SUBSEQUENT EVENTS

9 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Delaware Section 205 Petition

As previously disclosed, on February 7, 2023, the Company filed a petition in the Delaware Court of Chancery (the “Court of Chancery”) pursuant to Section 205 of the Delaware General Corporation Law (“DGCL”), seeking validation of an amendment to its certificate of incorporation increasing the authorized common stock of the Company (as further described below) and the shares issued pursuant thereto.

At a special meeting of the stockholders of the Company held on May 28, 2021, a majority of the then-outstanding shares of the Company’s Class A common stock and Class B common stock, voting as a single class, voted to approve the Company’s Second Amended and Restated Certificate of Incorporation, which, among other things, increased the authorized shares of the Company’s common stock from 150,000,000 to 500,000,000 shares, eliminated its Class B common stock and renamed the Class A common stock as “common stock” (the “Charter Amendment”).

A recent decision of the Court of Chancery has created uncertainty regarding the validity of the Charter Amendment and whether a separate vote of the majority of the then-outstanding shares of the Company’s Class A common stock would have been required under Section 242(b)(2) of the DGCL. While the Company believes that a separate vote of the Class A common stock was not required to approve the Charter Amendment, in light of the Court of Chancery’s recent decision, the Company filed a petition in the Court of Chancery pursuant to Section 205 of the DGCL, which permits the Court of Chancery, in its discretion, to validate potentially defective corporate acts and stock after considering a variety of factors. As previously disclosed, the Court of Chancery has issued an order scheduling a hearing on the merits of the petition on February 20, 2023.

Cost Reduction Initiative

On February 9, 2023, the Company announced a cost reduction initiative involving approximately 12%, or 126 employees, and curtailing the use of certain third-party vendors, consultants, and other contractors. The Company expects this initiative to improve its efficiency and further accelerate its path to sustainable profitability, as well as to better align its cost structure with the current macroeconomic environment and the Company’s strategic priorities.

The Company expects to record a charge of approximately $2.0 million in the fourth quarter of fiscal 2023 consisting of cash severance payments. These costs will be included in the Company’s GAAP results, but will be excluded from the Company’s non-GAAP results. The Company expects that this initiative will be substantially completed by the end of the fiscal fourth quarter 2023, and the related cash payments disbursed by the end of fiscal first quarter 2024.