Adesto Technologies (IOTS) said Thursday the company amended its current debt agreement with Bridge Bank, a division of Western Alliance Bank, to expand borrowing capacity under a working capital line of credit, defer principal payments on a term loan and lower interest rates. Shares climbed almost 3% intraday.
Under the new terms, the borrowing capacity has been increased from $2 million to $5 million, according to a statement. The repayment of the term loan will consist of interest only for the first 12 months, followed by amortization of principal and interest over the subsequent 36 months.
The new debt service payments will be reduced to about $1.0 million per quarter, beginning October 2018, compared with previous payments of roughly $1.6 million, resulting in savings of almost $6.4 million over the next 12 months.
Furthermore, the interest rate on the working capital line has been lowered by 25 basis points and by 50-75 basis points on the term loan, depending on certain liquidity ratios, the statement noted.
The company has made “significant progress over the past year across our business,” which has resulted in significant topline growth, higher gross margins, and stable operating expense levels, CFO Ron Shelton said.
Shares traded near the top end of their 52-week price range of $1.50 – $8.15.