Document And Entity Information
Document And Entity Information - USD ($) | 3 Months Ended | ||
Jun. 30, 2017 | Jun. 28, 2017 | Sep. 30, 2016 | |
Aggregate maximum liquidated damages amount | |||
Entity Registrant Name | Aethlon Medical Inc | ||
Entity Central Index Key | 882,291 | ||
Document Type | S-1/A | ||
Document Period End Date | Jun. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 27,000,000 | ||
Entity Common Stock, Shares Outstanding | 8,869,571 | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
CURRENT ASSETS | |||
Cash | $ 327,206 | $ 1,559,701 | $ 2,123,737 |
Accounts receivable | 0 | 199,471 | |
Prepaid expenses and other current assets | 38,450 | 37,551 | 53,294 |
TOTAL CURRENT ASSETS | 365,656 | 1,597,252 | 2,376,502 |
Property and equipment, net | 45,893 | 29,223 | 36,038 |
Patents, net | 82,705 | 84,996 | 94,161 |
Deposits | 14,897 | 14,897 | 22,415 |
TOTAL ASSETS | 509,151 | 1,726,368 | 2,529,116 |
CURRENT LIABILITIES | |||
Accounts payable | 277,094 | 484,423 | 244,804 |
Due to related parties | 48,366 | 57,866 | 145,112 |
Other current liabilities | 82,845 | 69,467 | 136,695 |
TOTAL CURRENT LIABILITIES | 408,305 | 611,756 | 526,611 |
Convertible notes payable, net | 1,050,911 | 519,200 | 500,139 |
TOTAL LIABILITIES | 1,459,216 | 1,130,956 | 1,026,750 |
COMMITMENTS AND CONTINGENCIES (Note 12) | |||
STOCKHOLDERS' EQUITY | |||
Common stock, $0.001 par value, 30,000,000 shares authorized at March 31, 2017 and 2016; 8,797,086 and 7,622,393 issued and outstanding at March 31, 2017 and 2016, respectively | 8,869 | 8,796 | 7,621 |
Additional paid-in capital | 94,745,740 | 94,445,739 | 88,047,142 |
Accumulated deficit | (95,619,939) | (93,778,156) | (86,502,043) |
TOTAL AETHLON MEDICAL, INC STOCKHOLDERS' EQUITY BEFORE NONCONTROLLING INTERESTS | (865,330) | 676,379 | 1,552,720 |
NONCONTROLLING INTERESTS | (84,735) | (80,967) | (50,354) |
TOTAL STOCKHOLDERS' EQUITY | (950,065) | 595,412 | 1,502,366 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 509,151 | $ 1,726,368 | $ 2,529,116 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Stockholders' Deficit | |||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ .001 |
Common stock shares authorized | 30,000,000 | 30,000,000 | 30,000,000 |
Common stock issued | 8,869,571 | 8,797,086 | 7,622,393 |
Common stock outstanding | 8,869,571 | 8,797,086 | 7,622,393 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
REVENUES: | ||||
Government contract revenue | $ 0 | $ 4,635 | $ 392,073 | $ 886,572 |
Total revenues | 0 | 4,635 | 392,073 | 886,572 |
OPERATING EXPENSES | ||||
Professional fees | 343,023 | 567,749 | 2,161,592 | 2,259,096 |
Payroll and related expenses | 630,227 | 344,987 | 3,479,347 | 2,083,297 |
General and administrative | 186,999 | 223,551 | 849,491 | 929,013 |
Total operating expenses | 1,160,249 | 1,136,287 | 6,490,430 | 5,271,406 |
OPERATING LOSS | (1,160,249) | (1,131,652) | (6,098,357) | (4,384,834) |
OTHER (INCOME) EXPENSE | ||||
Loss on share for warrant exchanges | 119,789 | 0 | ||
Loss on debt extinguishment | 376,909 | 616,889 | 558,198 | 0 |
Warrant repricing expense | 0 | 345,841 | 345,841 | 0 |
Interest and other expenses | 188,604 | 42,167 | 304,330 | 573,782 |
Total other expenses | 685,302 | 1,004,897 | 1,208,369 | 573,782 |
NET LOSS BEFORE NONCONTROLLING INTERESTS | (1,845,551) | (2,136,549) | (7,306,726) | (4,958,616) |
LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (3,769) | (7,732) | (30,613) | (86,287) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (1,841,782) | $ (2,128,817) | $ (7,276,113) | $ (4,872,329) |
Basic and diluted net loss per share available to common stockholders (Note 1) | $ (.21) | $ (.28) | $ (.94) | $ (0.66) |
Weighted average number of common shares outstanding - basic and diluted (Note 1) | 8,805,522 | 7,622,393 | 7,764,237 | 7,393,695 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance, shares at Mar. 31, 2015 | 6,657,046 | ||||
Beginning balance, value at Mar. 31, 2015 | $ 6,657 | $ 82,238,507 | $ (81,629,714) | $ 35,933 | $ 651,383 |
Issuance of common stock for cash, shares | 959,140 | ||||
Issuance of common stock for cash, value | $ 958 | 5,605,797 | 5,606,755 | ||
Loss on debt extinguishment | 0 | ||||
Issuance of common stock under cashless warrant exercises, shares | 5,292 | ||||
Issuance of common stock under cashless warrant exercises, value | $ 5 | (5) | |||
Issuance of common stock due to rounding up from reverse split, shares | 915 | ||||
Issuance of common stock due to rounding up from reverse split, value | $ 1 | (1) | |||
Stock-based compensation expense | 202,844 | 202,844 | |||
Net loss | (4,872,329) | (86,287) | (4,958,616) | ||
Ending balance, shares at Mar. 31, 2016 | 7,622,393 | ||||
Ending balance, value at Mar. 31, 2016 | $ 7,621 | 88,047,142 | (86,502,043) | (50,354) | 1,502,366 |
Issuance of common stock for cash, shares | 216,078 | ||||
Issuance of common stock for cash, value | $ 216 | 954,889 | 955,105 | ||
Issuances of common stock and warrants under registered direct financing, shares | 773,000 | ||||
Issuances of common stock and warrants under registered direct financing, value | $ 773 | 1,803,477 | 1,804,250 | ||
Issuances of common stock under conversions of convertible notes and related accrued interest, shares | 33,091 | ||||
Issuances of common stock under conversions of convertible notes and related accrued interest, value | $ 33 | 144,686 | 144,719 | ||
Loss on debt extinguishment | 558,198 | 558,198 | |||
Debt discount on convertible notes payable | 783,868 | 783,868 | |||
Repurchase of restricted stock units, shares | 149,864 | ||||
Repurchase of restricted stock units, value | $ 150 | (378,668) | (378,518) | ||
Exercise of cashless warrants, shares | 2,660 | ||||
Exercise of cashless warrants, value | $ 3 | (3) | |||
Stock-based compensation expense | 2,186,309 | 2,186,309 | |||
Net loss | (7,276,113) | (30,613) | (7,306,726) | ||
Ending balance, shares at Mar. 31, 2017 | 8,797,086 | ||||
Ending balance, value at Mar. 31, 2017 | $ 8,796 | $ 94,445,739 | $ (93,778,156) | $ (80,967) | 595,412 |
Loss on debt extinguishment | 376,909 | ||||
Net loss | (1,845,551) | ||||
Ending balance, value at Jun. 30, 2017 | $ (950,065) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||||
Net loss | $ (1,845,551) | $ (2,136,549) | $ (7,306,726) | $ (4,958,616) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 9,326 | 10,218 | 32,413 | 38,524 |
Warrant repricing expense | 0 | 345,841 | 345,841 | 0 |
Loss on debt conversion | 376,909 | 616,889 | 558,198 | 0 |
Stock based compensation | 280,911 | 50,710 | 2,186,309 | 202,844 |
Amortization of debt discount and deferred financing costs | 154,802 | 27,641 | 220,439 | 517,233 |
Common stock issued for services | 33,600 | 0 | ||
Loss on share for warrant exchanges | 119,789 | 0 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 0 | 199,471 | 199,471 | (6,130) |
Prepaid expenses and other current assets | (899) | 30,462 | 15,743 | 19,841 |
Other assets | 7,518 | (95,638) | ||
Accounts payable and other current liabilities | (193,951) | 144,246 | 322,140 | (46,365) |
Due to related parties | (9,500) | (116,862) | (87,246) | (1,000) |
Net cash used in operating activities | (1,074,564) | (827,933) | (3,505,900) | (4,329,307) |
Cash flows from investing activities: | ||||
Purchases of property and equipment | (23,705) | (1,545) | (16,433) | (9,307) |
Net cash used in investing activities | (23,705) | (1,545) | (16,433) | (9,307) |
Cash flows from financing activities: | ||||
Cash paid for repurchase of restricted stock units | (136,129) | 0 | (378,518) | 0 |
Proceeds from the issuance of convertible notes payable | 577,460 | 0 | ||
Net proceeds from the issuance of common stock and warrants | 1,903 | 0 | 2,759,355 | 5,606,755 |
Net cash provided by financing activities | (134,226) | 0 | 2,958,297 | 5,606,755 |
Net increase (decrease) in cash | (1,232,495) | (829,478) | (564,036) | 1,268,141 |
Cash at beginning of year | 1,559,701 | 2,123,737 | 2,123,737 | 855,596 |
Cash at end of year | 327,206 | 1,294,259 | 1,559,701 | 2,123,737 |
Supplement information for non-cash investing and financing activities: | ||||
Conversion of debt, accrued liabilities and accrued interest to common stock | 144,719 | 0 | ||
Reclassification of accrued interest to convertible notes payable | 0 | 85,031 | 85,031 | 0 |
Issuance of shares for warrants | 198 | 0 | ||
Issuance of shares under vested restricted stock units | 22 | 0 | 150 | 0 |
Issuance of shares under cashless warrant exercises | 3 | 5 | ||
Debt discount on convertible notes payable | $ 242,299 | $ 75,994 | $ 783,868 | $ 0 |
1. ORGANIZATION, LIQUIDITY AND
1. ORGANIZATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
ORGANIZATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION Aethlon Medical, Inc. and subsidiary (“Aethlon”, the “Company”, “we” or “us”) is a medical device company focused on creating innovative devices that address unmet medical needs in in global health and biodefense. We create medical technologies to address unmet needs in global health and biodefense. The Aethlon Hemopurifier® is a clinical-stage therapeutic device that eliminates life-threatening viruses from the circulatory system of infected individuals. We believe the Aethlon Hemopurifier® can achieve the broad-spectrum countermeasure goal set forth by the U.S. Department of Health and Human Services (HHS). The device has been validated to capture Ebola, Zika, Lassa, MERS-CoV, HIV, Hepatitis C, Cytomegalovirus, Epstein-Barr, Herpes Simplex, Chikungunya, Dengue, West Nile, Smallpox related viruses, H1N1 Swine Flu, H5N1 Bird Flu, and the reconstructed Spanish flu virus of 1918. At present, the Hemopurifier is being advanced under an FDA approved clinical study. Aethlon is also the majority owner of Exosome Sciences, Inc., a company focused on the discovery of exosomal biomarkers to diagnose and monitor life-threatening diseases. On June 25, 2013, the United States Food and Drug Administration (FDA) approved an Investigational Device Exemption (IDE) that allows us to initiate human feasibility studies of the Aethlon Hemopurifier® in the U.S. We ended the treatment phase of that study after treating eight end-stage renal disease patients who were infected with the Hepatitis C virus (HCV) to demonstrate the safety of Hemopurifier therapy. Successful completion of this study, including submission to and acceptance by the FDA of the final study documents and related patient treatment data, will allow us the opportunity to initiate pivotal studies that are required for market clearance to treat HCV and other disease conditions in the U.S. Successful outcomes of human trials will also be required by the regulatory agencies of certain foreign countries where we intend to sell this device. Some of our patents may expire before FDA approval or approval in a foreign country, if any, is obtained. However, we believe that certain patent applications and/or other patents issued more recently will help protect the proprietary nature of the Hemopurifier(R) treatment technology. In October 2013, our subsidiary, Exosome Sciences, Inc. (“ESI”), commenced operations with a focus on advancing exosome-based strategies to diagnose and monitor the progression of cancer, infectious disease and other life-threatening conditions. Our common stock is quoted on the Nasdaq Capital Market under the symbol “AEMD.” SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES During the three months ended June 30, 2017, there have been no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of the Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto for the year ended March 31, 2017, included in the Company's Annual Report on Form 10-K filed with the SEC on June 28, 2017. The accompanying unaudited condensed consolidated financial statements include the accounts of Aethlon Medical, Inc. and its majority-owned subsidiary. All significant inter-company transactions and balances have been eliminated in consolidation. The unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the condensed consolidated financial statements as of and for the three months ended June 30, 2017, and the condensed consolidated statement of cash flows for the three months ended June 30, 2017. Estimates were made relating to useful lives of fixed assets, valuation allowances, the fair value of warrants, impairment of assets, share-based compensation expense and accruals for clinical trial and research and development expenses. Actual results could differ materially from those estimates. Certain amounts previously reported in the financial statements have been reclassified to conform to the current presentation. Such reclassifications did not affect net loss, equity or cash flows. The accompanying condensed consolidated balance sheet at March 31, 2017 has been derived from the audited consolidated balance sheet at March 31, 2017, contained in the above referenced 10-K. The results of operations for the three months ended June 30, 2017 are not necessarily indicative of the results to be expected for the full year or any future interim periods. On March 31, 2016, we filed a Certificate of Amendment to our Articles of Incorporation to increase our authorized common stock from 10,000,000 to 30,000,000 shares. Our stockholders approved the amendment at our annual meeting of stockholders held on March 29, 2016. | ORGANIZATION We create medical technologies to address unmet needs in global health and biodefense. The Aethlon Hemopurifier® is a clinical-stage therapeutic device that eliminates life-threatening viruses from the circulatory system of infected individuals. We believe the Aethlon Hemopurifier® can achieve the broad-spectrum countermeasure goal set forth by the U.S. Department of Health and Human Services (HHS). The device has been validated to capture Ebola, Zika, Lassa, MERS-CoV, HIV, Hepatitis C, Cytomegalovirus, Epstein-Barr, Herpes Simplex, Chikungunya, Dengue, West Nile, Smallpox related viruses, H1N1 Swine Flu, H5N1 Bird Flu, and the reconstructed Spanish flu virus of 1918. At present, the Hemopurifier® is being advanced under an FDA approved clinical study. Aethlon is also the majority owner of Exosome Sciences, Inc., a company focused on the discovery of exosomal biomarkers to diagnose and monitor life-threatening diseases. Aethlon Medical, Inc. and subsidiary (“Aethlon”, the “Company”, “we” or “us”) is a medical device company focused on creating innovative devices that address unmet medical needs in in global health and biodefense. The Aethlon Hemopurifier® is a clinical-stage therapeutic device that eliminates life-threatening viruses from the circulatory system of infected individuals. On June 25, 2013, the United States Food and Drug Administration (FDA) approved an Investigational Device Exemption (IDE) that allows us to initiate human feasibility studies of the Aethlon Hemopurifier® in the U.S. We ended the treatment phase of the study after treating eight end-stage renal disease patients who were infected with the Hepatitis C virus (HCV) to demonstrate the safety of Hemopurifier therapy. Successful completion of this study will allow us the opportunity to initiate pivotal studies that are required for market clearance to treat HCV and other disease conditions in the U.S. Successful outcomes of human trials will also be required by the regulatory agencies of certain foreign countries where we intend to sell this device. Some of our patents may expire before FDA approval or approval in a foreign country, if any, is obtained. However, we believe that certain patent applications and/or other patents issued more recently will help protect the proprietary nature of the Hemopurifier(R) treatment technology. In October 2013, our subsidiary, Exosome Sciences, Inc. (“ESI”), commenced operations with a focus on advancing exosome-based strategies to diagnose and monitor the progression of cancer, infectious disease and other life-threatening conditions. Our common stock is quoted on the Nasdaq Capital Market under the symbol “AEMD.” REVERSE STOCK SPLIT On April 14, 2015, the Company completed a 1-for-50 reverse stock split. Accordingly, authorized common stock was reduced from 500,000,000 shares to 10,000,000 shares, and each 50 shares of outstanding common stock held by stockholders were combined into one share of common stock. The accompanying consolidated financial statements and accompanying notes have been retroactively revised to reflect such reverse stock split as if it had occurred on April 1, 2014. All shares and per share amounts have been revised accordingly. LIQUIDITY AND GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. We have incurred continuing losses from operations and at March 31, 2017 had an accumulated deficit of approximately $93,778,000. These factors, among other matters, raise substantial doubt about our ability to continue as a going concern. A significant amount of additional capital will be necessary to advance the development of our products to the point at which they may become commercially viable. We intend to fund operations, working capital and other cash requirements for the fiscal year ending March 31, 2018 through debt and/or equity financing arrangements. We are currently addressing our liquidity issue by seeking additional investment capital through issuances of common stock under our existing S-3 registration statement and by applying for additional grants issued by government agencies in the United States. We believe that our cash on hand and funds expected to be received from additional debt and equity financing arrangements will be sufficient to meet our liquidity needs for fiscal 2018. However, no assurance can be given that we will receive any funds in addition to the funds we have received to date. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. We are continuing to pursue external financing alternatives to improve our working capital position. If we are unable to obtain the necessary capital, we may have to cease operations. The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results. The consolidated financial statements do not include any adjustments related to this uncertainty and as to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of Aethlon Medical, Inc. and its majority-owned (80% ownership) and controlled subsidiary, Exosome Sciences, Inc. (ESI). All significant intercompany balances and transactions have been eliminated in consolidation. The Company has classified the (20% ownership) noncontrolling interests in ESI as part of consolidated net loss in the fiscal years ended March 31, 2017 and 2016 and includes the accumulated amount of noncontrolling interests as part of equity. The losses at ESI during the fiscal year ended March 31, 2017 reduced the noncontrolling interests on our consolidated balance sheet by $30,613 from $(50,354) at March 31, 2016 to $(80,967) at March 31, 2017. RISKS AND UNCERTAINTIES We operate in an industry that is subject to intense competition, government regulation and rapid technological change. Our operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory, and including the potential risk of business failure. USE OF ESTIMATES We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, realization of long-lived assets, valuation of derivative liabilities, estimating fair value associated with debt and equity transactions and valuation of deferred tax assets. Actual results, whether in the near, medium or long term future, could differ from those estimates. CASH AND CASH EQUIVALENTS Accounting standards define “cash and cash equivalents” as any short-term, highly liquid investment that is both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. For the purpose of financial statement presentation, we consider all highly liquid investment instruments with original maturities of three months or less when purchased, or any investment redeemable without penalty or loss of interest to be cash equivalents. As of March 31, 2017 and 2016, we had no assets that were classified as cash equivalents. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount of our cash, accounts receivable, accounts payable, and other current liabilities approximates their estimated fair values due to the short-term maturities of those financial instruments. The carrying amount of the notes payable approximates their fair value due to the short maturity of the notes and since the interest rates approximate current market interest rates for similar instruments. Management has concluded that it is not practical to determine the estimated fair value of amounts due to related parties because the transactions cannot be assumed to have been consummated at arm's length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practicable due to the lack of data regarding similar instruments, if any, and the associated potential costs. We follow Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) in connection with financial assets and liabilities measured at fair value on a recurring basis subsequent to initial recognition. ASC 820 requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. We do not have any assets or liabilities that are measured at fair value on a recurring basis and, during the years ended March 31, 2017 and 2016, and did not have any assets or liabilities that were measured at fair value on a nonrecurring basis. CONCENTRATIONS OF CREDIT RISKS Cash is maintained at one financial institution in checking accounts and related cash management accounts. Accounts at this institution are secured by the Federal Deposit Insurance Corporation up to $250,000. Our March 31, 2017 cash balances were approximately $1,308,000 over such insured amount. We do not believe that the Company is exposed to any significant risk with respect to its cash. All of our accounts receivable at March 31, 2017 and 2016 and all of our revenue in the fiscal years ended March 31, 2017 and 2016 were directly from the U.S. Department of Defense or from a subcontract under Battelle, which is a prime contractor with the U.S. Department of Defense. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from two to five years. Repairs and maintenance are charged to expense as incurred while improvements are capitalized. Upon the sale or retirement of property and equipment, the accounts are relieved of the cost and the related accumulated depreciation with any gain or loss included in the consolidated statements of operations. INCOME TAXES Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the difference between the consolidated financial statements and their respective tax basis. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts reported for income tax purposes, and (b) tax credit carryforwards. We record a valuation allowance for deferred tax assets when, based on our best estimate of taxable income (if any) in the foreseeable future, it is more likely than not that some portion of the deferred tax assets may not be realized. LONG-LIVED ASSETS Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized. We believe no impairment charges were necessary during the fiscal years ended March 31, 2017 and 2016. LOSS PER SHARE Basic loss per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if potential common shares had been issued, if such additional common shares were dilutive. Since we had net losses for all periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded as their effect would be antidilutive. As of March 31, 2017 and 2016, a total of 3,908,292 and 2,710,107 potential common shares, consisting of shares underlying outstanding stock options, restricted stock units, warrants and convertible notes payable were excluded as their inclusion would be antidilutive. SEGMENTS Historically, we operated in one segment that was based on our development of therapeutic devices. However, in the December 2013 quarter, we initiated the operations of ESI to develop diagnostic tests. As a result, we now operate in two segments, Aethlon for therapeutic applications and ESI for diagnostic applications (See Note 10). We record discrete financial information for ESI and our chief operating decision maker reviews ESI’s operating results in order to make decisions about resources to be allocated to the ESI segment and to assess its performance. DEFERRED FINANCING COSTS Costs related to the issuance of debt are capitalized as a deduction to our convertible notes based on the new accounting standard on imputation of interest, and amortized to interest expense over the life of the related debt using the effective interest method. We recorded amortization expense related to our deferred financing costs of $27,641 and $144,683 during the fiscal years ended March 31, 2017 and 2016, respectively. REVENUE RECOGNITION DARPA Contract -- We entered into a government contract with DARPA and have recognized revenue of $387,438 and $863,011 under that contract during the fiscal years ended March 31, 2017 and 2016, respectively. We adopted the Milestone method of revenue recognition for the DARPA contract under ASC 605-28 “Revenue Recognition – Milestone Method” (“ASC 605-28”) and we believe we meet the requirements under ASC 605-28 for reporting contract revenue under the Milestone Method for the fiscal years ended March 31, 2017 and 2016. We identify the deliverables included within the contract and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has standalone value to the collaborator. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. A milestone is an event having all of the following characteristics: (1) There is substantive uncertainty at the date the arrangement is entered into that the event will be achieved. A vendor’s assessment that it expects to achieve a milestone does not necessarily mean that there is not substantive uncertainty associated with achieving the milestone. (2) The event can only be achieved based in whole or in part on either: (a) the vendor’s performance; or (b) a specific outcome resulting from the vendor’s performance. (3) If achieved, the event would result in additional payments being due to the vendor. A milestone does not include events for which the occurrence is either: (a) contingent solely upon the passage of time; or (b) the result of a counterparty’s performance. The policy for recognizing deliverable consideration contingent upon achievement of a milestone must be applied consistently to similar deliverables. The assessment of whether a milestone is substantive is performed at the inception of the arrangement. The consideration earned from the achievement of a milestone must meet all of the following for the milestone to be considered substantive: (1) The consideration is commensurate with either: (a) the vendor’s performance to achieve the milestone; or (b) the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (2) The consideration relates solely to past performance; and (3) The consideration is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. A milestone is not considered substantive if any portion of the associated milestone consideration relates to the remaining deliverables in the unit of accounting (i.e., it does not relate solely to past performance). To recognize the milestone consideration in its entirety as revenue in the period in which the milestone is achieved, the milestone must be substantive in its entirety. Milestone consideration cannot be bifurcated into substantive and nonsubstantive components. In addition, if a portion of the consideration earned from achieving a milestone may be refunded or adjusted based on future performance, the related milestone is not considered substantive. Battelle Subcontract -- We entered into a subcontract agreement with Battelle Memorial Institute (“Battelle”) in March 2013. Battelle was chosen by DARPA to be the prime contractor on the systems integration portion of the original DARPA contract and we are one of several subcontractors on that systems integration project. The Battelle subcontract is cost-reimbursable under a time and materials basis. We began generating revenues under the subcontract during the three months ended September 30, 2013 and for the fiscal years ended March 31, 2017 and 2016, we recorded revenue of $4,635 and $23,561, respectively, under the Battelle subcontract. Our revenue under this contract was a function of cost reimbursement plus an overhead mark-up for hours devoted to the project by specific employees (with specific hourly rates for those employees). Battelle engaged us as needed. Each payment required approval by the program manager at Battelle. STOCK-BASED COMPENSATION Employee stock options and rights to purchase shares under stock participation plans are accounted for under the fair value method. Accordingly, share-based compensation is measured when all granting activities have been completed, generally the grant date, based on the fair value of the award. The exercise price of options is generally equal to the market price of the Company's common stock (defined as the closing price as quoted on the Nasdaq Capital Market or OTCBB on the date of grant). Compensation cost recognized by the Company includes (a) compensation cost for all equity incentive awards granted prior to April 1, 2006, but not yet vested, based on the grant-date fair value estimated in accordance with the original provisions of the then current accounting standards, and (b) compensation cost for all equity incentive awards granted subsequent to March 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of subsequent accounting standards. We use a Binomial Lattice option pricing model for estimating fair value of options granted (see Note 5). The following table summarizes share-based compensation expenses relating to shares and options granted and the effect on loss per common share during the years ended March 31, 2017 and 2016: Fiscal Years Ended March 31, 2017 March 31, 2016 Vesting of Stock Options and Restricted Stock Units $ 2,186,309 $ 202,844 Total Stock-Based Compensation Expense $ 2,186,309 $ 202,844 Weighted average number of common shares outstanding – basic and diluted 7,764,237 7,393,695 Basic and diluted loss per common share $ (0.28 ) $ (0.03 ) We account for transactions involving services provided by third parties where we issue equity instruments as part of the total consideration using the fair value of the consideration received (i.e. the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable. In transactions, when the value of the goods and/or services are not readily determinable and (1) the fair value of the equity instruments is more reliably measurable and (2) the counterparty receives equity instruments in full or partial settlement of the transactions, we use the following methodology: a) For transactions where goods have already been delivered or services rendered, the equity instruments are issued on or about the date the performance is complete (and valued on the date of issuance). b) For transactions where the instruments are issued on a fully vested, non-forfeitable basis, the equity instruments are valued on or about the date of the contract. c) For any transactions not meeting the criteria in (a) or (b) above, we re-measure the consideration at each reporting date based on its then current stock value. We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization after March 31, 2007 is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the fiscal year ended March 31, 2017 was insignificant. PATENTS Patents include both foreign and domestic patents. We capitalize the cost of patents, some of which were acquired, and amortize such costs over the shorter of the remaining legal life or their estimated economic life, upon issuance of the patent. The unamortized costs of patents are subject to our review for impairment under our long-lived asset policy above. STOCK PURCHASE WARRANTS We grant warrants in connection with the issuance of convertible notes payable and the issuance of common stock for cash. When such warrants are classified as equity and issued in connection with debt, we measure the relative estimated fair value of such warrants and record it as a discount from the face amount of the convertible notes payable. Such discounts are amortized to interest expense over the term of the notes using the effective interest method. Warrants issued in connection with common stock for cash, if classified as equity, are considered issued in connection with equity transactions and the warrant fair value is recorded to additional paid-in-capital. DERIVATIVE INSTRUMENTS We evaluate free-standing derivative instruments (or embedded derivatives) to properly classify such instruments within equity or as liabilities in our financial statements. Our policy is to settle instruments indexed to our common shares on a first-in-first-out basis. The classification of a derivative instrument is reassessed at each reporting date. If the classification changes as a result of events during a reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. Instruments classified as derivative liabilities are remeasured each reporting period (or upon reclassification) and the change in fair value is recorded on our consolidated statement of operations in other (income) expense. We had no derivative liabilities at either March 31, 2017 or March 31, 2016. BENEFICIAL CONVERSION FEATURE OF CONVERTIBLE NOTES PAYABLE The convertible feature of certain notes payable provides for a rate of conversion that is below market value. Such feature is normally characterized as a "Beneficial Conversion Feature" ("BCF"). We measure the estimated fair value of the BCF in circumstances in which the conversion feature is not required to be separated from the host instrument and accounted for separately, and record that value in the consolidated financial statements as a discount from the face amount of the notes. Such discounts are amortized to interest expense over the term of the notes. RESEARCH AND DEVELOPMENT EXPENSES Our research and development costs are expensed as incurred. We incurred approximately $673,000 and $782,000 of research and development expenses for the years ended March 31, 2017 and 2016, respectively, which are included in various operating expenses in the accompanying consolidated statements of operations. OFF-BALANCE SHEET ARRANGEMENTS We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial statements. SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS During the fiscal year ended March 31, 2017, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2015-03, the new accounting standard on imputation of interest, simplifying the presentation of debt issuance costs. As a result of the adoption of that pronouncement, our deferred financing costs at March 31, 2016 were reclassified from current assets to an offset against our convertible notes. We did not have any unamortized deferred financing costs at March 31, 2017. During the fiscal year ended March 31, 2017, we also adopted FASB ASU 2015-01, the new accounting standard on income statement - extraordinary and unusual items (Subtopic 225-20): simplifying income statement presentation by eliminating the concept of extraordinary items and FASB ASU 2014-15, the new accounting standard on the presentation of financial statements - going concern (Subtopic 205-40): disclosure of uncertainties about an entity's ability to continue as a going concern. The adoption of FASB ASU 2015-01 did not have a material impact on our consolidated financial statements for the fiscal years ended March 31, 2016 and 2017 as we did not have any extraordinary or unusual items in those fiscal years and we believe this accounting pronouncement will not have a significant impact on the our consolidated financial statements in the future. The adoption of FASB ASU 2014-15 did not have a material impact on our consolidated financial statements for the fiscal years ended March 31, 2016 and 2017 as our management had determined that a going concern qualification for both of those years was appropriate. We have evaluated the new going concern considerations in this ASU and have determined that it is appropriate to provide additional disclosure to our consolidated financial statements (see Note 1). Management is evaluating significant recent accounting pronouncements that are not yet effective for us, including the new accounting standard on improvements to employee share based payment accounting, ASU 2016-09 (Topic 718), the new accounting standard related to leases, ASU 2016-02 (Topic 842), the new accounting standard for recognition and measurement of financial assets and financial liabilities, and the new accounting standard on revenue recognition, ASU 2014-09 (Topic 606), and have not yet concluded whether any such pronouncements will have a significant effect on our future consolidated financial statements. |
2. PROPERTY AND EQUIPMENT
2. PROPERTY AND EQUIPMENT | 12 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Property and equipment, net, consist of the following: March 31, 2017 March 31, 2016 Furniture and office equipment, at cost $ 352,085 $ 394,395 Accumulated depreciation (322,862 ) (358,357 ) $ 29,223 $ 36,038 Depreciation expense for the years ended March 31, 2017 and 2016 approximated $23,000 and $29,000, respectively. |
3. PATENTS
3. PATENTS | 12 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PATENTS | Patents consist of the following: March 31, 2017 March 31, 2016 Patents $ 211,645 $ 211,645 Accumulated amortization (126,649 ) (117,484 ) $ 84,996 $ 94,161 Amortization expense for patents for the years ended March 31, 2017 and 2016 approximated $9,000. Future amortization expense on patents is estimated to be approximately $9,000 per year based on the estimated life of the patents. The weighted average remaining life of our patents is approximately 4.0 years. |
4. CONVERTIBLE NOTES PAYABLE
4. CONVERTIBLE NOTES PAYABLE | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Convertible Notes Payable [Abstract] | ||
CONVERTIBLE NOTES PAYABLE | Convertible Notes Payable, Net consisted of the following at June 30, 2017: Principal Unamortized Net Accrued Convertible Notes Payable, Net – Non-Current Portion: November 2014 10% Convertible Notes $ 612,811 $ (114,850 ) $ 497,961 $ 17,875 December 2016 10% Convertible Notes 680,400 (127,450 ) 552,950 19,846 Total Convertible Notes Payable, Net $ 1,293,211 $ (242,300 ) $ 1,050,911 $ 37,721 During the three months ended June 30, 2017, we recorded interest expense of $33,802 related to the contractual interest rates of our convertible notes and interest expense of $154,802 related to the amortization of the note discount for a total interest expense of $188,604 related to our convertible notes in the three months ended June 30, 2017. All of the unamortized discount at June 30, 2017 related to the note discount established upon the June 2017 amendment to the November 2014 10% Convertible Notes and to the December 2016 10% Convertible Notes (see below). Convertible Notes Payable, Net consisted of the following at March 31, 2017 (our most recent fiscal year end): Principal Unamortized Net Accrued Convertible Notes Payable, Net – Non-Current Portion: November 2014 10% Convertible Notes $ 612,811 $ (275,363 ) $ 337,448 $ 2,555 December 2016 10% Convertible Notes 680,400 (498,648 ) 181,752 2,836 Total Convertible Notes Payable, Net $ 1,293,211 $ (774,011 ) $ 519,200 $ 5,391 During the three months ended June 30, 2016, we recorded interest expense of $13,882 related to the contractual interest rates of our convertible notes and interest expense of $27,641 related to the amortization of deferred financing costs for a total interest expense of $41,523 related to our convertible notes in the three months ended June 30, 2016. NOVEMBER 2014 10% CONVERTIBLE NOTES In November 2014, we entered into a subscription agreement with two accredited investors providing for the issuance and sale of (i) convertible promissory notes in the aggregate principal amount of $527,780 (the “Notes”) and (ii) five year warrants to purchase up to 47,125 shares of common stock at a fixed exercise price of $8.40 per share (the “Warrants”). These Notes bear interest at the annual rate of 10% and originally matured on April 1, 2016. The aggregate gross cash proceeds to us were $415,000 after subtracting legal fees of $35,000, a $27,780 due diligence fee and an original issuance discount of $50,000. We recorded deferred financing costs of $112,780 to reflect the legal fees, due diligence fee and original issuance discount and will amortize those costs over the life of the Notes using the effective interest method. These Notes are convertible at the option of the holders into shares of our common stock at a fixed price of $5.60 per share, for up to an aggregate of 94,246 shares of common stock. There are no registration requirements with respect to the shares of common stock underlying the Notes or the Warrants. The estimated relative fair value of Warrants issued in connection with the Notes was recorded as a debt discount and is amortized as additional interest expense over the term of the underlying debt. We recorded debt discount of $240,133 based on the relative fair value of these Warrants. In addition, as the effective conversion price of the Notes was less than market price of the underlying common stock on the date of issuance, we recorded an additional debt discount of $287,647 related to the beneficial conversion feature. Initial Amendment of the November 2014 10% Convertible Note Terms On November 12, 2015, we entered into an amendment of terms (“Amendment of Terms”) with the two investors that participated in the November 2014 10% Convertible Notes. The Amendment of Terms modified the terms of the subscription agreement, Notes and Warrants held by those investors to, among other things, extended the maturity date of the Notes from April 1, 2016 to June 1, 2016, temporarily reduced the number of shares that we must reserve with respect to conversion of the Notes, and temporarily suspended the time period during which one of the investors may exercise its Warrants. In exchange for the investors’ agreements in the Amendment of Terms, we paid one of the investors a cash fee of $90,000, which we recorded as deferred financing costs and amortized over the remaining term of the notes. Second Amendment and Extension of the November 2014 10% Convertible Notes On June 27, 2016, we and certain investors entered into further Amendments (the “Amendments”) to the Notes and the Warrants. The Amendments provide that the Maturity Date (as defined in the Notes) was extended from June 1, 2016 to July 1, 2017 and that the conversion price per share of the Notes was reduced from $5.60 per share of common stock to $5.00 per share of common stock. In addition, we reduced the purchase price (as defined in the Warrants) from $8.40 per share to $5.00 per share of common stock. In connection with these modifications, each of the investors signed a Consent and Waiver providing its consent under certain restrictive provisions, and waiving certain rights, including a right to participate in certain offerings made by us, under a Securities Purchase Agreement dated June 23, 2015, (the “2015 SPA”) to which we, the investors and certain other investors are parties, in order to facilitate an at-the-market equity program (see Note 6). The Amendments also increase the principal amount of the Notes to $692,811 (in the aggregate) to (i) include accrued and unpaid interest through June 15, 2016, and (ii) increase the principal amount by $80,000 (in the aggregate) as an extension fee for the extended maturity date of the Notes. With respect to each Note, we entered into an Allonge to Convertible Promissory Note (each, an “Allonge”) reflecting the changes in the principal amount, Maturity Date and conversion price of the Note. We also issued to the investors new warrants (the “New Warrants”) to purchase an aggregate of 30,000 shares of common stock with a Purchase Price (as defined in the New Warrants) of $5.00 per share of common stock. We issued the New Warrants in substantially the same form as the prior Warrants, and the New Warrants will expire on November 6, 2019, the same date on which the prior Warrants will expire. The modification of the Notes was evaluated under FASB Accounting Standards Codification (“ASC”) Topic No. 470-50-40, “Debt Modification and Extinguishments” (“ASC 470-50-40”). Therefore, according to the guidance, the instruments were determined to be substantially different, and the transaction qualified for extinguishment accounting. As a result, we recorded a loss on debt extinguishment of $536,889 and recognized an extension fee expense of $80,000, which are included in other (income) expenses in the accompanying condensed consolidated statements of operations. The debt extinguishment is comprised from the fair value of prior warrants issued in connection with the Notes of $287,676, as well as $325,206 related to beneficial conversion feature and offset by debt discount of $75,993. The beneficial conversion feature is a result of the effective conversion price of the new Notes being less than the market price of the underlying common stock on the date of modification. Third Amendment and Extension of the November 2014 10% Convertible Notes In connection with the issuance of the December 2016 10% Convertible Notes, the conversion price of the November 2014 10% Convertible Notes was reduced from $5.00 to $4.00 per share and the expiration date of the November 2014 10% Convertible Notes was extended from July 1, 2017 to July 1, 2018. The modification of the Notes was evaluated under ASC 470-50-40 and the instruments were determined to be substantially different, and the transaction qualified for extinguishment accounting. As a result, we recorded a gain on debt extinguishment of $58,691, which is included in other (income) expenses in the accompanying condensed consolidated statements of operations. The recording of the modified Notes resulted in a beneficial conversion of $233,748 which is the result of the effective conversion price of the new Notes being less than the market price of the underlying common stock on the date of modification. June 2017 Amendment to the November 2014 10% Convertible Notes In June 2017, we agreed with the holders of the November 2014 10% Convertible Notes to an extension of the expiration dates of the notes from July 1, 2018 to July 1, 2019 in exchange for the reduction of the conversion price of those notes from $4.00 per share to $3.00 per share. The modification of the Notes was evaluated under ASC 470-50-40 and the instruments were determined to be substantially different, and the transaction qualified for extinguishment accounting. Under the extinguishment accounting we recorded a loss on debt extinguishment of $178,655 and recalculated a revised debt discount on the notes. The following table shows the changes to the principal balance of the November 2014 10% Convertible Notes: Activity in the November 2014 10% Convertible Notes Initial principal balance $ 527,780 Increase in principal balance under the second amendment (see above) 165,031 Conversions during the fiscal year ended March 31, 2017 (80,000 ) Balance as of June 30, 2017 $ 612,811 DECEMBER 2016 10% CONVERTIBLE NOTES In December 2016, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two accredited investors (collectively, the “Holders”), pursuant to which the Holders purchased an aggregate of $680,400 principal amount of Notes (inclusive of due diligence fee of $30,000 deemed paid as a subscription amount in the form of a Note in the principal amount of $32,400) for an aggregate cash subscription amount of $600,000 and (b) warrants to purchase 127,575 shares of Common Stock (collectively, the “Warrants”). The Notes bear interest at the rate of 10% per annum, and the principal amount and all accrued and unpaid interest thereon is convertible into shares of our common stock at a $4.00 per share conversion price, which is subject to customary adjustment provisions for stock splits, dividends, recapitalizations and the like. The Notes mature on July 1, 2018 and are subject to customary and usual terms for events of default and the like. Each Holder has contractually agreed to restrict its ability to convert its Note such that the number of shares of the Common Stock held by the Holder and its affiliates after such exercise does not exceed 4.99% of our then issued and outstanding shares of Common Stock. The Warrants issued to the Holders are exercisable for a period of five years from the date of issuance at an exercise price of $4.50, subject to adjustment. A Holder may exercise a Warrant by paying the exercise price in cash or by exercising the Warrant on a cashless basis. In the event a Holder exercises a Warrant on a cashless basis, we will not receive any proceeds. The exercise price of the Warrants is subject to customary adjustments provision for stock splits, stock dividends, recapitalizations and the like. Each Holder has contractually agreed to restrict its ability to exercise its Warrant such that the number of shares of the Common Stock held by the Holder and its affiliates after such exercise does not exceed 4.99% of our then issued and outstanding shares of Common Stock. The estimated relative fair value of Warrants issued in connection with the Notes was recorded as a debt discount and is being amortized as additional interest expense over the term of the underlying debt. We recorded debt discount of $232,718 based on the relative fair value of these Warrants. In addition, as the effective conversion price of the Notes was less than market price of the underlying common stock on the date of issuance, we recorded an additional debt discount of $262,718 related to the beneficial conversion feature. We also recorded deferred financing costs of $102,940, which was composed of an 8% original issue discount of $50,400, a $30,000 due diligence fee (which was paid in the form of a note), $22,500 in legal fees, and a $40 bank charge. The combination of the above items led to a combined discount against the convertible notes of $598,376. June 2017 Amendment to the December 2016 10% Convertible Notes In June 2017, we agreed with the holders of the December 2016 10% Convertible Notes to an extension of the expiration dates of the notes from July 1, 2018 to July 1, 2019 in exchange for the reduction of the conversion price of those notes from $4.00 per share to $3.00 per share. The modification of the notes was evaluated under ASC 470-50-40 and the instruments were determined to be substantially different, and the transaction qualified for extinguishment accounting. Under the extinguishment accounting we recorded a loss on debt extinguishment of $198,254 and recalculated a revised debt discount on the notes. There have been no conversions of principal on the December 2016 10% Convertible Notes through June 30, 2017. | Convertible Notes Payable, Net consisted of the following at March 31, 2017: Principal Unamortized Net Accrued Convertible Notes Payable, Net – Non-Current Portion: November 2014 10% Convertible Notes $ 612,811 $ (275,363 ) $ 337,448 $ 2,555 December 2016 10% Convertible Notes 680,400 (498,648 ) 