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Equity
 3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Equity

Note 12—Equity 

 

Dividend Payments

 

The following table summarizes the quarterly dividends declared by the Company during the three months ended March 31, 2023 (in thousands, except per share amounts):

 

Declaration Date

 

Dividend Per Share

 

 

Aggregate Dividend Amount

 

 

Record Date

 

Payment Date

 

 

 

 

 

 






 

Series 2012-A Preferred Stock ("Preferred Stock")

January 12, 2023

 

$

0.1594

 

 

$

157 

 

 

February 7, 2023

 

February 15, 2023











Class A Common Stock and Class B Common Stock








February 9, 2023
$ 0.0750

$ 1,951

February 21, 2023
March 1, 2023

 

In the year ended December 31, 2022, the Company accrued Additional Dividends of $0.5301 per share on its Preferred Stock, equal to $0.5 million in the aggregate in respect of the GRE results of operations through December 31, 2022, which the Company expects to pay in May 2023.


On April 17, 2023, the Company’s Board of Directors declared aggregate dividends of $0.6895 per share on its the Preferred Stock, consisting of a quarterly Base Dividend of $0.1594 per share for the first quarter of 2023, and Additional Dividends of $0.5301 per share in respect of the GRE results of operations during the year ended December 31, 2022 as discussed above. The dividend will be paid on or about May 15, 2023 to stockholders of record as of the close of business May 5, 2023 and to the holders of Preferred Stock that was redeemed by the Company in the three months ended March 31, 2023.  


On May 3, 2023, the Company’s Board of Directors declared a quarterly dividend of $0.0750 per share on its Class A common stock and Class B common stock for the first quarter of 2023. The dividend will be paid on or about May 31, 2023 to stockholders of record as of the close of business on May 20, 2023.


The Delaware General Corporation Law allows companies to declare dividends out of “Surplus,” which is calculated by deducting the par value of the company’s stock from the difference between total assets and total liabilities. The Company has elected to record dividends declared against accumulated deficit.


Stock Repurchases and Redemption; Treasury Shares

 

On March 11, 2013, the Board of Directors of the Company approved a program for the repurchase of up to an aggregate of 7.0 million shares of the Company’s Class B common stock. There were no purchases under this program in the three months ended March 31, 2023 or 2022. At March 31, 2023, 4.7 million shares of Class B common stock remained available for repurchase under the stock repurchase program.


As of March 31, 2023 and December 31, 2022, there were 2.7 million outstanding shares of Class B common stock held in the Company's treasury, respectively, with a cost of  $19,175 million and $19.0 million, respectively, at a weighted average cost per share of $7.05.and $7.03, respectively.


On February 7, 2022, the Board of Directors of the Company authorized a program to redeem up to $1.0 million per quarter of the Company's Preferred Stock at the liquidation preference of $8.50 per share beginning in the second quarter of 2022. In the three months ended March 31, 2023, the Company redeemed 117,647 Preferred Stock under this program for an aggregate amount of $1.0 million. There was no redemption under this program in the three months ended March 31, 2022.


On April 17, 2023, the Company's Board of Directors approved the redemption of 117,647 shares of outstanding Preferred Stock on May 15, 2023 (the "Redemption Date") at a price of $8.50 per share equivalent to approximately $1.0 million in the aggregate, together with an amount equal to all dividends accrued and unpaid up to, but not including, the Redemption Date.


On May 3, 2022, the Board of Directors authorized the redemption of $2.0 million of the Company's Preferred Stock during the second quarter of 2022, which the Company redeemed on June 13, 2022.


Warrants to Purchase Class B Common Stock

 

On June 8, 2018, the Company sold to Howard S. Jonas, the Chairman of the Company’s Board of Directors and then the holder of the controlling portion of the Company's common stock, shares of the Company’s Class B common stock and warrants to purchase an additional 1,048,218 shares of the Company’s Class B common stock at an exercise price of $4.77 per share for an aggregate exercise price of $5.0 million. The warrants will expire in June 2023. In addition, on June 12, 2018, the Company sold to a third-party investor treasury shares of the Company’s Class B common stock for an aggregate sales price of $1.0 million and warrants to purchase an additional 209,644 shares of the Company’s Class B common stock at an exercise price of $4.77 per share, for an aggregate exercise price of $1.0 million.


In May 2022, a holder of warrants exercised warrants to purchase 209,644 shares of Class B common stock warrants through a cashless exercise and the Company issued 72,657 common shares with the remaining 136,987 warrants being cancelled in payment of the exercise price.


As of March 31, 2023, there were outstanding warrants to purchase 1,048,218 shares of the Company’s Class B common stock at $4.77 per share, all of which will expire in June 2023.


Purchase of Equity of Subsidiaries 

 

In November 2022, the Company purchased from a certain employee 5.1% and 2.3% interests in Lumo Finland and Lumo Sweden, respectively, by issuing 123,302 shares of the Company's Class B restricted common stock, which will ratably vest on a bi-annual basis between May 2023 and up to May 2025.


Stock-Based Compensation 

 

The Company’s 2011 Stock Option and Incentive Plan (as amended, the "2011 Plan") is intended to provide incentives to executives, employees, directors and consultants of the Company. Incentives available under the Plan include stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. The 2011 Plan expired in 2021 and no new grants are to be issued thereunder, however, outstanding grants are not impacted by the expiration of the plan.


On March 8, 2021, the Board of Directors adopted the Company 2021 Stock Option and Incentive Plan (the "2021 Plan"), subject to the approval of the Company's stockholders. In May 2021, the 2021 Plan became effective and replaced the 2011 Plan. Similar to the 2011 Plan, the 2021 Plan provides incentives to executives, employees, directors and consultants of the Company. Incentives available under the 2021 Plan include stock options, stock appreciation rights, limited stock appreciation rights, deferred stock units, and restricted stock. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. The maximum number of shares reserved for the grant of awards under the 2021 Plan is 1.0 million shares of Class B Common Stock.


In February 2022, the Company granted certain employees and members of its Board of Directors an aggregate of 290,000 deferred stock units which will vest in two tranches contingent upon the achievement of a specified thirty-day average closing price of the Company's Class B common stock within a specified period of time (the "2022 market conditions") and the satisfaction of service-based vesting conditions. Each deferred stock unit entitles the recipient to receive, upon vesting, up to two shares of Class B common stock of the Company depending on market conditions. The Company used a Monte Carlo simulation model to estimate the grant-date fair value of the awards. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility based on a combination of the Company’s historical stock volatility. In the second quarter of 2022, the 2022 market conditions were partially achieved and the Company issued 290,000 shares of its restricted Class B common stock. In February 2023, the remaining portion of the 2022 market conditions was achieved and, subject to amending the Company's 2021 Stock Option and Incentive Plan to reserve additional shares for issuance thereunder, the Company will issue an additional 290,000 restricted shares of its Class B common stock. The restricted shares to be issued will be subject to service-based vesting conditions as described above.


As of March 31, 2023, there were approximately $2.9 million of total unrecognized stock-based compensation costs related to outstanding and unvested equity-based grants. These costs are expected to be recognized over a weighted-average period of approximately 1.2 years.