DEBT |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
| DEBT | DEBT As of June 30, 2026, the Company did not have any long-term debt. As of December 31, 2025, the Company's long-term debt consisted of the following:
Prior Loan and Security Agreement The Company borrowed the $14.6 million senior term loan (the “2025 Term Loan”) and the $34.0 million mezzanine term loan (the “2025 Mezzanine Loan” and together with the 2025 Term Loan, the "2025 Loans"), under its Third Amended and Restated Loan and Security Agreement and Mezzanine Loan and Security Agreement issued in connection with the acquisition of ISA. The Company’s borrowings were secured by substantially all of the Company’s assets and subjected to customary covenants and reporting requirements. The Company paid interest on both the 2025 Term Loan and the 2025 Mezzanine Loan on the first of each month with the first payment made on January 1, 2026. In connection with the issuance of the 2025 Mezzanine Loan, the Company executed new warrant agreements to issue certain new warrants (the “2025 Bank Warrants”) to the lenders of the Mezzanine Loan (see Note 9 - Bank Warrants). The Third Amended and Restated Loan and Security Agreement and Mezzanine Loan and Security Agreement contained a number of customary representations, warranties, and covenants that, among other things, limited the ability of the Company and its subsidiaries to (subject to certain qualifications and exceptions): create liens and encumbrances; incur additional indebtedness; merge, dissolve, liquidate, or consolidate; make acquisitions, investments, advances, or loans; dispose of or transfer assets; pay dividends or make other payments in respect of its capital stock; amend certain material documents; redeem or repurchase certain debt; make payments on subordinated debt; and engage in certain transactions with affiliates. The 2025 Loan Agreements also contained customary events of default, including, but not limited to: nonpayment of principal, interest, fees, or other amounts; material inaccuracy of a representation or warranty; failure to perform or observe covenants; cross-defaults with certain other indebtedness; bankruptcy and insolvency events; material monetary judgment defaults; and the occurrence of a material adverse change. Upon the occurrence of an event of default (subject, in certain cases, to notice and grace periods), the obligations under the 2025 Loan Agreements could be accelerated. As of June 30, 2026, the covenants were extinguished upon the repayment of the loans discussed below. Debt issuance costs and discounts related to the 2025 Loans were recorded as a reduction of the related debt and were amortized to interest expense using the effective interest method over the expected term of the 2025 Loans. Debt issuance costs consist of direct costs incurred to obtain financings under the Loan Agreements. Amortization of debt discounts and issuance costs was $0.1 million for three months ended June 30, 2026, on the 2025 Loans and is included in interest expense in the accompanying condensed consolidated statement of operations. Amortization of debt discounts and issuance costs was $0.3 million for the six months ended June 30, 2026, on the 2025 Loans and is also included in interest expense in the accompanying condensed consolidated statement of operations. The 2025 Loans were entered in December 2025 and, as such, there was no amortization of debt discounts and issuance costs on the 2025 Loans for both the three and six months ended June 30, 2025. The effective interest rates were 7.18% and 12.34% for 2025 Senior Term Loan and 2025 Mezzanine Loan, respectively. The Company incurred total interest expense on the 2025 Loans of $0.6 million for the three months ended June 30, 2026, which consisted of $0.4 million for 2025 Mezzanine Loan and $0.2 million for 2025 Term Loan. The 2025 Loans were entered in December 2025 and, as such, there was no interest expense for three months ended June 30, 2025. The Company incurred total interest expense on the 2025 Loans of $1.9 million for the six months ended June 30, 2026, which consisted of $1.5 million for 2025 Mezzanine Loan and $0.4 million for 2025 Term Loan. The 2025 Loans were entered in December 2025 and, as such, there was no interest expense for the six months ended June 30, 2025. In connection with the IPO noted in Note 1 - Nature of Business and Basis of Presentation, the Company used $49.5 million of the net proceeds to repay all outstanding borrowings and associated fees under the Loan and Security Agreement, including interest. The repayment of the 2025 Term Loan and the 2025 Mezzanine Loan resulted in a loss of debt extinguishment of $2.7 million, comprising of the remaining unamortized carrying value of the Bank Warrants, debt issuance costs and lender fees, and the contractual final cash payment. 2026 Credit Facility On May 19, 2026, the Company entered into a new senior secured revolving credit agreement (the “2026 Credit Agreement”) with Bank of America, N.A. The 2026 Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $125.0 million (the “Revolving Credit Facility”), maturing on May 19, 2031. Borrowings under the Revolving Credit Facility bear interest at a variable rate equal to, at the Company’s option, either (i) Term SOFR ("Secured Overnight Financing Rate") plus an applicable margin of 2.25% to 3.00% per annum, or (ii) an alternative base rate plus an applicable margin of 1.25% to 2.00% per annum, in each case based on our Total Net Leverage Ratio. A commitment fee ranging from 0.250% to 0.500% per annum applies to unused commitments under the Revolving Credit Facility. The Revolving Credit Facility is guaranteed by each of our existing and future material domestic subsidiaries and is secured by first-priority liens on substantially all of our and the guarantors’ personal property assets and certain equity interests, subject to customary exceptions. The Credit Agreement contains customary affirmative and negative covenants and requires us to maintain compliance with the following financial covenants, each tested quarterly on a trailing four fiscal quarter basis: (i) a maximum Total Net Leverage Ratio as defined by the 2026 Credit Agreement, commencing at 3.5 to 1.00, and (ii) a minimum Interest Coverage Ratio as defined by the 2026 Credit Agreement of 3.00 to 1.00. As of both June 30, 2026, and as of the date of this filing, we have no borrowings outstanding under the Revolving Credit Facility and the entire $125.0 million is available. The Company has recognized commitment fees of $36.5 thousand for the three and six months ended June 30, 2026, related to the Revolving Credit Facility which is included in interest expense in the accompanying condensed consolidated statement of operations. We incurred $1.1 million for the three and six months ended June 30, 2026 of debt issuance costs related to the Revolving Credit Facility, which is included in other long term assets in the accompanying condensed consolidated balance sheet. Amortization of debt discounts and issuance costs was $24.1 thousand for the three and six months ended June 30, 2026 on the Revolving Credit Facility and is included in interest expense in the accompanying condensed consolidated statement of operations. Debt covenants on Revolving Credit Facility The Company's debt instruments contain certain customary affirmative and negative covenants that among other things, limit the Company's ability to incur additional indebtedness, create liens, dispose of assets, distributions or other restricted payments. The Company's credit facilities include financial covenants that requires the borrower to maintain a specified Net Leverage Ratio and Interest Coverage Ratio, as of a specified date in the respective agreement. As of June 30, 2026, the company was in compliance with all covenants related to their respective debt obligations. Letters of Credit The Company maintains collateralized performance bonds in the form of letters of credit for international customers, reported as restricted cash on the condensed consolidated balance sheet. As of June 30, 2026, the Company had four standby letters of credit from Silicon Valley Bank (the "Bank") outstanding, totaling approximately $5.0 million.
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