Annual report pursuant to Section 13 and 15(d)

Capital Stock

v3.19.2
Capital Stock
12 Months Ended
Mar. 31, 2019
Stockholders' Equity Note [Abstract]  
Capital Stock

Common Stock

 

At our Annual Meeting of Stockholders on September 15, 2017, as approved by and recommended to our stockholders by our Board of Directors (Board), our stockholders approved an amendment to our Restated Articles of Incorporation to increase the authorized number of shares of common stock that we may issue from 30.0 million shares to 100.0 million shares. The amendment became effective on September 15, 2017, upon our filing of a certificate of amendment with the Nevada Secretary of State. In connection with the underwritten public offering of our common stock and warrants in May 2016, our common stock was approved for listing on the Nasdaq Capital Market. Our common stock has been trading on the Nasdaq Capital Market under the symbol “VTGN” since May 11, 2016.

 

Series A Preferred Stock

 

In December 2011, our Board authorized the creation of a series of up to 500,000 shares of Series A Preferred, par value $0.001 (Series A Preferred).  Each restricted share of Series A Preferred is currently convertible at the option of the holder into one and one-half restricted shares of our common stock.  The Series A Preferred ranks prior to the common stock for purposes of liquidation preference.

 

The Series A Preferred has no separate dividend rights, however, whenever the Board declares a dividend on the common stock, each holder of record of a share of Series A Preferred shall be entitled to receive an amount equal to such dividend declared on one share of common stock multiplied by the number of shares of common stock into which such share of Series A Preferred could be converted on the applicable record date.

 

Except with respect to transactions upon which the Series A Preferred shall be entitled to vote separately as a class, the Series A Preferred has no voting rights. The restricted common stock into which the Series A Preferred is convertible shall, upon issuance, have all of the same voting rights as other issued and outstanding shares of our common stock.

 

In the event of the liquidation, dissolution or winding up of our affairs, after payment or provision for payment of our debts and other liabilities, the holders of Series A Preferred then outstanding shall be entitled to receive distributions out of our assets, if any, an amount per share of Series A Preferred calculated by taking the total amount available for distribution to holders of all of our outstanding common stock before deduction of any preference payments for the Series A Preferred, divided by the total of (x), all of the then outstanding shares of our common stock, plus (y) all of the shares of our common stock into which all of the outstanding shares of the Series A Preferred can be converted before any payment shall be made or any assets distributed to the holders of the common stock or any other junior stock.

 

At March 31, 2019 and 2018, there were 500,000 restricted shares of Series A Preferred outstanding, convertible into 750,000 shares of our common stock at the option of the two respective holders.

 

Series B Preferred Stock

 

In July 2014, our Board authorized the creation of a class of Series B Preferred Stock, par value $0.001 (Series B Preferred). In May 2015, we filed a Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Preferred Stock of VistaGen Therapeutics, Inc. (Certificate of Designation) with the Nevada Secretary of State to designate 4.0 million shares of our authorized preferred stock as Series B Preferred.

 

Each share of Series B Preferred is convertible, at the option of the holder (Voluntary Conversion), into one (1) share of our common stock, subject to adjustment only for customary stock dividends, reclassifications, splits and similar transactions set forth in the Certificate of Designation. Outstanding shares of Series B Preferred are also convertible automatically on a one-to-one basis into shares of our common stock (Automatic Conversion) upon the closing or effective date of any of the following transactions or events: (i) a strategic transaction involving AV-101 with an initial up-front cash payment to us of at least $10.0 million; (ii) a registered public offering of our common stock with aggregate gross proceeds to us of at least $10.0 million; or (iii) for 20 consecutive trading days, our common stock trades at least 20,000 shares per day with a daily closing price of at least $12.00 per share; provided, however, that Automatic Conversion and Voluntary Conversion (collectively, Conversion) are subject to certain beneficial ownership blockers as set forth in the Certificate of Designation and/or securities purchase agreements. Following the completion of our underwritten public offering in May 2016, which occurred concurrently with and facilitated the listing of our common stock on the NASDAQ Capital Market, approximately 2.4 million shares of Series B Preferred were converted automatically into approximately 2.4 million shares of our common stock pursuant to the Automatic Conversion provision. There have been no conversions of Series B Preferred since August 2016.

