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Item 8. Financial Statements and Supplementary Data

2022-03-03 compared with 2021-03-11 · 146 added, 172 removed, 922 unchanged (26% of the section changed)

3 unchanged sentences

YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Financial Statements:

Consolidated Statements of Operations

Consolidated Statements of I ncome

Consolidated Statements of Comprehensive Income

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We have audited the accompanying consolidated balance sheets of Funko, Inc.

and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes, and the financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes, and the financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31,

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Other comprehensive income:

Foreign currency translation gain (loss), net of tax effect of $( 274 ), $( 282 ) and $ 51 for the years ended December 31, 2020, 2019 and 2018, respectively

Foreign currency translation (loss) gain, net of tax effect of $ 163 , $( 274 ) and $( 282 ) for the years ended December 31, 2021, 2020 and 2019, respectively

( 683 ) 1,415 1,458

Reclassification of foreign currency translation gain into net income ( 96 ) — —

Comprehensive income 67,075 11,178 29,278

23 unchanged sentences

Current liabilities:

Line of credit $ — $ 25,822

Current portion long-term debt, net of unamortized discount $ 17,395 $ 10,758

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Equity-based compensation — — — — 13,044 — — — 13,044

Shares issued for equity-based compensation awards 175 — — — 28 — — — 28

Activity under equity-based compensation plans 359 — — — 2,218 — — — 2,218

Shares issued for purchase consideration 127 — — — 2,221 — — — 2,221

Cumulative translation adjustment,

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Equity-based compensation — — — — 10,116 — — — 10,116

Shares issued for equity-based compensation awards 359 — — — 2,218 — — — 2,218

Shares issued for purchase consideration 127 — — — 2,221 — — — 2,221

Activity under equity-based compensation plans 226 — — — 118 — — — 118

Cumulative translation adjustment,

7 unchanged sentences

Equity-based compensation — — — 12,994 — — — 12,994

Shares issued for equity-based compensation awards 226 — — — 219 — — — 219

Shares withheld related to net share settlement of equity-based compensation awards — — — — ( 101 ) — — — ( 101 )

Activity under equity-based compensation plans 554 — — 5,956 — — — 5,956

Cumulative translation adjustment,

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FAH, LLC 3,877 — ( 3,349 ) — 20,746 — — ( 20,746 ) —

Other — — — — 200 ( 96 ) ( 253 ) 950 801

Net income — — — — — — 43,900 23,954 67,854

12 unchanged sentences

Equity-based compensation 12,994 10,116 13,044

Accretion of discount on long-term debt 278 952 1,414

Amortization of debt issuance costs 1,074 258 709

Amortization of debt issuance costs and debt discounts 1,118 1,352 1,210

Loss on debt extinguishment 675 — —

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Acquisitions, net of cash 199 — ( 6,369 )

Other 179 — —

Net cash used in investing activities ( 27,381 ) ( 18,482 ) ( 48,633 )

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FAH, LLC owns 100 % of Funko Holdings LLC ("FHL") and FHL owns 100 % of Funko, LLC, a limited liability company formed in the state of Washington, which is its operating entity.

Funko, LLC is headquartered in Everett, Washington and is a leading pop culture consumer products company.

Funko, LLC designs, sources, and distributes licensed pop culture products.

The Company is headquartered in Everett, Washington and is a leading pop culture consumer products company.

The Company designs, sources, and distributes licensed pop culture products.

The IPO and related reorganization transactions (the “Transactions”) resulted in the Company being the sole managing member of FAH, LLC.

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Cash equivalents include amounts due from third-party financial institutions for credit and debit card transactions.

These receivables typically settle in less than 5 days and were $ 0.9 million and $ 0.2 million for December 31, 2020 and 2019, respectively.

These transactions typically settle in less than 5 days and were $ 1.5 million and $ 0.9 million at December 31, 2021 and 2020, respectively.

Concentrations of Business and Credit Risk

The Company grants credit to its customers on an unsecured basis.

The Company monitors the financial health of its customers and will take actions to mitigate a customer's credit risk if a negative financial forecast is expected.

As of December 31, 2021 and 2020, the balance of accounts receivable consisted of 18 % and 11 %, respectively, of amounts owed from the largest customer for the given period.

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For the years ended December 31, 2021, 2020 and 2019 there was no individual customer that generated net sales over 10%.

For the year ended December 31, 2021, 26 % of sales were related to the Company’s two largest license agreements ( 13 % each) with no other license agreements accounting for more than 10% of sales.

For the year ended December 31, 2020, 12 % and 11 % of sales were related to the Company’s two largest license agreements with no other license agreements accounting for more than 10% of sales.

For both of the years ended December 31, 2019 and 2018, there were three license agreements that accounted for more than 10% of sales.

For the year ended December 31, 2019, 13 %, 11 % and 11 % of sales were related to the Company’s three largest license agreements with no other license agreements accounting for more than 10% of sales.

The Company maintains its cash within bank deposit accounts at high quality, accredited financial institutions.

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During the year ended December 31, 2019, the Company recorded a $ 16.8 million charge related to the write-down of inventory as a result of the Company's decision to dispose of slower moving inventory to increase operational capacity.

This charge is incremental to normal course reserves.

This charge was incremental to normal course reserves.

Property and Equipment

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In situations where a minimum commitment is not expected to be met based on expected revenues, we will accrue up to the minimum amount when it is reasonably certain that revenues generated will not meet the minimum commitment.

Royalty and license expense is recorded within cost of sales on the consolidated statements of operations.

Royalty and license expense is recorded within cost of sales on the consolidated statements of income.

Royalty expenses for the years ended December 31, 2021 , 2020 and 2019, were $ 162.0 million, $ 105.0 million and $ 126.8 million, respectively.

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The Company enters into cooperative advertising arrangements with customers.

The fees related to these arrangements are recorded as a reduction of net sales in the accompanying consolidated statements of operations because the Company has determined it does not receive an identifiable benefit and cannot reasonably estimate the fair value of these arrangements.

