Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Oct. 09, 2020 | Dec. 31, 2019 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Rezolute, Inc. | ||
Entity Central Index Key | 0001509261 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 12,596,086 | ||
Trading Symbol | RZLT | ||
Entity Common Stock, Shares Outstanding | 8,351,457 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 9,955 | $ 11,573 |
Prepaid expenses and other | 563 | 571 |
Total current assets | 10,518 | 12,144 |
Right-of-use assets, net | 383 | 0 |
Property and equipment, net | 33 | 44 |
Intangible assets, net | 0 | 29 |
Lease security deposits | 31 | 35 |
Total assets | 10,965 | 12,252 |
Current liabilities: | ||
Accounts payable | 893 | 563 |
Accrued liabilities: | ||
Insurance premiums | 188 | 0 |
Compensation and benefits | 120 | 790 |
Other | 180 | 526 |
Current portion of license fees payable to Xoma | 1,600 | 6,500 |
Current portion of operating lease liabilities | 245 | 0 |
Total current liabilities | 3,226 | 8,379 |
License fees payable to Xoma, net of current portion | 209 | 2,000 |
Operating lease liabilities, net of current portion | 165 | 0 |
Other non-current liabilities | 0 | 121 |
Total liabilities | 3,600 | 10,500 |
Commitments and contingencies (Notes 4 and 9) | ||
Stockholders' equity : | ||
Preferred Stock, $0.001 par value; 20,000 shares authorized, no shares issued | ||
Common Stock, $0.001 par value, 500,000 shares authorized; 5,867 and 4,208 shares issued and outstanding as of June 30, 2020 and 2019, respectively | 6 | 4 |
Additional paid-in capital | 154,595 | 128,651 |
Accumulated deficit | (147,236) | (126,903) |
Total stockholders? equity | 7,365 | 1,752 |
Total liabilities and stockholders? equity | $ 10,965 | $ 12,252 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000 | 20,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares issued | 5,867 | 4,208 |
Common stock, shares outstanding | 5,867 | 4,208 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Research and development: | ||
Compensation and benefits | $ 5,883 | $ 2,578 |
Clinical trial costs | 3,955 | 35 |
Consulting and outside services | 3,209 | 674 |
Material manufacturing costs | 882 | 1,232 |
Facilities and other | 521 | 534 |
Licensing costs | 0 | 14,026 |
Total research and development | 14,450 | 19,079 |
General and administrative: | ||
Compensation and benefits | 3,782 | 4,286 |
Professional fees | 1,169 | 1,341 |
Facilities and other | 1,120 | 1,238 |
Total general and administrative | 6,071 | 6,865 |
Total operating expenses | 20,521 | 25,944 |
Operating loss | (20,521) | (25,944) |
Non-operating income (expense): | ||
Interest and other income | 188 | 456 |
Interest expense | 0 | (4,958) |
Total non-operating income (expense) | 188 | (4,502) |
Net loss | (20,333) | (30,446) |
Net loss attributable to common stockholders | $ (20,333) | $ (32,719) |
Net loss per common share - basic and diluted (In dollars per share) | $ (3.54) | $ (18.41) |
Weighted average number of common shares outstanding - basic and diluted (In shares) | 5,751 | 1,777 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Series AA Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Jun. 30, 2018 | $ 0 | $ 1 | $ 90,222 | $ (94,184) | $ (3,961) |
Balance (in shares) at Jun. 30, 2018 | 0 | 1,243 | |||
Stock-based compensation | $ 0 | $ 0 | 2,636 | 0 | 2,636 |
Issued to consultants for services | 0 | 0 | 12 | 0 | 12 |
Modification for debt discount to former member of Board of Directors | 0 | 0 | 138 | 0 | 138 |
Shareholder surrender of shares for no consideration | $ 0 | $ 0 | 0 | 0 | 0 |
Shareholder surrender of shares for no consideration (in shares) | 0 | (6) | |||
Beneficial conversion feature related to Fiscal 2018 Notes | $ 0 | $ 0 | 2,233 | 0 | 2,233 |
Beneficial conversion feature related to Series AA Preferred Stock | 0 | 0 | 2,273 | (2,273) | 0 |
Cash, including Exclusivity Payment | $ 25,000 | 0 | 0 | 0 | 25,000 |
Cash, including Exclusivity Payment (in shares) | 2,500 | ||||
Principal under Fiscal 2018 Notes | $ 5,340 | 0 | 0 | 0 | 5,340 |
Principal under Fiscal 2018 Notes (in shares) | 668 | ||||
Accrued interest under Fiscal 2018 Notes | $ 800 | 0 | 0 | 0 | 800 |
Accrued interest under Fiscal 2018 Notes (in shares) | 100 | ||||
Conversion of Series AA Preferred Stock to Common Stock | $ (31,140) | $ 3 | 31,137 | 0 | 0 |
Conversion of Series AA Preferred Stock to Common Stock (in shares) | (3,268) | 2,971 | |||
Net loss | $ 0 | $ 0 | 0 | (30,446) | (30,446) |
Balance at Jun. 30, 2019 | $ 0 | $ 4 | 128,651 | (126,903) | 1,752 |
Balance (in shares) at Jun. 30, 2019 | 0 | 4,208 | |||
Stock-based compensation | $ 0 | $ 0 | 3,317 | 0 | 3,317 |
Fair value of warrants issued to consultants for services | 0 | 0 | 79 | 79 | |
Issuance of common stock for cash: Related parties at $14.50 per share | $ 0 | $ 2 | 19,998 | 0 | 20,000 |
Issuance of common stock for cash: Related parties at $14.50 per share (in shares) | 0 | 1,380 | |||
Issuance of common stock for cash: Other Investors at $14.50 per share | $ 0 | $ 0 | 4,050 | 0 | 4,050 |
Issuance of common stock for cash: Other Investors at $0.29 per share (in shares) | 0 | 279 | |||
Advisory fees and other offering costs | $ 0 | $ 0 | (1,500) | 0 | (1,500) |
Net loss | 0 | 0 | 0 | (20,333) | (20,333) |
Balance at Jun. 30, 2020 | $ 0 | $ 6 | $ 154,595 | $ (147,236) | $ 7,365 |
Balance (in shares) at Jun. 30, 2020 | 0 | 5,867 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) | 12 Months Ended |
Jun. 30, 2020$ / shares | |
Consolidated Statements of Stockholders' Equity (Deficit) | |
Issuance of common stock for cash: Related parties, per share | $ 14.50 |
Issuance of common stock for cash: Other Investors, per share | $ 14.50 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (20,333) | $ (30,446) |
Stock-based compensation expense | 3,317 | 2,636 |
Fair value of warrants issued for services | 79 | 12 |
Impairment of long-lived assets and other | 23 | 45 |
Depreciation and amortization expense | 18 | 49 |
Non-cash lease expense | 222 | 0 |
Beneficial conversion feature attributable to Fiscal 2018 Notes | 0 | 2,233 |
Accretion of debt discount and issuance costs | 0 | 2,053 |
Gain on lease termination | 0 | (168) |
Derivative gains | 0 | (74) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in prepaid expenses and other assets | 12 | (251) |
Increase (decrease) in accounts payable | 330 | (931) |
Increase (decrease) in other accrued liabilities | (1,145) | 383 |
Increase (decrease) in license fees payable to Xoma | (6,691) | 8,500 |
Increase in interest payable | 0 | 655 |
Net Cash Used In Operating Activities | (24,168) | (15,304) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of equipment | 0 | 278 |
Purchase of office furniture and equipment | 0 | (47) |
Net Cash Provided By Investing Activities | 0 | 231 |
Proceeds from investors in Series AA Financing: | ||
Exclusivity Payment | 0 | 1,500 |
Closing payment | 0 | 23,500 |
Proceeds from issuance of Common Stock | 24,050 | 0 |
Payment of offering costs | (1,500) | 0 |
Net Cash Provided by Financing Activities | 22,550 | 25,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (1,618) | 9,927 |
Cash, cash equivalents and restricted cash at beginning of fiscal year | 11,573 | 1,646 |
Cash, cash equivalents and restricted cash at end of fiscal year | 9,955 | 11,573 |
SUPPLEMENTARY CASH FLOW INFORMATION: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Issuance of Series AA Preferred Stock for conversion of: | ||
Principal balance of Fiscal 2018 Notes | 0 | 5,340 |
Accrued interest under Fiscal 2018 Notes | 0 | 800 |
Exclusivity Payment liability | 0 | 1,500 |
Conversion of Series AA Preferred Stock to Common Stock | 0 | 31,140 |
Fair value of warrant modification issued for debt discount | $ 0 | $ 138 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2020 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Rezolute, Inc. (the “Company”) is a clinical stage biopharmaceutical company incorporated in Delaware in 2010. Consolidation The Company has three wholly owned subsidiaries consisting of AntriaBio Delaware, Inc. ("Antria Delaware"), Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its three wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Reverse Stock Split In August 2019, the Company's Board of Directors approved a reverse stock split that was subject to stockholder approval at a special meeting that was concluded on October 28, 2019. Stockholders approved the proposal whereby the Board of Directors had the ability at any time on or before October 23, 2020 to execute a reverse stock split and set an exchange ratio between 20 and 100 shares of the Company's outstanding Common Stock, $0.001 par value per share, into one issued and outstanding share of Common Stock, without any change in the par value per share or the number of shares of Common Stock authorized. On October 7, 2020, the Board of Directors approved a one share for 50 shares reverse stock split of the Company's $0.001 par value Common Stock (the "Reverse Stock Split"), resulting in the filing with the Delaware Secretary of State of a Certificate of Amendment (the "Amendment") to the Company's Articles of Incorporation. The Amendment was effective on October 9, 2020. In connection with the Reverse Stock Split, proportionate adjustments were made to increase the per share exercise prices and decrease the number of shares of Common Stock issuable upon exercise of stock options and warrants whereby approximately the same aggregate price is required to be paid for such securities upon exercise as had been payable immediately preceding the Reverse Stock Split. In addition, any fractional shares that would otherwise be issued as a result of the Reverse Stock Split were rounded up to the nearest whole share. All references in the accompanying consolidated financial statements to the number of shares of Common Stock and per share amounts have been retroactively adjusted to give effect to the Reverse Stock Split. Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain amounts in the previously issued comparative financial statements for fiscal 2019 have been reclassified to conform to the current fiscal 2020 financial statement presentation. These reclassifications had no effect on the previously reported net loss, working capital, cash flows and stockholders’ equity. Comprehensive income (loss) is defined as net income (loss) plus other comprehensive income (loss). Other comprehensive income (loss) is comprised of revenues, expenses, gains, and losses that under GAAP are reported as separate components of stockholders’ equity instead of net income (loss). For the fiscal years ended June 30, 2020 and 2019, the only component of comprehensive loss was the Company’s net loss. The Company’s Chief Executive Officer also serves as the Company’s chief operating decision maker (the “CODM”) for purposes of allocating resources and assessing performance based on financial information of the Company. Since its inception, the Company has determined that its activities as a clinical stage biopharmaceutical company are classified as a single reportable operating segment. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, fair value of share-based payments and warrants, management’s assessment of going concern, clinical trial accrued liabilities, estimates of the probability and potential magnitude of contingent liabilities, and the valuation allowance for deferred tax assets due to continuing and expected future operating losses. Actual results could differ from those estimates. Risks and Uncertainties The Company's operations may be subject to significant risks and uncertainties including financial, operational, regulatory and other risks associated with a clinical stage company, including the potential risk of business failure as discussed further in Note 2, and the future impact of COVID-19 as discussed in Note 9. Cash and Cash Equivalents All highly liquid investments purchased with an original maturity of three months or less that are freely available for the Company’s immediate and general business use are classified as cash and cash equivalents. Cash and cash equivalents consist primarily of demand deposits with financial institutions. Leases The Company determines if an arrangement includes a lease as of the date an agreement is entered into. Operating leases are included in right-of-use ("ROU") assets and operating lease liabilities in the Company's Consolidated Balance Sheets. ROU assets and operating lease liabilities are initially recognized based on the present value of the future minimum lease payments at the commencement date of the lease. The Company generally uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. The Company's leases may include options to extend or terminate the lease; these options are included in the calculation of ROU assets and operating lease liabilities when it is reasonably certain that the Company will exercise the options. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to apply the recognition requirements for short-term leases. For lease agreements with lease and non-lease components, the Company generally accounts for them separately. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation of approximately $14,000 as of June 30, 2020 and $3,000 as of June 30, 2019. Maintenance and repairs are expensed as incurred. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the assets which range from 3 to 5 years. Depreciation expense commences when assets are initially placed into service for their intended use. Depreciation expense related to property and equipment amounted to approximately $11,000 and $41,000 for the fiscal years ended June 30, 2020 and 2019, respectively. Intangible Assets Intangible assets consist of patents that were recorded at the estimated acquisition date fair value. Such costs were being amortized over 11 years which was the life of the patents at the time they were acquired. Amortization expense related to intangible assets amounted to approximately $7,000 for each of the fiscal years ended June 30, 2020 and 2019. Impairment of Long-lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists for office furniture and equipment and patents if the carrying amounts of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets. An impairment charge is recognized for the amount by which the carrying amount of the asset, or asset group, exceeds its fair value.In June 2020, the Company determine that indicators of impairment existed for the patents and recognized a charge of approximately $23,000 for the remaining net carrying value of the patents. Debt Discounts and Issuance Costs Debt discounts and issuance costs (“DDIC”) incurred to obtain new debt financing or modify existing debt financing consist of incremental direct costs incurred for professional fees and due diligence services. If convertible notes are issued in conjunction with warrants, the Company allocates the proceeds to each component using a relative fair value. DDIC are presented in the accompanying consolidated balance sheets as a reduction in the carrying value of the debt and are accreted to interest expense using the effective interest method. When debt arrangements are amended, the revised terms are evaluated to determine if the amendment should be accounted for as a troubled debt restructuring, a modification or an extinguishment. If the Company determines that the lender has provided a concession and the Company is experiencing financial difficulties, treatment as a troubled debt restructuring would be required where a gain would generally be recognized. If the Company concludes that accounting as a modification is required, then any costs incurred on behalf of the lenders are accounted for as additional DDIC. If the Company concludes that accounting as an extinguishment is required, an extinguishment charge is measured on the date of the amendment based on the amount by which the fair value of the new debt instrument exceeds the net carrying value of the original debt instrument. Beneficial Conversion Features A beneficial conversion feature (“BCF”) is a non-detachable conversion feature that is “in the money” at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is in the money if the effective conversion price is lower than the commitment date fair value of a share into which it is convertible. A contingent BCF feature is measured using the commitment date security price but is not recognized in earnings until the contingency is resolved. Research and Development Costs Research and development costs are expensed as incurred. Intangible assets for in-licensing costs incurred under license agreements with third parties are charged to expense, unless the licensing rights have separate economic value in alternative future research and development projects or otherwise. Clinical Trial Accruals Clinical trial costs are a component of research and development expenses. The Company accrues and expenses clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with clinical research organizations and clinical trial sites. The Company determines the estimates through discussions with internal clinical personnel and external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. Nonrefundable advance payments for goods and services that will be used or rendered in future research and development activities, are deferred and recognized as expense in the period that the related goods are delivered, or services are performed. Stock-Based Compensation The Company measures the fair value of employee and director services received in exchange for all equity awards granted, including stock options, based on the fair market value of the award as of the grant date. The Company computes the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model and recognizes the cost of the equity awards over the period that services are provided to earn the award, usually the vesting period. For awards granted which contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized as an expense on a straight-line basis over the requisite service period as if the award was, in substance, a single award. The Company recognizes the impact of forfeitures in the period that the forfeiture occurs, rather than estimating the number of awards that are not expected to vest in accounting for stock-based compensation. The Company has granted stock options with vesting that is dependent on achieving certain market, performance and service conditions ("Hybrid Options"). For purposes of recognizing compensation cost, the Company determines the requisite service period as the longest of the derived, implicit and explicit vesting periods for each of the market, performance and service conditions, respectively. Compensation cost will be recognized beginning on such date that achievement of the performance condition is considered probable and continuing through the end of the requisite service period. Determination of the requisite service period of the Hybrid Options will be based on the date that the performance condition is considered probable. Unrecognized compensation cost for the Hybrid Options, calculated using the Black- Scholes-Merton ("BSM") pricing model, will be recognized beginning on the date that the performance condition is considered probable using the grant date fair value. If the Hybrid Options do not ultimately become exercisable as a result of failure to achieve the requisite service period, any previously recognized compensation cost will be reversed. Derivatives When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument and cannot be classified in stockholders’ equity, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded separately from the carrying value of the host contract, with subsequent changes in the estimated fair value recorded as a non-operating gain or loss in the Company’s consolidated statements of operations. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred income tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred income tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Company recognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the period in which such change occurs. Interest and penalties related to income taxes are recognized in the provision for income taxes. Loss Per Common Share Basic net loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding for each period presented. Net loss applicable to common stockholders is further adjusted to deduct BCFs that arise from deemed dividends as discussed above. Diluted net loss per common share is computed by giving effect to all potential shares of Common Stock, including stock options and warrants, to the extent dilutive. Recent Accounting Pronouncements Recently Adopted Standards. The following accounting standards were adopted during the fiscal year ended June 30, 2020: In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires the Company to recognize right-of-use assets and operating lease liabilities on the balance sheet, and also disclose key information about leasing arrangements. On July 1, 2019, the Company adopted this new standard using the modified retrospective approach in accordance with ASU No. 2018-11, Leases - Targeted Improvements . The Company elected the package of practical expedients permitted under the transition guidance within ASU No. 2018-11, which among other things, allowed the Company to carry forward the historical lease classification of those leases in place as of July 1, 2019. The impact of adoption resulted in the recognition of right-of- use assets and operating lease liabilities for the discounted present value of the future lease payments on leases that were in effect on July 1, 2019, as follows (in thousands): Right-of-use assets recorded under new standard $ 605 Operating lease liabilities recorded under new standard: Current $ 227 Long-term 406 Total 633 Eliminate previously existing deferred rent liability (28) Net increase in liabilities due to adoption of new standard $ 605 Please refer to Note 3 for further information about the right-of-use assets and operating lease liabilities recognized under this standard. Due to the Company’s election to adopt this standard effective July 1, 2019, rent expense was recognized under the accounting standard that was previously in effect for all periods prior to July 1, 2019. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. The new standard does not apply to warrants issued to a lender or investor in a financing transaction. The Company adopted ASU 2018-07 effective July 1, 2019. Prior to the adoption of ASU 2018-07, the Company accounted for stock options and warrants granted to non-employees based on the fair value of the goods and services, or the equity instrument, whichever could be measured more reliably. If fair value of the equity instrument was more reliably determined, fair value of the equity instrument was required to be re-measured until the performance commitment date was achieved, which resulted in the recognition of subsequent changes in fair value. Under the new standard, the fair value of the goods and services acquired from non-employees is solely determined using the fair value of the equity instruments issued and measurement of fair value is fixed on the grant date. The Company also made an accounting policy election to recognize the impact of forfeitures of non-employee awards in the period that the forfeiture occurs. The impact of adopting this standard was immaterial to the Company’s consolidated financial statements. Standard Required to be Adopted in Future Years. The following accounting standard is not yet effective; management has not completed its evaluation to determine the impact that adoption of this standard will have on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the guidance on the impairment of financial instruments. This update adds an impairment model (known as the current expected credit losses model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes, as an allowance, its estimate of expected credit losses. In November 2019, ASU 2016-13 was amended by ASU 2019-10, Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) whereby the effective date for ASU 2016-13 for smaller reporting companies is now required for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect the adoption of this accounting guidance will have a material impact on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. |
LIQUIDITY
LIQUIDITY | 12 Months Ended |
Jun. 30, 2020 | |
LIQUIDITY | |
LIQUIDITY | NOTE 2 — LIQUIDITY The Company is in the clinical stage and has not yet generated any revenues. For the fiscal year ended June 30, 2020, the Company incurred a net loss of $20.3 million and net cash used in operating activities amounted to $24.2 million. As of June 30, 2020, the Company had an accumulated deficit of $147.2 million, cash and cash equivalents of $10.0 million and total liabilities of $3.6 million. As discussed in Note 14, on October 9, 2020 the Company received aggregate gross proceeds from investors in a private placement of approximately $41.0 million from the issuance of units that consisted of approximately 2.5 million shares of Common Stock and warrants for the purchase of approximately 0.8 million shares of Common Stock. Management believes the Company's existing cash and cash equivalents balance plus the net proceeds from the private placement of $37.6 million will be adequate to carry out currently planned activities into the second half of fiscal year ending June 30, 2022. As discussed in Note 9, COVID-19 has resulted in an economic environment that is unfavorable for many businesses to conduct operations and pursue new debt and equity financings. The U.S. economy has been largely shut down by mass quarantines and government mandated stay-in-place orders to halt the spread of the virus. While these orders are being lifted gradually, there is considerable uncertainty surrounding the recovery period for the U.S. economy. The long-term effects on the Company are expected to result in higher costs in order to comply with safeguards to protect patients and staff engaged in clinical activities, and extended periods of time may be required to complete clinical trials. The current economic environment and financial market volatility is expected to make it more challenging for the Company to obtain funding for its clinical programs in the future. Even if an economic recovery occurs faster and more robustly than currently expected, there are no assurances that the Company will be able to obtain equity and debt financings that will be necessary to fund ongoing operations after the fiscal year ending June 30, 2022. In addition, even if these financing sources are available, they may be on terms that are not acceptable to the Company's Board of Directors and stockholders. |
LEASES
LEASES | 12 Months Ended |
Jun. 30, 2020 | |
LEASES | |
LEASES | NOTE 3 — LEASES As discussed in Note 1, the Company adopted ASU 2016-02, Leases (Topic 842) effective July 1, 2019. As of July 1, 2019, the Company had two leases in effect, consisting of (i) a lease for its headquarters location in Redwood City, California that was entered into on January 25, 2019, that provides for monthly rent of approximately $21,000 through the expiration date in March 2022, and (ii) a lease for office space in Bend, Oregon entered into on February 7, 2019, that provides for monthly rent of approximately $2,700 through the expiration date in February 2021. The impact of adoption of ASU 2016-02 resulted in the recognition of ROU assets for $0.6 million and operating lease liabilities for the discounted present value of the future lease payments on these leases of approximately $0.6 million. For the year ended June 30, 2020, under ASC 842 the Company had operating lease expense of $0.3 million, of which $0.2 million was included in research and development costs and $0.1 million was included in general and administrative expenses. For the year ended June 30, 2019 under the previous accounting standard, the Company had operating lease expense of $0.4 million, of which $0.3 million was included in research and development costs and $0.1 million was included in general and administrative expenses. The Company determined the operating lease liability of approximately $633,000 as of July 1, 2019 based upon a discount rate of 10.0% and assuming that the Company will not exercise its option to extend the headquarters lease for an additional three years. The discount rate represents the Company's estimated incremental borrowing rate for debt with similar lender rights as the underlying operating lease terms. Balance Sheet Presentation As of June 30, 2020 and on the adoption date of July 1, 2019, the carrying value of ROU assets and operating lease liabilities were as follows (in thousands): June 30, July 1, 2020 2019 Right-of-Use Assets, net $ 383 $ 605 Operating Lease Liabilities: Current $ 245 $ 227 Long-term 165 406 Total $ 410 $ 633 As of June 30, 2020, the weighted average remaining lease term under operating leases was 1.6 years, and the weighted average discount rate for operating lease liabilities was 10.0%. For the year ended June 30, 2020, cash paid for amounts included in the measurement of operating lease liabilities amounted to $0.3 million, which is included in the determination of net cash used in operating activities in the consolidated statement of cash flows. Future Lease Payments Future payments under operating lease agreements as of June 30, 2020 are as follows (in thousands): Fiscal year ending June 30, 2021 $ 272 2022 170 Total lease payments 442 Less imputed interest (32) Present value of operating lease liabilities $ 410 Restructuring Activity In April 2018, the Company implemented a restructuring plan to discontinue manufacturing activities and attempt to sublease facilities in Louisville, Colorado. In December 2018, the Company vacated its leased office and laboratory space in Colorado, resulting in an impairment charge of approximately $33,000 and a loss on sale of approximately $12,000 related to leasehold improvements, laboratory equipment, furniture, equipment and fixtures. The impairment charge and the loss on sale are included in facilities and other general and administrative expenses in the accompanying statement of operations for the fiscal year ended June 30, 2019. In December 2018, the Company entered into surrender agreements with its landlord, sub-landlord and sub-lessees to terminate all lease and sub-lease obligations at the Company's former Colorado facilities. Accordingly, the Company was relieved of its remaining obligations under the leases and relinquished its rights under the lease and sublease agreements whereby no cash was exchanged by the parties and the Company recognized a net gain on lease termination of approximately $0.2 million. This gain is included in interest and other income in the accompanying statement of operations for the fiscal year ended June 30, 2019. |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 12 Months Ended |
Jun. 30, 2020 | |
LICENSE AGREEMENTS | |
LICENSE AGREEMENTS | NOTE 4 —LICENSE AGREEMENTS Xoma License Agreement On December 6, 2017, the Company entered into a license agreement (“License Agreement”) with XOMA Corporation (“Xoma”), through its wholly-owned subsidiary, XOMA (US) LLC, pursuant to which Xoma granted an exclusive global license to the Company to develop and commercialize Xoma 358 (formerly X358, now RZ358) for all indications. Additionally, upon the future commercialization of RZ358, the Company will be required to pay royalties to Xoma based on the net sales of the related products. On January 7, 2019, the License Agreement was amended whereby the Company was required to make five cash payments to Xoma totaling $8.5 million on or before specified staggered future dates (the “Future Cash Payments”). As a result of this amendment to the License Agreement, the Company recognized a liability in January 2019 for the entire $8.5 million of Future Cash Payments. The January 2019 amendment to the License Agreement provided that if future qualified financings occurred before the Future Cash Payments were fully paid, the Company was required to pay Xoma 15% of the net proceeds from such financings (“Early Payments”) to be credited against the remaining unpaid Future Cash Payments in the reverse order of their future payment date. Obligations to make the Future Cash Payments following a qualified financing and the obligations to make Early Payments shall end when the Future Cash Payments are fully paid for the total of $8.5 million. As discussed in Note 5, the Company completed equity financings for net proceeds of approximately $22.6 million in July and August 2019, which met the definition of a qualified financing and resulted in the obligation to make Early Payments of approximately $3.4 million. On March 31, 2020, the parties entered into Amendment No. 3 to the License Agreement to extend the payment schedule for the remaining balance of approximately $2.6 million. The revised payment schedule provides for seven quarterly payments to be paid from March 31, 2020 through September 30, 2021. Pursuant to Amendment No. 3, the Company is obligated to repay the remaining outstanding balance within 15 days following a financing for $20.0 million or more. Presented below is a summary of cash payments under the amended License Agreement, and the impact of Amendment No. 3 on the remaining payment obligations as of June 30, 2020 (in thousands): Balance Balance June 30, Cash Payments Amendment June 30, Scheduled Payment Date 2019 Early Scheduled No. 3 2020 September 30, 2019 $ 1,500 $ — $ (1,500) $ — $ — December 31, 2019 1,000 — (1,000) — — March 31, 2020 2,000 — (400) (1,600) — June 30, 2020 2,000 (1,391) (400) (209) — September 30, 2020 2,000 (2,000) — 400 400 December 31, 2020 — — — 400 400 March 31, 2021 — — — 400 400 June 30, 2021 — — — 400 400 September 30, 2021 — — — 209 209 Total 8,500 $ (3,391) $ (3,300) $ — 1,809 Less long-term portion of payable (2,000) (209) Current portion of payable $ 6,500 $ 1,600 As discussed in Note 14, the Company completed a private placement of equity securities for gross proceeds of $41.0 million in October 2020, which resulted in acceleration of the entire obligation shown above which is now payable by October 2020. The January 2019 amendment to the License Agreement also revised the amount the Company is required to expend on development of RZ358 and related licensed products, and revised provisions with respect to the Company’s diligence efforts in conducting clinical studies. In addition to the License Agreement entered between the Company and Xoma in December 2017, both parties also entered into a stock purchase agreement (“Stock Purchase Agreement”) whereby Xoma owns approximately 162,000 shares of the Company’s Common Stock as of June 30, 2020. Until such time that the Company’s shares of Common Stock are traded on a national stock exchange, the Stock Purchase Agreement provides Xoma with the right and option to require the Company to use its best efforts to facilitate orderly sales of the shares to a third party or purchase the shares (the “Put Option”). Xoma may exercise the Put Option for up to a total of 50,000 shares of Common Stock for the calendar year ending December 31, 2020, and up to an additional 50,000 shares thereafter. If Xoma subsequently exercises the Put Option, the Company is required to use its best efforts to assist Xoma in facilitating the sale of shares to third-party purchasers or purchase the shares for its own account. The price per share under the Put Option is equal to the average of the closing bid and asked prices of the Common Stock on the date the Put Option is exercised. ActiveSite License Agreement On August 4, 2017, the Company entered into a Development and License Agreement with ActiveSite Pharmaceuticals, Inc. (“ActiveSite”) pursuant to which the Company acquired the rights to ActiveSite’s Plasma Kallikrein Inhibitor program (“PKI Portfolio”). The Company is initially using the PKI Portfolio to develop an oral PKI therapeutic for diabetic macular edema (RZ402) and may use the PKI Portfolio to develop other therapeutics for different indications. The ActiveSite License Agreement requires various milestone payments ranging from $1.0 million to $10.0 million when milestone events occur, up to $46.5 million of aggregate milestone payments. The first milestone payment for $1.0 million relates to the Company’s RZ402 drug candidate and is due after completion of the preclinical work and submission of an Initial Drug Application, or IND, to the U.S. Food and Drug Administration. The Company is also required to pay royalties equal to 2.0% of any sales of products that use the PKI Portfolio. Through June 30, 2020, no events have occurred that would result in the requirement to make milestone payments and no royalties have been incurred. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Jun. 30, 2020 | |
CONVERTIBLE NOTES PAYABLE | |
