v3.26.1
DEBT, EQUIPMENT FINANCING AND OTHER LIABILITIES
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
DEBT, EQUIPMENT FINANCING AND OTHER LIABILITIES

NOTE 8 – DEBT, EQUIPMENT FINANCING AND OTHER LIABILITIES

 

Debt

 

We had the following outstanding Notes Payable balance as of March 31, 2026 and December 31, 2025, excluding equipment financing:

 

   March 31, 2026   December 31, 2025 
Principal amount  $8,477   $10,109 
Less: Unamortized debt issuance costs and original issue discount   (1,377)   (2,014)
Total notes payable  $7,100   $8,095 

 

On June 9, 2025, we entered into a note purchase agreement the Lender secured by the assets of Airway Integrated Management Company, LLC, a Colorado limited liability company and a wholly-owned subsidiary of the Company (“AIM”), pursuant to which we agreed to issue and sell to the Lender the Note in an aggregate initial principal amount of $8.3 million, which is payable on or before the date that is 18 months from the issuance date. The initial principal amount includes an original issue discount of $0.7 million and $50 thousand that we agreed to pay to the Lender to cover the Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs. The net proceeds from the Note were $7.5 million.

 

Interest on the Note accrues at a rate of 9% per annum and is payable on the maturity date. The Company may prepay all or a portion of the Note at any time.

 

 

A monitoring fee of 10% of the outstanding balance was charged on the 120-day anniversary of the issuance of the Note (October 7, 2025) to cover Lender’s accounting, legal and other costs incurred in monitoring. The foregoing fee was added to the outstanding balance on the applicable date without any further action by either party.

 

Beginning on the sixth month anniversary of the issuance, the Lender shall have the right to redeem up to $0.6 million of the Note plus any interest accrued thereunder each month by providing written notice delivered to us; provided, however, that if the Lender does not exercise any monthly redemption amount in its corresponding month then such monthly redemption amount shall be available for the Lender to redeem in any further month in addition to such future month’s monthly redemption amount. Upon receipt of any monthly redemption notice, we shall pay the applicable monthly redemption amount in cash to the Lender within three (3) trading days of the Company’s receipt of such monthly redemption notice. As of March 31, 2026 and December 31, 2025, the Lender redeemed $0.7 million and less than $0.1 million, respectively.

 

The Note includes customary event of default provisions, subject to certain cure periods, and provides for a default interest rate equal to the lesser of twenty-two percent (22%) or the maximum rate permitted under applicable law. Upon the occurrence of an event of default, interest would accrue on the outstanding balance of the Note beginning on the date the applicable event of default occurred.

 

On December 5, 2025, we entered into a Note Purchase Agreement with Avondale Capital, LLC, a Utah limited liability company (“Avondale”), pursuant to which we issued and sold to Avondale a Promissory Note in the original principal amount of $2.1 million. The principal amount of the Avondale Note includes an original issue discount of $0.6 million. We also agreed to pay $6,000 to Avondale to cover its legal fees, accounting costs, due diligence, monitoring, and other transaction costs, each of which was added to the principal amount of the Avondale Note, resulting in a purchase price of for the Avondale Note and gross proceeds to us of approximately $1.5 million. The Avondale Note is not convertible into shares of Common Stock or otherwise. Avondale is an affiliate of Streeterville.

 

The Avondale Note does not bear interest and no interest will accrue on the Avondale Note unless an event of default occurs as further described below. We have made weekly payments of approximately $70 thousand beginning on December 12, 2025. The Company may prepay the outstanding amount due under the Avondale Note at any time without penalty. The Company intends used the net proceeds from the Avondale Note Financing for working capital and other general corporate purposes. No placement agent was used in connection with the Avondale Note Financing. As of March 31, 2026, we have paid approximately $1.1 million to Avondale.

 

The Avondale Note is unsecured. In connection with the Avondale Note Financing, the Company has caused Company’s wholly-owned subsidiary, AIM to enter into the Guaranty Agreement, dated December 5, 2025, in favor of Avondale to provide a guarantee of the Company’s obligations to Avondale under the Avondale Note and the other transaction documents.

 

Equipment Financing

 

At March 31, 2026 and December 31, 2025, we had the following outstanding notes payable for equipment financing as follows (in thousands):

 

  

March 31, 2026

   December 31, 2025 
Principal amount  $617   $     753 
Total  $617   $753 

 

 

The maturity of notes payable for equipment financing is as follows (in thousands):

 

Three Months Ended March 31,    
     
2026 (remaining nine months)   158 
2027   211 
2028   151 
2029   49 
2030   31 
Thereafter   17 
      
Total  $617 

 

Interest expense recognized on the condensed consolidated statement of operations was $1.1 million for the three months ended March 31, 2026.

 

Other Liabilities

 

As of March 31, 2026 and December 31, 2025, other liabilities consist of the following (in thousands):

 

   March 31, 2026   December 31, 2025 
Contingent consideration on acquisition of SCN  $1,300   $1,300 
Total  $1,300   $1,300 

 

The fair value of the contingent consideration was determined using a Monte Carlo simulation of potential outcomes. The contingent consideration is payable in the form of restricted Common Stock equal to $1.5 million based on the volume-weighted average price of the Common Stock for the 30 days immediately preceding the date on which such financial milestone is achieved. If the financial milestone is not achieved, the contingent consideration will not be paid. The fair value of the contingent consideration was based on the valuation of their fair values on the Acquisition closing date.

 

This contingent consideration liability is recognized as a liability due to the variability of the potential share settlement and will be remeasured at fair value each reporting period until the contingency is resolved, with changes in fair value recognized in operating expenses. During the year ended December 31, 2025, we did recognize a gain in change in fair value of contingent consideration of approximately $0.1 million. Significant assumptions included a discount rate of 9% as well as projected revenue derived from internal forecasts with a three-month volatility rate of 20%.