3 unchanged sentences
Under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Exchange Act.
−Removed: Based upon that evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer have concluded that the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, were effective as of the end of the period covered by this Annual Report.
+Added: Based upon that evaluation,
+Added: our Principal Executive Officer and Principal Financial and Accounting Officer have concluded that the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, were effective as of the end of the period covered by this Annual Report.
Management’s Annual Report on Internal Control over Financial Reporting
4 unchanged sentences
Attestation Report on Internal Control over Financial Reporting
−Removed: For the Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting, see Part IV, Item 15, Exhibits and Financial Statement Schedules.
−Removed: The effectiveness of our internal control over financial reporting as of March 31, 2023 has been audited by Grant Thornton LLP, our independent registered public accounting firm, as stated in their report which appears herein.
+Added: Our management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that exempt certain smaller reporting companies, as that term is defined in Rule 12-b2 of the Exchange Act, from such requirement.
Changes in Internal Control over Financial Reporting
3 unchanged sentences
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.
−Removed: The design of a control system must reflect the fact that there are resource constraints and that
−Removed: the benefits of controls must be considered relative to their costs.
+Added: The design of a control system must reflect the fact that there are resource constraints and that the benefits of controls must be considered relative to their costs.
Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
5 unchanged sentences
OTHER INFORMATION
+Added: Director and Executive Officer Trading
+Added: During the three months ended March 31, 2024, no director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).
DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
4 unchanged sentences
EXECUTIVE COMPENSATION
−Removed: Information relating to our executive compensation will be included in the proxy statement for our 2023 annual meeting of our stockholders, expected to be filed within 120 days of the end of our fiscal year, which is incorporated herein by reference.
+Added: Information relating to our executive compensation will be included in the proxy statement for our 2024 annual meeting of our stockholders, expected to be filed within 120 days of the end of our fiscal year.
+Added: This information (except for the disclosure under the heading “Pay-Verse-Performance”) is incorporated herein by reference.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
67 unchanged sentences
10.23+ Executive Form of Time-Based Restricted Stock Award Agreement and Grant Notice under the 2014 Stock Plan (filed as Exhibit 10.5 to the Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, filed with the SEC on February 16, 2016 and incorporated herein by reference).
−Removed: 10.24+ Continued Service, Consulting and Separation Agreement, dated April 23, 2018, by and between the Company and John Pescatore (filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 23, 2018 and incorporated herein by reference (File No.
−Removed: 10.25+ Consulting Agreement dated April 23, 2018, by and between the Company and John Pescatore (filed as Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on April 23, 2018 and incorporated herein by reference (File No.
Transition Agreement between the PDV Spectrum Holding Company, LLC and Association of American Railroads, dated January 28, 2020 (filed as Exhibit 10.35 to the Annual Report on Form 10-K for the year ended March 31, 2020, filed with the SEC on May 28, 2020 and incorporated herein by reference (File No.
10.26 Amendment 2, dated August 4, 2020, to the IP Assignment, Software Support, and Development Services Agreement, dated as of January 7, 2019, by and between the Company and TeamConnect, LLC (filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on August 6, 2020 and incorporated herein by reference (File No.
−Removed: 10.28+ Independent Contractor Services Agreement, dated August 27, 2020, by and between the Company and Brian D.
−Removed: McAuley (filed as Exhibit 10.1 to the Current Report on Form 8-K, filed with the SEC on September 2, 2020 and incorporated herein by reference (File No.
10.27+ Senior Executive Form of Performance-Based Restricted Stock Units Agreement and Grant Notice (2021 Short-Term Incentive Plan) under the 2014 Stock Plan (filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 16, 2020 and incorporated herein by reference (File No.
2 unchanged sentences
1 to 2014 Stock Plan, dated June 14, 2021 (filed as exhibit 10.40 to the Annual Report on Form 10-K for the year ended March 31, 2021, filed with the SEC on June 15, 2021 and incorporated herein by reference (File No.
−Removed: 21.1 Subsidiaries of the Registrant (filed as Exhibit 21.1 to the Annual Report on Form 10-K for the fiscal year ended March 31, 2017, filed with the SEC on June 6, 2017 and incorporated herein by reference (File No.
+Added: 10.30+ Anterix Inc.
+Added: 2023 Stock Plan (filed as Exhibit B of the Registrant’s Definitive proxy statement, filed with the SEC on July 14, 2023 and incorporated herein by reference (File No.
+Added: 21.1# Subsidiaries of Registrant
23.1# Consent of Grant Thornton LLP Independent Registered Public Accounting Firm relating to the Consolidated Financial Statements of the Company, dated June 2 6 , 202 4 .
4 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+Added: 97.1# Executive Officer Compensation Recoupment Policy
101.INS# XBRL Instance Document
20 unchanged sentences
Signature Title Date
−Removed: /s/ Morgan E.
−Removed: O’Brien Executive Chairman of the Board June 14, 2023
/s/ Robert H.
2 unchanged sentences
Gray Chief Financial Officer (Principal Financial and Accounting Officer) June 26, 2024
+Added: /s/ Morgan E.
+Added: O’Brien Executive Chairman of the Board June 26, 2024
+Added: /s/ Thomas Kuhn Vice Chairman of the Board June 26, 2024
/s/ Singleton B.
6 unchanged sentences
Gregory Pratt
−Removed: /s/ Paul Saleh Director June 14, 2023
/s/ Mahvash Yazdi Director June 26, 2024
14 unchanged sentences
We have audited the accompanying consolidated balance sheets of Anterix Inc.
−Removed: (a Delaware corporation) and subsidiaries (the “Company”) as of March 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended March 31, 2023, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated June 14, 2023 expressed an unqualified opinion.
+Added: (a Delaware corporation) and subsidiaries (the “Company”) as of March 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended March 31, 2024, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for opinion
1 unchanged sentence
Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
1 unchanged sentence
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
+Added: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
+Added: Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
2 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical audit matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Wireless Licenses – Unit of accounting for impairment testing purposes under ASC 350 Intangibles – Goodwill and Other (“ASC 350”)
−Removed: Management disaggregates the Company’s wireless licenses based on geographical markets for impairment testing purposes.
−Removed: Management makes certain assumptions as it relates to the expected use and marketability of the wireless licenses in order to determine the appropriate unit of accounting under ASC 350.
−Removed: We identified the determination and change of the unit of accounting for purposes of testing impairment of the Company’s wireless licenses as a critical audit matter.
−Removed: The principal considerations for our determination that the unit of accounting used to test indefinite-lived intangible assets for impairment is a critical audit matter includes the judgement involved in identifying the unit of accounting under ASC 350.
−Removed: Accordingly, there is a risk that the unit of accounting is not properly identified in accordance with ASC 350.
−Removed: These considerations heightened the complexity surrounding the nature and execution of audit procedures designed to respond to this risk.
−Removed: Our audit procedures related to the Company’s determination of the unit of accounting for its wireless licenses included the following, among others:
−Removed: • We evaluated the reasonableness of management’s assessment and conclusions as it related to the unit of accounting determination of the Company’s wireless licenses under ASC 350.
−Removed: • We tested management’s process of identifying key regional markets based on the demonstrated intent of potential customers coupled with the Company’s ability to provide broadband solutions in targeted markets.
−Removed: Specifically, we:
−Removed: ◦ Obtained supporting documentation to test the attributes for a sample of potential customers;
−Removed: ◦ Made inquiries of staff members outside of the accounting department to spectrum operations department;
−Removed: ◦ Considered how management determined the disaggregation of potential customers.
+Added: Critical audit matters
+Added: Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
2 unchanged sentences
June 26, 2024
−Removed: Report of Independent Registered Public Accounting Firm
−Removed: Board of Directors and Stockholders
−Removed: Opinion on internal control over financial reporting
−Removed: We have audited the internal control over financial reporting Anterix Inc., a Delaware corporation and subsidiaries (the “Company”) as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
−Removed: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended March 31, 2023, and our report dated June 14, 2023 expressed an unqualified opinion on those financial statements.
−Removed: Basis for opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting (“Management’s Report”).
−Removed: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: Definition and limitations of internal control over financial reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
−Removed: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: /s/ GRANT THORNTON LLP
−Removed: New York, New York
−Removed: June 14, 2023
Consolidated Balance Sheets
4 unchanged sentences
Cash and cash equivalents $ 60,578 $ 43,182
+Added: Spectrum receivable costs 8,521 13,834
Prepaid expenses and other current assets 3,912 2,443
Total current assets 73,011 59,459
+Added: Escrow deposits 7,546 —
Property and equipment, net 2,062 3,606
1 unchanged sentence
Intangible assets 216,743 202,044
+Added: Deferred broadband costs 19,772 8,853
Other assets 1,328 1,225
11 unchanged sentences
Deferred revenue 115,742 57,990
+Added: Deferred gain on sale of intangible assets 4,911 —
Deferred income tax 6,281 5,440
13 unchanged sentences
(in thousands, except share and per share data)
−Removed: 2023 2022 2021
−Removed: Operating revenues
−Removed: Service revenue $ — $ — $ 192
Spectrum revenue $ 4,191 $ 1,919
−Removed: Total operating revenues 1,919 1,084 921
Operating expenses
−Removed: Direct cost of revenue (exclusive of depreciation and amortization) — 5 1,606
General and administrative 44,423 45,177
2 unchanged sentences
Depreciation and amortization 844 1,420
−Removed: Impairment of long-lived assets — — 85
Operating expenses 56,657 56,769
−Removed: (Gain)/loss from disposal of intangible assets, net ( 38,399 ) ( 11,209 ) 3,849
+Added: Gain from disposal of intangible assets, net ( 35,024 ) ( 38,399 )
+Added: Gain on sale of intangible assets, net ( 7,364 ) —
Loss from disposal of long-lived assets, net 44 10
2 unchanged sentences
Other income 233 266
−Removed: Loss on equity method investment — — ( 39 )
Loss before income taxes ( 7,515 ) ( 15,055 )
11 unchanged sentences
deficit Total
−Removed: Balance at April 1, 2020 17,185 $ 2 $ 450,978 $ ( 205,914 ) $ 245,066
−Removed: Equity based compensation — — 16,121 — 16,121
−Removed: Restricted shares issued 249 — — — —
−Removed: Stock option exercises 208 — 4,218 — 4,218
−Removed: Equity payment of prior year accrued employee related expenses 28 — 1,537 — 1,537
−Removed: Net loss — — — ( 54,434 ) ( 54,434 )
Balance at March 31, 2022 18,378 $ 2 $ 500,125 $ ( 313,829 ) $ 186,298
−Removed: Equity based compensation — — 13,725 — 13,725
+Added: Stock compensation expense — — 17,874 — 17,874
Restricted shares issued 219 — — — —
Stock option exercises 77 — 1,726 — 1,726
+Added: Motorola Shares 500 — — — —
Shares withheld for taxes ( 36 ) — ( 1,565 ) — ( 1,565 )
2 unchanged sentences
Balance at March 31, 2023 18,922 2 518,160 ( 338,369 ) 179,793
−Removed: Equity based compensation — — 17,874 — 17,874
+Added: Stock compensation expense — — 15,507 — 15,507
Restricted shares issued 247 — — — —
Stock option exercises 59 — 777 — 777
−Removed: Motorola Shares 500 — — — —
Shares withheld for taxes ( 39 ) — ( 1,241 ) — ( 1,241 )
2 unchanged sentences
Balance at March 31, 2024 18,453 $ 2 $ 533,203 $ ( 372,173 ) $ 161,032
−Removed: * Includes approximately $ 1.0 million, or 20,132 shares, received associated with a non-cash exercise of stock options and subsequent retirement.
−Removed: See Note 10 Stock Acquisition Rights, Stock Options and Warrants and Note 11 Supplemental Disclosure of Cash Flow Information for further discussion and disclosure.
See accompanying notes to consolidated financial statements.