The fees related to these arrangements are recorded as a reduction of net sales in the accompanying consolidated statements of income because the Company has determined it does not receive an identifiable benefit and cannot reasonably estimate the fair value of these arrangements.

Product Design and Development Costs

Product design and development costs are recognized in selling, general and administrative expenses in the consolidated statements of operations as incurred.

Product design and development costs are recognized in selling, general and administrative expenses in the consolidated statements of income as incurred.

Product design and development costs for the years ended December 31, 2021, 2020 and 2019, were $ 6.8 million, $ 5.1 million, and $ 5.2 million, respectively.

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Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of Funko, Inc.

are included in other expense (income), net on our consolidated statements of operations.

In connection with the settlement and remeasurement of intercompany balances, we recorded a loss of $ 0.4 million and gains of $ 0.7 million and $ 0.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

are included in other expense (income), net on our consolidated statements of income.

In connection with the settlement and remeasurement of intercompany balances, we recorded a no minal loss, loss of $ 0.4 million and gain of $ 0.7 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The income tax effects related to the unrealized foreign currency component of other comprehensive income are reclassified to earnings only when the net investment is sold, or when a liquidation of the respective net investment in the foreign entity is substantially completed.

Recently Adopted Accounting Standards

Credit Losses.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments," and since modified the standard with several ASUs (collectively, the "new credit loss standard").

The new credit loss standard requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

The Company adopted the standard on January 1, 2020 with no recorded cumulative-effect adjustment.

Comparative information has not been restated and continues to be reported under the standards in effect for those periods.

In 2019, the Company completed the acquisition of Forrest-Pruzan Creative, LLC which was accounted for as a business combination.

There were no recently adopted accounting standards during the year ended December 31, 2021 that had a material effect of the financial statements.

On March 26, 2021, the Company acquired a majority of the membership interests of TokenWave LLC, the developer of TokenHead, a mobile app and website for showcasing and tracking Non-Fungible Token (“NFT”) holdings.

This transaction represented an opportunity to expand the Company’s product offerings into digital NFTs.

The Company accounted for the acquisition as a business combination.

The purchase consideration, fair value of the assets acquired and liabilities assumed, and acquisition related transaction costs were not material.

The activity of TokenWave LLC included in the Company’s consolidated statements of income from the acquisition date to December 31, 2021 was not material.

On February 11, 2019, the Company acquired 100 % of the membership interests of Forrest-Pruzan Creative LLC (the “Forrest-Pruzan Acquisition”), a board game development studio in Seattle, WA, which now operates as Funko Games, LLC.

The total purchase consideration of $ 11.9 million was allocated on a relative fair value basis between net assets acquired and liabilities assumed of $ 11.6 million and noncompetition agreements entered into contemporaneously with the acquisition of $ 0.3 million.

The total purchase consideration of $ 11.9 million was allocated on a fair value basis between net assets acquired and liabilities assumed of $ 11.6 million and noncompetition agreements entered into contemporaneously with the acquisition of $ 0.3 million.

The finalization of the purchase price allocation resulted in no change from the preliminary estimate.

The activity of Funko Games, LLC included in the Company’s consolidated statements of operations from the acquisition date to December 31, 2019 was not material.

The purchase consideration allocated to the acquisition was as follows:

The activity of Funko Games, LLC included in the Company’s consolidated statements of income from the acquisition date to December 31, 2019 was not material.

The purchase consideration allocated to the Forrest-Pruzan Acquisition was as follows:

Purchase Consideration at Fair Value

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Consideration transferred $ 11,646

The purchase price allocation for the acquisition was as follows:

Assets (Liabilities) Acquired (Assumed)

at Fair Value

(in thousands)

Cash and cash equivalents $ 131

Property and equipment 14

Operating lease right-of-use assets 1,027

Goodwill 8,465

Intangible assets 3,300

Other assets 17

Current liabilities ( 281 )

Operating lease liabilities ( 1,027 )

Consideration transferred $ 11,646

The following table summarizes the identifiable intangible assets acquired in connection with the transactions described above and their estimated useful lives:

Estimated Fair Value of

Assets Acquired Estimated

(in thousands) (years)

Intangible asset type:

Intellectual property $ 720 3

Customer relationships 2,580 3

Intangible assets $ 3,300

Goodwill and Intangible Assets

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The Company has determined that it has one reporting unit for which discrete financial information is available and results are regularly reviewed by management.

During the year ended December 31, 2020, the Company assessed a series of triggering events related to the Company’s book value in excess of the market capitalization of the Company.

Such triggering events included the World Health Organization declaring on March 11, 2020 that the COVID-19 outbreak constituted a global pandemic and the Company releasing a business update on March 20, 2020 announcing the closing of its retail locations, that employees would be working from home and the withdrawal of its 2020 financial guidance that had been issued on March 5, 2020.

Due to sustained lower market capitalization below book value, the Company performed a quantitative analysis at each of the 2020 quarterly reporting periods.

The fair value of the reporting unit was determined using a market approach which considered the current market capitalization of the Company as well as a control premium that was estimated based upon comparable market transactions to reflect the synergies and other benefits available to a market participant.

The Company’s long-lived asset groups, which includes intangible assets, property and equipment and operating lease right-of-use assets net of operating lease liabilities, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group might not be recoverable.

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Balance as of January 1, 2020 $ 124,835

Acquisition 8,465

Foreign currency remeasurement 226

Balance as of December 31, 2020 $ 125,061

Acquisition 1,662

Foreign currency remeasurement ( 72 )

1 unchanged sentence

Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date.

Intangible assets acquired include intellectual property (product design), customer relationships, and trade names.

Intangible assets acquired include intellectual property (product design), customer, licensor and supplier relationships, trade names, and noncompetition agreements.

These are definite-lived assets and are amortized on a straight-line basis over their useful lives.

1 unchanged sentence

Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

As of December 31, 2021, there were also $ 0.1 million in indefinite-lived assets not subject to amortization but tested for impairment.

