| 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 June 30, 2022, and December 31, 2021, we had no stock options outstanding. At June 30, 2022, and December 31, 2021, there were 19,693,657 and 19,828,033 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 (as amended from time to time, the “Rights Agreement”) between the Company and Computershare Trust Company, N.A., as Rights Agent (the "Rights Agent"), 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 entitled the registered holder thereof, upon the Rights becoming exercisable, 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 would have 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. On June 15, 2022, the Company and the Rights Agent entered into an amendment to the Rights Agreement (the “Rights Agreement Amendment”) that accelerated the expiration of the Rights by amending the “Final Expiration Date” under the Rights Agreement to “June 15, 2022”. Accordingly, the Rights expired as of the close of business on June 15, 2022, upon the expiration of the Rights Agreement no person has any remaining rights pursuant to the Rights Agreement or the Rights. Dividends Cash distributions to stockholders, as disclosed in the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022, and 2021, 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 and paid in 2022 through the date hereof: (Dollars in thousands) Declaration Date Record Date Payment Date Per Share Amount Total Declared (1) February 16, 2022 March 16, 2022 March 30, 2022 $ 0.3125 $ 6,513 April 27, 2022 May 25, 2022 June 24, 2022 0.3125 6,357 Total $ 0.6250 $ 12,870 (1) The total declared reflects the cash dividends declared in relation to common stock, deferred stock units ("DSUs") and unvested RSUs. On July 27, 2022, our Board of Directors declared a regular quarterly cash dividend of $0.3125 per share of common stock with a record date of August 17, 2022, and a payment date of September 9, 2022. Cash dividends related to common stock of approximately $6.2 million will be paid from available cash on hand. Common Stock Repurchase Program On February 16, 2022, our Board of Directors authorized a share repurchase program for up to $10 million of the Company’s common stock. Under the repurchase program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, legal requirements and other considerations. The repurchase program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. For the six months ended June 30, 2022, we did not repurchased any common stock. Net Loss per Common Share Basic net loss per common share is computed on the basis of the weighted average common shares outstanding. Diluted net 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 (loss) per common share were as follows for the periods stated: For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands, except for share and per share amounts) 2022 2021 2022 2021 Numerator: Net income (loss) $ 1,924 $ (719) $ (5,290) $ (3,016) Denominator: Basic weighted average common shares outstanding 19,693,659 19,395,364 19,645,680 19,335,081 Diluted weighted average common shares outstanding 19,807,430 19,395,364 19,645,680 19,335,081 Basic and diluted net income (loss) per common share $ 0.10 $ (0.04) $ (0.27) $ (0.16) For the three and six months ended June 30, 2022, and 2021 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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Restricted stock units — 181,592 277,381 318,248 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. At July 28, 2020, a total of 1,699,950 shares of common stock had been reserved for issuance under the Equity Plans, including 1,600,000 shares available under the 2020 Equity Plan and 99,950 shares which, as of the stockholders approval date, remained available for issuance under the 2012 Equity Plan. No further grants will be made under the 2012 Equity Plan, although, the 2012 Equity Plan continues 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 June 30, 2022, there was an aggregate of 247,467 unvested RSUs under the 2012 Equity Plan. The following table summarizes the activities under the Equity Plans from January 1, 2022, through June 30, 2022: Activity Total equity securities available at January 1, 2022 990,129 RSU, DSU, and restricted stock awarded to eligible employees, net of forfeitures (319,418) Total equity securities available at June 30, 2022 670,711 The following table details activities with respect to outstanding RSUs, DSUs, and restricted stock under the Equity Plans for the six months ended June 30, 2022: Shares Weighted- Unvested at January 1, 2022 771,171 $ 11.24 Granted 454,429 8.65 Vested (26,850) 10.80 Forfeited (135,011) 11.27 Unvested at June 30, 2022 1,063,739 $ 10.14 Of the 1,063,739 unvested RSUs, DSUs and restricted stock outstanding at June 30, 2022, 542,227 RSUs include contingent performance requirements for vesting purposes. At June 30, 2022, there was $4.5 million of unrecognized net compensation cost related to RSUs and restricted stock, which is expected to be recognized over a weighted average period of 1.9 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 six months ended June 30, 2021, 109,171 shares of common stock were issued, with a weighted average grant date fair value of $11.35. 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 during 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 six months ended June 30, 2022, and 2021, no shares of the Company's stock were purchased. The following table summarizes the activities under the ESPP from January 1, 2022, through June 30, 2022: Activity Total ESPP equity securities available at January 1, 2022 133,184 ESPP common stock purchased by eligible employees — Total ESPP securities available at June 30, 2022 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 June 30, For the Six Months Ended June 30, (Dollars in thousands) 2022 2021 2022 2021 Performance-based RSUs $ 383 $ 182 $ 843 $ 755 Time-based RSUs, DSUs and restricted stock 578 958 1,233 1,981 Equity in lieu of salary — 618 — 1,240 ESPP — 23 — 44 Total stock-based compensation $ 961 $ 1,781 $ 2,076 $ 4,020 |
