Equity

9 Months Ended

Mar. 31, 2024

Equity [Abstract]

EQUITY

Note 13. EQUITY 

After the close of the stock market on July 7, 2020, the Company effected a l-for-5 reverse stock split of its common stock in order to satisfy continued listing requirements of its common stock on the NASDAQ Capital Market. The reverse stock split was approved by the Company’s board of directors and stockholders and was intended to allow the Company to meet the minimum share price requirement of $1.00 per share for continued listing on the NASDAQ Capital Market.

On February 9, 2024, the Company effectuated a 1-for-10 reverse stock split of its common stock. The reverse stock split was intended to increase the per share trading price of the Company’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing of the common stock on the NASDAQ Stock Market. The reverse stock split did not affect the number of total authorized shares of common stock of the Company.

As a result, all common stock share amounts included in this filing have been retroactively reduced by a factor of ten, and all common stock per share amounts have been increased by a factor of ten. Amounts affected include common stock outstanding, including those that have resulted from the stock options, and warrants exercisable for common stock.

Stock issuances:

On September 17, 2020, the Company entered into a certain securities purchase agreement with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended, pursuant to which the Company sold an aggregate of 72,000 shares of the Company’s common stock and warrants to purchase 72,000 shares of common stock at a per share purchase price of $14.6 for a unit of shares of common stock and one warrant. The net proceeds to the Company from the offering was approximately $1.05 million. The warrants became exercisable on March 16, 2021 at an exercise price of $18.25 per share. The warrants may be exercised on a cashless basis if at any time after March 16, 2021, there is no effective registration statement registering the resale of the warrant shares. The warrants will expire on March 16, 2026. The warrants are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions. The warrants contain a mandatory exercise right for the Company to force exercise of the warrants if the Company’s common stock trades at or above $43.8 for 20 consecutive trading days, provided, among other things, that the shares issuable upon exercise of the warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 6,000 shares of common stock per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date.

On November 2 and November 3, 2020, the Company issued an aggregate of 86,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”), each share convertible into one share of common stock of the Company, upon the terms and subject to the limitations and considerations set forth in the Certificate of Designation of the Series A Preferred Stock, and warrants to purchase up to 103,200 shares of common stock. The purchase price for each share of Series A Preferred Stock and accompanying warrants was $16.6. The net proceeds to the Company from this offering was approximately $1.43 million, not including any proceeds that may be received upon cash exercise of the warrants. The warrants became exercisable six (6) months following the date of issuance at an exercise price of $19.9 per share. The warrants may also be exercised on a cashless basis if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering the resale of the warrant shares. The warrants will expire five and a half (5.5) years from the date of issuance. The warrants are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions. The warrants contain a mandatory exercise right for the Company to force exercise of the warrants if the closing price of the common stock equals or exceeds $59.7 for twenty (20) consecutive trading days, provided, among other things, that the shares issuable upon exercise of the warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 6,000 shares of common stock per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date. In February 2021, the shareholders at the Company’s annual meeting of shareholders approved the preferred shareholders’ right to convert the Series A Preferred Stock into 86,000 shares of common stock. As of June 30, 2022, the shares of Series A Preferred Stock were fully converted to common stock on a one-for-one basis.

On December 8, 2020, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company sold to the investors in a registered direct offering an aggregate of 156,000 shares of the common stock at a purchase price of $31.0 per share, and warrants to purchase up to an aggregate of 117,000 shares of common stock of the Company at an exercise price of $31.0 per share, for aggregate gross proceeds to the Company of $4,836,000.

On January 27, 2021, the Company entered into a securities purchase agreement with certain non-U.S. investors pursuant to which the Company sold to the investors an aggregate of 108,696 shares of common stock and warrants to purchase 543,478 shares of common stock of the Company. The net proceeds to the Company from this offering was approximately $4.0 million. The purchase price for each share of common stock and five warrants was $36.8, and the exercise price per warrant is $50.0. The warrants became exercisable at any time during the period beginning July 27, 2021 and ending on or prior on January 27, 2026; provided, however, that the value of the total number of the Company’s issued and outstanding shares of common stock, multiplied by the NASDAQ official closing bid price of the common stock will equal or exceed $0.3 billion for a three consecutive month period prior to an exercise.

