Debt |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt The Company’s outstanding debt, net of debt discounts, consisted of the following (in thousands):
Structural Debt Facility
In December 2022, the Company entered into a Loan and Security Agreement (“Structural Debt Facility”) with Structural Capital Investments III, LP, Structural Capital Investments IV, LP and Series PCI Grove series of Structural Capital Primary Co-Investment Fund, LLC (collectively, “Structural Funds”) and Avenue Sustainable Solutions Fund, L.P. (“Avenue”) (collectively “Structural Lenders”) to borrow $72.0 million which was used primarily to settle previously outstanding obligations with a prior lender. The Structural Debt Facility bore an annual rate of interest at the greater of 15.00% or 7.50% plus the prime rate, payable monthly. Under the agreement, when amounts were prepaid or repaid in full at the maturity date, the Company was contingently obligated to pay additional fees which would allow for Structural Funds and Avenue to reach a Minimum Return, as defined by the agreement.
On July 16, 2024, the Company entered into Amendment No. 2 to the Loan and Security Agreement with Structural Lenders (“Structural Amendment”). The terms of the Structural Amendment provided for certain amendments to the Structural Debt Facility, which were conditioned upon the Company to making a voluntary prepayment upon execution on the outstanding principal balance of the Structural Debt Facility of $42.0 million. The terms of the Structural Amendment also provided for a reduction of the amount of unrestricted cash required to be maintained by the Company. The original maturity date of December 21, 2026 did not change under the Structural Amendment. As the terms of the Structural Debt Facility after the Structural Amendment were not deemed to be substantially different from the original agreement, the Company accounted for the Structural Amendment with debt modification accounting. Issuance costs related to the Structural Amendment were nominal. In November 2024, the Company paid the remaining outstanding balance on the Structural Debt Facility in full, which included a $0.3 million payment to settle the Structural Derivative Liability in full. In connection with the repayment the Company recognized a loss on extinguishment of $5.0 million on the consolidated statement of operations.
On December 21, 2022, in connection with the initial closing of the Structural Debt Facility, the Company issued to Structural Funds, including certain affiliates, and to Avenue a total of 990,000 shares of the Company’s Class A common stock (the “Structural Closing Shares”). The Company recorded a debt discount of $1.1 million related to the issuance of these shares, with a corresponding offset to the Company’s Class A Common Stock and additional paid-in capital. Further, had there been outstanding obligations relating to the Structural Debt Facility on July 21,
2025, the Company was to issue to Structural Funds, including certain affiliates, and to Avenue, additional shares of the Company’s Class A Common Stock (the “Structural Subsequent Shares”).
The Company identified several features within the Structural Debt Facility consisting of the contingent obligation to issue the Structural Subsequent Shares, mandatory and voluntary prepayment features and default interest rate (“Structural Derivative Liability”), which were required to be bifurcated and accounted for as a compound embedded derivative at fair value. The fair value of the Structural Derivative Liability was $7.1 million as of the debt issuance date. Changes in fair value are recognized through the consolidated statements of operations.
Closing costs consisted of $3.3 million in costs directly related to the issuance of the Structural Facility to third parties, issuance of certain Structural Closing Shares amounting to $1.1 million and incurrence of the Structural Derivative Liability amount of $7.1 million.
Siena Revolver
In March 2023, the Company entered into a Loan and Security Agreement (the “Siena Revolver”) with Siena Lending Group, LLC (“Siena”) which permits the Company to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The Company’s borrowing capacity under the Siena Revolver is subject to certain conditions, including the Company’s eligible inventory and accounts receivable balances among other limitations as specified in the agreement. In connection with this facility the Company incurred $1.1 million of debt issuance costs which have been included in other assets on the Company’s consolidated balance sheets and are being amortized through the Siena Revolver’s scheduled maturity date. On July 16, 2024, the Company entered into Amendment No. 1 to Loan and Security Agreement with Siena (“Siena Amendment No. 1”). The Siena Amendment modifies certain terms related to how the Company’s available borrowing capacity is determined and when appraisals are required. The Siena Amendment No. 1 did not modify any other terms related to the Siena Revolver, including maturity date or maximum borrowing capacity. On November 21, 2024, the Company entered into Amendment No. 2 to Loan and Security Agreement with Siena (“Siena Amendment No. 2”, and together with Siena Amendment No. 1, collectively, the “Siena Amendments”). The Siena Amendment No. 2 modifies certain terms related to how the Company’s available borrowing capacity is determined, when appraisals are required and conditions that must be satisfied to consummate acquisitions and pay earn-outs. The Siena Amendment No. 2 also modifies the maturity date to eliminate the requirement that the Siena Revolver be coterminous with the Structural Debt Facility. The Siena Amendment No. 2 did not modify any other terms related to the Siena Revolver, including maximum borrowing capacity. The Company accounted for the Siena Amendment No. 1 and Siena Amendment No. 2 (together, the “Siena Amendments”) under debt modification accounting due to the terms being deemed not substantially different. The Company paid an aggregate $0.3 million of issuance costs related to the Siena Amendments which are included within other assets on the Company’s consolidated balance sheets and are being amortized through the Siena Revolver’s scheduled maturity date.
The interest rates applicable to borrowings under the Siena Revolver are based on a fluctuating rate of interest measured by reference to either, at the Company’s option, (i) a Base Rate, plus an applicable margin, or (ii) the Term Secured Overnight Financing Rate (“Term SOFR”) then in effect, plus 0.10% and an applicable margin. The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) Federal Funds Rate plus 0.50% and (3) 5.00% per annum. The applicable margin for Siena Revolver borrowings is based on the Company’s monthly average principal balance outstanding and ranges from 2.75% to 4.50% per annum in the case of Base Rate Borrowings, as defined by the Siena Revolver, and 3.75% to 5.50% per annum in the case of Term SOFR Borrowings, as defined by the Siena Revolver. The Siena Revolver also contains various financial covenants the Company must maintain to avoid an Event of Default, as defined by the agreement. In accordance with the agreement, Siena has been provided with the Company’s periodic financial statements and updated projections to facilitate their ongoing assessment of the Company. As of December 31, 2024, the Company was in compliance with these debt covenants.
The Siena Revolver matures on March 10, 2026 and is collateralized by the Company’s accounts receivable and inventory balances. As of December 31, 2024, the Company has an outstanding principal balance of $7.5 million under the Siena Revolver with an interest rate of 8.40%. As of December 31, 2024, additional borrowing capacity from the Siena Revolver was $5.2 million.
A schedule of the Company’s future debt maturities is as follows (in thousands):
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