conditional upon the achievement of either a market condition or performance or service conditions, the requisite service period is generally the shortest of the explicit, implicit, and derived service period. We have elected to use the Black-Scholes-Merton pricing model to determine the fair value of stock options on the dates of grant. Restricted stock units are measured based on the fair market values of the underlying stock on the dates of grant. The grant date is also the valuation date for the non-employee awards. We recognize stock-based compensation using the straight-line method. |
Investments | For those investments in common stock or in-substance common stock in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, the investment is accounted for under the equity method. For those investments in which the Company does not have such significant influence, the Company applies the accounting guidance for certain investments in debt and equity securities. |
Recent Accounting Pronouncements | The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). This standard requires a financial asset to be presented at the net amount expected to be collected. The financial assets of the Company in scope of ASU 2016-13 will primarily be accounts receivable. The Company will estimate an allowance for expected credit losses on accounts receivable that result from the inability of customers to make required payments. In estimating the allowance for expected credit losses, consideration will be given to the current aging of receivables, historical experience, and a review for potential bad debts. The Company adopted this guidance in the first quarter of fiscal 2023 and it did not have an impact on its results of operations, financial position, and disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Significant Accounting Policies and Recent Accounting Pronouncements | |
Schedule of basic and diluted earning per share | Year Ended June 30, 2023 2022 Net loss per share, basic and diluted $ (0.01 ) $ (0.01 ) Weighted average shares outstanding: Class A common stock 495,764,410 488,225,673 Class B common stock 10,003,189 15,641,463 Total weighted average shares outstanding 505,767,599 503,867,136 Antidilutive securities not included: Stock options 7,778,269 8,268,269 Stock options arising from convertible note payable and accrued interest 457,467 508,448 Restricted stock grants 19,463 58,392 Convertible preferred stock 35,571,821 36,000,000 Total 43,827,020 44,835,109 |
Equity Investment (Tables)
Equity Investment (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Equity Investment | |
Schedule of equity investments | June 30, June 30, 2023 2022 BT BeaMedical Technologies Ltd. Ownership Interest 35.7 % 35.7 % Carrying Amount Total contributions $ 4,000,000 $ 4,000,000 Less: Share of the loss in investment in BTL (194,000 ) (22,000 ) Equity losses in excess of investment $ 3,806,000 $ 3,978,000 |
Summary of balance sheet for the Company's equity method investee | June 30, June 30, BT BeaMedical Technologies Ltd. 2023 2022 Assets Cash $ 575,000 $ 3,850,000 Short term investment 2,694,000 — Other current assets 144,000 1,000 Total current assets $ 3,413,000 $ 3,851,000 Long-term assets 162,000 — Total assets $ 3,575,000 $ 3,851,000 Liabilities and equity Current liabilities $ 230,000 $ 195,000 Long-term liabilities 101,000 — Total liabilities $ 331,000 $ 195,000 Equity Equity $ 3,804,000 $ 3,735,000 Accumulated deficits (560,000 ) (79,000 ) Total equity 3,244,000 3,656,000 Total liabilities and equity $ 3,575,000 $ 3,851,000 |
Summary of income statement information for equity method investee | For the period From June 9, 2022 For the Year Ended (date of acquisition) June 30, to June 30, BT BeaMedical Technologies Ltd. 2023 2022 Net sales and revenue $ 25,000 $ — Research and development costs $ 533,000 $ 7,000 Administrative expenses 100,000 55,000 Total operating expense 633,000 62,000 Loss from operations $ (608,000 ) $ (62,000 ) Other income (expense) 127,000 (1,000 ) Net loss $ (481,000 ) $ (63,000 ) |
Patents net (Tables)
Patents net (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Patents net | |
Schedule of patents | Useful life (years) June 30, 2023 June 30, 2022 Purchased Patent Rights- Brilacidin and related compounds 14 $ 4,082,000 $ 4,082,000 Purchased Patent Rights-Anti-microbial- surfactants and related compounds 12 144,000 144,000 Patents - Kevetrin and related compounds 17 1,206,000 1,146,000 Total patents cost 5,432,000 5,372,000 Less: Accumulated amortization (3,433,000 ) (3,060,000 ) Patents, net $ 1,999,000 $ 2,312,000 |
