Annual report pursuant to Section 13 and 15(d)

Convertible Preferred Stock, Common Stock and Stockholders??? Equity (Deficit)

v3.22.2.2
Convertible Preferred Stock, Common Stock and Stockholders’ Equity (Deficit)
 12 Months Ended
Jun. 30, 2022
Equity [Abstract]  
Convertible Preferred Stock, Common Stock and Stockholders’ Equity (Deficit)

Note 8. Convertible Preferred Stock, Common Stock and Stockholders’ Equity (Deficit)

 

In June 2020, the Company authorized the sale and issuance of up to 8,943,906 shares of Series A convertible preferred stock. The Series A convertible preferred stock financing was structured so that 2,047,500 shares would be issued at the first closing to one investor (“Initial Investor”) at $1.4652 per share (“First Closing”) and up to 6,896,406 shares at $1.685 per share could be issued upon the exercise of certain warrants (“Milestone Warrants”) upon achieving the following development milestones (“Development Milestones): (a) the earlier of (x) filing by the Company with the FDA of an Investigational New Drug Application, or (y) the making of an analogous regulatory filing in any foreign jurisdictions; and (b) arrangement by the Company of active pharmaceutical ingredient in amounts sufficient to facilitate the consummation of any trial to be effected pursuant to a filing.

 

Upon certification by the Board of Directors, the Company had the obligation to issue and the Initial Investor plus one designated additional investor (“Additional Investor”) had the right and obligation to purchase Milestone Warrants to purchase 766,266 and 6,130,140 shares of Series A convertible preferred stock, respectively and as amended. The Milestone Warrants had a purchase price of $0.32626 per share of the underlying 6,896,406 shares of Series A convertible preferred stock for total proceeds of $2,250,000, and the right to purchase the underlying 6,896,406 shares of Series A convertible preferred stock at $1.685 per share.

 

On March 8, 2021, the requisite Development Milestones were achieved, and therefore the Milestone Warrants were purchased for $2,250,000 in cash (See Note 3). The Milestone Warrants had a three year term.

 

 

On May 4, 2021, the Company filed an amended and restated certificate of incorporation (the “Restated Certificate”) with the Secretary of State of the State of Delaware in connection with the closing of its IPO. As set forth in the Restated Certificate, the Company’s authorized capital stock consists of 40,000,000 shares of common stock, par value $0.001 per share, and 2,000,000 shares of preferred stock, par value $0.001 per share.

 

In September 2020, the Company awarded 982,500 shares of restricted common stock to its former Chief Executive Officer (“former CEO”) under the Company’s 2020 Stock Incentive Plan (“2020 Stock Incentive Plan”) at a grant date fair value of $0.11 per share. The restrictions were subject to the satisfaction of certain performance targets and vesting requirements pursuant to the award and employment agreement. The restricted common stock vested fully upon completion of the Company’s IPO in May 2021. The restricted common stock had voting and dividend rights, and therefore all 982,500 shares were considered issued and outstanding since their date of issuance.