XML 35 R23.htm IDEA: XBRL DOCUMENT
v3.25.2

SUBSEQUENT EVENTS | 6 Months Ended
--- | ---
Jul. 05, 2025
Subsequent Events [Abstract] |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Transaction Support Agreement On August 13, 2025, the Company Parties entered into a Transaction Support Agreement with the Consenting Noteholders representing ownership of approximately 59% of the aggregate principal of the Company's Notes. The Transaction Support Agreement contains certain covenants on the part of each of the parties thereto, including covenants that the Consenting Noteholders participate in, consent to, vote in favor of, and otherwise support, as applicable: •A new money financing of up to $32.5 million aggregate principal amount of 9.500% First-Out Senior Secured Notes due 2029 (the “First-Out Notes”) to be offered to (i) the Consenting Noteholders on a private placement basis and (ii) to holders of Notes (“Noteholders”) (other than the Consenting Noteholders) pursuant to an SEC-registered offering (together, the “New Money Financing”) , in each case pro rata (based on the face amount of their respective Notes in comparison to the total aggregate principal amount of all Notes. Noteholders that participate in the New Money Financing for their full pro rata portion of the New Money Financing will also receive Common Stock of the Company equal to 5.0% of their respective funded portion of the New Money Financing, with the value of the Common Stock to be determined based on the average of the Daily VWAPs for the 30 consecutive Trading Days (each as defined in the Transaction Support Agreement) immediately prior to the date of the Transaction Support Agreement. •An out-of-court private exchange of Notes pursuant to which the Consenting Noteholders will exchange Notes for First-Out Notes at 100% of the face amount of Notes plus accrued and unpaid interest and their portion of the New Warrants (as defined below) as described below (the “Private Exchange”). •SEC-registered offerings in which the Company will offer to all Noteholders (other than the Consenting Noteholders) the opportunity (i) to participate for their pro rata portion of the New Money Financing (based on the face amount of their respective Notes in comparison to the total aggregate principal amount of all Notes) and to receive their New Stock Investment, and (ii) to tender Notes in exchange for (A) if such Noteholder funds the full amount of its pro rata portion of the New Money Financing, First-Out Notes, and (B) if such Noteholder does not fund the full amount of its pro rata portion of the New Money Financing, 7.500% Second-Out Notes due 2029 (the "Second-Out Notes"), in each case, at 100% of the face amount of its Notes plus accrued and unpaid interest in the case of such exchange, together with, in each case, their portion of the New Warrants as described below (the “Public Exchange,” together with the Private Exchange, the “Exchange Transaction”). •The issuance of warrants (the “New Warrants”) to purchase 3,000,000 shares of Common Stock or prefunded warrants, pro rata (based on amount of Notes exchanged into First-Out Notes or Second-Out Notes, irrespective of participation in the New Money Financing) to all Noteholders that exchange their Notes in the Exchange Transaction. The New Warrants will have an exercise price of $0.50 per share and a term of 30 days. •The purchase by certain Consenting Noteholders (the “Backstop Providers”) of an amount of First-Out Notes equal to the amount of unpurchased First-Out Notes in the New Money Financing by Noteholders other than the Consenting Noteholders (the “Backstop Commitment”). As consideration for the Backstop Commitment, the Company will pay the Backstop Providers a backstop premium in the form of additional First-Out Notes. •To consent to and support a consent solicitation in connection with the Public Exchange (the “Consent Solicitation”) pursuant to which the Company will solicit consents from Noteholders to enter into a supplemental indenture to the Indenture to (i) in the event the Out-of-Court Threshold (as defined in the Transaction Support Agreement) is met, remove certain covenants and events of default under the Notes, as well as to subordinate the Notes in right of payment to the First-Out Notes, the Second-Out Notes and the ABL Credit Agreement to the fullest extent permitted by Section 316(b) of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the Indenture, as amended; or (ii) in the event the Out-of-Court Threshold is not met and is not waived, amend the Indenture to enable implementation of the restructuring of the Company’s Notes through a proceeding pursuant to the Companies Act 2006 of England and Wales. Noteholders that so consent (including the Consenting Noteholders who have agreed to consent through the Transaction Support Agreement) will receive an aggregate amount of $1.0 million, pro rata (based on amount of Notes consented to by each such Noteholder), payable in First-Out Notes or Second Out Notes, depending on the form of new notes such Noteholder is receiving in exchange for their Notes. The Transaction Support Agreement contemplates that, if Noteholders of less than 90% (subject to modification or waiver in accordance with the Transaction Support Agreement) of the outstanding principal amount of the Company’s Notes become party to the Transaction Support Agreement or validly tender their Notes in the Exchange Transaction, the restructuring of the Company’s Notes will be implemented through a proceeding initiated in the English Court by Fossil UK pursuant to the Companies Act 2006 of England and Wales. The Transaction Support Agreement also contains certain customary representations, warranties and other agreements by the parties thereto, and contemplates that the Company Parties and Consenting Noteholders enter into a Mutual Release Agreement, providing for customary mutual releases of claims among the parties thereto. ABL Credit Agreement On August 13, 2025, the Company and certain of its subsidiaries identified therein as guarantors entered into the ABL Credit Agreement with the Lenders, the Administrative Agent and the Company as a borrower to refinance the Revolving Credit Facility. Pursuant to the ABL Credit Agreement, the Lenders have provided new financing commitments to the Company under a new senior secured asset-based revolving credit facility (the “New Revolving Credit Facility”) in an aggregate principal amount of $150 million. Borrowings under the New Revolving Credit Facility will bear interest at a rate of 5.00% for term SOFR borrowings and 4.00% for base rate borrowings, payable monthly in arrears. The Lenders will receive an upfront commitment fee equal to 2.00% of the aggregate commitments under the New Revolving Credit Facility. The Company’s obligations under the New Revolving Credit Facility are guaranteed by certain of the Company’s subsidiaries, and those obligations and the guarantees are secured by substantially all of the assets of the Company and certain of its subsidiaries. The ABL Credit Agreement includes customary representations and warranties, covenants applicable to the Company and events of default. If an event of default under the ABL Credit Agreement occurs, the Lenders may, among other things, declare the outstanding obligations under the ABL Credit Agreement to be immediately due and payable. The New Revolving Credit Facility has a maturity date of August 13, 2030, subject to a springing maturity date if on the date that is the 91st day prior to its scheduled maturity any material indebtedness as defined in the ABL Credit Agreement is outstanding. Warrant Agreement On August 13, 2025, the Company entered into a securities exchange agreement with certain institutional stockholders pursuant to which the Company agreed to exchange an aggregate of 2,500,000 shares of the Company’s outstanding Common Stock owned by the institutional holders for pre-funded warrants to purchase an aggregate of 2,500,000 shares of the Company’s Common Stock. Subject to certain ownership limitations, each pre-funded warrant is exercisable into one share of Common Stock at a price per share of $0.01.

X
- References No definition available. + Details
Name: | us-gaap_SubsequentEventsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
Name: | us-gaap_SubsequentEventsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration