TeleNav 2011 Annual Report Download - page 101

Table of Contents
TELENAV, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Convertible preferred stock
In connection with our IPO in May 2010, our previously authorized and outstanding convertible preferred stock was converted into
common stock. All of our convertible preferred stock outstanding converted into 23,345,247 shares of common stock based on the shares of
convertible preferred stock outstanding and we issued 636,139 shares of our common stock in the form of a stock dividend to the holders of our
Series E convertible preferred stock upon the completion of the IPO. Holders of Series E convertible preferred stock were each entitled to
receive cumulative dividends, payable in cash or stock at our option, at the rate of $0.13272 per share per annum. The cumulative dividend
became a fixed amount without further cumulation as of April 15, 2010.
Undesignated preferred stock
In October and December 2009, we received approval from our board of directors and stockholders, respectively, to amend our certificate
of incorporation upon the closing of our IPO to authorize 50,000,000 shares of undesignated preferred stock, par value $0.001 per share. In
connection with the closing of our IPO, we filed an amended and restated certificate of incorporation that removed the previously authorized
convertible preferred stock (after conversion of all such shares outstanding to common stock) and authorized 50,000,000 shares of undesignated
preferred stock, par value $0.001 per share. The undesignated preferred stock may be issued from time to time at the discretion of our board of
directors. As of June 30, 2011 and 2010, no shares of undesignated preferred stock were issued or outstanding.
Common stock
We are authorized to issue 600,000,000 shares of $0.001 par value stock. The holders of each share of common stock have the right to one
vote.
Stock repurchase program
On November 15, 2010, we announced that our Board of Directors authorized a program for the repurchase of up to $20 million of our
shares of common stock through open market purchases. The timing and amount of repurchase transactions under this program will depend on
market conditions and other considerations. Under this program, we utilized $12.0 million of cash to repurchase 1,160,643 shares of our
common stock at an average purchase price of $10.36 per share during fiscal 2011. The repurchased shares are being held as treasury shares. As
of June 30, 2011, the remaining authorized amount of stock repurchases that may be made under this repurchase program was $8.0 million.
We use the par value method of accounting for our stock repurchases. Under the par value method, common stock is first charged with the
par value of the shares involved. The excess of the cost of shares acquired over the par value is allocated to additional paid-in capital, or APIC,
based on an estimated average sales price per issued share with the excess amounts charged to retained earnings. As a result of our stock
repurchases during fiscal 2011, we reduced common stock and APIC by an aggregate of $3.4 million and charged $8.6 million to retained
earnings.
In addition to our stock repurchase program, during fiscal 2010 we repurchased from two of our former employees a total of 200,590
shares of our common stock at the then current fair market value, for a total of $1.2 million.
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