Redeemable Preferred Stock and Restricted Stock Units	9 Months Ended
Sep. 30, 2023
Redeemable Preferred Stock And Restricted Stock Units
Redeemable Preferred Stock and Restricted Stock Units	Note 10 — Redeemable Preferred Stock and Restricted Stock Units On September 25, 2023 (the “Closing Date”), the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Tacora. Pursuant to the terms of the Stock Purchase Agreement, on the Closing Date, the Company sold to Tacora 13,725 shares of Series B Preferred Stock (the “Preferred Stock”), 7,500 Series 1 restricted stock units (the “Series 1 RSUs”), and 15,000 Series 2 restricted stock units (the “Series 2 RSUs,” and together with the Series 1 RSUs, the “RSUs”). The Preferred Stock was purchased for $1,000 per share, representing an aggregate sum of $13.7 million. The RSUs were purchased for $3.33 per unit, representing an aggregate sum of $0.1 million. Under the Stock Purchase Agreement and subject to the terms and conditions set forth therein, Tacora also may purchase up to an additional 32,775 shares of Preferred Stock for aggregate consideration of $32.8 million and up to an additional 17,500 Series 1 RSUs and 35,000 Series 2 RSUs, for aggregate consideration of $0.1 million. The additional shares of Preferred Stock and the RSUs will be purchased and issued from time to time, proportionally, in connection with and as the Company invests in certain approved transactions (as established in the Stock Purchase Agreement). From the Closing Date until 48 months after all shares of Preferred Stock issuable to Tacora under the Stock Purchase Agreement have been issued, the Preferred Stock is entitled to receive cumulative dividend distributions at a rate of 8% per annum. Thereafter, the dividend rate increases to 15.5% per annum. The holders of the Preferred Stock have no voting rights and the Preferred Stock is not convertible into Common Stock. *Mandatory Redemption of the Preferred Stock and RSUs* Each share of Preferred Stock is redeemable for $1,000 per share, plus all accrued and unpaid dividends thereon. The Company may redeem the Preferred Stock in part or in full at any time and from time to time; provided that the Company must redeem all of the issued and outstanding shares of Preferred Stock on or prior to the sixth anniversary of the Closing Date. Beginning on the third anniversary of the Closing Date, Tacora has the right to surrender the Series 1 RSUs to the Company for a cash payment in an amount equal to the product of (i) the then fair market value of a share of the Common Stock minus $164.95 (the estimated fair market value of a share of the Common Stock on the Closing Date) multiplied by (ii) the number of Series 1 RSUs then being surrendered to the Company. Tacora has a similar right to surrender the Series 2 RSUs beginning on the sixth anniversary of Closing Date for a cash payment calculated in the same way. Neither the Company nor Tacora possess the right to deliver or demand that the RSUs be settled in Common Stock. The RSUs do not provide Tacora with voting rights or rights to dividend equivalent payments. The Company concluded the Preferred Stock and RSUs are mandatorily redeemable financial instruments in accordance with ASC 480 and, as such, must be classified as a liability, with preferred annual returns and any changes in redemption value being accrued and recorded as interest expense. The Company measured each of these liabilities at fair value on the Closing Date. As of September 30, 2023, the Company marked each of these financial instruments to the respective redemption value of $13.7 million for the preferred stock and $0.1 million for the RSUs, which is reflected on the consolidated balance sheets. The Company incurred $0.6 million of deferred issuance costs in relation to the issuance of the Preferred Stock, which is presented net of the Preferred Stock liability and will be amortized over the estimated six-year term of the Preferred Stock. The Company did not incur material issuance costs related to the RSUs. As of September 30, 2023, the RSUs do not have any redemption value and the maximum amount payable for the preferred stock is $13.7 million.

Redeemable Preferred Stock and Restricted Stock Units

9 Months Ended

Sep. 30, 2023

Redeemable Preferred Stock And Restricted Stock Units

Redeemable Preferred Stock and Restricted Stock Units

Note 10 — Redeemable Preferred Stock and Restricted Stock Units

On September 25, 2023 (the “Closing Date”), the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Tacora. Pursuant to the terms of the Stock Purchase Agreement, on the Closing Date, the Company sold to Tacora 13,725 shares of Series B Preferred Stock (the “Preferred Stock”), 7,500 Series 1 restricted stock units (the “Series 1 RSUs”), and 15,000 Series 2 restricted stock units (the “Series 2 RSUs,” and together with the Series 1 RSUs, the “RSUs”). The Preferred Stock was purchased for $1,000 per share, representing an aggregate sum of $13.7 million. The RSUs were purchased for $3.33 per unit, representing an aggregate sum of $0.1 million. Under the Stock Purchase Agreement and subject to the terms and conditions set forth therein, Tacora also may purchase up to an additional 32,775 shares of Preferred Stock for aggregate consideration of $32.8 million and up to an additional 17,500 Series 1 RSUs and 35,000 Series 2 RSUs, for aggregate consideration of $0.1 million. The additional shares of Preferred Stock and the RSUs will be purchased and issued from time to time, proportionally, in connection with and as the Company invests in certain approved transactions (as established in the Stock Purchase Agreement).

From the Closing Date until 48 months after all shares of Preferred Stock issuable to Tacora under the Stock Purchase Agreement have been issued, the Preferred Stock is entitled to receive cumulative dividend distributions at a rate of 8% per annum. Thereafter, the dividend rate increases to 15.5% per annum. The holders of the Preferred Stock have no voting rights and the Preferred Stock is not convertible into Common Stock.

Mandatory Redemption of the Preferred Stock and RSUs

Each share of Preferred Stock is redeemable for $1,000 per share, plus all accrued and unpaid dividends thereon. The Company may redeem the Preferred Stock in part or in full at any time and from time to time; provided that the Company must redeem all of the issued and outstanding shares of Preferred Stock on or prior to the sixth anniversary of the Closing Date.

Beginning on the third anniversary of the Closing Date, Tacora has the right to surrender the Series 1 RSUs to the Company for a cash payment in an amount equal to the product of (i) the then fair market value of a share of the Common Stock minus $164.95 (the estimated fair market value of a share of the Common Stock on the Closing Date) multiplied by (ii) the number of Series 1 RSUs then being surrendered to the Company. Tacora has a similar right to surrender the Series 2 RSUs beginning on the sixth anniversary of Closing Date for a cash payment calculated in the same way. Neither the Company nor Tacora possess the right to deliver or demand that the RSUs be settled in Common Stock. The RSUs do not provide Tacora with voting rights or rights to dividend equivalent payments.

The Company concluded the Preferred Stock and RSUs are mandatorily redeemable financial instruments in accordance with ASC 480 and, as such, must be classified as a liability, with preferred annual returns and any changes in redemption value being accrued and recorded as interest expense. The Company measured each of these liabilities at fair value on the Closing Date. As of September 30, 2023, the Company marked each of these financial instruments to the respective redemption value of $13.7 million for the preferred stock and $0.1 million for the RSUs, which is reflected on the consolidated balance sheets. The Company incurred $0.6 million of deferred issuance costs in relation to the issuance of the Preferred Stock, which is presented net of the Preferred Stock liability and will be amortized over the estimated six-year term of the Preferred Stock. The Company did not incur material issuance costs related to the RSUs. As of September 30, 2023, the RSUs do not have any redemption value and the maximum amount payable for the preferred stock is $13.7 million.