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Stock Acquisition Rights, Stock Options and Warrants | 12 Months Ended
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Mar. 31, 2022
Share-based Payment Arrangement [Abstract] |
Stock Acquisition Rights, Stock Options and Warrants | Stock Acquisition Rights, Stock Options and Warrants The Company established the 2014 Stock Plan (the “2014 Stock Plan”) to attract, retain and reward individuals who contribute to the achievement of the Company’s goals and objectives. This 2014 Stock Plan superseded previous stock plans. The Board has reserved 5,027,201 shares of common stock for issuance under the 2014 Stock Plan as of March 31, 2022, of which 1,216,868 shares are available for future issuance. Historically, the number of shares reserved under the 2014 Stock Plan were increased, based on Board approval, each January 1 through January 1, 2024 by an amount equal to the lesser of (i) 5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or (ii) a lesser amount determined by the Board (the “evergreen provision”). Effective January 1, 2021, the Board elected to increase the shares authorized under the 2014 Stock Plan by 879,216 shares, which represented 5% of the of the Company’s common stock issued and outstanding as of December 31, 2020. On June 14, 2021, the Compensation Committee of the Board approved Amendment No. 1 to 2014 Stock Plan to eliminate the evergreen provision for all future years (i.e., January 1, 2022 through January 1, 2024). Restricted Stock and Restricted Stock Units A summary of non-vested restricted stock activity for the year ended March 31, 2022 is as follows:
| Restricted Stock |  | Weighted Average Grant Day Fair Value
Non-vested restricted stock outstanding at March 31, 2021 | 475,759 |  |  | $ | 42.48 |
Granted | 362,073 |  |  | 50.64 |
Vested | (221,554) |  |  | 42.72 |
Forfeited | (71,991) |  |  | 44.75 |
Non-vested restricted stock outstanding at March 31, 2022 | 544,287 |  |  | $ | 47.39 |
The following table reflects activity related to our restricted stock for the years ended March 31, 2022, 2021 and 2020:
| 2022 |  | 2021 |  | 2020
Weighted-average grant-date fair value per unit granted | $ | 50.64 |  |  | $ | 46.07 |  |  | $ | 42.86 |
Fair value of restricted stock units vested (in thousands) | $ | 12,240 |  |  | $ | 8,165 |  |  | $ | 5,877 |
The Company recognizes compensation expense for restricted stock on a straight-line basis over the explicit vesting period. Vested restricted stock units are settled and issuable upon the earlier of the date the employee ceases to be an employee of the Company or a date certain in the future. Stock compensation expense related to restricted stock was approximately $9.7 million for the year ended March 31, 2022, which included $8.5 million in general and administrative expenses, $0.7 million in product development and the remainder of approximately $0.5 million included in sales and support reported in the Consolidated Statements of Operations. Stock compensation expense related to restricted stock was approximately $9.2 million for the year ended March 31, 2021, which included $0.8 million of expense related to the Type III modification of restricted stock units held by the Company’s former Chairman of the Board upon his transition to a consultant to the Company that is probable of vesting under the modified condition of which approximately $8.4 million are included in general and administrative expenses, $0.6 million in product development and the remainder of approximately $0.2 million included in sales and support reported in the Consolidated Statements of Operations. Stock compensation expense related to restricted stock was approximately $4.3 million for the year ended March 31, 2020, of which approximately $3.9 million is included in general and administrative expenses, $0.2 million in product development expenses and the remainder of approximately $0.2 million included in sales and support expenses reported in the Consolidated Statements of Operations. As of March 31, 2022 and 2021, the Company incurred stock compensation costs to obtain its long-term 900 MHz Broadband Spectrum lease agreements amounting to approximately $0.1 million and $0.2 million, respectively, which was capitalized and will be amortized over the contractual term of approximately 20-years and 30-years, respectively. In May 2020, the Compensation Committee granted restricted stock awards for 28,000 shares of common stock, or approximately $1.5 million, to satisfy the fiscal year 2020 bonus liability, recorded in accounts payable and accrued expenses, for key individuals. As of March 31, 2022 and 2021, there was $18.4 million and $13.2 million, respectively, of unvested compensation expense for the restricted stock, which is expected to be recognized over a weighted average period of 2.53 years and 2.36 years, respectively. Performance-Based Restricted Stock Units A summary of the performance-based restricted stock unit activity for the year ended March 31, 2022 is as follows:
| Performance Stock |  | Weighted Average Grant Day Fair Value
Performance stock outstanding at March 31, 2021 | 75,049 |  |  | $ | 58.65 |
Granted | — |  |  | — |
Vested | — |  |  | — |
Forfeited/cancelled | — |  |  | — |
Performance stock outstanding at March 31, 2022 | 75,049 |  |  | $ | 58.65 |
The following table reflects activity related to our performance-based restricted stock units for the years ended March 31, 2022, 2021 and 2020:
| 2022 |  | 2021 |  | 2020
Weighted-average grant-date fair value per unit granted | $ | — |  |  | $ | 58.65 |  |  | $ | 46.23 |
Fair value of Performance stock units vested (in thousands) | $ | — |  |  | $ | 3,941 |  |  | $ | — |
Outstanding performance stock units included in the table above are shown at target. Share payout can range from 0% to 200% for CEO Performance Units (as defined below) based on the Cumulative Spectrum Proceeds Monetized (“CSPM”) metric and 25% to 350% for CEO Performance Units based on the Total Stockholders Return (“TSR Performance Units”) metrics. Performance-Based related to Report and Order and Long-Term Agreement(s) On October 2, 2019, the Company awarded 11,307 performance-based restricted stock units under the 2014 Stock Plan. The performance goal was: prior to January 13, 2020, (A) issuance of a Final Order from the FCC (“Final Order”) providing for the creation and allocation of licenses for spectrum in the 900 MHz band consisting of paired blocks of contiguous spectrum, each containing at least 3 MHz of contiguous spectrum, authorized for broadband wireless communications uses and (B) the lack of objection by the Board to the terms and conditions (including, but not limited to, the rebanding, clearing and relocation procedures, license assignment and award mechanisms and technical and operational rules) set forth or referenced in the Final Order. All 120,445 performance-based restricted stock units awarded were forfeited in January 2020 as a result of the performance conditions not being met by January 13, 2020. No compensation expense was recorded for these performance-based restricted stock units. On February 28, 2020, the Company awarded 95,538 performance-based restricted stock units. The performance goals are: (A) Target Goal: 50% of the shares vest upon (i) achievement by December 31, 2020 of a Final Order from the FCC providing for the creation and allocation of licenses for spectrum in the 900 MHz band consisting of paired blocks of contiguous spectrum, each containing at least 3 MHz of contiguous spectrum, authorized for broadband wireless communications uses and (ii) the lack of objection by the Board to the terms and conditions (including, but not limited to, the rebanding, clearing and relocation procedures, license assignment and award mechanisms and technical and operational rules) set forth or referenced in the Final Order; and (B) Stretch Goal: The remaining 50% of the performance shares vest and settle upon the occurrence of all three of the following conditions: (i) the Company enters into one or more long-term agreement(s) with critical infrastructure or enterprise business(es) to enable such business(es) to utilize the Company’s spectrum for broadband connectivity; (ii) the combined total contract dollars payable to the Company over the initial term(s) of such agreement(s) equals or exceeds a certain amount as specified by the Board; and (iii) the agreement(s) is/are binding on such business(es) and is/are either not contingent on prior Board approval(s) or such approval(s) has/have been received. Additionally, on February 28, 2020, the Company awarded 43,446 performance-based restricted stock units. The performance goal related to these units is: 100% of the shares will vest upon (i) achievement by December 31, 2020 of a Final Order providing for the creation and allocation of licenses for spectrum in the 900 MHz band consisting of paired blocks of contiguous spectrum, each containing at least 3 MHz of contiguous spectrum, authorized for broadband wireless communications uses and (ii) the lack of objection by the Board to the terms and conditions (including, but not limited to, the