Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2019 | Sep. 30, 2019 | |
Details | ||
Registrant CIK | 0001011060 | |
Fiscal Year End | --03-31 | |
Registrant Name | ADVANSOURCE BIOMATERIALS CORPORATION | |
SEC Form | 10-Q | |
Period End date | Jun. 30, 2019 | |
Tax Identification Number (TIN) | 04-3186647 | |
Number of common stock shares outstanding | 21,490,621 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-28034 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 229 Andover Street | |
Entity Address, City or Town | Wilmington | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01887 | |
Phone Fax Number Description | Issuer’s telephone number | |
City Area Code | 424 | |
Local Phone Number | 256-8560 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2019 | Mar. 31, 2019 |
Current assets: | ||
Cash | $ 446 | $ 172 |
Accounts receivable-trade, net of allowance of $5 as of June 30, 2019 and March 31, 2019 | 320 | 483 |
Accounts receivable-other | 193 | 185 |
Inventories, net | 247 | 248 |
Prepaid expenses and other current assets | 2 | 3 |
Total current assets | 1,208 | 1,091 |
Property, plant and equipment, net | 1,777 | 1,791 |
Deferred financing costs, net | 51 | 52 |
Other assets | 47 | 47 |
Total assets | 3,083 | 2,981 |
Current liabilities: | ||
Accounts payable | 540 | 467 |
Accrued expenses | 308 | 342 |
Customer advance | 23 | 24 |
Related party notes payable | 125 | 140 |
Total current liabilities | 996 | 973 |
Long-term liabilities: | ||
Long-term financing obligation | 1,986 | 1,986 |
Accrued interest on financing obligation | 164 | 168 |
Total long-term liabilities | 2,150 | 2,154 |
Total liabilities | 3,146 | 3,127 |
Commitments and contingencies (See Note 14) | 0 | 0 |
Stockholders' deficit: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 21 | 21 |
Additional paid-in capital | 38,427 | 38,427 |
Accumulated deficit | $ (38,481) | $ (38,564) |
Treasury stock, 76,692 shares at cost as of June 30, 2019 and March 31, 2019 | (30) | (30) |
Total stockholders' deficit | $ (63) | $ (146) |
Total liabilities and stockholders' deficit | $ 3,083 | $ 2,981 |
Balance Sheets - Parenthetical
Balance Sheets - Parenthetical - USD ($) | Jun. 30, 2019 | Mar. 31, 2019 |
Details | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 5 | $ 5 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 21,567,313 | 21,567,313 |
Common Stock, Shares, Outstanding | 21,490,621 | 21,490,621 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||
Product sales | $ 661 | $ 375 |
License and royalty fees | 203 | 214 |
Total revenues | 864 | 589 |
Cost of sales | 255 | 173 |
Gross profit | 609 | 416 |
Operating expenses: | ||
Research, development and regulatory | 98 | 88 |
Selling, general and administrative | 334 | 325 |
Total operating expenses | 432 | 413 |
Income from operations | 177 | 3 |
Interest expense | (94) | (94) |
Net income (loss) before provision for income taxes | 83 | (91) |
Provision for income taxes | 0 | 0 |
Net income (loss) | $ 83 | $ (91) |
Net income (loss) per common share: | ||
Basic | $ 0 | $ 0 |
Diluted | $ 0 | $ 0 |
Shares used in computing net income (loss) per common share: | ||
Basic | 21,491 | 21,491 |
Diluted | 25,301 | 21,491 |
Statement of Stockholders' Defi
Statement of Stockholders' Deficit - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total |
Equity Balance, Starting at Mar. 31, 2018 | $ 0 | $ 21 | $ 38,404 | $ (38,898) | $ (30) | $ (503) |
Shares Outstanding Starting at Mar. 31, 2018 | 0 | 21,491 | ||||
Net Income (Loss) | (91) | (91) | ||||
Shares Outstanding Ending at Jun. 30, 2018 | 0 | 21,491 | ||||
Equity Balance, Ending at Jun. 30, 2018 | $ 0 | $ 21 | 38,404 | (38,989) | (30) | (594) |
Equity Balance, Starting at Mar. 31, 2019 | $ 0 | $ 21 | 38,427 | (38,564) | (30) | (146) |
Shares Outstanding Starting at Mar. 31, 2019 | 0 | 21,491 | ||||
Net Income (Loss) | 83 | 83 | ||||
Shares Outstanding Ending at Jun. 30, 2019 | 0 | 21,491 | ||||
Equity Balance, Ending at Jun. 30, 2019 | $ 0 | $ 21 | $ 38,427 | $ (38,481) | $ (30) | $ (63) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 83,000 | $ (91,000) |
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities: | ||
Depreciation | 14,000 | 13,000 |
Amortization of deferred financing costs | 1,000 | 2,000 |
Changes in assets and liabilities: | ||
Accounts receivable-trade | 163,000 | (39,000) |
Accounts receivable-other | (8,000) | 201,000 |
Inventories | 1,000 | (43,000) |
Prepaid expenses and other current assets | 1,000 | (1,000) |
Accounts payable | 73,000 | 18,000 |
