Shareholders' (Deficit) Equity

12 Months Ended

Dec. 31, 2019


11.			Shareholders’ (Deficit) Equity

At December 31, 2019, the Company had authorized for issuance 120,000,000 shares of $0.0001 par value common stock, of which 28,508,977 shares were issued and outstanding, and had authorized for issuance 5,000,000 shares of $0.0001 par value preferred stock, of which 43,950 shares were issued and outstanding, including 860 shares declared as a dividend on November 3, 2019 and issued on January 1, 2020.

Series A Preferred Stock

On June 30, 2014, the Company issued 45,000 shares of Series A Preferred Stock with offering proceeds of $45.0 million and offering costs of $2.5 million. Holders of the Series A Preferred Stock are entitled to cumulative dividends at an 8.0% dividend rate per annum payable quarterly on January 1, April 1, July 1, and October 1 of each year in cash or by delivery of Series A Preferred Stock shares. Holders of the Series A Preferred Stock have the option to convert each share of Series A Preferred Stock into approximately 81.18 shares of the Company’s common stock, subject to certain adjustments in the conversion rate.

The Company paid the following dividends on the Series A Preferred Stock in additional shares of Series A Preferred Stock during the years ended December 31, 2019, 2018 and 2017.


Payment Date	Record Date	Amount Per Share	Total Dividends Paid	Preferred Shares Issued
January 1, 2017	November 15, 2016	$20.00	$900	899
April 1, 2017	February 15, 2017	$20.00	$918	915
July 1, 2017	May 15, 2017	$20.00	$936	931
October 1, 2017	August 15, 2017	$20.00	$955	952
January 1, 2018	November 15, 2017	$20.00	$974	968
April 1, 2018	February 15, 2018	$20.00	$751	748
July 1, 2018	May 15, 2018	$20.00	$766	763
October 1, 2018	August 15, 2018	$20.00	$781	778
January 1, 2019	November 15, 2018	$20.00	$796	794
April 1, 2019	February 15, 2019	$20.00	$812	809
July 1, 2019	May 15, 2019	$20.00	$828	826
October 1, 2019	August 15, 2019	$20.00	$845	843

On November 3, 2019, the Company declared a $20.00 per share dividend on its Series A Preferred Stock to be paid in additional shares of Series A Preferred Stock on January 1, 2020 to holders of record on November 15, 2019. As of December 31, 2019, the Company has recorded the 860 additional Series A Preferred Stock shares declared for the dividend of $0.9 million within preferred stock in the consolidated balance sheets.

Exchange of Preferred Stock for Common Stock of Jason Industries, Inc.

On January 22, 2018, certain holders of the Company’s Series A Preferred Stock exchanged 12,136 shares of Series A Preferred Stock for 1,395,640 shares of the Company’s common stock, a conversion rate of 115 shares of common stock for each share of Series A Preferred Stock. Under the terms of the Series A Preferred Stock agreements, holders of the Series A Preferred Stock have the option to convert each share of Series A Preferred Stock into approximately 81.18 shares of the Company’s common stock, subject to certain adjustments in the conversion rate. The excess of the book value of the Series A Preferred Stock over the par value of the Company’s common stock issued in the exchange was recorded as an increase to additional paid-in capital on the consolidated balance sheets. The fair value of the redemption premium, represented by the excess of the exchange conversion rate over the agreement conversion rate, was recorded as a reduction to net loss available to common shareholders of Jason Industries within the consolidated statements of operations.

Shareholder Rights Agreement

On September 1, 2019, the Company’s Board of Directors adopted a Shareholder Rights Agreement (the “Rights Agreement”) between the Company and Continental Stock Transfer & Trust Company, as rights agent. Pursuant to the Rights Agreement, the Company declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock, payable to the shareholders of record on September 6, 2019. The Rights will also accompany any new shares of common stock issued after September 6, 2019. The Rights trade with and are inseparable from the Company’s common stock and will not be evidenced by separate certificates unless they become exercisable. The Rights will expire on March 1, 2021.

