Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Sep. 08, 2023 | Dec. 31, 2022 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jun. 30, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-39683 | ||
Entity Registrant Name | REZOLUTE, INC. | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 27-3440894 | ||
Entity Address, Address Line One | 275 Shoreline Drive, Suite 500 | ||
Entity Address, City or Town | Redwood City | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94065 | ||
City Area Code | 650 | ||
Local Phone Number | 206-4507 | ||
Title of 12(b) Security | Common Stock, par value $0.001 | ||
Trading Symbol | RZLT | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 63,584,000 | ||
Entity Common Stock, Shares Outstanding | 36,827,567 | ||
Entity Central Index Key | 0001509261 | ||
Current Fiscal Year End Date | --06-30 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Plante & Moran, PLLC | ||
Auditor Firm ID | 166 | ||
Auditor Location | Cleveland, Ohio |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 16,036 | $ 150,410 |
Investments in marketable debt securities | 85,860 | |
Prepaid expenses and other | 3,014 | 1,694 |
Total current assets | 104,910 | 152,104 |
Long-term assets: | ||
Investments in marketable debt securities | 16,470 | |
Right-of-use assets | 2,054 | 152 |
Property and equipment, net | 139 | 16 |
Deposits and other | 148 | 148 |
Total assets | 123,721 | 152,420 |
Current liabilities: | ||
Accounts payable | 3,269 | 1,132 |
Accrued liabilities: | ||
Compensation and benefits | 883 | |
Accrued clinical and other | 507 | 1,222 |
Current portion of operating lease liabilities | 541 | 108 |
Total current liabilities | 5,200 | 2,462 |
Long term liabilities: | ||
Operating lease liabilities, net of current portion | 1,937 | 80 |
Embedded derivative liabilities | 412 | 407 |
Total liabilities | 7,549 | 2,949 |
Commitments and contingencies (Notes 5 and 11) | ||
Shareholders' equity: | ||
Preferred stock, $0.001 par value; 400 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value; 100,000 shares authorized; issued and outstanding 36,827 and 33,582 shares as of June 30, 2023 and 2022, respectively | 37 | 34 |
Additional paid-in capital | 377,471 | 358,635 |
Accumulated other comprehensive loss | (351) | |
Accumulated deficit | (260,985) | (209,198) |
Total shareholders' equity | 116,172 | 149,471 |
Total liabilities and shareholders' equity | $ 123,721 | $ 152,420 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 400 | 400 |
Preferred stock, shares, issued | 0 | 0 |
Preferred stock, shares, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 36,827 | 33,582 |
Common stock, shares outstanding | 36,827 | 33,582 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating expenses: | ||
Research and development | $ 43,813 | $ 32,486 |
General and administrative | 12,177 | 9,357 |
Total operating expenses | 55,990 | 41,843 |
Operating loss | (55,990) | (41,843) |
Non-operating income (expense): | ||
Interest and other income, net | 4,208 | 80 |
Gain (loss) from change in fair value of derivative liabilities | (5) | 6,545 |
Employee retention credit | 231 | |
Underwriting discount on issuance of derivative | (2,495) | |
Interest expense | (1,807) | |
Loss on extinguishment of loan agreement | (1,771) | |
Total non-operating income (expense), net | 4,203 | 783 |
Net loss | (51,787) | (41,060) |
Other comprehensive loss: | ||
Net unrealized loss on available-for-sale marketable debt securities | (351) | |
Comprehensive loss | $ (52,138) | $ (41,060) |
Net loss per common share - basic (in dollars per share) | $ (1.01) | $ (2.26) |
Net loss per common share - diluted (in dollars per share) | $ (1.01) | $ (2.32) |
Weighted average number of common shares outstanding - basic (in shares) | 51,187 | 18,197 |
Weighted average number of common shares outstanding - diluted (in shares) | 51,187 | 19,487 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock 2022 Private Placement. | Common Stock 2021 Underwritten Public Offering | Common Stock 2021 Registered Direct Offering | Common Stock Equity Distribution Agreement | Common Stock LPC Purchase Agreement | Common Stock Registered Direct Offering 2022 | Common Stock | Additional Paid-in Capital 2022 Private Placement. | Additional Paid-in Capital 2021 Underwritten Public Offering 2021 Pre-Funded Warrants | Additional Paid-in Capital 2021 Underwritten Public Offering | Additional Paid-in Capital 2021 Registered Direct Offering | Additional Paid-in Capital Equity Distribution Agreement | Additional Paid-in Capital LPC Purchase Agreement | Additional Paid-in Capital Registered Direct Offering 2022 Class A Warrants | Additional Paid-in Capital Registered Direct Offering 2022 | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | 2022 Private Placement. | 2021 Underwritten Public Offering 2021 Pre-Funded Warrants | 2021 Underwritten Public Offering | 2021 Registered Direct Offering | Equity Distribution Agreement | LPC Purchase Agreement | Registered Direct Offering 2022 Class A Warrants | Registered Direct Offering 2022 | Total |
Balance at Jun. 30, 2021 | $ 8 | $ 194,229 | $ (168,138) | $ 26,099 | |||||||||||||||||||||||
Balance (in shares) at Jun. 30, 2021 | 8,352 | ||||||||||||||||||||||||||
Gross proceeds from issuance of common stock for cash | $ 6 | $ 1 | $ 1 | $ 18 | $ 39,950 | $ 4,999 | $ 1,518 | $ 1,172 | $ 64,372 | $ 39,956 | $ 5,000 | $ 1,519 | $ 1,172 | $ 64,390 | |||||||||||||
Gross proceeds from issuance of common stock for cash (in shares) | 6,147 | 769 | 138 | 116 | 18,026 | ||||||||||||||||||||||
Underwriting commissions, discounts and other equity offering costs | (4,596) | (4,596) | |||||||||||||||||||||||||
Share-based compensation | 3,685 | 3,685 | |||||||||||||||||||||||||
Reclassification of derivative liabilities to equity upon cure of authorized share deficiency | 35,025 | 35,025 | |||||||||||||||||||||||||
Issuance of commitment shares | $ 450 | $ 450 | |||||||||||||||||||||||||
Issuance of commitment shares (in shares) | 34 | ||||||||||||||||||||||||||
Fair value of warrants issued | $ 10,783 | $ 7,048 | $ 10,783 | $ 7,048 | |||||||||||||||||||||||
Net loss | (41,060) | (41,060) | |||||||||||||||||||||||||
Balance at Jun. 30, 2022 | $ 34 | 358,635 | (209,198) | 149,471 | |||||||||||||||||||||||
Balance (in shares) at Jun. 30, 2022 | 33,582 | ||||||||||||||||||||||||||
Gross proceeds from issuance of common stock for cash | $ 3 | $ 12,327 | $ 12,330 | ||||||||||||||||||||||||
Gross proceeds from issuance of common stock for cash (in shares) | 3,245 | ||||||||||||||||||||||||||
Underwriting commissions, discounts and other equity offering costs | (759) | (759) | |||||||||||||||||||||||||
Share-based compensation | 7,268 | 7,268 | |||||||||||||||||||||||||
Net change in accumulated other comprehensive loss | $ (351) | (351) | |||||||||||||||||||||||||
Net loss | (51,787) | (51,787) | |||||||||||||||||||||||||
Balance at Jun. 30, 2023 | $ 37 | $ 377,471 | $ (351) | $ (260,985) | $ 116,172 | ||||||||||||||||||||||
Balance (in shares) at Jun. 30, 2023 | 36,827 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (51,787) | $ (41,060) |
Share-based compensation expense | 7,268 | 3,685 |
Non-cash lease expense | 352 | 243 |
Loss from change in fair value of derivative liabilities | 5 | |
Accretion of discounts and amortization of premiums on marketable debt securities, net | (1,370) | |
Depreciation and amortization expense | 30 | 13 |
Gain from change in fair value of derivative liabilities, net | (6,545) | |
Underwriting discount on issuance of derivative | 2,495 | |
Loss on extinguishment of Loan Agreement: | ||
Prepayment premium paid | 300 | |
Other | 1,471 | |
Accretion of debt discount and issuance costs | 424 | |
Changes in operating assets and liabilities: | ||
Increase in prepaid expenses and other assets | (1,320) | (860) |
Increase (decrease) in accounts payable | 2,136 | (11) |
Increase in accrued liabilities | 205 | 229 |
Net Cash Used in Operating Activities | (44,481) | (39,616) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of marketable debt securities | (107,311) | |
Proceeds from maturities of marketable debt securities | 6,000 | |
Purchase of property and equipment | (153) | |
Total Cash Used in Investing Activities | (101,464) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of commissions and other offering costs | (759) | (3,716) |
Payment of debt discount and issuance costs | (254) | |
Prepayment of contractual obligations under Loan Agreement, including prepayment fee | (16,013) | |
Net Cash Provided by Financing Activities | 11,571 | 148,979 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (134,374) | 109,363 |
Cash, cash equivalents and restricted cash at beginning of period | 150,410 | 41,047 |
Cash, cash equivalents and restricted cash at end of period | 16,036 | 150,410 |
Cash and cash equivalents, end of year | 16,036 | 150,410 |
Total cash, cash equivalents and restricted cash, end of year | 16,036 | 150,410 |
SUPPLEMENTARY CASH FLOW INFORMATION: | ||
Cash paid for interest | 1,487 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 215 | 254 |
Operating lease liabilities incurred in exchange for right-of-use assets | 2,204 | |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Reclassification of derivative liabilities to equity upon cure of authorized share deficiency | 35,025 | |
Issuance of commitment shares for deferred offering costs subsequently charged to additional paid-in capital | 450 | |
Payables for deferred offering costs subsequently charged to additional paid-in capital | 61 | |
2021 Pre-Funded Warrants | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from warrants issued | 10,783 | |
Class A Warrants | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from warrants issued | 7,048 | |
Class B Warrants | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from warrants issued | 39,094 | |
2022 Private Placement | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuances of common stock | $ 12,330 | |
2021 Underwritten Public Offering | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuances of common stock | 39,956 | |
2021 Underwritten Public Offering | 2021 Pre-Funded Warrants | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from warrants issued | 10,800 | |
2021 Registered Direct Offering | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuances of common stock | 5,000 | |
EDA with Oppco | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuances of common stock | 1,519 | |
LPC Purchase Agreement | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuances of common stock | 1,172 | |
Registered Direct Offering 2022 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuances of common stock | $ 64,390 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2023 | |
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 developing transformative therapies for metabolic diseases related to chronic glucose imbalance. Consolidation The Company has two wholly owned subsidiaries consisting of Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. 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”). 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 shareholders’ equity instead of net income (loss). For the fiscal year ended June 30, 2023, components of comprehensive loss included the Company’s net loss and unrealized gains (losses) on investments in marketable debt securities. For the fiscal year ended June 30, 2022, the only component of comprehensive loss was the Company’s net loss as the Company had no items constituting any other comprehensive income (loss). The Company’s Chief Executive Officer also serves as the Company’s chief operating decision maker 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, determination if other than temporary impairment exists for marketable debt securities, the fair value of derivative liabilities, 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 discussed in Note 2. 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, money market funds and corporate commercial paper purchased with a maturity of three months or less. Investments in Marketable Debt Securities Under the investment policy approved by the Company’s Board of Directors, eligible investments in fixed income debt securities must be denominated and payable in U.S. dollars, including eligible corporate bonds, corporate commercial paper, U.S. government obligations, and money market funds. This investment policy only permits investments in the debt securities of issuers that meet stringent credit quality ratings on the date of the investment. The investment policy also places restrictions on the length of maturities and concentrations by type and issuer. The Company’s investments are issued by financial institutions that management believes are of high credit quality. However, they are exposed to credit risk in the event of default by the issuers. The Company classifies investments in marketable debt securities that mature in less than one year as short-term assets. For investments that mature in more than one year, the investments are classified as long-term assets unless management intends to liquidate the investments to fund current operations before the scheduled maturity dates. The Company accounts for its investments in marketable debt securities as available-for-sale securities whereby they are recorded in the consolidated balance sheet at fair value. Interest income is recognized in the consolidated statement of operations, consisting of accrued interest earned based on the coupon rate of the security, plus the impact of accreting discounts and amortizing premiums to maturity using the straight-line method which approximates the interest method. Unrealized gains and losses due to subsequent changes in fair value of the investments are reported in shareholders’ equity as a component of accumulated other comprehensive income (loss). The Company reviews the components of its portfolio of available-for-sale debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below amortized cost have resulted from a credit-related loss or other factors. If declines in fair value are due to a deterioration of credit quality of the issuer, the Company recognizes (i) a loss in other comprehensive income (loss) if the reduction in fair value is considered temporary, or (ii) a loss in the consolidated statement of operations if the reduction in fair value is considered other than temporary. For a decline in fair value that is solely due to changes in interest rates, impairment is not recognized if the Company has the ability and intent to hold the investment until maturity. The cost basis of any securities sold prior to maturity will be determined using the specific identification method. 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 to determine 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 consist solely of office furniture and equipment that is recorded at cost. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the assets which range from 3 Debt Discounts and Issuance Costs Debt discounts and issuance costs (“DDIC”) incurred to obtain new debt financings or modify existing debt financings consist of incremental direct costs incurred for fees paid to the lender, professional fees and due diligence services. DDIC is presented as a reduction in the carrying value of the debt and is accreted to interest expense using the effective interest method. 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. Share-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 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 share-based compensation. For stock options that are voluntarily surrendered by employees, all unrecognized compensation is immediately recognized in the period the options are cancelled. For stock options with vesting that is dependent on achieving certain market, performance and service conditions (“Hybrid Options”), the Company recognizes compensation expense over the requisite service period beginning on the date when the performance condition is considered probable of occurrence. 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. If the Hybrid Options do not ultimately become exercisable due to the failure of the option holder to achieve the requisite service period, any previously recognized compensation cost is reversed. However, if the Hybrid Options do not ultimately become exercisable due to the failure to achieve the market condition, previously recognized compensation cost will not be reversed. Embedded 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 would meet the definition of a derivative instrument, and if so whether the features are considered clearly and closely related to the primary economic characteristics 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 shareholders’ equity, then the embedded feature is bifurcated from the Host Contract and accounted for as a derivative liability. 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. Governmental Assistance In response to the COVID-19 pandemic, the United States government designed programs to assist businesses in dealing with the financial hardships caused by the pandemic. The Company recognizes the right to receive governmental assistance payments in the period in which all necessary legal requirements have been met and other related conditions on which they depend are substantially met. 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 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 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. Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted average number of outstanding shares of common stock and pre-funded warrants that are accounted for as equity instruments. Common shares associated with pre-funded warrants are included in the computation of both basic and diluted net loss per share since the exercise price is negligible and all of the pre-funded warrants are fully vested and exercisable. To the extent dilutive, during periods in which pre-funded warrants are accounted for as derivative liabilities, the calculation of diluted net loss per share is further adjusted to eliminate gains on changes in the fair value of such pre-funded warrants, net of related discounts upon issuance, and the related pre-funded warrant shares are included in the weighted average number of shares outstanding Diluted net loss per share is computed using the treasury stock method by further giving effect to all potential shares of common stock, including stock options and warrants, to the extent dilutive. For participating warrants that are entitled to participate in dividend to holders of shares of common stock, the Company applies the two-class method of allocating earnings if the impact is dilutive for the calculation of both basic and diluted net loss per share. Recent Accounting Pronouncements Recently Adopted Accounting Standard. In August 2020, FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). Standards Required to be Adopted in Future Years. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Other accounting standards that have been issued or proposed by 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, 2023 | |
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, 2023, the Company incurred a net loss of $51.8 million and net cash used in operating activities amounted to $44.5 million. As of June 30, 2023, the Company had an accumulated deficit of $261.0 million, and the Company’s capital resources consisted of cash and cash equivalents of $16.0 million, short-term investments in marketable debt securities of $85.9 million and long-term investments in marketable debt securities of $16.5 million. As of June 30, 2023, the Company had total liabilities of $7.5 million, including total current liabilities of $5.2 million. As discussed in Note 5, the Company is subject to license agreements that provide for future contractual payments upon achievement of various milestone events. Pursuant to the XOMA License Agreement (as defined below), a $5.0 million milestone payment will be due upon dosing of the first patient in a Phase 3 clinical trial for RZ358. First patient dosing milestone for the RZ358 Phase 3 clinical trial is expected to occur within the next 12 months. Management believes the Company’s cash and cash equivalents and investments in marketable securities will be adequate to meet the Company’s contractual obligations and carry out ongoing clinical trials and other planned activities through September 2024, at a minimum. |
INVESTMENTS IN MARKETABLE DEBT
INVESTMENTS IN MARKETABLE DEBT SECURITIES | 12 Months Ended |
Jun. 30, 2023 | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | NOTE 3 — INVESTMENTS IN MARKETABLE DEBT SECURITIES The estimated fair value of investments in marketable debt securities are classified as follows in the consolidated balance sheet as of June 30, 2023 (in thousands): 2023 Short-term investments $ 85,860 Long-term investments 16,470 Total investments $ 102,330 The Company only invests in liquid, high quality debt securities. However, all of these investments are subject to interest rate and credit risk that may result in fluctuations in the fair value of the investments. To minimize the exposure due to an adverse shift in interest rates, the Company generally invests in securities with expected maturities of two years or less and maintains a weighted average maturity of one year or less. As of June 30, 2023 investments in marketable debt securities with a fair value of $85.9 million are scheduled to mature during the 12-month period ending June 30, 2024 and substantially all of the remaining investments with a fair value of $16.5 million, are scheduled to mature during the 12-month period ending June 30, 2025. During the fiscal year ended June 30, 2023, no securities classified as available-for-sale were sold and the only redemptions occurred were as a result of the maturity of the respective investments. During the fiscal year ended June 30, 2022, the Company did not have any investments in marketable debt securities. Accrued interest receivable on all marketable debt securities amounted to $0.3 million which is included in other current assets in the accompanying consolidated balance sheet as of June 30, 2023. The following table summarizes the unrealized gains and losses that result in differences between the amortized cost basis and fair value of the Company’s marketable debt securities held as of June 30, 2023 (in thousands): Gross Unrealized Amortized Cost Gains Losses Fair Value Corporate commercial paper $ 41,670 $ — $ (73) $ 41,597 Obligations of U.S. government agencies 26,565 — (170) 26,395 U.S. Treasury obligations 10,416 2 (14) 10,404 Corporate notes and bonds 19,253 1 (14) 19,240 Asset-backed securities 4,777 — (83) 4,694 Available-for-sale investments $ 102,681 $ 3 $ (354) $ 102,330 |
LEASES
LEASES | 12 Months Ended |
Jun. 30, 2023 | |
LEASES | |
LEASES | NOTE 4 — LEASES In April 2022, the Company entered into a lease agreement for a new corporate headquarters in Redwood City, California. The space consists of approximately 9,300 square feet and provides for total base rent payments of approximately $2.9 million through the expected expiration of the lease in November 2027. Prior to occupancy, the landlord was required to make improvements to the facility that were completed in October 2022, triggering the commencement of the lease. The lease provided for a six-month rent abatement period beginning upon commencement of the lease term. In addition, the lease provided an allowance of approximately $0.1 million that was utilized by the Company for the purchase of furniture and equipment. The average base rent payable in cash over the 60-month lease term is approximately $48,000 per month. Upon commencement of the lease, the Company recognized a right-of-use asset for approximately $2.3 million, and a related operating lease liability for approximately $2.2 million. As of June 30, 2023 and 2022, the carrying values of all of the Company’s right-of-use assets and operating lease liabilities were as follows (in thousands): 2023 2022 Right-of-use assets $ 2,054 $ 152 Operating lease liabilities: Current $ 541 $ 108 Long-term 1,937 80 Total $ 2,478 $ 188 For the fiscal years ended June 30, 2023 and 2022, operating lease expense was as follows (in thousands): 2023 2022 Research and development $ 453 $ 289 General and administrative 154 103 Total $ 607 $ 392 As of June 30, 2023, the weighted-average remaining lease term under operating leases was 4.3 years, and the weighted-average discount rate used to determine the operating lease liabilities was 6.8%. Future Lease Payments Future payments under operating lease agreements as of June 30, 2023 are as follows (in thousands): Fiscal year ending June 30, 2024 $ 689 2025 627 2026 646 2027 666 Thereafter 224 Total lease payments 2,852 Less imputed interest (374) Present value of operating lease liabilities $ 2,478 |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 12 Months Ended |
Jun. 30, 2023 | |
LICENSE AGREEMENTS | |
LICENSE AGREEMENTS | NOTE 5 —LICENSE AGREEMENTS XOMA License Agreement In December 2017, the Company entered into a license agreement (“XOMA License Agreement”) with XOMA Corporation (“XOMA”), through its wholly-owned subsidiary, XOMA (U.S.) 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. In January 2022, the Company was required to make a milestone payment under the XOMA License Agreement of $2.0 million that became due upon the dosing of the last patient in the Company’s ongoing Phase 2b Clinical Trial for RZ358. Upon the achievement of certain clinical and regulatory events under the XOMA License Agreement, the Company will be required to make additional milestone payments to XOMA up to $35.0 million. After the clinical and regulatory milestones, the Company will be required, upon the future commercialization of RZ358, to pay royalties to XOMA based on the net sales of the related products and additional milestone payments to XOMA up to $185.0 million related to annual net sales amounts. There have been no events that would result in any royalty payments owed under the XOMA License Agreement to date. The next milestone payment of $5.0 million will be due upon dosing of the first patient in a Phase 3 clinical trial for RZ358. ActiveSite License Agreement In August 2017, the Company entered into a Development and License Agreement (the “ActiveSite 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 Development and License Agreement requires various milestone payments up to $46.5 million if all milestone events are achieved. The first milestone payment for $1.0 million was paid in December 2020 after clearance was received for an Initial Drug Application, or IND, filed with the U.S. Food and Drug Administration (“FDA”). The second milestone payment of $3.0 million was paid in February 2023 after dosing of the first patient in a Phase 2 clinical trial for RZ402. The next milestone payment of $5.0 million will be due upon the first dosing of a patient in a Phase 3 clinical trial. The Company is also required to pay royalties equal to 2.0% of any sales of products that use the PKI Portfolio. There have been no events that would result in any royalty payments owed under the ActiveSite License Agreement to date. |
EMBEDDED DERIVATIVE LIABILITY
EMBEDDED DERIVATIVE LIABILITY | 12 Months Ended |
Jun. 30, 2023 | |
EMBEDDED DERIVATIVE LIABILITY | |
EMBEDDED DERIVATIVE LIABILITY | NOTE 6 — EMBEDDED DERIVATIVE LIABILITY On April 14, 2021, the Company entered into a $30.0 million Loan and Security Agreement (the “Loan Agreement”) with SLR Investment Corp. (“SLR”) and certain other lenders (collectively, the “Lenders”). The Lenders agreed to loan up to $30.0 million but the actual amount borrowed by the Company amounted to $15.0 million. The maturity date of the outstanding borrowings was April 1, 2026 (the “Maturity Date”), but the Company elected to repay the entire amount and terminated the Loan Agreement on June 30, 2022. Accordingly, the Company paid a total of $16.0 million consisting of the outstanding principal of $15.0 million, the Final Fee of $0.7 million and the prepayment fee of $0.3 million. As of June 30, 2022, a loss on extinguishment of the Loan Agreement of $1.8 million was recognized for the unaccreted discount of $1.5 million and the 2.00% prepayment penalty of $0.3 million. Concurrently with the execution of the Loan Agreement, the Company entered into an exit fee agreement (the “Exit Fee Agreement”) that provides for a fee of 4.00% of the funded principal balance for a total of $0.6 million in the event certain transactions (defined as “Exit Events”) occur prior to April 13, 2031. The Exit Fee was not impacted by termination of the Loan Agreement discussed above. The Company is accounting for the Exit Fee Agreement as an embedded derivative liability with an estimated fair value of $0.4 million as of June 30, 2023 and 2022. Exit Events include, but are not limited to, sales of substantially all assets, certain mergers, change of control transactions, and issuances of common stock that result in new investors owning more than 35% of the Company’s shares. Fair value of embedded derivatives is assessed at the end of each reporting period with changes in fair value recognized as a nonoperating gain or loss. |
DERIVATIVE LIABILITY FOR AUTHOR
DERIVATIVE LIABILITY FOR AUTHORIZED SHARE DEFICIENCIES | 12 Months Ended |
Jun. 30, 2023 | |
DERIVATIVE LIABILITY FOR AUTHORIZED SHARE DEFICIENCIES | |