Accrued Expenses Related Part_2
Accrued Expenses Related Parties and Other (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Accrued Expenses Related Parties and Other | |
Schedule of accrued expenses | June 30, 2023 June 30, 2022 Accrued research and development consulting fees $ 49,000 $ 80,000 Accrued rent - related parties (Note 11. Related Party Transactions) 8,000 8,000 Accrued interest - related parties (Note 12. Convertible Note Payable - Related Party) 16,000 4,000 Total $ 73,000 $ 92,000 |
Accrued Salaries and Payroll _2
Accrued Salaries and Payroll Taxes Related Parties And Other (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Accrued Salaries and Payroll Taxes Related Parties And Other (Tables) | |
Schedule of accrued salaries and payroll taxes | June 30, 2023 June 30, 2022 Accrued salaries - related parties $ 1,543,000 $ 1,492,000 Accrued payroll taxes - related parties 71,000 71,000 Withholding tax - payroll 76,000 77,000 Total $ 1,690,000 $ 1,640,000 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Operating Leases | |
Schedule of components of lease expense | Year Ended June 30, 2023 Lease Cost Operating lease cost (included in general and administrative in the Company’s consolidated statement of operations) $ 26,000 Variable lease cost 12,000 $ 38,000 Other Information Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2023 $ 197,000 Weighted average remaining lease term – operating leases (in years) 0.25 Average discount rate – operating leases 18 % |
Schedule of operating lease liabilities | At June 30, 2023 Operating leases Short-term operating lease liabilities $ 55,000 Long-term operating lease liabilities — Total operating lease liabilities $ 55,000 |
Schedule of maturities of the lease liabilities | Operating Leases Fiscal Year Ending June 30, 2024 (remaining 3 months) $ 56,000 Total lease payments 56,000 Less: Imputed interest/present value discount (1,000 ) Present value of lease liabilities $ 55,000 |
Equity Incentive Plans StockB_2
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding | |
Schedule of fair value of the warrants assumptions | Year ended June 30, 2022 Expected term (in years) 5-10 Expected stock price volatility 80.84% to 112.37 % Risk-free interest rate 0.69% to 1.61 % Expected dividend yield 0 |
Components of stock-based compensation expense | Years ended June 30, 2023 2022 Research and development expenses $ 46,000 $ 160,000 General and administrative expenses 161,000 423,000 Total stock-based compensation expense $ 207,000 $ 583,000 |
Schedule of stock option activity | Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2021 6,779,935 $ 0.35 4.45 $ 345,923 Granted 3,900,000 $ 0.24 8.75 — Exercised (166,666 ) $ 0.14 — — Forfeited/expired (2,245,000 ) $ 0.54 — — Outstanding at June 30, 2022 8,268,269 $ 0.25 6.91 $ — Granted — $ — — — Exercised — $ — — — Forfeited/expired (490,000 ) $ 0.50 — — Outstanding at June 30, 2023 7,778,269 $ 0.23 6.31 $ — Exercisable at June 30, 2023 7,720,607 $ 0.23 6.30 $ — Unvested stock options at June 30, 2023 57,662 $ 0.22 7.21 $ — |
Schedule of Restricted Stock Award Activity | Weighted Average Number of Grant Date Shares Fair Value Total awards outstanding at June 30, 2021 116,786 $ 0.22 Total shares granted — $ — Total shares vested (58,394 ) $ 0.25 Total shares forfeited — $ — Total unvested shares outstanding at June 30, 2022 58,392 $ 0.19 Total shares granted — $ — Total shares vested (38,928 ) $ 0.18 Total shares forfeited — $ — Total unvested shares outstanding at June 30, 2023 19,464 $ 0.22 |
Schedule of vesting outstanding restricted stock | Year Ending June 30, 2024 Total Scheduled vesting 19,464 19,464 |
Equity Transactions (Tables)
Equity Transactions (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Equity Transactions | |
Schedule of fair value of convertible preferred stock | June 30, 2022 Expected dividend yield 5 % Expected stock-price volatility 60 % Risk-free interest rate 2.92 % Stock price $ 0.03 Exercise price $ 982.5 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurements | |
