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Anterix Inc.

Anterix Inc.ATEXEarnings & Financial Report

Nasdaq · Communication Services · Telephone Communications (No Radiotelephone)

Anterix Inc. is a U.S.-headquartered wireless communications company that owns licensed 900 MHz spectrum assets, providing secure, dedicated private broadband network solutions for critical infrastructure operators including electric utilities, public safety agencies, and transportation providers. Its primary market is North America, supporting clients requiring highly reliable connectivity for mission-critical operations.

What changed in Anterix Inc.'s 10-K — 2023 vs 2024

Top changes in Anterix Inc.'s 2024 10-K

299 paragraphs added · 297 removed · 209 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

77 edited+29 added−35 removed104 unchanged
Additionally, our senior executives, engineering, technology, commercial sales operations and marketing teams support our sales efforts through presentations, branded participation through sponsorships and speaking engagements at major trade events, associations and organizations, customer meetings, collateral, and product demonstrations to expand our reach and brand awareness.
Additionally, our senior executives, engineering, technology, commercial operations and marketing teams support our sales efforts through presentations, branded participation through sponsorships and speaking engagements at major trade events, associations and organizations, customer meetings, collateral, and product demonstrations to expand our reach and brand awareness.
Accordingly, our approach to driving the second key prong of our strategy includes: 1) advancing our potential customers through the pipeline by assisting them with their decisions and evaluation process of private wireless networks; 2) encouraging federal and state agencies to support the investment and deployment of PLTE solutions in the 900 MHz band by utilities and critical infrastructure companies; 3) participating in demonstrations and tests with laboratories such as National Renewable Energy Lab (“NREL”) and National Institute of Standards and Technology (“NIST”) to validate the benefits of PLTE systems; 4) developing expanded value-added business offerings; 5) enabling and growing the AAEP; 6) participating in UBBA and other relevant industry associations to promote our solution; and 7) continually evaluating potential opportunities to expand the application of private wireless broadband networks built on 900 MHz spectrum.
Accordingly, our approach to driving the second key prong of our strategy includes: 1) advancing our potential customers through the pipeline by assisting them with their decisions and evaluation process of private wireless networks; 2) encouraging federal and state agencies to support the investment and deployment of PLTE solutions in the 900 MHz band by utilities and critical infrastructure companies; 3) participating in demonstrations and tests with laboratories such as National Renewable Energy Lab (“NREL”), Pacific Northwest National Lab and National Institute of Standards and Technology (“NIST”) to validate the benefits of PLTE systems; 4) developing expanded value-added business offerings; 5) enabling and growing the AAEP; 6) participating in UBBA and other relevant industry associations to promote our solution; and 7) continually evaluating potential opportunities to expand the application of private wireless broadband networks built on 900 MHz Broadband Spectrum.
To achieve this conversion, we are focused on intentionally clearing incumbents out of the broadband license segment and obtaining broadband licenses in those counties (i) in which we have customer contracts, (ii) where we believe we have near-term commercial prospects, or (iii) may be strategically advantageous to achieve optimum costs for broadband licenses over time.
To achieve this conversion, we are focused on intentionally clearing incumbents out of the broadband license segment and obtaining broadband licenses in counties (i) which we have customer contracts, (ii) where we believe we have near-term commercial prospects, or (iii) may be strategically advantageous to achieve optimum costs for broadband licenses over time.
We are working with incumbents to clear the 900 MHz Broadband Spectrum allocation in Ameren’s service territory. In accordance with ASC 606 Revenue from Contracts with Customers, the payments of prepaid fees under the Ameren Agreements will be accounted for as deferred revenue on our Consolidated Balance Sheets.
We are working with the remaining incumbents to clear the 900 MHz Broadband Spectrum allocation in Ameren’s service territory. In accordance with ASC 606 Revenue from Contracts with Customers, the payments of prepaid fees under the Ameren Agreements will be accounted for as deferred revenue on our Consolidated Balance Sheets.
In addition, the FCC never auctioned the 20 blocks of B/ILT spectrum in some parts of the United States, therefore no users acquired site-based licenses utilizing this spectrum. As a result, the FCC is currently holding over 20% of 900 MHz narrowband spectrum in its inventory in most counties throughout the United States.
In addition, the FCC never auctioned the 20 blocks of B/ILT spectrum in some parts of the United States, therefore no users acquired site-based licenses utilizing this spectrum. As a result, the FCC is currently holding over 24% of 900 MHz narrowband spectrum in its inventory in most counties throughout the United States.
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.
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.
We have been proactive in this effort and to date have completed, and intend to continue to pursue, spectrum transactions to support our efforts to satisfy the broadband license eligibility requirements. Clear Covered Incumbents We have been proactive in our clearing efforts in preparation for the broadband licensing process.
We have been proactive in this effort and to date have completed, and intend to continue to pursue, spectrum transactions to support our efforts to satisfy the broadband license Eligibility Certification requirements. Clear Covered Incumbents We have been proactive in our clearing efforts in preparation for the broadband licensing process.
We also worked with an FCC certification testing lab to develop testing protocols to enable quick certification of Band 8 devices for use in the United States. The benefit of working with a global standard is that many existing devices, network components, and solutions are well suited for the working environment of our targeted critical infrastructure and enterprise customers.
We also worked with an FCC certification testing lab to develop testing protocols to enable quick certification of devices for use in the United States. The benefit of working with a global standard is that many existing devices, network components, and solutions are well suited for the working environment of our targeted critical infrastructure and enterprise customers.
During this Mandatory Retuning period, any Covered Incumbents that remain in the broadband segment (other than Complex Systems) are required to negotiate in good faith with the broadband applicant to sell their channels or otherwise clear the broadband segment, subject to intervention by the FCC if the parties cannot reach an agreement.
During this Mandatory Retuning period, any Covered Incumbents that remain in the broadband segment (other than Complex Systems) are required to negotiate in good faith with the broadband applicant to sell their channels or otherwise clear the 900 MHz Broadband Segment, subject to intervention by the FCC if the parties cannot reach an agreement.
The remaining prepayments for the 20-year initial term are due by mid-2028, per the terms of the Xcel Energy Agreement and as we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses. We are working with incumbents to clear the 900 MHz Broadband Spectrum allocation in Xcel Energy service territories.
The remaining prepayments for the 20-year initial term are due by mid-2028, per the terms of the Xcel Energy Agreement and as we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband leases. We are working with the remaining incumbents to clear the 900 MHz Broadband Spectrum allocation in Xcel Energy service territories.
For purposes of our broadband Page 14 Table of Contents license eligibility, any potential acquisitions we negotiate in the 900 MHz band may be included as part of our broadband application, but the acquisition does not need to be consummated at the time we submit our broadband license application. 2. Spectrum Retuning.
For purposes of our broadband license eligibility, any potential acquisitions we negotiate in the 900 MHz band may be included as part of our broadband application, but the acquisition does not need to be consummated at the time we submit our broadband license application. Page 16 Table of Contents 2. Spectrum Retuning.
Subsequently, the FCC conducted overlay auctions on the SMR designated blocks that awarded geographic-based licenses on an MTA basis while affording operational protection to incumbent, site-based licensees in those areas. Certain MTA licenses were not purchased at auction or have been returned to the FCC.
Subsequently, the FCC conducted overlay auctions on the SMR designated blocks that awarded geographic-based licenses on an MTA basis while affording operational protection to incumbent, site-based licensees in those areas. Certain MTA licenses were not purchased at auction and have been returned to the FCC.
The remaining prepayments of $24.8 million, excluding potential penalties, for the 30-year initial term are due by mid-2026, per the terms of the Ameren Agreements and as we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses.
The remaining prepayments of $24.8 million, excluding potential penalties, for the 30-year initial term are due by mid-2026, per the terms of the Ameren Agreements and as we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband leases.
Page 13 Table of Contents Costs of Securing Broadband Licenses As discussed above, to obtain a broadband license in a county, the broadband applicant must satisfy (i) the 50% Licensed Spectrum Test, (ii) the 90% Broadband Segment Test and (iii) the 240 Channel Requirement.
Page 15 Table of Contents Costs of Securing Broadband Licenses As discussed above, to obtain a broadband license in a county, the broadband applicant must satisfy (i) the 50% Licensed Spectrum Test, (ii) the 90% Broadband Segment Test and (iii) the 240 Channel Requirement.
Business Development We have invested in building our business development, sales, marketing and other supporting teams, which include both external and internal resources, to help foster our evolving customer relationships in furtherance of growing and maturing our pipeline.
Commercial Success We have invested in building our business development, sales, marketing and other supporting teams, which include both external and internal resources, to help foster our evolving customer relationships in furtherance of growing and maturing our pipeline.
MAP 3 below illustrates our licensed holdings and licensed holdings we have under contract by county in the 6 MHz broadband segment created by the Report and Order. This map does not reflect licenses that may meet the protection criteria as that is evaluated on a county basis as each broadband transition plan is prepared. 3. 240 Channel Requirement.
MAP 3 below illustrates our licensed holdings and licensed holdings we have under contract by county in the 6 MHz broadband segment created by the Report and Order. This map does not reflect licenses that may meet the protection criteria as that is evaluated on a county basis as each broadband transition plan is prepared.
Broadband License Eligibility Requirements The Report and Order establishes three eligibility requirements to obtain broadband licenses in a county, which we refer to herein as (i) the “50% Licensed Spectrum Test,” (ii) the “90% Broadband Segment Test” and (iii) the “240 Channel Requirement.” Treatment of Complex Systems The Report and Order exempts Complex Systems from the Mandatory Retuning process, even when a broadband applicant meets the 90% Broadband Segment Test, because retuning these systems would potentially be disruptive to the operators.
Broadband License Eligibility Requirements The Report and Order establishes three eligibility requirements to obtain broadband licenses in a county, which we refer to herein as (i) the “50% Licensed Spectrum Test,” (ii) the “90% Broadband Segment Test” and (iii) the “240 Channel Requirement.” Page 12 Table of Contents Treatment of Complex Systems The Report and Order exempts Complex Systems from the Mandatory Retuning process, even when a broadband applicant meets the 90% Broadband Segment Test, because retuning these systems would potentially be disruptive to the operators.
However, we may be subject to other FCC regulations that impose obligations on wireless providers, such as Federal Universal Service Fund obligations, which require communications providers to contribute to a fund that supports subsidized communications services to underserved areas and users; rules governing billing, subscriber privacy and customer proprietary network information; roaming obligations; Page 15 Table of Contents rules that require wireless service providers to configure their networks to facilitate electronic surveillance by law enforcement officials; rules governing spam, telemarketing and truth-in-billing and rules requiring us to offer equipment and services that are accessible to and usable by persons with disabilities, among others.
However, we may be subject to other FCC regulations that impose obligations on wireless providers, such as Federal Universal Service Fund obligations, which require communications providers to contribute to a fund that supports subsidized communications services to underserved areas and users; rules governing billing, subscriber privacy and customer proprietary network information; roaming obligations; rules that require wireless service providers to configure their networks to facilitate electronic surveillance by law enforcement officials; rules governing spam, telemarketing and truth-in-billing and rules requiring us to offer equipment and services that are accessible to and usable by persons with disabilities, among others.
MAP 1 below illustrates the nine current Complex Systems. The Association of American Railroads The nation’s railroads, particularly the major freight lines, operate on six narrowband 900 MHz channels licensed to their trade association, the Association of American Railroads (“AAR”). Three of these narrowband channels are located in the 900 MHz broadband segment created by the FCC.
MAP 1 below illustrates the remaining eight current Complex Systems. The Association of American Railroads The nation’s railroads, particularly the major freight lines, operate on six narrowband 900 MHz channels licensed to their trade association, the Association of American Railroads (“AAR”). Three of these narrowband channels are located in the 900 MHz Broadband Segment created by the FCC.
Xcel Energy Agreement In October 2022, we entered into an agreement with Xcel Energy providing Xcel Energy dedicated long-term usage of our 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states (the “Xcel Page 7 Table of Contents Energy Agreement”) including Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin.
Xcel Energy Agreement In October 2022, we entered into an agreement with Xcel Energy providing Xcel Energy dedicated long-term usage of our 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states (the “Xcel Energy Agreement”) including Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin.
Long-Term Leases of 900 MHz Broadband Spectrum Ameren Agreements In December 2020, we entered into our first long-term 900 MHz Broadband Spectrum lease agreements (the “Ameren Agreements”) covering Ameren’s service territories. 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.
Page 8 Table of Contents Long-Term Leases of 900 MHz Broadband Spectrum Ameren Agreements In December 2020, we entered into our first long-term 900 MHz Broadband Spectrum lease agreements (the “Ameren Agreements”) covering Ameren’s service territories. 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.
FIGURE I Page 10 Table of Contents The Role of the County Under the Report and Order, the FCC established the “county” as the base unit of measure in determining whether a broadband applicant is eligible to secure a broadband license. There are 3,233 counties in the United States, including Puerto Rico and other U.S. territories.
FIGURE I The Role of the County Under the Report and Order, the FCC established the “county” as the base unit of measure in determining whether a broadband applicant is eligible to secure a broadband license. There are 3,233 counties in the United States, including Puerto Rico and other U.S. territories.
The Ameren Agreements are subject to customary provisions regarding remedies for non-delivery, including refund of amounts paid and termination rights if we fail to perform our contractual obligations, including failure to deliver the relevant cleared 900 MHz Broadband Page 6 Table of Contents Spectrum in accordance with the terms of the Ameren Agreements.
The Ameren Agreements are subject to customary provisions regarding remedies for non-delivery, including refund of amounts paid and termination rights if we fail to perform our contractual obligations, including failure to deliver the relevant cleared 900 MHz Broadband Spectrum in accordance with the terms of the Ameren Agreements.
The FCC has licensed less than the maximum number of 399 channels in all but the most populous counties. Because the 50% Licensed Spectrum Test is based on licensed channels, any channels that are not licensed by the FCC are not included in the denominator when determining whether the broadband applicant has satisfied this test.
The FCC has licensed less than the maximum number of 399 channels in all but the most populous counties. Because the 50% Licensed Spectrum Test is based on licensed channels, any channels that are not licensed by the FCC are not included in the denominator when determining whether the Page 13 Table of Contents broadband applicant has satisfied this test.
There are also pending proceedings that may affect spectrum aggregation limits and/or adjustment of the FCC’s case-by-case spectrum screens; regulation surrounding the deployment of advanced wireless broadband infrastructure; the imposition of text-to-911 capabilities; and the transition to IP networks, among others.
There are also pending proceedings that may affect Page 17 Table of Contents spectrum aggregation limits and/or adjustment of the FCC’s case-by-case spectrum screens; regulation surrounding the deployment of advanced wireless broadband infrastructure; the imposition of text-to-911 capabilities; and the transition to IP networks, among others.
In addition to mandatory training on compliance matters and policies, we provide and encourage employees to partake in optional career development, health and wellness, and employee engagement activities and training. We conduct surveys that gauge employee sentiment in areas like career development, manager performance and inclusivity, and we are committed to taking steps to address areas needing improvement.
In addition to mandatory training on ethics and compliance matters, we provide and encourage employees to partake in optional career development, employee engagement activities and training. We conduct surveys that gauge employee sentiment in areas like career development, manager performance and inclusivity, and we are committed to taking steps to address areas needing improvement.
More specifically, these teams are working in coordination with representatives from our target customers, long-term evolution (“LTE”) infrastructure vendors, end-user device manufacturers, system integrators and other technology companies in addition to responding to Requests for Information (“RFI”), Requests for Proposals (“RFP”) and requests to support technology trials related to using our 900 MHz spectrum for broadband services.
More specifically, these teams are working in coordination with representatives from our target customers, LTE infrastructure vendors, end-user device manufacturers, system integrators and other technology companies in addition to responding to Requests for Information (“RFI”), Requests for Proposals (“RFP”) and requests to support technology trials related to using our 900 MHz spectrum for broadband services.
In addition, many of our competitors have more resources, substantially greater product development and marketing budgets, greater name and brand recognition, a significantly greater base of customers in which to spread their operating costs and more financial and personnel resources than we do.
In addition, many of our competitors have more resources, substantially greater product development and marketing budgets, greater name and brand recognition, a significantly greater base of customers in which to spread their Page 11 Table of Contents operating costs and more financial and personnel resources than we do.
The information on or accessible through our website is not incorporated into this Annual Report, and you should not consider any information on, or that can be accessed through, our website a part of this Annual Report or our other filings with the SEC.
The information on or accessible through our website is not incorporated into this Annual Report, and you should not consider any information on, or that can be accessed through, our website a part of this Annual Report or our other filings with the SEC. Page 19 Table of Contents
Our dedicated clearing teams are focused on negotiating agreements to move Covered Incumbents from the broadband segment of the 900 MHz spectrum band to the segments allocated for continued narrowband operations within the 900 MHz band or out of 900 MHz band entirely.
Our dedicated clearing team is focused on negotiating agreements to move Covered Incumbents from the broadband segment of the 900 MHz spectrum band to the segments allocated for continued narrowband operations within the 900 MHz band or out of 900 MHz band entirely.
We intend to pursue and file Page 11 Table of Contents applications based on the timing of customer opportunities, strategic initiatives and our spectrum clearing results and shortly thereafter surrender our underlying licenses. The Anti-Windfall Payment to the U.S.
We intend to pursue and file applications based on the timing of customer opportunities, strategic initiatives and our spectrum clearing results and shortly thereafter surrender our underlying licenses. The Anti-Windfall Payment to the U.S.
To that end, we are pursuing a two-pronged strategy focused on: 1) converting our nationwide narrowband 900 MHz spectrum position into valuable broadband spectrum; and 2) offering long-term leasing of broadband spectrum or other creative solutions in complex system areas to monetize spectrum and platform services and solutions to utility and critical infrastructure enterprises nationwide.
To that end, we are pursuing a two-pronged strategy focused on: (i) converting our nationwide narrowband 900 MHz spectrum position into valuable broadband spectrum; and (ii) offering long-term leasing of broadband spectrum or other creative solutions in complex system areas to monetize spectrum coupled with platform services and solutions to utility and critical infrastructure enterprises nationwide.
Our efforts are ongoing to facilitate continued adoption of 900 MHz Band 8 radio access network equipment and end-user devices in the U.S. by working with chipmakers and module and device vendors to help ensure that customers who employ 900MHz for PLTE have timely access to 3GPP standards-compliant Band 8 devices that meet the technical operating specifications established in the FCC’s Report and Order.
Our efforts are ongoing to facilitate continued adoption of 900 MHz Band 8 radio access network equipment and end-user devices in the U.S. by working with chipmakers and module and device vendors to help ensure that customers who deploy 900 MHz for private wireless networks have timely access to 3GPP standards-compliant Band 8 devices that meet the technical operating specifications established in the FCC’s Report and Order.
Converting our Nationwide Narrowband 900 MHz Spectrum Position to Broadband Converting our spectrum from narrowband to broadband licenses nationwide is a foundational component of our two-pronged strategy as it provides the underpinning for achieving our business strategy.
Page 5 Table of Contents Converting our Nationwide Narrowband 900 MHz Spectrum Position to Broadband Converting our spectrum from narrowband to broadband licenses nationwide is a foundational component of our two-pronged strategy as it provides the underpinning for achieving our business strategy.
The SDG&E Agreement includes the assignment of 6 MHz of 900 MHz Broadband Spectrum, 936.5 – 939.5 MHz paired with 897.5 – 900.5 MHz, within SDG&E’s service territory following the FCC’s issuance of the broadband licenses to us.
The Page 10 Table of Contents SDG&E Agreement includes the assignment of 6 MHz of 900 MHz Broadband Spectrum, 936.5 – 939.5 MHz paired with 897.5 – 900.5 MHz, within SDG&E’s service territory following the FCC’s issuance of the broadband licenses to us.
Competition Our competitors include retail wireless network providers, such as Verizon, AT&T, T-Mobile, Dish and UScellular, private radio operators and other public and private companies who own spectrum, supply communication networks, technologies, products and solutions to our targeted utility and critical infrastructure enterprises.
Competition Our competitors include retail wireless network providers, such as Verizon, AT&T, T-Mobile, and EchoStar, private radio operators and other public and private companies who supply spectrum or other communication networks, technologies, products and solutions to our targeted utility and critical infrastructure enterprises.
Page 12 Table of Contents Before filing for a broadband license, the broadband applicant must satisfy the 90% Broadband Segment Test by utilizing its channel holdings and negotiating with Covered Incumbents on a purely voluntary basis for any additional channels it requires to satisfy this test.
Before filing for a broadband license, the broadband applicant must satisfy the 90% Broadband Segment Test by utilizing its channel holdings and negotiating with Covered Incumbents on a purely voluntary basis for any additional channels it requires to satisfy this test.
And, beyond our principal commercial business offering, we are also exploring additional opportunities to offer electric utility companies additional value-added services to support their network deployments and operations.
And, beyond our principal commercial business offering, we are also exploring additional opportunities to offer electric utility companies additional value-added solutions and services to support their network deployments and operations, and grid modernization initiatives.
We are working with incumbents to clear the 900 MHz Broadband Spectrum allocation covered by the Evergy Agreement. In accordance with ASC 606 Revenue from Contracts with Customers, the payments of prepaid fees under the Evergy Agreement will be accounted for as deferred revenue on our Consolidated Balance Sheets.
We are working with incumbents to clear the 900 MHz Broadband Spectrum allocation in TECO service territories. In accordance with ASC 606 Revenue from Contracts with Customers, the payments of prepaid fees under the TECO Agreement will be accounted for as deferred revenue on our Consolidated Balance Sheets.
And while we intend to continue to Page 3 Table of Contents prioritize our spectrum transactions in areas where we have customer opportunities, we also plan to pursue spectrum transactions opportunistically to recognize a positive return on our investments in spectrum clearing costs.
And while we intend to continue to prioritize our spectrum transactions in areas where we have customer opportunities, we also plan to pursue spectrum transactions opportunistically to recognize a positive return on our investments in spectrum clearing costs.
Continue to Build the Customer Pipeline Our sales and support teams are actively working with many of the largest Investor Owned Utilities (“IOU”).
Page 6 Table of Contents Continue to Build the Customer Pipeline Our sales and support teams are actively working with many of the largest Investor Owned Utilities (“IOU”).
Our goal with these state agencies and commissions is to ensure they have the right information and are properly educated on the immense benefits of utility-scale private wireless broadband networks for end-use customers so they can confidently approve utilities to include the costs of leasing of our spectrum assets and deploying private broadband LTE networks, technologies and solutions into their respective rate making filings.
Our goal with these stakeholders is to ensure they have the right information and are properly educated on the immense benefits of utility-scale private wireless broadband networks for end-use customers so they can confidently approve investments made by utilities including the costs of leasing of our spectrum assets and deploying private broadband LTE networks, technologies and solutions into their respective rate making filings.
To fulfill our business offering, we will be responsible for the costs of securing the broadband licenses from the FCC, including the costs of clearing and acquiring sufficient spectrum to meet the broadband requirements. By contrast, we expect that most of our customers will bear the costs of deploying and operating their private broadband networks, technologies and solutions.
To fulfill our business offering, we will be responsible for the costs of securing the broadband licenses from the FCC, including the costs of clearing and meeting the broadband Eligibility Certification requirements. By contrast, we expect that most of our customers will bear the costs of deploying and operating their private broadband networks, technologies and solutions.
Page 8 Table of Contents LCRA Agreement In April 2023, we 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.
LCRA Agreement In April 2023, we entered into an agreement with 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.
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 we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to SDG&E.
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 we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to SDG&E.
As proof of the potential demand for and value of our spectrum assets, two recent FCC spectrum auctions exceeded consensus valuation estimates and brought in the first and third highest auction proceeds ever for the U.S. Treasury, which we believe demonstrates the continued demand for licensed broadband spectrum.
As proof of the potential demand for and value of our spectrum assets, two of the most recent FCC broadband spectrum auctions exceeded consensus valuation estimates and brought in the first and third highest auction proceeds ever for the U.S. Treasury.
Since the FCC’s issuance of the Report and Order, our sales and marketing efforts have been focused on pursuing spectrum lease arrangements and introducing our integrated platform solutions to our targeted utility and critical infrastructure customers.
Since the FCC’s issuance of the Report and Order, our sales and marketing efforts have been focused on pursuing spectrum lease arrangements, creative spectrum solutions in markets where Complex Systems exist and introducing our integrated platform solutions to our targeted utility and critical infrastructure customers.
Our Spectrum Assets Our spectrum is our most valuable owned asset. We hold licenses nationwide, including approximately 50% of the 900 MHz band in the United States.
Our Spectrum Assets Our spectrum is our most valuable owned asset. We hold licenses nationwide, over 52% of the 900 MHz band in the United States.
Broadband licenses As of March 31, 2023 and 2022, we were granted by the FCC broadband licenses for 105 and 21 counties, respectively. As a result, we relinquished to the FCC our narrowband licenses and made the necessary Anti-Windfall Payments for the same 105 and 21 counties, respectively, as required by the Report and Order.
Broadband licenses As of March 31, 2024, we were cumulatively granted by the FCC broadband licenses for 133 counties. As a result, we relinquished to the FCC our narrowband licenses and made the necessary Anti-Windfall Payments for the same 133 counties, as required by the Report and Order.
The AAEP includes participation of over 100 leading technology companies that provide deployment and application solutions for private broadband targeting our Nation’s electric grid innovators. We launched the AAEP to foster, strengthen, and expand the landscape of 900 MHz devices, services and solutions.
UBBA membership currently includes 34 electric utilities among its nearly 106 members. The AAEP includes participation of over 100 leading technology companies that provide deployment and application solutions for private broadband targeting our Nation’s electric grid innovators. We launched the AAEP to foster, strengthen, and expand the landscape of 900 MHz devices, services and solutions.
The Report and Order requires the broadband applicant to surrender 6 MHz of narrowband spectrum (or 240 channels) in the applicable county to the FCC in exchange for a broadband license.
Page 14 Table of Contents 3. 240 Channel Requirement. The Report and Order requires the broadband applicant to surrender 6 MHz of narrowband spectrum (or 240 channels) in the applicable county to the FCC in exchange for a broadband license.
(“Xcel Energy”)), two experimental licenses to other utilities and six experimental licenses to vendors and labs to showcase and promote 900 MHz broadband. Build Support with Federal and State Agencies The vast majority of our targeted critical infrastructure customers are highly regulated by both federal and state agencies.
Currently, there are five experimental licenses granted to non customer utilities and six experimental licenses to other vendors and labs to showcase and promote 900 MHz Broadband Spectrum. Build Support with Federal and State Agencies The vast majority of our targeted critical infrastructure customers are highly regulated by both federal and state agencies.
In September 2022, we 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.
In September 2022, we 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. In September 2023, we transferred to SDG&E the San Diego County broadband license and received a milestone payment net of delivery delay adjustments of $25.2 million.
This starts with the opportunity for continuous learning and the opportunity to do challenging, transformative work that helps our team build skills at all levels, including leadership opportunities, coaching, and mentoring.
Employee Growth and Development We offer a meaningful work environment with experiences and opportunities to grow and develop. This starts with the opportunity for continuous learning and the opportunity to do challenging, transformative work that helps our team build skills at all levels, including leadership opportunities, coaching, and mentoring.
Our team has worked with Covered Incumbents and negotiated and contracted approximately two-thirds of the transactions required to clear the licensed broadband segment channels.
Our team has worked with Covered Incumbents and negotiated and contracted approximately three quarters of the transactions required, inclusive of three Complex Systems, to clear the licensed 900 MHz Broadband Segment channels.
Leveraging Anterix solutions, critical infrastructure customers can tackle their most impactful opportunities, unlocking applications from analytics to automation to edge monitoring and artificial intelligence. Together with Anterix, customers can build solutions that will scale and evolve with business needs.
