Stock Compensation

12 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

On August 8, 2023 (the “Effective Date”), the Company adopted a new equity-based compensation plan known as the 2023 Stock Plan. The 2023 Stock Plan permits the Company to grant equity compensation awards to employees, consultants and non-employee directors of the Company. As of the Effective Date, no additional awards may be granted under the Anterix Inc. 2014 Stock Plan (the “2014 Stock Plan”). The 2023 Stock Plan authorizes 250,000 shares of common stock of the Company (“Shares”) for grant. Additionally, 388,151 Shares remaining for grant under the 2014 Stock Plan immediately prior to the Effective Date, Shares subject to outstanding stock awards granted under the 2014 Stock Plan that, following the Effective Date, expire or are terminated or cancelled without having been exercised or settled in full, and Shares acquired pursuant to an award subject to forfeiture or repurchase that are forfeited or repurchased by the Company for an amount not greater than the recipient’s purchase price, are issuable under the 2023 Stock Plan. As of March 31, 2024, 200,651 shares are available for future issuance and up to 181,887 shares which may be granted upon meeting certain performance levels above 100% for performance stock unit awards.

Restricted Stock and Restricted Stock Units

A summary of non-vested restricted stock activity for the year ended March 31, 2024 is as follows:


	Restricted Stock	Weighted Average Grant Day Fair Value
Non-vested restricted stock outstanding at March 31, 2023	568,662	$	47.93
Granted	183,789	33.45
Vested	(232,823)	46.89
Forfeited	(17,054)	45.38
Non-vested restricted stock outstanding at March 31, 2024	502,574	$	43.19

The following table reflects activity related to the Company’s restricted stock for the years ended March 31, 2024 and 2023:


	2024		2023
Weighted-average grant-date fair value per unit granted	$	33.45	$	47.85
Fair value of restricted stock units vested (in thousands)	$	10,918	$	12,245

Stock compensation expense related to restricted stock was approximately $9.9 million for the year ended March 31, 2024, which included $9.1 million in general and administrative expenses, $0.4 million in product development and the remainder of approximately $0.4 million included in sales and support reported on the Company’s Consolidated Statements of Operations. Stock compensation expense related to restricted stock was approximately $10.9 million for the year ended March 31, 2023, which included $9.8 million in general and administrative expenses, $0.6 million in product development and the remainder of approximately $0.5 million included in sales and support reported on the Company’s Consolidated Statements of Operations.

As of March 31, 2024 and 2023, there was $14.4 million and $18.5 million, respectively, of unvested compensation expense for the restricted stock, which is expected to be recognized over a weighted average period of 1.92 years and 2.31 years, respectively.

Performance-Based Restricted Stock Units

A summary of the performance-based restricted stock unit activity for the year ended March 31, 2024 is as follows:


	Performance Stock	Weighted Average Grant Day Fair Value
Performance stock outstanding at March 31, 2023	75,049	$	58.65
Granted	78,683	30.89
Vested	—	—
Forfeited/cancelled	—	—
Performance stock outstanding at March 31, 2024	153,732	$	44.44

The following table reflects activity related to the Company’s performance-based restricted stock units for the years ended March 31, 2024 and 2023:


	2024		2023
Weighted-average grant-date fair value per unit granted	$	30.89	$	—
Fair value of Performance stock units vested (in thousands)	$	—	$	—

Outstanding performance stock units included in the table above are shown at target. Share payout can range from 0% to 200% for performance units based on the Cumulative Spectrum Proceeds Monetized (“CSPM”) metric and 25% to 350% for performance units based on the Total Stockholders Return (“TSR Performance Units”) metrics.

Cumulative Spectrum Proceeds Monetized

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 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.

Total Stockholder Return

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 $0.8 million and $1.3 million of stock compensation expense relating to performance-based restricted stock units that are probable to vest for the years ended March 31, 2024 and 2023 respectively, included in general and administrative expenses reported on the Company’s Consolidated Statements of Operations. As of March 31, 2024 and 2023, there was approximately $0.3 million and $2.5 million, respectively, of unvested compensation expense for the outstanding performance-based restricted stock units, which is expected to be recognized over a weighted average period of 1.23 years and 1.71 years, respectively.