Schedule of Change in fair value of preferred stock | FY 2023 Balance, June 30, 2021 $ — Exercise of Series 1 and 2 warrants 4,983,000 Conversion of Series B-2 preferred stock to common stock (4,374,000 ) Change in fair value of Series B-2 preferred stock (1) 177,000 Balance, June 30, 2022 $ 786,000 Conversion of Series B-2 preferred stock to common stock (329,000 ) Change in fair value of Series B-2 preferred stock (1) — Balance, June 30, 2023 $ 457,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Schedule of federal statutory rate | June 30, 2023 June 30, 2022 Book income at federal statutory rate 21.00 % 21.00 % State income tax, net of federal tax benefit 6.32 % 6.32 % Change in valuation allowance (17.76 )% (39.84 )% Research and development credit — % 12.42 % Permanent difference — % — % Change in Federal Statutory Rate — % — % Others - net (9.56 )% 0.10 % Total 0.00 % 0.00 % |
Schedule of deferred tax assets | June 30, 2023 June 30, 2022 Deferred tax assets: Net operating loss carry forwards $ 29,863,962 $ 28,888,330 Accrued payroll 394,091 806,829 Stock compensation 2,943,278 2,943,278 General business credit 6,068,138 6,068,138 Other 99,761 99,761 $ 39,369,230 $ 38,806,336 Valuation allowance (39,369,230 ) (38,806,336 ) Total deferred taxes $ — $ — |
Liquidity Going Concern and M_2
Liquidity Going Concern and Managements Plan (Details Narrative) $ in Millions | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
Liquidity Going Concern and Managements Plan | |
Cash | $ 1.5 |
Total Current Liabilities | 5 |
Net Loss | (3.2) |
Working Capital | 3.4 |
Cash flow from operations | $ (2.1) |
Significant Accounting Polici_4
Significant Accounting Policies and Recent Accounting Pronouncements (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Net loss per share, basic and diluted | $ (0.01) | $ (0.01) |
Total weighted average shares outstanding | 505,767,599 | 503,867,136 |
Stock options | 7,778,269 | 8,268,269 |
Stock options arising from convertible note payable and accrued interest | 457,467 | 508,448 |
Restricted stock grants | 19,463 | 58,392 |
Total | 35,571,821 | 36,000,000 |
Convertible preferred stock | 43,827,020 | 44,835,109 |
Common Class A Member | ||
Total weighted average shares outstanding | 495,764,410 | 488,225,673 |
Common Class B Member | ||
Total weighted average shares outstanding | 10,003,189 | 15,641,463 |
Significant Accounting Polici_5
Significant Accounting Policies and Recent Accounting Pronouncements (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Value of patent | $ 1,999,000 | $ 2,312,000 |
Patent Write off | 0 | 141,000 |
Amortization expenses | $ 373,000 | $ 382,000 |
Treasury stock, shares | 10,874,593 | 10,874,593 |
Expenses for research and development | $ 1,500,000 | $ 4,800,000 |
Federally isured limit | 250,000 | |
Credit risk | 1,300,000 | |
Treasury Stocks [Member] | ||
Purchase values of shares | $ 2,300,000 | $ 2,300,000 |
Common Class A Member | ||
Treasury stock, shares | 8,516,056 | |
Common Class B Member | ||
Treasury stock, shares | 2,358,537 |
Equity Investment (Details)
Equity Investment (Details) - BT BeaMedical Technologies Limited ("BTL") [Member] - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Ownership interest | 35.70% | 35.70% |
Total contributions | $ 4,000,000 | $ 4,000,000 |
Less: Share of the loss in investment in BTL | (194,000) | (22,000) |
Equity losses in excess of investment | $ 3,806,000 | $ 3,978,000 |
Equity Investment (Details 1)
Equity Investment (Details 1) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 |
Total current assets | $ 1,634,000 | $ 3,952,000 | |
Total assets | 7,517,000 | 10,379,000 | |
Current liabilities | 5,021,000 | 4,808,000 | |
Total liabilities | 5,478,000 | 5,649,000 | |
Equity | 129,566,000 | 129,090,000 | |
Accumulated deficits | (125,325,000) | (122,157,000) | |
Total equity | 2,039,000 | 4,730,000 | $ 7,509,000 |
Total liabilities and equity | 7,517,000 | 10,379,000 | |
BT BeaMedical Technologies Limited [Member] | |||
Cash | 575,000 | 3,850,000 | |
Short term investment | 2,694,000 | 0 | |
Other current assets | 144,000 | 1,000 | |
Total current assets | 3,413,000 | 3,851,000 | |
Long-term assets | 162,000 | 0 | |
Total assets | 3,575,000 | 3,851,000 | |
Current liabilities | 230,000 | 195,000 | |
Long-term liabilities | 101,000 | 0 | |
Total liabilities | 331,000 | 195,000 | |
Equity | 3,804,000 | 3,735,000 | |
Accumulated deficits | (560,000) | (79,000) | |
Total equity | 3,244,000 | 3,656,000 | |
Total liabilities and equity | $ 3,575,000 | $ 3,851,000 |
Equity Investment (Details 2)
Equity Investment (Details 2) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Research and development costs | $ 1,462,000 | $ 4,814,000 | |
Total operating expenses | 2,939,000 | 6,917,000 | |
Loss from operations | (3,111,000) | (6,921,000) | |
Net loss | (3,168,000) | $ (7,041,000) | |
BT BeaMedical Technologies Ltd [Member] | |||
Net sales and revenue | $ 0 | 25,000 | |
Research and development costs | 7,000 | 533,000 | |
Administrative expenses | 55,000 | 100,000 | |
Total operating expenses | 62,000 | 633,000 | |
Loss from operations | (62,000) | (608,000) | |
Other income (expense) | (1,000) | 127,000 | |
Net loss | $ (63,000) | $ (481,000) |
Equity Investment (Details Narr
Equity Investment (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Jun. 30, 2023 | |
Equity Investment contribution | $ 4,000,000 | |
Cash balance | 600,000 | |
Equity in loss from equity investment | $ 22,000 | 172,000 |
Incurred a loss of BTL | $ 63,000 | 481,000 |
Short term deposits of BTL | $ 2,700,000 | |
BT BeaMedical Technologies Limited ("BTL") [Member] | Purchase Agreement [Member] | ||
Description of Equity Investment | a company established under the laws of the State of Israel (“BTL”), pursuant to which the Company purchased 55,556 shares of BTL’s Series A Redeemable Preferred Shares (the “Series A Shares”) and a warrant to purchase 27,778 Series A Shares for aggregate consideration of $4,000,000, or approximately $72.00 per Series A Share. Following the closing under the Purchase Agreement, the Company owns approximately 35.7% of BTL’s issued and outstanding equity securities and approximately 41.6% of BTL’s equity securities on a fully diluted basis |
Patents net (Details)
Patents net (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Total Patents, gross | $ 5,432,000 | $ 5,372,000 |
Less : Accumulated amortization | (3,433,000) | (3,060,000) |
Total Patents, net | 1,999,000 | 2,312,000 |
Patents Two [Member] | ||
Total Patents, gross | $ 144,000 | 144,000 |
Useful life | 12 years | |
Patents Three [Member] | ||
Total Patents, gross | $ 1,206,000 | 1,146,000 |
Useful life | 17 years | |
Patents One [Member] | ||
Total Patents, gross | $ 4,082,000 | $ 4,082,000 |
Useful life | 14 years |
Patents net (Details Narrative)
Patents net (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Amortization expense | $ 373,000 | $ 382,000 | |
General and administrative expenses | $ 141,000 | ||
Patents [Member] | |||
June 30, 2024 | 372,000 | ||
June 30, 2025 | 372,000 | ||
June 30, 2026 | 362,000 | ||
June 30, 2027 | 360,000 | ||
June 30, 2028 and Thereafter | $ 533,000 | ||
Patents [Member] | Minimum [Member] | IntangibleAssets [Member] | |||
Future Amortization Period | 2 years 2 months 4 days | ||
Estimated remaining useful lives of the assets | 12 years | ||
Patents [Member] | Maximum [Member] | IntangibleAssets [Member] | |||
Future Amortization Period | 16 years 9 months | ||
Estimated remaining useful lives of the assets | 17 years |
Accrued Expenses - Related Part
Accrued Expenses - Related Parties and Other (Details) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Accrued Expenses Related Parties and Other | ||
Accrued research and development consulting fees | $ 49,000 | $ 80,000 |
Accrued rent - related parties (Note 11. Related Party Transactions) | 8,000 | 8,000 |
Accrued interest - related parties (Note 12. Convertible Note Payable - Related Party) | 16,000 | 4,000 |
Total | $ 73,000 | $ 92,000 |
Accrued Salaries and Payroll _3
Accrued Salaries and Payroll Taxes - Related Parties and Other (Details) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Accrued Salaries and Payroll Taxes Related Parties and Other | ||
Accrued Salaries - Related Parties | $ 1,543,000 | $ 1,492,000 |
Accrued Payroll Taxes - Related Parties | 71,000 | 71,000 |
Withholding Tax - Payroll | 76,000 | 77,000 |
Total | $ 1,690,000 | $ 1,640,000 |
Exclusive License Agreement a_2
Exclusive License Agreement and Patent Assignment Agreement (Details Narrative) - USD ($) | Jun. 30, 2023 | May 03, 2022 | Jul. 18, 2019 |
Non-refundable Payment | $ 400,000 | ||
License Agreement [Member] | |||
Non-refundable Payment | $ 400,000 | ||
Additional Payments Payable Upon Achievement Of Certain Milestones Under Agreement By Related Party | 24,000,000 | ||
Payment Due Following Commencement Of First Phase Iii Clinical Trial Of Brilacidin | 1,000,000 | ||
Payment Due Upon Filing Of A Marketing Approval Application | $ 1,000,000 | ||
FCCDC's third-party license of broad-spectrum anti-fungals | $ 18,000 |
Operating Leases (Details)
Operating Leases (Details) | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
Lease Cost | |
Operating lease cost (included in general and administrative in the Company's consolidated statements of operations) | $ 26,000 |
Variable lease cost | 12,000 |
Total operating cost | 38,000 |
Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2023 | $ 197,000 |
Weighted average remaining lease term - operating leases (in years) | 3 months |
Average discount rate - operating leases | 18% |
Operating Leases (Details 1)
Operating Leases (Details 1) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Operating Leases | ||
Short-term operating lease liabilities | $ 55,000 | $ 197,000 |
Long-term operating lease liabilities | 0 | $ 55,000 |
Total operating lease liabilities | $ 55,000 |
Operating Leases (Details 2)
Operating Leases (Details 2) | Jun. 30, 2023 USD ($) |
Fiscal Year Ending June 30, | |
2024 (remaining 3 months) | $ 56,000 |
Total lease payments | 56,000 |
Less: Imputed interest/present value discount | (1,000) |
Present value of lease liabilities | $ 55,000 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2019 | |
Operating Leases | |||
Amortization of the right-of-use asset | $ 27,000 | ||
Operating lease cost | 26,000 | $ 59,000 | |
Impairment loss | $ 643,000 | ||
Operating lease carrying value | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Jun. 30, 2023 USD ($) |
Contractual commitments | $ 600,000 |
Ex-President of Research [Member] | |
Accrued salaries and payroll taxes | 1,443,000 |
Accounts payable | $ 1,486,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Accrued Expenses | $ 8,000 | $ 8,000 |
Accounts Payable | 2,985,000 | 2,567,000 |
Clinical Studies [Member] | ||
Accrued Expenses | 8,000 | 8,000 |
Accounts Payable | $ 1,486,000 | $ 1,486,000 |
Convertible Note Payable Rela_2
Convertible Note Payable Related Party (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 07, 2012 | Jun. 30, 2023 | Jun. 30, 2022 | May 08, 2012 | |
Total outstanding balance of principal and interest | $ 229,000 | $ 254,000 | ||
Accrued interest - related parties | $ 16,000 | 4,000 | ||
Ehrlich Promissory Note C [Member] | ||||
Exercise price | $ 0.51 | |||
Principal balance of demand notes | $ 2,022,000 | |||
Equity incentive shares | 2,000,000 | |||
Closing bid price per share | $ 0.46 | |||
Percentage of closing bid price | 110% | |||
Ehrlich Promissory Note C [Member] | Minimum [Member] | ||||
Interest rate | 9% | |||
Ehrlich Promissory Note C [Member] | Maximum [Member] | ||||
Interest rate | 10% | |||
Originated In 2010 [Member] | Ehrlich Promissory Note C [Member] | ||||
Interest rate | 9% | |||
Common stock price per share | $ 0.50 | |||
Mr. Ehrlich [Member] | ||||
Repayment of note payable to officer | $ 213,000 | 250,000 | ||
Principal balance of demand notes | $ 37,000 | $ 1,033,000 | ||
Mr. Ehrlich [Member] | December 29, 2010 [Member] | ||||
Exercise price | $ 0.11 | |||
Option issued | 18,000,000 |
Loan payable (Details Narrative
Loan payable (Details Narrative) - Paycheck Protection Program [Member] - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 10, 2020 | Apr. 19, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | |
Loan Forgivness | $ 172,000 | |||
Monthly payroll expenses | $ 2,500,000 | |||
Loan Proceeds | $ 93,000 | $ 79,000 |
Equity Incentive Plans, Stock-B
Equity Incentive Plans, Stock-Based Compensation, Exercise of Stock Options and Warrants Outstanding (Details) | 12 Months Ended |
Jun. 30, 2022 | |
Expected Stock Price Volatility, maximum | 112.37% |
Expected Stock Price Volatility, minimum | 80.84% |
Risk-free Interest Rate, minimum | 0.69% |
Risk-free Interest Rate, maximum | 1.61% |
Expected Dividend Yield | 0% |
Minimum [Member] | Stock Option [Member] | |
Expected Term (in Years) | 5 years |
Maximum [Member] | Stock Option [Member] | |
Expected Term (in Years) | 10 years |
Equity Incentive Plans StockB_3
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Total Stock-based Compensation Expense | $ 207,000 | $ 583,000 |
General and Administrative Expense [Member] | ||
Total Stock-based Compensation Expense | 161,000 | 423,000 |
Research and Development Expense [Member] | ||
Total Stock-based Compensation Expense | $ 46,000 | $ 160,000 |
Equity Incentive Plans StockB_4
