STOCKHOLDERS' EQUITY

12 Months Ended

Jun. 30, 2022

Equity [Abstract]

STOCKHOLDERS' EQUITY

7.       STOCKHOLDERS' EQUITY:

Series B Preferred stock:

Since July 1, 2014, the Company had 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 had reached their redemption date and the Company approved the redemption of the Series B preferred stock during the year ended June 30, 2022. 200 shares of Series B redeemable convertible Preferred stock were redeemed for $41,000, which included the $21,000 in accrued dividend payable.

In April 2023, the Company amended the number of preferred stock shares from 50,000 to 10,000,000, having a $0.01 par value per share.

During the years ended June 30, 2022, and 2021, the Company declared dividends of $1,000 and $2,000 respectively. 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.

During April 2022, the Company amended the number of common stock shares from 100,000,000 to 250,000,000.

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 year ended June 30, 2022, Smith elected to convert accounts payable (based on his unreimbursed expenses) of $17,711 into 35,424 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 year ended June 30, 2022, 2,315,550 warrants were exercised to purchase 2,315,550 shares of the Company’s common stock at $0.75 per share for total proceeds of $1,736,662.

During the year ended June 30, 2022, the Company issued 66,860 shares of the Company’s common stock to three brokers 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 $18,601 in commissions for the warrant exercises.

During the year ended June 30, 2022, the Company issued 25,000 shares of the Company’s common stock to a marketing firm for services provided.

During the year ended June 30, 2021, the Company entered into subscription agreements, under three different offerings, to sell units for $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 with an expiry date of December 31, 2021, and pursuant thereto, the Company issued 3,720,000 units for total proceeds of $1,860,000, net proceeds of $1,699,000 after commissions of $161,000. The Company allocated the proceeds from the 3,720,000 shares and the 3,720,000 warrants based upon their relative fair values, using the share price on the day each of the subscription agreements were entered into and the fair value of the warrants, which was determined to be$0.05 per warrant. As a result, $114,148 was allocated to the warrants and $1,745,852 was allocated to the shares, and both were recorded as additional paid in capital.

During the year ended June 30, 2021, 300,000 share of the Company’s restricted company stock were sold to an investor for $300,000.

During the year ended June 30, 2021, Smith elected to convert deferred compensation and accounts payable of $128,039 and $52,361, respectively, into an aggregate 360,805 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 year ended June 30, 2021, two consultants elected to convert deferred compensation of $593,411, into an aggregate 1,186,824 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, 2023.

During the year ended June 30, 2021, the Company issued 144,000 units to Smith for salary of $72,000, 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 with an expiry date of December 31, 2024.

During the year ended June 30, 2021, 4,065,988 warrants were exercised to purchase 4,065,988 shares of the Company’s common stock at $0.75 per share for total proceeds of $3,049,490.

During the year ended June 30, 2021, the Company issued 129,364 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 $3,537 in commissions for the warrant exercises.

Warrants:

As of June 30, 2022, the Company had approximately 20.8 million warrants outstanding, with exercise prices from $0.60 to $1.50 and expiring on various dates through April 31, 2026.

The weighted-average exercise price for the outstanding warrants is $0.75, and the weighted-average remaining contractual life as of June 30, 2022 is 2.6 years.

During the year ended June 30, 2022, Smith elected to convert accounts payable (for unreimbursed expenses) of $17,711 into 35,424 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 year ended June 30, 2022, the Company approved the issuance of 75,000 warrants for two consultants for consulting services of $7,500. The warrants are exercisable at $1.50 and expire in November 2026.

During the year ended June 30, 2022, the Company approved the modification of existing warrants held by one former consultant and four investors, which extended certain expiration dates. The modifications resulted in incremental non-cash compensation of $5,624 and interest expenses of $2,713.

During the year ended June 30, 2022, 2,315,550 warrants were exercised to purchase 2,315,550 shares of the Company’s common stock at $0.75 per share for total proceeds of $1,736,662.

During the year ended June 30, 2022, the Company issued 66,860 shares of the Company’s common stock to three brokers 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 $18,601 in commissions for the warrant exercises.

