UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the
Registrant ☒ Filed by a Party other than the
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
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Mudrick
Capital Acquisition Corporation II
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Date Filed:
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On June 23, 2021, The Topps Company, Inc., will be holding discussions with prospective
debt financing sources and other persons and will utilize the following presentation in connection with such discussions.
Lender Presentation June 2021 Exhibit
99.1
Disclaimer This Presentation
(“Presentation”) is for informational purposes only to assist interested parties in making their own evaluation with respect to the proposed business combination (the “Business Combination”) between Mudrick Capital
Acquisition Corporation II (“MUDS”) and Topps Intermediate Holdco, Inc. (“Topps”) and for no other purpose. Neither MUDS nor Topps nor any of their respective subsidiaries, stockholders, affiliates, representatives, control
persons, partners, directors, officers, employees, advisers or agents make any representation or warranty, express or implied, as to the value that may be realized in connection with the Business Combination, the legal, regulatory, tax, financing,
accounting or other effects of the Business Combination or the accuracy or completeness of the information contained in this Presentation, and none of them shall have any liability based on or arising from, in whole or in part, any information
contained in, or omitted from, this Presentation or for any other written or oral communication transmitted to any person or entity in the course of its evaluation of the Presentation. Only those representations and warranties that are expressly
made in a definitive written agreement, if executed, and subject to the limitations and restrictions specified therein, shall have any legal effect. You should consult your own counsel and tax and financial advisors as to legal and related matters
concerning the matters described herein, and, by accepting this Presentation, you confirm that you are not relying upon the information contained herein to make any decision. The general explanations included in this Presentation cannot address, and
are not intended to address, your specific investment objectives, financial situations or financial needs. Presentation of Financial Information This Presentation includes preliminary unaudited financial results of Topps for the fiscal quarter ended
April 3, 2021. Topps’ unaudited consolidated financial statements for the quarter ended April 3, 2021 are not yet available. Preliminary unaudited financial results are subject to change, and neither Topps nor any of its affiliates undertakes
any obligation to update this information. These preliminary unaudited financial results may differ from actual results. Actual results remain subject to the completion of management’s and the audit committee’s final review, as well as
the year-end audit. During the course of the preparation of the financial statements and related notes and the year-end audit, additional items that require material adjustments to the preliminary unaudited financial information included in this
Presentation below may be identified. Therefore, you should not place undue reliance upon these preliminary unaudited financial results. Topps’ independent registered public accounting firm, BDO USA, LLP (“BDO”), has not completed
its audit, review and procedures with respect to this preliminary unaudited financial information and, accordingly, BDO does not express an opinion or any other form of assurance with respect thereto. The pro forma financial information and data
contained in this Presentation is unaudited and does not conform to Article 11 of Regulation S-X promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, such information and data may not be included
in, may be adjusted in or may be presented differently in, the proxy statement for the Business Combination. Use of Data This Presentation contains information derived from third party sources, including research, surveys or studies conducted by
third parties, information provided by customers and/or industry or general publications. While we believe that such third-party information is reliable, neither MUDS nor Topps have independently verified, and neither MUDS nor Topps nor any of their
respective affiliates makes any representation as to the accuracy of, such third party information. Use of Trademarks and Other Intellectual Property All registered or unregistered service marks, trademarks and trade names referred to in this
Presentation are the property of their respective owners, and the use herein does not imply an affiliation with, or endorsement by, the owners of these service marks, trademarks and trade names. Third-party logos included herein may represent
license partners or customers or may be provided simply for illustrative purposes only. Inclusion of such logos does not necessarily imply affiliation with or endorsement by such businesses. There is no guarantee that either MUDS or Topps will work,
or continue to work, with any of the businesses whose logos are included herein in the future. Use of Projections This Presentation contains financial forecasts or projections (collectively “Projections”) prepared by Topps. Topps’
independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to the Projections for the purpose of their inclusion in this Presentation, and accordingly, neither MUDS nor Topps expresses
an opinion or provides any other form of assurance with respect thereto for the purpose of this Presentation. These Projections should not be relied upon as being necessarily indicative of future results. The Projections presented herein are
provided solely for illustrative purposes, reflect the current beliefs of Topps as of the date hereof, and are based on a variety of assumptions and estimates about, among others, future operating results, market conditions, any transaction costs,
all of which may differ from the assumptions on which the Projections herein are based. Neither Topps nor any of its affiliates assumes any obligation to update the Projections or information, data, models, facts or assumptions underlying the
Projections in this Presentation. See “Cautionary Language Regarding Forward-Looking Statements.” Non-GAAP Financial Measures This Presentation includes certain non-GAAP financial measures, including Adjusted EBITDA and Pro Forma
Adjusted EBITDA, that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Please see slide 39 for a reconciliation of non-GAAP financial measures to the most closely comparable GAAP
measures. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. To the extent that forward-looking non-GAAP financial measures are provided, they are
presented on a non-GAAP basis without reconciliations of such forward-looking non-GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. MUDS and Topps believe these
non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Topps’ financial condition and results of operations. MUDS and Topps believe that the use
of these non-GAAP financial measures provides an additional tool for investors to use in evaluating projected operating results and trends. Topps' method of determining these non-GAAP measures may be different from other companies' methods and,
therefore, may not be comparable to those used by other companies and Topps does not recommend the sole use of these non-GAAP measures to assess its financial performance.
Disclaimer (cont.) Cautionary Language
Regarding Forward-Looking Statements This Presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,”
“estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking
statements may include estimated financial information, including with respect to revenues, earnings, performance, strategies, prospects and other aspects of the businesses of MUDS, Topps or the combined company after completion of the Business
Combination, and are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking
statements. These factors include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could result in the Business Combination not being completed at all or on the expected timeline, including as a result of
the termination of the definitive documentation with respect to the Business Combination or the failure to obtain approval of MUDS’ stockholders or other conditions to closing in the definitive documentation with respect to the Business
Combination; (2) the outcome of any legal proceedings that may be instituted against MUDS or Topps or any of their respective directors or officers, following the announcement of the Business Combination; (3) the ability to meet applicable
NASDAQ listing standards; (4) the risk that the Business Combination disrupts current plans and operations of Topps' business as a result of the announcement and consummation of the Business Combination; (5) the inability to complete the PIPE
Investment; (6) changes in domestic and foreign business, market, financial, political and legal conditions; (7) the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (8) costs related to the Business Combination; (9) changes in
applicable laws or regulations; (10) the impact of the global COVID-19 pandemic or any of the foregoing risks; and (11) other risks and uncertainties indicated from time to time in the proxy statement relating to the Business Combination, including
those under “Risk Factors” therein, and other documents filed or to be filed with the SEC by MUDS. Investors are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Neither
MUDS nor Topps, nor any of their respective affiliates, undertakes any commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements in this
Presentation speak as of the date of this Presentation. Although MUDS may from time to time voluntarily update its prior forward-looking statements, it disclaims any commitment to do so whether as a result of new information, future events, changes
in assumptions or otherwise except as required by applicable securities laws. No Offer or Solicitation This Presentation shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the
Business Combination. This Presentation shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the Securities Act,
or an exemption therefrom. INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR ANY OTHER REGULATORY AUTHORITY NOR HAS ANY AUTHORITY PASSED UPON OR
ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Additional Information About the Proposed Business Combination and Where to Find It In
connection with the Business Combination involving MUDS and Topps, MUDS filed a preliminary proxy statement with the SEC on May 12, 2021 as amended on May 13, 2021 and June 22, 2021. This Presentation does not contain all the information that should
be considered concerning the Business Combination and is not intended to form the basis of any investment decision or any other decision in respect of the Business Combination. MUDS’ stockholders and other interested persons are advised to
read the preliminary proxy statement, any amendments thereto and, when available, the definitive proxy statement and any other documents filed, in connection with MUDS’ solicitation of proxies for its special meeting of stockholders to be held
to approve the Business Combination and other matters, as these materials will contain important information about MUDS, Topps and the Business Combination. When available, the definitive proxy statement and other relevant materials for the Business
Combination will be mailed to stockholders of MUDS as of the record date to be established for voting on the Business Combination. Stockholders of MUDS will also be able to obtain copies of the proxy statement and other documents filed with the SEC,
without charge, once available, at the SEC’s website at www.sec.gov. In addition, the documents filed by MUDS may be obtained free of charge from MUDS by directing a request to: Mudrick Capital Acquisition Corporation II, 527 Madison Avenue,
Sixth Floor, New York, New York 10022. Participants in Solicitation MUDS, Topps and certain of their respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be participants in the
solicitations of proxies from MUDS’ stockholders in connection with the Business Combination. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of MUDS’ stockholders in connection with
the Business Combination will be set forth in MUDS’ proxy statement when it is filed with the SEC. You can find more information about MUDS’ directors and executive officers in MUDS’ Amendment No. 2 to the Annual Report on Form
10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on May 10, 2021. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security
holdings or otherwise, will be included in MUDS’ preliminary and definitive proxy statement when it becomes available. Stockholders, potential investors and other interested persons should read the proxy statement carefully when it becomes
available before making any voting or investment decisions. When available, these documents can be obtained free of charge from the sources indicated above.
