DEBT |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT | 13. DEBT On November 25, 2025, the Company entered into a Business Loan Agreement providing for a delayed draw term loan (the “Loan”) to fund the acquisition of a building for use as the Company’s corporate headquarters and primary inventory warehouse. The Loan provides for a 12-month draw period, which commenced in November 2025, during which advances may be made up to the maximum principal amount which was originally set at $8.5 million. During the second quarter of 2026, the Company entered into an amendment to the Business Loan Agreement and related loan documents that, among other things, increased the maximum principal amount of the Loan to $9.3 million. After the draw period concludes in November 2026, no additional advances may be made. Quarterly interest payments began in February 2026, with principal and interest payments commencing in February 2027. Interest during the draw period accrues at a variable rate, calculated as a one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.85%. Following the conclusion of the draw period, the interest adjusts to a fixed rate, determined as the lender’s Tier Cost of Funds (“COF”) plus 1.85%. Principal payments are amortized over a 20-year schedule, with the remaining unpaid principal balance due as a payment upon maturity in November 2036. As of June 30, 2026 and December 31, 2025, the Company had $7.9 million and $6.9 million outstanding under the Loan, respectively. As of June 30, 2026, approximately $0.2 million of the outstanding balance was considered current and classified within accrued expenses and other current liabilities, and the remaining $7.7 million was classified within long-term debt, net, on the condensed consolidated balance sheet. As of December 31, 2025, no portion of the outstanding balance was classified within accrued expenses and other current liabilities. During the three and six months ended June 30, 2026 the Company capitalized $0.1 million and $0.2 million of interest cost, respectively, in connection with construction activities related to its building under construction, which was recorded within property and equipment, net on the condensed consolidated balance sheet. As of June 30, 2026 and December 31, 2025, accrued interest totaled $24 thousand and $41 thousand, respectively, and was included within accrued expenses and other current liabilities on the condensed consolidated balance sheets. The difference between the variable interest rate and the effective interest rate during the three and six months ended June 30, 2026 was not significant. The variable interest rate on the Loan ranged from 5.43% to 5.53% during the three and six months ended June 30, 2026. The Loan is secured by a trust deed covering the corporate headquarters and inventory warehouse, along with associated improvements, fixtures, rents, and related personal property. Additionally, the Loan includes an assignment of rents related to this property. The Loan is guaranteed by the Company pursuant to a commercial guaranty executed in November 2025. Under the amended loan documents, the Company and its consolidated subsidiaries are required to maintain either (i) a minimum fixed charge coverage ratio of 1.25 to 1.00, measured quarterly on a trailing twelve-month basis, or (ii) minimum liquidity held with the lender equal to at least two times the loan balances of 4880 Alpha LLC. Compliance with either covenant satisfies this requirement. Such amendment applies from the date the original Business Loan Agreement was entered into, and the Company was in compliance with the liquidity covenant requirement as of June 30, 2026. As the Loan was issued with an initial variable rate of interest, the Company believes that the fair value of the obligation is approximated by the carrying value of the Loan as of June 30, 2026. The carrying value of the Loan includes the outstanding principal amount, less unamortized debt issuance costs. Therefore, the Company assumes the carrying value of the debt would closely approximate the fair value of the Loan obligation based on Level 2 inputs since the Loan carries a variable interest rate that is based on the one-month Term SOFR during the draw period. The following table presents the schedule of maturities for the Term Loan as of June 30, 2026:
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