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 2) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Exercised | (7,778,269) | (8,268,269) | |
Stock Option [Member] | |||
Beginning Balance, Outstanding | 8,268,269 | 6,779,935 | |
Granted | 3,900,000 | ||
Exercised | (166,666) | ||
Forfeited/expired | (490,000) | (2,245,000) | |
Ending Balance, Outstanding | 7,778,269 | 8,268,269 | 6,779,935 |
Exercisable, ending | 7,720,607 | ||
Unvested Stock Options ending | 57,662 | ||
Weighted Average Exercise Price, Beginning Balance | $ 0.25 | $ 0.35 | |
Weighted Average Exercise Price, Granted | 0.24 | ||
Weighted Average Exercise Price, Exercised | 0.14 | ||
Weighted Average Exercise Price, Forfeited/expired | 0.50 | 0.54 | |
Weighted Average Exercise Price, Ending Balance | 0.23 | $ 0.25 | $ 0.35 |
Weighted Average Exercise Price, Exercisable ending | 0.23 | ||
Weighted Average Exercise Price, Unvested Stock Options ending | $ 0.22 | ||
Weighted Average Remaining Contractual Life | 6 years 3 months 21 days | 6 years 10 months 28 days | 4 years 5 months 12 days |
Weighted Average Remaining Contractual Life, Granted | 8 years 9 months | ||
Weighted Average Remaining Contractual Life, Exercisable | 6 years 3 months 18 days | ||
Weighted Average Remaining Contractual Life, Unvested Stock Options | 7 years 2 months 15 days | ||
Aggregate Intrinsic Value Beginning | $ 0 | $ 345,923 |
Equity Incentive Plans StockB_5
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 3) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Beginning Balance, Outstanding | 58,392 | 116,786 |
Total Shares Granted | 0 | |
Total Shares Vested | (38,928) | (58,394) |
Ending Balance, Outstanding | 19,464 | 58,392 |
Weighted Average, Beginning Balance | $ 0.19 | $ 0.22 |
Weighted Average, Total Shares Granted | 0 | |
Weighted Average, Total Shares Vested | 0.18 | 0.25 |
Weighted Average, Total Shares Forfeited | 0 | |
Weighted Average, Ending Balance | $ 0.22 | $ 0.19 |
Equity Incentive Plans StockB_6
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details 4) | 12 Months Ended |
Jun. 30, 2023 shares | |
Total Scheduled Vesting | 19,464 |
Year Ending June 30, 2024 [Member] | |
Total Scheduled Vesting | 19,464 |
Equity Incentive Plans StockB_7
Equity Incentive Plans StockBased Compensation Exercise of Options and Warrants Outstanding (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Unrecognized Compensation | $ 1,000 | |
Proceeds from exercise of options | 0 | $ 23,000 |
Stock Option | 166,666 | |
Total unrecognized stock-based compensation expense | $ 1,000 | |
Weighted average recognition period | 2 months 12 days | |
Stock-based compensation cost | $ 207,000 | $ 583,000 |
Stock Option Exercise Price | $ 0.14 | |
On October Ten Two Thousand Twenty [Member] | ||
Stock Options To Purchase Shares | 1 | |
Stock-based compensation cost | $ 27,000 | $ 71,000 |
Stock Option Exercise Price | $ 0.24 | |
Exercisable Period | 10 years | |
Stock Issue, Value | $ 98,000 | |
Amortization Period Of Restricted Stock | 1 year | |
February 23, 2020 [Member] | 2016 Equity Incentive Plan [Member] | ||
Annual Limit Description | the Board of Directors approved an amendment to Section 4.1 of the 2016 Plan to increase the annual limit on the number of awards under such Plan to outside directors from 250,000 to 1,500,000 | |
October 10, 2021 [Member] | 2016 Equity Incentive Plan [Member] | ||
Annual Limit Description | the Board of Directors approved amendments to the 2016 Plan to increase the number of shares of common stock available for issuance thereunder to 225,000,000 shares and to increase the annual limit on the number of awards under such Plan to outside directors from 1,500,000 to 5,000,000, among other changes | |
June 30, 2016 [Member] | 2016 Equity Incentive Plan [Member] | ||
Stock Option Vested Or To Be Vested, Description | Up to 225,000,000 shares of the Company’s Class A common stock may be issued under the 2016 Plan (subject to adjustment as described in the 2016 Plan). | |
Mr. Ehrlich [Member] | On October Ten Two Thousand Twenty One [Member] | ||
Stock Options To Purchase Shares | 500,000 | |
Stock-based compensation cost | $ 161,000 | 423,000 |
Stock Option Exercise Price | $ 0.24 | |
Exercisable Period | 10 years | |
Stock Issue, Value | $ 585,000 | |
Amortization Period Of Restricted Stock | 1 year | |
Ms Jane Harness [Member] | On September 11, 2020 [Member] | ||
Stock Options To Purchase Shares | 172,987 | |
