Crown Crafts Completes Acquisition, Incurs Financial Obligation

TL;DR

Crown Crafts just bought something and now owes money.

AI Summary

On July 19, 2024, Crown Crafts, Inc. entered into a material definitive agreement related to the completion of an acquisition. This also resulted in the creation of a direct financial obligation for the registrant.

Why It Matters

This filing indicates a significant strategic move for Crown Crafts, Inc. through an acquisition, which will likely impact its financial structure and future operations.

Risk Assessment

Risk Level: medium — Acquisitions and new financial obligations inherently carry risks related to integration, financing, and market reception.

Key Players & Entities

• Crown Crafts, Inc. (company) — Registrant
• July 19, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.01 — ch registered Common Stock , par value $0.01 per share CRWS Nasdaq Capital Market
• $18.0 million — e purchase price for the acquistion was $18.0 million in cash (the "Purchase Price"), subject
• $6,515,809 — less than the target working capital of $6,515,809. The Purchase Agreement includes custo
• $75,000 — ion of the Purchase Price: (i) equal to $75,000 was deposited into an escrow account fo
• $500,000 — made by the Company; and (ii) equal to $500,000 was deposited into an escrow account fo
• $8.0 million — by the Company using the proceeds of an $8.0 million term loan from The CIT Group/Commercial
• $35.0 million — capacity under the line of credit from $35.0 million to $40.0 million. The Financing Agreem
• $40.0 million — he line of credit from $35.0 million to $40.0 million. The Financing Agreement requires prep

Filing Documents

• crws20240720_8k.htm (8-K) — 40KB
• ex_700889.htm (EX-2.1) — 499KB
• ex_700890.htm (EX-99.1) — 148KB
• ex_700891.htm (EX-99.2) — 15KB
• ex_700891img001.jpg (GRAPHIC) — 4KB
• 0001437749-24-023124.txt ( ) — 960KB
• crws-20240719.xsd (EX-101.SCH) — 3KB
• crws-20240719_def.xml (EX-101.DEF) — 11KB
• crws-20240719_lab.xml (EX-101.LAB) — 15KB
• crws-20240719_pre.xml (EX-101.PRE) — 11KB
• crws20240720_8k_htm.xml (XML) — 3KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. The information set forth under Item 2.01 of this Current Report on Form 8-K (this "Report") is incorporated into this Item 1.01 by reference.

01. Completion of Acquisition or Disposition of Assets

Item 2.01. Completion of Acquisition or Disposition of Assets. On July 19, 2024, NoJo Baby & Kids, Inc. ("NoJo Baby"), a wholly-owned subsidiary of Crown Crafts, Inc. (the "Company"), acquired substantially all of the assets, and assumed certain specified liabilities, of Baby Boom Consumer Products, Inc. ("Seller"), pursuant to the Asset Purchase Agreement, dated as of such date, between the Company, Nojo Baby, Seller and Elliot Betesh, Michael Betesh and Steven Betesh, as the owners (the "Owners") of Seller (the "Purchase Agreement"). Seller and the Owners are collectively referred to in this Report as the "Seller Parties". Pursuant to the Purchase Agreement, the purchase price for the acquistion was $18.0 million in cash (the "Purchase Price"), subject to a dollar-for-dollar adjustment to the extent that the working capital at closing is greater or less than the target working capital of $6,515,809. The Purchase Agreement includes customary representations, warranties and covenants. Subject to certain limitations, the Seller Parties are required to indemnify the Company for losses resulting from breaches of their representations, warranties and covenants made in the Purchase Agreement and for certain other matters, in each case, as set forth in the Purchase Agreement. Nojo Baby has obtained a representation and warranty insurance policy, subject to a retention amount, exclusions, policy limits and certain other terms and conditions, to provide coverage for losses that may result from breaches of certain representations and warranties made by the Seller Parties in the Purchase Agreement. At the closing of the acquisition, a portion of the Purchase Price: (i) equal to $75,000 was deposited into an escrow account for certain indemnification claims which may be made by the Company; and (ii) equal to $500,000 was deposited into an escrow account for post-closing Purchase Price adjustments. The Purchase Price was funded by the Company using the proceeds of an $8.0

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. ( d) Exhibits. 2.1 Asset Purchase Agreement, dated as of July 19, 2024, between Crown Crafts, Inc., NoJo Baby & Kids, Inc., Baby Boom Consumer Products, Inc., and Elliot Betesh, Michael Betesh and Steven Betesh. * 99.1 Seventeenth Amendment to Financing Agreement, dated July 19, 2024, by and among Crown Crafts, Inc., Sassy Baby, Inc., NoJo Baby & Kids, Inc., Manhattan Toy Europe Limited and The CIT Group/Commercial Services, Inc. 99.2 Press release issued July 22, 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedules upon request provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

SIGNATURES

SIGNATURES 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 thereunto duly authorized. CROWN CRAFTS, INC. Date: July 22, 2024 /s/ Craig J. Demarest CRAIG J. DEMAREST Vice President and Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR