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Preferred Stock | 6 Months Ended
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Jun. 30, 2025
Preferred Stock [Abstract] |
Preferred Stock | Preferred Stock Series A Preferred Stock Financing On May 19, 2025, the Company entered into a securities purchase agreement (the “Series A Purchase Agreement”) with certain institutional accredited investors, pursuant to which the Company may issue and sell, in a series of registered direct offerings, up to an aggregate of 200,000 shares of newly designated Series A Convertible Preferred Stock, par value $0.0001 per share, with a stated value of $1,000 per share (the “Series A Preferred Stock”), to the investors at a purchase price of $960.00 per share, subject to the satisfaction of certain conditions upon each closing. The initial offering for 35,000 shares (the “Preferred Shares”) of Series A Preferred Stock was closed on May 22, 2025 (the “First Closing”), for net proceeds to the Company of $33.6 million, before deducting placement agent fees and other offering expenses. As the closing, the Company also issued the lead investor 505,051 shares of the Company’s Class A common stock as a commitment fee pursuant to the Series A Purchase Agreement. The Company’ Series A Preferred Stock is redeemable at the option of the Company, upon the payment in full of certain Company debt or the occurrence of a “Fundamental Transaction”, each as described below. The Series A Preferred Stock is redeemable at the option of the holders following a period of time after the maturity date of the First Lien Notes and the Second Lien Notes or in connection with a Fundamental Transaction, each as described below, and is classified as mezzanine. The Series A Preferred stock was initially recorded at fair value upon issuance in the amount of $29.4 million, net of issuance cost, commitment fee and discount. As of June 30, 2025, holders of the Company’s Series A Preferred Stock converted an aggregate of 12,000 shares of Series A Preferred Stock into 4,087,889 shares of Class A common stock. In connection with the First Closing, the Company designated 254,000 shares of its authorized and unissued preferred stock as Series A Preferred Stock and established voting and other relative rights, powers and preferences of the Series A Preferred Stock and the qualification, limitations and restrictions thereof pursuant to the Certificate of Designations of the Series A Preferred Stock (the “Certificate of Designations”), as summarized below: Ranking The Series A Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all of the Company’s capital stock, unless the Required Holders (as defined in the Certificate of Designations) consent to the creation of other capital stock that is senior or equal in rank to the Series A Preferred Stock. Liquidation Preference In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of the Series A Preferred Stock shall be entitled to receive, before any payment or distribution is made to holders of Class A common stock, an amount per share on an as converted basis. Dividends The holders of Series A Preferred Stock will be entitled to receive dividends on the stated value of their shares of Series A Preferred Stock from and after the occurrence of any “Triggering Event” (as defined in the Certificate of Designations) and during the continuance of the Triggering Event. A Triggering Event includes, but not limited to: suspension from trading or failure of the Class A common stock to be trading or listed within certain time periods; failure to issue conversion shares within certain time periods; failure to pay dividends on any dividend date; and certain bankruptcy or insolvency events. Any such dividends are payable “in kind”, in the form of additional shares of Series A Preferred Stock, quarterly in arrears at the dividend rate of 18% per annum. Conversion Rights Each share of Series A Preferred Stock is convertible, at the option of the holder, into shares of Class A common stock at a conversion price equal to the lesser of (i) a fixed price of $4.752 and (ii) 95% of the lowest volume weighted average price (“VWAP”) over the five trading days immediately preceding the conversion date, subject to a floor price of $0.792. The conversion price is subject to adjustment for stock split, combinations, dividends, and similar events. When the effective conversion price is determined based on subclause (ii) above, it is in substance a share-settled redemption feature since the investors would receive a determinable payoff on their investment in the Series A Preferred Stock. As of June 30, 2025, the redemption feature was exercisable because the effective conversion price was determined by subclause (ii) above. Therefore, as of June 30, 2025, it was probable that the Series A Preferred Stock would become redeemable. Accordingly, the carrying amount of the Series A Preferred Stock was required to be accreted to its redemption value. During the three and six months ended June 30, 2025, the Company recorded $7.6 million in deemed dividends, representing the accretion of the Series A Preferred Stock to the redemption value, which reduced earnings attributable to the Class A common stockholders. Conversions are subject to certain limitations (i) a beneficial ownership cap of 4.99% of outstanding common stock; (ii) a monthly conversion cap equal to the greater of $12.5 million or 12.5% of the aggregate daily dollar trading volume on Nasdaq during the months (unless a Triggering Event has occurred or conversion is at the fixed price); and (iii) a cap on issuances of common stock without shareholder approval under applicable Nasdaq rules, which approval was obtained on July 3, 2025. Voting Rights Except as provided in the Certificate of Designations or as otherwise required by law, holders of the Series A Preferred Stock will vote as a single class with the holders of Class A common stock (and any other class or series of capital stock of the Company that votes as a single class with the holders of the Class A common stock) on an “as converted” basis on all matters submitted to a vote of stockholders of the Company; provided, however, that (i) holders of the