v3.26.1
Debt Obligations
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Debt Obligations Debt Obligations
The Company’s debt obligations as of March 31, 2026 and December 31, 2025 were as follows: 
SuccessorPredecessor
 March 31, 2026December 31, 2025
 (in thousands)(in thousands)
2028 Notes (1)
$— $300,000 
Prepetition ABL Facility— 63,311 
Exit ABL Facility90,439 — 
Short-term debt (2)
3,978 6,310 
Total debt before deferred financing costs$94,417 $369,621 
Deferred financing costs— (21,739)
Total debt$94,417 $347,882 
Less: Current portion of long-term debt(3,978)(6,310)
Long-term debt$90,439 $341,572 
(1)Reclassified to Liabilities Subject to Compromise in the Company’s Condensed Consolidated Balance Sheet as of the Petition Date. On the Petition Date, the Company ceased making interest payments and accruing interest expense on the 2028 Notes.
(2)The weighted average interest rate of short-term debt outstanding was 7.2% at both March 31, 2026 and December 31, 2025.
Units Offering and 2028 Notes
Units
On January 30, 2023, the Company completed its public offering of 300,000 units with an aggregate stated amount of $300.0 million (the “Units”). Each Unit consisted of $1,000 principal amount of the Company’s 2028 Notes and five shares of common stock of the Company. The Company received proceeds of $279.8 million from the Units offering, after deducting underwriting discounts and commission, which was used to fund a portion of the redemption price of previously issued debt. These proceeds were allocated to the 2028 Notes and the common stock based on their relative fair value at the time of issuance. Each Unit separated into its constituent securities (the 2028 Notes and shares of common stock) automatically on October 27, 2023.
In the first quarter of 2023, the Company recorded approximately $41.7 million of deferred financing costs in connection with the Units offering. These costs were direct deductions from the carrying amount of the 2028 Notes and were being amortized through interest expense through the maturity date of the 2028 Notes using the effective interest method. Any unamortized deferred financing costs were written off to “Reorganization items, net” at the Petition Date.
2028 Notes
On January 30, 2023, the Company and certain of its subsidiaries entered into an indenture, dated as of January 30, 2023 (the “Indenture”), with U.S. Bank Trust Company, National Association, as the trustee and as notes collateral agent, pursuant to which the 2028 Notes were issued. The 2028 Notes were to mature on February 1, 2028 and bore interest at an annual rate of 13.000% payable in cash semi-annually in arrears on each of February 1 and August 1, commencing August 1, 2023. The 2028 Notes were senior secured obligations of the Company and were guaranteed on a senior secured basis by each of the Company’s current domestic subsidiaries and were so guaranteed by certain future subsidiaries, in each case, subject to agreed guaranty and security principles and certain exclusions.
Pursuant to the Plan, on the Plan Effective Date, the obligations of the Company Parties under the Indenture were terminated, the 2028 Notes were canceled, and the Company issued 100% of a single class of common equity interests (consisting of 13,949,990 shares of new common stock) to the holders of the 2028 Notes.
Prepetition ABL Facility
On May 1, 2025, the Company entered into the Prepetition ABL Loan and Security Agreement with White Oak Commercial Finance, LLC, as agent, and the lenders from time to time party thereto. The Prepetition ABL Loan and Security Agreement provided for an asset-based revolving credit facility (the “Prepetition ABL Facility”) with lender commitments of $125.0 million (the “Prepetition Maximum Revolving Facility Amount”) and a sub-limit of $5.0 million for letters of credit, which were to mature on the earlier of (i) May 1, 2028 and (ii) the date that was 91 days prior to the maturity date of the 2028 Notes. The outstanding balance of the borrowings under the Prepetition ABL Facility could not exceed in the aggregate at any time the lesser of (a) the Prepetition Maximum Revolving Facility Amount reduced by certain customary reserves and (b) the borrowing base, which was calculated on the basis of eligible accounts and inventory. The Prepetition Maximum Revolving Facility Amount could increase from time to time pursuant to an uncommitted accordion by an aggregate amount for all such increases not to exceed $50.0 million. Borrowings under the Prepetition ABL Facility bore interest at a per annum rate equal to the term-specific Term Secured Overnight Financing Rate (“SOFR”) for an interest period of one month, subject to a 1.50% floor, plus an applicable margin of 4.00% to 4.50%, depending on the Company’s fixed charge coverage ratio.
On May 1, 2025, the Company borrowed approximately $48.9 million under the Prepetition ABL Facility and used such proceeds to repay all borrowings outstanding under the existing credit facility and pay fees and expenses associated with the entry into the Prepetition ABL Loan and Security Agreement.
The Prepetition ABL Loan and Security Agreement contained customary representations and warranties, events of default, and various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the Prepetition ABL Loan and Security Agreement contained a financial covenant requiring a minimum fixed charge ratio of 1.10 to 1.00 that was tested quarterly when the availability under the Prepetition ABL Facility was less than $10.0 million. This financial covenant applied until the availability exceeded such threshold for 30 consecutive days.