Accrued expenses | (38,000) | (21,000) |
Customer advance | (1,000) | 2,000 |
Deferred revenue | 0 | (13,000) |
Net cash flows provided by operating activities | 289,000 | 28,000 |
Cash flows from investing activities: | ||
Purchase of equipment | 0 | (24,000) |
Net cash flows used in investing activities | 0 | (24,000) |
Cash flows from financing activities: | ||
Repayment of related party notes payable | (15,000) | 0 |
Net cash flows used in financing activities | (15,000) | 0 |
Net change in cash | 274,000 | 4,000 |
Cash at beginning of year | 172,000 | 120,000 |
Cash at end of year | 446,000 | 124,000 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid | 0 | 0 |
Interest paid | $ 87,000 | $ 93,000 |
Business Description
Business Description | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Business Description | 1. Business Description AdvanSource Biomaterials Corporation develops advanced polymer materials which provide critical characteristics in the design and development of medical devices. Our biomaterials are used in devices that are designed for treating a broad range of anatomical sites and disease states. Our business model leverages our proprietary materials science technology and manufacturing expertise in order to expand product sales and royalty and license fee income. Our technology, notably products such as ChronoFlex®, HydroMed™, and HydroThane™, which have been developed to overcome a wide range of design and functional challenges, such as the need for dimensional stability, ease of manufacture and demanding physical properties to overcoming environmental stress cracking and providing heightened lubricity for ease of insertion. Our new product extensions customize proprietary polymers for specific customer applications in a wide range of device categories. Our corporate, development and manufacturing operations are located in our leased facility in Wilmington, Massachusetts. |
Interim Financial Statements an
Interim Financial Statements and Basis of Presentation | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Interim Financial Statements and Basis of Presentation | 2. Interim Financial Statements and Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, these unaudited condensed financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments (consisting only of normal recurring adjustments), which we consider necessary, for a fair presentation of those financial statements. The results of operations and cash flows for the three months ended June 30, 2019 may not necessarily be indicative of results that may be expected for any succeeding quarter or for the entire fiscal year. The information contained in this quarterly report on Form 10-Q should be read in conjunction with our audited financial statements included in our annual report on Form 10-K, as of and for the year ended March 31, 2019 as filed with the Securities and Exchange Commission (the “SEC”). Additionally, the accompanying unaudited financial statements have been prepared on a going concern basis which implies we will continue to meet our obligations for the next twelve months as of the date these financial statements are issued and contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the three months ended June 30, 2019, we recognized net income of approximately $83,000, had positive net cash flows of approximately $289,000 from operating activities and had a working capital surplus of approximately $212,000. Management believes that substantial doubt of our ability to meet our obligations for the next twelve months from the date these financial statements were first made available has been alleviated due to, but not limited to, i) continued growth of product sales from our current customer base and new customers; and ii) stable to increasing license fees and royalties pursuant to long-term contracts and arrangements. However, management cannot provide any assurances that we will be successful in accomplishing any of our plans. Management also cannot provide any assurance that unforeseen circumstances that could occur at any time within the next twelve months or thereafter will not increase the need for us to raise additional capital on an immediate basis. However, based upon our evaluation, management believes that we are a going concern. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments, which are evaluated on an ongoing basis, and that affect the amounts reported in our unaudited condensed financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to revenue recognition, allowance for doubtful accounts, inventory reserves, useful lives and valuation of property and equipment. Our significant accounting policies are described in Note 3 to the audited financial statements as of March 31, 2019 which are included in our Annual Report on Form 10-K as filed with the SEC on August 23, 2019. Revenue Recognition We adopted the Accounting Standard Codification (“ASC”) 606, “Revenue from Contracts with Customers” as of April 1, 2018, using the modified retrospective method, and concluded that, consistent with prior reporting, we have two separate revenue streams: (i) product sales, and (ii) royalty and licensing revenues. Results for reporting periods after April 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with legacy accounting guidance under ASC 605, “Revenue Recognition.” The adoption of ASC 606 had no impact upon adoption, to our net income for the three months ended June 30, 2019. ASC 606 defines a five-step process to recognize revenues at the time and in an amount that reflects the consideration expected to be received for the performance obligations that have been provided. ASC 606 defines contracts as written, oral and through customary business practice. Under this definition, the Company considers contracts to be created at the time that an order to purchase product is agreed upon regardless of whether or not there is a written contract or when a contract is entered into for licensing and royalties. We have two separate and distinct performance obligations offered to our customers: a product sales performance obligation and a licensing and royalty performance obligation. These performance obligations are related to separate revenue streams and at no point are they combined into a single transaction. We generate the majority of our revenue from product sales, and to a lesser extent from fees generated from licensing and royalty arrangements primarily with two customers. Our revenue related to product sales is recognized upon shipment, provided that a purchase order has been received or a contract has been executed, there are no uncertainties regarding customer acceptance, the sales price is fixed or determinable and collection is deemed reasonably assured. If uncertainties regarding customer acceptance exist, we recognize revenues when those uncertainties are resolved and title has been transferred to the customer. Amounts collected or billed prior to satisfying the above revenue recognition criteria are recorded as deferred revenue. Our revenue related to licensing and royalty arrangements is recognized in accordance with the terms of the arrangements which typically provide for quarterly payment of exclusivity fees and royalties earned on the sale of customer products on a quarterly basis. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on our accounting and reporting. We believe that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on our accounting or reporting or that such impact will not be material to our financial position, results of operations and cash flows when implemented. Recent accounting pronouncements are included in Note 3 to the financial statements included in Item 8 of our annual report on Form 10-K as of March 31, 2019. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Related Party Transactions | 4. Related Party Transactions On April 26, 2016, we entered into Promissory Notes in the aggregate principal amount of $50,000 (the “Notes”) with Khristine Carroll, our Executive VP of Commercial Operations and an affiliate of Michael Adams, our Chief Executive Officer (the “Affiliate”) (collectively, the “Investors”). The Notes were initially due on May 25, 2016 and are currently being extended for consecutive monthly periods as mutually agreed upon by the parties and provided for by the terms of the Notes. The Notes bear interest at the rate of 10% per annum and all principal and accrued interest, if any, is due on demand. During the three months ended June 30, 2019 and 2018, we repaid $15,000 and $5,000 of principal to Ms. Carroll. As of June 30, 2019 and March 31, 2019, the aggregate principal balance outstanding on Ms. Carroll’s note was $0 and $15,000, respectively. As of June 30, 2019 and March 31, 2019, the aggregate principal balance outstanding on the Affiliate’s note was $25,000 and $25,000, respectively. During the three months ended June 30, 2019 and 2018, we recorded interest expense of approximately $1,000 and $1,000, respectively, on the Notes. As of June 30, 2019 and March 31, 2019, there was no accrued