Management Presenters Managing Director
at Mudrick Capital since 2010 20+ years of experience analyzing equity opportunities across a diverse range of industries David Kirsch Managing Director David Kirsch Managing Director Business and entertainment executive serving as Disney’s
CEO from 1984 through 2005 Acquired Topps in 2007 with Madison Dearborn Partners, has since served as Chairman Michael Eisner Chairman Michael Eisner Chairman Executive Chairman Andy Redman CEO of The Topps Company since 2016 Joined Topps in 2009 as
General Manager of Global Confections responsible for Bazooka Candy 25+ years of industry experience, including roles at Nabisco and Kraft Foods CFO of The Topps Company since 2014 CFO of XO Group (2008 – 2013) CFO of Genius Products
(2006 – 2008) Michael Brandstaedter President & CEO John Mueller Chief Financial Officer Michael Brandstaedter President and CEO John Mueller CFO Serves as Executive Chairman of Topps and has been a Director on Topps’ Board since the
acquisition in 2007 President & COO of The Tornante Company Andy Redman Executive Chairman Executive Chairman
Transaction Summary
Summary of Transactions Transaction
Summary 3 2 1 The Topps Company, Inc. (“Topps” or the “Company”) is a leading global sports and entertainment company Creates powerful consumer connections through its Sports & Entertainment and Confections businesses
Features an iconic portfolio of physical trading cards, interactive apps, gifting / payment solutions, and confectionary products Generated LTM 4/3/2021 Total Revenue and Pro Forma Adj. EBITDA of $626 million and $115 million(a), respectively (18%
margin) On April 6, 2021, Topps Intermediate Holdco, Inc., the direct parent of Topps, announced its merger with Mudrick Capital Acquisition Corporation II (“Mudrick”). Based upon 6/22/21 closing price of MUDS of $12.25/share, implied
post-money enterprise value of $1.5 billion (the “SPAC Transaction”) SPAC Transaction value represents a 11.1x - 11.9x multiple of 2021 Outlook Adjusted EBITDA range of $130 - $140 million SPAC Transaction funded with Mudrick’s
$321 million of cash in trust and $250 million of committed PIPE financing Upon closing of the transaction, Mudrick will trade on the NASDAQ under ticker “TOPP” under the name “Topps Companies, Inc.” $50 million cash balance
at closing With closing concurrent with the SPAC transaction, Topps is seeking to raise $250 million of new senior secured credit facilities (the “Financing Transaction”) comprised of: $50 million 5-year Revolving Credit Facility,
expected to be undrawn at close $200 million 7-year First Lien Term Loan Proceeds will be used to refinance the Company’s existing credit facilities Pro forma for the Financing Transaction, gross and net leverage will be 1.7x and 1.3x,
respectively off of LTM 4/3/21 Adj. EBITDA Inclusive of $9 million of estimated public company costs. See page 39 in the Appendix for the reconciliation.
Pro Forma Valuation(d) Estimated
Sources and Uses SPAC Transaction Overview Pro Forma Ownership(i) ($ in millions, except per share values) Tornante is rolling over 100% of its shares as part of the Transaction Post Transaction, the company will have a dual class share structure
with super voting rights for Tornante at a ratio of 10:1 (e) (g) (g) (g)(h) Transaction Summary 3 2 1 MUDS II Founder Shares 7% Assumes no redemption by MUDS II's existing shareholders. Actual results in connection with the business combination may
differ. Assumes 24.6 million shares are issued at $10.15 per share. Estimated Total Transaction Expenses for both MUDS II and Topps. Excludes any impact from potential earnout consideration to existing Topps investors. Pro forma share count assumes
no redemption by MUDS II's existing shareholders and includes 31.6 million MUDS II public shares, 7.9 million MUDS II founder shares, 24.6 million PIPE investor shares and 50.4 million shares issued to existing Topps shareholders. Excludes public
and private placement warrants and earnout shares. Represents balance sheet amount as of Q1 2021. With respect to Non-GAAP financial measures, see slide 1 “Non-GAAP Financial Measures” under “Disclaimer” and reconciliation
set forth in Appendix slide 39. Pro forma net leverage represents total funded debt of $195m less $50m of cash at the time of the transaction. Represents estimated economic ownership; assumes no redemptions from trust and $250MM PIPE offering.
Excludes public and private placement warrants and earnout shares. Figures rounded to the nearest percentage. Tornante receives 10-for-1 voting shares. (j) (f)
Senior Secured Credit Facilities
Transaction Overview Sources, Uses & Pro Forma Capitalization Expected to be undrawn at close. Pro forma cash balance upon closing of the Mudrick SPAC transaction will be $50 million. Current principal amount. As of Tuesday, June 22, 2021 at
close. Inclusive of $9 million of estimated public company costs. 2021 Outlook represents the midpoint of $130 – 140 million FY 2021 Outlook. See page 39 in the Appendix for the reconciliation. Transaction Summary 3 2 1
Pro Forma Organizational Structure
Post-Business Combination The Topps Company, Inc. Domestic subsidiaries(a) International subsidiaries(b) $50 million First Lien Senior Secured Revolving Credit Facility $200 million First Lien Senior Secured Term Loan Facility Topps Intermediate
Holdco, LLC (f/k/a Topps Intermediate Holdco, Inc.) Borrower Guarantor Nearly 100% of EBITDA and cash flow sits in the borrower / guarantor group 8 Transaction Summary 3 2 1 Domestic subsidiaries will be guarantors (subject to customary exceptions).
International subsidiaries will not be guarantors. Topps Companies, Inc. Public Company (not party to the credit facilities described below)
Business Overview and Growth Strategy
9
0 Physical (57% of revenue) Digital
(6% of revenue) Gift Cards (5% of revenue) Confections (33% of revenue) Inclusive of $9 million of estimated public company costs. With respect to Non-GAAP financial measures, see slide 1 “Non-GAAP Financial Measures” under
“Disclaimer” and reconciliation set forth in Appendix slide 39. Iconic portfolio of trading cards, stickers and curated experiences, including e-Commerce platform Branded confectionery portfolio delivering “Edible
Entertainment” Global gifting / payment solutions for leading consumer-centric tech companies Interactive apps creating communities of users who collect, trade and play online Sports & Entertainment (67% of revenue) INNOVATION Topps
at-a-glance (LTM Q1 2021): Revenue: $626m | Pro Forma Adj. EBITDA(a): $115m Iconic Portfolio of Brands and Products Creates Powerful Consumer Connections…One Moment at a Time Business Overview and Growth Strategy 1 3 2
Large, Dynamic Trading Cards Industry
11 Physical Sports & Entertainment 1 3 2A
…distributed across multiple
channels …connecting with a broad consumer base… A diversified portfolio of product offerings and price points… Kids Collectors & Fans High-End Enthusiasts Note: Represents a subset of products. Figures based on management
estimates as a percentage of total Physical S&E sales. 2005 1977 2018 1951 2013 2016 2015 2024 2019 2008 2020 Diverse Portfolio of IP Built Upon Long-Term Strategic Licensing Partnerships with Global Iconic Brands Physical Sports &
Entertainment 1 3 2A Hobby 45%(a) e-Commerce 30%(a) Retail 25%(a) ’20A Sales $314m $1 $2 $20 $300 $7,500 $25,000 $50 $150
Unique product identities and growth
strategies drive user experience and portfolio growth Flagship Kid-focused Bowman Vintage Transcendent e-Commerce Entry-level collectibles, appeal to wide range of collectors Collect, trade and play Top prospects and superstars Intersection of
modern baseball and nostalgia One-of-a-kind experience Exclusive, limited edition collectibles Retail Hobby e-Commerce High End Higher price point premium product # of products ~44 # of products ~15 # of products ~10 # of products ~20 # of products
~6 # of products ~21 # of products 125+ Balanced Product Portfolio for Hobby and Retail Channels Year-Round ~44 ~15 ~10 ~20 ~6 ~21 125+ Number of products Physical Sports & Entertainment 1 3 2A 100+ Physical Products, Not Including e-Commerce
Exclusives
Accelerating e-Commerce Revenues
<$5m FY 2015 Revenue ~$92m FY 2020 Revenue Print-On-Demand: Your Team. Your Hero. Your Moment. Growth Through E-Commerce Anticipating macro trends on a global basis Physical Sports & Entertainment – Growth Strategy 1 3 2A Curated Sets
Exclusive Pack Products Influencer Collaborations Archival Collections On-Demand Project 70
Project 2020 Case Study: Unique,
E-Commerce Content Creation Unique, e-Commerce content creation Product created to attract new collectors from adjacent demographics Special collaboration in which 20 renowned artists each re-designed 20 classic baseball cards Each card only
available for 48 hours exclusively through Topps.com Selected cards creating a cultural phenomenon Key takeaways 400 total cards created (20 x 20) 2.5 million cards sold in total 99k Keith Shore Ken Griffey Jr cards sold in 48 hours making it the
highest print run ever on Topps.com 75k+ individual buyers participated in the sale Gained valuable consumer insights through data analytics Special collaboration to commemorate Topps’ 70th anniversary of baseball launched in February Positive
feedback throughout from all participating artists with majority of Project 2020 artists returning for 2021 Mariano Rivera (JK5) Tony Gwynn (Fucci) Cal Ripkin (Sophia Chang) Ben Baller Blake Jamieson Physical Sports & Entertainment –
Growth Strategy 1 3 2A
Fast-Moving Entertainment
Mandalorian Print-on-Demand Influencers Gary Vee & Steve Aoki Digital Usage Among Younger Demo Match Attax App Unboxing Trend Case Breaking Events Changing Retail Landscape Target / Walmart exclusives New Licenses & Extensions Digital
Products Opportunities to leverage relationships and create new, innovative content New game mechanic and ability to print on-demand International Expansion Austria Switzerland Russia Poland Korea Japan China New international sports licenses
targeted; further penetration of core markets worldwide KEY GROWTH AREAS Experiential Events UEFA Champions League Transcendent Numerous events hosted annually Growth Through Innovation Timely and customizable experiences tracking the pulse of the
market Physical Sports & Entertainment – Growth Strategy 1 3 2A
2012 Topps BUNT 2013 Topps KICK 2015
Star Wars Card Trader 2016 WWE SLAM 2019 Marvel Collect 2016 The Walking Dead Collect 2016 NHL SKATE 2019 Disney Collect Topps Digital Sports & Entertainment – Portfolio of Iconic Properties Digital Sports & Entertainment 1 3
2B
Video Special FX 3D Objects Trade
