Veritone gets commitment for $77.5 million loan via Highbridge Capital

By Mary-Katherine Stinson

Lexington, Ky., Nov. 8 – Veritone, Inc. signed a commitment letter on Nov. 7 establishing a senior secured term loan facility totaling $77.5 million in connection with a buyback of the company’s 1.75% convertible senior notes due 2026, according to an 8-K filing with the Securities and Exchange Commission.

The notes being repurchased are held by certain funds managed by Highbridge Capital Management, LLC and certain other entities, and the noteholders who are selling back their notes are also providing the senior secured term loan to Veritone.

The full amount of the term loan must be drawn on the closing date and may not be reborrowed.

The four-year term loan will accrue interest at term SOFR plus 850 basis points, with a 3% floor, payable quarterly. A default interest rate of an additional 300 bps annually will apply to all outstanding obligations in the event of a default.

Beginning in June 2024, quarterly amortization payments of 2.5% of the principal amount are required.

The company may elect to prepay the loan, in whole or in part, in cash, subject to a make-whole premium during the first year of the loan, a 14% prepayment premium during the second year, and a 7% premium during the third year.

The company may also prepay the loan in shares of common stock, subject to a 13% prepayment premium, if the closing price of the common stock exceeds certain price thresholds for any 20 trading days during a 30 consecutive trading day period and subject to certain other conditions. If the company elects to do so, the principal amount will be proportionately prepaid over a 15-trading day period with the shares of common stock valued at a price per share equal to 95% of the volume weighted average price of the common stock on the applicable prepayment date.

Mandatory prepayments are required from certain asset sales with net cash proceeds exceeding $10 million, insurance recoveries on property loss that are not reinvested and if the aggregate principal amount of the 2026 convertibles outstanding on Aug. 14, 2026 totals $30 million or more.

The agreement includes a financial covenant requiring the company to maintain unrestricted cash and cash equivalents of at least $15 million at all times.

The company has agreed to issue warrants to the lenders to purchase up to 3,008,540 shares of common stock, exercisable for five years following closing at a price of $2.576 per share. A total of 20% of the warrants will be issued to the lenders in connection with the entry into the commitment letter, with the remaining 80% conditioned on the closing of the term loan.

The term loan is conditioned on the company having unrestricted cash and cash equivalents of at least $55 million immediately prior to the funding on the closing date and satisfaction of certain other conditions.

The commitment letter will expire Dec. 15 if the term loan has not been consummated.

A sole administrative agent, collateral agent and documentation agent for the loan has yet to be selected.

Veritone is a Denver-based AI software and services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.