Annual report [Section 13 and 15(d), not S-K Item 405]

FAIR VALUE OF FINANCIAL INSTRUMENTS

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FAIR VALUE OF FINANCIAL INSTRUMENTS
 12 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows the guidance in ASC 820, Fair Value Measurement, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when an impairment is recognized. These assets include property and equipment and amortizable intangible assets. The Company did not record impairments to any non-financial assets in the fiscal years ended March 31, 2026 and 2025.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:    Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:    Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:    Unobservable inputs based on management’s assessment of the assumptions that market participants would use in pricing the asset or liability.
Information related to the fair value of the Company's warrant liabilities and Convertible Note, which were determined utilizing Level 2 inputs to determine such fair value, are included in Note 4: Debt.

The following table represents the carrying value and total estimated fair value of the Company's Term Loan which was determined utilizing Level 2 inputs to determine fair value.
March 31,
2026 2025
  Carrying Value Fair Value Carrying Value Fair Value
Term Loan $ 55,906  $ 51,339  $ 102,507  $ 91,576 

The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other current liabilities approximate their respective fair values because of the short-term nature of these accounts.
Warrants
On September 23, 2025, the Company established the initial fair value for the Forbearance Warrant issued to Dialectic in connection with the Fifteenth Amendment. The fair value was subsequently remeasured as of March 31, 2026, and the resulting change in fair value was recognized in the consolidated statement of operations and comprehensive loss under “Change in fair value of warrant liability.”

The Forbearance Warrant was valued using a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model. This model incorporates various assumptions, including the Company’s common stock price, expected volatility, risk-free interest rate, and the remaining contractual term of the warrant.

Because the valuation relies on significant unobservable inputs, the fair value of the Forbearance Warrant is classified as Level 3 within the fair value hierarchy.

The following table summarizes the key assumptions used in estimating the fair value of the Forbearance Warrant at issuance and at March 31, 2026:
March 31, 2026 September 23, 2025
Discount period (years) 6.48 years 7.0 years
Risk-free interest rate
3.65% - 4.02%
3.52% - 3.83%
Stock price volatility 100.00% 98.00%
Stock price at valuation date $4.75 $10.69
Probability1
15% - 15% - 70%
35% - 15% - 50%
Fair value (in thousands) $14,105 $25,420

(1) Scenario probability as of issuance was based on timing expectations of management that a liquidation event occurring was estimated at 35%; a fundamental transaction occurring was estimated at 15%; and none of the previous events were estimated at 50% and were revised at March 31, 2026 to a 15% of a liquidation event occurring; a 15% of a fundamental transaction occurring; and none of the previous events were estimated at 70%.

The table below sets forth a summary of changes in the fair value of the Company’s Forbearance warrant liabilities for the period ended March 31, 2026:

Balance at March 31, 2025
 $ — 
Issuance of warrants 25,420 
Change in fair value of warrant liabilities (11,315)
Balance at March 31, 2026
 $ 14,105 
Convertible Note
The Company measures the Convertible Note at fair value using significant inputs that are not observable in active markets and therefore classifies the Convertible Note as a Level 3 measurement within the fair value hierarchy.
Changes in the fair value of the Convertible Note resulting from updated assumptions and estimates are recognized as a fair value adjustments in the consolidated statements of operations and comprehensive loss.

The Company estimated the fair value of the Convertible Note using a Monte Carlo simulation method, as the Convertible Note includes features for which the settlement outcome depends on the path of the Company’s common stock price and other variables over time. In addition, the Company assigned probabilities to various possible settlement scenarios.
The significant assumptions used by the Company to estimate the fair value of the Convertible Note as of December 18, 2025 and March 31, 2026 are summarized below:
March 31, 2026 December 18, 2025
Term (years) 2.7 years 3.0 years
Volatility 85.0% 120.0%
Dividend yield 0.00% 0.00%
Risk-free interest rate 3.77% 3.47%
Probability for maturity 85% 65%
Probability for liquidation event 1
15% 35%
1 See probability discussed under Warrants. Scenario probability was consistently applied.

The table below sets forth a summary of changes in the fair value of the Convertible Note for the period ended March 31, 2026:

Balance at March 31, 2025
 $ — 
Issuance of Convertible Note
 77,471 
Change in fair value of Convertible Note recognized in Net Loss 4,119 
Change in fair value of Convertible Note recognized in Other Comprehensive Loss 8,444 
Balance at March 31, 2026
 $ 90,034