Effective May 1, 2022, an entity affiliated with William O’Neill (“O’Neill”) was issued 1,000,000 Incentive Warrants exercisable at $1.00 per share until April 30, 2026 of which up to 700,000 Incentive Warrants may be cancelled if O’Neill is not renewed at 13 months and/or fails to serve the entire contract term thereafter. These warrants each have a 75% exercise bonus if the terms set forth therein are met.

Stock options:

On April 7, 2022 the Company’s shareholders approved the Bion Environmental Technologies, Inc. 2021 Equity Incentive Award Plan (the “Equity Plan”). The Equity Plan provides for the issuance of options (and/or other securities) to purchase up to 30,000,000 shares of the Company’s common stock. The Equity Plan was adopted and ratified by Board of Directors on April 8, 2022. Terms of exercise and expiration of options/securities granted under the Equity Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years. No grants have been made pursuant to the Equity Plan as of the date of this report.

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 2006 Plan will be maintained to service grants already made thereunder (together with new grants, if any, to employees and consultants who already has received grants pursuant to its terms,

On February 11, 2022, the Company granted 10,000 options under the 2006 Plan to one consultant.

On April 29, 2022, the Company granted an aggregate of 720,000 options under the 2006 Plan to seven employees/consultants/directors including: i) 50,000 options each to Schafer and Northrop for service as directors, ii) 200,000 options to Bassani (now COO of the Company and formerly CEO) and iii) 200,000 options to Smith, the Company’s President, which new option grants are included in the presentation below.

The Company recorded compensation expense related to employee stock options of $419,370 and $1,107,700 for the years ended June 30, 2022 and 2021, respectively. The Company granted 730,000 and 960,000 fully vested options during the years ended June 30, 2022 and 2021, respectively.

The fair value of the options granted during the years ended June 30, 2022 and 2021 were estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:

	Weighted Average, June 30, 2022			Range, June 30, 2022			Weighted Average, June 30, 2021			Range, June 30, 2021
Volatility		65	%		65% -69	%		65	%		58%-65	%
Dividend yield		—			—			—			—
Risk-free interest rate		2.99	%		1.71% – 3.01	%		0.79	%		0.47%-0.82	%
Expected term (years)		3.71			3.04 to 3.72			5.8			5.0 to 5.9

The expected volatility was based on the historical price volatility of the Company’s common stock. The dividend yield represents the Company’s anticipated cash dividend on common stock over the expected term of the stock options. The U.S. Treasury bill rate for the expected term of the stock options was utilized to determine the risk-free interest rate. The expected term of stock options represents the period of time the stock options granted are expected to be outstanding based upon management’s estimates.

A summary of option activity under the 2006 Plan for the years ended June 30, 2022 and 2021 is as follows:

	Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at July 1, 2020		9,511,600	$	.74		4.5	$	—
Granted		960,000		1.10
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at June 30, 2021		10,471,600	$	0.77		3.7	$	6,064,335
Granted		730,000		1.00		3.7		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at June 30, 2022		11,201,600	$	0.80		2.7	$	4,429,263

The following table presents information relating to nonvested stock options as of June 30, 2022:

	Options			Weighted Average Grant-Date Fair Value
Nonvested at July 1, 2021		—		$	—
Granted		730,000			.574
Vested		(730,000	)		(.574	)
Nonvested at June 30, 2022		—		$	—

The total fair value of stock options that vested during the years ended June 30, 2022 and 2021 was $419,370 and $1,017,700, respectively. As of June 30, 2022, the Company had no unrecognized compensation cost related to stock options.

Stock-based employee compensation charges in operating expenses in the Company’s consolidated financial statements for the years ended June 30, 2022 and 2021 are as follows:

	Year ended June 30, 2022		Year ended June 30, 2021
General and administrative:
Change in fair value from modification of     option terms	$	—	$	8,775
Change in fair value from modification of     warrant terms		8,337		25,506
Fair value of stock options expensed		261,258		816,050
Total	$	269,595	$	850,331
Research and development:
Fair value of stock options expensed	$	22,464	$	201,650
Total	$	22,464	$	201,650

The Company capitalized $135,648 and nil in non-cash compensation related to the 3G project in June 30, 2022 and 2021, respectively.