We support digital transformations, infrastructure modernization, and cybersecurity strategies that will enable the new standard for security, performance and safety. Leveraging Anterix solutions, critical infrastructure customers can tackle their most impactful opportunities, unlocking applications from analytics to automation to edge monitoring and artificial intelligence. Together with Anterix, customers can build solutions that will scale and evolve with business needs.
Xcel Energy Milestone Total allocated value (in millions)* Start of revenue recognition** Term** Milestone 1 $ 36.5 Q2 FY24 20 years Milestone 2 16.7 Q4 FY24 20 years Milestone 3 10.9 Q1 FY25 19 years Milestone 4 8.9 Q2 FY26 18 years Milestone 5 7.0 Q2 FY29 15 years * Total allocated value is subject to change based on final delivery date of the broadband licenses for the associated milestone, which may include penalties associated with delayed deliveries. ** Revenue recognition occurs upon delivery of broadband licenses for the associated milestone which may differ from the estimates noted above.
Start of revenue recognition (2) Total allocated value (in millions) (1) Term (2) Q3 FY22 $ 0.3 30 years Q3 FY22 1.7 3 years Q2 FY23 0.9 1 year Q2 FY24 29.3 19 years Q2 FY24 36.5 20 years Q4 FY24 16.7 20 years Q1 FY25 10.9 20 years Q1 FY25 21.0 30 years Q3 FY25 0.5 0.5 years Q1 FY26 34.0 19.5 years Q1 FY26 0.9 30 years Q2 FY26 8.9 20 years Q1 FY27 6.5 30 years Q1 FY29 17.3 30 years Q2 FY29 7.0 20 years (1) Total allocated value is subject to change based on final delivery date of the broadband leases for the associated milestone, which may include penalties associated with delayed deliveries.
We are implementing this strategy through targeted outreach and education by our sales, marketing, business development, commercial sales operations and industry government affairs organizations, by participating in the Utilities Broadband Alliance (“UBBA”) along with other industry associations, and by attracting vendors to the Anterix Active Ecosystem Program (“AAEP”). UBBA membership currently includes 30 electric utilities among its nearly 100 members.
We are implementing this strategy through: • targeted outreach and education by our sales, marketing, business development, commercial operations and industry government affairs organizations; • participating in the Utilities Broadband Alliance (“UBBA”), other industry associations and industry events; • attracting vendors to the Anterix Active Ecosystem Program (“AAEP”); and • launching our Utility Strategic Advisory (“USAB”).
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. The following table represents the contractual delivery milestones under the Evergy Agreement and the allocated value ascribed for each term of the milestone.
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.
Term is calculated based on the expected delivery date, which correlates to the period of time the revenue is expected to be recognized for the associated milestone.
(2) Revenue recognition begins upon delivery of broadband leases for the associated milestone, which may differ from the estimates noted above. Term is calculated based on the expected delivery date, which correlates to the period of time the revenue is expected to be recognized for the associated milestone.
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. The following table represents the contractual delivery milestones under the Xcel Energy Agreement and the allocated value ascribed for each term of the milestone.
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.
The payment of $30.0 million is due through fiscal year 2026 as we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to LCRA.
The payment of $30.0 million is due through fiscal year 2026 as we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to LCRA. During the year ended March 31, 2024, we received an initial $15.0 million payment, of which $7.5 million was deposited in an escrow account.
Our Corporate Information Our principal executive offices are located at 3 Garret Mountain Plaza, Suite 401, Woodland Park, New Jersey 07424 and 8260 Greensboro Drive, Suite 501, McLean, Virginia. Our main telephone number is (973) 771-0300. We were originally incorporated in California in 1997 and reincorporated in Delaware in 2014. Our website is www.anterix.com.
Employees As of March 31, 2024, we had 86 full-time employees. Our Corporate Information Our principal executive offices are located at 3 Garret Mountain Plaza, Suite 401, Woodland Park, New Jersey 07424 and 8260 Greensboro Drive, Suite 501, McLean, Virginia. Our main telephone number is (973) 771-0300.
We are 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.
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, we are uniquely positioned to deliver solutions that support secure, resilient and customer-controlled operations.
Deploying our Commercial Business Offering With the Report and Order issued, paving the way for the deployment of broadband in the 900 MHz band, the second key prong of our strategy is establishing our commercial positioning and accelerating adoption of our principal commercial business offering.
Deploying our Commercial Business Offering With the initial Report and Order completed and the work Anterix has done since then to pave the way for the deployment of broadband in the 900 MHz band, we have moved into the second key prong of our strategy of establishing our commercial position and accelerating adoption of our principal commercial business offering.
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 30-years. The following table represents the contractual delivery milestones under the Ameren Agreements and the allocated value ascribed for each term of the milestone.
Revenue will Page 9 Table of Contents 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.
Employee Health and Safety We strive to provide a safe workplace environment and have implemented policies to support the health and safety of our employees, including a work-from-home policy.
Employee Wellbeing We strive to provide a balanced workplace environment and have implemented policies to support the health and wellbeing of our employees, including a remote work policy. We have moved to a hybrid model where employees work from the office three days a week, three weeks a month.
We are working with each of these agencies to educate Page 4 Table of Contents them about the security, reliability and priority access benefits that private broadband LTE networks, technologies and solutions can offer to utilities.
We are working with each of these agencies to educate them about the security, reliability and priority access benefits that private broadband wireless networks, technologies and solutions can offer to utilities. We are also working with a number of state agencies and commissions who regulate electric utilities and have a strong influence over electric utility investment decisions.
We believe the relations with our employees and consultants are good. Company Culture We are guided by our core values – Integrity, Courage, Camaraderie, Transformative, and Excellence – that express how we aspire to be when we are at our best.
Company Culture We are guided by our core values – Integrity, Courage, Camaraderie, Transformative, and Excellence – that express how we aspire to be when we are at our best. With these values as the backbone of our corporate culture, we work tirelessly to act as responsible stewards – to our employees, communities and other stakeholders who rely on us.
We are performing due diligence to determine how best to meet these customer needs, including using our internal expertise, collaborating with industry partners and working with specific service providers. Enable the Anterix Active Ecosystem with U.S.
We are performing due diligence to determine how best to meet these customer needs, including using our internal expertise, collaborating with industry partners and working with specific service providers. Identify and Evaluate New Opportunities for Our Spectrum The wireless communications industry is highly competitive and subject to rapid regulatory, technological and market changes.
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 in December 2022.
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 in December 2022. In July 2023 and November 2023, we delivered the cleared 900 MHz Broadband Spectrum and the associated broadband leases and received milestone payments of $21.2 million in each period.
Diversity, Equity and Inclusion We are committed to hiring inclusively, providing training and development opportunities, fostering an inclusive culture, ensuring equitable pay for employees, and focusing on attracting and retaining diverse representation at every level within the Company. Anterix GROW was launched in February 2023. The focus of GROW is to embed inclusion into everyday life, personally and professionally.
We are committed to fostering a culture of inclusivity by providing actionable opportunities and resources, including days of service, lunch and learns, and inclusion tools. We are committed to hiring inclusively, providing training and development opportunities, fostering an inclusive culture, ensuring equitable pay, and focusing on attracting and retaining diverse representation at every level within the Company.
Term is calculated based on the expected delivery date, which correlates to the period of time the revenue will be recognized for the associated milestone. Evergy Agreement In September 2021, we entered into a long-term lease agreement of 900 MHz Broadband Spectrum with Evergy, (the “Evergy Agreement”).
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 30-years. Evergy Agreement In September 2021, we entered into a long-term lease agreement of 900 MHz Broadband Spectrum with Evergy, (the “Evergy Agreement”).
When included in rate bases, utilities are permitted to recover costs and earn a customary rate of return on these prudent investments.
Their understanding and appreciation that utility control of communications for grid modernization programs enhances the utilities’ ability to provide safe, secure, reliable and resilient electricity for ratepayers is essential. When included in rate bases, utilities are permitted to recover costs and earn a customary rate of return on these prudent investments.
Item 1. Business Overview Anterix Inc (“Anterix,” “we,” “our,” or the “Company”) is a wireless communications company focused on commercializing our spectrum assets to enable our targeted utility and critical infrastructure customers to deploy private broadband networks and on offering innovative broadband solutions to the same target customers.
We are focused on commercializing our spectrum assets and expanding the benefits and solutions we offer to enable our targeted utility and critical infrastructure customers to deploy private broadband networks.
Following a shift to work from home in response to the global COVID-19 pandemic crisis, we have moved to a hybrid model requiring employees to work from the office three days a week, three weeks a month. We believe this approach balances the benefits of team development of office-based work with the personal and environmental benefits of working from home.
We believe this approach balances the benefits of team development of office-based work with the personal and environmental benefits of working remotely. Employees needing in-person access to network laboratories or onsite resources are not eligible for hybrid work.
The survey showed that we have a highly engaged workforce that overwhelmingly views our work environment favorably. Where our employees identified areas for improvement, we worked with various functional areas to create and implement action plans to address any issues. Our second Employee Engagement survey is set to launch in Fall 2023.
These include corporate culture Page 18 Table of Contents assessments, as well as real-time feedback on employee engagement and a holistic approach survey on employee well-being focused on physical, emotional, social and financial health. Where our employees identified areas for improvement, we work with various functional areas to create and implement action plans to address any issues.
Removed
On May 13, 2020, the FCC approved 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.
Added
Item 1. Business Overview Anterix Inc (“Anterix,” “we,” “our,” or the “Company”) is the utility industry’s partner, empowering enhanced visibility, control and security for a modern grid. Our vision is to deliver secure, scalable solutions enabled by private wireless broadband connectivity, for the benefit of utilities and the communities that they serve.
Removed
The Report and Order was published in the Federal Register on July 16, 2020 and became effective on August 17, 2020. We are now engaged in qualifying for and securing broadband licenses from the FCC. At the same time, we are pursuing opportunities to monetize the broadband spectrum we secure to our targeted utility and critical infrastructure customers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

72 edited+16 added−5 removed135 unchanged
In addition, significant costs or delays beyond what we have anticipated in our business plan will further delay us from commercializing our spectrum assets, and may prevent us from returning capital to stockholders (through dividends or stock repurchases) and require us to seek additional sources of capital and liquidity in order to carry out our business and plans, which could cause significant dilution to our existing stockholders.
In addition, significant costs or delays beyond what we have anticipated in our business plan will further delay us from commercializing our spectrum assets, may prevent us from returning capital to stockholders (through dividends or stock repurchases), and require us to seek additional sources of capital and liquidity in order to carry out our business and plans, which could cause significant dilution to our existing stockholders.
In addition, although there is broad availability of broadband LTE, there is no assurance that our targeted customers will be able to utilize existing broadband networks, technologies and solutions with our spectrum for their desired use cases without requiring modifications to existing equipment or engaging in product and/or service development efforts, any of which could result in deployment delays, require them or us to invest in technology or other development activities or otherwise adversely limit the potential benefits or value of our spectrum assets.
In addition, although there is broad availability of broadband LTE, there is no assurance that our targeted customers will be able to utilize existing networks, technologies and solutions with our spectrum for their desired use cases without requiring modifications to existing equipment or engaging in product and/or service development efforts, any of which could result in deployment delays, require them or us to invest in technology or other development activities or otherwise adversely limit the potential benefits or value of our spectrum assets.
In such case, we may not be able to return capital to our stockholders through dividends and stock repurchases and may be required to issue additional equity or debt securities or enter into other commercial arrangements to secure the additional financial resources to support our future operations and the implementation of our business plans.
In such case, we may not be able to return capital to our stockholders through dividends or stock repurchases and may be required to issue additional equity or debt securities or enter into other commercial arrangements to secure the additional financial resources to support our future operations and the implementation of our business plans.
Our success depends to a significant degree upon the contributions of our executive officers and key personnel, who have unique experience and expertise in the telecommunications industry, large scale and multi-year solution selling to utilities, wireless broadband networks, FCC rulemaking and retuning and clearing spectrum to obtain FCC licenses.
Our success depends to a significant degree upon the contributions of our executive officers and key personnel, who have unique experience and expertise in the telecommunications industry, large scale and multi-year solution selling to utilities, wireless broadband networks, FCC rulemaking and spectrum retuning and clearing to obtain FCC licenses.
We are subject to contingencies and obligations under our commercial agreements with our customers including the delivery of cleared spectrum and broadband licenses on a timely basis, and as a result, there is no assurance that we will receive payments from such customers in the amounts and on the timeline we currently expect, or that any payments we have received to date, including from Evergy, will not be subject to repayment or that we will not be subject to contract claims, including rights of termination.
We are subject to contingencies and obligations under our commercial agreements with our customers including the delivery of cleared spectrum and broadband licenses on a timely basis, and as a result, there is no assurance that we will receive payments from such customers in the amounts and on the timeline we currently expect, or that any payments we have received to date from our customers, will not be subject to repayment or that we will not be subject to contract claims, including rights of termination.
In addition, numerous other factors, many of which are out of our control, may now or in the future impact our ability to acquire new customers, including not gaining support from governmental bodies that regulate our customers, the ability of our customers to pass their broadband spectrum use and deployment costs to their ratepayers, our customers’ existing commitments to other providers or communication solutions, real or perceived costs of leasing our spectrum assets and deploying broadband networks, solutions and services, our failure to expand, retain and motivate our sales and marketing personnel, our failure to develop or expand relationships with the manufacturers or suppliers of broadband technologies, solutions and services that can be utilized on our spectrum, negative media, industry or financial analyst commentary regarding us or our solutions, litigation, the spectrum and service offerings of our competitors, the adverse impacts of the health pandemics and deteriorating general economic conditions and events.
In addition, numerous other factors, many of which are out of our control, may now or in the future impact our ability to acquire new customers, including not gaining support from governmental bodies that regulate our customers, the ability of our customers to pass their broadband spectrum use and deployment costs to their ratepayers, our customers’ existing commitments to other providers or communication solutions, real or perceived costs of securing our spectrum assets and deploying broadband networks, solutions and services, our failure to expand, retain and motivate our sales and marketing personnel, our failure to develop or expand relationships with the manufacturers or suppliers of broadband technologies, solutions and services that can be utilized on our spectrum, negative media, industry or financial analyst commentary regarding us or our solutions, litigation, the spectrum and service offerings of our competitors, the adverse impacts of the health pandemics and deteriorating general economic conditions and events.
