Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.21.2
Stockholders' Equity
12 Months Ended
Jun. 30, 2021
Equity [Abstract]  
Stockholders' Equity

8

Stockholders’ equity

Preferred stock

Series C Preferred stock

 

 

 

Series C Preferred Stock

 

 

 

Number

of shares

 

 

$

(in thousands)

 

Balance – June 30, 2019 and 2020

 

 

 

 

 

 

Issuance

 

 

25,028

 

 

 

18,286

 

Issued on exercise of Series C Agent Warrants

 

 

33

 

 

 

79

 

Conversion of Series C Preferred stock to common stock

 

 

(4,969

)

 

 

(3,713

)

Balance – June 30, 2021

 

 

20,092

 

 

 

14,652

 

In connection with the Merger (note 3), the Company issued 25,028 shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) in three separate closings of a private placement (Series C-1, C-2, and C-3) in August, 2020.  Each share of Series C Preferred Stock was issued at a purchase price of $1,000 per share and is convertible into shares of common stock based on the respective conversion prices which were determined at the closing of each round of the private placement. Subject to ownership limitations, the owners of the Series C Preferred Stock are entitled to receive dividends, payable in shares of common stock at a rate of 10%, 15%, 20% and 25% of the number of shares of common stock issuable upon conversion of the Series C Preferred Stock, on the 12th, 24th, 36th and 48th month, anniversary of the initial closing of the private placement which occurred on August 19, 2020.   The Series C Preferred Stock dividends do not require declaration by the Board of Directors and are accrued annually as of the date the dividend is earned in an amount equal to the applicable rate of the stated value. Any outstanding shares of Series C Preferred Stock will automatically convert to shares of common stock on August 19, 2024.

Total gross proceeds from the private placement were $25,028, or approximately $21,573 in net proceeds after deducting financing costs of $3,455 with respect to agent commissions and expenses, as well as legal and accounting fees.  Of the total financing

costs, $85 was deferred as of June 30, 2020. In addition, the Company issued 2,504 Series C Preferred Stock purchase warrants with a fair value of $3,287 to the placement agent (“Series C Agent Warrants”).

The conversion prices for the Series C-1 Preferred Stock, Series C-2 Preferred Stock and Series C-3 Preferred Stock are $1.16, $1.214 and $1.15, respectively. Based on the conversion prices of the three respective classes of the Series C Preferred Stock, the originally issued 25,028 shares of Series C Preferred Stock were convertible into an aggregate of 21,516 shares of common stock. The cumulative dividends to be issued on the 12th, 24th, 36th and 48th month anniversary of the initial closing of the private placement for the initially issued 25,028 shares of Series C Preferred Stock were 15,062 shares of common stock. Conversion shares are rounded up to the nearest whole share

The Company’s Series C Preferred Stock outstanding, conversion shares, and future dividends as of June 30, 2021 are as follows:

 

Series

 

Number

 

 

Conversion Price

$

 

 

Number of conversion shares

(in thousands)

 

 

Dividend Shares

(in thousands)

 

Series 1

 

 

16,564

 

 

 

1.16

 

 

 

14,279

 

 

 

9,995

 

Series 2

 

 

1,148

 

 

 

1.21

 

 

 

946

 

 

 

662

 

Series 3

 

 

2,380

 

 

 

1.15

 

 

 

2,070

 

 

 

1,449

 

 

 

 

20,092

 

 

 

 

 

 

 

17,295

 

 

 

12,106

 

 

Series C Dividends

 

Dividend Shares

(in thousands)

 

10% - August 19, 2021

 

 

1,729

 

15% - August 19, 2022

 

 

2,594

 

20% - August 19, 2023

 

 

3,459

 

25% - August 19, 2024

 

 

4,324

 

 

 

 

12,106

 

The conversion feature of the Series C Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series C Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $3,181 related to the beneficial conversion feature arising from the issuance of Series C Convertible Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share.

The Series C Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series C Preferred Stock. The Series C Preferred Stock shall be pari passu in liquidation to the Company’s Series A and Series B Preferred Stock. The liquidation value of the Series C Preferred Stock at June 30, 2021 is the stated value of $20,092.      

