v3.26.1
DEBT
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
DEBT DEBT
A summary of the Company’s debt is as follows (amounts in thousands):
June 30,
2026		December 31,
2025
CRC Senior Notes
$14,523 $14,919 
Cross Trails Credit Agreement16,678 17,806 
Sale of future receipts— 3,058 
Senior Convertible Notes150,000 — 
Convertible Debentures83,000 63,800 
Total outstanding principal264,201 99,583 
Unamortized discount and issuance costs(15,953)(7,862)
Fair value adjustment for Convertible Debentures(5,234)2,877 
Debt, current portion(77,978)(56,628)
Long-term debt$165,036 $37,970 
Interest Expense
The line item, interest expense, on the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025, consists of the following (amounts in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Contractual interest expense$3,240 $1,208 $5,902 $1,226 
Amortization of debt issuance costs895 661 1,536 704 
Amortization of debt discount54 645 215 676 
Interest expense on finance leases3 2 5 5 
Total$4,192 $2,516 $7,658 $2,611 
CRC Senior Notes
On April 4, 2025, Calistoga Resiliency Center, LLC (“CRC”), a subsidiary of the Company, entered into a Note Purchase Agreement, as amended by Amendment No. 1 thereto, dated as of August 4, 2025 (the “CRC Note Purchase Agreement”), with Eagle Point Credit Management, LLC, pursuant to which CRC issued $27.8 million of senior notes (“CRC Senior Notes”). The CRC Senior Notes bear interest at 9.5% per annum and are senior secured obligations of CRC, backed by a first-priority pledge of all CRC assets and equity interests. The CRC Senior Notes include customary affirmative and negative covenants, including minimum cash reserves and a minimum debt service coverage ratio. Principal and interest are payable semi-annually, with installments due each February 28 and August 31, and the CRC Senior Notes mature on April 4, 2032.
On June 26, 2026, CRC, the holders party thereto, and Wilmington Trust National Association, as collateral agent, entered into a Consent, Waiver, and Amendment No. 2 to the CRC Note Purchase Agreement (the “CRC Amendment”). Pursuant to the CRC Amendment, the holders, among other items, (i) consented to a voluntary principal prepayment of the CRC Senior Notes in an aggregate principal amount of approximately $4.1 million, (ii) waived the make-whole amount and related certificate delivery requirements otherwise payable in connection with such prepayment, (iii) consented to the release, withdrawal and transfer of excess reserve amounts for application to such prepayment, (iv) deferred the testing date for the debt service coverage ratio covenant to November 30, 2026, (v) consented to a revised amortization schedule, and (vi) consented to a reduction of the operating reserve requirement.
In connection with the CRC Amendment, the Company agreed to pay an amendment fee of $0.4 million to the holders of the CRC Senior Notes. The Company made the prepayment of principal and accrued interest, and the amendment fee in July 2026. As of June 30, 2026, the $4.1 million principal pre-payment amount was classified as a current liability in the condensed consolidated balance sheet.
The Company evaluated the amendment under ASC 470-50 and concluded that the July 2026 principal prepayment should be accounted for as a debt modification, as the amended terms were not substantially different from the original terms of the continuing debt.
As of June 30, 2026, CRC was in compliance with all covenants then applicable under the CRC Senior Notes.
Cross Trails Credit Agreement
On July 23, 2025, Cross Trails Energy Storage Project, LLC (“Cross Trails”), a subsidiary of the Company, entered into a credit agreement (the “Cross Trails Credit Agreement”) with Wilmington Trust, National Association, as administrative agent and collateral agent, and each of the lenders party thereto.
The Cross Trails Credit Agreement provides for a senior secured term loan facility in an aggregate principal amount of approximately $17.8 million. The Cross Trails Credit Agreement is structured as a single-draw term loan, with the full amount funded on July 23, 2025. The borrowing bears interest, at the Company’s election, at (i) the alternate base rate (“ABR”) plus 5.00% or (ii) the term secured overnight financing rate (“SOFR”) plus 6.00%. As of June 30, 2026, the Company was utilizing a SOFR of 3.6%, resulting in an interest rate of 9.6%.
Principal and interest are payable semi-annually, with installments due each February 28 and August 31, beginning on February 28, 2026. The Cross Trails Credit Agreement matures on July 23, 2032.