Chat Enter contests Win prizes Digital collectibles reimagined Built for digital Bring collectibles to life in new ways Enable unique connections to moments & heroes Connect with other fans Follow other collectors Trade with fans all over the
world Chat & communicate in-app Free-to-play experience Sports contests synced with live events Missions, events & activities Earn free coins to keep playing Collect Trade Play Average Apple App Store rating of 4.3 vs. 3.7 for peers(a)
Source: Apple app ratings as of June 2021. Peers include Panini, Quidd, and EpicsGG. Ecosystem of Branded Apps Virtual collection in your pocket Digital Sports & Entertainment 1 3 2B
Represents CAGR from active apps May
2019 to May 2021. Innovation & Community Blockchain Modernized Platform Expanding Topps’ Digital Ecosystems Investment in platforms, communities and content Digital Sports & Entertainment – Growth Strategy 1 3 2B Rebuilt and
modernized entire tech platform front-to-back over last 2 years Platform is high-performance, scalable and enables rapid feature development User experience redesigned for broader appeal Grow daily active users through ROI-positive user acquisition
Build the community through events, Watch Parties, Twitch channel Daily active users have grown at a 44% CAGR(a) Expansion into Blockchain creates incremental revenue opportunities Proved the business in 2020 with GPK Expand with other Topps
properties and licenses Build secondary market revenue stream
2008 Global processing platform and
Pulse Reporting launch 2011 GMG acquired by The Topps Company, renamed Topps Digital Services 2015 Expanded offices to Mexico, UK / EU and Australia 2017 International expansion surpasses 40 countries 2007 GMG Ent founded by Jeff Mickeal & Tim
Pechmann 2009 First global partnership Facebook 2014 Netflix program launches 2018 1st Party branded eGift Platform 2015 Uber program launches 2019 Doordash, Nike and Airbnb added as clients Evolution of Topps Gift Cards – Continued
Addition of Blue-Chip Clients Gift Cards 1 3 2C Topps has a demonstrated history of servicing an increasing number of high growth, global digital companies Topps' extensive focus on its products and customer experience has led it to become an
integrated global platform 2020 Instacart and Twitch added as clients
Strong Client Portfolio Scalable
Platform Value Proposition One-stop-shop solution Global distribution capabilities Easy to integrate with significant savings to clients Comprehensive reporting and tracking solutions Valuable customer acquisition tool for clients Blackhawk B2B
& Loyalty ePay InComm And 60+ more $1bn+ Annual Transactions(b) ~30% 2019A –2022E CAGR(c) Key Growth Drivers Launch Gift Cards(a) Integrated Distribution and Payment Platform for the World’s Top Digital Brands Gift Cards 1 3 2C
Physical Gift Cards e-Gifting Digital Transformation Owned by Topps. Based on actual client sales processed through the Gift Card division’s owned and operated global gift card processing platform. Projections use Topps management estimates.
With respect to projections, see slide 1 “Use of Projections” under “Disclaimer.”
The Global Settlement Network
Enables Transactions in ~30 Currencies As part of the gift card processing services (and on behalf of clients) TDS collects the net proceeds from gift card sales and remits to our clients TDS collects the net proceeds from gift card sales in the
functional currency in which the cards were issued Simplifying the global gift card remittance process for our clients across 30+ currencies Purchaser Retailer / Merchant Global retailers: Walmart Target Tesco Big 3: InComm Blackhawk ePay &
others Client Bank Account Service provider / Activator Client Pays Payment Payment Payment Efficient settlement process on a global scale Topps Bank Account Topps Digital Services (“TDS”) Advocate Advocate Gift Cards 1 3 2C
A Market-Leading Portfolio with a
Unique Point of Differentiation Topps Confections is differentiated by its Edible Entertainment® marketing and innovation platform Edible Entertainment® An Interactive Experience with Value-Added Play Elements or Functionality That Drives
Topps Confections Brand Equity, Innovation Agenda, and Success in the Market Wearable Functional Customizable Collectible Topps Confections: Key Strategic Pillars Core Brand Equity Support Innovation Leadership Financially Attractive Operational
Model e-Commerce Growth International Expansion United States China Taiwan Thailand` Mexico Tunisia Spain Confections 1 3 2D
Top Selling Non-chocolate Items in
U.S. Retail(d) Culture of equity building, continuous innovation and executional excellence has made Topps the leading U.S. manufacturer of front-of-store non-chocolate candy(a) Iconic Heritage Brands Innovative New Brands And Extensions Source: As
measured by IRI, Topps is the #1 ranked manufacturer of non-chocolate confections in MULO (all outlets except convenience) and is the #3 ranked manufacturer in all outlets. Latest 52 weeks ending 12/27/20. Source: Year 2014 Nielsen All-outlet data.
Years 2015-2020 US IRI All-outlet data. Source: IRI All Outlet Data (MULO+C). Q2 = 13 WE 6/28/20, Q3 = 13 WE 9/27/20, Q4 = 13 WE 12/27/20, Q1 = 13 WE 3/28/21. Source: Represents US IRI large format stores (MULO) latest 52 weeks ending 12/27/20.
Reflects front-of-store rankings. 74 Years 23 Years 35 Years 44 Years 18 Years 4 Years 6 Years 9 Years Diversified Retailer Footprint Rank Item #1 Pay Day King Size #2 Baby Bottle Pop #3 Push Pop #4 Juicy Drop Pop #5 Skittles Regular #6 Payday
Regular #7 Red Vines #8 Starburst #9 Skittles Share Size #10 Twizzlers U.S. International Engaging Consumers Through ‘Edible Entertainment’ Confections 1 3 2D Continued Growth Driver 5.2% (b) (b) $ Sales % Change vs YAG by Quarter Topps
Confections vs Confections Category(c)
Retailer Growth Marketing CONTINUED
NOVELTY AND BREAKTHROUGH INNOVATION EXPAND SEASONAL OFFERINGS AND GROW BACK OF STORE DRIVE E-COMMERCE GROWTH BUILD INTERNATIONAL MARKETS Novelty brand extensions New brands / breakthrough(a) Existing core markets New market opportunities Licensed
markets Other Topps Confections distribution markets Represents concept under development. Name, product and packaging all currently being assessed. Does not represent final product. Ring Pop 20 Count Bag and Variety Box ranked #2 and #10
respectively on Amazon’s top confections items as of March 1, 2021 11:00am EST. Innovation Continuous Innovation to Extend into New Segments, Emerging Categories and High-Growth Channels MULTI-PRONGED APPROACH DRIVES CATEGORY-EXCEEDING GROWTH
Confections – Growth Strategy 1 3 2D Existing Accounts Top 10 Ranked Items (b) New Accounts
Topps’ competitive
differentiation is driven by its product variety, providing an end-to-end offering for existing and potential partners and brands Bring immediate accretion to brand value and engagement driving customer expansion, awareness and loyalty Trusted Brand
for 80 Years Innovation, Innovation, Innovation Engagement Through Multiple Platforms World-Class Management / Global Infrastructure Built upon long-term successful partnerships with iconic brands Highly-recognized product identities for a wide
range of demographics Loyal customer relationships across all sales channels Continued evolution with changing consumer behavior and demand over the years Expansion and acceleration of e-Commerce offerings and innovation of products Transformation
of online presence over the past 5 years ~100 Countries with Distribution ~540 Global Employees(a) 15 Offices Worldwide Topps has built a global reputation through its iconic products and brands Continued global success driven by global distribution
and continued focus of international customer reach Key competitive factor in securing license partnerships Competitive Advantages…and Why Topps Wins! Physical Sports & Entertainment E-Commerce Digital Sports & Entertainment Business
Overview and Growth Strategy 1 3 2 Employee figures include approximately 100 Union employees.
Financial Overview
Steadily Low Capital Spending
Consistently Strong and Increasing Revenue Accelerating EBITDA Revenue ($m) Pro Forma Adj. EBITDA(b)(c) ($m) Capital Expenditures ($m) 21 Outlook publicly disclosed outlook range reflected in dotted box. With respect to projections, see slide 1
“Use of Projections” under “Disclaimer.” With respect to Non-GAAP financial measures, see slide 1 “Non-GAAP Financial Measures” under “Disclaimer” and reconciliation set forth in Appendix slide 39. 23%
34% 11% 16% 18% % growth % margin 2% (e) Attractive Financial Profile Commentary (a) Financial Overview 1 2 3 $740 31% - 34% $130 (a) (a) 17.6% - 18.4% Includes the burden of estimated public company costs (2020A $9mm; LTM Q1 2021 $9mm; 21 Outlook
$9mm). YoY growth versus LTM Q1 2020. Excludes the burden of public company costs. (d)
(5%) 52% 75% 95% Total: 28% CAGR
’19A - LTM Physical S&E Digital S&E Gift Cards Confections REVENUE ($ millions) Strong Growth Driven by the Sports & Entertainment Business… 21 Outlook publicly disclosed outlook range reflected in dotted box. With respect to
projections, see slide 1 “Use of Projections” under “Disclaimer.” (a) Financial Overview 1 2 3 $740
Sports & Entertainment driving
growth with expanding margins Strong foundation in the Digital channels poised for rapid growth Stable Confections revenue and margins Confections Sports & Entertainment Consolidated 2020A 21 Outlook 2019A LTM Q1 2021 Note: Confections and
S&E Adj. EBITDA margins do not include an allocation of corporate expenses. Consolidated Pro Forma Adj. EBITDA Margins include the pro forma impact of estimated public company costs of $9 million for 2020A – 21 Outlook; 2019A excludes the
burden of public company costs. With respect to Non-GAAP financial measures, see slide 1 “Non-GAAP Financial Measures” under “Disclaimer” and reconciliation set forth in Appendix slide 39. Pro Forma Adj. EBITDA Margin (%)(a)
Adj. EBITDA Margin (%)(a) …Driving Consistently Attractive Margins Financial Overview 1 2 3 16.1% 2020A 2019A LTM Q1 2021 2020A 2019A LTM Q1 2021 17.6%
12% 22% Financial Update Financial
Overview 1 2 3 YoY growth versus LTM Q1 2020. Projections use Topps management estimates. With respect to projections, see slide 1 “Use of Projections” under “Disclaimer”. With respect to Non-GAAP financial measures, see
slide 1 “Non-GAAP Financial Measures” under “Disclaimer” and reconciliation set forth in Appendix slide 39. Excludes the burden of estimated public company costs. Includes the burden of estimated public company costs of $9mm.
2021 Consolidated Net Sales ($mm) Q1 Consolidated Net Sales ($mm) 2021 Consolidated PF Adj. EBITDA(c)(e) ($mm) Q1 Consolidated Adj. EBITDA(c)(d) ($mm) 2020 2021A Margins Physical S&E strength (+102% y-o-y) due to hobby demand, timing, retail
sell-through and e-commerce Digital S&E +111% y-o-y due to core apps Godzilla NFT release Gift Cards continued strength from key clients and unplanned bulk orders Margin expansion due to mix shift to higher margin offerings, dynamic pricing
& higher retail sell-through Sports & Entertainment Confections Higher sales (11% y-o-y) driven by velocity/ strong consumer demand and eCommerce growth Increase in sales partly offset by supply chain constraints and freight costs +55% +9%
+178% +76% 2020 LTM Q1 2021 2021 Outlook +34%(a) Margins 16% 18% 17.6%-18.4% +96%(b) +141%(a) +23% NA +31% - +34% (b) (b) +41% - +52% 2020 LTM Q1 2021 2021 Outlook 2020 2021A Q1 2021 Commentary
Growth Accelerators Adjacencies
Student athletes Sports betting Channel / Geography Digital expansion (blockchain/NFT) E-commerce growth International expansion Licenses Euro 2024 / Euro 2028 eSports New partners Illustrative: +10% Margin Expansion Significant Organic Upside
Through Reinvestment of Cash Flows… Financial Overview 1 2 3
Multiple organic growth levers and
strong industry tailwinds Geographic expansion, product diversification and new IP supporting core and adjacent expansion Numerous upside growth opportunities New licensing opportunities (Esports, sports leagues, college athletics, movies) and
M&A Leading global sports and entertainment company Multi-platform products appealing to a broad base of consumers Confections business is differentiated, interactive experience with value-added functionality Drives brand equity, innovation
agenda and success in the market with strong and proven profitability Highly diverse portfolio of IP built upon long-term strategic licensing partnerships with global iconic brands ~70 year MLB partnership; ~40 years with Star Wars franchise; and
~12 years with Bundesliga Margin expansion driven by continued development of digital channels Physical S&E e-Commerce, Digital S&E and Gift Cards driving margin expansion Accelerating growth driven by core franchise momentum, unique
content, innovation and social and digital engagement Compelling strategy producing category defining content and differentiated Edible Entertainment confections Attractive financial profile Compelling double-digit top-line growth with visibility
into growth Long-tenured management team with an established track record of success 20+ years on average of industry experience Iconic Company with Wide Brand Recognition: a Compelling Credit Story Business Overview and Growth Strategy 1 3
2
Syndication Overview
Summary of Terms New Senior Secured
Credit Facilities Borrower: The Topps Company, Inc. (the “Borrower”) Guarantees: The senior secured credit facilities shall be unconditionally guaranteed by the direct holding company parent of the Borrower and each of the material
direct and indirect domestic restricted subsidiaries of the Borrower, subject to customary exceptions and exclusions Security: The senior secured credit facilities shall be secured by first-priority liens (subject to permitted liens) on
substantially all tangible and intangible assets (including all or a customary percentage of the capital stock of certain subsidiaries) of the Borrower and the Guarantors, in each case, subject to certain customary exceptions and exclusions
Facilities: Tranche Amount Coupon LIBOR Floor OID Tenor Unused Fee Revolving Credit Facility $50mm L+ [ ● ] bps [ ● ]% -- 5 years [ ● ] bps Term Loan B $200mm L+ [ ● ] bps [ ● ]% [ ● ] 7 years -- Incremental
Facilities: Fixed dollar basket of the greater of approx. $115 million and 100% LTM EBITDA, plus an additional amount subject to, in the case of pari passu incremental facilities, a first lien net leverage ratio to be agreed and, in the case of
junior secured or unsecured incremental facilities, other leverage or interest coverage ratios (as applicable) to be agreed, plus other customary amounts Amortization: Revolving Credit Facility: Term Loan B: None 1% per annum; bullet at maturity