DERIVATIVE LIABILITY FOR AUTHORIZED SHARE DEFICIENCIES | NOTE 7 — DERIVATIVE LIABILITY FOR AUTHORIZED SHARE DEFICIENCIES As discussed in Note 8, the Company completed an underwritten offering in May 2022 that resulted in the issuance of 10,947,371 Class B pre-funded warrants (“Class B PFWs”) for gross proceeds of approximately $41.6 million or $3.80 per share. Exercisability of the Class B PFWs was subject to the Company’s ability to obtain shareholder approval for an increase in authorized shares. Since the ability to obtain shareholder approval was outside the Company’s control, liability classification was required beginning on the date of issuance of the Class B PFWs on May 4, 2022. The fair value of approximately $41.6 million related to the Class B PFWs on the date of issuance was accounted for as a derivative liability beginning on May 4, 2022. As discussed in Note 8, the Company’s shareholders approved an increase in authorized shares from 40.0 million shares to 100.0 million shares on June 16, 2022. Upon receipt of shareholder approval for the authorized share increase, fair value of the derivative liability had decreased to $35.0 million or $3.20 per share, which resulted in a gain of $6.6 million. This gain is included in non-operating income and the derivative liability of $35.0 million was reclassified into shareholders’ equity on June 16, 2022. Underwriter discounts of approximately $2.5 million related to the Class B PFWs were expensed on the date of issuance since the fair value of the Class B PFWs exceeded the net proceeds received by the Company. Fair value of the Class B PFWs was determined using the BSM option-pricing model with the following assumptions as of June 16, 2022: Market price of common stock $ 3.20 Exercise price $ 0.001 Risk-free interest rate 3.3 % Dividend rate 0.0 % Remaining expected term (years) 9.9 Historical volatility 95.0 % |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2023 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 8 — SHAREHOLDERS’ EQUITY Changes in Authorized Capital Stock On June 16, 2022, the Company’s shareholders approved an increase of authorized shares from 40.0 million shares to 100.0 million shares of common stock. Accordingly, as of June 30, 2023 and 2022, the Company was authorized to issue 100.0 million shares of common stock and 0.4 million shares of preferred stock. May 2022 Registered Direct Offering On May 1, 2022, the Company entered into (i) an underwriting agreement with Jefferies LLC, as representative of the underwriters listed therein, relating to the issuance and sale of equity securities in an underwritten registered direct offering (the “2022 RDO”), and (ii) a placement agency agreement with Jefferies LLC, that provided for a private placement of equity securities (the “2022 Private Placement”). The 2022 RDO resulted in the issuance of (i) approximately 18.0 million shares of the Company’s common stock, at a public offering price of $3.80 per share, (ii) Class A pre-funded warrants (the “Class A PFWs”) to purchase up to approximately 2.0 million shares of common stock at a public offering price of $3.799 per Class A PFW and (iii) Class B PFWs to purchase up to 10.9 million shares of common stock at a public offering price of $3.799 per Class B PFW. The gross amount of the 2022 RDO was $117.6 million, before deducting an aggregate of $7.1 million incurred for underwriting discounts and approximately $0.4 million for professional fees and other offering expenses payable by the Company. The 2022 RDO closed on May 4, 2022 and the Company received net proceeds of approximately $110.5 million. In connection with the 2022 RDO, certain of the Company’s officers and directors agreed not to sell or otherwise dispose of any common stock held by them through July 30, 2022. 2022 Private Placement Pursuant to the 2022 Private Placement, the Company entered into a securities purchase agreement (“SPA”) on May 4, 2022 with Handok, Inc. (“Handok”), an entity affiliated with a member of the Board of Directors, and certain of Handok’s affiliates (collectively, the “Purchasers”). Contingent upon satisfaction of certain closing conditions set forth in the SPA, the Company agreed to sell to the Purchasers 3.2 million shares of common stock at a price of $3.80 per share. In July 2022 the Company entered into amended SPAs for the 2022 Private Placement resulting in gross proceeds of approximately $12.3 million in exchange for approximately 3.2 million shares of common stock. The Company incurred approximately $0.8 million for underwriting commissions and other offering costs resulting in net proceeds of $11.6 million. 2022 Pre-Funded Warrants The offering price of $3.799 per share for the Class A PFWs and the Class B PFWs (collectively, the “2022 PFWs”) is equal to the public offering price for the shares of common stock issued in the 2022 RDO less the $0.001 per share price that is required to be paid to the Company upon exercise of the 2022 PFWs. The exercise price of the 2022 PFWs is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock, and also upon any distributions for no consideration of assets to the Company's shareholders. In the event of certain corporate transactions, the holders of the 2022 PFWs will be entitled to receive, upon exercise of the 2022 PFWs, the kind and amount of securities, cash or other property that the holders would have received had they exercised the 2022 PFWs immediately prior to such transaction. The 2022 PFWs do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of common stock are entitled. Each Class A PFW is exercisable upon issuance. The Class B PFWs became exercisable for shares of common stock upon receipt of shareholder approval for an increase in the number of authorized shares of common stock as discussed below under the caption Required Shareholder Approval Required Shareholder Approval The closing of the 2022 RDO resulted in the issuance of approximately 18.0 million shares of common stock and Class A PFWs exercisable for approximately 2.0 million shares. After these issuances, the Company had utilized the entire 40.0 million of authorized shares of common stock that were available under its corporate charter, consisting of issued shares and shares of common stock reserved for issuance under stock option plans and outstanding warrants. Accordingly, the Company did not have a sufficient number of shares of common stock available to permit exercise of any of the Class B PFWs. Accordingly, the Class B PFWs were only exercisable for shares of common stock to the extent that shareholders subsequently approved an increase in the number of authorized shares (the “Shareholder Approval”), which the Company was required to use its best efforts to obtain at an annual meeting of shareholders to be held by June 30, 2022. As noted under the caption Changes in Authorized Capital Stock Upon closing of the 2022 RDO on May 4, 2022, the Company accounted for the gross proceeds of $41.6 million received from the issuance of the Class B PFWs as a derivative liability. As a result of subsequent reductions in the fair value of this derivative liability, the Company recognized a gain of $6.6 million through June 16, 2022 when Shareholder Approval was obtained. Upon receipt of Shareholder Approval for the increase in authorized shares to 100.0 million shares, the Company reclassified the related Class B PFW derivative liability of $35.0 million to shareholders’ equity. Registration Rights Agreement In connection with the offer of the Class B PFWs, the Company entered into registration rights agreements with the purchasers. As required by the registration rights agreements, the Company filed a registration statement in June 2022 that was declared effective on July 1, 2022 to register the shares issuable upon exercise of the Class B PFWs. If the Company fails to comply with the registration rights agreement, it will be obligated to pay 2.0% of the purchase price of the Class B PFWs for an aggregate of approximately $0.8 million as liquidated damages. If liquidated damage payments are required in the future, they will be charged to expense in the period incurred. 2021 Underwritten Public Offering On October 12, 2021, the Company entered into an underwriting agreement with Oppenheimer & Co., Inc., as representative of the underwriters listed therein (the “2021 Underwriters”) for the planned issuance and sale of equity securities in an underwritten public offering (the “2021 Underwritten Offering”). On October 15, 2021, closing occurred for the Underwritten Offering resulting in the issuance of (i) 6,030,847 shares of common stock at $6.50 per share for gross proceeds of $39.2 million, and (ii) 1,661,461 pre-funded warrants to purchase 1,661,461 shares of common stock at an issuance price of $6.49 per warrant (the “2021 PFWs”) for gross proceeds of $10.8 million. The aggregate gross proceeds from the Underwritten Offering amounted to $50.0 million, excluding the Underwriters’ Option discussed below, and before deductions for underwriting commissions of 6.0% of the gross proceeds and other offering costs of approximately $0.3 million. After deducting total offering costs of $3.3 million, the net proceeds of the Underwritten Offering amounted to approximately $46.7 million. The Company granted the 2021 Underwriters a 30-day 2021 Pre-Funded Warrants The 2021 PFWs have an exercise price of $0.01 per share, which is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. Each 2021 PFW is exercisable at any time and from time to time after issuance with no stated expiration date. In the event of certain corporate transactions, the holders of the 2021 PFWs will be entitled to receive, upon exercise of the 2021 PFWs, the kind and amount of securities, cash or other property that the holders would have received had they exercised the 2021 PFWs immediately prior to such transaction. The 2021 PFWs do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of common stock are entitled. The gross proceeds of $10.8 million received from issuance of the 2021 PFWs was recorded as a component of shareholders’ equity within additional paid-in capital. In accordance with the terms of the warrant agreement, holders of the outstanding warrants are not entitled to exercise any portion of the 2021 PFWs if, upon exercise of such portion of the warrant, the holder’s aggregate ownership of the Company’s common stock or the combined voting power beneficially owned by such holder would exceed a designated percentage elected by the holder ranging from 4.99% to 19.99%, after giving effect to the exercise (the “Maximum Ownership Percentage”). Upon at least 61 days’ prior notice to the Company, any warrant holder may elect to increase or decrease the Maximum Ownership Percentage to any other percentage not to exceed 19.99%. Through June 30, 2023, no shares underlying the 2021 PFWs have been exercised. 2021 Registered Direct Offering Concurrently with the Underwritten Offering, Handok entered into a subscription agreement for a registered direct offering (the “2021 RDO”) pursuant to which the Company agreed to sell Handok an aggregate of 769,231 shares of its common stock at a purchase price of $6.50 per share. The closing for the 2021 RDO occurred on October 27, 2021, whereby the Company received gross proceeds of $5.0 million. Termination of EDA and Purchase Agreement The Company entered an Equity Distribution Agreement (“EDA”) with Oppenheimer & Co. Inc. (“Oppenheimer”) in December 2020 and a purchase agreement (“Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”) in August 2021. The Company sold 138,388 shares of its common stock pursuant to the EDA for net proceeds of approximately $1.5 million. From August 2021 through September 2021, LPC purchased 115,708 shares of common stock for gross proceeds of approximately $1.2 million. Concurrently, the Company issued 33,799 shares of common stock to LPC as an initial fee for its commitment to purchase shares under the Purchase Agreement. In May 2022, the Company provided notices to Oppenheimer and LPC whereby the EDA and the Purchase Agreement were terminated. As a result of these termination notices, no further equity securities are issuable under either agreement. |
SHARE-BASED COMPENSATION AND WA
SHARE-BASED COMPENSATION AND WARRANTS | 12 Months Ended |
Jun. 30, 2023 | |
SHARE-BASED COMPENSATION AND WARRANTS | |
SHARE-BASED COMPENSATION AND WARRANTS | NOTE 9 — SHARE-BASED COMPENSATION AND WARRANTS Stock Option Plans 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 as of June 30, 2023 (in thousands): Plan Termination Number of Shares Description Date Authorized Outstanding Available 2015 Plan February 2020 17 17 — 2016 Plan October 2021 140 140 — 2019 Plan July 2029 200 200 — 2021 Plan March 2031 10,700 8,388 2,312 Total 11,057 8,745 2,312 The Company currently has one active stock option plan, the 2021 Equity Incentive Plan (the “2021 Equity Plan”). On March 31, 2021, the Company’s Board of Directors adopted the 2021 Equity Plan that will terminate on March 31, 2031. On May 26, 2021, the 2021 Equity plan was approved by the Company’s shareholders with authority to issue up to 1.2 million shares of common stock. Pursuant to the 2021 Equity Plan, no awards may be granted under the three legacy stock option plans shown in the table above, but all outstanding awards previously granted under those plans shall remain outstanding and subject to the terms of the respective plans. On June 16, 2022, the Company’s shareholders approved an amendment to the 2021 Equity Plan, increasing the number of shares of common stock to be issued under the plan up to 10.7 million shares of common stock. Stock options outstanding under these plans expire pursuant to their contractual provisions on various dates through 2033. 2022 Employee Stock Purchase Plan On June 16, 2022, the Company’s shareholders approved the adoption of the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP provides an opportunity for employees to purchase shares of the Company’s common stock through accumulated payroll deductions. The 2022 ESPP has consecutive offering periods that begin approximately every 6 months commencing on the first trading day on or after July 1 and terminating on the last trading day of the offering period ending on December 31 and commencing on the first trading day on or after January 1 and terminating on the last trading day of the offering period ending on June 30. The 2022 ESPP reserves 0.5 million shares for purchases. There have been no offering periods under the 2022 ESPP through June 30, 2023. Stock Options Outstanding The following table sets forth a summary of the combined activity under all of the Company’s stock option plans for the fiscal years ended June 30, 2023 and 2022 (shares in thousands): 2023 2022 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 8,506 $ 5.24 9.7 1,285 $ 16.35 8.7 Grants to employees 740 2.00 7,373 3.51 Expired (116) 40.73 (78) 19.03 Forfeited (385) 3.75 (74) 9.72 Outstanding, end of fiscal year 8,745 4.56 8.8 8,506 5.24 9.7 Vested, end of fiscal year 2,676 6.57 8.4 685 18.63 7.5 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. For the fiscal year ended June 30, 2023, the aggregate fair value of stock options granted for approximately 0.7 million shares of common stock amounted to $1.1 million or approximately $1.53 per share as of the grant dates. For the fiscal year ended June 30, 2022, the aggregate fair value of stock options granted for approximately 7.4 million shares of common stock amounted to $20.1 million or approximately $2.72 per share as of the grant dates. 