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Subsequent Events Subsequent Events (Notes)
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9 Months Ended |
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Mar. 31, 2013
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Note 15 - Subsequent Events
Series A Convertible Preferred Stock Financing Agreement
On May 10, 2013, the Company entered into a Series A Convertible Preferred Stock Purchase Agreement (the "Series A Purchase Agreement") with One Stone Holdings II LP ("One Stone"), an affiliate of One Stone Energy Partners, L.P., a New York based private equity firm focused on investments in the oil and gas industry. Pursuant to the terms of the Series A Purchase Agreement, upon the fulfillment of certain customary closing conditions, the Company will issue and sell to One Stone 19,239,734 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"), at a purchase price of $1.22 per share (the “Purchase Price”), for aggregate proceeds of approximately $23.5 million. Subject to certain conditions, each share of Series A Preferred Stock and any related unpaid accumulated dividends will be convertible into one share of the Company's Common Stock, par value $0.01 per share (the "Common Stock"), at an initial conversion price of $1.22 per share (the "Conversion Price").
The Company will receive the proceeds of this transaction upon the closing of the Series A Purchase Agreement (with the date of such closing referred to herein as the "Closing Date"), which is expected to occur on or before May 22, 2013, subject to the satisfaction of certain customary closing conditions.
Holders of Series A Preferred Stock will be entitled to a dividend equivalent of 7.0% per annum on the face value, which will be the Purchase Price plus any accumulated unpaid dividends, payable quarterly in arrears. Dividends will generally be payable in cash or in kind (in the form of additional shares of Series A Preferred Stock), at the Company's option.
Subject to certain conditions, each share of Series A Preferred Stock will be convertible at any time into a number of shares of common stock equal to the face amount of the Series A Preferred Stock divided by the conversion price of $1.22 per share of common stock, with conversion subject to a cap until full convertibility and full voting rights are approved by the holders of the common stock pursuant to NASDAQ listing rules. Subject to certain conditions, at any time after the third anniversary of the Closing Date, the Company will have the right to force conversion and will have the right to redeem all of the shares of Series A Preferred Stock for a cash payment equal to the greater of (i) the closing sales price of the common stock on the date the Company exercises such right multiplied by the number of shares of common stock issuable upon conversion of the then-outstanding Series A Preferred Stock, or (ii) an amount that, when considering all dividends already paid, allows One Stone to achieve a 20% annualized internal rate of return on the then outstanding Series A Preferred Stock. One Stone will be able to convert the Series A Preferred Stock into shares of common stock at any time prior to the close of business on the redemption date. The Series A Preferred Stock will rank senior to common stock with respect to dividend rights and rights upon liquidation, winding up, and dissolution.
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