STOCKHOLDERS’ EQUITY

9 Months Ended

Mar. 31, 2022

Equity [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 March 31, 2022, and June 30, 2021, 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 March 31, 2022, and June 30, 2021, there were 52,798,267 and 52,219,661 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 through 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 direct Lincoln Park to 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 pursuant to the Purchase Agreement is limited to 12,016,457 shares of Common Stock, representing 19.99% of the shares of the Common Stock outstanding on the date of the Purchase Agreement 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 lesser 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 (iii) 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 and nine months ended March 31, 2022, we issued 60,000 and 337,340 shares of Common Stock to Lincoln Park under the Purchase Agreement for a purchase price of $451,700 and $3,500,039, respectively. At March 31, 2022, an amount of $15,278,611 remained available under the Purchase Agreement.

Common Stock Issuances — In the three and nine months ended March 31, 2022, there were 165,000 and 578,606 shares of Common Stock issued, respectively. In the three and nine months ended March 31, 2021, there were 1,032,732 and 1,298,543 shares of Common Stock issued, respectively.

Acquisition of Enochian Biopharma Inc. / 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 March 31, 2022, 1,250,000 contingent shares are issuable in connection with the Acquisition of Enochian Biopharma.

Acquisition of Enochian Denmark — At March 31, 2022, and June 30, 2021, the Company maintained a reserve of 17,414 shares of Common Stock of the Registrant held in escrow according to Danish law (the “Escrow Shares”), 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 March 31, 2022, and June 30, 2021, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark. There have been 167,639 shares of Common Stock issued to non-consenting shareholders of Enochian Denmark as of March 31, 2022. During the three and nine months ended March 31, 2022, the Company issued zero shares of Common Stock to such non-consenting shareholders of Enochian Denmark. There is no impact on outstanding shares as these shares are reflected as issued and outstanding.

Stock-based Compensation

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)		5.0 – 6.5
Volatility		82.29%-90.21%
Risk free interest rate		0.77%-1.87%
Dividend yield		0%

The Company recognized stock-based compensation expense related to the options of $577,676 and $5,348,943 for the three and nine months ended March 31, 2022, respectively. The Company recognized stock-based compensation expense related to the options of $499,428 and $1,184,975 for the three and nine months ended March 31, 2021, respectively. At March 31, 2022, the Company had approximately $7,184,117 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 “2014 Plan”), and the Company had reserved 1,206,000 shares of Common Stock for issuance in accordance with the terms of the 2014 Plan.

On October 30, 2019, the Board approved and on October 31, 2019, the Company’s shareholders adopted 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 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 that were available to grant immediately after the effective date of the 2019 Plan.

Pursuant to the 2019 Plan, the Company granted options to purchase 11,900 and 3,142,100 shares of Common Stock to employees with a three-year vesting period during the three and nine months ended March 31, 2022, respectively. For the three and nine months ended March 31, 2021, the Company granted options to purchase zero and 9,201 shares of Common Stock to employees with a three-year vesting period.

During the three and nine months ended March 31, 2022, the Company granted options to purchase 65,000 shares of Common stock to employees with a one-year vesting period. For the three and nine months ended March 31, 2021, the Company granted options to purchase zero shares of Common Stock to employees with a one-year vesting period.

During the three and nine months ended March 31, 2022, the Company granted options to purchase 23,314 and 86,776 shares of Common stock, respectively, to the Board of Directors and Scientific Advisory Board Members with a one-year vesting period. For the three and nine months ended March 31, 2021, the Company granted annual options to purchase 52,500 and 140,131 shares of Common Stock, respectively to members of the Board of Directors and Scientific Advisory Board with a one-year vesting period.

The Company issued options for consulting services to purchase zero and 21,979 shares of Common Stock with immediate vesting, issued options to purchase zero and 24,500 shares of Common Stock with a one-year vesting period, and issued options to purchase zero and 60,000 shares of Common Stock with a three-year vesting period during the three and nine months ended March 31, 2022, respectively.

All of the above options are exercisable at the market price of the Company’s Common Stock on the date of the grant.

To date the Company has granted options under the Plan (“Plan Options”) to purchase 4,729,508 shares of Common Stock.

A summary of the status of the Plan Options outstanding at March 31, 2022, is presented below:

Options Outstanding										Options Exercisable
	Exercise Price Ranges		Number Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price			Number Exercisable		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price
	$	2.00–4.50		279,143		8.44		$	3.23		255,637		8.40	$	3.24
	$	4.51–6.50		3,545,722		8.97		$	4.80		471,998		6.85	$	6.17
	$	6.51–8.00		876,242		8.59		$	7.98		556,094		7.96	$	7.93
Total				4,701,108		8.86		$	5.30		1,283,729		7.64	$	6.35

A summary of the status of the Plan Options at March 31, 2022, and changes since July 1, 2021, are presented below:

	Shares			Weighted Average Exercise Price		Average Remaining Life		Weighted Average Intrinsic Value
Outstanding at beginning of period		1,329,153		$	6.24		8.42	$	511,239
Granted		3,400,355		$	4.93		—	$	—
Exercised		—		$	—		—	$	—
Forfeited		—		$	—		—	$	—
Expired		(28,400	)	$	2.15		—	$	—
Outstanding at end of period		4,701,108		$	5.30		8.86	$	9,808,104
Exercisable at end of period		1,283,729		$	6.35		7.64	$	1,153,019

At March 31, 2022, the Company had 1,283,729 exercisable Plan Options outstanding. The total intrinsic value of options exercisable at March 31, 2022, was $1,153,019. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) or at March 31, 2022 (for outstanding options), less the applicable exercise price.

Common Stock Purchase Warrants

A summary of the warrants outstanding at March 31, 2022, and changes since July 1, 2021, are presented below:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding at beginning of period		1,350,000		$	1.30		1.02
Granted		—		$	—		—
Exercised		(100,000	)	$	1.30		—
Cancelled/Expired		—		$	—		—
Outstanding and exercisable at end of period		1,250,000		$	1.30		.28

				Underlying Warrants Outstanding			Equivalent Shares Exercisable
Exercise Prices		Equivalent Shares		Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	1.30		1,250,000	.28	$	1.30		1,250,000	$	1.30

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 RSUs of $228 and $258,559 for the three and nine months ended March 31, 2022, respectively. The Company recognized stock-based compensation expense related to the RSUs of $147,000 for the three and nine months ended March 31, 2021, respectively.

A summary of the status of Restricted Stock Units outstanding at March 31, 2022, and changes since July 1, 2021, is presented below:

	Shares			Weighted Average Issuance Price		Weighted Average Remaining Life		Weighted Average Intrinsic Value
Outstanding at beginning of period		5,000		$	6.15	$	.02	$	—
Granted		36,266			—		—		—
Exercised		(41,266	)		—		—		—
Cancelled/Expired		—			—		—		—
Outstanding at end of period		—		$	—	$	—	$	—