Funko, Inc. (FNKO) SEC Filings & Earnings Calls

Activist pressure may lead to strategic changes or increased volatility

“The Reporting Person has entered into certain cash-settled total return swap agreements (the "Cash-Settled Swaps") with an unaffiliated third-party financial institution, which provide the Reporting Person with economic exposure to an aggregate of 7,287,462 notional Shares, representing approximately 13.0% of the outstanding Shares.” · word for word

High Debt and Covenant Risk

“Total debt under the Credit Agreement is $198.3 million with a maturity date of December 31, 2027. The Company has limited borrowing availability and must comply with financial covenants including a minimum Consolidated EBITDA of $15.1 million for the six months ended June 30, 2026.” · word for word

Tariff and Trade Policy Uncertainty

“The effects of tariffs imposed in 2025, and the potential imposition of modified or additional tariffs or export controls by other countries, could continue to have an adverse effect on future net sales, margins, profitability and cash flows.” · word for word

Going Concern Qualification Risk

“If the Company is unable to complete these plans before the end of the fiscal year December 31, 2026, the debt would then be reclassified from a long-term liability to a current liability.” · word for word

Loungefly segment sales declined 1.7% and SKU rationalization may impact near-term revenue.

“Loungefly $31,302 thousand, down 1.7%; decision to rationalize Loungefly’s SKU count”

Tariff refund recognition ($25.4M benefit) is non-recurring; future margin may normalize.

“Gross margin, net income, adjusted net income and adjusted EBITDA for Q2 2026 each included a pre-tax benefit of $25.4 million related to the recognition of expected tariff refunds and the release of accrued tariffs” · word for word

Tariff exposure on supply chain

“The effects of tariffs imposed in 2025...could continue to have an adverse effect on future net sales, margins, profitability and cash flows.” · word for word

Debt covenant and refinancing risk

“If the Credit Agreement is not refinanced before its maturity date of December 31, 2027...the Company’s liquidity, results of operations, cash flows and financial condition would be materially adversely impacted.” · word for word

Going concern risk from recurring losses

“During the three months ended March 31, 2026 and March 31, 2025, the Company recorded net losses of $18.1 million, and $27.6 million, respectively, in addition to having recurring net losses of $67.4 million, $14.7 million, and $154.1 million for the fiscal years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively.” · word for word

Loungefly and Other category revenue declines indicate brand or category concentration risk.

“Loungefly revenue -23.1% YoY; Other revenue -54.7% YoY”

Net loss persists despite improvement; adjusted net loss still negative.

“Net loss $18.1M; adjusted net loss $6.3M”

Severe underperformance and management instability

“Based on the Company’s performance in 2025, the Compensation Committee determined that the EBITDA gate was not achieved and, as a result, the 2025 bonuses for our continuing NEOs from 2024 were achieved at 0%.” · word for word

Material weaknesses in internal control over financial reporting

“As reported in Part II, Item 9A of the Company’s Annual Reports on Form 10-K for the fiscal years ended December 31, 2023 and December 31, 2022, the Company reported material weaknesses in its internal control over financial reporting during such periods.” · word for word

Activist or passive investor with significant economic exposure via derivatives

“The Reporting Person has entered into certain cash-settled total return swap agreements ... which provide the Reporting Person with economic exposure to an aggregate of 4,599,919 notional Shares, representing approximately 8.30% of the outstanding Shares.” · word for word

Activist or passive investor with significant economic exposure via derivatives

“The Reporting Person has entered into certain cash-settled total return swap agreements ... which provide the Reporting Person with economic exposure to an aggregate of 4,599,919 notional Shares, representing approximately 8.30% of the outstanding Shares.” · word for word

Potential activist or strategic pressure from large holder

“The Reporting Person has entered into certain cash-settled total return swap agreements ... which provide the Reporting Person with economic exposure to an aggregate of 3,897,961 notional Shares, representing approximately 7.03% of the outstanding Shares.” · word for word

Potential activist or strategic pressure from large holder

“The Reporting Person has entered into certain cash-settled total return swap agreements ... which provide the Reporting Person with economic exposure to an aggregate of 3,897,961 notional Shares, representing approximately 7.03% of the outstanding Shares.” · word for word

Declining revenue and gross margin; net loss for FY2025; high debt levels.

“Net sales down 13.5% YoY; gross margin down 270 bps; net loss of $67.4M; total debt $225.3M”

License concentration risk

“Our top ten licensors collectively accounted for approximately 63%, 63% and 68% of our sales for the years ended December 31, 2025, 2024 and 2023, respectively.” · word for word

Disney dependency risk

“these parties are all under common ownership by Disney and collectively these licensors accounted for approximately 28%, 32% and 38% of our sales for the years ended December 31, 2025, 2024 and 2023, respectively.” · word for word

Tariff exposure risk

“changes in trade policies of the U.S. or other countries, such as tariffs or retaliatory tariffs, have and may continue to contribute to inflationary conditions and increase the manufacturing costs or limit the availability of our products” · word for word

Former CEO competition risk

“our former Chief Executive Officer, Brian Mariotti and other former Funko executives, have created a collectible products company that recently launched with certain products that compete with our offerings.” · word for word

Role change may indicate strategic shift but no financial impact disclosed.

“No compensation change; relocation terms removed.”

Credit agreement amendment with covenant waivers and increased margin indicates significant financial distress.

“waive the minimum fixed charge coverage ratio financial covenant ... increase applicable margin to 450bps” · word for word

Mandatory prepayment requirement with cash >$50M limits liquidity flexibility.

“requiring quarterly mandatory prepayment of the revolving loans with cash ... in excess of $50 million” · word for word

Significant sales decline across all categories and geographies.

“Net sales -14.3% YoY; Core Collectible -12.0%, Loungefly -5.5%, Other -67.0%”

Profitability sharply lower with net income down 80%.

“Net income $0.9M vs $4.6M; Adj. EBITDA $24.4M vs $31.0M”

Debt increased to $241M from $182.8M at year-end.

“Total debt was $241.0 million at September 30, 2025 versus $182.8 million at December 31, 2024” · word for word

Going concern uncertainty

“management evaluated our future liquidity, forecasted operating results and ability to comply with the covenants under its Credit Agreement, for the twelve months from the date of issuance of these financial statements and determined that there is substantial doubt about our ability to continue as a going concern for the next twelve months from the date of i” · word for word

Covenant non-compliance

“anticipated non-compliance with the maximum Net Leverage Ratio and minimum Fixed Charge Coverage Ratio covenants as of the end of the quarter ending December 31, 2025” · word for word

Debt refinancing risk

“The Credit Agreement matures in September 2026, however, we are not forecasted to have sufficient cash reserves to fully repay the loans outstanding under the Credit Agreement at that time” · word for word

Tariff disruption

“The decrease in net sales was across all distribution channels as a result of tariff disruption and general macroeconomic uncertainty” · word for word