As a business with a limited operating history with our current business plan, any future success will depend, in large part, on our ability to, among other things: • comply with the requirements and restrictions the FCC has established in the Report and Order to qualify for and obtain broadband licenses in key geographic areas on a timely and cost-effective basis; • successfully commercialize our spectrum assets to our targeted utility and critical infrastructure customers on favorable terms, on a timely basis, or at all; • comply with our obligations under our existing and any future agreements with our customers on a timely basis and on commercially reasonable terms; • compete against other wireless companies, such as Verizon, AT&T, T-Mobile, Dish and UScellular, manufacturers and vendors who have significantly greater resources and pricing flexibility, long-term relationships with our targeted customers and greater political and regulatory influence; • successfully convince chipmakers and other technology, product and solution manufacturers and vendors to develop the technology, products and solutions required to satisfy our customers’ various use cases and meet the technical specifications established in the Report and Order; and • successfully manage and grow our internal business, regulatory, technical and commercial operations in an efficient and cost-effective manner .
As a business with a limited operating history with our current business plan, any future success will depend, in large part, on our ability to, among other things: • comply with the requirements and restrictions the FCC has established in the Report and Order to qualify for and obtain broadband licenses in key geographic areas on a timely and cost-effective basis; • successfully commercialize our spectrum assets to our targeted utility and critical infrastructure customers on favorable terms, on a timely basis, or at all; • comply with our obligations under our existing and any future agreements with our customers on a timely basis and on commercially reasonable terms; • compete against other wireless companies, such as Verizon, AT&T, T-Mobile, and EchoStar, manufacturers and vendors who have significantly greater resources and pricing flexibility, long-term relationships with our targeted customers and greater political and regulatory influence; • successfully convince chipmakers and other technology, product and solution manufacturers and vendors to develop the technology, products and solutions required to satisfy our customers’ various use cases and meet the technical specifications established in the Report and Order; and • successfully manage and grow our internal business, regulatory, technical and commercial operations in an efficient and cost-effective manner .
Given these significant capital requirements, there is no assurance that we will be able to successfully commercialize our spectrum assets, especially in light of the competitive environment in which we operate, and the wide variety of technologies, products and solutions offered by our competitors.
Given these significant capital requirements, there is no assurance that we will be able to successfully commercialize our spectrum assets, especially in light of the competitive environment in which we operate, and the wide variety of technologies, products, services and solutions offered by our competitors.
We have incurred net losses since our inception, and we anticipate that we will continue to incur significant losses for the foreseeable future; thus, we do not know whether or when we will generate the U.S. federal taxable income necessary to utilize our NOLs.
We have mainly incurred net losses since our inception, and we anticipate that we will continue to incur significant losses for the foreseeable future; thus, we do not know whether or when we will generate the U.S. federal taxable income necessary to utilize our NOLs.
As of the date of this filing, we have signed long-term leases of our spectrum assets with Ameren, Evergy and Xcel Energy and have entered into agreements to sell our spectrum assets to SDG&E and LCRA.
As of the date of this filing, we have signed long-term leases of our spectrum assets with Ameren, Evergy, Xcel Energy, and TECO and have entered into agreements to sell our spectrum assets to SDG&E and LCRA.
We also expect that our customers will pay what we believe is the fair market value for rights to our spectrum and bear the costs of deploying and operating their private broadband networks.
We also expect that our customers will pay what we believe is the fair market value for rights to our spectrum and bear the costs of deploying and operating their private wireless broadband networks.
Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful; • we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law; • we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification; • we will not be obligated pursuant to our Amended and Restated Bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnities, except with respect to proceedings authorized by our Board or brought to enforce a right to indemnification; • the rights conferred in our Amended and Restated Bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and • we may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.
Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful; • we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law; • we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification; • we will not be obligated pursuant to our Amended and Restated Bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnities, except with respect to proceedings authorized by our Board or brought to enforce a right to indemnification; • the rights conferred in our Amended and Restated Bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and Page 31 Table of Contents • we may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.
Some of the factors that could negatively affect or result in fluctuations in the market price of our common stock include: • the timing and costs of securing broadband licenses; • our ability to enter into contracts with our targeted utility and critical infrastructure customers, on a timely basis or at all; • the terms of our customer contracts, including pre-payments and our contractual obligations; Page 26 Table of Contents • our ability to comply with our obligations, on a timely and cost-effective basis, under our existing customer contracts; • market reaction to any changes in our business plans or strategies; • announcements, offerings or actions by our competitors; • governmental regulations or actions taken by governmental bodies; • additions or departures of any of our executive officers or key personnel; • actions by our stockholders; • speculation in the press or investment community; • general market, economic and political conditions, including an economic slowdown, inflation or dislocation in the global credit markets; • our operating performance and the performance of other similar companies; • changes in accounting principles, judgments or assumptions; and • passage of legislation or other regulatory developments that adversely affect us or our industry.
Some of the factors that could negatively affect or result in fluctuations in the market price of our common stock include: • the timing and costs of securing broadband licenses; • our ability to enter into contracts with our targeted utility and critical infrastructure customers, on a timely basis or at all; • the terms of our customer contracts, including pre-payments and our contractual obligations; • our ability to comply with our obligations, on a timely and cost-effective basis, under our existing customer contracts; • market reaction to any changes in our business plans or strategies; • announcements, offerings or actions by our competitors; • governmental regulations or actions taken by governmental bodies; • additions or departures of any of our executive officers or key personnel; • actions by our stockholders; • speculation in the press or investment community; • general market, economic and political conditions, including an economic slowdown, inflation or dislocation in the global credit markets; • our operating performance and the performance of other similar companies; • changes in accounting principles, judgments or assumptions; and • passage of legislation or other regulatory developments that adversely affect us or our industry.
In addition, we may not be able to fund or invest in certain areas of our business to the same degree as our competitors. Many have substantially greater product development and marketing budgets and other financial and regulatory personnel resources than we do. Many also have greater name and brand recognition and a larger base of customers than we have.
In addition, we may not be able to fund or invest in certain areas of our business to the same degree as our competitors. Several have substantially greater product development and marketing budgets and other financial and regulatory personnel resources than we do. Several also have greater name and brand recognition and a larger base of customers than we have.
Our goal with these state agencies and commissions is to gain their support for allowing utilities to pass the capital costs of leasing our spectrum assets and deploying private broadband LTE networks, technologies and solutions to ratepayers, including at a customary rate of return for the utility company.
Our goal with these state agencies and commissions is to gain their support for allowing utilities to pass the capital costs of leasing or purchasing our spectrum assets and deploying private broadband LTE networks, technologies and solutions to ratepayers, including at a customary rate of return for the utility company.
The value of our spectrum, however, may fluctuate based on various factors, including, among others: • the cost and time required to comply with the FCC’s requirements to obtain broadband licenses in the 900 MHz band, including purchasing additional spectrum and retuning and relocating incumbents; • our ability to enter long-term leases or transfer arrangements with our targeted utility and critical infrastructure customers on a timely basis and on commercially reasonable terms; • potential uses of our spectrum based on the Report and Order and available technology; • the market availability of, and demand for, broadband spectrum; • the demand for private broadband networks, technologies and solutions by our targeted utility and critical infrastructure customers; and • regulatory changes by the FCC to make additional spectrum available or to promote more flexible uses of existing spectrum in other bands.
The value of our spectrum, however, may fluctuate based on various factors, including, among others: • the cost and time required to comply with the FCC’s requirements to obtain broadband licenses in the 900 MHz band, including purchasing additional spectrum and retuning and relocating incumbents; • our ability to enter long-term leases or transfer arrangements with our targeted utility and critical infrastructure customers on a timely basis and on commercially reasonable terms; • potential uses of our spectrum based on the Report and Order and available technology; • the market availability of, and demand for, broadband spectrum; • the supply of broadband spectrum made available to our targeted customers by existing wireless carriers; • the demand for private broadband networks, technologies and solutions by our targeted utility and critical infrastructure customers; and • regulatory changes by the FCC to make additional spectrum available or to promote more flexible uses of existing spectrum in other bands.
However, we may not correctly predict the amount or timing of our future revenues and our operating expenses, which may fluctuate significantly in the future as a result of a variety of factors, many of which are outside of our control, and may be materially different than our announced plans and expectations.
However, we may not correctly predict the amount or timing of our future contract proceeds, revenues and our operating expenses, which may fluctuate significantly in the future as a result of a variety of factors, many of which are outside of our control, and may be materially different than our announced plans and expectations.
In addition, the FCC and other federal, state and local governmental authorities could adopt new regulations or take actions, including making additional spectrum available that can be utilized by our targeted customers, which could harm our ability to license our spectrum assets.
In addition, the FCC and other federal, state and local governmental authorities, or other third parties, could adopt new regulations or take actions, including making additional spectrum available that can be utilized by our targeted customers, which could harm our ability to license our spectrum assets.
As a result, we may be unable to attract customers at prices or on terms that would be favorable, or at all, which could have an adverse effect on the growth and timing of any future revenues.
As a result, we may be unable to attract customers at prices or on terms that would be favorable, or at all, which likely would have an adverse effect on the growth and timing of any future revenues.
Further, adverse economic conditions, including as a result of health pandemics, inflation, regulatory actions and policy changes, and geopolitical matters, may result in supply chain issues which limit our customer’s ability to obtain the necessary technology and products to deploy an LTE broadband network utilizing our spectrum.
Further, adverse economic conditions, including as a result of health pandemics, inflation, regulatory actions and policy changes, and geopolitical matters, may result in supply chain issues which limit our customer’s ability to obtain the necessary technology and products to deploy an LTE or 5G wireless broadband network utilizing our spectrum.
Many of the third parties who offer spectrum and communication technologies, products and solutions to our targeted customers have existing long-term relationships with these targeted customers and have significantly more resources and greater political and regulatory influence than we do, and we may not be able to successfully compete with these third parties.
Several of the third parties who offer spectrum and communication technologies, products, services and solutions to our targeted customers have existing long-term relationships with these targeted customers and have significantly more resources and greater political and regulatory influence than we do, and we may not be able to successfully compete with these third parties.
Although we are in discussions with other utilities and critical infrastructure companies, and we believe many of these utility and critical infrastructure customers have demonstrated an intention to acquire use of our 900 MHz Broadband Spectrum based on their level of engagement, there is no assurance that these discussions will continue to progress or will eventually result in contracts with these entities.
Although we are in discussions with other utilities and critical infrastructure companies, and we believe many of these utility and critical infrastructure customers have Page 25 Table of Contents demonstrated an intention to acquire use of our 900 MHz Broadband Spectrum based on their level of engagement, there is no assurance that these discussions will continue to progress or will eventually result in contracts with these entities.
Please refer to the section entitled “Cautionary Statement Concerning Forward-Looking Statements.” Page 17 Table of Contents Risks Related to Obtaining Broadband Licenses, the Retuning Process and the Use of Our Spectrum Our plans to commercialize our 900 MHz spectrum assets depend on our ability to qualify for and obtain broadband licenses from the FCC in accordance with the requirements of the Report and Order.
Please refer to the section entitled “Cautionary Statement Concerning Forward-Looking Statements.” Risks Related to Obtaining Broadband Licenses, the Retuning Process and the Use of Our Spectrum Our plans to commercialize our 900 MHz spectrum assets depend on our ability to qualify for and obtain broadband licenses from the FCC in accordance with the requirements of the Report and Order.
We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant expenditures and may divert financial resources from other projects.
We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, Page 28 Table of Contents operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant expenditures and may divert financial resources from other projects.
As a result, a significant shortfall in our planned revenues, a significant delay in obtaining broadband licenses and entering into agreements for our spectrum assets, customers Page 22 Table of Contents electing not to make significant pre-payments under the terms of any agreements we enter into or significant increases in our planned expenses could have an immediate and material adverse effect on our business, liquidity, results of operations and prospects.
As a result, a significant shortfall in our planned revenues, a significant delay in obtaining broadband licenses, a delay in entering into agreements for our spectrum assets, future customers electing not to make significant pre-payments under the terms of any agreements we enter into or significant increases in our planned expenses could have an immediate and material adverse effect on our business, liquidity, results of operations and prospects.
Our targeted customers are large, heavily-regulated enterprises and our business plan requires these customers to commit to long-term transactions for our spectrum and then to purchase and deploy broadband network equipment, solutions and services utilizing our leased spectrum.
Our targeted customers are large, heavily-regulated enterprises and our business plan requires these customers to commit to long-term transactions for our spectrum and then to purchase and deploy broadband network equipment, solutions and services utilizing our 900 MHz Broadband Spectrum.
As a result, many geographic areas may have only one or a limited number of potential customers and if we are not successful with this customer or limited number of customers, our spectrum may not be utilized, and we will not be able to generate revenues from owning spectrum in that geographic area.
As a result, many geographic areas may have only one or a limited number of potential customers and if we are not successful with the initially targeted customer or limited number of customers, our spectrum may not be utilized, and we will not be able to generate revenues from owning spectrum in that geographic area.
Such disruptions or impacts may be similar to those we faced during the COVID-19 pandemic, such as mandated business closures in impacted areas, limitations with employee resources due to stay at home orders or sickness of employees or their families, reduction of our business operations Page 20 Table of Contents and the business operations of our targeted utility and critical infrastructure customers, all of which may have an adverse impact on our business, financial results, stock price and results of operations.
Such impacts or disruptions may be similar to those we faced during the COVID-19 pandemic, which included mandated business closures in impacted areas, limitations with employee resources due to stay at home orders or sickness of employees or their families, reduction of our business operations and the business operations of our targeted utility and critical infrastructure customers, all of which may have an adverse impact on our business, financial results, stock price and results of operations.
Our share repurchase program may be modified, suspended or terminated at any time, which may result in a decrease in the trading prices of our common stock. Even if our share repurchase program is fully implemented, it may not Page 27 Table of Contents enhance long-term stockholder value.
