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Preferred Stock
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Mar. 31, 2015
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| Preferred Stock |
Note 10 - Preferred Stock
Series A Convertible Preferred Stock Financing
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. Pursuant to the terms of the Series A Purchase Agreement, on May 17, 2013 (the "Closing Date"), the Company issued 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 approximately $1.22 per share (the "Purchase Price"), for aggregate proceeds of approximately $23,501 thousand. Subject to certain conditions, each share of Series A Preferred Stock and any related unpaid accumulated dividends are convertible into one share of the Company's Common Stock, par value $0.01 per share, at an initial conversion price equal to the Purchase Price. Please refer to Note 10 - Preferred Stock of the Notes to the Consolidated Financial Statements in the Company's 2014 Form 10-K for further information regarding key terms and registration rights applicable to the Company's Series A Preferred Stock.
The Company has analyzed the embedded features of the Series A Preferred Stock and has determined that none of the embedded features is required under US GAAP to be bifurcated from the Series A Preferred Stock and accounted for separately as a derivative. The Company recorded the transaction by recognizing the fair value of the Series A Preferred Stock at the time of issuance in the amount of $23,501 thousand. The Company will accrete the Series A Preferred Stock to the redemption value if events or circumstances indicate that redemption is probable. No accretion was recorded during the nine months ended March 31, 2015, nor during the year ended June 30, 2014.
For the nine months ended March 31, 2015 and 2014, the Company recorded preferred stock dividends of $1,296 thousand and $1,267 thousand, respectively, related to the Series A Preferred Stock. The preferred stock dividends for the six months ended March 31, 2015, were paid in kind. Accordingly, the value of these dividends of $867 thousand was recorded and added to the preferred stock balance on the Company's balance sheet at March 31, 2015.
The activity related to the Series A Preferred Stock for the nine months ended March 31, 2015, and the fiscal year ended June 30, 2014, is as follows:
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