XML 37 R27.htm IDEA: XBRL DOCUMENT

Warrants

6 Months Ended

Sep. 30, 2020

Note 21 – WARRANTS

In connection with the registered direct offering closed on July 19, 2015, the Company issued to an investor a warrant to purchase up to 600,000 shares of common stock at an exercise price of $3.10 per share. The warrant became exercisable on January 19, 2016 and will expire on January 18, 2021. In connection with the offering, the Company also issued a warrant to its placement agent of this offering, pursuant to which the agent may purchase up to 6% of the aggregate number of shares of common stock sold in the offering, i.e. 72,000 shares. Such warrant has the same terms as the warrant issued to the investor in the offering.

On June 1, 2020, one investor exercised 25,000 warrants at the price of $3.10 per share in cash. As of September 30, 2020, 647,000 warrants had not been exercised. The fair value of the warrants issued to purchase 647,000 and 672,000 shares as of September 30, 2020 and March 31, 2020, as described above was estimated by using the binominal pricing model with the following assumptions:

	Common Stock Warrants			Common Stock Warrants
	September 30, 2020			March 31, 2020

Stock price	$	0.97		$	1.77
Exercise price	$	3.10		$	3.10
Annual dividend yield		-	%		-	%
Expected term (years)		0.30			0.81
Risk-free interest rate		0.10	%		0.71	%
Expected volatility		158.08	%		62.08	%

Upon evaluation, the warrants meet the definition of a derivative under FASB ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the warrants was classified as a liability of $64,090 as of March 31, 2020. For the three months ended September 30, 2020 and September 30, 2019, the Company recognized a gain of $32,674 and a gain of $6,865 for the investor warrant and placement agent warrant, from the change in fair value of the warrant liability. For the six months ended September 30, 2020 and September 30, 2019, the Company recognized a gain of $27,784 and a gain of $410,420 for the investor warrant and placement agent warrant, from the change in fair value of the warrant liability. As a result, the warrant liability is carried on the consolidated balance sheets at the fair value of $36,306 and $64,090 for the investor warrant and placement agent warrant, collectively, as of September 30, 2020 and March 31, 2020.