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Stockholders' Equity
 9 Months Ended
Sep. 30, 2022
Equity [Abstract]  
Stockholders' Equity STOCKHOLDERS' EQUITY
General
Our authorized capital stock consists of 75 million shares of common stock, par value $0.0001 per share, and 25 million shares of preferred stock, par value $0.0001 per share.
At September 30, 2022, and December 31, 2021, we had no stock options outstanding.
At September 30, 2022, and December 31, 2021, there were 19,693,657 and 19,828,033 shares of common stock outstanding, respectively, and no shares of preferred stock outstanding.
Dividends
Cash distributions to stockholders, as disclosed in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022, and 2021, include previously declared cash dividends on shares of vested restricted common stock ("restricted stock") issued to our non-executive directors and dividends related to vested restricted stock units ("RSUs") issued to eligible employees. Cash dividends on RSUs and restricted stock have been accrued and are paid when the applicable vesting conditions are met. Accrued cash dividends on forfeited restricted stock and RSUs are also forfeited. The following table details our cash dividends declared and paid in 2022 through the date hereof:
(Dollars in thousands)
Declaration DateRecord DatePayment DatePer Share Amount
Total Declared(1)
    
February 16, 2022March 16, 2022March 30, 2022$0.3125 $6,513 
April 27, 2022May 25, 2022June 24, 20220.3125 6,357 
July 27, 2022August 17, 2022September 9, 20220.3125 6,461 
Total$0.9375 $19,331 
(1) The total declared reflects the cash dividends declared in relation to common stock, deferred stock units ("DSUs") and unvested RSUs.
On October 26, 2022, our Board of Directors declared a regular quarterly cash dividend of $0.3125 per share of common stock with a record date of November 16, 2022, and a payment date of December 9, 2022. Cash dividends related to common stock of approximately $6.2 million will be paid from available cash on hand.
Common Stock Repurchase Program
On February 16, 2022, our Board of Directors authorized a share repurchase program for up to $10 million of the Company’s common stock. Under the repurchase program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, legal requirements and other considerations. The repurchase program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. For the nine months ended September 30, 2022, we did not repurchase any common stock.
Net Income (Loss) per Common Share
Basic net income (loss) per common share is computed on the basis of the weighted average common shares outstanding. Diluted net income (loss) per common share is computed on the basis of the weighted average common shares outstanding plus the effect of all potentially dilutive common shares, including outstanding restricted stock and RSUs, which are treated as contingently issuable shares, using the “treasury stock” method.
The components of basic and diluted net income (loss) per common share were as follows for the periods stated:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(in thousands, except for share and per share amounts)2022202120222021
Numerator:
Net income (loss)$2,920 $(2,494)$(2,370)$(5,510)
Denominator:
Basic weighted average common shares outstanding19,693,659 19,464,893 19,661,849 19,378,543 
Diluted weighted average common shares outstanding19,901,267 19,464,893 19,661,849 19,378,543 
Basic and diluted net income (loss) per common share$0.15 $(0.13)$(0.12)$(0.28)
For the three and nine months ended September 30, 2022, and 2021 the following securities were excluded from the calculation of diluted shares outstanding as the effect would have been anti-dilutive:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Restricted stock units— 197,900 290,800 341,443 
Stock-Based Compensation Plans
On March 23, 2012, our Board of Directors adopted the Spok Holdings, Inc. 2012 Equity Incentive Award Plan (the “2012 Equity Plan”) that our stockholders subsequently approved on May 16, 2012. A total of 2,194,986 shares of common stock were reserved for issuance under this plan.
On April 29, 2020, our Board of Directors adopted the Spok Holdings, Inc. 2020 Equity Incentive Award Plan (the “2020 Equity Plan” and, together with the 2012 Equity Plan, the "Equity Plans") that our stockholders subsequently approved on July 28, 2020. At July 28, 2020, a total of 1,699,950 shares of common stock had been reserved for issuance under the Equity Plans, including 1,600,000 shares available under the 2020 Equity Plan and 99,950 shares which, as of the stockholders approval date, remained available for issuance under the 2012 Equity Plan. No further grants will be made under the 2012 Equity Plan, although, the 2012 Equity Plan continues to govern all outstanding awards thereunder.
Awards under the 2020 Equity Plan may be in the form of stock options, restricted common stock, RSUs, performance awards, dividend equivalents, stock payment awards, deferred stock, DSUs, stock appreciation rights or other stock or cash-based awards.
Restricted stock awards generally vest one year from the date of grant. Related dividends accumulate during the vesting period and are paid at the time of vesting.
Contingent RSUs generally vest over a three-year performance period upon successful completion of the performance objectives. Non-contingent RSUs generally vest in thirds, annually, over a three-year period. Dividend equivalent rights generally accompany each RSU award and those rights accumulate and vest along with the underlying RSU.