Series B Preferred stock

 

 

 

Series B Preferred Stock

(in thousands)

 

 

 

Number

of shares

 

 

$

 

Balance – June 30, 2019

 

 

674

 

 

 

4,699

 

Conversion of Series B Preferred stock to common stock

 

 

(25

)

 

 

(174

)

Balance – June 30, 2020

 

 

649

 

 

 

4,525

 

Conversion of Series B Preferred stock to common stock

 

 

(649

)

 

 

(4,525

)

Balance – June 30, 2021

 

 

 

 

 

 

 

 

During the year ended June 30, 2016, the Company issued an aggregate of 902 shares of Series B Preferred Stock at a purchase price of $8.00 per share. Each share of Series B Preferred Stock was convertible into 0.25 shares of common stock equating to a conversion price of $32.00 (the “Conversion Price”) and automatically converted to common stock on April 29, 2021.  The holders of the Series B Preferred Stock were entitled to an annual cumulative, in arrears, dividend at the rate of 9% payable quarterly. The 9% dividend accrued quarterly commencing on the date of issue and was payable on September 30, December 31, March 31, and June 30 of each year commencing on June 30, 2016. Dividends were payable solely by delivery of shares of common stock in an amount for each holder equal to the aggregate dividend payable to such holder with respect to the shares of Series B Preferred Stock held by such holder divided by the Conversion Price. The Series B Preferred Stock did not contain any repricing features. Each share of Series B Preferred Stock entitled its holder to vote with the common stock on an as-converted basis.

The liquidation value of the Series B Preferred Stock at June 30, 2021 was the stated value of $nil (2020 - $5,189).

In addition, in relation to the VAL-083 compound, the Company and the former holders of the Series B Preferred Stock entered into a royalty agreement pursuant to which the Company will pay the former holders of the Series B Preferred Stock, in aggregate, a single-digit royalty based on their pro rata ownership of the former Series B Preferred Stock on products sold directly by the Company or sold pursuant to a licensing or partnering arrangement (the “Royalty Agreement”). Rights to the royalties vested during the first three years following the applicable original closing dates in equal thirds to the former holders of the Series B Preferred Stock on each of the three vesting dates. Upon such vesting dates, the royalty amounts became vested royalties. If the holder converted their Series B Preferred Stock to common stock prior to a respective vesting date, such holder forfeited any royalty rights that had not vested prior to such conversion date and shall no longer receive ongoing future royalty payments under the Royalty Agreement but will be entitled to receive any residual royalty payments that have vested.

Pursuant to the Series B Preferred Stock dividend, during the year ended June 30, 2021, the Company issued 11 (2020 – 15) shares of common stock and recognized $17 (2020 – $9) as a direct increase in accumulated deficit.  Prior to mandatory conversion to common stock on April 29, 2021, during the year ended June 30, 2021, a total of 48 (2020 – 25) shares of Series B Preferred Stock were converted for an aggregate 12 (2020 – 6) shares of common stock.

On April 29, 2021, the remaining 601 shares of Series B Preferred Stock were converted into 150 shares of common stock pursuant to the five-year mandatory conversion feature. A total of nil (2020 – 649) shares of Series B Preferred Stock are outstanding as of June 30, 2021, such that a total of nil (2020 – 162) shares of common stock are issuable upon conversion of the Series B Preferred Stock as at June 30, 2021. Converted shares are rounded up to the nearest whole share.

Series A Preferred Stock

Effective September 30, 2014, the Company filed a Certificate of Designation of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of Nevada. Pursuant to the Series A Certificate of Designation, the Company designated 279 shares of preferred stock as Series A Preferred Stock. The shares of Series A Preferred Stock have a stated value of $1.00 per share (the “Series A Stated Value”) and are not convertible into common stock. The holder of the Series A Preferred Stock is entitled to dividends at the rate of 3% of the Series A Stated Value per year, payable quarterly in arrears. Upon any liquidation of the Company, the holder of the Series A Preferred Stock will be entitled to be paid, out of any assets of the Company available for distribution to stockholders, the Series A Stated Value of the shares of Series A Preferred Stock held by such holder, plus any accrued but unpaid dividends thereon, prior to any payments being made with respect to the common stock. The Series A Preferred Stock is held by Valent (note 6).

The Series A Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock, and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series A Preferred Stock. The Series A Preferred Stock shall be pari passu in liquidation to the Company’s Series B and Series C Preferred Stock. The liquidation value of the Series A Preferred stock at June 30, 2021 of $279.

There was no change to the Series A Preferred stock for the years ended June 30, 2021 or 2020.

Common stock

Amended articles of incorporation

On June 25, 2021, the Company amended its articles of incorporation to increase the number of authorized shares of common stock from 95,000 to 175,000 shares.

