Note 10 - Stockholders' Equity | 12 Months Ended |
Mar. 31, 2014 |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
10. Stockholders’ Equity |
|
Common Stock Reserved for Future Issuance |
|
At March 31, 2014, shares of common stock reserved for future issuance were as follows: |
|
| | | | | | | | | | | | | | | | | | | |
Equity incentive plans: | | | | | | | | | | | | | | | | | | | | |
Awards outstanding | | | 639,000 | | | | | | | | | | | | | | | | | |
Options outstanding | | | 386,000 | | | | | | | | | | | | | | | | | |
Reserved for future grants | | | 555,000 | | | | | | | | | | | | | | | | | |
Total common stock reserved for future issuance | | | 1,580,000 | | | | | | | | | | | | | | | | | |
|
The effect of recording stock-based compensation expense for each of the periods presented was as follows: |
|
| | Fiscal Years Ended | | | | | | | | | | | | | |
March 31, | | | | | | | | | | | | |
(in thousands) | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | | | | | |
Cost of revenues | | $ | 250 | | | $ | 134 | | | | | | | | | | | | | |
Research and development | | | 167 | | | | 171 | | | | | | | | | | | | | |
Sales and marketing | | | 345 | | | | 284 | | | | | | | | | | | | | |
General and administrative | | | 385 | | | | 540 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Impact on net loss | | $ | 1,149 | | | $ | 1,129 | | | | | | | | | | | | | |
|
As of March 31, 2014, the unrecorded share-based compensation balance related to stock options outstanding excluding estimated forfeitures was $0.6 million and will be recognized over an estimated weighted average amortization period of 2.80 years. As of March 31, 2014, the unrecorded share-based compensation balance related to stock awards outstanding excluding estimated forfeitures was $3.1 million and will be recognized over an estimated weighted average amortization period of 2.84 years. The amortization period is based on the expected remaining vesting term of the options or awards. |
|
1999 Employee Stock Purchase Plan (“ESPP”) |
|
In fiscal year 2014, the price paid for the Company’s common stock purchased under the ESPP was equal to 85% of the lower of the fair market value of the Company’s common stock at the beginning of each offering period or at the end of each offering period. The compensation expense in connection with the ESPP for the fiscal year ended March 31, 2014 was $114,000. During the fiscal year ended March 31, 2014 there were 37,553 shares issued under the ESPP at a weighted average purchase price of $0.00 per share.move391498097 |
|
Redeemable Convertible Preferred Stock |
|
The Company is authorized to issue 1 million shares of preferred stock at a par value of $0.0001 per share. There were 680,047 shares of Series D redeemable convertible Stock issued and outstanding at March 31, 2014 and no preferred stock issued and outstanding at March 31, 2013. |
|
The Board of Directors has the authority, without action by the stockholders, to designate and issue the preferred stock in one or more series and to fix the rights, preferences, privileges, and related restrictions, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of the series. |
|
The Series D Stock was not entitled to a liquidation or dividend preference. If the Series D Stock had not been converted into Common Stock following stockholder approval in April 2014, beginning on April 15, 2014, the Series D Stock would have been entitled to 10% accruing dividends per annum. The dividends would have been payable quarterly in cash, beginning on June 30, 2014. The shares of Series D Stock were also redeemable by the Company upon the request of the holders of at least a majority of the then outstanding Series D Stock. The redemption price would have been equal to the product of (i) the number of shares or fraction of a share of Series D Preferred Stock to be redeemed from each such holder multiplied by (ii) ten (10) times the conversion price then in effect, plus any accrued and unpaid dividends up to, but not including, the redemption date. |
|
