Item 1.01. Entry into a Material Definitive
Agreement
On October 28, 2022, Zedge,
Inc. (the “Registrant” or “Company”) entered into an Amended and Restated Loan and Security Agreement (“Amended
Loan Agreement”) with Western Alliance Bank. Pursuant to the Amended Loan Agreement, Western Alliance Bank agreed to provide the
Company with a term loan facility in the maximum principal amount of $7,000,000 for a four-year term and a $4,000,000 revolving credit
facility for a two-year term. Amounts outstanding under the term loan and credit facility of the Amended Loan Agreement bear interest
at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 0.5%, with a Prime “floor” rate
of 4.00%.
Pursuant to the Amended Loan
Agreement, $2,000,000 was advanced in a single-cash advance on October 28, 2022, with the remaining $5,000,000 of the term loan available
for drawdown during twenty-four (24) months after closing. Each drawdown must be in an amount of not less than One Million Dollars ($1,000,000).
Interest accrued under the
Amended Loan Agreement is due monthly, and the Company is required to make monthly interest-only payments related to the term loan through
the eighteen (18) month anniversary of the date of the agreement. Outstanding principal amounts of the term loan will be amortized from
the nineteen (19) month anniversary of the agreement date through the maturity date. Once repaid, a Term Advance may not be reborrowed.
The Amended Loan Agreement
may also require early repayments if certain conditions are met. The Amended Loan Agreement is secured by substantially all of the assets
of the Company, its subsidiaries, and certain of its affiliates.
The Amended Loan Agreement
includes financial covenants regarding the ratio of EBITDA (as defined in the Amended Loan Agreement) to forecasted debt service payments
and the ratio of total borrowings to EBITDA.
The Amended Loan Agreement
also includes customary negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain
liens, investments, acquisitions, dispositions of assets, restricted payments and the business activities of the Company, as well as customary
representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default.
The information set forth
above in this Item 1.01 does not purport to be complete in scope and is qualified in its entirety by the full text of the Amended Loan
Agreement, attached to this Current Report as Exhibit 10.1, which is incorporated into this Item 1.01 by reference.
Item 1.02. Termination of a Material Definitive
Agreement
On October 28, 2022, the Company
entered into the Amended Loan Agreement with Western Alliance Bank. Pursuant to the Amended Loan Agreement, the Company discontinued the
existing $2,000,000 revolving credit facility under the existing Loan and Security Agreement, dated as of September 26, 2016, as amended,
restated, supplemented and otherwise modified from time to time prior to the date of the Amended Loan Agreement. At the time of the discontinuance,
there was no outstanding balance on the revolving credit facility.