rebanding, clearing and relocation procedures, license assignment and award mechanisms and technical and operational rules) set forth or referenced in the Final Order. On September 30, 2020, the Company recorded stock compensation expense included in general and administrative expenses reported in the Consolidated Statements of Operations amounting to approximately $4.3 million based on the achievement of the Target Goal described above or approximately 91,216 shares under the performance-based restricted stock units, upon the Report and Order becoming effective in August 2020. As of March 31, 2021, there was no stock compensation expense recognized for the Stretch Goal described above under the performance-based restricted stock units as the 47,768 performance-based restricted stock units expired as unvested. CEO Performance Units Cumulative Spectrum Proceeds Monetized On December 31, 2020, the Compensation Committee awarded performance-based restricted units to the Company’s President and Chief Executive Officer as part of the Succession Plan, (the “CEO Performance Units”). The performance-based restricted units will vest on a determination date of June 24, 2024 (“Determination Date”) (unless sooner triggered by an earlier involuntary termination), based on Cumulative Spectrum Proceeds Monetized (“CSPM”) metric over a four-year measurement period commencing on June 24, 2020, with 15,025 units vesting if the minimum CSPM level is achieved, 30,049 units vesting if the target CSPM metric is achieved and up to 60,098 vesting if the maximum CSPM metric is achieved. The Company recorded approximately $0.3 million and $0.1 million of stock compensation expense included in general and administrative expenses reported in the Consolidated Statements of Operations relating to the CEO Performance Units - CSPM for the years ended March 31, 2022 and 2021, respectively. As of March 31, 2022 and 2021, there was approximately $0.8 million and $1.0 million, respectively, of unvested compensation expense for the outstanding performance-based restricted stock units related to the December 31, 2020 CEO Performance Units, which is expected to be recognized over a weighted average period of 2.49 years and 3.49 years, respectively. Total Stockholder Return On February 1, 2021, the Compensation Committee awarded performance-based restricted units to the Company’s President and Chief Executive Officer based on Total Stockholder Return metrics (“TSR Performance Units”). The performance-based restricted units will vest upon continued service and achievement of certain stock price levels calculated using a four-year compound annual growth rate and based on the average closing bid price per share of the Company’s common stock measured over a sixty-trading day period (“Stock Price Levels”). Shares will vest in a range of 25% to 350% of the 45,000 target reported units based on achieving specified Stock Price Levels. The vesting end measurement date is February 1, 2025, with earlier vesting determination dates upon a change in control of the Company, involuntary termination of the CEO or twelve months following the achievement of the maximum stock price level. If after February 1, 2023, the President and Chief Executive Officer achieves a Stock Price Level, there will be a vesting determination date the earlier of twelve months thereafter or February 1, 2025. The following assumptions were used to calculate the grant date fair value of performance-based restricted units with market price condition using the Monte Carlo simulation model:
|  | February 1, 2021
Risk-free interest rate |  | 0.29%
Dividend yield |  | —%
Volatility |  | 56.09%
Simulation term |  | 4 years
Forfeiture rate |  | —%
The Company recorded approximately $1.0 million and $0.2 million of stock compensation expense relating to the TSR Performance Units for the years ended March 31, 2022 and 2021, respectively, included in general and administrative expenses reported in the Consolidated Statements of Operations. As of March 31, 2022 and 2021, there was approximately $2.3 million and $3.1 million, respectively, of unvested compensation expense for the outstanding performance-based restricted stock units related to the February 1, 2021 TSR Performance Units, which is expected to be recognized over a weighted average period of 2.93 years and 3.71 years, respectively. Stock Options A summary of Stock Option activity for the year ended March 31, 2022 is as follows:
| Options |  | Weighted Average Exercise Price |  | Weighted Average Contractual Term |  | Aggregate Intrinsic Value