On February 6, 2021, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company sold to the investors an aggregate of 199,850 shares of the common stock of the Company at a purchase price of $68.05 per share in a registered direct offering, The Company also sold to the investors warrants to purchase up to an aggregate of 199,850 shares of common stock at an exercise price of $68.05 per share. The warrants are exercisable upon issuance and expire five and a half (5.5) years from the date of issuance. Net proceeds to the Company from this offering was approximately $12.4 million. The Company redeemed 121,500 warrants on January 6, 2022.

On February 9, 2021, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company sold to the investors an aggregate of 365,500 shares of the common stock of the Company at a purchase price of $78.0 per share and warrants to purchase up to an aggregate of 365,500 shares of common stock at an exercise price of $78.0 per share in a registered direct offering. The warrants were exercisable upon issuance and expire five and a half (5.5) years from the date of issuance. Net proceeds to the Company from the sale of the shares and the warrants was approximately $26.1 million.

On December 14, 2021, the Company entered into a securities purchase agreement with certain non-U.S. investors and accredited investors pursuant to which the Company sold to the investors an aggregate of 322,881 shares of common stock, no par value, and warrants to purchase 484,321 shares of common stock. The purchase price for each share of common stock and one and a half warrants was $32.6, and the exercise price per warrant is $40.0. The Company received net proceeds of $1,052,582. In connection with the issuance, the Company issued 50,000 shares to a consultant for assisting the Company in finding potential investors. The warrants are exercisable during the period June 14, 2022 to December 13, 2026 provided, however, that the total value of the number of the Company’s issued and outstanding shares of common stock, multiplied by the NASDAQ official closing bid price of the common stock shall equal or exceed $150,000,000 for a three consecutive month period prior to an exercise.

The Company’s outstanding warrants are classified as equity since they qualify for exception from derivative accounting as they are considered to be indexed to the Company’s own stock and require net share settlement. The fair value of the warrants was recorded as additional paid-in capital from the issuance of common stock.

As of January 7, 2022, Company repurchased an aggregate of 397,400 warrants pursuant to warrant purchase agreements with certain warrant holders .These warrants had been sold in three transactions that closed on March 14, 2018, February 10, 2021 and February 11, 2021 on identical terms. The purchase price for each warrant was $20.00.

On November 15, 2023, the Company entered into a subscription agreement with ten individual investors, under which the Company agreed to sell an aggregate of 1,700,000 shares of its Common Stock and 1,700,000 warrants, with each warrant initially exercisable to purchase one share of Common Stock at an exercise price of $6.07 per share, at an aggregate price of US$9,860,000 in a private placement. On December 13, 2023, the Company issued an aggregate of 1,700,000 shares of its common stock to the investors. The company received US$9,860,000 but subsequently returned the funds to the investors because the 1,700,000 warrants, issuable as part of the transaction, could not be issued timely due to certain outstanding warrant terms. The investors returned the funds to the Company on January 4, 2024 after the warrant terms were finalized. On January 26, 2024, the Company entered into an amendment to the subscription agreement which provides, among other things, that Nasdaq’s authorization must be obtained for the issuance of the securities under the subscription agreement and the Company stockholders’ approval shall be obtained before the 1,700,000 warrants are issued to the investors. Nasdaq has authorized the issuance of the Common Stock and the conditional issuance of the warrants. As of the date of this report, the issuance of the warrants is still awaiting approval from the Company’s stockholders.

Following is a summary of the status of warrants outstanding and exercisable as of March 31, 2024

	Warrants		Weighted Average Exercise Price
Warrants outstanding, as of June 30, 2023		1,208,849	$	43.3
Issued		-		-
Exercised		-		-
Expired		-		-
Warrants outstanding, as of March 31, 2024		1,208,849	$	43.3
Warrants exercisable, as of March 31, 2024		1,208,849	$	43.3

Total Warrants Issued	Warrants Outstanding		Weighted Average Exercise Price		Average Remaining Contractual Life
2020 warrants - 292,200		18,100	$	18.3	1.41 years
2021 warrants - 1,593,149		1,190,749	$	49.4	2.31 years

Stock-based compensation:

During the three months ended March 31, 2024 and 2023, the Company did not recognize any stock-based compensation expense. During the nine months ended March 31, 2024 and 2023, nill and $329,777 were recorded as stock-based compensation expense, respectively.