Long-term debt, net

3 Months Ended

Mar. 31, 2025

Long-term debt, net.

Long-term debt, net

8. Long-term debt, net.

The components of debt consisted of the following at:

	March 31, 2025		December 31, 2024
Credit Agreement - term loan	$	16,650,000	$	16,650,000
Notes payable		12,750,000		12,750,000
Credit Agreement - revolving credit facility		6,000,000		7,961,000
Paid in-kind interest (PIK)		1,735,000		1,331,000
Machinery financing loans		228,000		141,000
	$	37,363,000	$	38,833,000
Less: unamortized debt issuance costs		(292,000)		(312,000)
Total debt	$	37,071,000	$	38,521,000
PIK included in accrued expenses and other current liabilities		(93,000)		(93,000)
Less current maturities		(2,313,000)		(1,820,000)
Long-term debt, net of current maturities	$	34,665,000	$	36,608,000

To finance the Acquisition, the Company entered into a revolving credit and term loan agreement (the “Credit Agreement”), with Tulp 24.1 as the borrower (the “Borrower”) for a $18,000,000 term loan and a $6,000,000 revolving credit facility. On October 16, 2024, the Company amended the credit agreement (Amended Credit Agreement) to, among other things, temporarily increase the borrowing capacity under the revolving credit facility to $8,000,000 until March 31, 2025. The revolving credit facility may be used by the Company for general business purposes and working capital, subject to availability under a borrowing base consisting of 80% of eligible accounts receivable and generally 50% of eligible inventory. The Credit Agreement requires Bloomia , among other things. to maintain a maximum senior cash flow leverage ratio of 3.75 to 1.0 as of March 31, 2025.  Due to the shift in the Easter holiday from March 2024 to April 2025, the holiday sales were excluded from the ratio calculation as of March 31, 2025, and the Company was in breach. The lender waived the breach as of March 31, 2025, with no financial impact.

As part of the financing of the Acquisition, the Company entered into notes payable with the sellers. Notes payable for $12,750,000 have a term of five years with a scheduled maturity date of March 24, 2029. The notes payable are subject to additional principal payments based on excess cash flow. The notes payable initially bear interest at 8% per annum for the first year that increases annually by 2 percentage points. Interest on loans made under the notes payable is payable “in kind” (“PIK”). Interest that is payable “in-kind” is added to the aggregate principal amount on the applicable interest payment date. Additionally, the Company entered into short-term notes payable with the sellers. The short-term notes payable of $2,700,000 were paid in full as of June 30, 2024.

As of March 31, 2025 and December 31, 2024, there were $385,000 of debt issuance costs related to the term loan, net of amortization of $93,000 and $73,000, respectively, which have been presented as a direct deduction from long-term debt in the accompanying condensed consolidated balance sheet. As of March 31, 2025 and December 31, 2024, there were $128,000 of deferred financing costs related to the revolving credit facility, net of amortization of $28,000 and $22,000, respectively, which have been presented within prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet.

The Company incurred $446,000 and $212,000 of interest expense on the term loans and revolving facility in the three months ended March 31, 2025 and 2024, respectively. In addition, the Company incurred non-cash paid-in-kind interest of $404,000 and $125,000 on the seller notes facility in the three months ended March 31, 2025 and 2024, respectively. Term loan, revolving credit facility and paid-in-kind interest are included in interest expense, net on the condensed consolidated statements of operations and comprehensive income (loss).

The combined aggregate maturities for the fiscal years following March 31, 2025 are as follows:

Remainder of 2025	$	915,000
2026		1,864,000
2027		1,856,000
2028		1,824,000
2029		30,861,000
Thereafter		43,000
	$	37,363,000