CONVERTIBLE NOTES PAYABLE | NOTE 5 — CONVERTIBLE NOTES PAYABLE Between January and April 2018, the Company entered into convertible notes payable with an aggregate principal balance of $5.3 million (the “Fiscal 2018 Notes”). The Fiscal 2018 Notes provided for interest at the contractual rate of 15.0% for the period from July 1, 2019 through the conversion date. The Fiscal 2018 Notes also provided that the unpaid principal and accrued interest would automatically convert at a 20% discount to the class of securities issued upon completion of a subsequent equity financing for at least $15 million. This feature that enabled conversion at a discount was a contingent BCF that was not calculated and recorded until the financing that triggered conversion was completed. The closing of the Series AA Financing resulted in the conversion of the Fiscal 2018 Notes whereby the contingent BCF was measured and recognized on January 30, 2019 as shown below (in thousands). Debt as of January 30, 2019 Debt Converted to Series Series AA Preferred Stock Beneficial Original Accrued AA Preferred Stock Converted to Common Stock Conversion Date of Borrowing Principal Interest Total Shares Fair Value Shares Fair Value Feature January 2018 $ 500 $ 95 $ 595 74 $ 744 (1) 68 $ 811 (2) $ 216 (3) February 2018 700 102 802 100 1,002 (1) 91 1,094 (2) 292 (3) April 2018 4,140 603 4,743 594 5,929 (1) 539 6,468 (2) 1,725 (3) Total $ 5,340 $ 800 $ 6,140 768 $ 7,675 (1) 698 $ 8,373 (2) $ 2,233 (3) (1) Fair value was based on the $10.00 per share issuance price for Series AA Preferred Stock as discussed in Note 6. (2) The shares of Series AA Preferred Stock were immediately convertible to shares of Common Stock at a price of $11.00 per share. Fair value was based on the closing price of the Company’s Common Stock of $12.00 per share on January 30, 2019. (3) The beneficial conversion feature represents the difference between the fair value of the share of Common Stock and the total debt balance as of January 30, 2019. Presented below is a summary of the components of interest expense related to Fiscal 2018 Notes for the fiscal year ended June 30, 2019 (in thousands): Interest expense at contractual rate $ 672 Accretion of discount 2,053 Beneficial conversion feature for Fiscal 2018 Notes 2,233 Total interest expense $ 4,958 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2020 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 6 — STOCKHOLDERS’ EQUITY Changes in Authorized Capital Stock On April 24, 2019, the Company’s stockholders approved an amendment to the Certificate of Incorporation to (i) increase the authorized number of shares of Common Stock from 200 million shares to 500 million shares, and (ii) rescinded the previous designation of 15.0 million shares of Series A Preferred Stock. As a result of this action, the Company had authority to designate and issue up to 20.0 million shares of Preferred Stock as of June 30, 2020 and 2019. Series AA Preferred Stock Financing In December 2018, two investors expressed interest in investing in the Company and affirmed their intent to enter into exclusive diligence and negotiations regarding a potential equity financing (“Transaction”). In exchange for the receipt of a total of $1.5 million (“Exclusivity Payment”), the Company entered into an exclusivity agreement with Handok, Inc. ("Handok") and Genexine, Inc. ("Genexine"). On January 7, 2019, the parties entered into a Purchase Agreement for Shares of Series AA Preferred Stock (the "Purchase Agreement") whereby Handok and Genexine (collectively referred to as "H&G") agreed to purchase shares of newly designated Series AA Preferred Stock (the “Series AA Financing”) for aggregate gross proceeds to the Company of $25.0 million (inclusive of the $1.5 million Exclusivity Payment). On January 18, 2019, the board of directors authorized the designation of 5.0 million shares of the Company’s Preferred Stock as Series AA Preferred Stock. On January 30, 2019, the parties closed the Series AA Financing and the Company issued an aggregate of 2.5 million Series AA shares to H&G at a purchase price of $10.00 per share. The Series AA Shares held by H&G were convertible into shares of Common Stock at a conversion price of approximately $11.00 per share. The fair value of the Company’s Common Stock on the issuance date of the Series AA Preferred Stock was $12.00 per share which resulted in a BCF of approximately $2.3 million. Since the Series AA Shares were classified as equity instruments, this BCF has been treated as an adjustment in computing net loss attributable to common stockholders shown in Note 12. A condition to closing the Series AA Financing was the resignation of a majority of the Company’s former directors and the appointment of representatives of H&G as directors whereby H&G collectively controlled the board of directors. On April 24, 2019, the Company’s stockholders approved an increase in the number of authorized shares of Common Stock whereby all 2.5 million shares of Series AA Preferred Stock held by H&G automatically converted into approximately 2.3 million shares of the Company’s Common Stock. Due to closing of the Series AA Financing for gross proceeds of $25.0 million, the Company’s outstanding Fiscal 2018 Notes in the aggregate principal and accrued interest balance of $6.1 million automatically converted into approximately 0.8 million shares of Series AA Preferred Stock, resulting in an effective issuance price of $8.00 per share after giving effect to the 20% discount included in the terms of the Fiscal 2018 Notes. This 20% discount resulted in the recognition of a BCF for $2.2 million that was charged to interest expense for the year ended June 30, 2019. Upon receipt of stockholder approval for an increase in the number of authorized shares of Common Stock to 500 million shares on April 24, 2019, all 3.3 million shares of Series AA Preferred Stock held by Handok, Genexine and the former holders of the Fiscal 2018 Notes converted into an aggregate of approximately 3.0 million shares of the Company’s Common Stock as set forth below (in thousands, except per share amounts): Series AA Preferred Stock Common Stock Conversion Number Conversion Value Price Per Number of Holders of Shares Per Share Amount Share Shares H&G 2,500 $ 10.00 $ 25,000 $ 11.00 2,273 Fiscal 2018 Note holders 768 10.00 7,675 11.00 698 Total 3,268 $ 32,675 2,971 Fiscal 2020 Private Placement In connection with the Series AA Financing discussed above, the Company granted call options to H&G whereby upon the earlier of (i) December 31, 2020 and (ii) such date that the Company requests H&G to provide additional financing, H&G were entitled to purchase up to an aggregate of $20.0 million of Common Stock at a purchase price equal to the greater of (i) $14.50 per share or (ii) 75% of the volume weighted average closing price (“VWAP”) of the Company’s Common Stock during the thirty consecutive trading days prior to the date of the notice. On June 19, 2019, the Company entered into a financial advisory agreement to undertake a private placement (the “Private Placement”) of (i) the shares of Common Stock issuable under the call options for a total of $20.0 million, plus (ii) up to $10 million of equity or equity equivalent securities to be issued to other investors. On July 23, 2019, the Company entered into a purchase agreement whereby H&G exercised their call options to purchase an aggregate of approximately 1.4 million shares of Common Stock for gross cash proceeds of $20.0 million at a purchase price of $14.50 per share. As of June 30, 2020, H&G collectively owned approximately 62% of the Company’s Common Stock which resulted in a change of control. During July and August 2019, other investors purchased an aggregate of approximately 279,000 shares of Common Stock at a purchase price of $14.50 per share for gross cash proceeds of $4.1 million. Pursuant to the financial advisory agreement, the Company paid a fee of 6.0% of the gross proceeds received from these private placements. The total advisory fees and other offering costs related to these issuances in July and August 2019 amounted to approximately $1.5 million, resulting in net proceeds of $22.6 million for the fiscal year ended June 30, 2020. As discussed in Note 4, the completion of these financings resulted in the obligation to make Early Payments of approximately $3.4 million under the License Agreement with Xoma. With the closing of the Private Placement, under the terms of the financial advisory agreement until August 2020, the financial advisors have a right of first refusal to serve as Joint Bookrunners or Joint Placement Agents in any offering the Company undertakes. Restricted Cash In connection with the private placement discussed above, one of the investors purchased approximately 262,000 shares of Common Stock for gross proceeds of $3.8 million. The Company agreed to spend the proceeds for research and development of RZ358 or for the Company’s planned uplisting of its Common Stock to a national stock exchange. For the year ended June 30, 2020, the Company expended the entire amount of the restricted cash proceeds on qualified activities whereby there are no restrictions on cash balances as of June 30, 2020. Lincoln Park Purchase Agreement In December 2017, the Company entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to which Lincoln Park agreed to purchase up to an aggregate of $10.0 million of the Company’s Common Stock (subject to certain limitations) over the term of the agreement that expires in December 2020. Subject to restrictions in the Purchase Agreement and so long as the closing price of the Company’s Common Stock exceeds $20.00 per share, the Company may elect to require Lincoln Park to purchase up to $10.0 million of shares of the Company’s Common Stock. The Company’s Common Stock has not exceeded the threshold price of $20.00 per shares for the period from August 2018 through June 2020. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. |
STOCK-BASED COMPENSATION AND WA
STOCK-BASED COMPENSATION AND WARRANTS | 12 Months Ended |
Jun. 30, 2020 | |
STOCK-BASED COMPENSATION AND WARRANTS | |
STOCK-BASED COMPENSATION AND WARRANTS | NOTE 7 — STOCK-BASED COMPENSATION AND WARRANTS Stock Option Plans The Company currently has two active stock option plans consisting of the 2016 Non-Qualified Stock Option Plan, as amended (the “2016 Plan”), and the 2019 Non Qualified Stock Option Plan (the “2019 Plan”). On July 31, 2019, the 2019 Plan was adopted by the Board of Directors and provides authority to grant non-qualified stock options for up to 300,000 shares of the Company’s Common Stock. The Company also has stock options outstanding to purchase up to approximately 44,000 shares of Common Stock under the 2014 Stock and Incentive Plan (the “2014 Plan”) that terminated on March 21, 2019 and approximately 95,000 shares of Common Stock under the 2015 Stock and Incentive Plan (the “2015 Plan”) that terminated on February 23, 2020. Stock options outstanding under the 2014 Plan and the 2015 Plan expire pursuant to their contractual provisions on various dates through 2029. Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans (in thousands): Termination Number of Shares Description Date Authorized Outstanding Available 2014 Plan March 2019 44 44 — 2015 Plan February 2020 95 95 — 2016 Plan October 2021 560 524 36 2019 Plan July 2029 300 300 — Total 999 963 36 July 2019 Grants On July 31, 2019, the Board of Directors granted stock options for an aggregate of approximately 679,000 shares of Common Stock to certain officers and employees at an exercise price of $14.50 per share (the “July 2019 Grants”). The closing price of the Company’s Common Stock on the date of grant was approximately $10.50 per share. The July 2019 Grants were designated for approximately 379,000 shares under the 2016 Plan and 300,000 shares under the 2019 Plan. As of July 31, 2019, the number of shares subject to stock options, the related fair value and compensation that was immediately recognized for options that immediately vested are as follows (in thousands): Time-Based Vesting Unvested Number of Shares Hybrid Vested Unvested Options Total Executive officers 72 (1) 231 (1) 151 (2) 454 Other employees 18 (1) 133 (1) 74 (2) 225 Total 90 364 225 (5) 679 Total fair value $ 817 (3) $ 3,297 (4) (1) Stock options that are subject to time-based vesting become exercisable (i) for employees who were employed by the Company for more than one year as of the grant date, 25% of such options were immediately exercisable, and for employees that were employed by the Company for less than one year as of the grant date, 25% of such options will vest on the one year anniversary of the employee's hire date, and (ii) the remaining 75% of the stock options will vest ratably over a period of 36 months beginning on the vesting date for the initial 25% tranche. (2) Stock options that commence vesting upon the achievement of market, performance and service conditions (‘Hybrid Options”) will vest ratably over a period of 36 months beginning on the date that all of the following have occurred: (i) the option recipient has been employed by the Company for at least one year, (ii) the Company’s shares of Common Stock have been listed for trading on a national stock exchange, and (iii) such date no later than July 31, 2023, when the Company’s closing stock price exceeds $29.00 per share for 20 trading days in any consecutive 30 day period. (3) Represents the aggregate grant date fair value for stock options that were immediately vested on the grant date, which is included in stock-based compensation expense for the year ended June 30, 2020. (4) Represents the aggregate grant date fair value for stock options that were not immediately vested on the grant date and are being charged to expense from the grant date through the respective vesting dates through July 2023. (5) The Company has not recognized any expense related to these stock options for the year ended June 30, 2020, since it is not yet probable that the performance condition will be achieved. The Company will begin recognizing compensation expense at such time that the performance condition is probable and continuing through the end of the requisite service period. Determination of the requisite service period for the Hybrid Options will be calculated on the date that the performance condition is considered probable using grant date fair value. Stock Options Outstanding The following table sets forth a summary of the combined stock option activity under all of the Company’s stock option plans for the years ended June 30, 2020 and 2019 (shares in thousands): 2020 2019 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 277 $ 79.88 388 $ 77.50 7.8 Stock options granted: Awards with time-based vesting 497 14.50 23 26.00 Awards with performance-based vesting 225 14.50 — — Stock options forfeited: Awards with time-based vesting (25) 24.39 (134) 76.50 Awards with performance-based vesting (11) 14.50 — — Outstanding, end of fiscal year 963 33.06 277 79.88 6.4 Vested, end of fiscal year 431 53.14 192 92.50 5.7 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. For the year ended June 30, 2020, the aggregate fair value of stock options granted for approximately 497,000 shares of Common Stock that provide solely for time-based vesting, amounted to $4.2 million or approximately $8.38 per share as of the grant date. For the year ended June 30, 2020, the aggregate fair value of stock options granted for 225,000 shares of Common Stock that provide for hybrid vesting, amounted to $2.1 million or approximately $9.51 per share as of the grant date. For the year ended June 30, 2019, the aggregate fair value of stock options granted for 22,500 shares of Common Stock that provide solely for time-based vesting amounted to $0.4 million or approximately $19.79 per share as of the grant date. Fair value was computed using the BSM option-pricing model and will result in the recognition of compensation cost ratably over the expected vesting period of the stock options. For the years ended June 30, 2020 and 2019, the fair value of stock options that provide for time-based and hybrid vesting was estimated on the date of grant using the BSM option-pricing model, with the following weighted-average assumptions: 2020 2019 Time-Based Hybrid Time-Based Market price of common stock on grant date $ 10.23 $ $ 26.00 Expected volatility 118 % 118 % 84 % Risk free interest rate 1.9 % 2.0 % 2.8 % Expected term (years) 5.7 8.0 7.0 Dividend yield 0 % 0 % 0 % Stock-based compensation expense for the fiscal years ended June 30, 2020 and 2019 is included in compensation and benefits under the following captions in the consolidated statements of operations (in thousands): 2020 2019 Research and development $ 1,589 $ 538 General and administrative 1,728 2,098 Total $ 3,317 $ 2,636 Unrecognized stock-based compensation expense for stock options that provide solely for time-based vesting as of June 30, 2020 was approximately $3.4 million. This amount is expected to be recognized over a remaining weighted average period of 1.9 years. Unrecognized compensation cost for the Hybrid Options will be recognized beginning on the date that the performance condition becomes probable using the grant date fair value. Based on preliminary estimates using the BSM option-pricing model, management believes the aggregate fair value of the Hybrid Options will be approximately $2.1 million before adjusting for forfeitures. As of June 30, 2020 and 2019, there was no intrinsic value associated with any outstanding stock options. Warrants The Company has issued warrants to purchase shares of Common Stock in conjunction with various debt and equity financings and for services. As of June 30, 2020 and 2019, all of the warrants are vested. For the fiscal years ended June 30, 2020 and 2019, no warrants were exercised. Presented below is a summary of grants, modifications and expirations for the fiscal years ended June 30, 2020 and 2019 (shares in thousands): 2020 2019 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 920 $ 66.80 913 $ 68.29 3.4 Warrants issued for consulting services 14 (3) 14.50 — — Modification for debt discount to former member of Board of Directors: Replacement warrant — — 24 (4) 9.00 Canceled warrant — — (10) (4) 25.94 Warrant expirations (316) 82.78 (7) 120.27 Outstanding, end of fiscal year 618 57.46 2.3 920 66.80 3.4 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire. (3) Represents warrants granted for consulting services in November 2019 with an expiration date in November 2024. The fair value of the warrants of $67,000 was determined using the BSM model. Since the warrants were immediately vested, this entire amount is included in consulting and outside services under research and development expenses for the year ended June 30, 2020. Key assumptions for the valuation of these warrants included the closing price of the Company’s shares of Common Stock of $14.50 on the grant date, the exercise price of $6.50 per share, historical volatility of 119%, and an expected term of 5.0 years. (4) In January 2019, the Company agreed to modify a warrant originally issued in June 2018 for 10,000 shares that was exercisable at $25.94 per share. This warrant was originally issued in connection with one of the Fiscal 2018 Notes issued to a former member of the Board of Directors. The difference between the fair value of the modified warrant and the fair value of the canceled warrant amounted to $138,000, which was accounted for as an additional debt discount that was