NOTE 5 — DEBT

The components of debt are presented in the following tables (in thousands):

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Term Loan

Aquasition LLC and Aquasition II LLC (collectively, the “Subsidiary Borrowers”), both indirect wholly owned subsidiaries of the Company, are parties to a credit agreement providing for a $215.0 million term loan (the “Term Loan”). The Term Loan bears interest at a fixed rate of 7.0% per annum (effective rate of 8.2% for 2024) and matures on May 19, 2028.

In March 2024, the Term Loan was amended to provide for (i) the deferral of $30.1 million of principal repayments during 2024; (ii) the resumption of principal repayments in the first quarter of 2025 with the option, but not obligation, to catch up on deferred amortization through excess cash flow sweep; (iii) the payment of cash interest each quarter on the remaining principal balance; (iv) the payment of an amendment fee of $0.2 million to be paid in four quarterly installments of $50,000 each, starting in the first quarter of 2024; and (v) the modification of the optional prepayment schedule as follows: redemption at 103% of par from May 2024 to May 2026, redemption at 102% of par from May

2026 up to May 2027, and 101% of par from May 2027 up to maturity in May 2028. The premium will be applicable to the aggregate principal amount outstanding at the time of any optional redemption.

The Term Loan is non-recourse to the Company and any subsidiaries other than the Subsidiary Borrowers and their parent and is secured by first lien security interests in the equity of the Subsidiary Borrowers and a first lien mortgage security interest and mortgages on certain assets of the Subsidiary Borrowers.

Subsequent to December 31, 2024, the Subsidiary Borrowers terminated the Term Loan and all outstanding obligations owed under the Term Loan were paid in full in connection with such termination. See Note 19 – Subsequent Events for additional information.

11.75% Senior Second Lien Notes due 2026

The Company’s 11.75% Senior Second Lien Notes (the “11.75% Notes”) were issued under an indenture dated January 27, 2023 (the “Indenture”). The 11.75% Notes mature on February 1, 2026 and interest is payable in arrears on February 1 and August 1.

The 11.75% Notes are secured by second-priority liens on the same collateral that is secured under the Credit Agreement. The estimated annual effective interest rate for 2024 on the 11.75% Notes is 12.8%, which includes amortization of debt issuance costs.

The Company may redeem the 11.75% Notes, in whole or in part, at redemption prices (expressed as percentages of the principal amount thereof) equal to 105.875% through July 31, 2025 and 100.000% on August 1, 2025 and thereafter, plus accrued and unpaid interest, if any, to the redemption date. The 11.75% Notes are guaranteed by the Guarantors.

Subsequent to December 31, 2024, the Company purchased for cash pursuant to a tender offer (the “Tender Offer”), such of its outstanding 11.750% Notes that were validly tendered (and not validly withdrawn) pursuant to the terms of the Tender Offer and elected to effect an optional redemption of the 11.75% Notes on August 1, 2025, and caused the satisfaction and discharge of the 2023 Indenture. See Note 19 – Subsequent Events for additional information.

TVPX Loan

In May 2023, the Company acquired a corporate aircraft from a company affiliated with and controlled by the Company’s Chairman, Chief Executive Officer (“CEO”) and President, Tracy W. Krohn. The terms of the transactions were reviewed and approved by the Audit Committee of the Company’s board of directors. See Note 17 – Related Parties.

The purchase price of the aircraft was $19.1 million, which was paid using $9.0 million of the Company’s cash on hand and through the assumption of an approximately $11.8 million amortizing loan (the “TVPX Loan”), not in its individual capacity but as owner trustee of the trust which holds title to the aircraft, a wholly owned indirect subsidiary of the Company, as the borrower. Using current market rates, the Company determined that the fair market value of the TVPX Loan was $10.1 million at the time of assumption.

The TVPX Loan bears a fixed interest rate of 2.49% per annum (effective rate of 9.4% for 2024) for a term of 41 months and requires monthly amortization payments of $91.7 thousand plus accrued interest, and a balloon payment of $8.0 million at the end of the loan term. The TVPX Loan is guaranteed by the Company on an unsecured basis.

Credit Agreement

The Company is party to a credit agreement (as amended from time to time, the “Credit Agreement”) with Calculus Lending, LLC (“Calculus”), a company affiliated with and controlled by the Company’s CEO, as sole lender. The Credit Agreement currently has a maturity date of January 31, 2025.

The Credit Agreement consists of a $100.0 million secured revolving credit facility, with borrowings limited to a borrowing base of $50.0 million. The Credit Agreement is secured by a first priority lien on substantially all of the Company’s and its guarantor subsidiaries’ assets, excluding those assets of the Subsidiary Borrowers.

Outstanding borrowings accrue interest at SOFR plus 6.0% per annum. Additionally, the Company is required to pay commitment fees based on the daily unused amount of the Credit Agreement at a rate of 3.0% per annum.

As of both December 31, 2024 and 2023, there were no borrowings outstanding under the Credit Agreement and no borrowings had been incurred under the Credit Agreement during 2024 or 2023.

Subsequent to December 31, 2024, the Company terminated the Credit Agreement. See Note 19 – Subsequent Events for additional information.

Maturities of Long-Term Debt

The maturities of the Company’s principal amounts of long-term debt are as follows (in millions):

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Covenants

The Company’s debt agreements contain certain representations, warranties, covenants and other terms and conditions which are customary for agreements of these types. As of December 31, 2024, the Company was in compliance with all applicable covenants of the Indenture, the TVPX Loan and the Credit Agreement.