Item 1.01. Entry into a Material Definitive Agreement.
On May 5, 2020, Funko Acquisition Holdings, L.L.C., Funko Holdings LLC, Funko,
LLC, Loungefly, LLC and Funko Games, LLC (collectively, the "Borrowers"), each a
wholly owned indirect or direct subsidiary of Funko, Inc. (the "Company"),
entered into a Third Amendment (the "Third Amendment") to the Company's Credit
Agreement, dated as of October 22, 2018 and amended February 11, 2019 and
September 23, 2019 (the "Credit Agreement"), among the Borrowers party thereto
and each lender from time to time party thereto. The Third Amendment amended and
modified the Credit Agreement to, among other things, (i) waive the financial
covenants under the Credit Agreement for the fiscal quarters ending June 30,
2020 and September 30, 2020 (the "Waiver Period"), (ii) add a requirement to
maintain a minimum liquidity of at least $30.0 million until the Leverage Ratio
(as defined in the Credit Agreement) for the most recently ended four
consecutive fiscal quarter period is less than 2.50 to 1.00, (iii) hold the
incurrence ratios for certain restricted payments, investments and dispositions
at the levels applicable prior to the effectiveness of the Third Amendment,
(iv) increase the interest and fees payable under the Credit Agreement from the
date of Third Amendment through (but excluding) the first date on which the
Company receives cumulative net cash proceeds of at least $50.0 million from
certain issuances of permitted equity or convertible subordinated debt and
(v) allow that any calculation of Consolidated EBITDA (as defined in the Credit
Agreement) that includes the fiscal quarter ended December 31, 2019 may include
non-cash expenses for inventory write-downs incurred by the Company during such
quarter.
Following the Waiver Period, the Third Amendment adjusts the required leverage
levels for the Leverage Ratio to provide the Company with additional flexibility
when it is re-imposed at the end of the Waiver Period.
This description of the Amendment does not purport to be complete, and is
subject to and qualified in its entirety by reference to the full text of the
Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K,
and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The foregoing disclosure in Item 1.01 hereof is incorporated by reference into
this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
Exhibit 10.1 Amendment No. 3, dated as of May 5, 2020, among Funko
Acquisition Holdings, L.L.C., Funko Holdings LLC, Funko, LLC,
Loungefly, LLC, Funko Games, LLC, and each lender from time to
time party thereto.
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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