2 unchanged sentences
(in thousands)
−Removed: 2023 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
2 unchanged sentences
Depreciation and amortization 844 1,420
−Removed: Non-cash compensation expense attributable to stock awards 17,874 13,625 15,925
+Added: Stock compensation expense 15,507 17,874
Deferred income taxes 841 1,248
−Removed: (Gain)/loss from disposal of intangible assets, net ( 38,399 ) ( 11,209 ) 3,849
+Added: Right of use assets 1,512 676
+Added: Gain from disposal of intangible assets, net ( 35,024 ) ( 38,399 )
+Added: Gain on sale of intangible assets, net ( 7,364 ) —
Loss from disposal of long-lived assets, net 44 10
−Removed: Impairment of long-lived assets — — 85
−Removed: Loss on equity method investment — — 39
Changes in operating assets and liabilities
−Removed: Accounts receivable — 4 57
Prepaid expenses and other assets ( 1,171 ) 464
−Removed: Right of use assets 676 1,053 1,407
Accounts payable and accrued expenses 1,936 101
Due to related parties ( 533 ) 413
−Removed: Restructuring reserve — — ( 636 )
Operating lease liabilities ( 1,924 ) ( 1,042 )
2 unchanged sentences
Other liabilities — ( 28 )
−Removed: Net cash (used in) provided by operating activities ( 27,250 ) 17,913 ( 9,959 )
+Added: Net cash provided by (used in) operating activities 41,993 ( 27,250 )
CASH FLOWS FROM INVESTING ACTIVITIES
−Removed: Purchases of intangible assets, including refundable deposits ( 25,004 ) ( 26,358 ) ( 13,944 )
+Added: Purchases of intangible assets, including refundable deposits, retuning costs and swaps ( 17,031 ) ( 25,004 )
+Added: Proceeds from sale of spectrum 25,427 —
Purchases of equipment ( 307 ) ( 2,126 )
−Removed: Net cash used in investing activities ( 27,130 ) ( 27,411 ) ( 14,174 )
+Added: Net cash provided by (used in) investing activities 8,089 ( 27,130 )
CASH FLOWS FROM FINANCING ACTIVITIES
2 unchanged sentences
Payments of withholding tax on net issuance of restricted stock ( 1,241 ) ( 1,565 )
−Removed: Net cash (used in) provided by financing activities ( 8,062 ) ( 2,416 ) 4,218
−Removed: Net change in cash and cash equivalents ( 62,442 ) ( 11,914 ) ( 19,915 )
+Added: Net cash used in financing activities ( 25,140 ) ( 8,062 )
+Added: Net change in cash and cash equivalents and restricted cash 24,942 ( 62,442 )
+Added: CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
+Added: Cash and cash equivalents and restricted cash at beginning of the year 43,182 105,624
+Added: Cash and cash equivalents and restricted cash at end of the year $ 68,124 $ 43,182
+Added: The following tables provide a reconciliation of cash and cash equivalents and restricted cash reported on the Consolidated Balance Sheets that sum to the total of the same such amounts on the Consolidated Statements of Cash Flows:
+Added: March 31, 2024 March 31, 2023
Cash and cash equivalents $ 60,578 $ 43,182
−Removed: Beginning of the year 105,624 117,538 137,453
−Removed: End of the year $ 43,182 $ 105,624 $ 117,538
+Added: Escrow deposits 7,546 —
+Added: Total cash and cash equivalents and restricted cash $ 68,124 $ 43,182
See accompanying notes to consolidated financial statements.
1 unchanged sentence
Nature of Operations
−Removed: (the “Company”) is a wireless communications company focused on commercializing its spectrum assets to enable its targeted utility and critical infrastructure customers to deploy private broadband networks and on offering innovative broadband solutions to the same target customers.
−Removed: The Company is the largest holder of licensed spectrum in the 900 MHz band (896 - 901 / 935 - 940 MHz) with nationwide coverage throughout the contiguous United States, Hawaii, Alaska and Puerto Rico.
−Removed: On May 13, 2020, the FCC approved the Report and Order (the “Report and Order”) to modernize and realign the 900 MHz band to increase its usability and capacity by allowing it to be utilized for the deployment of broadband networks, technologies and solutions.
−Removed: The Report and Order was published in the Federal Register on July 16, 2020, and became effective on August 17, 2020.
−Removed: The Company is now engaged in qualifying for and securing broadband licenses from the FCC.
−Removed: At the same time, the Company is pursuing opportunities to monetize the broadband spectrum it secures to its targeted utility and critical infrastructure customers.
+Added: Anterix Inc ( the “Company”) is the utility industry’s partner, empowering enhanced visibility, control and security for a modern grid.
+Added: The Company’s vision is to deliver secure, scalable solutions enabled by private wireless broadband connectivity, for the benefit of utilities and the communities that they serve.
+Added: As the largest holder of licensed spectrum in the 900 MHz band (896-901/935-940 MHz) throughout the contiguous United States, plus Hawaii, Alaska and Puerto Rico, the Company is uniquely positioned to deliver solutions that support secure, resilient and customer-controlled operations.
+Added: The Company is focused on commercializing its spectrum assets and expanding the benefits and solutions it offers to enable the Company’s targeted utility and critical infrastructure customers to deploy private broadband networks.
The Company was originally incorporated in California in 1997 and reincorporated in Delaware in 2014.
5 unchanged sentences
Business Developments
−Removed: On October 28, 2022, the Company entered into an agreement with Xcel Energy Services Inc.
−Removed: (“Xcel Energy”) providing Xcel Energy dedicated long-term usage of the Company’s 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states (the “Xcel Energy Agreement”).
−Removed: The Xcel Energy Agreement also provides Xcel Energy an option to extend the agreement for two 10-year terms for additional payments.
−Removed: The Xcel Energy Agreement allows Xcel Energy to deploy a PLTE network to support its grid modernization initiatives for the benefit of its approximately 3.7 million electricity customers and 2.1 million natural gas customers.
−Removed: The scheduled prepayments for the 20-year initial term of the Xcel Energy Agreement total $ 80.0 million, of which $ 8.0 million was received by the Company in December 2022.
−Removed: See Note 3 Revenue for further discussion on the Xcel Energy Agreement.
−Removed: In September 2021, the Company entered into a long-term lease agreement of 900 MHz Broadband Spectrum with Evergy, Inc.
−Removed: (“Evergy”), (the “Evergy Agreement”).
−Removed: The Evergy service territories covered by the Evergy Agreement are in Kansas and Missouri with a population of approximately 3.9 million people.
−Removed: The Evergy Agreement is for an initial term of 20 years with two 10-year renewal options for additional payments.
−Removed: The Company received full prepayment of $ 30.2 million for the initial 20-year term in October 2021.
−Removed: During the year ended March 31, 2023, the Company delivered to Evergy the 1.4 x 1.4 cleared 900 MHz Broadband Spectrum and the associated broadband licenses for 81 counties.
+Added: TECO Agreement
+Added: In November 2023, the Company entered into an agreement with Tampa Electric Company (“TECO”) to provide TECO the use of the Company’s 900 MHz Broadband Spectrum for a term of 20 years throughout TECO’s service territory in West Central Florida (the “TECO Agreement”).
+Added: The TECO Agreement also provides TECO an option to extend the agreement for two 10-year terms for additional payments.
+Added: The TECO Agreement, which covers an approximately 2,000 -square-mile service territory in West Central Florida, is expected to enable TECO to deploy a PLTE network providing critical broadband communications capabilities in support of its initiatives.
+Added: The scheduled prepayments for the 20-year initial term of the TECO Agreement total $ 34.5 million, of which $ 6.9 million was received by the Company in December 2023.
+Added: See Note 3 Revenue for further discussion on the TECO Agreement.
+Added: LCRA Agreement
+Added: In April 2023, the Company entered into an agreement with Lower Colorado River Authority (“LCRA”) to sell 900 MHz Broadband Spectrum covering 68 counties and more than 30 cities in LCRA’s wholesale electric, transmission, and water service area (the “LCRA Agreement”) for total payments of $ 30.0 million plus the contribution of select LCRA 900 MHz narrowband spectrum.
+Added: Total consideration of $ 30.0 million is to be paid through fiscal year 2026 pursuant to the terms of the LCRA Agreement.
+Added: During the year ended March 31, 2024, the Company received an initial $ 15.0 million payment, of which $ 7.5 million was deposited in an escrow account (refer to Note 4 Escrow Deposits for further discussion).
+Added: See Note 13 Contingencies and Guaranty for further discussion on the LCRA Agreement.
+Added: Xcel Energy Agreement
+Added: In October 2022, the Company entered into an agreement with Xcel Energy Services Inc.
+Added: (“Xcel Energy”) providing Xcel Energy dedicated long-term usage of the Company’s 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states (the “Xcel Energy Agreement”) for a total of $ 80.0 million, of which $ 8.0 million was received by the Company in December 2022.
+Added: In July 2023 and November 2023, the Company delivered the cleared 900 MHz Broadband Spectrum and the associated broadband leases and received milestone payments of $ 21.2 million in each period.
+Added: During the year ended March 31, 2024, the Company delivered the cleared 900 MHz Broadband Spectrum and the associated broadband leases and received a milestone payment of $ 16.8 million in January 2024.
The revenue recognized for the year ended March 31, 2024, was approximately $ 1.9 million.
−Removed: See Note 3 Revenue for further discussion on the Evergy Agreement.
−Removed: In February 2021, the Company entered into an agreement with San Diego Gas & Electric Company, a subsidiary of Sempra Energy (“SDG&E”), to provide 900 MHz Broadband Spectrum throughout SDG&E’s California service territory, including San Diego and Imperial Counties and portions of Orange County for a total payment of $ 50.0 million.
−Removed: The total payment of $ 50.0 million is comprised of an initial payment of $ 20.0 million received in February 2021 and the remaining $ 30.0 million payment, which is due through fiscal year 2024 as the Company delivers the associated broadband licenses to SDG&E and the relevant cleared 900 MHz Broadband Spectrum.
−Removed: In September 2022, the Company delivered to SDG&E 1.4 x 1.4 cleared 900 MHz Broadband Spectrum and the associated broadband license related to Imperial County and received a milestone payment of $ 0.2 million.
−Removed: See Note 12 Contingencies for further discussion.
−Removed: In May 2022, the Company issued Motorola Solutions, Inc.
−Removed: (“Motorola”) 500,000 shares of its common stock (the “Shares”).
−Removed: Motorola received the Shares by electing to convert 500,000 Class B Units (the “Units”) it held in the Company’s subsidiary, PDV Spectrum Holding Company, LLC (the “Subsidiary”).
−Removed: Motorola acquired the Units in September 2014 in connection with a Spectrum Lease Agreement between Motorola and the Subsidiary (the “2014 Motorola Spectrum Agreement”).
−Removed: Under the 2014 Motorola Spectrum Agreement, Motorola leased a portion of our narrowband spectrum, which was held by the Subsidiary, in consideration for an upfront, fully-paid leasing fee of $ 7.5 million and a $ 10.0 million investment in the Units.
−Removed: Motorola had the right at any time to convert its Units into the Shares, representing a conversion price of $ 20.00 per share.
+Added: SDG&E Agreement
+Added: In February 2021, the Company entered into an agreement with San Diego Gas & Electric Company, a subsidiary of Sempra Energy (“SDG&E”), to sell 900 MHz Broadband Spectrum throughout SDG&E’s California service territory, including San Diego and Imperial Counties and portions of Orange County (the “SDG&E Agreement”) for a total payment of $ 50.0 million.
+Added: The total payment of $ 50.0 million is comprised of an initial payment of $ 20.0 million received in February 2021 and the remaining payments which are due as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to SDG&E.
+Added: In September 2023, the Company transferred to SDG&E the San Diego County broadband license and received a milestone payment of $ 25.2 million net of delivery delay adjustments of $ 1.1 million.
+Added: In December 2023, the Company transferred to SDG&E the remainder of the cleared 900 MHz Broadband Spectrum and the associated broadband license related to Imperial County and received a milestone payment of $ 0.2 million.
+Added: See Note 6 Intangible Assets for further discussion.
+Added: 2023 Stock Plan
+Added: On August 8, 2023, the Company adopted a new equity-based compensation plan known as the Anterix Inc.
+Added: 2023 Stock Plan (the “2023 Stock Plan”).
+Added: The 2023 Stock Plan permits the Company to grant equity compensation awards to employees, consultants and non-employee directors of the Company.
+Added: See Note 11 Stock Compensation for further discussion.
+Added: 2023 Share Repurchase Program
+Added: On September 21, 2023, the Board of Directors (the “Board”) authorized a new share repurchase program (the “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.
+Added: See Note 11 Stock Compensation for further discussion.
Summary of Significant Accounting Policies
8 unchanged sentences
All significant intercompany accounts and transactions have been eliminated in consolidation.
−Removed: Cash and Cash Equivalents
+Added: Cash and Cash Equivalents and Restricted Cash
All highly liquid investments with maturities of three months or less at the time of purchase are considered cash equivalents.
Cash equivalents are stated at cost, which approximates the quoted market value and includes amounts held in money market funds.
−Removed: Concentrations of Credit Risk
+Added: Restricted cash includes amounts classified as escrow deposits.
+Added: Concentration of Credit Risk and Significant Customers
Financial instruments which potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents.
−Removed: The cash balance at times may exceed federally insured limits, however, the Company places its cash and temporary cash investments with financial institutions for which credit loss is not anticipated.
+Added: The Company places its cash and temporary cash investments with financial institutions for which credit loss is not anticipated.
As of March 31, 2024 and 2023, substantially all of the Company’s cash balance exceeded the federally insured limits.
−Removed: For the year ended March 31, 2023, the Company’s operating revenue was entirely from Motorola, Ameren, and Evergy as discussed in Note 3 Revenue .
−Removed: For the year ended March 31, 2022, the Company’s operating revenue was entirely from Motorola and Ameren as discussed in Note 3 Revenue .
