First Watch Reports New Material Agreement & Financial Obligation

TL;DR

**First Watch just took on new debt or a major contract, watch for details!**

AI Summary

First Watch Restaurant Group, Inc. filed an 8-K on January 8, 2024, reporting an event that occurred on January 5, 2024. The filing indicates the company entered into a material definitive agreement and created a direct financial obligation. This matters to investors because significant new agreements or financial obligations can impact the company's future earnings, debt levels, and overall financial health, potentially affecting stock valuation.

Why It Matters

New material agreements and financial obligations can significantly alter a company's risk profile and future profitability, directly impacting shareholder value.

Risk Assessment

Risk Level: medium — The filing indicates new financial obligations and material agreements without specific details, which introduces uncertainty about their nature and potential impact.

Analyst Insight

Investors should await further details regarding the nature and terms of the material definitive agreement and the direct financial obligation to assess their potential impact on First Watch Restaurant Group, Inc.'s financial performance and future outlook.

Key Players & Entities

• First Watch Restaurant Group, Inc. (company) — the registrant filing the 8-K
• January 5, 2024 (date) — date of the earliest event reported
• January 8, 2024 (date) — date the 8-K was filed
• 001-40866 (other) — Commission File Number
• 82-4271369 (other) — I.R.S. Employer Identification Number

FAQ

Key Financial Figures

• $0.01 — nge on which registered Common stock, $0.01 par value FWRG The Nasdaq Stock Market
• $75 million — lina for an aggregate purchase price of $75 million on a cash-free, debt-free basis, subjec
• $1.5 million — portion of the purchase price equal to $1.5 million will be held back by FWRI for a period
• $4.125 million — n amount of the purchase price equal to $4.125 million will be placed into an escrow account f
• $100 million — erms of the Amendment, (i) the existing $100 million term loan A facility was replaced with
• $125 million — revolving credit facility, (iii) a new $125 million incremental delayed draw term loan faci
• $5 million — to FWR in one or more draws of at least $5 million each for a period of 18 months followin
• $50 million — olving credit facility was increased by $50 million in new revolving credit commitments bri

Filing Documents

• fwrg-20240105.htm (8-K) — 49KB
• exhibit21-assetpurchaseagr.htm (EX-2.1) — 804KB
• exhibit101amendmentno2tocr.htm (EX-10.1) — 2661KB
• exhibit991fwpressrelease_v.htm (EX-99.1) — 17KB
• image.jpg (GRAPHIC) — 183KB
• image_0a.jpg (GRAPHIC) — 1KB
• 0001789940-24-000003.txt ( ) — 4420KB
• fwrg-20240105.xsd (EX-101.SCH) — 2KB
• fwrg-20240105_lab.xml (EX-101.LAB) — 25KB
• fwrg-20240105_pre.xml (EX-101.PRE) — 13KB
• fwrg-20240105_htm.xml (XML) — 3KB

01 - Entry into a Material Definitive Agreement

Item 1.01 - Entry into a Material Definitive Agreement. Asset Purchase Agreement On January [5], 2024, First Watch Restaurants, Inc. ("FWRI"), a wholly-owned subsidiary of First Watch Restaurant Group, Inc. (the "Company"), entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with (i) VIM Holdings, LLC ("VIM"), (ii) VIM's subsidiaries, including VIM Holdings Bradford, Inc., VIM Holdings Brier Creek, Inc., VIM Holdings Durham 15/501, Inc., VIM Holdings Glenwood, Inc., VIM Holdings Heritage Junction, Inc. and VIM Holdings TTC, Inc. (collectively, the "VIM Subsidiaries"), (iii) VIM, in its capacity as the parent company of the VIM Subsidiaries, and each of the members of VIM (collectively, the "Sellers"), and Mr. Robert B. Frame, in the capacity of agent and representative of VIM and the Sellers as set forth in the Asset Purchase Agreement, pursuant to which FWRI will acquire substantially all of the assets of VIM and the VIM Subsidiaries related to 21 franchise-owned First Watch restaurants and one restaurant under development in North Carolina for an aggregate purchase price of $75 million on a cash-free, debt-free basis, subject to adjustments based on the amount of landlord security deposits, mutually agreed upon prorations for certain rent, lease, rebates and prepaid expenses, gift card liabilities and certain post-closing adjustments, as set forth in the Asset Purchase Agreement. A portion of the purchase price equal to $1.5 million will be held back by FWRI for a period of 120 days following the closing to cover shortfalls in minimum cash drawer amounts or inventory levels, as insurance for payment of current liabilities, and as a non-exclusive indemnification fund. In addition, an amount of the purchase price equal to $4.125 million will be placed into an escrow account for a period of 18 months following the closing as a non-exclusive indemnification fund. The Asset Purchase Agreement contains customary representations, warranties and c

01 -Regulation FD Disclosure

Item 7.01 -Regulation FD Disclosure. On January 8, 2024, the Company issued a press release announcing the Company's execution of the Asset Purchase Agreement and the Amendment. A copy of the Company's press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference. The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing.

Forward-Looking Statements

Forward-Looking Statements In addition to historical information, this Current Report contains a number of "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning First Watch's acquisitions of franchise-owned restaurants, possible or assumed future results of operations, business strategies, competitive position, industry environment and potential growth. When used in this Current Report, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "target," "may," "will," "should," "future," "propose," "preliminary," "outlook," "guidance," "on track" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Forward-looking statements in this Current Report are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: one or more closing conditions to the proposed transaction not being satisfied or waived, unexpected costs, charges or expenses resulting from the proposed transaction, uncertainty regarding the Russia-Ukraine war, Israel-Hamas war and the related impact on macroeconomic conditions, including inflation, as a result of such conflicts or other related events; our vulnerability to changes in economic conditions and consumer preferences; our inability to successfully open new restaurants or establi

01 - Financial Statements and Exhibits

Item 9.01 - Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Exhibit Title or Description 2.1* Asset Purchase Agreement dated as of January 5, 2024, by and among VIM Holdings, LLC, its owners and affiliates, and First Watch Restaurants, Inc. 10.1 Amendment No. 2 to Credit Agreement dated as of January 5, 2024, by and among FWR Holding Corporation as Borrower, the lenders party thereto, the other parties thereto and Bank of America N.A., as administrative agent 99.1 Press Release of First Watch Restaurant Group, Inc. dated January 8, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Disclosure schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule to the SEC upon request. The Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules so furnished. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. First Watch Restaurant Group, Inc. (Registrant) Date: January 8, 2024 By: /s/ Jay Wolszczak Name: Jay Wolszczak Title: Chief Legal Officer, General Counsel and Secretary

View Full Filing

View this 8-K filing on SEC EDGAR