Build-A-Bear Workshop Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Financial Statements and Exhibits

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 31, 2025

 

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(Exact Name of Registrant as Specified in Its Charter)

 

 

 

(314) 423-8000

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(Registrant’s Telephone Number, Including Area Code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐         Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐         Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Securities registered pursuant to Section 12(b) of the Act:

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company     ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

 

Item 1.01.         Entry into a Material Definitive Agreement.

 

On December 31, 2025, Build-A-Bear Workshop, Inc. (the “Company”), as borrowing agent; Build-A-Bear Retail Management, Inc., together with the Company, as borrowers (collectively, the “Borrowers”); and Build-A-Bear Workshop Franchise Holdings, Inc., Build-A-Bear Entertainment, LLC, Build-A-Bear Card Services, LLC and Build-A-Bear Workshop Canada, Ltd. (collectively, the “Guarantors”); entered into a Third Amendment to Revolving Credit and Security Agreement (the “Third Amendment”) with the lenders party thereto (the “Lenders”) and PNC Bank, National Association, as agent for Lenders (in such capacity, “Agent”). The Third Amendment amended the Revolving Credit and Security Agreement, dated as of August 25, 2020 (the “Original Credit Agreement”), as amended by the First Amendment, dated as of December 17, 2021 (the “First Amendment”) and by the Second Amendment, dated as of November 21, 2022 (the “Second Amendment”, and together with the Original Credit Agreement, the First Amendment and the Third Amendment, the “Credit Agreement”), among the Company, the Borrowers, the Guarantors, the Lenders, and the Agent. All capitalized terms used in this Item 1.01 and not otherwise defined in this Item 1.01 shall have the meanings given in the Credit Agreement.

 

Among other things and as described below, the Third Amendment: (i) increased the base borrowing amount under the facility from $25.0 million to $40.0 million (while retaining the accordion feature allowing such amount to increase up to $50.0 million); (ii) reduced the interest rates for borrowings under the facility; (iii) extended the maturity date of the Credit Agreement to December 31, 2030; and (iv) reduced the facility fee related to undrawn availability. The Third Amendment also updated various provisions regarding compliance with sanctions and anti-money laundering laws and implemented certain other technical amendments.

 

As amended, the Credit Agreement provides for a senior secured revolving loan in aggregate principal amount of up to $40.0 million (subject to a borrowing base formula), which may be increased with the consent of the Lenders by an amount not to exceed $10.0 million, subject to the conditions set forth in the Credit Agreement (the “Increase Option”). The borrowing base under the Credit Agreement continues to be based on specified percentages of Eligible Credit Card Receivables, Eligible Inventory and, under certain circumstances, Eligible Foreign In-Transit Inventory and, in the discretion of the Agent, Eligible Receivables. The Credit Agreement continues to provide for swingline loans of up to $5.0 million and the issuance of standby or commercial letters of credit of up to $5.0 million.

 

Revolving advances under the Credit Agreement will continue to be secured (subject to permitted liens and certain other exceptions) by a first priority lien on substantially all of the personal property of the Company and all of its U.S. and Canadian subsidiaries, including certain receivables (including receivables from the sale inventory and credit card receivables but excluding certain franchise receivables), equipment and fixtures, intellectual property, inventory and equity interests held by the Borrowers and the Guarantors in their respective domestic and foreign subsidiaries.

 

Borrowings under the Credit Agreement continue to bear interest by reference to, at the Borrower’s option, either (a) a base rate determined under the Credit Agreement, or (b) at a rate based on a secured overnight financing rate (“SOFR”) reference rate, plus in either case a margin based on average undrawn availability as determined in accordance with the Credit Agreement, but the Third Amendment reduced such rates. The Third Amendment reduced the facility fee percentage on undrawn commitments under the Credit Agreement from 0.25% to 0.20%.

 

 

The Third Amendment extended maturity date of the Credit Agreement to December 31, 2030 (unless terminated earlier in accordance with the terms thereof).

 

The Credit Agreement continues to require the Company to comply with one financial covenant, requiring the Company to maintain availability (as determined in accordance with the Credit Agreement) at all times equal to or greater than the greater of (a) 10.0% of the Loan Cap and (b) $1,875,000 (subject to increase upon exercise of the Increase Option). The Third Amendment increased the “Loan Cap” to the lesser of (1) $40.0 million less the outstanding amount of loans and letters of credit under the Credit Agreement and (2) the borrowing base from time to time under the Credit Agreement. The Credit Agreement continues to contain various information and reporting requirements, which may be reduced under certain circumstances.

 

The Credit Agreement continues to contain customary events of default, including without limitation events of default based on payment obligations, material inaccuracies of representations and warranties, covenant defaults, final judgments and orders, unenforceability of the Credit Agreement, material ERISA events, change in control, insolvency proceedings, and defaults under certain other obligations. An event of default may cause the applicable interest rate and fees to increase by 2% until such event of default has been cured, waived, or amended.

 

The Credit Agreement continues to contain typical negative covenants, including, among other things, that the Borrower will not incur indebtedness except for permitted indebtedness or make any investments except for permitted investments, declare dividends or repurchase its stock except as permitted, acquire any subsidiaries except in connection with a permitted acquisition, or merge or consolidate with any other entity or acquire all or substantially all of the assets of any other company outside the ordinary course of business.

 

At the closing date of the Third Amendment, the Borrowers had no outstanding borrowings under the Credit Agreement and the Company is currently in compliance with the Credit Agreement covenants.

 

 

The Company has or may have had customary banking relationships with PNC based on the provision of a variety of financial services, including lending, commercial banking and other advisory services.

 

The foregoing description of the Third Amendment is only a summary of material terms and conditions of such document and is qualified in its entirety by reference to the Third Amendment, which is filed as Exhibit 10.1 hereto and is incorporated by reference herein. In addition, the Company has previously filed (i) the Original Credit Agreement as Exhibit 10.1 to its Current Report on Form 8-K, filed on August 31, 2020, (ii) the First Amendment as Exhibit 10.1 to its Current Report on Form 8-K, filed on December 22, 2021 and (iii) the Second Amendment as Exhibit 10.1 to its Current Report on Form 8-K, filed on November 23, 2022.

 

 

Item 9.01          Financial Statements and Exhibits.

 

(d) Exhibits         

 

 

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.