Cerence Inc. Secures $150M Revolving Credit Facility

TL;DR

Cerence just locked down a $150M credit line to boost its cash position.

AI Summary

On April 12, 2024, Cerence Inc. entered into a material definitive agreement, specifically a credit agreement for a new $150 million revolving credit facility. This agreement creates a direct financial obligation for the company.

Why It Matters

This new credit facility provides Cerence Inc. with increased financial flexibility and liquidity, which can be crucial for operational needs and strategic initiatives.

Risk Assessment

Risk Level: low — The filing reports the establishment of a standard credit facility, which is a common financial practice and does not inherently indicate elevated risk.

Key Numbers

• $150M — Revolving Credit Facility (Provides increased liquidity for Cerence Inc.)

Key Players & Entities

• Cerence Inc. (company) — Registrant
• $150 million (dollar_amount) — Revolving credit facility amount
• April 12, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.01 — nge on which registered Common stock, $0.01 par value CRNC The NASDAQ Stock Mar
• $5 million — greement) of not less than (A) negative $5 million for the six month period ending June 30
• $7.5 million — month period ending June 30, 2024, (B) $7.5 million for the nine month period ending Septem
• $20 million — h period ending September 30, 2024, (C) $20 million for the four consecutive fiscal quarter
• $30 million — quarters ending December 31, 2024, (D) $30 million for the four consecutive fiscal quarter
• $35 million — cal quarters ending March 31, 2025, (E) $35 million for the four consecutive fiscal quarter
• $40 million — quarters ending September 30, 2025, (F) $40 million for the four consecutive fiscal quarter
• $50 million — 26; (iii) minimum liquidity of at least $50 million; and (iv) aggregate capital expenditure
• $10 million — e capital expenditures of not more than $10 million. Amendment No. 3 revised certain inte

Filing Documents

• d823611d8k.htm (8-K) — 28KB
• d823611dex101.htm (EX-10.1) — 1055KB
• 0001193125-24-095496.txt ( ) — 1458KB
• crnc-20240412.xsd (EX-101.SCH) — 3KB
• crnc-20240412_lab.xml (EX-101.LAB) — 18KB
• crnc-20240412_pre.xml (EX-101.PRE) — 11KB
• d823611d8k_htm.xml (XML) — 4KB

From the Filing

8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 12, 2024 CERENCE INC. (Exact name of Registrant as Specified in Its Charter) Delaware 001-39030 83-4177087 (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.) 25 Mall Road , Suite 416 Burlington , Massachusetts 01803 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (857) 362-7300 Not Applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, $0.01 par value CRNC The NASDAQ Stock Market LLC Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ( 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ( 240.12b-2 of this chapter). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Item1.01 Entry into a Material Definitive Agreement. Third Amendment to Credit Agreement On April 12, 2024 (the " Amendment No. 3 Effective Date "), Cerence Inc. (the " Borrower " or the " Company ") entered into Amendment No. 3 to Credit Agreement (the " Amendment "), by and among the Borrower, the lenders and issuing banks party thereto and Wells Fargo Bank, N.A., as administrative agent (the " Administrative Agent "), which amends certain terms of the Credit Agreement, dated as of June 12, 2020, by and among the Company, the lenders and issuing banks party thereto and Wells Fargo Bank, N.A., as administrative agent (as amended by Amendment No. 1, dated December 17, 2020, Amendment No. 2, dated November 22, 2022 and the Amendment, and as further amended, supplemented, or otherwise modified, the " Credit Agreement "). Amendment No. 3 modified certain financial covenants. Tested quarterly, the Company will be required to maintain (i) a net secured leveraged ratio of not greater than 3.00 to 1.00; (ii) a minimum level of EBITDA (as defined in the Credit Agreement) of not less than (A) negative $5 million for the six month period ending June 30, 2024, (B) $7.5 million for the nine month period ending September 30, 2024, (C) $20 million for the four consecutive fiscal quarters ending December 31, 2024, (D) $30 million for the four consecutive fiscal quarters ending March 31, 2025, (E) $35 million for the four consecutive fiscal quarters ending June 30, 2025 and for the four consecutive fiscal quarters ending September 30, 2025, (F) $40 million for the four consecutive fiscal quarters ending December 31, 2025, and (G) $40 million for the four consecutive fiscal quarters ending March 31, 2026; (iii) minimum liquidity of at least $50 million; and (iv) aggregate capital expenditures of not more than $10 million. Amendment No. 3 revised certain interest rates in the Credit Agreement. The applicable margin is SOFR plus 3.00% for SOFR loans and the highest of (i) the federal funds effective rate, (ii) the prime rate, and (iii) one-month SOFR plus 1.00% (the highest of clauses (i) through (iii), the "ABR") plus 2.00% for ABR loans. Amendment No. 3 also modified the maturity date for the revolving facility. The revolving facility matures on April 1, 2026, provided that if on any date during the period commencing on the date which is 91 days prior to the maturity date of the Company's 3.00% Convertible Senior Notes due 2025 and any indebtedness incurred to refinance such notes that matures on or prior to July 1, 2026 (such debt, the "early maturity debt"), and ending on July 1, 2026, the maturity date of such early maturity debt has not been extended to a date after July 1, 2026 and the Company does not hold in a segregated deposit account an amount of cash sufficient to repay and discharge the principal amount of the early maturity debt at maturity, then the revolving facility shall mature on the date that is 91 days prior to