181,752 2,836 Total Convertible Notes Payable, Net $ 1,293,211 $ (774,011 ) $ 519,200 $ 5,391 During the fiscal year ended March 31, 2017, we recorded interest expense of $81,102 related to the contractual interest rates of our convertible notes, interest expense of $27,641 related to the amortization of deferred financing costs and interest expense of $192,798 related to the amortization of the note discount for a total interest expense of $301,541 related to our convertible notes in the fiscal year ended March 31, 2017. All of the unamortized discount at December 31, 2016 related to the note discount established upon the second amendment to the November 2014 10% Convertible Notes and to the December 2016 10% Convertible Notes (see below). Accrued interest is included in other current liabilities (see Note 7). Convertible Notes Payable, Net consisted of the following at March 31, 2016: Principal Unamortized Net Accrued Convertible Notes Payable, Net– Non-Current Portion: November 2014 10% Convertible Notes $ 527,780 $ (27,641 ) $ 500,139 $ 74,036 Total Convertible Notes Payable, Net $ 527,780 $ (27,641 ) $ 500,139 $ 74,036 The above table shows the retroactive application of $27,641 in note discounts representing the deferred financing costs of that same amount on March 31, 2016 due to the application of related to the application of the new accounting standard ASU 2015-03. All of the unamortized discount at March 31, 2016 related to the deferred financing costs noted above. During the fiscal year ended March 31, 2016, we recorded interest expense of $52,778 related to the contractual interest rates of our convertible notes, interest expense of $372,550 related to the amortization of debt discounts on the convertible notes and interest expense of $144,683 related to the amortization of deferred financing costs for a total of $570,011. Accrued interest is included in other current liabilities (see Note 7). NOVEMBER 2014 10% CONVERTIBLE NOTES In November 2014, we entered into a subscription agreement with two accredited investors providing for the issuance and sale of (i) convertible promissory notes in the aggregate principal amount of $527,780 (the “Notes”) and (ii) five year warrants to purchase up to 47,125 shares of common stock at a fixed exercise price of $8.40 per share (the “Warrants”). These Notes bear interest at the annual rate of 10% and originally matured on April 1, 2016. The aggregate gross cash proceeds to us were $415,000 after subtracting legal fees of $35,000, a $27,780 due diligence fee and an original issuance discount of $50,000. We recorded deferred financing costs of $112,780 to reflect the legal fees, due diligence fee and original issuance discount and will amortize those costs over the life of the Notes using the effective interest method. These Notes are convertible at the option of the holders into shares of our common stock at a fixed price of $5.60 per share, for up to an aggregate of 94,246 shares of common stock. There are no registration requirements with respect to the shares of common stock underlying the Notes or the Warrants. The estimated relative fair value of Warrants issued in connection with the Notes was recorded as a debt discount and is amortized as additional interest expense over the term of the underlying debt. We recorded debt discount of $240,133 based on the relative fair value of these Warrants. In addition, as the effective conversion price of the Notes was less than market price of the underlying common stock on the date of issuance, we recorded an additional debt discount of $287,647 related to the beneficial conversion feature. Initial Amendment of the November 2014 10% Convertible Note Terms On November 12, 2015, we entered into an amendment of terms (“Amendment of Terms”) with the two investors that participated in the November 2014 10% Convertible Notes. The Amendment of Terms modified the terms of the subscription agreement, Notes and Warrants held by those investors to, among other things, extended the maturity date of the Notes from April 1, 2016 to June 1, 2016, temporarily reduced the number of shares that we must reserve with respect to conversion of the Notes, and temporarily suspended the time period during which one of the investors may exercise its Warrants. In exchange for the investors’ agreements in the Amendment of Terms, we paid one of the investors a cash fee of $90,000, which we recorded as deferred financing costs and amortized over the remaining term of the notes. Second Amendment and Extension of the November 2014 10% Convertible Notes On June 27, 2016, we and certain investors entered into further Amendments (the “Amendments”) to the Notes and the Warrants. The Amendments provide that the Maturity Date (as defined in the Notes) was extended from June 1, 2016 to July 1, 2017 and that the conversion price per share of the Notes was reduced from $5.60 per share of common stock to $5.00 per share of common stock. In addition, we reduced the purchase price (as defined in the Warrants) from $8.40 per share to $5.00 per share of common stock. In connection with these modifications, each of the investors signed a Consent and Waiver providing its consent under certain restrictive provisions, and waiving certain rights, including a right to participate in certain offerings made by us, under a Securities Purchase Agreement dated June 23, 2015, (the “2015 SPA”) to which we, the investors and certain other investors are parties, in order to facilitate an at-the-market equity program (see Note 6). The Amendments also increase the principal amount of the Notes to $692,811 (in the aggregate) to (i) include accrued and unpaid interest through June 15, 2016, and (ii) increase the principal amount by $80,000 (in the aggregate) as an extension fee for the extended maturity date of the Notes. With respect to each Note, we entered into an Allonge to Convertible Promissory Note (each, an “Allonge”) reflecting the changes in the principal amount, Maturity Date and conversion price of the Note. We also issued to the investors new warrants (the “New Warrants”) to purchase an aggregate of 30,000 shares of common stock with a Purchase Price (as defined in the New Warrants) of $5.00 per share of common stock. We issued the New Warrants in substantially the same form as the prior Warrants, and the New Warrants will expire on November 6, 2019, the same date on which the prior Warrants will expire. The modification of the Notes was evaluated under FASB Accounting Standards Codification (“ASC”) Topic No. 470-50-40, “Debt Modification and Extinguishments”. Therefore, according to the guidance, the instruments were determined to be substantially different, and the transaction qualified for extinguishment accounting. As a result, we recorded a loss on debt extinguishment of $536,889 and recognized an extension fee expense of $80,000, which are included in other (income) expenses in the accompanying condensed consolidated statements of operations. The debt extinguishment is comprised from the fair value of prior warrants issued in connection with the Notes of $287,676, as well as $325,206 related to beneficial conversion feature and offset by debt discount of $75,993. The beneficial conversion feature is a result of the effective conversion price of the new Notes being less than the market price of the underlying common stock on the date of modification. Third Amendment and Extension of the November 2014 10% Convertible Notes In connection with the issuance of the December 2016 10% Convertible Notes, the conversion price of the November 2014 10% Convertible Notes was reduced from $5.00 to $4.00 per share and the expiration date of the November 2014 10% Convertible Notes was extended from July 1, 2017 to July 1, 2018. The modification of the Notes was evaluated under FASB Accounting Standards Codification (“ASC”) Topic No. 470-50-40, “Debt Modification and Extinguishments”. Therefore, according to the guidance, the instruments were determined to be substantially different, and the transaction qualified for extinguishment accounting. As a result, we recorded a gain on debt extinguishment of $58,691, which is included in other (income) expenses in the accompanying condensed consolidated statements of operations. The recording of the modified Notes resulted in a beneficial conversion of $233,748 which is the result of the effective conversion price of the new Notes being less than the market price of the underlying common stock on the date of modification. In June 2017, we agreed with the holders of the November 2014 10% Convertible Notes to an extension of the expiration dates of the notes from July 1, 2018 to July 1, 2019 in exchange for the reduction of the conversion price of those notes from $4.00 per share to $3.00 per share (See Note 11). The following table shows the changes to the principal balance of the November 2014 10% Convertible Notes: Activity in the November 2014 10% Convertible Notes Initial principal balance $ 527,780 Increase in principal balance under the second amendment (see above) 165,031 Conversions during the fiscal year ended March 31, 2017 (80,000 ) Balance as of March 31, 2017 $ 612,811 DECEMBER 2016 10% CONVERTIBLE NOTES In December 2016, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two accredited investors (collectively, the “Holders”), pursuant to which the Holders purchased an aggregate of $680,400 principal amount of Notes (inclusive of due diligence fee of $30,000 deemed paid as a subscription amount in the form of a Note in the principal amount of $32,400) for an aggregate cash subscription amount of $600,000 and (b) warrants to purchase 127,575 shares of Common Stock (collectively, the “Warrants”). The Notes bear interest at the rate of 10% per annum, and the principal amount and all accrued and unpaid interest thereon is convertible into shares of our common stock at a $4.00 per share conversion price, which is subject to customary adjustment provisions for stock splits, dividends, recapitalizations and the like. The Notes mature on July 1, 2018 and are subject to customary and usual terms for events of default and the like. Each Holder has contractually agreed to restrict its ability to convert its Note such that the number of shares of the Common Stock held by the Holder and its affiliates after such exercise does not exceed 4.99% of our then issued and outstanding shares of Common Stock. The Warrants issued to the Holders are exercisable for a period of five years from the date of issuance at an exercise price of $4.50, subject to adjustment. A Holder may exercise a Warrant by paying the exercise price in cash or by exercising the Warrant on a cashless basis. In the event a Holder exercises a Warrant on a cashless basis, we will not receive any proceeds. The exercise price of the Warrants is subject to customary adjustments provision for stock splits, stock dividends, recapitalizations and the like. Each Holder has contractually agreed to restrict its ability to exercise its Warrant such that the number of shares of the Common Stock held by the Holder and its affiliates after such exercise does not exceed 4.99% of our then issued and outstanding shares of Common Stock. The estimated relative fair value of Warrants issued in connection with the Notes was recorded as a debt discount and is being amortized as additional interest expense over the term of the underlying debt. We recorded debt discount of $232,718 based on the relative fair value of these Warrants. In addition, as the effective conversion price of the Notes was less than market price of the underlying common stock on the date of issuance, we recorded an additional debt discount of $262,718 related to the beneficial conversion feature. We also recorded deferred financing costs of $102,940, which was composed of an 8% original issue discount of $50,400, a $30,000 due diligence fee (which was paid in the form of a note), $22,500 in legal fees, and a $40 bank charge. The combination of the above items led to a combined discount against the convertible notes of $598,376. In June 2017, we agreed with the holders of the December 2016 10% Convertible Notes to an extension of the expiration dates of the notes from July 1, 2018 to July 1, 2019 in exchange for the reduction of the conversion price of those notes from $4.00 per share to $3.00 per share (See Note 11). There were no conversions of principal on the December 2016 10% Convertible Notes during the fiscal year ended March 31, 2017. |
5. EQUITY TRANSACTIONS
5. EQUITY TRANSACTIONS | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Equity [Abstract] | ||
EQUITY TRANSACTIONS | Common Stock Sales Agreement with H.C. Wainwright On June 28, 2016, we entered into a Common Stock Sales Agreement (the “Agreement”) with H.C. Wainwright & Co., LLC (“H.C. Wainwright”) which establishes an at-the-market equity program pursuant to which we may offer and sell shares of our common stock from time to time as set forth in the Agreement. The Agreement provides for the sale of shares of our common stock having an aggregate offering price of up to $12,500,000 (the “Shares”). Subject to the terms and conditions set forth in the Agreement, H.C. Wainwright will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the Shares from time to time, based upon our instructions. We have provided H.C. Wainwright with customary indemnification rights, and H.C. Wainwright will be entitled to a commission at a fixed rate equal to three percent (3.0%) of the gross proceeds per Share sold. In addition, we have agreed to pay certain expenses incurred by H.C. Wainwright in connection with the Agreement, including up to $50,000 of the fees and disbursements of their counsel. The Agreement will terminate upon the sale of all of the Shares under the Agreement unless terminated earlier by either party as permitted under the Agreement (see Note 14). Sales of the Shares, if any, under the Agreement shall be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act, including sales made by means of ordinary brokers’ transactions, including on the Nasdaq Capital Market, at market prices or as otherwise agreed with H.C. Wainwright. We have no obligation to sell any of the Shares, and, at any time, we may suspend offers under the Agreement or terminate the Agreement. In July 2016, we commenced sales of common stock under our Common Stock Sales Agreement with H.C. Wainwright. In the three months ended June 30, 2017, we raised aggregate net proceeds of $1,903 (net of $63 in commissions to H.C. Wainwright and $133 in other offering expenses) under this agreement through the sale of 1,000 shares at an average price of $1.90 per share of net proceeds. Restricted Shares Issued for Services During the three months ended June 30, 2017, we issued 15,000 shares of restricted common stock at a price of $2.24 per share, the market price at time of issuance, in payment for investor relations consulting services valued at $33,600 based on the value of the services provided. Share for Warrant Exchanges During the three months ended June 30, 2017, we agreed with two individual investors to exchange 11,497 restricted shares for the cancellation of 22,993 warrants. Also during the three months ended June 30, 2017, we entered into an Exchange Agreement with two institutional investors under which we issued 57,844 restricted shares in exchange for the cancellation of 77,125 warrants held by those investors. Additionally, we agreed with those investors that they would extend the expiration dates of convertible notes held by those investors from July 1, 2018 to July 1, 2019 in exchange for the reduction of the conversion price of those notes from $4.00 per share to $3.00 per share (see Note 5). Based upon the fair value of the shares issued and warrants exchanged, we recorded a loss of $119,789 during the three months ended June 30, 2017 for all of the above share for warrant exchanges. Stock Option Issuances During the three months ended June 30, 2017, we issued options to four of our employees to purchase 34,500 shares of common stock at an exercise price of $1.68 per share, the closing price on the date of the approval of the option grants by our compensation committee (see Note 9). Termination of Restricted Share Grant During the three months ended June 30, 2017, we terminated a previously recorded but unissued share issuance of 68,000 shares under a fully vested restricted stock grant to our CEO and issued to him 32,674 shares as a net settlement of shares and the Company paid the withholding taxes associated with that share issuance in return for the cancellation of 35,326 shares. The compensation cost of that restricted stock grant had been fully recorded over prior fiscal years, therefore no expense was recorded regarding this net issuance. Restricted Stock Unit Grants to Executive Officers During the three months ended June 30, 2017, 46,125 RSUs held by our executives were exchanged into the same number of shares of our common stock. As our executives elected to net settle a portion of their RSU’s in exchange for the Company paying the related withholding taxes on the share issuance, 23,655 of the RSUs were cancelled and we issued a net 22,470 shares to our executives (see Note 9). | ISSUANCES OF COMMON STOCK AND WARRANTS Equity Transactions in the Fiscal Year Ended March 31, 2017. Common Stock Sales Agreement with H.C. Wainwright On June 28, 2016, we entered into a Common Stock Sales Agreement (the “Agreement”) with H.C. Wainwright & Co., LLC (“H.C. Wainwright”) which establishes an at-the-market equity program pursuant to which we may offer and sell shares of our common stock from time to time as set forth in the Agreement. The Agreement provides for the sale of shares of our common stock having an aggregate offering price of up to $12,500,000 (the “Shares”). Subject to the terms and conditions set forth in the Agreement, H.C. Wainwright will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the Shares from time to time, based upon our instructions. We have provided H.C. Wainwright with customary indemnification rights, and H.C. Wainwright will be entitled to a commission at a fixed rate equal to three percent (3.0%) of the gross proceeds per Share sold. In addition, we have agreed to pay certain expenses incurred by H.C. Wainwright in connection with the Agreement, including up to $50,000 of the fees and disbursements of their counsel. The Agreement will terminate upon the sale of all of the Shares under the Agreement unless terminated earlier by either party as permitted under the Agreement. Sales of the Shares, if any, under the Agreement shall be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act, including sales made by means of ordinary brokers’ transactions, including on the Nasdaq Capital Market, at market prices or as otherwise agreed with H.C. Wainwright. We have no obligation to sell any of the Shares, and, at any time, we may suspend offers under the Agreement or terminate the Agreement. In July 2016, we commenced sales of common stock under our Common Stock Sales Agreement with H.C. Wainwright. In the fiscal year ended March 31, 2017, we raised aggregate net proceeds of $955,206 (net of $29,831 in commissions to H.C. Wainwright and $9,432 in other offering expenses) under this agreement through the sale of 216,078 shares at an average price of $4.42 per share of net proceeds. Warrant Issuances in July 2016 In July 2016, we issued an aggregate of 2,660 shares of common stock to three investors upon the exercise of previously issued warrants. The warrants were exercised on a cashless or “net” basis. Accordingly, we did not receive any proceeds from such exercises. The cashless exercise of such warrants resulted in the cancellation of previously issued warrants to purchase an aggregate of 19,563 shares of common stock. Restricted Stock Unit Grants to Directors and Executive Officers During the fiscal year ended March 31, 2017, 149,864 Restricted Stock Units (“RSUs”) held by our outside directors and executive officers were exchanged into the same number of shares of our common stock (see Stock-Based Compensation below). Amendment of Warrants Issued in Conjunction with the November 2014 10% Convertible Notes Under the Second Amendment and Extension of the November 2014 10% Convertible Notes dated June 27, 2016 (See Note 4), we reduced the purchase price of 47,125 Warrants from $8.40 per share to $5.00 per share. We also issued to the investors new warrants to purchase an aggregate of 30,000 shares of common stock with a purchase price of $5.00 per share of common stock. We issued the new warrants in substantially the same form as the prior Warrants, and the new warrants will expire on November 6, 2019, the same date on which the prior warrants will expire (See Note 4). Amendment of December 2014 Warrants On June 27, 2016, we and certain investors (the “Unit Investors”) entered into Consent and Waiver and Amendment agreements (the “CWAs”), relating to an aggregate of 264,000 Warrants to Purchase Common Stock (the “Unit Warrants”) we had issued to the Unit Investors on December 2, 2014 pursuant to a Securities Purchase Agreement dated November 26, 2014 (the “2014 SPA”). In the CWAs, each of the Unit Investors provided its consent under certain restrictive provisions, and waived certain rights, including a right to participate in certain offerings made by us, under the 2014 SPA in order to facilitate the at-the-market equity program described above. Pursuant to the CWAs, we reduced the Exercise Price (as defined in the Unit Warrants) from $15.00 per share of common stock to $5.00 per share of common stock. At any time that the shares of common stock underlying the Unit Warrants are covered by an effective registration statement that permits the public resale of the shares, if the Unit Investors exercise the Unit Warrants, they must do so by a cash exercise, which could yield up to $1,320,000 in proceeds to us. On June 27, 2016, each of the Unit Investors also entered into a Consent and Waiver providing its consent under certain provisions, and waiving certain rights, including a right to participate in certain offerings made by us, under the 2015 SPA in order to facilitate the at-the-market equity program described above. In accordance with applicable GAAP for warrant modifications, we measured the change in fair value that arose from the reduction in exercise price and recognized an expense of $345,841, which is included in other (income) expenses in the accompanying condensed consolidated statements of operations. Warrants Issued in Conjunction with the December 2016 10% Convertible Notes On December 30, 2016, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two accredited investors (collectively, the “Holders”), pursuant to which the Purchasers purchased an aggregate of $680,400 principal amount of Notes (inclusive of due diligence fee of $30,000 deemed paid as a subscription amount in the form of a Note in the principal amount of $32,400) for an aggregate cash subscription amount of $600,000 and (b) warrants to purchase 127,575 shares of Common Stock (collectively, the “Warrants”) (See Note 4). The Warrants issued to the Holders are exercisable for a period of five years from the date of issuance at an exercise price of $4.50, subject to adjustment. A Holder may exercise a Warrant by paying the exercise price in cash or by exercising the Warrant on a cashless basis. In the event a Holder exercises a Warrant on a cashless basis, we will not receive any proceeds. The exercise price of the Warrants is subject to customary adjustments provision for stock splits, stock dividends, recapitalizations and the like. Each Holder has contractually agreed to restrict its ability to exercise its Warrant such that the number of shares of the Common Stock held by the Holder and its affiliates after such exercise does not exceed 4.99% of our then issued and outstanding shares of Common Stock. The estimated relative fair value of Warrants issued in connection with the Notes was recorded as a debt discount and is amortized as additional interest expense over the term of the underlying debt. We recorded debt discount of $232,718 based on the relative fair value of these Warrants. MARCH 2017 EQUITY FINANCING On March 22, 2017, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Investors”) for the sale of 575,000 shares (the “Common Shares”) of our common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $3.50 per share, in a registered direct offering. Concurrently with the sale of the Common Shares, pursuant to the Purchase Agreement, we also sold in a private placement warrants to purchase 575,000 shares of Common Stock (the “Warrants”). The aggregate gross proceeds for the sale of the Common Shares and Warrants will be approximately $2 million. Subject to certain ownership limitations, the Warrants will be initially exercisable commencing six months from the issuance date at an exercise price equal to $3.95 per share of Common Stock, subject to adjustments as provided under the terms of the Warrants. The Warrants will be exercisable for five years from the initial exercise date. The net proceeds to us from the transactions, after deducting the placement agent’s fees and expenses (not including the Wainwright Warrants, as defined below), our estimated offering expenses, and excluding the proceeds, if any, from the exercise of the Warrants, were $1,804,250. We intend to use the net proceeds from the transactions for general corporate purposes. The Common Shares (but not the Warrants or shares issuable upon exercise of the Warrant) were sold by us