Stock Options

A summary of Stock Option activity for the year ended March 31, 2024 is as follows:


	Options	Weighted Average Exercise Price		Weighted Average Contractual Term	Aggregate Intrinsic Value
Options outstanding at March 31, 2023	1,402,949	$	39.12
Options granted	306,187	36.10
Options exercised	(91,250)	21.93
Options forfeited/expired	—	—
Options outstanding at March 31, 2024	1,617,886	$	39.52	6.33	$	4,400,717
Exercisable at March 31, 2024	851,854	$	34.94	4.10	$	4,400,717
Total vested or expected to vest at March 31, 2024	1,616,910	$	39.51	6.33	$	4,400,717

In addition, as of March 31, 2024, the Company has 85,000 outstanding options excluded from the table above as these options are considered contingently issued. The stock options will vest and become exercisable if the grantee is employed by the Company on March 27, 2027, unless exercisable sooner in accordance with the terms of the award agreement. These options may not be exercised until the Company’s stockholders approve an authorization of minimum number of shares of common stock sufficient to exercise this award.

The intrinsic value of stock options exercised was approximately $1.3 million and $1.2 million for the years ended March 31, 2024 and 2023 respectively.

The following assumptions were used to calculate the fair value of stock options:

Year Ended

March 31, 2024

March 31, 2023

Risk-free interest rate

3.90% to 4.22%

2.95% to 3.62%

Dividend yield

—%

Volatility

49.23% to 49.54%

50.80% to 51.60%

Expected term

5.39 years to 5.72 years

5.43 years

Forfeiture rate

—% to 3%

Weighted-average grant-date fair value per option granted

36.10

49.39

Stock compensation expense related to the amortization of the fair value of service-based stock options issued was approximately $4.8 million and $5.6 million respectively, for the years ended March 31, 2024 and 2023 which was included in general and administrative reported on the Company’s Consolidated Statements of Operations.

The weighted average fair value for the stock option awards granted for the year ended March 31, 2024 was $36.10 per share. As of March 31, 2024 and 2023, there was approximately $8.2 million and $7.4 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 1.44 years and 1.68 years, respectively.

Performance-Based Stock Options

A summary of the Performance-Based Stock Options for the year ended March 31, 2024 is as follows:


	Performance Options	Weighted Average Exercise Price
Performance Options outstanding at March 31, 2023	33,782	$	46.85
Performance Options granted	—	—
Performance Options exercised	—	—
Performance Options forfeited/expired	—	—
Performance Options outstanding at March 31, 2024	33,782	$	46.85

For the years ended March 31, 2024 and 2023, there was no stock compensation expense recognized for the 33,782 performance-based stock options. As of March 31, 2024 and 2023, there was no unvested compensation expense relating to the outstanding performance-based stock options.

Share Repurchase Program

In September 2021, the Board authorized a share repurchase program (the “2021 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 Company repurchased and subsequently retired a total of $33.9 million of the Company’s common stock under the 2021 Share Repurchase Program, including $10.7 million during fiscal year 2024. On September 21, 2023, the Board authorized the new 2023 Share Repurchase Program pursuant to which the Company may repurchase up to $250.0 million of the Company’s common stock on or before September 21, 2026. The Company repurchased and subsequently retired a total of $13.9 million of the Company’s common stock under the 2023 Share Repurchase Program during fiscal year 2024. The Company may repurchase shares of its common stock via the open market and/or privately negotiated transactions. Repurchases will be made in accordance with applicable securities laws and may be effected pursuant to Rule 10b5-1 trading plans. The manner, timing and amount of any share repurchases will be determined by the Company based on a variety of factors, including proceeds from customer contracts, the timing of which is unpredictable, as well as general business and market conditions, the Company’s capital position, and other strategic considerations. The 2023 Share Repurchase Program does not obligate the Company to repurchase any particular amount of its common stock.

The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. Excise tax accrued for the year ended March 31, 2024 was approximately $0.2 million.

The following table presents the share repurchase activity for Fiscal 2024 and Fiscal 2023 (in thousands, except per share data):


	For the years ended March 31,
	2024		2023
Number of shares repurchased and retired	736		216
Average price paid per share*	$	33.72	$	47.05
Total cost to repurchase	$	24,676	$	8,223

* Average price paid per share includes costs associated with the repurchases.

As of March 31, 2024, $236.1 million is remaining under the share repurchase program.

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 (at a price equal to $20.00 per unit). The Company owns 100% of the Class A Units in the Subsidiary. Motorola had the right at any time to convert its 500,000 Class B Units into 500,000 shares of the Company’s common stock and in May 2022, Motorola exercised such right to convert its 500,000 Class B Units into 500,000 shares of the Company’s common stock. In June 2022, the Company filed a Registration Statement on Form S-3 to register the 500,000 shares of the Company’s Common Stock held by Motorola for the resale or other disposition of such shares by Motorola (the “Resale Registration Statement”). The Resale Registration Statement was declared effective by the SEC on July 15, 2022.