Business Context and Reporting Period
Company: Alphatec Holdings, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: December 4, 2019
Event: Entry into a Material Definitive Agreement (Lease) by wholly-owned subsidiary Alphatec Spine, Inc.
Key Financial Metrics
This filing reports on a specific lease agreement and does not contain consolidated revenue, profit, cash flow, margin, debt, or liquidity metrics for the company.
| Lease Metric | Value |
|---|---|
| Property Size | Approx. 121,541 sq. ft. |
| Initial Base Rent (Year 1) | $195,000/month (abated months 2-10) |
| Year 2 Base Rent | $244,115.10/month |
| Rent Escalation | 3% annually thereafter |
| Initial Payment Deposit | $538,932.70 |
| Security Deposit | $309,237.00 |
| Landlord Improvement Allowance | Up to $12,761,805.00 |
Material Changes and Lease Terms
- Lease Term: Anticipated commencement November 15, 2020, terminating November 30, 2030.
- Renewal Options: Two (2) options to renew for sixty (60) months each.
- Rent Abatement: Full abatement of base rent for months 2 through 10 of the first year.
- Market Adjustment: Base rent will adjust to market rental value at the start of each exercised option period.
- Operating Expenses: Tenant is responsible for certain operating expenses in addition to base rent.
Outlook, Risks, and Management Commentary
Management Commentary: The filing states that the tenant intends to make certain improvements to the premises, for which the landlord has agreed to provide allowances up to $12.76 million.
Risks and Contingencies: The filing notes that the description of the lease terms is not complete and is qualified by reference to the full Lease agreement, which will be filed in the next periodic report. No specific financial risks or contingencies regarding the lease were detailed in this text.
Investor Verification Checklist
- Verify the full text of the Lease agreement in the next periodic filing to review all covenants and conditions.
- Confirm the actual commencement date of the lease (currently anticipated for Nov 15, 2020).
- Monitor the utilization of the $12.76 million landlord improvement allowance.
- Assess the impact of the rent abatement period on cash flow projections for the first year of occupancy.