Jerash Holdings (US), Inc. Stock Compensation Disclosure
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. A total of 57,200 warrants expired in fiscal 2024. As of March 31, 2025, the Company had outstanding warrants.
Stock Options
On March 21, 2018, the Board of Directors adopted 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, 2025, the Company had 117,710 of shares remaining available for future issuance under the Plan.
All stock option activities are summarized as follows:
| Option to | Weighted Average | |||||||
| Acquire Shares | Exercise Price | |||||||
| Stock options outstanding at March 31, 2023 | 1,136,000 | $ | 6.90 | |||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | (986,000 | ) | 7.00 | |||||
| Stock options outstanding at March 31, 2024 | 150,000 | $ | 6.25 | |||||
| Option to | Weighted Average |
|||||||
| Acquire Shares |
Exercise Price |
|||||||
| Stock options outstanding at March 31, 2024 | 150,000 | $ | 6.25 | |||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | ||||||||
| Stock options outstanding at March 31, 2025 | 150,000 | $ | 6.25 | |||||
All these outstanding options were fully vested and exercisable. As of March 31, 2025, there were 150,000 stock options outstanding. The weighted average remaining life of the options is 3.8 years.
Restricted Stock Units
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. 405,100 RSUs were vested and additional shares were issued as of March 31, 2025.
On March 25, 2024, the Board of Directors approved the grant of 915,040 RSUs under the Plan to 35 executive officers and employees of the Company, with a three-year vesting period. The fair value of these RSUs on March 25, 2024 was $2,745,120, based on the market price of the Company’s common stock as of the date of the grant. As of March 31, 2025, there were $1,805,400 unrecognized stock-based compensation expenses to be recognized through March 2027 and 911,440 RSUs remained.
RSU activities are summarized as follows:
| Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
| RSU outstanding at March 31, 2023 | 405,100 | $ | 4.78 | |||||
| Granted | 915,040 | 3.00 | ||||||
| Vested | ||||||||
| Forfeited | ||||||||
| RSU outstanding at March 31, 2024 | 1,320,140 | $ | 3.55 | |||||
| Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
| RSU outstanding at March 31, 2024 | 1,320,140 | $ | 3.55 | |||||
| Granted | ||||||||
| Vested | (405,100 | ) | 4.78 | |||||
| Forfeited | (3,600 | ) | 3.00 | |||||
| RSU outstanding at March 31, 2025 | 911,440 | $ | 3.00 | |||||
Total expenses related to the RSUs issued were $1,758,146 and $986,048 for the fiscal years ended March 31, 2025 and 2024, respectively.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.