XML 31 R14.htm IDEA: XBRL DOCUMENT v3.25.2
EQUITY TRANSACTIONS
 12 Months Ended
Mar. 31, 2025
Equity [Abstract]  
EQUITY TRANSACTIONS

4. EQUITY TRANSACTIONS

 

REVERSE STOCK SPLIT

 

Effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025, we effected a 1-for-8 reverse stock split of our then outstanding shares of common stock. Accordingly, each 8 shares of outstanding common stock then held by our stockholders were combined into one share of common stock. Any fractional shares resulting from the reverse split were rounded up to the next whole share. Authorized common stock remained at 60,000,000 shares following the stock split. The accompanying consolidated financial statements and accompanying notes have been retroactively revised to reflect such reverse stock split as if it had occurred on April 1, 2023. All shares and per share amounts have been revised accordingly.

 

WARRANT INDUCEMENT

 

In March 2025, the Company entered into a warrant inducement agreement resulting in the issuance of 1,550,000 new warrants and the modification of 775,000 existing warrants. The fair value of the new warrants and the incremental fair value from the modification totaled $4,612,862 which was recorded as a non-cash inducement expense in other expense and reflected as an increase to additional paid-in capital.

 

ISSUANCES OF COMMON STOCK AND WARRANTS

 

Equity Transactions in the Fiscal Year Ended March 31, 2025.

 

March 2025 Warrant-Based Financing

 

On March 16, 2025, the Company entered into an inducement offer to exercise existing Class A and Class B Warrants (the “Agreement”) with a certain accredited and institutional holder (the “Holder”) of the Company’s outstanding Class A and Class B Warrants issued on May 17, 2024 (the “Existing Warrants”). Pursuant to the Agreement, the Holder, upon exercise, will receive a new unregistered Common Stock Purchase Warrant (“New Warrant”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”), to purchase up to a number of shares equal to 200% of the number of Warrant Shares issued pursuant to the exercise of Existing Warrants pursuant to this Agreement (the “New Warrant Shares”), which New Warrant shall have an exercise price per share equal to $0.3736, subject to adjustment as provided in the New Warrant, will be exercisable at any time on or after six (6) months from the date of issuance and have a term of exercise of five and one-half (5.5) years from the date of issuance and (ii) a reduction of the exercise price of the Existing Warrants to $0.3736 per share, representing the closing price on March 14, 2025, but only with respect to a cash exercise under the Existing Warrants (as reduced from the current respective exercise price per share as set forth in the Existing Warrants).

 

The closing took place on March 17, 2025. Gross proceeds to the Company from the exercise of the Existing Warrants was $2,316,320, prior to deducting closing costs and placement agent fees as further described below. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

 

As a result of the Holder exercising the Existing Warrants, the Company issued an aggregate of 6,200,000 shares of its common stock. The shares underlying the Existing Warrants have all been registered on Form S-1 registration statement (Registration Number 333-278188).

 

The Company agreed to file a resale registration statement registering the shares underlying the Replacement Warrants (“Resale Registration Statement”) within ninety (90) days of the date of the Agreement and to use commercially reasonable best efforts to cause the Resale Registration Statement to be effective on or prior to the 150th calendar day after the date of the Agreement.

 

Subject to the terms of the Agreement, the Company will be required to pay certain liquidated damages if the shares underlying the New Warrants are not filed within the ninety (90) period, as more fully described in the Agreement.

 

The Company further agreed that until sixty (60) days after the closing date of the warrant exercise, it will not (other than in connection with limited enumerated exceptions) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or file any registration statement or any amendment or supplement (other than the registration statement registering the shares underlying the Replacement Warrants).

 

In connection with the transactions contemplated in the Agreement, the Company agreed to pay its placement agent, Maxim Group, LLC (the “Agent”) the following compensation, (i) a cash fee equal to 6.0% of the gross proceeds received by the Company in the transactions contemplated by the Agreement, and (ii) legal fees and out-of-pocket expenses of $15,000.

 

May 2024 Public Offering

 

On May 17, 2024, the Company closed a public offering pursuant to which it sold an aggregate of: (i) 306,250 shares of common stock and accompanying Class A warrants to purchase up to 306,250 shares of common stock and Class B warrants to purchase up to 306,250 shares of common stock, at a combined public offering price of $4.64 per share and accompanying warrants; and (ii) in lieu of common stock, pre-funded warrants to purchase 706,250 shares of common stock and accompanying Class A warrants to purchase up to 706,250 shares of common stock and Class B warrants to purchase up to 706,250 shares of common stock, at a combined public offering price of $0.4.63 per pre-funded warrant and accompanying warrants, which is equal to the public offering price per share of common stock, and accompanying warrants less the $0.001 per share exercise price of each such pre-funded warrant.

