NOTE 7 – STOCK-BASED COMPENSATION

Our board of directors approved the 2016 TechPrecision Equity Incentive Plan, or the 2016 Plan, on November 10, 2016. Our stockholders approved the 2016 Plan at the Company’s Annual Meeting of Stockholders on December 8, 2016. The 2016 Plan succeeds the 2006 Plan and applies to awards granted after the 2016 Plan’s adoption by the Company’s stockholders. The 2016 Plan provides for a share reserve of 5,000,000 shares of common stock.

The 2016 Plan authorizes the award of incentive and non-qualified stock options, restricted stock awards, restricted stock units, and performance awards to employees, directors, consultants, and other individuals who provide services to TechPrecision or its affiliates.

At June 30, 2020 and March 31, 2020, there were 1,474,000 shares available for grant under the 2016 Plan. The following table summarizes information about options granted during the two most recently completed periods:


						Weighted
						Average
		Weighted		Aggregate		Remaining
	Number Of	Average		Intrinsic		Contractual Life
	Options	Exercise Price		Value		(in years)
Outstanding at 3/31/2019	2,938,000	$	0.416	$	1,869,200	6.74
Exercised	(20,000)		0.360
Canceled	(2,000)
Outstanding at 3/31/2020	2,916,000	$	0.415	$	2,546,800	6.21
Exercised	(150,000)		0.800
Outstanding at 6/30/2020	2,766,000	$	0.394	$	2,289,400	6.13
Vested or expected to vest at 6/30/2020	2,766,000	$	0.394	$	2,289,400	6.13
Exercisable and vested at 6/30/2020	2,766,000	$	0.394	$	2,289,400	6.13

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on the last trading day of the first quarter of fiscal 2021 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2020. This amount changes based on the fair market value of the Company’s common stock.

At June 30, 2020, there was no remaining unrecognized compensation cost related to stock options. The maximum contractual term is ten years for option grants. Other information relating to stock options outstanding at June 30, 2020 is as follows:


		Weighted
		Average
		Remaining	Weighted			Weighted
	Options	Contractual	Average		Options	Average
Range of Exercise Prices:	Outstanding	Term	Exercise Price		Exercisable	Exercise Price
$0.01‑$1.00	2,670,000	6.37	$	0.34	2,670,000	$	0.34
$1.01‑$1.96	96,000	0.69	$	1.84	96,000	$	1.84
Totals	2,766,000				2,766,000

Restricted Stock Awards

On March 16, 2020 we granted a total of 100,000 shares of restricted stock under the 2016 Plan to the board of directors. The stock-based compensation expense of $111,000 for service-based restricted stock was measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company’s common stock. The shares of restricted stock fully vest and cease to be subject to forfeiture on September 1, 2020, or approximately six months following the grant date. Each grantee must be serving as a director on the vesting date and must have been continuously serving in such capacity from the grant date through the vesting date for the shares of restricted stock to vest. Prior to the vesting date, the grantee is not permitted to sell, transfer, pledge, assign or otherwise encumber the shares of restricted stock and if the grantee's service with the Company terminates prior to the vesting date, the grantee's restricted stock will be forfeited automatically. Total recognized compensation cost related to the restricted stock award was $55,500 for the three months ended June 30, 2020. At June 30, 2020 there was $46,250 of total unrecognized compensation cost related to the restricted stock awards.