Note 11 - Stockholders' Equity

12 Months Ended

Mar. 31, 2018

Notes

Note 11 - Stockholders' Equity

NOTE 11 - STOCKHOLDERS' EQUITY

Stock issued for compensation and service

On April 19, 2016, in accordance with the Company's agreement with an independent director, the Company issued 43,478 shares of common stock to one independent director, which were valued at $10,609 based on the quoted market price at issuance date.

On March 10, 2017, in accordance with the Company's service agreement with an investor relations firm, the Company issued 25,000 shares of common stock to the firm for the services provided, which were valued at $11,500 based on the quoted market price at issuance date.

Noncontrolling interest

On March 18, 2017, the Company entered into an Acquisition Agreement on Acer Truncatum Industrial Project (the "Agreement") with Shandong Yongchuntang.  Pursuant to the Agreement, the Company agreed to transfer 3% equity of Shandong Spring Pharmaceutical in exchange for tangible and intangible assets related to the Acer Truncatum Industrial Project (the "Project"), which was owned by Shandong Yongchuntang. The assets acquired include research equipment, a patent on the refinery process of the acer truncatum's seed oils, a trademark with the name of "Bao Feng San Yi", and some relevant certifications issued to Shandong Yongchuntang.  (See NOTE 7).

Statutory Reserve

Subsidiaries incorporated in China are required to make appropriations to reserve funds, based on after-tax net income determined in accordance with generally accepted accounting principles of the People's Republic of China ("PRC GAAP").  Effective January 1, 2006, the Company is only required to contribute to one statutory reserve fund at 10% of net income after tax per annum, and any contributions are not to exceed 50% of the respective companies' registered capital.

The Company appropriated nil to the statutory reserve for the years ended March 31, 2018 and 2017, respectively.

Stock Option Plan

On July 23, 2015, the Company adopted a stock option plan that was approved by its Board of Directors on June 15, 2015.  This plan was intended to retain and provide incentives for talented employees, officers and directors, and to align stockholder and employee interests. Under this stock option plan, the participants of the plan include the Company's directors, officers and some employees who were previously determined by the Board of Directors.  On July 23, 2015, the Company signed stock option agreements with each participant and granted options to purchase a total of 2.6 million shares of Common Stock to the participants.  The vesting period of the stock options was ten months from July 23, 2015, the grant date of the stock options.  Immediately following the date when the stock options were vested, the participants would have five consecutive business days to exercise the stock options at an exercise price of $0.40 per share.  Stock options not exercised within the five consecutive business days would expire.  The Company assessed the fair value of the total granted stock options on the grant date using a Black-Scholes Stock Option Pricing Model. Significant assumptions used in calculating fair value of options are as follows:

•              Expected volatility 92.03%;

•              Risk-free interest rate 0.33%;

•              Expected term (year) 0.85;

•              Exercise price $0.4.

The estimated fair value of the total granted stock options on the grant date was $529,100, which is being amortized over ten months. All stock options expired on May 30, 2016 and none of the vested stock options were exercised by the end of the option exercise date. The total estimated fair value of the stock options in amount of $529,100 had been fully amortized as of March 31, 2017. For the years ended March 31, 2018 and 2017, the amortization of stock-based compensation expense was $0 and $101,026, respectively.

A summary of the changes in stock options outstanding under the Company's stock option plan for the years ended March 31, 2018 and 2017 is presented below: 

			Weighted
			Average
			Grant Date
	Shares		Fair Value
Options outstanding at March 31, 2016		2,600,000	$	529,100
Granted		-		-
Exercised		-		-
Canceled		-		-
Expired		2,600,000		529,100
Options outstanding at March 31, 2017		-	$	-
Granted		-		-
Exercised		-		-
Canceled		-		-
Expired		-		-
Options outstanding at March 31, 2018		-	$	-