Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
3 Months Ended
Sep. 30, 2018
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 9 - STOCKHOLDERS’ EQUITY

  

Units to be Issued

 

During the three months ended September 30, 2018, the Company received $404,500 from investors for the purchase of units under a private placement. Each unit offered in the private placement includes (i) one share of common stock, and (ii) a five-year warrant to purchase 0.65 shares of common stock at an exercise price of $1.50 per share. The private placement closed in three financings dated October 12, 2018, October 18, 2018 and November 2, 2018 (See Note 12 – Subsequent Events). Accordingly, the $404,500 is reflected in current liabilities at September 30, 2018 as units to be issued.

 

Common Stock

 

During the three months ended September 30, 2018, the Company did not issue any shares of common stock resulting from the exercise on a non-cash basis warrants.

 

Options and warrants

 

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. In January 2017, the stockholders approved an increase of 2,500,000 shares authorized to be issued under the Plan, raising the total shares allowed under the Plan to 4,111,769. In December 2017 the board approved, and in February 2018 the shareholders approved, an amendment to the Plan that increased the number of shares of Common Stock authorized for issuance under the Plan by an additional 2,500,000 shares from 4,111,768 to 6,611,768. As of September 30, 2018, 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 September 30, 2018 3,568,528 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 on historical volatility. 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 share-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.

 

On February 13, 2017, Mr. Michael Becker, the Company’s Chief Financial Officer, resigned and entered into a consulting agreement with the Company to provide financial, investor, digital media, and public relations services for the Company. As a result of Mr. Becker’s change from an employee to a consultant, his options and shares of restricted stock outstanding on such date continued to vest pursuant to the awards’ original terms and were reclassified as non-employee awards. On December 15, 2017 Mr. Becker’s consulting agreement expired and all unvested options were cancelled.

 

During the three months ended September 30, 2018, there were no options granted.

 

At September 30, 2018, the Company has unrecognized stock-based compensation expense of approximately $1,367,000 related to unvested stock options over the weighted average remaining service period of 2.92 years.

 

Options

 

A summary of the changes in options during the three months ended September 30, 2018 is as follows:

 

    Number
of
Options
    Weighted Average Exercise Price For Share     Weighted Average Remaining Contractual Term (Years)     Aggregate Intrinsic
Value
 
Outstanding and expected to vest at June 30, 2018     3,068,865     $ 1.45       8.8     $ 511,000  
Forfeited     25,625     $ 7.59       -     $ -  
Outstanding and expected to vest at September 30, 2018     3,043,240     $ 1.40       8.6     $ 802,500  
Options exercisable at September 30, 2018     788,300     $ 2.87       7.2     $ 129,500  

   

Warrants

 

A summary of the changes in outstanding warrants during the three months ended September 30, 2018 is as follows:

 

    Number of Shares   Weighted Average Exercise Price Per Share
Outstanding and vested at June 30, 2018     9,815,025     $ 3.96  
Forfeited     (7,500 )     -  
Outstanding and vested at September 30, 2018     9,807,525     $ 3.96  

   

During the quarter ended September 30, 2018, the Company issued no warrants.

 

At September 30, 2018 and June 30, 2018, the aggregate intrinsic value of warrants vested and outstanding was approximately $265,000 and $215,000, respectively.

 

The following summarizes the components of stock-based compensation expense which includes stock options and restricted stock in the consolidated statements of operations for the three months ended September 30, 2018 and 2017 (rounded to nearest $00):

 

    Three Months Ended September 30,
2018
  Three Months Ended September 30,
2017
Research and development   $ 13,400     $ 7,100  
General and administrative     139,400       61,800  
Total   $ 152,800     $ 68,900