Stock Option Exercise Price | $ 0.22 | |
Stock Based Compensation Expenses | $ 15,000 | 15,000 |
Stock Issue, Value | $ 33,000 | |
Stock Issued, Shares | 58,394 | |
Stock Awards | $ 4,000 | 4,000 |
Stock Option Expenses | $ 11,000 | 11,000 |
Vested Shares | 58,394 | |
Common Stock Value | $ 13,000 | |
Amortization Period Of Restricted Stock | 3 years | |
Ms Jane Harness [Member] | On September 1, 2019 [Member] | ||
Stock Options To Purchase Shares | 172,987 | |
Stock Option Exercise Price | $ 0.132 | |
Exercisable Period | 3 years | |
Stock Based Compensation Expenses | $ 1,000 | 9,000 |
Stock Issued, Shares | 58,394 | |
Stock Awards | 3,000 | |
Stock Option Expenses | $ 1,000 | 6,000 |
Closing Bid Price | $ 20,000 | |
one Consultant [Member] | January 1, 2022 [Member] | ||
Stock Options To Purchase Shares | 75,000 | |
Stock-based compensation cost | $ 1,000 | 2,000 |
Stock Issue, Value | $ 3,000 | |
Stock Options, Vested Percentage Description | vest 33 1/3% on January 1, 2022, 33 1/3% on July 1, 2022 and 33 1/3% on January 1, 2023 | |
Stock Option Exercise Price | $ 0.044 | |
Two Consultant [Member] | July 30, 2021 [Member] | ||
Stock Options To Purchase Shares | 100,000 | |
Stock-based compensation cost | $ 2,000 | 18,000 |
Stock Option Exercise Price | $ 0.27 | |
Stock Issue, Value | $ 19,000 | |
Stock Options, Vested Percentage Description | vest 33 1/3% on July 30, 2021, 33 1/3% on January 30, 2022, and 33 1/3% on July 30, 2022 | |
Three Consultant [Member] | July 1, 2021 [Member] | ||
Stock Options To Purchase Shares | 225,000 | |
Stock-based compensation cost | $ 0 | 32,000 |
Stock Option Exercise Price | $ 0.21 | |
Stock Issue, Value | $ 33,000 | |
Stock Options, Vested Percentage Description | vest 33 1/3% on July 1, 2021, 33 1/3% on January 1, 2022, and 33 1/3% on July 1, 2022 | |
Four Consultant [Member] | February 10, 2021 [Member] | ||
Stock Options To Purchase Shares | 75,000 | |
Stock-based compensation cost | $ 0 | $ 7,000 |
Stock Option Exercise Price | $ 0.38 | |
Stock Issue, Value | $ 20,000 | |
Stock Options, Vested Percentage Description | vest 33 1/3% on February 10, 2021, 33 1/3% on July 1, 2021, and 33 1/3% on January 1, 2022 | |
Common Class A Member | ||
Forfeiture of Stock Options | 490,000 | 2,245,000 |
Common Stock Value | $ 51,000 | $ 49,000 |
Equity Transactions (Details)
Equity Transactions (Details) | 12 Months Ended |
Jun. 30, 2022 $ / shares | |
Equity Transactions | |
Expected dividend yield | 5% |
Expected stock-price volatility | 60% |
Risk-free interest rate | 2.92% |
Stock price | $ 0.03 |
Exercise price | $ 982.5 |
Equity Transaction (Details Nar
Equity Transaction (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||||||
Feb. 08, 2021 | Dec. 09, 2020 | Dec. 04, 2020 | Jul. 31, 2022 | Dec. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 29, 2022 | Jul. 30, 2022 | |
Redeem preferred stock | 5% | |||||||||
Accrued Dividends Under Current Liability | $ 62,000 | |||||||||
Common Class A Member | ||||||||||
Treasury Stock Shares | 8,516,056 | 8,516,056 | ||||||||
Common Class B Member | ||||||||||
Treasury Stock Shares | 2,358,537 | 2,358,537 | ||||||||
Gross Proceeds | $ 500,000 | |||||||||
Common Stock, Shares Issued | 11,307,527 | |||||||||
Cumulative Cost | $ 2,300,000 | |||||||||
Common Class B Member | October 2, 2020 [Member] | Mr. Ehrlich [Member] | ||||||||||
Sale Of Aggregate Shares | 2,036 | |||||||||
Common Class B Member | Mr. Ehrlich [Member] | ||||||||||
Treasury Stock Shares | 10,874,593 | 10,874,593 | ||||||||
Common Stock Held Satisfy Exercise Price | $ 11,307,527 | |||||||||
Series B Convertible Preferred Stock [Member] | 2020 Series B 5% Convertible Preferred Stock 1 [Member] | ||||||||||
Accrued Dividends Under Current Liability | $ 29,000 | $ 47,000 | ||||||||
Accrued dividend | 5,000 | 62,000 | ||||||||
Warrants Amount | $ 1,500,000 | $ 2,100,000 | ||||||||
Gross Proceeds | $ 900,000 | |||||||||
Preferred Stock Liability | $ 25,000 | |||||||||
Sale Of Aggregate Shares | 2,036 | 3,053 | 5,089 | |||||||
Warrant Discounts | $ 2 | $ 2,700,000 | ||||||||
Reduction In Warrant Additional Paid-in Capital | $ 10,000 | |||||||||
Conversion Amount Limits | $ 75,000 | |||||||||
Initial Stated Value,preferred Stock | $ 1,080 | |||||||||
Conversion Percentage | 30% | |||||||||
Beneficially Own In Excess Coversion | 9.99% | |||||||||
Series B Convertible Preferred Stock [Member] | 2020 Series B 5% Convertible Preferred Stock [Member] | ||||||||||
