2.4.0.81170 - Disclosure - Subsequent Eventstruefalsefalse1false falsefalseD2014Q1http://www.sec.gov/CIK0001477032duration2013-04-01T00:00:002013-06-30T00:00:001true 1us-gaap_SubsequentEventsAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Subsequent Events2false 2us-gaap_SubsequentEventsTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div style="font-size:10.0pt;font-family:Times New Roman;"> Note 17 — Subsequent Events   Very Hungry Notes Conversion   On July 10, 2013 we entered into a note exchange and subscription agreement with Very Hungry and the Scott Reiman 1991 Trust, whereby they exchanged their $5.5 million unsecured, subordinated promissory notes issued on May 2, 2013 for 5.5 million shares of a newly created senior mandatorily convertible preferred stock. The preferred stock will convert into the same units issued in our June 2013 public offering at a conversion price equal to the public offering price of $0.12 per share upon shareholder approval of the conversion and of a proposed reverse stock split of up to 50-for-one, which will be voted upon at our annual meeting of stockholders expected to be held in late August 2013. Absent obtaining stockholder approval, the preferred stock will begin to accrue dividends of 20% per annum starting December 15, 2013, increasing to 25% on June 15, 2014 and again to 30% on December 31, 2014. The preferred stock limits the voting power of all common stock and preferred stock held by the preferred stock holders to 19.99% of the outstanding voting power.   Buffalo Settlement   In connection with restructuring the Karlsson senior debt (as described more fully below), we were required to increase Karlsson’s royalty interest from 1% to 2% without increasing the aggregate amount of royalty interests payable to third parties in the aggregate. In order to achieve this result, we negotiated with Buffalo to reduce our revenue interest to Buffalo from 2% to 1%. On August 14, 2013 we compensated Buffalo for this revenue interest reduction by issuing Buffalo 15.0 million shares of our newly created redeemable preferred stock and five year warrants to purchase 50,264,174 shares of our common stock at $0.144 per share.   Redeemable Preferred Stock   The redeemable preferred stock is non-voting and non-convertible and has a $1.00 liquidation preference.  In the event of a liquidity event the holders of the outstanding redeemable preferred stock shall be entitled to receive the liquidity preference plus all accrued and unpaid dividends prior to any distribution to the holders of common stock, subject to a cap of 10% of our market capitalization at the time of redemption..  A liquidity event is defined as (i) liquidation, dissolution, or winding of Prospect, (ii) a person or group other than Buffalo Management and its affiliates becomes the direct or indirect owner of our common equity representing more than 50% of the voting power of the outstanding shares of voting stock, (iii) any consolidation or merger of Prospect or similar transaction or any sale, lease or other transfer of all or substantially all of our consolidated assets, with, into or to any person other than one of our subsidiaries or Buffalo Management or its affiliates, other than a transaction in which the persons that owned, directly or indirectly, voting shares of Prospect immediately prior to such transaction owning voting shares representing a majority of the continuing or surviving person immediately after the transaction, or (iv) our board no longer consists of a majority of members who were members of the board as of the filing of the certificate of designation creating the preferred stock or were nominated for election or appointed to the board with the approval of a majority of such directors or directors so nominated or appointed; provided that clauses (ii)-(iv) shall not constitute a liquidity event if waived by the holders of a majority of the shares of redeemable preferred stock.   Dividends commence accruing on the redeemable preferred stock from the issue date and continue to accrue, whether or not declared, at an annual rate on the liquidation preference equal to 8%.  All accrued and unpaid dividends shall be payable on the date that is six months following the first day of the month following the month in which a minimum of 50,000 tonnes of potash has first been shipped for delivery from our potash facility in Holbrook, Arizona.  Dividends shall be payable thereafter quarterly in arrears on March 15, June 15, September 15 and December 15 of each year.   We may redeem the redeemable preferred stock, in whole or in part, at any time following the three year anniversary of issuance.  The holders of the redeemable preferred stock may redeem their shares, in whole or in part, at any time following the three and a half year anniversary of the first day of the month following the month in which a minimum of 50,000 tonnes of potash has first been shipped for delivery from our potash facility in Holbrook, Arizona.  In either case, the redemption will be made by cash payment in a per share amount equal to the liquidation value per share plus all accrued and unpaid dividends through the date of redemption; provided, that the redemption payment may not exceed 10% of our market capitalization value at the time of redemption.   Warrants   The warrants are exercisable commencing on the date that we complete a reverse stock split of our common stock and ending on August 13, 2018.  They may be exercised in whole or in part, for cash or on a “cashless” basis.  The warrants have the same full ratchet anti-dilution price protection contained in the five-year warrants issued in our June 2013 public offering, subject to a floor of $0.07 per share.  The warrants provide that no holder of warrants may hold, together with other shares held by such holder, more than 19.99% of the total voting power of the outstanding common stock on August 14, 2013 (115,194,415 shares).   Amendment to Existing Warrants   In connection with the issuance of the preferred stock and warrants Buffalo agreed to modify all of the warrants to purchase our common stock held by Buffalo so that no holder of those warrants may hold, together with other shares held by such holder, more than 19.99% of the total voting power of the outstanding common stock on August 14, 2013 (115,194,415 shares).   </div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.No definition available.false0Subsequent EventsfalseSubsequent EventsUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.prospectgri.com/role/DisclosureSubsequentEvents12