Section 1.01 Entering into a Material Definitive Agreement
The term loan agreement provides for a 60-month term loan facility of up to
The Revolving Loan Agreement establishes a 60-month revolving loan facility offering
The borrowings bear interest at an annual rate equal to the adjusted forward SOFR, subject to a floor of 1.00% and a ceiling of 3.00%, plus (1) 6.00% under the contract term loan and (2) 4.00% under the revolving loan agreement. “Adjusted Forward SOFR” means the annual rate equal to the sum of the 30-day forward-looking guaranteed overnight funding rate, as published by
Interest is payable monthly in arrears on the first day of each month and upon maturity of the loan contracts. The Company is required to pay interest only for the first 48 months and straight-line amortization for the remaining 12 months, subject to the Company’s election to extend the initial interest repayment period from 12 months to 60 months in total, subject to subject to the Company achieving certain revenue targets.
The Company pays (1) a collateral management fee of 0.50% per annum on the outstanding balance under the Revolving Loan Agreement, (2) an unused line fee equal to 0.50% per annum of the unused average of the Revolving Loan Agreement (on a borrowed basis) and (3) an annual administration fee of 0.25% of the amount borrowed under the term loan.
If the term loan is repaid before the maturity date or if the revolving credit facility is terminated before the end of its term, the prepayment charge is 3.0% of the amount repaid in the first year, 2. 0% in the second year and 1.0% in the third year and thereafter, and a final payment charge of 3.0% of the amount borrowed is payable under the term loan.
The loans are secured by substantially all of the Company’s assets, including intellectual property. Loan agreements and other ancillary documents contain the usual representations and warranties and positive and negative clauses.
Under the loan agreements, the Company is not required to meet a minimum level of revenue if liquidity (defined as unrestricted cash plus unused availability under the revolving loan agreement) exceeds the balance outstanding under the term loan agreement. If liquidity falls below this outstanding balance, then the Company is subject to a 12-month minimum revenue covenant.
The foregoing description of material terms of the Loan Agreements is subject in its entirety to the terms and conditions of the Loan Agreements.
Section 1.02 Termination of a Material Definitive Agreement.
The terms and conditions of the CRG Loan Agreement and the SVB Loan Agreement were disclosed in the Company’s Annual Report on Form 10-K for the year ended
Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information set out in point 1.01 is incorporated herein by reference.
Item 9.01 Financial statements and supporting documents.
Exhibit No. Description 99.1 Press Release of
Treace Medical Concepts, Inc.dated May 2, 2022104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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