Common Stock |
9 Months Ended |
|---|---|
Mar. 31, 2021 | |
| Equity [Abstract] | |
| Common Stock |
10. Common Stock
The Company authorized the sale and issuance of up to 22,800,000 shares of common stock. One related party investor owns 12,000,000 shares of common stock outstanding as of March 31, 2021. As of June 30, 2020, the related party investor owed the Company $3,500, for the purchase of these shares, which was paid in September 2020.
In September 2020, the Company awarded 982,500 shares of restricted common stock to its Chief Executive Officer (“CEO”) under the 2020 Stock Incentive Plan (“2020 Stock Plan”) at a grant date fair value of $0.1083 per share. The restrictions are subject to the satisfaction of certain performance targets and vesting requirements pursuant to the award and employment agreement. The restricted common stock has voting and dividend rights, and therefore all 982,500 shares of restricted common stock are considered issued and outstanding as of March 31, 2021.
As of March 31, 2021, the Company had reserved 1,650,000 shares of common stock for the 2020 Stock Plan, 2,047,500 shares of common stock for the conversion of Series A Preferred, and 6,896,406 shares of common stock for the conversions of Series A Preferred from the exercise of future Milestone Warrants.
On May 11, 2021, the Company closed its IPO of 3,000,000 shares of its common stock at an offering price of $7.00 per share for gross proceeds of approximately $21,000,000. Furthermore, the series A Preferred warrants will be remeasured and reclassified to equity, upon automatic cashless exercise of the warrants and conversion of the underlying Series A preferred stock to common stock. The change in fair value will be recorded in other income (expense) in the statement of operations.
As of March 31, 2021, the rights of the common stockholders are as follows:
Voting Rights - The holders of the common stock are entitled to one vote for each share of common stock. The voting, dividend, and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers, and preferences of the holders of the Series A Preferred.
Dividends - The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless the holders of the Series A Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred stock then outstanding.
Liquidation Preference - In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after the payment or provision for payment of all debts and liabilities of the Company and all preferential amounts to which the holders of Preferred Stock are entitled with respect to the distribution of assets in liquidation, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution. |