Purple Innovation Reports Material Agreement, Financial Obligation

TL;DR

**Purple Innovation just made big financial moves, watch for impact on debt and earnings.**

AI Summary

Purple Innovation, Inc. filed an 8-K on January 23, 2024, reporting an entry into a material definitive agreement, results of operations and financial condition, and the creation of a direct financial obligation. This filing indicates significant corporate actions and potential changes to the company's financial structure and performance. For investors, this matters because these events could impact the company's future profitability, debt levels, and overall stock valuation.

Why It Matters

This filing signals that Purple Innovation, Inc. has undertaken significant financial and operational changes, which could affect its future earnings and debt profile, directly influencing shareholder value.

Risk Assessment

Risk Level: medium — The filing indicates new financial obligations and material agreements, which inherently carry risks related to their terms and potential impact on the company's financial health.

Analyst Insight

A smart investor would closely monitor the details of the 'Material Definitive Agreement' and 'Direct Financial Obligation' once they are fully disclosed, as these will dictate the true impact on Purple Innovation's financial health and future prospects.

Key Players & Entities

• Purple Innovation, Inc. (company) — the registrant filing the 8-K
• January 23, 2024 (date) — date of earliest event reported and filing date
• 001-37523 (other) — Commission File Number for Purple Innovation, Inc.
• 4100 North Chapel Ridge Rd., Suite 200, Lehi, Utah 84043 (other) — Address of Principal Executive Offices for Purple Innovation, Inc.
• 801-756-2600 (other) — Registrant's telephone number

Forward-Looking Statements

• Purple Innovation's next earnings report will reflect the impact of the new material definitive agreement and financial obligations. (Purple Innovation, Inc.) — high confidence, target: Q1 2024 earnings report

FAQ

Key Financial Figures

• $0.0001 — tered Class A Common Stock, par value $0.0001 per share PRPL The NASDAQ Stock Mar
• $61.0 m — tions with a term loan in the amount of $61.0 million, to Purple Innovation, LLC, an op
• $26 million — as ABL availability, was approximately $26 million. Subsequent to the transaction cash and
• $48 million — and cash equivalents were approximately $48 million. Certain of the Lenders have also agree
• $61.0 million — things, include the following: provide $61.0 million of debt financing to Purple LLC (the "L
• $27 million — after expenses, equal to approximately $27 million; provide for a maturity date of Decem
• $19.0 million — ggregate principal amount not to exceed $19.0 million on terms requested by Purple LLC to the
• $1.50 — e Company's Class A Stock at a price of $1.50 per share, subject to certain adjustmen
• $0.01 — d not in part at any time at a price of $0.01 per share of Class A Stock issuable upo
• $24.00 — of the Class A Stock equals or exceeds $24.00 per share on each of 20 trading days wi
• $0 — of, subject to a minimum floor price of $0.8502, subject to certain adjustments, a

Filing Documents

• ea192025-8k_purple.htm (8-K) — 66KB
• ea192025ex10-1_purple.htm (EX-10.1) — 911KB
• ea192025ex10-2_purple.htm (EX-10.2) — 107KB
• ea192025ex10-3_purple.htm (EX-10.3) — 121KB
• ea192025ex10-4_purple.htm (EX-10.4) — 219KB
• ea192025ex99-1_purple.htm (EX-99.1) — 14KB
• 0001213900-24-005735.txt ( ) — 1942KB
• prpl-20240123.xsd (EX-101.SCH) — 3KB
• prpl-20240123_lab.xml (EX-101.LAB) — 33KB
• prpl-20240123_pre.xml (EX-101.PRE) — 22KB
• ea192025-8k_purple_htm.xml (XML) — 3KB

