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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2021
Equity [Abstract] |
Stockholders' Equity | STOCKHOLDERS' EQUITY General Our authorized capital stock consists of 75 million shares of common stock, par value $0.0001 per share, and 25 million shares of preferred stock, par value $0.0001 per share. At September 30, 2021, and December 31, 2020, we had no stock options outstanding. At September 30, 2021, and December 31, 2020, there were 19,468,276 and 19,384,192 shares of common stock outstanding, respectively, and no shares of preferred stock outstanding. Rights Plan On September 2, 2021, the Company entered into a Rights Agreement between the Company and Computershare Trust Company, N.A., as Rights Agent (as amended from time to time, the “Rights Agreement”), that was approved by our Board of Directors. In connection with the Rights Agreement, a dividend was declared of one preferred stock purchase right (individually, a “Right” and collectively, the “Rights”) for each share of our common stock outstanding at the close of business on September 17, 2021. Each Right will entitle the registered holder thereof, after the Rights become exercisable and until August 31, 2022 (or the earlier redemption, exchange or termination of the Rights), to purchase from the Company one one-tenth of a share of Series A Junior Participating Preferred Stock, par value $0.00001 per share (the “Series A Preferred”), of the Company at a price of $50.95 per one one-tenth of a share of Series A Preferred. The Rights become exercisable upon the earlier to occur of (i) the close of business on the tenth business day following a public announcement that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership of 10% (20% in the case of a passive institutional investor) or more of our common stock (an “Acquiring Person”) or (ii) the close of business on the tenth business day (or such later date as may be determined by action of our Board of Directors prior to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) following the commencement or announcement of an intention to make a tender offer or exchange offer, the consummation of which would result in a person or group becoming an Acquiring Person. Dividends Cash distributions to stockholders, as disclosed in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021, and 2020, include previously declared cash dividends on shares of vested restricted common stock ("restricted stock") issued to our non-executive directors and dividends related to vested restricted stock units ("RSUs") issued to eligible employees. Cash dividends on RSUs and restricted stock have been accrued and are paid when the applicable vesting conditions are met. Accrued cash dividends on forfeited restricted stock and RSUs are also forfeited. The following table details our cash dividends declared in 2021:
|  |  |  |  |  |  |  | (Dollars in thousands)
Declaration Date |  | Record Date |  | Payment Date |  | Per Share Amount |  | Total Declared(1)
February 17, 2021 |  | March 16, 2021 |  | March 30, 2021 |  | $ | 0.125 |  |  | $ | 2,553 |
April 28, 2021 |  | May 25, 2021 |  | June 24, 2021 |  | 0.125 |  |  | 2,553 |
July 28, 2021 |  | August 17, 2021 |  | September 10, 2021 |  | 0.125 |  |  | 2,545 |
Total |  |  |  |  |  | $ | 0.375 |  |  | $ | 7,651 |
(1) The total declared reflects the cash dividends declared in relation to common stock, deferred stock units ("DSUs") and unvested RSUs. On November 3, 2021, our Board of Directors declared a regular quarterly cash dividend of $0.125 per share of common stock with a record date of November 16, 2021, and a payment date of December 10, 2021. This cash dividend of approximately $2.4 million will be paid from available cash on hand. Net Income (Loss) per Common Share Basic net income (loss) per common share is computed on the basis of the weighted average common shares outstanding. Diluted net income (loss) per common share is computed on the basis of the weighted average common shares outstanding plus the effect of all potentially dilutive common shares, including outstanding restricted stock and RSUs, which are treated as contingently issuable shares, using the “treasury stock” method. The components of basic and diluted net income (loss) per common share were as follows for the periods stated:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
