Quarterly report [Sections 13 or 15(d)]

Debt

v3.26.1
Debt
 3 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt Debt
The following table summarizes borrowings under the Company’s debt obligations and the associated interest rates:
June 30, 2026 March 31, 2026
Amount
Effective Rate
Amount
Effective Rate
Term loan A (due August 2029) $ 285,000  11.2  % $ 285,000  11.7  %
Term loan B (due August 2029) 102,800  11.6  106,150  11.7 
Less: Original debt discount (14,704) (11,917)
Less: Debt issuance costs (6,966) (7,517)
Less: Unamortized exit and duration fees
 (13,267) (10,753)
Total debt, net 352,863  360,963 
Less: Current portion of long-term debt (9,375) (7,031)
Long-term debt, net $ 343,488  $ 353,932 
Financing Agreement
On August 29, 2025 (the “Closing Date”), the Company and certain wholly owned subsidiaries of the Company, as guarantors (the “Guarantors”), entered into a Financing Agreement (the “Financing Agreement”) with Blue Torch Finance LLC, as both administrative and collateral agent, and the lenders from time to time party thereto (“Lenders”), pursuant to which the Lenders made loans and other extensions to the Company under certain term loan credit facilities on the terms and conditions as set forth therein. The proceeds from the Financing Agreement were used to repay in full the outstanding balance under and terminate the Company’s amended and restated credit agreement with Bank of America, who served as lender and administrative agent.
The Financing Agreement (i) has a four-year term from the Closing Date and (ii) provides for three separate tranches of term loans in an aggregate principal amount of $430,000 (the “Loans”), all of which were borrowed in full by the Company on the Closing Date. The Loans are secured by substantially all of the assets of the Company and the Guarantors, subject to certain exceptions. Since the Closing Date, the Company repaid in full a term loan tranche in the aggregate amount of $55,000 using proceeds from the Company's At-the-Market equity sales offering, which was subsequently terminated.
Pursuant to the Financing Agreement, the Company issued warrants to the lenders providing the term loans. The Company recorded the warrants as a liability at their full fair value and allocated the remaining proceeds from the incremental borrowings of the Financing Agreement to the term loans, net of a discount.
The Loans accrue interest, at the Company’s option, at a term Secured Overnight Financing Rate (“SOFR rate”) or a reference rate for U.S. dollar borrowings, plus an applicable margin. The applicable margin for Loans accruing interest at the term SOFR rate ranges from 7.50% to 8.00% and ranges from 6.50% to 7.00% for loans accruing interest at the reference rate. The outstanding principal amount of the Loans is subject to scheduled repayment as follows: (i) on the last day of each fiscal quarter, beginning September 30, 2026, until the maturity of the Loans, the Company will repay the outstanding principal amount of term loans in an amount equal to $2,344 in the aggregate across the remaining two tranches and (ii) on the maturity date, the Company will pay the remaining aggregate outstanding principal amount, including all accrued and unpaid interest thereon. As of June 30, 2026, $9,375 was recorded as the current portion of long-term debt on the Company’s consolidated balance sheet, with the remainder of the principal of the Loans recorded as long-term debt, net.
On April 20, 2026 (the “Amendment Date”), the Company amended its Financing Agreement. The amendment reduced the liquidity covenant requirement for the period between April 1, 2026 and December 31, 2026 from $20,000 to $15,000 and modified the timing and amount of its exit and duration fees. The Company (i) paid a $5,000 amendment fee, capitalized as original debt discount to be amortized over the remaining term of the Financing Agreement; (ii) limited its remaining exit fees to $1,350; and (iii) limited future duration fees to $5,000, payable in cash, which will be waived if the Company prepays the principal of a certain tranche of the outstanding term loan by December 31, 2026. The exit fees were added to the outstanding principal balance on the Amendment Date.
