0001731122-20-001140.txt : 20201112 0001731122-20-001140.hdr.sgml : 20201112 20201112172854 ACCESSION NUMBER: 0001731122-20-001140 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 59 CONFORMED PERIOD OF REPORT: 20200930 FILED AS OF DATE: 20201112 DATE AS OF CHANGE: 20201112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Enochian Biosciences Inc CENTRAL INDEX KEY: 0001527728 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 452259340 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38758 FILM NUMBER: 201308154 BUSINESS ADDRESS: STREET 1: CENTURY CITY MEDICAL PLAZA STREET 2: 2080 CENTURY CITY EAST CITY: SUITE 906 LOS ANGELES STATE: CA ZIP: 90067 BUSINESS PHONE: 45 39179840 MAIL ADDRESS: STREET 1: CENTURY CITY MEDICAL PLAZA STREET 2: 2080 CENTURY CITY EAST CITY: SUITE 906 LOS ANGELES STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: DanDrit Biotech USA, Inc. DATE OF NAME CHANGE: 20140214 FORMER COMPANY: FORMER CONFORMED NAME: Putnam Hills Corp. DATE OF NAME CHANGE: 20110810 10-Q 1 e2200_10-q.htm FORM 10-Q

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2020

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________ to ________

 

Commission file number 001-38758

 

Enochian Biosciences, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   45-2259340
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification Number)

 

Enochian Biosciences, Inc.

2080 Century Park East, Suite 906

Los Angeles, CA 90067

+1(786) 888-1685

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐.

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐.

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

 

Title of Each Class   Trading Symbol   Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share   ENOB   The Nasdaq Stock Market LLC

 

As of November 12, 2020, the number of shares of the registrant’s common stock outstanding was 46,636,976.

 

 

 

 

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES

 

- INDEX -

 

    Page
PART I – FINANCIAL INFORMATION: 1
     
Item 1. Financial Statements (Unaudited): 1
     
  Condensed Consolidated Balance Sheets as of September 30, 2020 (Unaudited) and June 30, 2020 2
     
  Condensed Consolidated Statements of Operations  for the Three Months September 30, 2020 and September 30, 2019 (Unaudited) 3
     
  Condensed Consolidated Statements of Other Comprehensive Loss for the Three Months Ended September 30, 2020 and September 30, 2019 (Unaudited) 4
     
  Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended September 30, 2020 and September 30, 2019  (Unaudited) 5
     
  Condensed Consolidated Statements of Cash Flows  for the Three Months Ended September 30, 2020 and September 30, 2019 (Unaudited) 6
     
  Notes to the Condensed Consolidated Financial Statements (Unaudited) 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 26
     
Item 4. Controls and Procedures 26
     
PART II – OTHER INFORMATION: 27
     
Item 1. Legal Proceedings 27
     
Item 1A. Risk Factors 27
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27
     
Item 3. Defaults Upon Senior Securities 27
     
Item 4. Mine Safety Disclosures 27
     
Item 5. Other Information 27
     
Item 6. Exhibits 27
     
Signatures 28

 

i

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

 

The results for the period ended September 30, 2020 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Form 10-K for the fiscal year ended June 30, 2020, filed with the Securities and Exchange Commission on September 23, 2020.

 

1

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   September 30,   June 30, 
   2020   2020 
   (Unaudited)     
ASSETS          
Current Assets:          
Cash  $5,965,661   $8,696,361 
Other receivables        1,982 
Prepaid expenses   99,872    242,866 
Total Current Assets   6,065,533    8,941,209 
           
Property and equipment, net   751,573    778,118 
           
OTHER ASSETS          
Definite life intangible assets, net   76,834    77,323 
Indefinite life intangible assets   154,824,000    154,824,000 
Goodwill   11,640,000    11,640,000 
Deposits and other assets   137,550    137,550 
Right of use assets   1,637,878    1,703,859 
Total Other Assets   168,316,262    168,382,732 
           
TOTAL ASSETS  $175,133,368   $178,102,059 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
CURRENT LIABILITIES:          
Accounts payable – trade  $282,376   $592,877 
Accrued expenses   273,345    470,636 
Current portion of operating lease liabilities   276,456    271,285 
Total Current Liabilities   832,177    1,334,798 
           
NON-CURRENT LIABILITIES          
Contingent Consideration Liability   2,755,034    3,182,434 
Leases liabilities, non-current   1,461,156    1,531,779 
Convertible Notes Payable-LT   1,200,000    1,200,000 
Notes payable - LT, net of discount   4,654,765    4,580,787 
           
Total Liabilities  $10,903,132    11,829,798 
           
Commitments and Contingencies        
           
STOCKHOLDERS’ EQUITY:          
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding        
Common stock, par value $0.0001, 100,000,000 shares authorized, 46,636,976 shares issued and outstanding at September 30, 2020; 46,497,409 shares issued and outstanding at June 30, 2020   4,664    4,650 
Additional paid-in capital   230,823,367    230,497,225 
Accumulated deficit   (66,584,768)   (64,188,198)
Accumulated other comprehensive loss   (13,027)   (41,416)
Total Stockholders’ Equity   164,230,236    166,272,261 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $175,133,368   $178,102,059 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

2

 

  

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES CONDENSED

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 

   For the Three Months 
   Ended 
   September 30, 
   2020   2019 
Revenues  $   $ 
           
Cost of Goods Sold  $   $ 
           
Gross profit (Loss)  $   $ 
           
Operating Expenses          
General and administrative expenses   1,777,923    1,900,812 
Research and development expenses   1,050,376    520,192 
Depreciation and amortization   30,458    21,481 
           
Total Operating Expense  $2,858,757   $2,442,485 
           
LOSS FROM OPERATIONS  $(2,858,757)  $(2,442,485)
           
Other Income (Expense)          
Change in fair value of contingent consideration   427,400    (1,942,000)
Interest income (expense)   (92,313)    
Gain (loss) on currency transactions        286,755 
Interest and other income   4,306    14,553 
Total Other Income (Expense)   339,393    (1,640,692)
           
Loss Before Income Taxes   (2,519,365)   (4,083,177)
           
Income Tax Benefit  $122,794   $ 
           
NET LOSS  $(2,396,570)  $(4,083,177)
           
BASIC AND DILUTED LOSS PER SHARE  $(0.05)  $(0.09)
          
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED   46,605,118    46,241,315 

 

See accompanying notes to the unaudited condensed consolidated financial statements

 

3

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS

(UNAUDITED)

 

   For the Three Months 
   Ended 
   September 30, 
   2020   2019 
Net Loss  $(2,396,570)  $(4,083,177)
Foreign Currency Translation, Adjustments   28,389    (278,656)
           
Other Comprehensive Loss  $(2,368,181)  $(4,361,833)

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

4

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

   # of Shares   Common Shares   Additional Paid-In Capital  

Accumulated

Deficit

   Accumulated Other Comprehensive Income   Total 

July 1, 2020

   46,497,409   $4,650   $230,497,225  $(64,188,198)  $(41,416)  $166,272,261 
Stock-based compensation             326,156              326,156 
Issuance of commitment shares   139,567    14    (14)            
Net Loss               (2,396,570)       (2,396,570)
Foreign Currency Translation Adjustment                   28,389    28,389 
September 30, 2020   46,636,976   $4,664   $230,823,367   $(66,584,768)  $(13,027)  $164,230,236 
                               
July 1, 2019   45,273,924   $4,527   $225,765,432   $(52,771,840)  $101,818   $173,099,937 
                               
Stock issued pursuant to warrants exercised   500,000    50    999,950            1,000,000 
Contingent Share issued pursuant to Acquisition Agreement   500,000    50    2,209,950            2,210,000 
Stock-based compensation             234,010            234,010 
Net Loss               (4,083,177)       (4,083,177)
Other Comprehensive Loss                              
Foreign Currency Translation Adjustment                   (278,656)   (278,656)
September 30, 2019   46,273,924   $4,627   $229,209,342   $(56,855,017)  $(176,838)  $172,182,114 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

5

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 

   For the Three Months Ended 
   September 30, 
   2020   2019 
NET LOSS  $(2,396,570)  $(4,083,177)
           
ADJUSTMENT TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:          
Depreciation and amortization   30,458    21,481 
Change in contingent consideration liability   (427,400)   1,942,000 
Stock Based Compensation Expense   326,156    234,010 
ROU assets   65,981    68,866 
Amortization of Discount of Notes Payable   73,978     
CHANGES IN ASSETS AND LIABILITIES:          
Other Receivables   1,982    6,098 
Prepaid Expenses/Deposits   142,994    135,793 
Accounts Payable   (310,501)   71,022 
Accrued Expenses   (197,291)   (136,424)
Operating Lease Liabilities   (65,452)   (60,256)
NET CASH USED IN OPERATING ACTIVITIES  $(2,755,665)  $(1,800,587)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment       (68,616)
NET CASH USED IN INVESTING ACTIVITIES  $   $(68,616)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from exercise of warrants       1,000,000 
NET CASH PROVIDED BY FINANCING ACTIVITIES  $   $1,000,000 
           
(Loss) on Currency Translation  $24,965   $(274,769)
           
NET CHANGE IN CASH  $(2,730,700)   (1,143,972)
           
CASH, BEGINNING OF PERIOD  $8,696,361   $12,282,224 
           
CASH, END OF PERIOD  $5,965,661   $11,138,252 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION          
Cash paid during the quarter end for:          
Interest  $42,365     
Income Taxes  $37     
           
Non-cash operating, investing and financing Activities:          
Contingent Shares issued in connection with Acquisition Agreement  $   $2,210,000 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

6

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 — THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   

Business– Enochian BioSciences Inc., (“Enochian”, or “Registrant”, and together with its subsidiaries, the “Company”, “we” or “us”) is a pre-clinical stage biotechnology company committed to using our genetically modified cellular and immune-therapy technologies to prevent or potentially cure HIV, Hepatitis B (HBV), and to provide potentially life-long cancer remission of some of the deadliest cancers. 

 

Basis of Presentation- The Company prepares consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and follows the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying financial statements are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2020 and 2019 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2020 audited financial statements. The results of operations for the periods ended September 30, 2020 and 2019 are not necessarily indicative of the operating results for the full year.

 

Consolidation - For the three months ended September 30, 2020 and 2019, the consolidated financial statements include the accounts and operations of the Registrant, and its subsidiaries. All material inter-company transactions and accounts have been eliminated in the consolidation.

 

Reclassification–Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation. For the three months ended September 30, 2019, we reclassified consulting expense of $31,850, to general and administrative expenses.

 

Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated. Significant estimates include the fair value and potential impairment of intangible assets, and fair value of equity instruments issued.

 

COVID-19- During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly affected the economic conditions in the U.S. A number of states, counties and municipalities issued orders requiring persons who were not engaged in essential activities and businesses to remain at home. On March 27, 2020, the US enacted the Coronavirus Aid, Relief and Economic Security Aid (“CARES Act”) to help stimulate an economic recovery; however, there are no reliable estimates of how long the pandemic will last or how many people are likely to be affected by it. No one knows what over-all effects the COVID-19 pandemic will have on economic conditions during the remainder of the fiscal year.

 

Our senior management team is monitoring COVID-19’s impact daily and will continue to adjust our operations as necessary. However, the impact of this event on the Company’s results of operations, financial position, and liquidity or capital resources cannot be reasonably estimated at this time.

 

Functional Currency & Foreign currency translation - The functional currency of Enochian Denmark is the Danish Kroner (“DKK”). The Company’s reporting currency is the U.S. Dollar for the purpose of these financial statements. The Company’s balance sheet accounts are translated into U.S. dollars at the period-end exchange rates and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during the periods ended September 30, 2020, and June 30, 2020, and September 30, 2019. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred.

 

7

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Cash and Cash Equivalents —The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had balances held in financial institutions in Denmark and in the United States in excess of federally insured States amounts at September 30, 2020 and June 30, 2020 of $5,965,661 and $8,696,361, respectively.

 

Property and Equipment — Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized, upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed for financial statement purposes on a straight-line basis over the estimated useful lives of the assets, which range from four to ten years (See Note 3).

 

Intangible Assets - The Company has both Definite and Indefinite life intangible assets.

 

Definite life intangible assets include patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, “Goodwill and Other Intangible Assets”. Intangible assets are recorded at cost. Patent costs consist of costs incurred to acquire the underlying patent. If it is determined that a patent will not be issued, the related remaining capitalized patent costs are charged to expense. Intangible assets are amortized on a straight-line basis over their estimated useful life. The estimated useful life of patents is twenty years from the date of application.

 

Indefinite life intangible assets include license agreements and goodwill. The Company accounts for indefinite life intangible assets in accordance with ASC 350, “Goodwill and Other Intangible Assets”. License agreement costs represent the Fair Value of the license agreement on the date acquired and are tested annually for impairment. The fair value analysis performed on the license agreements, and the fair value analysis performed on goodwill supported that both indefinite life intangible assets are not impaired as of June 30, 2020, and no impairment is deemed necessary as of September 30, 2020. (See Note 4)

 

Goodwill —Goodwill is not amortized but is evaluated for impairment annually as of June 30th or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

 

We test for goodwill impairment at the reporting unit level, which is one level below the operating segment level. Our detailed impairment testing involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit and is based on discounted cash flows or relative market-based approaches. If the fair value exceeds carrying value, then it is concluded that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.

 

The carrying value of goodwill at September 30, 2020, was $11,640,000. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to test for impairment losses on goodwill. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to an impairment charge that could be material.

 

8

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Impairment of Long-Lived Assets — Long-lived assets, such as property, plant, and equipment, patents and licenses are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

 

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values.

 

Leases — In accordance with ASC Topic 842, the Company determined the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter. The lease terms include any renewal options and termination options that the Company is reasonably assured to exercise, if applicable. The present value of lease payments is determined by using the implicit interest rate in the lease, if that rate is readily determinable; otherwise, the Company develops an incremental borrowing rate based on the information available at the commencement date in determining the present value of the future payments.

 

Rent expense for operating leases is recognized on a straight-line basis, unless the operating lease right of use assets have been impaired, over the reasonably assured lease term based on the total lease payments and is included in operating expense in the consolidated statement of operations. For operating leases that reflect impairment, the Company will recognize the amortization of the operating lease right-of-use assets on a straight-line basis over the remaining lease term with rent expense still included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

 

The Company has elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, insurance and taxes, which vary based on future outcomes, and thus are recognized in general and administrative expenses when incurred. (See Note 5).

 

Research and Development Expenses — The Company expenses research and development costs incurred in formulating, improving, validating and creating alternative or modified processes related to and expanding the use of the HIV, HBV, and Cancer therapies and technologies for use in the prevention, treatment, amelioration of and/or therapy for HIV, HBV, and Cancer. Research and development expenses for the three months ended September 30, 2020 and 2019, amounted to $1,050,376, and $520,192, respectively.

 

Income Taxes — The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes, which requires an asset and liability approach for accounting for income taxes. During the quarter ended September 30, 2020, the Company’s Danish subsidiary received a payment for an R&D tax credit owed under Danish statutory tax laws in the amount of $122,831.

 

Loss Per Share — The Company calculates earnings/(loss) per share in accordance with FASB ASC 260 Earnings Per Share. Basic earnings per common share (EPS) are based on the weighted average number of shares of Common Stock, par value 0.0001 per share (“Common Stock”) outstanding during each period. Diluted earnings per common share are based on shares outstanding (computed as under basic EPS) and potentially dilutive shares of Common Stock. Potential shares of Common Stock included in the diluted earnings per share calculation include in-the-money stock options that have been granted but have not been exercised. Because of the net loss for the three ended September 30, 2020 and 2019, the dilutive shares for both periods were excluded from the Diluted EPS calculation as the effect of these potential shares of Common Stock is anti-dilutive. The Company had 4,115,883 and 3,441,375 potential shares of Common Stock excluded from the Diluted EPS calculation as of September 30, 2020 and September 30, 2019.

 

9

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

  

Fair Value of Financial Instruments — The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

  Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

  Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The Company adopted ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements, which amends certain disclosures requirements over fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy or valuation processes for Level 3 fair value measurements. However, public companies will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The Company adopted this guidance on July 1, 2020, and there was no material impact to its condensed consolidated financial statement disclosures (See Note 2-Fair Value of Financial Instruments for more information about the Company’s fair value classifications.)

 

Stock Options and Restricted Share Units - The Company has granted stock options, restricted share units (“RSU’s) and warrants. The Company accounts for options in accordance with the provisions of FASB ASC Topic 718, Compensation - Stock Compensation. Stock based compensation costs for the vesting of options and RSU’s granted to officers, board members, employees and consultants for the three months ended September 30, 2020 and 2019 were $326,156 and $234,010, respectively.

 

Stock-Based Compensation -The Company records stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period. No shares were issued for services for the three months ended September 30, 2020 and 2019.

 

Recent Adopted Accounting Pronouncements 

 

The Company adopted ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements, as of July 1, 2020 (Note 2).

 

Other recent accounting pronouncements issued by the FASB do not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

10

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 2 — FAIR VALUE MEASUREMENT — The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

  Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

  Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The were no Level 1, 2 or 3 assets, nor and Level 1 or 2 liabilities as of September 30, 2020.

 

Level 3 liabilities held as of September 30, 2020 consisted of a contingent consideration liability related to the February 16, 2018 acquisition of Enochian BioPharma (the “Acquisition”). As consideration for the Acquisition, the stockholders of Enochian Biopharma received (i) 18,081,962 shares of Common Stock, and (ii) the right to receive Contingent Shares pro rata upon the exercise of warrants, which were outstanding at closing. The contingent consideration liability was recorded at fair value of $21,516,000 at the time of acquisition and is subsequently remeasured to fair value at each reporting period. At September 30, 2020, 1,438,122 Contingent Shares are issuable in connection with the Acquisition of Enochian Biopharma.

 

The fair value of the contingent consideration liability is estimated using an option-pricing model. The key inputs to the model are all contractual or observable with the exception being volatility, which is computed, based on the Company’s underlying stock. The key inputs to valuing the contingent consideration liability on the date of acquisition and as of September 30, 2020, include the Company’s stock price on the valuation date of $3.58; the exercise price of the warrants of $1.30, the risk-free rate of .13% the expected volatility of the Company’s Common Stock of 99.3%, the digital call rate 54%, and the 1,438,122 of contingent shares remaining at the end of the period. Fair Value measurements are highly sensitive to changes in these inputs and significant changes in these inputs could result in a significantly higher or lower fair value.

 

Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, investments, accounts payable, accrued expenses, capital lease obligations and notes payable approximates their recorded values due to their short-term maturities.