 

All pre-funded warrants issued in the offering were exercised in the quarter ended June 30, 2024. The Class A and Class B warrants each have an exercise price of $4.64 per share, are immediately exercisable, and, in the case of Class A warrants, will expire on May 17, 2029, and in the case of Class B warrants, will expire on May 19, 2025. The exercise price of the Class A and Class B warrants is also subject to adjustment for stock splits, reverse splits, and similar capital transactions as described in such warrants.

 

Maxim Group LLC (“Maxim”), served as the exclusive placement agent in connection with the offering. We paid Maxim a cash fee of 6.5% of the aggregate gross proceeds raised at the closing of the offering, and reimbursement of certain expenses and legal fees in the amount of $100,000. We also issued to designees of Maxim warrants to purchase up to an aggregate of 40,500 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $4.64 per share and have substantially the same terms as the Class A warrants, except the Placement Agent Warrants are not subject to an exercise price reset, are non-exercisable until November 15, 2024, and will expire on May 15, 2029.

 

The gross proceeds from the offering, before deducting the placement agent’s fees and other offering expenses, were approximately $4.7 million. Net proceeds, of the offering, after deducting the placement agent fees and expenses and other offering expenses payable by us, were are approximately $3.5 million. In June 2024, and holders of Class A and Class B warrants exercised 37,500 shares and 360,000 shares, respectively, for additional proceeds of $1,844,400.

 

The shares of Common Stock, the Class A and Class B warrants, the pre-funded warrants and the Placement Agent Warrants described above and the underlying shares of Common Stock were offered pursuant to a Registration Statement on Form S-1, as amended (File No. 333-278188) (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission (the “SEC”) on May 15, 2024

 

RSU Grants to Non-Employee Directors

 

In April 2024, the Compensation Committee of the Board, or Compensation Committee, approved, pursuant to the terms of the Company’s Amended and Restated Non-Employee Director Compensation Policy, or the Director Compensation Policy, the grant of the annual RSUs under the Director Compensation Policy to each of the three non-employee directors of the Company then serving on the Board of Directors of the Company, or Board. The Director Compensation Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each fiscal year for current non-employee directors then serving on the Board, and for a grant of stock options or $75,000 worth of RSUs for a newly elected non-employee director, with each RSU priced at the average for the closing prices for the five days preceding and including the date of grant, or $12.16 per share for the April 2024 RSU grants. As a result, in April 2024 the four eligible directors were each granted an RSU in the amount of 4,112 shares under the 2020 Plan. The RSUs are subject to vesting in four equal installments, with 25% of the restricted stock units vesting on each of June 30, 2024, September 30, 2024, December 31, 2024, and March 31, 2025, subject in each case to the director’s Continuous Service (as defined in the 2020 Plan), through such dates. Vesting will terminate upon the director’s termination of Continuous Service prior to any vesting date.

 

There were no vested RSUs outstanding as of March 31, 2025.

 

Equity Transactions in the Fiscal Year Ended March 31, 2024.

 

On March 24, 2022, we entered into an At The Market Offering Agreement, or the 2022 ATM Agreement, with H.C. Wainwright & Co., LLC, or Wainwright, which established an at-the-market equity program pursuant to which we may offer and sell shares of our common stock from time to time as set forth in the 2022 ATM Agreement.

 

The offering was registered under the Securities Act of 1933, as amended, or the Securities Act, pursuant to our shelf registration statement on Form S-3 (Registration Statement No. 333-259909), as previously filed with the Securities and Exchange Commission, or SEC, and declared effective on October 21, 2021. We filed a prospectus supplement, dated March 24, 2022, with the SEC that provides for the sale of shares of our common stock, or the 2022 ATM Shares, having an aggregate offering price of up to $15,000,000, which was subsequently and most recently updated pursuant to our prospectus supplement, dated September 29, 2022, filed with the SEC that provides for the sale of 2022 ATM Shares having an aggregate offering price of up to $6,625,000. As of March 31, 2024, $5,302,617 of 2022 ATM Shares remained available for sale under the 2022 ATM Agreement.

 

The underlying shelf registration statement on Form S-3 expired in October 2024. As a result, we were no longer eligible to sell shares under the 2022 ATM Agreement, which we subsequently terminated following the expiration

 

Under the 2022 ATM Agreement, Wainwright may sell the 2022 ATM Shares by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act, including sales made directly on the Nasdaq Capital Market, or on any other existing trading market for the 2022 ATM Shares. In addition, under the 2022 ATM Agreement, Wainwright may sell the 2022 ATM Shares in privately negotiated transactions with our consent and in block transactions. Under certain circumstances, we may instruct Wainwright not to sell the 2022 ATM Shares if the sales cannot be effected at or above the price designated by us from time to time.