pursuant to an effective shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission (the “SEC”) on May 5, 2016 and subsequently declared effective on May 12, 2016 (File No. 333-211151) (the “Registration Statement”), and the base prospectus dated as of May 12, 2016 contained therein. We filed a prospectus supplement and the accompanying prospectus with the SEC in connection with this sale of the Common Shares. The purchase agreement also covered the exchange of 264,000 warrants issued to the purchasers thereunder in December 2014 for 198,000 shares of our common stock. Further, in exchange for certain waivers given by the purchasers and certain other investors in a private placement of the Company in June 2015, the warrants issued in such private placement were amended to (i) reduce the exercise price to $3.95 per share, (ii) make the warrants non-exercisable for a period of six months from the date of amendment, and (iii) extend the term of those warrants by six months. As all of these warrant-related elements were integral to the March 2017 Equity Financing, we accounted for all of these elements as adjustments to additional paid-in capital. The Warrants and the shares issuable upon exercise of the Warrants were sold and issued without registration under the Securities Act of 1933 (the “Securities Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and Rule 506 promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable state laws. We also entered into an engagement letter (the “Engagement Letter”) with Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC (“Rodman”), pursuant to which Rodman agreed to serve as exclusive placement agent for the issuance and sale of the Common Shares and Warrants. We paid Rodman an aggregate fee equal to 6% of the gross proceeds received by us from the sale of the securities in the transactions. Pursuant to the Engagement Letter, we also agreed to grant to Rodman or its designees warrants to purchase up to 3% of the aggregate number of shares sold in the transaction (the “Rodman Warrants”). The Engagement Letter has a nine month tail and right of first offer periods, indemnity and other customary provisions for transactions of this nature. The Rodman Warrants have substantially the same terms as the Warrants, except that the exercise price is 125% of $3.50. We also paid Rodman a reimbursement for non-accountable expenses in the amount of $50,000. Equity Transactions in the Fiscal Year Ended March 31, 2016. REVERSE STOCK SPLIT On April 14, 2015, we completed a 1-for-50 reverse stock split. Accordingly, authorized common stock was reduced from 500,000,000 shares to 10,000,000 shares, and each 50 shares of outstanding common stock held by stockholders were combined into one share of common stock. The accompanying condensed consolidated financial statements and accompanying notes have been retroactively revised to reflect such reverse stock split as if it had occurred on April 1, 2014. All share and per share amounts have been revised accordingly. INCREASE IN AUTHORIZED SHARES On March 31, 2016, we filed a Certificate of Amendment to our Articles of Incorporation to increase our authorized common stock from 10,000,000 to 30,000,000 shares. Our stockholders approved the amendment at our annual meeting of stockholders held on March 29, 2016. On April 28, 2015, we issued 915 shares of common stock as the result of rounding up of fractional shares that arose due to our reverse stock split. On June 25, 2015, we sold $6,000,000 of units, comprised of common stock and warrants, to 18 accredited investors at a price of $6.30 per unit. Each unit consisted of one share of common stock and 0.75 of a five-year warrant to purchase one share of common stock at an exercise price of $6.30 per share. Accordingly, we issued a total of 952,383 shares of unregistered common stock and warrants to purchase 714,285 shares of common stock. For its services as sole placement agent for the financing, we paid Roth Capital Partners, LLC (“Roth”) a cash fee of $285,512 and expense reimbursement of $75,000 and we issued them a five-year warrant to purchase 32,371 shares of common stock at an exercise price of $6.30 per share. We received $5,591,988 in net proceeds from this financing. The warrant fair value, which was valued using a binomial lattice model, was recorded to additional paid-in-capital. In connection with the financing, Mr. James Joyce, our Chief Executive Officer, Mr. James Frakes, our Chief Financial Officer and Dr. Chetan Shah, a director of our company, each agreed to waive their right to exercise certain stock options and warrants held by them representing the right to acquire 402,318 shares of common stock in the aggregate (the “Waivers”). The Waivers were required in order to make a sufficient number of shares of common stock available for issuance and the Waivers expired when we amended our Articles of Incorporation on March 31, 2016. During the three months ended September 30, 2015, we issued an aggregate of 5,292 shares of common stock to an accredited investor upon the exercise of previously issued warrants. The warrants were exercised on a cashless or “net” basis. Accordingly, we did not receive any proceeds from such exercises. The cashless exercise of such warrants resulted in the cancellation of previously issued warrants to purchase an aggregate of 1,744 shares of common stock. During the three months ended December 31, 2015, we issued an aggregate of 6,757 unregistered shares of common stock to two investors upon the exercise of previously issued warrants. The warrants were exercised for cash and we received cash proceeds of $14,766 for an average purchase price of $2.19 per share per the terms of the warrants. WARRANTS: During the fiscal year ended March 31, 2017, we issued warrants in connection with three financing arrangements. The first warrant issuance during the fiscal year was the issuance of 30,000 warrants with an exercise price of $5.00 per share in June 2016. Those 30,000 warrants were issued in connection with the Amendment of November 2014 Investment Documents (see Note 4). The second warrant issuance was the issuance of 127,575 warrants with an exercise price of $4.50 per share in December 2016. Those 127,575 warrants were issued in connection with the issuance of our December 2016 10% Convertible Notes (see Note 4). The third warrant issuance during the fiscal year was our March 22, 2017 equity financing with certain institutional investors (the “Investors”) for the sale of 575,000 shares (the “Common Shares”) of our common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $3.50 per share, in a registered direct offering. Concurrently with the sale of the Common Shares, pursuant to the Purchase Agreement, we also sold in a private placement warrants to purchase 575,000 shares of Common Stock (the “Warrants”). Subject to certain ownership limitations, the Warrants will be initially exercisable commencing six months from the issuance date at an exercise price equal to $3.95 per share of Common Stock, subject to adjustments as provided under the terms of the Warrants. The Warrants will be exercisable for five years from the initial exercise date. The purchase agreement also covered the exchange of 264,000 warrants issued to the purchasers thereunder in December 2014 for 198,000 shares of our common stock. Further, in exchange for certain waivers given by the purchasers and certain other investors in a private placement of the Company in June 2015, the warrants issued in such private placement were amended to (i) reduce the exercise price to $3.95 per share, (ii) make the warrants non-exercisable for a period of six months from the date of amendment, and (iii) extend the term of those warrants by six months. We also entered into an engagement letter (the “Engagement Letter”) with Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC (“Rodman”), pursuant to which Rodman agreed to serve as exclusive placement agent for the issuance and sale of the Common Shares and Warrants. In addition to a cash placement fee equal to 6% of the gross proceeds received by us from the sale of the securities in the transaction, we also agreed to grant to Rodman or its designees warrants to purchase up to 3% of the aggregate number of shares sold in the transaction (the “Rodman Warrants”). The Rodman Warrants have substantially the same terms as the Warrants, except that the exercise price is 125% of $3.50. Based on the above assumptions, we valued the warrants issued during the fiscal year ended March 31, 2017 as follows: • The 30,000 warrants issued in June 2016 were valued at $111,900 and we classified that fair value as equity. • The 127,575 warrants issued in December 2016 were valued at $380,174 and we classified $232,718 of that fair value as debt discount and the remainder as equity. • The 575,000 warrants issued in March 2017 were valued at $1,493,390 and we classified that fair value as equity. • In connection with our March 2017 financing, we agreed to reduce the exercise price on 547,620 warrants from $6.30 to $3.44. We valued the change in fair value due to the change in exercise price at $219,048 and classified that fair value as equity. • Also in connection with our March 2017 financing, we agreed with the investor in that financing to exchange 198,000 shares for the return and cancellation of 264,000 warrants. We calculated the fair value of those 264,000 warrants at $528,000 and classified the impact of this share for warrant exchange as equity due to the integral connection with the March 2017 financing. A summary of the aggregate warrant activity for the years ended March 31, 2017 and 2016 is presented below: Fiscal Year Ended March 31, 2017 2016 Warrants Weighted Warrants Weighted Outstanding, beginning of year 2,164,094 $ 6.68 1,430,738 $ 6.84 Granted 749,825 $ 4.10 746,657 $ 6.30 Exercised (2,660 ) $ 6.25 (12,049 ) $ 2.15 Cancelled/Forfeited (307,163 ) $ 5.18 (1,252 ) $ 2.10 Outstanding, end of year 2,604,096 $ 3.64 2,164,094 $ 6.68 Exercisable, end of year 2,604,096 $ 3.64 2,164,094 $ 6.68 Weighted average estimated fair value of warrants granted $ 2.65 $ 5.11 The following outlines the significant weighted average assumptions used to estimate the fair value of warrants granted utilizing the Binomial Lattice option pricing model: Year Ended March 31, 2017 2016 Risk free interest rate 0.7% - 1.93% 1.70% Average expected life 3.42 – 5.5 years 5 years Expected volatility 88.2% - 96.0% 98.6% Expected dividends None None The expected volatility was based on the historic volatility. The expected life of options granted was based on the "simplified method" as described in the SEC's guidance due to changes in the vesting terms and contractual life of current option grants compared to our historical grants. The detail of the warrants outstanding and exercisable as of March 31, 2017 is as follows: Warrants Outstanding Warrants Exercisable Range of Number Weighted Weighted Number Weighted $5.00 or Below 1,860,101 3.78 $ 3.67 1,860,101 $ 3.67 $5.20 - $9.00 711,067 2.77 $ 6.47 705,067 $ 6.47 $9.65 - $15.00 32,928 2.37 $ 12.32 32,928 $ 12.32 2,604,096 2,604,096 STOCK-BASED COMPENSATION: 2000 STOCK OPTION PLAN Our 2000 Stock Option Plan provides for the grant of incentive stock options to our full-time employees (who may also be directors) and nonstatutory stock options to non-employee directors, consultants, customers, vendors or providers of significant services. The exercise price of any incentive stock option may not be less than the fair market value of the common stock on the date of grant or, in the case of an optionee who owns more than 10% of the total combined voting power of all classes of our outstanding stock, not be less than 110% of the fair market value on the date of grant. The exercise price, in the case of any nonstatutory stock option, must not be less than 75% of the fair market value of the common stock on the date of grant. The amount reserved under the 2000 Stock Option Plan is 10,000 options. At March 31, 2016, all of the grants previously made under the 2000 Stock Option Plan had expired and 200 unregistered shares had been issued under the plan, with 9,800 available for future issuance. 2010 STOCK INCENTIVE PLAN In August 2010, we adopted the 2010 Stock Incentive Plan, which provides incentives to attract, retain and motivate employees and directors whose present and potential contributions are important to our success by offering them an opportunity to participate in our future performance through awards of options, the right to purchase common stock, stock bonuses and stock appreciation rights and other awards. A total of 70,000 common shares were initially reserved for issuance under the 2010 Stock Incentive Plan. In August 2010, we filed a registration statement on Form S-8 for the purpose of registering 70,000 common shares issuable under this plan under the Securities Act, and in July 2012, we filed a registration statement on Form S-8 for the purpose of registering 100,000 common shares issuable under this plan under the Securities Act. On January 26, 2016, our Board of Directors approved an amendment to the 2010 Stock Incentive Plan to increase the total number of shares of common stock reserved for issuance under the plan to 3,170,000 shares, subject to amendment of our Articles of Incorporation to increase our authorized common stock. On March 29, 2016, we held an annual stockholders meeting, at which our stockholders approved the Amended 2010 Stock Incentive Plan and an amendment of our Articles of Incorporation to increase our authorized common stock to 30,000,000 shares. At March 31, 2017, we had 2,241,549 shares available under this plan. 2012 DIRECTORS COMPENSATION PROGRAM In July 2012, our Board of Directors approved a board compensation program that modifies and supersedes the 2005 Directors Compensation Program, which was previously in effect. Under the 2012 program, in which only non-employee directors may participate, an eligible director will receive a grant of $35,000 worth of ten-year options to acquire shares of common stock, with such grant being valued at the exercise price based on the average of the closing bid prices of the common stock for the five trading days preceding the first day of the fiscal year. In addition, under this program, eligible directors will receive cash compensation equal to $500 for each committee meeting attended and $1,000 for each formal board meeting attended. At March 31, 2017, we had issued 26,757 options under the 2005 program to outside directors and 79,309 options to employee-directors, 21,756 outside directors’ options had been forfeited, 5,000 outside directors’ options had been exercised, 79,309 employee-directors’ options had been forfeited and no options under the 2005 program remained outstanding. On June 6, 2014, our Board of Directors approved certain changes to the 2012 program. Under this modified program, a new eligible director will receive an initial grant of $50,000 worth of options to acquire shares of common stock, with such grant being valued at the exercise price based on the average of the closing bid prices of the common stock for the five trading days preceding the first day of the fiscal year. These options will have a term of ten years and will vest 1/3 upon grant and 1/3 upon each of the first two anniversaries of the date of grant. In addition, at the beginning of each fiscal year, each existing director eligible to participate in the modified 2012 program also will receive a grant of $35,000 worth of options valued at the exercise price based on the average of the closing bid prices of the common stock for the five trading days preceding the first day of the fiscal year. Such options will vest on the first anniversary of the date of grant. In lieu of per meeting fees, eligible directors will receive an annual board retainer fee of $30,000. The modified 2012 program also provides for the following annual retainer fees: Audit Committee Chair - $5,000, Compensation Committee chair - $5,000, Audit Committee member - $4,000, Compensation Committee member - $4,000 and lead independent director - $15,000. RESTRICTED STOCK UNIT GRANTS TO DIRECTORS AND EXECUTIVE OFFICERS On August 9, 2016, our Board of Directors (the “Board”) granted RSUs to certain of our officers and directors as set forth below. The RSUs represent the right to be issued on a future date shares of our common stock for vested RSUs. Our Compensation Committee recommended the grants based on a compensation assessment provided by a third-party compensation consulting firm engaged by us that developed a peer group of companies for market assessment and analyzed compensation at such companies. The consultant recommended beneficial ownership targets, which we previously disclosed in our Proxy Statement filed on February 23, 2016, in connection with our Annual Meeting of Stockholders held on March 29, 2016. In connection with the Annual Meeting, our stockholders approved our Amended 2010 Stock Incentive Plan, which included an increase in the number of shares available for grant under the plan in part to accommodate equity awards recommended by the Compensation Committee, and our stockholders approved our executive compensation as disclosed in the Proxy Statement pursuant to Item 402 paragraphs (m) through (q) of Regulation S-K as shown below: To Mr. James A. Joyce, an aggregate of 634,000 RSUs valued at $6.28 per share, based on the August 9, 2016 closing price of the common stock. 158,500 of the RSUs are deemed vested upon grant and an additional 39,625 RSUs will vest each quarter beginning on January 1, 2017. This grant is intended to increase Mr. Joyce’s beneficial ownership of our common stock to 9.0%, which target was recommended in 2015 and in June 2016 by the compensation consultant engaged by us. Previously, in 2004, the Board had approved a beneficial ownership target of 15% for Mr. Joyce. However, Mr. Joyce has agreed to the modified target of 9.0%. To Mr. Rodney S. Kenley, an aggregate of 52,000 RSUs valued at $6.28 per share, based on the August 9, 2016 closing price of the common stock. 13,000 of the RSUs are deemed vested upon grant and an additional 3,250 RSUs will vest each quarter beginning on January 1, 2017. To Mr. James B. Frakes, an aggregate of 52,000 RSUs valued at $6.28 per share, based on the August 9, 2016 closing price of the common stock. 13,000 of the RSUs are deemed vested upon grant and an additional 3,250 RSUs will vest each quarter beginning on January 1, 2017. To each of our non-employee directors, Mr. Franklyn S. Barry, Jr., Mr. Edward G. Broenniman and Dr. Chetan S. Shah, 16,432 RSUs valued at an aggregate of $105,000, based on the average of the closing prices of the common stock for the five trading days preceding and including August 9, 2016. These grants represent (a) $70,000 worth of RSUs representing two years of grants under the amended 2012 Non-Employee Directors Compensation Program (the “2012 Program”) because more than two years have elapsed since Messrs. Barry and Broenniman and Dr. Shah received grants under the program, all of which RSUs are deemed vested upon grant and (b) $35,000 worth of RSUs representing the grant covering the fiscal year ending March 31, 2017, of which one-quarter were deemed vested upon grant and the remaining portion vested ratably at September 30, 2016, at December 31, 2016 and at March 31, 2017. The RSUs were granted under our Amended 2010 Stock Incentive Plan and we recorded expense of $2,076,535 in the fiscal year ended March 31, 2017 related to the RSU grants. CHANGES TO 2012 NON-EMPLOYEE DIRECTORS COMPENSATION PROGRAM In July 2012, the Board approved the 2012 Program, which modified and superseded the 2005 Directors Compensation Program that had been in effect previously. On June 6, 2014, the Board approved certain changes to the 2012 Program, and on August 9, 2016, the Board approved further modifications to the program. Under the modified 2012 Program, in which only non-employee directors may participate, a new eligible director will receive an initial grant of $50,000 worth of RSUs or, at the discretion of the Board, options to acquire shares of Common Stock. RSUs granted under this provision will be valued based on the average of the closing prices of the Common Stock for the five trading days preceding and including the date of grant and will vest at a rate determined by the Board in its discretion. Options granted under this provision will be valued at the exercise price, which will be based on the average of the closing prices of the Common Stock for the five trading days preceding and including the date of grant. Such options will have a term of ten years and will vest at a rate determined by the Board in its discretion. At the beginning of each fiscal year, each existing director eligible to participate in the 2012 Program will receive a grant of $35,000 worth of RSUs or, at the discretion of the Board, options to acquire shares of Common Stock. RSUs granted under this provision will be valued based on the average of the closing prices of the Common Stock for the five trading days preceding and including the first day of the fiscal year (or preceding and including the date of grant, if such grant is not made on the first day of the fiscal year) and will vest at a rate determined by the Board in its discretion. Options granted under this provision will be valued at the exercise price, which will be based on the average of the closing prices of the Common Stock for the five trading days preceding and including the first day of the fiscal year (or preceding and including the date of grant, if such grant is not made on the first day of the fiscal year). Such options will have a term of ten years and will vest at a rate determined by the Board in its discretion. In lieu of per meeting fees, under the 2012 Program eligible directors will receive an annual Board retainer fee of $30,000. The modified 2012 Program also provides for the following annual retainer fees: Audit Committee Chair - $5,000, Compensation Committee chair - $5,000, Nominating Committee Chair - $5,000, Audit Committee member - $4,000, Compensation Committee member - $4,000 and Lead independent director (currently an open position) - $15,000. The RSU grants and the changes to the 2012 Program were approved and recommended by our Compensation Committee prior to approval by the Board. RSUs outstanding that have vested and are expected to vest as of March 31, 2017 are as follows: Number of RSUs Vested 46,125 Expected to vest 507,375 Total 553,500 During the fiscal year ended March 31, 2017, 36,150 RSUs held by our outside directors were exchanged into the same number of shares of our common stock. As two of our three outside directors elected to return 40% of their RSU’s in exchange for cash in order to pay their withholding taxes on the share issuances, 13,146 of the RSUs were cancelled and we paid a total of $75,550 in cash to those two outside directors. Also during the fiscal year ended March 31, 2017, 184,500 RSUs held by our executives were exchanged into the same number of shares of our common stock. Upon vesting, the RSUs held by our executives were net share-settled to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. Total payments for the employees’ tax obligations to the taxing authorities are reflected as a financing activity within the Consolidated Statements of Cash Flows. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise been issued as a result of the vesting and did not repr |
6. RELATED PARTY TRANSACTIONS
6. RELATED PARTY TRANSACTIONS | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | DUE TO RELATED PARTIES During the three months June 30, 2017 we accrued unpaid Board fees of $18,750 owed to our outside directors as of June 30, 2017. | DUE TO RELATED PARTIES Historically, certain of our officers and other related parties have advanced us funds, agreed to defer compensation and/or paid expenses on our behalf to cover working capital deficiencies. There were no such related party transactions during the fiscal year ended March 31, 2017 except that we had accrued unpaid Board fees of $28,250 owed to our outside directors as of March 31, 2017. |
7. OTHER CURRENT LIABILITIES
7. OTHER CURRENT LIABILITIES | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | ||
OTHER CURRENT LIABILITIES | Other current liabilities were comprised of the following items: June 30, March 31, 2016 2017 Accrued interest $ 37,721 $ 5,391 Other accrued liabilities 45,124 64,076 Total other current liabilities $ 82,845 $ 69,467 | Other current liabilities were comprised of the following items: March 31, 2017 March 31, 2016 Accrued interest $ 5,391 $ 74,038 Other accrued liabilities 64,076 62,657 Total other current liabilities $ 69,467 $ 136,695 |
8. INCOME TAXES