Our share repurchase program may be modified, suspended or terminated at any time, which may result in a decrease in the trading prices of our common stock. Even if our share repurchase program is fully implemented, it may not enhance long-term stockholder value.
As a result, the incumbents Page 18 Table of Contents operating Complex Systems can make demands that are not commercially reasonable (including the commercial terms to obtain the use of our spectrum), delay their decision or refuse to negotiate with us altogether.
As a result, the incumbents operating Complex Systems can make demands that are not commercially reasonable (including the commercial terms to obtain the use of our spectrum), delay their decision or refuse to negotiate with us altogether.
Further, our assessment that we should target utilities and other critical infrastructure entities as customers for our spectrum is based on our determination that these entities have regulatory and other incentives to install a significant number of new technologies, such as smart devices and sensors, that will generate an increasing amount of data that cannot be addressed well by their existing communication networks and systems.
Our assessment that we should target utilities and other critical infrastructure entities as potential customers for our spectrum is based on our determination that these entities will need to install a significant number of new technologies, such as smart devices and sensors, that will generate an increasing amount of data that cannot be addressed well by their existing communication networks and systems.
Government regulations or actions taken by governmental bodies could adversely affect our business prospects, liquidity and results of operations, including any changes by the FCC to the Report and Order or to the FCC rules and regulations governing the 900 MHz band.
Page 23 Table of Contents Government regulations or actions taken by governmental bodies could adversely affect our business prospects, liquidity and results of operations, including any changes by the FCC to the Report and Order or to the FCC rules and regulations governing the 900 MHz band.
However, we may not be able to continue to convince chipmakers and other technology, product and solution manufacturers and vendors to develop the technology, products and solutions required to satisfy our customers’ various use cases and meet the technical specifications established in the Report and Order.
However, chipmakers and other technology, product and solution manufacturers and vendors may not continue to develop the technology, products and solutions required to satisfy our customers’ various use cases and meet the technical specifications established in the Report and Order.
Further, other than our lease or transfer arrangements, we will not generate revenue from the operation of the broadband networks or technologies deployed by our customers.
Further, other than our lease or transfer arrangements, currently we do not generate revenue from the operation of the broadband networks or technologies deployed by our customers.
The Report and Order establishes a market-driven, voluntary exchange process for clearing the channels in the broadband segment on a county-by-county basis. When we apply for a broadband license, we will need to demonstrate that we satisfy the 90% Broadband Segment Test.
The Report and Order establishes a market-driven, voluntary exchange process for clearing the channels in the broadband segment. When we apply for a broadband license, we will need to demonstrate that we satisfy the 90% Broadband Segment Test.
If our losses or expenses exceed our expectations or our revenue assumptions are not met in future periods, we may never achieve or maintain profitability in the future. Page 24 Table of Contents Our ability to use our net operating losses to offset future taxable income, if any, may be subject to certain limitations.
If our losses or expenses exceed our expectations or our revenue assumptions are not met in future periods, we may never achieve or maintain profitability in the future. Our ability to use our net operating losses to offset future taxable income, if any, may be subject to certain limitations.
Page 21 Table of Contents The value of our spectrum assets may fluctuate significantly based on supply and demand, as well as technical and regulatory changes. The FCC spectrum licenses we hold are our most valuable asset.
The value of our spectrum assets may fluctuate significantly based on supply and demand, as well as technical and regulatory changes. The FCC spectrum licenses we hold are our most valuable asset.
As a result, there is no assurance that we will be able to retain any upfront payments or receive future payments in the amounts and on the timeline we currently expect, or at all. Further, Ameren, Evergy and Xcel Energy may not elect to exercise their options for additional terms contemplated by the terms of the long-term lease agreements.
As a result, there is no assurance that we will be able to retain any upfront payments or receive future payments in the amounts and on the timeline we currently expect, or at all. Additionally, our customers may not elect to exercise their options for additional terms contemplated by the terms of the long-term lease agreements.
Many of these competitors have significantly more resources, a longer track record of providing technologies, products and solutions to our targeted customers and greater political and regulatory influence than we do, all of which could prevent, delay or increase the costs of commercializing the broadband Page 23 Table of Contents licenses we secure to our targeted customers.
Several of these competitors have significantly more resources, a longer track record of providing technologies, products, services and solutions to our targeted customers and greater political and regulatory influence than we do, all of which could prevent, delay or increase the costs of commercializing the broadband licenses we secure to our targeted customers.
Our initiatives with the federal and state agencies and commissions that regulate electric utilities may not be successful. Our targeted utility and critical infrastructure customers are highly regulated by both federal and state agencies.
Our customers ’ initiatives with the federal and state agencies and commissions that regulate electric utilities may not be successful, which may impact our commercialization efforts. Our targeted utility and critical infrastructure customers are highly regulated by both federal and state agencies.
Certain anti-takeover defenses and applicable law may limit the ability of a third party to acquire control of us.
Page 30 Table of Contents Certain anti-takeover defenses and applicable law may limit the ability of a third party to acquire control of us.
Macroeconomic pressures resulting from health epidemics, including the recent COVID-19 pandemic, unfavorable market conditions, regulatory and policy changes, and ongoing geopolitical matters, may have an adverse impact on our business, financial results, stock price and results of operations as well as the business of our current and potential customers.
Page 22 Table of Contents Macroeconomic pressures resulting from health epidemics, unfavorable market conditions, regulatory and policy changes, and ongoing geopolitical matters, may have an adverse impact on our business, financial results, stock price and results of operations as well as the business of our current and potential customers.
We have expended, and will need to continue to expend substantial resources for the foreseeable future, to commercialize and promote the benefits of deploying broadband systems to our targeted utility and critical infrastructure customers.
We dedicated significant resources to support the FCC’s approval of the Report and Order. We have expended, and will need to continue to expend substantial resources for the foreseeable future, to commercialize and promote the benefits of deploying broadband systems to our targeted utility and critical infrastructure customers.
Repurchases we consummate could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance. Our Board authorized a share repurchase program pursuant to which we may repurchase up to $50.0 million of our common stock on or before September 29, 2023.
Repurchases we consummate could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance. Our Board authorized a new share repurchase program (the “2023 Share Repurchase Program”) pursuant to which we may repurchase up to $250.0 million of our common stock on or before September 21, 2026.
There is no assurance that we will be able to clear incumbents from Ameren’s, SDG&E’s, Evergy’s, Xcel Energy’s, and/or LCRA’s respective service territories and obtain broadband licenses from the FCC on the timeline required under our agreements, or at all.
There is no assurance that we will be able to clear incumbents from our customers’ respective service territories and obtain broadband licenses from the FCC on the timeline required under our agreements, or at all.
Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We have discovered in the past and may discover in the future areas of our internal controls that need improvement or additional documentation.
Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We have discovered in the past and may discover in the future areas of our internal controls that need improvement or additional documentation. We cannot be certain that we will be successful in implementing or maintaining effective internal controls for all financial periods.
Our competitors include retail wireless network providers, such as Verizon, AT&T, T-Mobile, Dish and UScellular, private radio operators and other public and private companies who supply communication networks, technologies, products and solutions to our targeted utility and critical infrastructure entities.
Our competitors include retail wireless network providers, such as Verizon, AT&T, T-Mobile, and EchoStar, private radio operators and other public and private companies, including potential new spectrum entrants, who supply spectrum or other communication networks, technologies, products and solutions to our targeted utility and critical infrastructure entities.
We are subject to contingencies and obligations under our commercial agreements with Ameren, SDG&E, Evergy, Xcel Energy and LCRA, including the delivery of cleared spectrum and broadband licenses in the designated service territories on a timely basis.
We are subject to contingencies and obligations under our commercial agreements with our customers, including the delivery of cleared spectrum and broadband licenses in the designated service territories on a timely basis.
Ameren’s, SDG&E’s, Evergy’s, Xcel Energy’s, and LCRA’s respective payment obligations, including our ability to maintain any upfront payments and any future payment obligations under these agreements, are contingent on our ability to deliver cleared spectrum and Broadband Spectrum licenses on the timelines required in these agreements.
Customers’ respective payment obligations, including our ability to maintain any upfront payments and any future payment obligations under these agreements, are contingent on our ability to deliver cleared spectrum and Broadband Spectrum licenses on the timelines required in these agreements.
These four investment firms collectively beneficially own approximately 56.0% of our outstanding shares of common stock.
These four investment firms collectively beneficially own approximately 53.2% of our outstanding shares of common stock.
As of March 31, 2023, we had approximately $90.3 million of federal net operating loss (“NOL”) carryforwards, expiring in various amounts from 2023 through 2038, to offset future taxable income and the remaining $237.5 million of which can be carried forward indefinitely but limited to 80% of future taxable income when used.
As of March 31, 2024, we had approximately $66.2 million of federal net operating loss (“NOL”) carryforwards, expiring in various amounts from 2024 through 2037, to offset future taxable income and the remaining $241.1 million of which can be carried forward indefinitely but limited to 80% of future taxable income when used.
As a result, the loss of services from our executive officers or key personnel or a limitation in their availability could materially and adversely impact our business, prospects and results of operations. Further, such a loss could be negatively perceived in the capital markets.
As a result, the loss of services from our executive officers or key personnel or a limitation in their availability could materially and adversely impact our business, customer prospects and results of operations. Further, such a loss could be negatively perceived in the capital markets. Recruiting and retaining qualified personnel, including effective sales personnel, are critical to our success.
We may not be successful in commercializing our spectrum assets on a timely basis or in accordance with our business plans and expectations. We have identified utilities and other critical infrastructure enterprises as our initial target customers.
We may not be successful in commercializing our spectrum assets to our targeted utility and critical infrastructure customers, on a timely basis, including those customers that are above the Demonstrated Intent threshold, or in accordance with our business plans and expectations. We have identified utilities and other critical infrastructure enterprises as our initial target customers.
Our reputation and business may be harmed, and we may be subject to legal claims if there is loss, disclosure, or misappropriation of, or access to, our customers’ information. We make extensive use of online services and centralized data processing, including through third-party service providers. The secure maintenance and transmission of customer information is an important element of our operations.
Page 27 Table of Contents Our reputation and business may be harmed, and we may be subject to legal claims if there is loss, disclosure, or misappropriation of, or access to, our customers’ information. We make use of online services and centralized data processing, including through third-party service providers.
Based on our review of publicly available filings as of June 09, 2023, funds affiliated with Owl Creek Asset Management (“Owl Creek”) beneficially owned approximately 28.4%, funds affiliated with Heard Capital LLC owned approximately 7.9%, funds affiliated with Morgan Stanley Investment Management Inc. owned approximately 6.8%, funds affiliated with BlackRock, Inc. owned approximately 6.8%, and funds affiliated with GIC Private Limited owned approximately 6.1% of our outstanding common stock.
Based on our review of publicly available filings as of June 21, 2024, funds affiliated with Owl Creek Asset Management (“Owl Creek”) beneficially owned approximately 29.1%, funds affiliated with Heard Capital LLC owned Page 29 Table of Contents approximately 9.9%, funds affiliated with GIC Private Limited owned approximately 7.9% of our outstanding common stock and funds affiliated with BlackRock, Inc. owned approximately 6.3%.
Risks Related to Our Business We may not be able to correctly estimate our operating expenses or future revenues, which could lead to cash shortfalls, and may prevent us from returning capital to our stockholders and require us to secure additional financing. We dedicated significant resources to support the FCC’s approval of the Report and Order.
Page 24 Table of Contents Risks Related to Our Business We may not be able to correctly estimate our operating expenses, future cash proceeds or future revenues, which could lead to cash shortfalls, and may prevent us from returning capital to our stockholders and require us to secure additional financing.
Alternatively, these stockholders could place pressure on our Board to pursue a sale of the company or its assets. As a result of this concentration of ownership, our other stockholders may have no effective voice in our corporate actions or the operations of our business, which may adversely affect the market price of our common stock.
As a result of this concentration of ownership, our other stockholders may have no effective voice in our corporate actions or the operations of our business, which may adversely affect the market price of our common stock.
Further, even if we satisfy the 90% Broadband Segment Test, as part of the Mandatory Retuning process we will be required to pay any costs associated with providing Covered Incumbents with comparable facilities and paying relocation costs. In addition, the FCC has exempted channels from the Mandatory Retuning process that are being utilized by incumbents operating Complex Systems.
Further, even if we satisfy the 90% Broadband Segment Test, as part of the Mandatory Retuning process we will be required to pay any costs associated with providing Covered Incumbents with comparable facilities and paying relocation costs.
Page 25 Table of Contents Recruiting and retaining qualified personnel, including effective sales personnel, are critical to our success. Competition to hire qualified personnel in our industry is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous telecommunications companies for similar personnel.
Competition to hire qualified personnel in our industry is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous telecommunications, service and infrastructure companies for similar personnel.
Further, our costs to clear incumbents, qualify for broadband licenses and perform our other obligations under our agreements with Ameren, SDG&E, Evergy, Xcel Energy and LCRA may be significantly more than we currently anticipate, which could increase our capital expenses and reduce the net revenue or proceeds we recognize from these agreements.
Further, our costs to clear incumbents, qualify for broadband licenses and perform our other obligations under our agreements with our customers may be significantly more than we currently anticipate, which could increase our capital expenses and reduce our net income or increase our net loss.
In addition, in its recent filings with the SEC, Owl Creek reported that it expects to continue to engage in cooperative discussions with our management and Board concerning ways to work together to achieve our strategic objectives. Owl Creek and our other significant stockholders could effectively block a proposed sale of the company, even if recommended by our Board.
In addition, in its recent filings with the SEC, Owl Creek reported that it expects to continue to engage in cooperative discussions with our management and Board concerning ways to work together to achieve our strategic objectives.
If such technologies, products and solutions are not available or competitively priced or are Page 19 Table of Contents significantly delayed, our customers may decide not to lease any broadband licenses we secure on acceptable terms, on a timely basis, or at all.
If such technologies, products and solutions are not available, not competitively priced or are significantly delayed, our targeted customers may decide not to pursue 900 MHz broadband licenses with us on acceptable terms, on a timely basis, or at all.