The Company’s obligations under the Prepetition ABL Facility were secured by a first priority security interest in substantially all tangible and intangible assets of the Company and all of its current domestic and Canadian subsidiaries.
Pursuant to the Plan, on the Plan Effective Date, the obligations of the Company Parties under the Prepetition ABL Loan and Security Agreement were terminated. Also pursuant to the Plan, the Prepetition ABL Lenders provided the Company Parties with the DIP ABL Facility, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement, which converted into the Exit ABL Facility on the Plan Effective Date.
DIP ABL Facility
On February 3, 2026, the Bankruptcy Court, on an interim basis, approved the DIP ABL Facility and the Company Parties entered into the DIP Loan and Security Agreement with White Oak Commercial Finance, LLC, as agent (the “DIP Agent”), and the DIP Lenders, which provided the Company Parties with a senior secured super-priority-asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount (the “DIP Maximum Revolving
Facility Amount”) of revolving credit commitments, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement. A portion of the DIP ABL Facility, not in excess of $5.0 million, was available for the issuance of standby letters of credit.
Borrowings under the DIP ABL Facility were subject to a borrowing base. The outstanding balance of the borrowings under the DIP ABL Facility could not exceed in the aggregate at any time the lesser of (i) the DIP Maximum Revolving Facility Amount reduced by certain customary reserves and (ii) the borrowing base, which was calculated on the basis of eligible accounts and inventory. In particular, the borrowing base was equal to: (a) 92.5% of the aggregate amount of eligible U.S. and Canadian billed accounts receivable, plus (b) the lesser of (x) 85% of the aggregate amount of eligible U.S. and Canadian unbilled accounts receivable and (y) $6 million, plus (c) the lesser of (x) 50% of the aggregate amount of eligible billed non-U.S. and non-Canadian accounts receivable and (y) $3 million, plus (d) the lower of cost or market value of eligible inventory, multiplied by the lesser of (x) 70% and (y) 85% of the appraised net orderly liquidation value divided by the book value in respect of such inventory, and, in the case of inventory constituting raw materials, not to exceed a maximum sublimit of $1 million, plus (e) the lesser of (x) $10 million and (y) an amount equal to 10% of the borrowing base, minus (f) the aggregate amount of reserves, if any, established by the DIP Agent.
Borrowings under the DIP ABL Facility bore interest at a per annum rate equal to the term-specific SOFR for an interest period of one month, subject to a 1.50% floor, plus an applicable margin of 4.00%.
The maturity date of the DIP ABL Facility was the earlier of the Plan Effective Date and 120 days after the Petition Date, subject to earlier termination upon the occurrence of certain events specified in the DIP Loan and Security Agreement. The proceeds of the DIP ABL Facility were used for (i) working capital and corporate purposes of the Company Parties, (ii) bankruptcy-related costs and expenses in respect of the Chapter 11 Cases, (iii) costs and expenses related to the DIP ABL Facility, and (iv) refinancing of obligations under the Prepetition ABL Loan and Security Agreement.
The DIP Loan and Security Agreement contained certain representations and warranties, events of default, and various affirmative and negative covenants that are customary for debtor-in-possession loan agreements of this type, including limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments and investments (including acquisitions). In addition, the DIP Loan and Security Agreement contained certain financial covenants, including a minimum excess availability of not less than $5.0 million.
The Company’s obligations under the DIP ABL Facility were secured by a first-priority security interest in substantially all tangible and intangible assets of the Company and all of its current domestic and Canadian subsidiaries, subject to, among other things, customary bankruptcy-related exceptions including certain carve-outs for administrative and professional fee payments arising in connection with the Chapter 11 Cases.
Exit ABL Facility
On the Plan Effective Date, pursuant to the Plan, the Company entered into the Exit Loan and Security Agreement with White Oak Commercial Finance, LLC, as agent, and the lenders from time to time party thereto, and on the terms and subject to the conditions set forth therein, each DIP Lender exchanged and converted on a cashless basis all of its loans under the DIP Loan and Security Agreement for loans under the Exit Loan and Security Agreement.
A portion of the Exit ABL Facility not in excess of $5.0 million is available for the issuance of standby letters of credit. The Company Parties’ obligations under the Exit ABL Facility are secured by a first-priority security interest in substantially all of their tangible and intangible assets, including all machinery and equipment, and are guaranteed by certain of the Company’s existing and future domestic and Canadian subsidiaries.

The Exit Loan and Security Agreement provides for a first priority senior secured asset-based revolving credit facility consisting of $135.0 million in aggregate principal amount of revolving credit commitments. A portion of the Exit ABL Facility not in excess of $5.0 million is available for the issuance of standby letters of credit. The Company’s obligations under the Exit ABL Facility are secured by a first-priority security interest in substantially all of the Company’s tangible and intangible assets, including all machinery and equipment, and are guaranteed by certain of the Company’s existing and future domestic and Canadian subsidiaries.
