Equity

6 Months Ended

Dec. 31, 2022

Equity [Abstract]

Equity

Note 16 – Equity

Common Stock

The authorized capital stock of the Company consists of 500,000,000 shares of Common Stock at a par value of $0.001 per share.

Dividend Rights

Subject to the prior or equal rights of holders of all classes of stock at the time outstanding having prior or equal rights as to dividends, the holders of the Company’s Common Stock may receive dividends out of funds legally available if the Board of Directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the Board of Directors may determine. The Company has not paid any dividends on the Company’s Common Stock and do not contemplate doing so in the foreseeable future.

Voting Rights

Each holder of the Common Stock is entitled to one vote for each share of Common Stock held by such stockholder.

No Preemptive or Similar Rights

The Company’s Common Stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.

Liquidation

In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the Common Stock.

The following is a summary of common stock issuances for the six months ended December 31, 2022:

● During the six months ended December 31, 2022, as part of the September 2022 Offering, the Company sold 30,000,000 units at $0.25, consisting of one share of Common Stock and one warrant with an exercise price of $0.25, for gross proceeds of $7,536,000. The Company recorded the issuance of these shares at a fair value of $1,568,130 comprised of $6,854,418 of cash received from the offering equal to the gross proceeds, net of $681,582 issuance costs, and net of the fair value of the September 2022 Warrant liability of $5,286,288, calculated on issuance. The proceeds from the offering were designated for general working capital and to pay to the Holder of the Senior Convertible Note an amount of $2,778,427, including $2,265,928 equal to 50% of the gross proceeds over $2,000,000 following the payment of 7% in offering fees including underwriting discounts and $512,500 equal to the Holders participation in the September 2022 Offering, that was applied as a reduction of principal (see Note 11).

● During the six months ended December 31, 2022, as part of the December Registered Direct Offering, the Company sold On December 21, 2022, the Company closed an offering (the “Registered Direct Offering”) in which it sold: (a) 7,065,000 shares of Common Stock to the Holder (the “Registered Direct Shares”) and (b) Pre-funded Warrants to purchase 17,850,000 shares of our common stock at a price of $0.0937 per warrant (the “Pre-funded Warrants”), directly to the Holder, with all but $0.001 per warrant prepaid to the Company at the closing. The Company recorded the issuance of these shares at a fair value of $2,316,686 comprised of $2,316,686 of cash received from the offering equal to the gross proceeds, net of $170,001 issuance costs, $2,146,685. The Company remitted approximately $1,073,343 to the Holder to be applied to accrued interest and future interest payments under the Senior Convertible Note. The net proceeds received by the Company, after deducting underwriting discounts and commissions and offering expenses payable by the Company and amounts remitted to the Holder was $1,073,343. The Holder redeemed 6,566,000 of the Pre-funded warrants through December 31, 2022 for additional net proceeds of $6,566. Subsequent to December 31, 2022, the remaining 11,284,000 outstanding Pre-funded warrants were redeemed for net proceeds of $11,284.

The following is a summary of common stock issuances for the six months ended December 31, 2021:

● During the six months ended December 31, 2021, the Company issued 82,527 shares of Common Stock for services with a weighted average fair value of $7.28 per share or $574,299 in the aggregate.

● During the six months ended December 31, 2021, the Company issued 14,000 shares of Common Stock from the exercise of stock options with a weighted average exercise price of $4.82 or $67,479 in the aggregate.

● During the six months ended December 31, 2021, the Company issued 375,813 shares of Common Stock, with aggregate proceeds of $1,586,824, or $1,539,219 net of issuance costs, and a weighted average exercise price of $4.22, under its ATM program (See below).

● During the six months ended December 31, 2021, the holder of the Senior Convertible Note converted an aggregate conversion value of $8,243,454 into 1,701,841 shares of common stock, with a weighted average conversion price of $4.84.

