Note 7 - Capital Transactions

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note

7

– Capital Transactions

Increase in Authorized Capital

Effective

April 8, 2018,

Shareholders of the Company approved the change in corporate domicile from the State of Delaware to the State of Nevada and an increase in the number of authorized capital shares from

250,000,000

to

400,000,000.

On

August 15, 2019,

Shareholders of the Company approved an increase in authorized capital shares from

400,000,000

to

600,000,000.

Sale of Common Stock and Exercise of Warrants

Stock Issued for Debt Conversions

During the

nine

months ended

December 31, 2019

,the Company issued a total of 

7,583,333

shares of common stock for the conversion of notes payable:

On

May 28, 2019,

the Company received notice from CSW Ventures, L.P. of the conversion of a total of

$170,000

of the principal balance of the

8%

Senior Secured Promissory Note dated

February 28, 2019 (

See Note

6

). Accordingly, the Company issued

1,000,000

shares of its common stock based on a

$0.17

per share conversion price. In connection with the conversions,

$17,225

in unamortized discount was recorded as interest expense and the Company has reduced the carrying amount of convertible notes payable by

$152,775.

On

August 1, 2019,

the Company received notice from CSW Ventures, L.P. of the conversion of a total of

$110,000

of the principal balance of the Amended CSW Note at

$0.11

per share. Accordingly, the Company issued

1,000,000

shares of its common stock. In connection with the conversions,

$9,579

in unamortized discount was recorded as interest expense and the Company has reduced the carrying amount of convertible notes payable by

$100,421.

After conversion, the remaining balance outstanding was

$1,361,863.

On

December 16, 2019,

the Company received notice from CSW Ventures, L.P. of the conversion of a total of

$120,000

of the principal balance of the Amended CSW Note at

$0.04

per share and we issued

3,000,000

shares of common stock. In connection with the conversions,

$57,551

in unamortized discount was recorded as interest expense and the Company has reduced the carrying amount of convertible notes payable by

$62,449.

After conversion, the remaining balance outstanding was

$1,271,863

and the carrrying amount of the note was

$687,021,

net of

$584,842

in unamortized discount from the beneficial conversion feature.

As inducement for the temporary forbearance of formal default proceedings, the Company has honored the conversion of a total of a total of

$125,000

of debt owed under the Iliad Note at reduced conversion rates. On

October 30, 2019,

the Company received notice of the conversion of

$75,000

at

$0.06

per share and issued

1,250,000

shares of its common stock. The fair value of the shares issued exceeded the fair value of the shares issuable under the original terms of the Note by

$64,706,

and the Company recorded an expense in that amount. On

November 18, 2019,

the Company received notice of the conversion of

$50,000

of the note balance at

$0.0375

per share and issued

1,333,333

shares of its common stock. The fair value of the shares issued exceeded the fair value of the shares issuable under the original terms of the Note by

$62,353,

and the Company recorded an expense in that amount. In total, the Company recorded

$

127,059

in noncash expense for the

two

conversions of the Iliad note at below contractual conversion rates for the

three

and

nine

months ended

December 31, 2019

.

Exercise of Warrants for Stock

During the

nine

months ended

December 31, 2019

, the Company issued 

12,574,750

shares of common stock for exercises of warrants:

In order to encourage the exercise of approximately

70.5

million warrants issued to investors in private placements of convertible notes and common stock having exercise prices ranging between

$0.65

and

$0.30,

the Company effected a temporary decrease in the exercise price of the warrants to

$0.10

per share until

July 11, 2019.

On

July 12, 2019,

the Company extended the repricing of the warrants through

August 30, 2019,

and on

July 31, 2019,

the Company extended the repricing of the warrants to

December 31, 2019

. As a result of the price reduction, the Company received notice of the exercise of

9,449,750

warrants and received proceeds of

$850,478,

net of brokerage fees of

$94,498.

In connection with the induced exercise of the warrants, the Company recorded an inducement dividend of

$230,025.

In order to encourage the further exercise of the same warrants, the Company effected a temporary decrease in the exercise price of the warrants to

$0.04

per share beginning in

December 2019.

As a result of the price reduction, the Company received notice of the exercise of an additional

3,125,000

warrants and received proceeds of

$112,500,

net of brokerage fees of

$12,500.

In connection with the induced exercise of the warrants, the Company recorded an inducement dividend of $

37,499

.

Issuance of Stock for Services

During the

nine

months ended

December 31, 2019

, the Company issued 

2,500,000

shares of common stock for consulting services and recorded related expense of

$214,000

based on the fair value of the stock on the date of the related consulting agreements.

Issuance of Stock for Cash

During the

nine

months ended

December 31, 2019

, the company issued 

7,668,167

shares of common stock for cash as follows:

On

December 4, 2018,

the Company entered into a Placement Agent’s Agreement to offer a total of

15,000,000

units at the price of

$0.20

per unit up to a total of

$3

million. Each unit consisted of

one

share of the Company’s common stock and

one

warrant to purchase

one

share of the Company’s common stock at the price of

$0.60

for a period of

five

years. On

January 15, 2019,

the Placement Agent’s Agreement was amended to decrease the unit price from

$0.20

per unit to

$0.15

per unit for a total of

20,000,000

units and decrease the exercise price of the warrants included in each unit from

$0.60

to

$0.30,

applied retroactively to funds raised prior to the date of the amendment, with

no

other changes to the agreement. During the

nine

months ended

December 31, 2019

, the Company received a total of

$478,696

in proceeds from the private placement, net of

$71,529

in brokerage fees and issued

3,668,167

shares of its common stock and

3,668,167

warrants to purchase

one

share of its common stock at

$0.30

per share.

On

October 10, 2019,

the Company issued

4,000,000

shares of common stock and

2,000,000

warrants to purchase

one

share of common stock at

$0.08

per share for a period of

three

years to an investor for

$240,000

cash. The warrants were valued at

$110,000

on the date of issuance using the Black-Scholes model.

Cancellation of Shares Issued to Consultant

During the

nine

months ended

December 31, 2019

, the Company cancelled

400,000

shares of common stock issued to a consultant as compensation for services rendered during the year ended

March 31, 2019

, that were initially issued as part of the consulting agreement. During the quarter ended

June 30, 2019,

the Company agreed to amend the consulting agreement to issue options instead of shares of common stock. The amendment has

not

yet been executed nor has the option agreement as of

December 31, 2019

.

Options and Warrants

At the conclusion of the

December 2018

private placement on

December 31, 2019

, the Company issued

1,954,613

compensation warrants to the broker participating in the private placement. The warrants are exercisable at

$0.30

per share until expiration on

June 15, 2024

and are eligible for cashless exercise. The Company recorded a $

132,914

expense related to the issuance of the warrants.

As of

December 31, 2019,

there were

87,526,411

warrants outstanding at exercise prices ranging from

$0.30

to

$1.00

per share.

For the

nine

months ended

December 31, 2019

, the Company recorded $

241,242

in share-based compensation expense relating to options granted to employees and consultants in prior periods. As of

December 31, 2019,

the Company had

$15,131

of remaining unrecognized option expense related to options vesting at a future date. As of

December 31, 2019,

there were

10,383,334

options outstanding from grants to employees and

2,383,000

options outstanding from grants to consultants.