Digital Turbine, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Capital Stock Transactions

Capital Stock Transactions

12 Months Ended

Mar. 31, 2019

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 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 as 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 as if-converted basis.

Common Stock and Warrants

For the years ended March 31, 2019 and 2018, the Company issued 524,817 and 258,281 shares, respectively, of common stock for the exercise of employee options.

For the years ended March 31, 2019 and 2018, the Company issued 0 and 100,000 shares, respectively, of common stock for the exercise of options granted for services rendered.

For the years ended March 31, 2019 and 2018, the Company issued 4,446,265 and 8,624,445 shares, respectively, of common stock to the holders of those Notes in exchange for the extinguishment of the Notes. Refer to Note 9 "Debt" and Note 10 "Fair Value Measurements" for more details.

In September 2016, in connection with the issuance of the Notes, the Company issued 250,000 and 4,105,600 warrants to the initial purchaser and holders of the Notes, respectively. The warrants are immediately exercisable on the date of issuance at an initial exercise price of $1.364 per share and will expire on September 23, 2020. The exercise price is subject to proportional adjustment for adjustments to outstanding common stock and anti-dilution provisions in case of dividends or distributions, stock split or combination, or if the Company issues or sells shares of common stock at a price per share less than the conversion price on the trading day immediately preceding such issuance of sale. Refer to Note 10 "Fair Value Measurements" for more details.

For the years ended March 31, 2019 and 2018, the Company issued 333,924 and 256,600 shares, respectively, of common stock to the holders of these warrants upon exercise.

Additionally, during the year ended March 31, 2018, the Company issued 9,552 shares of common stock in exchange for the cashless exercise of 30,000 previously issued warrants for services rendered. No shares of common stock were issued in exchange for the exercise of warrants issued for services rendered during the year ended March 31, 2019.

With respect to warrants for services rendered, the Company expensed $0 during the year ended March 31, 2019, and recorded $28 warrant expense during the year ended March 31, 2018.

The following table provides activity for warrants issued and outstanding during the year ended March 31, 2019:



	Number of Warrants Outstanding		Weighted-Average Exercise Price
Outstanding as of March 31, 2018	4,536,857		$	1.56
Issued	—		—
Exercised	(484,900	)	1.36
Canceled/Expired	(412,857	)	3.43
Outstanding as of March 31, 2019	3,639,100		$	1.37

Restricted Stock Agreements

From time to time, the Company enters into restricted stock agreements (“RSAs”) with certain employees 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 12, 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.

During the years ended March 31, 2019 and 2018, the Company issued 306,655 and 265,138 restricted shares, respectively, to its directors for services. The shares vest over 1 year.

With respect to RSAs, during the years ended March 31, 2019, 2018, and 2017, the Company expensed $520, $323, and $398 related to time condition RSAs, respectively. As of March 31, 2019, 153,328 shares remain unvested.

During the year ended March 31, 2019, the Company entered into restricted stock units (RSU) agreements with certain officers of the Company to issue 232,558 shares of common stock upon vesting. As of March 31, 2019, no RSUs related to these agreements were vested. Therefore, no shares of common stock were issued in connection with these RSU agreements.

The following is a summary of restricted stock awards and activities for all vesting conditions for the years ended March 31, 2019 and 2018, respectively:



	Number of Shares		Weighted-Average Grant Date Fair Value
Unvested restricted stock outstanding as of March 31, 2017	139,318		$	1.10
Granted	265,138		1.09
Vested	(271,887	)	1.10
Cancelled	—		—
Unvested restricted stock outstanding as of March 31, 2018	132,569		1.09
Granted	306,655		1.39
Vested	(285,896	)	1.24
Cancelled	—		—
Unvested restricted stock outstanding as of March 31, 2019	153,328		$	1.39

All restricted shares, vested and unvested, cancellable and not cancelled, have been included in the outstanding shares as of March 31, 2019.

At March 31, 2019 and March 31, 2018, there was $144 and $97, respectively, of unrecognized stock-based compensation expense, net of estimated forfeitures, related to unvested restricted stock awards expected to be recognized over a weighted-average period of approximately 0.34 and 0.33 years, respectively.