The holders of Series D Stock had the right to vote together with the holders of the Company’s Common Stock as a single class on any matter on which the holders of Common Stock were entitled to vote, except that the holders of Series D Stock were not eligible to vote their shares of Series D Stock on the proposal submitted to the Company’s stockholders for approval of the issuance and sale of the securities in the Financing and the conversion of the Series D Stock. Holders of Series D Stock were entitled to cast a fraction of one vote for each share of Common Stock issuable to such holder on the record date for the determination of stockholders entitled to vote at a conversion rate the numerator of which was $60.00 and the denominator of which was the closing bid price per share of the Common Stock on January 24, 2014, as reported by Bloomberg Financial Markets. |
|
On April 10, 2014, following approval by the Company’s stockholders, each whole share of Series D Stock converted automatically into ten shares of Common Stock at an initial conversion price of $6.00 per share of Common Stock, for a total of 690,274 shares of Common Stock issued upon such conversion (including the conversion of the shares of Series D Stock issued to Lake Street as described above). move391498099Because the Series D Stock was redeemable at the option of the holder (prior to the shareholders approving conversion on April 10, 2014 as discussed above), we have recorded it in temporary equity as of March 31, 2014. |
|
Stock Option Plans—Approved by Stockholders |
|
1996 Plan |
|
The Company adopted the 1996 Stock Plan as amended and restated March 28, 2001 (the “1996 Plan”). A total of approximately 815,000 shares of common stock have been reserved under the 1996 Plan. With limited restrictions, if shares awarded under the 1996 Plan are forfeited, those shares will again become available for new awards under the 1996 Plan. The 1996 Plan permits the grant of options, stock appreciation rights, shares of restricted stock, and stock units. The types of options include incentive stock options that qualify for favorable tax treatment for the optionee under Section 422 of the Internal Revenue Code of 1986, and non-statutory stock options not designed to qualify for favorable tax treatment. Employees, non-employee members of the board and consultants are eligible to participate in the 1996 Plan. Incentive stock options are granted at an exercise price of not less than 100% of the fair market value per share of the common stock on the date of grant, and non-statutory stock options are granted at an exercise price of not less than 85% of the fair market value per share on the date of grant. Options generally vest with respect to 25% of the shares one year after the options’ vesting commencement date and the remainder vest in equal monthly installments over the following 36 months. Options granted under the 1996 Plan have a maximum term of ten years. |
|
1999 Equity Incentive Plan |
|
The Company adopted the 1999 Equity Incentive Plan (the “1999 Plan”) on November 18, 1999. The 1999 Plan was amended in May 2010, such that the number of shares reserved for issuance is no longer automatically increased, and a total of 1,551,000 shares were reserved for future issuance. With limited restrictions, if shares awarded under the 1999 Plan are forfeited, those shares will again become available for new awards under the 1999 Plan. The 1999 Plan permits the grant of options, stock appreciation rights, shares of restricted stock, and stock units. The types of options include incentive stock options that qualify for favorable tax treatment for the optionee under Section 422 of the Internal Revenue Code of 1986 and non-statutory stock options not designed to qualify for favorable tax treatment. Employees, non-employee members of the Board of Directors and consultants are eligible to participate in the 1999 Plan. Each eligible participant is limited to being granted options or stock appreciation rights covering no more than 33,000 shares per fiscal year, except in the first year of employment where the limit is 66,000 shares. Incentive stock options are granted at an exercise price of not less than 100% of the fair market value per share of the common stock on the date of grant, and non-statutory stock options are granted at an exercise price of not less than 85% of the fair market value per share on the date of grant. Options generally vest with respect to 25% of the shares one year after the options’ vesting commencement date and the remainder vest in equal monthly installments over the following 36 months. Options granted under the 1999 Plan have a maximum term of ten years. |