 

The following table sets forth the Level 3 liability at September 30, 2020, which is recorded on the balance sheet at fair value on a recurring basis. As required, these are classified based on the lowest level of input that is significant to the fair value measurement:

 

   Fair Value Measurements at
Reporting Date Using
 
   Quoted Prices in  
Active Markets for Identical Assets Inputs
   Significant Other
Observable Inputs
   Significant Other Unobservable 
   (Level 1)   (Level 2)   (Level 3) 
Contingent Consideration Liability     —      —   $2,755,034 
The roll forward of the contingent consideration liability is as follows:               
Balance June 30, 2020          $3,182,434 
Contingent Shares issued pursuant to the Acquisition Agreement          $ 
Fair value adjustment          $(427,400)
Balance September 30, 2020          $2,755,034 


 

11

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 3 — PROPERTY AND EQUIPMENT

 

   Useful Life  September 30, 2020  

June 30,

2020

 
Lab Equipment and Instruments  4-7  $534,527   $534,527 
Leasehold Improvements  10  $224,629    224,629 
Furniture Fixtures and Equipment  4-7  $171,975   $171,975 
Total     $931,131   $931,131 
Less Accumulated Depreciation     $(179,558)  $(153,013)
Net Property and Equipment     $751,573   $778,118 

 

During the three months ended September 30, 2020, and 2019, respectively, the Company had depreciation expense of $26,545, and $21,481, respectively.

  

NOTE 4 —INTANGIBLE ASSETS

 

At September 30, 2020 and June 30, 2020, definite-life intangible assets, net of accumulated amortization, consisted of patents on the Company’s products and processes of $76,834 and $77,323, respectively. The patents are recorded at cost and amortized over twenty years from the date of application. Amortization expense for the three months ended September 30, 2020 and 2019 was $3,913 and zero, respectively.

 

At September 30, 2020 and 2019, indefinite life intangibles assets consisted of a licenses agreements classified as In-Process Research and Development (“IPR&D”) intangible assets, which are not amortizable until the intangible asset provides economic benefit, and goodwill.

 

At September 30, 2020 and June 30, 2020, definite and indefinite-life intangible assets consisted of the following: 

 

   Useful Life  June 30,
2020
   Period Change   Effect of Currency Translation   September 30,
2020
 
Definite Life Intangible Assets                   
Patents  20 Years  $299,175   $    13,247    312,422 
Less Accumulated Amortization     $(221,852)  $(3, 913)   (9,823)   (235,588)
Net Definite-Life Intangible Assets     $77,323   $(3,913)   3,424    76,834 
                        
Indefinite Life Intangible Assets                       
License Agreement     $154,824,000             $154,824,000 
Goodwill     $11,640,000             $11,640,000 
Total Indefinite Life Intangible Assets     $166,464,000             $166,464,000 

 

Year ending September 30,    
2021  $11,241 
2022  $15,154 
2023  $15,154 
2024  $15,154 
2025  $15,154 
Thereafter  $4,977 
Total  $76,834 

 

During February 2018, the Company acquired a License Agreement (as licensee) to the HIV therapy being developed as ENOB-HV-01 which consists of a perpetual, fully paid-up, royalty-free, sub-licensable, and sole and exclusive worldwide license to research, develop, use, sell, have sold, make, have made, offer for sale, import and otherwise commercialize certain intellectual property in cellular therapies for the prevention, treatment, amelioration of and/or therapy exclusively for HIV in humans, and research and development exclusively relating to HIV in humans. Because the HIV License Agreement is considered, an IPR&D intangible asset it is classified as an indefinite life asset that is tested annually for impairment.

 

Impairment – Following the fourth quarter of each year, management performs its annual test of impairment of intangible assets by performing a quantitative assessment and determines if it is more than likely than not that, the fair value of the asset is greater than or equal to the carrying value of the asset. The results of the quantitative assessment supported Management’s conclusion that an impairment adjustment was not required as of June 30, 2020.

 

12

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 — LEASES

 

Operating Leases — On November 13, 2017, Enochian entered into a Lease Agreement for a term of five years and two months from November 1, 2017 (the “Term”) with Plaza Medical Office Building, LLC, a California limited liability company (the “Landlord”), as landlord, pursuant to which the Company agreed to lease from the Landlord approximately 2,325 rentable square feet. The base rent increases by 3% each year, and ranges from approximately $8,719 per month for the first year to $10,107 per month for the two months of the sixth year. The Company received $70,800 in tenant improvement allowance in the form of free rent applied over 10 months in equal installments beginning in January of 2018.

   

On June 19, 2018, the Registrant entered into a Lease Agreement for a term of ten years from September 1, 2018 with Century City Medical Plaza Land Co., Inc., pursuant to which the Company agreed to lease approximately 2,453 rentable square feet. On February 20, 2019, the Registrant entered into an Addendum to the original Lease Agreement with an effective date of December 1, 2019, where it expanded the lease area to include another 1,101 square feet for a total rentable 3,554 square feet. The base rent increases by 3% each year, and ranges from $17,770 per month for the remainder of the first year to $23,186 per month for the tenth year. The equalized monthly lease payment for the term of the lease is $20,050. The Company was entitled to $148,168 in contributions toward tenant improvements.

 

The Company identified and assessed the following significant assumptions in recognizing the right-of-use asset and corresponding liabilities:

 

Expected lease term — The expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain that the Company would exercise such options. The Company’s leases have remaining lease terms between 27 months and 83 months. As of September 30, 2020, the weighted-average remaining term is 6.24 years.

 

Incremental borrowing rate — The Company’s lease agreements do not provide an implicit rate. As the Company does not have any external borrowings for comparable terms of its leases, the Company estimated the incremental borrowing rate based on the U.S. Treasury Yield Curve rate that corresponds to the length of each lease. This rate is an estimate of what the Company would have to pay if borrowing on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. As of September 30, 2020, the weighted-average discount rate is 3.99%.

 

Lease and non-lease components — In certain cases the Company is required to pay for certain additional charges for operating costs, including insurance, maintenance, taxes, and other costs incurred, which are billed based on both usage and as a percentage of the Company’s share of total square footage. The Company determined that these costs are non-lease components and they are not included in the calculation of the lease liabilities because they are variable. Payments for these variable, non-lease components are considered variable lease costs and are recognized in the period in which the costs are incurred.

 

For the three months ended September 30, 2020, and September 30, 2019, lease expense charged to general and administrative expenses amounted to $89,684 and $101,521, respectively.

 

Below are the lease commitments for the next 5 years and thereafter:

 

Year Ending June 30th  Lease Expense 
2021  $255,137 
2022  $348,495 
2023  $298,305 
2024  $246,004 
2025  $253,384 
Thereafter  $574,821 
Less imputed interest   (238,535)
Total  $1,737,611 

 

13

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 6 — NOTES PAYABLE

 

Convertible Notes Payable

 

On February 6, 2020, the Company issued two Convertible Notes (the “Convertible Notes”) to an existing stockholder of the Company each with a face value amount of $600,000, convertible into shares of the Company’s Common Stock. The outstanding principal amount of the Convertible Notes is due and payable on February 6, 2023. Interest on the Convertible Notes commenced accruing on the date of issuance at six percent (6%) per annum, computed on the basis of twelve 30-day months, and is compounded monthly on the final day of each calendar month based upon the Principal and all accrued and unpaid Interest outstanding as of such compound date. The interest is payable in cash on a semi-annual basis.

 

The holder of the Convertible Notes has the right at any time prior to the date that is twelve months from issuance to convert all or any part of the outstanding and unpaid Principal and all unpaid Interest into shares of the Company’s Common Stock. The conversion price is equal to $12.00 per share of Common Stock. The Company evaluated the Convertible Notes in accordance with ASC 470-20 and identified that they each contain an embedded conversion feature that shall not be bifurcated from the host document (i.e., the Convertible Notes) as they are not deemed to be readily convertible into cash. All proceeds received from the issuance have been recognized as a liability on the balance sheet. The Convertible Notes balance as of September 30, 2020 and June 30, 2020, was $1,200,000.

 

Note Payable

 

On March 30, 2020 (the “Issuance Date”), the Company issued a Promissory Note in the principal amount of $5,000,000 (the “Unsecured Note”) to Paseco APS, a Danish limited company and an existing stockholder of the Company. The principal amount of the Note will be payable on November 30, 2021 (the “Maturity Date”) and bears interest at a fixed rate of 6% per annum, computed based on the number of days between the Issuance Date and the Maturity Date, which was prepaid by the Company in full on the Issuance Date through the issuance of 188,485 shares of the Company’s Common Stock based on the closing market price on that date for a total value of $501,370. The Company evaluated the Unsecured Note and PIK interest in accordance with ASC 470-Debt and ASC 835-Interest, respectively. Pursuant to ASC 470-20, proceeds received from the issuance are to be recognized at their relative fair value, thus the liability is shown net of the corresponding discount of $493,192, which is the relative fair value of the shares issued for the PIK interest on the closing date using the effective interest method. The discount will be accreted over the life of the Unsecured Note. The Note Payable balance, net of discount at September 30, 2020 is $4,654,765.

 

For the three months ended September 30, 2020, the Company recorded accrued interest and interest expense in the amount of $6,000, and $92,313, respectively. The interest expense includes $73,978 related to the amortization of the discount related to the Unsecured Note. These amounts are reflected in accrued expenses and general and administrative expenses. 

 

NOTE 7 — STOCKHOLDERS’ EQUITY

 

Preferred Stock — The Company has 10,000,000 authorized shares of Preferred Stock, par value $0.0001 per share. At September 30, 2020, and June 30, 2020, there were zero shares issued and outstanding.

 

Common Stock — The Company has 100,000,000 authorized shares of Common Stock, par value $0.0001 per share. At September 30, 2020, and June 30, 2020, there were 46,636,976 and 46,497,409 shares issued and outstanding, respectively.

 

Voting — Holders of Common Stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders, including the election of directors, and do not have any right to cumulate votes in the election of directors.

 

Dividends — Holders of Common Stock are entitled to receive ratably such dividends as the Board from time to time may declare out of funds legally available.

 

Liquidation Rights — In the event of any liquidation, dissolution or winding-up of affairs of the Company, after payment of all of our debts and liabilities, the holders of Common Stock will be entitled to share ratably in the distribution of any of our remaining assets.

 

14

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 7 — STOCKHOLDERS’ EQUITY (Continued)

 

Purchase Agreement with Lincoln Park Capital

 

On July 8, 2020, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company may sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $20,000,000 of shares of our Common Stock from time to time from August 1, 2023.

 

Under the Purchase Agreement, we may direct Lincoln Park, at our sole discretion subject to certain conditions, to purchase up to 200,000 shares of Common Stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 125,000 shares of Common Stock, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $1,000,000. In the event we purchase the full amount allowed for a Regular Purchase on any given business day, we may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price of shares of Common Stock related to the future funding will be based on the then prevailing market prices of such shares at the time of sales as described in the Purchase Agreement.

 

Our sale of shares of Common Stock to Lincoln Park subsequent to the Amendment Date is limited to 12,016,457 shares of Common Stock, representing 19.99% of the shares of the Common Stock outstanding on the Amendment Date unless (i) stockholder approval is obtained, (ii) the average price of all applicable sales to Lincoln Park under the Purchase Agreement equals or exceeds the lower of (A) the closing price of the Common Stock on the Nasdaq Capital Market immediately preceding the date of the Purchase Agreement or (B) the average of the closing prices on the Nasdaq Capital Market for the five Business Days immediately preceding the date of the Purchase Agreement or (ii) to the extent it would cause Lincoln Park to beneficially own more than 9.99% of the Company’s outstanding shares of Common Stock at any given time. 

 

In consideration for entering into the Purchase Agreement, we issued 139,567 shares of Common Stock to Lincoln Park as a commitment fee on July 21, 2020.

 

During the three months ended September 30, 2020, we did not sell any shares of Common Stock to Lincoln Park under the Purchase Agreement.

 

Common Stock Issuances — 

 

As of September 30, 2020, there were no other Common Stock issuances outside of the 139,567 shares of Common Stock issued to Lincoln Park as a commitment fee.

 

On July 3, 2019, the Registrant issued 500,000 shares of Common Stock valued at the price of $2.00 strike price per share pursuant to the exercise of vested options for total proceeds of $1.0 million. 

 

On July 3, 2019, the Registrant issued 500,000 shares of Common Stock valued at the price of $4.42 per share in connection with the acquisition of Enochian Biopharma. This non-cash transaction impacted shareholders’ equity in the amount of $2.2 million.

 

Acquisition of Enochian Biopharma / Contingently issuable shares On February 16, 2018, the Acquisition was completed when the subsidiary merged with and into Enochian Biopharma, with Enochian Biopharma as the surviving corporation. As consideration for the Acquisition, the stockholders of Enochian Biopharma received (i) 18,081,962 shares of Common Stock, and (ii) the right to receive Contingent Shares pro rata upon the exercise or conversion of warrants, which were outstanding at closing. At September 30, 2020, 1,438,122 Contingent Shares are issuable in connection with the Acquisition of Enochian Biopharma.

 

Acquisition of Enochian Denmark   At September 30, 2020 and June 30, 2020, the Company maintained a reserve of 77,249 and 82,237 shares of Common Stock of the Registrant held in escrow according to Danish law (the “Escrow Shares”), respectively, all of which are reflected as issued and outstanding in the accompanying financial statements. The Escrow Shares are reserved to acquire the shares of Enochian Denmark held by non-consenting shareholders of Enochian Denmark on both September 30, 2020 and June 30, 2020, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark. There have been 107,804 shares of Common Stock issued to non-consenting shareholders of Enochian Denmark as of September 30, 2020. During the three months ended September 30, 2020, the Company issued 4,988 shares of Common Stock to such non-consenting shareholders of Enochian Denmark, respectively. There is no impact on outstanding shares as these shares are reflected as issued and outstanding.

 

15

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 7 — STOCKHOLDERS’ EQUITY (Continued)

  

Recognition of Options

 

The Company recognizes compensation costs for stock option awards to employees and directors based on their grant-date fair value. The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the fair values of the stock options granted using the Black-Scholes option-pricing model are as follows:

 

   Enochian
Biosciences Inc.
Expected term (in years)  5.5
Volatility  79.92%-80.03%
Risk free interest rate  0.26%-.34%
Dividend yield  0%

 

The Company recognized stock-based compensation expense related to the options of $316,950 and $226,266 for the three months ended September 30, 2020 and year ended 2019, respectively. At September 30, 2020, the Company had approximately $836,754 of unrecognized compensation cost related to non-vested options.

 

Plan Options

 

On February 6, 2014, the Board adopted the Company’s 2014 Equity Incentive Plan (the “Plan”), and the Company had reserved 1,206,000 shares of Common Stock for issuance in accordance with the terms of the Plan.

 

On October 30, 2019, the Board approved and on October 31, 2019, the Company’s shareholders adopted the Enochian’s 2019 Equity Incentive Plan (the “2019 Plan”), which replaced the 2014 Plan. The 2019 Plan authorized options to be awarded to not exceed the sum of (1) 6,000,000 new shares of Common Stock, and (2) the number of shares of Common Stock available for the grant of awards as of the effective date under the 2014 Plan that, after the effective date of the 2019 Plan, expires, or is terminated, surrendered, or forfeited for any reason without issuance of shares. The remaining shares of Common Stock available for grant related to the 2014 Plan was of 655,769 as of the effective date, this amount along with the new 6,000,000 shares totals 6,655,769 shares of Common Stock available to grant immediately after the effective date of the 2019 Plan.

 

For the three months ended September 30, 2020, the Company granted annual options to purchase 24,196 shares of Common Stock to members of the Board of Directors and Scientific Advisory Board with a one-year vesting period. Options will be exercisable at the market price of the Company’s Common Stock on the date of the grant.

 

For the three months ended September 30, 2019, the Company granted annual options of 13,470 to members of the Board of Directors and Scientific Advisory Board with a one-year vesting period pursuant to their contracts, and granted 20,000 fully vested options to senior employees in pursuant to the 2014 Plan. Options will be exercisable at the market price of the Companys common stock on the date of the grant.

 

To date the Company has granted options under the 2019 Plan (“Plan Options”) to purchase 1,129,638 shares of Common Stock.

 

16

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 7 — STOCKHOLDERS’ EQUITY (Continued)

 

A summary of the status of the Plan Options and Grant Warrants outstanding at September 30, 2020 is presented below:

 

Options Outstanding  Options Exercisable 
   Exercise Prices   Number Outstanding   Weighted Average Remaining Contractual Life (years)   Weighted Average Exercise Price   Number Exercisable   Weighted Average Remaining Contractual Life (years)   Weighted Average Exercise Price 
   $2.69    55,762    9.44   $2.69           $ 
   $3.26    23,006    9.42   $3.26           $ 
   $3.84    11,719    9.84   $3.84           $ 
   $3.85    5,195    9.84   $3.85           $ 
   $3.95    5,063    7.84   $3.95    5,063    7.84   $3.95 
   $4.12    7,282    9.80   $4.12           $ 
   $4.63    10,000    8.90   $4.63    10,000    8.90   $4.63 
   $4.80    50,749    9.25   $4.80           $ 
   $4.85    4,124    8.90   $5.00    4,124    8.90   $5.00 
   $4.90    9,183    8.86   $4.90    9,183    8.86   $4.90 
   $5.00    6,000    8.90   $5.00    6000       $5.00 
   $5.74    15,679    7.97   $5.74    15,679    7.97   $5.74 
   $5.80    7,759    8.03   $5.80    7,759    8.03   $5.80 
   $6.15    60,000    8.69   $6.15    20,000    8.69   $6.15 
   $6.25    24,001    8.44   $6.25    24,001    8.44   $6.25 
   $6.50    300,000    8.15   $6.50    300,000    8.15   $6.50 
   $6.95    4,317    8.53   $6.95    4,317    8.53   $6.95 
   $7.10    10,563    8.42   $7.10    10,563    8.42   $7.10 
   $8.00    519,235    9.42   $8.00    55,695    7.60   $8.00 
Total  $    1,129,638    8.96   $6.72    472,385    8.17   $6.50 

 

A summary of the status of the Plan Options at September 30, 2020 and changes since July 1, 2020 are presented below:

 

       Weighted Average   Average   Weighted Average 
   Shares   Exercise Price   Remaining Life   Intrinsic Value 
                 
Outstanding at beginning of period   1,105,442   $6.78    9.19   $107,931 
Granted   24,196   $3.93    10.0    - 
Exercised   -    -    -    - 
Forfeited   -    -    -    - 
Expired   -    -    -    - 
Outstanding at end of period   1,129,638   $6.72    8.96   $56,990 
Vested and expected to vest                  - 
Exercisable end of period   472,385   $6.50    8.17   $- 

 

At September 30, 2020, the Company had 472,385 exercisable Plan Options. The total intrinsic value of options at September 30, 2020 is zero.  Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) at September 30, 2020 (for outstanding options), less the applicable exercise price.