Borrowings under the Exit ABL Facility are subject to a borrowing base. The outstanding balance of the borrowings under the Exit ABL Facility may not exceed in the aggregate at any time the lesser of (i) $135.0 million (the “Exit Maximum Revolving Facility Amount”) reduced by certain customary reserves and (ii) the borrowing base, which is calculated on the basis of eligible accounts, inventory, machinery and equipment, and, at the Company Parties’ election, certain real property assets of the Company Parties. In particular, the borrowing base is equal to (a) 92.5% of the aggregate amount of eligible U.S.
and Canadian billed accounts receivable, plus (b) the lesser of (x) 85% of the aggregate amount of eligible U.S. and Canadian unbilled accounts receivable and (y) $6 million, plus (c) the lesser of (“Foreign Accounts Availability”) (x) 50% of the aggregate amount of eligible billed non-U.S. and non-Canadian accounts receivable and (y) $3 million, plus (d) the lower of cost or market value of eligible inventory, multiplied by the lesser of (x) 70% and (y) 85% of the appraised net orderly liquidation value divided by the book value in respect of such inventory, and, in the case of inventory constituting raw materials, not to exceed a maximum sublimit of $1 million, plus (e) the lesser of (“SOFA Availability”) (x) $10 million and (y) an amount equal to 10% of the borrowing base, plus (f) the lesser of (x) the sum of (1) up to 75% of the net orderly liquidation value of eligible machinery and equipment (“M&E Availability”) plus (2) up to 75% of the fair market value of eligible real property owned by certain of the Company Parties (“Real Property Availability”) and (y) $30 million (which amount shall be permanently reduced on a yearly basis based on a 5-year straight line amortization), minus (g) the aggregate amount of reserves, if any, established by the agent under the Exit Loan and Security Agreement. The Real Property Availability is subject to the Company Parties’ election, at their option, to enter into mortgages from time to time in favor of the agent and lenders under the Exit Loan and Security Agreement with respect to their eligible real property assets as well as the satisfaction of other customary eligibility criteria with respect thereto.
Borrowings under the Exit ABL Facility bear interest at a per annum rate equal to the term-specific SOFR for an interest period of one month, subject to a 1.50% floor, plus an applicable margin ranging from 3.50% to 4.00%, depending on the Company’s fixed charge coverage ratio, subject to an additional margin of 0.50% with respect to any revolving loans or letters of credit utilizing any of M&E Availability, Real Property Availability, SOFA Availability, and/or Foreign Accounts Availability.
The maturity date of the Exit ABL Facility is three years after the Plan Effective Date, subject to earlier termination upon the occurrence of certain events specified in the Exit Loan and Security Agreement. The proceeds of the Exit ABL Facility have been used for (i) working capital and general corporate purposes of the Company Parties, (ii) costs and expenses related to the Exit ABL Facility, and (iii) refinancing of all obligations under the DIP ABL Facility.
The Exit Loan and Security Agreement contains certain representations and warranties, events of default, and various affirmative and negative covenants that are customary for asset-based credit facilities of this type, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, and investments (including acquisitions). In addition, the Exit Loan and Security Agreement contains certain financial covenants, including a minimum excess availability of not less than $5.0 million and a minimum fixed charge coverage ratio of 1.10 to 1.00 that will be tested when the excess availability under the Exit ABL Facility is less than the lesser of (a) 7.5% of the lesser of (x) the Exit Maximum Revolving Facility Amount minus reserves and (y) the borrowing base and (b) $9.0 million, which minimum fixed charge coverage ratio would apply until the excess availability is greater than or equal to such threshold for a period of 30 consecutive days.
The Company was in compliance with all covenants contained in the Exit ABL Facility at March 31, 2026.
At March 31, 2026, the Company had $90.4 million outstanding borrowings under the Exit ABL Facility, and its availability under the Exit ABL Facility was approximately $35.7 million. On April 28, 2026, the Company borrowed an additional $5.0 million under the Exit ABL Facility.
Short-Term Debt
From time to time, the Company renews certain insurance policies and finances the premium for its excess policy. The outstanding balance on these premiums was $4.0 million and $6.3 million at March 31, 2026 and December 31, 2025, respectively.
Fair Value of Debt Instruments
The estimated fair value of the Company’s debt obligations at March 31, 2026 and December 31, 2025 was as follows:
SuccessorPredecessor
 March 31, 2026December 31, 2025
 (in thousands)(in thousands)
2028 Notes$— $91,010 
Prepetition ABL Facility$— $63,311 
Exit ABL Facility$90,439 $— 
Short-term debt$3,978 $6,310 
The fair value of the 2028 Notes, Prepetition ABL Facility, Exit ABL Facility, and short-term debt is classified as Level 2 in the fair value hierarchy. The fair value of the 2028 Notes is established based on observable inputs in less active markets. The fair value of the Prepetition ABL Facility, Exit ABL Facility, and short-term debt approximates their carrying value.