Debt |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Debt Disclosure [Abstract] | |
| Debt | Note 3 — Debt
At December 31, 2025, the Company was in default under its prior revolving credit facility with Fifth Third Bank, N.A. (“Fifth Third”), as successor by merger to Comerica Bank, for failing to maintain the required minimum profitability covenant. No borrowings were outstanding at any time under the Fifth Third facility. On May 8, 2026, the Company received notice from Fifth Third that the facility would terminate effective May 20, 2026, and the facility was terminated on that date.
On June 2, 2026, the Company entered into a revolving credit facility (the “CNB Credit Facility”) with CNB that provides for maximum borrowings of $15.0 million and matures on June 5, 2027, unless extended by mutual agreement. During the initial term, borrowings are limited to $2.0 million, and the remaining $13.0 million commitment is restricted. Any borrowings bear interest at the Secured Overnight Financing Rate plus 3.00% (or 6.68% at June 30, 2026). Interest is payable monthly, and all outstanding principal and accrued interest are due at maturity. The CNB Credit Facility is secured by $2.2 million of cash held in a restricted account and by a security interest in all of the Company’s assets (the “Collateral”). Under the CNB Facility, the Company must obtain CNB’s prior written consent in order to take any of the following actions: (a) sell or transfer any of the Company’s assets outside the ordinary course of its business; (b) incur, create, assume, or permit to exist any other indebtedness (subject to certain exceptions); (c) encumber any of the Company’s assets with any liens other than liens in favor of CNB and certain other permitted liens, or (d) remove the Company’s current Chief Executive Officer, President, or Chief Financial Officer. The related loan agreement also includes customary representations and warranties and customary events of default, upon the occurrence of which, after any applicable grace period, CNB would have the ability to accelerate all outstanding advances, terminate the Loan, and exercise remedies with respect to the Collateral.
If the CNB Credit Facility is renewed and CNB makes the remaining $13.0 million commitment available, the Company will be required to maintain a minimum debt service coverage ratio of 1.50, tested quarterly beginning with the first fiscal quarter following such availability. The Company was not subject to this financial covenant as of June 30, 2026. At June 30, 2026, no borrowings were outstanding under the CNB Credit Facility. |