No impairment charges relating to intangible assets were recorded in the years ended December 31, 2021, 2020 and 2019.

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An allowance for doubtful accounts is determined based on various factors, including specific identification of balances at risk for not being collected, historical experience, existing economic conditions and supportable forecasted changes.

The Company evaluates its general reserves based on historical loss information and applies reserve percentages based on aging schedule.

The Company evaluates its general portion of the allowance for doubtful accounts based on historical loss information and applies reserve percentages based on aging schedule.

Days past due is calculated from contractual due date of the trade receivable contract.

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The trade receivables are generally due in 30 to 90 days.

In addition to the general reserve, certain doubtful accounts are evaluated for a specific reserve.

In addition to the general portion of the allowance for doubtful accounts, certain doubtful accounts are evaluated for a specific reserve.

These accounts generally include significantly past due or other factors known where a substantial portion or all of the balance is uncollectible.

Receivables are written-off when all reasonable collection efforts have been exhausted and it is probable the balance will not be collected.

The Company monitors the financial health of its customers and will take actions to mitigate a customer's credit risk if a negative financial forecast is expected.

Accounts receivable, net consisted of the following (in thousands):

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Accounts receivable, net $ 187,688 $ 131,837

Accounts receivable includes a $ 0.8 million and $ 3.4 million tenant improvement receivable from a lessor as of December 31, 2020 and 2019, respectively.

Accounts receivable includes a $ 0.8 million tenant improvement receivable from a lessor as of both December 31, 2021 and 2020.

In addition, accounts receivable as of December 31, 2021 includes an income tax receivable of $ 0.3 million.

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Allowance for doubtful accounts - beginning $ 3,580 $ 2,354

Charged to costs and other 2,396 1,094

Charged to costs 895 2,396

Write offs ( 1,319 ) ( 1,170 )

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Other current liabilities

45,839 23,101

Accrued liabilities and other current liabilities $ 121,267 $ 43,949

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and Level 3, defined as unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Cash equivalents.

As of December 31, 2021 and 2020, cash equivalents included $ 56.9 million and $ 34.5 million, respectively, of highly liquid money market funds, which are classified as Level 1 within the fair value hierarchy.

The estimated fair values of the Company’s debt instruments, which are classified as Level 3 financial instruments, at December 31, 2021 and 2020, was approximately $ 175.5 million and $ 193.9 million, respectively.

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Debt consists of the following (in thousands):

Revolving Credit Facility $ — $ 25,822

Term Loan Facility 175,500 193,875

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2022 $ 18,000

Credit Facilities

On October 22, 2018, the Company entered into the Credit Facilities.

Upon closing, proceeds from the Credit Facilities were primarily used to repay all of the outstanding aggregate principal balance and accrued interest of $ 209.6 million on the previous Term Loan A Facility and $ 65.3 million on the previous Revolving Credit Facility.

Upon repayment, both the previous Term Loan A Facility and the previous Revolving Credit Facility were terminated.

On February 11, 2019, the Company amended the Credit Facilities to increase the Revolving Credit Facility to $ 75.0 million, reflecting the incremental capacity of $ 25.0 million contemplated under the Credit Facilities prior to such amendment.

On September 23, 2019, the Company entered into a second amendment to the Credit Facilities (the “Second Amendment”) The Second Amendment extended the maturity date of the term loans and revolving credit facility under the credit agreement to September 23, 2024, reduced the interest margin applicable to all loans under the credit agreement by 0.75 % and reduced certain fees incurred under the Credit Agreement.

The Second Amendment also allows the Company to request that the Term Loan Facility be increased by an additional $ 25.0 million.

On May 5, 2020 the Company entered into a third amendment to the Credit Agreement (“Third Amendment”) which amended and modified the Credit Agreement, to, among other things, (i) waive the financial covenants under the Credit Agreement for the fiscal quarters ending June 30, 2020 and September 30, 2020 (the “Waiver Period”), (ii) add a requirement to maintain a minimum liquidity of at least $30.0 million until the Leverage Ratio (as defined in the Credit Agreement) is less than 2.50 to 1.00 for a period of four consecutive fiscal quarters, (iii) hold the incurrence ratios for certain restricted payments, investments and dispositions at the levels applicable prior to the effectiveness of the Third Amendment, (iv) increase the interest and fees payable under the Credit Agreement from the date of Third Amendment through (but excluding) the first date on which the Company receives cumulative net cash proceeds of at least $50.0 million from certain issuances of permitted equity or convertible subordinated debt and (v) allow that any calculation of Consolidated EBITDA (as defined in the Credit Agreement) that includes the fiscal quarter ended December 31, 2019 may include non-cash expenses for inventory write-downs incurred by the Company during such quarter.

For the four consecutive fiscal quarter period ended June 30, 2020 we were able to demonstrate a leverage ratio of less than 2.50 to 1:00 and were therefore no longer subject to the minimum liquidity requirement for the three months ended September 30, and December 31, 2020, respectively.

As amended, the Term Loan Facility matures on September 23, 2024 (the “Maturity Date”).

The Term Loan Facility amortizes in quarterly installments in aggregate amounts equal to 5.00 % of the original principal amount of the Term Loan Facility in the first and second years of the Term Loan Facility, 10.00 % of the original principal amount of the Term Loan Facility in the third and fourth years of the Term Loan Facility and 12.50 % of the original principal amount of the Term Loan Facility in the fifth and sixth year of the Term Loan Facility, with any outstanding balance due and payable on the Maturity Date.

The first amortization payment was on December 31, 2018.The Revolving Credit Facility terminates on the Maturity Date and loans thereunder may be borrowed, repaid, and reborrowed up to such date.

As amended, loans under the Credit Facilities bear interest, at the Company’s option, at either the Euro-Rate (as defined in the Credit Agreement), or in the case of swing loans, the Swing Rate (as defined in the Credit Agreement), plus 3.00 % or the Base Rate (as defined in the Credit Agreement) plus 2.00 %, with 0.25 % step-downs based on the achievement of certain leverage ratios following the Closing Date.

