GULFPORT ENERGY CORP

5. MEZZANINE EQUITY

The Company's amended and restated certificate of incorporation provides for, among other things, (i) the authority to issue 42 million shares of common stock with a par value of $0.0001 per share and (ii) the designation of 110,000 shares of preferred stock, with a par value of $0.0001 per share and a liquidation preference of $1,000 per share (the "Liquidation Preference").

Preferred Stock

In May 2021, the Company issued 55,000 shares of Series A Convertible Preferred Stock ("the preferred stock").

Prior to the redemption of the preferred stock noted below, holders of preferred stock were entitled to receive cumulative quarterly dividends at a rate of 10% per annum of the Liquidation Preference with respect to cash dividends and 15% per annum of the Liquidation Preference with respect to dividends paid in kind as additional shares of preferred stock (“PIK Dividends”). Gulfport had the option to pay either cash dividends or PIK Dividends on a quarterly basis.

Each holder of shares of preferred stock had the right (the “Conversion Right”), at its option and at any time, to convert all or a portion of the shares of preferred stock that it holds into a number of shares of common stock equal to the quotient obtained by dividing (x) the product obtained by multiplying (i) the Liquidation Preference times (ii) an amount equal to one (1) plus the Per Share Makewhole Amount (as defined in the Preferred Terms) on the date of conversion, by (y) $14.00 per share (as may be adjusted under the Preferred Terms).

The preferred stock had no stated maturity and would remain outstanding indefinitely unless repurchased or redeemed by Gulfport or converted into common stock. The preferred stock was classified as mezzanine equity in the accompanying consolidated balance sheets due to the redemption features.

Dividends on Preferred Stock

The Company didnot pay cash dividends to holders of our preferred stock during the three months ended September 30, 2025. The Company paid $1.7 million of cash dividends to holders of our preferred stock during the nine months ended September 30, 2025, and $1.1 million and $3.3 million during the three and nine months ended September 30, 2024, respectively.

Redemption of Preferred Stock

On August 5, 2025, Gulfport issued a notice of redemption for its preferred stock for cash. During the period between the date of the notice of redemption and September 5, 2025 (the "Redemption Date"),28,907 shares of preferred stock were converted into approximately 2.1 million shares of common stock and reclassified from mezzanine equity to stockholders' equity. On the Redemption Date, the Company redeemed the remaining 2,449 shares of preferred stock for cash totaling $31.3 million. Additionally, direct transaction-related costs of $1.1 million were incurred as part of the redemption. The excess of the cash settlement and direct transaction-related costs over the carrying value of the redeemed shares of preferred stock, totaling approximately $29.9 million, was treated as a deemed dividend and recorded as a reduction to retained earnings. The cash outflows related to the preferred stock redemption and associated fees are presented within financing activities on the consolidated statement of cash flows. The deemed dividend reduced net income available to common shareholders and impacted the calculation of earnings per share for the three and nine months ended September 30, 2025.

The following table summarizes activity of the Company’s preferred stock for the nine months ended September 30, 2025 and 2024: