Annual report pursuant to Section 13 and 15(d)

Stockholders' equity

v3.22.2.2
Stockholders' equity
 12 Months Ended
Jun. 30, 2022
Equity [Abstract]  
Stockholders' equity
10. Stockholders’ equity
Common Stock
 
On October 6, 2020, the Company announced the closing of an underwritten public offering 2,666,644 shares of its common stock at a price to the public of $3.10 per share. The Company also announced that the underwriter fully exercised its over-allotment option to purchase 483,870 additional shares of its common stock at the offering price of $3.10 per share.​​​​​​​
 
On April 30, 2021, the Company announced the closing of an underwritten public offering of 3,036,366 shares of its common stock at a price to the public of $4.25 per share. The Company also announced that the underwriter exercised the over-allotment option to purchase 317,274 additional shares of its common stock at the offering price of $4.25 per share.
Warrants
On December 6, 2019, the Investors were issued 4 Purchase Warrants that were exercisable into 214,190 fully paid shares of common stock should the Purchase Warrants be exercised in full (“Purchase Warrants”). The exercise price for the Purchase Warrants is US$10.50 per share issued on exercise of a Purchase Warrant. The Purchase Warrants are exercisable, in whole or in part, any time from the date of issue until the fifth anniversary of the date of issue (December 6, 2024). On April 22, 2020, the Company issued 37,417 shares of common stock in connection with a cashless exercise of Purchase Warrants exercisable for 107,095 shares of common stock. The Company did not have an effective registration statement registering the resale of the Warrant Shares by the Holder at the time the Holder wanted to exercise the warrant; therefore, the Holder carried out a cashless exercise. The formula for conducting a cashless exercise was outlined in the Warrant agreement. Based on this formula, the Holder would have been entitled to receive 107,095 shares of common stock if they had exercised the Purchase Warrants for cash. Because of the cashless exercise, the holder received 37,417 shares.
On October 6, 2020, the Company announced the closing of an underwritten public offering of 559,162 shares of common stock underlying pre-funded warrants initially purchased for $3.09 per share and immediately exercisable at $0.01 per share (“Pre-Funded Warrants”). All 559,162 Pre-Funded Warrants issued had been exercised as of June 30, 2021.
The activity related to warrants during for the fiscal years ended June 30, 2022 and 2021, is summarized as follows:
 
    
Common
Stock
from
Warrants
     
Weighted-
average
Exercise
Price (per
share)
  
Outstanding and exercisable at July 1, 2020
      145,424        29.48  
    
 
 
           
Granted
      559,162        3.09  
    
 
 
           
Exercised
      (559,162 )       3.10  
Forfeited
      (38,329 )       82.50  
    
 
 
           
Outstanding and exercisable at June 30, 2021
      107,095      $ 10.50  
    
 
 
           
Outstanding and exercisable at June 30, 2022
      107,095      $ 10.50  
 
Equity Incentive Plan
Employee Share Option Plan
Upon the Re-domiciliation, the Company assumed BBL’s obligations with respect to the settlement of options that were issued by BBL prior to the Re-domiciliation pursuant to the Benitec Officers’ and Employees’ Share Option Plan (the “Plan”). This includes the Company’s assumptions of the Plan and all award agreements pursuant to which each of the options were granted. Each option when exercised entitles the option holder to one share in the Company. Options are exercisable on or before an expiry date, do not carry any voting or dividend rights and are not transferable except on death of the option holder or in certain other limited circumstances . Employee options vest one third on each anniversary of the applicable grant date for three years. If an employee dies, retires or otherwise leaves the organization, and certain other conditions have been satisfied, generally the employee has 12 months to exercise their options, or the options are cancelled. After the Re-domiciliation, no new options have been or will be issued under the Plan.
Equity and Incentive Compensation Plan
On December 9, 2020, the Company’s stockholders approved the Company’s 2020 Equity and Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan provides for the grant of various equity awards. Currently, only stock options are outstanding under the 2020 Plan. Each option when exercised entitles the option holder to one share of the Company’s common stock. Options are exercisable on or before an expiry date, do not carry any voting or dividend rights, and are not transferable except on death of the option holder or in certain other limited circumstances. Employee stock options vest in increments of one-third on each anniversary of the applicable grant date over three years. Non-employee director options vest in increments of one-third on the day prior to each of the Company’s next three annual stockholder meetings following the grant date. If an option holder dies or terminates employment or service due to Disability (as defined in the 2020 Plan), the option holder generally has 12 months to exercise their vested options, or the options are cancelled. If an option holder otherwise leaves the Company, other than for a termination by the Company for Cause (as defined in the 2020 Plan), the option holder generally has 90 days to exercise their vested options, or the options are cancelled. Upon the consummation of a Change in Control (as defined in the 2020 Plan), all unvested stock options will immediately vest as of immediately prior to the Change in Control.
On December 8, 2021, the Company’s stockholders approved an amendment to the 2020 Plan, which increased the number of shares of the Company’s common stock reserved under the 2020 Plan. For the fiscal year ended June 30, 2022, our named executive officers (“NEO’s”) were not granted any equity incentive awards.
 
Equity Awards
The activity related to equity awards, which comprised of stock options during the fiscal years ended June 30, 2022 and 2021, respectively, is summarized as follows:
 
    
Stock
Options
     
Weighted-
average
Exercise
Price
     
Weighted-
average
Remaining
Contractual
Term
     
Aggregate
Intrinsic
Value
  
Outstanding at July 1, 2020
      70,154        60.42        2.89 years        —    
Exercisable at July 1, 2020
      41,829        69.81        2.59 years        —    
Granted
      640,320        3.29                    
Forfeited
      (8,410 )       153.79                    
    
 
 
                             
Outstanding at June 30, 2021
      702,064        7.16        8.07 years        —    
    
 
 
                             
Exercisable at June 30, 2021
      54,158      $ 47.90        2.09 years      $ —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Granted
      36,000        2.99        9.45 years      $ —    
Outstanding at June 30, 2022
      738,064        6.95        7.18 years      $ —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Exercisable at June 30, 2022
      275,174        13.16        6.19 years      $ —    
    
 
 
     
 
 
     
 
 
     
 
 
  
 
Equity-based Compensation Expense
The weighted-average grant-date fair value of stock options granted during the years ended June 30, 2022 and June 30, 2021 was $2.60 and $2.68, respectively.
The Company estimated the fair value of each employee equity award on the grant date using the Black-Scholes option- pricing model with the following assumptions:
 
    
Fiscal Year Ended
June 30,
  
    
2022
    
2021
  
Expected volatility
      122.1 %     
112.0-127.4
 % 
Expected term
      6 years       3.5-6 years  
Risk-free interest rate
      1.36 %      0.44-0.55 % 
Expected dividend yield
      —   %      —   % 
Expected Volatility.
Due to the lack of Company-specific historical or implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar public companies in the life sciences industry. The Company selected the peer group based on comparable characteristics, including development stage, product pipeline and enterprise value. The Company computed historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the equity-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own share price becomes available.
Expected
 
Term.
The expected term represents the period that the equity awards are expected to be outstanding. For stock options with service conditions, it is based on the “simplified method” for developing the estimate of the expected life. Under this approach, the expected term is presumed to be the midpoint between the average vesting date and the end of the contractual term.
Risk-free Interest Rate.
The Company bases the risk-free interest rate assumption on U.S. Treasury constant maturities with maturities similar to those of the expected term of the equity award being valued.
Expected Dividend Yield.
The Company bases the expected dividend yield assumption on the fact that it has never paid dividends and does not expect to pay dividends in the foreseeable future.
In addition to assumptions used in the Black-Scholes option-pricing model, the Company estimates a forfeiture rate to calculate the equity-based compensation expense for equity awards. The forfeiture rate is based on an analysis of actual and estimated forfeitures.
Share-Based Compensation Expense
The classification of share-based compensation expense for the years ended:
 
(US$’000)
   
June 30,
  
    
2022
     
2021
  
Research and development
    $ 257      $ 212  
General and administrative
      613        422  
    
 
 
     
 
 
  
Total share-based compensation expense
    $ 870      $ 634  
    
 
 
     
 
 
  
 
As of June 30, 2022, and 2021, there was $522,000 and $1,266,000, respectively, of unrecognized share-based compensation expense related to stock options granted under the Plan and 2020 Plan.