The Euro-Rate is subject to a 1.00 % floor and for loans based on the Euro-Rate, interest payments are due at the end of each applicable interest period.

The Credit Facilities are secured by substantially all assets of the Company and any of its existing or future material domestic subsidiaries, subject to customary exceptions.

As of December 31, 2020, we were in compliance with all of the covenants in our Credit Facilities.

The Borrowers may request that the Credit Facilities be increased by an additional $ 25.0 million.

At December 31, 2020, the Company had $ 193.9 million of borrowings outstanding under the Term Loan Facility.

We had no borrowings under the Revolving Credit Facility as of December 31, 2020 and an available borrowing capacity of $ 75.0 million.

Former Credit Facilities

On October 22, 2018, the Company entered into a credit agreement (as amended, the “Former Credit Agreement”) providing for a term loan facility in the amount of $ 235.0 million (the “Former Term Loan Facility”) and a revolving credit facility of $ 50.0 million (the “Former Revolving Credit Facility”) (together the “Former Credit Facilities”).

On February 11, 2019, the Company amended the Former Credit Agreement to increase the Former Revolving Credit Facility to $ 75.0 million.

On September 23, 2019, the Company entered into a second amendment to the Former Credit Agreement, which extended the maturity date of the Former Term Loan Facility and the Former Revolving Credit Facility under the Former Credit Facilities to September 23, 2024 (the “Former Facility Maturity Date”), reduced the interest margin applicable to all loans under the Former Credit Agreement by 0.75 % and reduced certain fees incurred under the Former Credit Agreement.

The second amendment also allowed the Company to request an additional $ 25.0 million increase to the Former Term Loan Facility.

On May 5, 2020 the Company entered into a third amendment to the Former Credit Agreement, which modified the financial covenants and adjusted the required leverage levels for the Leverage Ratio (as defined in the Former Credit Agreement) to provide the Company with additional flexibility.

The Former Term Loan Facility amortized in quarterly installments in aggregate amounts equal to 5.00 % of the original principal amount of the Former Term Loan Facility in the first and second years of the Former Term Loan Facility, 10.00 % of the original principal amount of the Former Term Loan Facility in the third and fourth years of the Former Term Loan Facility and 12.50 % of the original principal amount of the Former Term Loan Facility in the fifth year of the Former Term Loan Facility, with any outstanding balance due and payable on the Maturity Date.

The first amortization payment was on December 31, 2018.

The Former Revolving Credit Facility would have terminated on the Former Facility Maturity Date and loans thereunder were eligible to be borrowed, repaid, and reborrowed up to such date.

As amended, loans under the Credit Facilities bore interest, at the Company’s option, at either the Euro-Rate (as defined in the Credit Agreement), or in the case of swing loans, the Swing Rate (as defined in the Credit Agreement), plus 3.00 % or the Base Rate (as defined in the Credit Agreement) plus 2.00 %, with 0.25 % step-downs based on the achievement of certain leverage ratios.

The Euro-Rate was subject to a 1.00 % floor and for loans based on the Euro-Rate, interest payments were due at the end of each applicable interest period.

The Former Credit Facilities were secured by substantially all of the assets of the Company and its material domestic subsidiaries, subject to customary exceptions.

As of December 31, 2020, the Company was in compliance with all of the covenants in its Former Credit Agreement.

In September 2021, all of the outstanding aggregate principal balance and accrued interest of $ 180.1 million on the Company’s Former Term Loan Facility was repaid, and the Company recorded a $ 0.7 million loss on debt extinguishment as a result of the write-off of unamortized deferred financing fees.

New Credit Facilities

On September 17, 2021, the Company, entered into a new credit agreement (the “New Credit Agreement”) providing for a term loan facility in the amount of $ 180.0 million (the “New Term Loan Facility”) and a revolving credit facility of $ 100.0 million (the “New Revolving Credit Facility”) (together the “New Credit Facilities”).

Proceeds from the New Credit Facilities were primarily used to repay the Former Credit Facilities.

The New Term Loan Facility matures on September 17, 2026 (the “Maturity Date”) and amortizes in quarterly installments in aggregate amounts equal to 2.50 % of the original principal amount of the New Term Loan Facility, with any outstanding balance due and payable on the Maturity Date.

The first amortization payment commences with the quarter ending on December 31, 2021.

The New Revolving Credit Facility also terminates on the Maturity Date and loans thereunder may be borrowed, repaid, and reborrowed up to such date.

Loans under the New Credit Facilities will, at the Borrowers’ option, bear interest at either (i) LIBOR, EURIBOR, HIBOR, CDOR, Daily Simple SONIA and/or the Central Bank Rate, as applicable, plus 2.50 % or (ii) ABR or the Canadian prime rate, as applicable, plus 1.50 %, in each case of clauses (i) and (ii), subject to two 0.25 % step-downs based on the achievement of certain leverage ratios following the Closing Date.

Each of LIBOR, EURIBOR, HIBOR, CDOR and Daily Simple SONIA rates are subject to a 0 % floor.

For loans based on ABR, the Central Bank Rate or the Canadian prime rate, interest payments are due quarterly.

For loans based on Daily Simple SONIA, interest payments are due monthly.

For loans based on LIBOR, EURIBOR, HIBOR or CDOR, interest payments are due at the end of each applicable interest period.

The New Credit Facilities are secured by substantially all of the assets of the Company and any of its existing or future material domestic subsidiaries, subject to customary exceptions.

As of December 31, 2021, the Company was in compliance with all of the covenants in its New Credit Agreement.

At December 31, 2021 and 2020, the Company had $ 175.5 million and $ 193.9 million of borrowings outstanding under the New Term Loan Facility and Former Term Loan Facility, respectively, and no outstanding borrowings under the New Revolving Credit Facility and Former Revolving Credit Facility, respectively.

At December 31, 2021 and 2020, the Company had $ 100.0 million and $ 75.0 million available under the New Revolving Credit Facility and Former Revolving Credit Facility, respectively.

There were no outstanding letters of credit as of December 31, 2021 and 2020.

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The Company combines lease and non-lease components for new and reassessed leases.

Some operating leases also contain the option to renew for five-year periods at prevailing market rates at the time of renewal.

Some operating leases also contain the option to renew for five years periods at prevailing market rates at the time of renewal.

In addition to minimum rent, certain of the leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs.

For the year ended December 31, 2020 and 2019, d ifferences between rent expense and rent paid are recognized as adjustments to operating lease right-of-use assets on the consolidated balance sheets.

For certain leases the Company receives lease incentives, such as tenant improvement allowances, and records those as adjustments to operating lease right-of-use assets and operating leases liabilities on the consolidated balance sheets and amortize the lease incentives on a straight-line basis over the lease term as an adjustment to rent expense.

Rent expense, included in selling, general and administrative expenses on the consolidated statements of operations, was $ 15.3 million, $ 14.9 million and $ 11.7 million for the years ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2020 and 2019, the Company had recorded operating lease liabilities of $ 71.4 million and $ 72.9 million, respectively and operating lease right-of-use assets of $ 58.1 million and $ 62.9 million respectively.

During the years ended December 31, 2020 and 2019, operating cash outflows relating to operating lease liabilities was $ 11.6 million and $ 8.3 million, respectively and operating lease right-of-use assets obtained in exchange for new operating lease obligations was $ 5.8 million and $ 33.3 million, respectively, net of lease incentives obtained of $ 0.3 million and $ 3.2 million, respectively.

Rent expense, included in selling, general and administrative expenses on the consolidated statements of income, was $ 16.5 million, $ 15.3 million and $ 14.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.

During the years ended December 31, 2021 and 2020, operating cash outflows relating to operating lease liabilities was $ 14.4 million and $ 11.6 million, respectively and operating lease right-of-use assets obtained in exchange for new operating lease obligations was $ 4.0 million, with no lease incentives obtained and $ 5.8 million, net of lease incentives obtained of $ 0.3 million, respectively.

As of December 31, 2021 and 2020, the Company’s operating leases had a weighted-average remaining term of 7.0 years and 7.3 years, respectively and weighted-average discount rate of 6.22 % and 6.28 %, respectively.

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The related lease liability was remeasured and reduced by $ 0.9 million.

The lease agreement was terminated in December 2021.

In January 2020, the Company has also entered into a non-cancellable operating sub-lease for office space expiring in 2024.

Rental income recognized for the year ended December 31, 2020 was $ 0.3 million, included as a reduction of selling, general and administrative expenses on the consolidated statements of operations.

Rental income recognized for the years ended December 31, 2021 and 2020 was $ 0.3 million and $ 0.3 million, respectively, included as a reduction of selling, general and administrative expenses on the consolidated statements of income.

The future payments on the Company’s operating lease liabilities as of December 31, 2021 were as follows (in thousands):

4 unchanged sentences

Total $ 65,418

Not included in the lease payments table above are future payments related to Warehouse and Distribution lease in Buckeye, Arizona.

The Company expects lease commencement to occur in mid-2022 and extend through October 2032.

The 862,000 square foot building is expected to add approximately $ 1.5 million, $ 4.6 million, $ 4.7 million, $ 4.8 million, $ 4.9 million and $ 31.2 million in minimum rental expense for 2022, 2023, 2024, 2025, 2026 and thereafter, respectively.

Income before income taxes consisted of (in thousands):

64 unchanged sentences

Deferred tax liabilities:

Investment in partnership

Property and equipment

4 unchanged sentences

Net deferred tax assets $ 73,764 $ 53,902

As of December 31, 2020 the Company had other carryforwards of $ 0.9 million and a net operating loss carryforward of $ 0.8 million.

As of 2019, the Company did no t have any federal or state net operating loss carryforwards nor other carryforwards for income tax purposes.

The Company evaluates its ability to realize deferred tax assets on a quarterly basis and establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset may not be realized.

1 unchanged sentence

However, a portion of the total basis difference will only reverse upon the eventual sale of its interest in FAH, LLC, which we expect would result in a capital loss.

As of December 31, 2020 and 2019, the Company established a valuation allowance in the amount of $ 12.4 million and $ 11.2 million, respectively, against the deferred tax asset.

As of December 31, 2021 and 2020, the Company has a valuation allowance in the amount of $ 14.8 million and $ 12.4 million, respectively, against the deferred tax asset.

Uncertain Tax Positions

5 unchanged sentences

Unrecognized tax benefits at January 1 $ 490 $ 490 $ 490

Increases for positions taken in current year — — —

Decreases for positions taken in current year ( 490 ) — —

Unrecognized tax benefits at December 31 $ — $ 490 $ 490

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Ending balance $ 82,884 $ 62,318 $ 65,816

Commitments and Contingencies

The following table summarizes the Company’s future minimum commitments as of December 31, 2020 (in thousands):

2021 2022 2023 2024 2025 Thereafter Total

Long term debt $ 11,750 $ 24,969 $ 29,375 $ 127,781 $ — $ — $ 193,875

Operating leases 14,315 14,312 11,952 11,279 10,028 27,614 89,500

Liabilities under tax

receivable agreement (1)

2,020 5,350 3,651 3,724 3,804 43,768 62,317

Minimum royalty

obligations (2)

4,985 231 63 — — — 5,279

The future payments on the Company’s tax receivable agreement liabilities as of December 31, 2021 are expected to be (in thousands):

Thereafter 55,663

Total $ 82,884

(1) See Note 13, Liabilities under Tax Receivable Agreement.

(2) Represents minimum guaranteed royalty payments under licensing arrangements.

Commitments and Contingencies

License Agreements

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The agreements generally require royalty payments based on product sales and in some cases may require minimum royalty and other related commitments.

The Company is expected to incur $ 11.2 million in minimum guaranteed royalty payments under licensing arrangements, including, $ 5.3 million in 2022, $ 4.3 million in 2023 and $ 1.7 million in 2024.

Employment Agreements

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An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.

For example, on March 10, 2020, a purported stockholder of the Company filed a putative class action lawsuit in the United States District Court for the Central District of California against us and certain of our officers, entitled Ferreira v.

The complaint alleges that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as well as Rule 10b-5 promulgated thereunder, by making allegedly materially misleading statements in our earnings announcement and Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, as well as by omitting material facts necessary to make the statements made therein not misleading.

The lawsuit seeks, among other things, compensatory damages and attorneys’ fees and costs.

Two additional complaints making substantially similar allegations— Nahas v.

and Dachev v.

—were filed April 3, 2020 in the United States District Court for the Central District of California and April 9, 2020 in the United States District Court for the Western District of Washington, respectively.

On June 11, 2020, the Central District of California actions were consolidated for all purposes into one action under the Ferreira caption, and a lead plaintiff and lead counsel were appointed pursuant to the Private Securities Litigation Reform Act.

Lead plaintiff filed the consolidated complaint on July 31, 2020, against us and certain of our officers and directors, as well as entities affiliated with ACON.

The consolidated complaint added Section 10(b) and 20(a) claims based on our earnings announcement and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, as well as claims under Section 20A of the Securities Exchange Act of 1934.

All defendants moved to dismiss the consolidated action on October 2, 2020, and briefing on the motions to dismiss concluded on January 29, 2021.

On February 26, 2021, the Court granted our motion to dismiss the Ferreira action, allowing the plaintiffs leave to amend the complaint.

On June 25, 2020, the Dachev action was voluntarily dismissed.

Five shareholder derivative actions based on the earnings announcement and Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 have been brought on behalf of the Company against certain of our directors and officers.

The Company is, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.

For example, on March 10, 2020, a purported stockholder of the Company filed a putative class action lawsuit in the United States District Court for the Central District of California against the Company and certain of its officers, entitled Ferreira v.

The original complaint alleged that the Company violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as well as Rule 10b-5 promulgated thereunder, by making allegedly materially misleading statements in its earnings announcement and Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, as well as by omitting material facts necessary to make the statements made therein not misleading.

The lawsuit sought, among other things, compensatory damages and attorneys’ fees and costs.

Two additional complaints making substantially similar allegations were filed April 3, 2020 in the United States District Court for the Central District of California and April 9, 2020 in the United States District Court for the Western District of Washington, respectively.

On June 11, 2020, the Central District of California actions were consolidated for all purposes into one action under the Ferreira caption, and lead plaintiffs and lead counsel were appointed pursuant to the Private Securities Litigation Reform Act;

shortly thereafter, the Western District of Washington action was voluntarily dismissed.

Lead plaintiffs filed the consolidated complaint on July 31, 2020, against the Company and certain of its officers and directors, as well as entities affiliated with ACON Funko Investors, L.L.C.

The consolidated complaint added Section 10(b) and 20(a) claims based on the Company’s earnings announcement and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, as well as claims under Section 20A of the Exchange Act.

All defendants moved to dismiss the consolidated action on October 2, 2020.

On February 25, 2021, the Court granted all defendants’ motions to dismiss the Ferreira action, allowing the lead plaintiffs leave to amend the complaint.

Lead plaintiffs filed their amended complaint on March 29, 2021, and all defendants moved to dismiss.

On October 25, 2021, the Court issued an order granting defendants’ motion in part and denying the motion in part.

Specifically, the court dismissed with prejudice all claims related to statements regarding Funko’s projected net sales and the claims based on inventory risk warnings in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, but denied the motion to dismiss as to claims based on inventory risk warnings in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

Several shareholder derivative actions based on the earnings announcement and Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 have been brought on behalf of the Company against certain of its directors and officers.

Specifically, on April 23, June 5, and June 10, 2020, the actions captioned Cassella v.

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These two actions were consolidated for all purposes into one action under the title In re Funko, Inc.

Stockholder Derivative Litigation on September 8, 2020.

On October 30, 2020, the consolidated action was transferred to the United States District Court for the Central District of California.

The complaints filed in the shareholder derivative actions have alleged breaches of fiduciary duties, unjust enrichment, waste of corporate assets, insider trading, and violations of the Exchange Act.

The actions seek, among other things, payment of damages to the Company and to disgorge the directors and officers from all profits and benefits they obtained due to their alleged wrongful conduct.

Additionally, between November 16, 2017 and June 12, 2018, seven purported stockholders of the Company filed putative class action lawsuits in the Superior Court of Washington in and for King County against us, certain of our officers and directors, ACON, Fundamental, the underwriters of our IPO, and certain other defendants.

Stockholder Derivative Litigation on September 8, 2020 and were subsequently transferred to the United States District Court for the Central District of California.

On April 23, 2021, both cases pending under the “Stockholder Derivative Litigation” caption were voluntarily dismissed, without prejudice.

Additionally, between November 16, 2017 and June 12, 2018, seven purported stockholders of the Company filed putative class action lawsuits in the Superior Court of Washington in and for King County against the Company, certain of its officers and directors, ACON, Fundamental Capital, LLC and Funko International, LLC (collectively, “Fundamental”), the underwriters of its IPO, and certain other defendants.

On July 2, 2018, the suits were ordered consolidated for all purposes into one action under the title In re Funko, Inc.

Securities Litigation .

On August 1, 2018, plaintiffs filed a consolidated complaint against us, certain of our officers and directors, ACON, Fundamental, and certain other defendants.

On October 1, 2018, we moved to dismiss the action.

On August 1, 2018, plaintiffs filed a consolidated complaint against the Company, certain of its officers and directors, ACON, Fundamental, and certain other defendants.

On October 1, 2018, the Company moved to dismiss the action.

The motion was fully briefed as of November 30, 2018, and oral argument on the motion was held on May 3, 2019.

On August 2, 2019, the Court granted our motion to dismiss the consolidated state litigation, allowing plaintiffs leave to amend the complaint.

The Court found, inter alia, that “Funko’s statements regarding its financial disclosures were not materially false or misleading” and that “plaintiffs have not shown that Funko’s ‘opinion statements’ were false or that such statements were not simply corporate optimism or puffery.” On October 3, 2019, plaintiffs filed a first amended consolidated complaint.

We moved to dismiss that complaint on December 5, 2019.

The motion was fully briefed as of March 17, 2020, and oral argument on the motion was held on May 15, 2020.

On August 5, 2020, the Superior Court of Washington in and for King County dismissed the consolidated action with prejudice.

Plaintiffs filed a notice of appeal to the Washington Court of Appeals on September 4, 2020 and their opening brief on February 12, 2021.

We expect briefing on the appeal to conclude mid-2021.

On August 2, 2019, the Court granted the Company’s motion to dismiss the action, allowing plaintiffs leave to amend the complaint.

On October 3, 2019, plaintiffs filed a first amended consolidated complaint.

The Company moved to dismiss that complaint on December 5, 2019 and on August 5, 2020, the Superior Court of Washington in and for King County dismissed the consolidated action with prejudice.

Plaintiffs appealed, and on November 1, 2021, the Court of Appeals reversed the trial court’s dismissal decision in most respects, and remanded the case to the trial court for further proceedings.

On January 13, 2022, the Company filed a petition seeking review of the Washington State Court of Appeals’ reversal by the Washington Supreme Court.

That petition is pending, and accordingly the case has not yet been remanded to the trial court.

On June 4, 2018, a putative class action lawsuit entitled Kanugonda v.

Funko, Inc., et al.

was filed in the United States District Court for the Western District of Washington against us, certain of our officers and directors, and certain other defendants.

was filed in the United States District Court for the Western District of Washington against the Company, certain of its officers and directors, and certain other defendants.

On January 4, 2019, a lead plaintiff was appointed in that case.

2 unchanged sentences

, have agreed to a stay of that action pending developments in the state case.

The complaints in Washington state court and Berkelhammer v.

allege that we violated Sections 11, 12, and 15 of the Securities Act of 1933, as amended, by making allegedly materially misleading statements in documents filed with the U.S.

Securities and Exchange Commission in connection with our IPO and by omitting material facts necessary to make the statements made therein not misleading.

The lawsuits seek, among other things, compensatory statutory damages and rescissory damages in account of the consideration paid for our Class A common stock by the plaintiffs and members of the putative class, as well as attorneys’ fees and costs.

Finally, on December 8, 2020 and February 3, 2021, two purported stockholders of the Company filed complaints against us in the Court of Chancery of the State of Delaware to compel inspection of books and records pursuant to 8 Del.

Those actions, captioned Silverberg v.

and De La Combe v.

, respectively, are pending.

We are party to additional legal proceedings incidental to our business.

While the outcome of these additional matters could differ from management’s expectations, we do not believe that the resolution of such matters is reasonably likely to have a material effect on our results of operations or financial condition.

The cases in Washington state court and Berkelhammer v.

allege that the Company violated Sections 11, 12, and 15 of the Securities Act of 1933, as amended, by making allegedly materially misleading statements in documents filed with the U.S.

Securities and Exchange Commission in connection with the Company’s IPO and by omitting material facts necessary to make the statements made therein not misleading.

The lawsuits seek, among other things, compensatory statutory damages and rescissory damages in account of the consideration paid for the Company’s Class A common stock by the plaintiffs and members of the putative class, as well as attorneys’ fees and costs.

On June 11, 2021, one of those purported stockholders filed a related derivative action, captioned Silverberg v.

Mariotti, et al.

, was filed in the Court of Chancery of the State of Delaware.

In response, on July 8, 2021, the Company moved to stay and dismiss the action.

On December 1, 2021, Silverberg stipulated to a stay of the action pending resolution of Ferreira v.

Funko, Inc., et al.

2:20-cv-02319.

On January 18, 2022, a stockholder filed a putative class action lawsuit in the Court of Chancery of the State of Delaware relating to the Company’s corporate “Up-C” structure and bringing direct claims for breach of fiduciary against certain current and former officers and directors.

On February 14, 2022, the Company moved to dismiss the complaint.

A briefing schedule on the motion to dismiss has not yet been set.

The Company is party to additional legal proceedings incidental to its business.

While the outcome of these additional matters could differ from management’s expectations, the Company does not believe that the resolution of such matters is reasonably likely to have a material effect on its results of operations or financial condition.

The Company identifies its segments according to how the business activities are managed and evaluated and for which discrete financial information is available and for which is regularly reviewed by its Chief Operating Decision Maker (“CODM”) to allocate resources and assess performance.

Because its CODM reviews financial performance and allocates resources at a consolidated level on a regular basis, it has one segment.

Because its CODM reviews financial performance and allocates resources at a consolidated level on a regular basis, the Company has one segment.

The following tables present summarized product information as a percent of sales:

28 unchanged sentences

One of the investors in Forbidden Planet is an employee of Funko UK, Ltd.

For the years ended December 31, 2020 and 2019, the Company recorded approximately $ 2.0 million and $ 2.3 million, respectively, in net sales from business with Forbidden Planet.

For the years ended December 31, 2021, 2020 and 2019, the Company recorded approximately $ 0.8 million, $ 2.0 million and $ 2.3 million, respectively, in net sales from business with Forbidden Planet.

At December 31, 2021 and 2020, accounts receivable from Forbidden Planet were $ 0.4 million and $ 0.5 million on the consolidated balance sheets, respectively.

In February 2019, in connection with the Forrest-Pruzan Acquisition, the Company assumed two leases of office space with Roll and Move, LLC and Roll and Move II LLC, both of which are owned by certain former owners of Forrest-Pruzan Creative LLC, one of whom remains an employee of the Company.

For both of the years ended December 31, 2020 and 2019, the Company recorded $ 0.2 million, of rental expense related to the leases, which was recorded in selling, general and administrative expenses in the Company’s consolidated statements of operations.