Stock Issuances

Year ended June 30, 2020

Underwritten public offering

On August 16, 2019, the Company closed on the sale of (i) 4,895 shares of its common stock, par value $0.001 per share (the “Common Stock”), (ii) pre-funded warrants (“PFW”) to purchase an aggregate of 2,655 shares of Common Stock and (iii) common warrants to purchase an aggregate of 7,763 shares of Common Stock (“2020 Investor Warrants”), including 800 shares of Common Stock and 2020 Investor Warrants to purchase an aggregate of 1,013 shares of Common Stock sold pursuant to a partial exercise by the underwriters of the underwriters’ option to purchase additional securities, in the Company’s underwritten public offering (the “Offering”). Each share of Common Stock or PFW, as applicable, was sold together with a 2020 Investor Warrant to purchase one share of Common Stock at a combined effective price to the public of $1.00 per share of Common Stock and accompanying 2020 Investor Warrant.

The net proceeds from the Offering, including from the partial exercise of the underwriters’ option to purchase additional securities, were $6,583 after deducting underwriting discounts and commissions, and other offering expenses.

The 2020 Investor Warrants are exercisable at $1.00 per share until their expiry on August 16, 2024 and the PFW are exercisable at $0.01 per share at any time after August 16, 2019. The Company also issued 377 warrants to the underwriters of the Offering. The underwriter warrants are exercisable at $1.15 per share commencing February 10, 2020 until their expiry on August 14, 2022.

During the year ended June 30, 2020, all of the 2,655 PFW were exercised at $0.01 per PFW for proceeds of $27.

Shares issued for services

During the year ended June 30, 2021, the Company issued nil (2020 – 23) shares of common stock for services resulting in the recognition of $nil (2020 – $13) in expense. All of the shares issued for services for the year ended June 30, 2020 have been recognized as research and development expense.

2017 Omnibus Incentive Plan

As subsequently approved by the Company’s stockholders at an annual meeting of stockholders on April 11, 2018, the Company’s board of directors approved adoption of the Company’s 2017 Omnibus Equity Incentive Plan (the “2017 Plan”). The board of directors also approved a form of Performance Stock Unit Award Agreement to be used in connection with grants of performance stock units (“PSUs”) under the 2017 Plan. As approved by the Company’s stockholders on June 25, 2021, the number of common shares available under the 2017 Plan was increased to 13,000 shares. Under the 2017 Plan 13,000 shares of Company common stock are currently reserved for issuance, less the number of shares of common stock issued under the Del Mar (BC) 2013 Amended and Restated Stock Option Plan (the “Legacy Plan”), or that are subject to grants of stock options made, or that may be made, under the Legacy Plan, or that have been previously exercised. A total of 136 shares of common stock have been issued under the Legacy Plan and/or are subject to outstanding stock options granted under the Legacy Plan, and a total of 6,256 shares of common stock have been issued under the 2017 Plan and/or are subject to outstanding stock options granted under the 2017 Plan leaving 6,414 shares of common stock available at June 30, 2021 for issuance under the 2017 Plan if all such options under the Legacy Plan were exercised, net of stock options previously exercised.

The maximum number of shares of Company common stock with respect to which any one participant may be granted awards during any calendar year is 8% of the Company’s fully diluted shares of common stock on the date of grant (excluding the number of shares of common stock issued under the 2017 Plan and/or the Legacy Plan or subject to outstanding awards granted under the 2017 Plan and/or the Legacy Plan). No award will be granted under the 2017 Plan on or after July 7, 2027, but awards granted prior to that date may extend beyond that date.

During the year ended June 30, 2021, a total of 223 options to purchase shares of common stock issued to directors of the Company were amended such that the period to exercise vested options to purchase shares of common stock from the date of termination of continuous service with the Company was extended from 90 days to one year.  Of the total, 67 had their expiry extended from September 26, 2020 to June 26, 2021 and 156 had their expiry extended from November 19, 2020 to August 19, 2021. As a result of the amendments, a total of $9 in stock-based compensation expense has been recognized.  In addition, 250 options to purchase shares of common stock previously granted to an officer of the Company were amended such that the vesting of the options to purchase shares of common stock was changed from a completely contingent vesting to a time-based vesting such that 1/6th of the options to purchase shares of common stock vest on the six-month anniversary of the amendment date with the remaining portion vesting in equal monthly installments over a period of 30 months commencing on the seven-month anniversary of the amendment date.  A total compensation expense of $319 will be recognized over the amended vesting period for the 250 options to purchase shares of common stock. Also, during the year ended June 30, 2021, the Board of Directors approved the acceleration of vesting of 280 options at an exercise price of $0.61 per share to purchase shares of common stock previously granted on September 5, 2019 to an executive officer of the Company resulting in the recognition of an accelerated expense of $53.

