NOTE 7 - EQUITY

12 Months Ended

Mar. 31, 2020

Notes

NOTE 7 - EQUITY

NOTE 7 EQUITY

PREFERRED STOCK

(A) SERIES A PREFERRED

As of March 31, 2020, there are 4,200,000 shares of Series A preferred stock (“Series A”) designated at a par value of $0.01 per share. The Company has outstanding 4,200,000 shares of Series A Preferred stock Units. During the years ended March 31, 2020 and 2019, the Company sold 1,587,500 and 2,212,500 Units, respectively for cash and in the year ended March 31, 2019 issued 400,000 Units for the conversion of $320,000 of related party debt. The Units consist of one Series A share and one warrant per Unit and sold for $0.80 per unit in a private placement to accredited investors The Series A can either be converted into Common Shares upon listing of the Company on Nasdaq or elect to receive $1.60 per share. In the event of any liquidation or winding up of the Company, the holders of the Series A shall be entitled to receive in preference to the holders of Common Shares a per share amount equal to two times (2 X) their original purchase price plus any declared but unpaid dividends (the Liquidation Preference). All share issuances and obligations are recognized on the books and stock register.

(B) SERIES B PREFERRED

There are also 6,000,000 shares of Series B preferred stock (“Series B”) designated at a par value of $0.01 per share. During the year ended March 31, 2020, the Company sold 812,500 shares to accredited investors for $600,000 in a private placement that commenced in September 2019. The Series B can either be converted into Common Shares upon listing of the Company on Nasdaq or elect to receive $1.60 per share. In the event of any liquidation or winding up of the Company, the holders of the Series B shall be entitled to receive in preference to the holders of Common Shares and Series A, a per share amount equal to two times (2 X) their original purchase price plus any declared but unpaid dividends (the Liquidation Preference).

(C) COMMON STOCK

The Company has authorized 40,000,000 shares of common stock at a par value of $0.01 per share. As of March 31, 2020, and March 31, 2019 a total of 5,836,832 shares of the Company’s common stock were issued and outstanding, respectively.

(D) STOCK OPTIONS

In April 2018, the Company approved the introduction of the Kyto Technology and Life Science, Inc. Incentive Stock Option Plan for the benefit of employees, consultants and directors, with the objective of securing the benefit of services for stock options rather than cash salaries. In the year ended March 31, 2018, the Company granted a total of 2,697,085 options at an exercise price of $0.006 per share. During the year ended March 31, 2019, 2,697,085 options vested upon the closing of the private placement and were exercised for $16,182.

In July 2019, the majority of the shareholders of the Company approved the introduction of the Kyto Technology and Life Science 2019 Stock Option and Incentive Plan (“Plan”), and reserved 2 million shares for issuance to directors, officers, consultants and advisors. During the year ended March 31, 2020, the Company issued a total of 1,370,000 non-qualified stock options to consultants and advisors vesting over terms from one to four years.

	Number of options		Weighted average exercise price	Weighted average remaining life in years
Outstanding March 31, 2018	-			-
Granted	2,697,085	$	0.00	1.00
Exercised	(2,697,085)	$	0.00	1.00
Cancelled	-	$	0.00	-
Outstanding March 31, 2019	-	$	0.00	-
Exercisable March 31, 2019	-	$	-	-

In connection with the grant of stock options the Company recognises the value of the related option expense using the Black Scholes model, with appropriate assumptions for option life, stock value, risk free interest rate, volatility, and cancellations. The assumptions used for options granted in the years ended March 31, 2020 and 2019 were as follows:

		March 31, 2020	March 31, 2019
Stock Price at grant date	$	0.033	0.006
Exercise Price	$	0.033	0.006
Term in Years		2.32	1.00
Volatility assumed		71%	73%
Annual dividend rate		0.0%	0%
Risk free discount rate		2.00%	1.79%

The compensation expense calculated at time of grant is amortised over the vesting period for the options granted. During the year ended March 31, 2020 and March 31, 2019, the Company amortised $7,277 and $4,613, respectively, as option expense.

(E) WARRANTS

In conjunction with the sale of Series A Preferred stock Units, the Company issued 4,200,000 warrants to purchase common stock at a price of $1.20 per share for a period of three years. The Company values the warrants using the Black Scholes model, with appropriate assumptions for warrant life, stock value, risk free interest rate, and volatility.

	Number of warrants		Weighted average exercise price	Weighted average remaining life in years
Outstanding March 31, 2018	-	$	-	-
Granted	2,612,500	$	1.20	3.00
Exercised	-	$	0.00	-
Cancelled	-	$	0.00	-
Outstanding March 31, 2019	2,612,500	$	1.20	2.41
Exercisable March 31, 2019	2,612,500	$	-	2.41

At March 31, 2020, the value of the warrants was $0 as the Company did not bifurcate the value of Series A Preferred and warrants within the Units sold.