Share-based Payments

6 Months Ended

Sep. 30, 2024

16. Share-based Payments

Stock Options

During the six months ended September 30, 2024, no options to purchase shares of the Company’s common stock were granted. The Company granted options to purchase 132,133 shares of common stock during the six months ended September 30, 2023.

The following assumptions were used to derive the weighted average fair value of the stock options granted:

	Six Months Ended September 30,
	2023
Weighted average risk free interest rate		4.53	%
Weighted average expected holding period (years)		6.57
Weighted average expected volatility		51.29	%
Weighted average expected dividend yield		-
Weighted average fair value of options granted	$	3.75

The following is a summary of stock option transactions:

	Number of Shares			Weighted Average Exercise Price
Outstanding at March 31, 2024		1,108,017		$	20.29
Granted		-		$	-
Exercised		-		$	-
Forfeited/Cancelled		(11,166	)	$	19.43
Expired		(36,733	)	$	22.93
Outstanding at September 30, 2024		1,060,118		$	20.21

At September 30, 2024, options to purchase 87,288 shares of common stock were unvested at a weighted average exercise price of $9.32.

At September 30, 2024, there was $323,000 of total unrecognized compensation expense related to unvested stock option awards, which will be recognized over the weighted average remaining vesting period of approximately 2.0 years.

Restricted Stock Units (“RSUs”)

During the six months ended September 30, 2024, the Company granted 316,040 of time-based vesting RSUs, based on the closing market price on the grant date. During the six months ended September 30, 2023, no RSUs were granted by the Company.

The following is a summary of non-vested RSUs:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at March 31, 2024		240,923		$	12.23
Granted		316,040		$	6.40
Vested		(109,382	)	$	14.83
Forfeited/Cancelled		(4,069	)	$	8.72
Outstanding at September 30, 2024		443,512		$	7.47

At September 30, 2024, there was $2,357,000 of unrecognized compensation expense related to RSUs, which will be recognized over the weighted average remaining vesting period of approximately 1.8 years.

Performance Stock Units (“PSUs”)

During the six months ended September 30, 2024, the Company granted 155,391 PSUs (at target performance levels), which cliff vest after a three-year performance period, subject to continued employment. The number of shares earned at the end of the three-year performance period will vary, based only on actual performance, from 0% to 150% of the target number of PSUs granted depending on the Company’s total shareholder return (“TSR”) percentile rank relative to that of a peer group over the performance period. TSR is measured based on a comparison of the closing price on the first trading day of the performance period and the average closing price over the last 30 trading days of the performance period. TSR is considered a market condition because it measures the Company’s return against the performance of the Russell 3000, excluding companies classified as financials and real estate and companies with a market capitalization of more than $600 million, over a given period of time.

During the six months ended September 30, 2023, the Company granted 585,583 PSUs, which vest within a three-year period, subject to continued employment, as follows: (i) if the stock price is greater than or equal to $10.00 per share, then 1/3 of the grant will vest, (ii) if the stock price is greater than or equal to $15.00 per share then the next 1/3 of the grant will vest, and (iii) if the stock price is greater than or equal to $20.00 per share then the final 1/3 of the grant will vest. Recipients are eligible to vest in between 50% and 150% of the third tranche by achieving a stock price between $17.50 and $25.00 per share (each stock price target must be met for 30 consecutive trading days).

The Company calculated the fair value of these PSUs individually for each tranche using the Monte Carlo Simulation Model at the grant date. Compensation cost is recognized over the estimated derived service period. Compensation cost related to these awards will not be adjusted even if the market condition is not met. The following table summarizes the assumptions used in determining the fair value of these awards subject to market conditions:

	Six Months Ended September 30,
	2024			2023
Risk free interest rate		4.45	%		4.32-4.35	%
Expected life in years		3.0			0.2-1.8
Expected volatility of the Company’s common stock		59.80	%		54.2-55.1	%
Average correlation coefficient of peer companies		16.50	%		-	%
Expected dividend yield		-			-
Grant date fair value	$	8.65		$	3.57-8.37

The following is a summary of non-vested PSUs:

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at March 31, 2024		773,923		$	7.73
Granted (1)		166,343		$	8.65
Vested		(32,848	)	$	22.27
Forfeited/Cancelled		(53,299	)	$	22.89
Outstanding at September 30, 2024		854,119		$	6.58

(1)	Granted includes 10,952 additional PSUs issued in connection with the vesting of the Company’s June 2021 PSU grant based on actual Company performance metrics exceeding target performance levels.

At September 30, 2024, there was $1,818,000 of unrecognized compensation expense related to these awards, which will be recognized over the weighted average remaining vesting period of approximately 2.0 years.