The Financing Agreement requires certain exit and duration fees which are earned on various contractual dates through December 31, 2026 and a portion of these fees are added to the outstanding principal balance when due. As of June 30, 2026, the Company has added total exit fees of $5,850 and duration fees of $10,750 to its principal balance. The Company uses the effective interest method to recognize the exit and duration fees over the term of the debt. The effective interest rate for the period from the date of issuance through June 30, 2026, on the affected tranche was 17.21%. As of June 30, 2026, the Company may be required to pay $5,000 in duration fees should the principal of a certain tranche remain unpaid as of December 31, 2026.
The table below summarizes the changes in the Company’s unamortized exit and duration fees during the three months ended June 30, 2026:
Balance as of March 31, 2026
 $ 10,753 
Exit and duration fees recognized over the effective interest method
 1,164 
Exit and duration fees added to outstanding principal
 1,350 
Balance as of June 30, 2026 $ 13,267 
As of June 30, 2026, the future principal payments by fiscal year, for the outstanding debt, inclusive of both exit and duration fees, are as follows:
Fiscal year 2027 (remaining nine months) $ 7,031 
Fiscal year 2028
 9,376 
Fiscal year 2029
 9,376 
Fiscal year 2030
 362,017 
Total payments $ 387,800 
The Financing Agreement contains various customary affirmative and negative covenants, as well as financial covenants. The Financing Agreement requires the Company to maintain (i) a maximum leverage ratio with step-downs every fiscal quarter and (ii) minimum liquidity of (A) $10,000 from the Closing Date until March 31, 2026 and (B) $15,000 from and after April 1, 2026 until December 2026, of which no less than $5,000 must be maintained within the U.S. In addition, the Financing Agreement contains certain mandatory prepayment provisions, including from proceeds raised from equity issuances and, beginning in fiscal year 2027, 50% of any excess cash flows.
As of June 30, 2026, the Company was in compliance with all covenants under the Financing Agreement.
Warrants to Purchase Common Stock
In connection with the Financing Agreement, on the Closing Date, the Company issued warrants (the “August 2025 Warrants”) to purchase an aggregate of 824,421 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), to certain affiliates of the Lenders (in such capacity, the “August Holders”) at an exercise price of $4.84 per share (the “Exercise Price”), which is equal to the 30-day volume-weighted average price per share of Common Stock ending on and including the trading day immediately preceding the Closing Date. In addition, the Company issued, on September 15, 2025, an additional warrant to purchase an aggregate of 397,997 shares of Common Stock to an affiliate of a Lender (in such capacity, the “September Holder” and, together with the August Holders, the “Holders”) at the Exercise Price (the “September 2025 Warrant” and, together with the August 2025 Warrants, the “2025 Warrants”).
The 2025 Warrants expire on March 1, 2030. The Exercise Price and the number of shares underlying the 2025 Warrants are subject to adjustment in the event of specified events, including a subdivision or combination of the Common Stock, a reclassification of the Common Stock, certain change of control transactions, certain rights offerings or specified dividend payments, subject to certain limitations as set forth in the 2025 Warrants. Upon exercise, the aggregate exercise price may be paid, at each warrant holder’s election, in cash or on a net issuance basis, based upon the fair market value of the Common Stock at the time of exercise.
The Company agreed to provide certain customary registration rights with respect to the resale of shares of Common Stock underlying 2025 Warrants held by or issuable to the holders from time to time. The 2025 Warrants also contain customary indemnity and contribution obligations in connection with such registration.
The Company uses the Black-Scholes option valuation model for estimating fair value of common stock warrants. The table below is a summary of changes in the fair value of the Company’s valuations for the derivative liability for the three months ended June 30, 2026:
Balance as of March 31, 2026 $ 2,164 
Change in fair value 10,799 
Balance as of June 30, 2026 $ 12,963 
Interest expense, net
The components of the Company’s interest expense, net were as follows:
Three Months Ended June 30,
2026 2025
Interest expense on outstanding principal balances
 $ (11,290) $ (8,788)
Amortization of debt discount, issuance costs, and exit and duration fees
 (1,600) (1,154)
Unused line of credit fees
 —  (12)
Total interest expense, net $ (12,890) $ (9,954)