Options outstanding at March 31, 2021 | 1,663,223 |  |  | $ | 24.96 |  |  |  |  |
Options granted | 165,768 |  |  | 58.56 |  |  |  |  |
Options exercised | (822,750) |  |  | 21.92 |  |  |  |  |
Options forfeited/expired | — |  |  | — |  |  |  |  |
Options outstanding at March 31, 2022 | 1,006,241 |  |  | $ | 32.98 |  |  | 5.33 |  | $ | 25,278,510 |
Exercisable at March 31, 2022 | 720,180 |  |  | $ | 26.11 |  |  | 3.97 |  | $ | 22,892,912 |
Total vested or expected to vest at March 31, 2022 | 1,004,729 |  |  | $ | 32.97 |  |  | 5.33 |  | $ | 25,242,985 |
On August 23, 2021, the Compensation Committee approved the grant of a stock option to the Company’s President and Chief Executive Officer for 100,000 shares of common stock at an exercise price of $57.00 per share. These option shares vest in four equal annual installments measured from the grant date based on the President and Chief Executive Officer’s continued services to the Company. The Black-Scholes option model requires weighted average assumptions to be used for the calculation of the Company’s stock compensation expense. The assumptions used for this grant were: the expected life of the award was 6.02 years; the risk free interest rate was 0.92%; the expected volatility rate was 53.18%; the expected dividend yield was 0.0%; and the expected forfeiture rate was 0%. On September 7, 2021, the Compensation Committee approved the grant of a stock option to the Company’s Executive Chairman for 65,768 shares of common stock at an exercise price of $60.92 per share. These option shares vest in three equal annual installments measured from the grant date based on the Executive Chairman’s continued services to the Company. The Black-Scholes option model requires weighted average assumptions to be used for the calculation of the Company’s stock compensation expense. The assumptions used for this grant were: the expected life of the award was 5.92 years; the risk free interest rate was 0.96%; the expected volatility rate was 53.45%; the expected dividend yield was 0.0%; and the expected forfeiture rate was 0%. In May 2021, the Company reacquired 20,132 shares when a participant surrendered already-owned shares of the Company’s common stock to cover the exercise price of an outstanding stock option exercised by the participant. The 20,132 shares surrendered were constructively retired by the Company as of June 30, 2021, which resulted in the non-cash reduction of approximately $1.0 million in accumulated deficit in the Consolidated Statement of Stockholders’ Equity. The intrinsic value of stock options exercised was approximately $29.5 million, $5.0 million, and $2.4 million for the years ended March 31, 2022, 2021 and 2020, respectively. Additional information regarding stock options outstanding at March 31, 2022 is as follows:
Exercise Prices |  | Number Outstanding |  | Weighted Average Remaining Life in Years |  | Weighted Average Exercise Price |  | Options Exercisable |  | Weighted Average Exercise-Price of Shares Exercisable
$ | 20.00 |  |  | — |  | $ | 20.00 |  |  | 189,000 |  |  | 2.18 |  | $ | 20.00 |  |  | 189,000 |  |  | $ | 20.00 |
20.01 |  |  | — |  | 46.23 |  |  | 569,585 |  |  | 4.94 |  | 27.44 |  |  | 494,710 |  |  | 26.74 |
46.24 |  |  | — |  | 72.85 |  |  | 247,656 |  |  | 8.64 |  | 55.60 |  |  | 36,470 |  |  | 49.25 |
|  |  |  |  |  | 1,006,241 |  |  | 5.33 |  | $ | 32.98 |  |  | 720,180 |  |  | $ | 26.11 |
The fair value of stock options granted is estimated on the date of grant using the Black-Scholes option valuation model. This stock-based compensation expense valuation model requires the Company to make assumptions and judgments regarding the variables used in the calculation. These variables include the expected term, the expected volatility of the Company’s common stock, expected risk-free interest rate, forfeiture rate and expected dividends. The Company calculates an expected term and volatility from the historical volatilities and terms of selected comparable public companies within its industry along with the Company’s short history regarding these variables. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the stock option. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and will continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover and other factors. The Company has never paid any cash dividends. Any future determination to pay dividends will be at the discretion of the Board and will depend on the Company’s financial condition, results of operations, capital requirements, restrictions contained in any financing instruments and such other factors as the Board deems relevant in its sole discretion. Therefore, the Company uses an expected dividend yield of zero in the option-pricing model. The following assumptions were used to calculate the fair value of stock options:
| Year Ended |  | Year Ended |  | Year Ended
| March 31, 2022 |  | March 31, 2021 |  | March 31, 2020
Risk-free interest rate | 0.92% to 0.96% |  | 0.43% to 0.51% |  | 0.93%
Dividend yield | —% |  | —% |  | —%
Volatility | 53.18% to 53.45% |  | 53.41% to 52.43% |  | 49.63%
Expected term | 5.92 and 6.02 years |  | 6.07 years |  | 5.67 years
Forfeiture rate | —% |  | —% to 2% |  | —% to 2%
Weighted-average grant-date fair value per option granted | $ | 58.56 |  |  | $ | 42.04 |  |  | $ | 46.85 |
Stock compensation expense related to the amortization of the fair value of service-based stock options issued was approximately $2.6 million, $1.3 million and $1.5 million, respectively, for the years ended March 31, 2022, 2021 and 2020 which was included in general and administrative reported in the Consolidated Statements of Operations. The weighted average fair value for the stock option awards granted for the fiscal year ended March 31, 2022 was $58.56 per share. As of March 31, 2022 and 2021, there was approximately $4.1 million and $1.8 million, respectively, of unrecognized compensation cost related to non-vested stock options granted under the Company’s stock option plans which is expected to be recognized over a weighted-average period of 1.47 years and 1.32 years, respectively. Performance-Based Stock Options A summary of the Performance-Based Stock Options for the year ended March 31, 2022 is as follows:
| Performance Options |  | Weighted Average Exercise Price
Performance Options outstanding at March 31, 2021 | 48,417 |  |  | $ | 46.85 |
Performance Options granted | — |  |  | — |
Performance Options exercised | (14,635) |  |  | 46.85 |
Performance Options forfeited/expired | — |  |  | — |
Performance Options outstanding at March 31, 2022 | 33,782 |  |  | $ | 46.85 |
The intrinsic value of performance stock options exercised was approximately $0.2 million, $0.0 million, and $0.0 million for the years ended March 31, 2022, 2021 and 2020, respectively. The vesting of the performance-based stock options outstanding at March 31, 2019 were subject to the attainment of a performance goal. The performance goal was: prior to January 13, 2020: (A) the issuance of a Final Order from the FCC providing for the creation and allocation of licenses for spectrum in the 900 MHz band consisting of paired blocks of contiguous spectrum, each containing at least 3 MHz of contiguous spectrum, authorized for broadband wireless communications uses and (B) the lack of objection by the Board to the terms and conditions (including, but not limited to, the rebanding, clearing and relocation procedures, license assignment and award mechanisms and technical and operational rules) set forth or referenced in the Final Order. All 179,945 performance-based stock options were forfeited on January 13, 2020, as a result of the performance goal not being attained and no stock compensation expense was recorded for these awards. On February 28, 2020, the Company awarded 67,562 performance-based stock options. The performance goals are: (A) Target Goal: 50% of the shares vest upon (i) achievement by December 31, 2020 of a Final Order from the FCC providing for the creation and allocation of licenses for spectrum in the 900 MHz band consisting of paired blocks of contiguous spectrum, each containing at least 3 MHz of contiguous spectrum, authorized for broadband wireless communications uses and (ii) the lack of objection by the Board to the terms and conditions (including, but not limited to, the rebanding, clearing and relocation procedures, license assignment and award mechanisms and technical and operational rules) set forth or referenced in the Final Order; and (B) Stretch Goal: The remaining 50% of the performance shares vest and settle upon the occurrence of all three of the following conditions: (i) the Company enters into one or more long-term agreement(s) with critical infrastructure or enterprise business(es) to enable such business(es) to utilize the Company’s spectrum for broadband connectivity; (ii) the combined total contract dollars payable to the Company over the initial term(s) of such agreement(s) equals or exceeds a certain amount as specified by the Board; and (iii) the agreement(s) is/are binding on such business(es) and is/are either not contingent on prior Board approval(s) or such approval(s) has/have been received. As of December 30, 