8. INCOME TAXES | 12 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | For the years ended March 31, 2017 and 2016, we had no income tax expense due to our net operating losses and 100% deferred tax asset valuation allowance. At March 31, 2017 and 2016, we had net deferred tax assets as detailed below. These deferred tax assets are primarily composed of capitalized research and development costs and tax net operating loss carryforwards. Due to uncertainties surrounding our ability to generate future taxable income to realize these assets, a 100% valuation has been established to offset the net deferred tax assets. Significant components of our net deferred tax assets at March 31, 2017 and 2016 are shown below: YEAR ENDED MARCH 31, 2017 2016 Deferred tax assets: Capitalized research and development $ 3,442,000 $ 3,442,000 Net operating loss carryforwards 22,060,000 20,126,000 Stock compensation 318,000 – Total deferred tax assets 25,820,000 23,568,000 Total deferred tax liabilities – – Net deferred tax assets 25,820,000 23,568,000 Valuation allowance for deferred tax assets (25,820,000 ) (23,568,000 ) Net deferred tax assets $ – $ – At March 31, 2017, we had tax net operating loss carryforwards for federal and state purposes approximating $57 million and $45 million, which begin to expire in the year 2023. The provision for income taxes on earnings subject to income taxes differs from the statutory federal rate for the years ended March 31, 2017 and 2016 due to the following: 2017 2016 Income taxes (benefit) at federal statutory rate of 34% $ (2,484,000 ) $ (1,686,000 ) State income tax, net of federal benefit (438,000 ) (298,000 ) Tax effect on non-deductible expenses and credits 382,000 69,000 Change in valuation allowance 1 2,540,000 1,915,000 $ – $ – ______________ (1) ASC 740, “Income Taxes”, clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements, and prescribes recognition thresholds and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. During the years ended March 31, 2017 and 2016, we did not recognize any interest or penalties relating to tax matters. At and for the years ended March 31, 2017 and 2016, management does not believe the Company has any uncertain tax positions. Accordingly, there are no unrecognized tax benefits at March 31, 2017 or March 31, 2016. Our tax returns remain open for examination by the applicable authorities, generally 3 years for federal and 4 years for state. We are currently not under examination by any taxing authorities. |
9. DARPA CONTRACT AND RELATED R
9. DARPA CONTRACT AND RELATED REVENUE RECOGNITION | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Revenue Recognition [Abstract] | ||
DARPA CONTRACT AND RELATED REVENUE RECOGNITION | As discussed in Note 1, we entered into a contract with Defense Advanced Research Projects Agency (“DARPA”) on September 30, 2011. Under the DARPA award, we have been engaged to develop a therapeutic device to reduce the incidence of sepsis, a fatal bloodstream infection that often results in the death of combat-injured soldiers. The award from DARPA was a fixed-price contract with potential total payments to us of $6,794,389 over the course of five years. Fixed price contracts require the achievement of multiple, incremental milestones to receive the full award during each year of the contract. Under the terms of the contract, we performed certain incremental work towards the achievement of specific milestones against which we invoiced the government for fixed payment amounts. Originally, only the base year (year one of the contract) was effective for the parties; however, DARPA subsequently exercised its option on the remaining years of the contract. The milestones were comprised of planning, engineering and clinical targets, the achievement of which in some cases required the participation and contribution of third-party participants under the contract. We commenced work under the contract in October 2011 and completed the contract in September 2016. In February 2014, DARPA reduced the scope of our contract in years three through five of the contract. The reduction in scope focused our research on exosomes, viruses and blood processing instrumentation. This scope reduction reduced the possible payments under the contract by $858,469 over years three through five. The DARPA contract concluded on September 30, 2016. Also, during the three months ended June 30, 2016, we did not invoice the U.S. Government for any milestones. | As discussed in Note 1, we entered into a contract with DARPA on September 30, 2011. Under the DARPA award, we have been engaged to develop a therapeutic device to reduce the incidence of sepsis, a fatal bloodstream infection that often results in the death of combat-injured soldiers. The award from DARPA was a fixed-price contract with potential total payments to us of $6,794,389 over the course of five years. Fixed price contracts require the achievement of multiple, incremental milestones to receive the full award during each year of the contract. Under the terms of the contract, we performed certain incremental work towards the achievement of specific milestones against which we invoiced the government for fixed payment amounts. Originally, only the base year (year one of the contract) was effective for the parties; however, DARPA subsequently exercised its option on the remaining years of the contract. The milestones were comprised of planning, engineering and clinical targets, the achievement of which in some cases required the participation and contribution of third party participants under the contract. We commenced work under the contract in October 2011 and completed the contract in September 2016. In February 2014, DARPA reduced the scope of our contract in years three through five of the contract. The reduction in scope focused our research on exosomes, viruses and blood processing instrumentation. This scope reduction reduced the possible payments under the contract by $858,469 over years three through five. In the fiscal year ended March 31, 2017, we invoiced the U.S. Government for the final two milestones under our DARPA contract in the aggregate amount of $387,438. In the fiscal year ended March 31, 2016, we invoiced the U.S. Government for four milestones under our DARPA contract in the amount of $863,011. Fiscal Year Ended March 31, 2017 In the fiscal year ended March 31, 2017, we invoiced the U.S. Government for the final two milestones under our DARPA contract in the aggregate amount of $387,438. The details of those milestones were as follows: Milestone 2.6.1.3 - Quantify the degree to which the MERS virus can be extracted from circulation in vitro using miniature Hemopurifiers. The milestone payment was $193,719. Management considers this milestone to be substantive as it was not dependent on the passage of time nor was it based solely on another party's efforts. We quantified the degree to which the MERS virus can be extracted from circulation in vitro using miniature Hemopurifiers. The report was accepted by the contracting officer's representative and the invoice was submitted thereafter. Milestone 2.6.1.4 – Prepare and present Final Report for DARPA. The milestone payment was $193,719. Management considers this milestone to be substantive as it was not dependent on the passage of time nor was it based solely on another party's efforts. We prepared and presented the Final Report for DARPA. The report was accepted by the contracting officer's representative and the invoice was submitted thereafter. Fiscal Year Ended March 31, 2016 During the fiscal year ended March 31, 2016, we invoiced the Defense Advanced Research Projects Agency for four milestones totaling $863,011. The details of those milestones were as follows: Milestone M6 – Define Aethlon’s GMP manufacturing process and revise and upgrade Aethlon’s quality procedures and policies to the current state of the art. The milestone payment was $186,164. Management considers this milestone to be substantive as it was not dependent on the passage of time nor was it based solely on another party's efforts. We demonstrated that defined our GMP manufacturing process and that we revised and upgraded our quality procedures and policies to the current state of the art for a company of our size. The report was accepted by the contracting officer's representative and the invoice was submitted thereafter. Milestone 2.5.1.1 - Complete Aethlon’s GMP procedure and establish and maintain all GMP documentation for the company. The milestone payment was $186,164. Management considers this milestone to be substantive as it was not dependent on the passage of time nor was it based solely on another party's efforts. We demonstrated that we completed our GMP procedures and established and maintained all GMP documentation for the company. The report was accepted by the contracting officer's representative and the invoice was submitted thereafter. Milestone 2.5.2.2 – Finish construction and begin delivery of 50 prototype cartridges for testing by the systems integrator. The milestone payment was $296,964. Management considers this milestone to be substantive as it was not dependent on the passage of time nor was it based solely on another party's efforts. We demonstrated that we completed the construction of 50 prototype cartridges and were prepared to deliver the cartridges to the systems integrator. The report was accepted by the contracting officer's representative and the invoice was submitted thereafter. Milestone 2.6.1.1 – System integrator acceptance of the hemofilter device. The milestone payment was $193,719. Management considers this milestone to be substantive as it was not dependent on the passage of time nor was it based solely on another party's efforts. We demonstrated that we completed this milestone by confirmation by the systems integrator that it was accepting the hemofilter device as part of their overall system. |
10. SEGMENTS
10. SEGMENTS | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Segment Reporting [Abstract] | ||
SEGMENTS | We operate our businesses principally through two reportable segments: Aethlon, which represents our therapeutic business activities, and ESI, which represents our diagnostic business activities. Our reportable segments have been determined based on the nature of the potential products being developed. We record discrete financial information for ESI and our chief operating decision maker reviews ESI’s operating results in order to make decisions about resources to be allocated to the ESI segment and to assess its performance. Aethlon’s revenue is generated primarily from government contracts to date and ESI does not yet have any revenues. We have not included any allocation of corporate overhead to the ESI segment. The following tables set forth certain information regarding our segments: Three Months Ended June 30, 2017 2016 Revenues: Aethlon $ – $ 4,635 ESI – – Total Revenues $ 392,073 $ 4,635 Operating Losses: Aethlon $ (1,141,406 ) $ (1,092,990 ) ESI (18,843 ) (38,662 ) Total Operating Loss $ (1,160,249 ) $ (1,131,652 ) Net Losses: Aethlon $ (1,826,708 ) $ (2,097,887 ) ESI (18,843 ) (38,662 ) Net Loss Before Non-Controlling Interests $ (1,845,551 ) $ (2,136,549 ) Cash: Aethlon $ 326,464 $ 1,291,537 ESI 742 2,722 Total Cash $ 327,206 $ 1,294,259 Total Assets: Aethlon $ 492,324 $ 1,419,226 ESI 16,827 41,806 Total Assets $ 509,151 $ 1,461,032 Capital Expenditures: Aethlon $ 23,705 $ 1,545 ESI – – Capital Expenditures $ 23,705 $ 1,545 Depreciation and Amortization: Aethlon $ 9,326 $ 5,323 ESI – 4,895 Total Depreciation and Amortization $ 9,326 $ 10,218 Interest Expense: Aethlon $ (188,604 ) $ (42,167 ) ESI – – Total Interest Expense $ (188,604 ) $ (42,167 ) | We operate our businesses principally through two reportable segments: Aethlon, which represents our therapeutic business activities, and ESI, which represents our diagnostic business activities. Our reportable segments have been determined based on the nature of the potential products being developed. We record discrete financial information for ESI and our chief operating decision maker reviews ESI’s operating results in order to make decisions about resources to be allocated to the ESI segment and to assess its performance. Aethlon’s revenue is generated primarily from government contracts to date and ESI does not yet have any revenues. We have not included any allocation of corporate overhead to the ESI segment. The following tables set forth certain information regarding our segments: Fiscal Years Ended March 31, 2017 2016 Revenues: Aethlon $ 392,073 $ 886,572 ESI – – Total Revenues $ 392,073 $ 886,572 Operating Losses: Aethlon $ (5,945,293 ) $ (3,953,402 ) ESI (153,064 ) (431,432 ) Total Operating Loss $ (6,098,357 ) $ (4,384,834 ) Net Losses: Aethlon $ (7,153,662 ) $ (4,527,184 ) ESI (153,064 ) (431,432 ) Net Loss Before Non-Controlling Interests $ (7,306,726 ) $ (4,958,616 ) Cash: Aethlon $ 1,558,667 $ 2,114,285 ESI 1,034 9,452 Total Cash $ 1,559,701 $ 2,123,737 Total Assets: Aethlon $ 1,698,249 $ 2,475,686 ESI 28,119 53,430 Total Assets $ 1,726,368 $ 2,529,116 Capital Expenditures: Aethlon $ 16,433 $ 9,307 ESI – – Capital Expenditures $ 16,433 $ 9,307 Depreciation and Amortization: Aethlon $ 22,370 $ 18,943 ESI 10,043 19,581 Total Depreciation and Amortization $ 32,413 $ 38,524 Interest Expense: Aethlon $ 304,330 $ 573,782 ESI – – Total Interest Expense $ 304,330 $ 573,782 |
11. SUBSEQUENT EVENTS
11. SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | Management has evaluated events subsequent to June 30, 2017 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustment of and/or disclosure in such financial statements. Subsequent to June 30, 2017, we continued selling common stock under our Common Stock Sales Agreement with H.C. Wainwright (see Note 6). Between the period of July 1, 2017 through August 10, 2017, we raised net proceeds of $40,377 (after deducting $1,290 in commissions to H.C. Wainwright and $1,326 in other offering expenses) utilizing the sales agreement through the sale of 22,252 shares at an average price of $1.81 per share of net proceeds. Also subsequent to June 30, 2017, we agreed with a former placement agent to exchange 5,500 restricted shares for the cancellation of 11,000 warrants. On July 31, 2017, we filed an S-1 registration statement with the SEC to raise up to $7.5 million through the sale of common stock and warrants. We engaged H.C. Wainwright & Co, LLC as our exclusive placement agent on the financing. | Management has evaluated events subsequent to March 31, 2017 through the date that the accompanying consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustment of and/or disclosure in such financial statements. In April 2017, we agreed with two individual investors to exchange 11,497 restricted shares for the cancellation of 22,993 warrants. In April 2017, we issued 15,000 shares of restricted common stock at a price of $2.24 per share in payment for digital communications consulting services valued at $33,600 based on the value of the services provided. In April 2014, we terminated a previously recorded but unissued share issuance of 68,000 shares under a fully vested restricted stock grant to our CEO and issued to him 32,674 shares as a net settlement of shares and the Company paid the withholding taxes associated with that share issuance in return for the cancellation of 35,326 shares. The compensation cost of that restricted stock grant had been fully recorded over prior fiscal years, therefore no expense was recorded regarding this net issuance. In April 2017, 46,125 RSUs held by our executives were exchanged into the same number of shares of our common stock. As our executives elected to net settle a portion of their RSU’s in exchange for the Company paying the related withholding taxes on the share issuance, 23,655 of the RSUs were cancelled and we issued a net 22,470 shares to our executives. In the period since March 31, 2017, sold 1,000 shares of common stock under our Common Stock Sales Agreement with H.C. Wainwright. We raised aggregate net proceeds of $1,903 (net of $63 in commissions to H.C. Wainwright and $133 in other offering expenses) under this agreement at an average price of $1.90 per share of net proceeds. In June 2017, we issued options to four of our employees to purchase 34,500 shares of common stock at a price of $1.68 per share, the closing price on the date of the approval of the option grants by our compensation committee. In June 2017, we entered into an Exchange Agreement with two institutional investors under which we issued 57,844 restricted shares in exchange for the cancellation of 77,125 warrants held by those investors. Additionally, we agreed with those investors that they would extend the expiration dates of convertible notes held by those investors from July 1, 2018 to July 1, 2019 in exchange for the reduction of the conversion price of those notes from $4.00 per share to $3.00 per share. |
12. COMMITMENTS AND CONTINGENCI
12. COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
12. COMMITMENTS AND CONTINGENCIES | LEASE COMMITMENTS We currently rent approximately 2,600 square feet of executive office space at 9635 Granite Ridge Drive, Suite 100, San Diego, CA 92123 at the rate of $6,054 per month on a four-year lease that expires in January 2019. We also rent approximately 1,700 square feet of laboratory space at 11585 Sorrento Valley Road, Suite 109, San Diego, California 92121 at the rate of $4,394 per month on a one-year lease that was extended to an expiration date of November 30, 2017. Rent expense, which is included in general and administrative expenses, approximated $35,000 and $34,000 for the three month periods ended June 30, 2017 and 2016, respectively. LEGAL MATTERS From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. We are not presently a party to any pending or threatened legal proceedings. | EMPLOYMENT CONTRACTS We entered into an employment agreement with our Chairman of the Board (“Chairman”) effective April 1, 1999. The agreement, which is cancelable by either party upon sixty days’ notice, will be in effect until the Chairman retires or ceases to be employed by us. Under the terms of the agreement, if the Chairman is terminated he may become eligible to receive a salary continuation payment in the amount of at least twelve months' base salary, which was increased to $385,000 per year in September 2015. We entered into an employment agreement with Dr. Richard H. Tullis, Ph. D. (“Tullis”) effective January 10, 2000 as our Chief Science Officer ("CSO"). Under the terms of the agreement, if Tullis is terminated he may become eligible to receive a salary continuation payment in the amount of twelve months’ base salary, which is $195,000 per year. In February 2016, we entered into a part-time consulting agreement with Tullis. Under that agreement, Tullis continued to provide services under the terms of a consulting agreement with us. In connection with the change in his employment, Tullis resigned as our Vice President. Under the consulting agreement, Tullis rendered approximately twenty (20) hours per week of such services, for which we paid him a consulting fee of $10,000 per month. The term of the consulting agreement was for an initial sixty-day period and, unless terminated earlier by either party, shall automatically extend for additional one-month periods. Either party to the consulting agreement may terminate it upon 30 day’s prior written notice to the other party. Concurrently with the entry into the consulting agreement, Tullis and the Company mutually agreed to terminate his employment agreement with us. In November 2016, the scope of the consulting agreement was amended to reduce the hours from 20 hours per week to 20 hours per month with a reduction in monthly consulting fees from the original $10,000 per month to $4,000 per month. Then in February 2017, the scope of the consulting agreement was further amended to reduce the hours from 20 hours per month to 10 hours per month with a reduction in monthly consulting fees from $4,000 per month to $2,000 per month. RETENTION AGREEMENTS On October 16, 2015, following a recommendation of our Compensation Committee, we approved retention bonus grants to three of our executive officers under a newly established Aethlon Senior Management Retention Program to maintain management stability going forward. The Board approved a $100,000 retention bonus for Mr. James A. Joyce, our Chief Executive Officer, a $50,000 retention bonus for Mr. Rodney S. Kenley, our President, and a $50,000 retention bonus for Mr. James B. Frakes, our Chief Financial Officer. In connection with the bonus granted to Mr. Joyce, we entered into an amendment of Mr. Joyce’s Employment Agreement dated April 1, 1999. Pursuant to the amendment, if within two years of the effective date of the amendment, we terminate Mr. Joyce’s employment with us for “Cause” (as defined in his employment agreement) or Mr. Joyce terminates his employment with us other than for “Good Reason” (as defined in his employment agreement), Mr. Joyce must repay in full the amount of the bonus received from us. In the event of his death or disability or termination by us other than for “Cause” or termination by Mr. Joyce for “Good Reason,” Mr. Joyce will not be required to repay any portion of the bonus received by him. In connection with the bonus granted to Mr. Kenley, we entered into an amendment of Mr. Kenley’s Offer Letter dated October 27, 2010. Pursuant to the amendment, if within two years of the effective date of the amendment, we terminate Mr. Kenley’s employment with us for “Cause” (as defined in the amendment) or Mr. Kenley terminates his employment with us other than for “Good Reason” (as defined in the amendment), Mr. Kenley must repay in full the amount of the bonus received from us. In the event of his death or disability or termination by us other than for “Cause” or termination by Mr. Kenley for “Good Reason,” Mr. Kenley will not be required to repay any portion of the bonus received by him. In connection with the bonus granted to Mr. Frakes, we entered into a Retention Bonus Agreement with Mr. Frakes. Pursuant to the agreement, if within two years of the effective date of the agreement, we terminate Mr. Frakes’ employment with us for “Cause” (as defined in the agreement) or Mr. Frakes terminates his employment with us other than for “Good Reason” (as defined in the agreement), Mr. Frakes must repay in full the amount of the bonus received from us. In the event of his death or disability or termination by us other than for “Cause” or termination by Mr. Frakes for “Good Reason,” Mr. Frakes will not be required to repay any portion of the bonus received by him. LEASE COMMITMENTS We currently rent approximately 2,600 square feet of executive office space at 9635 Granite Ridge Drive, Suite 100, San Diego, CA 92123 at the rate of $6,054 per month on a four-year lease that expires in January 2019. We also rent approximately 1,700 square feet of laboratory space at 11585 Sorrento Valley Road, Suite 109, San Diego, California 92121 at the rate of $4,838 per month on a one-year lease that expires in November 2016. Our current plans are to renew the lease prior to expiration or to secure alternative lab space in the San Diego area. Our Exosome Sciences, Inc. subsidiary previously rented approximately 2,055 square feet of office and laboratory space at 11 Deer Park Drive, South Brunswick, NJ at the rate of $3,917 per month on a one-year lease that expired in October 2015. In October 2015, Exosome Sciences, Inc. relocated to a different suite at the same office complex. That new suite was comprised of approximately 541 square feet of office and laboratory space and is located at 9 Deer Park Drive, South Brunswick, NJ at the rate of $1,352 per month under a month to month lease basis. In January 2016, we exercised our 30-day notice to terminate the Exosome Sciences’ lease in New Jersey as part of a consolidation of our laboratory operations in San Diego. Rent expense, which is included in general and administrative expenses, approximated $151,000 and $144,000 for the fiscal years ended March 31, 2017 and 2016, respectively. As of March 31, 2017, our commitments under the lease agreements are as follows: Fiscal Year Ending 2018 2019 9635 Granite Ridge Drive, Suite 100, San Diego, CA 92123 office lease $ 78,156 $ 21,446 11585 Sorrento Valley Road, Suite 109, San Diego, CA 92121 office lease 47,054 – Total Lease Commitments $ 125,210 $ 21,446 LEGAL MATTERS From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. We are not presently a party to any pending or threatened legal proceedings. |
2. Loss per Common Share (June
2. Loss per Common Share (June 30, 2017 Note) | 3 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Loss per Common Share | Basic loss per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period of computation. The weighted average number of common shares outstanding for the three months ended June 30, 2017 includes 46,125 vested restricted stock units. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if potential common shares had been issued, if such additional common shares were dilutive. Since we had net losses for all periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded as their effect would be antidilutive. As of June 30, 2017 and 2016, a total of 3,893,303 and 2,771,780 potential common shares, consisting of shares underlying outstanding stock options, warrants, unvested restricted stock units and convertible notes payable were excluded as their inclusion would be antidilutive. |
3. Research and Development Exp
3. Research and Development Expenses (June 30, 2017 Note) | 3 Months Ended |
Jun. 30, 2017 | |
Research and Development [Abstract] | |
Research and Development Expenses | Our research and development costs are expensed as incurred. We incurred research and development expenses during the three month periods ended June 30, 2017 and 2016, which are included in various operating expense line items in the accompanying condensed consolidated statements of operations. Our research and development expenses in those periods were as follows: June 30, June 30, 2017 2016 Three months ended $ 157,463 $ 117,664 |
4. Future Accounting Pronouncem
4. Future Accounting Pronouncements (June 30, 2017 Note) | 3 Months Ended |
Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Future Accounting Pronouncements | Management is evaluating significant recent accounting pronouncements that are not yet effective for us, including the new accounting standard on improvements to employee share based payment accounting, ASU 2016-09 (Topic 718), the new accounting standard related to leases, ASU 2016-02 (Topic 842), the new accounting standard for recognition and measurement of financial assets and financial liabilities, and the new accounting standard on revenue recognition, ASU 2014-09 (Topic 606), and have not yet concluded whether any such pronouncements will have a significant effect on our future consolidated financial statements. |
9. Stock Compensation (June 30,
9. Stock Compensation (June 30, 2017 Note) | 3 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | The following tables summarize share-based compensation expenses relating to Restricted Stock Units (“RSU”s) and options granted and the effect on basic and diluted loss per common share during the three month periods ended June 30, 2017 and 2016: Three Months Three Months Vesting of stock options and restricted stock units $ 280,911 $ 50,710 Total stock-based compensation expense $ 280,911 $ 50,710 Weighted average number of common shares outstanding – basic and diluted 8,805,522 7,622,393 Basic and diluted loss per common share attributable to stock-based compensation expense $ (0.03 ) $ (0.01 ) All of the stock-based compensation expense recorded during the three months ended June 30, 2017 and 2016, which totaled $280,911 and $50,710, respectively, is included in payroll and related expense in the accompanying condensed consolidated statements of operations. We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The cumulative effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the three months ended June 30, 2017 was insignificant. Restricted Stock Unit Grants to Directors and Executive Officers On August 9, 2016, our Board of Directors (the “Board”) granted RSUs to certain of our officers and directors. The RSUs represent the right to be issued on a future date shares of our common stock for vested RSUs. Our Compensation Committee recommended the grants based on a compensation assessment provided by a third-party compensation consulting firm engaged by us that developed a peer group of companies for market assessment and analyzed compensation at such companies. The RSUs were granted under our Amended 2010 Stock Incentive Plan and we recorded expense of $260,699 in the three months ended June 30, 2017 related to the RSU grants. RSUs outstanding that have vested and are expected to vest as of June 30, 2017 are as follows: Number of RSUs Vested 46,125 Expected to vest 461,250 Total 507,375 During the three months ended June 30, 2017, 46,125 vested RSUs held by our executives were exchanged into the same number of shares of our common stock. As our executives elected to net settle a portion of their RSU’s in exchange for the Company paying the related withholding taxes on the share issuance, 23,655 of the RSUs were cancelled and we issued a net 22,470 shares to our executives. Stock Option Activity During the three months ended June 30, 2017, we issued options to four of our employees to purchase 34,500 shares of common stock at a price of $1.68 per share, the closing price on the date of the approval of the option grants by our compensation committee. There were no stock option grants during the three months ended June 30, 2016. Options outstanding that have vested and are expected to vest as of June 30, 2017 are as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Vested 414,547 $ 11.24 4.05 Expected to vest 52,000 $ 2.80 8.71 Total 466,547 The following outlines the significant weighted average assumptions used to estimate the fair value information presented, with respect to stock option grants utilizing the Binomial Lattice option pricing models at, and during the three months ended June 30, 2017: Risk free interest rate 2.21% Average expected life 10 years Expected volatility 92.14% Expected dividends None The expected volatility was based on the historic volatility. The expected life of options granted was based on the "simplified method" as described in the SEC's guidance due to changes in the vesting terms and contractual life of current option grants compared to our historical grants. A summary of stock option activity during the three months ended June 30, 2017 is presented below: Amount Range of Weighted Stock options outstanding at March 31, 2017 432,047 $3.80-$20.50 $ 10.98 Exercised – – – Granted 34,500 $1.68 $ 1.68 Cancelled/Expired – – – Stock options outstanding at June 30, 2017 466,547 $1.68-$20.50 $ 10.30 Stock options exercisable at June 30, 2017 414,547 $3.80-$20.50 $ 11.24 On June 30, 2017, our stock options had no intrinsic value since the closing price on that date of $2.14 per share was below the weighted average exercise price of our stock options. At June 30, 2017, there was approximately $2,666,508 of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted average period of 2.37 years. |
10. Warrants (June 30, 2017 Not
10. Warrants (June 30, 2017 Note) | 3 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrants | During the three months ended June 30, 2017, we did not issue any warrants A summary of warrant activity during the three months ended June 30, 2017 is presented below: Amount Range of Weighted Warrants outstanding at March 31, 2017 2,604,096 $2.10 - $15.00 $ 3.64 Exercised – n/a n/a Issued – n/a n/a Cancelled/Expired (128,357 ) $5.00 –$9.00 $ 5.80 Warrants outstanding at June 30, 2017 2,475,739 $2.10 - $15.00 $ 3.47 Warrants exercisable at June 30, 2017 2,475,739 $2.10 - $15.00 $ 3.47 The following outlines the significant weighted average assumptions used to estimate the fair value information presented, with respect to warrants utilizing the Binomial Lattice option pricing models at, and during the three months ended June 30, 2016: Risk free interest rate 0.79% – 1.38% Average expected life 3 months – 2.33 years Expected volatility 68% – 111% Expected dividends None The expected volatility was based on the historic volatility. The expected life of options granted was based on the "simplified method" as described in the SEC's guidance due to changes in the vesting terms and contractual life of current option grants compared to our historical grants. Based on the above assumptions, we valued the warrants that were exchanged for common stock (see Note 6) during the three months ended June 30, 2017 at $119,789. |
1. ORGANIZATION, LIQUIDITY AN24
1. ORGANIZATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
ORGANIZATION | ORGANIZATION We create medical technologies to address unmet needs in global health and biodefense. The Aethlon Hemopurifier® is a clinical-stage therapeutic device that eliminates life-threatening viruses from the circulatory system of infected individuals. We believe the Aethlon Hemopurifier® can achieve the broad-spectrum countermeasure goal set forth by the U.S. Department of Health and Human Services (HHS). The device has been validated to capture Ebola, Zika, Lassa, MERS-CoV, HIV, Hepatitis C, Cytomegalovirus, Epstein-Barr, Herpes Simplex, Chikungunya, Dengue, West Nile, Smallpox related viruses, H1N1 Swine Flu, H5N1 Bird Flu, and the reconstructed Spanish flu virus of 1918. At present, the Hemopurifier® is being advanced under an FDA approved clinical study. Aethlon is also the majority owner of Exosome Sciences, Inc., a company focused on the discovery of exosomal biomarkers to diagnose and monitor life-threatening diseases. Aethlon Medical, Inc. and subsidiary (“Aethlon”, the “Company”, “we” or “us”) is a medical device company focused on creating innovative devices that address unmet medical needs in in global health and biodefense. The Aethlon Hemopurifier® is a clinical-stage therapeutic device that eliminates life-threatening viruses from the circulatory system of infected individuals. On June 25, 2013, the United States Food and Drug Administration (FDA) approved an Investigational Device Exemption (IDE) that allows us to initiate human feasibility studies of the Aethlon Hemopurifier® in the U.S. We ended the treatment phase of the study after treating eight end-stage renal disease patients who were infected with the Hepatitis C virus (HCV) to demonstrate the safety of Hemopurifier therapy. Successful completion of this study will allow us the opportunity to initiate pivotal studies that are required for market clearance to treat HCV and other disease conditions in the U.S. Successful outcomes of human trials will also be required by the regulatory agencies of certain foreign countries where we intend to sell this device. Some of our patents may expire before FDA approval or approval in a foreign country, if any, is obtained. However, we believe that certain patent applications and/or other patents issued more recently will help protect the proprietary nature of the Hemopurifier(R) treatment technology. In October 2013, our subsidiary, Exosome Sciences, Inc. (“ESI”), commenced operations with a focus on advancing exosome-based strategies to diagnose and monitor the progression of cancer, infectious disease and other life-threatening conditions. Our common stock is quoted on the Nasdaq Capital Market under the symbol “AEMD.” |
REVERSE STOCK SPLIT | REVERSE STOCK SPLIT On April 14, 2015, the Company completed a 1-for-50 reverse stock split. Accordingly, authorized common stock was reduced from 500,000,000 shares to 10,000,000 shares, and each 50 shares of outstanding common stock held by stockholders were combined into one share of common stock. The accompanying consolidated financial statements and accompanying notes have been retroactively revised to reflect such reverse stock split as if it had occurred on April 1, 2014. All shares and per share amounts have been revised accordingly. |
LIQUIDITY AND GOING CONCERN | LIQUIDITY AND GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. We have incurred continuing losses from operations and at March 31, 2017 had an accumulated deficit of approximately $93,778,000. These factors, among other matters, raise substantial doubt about our ability to continue as a going concern. A significant amount of additional capital will be necessary to advance the development of our products to the point at which they may become commercially viable. We intend to fund operations, working capital and other cash requirements for the fiscal year ending March 31, 2018 through debt and/or equity financing arrangements. We are currently addressing our liquidity issue by seeking additional investment capital through issuances of common stock under our existing S-3 registration statement and by applying for additional grants issued by government agencies in the United States. We believe that our cash on hand and funds expected to be received from additional debt and equity financing arrangements will be sufficient to meet our liquidity needs for fiscal 2018. However, no assurance can be given that we will receive any funds in addition to the funds we have received to date. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. We are continuing to pursue external financing alternatives to improve our working capital position. If we are unable to obtain the necessary capital, we may have to cease operations. The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results. The consolidated financial statements do not include any adjustments related to this uncertainty and as to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of Aethlon Medical, Inc. and its majority-owned (80% ownership) and controlled subsidiary, Exosome Sciences, Inc. (ESI). All significant intercompany balances and transactions have been eliminated in consolidation. The Company has classified the (20% ownership) noncontrolling interests in ESI as part of consolidated net loss in the fiscal years ended March 31, 2017 and 2016 and includes the accumulated amount of noncontrolling interests as part of equity. The losses at ESI during the fiscal year ended March 31, 2017 reduced the noncontrolling interests on our consolidated balance sheet by $30,613 from $(50,354) at March 31, 2016 to $(80,967) at March 31, 2017. |
RISKS AND UNCERTAINTIES | RISKS AND UNCERTAINTIES We operate in an industry that is subject to intense competition, government regulation and rapid technological change. Our operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory, and including the potential risk of business failure. |
USE OF ESTIMATES | USE OF ESTIMATES We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, realization of long-lived assets, valuation of derivative liabilities, estimating fair value associated with debt and equity transactions and valuation of deferred tax assets. Actual results, whether in the near, medium or long term future, could differ from those estimates. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS Accounting standards define “cash and cash equivalents” as any short-term, highly liquid investment that is both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. For the purpose of financial statement presentation, we consider all highly liquid investment instruments with original maturities of three months or less when purchased, or any investment redeemable without penalty or loss of interest to be cash equivalents. As of March 31, 2017 and 2016, we had no assets that were classified as cash equivalents. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount of our cash, accounts receivable, accounts payable, and other current liabilities approximates their estimated fair values due to the short-term maturities of those financial instruments. The carrying amount of the notes payable approximates their fair value due to the short maturity of the notes and since the interest rates approximate current market interest rates for similar instruments. Management has concluded that it is not practical to determine the estimated fair value of amounts due to related parties because the transactions cannot be assumed to have been consummated at arm's length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practicable due to the lack of data regarding similar instruments, if any, and the associated potential costs. We follow Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) in connection with financial assets and liabilities measured at fair value on a recurring basis subsequent to initial recognition. ASC 820 requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. We do not have any assets or liabilities that are measured at fair value on a recurring basis and, during the years ended March 31, 2017 and 2016, and did not have any assets or liabilities that were measured at fair value on a nonrecurring basis. |
CONCENTRATIONS OF CREDIT RISKS | CONCENTRATIONS OF CREDIT RISKS Cash is maintained at one financial institution in checking accounts and related cash management accounts. Accounts at this institution are secured by the Federal Deposit Insurance Corporation up to $250,000. Our March 31, 2017 cash balances were approximately $1,308,000 over such insured amount. We do not believe that the Company is exposed to any significant risk with respect to its cash. All of our accounts receivable at March 31, 2017 and 2016 and all of our revenue in the fiscal years ended March 31, 2017 and 2016 were directly from the U.S. Department of Defense or from a subcontract under Battelle, which is a prime contractor with the U.S. Department of Defense. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from two to five years. Repairs and maintenance are charged to expense as incurred while improvements are capitalized. Upon the sale or retirement of property and equipment, the accounts are relieved of the cost and the related accumulated depreciation with any gain or loss included in the consolidated statements of operations. |
INCOME TAXES | INCOME TAXES Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the difference between the consolidated financial statements and their respective tax basis. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts reported for income tax purposes, and (b) tax credit carryforwards. We record a valuation allowance for deferred tax assets when, based on our best estimate of taxable income (if any) in the foreseeable future, it is more likely than not that some portion of the deferred tax assets may not be realized. |
LONG-LIVED ASSETS | LONG-LIVED ASSETS Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized. We believe no impairment charges were necessary during the fiscal years ended March 31, 2017 and 2016. |
LOSS PER SHARE | LOSS PER SHARE Basic loss per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if potential common shares had been issued, if such additional common shares were dilutive. Since we had net losses for all periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded as their effect would be antidilutive. As of March 31, 2017 and 2016, a total of 3,908,292 and 2,710,107 potential common shares, consisting of shares underlying outstanding stock options, restricted stock units, warrants and convertible notes payable were excluded as their inclusion would be antidilutive. |
SEGMENTS | SEGMENTS Historically, we operated in one segment that was based on our development of therapeutic devices. However, in the December 2013 quarter, we initiated the operations of ESI to develop diagnostic tests. As a result, we now operate in two segments, Aethlon for therapeutic applications and ESI for diagnostic applications (See Note 10). We record discrete financial information for ESI and our chief operating decision maker reviews ESI’s operating results in order to make decisions about resources to be allocated to the ESI segment and to assess its performance. |
DEFERRED FINANCING COSTS | DEFERRED FINANCING COSTS Costs related to the issuance of debt are capitalized as a deduction to our convertible notes based on the new accounting standard on imputation of interest, and amortized to interest expense over the life of the related debt using the effective interest method. We recorded amortization expense related to our deferred financing costs of $27,641 and $144,683 during the fiscal years ended March 31, 2017 and 2016, respectively. |
REVENUE RECOGNITION | REVENUE RECOGNITION DARPA Contract -- We entered into a government contract with DARPA and have recognized revenue of $387,438 and $863,011 under that contract during the fiscal years ended March 31, 2017 and 2016, respectively. We adopted the Milestone method of revenue recognition for the DARPA contract under ASC 605-28 “Revenue Recognition – Milestone Method” (“ASC 605-28”) and we believe we meet the requirements under ASC 605-28 for reporting contract revenue under the Milestone Method for the fiscal years ended March 31, 2017 and 2016. We identify the deliverables included within the contract and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has standalone value to the collaborator. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. A milestone is an event having all of the following characteristics: (1) There is substantive uncertainty at the date the arrangement is entered into that the event will be achieved. A vendor’s assessment that it expects to achieve a milestone does not necessarily mean that there is not substantive uncertainty associated with achieving the milestone. (2) The event can only be achieved based in whole or in part on either: (a) the vendor’s performance; or (b) a specific outcome resulting from the vendor’s performance. (3) If achieved, the event would result in additional payments being due to the vendor. A milestone does not include events for which the occurrence is either: (a) contingent solely upon the passage of time; or (b) the result of a counterparty’s performance. The policy for recognizing deliverable consideration contingent upon achievement of a milestone must be applied consistently to similar deliverables. The assessment of whether a milestone is substantive is performed at the inception of the arrangement. The consideration earned from the achievement of a milestone must meet all of the following for the milestone to be considered substantive: (1) The consideration is commensurate with either: (a) the vendor’s performance to achieve the milestone; or (b) the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (2) The consideration relates solely to past performance; and (3) The consideration is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. A milestone is not considered substantive if any portion of the associated milestone consideration relates to the remaining deliverables in the unit of accounting (i.e., it does not relate solely to past performance). To recognize the milestone consideration in its entirety as revenue in the period in which the milestone is achieved, the milestone must be substantive in its entirety. Milestone consideration cannot be bifurcated into substantive and nonsubstantive components. In addition, if a portion of the consideration earned from achieving a milestone may be refunded or adjusted based on future performance, the related milestone is not considered substantive. Battelle Subcontract -- We entered into a subcontract agreement with Battelle Memorial Institute (“Battelle”) in March 2013. Battelle was chosen by DARPA to be the prime contractor on the systems integration portion of the original DARPA contract and we are one of several subcontractors on that systems integration project. The Battelle subcontract is cost-reimbursable under a time and materials basis. We began generating revenues under the subcontract during the three months ended September 30, 2013 and for the fiscal years ended March 31, 2017 and 2016, we recorded revenue of $4,635 and $23,561, respectively, under the Battelle subcontract. Our revenue under this contract was a function of cost reimbursement plus an overhead mark-up for hours devoted to the project by specific employees (with specific hourly rates for those employees). Battelle engaged us as needed. Each payment required approval by the program manager at Battelle. |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Employee stock options and rights to purchase shares under stock participation plans are accounted for under the fair value method. Accordingly, share-based compensation is measured when all granting activities have been completed, generally the grant date, based on the fair value of the award. The exercise price of options is generally equal to the market price of the Company's common stock (defined as the closing price as quoted on the Nasdaq Capital Market or OTCBB on the date of grant). Compensation cost recognized by the Company includes (a) compensation cost for all equity incentive awards granted prior to April 1, 2006, but not yet vested, based on the grant-date fair value estimated in accordance with the original provisions of the then current accounting standards, and (b) compensation cost for all equity incentive awards granted subsequent to March 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of subsequent accounting standards. We use a Binomial Lattice option pricing model for estimating fair value of options granted (see Note 5). The following table summarizes share-based compensation expenses relating to shares and options granted and the effect on loss per common share during the years ended March 31, 2017 and 2016: Fiscal Years Ended March 31, 2017 March 31, 2016 Vesting of Stock Options and Restricted Stock Units $ 2,186,309 $ 202,844 Total Stock-Based Compensation Expense $ 2,186,309 $ 202,844 Weighted average number of common shares outstanding – basic and diluted 7,764,237 7,393,695 Basic and diluted loss per common share $ (0.28 ) $ (0.03 ) We account for transactions involving services provided by third parties where we issue equity instruments as part of the total consideration using the fair value of the consideration received (i.e. the value of the goods or services) or the fair value of the equity instruments issued, whichever is more reliably measurable. In transactions, when the value of the goods and/or services are not readily determinable and (1) the fair value of the equity instruments is more reliably measurable and (2) the counterparty receives equity instruments in full or partial settlement of the transactions, we use the following methodology: a) For transactions where goods have already been delivered or services rendered, the equity instruments are issued on or about the date the performance is complete (and valued on the date of issuance). b) For transactions where the instruments are issued on a fully vested, non-forfeitable basis, the equity instruments are valued on or about the date of the contract. c) For any transactions not meeting the criteria in (a) or (b) above, we re-measure the consideration at each reporting date based on its then current stock value. We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization after March 31, 2007 is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the fiscal year ended March 31, 2017 was insignificant. |
PATENTS | PATENTS Patents include both foreign and domestic patents. We capitalize the cost of patents, some of which were acquired, and amortize such costs over the shorter of the remaining legal life or their estimated economic life, upon issuance of the patent. The unamortized costs of patents are subject to our review for impairment under our long-lived asset policy above. |
