Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Share-based Compensation and Employee Benefits Plans

v3.20.4
Note 11 - Share-based Compensation and Employee Benefits Plans
9 Months Ended
Dec. 26, 2020
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
(
1
1
)     
Share-based Compensation and Employee Benefits Plans
 
On
September 17, 2020,
the Company amended its
2018
Equity Incentive Plan to increase the number of shares issuable under the plan by
250,000
shares to
416,667
shares of common stock upon the exercise of options, stock awards and grants. As of
September 26, 2020,
there were
268,493
shares of common stock available for issuance of additional awards under the
2018
Equity Incentive Plan.
No
further awards will be issued under the Company's
2005
Equity Incentive Plan or its
2000
Stock Option Plan, though all awards under the
2005
Equity Incentive Plan that are outstanding continue to be governed by the terms, conditions and procedures set forth in the plan and any applicable award agreement.
 
Outstanding options generally vest over a period determined by the Company's board of directors, and must be exercised while the grantee is employed by the Company (or while providing services under a service arrangement in the case of non-employees) or within a certain period after termination of employment or service arrangement in the case of non-employees. All outstanding options have a
ten
-year life from the date of grant. Holders of options
may
be granted stock appreciation rights (SARs), which entitle them to surrender outstanding awards for a cash distribution under certain changes in ownership of the Company, as defined in the equity incentive plan. As of
December 26, 2020,
no
SARs have been granted under any equity incentive plan. The Company records compensation cost associated with share-based compensation equivalent to the estimated fair value of the awards over the requisite service period.
 
 
Stock
Options
 
In calculating compensation related to stock option grants, the fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option-pricing model and the following weighted average assumptions:
 
   
Three Month Periods Ended
   
Nine Month Periods Ended
 
   
December
2
8
,
20
20
   
December
29
,
201
9
   
December
2
8
,
20
20
   
December
29
,
201
9
 
Expected volatility
   
     
     
168.81
%    
101.97
%
Risk-free interest rate
   
     
     
0.39
%    
2.25
%
Expected term (years)
   
     
     
8.36
     
8.36
 
 
The computation of expected volatility used in the Black-Scholes-Merton option-pricing model is based on the historical volatility of the Company's share price. The expected term is estimated based on a review of historical employee exercise behavior with respect to option grants. The risk-free interest rate is based on the U.S. Treasury rates with maturity similar to the expected term of the option on the date of grant.
 
A summary of the changes in stock options outstanding for the
nine
-month period ended
December 26, 2020
and the fiscal year ended
March 28, 2020
is as follows:
 
           
Weighted
Average
   
Weighted
Average
Remaining
   
Aggregate
 
   
Shares
   
Exercise Price
per share
   
Contractual
Terms (Years)
   
Intrinsic
Value
 
Outstanding at March 30, 2019
   
182,366
    $
6.15
     
8.4
    $
 
Granted
   
73,880
     
4.98
     
9.2
     
 
 
Forfeited / Expired
   
(15,488
)    
5.13
     
 
     
 
 
Outstanding at March 28, 2020
   
240,758
    $
5.86
     
7.9
    $
 
Granted
   
10,000
     
3.85
     
9.6
     
 
 
Outstanding at December 26, 2020
   
250,758
    $
5.78
     
7.2
    $
 
                                 
Exercisable at December 26, 2020
   
139,904
    $
6.55
     
6.4
    $
 
                                 
At December 26, 2020 expected to vest in the future
   
110,854
    $
4.80
     
8.2
    $
 
 
 
As of
December 26, 2020,
there was
$307,000
of total unrecognized compensation cost related to non-vested options. That cost is expected to be recognized over a weighted average period of
2.15
years. There were
12,675
options and
13,240
options that vested during the quarters ended
December 26, 2020
and
December 28, 2019,
respectively. The total grant date fair value of options vested during the quarters ended
December 26, 2020
and
December 28, 2019
was
$53,400
and
$61,000
respectively. There were
52,662
and
47,700
options that vested during the
nine
-month periods ended
December 26, 2020
and
December 28, 2019,
respectively. The total grant date fair value of options vested during the
nine
-month periods ended
December 26, 2020
and
December 28, 2019
was
$222,000
and
$185,000,
respectively.
No
shares were exercised during the
three
and
nine
-month periods ended
December 26, 2020
and
December 28, 2019.
Share based compensation cost recognized in operating results for the
three
-month periods ended
December 26, 2020
and
December 28, 2019
totaled
$55,000
and
$56,000,
respectively. Share based compensation cost recognized in operating results for the
nine
-month periods ended
December 26, 2020
and
December 28, 2019
totaled
$182,000
and
$159,000,
respectively.
 
Restricted Stock
 
The Company granted
no
restricted stock awards during the
third
quarter and
first
nine
months of fiscal
2021.
Restricted stock awards are considered fixed awards as the number of shares and fair value at the grant date are amortized over the requisite service period net of estimated forfeitures. As of
December 26, 2020,
there was
$8,000
of total unrecognized compensation cost related to non-vested restricted stock awards. That cost is expected to be recognized over a weighted average period of
0.25
years and will be adjusted for subsequent changes in estimated forfeitures. Compensation cost recognized for the restricted and unrestricted stock awards during the
third
quarter and
first
nine
months of fiscal of
2021
was
$7,900
and
$23,000,
respectively. Compensation cost recognized for the restricted and unrestricted stock awards during the
third
quarter and
first
nine
months of fiscal of
2020
was
$9,600
and
$70,000,
respectively.
 
 
A summary of the changes in non-vested restricted stock awards outstanding for the
nine
-month period ended
December 26, 2020
and the fiscal year ended
March 28, 2020
is as follows:
 
   
Shares
   
Weighted
Average Fair
Value per share
 
Non-Vested at March 30, 2019
   
22,343
    $
8.40
 
Granted
   
10,000
     
3.97
 
Vested
   
(21,009
)    
8.25
 
Forfeited or cancelled
   
(1,334
)
   
12.00
 
Non-Vested at March 28, 2020
   
10,000
    $
3.97
 
Non-Vested at December 26, 2020
   
10,000
    $
3.97