Annual report pursuant to Section 13 and 15(d)

COMMON STOCK

v3.21.1
COMMON STOCK
 12 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
COMMON STOCK COMMON STOCK
Secondary Public Offering
On February 8, 2021, the Company closed a secondary public offering of 15,109,489 shares of its common stock for gross proceeds of $103.5 million. The Company received net proceeds of $96.8 million after deducting underwriters' discounts and other offering related expenses.
Amended and Restated 2012 Long-Term Incentive Plan
The Company has a stockholder-approved 2012 Long-Term Incentive Plan (the “Plan”) which has 5.2 million shares authorized for issuance of new shares at March 31, 2021. There were 4.4 million performance shares and restricted shares outstanding, and 0.8 million shares available for future issuance under the Plan as of March 31, 2021.
Stock options under the Plan are granted at prices determined by the Board of Directors, but at not less than the fair market value of the Company's common stock on the date of grant. The majority of performance share units, restricted stock units and stock options granted to employees vest over three to four years. Stock options, performance shares and restricted stock grants to non-employee directors typically vest over one year. The term of
each stock option under the Plan will not exceed seven years. Stock options, performance share units and restricted stock units granted under the Plan are subject to forfeiture if employment terminates. The Company accounts for all forfeitures of stock-based awards when they occur.

2021 Inducement Plan

The Company's 2021 Inducement Plan became effective on February 1, 2021 and provides for issuance of inducement equity awards to individuals who were not previously an employee or non-employee director of the Company as an inducement material to such individual's entering into employment with the Company. The number of shares of common stock reserved for issuance under the 2021 Inducement Plan was 0.8 million. The term of each stock option and restricted stock unit under the plan will not exceed seven years, and each award generally vests between two and four years. The Company accounts for all forfeitures of stock-based awards when they occur.
The Company have reserved shares of common stock for future issuance under its 2021 Inducement Plan as follows (in thousands):
March 31, 2021
Shares available for issuance at beginning of period — 
Shares authorized during the period 770 
Shares issued during the period (520)
   Total shares available for future issuance at end of period 250 

Employee Stock Purchase Plan
The Company's Employee Stock Purchase Plan (the "ESPP") has 9.7 million shares authorized at March 31, 2021. The plan enables eligible employees to purchase shares of its common stock at a discount. Purchases will be accomplished through participation in discrete offering periods. On each purchase date, eligible employees will purchase the Company's common stock at a price per share equal to 85% of the lesser of (i) the fair market value of the Company's common stock on the first trading day of the offering period, and (ii) the fair market value of the Company's common stock on the purchase date.
The Company has reserved shares of common stock for future issuance under its ESPP as follows (in thousands):
March 31,
2021 2020
Shares available for issuance at beginning of period 1,397  497 
Additional shares authorized during the period —  900 
Shares issued during the period (320) — 
   Total shares available for future issuance at end of period 1,077  1,397 

The Company uses the Black-Scholes-Merton option-pricing model (“Black-Scholes”) to determine the fair value for stock options, shares forecasted to be issued pursuant to its ESPP, and warrants. This requires the use of assumptions about expected life, stock price, volatility, risk-free interest rates and expected dividends.

Expected Life—The expected term was based on historical experience with similar awards, giving consideration to the contractual terms, exercise patterns and post-vesting forfeitures.

Volatility—The expected stock price volatility for the Company's common stock was based on the historical volatility of its common stock over the most recent period corresponding with the estimated expected life of the award.

Risk-Free Rate—The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group.
Dividend Yield—The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used.

The weighted-average grant date fair value and the assumptions used in calculating fair values of shares forecasted to be issued pursuant to the Company's ESPP are as follows:
Year Ended March 31,
2021 2020 2019
Expected life 0.5 years 0.5 years n/a
Volatility
55% - 133%
 49.81% n/a
Risk-free interest rate
0.05% - 0.11%
 0.41% n/a
Dividend yield —% —% n/a
Fair value of common stock
$4.99 - $8.05
 $4.78 n/a

Performance Stock Units
The Company granted 0.9 million, 1.5 million and 0.7 million of performance share units with market conditions (“Market PSUs”) in fiscal 2021, 2020, and 2019, respectively. Market PSUs vest one to three years from the issuance date and become eligible for vesting based on the Company achieving certain stock price targets and are contingent upon continued service of the holder of the award during the vesting period. The estimated fair value of these Market PSUs is determined at the issuance date using a Monte Carlo simulation model.