2020, not all of these conditions had been achieved, and therefore, the 33,780 performance-based stock option shares tied to the stretch goal expired unvested. Additionally, the Company awarded 14,635 performance-based stock options on February 28, 2020. The performance goal is: 100% of the shares will vest upon (i) achievement by December 31, 2020 of a Final Order from the FCC providing for the creation and allocation of licenses for spectrum in the 900 MHz band consisting of paired blocks of contiguous spectrum, each containing at least 3 MHz of contiguous spectrum, authorized for broadband wireless communications uses and (ii) the lack of objection by the Board to the terms and conditions (including, but not limited to, the rebanding, clearing and relocation procedures, license assignment and award mechanisms and technical and operational rules) set forth or referenced in the Final Order. For the year ended March 31, 2022, there was no stock compensation expense recognized for the 33,782 performance-based stock options. For the year ended March 31, 2021, the Company recognized $0.8 million, included in general and administrative expenses reported in the Consolidated Statements of Operations, based on the achievement of the Target Goal under the performance-based stock options, upon the Report and Order becoming effective in August 2020. For the year ended March 31, 2020, there was no stock compensation expense recognized for the 82,197 performance-based stock options. The weighted average fair value for the stock option awards granted for the fiscal year ended March 31, 2020 was $46.85 per share. As of March 31, 2022 and 2021, there was no unvested compensation expense relating to the outstanding performance-based stock options. Share Repurchase Program On September 29, 2021, the Board authorized a share repurchase program (the “share repurchase program”) pursuant to which the Company may repurchase up to $50.0 million of the Company’s common stock on or before September 29, 2023. The manner, timing and amount of any share repurchases will be determined by the Company based on a variety of factors, including price, general business and market conditions and alternative investment opportunities. The share repurchase program authorization does not obligate the Company to acquire any specific number of shares. Under the program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934. The following table presents the share repurchase activity for Fiscal 2022, Fiscal 2021 and Fiscal 2020 (in thousands, except per share data):
| For the years ended March 31,
| 2022 |  | 2021 |  | 2020
Number of shares repurchased | 252 |  |  | — |  |  | — |
Average price paid per share* | $ | 57.50 |  |  | $ | — |  |  | $ | — |
Total cost to repurchase | $ | 14,962 |  |  | $ | — |  |  | $ | — |
* Average price paid per share includes costs associated with the repurchases. Motorola Investment On September 15, 2014, Motorola invested $10.0 million to purchase 500,000 Class B Units of the Company’s subsidiary, PDV Spectrum Holding Company, LLC (the “Subsidiary”) (at a price equal to $20.00 per unit). The Company owns 100% of the Class A Units in the Subsidiary. Motorola has the right at any time to convert its 500,000 Class B Units into 500,000 shares of the Company’s common stock. The Company also has the right to force Motorola’s conversion into shares of its common stock. Motorola is not entitled to any assets, profits or distributions from the operations of the Subsidiary. In addition, Motorola’s conversion ratio from Class B Units to shares of the Company’s common stock is fixed on a one-for-one basis and is not dependent on the performance or valuation of either the Company or the Subsidiary. The Class B Units have no redemption or call provisions and can only be converted into shares of the Company’s common stock. Management has determined that this investment does not meet the criteria for temporary equity or non-controlling interest due to the limited rights that Motorola has as a holder of Class B Units and accordingly has presented this investment as part of its permanent equity within Additional Paid-in Capital in the accompanying financial statements. On May 18, 2022, Motorola exercised its right to convert its 500,000 Class B Units into common stock. Refer to Note 14 Subsequent Events for further discussion on this conversion.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: 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 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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