Stockholders' Equity | 9 Months Ended |
Dec. 31, 2013 |
Equity [Abstract] | ' |
Stockholders' Equity | ' |
Note 9. Stockholders’ Equity |
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During prior periods we issued 1,850,000 shares of our common stock to non-employees for various consulting services. Pursuant to the guidance in ASC Topic 505-50, Equity Based Payments to Non-Employees (“ASC 505-50”), the shares issued are being amortized over the periods of the contracts which range from one to two years. The shares were valued at the market price on the date of grant. The aggregate value of the shares previously issued was $596,500. The unamortized balance of $12,500, representing the vested portion not yet expensed, is included in prepaid expenses at December 31, 2013. |
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During the nine months ended December 31, 2013, we terminated a contract with a non-employee. All previously unvested stock option expense attributed to the non-employee, in the amount of $14,747 was reversed and credited to general and administrative expenses |
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We have consulting contracts which provide for the potential issuance of an additional 1,350,000 shares of our common stock at prices to be determined in the future. The contracts contain performance commitments relating to future revenue and/or earnings. There are not significantly large disincentives for nonperformance to make the achievement of the goals probable. None of the goals were achieved as of December 31, 2013, and in accordance with the guidance ASC 505-50, no expense was recognized for these future grants. |
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Certain previously granted restricted stock rights and stock options were subject to performance conditions. As a result of the employee termination the performance conditions will not be met. In accordance with ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), previously recognized unvested equity based compensation cost of $103,488 has been reversed during the nine months ended December 31, 2013. |
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During the period from December 31, 2012 through May 9, 2013, we completed an offering of common stock units at a price of $0.25 per unit. Each unit consists of one share of common stock and a three year warrant to purchase one-half (1/2) share of our common stock at an exercise price of $0.50 per share (“Unit” or “Units”). We sold 3,200,000 units representing 3,200,000 shares and warrants to purchase 1,600,000 shares for total consideration of $800,000 less $17,500 in cost, for a net amount received of $782,500. |
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The fair value of the warrants, $266,673, was estimated at the date of grant using the Black-Scholes option pricing model, with an allocation of the proceeds applied to the warrants. The difference between the warrant allocation and the proceeds was allocated to the shares of common stock issued. The fair value of the warrants has been included in the total additional paid in capital. The following assumptions were used in the Black-Scholes option pricing model: |
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Expected life (in years) | | | 3 | | | | | | | | | | | | | |
Volatility (based on a comparable company) | | | 100 | % | | | | | | | | | | | | |
Risk Free interest rate | | | 0.36 | % | | | | | | | | | | | | |
Dividend yield (on common stock) | | | - | | | | | | | | | | | | | |
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During July and August 2013 we completed an offering of common stock units at a price of $0.25 per unit. Each unit consists of one share of common stock, a three-year warrant to purchase one share of our common stock at an exercise price of $0.25 per share (which may be exercised on a cashless basis), and a five-year warrant to purchase one-half (1/2) share of our common stock at an exercise price of $0.50 per share (“Unit” or “Units) for total consideration of $1,906,500 less $267,645 in cost for a net amount received of $1,638,855. |
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The fair value of the warrants, estimated at the date of grant using the Black-Scholes option pricing model was $3,089,919. The estimated value was higher than the proceeds received from the sale of the units. Accordingly, the proceeds received less the par value of the common stock, has been included in the total additional paid in capital. The following assumptions were used in the Black-Scholes option pricing model: |
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Expected life (in years) | | | 3 - 5 | | | | | | | | | | | | | |
Volatility (based on a comparable company) | | | 87 - 106 | % | | | | | | | | | | | | |
Risk Free interest rate | | | 0.67 - 1.38 | % | | | | | | | | | | | | |
Dividend yield (on common stock) | | | - | | | | | | | | | | | | | |
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The following is a summary of outstanding stock options issued to employees as of December 31, 2013 |
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| | Number of | | | Exercise | | | Average | | | Aggregate | |
Options | price | remaining | intrinsic value |
| per share | term in years | at date of grant |
Outstanding March 31, 2013 | | | 625,000 | | | $ | 1 | | | | 2.23 | | | $ | - | |
Cancelled | | | (625,000 | ) | | | - | | | | - | | | | - | |
Outstanding December 31, 2013 | | | - | | | | - | | | | - | | | | - | |
Exercisable | | | - | | | $ | - | | | | - | | | $ | - | |