Alphatec (ATEC) - 2024 Q3 - Quarterly Results

Loan Agreement and Financial Terms - The Borrower has requested additional Term Loans totaling $50,000,000 to repay a portion of outstanding ABL Debt, cover fees and expenses, and for working capital needs[4]. - The 2024 Term Loans will be provided by the Lenders on the terms set forth in the agreement, effective on the Amendment No. 1 Effective Date[5]. - The conditions for the effectiveness of the agreement include the delivery of executed counterparts and compliance with the Credit Agreement[12]. - The Borrower must certify the solvency of the Credit Parties on a consolidated basis after the transactions related to the agreement[13]. - The agreement includes provisions for the Agent to file UCC-1 financing statements to perfect the liens and security interests granted[10]. - The Borrower is responsible for all reasonable and documented out-of-pocket costs and fees incurred in connection with the preparation of the agreement[11]. - The agreement reaffirms that the Original Credit Agreement and all other Financing Documents remain in full force and effect[15]. - The Agent and Lenders must receive a legal opinion from counsel to the Credit Parties as a condition for effectiveness[12]. - The agreement is governed by the laws of the State of New York[17]. - The Borrower will pay all fees and reimbursements of costs incurred in connection with the agreement prior to the Amendment No. 1 Effective Date[14]. - The total term loan commitment from Braidwell Transaction Holdings LLC is$50,000,000[26]. - The agreement includes provisions for electronic signatures, which are legally binding[19]. - The collateral consists of all assets of the Credit Parties, including accounts, inventory, and intellectual property[27]. - The agreement supersedes all prior agreements and understandings related to the subject matter[20]. - The agreement is intended to be legally binding and executed under seal[23]. - The agreement includes a severability clause ensuring the validity of remaining provisions if any part is found invalid[21]. - The agreement binds the successors and assigns of the parties involved[22]. - The agreement is amended as of October 29, 2024, to reflect changes in the credit terms[29]. - The agreement outlines various financial covenants, including minimum liquidity requirements[33]. - The agreement includes conditions to closing and conditions for delayed draw term loans[36]. - The aggregate 2024 Term Loan Commitment of all lenders is set at $50,000,000[40]. - The 2026 Convertible Notes have an interest rate of 0.75$1.5 billion in Q3 2023, representing a 25% year-over-year growth[110]. - User data showed a total of 10 million active users, up from 8 million in the previous quarter, indicating a 25% increase in user engagement[110]. - The company provided guidance for Q4 2023, projecting revenue between $1.6 billion and$1.8 billion, which reflects a growth rate of 20% to 30% compared to Q4 2022[110]. - New product launches included a state-of-the-art software platform expected to generate an additional $200 million in revenue over the next year[110]. - The company is expanding its market presence in Europe, targeting a 15$300 million, accounting for 20% of total revenue, to support innovation and new technology[110]. - The company announced a strategic acquisition of a smaller tech firm for $500 million, aimed at enhancing its product offerings and market reach[110]. - A new partnership with a leading telecommunications provider is expected to drive user growth by 10$50 million annually, improving overall profitability[110]. - The management emphasized a commitment to sustainability, with plans to reduce carbon emissions by 30% by 2025[110]. - The company reported a total revenue of $50 million for the last quarter, representing a 20$55 million and $60 million, indicating a projected growth of 10$5 million in revenue over the next quarter[106]. - The company is investing $10 million in research and development for new technologies aimed at enhancing user experience[106]. - Market expansion efforts include entering two new international markets, projected to increase user base by 15$15 million, expected to enhance market share[106]. - The company reported a net profit margin of 15%, up from 12% in the previous quarter[106]. - The total debt stands at $30 million, with a debt-to-equity ratio of 0.5, indicating a stable financial position[106]. - Cash reserves have increased to$20 million, providing a solid buffer for future investments[106]. Regulatory and Compliance Matters - The company is subject to various Environmental Laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and the Clean Air Act[118]. - The company has defined "Excluded Accounts" which include deposit accounts used exclusively for payroll and other employee benefits, with a maximum aggregate amount of $2,000,000[128]. - The company has outlined "Excluded Property," which includes assets like motor vehicles and commercial tort claims with values less than$500,000 individually or $2,000,000 in the aggregate[129]. - The company has identified "Excluded Subsidiaries," including EOS France and EOS Imaging GmbH, which do not hold material Intellectual Property rights[135]. - The company is subject to various taxes, including U.S. federal withholding taxes imposed under FATCA[138]. - The company has established criteria for "Eligible Assignees," which exclude hedge funds primarily engaged in purchasing distressed debt and competitors[115]. - The company has provisions for "Erroneous Payments" and related rights as specified in Section 11.20[125]. - The company is governed by the Employee Retirement Income Security Act of 1974 (ERISA) and maintains various employee benefit plans[123]. Financial Definitions and Terms - The aggregate Initial Term Loan Commitment of all Lenders on the Closing Date is$100,000,000[154]. - The Federal Funds Rate is defined as the weighted average of overnight Federal funds transactions, with a floor rate of 3.00%[143][1]. - The term "Material Adverse Effect" refers to a significant negative change in the financial condition or operations of the Credit Parties[168]. - "Indemnified Taxes" include taxes imposed on payments made by the Borrower under any Financing Documents[152]. - "Material Intangible Assets" encompass all Intellectual Property owned by the Credit Parties or their Subsidiaries[171]. - "Liquidity" is defined as Credit Party Unrestricted Cash, which is crucial for financial stability[166]. - "Market Withdrawal" refers to the removal or correction of a distributed product due to minor violations[167]. - The term "Guarantee" includes any obligation of a person to ensure the payment of another's debt[146]. - "Financing Documents" include various agreements related to the obligations of the Borrower[142]. - "Fiscal Quarter" is defined as each three-month period ending on March 31, June 30, or September 30[143]. - "Material Subsidiary" definition includes subsidiaries with assets exceeding 5.0% of consolidated total assets or cash exceeding $7,500,000[172]. - "Material Real Property" refers to real estate owned by any Credit Party with a fair market value exceeding$5,000,000[173]. - "Net Cash Proceeds" includes cash received from asset dispositions, net of direct costs and estimated taxes, with specific conditions outlined[176]. - "Net Revenues" defined as total consolidated revenue of the Borrower and its Subsidiaries, determined in accordance with GAAP[177]. - "Permitted Acquisition" conditions include no Event of Default, compliance with financial covenants, and acquisition consideration not exceeding $10,000,000 per fiscal year[188]. - Acquisition consideration can consist of cash and Cash Equivalents not exceeding$40,000,000 in total during the term of the Agreement[194]. - If Acquisition Consideration exceeds $30,000,000, Liquidity must be at least$25,000,000 on a pro forma basis[194]. - Subsidiaries contributing greater than 5.0% of the Revenue Base must be designated as "Material Subsidiaries" if aggregate exceeds 10.0%[172]. - The Maturity Date for obligations is set for January 6, 2028[173]. - "Ordinary Course of Business" transactions must be conducted in good faith and not to evade any covenants[180]. - Permitted Asset Dispositions in any twelve-month period do not exceed $500,000[197]. - Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal performance bonds are not to exceed$500,000 in the aggregate at any time outstanding[200]. - The purchase price for Permitted Bond Hedge Transactions does not exceed the Net Cash Proceeds received from the sale of related Permitted Convertible Debt[198].