Synchronoss Technologies Inc

ITEM 1A. RISK FACTORS

TOthere h than set forth below, there have been no material changes to our risk factors as previously disclosed in Part I, Item 1A. included in our Annual Report on Form 10-K for the year ended December 31, 2024.

The terms of our Credit Agreement restrict our operating and financial flexibility, and any breach of the covenants in that agreement, if the lenders elected to accelerate the due date of the loan, could significantly harm our business and prospects and lead to the liquidation of our business. 

On June 28, 2024, we entered into a Credit Agreement with BGC Lender Rep LLC, as administrative agent and the lenders party thereto (the Original Credit Agreement), which was subsequently amended by that certain First Amendment to Credit Agreement and Pledge and Security Agreement dated April 24, 2025 (the 2025 Term Loan Agreement and the Original Credit Agreement, as amended by the First Amendment, the 2024 Term Loan Agreement). The 2025 Term Loan Agreement established a senior secured term loan of up to $200.0 million (the 2025 Term Loan), all of which was funded on April 24, 2025. The 2025 Term Loan matures on April 24, 2029, subject to an earlier springing maturity date that is nine months prior to the effective date of termination, forfeiture, non-renewal, cancellation, revocation or suspension of certain material contracts if unreplaced in accordance with the terms of the 2025 Term Loan Agreement (the Springing Maturity Date). In the event of a Springing Maturity Date, we will be required to pay all amounts outstanding under the 2025 Term Loan sooner than they would otherwise be due. We may not have sufficient funds available to pay such amounts at that time, and we may not be able to raise additional funds to pay such amounts on a timely basis, on terms we find acceptable, or at all.

The 2025 Term Loan Agreement contains certain operating covenants and restricts our operating and financial flexibility. Our obligations under the 2025 Term Loan Agreement are secured by substantially all of our assets (other than existing real property). The 2025 Term Loan Agreement contains customary covenants that limit our ability and our restricted subsidiaries to, among other things, (i) incur additional indebtedness, (ii) pay dividends or make certain other restricted payments, (iii) sell assets, (iv) make certain investments, (v) grant liens and (vi) enter into transactions with affiliates. These covenants are subject to exceptions and qualifications set forth in the 2025 Term Loan Agreement. The financial covenants set forth in the 2025 Term Loan Agreement include (i) a maximum consolidated secured leverage ratio, which will be tested at the end of each of Synchronoss fiscal quarters, (ii) a covenant tested monthly with respect to a minimum number of subscribers under certain material contracts and (iii) an average liquidity requirement for any calendar month. As of June 30, 2025, we were currently in compliance with the 2025 Term Loan Agreement covenants, but we may fall out of compliance with these covenants. We may also enter into other debt agreements in the future which may contain similar or more restrictive terms.

Upon the occurrence and continuance of an event of default, which, for example, would be triggered by a breach or violation of, default under, cancellation, termination, forfeiture, rescission, revocation, suspension, impairment or non-renewal of certain material contracts of the Company, BGC may take either or both of the following actions: (i) terminate the commitments and (ii) declare all outstanding obligations immediately due and payable and take such other actions as set forth in the 2025 Term Loan Agreement. Any declaration by BGC of an event of default could significantly harm our business and prospects and could cause the price of our common stock to decline significantly. Further, if we were liquidated, the lenders rights to repayment would be senior to the rights of our stockholders.