STOCK PURCHASE WARRANTS | STOCK PURCHASE WARRANTS We grant warrants in connection with the issuance of convertible notes payable and the issuance of common stock for cash. When such warrants are classified as equity and issued in connection with debt, we measure the relative estimated fair value of such warrants and record it as a discount from the face amount of the convertible notes payable. Such discounts are amortized to interest expense over the term of the notes using the effective interest method. Warrants issued in connection with common stock for cash, if classified as equity, are considered issued in connection with equity transactions and the warrant fair value is recorded to additional paid-in-capital. |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We evaluate free-standing derivative instruments (or embedded derivatives) to properly classify such instruments within equity or as liabilities in our financial statements. Our policy is to settle instruments indexed to our common shares on a first-in-first-out basis. The classification of a derivative instrument is reassessed at each reporting date. If the classification changes as a result of events during a reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. Instruments classified as derivative liabilities are remeasured each reporting period (or upon reclassification) and the change in fair value is recorded on our consolidated statement of operations in other (income) expense. We had no derivative liabilities at either March 31, 2017 or March 31, 2016. |
BENEFICIAL CONVERSION FEATURE OF CONVERTIBLE NOTES PAYABLE | BENEFICIAL CONVERSION FEATURE OF CONVERTIBLE NOTES PAYABLE The convertible feature of certain notes payable provides for a rate of conversion that is below market value. Such feature is normally characterized as a "Beneficial Conversion Feature" ("BCF"). We measure the estimated fair value of the BCF in circumstances in which the conversion feature is not required to be separated from the host instrument and accounted for separately, and record that value in the consolidated financial statements as a discount from the face amount of the notes. Such discounts are amortized to interest expense over the term of the notes. |
RESEARCH AND DEVELOPMENT EXPENSES | RESEARCH AND DEVELOPMENT EXPENSES Our research and development costs are expensed as incurred. We incurred approximately $673,000 and $782,000 of research and development expenses for the years ended March 31, 2017 and 2016, respectively, which are included in various operating expenses in the accompanying consolidated statements of operations. |
OFF-BALANCE SHEET ARRANGEMENTS | OFF-BALANCE SHEET ARRANGEMENTS We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial statements. |
SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS | SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS During the fiscal year ended March 31, 2017, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2015-03, the new accounting standard on imputation of interest, simplifying the presentation of debt issuance costs. As a result of the adoption of that pronouncement, our deferred financing costs at March 31, 2016 were reclassified from current assets to an offset against our convertible notes. We did not have any unamortized deferred financing costs at March 31, 2017. During the fiscal year ended March 31, 2017, we also adopted FASB ASU 2015-01, the new accounting standard on income statement - extraordinary and unusual items (Subtopic 225-20): simplifying income statement presentation by eliminating the concept of extraordinary items and FASB ASU 2014-15, the new accounting standard on the presentation of financial statements - going concern (Subtopic 205-40): disclosure of uncertainties about an entity's ability to continue as a going concern. The adoption of FASB ASU 2015-01 did not have a material impact on our consolidated financial statements for the fiscal years ended March 31, 2016 and 2017 as we did not have any extraordinary or unusual items in those fiscal years and we believe this accounting pronouncement will not have a significant impact on the our consolidated financial statements in the future. The adoption of FASB ASU 2014-15 did not have a material impact on our consolidated financial statements for the fiscal years ended March 31, 2016 and 2017 as our management had determined that a going concern qualification for both of those years was appropriate. We have evaluated the new going concern considerations in this ASU and have determined that it is appropriate to provide additional disclosure to our consolidated financial statements (see Note 1). Management is evaluating significant recent accounting pronouncements that are not yet effective for us, including the new accounting standard on improvements to employee share based payment accounting, ASU 2016-09 (Topic 718), the new accounting standard related to leases, ASU 2016-02 (Topic 842), the new accounting standard for recognition and measurement of financial assets and financial liabilities, and the new accounting standard on revenue recognition, ASU 2014-09 (Topic 606), and have not yet concluded whether any such pronouncements will have a significant effect on our future consolidated financial statements. |
1. ORGANIZATION, LIQUIDITY AN25
1. ORGANIZATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Share-based compensation expenses | Fiscal Years Ended March 31, 2017 March 31, 2016 Vesting of Stock Options and Restricted Stock Units $ 2,186,309 $ 202,844 Total Stock-Based Compensation Expense $ 2,186,309 $ 202,844 Weighted average number of common shares outstanding – basic and diluted 7,764,237 7,393,695 Basic and diluted loss per common share $ (0.28 ) $ (0.03 ) |
2. PROPERTY AND EQUIPMENT (Tabl
2. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, 2017 March 31, 2016 Furniture and office equipment, at cost $ 352,085 $ 394,395 Accumulated depreciation (322,862 ) (358,357 ) $ 29,223 $ 36,038 |
3. PATENTS (Tables)
3. PATENTS (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of patents | March 31, 2017 March 31, 2016 Patents $ 211,645 $ 211,645 Accumulated amortization (126,649 ) (117,484 ) $ 84,996 $ 94,161 |
4. CONVERTIBLE NOTES PAYABLE (T
4. CONVERTIBLE NOTES PAYABLE (Tables) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Convertible Notes Payable [Abstract] | ||
Convertible notes payable | Convertible Notes Payable, Net consisted of the following at June 30, 2017: Principal Unamortized Net Accrued Convertible Notes Payable, Net – Non-Current Portion: November 2014 10% Convertible Notes $ 612,811 $ (114,850 ) $ 497,961 $ 17,875 December 2016 10% Convertible Notes 680,400 (127,450 ) 552,950 19,846 Total Convertible Notes Payable, Net $ 1,293,211 $ (242,300 ) $ 1,050,911 $ 37,721 Convertible Notes Payable, Net consisted of the following at March 31, 2017 (our most recent fiscal year end): Principal Unamortized Net Accrued Convertible Notes Payable, Net – Non-Current Portion: November 2014 10% Convertible Notes $ 612,811 $ (275,363 ) $ 337,448 $ 2,555 December 2016 10% Convertible Notes 680,400 (498,648 ) 181,752 2,836 Total Convertible Notes Payable, Net $ 1,293,211 $ (774,011 ) $ 519,200 $ 5,391 | Convertible Notes Payable, Net consisted of the following at March 31, 2017: Principal Unamortized Net Accrued Convertible Notes Payable, Net – Non-Current Portion: November 2014 10% Convertible Notes $ 612,811 $ (275,363 ) $ 337,448 $ 2,555 December 2016 10% Convertible Notes 680,400 (498,648 ) 181,752 2,836 Total Convertible Notes Payable, Net $ 1,293,211 $ (774,011 ) $ 519,200 $ 5,391 Convertible Notes Payable, Net consisted of the following at March 31, 2016: Principal Unamortized Net Accrued Convertible Notes Payable, Net– Non-Current Portion: November 2014 10% Convertible Notes $ 527,780 $ (27,641 ) $ 500,139 $ 74,036 Total Convertible Notes Payable, Net $ 527,780 $ (27,641 ) $ 500,139 $ 74,036 |
Changes to principal balance of Convertible Note | Activity in the November 2014 10% Convertible Notes Initial principal balance $ 527,780 Increase in principal balance under the second amendment (see above) 165,031 Conversions during the fiscal year ended March 31, 2017 (80,000 ) Balance as of June 30, 2017 $ 612,811 | Activity in the November 2014 10% Convertible Notes Initial principal balance $ 527,780 Increase in principal balance under the second amendment (see above) 165,031 Conversions during the fiscal year ended March 31, 2017 (80,000 ) Balance as of March 31, 2017 $ 612,811 |
5. EQUITY TRANSACTIONS (Tables)
5. EQUITY TRANSACTIONS (Tables) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Equity [Abstract] | ||
Summary of warrant activity | Amount Range of Weighted Warrants outstanding at March 31, 2017 2,604,096 $2.10 - $15.00 $ 3.64 Exercised – n/a n/a Issued – n/a n/a Cancelled/Expired (128,357 ) $5.00 –$9.00 $ 5.80 Warrants outstanding at June 30, 2017 2,475,739 $2.10 - $15.00 $ 3.47 Warrants exercisable at June 30, 2017 2,475,739 $2.10 - $15.00 $ 3.47 | Fiscal Year Ended March 31, 2017 2016 Warrants Weighted Warrants Weighted Outstanding, beginning of year 2,164,094 $ 6.68 1,430,738 $ 6.84 Granted 749,825 $ 4.10 746,657 $ 6.30 Exercised (2,660 ) $ 6.25 (12,049 ) $ 2.15 Cancelled/Forfeited (307,163 ) $ 5.18 (1,252 ) $ 2.10 Outstanding, end of year 2,604,096 $ 3.64 2,164,094 $ 6.68 Exercisable, end of year 2,604,096 $ 3.64 2,164,094 $ 6.68 Weighted average estimated fair value of warrants granted $ 2.65 $ 5.11 |
Assumptions used for warrants granted | Risk free interest rate 0.79% – 1.38% Average expected life 3 months – 2.33 years Expected volatility 68% – 111% Expected dividends None | Year Ended March 31, 2017 2016 Risk free interest rate 0.7% - 1.93% 1.70% Average expected life 3.42 – 5.5 years 5 years Expected volatility 88.2% - 96.0% 98.6% Expected dividends None None |
Summary of warrant activity exercisable and outstanding | Warrants Outstanding Warrants Exercisable Range of Number Weighted Weighted Number Weighted $5.00 or Below 1,860,101 3.78 $ 3.67 1,860,101 $ 3.67 $5.20 - $9.00 711,067 2.77 $ 6.47 705,067 $ 6.47 $9.65 - $15.00 32,928 2.37 $ 12.32 32,928 $ 12.32 2,604,096 2,604,096 | |
RSU's expected to vest | Number of RSUs Vested 46,125 Expected to vest 507,375 Total 553,500 | |
Summary of stock options outstanding | Fiscal Year Ended March 31, 2017 2016 Options Weighted Options Weighted Outstanding, beginning of year 438,547 $ 10.94 501,690 $ 11.00 Granted – N/A – $ N/A Exercised – N/A – $ N/A Cancelled/Forfeited (6,500 ) $ 7.96 (63,143 ) $ 11.45 Outstanding, end of year 432,047 $ 10.98 438,547 $ 10.94 Exercisable, end of year 414,547 $ 11.24 388,414 $ 11.53 Weighted average estimated fair value of options granted N/A $ N/A | |
Detail of options outstanding and exercisable by exercise price | Options Outstanding Options Exercisable Exercise Prices Number Weighted Weighted Number Weighted $3.80 - $9.50 184,047 6.70 years $ 6.82 166,547 $ 6.86 $12.50 163,000 3.39 years $ 12.50 163,000 $ 12.50 $18.00 - $20.50 85,000 1.02 years $ 19.03 85,000 $ 19.03 432,047 414,547 | |
Schedule of stock-based compensation | Fiscal Year Ended March 31, 2017 March 31, 2016 Vesting of stock options $ 2,186,309 $ 202,844 Total Stock-Based Compensation $ 2,186,309 $ 202,844 |
7. OTHER CURRENT LIABILITIES (T
7. OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | ||
Other Current Liabilities | June 30, March 31, 2016 2017 Accrued interest $ 37,721 $ 5,391 Other accrued liabilities 45,124 64,076 Total other current liabilities $ 82,845 $ 69,467 | March 31, 2017 March 31, 2016 Accrued interest $ 5,391 $ 74,038 Other accrued liabilities 64,076 62,657 Total other current liabilities $ 69,467 $ 136,695 |
8. INCOME TAXES (Tables)
8. INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Income Taxes Tables | |
Schedule of deferred tax assets | YEAR ENDED MARCH 31, 2017 2016 Deferred tax assets: Capitalized research and development $ 3,442,000 $ 3,442,000 Net operating loss carryforwards 22,060,000 20,126,000 Stock compensation 318,000 – Total deferred tax assets 25,820,000 23,568,000 Total deferred tax liabilities – – Net deferred tax assets 25,820,000 23,568,000 Valuation allowance for deferred tax assets (25,820,000 ) (23,568,000 ) Net deferred tax assets $ – $ – |
Provision for income taxes | 2017 2016 Income taxes (benefit) at federal statutory rate of 34% $ (2,484,000 ) $ (1,686,000 ) State income tax, net of federal benefit (438,000 ) (298,000 ) Tax effect on non-deductible expenses and credits 382,000 69,000 Change in valuation allowance 1 2,540,000 1,915,000 $ – $ – ______________ (1) |
10. SEGMENTS (Tables)
10. SEGMENTS (Tables) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Segment Reporting [Abstract] | ||
Schedule of segments | Three Months Ended June 30, 2017 2016 Revenues: Aethlon $ – $ 4,635 ESI – – Total Revenues $ 392,073 $ 4,635 Operating Losses: Aethlon $ (1,141,406 ) $ (1,092,990 ) ESI (18,843 ) (38,662 ) Total Operating Loss $ (1,160,249 ) $ (1,131,652 ) Net Losses: Aethlon $ (1,826,708 ) $ (2,097,887 ) ESI (18,843 ) (38,662 ) Net Loss Before Non-Controlling Interests $ (1,845,551 ) $ (2,136,549 ) Cash: Aethlon $ 326,464 $ 1,291,537 ESI 742 2,722 Total Cash $ 327,206 $ 1,294,259 Total Assets: Aethlon $ 492,324 $ 1,419,226 ESI 16,827 41,806 Total Assets $ 509,151 $ 1,461,032 Capital Expenditures: Aethlon $ 23,705 $ 1,545 ESI – – Capital Expenditures $ 23,705 $ 1,545 Depreciation and Amortization: Aethlon $ 9,326 $ 5,323 ESI – 4,895 Total Depreciation and Amortization $ 9,326 $ 10,218 Interest Expense: Aethlon $ (188,604 ) $ (42,167 ) ESI – – Total Interest Expense $ (188,604 ) $ (42,167 ) | Fiscal Years Ended March 31, 2017 2016 Revenues: Aethlon $ 392,073 $ 886,572 ESI – – Total Revenues $ 392,073 $ 886,572 Operating Losses: Aethlon $ (5,945,293 ) $ (3,953,402 ) ESI (153,064 ) (431,432 ) Total Operating Loss $ (6,098,357 ) $ (4,384,834 ) Net Losses: Aethlon $ (7,153,662 ) $ (4,527,184 ) ESI (153,064 ) (431,432 ) Net Loss Before Non-Controlling Interests $ (7,306,726 ) $ (4,958,616 ) Cash: Aethlon $ 1,558,667 $ 2,114,285 ESI 1,034 9,452 Total Cash $ 1,559,701 $ 2,123,737 Total Assets: Aethlon $ 1,698,249 $ 2,475,686 ESI 28,119 53,430 Total Assets $ 1,726,368 $ 2,529,116 Capital Expenditures: Aethlon $ 16,433 $ 9,307 ESI – – Capital Expenditures $ 16,433 $ 9,307 Depreciation and Amortization: Aethlon $ 22,370 $ 18,943 ESI 10,043 19,581 Total Depreciation and Amortization $ 32,413 $ 38,524 Interest Expense: Aethlon $ 304,330 $ 573,782 ESI – – Total Interest Expense $ 304,330 $ 573,782 |
12. COMMITMENTS AND CONTINGEN33
12. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease commitments | Fiscal Year Ending 2018 2019 9635 Granite Ridge Drive, Suite 100, San Diego, CA 92123 office lease $ 78,156 $ 21,446 11585 Sorrento Valley Road, Suite 109, San Diego, CA 92121 office lease 47,054 – Total Lease Commitments $ 125,210 $ 21,446 |
9. Stock Compensation (June 334
9. Stock Compensation (June 30, 2017 Note) (Tables) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Share based compensation expense | Fiscal Years Ended March 31, 2017 March 31, 2016 Vesting of Stock Options and Restricted Stock Units $ 2,186,309 $ 202,844 Total Stock-Based Compensation Expense $ 2,186,309 $ 202,844 Weighted average number of common shares outstanding – basic and diluted 7,764,237 7,393,695 Basic and diluted loss per common share $ (0.28 ) $ (0.03 ) | |
Options vested and expected to vest | Number of RSUs Vested 46,125 Expected to vest 507,375 Total 553,500 | |
Summary of stock options outstanding | Fiscal Year Ended March 31, 2017 2016 Options Weighted Options Weighted Outstanding, beginning of year 438,547 $ 10.94 501,690 $ 11.00 Granted – N/A – $ N/A Exercised – N/A – $ N/A Cancelled/Forfeited (6,500 ) $ 7.96 (63,143 ) $ 11.45 Outstanding, end of year 432,047 $ 10.98 438,547 $ 10.94 Exercisable, end of year 414,547 $ 11.24 388,414 $ 11.53 Weighted average estimated fair value of options granted N/A $ N/A | |
Restricted Stock [Member] | ||
Share based compensation expense | Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Vesting of stock options and restricted stock units $ 280,911 $ 50,710 Total stock-based compensation expense $ 280,911 $ 50,710 Weighted average number of common shares outstanding – basic and diluted 8,805,522 7,622,393 Basic and diluted loss per common share attributable to stock-based compensation expense $ (0.03 ) $ (0.01 ) | |
Options vested and expected to vest | Number of RSUs Vested 46,125 Expected to vest 461,250 Total 507,375 | |
Options [Member] | ||
Options vested and expected to vest | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Vested 414,547 $ 11.24 4.05 Expected to vest 52,000 $ 2.80 8.71 Total 466,547 | |
Schedule of stock ptions valuation assumptions | Risk free interest rate 2.21% Average expected life 10 years Expected volatility 92.14% Expected dividends None |
3. Research and Development E35
3. Research and Development Expenses (June 30, 2017 Note) (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Research and Development [Abstract] | |
Research and Development Expenses | June 30, June 30, 2017 2016 Three months ended $ 157,463 $ 117,664 |
1. ORGANIZATION AND SUMMARY OF
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Based Compensation | $ 280,911 | $ 50,710 | $ 2,186,309 | $ 202,844 |
Weighted average number of common shares outstanding – basic and diluted | 8,805,522 | 7,622,393 | 7,764,237 | 7,393,695 |
Basic and diluted loss per common share | $ (.21) | $ (.28) | $ (.94) | $ (0.66) |
Vesting of Stock Options | ||||
Stock Based Compensation | $ 2,186,309 | $ 202,844 | ||
Share-based Compensation [Member] | ||||
Basic and diluted loss per common share | $ (.28) | $ (.03) |
1. ORGANIZATION AND SUMMARY O37
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated deficit | $ (95,619,939) | $ (93,778,156) | $ (86,502,043) | |
Noncontrolling interests | $ (84,735) | (80,967) | (50,354) | |
Cash equivalents | 0 | 0 | ||
Asset impairment charges | $ 0 | $ 0 | ||
Shares considered antidilutive | 3,893,303 | 2,771,780 | 3,908,292 | 2,710,107 |
Amortization of deferred financing costs | $ 27,641 | $ 144,683 | ||
Government contract revenue | $ 0 | $ 4,635 | 392,073 | 886,572 |
Derivative liabilities | 0 | 0 | ||
Research and development expenses | $ 157,463 | $ 117,664 | 673,000 | 782,000 |
DARPA [Member] | ||||
Government contract revenue | 387,438 | 863,011 | ||
Battelle | ||||
Government contract revenue | $ 4,635 | 23,561 | ||
ESI [Member] | ||||
Equity ownership percentage | 80.00% | |||
Noncontrolling interest percentage | 20.00% | |||
Noncontrolling interests | $ (80,967) | $ (50,354) |
2. PROPERTY AND EQUIPMENT (Deta
2. PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Property, Plant and Equipment [Abstract] | |||
Furniture and office equipment, at cost | $ 352,085 | $ 394,395 | |
Accumulated depreciation | (322,862) | (358,357) | |
Furniture and office equipment, net | $ 45,893 | $ 29,223 | $ 36,038 |
2. PROPERTY AND EQUIPMENT (De39
2. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 23,000 | $ 29,000 |
3. Patents (Details)
3. Patents (Details) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Patents | $ 211,645 | $ 211,645 | |
Accumulated amortization | (126,649) | (117,484) | |
Finite-Lived Intangible Assets, Net | $ 82,705 | $ 84,996 | $ 94,161 |
3. Patents (Details Narrative)
3. Patents (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of patents | $ 9,000 | $ 9,000 |
Weighted average remaining life of patents | 4 years |
4. CONVERTIBLE NOTES PAYABLE (D
4. CONVERTIBLE NOTES PAYABLE (Details - Convertible notes) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Convertible notes payable, principal | $ 1,293,211 | $ 1,293,211 | $ 527,780 |
Unamortized discount | (242,300) | (774,011) | (27,641) |
Convertible notes payable, net | 1,050,911 | 519,200 | 500,139 |
Accrued interest | 37,721 | 5,391 | 74,036 |
November 2014 10% Convertible Notes | |||
Convertible notes payable, principal | 527,780 | 527,780 | |
Accrued interest | 2,555 | $ 74,036 | |
December 2016 10% Convertible Notes [Member] | |||
Convertible notes payable, principal | 680,400 | 680,400 | |
Unamortized discount | (127,450) | (498,648) | |
Convertible notes payable, net | 552,950 | 181,752 | |
Accrued interest | $ 19,846 | $ 2,836 |
4. CONVERTIBLE NOTES PAYABLE 43
4. CONVERTIBLE NOTES PAYABLE (Details - Convertible note activity) - USD ($) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Convertible debt, beginning balance | $ 1,293,211 | $ 527,780 |
Conversions during the period | (80,000) | |
Convertible debt, ending balance | 1,293,211 | 1,293,211 |
November 2014 10% Convertible Notes | ||
Convertible debt, beginning balance | $ 527,780 | 527,780 |
Increase in principal balance under the second amendment | 165,031 | |
Conversions during the period | (80,000) | |
Convertible debt, ending balance | $ 527,780 |
4. CONVERTIBLE NOTES PAYABLE 44
4. CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Interest and debt expense | $ (188,604) | $ (42,167) | $ (304,330) | $ (573,782) |
Amortization of debt discounts | 154,802 | |||
Amortization of deferred financing costs | 27,641 | 144,683 | ||
Interest expense debt | 33,802 | 13,882 | ||
Proceeds from convertible notes payable | 577,460 | 0 | ||
Unamortized debt discount | 242,300 | 774,011 | 27,641 | |
Convertible notes payable balance | 1,050,911 | 519,200 | 500,139 | |
Notes converted into common stock, value | 80,000 | |||
Loss on debt conversion | (376,909) | $ (616,889) | (558,198) | 0 |
Convertible Debt [Member] | ||||
Interest and debt expense | 81,102 | 52,778 | ||
Amortization of debt discounts | 27,641 | 372,550 | ||
Amortization of deferred financing costs | 192,798 | 144,683 | ||
Interest expense debt | 301,541 | 570,011 | ||
Beneficial conversion feature | $ 287,647 | |||
November 2014 10% Convertible Notes | ||||
Notes converted into common stock, value | 80,000 | |||
November 2014 10% Convertible Notes | Second Amendment [Member] | ||||
Debt face amount | $ 691,811 | |||
Number of securities that warrants may convert to | 30,000 | |||
Stated interest rate | 10.00% | |||
Common stock purchase price | $ 5 | |||
Loss on debt conversion | $ (536,889) | |||
Extension fee expense | 80,000 | |||
November 2014 10% Convertible Notes | Second Amendment [Member] | Fair value of prior warrants [Member] | ||||
Loss on debt conversion | (287,676) | |||
November 2014 10% Convertible Notes | Second Amendment [Member] | Beneficial conversion feature [Member] | ||||
Loss on debt conversion | (325,206) | |||
November 2014 10% Convertible Notes | Second Amendment [Member] | Debt discount [Member] | ||||
Loss on debt conversion | $ 75,993 | |||
November 2014 10% Convertible Notes | Third Amendment [Member] | ||||
Debt maturity date | Jul. 1, 2018 | |||
Conversion price | $ 3 | |||
Beneficial conversion feature | $ 233,748 | |||
Loss on debt conversion | 58,691 | |||
December 2016 10% Convertible Notes [Member] | ||||
Debt face amount | $ 680,400 | $ 680,400 | ||
Number of securities that warrants may convert to | 127,575 | |||
Stated interest rate | 10.00% | |||
Debt maturity date | Jul. 1, 2019 | Jul. 1, 2018 | ||
Proceeds from convertible notes payable | $ 600,000 | |||
Conversion price | $ 3 | $ 4 | ||
Common stock purchase price | $ 4.50 | |||
Unamortized debt discount | $ 127,450 | $ 498,648 | ||
Legal fees | 22,500 | |||
Bank fees | 40 | |||
Convertible notes payable balance | 552,950 | 181,752 | ||
Loss on debt conversion | $ (198,254) | |||
December 2016 10% Convertible Notes [Member] | Fair Value of Warrants [Member] | ||||
Deferred finance costs | 102,940 | |||
Unamortized debt discount | 232,718 | |||
December 2016 10% Convertible Notes [Member] | Beneficial conversion feature [Member] | ||||
Unamortized debt discount | 262,718 | |||
December 2016 10% Convertible Notes [Member] | Original Issue Discount [Member] | ||||
Unamortized debt discount | 50,400 | |||
December 2016 10% Convertible Notes [Member] | Due Diligence Fee [Member] | ||||
Unamortized debt discount | $ 30,000 |
5. EQUITY TRANSACTIONS (Details
5. EQUITY TRANSACTIONS (Details - Warrant activity) - Warrants - $ / shares | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | |
Warrants outstanding, beginning balance | 2,604,096 | 2,164,094 | 1,430,738 |
Warrants granted | 749,825 | 746,657 | |
Warrants exercised | (2,660) | (12,049) | |
Warrants cancelled/forfeited | (128,357) | (307,163) | (1,252) |
Warrants outstanding, ending balance | 2,475,739 | 2,604,096 | 2,164,094 |
Warrants exercisable | 2,164,094 | 2,164,094 | |
Outstanding, Weighted Average Exercise Price | $ 3.64 | $ 6.68 | $ 6.84 |
Granted, Weighted Average Exercise Price | 4.10 | 6.30 | |
Exercised, Weighted Average Exercise Price | 6.25 | 2.15 | |
Cancelled/Forfeited, Weighted Average Exercise Price | 5.18 | 2.10 | |
Outstanding Weighted Average Exercise Price | 5.80 | 3.64 | 6.68 |
Exercisable, Weighted Average Exercise Price | 3.64 | 6.68 | |
Warrants Weighted average estimated fair value of warrants granted | $ 3.47 | $ 2.65 | $ 5.11 |
5. EQUITY TRANSACTIONS (Detai46
5. EQUITY TRANSACTIONS (Details - Warrant assumptions) - Warrants - $ / shares | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Risk free interest rate, minimum | 0.70% | |
Risk free interest rate, maximum | 1.93% | |
Risk free interest rate | 1.70% | |
Average expected term | 3.42-5.5 years | 5 years |
Expected Volatility Rate, Minimum | 88.20% | |
Expected volatility rate | 98.60% | |
Expected Volatility Rate, Maximum | 96.00% | |
Expected dividends | $ 0 | $ 0 |
5. EQUITY TRANSACTIONS (Detai47
5. EQUITY TRANSACTIONS (Details - Warrants exercisable) - Warrants - $ / shares | 12 Months Ended | |||
Mar. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Warrants outstanding | 2,604,096 | 2,475,739 | 2,164,094 | 1,430,738 |
