Convertible Preferred Stock, Net

12 Months Ended

Dec. 31, 2019

Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]

The Company completed a rights offering on February 5, 2015 (the “Rights Offering”) providing all of the Company’s existing common stockholders the non-transferrable right to purchase their pro rata share of $65,500 of convertible preferred stock at a price equal to $100.00 per share (“Preferred Stock”). The Preferred Stock is convertible into shares of Providence’s common stock, $0.001 par value per share (“Common Stock”) at a conversion price equal to $39.88 per share, which was the closing price of the Company’s Common Stock on NASDAQ on October 22, 2014.

Stockholders exercised subscription rights to purchase 130,884 shares of the Company’s Preferred Stock. Pursuant to the terms and conditions of the Standby Purchase Agreement (the “Standby Purchase Agreement”) between Coliseum Capital Partners, L.P., Coliseum Capital Partners II, L.P., Blackwell Partners, LLC - Series A and Coliseum Capital Co-Invest, L.P. (collectively, the “Coliseum Stockholders”) and the Company, the remaining 524,116 shares of the Company’s Preferred Stock were purchased by the Coliseum Stockholders at the $100.00 per share subscription price. The Company received $65,500 in aggregate gross proceeds from the consummation of the Rights Offering and Standby Purchase Agreement. Additionally, on March 12, 2015, the Coliseum Stockholders exercised their right to purchase an additional 150,000 shares of the Company’s Preferred Stock, at a purchase price of $105.00 per share or a total purchase price of $15,750, of the same series and having the same conversion price as the Preferred Stock sold in the Rights Offering.

The Company may pay a noncumulative cash dividend on each share of Preferred Stock, if and when declared by a committee of its Board of Directors (“Board”), at the rate of five and one-half percent (5.5%) per annum on the liquidation preference then in effect. On or before the third business day immediately preceding each fiscal quarter, the Company must determine its intention whether or not to pay a cash dividend with respect to that ensuing quarter and will give notice of its intention to each holder of Preferred Stock as soon as practicable thereafter.

In the event the Company does not declare and pay a cash dividend, the Company will declare a payment-in-kind (“PIK”) dividend by increasing the liquidation preference of the convertible Preferred Stock to an amount equal to the liquidation preference in effect at the start of the applicable dividend period, plus an amount equal to the liquidation preference then in effect multiplied by eight and one-half percent (8.5%) per annum, computed on the basis of a 365-day year and the actual number of days elapsed from the start of the applicable dividend period to the applicable date of determination.

All holders of the Company’s Preferred Stock are able to convert their Preferred Stock into shares of Common Stock at a rate of approximately 2.51 shares of Common Stock for each share of Preferred Stock. As of December 31, 2019, a total of 6,212 shares of Preferred Stock were converted into 15,568 shares of Common Stock.

Cash dividends are payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, and commenced on April 1, 2015, and, if declared, begin to accrue on the first day of the applicable dividend period. PIK dividends, if applicable, accrue cumulatively on the same schedule as set forth above for cash dividends and are also compounded at the applicable annual rate on each applicable subsequent dividend date. Cash dividends on redeemable convertible preferred stock totaling $4,403, or $5.50 per share, $4,413, or $5.50 per share, and $4,418, or $5.50 per share, were distributed to convertible preferred stockholders for the years ended December 31, 2019, 2018 and 2017, respectively.

At the written election by holders of a majority in voting power of the outstanding shares of Preferred Stock, taken together and voting as a separate class but not as a separate series, upon the occurrence of a change of control that would, subject to certain exceptions, result in any person (other than the Coliseum Stockholders or any of their respective affiliates or a person acting as a group with Coliseum Stockholders or any of their respective affiliates) beneficially owning, directly or indirectly shares of the Company’s capital stock entitling such person to exercise 50% or more of the total voting power of all classes of voting stock of the Company (but solely in connection with a transaction that is a third-party tender offer that is publicly disclosed and approved (or recommended to the stockholders of the Company), all outstanding shares of Preferred

Stock automatically will be converted into a number of shares of Common Stock equal to the product obtained by multiplying the conversion rate then in effect by the number of shares of convertible preferred stock being converted, plus cash in lieu of fractional shares. Prior to the conversion of shares of convertible preferred stock in the event of a change of control as described in the preceding sentence, the Board will declare and the Company will pay a special cash dividend on each share of Preferred Stock in the amount of the liquidation preference per share then in effect.

The Preferred Stock is accounted for outside of stockholders’ equity as it may be redeemed upon certain change in control events that are not solely in the control of the Company. Dividends are recorded in stockholders’ equity and consist of the 5.5%/8.5% dividend. Certain other provisions apply in certain change in control events.

The following table summarizes the Preferred Stock activity for the years ended December 31, 2019 and 2018:


	Dollar Value		Share Count
Balance at December 31, 2017	$	77,546	803,200
Conversion to common stock	(161)		(1,594)
Allocation of issuance costs	7		—
Balance at December 31, 2018	$	77,392	801,606
Conversion to common stock	(284)		(2,818)
Allocation of issuance costs	12		—
Balance at December 31, 2019	$	77,120	798,788

As of December 31, 2019 and 2018, the outstanding shares of Preferred Stock were convertible into 2,002,979 and 2,010,045 shares of Common Stock, respectively.