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STOCKHOLDERS' EQUITY
3 Months Ended
Sep. 30, 2021
Equity [Abstract]  
STOCKHOLDERS' EQUITY

7.       STOCKHOLDERS' EQUITY:

 

Series B Preferred stock:

 

Since July 1, 2014, the Company has 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter. The Series B Preferred stock is mandatorily redeemable at $100 per share by the Company three years after issuance and accordingly was classified as a liability. The 200 shares have reached their maturity date, but due to the cash constraints of the Company have not been redeemed but the Company may do so in the future.

 

During the years ended June 30, 2021 and 2020, the Company declared dividends of $2,000 and $2,000 respectively. At September 30, 2021, accrued dividends payable are $20,500. The dividends are classified as a component of operations as the Series B Preferred stock is presented as a liability in these financial statements.

 

Common stock:

 

Holders of common stock are entitled to one vote per share on all matters to be voted on by common stockholders. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share in all assets remaining after liabilities have been paid in full or set aside and the rights of any outstanding preferred stock have been satisfied. Common stock has no preemptive, redemption or conversion rights. The rights of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any outstanding series of preferred stock or any series of preferred stock the Company may designate in the future.

 

Centerpoint holds 704,309 shares of the Company’s common stock. These shares of the Company’s common stock held by Centerpoint are for the benefit of its shareholders without any beneficial interest.

 

During the three months ended September 30, 2021, Smith elected to convert accounts payable of $5,126 into 10,253 units at $0.50 per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share until December 31, 2024.

During the three months ended September 30, 2021, 139,334 warrants were exercised to purchase 139,334 shares of the Company’s common stock at $0.75 per share for total proceeds of $104,500.

During the three months ended September 30, 2021, the Company issued 10,000 shares of the Company’s common stock to a broker as commissions for the warrant exercises. As the issuance was both a reduction and addition to additional paid in capital there was no impact to the financial statements. The company also paid a broker $1,000 in commissions for the warrant exercises.

 Warrants:

 

As of September 30, 2021, the Company had approximately 21.8 million warrants outstanding, with exercise prices from $0.60 to $1.50 and expiring on various dates through June 30, 2025.

 

The weighted-average exercise price for the outstanding warrants is $0.73, and the weighted-average remaining contractual life as of September 30, 2021 is 2.6 years.

 

During the three months ended September 30, 2021, Smith elected to convert accounts payable of $5,126 into 10,253 units at $0.50 per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share until December 31, 2024.

During the three months ended September 30, 2021, 139,334 warrants were exercised to purchase 139,334 shares of the Company’s common stock at $0.75 per share for total proceeds of $104,500.

During the three months ended September 30, 2021, the Company issued 10,000 shares of the Company’s common stock to a broker as commissions for the warrant exercises. As the issuance was both a reduction and addition to additional paid in capital there was no impact to the financial statements. The company also paid a broker $1,000 in commissions for the warrant exercises.

 

Stock options:

 

The Company’s 2006 Consolidated Incentive Plan, as amended during the year ended June 30, 2021 (the “2006 Plan”), provides for the issuance of options (and/or other securities) to purchase up to 36,000,000 shares of the Company’s common stock. Terms of exercise and expiration of options/securities granted under the 2006 Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years.

 

The Company recorded compensation expense related to employee stock options of nil for both the three months ended September 30, 2021 and 2020, respectively. The Company granted nil options during the three months ended September 30, 2021 and 2020, respectively.

 

A summary of under the 2006 Plan for the three months ended September 30, 2021 is as follows:

                      
   Options  Weighted-
Average
Exercise
Price
  Weighted-
Average
Remaining
Contractual
Life
  Aggregate
Intrinsic
Value
 Outstanding at July 1, 2021    10,471,600   $0.77    3.7   $6,064,335 
   Granted                       
   Exercised                       
   Forfeited                       
   Expired                       
 Outstanding at September 30, 2021    10,471,600   $0.77    3.4   $9,624,679 
 Exercisable at September 30, 2021    10,471,600   $0.77    3.4   $9,624,679 

 

The following table presents information relating to nonvested stock options as of September 30, 2021:

            
      Options    Weighted Average Grant-Date Fair Value 
 Nonvested at July 1, 2021         $   
 Granted             
 Vested             
 Nonvested at September 30, 2021         $   

 

The total fair value of stock options that vested during both the three months ended September 30, 2021 and 2020 was nil. As of September 30, 2021, the Company had no unrecognized compensation cost related to stock options.