Rimini Street, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on February 23, 2023, regarding events occurring on February 22, 2023. Rimini Street, Inc. (RMNI) entered into Amendment No. 4 to its existing Credit Agreement dated July 2, 2021.
Key Financial Metrics and Debt Structure
- Available Liquidity: The Company currently has $40 million in incremental borrowings available under the Credit Agreement.
- Interest Rate Benchmark: The Amendment transitions the reference rate from LIBOR to the Secured Overnight Financing Rate (SOFR), effective February 28, 2023.
- Applicable Margins:
- Adjusted Term SOFR: 1.75% to 2.50% plus applicable margin.
- Base Rate: 0.75% to 1.50% plus applicable margin.
- EBITDA Adjustment: The definition of Consolidated EBITDA was amended to allow an add-back of up to $10 million for costs and legal fees related to ongoing litigation with Oracle for the fourth fiscal quarter of 2022 and any period including such quarter.
Material Changes Versus Prior Period
The available borrowing capacity of $40 million represents an increase of $5 million compared to the amount available when the Credit Agreement first became effective on July 2, 2021. This increase is attributed to voluntary prepayments made by the Company to date.
Outlook, Risks, and Unusual Items
The filing highlights ongoing litigation with Oracle as a material contingency, evidenced by the specific EBITDA add-back provision for legal fees. The transition from LIBOR to SOFR aligns the debt instrument with current market standards. No forward-looking revenue or profit guidance is provided in this specific filing.
Investor Verification Checklist
- Verify the full text of Amendment No. 4 (Exhibit 10.1) for complete terms and covenants.
- Monitor the status and potential financial impact of the ongoing litigation with Oracle.
- Review the Company's Consolidated Leverage Ratio to determine the specific applicable margin within the stated ranges.
- Confirm the effective date of the SOFR transition (February 28, 2023) for interest expense calculations.