 

Prior to Conversion, shares of Series B Preferred accrue in-kind dividends (payable only in unregistered shares of our common stock) at a rate of 10% per annum (Accrued Dividends).  The Accrued Dividends are payable on the date of either a Voluntary Conversion or Automatic Conversion in that number of shares of common stock equal to the Accrued Dividends. At March 31, 2019, we have recognized a liability in the amount of $3,748,200 for Accrued Dividends in the accompanying Consolidated Balance Sheet at March 31, 2019, based on the Series B Preferred issued and outstanding through that date. We have recognized a deduction from net loss of $1,139,900 and $1,030,400 related to dividends on Series B Preferred in arriving at net loss attributable to common stockholders in the accompanying Consolidated Statement of Operations and Comprehensive Loss for the fiscal years ended March 31, 2019 and 2018, respectively.

 

In the event of the liquidation, dissolution or winding-up of our affairs, after payment or provision for payment of our debts and other liabilities, the Holders of the Series B Preferred then outstanding shall be entitled to receive distributions out of our assets, if any, an amount equal to the Stated Value of the Series B Preferred ($7.00 per share), plus any accrued and unpaid dividends thereon, before any distribution or payment shall be made to the holders of any junior securities, including holders of our common stock. If our assets are insufficient to pay, in full, such amounts, then the entire assets to be distributed to the holders of the Series B Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. Upon liquidation, each share of Series B Preferred ranks pari-passu with our Series A Preferred and our Series C Preferred (defined below).The liquidation value of the Series B Preferred at March 31, 2019 is approximately $11,869,800.

 

At March 31, 2019 and 2018, there were 1,160,240 shares of Series B Preferred outstanding, which shares are subject to beneficial ownership blockers and are exchangeable at the option of the two respective holders by Voluntary Conversion, or pursuant to Automatic Conversion to the extent not otherwise subject to beneficial ownership blockers, into an aggregate of 1,160,240 shares of our common stock, excluding shares of our common stock which may be issued in payment of Accrued Dividends upon conversion.

 

Series C Preferred Stock

 

In January 2016, our Board authorized the creation of and, accordingly, we filed a Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock of VistaGen Therapeutics, Inc. (the Series C Preferred Certificate of Designation) with the Nevada Secretary of State to designate 3.0 million shares of our preferred stock, par value $0.001 per share, as Series C Convertible Preferred Stock (Series C Preferred).

 

In the event of the liquidation, dissolution or winding up of our affairs, after payment or provision for payment of our debts and other liabilities, the holders of Series C Preferred then outstanding shall be entitled to receive, out of our assets, if any, an amount per share of Series C Preferred calculated by taking the total amount available for distribution to holders of all of our outstanding common stock before deduction of any preference payments for the Series C Preferred, divided by the total of (x), all of the then outstanding shares of our common stock, plus (y) all of the shares of our common stock into which all of the outstanding shares of the Series C Preferred can be exchanged before any payment shall be made or any assets distributed to the holders of the common stock or any other junior stock. Upon liquidation, each share of Series C Preferred ranks pari-passu with our Series B Preferred and our Series A Preferred.

 

Each share of Series C Preferred is convertible, at the option of the holder into one share of our common stock, subject to certain beneficial ownership limitations as set forth in the Series C Preferred Certificate of Designation. Shares of the Series C Preferred do not accrue dividends, and holders of the Series C Preferred have no voting rights. At March 31, 2019 and 2018, one holder and its affiliates held all 2,318,012 outstanding shares of Series C Preferred.

 

Common Stock and Warrants Issued in September 2017 Public Offering

 

On September 6, 2017, we completed a public offering of units consisting of shares of common stock and Series A1 and A2 common stock purchase warrants to two of our existing institutional investors (the September 2017 Public Offering), resulting in gross proceeds of approximately $2.4 million. We issued an aggregate of 1,371,430 shares of our common stock, Series A1 Warrants to purchase up to 1,388,931 shares of common stock and Series A2 Warrants to purchase up to 503,641 of common stock (collectively, the Warrants), each exercisable for $1.82 per share. The Series A1 Warrants became exercisable by the investors for a five-year period commencing on March 7, 2018, and the Series A2 Warrants were immediately exercisable at any time through September 6, 2022. The common stock and the shares of common stock underlying the Warrants issued in the September 2017 Public Offering were offered, issued and sold pursuant to our S-3 Registration Statement (Registration No. 333-215671) that had previously been declared effective by the Securities and Exchange Commission (the Commission) to cover this and potential future sales of our equity securities in one or more public offerings from time to time. We received net proceeds of approximately $2.0 million from the September 2017 Public Offering, after deducting underwriter’s commission and other expenses related to the offering.

