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STOCK-BASED COMPENSATION | 12 Months Ended
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Mar. 31, 2021
STOCK-BASED COMPENSATION |
STOCK-BASED COMPENSATION | NOTE 7 - STOCK-BASED COMPENSATION Our board of directors, upon the recommendation of the compensation committee of our board of directors, approved the 2016 TechPrecision Equity Incentive Plan, or the 2016 Plan, on November 10, 2016. Our stockholders approved the 2016 Plan at the Company’s Annual Meeting of Stockholders on December 8, 2016. The 2016 Plan succeeds the 2006 Plan and applies to awards granted after the 2016 Plan’s adoption by the Company’s stockholders. We have designed the 2016 Plan to reflect our commitment to having best practices in both compensation and corporate governance. The 2016 Plan provides for a share reserve of 5,000,000 shares of common stock. The 2016 Plan authorizes the award of incentive and non-qualified stock options, restricted stock awards, restricted stock units, and performance awards to employees, directors, consultants, and other individuals who provide services to TechPrecision or its affiliates. The purpose of the 2016 Plan is to: (a) enable TechPrecision and its affiliated companies to recruit and retain highly qualified employees, directors and consultants; (b) provide those employees, directors and consultants with an incentive for productivity; and (c) provide those employees, directors and consultants with an opportunity to share in the growth and value of the Company. Subject to adjustment as provided in the 2016 Plan, the maximum number of shares of common stock that may be issued with respect to awards under the 2016 Plan is 5,000,000 shares (inclusive of awards issued under the 2006 Long-Term Incentive Plan, or the 2006 Plan, that remained outstanding as of the effective date of the 2016 Plan). Shares of our common stock subject to awards that expire unexercised or are otherwise forfeited shall again be available for awards under the 2016 Plan. The fair value of the options we grant is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stock. The average dividend yield over the historical period for which volatility was computed is zero. The risk-free interest rate was selected based upon yields of five-year U.S. Treasury issues. We used the simplified method for all grants to estimate the expected life of the option. We assume that stock options will be exercised evenly over the period from vesting until the awards expire. We account for award forfeitures as they occur. As such, the assumed period for each vesting tranche is computed separately and then averaged together to determine the expected term for the award. At March 31, 2021, there were 1,421,000 shares available for grant under the 2016 Plan. The following table summarizes information about options granted during the two most recently completed fiscal years:
|  |  |  |  |  |  |  |  |  | Weighted
|  |  |  |  |  |  |  |  |  | Average
|  |  |  | Weighted |  | Aggregate |  | Remaining
|  | Number Of |  | Average |  | Intrinsic |  | Contractual Life
|  | Options |  | Exercise Price |  | Value |  | (in years)
Outstanding at 3/31/2019 |  | 2,938,000 |  | $ | 0.416 |  | $ | 1,869,200 |  | 6.74
Exercised |  | (20,000) |  |  | 0.360 |  |  |  |  |
Canceled |  | (2,000) |  |  |  |  |  |  |  |
Outstanding at 3/31/2020 |  | 2,916,000 |  | $ | 0.415 |  | $ | 2,546,800 |  | 6.21
Exercised |  | (150,000) |  |  | 0.800 |  |  |  |  |
Canceled |  | (47,000) |  |  |  |  |  |  |  |
Vested or expected to vest at 3/31/2021 |  | 2,719,000 |  | $ | 0.372 |  | $ | 2,476,300 |  | 5.62
Exercisable and vested at 3/31/2021 |  | 2,719,000 |  | $ | 0.372 |  | $ | 2,476,300 |  | 5.62
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on the last trading day of the fourth quarter of fiscal 2021 and fiscal 2020 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2021 and 2020. This amount changes based on the fair market value of the Company’s common stock. At March 31, 2021, there was no remaining unrecognized compensation cost related to stock options. The maximum contractual term is ten years for option grants. Other information relating to stock options outstanding at March 31, 2021 is as follows:
|  |  |  | Weighted |  |  |  |  |  |  |  |
|  |  |  | Average |  |  |  |  |  |  |  |
|  |  |  | Remaining |  | Weighted |  |  |  | Weighted
|  | Options |  | Contractual |  | Average |  | Options |  | Average
Range of Exercise Prices: |  | Outstanding |  | Term |  | Exercise Price |  | Exercisable |  | Exercise Price
$0.01-$0.49 |  | 1,270,000 |  | 4.60 |  | $ | 0.12 |  | 1,270,000 |  | $ | 0.12
$0.50-$1.00 |  | 1,400,000 |  | 6.14 |  | $ | 0.55 |  | 1,400,000 |  | $ | 0.55
$1.01-$1.96 |  | 49,000 |  | 0.05 |  | $ | 1.96 |  | 49,000 |  | $ | 1.96
Totals |  | 2,719,000 |  |  |  |  |  |  | 2,719,000 |  |  |
Restricted Stock Awards On September 1, 2020 we granted a total of 100,000 shares of restricted stock under the 2016 Plan to the board of directors. The stock-based compensation expense of $134,000 for service-based restricted stock was measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company's common stock. The shares of restricted stock fully vest and cease to be subject to forfeiture on August 31, 2021, or twelve months following the grant date. Each grantee must be serving as a director on the vesting date and must have been continuously serving in such capacity from the grant date through the vesting date for the shares of restricted stock to vest. Prior to the vesting date, the grantee is not permitted to sell, transfer, pledge, assign or otherwise encumber the shares of restricted stock and if the grantee's service with the Company terminates prior to the vesting date, the grantee's restricted stock will be forfeited automatically. Total recognized compensation cost related to the restricted stock award was $78,167 for the twelve months ended March 31, 2021. At March 31, 2021 there was $55,833 of unrecognized compensation cost related to these restricted stock awards. On March 16, 2020 we granted a total of 100,000 shares of restricted stock under the 2016 Plan to the board of directors. The stock-based compensation expense of $111,000 for service-based restricted stock was measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. The shares of restricted stock fully vested and ceased to be subject to forfeiture on September 1, 2020, or approximately six months following the grant date. Each grantee was serving as a director on the vesting date and had been continuously serving in such capacity from the grant date through the vesting date. Prior to that vesting date, the grantees were not permitted to sell, transfer, pledge, assign or otherwise encumber the shares of restricted stock. The aggregate fair value of the restricted stock expensed during the fiscal year ended March 31, 2021 was $101,750. At March 31, 2021 there was no unrecognized compensation cost related to the restricted stock awards.

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