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. The fair value of stock options was estimated on the dates of grant using the BSM option-pricing model, with the following weighted-average assumptions for the fiscal years ended June 30, 2023 and 2022: 2023 2022 Market price of common stock on grant date $ 3.73 $ 3.51 Expected volatility 91 % 94 % Risk free interest rate 3.7 % 3.1 % Expected term (years) 6.0 6.1 Dividend yield 0 % 0 % Share-based compensation expense is included under the following captions in the consolidated statements of operations for the fiscal years ended June 30, 2023 and 2022 (in thousands): 2023 2022 Research and development $ 3,243 $ 1,405 General and administrative 4,025 2,280 Total $ 7,268 $ 3,685 Unrecognized share-based compensation expense for stock options that provide solely for time-based vesting as of June 30, 2023 was approximately $16.9 million. This amount is expected to be recognized over a remaining weighted average period of 2.8 years. As of June 30, 2023, unrecognized compensation of $0.1 million related to the remaining Hybrid Options is being recognized ratably over a weighted average period of 1.1 years. Pre-Funded Warrants In connection with the 2021 RDO discussed in Note 8, the Company issued 2021 PFWs to purchase 1,661,461 shares of common stock at an issuance price of $6.49 per warrant for gross proceeds of $10.8 million. The 2021 PFWs may be exercised at any time by paying the exercise price of $0.01 per share, subject to the terms discussed in Note 8. In connection with the 2022 RDO discussed in Note 8, the Company issued 1,973,684 Class A PFWs and 10,947,371 Class B PFWs to purchase an aggregate of 12,921,055 shares of common stock at an issuance price of $3.799 per warrant. As of June 30, 2023 all of the Class A PFWs and Class B PFWs Other Warrants In connection with an equity financing in October 2020, the Company issued warrants entitling the holders to purchase approximately 0.8 million shares of common stock. The warrants are exercisable at $19.50 per share for a period of seven years, may be exercised on a cash or cashless basis at the election of the holders, and holders are entitled to share in any dividends or distributions payable to holders of common stock on an as-converted basis (the “Participating Warrants”). Additionally, the Company has issued warrants to purchase shares of common stock in conjunction with other debt and equity financings and for services. As of June 30, 2023 and 2022, all of the warrants were vested. For the fiscal years ended June 30, 2023 and 2022, no warrants were granted or exercised. Excluding the pre-funded warrants discussed above, the following table summarizes activity for all other warrants for the fiscal years ended June 30, 2023 and 2022 (shares in thousands): 2023 2022 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 1,150 $ 22.83 4.2 1,252 $ 28.91 4.8 Expirations (262) 25.32 (102) 97.79 Outstanding, end of fiscal year 888 22.10 3.5 1,150 22.83 4.2 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 10 — INCOME TAXES Net Operating Loss Carryforwards The Company files income tax returns in the U.S. federal jurisdiction and in several states including California, Colorado, and Oregon. The Company’s federal and state tax returns for the 2020 fiscal year and forward are subject to examination by taxing authorities. Federal and state laws impose substantial restrictions on the utilization of federal net operation loss (“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 is limited in the event that a cumulative change in ownership of more than 50% occurs within a three-year period. During the fiscal year ended June 30, 2022, the Company completed an IRC Section 382 analysis and concluded that the Company’s NOL carryforwards are subject to limitations as a result of past ownership changes. As of June 30, 2023, the Company has U.S. federal net operating loss (“NOL”) carryforwards of approximately $153.2 million, of which approximately $33.4 million of NOL carryforwards will never be available for use due to the limitations under IRC section 382 discussed above. The remainder of the Company’s NOL carryforwards of $119.8 million consists of (i) $17.1 million that never expires and is currently available to offset taxable income, (ii) $7.9 million that is currently available to offset taxable income but if not utilized expires in 2031 through 2035, (iii) $13.4 million that become available through fiscal year 2038 and that expires by June 30, 2038 if not utilized, and (iv) $81.4 million that never expires. With respect to the $81.4 million of NOL carryforwards that never expire, this amount will become available in varying annual amounts for an aggregate approximately $15.6 million through fiscal year 2038 and $1.2 million annually thereafter. If the Company experiences future ownership changes that meet the aforementioned criteria under Section 382, further limitations will be imposed on the use of all NOL carryforwards existing through the date of such change. The Company also has Colorado and California NOL carryforwards that begin to expire in 2031 and are expected to be subject to similar limitations as those imposed under IRC Section 382. Income Tax Expense For the fiscal years ended June 30, 2023 and 2022, 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 consolidated financial statements is as follows (in thousands): 2023 2022 Income tax benefit at statutory US federal rate $ 10,875 $ 8,622 Income tax benefit attributable to US states 3,468 3,151 Impact of reduction in Colorado tax rate (78) — Non-taxable derivative gains — 1,379 Non-deductible expenses (442) (527) Stock option expirations (921) (332) Other (399) 25 Change in valuation allowance (12,503) (12,318) Total income tax expense $ — $ — For the fiscal years ended June 30, 2023 and 2022, the Company did not recognize any current income tax expense or benefit due to a full valuation allowance on its net deferred income tax assets. Deferred Income Tax Assets and Liabilities As of June 30, 2023 and 2022, the income tax effects of temporary differences that give rise to significant deferred income tax assets and liabilities are as follows (in thousands): 2023 2022 Deferred income tax assets: Net operating loss carryforwards $ 40,537 $ 38,361 Research and experimental costs 9,454 — Intangible assets 5,595 5,215 Share-based compensation 2,884 2,725 Operating lease liabilities 694 — Accrued expenses and other 603 293 Total deferred income tax assets 59,767 46,594 Valuation allowance for deferred income tax assets (59,192) (46,594) Deferred income tax assets, net of valuation allowance 575 — Deferred income tax liability right-of-use assets (575) — Net deferred income tax assets $ — $ — For the fiscal year ended June 30, 2023, the valuation allowance increased by $12.5 million, primarily as a result of the increase in net operating losses and capitalization of research and experimental costs that was required beginning in the fiscal year ended June 30, 2023. 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. Unrecognized Tax Benefits The Company did not have any unrecognized tax benefits as of June 30, 2023 and 2022. 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, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 — COMMITMENTS AND CONTINGENCIES Licensing Commitments Please refer to Note 5 for further discussion of commitments to make milestone payments and to pay royalties under license agreements with XOMA and ActiveSite. Employment Agreements As of June 30, 2023, the Company was subject to employment agreements with two officers of the Company and one The agreements with the Chief Executive Officer and Chief Medical Officer provides that if either of individuals is terminated outside of a change in control event and without cause, (i) all of their stock options that are subject to ongoing vesting conditions over subsequent periods ranging from 12 to 18 months will immediately vest, and (ii) such stock options will remain exercisable for periods ranging from 6 to 12 months following the occurrence of the termination event. In addition, if either or both of the executive officers are terminated solely due to a change of control event, all of their respective unvested stock options will immediately vest and all outstanding stock options will remain exercisable for periods ranging from 6 to 12 months following the occurrence of the termination event. The amendment to the Chief Medical Officer’s employment agreement provides that upon the occurrence of a termination event other than a change of control, the Company is required to (i) make severance payments equal to 12 months of salary, a pro-rata bonus, and health insurance coverage for 12 months following the termination date, and (ii) all unvested stock options subject to vest over the subsequent 12 month period after the termination event will become immediately exercisable and all outstanding stock options will remain exercisable for 6 months following the termination event. In addition, upon the occurrence of a termination solely due to a change of control event, the Company is required to (i) make severance payments equal to 18 months of salary, a pro-rata bonus, and health insurance coverage for 18 months following the termination event. 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 the 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 $0.3 million and $0.2 million for the fiscal years ended June 30, 2023 and 2022, respectively. 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, 2023, 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 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 12 — RELATED PARTY TRANSACTIONS 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. Investors in Registered Direct Offerings In connection with the 2021 Underwritten Offering discussed in Note 8, a group of affiliated investors purchased approximately (i)1,930,000 shares of common stock at $6.50 per share for a total of $12.5 million, and (ii) 2021 PFWs exercisable for the purchase of 123,000 shares at $6.49 per 2021 PFW for a total issuance price of $0.8 million. In connection with the 2022 RDO discussed in Note 8, certain officers and directors of the Company purchased 111,840 shares of common stock at $3.80 per share for a total of $0.4 million. In addition, the group of affiliated investors discussed above purchased (i) 3,421,052 shares of common stock at $3.80 per share for a total of $12.2 million, and (ii) 3,421,053 Class B PFWs at $3.799 each for a total of $12.2 million. Investors in 2022 Private Placement Handok and certain of its affiliates were the sole investors in the 2022 Private Placement and the Registered Direct Offering discussed in Note 7. |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Jun. 30, 2023 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
SUPPLEMENTAL FINANCIAL INFORMATION | NOTE 13 - SUPPLEMENTAL FINANCIAL INFORMATION Cash and cash equivalents Cash and cash equivalents consist of the following as of June 30, 2023 and 2022 (in thousands): 2023 2022 Demand deposits at a single financial institution $ 6,091 $ 150,410 Money market funds 5,464 — Commercial paper 4,481 — Total $ 16,036 $ 150,410 The money market funds and commercial paper included in the table above were purchased with an original maturity of three months or less. These investments and the demand deposits are freely available for the Company’s immediate and general business use. Property and Equipment Property and equipment consisted of the following as of June 30, 2023 and 2022 (in thousands): 2023 2022 Office furniture and equipment $ 210 $ 56 Less accumulated depreciation (71) (40) Total $ 139 $ 16 Depreciation expense related to property and equipment amounted to approximately $30,000 and $13,000 for the fiscal years ended June 30, 2023 and 2022, respectively. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Jun. 30, 2023 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | NOTE 14 — NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted average number of outstanding shares of common stock and pre-funded warrants that are accounted for as equity instruments. For the calculation of diluted net loss per share for the fiscal year ended June 30, 2022, since the impact of accounting for the pre-funded warrants as derivative liabilities was dilutive, the numerator was adjusted to eliminate gains on changes in fair value of such pre-funded warrants, and the denominator was adjusted to include the related pre-funded warrant shares. Calculation of the weighted average number of shares outstanding for purposes of diluted net loss per share is also required to include the dilutive effect, if any, of stock options, warrants, and other common stock equivalents computed using the treasury stock method. For the fiscal years ended June 30, 2023 and 2022, all of such common stock equivalents were antidilutive and exclude from the calculations. In addition, the impact of applying the two-class method related to the Participating Warrants, was antidilutive for the calculation of both basic and diluted net loss per share. Presented below are the calculations of the numerators and the denominators for basic and diluted net loss per share for the fiscal years ended June 30, 2023 and 2022 (in thousands except per share amounts): 2023 2022 Calculation of Numerators: Net loss for calculation of basic net loss per share $ (51,787) $ (41,060) Dilutive derivative gains, net of losses, related to Class B PFWs: Gain from change in fair value of derivative liability — (6,565) (1) Underwriting discount on issuance of derivative — 2,495 (1) Net loss for the calculation of diluted net loss per share $ (51,787) $ (45,130) Calculation of Denominators: Weighted Average number of common shares outstanding 36,605 16,254 Weighted average shares related to pre-funded warrants: 2021 PFWs 1,661 (6) 1,179 (2) Class A PFWs 1,974 (6) 314 (3) Class B PFWs 10,947 (6) 450 (4) Weighted average shares for basic net loss per share 51,187 18,197 Weighted average adjustment for Class B PFWs — 1,290 (5) Weighted average shares for diluted net loss per share 51,187 19,487 Net loss per share of common stock: Basic $ (1.01) $ (2.26) Diluted $ (1.01) $ (2.32) __________________ (1) For the calculation of diluted net loss per share, the net impact of the discount expense and the derivative gain related to the Class B PFWs is dilutive and has been eliminated from the denominator for the period from the issuance date on May 4, 2022 through June 16, 2022, when the fair value of the Class B PFWs was reclassified to stockholders’ equity. (2) Represents the weighted average number of shares related to the 2021 PFWs discussed in Note 8 for the period from the issuance date on October 15, 2021 through June 30, 2022. (3) Represents the weighted average number of shares related to the Class A PFWs discussed in Note 8 for the period from the issuance date on May 4, 2022 through June 30, 2022. (4) Represents the weighted average number of shares related to the Class B PFWs discussed in Note 8 for the period when they became equity-classified on June 16, 2022 through June 30, 2022. (5) Represents the weighted average number of shares related to the Class B PFWs discussed in Note 7 during the period when they were liability-classified from the issuance date on May 4, 2022 through June 15, 2022. (6) Represents the number of PFWs that were outstanding for the entirety of the fiscal year ended June 30, 2023. As of June 30, 2023 and 2022, the following potential common stock equivalents were excluded from the calculation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands): 2023 2022 Stock options 8,745 8,506 Other warrants 888 1,150 Total 9,633 9,656 |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 12 Months Ended |