charged to interest expense upon repayment of the Fiscal 2018 Notes on January 30, 2019. Key assumptions for valuation of the modified warrant and the canceled warrant included the fair value of Company's Common Stock on the modification date of $11.50 per share, expected volatility of 100%, a risk-free interest rate of 2.5%, and an estimated remaining term of 4.0 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 8 — INCOME TAXES Income Tax Expense For the fiscal years ended June 30, 2020 and 2019, the reconciliation between the income tax benefit computed by applying the statutory U.S. federal income tax rate to the pre-tax loss before income taxes, and total income tax expense recognized in the financial statements is as follows (in thousands): 2020 2019 Income tax benefit at statutory U.S. federal rate $ 4,270 $ 6,394 Income tax benefit attributable to U.S. states 1,420 1,876 Non-deductible expenses (12) (1,045) Stock option expirations (52) (1,484) Other 392 (328) Change in valuation allowance (6,018) (5,413) Total income tax expense $ — $ — For the fiscal years ended June 30, 2020 and 2019, the Company did not recognize any current income tax expense or benefit due to a full valuation allowance on its deferred income tax assets. Deferred Income Tax Assets and Liabilities As of June 30, 2020 and 2019, the income tax effects of temporary differences that give rise to significant deferred income tax assets and liabilities are as follows (in thousands): 2020 2019 Deferred income tax assets: Net operating loss carryforwards $ 21,651 (1) $ 20,016 Intangible assets 5,182 (1) — Stock-based compensation 4,592 3,716 Start-up and organizational expenses 203 338 Accrued expenses and other 47 1,598 Total deferred income tax assets 31,675 25,668 Valuation allowance for deferred income tax assets (31,674) (25,656) Net deferred income tax assets 1 12 Deferred income tax liability- property, equipment and other (1) (12) Net deferred income tax assets $ — $ — (1) Amounts include the impact of giving effect to the reclassification of approximately $4.1 million from net operating loss carryforwards to intangible assets due to license fees that were incorrectly expensed for income tax purposes in previous fiscal years. During the fiscal year ended June 30, 2020, the Company’s income tax returns were corrected whereby these license costs were capitalized and are being amortized over 15 years for income tax purposes. Due to the valuation allowance for deferred income tax assets in previous years, this reclassification did not have any impact on the Company’s previously reported net losses or accumulated deficit. For the fiscal year ended June 30, 2020, the valuation allowance increased by $6.0 million, primarily as a result of the increase in net operating losses. In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. NOL Carryforwards and Other Matters The Company files income tax returns in the U.S. federal jurisdiction and the states of Colorado and California. The Company’s federal and state tax years for the 2017 fiscal year and forward are subject to examination by taxing authorities. As of June 30, 2020, the Company has U.S. federal NOL carryforwards of approximately $85.2 million, of which approximately $30.6 million does not expire and $54.6 million will begin to expire in 2031. Additionally, the Company has Colorado and California NOL carryforwards that begin to expire in 2031. Federal and state laws impose substantial restrictions on the utilization of NOL carryforwards in the event of an ownership change for income tax purposes, as defined in Section 382 of the Internal Revenue Code (“IRC”). Pursuant to IRC Section 382, annual use of the Company’s NOL carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has not completed an IRC Section 382 analysis regarding the limitation of NOL carryforwards. However, it is possible that past ownership changes will result in the inability to utilize a significant portion of the Company’s NOL carryforward that was generated prior to any change of control. The Company’s ability to use its remaining NOL carryforwards may be further limited if the Company experiences an IRC 382 ownership change in connection with future changes in the Company’s stock ownership. The Company did not have any unrecognized tax benefits as of June 30, 2020 and 2019. The Company’s policy is to account for any interest expense and penalties for unrecognized tax benefits as part of the income tax provision. The Company does not anticipate that unrecognized tax benefits will significantly increase or decrease within the next twelve months. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 — COMMITMENTS AND CONTINGENCIES Milestone Payments and Royalties Please refer to Note 4 for further discussion of commitments to make milestone payments and to pay royalties under license agreements. COVID-19 In December 2019, COVID-19 was reported to have surfaced in Wuhan, China, and by March 2020 the spread of the virus had resulted in a world-wide pandemic. The U.S. economy has been largely shut down by mass quarantines and government mandated stay-in-place orders to halt the spread of the virus. While these orders are being lifted gradually, a full recovery of the U.S. economy may not occur until 2021 or later. Federal and state governments in the U.S. have approved funding for many programs that may provide financial assistance to individuals and businesses. The Company intends to pursue all material types of government assistance that it may be entitled to. However, no assurance can be provided that the Company will qualify and realize any material benefits from such assistance. COVID-19 has resulted in an economic environment that is unfavorable for many businesses to pursue new equity financings. Accordingly, the current economic environment is expected to present greater challenges for the Company to obtain additional funding for its clinical programs on terms that are acceptable to the Company's Board of Directors. In February 2020, Rezolute announced the initiation of its Phase 2b trial in Congenital Hyperinsulinism ("CHI"). New site initiation and enrollment is on hold, similar to many other clinical studies conducted by other companies throughout the world. There are no mitigation strategies we can employ to help avoid potential timeline delays should there be an extended enrollment pause due to COVID-19. The long-term effects of COVID-19 are expected to require additional safeguards to protect patients and staff engaged in clinical activities, and extended periods of time required to complete clinical trials, both of which are expected to result in higher overall costs. While the current business disruption is expected to be temporary, the long-term financial impact and the duration cannot be reasonably estimated at this time. Employment Agreements As of June 30, 2020, the Company was subject to employment agreements with three executive officers that provide for aggregate annual base salaries of $1.2 million. In the event the Company terminates employment of the executive officers without cause, severance benefits include (i) between one and three years of base salary, (ii) between 50% and 150% of annual target bonuses applicable to the terminated executive, and (iii) continuation of certain medical and dental benefits. In addition, vesting is accelerated for unvested stock options that would have otherwise vested during the period that the severance benefits are paid out. 401(k) Plan The Company has a defined contribution employee benefit plan under section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers all eligible employees who are entitled to participate six months after commencement of employment. The Company matches contributions up to 4% of the participating employee’s compensation with such matching contributions vested immediately. Total contributions by the Company to the 401(k) Plan amounted to approximately $0.1 million for each of the fiscal years ended June 30, 2020 and 2019. Legal Matters From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of June 30, 2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the Company’s results of operations. At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies . Legal fees are expensed as incurred. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 10 — RELATED PARTY TRANSACTIONS Equity Issuances As discussed in Note 6, on July 23, 2019 H&G agreed to purchase an aggregate of approximately 1.4 million shares of Common Stock at an issuance price of $14.50 per share for gross proceeds of $20.0 million. This purchase was made pursuant to the terms of the call option that was issued in connection with an equity offering in January 2019 that resulted in gross proceeds of $25.0 million. As of June 30, 2020, H&G own an aggregate of approximately 62% of the Company’s outstanding shares of Common Stock. Master Services Agreement Effective July 1, 2019, the Company entered into a Master Services Agreement ("MSA") with H&G whereby the Company agreed to assist H&G in an evaluation of their long acting growth hormone program referred to as GX-H9. For the years ended June 30, 2020, the Company charged H&G for employee services of $103,000 and reimbursable expenses incurred with unrelated parties of $144,000, for a total of approximately $247,000. Amounts charged under the MSA for employee services are reflected as a reduction of research and development compensation costs in the accompanying consolidated statement of operations for the year ended June 30, 2020. |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Jun. 30, 2020 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
SUPPLEMENTAL FINANCIAL INFORMATION | NOTE 11 - SUPPLEMENTAL FINANCIAL INFORMATION Interest and other income consist of the following for the years ended June 30, 2020 and 2019 (in thousands): 2020 2019 Interest income $ 188 $ 61 Gain on lease termination — 168 Gain from change in fair value of embedded derivatives — 74 Rental income — 153 Total $ 188 $ 456 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Jun. 30, 2020 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | NOTE 12 — NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss attributable to Common Stockholders by the weighted average number of common shares outstanding during the period. The calculation of net loss attributable to Common Stockholders for the year ended June 30, 2019 reflects the BCF related to the issuance of Series AA Preferred Stock to H&G discussed in Note 6, as follows (in thousands): 2020 2019 Net loss $ (20,333) $ (30,446) Beneficial conversion feature — (2,273) Net loss attributable to common stockholders $ (20,333) $ (32,719) For the years ended June 30, 2020 and 2019, basic and diluted net loss per share were the same since all Common Stock equivalents were anti-dilutive. As of June 30, 2020 and 2019, the following potential Common Stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands): 2020 2019 Stock options 963 277 Warrants 618 920 Total 1,581 1,197 |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 12 Months Ended |
Jun. 30, 2020 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | NOTE 13 — FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair measurement: Level 1—Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2—Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market collaboration, for substantially the full term of the asset or liability. Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any market activity for the asset or liability at measurement date. Due to the relatively short maturity of the respective instruments, the fair value of cash and cash equivalents, accounts payable and accrued liabilities approximated their carrying values as of June 30, 2020 and 2019. The Company did not have any other assets and liabilities measured at fair value as of June 30, 2020 and 2019. The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the fiscal years ended June 30, 2020 and 2019, the Company had no transfers of its assets or liabilities between levels of the fair value hierarchy. Significant Concentrations Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents at high-quality financial institutions. Cash deposits often exceed the amount of federal insurance provided on such deposits. As of June 30, 2020 and 2019, the Company had cash and cash equivalents with a single financial institution with a balance of $10.0 million and $11.6 million, respectively. The Company has never experienced any losses related to its investments in cash and cash equivalents. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 14 — SUBSEQUENT EVENTS Related Party Licensing Agreement On September 15, 2020, the Company entered into an exclusive license agreement with Handok (the “Handok License”) for the territory of the Republic of Korea. The Handok License relates to pharmaceutical products in final dosage form containing the pharmaceutical compounds developed or to be developed by the Company, including those related to RZ358 and RZ402. The Handok License is in effect for a period of 20 years after the first commercial sale of each product, and requires (i) milestone payments of $0.5 million upon approval of a New Drug Application (“NDA”) for each product in the territory, and (ii) the Company will sell products ordered by Handok at a transfer price equal to 70% of the net selling price of the products. To date, no milestone payments have been earned by the Company. Fiscal 2021 Financing On September 15, 2020, the Company entered into financial advisory agreements to undertake a private placement of equity or equity equivalent securities (the “Fiscal 2021 Financing”). Pursuant to the financial advisory agreements, the Company agreed to pay transaction fees to the financial advisors for an aggregate of 6.0% of the gross proceeds plus out-of-pocket expenses. In addition, for any financing completed within 60 days of the closing of the Fiscal 2021 Financing, the financial advisors are entitled to additional transaction fees equal to 6.0% of the gross proceeds. On October 9, 2020, the Company completed the Fiscal 2021 Financing through the sale of units (the “Units”) consisting of (i) approximately 2.5 million shares of Common stock, and (ii) warrants entitling the holders to purchase approximately 0.8 million shares of Common Stock (the “Warrants”). The Warrants are exercisable at $19.50 per share for a period of seven years and may be exercised on a cash or cashless basis at the election of the holders. The Units were issued for a purchase price of $16.50 per Unit, resulting in gross proceeds of $41.0 million. Pursuant to the financial advisory agreements, the Company paid transaction fees of $2.5 million, and costs for professional fees and other offering costs are estimated at approximately $0.9 million. After deducting the financial advisory fees and other offering costs, the estimated net proceeds amounted to approximately $37.6 million. Pursuant to the terms of the Fiscal 2021 Financing, the Company executed the Reverse Stock Split discussed in Note 1 and agreed to use commercially reasonable efforts to enable trading of its Common Stock on the Nasdaq Capital Market. The Company effected a one share for 50 shares reverse stock split on October 9, 2020. In addition, the Company entered into a registration rights agreement (“RRA”), pursuant to which the Company agreed to use commercially reasonable efforts to register (i) the shares of Common Stock included in the Units, and (ii) the shares of Common Stock issuable upon exercise of the warrants. If the Company fails to register the shares pursuant to the terms of the RRA, liquidated damages up to a maximum of 6.0% of the gross proceeds of the Fiscal 2021 Financing may be assessed. Early Payments to Xoma Upon completion of a qualified financing of $20.0 million or more, the Company is obligated to repay the remaining outstanding balance due to Xoma within 15 days as discussed in Note 4. The completion of the Fiscal 2021 Financing resulted in acceleration of the remaining balance due to Xoma of $1.8 million as of June 30, 2020. The Company expects to make this payment to Xoma by October 2020. Unaudited Pro Forma Disclosure Presented below is an unaudited pro forma balance sheet that gives effect to the Fiscal 2021 Financing and the Early Payments to Xoma, as if these events had occurred on June 30, 2020 (in thousands, except per share amount): Equity Financing Xoma Gross Offering Early Historical Proceeds (1) Costs (2) Payments (3) Pro Forma (Unaudited) Assets Current assets: Cash and cash equivalents $ 9,955 $ 41,000 $ (3,420) $ (1,809) $ 45,726 Other current assets 563 — — — 563 Total current assets 10,518 41,000 (3,420) (1,809) 46,289 Non-current assets: Right-of-use assets, net 383 — — — 383 Other 64 — — — 64 Total assets $ 10,965 $ 41,000 $ (3,420) $ (1,809) $ 46,736 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 893 $ — $ — $ — $ 893 Accrued liabilities 488 — — — 488 Current portion of license fees payable to Xoma 1,600 — — (1,600) — Current portion of operating lease liabilities 245 — — — 245 Total current liabilities 3,226 — — (1,600) 1,626 Non-current liabilities: License fees payable to Xoma, net of current portion 209 — — (209) — Operating lease liabilities, net of current portion 165 — — — 165 Total liabilities 3,600 — — (1,809) 1,791 Stockholders' equity: Common stock, $0.001 par value, 500,000 shares authorized; see below for outstanding shares 6 2 — — 8 Additional paid-in capital 154,595 40,998 (3,420) — 192,173 Accumulated deficit (147,236) — — — (147,236) Total stockholders' equity 7,365 41,000 (3,420) — 44,945 Total liabilities and stockholders' equity $ 10,965 $ 41,000 $ (3,420) $ (1,809) $ 46,736 Number of shares of Common Stock outstanding 5,867 2,485 — — 8,352 (1) Gives effect to the receipt of gross proceeds of $41.0 million on October 9, 2020, as a result of the private placement of units at an issuance price of $16.50 per unit. The units consisted of an aggregate of approximately 2.5 million shares of Common Stock and warrants for the purchase of an additional 0.8 million shares of Common Stock. (2) Gives effect to the financial advisory fees of 6.0% of the gross proceeds and other estimated offering costs of approximately $0.9 million related to the Fiscal 2021 Financing. (3) Gives effect to the requirement discussed in Note 4 to repay the remaining obligations due to Xoma, since the Fiscal 2021 Financing met the definition of a qualified financing. Bonuses for Certain Officers and Employees On October 7, 2020, the Company's Board of Directors approved bonus payments for an aggregate of $0.5 million to certain officers and employees. The bonuses are expected to be paid in October 2020. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | Nature of Operations Rezolute, Inc. (the “Company”) is a clinical stage biopharmaceutical company incorporated in Delaware in 2010. |