Gross Proceeds | $ 3 | $ 5 | ||||||||
Sale Of Aggregate Shares | 3,053 | |||||||||
Additional Warrant Purchase | 10,178 | |||||||||
Series B Convertible Preferred Stock warrants [Member] | Exercise of 2020 Series B 5% Convertible Preferred Stock Warrants 1 [Member] | ||||||||||
Gross Proceeds | $ 2 | |||||||||
Convertible Preferred Stock, Shares | 3,053 | |||||||||
Convertible Preferred Stock, Exercise | 3,053 | |||||||||
Convertible Preferred Stock Liabilities | $ 500,000 | $ 800,000 | ||||||||
Series B Convertible Preferred Stock warrants [Member] | Exercise of 2020 Series B 2.5% Convertible Preferred Stock Warrant [Member] | ||||||||||
Convertible Preferred Stock, Shares | 5,072 | |||||||||
Proceeds for convertible preferred stock | $ 5 | |||||||||
Proceeds for preferred stock liability | $ 5 | |||||||||
Convertible Preferred Stock, Exercise | 5,072 | |||||||||
Warrant Shares | 3,036 | |||||||||
Convertible Preferred Stock, Outstanding | 2,036 | |||||||||
Series B Convertible Preferred Stock warrants [Member] | Conversion of 2020 Series B-2 5% convertible preferred stock to common stock [Member] | ||||||||||
Convertible preferred stockholder | 260 | 4,452 | ||||||||
Gross Proceeds | $ 25,690,759 | $ 69,901,865 | ||||||||
Convertible Preferred Stock Into Common Stock | 300,000 | 4,400,000 | ||||||||
Reversed Amount | $ 300,000 | $ 4,400,000 | ||||||||
Series B Convertible Preferred Stock warrants [Member] | 2020 Series B 5% Convertible Preferred Stock Warrant [Member] | ||||||||||
Per Share | $ 982.50 | |||||||||
Preferred Stock Shares | 5,089 | |||||||||
Preferred Stock Amount | $ 5,000,000 | |||||||||
Series B Convertible Preferred Stock warrants [Member] | 2020 Series B 5% Convertible Preferred Stock Warrant 1 [Member] | ||||||||||
Per Share | $ 982.50 | |||||||||
Preferred Stock Shares | 5,089 | |||||||||
Preferred Stock Amount | $ 5,000,000 | |||||||||
Cash Payment Percentage | 8% | |||||||||
Class A Common Stock [Member] | Tewnty thousand twenty Agreement [Member] | Aspire Capital [Member] | ||||||||||
Common Stock, Shares Issued | 6,250,000 | |||||||||
Aggregate Purchase | $ 4,600,000 | $ 30,000 | ||||||||
Aggregate Purchase, commmon shares | 22,500,000 | |||||||||
Commitment fee | $ 1,400,000 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Series B-2 Preferred Stock [Member] - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Beginning Balance | $ 786,000 | $ 0 |
Exercise of Series 1 and 2 warrants | 4,983,000 | |
Conversion of Series B-2 preferred stock to common stock | (329,000) | (4,374,000) |
Change in fair value of Series B-2 preferred stock | 0 | 177,000 |
Ending Balance | $ 457,000 | $ 786,000 |
Fair Value Measurement (Detai_2
Fair Value Measurement (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value Measurements | ||
Unpaid Accrued Dividends | $ 5,000 | $ 62,000 |
Accrued dividend | 5% | |
Interest expense - preferred stock | $ 29,000 | $ 47,000 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes | ||
Book income at federal statutory rate | 21% | 21% |
State income tax, net of federal tax benefit | 6.32% | 6.32% |
Change in valuation allowance | (17.76%) | (39.84%) |
General business credit | 0% | 12.42% |
Permanent difference | 0% | 0% |
Change in Federal Statutory Rate | 0% | 0% |
Others - net | (9.56%) | 0.10% |
Total | 0% | 0% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Deferred tax asset: | ||
Net operating loss carry forwards | $ 29,863,962 | $ 28,888,330 |
Accrued payroll | 394,091 | 806,829 |
Stock compensation | 2,943,278 | 2,943,278 |
General business credit | 6,068,138 | 6,068,138 |
Other | 99,761 | 99,761 |
Deferred tax assets, Total | 39,369,230 | 38,806,336 |
Valuation allowance | (39,369,230) | (38,806,336) |
Total deferred taxes | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) $ in Millions | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
Income Taxes | |
Description for the ability to carryforward losses | The 20-year limitation was eliminated for losses incurred after January 1, 2018, giving the taxpayer the ability to carry forward losses indefinitely. However, NOL carry forward arising after January 1, 2018, will now be limited to 80% of taxable income. The $107.8 million available at June 30, 2023 includes $53.0 million of post 2017 NOLs without expiration dates and $54.8 million of pre-2018 NOLs expiring from 2024 to 2037 |
Operating loss carryforward | $ 107.8 |