interest outstanding on the Notes. On December 5, 2016, we entered into an additional Promissory Note in the principal amount of $100,000 (the “Second Note”) with the Affiliate. The Second Note bears interest at the rate of 12% per annum, provides for a $3,000 commitment fee, which fee was paid in February 2017. Additionally, all principal and accrued interest, if any, which is due on demand, has been extended for consecutive month-to-month periods as mutually agreed to by the parties. As of June 30, 2019 and March 31, 2019, the principal balance outstanding was $100,000 and $100,000, respectively. During the three months ended June 30, 2019 and 2018 we recorded interest expense of approximately $3,000 and $3,000, respectively, on the Second Note. As of June 30, 2019 and March 31, 2019, there was no accrued interest outstanding on the Second Note. |
Inventories
Inventories | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Inventories | 5. Inventories Inventories, net of allowance for obsolete and excess inventory, are stated at the lower of cost (first in, first out) or market and consist of the following: (in thousands) June 30, 2019 March 31, 2019 Raw materials $ 138 $ 136 Work in progress 39 66 Finished goods 151 127 328 329 Less: allowance for obsolete and excess inventory (81) (81) Total inventories, net $ 247 $ 248 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Property, Plant and Equipment | 6. Property. Plant and Equipment Property, plant and equipment consist of the following: (in thousands) June 30, 2019 March 31, 2019 Land $ 500 $ 500 Building 2,705 2,705 Machinery, equipment and tooling 1,248 1,248 Furniture, fixtures and office equipment 285 285 Office equipment under capital lease 13 13 4,751 4,751 Less: accumulated depreciation (2,974) (2,960) Property, plant and equipment, net $ 1,777 $ 1,791 Depreciation expense for the three months ended June 30, 2019 and 2018 was approximately $14,000 and $13,000, respectively. |
Income Per Share
Income Per Share | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Income Per Share | 7. Income Per Share Basic income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income per common share are based upon the weighted-average common shares outstanding during the period plus additional weighted-average common equivalent shares outstanding during the period. Common equivalent shares result from the assumed exercise of outstanding stock options and warrants, the proceeds of which are then assumed to have been used to repurchase outstanding common stock using the treasury stock method. In addition, the numerator is adjusted for any changes in income that would result from the assumed conversion of potential shares. Potentially dilutive shares, which were included in the diluted income per share calculations for the three months ended June 30, 2019 were 5,359,371 shares. Potentially dilutive shares, which were excluded from the diluted income per share calculations because the effect would be antidilutive or the options exercise prices were greater than the average market price of the common shares, were 8,243,250 shares for the three months ended June 30, 2018. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Income Taxes | 8. Income Taxes We are required to file federal and state income tax returns in the United States. The preparation of these tax returns requires us to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by us. In consultation with our tax advisors, we base our tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various federal and state taxing authorities in the jurisdictions in which we file tax returns. As part of these reviews, a taxing authority may disagree with respect to the income tax positions taken by us (“uncertain tax positions”) and, therefore, may require us to pay additional taxes. As required under applicable accounting rules, we accrue an amount for our estimate of additional income tax liability, including interest and penalties, which we could incur as a result of the ultimate or effective resolution of the uncertain tax positions. We account for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. We had no income tax credits for the three months ended June 30, 2019 and 2018. The effective tax rates for the three months ended June 30, 2019 was 21.0%. We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing but have kept the full valuation allowance. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing but have kept the full valuation allowance. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The deferred tax expense recorded in connection with the remeasurement of deferred tax assets is a provisional amount and a reasonable estimate at December 31, 2017 based upon the best information currently available. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Act. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. The accounting is expected to be complete when the 2018 corporate return is filed in 2019. |
