CONVERTIBLE AND REDEEMABLE PREFERRED STOCK

9 Months Ended

Sep. 30, 2025

CONVERTIBLE AND REDEEMABLE PREFERRED STOCK

NOTE 14. CONVERTIBLE AND REDEEMABLE PREFERRED STOCK

Convertible and Redeemable Preferred Stock

Prior to the March 28, 2025 initial public offering, the Company had outstanding Convertible and Redeemable Preferred Stock, which converted in connection with the initial public offering. The conversion included accumulated dividends on the Redeemable Preferred Stock except for those shares held by two preferred stockholders who elected to receive their accumulated dividends in cash on the initial public offering date. As of September 30, 2025, the Company does not have Convertible and Redeemable Preferred Stock outstanding.

Convertible and Redeemable Preferred Stock as of December 31, 2024 (71,034 total shares authorized and all classes are $0.001 par value per share) was as follows. The conversion prices and conversion ratios presented in this footnote have not been adjusted for the stock split disclosed in Note 1. Nature of Business:


Series	Shares Authorized	Shares Issued and Outstanding	Per Unit Issue Price		December 31, 2024 Conversion Price		Liquidation Preference		Carrying Amount
Series A	3,965	611	$	22,500	$	22,500	$	13,747,500	$	14,726,570
Series A (with redemption rights)	35	35	$	22,500	$	22,500	787,500		1,296,850
Series A-1	2,445	1,222	$	20,451	$	20,451	25,000,000		32,147,260
Series A-2	3,176	2,647	$	18,891	$	18,891	50,000,000		50,000,000
Series A-3	1,413	1,060	$	23,619	$	23,619	25,036,140		30,406,221
Series B	60,000	27,612	$	5,000	$	50,741	138,060,000		86,742,045
	71,034	33,187					$	252,631,140	$	215,318,946

Prior to the March 28, 2025 initial public offering, the Company’s Series A convertible preferred stock was classified as mezzanine equity and Series B convertible preferred stock was classified as permanent equity in the Company's condensed consolidated financial statements.

The Company measured the preferred stock where redemption was probable at its maximum redemption value plus dividends not declared or paid but which would be payable upon redemption. On December 31, 2024, the preferred stock was remeasured, resulting in a maximum redemption value of $128.6 million and accretion of $12.8 million, included in Accumulated Deficit on the condensed consolidated balance sheets as of December 31, 2024.

The Series B preferred stock included certain redemption rights that were solely in the control of the Company, including redemption upon sale or liquidation of the Company, and an in-substance redemption feature associated with the conversion terms of the Series B preferred stock upon IPO. The stock was recorded in permanent equity on the condensed

consolidated balance sheets as of December 31, 2024. The redemption features were bifurcated as an embedded derivative and were accounted for as a derivative liability on the condensed consolidated balance sheet. The fair value of the embedded derivative was estimated using a scenario-based discounted cash flow method. The valuation methodology included assumptions and judgments regarding discount rates and timing of conversion, which were primarily level 3 assumptions. The embedded derivative was measured at fair value on a recurring basis and any changes in fair value in a subsequent period were be recorded to other income (expense). For the nine months ended September 30, 2025, the Company recognized a loss of $6.1 million in fair value adjustments in other, net on the unaudited condensed consolidated statements of operations and comprehensive (loss) income related to the change in net fair value between the beginning of the year and the conversion of the Series B preferred stock upon IPO. For the three and nine months ended September 30, 2024, the Company recognized a loss of $0.9 million in fair value adjustments in other, net on the unaudited condensed consolidated statements of operations and comprehensive (loss) income.

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