 

The Series A1 Warrants to purchase an aggregate of 1,388,931 shares of our common stock issued in the September 2017 Public Offering have no anti-dilution or other exercise price or share reset features, except as is customary with respect to a change in our capital structure in the event of a stock split or dividend, and, accordingly, we accounted for them as equity warrants. The Series A2 Warrants to purchase an aggregate of 503,641 shares of our common stock contained anti-dilution protection provisions that would take effect upon the issuance of any common stock, securities convertible into common stock or certain other issuances at a price below the then-current ($1.82 per share) exercise price of the Series A2 Warrants, with certain exceptions; provided, however, that such anti-dilution protection would terminate automatically on the trading day following the date on which we raised at least $20.0 million in aggregate gross proceeds through one or more issuances of common stock or equity-linked securities. The anti-dilution protection provisions in the Series A2 Warrants constituted a down round feature subject to the guidance in ASU 2017-11. Since the Series A2 Warrants contained no other provisions which required their treatment as liability warrants rather than equity warrants, including exercise price or share reset features, except as is customary with respect to a change in our capital structure in the event of a stock split or dividend and which are also present in the Series A1 Warrants, we also accounted for the Series A2 Warrants as equity warrants. The anti-dilution protection provisions of the Series A2 Warrants were triggered upon our issuance of common stock and warrants in the December 2017 Public Offering (defined below) at a price below the Series A2 Warrants’ then-current $1.82 per share exercise price.

 

Common Stock and Warrants Issued in December 2017 Public Offering and Trigger of Anti-Dilution Protection Provisions of Series A2 Warrants Issued in September 2017 Public Offering

 

On December 13, 2017, we completed a public offering of units consisting of shares of common stock and common stock purchase warrants at a combined public offering price of $1.50 per share and related warrant (the December 2017 Public Offering), resulting in gross proceeds of $15.0 million. We issued an aggregate of 10,000,000 shares of our common stock and warrants to purchase up to 10,000,000 shares of our common stock at an exercise price of $1.50 per share (the December 2017 Offering Warrants). The common stock and the shares of common stock underlying the December 2017 Offering Warrants issued in the December 2017 Public Offering were offered, issued and sold pursuant to our Registration Statement on Form S-1 (Registration No. 333-221009) that was declared effective by the Commission on December 11, 2017. The December 2017 Offering Warrants are exercisable at any time through December 13, 2022, have no anti-dilution or other exercise price or share reset features, except as is customary with respect to a change in our capital structure in the event of a stock split or dividend, and do not contain any cashless exercise features as long as our Registration Statement on Form S-1 (Registration No. 333-221009) is effective. Accordingly, we accounted for the December 2017 Offering Warrants as equity warrants. We received net proceeds of approximately $13.6 million from the December 2017 Public Offering, after deducting underwriter’s commission and other expenses related to the offering.

 

Our sale of units consisting of common stock and warrants in the December 2017 Public Offering at an offering price of $1.50 per unit triggered the anti-dilution provisions of the Series A2 Warrants. In accordance with the anti-dilution terms and formula contained in the Series A2 warrants, the exercise price of the Series A2 Warrants was reduced to $0.001 per share. In December 2017 and January 2018, the holders exercised the reset Series A2 warrants to purchase an aggregate of 503,641 shares of our common stock from which we received nominal cash proceeds. In accordance with the guidance in ASU 2017-11, we recognized the effect of triggering the down round feature as a deemed dividend in our Consolidated Statements of Stockholders’ Equity for the fiscal year ended March 31, 2018 and as an increase in net loss attributable to common stockholders and in our calculation of basic and fully diluted earnings per share in our Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2018.

