Sleep Number Corp 8-K

What Happened

• Sleep Number Corporation announced on April 27, 2026 that it entered into a Forbearance Agreement and Thirteenth Amendment to its Amended and Restated Credit and Security Agreement with U.S. Bank and other lenders. The amendment adds a $25 million term loan (the "2026 Term Loan"), which accrues interest at one‑month SOFR plus 8.00% and matures June 30, 2026, with a $5 million amortization payment due June 1, 2026. The 2026 Term Loan was fully funded on April 27, 2026, and Sleep Number also borrowed $2.7 million on its revolving facility that day.

Key Details

• $25.0M 2026 Term Loan; interest = one‑month SOFR + 8.00%; maturity June 30, 2026; $5.0M amortization due June 1, 2026.
• Revolver draw: $2.7M on April 27, 2026, bringing outstanding revolving loans to $447.2M.
• Lenders agreed to forbear from exercising certain remedies for specified defaults, subject to termination events; company is compliant with covenants except for those specified defaults.
• Amendment imposes monthly cash interest payments, mandatory prepayments from certain proceeds, more frequent reporting, a temporary change to the minimum liquidity covenant (not in effect from April 27, 2026 until after July 1, 2026), restrictions on new revolver draws beyond an agreed variance, and milestones including pursuing a strategic transaction to pay obligations in full.

Why It Matters

• This amendment provides short‑term liquidity (the $25M term loan and the revolver draw) and temporary creditor forbearance, but it also increases near‑term debt costs (SOFR + 8%) and tightens reporting and prepayment requirements.
• Investors should note the near-term maturity (June 30, 2026) and mandatory amortization, the continued outstanding revolver balance (~$447M), and the requirement to satisfy milestones (including pursuing a strategic transaction) to avoid loss of forbearance—factors that could materially affect cash flow and strategic options.