Latch, Inc. Files 8-K with Material Agreements and Equity Sales

TL;DR

Latch filed an 8-K on 7/15/24 covering material agreements, financial obligations, and equity sales.

AI Summary

On July 15, 2024, Latch, Inc. filed an 8-K detailing a material definitive agreement and a direct financial obligation. The company also reported unregistered sales of equity securities and provided a Regulation FD disclosure. The filing includes financial statements and exhibits.

Why It Matters

This filing indicates significant financial and contractual activities for Latch, Inc., potentially impacting its financial obligations and equity structure.

Risk Assessment

Risk Level: medium — The filing involves material definitive agreements, financial obligations, and unregistered equity sales, which can carry inherent risks and require further scrutiny.

Key Numbers

• 1231 — Fiscal Year End (Indicates the end of the company's fiscal year for financial reporting.)

Key Players & Entities

• Latch, Inc. (company) — Registrant
• TS Innovation Acquisitions Corp. (company) — Former Company Name
• July 15, 2024 (date) — Date of Report
• 001-39688 (other) — SEC File Number
• 85-3087759 (other) — IRS Employer Identification No.

FAQ

Key Financial Figures

• $6.0 million — a term loan in the principal amount of $6.0 million (the "New Loan"). The New Loan Agreemen
• $110 million — -for-sale securities were approximately $110 million. The New Loan Agreement contains vario
• $1.25 — ). The Warrant has an exercise price of $1.25 per share, is exercisable immediately a

Filing Documents

• lat-20240715.htm (8-K) — 41KB
• customersbankwarrant-execu.htm (EX-4.1) — 84KB
• loanandsecurityagreement-e.htm (EX-10.1) — 249KB
• 0001826000-24-000033.txt ( ) — 553KB
• lat-20240715.xsd (EX-101.SCH) — 2KB
• lat-20240715_lab.xml (EX-101.LAB) — 19KB
• lat-20240715_pre.xml (EX-101.PRE) — 11KB
• lat-20240715_htm.xml (XML) — 2KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. On July 15, 2024, the Company, Latch Systems, Inc., a wholly owned subsidiary of the Company ("Latch Systems"), and HelloTech (collectively with the Company and Latch Systems, the "Borrowers") entered into an Amended and Restated Loan and Security Agreement (the "New Loan Agreement") with Customers. Pursuant to the New Loan Agreement, Customers issued the Borrowers a term loan in the principal amount of $6.0 million (the "New Loan"). The New Loan Agreement, which amended and restated the terms of the Prior Loan, did not result in the Borrowers receiving any additional loan proceeds. Interest is payable on the New Loan at a rate equal to the greater of (a) the prime rate published in The Wall Street Journal or (b) 6.0%. The New Loan matures on July 15, 2029 (the "Maturity Date"). The Borrowers are required to pay interest on the New Loan monthly until January 15, 2025. Thereafter, the Borrowers are required to pay equal monthly installments of principal plus accrued interest until the Maturity Date. There is no penalty for prepayment of the New Loan. Pursuant to the New Loan Agreement, the Borrowers have granted Customers security interests in substantially all of the Borrowers' assets, other than intellectual property. HelloTech is required to maintain an operating account with Customers with a sufficient balance to support monthly payments. Additionally, the Borrowers are collectively required to maintain a liquidity ratio of at least 4.00, tested monthly, which is calculated as the quotient of unrestricted cash and cash equivalents of the Company and its subsidiaries (subject to certain limitations with respect to cash of foreign subsidiaries), divided by all outstanding indebtedness owed to Customers. As of June 30, 2024, the Company's unrestricted cash and cash equivalents and current and non-current available-for-sale securities were approximately $110 million. The New Loan Agreement contains various c

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. On July 15, 2024, in a private placement concurrent with the Company's entry into the New Loan Agreement, the Company issued a warrant to Customers to purchase 1,000,000 shares of the Company's common stock (the "Warrant"). The Warrant has an exercise price of $1.25 per share, is exercisable immediately and will expire six years from the date of issuance, or July 15, 2030. Such issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

01 Regulation FD

Item 7.01 Regulation FD. As noted above, as of June 30, 2024, the Company's total cash and cash equivalents and current and non-current available-for-sale securities were approximately $110 million. The amount shown in the preceding paragraph is unaudited and does not account for any current or non-current liabilities, including but not limited to deferred revenue, accrued liabilities, accounts payable, litigation reserves or any negative cash flow after June 30, 2024. The total amount of these impacts cannot be determined until the Company's ongoing restatement of its historical financial statements (the "Restatement") is complete. Readers should not make an investment decision solely based on the financial information contained in this Report because this Report does not provide a complete view of the Company's current financial position. The Company intends to provide its comprehensive financial position in connection with completion of the Restatement, and readers should review such information when available. The Company assumes no obligation to update or revise these amounts, whether as a result of new information, future events or otherwise, except as required by law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission. The information set forth in Item 7.01 shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. Exhibit Number Description 4.1 Warrant, dated as of July 15, 2024, by and between the Company and Customers Bank. 10.1* Amended and Restated Loan and Security Agreement , by a nd amon g the Company, Latch Systems, Inc., H elloTech, Inc. a nd C ustomers Bank, dated as of Ju ly 1 5 , 2024. 104 Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101). * A schedule to this exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish a copy of any omitted schedule to the SEC upon request.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Latch, Inc. Date: July 15, 2024 By: /s/ Priyen Patel Name: Priyen Patel Title: Senior Vice President and General Counsel

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View this 8-K filing on SEC EDGAR