 

17

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 7 — STOCKHOLDERS’ EQUITY (Continued) 

  

Common Stock Purchase Warrants

 

A summary of the shares of Common Stock, which can be purchased related to the underlying the warrants outstanding for the three-month period as of September 30, 2020, is presented below:

 

       Weighted Average   Weighted Average 
   Shares   Exercise
Price
   Remaining Life 
             
Outstanding at beginning of period   1,438,122   $1.42    1.74 
Granted                   
Exercised       -    -    - 
Cancelled/Expired   -    -    - 
Outstanding at end of period   1,438,122   $1.42    1.74 
Exercisable end of period     1,438,122   $1.42    1.74 

 

    Equivalent Shares   Underlying Warrants   Outstanding   Equivalent Shares Exercisable 
Exercise Prices   Equivalent Shares   Weight Average Remaining Contractual Life (years)   Weight Average Exercise Price   Number Exercisable   Weighted Average Exercise Price 
$1.30    1,413,122    1.76   $1.30    1,413,122   $1.30 
$8.00    25,000    .37   $8.00    25,000   $8.00 
                            
Total    1,438,122    1.74   $1.42    1,438,122   $1.42 

 

The exercise price of certain warrants and the number of shares underlying the warrants are subject to adjustment for stock dividends, subdivisions of the outstanding shares of Common Stock and combinations of the outstanding shares of Common Stock. For so long as the warrants remain outstanding, we are required to keep reserved from our authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the shares underlying the warrants.

 

Restricted Stock Units (RSUs)

 

The Company recognized stock-based compensation expense related to the RSUs of $9,206 and $7,744 for the three months ended September 30, 2020 and 2019, respectively 

 

A summary of the status of Restricted Stock Units outstanding at September 30, 2020 is presented below:

 

       Weighted Average   Weighted Average   Weighted Average 
   Shares   Issuance
Price
   Remaining Life   Intrinsic
Value
 
                 
Outstanding at beginning of period   10,000   $6.15    .77   $ 
Granted       $        $ 
Exercised       $           
Cancelled/Expired       $        $ 
Outstanding at end of period   10,000   $6.15    .77   $ 
Exercisable end of period      $       $ 

 

    Restricted Stock Units Outstanding 
Grant Price   Stock Units   Weight Average Remaining Contractual Life (years)   Weight Average Issuance Price 
 6.15    10,000    .77   $6.15 
Total    10,000    .77   $6.15 

 

18

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 8 — COMMITMENTS AND CONTINGENCIES

 

Consulting Agreements

 

On July 9, 2018, the Company entered into a consulting agreement with G-Tech Bio, LLC, a California limited liability company (“G-Tech”) to assist the Company with the development of the gene therapy and cell therapy modalities for the prevention, treatment, amelioration of HIV in humans, and with the development of a genetically enhanced Dendritic Cell for use as a wide spectrum platform for various diseases (including but not limited to cancers and infectious diseases) (the “G-Tech Agreement”). G-Tech was entitled to consulting fees for 20 months, with a monthly consulting fee of not greater than $130,000 per month. Upon the completion of the 20 months, the monthly consulting fee of $25,000 continued for scientific consulting and knowledge transfer on existing HIV experiments, and will continue until the services are no longer rendered or the agreement is terminated. G-Tech is controlled by certain members of Weird Science. For the three months ended September 30, 2020 and 2019, $50,000 and $375,000 was charged to research and development expenses in our Condensed Consolidated Statements of Operations related to this consulting agreement, respectively.

 

On January 31, 2020, the Company entered into a Statement of Work & License Agreement (the “HBV License Agreement”) by and among the Company, G Tech Bio, LLC, a California limited liability company (“G Tech”), and G Health Research Foundation, a not for profit entity organized under the laws of California doing business as Seraph Research Institute (“SRI”), whereby the Company acquired a perpetual, sublicensable, exclusive license (the “HBV License”) for a treatment under development (the “Treatment”) aimed to treat Hepatitis B Virus (HBV) infections in accordance with its agreement in principle with G-Tech and SRI.

 

The HBV License Agreement states that in consideration for the HBV License, the Company shall provide cash funding for research costs and equipment and certain other in-kind funding related to the Treatment over a 24 month period, and provides for an up-front payment of $1.2 million within 7 days of January 31, 2020, along with additional payments upon the occurrence of certain benchmarks in the development of the technology set forth in the HBV License Agreement, in each case subject to the terms of the HBV License Agreement. Additionally, the HBV License Agreement provides for cooperation related to the development of intellectual property related to the Treatment and for a 2% royalty to G Tech on any net sales that may occur under the HBV License. On February 6, 2020, the Company paid the $1.2 million aforementioned.

 

The cash funding for research costs and equipment pursuant to the HBV License Agreement consist of monthly payments amounting to $144,500 that cover scientific staffing resources to complete the project as well as periodic payments for materials and equipment needed to complete the project. During the three months ended September 30, 2020, the Company paid $433,500 for scientific staffing resources and $400,000 for mouse studies conducted by a collaborating partner.

 

The HBV License Agreement contains customary representations, warranties and covenants of the parties with respect to the development of the Treatment and the HBV License. G Tech and SRI are each controlled by certain members of Weird Science, LLC, a shareholder of the Company.

 

Shares held for non-consenting shareholdersThe 77,249 remaining shares of Common Stock have been reflected as issued and outstanding in the accompanying financial statements. There were 4,988 shares of Common Stock issued to such non-consent shareholders during the three months ended September 30, 2020. (See Note 7) 

 

Employment and Service Agreements  - The Company has an agreement with the Executive Vice-Chair, where he fulfills the duties as prescribed by the Company’s bylaws and receives annual compensation in the amount of $430,000, plus 300,000 options that vested immediately. Dr. Dybul was given a one-time grant of options to purchase 450,000 shares of Common Stock at a strike price of $8.00 per share on June 11, 2020. The Company executed a consulting agreement for services for a Senior Medical Advisor of $210,000 on a part-time basis. The Company maintains employment agreements with other staff in the ordinary course of business.

 

Contingencies – From time to time, the Company is involved in routine legal and administrative proceedings and claims of various types. While any proceedings or claim contains an element of uncertainty, management does not expect a material impact on our results of operations or financial position. 

 

19

 

 

ENOCHIAN BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 9 — RELATED PARTY TRANSACTIONS

   

On July 9, 2018, the Company entered into a consulting agreement with G-Tech to assist the Company with the development of the gene therapy and autologous and allogenic cell therapy modalities for the prevention, treatment, amelioration of HIV in humans, and with the development of a genetically enhanced Allogenic Dendritic Cell for use as a wide spectrum platform for various diseases (including but not limited to cancers and infectious diseases). (See Note 8)

 

On January 31, 2020, the Company entered into the HBV License Agreement by and among the Company, G Tech and SRI, whereby the Company acquired the HBV License for the Treatment. (See Note 8)

 

NOTE 10 — SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report. There have been no subsequent events of a significant and reportable nature as of November 12, 2020.

 

20

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward-Looking Statement Notice

 

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Enochian Biosciences, Inc. formerly DanDrit Biotech USA, Inc. (“Enochian”, and together with its subsidiaries, the “Company”, “we” or “us”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of the business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

 

Our Business

 

We are a pre-clinical stage biotechnology company committed to using our genetically modified cellular and immune-therapy technologies to prevent or potentially cure HIV, HBV and to potentially provide life-long cancer remission of some of the deadliest cancers. We do this by genetically modifying, or re-engineering, different types of cells, depending on the therapeutic area and then injecting or reinfusing the re-engineered cells back into the patient to provide treatment. In some of our interventions, immunotherapy is used.  

 

To date, our operations have been funded by sales of our securities and the issuance of debt. Sales revenue will not support our current operations, and we expect this to be the case until our therapies or products are approved for marketing in the United States and Europe. Even if we are successful in having our therapies or products approved for sale in the United States and Europe, we cannot guarantee that a market for the product will develop. We may never be profitable. 

 

Human Immunodeficiency Virus, or HIV, and Acquired Immunodeficiency Syndrome, or AIDS

 

HIV attacks the bodys own immune system, specifically killing off CD4+ cells, or T-cells. Left untreated, HIV reduces the number of T-cells in the body, leading to AIDs, a condition where the body cannot fight off common infections and disease.

 

Currently there are over 30 antiretroviral drugs, or ART, approved by the U.S. Food and Drug Administration (“FDA”) to treat HIV patients but these drugs are expensive, require daily adherence and can have significant side effects over time. In addition, approximately 1 million people, including in high-income countries, continue to die from HIV/AIDS due to resistance to ART or lack of access. Today there are no treatments that can eliminate the reservoir of cells that contain HIV from the body. In other words, treatment is life-long.

 

There have been several efforts to cure HIV by re-engineering a person’s own T-cells so that such cells no longer express C-C chemokine receptor type 5, also known as CCR5, which is an essential co-receptor for HIV to enter T-cells. A mutation that blocks expression of CCR5 on T-cells occurs in a small percentage of people with no known adverse effects. The “Berlin patient”, and more recently the “London patient” are HIV- positive persons who developed cancer and were treated with a bone marrow transplant with cells derived from persons with a naturally occurring deletion of CCR5. The Berlin and London patients seem to be effectively cured from HIV providing a proof of concept that HIV can be cured. However, because the transplanted cells come from another person, such transplants are highly toxic and can result in death in a significant proportion of patients. Given the success with these two patients, several researchers and companies have attempted to replicate the experience of such patients by genetically modifying the T-cells of the HIV-positive patients themselves and reinfusing them with T-cells that do not express CCR5. Because the transplanted cells are from the same person, the risks to the patient are much lower. The uptake, or engraftment of the modified, reinfused cells, however, has not been optimal, leading to a failure to achieve a cure. In addition, the transplant conditioning that has been used is myeloablative chemotherapy, wiping out the patient’s immune system, which has inherent risks and can have long-term side effects including the risk of developing cancer.

 

21

 

 

ENOB-HV-01 is a novel, proprietary approach with the potential to overcome the failures of recent efforts. The intervention: 1) provides gene-modified, reinfused cells with a competitive advantage over non-modified cells in the HIV-positive person, with the potential to significantly increase engraftment; and 2) avoids the need for myeloablative chemotherapy and, in fact, could potentially be given on an outpatient basis. The Company met with the FDAs INTERACT team on June 2, 2020. INTERACT is the first available FDA interaction and is a key step in the process towards a potential Investigational New Drug (IND) to study First-in-Human products potentially leading to marketing authorization via Biologics License Application (BLA). The FDAs Center for Biologics Evaluation and Research (CBER) has numerous INTERACT requests and only grants meetings that are deemed appropriate for this early FDA engagement. The Enochian management team considered the meeting to have been successful with strong alignment between Enochian’s approach to developing ENOB-HV-01 and the comments of the FDA reviewers.

 

Initial scientific findings from a mouse study on the ENOB-HV-01 approach were presented at the annual conference of the American Society of Cell and Gene Therapy (ASCGT) in May 2020.

 

We are also developing ENOB-HV-11 and ENOB-HV-12 that will utilize a novel cellular- and immunotherapy approach that could potentially provide for a preventative vaccine and a therapeutic vaccine, respectively. A non-human primate study is in process.

 

We are in the early discovery phase of two additional product candidates related to our HIV pipeline. ENOB-HV-31, which is an in vivo gene therapy, and ENOB-HV-32, which is a peptide drug for packaging and distribution.  

 

Hepatitis B (HBV)   

 

Despite the availability of an effective vaccine, Hepatitis B Virus (HBV) is the worlds most common serious liver infection. It is the leading cause of liver cancer and the second leading cause of cancer deaths in the world. Two billion people have been infected with HBV, approximately 250 million have chronic HBV infection, and nearly one million people die every year.

 

Current efforts to develop novel treatment or cure largely focus on approaches to deplete the pool of a certain type of HBV DNA. Enochian has partnered with Seraph Research Institute to develop an innovative approach to co-opt HBV polymerase to induce the death of liver cells infected with the virus.

 

The initial in vitro and in vivo work was presented at the biannual HEP DART meeting in December of 2019, where it was selected as one of the best new therapies/novel strategies. Additional data was presented at the annual conference of the ASCGT in May

2020.

 

On July 27, 2020, Enochian announced the creation of an HBV Scientific Advisory Board comprised of distinguished leaders in HBV disease, treatment and cure.  

 

Cancer

 

Based on learning from peer-reviewed publications of Phase I/IIa trials, we have designed an innovative therapeutic vaccination platform that could potentially be used to induce life-long remissions from some of the deadliest solid tumors. Initial preclinical in vitro studies have been encouraging. We plan to initially target pancreatic cancer, triple-negative breast cancer, glioblastoma, and renal cell carcinoma. The platform might also allow for non-specific immune enhancement that could have impact against a broad array of solid tumors. As with HIV, our approach would potentially allow for outpatient therapy without ablating or significantly impairing the patient’s immune system, as many current approaches require.

 

Recent Developments

 

On July 8, 2020, we entered into a purchase agreement (the “LPC Purchase Agreement”) with Lincoln Park Capital Fund, LLC, (“LPC”), pursuant to which LPC is committed to purchase, and we have the right, but not the obligation, to sell to LPC up to an aggregate of $20,000,000 of our Common Stock, subject to certain limitations and conditions set forth in the LPC Purchase Agreement, including a limitation on the number of shares of Common Stock we can put to LPC and the pricing parameters for the sales, and we agreed to issue 139,567 shares of our Common Stock as commitment shares. (see Note 7)

 

Corporate History

 

On February 16, 2018, we completed our acquisition of Enochian Biopharma pursuant to an acquisition agreement, dated January 12, 2018, by and among the Registrant, its wholly owned subsidiary DanDrit Acquisition Sub, Inc., Enochian Biopharma and Weird Science with Enochian Biopharma surviving as a wholly owned subsidiary of the Registrant. As consideration for the acquisition, the stockholders of Enochian Biopharma received (i) 18,081,962 shares of Common Stock and (ii) the right to receive Contingent Shares pro rata upon the exercise or conversion of warrants, which were outstanding at closing (See Note 7.)

 

22

 

 

COVID-19 Outlook

 

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly affected the economic conditions in the U.S. A number of states, counties and municipalities issued orders requiring persons who were not engaged in essential activities and businesses to remain at home. On March 27, 2020, the US enacted the Coronavirus Aid, Relief and Economic Security Aid (“CARES Act”) to help stimulate an economic recovery and additional legislation related to COVID-19 has been proposed; however, there are no reliable estimates of how long the pandemic will last or how many people are likely to be affected by it. No one knows what over-all effects the COVID-19 pandemic will have on economic conditions during the remainder of 2020.

 

Our senior management team is monitoring COVID-19’s impact daily and will continue to adjust our operations as necessary. However, the impact of this event on the Company’s results of operations, financial position, and liquidity or capital resources cannot be reasonably estimated at this time.

 

Results of Operations for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 

 

The following table sets forth our revenues, expenses and net loss for the three months ended September 30, 2020 and September 30, 2019. The financial information below is derived from our unaudited condensed consolidated financial statements.

 

   For the Three Months 
   Ended 
  

September 30,

(Unaudited)

 
   2020   2019 
Revenues  $   $ 
           
Cost of Goods Sold  $   $ 
           
Gross profit (Loss)  $   $ 
           
Operating Expenses          
General and administrative expenses   1,777,923    1,900,812 
Research and development expenses   1,050,376    520,192 
Depreciation and amortization   30,458    21,481 
           
Total Operating Expense  $2,858,757   $2,442,485 
           
LOSS FROM OPERATIONS  $(2,858,787)  $(2,442,485)
           
Other Income (Expense)          
Change in fair value of contingent consideration   427,400    (1,942,000)
Interest income (expense)   92,313     
Gain (loss) on currency transactions        286,755 
Interest and other income   4,306    14,553 
Total Other (Expense) Income   339,393    (1,640,692)
           
Loss Before Income Taxes   (2,519,365)   (4,083,177)
           
Income Tax Benefit  $122,794   $ 
           
NET LOSS  $(2,396,570)  $(4,083,177)
           
BASIC AND DILUTED LOSS PER SHARE  $(0.05)  $(0.09)
          
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED   46,605,118    46,241,315 

 

23

 

 

Revenues

 

Revenues from operations for the three months ended September 30, 2020, and September 30, 2019 were $0 and $0, respectively. 

 

Cost of Goods Sold

 

Our cost of goods sold was $0 and $0 during the three months ended September 30, 2020, and September 30, 2019, respectively.

 

Gross profit (Loss)

 

Gross profit for the three months ended September 30, 2020, and September 30, 2019 was $0 and $0, respectively.

 

Expenses

 

Our operating expenses for the three months ended September 30, 2020, and September 30, 2019 were $2,858,757 and $2,442,485, respectively, representing an increase of $416,272, or approximately 17%. The increase in operating expenses primarily relate to the HBV License Agreement.

 

General and administrative expenses for the three months ended September 30, 2020, and September 30, 2019 were $1,777,923 and $1,900,812, respectively, representing a decrease of $122,889, or approximately 6.5%. The decrease in general and administrative expenses is an aggregate of individual immaterial variances.

 

Research and development expenses for the three months ended September 30, 2020 and September 30, 2019 were $1,050,376 and $520,192, respectively, representing an increase of $530,184 or approximately 102%. The increases in research and development expenses are primarily due to the HBV License Agreement related payments of $833,500, offset by the reduction of $300,000 HIV License Agreement payments paid in 2019 that contractually expired in February 2020. All other R&D costs have remained relatively stable during this period.

 

The Company recorded other income of $339,393 for the three months ended September 30, 2020, compared to other (expense) of ($1,640,692) for the three months ended September 30, 2019, representing an increase of $1,980,085. The increase in other income (expense) is primarily attributable to the change in fair value of the contingent consideration liability related to the Enochian BioPharma Acquisition of $2,369,400, offset by the increase in interest expense of $92,313 related to our notes payables, and the decrease in gain on currency transactions that occurred in the prior year.

 

Net Loss

 

Net loss for the three months ended September 30, 2020, and September 30, 2019, was ($2,396,570) or ($0.05) per share and ($4,083,177) or ($0.09) per share, respectively, representing a decrease in loss of $1,686,607, or approximately 41%. The decrease in loss was primarily due to the increase in fair value of the contingent consideration of $2,369,400, offset by the increase in research and development expenses of $530,184 primarily related to the HBV License Agreement, and the decrease in gain on currency transactions of $286,755 from the prior year, and the tax benefit of $122,794 related to R&D tax credit received by our Danish subsidiary for prior years.

 

Liquidity and Capital Resources

 

We have historically satisfied our capital and liquidity requirements through funding from shareholders, the issuance of convertible notes and the sale of our Common Stock and warrants. We currently have no sales revenue to support our current operations and we expect this to be the case until our therapies or products are approved for marketing in the United States and Europe. Even if we are successful in having our therapies or products approved for sale in the United States and Europe, we cannot guarantee that a market for the product will develop. We may never be profitable. At this time, we believe we have sufficient liquidity and access to committed funds to fund our operations for the next twelve months.

 

At this time, we believe we have sufficient liquidity and access to committed funds to fund our operations for the next twelve months. We may need additional funds for (a) purchase of equipment and, (b) research and development, specifically to open an Investigational New Drug Application (IND) (The first step in the drug review process by the FDA) for ENOB-HV01, to continue our research and development of ENOB-HV11/12, to fund the HBV License Agreement in furtherance of the Treatment for Hepatitis B, and possible future strategic acquisitions of businesses, products or technologies complementary to our business. If additional funds are required, we may raise such funds from time to time through public or private sales of our equity or debt securities. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could materially adversely affect our growth plans and our financial condition and results of operations. 

 

24

 

  

As of September 30, 2020, the Company had $5,965,661 in cash and working capital of $5,233,356 as compared to $8,696,361 in cash and working capital of $7,606,411 as of June 30, 2020, a decrease of 31.4 % and 31.2%, respectively.

 

 Assets

 

Total assets at September 30, 2020, were $175,133,368 compared to $178,102,059 as of June 30, 2020. The decrease in total assets were primarily due to the decrease in cash of $2,730,700. The change is primarily attributed to the following expenditures, $1,050,376 in research and development costs primarily related to the HBV License Agreement, and general and administrative expenses of $1,010,738 net of non-cash items.

 

Liabilities

 

Total Liabilities at September 30, 2020, were $10,903,132 compared to $11,829,798 as of June 30, 2020. The decrease in total liabilities were primarily related to reduction in accounts payable trade that totaled approximately $310,501 due to timing, and the decrease of approximately $427,400 in the contingent consideration liability as a result of mark to market adjustment.

 

Following is a summary of the Company’s cash flows (used by) provided by operating, investing, and financing activities:

 

   Three
Months
Ended
September 30,
2020
   Three
Months
Ended
September 30,
2019
 
Net Cash  (Used by) Operating Activities  $(2,755,665)  $(1,800,587)
Net Cash (Used by) Investing Activities       (68,616)
Net Cash Provided by Financing Activities       1,000,000 
(Loss) Gain  on Currency Translation   24,965    (274,769)
(Decrease) in Cash and Cash Equivalents  $(2,730,700)  $(1,143,972)

 

Cash Flows

 

Cash used in operating activities for the three months ended September 30, 2020, and September 30, 2019 was ($2,755,665) and ($1,800,587), respectively. Cash used in operating activities during the current period included $1,050,376 in research and development costs primarily related to the HBV License Agreement, and general and administrative expenses of $1,301,782 net of non-cash items, and the payment of approximately $200,000 related to prior year accruals

 

There were no investing activities during the three months ended September 30, 2020, and $68,616 for the three months ended September 30, 2019.

 

Cash provided by financing activities for the three months ended September 30, 2020 and September 30, 2019, was $0 and $1,000,000, respectively. There were no financing activities during the three months ended September 30, 2020. For the three months ended September 30, 2019, the Company received financing from the exercising of warrants held by shareholders.

 

Off-Balance Sheet Arrangements

 

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Significant Accounting Policies and Critical Accounting Estimates

 

The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result, of the need to make estimates regarding matters that are inherently uncertain.

 

For a full explanation of our accounting policies, see Note 1 to the unaudited condensed consolidated financial statements.

 

25

 

  

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our Principal Executive Officer and Chief Financial Officer (the “Certifying Officers”) are responsible for establishing and maintaining disclosure controls and procedures for the Company.  The Certifying Officers have designed such disclosure controls and procedures to ensure that material information is made known to them, particularly during the period in which this Report was prepared.

 

The Certifying Officers are responsible for establishing and maintaining adequate internal control over financial reporting for the Company used the “Internal Control over Financial Reporting Integrated Framework” issued by Committee of Sponsoring Organizations (“COSO”) to conduct an extensive review of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act, Rules 13a-15(e) and 15-d-15(e)) as of the end of each of the periods covered by this Report (the “Evaluation Date”).  Based upon that evaluation, the Certifying Officers concluded that, as of September 30, 2020, our disclosure controls and procedures were not effective in ensuring that the information we were required to disclose in reports that we file or submit under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The deficiencies are attributed to the fact that the Company does not have adequate resources to address complex accounting issues, as well as an inadequate number of persons to whom it can segregate accounting tasks within the Company so as to ensure the segregation of duties between those persons who approve and issue payment from those persons who are responsible to record and reconcile such transactions within the Company’s accounting system.  These control deficiencies will be monitored and attention will be given to the matter as we continue to accelerate through our current growth stage.

 

The Certifying Officers based their conclusion on the fact that the Company has identified material weaknesses in controls over financial reporting, detailed below.  In order to reduce the impact of these weaknesses to an acceptable level, the Company has contracted with consultants with expertise in U.S. GAAP and SEC financial reporting standards to review and compile all financial information prior to filing that information with the SEC.  However, even with the added expertise of these consultants, we still expect to be deficient in our internal controls over disclosure and procedures until sufficient capital is available to hire the appropriate internal accounting staff and individuals with requisite GAAP and SEC financial reporting knowledge.  There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting during the three ended September 30, 2020 that have materially affected or are reasonably likely to materially affect our internal controls.

 

26

 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

There are presently no material pending legal proceedings to which the Company or any of its subsidiaries, is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

Item 1A. Risk Factors. 

 

Risk factors that may affect our business and financial results are discussed within Item 1A “Risk Factors” of our annual report for the fiscal year ended June 30, 2020 on Form 10-K (“2020 Form 10-K”) filed with the SEC on September 23, 2020. There have been no material changes to the disclosures relating to this item from those set forth in our 2020 Form 10-K.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

 

Item 6. Exhibits.

 

  (a) Exhibits required by Item 601 of Regulation S-K.

 

Exhibit No.   Description
     
10.1*   Purchase Agreement, dated July 8, 2020, by and between the Company and Lincoln Park Capital Fund, LLC (1)
     
10.2*   Registration Rights Agreement, dated July 8, 2020, by and between the Company and Lincoln Park Capital Fund, LLC (1)
     
31.1**   Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
     
31.2**   Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
     
32.1***   Certification of Principal Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350
     
32.2***   Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350
     
101.INS   XBRL Instance Document*
     
101.SCH   XBRL Taxonomy Extension Schema*
     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase*
     
101.DEF   XBRL Taxonomy Extension Definition Linkbase*
     
101.LAB   XBRL Taxonomy Extension Label Linkbase*
     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase*

  

* Filed as an exhibit to the Company’s Current Report on Form 8-K, filed with the SEC on July 14, 2020.

**

Filed herewith. 

*** Furnished herewith.

 

27

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: November 12, 2020 ENOCHIAN BIOSCIENCES, INC.
     
  By: /s/ Mark Dybul
    Mark Dybul  
    Executive Vice Chair
    (Principal Executive Officer)
     
     
  By: /s/ Luisa Puche
    Luisa Puche
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

28

 

EX-31.1 2 e2200_ex31-1.htm EXHIBIT 31.1

Exhibit 31.1

 

OFFICER’S CERTIFICATE

PURSUANT TO SECTION 302

 

I, Mark Dybul, certify that:

 

1.      I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2020 of Enochian Biosciences, Inc.;

 

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 12, 2020 By: /s/ Mark Dybul 
  Name: Mark Dybul
  Title: Executive Vice Chair
(Principal Executive Officer)

 

EX-31.2 3 e2200_ex31-2.htm EXHIBIT 31.2

Exhibit 31.2

 

OFFICER’S CERTIFICATE

PURSUANT TO SECTION 302

 

I, Luisa Puche, certify that:

 

1.      I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2020 of Enochian Biosciences, Inc.;

 

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 12, 2020 By: /s/ Luisa Puche
  Name: Luisa Puche
  Title:

Chief Financial Officer

(Principal Financial Officer)

EX-32.1 4 e2200_ex32-1.htm EXHIBIT 32.1

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

  

In connection with the Quarterly Report of Enochian Biosciences, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2020 as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

1.      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

 

Date: November 12, 2020 By: /s/ Mark Dybul
  Name: Mark Dybul
  Title: Executive Vice Chair
(Principal Executive Officer)

   

A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

EX-32.2 5 e2200_ex32-2.htm EXHIBIT 32.2

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

  

In connection with the Quarterly Report of Enochian Biosciences, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2020, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

1.      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

 

Date: November 12, 2020 By: /s/ Luisa Puche 
  Name: Luisa Puche
  Title: Chief Financial Officer
(Principal Financial Officer)

   

A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

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26545 21481 76834 77323 299175 312422 -221852 -235588 -3913 -3913 0 3424 -9823 13247 166464000 166464000 154824000 154824000 11640000 11640000 On November 13, 2017, Enochian entered into a Lease Agreement for a term of five years and two months from November 1, 2017 (the "Term") with Plaza Medical Office Building, LLC, a California limited liability company (the "Landlord"), as landlord, pursuant to which the Company agreed to lease from the Landlord approximately 2,325 rentable square feet. 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The equalized monthly lease payment for the term of the lease is $20,050. The Company was entitled to $148,168 in contributions toward tenant improvements. 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Document and Entity Information - shares
3 Months Ended
Sep. 30, 2020
Nov. 12, 2020
Document and Entity Information [Abstract]    
Entity Registrant Name Enochian Biosciences Inc  
Entity Central Index Key 0001527728  
Document Type 10-Q  
Document Period End Date Sep. 30, 2020  
Amendment Flag false  
Current Fiscal Year End Date --06-30  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Shell Company false  
Entity File Number 001-38758  
Entity Incorporation, State or Country Code DE  
Entity Interactive Data Current Yes  
Entity Common Stock, Shares Outstanding   46,636,976
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2021  
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
Sep. 30, 2020
Jun. 30, 2020
Current Assets:    
Cash $ 5,965,661 $ 8,696,361
Other receivables 1,982
Prepaid expenses 99,872 242,866
Total Current Assets 6,065,533 8,941,209
Property and equipment, net 751,573 778,118
OTHER ASSETS    
Definite life intangible assets, net 76,834 77,323
Indefinite life intangible assets 154,824,000 154,824,000
Goodwill 11,640,000 11,640,000
Deposits and other assets 137,550 137,550
Right of use assets 1,637,878 1,703,859
Total Other Assets 168,316,262 168,382,732
TOTAL ASSETS 175,133,368 178,102,059
CURRENT LIABILITIES:    
Accounts payable - trade 282,376 592,877
Accrued Expenses 273,345 470,636
Current portion of operating lease liabilities 276,456 271,285
Total Current Liabilities 832,177 1,334,798
NON-CURRENT LIABILITIES:    
Contingent consideration liability 2,755,034 3,182,434
Lease liabilities, non-current 1,461,156 1,531,779
Convertible Notes Payable-LT 1,200,000 1,200,000
Notes payable - LT, net of discount 4,654,765 4,580,787
Total Liabilities 10,903,132 11,829,798
Commitments and Contingencies
STOCKHOLDERS' EQUITY :    
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Common stock, par value $0.0001, 100,000,000 shares authorized, 46,636,976 shares issued and outstanding at September 30, 2020; 46,497,409 shares issued and outstanding at June 30, 2020 4,664 4,650
Additional paid-in capital 230,823,367 230,497,225
Accumulated deficit (66,584,768) (64,188,198)
Accumulated other comprehensive loss (13,027) (41,416)
Total Stockholders' Equity 164,230,236 166,272,261
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 175,133,368 $ 178,102,059
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Sep. 30, 2020
Jun. 30, 2020
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common Stock, shares issued 46,636,976 46,497,409
Common stock, shares outstanding 46,636,976 46,497,409
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
3 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Income Statement [Abstract]    
Revenues
Cost of Goods Sold
Gross profit (Loss)
Operating Expenses    
General and administrative 1,777,923 1,900,812
Research and development 1,050,376 520,192
Depreciation and amortization 30,458 21,481
Total Operating Expense 2,858,757 2,442,485
LOSS FROM OPERATIONS (2,858,757) (2,442,485)
Other Income (Expense)    
Change in fair value of contingent consideration 427,400 (1,942,000)
Interest income (expense) (92,313)
Gain (loss) on currency transactions 286,755
Interest and other income 4,306 14,553
Total Other Income (Expense) 339,393 (1,640,692)
Loss Before Income Taxes (2,519,365) (4,083,177)
Income Tax Benefit 122,794
NET LOSS $ (2,396,570) $ (4,083,177)
BASIC AND DILUTED LOSS PER SHARE $ (0.05) $ (0.09)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 46,605,118 46,241,315
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CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS (UNAUDITED) - USD ($)
3 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Statement of Comprehensive Income [Abstract]    
Net Loss $ (2,396,570) $ (4,083,177)
Foreign Currency Translation, Adjustments 28,389 (278,656)
Other Comprehensive Loss $ (2,368,181) $ (4,361,833)
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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($)
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Income
Total
Beginning Balance, Value at Jun. 30, 2019 $ 4,527 $ 225,765,432 $ (52,771,840) $ 101,818 $ 173,099,937
Beginning Balance, Shares at Jun. 30, 2019 45,273,924        
Stock issued pursuant to warrants exercised, Value $ 50 999,950 1,000,000
Stock issued pursuant to warrants exercised, Shares 500,000        
Contingent Share issued pursuant to Acquisition Agreement, Value $ 50 2,209,950 2,210,000
Contingent Share issued pursuant to Acquisition Agreement, Shares 500,000        
Stock-based compensation 234,010 234,010
Net Loss (4,083,177) (4,083,177)
Foreign Currency Translation Adjustment (278,656) (278,656)
Ending Balance, Value at Sep. 30, 2019 $ 4,627 229,209,342 (56,855,017) (176,838) 172,182,114
Ending Balance, Shares at Sep. 30, 2019 46,273,924        
Beginning Balance, Value at Jun. 30, 2020 $ 4,650 230,497,225 (64,188,198) (41,416) 166,272,261
Beginning Balance, Shares at Jun. 30, 2020 46,497,409        
Issuance of commitment shares, Value $ 14 (14)
Issuance of commitment shares, Shares 139,567        
Stock-based compensation 326,156 326,156
Net Loss (2,396,570) (2,396,570)
Foreign Currency Translation Adjustment 28,389 28,389
Ending Balance, Value at Sep. 30, 2020 $ 4,664 $ 230,823,367 $ (66,584,768) $ (13,027) $ 164,230,236
Ending Balance, Shares at Sep. 30, 2020 46,636,976        
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
3 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Statement of Cash Flows [Abstract]    
NET LOSS $ (2,396,570) $ (4,083,177)
ADJUSTMENT TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:    
Depreciation and amortization 30,458 21,481
Change in contingent consideration liability (427,400) 1,942,000
Stock Based Compensation Expense 326,156 234,010
ROU assets 65,981 68,866
Amortization of Discount of Notes Payable 73,978
CHANGES IN ASSETS AND LIABILITIES:    
Other Receivables 1,982 6,098
Prepaid Expenses/Deposits 142,994 135,793
Accounts Payable (310,501) 71,022
Accrued Expenses (197,291) (136,424)
Operating Lease Liabilities (65,452) (60,256)
NET CASH USED IN OPERATINGACTIVITIES (2,755,665) (1,800,587)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment (68,616)
NET CASH USED IN INVESTING ACTIVITIES (68,616)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from exercise of warrants 1,000,000
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,000,000
(Loss) on Currency Translation 24,965 (274,769)
NET CHANGE IN CASH (2,730,700) (1,143,972)
CASH, BEGINNING OF PERIOD 8,696,361 12,282,224
CASH, END OF PERIOD 5,965,661 11,138,252
Cash paid during the quarter end for:    
Interest 42,365
Income Taxes 37
Non-cash operating, investing and financing Activities:    
Contingent Shares issued in connection with Acquisition Agreement $ 2,210,000
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THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 — THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   

Business– Enochian BioSciences Inc., (“Enochian”, or “Registrant”, and together with its subsidiaries, the “Company”, “we” or “us”) is a pre-clinical stage biotechnology company committed to using our genetically modified cellular and immune-therapy technologies to prevent or potentially cure HIV, Hepatitis B (HBV), and to provide potentially life-long cancer remission of some of the deadliest cancers. 

 

Basis of Presentation- The Company prepares consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and follows the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying financial statements are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2020 and 2019 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2020 audited financial statements. The results of operations for the periods ended September 30, 2020 and 2019 are not necessarily indicative of the operating results for the full year.

 

Consolidation - For the three months ended September 30, 2020 and 2019, the consolidated financial statements include the accounts and operations of the Registrant, and its subsidiaries. All material inter-company transactions and accounts have been eliminated in the consolidation.

 

Reclassification–Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation. For the three months ended September 30, 2019, we reclassified consulting expense of $31,850, to general and administrative expenses.

 

Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated. Significant estimates include the fair value and potential impairment of intangible assets, and fair value of equity instruments issued.

 

COVID-19- During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly affected the economic conditions in the U.S. A number of states, counties and municipalities issued orders requiring persons who were not engaged in essential activities and businesses to remain at home. On March 27, 2020, the US enacted the Coronavirus Aid, Relief and Economic Security Aid (“CARES Act”) to help stimulate an economic recovery; however, there are no reliable estimates of how long the pandemic will last or how many people are likely to be affected by it. No one knows what over-all effects the COVID-19 pandemic will have on economic conditions during the remainder of the fiscal year.

 

Our senior management team is monitoring COVID-19’s impact daily and will continue to adjust our operations as necessary. However, the impact of this event on the Company’s results of operations, financial position, and liquidity or capital resources cannot be reasonably estimated at this time.

 

Functional Currency & Foreign currency translation - The functional currency of Enochian Denmark is the Danish Kroner (“DKK”). The Company’s reporting currency is the U.S. Dollar for the purpose of these financial statements. The Company’s balance sheet accounts are translated into U.S. dollars at the period-end exchange rates and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during the periods ended September 30, 2020, and June 30, 2020, and September 30, 2019. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred.

 

Cash and Cash Equivalents —The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had balances held in financial institutions in Denmark and in the United States in excess of federally insured States amounts at September 30, 2020 and June 30, 2020 of $5,965,661 and $8,696,361, respectively.