In general terms the Rights Agreement works by imposing a significant penalty upon any person or group which acquires 30% or more of the Company’s outstanding common stock without approval of the Company’s Board of Directors.

Each right will allow its holder to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock for $5.00, subject to adjustment as set forth in the Rights Agreement, once the Rights become exercisable. Per the Rights

Agreement, the Rights will not be exercisable until the earlier of (1) 10 days after the public announcement that a person or group has become an Acquiring Person (as defined in the Rights Agreement) by obtaining beneficial ownership of 30% or more of the Company’s outstanding common stock or (2) 10 business days (or such later date as the Company’s Board of Directors shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person.

Warrants

The Company’s warrants expired on June 30, 2019 and as of December 31, 2019, the Company had no warrants outstanding. Each outstanding warrant entitled the registered holder to purchase one share of the Company’s common stock at a price of $12.00 per share.

Exchange of Common Stock of JPHI Holdings, Inc. for Common Stock of Jason Industries, Inc.

Following the consummation of the June 30, 2014 go public business combination, Jason became an indirect majority-owned subsidiary of the Company, with the Company then owning approximately 83.1% of JPHI Holdings Inc. (“JPHI”) and the rollover participants then owning a noncontrolling interest of approximately 16.9% of JPHI. The rollover participants received 3,485,623 shares of JPHI, which were exchangeable on a one-for-one basis for shares of common stock of the Company.

In 2016, certain rollover participants exchanged 2,401,616 shares of JPHI stock for Company common stock, which decreased the noncontrolling interest to 6.0 percent. In the first quarter of 2017, certain rollover participants exchanged the remaining 1,084,007 shares of JPHI stock for Company common stock, which decreased the noncontrolling interest to 0%, and no shares of JPHI stock remain outstanding as of December 31, 2019. The decreases to the noncontrolling interest as a result of the exchange resulted in an increase in both accumulated other comprehensive loss and additional paid-in capital to reflect the Company’s increased ownership in JPHI.

Accumulated Other Comprehensive Loss

The changes in the components of accumulated other comprehensive loss, net of taxes, were as follows:


	Employee retirement plan adjustments		Foreign currency translation adjustments ⁽¹⁾		Net unrealized gains (losses) on cash flow hedges		Total
Balance at December 31, 2016	$	(1,777)	$	(27,404)	$	(1,191)	$	(30,372)
Other comprehensive income before reclassifications	365		11,394		156		11,915
Amounts reclassified from accumulated other comprehensive loss	8		(888)		1,159		279
Exchange of common stock of JPHI Holdings, Inc. for common stock of Jason Industries, Inc.	(113)		(1,698)		(73)		(1,884)
Balance at December 31, 2017	(1,517)		(18,596)		51		(20,062)
Cumulative impact of accounting changes	(137)		—		11		(126)
Other comprehensive (loss) income before reclassifications	(223)		(4,555)		1,467		(3,311)
Amounts reclassified from accumulated other comprehensive loss	46		—		(118)		(72)
Balance at December 31, 2018	(1,831)		(23,151)		1,411		(23,571)

Other comprehensive loss before reclassifications	(526)		(1,950)		(947)		(3,423)
Amounts reclassified from accumulated other comprehensive loss	125		(1,112)		(662)		(1,649)
Balance at December 31, 2019	$	(2,232)	$	(26,213)	$	(198)	$	(28,643)

(1) Amounts reclassified from accumulated other comprehensive loss and included in loss on divestiture in the consolidated statement of operations for the year ended December 31, 2017 includes the reclassification to earnings of a foreign currency translation gain of $0.9 million from the sale of the European fiber solutions business.

Amounts reclassified from accumulated other comprehensive loss and included in other income - net in the consolidated statement of operations for the year ended December 31, 2019 includes the reclassification to earnings of a foreign currency translation gain of $0.8 million for the wind down and substantial dissolution of certain U.K. entities. Amounts reclassified from accumulated other comprehensive loss and included in net loss (income) from discontinued operations, net of tax for the year ended December 31, 2019 includes the reclassification to earnings of a foreign currency translation gain of $0.3 million from the sale of the North American fiber solutions business.