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7. STOCK- BASED COMPENSATION
 9 Months Ended
Dec. 31, 2015
Stock-Based Compensation  
NOTE 7-STOCK- BASED COMPENSATION

NOTE 7—STOCK-BASED COMPENSATION

 

As of December 31, 2015, 6,719,123 shares of common stock were available for grant under the Company’s 2007 Equity Incentive Plan.

 

The following table summarizes the Company’s stock option activities for the nine months ended December 31, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

Number of Shares

 

Average

 

Weighted

 

 

 

 

 

Shares

 

Underlying

 

Remaining

 

Average

 

 

 

 

 

Available for

 

Options

 

Contractual

 

Exercise

 

Intrinsic

 

 

Grant

 

Outstanding

 

Life (Years)

 

Price

 

Value

Balance at March 31, 2015

 
6,213,943

 
6,774,151

 

 

 

$
5.16

 

 

 

Options reserved

 
1,156,419

 

 —

 

 

 

 

 —

 

 

 

Granted

 
(661,103)

 
661,103

 

 

 

 
4.90

 

 

 

Exercised

 

 —

 
(76,745)

 

 

 

 
4.19

 

$
46,977

Forfeited/expired

 
9,864

 
(19,864)

 

 

 

 
4.64

 

 

 

Balance at December 31, 2015

 
6,719,123

 
7,338,645

 

 

 

$
5.15

 

 

 

Options vested and exercisable

 

 

 
4,976,550

 
3.82

 

$
5.05

 

$
484,583

Options vested and expected to vest

 

 

 
7,290,669

 
5.22

 

$
5.14

 

$
484,583

 

The weighted average fair value per underlying share of options granted during the three months ended December 31, 2015 and 2014 was $1.48 and $1.79, respectively and for the nine months ended December 31, 2015 and 2014 was $1.70 and $2.10, respectively.

 

Options outstanding by exercise price at December 31, 2015 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

Options Outstanding

 

Options Exercisable

 

 

 

 

 

Shares

 

Weighted

 

Weighted Average

 

 

 

Weighted

 

 

 

 

 

Underlying

 

Average

 

Remaining

 

Number

 

Average

 

 

 

 

 

Options

 

Exercise

 

Contractual

 

Vested and

 

Exercise

Exercise Price

 

Outstanding

 

Price

 

Life (Years)

 

Exercisable

 

Price

$

2.43

-

3.43

 
892,584

 

$
3.18

 
3.10

 
892,584

 

$
3.18

$

3.75

-

4.00

 
812,779

 

$
3.96

 
3.21

 
812,779

 

$
3.96

$

4.17

-

4.68

 
747,515

 

$
4.30

 
5.94

 
357,926

 

$
4.30

$

4.81

-

4.98

 
997,676

 

$
4.92

 
7.88

 
389,871

 

$
4.88

$

5.13

-

5.34

 
625,513

 

$
5.23

 
8.74

 
49,980

 

$
5.19

$

5.50

 

 

 
783,433

 

$
5.50

 
0.88

 
783,433

 

$
5.50

$

5.59

-

6.00

 
901,930

 

$
5.77

 
5.53

 
532,248

 

$
5.81

$

6.28

-

6.63

 
812,219

 

$
6.48

 
6.36

 
645,440

 

$
6.47

$

6.82

-

7.00

 
651,376

 

$
6.90

 
6.06

 
398,669

 

$
6.92

$

9.20

 

 

 
113,620

 

$
9.20

 
5.07

 
113,620

 

$
9.20

 

 

 

 

 
7,338,645

 

$
5.15

 
5.25

 
4,976,550

 

$
5.05

 

The following table summarizes stock-based compensation expense by line item in the Condensed Consolidated Statements of Operations, all relating to employee stock plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Nine Months Ended December 31,

 

 

2015

 

2014

 

2015

 

2014

 

 

(In thousands)

Cost of revenues

 

$
85

 

$
93

 

$
242

 

$
296

Research and development

 

 
208

 

 
220

 

 
649

 

 
709

Selling, general and administrative

 

 
121

 

 
77

 

 
496

 

 
528

Total

 

$
414

 

$
390

 

$
1,387

 

$
1,533

 

As stock-based compensation expense recognized in the Condensed Consolidated Statement of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures in accordance with authoritative guidance.  The Company estimates forfeitures at the time of grant and revises the original estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

No tax benefit related to stock-based compensation was recognized in the three months or nine months ended December 31, 2015 or December 31, 2014 due to a full valuation allowance. There were no windfall tax benefits realized from exercised stock options in any of these periods.   Compensation cost capitalized within inventory at December 31, 2015 was immaterial. As of December 31, 2015, the Company’s total unrecognized compensation cost was $2.9 million, which will be recognized over a weighted average period of 2.01 years.  The Company calculated the fair value of stock-based awards in the periods presented using the Black-Scholes option pricing model and the following weighted average assumptions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Nine Months Ended December 31,

 

 

2015

 

2014

 

2015

 

2014

 

 

(In thousands)

 

(In thousands)

Stock Option Plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-free interest rate

 

 

 
1.56

%

 

 

 
1.60

%

 
1.52

-
1.57

%

 
1.60

-
1.70

%

Expected life (in years)

 

 

 
5.00

 

 

 

 
5.00

 

 
5.00

 

 

 

 

 

 
5.00

 

Volatility

 

 

 
36.3

%

 

 

 
41.3

%

 
36.3

-
38.0

%

 
41.3

-
44.8

%

Dividend yield

 

 

 

 —

%

 

 

 

 —

%

 

 —

 

 —

%

 

 

 

 —

%

Employee Stock Purchase Plan:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-free interest rate

 

 

 
0.15

%

 

 

 
0.05

%

 
0.09

-
0.15

%

 

 

 
0.05

%

Expected life (in years)

 

 

 
0.50

 

 

 

 
0.50

 

 
0.50

 

 

 

 

 

 
0.50

 

Volatility

 

 

 
27.9

%

 

 

 
38.0

%

 
26.3

-
27.9

%

 
30.8

-
38.0

%

Dividend yield

 

 

 

 —

%

 

 

 

 —

%

 

 

 

 —

%

 

 

 

 —

%