Quarterly report pursuant to Section 13 or 15(d)

STOCK COMPENSATION

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STOCK COMPENSATION
9 Months Ended
Dec. 31, 2021
Equity [Abstract]  
STOCK COMPENSATION

8. STOCK COMPENSATION

 

The following tables summarize share-based compensation expenses relating to RSUs and stock options and the effect on basic and diluted loss per common share during the three and nine month periods ended December 31, 2021 and 2020:

               
    Three Months
Ended
December 31,
2021
  Three Months
Ended
December 31,
2020
  Nine Months
Ended
December 31,
2021
  Nine Months
Ended
December 31,
2020
Vesting of stock options and restricted stock units   $ 201,019     $ 377,958     $ 522,234     $ 629,207  
Total stock-based compensation expense   $ 201,019     $ 377,958     $ 522,234     $ 629,207  
                                 
Weighted average number of common shares outstanding – basic and diluted     15,397,418       12,093,361       14,543,787       11,265,725  
                                 
Basic and diluted loss per common share attributable to stock-based compensation expense   $ (0.01 )   $ (0.03 )   $ (0.04 )   $ (0.06 )

 

 

All of the stock-based compensation expense recorded during the nine months ended December 31, 2021 and 2020, an aggregate of $522,234 and $629,207, respectively, is included in payroll and related expense in the accompanying condensed consolidated statements of operations. Stock-based compensation expense recorded during the nine months ended December 31, 2021 and 2020 represented an impact on basic and diluted loss per common share of $(0.04) and $(0.06), respectively.

 

We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The cumulative effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the nine months ended December 31, 2021 was insignificant.

 

Stock Option Activity

 

During the nine months ended December 31, 2021, we issued a stock option grant to our Chief Executive Officer, or CEO, for the purchase of 266,888 shares of our common stock under our 2020 Plan. The purchase price for the shares subject to the option is $5.17 per share, the fair market value of the common stock on the date of the grant. The shares subject to the option are subject to vesting over four years, commencing on the date of grant, or Vesting Commencement Date, with twenty-five percent (25%) of the shares subject to the option vesting on the first anniversary of the Vesting Commencement Date and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, in each case subject to Dr. Fisher’s Continuous Service (as defined in the 2020 Plan) through each vesting date.

 

From February 2020 through May 2020, our compensation committee granted 521,476 stock options that were contingent upon stockholder approval of the 2020 Plan at the Aethlon 2020 Annual Meeting of Stockholders. Upon approval of the 2020 Plan at that meeting, these option grants were considered effective and no longer contingent as of that date.

 

Under the 2020 Plan, up to 1,842,556 shares of common stock are authorized for issuance, pursuant to the grant of stock options, RSUs or other forms of stock-based compensation.

 

Stock options outstanding that have vested as of December 31, 2021 and stock options that are expected to vest subsequent to December 31, 2021 are as follows:

           
    Number of
Shares
  Weighted
Average
Exercise
Price
  Weighted
Average
Remaining
Contractual
Term in
Years
Vested     166,717     $ 2.92       8.43  
Expected to vest     824,931     $ 2.93       8.97  
Total     991,648                  

  

A summary of stock option activity during the nine months ended December 31, 2021 is presented below:

           
    Amount   Range of
Exercise Price
  Weighted
Average
Exercise
Price
Stock options outstanding at March 31, 2021     844,089     $ 1.28 - 142.50     $ 3.07  
Exercised     (11,562 )   $ 2.45     $ 2.45  
Granted     266,888     $ 5.17     $ 5.17  
Cancelled/Expired     (107,767 )   $ 2.45 – 142.50     $ 9.66  
Stock options outstanding at December 31, 2021     991,648     $ 1.28 - 142.50     $ 2.93  
Stock options exercisable at December 31, 2021     166,717     $ 1.28 - 142.50     $ 2.92  

 

On December 31, 2021, our outstanding stock options had no intrinsic value since the closing share price on that date of $1.86 per share was below the weighted average exercise price of our outstanding stock options.

 

At December 31, 2021, there was approximately $3,320,000 of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted average period of 4.1 years.