 

We calculated the deemed dividend from the trigger of the down round provision feature, $199,200, using the Black-Scholes Option Pricing Model and the assumptions indicated in the table below:

 

Assumption:

  Pre-reset     Post-reset  
Market price per share   $ 1.17     $ 1.17  
Exercise price per share   $ 1.82     $ 0.001  
Risk-free interest rate     2.09 %     2.09 %
Remaining contractual term in years     4.73       4.73  
Volatility     97.8 %     97.8 %
Dividend rate     0.0 %     0.0 %
                 
Number of warrant shares     503,641       503,641  
Fair value per share   $ 0.77     $ 1.17  

 

Common Stock Issued in Spring 2019 Public Offering

 

During the quarter ended March 31, 2019, we completed an underwritten public offering of 11,500,000 shares of our common stock, including the overallotment option, at a public offering price of $1.00 per share, resulting in gross proceeds to us of $11,500,000, pursuant to our shelf registration statement on Form S-3 (File No. 333-215671), previously filed with the Commission (the Spring 2019 Public Offering). We received net proceeds of approximately $10.4 million after deducting underwriter’s commission and offering expenses.

 

Common Stock and Warrants Issued in Private Placements in our Fiscal Year Ended March 31, 2018

 

During the quarter ended June 30, 2017, in self-placed private placement transactions, we accepted subscription agreements from individual accredited investors, pursuant to which we sold to such investors units, at a weighted average purchase price of $2.00 per unit, consisting of an aggregate of 437,751 unregistered shares of our common stock and warrants, exercisable through April 30, 2021, to purchase an aggregate of 218,875 unregistered shares of our common stock at a weighted average exercise price of $3.99 per share. The purchasers of the units have no registration rights with respect to the shares of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are not exercisable until six months and one day following the date of issuance. We received aggregate cash proceeds of $873,300 in connection with these self-placed private placement transactions, and the entire amount of the proceeds was credited to stockholders’ equity.

 

During the quarter ended September 30, 2017, in a self-placed private placement transaction, we sold to an accredited investor units consisting of 28,572 shares of our unregistered common stock and warrants exercisable through April 30, 2021 to purchase 28,572 unregistered shares of our common stock at an exercise price of $4.00 per share. The purchaser of the units has no registration rights with respect to the shares of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are not exercisable until six months and one day following the date of issuance. We received cash proceeds of $50,000 from this sale of our securities, and the entire amount of the proceeds was credited to stockholders’ equity.

 

During the quarter ended December 31, 2017, in a self-placed private placement transaction, we sold to an accredited investor units consisting of 150,000 shares of our unregistered common stock and warrants exercisable through November 30, 2021 to purchase 150,000 unregistered shares of our common stock at an exercise price of $2.00 per share. The purchaser of the units has no registration rights with respect to the shares of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are not exercisable until six months and one day following the date of issuance. We received cash proceeds of $150,000 from this sale of our securities, and the entire amount of the proceeds was credited to stockholders’ equity.

 

Common Stock and Warrants Issued in Summer 2018 Private Placement

 

Between June 2018 and October 2018, we completed a self-placed private placement with accredited investors, pursuant to which we sold units, at a purchase price of $1.25 per unit, consisting of 4,605,000 unregistered shares of our common stock and warrants, exercisable through February 28, 2022, to purchase 4,605,000 unregistered shares of our common stock at an exercise price of $1.50 per share (the Summer 2018 Private Placement). The purchasers of the units have no registration rights with respect to the shares of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are not exercisable until at least six months and one day following the date of issuance. We received aggregate cash proceeds of $5,756,200 in connection with the Summer 2018 Private Placement and the entire amount of the proceeds was credited to stockholders’ equity.

