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STOCKHOLDERS’ EQUITY
 12 Months Ended
Mar. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 6: STOCKHOLDERS’ EQUITY

 

Authorized Capital Stock

 

On June 19, 2024, our Board of Directors and stockholders approved an increase in our authorized capital stock from 15,000,000 shares of common stock, no par value, to 50,000,000 shares of common stock, no par value. As of March 31, 2026 and March 31, 2025, there were 14,024,468 and 13,026,464 shares of common stock issued and outstanding, respectively.

 

Common Stock

 

We are authorized to issue up to a total of 50,000,000 shares of common stock, no par value per share. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of our stockholders, including the election of directors. Holders of our common stock have no cumulative voting rights. Further, holders of our common stock have no preemptive or conversion rights or other subscription rights.

 

Additionally, if a quorum is present, an action by stockholders entitled to vote on a matter is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action (other than the election of directors). The vote of a majority of the shares of our common stock held by stockholders present in person or represented by proxy and entitled to vote at a stockholder meeting will be sufficient to elect directors or to approve a proposal.

 

Initial Public Offering

 

During the fiscal year ended March 31, 2026, the Company issued an aggregate of 800,004 shares of common stock for total net proceeds of $3,935,522 pursuant to the April 2025 initial public offering, including the partial exercise of the underwriters’ over-allotment option. The Company’s common stock began trading on The Nasdaq Capital Market under the ticker symbol “FATN” on April 8, 2025.

 

Acquisition of Non-Controlling Interest

 

In July 2024, the Company acquired the remaining 4.4% non-controlling interest in FP India in exchange for 577,156 shares of common stock. As a result of this transaction, FP India became a wholly owned subsidiary of the Company, and there are no non-controlling interests as of March 31, 2026 or March 31, 2025.

 

Issuances to Consultants and Employees

 

During the fiscal year ended March 31, 2026, the Company issued an aggregate of 198,000 shares of common stock to consultants and employees as consideration for cash and services rendered. The aggregate fair value of the shares, determined based on the market price of the Company’s common stock on the date of issuance, totaled $853,220, of which $83,000 was received in cash. The Company recognized total stock-based compensation expense of $770,220 during the fiscal year ended March 31, 2026, comprising $625,220 attributable to share issuances to consultants and employees and $145,000 attributable to stock options exercised by directors and officers during the fourth quarter of the fiscal year. Stock-based compensation expense is included within general and administrative expenses in the consolidated statements of operations.

 

Preferred Stock

 

The Company is not currently authorized to issue preferred stock under its Articles of Incorporation, but may choose to do so in the future.

 

Stock-Based Compensation

 

The Company adopted the FatPipe, Inc. 2024 Equity Incentive Plan (the “2024 Plan”) in connection with the IPO. The 2024 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock awards, restricted stock units, performance awards, and other stock or cash awards to officers, directors, employees, and consultants of the Company and its affiliates. The 2024 Plan is administered by our Compensation Committee.

 

Stock-based compensation expense for the fiscal year ended March 31, 2026 was $770,220, all of which was recognized within general and administrative expenses. No stock-based compensation expense was recognized for the fiscal year ended March 31, 2025.

 

The maximum aggregate number of shares of common stock that may initially be issued under the 2024 Plan is 2,600,000 shares (the “Share Reserve”), representing approximately 5.2% of the Company’s authorized common stock. The Share Reserve will automatically increase on the first day of each calendar year, beginning in 2024 and ending in (and including) 2034, by an amount equal to 3% of the total number of shares of capital stock outstanding on March 31 immediately preceding the applicable evergreen date, subject to the Board’s discretion to provide for a lesser increase or no increase. During any fiscal year, no participant may receive awards covering more than 130,000 shares (combined across stock options, restricted stock, and restricted stock units). The maximum value of awards (and cash subject to cash-based awards) granted to any non-employee director during any fiscal year, taken together with cash fees paid to such director for service on the Board, may not exceed $500,000 in total value. Stock options have a maximum term of five years from the date of grant, and the per-share exercise price must be no less than 85% of the fair market value per share on the date of grant (or 100% of fair market value in the case of an incentive stock option granted to a holder of more than 10% of the voting power of the Company). The 2024 Plan has a term of 10 years from its effective date in 2024 and will continue in effect, unless terminated earlier, until 2034.

 

 

Earnings Per Share

 

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period, increased to include all additional common shares that would have been outstanding had potentially dilutive common shares been issued. The following table presents the computation of basic and diluted earnings per share for the fiscal years ended March 31, 2026 and 2025:

 

 

   2026   2025 
  

Year Ended

March 31,

 
   2026   2025 
Net income attributable to stockholders  $4,969,961   $1,966,408 
           
Weighted-average shares of common stock outstanding - basic   13,882,787    12,858,852 
Effect of dilutive securities   123,605    - 
Weighted-average shares of common stock outstanding - diluted   14,006,392    12,858,852 
           
Earnings per share - basic  $0.36   $0.15 
Earnings per share - diluted  $0.35   $0.15