Digital Turbine, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Capital Stock Transactions

Number of Warrants Outstanding

Weighted-Average Exercise Price

Outstanding as of March 31, 2018

Outstanding as of December 31, 2018

Capital Stock Transactions

9 Months Ended

Dec. 31, 2018

Preferred Stock

There are 2,000,000 shares of Series A Convertible Preferred Stock, $0.0001 par value per share (“Series A”), authorized and 100,000 shares of Series A issued and outstanding, which are currently convertible into 20,000 shares of common stock. The Series A holders are entitled to: (1) vote on an equal per-share basis as common stock, (2) dividends paid to the common stock holders on an if-converted basis and (3) a liquidation preference equal to the greater of $10 per share of Series A (subject to adjustment) or such amount that would have been paid to the common stock holders on an if-converted basis.

Common Stock and Warrants

For the nine months ended December 31, 2018, the Company issued 316,784 shares of common stock for the exercise of employee options.

The following table provides activity for warrants issued and outstanding during the nine months ended December 31, 2018:

Restricted Stock Agreements

From time to time, the Company enters into restricted stock agreements (“RSAs”) with certain employees, directors, and consultants. The RSAs have performance conditions, market conditions, time conditions, or a combination thereof. In some cases, once the stock vests, the individual is restricted from selling the shares of stock for a certain defined period, from three months to two years, depending on the terms of the RSA. As reported in our Current Reports on Form 8-K filed with the SEC on February 19, 2014 and June 25, 2014, the Company adopted a Board Member Equity Ownership Policy that supersedes any post-vesting lock-up in RSAs that are applicable to people covered by the policy, which includes the Company’s Board of Directors and Chief Executive Officer.

Service and Time Condition RSAs

Awards of restricted stock are grants of restricted stock that are issued at no cost to the recipient. The cost of these awards is determined using the fair market value of the Company’s common stock on the date of the grant. Compensation expense for restricted stock awards with a service condition is recognized on a straight-line basis over the requisite service period.

In June 2018, the Company issued 232,558 restricted shares to its Chief Executive Officer and Chief Financial Officer. The shares vest over three years. The fair value of the shares on the date of issuance was $400.

In August 2018, the Company issued 306,655 restricted shares to its Board of Directors for their next annual service period. The shares vest quarterly over one year. The fair value of the shares on the date of issuance was $426.

With respect to time condition RSAs, the Company expensed $123 and $365 during the three and nine months ended December 31, 2018, respectively, and $157 and $223 during the three and nine months ended December 31, 2017, respectively.

The following is a summary of restricted stock awards and activities for all vesting conditions for the nine months ended December 31, 2018:



	Number of Shares		Weighted-Average Grant Date Fair Value
Unvested restricted stock outstanding as of March 31, 2018	132,569		1.09
Granted	539,213		1.53
Vested	(209,233	)	1.20
Unvested restricted stock outstanding as of December 31, 2018	462,549		1.56

All restricted shares, vested and unvested, cancellable and not cancelled, have been included in the outstanding shares as of December 31, 2018.

At December 31, 2018, there was $610 of unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested restricted stock awards expected to be recognized over a weighted-average period of approximately 1.72 years.