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Description of Stock Plans | 12 Months Ended
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Mar. 31, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Description of Stock Plans |
8. | Description of Stock Plans
Employee Stock Plan The Company is currently issuing stock awards under the Amended and Restated Digital Turbine, Inc. 2011 Equity Incentive Plan (the “2011 Plan”), which was approved and adopted by our stockholders by written consent on May 23, 2012. No future grants will be made under the previous plan, the 2007 Employee, Director and Consultant Stock Plan (the “2007 Plan”). In the year ended March 31, 2015, in connection with the acquisition of Appia, the Company assumed the Appia, Inc. 2008 Stock Incentive Plan (the “Appia Plan”). The 2011 Plan and 2007 Plan are collectively referred to as “Digital Turbine’s Incentive Plans.” Digital Turbine’s Incentive Plans and the Appia Plan are all collectively referred to as the “Stock Plans.” The 2011 Plan provides for grants of stock-based incentive awards to our and our subsidiaries’ officers, employees, non-employee directors and consultants. Awards issued under the 2011 Plan can include stock options, stock appreciation rights (“SARs”), restricted stock and restricted stock units (sometimes referred to individually or collectively as “Awards”). Stock options may be either “incentive stock options” (“ISOs”), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified stock options (“NQSOs”). The 2011 Plan reserves 20,000,000 shares for issuance, of which approximately 14,393,741 and 16,659,173 remained available for future grants as of March 31, 2015 and 2014, respectively. The 2011 Plan provides for grants of stock options, stock appreciation rights (“SARs”), restricted stock and restricted stock units (sometimes referred to individually or collectively as “Awards”) to our and our subsidiaries’ officers, employees, non-employee directors and consultants. Stock Option Agreements Stock options granted under the Company’s Incentive Plans typically vest over a three to four year period. These options, which are granted with option exercise prices equal to the fair market value of the Company’s common stock on the date of grant, generally expire up to ten years from the date of grant. In the year ended March 31, 2015, in connection the Appia acquisition, the Company exchanged stock options previously granted under the Appia Plan for options to purchase the shares of the Company’s common stock. These assumed Appia options typically vest over a period of four years and generally expire within ten years from the date of grant. Compensation expense for all stock options is recognized on a straight-line basis over the requisite service period. Restricted Stock Awards Awards of restricted stock may be either grants of restricted stock, restricted stock units, or performance-based restricted stock units that are issued at no cost to the recipient. For restricted stock units, legal ownership of the shares is not transferred to the employee until the units vest, which is generally over a three year period. The cost of these awards is determined using the fair market value of the Company’s common stock on the date of the grant. Compensation expense for restricted stock awards with a service condition is recognized on a straight-line basis over the requisite service period. Stock Option Activity The following table summarizes stock option activity for the Stock Plans during the years ended March 31, 2015 and 2014:
|  |  |  |  |  |  |  |  | Weighted Average |  |  |  |  |
| Number of |  |  | Weighted Average |  |  | Remaining Contractual |  |  | Aggregate Intrinsic |
| Shares |  |  | Exercise Price (per share) |  |  | Life (in years) |  |  | Value (in thousands) |
Options Outstanding, March 31, 2013 |  | 1,019,670 |  |  | $ | 8.74 |  |  |  | 4.55 |  |  | $ | — |
Granted (a) |  | 2,840,000 |  |  | $ | 3.33 |  |  |  |  |  |  |  |  |
Forfeited/Canceled |  | (151,860 | ) |  | $ | 3.96 |  |  |  |  |  |  |  |  |
Exercised |  | (240,000 | ) |  | $ | 1.25 |  |  |  |  |  |  |  |  |
Options Outstanding, March 31, 2014 |  | 3,467,810 |  |  | $ | 5.05 |  |  |  | 8.33 |  |  | $ | 2,318 |
Assumed through acquisitions |  | 245,955 |  |  | $ | 0.64 |  |  |  |  |  |  |  |  |
Granted |  | 3,124,200 |  |  | $ | 4.06 |  |  |  |  |  |  |  |  |
Forfeited/Canceled |  | (994,874 | ) |  | $ | 3.24 |  |  |  |  |  |  |  |  |
Exercised |  | (53,333 | ) |  | $ | 2.56 |  |  |  |  |  |  |  |  |
Options Outstanding, March 31, 2015 |  | 5,789,758 |  |  | $ | 4.65 |  |  |  | 8.35 |  |  | $ | 1,319 |
Vested and expected to vest (net of estimated forfeitures) at March 31, 2015 (b) |  | 4,542,791 |  |  | $ | 4.85 |  |  |  | 8.05 |  |  | $ | 1,250 |
Exercisable, March 31, 2015 |  | 1,987,525 |  |  | $ | 4.65 |  |  |  | 6.39 |  |  | $ | 909 |
(a)In Fiscal 2014, Digital Turbine, Inc. did not convert or assume any options in connection with business acquisitions.
(b) | For options vested and expected to vest, options exercisable, and options outstanding, the aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Digital Turbine's closing stock price on March 31, 2015 and the exercise price multiplied by the number of in-the-money options) that would have been received by the option holders had the holders exercised their options on March 31, 2015. The intrinsic value changes based on changes in the price of Digital Turbine's common stock.