 

During the year ended June 30, 2021, a total of 4,834 options to purchase shares of common stock were granted to executive officers and directors of the Company. Of these, 4,699 have an exercise price of $1.70 per share, 60 have an exercise price of $1.355 per share, and 75 have an exercise price of $1.37. Of the total granted, 4,279 options to purchase shares of common stock vest as to 1/6 on the six-month anniversary of the grant date with the remaining portion vesting in equal monthly installments over a period of 30 months commencing on the seven-month anniversary of the grant date, 480 vest in 12 equal monthly installments beginning on October 15, 2020, and 75 vest as to 1/6 on the twelve-month anniversary of the grant date with the remaining portion vesting in equal quarterly installments over a period of eight quarters commencing on the fifteen-month anniversary of the grant date.  All of the options to purchase shares of common stock granted have a 10-year term and are subject to cancellation upon the grantees’ termination of service for the Company, with certain exceptions.

Stock Options

The following table sets forth changes in stock options outstanding under all plans:

 

 

 

Number of

stock

options

outstanding

(in thousands)

 

 

Weighted

average

exercise

price

 

Balance – June 30, 2019

 

 

288

 

 

 

22.31

 

Granted

 

 

1,291

 

 

 

0.63

 

Forfeited

 

 

(19

)

 

 

0.61

 

Expired

 

 

(1

)

 

 

40.00

 

Balance – June 30, 2020

 

 

1,559

 

 

 

4.61

 

Granted

 

 

5,074

 

 

 

1.67

 

Exercised

 

 

(195

)

 

 

0.61

 

Expired

 

 

(32

)

 

 

34.88

 

Forfeited

 

 

(14

)

 

 

1.42

 

Balance – June 30, 2021

 

 

6,392

 

 

 

2.26

 

 

 

The following table summarizes stock options outstanding and exercisable under all plans at June 30, 2021:

 

Exercise price

$

 

 

Number

Outstanding

at

June 30,

2021

(in thousands)

 

 

Weighted

average

remaining

contractual

life

(years)

 

 

Number

exercisable

at

June 30,

2021

(in thousands)

 

 

0.61

 

 

 

816

 

 

 

8.18

 

 

 

729

 

 

0.74

 

 

 

250

 

 

 

8.37

 

 

 

62

 

 

1.36

 

 

 

300

 

 

 

9.23

 

 

 

75

 

 

1.37

 

 

 

75

 

 

 

9.83

 

 

 

 

 

1.70

 

 

 

4,699

 

 

 

9.21

 

 

 

1,415

 

 

6.10

 

 

 

25

 

 

 

7.36

 

 

 

24

 

 

7.00

 

 

 

3

 

 

 

6.98

 

 

 

3

 

 

8.70

 

 

 

12

 

 

 

6.34

 

 

 

12

 

 

9.83

 

 

 

83

 

 

 

6.89

 

 

 

83

 

 

10.60

 

 

 

4

 

 

 

6.79

 

 

 

4

 

 

11.70

 

 

 

30

 

 

 

1.66

 

 

 

30

 

 

16.14

 

 

 

3

 

 

 

0.92

 

 

 

3

 

 

20.00

 

 

 

9

 

 

 

0.59

 

 

 

9

 

 

21.10

 

 

 

11

 

 

 

6.02

 

 

 

11

 

 

29.60

 

 

 

5

 

 

 

3.60

 

 

 

5

 

 

37.60

 

 

 

5

 

 

 

4.61

 

 

 

5

 

 

41.00

 

 

 

4

 

 

 

5.36

 

 

 

4

 

 

42.00

 

 

 

30

 

 

 

2.13

 

 

 

30

 

 

44.80

 

 

 

3

 

 

 

4.61

 

 

 

3

 

 

49.50

 

 

 

13

 

 

 

5.63

 

 

 

13

 

 

53.20

 

 

 

8

 

 

 

4.85

 

 

 

8

 

 

61.60

 

 

 

1

 

 

 

1.75

 

 

 

1

 

 

92.00

 

 

 

3

 

 

 

1.92

 

 

 

3

 

 

 

 

 

 

6,392

 

 

 

 

 

 

 

2,532

 

 

