Note 11. Stockholders’ Equity (Deficit) and Redeemable Convertible Preferred Stock

On May 3, 2017, the Company completed the initial public offering of its common stock and the Company’s stock began trading on the New York Stock Exchange under the symbol “EEX”.

On June 10, 2020, the Company entered into an investment agreement (the “Investment Agreement”) with Onex Partners V LP (“Onex”), pursuant to which the Company agreed to (i) issue to an affiliate of Onex, in a private placement transaction (the “Initial Private Placement”), 47,058,332 shares of redeemable convertible preferred stock for a purchase price of $5.60 per share and (ii) effect a rights offering (“Rights Offering”) to holders of its outstanding common stock of one non-transferable subscription right for each share of the Company’s common stock held, with each right entitling the holder to purchase one share of redeemable convertible preferred stock at the Series A Price per share. Onex agreed to purchase (the “Onex Backstop”) any and all redeemable convertible preferred stock not subscribed for in the Rights Offering by stockholders other than affiliates of Onex at the Series A Price per share. As a result of the Initial Private Placement and the Onex Backstop, the Company sold 69,718,919 shares of redeemable convertible preferred stock to Onex in exchange for $373.3 million, net of fees and expenses of $17.2 million. As a result of the Rights Offering, the Company issued 1,727,427 shares of redeemable convertible preferred stock in exchange for $9.7 million.

On April 18, 2024, the Company announced it had delivered a notice informing holders of its redeemable convertible preferred stock that it had exercised its right to mandate that all shares of the redeemable convertible preferred stock be converted to shares of the Company’s common stock. The notice was triggered by the fact that the closing share price of the Company’s common stock on the NYSE had exceeded 175% of the conversion price for a period of 20 consecutive trading days ending with April 17, 2024. On May 2, 2024 (the “Conversion Date”), each holder of redeemable convertible preferred stock received approximately 1.9717 shares of common stock for each share of redeemable convertible preferred stock held as of the Conversion Date, in accordance with the terms of the conversion feature as described in more detail below. As a result, 71,402,607 shares of redeemable convertible preferred stock were converted into 140,781,525 shares of common stock on the Conversion Date. Cash was paid in lieu of fractional shares of common stock. Following the Conversion Date, no redeemable convertible preferred stock was outstanding, and all rights of the former holders of the redeemable convertible preferred stock were terminated.

Upon liquidation or dissolution of the Company, the holders of redeemable convertible preferred stock were entitled to receive the greater of (a) the accreted liquidation preference, and (b) the amount the holders of redeemable convertible preferred stock would have received if they had converted their redeemable convertible preferred stock into common stock immediately prior to such liquidation or dissolution.

Each share of redeemable convertible preferred stock accumulated dividends at a rate per annum equal to 7% of the accreted liquidation preference, compounding quarterly, by adding to the accreted liquidation preference until July 1, 2023, and thereafter, at the Company’s option, paid either in cash or by adding to the accreted liquidation preference.

During the year ended December 31, 2023, the Company recorded accretion of $16.7 million with respect to the redeemable convertible preferred stock, bringing the aggregate liquidation preference to $492.6 million as of December 31, 2023. Holders of redeemable convertible preferred stock were also entitled to participate in and receive any dividends declared or paid on the Company’s common stock on an as-converted basis, and no dividends could have been paid to holders of common stock unless the aggregate accreted liquidation preference on the redeemable convertible preferred stock had been paid or holders of a majority of the outstanding redeemable convertible preferred stock had consented to such dividends.

The Company’s Board of Directors (the “Board of Directors” or the “Board”) approved the payment in cash of a dividend on the Company’s redeemable convertible preferred stock (the “Preferred Stock” and such dividend, the “Preferred Cash Dividend”) for each of the periods ending March 31, 2024, December 31, 2023 and September 30, 2023, respectively, and the Company paid Preferred Stock Cash Dividends for a total of $8.6 million, or $0.12 per share, in each such period. Of this amount, approximately $8.4 million in the aggregate was paid to Onex-related entities in each such period. As a result of the mandatory conversion on May 2, 2024, the dividends that accrued in the period since the March 31, 2024 Preferred Stock Cash Dividend were settled in stock as a result of the mandatory conversion on May 2, 2024.