Our spectrum assets are located within the 3GPP global standard of Band 8 (also known as the E-GSM band, or 880 - 915 MHz paired with 925 - 960 MHz). Band 8 has been internationally approved and is currently being utilized with LTE broadband networks.
Page 21 Table of Contents Our spectrum assets are located within the 3GPP global standard of Band 8 (also known as the E-GSM band, or 880 - 915 MHz paired with 925 - 960 MHz). Band 8 is currently being utilized in LTE and 5G networks, with a specific designation for the US under band 106 / n106.
Such Build-Out Requirements could impose a significant expense and could cause potential customers to decide not to license broadband licenses from us, or to seek alternative communication solutions from other providers.
Such Build-Out Requirements could impose a significant expense and could cause potential customers to decide not to license broadband licenses from us, or to seek alternative communication solutions from other providers. Additionally, if the customer fails to satisfy these requirements, we have the step in rights to meet the Build-Out Requirements which could impose a significant expense on our business.
In the Report and Order, the FCC has established that a Broadband license can trigger a Mandatory Retuning process to help a broadband applicant clear the remaining channels in the broadband segment.
In the Report and Order, the FCC has established that a Broadband license can trigger a Mandatory Retuning process to help a broadband applicant clear the remaining channels in the broadband segment. Page 20 Table of Contents In addition, the FCC has exempted channels from the Mandatory Retuning process that are being utilized by incumbents operating Complex Systems.
We cannot be certain that we will be successful in implementing or maintaining effective internal controls for all financial periods. As we grow our business, our internal controls will become more complex, and we will require significantly more resources to ensure our internal controls remain effective.
As we grow our business, our internal controls will become more complex, and we will require significantly more resources to ensure our internal controls remain effective.
Any decline in the value of our spectrum or increases in the cost of the spectrum we acquire could have an adverse effect on our market value and our business and operating results.
Any decline in the value of our spectrum or increases in the cost of the spectrum we acquire could have an adverse effect on our market value and our business and operating results. We may not be successful in the petition filed with the FCC to expand the 900 MHz Broadband Segment from 6 MHz to 10 MHz.
As a result, our election to be subject to Section 203 of the DGCL could limit the ability of a third party to acquire control of us.
As a result, our election to be subject to Section 203 of the DGCL could limit the ability of a third party to acquire control of us. Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
In addition, such macroeconomic conditions could impact our ability to access the public markets as and when appropriate or necessary to carry out our operations or our strategic goals. We cannot predict the ongoing extent, duration or severity of these conditions, nor the extent to which we may be impacted.
Such conditions may adversely impact our business, financial results and prospects and our target customers’ businesses. In addition, such macroeconomic conditions could impact our ability to access the public markets as and when appropriate or necessary to carry out our operations or our strategic goals.
Some of our competitors, such as Verizon, AT&T, T-Mobile, Dish and UScellular , have significantly greater pricing flexibility, have taken steps and may decide to compete against us more aggressively. These and other competitors may own or acquire spectrum that directly competes with our 900 MHz spectrum and/or have developed or may develop technologies that directly compete with our solutions.
These and other competitors may own or acquire spectrum that directly competes with our 900 MHz spectrum and/or have developed or may develop technologies that directly compete with our solutions.
For example, the federal government created and funded the FRNA, which the federal government authorized to help accomplish, fund, and oversee the deployment of a dedicated NPSBN. The NPSBN, which is marketed as “FirstNet”, may provide an additional source of competition to utilizing our 900 MHz spectrum assets by our targeted utility and critical infrastructure enterprises.
For example, the federal government created and funded the FRNA, which the federal government authorized to help accomplish, fund, and oversee the deployment of a dedicated NPSBN.
Ongoing geopolitical matters have also contributed to difficult macroeconomic conditions and exacerbated supply chain issues, resulting in significant economic uncertainty as well as volatility in the financial markets and new regulatory and policy initiatives particularly in the United States. Such conditions may adversely impact our business, financial results, and prospects and our target customers’ businesses.
Recent macroeconomic events, inflation, and geopolitical matters, have created significant negative macroeconomic conditions, such as decreases in per capita income and level of disposable income, inflation, rising interest rates, and supply chain issues, resulting in significant economic uncertainty as well as volatility in the financial markets and new regulatory and policy initiatives particularly in the United States.
Removed
While the severity of the recent COVID-19 pandemic has lessened significantly, the pandemic has had a significant negative impact on the macroeconomic environment, such as decreases in per capital income and level of disposable income, inflation, rising interest rates, and supply chain issues.
Added
We may not be successful in developing, marketing, selling and delivering new products and services to our targeted utility and critical infrastructure customers . In addition to the leasing and sale of our spectrum assets, we are seeking to expand our product and service offerings to leverage and enhance the value of our spectrum assets.
Removed
To the extent macroeconomic conditions worsen, our business, operations and results of operation could be negatively impacted. Additionally, to the extent that there is a resurgence in the COVID-19 pandemic, or other health epidemics or outbreaks, our operations could be disrupted and our business adversely impacted.
Added
Most notably, we are actively marketing CatalyX, a turnkey connectivity management solution that helps utilities realize the benefits of private broadband networks, while leveraging commercial broadband networks. We also continue to explore other service offerings to help our customers deploy systems using our service offerings.
Removed
For example, subsequent to filing the Quarterly Report on Form 10-Q for the period ended September 30, 2021, we determined that our controls and procedures were not effective as the result of a material weakness in our internal controls over financial reporting related to the identification, review, analysis and recording of our intangible assets, more specifically, non-monetary exchanges of our narrowband licenses for broadband licenses.
Added
We face significant competition in development, sale, and delivery of products and services related to our spectrum to our customers. Many of these competitors have significantly larger workforces, a broad array of capabilities, deep customer relationships, and greater financial resources.
Removed
The material weakness was remediated as of March 31, 2022 as the applicable remedial controls operated for a sufficient period of time and management has concluded through testing, that these controls were operating effectively as of the end of the period covered by this Annual Report.
Added
We may not be able to adequately compete in sales of these additional offerings, or be unable to develop, market or deliver competitive offerings.

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Item 2. Properties

Properties — owned and leased real estate

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In November 2018, we entered into a lease agreement to store equipment located at 5520 North First Street, Abilene, Texas for 5 years with a termination date of October 2023. The leased warehouse includes approximately 37,409 square feet. We believe that our existing facilities are adequate for our current needs. We do not own any real property.
In November 2018, we entered into a lease agreement to store equipment located at 5520 North First Street, Abilene, Texas for 5 years with a termination date of January 2029. The leased warehouse includes approximately 37,409 square feet. We believe that our existing facilities are adequate for our current needs. We do not own any real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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See Note 12 Contingencies of the Notes to the Consolidated Financial Statements contained within this Annual Report for a further discussion of potential commitments and contingencies related to legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. Page 29 Table of Contents PART II.
See Note 13 Contingencies and Guaranty of the Notes to the Consolidated Financial Statements contained within this Annual Report for a further discussion of potential commitments and contingencies related to legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. Page 32 Table of Contents PART II.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Item 4. Mine Safety Disclosures 29 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 39
Item 4. Mine Safety Disclosures 32 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33 Item 6. [Reserved] 34 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 42

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The following table provides information with respect to purchases of our common stock by us or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act, during the three months ended March 31, 2023.
The following table provides information with respect to purchases of our common stock by us or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act, during the three months ended March 31, 2024.
We currently award stock options and restricted stock units to our employees meeting certain eligibility requirements under a plan approved by our stockholders in 2014, as amended, referred to as the “2014 Stock Plan” and have previously awarded stock options and restricted stock units to our employees meeting certain eligibility requirements under a plan approved by our stockholders in 2010.
We currently award stock options and restricted stock units to our employees meeting certain eligibility requirements under a plan approved by our stockholders in 2023, referred to as the “2023 Stock Plan” and have previously awarded stock options and restricted stock units to our employees meeting certain eligibility requirements under a plan approved by our stockholders in 2014 and 2010.
Page 30 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds. We did not sell any equity securities not registered under the Securities Act, during the fiscal year ended March 31, 2023. Purchase of Equity Securities by the Issuer and Affiliated Purchasers.
Unregistered Sales of Equity Securities and Use of Proceeds. We did not sell any equity securities not registered under the Securities Act, during the fiscal year ended March 31, 2024. Page 33 Table of Contents Purchase of Equity Securities by the Issuer and Affiliated Purchasers.
Issuer Purchases of Equity Securities (1) (in thousands except for share and per share data) Period Total Number of Shares Purchased Average Price paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs January 1, 2023 through January 31, 2023 Open market and privately negotiated purchases — $ — — $ 26,815 February 1, 2023 through February 28, 2023 Open market and privately negotiated purchases — — — 26,815 March 1, 2023 through March 31, 2023 Open market and privately negotiated purchases — — — 26,815 Total — $ — — $ 26,815 (1) On September 30, 2021, our Board authorized a share repurchase program pursuant to which we may repurchase up to $50.0 million of our outstanding shares of common stock on or before September 29, 2023.
Issuer Purchases of Equity Securities (1) (in thousands except for share and per share data) Period Total Number of Shares Purchased Average Price paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs January 1, 2024 through January 31, 2024 Open market and privately negotiated purchases 29,700 $ 30.05 29,700 $ 241,137 February 1, 2024 through February 29, 2024 Open market and privately negotiated purchases 32,045 35.27 32,045 240,020 March 1, 2024 through March 31, 2024 Open market and privately negotiated purchases 111,715 35.44 111,715 236,060 Total 173,460 $ 33.80 173,460 $ 236,060 (1) On September 29, 2021, our Board authorized a share repurchase program pursuant to which we may repurchase up to $50.0 million of our outstanding shares of common stock on or before September 29, 2023.
As of June 09, 2023, we had 19,042,634 shares of common stock outstanding and approximately 108 record holders of our common stock, including common stock held through brokerage firms in “street name.” Dividend Policy We have never declared or paid any cash dividends on our common stock.
As of June 21, 2024, we had 18,569,297 shares of common stock outstanding and approximately 101 record holders of our common stock, including common stock held through brokerage firms in “street name.” Dividend Policy We have never declared or paid any cash dividends on our common stock.
The following table summarizes information about our equity compensation plans as of March 31, 2023: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Stock Options or Rights (1) (a) Weighted-Average Exercise Price of Outstanding Stock Options or Rights (1) (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 1,436,731 $ 39.30 502,256 (2) Equity compensation plans not approved by security holders — — — (1) Does not take into account outstanding restricted stock units.
The following table summarizes information about our equity compensation plans as of March 31, 2024: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Stock Options, RSUs and PSUs (1) (a) Weighted-Average Exercise Price of Outstanding Stock Options or Rights (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 2,489,861 $ 39.67 18,764 (2) Equity compensation plans not approved by security holders — — — (1) I ncludes shares underlying RSUs and PSUs, at maximum, as of March 31, 2024.
The manner, timing and amount of any share repurchases may fluctuate and will be determined by us based on a variety of factors, including the market price of our common stock, our priorities for the use of cash to support our business operations and plans, general business and market conditions and alternative investment opportunities.
The manner, timing and amount of any share repurchases will be determined by us 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, our capital position, and other strategic considerations.
The share repurchase program authorization does not obligate us to acquire any specific number or dollar value of shares. Under the share repurchase program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. (2) Average price paid per share includes cost associated with the repurchases.
The 2023 Share Repurchase Program does not obligate us to repurchase any particular amount of our common stock. (2) Average price paid per share includes cost associated with the repurchases.
Removed
(2) Historically, the number of shares of our common stock reserved under the 2014 Stock Plan were increased, based on Board approval each January 1, which was intended to continue through and including January 1, 2024, by an amount equal to the smaller of 5% of the number of shares of our common stock issued and outstanding on the immediately preceding December 31 or a lesser amount determined by our Board (the “evergreen provision”).
Added
(2) On August 8, 2023 (the “Effective Date”), the Company adopted a new equity-based compensation plan known as the 2023 Stock Plan. The 2023 Stock Plan permits the Company to grant equity compensation awards to employees, consultants and non-employee directors of the Company.
Removed
On June 14, 2021, the Compensation Committee of our Board approved Amendment No. 1 to 2014 Stock Plan to eliminate the evergreen provision for all future years (i.e., January 1,2022 through January 1, 2024). There was no increase in the number of shares authorized under the 2014 Stock Plan during the fiscal year ended March 31, 2023.
Added
As of the Effective Date, no additional awards may be granted under the Anterix Inc. 2014 Stock Plan (the “2014 Stock Plan”). The 2023 Stock Plan authorizes 250,000 shares of common stock of the Company (“Shares”) for grant.
Removed
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
Added
Additionally, 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.
Removed
The performance graph set forth below compares our cumulative total stockholder return for the periods commending March 31, 2018 through March 31, 2023, assuming an initial investment of $100 in our common stock, and in each of the Nasdaq Capital Market Composite Index and Nasdaq Telecommunications Index and assumes the reinvestment of dividends.
Added
We repurchased and subsequently retired a total of $33.9 million of our common stock under the 2021 Share Repurchase Program, including $10.7 million during fiscal year 2024. On September 21, 2023, our Board authorized the new 2023 Share Repurchase Program pursuant to which we may repurchase up to $250.0 million of our common stock on or before September 21, 2026.
Removed
No dividends have been declared or paid on our common stock. The comparisons in the performance graph below are required by the SEC and are not intended to forecast or be indicative of possible absolute or relative future performance of our common stock, and we do not make or endorse any predictions as to future stockholder returns.
Added
We repurchased and subsequently retired a total of $13.9 million of our common stock under the 2023 Share Repurchase Program during fiscal year 2024. We may repurchase shares of our common stock via the open market and/or privately negotiated transactions. Repurchases will be made in accordance with applicable securities laws and may be effected pursuant to Rule 10b5-1 trading plans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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For Fiscal 2023, net cash used in financing activities was primarily from the repurchase of common stock of $8.2 million, partially offset by the proceeds from stock option exercises of $1.7 million, net of payments of withholding tax on net issuance of restricted stock of $1.6 million.