−Removed: For the year ended March 31, 2021, the Company had one Tier 1 domestic carrier and one reseller that accounted for approximately 17 % of total operating revenues, respectively.
+Added: During the year ended March 31, 2024 and 2023, each of the Company’s customers accounted for greater than 10% of total revenue.
As of March 31, 2024 and March 31, 2023, the Company does not have an outstanding accounts receivable balance.
−Removed: Allowance for Doubtful Accounts
−Removed: An allowance for uncollectible receivables is estimated, as required, based on a combination of write-off history, aging analysis and any specific known troubled accounts.
−Removed: The Company reviews its allowance for uncollectible receivables on a quarterly basis.
+Added: Allowance for Credit Losses
+Added: An allowance for credit losses is estimated, as required, based on a combination of write-off history, aging analysis and forecasts on the collectability of accounts receivable.
+Added: The Company reviews its allowance for credit losses on a quarterly basis.
Past due balances meeting specific criteria are reviewed individually for collectability.
−Removed: In connection with the Company’s adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), as discussed below, the Company will continue to monitor its credit loss exposure based on the write-off history, current conditions and future forecasts on the collectability of the accounts.
Property and Equipment
8 unchanged sentences
The Company records a liability for an asset retirement obligation and the associated asset retirement cost at the time the underlying asset is acquired and put into service.
−Removed: Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation, if any.
+Added: Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time and changes in the estimated future
+Added: cash flows underlying the obligation, if any.
Over time, the liability is accreted to its present value and the capitalized cost is depreciated over the estimated useful life of the asset.
3 unchanged sentences
Upon settlement of the obligation, any difference between the cost to retire the asset and the recorded liability is recognized on the Company’s Consolidated Statements of Operations.
−Removed: As of March 31, 2023, the Company settled approximately $ 0.1 million of its obligation to restore the leased premises to its original condition and revised its asset retirement obligations accrual by $ 6,000 on estimated future cash flows.
−Removed: As of March 31, 2022, the Company settled approximately $ 0.1 million of its obligation to restore the leased premises to its original condition and revised its asset retirement obligations accrual by $ 17,000 on estimated future cash flows.
+Added: As of March 31, 2024, the Company did not settle any of its obligations to restore the leased premises to its original condition and increased its asset retirement obligations accrual by $ 0.1 million based on estimated future cash flows.
+Added: As of March 31, 2023, the Company settled approximately $ 0.1 million of its obligation to restore the leased premises to its original condition and decreased its asset retirement obligations accrual by $ 6 thousand based on estimated future cash flows.
Changes in the liability for the asset retirement obligations for the years ended March 31, 2024 and 2023 are summarized below (in thousands):
14 unchanged sentences
Evaluation of Indefinite-Lived Intangible Assets for Impairment
−Removed: Historically, wireless licenses were tested for impairment on an aggregate basis, consistent with the Company’s dispatch business at a national level.
−Removed: Effective for the year ended March 31, 2021 (“Fiscal 2021”), the Company determined that its unit of accounting should be based on geographic markets and deal markets.
+Added: The Company determined that its unit of accounting should be based on geographic markets and deal markets.
Unit of accounting of wireless licenses not associated with closed deals is based on geographic markets.
5 unchanged sentences
If the estimated fair value of the spectrum licenses is lower than their carrying amount, an impairment loss is recognized.
−Removed: The Company will use a market-based approach to estimate fair value for impairment testing purposes.
+Added: The Company will use a market-based approach to estimate fair value for impairment testing purposes except for deals that were realized as of the valuation date, for which a transaction specific market approach will be used.
The valuation approach used to estimate fair value for the purpose of impairment testing requires management to use complex assumptions and estimates such as population, discount rates, industry and market considerations, long-term market equity risk, as well as other factors.
−Removed: These assumptions and estimates depend on our ability to accurately predict forward looking assumptions including successfully applying for broadband licenses, commercializing our 900 MHz Broadband Spectrum and properly estimating favorable deal terms over the life of the contract.
+Added: These assumptions and estimates depend on the Company’s ability to accurately predict forward looking assumptions including successfully applying for broadband licenses, commercializing the Company’s 900 MHz Broadband Spectrum and properly estimating favorable deal terms over the life of the contract.
For impairment testing, estimated fair value is determined using a market-based approach primarily using the 600 MHz auction price.
−Removed: As noted in the Report and Order, the FCC will use the spectrum price based on the average price paid in the FCC’s 600 MHz auction to calculate the Anti-Windfall Payments.
−Removed: During the year ended March 31, 2023 (“Fiscal 2023”), the Company shifted from a probability analysis approach to a more detailed approach with measurable qualitative metrics.
+Added: The FCC will use
+Added: the spectrum price based on the average price paid in the FCC’s 600 MHz auction to calculate the Anti-Windfall Payments, a payment to the U.S.
+Added: Treasury from a 900 MHz broadband applicant, if the applicant relinquishes less than 6 MHz (or 240 channels) of spectrum for any full or fractional MHz less than 6 MHz.
+Added: The estimated fair value of realized deals is determined using a transaction specific market approach based on the deal specific terms and adjusted for the Company’s required rate of return and present value taking into consideration the timing of payments.
+Added: During the years ended March 31, 2024 and 2023, the Company performed a step one quantitative approach impairment test as of January 1, 2024 and January 1, 2023, respectively, to determine if the fair value of the combined licenses by the associated geographical or deal market exceeds the carrying value for each geographical or deal market.
+Added: During March 31, 2023 (“Fiscal 2023”), the Company shifted from a probability analysis approach to a more detailed approach with measurable qualitative metrics.
The new approach, Demonstrated Intent (“DI”), determines how likely a deal is to close based on certain qualitative factors, like applying for an experimental license, entering into a request for proposal, joining certain utility board or publicly backing 900 MHz Broadband Spectrum and its application.
−Removed: As a result, the Company will utilize the DI scores on a go-forward basis for our impairment analysis.
−Removed: As of and for the year ended March 31, 2023, the Company performed a step one quantitative approach impairment test as of January 1, 2023, to determine if the fair value of the combined licenses by the associated geographical or deal market exceeds the carrying value for each geographical or deal market.
−Removed: During the year ended March 31, 2022 (“Fiscal 2022”), the Company changed the date of its annual impairment assessment from March 31, its fiscal year-end, to January 1.
−Removed: For the year ended March 31, 2022, the Company performed a step zero qualitative approach impairment test as of January 1, 2022, for each geographical market to test indefinite-lived intangible assets for impairment by first assessing qualitative factors to determine whether it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform quantitative impairment testing.
−Removed: As a result of the step zero test, the Company was not required to perform a step one analysis.
−Removed: For the year ended March 31, 2021, the Company performed a step one quantitative impairment test to determine if the fair value of the combined licenses by the associated geographical or deal market exceeds the carrying value for each geographical or deal market.
−Removed: Based on the results of the impairment tests, there were no impairment charges recorded during the years ended March 31, 2023, 2022 and 2021.
+Added: As a result, the Company will continue to utilize the DI scores on a go-forward basis for the Company’s impairment analysis.
+Added: Based on the results of the impairment test, there were no impairment charges recorded during the year ended March 31, 2024 and 2023.
Exchanges of Intangible Assets
2 unchanged sentences
The licenses are exchanged or cancelled at their carrying value and adjusted for any gain or loss recognized.
−Removed: Upon receipt of FCC approval, the spectrum licenses acquired as part of an exchange of nonmonetary assets are recorded at their new accounting basis, for those acquired from the FCC, or fair value for those acquired from third party, (collectively, the “acquired basis”).
−Removed: The difference between the acquired basis of the spectrum licenses obtained, carrying value of the spectrum licenses transferred and cash paid, if any, is recognized as a gain or loss on disposal of spectrum licenses reported separately on the Company’s Consolidated Statements of Operations.
−Removed: The acquired basis of spectrum licenses is based on information for which there is little or no observable market data.
−Removed: If the transaction lacks commercial substance or the acquired basis is not measurable, the acquired spectrum licenses are recorded at the carrying value of the spectrum assets transferred, cancelled or exchanged.
−Removed: For the purpose of the valuation of broadband licenses received in connection with nonmonetary exchanges, the Company utilizes the 600 MHz Auction price per MHzPop, as defined in the Report and Order, which is considered the accounting basis for the new broadband licenses.
+Added: Upon receipt of FCC approval, the spectrum licenses acquired as part of an exchange of nonmonetary assets are recorded at their fair value as of the exchange date.
+Added: The difference between the fair value of the spectrum licenses obtained, carrying value of the spectrum licenses transferred and cash paid, if any, is recognized as a gain or loss on disposal of spectrum licenses reported separately on the Company’s Consolidated Statements of Operations.
+Added: For the purpose of the valuation of broadband licenses received in connection with nonmonetary exchanges, the Company utilizes the 600 MHz Auction price per MHzPop, which represents level two of the fair value hierarchy.
+Added: If the transaction lacks commercial substance or the fair value of the acquired asset cannot be determined, the acquired spectrum licenses are recorded at the carrying value of the spectrum assets transferred, cancelled or exchanged.
See Note 6 Intangible Assets for a discussion on the Company’s spectrum exchanges during the years ended March 31, 2024 and 2023.
+Added: Spectrum Receivable Costs and Deferred Broadband Costs
+Added: Spectrum receivable costs represent prepayments made to acquire, retune or swap narrowband wireless licenses for cash consideration.
+Added: The initial deposits to incumbents are recorded as spectrum receivable costs on the Company’s Consolidated Balance Sheets and are refundable if the FCC does not approve the sale, retuning or swap of the spectrum.
+Added: Upon closing the associated deal, the costs are transferred to intangible assets on the Company’s Consolidated Balance Sheets for purchases of licenses and to deferred broadband costs on the Company’s Consolidated Balance Sheets for deals related to swap or retuning of narrowband licenses.
+Added: In fiscal year 2024, the total cost transferred from spectrum receivable costs to intangible assets and deferred broadband costs amounted to $ 9.1 million and $ 10.9 million, respectively.
+Added: The Company will review the assets on a periodic basis to determine if an impairment exists.
+Added: If it is determined that there is an impairment, the Company will expense the assets to the extent of the potential loss.
+Added: Upon exchanging the Company’s narrowband licenses for broadband licenses, the Company will transfer the deferred broadband costs to intangible assets.
Long-Lived Assets and Right of Use Assets Impairment
−Removed: The Company evaluates long-lived assets, including right of use assets, other than intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.
+Added: The Company evaluates long-lived assets and right of use assets, other than intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.
Asset groups are determined at the lowest level for which identifiable cash flows are largely independent of cash flows of other groups of assets and liabilities.
When the carrying amount of the asset groups are not recoverable and exceeds its fair value, an impairment loss is recognized equal to the excess of the asset group’s carrying value over the estimated fair value.
−Removed: There were no impairment charges during the years ended March 31, 2023 and March 31, 2022.
−Removed: During the year ended March 31, 2021, the Company recorded an $ 85,000 non-cash impairment charge for long-lived assets consisting of network site and equipment costs to reduce the carrying values to zero .
+Added: There were no impairment charges during the years ended March 31, 2024 and 2023.
Fair Value Measurement
1 unchanged sentence
Level 1 fair value derived inputs utilize quoted prices in active markets for identical assets or liabilities.
−Removed: Level 2 fair value derived inputs are based on quoted prices for similar assets and liabilities in active markets or based on inputs other than quoted prices for the assets or liability that are either directly or indirectly observable.
+Added: Level 2 fair value derived inputs are based on quoted prices for similar assets and liabilities in active markets or
+Added: based on inputs other than quoted prices for the assets or liability that are either directly or indirectly observable.
Level 3 fair value derived inputs are unobservable for the asset or liability as a result of little, if any, market activity for the asset or liability.
4 unchanged sentences
Financial Instruments
−Removed: Financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at cost, which management believes approximates fair value because of the short-term maturity of these instruments.
+Added: The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, escrow deposit, accounts payable, accrued expenses and contingent liability approximate their fair values.
Leases in which the Company is the lessee are comprised of corporate office space and tower space.
Substantially all of the leases are classified as operating leases.
−Removed: The Company is obligated under certain lease agreements for office space with lease terms expiring on various dates from October 31, 2023 through June 30, 2027, which includes lease extensions ranging from three to ten-years for its corporate headquarters.
+Added: The Company is obligated under certain lease agreements for office space with lease terms expiring on various dates from October 31, 2024 through January 31, 2029, which includes lease extensions ranging from three to ten-years for its corporate headquarters.
The Company entered into multiple lease agreements for tower space related to its spectrum holdings.
−Removed: The lease expiration dates range from May 31, 2023 to August 31, 2029.
+Added: The lease expiration dates range from April 30, 2024 to March 21, 2031.
