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Note 12 - Warrants and Derivative Liabilities
 12 Months Ended
Mar. 31, 2021
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
12.
Warrants and Derivative Liabilities
 
Contingent Consideration
  
The Company evaluated the NEPSI Acquisition earnout payment set forth in the Stock Purchase Agreement (see Note
3,
"NEPSI Acquisition" for further details), which
may
require settlement in the Company's common stock, and determined the contingent consideration qualified for liability classification and derivative treatment under ASC
815,
Derivatives and Hedging
. As a result, for each period, the fair value of the contingent consideration will be remeasured and the resulting gain or loss will be recognized in operating expenses until the share amount is fixed.
  
The following is a summary of the key assumptions used in a Monte Carlo simulation to calculate the fair value of the contingent consideration related to the NEPSI Acquisition:
 
Fiscal Year 2020
  
March 31, 2021
    
December 31, 2020
    
October, 1, 2020
  
Revenue risk premium
    
6.70
 %    
6.90
 %    
7.10
 %
Revenue volatility
    
30
 %    
30
 %    
30
 %
Stock Price
   $
18.96
     $
23.42
     $
14.23
  
Payment delay (days)
    
80
      
80
      
—
  
Fair value
  
$7.1 million
    
$6.7 million
    
$4.0 million
  
 
Warrants
 
The Company accounted for its warrants as liabilities due to certain adjustment provisions within the instruments, which required that they be recorded at fair value. The warrants were subject to revaluation at each balance sheet date and any change in fair value was recorded as a change in fair value of warrants until the earlier of its expiration or its exercise at which time the warrant liability was reclassified to equity. The Company calculated the fair value of the warrants utilizing an integrated lattice model. See Note
6,
"Fair Value Measurements," for further discussion.  As of
March 31, 2021
and
2020
, the Company had 
no
remaining outstanding warrants.
 
Hercules Warrant
 
On
December 19, 2014,
the Company entered into a
second
amendment to the Loan and Security Agreement with Hercules (the "Hercules Second Amendment"). In conjunction with the Hercules Second Amendment, the Company issued Hercules a warrant to purchase
58,823
shares of the Company's common stock (the "Hercules Warrant").  The Hercules Warrant was exercisable at any time after its issuance at an exercise price of
$7.85
per share, subject to certain price-based and other anti-dilution adjustments, including the equity offering in
May 2017,
the acquisition of Infinia Technology Corporation ("ITC") with common stock in
September 2017
and sales of common stock under the ATM entered into in
January 2017.  
This warrant had a fair value of
$0.4
million as of
March 31, 2019.
On
April 8, 2019,
Hercules notified the Company of its intent to exercise this warrant on a cashless basis.  Hercules received
22,821
shares of the Company's common stock on
April 17, 2019. 
As a result of this exercise the Company recorded a net gain of
$0.1
million to change in fair value of warrants, resulting from the decrease in the fair value of the Hercules Warrant during the year ended
March 31, 2020
.  
 
Hudson Warrant
 
On
November 13, 2014,
the Company completed an offering of
909,090
units of the Company's common stock with Hudson Bay Capital. Each unit consisted of
one
share of the Company's common stock and
0.9
of a warrant to purchase
one
share of common stock, or warrants to purchase in the aggregate
818,181
shares (the "Hudson Warrants").  The Hudson Warrants were exercisable at any time, at an exercise price equal to
$7.81
per share, subject to certain price-based and other anti-dilution adjustments including those noted above.  On
November 13, 2019,
Hudson partially exercised the Hudson Warrants for
786,000
restricted shares of Company common stock at
$7.81
per share.  The remaining
32,181
warrants expired on
November 13, 2019.
The Company recorded a net gain of
$4.6
 million to change in fair value of warrants, resulting from the decrease in the fair value of the Hudson Warrants during the year ended 
March 31, 2020
.