For Fiscal 2023, net cash used in financing activities was primarily from the repurchase of common stock of $8.2 million, payments of withholding tax on net issuance of restricted stock of $1.6 million, partially offset by the proceeds from stock option exercises of $1.7 million.
Xcel Energy Guaranty In connection with Xcel Energy Agreement, we entered into a guaranty agreement, under which we 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 connection with Xcel Energy Agreement, we entered into a guaranty agreement, under which we 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.
If required, we intend to raise additional capital through debt or equity financings or through some other financing arrangement. However, we cannot be sure that additional financing will be available if and when needed, or that, if available, we can obtain financing on terms favorable to our stockholders and to us.
If required, we intend to raise additional capital through debt or equity financing or through some other financing arrangement. However, we cannot be sure that additional financing will be available if and when needed, or that, if available, we can obtain financing on terms favorable to our stockholders and to us.
As noted above, our future capital requirements will depend on a number of factors, including among others, the costs and timing of our spectrum retuning activities, spectrum acquisitions and the Anti-Windfall Payments to the U.S.
As noted above, our future capital requirements will depend on a number of factors, including among others, future customer contracts, the costs and timing of our spectrum retuning activities, spectrum acquisitions and the Anti-Windfall Payments to the U.S.
In February 2021, we entered into an agreement with 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.
SDG&E Agreement In February 2021, we 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.
Share Repurchase Program In September 2021, our Board authorized a share repurchase program pursuant to which we may repurchase up to $50.0 million of our common stock on or before September 29, 2023.
Share Repurchase Program In September 2021, our Board authorized a share repurchase program (the “2021 Share Repurchase Program”) pursuant to which we may repurchase up to $50.0 million of our common stock on or before September 29, 2023.
Total estimated payments as a result of the ARO is approximately $0.6 million. See Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report for further information on the AROs.
Total estimated payments as a result of the ARO are approximately $0.7 million. See Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report for further information on the AROs.
Material Cash Requirements Our future capital requirements will depend on many factors, including: costs and time related to the commercialization of our spectrum assets; and our ability to sign customer contracts and generate revenues from the license or transfer of any broadband licenses we secure; and our ability to timely deliver broadband licenses and clear spectrum to our customers in accordance with our contractual obligation; the timeline and costs to acquire broadband licenses pursuant to the Report and Order, including the costs to acquire additional spectrum, the costs related to retuning, or swapping spectrum held by 900 MHz site-based licensees in the broadband segment that is required under section 90.621(b) to be protected by a Page 37 Table of Contents broadband licensee with a base station at any location within the county, or any 900 MHz geographic-based SMR licensee in the broadband segment whose license area completely or partially overlaps the county, and the costs of paying Anti-Windfall Payments to the U.S.
Material Cash Requirements Our future capital requirements will depend on many factors, including: costs and time related to the commercialization of our spectrum assets; and our ability to sign customer contracts and generate revenues from the license or transfer of any broadband licenses we secure; our ability to timely deliver broadband licenses and clear spectrum to our Page 39 Table of Contents customers in accordance with our contractual obligation; any requirement to refund payments or pay penalties if we do not satisfy our contractual obligations; the timeline and costs to acquire broadband licenses pursuant to the Report and Order, including the costs to acquire additional spectrum, the costs related to retuning, or swapping spectrum held by 900 MHz site-based licensees in the broadband segment that is required under section 90.621(b) to be protected by a broadband licensee with a base station at any location within the county, or any 900 MHz geographic-based SMR licensee in the broadband segment whose license area completely or partially overlaps the county, and the costs of paying Anti-Windfall Payments to the U.S.
Our significant Page 38 Table of Contents accounting policies are set forth in Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report.
Our significant accounting policies are set forth in Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report.
Business Developments On October 28, 2022, we entered into an agreement with Xcel Energy providing Xcel Energy dedicated long-term usage of our 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states.
Xcel Energy Guaranty In October 2022, we entered into an agreement with Xcel Energy providing Xcel Energy dedicated long-term usage of our 900 MHz Broadband Spectrum for a term of 20 years throughout Xcel Energy’s service territory in eight states the Xcel Energy Agreement.
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 we deliver the associated broadband licenses to SDG&E and the relevant cleared 900 MHz Broadband Spectrum.
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 we deliver the relevant cleared 900 MHz Broadband Spectrum and the associated broadband licenses to SDG&E.
As of March 31, 2023, $26.8 million is remaining under the share repurchase program. Critical Accounting Estimates The accompanying consolidated financial statements have been prepared in accordance with U.S.
As of March 31, 2024, $236.1 million is remaining under the share repurchase program. Critical Accounting Estimates The accompanying consolidated financial statements have been prepared in accordance with U.S.
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.
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.
Contracted cash proceeds The following table illustrates the estimated contracted customer proceeds for Fiscal 2024 and thereafter (in thousands): Customers Fiscal 2024* Thereafter* Ameren $ — $ 24,800 SDG&E 26,600 3,200 Xcel Energy 59,200 12,800 LCRA 15,000 15,000 Total $ 100,800 $ 55,800 * Total cash proceeds are subject to change based on final delivery date of the broadband licenses for the associated milestone, which may include penalties associated with delayed deliveries.
The following table illustrates the estimated contracted customer proceeds for Fiscal 2025 and thereafter (in thousands): Customers Fiscal 2025* Thereafter* Ameren $ 8,500 $ 16,300 SDG&E — 3,100 Xcel Energy — 12,800 LCRA — 15,000 TECO — 27,600 Total $ 8,500 $ 74,800 * Total cash proceeds are subject to change based on final delivery date of the broadband licenses for the associated milestone, which may include penalties associated with delayed deliveries.
For Fiscal 2022, net cash used in financing activities was primarily from the repurchase of common stock of $15.0 million, partially offset by the proceeds from stock option exercises of $14.0 million, net of payments of withholding tax on net issuance of restricted stock of $1.5 million.
For Fiscal 2024, net cash used in financing activities was primarily from the repurchase of common stock of $24.7 million, payments of withholding tax on net issuance of restricted stock of $1.2 million, partially offset by the proceeds from stock option exercises of $0.8 million.
Recent Developments On April 20, 2023, we entered into a license purchase agreement with LCRA under which LCRA will purchase 900 MHz Broadband Spectrum covering 68 counties and more than 30 cities in LCRA’s wholesale electric, transmission, and water service area for total payments of $30.0 million plus the contribution of select LCRA 900 MHz narrowband spectrum.
LCRA Agreement In April 2023, we entered into an agreement with 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.
The following table presents the share repurchase activity for Fiscal 2023, Fiscal 2022 and Fiscal 2021 (in thousands, except per share data): For the years ended March 31, 2023 2022 2021 Number of shares repurchased and retired 216 252 — Average price paid per share* $ 47.05 $ 57.50 $ — Total cost to repurchase $ 8,223 $ 14,962 $ — * Average price paid per share includes costs associated with the repurchases.
Page 40 Table of Contents 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, 2024 2023 Number of shares repurchased and retired 736 216 Average price paid per share* $ 33.72 $ 47.05 Total cost to repurchase $ 24,676 $ 8,223 * Average price paid per share includes costs associated with the repurchases.
Total estimated payments for these lease agreements are approximately $5.5 million (exclusive of real estate taxes, utilities, maintenance and other costs borne by us). In addition to the lease payments for our tower space, we also have an obligation to clear the tower site locations, for which we recorded an asset retirement obligation (the “ARO”).
The lease expiration dates range from April 30, 2024 to March 21, 2031. Total estimated payments for these lease agreements are approximately $6.1 million (exclusive of real estate taxes, utilities, maintenance and other costs borne by us). We also have an obligation to clear the tower site locations, for which we recorded an asset retirement obligation (the “ARO”).
Net cash (used in) provided by financing activities Net cash used in financing activities was approximately $8.1 million and $2.4 million in Fiscal 2023 and Fiscal 2022, respectively. Net cash provided by financing activities was $4.2 million in Fiscal 2021.
Net cash provided by (used in) investing activities was approximately $8.1 million and $27.1 million in Fiscal 2024 and Fiscal 2023 respectively.
Treasury. We are 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 a three to ten-year lease extension for our corporate headquarters.
Treasury. We are 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 a three to ten-year lease extension for our corporate headquarters. We have also entered into multiple lease agreements for tower space related to its spectrum holdings.
Overview We are a wireless communications company focused on commercializing our spectrum assets to enable our targeted utility and critical infrastructure customers to deploy private broadband networks and on offering innovative broadband solutions to the same target customers.
We are focused on commercializing our spectrum assets and expanding the benefits and solutions we offer to enable our targeted utility and critical infrastructure customers to deploy private broadband networks.
Based on the results of the impairment test, there were no impairment charges recorded during the year ended March 31, 2023. Recent Accounting Pronouncements Information regarding recent accounting pronouncements, including those recently adopted, is provided in Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report.
Recent Accounting Pronouncements Information regarding recent accounting pronouncements, including those recently adopted, is provided in Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report.
In connection with the exchange, we recorded an estimated accounting cost basis of $46.2 million for the new broadband licenses and disposed of $7.8 million related to the value ascribed to the narrowband licenses we relinquished to the FCC for those same 84 counties.
During Fiscal 2024, we exchanged our narrowband licenses for broadband licenses in 28 counties. In connection with the exchange, we recorded an estimated accounting cost basis of $43.7 million for the new broadband licenses and relinquished to the FCC narrowband licenses for those same 28 counties valued at $8.7 million.
We are 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.
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, we are uniquely positioned to deliver solutions that support secure, resilient and customer-controlled operations.
The increase in our spectrum lease revenue was attributable to revenue recognized in connection with our agreements with Ameren and Evergy of approximately $0.3 million and $0.6 million, respectively, for the current year. Overall operating revenues increased by $0.2 million, or 18%, to $1.1 million in Fiscal 2022 from $0.9 million in Fiscal 2021.
The increase in our spectrum lease revenue was attributable to revenue recognized in connection with our agreements with Evergy and Xcel Energy of approximately $0.4 million and $1.9 million, respectively, for the current year.
As a result, we will utilize the DI scores on a go-forward basis for our impairment analysis. We 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.
Page 41 Table of Contents During the years ended March 31, 2024 and 2023, we 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.
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 in December 2022. In September 2021, we entered into a long-term lease agreement of 900 MHz Broadband Spectrum with Evergy.
Xcel Energy Agreement In October 2022, we entered into an agreement with Xcel Energy providing Xcel Energy dedicated long-term usage of our 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 in December 2022.
The net cash used in operating activities in Fiscal 2023 was due to the following: • $16.3 million net loss, offset by the following non-cash activity: ◦ increase of $1.4 million for depreciation and amortization as a result of assets placed in service during the year; ◦ increase of $17.9 million in stock-based compensation expense due to additional grants awarded; and ◦ decrease of $38.4 million related to the non-monetary gain on disposals of intangible assets in connection to our exchange of narrowband licenses for broadband licenses; offset by the following: • $6.1 million increase in deferred revenue due to $8.0 million cash proceeds from our 900 MHz Broadband Spectrum customer prepayments offset by $1.9 million in revenue recognition in connection with the delivery of cleared 900 MHz Broadband Spectrum.
The net cash used in operating activities in Fiscal 2023 was primarily due to the following: • $6.1 million increase in deferred revenue due to $8.0 million cash proceeds from our 900 MHz Broadband Spectrum customer prepayments offset by $1.9 million in revenue recognition in connection with the delivery of cleared 900 MHz Broadband Spectrum. • $0.2 million increase in contingent liability related to the SDG&E Agreement; and • $16.3 million decrease related to our operating loss, which includes $17.2 million of non-cash items.
Treasury, our operating activities, any cash proceeds we generate through our commercialization activities and our ability to timely deliver broadband licenses to our customers in accordance with our contractual obligations. We deploy this capital at our determined pace based on several key ongoing factors, including customer demand, market opportunity, and offsetting income from spectrum leases.
We deploy this capital at our determined pace based on several key ongoing factors, including customer demand, market opportunity, and offsetting income from spectrum leases.
(See Note 7 Related Party Transactions in the Notes to the Consolidated Financial Statements contained within this Annual Report).
See Note 3 Revenue in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion on the TECO Agreement.
The increase in our spectrum lease revenue was attributable to revenue recognized in connection with the Ameren Agreements of approximately $0.4 million. For a discussion of our revenue recognition policy, refer to Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report.
For a discussion of our revenue recognition policy, refer to Note 2 Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements contained within this Annual Report. • Product development expenses increased by $1.3 million, or 28%, to $5.7 million for Fiscal 2024 from $4.4 million for Fiscal 2023.
As a result, we recorded a $11.2 million gain from disposal of the intangible assets on our Consolidated Statements of Operations. Refer to Note 5 Intangible Assets in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion on the exchanges.
Refer to Note 6 Intangible Assets in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion on the exchanges. • Gain on sale of intangible assets, net increased by $7.4 million, or 100%, to $7.4 million for Fiscal 2024 from zero for Fiscal 2023.
During the year ended March 31, 2023, we delivered to Evergy the 1.4 x 1.4 cleared 900 MHz Broadband Spectrum and the associated broadband licenses for 81 counties. The revenue recognized for the year ended March 31, 2023 was approximately $0.6 million.
During the year ended March 31, 2024, we 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.
Page 35 Table of Contents Liquidity and Capital Resources Our principal source of liquidity is our cash and cash equivalents generated from customer contract proceeds. On March 31, 2023, we had cash and cash equivalents of $43.2 million.
The increase was primarily attributable to higher interest rates and higher cash balance. Liquidity and Capital Resources Our principal source of liquidity is our cash and cash equivalents generated from customer contract proceeds. At March 31, 2024, we had cash and cash equivalents of $60.6 million.
In September 2022, we 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. Page 32 Table of Contents In May 2022, we issued Motorola 500,000 shares of our common stock.
In September 2023, we transferred to SDG&E the San Diego County broadband license and received a milestone payment net of delivery delay adjustments of $25.2 million. In December 2023, we 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.
