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MEMBERS’ AND STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2026
Equity [Abstract]  
MEMBERS’ AND STOCKHOLDERS’ EQUITY
8. MEMBERS’ AND STOCKHOLDERS’ EQUITY

 

Statutory Conversion of Members’ Equity

 

Immediately prior to the Conversion, the members’ equity of the limited liability company consisted of members’ capital accounts. In connection with the statutory conversion on January 1, 2026:

 

  ● All outstanding membership interests were converted, on an approximately 3.333 to 1 basis, into shares of the Company’s common stock in accordance with the conversion agreement;
  ● Members’ equity of the Predecessor entity was reclassified into common stock and additional paid-in-capital of the Successor corporation;
  ● No consideration was exchanged and no change in the economic interests of the owners occurred as a result of the Conversion

 

As the Conversion was treated as a capital reorganization, total equity immediately before and after the Conversion was unchanged.

 

 

Comparative Equity Presentation

 

The condensed balance sheets as of June 30, 2026 and December 31, 2025 present equity based on the Company’s legal form as of each date. Accordingly:

 

  ● The balance sheet as of December 31, 2025 reflects members’ equity of the limited liability company; and
  ● The balance sheet as of June 30, 2026 reflects stockholders’ equity of the corporation, including common stock, additional paid-in-capital, treasury stock, and retained earnings.

 

During the three months ended June 30, 2026, the Company recorded an out-of-period adjustment to record $75 of original listing fees incurred in connection with its January 2026 initial public offering that had not been recorded in the prior period. The adjustment reduced additional paid-in capital and increased other current liabilities by $75. The adjustment had no effect on net income, earnings per share, or cash flows for any period presented. Management evaluated the effect of the error on the condensed consolidated financial statements as of and for the three months ended March 31, 2026, and on the current period, and concluded that it was not material to any period (in thousands).

 

Warrants

 

Representatives warrants

 

In connection with the Company’s January 9, 2026, initial public offering, the Company issued representative warrants to the underwriter to purchase up to 10% of the IPO common shares issued at an exercise price of $9.375 per share. Therefore, on January 9, 2026, 266,667 shares were issued in connection with the IPO and an additional 40,000 shares on January 20, 2026, when the over-allotment option was exercised. The warrants become exercisable beginning July 7, 2026 and expire on January 7, 2031.

 

The warrants are classified as equity and were measured at fair value on the issuance date using the Black-Scholes option pricing model. The warrants were valued at $2.66 per warrant, with the aggregate fair value of $816 thousand recorded as an offering cost and reflected as a reduction to additional paid in capital. The warrants are not subject to subsequent remeasurement.

 

The warrants may be exercised on a cash or cashless basis and were considered potentially dilutive for purposes of diluted earnings per share in accordance with ASC 260.

 

Consultant warrants

 

In November 2025, the Company entered into a consulting agreement with a strategic provider which provided for the issuance of up to 25,000 warrants to purchase shares of the Company’s common stock, subject to approval the Company’s Board of Directors. On March 25, 2026, the Board approved the issuance of these warrants.

 

The warrants have a contractual term of three years from the date of issuance, include a cashless exercise feature, and are subject to a one-year lock-up period. The warrants have an exercise price equal to 125% of the Company’s initial public offering price for the initial tranche and 125% of the volume-weighted average price of the Company’s common stock for a specific look-back period for any renewal tranche. The warrants vest over time and include accelerated vesting upon a change in control, as defined in the agreement.

 

The warrants are classified as equity and will be measured at fair value on their issuance date, with such fair value recognized as share-based compensation expense over the requisite service period.