Company: NINE
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001532286-25-000011
Chunk: 61

Company: Nine Energy Service, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 61
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.10 to 1.00 that is tested quarterly when the availability under the 2025 ABL Credit Facility is less than $10.0 million. This financial covenant applies until the availability exceeds such threshold for 30 consecutive days.The Company’s obligations under the 2025 ABL Credit Facility are secured by a first priority security interest in substantially all tangible and intangible assets of the Company and all of its current domestic and Canadian subsidiaries. Short-Term DebtFrom time to time, the Company renews certain insurance policies and finances the premium for its excess policy. The outstanding balance on these premiums was $2.3 million and $3.6 million at March 31, 2025 and December 31, 2024, respectively.Fair Value of Debt InstrumentsThe estimated fair value of the Company’s debt obligations at March 31, 2025 and December 31, 2024 was as follows: March 31, 2025December 31, 2024 (in thousands)2028 Notes$199,404 $197,283 2018 ABL Credit Facility$47,000 $47,000 Short-term debt$2,260 $3,580 The fair value of the 2028 Notes, 2018 ABL Credit Facility, and short-term debt is classified as Level 2 in the fair value hierarchy. The fair value of the 2028 Notes is established based on observable inputs in less active markets. The fair value of the 2018 ABL Credit Facility and short-term debt approximates their carrying value. On May 1, 2025, all debt obligations under the 2018 ABL Credit Facility were repaid, and the 2018 ABL Credit Facility has been terminated and replaced with the 2025 ABL Credit Facility.

9. Related Party Transactions

The Company leases office space, yard facilities, and equipment and purchases building maintenance and repair services from entities owned by David Crombie, an executive officer of the Company. Total lease expense and building maintenance and repair expense associated with these entities was $0.2 million and $0.3 million for the three months ended March 31, 2025 and 2024, respectively. The Company also purchased $0.8 million and $0.9 million of products and services during the three months ended March 31, 2025 and 2024, respectively, from an entity in which Mr. Crombie is a limited partner. There were