Stock-Based Compensation

12 Months Ended

Mar. 31, 2023

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

NOTE 10 – STOCK-BASED COMPENSATION

Warrants issued for services

From time to time, the Company issues warrants to purchase its common stock. These warrants are valued using the Black-Scholes model and using the volatility, market price, exercise price, risk-free interest rate, and dividend yield appropriate at the date the warrants were issued. The major assumptions used in the Black Scholes model included the followings: the expected term is five years; risk-free interest rate is 1.8% to 2.8%; and the expected volatility is 50.3% to 52.2%. For fiscal 2023, 137,210 warrants expired. There were 57,200 warrants outstanding as of March 31, 2023 with a weighted average exercise price of $8.75. All of the outstanding warrants were fully vested and exercisable as of March 31, 2023 and 2022. The remaining warrants expired on May 14, 2023.

All stock warrants activities are summarized as follows:

	Option to Acquire Shares			Weighted Average Exercise Price
Stock warrants outstanding at March 31, 2022		194,410		$	6.71
Granted		-			-
Exercised		-			-
Expired		(137,210	)		5.86
Stock warrants outstanding at March 31, 2023		57,200		$	8.75

Stock Options

On March 21, 2018, the Board of Directors adopted the Jerash Holdings (US), Inc. 2018 Stock Incentive Plan (the “Plan”), pursuant to which the Company may grant various types of equity awards. 1,484,250 shares of common stock of the Company were reserved for issuance under the Plan. In addition, on July 19, 2019, the Board of Directors approved an amendment and restatement of the Plan, which was approved by the Company’s stockholders at its annual meeting of stockholders on September 16, 2019. The amended and restated Plan increased the number of shares reserved for issuance under the Plan by 300,000, to 1,784,250, among other changes. On March 31, 2023, the Company had 42,650 of shares remaining available for future issuance under the Plan.

On April 9, 2018, the Board of Directors approved the issuance of 989,500 nonqualified stock options under the Plan to 13 executive officers and employees of the Company in accordance with the Plan at an exercise price of $7.00 per share, and a term of five years. The fair value of these options was estimated as of the grant date using the Black-Scholes model with the major assumptions that expected terms are five years; risk-free interest rate is 2.6%; and the expected volatility is 50.3%.

On August 3, 2018, the Board of Directors granted the Company’s then Chief Financial Officer and Head of U.S. Operations a total of 150,000 nonqualified stock options under the Plan in accordance with the Plan at an exercise price of $6.12 per share and a term of 10 years. The fair value of these options was estimated as of the grant date using the Black-Scholes model with the major assumptions that the expected terms are 10 years; risk-free interest rate is 2.95%; and the expected volatility is 50.3%.

On November 27, 2019, the Board of Directors granted the Company’s Chief Financial Officer 50,000 nonqualified stock options under the amended and restated Plan in accordance with the amended and restated Plan at an exercise price of $6.50 per share and a term of 10 years. All these outstanding options became fully vested and exercisable in May 2020. The fair value of the options was estimated as of the grant date using the Black-Scholes model with the major assumptions of the expected term of 10 years; risk-free interest rate of 1.77%; expected volatility of 48.59%; and dividend yield of 3.08%.

All these outstanding options were fully vested and exercisable. As of March 31, 2023, there were 1,136,500 stock options outstanding. The weighted average remaining life of the options is within one year.

All stock option activities are summarized as follows:

	Option to Acquire Shares		Weighted Average Exercise Price
Stock options outstanding at March 31, 2022		1,136,500	$	6.90
Granted		—		—
Exercised		—		—
Forfeited		—		—
Stock options outstanding at March 31, 2023		1,136,500	$	6.90

Restricted Stock Units

On June 24, 2021, the Board of Directors approved the grant of 200,000 RSUs under the Plan to 32 executive officers and employees of the Company, with a one-year vesting period. The fair value of these RSUs on June 24, 2021 was $1,266,000, based on the market price of the Company’s common stock as of the date of the grant. On June 30, 2022, all 200,000 RSUs were vested.

On February 9, 2023, the Board of Directors approved the grant of 405,800 RSUs under the Plan to 37 executive officers and employees of the Company, with a two-year vesting period. The fair value of these RSUs on February 15, 2023 was $1,937,695, based on the market price of the Company’s common stock as of the date of the grant. As of March 31, 2023, there were $1,815,275 unrecognized stock-based compensation expenses to be recognized in the future. 700 RSUs were forfeited during the fiscal year and 405,100 RSUs remained as of March 31, 2023.

Total expenses related to the RSU issued were $413,900 and $947,079 for the years ended March 31, 2023 and 2022, respectively.