| Item 1.01. | Entry into a Material Definitive Agreement. |
On November 1, 2023, Brightcove Inc. (the “Company”) entered into a Fourth Loan Modification Agreement (“Loan Modification”) to modify the terms of the Company’s Second Amended and Restated Loan and Security Agreement (as amended and in effect, the “Second Restated Loan Agreement”) with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Bank”), dated December 14, 2018.
The Loan Modification provides for the extension of the maturity date of amounts due under the Second Restated Loan Agreement until three years from the date of the Loan Modification, and provides that the Company may, in addition to making requests for advances of funds that accrue interest at the prime rate plus 2.25%, make requests for advances that accrue interest at the greater of (A) the secured overnight financing rate (“SOFR”) plus 2.25% or (B) four percent (4.0%). The Loan Modification also makes corresponding amendments and additions to defined terms and amends certain provisions related to the provision of financial statements. In addition, the Loan Modification provides that testing of certain of the Company’s financial covenants shall cease upon a financial covenant change event (a “Financial Covenant Change Event”) in which the Bank confirms in writing, on or after March 31, 2024, that (a) the Bank has received evidence satisfactory to the Bank, that (i) the Company has, for the twelve (12) month period ending the last day of the most recent calendar quarter, adjusted EBITDA of at least $5,000,000.00, and (ii) on a pro forma basis (after giving effect to the Financial Covenant Change Event), the Company is projected to (x) maintain a Total Gross Leverage Ratio (as defined in the Loan Modification), on a trailing twelve (12) month basis, not to exceed 2:0 to 1:0 and (y) achieve an Interest Coverage Ratio (as defined in the Loan Modification) of at least 3.0 to 1.0, as of the last day of such calendar quarter, and (b) the Company has requested in writing that it be required to maintain the financial covenants set forth in the Loan Modification related to the Total Gross Leverage Ratio and the Interest Coverage Ratio instead of certain existing financial covenants. The Loan Modification also increases the maximum aggregate consideration that can be paid by the Company or its subsidiaries in a permitted transaction to $30,000,000.
The remaining terms and conditions of the Second Restated Loan Agreement generally continue in the form existing prior to the Loan Modification. As of November 1, 2023, no amounts are outstanding under the Second Restated Loan Agreement.
The foregoing description of the Loan Modification and Second Restated Loan Agreement is qualified in its entirety by reference to the full text of the Loan Modification, which is attached hereto as Exhibit 10.1, and the full text of the Second Restated Loan Agreement previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2018, each of which are incorporated by reference herein.
| Item 2.02. | Results of Operations and Financial Condition. |
On November 1, 2023, the Company issued a press release announcing certain financial and other information for the quarter ended September 30, 2023. The full text of the press release and the related attachments are furnished as Exhibit 99.1 hereto and incorporated herein by reference.
