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PREFERRED STOCK AND WARRANTS | 12 Months Ended
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Dec. 31, 2025
PREFERRED STOCK AND WARRANTS |
PREFERRED STOCK AND WARRANTS | (15) PREFERRED STOCK AND WARRANTS On March 28, 2023, the Company issued 55,000 shares of Preferred Stock to investors in the Private Placement at a price of $970 per share, along with 4,858,090 Warrants with an exercise price of $3.77 per share. On June 25, 2024, the Company redeemed the Preferred Stock with a portion of the proceeds from the refinancing of the 2020 Credit Facility at a rate of 103% for a total of approximately $63.5 million. The Warrants remain outstanding and without modification. See Note 13 for a description of the refinancing of the 2020 Credit Facility. The Company accounted for the Preferred Stock until it was redeemed and continues to account for the Warrants as liability-classified instruments based on an assessment of their specific terms in accordance with ASC Topic 480, Distinguishing Liabilities from Equity. The fair value option was elected for the Preferred Stock, as the Company considered fair value to best reflect its expected future economic value. The Warrants are remeasured to fair value at each reporting date using the same valuation methodology applied upon issuance using current input assumptions. The value of the Preferred Stock was calculated quarterly through March 31, 2024 using the Black-Derman-Toy (BDT) stochastic yield lattice model to capture the optimal timing of repayment, increasing dividend rate and other features and the value of the Warrants is calculated using the Black-Scholes Pricing Model. Changes in the fair value of the Preferred Stock and Warrants are reported as Other expense, net in the Company’s consolidated statements of operations. The Company determined the fair value of the Warrants using Level 3 input. The key assumptions input into the models utilized were as follows as of December 31, 2025 and 2024: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | December 31, | ​ | ​ | ​ | December 31, | ​
​ | ​ ​ ​ | 2025 | ​ | 2024
Stock price | ​ | $ | 2.88 | ​ | ​ | $ | 4.16 | ​
Strike price | ​ | $ | 3.77 | ​ | ​ | $ | 3.77 | ​
Risk-free rate | ​ |  | 3.48 | % | ​ |  | 4.21 | %
Volatility | ​ |  | 50.7 | % | ​ |  | 57.5 | %
Dividend yield | ​ |  | 0.0 | % | ​ |  | 0.0 | %
Time to expiration (years) | ​ |  | 1.2 | ​ | ​ |  | 2.2 | ​
Fair value of Warrant per share | ​ | $ | 0.41 | ​ | ​ | $ | 1.66 | ​
​ The change in the Company’s Preferred Stock for the year ended December 31, 2024 and 2023 was as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31,
​ | ​ ​ ​ | 2024 | ​ | ​ | 2023
Balance at beginning of year | ​ | $ | 53,337 | ​ | $ | —
Issued | ​ | ​ | — | ​ | ​ | 47,854
Payable in-kind dividends | ​ |  | 2,743 | ​ |  | 3,935
Fair value adjustments | ​ | ​ | 5,605 | ​ | ​ | 1,548
Call premium (3%) | ​ |  | 1,851 | ​ |  | —
Redemption (June 25, 2024) | ​ | ​ | (63,536) | ​ | ​ | —
Balance at end of year | ​ | $ | — | ​ | $ | 53,337
​ The changes in the Company’s Warrant liabilities for the years ended December 31, 2025 and 2024 were as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ ​ ​ | Year ended December 31,
​ | ​ | 2025 | ​ | 2024
Balance at beginning of year | ​ | $ | 8,064 | ​ | $ | 5,295
Exercise of warrants | ​ | ​ | (150) | ​ | ​ | —
Fair value change | ​ |  | (5,995) | ​ |  | 2,769
Balance at end of period | ​ | $ | 1,919 | ​ | $ | 8,064
​ The Preferred Stock, redeemed on June 25, 2024, was subordinate to the Company’s indebtedness and senior to the Company’s common stock or other equity. Holders of the Preferred Stock were entitled to cumulative dividends that accrued quarterly. Dividends were payable in-kind during the first year at a rate of 9.25%. At the Company’s option, the dividends were payable in-kind or in cash during the second year at a rate of 9.75%. Dividends thereafter were to be payable in cash at a rate of 12.00%. The proceeds from the Preferred Stock issuance were approximately $53.4 million, including $10.0 million from existing related party stockholders. Offering costs paid by the Company of approximately $3.5 million were recorded in Other expense, net in the year ended December 31, 2023. The net proceeds from the Private Placement were used for the repayment of debt. The Preferred Stock was redeemable on or after the first and second anniversaries of the closing date at a rate of 103% and 102%, respectively. The Warrants are immediately exercisable and upon an event such as a merger, consolidation, asset sale or similar change of control, the Warrants may be exercised and the holders may vote the underlying shares of common stock. In connection with the Private Placement, the Company provided the investors with certain registration rights relating to the Preferred Stock, the Warrants and the shares of the Company’s common stock underlying the Warrants, that required the Company to file a registration statement on Form S-3 with the SEC within 30 days following the closing date of the Private Placement. The registration requirement was completed on May 19, 2023. During the year ended December 31, 2025, 176,658 of the Warrants were exercised in cashless exercises, resulting in the issuance of 32,573 of the Company’s common stock at a weighted average fair value of $4.62 per share. There were 4,681,432 remaining Warrants outstanding as of December 31, 2025. ​ ​

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