There were no cash dividends on preferred stock declared or paid for the year ended December 31, 2022. The following is a summary of the preferred stock dividends paid for the years ended December 31, 2024 and 2023:


	2024
	Q1		Q2		Q3		Q4
	(dollars in millions, except per share values)
Dividend declared on	March 12, 2024			—		—		—
Stockholders of record on	March 26, 2024			—		—		—
Dividend paid on	March 28, 2024			—		—		—
Dividend per share	$	0.1200	$	—	$	—	$	—
Cash dividend paid	$	8.6	$	—	$	—	$	—

	2023
	Q1		Q2		Q3		Q4
	(dollars in millions, except per share values)
Dividend declared on		—		—	August 1, 2023		November 3, 2023
Stockholders of record on		—		—	August 1, 2023		November 3, 2023
Dividend paid on		—		—	September 29, 2023		December 28, 2023
Dividend per share	$	—	$	—	$	0.1200	$	0.1200
Cash dividend paid	$	—	$	—	$	8.6	$	8.6

Shares of the redeemable convertible preferred stock were subject to conversion at the option of the holder into a number of shares of common stock equal to (a) the amount of the accreted liquidation preference, divided by (b) the applicable conversion price. Each share of redeemable convertible preferred stock had an initial liquidation preference of $5.60 and were initially convertible into approximately 1.59 shares of common stock, which is equivalent to the initial liquidation preference per share of $5.60 divided by the initial conversion price of $3.52 per share. The conversion price was subject to customary anti-dilution adjustments upon the occurrence of certain events, including downward adjustment in the event the Company issued securities, subject to exceptions, at a price that was lower than the fair market value of such securities.

The Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock on or after June 29, 2026 for a cash purchase price equal to (a) on or after the six-year anniversary of the First Closing Date, 105% of the accreted liquidation preference, (b) on or after the seven-year anniversary of the First Closing Date, 103% of the accreted liquidation preference or (c) on or after the eight-year anniversary of the First Closing Date, the accreted liquidation preference. In addition, if there was a change of control transaction involving the Company prior to the six-year anniversary of the First Closing Date, the Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock for a cash purchase price equal to the accreted liquidation preference plus the net present value of the additional amount by which the accreted liquidation preference would have otherwise increased from the date of such redemption through the sixth anniversary of the First Closing Date. If, after the Company ceased to have a controlling stockholder group, there was a change of control transaction involving the Company, holders of redeemable convertible preferred stock could elect to (x) convert their redeemable convertible preferred stock into shares of common stock at the then-current conversion price or (y) require the Company to redeem the redeemable convertible preferred stock for cash, at a price per share equal to the then-unpaid accreted liquidation preference. Although only Unaffiliated Directors (as defined below) could have been involved in any decisions with respect to the Company’s rights to exercise the redemption features, the holders of the redeemable convertible preferred stock controlled the majority of the votes through representation on the board of directors. Therefore, the redeemable convertible preferred stock was required to be accreted to its redemption price on the date the redemption option first became exercisable. For the fiscal years ending December 31, 2024 and 2023, the Company recorded $12.7 million and $42.0 million, respectively, in deemed dividends, representing the accretion of the redeemable convertible preferred stock to the redemption value.

Certain matters would have required the approval of holders of a majority of the redeemable convertible preferred stock, including (i) amendments to the Company’s organizational documents in a manner adverse to the redeemable convertible preferred stock, (ii) the creation or issuance of senior or parity equity securities or (iii) the issuance of any convertible indebtedness, other class of redeemable convertible preferred stock or other equity securities in each case with rights to payments or distributions in which the redeemable convertible preferred stock would not participate on a pro-rata, as-converted basis.