 

Property and Equipment — Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized, upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed for financial statement purposes on a straight-line basis over the estimated useful lives of the assets, which range from four to ten years (See Note 3).

 

Intangible Assets - The Company has both Definite and Indefinite life intangible assets.

 

Definite life intangible assets include patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, “Goodwill and Other Intangible Assets”. Intangible assets are recorded at cost. Patent costs consist of costs incurred to acquire the underlying patent. If it is determined that a patent will not be issued, the related remaining capitalized patent costs are charged to expense. Intangible assets are amortized on a straight-line basis over their estimated useful life. The estimated useful life of patents is twenty years from the date of application.

 

Indefinite life intangible assets include license agreements and goodwill. The Company accounts for indefinite life intangible assets in accordance with ASC 350, “Goodwill and Other Intangible Assets”. License agreement costs represent the Fair Value of the license agreement on the date acquired and are tested annually for impairment. The fair value analysis performed on the license agreements, and the fair value analysis performed on goodwill supported that both indefinite life intangible assets are not impaired as of June 30, 2020, and no impairment is deemed necessary as of September 30, 2020. (See Note 4)

 

Goodwill —Goodwill is not amortized but is evaluated for impairment annually as of June 30th or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

 

We test for goodwill impairment at the reporting unit level, which is one level below the operating segment level. Our detailed impairment testing involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit and is based on discounted cash flows or relative market-based approaches. If the fair value exceeds carrying value, then it is concluded that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.

 

The carrying value of goodwill at September 30, 2020, was $11,640,000. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to test for impairment losses on goodwill. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to an impairment charge that could be material.

 

Impairment of Long-Lived Assets — Long-lived assets, such as property, plant, and equipment, patents and licenses are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

 

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values.

 

Leases — In accordance with ASC Topic 842, the Company determined the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter. The lease terms include any renewal options and termination options that the Company is reasonably assured to exercise, if applicable. The present value of lease payments is determined by using the implicit interest rate in the lease, if that rate is readily determinable; otherwise, the Company develops an incremental borrowing rate based on the information available at the commencement date in determining the present value of the future payments.

 

Rent expense for operating leases is recognized on a straight-line basis, unless the operating lease right of use assets have been impaired, over the reasonably assured lease term based on the total lease payments and is included in operating expense in the consolidated statement of operations. For operating leases that reflect impairment, the Company will recognize the amortization of the operating lease right-of-use assets on a straight-line basis over the remaining lease term with rent expense still included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

 

The Company has elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, insurance and taxes, which vary based on future outcomes, and thus are recognized in general and administrative expenses when incurred. (See Note 5).

 

Research and Development Expenses — The Company expenses research and development costs incurred in formulating, improving, validating and creating alternative or modified processes related to and expanding the use of the HIV, HBV, and Cancer therapies and technologies for use in the prevention, treatment, amelioration of and/or therapy for HIV, HBV, and Cancer. Research and development expenses for the three months ended September 30, 2020 and 2019, amounted to $1,050,376, and $520,192, respectively.

 

Income Taxes — The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes, which requires an asset and liability approach for accounting for income taxes. During the quarter ended September 30, 2020, the Company’s Danish subsidiary received a payment for an R&D tax credit owed under Danish statutory tax laws in the amount of $122,831.

 

Loss Per Share — The Company calculates earnings/(loss) per share in accordance with FASB ASC 260 Earnings Per Share. Basic earnings per common share (EPS) are based on the weighted average number of shares of Common Stock, par value 0.0001 per share (“Common Stock”) outstanding during each period. Diluted earnings per common share are based on shares outstanding (computed as under basic EPS) and potentially dilutive shares of Common Stock. Potential shares of Common Stock included in the diluted earnings per share calculation include in-the-money stock options that have been granted but have not been exercised. Because of the net loss for the three ended September 30, 2020 and 2019, the dilutive shares for both periods were excluded from the Diluted EPS calculation as the effect of these potential shares of Common Stock is anti-dilutive. The Company had 4,115,883 and 3,441,375 potential shares of Common Stock excluded from the Diluted EPS calculation as of September 30, 2020 and September 30, 2019.

 

Fair Value of Financial Instruments — The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

  Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

  Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The Company adopted ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements, which amends certain disclosures requirements over fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy or valuation processes for Level 3 fair value measurements. However, public companies will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The Company adopted this guidance on July 1, 2020, and there was no material impact to its condensed consolidated financial statement disclosures (See Note 2-Fair Value of Financial Instruments for more information about the Company’s fair value classifications.)

 

Stock Options and Restricted Share Units - The Company has granted stock options, restricted share units (“RSU’s) and warrants. The Company accounts for options in accordance with the provisions of FASB ASC Topic 718, Compensation - Stock Compensation. Stock based compensation costs for the vesting of options and RSU’s granted to officers, board members, employees and consultants for the three months ended September 30, 2020 and 2019 were $326,156 and $234,010, respectively.

 

Stock-Based Compensation -The Company records stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period. No shares were issued for services for the three months ended September 30, 2020 and 2019.

 

Recent Adopted Accounting Pronouncements 

 

The Company adopted ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements, as of July 1, 2020 (Note 2).

 

Other recent accounting pronouncements issued by the FASB do not or are not believed by management to have a material impact on the Company’s present or future financial statements.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.20.2
FAIR VALUE MEASUREMENT
3 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
FAIR VALUE MEASUREMENT

NOTE 2 — FAIR VALUE MEASUREMENT — The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

  Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

  Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The were no Level 1, 2 or 3 assets, nor and Level 1 or 2 liabilities as of September 30, 2020.

 

Level 3 liabilities held as of September 30, 2020 consisted of a contingent consideration liability related to the February 16, 2018 acquisition of Enochian BioPharma (the “Acquisition”). As consideration for the Acquisition, the stockholders of Enochian Biopharma received (i) 18,081,962 shares of Common Stock, and (ii) the right to receive Contingent Shares pro rata upon the exercise of warrants, which were outstanding at closing. The contingent consideration liability was recorded at fair value of $21,516,000 at the time of acquisition and is subsequently remeasured to fair value at each reporting period. At September 30, 2020, 1,438,122 Contingent Shares are issuable in connection with the Acquisition of Enochian Biopharma.

 

The fair value of the contingent consideration liability is estimated using an option-pricing model. The key inputs to the model are all contractual or observable with the exception being volatility, which is computed, based on the Company’s underlying stock. The key inputs to valuing the contingent consideration liability on the date of acquisition and as of September 30, 2020, include the Company’s stock price on the valuation date of $3.58; the exercise price of the warrants of $1.30, the risk-free rate of .13% the expected volatility of the Company’s Common Stock of 99.3%, the digital call rate 54%, and the 1,438,122 of contingent shares remaining at the end of the period. Fair Value measurements are highly sensitive to changes in these inputs and significant changes in these inputs could result in a significantly higher or lower fair value.

 

Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, investments, accounts payable, accrued expenses, capital lease obligations and notes payable approximates their recorded values due to their short-term maturities.

 

The following table sets forth the Level 3 liability at September 30, 2020, which is recorded on the balance sheet at fair value on a recurring basis. As required, these are classified based on the lowest level of input that is significant to the fair value measurement:

 

    Fair Value Measurements at
Reporting Date Using
 
    Quoted Prices in  
Active Markets for Identical Assets Inputs
    Significant Other
Observable Inputs
    Significant Other Unobservable  
    (Level 1)     (Level 2)     (Level 3)  
Contingent Consideration Liability       —         —     $ 2,755,034  
The roll forward of the contingent consideration liability is as follows:                        
Balance June 30, 2020               $ 3,182,434  
Contingent Shares issued pursuant to the Acquisition Agreement               $  
Fair value adjustment               $ (427,400 )
Balance September 30, 2020               $ 2,755,034  
XML 21 R10.htm IDEA: XBRL DOCUMENT v3.20.2
PROPERTY AND EQUIPMENT
3 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 3 — PROPERTY AND EQUIPMENT

 

    Useful Life   September 30, 2020    

June 30,

2020

 
Lab Equipment and Instruments   4-7   $ 534,527     $ 534,527  
Leasehold Improvements   10   $ 224,629       224,629  
Furniture Fixtures and Equipment   4-7   $ 171,975     $ 171,975  
Total       $ 931,131     $ 931,131  
Less Accumulated Depreciation       $ (179,558 )   $ (153,013 )
Net Property and Equipment       $ 751,573     $ 778,118  

 

During the three months ended September 30, 2020, and 2019, respectively, the Company had depreciation expense of $26,545, and $21,481, respectively.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.20.2
INTANGIBLE ASSETS
3 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

NOTE 4 —INTANGIBLE ASSETS

 

At September 30, 2020 and June 30, 2020, definite-life intangible assets, net of accumulated amortization, consisted of patents on the Company’s products and processes of $76,834 and $77,323, respectively. The patents are recorded at cost and amortized over twenty years from the date of application. Amortization expense for the three months ended September 30, 2020 and 2019 was $3,913 and zero, respectively.

 

At September 30, 2020 and 2019, indefinite life intangibles assets consisted of a licenses agreements classified as In-Process Research and Development (“IPR&D”) intangible assets, which are not amortizable until the intangible asset provides economic benefit, and goodwill.

 

At September 30, 2020 and June 30, 2020, definite and indefinite-life intangible assets consisted of the following: 

 

    Useful Life   June 30,
2020
    Period Change     Effect of Currency Translation     September 30,
2020
 
Definite Life Intangible Assets                            
Patents   20 Years   $ 299,175     $         13,247       312,422  
Less Accumulated Amortization       $ (221,852 )   $ (3, 913 )     (9,823 )     (235,588 )
Net Definite-Life Intangible Assets       $ 77,323     $ (3,913 )     3,424       76,834  
                                     
Indefinite Life Intangible Assets                                    
License Agreement       $ 154,824,000                     $ 154,824,000  
Goodwill       $ 11,640,000                     $ 11,640,000  
Total Indefinite Life Intangible Assets       $ 166,464,000                     $ 166,464,000  

 

Year ending September 30,      
2021   $ 11,241  
2022   $ 15,154  
2023   $ 15,154  
2024   $ 15,154  
2025   $ 15,154  
Thereafter   $ 4,977  
Total   $ 76,834  

 

During February 2018, the Company acquired a License Agreement (as licensee) to the HIV therapy being developed as ENOB-HV-01 which consists of a perpetual, fully paid-up, royalty-free, sub-licensable, and sole and exclusive worldwide license to research, develop, use, sell, have sold, make, have made, offer for sale, import and otherwise commercialize certain intellectual property in cellular therapies for the prevention, treatment, amelioration of and/or therapy exclusively for HIV in humans, and research and development exclusively relating to HIV in humans. Because the HIV License Agreement is considered, an IPR&D intangible asset it is classified as an indefinite life asset that is tested annually for impairment.

 

Impairment – Following the fourth quarter of each year, management performs its annual test of impairment of intangible assets by performing a quantitative assessment and determines if it is more than likely than not that, the fair value of the asset is greater than or equal to the carrying value of the asset. The results of the quantitative assessment supported Management’s conclusion that an impairment adjustment was not required as of June 30, 2020.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.20.2
LEASES
3 Months Ended
Sep. 30, 2020
Leases [Abstract]  
LEASES

NOTE 5 — LEASES

 

Operating Leases — On November 13, 2017, Enochian entered into a Lease Agreement for a term of five years and two months from November 1, 2017 (the “Term”) with Plaza Medical Office Building, LLC, a California limited liability company (the “Landlord”), as landlord, pursuant to which the Company agreed to lease from the Landlord approximately 2,325 rentable square feet. The base rent increases by 3% each year, and ranges from approximately $8,719 per month for the first year to $10,107 per month for the two months of the sixth year. The Company received $70,800 in tenant improvement allowance in the form of free rent applied over 10 months in equal installments beginning in January of 2018.

   

On June 19, 2018, the Registrant entered into a Lease Agreement for a term of ten years from September 1, 2018 with Century City Medical Plaza Land Co., Inc., pursuant to which the Company agreed to lease approximately 2,453 rentable square feet. On February 20, 2019, the Registrant entered into an Addendum to the original Lease Agreement with an effective date of December 1, 2019, where it expanded the lease area to include another 1,101 square feet for a total rentable 3,554 square feet. The base rent increases by 3% each year, and ranges from $17,770 per month for the remainder of the first year to $23,186 per month for the tenth year. The equalized monthly lease payment for the term of the lease is $20,050. The Company was entitled to $148,168 in contributions toward tenant improvements.

 

The Company identified and assessed the following significant assumptions in recognizing the right-of-use asset and corresponding liabilities:

 

Expected lease term — The expected lease term includes both contractual lease periods and, when applicable, cancelable option periods when it is reasonably certain that the Company would exercise such options. The Company’s leases have remaining lease terms between 27 months and 83 months. As of September 30, 2020, the weighted-average remaining term is 6.24 years.

 

Incremental borrowing rate — The Company’s lease agreements do not provide an implicit rate. As the Company does not have any external borrowings for comparable terms of its leases, the Company estimated the incremental borrowing rate based on the U.S. Treasury Yield Curve rate that corresponds to the length of each lease. This rate is an estimate of what the Company would have to pay if borrowing on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. As of September 30, 2020, the weighted-average discount rate is 3.99%.

 

Lease and non-lease components — In certain cases the Company is required to pay for certain additional charges for operating costs, including insurance, maintenance, taxes, and other costs incurred, which are billed based on both usage and as a percentage of the Company’s share of total square footage. The Company determined that these costs are non-lease components and they are not included in the calculation of the lease liabilities because they are variable. Payments for these variable, non-lease components are considered variable lease costs and are recognized in the period in which the costs are incurred.

 

For the three months ended September 30, 2020, and September 30, 2019, lease expense charged to general and administrative expenses amounted to $89,684 and $101,521, respectively.

 

Below are the lease commitments for the next 5 years and thereafter:

 

Year Ending June 30th   Lease Expense  
2021   $ 255,137  
2022   $ 348,495  
2023   $ 298,305  
2024   $ 246,004  
2025   $ 253,384  
Thereafter   $ 574,821  
Less imputed interest     (238,535 )
Total   $ 1,737,611  
XML 24 R13.htm IDEA: XBRL DOCUMENT v3.20.2
NOTES PAYABLE
3 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
NOTES PAYABLE

NOTE 6 — NOTES PAYABLE

 

Convertible Notes Payable

 

On February 6, 2020, the Company issued two Convertible Notes (the “Convertible Notes”) to an existing stockholder of the Company each with a face value amount of $600,000, convertible into shares of the Company’s Common Stock. The outstanding principal amount of the Convertible Notes is due and payable on February 6, 2023. Interest on the Convertible Notes commenced accruing on the date of issuance at six percent (6%) per annum, computed on the basis of twelve 30-day months, and is compounded monthly on the final day of each calendar month based upon the Principal and all accrued and unpaid Interest outstanding as of such compound date. The interest is payable in cash on a semi-annual basis.

 

The holder of the Convertible Notes has the right at any time prior to the date that is twelve months from issuance to convert all or any part of the outstanding and unpaid Principal and all unpaid Interest into shares of the Company’s Common Stock. The conversion price is equal to $12.00 per share of Common Stock. The Company evaluated the Convertible Notes in accordance with ASC 470-20 and identified that they each contain an embedded conversion feature that shall not be bifurcated from the host document (i.e., the Convertible Notes) as they are not deemed to be readily convertible into cash. All proceeds received from the issuance have been recognized as a liability on the balance sheet. The Convertible Notes balance as of September 30, 2020 and June 30, 2020, was $1,200,000.

 

Note Payable

 

On March 30, 2020 (the “Issuance Date”), the Company issued a Promissory Note in the principal amount of $5,000,000 (the “Unsecured Note”) to Paseco APS, a Danish limited company and an existing stockholder of the Company. The principal amount of the Note will be payable on November 30, 2021 (the “Maturity Date”) and bears interest at a fixed rate of 6% per annum, computed based on the number of days between the Issuance Date and the Maturity Date, which was prepaid by the Company in full on the Issuance Date through the issuance of 188,485 shares of the Company’s Common Stock based on the closing market price on that date for a total value of $501,370. The Company evaluated the Unsecured Note and PIK interest in accordance with ASC 470-Debt and ASC 835-Interest, respectively. Pursuant to ASC 470-20, proceeds received from the issuance are to be recognized at their relative fair value, thus the liability is shown net of the corresponding discount of $493,192, which is the relative fair value of the shares issued for the PIK interest on the closing date using the effective interest method. The discount will be accreted over the life of the Unsecured Note. The Note Payable balance, net of discount at September 30, 2020 is $4,654,765.

 

For the three months ended September 30, 2020, the Company recorded accrued interest and interest expense in the amount of $6,000, and $92,313, respectively. The interest expense includes $73,978 related to the amortization of the discount related to the Unsecured Note. These amounts are reflected in accrued expenses and general and administrative expenses. 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY
3 Months Ended
Sep. 30, 2020
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 7 — STOCKHOLDERS’ EQUITY

 

Preferred Stock — The Company has 10,000,000 authorized shares of Preferred Stock, par value $0.0001 per share. At September 30, 2020, and June 30, 2020, there were zero shares issued and outstanding.

 

Common Stock — The Company has 100,000,000 authorized shares of Common Stock, par value $0.0001 per share. At September 30, 2020, and June 30, 2020, there were 46,636,976 and 46,497,409 shares issued and outstanding, respectively.

 

Voting — Holders of Common Stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders, including the election of directors, and do not have any right to cumulate votes in the election of directors.

 

Dividends — Holders of Common Stock are entitled to receive ratably such dividends as the Board from time to time may declare out of funds legally available.

 

Liquidation Rights — In the event of any liquidation, dissolution or winding-up of affairs of the Company, after payment of all of our debts and liabilities, the holders of Common Stock will be entitled to share ratably in the distribution of any of our remaining assets.

 

Purchase Agreement with Lincoln Park Capital

 

On July 8, 2020, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company may sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $20,000,000 of shares of our Common Stock from time to time from August 1, 2023.

 

Under the Purchase Agreement, we may direct Lincoln Park, at our sole discretion subject to certain conditions, to purchase up to 200,000 shares of Common Stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 125,000 shares of Common Stock, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $1,000,000. In the event we purchase the full amount allowed for a Regular Purchase on any given business day, we may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price of shares of Common Stock related to the future funding will be based on the then prevailing market prices of such shares at the time of sales as described in the Purchase Agreement.

