Business Context and Reporting Period
This Form 8-K was filed by Alkami Technology, Inc. on April 29, 2022. The report details the entry into a material definitive agreement involving a new credit facility.
Key Financial Metrics and Debt Structure
The Company entered into an Amended and Restated Credit Agreement with Silicon Valley Bank, Comerica Bank, and Canadian Imperial Bank of Commerce. Key terms include:
- Total Facility: A Revolving Facility of $40.0 million and a Term Loan of $85.0 million.
- Use of Proceeds: Term Loan proceeds were used to replenish cash utilized for the acquisition of Segmint Inc., which closed on April 25, 2022.
- Maturity Date: April 29, 2025.
- Interest Rate: Variable rate based on SOFR plus a margin of 3.00% to 3.50% per annum, dependent on the recurring revenue leverage ratio.
- Repayment Terms: Term Loan principal payments begin June 30, 2023, at approximately $1.1 million quarterly, increasing to approximately $2.1 million quarterly starting June 30, 2024.
- Security: Obligations are secured by substantially all assets of the Company and its subsidiaries.
Material Changes and Accordion Feature
The new agreement amends and restates a prior credit facility provided by Silicon Valley Bank and KeyBank National Association. The agreement includes an accordion feature allowing the Company to request additional revolving loan commitments up to $50.0 million, subject to certain conditions.
Outlook, Risks, and Covenants
The Amended Credit Agreement is subject to liquidity and operating covenants, as well as customary affirmative and negative covenants and events of default. The filing does not provide specific forward-looking financial guidance or management commentary beyond the terms of the credit agreement.
Investor Verification Checklist
- Verify the impact of the $85.0 million Term Loan on the Company's leverage ratios and compliance with the new covenants.
- Review the full text of the Amended and Restated Credit Agreement (Exhibit 10.1) for specific definitions of the recurring revenue leverage ratio.
- Confirm the integration status and financial performance of the Segmint Inc. acquisition funded by this loan.
- Monitor the Company's ability to meet quarterly principal payments starting June 30, 2023.