 

Common Stock and Warrants Issued in Fall 2018 Private Placement

 

The Summer 2018 Private Placement was oversubscribed. To accommodate additional investor interest, during October 2018, we accepted subscription agreements from accredited investors, pursuant to which we sold to such investors units, at a unit purchase price equal to $0.15 above the closing quoted market price of our common stock on the Nasdaq Capital Market on the effective date of the investor’s subscription agreement, consisting of an aggregate of 420,939 unregistered shares of our common stock and four-year, immediately exercisable warrants to purchase 420,939 unregistered shares of our common stock at a per share exercise price equal to the closing quoted market price of our common stock on the Nasdaq Capital Market on the effective date of the investor’s subscription agreement (the Fall 2018 Private Placement). The purchasers of the units have no registration rights with respect to the shares of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. We received aggregate cash proceeds of $812,500 in connection with the Fall 2018 Private Placement and settled an outstanding professional service payable by accepting a subscription agreement in the amount of $40,000 and issuing the corresponding number of shares of common stock and warrants. The entire amount of the proceeds of the Fall 2018 Private Placement was credited to stockholders’ equity. The fair value of the common stock and warrant issued in the Fall 2018 Private Placement in settlement of the professional services payable was determined to be $62,700 on the effective date of the agreement. Accordingly, we recognized a loss on extinguishment of accounts payable in the amount of $22,700 in our Consolidated Statement of Operations and Comprehensive Loss for the fiscal year ended March 31, 2019.

 

Modification of Warrants issued in Summer 2018 Private Placement

 

Subsequent to the completion of the Summer 2018 Private Placement, we amended warrants to purchase an aggregate of 304,000 shares of our common stock issued to investors who submitted Summer 2018 Private Placement subscription agreements between October 3, 2018 and October 5, 2018 to increase the exercise price of their warrants from $1.50 per share to $1.59 per share or $1.69 per share, depending on the effective date of the related subscription agreement, to comply with certain provisions of The Nasdaq Stock Market Rules applicable to the private placement. As additional consideration for agreeing to the increase in the warrant exercise price, we granted the investors additional warrants to purchase an aggregate of 23,800 unregistered shares of our common stock at an exercise price of $1.75 per share through February 28, 2022. We calculated the fair value of the modified warrants immediately before and after the modification using the Black Scholes Option Pricing Model and determined that the increase in the exercise price resulted in a decrease in the fair value of the warrants, which decrease is not recognized. We calculated the fair value of the new warrants using the Black-Scholes Option Pricing Model and the weighted average assumptions indicated in the table below, recognizing $25,800 as the fair value of the new warrants and as warrant modification expense, included as a component of general and administrative expenses, in our Consolidated Statement of Operations and Comprehensive Loss for the fiscal year ended March 31, 2019.

 

Assumption:

  New Warrants  
Market price per share   $ 1.80  
Exercise price per share   $ 1.75  
Risk-free interest rate     2.83 %
Remaining contractual term in years     3.25  
Volatility     88.80 %
Dividend rate     0.0 %
         
Number of warrant shares     23,800  
Weighted average fair value per share   $ 1.08  

 

Issuance of Common Stock for Product Licenses and Option

 

As indicated in Note 1, Description of Business, and Note 3, Summary of Significant Accounting Policies, in September 2018 we issued an aggregate of 1,630,435 shares of our unregistered common stock having a fair market value of $2,250,000, based on the $1.38 per share quoted closing market price of our common stock on the Nasdaq Capital Market, to Pherin to acquire an exclusive worldwide license to develop and commercialize PH94B and an option to acquire a similar license for PH10. In October 2018, we exercised our option to acquire an exclusive worldwide license to develop and commercialize PH10 by issuing 925,926 shares of our unregistered common stock having a fair market value of $2,000,000, based on the $2.16 per share closing quoted market price of our common stock on the Nasdaq Capital Market, to Pherin under the terms of the PH10 license agreement. Under the terms of the PH94B and PH10 license agreements, we are obligated to make additional cash payments and pay royalties to Pherin in the event that certain regulatory and performance-based milestones and commercial sales are achieved. Additionally, in connection with the license agreements, we are obligated to pay to Pherin monthly support payments of $10,000 for a term of the earlier of 18 months or the termination of the license agreement, however no monthly support payment is required under the 18-month period identified in the PH10 license agreement if support payments are being made under the terms of the PH94B license agreement.

 

Issuance of Common Stock and Warrants to Professional Services Providers and in Settlement of Accounts Payable

 

During our fiscal years ended March 31, 2018 and 2019, we issued the following securities in private placement transactions as compensation for various professional services. Unless otherwise noted, we recorded the related noncash expense as a component of general and administrative expense in the Consolidated Statement of Operations and Comprehensive Loss for the fiscal years ended March 31, 2018 and 2019, as appropriate.

