Amended Current Report Filing (8-k/a)
March 19 2018 - 6:09AM
Edgar (US Regulatory)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K/A
Current
Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 16, 2018 (March 8, 2018)
FUNKO, INC.
(Exact name
of registrant as specified in its charter)
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Delaware
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001-38274
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3-2593276
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(State or other jurisdiction of
incorporation or organization)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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2802 Wetmore Avenue
Everett, Washington
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98201
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code: (425)
783-3616
Not applicable
(Former name or former address, if changed since last report)
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:
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to
Rule 14a-12
under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to
Rule 14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to
Rule 13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
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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. ☒
Explanatory Note
On March 8, 2018, Funko, Inc. (the Company) filed a Current Report on Form
8-K
furnishing under Items 2.02 and 9.01 of the Form
8-K
the Companys press release announcing its unaudited financial results for the quarter and year ended December 31, 2017 (the Original
Filing). The full text of the press release was included as Exhibit 99.1 to the Original Filing.
The purpose of this Current Report
on Form
8-K/A
is to amend certain of the results and amend the financial tables that were included in Exhibit 99.1 to the Original Filing to reflect the impact of the March 15, 2018 announcement of Toys
R Us, Inc., one of the Companys customers, relating to the wind down of its U.S. operations and the potential insolvency proceedings of certain of its subsidiaries and to reflect certain balance sheet reclassifications relating to
the accounting for the Companys acquisition of Underground Toys Limited (Underground Toys).
Item 2.02.
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Results of Operations and Financial Condition.
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On March 16, 2018, the Company
disclosed its amended financial results for the quarter and year ended December 31, 2017. The amended financial results are furnished as Exhibit 99.1 to this Current Report on Form
8-K/A.
On March 15, 2018, after the Company had released earnings for the quarter and year ended December 31, 2017, Toys R Us,
Inc. announced the filing of a motion seeking approval from the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division to begin the process of conducting an orderly wind-down of its U.S. business and close all of its
remaining retail stores in the United States (the Liquidation).
In accordance with U.S. generally accepted accounting
principles, the Company revised its financial results for the fourth quarter and full year ended December 31, 2017 to reflect the effects of the Liquidation. Based on the information available to management, the Company increased the allowance
for doubtful accounts within Accounts receivable, net by $2.0 million, which represents the remaining unpaid accounts receivable balance from Toys R Us that was outstanding at December 31, 2017. This adjustment is reflected as
bad debt expense in Selling, general, and administrative expenses for the year ended December 31, 2017. The following table reflects the changes to the Companys Condensed Consolidated Statements of Operations for the three months and year
ended December 31, 2017 from the previously released unaudited financial results.
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Three Months Ended December 31, 2017
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Year Ended December 31, 2017
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($s in thousands, except per share amounts)
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As Reported
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Adjustment
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As Amended
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As Reported
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Adjustment
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As Amended
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Selling, general, and administrative expenses
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$
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35,545
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$
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1,987
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$
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37,532
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$
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118,957
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$
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1,987
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$
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120,944
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Income tax expense
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757
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(263
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494
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1,803
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(263
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1,540
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Total operating expenses
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148,110
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1,987
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150,097
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471,952
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1,987
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473,939
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Income (loss) from operations
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21,364
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(1,987
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19,377
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44,132
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(1,987
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42,145
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Income (loss) before income taxes
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9,982
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(1,987
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7,995
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9,127
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(1,987
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7,140
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Net income (loss)
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9,225
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(1,724
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7,501
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7,324
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(1,724
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5,600
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Less:
net income attributable to
non-controlling
interests
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2,902
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(1,027
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1,875
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2,902
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(1,027
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1,875
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Net income (loss) attributable to Funko, Inc.
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6,323
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(697
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5,626
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4,422
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(697
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3,725
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Earnings per share of Class A common stock:
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Basic
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$
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0.07
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$
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(0.03
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$
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0.04
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$
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0.07
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$
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(0.03
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$
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0.04
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Diluted
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$
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0.07
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$
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(0.03
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$
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0.04
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$
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0.07
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$
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(0.03
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$
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0.04
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In addition, subsequent to the Companys earnings release on March 8, 2018, and while
completing the audit of the Companys UK subsidiarys statutory accounts and the final purchase accounting for the Underground Toys acquisition, the Company identified various balance sheet reclassifications. These balance sheet
adjustments resulted in a reduction of $10.6 million to both Total current assets and Total current liabilities on the Companys Condensed Consolidated Balance Sheet as of December 31, 2017. None of the adjustments impacted the statement of
operations for the three months or for the year ended December 31, 2017 and primarily related to the presentation of certain accounts net versus gross. The following table reflects the changes to the Companys Condensed Consolidated
Balance Sheet as of December 31, 2017 from the previously released unaudited financial results and includes the impact of the foregoing reclassifications and the $2.0 million bad debt allowance related to Toys R Us.
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At December 31, 2017
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($s in thousands)
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As Reported
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Adjustment
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As Amended
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Accounts receivable, net
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$
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122,842
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$
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(7,364
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$
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115,478
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Inventory
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84,338
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(5,256
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79,082
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Accounts payable
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52,504
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924
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53,428
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Income taxes payable
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2,393
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(125
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2,268
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Accrued royalties
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31,261
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(5,292
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25,969
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Accrued expenses and other current liabilities
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33,298
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(6,266
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27,032
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Deferred tax liability
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725
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(137
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588
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Retained earnings (deficit)
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1,738
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(697
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1,041
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Non-controlling
interests
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151,015
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(1,027
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149,988
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The foregoing corrections are also contained in the corrected financial tables attached as Exhibit 99.1
hereto.
The information in this Item 2.02 of this Current Report on Form
8-K/A
(including Exhibit
99.1) shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01
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Financial Statements and Exhibits.
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The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
SIGNATURE
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.
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FUNKO, INC.
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By:
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/s/ Tracy D. Daw
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Name:
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Tracy D. Daw
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Title:
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Sr. Vice President, General Counsel, and Secretary
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Date: March 16, 2018
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