12. Stockholders’ Equity

Stock-Based Compensation

The components of employee stock-based compensation for the years ended March 31, 2016, 2015 and 2014 were as follows (in thousands):

	Fiscal years ended March 31,
	2016		2015		2014
Stock options	$	663	$	1,851	$	2,730
Restricted stock and stock awards		2,574		4,063		7,936
Employee stock purchase plan		11		22		30
Total stock-based compensation expense	$	3,248	$	5,936	$	10,696

The estimated fair value of the Company’s stock-based awards, less expected annual forfeitures, is amortized over the awards’ service period. The total unrecognized compensation cost for unvested outstanding stock options was $0.6 million for the fiscal year ended March 31, 2016. This expense will be recognized over a weighted-average expense period of approximately 2.4 years. The total unrecognized compensation cost for unvested outstanding restricted stock was $2.6 million for the fiscal year ended March 31, 2016. This expense will be recognized over a weighted-average expense period of approximately 1.8 years.

The following table summarizes employee stock-based compensation expense by financial statement line item for the fiscal years ended March 31, 2016, 2015 and 2014 (in thousands):

	Fiscal years ended March 31,
	2016		2015		2014
Cost of revenues	$	274	$	719	$	1,002
Research and development		418		1,728		2,751
Selling, general and administrative		2,556		3,489		6,943
Total	$	3,248	$	5,936	$	10,696

The following table summarizes the information concerning currently outstanding and exercisable employee and non-employee options:

						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic Value
	Options / Shares			Price		Term		(thousands)
Outstanding at March 31, 2015		380,940		$	84.57
Granted		-
Exercised		-
Cancelled/forfeited		(14,391	)		115.35
Outstanding at March 31, 2016		366,549		$	83.39		5.7	$	-
Exercisable at March 31, 2016		261,656		$	110.06		4.8	$	-
Fully vested and expected to vest at March 31, 2016		357,776		$	85.07		5.6	$	-

There were no stock options granted during the fiscal year ended March 31, 2016. The weighted-average grant-date fair value of stock options granted during the fiscal years ended March 31, 2015 and 2014 was per share, $10.18 per share, and $16.20 per share, respectively. Intrinsic value represents the amount by which the market price of the common stock exceeds the exercise price of the options. Given the decline in the Company’s stock price, exercisable options as of March 31, 2016, 2015 and 2014 had no intrinsic value.

The weighted average assumptions used in the Black-Scholes valuation model for stock options granted during the fiscal years ended March 31, 2016, 2015, and 2014 are as follows:

	Fiscal years ended March 31,
	2016	2015			2014
Expected volatility	N/A		85.5	%		75.1	%
Risk-free interest rate	N/A		1.9	%		1.7	%
Expected life (years)	N/A		5.8			5.9
Dividend yield	None	None			None

The expected volatility rate was estimated based on an equal weighting of the historical volatility of the Company’s common stock and the implied volatility of the Company’s traded options. The expected term was estimated based on an analysis of the Company’s historical experience of exercise, cancellation, and expiration patterns. The risk-free interest rate is based on the average of the five and seven year U.S. Treasury rates.

The following table summarizes the employee and non-employee restricted stock activity for the year ended March 31, 2016:

				Weighted		Intrinsic
				Average		Aggregate
				Grant Date		Value
	Shares			Fair Value		(thousands)
Outstanding at March 31, 2015		340,588		$	20.82
Granted		420,189			6.24
Vested		(262,984	)		14.56
Forfeited		(14,949	)		76.22
Outstanding at March 31, 2016		482,844		$	9.62	$	3,670

The total fair value of restricted stock that was granted during the fiscal years ended March 31, 2016, 2015 and 2014 was $2.6 million, $5.6 million, and $4.5 million, which includes $0.5 million for bonus and severance, respectively. The total fair value of restricted stock that vested during the fiscal years ended March 31, 2016, 2015 and 2014 was $1.7 million, $3.1 million, $3.7 million, which includes $0.5 million for bonus and severance, respectively.

There were no performance-based restricted stock shares awarded during the fiscal year ended March 31, 2016. The restricted stock awarded during the fiscal years ended March 31, 2015 and 2014 includes approximately 38,021, and 40,201 shares, respectively, of performance-based restricted stock, which would vest upon achievement of certain financial performance measurements. Included in the table above are 6,666 shares of restricted stock units outstanding.

The remaining shares awarded vest upon the passage of time. For awards that vest upon the passage of time, expense is being recorded over the vesting period.

Stock-Based Compensation Plans

As of March 31, 2016, the Company had two active stock plans: the 2007 Stock Incentive Plan, as amended (the “2007 Plan”) and the Amended and Restated 2007 Director Stock Plan (the “2007 Director Plan”). The 2007 Plan replaced the Company’s 2004 Stock Incentive Plan upon the approval by the Company’s stockholders on August 3, 2007. The 2007 Director Plan replaced the Second Amended and Restated 1997 Director Stock Option Plan, which expired pursuant to its terms on May 2, 2007. Both the 2007 Plan and the 2007 Director Plan were approved by the Company’s stockholders on August 1, 2014.

The 2007 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. In the case of options, the exercise price shall be equal to at least the fair market value of the common stock, as determined by (or in a manner approved by) the Board of Directors, on the date of grant. The contractual life of options is generally 10 years. Options generally vest over a 3-5 year period while restricted stock generally vests over a 3 year period.

As of March 31, 2016, the 2007 Director Plan provided for the grant of nonstatutory stock options and stock awards to members of the Board of Directors who are not also employees of the Company (outside directors). Under the terms of the 2007 Director Plan as of March 31, 2014, each outside director was granted an option to purchase 1,000 shares of common stock upon his or her initial election to the Board of Directors with an exercise price equal to the fair market value of the Company’s common stock on the date of the grant. These options vest in equal annual installments over a two-year period. In addition, as of March 31, 2014, each outside director was granted an award of 300 shares of common stock three business days following each annual meeting of stockholders, provided that such outside director had served as a director for at least one year. Under the terms of the 2007 Director Plan effective April 1, 2014, each outside director is granted an option to purchase shares of common stock with an aggregate grant date value equal to $40,000 upon his or her initial election to the Board with an exercise price equal to the fair market value of the Company’s common stock on the date of the grant. These options vest in equal annual installments over a two-year period. In addition, effective April 1, 2014, each outside director is granted an award of shares of common stock with an aggregate grant date value equal to $40,000 three business days following the last day of each fiscal year, subject to proration for any partial fiscal year of service.

As of March 31, 2016, the 2007 Plan had 195,194 shares and the 2007 Director Plan had 35,505 shares available for future issuance.

Employee Stock Purchase Plan

The Company has an employee stock purchase plan (ESPP) which provides employees with the opportunity to purchase shares of common stock at a price equal to the market value of the common stock at the end of the offering period, less a 15% purchase discount. The Company recognized compensation expense of less than $0.1 million during the year fiscal ended March 31, 2016 and $0.1 million for each of the fiscal years ended March 31, 2015 and 2014, respectively, related to the ESPP. As of March 31, 2016 the ESPP had no shares available for future issuance.

Equity Offerings

On April 29, 2015, the Company completed an equity offering with Cowen and Company, LLC, under which the Company sold 4.0 million shares of its common stock at an offering price of $6.00 per share. After underwriting, commissions and expenses, the Company received net proceeds from the offering of approximately $22.3 million.