Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Dec. 31, 2016 | Feb. 13, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Vitality Biopharma, Inc. | |
Entity Central Index Key | 1,438,943 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 17,786,515 | |
Trading Symbol | VBIO | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Dec. 31, 2016 | Mar. 31, 2016 |
Current Assets | ||
Cash | $ 153,836 | $ 95,433 |
Accounts receivable, net | 32,187 | 30,396 |
Inventory | 6,470 | 6,470 |
Deposit | 3,058 | 2,500 |
Total Assets | 195,551 | 134,799 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 374,587 | 244,937 |
Accounts payable - related party | 27,600 | 6,900 |
Derivative liability | 474,562 | 401,127 |
Total liabilities | 876,749 | 652,964 |
Stockholders' Deficit | ||
Common stock, par value $0.001 per share; 1,000,000,000 shares authorized; 17,348,372 and 7,911,708 shares issued and outstanding, respectively | 15,912 | 7,912 |
Shares issuable, 0 and 999,700 shares, respectively | 99,970 | |
Additional paid-in-capital | 15,924,681 | 11,890,512 |
Accumulated deficit | (16,621,791) | (12,516,559) |
Total stockholders' deficit | (681,198) | (518,165) |
Total liabilities and stockholders' deficit | $ 195,551 | $ 134,799 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Mar. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 17,348,372 | 7,911,708 |
Common stock, shares outstanding | 17,348,372 | 7,911,708 |
Shares issuable | 0 | 999,700 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||||
Revenue | $ 39,682 | $ 80,818 | $ 131,947 | $ 194,430 |
Cost of goods sold | 19,930 | 30,671 | 65,942 | 95,903 |
Gross profit | 19,752 | 50,147 | 66,005 | 98,527 |
Operating expenses: | ||||
General and administrative | 669,574 | 535,389 | 1,685,527 | 1,833,930 |
Rent and other related party costs | 6,900 | 7,900 | 20,700 | 23,700 |
Research and development | 255,334 | 161,144 | 483,638 | 487,802 |
Total operating expenses | 931,808 | 704,433 | 2,189,865 | 2,345,432 |
Loss from operations | (912,056) | (654,286) | (2,123,860) | (2,246,905) |
Other income (expense) | ||||
Change in fair value of derivative liability | (1,587,854) | 570,797 | (1,980,592) | 2,883,552 |
Interest expense | (64) | (147) | (780) | (363) |
Total other income (expense), net | (1,587,918) | 570,650 | (1,981,372) | 2,883,189 |
Net income (loss) | $ (2,499,974) | $ (83,636) | $ (4,105,232) | $ 636,284 |
Net income (loss) per common share Basic | $ (0.17) | $ (0.01) | $ (0.34) | $ 0.08 |
Net income (loss) per common share Diluted | $ (0.17) | $ (0.01) | $ (0.34) | $ 0.08 |
Weighted average number of common shares outstanding Basic | 14,776,759 | 7,660,444 | 12,191,740 | 7,541,984 |
Weighted average number of common shares outstanding Diluted | 14,776,759 | 7,660,444 | 12,191,740 | 7,541,984 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' Deficit (Unaudited) - 9 months ended Dec. 31, 2016 - USD ($) | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Common Stock Issuable [Member] | Total |
Balance at Mar. 31, 2016 | $ 7,912 | $ 11,890,512 | $ (12,516,559) | $ 99,970 | $ (518,165) |
Balance, shares at Mar. 31, 2016 | 7,911,708 | ||||
Issuance of common stock and warrants | $ 2,650 | 262,350 | (99,970) | 165,030 | |
Issuance of common stock and warrants, shares | 2,650,000 | ||||
Shares issued upon warrant exercises | $ 4,571 | 772,429 | $ 777,000 | ||
Shares issued upon warrant exercises, shares | 4,570,590 | ||||
Amortization of restricted stock issued to employees with vesting terms | 235,499 | $ 235,499 | |||
Amortization of restricted stock issued to employees with vesting terms, shares | 1,436,170 | ||||
Fair value of vested stock options | 581,510 | 581,510 | |||
Extinguishment of derivative liability | $ 454 | 1,906,706 | 1,907,160 | ||
Extinguishment of derivative liability, Shares | 454,364 | ||||
Fair value of common stock issued for services | $ 350 | 275,650 | 276,000 | ||
Fair value of common stock issued for services, shares | 350,000 | ||||
Cancellation of unvested restricted stock granted to employee | $ (25) | 25 | |||
Cancellation of unvested restricted stock granted to employee, shares | (25,000) | ||||
Adjustment to common stock in conjunction with reverse stock split | 540 | ||||
Net Loss | (4,105,232) | (4,105,232) | |||
Balance at Dec. 31, 2016 | $ 15,912 | $ 15,924,681 | $ (16,621,791) | $ (681,198) | |
Balance, shares at Dec. 31, 2016 | 17,348,372 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | ||
Net income (loss) | $ (4,105,232) | $ 636,284 |
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||
Fair value of vested stock options | 581,510 | 186,447 |
Amortization of restricted stock issued to employees with vesting terms | 235,499 | 152,701 |
Change in fair value of derivative liability | 1,980,592 | (2,883,552) |
Fair value of common stock issued for services | 276,000 | 276,000 |
Fair value of vested warrants granted to employees | 147,059 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,791) | (15,195) |
Deposit | (558) | |
Inventory | 612 | |
Accounts payable and accrued liabilities | 129,653 | 27,418 |
Accounts payable - related party | 20,700 | (1,000) |
Net cash used in operating activities | (883,627) | (1,473,226) |
Financing activities | ||
Proceeds from issuance of common stock and warrants, net | 165,030 | 1,291,574 |
Proceeds from exercise of warrants | 777,000 | |
Net cash provided by financing activities | 942,030 | 1,291,574 |
Net increase (decrease) in cash | 58,403 | (181,652) |
Cash and cash equivalent - beginning of period | 95,433 | 389,730 |
Cash and cash equivalent - end of period | 153,836 | 208,078 |
Cash paid during the period for: | ||
Interest | 780 | 363 |
Income taxes | ||
Non-cash activities: | ||
Fair value of warrants issued with common stock recorded as derivative liability | 1,694,651 | |
Extinguishment of derivative liability | $ 1,907,160 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Vitality Biopharma, Inc. (the “Company”, “we”, “us” or “our”) was incorporated under the laws of the State of Nevada on June 29, 2007. In December 2015, we discovered novel pharmaceutical applications of our glycosylation technology for producing cannabinoid prodrugs and we have recently changed our operational focus towards pharmaceutical development of the cannabinoid prodrugs. On July 15, 2016, the holders of a majority of our outstanding common stock and our Board of Directors approved 1) a name change whereby our name changed from Stevia First Corp. to Vitality Biopharma, Inc., 2) a reverse split of our outstanding common shares whereby each 10 shares of common stock were exchanged for 1 share of common stock and 3) an increase in the number of shares of authorized common stock from 525,000,000 to 1,000,000,000. These changes became effective on July 20, 2016. All share and per share information contained in this Quarterly Report, including these unaudited condensed financial statements, has been adjusted to reflect these changes as if it had occurred in the earliest period presented. Going Concern These financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months ended December 31, 2016, the Company incurred a net loss of $4,105,232 and utilized $883,627 of cash in operations, and at December 31, 2016, had a stockholders’ deficit of $681,198. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in their report on the Company’s March 31, 2016 audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. We estimate that we will have sufficient funds to operate the Company through June 30, 2017. These estimates could differ if we encounter unanticipated difficulties, in which case our current funds may not be sufficient to operate our business for that period. In addition, our estimates of the amount of cash necessary to operate our business may prove to be wrong, and we could spend our available financial resources much faster than we currently expect. We do not have any firm commitments for future capital. We will need to raise additional funds in order to continue operating our business and pursue and execute our planned research and development and commercial operations. We do not presently have, nor do we expect in the near future to have, sufficient or consistent revenue to fund our business from our operations, and will need to obtain significant funding from external sources. Since inception, we have funded our operations primarily through equity and debt financings, and we expect to continue to rely on these sources of capital in the future. However, if we raise additional funds by issuing equity or convertible debt securities, our existing stockholders’ ownership will be diluted, and obtaining commercial loans would increase our liabilities and future cash commitments. If we pursue capital through alternative sources, such as collaborations or other similar arrangements, we may be forced to relinquish rights to our proprietary technology or other intellectual property that could result in our receipt of only a portion of any revenue that may be generated from a partnered product or business. Further, these or other sources of capital may not be available on commercially reasonable or acceptable terms when needed, or at all. If we cannot raise the money that we need in order to continue to operate and develop our business, we will be forced to delay, scale back or eliminate some or all of our operations. If any of these were to occur, there is a substantial risk that our business would fail and our stockholders could lose all of their investment. Basis of Presentation of Unaudited Condensed Financial Information The unaudited condensed financial statements of the Company for the nine months ended December 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, applied on a consistent basis, and pursuant to the requirements for reporting on Form 10-Q and the requirements of Regulation S-K and Regulation S-X promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete audited financial statements. However, the information included in these financial statements reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year or any future annual or interim period. The balance sheet information as of March 31, 2016 was derived from the audited financial statements as of and for the year ended March 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on June 24, 2016. These financial statements should be read in conjunction with that report. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The more significant estimates and assumptions by management include, among others, the fair value of equity instruments issued for services, and assumptions used in the valuation of our outstanding derivative liabilities. Accounts Receivable The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding. The allowance for doubtful accounts and returns and discounts is established through a provision reducing the carrying value of receivables. At December 31, 2016, and March 31, 2016, the allowance for doubtful accounts and returns and discounts was approximately $35,500 and $17,517, respectively. Financial Assets and Liabilities Measured at Fair Value The Company accounts for the fair value of financial instruments in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) topic 820, “Fair Value Measurements and Disclosures” (ASC 820). ASC 820 defines “fair value” as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3 Unobservable inputs based on the Company’s assumptions. The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts payable and accrued liabilities, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The Company uses Level 2 inputs for its valuation methodology for the warrant derivative liabilities as their fair values were determined by using a probability weighted average Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. At December 31, 2016 and March 31, 2016, the Company’s balance sheet includes the fair value of derivative liabilities of $474,562 and $401,127, respectively, that were measured using level 2 measurements. The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC 815. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the December 31, 2016 reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Revenue Recognition Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for products and/or services that have been delivered in the normal course of business, title has passed, the selling price is both fixed and determinable, and collectability is reasonably assured, all of which generally occurs upon shipment of the Company’s product or delivery of the product to the destination specified by the customer. The Company determines whether delivery has occurred based on when title transfers and the risks and rewards of ownership have transferred to the buyer, which usually occurs when the Company ships the products. The Company regularly reviews its customers’ financial positions to ensure that collectability is reasonably assured. Except for warranties, the Company has no post-sales obligations. Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance of the FASB, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company’s statements of operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. Basic and Diluted Loss Per Share The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) available to common stockholders by the weighted average number of common shares during the period. Shares of restricted stock subject to vesting are included in basic weighted average common shares outstanding from the time they vest. Diluted EPS reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company. In computing diluted EPS, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. As of December 31, 2016 potentially dilutive securities include options to acquire 2,427,488 shares of common stock and warrants to acquire 4,045,163 shares of common stock. As of December 31, 2015 potentially dilutive securities include options to acquire 899,167 shares of common stock and warrants to acquire 2,502,714 shares of common stock. The basic and fully diluted shares for the three and nine months ended December 31, 2016 are the same because the inclusion of the potential shares would have had an anti-dilutive effect. The basic and fully diluted shares for the three and nine months ended December 31, 2015 are the same because (i) for the three months ended December 31, 2015, the inclusion of the potential shares would have had an anti-dilutive effect and (ii) for the nine months ended December 31, 2015, there were no instruments that would result in issuance of additional shares using the treasury stock method Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, and ASU 2016-20 all of which clarify certain implementation guidance within ASU 2014-09. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. The standard can be adopted either retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company is currently in the process of analyzing the information necessary to determine the impact of adopting this new guidance on its financial position, results of operations, and cash flows. The Company will adopt the provisions of this statement in the quarter beginning April 1, 2018. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this ASU require, among other things, that all income tax effects of awards be recognized in the income statement when the awards vest or are settled. The ASU also allows for an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and allows for a policy election to account for forfeitures as they occur. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any entity in any interim or annual period. The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Derivative Liability
Derivative Liability | 9 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 2. DERIVATIVE LIABILITY Under authoritative guidance by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The warrants issued to purchasers and placement agent in June 2013 and September 2014, and the warrants issued to investors in May 2015, do not have fixed settlement provisions because their exercise prices will be lowered if the Company issues securities at lower prices in the future or have other variable provisions. The Company was required to include the reset provisions in order to protect the holders of the warrants from the potential dilution associated with future financings, and a fundamental transaction provision, which require a revaluation of the liabilities. In accordance with the FASB authoritative guidance, the warrants have been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. As of March 31, 2016 and December 31, 2016, the derivative liabilities were valued using a probability weighted average Black-Scholes-Merton pricing model with the following assumptions: Warrants: December 31, 2016 March 31, 2016 Exercise Price $ 2.00 - 4.25 $ 3.00 - 4.50 Stock Price $ 3.00 $ 0.70 Risk-free interest rate 0.85 – 1.47 % 0.19 - 1.04 % Expected volatility 131.33 % 105.06 - 124.77 % Expected life (in years) 1.0 - 3.7 years 0.1 - 4.2 years Expected dividend yield 0 0 Fair Value: $ 474,562 $ 401,127 The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate the future volatility for its common stock. The expected life of the warrants was determined by the expiration dates of the warrants. The expected dividend yield was based on the fact that the Company has not paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future. At March 31, 2016, the fair value of the derivative liabilities was $401,127. During the nine months ended December 31, 2016, the Company recorded an increase in fair value of the derivative liabilities of $1,980,592. In addition, derivative liabilities of $80,278 were extinguished that were related to warrants that expired and $1,826,882 was extinguished upon the cashless exercise of warrants. At December 31, 2016, the fair value of the derivative liabilities was $474,562. |
Equity
Equity | 9 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Equity | 3. EQUITY Equity Financing In May 2016, the Company entered into a securities purchase agreement providing for the issuance and sale by the Company, in a private placement, of units including 2,650,000 shares of the Company’s common stock (the “Shares”) and Warrants to purchase 7,950,000 shares of the Company’s common stock (the “Warrants”), at a price of $0.10 per Share. The Warrants have an exercise price of $0.17 per share and expire February 4, 2017. The offering closed on May 4, 2016, and aggregate proceeds to the Company from the sale of the Shares and Warrants was $265,000. $165,030 of the proceeds was received in the current period and $99,970 was received prior to April 1, 2016 and had been reflected as common stock issuable at March 31, 2016. Common stock issued to employees for services with vesting terms The Company has issued shares of common stock to employees and directors that vest over time. The fair value of these stock awards were based on the market price of the Company’s common stock at the dates granted, and are amortized over vesting terms ranging up to three years. During the nine months ended December 31, 2016, the Company issued an aggregate of 1,436,170 shares of its common stock to one officer and one director. The aggregate fair value of these awards was approximately $718,000, which will amortized over the 1.75 year vesting term of the awards. At March 31, 2016, the accumulated vested balance of stock awards was $611,216. During the nine months ended December 31, 2016, the fair value of stock awards that vested was $235,499. At December 31, 2016, the accumulated vested balance of the stock awards $846,715. At December 31, 2016, the amount of unvested compensation related to these awards is approximately $513,000, and will be recorded as expense over 1.25 years as the shares vest. Shares of restricted stock granted above are subject to forfeiture to the Company or other restrictions that will lapse in accordance with a vesting schedule determined by our Board. In the event a recipient’s employment or service with the Company terminates, any or all of the shares of common stock held by such recipient that have not vested as of the date of termination under the terms of the restricted stock agreement are forfeited to the Company in accordance with such restricted grant agreement. The following table summarizes restricted common stock activity: Number of Shares Non-vested shares, March 31, 2016 175,833 Granted 1,436,170 Vested (565,113 ) Forfeited (2,500 ) Non-vested shares, December 31, 2016 1,021,890 |
Stock Options
Stock Options | 9 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options | 4. STOCK OPTIONS During the nine months ended December 31, 2016, the Company granted to employees options to purchase an aggregate of 1,618,262 shares of the Company’s common stock with exercise price of $0.50 per share, that expire ten years from the date of grant, and all have vesting period of 24 months. The fair value of each option award was estimated on the date of grant using the Black-Scholes option pricing model based on the following assumptions: (i) volatility rate of 126.34%, (ii) discount rate of 1.60 %, (iii) zero expected dividend yield, and (iv) expected life of 6 years, which is the average of the term of the options and their vesting periods. The total fair value of the option grants to employees at their grant dates was approximately $775,000. For the nine months ended December 31, 2016, amortization of approximately $179,000 was recorded related to these options. During the nine months ended December 31, 2016, the Company also granted to two consultants options to purchase 142,559 shares of the Company’s common stock with exercise