Redeemable Preferred Stock and Warrants

6 Months Ended

Jun. 30, 2012

Redeemable Preferred Stock and Warrants [Abstract]

Redeemable Preferred Stock and Warrants

Note 9 — Redeemable Preferred Stock and Warrants

Prior to July 1, 2013, the Company may accrue dividends on its Cumulative Redeemable Series A Preferred Stock (the “Series A Preferred Stock”) rather than paying them in cash. Whenever dividends are accrued on a quarterly dividend payment date, the liquidation preference of the Series A Preferred Stock is increased by the amount of the accrued dividends and additional warrants to purchase shares of PostRock common stock and additional shares of Series B Preferred Stock are issued. The Company records the increase in liquidation preference and the issuance of additional warrants by allocating their relative fair values to the amount of accrued dividends. The allocation results in an increase to the Company’s temporary equity related to the Series A Preferred Stock and an increase to additional paid in capital related to the additional warrants issued. The increase to additional paid in capital related to additional warrants issued was $1.5 million during the six months ended June 30, 2012.

The following tables describe the changes in temporary equity, currently consisting of the Series A Preferred Stock (in thousands except share amounts), and in the outstanding warrants:

	Carrying Value of Series A Preferred Stock		Number of Outstanding Series A Preferred Shares		Liquidation Value of Series A Preferred Stock		Number of Outstanding Warrants		Weighted Average Exercise Price of Warrants
December 31, 2011	$	56,736		6,000	$	69,759		21,566,245	$	3.23
Accrued dividends		2,755		—		4,248		2,056,854		2.07
Accretion		972		—		—		—		—
June 30, 2012	$	60,463		6,000	$	74,007		23,623,099	$	3.13