Stockholders’ Equity

Stock-Based Compensation Plans

As of March 31, 2018, 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”). Both the 2007 Plan and the 2007 Director Plan were approved by the Company’s stockholders on July 29, 2016.

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, 2018, 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, 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, each outside director is granted an award of shares of common stock with an aggregate grant date value equal to $40,000 3 business days following the last day of each fiscal year, subject to proration for any partial fiscal year of service.

As of March 31, 2018, the 2007 Plan had 666,092 shares and the 2007 Director Plan had 113,662 shares available for future issuance.

Stock-Based Compensation

The components of employee stock-based compensation for the years ended March 31, 2018, 2017 and 2016 were as follows (in thousands):



	Fiscal years ended March 31,
	2018		2017		2016
Stock options	$	227	$	323	$	663
Restricted stock and stock awards	2,434		2,569		2,574
Employee stock purchase plan	31		—		11
Total stock-based compensation expense	$	2,692	$	2,892	$	3,248

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 $0.2 million for the fiscal year ended March 31, 2018. This expense will be recognized over a weighted-average expense period of approximately 1.0 year. The total unrecognized compensation cost for unvested outstanding restricted stock was $2.4 million for the fiscal year ended March 31, 2018. This expense will be recognized over a weighted-average expense period of approximately 1.9 years.

The following table summarizes employee stock-based compensation expense by financial statement line item for the fiscal years ended March 31, 2018, 2017 and 2016 (in thousands):



	Fiscal years ended March 31,
	2018		2017		2016
Cost of revenues	$	137	$	185	$	274
Research and development	373		214		418
Selling, general and administrative	2,182		2,493		2,556
Total	$	2,692	$	2,892	$	3,248

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



	Options / Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value (thousands)
Outstanding at March 31, 2017	352,008		$	79.63
Granted	—		—
Exercised	—		—
Canceled/forfeited	(71,117	)	119.64
Outstanding at March 31, 2018	280,891		$	69.51	4.6	$	—
Exercisable at March 31, 2018	236,040		$	80.15	4.3	$	—
Fully vested and expected to vest at March 31, 2018	279,465		$	69.79	4.6	$	—

There were no stock options granted during the fiscal year ended March 31, 2018. There were 9,703 stock options granted during the fiscal year ended March 31, 2017 at a weighted average grant date fair value of $4.06 per share. There were no stock options granted during the fiscal year ended March 31, 2016. 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, 2018, 2017 and 2016 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, 2018, 2017, and 2016 are as follows:



	Fiscal years ended March 31,
	2018	2017		2016
Expected volatility	N/A	67.6	%	N/A
Risk-free interest rate	N/A	1.3	%	N/A
Expected life (years)	N/A	5.7		N/A
Dividend yield	N/A	—	%	N/A

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, 2018:



	Shares		Weighted Average Grant Date Fair Value		Intrinsic Aggregate Value (thousands)
Outstanding at March 31, 2017	424,925		$	9.47
Granted	854,307		3.91
Vested	(344,147	)	8.28
Forfeited	(38,599	)	8.99
Outstanding at March 31, 2018	896,486		$	4.65	$	5,218

The total fair value of restricted stock that was granted during the fiscal years ended March 31, 2018, 2017 and 2016 was $3.3 million, $1.7 million, and $2.6 million, respectively. The total fair value of restricted stock that vested during the fiscal years ended March 31, 2018, 2017 and 2016 was $1.4 million, $2.3 million, $1.7 million, respectively.

There were 267,125 performance-based restricted shares awarded during the fiscal years ended March 31, 2018, and none during the fiscal years ended March 31, 2017 and 2016, respectively. Included in the table above are 20,000 restricted stock units vested during fiscal 2017.

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.

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. As of March 31, 2018, the ESPP had 259,856 shares available for future issuance. The Company recognized less than $0.1 million compensation expense for the fiscal year ended March 31, 2018, no compensation expense during the fiscal year ended March 31, 2017 and less than $0.1 million compensation expense for the fiscal year ended March 31, 2016, related to the ESPP.

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.

On May 10, 2017, the Company completed an additional equity offering (the "Offering") which included a 30-day option (the "Option") to the underwriters to purchase up to an additional 600,000 shares of common stock at the public offering price. The total net proceeds to us during the year ended March 31, 2018 from the Offering and Option were approximately $17.0 million, after deducting underwriting discounts and commissions and offering expenses payable by us. The Company terminated its At Market Issuance Sales Agreement ("ATM") with FBR Capital Markets & Co ("FBR") in conjunction with the Offering.

ATM Arrangement

On January 27, 2017, the Company entered into an ATM arrangement, pursuant to which, the Company could, at its discretion, sell up to $10.0 million of the Company’s common stock through its sales agent, FBR. Sales of common stock made under the ATM were made pursuant to the prospectus supplement dated January 27, 2017, which supplemented the prospectus dated October 1, 2014, included in the shelf registration statement that AMSC filed with the Securities and Exchange Commission (“SEC”) on September 19, 2014.

During the year ended March 31, 2017, the Company received net proceeds of $2.5 million, from sales of approximately 379,693 shares of its common stock at an average sales price of approximately $6.79 per share under the ATM. No sales of the Company's common stock were made under the ATM after March 31, 2017. On May 4, 2017, the Company provided to FBR the sales agent, a notice of termination of the ATM.