At-the Market Equity Offering Program

On September 3, 2021, the Company entered “at the market” equity offering program to sell up to an aggregate of $20,000,000 of Common Stock. The shares are being issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-252370) and the Company filed a prospectus supplement, dated September 3, 2021 with the SEC in connection with the offer and sale of the shares pursuant to the Equity Distribution Agreement with the broker. There were no shares sold under the ATM for the three and six months ended December 31, 2022 and 1,165,813 shares sold under the ATM during the year ended June 30, 2022 for gross proceeds of $4,005,267. The agreement between the Company and Maxim Group LLC governing the ATM expired on September 3, 2022. At this time, the Company does not plan to sign a new ATM agreement.

Common Stock Warrants

On December 21, 2022, the Company entered into a securities purchase agreement with an institutional investor. The offering included (a) 7,065,000 Registered Direct Shares and (b) 17,850,000 shares of our common stock at a price of $0.0937 per Pre-Funded Warrant, directly to such investor, with all but $0.001 per warrant prepaid to the Company at the closing of the offering. The exercise price of each Pre-funded Warrant is $0.001 per share of common stock.

The Pre-funded Warrants may not be exercised to the extent they cause the purchaser of the Pre-funded Warrants to become a “beneficial owner” of more than 4.99% of our Common Stock for purposes of Section 13(d) of the Securities Exchange Act of 1934. The Beneficial Ownership Limitation may be increased at the discretion of the purchaser of the Pre-funded Warrants to any percentage less than or equal to 9.99% of our common stock upon 61 calendar days’ notice or decreased at any time.

The Company determined the Pre-funded Warrants should be classified as equity.

The Holder redeemed 6,566,000 of the Pre-funded warrants through the six months ended December 31, 2022 for net proceeds of $6,566. There were 11,284,000 outstanding as of December 31, 2022. The Pre-funded Warrants expiration date was December 21, 2027. Subsequent to December 31, 2022, the remaining 11,284,000 outstanding Pre-funded warrants were redeemed for net proceeds of $11,284.

On September 19, 2022, the Company closed the September 2022 Offering, in which it sold 30,000,000 units at $0.25 consisting of one share of Common Stock and one September 2022 Warrant exercisable at any time after issuance for one share of Common Stock of the Company for a total of 30,000,000 September 2022 Warrants at an exercise price of $1.00. On the offering date the underwriters of the September 2022 Offering exercised the over-allotment option to purchase 3,600,000 additional September 2022 Warrants to purchase shares at a price of $0.01 per warrant. The Company received net proceeds of $36,000. There were no September 2022 Warrants exercised during the six months ended December 31, 2022 and all September 2022 Warrants were outstanding as of December 31, 2022. The September 2022 Warrants expire on September 19, 2027.

On March 2, 2022, the Company closed the March 2022 Offering, in which it sold 15,000,000 units at $1.00 consisting of one share of Common Stock and one March 2022 Warrant exercisable at any time after issuance for one share of Common Stock of the Company for a total of 15,000,000 March 2022 Warrants at an exercise price of $1.00. On April 1, 2022 the underwriters of the March 2022 Offering exercised the over-allotment option to purchase 2,250,000 additional March 2022 Warrants to purchase shares at a price of $0.01 per warrant. The Company received net proceeds of $20,925. There were no March 2022 Warrants exercised during the six months ended December 31, 2022 and all March 2022 Warrants were outstanding as of December 31, 2022. The March 2022 Warrants expire on March 2, 2027.

On June 2, 2021, the Company issued 2,000,000 Series A Warrants and 2,000,000 Series B Warrants with an exercise price of $17.50 per share to the Holder of the Senior Convertible Note. There were no Series A Warrants exercised during the six months ended December 31, 2022. At December 31, 2022, the Series B Warrants are exercisable to the extent the Company has redeemed the principal under the Senior Convertible Note. The Series A Warrants expire on June 2, 2025 and the Series B Warrants expire on June 2, 2023.