Consolidation | Consolidation The Company has three wholly owned subsidiaries consisting of AntriaBio Delaware, Inc. ("Antria Delaware"), Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its three wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Reverse Stock Split In August 2019, the Company's Board of Directors approved a reverse stock split that was subject to stockholder approval at a special meeting that was concluded on October 28, 2019. Stockholders approved the proposal whereby the Board of Directors had the ability at any time on or before October 23, 2020 to execute a reverse stock split and set an exchange ratio between 20 and 100 shares of the Company's outstanding Common Stock, $0.001 par value per share, into one issued and outstanding share of Common Stock, without any change in the par value per share or the number of shares of Common Stock authorized. On October 7, 2020, the Board of Directors approved a one share for 50 shares reverse stock split of the Company's $0.001 par value Common Stock (the "Reverse Stock Split"), resulting in the filing with the Delaware Secretary of State of a Certificate of Amendment (the "Amendment") to the Company's Articles of Incorporation. The Amendment was effective on October 9, 2020. In connection with the Reverse Stock Split, proportionate adjustments were made to increase the per share exercise prices and decrease the number of shares of Common Stock issuable upon exercise of stock options and warrants whereby approximately the same aggregate price is required to be paid for such securities upon exercise as had been payable immediately preceding the Reverse Stock Split. In addition, any fractional shares that would otherwise be issued as a result of the Reverse Stock Split were rounded up to the nearest whole share. All references in the accompanying consolidated financial statements to the number of shares of Common Stock and per share amounts have been retroactively adjusted to give effect to the Reverse Stock Split. |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain amounts in the previously issued comparative financial statements for fiscal 2019 have been reclassified to conform to the current fiscal 2020 financial statement presentation. These reclassifications had no effect on the previously reported net loss, working capital, cash flows and stockholders’ equity. Comprehensive income (loss) is defined as net income (loss) plus other comprehensive income (loss). Other comprehensive income (loss) is comprised of revenues, expenses, gains, and losses that under GAAP are reported as separate components of stockholders’ equity instead of net income (loss). For the fiscal years ended June 30, 2020 and 2019, the only component of comprehensive loss was the Company’s net loss. The Company’s Chief Executive Officer also serves as the Company’s chief operating decision maker (the “CODM”) for purposes of allocating resources and assessing performance based on financial information of the Company. Since its inception, the Company has determined that its activities as a clinical stage biopharmaceutical company are classified as a single reportable operating segment. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, fair value of share-based payments and warrants, management’s assessment of going concern, clinical trial accrued liabilities, estimates of the probability and potential magnitude of contingent liabilities, and the valuation allowance for deferred tax assets due to continuing and expected future operating losses. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company's operations may be subject to significant risks and uncertainties including financial, operational, regulatory and other risks associated with a clinical stage company, including the potential risk of business failure as discussed further in Note 2, and the future impact of COVID-19 as discussed in Note 9. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments purchased with an original maturity of three months or less that are freely available for the Company’s immediate and general business use are classified as cash and cash equivalents. Cash and cash equivalents consist primarily of demand deposits with financial institutions. |
Leases | Leases The Company determines if an arrangement includes a lease as of the date an agreement is entered into. Operating leases are included in right-of-use ("ROU") assets and operating lease liabilities in the Company's Consolidated Balance Sheets. ROU assets and operating lease liabilities are initially recognized based on the present value of the future minimum lease payments at the commencement date of the lease. The Company generally uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. The Company's leases may include options to extend or terminate the lease; these options are included in the calculation of ROU assets and operating lease liabilities when it is reasonably certain that the Company will exercise the options. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to apply the recognition requirements for short-term leases. For lease agreements with lease and non-lease components, the Company generally accounts for them separately. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost less accumulated depreciation of approximately $14,000 as of June 30, 2020 and $3,000 as of June 30, 2019. Maintenance and repairs are expensed as incurred. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the assets which range from 3 to 5 years. Depreciation expense commences when assets are initially placed into service for their intended use. Depreciation expense related to property and equipment amounted to approximately $11,000 and $41,000 for the fiscal years ended June 30, 2020 and 2019, respectively. |
Intangible Assets | Intangible Assets Intangible assets consist of patents that were recorded at the estimated acquisition date fair value. Such costs were being amortized over 11 years which was the life of the patents at the time they were acquired. Amortization expense related to intangible assets amounted to approximately $7,000 for each of the fiscal years ended June 30, 2020 and 2019. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists for office furniture and equipment and patents if the carrying amounts of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets. An impairment charge is recognized for the amount by which the carrying amount of the asset, or asset group, exceeds its fair value.In June 2020, the Company determine that indicators of impairment existed for the patents and recognized a charge of approximately $23,000 for the remaining net carrying value of the patents. |
Debt Discounts and Issuance Costs | Debt Discounts and Issuance Costs Debt discounts and issuance costs (“DDIC”) incurred to obtain new debt financing or modify existing debt financing consist of incremental direct costs incurred for professional fees and due diligence services. If convertible notes are issued in conjunction with warrants, the Company allocates the proceeds to each component using a relative fair value. DDIC are presented in the accompanying consolidated balance sheets as a reduction in the carrying value of the debt and are accreted to interest expense using the effective interest method. When debt arrangements are amended, the revised terms are evaluated to determine if the amendment should be accounted for as a troubled debt restructuring, a modification or an extinguishment. If the Company determines that the lender has provided a concession and the Company is experiencing financial difficulties, treatment as a troubled debt restructuring would be required where a gain would generally be recognized. If the Company concludes that accounting as a modification is required, then any costs incurred on behalf of the lenders are accounted for as additional DDIC. If the Company concludes that accounting as an extinguishment is required, an extinguishment charge is measured on the date of the amendment based on the amount by which the fair value of the new debt instrument exceeds the net carrying value of the original debt instrument. |
Beneficial Conversion Features | Beneficial Conversion Features A beneficial conversion feature (“BCF”) is a non-detachable conversion feature that is “in the money” at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is in the money if the effective conversion price is lower than the commitment date fair value of a share into which it is convertible. A contingent BCF feature is measured using the commitment date security price but is not recognized in earnings until the contingency is resolved. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Intangible assets for in-licensing costs incurred under license agreements with third parties are charged to expense, unless the licensing rights have separate economic value in alternative future research and development projects or otherwise. |
Clinical Trial Accruals | Clinical Trial Accruals Clinical trial costs are a component of research and development expenses. The Company accrues and expenses clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with clinical research organizations and clinical trial sites. The Company determines the estimates through discussions with internal clinical personnel and external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. Nonrefundable advance payments for goods and services that will be used or rendered in future research and development activities, are deferred and recognized as expense in the period that the related goods are delivered, or services are performed. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the fair value of employee and director services received in exchange for all equity awards granted, including stock options, based on the fair market value of the award as of the grant date. The Company computes the fair value of stock options using the Black-Scholes-Merton (“BSM”) option pricing model and recognizes the cost of the equity awards over the period that services are provided to earn the award, usually the vesting period. For awards granted which contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized as an expense on a straight-line basis over the requisite service period as if the award was, in substance, a single award. The Company recognizes the impact of forfeitures in the period that the forfeiture occurs, rather than estimating the number of awards that are not expected to vest in accounting for stock-based compensation. The Company has granted stock options with vesting that is dependent on achieving certain market, performance and service conditions ("Hybrid Options"). For purposes of recognizing compensation cost, the Company determines the requisite service period as the longest of the derived, implicit and explicit vesting periods for each of the market, performance and service conditions, respectively. Compensation cost will be recognized beginning on such date that achievement of the performance condition is considered probable and continuing through the end of the requisite service period. Determination of the requisite service period of the Hybrid Options will be based on the date that the performance condition is considered probable. Unrecognized compensation cost for the Hybrid Options, calculated using the Black- Scholes-Merton ("BSM") pricing model, will be recognized beginning on the date that the performance condition is considered probable using the grant date fair value. If the Hybrid Options do not ultimately become exercisable as a result of failure to achieve the requisite service period, any previously recognized compensation cost will be reversed. |
Derivatives | Derivatives When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument and cannot be classified in stockholders’ equity, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded separately from the carrying value of the host contract, with subsequent changes in the estimated fair value recorded as a non-operating gain or loss in the Company’s consolidated statements of operations. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred income tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred income tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Company recognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the period in which such change occurs. Interest and penalties related to income taxes are recognized in the provision for income taxes. |
Loss Per Common Share | Loss Per Common Share Basic net loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding for each period presented. Net loss applicable to common stockholders is further adjusted to deduct BCFs that arise from deemed dividends as discussed above. Diluted net loss per common share is computed by giving effect to all potential shares of Common Stock, including stock options and warrants, to the extent dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Standards. The following accounting standards were adopted during the fiscal year ended June 30, 2020: In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires the Company to recognize right-of-use assets and operating lease liabilities on the balance sheet, and also disclose key information about leasing arrangements. On July 1, 2019, the Company adopted this new standard using the modified retrospective approach in accordance with ASU No. 2018-11, Leases - Targeted Improvements . The Company elected the package of practical expedients permitted under the transition guidance within ASU No. 2018-11, which among other things, allowed the Company to carry forward the historical lease classification of those leases in place as of July 1, 2019. The impact of adoption resulted in the recognition of right-of- use assets and operating lease liabilities for the discounted present value of the future lease payments on leases that were in effect on July 1, 2019, as follows (in thousands): Right-of-use assets recorded under new standard $ 605 Operating lease liabilities recorded under new standard: Current $ 227 Long-term 406 Total 633 Eliminate previously existing deferred rent liability (28) Net increase in liabilities due to adoption of new standard $ 605 Please refer to Note 3 for further information about the right-of-use assets and operating lease liabilities recognized under this standard. Due to the Company’s election to adopt this standard effective July 1, 2019, rent expense was recognized under the accounting standard that was previously in effect for all periods prior to July 1, 2019. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. The new standard does not apply to warrants issued to a lender or investor in a financing transaction. The Company adopted ASU 2018-07 effective July 1, 2019. Prior to the adoption of ASU 2018-07, the Company accounted for stock options and warrants granted to non-employees based on the fair value of the goods and services, or the equity instrument, whichever could be measured more reliably. If fair value of the equity instrument was more reliably determined, fair value of the equity instrument was required to be re-measured until the performance commitment date was achieved, which resulted in the recognition of subsequent changes in fair value. Under the new standard, the fair value of the goods and services acquired from non-employees is solely determined using the fair value of the equity instruments issued and measurement of fair value is fixed on the grant date. The Company also made an accounting policy election to recognize the impact of forfeitures of non-employee awards in the period that the forfeiture occurs. The impact of adopting this standard was immaterial to the Company’s consolidated financial statements. Standard Required to be Adopted in Future Years. The following accounting standard is not yet effective; management has not completed its evaluation to determine the impact that adoption of this standard will have on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the guidance on the impairment of financial instruments. This update adds an impairment model (known as the current expected credit losses model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes, as an allowance, its estimate of expected credit losses. In November 2019, ASU 2016-13 was amended by ASU 2019-10, Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) whereby the effective date for ASU 2016-13 for smaller reporting companies is now required for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect the adoption of this accounting guidance will have a material impact on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of impact of adoption reflected in Consolidated financial statements | Right-of-use assets recorded under new standard $ 605 Operating lease liabilities recorded under new standard: Current $ 227 Long-term 406 Total 633 Eliminate previously existing deferred rent liability (28) Net increase in liabilities due to adoption of new standard $ 605 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
LEASES | |
Schedule of lessee operating lease assets and liabilities | As of June 30, 2020 and on the adoption date of July 1, 2019, the carrying value of ROU assets and operating lease liabilities were as follows (in thousands): June 30, July 1, 2020 2019 Right-of-Use Assets, net $ 383 $ 605 Operating Lease Liabilities: Current $ 245 $ 227 Long-term 165 406 Total $ 410 $ 633 |
Lessee operating lease liability maturity | Future payments under operating lease agreements as of June 30, 2020 are as follows (in thousands): Fiscal year ending June 30, 2021 $ 272 2022 170 Total lease payments 442 Less imputed interest (32) Present value of operating lease liabilities $ 410 |
LICENSE AGREEMENTS (Tables)
LICENSE AGREEMENTS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
LICENSE AGREEMENTS | |
Summary of the amounts payable under the amended License Agreement along with cash payments made. | summary of cash payments under the amended License Agreement, and the impact of Amendment No. 3 on the remaining payment obligations as of June 30, 2020 (in thousands): Balance Balance June 30, Cash Payments Amendment June 30, Scheduled Payment Date 2019 Early Scheduled No. 3 2020 September 30, 2019 $ 1,500 $ — $ (1,500) $ — $ — December 31, 2019 1,000 — (1,000) — — March 31, 2020 2,000 — (400) (1,600) — June 30, 2020 2,000 (1,391) (400) (209) — September 30, 2020 2,000 (2,000) — 400 400 December 31, 2020 — — — 400 400 March 31, 2021 — — — 400 400 June 30, 2021 — — — 400 400 September 30, 2021 — — — 209 209 Total 8,500 $ (3,391) $ (3,300) $ — 1,809 Less long-term portion of payable (2,000) (209) Current portion of payable $ 6,500 $ 1,600 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
CONVERTIBLE NOTES PAYABLE | |