prices of per share $0.50 and $0.96, respectively, both option grants expire in ten years from date of grant, and both have vesting period of 24 months. The fair value of these options granted to the consultants was estimated using the Black-Scholes option pricing model based on the following assumptions: (i) volatility rate between 126.34%, (ii) discount rate of 1.36%, (iii) zero expected dividend yield, and (iv) expected life of 10 years. The total fair value of the option grants to the consultants at their grant dates was approximately $146,000. The Company re-measures any non-vested options to non-employees to fair value at the end of each reporting period. At December 31, 2016, the fair value of the 142,559 options was $417,000. During the nine months ended December 31, 2016, amortization of $85,880 was recorded on these options. Pursuant to the terms of the 2012 Stock Incentive Plan, the exercise price for all equity awards issued under the 2012 Stock Incentive Plan is based on the market price per share of the Company’s common stock on the date of grant of the applicable award. A summary of the Company’s stock option activity for the nine months ended December 31, 2016 is presented below: Shares Weighted Average Exercise Price Balance at March 31, 2016 907,500 $ 3.30 Granted 1,760,821 0.51 Exercised - - Expired (225,000 ) 3.73 Cancelled (15,833 ) 3.40 Balance outstanding at December 31, 2016 2,427,488 $ 1.08 Balance exercisable at December 31,2016 560,417 $ 2.60 At December 31, 2016, options to purchase common shares were outstanding as follows: Number of options Weighted Average Exercise Price Weighted Average Grant-date Stock Price Options Outstanding, December 31, 2016 1,710,821 $ 0.50 $ 0.5 50,000 $ 0.96 $ 0.96 130,000 $ 1.00 $ 10.00 10,000 $ 1.50 $ 0.40 287,500 $ 2.00 - 2.70 $ 2.00 - 2.70 130,000 $ 3.10 - 3.80 $ 3.10 - 3.80 49,167 $ 4.00 - 4.70 $ 4.00 - 4.70 60,000 $ 5.10 $ 5.10 2,427,488 Options Exercisable, December 31,2016 130,000 $ 1.00 $ 10.00 5,000 $ 1.50 $ 0.40 211,250 $ 2.00 - 2.70 $ 2.00 - 2.70 108,334 $ 3.10 - 3.80 $ 3.10 - 3.80 45,833 $ 4.00 - 4.70 $ 4.00 - 4.70 60,000 $ 5.10 $ 5.10 560,417 During the nine months ended December 31, 2016 and 2015, we expensed total stock-based compensation related to vesting stock options of $581,510 and $186,447, respectively, and the remaining unamortized cost of the outstanding stock options at December 31, 2016 was $1,145,699. This cost will be amortized over a weighted average remaining vesting period of 2 years and will be adjusted for subsequent changes in estimated forfeitures. Future option grants will increase the amount of compensation expense that will be recorded. The intrinsic values of all outstanding and exercisable stock options at December 31, 2016 were approximately $5,000,000 and $450,000, respectively. |
Warrants
Warrants | 9 Months Ended |
Dec. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 5. WARRANTS At December 31, 2016, warrants to purchase common shares were outstanding as follows: Shares Weighted Average Exercise Price Balance at March 31, 2016 2,002,718 $ 3.50 Granted 7,950,000 0.17 Exercised (5,657,555 ) 0.50 Expired (250,000 ) $ 4.00 Balance outstanding and exercisable at December 31, 2016 4,045,163 $ 0.65 Warrants issued in equity financing (see Note 3) In May 2016, the Company issued warrants to purchase up to an aggregate of 7,950,000 shares of the Company’s common stock in conjunction with a securities purchase agreement for the sale of shares of the Company’s common stock and warrants. The warrants have an exercise price of $0.17 per share and expired on February 4, 2017. All of these warrants were exercised prior to expiration. Warrants issued to employees On August 25, 2014, we entered into employment agreements with two employees, pursuant to which these employees received warrants to purchase an aggregate of 440,000 shares of the Company’s common stock with a fair value of $705,880. The warrants have an exercise price of $3.00, and a term of ten years from issue date. Warrants to purchase 80,000 shares of common stock vested immediately and warrants to purchase 200,000 shares of common stock were amortized over their vesting terms of one year to three years. The balance of 160,000 warrants vest upon the achievement of certain milestones, as defined, none of which have been met through December 31, 2016. At March 31, 2016, the accumulated amortization of the vested fair value for these warrants was $614,846. During the nine months ended December 31, 2016, amortization of vested warrants was $0, and at December 31, 2016, the accumulated amortization for vested warrants was $649,860. Beginning September 1, 2016, there is no further amortization of fair value being recorded for the warrants (see Note 7). During the nine months ended December 31, 2016, the Company received $777,000 of proceeds from holders of warrants to acquire 4,750,590 shares of common stock. In addition, warrant holders exchanged 1,086,965 warrants on a cashless basis for 454,364 shares of common stock. The aggregate intrinsic value of all of the outstanding and exercisable warrants at December 31, 2016 and March 31, 2016 was approximately $9,750,000 and $0, respectively. |
Related Party Transactions and
Related Party Transactions and Lease Obligations | 9 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Lease Obligations | 6. RELATED PARTY TRANSACTIONS AND LEASE OBLIGATIONS Related party lease obligations On April 23, 2012, the Company entered into a lease agreement (the “Carlson Lease”) with One World Ranches, LLC (“One World Ranches”), which is jointly-owned by Dr. Avtar Dhillon, the Chairman of the Board of Directors of the Company, and his wife, Diljit Bains, pursuant to which the Company has agreed to lease from One World Ranches certain office and laboratory space located at 5225 Carlson Road, Yuba City, California. The Carlson Lease began on May 1, 2012 and expires on May 1, 2017, and the Company’s rent payments thereunder are $2,300 per month. The Company has paid $1,500 as a refundable security deposit under the Carlson Lease. Aggregate payments under the above lease for the nine months ended December 31, 2016 and 2015 were $0 and $15,800, respectively. |
Distribution and License Agreem
Distribution and License Agreements | 9 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Distribution and License Agreements | 7. DISTRIBUTION AND LICENSE AGREEMENTS In August 2014, the Company entered into distribution and license agreements with Qualipride International and certain individuals to provide stevia products to the Company. In connection with these agreements, the Company issued 1,400,000 shares of common stock with a total fair value of $420,000 that was being amortized over a three year vesting term (see Note 3). At December 31, 2016, the accumulated amortization for these shares was $395,000. Also in connection with these agreements, the Company issued warrants to purchase 440,000 shares of common stock with a total fair value of $705,880 (See Note 5). At December 31, 2016, the accumulated amortization for these warrants was $649,860. The distribution and license agreements terminated in August 2016 and beginning September 1, 2016, there is no further amortization of fair value being recorded for the common stock or warrants. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. SUBSEQUENT EVENTS In January and February 2017, holders of warrants to purchase 1,056,038 shares of the Company’s common stock were exercised on a cashless basis. In February 2017 the Company issued 37,500 shares of common stock valued at $87,750 in exchange for services. In January and February 2017, the Company issued options to purchase a total of 400,000 shares of the Company’s common stock to one employee and three consultants with a fair value of approximately $948,000 which will be amortized over 24 months as the options vest. These options have an exercise price of between $2.34 and $2.79 per share and expire ten years form the date of issuance. |
Business and Summary of Signi15
Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern These financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months ended December 31, 2016, the Company incurred a net loss of $4,105,232 and utilized $883,627 of cash in operations, and at December 31, 2016, had a stockholders’ deficit of $681,198. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in their report on the Company’s March 31, 2016 audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. We estimate that we will have sufficient funds to operate the Company through June 30, 2017. These estimates could differ if we encounter unanticipated difficulties, in which case our current funds may not be sufficient to operate our business for that period. In addition, our estimates of the amount of cash necessary to operate our business may prove to be wrong, and we could spend our available financial resources much faster than we currently expect. We do not have any firm commitments for future capital. We will need to raise additional funds in order to continue operating our business and pursue and execute our planned research and development and commercial operations. We do not presently have, nor do we expect in the near future to have, sufficient or consistent revenue to fund our business from our operations, and will need to obtain significant funding from external sources. Since inception, we have funded our operations primarily through equity and debt financings, and we expect to continue to rely on these sources of capital in the future. However, if we raise additional funds by issuing equity or convertible debt securities, our existing stockholders’ ownership will be diluted, and obtaining commercial loans would increase our liabilities and future cash commitments. If we pursue capital through alternative sources, such as collaborations or other similar arrangements, we may be forced to relinquish rights to our proprietary technology or other intellectual property that could result in our receipt of only a portion of any revenue that may be generated from a partnered product or business. Further, these or other sources of capital may not be available on commercially reasonable or acceptable terms when needed, or at all. If we cannot raise the money that we need in order to continue to operate and develop our business, we will be forced to delay, scale back or eliminate some or all of our operations. If any of these were to occur, there is a substantial risk that our business would fail and our stockholders could lose all of their investment. |
Basis of Presentation of Unaudited Condensed Financial Information | Basis of Presentation of Unaudited Condensed Financial Information The unaudited condensed financial statements of the Company for the nine months ended December 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, applied on a consistent basis, and pursuant to the requirements for reporting on Form 10-Q and the requirements of Regulation S-K and Regulation S-X promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete audited financial statements. However, the information included in these financial statements reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year or any future annual or interim period. The balance sheet information as of March 31, 2016 was derived from the audited financial statements as of and for the year ended March 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on June 24, 2016. These financial statements should be read in conjunction with that report. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The more significant estimates and assumptions by management include, among others, the fair value of equity instruments issued for services, and assumptions used in the valuation of our outstanding derivative liabilities. |
Accounts Receivable | Accounts Receivable The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding. The allowance for doubtful accounts and returns and discounts is established through a provision reducing the carrying value of receivables. At December 31, 2016, and March 31, 2016, the allowance for doubtful accounts and returns and discounts was approximately $35,500 and $17,517, respectively. |
Financial Assets and Liabilities Measured at Fair Value | Financial Assets and Liabilities Measured at Fair Value The Company accounts for the fair value of financial instruments in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) topic 820, “Fair Value Measurements and Disclosures” (ASC 820). ASC 820 defines “fair value” as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance provided by the FASB defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. Level 3 Unobservable inputs based on the Company’s assumptions. The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts payable and accrued liabilities, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The Company uses Level 2 inputs for its valuation methodology for the warrant derivative liabilities as their fair values were determined by using a probability weighted average Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. At December 31, 2016 and March 31, 2016, the Company’s balance sheet includes the fair value of derivative liabilities of $474,562 and $401,127, respectively, that were measured using level 2 measurements. The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC 815. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the December 31, 2016 reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Revenue Recognition | Revenue Recognition Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for products and/or services that have been delivered in the normal course of business, title has passed, the selling price is both fixed and determinable, and collectability is reasonably assured, all of which generally occurs upon shipment of the Company’s product or delivery of the product to the destination specified by the customer. The Company determines whether delivery has occurred based on when title transfers and the risks and rewards of ownership have transferred to the buyer, which usually occurs when the Company ships the products. The Company regularly reviews its customers’ financial positions to ensure that collectability is reasonably assured. Except for warranties, the Company has no post-sales obligations. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance of the FASB, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company’s statements of operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) available to common stockholders by the weighted average number of common shares during the period. Shares of restricted stock subject to vesting are included in basic weighted average common shares outstanding from the time they vest. Diluted EPS reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net income (loss) of the Company. In computing diluted EPS, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. As of December 31, 2016 potentially dilutive securities include options to acquire 2,427,488 shares of common stock and warrants to acquire 4,045,163 shares of common stock. As of December 31, 2015 potentially dilutive securities include options to acquire 899,167 shares of common stock and warrants to acquire 2,502,714 shares of common stock. The basic and fully diluted shares for the three and nine months ended December 31, 2016 are the same because the inclusion of the potential shares would have had an anti-dilutive effect. The basic and fully diluted shares for the three and nine months ended December 31, 2015 are the same because (i) for the three months ended December 31, 2015, the inclusion of the potential shares would have had an anti-dilutive effect and (ii) for the nine months ended December 31, 2015, there were no instruments that would result in issuance of additional shares using the treasury stock method |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, and ASU 2016-20 all of which clarify certain implementation guidance within ASU 2014-09. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. The standard can be adopted either retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company is currently in the process of analyzing the information necessary to determine the impact of adopting this new guidance on its financial position, results of operations, and cash flows. The Company will adopt the provisions of this statement in the quarter beginning April 1, 2018. In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this ASU require, among other things, that all income tax effects of awards be recognized in the income statement when the awards vest or are settled. The ASU also allows for an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and allows for a policy election to account for forfeitures as they occur. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any entity in any interim or annual period. The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Derivative Liability (Tables)
Derivative Liability (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Valuation Assumptions for Derivative Liabilities | As of March 31, 2016 and December 31, 2016, the derivative liabilities were valued using a probability weighted average Black-Scholes-Merton pricing model with the following assumptions: Warrants: December 31, 2016 March 31, 2016 Exercise Price $ 2.00 - 4.25 $ 3.00 - 4.50 Stock Price $ 3.00 $ 0.70 Risk-free interest rate 0.85 – 1.47 % 0.19 - 1.04 % Expected volatility 131.33 % 105.06 - 124.77 % Expected life (in years) 1.0 - 3.7 years 0.1 - 4.2 years Expected dividend yield 0 0 Fair Value: $ 474,562 $ 401,127 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Nonvested Restricted Stock Unit Activity | The following table summarizes restricted common stock activity: Number of Shares Non-vested shares, March 31, 2016 175,833 Granted 1,436,170 Vested (565,113 ) Forfeited (2,500 ) Non-vested shares, December 31, 2016 1,021,890 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity for the nine months ended December 31, 2016 is presented below: Shares Weighted Average Exercise Price Balance at March 31, 2016 907,500 $ 3.30 Granted 1,760,821 0.51 Exercised - - Expired (225,000 ) 3.73 Cancelled (15,833 ) 3.40 Balance outstanding at December 31, 2016 2,427,488 $ 1.08 Balance exercisable at December 31,2016 560,417 $ 2.60 |
Schedule of Options to Purchase Common Shares Outstanding | At December 31, 2016, options to purchase common shares were outstanding as follows: Number of options Weighted Average Exercise Price Weighted Average Grant-date Stock Price Options Outstanding, December 31, 2016 1,710,821 $ 0.50 $ 0.5 50,000 $ 0.96 $ 0.96 130,000 $ 1.00 $ 10.00 10,000 $ 1.50 $ 0.40 287,500 $ 2.00 - 2.70 $ 2.00 - 2.70 130,000 $ 3.10 - 3.80 $ 3.10 - 3.80 49,167 $ 4.00 - 4.70 $ 4.00 - 4.70 60,000 $ 5.10 $ 5.10 2,427,488 Options Exercisable, December 31,2016 130,000 $ 1.00 $ 10.00 5,000 $ 1.50 $ 0.40 211,250 $ 2.00 - 2.70 $ 2.00 - 2.70 108,334 $ 3.10 - 3.80 $ 3.10 - 3.80 45,833 $ 4.00 - 4.70 $ 4.00 - 4.70 60,000 $ 5.10 $ 5.10 560,417 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Summary of Warrant Activity | At December 31, 2016, warrants to purchase common shares were outstanding as follows: Shares Weighted Average Exercise Price Balance at March 31, 2016 2,002,718 $ 3.50 Granted 7,950,000 0.17 Exercised (5,657,555 ) 0.50 Expired (250,000 ) $ 4.00 Balance outstanding and exercisable at December 31, 2016 4,045,163 $ 0.65 |
Business and Summary of Signi20
Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | |
Stock split description | Reverse split of our outstanding common shares whereby each 10 shares of common stock will be exchanged for 1 share of common stock | ||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||
Net loss | $ 2,499,974 | $ 83,636 | $ 4,105,232 | $ (636,284) | |
Net cash used in operating activities | 883,627 | $ 1,473,226 | |||
Stockholders' deficiency | (681,198) | (681,198) | $ (518,165) | ||
Allowance for doubtful accounts receivable | 35,500 | 35,500 | 17,517 | ||
Fair value of derivative liabilities | $ 474,562 | $ 474,562 | $ 401,127 | ||
Stock Option [Member] | |||||
Antidilutive securities excluded from computation of earnings per share | 2,427,488 | 899,167 | |||
Warrant [Member] | |||||
Antidilutive securities excluded from computation of earnings per share | 4,045,163 | 2,502,714 | |||
Minimum [Member] | |||||
Common stock, shares authorized | 525,000,000 | 525,000,000 | |||
Maximum [Member] | |||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | 9 Months Ended | |
Dec. 31, 2016 | Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Fair value of derivative liabilities | $ 80,278 | $ 401,127 |
Extinguishment of derivative liability | 1,826,882 | |
Increase in fair value of the derivative liabilities | 1,980,592 | |
Derivative liability current | $ 474,562 | $ 401,127 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Valuation Assumptions for Derivative Liabilities (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Mar. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stock Price | $ 3 | $ 0.70 |
Expected volatility | 131.33% | |
Expected dividend yield | 0.00% | 0.00% |
Fair Value of Derivative Liability | $ 474,562 | $ 401,127 |
Minimum [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Exercise Price | $ 2 | $ 3 |
Risk-free interest rate | 0.85% | 0.19% |
Expected volatility | 105.06% | |
Expected life (in years) | 1 year | 1 month 6 days |
Maximum [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Exercise Price | $ 4.25 | $ 4.50 |
Risk-free interest rate | 1.47% | 1.04% |
Expected volatility | 124.77% | |
Expected life (in years) | 3 years 8 months 12 days | 4 years 2 months 12 days |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
