Build-A-Bear (NYSE: BBW) boosts credit facility to $40.0M and cuts fees

Rhea-AI Filing Summary

Build-A-Bear Workshop, Inc. entered into a Third Amendment to its revolving credit and security agreement with PNC Bank and other lenders. The amendment increases the base borrowing capacity from $25.0 million to $40.0 million, while keeping an accordion feature that can raise it to up to $50.0 million. It also reduces interest rates on borrowings and lowers the undrawn facility fee from 0.25% to 0.20%, making the credit line less expensive to maintain.

The maturity of the facility is extended to December 31, 2030, and the agreement continues to include up to $5.0 million in swingline loans and up to $5.0 million in letters of credit. The loan remains secured by a first-priority lien on substantially all personal property of the company and its U.S. and Canadian subsidiaries. The company must keep borrowing availability at or above the greater of 10.0% of the Loan Cap or $1,875,000. At the time of the amendment, there were no outstanding borrowings and the company was in compliance with its covenants.

Insights

Credit & capital structure analyst

Build-A-Bear expands and extends its revolving credit on better terms.

Build-A-Bear Workshop, Inc. amended its revolving credit agreement to raise base capacity from $25.0 million to $40.0 million, with an option to increase by another $10.0 million. The maturity is pushed out to December 31, 2030, which lengthens the company’s committed liquidity horizon. These changes provide a larger, longer-dated source of working capital and general corporate funding if needed.

Economically, the facility becomes cheaper: the undrawn fee drops from 0.25% to 0.20%, and the amendment reduces interest rate margins on both base-rate and SOFR-based borrowings. The structure still relies on a borrowing base tied to credit card receivables, inventory and certain other receivables, and maintains a first-priority lien on substantially all personal property in the U.S. and Canada.

Covenants remain focused on asset-based availability, requiring the company to maintain at least the greater of 10.0% of the Loan Cap or $1,875,000 of availability. At closing there were no outstanding borrowings and the company was in compliance, indicating the facility is currently a backstop rather than actively drawn. Overall, this looks like a routine but favorable refinement of existing financing rather than a transformational change.

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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

Build-A-Bear Workshop, Inc.

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(Exact Name of Registrant as Specified in Its Charter)

Delaware --------------------------- (State or Other Jurisdiction of Incorporation) 001-32320 ------------------- (Commission File Number) 43-1883836 --------------------------- (IRS Employer Identification No.)

415 South 18th St., St. Louis, Missouri ---------------------------------------------------- (Address of Principal Executive Offices) 63103 ------------------ (Zip Code)

(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)

☐         Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐         Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BBW	New York Stock Exchange

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%.

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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.

Relationship to PNC

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.

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Item 9.01          Financial Statements and Exhibits.

(d) Exhibits         

Exhibit Number		Description of Exhibit
10.1*		Third Amendment to Revolving Credit and Security Agreement dated as of December 31, 2025 among the Company, as borrowing agent and borrower; Build-A-Bear Retail Management, Inc., as an additional borrower; 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., as guarantors; the lenders party thereto; and PNC Bank, National Association, as agent for the lenders.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Certain schedules and similar attachments have been omitted in reliance on Item 601(a)(5) of Regulation S-K. The Company will provide, on a supplemental basis, a copy of any omitted schedule or attachment to the SEC or its staff upon request.

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SIGNATURES

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.

	BUILD-A-BEAR WORKSHOP, INC.
Date: January 5, 2026	By:	/s/ Voin Todorovic
	Name:	Voin Todorovic
	Title:	Chief Financial Officer

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FAQ

What did Build-A-Bear Workshop (BBW) change in its credit facility?

The company entered a Third Amendment to its revolving credit and security agreement, increasing base borrowing capacity, extending maturity, and reducing certain pricing terms such as interest margins and the undrawn facility fee.

How much can Build-A-Bear Workshop (BBW) borrow under the amended revolver?

The amended agreement provides a senior secured revolving loan facility of up to $40.0 million, subject to a borrowing base, with an option $10.0 million, for a potential total of $50.0 million.

When does Build-A-Bear’s amended credit agreement now mature?

The Third Amendment extends the maturity date of the revolving credit agreement to December 31, 2030, unless it is terminated earlier under its terms.

Did the cost of Build-A-Bear’s credit facility change with this amendment?

Yes. The amendment reduces interest rates on borrowings and lowers the facility fee on undrawn commitments from 0.25% to 0.20%, making the committed but unused credit line less expensive to maintain.

What collateral secures Build-A-Bear’s revolving credit agreement?

The facility continues to be secured by a first priority lien on substantially all personal property of the company and its U.S. and Canadian subsidiaries, including certain receivables, equipment and fixtures, intellectual property, inventory, and equity interests in their subsidiaries, subject to permitted liens and exceptions.

Is Build-A-Bear currently borrowing under this amended credit facility?

At the closing date of the Third Amendment, the borrowers had no outstanding borrowings under the credit agreement, and the company was in compliance with its covenants.

What key financial covenant applies under Build-A-Bear’s credit agreement?

The company must maintain availability at all times at or above the greater of 10.0% of the Loan Cap and $1,875,000, with the Loan Cap defined as the lesser of $40.0 million minus outstanding loans and letters of credit, and the borrowing base.