Dividend equivalent rights generally accompany each DSU award and are paid to participants in cash on the Company's applicable dividend payment date whether the DSU is vested or unvested. The dividend equivalent right associated with a DSU continues until delivery of the underlying shares of common stock is made.
Payment of the underlying shares of common stock occurs at the earliest of a participant's separation from service, disability, death, or a change in control. Any shares subject to an award under the 2012 Equity Plan that are forfeited or expire will be available for the future grant of awards under the 2020 Equity Plan. As of September 30, 2022, there was an aggregate of 247,123 unvested RSUs under the 2012 Equity Plan.
The following table summarizes the activities under the Equity Plans from January 1, 2022, through September 30, 2022:
 Activity
Total equity securities available at January 1, 2022990,129 
RSU, DSU, and restricted stock awarded to eligible employees, net of forfeitures(299,447)
Total equity securities available at September 30, 2022690,682 
The following table details activities with respect to outstanding RSUs, DSUs, and restricted stock under the Equity Plans for the nine months ended September 30, 2022:
SharesWeighted
Average Grant
Date Fair Value
Unvested at January 1, 2022771,171 $11.24 
Granted454,429 8.65 
Vested(70,429)10.24 
Forfeited(154,982)10.96 
Unvested at September 30, 20221,000,189 $10.18 
Of the 1,000,189 unvested RSUs, DSUs and restricted stock outstanding at September 30, 2022, 531,685 RSUs include contingent performance requirements for vesting purposes. At September 30, 2022, there was $3.4 million of unrecognized net compensation cost related to RSUs and restricted stock, which is expected to be recognized over a weighted average period of 1.7 years.
For the first three quarters of 2021, qualified employees received a portion of their compensation in the form of shares of the Company's common stock in lieu of cash. These awards were made in advance on a quarterly basis and vested immediately. For the nine months ended September 30, 2021, 169,944 shares of common stock were issued, with a weighted average grant date fair value of $10.87.
Employee Stock Purchase Plan
In 2016, our Board of Directors adopted the Spok Holdings, Inc. Employee Stock Purchase Plan (the "ESPP") that our stockholders subsequently approved on July 25, 2016. A total of 250,000 shares of common stock were reserved for issuance under this plan.
The ESPP allows employees to purchase shares of common stock at a discounted rate, subject to plan limitations. Under the ESPP, eligible participants can voluntarily elect to have contributions withheld from their pay for the duration of an offering period, subject to the ESPP limits. At the end of an offering period, contributions will be used to purchase the Company's common stock at a discount to the market price based on the first or last day of the offering period, whichever is lower.
Participants are required to hold common stock for a minimum period of two years from the grant date. Participants will begin earning dividends on shares after the purchase date. Each offering period will generally last for no longer than six months. Once an offering period begins, participants cannot adjust their withholding amount. If a participant chooses to withdraw, any previously withheld funds will be returned to the participant, with no stock purchased, and that participant will be eligible to participate in the ESPP during the next offering period. If the participant terminates employment with the Company during the offering period, all contributions will be returned to the employee and no stock will be purchased.
The Company uses the Black-Scholes model to calculate the fair value of the common stock to be purchased during each offering period on the offer date. The Black-Scholes model requires the use of estimates for the expected term, the
expected volatility of the underlying common stock over the expected term, the risk-free interest rate and the expected dividend payment.
For the nine months ended September 30, 2022, no shares of the Company's stock were purchased, as compared to 16,015 shares purchased for a total cost of $0.1 million during the same period in 2021 . The following table summarizes the activities under the ESPP from January 1, 2022, through September 30, 2022:
 Activity
Total ESPP equity securities available at January 1, 2022133,184 
ESPP common stock purchased by eligible employees— 
Total ESPP securities available at September 30, 2022133,184 
Amounts withheld from participants will be classified as accrued compensation and benefits in the Condensed Consolidated Balance Sheets until funds are used to purchase shares. This liability amount is immaterial to the Condensed Consolidated Financial Statements.
Stock-Based Compensation Expense
We record all stock-based compensation, which consist of RSUs, DSUs, restricted stock, equity in lieu of salary, and the option to purchase common stock under the ESPP, at fair value as of the grant date. Stock-based compensation expense is recognized based on a straight-line amortization basis over the respective service period. Forfeitures and withdrawals are accounted for as incurred.
The following table reflects the items for stock-based compensation expense in the Condensed Consolidated Statements of Operations for the periods stated:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Dollars in thousands)2022202120222021
Performance-based RSUs$362 $447 $1,205 $1,202 
Time-based RSUs, DSUs and restricted stock515 939 1,748 2,920 
Equity in lieu of salary— 607 — 1,847 
ESPP— 23 — 67 
Total stock-based compensation$877 $2,016 $2,953 $6,036