STOCK-BASED COMPENSATION

9 Months Ended

Dec. 31, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6. STOCK-BASED COMPENSATION

Stock Option Plans

In January 2008, our board of directors approved and adopted the United Heritage Corporation 2008 Equity Incentive Plan (the “Plan”). The Company reserved 5,000,000 shares of common stock for awards that will be granted from the Plan. The awards are subject to adjustment in the event of stock dividends, recapitalizations, stock splits, reverse stock splits, subdivisions, combinations, reclassifications or similar changes in our capital structure. The Plan became effective upon adoption by the board, and, unless earlier terminated in accordance with the terms and provisions thereof, will remain in effect for a period of ten years from the date of adoption. As of December 31, 2011 and 2010 there were no awards outstanding under the Plan.

Directors of the Company adopted the 1995 Stock Option Plan effective September 11, 1995. This Plan and its subsequent amendment set aside 66,667 shares of the authorized but unissued common stock of the Company for issuance under the Plan. Options may be granted to directors, officers, consultants, and/or employees of the Company and/or its subsidiaries. As of December 31, 2010 and 2011 there were no awards outstanding under the Plan.

Directors of the Company adopted the 1998 Stock Option Plan effective July 1, 1998. This Plan and its subsequent amendment set aside 66,667 shares of the authorized but unissued common stock of the Company for issuance under the Plan. Options may be granted to directors, officers, consultants, and/or employees of the Company and/or its subsidiaries. Options granted under the Plan are exercisable over a period to be determined when granted, but may be affected by the termination of employment. As of December 31, 2010 and 2011 there were no awards outstanding under the Plan.

Directors of the Company adopted the 2000 Stock Option Plan effective September 5, 2000. This Plan set aside 1,666,667 shares of the authorized but unissued common stock of the Company for issuance under the Plan. Options may be granted to directors, officers, consultants, advisors, and/or employees of the Company and/or its subsidiaries. As of December 31, 2010 and 2011 there were no awards outstanding under the Plan.

Options granted under the Plan must be exercised within the number of years determined by the Stock Option Committee and allowed in the Stock Option Agreement. The Stock Option Agreement may provide that a period of time must elapse after the date of grant before the options are exercisable. The options may not be exercised as to less than 100 shares at any one time.

Director’s compensation was amended on December 31, 2008. Under the revised plan, each director can choose each month to receive either $5,000 in the form of the Company’s common stock or stock options to purchase 5,000 shares of common stock. The option price is equal to the Company’s closing average bid price for the previous ended quarter. The previous agreement provided for 5,000 stock purchase options per month, with the price to be calculated on the average closing bid price for the month. Under the Plan, 150,000 stock options were granted to the Company’s Directors during the years ended March 31, 2009 and March 31, 2010. 15,000 options were retired as part of the litigation settlement with Joseph F. Langston Jr. 45,000 stock options remain outstanding under this Plan as of December 31, 2011.

During the year ended March 31, 2008, 100,000 stock options were issued to an employee and were not part of the plans mentioned above. These options expired as of June 30, 2011.

The director’s compensation was changed on April 1, 2010 to 20,000 shares of common stock per month delivered quarterly in advance. On June 30, 2011, the Board of Directors changed the director compensation to be 20,000 shares of common stock per month, earned in arrears at the end of each month served, and issued quarterly.

The Black-Scholes option-pricing model was used to estimate the option fair values. The option-pricing model requires a number of assumptions, of which the most significant are the risk free rate, the expected stock price volatility, the expected pre-vesting forfeiture rate and the expected option term (the amount of time from the grant date until the options are exercised or expire). The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility was calculated based upon actual historical stock price movements over the most recent periods ending December 31, 2011 and 2010. The expected option term was calculated based on the vesting period. The expected forfeiture rate is based on historical experience and expectations about future forfeitures.

No stock options were granted during the nine months ended December 31, 2011.

The following is an option activity summary under the plans for the quarter ended December 31, 2011.

	Number of Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Outstanding, March 31, 2011		235,000		$	0.78		0.44	$	13,950
Forfeited or expired		(190,000	)	$	-		-
Outstanding, December 31, 2011		45,000		$	0.29		0.41	$	300
Exercisable December 31, 2011		45,000		$	0.29		0.41	$	300

No options were exercised in the quarter ended December 31, 2011. No options remained unvested as of December 31, 2011.

The following schedule summarizes pertinent information with regard to the stock warrants for the quarter ended December 31, 2011:

	2011
	Warrants Outstanding		Weighted Average Exercise Price
Beginning of year:		50,936,532	$	0.72
Granted		4,367,990		0.45
End of period		55,304,522	$	0.70
Exercisable		51,011,532	$	0.72

For the period from May 22, 2008 through March 7, 2011, the Company had recorded the warrants as liabilities and adjusted the carrying amount to fair value each reporting period. The warrants issued with the convertible notes in March 2010 and the warrants issued as part of the January 2011 Series D convertible preferred stock offering continue to be classified as liabilities. Additionally 75,000 warrants owed to certain consultants were owed to them prior to December 31, 2011 but not issued until subsequent to December 31, 2011 and thus the Company is recording them as liabilities until the date the warrant agreements are executed and the terms confirmed. All other remaining warrants have been re-classified to stockholders’ equity as of March 7, 2011. The following table shows the change in the value of the warrant liability for the nine months ended December 31, 2011.

Warrant liability balance March 31, 2011	$	670,395
Change in fair value of warrant liability		(34,396	)
Warrants reclassified to equity		(627,367	)
Warrant liability balance December 31, 2011	$	8,632