17. Subsequent Events On July 6, 2026, the Company entered into a lease agreement for approximately 52,234 rentable square feet of office space in Texas. The lease has an initial term of 102 months and includes a tenant improvement allowance of approximately $3.9 million. Aggregate fixed base rent over the initial lease term is approximately $14.2 million, excluding operating expenses, parking fees, taxes, and other variable payments. The Company will account for the lease in accordance with ASC 842 upon lease commencement. As previously reported in our Current Report on Form 8-K filed with the SEC on July 27, 2026, on July 24, 2026 (the “Closing Date”), Arrow Bidco and certain other subsidiaries of the Company entered into an ABL credit agreement, dated as of July 24, 2026, that provides for new senior secured asset-based revolving credit facility (the "New ABL Facility") with a syndicate of lenders led by JPMorgan Chase Bank, N.A., as Administrative Agent, providing aggregate revolving commitments of up to $660 million, subject to borrowing base availability. The New ABL Facility replaced the Company's existing $175 million asset-based ABL Facility described in Note 8, which was terminated concurrently with the closing of the New ABL Facility. On the Closing Date, Arrow Bidco borrowed $65.7 million to (a) repay in full all outstanding borrowings under the Company’s ABL Facility, which was subsequently terminated, and (b) pay fees and expenses related to the New ABL Facility. The New ABL Facility matures five years after the Closing Date. Capitalized terms used but not defined in this Note 17, Subsequent Events shall have the meanings ascribed to such terms in the New ABL Facility. Borrowings under the New ABL Facility, at the Borrowers’ option, bear interest at either (1) the Adjusted Term SOFR Rate or (2) Adjusted Daily Simple SOFR or (3) the Alternate Base Rate, in each case, plus an applicable margin. The applicable margin initially set at 2.50% for Term Benchmark and RFR borrowings, and 1.50% for Alternate Base Rate borrowings. Following the first full fiscal quarter after the Closing Date, pricing will vary based on Arrow Bidco’s Total Leverage Ratio, with applicable margins ranging from 2.25% to 3.00% for Term Benchmark and RFR borrowings and from 1.25% to 2.00% for Alternate Base Rate borrowings. The New ABL Facility provides borrowing availability equal to the lesser of (i) the Aggregate Revolving Commitment and (ii) the Borrowing Base (the “Line Cap”). The Borrowing Base is, at any time of determination, an amount (net of Reserves) equal to the sum of: | ● | 85% of the net book value of the Borrowers’ and the ABL Guarantors’ (collectively, the “Loan Parties”) eligible accounts receivable; plus |
| ● | 85% of the net book value of the Loan Parties’ eligible unbilled accounts receivable (subject to a cap of 5% of total eligible accounts receivable included in the Borrowing Base); plus |
| ● | the lesser of (i) 95% of the net book value of the Loan Parties’ eligible rental equipment and (ii) 80% multiplied by the monthly net orderly liquidation value – in place multiplied by the net book value of the Loan Parties’ eligible rental equipment; plus |
| ● | 25% of the net book value of the Loan Parties’ idle rental equipment (subject to a cap of 7.5% of the total Borrowing Base); plus |
| ● | 100% of Qualified Cash (subject to a cap of 10% of the total Borrowing Base); minus |
Proceeds of the New ABL Facility can be used to finance the working capital needs and for general corporate purposes of Arrow Bidco and its Restricted Subsidiaries in the ordinary course of business, including Capital Expenditures, and for any other purpose not prohibited by the New ABL Facility. The New ABL Facility also includes borrowing capacity available for letters of credit of up to $100 million and for swingline loan borrowings of up to $50 million. Any issuance of letters of credit or making of a swingline loan will reduce the amount available under the New ABL Facility. In addition, the New ABL Facility provides the Borrowers with the option to increase commitments under the New ABL Facility in an aggregate amount such that total commitments do not exceed $850 million, subject to certain conditions. The obligations of the Borrowers under the New ABL Facility and certain of their obligations under hedging arrangements and cash management arrangements are guaranteed by the Company and each Material Subsidiary that is not an Excluded Subsidiary (together with the Company, the “ABL Guarantors”). The New ABL Facility is secured by a first priority security interest in substantially all of the assets of the Borrowers and the ABL Guarantors, including a pledge of the equity interests of their respective subsidiaries (in each case, subject to customary exceptions and limitations set forth in the Collateral Documents). The New ABL Facility requires the Borrowers to maintain (i) a minimum fixed charge coverage ratio of 2.50:1.00, (ii) a maximum first lien secured leverage ratio of 3.00:1.00 (stepping down to 2.50:1.00 commencing with the fiscal quarter ending September 30, 2028) and (iii) a maximum total leverage ratio of 4.00:1.00, in each case calculated in accordance with the definitions and methodologies set forth in the New ABL Facility and tested as of the last day of each fiscal quarter commencing with the first full fiscal quarter ending after the Closing Date. The New ABL Facility also contains a number of customary negative covenants. Such covenants, among other things, limit or restrict the ability of each of the Borrowers, their restricted subsidiaries, and where applicable, the Company, to: | • | incur additional indebtedness and issue guarantees; |
| • | engage in mergers, consolidations or fundamental changes; |
| • | sell or dispose of assets; |
| • | pay dividends, distributions or make other restricted payments and make certain payments of indebtedness; |
| • | make investments, loans, advances, guarantees and acquisitions; |
| • | enter into transactions with affiliates; |
| • | enter into sale and leaseback transactions; |
| • | enter into swap agreements; |
| • | enter into certain restrictive agreements; |
| • | amend material documents, including organizational documents and master lease documents; |
| • | create or acquire additional subsidiaries; |
| • | change the conduct of its business; and |
| • | enter into supply chain financing arrangements and off-balance sheet financing. |
The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments, restricted payments, and prepayments of indebtedness subject, in each case, to compliance with certain financial metrics and certain other conditions (including, in certain cases, satisfaction of “Payment Conditions” requiring minimum excess availability of the greater of 15% of the Line Cap and $40 million, pro forma compliance with financial covenants, and the absence of any default or event of default) and (ii) a number of other traditional exceptions that grant the Borrowers continued flexibility to operate and develop their businesses. The New ABL Facility also contains certain customary representations and warranties, affirmative covenants and events of default.In connection with the closing of the New ABL Facility, the Company incurred approximately $12.2 million of debt issuance costs. These costs are expected to be capitalized as deferred financing costs and amortized to interest expense over the contractual term of the New ABL Facility using a method consistent with the Company's accounting treatment of deferred financing costs associated with the ABL Facility. In addition, the Company expects to recognize during the third quarter of 2026 a write-off of the portion of the unamortized deferred financing costs associated with the ABL Facility for lenders that did not participate in the New ABL Facility.
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