For the years ended December 31, 2021 and 2020, the Company recorded $ 0.3 million and $ 0.2 million, of rental expense related to the leases, which was recorded in selling, general and administrative expenses in the Company’s consolidated statements of Income.

Employee Benefit Plans

17 unchanged sentences

• Certain funds affiliated with ACON Funko Investors (the “Former Equity Owners”) exchanged their indirect ownership interests in common units of FAH, LLC for 12,921,039 shares of Class A common stock on a one-for-one basis;

• The Company entered into (i) a stockholders’ agreement with ACON Funko Investors and the Former Equity Owners, Fundamental Capital, LLC and Funko International, LLC (collectively, “Fundamental”) and Brian Mariotti, the Company’s Chief Executive Officer, (ii) a registration rights agreement with certain of the Original Equity Owners (including each of the Company’s executive officers), and (iii) a tax receivable agreement (the “Tax Receivable Agreement”) with FAH, LLC and each of the Continuing Equity Owners.

• The Company entered into (i) a stockholders’ agreement with ACON Funko Investors and the Former Equity Owners, Fundamental Capital, LLC and Funko International, LLC (collectively, “Fundamental”) and Brian Mariotti, the Company’s Chief Creative Officer, (ii) a registration rights agreement with certain of the Original Equity Owners (including each of the Company’s executive officers), and (iii) a tax receivable agreement (the “Tax Receivable Agreement”) with FAH, LLC and each of the Continuing Equity Owners.

The Transactions were effected on November 1, 2017, prior to the time the Company’s Class A common stock was registered under the Exchange Act, and prior to the completion of the IPO.

34 unchanged sentences

Options exercisable at December 31, 2021 1,760 $ 13.48 $ 10,152 6.81

Stock options awarded to employees under the 2017 Plan and 2019 Plan are generally granted with an exercise price equal to the closing market price of the Company’s common stock at the date of grant, vest over four years , and have ten years contractual terms.

A summary of restricted stock unit activity for the year ended December 31, 2021 is as follows:

Restricted Stock Units Weighted Average

Grant Date Fair Value Aggregate

Value Remaining

(in thousands) (in thousands) (years)

Grant Date Fair Value Remaining

(in thousands) (years)

Unvested at December 31, 2020 1,868 $ 12.58 2.37

12 unchanged sentences

Outstanding at December 31, 2020 228 0.05 2,437 2.41

Exercised ( 208 ) 0.85 944

Outstanding at December 31, 2021 228 $ 0.05 $ 4,278 1.41

2 unchanged sentences

In connection with the IPO, unvested common units to purchase profit interests in FAH, LLC were converted into 1,901,327 unvested common units of FAH, LLC.

A summary of unvested common unit activity for the year ended December 31, 2020 is as follows:

Units Weighted

(in thousands)

Unvested at December 31, 2019 42 $ 110

Vested ( 40 ) 106

Forfeited ( 2 ) 4

Unvested at December 31, 2020 — $ —

There were no unvested common units of FAH, LLC as of December 31, 2020.

The following table presents information on stock option exercises (in thousands):

21 unchanged sentences

Equity-based compensation expense is recognized on a straight-line basis over the vesting period of the award.

The Company records equity-based compensation to selling, general and administrative expense on the consolidated statements of operations.

The Company records equity-based compensation to selling, general and administrative expense on the consolidated statements of income.

Equity-based compensation for the years ended December 31, 2021, 2020 and 2019 was $ 13.0 million, $ 10.1 million and $ 13.0 million, respectively.

2 unchanged sentences

and $ 15.0 million is related to unvested restricted stock units in Class A common stock of Funko, Inc.

As of December 31, 2020, the Company expected to recognize these costs over a remaining weighted average period of 2.2 years for options to purchase Class A units in Funko, Inc., and 2.4 years for unvested restricted stock units in Class A common stock of Funko, Inc.

As of December 31, 2021, the Company expected to recognize these costs over a remaining weighted average period of 2.6 years for options to purchase Class A shares in Funko, Inc., and 2.2 years for unvested restricted stock units in Class A common stock of Funko, Inc.

Non-controlling Interests

9 unchanged sentences

Net income and comprehensive income of FAH, LLC excludes certain activity attributable to Funko, Inc., including $ 13.0 million, $ 10.0 million and $ 10.8 million of equity-based compensation expense for share-based compensation awards issued by Funko, Inc.

for the years ended December 31, 2020, 2019 and 2018, respectively, and $ 0.4 million of income tax benefit, $ 2.2 million and $ 3.6 million of income tax expense for corporate, federal, state and local taxes attributable to Funko, Inc.

for the years ended December 31, 2021, 2020 and 2019, respectively, and $ 14.3 million of income tax expense, $ 0.4 million income tax benefit and $ 2.2 million of income tax expense for corporate, federal, state and local taxes attributable to Funko, Inc.

for the years ended December 31, 2021, 2020 and 2019, respectively.

33 unchanged sentences

Condensed Financial Information of Registrant

CONDENSED STATEMENTS OF OPERATIONS

CONDENSED STATEMENTS OF INCOME

(PARENT COMPANY ONLY)

10 unchanged sentences

Income before income taxes 58,248 3,589 13,901

Income tax (benefit) expense ( 372 ) 2,176 3,599

Income tax expense (benefit) 14,348 ( 372 ) 2,176

Net income $ 43,900 $ 3,961 $ 11,725

8 unchanged sentences

Other comprehensive income:

Foreign currency translation gain (loss), net of tax effect of $( 274 ),

$( 282 ) and $ 51 for the years ended December 31, 2020, 2019 and

2018, respectively

Foreign currency translation (loss) gain, net of tax effect of $ 163 , $( 274 ) and $( 282 ) for the years ended December 31, 2021, 2020 and 2019, respectively

( 544 ) 927 958

Reclassification of foreign currency translation gain into net income $ ( 96 ) $ — $ —

Comprehensive income attributable to

15 unchanged sentences

Current liabilities:

Tax payable $ 14,684 $ —

Current portion of liabilities under tax receivable agreement 7,362 2,020

84 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data