01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT Amended and Restated Credit Agreement As previously disclosed, on August 7, 2023, Purple Innovation, Inc. (the "Company") and certain of its subsidiaries (collectively the "Loan Parties") entered into a term loan credit agreement (as amended from time to time, the "Term Loan Agreement") with Callodine Commercial Finance, LLC and a group of financial institutions (the "Term Loan Lenders"). Also, on August 7, 2023, the Loan Parties entered into a separate financing arrangement with the Bank of Montreal and a group of financial institutions (collectively the "ABL Lenders") that provides for a revolving asset-based credit facility (as amended from time to time, the "ABL Agreement" and together with the Term Loan Agreement the "2023 Credit Agreements"). On January 23, 2024, the Loan Parties entered into a Second Amendment to Term Loan Agreement (the "Second Amendment") and concurrently therewith an Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement), which amended and restated the Term Loan Agreement, with Coliseum Capital Partners, L.P. ("CCP"), Blackwell Partners LLC – Series A ("Blackwell"), Harvest Small Cap Partners Master, Ltd. ("Harvest Master"), Harvest Small Cap Partners, L.P. ("Harvest Partners"), and HSCP Strategic IV, L.P. ("HSCP" and together with CCP, Blackwell, Harvest Master, and Harvest Partners, the "Lenders") and Delaware Trust Company, as administrative agent. The Lenders have agreed to assume the rights and obligations of the Term Loan Lenders under the Term Loan Agreement and, pursuant to the Second Amendment and the Amended and Restated Credit Agreement, have agreed to refinance existing obligations with a term loan in the amount of $61.0 million, to Purple Innovation, LLC, an operating subsidiary of the Company ("Purple LLC"). Immediately preceding the transaction, net liquidity, including cash and cash equivalents as well as ABL availability, was approximatel

Forward-Looking Statements

Forward-Looking Statements Certain statements made herein that are not historical facts are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company's expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Factors that could influence the realization of forward-looking statements include the risk factors outlined in the "Risk Factors" section of our Annual Report on Form 10-K filed with the SEC on March 22, 2023 (as amended on May 1, 2023) and our Quarterly Reports on Form 10-Q filed with the SEC on May 10, 2023, August 9, 2023, and November 15, 2023. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On January 23, 2024, the Company issued a press release describing the Amended and Restated Credit Agreement and related transactions. The press release also reaffirmed the Company's previously provided guidance for net revenue and adjusted EBITDA for 2023. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amen

03 CREATION OF A DIRECT FINANCIAL OBLIGATION

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT. The disclosure under Item 1.01 above describing the Amended and Restated Credit Agreement is incorporated herein by reference.

02 UNREGISTERED SALES OF EQUITY SECURITIES

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES. The disclosure under Item 1.01 above describing the Amended and Restated Credit Agreement and the Warrants is incorporated herein by reference. In connection with the Company entering into the Amended and Restated Credit Agreement, the Company issued the Warrants to the Lenders. The Company relied on the exemption from registration under Section 4(a)(2) of the Securities Act.

01. FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS EXHIBIT INDEX Exhibit Number Description 10.1# Amended and Restated Credit Agreement, dated January 23, 2024, by and among Purple Innovation, Inc., Purple Innovation, LLC, Intellibed, LLC, Coliseum Capital Partners, L.P., Blackwell Partners LLC – Series A, Harvest Small Cap Partners Master, Ltd., Harvest Small Cap Partners, L.P., HSCP Strategic IV, L.P., and Delaware Trust Company 10.2 Form of Warrant 10.3# Amended and Restated Registration Rights Agreement, dated January 23, 2024, by and among Purple Innovation, Inc., Coliseum Capital Partners, L.P., Blackwell Partners LLC – Series A, Coliseum Capital Co-Invest III, L.P., Harvest Small Cap Partners Master, Ltd., Harvest Small Cap Partners, L.P., and HSCP Strategic IV, L.P. 10.4# Amended and Restated Pledge and Security Agreement, dated January 23, 2024, by and among Purple Innovation, Inc., Purple Innovation, LLC, Intellibed, LLC, and Delaware Trust Company. 99.1 Press Release dated January 23, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) # Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit or schedule will be furnished supplementally to the SEC or its staff upon request. 6 SIGNATURE 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. Dated: January 23, 2024 PURPLE INNOVATION, INC. By: /s/ Todd Vogensen Todd Vogensen Chief Financial Officer 7