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Note 16 - Stockholders' Equity
 12 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Equity [Text Block]

16. Stockholders’ Equity

 

Stock-Based Compensation Plans

 

As of March 31, 2024, the Company had two active stock plans: the Amended and Restated 2007 Director Stock Plan (the “2007 Director Plan”) and the 2022 Stock Incentive Plan (the "2022 Plan"). On August 2, 2022, the Company's stockholders approved the 2022 Plan and amendments to the Company's 2007 Director Plan. The 2022 Plan authorizes the issuance of 1,150,000 shares of common stock. The amendment to the 2007 Director Plan increased the total number of shares of common stock authorized for issuance under the 2007 Director Plan from 280,000 shares to 430,000 shares. 

 

The 2022 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the IRC 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 is no less than 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. The 2022 Plan replaced the Company’s 2007 Stock Incentive Plan, as amended (the “2007 Plan”). No further awards are granted under the 2007 Plan following effectiveness of the 2022 Plan; however, the terms and conditions of the 2007 Plan continue to govern any outstanding awards granted thereunder.

 

The 2007 Director Plan provides 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 on the third business day following the last day of each fiscal year with an aggregate value equal to $50,000 using the closing price of the Company's common stock two business days following the last day of each fiscal year, subject to proration for any partial fiscal year of service.

 

As of March 31, 2024, the 2022 Plan had 70,162 shares available for future issuance, and the 2007 Director Plan had 122,796 shares available for future issuance. Additionally, any shares which are subject to awards previously granted under the 2007 Plan that are forfeited or lapse unexercised and which following the effectiveness of the 2022 Plan are not issued under the 2007 Plan will become available for issuance under the 2022 Plan.

 

Stock-Based Compensation

 

The components of stock-based compensation for the years ended  March 31, 2024 and 2023 were as follows (in thousands):

 

  

Fiscal years ended March 31,

 
  

2024

  

2023

 

Stock options

 $40  $32 

Restricted stock and stock awards

  4,563   4,656 

Employee stock purchase plan

  49   41 

Total stock-based compensation expense

 $4,652  $4,729 

 

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 less than $0.1 million as of  March 31, 2024. The total unrecognized compensation cost for unvested outstanding restricted stock was $4.7 million as of  March 31, 2024. This expense will be recognized over a weighted-average expense period of approximately 1.6 years.

 

The following table summarizes stock-based compensation expense by financial statement line item for the fiscal years ended  March 31, 2024 and 2023 (in thousands):

 

  

Fiscal years ended March 31,

 
  

2024

  

2023

 

Cost of revenues

 $293  $283 

Research and development

  627   865 

Selling, general and administrative

  3,732   3,581 

Total

 $4,652  $4,729 

 

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, 2023

  81,205  $16.92         

Granted

  —   —         

Exercised

  —   —         

Canceled/forfeited

  (44,999)  24.95         

Outstanding at March 31, 2024

  36,206  $6.94   6.2  $238 

Exercisable at March 31, 2024

  25,924  $7.34   5.4  $160 

Fully vested and expected to vest at March 31, 2024

  36,107  $6.94   6.2  $237 

 

The Company did not grant any stock options under the 2007 Director Plan nor under the 2022 Plan during the fiscal year ended  March 31, 2024. The Company granted 20,564 stock options under the 2007 Director Plan during the fiscal year ended March 31, 2023. The stock options granted during the fiscal year ended March 31, 2023 will vest over 2 years. The weighted average assumptions used in the Black Scholes valuation model for stock options granted during the fiscal year ended March 31, 2023 are as follows:

 

     
     

Expected volatility

  71.4%

Risk-free interest rate

  3.1%

Expected life (years)

  6.1 

Dividend yield

  None 

 

The following table summarizes the restricted stock activity for the year ended March 31, 2024:

 

  

Shares

  

Weighted Average Grant Date Fair Value

  

Intrinsic Aggregate Value (thousands)

 

Outstanding at March 31, 2023

  1,477,999  $6.89     

Granted

  735,175   6.57     

Vested

  (735,267)  6.83     

Forfeited

  (52,253)  7.31     

Outstanding at March 31, 2024

  1,425,654  $6.74  $19,261 

 

The total fair value of restricted stock that was granted during the fiscal years ended  March 31, 2024 and 2023 was $4.8 million and $4.7 million, respectively. The total fair value of restricted stock that vested during the fiscal years ended  March 31, 2024 and 2023 was $4.5 million and $2.6 million, respectively.

 

There were 213,000 performance-based restricted shares awarded during the fiscal year ended  March 31, 2024 for which the performance conditions are deemed probable to be met and the expense is being recorded over a three-year vesting period. There were 200,000 performance-based restricted shares awarded during the fiscal year ended  March 31, 2023 for which the performance conditions are deemed probable to be met and the expense is being recorded over a three-year vesting period.

 

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 maintains the 2000 Employee Stock Purchase Plan, as amended (the "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, 2024, the ESPP had 66,221 shares available for future issuance. The Company recognized less than $0.1 million of compensation expense for both the fiscal years ended  March 31, 2024 and 2023, related to the ESPP.