Quarterly report pursuant to Section 13 or 15(d)

8. Stock-Based Compensation

v3.7.0.1
8. Stock-Based Compensation
 3 Months Ended
Jun. 30, 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 a $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 period of June 30, 2017 and 2016 was $6.06 and $3.71, respectively.

 

Share-based awards compensation expense is as follows:

 

    Three Months Ended June 30,  
    2017     2016  
Cost of revenues   $ 44,000     $ 68,000  
Research and development     45,000       64,000  
Selling, general and administrative     349,000       279,000  
Total stock-based compensation   $ 438,000     $ 411,000  

 

 

At June 30, 2017, there were unrecognized compensation costs of $3,150,000 related to stock options which is expected to be recognized over a weighted-average amortization period of 2.62 years.

 

 

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

 

Stock-Based Award Activity

 

On April 1, 2017, pursuant to “evergreen” provisions in the 2011 Plan and the 2016 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     483,000       6.93                  
Options forfeited     (22,000 )     6.68                  
Options expired     (7,000 )     234.45                  
Outstanding at June 30, 2017     1,353,000     $ 12.99       8.12     $ 525,000  
Exercisable at June 30, 2017     723,000     $ 18.57       6.91     $ 336,000  

 

 

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 $6.62 per share at June 30, 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     20,000       6.89  
Restricted stock awards vested     (9,000 )     6.83  
Unvested restricted stock awards outstanding at June 30, 2017     45,000     $ 7.19  

 

At June 30, 2017, there were unrecognized compensation costs of $241,000 related to restricted stock which is expected to be recognized over a weighted-average amortization period of 1.67 years.

 

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.

 

The Company issues new shares of common stock upon exercise of stock based awards.