In accordance with Financial Accounting Standards Board, (“FASB”) Accounting Standards Codification, Leases (“ASC 842”), the Company recognized right of use (“ROU”) assets and corresponding lease liabilities on the Company’s Consolidated Balance Sheets for its operating lease agreements with contractual terms greater than 12 months.
2 unchanged sentences
Revenue Recognition
−Removed: Revenues are recognized when a contract with a customer exists and control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services and the identified performance obligation has been satisfied.
+Added: Revenues are recognized when a contract with a customer exists and control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification, Revenue from Contracts with Customers (“ASC 606”).
7 unchanged sentences
The nature of the licenses provide the benefit of the leased spectrum regardless of whether the customer uses the spectrum or not.
−Removed: As a result, revenue will be recognized ratably as the Company delivers cleared 900 MHz Broadband Spectrum and the associated broadband licenses to the customer on a county-by-county basis over the contractual term.
−Removed: See Note 3 Revenue for a discussion of the Company’s recognized revenues during the years ended March 31, 2023, 2022 and 2021.
+Added: As a result, revenue will be recognized ratably as the Company delivers cleared 900 MHz Broadband Spectrum and the associated broadband leases to the customer on a county-by-county basis over the contractual term.
+Added: Since a contract has payment terms that differ from the timing of revenue recognition, the Company will assess whether the transaction price for those contracts include a significant financing component.
+Added: The Company expects that the period between the transfer of a promised good or service to a customer and the customer payment for that good or service will not constitute a significant financing component.
+Added: Most of the Company’s spectrum agreements have milestone payments, which align the payment schedule with the clearing and delivery of broadband spectrum.
+Added: The Company may be entitled to receive an initial deposit, which is not considered a significant financing component because it is used to obtain exclusive rights to the spectrum upon clearing and delivery.
+Added: As a result, the prepayment structure does not result in a financing component as it mitigates the risk for both parties and secures the exclusive use of the Company’s 900 MHz Broadband Spectrum.
The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year.
1 unchanged sentence
For the years ended March 31, 2024 and 2023, the Company capitalized commission costs required to obtain long-term 900 MHz Broadband Spectrum lease agreements which will be amortized over the contractual term.
−Removed: See Note 3 Revenue for a discussion on the Company’s capitalized contract assets incurred during the period ended March 31, 2023 and 2022.
−Removed: Direct Cost of Revenue
−Removed: The Company’s historical direct cost of revenue related to its TeamConnect service offering includes the costs of operating its dispatch network and its cloud-based solutions.
−Removed: With respect to sales of its historical software applications through its wireless carrier partners, direct cost of revenue includes the portion of service revenue retained by its domestic Tier 1 carrier or reseller partners pursuant to its agreements with these parties, which may include network services, connectivity, SMS service, sales, marketing, billing and other ancillary services.
Contract Assets and Liabilities
−Removed: The Company recognizes a contract asset for the incremental costs of obtaining a contract with a customer.
−Removed: These costs include sales commissions, equity compensation and other costs associated with acquiring customer contracts.
−Removed: These costs are amortized ratably using the portfolio approach over the estimated customer contract period.
−Removed: The Company will review the
−Removed: contract asset on a periodic basis to determine if an impairment exists and will review the contract assets for potential credit loss exposure.
−Removed: If it is determined that there is an impairment, or a potential credit loss, the Company will expense the contract asset.
−Removed: Contract liabilities primarily relate to advance consideration received from customers for spectrum services, for which revenue is recognized over time, as the services are performed.
+Added: The Company records a contract asset when the Company has satisfied a performance obligation but does not yet have an unconditional right to consideration.
+Added: Contract assets are included in prepaid expenses and other current assets in the consolidated balance sheets.
+Added: The Company will review the contract asset on a periodic basis to determine if an impairment exists as a result of a potential credit loss exposure.
+Added: If it is determined that there is an impairment, the Company will expense the contract asset to the extent of the potential credit loss.
+Added: Contract liabilities primarily relate to advance consideration received from customers for spectrum services, for which the control of these services has not been transferred to the customer.
These contract liabilities are recorded as deferred revenue on the balance sheet.
8 unchanged sentences
GAAP, which requires the measurement and recognition of compensation expense, based on the estimated fair value of awards granted to consultants, employees and directors.
−Removed: The Company estimates the fair value of share-based awards on the date of grant using an option-pricing model.
+Added: The Company estimates the fair value of share-based awards on the date of grant using an option-valuation model.
The value of the portion of the award that is ultimately expected to vest is recognized as expense in the Company’s statements of operations over the requisite service periods.
5 unchanged sentences
or a change in control with a purchase price at or above $ 100 per share (each of such terms defined in the equity award agreements).
−Removed: To calculate option-based compensation, the Company uses the Black-Scholes option-pricing model.
+Added: To calculate option-based compensation, the Company uses the Black-Scholes option valuation model.
+Added: The compensation cost for the stock options with a graded vesting schedule is recognized using an accelerated method over the explicit vesting period.
+Added: Stock options have a maximum term of ten years from the date they are granted, and vest over a requisite service period of three years , or four years for grants prior to November 2020, subject to acceleration in certain circumstances.
The Company’s determination of fair value of option-based awards on the date of grant using the Black-Scholes model is affected by assumptions regarding a number of subjective variables.
−Removed: The compensation cost for the stock options with a graded vesting schedule is recognized on an accelerated method over the vesting period.
+Added: These variables include the expected volatility of the Company’s stock price, which is based on the weighted-average historical volatility of its stock, expected term, which is based on option history with adjustments for vesting schedule and contractual terms, risk-free interest rate, which is based on the treasury zero-coupon yield appropriate for the term of the option-based award as of the grant date;
+Added: and expected dividends as applicable, which is zero, as the Company has never paid any cash dividends.
+Added: 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.
+Added: Therefore, the Company uses an expected dividend yield of zero in the option-pricing model.
The fair value of restricted stock, restricted stock units and performance units without market conditions are measured based upon the quoted closing market price for the stock on the date of grant.
−Removed: The compensation cost for the restricted stock and restricted stock units is recognized on a straight-line basis over the vesting period.
−Removed: The compensation cost for the performance units without market conditions is recognized when the performance criteria are expected to be complete.
+Added: The compensation cost for the restricted stock and restricted stock units is recognized on a straight-line basis over the explicit vesting period.
+Added: Restricted stock granted to the Company employees vest over a requisite services period of four years , subject to acceleration in certain circumstances.
+Added: Vested restricted stock units are settled and issuable upon the earlier of the date the employee ceases to be an employee of the
+Added: Company or a date certain in the future.
+Added: The compensation cost for the performance units without market conditions is recognized ratably over the service period if it is probable that the performance condition will be met.
The Company uses a Monte Carlo simulation model to determine the fair value of performance units with market condition at grant date.
4 unchanged sentences
and expected dividends as applicable, which is zero, as the Company has never paid any cash dividends.
−Removed: Any future determination to pay dividends will be at the discretion of the board of directors (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.
+Added: 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 has used an expected dividend yield of zero in the Monte Carlo simulation model.
+Added: The compensation cost for the performance units with market condition is recognized ratably over the service period.
No tax benefits have been attributed to the share-based compensation expense because the Company maintains a full valuation allowance for all net deferred tax assets.
11 unchanged sentences
Changes in valuation allowance for the years ended March 31, 2024 and 2023 are summarized below (in thousands):
−Removed: 2023 2022 2021
Balance at beginning of the year $ 85,984 $ 79,998
10 unchanged sentences
Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities.
−Removed: For purposes of the diluted net loss per share calculation, preferred stock, convertible notes payable-affiliated entities, stock options, restricted stock and warrants are considered to be potentially dilutive securities.
+Added: For purposes of the diluted net loss per share calculation, preferred stock, convertible notes payable-affiliated
+Added: entities, stock options, restricted stock and warrants are considered to be potentially dilutive securities.
+Added: Diluted earnings per share is computed using the treasury stock method.
Because the Company has reported a net loss for the years ended March 31, 2024 and 2023 diluted net loss per common share is the same as basic net loss per common share for those periods.
−Removed: Common stock equivalents resulting from potentially dilutive securities approximated 352,000 , 1,343,000 and 1,382,000 at March 31, 2023, 2022 and 2021, respectively, and have not been included in the dilutive weighted average shares of common stock outstanding, as their effects are anti-dilutive.
+Added: Common stock equivalents resulting from potentially dilutive securities approximated 241,629 and 352,216 and at March 31, 2024 and 2023 respectively, and have not been included in the dilutive weighted average shares of common stock outstanding, as their effects are anti-dilutive.
Recently Issued Accounting Pronouncements
−Removed: While there have been accounting standards that have been issued or proposed by the FASB or other standard-setting bodies that do not require adoption until a future date, these updates are not expected to have a material impact on the Company’s consolidated financial statements upon adoption .
+Added: In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2023-06, Disclosure Improvements:
+Added: Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative.
+Added: The ASU incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K.
+Added: The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K.
+Added: Any amendments the SEC does not remove by June 30, 2027 will not be effective.
+Added: As the Company is currently subject to the SEC requirements, this ASU is not expected to have a material impact on its consolidated financial statements or related disclosures.
+Added: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures, which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others.
+Added: This update is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024.
+Added: Early adoption is permitted.
+Added: The Company has not yet determined the impact of this pronouncement on its consolidated financial statements and related disclosures.
+Added: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures, which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures.
+Added: This update is effective for annual periods beginning after December 15, 2024.
+Added: The Company has not yet determined the impact of this pronouncement on its consolidated financial statements and related disclosures.
+Added: In March 2024, the FASB issued ASU 2024-02, Codification Improvements:
+Added: this Codification amendment was issued to remove references to various concepts statements and impacts a variety of topics in the Codification.
+Added: The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance.
+Added: The amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities and are not expected to have a material impact on the Company’s consolidated financial statements or related disclosures.
+Added: This update is effective for annual periods beginning after December 15, 2024.
The following table provides information regarding the Company’s revenue for each of the services it provides pursuant to its spectrum revenue agreements for the years ended March 31, 2024 and 2023 (in thousands):
−Removed: 2023 2022 2021
Spectrum revenues
900 MHz Broadband Spectrum Revenue
−Removed: Ameren $ 609 $ 355 $ —
+Added: Ameren Corporation $ 609 $ 609
+Added: Evergy 966 581
+Added: Xcel Energy (1)
Narrowband Spectrum Revenue
2 unchanged sentences
$ 4,191 $ 1,919
−Removed: Services revenue — — 192
−Removed: Total operating revenues $ 1,919 $ 1,084 $ 921
−Removed: The Company commenced revenue recognition in connection with the delivery of cleared 900 MHz Broadband Spectrum and the associated broadband licenses to Evergy for 81 counties.
+Added: The Company commenced revenue recognition in connection with the delivery of cleared 900 MHz Broadband Spectrum and the associated broadband leases to Xcel Energy in September 2023.
Revenue recognized during the years ended March 31, 2024 and 2023 was included in deferred revenue at the beginning of the respective periods.
1 unchanged sentence
In December 2020, the Company entered into its first long-term lease agreements of 900 MHz Broadband Spectrum with Ameren.
−Removed: The Ameren Agreements will enable Ameren to deploy a PLTE network in its service territories in Missouri and Illinois, covering approximately 7.5 million people.
+Added: The Ameren Agreements will enable Ameren to deploy a PLTE network in its service territories in Missouri and
+Added: Illinois, covering approximately 7.5 million people.
Each Ameren Agreement is for an initial term of 30 years with a 10-year renewal option for an additional payment.
The scheduled prepayments for the 30-year initial terms of the Ameren Agreements total $ 47.7 million, of which $ 0.3 million was received by the Company in February 2021, $ 5.4 million in September 2021 and $ 17.2 million in October 2021.
−Removed: The prepayments received to date encompass the initial upfront payment(s) due upon signing of the Ameren Agreements and payments for delivery of the relevant 1.4 x 1.4 cleared spectrum in several metropolitan counties throughout Missouri and Illinois, in accordance with the terms of the Ameren Agreements.
−Removed: The remaining prepayments for the 30-year initial term are due by mid-2026, per the terms of the Ameren Agreements and as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses.
−Removed: The Company is working with incumbents to clear the 900 MHz Broadband Spectrum allocation in Ameren’s service territory.
−Removed: In August 2021, the FCC granted the first 900 MHz broadband licenses to the Company for several counties in Ameren’s service territory, for which the Ameren Agreements were also subsequently approved by the FCC.
+Added: The prepayments received to date encompass the initial upfront payment(s) due upon signing of the Ameren Agreements and payments for delivery of the relevant 1.4 x 1.4 MHz cleared spectrum in several metropolitan counties throughout Missouri and Illinois, in accordance with the terms of the Ameren Agreements.
+Added: The remaining prepayments for the 30-year initial term are due by mid-2026, per the terms of the Ameren Agreements and as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband leases.
+Added: The Company is working with the remaining incumbents to clear the 900 MHz Broadband Spectrum allocation in Ameren’s service territory.