Jun. 30, 2023 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | NOTE 15 — 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 corroboration, 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 the measurement date. The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy classification of such fair values as of June 30, 2023. Fair Value Measurement of Assets as of June 30, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents: Money market funds $ 5,464 $ 5,464 $ — $ — Corporate commercial paper 4,481 4,481 Marketable debt securities: Corporate commercial paper 41,597 — 41,597 — U.S. Government agencies 26,394 — 26,394 — U.S. Government treasuries 10,404 10,404 — — Corporate notes and bonds 19,240 — 19,240 — Asset-backed securities 4,694 — 4,694 — Total $ 112,274 $ 20,349 $ 91,925 $ — Marketable debt securities classified as Level 2 within the valuation hierarchy generally consist of U.S. government agency securities, corporate bonds, and commercial paper. The Company determines the fair value of marketable debt securities based upon valuations obtained from third-party pricing sources. Except for the amounts shown in the table above, the Company did not have any other assets measured at fair value on a recurring basis as of June 30, 2023. As of June 30, 2022, the Company did not have any assets required to be measured at fair value on a recurring basis. The derivative liabilities for the authorized share deficiencies discussed in Note 7 were classified under Level 3. These liabilities were required to be measured at fair value on a recurring basis from May 4, 2022 until June 16, 2022. Key valuation assumptions are summarized in Note 7. The embedded derivative liabilities discussed in Note 6 were classified under Level 3 and were required to be measured at fair value on a recurring basis beginning on April 14, 2021. Fair value is determined using a discounted rate equal to the effective interest rate under the Loan Agreement and based on management’s assessment of the probability that an Exit Event will occur prior to April 13, 2031. The following table sets forth a summary of changes in the fair value of embedded derivative liabilities for which fair value was determined by Level 3 inputs for the fiscal years ended June 30, 2023 and 2022 (in thousands): 2023 2022 Fair value, beginning of period $ 407 $ 387 Loss from change in fair value, net 5 20 Fair value, end of period $ 412 $ 407 Except for embedded derivative liabilities, the Company did not have any other liabilities measured at fair value on a recurring basis as of June 30, 2023 and 2022. 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, 2023 and 2022. 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, 2023 and 2022, the Company did not have any 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 and investments in marketable debt securities. The Company maintains its cash in demand accounts at a high-quality financial institution. As of and for the fiscal years ended June 30, 2023 and 2022, cash deposits have exceeded the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation (“FDIC”). As of June 30, 2023, the Company has an aggregate of $54.0 million invested in marketable debt securities of issuers in the banking and financial services industries, and an aggregate of $26.5 million invested in marketable debt securities of a single agency of the U.S. government. While the Company’s investment policy requires investments in highly rated securities, a wide variety of broad economic factors and issuer-specific factors could result in credit agency downgrades below the Company’s minimum credit rating requirements that could result in losses regardless of whether the Company elects to sell the securities or hold them until maturity. On March 10, 2023, Silicon Valley Bank (“SVB”) was shut down, followed on March 11, 2023 by Signature Bank and on May 1, 2023 by First Republic Bank whereby the FDIC was appointed as receiver for each of those banks. Starting in January 2023, SVB Asset Management (“SAM”), a nonbank affiliate of SVB and a member of SVB Financial Group, provided investment services relating to the Company’s investment in marketable debt securities held in a segregated custodial account maintained by a third-party custodian, U.S. Bank. At the time of the closing of SVB, the Company had approximately $20.5 million in cash and certain cash equivalents in an Overnight Money Market Mutual Fund (“MMF”), for which SAM served as the investment advisor until April 13, 2023, when the MMF was liquidated and transferred to a similar investment under the control of a new investment advisor. The Company’s investment portfolio did not and currently does not contain any securities of SVB, and the Company did not have any deposit accounts with SVB. The Company does not believe it was or will be impacted by the closure of SVB and will continue to monitor the banking industry situation as it evolves. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2023 | |
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 developing transformative therapies for metabolic diseases related to chronic glucose imbalance. |
Consolidation | Consolidation The Company has two wholly owned subsidiaries consisting of Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
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”). 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 shareholders’ equity instead of net income (loss). For the fiscal year ended June 30, 2023, components of comprehensive loss included the Company’s net loss and unrealized gains (losses) on investments in marketable debt securities. For the fiscal year ended June 30, 2022, the only component of comprehensive loss was the Company’s net loss as the Company had no items constituting any other comprehensive income (loss). The Company’s Chief Executive Officer also serves as the Company’s chief operating decision maker 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, determination if other than temporary impairment exists for marketable debt securities, the fair value of derivative liabilities, |
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 discussed in Note 2. |
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, money market funds and corporate commercial paper purchased with a maturity of three months or less. |
Investments in Marketable Debt Securities | Investments in Marketable Debt Securities Under the investment policy approved by the Company’s Board of Directors, eligible investments in fixed income debt securities must be denominated and payable in U.S. dollars, including eligible corporate bonds, corporate commercial paper, U.S. government obligations, and money market funds. This investment policy only permits investments in the debt securities of issuers that meet stringent credit quality ratings on the date of the investment. The investment policy also places restrictions on the length of maturities and concentrations by type and issuer. The Company’s investments are issued by financial institutions that management believes are of high credit quality. However, they are exposed to credit risk in the event of default by the issuers. The Company classifies investments in marketable debt securities that mature in less than one year as short-term assets. For investments that mature in more than one year, the investments are classified as long-term assets unless management intends to liquidate the investments to fund current operations before the scheduled maturity dates. The Company accounts for its investments in marketable debt securities as available-for-sale securities whereby they are recorded in the consolidated balance sheet at fair value. Interest income is recognized in the consolidated statement of operations, consisting of accrued interest earned based on the coupon rate of the security, plus the impact of accreting discounts and amortizing premiums to maturity using the straight-line method which approximates the interest method. Unrealized gains and losses due to subsequent changes in fair value of the investments are reported in shareholders’ equity as a component of accumulated other comprehensive income (loss). The Company reviews the components of its portfolio of available-for-sale debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below amortized cost have resulted from a credit-related loss or other factors. If declines in fair value are due to a deterioration of credit quality of the issuer, the Company recognizes (i) a loss in other comprehensive income (loss) if the reduction in fair value is considered temporary, or (ii) a loss in the consolidated statement of operations if the reduction in fair value is considered other than temporary. For a decline in fair value that is solely due to changes in interest rates, impairment is not recognized if the Company has the ability and intent to hold the investment until maturity. The cost basis of any securities sold prior to maturity will be determined using the specific identification method. |
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 to determine 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 consist solely of office furniture and equipment that is recorded at cost. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the assets which range from 3 |
Debt Discounts and Issuance Costs | Debt Discounts and Issuance Costs Debt discounts and issuance costs (“DDIC”) incurred to obtain new debt financings or modify existing debt financings consist of incremental direct costs incurred for fees paid to the lender, professional fees and due diligence services. DDIC is presented as a reduction in the carrying value of the debt and is accreted to interest expense using the effective interest method. |
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. |
Share-Based Compensation | Share-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 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 share-based compensation. For stock options that are voluntarily surrendered by employees, all unrecognized compensation is immediately recognized in the period the options are cancelled. For stock options with vesting that is dependent on achieving certain market, performance and service conditions (“Hybrid Options”), the Company recognizes compensation expense over the requisite service period beginning on the date when the performance condition is considered probable of occurrence. 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. If the Hybrid Options do not ultimately become exercisable due to the failure of the option holder to achieve the requisite service period, any previously recognized compensation cost is reversed. However, if the Hybrid Options do not ultimately become exercisable due to the failure to achieve the market condition, previously recognized compensation cost will not be reversed. |
Embedded Derivatives | Embedded 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 would meet the definition of a derivative instrument, and if so whether the features are considered clearly and closely related to the primary economic characteristics 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 shareholders’ equity, then the embedded feature is bifurcated from the Host Contract and accounted for as a derivative liability. 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. |
Governmental Assistance | Governmental Assistance In response to the COVID-19 pandemic, the United States government designed programs to assist businesses in dealing with the financial hardships caused by the pandemic. The Company recognizes the right to receive governmental assistance payments in the period in which all necessary legal requirements have been met and other related conditions on which they depend are substantially met. |
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 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 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. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted average number of outstanding shares of common stock and pre-funded warrants that are accounted for as equity instruments. Common shares associated with pre-funded warrants are included in the computation of both basic and diluted net loss per share since the exercise price is negligible and all of the pre-funded warrants are fully vested and exercisable. To the extent dilutive, during periods in which pre-funded warrants are accounted for as derivative liabilities, the calculation of diluted net loss per share is further adjusted to eliminate gains on changes in the fair value of such pre-funded warrants, net of related discounts upon issuance, and the related pre-funded warrant shares are included in the weighted average number of shares outstanding Diluted net loss per share is computed using the treasury stock method by further giving effect to all potential shares of common stock, including stock options and warrants, to the extent dilutive. For participating warrants that are entitled to participate in dividend to holders of shares of common stock, the Company applies the two-class method of allocating earnings if the impact is dilutive for the calculation of both basic and diluted net loss per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Standard. In August 2020, FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). Standards Required to be Adopted in Future Years. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Financial Instruments- Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Other accounting standards that have been issued or proposed by 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. |
INVESTMENTS IN MARKETABLE DEB_2
INVESTMENTS IN MARKETABLE DEBT SECURITIES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Schedule of investments in marketable securities, including cash and cash equivalents | The estimated fair value of investments in marketable debt securities are classified as follows in the consolidated balance sheet as of June 30, 2023 (in thousands): 2023 Short-term investments $ 85,860 Long-term investments 16,470 Total investments $ 102,330 |
Schedule of cash and cash equivalents and marketable securities recorded at fair value | The following table summarizes the unrealized gains and losses that result in differences between the amortized cost basis and fair value of the Company’s marketable debt securities held as of June 30, 2023 (in thousands): Gross Unrealized Amortized Cost Gains Losses Fair Value Corporate commercial paper $ 41,670 $ — $ (73) $ 41,597 Obligations of U.S. government agencies 26,565 — (170) 26,395 U.S. Treasury obligations 10,416 2 (14) 10,404 Corporate notes and bonds 19,253 1 (14) 19,240 Asset-backed securities 4,777 — (83) 4,694 Available-for-sale investments $ 102,681 $ 3 $ (354) $ 102,330 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
LEASES | |
Schedule of carrying value of right-of-use assets and operating lease liabilities | As of June 30, 2023 and 2022, the carrying values of all of the Company’s right-of-use assets and operating lease liabilities were as follows (in thousands): 2023 2022 Right-of-use assets $ 2,054 $ 152 Operating lease liabilities: Current $ 541 $ 108 Long-term 1,937 80 Total $ 2,478 $ 188 |
Schedule of operating lease expense | For the fiscal years ended June 30, 2023 and 2022, operating lease expense was as follows (in thousands): 2023 2022 Research and development $ 453 $ 289 General and administrative 154 103 Total $ 607 $ 392 |
Schedule of future payments under operating lease agreements | Future payments under operating lease agreements as of June 30, 2023 are as follows (in thousands): Fiscal year ending June 30, 2024 $ 689 2025 627 2026 646 2027 666 Thereafter 224 Total lease payments 2,852 Less imputed interest (374) Present value of operating lease liabilities $ 2,478 |
