STOCK-BASED COMPENSATION
 12 Months Ended
Mar. 31, 2020
STOCKHOLDERS' EQUITY  
STOCK-BASED COMPENSATION

Equity Compensation Plan

In October 2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the 2017 Plan) with 3,000,000 shares of common stock reserved for issuance. In January 2020, the Board approved an amendment to the 2017 Plan to increase the number of shares reserved for issuance by 1,000,000 shares. Under the 2017 Plan, eligible employees, directors and consultants may be granted a broad range of awards, including stock options, stock appreciation rights, restricted stock, performance-based awards and restricted stock units. The 2017 Plan is administered by the Board or, in the alternative, a committee designated by the Board. 

 

The exercise or purchase price of a stock option shall be calculated as follows: 

(i) In the case of an incentive stock option, (a) granted to employees, who, at the time of the grant of such incentive stock option own stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company, the per share exercise price shall be not less than one hundred ten percent (110%) of the fair market value per share on the date of grant; or (b) granted to employees, other than to employees, described in the preceding clause, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant;
(ii) In the case of a non-qualified stock option, the per share exercise price shall be not less than one hundred percent (100%) of the fair market value per share on the date of grant unless otherwise determined by the Board; and
(iii)   In the case of other grants, such price as determined by the Board.

 

The Board is responsible for determining the consideration to be paid for the shares of common stock to be issued upon exercise or purchase. The 2017 Plan generally does not allow for the transfer of awards, and the Board may amend, suspend or terminate the 2017 Plan at any time. 

Stock-Based Compensation Expense  

The expense relating to stock options is recognized on a straight-line basis over the requisite service period, usually the vesting period, based on the grant date fair value. The unamortized compensation cost, as of March 31, 2020 was $2,495,385 related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 2.7 years. 

 

During the year ended March 31, 2020, options granted to purchase shares of its common stock to employees, directors and consultants had 10-year terms and a grant-date fair value of $2,839,373. Options to purchase 152,204 shares vested immediately on the grant dates. 

The following assumptions were used in the fair-value method calculations: 

 

  Year ended March 31,
  2020 2019
Risk-free interest rates 0.77% - 2.37 % 2.73 - 3.01%
Volatility 86% - 103 % 71% - 112%
Expected life (years) 5.0 - 6.0   5.0 - 6.0
Dividend yield —%   —%

 

The fair values of options at the grant date were estimated utilizing the Black-Scholes valuation model, which includes simplified methods to establish the fair term of options as well as average volatility of three comparable organizations. The risk-free interest rate was derived from the Daily Treasury Yield Curve Rates, as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of the options. A dividend yield of zero was applied because the Company has never paid dividends and has no intention to pay dividends in the foreseeable future. In accordance with ASU No. 2016-09, the Company accounts for forfeitures as they occur.

 

A summary of stock option activity under the 2017 Plan is presented below:

 

  Shares Options Outstanding
  Available Number of Weighted Average
  for Grant Shares Exercise Price
Balance at April 1, 2018   3,000,000                            —                                  —  
Options granted   (1,529,908)             1,529,908 0.86
Balance at March 31, 2019   1,470,092             1,529,908 0.86
Additional shares authorized under the Plan   1,000,000                           —                                  —   
Options granted   (1,717,204)             1,717,204 2.25
Options cancelled and returned to the Plan   69,167                (69,167) 2.25
Balance at March 31, 2020   822,055             3,177,945 1.58

 

There were no stock options exercised during the years ended March 31, 2020 and 2019. 

 

The following table summarizes the range of outstanding and exercisable options as of March 31, 2020:  

    Options Outstanding     Options Exercisable  
Range of Exercise Price   Number
Outstanding		     Weighted
Average
Remaining
Contractual
Life
(in Years)		     Weighted
Average
Exercise
Price		     Number
Exercisable		     Weighted
Average
Exercise
Price		     Aggregate
Intrinsic
value		  
$0.66 - $2.48                 3,177,945       9.08     $ 1.58       1,586,736     $ 0. 92     $ —  
                                                 

 

The intrinsic value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise price of the option.

 

The Company is required to present the tax benefits resulting from tax deductions in excess of the compensation cost recognized from the exercise of stock options as financing cash flows in the consolidated statements of cash flows. For the years ended March 31, 2020 and 2019, there were no such tax benefits associated with the exercise of stock options.