Quarterly report pursuant to Section 13 or 15(d)

Stockholders Equity

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Stockholders Equity
6 Months Ended
Dec. 31, 2016
Stockholders Equity [Abstract]  
STOCKHOLDERS EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

 

Exercise of warrants for non-cash

 

During the six months ended December 31, 2015, the Company issued approximately 1,094,000, shares of common stock resulting from the exercise on a non-cash basis of approximately 1,138,000 warrants.

 

Common stock issued for services

 

During the six months ended December 31, 2016 and 2015, the Company issued zero and 46,664 shares of common stock for consulting services, respectively, that had a fair market of approximately zero and approximately $180,800 , respectively, based upon the stock price at the date of issuances. The Company recorded stock-based compensation to general and administrative expense.

Options

 

In December 2014, the Board of Directors adopted and the shareholders approved Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended (the “Plan”), which allows for the granting of common stock awards, stock appreciation rights, and incentive and nonqualified stock options to purchase shares of the Company’s common stock to designated employees, non-employee directors, and consultants and advisors. The Plan allows for the granting of 1,611,769 options or stock awards. In August 2015, the board approved an amendment to the Plan. Among other things, the Plan Amendment updates the definition of “change of control” and provides for accelerated vesting of all awards granted under the plan in the event of a change of control of the Company. At December 31, 2016, no stock appreciation rights have been issued. Stock options are exercisable generally for a period of 10 years from the date of grant and generally vest over four years. As of December 31, 2016, 963,162 shares were available for future grants under the Plan.

 

The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options and warrants. The price of common stock prior to the Company being public was determined from a third party valuation. The risk-free interest rate assumptions were based upon the observed interest rates appropriate for the expected term of the equity instruments. The expected dividend yield was assumed to be zero as the Company has not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future. The expected volatility was based upon its peer group. The Company routinely reviews its calculation of volatility changes in future volatility, the Company’s life cycle, its peer group, and other factors.

 

The Company uses the simplified method for share-based compensation to estimate the expected term for employee option awards for stock-based compensation in its option-pricing model. The Company uses the contractual term for non-employee options to estimate the expected term, for share-based compensation in its option-pricing model.

 

The company did not grant any options during the six months ended December 31, 2016.

 

At December 31, 2016, the Company has unrecognized stock-based compensation expense of approximately $862,700 related to unvested stock options over the weighted average remaining service period of 2.1 years.

 

A summary of the changes in options during the six months ended December 31, 2016 is as follows:

    Number 
of 
Options
    Weighted Average Exercise Price For Share     Weighted Average Remaining Contractual Term (Years)     Aggregate Intrinsic 
Value
 
Outstanding at June 30, 2016     642,204     $ 6.41       7.7     $ 21,500  
Forfeited     (82,232  )     6.41       -     $ -  
Outstanding and expected to vest at December 31, 2016     559,972     $ 6.41       7.2     $ -  
Options exercisable at December 31, 2016     383,202     $ 5.79       8.04     $ -  

 

For the six-month period ended December 31, 2016, the Company did not grant any stock options. For the six-month period ended December 31, 2015 the Company granted 77,295 options to purchase common stock. The options have a ten year term and an excise price ranging between $3.45 and $8.45 per share. 25% of options vest on the one year anniversary of the grant date and the remaining options vest quarterly over the following three years. Following is the Black-Scholes option pricing model assumptions used to determine the fair value of options granted during the six months ended December 31, 2015:

 

    For the Six Months Ended 
December 31,
 
    2015  
Risk free interest rate     1.7 %
Dividend yield     0 %
Volatility     74 %
Expected term (in years)     6.25  

 

Restricted stock

 

A summary of the changes in restricted stock awards during the six months ended December 31, 2016, is as follows:

 

    Number of Shares     Weighted Average Price Per Share  
Unvested restricted stock awards at June 30, 2016     49,625       14.10  
Forfeited     (7,000 )     13.45  
Outstanding and expected to issue at December 31, 2016     42,625       14.21  

 

There were no restricted stock awards granted during the six months ended December 31, 2016. Restricted stock grants vest over four years. The Company has an unrecognized expense of approximately $140,000 related to unvested restricted stock grants which will be recognized over the remaining weighted average service period of 1.8 years. During the six months ended December 31, 2016, the Company issued 875 shares in relation to vested restricted stock and 4,000 were vested and are to be issued.

  

Warrants

 

There are no changes to outstanding warrants during the six months ended December 31, 2016. There were no common stock warrants granted by the Company during the six months ended December 31, 2016 and 2015. 

 

At December 31, 2016, the Company does not have any unrecognized stock-based compensation expense related to outstanding warrants. At December 31, 2016, the aggregate intrinsic value of warrants that have vested and outstanding is approximately $729,000.

 

The following summarizes the components of stock-based compensation expense which includes stock options, warrants and restricted stock in the consolidated statements of operations for the three and six months ended December 31, 2016 and 2015 (rounded to nearest $00):

 

    Three Months Ended     Six Months Ended  
    December 31,     December 31,  
    2016     2015     2016     2015  
Research and development   $ 21,500       52,200     $ 64,100       104,500  
General and administrative     110,500       235,500       240,000       466,700  
Total   $ 132,000       287,700     $ 304,100       571,200