On June 29, 2026, Cross Trails entered into a Waiver, Consent and Amendment No. 1 to the Cross Trails Credit Agreement (the “Cross Trails Consent”) with the lenders. Pursuant to the Cross Trails Consent, the lenders waived any default or event of default under the Cross Trails Credit Agreement arising from Cross Trails’ failure to comply with the debt service coverage ratio requirements for the quarters ended March 31, 2026 and June 30, 2026, and consented to Cross Trails’ application of cash equity contributions from Energy Vault, Inc. in the aggregate amount of $1.2 million, together with a historical revenue credit related to insurance proceeds reasonably expected to be received, to cure the debt service coverage ratio noncompliance.
The amendment also added a prospective equity cure right under which Cross Trails may receive cash equity contributions from the project sponsor or its direct or indirect owners to cure future financial covenant noncompliance, subject to certain limitations. The cure right may be exercised up to four times during the term of the Cross Trails Credit Agreement and once in consecutive fiscal quarters; however, the cure of the March 31, 2026 and June 30, 2026 debt service coverage ratio noncompliance does not count toward the four permitted cure exercises. The amendment provides that the cure right may not be used for the quarter ending September 30, 2026.
As a result of the waiver, consent and amendment, the debt service coverage ratio noncompliance did not result in an event of default or acceleration of amounts outstanding under the Cross Trails Credit Agreement. As of June 30, 2026, the Company classified the outstanding balance under the Cross Trails Credit Agreement based on the contractual payment terms of the amended agreement.
Sale of Future Receipts
On August 29, 2025, the Company, together with Energy Vault, Inc., its wholly-owned subsidiary (collectively with the Company, the “Sellers”) entered into an agreement of sale of future receipts (the “Cedar Arrangement”) with Cedar Advance LLC (“Cedar”). Cedar paid a purchase price of $5.0 million, from which $0.5 million of origination fees were deducted, resulting in net proceeds of $4.5 million. Under the agreement, the Sellers remit to Cedar $0.2 million per week, or approximately 27.0% of future receivables collections, until Cedar has received an aggregate amount equal to (i) $5.1 million if fully repaid within 30 days of funding, (ii) $5.2 million if fully repaid after 30 days but within 60 days of funding, or (iii) $6.3 million if not fully repaid within 60 days of funding.
The Company did not fully repay the Cedar Arrangement within 60 days of funding, therefore the applicable aggregate amount remitted to Cedar was $6.3 million. As of June 30, 2026, the Company had remitted the full $6.3 million to Cedar, and no amounts remained outstanding.
Senior Convertible Notes
On February 17, 2026, the Company completed a private offering of $140.0 million aggregate principal amount of Senior Convertible Notes due 2031 (the “Senior Convertible Notes”). On February 27, 2026, the Company issued an additional $10.0 million aggregate principal amount of Senior Convertible Notes pursuant to the initial purchasers’ option. The Senior Convertible Notes bear interest at 5.250% per annum, payable in cash semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2026, and mature on March 1, 2031, unless earlier converted, redeemed or
repurchased. After deducting the 3.25% initial purchasers’ discount, which was accounted for as debt issuance costs, the Company received net proceeds of $145.1 million from the issuance of the Senior Convertible Notes.
The Senior Convertible Notes are convertible prior to the close of business on the business day immediately preceding September 1, 2030 only upon the occurrence of specified events and during certain periods set forth in the indenture. On or after September 1, 2030, the Senior Convertible Notes are convertible at any time until the close of business on the second trading day immediately preceding the maturity date. The Senior Convertible Notes initially are convertible at a rate of 193.1807 shares of the Company’s common stock per $1,000 principal amount of Senior Convertible Notes, which is equivalent to an initial conversion price of approximately $5.18 per share, subject to customary anti-dilution and other adjustments. Upon conversion, the Company may settle the conversion obligation in cash, shares of common stock, or a combination of cash and shares, at its election. In addition, holders who convert their Senior Convertible Notes in connection with certain make-whole fundamental changes or notices of redemption may be entitled to an increase in the conversion rate, subject to a maximum conversion rate of 246.3054 shares per $1,000 principal amount.
The Company may redeem the Senior Convertible Notes for cash, in whole or in part, at its option on or after March 5, 2029, but only if a liquidity condition is satisfied and the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price is equal to 100% of the principal amount of the Senior Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon the occurrence of a fundamental change, holders may require the Company to repurchase all or any portion of their Senior Convertible Notes for cash at a price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Company evaluated the accounting for the Senior Convertible Notes under ASC 470-20, Debt—Debt with Conversion and Other Options, and ASC 815, Derivatives and Hedging. The Company concluded that the embedded conversion feature qualifies for the scope exception in ASC 815-40 and therefore does not require separate accounting as a derivative. Accordingly, the Company accounts for the Senior Convertible Notes as a single debt instrument at amortized cost. The Company also identified certain additional-interest provisions that are required to be bifurcated from the host contract as those features are not clearly and closely related to the host convertible debt contract. The fair value of these additional-interest features was determined to be de minimis; therefore, the Company did not recognize a separate derivative asset or liability in connection with this transaction.
In connection with the issuance of the Senior Convertible Notes, the Company also entered into capped call transactions with certain option counterparties. The capped call transactions have an initial strike price of approximately $5.18 per share, consistent with the initial conversion price of the Senior Convertible Notes, and an initial cap price of $8.12 per share, which represents a premium of 100% above the $4.06 closing price of the Company's common stock on February 11, 2026. The capped call transactions are intended to reduce potential dilution to the Company's common stock upon any conversion of the Senior Convertible Notes, and/or offset any cash payments the Company is required to make in excess of the principal amount upon conversion, with such reduction and/or offset subject to a cap based on the cap price.
The capped call transactions are separate freestanding instruments and are accounted for independently from the Senior Convertible Notes. The $20.5 million in premiums paid for the capped call transactions were recorded as a reduction to additional paid-in capital and were not included in the carrying amount of the Senior Convertible Notes.
As of June 30, 2026, the Senior Convertible Notes had unamortized debt issuance costs of $9.1 million, and the net carrying amount was $140.9 million. For the three and six months ended June 30, 2026, total interest expense from the Senior Convertible Notes was $2.5 million and $3.6 million, respectively, consisting of $2.0 million and $2.9 million, respectively, of contractual interest and $0.5 million and $0.7 million, respectively, of amortization of debt issuance costs. The effective interest rate for the Senior Convertible Notes is 6.9%.
Convertible Debentures (collectively, the 2025 and 2026 Debentures)
2025 Debentures
On September 22, 2025, the Company entered into a securities purchase agreement (“2025 Securities Purchase Agreement”) with YA II PN, Ltd. (the “Investor”), pursuant to which the Company agreed to issue senior unsecured convertible debentures in multiple tranches (the “2025 Debentures”). On December 30, 2025, the agreement was amended to increase the aggregate principal amount available under the facility from $50.0 million to $65.0 million. The initial tranche of $30.0 million (“Tranche 1”) was funded on September 22, 2025, the second tranche of $20.0 million (“Tranche
2”) was funded on December 16, 2025, and the third tranche of $15.0 million (“Tranche 3”) was funded on December 30, 2025.
All three tranches bear or bore interest at 7.0% per annum. Installment payments of principal and interest are due monthly (each, a “Payment Date,” beginning on the applicable payment commencement date). For each installment, the Company may (i) pay cash plus a payment premium equal to 7.0% for Tranches 1 and 2 or 4.0% for Tranche 3 of the principal portion paid (“Payment Premium”), (ii) elect to allow the Investor to convert the unpaid installment at a price equal to the lower of (A) the Applicable Fixed Price (defined below) or (B) 97% of the lowest daily VWAP during the four trading days immediately preceding the conversion date, but not below the Floor Price (equal to $0.60 per share), or (iii) satisfy the installment through a combination of cash and conversion. The fixed conversion price is $4.50 per share for Tranche 1, $7.53 per share for Tranche 2, and $7.41 per share for Tranche 3.
Tranche 1 is scheduled to mature on March 22, 2027. Tranche 2 was scheduled to mature on March 22, 2027, and Tranche 3 was scheduled to mature on August 30, 2027. During the six months ended June 30, 2026, the Company partially repaid Tranche 1 and fully repaid Tranches 2 and 3. As of June 30, 2026, $3.0 million of principal remained outstanding under the 2025 Debentures, all of which was subject to conversion notices issued to the Investor that have not yet been exercised.
2026 Debentures
On May 18, 2026, the Company entered into a separate securities purchase agreement (“2026 Securities Purchase Agreement”) with the Investor, pursuant to which the Company issued a senior secured convertible debenture in the original principal amount of $42.0 million. The debenture was issued at 95% of principal, and the Company received net proceeds of $39.5 million after deductions for original issue discount and fees.
On June 29, 2026, the Company entered into an amendment to the 2026 Securities Purchase Agreement with the Investor. The amendment increased the maximum aggregate principal amount of convertible debentures issuable under the 2026 Securities Purchase Agreement from $75.0 million to $150.0 million and provided for the issuance of an amended and restated senior secured convertible debenture in the outstanding principal amount of $80.0 million (the “2026 Debentures”), consisting of the original $42.0 million principal amount issued on May 18, 2026 and an additional principal amount of $38.0 million issued on June 29, 2026.