+Added: In August 2021, the FCC granted the first 900 MHz broadband leases to the Company for several counties in Ameren’s service territory, for which the Ameren Agreements were also subsequently approved by the FCC.
In accordance with ASC 606, the payments of prepaid fees under the Ameren Agreements will be accounted for as deferred revenue on the Company’s Consolidated Balance Sheets.
−Removed: Revenue is recognized over time as the performance obligations of clearing the 900 MHz Broadband Spectrum and the associated broadband licenses are delivered by respective county, over the contractual term of 30-years .
+Added: Revenue is recognized over time as the performance obligations of clearing the 900 MHz Broadband Spectrum and the associated broadband leases are delivered by respective county, over the contractual term of 30-years .
In September 2021, the Company entered into a long-term lease agreement of 900 MHz Broadband Spectrum with Evergy.
2 unchanged sentences
Prepayment in full of the $ 30.2 million for the 20-year initial term, which was due and payable within thirty ( 30 ) days after execution of the Evergy Agreement, was received by the Company in October 2021.
−Removed: The Company is working with incumbents to clear the 900 MHz Broadband Spectrum allocation covered by the Evergy Agreement.
+Added: During the year ended March 31, 2024, the Company cleared the 900 MHz Broadband Spectrum allocation covered by the Evergy Agreement.
In accordance with ASC 606, the payments of prepaid fees under the Evergy Agreement will be accounted for as deferred revenue on the Company’s Consolidated Balance Sheets.
−Removed: Revenue is recognized over time as the performance obligations of clearing the 900 MHz Broadband Spectrum and the associated broadband licenses are delivered by respective county, over the contractual term of 20-years .
+Added: Revenue is recognized over time as the performance obligations of clearing the 900 MHz Broadband Spectrum and the associated broadband leases are delivered by respective county, over the contractual term of 20-years .
In October 2022, the Company entered into an agreement with Xcel Energy providing Xcel Energy dedicated long-term usage of the Company’s 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states including Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin.
1 unchanged sentence
The Xcel Energy Agreement allows Xcel Energy to deploy a PLTE network to support its grid modernization initiatives for the benefit of its approximately 3.7 million electricity customers and 2.1 million natural gas customers.
−Removed: The scheduled prepayments for the 20-year initial term of the Xcel Energy Agreement total $ 80.0 million, of which $ 8.0 million
−Removed: was received by the Company in December 2022.
−Removed: The remaining prepayments for the 20-year initial term are due by mid-2028, per the terms of the Xcel Energy Agreement and as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses.
−Removed: The Company is working with incumbents to clear the 900 MHz Broadband Spectrum allocation in Xcel Energy service territories.
+Added: The scheduled prepayments for the 20-year initial term of the Xcel Energy Agreement total $ 80.0 million, of which $ 8.0 million was received by the Company in December 2022.
+Added: In July 2023 and November 2023, the Company delivered the cleared 900 MHz Broadband Spectrum and the associated broadband leases and received milestone payments of $ 21.2 million in each period.
+Added: During the year ended March 31, 2024, the Company delivered the cleared 900 MHz Broadband Spectrum and the associated broadband leases and received a milestone payment of $ 16.8 million in January 2024.
+Added: The remaining prepayments for the 20-year initial term are due by mid-2028, per the terms of the Xcel Energy Agreement and as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband leases.
+Added: The Company is working with the remaining incumbents to clear the 900 MHz Broadband Spectrum allocation in Xcel Energy service territories.
In accordance with ASC 606, the payments of prepaid fees under the Xcel Energy Agreement will be accounted for as deferred revenue on the Company’s Consolidated Balance Sheets.
−Removed: Revenue will be recognized over time as the performance obligations of clearing the 900 MHz Broadband Spectrum and the associated broadband licenses are delivered by respective county, over the contractual term of approximately 20 -years.
+Added: Revenue will be recognized over time as the performance obligations of clearing the 900 MHz Broadband Spectrum and the associated broadband leases are delivered by respective county, over the contractual term of approximately 20 -years.
+Added: In November 2023, the Company entered into an agreement with TECO to provide TECO the use of the Company’s 900 MHz Broadband Spectrum for a term of 20 years throughout TECO’s service territory in West Central Florida the TECO Agreement.
+Added: The TECO Agreement also provides TECO an option to extend the agreement for two 10-year terms for additional payments.
+Added: The TECO Agreement, which covers an approximately 2,000 -square-mile service territory in West Central Florida, is expected to enable TECO to deploy a PLTE network.
+Added: The scheduled prepayments for the 20-year initial terms of the TECO Agreement total $ 34.5 million, of which $ 6.9 million was received by the Company in December 2023.
+Added: The remaining prepayments for the 20-year initial term are due by fiscal year 2026, per the terms of the TECO Agreement and as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband leases.
+Added: The Company is working with incumbents to clear the 900 MHz Broadband Spectrum allocation in TECO service territories.
+Added: The payments of prepaid fees under the TECO Agreement will be accounted for as deferred revenue on the Company’s Consolidated Balance Sheets.
+Added: Revenue will be recognized over time as the performance obligations of clearing the 900 MHz Broadband Spectrum and the associated broadband leases are delivered by respective county, over the contractual term of approximately 20 years.
Narrowband Spectrum Revenue
1 unchanged sentence
The payment of the fee is accounted for as deferred revenue on the Company’s Consolidated Balance Sheets and is recognized ratably as the service is provided over the contractual term of approximately ten years .
−Removed: Service Revenue
−Removed: The Company has historically derived its service revenue from its pdvConnect, TeamConnect, and Diga-talk service offerings.
−Removed: In December 2018, the Board approved the transfer of various customers under its TeamConnect business to A BEEP and Goosetown along with the support for its pdvConnect business to help reduce operating costs and to allow the Company to focus on its FCC initiatives and future broadband opportunities.
−Removed: As a result of the completion of the migration to A BEEP and Goosetown in December 2020, service revenue is recorded to other income on the Company’s Consolidated Statements of Operations.
−Removed: The payments received from Goosetown ended during Fiscal 2022 and A BEEP is expected to continue to provide payments until December 2024.
−Removed: Contract Assets
−Removed: The following table presents the activity for the Company’s contract assets (in thousands):
+Added: Capitalized Contract Costs
+Added: The Company capitalizes incremental costs associated with obtaining a contract with a customer, which generally includes sales commissions.
+Added: The Company’s capitalized contract costs consisted of the following activity (in thousands):
Balance at the beginning of the year $ 870 $ 638
1 unchanged sentence
Amortization ( 42 ) ( 17 )
−Removed: Impairment — —
Balance at the end of the year 1,027 870
−Removed: Less amount classified as current assets - prepaid expenses and other current assets ( 418 ) ( 238 )
−Removed: Noncurrent assets - included in other assets $ 452 $ 400
+Added: Less amount classified as current assets (1)
+Added: ( 580 ) ( 418 )
+Added: Noncurrent assets (1)
+Added: Current assets are recorded as prepaid expenses and other current assets and noncurrent assets are recorded as other assets on the Company’s Consolidated Balance Sheets.
Contract Liabilities
−Removed: The following table presents the activity for the Company’s contract liabilities (in thousands):
+Added: Contract liabilities primarily relate to advanced consideration received from customers for spectrum services, for which revenue is recognized over time, as the services are performed.
+Added: The Company’s contract liabilities consisted of the following activity (in thousands):
Balance at the beginning of the year $ 60,759 $ 54,678
−Removed: Additions 8,000 52,779
+Added: Net additions (1)
Revenue recognized ( 4,191 ) ( 1,919 )
1 unchanged sentence
Less amount classified as current liabilities (2)
+Added: ( 6,470 ) ( 2,769 )
Noncurrent liabilities (2)
+Added: $ 115,742 $ 57,990
+Added: Represents milestone payments received from customer contracts pursuant to the terms of the associated spectrum lease agreements, net of delivery delay adjustments.
+Added: Current liabilities and noncurrent liabilities are recorded as deferred revenue on the Company’s Consolidated Balance Sheets.
+Added: Remaining Performance Obligations
+Added: Revenue allocated to remaining performance obligations of the Company’s contracts represent contracted revenue that will be recognized in future periods.
+Added: Total performance obligations include deferred revenue (i.e., contract liabilities) as well as amounts that will be invoiced and recognized in future periods.
+Added: Revenue allocated to remaining performance obligations was $ 187.0 million as of March 31, 2024, which will be recognized over the remaining contract terms up to 30 years.
+Added: Escrow Deposits
+Added: Escrow deposits are considered restricted cash as the deposits are restricted from use until the terms of the escrow agreement are met.
+Added: Escrow deposits are classified as noncurrent assets on the Company’s Consolidated Balance Sheets.
+Added: In connection with the LCRA Agreement, the Company and LCRA entered into an escrow agreement.
+Added: Pursuant to the escrow agreement, the escrow funds shall be held and invested in a money market deposit account.
+Added: All interest and other income earned shall be allocated to the Company, payable with the final distribution of the escrow funds.
+Added: The escrow funds shall be distributed upon written request by both the Company and LCRA pursuant to the terms within the LCRA Agreement.
+Added: During the year ended March 31, 2024, the Company received $ 15.0 million, of which $ 7.5 million was deposited in an escrow account.
Property and Equipment
11 unchanged sentences
Property and equipment, net $ 2,062 $ 3,606
−Removed: Depreciation expense for the years ended March 31, 2023, 2022 and 2021 amounted to approximately $ 1.4 million, $ 1.5 million and $ 3.5 million, respectively.
−Removed: During the year ended March 31, 2021, the Company recorded $ 85,000 of non-cash impairment charges for network sites and equipment to reduce the carrying values to zero .
−Removed: There were no impairment charges during the years ended March 31, 2023 and March 31, 2022.
+Added: Depreciation expense for the years ended March 31, 2024 and 2023 amounted to approximately $ 0.8 million and $ 1.4 million respectively.
+Added: There were no impairment charges during the years ended March 31, 2024 and 2023.
Intangible Assets
3 unchanged sentences
Intangible assets consist of the following at March 31, 2024 and 2023 (in thousands):
−Removed: Wireless Licenses
−Removed: Balance at March 31, 2021 $ 122,117
−Removed: Acquisitions 17,843
−Removed: Exchanges - licenses received 15,341
−Removed: Exchanges - licenses surrendered ( 4,132 )
−Removed: Balance at March 31, 2022 151,169
−Removed: Acquisitions 12,476
+Added: Balance at the beginning of the year $ 202,044 $ 151,169
+Added: Acquisitions and transfers 12,077 12,476
+Added: Sale of intangible assets ( 32,402 ) —
Exchanges - licenses received 43,700 46,174
Exchanges - licenses surrendered ( 8,676 ) ( 7,775 )
−Removed: Balance at March 31, 2023 $ 202,044
−Removed: Purchases of intangible assets, including refundable deposits
+Added: Balance at the end of the year $ 216,743 $ 202,044
+Added: Purchases of intangible assets, including refundable deposits, retuning costs and swaps
During the years ended March 31, 2024 and 2023, the Company entered into agreements with several third parties in multiple U.S.
−Removed: markets to acquire, retune or swap wireless licenses for cash consideration (“deals”) and made Anti-Windfall Payments to the U.S.
−Removed: Treasury Department.
−Removed: The initial deposits to incumbents are recorded as prepaid expenses and other current assets on the Company’s Consolidated Statements of Balance Sheets and are refundable if the FCC does not approve the sale, retuning or swap of the spectrum.
−Removed: The initial deposits are transferred to other assets or intangible assets in the Company’s Consolidated Statements of Balance Sheets, as applicable, upon meeting the relevant deal milestones.
−Removed: The final payments related to closed retuning or swap deals are recorded as other assets on the Company’s Consolidated Statements of Balance Sheets.
−Removed: The final payments for license purchases or Anti-Windfall Payments are recorded as intangible assets on the Company’s Consolidated Statements of Balance Sheets.
−Removed: The purchases of intangible assets, including refundable deposits, consisted of the following activity during the years March 31, 2023, 2022 and 2021 (in thousands):
−Removed: 2023 2022 2021
−Removed: Refundable deposits * $ 6,492 $ 5,621 $ ( 1,986 )
−Removed: Retuning cost and Swaps 6,036 2,894 290
−Removed: Purchases and Anti-Windfall Payments 12,476 17,843 15,640
−Removed: Total $ 25,004 $ 26,358 $ 13,944
−Removed: * The decrease in refundable deposits during the year end 2021 was related to the exchange of narrowband license discussed below.
+Added: markets to acquire, retune or swap wireless licenses for cash consideration (“deals”) and made Anti-Windfall Payments to the US Treasury Department.
+Added: The initial deposits to incumbents are recorded as prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets and are refundable if the FCC does not approve the sale, retuning or swap of the spectrum.
+Added: The initial deposits are transferred to other assets or intangible assets in the Company’s Consolidated Balance Sheets, as applicable, upon meeting the relevant deal milestones.