Assumptions used in the Monte Carlo model to calculate fair values of market PSU’s during each fiscal period are as follows:
Weighted-Average 2021 2020 2019
Discount period (years) 2.54 3.00 1.95
Risk-free interest rate 0.31% 1.45% 2.63%
Stock price volatility 82.00% 72.00% 69.35%
Grant date fair value $3.77 $5.92 $1.70

The Company granted 0.5 million, 0.3 million and 0.0 million of performance share units with financial performance conditions (“Performance PSUs”) in the fiscal years ended March 31, 2021, 2020 and 2019, respectively. Performance PSUs become eligible for vesting based on the Company achieving certain financial performance targets through the end of the fiscal year when the performance PSUs were granted, and are contingent upon continued service of the holder of the award during the vesting period. Performance PSUs are valued at the market closing share price on the date of grant and compensation expense for Performance PSUs is recognized when it is probable that the performance conditions will be achieved. Compensation expense recognized related to Performance PSUs is reversed if the Company determines that it is no longer probable that the performance conditions will be achieved.

The following table summarizes activity for Market PSUs and Performance PSUs for the year ended March 31, 2021 (shares in thousands):
Shares Weighted-Average
Grant Date Fair Value per Share
Outstanding as of March 31, 2020 1,944  $ 4.09 
Granted 1,346  $ 3.67 
Vested (745) $ 3.94 
Forfeited or cancelled (190) $ 4.66 
Outstanding as of March 31, 2021 2,355  $ 3.85 
As of March 31, 2021, there was $4.1 million and $1.8 million of unrecognized stock-based compensation related to Market PSUs and Performance PSUs, respectively, which is expected to be recognized over a weighted-average period of one year. The total fair value of shares vested during fiscal years ended March 31, 2021, 2020, and 2019 was $2.9 million, $0.6 million, and $0.1 million, respectively.

Restricted Stock Units

The Company granted 2.4 million, 0.6 million, and 1.0 million of service-based restricted stock units (“RSUs”) in the fiscal years ended March 31, 2021, 2020 and 2019, respectively, which generally vest ratably over a three-year service period. RSUs are valued at the market closing share price on the date of grant and compensation expense for RSUs is recognized ratably over the applicable vesting period.

The following table summarizes activity for restricted stock units for the year ended March 31, 2021 (shares in thousands):
Shares Weighted-Average
Grant Date Fair Value per Share
Outstanding as of March 31, 2020 986  $ 3.42 
Granted 2,440  $ 4.41 
Vested (518) $ 3.99 
Forfeited or cancelled (198) $ 3.78 
Outstanding as of March 31, 2021 2,710  $ 4.17 

As of March 31, 2021, there was $11.7 million of total unrecognized stock-based compensation related to RSUs, which is expected to be recognized over a weighted-average period of two years. The total fair value of RSUs vested during fiscal years ended March 31, 2021, 2020, and 2019 was $2.1 million, $4.0 million, and $5.1 million, respectively.
Compensation Expense
The following table details the Company's stock-based compensation expense, net of forfeitures (in thousands):
Year Ended March 31,
2021 2020 2019
Cost of revenue $ 672  $ 452  $ 334 
Research and development 2,881  984  440 
Sales and marketing 1,757  1,165  179 
General and administrative 4,314  4,147  2,456 
Total share-based compensation $ 9,624  $ 6,748  $ 3,409 
Year Ended March 31,
2021 2020 2019
Restricted stock units $ 4,041  $ 3,610  $ 3,178 
Performance share units 4,904  3,103  231 
Employee stock purchase plan 679  35  — 
Total stock-based compensation $ 9,624  $ 6,748  $ 3,409