Note 10 - Employee Benefit Plan

12 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

Note 10 – Employee Benefit Plan

Share-Based Employee Compensation

On February 6, 2008, the board of directors adopted the GB Sciences, Inc. 2007 Amended Stock Option Plan (“2007 Plan”). Under the 2007 Plan, 4,500,000 shares of the Company’s restricted common stock may be issuable upon the exercise of options issued to employees, advisors and consultants. The Company revised the plan, and the board of directors adopted the new 2014 Equity Compensation Plan. On June 30, 2015, GB Sciences filed a Form S-8 Registration Statement with the SEC to register 8,500,000 shares of common stock issuable under stock options to grant to employees and consultants. At the Company’s special meeting of the shareholders held on April 6, 2018, the adoption by the board of directors of the 2014 Equity Compensation Plan was ratified by a majority of shareholders present at the meeting, either in person or by proxy and the Company adopted the GB Sciences, Inc 2018 Stock Plan. On October 25, 2018, GB Sciences filed a Form S-8 Registration Statement with the SEC to register 10,000,000 shares of common stock issuable under the 2018 Plan.

On September 17, 2021, the Board of Directors adopted the 2021 Equity Incentive Plan ("2021 Plan"), and the Company filed a Registration Statement with the SEC on Form S-8 to register 20,000,000 shares of common stock issuable under the 2021 Plan. All 20,000,000 shares registered under the 2021 Plan were available for issuance at March 31, 2022.

Compensation Expense

For the years ended March 31, 2022 and 2021, the Company recorded share-based compensation expense of $60,667 and $436,349, respectively, which includes $60,667 and $211,000, respectively, related to employee stock options and warrants. There was no expense for restricted stock. Unrecognized compensation cost for non-vested awards was $17,333 as of March 31, 2022.

Fair Value

The closing price of the Company's stock on the date of grant is used as the fair value for issuances of restricted stock. The fair value of stock options granted is estimated as of the grant date using the Black-Scholes option pricing model.  

The following range of assumptions in the Black-Scholes option pricing model was used to determine fair value:

	Year Ended
	March 31, 2022			March 31, 2021
Weighted-average volatility		131	%		127	%
Expected term (in years)		10	%		10
Risk-free interest rate		1.42	%		0.93	%

Expected volatilities used for award valuation are based on historical volatility of the Company's common stock. The risk-free interest rate for periods equal to the expected term of an award is based on Federal Reserve yields for U.S. Treasury securities.

Stock Options

A summary of employee option activity, including warrants issued to employees, as of March 31, 2022 and 2021, and changes during the years then ended, is presented below:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
Employee options and warrants	Options		Price $		Life (years)		Value ($)
Outstanding at March 31, 2020		10,983,334	$	0.28		6.02	$	-
Granted		6,750,000	$	0.05
Exercised		-
Forfeited		-
Outstanding at March 31, 2021		17,733,334	$	0.11		6.80	$	172,000
Granted		-
Exercised		-
Forfeited		-
Outstanding at March 31, 2022		17,733,334	$	0.11		5.80	$	-
Fully vested and expected to vest at March 31, 2022		17,733,334	$	0.11
Exercisable at March 31, 2022		15,566,668	$	0.12

The table below sets forth nonemployee option activity for the years ended March 31, 2022 and 2021:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
Nonemployee options	Options		Price $		Life (years)		Value ($)
Outstanding at March 31, 2020		2,383,000	$	0.27		6.75	$	-
Granted		3,500,000	$	0.05
Exercised		-
Forfeited		-
Outstanding at March 31, 2021		5,883,000	$	0.14		8.11	$	-
Granted		600,000	$	0.05
Exercised		-
Forfeited		-
Outstanding at March 31, 2022		6,483,000	$	0.13		7.31	$	-
Fully vested and expected to vest at March 31, 2022		6,483,000	$	0.13
Exercisable at March 31, 2022		6,483,000	$	0.13

Restricted stock awards

No restricted stock awards were granted during the years ended March 31, 2022 and 2021.