(in thousands, except for share and per share amounts) | 2021 |  | 2020 |  | 2021 |  | 2020
Numerator: |  |  |  |  |  |  |
Net (loss) income | $ | (2,494) |  |  | $ | 3,165 |  |  | $ | (5,510) |  |  | $ | 2,384 |
Denominator: |  |  |  |  |  |  |
Basic weighted average common shares outstanding | 19,464,893 |  |  | 19,051,502 |  |  | 19,378,543 |  |  | 19,008,969 |
Diluted weighted average common shares outstanding | 19,464,893 |  |  | 19,208,452 |  |  | 19,378,543 |  |  | 19,273,243 |
Basic net (loss) income per common share | $ | (0.13) |  |  | $ | 0.17 |  |  | $ | (0.28) |  |  | $ | 0.13 |
Diluted net (loss) income per common share | $ | (0.13) |  |  | $ | 0.16 |  |  | $ | (0.28) |  |  | $ | 0.12 |
For the three and nine months ended September 30, 2021, and 2020 the following securities were excluded from the calculation of diluted shares outstanding as the effect would have been anti-dilutive:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Restricted stock units | 197,900 |  |  | — |  |  | 341,443 |  |  | — |
Stock-Based Compensation Plans On March 23, 2012, our Board of Directors adopted the Spok Holdings, Inc. 2012 Equity Incentive Award Plan (the “2012 Equity Plan”) that our stockholders subsequently approved on May 16, 2012. A total of 2,194,986 shares of common stock were reserved for issuance under this plan. On April 29, 2020, our Board of Directors adopted the Spok Holdings, Inc. 2020 Equity Incentive Award Plan (the “2020 Equity Plan” and, together with the 2012 Equity Plan, the "Equity Plans") that our stockholders subsequently approved on July 28, 2020. As of that date, a total of 1,699,950 shares of common stock have been reserved for issuance under the 2020 Equity Plan, and no further grants will be made under the 2012 Equity Plan. However, the 2012 Equity Plan will continue to govern all outstanding awards thereunder. Awards under the 2020 Equity Plan may be in the form of stock options, restricted common stock, RSUs, performance awards, dividend equivalents, stock payment awards, deferred stock, DSUs, stock appreciation rights or other stock or cash-based awards. Restricted stock awards generally vest one year from the date of grant. Related dividends accumulate during the vesting period and are paid at the time of vesting. Contingent RSUs generally vest over a three-year performance period upon successful completion of the performance objectives. Non-contingent RSUs generally vest in thirds, annually, over a three-year period. Dividend equivalent rights generally accompany each RSU award and those rights accumulate and vest along with the underlying RSU. Dividend equivalent rights generally accompany each DSU award and are paid to participants in cash on the Company's applicable dividend payment date whether the DSU is vested or unvested. The dividend equivalent right associated with a DSU continues until delivery of the underlying shares of common stock is made. Payment of the underlying shares of common stock occurs at the earliest of a participant's separation from service, disability, death, or a change in control. Any shares subject to an award under the 2012 Equity Plan that are forfeited or expire will be available for the future grant of awards under the 2020 Equity Plan. As of September 30, 2021, the aggregate amount of unvested RSUs and restricted stock outstanding under the 2012 Equity Plan was 496,211. The following table summarizes the activities under the Equity Plans from January 1, 2021, through September 30, 2021:
| Activity
Total equity securities available at January 1, 2021 | 1,699,314 |
RSU, DSU, and restricted stock awarded to eligible employees, net of forfeitures | (508,889) |
Issuance of common stock in lieu of cash compensation | (169,944) |
Total equity securities available at September 30, 2021 | 1,020,481 |
The following table details activities with respect to outstanding RSUs, DSUs, and restricted stock under the Equity Plans for the nine months ended September 30, 2021:
| Shares |  | Weighted- Average Grant Date Fair Value
Unvested at January 1, 2021 | 636,722 |  |  | $ | 12.16 |
Granted | 644,339 |  |  | 11.02 |
Vested | (41,760) |  |  | 10.09 |
Forfeited | (135,450) |  |  | 12.14 |
Unvested at September, 30 2021 | 1,103,851 |  |  | $ | 11.58 |