 

We are not obligated to make any further sales of the 2022 ATM Shares under the 2022 ATM Agreement. The offering of the 2022 ATM Shares pursuant to the 2022 ATM Agreement will terminate upon the termination of the 2022 ATM Agreement by Wainwright or us, as permitted therein.

 

The 2022 ATM Agreement contains customary representations, warranties and agreements by us, and customary indemnification and contribution rights and obligations of the parties. We agreed to pay Wainwright a placement fee of up to 3.0% of the aggregate gross proceeds from each sale of the 2022 ATM Shares. We also agreed to reimburse Wainwright for certain specified expenses in connection with entering into the 2022 ATM Agreement.

 

In the fiscal year ended March 31, 2024, we raised aggregate net proceeds of $1,322,383 net of $34,118 in commissions to Wainwright and $8,202 in other offering expense, through the sale of 37,011 shares of our common stock at an average price of $35.76 per share under the 2022 ATM Agreement.

.

RSU Grants to Non-Employee Directors

 

In April 2024, the Compensation Committee of the Board, or Compensation Committee, approved, pursuant to the terms of the Company’s Amended and Restated Non-Employee Director Compensation Policy, or the Director Compensation Policy, the grant of the annual RSUs under the Director Compensation Policy to each of the three non-employee directors of the Company then serving on the Board of Directors of the Company, or Board. The Director Compensation Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each fiscal year for current non-employee directors then serving on the Board, and for a grant of stock options or $75,000 worth of RSUs for a newly elected non-employee director, with each RSU priced at the average for the closing prices for the five days preceding and including the date of grant, or $34.40 per share for the April 2023 RSU grants. As a result, in April 2023 the three eligible directors were each granted an RSU in the amount of 1,454 shares under the 2020 Plan. The RSUs are subject to vesting in four equal installments, with 25% of the restricted stock units vesting on each of June 30, 2023, September 30, 2023, December 31, 2023, and March 31, 2024, subject in each case to the director’s Continuous Service (as defined in the 2020 Plan), through such dates. Vesting will terminate upon the director’s termination of Continuous Service prior to any vesting date.

 

Unvested RSUs covering 611 shares of common stock were outstanding as of March 31, 2024.

 

WARRANTS:

 

During the twelve-months ended March 31, 2025, we issued 2,065,500 warrants in connection with the May, 2024 public offering and 1,550,000 in connection with a March 2025 warrant inducement. We did not issue any warrants during the fiscal year ended March 31, 2024.

 

A summary of the aggregate warrant activity for the years ended March 31, 2025 and 2024 is presented below:

                
   Fiscal Year Ended March 31, 
   2025   2024 
   Warrants   Weighted
Average
Exercise Price		   Warrants   Weighted
Average
Exercise Price		 
Outstanding, beginning of year   4,090   $20.09    4,090   $20.09 
Granted   3,615,500   $3.58    –   $N/A 
Exercised   (1,231,305)  $3.92    –   $N/A 
Cancelled/Forfeited   (31,161)  $25.13    –   $N/A 
Outstanding, end of year   2,357,124   $3.55    4,090   $20.09 
Exercisable, end of year   2,357,124   $3.55    4,090   $20.09 
Weighted average estimated fair value of warrants granted       $N/A        $N/A 

 

The detail of the warrants outstanding and exercisable as of March 31, 2025 is as follows:

                    
    Warrants Outstanding    Warrants Exercisable 
Range of
Exercise Prices		   Number
Outstanding		    Weighted
Average
Remaining
Life (Years)		    Weighted
Average
Exercise Price		    Number
Outstanding		    Weighted
Average
Exercise Price		 
$4.64 or Below   2,357,124    4.63   $3.55    2,357,124   $3.55 

 

The detail of the warrants outstanding and exercisable as of March 31, 2024 is as follows:

                     
   Warrants Outstanding   Warrants Exercisable 
Range of
Exercise Prices		  Number
Outstanding		   Weighted
Average
Remaining
Life (Years)		   Weighted
Average
Exercise Price		   Number
Outstanding		   Weighted
Average
Exercise Price		 
$150.00 or Below   2,531    0.71   $125.28    2,531   $125.28 
$200.00 - $220.00   1,559    0.81   $218.24    1,559   $218.24 
    4,090              4,090      

 

STOCK-BASED COMPENSATION:

 

2020 EQUITY INCENTIVE PLAN

 

The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by our stockholders in September 2020 to provide stock-based incentives to attract, retain, and motivate employees, directors, and consultants. The plan initially authorized 21,023 shares of common stock for issuance through stock options, restricted stock units (RSUs), stock bonuses, stock appreciation rights, and other awards. Stockholders approved increases to the share reserve in September 2022 and September 2024, authorizing an additional 22,500 and 375,000 shares, respectively. As of March 31, 2025, 390,950 shares remained available for issuance under the 2020 Plan.

