EQUITY TRANSACTIONS

12 Months Ended

Mar. 31, 2024

Equity [Abstract]

EQUITY TRANSACTIONS

4. EQUITY TRANSACTIONS

REVERSE STOCK SPLIT

On October 4, 2023, we effected a 1-for-10 reverse stock split of our then outstanding shares of common stock. Accordingly, each 10 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, 2022. All shares and per share amounts have been revised accordingly.

ISSUANCES OF COMMON STOCK AND WARRANTS

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

2022 At The Market Offering Agreement with H.C. Wainwright & Co., LLC

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.

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 296,056 shares of our common stock at an average price of $4.47 per share under the 2022 ATM Agreement.

RSU Grants to Non-Employee Directors

In April 2023, 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 $4.30 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 11,628 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 4,885 shares of common stock were outstanding as of March 31, 2024.

Equity Transactions in the Fiscal Year Ended March 31, 2023.

During the fiscal year ended March 31, 2023, we raised net proceeds of $8,927,211, net of $229,610 in commissions to Wainwright and $27,153 in other offering expense, through the sale of 748,084 shares of our common stock at an average price of $11.90 per share under the 2022 ATM Agreement.

RSU Grants to Non-Employee Directors

The Compensation Committee approved, effective as of April 1, 2022, pursuant to the terms of the Director Compensation Policy, the grant of the annual RSUs to each of the two non-employee directors of the Company then serving on the Board, and the grant of an RSU for the then newly appointed non-employee director. The RSU grants were made subject to stockholder approval of an increase of 1,800,000 shares of common stock authorized for issuance under the Company’s 2020 Equity Incentive Plan, or the 2020 Plan, at the Company’s 2022 Annual Meeting of Stockholders. The increase was approved at the Company’s 2022 Annual Meeting of Stockholders held in September 2022. 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 $14.60 per share as of April 1, 2022. The two then-current eligible directors each was granted a contingent RSU in the amount of 3,425 shares under the 2020 Plan and the then newly appointed director received a contingent RSU grant for 5,137 shares under the 2020 Plan. The RSUs were subject to vesting in three installments, 50% on September 30, 2022, and 25% on each of December 31, 2022, and March 31, 2023, subject to the recipient's continued service with the Company on each such vesting date. 

There were no vested RSUs outstanding as of March 31, 2023.

WARRANTS:

We did not issue any warrants during the fiscal years ended March 31, 2024 and 2023. 

A summary of the aggregate warrant activity for the years ended March 31, 2024 and 2023 is presented below:

	Fiscal Year Ended March 31,
	2024				2023
	Warrants		Weighted Average Exercise Price		Warrants			Weighted Average Exercise Price
Outstanding, beginning of year		32,676	$	20.09		57,678		$	112.11
Granted		–	$	N/A		–		$	N/A
Exercised		–	$	N/A		–		$	N/A
Cancelled/Forfeited		–	$	N/A		(25,002	)	$	232.38
Outstanding, end of year		32,676	$	20.09		32,676		$	20.09
Exercisable, end of year		32,676	$	20.09		32,676		$	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, 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
$18.75 or Below	20,217	.71	$	15.66	20,217	$	15.66
$25.00 - $27.50	12,459	.81	$	27.28	12,459	$	27.28
	32,676				32,676

The detail of the warrants outstanding and exercisable as of March 31, 2023 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
$18.75 or Below	20,217	1.71	$	15.66	20,217	$	15.66
$25.00 - $27.50	12,459	1.81	$	27.28	12,459	$	27.28
	32,676				32,676

STOCK-BASED COMPENSATION:

2020 EQUITY INCENTIVE PLAN

In September 2020, our stockholders approved the adoption of the 2020 Plan, to provide incentives to attract, retain and motivate employees, directors and consultants, whose present and potential contributions are important to our success, by offering them an opportunity to participate in our future performance through awards of options, the right to purchase common stock, stock bonuses and stock appreciation rights and other awards. We initially authorized a total of 168,182 common shares for issuance under the 2020 Plan pursuant to stock option grants, RSUs or other forms of stock-based compensation.