Optional Prepayments: Revolving Credit Facility: Term Loan B: Without premium or penalty 101 soft call for 6 months, repayable at par thereafter Mandatory Prepayments: 100% of proceeds from asset sales and insurance proceeds (with step-downs to 50%
and 0% based on first lien net leverage ratios to be agreed and subject to customary exceptions and reinvestment rights); 100% of net proceeds from issuances of debt (other than permitted debt); and 50% of annual excess cash flow (subject to
customary exceptions and adjustments) commencing with the second full fiscal year ending after closing (with step-downs to 25% and 0% based on first lien net leverage ratios to be agreed) Financial Covenant: Revolving Credit Facility: Term Loan B:
Springing maximum first lien net leverage ratio test at a level to be agreed when drawn amount (subject to customary exceptions) exceeds 40% of total commitments None Other Covenants: Other covenants customary for transactions of this nature,
including, but not limited to: (i) limitations on debt, (ii) limitations on mergers and acquisitions, (iii) limitations on restricted payments, (iv) limitations on asset sales, (v) limitations on liens, and (vi) limitations on transactions with
affiliates Transaction Summary 3 2 1
Syndication Timeline Date: Event:
June 22nd Launch lender call June 23rd Host lender call July 7th Lender commitments due August Closing and funding (concurrent with SPAC transaction) Denotes holiday August 2021 M T W T F S S 16 17 18 19 20 21 15 23 24 25 26 27 28 22 30 31 29 2 3 4
5 6 7 1 9 10 11 12 13 14 8 June 2021 M T W T F S S 14 15 16 17 18 19 13 21 22 23 24 25 26 20 28 29 30 27 7 8 9 10 11 12 6 1 2 3 4 5 July 2021 S M T W T F S 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3
Transaction Summary 3 2 1
Appendix
Segment Financial Information Note:
Confections and S&E Adj. EBITDA margins do not include an allocation of corporate expenses. Pro forma Adj. EBITDA and margins include the pro forma impact of estimated public company costs of $9 million for 2020A – 21 Outlook. 2019 Adj.
EBITDA and margin excludes the burden of public company costs. Projections use Topps management estimates. With respect to projections, see slide 1 “Use of Projections” under “Disclaimer.” ($ in millions) 2019A 2020A
LTM Q1 2021 21 Outlook(a) '19A - LTM CAGR Physical Sports and Entertainment 210 314 354 52% Digital Sports and Entertainment 18 31 37 75% Gift Cards 13 24 30 95% Confections 219 198 205 (5%) Total Revenue $460 $567 $626 $740 - $760 28% %
growth 2% 23% 34%(c) 31% - 34% Sports and Entertainment(b) 32 88 114 NA Adj. EBITDA Margin 13% 24% 27% Confections(b) 42 39 38 (8%) Adj. EBITDA Margin 19% 20% 19% Corporate Expenses (23) (26) (28) Public Company Costs - (9) (9) Pro Forma Adjusted
EBITDA(b) $51 $92 $115 $130 - $140 90% % margin 11% 16% 18% 17.6% - 18.4% % growth 31% 79% 25%(c) 41% - 52% With respect to Non-GAAP financial measures, see slide 1 “Non-GAAP Financial Measures” under “Disclaimer” and
reconciliation set forth in Appendix slide 39. YoY growth versus LTM Q1 2020.
Pro Forma Adjusted EBITDA
Reconciliation Net income excludes public company costs; 2020 – LTM 4/3/21 pro forma adjustments assume $9 million of public company costs. ($ in thousands) 2019A 2020A LTM 4/3/21 21 Outlook Net income (a) 8,802 83,654 106,604 Interest
expense, net 13,139 11,656 12,670 Income tax expense, net 4,923 688 5,545 Depreciation and amortization 4,693 4,193 4,079 Transaction costs 1,084 378 410 Sponsor management fees & expenses 2,271 2,199 1,882 Non-cash and non-operating (gains)
losses 2,372 (2,958) (6,579) Miscellaneous non-core costs 2,339 1,221 939 Loss/(gain) on derivative instruments, net (1,308) 9 (1,531) Loss on sale of subsidiaries 13,151 - - Adjusted EBITDA $51,466 $101,040 $124,019 $139,000-$149,000 Public company
costs (a) - 9,000 9,000 9,000 Pro Forma Adjusted EBITDA $51,466 $92,040 $115,019 $130,000-$140,000
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