Company: TISI
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0000318833-25-000070
Chunk: 115

Company: TEAM INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 115
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 Price (as defined herein) (x) commencing after March 11, 2029, in whole or in part, or (y) after certain change of control transactions or other corporate events, in whole but not in part. Additionally, holders of the Series B Preferred have the right to request the Company to redeem all (but not part) of their shares on or after December 31, 2030, at the then-applicable Redemption Price. Upon redemption, the Company is required to pay the greater of two amounts: either 140% of the Initial Stated Value (applicable only during the first 42 months after issuance and net of any cash returns made), or the Stated Value plus all accrued but uncompounded dividends and undrawn commitment fees.   Accretion Accounting. Since the Series B Preferred Stock is redeemable at the request of the holder beginning December 31, 2030, the Company is accreting the carrying value of the Series B Preferred Stock to its expected redemption value on that date using the effective interest method, specifically Method 2 under ASC 480-10-S99-3A. The redemption value encompasses all compounded PIK dividends and undrawn commitment fees, as well as any accrued but uncompounded returns as of the redemption date. The initial carrying value of the Series B Preferred Stock was $49.0 million, net of allocated issuance costs. The estimated redemption value as of December 31, 2030, assuming all dividends are PIK, is approximately $132.0 million, which includes approximately $57.0 million of PIK dividends and commitment fees. The difference between the initial carrying value and the estimated redemption value is being accreted over the estimated 5.31-year period leading up to the earliest redemption date. The accretion premium is treated as a deemed dividend and is recognized through adjustments to additional paid-in capital.The following table represents the change in carrying value of the redeemable preferred stock during the period ended September 30, 2025:Balance at December 31, 2024$— Additions49,034 Accrued paid-in-kind dividend437 Accrued paid-in-kind commitment fees17 Accretion to redemption value156 Balance at September 30, 2025$49,644 

14. COMMITMENTS AND CONTINGENCIES

         Certain conditions may exist as of the date the financial statements are issued which may result in a loss to the Company and which will only be resolved