On April 16, 2020, the Company closed an offering, (the “April 2020 Offering”), in which it sold 1,980,000 units consisting of one share of Common Stock and one Unit A Warrant and one Unit B Warrant, for a total of 3,960,000 warrants, with each warrant entitling the holder to purchase one share of Common Stock priced at $4.25 per share. The Company issued an additional 209,400 Unit A Warrants and 209,400 additional Unit B Warrants to the underwriter pursuant to an over-allotment option each entitling the holder to purchase one share of Common Stock at $0.01 per share. There were 1,136,763 of Unit A Warrants outstanding on December 31, 2022. The Unit A Warrants expire on April 14, 2025. The Unit B Warrants expired one year from the date of issuance on April 19, 2021 and there were no Unit B Warrants outstanding at December 31, 2022.

In connection with the April 2020 Offering the Company also issued 1,217,241 shares of Common Stock and 2,434,482 warrants (“Conversion Warrants”) to purchase one share of Common Stock at $4.25 per share upon the conversion of $4,138,585 of the Company’s convertible debt and accrued interest. There were 40,582 Unit A Conversion Warrants outstanding at December 31, 2022. The Unit B Conversion Warrants have been fully exercised for shares of Common Stock.

A summary of the warrant activity follows:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Intrinsic Value
Outstanding, July 1, 2021		5,350,558		$	14.19		3.14		8,743,588
Issued		17,250,000			1.00
Exercised		-			-
Forfeited or cancelled		-			-
Outstanding, June 30, 2022		22,600,558		$	4.12		4.07		-
Issued		33,600,000			0.25
Exercised		-			-
Forfeited or cancelled		-			-
Outstanding September 30, 2022		56,200,558		$	1.81		4.51		-
Issued		17,850,000			0.001
Exercised		(6,566,000	)		0.001
Forfeited or cancelled		-			-
Outstanding December 31, 2022		67,484,558		$	1.51		4.38		-

Common Stock Options

On September 10, 2020, the Company’s Board of Directors adopted the 2020 Equity and Incentive Plan (the “2020 Plan”) that provides for the issuance of incentive and non-qualified stock options, restricted stock, restricted stock units and stock appreciation rights to officers, employees, directors, consultants, and other key persons. Under the 2020 Plan, the maximum number of shares of Common Stock authorized for issuance was 1,500,000 shares. Each year on January 1, for a period of up to nine years, the maximum number of shares authorized for issuance under the 2020 Plan is automatically increased by 233,968 shares. At December 31, 2022, there was a maximum of 1,967,936 shares of Common Stock authorized for issuance under the 2020 Plan. There were no additional equity awards eligible for issuance from the 2017 Stock Incentive Plan that had been adopted by the Company on August 1, 2017. The outstanding stock options granted under the 2017 Stock Incentive Plan were transferred to the 2020 Plan. As of December 31, 2022, there were 1,204,435 shares of Common Stock available for future issuance under the 2020 Plan.

A summary of the Company’s stock option activity is as follows:

	Number of Options			Weighted Average Exercise Price
Outstanding, June 30, 2021		474,676		$	5.49
Granted		1,120,150			6.71
Exercised		(14,000	)		4.82
Cancelled		(470,300	)		6.54
Outstanding, June 30, 2022		1,110,526		$	6.29
Granted		-			-
Exercised		-			-
Cancelled		(347,025	)		6.56
Outstanding, December 31, 2022		763,501		$	6.25

As of December 31, 2022, the weighted average remaining life of the options outstanding was 3.62 years. There are 763,501 options exercisable at December 31, 2022, with a weighted average exercise price of $6.25.

Stock Based Compensation

During the three and six months ended December 31, 2022 the Company recorded stock-based compensation expense of $0 and $921,991, respectively, and during the three and six months ended December 31, 2021 the Company recorded stock-based compensation expense of $1,729,401 and $2,611,773, respectively, for the amortization of stock options and the issuance of Common Stock to employees and contractors for services which has been recorded as general and administrative expense in the unaudited condensed consolidated statements of operations.

As of December 31, 2022, there was no remaining unamortized stock compensation for stock options. No options were granted during the six months ended December 31, 2022.