 

During the quarter ended September 30, 2017, we issued an aggregate of 927,500 unregistered shares of our common stock, of which 477,500 shares were issued from our 2016 Plan, for various professional services, including contract research, legal, investor relations and financial advisory services. The common stock issued had an aggregate fair value of $1,503,600 on the dates issued, of which all but $117,300 has been recognized as noncash expense through March 31, 2018. The un-expensed portion at March 31, 2018, which is included in prepaid expenses in our accompanying Consolidated Balance Sheet, is being recognized in expense ratably through July 2019 in accordance with the terms of work orders for certain contract research services to be provided through that period.

 

During the quarter ended December 31, 2017, we issued an aggregate of 70,000 unregistered shares of our common stock, all of which were issued from our Amended and Restated 2016 Stock Incentive Plan for additional investor relations and financial advisory services. The common stock issued had an aggregate fair value of $140,800 on the dates issued.

 

During the quarter ended December 31, 2017, we also issued 500,000 unregistered shares of our common stock having a fair value at the time of issuance of $585,000 and a cash payment of $76,500 to our contract manufacturing organization (CMO) in exchange for and settlement of $526,500 of open accounts payable for services provided by the CMO relating to production of AV-101 drug substance. We recognized a corresponding loss on settlement of accounts payable in the amount of $135,000 in the Consolidated Statement of Operations and Comprehensive Loss for the fiscal year ended March 31, 2018.

 

During the quarter ended March 31, 2018, we issued 30,000 unregistered shares of our common stock to a provider of investor relations and financial advisory services. The common stock issued had an aggregate fair value of $39,000 on the date issued.

 

During the quarter ended June 30, 2018, we issued an aggregate of 100,000 unregistered shares of our common stock having a fair value on the dates of issuance of $123,000 as full or partial compensation to an investor relations service provider and under a financial advisory agreement.

 

During the quarter ended September 30, 2018, we issued 50,000 shares of our unregistered common stock having a fair value on the date of issuance of $68,000 as partial compensation to a corporate awareness service provider.

 

During the quarter ended September 30, 2018, we also issued four-year warrants to three service providers to purchase an aggregate of 288,000 unregistered shares of our common stock at an exercise price of $1.50 per share as full or partial compensation for investor relations and corporate awareness services. We valued the warrants at an aggregate fair value of $266,900 using the Black-Scholes Option Pricing Model and the following grant date weighted average assumptions: exercise price per share: $1.50; market price per share: $1.40; risk-free interest rate: 2.71%; contractual term: 4 years; volatility: 94.17%; dividend rate: 0%; deriving a value per warrant share of $0.93. The fair value of the common stock and warrants is being recognized in expense ratably over the term of the underlying contracts.

 

During the quarter ended March 31, 2019, we issued 25,000 registered shares of our common stock having a fair value of $41,500 on the date of issuance from our Amended and Restated 2016 Stock Incentive Plan to an investor relations and social media service provider. The fair value of the common stock is being recognized in expense ratably over the term of the underlying contract.

 

Stock Option Exercises

 

During the quarter ended March 31, 2019, our Chief Executive Officer and Chief Scientific Officer and a member of our Board exercised outstanding stock options to purchase an aggregate of 29,250 shares of our common stock and we received cash proceeds of $43,900.

 

Warrant Modifications

 

In addition to the Summer 2018 Private Placement warrants modified during our fiscal year ended March 31, 2019, we modified other outstanding warrants during our fiscal year ended March 31, 2018.

 

During the quarter ended September 30, 2017, the Board authorized the modification of outstanding warrants issued in private placement transactions between March 2017 and June 2017 to reduce the exercise prices and increase the number of shares issuable thereunder. We calculated the fair value of the warrant immediately before and after the modification using the Black-Scholes Option Pricing Model and the weighted average assumptions indicated in the table below. We recognized the incremental fair value, $279,700, as warrant modification expense, included as a component of general and administrative expenses, in our Consolidated Statement of Operations and Comprehensive Loss for the fiscal year ended March 31, 2018.