 

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

 

The Company maintains the Director Compensation Policy which provides for cash and equity compensation for persons serving as non-employee directors of the Company. Under this policy, each new non-employee director receives either stock options or a grant of RSUs upon appointment/election, as well as either an annual grant of stock options or of RSUs at the beginning of each fiscal year. The (i) stock options are subject to vesting and (ii) RSUs are subject to vesting and represent the right to be issued on a future date shares of our common stock upon vesting.

 

Please see above under the heading "Equity Transactions in the Fiscal Year Ended March 31, 2025—RSU Grants to Non-Employee Directors" for disclosure regarding equity awards under the Director Compensation Policy during the fiscal year ended March 31, 2025.

 

STOCK OPTION ACTIVITY

 

During the fiscal years ended March 31, 2025 and March 31, 2024, we did not issue stock option grants.

 

Options outstanding that were vested as of March 31, 2025 and options that are expected to vest subsequent to March 31, 2025 are as follows:

            
   Number of
Shares		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term in
Years		 
Vested   5,795   $132.82    6.02 
Expected to vest   751   $112.80    6.87 
Total   6,546           

 

The following is a summary of the stock options outstanding at March 31, 2025 and 2024 and the changes during the years then ended:

                
   Fiscal Year Ended March 31, 
   2025   2024 
   Options   Weighted
Average
Exercise Price		   Options   Weighted
Average
Exercise Price		 
Outstanding, beginning of year   10,816   $146.22    21,491   $180.93 
Granted   –   $–    –   $– 
Cancelled/Forfeited   (4,270)  $170.29    (10,675)  $215.12 
Outstanding, end of year   6,546   $130.52    10,816   $146.22 
Exercisable, end of year   5,795   $132.82    7,236   $159.13 
Weighted average estimated fair value of options granted       $N/A        $N/A 

 

Effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025, the Company effected a 1-for-8 reverse stock split of its common stock. All option share figures, including those for prior periods, have been adjusted retrospectively to reflect the reverse split. Option balances may not tie exactly to prior period filings due to rounding of fractional shares.

 

There were no stock option grants during the fiscal years ended March 31, 2025 or March 31, 2024. There were 16,448 RSUs granted during the fiscal year ended March 31, 2025. The weighted average grant date fair value of RSUs granted during the fiscal year ended March 31, 2025 was $50,000. There were no stock option exercises during the fiscal years ended March 31, 2025 and 2024.

 

The table below summarizes nonvested stock options as of March 31, 2025 and changes during the year ended March 31, 2025.

        
   Shares   Weighted Average Grant Date Fair Value 
Nonvested stock options at April 1, 2024   3,580   $120.13 
Vested   (1,628)  $138.95 
Forfeited   (1,201)  $99.19 
Nonvested stock options at March 31, 2025   751      

 

The detail of the options outstanding and exercisable as of March 31, 2025 is as follows:

                    
   Options Outstanding   Options Exercisable 
Exercise Prices  Number
Outstanding		   Weighted
Average
Remaining
Life (Years)		   Weighted
Average
Exercise
Price		   Number
Outstanding		   Weighted
Average
Exercise
Price		 
$102.40-112.8   5,034    6.22 years   $109.17    4,283   $108.54 
$201.6   1,512    5.76 years   $201.60    1,512   $201.60 
Total   6,546              5,795      

 

We recorded stock-based compensation expense related to RSU issuances and to options granted totaling $415,234 and $1,219,370 for the fiscal years ended March 31, 2025 and 2024, respectively. These expenses were recorded as stock compensation included in payroll and related expenses in the accompanying consolidated statement of operations for the years ended March 31, 2025 and 2024.

 

The table below presents a summary of restricted stock unit activity as of March 31, 2025, and for the year then ended.

    
   Shares 
Nonvested RSUs at April 1, 2024   611 
Granted   16,448 
Vested   (12,707)
Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units   (4,352)
Nonvested RSUs at March 31, 2025   – 

 

Our total stock-based compensation for fiscal years ended March 31, 2025 and 2024 included the following:

        
   Fiscal Year Ended 
   March 31, 2025   March 31, 2024 
Vesting of restricted stock units  $218,750   $206,250 
Vesting of stock options   196,484    1,013,120 
Total Stock-Based Compensation  $415,234   $1,219,370 

 

We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The cumulative effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the fiscal year ended March 31, 2025 was insignificant.

 

On March 31, 2025, our outstanding stock options had no intrinsic value since the closing price on that date of $2.86 per share was below the weighted average exercise price of our outstanding stock options.

 

At March 31, 2025, there was $78,548 of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted average period of 0.875 years.