Included in the number of stock options outstanding are 2.5 stock options granted at an exercise price of CA$20.00. The exercise price of these options shown in the above table have been converted to US$16.14 using the period ending closing exchange rate. Stock options issued during the years ended June 30, 2021 and 2020 have been valued using a Black-Scholes pricing model with the following assumptions:

 

 

 

June 30,

2021

 

 

June 30,

2020

 

Dividend rate

 

 

%

 

 

%

Volatility

 

103% to 152%

 

 

89% to 102%

 

Risk-free rate

 

0.19% to 1.28%

 

 

0.32% to 1.50%

 

Term – years

 

0.4 to 5.9

 

 

4.7 to 5.7

 

 

The estimated volatility of the Company’s common stock at the date of issuance of the stock options is based on the historical volatility of the Company. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the stock options at the valuation date. The expected life of the stock options has been estimated using the plain vanilla method.

The Company has recognized the following amounts as stock option expense for the periods noted:

 

 

 

Years ended June 30,

 

 

 

2021

$

 

 

2020

$

 

Research and development

 

 

1,478

 

 

 

87

 

General and administrative

 

 

3,798

 

 

 

408

 

 

 

 

5,276

 

 

 

495

 

 

All of the stock option expense for the periods ended June 30, 2021 and 2020 has been recognized as additional paid in capital.  The aggregate intrinsic value of stock options outstanding at June 30, 2021 was $4,759 (2020 - $80) and the aggregate intrinsic value of stock options exercisable at June 30, 2021 was $2,181 (2020 - $35). As of June 30, 2021, there was $3,014 in unrecognized compensation expense that will be recognized over the next 2.25 years.

The following table sets forth changes in unvested stock options under all plans:

 

 

 

Number of

options

(in thousands)

 

 

Weighted

average

exercise

price

$

 

Unvested at June 30, 2019

 

 

85

 

 

 

11.35

 

Granted

 

 

1,291

 

 

 

0.63

 

Vested

 

 

(500

)

 

 

1.87

 

Forfeited

 

 

(18

)

 

 

0.61

 

Unvested at June 30, 2020

 

 

858

 

 

 

0.98

 

Granted

 

 

5,074

 

 

 

1.67

 

Vested

 

 

(2,058

)

 

 

1.52

 

Forfeited

 

 

(14

)

 

 

1.42

 

Unvested at June 30, 2021

 

 

3,860

 

 

 

1.60

 

 

The aggregate intrinsic value of unvested stock options at June 30, 2021 was $2,577 (2020 - $45). The unvested stock options have a remaining weighted average contractual term of 9.16 (2020 – 9.19) years.

Common Stock Warrants

The following table sets forth changes in outstanding warrants:

 

 

 

Number of

warrants

(in thousands)

 

 

Weighted average exercise price

$

 

Balance – June 30, 2019

 

 

1,543

 

 

 

12.60

 

Underwritten public offering

 

 

10,418

 

 

 

0.75

 

Issuance of 2020 Underwriter Warrants

 

 

377

 

 

 

1.15

 

Exercise of PFW

 

 

(2,655

)

 

 

0.01

 

Exercise of 2020 Investor Warrants

 

 

(25

)

 

 

1.00

 

Warrants issued for services (i)

 

 

655

 

 

 

0.77

 

Expiry of warrants issued for services (i)

 

 

(4

)

 

 

59.30

 

Balance – June 30, 2020

 

 

10,309

 

 

 

2.71

 

Issuance of Adgero Warrants

 

 

2,314

 

 

 

3.18

 

Exercise of warrants (ii)

 

 

(4,907

)

 

 

1.00

 

Warrants issued for services (i)

 

 

600

 

 

 

1.74

 

Expiry of warrants

 

 

(1,342

)

 

 

6.00

 

Balance – June 30, 2021

 

 

6,974

 

 

 

3.34

 

 

 

 

i)

Warrants issued for services are exercisable at various prices and expire at the various dates noted in the table below.

 

ii)

A total of 4,404 2020 Investor Warrants were exercised at $1.00 per share and 503 warrants issued as either agent warrants or issued for services were exercised on a cashless basis for which 273 common shares were issued.

