Quarterly report pursuant to Section 13 or 15(d)

Note 14 - Stockholders' Equity

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Note 14 - Stockholders' Equity
 6 Months Ended
Apr. 30, 2020
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
Note
14.
Stockholders’ Equity
 
In conjunction with the Business Combination, all common and preferred shares that were in existence for the Predecessor were settled and
no
longer outstanding subsequent to
December 5, 2018.
On
December 6, 2018,
in connection with the closing of the Business Combination, the Company redeemed a total of
22,337,322
shares of its Class A common stock pursuant to the terms of its certificate of incorporation, resulting in a total cash payment from the Company’s trust account to redeeming stockholders of
$231.4
million.
 
The Company’s amended and restated certificate of incorporation authorizes the issuance of
500,000,000
shares of common stock, par value
$0.0001,
and
10,000,000
shares of preferred stock, par value
$0.0001.
 Immediately following the Business Combination, there were:
 
 
•
28,847,707
shares of common stock issued and outstanding;
 
•
34,100,000
warrants outstanding, each exercisable for
one
share of common stock at an exercise price of
$11.50
 per share; and
 
•
2,450,980
shares of
zero
-dividend convertible perpetual preferred stock (“Series A Preferred Stock”) outstanding, as further discussed below
 
On
May 14, 2019,
in order to finance a portion of the purchase price for the acquisition of Capital, the Company completed a public offering of
18,098,166
of its common stock at a price of
$4.50
per share, receiving net proceeds of approximately
$77.4
million, after deducting underwriting discounts, commissions, and other offering expenses. In connection with the offering, certain of the Company’s directors, officers and significant stockholders, and certain other related investors, purchased an aggregate of
3,980,166
shares of its common stock from the underwriters at the public offering price of
$4.50,
representing approximately
25%
of the total shares issued (without giving effect to the underwriters’ option to purchase additional shares).
 
As discussed below, on
April 29, 2019,
2,101,213
shares of common stock were issued in exchange for the Company's public warrants and
1,707,175
shares of common stock were issued in exchange for the Company's private warrants. After the completion of the warrant exchange and as of
April 30, 2020,
there were
13,017,777
public warrants and
no
private warrants outstanding.
 
The Company’s Series A Preferred Stock does
not
pay dividends and is convertible (effective
June 6, 2019)
into shares of the Company’s common stock at a
1:1
ratio (subject to customary adjustments). The Company has the right to elect to redeem all or a portion of the Series A Preferred Stock at its election after
December 6, 2022
for cash at a redemption price equal to the amount of the principal investment plus an additional cumulative amount that will accrue at an annual rate of
7.0%
thereon. In addition, if the volume weighted average price of shares of the Company’s common stock equals or exceeds
$13.00
for
30
consecutive days, then the Company will have the right to require the holder of the Series A Preferred Stock to convert its Series A Preferred Stock into Company common stock, at a ratio of
1:1
(subject to customary adjustments).
 
Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events
not
solely within the Company’s control) are classified as temporary equity. The preferred stock contains a redemption feature contingent upon a change in control which is
not
solely within the control of the Company, and as such, the preferred stock is presented outside of permanent equity.
 
Warrant Exchange
 
On
April 1, 2019,
the Company commenced an offer to each holder of its publicly traded warrants (the “public warrants”) and private placement warrants that were issued in connection with Industrea’s initial public offering on
April 17, 2017 (
the “private warrants”) the opportunity to receive
0.2105
shares of common stock in exchange for each outstanding public warrant tendered and
0.1538
shares of common stock in exchange for each private warrant tendered pursuant to the offer (the “Offer” or “Warrant Exchange”).
 
On
April 26, 2019,
a total of
9,982,123
public warrants and
11,100,000
private warrants were tendered for exchange pursuant to the Offer.  On
April 29, 2019,
2,101,213
shares of common stock were issued in exchange for the tendered public warrants and
1,707,175
shares of common stock were issued in exchange for the tendered private warrants. A negligible amount of cash was paid for fractional shares. As
no
agreement was modified as a result of the exchange, we concluded that the exchange of Company common stock for the warrants was analogous to a share repurchase. The Company recorded a loss on repurchase of the warrants of
$5.2
million in the
2019
second
quarter, all of which was included as an adjustment to retained earnings. The
$5.2
million loss reflects the par value of the warrants in APIC of
$21.1
million less the fair value of the common stock that was issued in exchange for the warrants of
$26.3
million. After the completion of the Warrant Exchange and as of
April 30, 2020,
13,017,777
public warrants and
no
private warrants were outstanding.