Related Party Debt |
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| Related Party Debt | Note 6. Related Party Debt The Company’s related party debt consisted of (in thousands):
Network Service Agreements The Company has entered into certain network service agreements (the “Network Service Agreements” or the “NSAs”) with various customers, pursuant to which the Company will perform or has performed the design, installation, and management of a telecommunications network for the customer in financed project amounts ranging from $50 thousand to $550 thousand (the “Project Financing”). During the three and six months ended June 30, 2026 and 2025, the Company did not enter into any NSAs. The Company notes $0.5 million of the amount financed during 2024 relates to the sales-type lease (see Note 5). As of June 30, 2026 and December 31, 2025, the NSAs had aggregate carrying balances of approximately $1.1 million and $1.3 million, respectively. Repayments on the NSAs are made monthly and range from $21 thousand to $28 thousand. As part of each Project Financing, the Company sold an undivided interest in the NSA, to Endurance Opportunities, and interest shall accrue at a rate of 16.5% per annum, with respect to any payments owed to Endurance Opportunities by the Company, or advances owed to Endurance Opportunities by the Company, not made when due. In exchange, for the financing, the Company and Endurance Opportunities have entered into various participation and agency agreements (the “Participation and Agency Agreements), whereby Endurance Opportunities is granted an undivided participation interest entitling Endurance Opportunities to receive payments in relation to each respective NSA. At any time the Participation and Agency Agreement is outstanding, the Company shall have the right to repurchase Endurance’s interest at par value, with par meaning all outstanding principal, unpaid interest, and fees. If Endurance Opportunities’ interest under these Participation and Agency Agreements remains outstanding twenty four (24) months after the service activation date under each respective NSA, Endurance Opportunities shall have the option to require repurchase by the Company of Endurance Opportunities’ interest, at par value. As a result, at June 30, 2026, certain of the network financing arrangements are fully classified as current due to this provision. Interest expense related to these network service agreements are presented net of interest income received from network financing receivables, which accrues interest income at the same rate as the NSAs. Endurance Loan (April 1, 2024) On April 1, 2024 the Company entered into a fixed rate loan agreement (the “Endurance Loan”) with Endurance Opportunities I LLC (“Endurance Opportunities”), a related party controlled by Endurance Financial LLC (‘Endurance Financial’), which is an entity controlled by certain of the Company’s directors and members of management. Under the agreement, Endurance Opportunities loaned $1.0 million to the Company in exchange for the Endurance Loan. The Endurance Loan had a maturity date of May 1, 2029 and bore interest at 18.0%, compounded annually. Monthly payments were required under the Endurance Loan of $15 thousand through October 2024 and $19 thousand, thereafter through maturity. During the three and six months ended June 30, 2026 and 2025, the Company incurred $0 thousand and $26 thousand of interest expense, respectively, and $0 thousand and $52 thousand of interest expense, respectively, which is recognized in interest expense in the unaudited condensed statements of operations. In connection with the Offering, the Endurance Loan was fully settled prior to December 31, 2025. Endurance Business Loan (November 12, 2024) On November 12, 2024, the Company entered into a fixed rate loan agreement (the “Endurance Business Loan”) with Endurance Opportunities, a related party, where Endurance Opportunities loaned $0.3 million to the Company. The Endurance Business Loan had a maturity date of May 2026 and bore interest at 16.5% per year. During the three and six months ended June 30, 2026 and 2025, the Company incurred $0 thousand and $10 thousand, respectively, and $0 thousand and $21 thousand, respectively, of interest expense, which is recognized in interest expense in the unaudited condensed statements of operations. Endurance Promissory Note (March 1, 2025) On March 1, 2025, the Company entered into a fixed rate loan agreement (the “Endurance Promissory Note”) with Endurance Financial, where Endurance Financial loaned $0.5 million to the Company. The Endurance Promissory Note had a maturity date of eighteen months and bore interest at 16.5%. Quarterly payments of interest were required with outstanding principal amount of the loan due on the maturity date. For the three and six months ended June 30, 2026 and 2025, the Company incurred $0 thousand and $21 thousand, respectively, and $0 thousand and $28 thousand, respectively, of interest expense which is recognized in interest expense in the unaudited condensed statements of operations. In connection with the Offering, the Endurance Promissory Note was fully settled prior to December 31, 2025. Second Endurance Promissory Note (March 25, 2025) On March 25, 2025, the Company entered into a fixed rate loan agreement (the “Second Endurance Promissory Note”) with Endurance Financial, where Endurance Financial loaned $0.5 million to the Company. The Second Endurance Promissory Note had a maturity date of ninety days and bore interest at 16.5%. Monthly payments of interest were required with outstanding principal amount of the loan due on the maturity date. For the three and six months ended June 30, 2026 and 2025, the Company incurred $0 thousand and $20 thousand, respectively, and $0 thousand and $22 thousand, respectively, of interest expense, which is recognized in interest expense in the unaudited condensed statements of operations. On July 7, 2025, the Second Endurance Promissory Note was modified to extend the term of the note an additional 90 days, to September 25, 2025. All other provisions of the loan remained the same. The debt modification was deemed not substantive and was accounted for as a debt modification. On September 24, 2025, the Second Endurance Promissory Note was modified to extend the term of the note to October 31, 2025. All other provisions of the previously modified loan remain the same. The debt modification was deemed not substantive and was accounted for as a debt modification. In connection with the Offering, the Second Endurance Promissory Note was fully settled prior to December 31, 2025. Endurance Business Loan (May 14, 2026) On May 14, 2026, the Company’s entered into the May 2026 Term Loan with Endurance Opportunities. In connection with the May 2026 Term Loan, the Company issued the May 2026 Note in favor of Endurance Opportunities with a principal amount of $500 thousand and agreed to issue three additional commercial promissory notes in favor of Endurance Opportunities, each with a principal amount of $500 thousand. The May 2026 Note has a maturity date of 36 months and bears interest at 15.5% per annum on the outstanding principal balance. Monthly payments of interest are required under the May 2026 Note with the outstanding principal amount of the May 2026 Note due on the maturity date. Each subsequent commercial promissory note issued in accordance with the May 2026 Term Loan will have the same terms and conditions as the May 2026 Note. For the six months ended June 30, 2026, the Company incurred $8 thousand of interest expense which is recognized in interest expense in the unaudited condensed statements of operations. As of June 30, 2026 the future minimum principal payments on all related party debt, excluding accrued interest amounts, were as follows (in thousands):
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