Summary of aggregate principal and accrued interest of converted to Series AA Preferred Stock | The closing of the Series AA Financing resulted in the conversion of the Fiscal 2018 Notes whereby the contingent BCF was measured and recognized on January 30, 2019 as shown below (in thousands). Debt as of January 30, 2019 Debt Converted to Series Series AA Preferred Stock Beneficial Original Accrued AA Preferred Stock Converted to Common Stock Conversion Date of Borrowing Principal Interest Total Shares Fair Value Shares Fair Value Feature January 2018 $ 500 $ 95 $ 595 74 $ 744 (1) 68 $ 811 (2) $ 216 (3) February 2018 700 102 802 100 1,002 (1) 91 1,094 (2) 292 (3) April 2018 4,140 603 4,743 594 5,929 (1) 539 6,468 (2) 1,725 (3) Total $ 5,340 $ 800 $ 6,140 768 $ 7,675 (1) 698 $ 8,373 (2) $ 2,233 (3) (1) Fair value was based on the $10.00 per share issuance price for Series AA Preferred Stock as discussed in Note 6. (2) The shares of Series AA Preferred Stock were immediately convertible to shares of Common Stock at a price of $11.00 per share. Fair value was based on the closing price of the Company’s Common Stock of $12.00 per share on January 30, 2019. (3) The beneficial conversion feature represents the difference between the fair value of the share of Common Stock and the total debt balance as of January 30, 2019. |
Schedule of interest expense | Presented below is a summary of the components of interest expense related to Fiscal 2018 Notes for the fiscal year ended June 30, 2019 (in thousands): Interest expense at contractual rate $ 672 Accretion of discount 2,053 Beneficial conversion feature for Fiscal 2018 Notes 2,233 Total interest expense $ 4,958 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
STOCKHOLDERS' EQUITY | |
Summary of the liquidation preference and conversion terms | Series AA Preferred Stock Common Stock Conversion Number Conversion Value Price Per Number of Holders of Shares Per Share Amount Share Shares H&G 2,500 $ 10.00 $ 25,000 $ 11.00 2,273 Fiscal 2018 Note holders 768 10.00 7,675 11.00 698 Total 3,268 $ 32,675 2,971 |
STOCK-BASED COMPENSATION AND _2
STOCK-BASED COMPENSATION AND WARRANTS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
STOCK-BASED COMPENSATION AND WARRANTS | |
Schedule of the number of shares authorized, outstanding, and available for future grants under stock option | Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans (in thousands): Termination Number of Shares Description Date Authorized Outstanding Available 2014 Plan March 2019 44 44 — 2015 Plan February 2020 95 95 — 2016 Plan October 2021 560 524 36 2019 Plan July 2029 300 300 — Total 999 963 36 |
Schedule of options granted to executive officers and other employees | As of July 31, 2019, the number of shares subject to stock options, the related fair value and compensation that was immediately recognized for options that immediately vested are as follows (in thousands): Time-Based Vesting Unvested Number of Shares Hybrid Vested Unvested Options Total Executive officers 72 (1) 231 (1) 151 (2) 454 Other employees 18 (1) 133 (1) 74 (2) 225 Total 90 364 225 (5) 679 Total fair value $ 817 (3) $ 3,297 (4) (1) Stock options that are subject to time-based vesting become exercisable (i) for employees who were employed by the Company for more than one year as of the grant date, 25% of such options were immediately exercisable, and for employees that were employed by the Company for less than one year as of the grant date, 25% of such options will vest on the one year anniversary of the employee's hire date, and (ii) the remaining 75% of the stock options will vest ratably over a period of 36 months beginning on the vesting date for the initial 25% tranche. (2) Stock options that commence vesting upon the achievement of market, performance and service conditions (‘Hybrid Options”) will vest ratably over a period of 36 months beginning on the date that all of the following have occurred: (i) the option recipient has been employed by the Company for at least one year, (ii) the Company’s shares of Common Stock have been listed for trading on a national stock exchange, and (iii) such date no later than July 31, 2023, when the Company’s closing stock price exceeds $29.00 per share for 20 trading days in any consecutive 30 day period. (3) Represents the aggregate grant date fair value for stock options that were immediately vested on the grant date, which is included in stock-based compensation expense for the year ended June 30, 2020. (4) Represents the aggregate grant date fair value for stock options that were not immediately vested on the grant date and are being charged to expense from the grant date through the respective vesting dates through July 2023. (5) The Company has not recognized any expense related to these stock options for the year ended June 30, 2020, since it is not yet probable that the performance condition will be achieved. The Company will begin recognizing compensation expense at such time that the performance condition is probable and continuing through the end of the requisite service period. Determination of the requisite service period for the Hybrid Options will be calculated on the date that the performance condition is considered probable using grant date fair value. |
Schedule of summary of combined stock option activity | The following table sets forth a summary of the combined stock option activity under all of the Company’s stock option plans for the years ended June 30, 2020 and 2019 (shares in thousands): 2020 2019 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 277 $ 79.88 388 $ 77.50 7.8 Stock options granted: Awards with time-based vesting 497 14.50 23 26.00 Awards with performance-based vesting 225 14.50 — — Stock options forfeited: Awards with time-based vesting (25) 24.39 (134) 76.50 Awards with performance-based vesting (11) 14.50 — — Outstanding, end of fiscal year 963 33.06 277 79.88 6.4 Vested, end of fiscal year 431 53.14 192 92.50 5.7 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. |
Schedule of the fair value of stock options was estimated on the date of grant using the BSM option-pricing model using following weighted-average assumptions | 2020 2019 Time-Based Hybrid Time-Based Market price of common stock on grant date $ 10.23 $ $ 26.00 Expected volatility 118 % 118 % 84 % Risk free interest rate 1.9 % 2.0 % 2.8 % Expected term (years) 5.7 8.0 7.0 Dividend yield 0 % 0 % 0 % |
Schedule of Stock-based compensation expense | Stock-based compensation expense for the fiscal years ended June 30, 2020 and 2019 is included in compensation and benefits under the following captions in the consolidated statements of operations (in thousands): 2020 2019 Research and development $ 1,589 $ 538 General and administrative 1,728 2,098 Total $ 3,317 $ 2,636 |
Schedule of warrant activity | Presented below is a summary of grants, modifications and expirations for the fiscal years ended June 30, 2020 and 2019 (shares in thousands): 2020 2019 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 920 $ 66.80 913 $ 68.29 3.4 Warrants issued for consulting services 14 (3) 14.50 — — Modification for debt discount to former member of Board of Directors: Replacement warrant — — 24 (4) 9.00 Canceled warrant — — (10) (4) 25.94 Warrant expirations (316) 82.78 (7) 120.27 Outstanding, end of fiscal year 618 57.46 2.3 920 66.80 3.4 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire. (3) Represents warrants granted for consulting services in November 2019 with an expiration date in November 2024. The fair value of the warrants of $67,000 was determined using the BSM model. Since the warrants were immediately vested, this entire amount is included in consulting and outside services under research and development expenses for the year ended June 30, 2020. Key assumptions for the valuation of these warrants included the closing price of the Company’s shares of Common Stock of $14.50 on the grant date, the exercise price of $6.50 per share, historical volatility of 119%, and an expected term of 5.0 years. In January 2019, the Company agreed to modify a warrant originally issued in June 2018 for 10,000 shares that was exercisable at $25.94 per share. This warrant was originally issued in connection with one of the Fiscal 2018 Notes issued to a former member of the Board of Directors. The difference between the fair value of the modified warrant and the fair value of the canceled warrant amounted to $138,000, which was accounted for as an additional debt discount that was charged to interest expense upon repayment of the Fiscal 2018 Notes on January 30, 2019. Key assumptions for valuation of the modified warrant and the canceled warrant included the fair value of Company's Common Stock on the modification date of $11.50 per share, expected volatility of 100%, a risk-free interest rate of 2.5%, and an estimated remaining term of 4.0 years. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
INCOME TAXES | |
Schedule of effective income tax rate reconciliation | For the fiscal years ended June 30, 2020 and 2019, the reconciliation between the income tax benefit computed by applying the statutory U.S. federal income tax rate to the pre-tax loss before income taxes, and total income tax expense recognized in the financial statements is as follows (in thousands): 2020 2019 Income tax benefit at statutory U.S. federal rate $ 4,270 $ 6,394 Income tax benefit attributable to U.S. states 1,420 1,876 Non-deductible expenses (12) (1,045) Stock option expirations (52) (1,484) Other 392 (328) Change in valuation allowance (6,018) (5,413) Total income tax expense $ — $ — |
Schedule of deferred tax assets and liabilities | As of June 30, 2020 and 2019, the income tax effects of temporary differences that give rise to significant deferred income tax assets and liabilities are as follows (in thousands): 2020 2019 Deferred income tax assets: Net operating loss carryforwards $ 21,651 (1) $ 20,016 Intangible assets 5,182 (1) — Stock-based compensation 4,592 3,716 Start-up and organizational expenses 203 338 Accrued expenses and other 47 1,598 Total deferred income tax assets 31,675 25,668 Valuation allowance for deferred income tax assets (31,674) (25,656) Net deferred income tax assets 1 12 Deferred income tax liability- property, equipment and other (1) (12) Net deferred income tax assets $ — $ — (1) Amounts include the impact of giving effect to the reclassification of approximately $4.1 million from net operating loss carryforwards to intangible assets due to license fees that were incorrectly expensed for income tax purposes in previous fiscal years. During the fiscal year ended June 30, 2020, the Company’s income tax returns were corrected whereby these license costs were capitalized and are being amortized over 15 years for income tax purposes. Due to the valuation allowance for deferred income tax assets in previous years, this reclassification did not have any impact on the Company’s previously reported net losses or accumulated deficit. |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
Schedule of interest and other income | Interest and other income consist of the following for the years ended June 30, 2020 and 2019 (in thousands): 2020 2019 Interest income $ 188 $ 61 Gain on lease termination — 168 Gain from change in fair value of embedded derivatives — 74 Rental income — 153 Total $ 188 $ 456 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
NET LOSS PER SHARE | |
Schedule of Net loss per share | 2020 2019 Net loss $ (20,333) $ (30,446) Beneficial conversion feature — (2,273) Net loss attributable to common stockholders $ (20,333) $ (32,719) |
Schedule of diluted net loss impact of inclusion anti dilutive | 2020 2019 Stock options 963 277 Warrants 618 920 Total 1,581 1,197 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
SUBSEQUENT EVENTS | |
Schedule of unaudited pro forma balance sheet that gives effect to the Financing Activities, Restricted Funds and Early Payments | Presented below is an unaudited pro forma balance sheet that gives effect to the Fiscal 2021 Financing and the Early Payments to Xoma, as if these events had occurred on June 30, 2020 (in thousands, except per share amount): Equity Financing Xoma Gross Offering Early Historical Proceeds (1) Costs (2) Payments (3) Pro Forma (Unaudited) Assets Current assets: Cash and cash equivalents $ 9,955 $ 41,000 $ (3,420) $ (1,809) $ 45,726 Other current assets 563 — — — 563 Total current assets 10,518 41,000 (3,420) (1,809) 46,289 Non-current assets: Right-of-use assets, net 383 — — — 383 Other 64 — — — 64 Total assets $ 10,965 $ 41,000 $ (3,420) $ (1,809) $ 46,736 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 893 $ — $ — $ — $ 893 Accrued liabilities 488 — — — 488 Current portion of license fees payable to Xoma 1,600 — — (1,600) — Current portion of operating lease liabilities 245 — — — 245 Total current liabilities 3,226 — — (1,600) 1,626 Non-current liabilities: License fees payable to Xoma, net of current portion 209 — — (209) — Operating lease liabilities, net of current portion 165 — — — 165 Total liabilities 3,600 — — (1,809) 1,791 Stockholders' equity: Common stock, $0.001 par value, 500,000 shares authorized; see below for outstanding shares 6 2 — — 8 Additional paid-in capital 154,595 40,998 (3,420) — 192,173 Accumulated deficit (147,236) — — — (147,236) Total stockholders' equity 7,365 41,000 (3,420) — 44,945 Total liabilities and stockholders' equity $ 10,965 $ 41,000 $ (3,420) $ (1,809) $ 46,736 Number of shares of Common Stock outstanding 5,867 2,485 — — 8,352 (1) Gives effect to the receipt of gross proceeds of $41.0 million on October 9, 2020, as a result of the private placement of units at an issuance price of $16.50 per unit. The units consisted of an aggregate of approximately 2.5 million shares of Common Stock and warrants for the purchase of an additional 0.8 million shares of Common Stock. (2) Gives effect to the financial advisory fees of 6.0% of the gross proceeds and other estimated offering costs of approximately $0.9 million related to the Fiscal 2021 Financing. (3) Gives effect to the requirement discussed in Note 4 to repay the remaining obligations due to Xoma, since the Fiscal 2021 Financing met the definition of a qualified financing. Bonuses for Certain Officers and Employees On October 7, 2020, the Company's Board of Directors approved bonus payments for an aggregate of $0.5 million to certain officers and employees. The bonuses are expected to be paid in October 2020. |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impact of adoption (Details) - USD ($) | Jun. 30, 2020 | Jul. 01, 2019 | Jun. 30, 2019 |
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Right-of-use assets recorded under new standard | $ 383,000 | $ 605,000 | $ 0 |
Current | 245,000 | 227,000 | 0 |
Long-term | 165,000 | 406,000 | $ 0 |
Total | 410,000 | 633,000 | |
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Right-of-use assets recorded under new standard | 600,000 | 605,000 | |
Current | 227,000 | ||
Long-term | 406,000 | ||
Total | $ 600,000 | 633,000 | |
Eliminate previously existing deferred rent liability | (28,000) | ||
Net increase in liabilities due to adoption of new standard | $ 605,000 |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ / shares in Units, shares in Thousands | Oct. 07, 2020$ / shares | Aug. 31, 2019$ / sharesshares | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($)$ / shares |
Amortization expense related to intangible assets | $ | $ 7,000 | $ 7,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Reverse stock split ratio | 50 | |||
Impairment of Intangible Assets, Finite-lived | $ | $ 23,000 | |||
Minimum | ||||
Stock issued during period shares reverse stock splits | shares | 20 | |||
Maximum | ||||
Stock issued during period shares reverse stock splits | shares | 100 | |||
Patents [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 11 years |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipments (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 11,000 | $ 41,000 |
Property and equipment recorded at accumulated depreciation | $ 14,000 | $ 3,000 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives of the assets | P3Y | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives of the assets | P5Y |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) $ in Thousands, shares in Millions | Oct. 09, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Net loss | $ (20,333) | $ (30,446) | ||
Net cash used in operating activities | (24,168) | (15,304) | ||
Accumulated deficit | (147,236) | (126,903) | ||
Cash, cash equivalents and restricted cash | 9,955 | 11,573 | $ 1,646 | |
Liabilities | $ 3,600 | $ 10,500 | ||
Subsequent Event | ||||
Net proceeds from private placement | $ 37,600 | |||
Gross proceeds from private placement of equity shares | $ 41,000 | |||
Number of shares issued | 2.5 | |||
Warrants | Subsequent Event | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 0.8 |
LEASES (Details)
LEASES (Details) | Jul. 01, 2019USD ($) | Feb. 07, 2019USD ($) | Jan. 25, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Property, Plant and Equipment [Line Items] | |||||
Number of leases | 2 | ||||
Monthly operating lease rent | $ 2,700,000 | $ 21,000,000 | |||
Right-of-use assets, net | $ 605,000 | $ 383,000 | $ 0 | ||
Operating lease liability | $ 633,000 | 410,000 | |||
Operating lease cost | 300,000 | ||||
Lease and rental expense | 400,000 | ||||
Lessee operating lease discount rate | 10.00% | ||||
Lessee operating lease assumptions and judgments discount rate description | P3Y | ||||
Research and Development Expense | |||||
Property, Plant and Equipment [Line Items] | |||||
Operating lease cost | 200,000 | ||||
Lease and rental expense | 300,000 | ||||
General and Administrative Expense | |||||
Property, Plant and Equipment [Line Items] | |||||
Operating lease cost | 100,000 | ||||
Lease and rental expense | $ 100,000 | ||||
Accounting Standards Update 2016-02 [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Right-of-use assets, net | $ 605,000 | 600,000 | |||
Operating lease liability | $ 633,000 | $ 600,000 |
LEASES - Balance Sheet Presenta
LEASES - Balance Sheet Presentation (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jul. 01, 2019 | Jun. 30, 2019 | |
LEASES | |||
Right-of-use assets, net | $ 383,000 | $ 605,000 | $ 0 |
Current | 245,000 | 227,000 | 0 |
Long-term | 165,000 | 406,000 | $ 0 |
Total | $ 410,000 | $ 633,000 | |
Operating lease weighted average remaining lease term1 | 1 year 7 months 6 days | ||
Operating lease weighted average discount rate percent | 10.00% | ||
Operating lease payments | $ 300,000 |
LEASES - Future Lease Payments
LEASES - Future Lease Payments (Details) - USD ($) | Jun. 30, 2020 | Jul. 01, 2019 |
LEASES | ||
2021 | $ 272,000 | |
2022 | 170,000 | |
Total lease payments | 442,000 | |
Less imputed interest | (32,000) | |
Present value of operating lease liabilities | $ 410,000 | $ 633,000 |