 

Our sale of shares of Common Stock to Lincoln Park subsequent to the Amendment Date is limited to 12,016,457 shares of Common Stock, representing 19.99% of the shares of the Common Stock outstanding on the Amendment Date unless (i) stockholder approval is obtained, (ii) the average price of all applicable sales to Lincoln Park under the Purchase Agreement equals or exceeds the lower of (A) the closing price of the Common Stock on the Nasdaq Capital Market immediately preceding the date of the Purchase Agreement or (B) the average of the closing prices on the Nasdaq Capital Market for the five Business Days immediately preceding the date of the Purchase Agreement or (ii) to the extent it would cause Lincoln Park to beneficially own more than 9.99% of the Company’s outstanding shares of Common Stock at any given time. 

 

In consideration for entering into the Purchase Agreement, we issued 139,567 shares of Common Stock to Lincoln Park as a commitment fee on July 21, 2020.

 

During the three months ended September 30, 2020, we did not sell any shares of Common Stock to Lincoln Park under the Purchase Agreement.

 

Common Stock Issuances — 

 

As of September 30, 2020, there were no other Common Stock issuances outside of the 139,567 shares of Common Stock issued to Lincoln Park as a commitment fee.

 

On July 3, 2019, the Registrant issued 500,000 shares of Common Stock valued at the price of $2.00 strike price per share pursuant to the exercise of vested options for total proceeds of $1.0 million. 

 

On July 3, 2019, the Registrant issued 500,000 shares of Common Stock valued at the price of $4.42 per share in connection with the acquisition of Enochian Biopharma. This non-cash transaction impacted shareholders’ equity in the amount of $2.2 million.

 

Acquisition of Enochian Biopharma / Contingently issuable shares On February 16, 2018, the Acquisition was completed when the subsidiary merged with and into Enochian Biopharma, with Enochian Biopharma as the surviving corporation. As consideration for the Acquisition, the stockholders of Enochian Biopharma received (i) 18,081,962 shares of Common Stock, and (ii) the right to receive Contingent Shares pro rata upon the exercise or conversion of warrants, which were outstanding at closing. At September 30, 2020, 1,438,122 Contingent Shares are issuable in connection with the Acquisition of Enochian Biopharma.

 

Acquisition of Enochian Denmark   At September 30, 2020 and June 30, 2020, the Company maintained a reserve of 77,249 and 82,237 shares of Common Stock of the Registrant held in escrow according to Danish law (the “Escrow Shares”), respectively, all of which are reflected as issued and outstanding in the accompanying financial statements. The Escrow Shares are reserved to acquire the shares of Enochian Denmark held by non-consenting shareholders of Enochian Denmark on both September 30, 2020 and June 30, 2020, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark. There have been 107,804 shares of Common Stock issued to non-consenting shareholders of Enochian Denmark as of September 30, 2020. During the three months ended September 30, 2020, the Company issued 4,988 shares of Common Stock to such non-consenting shareholders of Enochian Denmark, respectively. There is no impact on outstanding shares as these shares are reflected as issued and outstanding.

  

Recognition of Options

 

The Company recognizes compensation costs for stock option awards to employees and directors based on their grant-date fair value. The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the fair values of the stock options granted using the Black-Scholes option-pricing model are as follows:

 

    Enochian
Biosciences Inc.
Expected term (in years)   5.5
Volatility   79.92%-80.03%
Risk free interest rate   0.26%-.34%
Dividend yield   0%

 

The Company recognized stock-based compensation expense related to the options of $316,950 and $226,266 for the three months ended September 30, 2020 and year ended 2019, respectively. At September 30, 2020, the Company had approximately $836,754 of unrecognized compensation cost related to non-vested options.

 

Plan Options

 

On February 6, 2014, the Board adopted the Company’s 2014 Equity Incentive Plan (the “Plan”), and the Company had reserved 1,206,000 shares of Common Stock for issuance in accordance with the terms of the Plan.

 

On October 30, 2019, the Board approved and on October 31, 2019, the Company’s shareholders adopted the Enochian’s 2019 Equity Incentive Plan (the “2019 Plan”), which replaced the 2014 Plan. The 2019 Plan authorized options to be awarded to not exceed the sum of (1) 6,000,000 new shares of Common Stock, and (2) the number of shares of Common Stock available for the grant of awards as of the effective date under the 2014 Plan that, after the effective date of the 2019 Plan, expires, or is terminated, surrendered, or forfeited for any reason without issuance of shares. The remaining shares of Common Stock available for grant related to the 2014 Plan was of 655,769 as of the effective date, this amount along with the new 6,000,000 shares totals 6,655,769 shares of Common Stock available to grant immediately after the effective date of the 2019 Plan.

 

For the three months ended September 30, 2020, the Company granted annual options to purchase 24,196 shares of Common Stock to members of the Board of Directors and Scientific Advisory Board with a one-year vesting period. Options will be exercisable at the market price of the Company’s Common Stock on the date of the grant.

 

For the three months ended September 30, 2019, the Company granted annual options of 13,470 to members of the Board of Directors and Scientific Advisory Board with a one-year vesting period pursuant to their contracts, and granted 20,000 fully vested options to senior employees in pursuant to the 2014 Plan. Options will be exercisable at the market price of the Companys common stock on the date of the grant.

 

To date the Company has granted options under the 2019 Plan (“Plan Options”) to purchase 1,129,638 shares of Common Stock.

 

A summary of the status of the Plan Options and Grant Warrants outstanding at September 30, 2020 is presented below:

 

Options Outstanding   Options Exercisable  
    Exercise Prices     Number Outstanding     Weighted Average Remaining Contractual Life (years)     Weighted Average Exercise Price     Number Exercisable     Weighted Average Remaining Contractual Life (years)     Weighted Average Exercise Price  
    $ 2.69       55,762       9.44     $ 2.69                 $  
    $ 3.26       23,006       9.42     $ 3.26                 $  
    $ 3.84       11,719       9.84     $ 3.84                 $  
    $ 3.85       5,195       9.84     $ 3.85                 $  
    $ 3.95       5,063       7.84     $ 3.95       5,063       7.84     $ 3.95  
    $ 4.12       7,282       9.80     $ 4.12                 $  
    $ 4.63       10,000       8.90     $ 4.63       10,000       8.90     $ 4.63  
    $ 4.80       50,749       9.25     $ 4.80                 $  
    $ 4.85       4,124       8.90     $ 5.00       4,124       8.90     $ 5.00  
    $ 4.90       9,183       8.86     $ 4.90       9,183       8.86     $ 4.90  
    $ 5.00       6,000       8.90     $ 5.00       6000           $ 5.00  
    $ 5.74       15,679       7.97     $ 5.74       15,679       7.97     $ 5.74  
    $ 5.80       7,759       8.03     $ 5.80       7,759       8.03     $ 5.80  
    $ 6.15       60,000       8.69     $ 6.15       20,000       8.69     $ 6.15  
    $ 6.25       24,001       8.44     $ 6.25       24,001       8.44     $ 6.25  
    $ 6.50       300,000       8.15     $ 6.50       300,000       8.15     $ 6.50  
    $ 6.95       4,317       8.53     $ 6.95       4,317       8.53     $ 6.95  
    $ 7.10       10,563       8.42     $ 7.10       10,563       8.42     $ 7.10  
    $ 8.00       519,235       9.42     $ 8.00       55,695       7.60     $ 8.00  
Total   $       1,129,638       8.96     $ 6.72       472,385       8.17     $ 6.50  

 

A summary of the status of the Plan Options at September 30, 2020 and changes since July 1, 2020 are presented below:

 

          Weighted Average     Average     Weighted Average  
    Shares     Exercise Price     Remaining Life     Intrinsic Value  
                         
Outstanding at beginning of period     1,105,442     $ 6.78       9.19     $ 107,931  
Granted     24,196     $ 3.93       10.0       -  
Exercised     -       -       -       -  
Forfeited     -       -       -       -  
Expired     -       -       -       -  
Outstanding at end of period     1,129,638     $ 6.72       8.96     $ 56,990  
Vested and expected to vest                             -  
Exercisable end of period     472,385     $ 6.50       8.17     $ -  

 

At September 30, 2020, the Company had 472,385 exercisable Plan Options. The total intrinsic value of options at September 30, 2020 is zero.  Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) at September 30, 2020 (for outstanding options), less the applicable exercise price. 

  

Common Stock Purchase Warrants

 

A summary of the shares of Common Stock, which can be purchased related to the underlying the warrants outstanding for the three-month period as of September 30, 2020, is presented below:

 

          Weighted Average     Weighted Average  
    Shares     Exercise
Price
    Remaining Life  
                   
Outstanding at beginning of period     1,438,122     $ 1.42       1.74  
Granted                            
Exercised         -       -       -  
Cancelled/Expired     -       -       -  
Outstanding at end of period     1,438,122     $ 1.42       1.74  
Exercisable end of period       1,438,122     $ 1.42       1.74  

 

      Equivalent Shares     Underlying Warrants     Outstanding     Equivalent Shares Exercisable  
Exercise Prices     Equivalent Shares     Weight Average Remaining Contractual Life (years)     Weight Average Exercise Price     Number Exercisable     Weighted Average Exercise Price  
$ 1.30       1,413,122       1.76     $ 1.30       1,413,122     $ 1.30  
$ 8.00       25,000       .37     $ 8.00       25,000     $ 8.00  
                                             
Total       1,438,122       1.74     $ 1.42       1,438,122     $ 1.42  

 

The exercise price of certain warrants and the number of shares underlying the warrants are subject to adjustment for stock dividends, subdivisions of the outstanding shares of Common Stock and combinations of the outstanding shares of Common Stock. For so long as the warrants remain outstanding, we are required to keep reserved from our authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the shares underlying the warrants.

 

Restricted Stock Units (RSUs)

 

The Company recognized stock-based compensation expense related to the RSUs of $9,206 and $7,744 for the three months ended September 30, 2020 and 2019, respectively 

 

A summary of the status of Restricted Stock Units outstanding at September 30, 2020 is presented below:

 

          Weighted Average     Weighted Average     Weighted Average  
    Shares     Issuance
Price
    Remaining Life     Intrinsic
Value
 
                         
Outstanding at beginning of period     10,000     $ 6.15       .77     $  
Granted           $               $  
Exercised           $                    
Cancelled/Expired           $               $  
Outstanding at end of period     10,000     $ 6.15       .77     $  
Exercisable end of period         $           $  

 

      Restricted Stock Units Outstanding  
Grant Price     Stock Units     Weight Average Remaining Contractual Life (years)     Weight Average Issuance Price  
  6.15       10,000       .77     $ 6.15  
Total       10,000       .77     $ 6.15  
XML 26 R15.htm IDEA: XBRL DOCUMENT v3.20.2
COMMITMENTS AND CONTINGENCIES
3 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 8 — COMMITMENTS AND CONTINGENCIES

 

Consulting Agreements

 

On July 9, 2018, the Company entered into a consulting agreement with G-Tech Bio, LLC, a California limited liability company (“G-Tech”) to assist the Company with the development of the gene therapy and cell therapy modalities for the prevention, treatment, amelioration of HIV in humans, and with the development of a genetically enhanced Dendritic Cell for use as a wide spectrum platform for various diseases (including but not limited to cancers and infectious diseases) (the “G-Tech Agreement”). G-Tech was entitled to consulting fees for 20 months, with a monthly consulting fee of not greater than $130,000 per month. Upon the completion of the 20 months, the monthly consulting fee of $25,000 continued for scientific consulting and knowledge transfer on existing HIV experiments, and will continue until the services are no longer rendered or the agreement is terminated. G-Tech is controlled by certain members of Weird Science. For the three months ended September 30, 2020 and 2019, $50,000 and $375,000 was charged to research and development expenses in our Condensed Consolidated Statements of Operations related to this consulting agreement, respectively.

 

On January 31, 2020, the Company entered into a Statement of Work & License Agreement (the “HBV License Agreement”) by and among the Company, G Tech Bio, LLC, a California limited liability company (“G Tech”), and G Health Research Foundation, a not for profit entity organized under the laws of California doing business as Seraph Research Institute (“SRI”), whereby the Company acquired a perpetual, sublicensable, exclusive license (the “HBV License”) for a treatment under development (the “Treatment”) aimed to treat Hepatitis B Virus (HBV) infections in accordance with its agreement in principle with G-Tech and SRI.

 

The HBV License Agreement states that in consideration for the HBV License, the Company shall provide cash funding for research costs and equipment and certain other in-kind funding related to the Treatment over a 24 month period, and provides for an up-front payment of $1.2 million within 7 days of January 31, 2020, along with additional payments upon the occurrence of certain benchmarks in the development of the technology set forth in the HBV License Agreement, in each case subject to the terms of the HBV License Agreement. Additionally, the HBV License Agreement provides for cooperation related to the development of intellectual property related to the Treatment and for a 2% royalty to G Tech on any net sales that may occur under the HBV License. On February 6, 2020, the Company paid the $1.2 million aforementioned.

 

The cash funding for research costs and equipment pursuant to the HBV License Agreement consist of monthly payments amounting to $144,500 that cover scientific staffing resources to complete the project as well as periodic payments for materials and equipment needed to complete the project. During the three months ended September 30, 2020, the Company paid $433,500 for scientific staffing resources and $400,000 for mouse studies conducted by a collaborating partner.

 

The HBV License Agreement contains customary representations, warranties and covenants of the parties with respect to the development of the Treatment and the HBV License. G Tech and SRI are each controlled by certain members of Weird Science, LLC, a shareholder of the Company.

 

Shares held for non-consenting shareholdersThe 77,249 remaining shares of Common Stock have been reflected as issued and outstanding in the accompanying financial statements. There were 4,988 shares of Common Stock issued to such non-consent shareholders during the three months ended September 30, 2020. (See Note 7) 

 

Employment and Service Agreements  - The Company has an agreement with the Executive Vice-Chair, where he fulfills the duties as prescribed by the Company’s bylaws and receives annual compensation in the amount of $430,000, plus 300,000 options that vested immediately. Dr. Dybul was given a one-time grant of options to purchase 450,000 shares of Common Stock at a strike price of $8.00 per share on June 11, 2020. The Company executed a consulting agreement for services for a Senior Medical Advisor of $210,000 on a part-time basis. The Company maintains employment agreements with other staff in the ordinary course of business.

 

Contingencies – From time to time, the Company is involved in routine legal and administrative proceedings and claims of various types. While any proceedings or claim contains an element of uncertainty, management does not expect a material impact on our results of operations or financial position. 

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.20.2
RELATED PARTY TRANSACTIONS
3 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 9 — RELATED PARTY TRANSACTIONS

   

On July 9, 2018, the Company entered into a consulting agreement with G-Tech to assist the Company with the development of the gene therapy and autologous and allogenic cell therapy modalities for the prevention, treatment, amelioration of HIV in humans, and with the development of a genetically enhanced Allogenic Dendritic Cell for use as a wide spectrum platform for various diseases (including but not limited to cancers and infectious diseases). (See Note 8)

 

On January 31, 2020, the Company entered into the HBV License Agreement by and among the Company, G Tech and SRI, whereby the Company acquired the HBV License for the Treatment. (See Note 8)

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.20.2
SUBSEQUENT EVENTS
3 Months Ended
Sep. 30, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENT

NOTE 10 — SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report. There have been no subsequent events of a significant and reportable nature as of November 12, 2020.

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.20.2
THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
3 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Business

Business– Enochian BioSciences Inc., (“Enochian”, or “Registrant”, and together with its subsidiaries, the “Company”, “we” or “us”) is a pre-clinical stage biotechnology company committed to using our genetically modified cellular and immune-therapy technologies to prevent or potentially cure HIV, Hepatitis B (HBV), and to provide potentially life-long cancer remission of some of the deadliest cancers. 

Basis of Presentation

Basis of Presentation- The Company prepares consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and follows the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying financial statements are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2020 and 2019 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2020 audited financial statements. The results of operations for the periods ended September 30, 2020 and 2019 are not necessarily indicative of the operating results for the full year.

Consolidation

Consolidation - For the three months ended September 30, 2020 and 2019, the consolidated financial statements include the accounts and operations of the Registrant, and its subsidiaries. All material inter-company transactions and accounts have been eliminated in the consolidation.

Reclassification

Reclassification–Certain amounts in the prior period financial statements have been reclassified to conform to the current presentation. For the three months ended September 30, 2019, we reclassified consulting expense of $31,850, to general and administrative expenses.

Accounting Estimates

Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated. Significant estimates include the fair value and potential impairment of intangible assets, and fair value of equity instruments issued.

COVID-19

COVID-19- During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly affected the economic conditions in the U.S. A number of states, counties and municipalities issued orders requiring persons who were not engaged in essential activities and businesses to remain at home. On March 27, 2020, the US enacted the Coronavirus Aid, Relief and Economic Security Aid (“CARES Act”) to help stimulate an economic recovery; however, there are no reliable estimates of how long the pandemic will last or how many people are likely to be affected by it. No one knows what over-all effects the COVID-19 pandemic will have on economic conditions during the remainder of the fiscal year.

 

Our senior management team is monitoring COVID-19’s impact daily and will continue to adjust our operations as necessary. However, the impact of this event on the Company’s results of operations, financial position, and liquidity or capital resources cannot be reasonably estimated at this time.

Functional Currency & Foreign currency translation

Functional Currency & Foreign currency translation - The functional currency of Enochian Denmark is the Danish Kroner (“DKK”). The Company’s reporting currency is the U.S. Dollar for the purpose of these financial statements. The Company’s balance sheet accounts are translated into U.S. dollars at the period-end exchange rates and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during the periods ended September 30, 2020, and June 30, 2020, and September 30, 2019. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred.

Cash and Cash Equivalents

Cash and Cash Equivalents —The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had balances held in financial institutions in Denmark and in the United States in excess of federally insured States amounts at September 30, 2020 and June 30, 2020 of $5,965,661 and $8,696,361, respectively.

Property and Equipment

Property and Equipment — Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized, upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed for financial statement purposes on a straight-line basis over the estimated useful lives of the assets, which range from four to ten years (See Note 3).

Intangible Assets

Intangible Assets - The Company has both Definite and Indefinite life intangible assets.

 

Definite life intangible assets include patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, “Goodwill and Other Intangible Assets”. Intangible assets are recorded at cost. Patent costs consist of costs incurred to acquire the underlying patent. If it is determined that a patent will not be issued, the related remaining capitalized patent costs are charged to expense. Intangible assets are amortized on a straight-line basis over their estimated useful life. The estimated useful life of patents is twenty years from the date of application.

