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Derivative Liability
 12 Months Ended
Mar. 31, 2017
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Liability

4. Derivative Liability

During 2011 and 2012, the Company issued 22,847,182 five-year warrants to purchase the Company’s common stock in connection with financing transactions. The exercise price of the warrants is protected against down-round financing throughout the term of the warrants. Pursuant to ASC 815-15 and ASC 815-40, the fair value of the warrants was recorded as a derivative liability on the issuance dates.

The Company revalued the warrants as of the end of each reporting period, and the estimated fair value of the outstanding warrant liabilities was $0 and $4,000 as of March 31, 2017 and 2016, respectively. The change in fair value of the derivative liabilities for the year ended March 31, 2017 was a decrease of $4,000. The changes in fair value of the derivative liabilities for the years ended March 31, 2016 and 2015 were an increase of $17,000 and a decrease of $196,000, respectively. These changes are included in other income (expense) in the statements of operations.

During the years ended March 31, 2017 and 2016, 0 and 43,796 warrants that were classified as derivative liabilities were exercised. The warrants were revalued as of the settlement date and the change in fair value was recognized to earnings. During the year ended March 31, 2017, 3,350 warrants expired. As of March 31, 2017, all warrants subject to derivative treatment have been exercised or have expired.   

The derivative liabilities were valued upon issuance of the warrants and at the end of each reporting period using a Monte Carlo valuation model with the following assumptions:

 

 

 

March 31,

2016

 

Closing price per share of common stock

 

$

2.17

 

Exercise price per share

 

$

1.00

 

Expected volatility

 

 

73.35

%

Risk-free interest rate

 

 

0.59

%

Dividend yield

 

 

—

 

Remaining expected term of underlying securities (years)

 

 

0.96