 

Assumption:

  Pre-modification     Post-modification  
Market price per share   $ 1.54     $ 1.54  
Exercise price per share   $ 3.99     $ 2.00  
Risk-free interest rate     1.62 %     1.62 %
Remaining contractual term in years     3.62       3.62  
Volatility     95.5 %     95.5 %
Dividend rate     0.0 %     0.0 %
                 
Number of warrant shares     247,500       495,001  
Weighted average fair value per share   $ 0.71     $ 0.92  

 

During the quarter ended December 31, 2017, the Board authorized the modification of outstanding warrants issued in private placement transactions between August 2017 and November 2017 to reduce the exercise prices of the warrants. We calculated the fair value of the warrants immediately before and after the modification using the Black Scholes Option Pricing Model and the weighted average assumptions indicated in the table below. We recognized the incremental fair value, $13,000, as warrant modification expense, included as a component of general and administrative expenses, in our Consolidated Statement of Operations and Comprehensive Loss for the fiscal year ended March 31, 2018.

 

Assumption:

  Pre-modification     Post-modification  
Market price per share   $ 1.14     $ 1.14  
Exercise price per share   $ 2.32     $ 1.58  
Risk-free interest rate     2.12 %     2.12 %
Remaining contractual term in years     3.85       3.85  
Volatility     98.7 %     98.7 %
Dividend rate     0.0 %     0.0 %
                 
Number of warrant shares     178,572       178,572  
Weighted average fair value per share   $ 0.64     $ 0.71  

 

Warrants Outstanding

 

The following table summarizes outstanding and exercisable warrants to purchase shares of our common stock as of March 31, 2019.  The weighted average exercise price of outstanding and exercisable warrants at March 31, 2019 was $2.53 per share and $2.57 per share, respectively.

 

  Exercise Price     Expiration   Warrants Outstanding at     Warrants Exercisable at  
  per Share  

Date

  March 31, 2019     March 31, 2019  
                   
  $ 1.50   11/30/2021 to 12/13/2022     14,335,200       13,857,200  
  $ 1.59   2/28/2022     292,000       -  
  $ 1.69   2/28/2022     12,000       -  
  $ 1.70   10/5/2022     182,434       182,434  
  $ 1.75   2/28/2022     23,800       -  
  $ 1.80   10/10/2022     115,385       115,385  
  $ 1.82   3/7/2023     1,388,931       1,388,931  
  $ 2.00   4/30/2021     523,573       523,573  
  $ 2.20   10/19/2022     106,383       106,383  
  $ 2.24   10/16/2022     16,737       16,737  
  $ 3.51   12/31/2021     50,000       50,000  
  $ 4.50   9/26/2019     25,000       25,000  
  $ 5.30   5/16/2021     2,705,883       2,705,883  
  $ 6.00   9/26/2019 to 11/30/2019     97,750       97,750  
  $ 7.00   1/11/2020 to 3/3/2023     1,262,878       1,262,878  
  $ 8.00   3/25/2021     185,000       185,000  
  $ 10.00   1/11/2020     20,000       20,000  
  $ 20.00   9/15/2019     110,448       110,448  
      21,453,402     20,647,602        

 

Reserved Shares

 

At March 31, 2019, we have reserved shares of our common stock for future issuance as follows:

 

Upon exchange of all shares of Series A Preferred currently issued and outstanding (1)     750,000  
Upon exchange of all shares of Series B Preferred currently issued and outstanding (2)     5,096,738  
Upon exchange of all shares of Series C Preferred currently issued and outstanding (3)     2,318,012  
Pursuant to warrants to purchase common stock:        
    Subject to outstanding warrants     21,453,402  
Pursuant to stock incentive plan:        
    Subject to outstanding options under the Amended and Restated 2016 Stock Incentive  Plan     6,626,088  
    Available for future grants under the Amended and Restated 2016 Stock Incentive Plan     2,607,162  
      9,233,250  
Total     38,851,402  
____________        
(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement      
(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015; includes 3,936,498 shares of common stock issuable in payment of dividends on Series B Preferred upon conversion      
(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016      

 

At March 31, 2019, we have 18,525,633 authorized shares of our common stock not subject to reserves and available for future issuance.