Each one in plain English, with the numbers worked through for a shareholder.
11 May 2012capital raising announcement● Neutral
On May 9, 2012 Avista and other holders swapped the old Series B and Series C preferred for new Series B-1 and C-1 shares, which the company says was to resolve technical legal questions about earlier issuances and amendments, with the same intended economics. The new B-1 and the amended 2008 warrants have a floor so that conversion/exercise prices cannot be cut below the closing price when Avista commitment warrants are issued; a charter correction was also filed. This relates to the March 2012 Avista commitment.
21 Mar 2012capital raising announcement● NeutralMajor
On March 15, 2012 the company agreed to sell certain North American seismic data to Seismic Exchange, Inc. for $10M cash, keeping 75% of net revenues from the data until it receives $2M or March 7, 2017, then 50%. Separately, on March 16 Avista committed to buy up to $10M more of the 9.75% notes (plus foreign loan facilities) through Jan 1, 2013, for a $300,000 fee and warrants over 190,000 shares per period at a $0.01 exercise price. Closing of the data sale was still subject to conditions.
On August 29, 2011 the company issued 1,041,668 common shares at $3.84 to the new lenders to pay the $4.0M advisory fee from the August credit facility. Because that price was below existing conversion and exercise prices, the Series B preferred conversion price fell to $15.95, the 2008 warrants' exercise price to $9.05, and the 2010 warrants' exercise price to $3.84, which dilutes existing common shareholders.
On December 14, 2010, Geokinetics closed a $30M private placement of 120,000 Series D junior preferred shares plus warrants over 3,495,000 common shares (exercise price $9.64, expiring December 2016). Buyers were Avista, PGS, Levant and other existing holders, including directors Webster, Ziegler and a trust affiliated with Harte. The preferred pays 10.50% cash or 11.50% if accrued and must be redeemed December 15, 2016. The press release says proceeds will repay debt and fund general corporate purposes. A special committee of independent directors approved it after receiving a fairness opinion. Separately, Amendment No. 3 to the RBC credit agreement waived the November 2010 EBITDA test and all covenants at December 31, 2010. It sets new monthly tests through 2011, caps 2011 capital spending at $40M, and ties revolver availability to a borrowing base, with $29M outstanding of a $40M limit. A registration rights amendment lets warrant holders demand repurchase on a public common stock offering. This continues the covenant problems flagged in October; the new preferred and warrants add dilution potential for common holders.
30 July 2008capital raising announcement● NeutralMajor
On July 28, 2008 Geokinetics sold Avista Capital Partners entities 120,000 shares of new Series B-2 convertible preferred stock plus five-year warrants for 240,000 common shares at $20.00, for $30 million in total. This adds to the Series B preferred first issued to Avista in December 2006, whose conversion terms are now stated: each preferred share converts into 10 common shares at the holder's option. The press release says 377,526 Series B shares are outstanding and the Series B holders have about 38% of the voting stock as-converted, so common shareholders are diluted. Proceeds are intended for the raised $80 million capital budget, working capital and general corporate purposes.
21 Dec 2006capital raising announcement● NeutralMajor
On December 15, 2006 Geokinetics sold $110,000,000 of Second Priority Senior Secured Floating Rate Notes due 2012 (via RBC Capital Markets, guaranteed by its subsidiaries) and used the proceeds to repay the Junior Bridge Loan from the Grant deal. The $55,000,000 Senior Bridge Loan from Avista was instead settled by issuing 228,683 Series B preferred shares, so the preferred shares were issued earlier than the Oct 26 closing expected in September and in payment of the loan (principal plus interest) rather than for cash. PNC also replaced its facility with a $14,500,000 revolver and a $6,500,000 capital expenditure loan. The notes carry a commitment to register an exchange offer within 270 days of closing. This resolves the bridge loans but leaves $110 million of secured notes and a new class of preferred stock.
15 Dec 2005capital raising announcement▲ GoodMajor
On December 9, 2005 Geokinetics completed the second and final closing of its private placement, selling 4,550,000 common shares at $1.25 for $5,687,500, plus five-year warrants for 455,000 shares at $2.00. Total proceeds from both closings were $30,837,500. This portion is for general corporate purposes and working capital, since the first closing went to Trace and the equipment payoff. Placement agent RBC Capital Markets received warrants for 274,050 shares. Shareholders are diluted further.
What it means for a shareholder
4.5m new shares at $1.25 to raise about $5.7m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
Geokinetics raised $2,499,900 by selling 8,333 shares of 6% Series A convertible preferred stock to private investors, including directors Steven Webster and William Ziegler. The preferred stock converts into common at $0.30 per share and ranks ahead of common shareholders on liquidation. About $1.5M is earmarked for software and equipment for subsidiary Geophysical Development Corporation and about $1.0M for working capital and fees. Dividends and buybacks on other stock now need approval from 51% of the preferred holders. (Inference: this is probably what the directors' early-December share purchases reported just before were, though the filing does not link them.)