 

Indefinite life intangible assets include license agreements and goodwill. The Company accounts for indefinite life intangible assets in accordance with ASC 350, “Goodwill and Other Intangible Assets”. License agreement costs represent the Fair Value of the license agreement on the date acquired and are tested annually for impairment. The fair value analysis performed on the license agreements, and the fair value analysis performed on goodwill supported that both indefinite life intangible assets are not impaired as of June 30, 2020, and no impairment is deemed necessary as of September 30, 2020. (See Note 4)

Goodwill

Goodwill —Goodwill is not amortized but is evaluated for impairment annually as of June 30th or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

 

We test for goodwill impairment at the reporting unit level, which is one level below the operating segment level. Our detailed impairment testing involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit and is based on discounted cash flows or relative market-based approaches. If the fair value exceeds carrying value, then it is concluded that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.

 

The carrying value of goodwill at September 30, 2020, was $11,640,000. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to test for impairment losses on goodwill. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to an impairment charge that could be material.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets — Long-lived assets, such as property, plant, and equipment, patents and licenses are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

 

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values.

Leases

Leases — In accordance with ASC Topic 842, the Company determined the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter. The lease terms include any renewal options and termination options that the Company is reasonably assured to exercise, if applicable. The present value of lease payments is determined by using the implicit interest rate in the lease, if that rate is readily determinable; otherwise, the Company develops an incremental borrowing rate based on the information available at the commencement date in determining the present value of the future payments.

 

Rent expense for operating leases is recognized on a straight-line basis, unless the operating lease right of use assets have been impaired, over the reasonably assured lease term based on the total lease payments and is included in operating expense in the consolidated statement of operations. For operating leases that reflect impairment, the Company will recognize the amortization of the operating lease right-of-use assets on a straight-line basis over the remaining lease term with rent expense still included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

 

The Company has elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, insurance and taxes, which vary based on future outcomes, and thus are recognized in general and administrative expenses when incurred. (See Note 5).

Research and Development Expenses

Research and Development Expenses — The Company expenses research and development costs incurred in formulating, improving, validating and creating alternative or modified processes related to and expanding the use of the HIV, HBV, and Cancer therapies and technologies for use in the prevention, treatment, amelioration of and/or therapy for HIV, HBV, and Cancer. Research and development expenses for the three months ended September 30, 2020 and 2019, amounted to $1,050,376, and $520,192, respectively.

Income Taxes

Income Taxes — The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes, which requires an asset and liability approach for accounting for income taxes. During the quarter ended September 30, 2020, the Company’s Danish subsidiary received a payment for an R&D tax credit owed under Danish statutory tax laws in the amount of $122,831.

Loss Per Share

Loss Per Share — The Company calculates earnings/(loss) per share in accordance with FASB ASC 260 Earnings Per Share. Basic earnings per common share (EPS) are based on the weighted average number of shares of Common Stock, par value 0.0001 per share (“Common Stock”) outstanding during each period. Diluted earnings per common share are based on shares outstanding (computed as under basic EPS) and potentially dilutive shares of Common Stock. Potential shares of Common Stock included in the diluted earnings per share calculation include in-the-money stock options that have been granted but have not been exercised. Because of the net loss for the three ended September 30, 2020 and 2019, the dilutive shares for both periods were excluded from the Diluted EPS calculation as the effect of these potential shares of Common Stock is anti-dilutive. The Company had 4,115,883 and 3,441,375 potential shares of Common Stock excluded from the Diluted EPS calculation as of September 30, 2020 and September 30, 2019.

Fair Value of Financial Instruments

Fair Value of Financial Instruments — The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

  Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

  Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The Company adopted ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements, which amends certain disclosures requirements over fair value measurements. Under the new guidance, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy or valuation processes for Level 3 fair value measurements. However, public companies will be required to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains and losses included in other comprehensive income. The Company adopted this guidance on July 1, 2020, and there was no material impact to its condensed consolidated financial statement disclosures (See Note 2-Fair Value of Financial Instruments for more information about the Company’s fair value classifications.)

Stock Options and Restricted Share Units

Stock Options and Restricted Share Units - The Company has granted stock options, restricted share units (“RSU’s) and warrants. The Company accounts for options in accordance with the provisions of FASB ASC Topic 718, Compensation - Stock Compensation. Stock based compensation costs for the vesting of options and RSU’s granted to officers, board members, employees and consultants for the three months ended September 30, 2020 and 2019 were $326,156 and $234,010, respectively.

Stock-Based Compensation

Stock-Based Compensation -The Company records stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period. No shares were issued for services for the three months ended September 30, 2020 and 2019.

Recent Adopted Accounting Pronouncements

Recent Adopted Accounting Pronouncements 

 

The Company adopted ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements, as of July 1, 2020 (Note 2).

 

Other recent accounting pronouncements issued by the FASB do not or are not believed by management to have a material impact on the Company’s present or future financial statements.

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.20.2
FAIR VALUE MEASUREMENT (Tables)
3 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Summary of significant to the fair value measurement

The following table sets forth the Level 3 liability at September 30, 2020, which is recorded on the balance sheet at fair value on a recurring basis. As required, these are classified based on the lowest level of input that is significant to the fair value measurement:

 

    Fair Value Measurements at
Reporting Date Using
 
    Quoted Prices in  
Active Markets for Identical Assets Inputs
    Significant Other
Observable Inputs
    Significant Other Unobservable  
    (Level 1)     (Level 2)     (Level 3)  
Contingent Consideration Liability       —         —     $ 2,755,034  
The roll forward of the contingent consideration liability is as follows:                        
Balance June 30, 2020               $ 3,182,434  
Contingent Shares issued pursuant to the Acquisition Agreement               $  
Fair value adjustment               $ (427,400 )
Balance September 30, 2020               $ 2,755,034  
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.20.2
PROPERTY AND EQUIPMENT (Tables)
3 Months Ended
Sep. 30, 2020
Property, Plant and Equipment [Abstract]  
Summary of property and equipment
    Useful Life   September 30, 2020    

June 30,

2020

 
Lab Equipment and Instruments   4-7   $ 534,527     $ 534,527  
Leasehold Improvements   10   $ 224,629       224,629  
Furniture Fixtures and Equipment   4-7   $ 171,975     $ 171,975  
Total       $ 931,131     $ 931,131  
Less Accumulated Depreciation       $ (179,558 )   $ (153,013 )
Net Property and Equipment       $ 751,573     $ 778,118  
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.20.2
INTANGIBLE ASSETS (Tables)
3 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of life intangible assets

At September 30, 2020 and June 30, 2020, definite and indefinite-life intangible assets consisted of the following: 

 

    Useful Life   June 30,
2020
    Period Change     Effect of Currency Translation     September 30,
2020
 
Definite Life Intangible Assets                            
Patents   20 Years   $ 299,175     $         13,247       312,422  
Less Accumulated Amortization       $ (221,852 )   $ (3, 913 )     (9,823 )     (235,588 )
Net Definite-Life Intangible Assets       $ 77,323     $ (3,913 )     3,424       76,834  
                                     
Indefinite Life Intangible Assets                                    
License Agreement       $ 154,824,000                     $ 154,824,000  
Goodwill       $ 11,640,000                     $ 11,640,000  
Total Indefinite Life Intangible Assets       $ 166,464,000                     $ 166,464,000  
Schedule of expected future amortization expense
Year ending September 30,      
2021   $ 11,241  
2022   $ 15,154  
2023   $ 15,154  
2024   $ 15,154  
2025   $ 15,154  
Thereafter   $ 4,977  
Total   $ 76,834  
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.20.2
LEASES (Tables)
3 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Lease commitments

Below are the lease commitments for the next 5 years and thereafter:

 

Year Ending June 30th   Lease Expense  
2021   $ 255,137  
2022   $ 348,495  
2023   $ 298,305  
2024   $ 246,004  
2025   $ 253,384  
Thereafter   $ 574,821  
Less imputed interest     (238,535 )
Total   $ 1,737,611  
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Tables)
3 Months Ended
Sep. 30, 2020
Stockholders' Equity Note [Abstract]  
Summary of weighted-average assumptions used to estimate the fair values of the stock options granted

The weighted-average assumptions used to estimate the fair values of the stock options granted using the Black-Scholes option-pricing model are as follows:

 

    Enochian
Biosciences Inc.
Expected term (in years)   5.5
Volatility   79.92%-80.03%
Risk free interest rate   0.26%-.34%
Dividend yield   0%
Summary of stock options outstanding

A summary of the status of the Plan Options and Grant Warrants outstanding at September 30, 2020 is presented below:

 

Options Outstanding   Options Exercisable  
    Exercise Prices     Number Outstanding     Weighted Average Remaining Contractual Life (years)     Weighted Average Exercise Price     Number Exercisable     Weighted Average Remaining Contractual Life (years)     Weighted Average Exercise Price  
    $ 2.69       55,762       9.44     $ 2.69                 $  
    $ 3.26       23,006       9.42     $ 3.26                 $  
    $ 3.84       11,719       9.84     $ 3.84                 $  
    $ 3.85       5,195       9.84     $ 3.85                 $  
    $ 3.95       5,063       7.84     $ 3.95       5,063       7.84     $ 3.95  
    $ 4.12       7,282       9.80     $ 4.12                 $  
    $ 4.63       10,000       8.90     $ 4.63       10,000       8.90     $ 4.63  
    $ 4.80       50,749       9.25     $ 4.80                 $  
    $ 4.85       4,124       8.90     $ 5.00       4,124       8.90     $ 5.00  
    $ 4.90       9,183       8.86     $ 4.90       9,183       8.86     $ 4.90  
    $ 5.00       6,000       8.90     $ 5.00       6000           $ 5.00  
    $ 5.74       15,679       7.97     $ 5.74       15,679       7.97     $ 5.74  
    $ 5.80       7,759       8.03     $ 5.80       7,759       8.03     $ 5.80  
    $ 6.15       60,000       8.69     $ 6.15       20,000       8.69     $ 6.15  
    $ 6.25       24,001       8.44     $ 6.25       24,001       8.44     $ 6.25  
    $ 6.50       300,000       8.15     $ 6.50       300,000       8.15     $ 6.50  
    $ 6.95       4,317       8.53     $ 6.95       4,317       8.53     $ 6.95  
    $ 7.10       10,563       8.42     $ 7.10       10,563       8.42     $ 7.10  
    $ 8.00       519,235       9.42     $ 8.00       55,695       7.60     $ 8.00  
Total   $       1,129,638       8.96     $ 6.72       472,385       8.17     $ 6.50  
Summary of stock option activity

A summary of the status of the Plan Options at September 30, 2020 and changes since July 1, 2020 are presented below:

 

          Weighted Average     Average     Weighted Average  
    Shares     Exercise Price     Remaining Life     Intrinsic Value  
                         
Outstanding at beginning of period     1,105,442     $ 6.78       9.19     $ 107,931  
Granted     24,196     $ 3.93       10.0       -  
Exercised     -       -       -       -  
Forfeited     -       -       -       -  
Expired     -       -       -       -  
Outstanding at end of period     1,129,638     $ 6.72       8.96     $ 56,990  
Vested and expected to vest                             -  
Exercisable end of period     472,385     $ 6.50       8.17     $ -  
Summary of common stock purchase warrants outstanding

A summary of the shares of Common Stock, which can be purchased related to the underlying the warrants outstanding for the three-month period as of September 30, 2020, is presented below:

 

          Weighted Average     Weighted Average  
    Shares     Exercise
Price
    Remaining Life  
                   
Outstanding at beginning of period     1,438,122     $ 1.42       1.74  
Granted                            
Exercised         -       -       -  
Cancelled/Expired     -       -       -  
Outstanding at end of period     1,438,122     $ 1.42       1.74  
Exercisable end of period       1,438,122     $ 1.42       1.74  
Summary of common stock purchase warrants
      Equivalent Shares     Underlying Warrants     Outstanding     Equivalent Shares Exercisable  
Exercise Prices     Equivalent Shares     Weight Average Remaining Contractual Life (years)     Weight Average Exercise Price     Number Exercisable     Weighted Average Exercise Price  
$ 1.30       1,413,122       1.76     $ 1.30       1,413,122     $ 1.30  
$ 8.00       25,000       .37     $ 8.00       25,000     $ 8.00  
                                             
Total       1,438,122       1.74     $ 1.42       1,438,122     $ 1.42  
Summary of restricted stock units outstanding

A summary of the status of Restricted Stock Units outstanding at September 30, 2020 is presented below:

 

          Weighted Average     Weighted Average     Weighted Average  
    Shares     Issuance
Price
    Remaining Life     Intrinsic
Value
 