DERIVATIVE LIABILITY FOR AUTH_2
DERIVATIVE LIABILITY FOR AUTHORIZED SHARE DEFICIENCIES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Class B Pre-Funded Warrants | |
Class of Warrant or Right [Line Items] | |
Schedule of the Fair Value Assumptions of Share Deficiencies | Fair value of the Class B PFWs was determined using the BSM option-pricing model with the following assumptions as of June 16, 2022: Market price of common stock $ 3.20 Exercise price $ 0.001 Risk-free interest rate 3.3 % Dividend rate 0.0 % Remaining expected term (years) 9.9 Historical volatility 95.0 % |
SHARE-BASED COMPENSATION AND _2
SHARE-BASED COMPENSATION AND WARRANTS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
SHARE-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 as of June 30, 2023 (in thousands): Plan Termination Number of Shares Description Date Authorized Outstanding Available 2015 Plan February 2020 17 17 — 2016 Plan October 2021 140 140 — 2019 Plan July 2029 200 200 — 2021 Plan March 2031 10,700 8,388 2,312 Total 11,057 8,745 2,312 |
Summary of the stock option plans | The following table sets forth a summary of the combined activity under all of the Company’s stock option plans for the fiscal years ended June 30, 2023 and 2022 (shares in thousands): 2023 2022 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 8,506 $ 5.24 9.7 1,285 $ 16.35 8.7 Grants to employees 740 2.00 7,373 3.51 Expired (116) 40.73 (78) 19.03 Forfeited (385) 3.75 (74) 9.72 Outstanding, end of fiscal year 8,745 4.56 8.8 8,506 5.24 9.7 Vested, end of fiscal year 2,676 6.57 8.4 685 18.63 7.5 (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 | The fair value of stock options was estimated on the dates of grant using the BSM option-pricing model, with the following weighted-average assumptions for the fiscal years ended June 30, 2023 and 2022: 2023 2022 Market price of common stock on grant date $ 3.73 $ 3.51 Expected volatility 91 % 94 % Risk free interest rate 3.7 % 3.1 % Expected term (years) 6.0 6.1 Dividend yield 0 % 0 % |
Schedule of share-based compensation expense | Share-based compensation expense is included under the following captions in the consolidated statements of operations for the fiscal years ended June 30, 2023 and 2022 (in thousands): 2023 2022 Research and development $ 3,243 $ 1,405 General and administrative 4,025 2,280 Total $ 7,268 $ 3,685 |
Schedule of warrant activity | Excluding the pre-funded warrants discussed above, the following table summarizes activity for all other warrants for the fiscal years ended June 30, 2023 and 2022 (shares in thousands): 2023 2022 Shares Price (1) Term (2) Shares Price (1) Term (2) Outstanding, beginning of fiscal year 1,150 $ 22.83 4.2 1,252 $ 28.91 4.8 Expirations (262) 25.32 (102) 97.79 Outstanding, end of fiscal year 888 22.10 3.5 1,150 22.83 4.2 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
Schedule of effective income tax rate reconciliation | For the fiscal years ended June 30, 2023 and 2022, 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 consolidated financial statements is as follows (in thousands): 2023 2022 Income tax benefit at statutory US federal rate $ 10,875 $ 8,622 Income tax benefit attributable to US states 3,468 3,151 Impact of reduction in Colorado tax rate (78) — Non-taxable derivative gains — 1,379 Non-deductible expenses (442) (527) Stock option expirations (921) (332) Other (399) 25 Change in valuation allowance (12,503) (12,318) Total income tax expense $ — $ — |
Schedule of deferred tax assets and liabilities | As of June 30, 2023 and 2022, the income tax effects of temporary differences that give rise to significant deferred income tax assets and liabilities are as follows (in thousands): 2023 2022 Deferred income tax assets: Net operating loss carryforwards $ 40,537 $ 38,361 Research and experimental costs 9,454 — Intangible assets 5,595 5,215 Share-based compensation 2,884 2,725 Operating lease liabilities 694 — Accrued expenses and other 603 293 Total deferred income tax assets 59,767 46,594 Valuation allowance for deferred income tax assets (59,192) (46,594) Deferred income tax assets, net of valuation allowance 575 — Deferred income tax liability right-of-use assets (575) — Net deferred income tax assets $ — $ — |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
SUPPLEMENTAL FINANCIAL INFORMATION | |
Schedule of cash and cash equivalents | Cash and cash equivalents consist of the following as of June 30, 2023 and 2022 (in thousands): 2023 2022 Demand deposits at a single financial institution $ 6,091 $ 150,410 Money market funds 5,464 — Commercial paper 4,481 — Total $ 16,036 $ 150,410 |
Summary of property and equipment | Property and equipment consisted of the following as of June 30, 2023 and 2022 (in thousands): 2023 2022 Office furniture and equipment $ 210 $ 56 Less accumulated depreciation (71) (40) Total $ 139 $ 16 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
NET LOSS PER SHARE | |
Schedule of basic and diluted net loss per share | Presented below are the calculations of the numerators and the denominators for basic and diluted net loss per share for the fiscal years ended June 30, 2023 and 2022 (in thousands except per share amounts): 2023 2022 Calculation of Numerators: Net loss for calculation of basic net loss per share $ (51,787) $ (41,060) Dilutive derivative gains, net of losses, related to Class B PFWs: Gain from change in fair value of derivative liability — (6,565) (1) Underwriting discount on issuance of derivative — 2,495 (1) Net loss for the calculation of diluted net loss per share $ (51,787) $ (45,130) Calculation of Denominators: Weighted Average number of common shares outstanding 36,605 16,254 Weighted average shares related to pre-funded warrants: 2021 PFWs 1,661 (6) 1,179 (2) Class A PFWs 1,974 (6) 314 (3) Class B PFWs 10,947 (6) 450 (4) Weighted average shares for basic net loss per share 51,187 18,197 Weighted average adjustment for Class B PFWs — 1,290 (5) Weighted average shares for diluted net loss per share 51,187 19,487 Net loss per share of common stock: Basic $ (1.01) $ (2.26) Diluted $ (1.01) $ (2.32) __________________ (1) For the calculation of diluted net loss per share, the net impact of the discount expense and the derivative gain related to the Class B PFWs is dilutive and has been eliminated from the denominator for the period from the issuance date on May 4, 2022 through June 16, 2022, when the fair value of the Class B PFWs was reclassified to stockholders’ equity. (2) Represents the weighted average number of shares related to the 2021 PFWs discussed in Note 8 for the period from the issuance date on October 15, 2021 through June 30, 2022. (3) Represents the weighted average number of shares related to the Class A PFWs discussed in Note 8 for the period from the issuance date on May 4, 2022 through June 30, 2022. (4) Represents the weighted average number of shares related to the Class B PFWs discussed in Note 8 for the period when they became equity-classified on June 16, 2022 through June 30, 2022. (5) Represents the weighted average number of shares related to the Class B PFWs discussed in Note 7 during the period when they were liability-classified from the issuance date on May 4, 2022 through June 15, 2022. (6) Represents the number of PFWs that were outstanding for the entirety of the fiscal year ended June 30, 2023. |
Summary of potential common stock equivalents were excluded from the computation of diluted net loss per share | As of June 30, 2023 and 2022, the following potential common stock equivalents were excluded from the calculation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands): 2023 2022 Stock options 8,745 8,506 Other warrants 888 1,150 Total 9,633 9,656 |
FINANCIAL INSTRUMENTS AND SIG_2
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Schedule of financial assets measured at fair value on a recurring basis | Fair Value Measurement of Assets as of June 30, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents: Money market funds $ 5,464 $ 5,464 $ — $ — Corporate commercial paper 4,481 4,481 Marketable debt securities: Corporate commercial paper 41,597 — 41,597 — U.S. Government agencies 26,394 — 26,394 — U.S. Government treasuries 10,404 10,404 — — Corporate notes and bonds 19,240 — 19,240 — Asset-backed securities 4,694 — 4,694 — Total $ 112,274 $ 20,349 $ 91,925 $ — |
Summary of changes in the fair value of the company's derivative liabilities, fair value, level 3 inputs | The following table sets forth a summary of changes in the fair value of embedded derivative liabilities for which fair value was determined by Level 3 inputs for the fiscal years ended June 30, 2023 and 2022 (in thousands): 2023 2022 Fair value, beginning of period $ 407 $ 387 Loss from change in fair value, net 5 20 Fair value, end of period $ 412 $ 407 |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Jun. 30, 2023 subsidiary | |
Number of Wholly Owned Subsidiaries | 2 |
Minimum | |
Estimated useful lives of the assets | 3 years |
Maximum | |
Estimated useful lives of the assets | 5 years |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Accumulated deficit | $ (260,985) | $ (209,198) | |
Net loss | (51,787) | (41,060) | |
Net cash used in operating activities | (44,481) | (39,616) | |
Cash and cash equivalents | 16,036 | 150,410 | |
Short-term investments in marketable debt securities | 85,860 | ||
Long-term investments in marketable debt securities | 16,470 | ||
Total liabilities | 7,549 | 2,949 | |
Current liabilities | 5,200 | $ 2,462 | |
XOMA (US) LLC | Phase 3 Clinical Trial RZ 358 | Xoma License Agreement | Plan | |||
Milestone closing payment | $ 5,000 | $ 5,000 |
INVESTMENTS IN MARKETABLE DEB_3
INVESTMENTS IN MARKETABLE DEBT SECURITIES - Investments in marketable securities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Short-term investments in marketable debt securities | $ 85,860 |
Long-term investments in marketable debt securities | 16,470 |
Total investments | $ 102,330 |
INVESTMENTS IN MARKETABLE DEB_4
INVESTMENTS IN MARKETABLE DEBT SECURITIES - Additional Information (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Debt securities, available-for-sale, term | 2 years |
Debt securities, available-for-sale, weighted average term | 1 year |
Short-term investments in marketable debt securities | $ 85,860 |
Long-term investments in marketable debt securities | 16,470 |
Proceeds from sale of debt securities | 0 |
Interest receivable | $ 300 |
INVESTMENTS IN MARKETABLE DEB_5
INVESTMENTS IN MARKETABLE DEBT SECURITIES - Cash and cash equivalents and marketable securities held (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | $ 102,681 |
Gross Unrealized Gains | 3 |
Gross Unrealized Losses | (354) |
Fair Value | 102,330 |
Corporate commercial paper | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 41,670 |
Gross Unrealized Losses | (73) |
Fair Value | 41,597 |
Obligations of U.S. government agencies | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 26,565 |
Gross Unrealized Losses | (170) |
Fair Value | 26,395 |
U.S. Treasury obligations | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 10,416 |
Gross Unrealized Gains | 2 |
Gross Unrealized Losses | (14) |
Fair Value | 10,404 |
Corporate notes and bonds | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 19,253 |
Gross Unrealized Gains | 1 |
Gross Unrealized Losses | (14) |
Fair Value | 19,240 |
Asset-backed securities | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 4,777 |
Gross Unrealized Losses | (83) |
Fair Value | $ 4,694 |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2022 USD ($) ft² | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Total base rent payments | $ 2,852 | ||
Right-of-use assets | 2,054 | $ 152 | |
Operating lease liabilities, net of current portion | $ 1,937 | $ 80 | |
Weighted average remaining lease term under operating leases | 4 years 3 months 18 days | ||
Weighted average discount rate for operating lease liabilities | 6.80% | ||
Corporate Headquarters | |||
Property, Plant and Equipment [Line Items] | |||
Lease space | ft² | 9,300 | ||
Total base rent payments | $ 2,900 | ||
Abatement period | 6 months | ||
Lease provided an allowance for the purchase of furniture and equipment | $ 100 | ||
Operating lease term of contract | 60 months | ||
Average base rent payable in cash | $ 48,000 | ||
Right-of-use assets | 2,300 | ||
Operating lease liabilities, net of current portion | $ 2,200 |
LEASES - Assets and operating l
LEASES - Assets and operating lease liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Carrying value of right-of-use assets and operating lease liabilities | ||
Right-of-use assets, net | $ 2,054 | $ 152 |
Operating lease liabilities: | ||
Current | 541 | 108 |
Long-term | 1,937 | 80 |
Total | $ 2,478 | $ 188 |
LEASES - Operating lease expens
LEASES - Operating lease expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 607 | $ 392 |
Research and development | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | 453 | 289 |
General and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 154 | $ 103 |
LEASES - Future Operating Lease
LEASES - Future Operating Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Future lease payments related to operating lease agreements | ||
2024 | $ 689 | |
2025 | 627 | |
2026 | 646 | |
2027 | 666 | |
Thereafter | 224 | |
Total lease payments | 2,852 | |
Less imputed interest | (374) | |
Present value of operating lease liabilities | $ 2,478 | $ 188 |
LICENSE AGREEMENTS (Details)
LICENSE AGREEMENTS (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2023 | Jan. 31, 2022 | Dec. 31, 2020 | Aug. 31, 2017 | Jun. 30, 2023 | |
XOMA (US) LLC [Member] | Xoma License Agreement [Member] | Upon Clinical and Regulatory Milestones | Maximum | |||||
License Agreements | |||||
Milestone closing payment | $ 35 | ||||
XOMA (US) LLC [Member] | Xoma License Agreement [Member] | After Clinical and Regulatory Milestones | Maximum | |||||
License Agreements | |||||
Milestone closing payment | 185 | ||||
XOMA (US) LLC [Member] | Phase 2 Clinical Trial RZ358 | Xoma License Agreement [Member] | |||||
License Agreements | |||||
Milestone closing payment | 2 | ||||
XOMA (US) LLC [Member] | Phase 3 Clinical Trial RZ 358 | Xoma License Agreement [Member] | Plan | |||||
License Agreements | |||||
Milestone closing payment | $ 5 | $ 5 | |||
ActiveSite Pharmaceuticals, Inc | |||||
License Agreements | |||||
Royalties percentage | 2% | ||||
ActiveSite Pharmaceuticals, Inc | Development And License Agreement [Member] | Plan | Maximum | |||||
License Agreements | |||||
Maximum Amount of Milestone Events | $ 46.5 | ||||
ActiveSite Pharmaceuticals, Inc | Phase 1 Clinical Trial RZ402 | Development And License Agreement [Member] | |||||
License Agreements | |||||
Milestone closing payment | $ 1 | ||||
ActiveSite Pharmaceuticals, Inc | Phase 2 Clinical Trial RZ402 | Development And License Agreement [Member] | |||||
License Agreements | |||||
Milestone closing payment | $ 3 | ||||
ActiveSite Pharmaceuticals, Inc | Phase 3 Clinical Trial RZ 402 | Development And License Agreement [Member] | Plan | |||||
License Agreements | |||||
Milestone closing payment | $ 5 |
EMBEDDED DERIVATIVE LIABILITY (
EMBEDDED DERIVATIVE LIABILITY (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Apr. 14, 2021 | Jun. 30, 2022 | Jun. 30, 2023 | |
Debt Instrument [Line Items] | |||
Repayments of debt | $ 16,013 | ||
Debt instrument prepayment fee amount | 300 | ||
Loss on extinguishment of debt | (1,771) | ||
Loss on extinguishment of debt, unaccreted discount | (1,471) | ||
Embedded derivative liabilities | 407 | $ 412 | |
Loan and security agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 30,000 | ||
Gross proceeds from issuance of debt | $ 15,000 | ||
Exit fee on the funded principal balance | 4% | ||
Embedded derivative liabilities | 400 | $ 400 | |
Exit fee amount | $ 600 | ||
Percentage of entity's shares held by investors | 35% | ||
Term A loan | Loan and security agreement | |||
Debt Instrument [Line Items] | |||
Repayments of debt | 16,000 | ||
Repayments of debt, principal balance | 15,000 | ||
Repayments of debt, final fee | 700 | ||
Debt instrument prepayment fee amount | 300 | ||
Loss on extinguishment of debt | (1,800) | ||
Loss on extinguishment of debt, unaccreted discount | $ (1,500) | ||
Prepayment fee | 2% |
DERIVATIVE LIABILITY FOR AUTH_3
DERIVATIVE LIABILITY FOR AUTHORIZED SHARE DEFICIENCIES - Deficiency Triggered by Issuance of Class B Pre-Funded Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Jun. 16, 2022 | May 04, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 15, 2022 | May 31, 2022 | Jun. 30, 2021 | |
Class of Warrant or Right [Line Items] | |||||||
Warrants outstanding (In shares) | 1,150,000 | 888,000 | 1,252,000 | ||||
Warrant price (per share) | $ 22.83 | $ 22.10 | $ 28.91 | ||||
Embedded derivative liabilities | $ 407 | $ 412 | |||||
Common stock, shares authorized | 100,000,000 | 40,000,000 | 100,000,000 | 100,000,000 | 40,000,000 | ||
Adjustment To Additional Paid In Capital, Reclassification Of Derivative Liability For Authorized Share Deficiency | $ (35,025) | ||||||
Class B Pre-Funded Warrants | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrants outstanding (In shares) | 10,947,371 | ||||||
Warrants outstanding | $ 41,600 | ||||||
Proceeds from warrants issued | $ 39,094 | ||||||
Warrant price (per share) | $ 0.001 | $ 3.80 | |||||
Embedded derivative liabilities | $ 35,000 | $ 41,600 | |||||
Fair value of warrant per share | $ 3.20 | ||||||
Underwriters discount expensed | $ 2,500 | ||||||
Unrealized gain (loss) on derivatives | $ 6,600 | ||||||
Adjustment To Additional Paid In Capital, Reclassification Of Derivative Liability For Authorized Share Deficiency | $ (35,000) |
DERIVATIVE LIABILITY FOR AUTH_4
DERIVATIVE LIABILITY FOR AUTHORIZED SHARE DEFICIENCIES - Weighted-Average Assumption for Valuations of Class B Pre-Funded Warrants (Details) - $ / shares | 12 Months Ended | |||
Jun. 16, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||
Risk-free interest rate | 3.70% | 3.10% | ||
Dividend rate | 0% | 0% | ||
Remaining contractual term (years) | 8 years 9 months 18 days | 9 years 8 months 12 days | 8 years 8 months 12 days | |
Market price of common stock | Class B Pre-Funded Warrants | ||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||
Market price of Common Stock | $ 3.20 | |||
Exercise price | Class B Pre-Funded Warrants | ||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||
Exercise price | $ 0.001 | |||
Risk-free interest rate | Class B Pre-Funded Warrants | ||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||
Risk-free interest rate | 3.30% | |||
Dividend rate | Class B Pre-Funded Warrants | ||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||
Dividend rate | 0% | |||
Remaining contractual term (years) | Class B Pre-Funded Warrants | ||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||
Remaining contractual term (years) | 9 years 10 months 24 days | |||
Historical volatility | Class B Pre-Funded Warrants | ||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||
Historical volatility | 95% |
SHAREHOLDERS' EQUITY - Changes
SHAREHOLDERS' EQUITY - Changes in Authorized Capital Stock (Details) - shares shares in Thousands | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 16, 2022 | Jun. 15, 2022 | May 04, 2022 |
SHAREHOLDERS' EQUITY | |||||
Common Stock, Shares Authorized | 100,000 | 100,000 | 100,000 | 40,000 | 40,000 |
Preferred Stock, Shares Authorized | 400 | 400 |
SHAREHOLDERS' EQUITY - May 2022
SHAREHOLDERS' EQUITY - May 2022 Registered Direct Offering (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||||
May 04, 2022 | May 01, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | May 31, 2022 | Jun. 30, 2021 | |
Class of Stock [Line Items] | ||||||
Warrant price (per share) | $ 22.83 | $ 22.10 | $ 28.91 | |||
Class A Warrants | ||||||
Class of Stock [Line Items] | ||||||
Warrant price (per share) | 0.001 | |||||
Class B Warrants | ||||||
Class of Stock [Line Items] | ||||||
Warrant price (per share) | $ 0.001 | $ 3.80 | ||||
2022 Registered Direct Offering | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock for cash | $ 117,600 | $ 64,390 | ||||
Gross proceeds from issuance of common stock for cash (in shares) | 18 | 18 | ||||
Shares issue price | $ 3.80 | |||||
Underwriting discounts and commissions expense | $ 7,100 | |||||
Professional fees and offering costs | 400 | |||||
Gross proceeds from sale of equity | $ 110,500 | |||||
2022 Registered Direct Offering | Class A Warrants | ||||||
Class of Stock [Line Items] | ||||||
Pre-funded warrants to purchase shares of common stock | 2 | |||||
Warrant price (per share) | $ 3.799 | |||||
2022 Registered Direct Offering | Class A Warrants | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Pre-funded warrants to purchase shares of common stock | 2 | |||||
2022 Registered Direct Offering | Class B Warrants | ||||||
Class of Stock [Line Items] | ||||||
Warrant price (per share) | $ 3.799 | |||||
2022 Registered Direct Offering | Class B Warrants | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Pre-funded warrants to purchase shares of common stock | 10.9 |
SHAREHOLDERS' EQUITY - 2022 Pri
SHAREHOLDERS' EQUITY - 2022 Private Placement (Details) - 2022 Private Placement - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 12 Months Ended | |
May 04, 2022 | Jul. 31, 2022 | Jun. 30, 2023 | |
Class of Stock [Line Items] | |||
Gross proceeds from issuance of common stock for cash (in shares) | 3.2 | 3.2 | |
Shares issue price | $ 3.80 | ||
Proceeds from Issuance of Common Stock | $ 12,300 | $ 12,330 | |
Underwriting discounts and commissions expense | 800 | ||
Proceeds From Issuance Of Common Stock, Net Of Underwriting Discounts And Commissions | $ 11,600 |
SHAREHOLDERS' EQUITY - 2022 Pre
SHAREHOLDERS' EQUITY - 2022 Pre-Funded Warrants (Details) - $ / shares | Jun. 30, 2023 | Jun. 30, 2022 | May 01, 2022 | Jun. 30, 2021 |
Class of Stock [Line Items] | ||||
Warrant price (per share) | $ 22.10 | $ 22.83 | $ 28.91 | |
2022 Pre-Funded Warrants | ||||
Class of Stock [Line Items] | ||||
Warrant price (per share) | $ 3.799 | |||
Fee amount per share | $ 0.001 | |||
Warrants exercised | 0 |
SHAREHOLDERS' EQUITY - Required
SHAREHOLDERS' EQUITY - Required Shareholder Approval (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Jun. 16, 2022 | May 04, 2022 | May 01, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 15, 2022 | May 31, 2022 | Jun. 30, 2021 | |
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized | 100,000,000 | 40,000,000 | 100,000,000 | 100,000,000 | 40,000,000 | |||
Warrants outstanding (In shares) | 1,150,000 | 888,000 | 1,252,000 | |||||
Reclassification of derivative liability to equity upon cure of authorized share deficiency | $ (35,025) | |||||||
Class A Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from warrants issued | 7,048 | |||||||
Class B Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Warrants outstanding (In shares) | 10,947,371 | |||||||
Unrealized gain (loss) on derivatives | $ 6,600 | |||||||
Reclassification of derivative liability to equity upon cure of authorized share deficiency | $ (35,000) | |||||||
Warrants outstanding | $ 41,600 | |||||||
Proceeds from warrants issued | $ 39,094 | |||||||
Registered Direct Offering 2022 | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued | 18,000,000 | 18,000,000 | ||||||
Registered Direct Offering 2022 | Class A Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Pre-funded warrants to purchase shares of common stock | 2,000,000 | |||||||
Registered Direct Offering 2022 | Class B Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Warrants outstanding (In shares) | 10,900,000 | |||||||
Warrants exercised | 0 | |||||||
Warrants outstanding | $ 41,600 |
SHAREHOLDERS' EQUITY - Registra
SHAREHOLDERS' EQUITY - Registration Rights Agreement (Details) - Registered Direct Offering 2022 - Class B Warrants $ in Millions | Jul. 01, 2022 USD ($) |
Class of Stock [Line Items] | |
Percentage of liquidation damages payable if company does not obtain stockholders approval | 2% |
Liquidation damages payable if company does not obtain stockholders approval | $ 0.8 |
SHAREHOLDERS' EQUITY - 2021 Und
SHAREHOLDERS' EQUITY - 2021 Underwritten Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 27, 2021 | Oct. 15, 2021 | Nov. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2021 | |
Class of Stock [Line Items] | ||||||
Warrant price (per share) | $ 22.83 | $ 22.10 | $ 28.91 | |||
2021 Pre-Funded Warrants. | ||||||
Class of Stock [Line Items] | ||||||
Warrant price (per share) | $ 0.01 | $ 0.01 | ||||
Proceeds from warrants issued | $ 10,783 | |||||
Underwritten Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Gross proceeds from issuance of common stock for cash (in shares) | 6,030,847 | 116,266 | ||||
Sale of stock, price per share | $ 6.50 | |||||
Proceeds from issuances of common stock | $ 39,200 | $ 800 | 39,956 | |||
Gross proceeds from sale of equity | $ 50,000 | |||||
Underwriting discounts and commissions ( In percentage) | 6% | |||||
Other offering costs | $ 300 | |||||
Underwriting Discounts And Commissions Expense | 3,300 | |||||
Net cash proceeds | $ 46,700 | |||||
Underwriters option period | 30 days | |||||
Maximum number of additional shares issued | 1,153,845 | |||||
Underwritten Public Offering | 2021 Pre-Funded Warrants. | ||||||
Class of Stock [Line Items] | ||||||
Warrants granted (In shares) | 1,661,461 | |||||
Number of shares of common stock called by warrants issued | 1,661,461 | 1,661,461 | ||||
Warrant price (per share) | $ 6.49 | |||||
Proceeds from warrants issued | $ 10,800 | $ 10,800 | $ 10,800 |
SHAREHOLDERS' EQUITY - 2021 Pre
SHAREHOLDERS' EQUITY - 2021 Pre-Funded Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Class of Stock [Line Items] | |||
Warrant price (per share) | $ 22.10 | $ 22.83 | $ 28.91 |
2021 Pre-Funded Warrants. | |||
Class of Stock [Line Items] | |||
Warrant price (per share) | $ 0.01 | $ 0.01 | |
Proceeds from warrants issued | $ 10,783 | ||
Minimum Period For Increase Or Decrease In Ownership Percentage | 61 days | ||
Warrants exercised | 0 | ||
2021 Pre-Funded Warrants. | Maximum | |||
Class of Stock [Line Items] | |||
Warrants Designated Percentage Elected By Holder | 19.99% | ||
2021 Pre-Funded Warrants. | Minimum | |||
Class of Stock [Line Items] | |||
Warrants Designated Percentage Elected By Holder | 4.99% |
SHAREHOLDERS' EQUITY - 2021 Reg
SHAREHOLDERS' EQUITY - 2021 Registered Direct Offering (Details) - 2021 Registered Direct Offering - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Oct. 27, 2021 | Jun. 30, 2022 | |
Class of Stock [Line Items] | ||
Number of shares issued | 769,231 | |
Sale of stock, price per share | $ 6.50 | |
Proceeds from issuance of common stock | $ 5,000 | $ 5,000 |
SHAREHOLDERS' EQUITY - Terminat
SHAREHOLDERS' EQUITY - Termination of EDA and Purchase Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Jun. 30, 2022 | |
Equity Distribution Agreement | |||
Class of Stock [Line Items] | |||
Gross proceeds from issuance of common stock for cash (in shares) | 138,388 | ||
Proceeds from Issuance of Common Stock | $ 1,500 | $ 1,519 | |
LPC Purchase Agreement | |||
Class of Stock [Line Items] | |||
Gross proceeds from issuance of common stock for cash (in shares) | 115,708 | ||
Proceeds from Issuance of Common Stock | $ 1,200 | $ 1,172 | |
Issuance of commitment shares (in shares) | 33,799 |
SHARE-BASED COMPENSATION AND _3
SHARE-BASED COMPENSATION AND WARRANTS - Stock Option Plans (Details) shares in Thousands | Jun. 30, 2023 item shares | Jun. 30, 2022 shares | Jun. 16, 2022 shares | Jun. 30, 2021 shares | May 26, 2021 shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of active stock option plans | item | 1 | ||||
Number of shares authorized | 11,057 | ||||
Number of shares outstanding | 8,745 | 8,506 | 1,285 | ||
Number of shares available | 2,312 | ||||
2015 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 17 | ||||
Number of shares outstanding | 17 | ||||
2016 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 140 | ||||
Number of shares outstanding | 140 | ||||
2019 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 200 | ||||
Number of shares outstanding | 200 | ||||
2021 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized | 10,700 | 10,700 | 1,200 | ||
Number of shares outstanding | 8,388 | ||||
Number of shares available | 2,312 |
SHARE-BASED COMPENSATION AND _4
SHARE-BASED COMPENSATION AND WARRANTS - Stock Options Outstanding (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Number of Options | |||
Outstanding, beginning of fiscal year | 8,506 | 1,285 | |
Granted | 700 | 7,400 | |
Expired | (116) | (78) | |
Forfeited | (385) | (74) | |
Outstanding, end of fiscal year | 8,745 | 8,506 | 1,285 |
Vested, end of fiscal year | 2,676 | 685 | |
Weighted Average Exercise Price | |||
Outstanding, beginning of fiscal year | $ 5.24 | $ 16.35 | |
Expired | 40.73 | 19.03 | |
Forfeited | 3.75 | 9.72 | |
Outstanding, end of fiscal year | 4.56 | 5.24 | $ 16.35 |
Vested, end of fiscal year | $ 6.57 | $ 18.63 | |
Weighted Average Remaining Contractual Life | |||
Remaining contractual term (years) | 8 years 9 months 18 days | 9 years 8 months 12 days | 8 years 8 months 12 days |
Vested | 8 years 4 months 24 days | 7 years 6 months | |
Employees | |||
Number of Options | |||
Granted | 740 | 7,373 | |
Weighted Average Exercise Price | |||
Granted | $ 2 | $ 3.51 |
SHARE-BASED COMPENSATION AND _5
SHARE-BASED COMPENSATION AND WARRANTS - Weighted Average Assumptions (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
SHARE-BASED COMPENSATION AND WARRANTS | ||
Market price of common stock on grant date | $ 3.73 | $ 3.51 |
Expected volatility | 91% | 94% |
Risk free interest rate | 3.70% | 3.10% |
Expected term (years) | 6 years | 6 years 1 month 6 days |
Dividend yield | 0% | 0% |
SHARE-BASED COMPENSATION AND _6
SHARE-BASED COMPENSATION AND WARRANTS - Share Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | $ 7,268 | $ 3,685 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | 3,243 | 1,405 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | $ 4,025 | $ 2,280 |
SHARE-BASED COMPENSATION AND _7
SHARE-BASED COMPENSATION AND WARRANTS - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Oct. 27, 2021 | Oct. 15, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | May 31, 2022 | May 01, 2022 | Jun. 30, 2021 | Oct. 09, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants outstanding, beginning of fiscal year (In shares) | 1,150,000 | 1,252,000 | ||||||
Warrant expirations (In shares) | (262,000) | (102,000) | ||||||
Warrants outstanding, end of fiscal year (In shares) | 888,000 | 1,150,000 | ||||||
