Shareholder's Equity

9 Months Ended

Sep. 30, 2024

Stockholders' Equity Note [Abstract]

Shareholder's Equity

10. Shareholder’s Equity

Preferred Stock

On August 30, 2024, the Company redeemed all of the $6.0 million of its outstanding Series A Preferred Stock (the "Preferred Stock"). The Company incurred a redemption premium of $397,000, and recorded the premium as additional dividends paid on the Preferred Stock. The redemption premium reduced the Company's net income allocable to common shareholders.

The Preferred Stock was originally issued on December 20, 2023, through a private placement of 1,000 shares priced at $6,000 per share that matured on June 30, 2026. The Preferred Stock was sold to Clarkston 91 West LLC (the "Purchaser"), an entity affiliated with Gerald and Jeffrey Hakala, members of the Board of Directors of the Company. Preferred Stock shareholders had no voting rights and optional redemption was only in the control of the Company.

The Preferred Stock required quarterly dividend payments at a rate equal to the prime rate of Waterford Bank, N.A. ("Waterford Bank"), or 8.0%, whichever is higher, plus 200 basis points. As of September 30, 2024, this equated to an annualized rate of 10.5%. The Company paid $502,000 and $817,000 in dividends on the Preferred Stock for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2024 and December 31, 2023, the Company had 0 and 1,000 issued and outstanding shares of Preferred Stock, respectively.

Common Stock

As of September 30, 2024 and December 31, 2023, the Company had 12,222,881 issued and outstanding shares of common stock, respectively. Holders of common stock are entitled to one vote per share and to receive dividends only when and if declared by the board of directors. The holders have no preemptive, conversion or subscription rights.