The additional principal amount was issued at 95% of principal for a purchase price of $36.1 million. After deductions for a structuring fee and legal fee reimbursements, the Company received net proceeds of $34.6 million from the additional principal amount. The 2026 Debentures are secured by assets of the Company, Energy Vault, Inc. and certain of the Company’s subsidiaries.
The 2026 Debentures bear interest at 7.5% per annum, or 18.0% upon an uncured event of default, and mature on July 1, 2027. Under the amended and restated redemption schedule, interest-only installments are due in June and July 2026, and monthly principal installments begin on August 29, 2026.
For each installment, the Company may (i) pay cash, (ii) if certain conditions are satisfied, elect to allow the Investor to convert the unpaid installment into shares of the Company’s common stock at a conversion price equal to 97% of the lowest daily VWAP during the four consecutive trading days immediately preceding the conversion date, subject to a floor price of $1.19 per share for the initial tranche, or (iii) satisfy the installment through a combination of cash and conversion. Investor conversions are subject to a beneficial ownership limit of 4.99% of the Company’s common stock and to a limit of 19.99% of the Company’s outstanding common stock as of closing unless stockholder approval to exceed such cap is obtained in accordance with the rules and regulations of the NYSE.
The 2026 Debentures include certain amortization event provisions. An amortization event includes, among other things, (i) the Company’s common stock trading below the floor price for 5 of 7 consecutive trading days, (ii) issuance of more than 99% of the shares available under the exchange cap without stockholder approval, or (iii) from any time after the six-month anniversary of issuance, the Investor being unable to sell its shares pursuant to Rule 144. While an amortization event is in effect, the monthly installment must be paid in cash and the installment amount may increase to the greater of the scheduled amount and 20.0% of then-outstanding principal.
The 2026 Debentures also include mandatory redemption provisions based on the borrowing base. A mandatory redemption event occurs if the aggregate principal amount outstanding under the 2026 Debentures exceeds the applicable percentage of the borrowing base adjusted amount. Mandatory redemption amounts are required to be paid in cash.
As of June 30, 2026, $80.0 million of principal remained outstanding under the 2026 Debentures.
Fair Value Option for Convertible Debentures
The Company elected the fair value option afforded by ASC 825 with respect to the Convertible Debentures because they include features that meet the definition of embedded derivatives. The Company initially recognized the Convertible Debentures at fair value and subsequently remeasures them at fair value, with changes in fair value recognized in the condensed consolidated statements of operations and comprehensive loss, except for changes attributable to instrument-specific credit risk, if any, that are required to be presented in other comprehensive income. The Convertible Debentures are measured at fair value on a recurring basis and are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs.
The following table presents a rollforward of the fair value of the Convertible Debentures for the periods presented, including issuances, cash settlements, and the components of earnings that impacted the fair value during the period.
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Convertible Debentures, beginning balance$6,235 $— $66,677 $— 
Issuances at fair value74,093 — 74,093 — 
Change in fair value (1)
361 — 195 — 
Interest expense (stated interest rate) (2)
434 — 1,031 — 
Loss on partial debt extinguishment - cash settlements (3)
24 — 3,832 — 
Loss on partial debt extinguishment - installment conversions (3)
155 — 1,538 — 
Cash settlements (inclusive of accrued interest and cash payment premium)(2,219)— (55,846)— 
Fair value of common shares issued for installment conversions(1,317)— (13,754)— 
Convertible Debentures, ending balance$77,766 $— $77,766 $— 
__________________
(1) Recognized within the line item, change in fair value of financial instruments carried at fair value, in the condensed consolidated statement of operations and comprehensive loss.
(2) Recognized within the line item, interest expense, in the condensed consolidated statement of operations and comprehensive loss.
(3) Recognized within the line item, other expense, net, in the condensed consolidated statement of operations and comprehensive loss.
Debt Maturity
The following table summarizes the cash maturities of the Company’s debt instruments as of June 30, 2026 (amounts in thousands):
20262027202820292030ThereafterTotal
CRC Senior Notes$4,122 $535 $668 $810 $950 $7,438 $14,523 
Cross Trails Credit Agreement1,692 2,941 1,541 1,967 1,699 6,838 16,678 
Senior Convertible Notes— — — — — 150,000 150,000 
Convertible Debentures35,670 47,330 — — — — 83,000 
$41,484 $50,806 $2,209 $2,777 $2,649 $164,276 $264,201