Of the 1,103,851 unvested RSUs, DSUs and restricted stock outstanding at September 30, 2021, 519,832 RSUs include contingent performance requirements for vesting purposes. At September 30, 2021, there was $5.5 million of unrecognized net compensation cost related to RSUs and restricted stock, which is expected to be recognized over a weighted average period of 1.7 years. For the first three quarters of 2021, qualified employees received a portion of their compensation in the form of shares of the Company's common stock in lieu of cash. These awards were made in advance on a quarterly basis and vested immediately. For the nine months ended September 30, 2021, 169,944 shares of common stock were issued, with a weighted average grant date fair value of $10.87. Employee Stock Purchase Plan In 2016, our Board of Directors adopted the Spok Holdings, Inc. Employee Stock Purchase Plan (the "ESPP") that our stockholders subsequently approved on July 25, 2016. A total of 250,000 shares of common stock were reserved for issuance under this plan. The ESPP allows employees to purchase shares of common stock at a discounted rate, subject to plan limitations. Under the ESPP, eligible participants can voluntarily elect to have contributions withheld from their pay for the duration of an offering period, subject to the ESPP limits. At the end of an offering period, contributions will be used to purchase the Company's common stock at a discount to the market price based on the first or last day of the offering period, whichever is lower. Participants are required to hold common stock for a minimum period of two years from the grant date. Participants will begin earning dividends on shares after the purchase date. Each offering period will generally last for no longer than six months. Once an offering period begins, participants cannot adjust their withholding amount. If a participant chooses to withdraw, any previously withheld funds will be returned to the participant, with no stock purchased, and that participant will be eligible to participate in the ESPP during the next offering period. If the participant terminates employment with the Company during the offering period, all contributions will be returned to the employee and no stock will be purchased. The Company uses the Black-Scholes model to calculate the fair value of the common stock to be purchased each offering period on the offer date. The Black-Scholes model requires the use of estimates for the expected term, the expected volatility of the underlying common stock over the expected term, the risk-free interest rate and the expected dividend payment. For the nine months ended September 30, 2021, and 2020, employees purchased 16,015 and 18,586 shares, respectively, of the Company's common stock for a total cost of $0.1 million and $0.2 million, respectively. The following table summarizes the activities under the ESPP from January 1, 2021, through September 30, 2021:
| Activity
Total ESPP equity securities available at January 1, 2021 | 149,199 |
ESPP common stock purchased by eligible employees | (16,015) |
Total ESPP securities available at September 30, 2021 | 133,184 |
Amounts withheld from participants will be classified as Accrued compensation and benefits in the Condensed Consolidated Balance Sheets until funds are used to purchase shares. This liability amount is immaterial to the Condensed Consolidated Financial Statements. Stock-Based Compensation Expense We record all stock-based compensation, which consist of RSUs, DSUs, restricted stock, equity in lieu of salary, and the option to purchase common stock under the ESPP, at fair value as of the grant date. Stock-based compensation expense is recognized based on a straight-line amortization basis over the respective service period. Forfeitures and withdrawals are accounted for as incurred. The following table reflects the items for stock-based compensation expense in the Condensed Consolidated Statements of Operations for the periods stated:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
(Dollars in thousands) | 2021 |  | 2020 |  | 2021 |  | 2020
Performance-based RSUs | $ | 447 |  |  | $ | 664 |  |  | $ | 1,202 |  |  | $ | 1,524 |
Time-based RSUs, DSUs and restricted stock | 939 |  |  | 929 |  |  | 2,920 |  |  | 2,556 |
Equity in lieu of salary | 607 |  |  | — |  |  | 1,847 |  |  | — |
ESPP | 23 |  |  | 23 |  |  | 67 |  |  | 80 |
Total stock-based compensation | $ | 2,016 |  |  | $ | 1,616 |  |  | $ | 6,036 |  |  | $ | 4,160 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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