Note 9 - Share-based Compensation

9 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

9. SHARE-BASED COMPENSATION

The Company has share-based compensation plans, which are more fully described in Note 9 Share-Based Compensation, to the Consolidated Financial Statements included in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2024 as filed with the SEC on June 26, 2024.

As of December 31, 2024, the Company had two equity-based compensation plans: the 2016 Equity Incentive Plan (the “2016 Plan”) and the 2024 Independent Director Stock Option and Restricted Stock Grant Plan (the “2024 Directors Plan”). These plans allow the Company to award stock options and shares of restricted common stock to eligible employees, certain outside consultants and independent directors. The Company has also issued stock options, which remain outstanding as of December 31, 2024, under the 2014 Independent Director Stock Option and Restricted Stock Grant Plan and Amendment (the “2014 Directors Plan”), an equity-based compensation plan which expired in accordance with its terms on August 22, 2024. This plan allowed the Company to award stock options and shares of restricted common stock to independent directors. 

The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans:

	As of December 31, 2024
	Authorized		Available		Outstanding
2016 Plan		1,300,000		631,832		399,211
2024 Directors Plan		800,000		604,126		195,874
2014 Directors Plan		—		—		12,000
Total		2,100,000		1,235,958		607,085

Stock Options

All stock option grants made under the equity-based compensation plans were issued at exercise prices no less than the Company’s closing stock price on the date of grant. Options under the 2016 Plan, 2024 Directors Plan and 2014 Directors Plan were determined by the Board of Directors or the Compensation Committee of the Board of Directors in accordance with the provisions of the respective plans.  The terms of each option grant include vesting, exercise, and other conditions set forth in a Stock Option Agreement evidencing each grant. No option can have a life in excess of ten (10) years. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The model requires various assumptions, including a risk-free interest rate, the expected term of the options, the expected stock price volatility over the expected term of the options, and the expected dividend yield. Compensation expense for employee stock options is recognized ratably over the vesting term. Compensation expense recognized for options issued under all Plans was $7,000 and $24,000 for the three months ended December 31, 2024 and 2023, respectively. Compensation expense recognized for options issued under all Plans was $47,000 and $73,000 for the nine months ended December 31, 2024 and 2023, respectively.

A summary of option activity under the Company’s stock plans for the nine months ended December 31, 2024 is presented below: 

Option Activity	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at March 31, 2024		297,000		$	2.47		7.1	$	—
Granted		50,000			0.78
Expired		(25,000	)		2.57
Outstanding at December 31, 2024		322,000		$	2.20		6.9	$	—
Exercisable at December 31, 2024		222,000		$	2.64		6.0	$	—

The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $0.36 and $0.29 at December 31, 2024 and March 31, 2024, respectively.

A summary of the Company’s non-vested options for the nine months ended December 31, 2024 is presented below:

Nonvested Options	Shares			Weighted Average Grant-Date Fair Value
Nonvested at March 31, 2024		125,000		$	1.16
Granted		50,000			0.15
Vested		(75,000	)		1.28
Nonvested at December 31, 2024		100,000		$	0.56

There were no stock options granted in the three months ended December 31, 2024.  The weighted average grant-date fair value of stock options granted during the nine months ended December 31, 2024 was $8,000. As of December 31, 2024, total unrecognized stock-based compensation expense related to all unvested stock options was $42,000, which is expected to be expensed over a weighted average period of 2.0 years.

Restricted Stock 

Grants of fully vested restricted stock issued to Non-Employee Directors during the nine months ended December 31, 2024 and 2023 were 116,049 and 159,493, respectively. Compensation expense recognized for these fully vested restricted stock grants under the 2024 Directors Plan was $94,000 and $126,000 for the nine months ended December 31, 2024 and 2023, respectively.

To reduce the Company’s ongoing cash expenses, the Nominating and Corporate Governance Committee of the Board of Directors adopted a resolution allowing each director to elect to receive his quarterly director fees in the form of restricted stock in lieu of cash. One Board member elected to receive shares of restricted stock in lieu of cash for prior and current year’s quarterly board fees and on September 10, 2024, a total of 66,667 shares of fully vested restricted stock were issued. One Board member elected to receive shares of restricted stock in lieu of cash for the second quarter of fiscal 2025 and on October 1, 2024, 13,158 shares of fully vested restricted stock were issued. For the three and nine months ended December 31, 2024, compensation expense of $10,000 and $20,000, respectively, was recognized for the current year quarterly board fees. Compensation expense related to the prior year’s quarterly board fees were recognized in fiscal year ended 2024 in the amount of $40,000.

Two Board members elected to receive shares of restricted stock in lieu of cash for the third fiscal quarter of 2023 and on April 3, 2023, 17,672 shares of fully vested restricted stock were issued. For the three and nine months ended December 31, 2023, there was no compensation expense related to the issuance of this stock, as it was earned and recognized in the fiscal year 2023 in the amount of $15,500. One Board member elected to receive shares of restricted stock in lieu of cash for the second fiscal quarter of 2024 and on October 13, 2023, 12,821 shares of fully vested restricted stock were issued. For both the three and nine months ended December 31, 2023, $10,000 of compensation expense was recognized for the quarterly board fees.

Restricted Stock Units (“RSUs”) 

RSUs are service-based awards granted to eligible employees under the 2016 Plan. Compensation expense recognized for RSUs issued under the 2016 Plan was $15,000 and $20,000 for the three months ended December 31, 2024 and 2023, respectively. Compensation expense recognized for RSUs issued under the 2016 Plan was $66,000 for both the nine months ended December 31, 2024 and 2023.

The following table summarizes information related to awarded RSUs:

Nonvested Restricted Stock Units	Shares			Weighted Average Grant Price
Nonvested restricted stock units at March 31, 2024		130,820		$	1.23
Vested		(20,456	)		2.93
Forfeited		(21,153	)		0.89
Nonvested restricted stock units at December 31, 2024		89,211		$	0.92

As of December 31, 2024, total unrecognized stock-based compensation expense related to unvested restricted stock units was $41,000, which is expected to be expensed over a weighted average period of 0.2 years.