+Added: The final payments related to closed retuning or swap deals are recorded as deferred broadband costs on the Company’s Consolidated Balance Sheets.
+Added: The final payments for license purchases or Anti-Windfall Payments are recorded as intangible assets on the Company’s Consolidated Balance Sheets.
Broadband License Exchanges
9 unchanged sentences
As a result of the exchange of narrowband licenses for broadband licenses, the Company recorded a gain on disposal of intangible assets of $ 38.4 million, for the year ended March 31, 2023.
−Removed: Narrowband License Exchanges
−Removed: In September 2020, the Company closed an agreement with a third party for the exchange of 900 MHz licenses.
−Removed: Under the agreement, the Company received spectrum licenses at their estimated fair value of approximately $ 0.2 million and a payment of $ 1.2 million in cash to clear the channels received from incumbents.
−Removed: In January 2018, the Company received $ 0.6 million as a refundable deposit when the agreement was executed during the year ended March 31, 2018, and the Company is entitled to receive the remaining $ 0.6 million upon receipt of FCC approval and closing of the agreement in September 2020.
−Removed: Under the agreement, the Company transferred spectrum licenses with book value of approximately $ 0.3 million to the third party.
−Removed: The Company recognized a $ 1.1 million gain from disposal of intangible assets on the Company’s Consolidated Statements of Operations when the deal closed in September 2020.
−Removed: The Association of American Railroads
−Removed: The nation’s railroads, particularly the major freight lines, operate on six narrowband 900 MHz channels licensed to the Association of American Railroads (“AAR”).
−Removed: Three of these narrowband channels are located in the 900 MHz broadband segment created by the FCC in the Report and Order.
−Removed: As a result, in order to qualify for broadband licenses under the Report and Order, the Company will be required to provide spectrum for the relocation of the AAR channels to narrowband channels outside the 900 MHz broadband segment.
−Removed: In January 2020, the Company entered into an agreement with the AAR pursuant to which the Company agreed to cancel licenses in the 900 MHz band to enable the AAR to relocate its operations, including operations utilizing the three channels located in the 900 MHz broadband segment (the “AAR Agreement”).
−Removed: The Report and Order provides that the FCC will make the channels associated with these licenses available to the AAR to enable the AAR to relocate their current operations.
−Removed: The Report and Order also provides that the FCC will credit the Company for its cancelled licenses for purposes of determining the Company’s eligibility to secure broadband licenses and the calculation of any Anti-Windfall Payments.
−Removed: In accordance with the Report and Order and the AAR Agreement, the Company cancelled its licenses in June 2020.
−Removed: Because the Company did not receive any licenses nor monetary reimbursement in exchange for the cancellation, but only credit for purposes of determining its future eligibility and payment obligations for broadband licenses under the Report and Order, the Company recorded a $ 4.7 million loss from disposal of the intangible assets on the Company’s Consolidated Statements of Operations for the year ended March 31, 2021.
−Removed: In August 2020, the Company closed an agreement with a third party for the exchange of 900 MHz licenses plus approximately $ 0.3 million for the reprogramming of their equipment.
−Removed: Since the licenses the Company acquired in the exchange were included in the licenses returned to the FCC in accordance with the AAR Agreement above, the $ 0.3 million for equipment reprogramming was recorded as additional loss from disposal of the intangible assets on the Company’s Consolidated Statements of Operations.
+Added: Broadband License Sale
+Added: During the quarter ended September 30, 2023, the Company transferred to SDG&E the San Diego County broadband license for total cumulative payments of $ 44.0 million net of delivery delay adjustments of $ 1.1 million.
+Added: As a result, the Company recognized a reduction in intangible assets of $ 31.8 million and recorded a $ 7.3 million gain on sale of intangible assets on the Company’s Consolidated Statements of Operations.
+Added: During the quarter ended December 31, 2023, the Company transferred to SDG&E the remainder of the cleared 900 MHz Broadband Spectrum and the associated broadband license to Imperial County for total cumulative payments of $ 0.7 million.
+Added: As a result, the Company recognized a reduction in intangible assets of $ 0.6 million and recorded a $ 32 thousand gain on sale of intangible assets on the Company’s Consolidated Statements of Operations.
+Added: As part of the SDG&E Agreement, SDG&E has an option to pursue additional spectrum with the Company.
+Added: In accordance with ASC 606, the Company recorded a $ 4.9 million deferred gain on sale of intangible assets on the Company’s Consolidated Balance Sheets as of March 31, 2024, related to this option, which expires in September 2028.
Accounts Payable and Accrued Expenses
3 unchanged sentences
Accrued expenses 1,747 1,267
+Added: Accrued taxes 948 —
+Added: Other 223 331
Total accounts payable and accrued expenses $ 8,631 $ 6,624
2 unchanged sentences
Under the MOU, the Company agreed to assign the intellectual property rights to its pdvConnect application to TeamConnect LLC (“LLC”), a new entity formed by the principals of Goosetown, in exchange for a 19.5 % ownership interest in the LLC, effective April 30, 2019.
−Removed: Under the terms of the MOU, the Company was obligated to pay the LLC a monthly service fee for a 24-month period ending on January 7, 2021 for its assumption of the Company’s support obligations under the A BEEP and Goosetown Agreements.
−Removed: The Company is also obligated to pay the LLC a certain portion of the billed revenue received by the Company from pdvConnect customers for a 48-month period.
+Added: The Company was obligated to pay the LLC a monthly service fee for a 24-month period ending on January 7, 2021 for its assumption of the Company’s support obligations under the A BEEP and Goosetown Agreements.
+Added: The Company was also obligated to pay the LLC a certain portion of the billed revenue received by the Company from pdvConnect customers for a 48-month period.
On February 22, 2023, the Company amended the LLC agreement to withdraw as a member of the LLC for no consideration.
−Removed: For the years ended March 31, 2023, 2022 and 2021, the Company incurred payments of $ 55,000 , $ 60,000 and $ 0.6 million under the MOU, respectively.
−Removed: As of March 31, 2023 and March 31, 2022, the Company did not have outstanding liabilities to the related parties associated with the services transfer.
−Removed: During the year ended March 31, 2023, the Company purchased equipment from Motorola in the amount of $ 1.4 million.
−Removed: In addition, the Company entered into a Frequency Relocation Agreement with Motorola for a total amount of $ 1.0 million, of which the Company paid $ 0.1 million during the year ended March 31, 2023.
−Removed: The Company did not purchase any equipment from Motorola for the years ended March 31, 2022 and 2021.
−Removed: The Company recognized approximately $ 0.7 million each year in Spectrum revenue for the years ended March 31, 2023, 2022 and 2021.
−Removed: As of March 31, 2023, the Company owed $ 0.5 million to Motorola in connection with the equipment purchased.
−Removed: As of March 31, 2022, the Company owed $ 0.1 million to Motorola, unrelated to the Frequency Relocation Agreement.
−Removed: On May 5, 2020, the Company entered into a consulting agreement with Rachelle B.
−Removed: Chong under which Ms.
−Removed: Chong will serve as a Senior Advisor to the Company’s management team effective May 15, 2020.
−Removed: In connection with the consulting agreement, Ms.
−Removed: Chong submitted her resignation from the Board and as a member of the Board’s Nominating and Corporate Governance Committee.
−Removed: For the years ended March 31, 2023, 2022 and 2021, the Company incurred $ 0.1 million and $ 0.1 million and $ 0.1 million, respectively, in consulting fees to Ms.
−Removed: As of March 31, 2023 and 2022, the Company did not have any outstanding liabilities to Ms.
−Removed: On June 25, 2020, as part of its Executive Succession Plan (the “Succession Plan”), the Company announced that Brian D.
−Removed: McAuley had submitted his resignation as Executive Chairman of the Board, effective on July 1, 2020.
−Removed: On August 27, 2020, the Company entered into a consulting agreement (the “Consulting Agreement”) with Mr.
−Removed: McAuley under which Mr.
−Removed: McAuley will serve as a Senior Advisor to the Company’s management team and provide strategic, corporate governance and Board advisory services.
−Removed: In July 2022, the Company extended the agreement by an additional 12 months with a new termination date of September 1, 2023.
−Removed: The Consulting Agreement provides that Mr.
−Removed: McAuley will receive cash compensation of $ 40,000 per year and allow for his outstanding equity awards to continue to vest, unless accelerated pursuant to the terms of the agreement.
−Removed: For the years ended March 31, 2023, 2022 and 2021, the Company incurred approximately $ 40,000 , $ 40,000 and $ 23,000 , respectively, in consulting fees to Mr.
−Removed: As of March 31, 2023 and 2022, the Company did not have any outstanding liabilities to Mr.
−Removed: A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.
−Removed: On April 1, 2019, the Company adopted ASC 842 and it primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.
−Removed: Substantially all the leases in which the Company is the lessee are comprised of corporate office space and tower space.
−Removed: The Company is obligated under certain lease agreements for office space with lease terms expiring on various dates from October 31, 2023 through June 30, 2027, which includes lease extensions for its corporate headquarters ranging from three to ten-years .
+Added: For the year ended March 31, 2024, the Company did not incur payments to the LLC.
+Added: For the year ended March 31, 2023, the Company incurred payments of $ 55,000 to the parties associated with the transferred business.
+Added: As of March 31, 2024 and 2023, the Company did not have outstanding liabilities to the related parties associated with the services transfer.
+Added: All the leases in which the Company is the lessee are comprised of corporate office space and tower space.
+Added: The Company is obligated under certain lease agreements for office space with lease terms expiring on various dates from October 31, 2024 through January 31, 2029, which includes lease extensions for its corporate headquarters ranging from three to ten-years .
The Company entered into multiple lease agreements for tower space.
−Removed: The lease expiration dates range from May 31, 2023 to August 31, 2029.
−Removed: Substantially all of the Company’s leases are classified as operating leases, and as such, were previously not recognized on the Company’s Consolidated Balance Sheet.
−Removed: With the adoption of ASC 842, operating lease agreements are required to be recognized on the Company’s Consolidated Balance Sheet as ROU assets and corresponding lease liabilities.
+Added: The lease expiration dates range from April 30, 2024 to March 21, 2031.
+Added: Substantially all of the Company’s leases are classified as operating leases.
+Added: Operating lease agreements are required to be recognized on the Company’s Consolidated Balance Sheets as right of use (“ROU”) assets and corresponding lease liabilities.
ROU assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred.
1 unchanged sentence
The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.
−Removed: Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows:
+Added: Weighted-average remaining lease term and incremental borrowing rate for the Company’s operating leases are as follows:
Weighted average term - operating lease liabilities 3.59 years 2.87 years
Weighted average incremental borrowing rate - operating lease liabilities 9 % 12 %
−Removed: Rent expense amounted to approximately $ 1.8 million for the year ended March 31, 2023, of which is included in general and administrative expenses on the Company’s Consolidated Statement of Operations.
−Removed: Rent expense amounted to approximately $ 2.0 million for the year ended March 31, 2022, of which is included in general and administrative expenses on the Company’s Consolidated Statement of Operations.
−Removed: Rent expense amounted to approximately $ 2.6 million for the year ended March 31, 2021, of which approximately $ 1.2 million are included in direct cost of revenue and the remainder of approximately $ 1.4 million included in general and administrative on the Company’s Consolidated Statement of Operations.
−Removed: For the years ended March 31, 2023, 2022 and 2021, the following table presents net lease cost (in thousands):
−Removed: 2023 2022 2021
−Removed: Operating lease cost (cost resulting from lease payments) $ 1,817 $ 1,950 $ 2,451
+Added: Total lease cost amounted to approximately $ 1.9 million and $ 1.8 million, respectively, for the years ended March 31, 2024 and 2023.
+Added: Total lease cost is included in general and administrative expenses on the Company’s Consolidated Statements of Operations.
+Added: For the years ended March 31, 2024 and 2023, the following table presents total lease cost (in thousands):
+Added: Operating lease cost $ 1,945 $ 1,817
Short term lease cost — 7
−Removed: Sublease income — — ( 6 )
−Removed: Net lease cost $ 1,824 $ 1,966 $ 2,555
−Removed: For the years ended March 31, 2023, 2022 and 2021, the following table presents other supplemental cash flow lease information (in thousands):
−Removed: 2023 2022 2021
−Removed: Cash paid activity:
−Removed: Operating lease - operating cash flows (fixed payments) $ 2,217 $ 2,286 $ 2,746
−Removed: Operating lease - operating cash flows (liability reduction) $ 1,042 $ 1,382 $ 1,674
−Removed: Non-cash activity:
−Removed: Right of use assets obtained in exchange for new operating lease liabilities $ 165 $ 116 $ 230
+Added: Total lease cost $ 1,945 $ 1,824
The following table presents supplemental balance sheet information as of March 31, 2024 and 2023 (in thousands):
2 unchanged sentences
Non-current liabilities - operating lease liabilities $ 3,446 $ 2,922
−Removed: Future minimum payments under non-cancelable leases for office and tower spaces (exclusive of real estate tax, utilities, maintenance and other costs borne by the Company) for the remaining terms of the leases following the year ended March 31, 2023 are as follows (in thousands):
+Added: Future minimum payments under existing non-cancelable leases for office and tower spaces (exclusive of real estate tax, utilities, maintenance and other costs borne by the Company) for the remaining terms of the leases following the year ended March 31, 2024 are as follows (in thousands):
Fiscal Year Operating
13 unchanged sentences
In situations where a three-year cumulative loss condition exists, accounting standards limit the ability to consider projections of future results as positive evidence to assess the realizability of deferred tax assets.
