Quarterly report pursuant to Section 13 or 15(d)

EQUITY AND EARNINGS PER SHARE

v3.22.2.2
EQUITY AND EARNINGS PER SHARE
 3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
EQUITY AND EARNINGS PER SHARE EQUITY AND EARNINGS PER SHARE
 
Earnings per Share

The Company is required to present both basic and diluted earnings per share (“EPS”). The following table shows the amounts used in computing basic and diluted EPS:
Three Months Ended March 31,
2022 2021
Numerator for basic and diluted earnings per share:
   Loss from continuing operations after preferred dividends $ (20,361) $ (12,299)
   Loss Applicable to Common Stockholders $ (20,361) $ (12,299)
Denominator:
Denominator for basic earnings per share - weighted average shares 92,254,084  82,558,881 
Effect of dilutive securities
  Options —  — 
  RSUs —  — 
Denominator for diluted earnings per share - adjusted weighted average shares 92,254,084  82,558,881 
Basic earnings per share:
Loss from continuing operations per share of common stock after preferred dividends $ (0.22) $ (0.15)
Loss Applicable to Common Stock, per share $ (0.22) $ (0.15)
Diluted earnings per share:
Loss from continuing operations per share of common stock after preferred dividends $ (0.22) $ (0.15)
Loss Applicable to Common Stock, per share $ (0.22) $ (0.15)
Basic EPS is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted EPS is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding plus the additional dilutive effect of dilutive securities during each period. The Company’s dilutive securities are its options and RSUs. During the three months ended March 31, 2022 and 2021, based on the treasury stock method, the Company had 50,724 and 881,911 potentially dilutive securities, respectively, which were excluded due to the Company's loss position. Net loss applicable to common stockholders is equal to net loss less preferred dividends.
Stock Options

The following is a summary of the changes in the Company’s outstanding options for the three months ended March 31, 2022:
Number of Options Weighted Average Strike Price Weighted Average Life Remaining (in years)
Balance at December 31, 2021 3,582,548  $ 3.17 
Balance at March 31, 2022 3,582,548  $ 3.17  1.4
Exercisable at March 31, 2022 3,006,044  $ 3.08  1.3

As of March 31, 2022, the Company’s outstanding options were summarized as follows:
Number of Options
Held by a former Manager 3,006,044 
Granted to the former Manager and subsequently transferred to certain Manager’s employees (A) 576,504 
Total 3,582,548 

(A)The Company and a former manager (the "Manager") agreed that options held by certain employees formerly employed by that Manager will not terminate or be forfeited as a result of the Termination and Cooperation Agreement, and the vesting of such options will relate to the relevant holder’s employment with the Company and its affiliates following January 1, 2018. In both February 2017 and April 2018, the former Manager issued 1,152,495 options to certain employees formerly employed by the Manager as part of their compensation. The options fully vest and are exercisable one year prior to the option expiration date, beginning March 2020 through January 2024.

Stock-based compensation expense is recognized on a straight-line basis through the vesting date of the options. Stock-based compensation expense related to the employee options was $0.1 million during the three months ended March 31, 2022, and $0.2 million during the three months ended March 31, 2021, and is recorded in general and administrative expense on the Consolidated Statements of Operations. During the three months ended March 31, 2022, the Company reversed $0.6 million in stock compensation expense related to certain previously issued options. The unrecognized stock-based compensation expense related to the unvested options was $0.3 million as of March 31, 2022 and will be expensed over a weighted average of 0.9 years.

Restricted Stock Units (RSUs)

The following is a summary of the changes in the Company’s RSUs for the three months ended March 31, 2022.
Number of RSUs Weighted Average Grant Date Fair Value (per unit)
Balance at December 31, 2021 193,190  $ 2.2 
Vested (1,431) $ 4.66 
Forfeited (A) (8,047) $ 4.66 
Balance at March 31, 2022 183,712  $ 2.07 
(A) Unvested RSUs are forfeited by non-employee directors upon their departure from the board of directors and generally forfeited by employees upon their termination.

The Company grants RSUs to the non-employee directors as part of their annual compensation. The RSUs are subject to a one-year vesting period. During the three months ended March 31, 2022, the Company granted no RSUs to non-employee directors and 87,757 RSUs granted to non-employee directors vested. The Company also grants RSUs to employees as part of their annual compensation. The RSUs vest in equal annual installments on each of the first three anniversaries of the grant date.
During the three months ended March 31, 2022, the Company did not grant RSUs to employees and 1,431 RSUs granted to employees vested. Stock-based compensation expense is recognized on a straight-line basis through the vesting date of the RSUs. Stock-based compensation expense related to RSUs was $0.1 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. Stock-based compensation expense is recorded in general and administrative expense on the Consolidated Statements of Operations. During the three months ended March 31, 2022, the Company reversed $0.3 million in stock compensation expense related to certain previosuly issued RSUs. The unrecognized stock-based compensation expense related to the unvested RSUs was $0.2 million as of March 31, 2022 and will be expensed over a weighted average period of 0.3 years.

Preferred Stock

Dividends totaling $1.4 million were paid on January 31, 2022 to holders of record of preferred stock on January 1, 2022, in an amount equal to $0.609375, $0.503125 and $0.523438 per share on the 9.750% Series B, 8.050% Series C and 8.375% Series D preferred stock, respectively

On March 2, 2022, the Board of Directors of the Company declared dividends on the Company’s preferred stock for the period beginning February 1, 2022 and ending April 30, 2022. The dividends are payable on May 2, 2022, to holders of record of preferred stock on April 1, 2022, in an amount equal to $0.609375, $0.503125 and $0.523438 per share on the 9.750% Series B, 8.050% Series C and 8.375% Series D preferred stock, respectively. As of March 31, 2022, $5.6 million of dividends on the Company's cumulative preferred stock were unpaid and in arrears.

Noncontrolling Interest

On July 12, 2021, the Company entered into an investment agreement among the Company and Symphony Ventures, which we refer to as Symphony, a company organized under the laws of Ireland, in which the Company agreed to sell to Symphony 10% of the partnership interests in each of the wholly owned subsidiary limited partnerships, which we refer to as “SLPs”, formed by the Company to hold each of the Company’s Puttery venues, in exchange for an amount in cash equal to 10% of the total cost to build the Puttery venue owned by such SLP. Symphony’s purchase price in each such SLP will be fully committed on the date the certificate of occupancy for the Puttery venue is received, up to a total commitment of $10 million. We control through a wholly owned subsidiary all general partnership interests and 90% of the limited partnership interests in the SLP, thus retaining all rights, powers and authority that govern the partnership and, as a result, we consolidate the financial results of this SLP, and report the noncontrolling interest representing the economic interest in the SLP held by Symphony. Currently the Company and Symphony are party to two SLPs, for the Puttery location in The Colony, Texas and Charlotte, North Carolina.