On September 11, 2025, the Company issued 75,000 shares of Series B Preferred Stock and 1,453,260 warrants to InspectionTech Holdings LP (the “Stellex Holder”) pursuant to a securities purchase agreement (the “Purchase Agreement”). The Series B Preferred Stock is classified as temporary equity in the mezzanine section of the consolidated balance sheets, as it is potentially redeemable for cash at the holder’s option beginning December 31, 2030, and under certain other events outside the Company’s control.

The Company continues to have the option to access (the “Series B Delayed Draw”) up to $30.0 million in additional proceeds through the issuance of up to 30,000 shares of Series B Preferred Stock and 581,304 related warrants prior to September 11, 2027, subject to the terms and conditions of the Purchase Agreement. No Series B Delayed Draws were made during the quarter.

During the three-months ended March 31, 2026, the Company accrued a 10.5% paid-in-kind (PIK) dividend on the outstanding Series B Preferred Stock. The dividend was non-cash and was settled by increasing the carrying value of the preferred stock. The accrued PIK dividend totaled $2.0 million for the period, equivalent to $27 per share of redeemable preferred stock.

The following table presents the change in carrying value of the redeemable preferred stock during the period ended March 31, 2026 (in thousands):


Balance at December 31, 2025	$	51,951
Additions	7
Accrued paid-in-kind dividend	2,036
Accrued paid-in-kind commitment fees	75
Accretion to redemption value	763
Balance at March 31, 2026	$	54,832

For further information regarding the terms, classification, fair value allocation, and accretion accounting for the Series B Preferred Stock and warrants, refer to Note 16 - Redeemable Preferred Stock in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.