|
On December 3, 2012, the Compensation Committee of the Board of Directors of the Company adopted a Long Term Performance Incentive Plan (the “LTPIP”) within the 1999 Equity Incentive Plan (the “1999 Plan”), under which restricted stock units would be granted to the Company’s executives. Under the LTPIP, sixty percent (60%) of the restricted stock units will vest based upon achievement of contracted monthly recurring revenue targets over a period of three years, with fifty percent (50%) of the amount withheld from vesting until the Company achieves profitability, and forty percent (40%) vest based upon operating profit targets over a period of three years. The restricted stock units granted under the LTPIP include 420,000 shares granted to the Company’s executives, under which the Company’s Chief Executive Officer received a grant of 220,000 restricted stock units, and the Company’s Chief Financial Officer, Chief Strategy Officer, Chief Operating Officer and Chief Commercial Officer each received a grant of 50,000 restricted stock units. The Company is amortizing the related compensation expense on a straight-line basis over the expected vesting period. The compensation expense was $0.1 million and $0.4 million for the years as of March 31, 2014 and 2013, respectively. |
|
1999 Employee Stock Purchase Plan |
|
On November 18, 1999, the Company’s Board of Directors approved the adoption of the 1999 Employee Stock Purchase Plan (the “Purchase Plan”) and the Company’s stockholders have approved of the Purchase Plan. The Purchase Plan was amended and restated on February 1, 2008 and amended and restated on November 7, 2012. A total of 100,000 shares of common stock were initially reserved for issuance under the Purchase Plan. The November 7, 2012 amendment and restatement of the Purchase Plan provided a reserve of 553,000 shares of common stock available for issuance under the Purchase Plan. |
|
The Compensation Committee of the Board of Directors administers this plan. The Purchase Plan is intended to qualify under Section 423 of the Internal Revenue Code. The Purchase Plan permits eligible employees to purchase common stock through payroll deductions, which may not exceed 15% of an employee’s cash compensation, at a purchase price equal to the lower of 85% of the fair market value of the Company’s common stock at the beginning of each offering period or at the end of each purchase period. Employees who work more than five months per year and more than twenty hours per week are eligible to participate in the Purchase Plan. Stockholders who own more than 5% of the Company’s outstanding common stock are excluded from participating in the Purchase Plan. Each eligible employee cannot purchase more than 5,000 shares per purchase date (10,000 shares per year) and, generally, cannot purchase more than $25,000 of stock per calendar year. Eligible employees may begin participating in the Purchase Plan at the start of an offering period. Each offering period lasts six months beginning on January 31 and July 31 of each calendar year with an additional one-time offering period beginning on or about November 1, 2012 and terminating on or about January 1, 2013. Employees may end their participation in the Purchase Plan at any time. Participation ends automatically upon termination of employment. The Board of Directors may amend or terminate the Purchase Plan at any time. If not terminated earlier, the Purchase Plan has a term of twenty years. If the Board of Directors increases the number of shares of common stock reserved for issuance under the Purchase Plan, other than any share increase resulting from the formula described in the previous paragraph, it must seek the approval of the Company’s stockholders. |
|
2001 Supplemental Plan |
|