Promissory Notes
Promissory Notes | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Promissory Notes | 9. Promissory Notes On April 26, 2016, we entered into Promissory Notes in the aggregate principal amount of $50,000 (the “Notes”) with Khristine Carroll, our Executive VP of Commercial Operations and an affiliate of Michael Adams, our Chief Executive Officer (the “Affiliate”) (collectively, the “Investors”). The Notes were initially due on May 25, 2016 and are currently being extended for consecutive monthly periods as mutually agreed upon by the parties and provided for by the terms of the Notes. The Notes bear interest at the rate of 10% per annum and all principal and accrued interest, if any, is due on demand. During the three months ended June 30, 2019 and 2018, we repaid $15,000 and $5,000 of principal to Ms. Carroll. As of June 30, 2019 and March 31, 2019, the aggregate principal balance outstanding on Ms. Carroll’s note was $0 and $15,000, respectively. As of June 30, 2019 and March 31, 2019, the aggregate principal balance outstanding on the Affiliate’s note was $25,000 and $25,000, respectively. During the three months ended June 30, 2019 and 2018, we recorded interest expense of approximately $1,000 and $1,000, respectively, on the Notes. As of June 30, 2019 and March 31, 2019, there was no accrued interest outstanding on the Notes. On December 5, 2016, we entered into an additional Promissory Note in the principal amount of $100,000 (the “Second Note”) with the Affiliate. The Second Note bears interest at the rate of 12% per annum, provides for a $3,000 commitment fee, which fee was paid in February 2017. Additionally, all principal and accrued interest, if any, which is due on demand, has been extended for consecutive month-to-month periods as mutually agreed to by the parties. As of June 30, 2019 and March 31, 2019, the principal balance outstanding was $100,000 and $100,000, respectively. During the three months ended June 30, 2019 and 2018 we recorded interest expense of approximately $3,000 and $3,000, respectively, on the Second Note. As of June 30, 2019 and March 31, 2019, there was no accrued interest outstanding on the Second Note. |
Long-Term Financing Obligation
Long-Term Financing Obligation | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Long-Term Financing Obligation | 10. Long-Term Financing Obligation On December 22, 2011, we entered into an agreement with an independent third-party under which we sold and leased back our land and building generating gross proceeds of $2,000,000. Pursuant to a lease agreement, the initial minimum lease term is 15 years. At the end of the initial minimum lease term, we have the option to renew the lease for three periods of five years each. In addition, we provided, as collateral, a security interest in all furnishings, fixtures and equipment owned and used by us, having a net book value of approximately $0 as of June 30, 2019. For accounting purposes, the provision of such collateral constitutes continuing involvement with the associated property. Due to this continuing involvement, this sale-leaseback transaction is accounted for under the financing method, rather than as a completed sale. Under the financing method, we include the sales proceeds received as a financing obligation. As of June 30, 2019 and March 31, 2019, the total financing obligation was $1,986,000, respectively, and accrued interest on financing obligation was approximately $164,000 and $168,000, respectively. Through December 2018, interest on the financing obligation exceeded the minimum lease payments, accordingly the principal remains constant through that date. After December 2018, the minimum lease payment will exceed interest and principal will be reduced by the excess of minimum lease payment over interest. The building, building improvements and land remain on the condensed balance sheet and the building and building improvements will continue to be depreciated over their remaining useful lives. Payments made under the lease are applied as payments of imputed interest and deemed principal on the underlying financing obligation. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Stockholders' Deficit | 11. Stockholders’ Deficit Common Stock Options and Warrants On July 22, 2015, we engaged the services of a financial and strategic advisor whose services include, but are not limited to, financial advice, strategic advice and investment banking services. In connection with this engagement, we agreed to compensate the investment bankers approximately $4,000 per quarter for a one-year period and we issued them a warrant to purchase 830,500 shares of our common stock at an exercise price of $0.03 per share, the approximate fair value of our common stock on the date of the engagement. The warrant is exercisable at any time until July 21, 2025. The warrant was valued at approximately $28,000 using the Black-Scholes model and treated as permanent equity. There were no exercises of options or warrants by employees or consultants during the three months ended June 30, 2019 and 2018. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Stock Based Compensation | 12. Stock-Based Compensation In October 2003, our shareholders approved the AdvanSource 2003 Stock Option Plan (the “2003 Plan”), which authorizes the issuance of 3,000,000 shares of common stock. Under the terms of the Plan, the exercise price of Incentive Stock Options issued under the Plan must be equal to the fair market value of the common stock at the date of grant. In the event that Non-Qualified Options are granted under the Plan, the exercise price may be less than the fair market value of the common stock at the time of the grant (but not less than par value). Total shares of common stock registered under the 2003 Plan are 7,000,000 shares. Normally, options granted expire ten years from the grant date. Activity under the 2003 Plan for the three months ended June 30, 2019 is as follows: Number of Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term in Years Aggregate Intrinsic Value (in thousands) Options outstanding as of April 1, 2019 1,788,750 $ 0.20 2.03 $ 20 Granted - Exercised - Cancelled or forfeited - Options outstanding as of June 30, 2019 1,788,750 $ 0.20 1.79 $ 18 Options exercisable as of June 30, 2019 1,788,750 $ 0.20 1.79 $ 18 Options vested or expected to vest as of June 30, 2019 1,788,750 $ 0.20 1.79 $ 18 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing price of the common stock on June 30, 2019 of $0.087 and the exercise price of each in-the-money option) that would have been received by the option holders had all option holders exercised their options on June 30, 2019. There were no stock options exercised under the 2003 Plan for the three months ended June 30, 2019 and 2018. As of June 30, 2019 and 2018, there were no shares remaining to be granted under the 2003 Plan. For the three months ended June 30, 2019 and 2018, we recorded no stock-based compensation expense for options pursuant to the 2003 Plan. As of June 30, 2019, we had no unrecognized compensation cost related to stock options. On August 14, 2017, our board of directors approved and adopted the 2017 Non-Qualified Equity Incentive Plan (the “2017 Plan”), which authorized the grant of non-qualified stock options exercisable into a maximum of 7,000,000 shares of our common stock. Under the terms of the 2017 Plan, the exercise price of stock options issued under the 2017 Plan must be equal to the fair market value of the common stock at the date of grant. Options granted expire ten years from the grant date. From August 17, 2017 through December 13, 2018, the board of directors approved the grant of stock options to certain directors, employees and a consultant which were immediately vested and exercisable into a total of 6,550,000 shares of our common stock. In determining the fair value of the 2017 Stock Options, we utilized the Black-Scholes pricing model utilizing the following assumptions: August 17, 2017 Option Grants August 16, 2018 Option Grants December 13, 2018 Option Grants Total shares granted 5,600,000 750,000 200,000 Option exercise price per share $ 0.06 $ 0.040 $ 0.060 Grant date fair market value per share $ 0.06 $ 0.046 $ 0.059 Expected term of option in years 10.0 2.00 1.00 Expected volatility 100% 100% 100% Expected dividend rate 0.00% 0.00% 0.00% Risk free interest rate 1.00% 0.00% 2.69% |
Concentration of Credit Risk an
Concentration of Credit Risk and Major Customers and Suppliers | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Concentration of Credit Risk and Major Customers and Suppliers | 13. Concentrations of Credit Risk and Major Customers For the three months ended June 30, 2019 and 2018, three customers represented approximately 52% of our total revenues and three customers represented approximately 58% of our total revenues, respectively. As of June 30, 2019, we had accounts receivable-trade of approximately $235,000, or 74%, due from four customers. As of March 31, 2019, we had accounts receivable-trade of approximately $61,000, or 13%, due from one customer. As of June 30, 2019 and March 31, 2019, we had approximately $193,000 due from two customers and $185,000 due from two customers, respectively, related to receivables on license fees and royalties. These amounts are classified as accounts receivable-other in our balance sheets. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Legal Proceedings | 14. Legal Proceedings We are not the subject of any pending legal proceedings; and to the knowledge of management, no proceedings are presently contemplated against us by any federal, state or local governmental agency. Further, to the knowledge of management, no director or executive officer is party to any action in which any has an interest adverse to us. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2019 | |
Notes | |
Subsequent Events | 15. Subsequent Events We evaluated all events or transactions that occurred after the balance sheet date through the date when we filed these financial statements and we determined that we did not have any other material recognizable subsequent events. |
Inventories_ Schedule of Invent
Inventories: Schedule of Inventory, Current (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Inventory, Current | (in thousands) June 30, 2019 March 31, 2019 Raw materials $ 138 $ 136 Work in progress 39 66 Finished goods 151 127 328 329 Less: allowance for obsolete and excess inventory (81) (81) Total inventories, net $ 247 $ 248 |
Property, Plant and Equipment_
Property, Plant and Equipment: Property, Plant and Equipment (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Property, Plant and Equipment | (in thousands) June 30, 2019 March 31, 2019 Land $ 500 $ 500 Building 2,705 2,705 Machinery, equipment and tooling 1,248 1,248 Furniture, fixtures and office equipment 285 285 Office equipment under capital lease 13 13 4,751 4,751 Less: accumulated depreciation (2,974) (2,960) Property, plant and equipment, net $ 1,777 $ 1,791 |
Stock Based Compensation_ Share
Stock Based Compensation: Share-based Payment Arrangement, Activity (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Share-based Payment Arrangement, Activity | Number of Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term in Years Aggregate Intrinsic Value (in thousands) Options outstanding as of April 1, 2019 1,788,750 $ 0.20 2.03 $ 20 Granted - Exercised - Cancelled or forfeited - Options outstanding as of June 30, 2019 1,788,750 $ 0.20 1.79 $ 18 Options exercisable as of June 30, 2019 1,788,750 $ 0.20 1.79 $ 18 Options vested or expected to vest as of June 30, 2019 1,788,750 $ 0.20 1.79 $ 18 |
Stock Based Compensation_ Sha_2
Stock Based Compensation: Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option (Tables) | 3 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option | August 17, 2017 Option Grants August 16, 2018 Option Grants December 13, 2018 Option Grants Total shares granted 5,600,000 750,000 200,000 Option exercise price per share $ 0.06 $ 0.040 $ 0.060 Grant date fair market value per share $ 0.06 $ 0.046 $ 0.059 Expected term of option in years 10.0 2.00 1.00 Expected volatility 100% 100% 100% Expected dividend rate 0.00% 0.00% 0.00% Risk free interest rate 1.00% 0.00% 2.69% |
Inventories_ Schedule of Inve_2
Inventories: Schedule of Inventory, Current (Details) - USD ($) | Jun. 30, 2019 | Mar. 31, 2019 |
Details | ||
Raw materials | $ 138 | $ 136 |
Work in progress | 39 | 66 |
Finished goods | 151 | 127 |
Less: allowance for obsolete and excess inventory | (81) | (81) |
Total inventories, net | $ 247 | $ 248 |
Property, Plant and Equipment_2
Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($) | Jun. 30, 2019 | Mar. 31, 2019 |
Details | ||
Land | $ 500 | $ 500 |
Building | 2,705 | 2,705 |
Machinery, equipment and tooling | 1,248 | 1,248 |
Furniture, fixtures and office equipment | 285 | 285 |
Office equipment under capital lease | 13 | 13 |
Less: accumulated depreciation | (2,974) | (2,960) |
Property, plant and equipment, net | $ 1,777 | $ 1,791 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Details | ||
Depreciation | $ 14,000 | $ 13,000 |