 

The following table summarizes the Company’s outstanding warrants as of June 30, 2021:

 

Description of warrants

 

Number

(in thousands)

 

 

Exercise

price $

 

 

Expiry date

2020 Investor warrants

 

 

3,333

 

 

 

1.00

 

 

August 16, 2024

2019 Investor warrants

 

 

760

 

 

 

3.10

 

 

June 5, 2024

2018 Investor warrants

 

 

280

 

 

 

12.50

 

 

September 22, 2022

2017 Investor warrants

 

 

208

 

 

 

35.00

 

 

April 19, 2022

NBTS Warrants (i)

 

 

125

 

 

 

1.09

 

 

June 19, 2025

Warrants issued for services

 

 

6

 

 

 

17.80

 

 

January 25, 2023

Warrants issued for services

 

 

34

 

 

 

11.70

 

 

February 27, 2023

Warrants issued for services

 

 

12

 

 

 

9.00

 

 

September 15, 2023

Warrants issued for services

 

 

2

 

 

 

9.00

 

 

October 11, 2023

Warrants issued for services

 

 

280

 

 

 

0.75

 

 

November 18, 2023

Warrants issued for services

 

 

125

 

 

 

0.64

 

 

January 20, 2024

Warrants issued for services

 

 

330

 

 

 

1.49

 

 

September 22, 2023

Warrants issued for services

 

 

50

 

 

 

1.82

 

 

November 13, 2023

Warrants issued for services

 

 

100

 

 

 

1.47

 

 

January 7, 2024

Warrants issued for services

 

 

70

 

 

 

2.75

 

 

February 17, 2024

Warrants issued for services

 

 

50

 

 

 

2.38

 

 

February 25, 2024

2019 Agent warrants

 

 

47

 

 

 

3.88

 

 

June 3, 2024

2018 Agent warrants

 

 

40

 

 

 

12.50

 

 

September 20, 2022

2017 Agent warrants

 

 

14

 

 

 

40.60

 

 

April 12, 2022

Adgero Warrants (ii)

 

 

353

 

 

 

3.18

 

 

August 31, 2021

Adgero Warrants

 

 

755

 

 

 

3.18

 

 

January 17, 2022

 

 

 

6,974

 

 

 

 

 

 

 

(i)

NBTS Warrants were issued with respect to loan proceeds received during the year ended June 30, 2021 (note 7).

(ii)

Expired unexercised subsequent to June 30, 2021.

Series C Preferred Stock Warrants

In connection with the Series C Preferred Stock private placement, the Company initially issued 2,504 Series C Agent Warrants.  The Series C Agent Warrants have an exercise price of $1,000 per share, provide for a cashless exercise feature, and are exercisable for a period of four years from August 19, 2020. The Series C Preferred Stock issuable upon exercise of the Series C Agent Warrants is convertible into shares of common stock in the same manner as each respective underlying series of outstanding Series C Preferred Stock and will be entitled to the same dividend rights as each respective series.

The Series C Agent Warrants were valued at a total of $3,287 using a binomial pricing model with a risk-free interest rate of 0.27%, a term of 4.0 years, and a volatility of 95.2% to 95.8%.  The estimated volatility of the Company’s common stock at the date of measurement is based on the historical volatility of the Company’s common stock. The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the instrument at the valuation date. The expected term has been estimated using the contractual term of the warrant.

The following table sets forth changes in outstanding Series C Agent Warrants:

 

 

Balance

June 30, 2020

 

 

Number of

Warrants Issued

 

 

Number of

Warrants Exercised

 

 

Balance,

June 30, 2021

 

 

Exercise

price

$

 

Issuance of Preferred Series C-1 Agent Warrants

 

 

 

 

 

1,959

 

 

 

(30

)

 

 

1,929

 

 

 

1.16

 

Issuance of Preferred Series C-2 Agent Warrants

 

 

 

 

 

219

 

 

 

 

 

 

219

 

 

 

1.21

 

Issuance of Preferred Series C-3 Agent Warrants

 

 

 

 

 

326

 

 

 

(30

)

 

 

296

 

 

 

1.15

 

 

 

 

 

 

 

2,504

 

 

 

(60

)

 

 

2,444

 

 

 

 

 

 

The following table summarizes the Company’s outstanding Series C Agent Warrants as of June 30, 2021:

Series C Agent Warrants

 

Number

 

 

Conversion

price

$

 

 

Number of

conversion

shares

(in

thousands)

 

 

Cumulative

common

stock

dividends

(in

thousands)

 

Series 1

 

 

1,929

 

 

 

1.16

 

 

 

1,663

 

 

 

1,164

 

Series 2

 

 

219

 

 

 

1.21

 

 

 

180

 

 

 

126

 

Series 3

 

 

296

 

 

 

1.15

 

 

 

257

 

 

 

180

 

 

 

 

2,444

 

 

 

 

 

 

 

2,100

 

 

 

1,470