Net cash used in investing activities Net cash used in investing activities was approximately $27.1 million, $27.4 million and $14.2 million in Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively. For Fiscal 2023, the net cash used in investing activities resulted from $25.0 million in wireless license acquisitions including refundable deposits and $2.1 million for purchases of equipment.
For Fiscal 2023, the net cash used in investing activities resulted from $25.0 million in payments made to acquire, swap or retune wireless licenses in markets across the United States and $2.1 million for purchases of equipment.
Product development expenses Product development expenses increased by $0.8 million, or 24%, to $4.4 million for Fiscal 2023 from $3.6 million for Fiscal 2022. The increase primarily resulted from $0.6 million higher non-recurring engineering costs, $0.5 million higher contract consulting costs and $0.1 million higher costs related to professional services, partially offset by $0.4 million lower headcount and related cost.
The increase primarily resulted from $1.0 million higher non-recurring engineering fees related to developing next generation chipsets for band 106 ecosystem, $0.6 million higher head count and related costs, $0.1 million higher professional services, partially offset by $0.2 million lower contract consulting costs and $0.2 million lower stock compensation expense due to fewer grants. • Gain from disposal of intangible assets, net decreased by $3.4 million, or -9%, to $35.0 million for Fiscal 2024 from $38.4 million for Fiscal 2023.
We 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. As of March 31, 2023, the maximum potential liability of future undiscounted payments under this agreement is approximately $8.0 million.
We recorded $67.1 million in deferred revenue in connection with the prepayments received as of March 31, 2024. We 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.
The manner, timing and amount of any share repurchases will be determined by us based on a variety of factors, including price, general business and market conditions and alternative investment opportunities. The share repurchase program authorization does not obligate us to acquire any specific number of shares.
The manner, timing and amount of any share repurchases will be determined by us 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, our capital position and other strategic considerations.
Net cash used in operating activities was approximately $10.0 million in Fiscal 2021.
The following represents our changes in net cash provided by (used in) operating activities for Fiscal 2024 and Fiscal 2023. Net cash provided by operating activities was approximately $42.0 million in Fiscal 2024.
As we cannot predict the duration or scope of the current negative macroeconomic environment, including any adverse effects of the health pandemics, inflation, regulatory and policy changes, and geopolitical matters, or their respective impacts on our business or our targeted customers, we cannot reasonably estimate any respective potential negative financial impact to our results of operations, commercialization efforts and financial condition.
We cannot reasonably estimate any potential impact to our results of operations, commercialization efforts and financial condition arising from changes to our macroeconomic, legal or regulatory environment, including potential legislation affecting the energy or utility industry, the telecommunications environment, or supply chains.
Net cash used in operating activities was approximately $17.9 million in Fiscal 2022.
Net cash used in financing activities was approximately $25.1 million and $8.1 million in Fiscal 2024 and Fiscal 2023, respectively.
Cash Flows from Operating, Investing and Financing Activities For the years ended March 31, (in thousands) 2023 2022 2021 Net cash (used in) provided by operating activities $ (27,250) $ 17,913 $ (9,959) Net cash used in investing activities $ (27,130) $ (27,411) $ (14,174) Net cash (used in) provided by financing activities $ (8,062) $ (2,416) $ 4,218 Net cash (used in) provided by operating activities Net cash used in operating activities was approximately $27.3 million in Fiscal 2023 an increase of $45.2 million from Fiscal 2022.
Cash Flows from Operating, Investing and Financing Activities For the years ended March 31, (in thousands) 2024 2023 Net cash provided by (used in) operating activities $ 41,993 $ (27,250) Net cash provided by (used in) investing activities $ 8,089 $ (27,130) Net cash used in financing activities $ (25,140) $ (8,062) Net cash provided by (used in) operating activities Our principal source of cash provided by operating activities is our customer contract proceeds in the form of advanced payments.
As a result, we recorded a $38.4 million gain from disposal of the intangible assets on our Consolidated Statements of Operations. Refer to Note 5 Intangible Assets in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion on the exchanges. During Fiscal 2022, we exchanged our narrowband licenses for broadband licenses in 21 counties.
Refer to Note 6 Page 37 Table of Contents Intangible Assets in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion on the sale of intangible assets. • Interest income increased by $1.2 million, or 108%, to $2.4 million for Fiscal 2024 as compared to $1.1 million from Fiscal 2023.
The net cash used in operating activities in Fiscal 2022 due to the following: • $37.5 million net loss, offset by the following non-cash activity: ◦ increase of $1.5 million for depreciation and amortization as a result of assets placed in service during the year; ◦ increase of $13.6 million in stock-based compensation expense due to additional grants awarded; and Page 36 Table of Contents ◦ decrease of $11.2 million related to the non-monetary gain on disposals of intangible assets in connection to our exchange of narrowband licenses for broadband licenses; offset by the following: • $51.7 million increase in deferred revenue due to $52.8 million cash proceeds from our 900 MHz Broadband Spectrum customer prepayments offset by $1.1 million in revenue recognition in connection with the delivery of cleared 900 MHz Broadband Spectrum.
The net cash provided by operating activities in Fiscal 2024 was primarily due to the following: • $61.5 million increase in deferred revenue due to $66.0 million cash proceeds from our 900 MHz Broadband Spectrum customer prepayments offset by $4.2 million in revenue recognition in connection with the delivery of cleared 900 MHz Broadband Spectrum; • $15.0 million increase in contingent liability related to the LCRA Agreement; and • $9.1 million decrease related to our operating loss, which includes $23.6 million of non-cash items.
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 Exchange Act. We currently anticipate the cash used for the share repurchase program will come primarily from our prepaid customer agreements.
We repurchased and subsequently retired a total of $13.9 million of our common stock under the 2023 Share Repurchase Program during fiscal year 2024. We may repurchase shares of our common stock via the open market and/or privately negotiated transactions. Repurchases will be made in accordance with applicable securities laws and may be effected pursuant to Rule 10b5-1 trading plans.
Under the agreement, we transferred spectrum licenses with a book value of approximately $0.3 million to the third party. We recognized a $1.1 million gain from disposal of intangible assets on our Consolidated Statements of Operations when the deal closed in September 2020.
As a result, we recorded a $35.0 million non-monetary gain from disposal of the intangible assets on our Consolidated Statements of Operations.
Removed
On May 13, 2020, the FCC approved 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.
Added
Overview Anterix Inc (“Anterix,” “we,” “our,” or the “Company”) is the utility industry’s partner, empowering enhanced visibility, control and security for a modern grid. Our vision is to deliver secure, scalable solutions enabled by private wireless broadband connectivity, for the benefit of utilities and the communities that they serve.
Removed
The Report and Order was published in the Federal Register on July 16, 2020 and became effective on August 17, 2020. We are now engaged in qualifying for and securing broadband licenses from the FCC. At the same time, we are pursuing opportunities to monetize the broadband spectrum we secure to our targeted utility and critical infrastructure customers.
Added
Business Developments Oncor Agreement On June 26, 2024, we 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”).
Removed
The Xcel Energy Agreement also provides Xcel Energy an option to extend the agreement for two 10-year terms for additional payments. 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.
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 us.
Removed
The Evergy service territories covered by the Evergy Agreement are in Kansas and Missouri with a population of approximately 3.9 million people. The Evergy Agreement is for an initial term of 20 years with two 10-year renewal options for additional payments. We received full prepayment of $30.2 million for the initial 20-year term in October 2021.
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.
Removed
Motorola received the Shares by electing to convert 500,000 Class B Units it held in our subsidiary, PDV Spectrum Holding Company, LLC.
Added
TECO Agreement In November 2023, we entered into an agreement with TECO to provide TECO the use of our 900 MHz Broadband Spectrum for a term of 20 years throughout TECO’s service territory in West Central Florida the TECO Agreement. The TECO Agreement also provides TECO an option to extend the agreement for two 10-year terms for additional payments.
Removed
Motorola acquired the Units in September 2014 in connection with 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.
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. The scheduled prepayments for the 20-year initial term of the TECO Agreement total Page 35 Table of Contents $34.5 million, of which $6.9 million was received in December 2023.
Removed
Motorola had the right at any time to convert its Units into the Shares, representing a conversion price of $20.00 per share. In June 2022, we filed a Registration Statement on Form S-3 to register the 500,000 shares of our common stock held by Motorola for resale or other disposition by Motorola.
Added
Total consideration of $30.0 million is to be paid through fiscal year 2026 pursuant to the terms of the LCRA Agreement.
Removed
The Resale Registration Statement was declared effective by the SEC on July 15, 2022.
Added
During the year ended March 31, 2024, we received an initial $15.0 million payment, of which $7.5 million was deposited in an escrow account (refer to Note 4 Escrow Deposits in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion).
Removed
The 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
See Note 13 Contingencies and Guaranty in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion on the LCRA Agreement.
Removed
Results of Operations Comparison of the years ended March 31, 2023, 2022 and 2021 The following table sets forth our results of operations for the fiscal years ended March 31, 2023 (“Fiscal 2023”), March 31, 2022 (“Fiscal 2022”) and March 31, 2021 (“Fiscal 2021”).
Added
In July 2023 and November 2023, we delivered the cleared 900 MHz Broadband Spectrum and the associated broadband leases and received the milestone payments of $21.2 million in each period.
Removed
The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.
Added
Refer to Note 6 Intangible Assets in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion on the sale of intangible assets. 2023 Stock Plan On August 8, 2023, we adopted a new equity-based compensation plan known as the Anterix Inc. 2023 Stock Plan (the “2023 Stock Plan”).
Removed
Operating revenues For the years ended March 31, Aggregate Change Aggregate Change (in thousands) 2023 2022 2021 2023 from 2022 2022 from 2021 Service revenue $ — $ — $ 192 $ — 0 % $ (192) -100 % Spectrum lease revenue 1,919 1,084 729 835 77 % 355 49 % Total operating revenues $ 1,919 $ 1,084 $ 921 $ 835 77 % $ 163 18 % Overall operating revenues increased by $0.8 million, or 77%, to $1.9 million in Fiscal 2023 from $1.1 million in Fiscal 2022.
Added
The 2023 Stock Plan permits us to grant equity compensation awards to employees, consultants and non-employee directors of the Company.
Removed
Operating expenses For the years ended March 31, Aggregate Change Aggregate Change (in thousands) 2023 2022 2021 2023 from 2022 2022 from 2021 Direct cost of revenue (exclusive of depreciation and amortization) $ — $ 5 $ 1,606 $ (5) -100 % $ (1,601) -100 % General and administrative 45,177 39,525 39,302 5,652 14 % 223 1 % Sales and support 5,733 4,461 2,942 1,272 29 % 1,519 52 % Product development 4,439 3,593 4,343 846 24 % (750) -17 % Depreciation and amortization 1,420 1,450 3,533 (30) -2 % (2,083) -59 % Impairment of long-lived assets — — 85 — 0 % (85) -100 % Operating expenses $ 56,769 $ 49,034 $ 51,811 $ 7,735 16 % $ (2,777) -5 % Direct cost of revenue Direct cost of revenue decreased from $5,000 for Fiscal 2022 to zero for Fiscal 2023.
Added
Refer to Note 11 Stock Compensation in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion. 2023 Share Repurchase Program On September 21, 2023, our Board authorized a new share repurchase program (the “2023 Share Repurchase Program”) pursuant to which we may repurchase up to $250.0 million of our common stock on or before September 21, 2026.
Removed
Direct cost of revenue decreased by $1.6 million to $5,000 for Fiscal 2022, or 100%, from $1.6 million for Fiscal 2021.
Added
Refer to Note 11 Stock Compensation in the Notes to the Consolidated Financial Statements contained within this Annual Report for further discussion. Page 36 Table of Contents Results of Operations A discussion and analysis of the primary factors contributing to our results of operations are presented below.
Removed
The decrease is due to lower support costs related to the transfer of pdvConnect customers to the Team Connect LLC as part of our December 2018 restructuring efforts as discussed in Note 3 Revenue in the Notes to the Consolidated Financial Statements contained within this Annual Report.
Added
The following tables summarize our results of operations and financial data for the years ended March 31, 2024 (“Fiscal 2024”) and March 31, 2023 (“Fiscal 2023”). The following data should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in “Item 8.
Removed
Page 33 Table of Contents General and administrative expenses General and administrative expenses increased by $5.7 million to $45.2 million for Fiscal 2023, or 14%, from $39.5 million for Fiscal 2022.
Added
Financial Statements and Supplementary Data” of this Form 10-K. 2024 2023 Spectrum revenue $ 4,191 $ 1,919 Operating expenses General and administrative 44,423 45,177 Sales and support 5,693 5,733 Product development 5,697 4,439 Depreciation and amortization 844 1,420 Operating expenses 56,657 56,769 Gain from disposal of intangible assets, net (35,024) (38,399) Gain on sale of intangible assets, net (7,364) — Loss from disposal of long-lived assets, net 44 10 Loss from operations (10,122) (16,461) Interest income 2,374 1,140 Other income 233 266 Loss before income taxes (7,515) (15,055) Income tax expense 1,613 1,262 Net loss $ (9,128) $ (16,317) Summary.
Removed
The increase primarily resulted from $4.3 million higher stock compensation expense due to additional grants awarded during Fiscal 2023, $1.0 million higher headcount and related costs, $0.4 million higher travel and meeting costs, $0.3 million higher regulatory fees, and $0.1 million higher IT related costs, partially offset by $0.3 million lower site related costs and $0.1 million lower professional services.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this item are set forth in Item 15 on pages F-2 through F-31 and are filed as part of this Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this item are set forth in Item 15 on pages F-2 through F-27 and are filed as part of this Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
Continued periods of high inflation could have a material adverse effect on our business, operating results and financial condition if we are not able to control our higher operating costs Page 39 Table of Contents or if our commercialization efforts are slowed or negatively impacted, continued periods of high inflation could have a material adverse effect on our business, operating results and financial condition.
Continued periods of high inflation could have a material adverse effect on our business, operating results and financial condition if we are not able to control our operating costs or if our commercialization efforts are slowed or negatively impacted, continued periods of high inflation could have a material adverse effect on our business, operating results and financial condition.

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