NOTES PAYABLE

9 Months Ended

Mar. 31, 2022

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 had 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 was equal to $12.00 per share of Common Stock. The holder did not exercise the conversion feature that expired on February 6, 2021. 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 March 31, 2022, and 2021 was $1,200,000. As of March 31, 2022, and 2021, the Company recorded accrued interest in the amount of $12,030 and $6,000, which is included in accrued expenses for each period. For the three and nine months ended March 31, 2022, the interest expense related to the Convertible Notes amounted to $18,151 and $54,604, respectively.

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 was originally 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 was 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 of $493,192 is being accreted over the life of the Unsecured Note.

On February 11, 2021, the Company entered into an amendment to the Unsecured Note in the principal amount of $5,000,000 that extends the Maturity Date out to November 30, 2022. All other terms of the Unsecured Note remain the same. The change in Maturity Date required an additional year of interest at the fixed rate of 6% per annum, which was prepaid by the Company in full on the date of the amendment through the issuance of 74,054 shares of the Company’s Common Stock based on the closing market price on that date for a total value of $298,178. For the three and nine months ended March 31, 2022, respectively, discount amortization of $74,274 and $222,822 was charged to interest expense. For the three and nine months ended March 31, 2021, discount amortization of $74,274 and $148,253, respectively was charged to interest expense. The Unsecured Note balance, net of discount at March 31, 2022, was $4,801,936, and is reflected in current liabilities.

Finance Agreement — On November 30, 2021, the Company entered into a premium finance agreement (the “Agreement”) with a principal amount of $666,875 at 3.99% interest per annum. The repayment of the Agreement will be made in nine equal monthly installments of $56,469.

For the three and nine months ended March 31, 2022, the Company recorded total interest expense in the amount of $2,782 and $4,977, respectively. This amount is reflected in other income and expenses.

Total interest expense recorded for the three and nine months ended March 31, 2022, was $95,207 and $278,327, respectively. Interest expense recorded for the three and nine months ended March 31, 2021, was $96,347 and $282,086, respectively.