LONG-TERM BORROWINGS

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

LONG-TERM BORROWINGS

NOTE 10. LONG-TERM BORROWINGS

Private Placement Notes

On October 6, 2021, the Company closed its private placement of 8% Senior Secured Notes (the "2026 Notes - Tranche One") for aggregate gross proceeds of $350.0 million and net proceeds of $342.6 million. The Company used a portion of the net proceeds to repay certain outstanding acquired indebtedness and used the remaining net proceeds for capital expenditures and other general corporate purposes. On January 28, 2022, the Company closed on a second tranche private placement of 8% Senior Secured Notes (the "2026 Notes - Tranche Two") for aggregate gross proceeds of $76.9 million and net proceeds of $75.6 million. The Company used the net proceeds for capital expenditures and other general corporate purposes. The notes may be redeemed in whole or in part, at the Company's option. Repayment before October 6, 2025 would incur a 2% prepayment penalty, subsequent to that date there is no prepayment penalty. These notes are collectively referred to as the "2026 Notes".

Private placement notes payable consisted of the following as of December 31:

	2024		2023		Stated Interest Rate	Effective Interest Rate	Maturity Date
	(in thousands)
2026 Notes - Tranche One	$	293,000	$	293,000	8.00%	8.52%	10/6/2026
2026 Notes - Tranche Two	75,000		75,000		8.00%	8.43%	10/6/2026
Total private placement notes	368,000		368,000
Less: unamortized debt discount and issuance costs	(3,164)		(4,785)
Less: current portion of private placement notes, net	—		—
Private placement notes, net	$	364,836	$	363,215

The private placement notes contain customary restrictive covenants pertaining to our management and operations, including, among other things, limitations on the amount of debt that may be incurred and the ability to pledge assets, as well as financial covenant requirements, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements and a fixed charge ratio coverage, measured from time to time when certain conditions are met.

Interest expense incurred on private placement notes is recorded to interest expense, net on the consolidated statements of operations and was $31.1 million, $49.7 million, and $52.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Debt Extinguishments

In 2023, the Company made an open market repurchase of its private placement notes, "2026 Notes - Tranche One", that resulted in the extinguishment of $57.0 million in principal at a discount of 16.5%. Cash consideration paid to repurchase the principal amount outstanding, excluding accrued interest, totaled $47.6 million, and the Company recognized a gain of $8.2 million on the extinguishment of debt.

In 2023, the Company completed two full early redemptions of private placement notes with a cash payment of $130.0 million, excluding accrued interest, which represented a redemption price of 100% of the principal amounts outstanding for both notes. The Company recorded a loss on debt extinguishment of $2.4 million representing the difference between the reacquisition price and the net carrying amount of the debt as of extinguishment.

Notes Payable

Notes payable consisted of the following as of December 31:

	2024		2023		Stated Interest Rate		Effective Interest Rate	Maturity Date
	(in thousands)
Mortgage Notes Payable
Notes dated December 21, 2022 (3)	$	68,377	$	70,046	(3)	(2)	7.87%	1/1/2028
Notes dated December 22, 2023 (4)	24,468		25,000		8.31%	(2)	8.48%	12/22/2028
Notes dated December 22, 2022 (5)	18,012		18,470		7.30%	(2)	7.38%	12/22/2032
Notes dated October 1, 2021 (6)	5,193		5,645		8.14%	(2)	8.29%	11/1/2027
Total mortgage notes payable	116,050		119,161
Promissory Notes Payable
Notes acquired in Harvest Acquisition in October 2021 (7)	1,027		1,707		(6)	(2)	(6)	(6)
Note of consolidated variable-interest entity dated February 1, 2022	—		885
Total promissory notes payable	1,027		2,592
Total notes payable (1)	117,077		121,753
Less: debt discount	(1,725)		(2,139)
Less: current portion of notes payable	(3,407)		(3,759)
Notes payable, net	$	111,945	$	115,855

(1) Notes payable are subordinated to the private placement notes.

(2) Interest payments are due monthly.

(3) The mortgage note payable interest rate is a variable rate equal to the CME Term Secured Overnight Financing Rate ("SOFR") plus 3.00%. In connection with the closing of this note, the Company entered into an interest rate swap to fix the interest rate at 7.53% for the term of the notes. See Note 21. Financial Instruments & Fair Value Measurements for further details. These promissory notes are pledged by all of the assets at that location and contain customary restrictive covenants pertaining to the Company's management and operations, including, among other things, limitations on the amount of debt that may be incurred and the ability to pledge assets, among other things, as well as financial covenant requirements, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements, debt service coverage ratio, and liquidity covenant test. The covenants commenced on September 30, 2023 with semi-annual measurement, except for certain covenants which were measured starting as of December 31, 2022. In May 2023, the Company amended the terms of the agreement with respect to the covenant requirements, excluding balloon payments from certain covenant calculations.

(4) This mortgage note payable is pledged by all of the assets at this location and contains customary restrictive covenants pertaining to our management and operations, including, among other things, limitations on the amount of debt that may be incurred and the ability to pledge assets, among other things, as well as financial covenant requirements, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements, debt service coverage ratio, and liquidity covenant test. The covenants commenced on June 30, 2024 with quarterly or semi-annual measurement, except for certain covenants which were measured starting as of December 31, 2023.

(5) The stated interest rate on the mortgage note payable is in effect until December 21, 2027 and thereafter, interest will accrue at a rate equal to the five-year treasury rate in effect as of December 12, 2027 plus 3.50%. The promissory note is pledged by the real estate asset at this location and contains customary restrictive covenants pertaining to the Company's operations, including, among other things, limitations on the amount of debt and subsidiary debt that may be incurred and the ability to pledge assets, as well as financial covenant requirements, among other things, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements, covenant to liquidity and debt principal test, and a global debt service coverage ratio.

(6) On November 15, 2022, the Company closed on the refinancing of the mortgage notes payable dated October 1, 2021 to extend the maturity date by five-year and fix the interest rate at 8.14%. The mortgage note payable is pledged by the personal property and real estate assets at this location.

(7) Seven promissory notes were acquired during the year ended December 31, 2021. Interest rates range from 0.00% to 7.50%, with a weighted average interest rate of 7.37% as of December 31, 2024. Maturity dates range from April 27, 2026 to October 24, 2026.

Interest expense incurred on notes payable is recorded to interest expense, net on the consolidated statements of operations and was $9.7 million, $8.4 million, and $1.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Financial and Other Covenants

As noted above, certain long-term borrowing agreements contain various operating and financial covenants and as of December 31, 2024, the Company was in compliance with all such operating and financial covenants.

Maturities

Stated maturities of the principal portion of private placement notes and notes payable outstanding as of December 31, 2024 are as follows:

	Private Placement Notes		Notes Payable		Total Maturities
Year	(in thousands)
2025	$	—	$	3,407	$	3,407
2026	368,000		4,655		372,655
2027	—		7,600		7,600
2028	—		85,633		85,633
2029	—		668		668
Thereafter	—		15,114		15,114
Total	$	368,000	$	117,077	$	485,077