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SHAREHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
SHAREHOLDERS’ EQUITY

 

12.SHAREHOLDERS’ EQUITY

 

On December 11, 2023, the Board of Directors suspended the monthly cash dividends for the 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) and for the 8.75% Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”) beginning with the payment scheduled for December 15, 2023, together with the remaining dividends that were declared. The suspension of these dividends deferred approximately $1.3 million in cash dividend payments each month.

 

 

On September 11, 2024, a Certificate of Amendment (the “Amendment”) to the Certificate of Designations, Preferences and Rights of 11% Series A Cumulative Redeemable Preferred Stock (the “Existing Certificate”) became effective, amending certain provisions of the 11% Series A Cumulative Redeemable Preferred Stock. Due to the above Amendment, effective September 12, 2024, the monthly dividends were reduced to approximately $1.1 million per month. The title of the Existing Certificate was amended to read “Amended and Restated Certificate of Designations, Preferences and Rights of 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock.” Holders of Series A Preferred Stock will now receive similar change of control protections to those afforded to holders of the Company’s Series B Preferred Stock. The dividend of Series A Preferred Stock was amended from 11% to 8.75% per annum and the per annum dividend amount per share was amended from $2.75 to $2.1875 per share per annum.

 

In January 2025, the Company’s common stock shareholders approved an increase in the number of authorized common shares from 35 million to 85 million. An amended certificate of incorporation was filed by the Company.

 

Also, in January 2025, the Company’s Board of Directors declared the resumption of suspended Preferred Stock dividends beginning with two months of payments. In February 2025, the Company resumed monthly payment of the dividends on the Series A and B Preferred Stock, paying one month of dividends in arrears in both February and March 2025 and applying these amounts to the earliest payments in arrears. The March 2025 payment, which occurred after the conversion as discussed below, included dividends for the shares of Series A Preferred Stock that were not converted and dividends for the Series B Preferred Stock.

 

On March 6, 2025, the Board of Directors elected to exercise its conversion rights, which provided for the conversion of each share of Series A Preferred Stock into 7.3358 shares of common stock, inclusive of all accumulated and unpaid dividends. Dividends on the converted shares of Series A Preferred Stock ceased to accrue as of the conversion date. Individual shareholders who, on the exchange date, owned at least 100,000 shares of Series A Preferred Stock did not have their shares automatically converted to common stock so long as they were held by the Company’s transfer agent, unless they consented to the Conversion. There were 3,541,701 shares of Series A Preferred Stock converted at that time and 984,530 shares of Series A Preferred Stock outstanding as of September 30, 2025. Due to the Conversion, the monthly cash dividends were reduced to approximately $455,000 per month. As a result of the Conversion, the Company delisted the Series A Preferred Stock from the Nasdaq Global Market.

 

At March 31, 2026, the Company had total dividends due of approximately $6.3 million, which represents the accumulated dividends due to preferred shareholders of record on March 31, 2026. For the three months ended March 31, 2026, the Company declared and paid three months of dividends on the Series A Preferred Shares ($0.182 per share and $0.547 per share for the quarter). The Company also declared three months of regular dividends together with additional dividends related to arrearages, and paid five months of dividends (including two months of dividends in arrears which represents $0.182 per share and $0.912 per share for the quarter), on the Series B Preferred Shares. For the three months ended March 31, 2025, the Company declared four months of dividends and paid two months of dividends on the Preferred Shares. The Company plans to continue declaring monthly dividends. (See Note 18.)