Weighted Average Exercise Price, outstanding | $ 3.64 | $ 5.80 | $ 6.68 | $ 6.84 |
Warrants exercisable | 2,164,094 | |||
$5.00 or Below | ||||
Warrants outstanding | 1,860,101 | |||
Weighted Average Remaining Life (Years) | 3 years 9 months 11 days | |||
Weighted Average Exercise Price, outstanding | $ 3.67 | |||
Warrants exercisable | 1,860,101 | |||
Weighted Average Exercise Price, exercisable | $ 3.67 | |||
$5.20 - $9.00 | ||||
Warrants outstanding | 711,067 | |||
Weighted Average Remaining Life (Years) | 2 years 9 months 7 days | |||
Weighted Average Exercise Price, outstanding | $ 6.47 | |||
Warrants exercisable | 705,067 | |||
Weighted Average Exercise Price, exercisable | $ 6.47 | |||
$9.65 - $15.00 | ||||
Warrants outstanding | 32,928 | |||
Weighted Average Remaining Life (Years) | 2 years 4 months 13 days | |||
Weighted Average Exercise Price, outstanding | $ 12.32 | |||
Warrants exercisable | 32,928 | |||
Weighted Average Exercise Price, exercisable | $ 12.32 |
5. EQUITY TRANSACTIONS (Detai48
5. EQUITY TRANSACTIONS (Details - RSU's outstanding) - Restricted Stock Units (RSUs) [Member] - shares | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
RSU's vested | 46,125 | 46,125 |
RSU's expected to vest | 461,250 | 507,375 |
Total RSU's outstanding | 507,375 | 553,500 |
5. EQUITY TRANSACTIONS (Detai49
5. EQUITY TRANSACTIONS (Details - Option activity) - Stock Options - $ / shares | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock options Outstanding, beginning balance | 432,047 | 438,547 | 501,690 |
Stock options granted | 34,500 | 0 | 0 |
Stock options exercised | 0 | 0 | 0 |
Stock options cancelled/forfeited | 0 | (6,500) | (63,143) |
Stock options outstanding, ending balance | 466,547 | 432,047 | 438,547 |
Stock options exercisable | 414,547 | 414,547 | 388,414 |
Outstanding, Weighted Average Exercise Price, beginning price | $ 10.98 | $ 10.94 | $ 11 |
Granted, Weighted Average Exercise Price | 1.68 | ||
Exercised, Weighted Average Exercise Price | |||
Cancelled/Forfeited, Weighted Average Exercise Price | 7.96 | 11.45 | |
Outstanding Weighted Average Exercise Price, ending price | 10.30 | 10.98 | 10.94 |
Exercisable, Weighted Average Exercise Price | $ 11.24 | 11.24 | 11.53 |
Stock options Weighted average estimated fair value of warrants granted |
5. EQUITY TRANSACTIONS (Detai50
5. EQUITY TRANSACTIONS (Details - Options exercisable) - Stock Options - $ / shares | 12 Months Ended | |||
Mar. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Stock options outstanding | 432,047 | 466,547 | 438,547 | 501,690 |
Outstanding Weighted Average Exercise Price | $ 10.98 | $ 10.30 | $ 10.94 | $ 11 |
Stock options exercisable | 414,547 | 414,547 | 388,414 | |
Stock options exercisable Weighted Average Exercise Price | $ 11.24 | $ 11.24 | $ 11.53 | |
$3.80 - $9.50 [Member] | ||||
Stock options outstanding | 184,047 | |||
Weighted Average Remaining Life (Years) | 6 years 8 months 12 days | |||
Outstanding Weighted Average Exercise Price | $ 6.82 | |||
Stock options exercisable | 166,547 | |||
Stock options exercisable Weighted Average Exercise Price | $ 6.86 | |||
$12.50 [Member] | ||||
Stock options outstanding | 163,000 | |||
Weighted Average Remaining Life (Years) | 3 years 4 months 20 days | |||
Outstanding Weighted Average Exercise Price | $ 12.50 | |||
Stock options exercisable | 163,000 | |||
Stock options exercisable Weighted Average Exercise Price | $ 12.50 | |||
$18.00 - $20.50 [Member] | ||||
Stock options outstanding | 85,000 | |||
Weighted Average Remaining Life (Years) | 1 year 7 days | |||
Outstanding Weighted Average Exercise Price | $ 19.03 | |||
Stock options exercisable | 85,000 | |||
Stock options exercisable Weighted Average Exercise Price | $ 19.03 |
5. EQUITY TRANSACTIONS (Detai51
5. EQUITY TRANSACTIONS (Details - Stockbased Compensation) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Based Compensation | $ 280,911 | $ 50,710 | $ 2,186,309 | $ 202,844 |
Stock Options | ||||
Stock Based Compensation | $ 2,186,309 | $ 202,844 |
5. EQUITY TRANSACTIONS (Detai52
5. EQUITY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Proceeds from issuance of common stock and warrants | $ 1,903 | $ 0 | $ 2,759,355 | $ 5,606,755 |
Adjustment of warrants | 0 | 345,841 | 345,841 | 0 |
Unrecognized stock option expense | $ 3,203,208 | |||
Weighted average remaining vesting period | 2 years 7 months 13 days | |||
Stock Based Compensation | $ 280,911 | $ 50,710 | $ 2,186,309 | $ 202,844 |
Restricted Stock Units (RSUs) [Member] | ||||
RSU's vested | 46,125 | 46,125 | ||
RSU's exchanged | 36,150 | |||
RSU's cancelled in exchange for withholding tax | 13,146 | |||
Optioins cancelled for withholding tax | $ 75,550 | |||
Stock Based Compensation | $ 260,699 | |||
Amendment of November 2014 Investment Documents [Member] | ||||
Warrants issued | 30,000 | |||
Fair value of warrants | $ 111,900 | |||
December 2016 10% Convertible Notes [Member] | ||||
Warrants issued | 127,575 | |||
Fair value of warrants | $ 380,174 | |||
March 2017 Equity Financing [Member] | ||||
Warrants issued | 575,000 | |||
Fair value of warrants | $ 1,493,390 | |||
2010 Stock Incentive Plan | ||||
Shares authorized | 3,170,000 | |||
Shares available for issuance | 2,241,549 | |||
Stock based compensation expense | $ 2,076,535 | |||
2005 Director Compensation Plan [Member] | ||||
Shares available for issuance | 0 | |||
Options granted | 26,757 | |||
Options forfeited | 21,756 | |||
Options exercised | 5,000 | |||
2012 Directors Compensation Program [Member] | ||||
Options granted | 79,309 | 11,053 | ||
Options forfeited | 79,309 | |||
2000 Stock Option Plan | ||||
Shares available for future issuance | 9,800 | |||
Amendment of December 2014 Warrants [Member] | ||||
Adjustment of warrants | $ 345,841 | |||
March 2017 Equity Financing [Member] | ||||
Proceeds from issuance of common stock and warrants | $ 1,804,250 | |||
Number of securities that warrants may convert to | 575,000 | |||
Reduction of price [Member] | March 2017 Equity Financing [Member] | ||||
Fair value of warrants | $ 219,048 | |||
Warrant exchange [Member] | March 2017 Equity Financing [Member] | ||||
Warrants issued | (264,000) | |||
Fair value of warrants | $ 528,000 | |||
H.C. Wainwright [Member] | ||||
Proceeds from issuance of common stock and warrants | $ 955,206 | |||
Stock sold new, shares issued | 1,000 | 216,078 | ||
Three Investors [Member] | ||||
Stock issued for exercise of warrants, shares issued | 2,660 | |||
Stock issued upon conversion of warrants | 2,660 | |||
Outside Directors and Executive Officers [Member] | ||||
RSU's exchanged for common stock, RSU's exchanged | 149,864 | |||
RSU's exchanged for common stock, Common stock issued | 149,864 | |||
James A. Joyce [Member] | ||||
RSU's granted | 634,000 | |||
RSU's vested | 158,500 | |||
Rodney S. Kenley [Member] | ||||
RSU's granted | 52,000 | |||
RSU's vested | 13,000 | |||
James B. Frakes [Member] | ||||
RSU's granted | 52,000 | |||
RSU's vested | 13,000 | |||
Non Employee Directors [Member] | ||||
RSU's granted | 49,296 | |||
RSU's vested | 12,324 | |||
Executives [Member] | Restricted Stock Units (RSUs) [Member] | ||||
RSU's exchanged | 184,500 | |||
RSU's cancelled | 70,786 | |||
RSU's cancelled, common stock issued | 113,714 |
6. RELATED PARTY TRANSACTIONS (
6. RELATED PARTY TRANSACTIONS (Details Narrative) | Mar. 31, 2017USD ($) |
Related Party Transactions Details Narrative | |
Accrued unpaid Board fees | $ 28,250 |
7. OTHER CURRENT LIABILITIES (D
7. OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Other Liabilities, Current [Abstract] | |||
Accrued interest | $ 37,721 | $ 5,391 | $ 74,038 |
Other accrued liabilities | 64,076 | 62,657 | |
Total other current liabilities | $ 82,845 | $ 69,467 | $ 136,695 |
8. INCOME TAXES (Details - Defe
8. INCOME TAXES (Details - Deferred tax assets) - USD ($) | Mar. 31, 2017 | Mar. 31, 2016 |
Deferred tax assets: | ||
Capitalized research and development | $ 3,442,000 | $ 3,442,000 |
Net operating loss carryforwards | 22,060,000 | 20,126,000 |
Stock compensation | 318,000 | 0 |
Total deferred tax assets | 25,820,000 | 23,568,000 |
Total deferred tax liabilities | 0 | 0 |
Net deferred tax assets | 25,820,000 | 23,568,000 |
Valuation allowance for deferred tax assets | (25,820,000) | (23,568,000) |
Net deferred tax assets | $ 0 | $ 0 |
8. INCOME TAXES (Details - Prov
8. INCOME TAXES (Details - Provision for income taxes) - USD ($) | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Income Tax Disclosure [Abstract] | |||
Income taxes (benefit) at federal statutory rate of 34% | $ (2,484,000) | $ (1,686,000) | |
State income tax, net of federal benefit | (438,000) | (298,000) | |
Tax effect on non-deductible expenses and credits | 382,000 | 69,000 | |
Change in valuation allowance | [1] | 2,540,000 | 1,915,000 |
Income Tax Expense (Benefit) | $ 0 | $ 0 | |
[1] | Pursuant to Internal Revenue Code Sections 382, use of our tax net operating loss carryforwards may be limited. |
8. INCOME TAXES (Details Narrat
8. INCOME TAXES (Details Narrative) | 12 Months Ended |
Mar. 31, 2017USD ($) | |
Net operating loss beginning expiration date | Dec. 31, 2023 |
Uncertain tax positions | $ 0 |
Federal | |
Net operating loss carryforwards | 57,000,000 |
State | |
Net operating loss carryforwards | $ 45,000,000 |
9. DARPA CONTRACT AND RELATED58
9. DARPA CONTRACT AND RELATED REVENUE RECOGNITION (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue Recognition, Milestone Method [Line Items] | ||
Revenue Recognition, Milestone Method, Revenue Recognized | $ 387,438 | $ 863,011 |
Milestone 2.6.1.3 [Member] | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Revenue Recognition, Milestone Method, Revenue Recognized | 193,719 | |
Milestone 2.6.1.4 [Member] | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Revenue Recognition, Milestone Method, Revenue Recognized | 193,719 | |
Milestone M6 [Member] | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Revenue Recognition, Milestone Method, Revenue Recognized | 186,164 | |
Milestone 2.5.1.1 [Member] | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Revenue Recognition, Milestone Method, Revenue Recognized | 186,164 | |
Milestone 2.5.2.2 [Member] | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Revenue Recognition, Milestone Method, Revenue Recognized | 296,964 | |
Milestone 2.6.1.1 [Member] | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Revenue Recognition, Milestone Method, Revenue Recognized | $ 193,719 |
10. Segments (Details)
10. Segments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues | $ 0 | $ 4,635 | $ 392,073 | $ 886,572 | |
Operating Losses | (1,160,249) | (1,131,652) | (6,098,357) | (4,384,834) | |
Net Losses | (1,845,551) | (2,136,549) | (7,306,726) | (4,958,616) | |
Cash | 327,206 | 1,294,259 | 1,559,701 | 2,123,737 | $ 855,596 |
Total Assets | 509,151 | 1,461,032 | 1,726,368 | 2,529,116 | |
Capital Expenditures | 23,705 | 1,545 | 16,433 | 9,307 | |
Depreciation and Amortization | 9,326 | 10,218 | 32,413 | 38,524 | |
Interest Expense | 188,604 | 42,167 | 304,330 | 573,782 | |
Aethlon | |||||
Revenues | 392,073 | 886,572 | |||
Operating Losses | (1,141,406) | (1,092,990) | (5,945,293) | (3,953,402) | |
Net Losses | (1,826,708) | (2,097,887) | (7,153,662) | (4,527,184) | |
Cash | 326,464 | 1,291,537 | 1,558,667 | 2,114,285 | |
Total Assets | 492,324 | 1,419,226 | 1,698,249 | 2,475,686 | |
Capital Expenditures | 23,705 | 1,545 | 16,433 | 9,307 | |
Depreciation and Amortization | 9,326 | 5,323 | 22,370 | 18,943 | |
Interest Expense | 188,604 | 42,167 | 304,330 | 573,782 | |
ESI [Member] | |||||
Revenues | 0 | 0 | |||
Operating Losses | (18,843) | (38,662) | (153,064) | (431,432) | |
Net Losses | (18,843) | (38,662) | (153,064) | (431,432) | |
Cash | 742 | 2,722 | 1,034 | 9,452 | |
Total Assets | 16,827 | 41,806 | 28,119 | 53,430 | |
Capital Expenditures | 0 | 0 | 0 | 0 | |
Depreciation and Amortization | 0 | 4,895 | 10,043 | 19,581 | |
Interest Expense | $ 0 | $ 0 | $ 0 | $ 0 |
12. COMMITMENTS AND CONTINGEN60
12. COMMITMENTS AND CONTINGENCIES (Details -Rent) | Mar. 31, 2017USD ($) |
Operating lease payments year 2018 | $ 125,210 |
Operating lease payments year 2019 | 21,446 |
9635 Granite Ridge Drive [Member] | |
Operating lease payments year 2018 | 78,156 |
Operating lease payments year 2019 | 47,054 |
11585 Sorrenty Valley Road [Member] | |
Operating lease payments year 2018 | 21,446 |
Operating lease payments year 2019 | $ 0 |
12. COMMITMENTS AND CONTINGEN61
12. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 35,000 | $ 34,000 | $ 151,000 | $ 144,000 |
1. Nature of Business and Basis
1. Nature of Business and Basis of presentation (June 30, 2017 Note) (Details Narrative) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ (95,619,939) | $ (93,778,156) | $ (86,502,043) |
2. Loss per Common Share (Jun63
2. Loss per Common Share (June 30, 2017 Note) (Details Narrative) - shares | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Potential common shares excluded from earnings per share calculation due to being antidilutive | 3,893,303 | 2,771,780 | 3,908,292 | 2,710,107 | |
Weighted average common shares outstanding | 8,805,522 | 7,622,393 | 7,764,237 | 7,393,695 | |
Restricted Stock Units (RSUs) [Member] | |||||
Weighted average common shares outstanding | 46,125 |
3. Research and Development E64
3. Research and Development Expenses (June 30, 2017 Note) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Research and Development [Abstract] | ||||
Research and development expense | $ 157,463 | $ 117,664 | $ 673,000 | $ 782,000 |
5. Convertible Notes Payable (J
5. Convertible Notes Payable (June 30, 2017) (Details - Convertible Notes Payable) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Convertible notes payable, principal | $ 1,293,211 | $ 1,293,211 | $ 527,780 |
Unamortized discount | (242,300) | (774,011) | (27,641) |
Convertible notes payable, net | 1,050,911 | 519,200 | 500,139 |
Accrued interest | 37,721 | 5,391 | $ 74,036 |
November 2014 Convertible Notes [Member] | |||
Convertible notes payable, principal | 612,811 | 612,811 | |
Unamortized discount | (114,850) | (275,363) | |
Convertible notes payable, net | 497,961 | 337,448 | |
Accrued interest | 17,875 | 2,555 | |
December 2016 10% Convertible Notes [Member] | |||
Convertible notes payable, principal | 680,400 | 680,400 | |
Unamortized discount | (127,450) | (498,648) | |
Convertible notes payable, net | 552,950 | 181,752 | |
Accrued interest | $ 19,846 | $ 2,836 |
5. Convertible Notes Payable 66
5. Convertible Notes Payable (June 30, 2017 Note) (Details - Convertible note activity) - USD ($) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Convertible debt, beginning balance | $ 1,293,211 | $ 527,780 |
Increase in principal balance under the second amendment | 165,031 | |
Conversions during the period | (80,000) | |
Convertible debt, ending balance | $ 1,293,211 | $ 1,293,211 |
5. Convertible Notes Payable 67
5. Convertible Notes Payable (June 30, 2017 Note) (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Interest expense debt | $ 33,802 | $ 13,882 | |||
Amortization of debt discount | 154,802 | ||||
Amortization of deferred financing costs | 27,641 | ||||
Total interest expense | 188,604 | 41,523 | |||
Loss on extinguishment of debt | (376,909) | $ (616,889) | $ (558,198) | $ 0 | |
Convertible Notes 10% November 2014 Amend 2 [Member] | |||||
Loss on extinguishment of debt | (536,889) | ||||
Extension fee expense | 80,000 | ||||
Convertible Notes 10% November 2014 Amend 2 [Member] | Beneficial Conversion Feature [Member] | |||||
Loss on extinguishment of debt | (325,206) | ||||
Convertible Notes 10% November 2014 Amend 2 [Member] | Fair Value of Warrants [Member] | |||||
Loss on extinguishment of debt | (287,676) | ||||
Convertible Notes 10% November 2014 Amend 2 [Member] | Debt Discount [Member] | |||||
Loss on extinguishment of debt | 75,993 | ||||
November 2014 10% Convertible Notes Third Amendment [Member] | |||||
Loss on extinguishment of debt | 58,691 | ||||
November 2014 10% Convertible Notes Third Amendment [Member] | Beneficial Conversion Feature [Member] | |||||
Beneficial conversion feature | $ 233,748 | ||||
Convertible Notes 10% November 2014 June [Member] | |||||
Debt maturity date | Jul. 1, 2019 | ||||
Conversion price per share | $ 3 | ||||
Loss on extinguishment of debt | $ (178,655) | ||||
December 2016 10% Convertible Notes [Member] | |||||
Face amount | 680,400 | $ 680,400 | |||
Original Issue Discount | $ 598,376 | ||||
Amortization of deferred financing costs | $ 30,000 | ||||
Debt maturity date | Jul. 1, 2019 | Jul. 1, 2018 | |||
Conversion price per share | $ 3 | $ 4 | |||
Loss on extinguishment of debt | $ (198,254) | ||||
December 2016 10% Convertible Notes [Member] | Deferred Financing Costs [Member] | |||||
Original Issue Discount | 102,940 | ||||
December 2016 10% Convertible Notes [Member] | Warrant [Member] | |||||
Original Issue Discount | 232,718 | ||||
December 2016 10% Convertible Notes [Member] | Beneficial Conversion Feature [Member] | |||||
Original Issue Discount | 262,718 | ||||
November 2014 Convertible Notes [Member] | |||||
Face amount | $ 692,811 |
6. Equity Transactions (June 30
6. Equity Transactions (June 30, 2017 Note) (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | |
Loss on share for warrant exchanges | $ (119,789) | $ 0 | |
Restricted Stock [Member] | |||
Stock issued for services, shares | 15,000 | ||
Stock issued for services, value | $ 33,600 | ||
Restricted Stock Units (RSUs) [Member] | |||
Withholding tax paid in return for cancellation of shares | 13,146 | ||
H.C. Wainwright [Member] | |||
Proceeds from sale of stock | 1,903 | ||
Commissions | 63 | ||
Other offering expenses | $ 133 | ||
Stock issued | 1,000 | 216,078 | |
Two Investors [Member] | Restricted Stock [Member] | |||
Shares exchanged, shares issued | 11,497 | ||
Two Investors [Member] | Warrant [Member] | |||
Shares exchanged, shares converted | 22,993 | ||
Two Institutional Investors [Member] | Restricted Stock [Member] | |||
Shares exchanged, shares issued | 57,844 | ||
Two Institutional Investors [Member] | Warrant [Member] | |||
Shares exchanged, shares converted | 77,125 | ||
Four Employees [Member] | |||
Options issued | 34,500 | ||
Chief Executive Officer [Member] | |||
Restricted stock issued for cancellation of previously recorded stock share issuance | 32,674 | ||
Withholding tax paid in return for cancellation of shares | 35,326 | ||
Executives [Member] | Restricted Stock Units (RSUs) [Member] | |||
Shares exchanged, shares converted | 46,125 | ||
Executives [Member] | Common Stock [Member] | |||
Shares exchanged, shares issued | 22,470 | ||
Withholding tax paid in return for cancellation of shares | 23,655 |
7. Related Party Transactions (
7. Related Party Transactions (June 30, 2017 Note) (Details Narrative) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Due to related parties | $ 48,366 | $ 57,866 | $ 145,112 |
Outside Directors [Member] | |||
Due to related parties | $ 18,750 |
8. Other Current Liabilities (J
8. Other Current Liabilities (June 30, 2017 Note) (Details) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Payables and Accruals [Abstract] | |||
Accrued interest | $ 37,721 | $ 5,391 | $ 74,038 |
Other accrued liabilities | 45,124 | 64,076 | |
Total other current liabilities | $ 82,845 | $ 69,467 | $ 136,695 |
9. Stock Compensation (June 371
9. Stock Compensation (June 30, 2017 Note) (Details - Share based compensation) - USD ($) | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Vesting of stock options and restricted stock units | $ 280,911 | $ 50,710 |
Basic and diluted loss per common share attributable to stock-based compensation expense | $ (0.03) | $ (0.01) |
9. Stock Compensation (June 372
9. Stock Compensation (June 30, 2017 Note) (Details - RSU's outstanding) - Restricted Stock Units (RSUs) [Member] - shares | 3 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Mar. 31, 2017 | |
RSU's vested | 46,125 | 46,125 |
RSU's expected to vest | 461,250 | 507,375 |
Total RSU's outstanding | 507,375 | 553,500 |
9. Stock Compensation (June 373
9. Stock Compensation (June 30, 2017 Note) (Details - Options vested and expected to vest) - Options [Member] | 3 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Options vested | 414,547 |
Options expected to vest | 52,000 |
Total options outstanding | 466,547 |
Weighted average exercise price options vested | $ / shares | $ 11.24 |
Weighted average exercise price options expected to vest | $ / shares | $ 2.80 |
Weighted average remaining contractual term options vested | 4 years 18 days |
Weighted average remaining contractual term options expected to vest | 8 years 8 months 16 days |
9. Stock Compensation (June 374
9. Stock Compensation (June 30, 2017 Note) (Details - Assumptions) - Options [Member] | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Risk free interest rate | 2.21% |
Average expected life | 10 years |
Expected volatility rate | 92.14% |
Expected dividends | $ 0 |
9. Stock Compensation (June 375
9. Stock Compensation (June 30, 2017 Note) (Details - Option activity) - Stock Options - $ / shares | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock options Outstanding, beginning balance | 432,047 | 438,547 | 501,690 |
Stock options granted | 34,500 | 0 | 0 |
Stock options exercised | 0 | 0 | 0 |
Stock options cancelled/forfeited | 0 | (6,500) | (63,143) |
Stock options outstanding, ending balance | 466,547 | 432,047 | 438,547 |
Stock options exercisable | 414,547 | 414,547 | 388,414 |
Range of exercise prices, Option beginning | $3.80-$20.50 | ||
Range of exercise prices, Option issued | $ 1.68 | ||
Range of exercise prices, Option ending | $1.68-$20.50 | ||
Range of exercise prices, Option exercisable | $3.80-$20.50 | ||
Outstanding, Weighted Average Exercise Price, beginning price | $ 10.98 | $ 10.94 | $ 11 |
Granted, Weighted Average Exercise Price | 1.68 | ||
Exercised, Weighted Average Exercise Price | |||
Cancelled/Forfeited, Weighted Average Exercise Price | 7.96 | 11.45 | |
Outstanding Weighted Average Exercise Price, ending price | 10.30 | 10.98 | 10.94 |
Exercisable, Weighted Average Exercise Price | $ 11.24 | $ 11.24 | $ 11.53 |
9. Stock Compensation (June 376
9. Stock Compensation (June 30, 2017 Note) (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based compensation | $ 280,911 | $ 50,710 | $ 2,186,309 | $ 202,844 |
Unrecognized compensation cost | $ 3,203,208 | |||
Unrecognized compensation cost amortization period | 2 years 7 months 13 days | |||
Four Employees [Member] | ||||
Options issued | 34,500 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Stock-based compensation | $ 260,699 | |||
Withholding tax paid in return for cancellation of shares | 13,146 | |||
Restricted Stock Units (RSUs) [Member] | Executives [Member] | ||||
Shares exchanged, shares converted | 46,125 | |||
Options [Member] | ||||
Weighted average exercise price of stock options | $ 2.14 | |||
Unrecognized compensation cost | $ 2,666,508 | |||
Unrecognized compensation cost amortization period | 2 years 7 months 13 days | |||
Common Stock [Member] | Executives [Member] | ||||
Shares exchanged, shares issued | 22,470 | |||
Withholding tax paid in return for cancellation of shares | 23,655 |
10. Warrants (June 30, 2017 N77
10. Warrants (June 30, 2017 Note) (Details - Assumptions) - Warrants [Member] | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Risk free interest rate - minimum | 0.79% |
Risk free interest rate - maximum | 1.38% |
Average expected life | 3 months 2.33 years |
Expected Volatility Rate, Minimum | 68.00% |
Expected Volatility Rate, Maximum | 111.00% |
Expected dividends | $ 0 |
10. Warrants (June 30, 2017 N78
10. Warrants (June 30, 2017 Note) (Details Narrative) | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrants exchanged value for common stock | $ 119,789 |
12. Segments (June 30, 2017 Not
12. Segments (June 30, 2017 Note) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues | $ 0 | $ 4,635 | $ 392,073 | $ 886,572 | |
Operating Losses | (1,160,249) | (1,131,652) | (6,098,357) | (4,384,834) | |
Net Losses | (1,845,551) | (2,136,549) | (7,306,726) | (4,958,616) | |
Cash | 327,206 | 1,294,259 | 1,559,701 | 2,123,737 | $ 855,596 |
Total Assets | 509,151 | 1,461,032 | 1,726,368 | 2,529,116 | |
Capital Expenditures | 23,705 | 1,545 | 16,433 | 9,307 | |
Depreciation and Amortization | 9,326 | 10,218 | 32,413 | 38,524 | |
Interest Expense | (188,604) | (42,167) | (304,330) | (573,782) | |
Aethlon [Member] | |||||
Revenues | 0 | 4,635 | |||
Operating Losses | (1,141,406) | (1,092,990) | (5,945,293) | (3,953,402) | |
Net Losses | (1,826,708) | (2,097,887) | (7,153,662) | (4,527,184) | |
Cash | 326,464 | 1,291,537 | 1,558,667 | 2,114,285 | |
Total Assets | 492,324 | 1,419,226 | 1,698,249 | 2,475,686 | |
Capital Expenditures | 23,705 | 1,545 | 16,433 | 9,307 | |
Depreciation and Amortization | 9,326 | 5,323 | 22,370 | 18,943 | |
Interest Expense | (188,604) | (42,167) | (304,330) | (573,782) | |
ESI [Member] | |||||
Revenues | 0 | 0 | |||
Operating Losses | (18,843) | (38,662) | (153,064) | (431,432) | |
Net Losses | (18,843) | (38,662) | (153,064) | (431,432) | |
Cash | 742 | 2,722 | 1,034 | 9,452 | |
Total Assets | 16,827 | 41,806 | 28,119 | 53,430 | |
Capital Expenditures | 0 | 0 | 0 | 0 | |
Depreciation and Amortization | 0 | 4,895 | 10,043 | 19,581 | |
Interest Expense | $ 0 | $ 0 | $ 0 | $ 0 |
13. Commitments and Contingenci
13. Commitments and Contingencies (June 30, 2017 Note) (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 35,000 | $ 34,000 | $ 151,000 | $ 144,000 |