                         
Outstanding at beginning of period     10,000     $ 6.15       .77     $  
Granted           $               $  
Exercised           $                    
Cancelled/Expired           $               $  
Outstanding at end of period     10,000     $ 6.15       .77     $  
Exercisable end of period         $           $  
Summary of restricted stock units activity
      Restricted Stock Units Outstanding  
Grant Price     Stock Units     Weight Average Remaining Contractual Life (years)     Weight Average Issuance Price  
  6.15       10,000       .77     $ 6.15  
Total       10,000       .77     $ 6.15  
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.20.2
THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
3 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Jun. 30, 2020
Cash held in financial institutions $ 5,965,661   $ 8,696,361
Goodwill 11,640,000   $ 11,640,000
Research and development expense $ 1,050,376 $ 520,192  
Common stock, par value $ 0.0001   $ 0.0001
Anti-dilutive securities excluded from computation od EPS 4,115,883 3,441,375  
Stock based compensation expense $ 326,156 $ 234,010  
General and Administrative Expense [Member]      
Consulting Expenses   $ 31,850  
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.20.2
FAIR VALUE MEASUREMENT (Details)
3 Months Ended
Sep. 30, 2020
USD ($)
Accounting Policies [Abstract]  
Balance at beginning $ 3,182,434
Contingent Shares issued pursuant to the Acquisition Agreement
Fair value adjustment (427,400)
Balance at end $ 2,755,034
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.20.2
FAIR VALUE MEASUREMENT (Details Narrative) - USD ($)
3 Months Ended
Feb. 16, 2018
Sep. 30, 2020
Jun. 30, 2020
Contingent consideration liability   $ 2,755,034 $ 3,182,434
Acquisition of Enochian Biopharma [Member]      
Stock price   $ 3.58  
Exercise price of warrants   $ 1.30  
Risk-free rate   0.13%  
Expected volatility   99.30%  
Digital call rate   54.00%  
Outstanding contingent shares   1,438,122  
Agreement and Plan of Merger (the "Acquisition Agreement") [Member] | Enochian Biopharma Inc. and Weird Science LLC [Member]      
Shares issued on business combination 18,081,962 1,438,122  
Contingent consideration liability $ 21,516,000    
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.20.2
PROPERTY AND EQUIPMENT (Details) - USD ($)
3 Months Ended
Sep. 30, 2020
Jun. 30, 2020
Property, Plant and Equipment [Line Items]    
Total $ 931,131 $ 931,131
Less Accumulated Depreciation (179,558) (153,013)
PROPERTY AND EQUIPMENT, Net accumulated Depreciation 751,573 778,118
Lab equipment and instruments [Member]    
Property, Plant and Equipment [Line Items]    
Total $ 534,527 534,527
Lab equipment and instruments [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 4 years  
Lab equipment and instruments [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 7 years  
Leasehold improvements [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 10 years  
Total $ 224,629 224,629
Furniture fixtures and equipment [Member]    
Property, Plant and Equipment [Line Items]    
Total $ 171,975 $ 171,975
Furniture fixtures and equipment [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 4 years  
Furniture fixtures and equipment [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 7 years  
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.20.2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)
3 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 26,545 $ 21,481
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.20.2
INTANGIBLE ASSETS (Details) - USD ($)
3 Months Ended
Sep. 30, 2020
Jun. 30, 2020
Definite-life intangible assets $ 76,834 $ 77,323
Period Change (3,913)  
Effect of Currency Translation 3,424  
Indefinite Life Intangible Assets 166,464,000 166,464,000
Accumulated Amortization [Member]    
Accumulated Amortization (235,588) (221,852)
Period Change (3,913)  
Effect of Currency Translation $ (9,823)  
Patents [Member]    
Useful Life 20 years  
Definite-life intangible assets $ 312,422 299,175
Period Change 0  
Effect of Currency Translation 13,247  
Licensing Agreements [Member]    
Indefinite Life Intangible Assets 154,824,000 154,824,000
Goodwill [Member]    
Indefinite Life Intangible Assets $ 11,640,000 $ 11,640,000
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.20.2
INTANGIBLE ASSETS (Details 1) - USD ($)
Sep. 30, 2020
Jun. 30, 2020
Schedule of expected future amortization expense    
2021 $ 11,241  
2022 15,154  
2023 15,154  
2024 15,154  
2025 15,154  
Thereafter 4,977  
Definite-life intangible assets, net $ 76,834 $ 77,323
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.20.2
INTANGIBLE ASSETS (Details Narrative) - USD ($)
3 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Jun. 30, 2020
Definite-life intangible assets $ 76,834   $ 77,323
Patents [Member]      
Definite-life intangible assets 312,422   $ 299,175
Amortization expense $ 3,913 $ 0  
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.20.2
LEASES (Details)
Sep. 30, 2020
USD ($)
Leases [Abstract]  
2021 $ 255,137
2022 348,495
2023 298,305
2024 246,004
2025 253,384
Thereafter 574,821
Less imputed interest (238,535)
Total $ 1,737,611
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.20.2
LEASES (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Nov. 13, 2017
Jun. 19, 2018
Sep. 30, 2020
Sep. 30, 2019
Leases [Abstract]        
Lease premises, description On November 13, 2017, Enochian entered into a Lease Agreement for a term of five years and two months from November 1, 2017 (the "Term") with Plaza Medical Office Building, LLC, a California limited liability company (the "Landlord"), as landlord, pursuant to which the Company agreed to lease from the Landlord approximately 2,325 rentable square feet. The base rent increases by 3% each year, and ranges from approximately $8,719 per month for the first year to $10,107 per month for the two months of the sixth year. The Company received $70,800 in tenant improvement allowance in the form of free rent applied over 10 months in equal installments beginning in January of 2018. On June 19, 2018, the Registrant entered into a Lease Agreement for a term of ten years from September 1, 2018 with Century City Medical Plaza Land Co., Inc., pursuant to which the Company agreed to lease approximately 2,453 rentable square feet. On February 20, 2019, the Registrant entered into an Addendum to the original Lease Agreement with an effective date of December 1, 2019, where it expanded the lease area to include another 1,101 square feet for a total rentable 3,554 square feet. The base rent increases by 3% each year, and ranges from $17,770 per month for the remainder of the first year to $23,186 per month for the tenth year. The equalized monthly lease payment for the term of the lease is $20,050. The Company was entitled to $148,168 in contributions toward tenant improvements.    
Weighted-average remaining term     6 years 2 months 27 days  
Weighted-average discount rate     3.99%  
Lease expense     $ 89,684 $ 101,521
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.20.2
NOTES PAYABLE (Details Narrative) - USD ($)
3 Months Ended 7 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Feb. 06, 2020
Mar. 30, 2020
Jun. 30, 2020
Accrued interest $ 273,345       $ 470,636
Amortization of the discount 73,978      
Convertible Notes Payable [Member]          
Principal amount     $ 600,000    
Issuance Date     Feb. 06, 2020    
Maturity Date     Feb. 06, 2023    
Interest rate     6.00%    
Conversion price     $ 12.00    
Convertible notes payable 1,200,000       $ 1,200,000
Note Payable [Member]          
Principal amount       $ 5,000,000  
Issuance Date       Mar. 30, 2020  
Maturity Date       Nov. 30, 2021  
Interest rate       6.00%  
Stock issued for debt conversion, shares       188,485  
Stock issued for debt conversion       $ 501,370  
Proceeds received from issuance of shares       $ 493,192  
Notes payable 4,654,765        
Accrued interest 6,000        
Interest expense 92,313        
Amortization of the discount $ 73,978        
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details) - Enochian Biosciences [Member]
3 Months Ended
Sep. 30, 2020
Expected term (in years) 5 years 6 months
Dividend yield 0.00%
Minimum [Member]  
Volatility 79.92%
Risk free interest rate 0.26%
Maximum [Member]  
Volatility 80.03%
Risk free interest rate 0.34%
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details 1) - Employee Stock Option [Member] - $ / shares
3 Months Ended
Sep. 30, 2020
Jun. 30, 2020
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices  
Options Outstanding, Number Outstanding 1,129,638 1,105,442
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 11 months 15 days  
Options Outstanding, Weighted Average Exercise Price $ 6.72 $ 6.78
Options Exercisable, Number Exercisable 472,385  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 2 months 1 day  
Options Exercisable, Weighted Average Exercise Price $ 6.50  
Exercise Price Range 2.69 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 2.69  
Options Outstanding, Number Outstanding 55,762  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 9 years 5 months 9 days  
Options Outstanding, Weighted Average Exercise Price $ 2.69  
Options Exercisable, Number Exercisable  
Options Exercisable, Weighted Average Exercise Price  
Exercise Price Range 3.26 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 3.26  
Options Outstanding, Number Outstanding 23,006  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 9 years 5 months 1 day  
Options Outstanding, Weighted Average Exercise Price $ 3.26  
Options Exercisable, Number Exercisable  
Options Exercisable, Weighted Average Exercise Price  
Exercise Price Range 3.84 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 3.84  
Options Outstanding, Number Outstanding 11,719  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 9 years 10 months 3 days  
Options Outstanding, Weighted Average Exercise Price $ 3.84  
Options Exercisable, Number Exercisable  
Options Exercisable, Weighted Average Exercise Price  
Exercise Price Range 3.85 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 3.85  
Options Outstanding, Number Outstanding 5,195  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 9 years 10 months 3 days  
Options Outstanding, Weighted Average Exercise Price $ 3.85  
Options Exercisable, Number Exercisable  
Options Exercisable, Weighted Average Exercise Price  
Exercise Price Range 3.95 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 3.95  
Options Outstanding, Number Outstanding 5,063  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 7 years 10 months 3 days  
Options Outstanding, Weighted Average Exercise Price $ 3.95  
Options Exercisable, Number Exercisable 5,063  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 7 years 10 months 3 days  
Options Exercisable, Weighted Average Exercise Price $ 3.95  
Exercise Price Range 4.12 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 4.12  
Options Outstanding, Number Outstanding 7,282  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 9 years 9 months 18 days  
Options Outstanding, Weighted Average Exercise Price $ 4.12  
Options Exercisable, Number Exercisable  
Options Exercisable, Weighted Average Exercise Price  
Exercise Price Range 4.63 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 4.63  
Options Outstanding, Number Outstanding 10,000  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 10 months 25 days  
Options Outstanding, Weighted Average Exercise Price $ 4.63  
Options Exercisable, Number Exercisable 10,000  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 10 months 25 days  
Options Exercisable, Weighted Average Exercise Price $ 4.63  
Exercise Price Range 4.80 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 4.8  
Options Outstanding, Number Outstanding 50,749  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 9 years 2 months 30 days  
Options Outstanding, Weighted Average Exercise Price $ 4.8  
Options Exercisable, Number Exercisable  
Options Exercisable, Weighted Average Exercise Price  
Exercise Price Range 4.85 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 4.85  
Options Outstanding, Number Outstanding 4,124  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 10 months 25 days  
Options Outstanding, Weighted Average Exercise Price $ 5  
Options Exercisable, Number Exercisable 4,124  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 10 months 25 days  
Options Exercisable, Weighted Average Exercise Price $ 5  
Exercise Price Range 4.90 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 4.9  
Options Outstanding, Number Outstanding 9,183  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 10 months 10 days  
Options Outstanding, Weighted Average Exercise Price $ 4.9  
Options Exercisable, Number Exercisable 9,183  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 10 months 10 days  
Options Exercisable, Weighted Average Exercise Price $ 4.9  
Exercise Price Range 5.00 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 5  
Options Outstanding, Number Outstanding 6,000  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 10 months 25 days  
Options Outstanding, Weighted Average Exercise Price $ 5  
Options Exercisable, Number Exercisable 6,000  
Options Exercisable, Weighted Average Exercise Price $ 5  
Exercise Price Range 5.74 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 5.74  
Options Outstanding, Number Outstanding 15,679  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 7 years 11 months 19 days  
Options Outstanding, Weighted Average Exercise Price $ 5.74  
Options Exercisable, Number Exercisable 15,679  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 7 years 11 months 19 days  
Options Exercisable, Weighted Average Exercise Price $ 5.74  
Exercise Price Range 5.80 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 5.8  
Options Outstanding, Number Outstanding 7,759  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 11 days  
Options Outstanding, Weighted Average Exercise Price $ 5.8  
Options Exercisable, Number Exercisable 7,759  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 11 days  
Options Exercisable, Weighted Average Exercise Price $ 5.8  
Exercise Price Range 6.15 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 6.15  
Options Outstanding, Number Outstanding 60,000  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 8 months 9 days  
Options Outstanding, Weighted Average Exercise Price $ 6.15  
Options Exercisable, Number Exercisable 20,000  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 8 months 9 days  
Options Exercisable, Weighted Average Exercise Price $ 6.15  
Exercise Price Range 6.25 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 6.25  
Options Outstanding, Number Outstanding 24,001  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 5 months 9 days  
Options Outstanding, Weighted Average Exercise Price $ 6.25  
Options Exercisable, Number Exercisable 24,001  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 5 months 9 days  
Options Exercisable, Weighted Average Exercise Price $ 6.25  
Exercise Price Range 6.50 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 6.5  
Options Outstanding, Number Outstanding 300,000  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 1 month 24 days  
Options Outstanding, Weighted Average Exercise Price $ 6.5  
Options Exercisable, Number Exercisable 300,000  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 1 month 24 days  
Options Exercisable, Weighted Average Exercise Price $ 6.5  
Exercise Price Range 6.95 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 6.95  
Options Outstanding, Number Outstanding 4,317  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 6 months 10 days  
Options Outstanding, Weighted Average Exercise Price $ 6.95  
Options Exercisable, Number Exercisable 4,317  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 6 months 10 days  
Options Exercisable, Weighted Average Exercise Price $ 6.95  
Exercise Price Range 7.10 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 7.1  
Options Outstanding, Number Outstanding 10,563  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 8 years 5 months 1 day  
Options Outstanding, Weighted Average Exercise Price $ 7.1  
Options Exercisable, Number Exercisable 10,563  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 8 years 5 months 1 day  
Options Exercisable, Weighted Average Exercise Price $ 7.1  
Exercise Price Range 8.00 [Member]    
Option Indexed to Issuer's Equity [Line Items]    
Exercise Prices $ 8  
Options Outstanding, Number Outstanding 519,235  
Options Outstanding, Weighted Average Remaining Contractual Life (years) 9 years 5 months 1 day  
Options Outstanding, Weighted Average Exercise Price $ 8  
Options Exercisable, Number Exercisable 55,695  
Options Exercisable, Weighted Average Remaining Contractual Life (years) 7 years 7 months 6 days  
Options Exercisable, Weighted Average Exercise Price $ 8  
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details 2) - Employee Stock Option [Member]
3 Months Ended
Sep. 30, 2020
USD ($)
$ / shares
shares
Option Indexed to Issuer's Equity [Line Items]  
Options Outstanding at beginning of period | shares 1,105,442
Options Outstanding, Granted | shares 24,196
Options Outstanding, Exercised | shares
Options Outstanding, Forfeited | shares
Options Outstanding, Expired | shares
Options Outstanding at end of period | shares 1,129,638
Vested and expected to vest | shares
Options Exercisable, Number Exercisable | shares 472,385
Weighted Average Exercise Price, Outstanding at beginning of period | $ / shares $ 6.78
Weighted Average Exercise Price, Granted | $ / shares 3.93
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price, Forfeited | $ / shares
Weighted Average Exercise Price, Expired | $ / shares
Weighted Average Exercise Price, Outstanding at end of period | $ / shares 6.72
Weighted Average Exercise Price, Vested and expected to vest | $ / shares
Weighted Average Exercise Price, Exercisable | $ / shares $ 6.50
Weighted Average remaining life, Outstanding at beginning of period 9 years 2 months 8 days
Weighted Average remaining life, Granted 10 years
Weighted Average remaining life, Outstanding at end of period 8 years 11 months 15 days
Weighted Average Remaining Life, Exercisable end of period 8 years 2 months 1 day
Weighted Average Intrinsic Value, Outstanding at beginning of period | $ $ 107,931
Weighted Average Intrinsic Value, Granted | $
Weighted Average Intrinsic Value, Exercised | $
Weighted average intrinsic value, Forfeited | $
Weighted average intrinsic value, Expired | $
Weighted Average Intrinsic Value, Outstanding at end of period | $ 56,990
Weighted Average Intrinsic Value, Vested and expected to vest | $
Weighted Average Intrinsic Value, Exercisable end of period | $
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details 3) - Common Stock Purchase Warrants [Member] - $ / shares
3 Months Ended 12 Months Ended
Sep. 30, 2020
Jun. 30, 2020
Option Indexed to Issuer's Equity [Line Items]    
Outstanding at beginning of period 1,438,122  
Granted  
Exercised  
Cancelled/Expired  
Outstanding at end of period 1,438,122 1,438,122
Exercisable end of period 1,438,122  
Weighted average exercise price, Outstanding at beginning of period $ 1.42  
Weighted average exercise price, Exercised  
Weighted average exercise price, Expired  
Weighted average exercise price, Outstanding at end of period 1.42 $ 1.42
Weighted average exercise price, Exercisable end of period $ 1.42  
Weighted Average remaining life, Outstanding 1 year 8 months 26 days 1 year 8 months 26 days
Weighted Average remaining life, Exercisable end of period 1 year 8 months 26 days  
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details 4) - Warrant [Member]
3 Months Ended
Sep. 30, 2020
$ / shares
shares
Option Indexed to Issuer's Equity [Line Items]  
Equivalent Shares Underlying Warrants Outstanding, Equivalent Shares | shares 1,438,122
Equivalent Shares Underlying Warrants Outstanding, Weighted Average Remaining Contractual Life (years) 1 year 8 months 26 days
Equivalent Shares Underlying Warrants Outstanding, Weighted Average Exercise Price $ 1.42
Equivalent Shares Exercisable, Number Exercisable | shares 1,438,122
Equivalent Shares Exercisable, Weighted Average Exercise Price $ 1.42
Exercise Price Range 1.30 [Member]  
Option Indexed to Issuer's Equity [Line Items]  
Exercise Prices $ 1.30
Equivalent Shares Underlying Warrants Outstanding, Equivalent Shares | shares 1,413,122
Equivalent Shares Underlying Warrants Outstanding, Weighted Average Remaining Contractual Life (years) 1 year 9 months 3 days
Equivalent Shares Underlying Warrants Outstanding, Weighted Average Exercise Price $ 1.30
Equivalent Shares Exercisable, Number Exercisable | shares 1,413,122
Equivalent Shares Exercisable, Weighted Average Exercise Price $ 1.30
Exercise Price Range 8.00 [Member]  
Option Indexed to Issuer's Equity [Line Items]  
Exercise Prices $ 8.00
Equivalent Shares Underlying Warrants Outstanding, Equivalent Shares | shares 25,000
Equivalent Shares Underlying Warrants Outstanding, Weighted Average Remaining Contractual Life (years) 4 months 13 days
Equivalent Shares Underlying Warrants Outstanding, Weighted Average Exercise Price $ 8.00
Equivalent Shares Exercisable, Number Exercisable | shares 25,000
Equivalent Shares Exercisable, Weighted Average Exercise Price $ 8.00
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details 5) - Employee Stock Option [Member]
3 Months Ended
Sep. 30, 2020
USD ($)
$ / shares
shares
Outstanding at beginning of period 10,000
Granted
Exercised
Cancelled/Expired
Outstanding at end of period 10,000
Exercisable end of period
Weighted average Issuance price, Outstanding at beginning of period | $ / shares $ 6.15
Weighted average Issuance price, Granted | $ / shares
Weighted average Issuance price, Exercised | $ / shares
Weighted average Issuance price, Expired | $ / shares
Weighted average Issuance price, Outstanding at end of period | $ / shares $ 6.15
Weighted average Issuance price, Exercisable end of period
Weighted Average remaining life, Outstanding 9 months 7 days
Weighted Average remaining life, Exercisable end of period 9 months 7 days
Weighted Average Intrinsic Value, Outstanding at end of period | $
Weighted average Intrinsic Value, Exercisable end of period | $
XML 52 R41.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details 6) - Employee Stock Option [Member] - $ / shares
3 Months Ended
Sep. 30, 2020
Jun. 30, 2020
Stock Units 10,000 10,000
Weighted Average remaining life, Outstanding 9 months 7 days  
Weight Average Issuance Price $ 6.15  
Exercise Price Range 6.15 [Member]    
Grant Price $ 6.15  
Stock Units 10,000  
Weighted Average remaining life, Outstanding 9 months 7 days  
Weight Average Issuance Price $ 6.15  
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.20.2
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)
3 Months Ended
Jul. 08, 2020
Jul. 03, 2019
Feb. 16, 2018
Feb. 06, 2014
Sep. 30, 2020
Sep. 30, 2019
Jun. 30, 2020
Class of Stock [Line Items]              
Preferred stock, par value         $ 0.0001   $ 0.0001
Preferred stock, shares authorized         10,000,000   10,000,000
Preferred stock, shares issued         0   0
Preferred stock, shares outstanding         0   0
Common stock, shares authorized         100,000,000   100,000,000
Common stock, par value         $ 0.0001   $ 0.0001
Common stock, shares issued         46,636,976   46,497,409
Common stock, shares outstanding         46,636,976   46,497,409
Shares issued for business acquisition, value           $ 2,210,000  
Common stock reserved for issuance         77,249   82,237
Share exchange agreement, shares issued to parent company         24,196    
Stock based compensation expense         $ 316,950 226,266  
Unrecognized compensation cost related to non-vested options             $ 836,754
Vested warrants shares         1,438,122    
Common stock issued         4,988    
Stock Option [Member]              
Class of Stock [Line Items]              
Shares issued for options exercised   500,000          
Shares price   $ 2.00          
Proceeds from stock option exercised   $ 1,000,000          
Employee Stock Option [Member]              
Class of Stock [Line Items]              
Shares issued for options exercised            
Options granted and outstanding            
Stock based compensation expense         $ 9,206 $ 7,744  
Board of Directors [Member]              
Class of Stock [Line Items]              
Options granted and outstanding           13,470  
Senior Employees [Member]              
Class of Stock [Line Items]              
Options granted and outstanding           20,000  
DanDrit Denmark [Member]              
Class of Stock [Line Items]              
Common stock, shares issued         107,804    
2014 Equity Incentive Plan [Member]              
Class of Stock [Line Items]              
Common stock reserved for issuance       1,206,000      
2019 Equity Incentive Plan [Member]              
Class of Stock [Line Items]              
Options granted and outstanding         1,129,638    
Plan option description       Board approved and on October 31, 2019, the Company’s shareholders adopted the Enochian’s 2019 Equity Incentive Plan (the “2019 Plan”), which replaced the 2014 Plan. The 2019 Plan authorized options to be awarded to not exceed the sum of (1) 6,000,000 new shares of Common Stock, and (2) the number of shares of Common Stock available for the grant of awards as of the effective date under the 2014 Plan that, after the effective date of the 2019 Plan, expires, or is terminated, surrendered, or forfeited for any reason without issuance of shares. The remaining shares of Common Stock available for grant related to the 2014 Plan was of 655,769 as of the effective date, this amount along with the new 6,000,000 shares totals 6,655,769 shares of Common Stock available to grant immediately after the effective date of the 2019 Plan.      
Employee Stock Option [Member]              
Class of Stock [Line Items]              
Shares issued for options exercised            
Options granted and outstanding         24,196    
Option Exercisable         472,385    
Intrinsic value of stock option         $ 0    
Enochian Biosciences [Member]              
Class of Stock [Line Items]              
Shares issued for business acquisition, shares   500,000          
Shares issued price per share   $ 4.42          
Shares issued for business acquisition, value   $ 2,200,000          
Agreement and Plan of Merger (the "Acquisition Agreement") [Member] | Enochian Biopharma Inc. and Weird Science LLC [Member]              
Class of Stock [Line Items]              
Shares issued on business combination     18,081,962   1,438,122    
Lincoln Park [Member] | Purchase Agreement [Member]              
Class of Stock [Line Items]              
Maximum limit of shares reserved for sale $ 20,000,000            
Purchase agreement, description Under the Purchase Agreement, we may direct Lincoln Park, at our sole discretion subject to certain conditions, to purchase up to 200,000 shares of Common Stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 125,000 shares of Common Stock, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $1,000,000            
Shares issued for commitment fee 139,567            
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.20.2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Feb. 06, 2020
Jul. 09, 2018
Jan. 31, 2020
Sep. 30, 2020
Sep. 30, 2019
Jun. 30, 2020
Research and development expenses       $ 1,050,376 $ 520,192  
Common stock reserved for issuance       77,249   82,237
Common stock issued       4,988    
G-Tech[Member] | License Agreement            
Royalty Percentage     2.00%      
Payment for license $ 1,200,000          
Consulting Agreement [Member] | G-Tech[Member]            
Consulting expenses   $ 130,000        
Monthly consulting fee       $ 25,000    
Research and development expenses       50,000 $ 375,000  
Monthly research costs       144,500    
Payment for scientific staffing resources       433,500    
Payment for materials       $ 400,000    
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