Line of Credit and Other Available Sources of Financing
Line of Credit
The Company maintains a revolving credit facility with Western Alliance Bank that provides for borrowings of up to $10.0 million, subject to a borrowing base formula and customary terms and conditions. Borrowings bear interest at a floating rate equal to (a) the greater of (i) 6.00% per annum or (ii) the Prime Rate (as published by The Wall Street Journal or as otherwise announced by the lender), plus (b) 1.00%. During the existence of an event of default, the interest rate increases by an additional 5.00%.
The facility includes a $3.0 million letter of credit sublimit. Letters of credit are subject to a fee of 2.00% per annum on the face amount, plus applicable amendment, transfer and cancellation fees, and reduce availability under the revolving credit line. As of December 31, 2025, approximately $2.1 million was outstanding under a letter of credit issued pursuant to the facility.
The facility matures on November 12, 2027. As of December 31, 2025, the Company had no outstanding borrowings under the revolving credit facility.
If the Company draws from the line of credit, its obligations under the Credit Agreement are secured by a security interest in substantially all of the Company’s current and future personal property assets, including intellectual property. Any borrowings, interest or other fees or obligations that the Company owes will become due and payable on the maturity date. If the Company draws from the line of credit, the Company would also become subject to the affirmative and restrictive covenants under the Credit Agreement, including those related to financial reporting, maintenance of required cash levels at Western Alliance Bank, payment of taxes and insurance, maintenance of inventory, restrictions on property dispositions, business combinations, and incurrence of additional indebtedness. As the Company had no borrowings outstanding as of December 31, 2025, these covenants were not applicable.
Debt Issuance Costs
For the years ended December 31, 2025 and 2024, the Company incurred debt issuance costs of approximately $67,000 and $52,000, respectively, in connection with this line of credit arrangement and had an unamortized balance of approximately $47,000 and $39,000 as of December 31, 2025 and 2024, respectively. For the line of credit arrangement, the Company elected a policy to keep the debt issuance costs as an asset, regardless of whether an amount is drawn. The remaining unamortized deferred asset will be amortized over the remaining life of the line of credit arrangement.
Other Available Sources of Financing
In June 2023, the Company filed a new $125 million registration statement on Form S-3 with the SEC, utilizing a “shelf” registration process. Under this shelf registration process, the Company may sell securities from time to time, including up to $47.8 million pursuant to the At Market Issuance Sales Agreement, dated as of June 12, 2020, and amended November 20, 2024 with Raymond James & Associates, Inc. and roth Capital Partners, LLC as sales agents (as amended, the ATM Facility). As of December 31, 2025, approximately $47.8 million remains available under the ATM Facility. The Company’s potential use of the ATM facility is subject to the satisfaction of various conditions in the ATM Facility agreement as well as market conditions. As a result, the Company’s ability to rely on the ATM Facility to raise liquidity is limited.