Arctaris
Structure
Standard Loan Base:
Current coupon, paid monthly, with 5-year principal amortization
Senior secured or subordinate with UCC perfected lien
Low total leverage ratios of 1.0-2.5x
Royalty Enhancement:
Royalties pay a percentage of incremental sales
Royalties are secured by same lien as base loan
Inflation protection through sales peg
Company benefits:
Less or non-dilutive to founders, VCs, shareholders
Flexible/affordable obligation that matches company's payments with revenue growth
Payments are tax deductible after repayment of principal
Transparent model –no hidden valuation formulas
No forced exit needed to satisfy Investors' need for liquidity
Interests are aligned to grow the top-line revenue
 
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