Securities Financing |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities Financing | Securities Financing Increase in Authorized Shares of Common Stock On February 26, 2026, following receipt of shareholder approval at the special meeting of the Company’s shareholders held on February 26, 2026, the Company filed an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, with the Delaware Secretary of State to increase the number of authorized shares of the Company’s common stock from 30,000,000 shares to 100,000,000 shares. The charter amendment became effective upon filing. Merger Equity Financing On March 11, 2026, the Company issued 4.1 million shares of common stock for $110.0 million, less $1.2 million in issuance costs, in a private placement transaction to entities affiliated with Conversant Capital, LLC and Silk. See “Note 2–CHP Merger” for a discussion on the financing of our Merger Transactions which was completed on March 11, 2026. At-the-Market Equity Offerings On May 18, 2026, the Company entered into an equity distribution agreement (the “Distribution Agreement”) with several investment banks relating to (a) the issuance and sale by the Company to or through its sales agents from time to time of shares of the Company’s common stock, $0.01 par value per share (“Common Stock”), and (b) the sale by forward sellers, acting as agents for the forward purchasers of shares of Common Stock (collectively, the “Shares”), with the Shares to be sold under the Distribution Agreement having an aggregate gross offering price of up to $250.0 million (the “ATM Program”). Pursuant to the terms of the Distribution Agreement, sales of the Shares under the ATM Program may be made in any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including, without limitation, sales made directly on the New York Stock Exchange, on any other existing trading market for the Common Stock or to or through a market maker (which may include ordinary brokers’ transactions) or as otherwise agreed by us and the sales agents, at market prices at the time of sale. The Company will pay a 2% or lower commission on the sales based on the volume-weighted average price. The offering of Shares under the ATM Program pursuant to the Distribution Agreement will terminate upon the earlier of (i) the sale of the maximum aggregate amount of the Shares subject to the Distribution Agreement, or (ii) termination of the Distribution Agreement as provided for therein. See “Note 18–Subsequent Events” for the Company’s ATM sales transaction completed during July 1, 2026 and subsequent equity issuances. Series A Preferred Stock On March 11, 2026, the Company completed an induced conversion of all the outstanding shares of the Company’s Series A Convertible Preferred Stock (“Preferred Stock”) with the Conversant Preferred Investors, the holders of all of the outstanding shares of the Company’s Preferred Stock into shares of the Company’s common stock. The Series A Preferred Stock was convertible outside of the Company's control and, in accordance with GAAP, was classified as mezzanine equity, outside the equity section, on our condensed consolidated balance sheets. Under the terms of the induced conversion, the Conversant Preferred Investors received 1,601,505 shares of common stock based on a modified conversion price of $32.00 per share, a cash payment of $4.7 million, and a $1.1 million cash dividend for the period of January 1, 2026 through March 11, 2026. In addition, the expiration date for the 1,031,250 warrants held by the Conversant Preferred Investors was extended from November 3, 2026 to November 3, 2027. All other warrant terms remain unchanged. During the quarter ended March 31, 2026, the Company derecognized the carrying amount of the Preferred Stock from temporary equity totaling $51.2 million, recorded the issuance of 1,601,505 shares of the Company’s common stock and additional paid-in capital, and recognized a deemed dividend equal to the excess of the fair value of all securities and other consideration transferred over the fair value of the common stock issuable pursuant to the original contractual conversion terms, in accordance with ASC 260-10-S99-2 totaling $19.1 million. The extension of the warrant expiration date represents a modification of equity-classified warrants. The incremental fair value resulting from the extension was included in the deemed dividend. As of June 30, 2026, the Company had no shares of Series A Preferred Stock outstanding. The Series A Preferred Stock had an 11% annual dividend calculated on the original investment of $41.3 million accrued quarterly in arrears and compounded. Dividends were cumulative, and any declaration of dividends was at the discretion of the Company’s Board. If the Board did not declare a dividend in respect of any dividend payment date, the amount of such accrued and unpaid dividend was added to the liquidation preference of the Series A Preferred Stock and compounded quarterly thereafter. For the three and six months ended June 30, 2025, the Board declared and paid $1.4 million and $2.8 million in dividends on its Series A Preferred Stock, respectively. As of December 31, 2025, a total of $10.0 million had been added to the liquidation preference of the Series A Preferred Stock. The following schedule summarizes our Series A Preferred Stock as of June 30, 2026 and December 31, 2025 (in thousands):
Outstanding Warrants On November 3, 2021, the Company issued 1,031,250 warrants to the Conversant Preferred Investors, each evidencing the right to purchase one share of common stock at a price per share of $40.00 and with an exercise expiration date of November 3, 2026. On March 11, 2026, the expiration date for the warrants held by Conversant was extended from November 3, 2026 to November 3, 2027. The Company had 1,031,250 outstanding warrants as of June 30, 2026 and December 31, 2025.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||