10. PERPETUAL CUMULATIVE CONVERTIBLE PREFERRED STOCK

As discussed in Note 9, Long-Term Debt, a portion of the proceeds from the debt refinancing that occurred on November 17, 2017 were used to fully redeem the Preferred. As a result of this redemption, the Company: (1) removed the net carrying value of Preferred of $27.5 million from its books, which included accrued dividends through the date of redemption of $0.2 million; and (2) recognized a loss on extinguishment of the Preferred of $0.2 million.

The following table reflects the Preferred shares authorized, issued and outstanding:

In connection with an acquisition on July 16, 2015 as described in Note 3, Business Combinations, the Company issued Preferred that in the event of a liquidation, ranked senior to common stock as to liquidation preference. The Company incurred issuance costs, which were recorded as a reduction of the Preferred.

The payment of the liquidation preference of the Preferred took preference over any liquidation payments to the Company’s common shareholders. The Preferred was convertible by the holder into a fixed number of 1.9 million shares, subject to customary anti-dilution provisions, after a three-year waiting period. At certain times (including during the first three years after issuance), the Preferred was redeemable in cash at a price of 100%.

The initial dividend rate on the Preferred was 6% and increased over time to 12%. Due to the legal obligation to pay cumulative dividends as a liquidation preference, the dividends were accrued as they were earned instead of when they were declared.

The Company reflected the Preferred as mezzanine due to a change in control contingency provision that provided the holder with a redeemable feature. For accounting purposes, the Preferred was not considered mandatorily redeemable at the holder’s option until the contingency was met.