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STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION

6 Months Ended

Sep. 30, 2021

Equity [Abstract]

STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION

NOTE 5 – STOCKHOLDERS’ EQUITY (DEFICIT) & STOCK-BASED COMPENSATION

During the six months ended September 30, 2021, the Company issued 60,000 shares of common stock to a service provider and issued 16,414 shares to its non-employee directors under the Company’s outside director compensation plan.

Amended 2017 Equity Incentive Plan

In October 2017, the Company’s board of directors (the Board) approved the 2017 Equity Incentive Plan (the Plan) with 3,000,000 shares of common stock reserved for issuance. In January 2020 and August 2021, the Board approved increases in the number of shares reserved for issuance under the Plan by 1,000,000 and 4,000,000 shares, respectively. Under the 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 Plan is administered by the Board or, in the alternative, a committee designated by the Board.

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 September 30, 2021, was $5,988,541 related to stock options and is expected to be recognized as expense over a weighted-average period of approximately three years.

During the six months ended September 30, 2021, the Company granted options to purchase 1,371,471 shares of its common stock to employees, directors and consultants. The options had 10-year terms, and 129,117 options vested immediately when granted. The fair value of the options was determined to be $5,464,619 of which $845,979 was recorded as stock-based compensation expense and included in the condensed consolidated statement of operations for the six months ended September 30, 2021.

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

Schedule of Fair Value Assumptions

		Three Months Ended September 30,								Six Months Ended September 30,
		2021				2020				2021				2020
Risk-free interest rates			0.8% - 0.98%				0.28% - 0.37%				0.8% - 0.98%				0.28% - 0.37%
Volatility			367% - 370%				88% - 127%				89% - 370%				88% - 128%
Expected life (years)			5.0 - 6.2				5.0 - 6.0				5.0 - 6.2				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 Plan is presented below:

Schedule of Stock Option activity

						Options Outstanding
										Weighted
		Shares								Average
		Available				Number of				Exercise
		for Grant				Shares				Prices
Balance at March 31, 2021			408,245				3,591,755			$	1.75
Options granted			(182,321	)			182,321				4.23
Share awards			(5,508	)			—				—
Options cancelled and returned to the Plan			22,639				(22,639	)			2.87
Balance at June 30, 2021			243,055				3,751,437				1.86
Additional shares authorized under the Plan			4,000,000				—				—
Options granted			(1,189,150	)			1,189,150				4.05
Share awards			(10,906	)			—				—
Options cancelled and returned to the Plan			147,639				(147,639	)			2.34
Balance at September 30, 2021			3,190,638				4,792,948				2.39

There were no stock options exercised during the six months ended September 30, 2021 and 2020.

The following table summarizes the range of outstanding and exercisable options as of September 30, 2021:

		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 - $5.90			4,792,948				8.09			$	2.39				2,609,002			$	1.54			$	4,022,239

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 at September 30, 2021.

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 six months ended September 30, 2021 and 2020, there were no such tax benefits associated with the exercise of stock options.