Series A Preferred Stock are not entitled to vote on any proposal to approve the issuance of Class A common stock pursuant to the Certificate of Designations in excess of the exchange cap and (ii) no holder of the Series A Preferred Stock will have the power to vote any shares beneficially owned or that may be deemed to be beneficially owned by such holder in excess of the maximum percentage. Transfer Restrictions A holder may not transfer all or any portion of its shares of Series A Preferred Stock without the Company’s express prior written consent, except to an affiliate of such holder or to the Company. Company Optional Redemption At any time at or after the repayment in full of the Company’s Floating Rate Senior Secured Notes due 2028 (the “First Lien Notes”) and the Company’s Convertible Second Lien Senior Secured Notes due 2030 (the “Second Lien Notes”), the Company has the right to redeem all or some of the then outstanding shares of Series A Preferred Stock at a cash redemption price equal to the stated value ($1,000 per share) of such shares, subject to the satisfaction of certain conditions set forth in the Certificate of Designations. Company Optional Redemption in Connection with a Fundamental Transaction In connection with any Fundamental Transaction (as described below), the Company has the right to redeem all, and not less than all, of the Series A Preferred Stock then outstanding at a cash redemption price equal to a 105% redemption premium to the stated value of the Series A Preferred Stock being redeemed (such price, the “Fundamental Transaction Redemption Price”), subject to the satisfaction of certain conditions set forth in the Certificate of Designations, including the prior repayment in full of the First Lien Notes and the Second Lien Notes. Redemption at the Option of the Holders At any time beginning on or after the later of the date that is 181 days after the maturity date of the First Lien Notes and the Second Lien Notes, a holder of Series A Preferred Stock may require the Company to repurchase all or any portion of the holder’s Series A Preferred Stock at the stated value of such shares. Repurchase at the Option of the Holders Upon a Fundamental Transaction In connection with a Fundamental Transaction, a holder of Series A Preferred Stock may require the Company to repurchase all or any portion of the holder’s Series A Preferred Stock at a 105% redemption premium, subject to the prior repayment in full of the First Lien Notes and the Second Lien Notes. Purchase Rights If at any time the Company grants, issues or sells any options, convertible securities, or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of Class A common stock (the “Purchase Rights”), then each holder of Series A Preferred Stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Class A common stock acquirable upon complete conversion of all the Series A Preferred Stock held by such holder immediately prior to the date as of which the record holders of shares of Class A common stock are to be determined for the grant, issue or sale of such Purchase Rights, subject to certain limitations on beneficial ownership. Fundamental Transactions The Certificate of Designations prohibits the Company from entering into specified fundamental transactions (including, without limitation, mergers, business combinations and similar transactions) (each, a “Fundamental Transaction”) unless the Company (or the Company’s successor) assumes in writing all of the Company’s obligations under the Certificate of Designations and the other Transaction Documents (as defined in the Certificate of Designations) and the successor entity is a publicly traded corporation listed on an eligible market or else the Company redeems the then outstanding Series A Preferred Stock in full in connection with the Fundamental Transaction. Covenants The Certificate of Designations contains a variety of obligations on the Company’s part not to engage in specified activities. In particular, the Company will not, and will cause its subsidiaries to not, redeem, repurchase or declare or pay any cash dividend or distribution on any of the Company’s capital stock (other than as required under the Certificate of Designations or permitted under the indentures governing the First Lien Notes and the Second Lien Notes); incur any indebtedness or any liens (other than any indebtedness or any liens permitted under the indenture governing the Second Lien Notes); or enter into or consummate any transaction for any variable price securities (other than sales of shares pursuant to the Company’s existing “at-the-market” facility and certain other exclusions). In addition, the Company will not issue any preferred stock or issue any other securities that would cause a breach or default under the Certificate of Designations. Reservation Requirements So long as any shares of Series A Preferred Stock remain outstanding, the Company has agreed to at all times reserve a number of shares of Class A common stock equal to the sum of (i) 100% of the aggregate number of shares of Class A common stock as shall from time to time be necessary to effect the conversion of all of the Series A Preferred Stock then outstanding at the Floor Price then in effect (without regard to any limitations on conversions) and (ii) 100% of the aggregate number of shares of Class A common stock that would be necessary to effect the conversion of that number of shares of Series A Preferred Stock equal to 18 months of dividends on the Series A Preferred Stock then outstanding at the floor price then in effect (without regard to any limitations on conversions).

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- Definition Preferred Stock + References No definition available. + Details
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- Definition The entire disclosure for terms, amounts, nature of changes, rights and privileges, dividends, and other matters related to preferred stock. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 480 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479857/480-10-S50-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent + Details
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