May 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Proceeds from sale of common stock and warrants, net | $ 165,030 | $ 165,030 | $ 1,291,574 | |
Exercise price of warrants | $ 3.50 | |||
Shares issued, value | $ 99,970 | 165,030 | ||
Accumulated vested balance of stock | 846,715 | $ 611,216 | ||
Shares vested | 235,499 | |||
Stock-based compensation expense not yet recognized | $ 513,000 | |||
Stock based compensation expense vesting period | 1 year 3 months | |||
Officer [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued as part of private placement | 1,436,170 | |||
Fair value of shares issued | $ 718,000 | |||
Stock based compensation expense vesting period | 1 year 9 months | |||
Director [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued as part of private placement | 1,436,170 | |||
Fair value of shares issued | $ 718,000 | |||
Stock based compensation expense vesting period | 1 year 9 months | |||
Securities Purchase Agreement Warrants [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued as part of private placement | 2,650,000 | |||
Number of shares called by exercise of warrants | 7,950,000 | |||
Shares issued, price per share | $ 0.10 | |||
Proceeds from sale of common stock and warrants, net | $ 265,000 | |||
Exercise price of warrants | $ 0.17 | |||
Warrant expire date | Feb. 4, 2017 |
Equity - Schedule of Nonvested
Equity - Schedule of Nonvested Restricted Stock Unit Activity (Details) - Restricted Stock [Member] | 9 Months Ended |
Dec. 31, 2016shares | |
Non-vested shares, Beginning Balance | 175,833 |
Granted | 1,436,170 |
Vested | (563,113) |
Forfeited | (2,500) |
Non-vested shares, Ending Balance | 1,021,890 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 9 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of option issued to purchase common stock | 1,760,821 | |
Exercise Price, option Granted | $ 0.51 | |
Option vesting period | 1 year 3 months | |
Stock-based compensation, options vested | $ 581,510 | $ 186,447 |
Unamortized cost of outstanding stock-based awards | $ 1,145,699 | |
Weighted average remaining vesting period | 2 years | |
Exercisable stock options , intrinsic value | $ 5,000,000 | $ 450,000 |
Employees [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of option issued to purchase common stock | 1,618,262 | |
Exercise Price, option Granted | $ 0.50 | |
Option expiration years | 10 years | |
Option vesting period | 24 months | |
Option, volatility rate | 126.34% | |
Option, discount rate | 1.60% | |
Option, expected dividend rate | 0.00% | |
Option, expected term | 6 years | |
Options outstanding, intrinsic value | $ 775,000 | |
Amortization of stock option | $ 179,000 | |
One Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of option issued to purchase common stock | 142,559 | |
Exercise Price, option Granted | $ 0.50 | |
Option expiration years | 10 years | |
Option vesting period | 24 months | |
Option, volatility rate | 126.34% | |
Option, discount rate | 1.36% | |
Option, expected dividend rate | 0.00% | |
Option, expected term | 10 years | |
Options outstanding, intrinsic value | $ 146,000 | |
Two Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of option issued to purchase common stock | 142,559 | |
Exercise Price, option Granted | $ 0.96 | |
Option expiration years | 10 years | |
Option vesting period | 24 months | |
Option, volatility rate | 126.34% | |
Option, discount rate | 1.36% | |
Option, expected dividend rate | 0.00% | |
Option, expected term | 10 years | |
Options outstanding, intrinsic value | $ 146,000 | |
Non Employees [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Amortization of stock option | 85,880 | |
Stock-based compensation, options vested | $ 417,000 | |
Fair value of stock option, shares | 142,559 |
Stock Options - Summary of Stoc
Stock Options - Summary of Stock Option Activity (Details) | 9 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Shares, beginning balance outstanding | shares | 907,500 |
Shares, Granted | shares | 1,760,821 |
Shares, Exercised | shares | |
Shares, Expired | shares | (225,000) |
Shares, Cancelled | shares | (15,833) |
Shares, ending balance outstanding | shares | 2,427,488 |
Shares, Balance exercisable | shares | 560,417 |
Weighted Average Exercise Price, beginning balance outstanding | $ / shares | $ 3.30 |
Weighted Average Exercise Price, Granted | $ / shares | 0.51 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Expired | $ / shares | 3.73 |
Weighted Average Exercise Price, Cancelled | $ / shares | 3.40 |
Weighted Average Exercise Price, ending balance outstanding | $ / shares | 1.08 |
Weighted Average Exercise Price, Balance exercisable | $ / shares | $ 2.60 |
Stock Options - Schedule of Opt
Stock Options - Schedule of Options to Purchase Common Shares Outstanding (Details) - $ / shares | 9 Months Ended | |
Dec. 31, 2016 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 2,427,488 | 907,500 |
Weighted average exercise price, options outstanding | $ 1.08 | $ 3.30 |
Weighted average grant-date stock price, options outstanding | $ 0.51 | |
Number of options exercisable | 560,417 | |
Weighted average exercise price, options exercisable | $ 2.60 | |
Stock Options One [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 1,710,821 | |
Weighted average exercise price, options outstanding | $ 0.50 | |
Weighted average grant-date stock price, options outstanding | $ 0.5 | |
Number of options exercisable | 130,000 | |
Weighted average exercise price, options exercisable | $ 1 | |
Weighted average grant-date stock price, options exercisable | $ 10 | |
Stock Options Two [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 50,000 | |
Weighted average exercise price, options outstanding | $ 0.96 | |
Weighted average grant-date stock price, options outstanding | $ 0.96 | |
Number of options exercisable | 5,000 | |
Weighted average exercise price, options exercisable | $ 1.50 | |
Weighted average grant-date stock price, options exercisable | $ 0.40 | |
Stock Options Three [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 130,000 | |
Weighted average exercise price, options outstanding | $ 1 | |
Weighted average grant-date stock price, options outstanding | $ 10 | |
Number of options exercisable | 211,250 | |
Stock Options Three [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options exercisable | $ 2 | |
Weighted average grant-date stock price, options exercisable | 2 | |
Stock Options Three [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options exercisable | 2.70 | |
Weighted average grant-date stock price, options exercisable | $ 2.70 | |
Stock Options Four [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 10,000 | |
Weighted average exercise price, options outstanding | $ 1.50 | |
Weighted average grant-date stock price, options outstanding | $ 0.40 | |
Number of options exercisable | 108,334 | |
Stock Options Four [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options exercisable | $ 3.10 | |
Weighted average grant-date stock price, options exercisable | 3.10 | |
Stock Options Four [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options exercisable | 3.80 | |
Weighted average grant-date stock price, options exercisable | $ 3.80 | |
