DEBT

6 Months Ended

Jun. 30, 2025

Debt is presented net of debt discounts and issuance costs in the Company's balance sheets and consisted of the following (in thousands):


	June 30,		December 31,
	2025		2024
Term Loan	$	68,731	$	70,280
Revolving line of credit	10,000		15,000
Less current maturities	(3,093)		(3,093)
Long-term debt, net of current maturities	$	75,638	$	82,187

On April 30, 2024, the Company refinanced its Original Credit Facility, which had an outstanding principal balance of $70.9 million, with the 2024 Credit Facility, a new five-year senior secured credit facility consisting of a $75.0 million term loan and a $35.0 million revolving line of credit.

Cash proceeds and payment activity relating to the 2024 Credit Facility consisted of the following (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Proceeds from issuance of 2024 Credit Facility’s term loan	$	—	$	2,938	$	—	$	2,938
Principal payments on revolving line of credit	(5,000)		—		(5,000)		—
Principal payments on term loan	(937)		—		(1,875)		(1,688)
Net cash activity relating to debt	$	(5,937)	$	2,938	$	(6,875)	$	1,250

There was no principal payment under the 2024 Credit Facility term loan during the three months ended June 30, 2024 as none was required under its terms. On July 15, 2025, the Company paid down the remaining $10.0 million principal on the revolving line of credit’s outstanding balance.

For the term loan, the Company has a choice of interest rates between (a) the Secured Overnight Financing Rate (“SOFR”) and (b) a Base Rate (as defined in the 2024 Credit Facility), in each case plus an applicable margin. The applicable margin is based on the Company’s Consolidated Total Leverage Ratio (as defined in the 2024 Credit Facility) and whether the Company elects SOFR (ranging from 2.75% to 3.5%) or Base Rate (ranging from 1.75% to 2.5%). The revolving line of credit bears interest on the unused portion of the credit line at rates of 25 to 40 basis points, depending on the Company’s Consolidated Total Leverage Ratio. Annual minimum principal payments over the five-year term for the 2024 Credit Facility are 5%, 5%, 7.5%, 7.5%, and 10%, respectively, with the remaining balance due at the end of the term.

The refinancing was accounted for as a debt modification under ASC 470-50 as the terms of the 2024 Credit Facility were not substantially different than the terms of the Original Credit Facility. Under debt modification accounting, third-party costs are expensed as incurred. During the year ended December 31, 2024, the Company expensed $0.2 million in third-party transaction costs in connection with the modification. Fees paid to the creditor of $1.1 million were included with the remaining

unamortized discount from the Original Credit Facility and are being amortized as an adjustment to interest expense over the remaining term of the 2024 Credit Facility.

Pursuant to a Guaranty and Security Agreement, dated April 30, 2024, among the Credit Parties (as defined in the 2024 Credit Facility) and Capital One, National Association, as agent (the “2024 Guaranty and Security Agreement”), the obligations under the 2024 Credit Facility are guaranteed by certain of the Company’s subsidiaries and are secured, subject to customary permitted liens and exceptions, by a lien on substantially all assets of the Credit Parties.

The 2024 Credit Facility contains certain financial covenants, including a minimum fixed charge coverage ratio greater than 1.25, a total leverage ratio less than 3.75, and a minimum liquidity balance of at least $20 million in U.S. cash.

The fair value of the term loan under the 2024 Credit Facility was $71.9 million (Level 2 inputs) as of June 30, 2025 compared to the carrying value of $68.7 million as of June 30, 2025. The fair value of the 2024 Credit Facility was $73.9 million (Level 2 inputs) as of December 31, 2024 compared to the carrying value of $70.3 million as of December 31, 2024.

For the three months ended June 30, 2025 and 2024, the effective interest rate under the Credit Facilities was 8.1% and 9.0%, respectively. For the six months ended June 30, 2025 and 2024, the effective interest rate under the Credit Facilities was 8.0% and 8.8%, respectively.

In October 2024, the Company borrowed $15.0 million under the revolving line of credit. For the three months ended June 30, 2025, the Company reduced the amount borrowed under the revolving line of credit by $5.0 million, resulting in a net principal balance outstanding of $10.0 million as of June 30, 2025. The Company has $25.0 million in net available borrowings under the revolving line of credit as of June 30, 2025. As noted above, the Company paid down the remaining $10.0 million owed on the revolving line of credit, resulting in $35.0 million of borrowing capacity on July 15, 2025.

For the three and six months ended June 30, 2025, the average interest rate under the revolving line of credit under the 2024 Credit Facility was 7.1% and 7.1%, respectively.

Effective April 30, 2024, the Company’s interest rate swap agreement was amended in connection with the 2024 Credit Facility to match the new five-year term. The amended interest rate swap agreement has a notional value of $40.0 million, with a fixed payer SOFR rate of 3.71% and an initial floating SOFR rate of 5.32%. The floating rate is reset at each month end and the term of the interest rate swap agreement coincides with that of the 2024 Credit Facility. See Note 11 for further information regarding the fair value accounting for the interest rate swap agreement. The modification of the interest rate swap agreement did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements.

Interest Expense

The components of interest expense are presented below (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Credit Facilities:
Interest expense under term loan	$	1,226	$	1,264	$	2,458	$	2,345
Accretion expense related to discount and issuance costs	164		191		326		434
Interest expense under revolving line of credit	216		—		478		—
Interest on finance leases and other	23		28		42		45
	$	1,629	$	1,483	$	3,304	$	2,824

For the three months ended June 30, 2025 and 2024, interest expense included a reduction related to interest rate swap payments received of $0.1 million and $0.2 million, respectively. For the six months ended June 30, 2025 and 2024, interest expense included a reduction related to interest rate swap payments received of $0.1 million and $0.4 million, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Rimini Street, Inc. 10-Q