In addition, for so long as the redeemable convertible preferred stock represented more than 30% of the outstanding common stock on an as-converted basis, without the approval of a majority of the directors elected by the holders of the redeemable convertible preferred stock, the Company could not (i) incur new indebtedness to the extent certain financial metrics are not satisfied, (ii) redeem or repurchase any equity securities junior to the redeemable convertible preferred stock, (iii) enter into any agreement for the acquisition or disposition of assets or businesses involving a purchase price in excess of $100 million, (iv) hire or terminate the chief executive officer of the Company or (v) make a voluntary filing for bankruptcy or commence a dissolution of the Company.

For so long as the redeemable convertible preferred stock represented a minimum percentage of the outstanding shares of common stock on an as-converted basis as set forth in the Certificate of Designations relating to the redeemable convertible preferred stock, the holders of the redeemable convertible preferred stock had the right to appoint up to five members of the Company’s Board of Directors.

All decisions of the Company’s Board with respect to the exercise or waiver of the Company’s rights relating to the redeemable convertible preferred stock were determined by a majority of the Company’s directors that are not employees of the Company or affiliated with Onex (“Unaffiliated Directors”), or a committee of Unaffiliated Directors.

As part of the transactions contemplated by the Investment Agreement, the Company and Onex entered into a Registration Rights Agreement whereby Onex is entitled to certain demand and piggyback registration rights in respect of the redeemable convertible preferred stock and the shares of common stock issuable upon conversion thereof.

There were no dividends paid or declared with respect to the Company’s common stock for the years ended December 31, 2023 and 2022. The following is a summary of the common stock dividends paid for the year ended December 31, 2024:


	2024
	Q1		Q2		Q3		Q4
	(dollars in millions, except per share values)
Dividend declared on		—		—	August 6, 2024		October 29, 2024
Stockholders of record on		—		—	August 19, 2024		November 11, 2024
Dividend paid on		—		—	August 28, 2024		November 19, 2024
Dividend per share	$	—	$	—	$	0.0150	$	0.0150
Cash dividend paid	$	—	$	—	$	3.1	$	3.0

October 2024 Share Repurchase Program Extension and Expansion (“October 2024 Share Repurchase Program”)

On October 29, 2024, the Company’s Board approved an extension and expansion of its share repurchase program, which allows for the repurchase of $25.0 million of the Company’s common stock through December 31, 2025, subject to early termination or extension by the Board. The Company repurchased 1,536,769 shares for $7.3 million during the year ended December 31, 2024 under this extension and expansion. There was $17.6 million remaining available for share repurchases under the October 2024 Share Repurchase Program as of December 31, 2024. The share repurchase program may be suspended or discontinued at any time without notice.

November 2023 Share Repurchase Program Extension and Expansion (“November 2023 Share Repurchase Program”)

In November 2023, the Company’s Board approved an extension and expansion of its share repurchase program, which allows for the repurchase of $25.0 million of the Company’s common stock through December 31, 2024, subject to early termination or extension by the Board. The Company repurchased 1,278,704 shares for $6.5 million during the year ended December 31, 2024 under this repurchase program. The Company did not repurchase any shares during the year ended December 31, 2023 under this extension and expansion; however, the Company repurchased 5,064,140 shares for $16.9 million during the year ended December 31, 2023 under the October 2022 Share Repurchase Program described below.

October 2022 Share Repurchase Program Extension and Expansion (“October 2022 Share Repurchase Program”)

On October 26, 2022, the Company’s Board approved an extension and expansion of its share repurchase program, which allows for the repurchase of $20.0 million of the Company’s common stock through December 31, 2023, subject to early termination or extension by the Board. As described above, the Company repurchased 5,064,140 shares for $16.9 million during the year ended December 31, 2023 under this repurchase program. The Company settled the repurchase of 21,393 shares for $0.1 million during the year ended December 31, 2022 under this repurchase program, and a further 2,861,448 shares for $10.3 million pursuant to the October 2020 Share Repurchase Program, during the year ended December 31, 2022.

In October 2020, the Company’s Board authorized and approved a $20.0 million share repurchase program. In October 2021, the Company’s Board approved the extension and expansion of the October 2020 Share Repurchase Program, which allowed for the repurchase of an additional $20.0 million of the Company’s common stock through December 31, 2022. The Company repurchased 2,861,448 shares for $10.3 million during the year ended December 31, 2022 under this repurchase program, as described above.