We adopted the 2001 Supplemental Plan (the “Supplemental Plan”) on May 30, 2001; the Supplemental Plan did not require stockholder approval. A total of approximately 250,000 shares of common stock have been reserved for issuance under the Supplemental Plan. With limited restrictions, if shares awarded under the Supplemental Plan are forfeited, those shares will again become available for new awards under the Supplemental Plan. The Supplemental Plan permits the grant of non-statutory options and shares of restricted stock. Employees and consultants, who are not officers or members of the Board of Directors, are eligible to participate in the Supplemental Plan. Options are granted at an exercise price of not less than 85% of the fair market value per share on the date of grant. Options generally vest with respect to 25% of the shares one year after the options’ vesting commencement date and the remainder vest in equal monthly installments over the following 36 months. Options granted under the Supplemental Plan have a maximum term of ten years. |
|
The Compensation Committee of the Board of Directors administers the Supplemental Plan and has complete discretion to make all decisions relating to the interpretation and operation of the Supplemental Plan. The Compensation Committee has the discretion to determine which eligible persons are to receive an award, and to determine the type, number, vesting requirements and other features and conditions of each award. The exercise price of options may be paid with: cash, outstanding shares of common stock, the cashless exercise method through a designated broker, a pledge of shares to a broker or a promissory note. The purchase price for newly issued restricted shares may be paid with: cash, a promissory note or the rendering of past or future services. The Compensation Committee may reprice options and may modify, extend or assume outstanding options. The Compensation Committee may accept the cancellation of outstanding options in return for the grant of new options. The new option may have the same or a different number of shares and the same or a different exercise price. If a merger or other reorganization occurs, the agreement of merger or reorganization shall provide that outstanding options and other awards under the Supplemental Plan shall be assumed or substituted with comparable awards by the surviving corporation or its parent or subsidiary, shall be continued by the Company if it is the surviving corporation, shall have accelerated vesting and then expire early or shall be cancelled for a cash payment. If a change in control occurs, awards will become fully exercisable and fully vested if the awards do not remain outstanding, are not assumed by the surviving corporation or its parent or subsidiary and if the surviving corporation or its parent or subsidiary does not substitute its own awards that have substantially the same terms for the awards granted under the Supplemental Plan. If a change in control occurs and a plan participant is involuntarily terminated within 12 months following this change in control, then the vesting of awards held by the participant will accelerate, as if the participant provided another 12 months of service. A change in control includes: a merger or consolidation after which the then-current stockholders own less than 50% of the surviving corporation, a sale of all or substantially all of the assets, a proxy contest that results in replacement of more than one-half of the directors over a 24-month period or an acquisition of 50% or more of the outstanding stock by a person other than a person related to the Company, including a corporation owned by the stockholders. The Board of Directors may amend or terminate the Supplemental Plan at any time. The Supplemental Plan will continue in effect indefinitely unless the Board of Directors decides to terminate the plan earlier. |
|
In fiscal 2014, under the 2001 Long-Term Equity Incentive Plan, the Company provided issuance of stock appreciation rights to the Odessa consultants in Ukraine. To date, the Company has issued 11,350 shares under stock appreciation rights for the exercise price of $6.98. The shares will vest over four years starting from the grant date of January 21, 2014. The contractors will get 50 more shares at every anniversary of their employment. The Company reserves the right to modify this over time. The Company did not book any expense for the year ended as of March 31, 2014 as the financial impact was immaterial. |
|
The following table summarizes activity under the equity incentive plans for the indicated periods: |
|
| | | | | | Options and Restricted Stock Units Outstanding | | | | |
| | Shares | | | Number | | | Exercise | | | Weighted- | | | | |
Available | of | Price Per Share | Average | | | |
for Grant | Shares | | Exercise | | | |
| | | Price Per | | | |
| | | Share | | | |
| | (in thousands except for per share amounts) | | | | |
Balance at March 31, 2012 | | | 1,233 | | | | 476 | | | $3.70 | - | $42.40 | | | $ | 7.48 | | | | |
Options granted | | | — | | | | — | | | | | | | | $ | — | | | | |
Options cancelled | | | 53 | | | | (53 | ) | | | | | | | $ | 7.42 | | | | |
Restricted stock units granted | | | (707 | ) | | | 707 | | | | | | | | $ | — | | | | |
Restricted stock units released | | | — | | | | (86 | ) | | | | | | | $ | — | | | | |
Restricted stock units cancelled | | | 104 | | | | (142 | ) | | | | | | | $ | — | | | | |
Balance at March 31, 2013 | | | 673 | | | | 885 | | | $3.70 | - | $42.40 | | | $ | 7.76 | | | | |
Shares Added | | | 187 | | | | — | | | | | | | | $ | — | | | | |
Options granted | | | (316 | ) | | | 316 | | | | | | | | $ | 6.28 | | | | |
Options exercised | | | — | | | | (43 | ) | | | | | | | $ | 5.32 | | | | |
Options cancelled | | | 48 | | | | (48 | ) | | | | | | | $ | 11.14 | | | | |
Restricted stock units granted | | | (530 | ) | | | 530 | | | | | | | | $ | — | | | | |
Restricted stock units released | | | — | | | | (122 | ) | | | | | | | $ | — | | | | |
Restricted stock units cancelled | | | 493 | | | | (493 | ) | | | | | | | $ | — | | | | |
Balance at March 31, 2014 | | | 555 | | | | 1,025 | | | | | | | | $ | 6.4 | | | | |
Vested and expected to vest | | | | | | | 683 | | | $3.70 | - | $34.00 | | | $ | 6.44 | | | | |
|
Options outstanding and exercisable at March 31, 2014 were in the following exercise price ranges: |
|
| | | | Options Outstanding | | | Options Vested and Exercisable | |
Range of Exercise | Number | | | Weighted- | | | Number | | | | Weighted- | |
Prices Per Share | of Shares | | | Average | | | of Shares | | | | Average | |
| | | | | | | Remaining | | | | | | | Exercise Price | |
| | | | | | | Contractual | | | | | | | Per Share | |
| | | | | | | Life (Years) | | | | | | | | |
| | | (in thousands except for per share amounts) | | | | | | | | |
$3.70 | – | $5.72 | | 106 | | | 8.11 | | | 57 | | | $ | 5.22 | |
$6.28 | – | $6.28 | | 187 | | | 9.68 | | | — | | | $ | 0 | |
$6.30 | – | $6.83 | | 79 | | | 9.79 | | | 4 | | | $ | 6.83 | |
$7.20 | – | $31.30 | | 12 | | | 4.24 | | | 12 | | | $ | 12.08 | |
$34.00 | – | $34.00 | | 2 | | | 0.8 | | | 2 | | | $ | 34 | |
$3.70 | – | $34.00 | | 386 | | | 9.06 | | | 75 | | | $ | 7.01 | |
|
The weighted average remaining contractual term for exercisable options is 6.93 years. The intrinsic value is calculated as the difference between the market value as of March 31, 2014 and the exercise price of the shares. The market value of the Company’s common stock as of March 31, 2014 was $6.66 as reported by the NASDAQ Capital Market. There was $219,000 of aggregate intrinsic value of stock options outstanding at March 31, 2014 and there was $509,000 of aggregate intrinsic value of stock options outstanding at March 31, 2013. |
|
The following table summarizes values for options granted during the respective years: |
|
| | Fiscal Years Ended | | | | | | | | | | | | | |
March 31, | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | | | | | |
| | (in thousands) | | | | | | | | | | | | | |
Weighted average grant date fair value | | $ | 672 | | | $ | — | | | | | | | | | | | | | |
Intrinsic value of options exercised | | $ | 48 | | | $ | 83 | | | | | | | | | | | | | |
Fair value of shares vesting during the year | | $ | 346 | | | $ | 821 | | | | | | | | | | | | | |
|
The following table summarizes activity for awards for the respective years: |
|
| | Shares | | | Grant Date | | | Aggregate | | | | | | | | | |
Fair Value | Intrinsic | | | | | | | | |
Per Share | Value | | | | | | | | |
(in thousands except for per share amounts) | | | | | | | | | | |
Balance at March 31, 2012 | | | 246 | | | $ | 5.01 | | | $ | 939 | | | | | | | | | |
Awards granted | | | 707 | | | $ | 5.51 | | | $ | — | | | | | | | | | |
Awards vested/released | | | (86 | ) | | $ | 4.96 | | | $ | — | | | | | | | | | |
Awards cancelled/forfeited | | | (142 | ) | | $ | 4.9 | | | $ | — | | | | | | | | | |
