XML 25 R14.htm IDEA: XBRL DOCUMENT v3.25.1
Line of Credit and Long-term Debt
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Line of Credit and Long-term Debt

6. LINE OF CREDIT AND LONG-TERM DEBT

The following table provides details for the carrying values of debt as of:

 

 

March 31, 2025

 

 

December 31, 2024

 

Term Loan - (“FCC Term Loan”) - repayable by monthly principal payments of $164 and accrued interest at Secured Overnight Financing Rate (“SOFR”) plus an applicable margin per annum (7.87% at March 31, 2025); matures May 3, 2027

 

$

20,329

 

 

$

20,821

 

Term Loan - ("Pure Sunfarms Non-Revolving Facility") - C$19.0M - Canadian prime interest rate plus an applicable margin (6.95% as of March 31, 2025), repayable in quarterly payments equal to 2.50% of the outstanding principal amount, matures February 7, 2026

 

 

5,921

 

 

 

6,262

 

Term loan - ("Pure Sunfarms Term Loan") - C$25.0M - Canadian prime interest rate plus an applicable margin (6.95% as of March 31, 2025), repayable in quarterly payments equal to 2.50% of the outstanding principal amount, matures February 7, 2026

 

 

10,014

 

 

 

10,436

 

Term Loan - (Pure Sunfarms "BDC Facility") - non-revolving demand loan repayable by monthly principal payments of C$52 and accrued interest at Canadian prime interest rate plus an applicable margin (8.70% at March 31, 2025), matures December 31, 2031

 

 

2,939

 

 

 

3,043

 

Total

 

$

39,203

 

 

$

40,562

 

Less current maturities

 

 

4,819

 

 

 

8,142

 

Total long-term debt

 

$

34,384

 

 

$

32,420

 

As collateral for the FCC Term Loan, the Company has provided promissory notes and a first priority security interest over its accounts receivable and inventory. In addition, the Company has granted full recourse guarantees and security therein. The carrying value of the assets and securities pledged as collateral for the FCC Term Loan as of March 31, 2025 and December 31, 2024 was $69,613 and $77,682, respectively.

On April 10, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Farm Credit Canada (“FCC”) as the lender, which amended and restated the terms of the FCC Term Loan. Among other things, the A&R Credit Agreement (i) adds the Company as a new borrower, (ii) adds VF Clean Energy, Inc. as a new guarantor, and (iii) provides more favorable financial covenants.

As of March 31, 2025, the PSF Non-Revolving Facility was secured by the Delta 2 and Delta 3 greenhouse facilities and contained customary financial and restrictive covenants.

The Company has a revolving line of credit agreement with a Canadian chartered bank (the "Operating Loan") maturing May 2027. The Operating Loan can be drawn in advances of up to C$10,000, had an outstanding balance of $5,000 and $4,000 drawn on the facility as of March 31, 2025 and December 31, 2024, respectively, and future availability of $2,588 on March 31, 2025. Interest under the Operating Loan is payable at the Canadian prime rate plus an applicable margin per annum (7.87% at March 31, 2025), payable monthly.

The carrying value of the assets pledged as collateral for the Operating Loan as of March 31, 2025 and December 31, 2024 was $23,755 and $27,136, respectively.

As of March 31, 2025, Pure Sunfarms had a revolving line of credit (the “PSF Revolving Line of Credit”) with a Canadian chartered bank. The PSF Revolving Line of Credit could be drawn for advances of up to C$15,000 and had an outstanding balance of C$0 as of March 31, 2025 and December 31, 2024. Interest under the PSF Revolving Line of Credit was payable at the Canadian prime rate plus an applicable margin per annum (6.95% at March 31, 2025), payable monthly. As described below, on April 17, 2025, Pure Sunfarms replaced the Pure Sunfarms Loans and the PSF Revolving Line of Credit with the Pure Sunfarms Secured Credit Facilities (as defined below).

The Company was required to comply with financial covenants, measured either quarterly or annually depending on the covenant. The Company was in compliance with all its covenants as of March 31, 2025.

The weighted average annual interest rate on short-term borrowings as of March 31, 2025 and December 31, 2024 was 7.81% and 9.44%, respectively.

Accrued interest payable on all long-term debt as of March 31, 2025 and December 31, 2024 was $353 and $271, respectively, and these amounts are included in accrued liabilities in the Condensed Consolidated Statements of Financial Position.

On April 17, 2025, the Company entered into a secured credit facility with a Canadian chartered bank as administrative agent with an aggregate borrowing capacity of C$37.4 million, consisting of a maximum C$10.0 million revolving credit facility (the "Pure Sunfarms Revolving Credit Facility"), and a C$27.4 million term loan facility (the "Pure Sunfarms Term Loan Facility", and collectively with the Pure Sunfarms Revolving Credit Facility, the "Pure Sunfarms Secured Credit Facilities"). The Pure Sunfarms Secured Credit Facilities are secured by the Delta 2 and Delta 3 greenhouse facilities. The Pure Sunfarms Secured Credit Facilities were used to replace, and repay remaining outstanding balances on, the Company's (i) Pure Sunfarms Term Loan, (ii) the Pure Sunfarms Non-Revolving Facility, (iii) the BDC Facility, and (iv) the PSF Revolving Line of Credit. The credit and guarantee agreements related to the Pure Sunfarms Loan, the Pure Sunfarms Non-Revolving Credit Facility, the BDC Facility, and the PSF Revolving Line of Credit were terminated.

The Pure Sunfarms Secured Credit Facilities can be drawn for advances of up to C$10.0 million. The outstanding amount of the Pure Sunfarms Term Loan Facility will be repayable, on a quarterly basis, in an amount equal to C$1.0 million. Any amount remaining unpaid will be due and payable in full on the maturity date, which is on February 7, 2028.

The loans under the Pure Sunfarms Secured Credit Facilities will accrue interest at a rate equal to, at the company's option, (a) the Canadian Prime Rate plus the applicable margin, or (b) the Canadian Overnight Repo Rate Average plus the applicable margin. The applicable margin for the Pure Sunfarms Secured Credit Facility is determined based upon the leverage ratio.

The Pure Sunfarms Secured Credit Facilities also contain customary covenants, customary representations and warranties, affirmative covenants, financial covenants and events of default.

In accordance with ASC 470-10-45, Debt, Other Presentation Matters, because the Pure Sunfarms Secured Credit Facilities were issued subsequent to the balance sheet date of March 31, 2025, and because a portion of the Pure Sunfarms Secured Credit Facilities proceeds were used to pay off the Pure Sunfarms Term Loans and the BDC Facility, the Company reclassified the short-term portion of the of the Pure Sunfarms Term Loan, the Pure Sunfarms Non-Revolving Facility, and the BDC Facility on the balance sheet as of March 31, 2025 to long-term, except for the C$4.0 million ($2.9 million as of March 31, 2025) in current-maturities of long-term debt (which represents payments due in the next 12 months under the Pure Sunfarms Secured Credit Facilities).

The aggregate annual principal maturities of long-term debt for the remainder of 2025 and thereafter are as follows:

Remainder of 2025

 

$

3,631

 

2026

 

 

4,754

 

2027

 

 

19,673

 

2028

 

 

11,145

 

Total

 

$

39,203