Warrant expirations (in dollars per share) | $ 25.32 | $ 97.79 | ||||||
Warrant price (per share) | $ 22.10 | $ 22.83 | $ 28.91 | |||||
Weighted average remaining contractual term | 3 years 6 months | 4 years 2 months 12 days | 4 years 9 months 18 days | |||||
Warrants granted or exercised | 0 | 0 | ||||||
2021 Pre-Funded Warrants. | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Proceeds from warrants issued | $ 10,783 | |||||||
Warrant price (per share) | $ 0.01 | $ 0.01 | ||||||
2021 Pre-Funded Warrants. | 2021 Underwritten Public Offering | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Pre-funded warrants to purchase shares of common stock | 1,661,461 | 1,661,461 | ||||||
Shares issue price | $ 6.49 | |||||||
Proceeds from warrants issued | $ 10,800 | $ 10,800 | $ 10,800 | |||||
Warrants granted (In shares) | 1,661,461 | |||||||
Warrant price (per share) | $ 6.49 | |||||||
2022 Pre-Funded Warrants | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Pre-funded warrants to purchase shares of common stock | 12,921,055 | |||||||
Shares issue price | $ 3.799 | |||||||
Warrant price (per share) | $ 3.799 | |||||||
Class A Warrants | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Proceeds from warrants issued | 7,048 | |||||||
Warrants granted (In shares) | 1,973,684 | |||||||
Warrant price (per share) | $ 0.001 | |||||||
Class B Warrants | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Proceeds from warrants issued | $ 39,094 | |||||||
Warrants granted (In shares) | 10,947,371 | |||||||
Warrant price (per share) | $ 0.001 | $ 3.80 | ||||||
Participating Warrants [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Pre-funded warrants to purchase shares of common stock | 800,000 | |||||||
Warrant price (per share) | $ 19.50 | |||||||
Weighted average remaining contractual term | 7 years |
SHARE-BASED COMPENSATION AND _8
SHARE-BASED COMPENSATION AND WARRANTS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 16, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 700,000 | 7,400,000 | ||
Weighted average grant date fair value, granted | $ 1.53 | $ 2.72 | ||
Estimated fair value of stock options | $ 1.1 | $ 20.1 | ||
Warrant price (per share) | $ 22.10 | $ 22.83 | $ 28.91 | |
Time-based vesting | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, stock options | $ 16.9 | |||
Expected to be recognized over a remaining weighted average period | 2 years 9 months 18 days | |||
Hybrid Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, stock options | $ 0.1 | |||
Expected to be recognized over a remaining weighted average period | 1 year 1 month 6 days | |||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for purchase | 500,000 | |||
Shares purchases | 0 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
Increase in valuation allowance | $ 12.5 |
Domestic Tax Authority | UNITED STATES | |
Operating Loss Carryforwards | 153.2 |
Operating loss carryforwards, subject to limitations | 33.4 |
Operating loss carryforwards, subject to no limitations | 119.8 |
Operating loss carryforward not subject to expiration available to offset taxable income | 17.1 |
Operating loss carryforward, not subject to expiration, available to reduce future taxable income | 81.4 |
Domestic Tax Authority | Expiration in 2031 Through 2035 | UNITED STATES | |
Operating loss carryforward subject to expiration available to offset taxable income | 7.9 |
Domestic Tax Authority | Available Through Fiscal Year 2038 And Expires By June 30, 2038 | UNITED STATES | |
Operating loss carryforward subject to expiration available to offset taxable income | 13.4 |
Domestic Tax Authority | Not Subject To Expiry And Available For Use Over 2038 And Thereafter Years | UNITED STATES | |
Operating loss carryforward, not subject to expiration, available for use to reduce future taxable income | 15.6 |
Operating loss carryforward per year not subject to expiration, available for use to reduce future taxable income | $ 1.2 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Income tax benefit at statutory US federal rate | $ 10,875 | $ 8,622 |
Income tax benefit attributable to US states | 3,468 | 3,151 |
Impact of reduction in Colorado tax rate | (78) | 0 |
Non-taxable derivative gains | 1,379 | |
Non-deductible expenses | (442) | (527) |
Stock option expirations | (921) | (332) |
Other | (399) | 25 |
Change in valuation allowance | (12,503) | (12,318) |
Total income tax expense | $ 0 | $ 0 |
INCOME TAXES - Deferred Income
INCOME TAXES - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Deferred income tax assets: | ||
Net operating loss carryforwards | $ 40,537 | $ 38,361 |
Research and experimental costs | 9,454 | 0 |
Intangible assets | 5,595 | 5,215 |
Share-based compensation | 2,884 | 2,725 |
Operating lease liabilities | 694 | 0 |
Accrued expenses and other | 603 | 293 |
Total deferred income tax assets | 59,767 | 46,594 |
Valuation allowance for deferred income tax assets | (59,192) | (46,594) |
Net deferred income tax assets | 575 | 0 |
Deferred tax liabilities | ||
Deferred income tax liability right-of-use assets | (575) | 0 |
Net deferred income tax assets | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended | |
Jun. 30, 2023 USD ($) employee item | Jun. 30, 2022 USD ($) | |
Commitments And Contingencies [Line Items] | ||
Employer matching contributions (as a percent) | 4% | |
Total contributions by the company | $ 0.3 | $ 0.2 |
Employment Agreements | ||
Commitments And Contingencies [Line Items] | ||
Number of officers | item | 2 | |
Number of employee | employee | 1 | |
Aggregate annual base salaries | $ 1.4 | |
Severance payment based on term of salary | 12 months | |
Term of health insurance coverage other than change in control event | 12 months | |
Unvested stock options, vesting period, change in control event | 12 months | |
Unvested stock options, exercisable period, change in control event | 6 months | |
Severance payment based on term of salary, change of control event | 18 months | |
Term of health insurance coverage, change in control | 18 months | |
Employment Agreements | Minimum | ||
Commitments And Contingencies [Line Items] | ||
Vesting period, change in control event | 12 months | |
Exercisable period, change in control event and without cause | 6 months | |
Exercisable period, change in control event | 6 months | |
Employment Agreements | Maximum | ||
Commitments And Contingencies [Line Items] | ||
Vesting period, change in control event | 18 months | |
Exercisable period, change in control event and without cause | 12 months | |
Exercisable period, change in control event | 12 months |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |||||||
May 04, 2022 | May 01, 2022 | Oct. 15, 2021 | Sep. 15, 2020 | Jun. 30, 2023 | Jun. 30, 2022 | May 31, 2022 | Jun. 30, 2021 | |
Related Party Transaction [Line Items] | ||||||||
Warrant price (per share) | $ 22.10 | $ 22.83 | $ 28.91 | |||||
2021 Pre-Funded Warrants | ||||||||
Related Party Transaction [Line Items] | ||||||||
Warrant price (per share) | 0.01 | $ 0.01 | ||||||
Class B Pre-Funded Warrants | ||||||||
Related Party Transaction [Line Items] | ||||||||
Warrant price (per share) | $ 0.001 | $ 3.80 | ||||||
Warrants outstanding | $ 41,600,000 | |||||||
Registered Direct Offering 2022 | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued | 18,000,000 | 18,000,000 | ||||||
Issuance of common stock for cash | $ 117,600,000 | $ 64,390,000 | ||||||
Shares issue price | $ 3.80 | |||||||
Registered Direct Offering 2022 | Class B Pre-Funded Warrants | ||||||||
Related Party Transaction [Line Items] | ||||||||
Warrant price (per share) | $ 3.799 | |||||||
Warrants outstanding | $ 41,600,000 | |||||||
Related Party [Member] | Directors and officers | Registered Direct Offering 2022 | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued | 111,840 | |||||||
Issuance of common stock for cash | $ 400,000 | |||||||
Shares issue price | $ 3.80 | |||||||
Related Party [Member] | Affiliated investors | 2021 Pre-Funded Warrants | ||||||||
Related Party Transaction [Line Items] | ||||||||
Pre-funded warrants to purchase shares of common stock | 123,000 | |||||||
Warrant price (per share) | $ 6.49 | |||||||
Warrants outstanding | $ 800,000 | |||||||
Related Party [Member] | Affiliated investors | Registered Direct Offering | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued | 1,930,000 | |||||||
Issuance of common stock for cash | $ 12,500,000 | |||||||
Shares issue price | $ 6.50 | |||||||
Related Party [Member] | Affiliated investors | Registered Direct Offering 2022 | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued | 3,421,052 | |||||||
Issuance of common stock for cash | $ 12,200,000 | |||||||
Shares issue price | $ 3.80 | |||||||
Related Party [Member] | Affiliated investors | Registered Direct Offering 2022 | Class B Pre-Funded Warrants | ||||||||
Related Party Transaction [Line Items] | ||||||||
Pre-funded warrants to purchase shares of common stock | 3,421,053 | |||||||
Warrant price (per share) | $ 3.799 | |||||||
Warrants outstanding | $ 12,200,000 | |||||||
Related Party [Member] | Handok License Agreement | Handok, Inc. | ||||||||
Related Party Transaction [Line Items] | ||||||||
License term (in years) | 20 years | |||||||
Milestone payments | $ 500,000 | |||||||
Transfer price (in percent) | 70% | |||||||
Milestone payments earned | $ 0 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 16,036 | $ 150,410 |
Demand deposits at a single financial institution | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 6,091 | $ 150,410 |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 5,464 | |
Commercial paper | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 4,481 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
SUPPLEMENTAL FINANCIAL INFORMATION | ||
Office furniture and equipment | $ 210,000 | $ 56,000 |
Less accumulated depreciation | (71,000) | (40,000) |
Total | 139,000 | 16,000 |
Depreciation expense related to property and equipment | $ 30,000 | $ 13,000 |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Calculation of Numerators: | ||
Net loss for calculation of basic net loss per share | $ (51,787) | $ (41,060) |
Gain from change in fair value of derivative liability | (6,565) | |
Underwriting discount on issuance of derivative | 2,495 | |
Net loss for the calculation of diluted net loss per share | $ (51,787) | $ (45,130) |
Calculation of Denominators: | ||
Weighted average shares for basic net loss per share | 51,187 | 18,197 |
Weighted average shares for diluted net loss per share | 51,187 | 19,487 |
Net loss per share of common stock - basic (in dollars per share) | $ (1.01) | $ (2.26) |
Net loss per share of common stock - diluted (in dollars per share) | $ (1.01) | $ (2.32) |
2021 Pre-Funded Warrants | ||
Calculation of Denominators: | ||
Weighted average shares for basic net loss per share | 1,661 | 1,179 |
Class A Warrants | ||
Calculation of Denominators: | ||
Weighted average shares for basic net loss per share | 1,974 | 314 |
Class B Warrants | ||
Calculation of Denominators: | ||
Weighted average shares for basic net loss per share | 10,947 | 450 |
Weighted average adjustment | 1,290 | |
Common Stock | ||
Calculation of Denominators: | ||
Weighted average shares for basic net loss per share | 36,605 | 16,254 |
NET LOSS PER SHARE - Anti-dilut
NET LOSS PER SHARE - Anti-dilutive (Details) - shares shares in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
NET LOSS PER SHARE | ||
Total | 9,633 | 9,656 |
Stock options | ||
NET LOSS PER SHARE | ||
Total | 8,745 | 8,506 |
Other warrants | ||
NET LOSS PER SHARE | ||
Total | 888 | 1,150 |
FINANCIAL INSTRUMENTS AND SIG_3
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Fair value on a recurring basis (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | $ 102,330 |
Recurring | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Financial assets measured at fair value | 112,274 |
Recurring | Money market funds | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Cash and cash equivalents | 5,464 |
Recurring | Corporate commercial paper | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Cash and cash equivalents | 4,481 |
Marketable debt securities | 41,597 |
Recurring | U.S. Government agencies | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 26,394 |
Recurring | U.S. Government treasuries | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 10,404 |
Recurring | Corporate notes and bonds | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 19,240 |
Recurring | Asset-backed securities | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 4,694 |
Recurring | Level 1 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Financial assets measured at fair value | 20,349 |
Recurring | Level 1 | Money market funds | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Cash and cash equivalents | 5,464 |
Recurring | Level 1 | Corporate commercial paper | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Cash and cash equivalents | 4,481 |
Recurring | Level 1 | U.S. Government treasuries | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 10,404 |
Recurring | Level 2 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Financial assets measured at fair value | 91,925 |
Recurring | Level 2 | Corporate commercial paper | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 41,597 |
Recurring | Level 2 | U.S. Government agencies | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 26,394 |
Recurring | Level 2 | Corporate notes and bonds | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | 19,240 |
Recurring | Level 2 | Asset-backed securities | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Marketable debt securities | $ 4,694 |
FINANCIAL INSTRUMENTS AND SIG_4
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Summary of Changes in the Fair Value (Details) - Embedded derivative liability - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at the beginning | $ 407 | $ 387 |
Loss from change in fair value, net | $ 5 | $ 20 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Derivative Instruments, Net, Pretax | Gain (Loss) on Derivative Instruments, Net, Pretax |
Balance at the end | $ 412 | $ 407 |
FINANCIAL INSTRUMENTS AND SIG_5
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Mar. 10, 2023 | Jun. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Concentration Risk, Credit Risk, Uninsured Deposits | Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and investments in marketable debt securities. The Company maintains its cash in demand accounts at a high-quality financial institution. As of and for the fiscal years ended June 30, 2023 and 2022, cash deposits have exceeded the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation (“FDIC”). | ||
Marketable debt securities | $ 102,330 | ||
Cash and cash equivalents | 16,036 | $ 150,410 | |
Banking and Financial Services Industries | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Marketable debt securities | 54,000 | ||
U.S. government | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Marketable debt securities | 26,500 | ||
Money Market Mutual Fund | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Cash and cash equivalents | $ 5,464 | ||
Overnight Money Market Mutual Funds | Silicon Valley Bank Closure [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Cash and cash equivalents | $ 20,500 |