LEASES - Restructuring Activity
LEASES - Restructuring Activity (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
LEASES | |||
Operating lease impairment loss | $ 33,000 | ||
Gain loss on sale of properties | $ 12,000 | ||
Gain loss on termination of lease | $ 168 | $ 200 |
LICENSE AGREEMENTS - (Details)
LICENSE AGREEMENTS - (Details) - USD ($) $ in Thousands | Oct. 09, 2020 | Jan. 07, 2019 | Mar. 30, 2018 | Oct. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Aug. 31, 2019 | Jan. 31, 2019 |
License Agreements | |||||||||
Stock Issued During Period, Value, Issued for Services | $ 2,600 | $ 12 | |||||||
Liabilities | $ 3,600 | $ 10,500 | |||||||
Early payments obligation | $ 3,400 | ||||||||
2019 Closing Of Purchase Agreement [Member] | |||||||||
License Agreements | |||||||||
Stock Issued During Period, Value, Issued for Services | $ 20,000 | ||||||||
Subsequent Event | |||||||||
License Agreements | |||||||||
Gross proceeds from private placement of equity shares | $ 41,000 | ||||||||
Subsequent Event | Xoma | |||||||||
License Agreements | |||||||||
Gross proceeds from private placement of equity shares | $ 20,000 | $ 41,000 | |||||||
License agreement | |||||||||
License Agreements | |||||||||
Liabilities | $ 8,500 | ||||||||
Cash | $ 8,500 | ||||||||
Early payments obligation | $ 3,400 | ||||||||
License agreement | Xoma | |||||||||
License Agreements | |||||||||
Stock Issued During Period, Shares, Other | 162,000 | ||||||||
License costs | Xoma | |||||||||
License Agreements | |||||||||
Payment of license | $ 8,500 |
LICENSE AGREEMENTS - Remaining
LICENSE AGREEMENTS - Remaining payment obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash activity | ||
Early Payments | $ (3,391) | |
Scheduled Payments | (3,300) | |
Total license fee payable | 1,809 | $ 8,500 |
Less long term portion of payable | (209) | (2,000) |
Current portion of payable | 1,600 | 6,500 |
Amendment No.3 | ||
Cash activity | ||
Total license fee payable | 0 | |
September 30, 2019 | ||
Cash activity | ||
Early Payments | 0 | |
Scheduled Payments | (1,500) | |
Total license fee payable | 0 | 1,500 |
September 30, 2019 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | 0 | |
December 31, 2019 | ||
Cash activity | ||
Early Payments | 0 | |
Scheduled Payments | (1,000) | |
Total license fee payable | 0 | 1,000 |
December 31, 2019 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | 0 | |
March 31, 2020 | ||
Cash activity | ||
Early Payments | 0 | |
Scheduled Payments | (400) | |
Total license fee payable | 0 | 2,000 |
March 31, 2020 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | (1,600) | |
June 30, 2020 | ||
Cash activity | ||
Early Payments | (1,391) | |
Scheduled Payments | (400) | |
Total license fee payable | 0 | 2,000 |
June 30, 2020 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | (209) | |
September 30, 2020 | ||
Cash activity | ||
Early Payments | (2,000) | |
Scheduled Payments | 0 | |
Total license fee payable | 400 | 2,000 |
September 30, 2020 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | 400 | |
December 31, 2020 | ||
Cash activity | ||
Early Payments | 0 | |
Scheduled Payments | 0 | |
Total license fee payable | 400 | |
December 31, 2020 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | 400 | |
March 31, 2021 | ||
Cash activity | ||
Early Payments | 0 | |
Scheduled Payments | 0 | |
Total license fee payable | 400 | 0 |
March 31, 2021 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | 400 | |
June 30, 2021 | ||
Cash activity | ||
Early Payments | 0 | |
Scheduled Payments | 0 | |
Total license fee payable | 400 | 0 |
June 30, 2021 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | 400 | |
September 30, 2021 | ||
Cash activity | ||
Early Payments | 0 | |
Scheduled Payments | 0 | |
Total license fee payable | 209 | $ 0 |
September 30, 2021 | Amendment No.3 | ||
Cash activity | ||
Total license fee payable | $ 209 |
LICENSE AGREEMENTS - Additional
LICENSE AGREEMENTS - Additional Information - (Detail) - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended |
Aug. 31, 2019 | Jun. 30, 2020 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Qualified Financing Future Cash Payments, Early Payments Obligation | $ 3.4 | |
License agreement | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Proceeds from Issuance of Private Placement, Net of Advisory Fees Payable | $ 22.6 | |
Qualified Financing Future Cash Payments, Early Payments Obligation | $ 3.4 | |
ActiveSite Pharmaceuticals, Inc. [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Maximum Amount of Milestone Events | 46.5 | |
First milestone payment due after completion of the preclinical work | $ 1 | |
Royalties percentage | 2.00% | |
Minimum | ActiveSite Pharmaceuticals, Inc. [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Milestone Payments | $ 1 | |
Maximum | ActiveSite Pharmaceuticals, Inc. [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Milestone Payments | $ 10 | |
Xoma | License agreement | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Stock Issued During Period, Shares, Other | 162,000 | |
Put Option [Member] | Xoma | License agreement | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Description Of Option Indexed To Issuers Equity Shares | Xoma may exercise the Put Option for up to a total of 50,000 shares of Common Stock for the calendar year ending December 31, 2020, and up to an additional 50,000 shares thereafter |
CONVERTIBLE NOTES PAYABLE - Add
CONVERTIBLE NOTES PAYABLE - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 01, 2019 | Jan. 30, 2019 | Jun. 30, 2020 |
Convertible Notes Payable [Line Items] | |||
Debt Instrument, Periodic Payment, Principal | $ 5,340 | ||
Closing price of common stock (in dollars per share) | $ 14.50 | ||
Minimum | |||
Convertible Notes Payable [Line Items] | |||
Equity financing amount | $ 15,000 | ||
Series AA Preferred Stock | |||
Convertible Notes Payable [Line Items] | |||
Closing price of common stock (in dollars per share) | $ 0 | ||
Convertible Notes Payable [Member] | |||
Convertible Notes Payable [Line Items] | |||
Debt Instrument, Periodic Payment, Principal | $ 5,300 | ||
Convertible Notes Payable [Member] | Series A Preferred Stock [Member] | |||
Convertible Notes Payable [Line Items] | |||
Discount Rate On Per Share Price | 20.00% | ||
Convertible Debt [Member] | |||
Convertible Notes Payable [Line Items] | |||
Contractual interest rate (as a percent) | 15.00% | ||
Closing price of common stock (in dollars per share) | $ 12 | ||
Convertible Debt [Member] | Series AA Preferred Stock | |||
Convertible Notes Payable [Line Items] | |||
Issuance price (in dollars per share) | 10 | ||
Conversion price (in dollars per share) | $ 11 |
CONVERTIBLE NOTES PAYABLE - Agg
CONVERTIBLE NOTES PAYABLE - Aggregate principal and accrued interest (Details) shares in Thousands, $ in Thousands | 12 Months Ended |
Jun. 30, 2020USD ($)shares | |
Principal | $ 5,340 |
Accrued interest | 800 |
Total | 6,140 |
Beneficial conversion feature | $ 2,233 |
Common Stock | |
Debt Conversion (in shares) | shares | 698 |
Debt Conversion | $ 8,373 |
Series A Preferred Stock [Member] | |
Debt Conversion (in shares) | shares | 768 |
Debt Conversion | $ 7,675 |
Convertible Notes Due January 2018 | |
Principal | 500 |
Accrued interest | 95 |
Total | 595 |
Beneficial conversion feature | $ 216 |
Convertible Notes Due January 2018 | Common Stock | |
Debt Conversion (in shares) | shares | 68 |
Debt Conversion | $ 811 |
Convertible Notes Due January 2018 | Series A Preferred Stock [Member] | |
Debt Conversion (in shares) | shares | 74 |
Debt Conversion | $ 744 |
Convertible Notes Due February 2018 | |
Principal | 700 |
Accrued interest | 102 |
Total | 802 |
Beneficial conversion feature | $ 292 |
Convertible Notes Due February 2018 | Common Stock | |
Debt Conversion (in shares) | shares | 91 |
Debt Conversion | $ 1,094 |
Convertible Notes Due February 2018 | Series A Preferred Stock [Member] | |
Debt Conversion (in shares) | shares | 100 |
Debt Conversion | $ 1,002 |
Convertible Notes Due April 2018 | |
Principal | 4,140 |
Accrued interest | 603 |
Total | 4,743 |
Beneficial conversion feature | $ 1,725 |
Convertible Notes Due April 2018 | Common Stock | |
Debt Conversion (in shares) | shares | 539 |
Debt Conversion | $ 6,468 |
Convertible Notes Due April 2018 | Series A Preferred Stock [Member] | |
Debt Conversion (in shares) | shares | 594 |
Debt Conversion | $ 5,929 |
CONVERTIBLE NOTES PAYABLE - A_2
CONVERTIBLE NOTES PAYABLE - Aggregate principal and accrued interest of converted to Series AA Preferred Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Components of interest expense | ||
Interest expense at contractual rate | $ 672 | |
Accretion of discount | 2,053 | |
Beneficial conversion feature attributable to Fiscal 2018 Notes | $ 0 | 2,233 |
Total interest expense | $ 0 | $ 4,958 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2020 | Aug. 31, 2019 |
Class of Stock [Line Items] | ||
Share Price | $ 14.50 | |
Series AA Preferred Stock | ||
Class of Stock [Line Items] | ||
Number of Shares | 3,268 | |
Share Price | $ 0 | |
Total Issue Price | $ 32,675 | |
Conversion Price | $ 0 | |
Shares of Common Stock | 2,971 | |
Other Investors [Member] | ||
Class of Stock [Line Items] | ||
Share Price | $ 14.50 | |
Other Investors [Member] | Series AA Preferred Stock | ||
Class of Stock [Line Items] | ||
Number of Shares | 2,500 | |
Share Price | $ 10 | |
Total Issue Price | $ 25,000 | |
Conversion Price | $ 11 | |
Shares of Common Stock | 2,273 | |
Fiscal 2018 Notes holders | Series AA Preferred Stock | ||
Class of Stock [Line Items] | ||
Number of Shares | 768 | |
Share Price | $ 10 | |
Total Issue Price | $ 7,675 | |
Conversion Price | $ 11 | |
Shares of Common Stock | 698 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($) | Oct. 09, 2020 | Jul. 23, 2019 | Jul. 01, 2019 | Jun. 19, 2019 | Apr. 24, 2019 | Jan. 30, 2019 | Jan. 07, 2019 | Jul. 23, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Apr. 23, 2019 | Jan. 18, 2019 |
Class of Stock [Line Items] | |||||||||||||||
Par value | $ 0.001 | $ 0.001 | |||||||||||||
Designated shares | 20,000,000 | 20,000,000 | |||||||||||||
Unpaid principal and accrued interest automatically convert to class of securities issued in an equity financing | $ 0 | $ 5,340,000 | |||||||||||||
Interest expense | $ 672,000 | ||||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 200,000,000 | |||||||||||
Restricted cash balance | $ 0 | ||||||||||||||
Share Price | $ 14.50 | ||||||||||||||
Volume weighted average closing price of common stock | 75.00% | ||||||||||||||
Gross proceeds from issuance of common stock | $ 24,050,000 | $ 0 | |||||||||||||
Purchase of Common Stock | 20,000,000 | ||||||||||||||
Early payments obligation | 3,400,000 | ||||||||||||||
Payments of Stock Issuance Costs | 1,500,000 | 0 | |||||||||||||
Subsequent Event | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 2,500,000 | ||||||||||||||
Net proceeds from private placement | $ 37,600,000 | ||||||||||||||
Accumulated Deficit | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Value, New Issues | 0 | ||||||||||||||
Minimum | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Cash proceeds from equity offering | $ 15,000,000 | ||||||||||||||
Exclusivity Agreement | Fiscal 2018 Notes holders | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Unpaid principal and accrued interest automatically convert to class of securities issued in an equity financing | $ 6,100,000 | ||||||||||||||
Convertible notes, discount rate | 20.00% | ||||||||||||||
Interest expense | $ 2,200,000 | ||||||||||||||
Lincoln Park Purchase Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Value, New Issues | $ 10,000,000 | ||||||||||||||
Share Price | $ 20 | ||||||||||||||
Other Investors [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 279,000 | ||||||||||||||
Share Price | $ 14.50 | ||||||||||||||
Gross proceeds from issuance of common stock | $ 4,100,000 | ||||||||||||||
Other Investors [Member] | Maximum | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Value, New Issues | $ 10,000,000 | ||||||||||||||
Investor [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Cash proceeds from equity offering | $ 20,000,000 | $ 20,000,000 | $ 25,000,000 | ||||||||||||
Stock Issued During Period, Shares, New Issues | 1,400,000 | 1,400,000 | |||||||||||||
Stock Issued During Period, Value, New Issues | $ 20,000,000 | ||||||||||||||
Share Price | $ 14.50 | $ 14.50 | $ 14.50 | ||||||||||||
Percent of advisory fee payable | 6.00% | ||||||||||||||
Amount of advisory fee payable | $ 1,500,000 | ||||||||||||||
Percentage of ownership held in company | 62.00% | ||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Rescinded of the previous designation of shares | 15,000,000 | ||||||||||||||
Common Stock | Investor [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Converted shares issued | 2,300,000 | ||||||||||||||
Series AA Preferred Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Converted shares | 3,300,000 | ||||||||||||||
Converted shares issued | 3,000,000 | ||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 2,971 | ||||||||||||||
Share Price | $ 0 | ||||||||||||||
Series AA Preferred Stock | Fiscal 2018 Notes holders | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 698 | ||||||||||||||
Share Price | $ 10 | ||||||||||||||
Series AA Preferred Stock | Exclusivity Agreement | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Exclusivity payment receipt | $ 1,500,000 | ||||||||||||||
Designated shares | 5,000,000 | ||||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 25,000,000 | ||||||||||||||
Stock Issued During Period, Shares, New Issues | 2,500,000 | ||||||||||||||
Share Price | $ 10 | ||||||||||||||
Gross proceeds from issuance of common stock | $ 25,000,000 | ||||||||||||||
Gross proceeds from issuance of preferred shares | $ 25,000,000 | ||||||||||||||
Series AA Preferred Stock | Exclusivity Agreement | Fiscal 2018 Notes holders | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred shares converted | 800,000 | ||||||||||||||
Effective issuance price | $ 8 | ||||||||||||||
Series AA Preferred Stock | Other Investors [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 2,273 | ||||||||||||||
Share Price | $ 10 | ||||||||||||||
Series AA Preferred Stock | Investor [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Converted shares | 2,500,000 | ||||||||||||||
Share Price | 12 | ||||||||||||||
Series AA Preferred Stock | Investor [Member] | Exclusivity Agreement | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Purchase price | $ 11 | ||||||||||||||
Fair value of common stock | $ 2,300,000 | ||||||||||||||
Private Placement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 262,000 | ||||||||||||||
Gross proceeds from issuance of common stock | $ 3,800,000 | ||||||||||||||
Private Placement [Member] | Other Investors [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Net proceeds from private placement | $ 22,600,000 |
STOCK-BASED COMPENSATION AND _3
STOCK-BASED COMPENSATION AND WARRANTS - Stock option plans (Details) - shares shares in Thousands | Jun. 30, 2020 | Jul. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 999 | 679 | ||
Number of shares outstanding | 963 | 277 | 388 | |
Number of shares available | 36 | |||
2014 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 44 | |||
Number of shares outstanding | 44 | |||
2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 95 | |||
Number of shares outstanding | 95 | |||
2016 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 560 | |||
Number of shares outstanding | 524 | |||
Number of shares available | 36 | |||
2019 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 300 | |||
Number of shares outstanding | 300 |
STOCK-BASED COMPENSATION AND _4
STOCK-BASED COMPENSATION AND WARRANTS - Fair value and compensation (Details) - USD ($) shares in Thousands, $ in Thousands | Jul. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Time-Based Vesting Number of Shares Vested | 90 | 431 | 192 |
Time-Based Vesting Number of Shares Unvested | 364 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 679 | 999 | |
Total fair value | $ 817 | $ 4,200 | |
Total fair value | $ 3,297 | ||
Executive Officers | |||
Time-Based Vesting Number of Shares Vested | 72 | ||
Time-Based Vesting Number of Shares Unvested | 231 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 454 | ||
Other employees | |||
Time-Based Vesting Number of Shares Vested | 18 | ||
Time-Based Vesting Number of Shares Unvested | 133 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 225 | ||
Hybrid Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 225 | ||
Hybrid Options | Executive Officers | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 151 | ||
Hybrid Options | Other employees | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 74 |
STOCK-BASED COMPENSATION AND _5
STOCK-BASED COMPENSATION AND WARRANTS - Stock options outstanding (Details) - $ / shares | Jul. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Number of Options | ||||
Outstanding | 277,000 | 388,000 | ||
Granted | 679,000 | |||
Outstanding | 963,000 | 277,000 | 388,000 | |
Vested | 90,000 | 431,000 | 192,000 | |
Weighted Average Exercise Price | ||||
Outstanding | $ 79.88 | $ 77.50 | ||
Outstanding | 33.06 | 79.88 | $ 77.50 | |
Vested | $ 53.14 | $ 92.50 | ||
Weighted Average Remaining Contractual Life | ||||
Weighted Average Remaining Contractual Lives | 8 years 1 month 6 days | 6 years 4 months 24 days | 7 years 9 months 18 days | |
Vested | 6 years 10 months 24 days | 5 years 8 months 12 days | ||
Award with time-based vesting | ||||
Number of Options | ||||
Granted | 497,000 | 23,000 | ||
Forfeited | (25,000) | (134,000) | ||
Weighted Average Exercise Price | ||||
Granted | $ 14.50 | $ 26 | ||
Forfeited | $ 24.39 | $ 76.50 | ||
Award with performance-based vesting | ||||
Number of Options | ||||
Granted | 225,000 | 0 | ||
Forfeited | (11,000) | 0 | ||
Weighted Average Exercise Price | ||||
Granted | $ 14.50 | |||
Forfeited | $ 14.50 | $ 0 |
STOCK-BASED COMPENSATION AND _6
STOCK-BASED COMPENSATION AND WARRANTS - Weighted average assumptions (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 100.00% | |
Risk free interest rate | 2.50% | |
Expected term (years) | 4 years | |
Stock options | Time-Based | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market price of common stock on grant date | $ 10.23 | $ 26 |
Expected volatility | 118.00% | 84.00% |
Risk free interest rate | 1.90% | 2.80% |
Expected term (years) | 5 years 8 months 12 days | 7 years |
Dividend yield | 0.00% | 0.00% |
Stock options | Hybrid | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market price of common stock on grant date | $ 10.61 | |
Expected volatility | 118.00% | |
Risk free interest rate | 2.00% | |
Expected term (years) | 8 years | |
Dividend yield | 0.00% |