In connection with the Appia acquisition, Digital Turbine, Inc. assumed approximately 246,000 stock options, with a weighted-average exercise price per share of $0.64. Information about options outstanding and exercisable at March 31, 2015 is as follows:
| Options Outstanding |  |  | Options Exercisable |
|  |  |  |  | Weighted |  |  | Weighted |  |  |  |  |  |  | Weighted |
|  |  |  |  | Average |  |  | Average |  |  |  |  |  |  | Average |
| Number of |  |  | Exercise |  |  | Remaining |  |  | Number of |  |  | Exercise |
Exercise Price | Shares |  |  | Price |  |  | Life (Years) |  |  | Shares |  |  | Price |
$0.00 - 0.50 |  | 8,065 |  |  | $ | 0.24 |  |  |  | 4.99 |  |  |  | 8,065 |  |  | $ | 0.24 |
$0.51 - 1.00 |  | 237,891 |  |  | $ | 0.65 |  |  |  | 7.49 |  |  |  | 158,685 |  |  | $ | 0.64 |
$2.01 - 2.50 |  | 153,776 |  |  | $ | 2.40 |  |  |  | 2.84 |  |  |  | 153,776 |  |  | $ | 2.40 |
$2.51 - 3.00 |  | 939,831 |  |  | $ | 2.68 |  |  |  | 8.56 |  |  |  | 577,560 |  |  | $ | 2.68 |
$3.51 - 4.00 |  | 2,205,465 |  |  | $ | 3.95 |  |  |  | 9.59 |  |  |  | 229,628 |  |  | $ | 3.96 |
$4.01 - 4.50 |  | 1,714,730 |  |  | $ | 4.22 |  |  |  | 8.56 |  |  |  | 399,811 |  |  | $ | 4.23 |
$4.51 - 5.00 |  | 60,000 |  |  | $ | 4.65 |  |  |  | 7.99 |  |  |  | 40,000 |  |  | $ | 4.65 |
$5.01 and over |  | 470,000 |  |  | $ | 16.32 |  |  |  | 3.77 |  |  |  | 420,000 |  |  | $ | 17.56 |
|  | 5,789,758 |  |  |  |  |  |  |  |  |  |  |  | 1,987,525 |  |  |  |  |
Other information pertaining to stock options for the Stock Plans is as follows:
|  | March 31, |
|  | 2015 |  |  | 2014 |
Total fair value of options vested |  | $ | 1,266 |  |  | $ | 19 |
Total intrinsic value of options exercised (a) |  | $ | 71 |  |  | $ | 554 |
(a) | The total intrinsic value of options exercised represents the total pre-tax intrinsic value (the difference between the stock price at exercise and the exercise price multiplied by the number of options exercised) that was received by the option holders who exercised their options during the fiscal year.
The weighted average grant-date fair value for the options granted during the fiscal years ended March 31, 2015 and 2014, was $3.44 and $3.33, respectively. At March 31, 2015 and March 31, 2014, there was $1,135 and $885 of total unrecognized stock-based compensation expense, net of estimated forfeitures, related to unvested stock options expected to be recognized over a weighted-average period of 1.6 years and 1.9 years, respectively. Valuation of Awards For stock options granted under Digital Turbine’s Incentive Plans, Digital Turbine Inc. typically uses the Black-Scholes option pricing model to estimate the fair value of stock options at grant date. The Black-Scholes option pricing model incorporates various assumptions, including volatility, expected term risk-free interest rates, and dividend yields. The fair value of options assumed under the Appia Plan was estimated as of the March 6, 2015 closing date using the Black-Scholes option pricing model. The assumptions utilized in this model during Fiscal 2015 and Fiscal 2014 are presented below.
|  | March 31, |
|  | 2015 |  |  | 2014 |
Risk free interest rate |  | 1.37% to 1.79% |  |  | 1.36% to 1.71% |
Expected life of the options |  | 5.73 to 6 years |  |  | 5.27 to 6 years |
Expected volatility |  | 115% to 145% |  |  | 150% to 155% |
Expected dividend yield |  |  | 0% |  |  |  | 0% |
Expected forfeitures |  | 10% to 35% |  |  | 10% to 35% |
Expected volatility is based on a blend of implied and historical volatility of Digital Turbine's common stock over the most recent period commensurate with the estimated expected term of Digital Turbine’s stock options. Digital Turbine uses this blend of implied and historical volatility, as well as other economic data, because management believes such volatility is more representative of prospective trends. The expected term of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees. Total stock compensation expense for the Company’s equity plans, which includes both stock options and restricted stock is included in the following statements of operations components. Please see Note 13 regarding restricted stock:
| Twelve Months Ended |  |  | Twelve Months Ended |
| March 31, 2015 |  |  | March 31, 2014 |
Product development | $ | — |  |  | $ | — |
Sales and marketing |  | — |  |  |  | — |
General and administrative |  | 6,340 |  |  |  | 4,693 |
| $ | 6,340 |  |  | $ | 4,693 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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