PERPETUAL CUMULATIVE CONVERTIBLE PREFERRED STOCK (Block)

12 Months Ended

Dec. 31, 2016

Disclosure Text Block Supplement Abstract

9. PERPETUAL CUMULATIVE CONVERTIBLE PREFERRED STOCK

In connection with an acquisition on July 16, 2015 as described in Note 18, Business Combinations, the Company issued perpetual cumulative convertible preferred stock (“Preferred”) that in the event of a liquidation, ranks senior to common stock as to liquidation preference. The payment of the liquidation preference of the Preferred will take preference over any liquidation payments to the Company’s common shareholders. The Preferred is convertible by the holder into a fixed number of 1.9 million shares, as adjusted as of December 31, 2016, at a price of $14.35, subject to customary anti-dilution provisions after a three-year waiting period. At certain times (including during the first three years after issuance), the Company can redeem the Preferred in cash at a price of 100%. The dividend rate on the Preferred at December 31, 2016 is 8% and increases over time to 12%. Due to the legal obligation to pay cumulative dividends as a liquidation preference, the dividends are accrued as they are earned instead of when they are declared.

The Company reflected the Preferred as mezzanine due to a change in control contingency provision that provides the holder with a redeemable feature. For accounting purposes, the Preferred is not considered mandatorily redeemable at the holder’s option until the contingency is met.

The Company incurred issuance costs, which are recorded as a reduction of the Preferred. The following table reflects the Preferred shares authorized, issued and outstanding:

			December 31,
			2016		2015
			(amounts in thousands, except
			shares)
Perpetual cumulative convertible preferred stock $0.01 par value
	Shares issued and outstanding		11		11

	Aggregate liquidation preference	$	27,500	$	27,500
	Less stock issuance costs		(220)		(220)
	Plus accrued dividend as of the end of period		452		339
	Net carrying value	$	27,732	$	27,619