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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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): June 24, 2025
JAKKS PACIFIC, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
|
0-28104 |
|
95-4527222 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission File
Number) |
|
(IRS
Employer
Identification
No.) |
| 2951
28th Street, Santa
Monica, California |
|
90405 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (424) 268-9444
Securities
registered or to be registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol |
|
Name
of each exchange on which registered |
| Common Stock, $.001 par value |
|
JAKK |
|
NASDAQ Global Select Market |
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:
| ☐ |
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)) |
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.
The
Company and certain of its subsidiaries as borrowers and certain of its subsidiaries as guarantors, entered into a Credit Agreement
(the “Credit Agreement”), dated as of June 24, 2025 (the “Closing Date”) with BMO Bank N.A. as
Administrative Agent, Swing Line Lender and Letter of Credit Issuer, for a $70,000,000 first-lien secured revolving credit loan (the
“Credit Facility”). The Credit Facility, which is a cash flow-based loan, replaces the Company’s existing $67,500,000 revolving credit facility maturing in June 2026 with JPMorgan Chase Bank, N.A. which was an asset-based loan (the “Existing
Loan”). The new Credit Facility may be used for working capital, capital expenditures and other general corporate purposes
` No indebtedness was outstanding on the Existing Loan.
Amounts
outstanding under the Credit Facility will bear interest at either (i) SOFR plus 1.50% - 2.00% (determined by reference to a net leverage
pricing grid), or (ii) base rate plus 0.50% - 1.00% (determined by reference to a net leverage pricing grid). The Credit Facility matures
in June 2030.
The
Credit Agreement contains negative covenants that, subject to certain exceptions, limit the ability of the Company and its subsidiaries
to, among other things, incur certain additional indebtedness, make restricted payments, pledge their assets as security, make investments,
loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. The Company may
not permit the Interest Coverage Ratio, measured at the end of each fiscal quarter of the Company, to be less than 3.00 to 1.00 for such
Measurement Period, nor may it permit the Total Net Leverage Ratio, measured at the end of each fiscal quarter of the Company, to exceed
2.00 to 1.00.
The
Credit Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to
grace periods and thresholds) nonpayment of principal, nonpayment of interest, fees or other amounts, material inaccuracy of representations
and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, certain
judgment defaults and a change of control as specified in the Credit Agreement. If an event of default occurs, the maturity of the amounts
owed under the Credit Agreement may be accelerated.
To
secure its obligations under the Credit Facility, the Company also entered into a Pledge and Security Agreement dated as of the Closing
Date between the Company and certain of its subsidiaries as guarantors and BMO Bank N.A. as Administrative Agent (the “Agent”)
for the lenders under the Credit Agreement (the “Security Agreement”). The Security Agreement grants to the Agent,
for the benefit of the Secured Parties, a security interest in a substantial amount of the Company’s consolidated assets, including
its inventory, accounts receivable, intellectual property and a pledge of the capital stock of various of its subsidiaries.
Capitalized
terms used herein and not defined herein have the meanings assigned to them in the Credit Agreement or Security Agreement, as the case
may be. The foregoing descriptions of the Credit Agreement and the Security Agreement are qualified in their entireties by reference
to the respective agreements attached as exhibits to this Form 8-K and incorporated by reference in this Item 1.01.
Item 1.02. Termination of a Material Definitive Agreement.
On
the Closing Date, the Company repaid in full amounts due and terminated the Existing Loan, a $67,500,000 senior secured revolving credit
facility with JPMorgan Chase Bank, N.A. dated as of June 2, 2021, which was scheduled to terminate in June 2026.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth under Item 1.01 of this Form 8-K with respect to the Credit Agreement is incorporated by reference into this Item
2.03.
Item
9.01. Financial Statements and Exhibits
| Exhibit |
|
Description |
| 10.1* |
|
Credit
Agreement, dated as of June 24, 2025, among JAKKS Pacific, Inc., JAKKS Sales LLC, Disguise, Inc., and Moose Mountain Marketing, Inc.,
as borrowers, the subsidiary guarantors party thereto, Loan Parties thereto, the Lenders party thereto and BMO Bank N.A., as Administrative
Agent, Swing Line Lender and Letter of Credit Issuer |
| 10.2* |
|
Pledge
and Security Agreement, dated as of June 24, 2025, by and among JAKKS Pacific, Inc. and its subsidiaries parties thereto as borrowers
and/or Grantors, the lenders party thereto, as lenders, and BMO Bank N.A.as Administrative Agent |
| 99.1 |
|
Press
release dated June 25, 2025 |
| 104 |
|
Cover
Page Interactive Data File (formatted as Inline XBRL) |
| * | Certain
schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K under the Securities Act. The Company agrees to furnish supplementally
any omitted schedules to the Securities and Exchange Commission upon request. |
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.
| |
JAKKS PACIFIC, INC. |
| |
|
| Dated: June 25, 2025 |
|
| |
By: |
/s/ JOHN L. KIMBLE |
| |
|
John L. Kimble, |
| |
|
CFO |