−Removed: Since inception, the Company has incurred consecutive tax losses which represents significant negative evidence toward the realizability of its deferred tax assets.
+Added: Since inception, the Company has mainly incurred tax losses which represents significant negative evidence toward the realizability of its deferred tax assets.
Therefore, the Company continues to apply a full valuation allowance against its deferred tax assets as of March 31, 2024 and 2023, with the exception of the net deferred tax liability of approximately $ 6.3 million and $ 5.4 million, respectively, regarding indefinite-lived intangibles.
1 unchanged sentence
The Company recorded $ 0.4 million of state deferred tax expense during the year March 31, 2024 and increased the state deferred tax liability by the same amount from the inability to use the state NOL carryforwards against the indefinite-lived intangible.
−Removed: For Fiscal 2022, the Company recorded $ 0.6 million of state deferred tax benefit during the year March 31, 2022 and decreased the state deferred tax liability by the same amount from the inability to use the state NOL carryforwards against the indefinite-lived
+Added: For Fiscal 2023, the Company recorded $ 0.8 million of state deferred tax benefit during the year March 31, 2023 and decreased the state deferred tax liability by the same amount from the inability to use the state NOL carryforwards against the indefinite-lived intangible.
This valuation allowance has no effect on the Company’s ability to utilize the deferred tax assets to offset future taxable income, if generated.
21 unchanged sentences
The components of the income tax expense for the years ended March 31, 2024 and 2023 are as follows (in thousands):
−Removed: 2023 2022 2021
Federal $ — $ —
4 unchanged sentences
Total income tax expense $ 1,613 $ 1,262
−Removed: * Fiscal 2021 current state tax expense was recorded as general and administrative expense.
The differences between the United States federal statutory tax rate and the Company’s effective tax rate for the years ended March 31, 2024 and 2023 are as follows (in thousands):
−Removed: 2023 2022 2021
Statutory federal tax $ ( 1,578 ) 21 % $ ( 3,162 ) 21 %
3 unchanged sentences
162M executive compensation limit 78 - 1 % 316 - 2 %
−Removed: Restricted stock shortfall/windfall — 0 % ( 617 ) 2 % ( 136 ) 0 %
Change in valuation allowance - Federal 1,866 - 25 % 3,314 - 22 %
1 unchanged sentence
$ 1,613 - 21 % $ 1,262 - 26 %
−Removed: Stock Acquisition Rights, Stock Options and Warrants
−Removed: 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.
−Removed: This 2014 Stock Plan superseded previous stock plans.
−Removed: The Board has reserved 5,027,201 shares of common stock for issuance under the 2014 Stock Plan as of March 31, 2023, of which 502,256 shares are available for future issuance.
−Removed: Historically, the number of shares reserved under the 2014 Stock Plan were increased, based on Board approval, each January 1 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”).
−Removed: 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.
−Removed: On June 14, 2021, the Compensation Committee of the Board approved Amendment No.
−Removed: 1 to 2014 Stock Plan to eliminate the evergreen provision for all future years (i.e., January 1, 2022 through January 1, 2024).
+Added: Stock Compensation
+Added: On August 8, 2023 (the “Effective Date”), the Company adopted a new equity-based compensation plan known as the 2023 Stock Plan.
+Added: The 2023 Stock Plan permits the Company to grant equity compensation awards to employees, consultants and non-employee directors of the Company.
+Added: As of the Effective Date, no additional awards may be granted under the Anterix Inc.
+Added: 2014 Stock Plan (the “2014 Stock Plan”).
+Added: The 2023 Stock Plan authorizes 250,000 shares of common stock of the Company (“Shares”) for grant.
+Added: 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.
+Added: 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
6 unchanged sentences
Non-vested restricted stock outstanding at March 31, 2024 502,574 $ 43.19
−Removed: The following table reflects activity related to our restricted stock for the years ended March 31, 2023, 2022 and 2021:
−Removed: 2023 2022 2021
+Added: The following table reflects activity related to the Company’s restricted stock for the years ended March 31, 2024 and 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
−Removed: The Company recognizes compensation expense for restricted stock on a straight-line basis over the explicit vesting period.
−Removed: 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 $ 9.9 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.
−Removed: 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
−Removed: 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 on the Company’s Consolidated Statements of Operations.
−Removed: As of March 31, 2023, the Company did not incur stock compensation costs to obtain its long-term 900 MHz Broadband Spectrum lease agreements.
−Removed: As of March 31, 2022, the Company incurred stock compensation costs to obtain its long-term 900 MHz Broadband Spectrum lease agreements amounting to approximately $ 0.1 million, which was capitalized and will be amortized over the contractual term of approximately 20-years.
−Removed: 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 2021 bonus liability, recorded in accounts payable and accrued expenses, for key individuals.
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.
3 unchanged sentences
Performance stock outstanding at March 31, 2023 75,049 $ 58.65
+Added: Granted 78,683 30.89
Forfeited/cancelled — —
Performance stock outstanding at March 31, 2024 153,732 $ 44.44
−Removed: The following table reflects activity related to our performance-based restricted stock units for the years ended March 31, 2023, 2022 and 2021:
−Removed: 2023 2022 2021
+Added: The following table reflects activity related to the Company’s performance-based restricted stock units for the years ended March 31, 2024 and 2023:
Weighted-average grant-date fair value per unit granted $ 30.89 $ —
1 unchanged sentence
Outstanding performance stock units included in the table above are shown at target.
−Removed: 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.
−Removed: Performance-Based related to Report and Order and Long-Term Agreement(s)
−Removed: On February 28, 2020, the Company awarded 95,538 performance-based restricted stock units.
−Removed: The performance goals are:
−Removed: (A) Target Goal :
−Removed: 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;
−Removed: (B) Stretch Goal :
−Removed: The remaining 50 % of the performance shares vest and settle upon the occurrence of all three of the following conditions:
−Removed: (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;
−Removed: (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;
−Removed: 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.
−Removed: Additionally, on February 28, 2020, the Company awarded 43,446 performance-based restricted stock units.
−Removed: The performance goal related to these units is:
−Removed: 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.
−Removed: On September 30, 2020, the Company recorded stock compensation expense included in general and administrative expenses reported on the Company’s 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.
−Removed: 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.
−Removed: CEO Performance Units
+Added: 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
−Removed: 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”).
−Removed: 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.
−Removed: The Company recorded approximately $ 0.3 million, $ 0.3 million and $ 0.1 million of stock compensation expense included in general and administrative expenses reported on the Company’s Consolidated Statements of Operations relating to the CEO Performance Units - CSPM for the years ended March 31, 2023, 2022 and 2021, respectively.
−Removed: As of March 31, 2023 and 2022, there was approximately $ 0.8 million and $ 0.8 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 1.49 years and 2.49 years, respectively.
+Added: 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
−Removed: 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”).
9 unchanged sentences
Forfeiture rate — %
−Removed: The Company recorded approximately $ 1.0 million, $ 1.0 million and $ 0.2 million of stock compensation expense relating to the TSR Performance Units for the years ended March 31, 2023, 2022 and 2021, respectively, included in general and administrative expenses reported on the Company’s Consolidated Statements of Operations.
−Removed: As of March 31, 2023 and 2022, there was approximately $ 2.3 million and $ 2.3 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 1.93 years and 2.93 years, respectively.
+Added: 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.
+Added: 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
8 unchanged sentences
Total vested or expected to vest at March 31, 2024 1,616,910 $ 39.51 6.33 $ 4,400,717
−Removed: On December 2, 2022, the Compensation Committee approved the grant of a stock option to the Company’s President and Chief Executive Officer and Executive Chairman for 77,102 and 154,203 , respectively, shares of common stock at an exercise price of $ 49.39 per share.
−Removed: These option shares vest in four equal annual installments measured from the grant date based on the President and Chief Executive Officer and Executive Chairman’s continued services to the Company.
−Removed: The Black-Scholes option model requires weighted average assumptions to be used for the calculation of the Company’s stock compensation expense.
−Removed: The assumptions used for this grant were:
−Removed: the expected life of the award was 5.43 years;
−Removed: the risk free interest rate was 3.62 %;
−Removed: the expected volatility rate was 50.80 %;
−Removed: the expected dividend yield was 0.0 %;
−Removed: and the expected forfeiture rate was 0 %.
−Removed: On May 17, 2022, the Compensation Committee approved the grant of a stock option to the Company’s President and Chief Executive Officer for 122,449 shares of common stock at an exercise price of $ 49.39 per share.
−Removed: 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.
−Removed: The Black-Scholes option model requires weighted average assumptions to be used for the calculation of the Company’s stock compensation expense.
−Removed: The assumptions used for this grant were:
−Removed: the expected life of the award was 5.43 years;
−Removed: the risk free interest rate was 2.95 %;
−Removed: the expected volatility rate was 51.60 %;
−Removed: the expected dividend yield was 0.0 %;
−Removed: and the expected forfeiture rate was 0 %.
−Removed: 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.
−Removed: 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.
−Removed: The Black-Scholes option model requires weighted average assumptions to be used for the calculation of the Company’s stock compensation expense.
−Removed: The assumptions used for this grant were:
−Removed: the expected life of the award was 5.92 years;
−Removed: the risk free interest rate was 0.96 %;
−Removed: the expected volatility rate was 53.45 %;
−Removed: the expected dividend yield was 0.0 %;
−Removed: and the expected forfeiture rate was 0 %.
−Removed: 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.
−Removed: 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.
−Removed: The Black-Scholes option model requires weighted average assumptions to be used for the calculation of the Company’s stock compensation expense.
−Removed: The assumptions used for this grant were:
−Removed: the expected life of the award was 6.02 years;
−Removed: the risk free interest rate was 0.92 %;
−Removed: the expected volatility rate was 53.18 %;
−Removed: the expected dividend yield was 0.0 %;
−Removed: and the expected forfeiture rate was 0 %.
−Removed: 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.
−Removed: 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 on the Company’s Consolidated Statement of Stockholders’ Equity.
−Removed: The intrinsic value of stock options exercised was approximately $ 1.2 million, $ 29.5 million, and $ 5.0 million for the years ended March 31, 2023, 2022 and 2021, respectively.
−Removed: Additional information regarding stock options outstanding at March 31, 2023 is as follows:
−Removed: Prices Number Outstanding Weighted Average Remaining
−Removed: Life in Years Weighted Average
−Removed: Exercise Price Options Exercisable Weighted Average Exercise-Price
−Removed: of Shares Exercisable
−Removed: $ 20.00 — $ 20.00 164,000 1.19 $ 20.00 164,000 $ 20.00
−Removed: 20.01 — 46.23 515,085 4.07 27.79 483,835 27.36
−Removed: 46.24 — 72.85 723,864 8.80 51.52 98,536 53.92
−Removed: 1,402,949 6.17 $ 39.12 746,371 $ 29.25
−Removed: The Company recognizes compensation expense for stock options with a graded vesting schedule using an accelerated method over the explicit vesting period.
−Removed: The fair value of stock options granted is estimated on the date of grant using the Black-Scholes option valuation model.
−Removed: This stock-based compensation expense valuation model requires the Company to make assumptions and judgments regarding the variables used in the calculation.
−Removed: 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.
−Removed: 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.
−Removed: The risk-free interest rate is based on the U.S.
−Removed: Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the stock option.
−Removed: 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.
−Removed: The Company has never paid any cash dividends.
−Removed: 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.
−Removed: Therefore, the Company uses an expected dividend yield of zero in the option-pricing model.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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:
−Removed: Year Ended Year Ended Year Ended
−Removed: March 31, 2023 March 31, 2022 March 31, 2021
+Added: Year Ended Year Ended
+Added: March 31, 2024 March 31, 2023
Risk-free interest rate 3.90 % to 4.22 %
2.95 % to 3.62 %
−Removed: 0.43 % to 0.51 %
Dividend yield — % — %
1 unchanged sentence
50.80 % to 51.60 %
−Removed: 53.41 % to 52.43 %
−Removed: Expected term 5.43 years
−Removed: 5.92 and 6.02 years
+Added: Expected term 5.39 years to 5.72 years
Forfeiture rate — % to 3 %
−Removed: — % — % to 2 %
Weighted-average grant-date fair value per option granted $ 36.10 $ 49.39
−Removed: Stock compensation expense related to the amortization of the fair value of service-based stock options issued was approximately $ 5.6 million, $ 2.6 million and $ 1.3 million, respectively, for the years ended March 31, 2023, 2022 and 2021 which was included in general and administrative reported on the Company’s Consolidated Statements of Operations.