STOCK-BASED COMPENSATION AND _7
STOCK-BASED COMPENSATION AND WARRANTS - Stock based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 3,317 | $ 2,636 |
Research and Development Expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 1,589 | 538 |
General and Administrative Expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 1,728 | $ 2,098 |
STOCK-BASED COMPENSATION AND _8
STOCK-BASED COMPENSATION AND WARRANTS - Warrants (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
STOCK-BASED COMPENSATION AND WARRANTS | ||
Outstanding, beginning of fiscal year, Shares | 920 | 913 |
Outstanding, beginning of fiscal year, Price | $ 66.80 | $ 68.29 |
Outstanding, beginning of fiscal year, Term | 3 years 4 months 24 days | 3 years 4 months 24 days |
Warrants issued for: Consulting services, Shares | 14 | 0 |
Warrants issued for: Consulting services, Price | $ 14.50 | $ 0 |
Modification for debt discount to former member of Board of Directors: Replacement warrant, Shares | 0 | 24 |
Modification for debt discount to former member of Board of Directors: Replacement warrant, Price | $ 0 | $ 9 |
Modification for debt discount to former member of Board of Directors: Canceled warrant, Shares | 0 | (10) |
Modification for debt discount to former member of Board of Directors: Canceled warrant, Price | $ 0 | $ 25.94 |
Warrant expirations, Shares | (316) | (7) |
Warrant expirations, Price | $ 82.78 | $ 120.27 |
Outstanding, end of fiscal year, Shares | 618 | 920 |
Outstanding, end of fiscal year, Price | $ 57.46 | $ 66.80 |
Outstanding, end of fiscal year, Term | 2 years 3 months 18 days | 3 years 4 months 24 days |
STOCK-BASED COMPENSATION AND _9
STOCK-BASED COMPENSATION AND WARRANTS - Additional information (Details) - USD ($) | Jul. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Feb. 23, 2020 | Mar. 21, 2019 | Jun. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 679,000 | 999,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 679,000 | |||||
Minimal Stock Price For Vesting | $ 29 | |||||
Estimated fair value of stock options | $ 817,000 | $ 4,200,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 8.38 | |||||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, stock options | $ 3,400,000 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 10 months 24 days | |||||
Exercise price of warrants | $ 57.46 | $ 66.80 | $ 68.29 | |||
Class of Warrant or Right, Fair Value Difference, Modified Warrant and Cancelled Warrant | $ 138,000 | |||||
Class of Warrant or Right, Outstanding | 618 | 920 | 913 | |||
Hybrid Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 225,000 | |||||
Aggregate fair value before adjusting for forfeitures | $ 2,100,000 | |||||
Time-based vesting [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 497,000 | 22,500 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||
Estimated fair value of stock options | $ 400,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 19.79 | |||||
Tranche [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 75.00% | |||||
Hybrid Vesting [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 225,000 | |||||
Estimated fair value of stock options | $ 2,100,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 9.51 | |||||
2014 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options outstanding terminated | 44,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 44,000 | |||||
2015 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options outstanding terminated | 95,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 95,000 | |||||
Employees and Directors | Non Qualified Stock Option Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 300,000 | |||||
2016 Plan | Share-based Payment Arrangement, Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 379,000 | |||||
2019 Plan | Share-based Payment Arrangement, Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 300,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Option, Nonvested, Weighted Average Exercise Price | $ 10.50 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 14.50 | |||||
Warrants | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Class of Warrant or Rights, Weighted Average Grant Date Fair Value | $ 11.50 | |||||
Exercise price of warrants | $ 25.94 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.50% | |||||
Class of Warrant or Right, Outstanding | 10,000 | |||||
Expected term (years) | 4 years | |||||
Expected volatility | 100.00% | |||||
Warrants, Consulting Services | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Class of Warrant or Rights, Fair Value of Warrants | $ 67,000,000 | |||||
Class of Warrant or Rights, Weighted Average Grant Date Fair Value | $ 14.50 | |||||
Exercise price of warrants | $ 6.50 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 119.00% | |||||
Expected term (years) | 5 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Income tax benefit at statutory U.S. federal rate | $ 4,270 | $ 6,394 |
Income tax benefit attributable to U.S. states | 1,420 | 1,876 |
Non-deductible expenses | (12) | (1,045) |
Stock option expirations | (52) | (1,484) |
Other | 392 | (328) |
Change in valuation allowance | (6,018) | (5,413) |
Total income tax expense | $ 0 | $ 0 |
INCOME TAXES - Deferred Income
INCOME TAXES - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred income tax assets: | ||
Net operating loss carryforward | $ 21,651 | $ 20,016 |
Intangible assets | 5,182 | 0 |
Stock-based compensation | 4,592 | 3,716 |
Start-up and organizational expenses | 203 | 338 |
Accrued expenses and other | 47 | 1,598 |
Total deferred income tax assets | 31,675 | 25,668 |
Valuation allowance for deferred income tax assets | (31,674) | (25,656) |
Net deferred income tax assets | 1 | 12 |
Deferred tax liabilities | ||
Deferred income tax liability- property, equipment and other | (1) | (12) |
Net deferred income tax assets | $ 0 | $ 0 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Increase in valuation allowance | $ 6,000 | |
NOL carryforwards | 21,651 | $ 20,016 |
Operating Loss Carryforwards | $ 4,100 | |
Operating Loss Carry Forwards Expiration Year | 15 years | |
UNITED STATES | ||
NOL carryforwards | $ 85,200 | |
NOL carryforwards does not expire | 30,600 | |
NOL carryforwards begin to expire in 2031 | $ 54,600 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | |
Commitments And Contingencies [Line Items] | |||
Employer matching contributions (as a percent) | 4.00% | ||
Total contributions by the entity | $ 100 | $ 100 | |
Operating Lease, Impairment Loss | $ 33,000 | ||
Employment Agreements | |||
Commitments And Contingencies [Line Items] | |||
Aggregate annual base salaries | $ 1,200 | ||
Employment Agreements | Minimum | |||
Commitments And Contingencies [Line Items] | |||
Annual target bonuses (as a percent) | 50.00% | ||
Employment Agreements | Maximum | |||
Commitments And Contingencies [Line Items] | |||
Annual target bonuses (as a percent) | 150.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ / shares in Units, shares in Millions | Jul. 23, 2019 | Jul. 01, 2019 | Jul. 23, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | |||||
Price per share | $ 14.50 | ||||
Fair Value Adjustment of Warrants | $ 79,000 | $ 12,000 | |||
Minimum | |||||
Related Party Transaction [Line Items] | |||||
Gross proceeds from issuance | $ 15,000,000 | ||||
Master Services Agreement ("MSA") | |||||
Related Party Transaction [Line Items] | |||||
Fair Value Adjustment of Warrants | $ 103,000 | ||||
Investor [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of shares issued | 1.4 | 1.4 | |||
Price per share | $ 14.50 | $ 14.50 | $ 14.50 | ||
Gross proceeds from issuance | $ 20,000,000 | $ 20,000,000 | $ 25,000,000 | ||
Ownership interest by related party | 62.00% | ||||
Investor [Member] | Master Services Agreement ("MSA") | |||||
Related Party Transaction [Line Items] | |||||
Investor relation expenses | $ 144,000 | ||||
General and administrative expenses | $ 247,000 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Interest and other income | |||
Interest income | $ 188 | $ 61 | |
Gain on lease termination | 168 | $ 200 | |
Gain from change in fair value of embedded derivatives | 74 | ||
Rental income | 153 | ||
Total | $ 188 | $ 456 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
NET LOSS PER SHARE | ||
Net loss | $ (20,333) | $ (30,446) |
Beneficial conversion feature | (2,273) | |
Net loss attributable to common stockholders | $ (20,333) | $ (32,719) |
NET LOSS PER SHARE - Anti Dilut
NET LOSS PER SHARE - Anti Dilutive (Details) - shares shares in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential common stock equivalents were excluded from the computation of diluted net loss per share | 1,581 | 1,197 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential common stock equivalents were excluded from the computation of diluted net loss per share | 618 | 920 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential common stock equivalents were excluded from the computation of diluted net loss per share | 963 | 277 |
FINANCIAL INSTRUMENTS AND SIGNF
FINANCIAL INSTRUMENTS AND SIGNFICANT CONCENTRATIONS (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | $ 0 |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3 | 0 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | 0 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers Into Level 3 | 0 | 0 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers out of Level 3 | 0 | 0 |
Cash and Cash Equivalents, at Carrying Value | $ 9,955,000 | $ 11,573,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, shares in Millions, $ in Millions | Oct. 09, 2020USD ($)$ / sharesshares | Oct. 07, 2020USD ($) | Sep. 15, 2020USD ($) | Oct. 31, 2020USD ($) | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019$ / shares | Jun. 30, 2018$ / shares |
Subsequent Event [Line Items] | |||||||
Exercise price of warrants | $ / shares | $ 57.46 | $ 66.80 | $ 68.29 | ||||
Term of warrants | 2 years 3 months 18 days | 3 years 4 months 24 days | 3 years 4 months 24 days | ||||
Reverse stock split ratio | 50 | ||||||
Xoma | License agreement | |||||||
Subsequent Event [Line Items] | |||||||
Period following stock offering for payment of remaining outstanding balance of license fee, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. | 15 days | ||||||
Acceleration of the remaining balance due | $ 1.8 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
License term (in years) | 20 years | ||||||
Milestone payments | $ 0.5 | ||||||
Transfer price (in percent) | 70.00% | ||||||
Issuance of common stock, net of issuance costs (in shares) | shares | 2.5 | ||||||
Gross proceeds from private placement of equity shares | $ 41 | ||||||
Net proceeds from private placement | $ 37.6 | ||||||
Reverse stock split ratio | 50 | ||||||
Aggregate bonus payments approved | $ 0.5 | ||||||
Subsequent Event | 2021 Financing | |||||||
Subsequent Event [Line Items] | |||||||
Transaction fees on gross proceeds and out-of-pocket expenses (in percent) | 6.00% | ||||||
Minimum number of days for happening any other financing | 60 days | ||||||
Additional transaction fees on gross proceeds (in percent) | 6.00% | ||||||
Issuance of common stock, net of issuance costs (in shares) | shares | 2.5 | ||||||
Number of shares of common stock called by warrants issued | shares | 0.8 | ||||||
Exercise price of warrants | $ / shares | $ 19.50 | ||||||
Term of warrants | 7 years | ||||||
Issue price per unit | $ / shares | $ 16.50 | ||||||
Gross proceeds from private placement of equity shares | $ 41 | ||||||
Transaction fees | 2.5 | ||||||
Costs for professional fees and other financing costs | $ 0.9 | ||||||
Liquidated damages on gross proceeds (in percent) | 6.00% | ||||||
Number of warrants issued for shares | shares | 0.8 | ||||||
Percent of advisory fee payable | 6.00% | ||||||
Subsequent Event | Xoma | |||||||
Subsequent Event [Line Items] | |||||||
Gross proceeds from private placement of equity shares | $ 20 | $ 41 |
SUBSEQUENT EVENTS - Unaudited P
SUBSEQUENT EVENTS - Unaudited Pro Forma (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Oct. 07, 2020 | Jun. 30, 2020 | Aug. 31, 2019 | Jul. 01, 2019 | Jun. 30, 2019 | Apr. 24, 2019 | Apr. 23, 2019 | Jun. 30, 2018 |
Current assets: | ||||||||
Total current assets | $ 10,518 | $ 12,144 | ||||||
Non-current assets: | ||||||||
Right-of-use assets, net | 383 | $ 605 | 0 | |||||
Total assets | 10,965 | 12,252 | ||||||
Current liabilities: | ||||||||
Accounts payable | 893 | 563 | ||||||
Current portion of license fees payable to Xoma | 1,600 | 6,500 | ||||||
Current portion of operating lease liabilities | 245 | 227 | 0 | |||||
Total current liabilities | 3,226 | 8,379 | ||||||
Non-current liabilities: | ||||||||
License fees payable to Xoma, net of current portion | 209 | 2,000 | ||||||
Operating lease liabilities, net of current portion | 165 | $ 406 | 0 | |||||
Total liabilities | 3,600 | 10,500 | ||||||
Stockholders equity: | ||||||||
Common Stock | 6 | 4 | ||||||
Additional paid-in capital | 154,595 | 128,651 | ||||||
Accumulated deficit | (147,236) | (126,903) | ||||||
Total stockholders? equity | 7,365 | 1,752 | $ (3,961) | |||||
Total liabilities and stockholders' equity | $ 10,965 | $ 12,252 | ||||||
Number of shares of Common Stock outstanding | 5,867 | 4,208 | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common Stock, Shares Authorized | 500,000 | 500,000 | 500,000 | 200,000 | ||||
Historical [Member] | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and restricted cash | $ 9,955 | |||||||
Other current assets | 563 | |||||||
Total current assets | 10,518 | |||||||
Non-current assets: | ||||||||
Right-of-use assets, net | 383 | |||||||
Other | 64 | |||||||
Total assets | 10,965 | |||||||
Current liabilities: | ||||||||
Accounts payable | 893 | |||||||
Accrued liabilities | 488 | |||||||
Current portion of license fees payable to Xoma | 1,600 | |||||||
Current portion of operating lease liabilities | 245 | |||||||
Total current liabilities | 3,226 | |||||||
Non-current liabilities: | ||||||||
License fees payable to Xoma, net of current portion | 209 | |||||||
Operating lease liabilities, net of current portion | 165 | |||||||
Total liabilities | 3,600 | |||||||
Stockholders equity: | ||||||||
Common Stock | 6 | |||||||
Additional paid-in capital | 154,595 | |||||||
Accumulated deficit | (147,236) | |||||||
Total stockholders? equity | 7,365 | |||||||
Total liabilities and stockholders' equity | $ 10,965 | |||||||
Number of shares of Common Stock outstanding | 5,867 | |||||||
Equity Financing Gross Proceeds [Member] | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and restricted cash | $ 41,000 | |||||||
Other current assets | 0 | |||||||
Total current assets | 41,000 | |||||||
Non-current assets: | ||||||||
Right-of-use assets, net | 0 | |||||||
Other | 0 | |||||||
Total assets | 41,000 | |||||||
Current liabilities: | ||||||||
Accounts payable | 0 | |||||||
Accrued liabilities | 0 | |||||||
Current portion of license fees payable to Xoma | 0 | |||||||
Current portion of operating lease liabilities | 0 | |||||||
Total current liabilities | 0 | |||||||
Non-current liabilities: | ||||||||
License fees payable to Xoma, net of current portion | 0 | |||||||
Operating lease liabilities, net of current portion | 0 | |||||||
Total liabilities | 0 | |||||||
Stockholders equity: | ||||||||
Common Stock | 2 | |||||||
Additional paid-in capital | 40,998 | |||||||
Accumulated deficit | 0 | |||||||
Total stockholders? equity | 41,000 | |||||||
Total liabilities and stockholders' equity | $ 41,000 | |||||||
Number of shares of Common Stock outstanding | 2,485 | |||||||
Offering Costs [Member] | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and restricted cash | $ 3,420 | |||||||
Other current assets | 0 | |||||||
Total current assets | 3,420 | |||||||
Non-current assets: | ||||||||
Right-of-use assets, net | 0 | |||||||
Other | 0 | |||||||
Total assets | 3,420 | |||||||
Current liabilities: | ||||||||
Accounts payable | 0 | |||||||
Accrued liabilities | 0 | |||||||
Current portion of license fees payable to Xoma | 0 | |||||||
Current portion of operating lease liabilities | 0 | |||||||
Total current liabilities | 0 | |||||||
Non-current liabilities: | ||||||||
License fees payable to Xoma, net of current portion | 0 | |||||||
Operating lease liabilities, net of current portion | 0 | |||||||
Total liabilities | 0 | |||||||
Stockholders equity: | ||||||||
Common Stock | 0 | |||||||
Additional paid-in capital | (3,420) | |||||||
Accumulated deficit | 0 | |||||||
Total stockholders? equity | 3,420 | |||||||
Total liabilities and stockholders' equity | $ 3,420 | |||||||
Number of shares of Common Stock outstanding | 0 | |||||||
Xoma Early Payments [Member] | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and restricted cash | $ 1,809 | |||||||
Other current assets | 0 | |||||||
Total current assets | 1,809 | |||||||
Non-current assets: | ||||||||
Right-of-use assets, net | 0 | |||||||
Other | 0 | |||||||
Total assets | 1,809 | |||||||
Current liabilities: | ||||||||
Accounts payable | 0 | |||||||
Accrued liabilities | 0 | |||||||
Current portion of license fees payable to Xoma | (1,600) | |||||||
Current portion of operating lease liabilities | 0 | |||||||
Total current liabilities | 1,600 | |||||||
Non-current liabilities: | ||||||||
License fees payable to Xoma, net of current portion | (209) | |||||||
Operating lease liabilities, net of current portion | 0 | |||||||
Total liabilities | 1,809 | |||||||
Stockholders equity: | ||||||||
Common Stock | 0 | |||||||
Additional paid-in capital | 0 | |||||||
Accumulated deficit | 0 | |||||||
Total stockholders? equity | 0 | |||||||
Total liabilities and stockholders' equity | $ 1,809 | |||||||
Number of shares of Common Stock outstanding | 0 | |||||||
Unaudited Pro Forma [Member] | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and restricted cash | $ 45,726 | |||||||
Other current assets | 563 | |||||||
Total current assets | 46,289 | |||||||
Non-current assets: | ||||||||
Right-of-use assets, net | 383 | |||||||
Other | 64 | |||||||
Total assets | 46,736 | |||||||
Current liabilities: | ||||||||
Accounts payable | 893 | |||||||
Accrued liabilities | 488 | |||||||
Current portion of license fees payable to Xoma | 0 | |||||||
Current portion of operating lease liabilities | 245 | |||||||
Total current liabilities | 1,626 | |||||||
Non-current liabilities: | ||||||||
License fees payable to Xoma, net of current portion | 0 | |||||||
Operating lease liabilities, net of current portion | 165 | |||||||
Total liabilities | 1,791 | |||||||
Stockholders equity: | ||||||||
Common Stock | 8 | |||||||
Additional paid-in capital | 192,173 | |||||||
Accumulated deficit | (147,236) | |||||||
Total stockholders? equity | 44,945 | |||||||
Total liabilities and stockholders' equity | $ 46,736 | |||||||
Number of shares of Common Stock outstanding | 8,352 |