Quarterly report pursuant to Section 13 or 15(d)

8. Stock-Based Compensation

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8. Stock-Based Compensation
 9 Months Ended
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]  
Stock-Based Compensation

On April 1, 2017, the Company adopted ASU 2016-09 and, as a result, made a Company-wide accounting policy change with respect to accounting for forfeitures. The Company applied a modified retrospective approach for adoption of the new policy and accordingly recorded an $11,000 increase to opening accumulated deficit at April 1, 2017. In accordance with the adoption of the accounting policy, the Company no longer estimates forfeitures based on historical experience and no longer reduces compensation expense based on the expected forfeitures. Beginning April 1, 2017, the Company will record forfeitures as they occur and will reduce compensation cost at the time of forfeiture.

 

The weighted average grant date fair values of options granted during the nine months ended December 31, 2017 was $6.01.

 

Share-based awards compensation expense is as follows:

 

    Three Months     Nine Months  
    Ended     Ended  
    December 31,     December 31,  
    2017     2016     2017     2016  
Cost of service revenue   $ 43,000     $ 63,000     $ 136,000     $ 197,000  
Research and development     38,000       77,000       128,000       201,000  
Selling, general and administrative     584,000       774,000       1,266,000       1,334,000  
Total stock-based compensation   $ 665,000     $ 914,000     $ 1,530,000     $ 1,732,000  

 

At December 31, 2017, there were unrecognized compensation costs of $2,636,000 related to stock options which is expected to be recognized over a weighted-average amortization period of 2.20 years.

 

At December 31, 2017, there were unrecognized compensation costs of $178,000 related to restricted stock which is expected to be recognized over a weighted-average amortization period of 1.66 years.

 

Stock-Based Award Activity

 

On April 1, 2017, pursuant to “evergreen” provisions in the 2011 Stock Incentive Plan and the 2016 Stock Incentive Plan, the number of shares authorized for issuance in the 2011 Plan increased by 643,383 shares and the number of shares authorized for issuance in the 2016 Plan increased by 343,137 shares.

 

Stock options award activity is as follows:

 

    Number of
Shares		     Weighted-
Average
Exercise Price		     Weighted-
Average
Contractual Term		     Aggregate
Intrinsic
Value		  
Outstanding at April 1, 2017     899,000     $ 17.87                  
Options granted     536,000       6.83                  
Options exercised     (1,000 )     5.27                  
Options forfeited     (42,000 )     6.77                  
Options expired     (7,000 )     228.22                  
Outstanding at December 31, 2017     1,385,000     $ 12.76       7.68     $ 128,000  
Exercisable at December 31, 2017     757,000     $ 17.92       6.50     $ 90,000  

 

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock, or $5.45 per share at December 31, 2017.

 

Restricted stock award activity is as follows:

 

   

Number of

Shares

    

Weighted

Average Award

Date Fair Value

per Share

  
Unvested restricted stock awards outstanding at April 1, 2017     34,000     $ 7.27  
Restricted stock awards granted     98,000       5.49  
Restricted stock awards vested     (99,000 )     5.78  
Unvested restricted stock awards outstanding at December 31, 2017     33,000     $ 6.46  

  

No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options.

 

The Company did not capitalize any cost associated with stock-based compensation.

 

The Company issues new shares of common stock upon exercise of stock options or release of restricted stock awards.