+Added: 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.
−Removed: As of March 31, 2023 and 2022, there was approximately $ 7.4 million and $ 4.1 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 1.68 years and 1.47 years, respectively.
+Added: As of March 31, 2024 and 2023, there was approximately $ 8.2 million and $ 7.4 million, respectively, of unrecognized
+Added: 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
6 unchanged sentences
Performance Options outstanding at March 31, 2024 33,782 $ 46.85
−Removed: The intrinsic value of performance stock options exercised was approximately $ 0.0 million , $ 0.2 million, and $ 0.0 million for the years ended March 31, 2023, 2022 and 2021, respectively.
−Removed: On February 28, 2020, the Company awarded 67,562 performance-based stock options.
−Removed: The performance goals are:
−Removed: (A) Target Goal :
−Removed: 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;
−Removed: (B) Stretch Goal :
−Removed: The remaining 50 % of the performance shares vest and settle upon the occurrence of all three of the following conditions:
−Removed: (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;
−Removed: (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;
−Removed: 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.
−Removed: 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.
−Removed: Additionally, the Company awarded 14,635 performance-based stock options on February 28, 2020.
−Removed: The performance goal is:
−Removed: 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 years ended March 31, 2024 and 2023, there was no stock compensation expense recognized for the 33,782 performance-based stock options.
−Removed: For the year ended March 31, 2021, the Company recognized $ 0.8 million, included in general and administrative expenses reported on the Company’s 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.
−Removed: 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, 2024 and 2023, there was no unvested compensation expense relating to the outstanding performance-based stock options.
Share Repurchase Program
−Removed: 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.
−Removed: 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.
−Removed: The share repurchase program authorization does not obligate the Company to acquire any specific number of shares.
−Removed: 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.
−Removed: The following table presents the share repurchase activity for Fiscal 2023, Fiscal 2022 and Fiscal 2021 (in thousands, except per share data):
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The Company may repurchase shares of its common stock via the open market and/or privately negotiated transactions.
+Added: Repurchases will be made in accordance with applicable securities laws and may be effected pursuant to Rule 10b5-1 trading plans.
+Added: 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.
+Added: The 2023 Share Repurchase Program does not obligate the Company to repurchase any particular amount of its common stock.
+Added: 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.
+Added: Excise tax accrued for the year ended March 31, 2024 was approximately $ 0.2 million.
+Added: 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,
−Removed: 2023 2022 2021
Number of shares repurchased and retired 736 216
6 unchanged sentences
The Company owns 100 % of the Class A Units in the Subsidiary.
−Removed: Motorola had the right at any time to convert its 500,000 Class B Units into 500,000 shares of
−Removed: 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.
+Added: 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”).
6 unchanged sentences
Taxes paid $ 70 $ 14
−Removed: Interest paid — — —
+Added: Operating lease 2,316 2,217
Non-cash investing activity:
1 unchanged sentence
Network equipment provided in exchange for wireless licenses 616 36
−Removed: Non-cash financing activities:
−Removed: Shares surrendered from stock option exercises $ — $ 1,000 $ —
−Removed: Equity payment of prior year accrued employee related expenses — — 1,537
+Added: Deferred gain on sale of intangible assets 4,911 —
+Added: Derecognition of contingent liability related to sale of intangible assets 19,249 —
+Added: Rights of use asset for new leases 645 165
+Added: Rights of use asset for modifications and renewals 1,928 —
During the year ended March 31, 2024, the Company was granted by the FCC, broadband licenses for 28 counties and relinquished to the FCC its narrowband licenses for the same 28 counties.
4 unchanged sentences
See Note 6 Intangible Assets for further discussion on the license exchanges.
−Removed: Contingencies
−Removed: Contingent Liability
+Added: Contingencies and Guaranty
+Added: Contingent Liabilities
In February 2021, the Company entered into an agreement with SDG&E to sell 900 MHz Broadband Spectrum throughout SDG&E’s California service territory, including San Diego and Imperial Counties and portions of Orange County (the “SDG&E Agreement”), for a total payment of $ 50.0 million.
1 unchanged sentence
Delivery of the relevant 900 MHz Broadband Spectrum and the associated broadband licenses by county to SDG&E commenced in Fiscal 2023 and is scheduled for completion before the end of fiscal year 2024.
−Removed: The total payment of $ 50.0 million is comprised of an initial payment of $ 20.0 million, received in February 2021, and the remaining $ 30.0 million payment, which is due through fiscal year 2024 as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to SDG&E.
−Removed: In September 2022, the Company delivered to SDG&E 1.4 x 1.4 cleared 900 MHz Broadband Spectrum and the associated broadband license related to Imperial County and received a milestone payment of $ 0.2 million.
−Removed: A gain or loss on the sale of spectrum will be recognized for each county once the Company delivers the cleared 900 MHz Broadband Spectrum and the associated broadband licenses to SDG&E in full.
−Removed: As the Company is required to refund payments it has received in the event of termination or non-delivery of the specific county’s 900 MHz Broadband Spectrum, it recorded the $ 20.2 million received from SDG&E as contingent liability in the Company’s Consolidated Balance Sheet.
−Removed: As of March 31, 2023, the Company recorded the $ 20.2 million payments from SDG&E as a short-term liability due to the expected timing of delivery.
+Added: The total payment of $ 50.0 million is comprised of an initial payment of $ 20.0 million, received in February 2021 and the remaining payments which are due as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to SDG&E.
+Added: As the Company is required to refund payments it has received from SDG&E in the event of termination or non-delivery of the specific county’s full 900 MHz Broadband Spectrum, it recorded the payments as contingent liability on the Company’s Consolidated Balance Sheets.
+Added: A reduction in the contingent liability and a gain or loss on the sale of spectrum will be recognized for each county once the Company delivers the full cleared 900 MHz Broadband Spectrum and the associated broadband license(s) to SDG&E.
+Added: In September 2022, the Company transferred to SDG&E 1.4 x 1.4 MHz cleared 900 MHz Broadband Spectrum and the associated broadband license related to Imperial County and received a milestone payment of $ 0.2 million.
+Added: In September 2023, the Company transferred to SDG&E the San Diego County broadband license and received a milestone payment of $ 25.2 million net of delivery delay adjustments of $ 1.1 million.
+Added: In December 2023, the Company transferred to SDG&E the remainder of the cleared 900 MHz Broadband Spectrum and the associated broadband license related to Imperial County and received a milestone payment of $ 0.2 million.
+Added: This resulted in the recognition of a gain on the sale of spectrum and derecognition of the contingent liability associated with San Diego County and Imperial County of $ 19.2 million.
+Added: See Note 6 Intangible Assets for further discussion on the sale of intangible assets.
+Added: Subsequent to the derecognition of the contingent liability related to the delivery of San Diego County and Imperial County licenses, the remaining contingent liability related to SDG&E of $ 1.0 million for Orange County was classified as a short-term liability due to the expected timing of delivery.
+Added: LCRA Refund Obligation
+Added: In April 2023, the Company entered into the LCRA Agreement for a total payment of $ 30.0 million, to be paid through fiscal year 2026 pursuant to the terms of the agreement.
+Added: During the quarter ended December 31, 2023, the Company received $ 15.0 million in milestone payments, of which $ 7.5 million was deposited in an escrow account.
+Added: The remaining payments are due as the Company delivers the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to LCRA.
+Added: As the Company is required to refund the deposit it has received from LCRA in the event of termination or non-delivery of the specific county’s full cleared 900 MHz Broadband Spectrum, it recorded the payments as contingent liability on the Company’s Consolidated Balance Sheets.
+Added: A reduction in the contingent liability and a gain or loss on the sale of spectrum will be recognized for each county once the Company delivers the full cleared 900 MHz Broadband Spectrum and the associated broadband license(s) to LCRA.
+Added: See Note 5 Escrow Deposits for further discussion on the escrow deposit.
Xcel Energy Guaranty
+Added: In October 2022, the Company entered into an agreement with Xcel Energy providing Xcel Energy dedicated long-term usage of the Company’s 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states the Xcel Energy Agreement.
In connection with Xcel Energy Agreement, the Company entered into a guaranty agreement, under which the Company guaranteed the delivery of the relevant 900 MHz Broadband Spectrum and the associated broadband licenses in Xcel Energy’s service territory in eight states along with other commercial obligations.
In the event of default or non-delivery of the specific territory’s 900 MHz Broadband Spectrum, the Company is required to refund payments it has received.
−Removed: In addition, to the extent Anterix has performed any obligations, the Company’s liability and remaining obligations under the Xcel Energy
−Removed: Agreement will extend only to the remaining unperformed obligations.
−Removed: The Company recorded $ 8.0 million in deferred revenue in connection with the prepayment received as delivery of the relevant cleared 900 MHz Broadband licenses or counties is expected to commence in the first quarter of Fiscal 2024 through 2029.
+Added: In addition, to the extent Anterix has performed any obligations, the Company’s liability and remaining obligations under the Xcel Energy Agreement will extend only to the remaining unperformed obligations.
+Added: The Company recorded $ 67.1 million in deferred revenue in connection with the prepayments received as of March 31, 2024.
+Added: The Company commenced delivery of the relevant cleared 900 MHz Broadband Spectrum and the associated broadband leases in the first quarter of fiscal year 2024 and will continue through 2029.
As of March 31, 2024, the maximum potential liability of future undiscounted payments under this agreement is approximately $ 65.2 million.
11 unchanged sentences
Pandemic and Macroeconomic Conditions
−Removed: In December 2020, the Company deferred payroll taxes under the Coronavirus Aid Relief and Economic Security Act, which was signed into law on March 27, 2020.
−Removed: The deferral amounted to approximately $ 0.3 million, which has assisted the Company in managing the financial impact caused by the pandemic.
−Removed: Of the total deferred, approximately $ 0.2 million was remitted to the IRS during Fiscal 2022, with the remaining amount remitted to the IRS during Fiscal 2023.
−Removed: Recent macroeconomic events, including the outbreak of COVID-19, inflation, and geopolitical matters, have increased operating costs and could increase production costs or result in delays in customer contracting or the availability of equipment necessary for the deployment of our target customers’ planned PLTE projects.
+Added: Recent macroeconomic events, inflation, and geopolitical matters, have increased operating costs or resulted in delays in customer contracting or impacted the availability of equipment necessary for the deployment of the Company’s target customers’ planned PLTE projects.
The Company continues to closely monitor these risks.
−Removed: Although difficult to quantify, the Company believes the current macroeconomic environment, including inflation, may have an adverse effect on the Company’s target customers’ businesses, which may harm the Company’s commercialization efforts and negatively impact the Company’s revenues.
−Removed: If the Company is not able to control its higher operating costs or if the Company’s commercialization efforts are slowed or negatively impacted, continued periods of high inflation could have a material adverse effect on the Company’s business, operating results and financial condition.
+Added: Although difficult to quantify, the Company believes the current macroeconomic environment, including inflation, may have an adverse effect on the Company’s target customers’ businesses, which may harm the Company’s commercialization efforts and negatively impact the Company’s revenues and liquidity.
+Added: If the Company is not able to control its operating costs or if the Company’s commercialization efforts are slowed or negatively impacted, continued periods of high inflation could have a material adverse effect on the Company’s business, operating results and financial condition.
Subsequent Events
−Removed: LCRA Agreement
−Removed: In April 2023, the Company entered into an agreement with the Lower Colorado River Authority (“LCRA”) to sell 900 MHz Broadband Spectrum covering 68 counties and more than 30 cities in LCRA’s wholesale electric, transmission, and water service area (the “LCRA Agreement”) for total payments of $ 30.0 million plus the contribution of select LCRA 900 MHz narrowband spectrum.
−Removed: The LCRA Agreement will support LCRA’s deployment of a PLTE network which will provide a host of capabilities including grid awareness, communications and operational intelligence that will enhance resilience and spur innovation at LCRA.
+Added: Oncor Agreement
+Added: On June 26, 2024, the Company entered into a license purchase agreement with Oncor Electric Delivery Company LLC (“Oncor”) for total estimated consideration of $ 102.5 million under which Oncor will purchase 900 MHz spectrum licenses covering 95 counties to deploy a private wireless broadband network in its transmission and distribution service area (the “Oncor Agreement”).
+Added: The timing and rights to milestone payments could vary as 900 MHz broadband licenses are granted by the FCC, broadband licenses are assigned to Oncor, and incumbents are cleared by the Company.
+Added: Oncor operates more than 143,000 circuit miles of transmission and distribution lines in Texas, delivering electricity to more than four million homes and businesses across a service territory that has an estimated population of approximately 13 million people.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.