Funko, Inc. 8-K

What Happened
Funko, Inc. (through subsidiary Funko Acquisition Holdings, L.L.C.) filed an 8-K on February 13, 2026 announcing a Fifth Amendment to its existing credit agreement with JPMorgan Chase Bank, N.A. as administrative agent and the lenders. The amendment (the “Fifth Amendment”) extends the loans’ maturity date from September 17, 2026 to December 31, 2027, revises financial covenants and testing, increases margins and modifies amortization, prepayment and reporting requirements.

Key Details

• Maturity extended from September 17, 2026 to December 31, 2027.
• Applicable margin on outstanding loans increased to 450 basis points effective at closing, with further scheduled increases per the amended agreement.
• Covenant changes include: waiver of the minimum fixed charge coverage ratio for the quarters ended Dec 31, 2025 and Mar 31 & Jun 30, 2026; added cushion for fixed charge coverage ratio for Sept 30, 2026–Mar 31, 2027; waiver of the maximum net leverage ratio for Dec 31, 2025 and the quarters ending Mar 31, Jun 30 and Sept 30, 2026; and a new minimum EBITDA covenant for the six months ending June 30, 2026.
• Permits, subject to restrictions, foregoing certain covenant tests for a period if Funko makes a voluntary prepayment of at least $10 million before delivering the compliance certificate.
• Removes a 10-basis-point SOFR credit spread adjustment; modifies amortization schedule and requires amortization on outstanding revolving loans (each such payment permanently reduces revolving commitments); requires quarterly mandatory prepayment of revolver balances when cash and cash equivalents exceed $50 million; adds reporting and affirmative covenant changes and new events of default.

Why It Matters
The amendment gives Funko additional runway by pushing the loan maturity into late 2027 and provides near-term covenant relief, which eases immediate liquidity and compliance pressure. However, the deal raises borrowing costs (higher margins) and tightens cash management via new amortization, mandatory prepayment triggers and added covenants/events of default, which could constrain financial flexibility. Investors should note the trade-off: extended maturity and waived near-term tests versus higher interest expense and stricter repayment and reporting mechanics.