Changes in Shareholders’ Equity

9 Months Ended

Dec. 31, 2024

Equity [Abstract]

Changes in Shareholders’ Equity

Changes in Shareholders’ Equity:

Changes in Shareholders’ Equity for the three and nine months ended December 31, 2024 is summarized below (in thousands):

	Common Stock		Additional Paid-In Capital		Retained Earnings
Beginning balance at March 31, 2024:	$	21	$	25,146	$	71,555
Stock based compensation (reversal)	—		(8,204)		—
Dividends forfeited	—		—		1,250
Net income	—		—		3,754
Ending balance at June 30, 2024:	$	21	$	16,942	$	76,559
Stock based compensation expense	—		573		—
Dividends forfeited	—		—		4
Net income	—		—		2,326
Ending balance at September 30, 2024:	$	21	$	17,515	$	78,889
Stock based compensation expense	—		452		—
Dividends forfeited	—		—		5
Net loss	—		—		(707)
Ending balance at December 31, 2024:	$	21	$	17,967	$	78,187

Changes in Shareholders’ Equity for the three and nine months ended December 31, 2023 is summarized below (in thousands):

	Common Stock		Additional Paid-In Capital		Retained Earnings
Beginning balance at March 31, 2023:	$	21	$	18,277	$	91,659
Stock based compensation expense	—		1,760		—
Dividends declared	—		—		(6,346)
Net loss	—		—		(1,136)
Ending balance at June 30, 2023:	$	21	$	20,037	$	84,177
Stock based compensation expense	—		1,728		—
Dividends declared	—		—		(6,308)
Net income	—		—		715
Ending balance at September 30, 2023:	$	21	$	21,765	$	78,584
Stock based compensation expense	—		1,708		—
Net loss	—		—		(2,027)
Ending balance at December 31, 2023:	$	21	$	23,473	$	76,557

There were no shares of common stock that were purchased or retired in the nine months ended December 31, 2024 or 2023.

On December 2, 2024, the Board of Directors (the “Board”) of the Company adopted a rights agreement and declared a dividend of one right (a “Right”) for each outstanding share of Company common stock, to shareholders of record at the close of business on December 16, 2024 (the “Record Date”). The description and terms of the Rights are set forth in a rights agreement, dated as of December 3, 2024 (the “Rights Agreement”), between the Company and Continental Stock Transfer & Trust Company, a federally chartered trust company, as rights agent.

The Board adopted the Rights Agreement to protect the investment of shareholders during a period in which it believes shares of the Company do not reflect the inherent value of the business or its long-term growth potential, and during which there have been recent significant accumulations of common stock by certain shareholders. The Rights Agreement is intended to enable shareholders to realize the long-term value of their investment in the Company by reducing the likelihood that any entity, person, or group is able to gain a control or control-like position in the Company through open market accumulation without paying all shareholders an appropriate control premium or providing the Board sufficient opportunity to make informed judgments and take actions that are in the best interests of all shareholders.

In general terms, the Rights Agreement imposes significant dilution upon any person or group (other than the Company and certain other excluded persons and exempt persons), that is or becomes the beneficial owner of 12.5% or more of the common stock without the prior approval of the Board following the first public announcement by the Company of the adoption of the Rights Agreement. The term “beneficial ownership” is defined in the Rights Agreement and includes, among other things, certain derivative arrangements.

In general, each Right entitles its registered holder, subject to the terms of the Rights Agreement, to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share (“Preferred Stock”), of the Company at an exercise price of $27.00 per Right, subject to adjustment under certain circumstances (the “Purchase Price”). The Rights will become exercisable if (among other things) any person or group acquires 12.5% or more of the outstanding common stock, including through derivatives agreements, without the approval of the Board (an “Acquiring Person”). If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person or any associate or affiliate thereof may, upon exercise of a Right, purchase for the Purchase Price shares of Common Stock with a market value of two times the Purchase Price, based on the market price of the Common Stock prior to such acquisition. If the Company is acquired in a merger or similar transaction after an Acquiring Person becomes such, all holders of Rights except the Acquiring Person or any associate or affiliate thereof may, upon exercise of a Right, purchase for the Purchase Price shares of the acquiring company with a market value of two times the Purchase Price,

based on the market price of the acquiring company’s stock prior to such transaction. Any Rights held by an Acquiring Person will be void and may not be exercised.

The Rights will expire on the earliest to occur of (a) the close of business on December 2, 2025, (b) the time at which the Rights are redeemed by the Company (as provided in the Rights Agreement), or (c) the time at which the Rights are exchanged by the Company (as provided in the Rights Agreement). There was no impact to the Company’s current period financial statements from adopting this Rights Agreement.

In connection with the adoption of the Rights Agreement, the Board adopted Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company (the “Articles of Amendment”), which designates the rights, preferences, and privileges of 100,000 shares of a new series of the Company’s preferred stock, par value $0.001 per share, designated as Series A Junior Participating Preferred Stock. The Company filed the Articles of Amendment with the Secretary of State of the State of Florida on December 3, 2024.