STOCKHOLDERS’ EQUITY

6 Months Ended

Sep. 30, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY

(4) STOCKHOLDERS’ EQUITY

Common Stock

Effective December 6, 2018, three existing stockholders have contributed to the Company a portion of their common shares held at a repurchase price to the Company of $0.05 per share. The Company has cancelled the acquired shares, which decreased the outstanding common shares on the books of the Company. The total number of common shares canceled/retired was 8,000,000, of which 6,000,000 shares were owned by a related party to the Company. The total liability related to the repurchase of these shares is $400,000, with repayment to the related party stockholders contingent on a major financing event. $300,000 of the $400,000 liability is to a related party.

On August 15, 2023, the Company issued a private placement memorandum offering to raise up to $1,500,000 through the issuance of restricted shares of the Company’s common stock (par value $0.001) to qualified investors. On September 20, 2023, the Company received subscription agreements from an investor, for 200,000 shares of common stock in conjunction with a purchase of 400,000 warrants to purchase shares of common stock. The proceeds from this transaction were $200,000. Subscription agreements from additional investors were received subsequent to September 30, 2023 (see note 8).

Warrants to Purchase Common Stock

The Company’s related party lenders consist of: Kraig Higginson, the Chairman of the Board of Directors and a stockholder, Radiant Life, LLC and Mr. Dickman, a board member and stockholder. These holders of the related party unsecured promissory notes hold agreements that provide each related party with common stock warrants upon the lender’s extension of a maturity due date or upon the loaning of additional monies. The number of warrants issued for an extension is based on the following formula: 10,000 warrants per month the due date is extended plus 1 warrant for every $2 of the principal balance outstanding (not including interest) at the time of the extension (rounded to the nearest whole warrant). Upon the loaning of additional monies, the lender will also require 2 warrants for each dollar loaned. All warrants issued under these terms vested immediately upon issuance, have an exercise price approximately equivalent to the fair value of the Company’s common stock on the date of grant, and expire 5 years from the date of issuance.

During the six months ended September 30, 2023, the Company issued 281,900 warrants to the Chairman of the Board of Directors in conjunction with monies borrowed during the period per the terms outlined above. The exercise price of these warrants was $1.05. The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $208,545. The inputs used in this calculation included a fair value of the underlying common stock of $1.049 per share, a risk-free between 3.36% and 4.19%, volatility between 86.04% and 89.11% and a dividend rate of 0%.

During the six months ended September 30, 2023, the Company issued 281,900 warrants to Radiant Life, LLC in conjunction with monies borrowed during the period per the terms outlined above. The exercise price of these warrants was $1.05. The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $58,402. The inputs used in this calculation included a fair value of the underlying common stock of $1.049 per share, a risk-free between 4.04% and 4.29%, volatility between 85.03% and 86.44% and a dividend rate of 0%.

On June 5, 2023, the Company issued 543,000 warrants to Mr. Dickman in conjunction with an extension of the maturity dates during the period per the terms outlined above. The exercise price of these warrants was $1.05. The value of the warrants on the date of grant, as calculated by the Black-Scholes-Merton valuation model was $398,920. The inputs used in this calculation included a fair value of the underlying common stock of $1.049 per share, a risk-free rate of 3.82%, volatility of 89.07% and a dividend rate of 0%.

On September 20, 2023, the Company issued 400,000 warrants to an equity investor, which vested immediately, in conjunction with a purchase of 200,000 shares of the Company’s common stock. The exercise price of these warrants was $0.35.

	Number of Warrants
Outstanding at March 31, 2023		9,403,644
Granted in conjunction with monies borrowed		361,900
Granted in conjunction with extension		543,000
Granted to investors for cash		400,000
Outstanding at September 30, 2023		10,708,544
Exercisable at September 30, 2023		10,708,544

The following table summarizes the warrants issued and outstanding as of September 30, 2023: 

Exercise Price ($)	Warrants Outstanding		Warrants Exercisable		Weighted Average Remaining Contractual Life (Years)		Proceeds to Company if Exercised
0.05		3,708,754		3,708,754		1.70	$	185,439
0.35		400,000		400,000		4.98	$	140,000
1.00		1,000,000		1,000,000		0.52	$	1,000,000
1.05		5,049,790		5,049,790		3.99	$	5,302,280
2.00		50,000		50,000		2.84	$	100,000
5.00		500,000		500,000		3.32	$	2,500,000
		10,708,544		10,708,544			$	9,227,719

The shares of common stock issuable upon exercise of the warrants are not registered with the Securities and Exchange Commission and the holders of the warrants do not have registration rights with respect to the warrants or the underlying shares of common stock.