Stockholders’ Equity

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders’ Equity

Stockholders’ Equity

Series A Preferred Stock Dividends

Holders of Series A-1 Preferred Stock are entitled to cumulative dividends payable quarterly initially at a rate of 9% per annum (the “Dividend Rate”) in cash and, for any twelve quarters (“PIK Quarters”), at the Company’s option, (i) in the form of additional shares of the respective series of Series A-1 Preferred Stock at a per share price equal to $975 or (ii) by increasing Stated Value, in lieu of cash (collectively, the “PIK Option”). After the twelve PIK Quarters (the last of which was the second quarter of 2020), if the Company fails to fully declare and pay dividends in cash, then the Dividend Rate for Series A Preferred Stock will automatically increase by 5% per annum for the next succeeding dividend period and then an additional 1% for each successive dividend period, up to a maximum Dividend Rate of 20% per annum, until the Company pays dividends at such increased rate fully in cash for two consecutive quarters.

Starting with the third quarter of 2017 and through the fourth quarter of 2019, the Company elected the PIK Option for the Class A-1 Preferred Stock dividend payment, which resulted in the issuance of 20,328 additional shares of Series A-1 Preferred Stock. During the first and second quarter of 2020, the Company also elected the PIK Option, which resulted in the issuance of 4,565 additional shares of Series A-1 Preferred Stock.

The Company did not declare a cash dividend for the third quarter of 2020. An amount of $3.7 million, which includes, in addition to the initial quarterly rate of 9% per annum, another 5% due to the failure to declare dividends after the twelve PIK quarters, is included on the condensed consolidated statement of loss for the three and nine months ended September 30, 2020 for undeclared cumulative preferred stock dividends.