SHAREHOLDERS’ EQUITY |
9 Months Ended |
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Sep. 30, 2024 | |
| Equity [Abstract] | |
| SHAREHOLDERS’ EQUITY |
10. SHAREHOLDERS’ EQUITY
On September 11, 2024 a Certificate of Amendment (the “Amendment”) to the Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Preferred Stock (the “Existing Certificate”) became effective, amending certain provisions of the 11% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”).
The title of the Existing Certificate was amended to read “Amended and Restated Certificate of Designations, Preferences and Rights of 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock.” Holders of Series A Preferred Stock will receive similar change of control protections to those afforded to holders of the Company’s Series B Preferred Stock. The dividend of Series A Preferred Stock was amended from 11% to 8.75% per annum and the per annum dividend amount per share was amended from $2.75 to $2.1875 per share per annum. Also, the Company now has the right to exchange the shares of Series A Preferred Stock for common stock at the liquidation preference value of the $25 per share, plus accrued and unpaid dividends.
The Company had the right to sell up to $ million of its Series B Preferred Stock using its preferred stock at-the-market facility (“ATM”). This right terminated when the Company suspended the Preferred Stock dividends in December 2023. The Company also had the right to sell up to $ million of its common stock using a common stock ATM facility. This right also terminated when the Company suspended the Preferred Stock dividends. The underwriters of the ATMs receive 3% of the gross proceeds actually received.
On December 11, 2023, the Board of Directors suspended the monthly cash dividends for the Series A Preferred Stock and Series B Preferred Stock beginning with the payment scheduled for December 15, 2023 together with the remaining dividends that were declared. The suspension of these dividends deferred approximately $ million in cash dividend payments each month. Due to the above Amendment, effective on September 12, 2024, the monthly cash dividends were reduced to approximately $ million per month. During this suspension, dividends will continue to accumulate in arrears on the Series A and Series B Preferred Stock. The Board of Directors will regularly review and consider when the suspension should be lifted.
During the nine months ended September 30, 2024, no dividends were declared by the Board of Directors. At September 30, 2024, the Company owed approximately $ million for dividends that had previously been declared through February 2024 (but whose payment has been suspended), and also had total undeclared dividends of approximately $9.0 million, which represents the accumulated (but undeclared) dividends due to preferred shareholders of record on September 30, 2024. Dividends in arrears that have not been declared by the Board of Directors are not recorded in the condensed consolidated balance sheets but are reflected in the net loss attributable to common shareholders.
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