Balance at March 31, 2013 | | | 725 | | | $ | 5.53 | | | $ | 6,553 | | | | | | | | | |
Awards granted | | | 530 | | | $ | 6.91 | | | $ | — | | | | | | | | | |
Awards vested/released | | | (122 | ) | | $ | 6.74 | | | $ | — | | | | | | | | | |
Awards cancelled/forfeited | | | (494 | ) | | $ | 5.72 | | | $ | — | | | | | | | | | |
Balance at March 31, 2014 | | | 639 | | | $ | 6.66 | | | $ | 4,255 | | | | | | | | | |
|
The effect of recording stock-based compensation expense for each of the periods presented was as follows: |
|
| | Fiscal Years Ended | | | | | | | | | | | | | |
March 31, | | | | | | | | | | | | |
(in thousands) | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | | | | | |
Cost of revenues | | $ | 250 | | | $ | 134 | | | | | | | | | | | | | |
Research and development | | | 167 | | | | 171 | | | | | | | | | | | | | |
Sales and marketing | | | 345 | | | | 284 | | | | | | | | | | | | | |
General and administrative | | | 385 | | | | 540 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Impact on net loss | | $ | 1,149 | | | $ | 1,129 | | | | | | | | | | | | | |
|
There were no rights granted under the employee stock purchase plan during fiscal 2013. During fiscal 2014, the fair value of rights granted under the employee stock purchase plan were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: |
|
| | Fiscal Year Ended | | | | | | | | | | | | | | | | | |
31-Mar-14 | | | | | | | | | | | | | | | | |
Risk-free interest rate | | | 0.09 | % | | | | | | | | | | | | | | | | |
Dividend yield | | | 0 | % | | | | | | | | | | | | | | | | |
Expected volatility | | | 58.28 | % | | | | | | | | | | | | | | | | |
Expected term in years | | | 0.5 | | | | | | | | | | | | | | | | | |
Weighted average fair value at grant date | | $ | 2.81 | | | | | | | | | | | | | | | | | |
|
There were no stock options granted during fiscal 2013. During fiscal 2014, the fair value of options granted under employee stock option plans were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: |
|
| | Fiscal Year Ended | | | | | | | | | | | | | | | | | |
31-Mar-14 | | | | | | | | | | | | | | | | |
Risk-free interest rate | | | 0.88 | % | | | | | | | | | | | | | | | | |
Dividend yield | | | 0 | % | | | | | | | | | | | | | | | | |
Expected volatility | | | 58.43 | % | | | | | | | | | | | | | | | | |
Expected term in years | | | 3.21 | | | | | | | | | | | | | | | | | |
Weighted average fair value at grant date | | $ | 2.52 | | | | | | | | | | | | | | | | | |
|
Equity Compensation Plan Information |
|
The table below demonstrates the number of options and awards issued and the number of options and awards available for issuance, respectively, under the Company’s current equity compensation plans as of March 31, 2014: |
|
| | Number of | | | Weighted- | | | Number of | | | | | | | | | |
Securities | Average | Securities | | | | | | | | |
to be | Exercise | Remaining | | | | | | | | |
Issued upon | Price Per | Available | | | | | | | | |
Exercise | Share of | for Future | | | | | | | | |
of Outstanding | Outstanding | Issuance | | | | | | | | |
Options, | Options | Under Equity | | | | | | | | |
and Rights | and Rights | Compensation | | | | | | | | |
| | Plans | | | | | | | | |
| | (in thousands, except for per share amount) | | | | | | | | | |
Plans Approved by Stockholders | | | | | | | | | | | | | | | | | | | | |
1996 Stock Plan | | | 1 | | | $ | 31.3 | | | | 147 | | | | | | | | | |
1999 Equity Incentive Plan | | | 838 | | | $ | 6.44 | | | | 224 | | | | | | | | | |
Plans Not Required to be Approved by Stockholders | | | | | | | | | | | | | | | | | | | | |
2001 Supplemental Plan | | | -- | | | $ | -- | | | | 185 | | | | | | | | | |
Grant to CEO Blaine Mathieu (1) | | | 187 | | | $ | 6.28 | | | | -- | | | | | | | | | |
Total | | | 1,025 | | | $ | 6.4 | | | | 556 | | | | | | | | | |
|
All vested shares granted under all Plans are exercisable; however, shares exercised but not vested under the 1996 Stock Plan are subject to repurchase. |
|
(1) Represents an option to purchase 187 thousand shares of our Common Stock granted to Mr. Mathieu outside of the 1996 and 1999 Stock Plan. The grant of this option did not require approval by our stockholders due to its qualification under the "inducement grant exception" provided by Nasdaq Listing Rule 5635(c)(4). |