Quarterly report pursuant to Section 13 or 15(d)

Equity

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Equity
 9 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Equity

Note 12. Equity

 

Underwritten Offering of Common Stock

 

On January 29, 2024, the Company closed an underwritten public offering of 23,000,000 shares of its common stock at a price to the public of $0.50 per share pursuant to an underwriting agreement with Roth Capital Partners, LLC. The shares of common stock issued at closing included 3,000,000 shares issued pursuant to the underwriters’ over-allotment option, which was exercised in full. Gross proceeds totaled $11.5 million before deducting the underwriting discount and offering expenses of approximately $1.1 million resulting in net proceeds from the offering of approximately $10.4 million. Certain of the Company’s directors, officers and employees participated in the offering by purchasing an aggregate of $1.0 million of shares on the same terms and conditions as other investors.

 

Equity Incentive Plans

 

During the nine months ended March 31, 2024, the Company granted employees options to purchase an aggregate of approximately 0.26 million shares of common stock. The fair values of the Company’s options were estimated at the dates of grant using a Black-Scholes option pricing model with the following assumptions:

 

    Nine Months Ended
March 31,
2024		  
Exercise price   $ 0.59 – 0.97  
Expected term (years)     4.00 – 4.75  
Volatility     71 – 75 %
Risk-free interest rate     4.42 – 4.66 %
Dividend yield     0 %
Weighted Average Grant Date Fair Value of Options granted during the period   $ 0.35  

 

During the nine months ended March 31, 2024 the Company awarded certain employees and directors grants of an aggregate of approximately 1.7 million restricted stock units (“RSUs”) with a weighted average grant date fair value of $0.81. The RSUs will be expensed over the requisite service period. The terms of the RSUs include vesting provisions based solely on continued service. If the service criteria are satisfied, the RSUs will generally vest over 4 to 5 years.

 

During the nine months ended March 31, 2024 the Company awarded certain employees grants of an aggregate of approximately 0.55 million restricted stock units with market value appreciation conditions (“MVSUs”) with a weighted average grant date fair value of $1.41. The MVSUs will be expensed over the requisite service period. The terms of the MVSUs include vesting provisions based on continued service. The number of shares of the Company’s common stock earned at vesting is based on the Company’s stock price performance with amounts earned subject to a vesting multiplier ranging from 0% to 200%. If the service criteria are satisfied, the MVSUs will vest over 3 years.

 

Compensation expense related to our stock-based awards described above was as follows (in thousands):

 

    Three Months Ended
March 31,		     Nine Months Ended
March 31,		  
    2024     2023     2024     2023  
Research and Development   $ 132     $ 1,120     $ 783     $ 3,171  
General and Administrative   $ 777     $ 2,090     $ 2,201     $ 4,283  
Cost of Revenue   $ 35      
—
     $ 159          
Total   $ 944     $ 3,210     $ 3,144     $ 7,454  

 

Unrecognized stock-based compensation expense and weighted-average years to be recognized are as follows (in thousands):

 

    As of March 31, 2024  
    Unrecognized
stock-based
compensation		     Weighted-
average years
to be recognized		  
Options   $ 757       1.61  
Restricted stock units   $ 6,039       1.84  

 

Nasdaq Stock Market notification

 

On October 24, 2023, the Company received notification from the Listing Qualifications Department of The Nasdaq Stock Market, or Nasdaq, stating that the Company did not comply with the minimum $1.00 bid price requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). In accordance with Nasdaq listing rules, the Company was afforded 180 calendar days (until April 22, 2024) to regain compliance with the Bid Price Requirement (the “Initial Compliance Period”). To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this additional 180-day period, all as described in more detail in the Current Report on Form 8-K filed with the SEC on October 27, 2023. Since the Company did not regain compliance by April 22, 2024, the Company requested, and was granted, an additional 180 calendar days for the Company to regain compliance with Bid Price Requirement expiring October 21, 2024. The Company intends to monitor the closing bid price of its common stock and consider available options to regain compliance with the Bid Price Requirement which could include seeking to effect a reverse stock split.