In September 2022, our stockholders approved an increase in the number of shares of common stock authorized for issuance under the 2020 Plan by 180,000 shares. As of March 31, 2024, there were 200,948 shares available 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, 2024—RSU Grants to Non-Employee Directors" for disclosure regarding equity awards under the Director Compensation Policy during the fiscal year ended March 31, 2024.

STOCK OPTION ACTIVITY

During the fiscal year ended March 31, 2024, we did not issue stock option grants. The assumptions used in estimating the fair value of stock options in the fiscal year ended March 31, 2023 included volatility ranging from 136.1% to 140%, a 0% dividend rate, and risk-free rates between 1.49% and 2.14%. The weighted average expected volatility was 138.07%

Options outstanding that were vested as of March 31, 2024 and options that are expected to vest subsequent to March 31, 2024 are as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years
Vested		57,813	$	19.41		6.96
Expected to vest		28,653	$	15.01		7.78
Total		86,466

The following is a summary of the stock options outstanding at March 31, 2024 and 2023 and the changes during the years then ended:

	Fiscal Year Ended March 31,
	2024					2023
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding, beginning of year		171,825		$	22.4		166,595		$	23.1
Granted		–		$	–		12,222		$	9.50
Cancelled/Forfeited		(85,359	)	$	26.89		(6,992	)	$	17.70
Outstanding, end of year		86,466		$	17.95		171,825		$	22.4
Exercisable, end of year		57,813		$	19.41		75,554		$	24.5
Weighted average estimated fair value of options granted				$	N/A				$	N/A

There were no stock option grants during the fiscal year ended March 31, 2024. There were 12,222 stock options granted during the fiscal year ended March 31, 2023. The weighted average grant date fair value of stock options granted during the fiscal year ended March 31, 2023 was $61,146. There were 54,428 RSUs granted during the fiscal year ended March 31, 2024. The weighted average grant date fair value of RSUs granted during the fiscal year ended March 31, 2024 was $58,333. There were no stock option exercises during the fiscal years ended March 31, 2024 and 2023.

The table below summarizes nonvested stock options as of March 31, 2024 and changes during the year ended March 31, 2024. 

	Shares			Weighted Average Grant Date Fair Value
Nonvested stock options at April 1, 2023		96,273		$	19.99
Vested		(21,934	)	$	1.59
Forfeited		(45,686	)	$	2.55
Nonvested stock options at March 31, 2024		28,653

The detail of the options outstanding and exercisable as of March 31, 2024 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
$6.90 - $16.80	62,204	7.48 years	$	13.24	38,589	$	13.48
$25.20	24,178	6.76 years	$	25.20	19,140	$	25.20
$1,425.00	84	.18 years	$	1,425.00	84	$	1,425.00
	86,466				57,813

We recorded stock-based compensation expense related to RSU issuances and to options granted totaling $1,219,370 and $1,051,898 for the fiscal years ended March 31, 2024 and 2023, 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, 2024 and 2023.

The table below summarizes restricted stock units as of March 31, 2024 and changes during the year ended March 31, 2024.

	Shares
Nonvested RSUs at April 1, 2023		–
Granted		54,428
Vested		(34,378	)
Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units		(15,165	)
Nonvested RSUs at March 31, 2024		4,885

Our total stock-based compensation for fiscal years ended March 31, 2024 and 2023 included the following:

	Fiscal Year Ended
	March 31, 2024		March 31, 2023
Vesting of restricted stock units	$	206,250	$	175,000
Vesting of stock options		1,013,120		876,898
Total Stock-Based Compensation	$	1,219,370	$	1,051,898

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, 2024 was insignificant.

On March 31, 2024, our outstanding stock options had no intrinsic value since the closing price on that date of $1.68 per share was below the weighted average exercise price of our outstanding stock options.

At March 31, 2024, there was approximately $400,002 of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted average period of 1.57 years.