Stock Options Five [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 287,500 | |
Number of options exercisable | 45,833 | |
Stock Options Five [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options outstanding | $ 2 | |
Weighted average grant-date stock price, options outstanding | 2 | |
Weighted average exercise price, options exercisable | 4 | |
Weighted average grant-date stock price, options exercisable | 4 | |
Stock Options Five [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options outstanding | 2.70 | |
Weighted average grant-date stock price, options outstanding | 2.70 | |
Weighted average exercise price, options exercisable | 4.70 | |
Weighted average grant-date stock price, options exercisable | $ 4.70 | |
Stock Options Six [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 130,000 | |
Number of options exercisable | 60,000 | |
Weighted average exercise price, options exercisable | $ 5.10 | |
Weighted average grant-date stock price, options exercisable | 5.10 | |
Stock Options Six [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options outstanding | 3.10 | |
Weighted average grant-date stock price, options outstanding | 3.10 | |
Stock Options Six [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options outstanding | 3.80 | |
Weighted average grant-date stock price, options outstanding | $ 3.80 | |
Stock Options Seven [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 49,167 | |
Stock Options Seven [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options outstanding | $ 4 | |
Weighted average grant-date stock price, options outstanding | 4 | |
Stock Options Seven [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price, options outstanding | 4.70 | |
Weighted average grant-date stock price, options outstanding | $ 4.70 | |
Stock Options Eight [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options outstanding | 60,000 | |
Weighted average exercise price, options outstanding | $ 5.10 | |
Weighted average grant-date stock price, options outstanding | $ 5.10 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | Aug. 25, 2014 | May 31, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise price of warrants | $ 3.50 | |||||
Stock-based compensation expense | $ 235,499 | $ 152,701 | ||||
Fair value of warrants vesting | $ 614,846 | |||||
Fair value of accumulated amortization warrants, vested | 235,499 | |||||
Proceeds from warrant holders | $ 777,000 | |||||
Common stock issued upon exercise of warrants, shares | 4,750,590 | |||||
Class of Warrant or Right, Unissued | 1,086,965 | 1,086,965 | ||||
Warrants exchanged for common stock | 454,364 | 454,364 | ||||
Aggregate intrinsic value of all outstanding and exercisable warrants | $ 9,750,000 | $ 0 | ||||
Employment Contracts [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares called by exercise of warrants | 440,000 | |||||
Exercise price of warrants | $ 3 | |||||
Warrant expiration period | 10 years | |||||
Fair value of warrants vesting | $ 705,880 | |||||
Number of warrant shares up on achievement | 160,000 | 160,000 | ||||
Employment Contracts [Member] | Share Based Compensation Award Tranche One [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares called by exercise of warrants | 80,000 | |||||
Employment Contracts [Member] | Share Based Compensation Award Tranche Two [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares called by exercise of warrants | 200,000 | |||||
Employment Contracts [Member] | Share Based Compensation Award Tranche Two [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Warrant expiration period | 1 year | |||||
Employment Contracts [Member] | Share Based Compensation Award Tranche Two [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Warrant expiration period | 3 years | |||||
Securities Purchase Agreement Warrants [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares called by exercise of warrants | 7,950,000 | |||||
Exercise price of warrants | $ 0.17 | |||||
Warrant expiration date | Feb. 4, 2017 | |||||
Warrant [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair value of accumulated amortization warrants, vested | $ 649,860 | $ 614,846 | ||||
Amortization of vested warrants | $ 0 |
Warrants - Summary of Warrant A
Warrants - Summary of Warrant Activity (Details) | 9 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Warrants and Rights Note Disclosure [Abstract] | |
Shares, Beginning balance | shares | 2,002,718 |
Shares, Granted | shares | 7,950,000 |
Shares, Exercised | shares | (5,657,555) |
Shares, Expired | shares | (250,000) |
Shares, outstanding and exercisable | shares | 4,045,163 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 3.50 |
Weighted Average Exercise Price, Granted | $ / shares | 0.17 |
Weighted Average Exercise Price, Exercised | $ / shares | 0.50 |
Weighted Average Exercise Price, Expired | $ / shares | 4 |
Weighted Average Exercise Price, Outstanding and Exercisable Balance | $ / shares | $ 0.65 |
Related Party Transactions an30
Related Party Transactions and Lease Obligations (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Apr. 23, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leased Assets [Line Items] | |||
Operating leases, net rent expense | $ 0 | $ 15,800 | |
Carlson Lease [Member] | |||
Operating Leased Assets [Line Items] | |||
Payments for rent per month | $ 2,300 | ||
Security deposit | $ 1,500 | ||
Lease expiration date | May 1, 2017 |
Distribution and License Agre31
Distribution and License Agreements (Details Narrative) - USD ($) | Aug. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 |
Common stock shares issued | 17,348,372 | 17,348,372 | 7,911,708 | ||
Fair value of common stock amortized | $ 235,499 | ||||
Options vesting period | 1 year 3 months | ||||
Fair value of warrant | $ 147,059 | ||||
Warrant [Member] | |||||
Fair value of common stock amortized | $ 649,860 | 614,846 | |||
Accumulated amortization of shares | 649,860 | 649,860 | |||
License Agreements [Member] | |||||
Common stock shares issued | 1,400,000 | ||||
Fair value of common stock amortized | $ 420,000 | ||||
Options vesting period | 3 years | ||||
Accumulated amortization of shares | $ 395,000 | $ 395,000 | |||
Number of warrant to purchase shares | 440,000 | 440,000 | |||
Fair value of warrant | $ 705,880 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 9 Months Ended | |
Dec. 31, 2016 | Jan. 30, 2017 | |
Common stock issued for services, value | $ 276,000 | |
Options vesting period | 1 year 3 months | |
Subsequent Event [Member] | January And Feburuary 2017 [Member] | ||
Warrants to purchase common stock | 1,056,038 | |
Subsequent Event [Member] | January And Feburuary 2017 [Member] | One Employee [Member] | ||
Options to purchase common stock | 400,000 | |
Subsequent Event [Member] | January And Feburuary 2017 [Member] | Three Consultant [Member] | ||
Options to purchase common stock, value | $ 948,000 | |
Options vesting period | 24 months | |
Share exercise price, lower limit | $ 2.34 | |
Share exercise price, upper limit | $ 2.79 | |
Options expiration period | 10 years | |
Subsequent Event [Member] | Feburuary 2017 [Member] | ||
Common stock issued for services, shares | 37,500 | |
Common stock issued for services, value | $ 87,750 |