UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event
reported) April 30, 2007
Build-A-Bear Workshop, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 001-32320 43-1883836
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1954 Innerbelt Business Center Drive
St. Louis, Missouri 63114
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(Address of Principal Executive Offices) (Zip Code)
(314) 423-8000
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(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
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On May 1, 2007, Build-A-Bear Workshop, Inc. (the "Company") issued a
press release announcing, among other things, total revenue, net income, net
retail sales, gross margin and diluted earnings per share for the first quarter
of fiscal 2007. The press release also included expected earnings and diluted
earnings per share for the second quarter and full year of fiscal 2007. A copy
of the press release is furnished as Exhibit 99.1 hereto and is incorporated by
reference herein. The description of the press release contained herein is
qualified in its entirety by the full text of such exhibit.
Item 7.01. Regulation FD Disclosure.
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On April 30, 2007, Build-A-Bear Workshop, Inc. ("BABW" or the "Company") entered
into a series of agreements whereby it agreed to make an additional equity
investment in, and perform additional consulting services for, Retail
Entertainment Concepts, LLC ("REC"). REC is an early-stage company that has
developed an interactive retail concept targeted primarily to boys and their
families.
Including both BABW's equity investment in REC for cash completed on April 30,
2007 and an earlier equity investment for cash that BABW made in May 2006, BABW
has paid approximately $2,960,000 in exchange for 3,040,571 Class A Membership
Units (at a price of approximately $0.97 per Unit) in REC. The Class A
Membership Units are preferred units with customary rights associated with a
private company investment, including pre-emptive rights for future issuances by
REC, a right of first refusal on certain transfers by the other members, co-sale
rights on certain transfers by the other members, registration rights in the
event of a conversion to a corporation and subsequent public offering.
Under a consulting services agreement executed in conjunction with the closing
of the April 30, 2007 financing, BABW is providing operational support services
to REC in exchange for additional Class A Membership Units on a per unit
valuation of the most immediate preceding preferred unit financing, in an amount
to be determined in relation to the aggregate amount of services to be performed
during the year. BABW currently estimates it will provide approximately
$1,200,000 in services during 2007 and expects to receive an amount of Class A
membership units based on a per unit valuation of $0.97.
Also in conjunction with its direct cash investment in REC, BABW entered into an
agreement with an entity controlled by the original founders of REC,
Construct-A-Car, Inc. ("CAC"), providing for: (i) the purchase by BABW of
312,000 common units of REC owned by CAC at $0.011 per unit, or a total of
$3,428; (ii) the purchase, for $150,000, of a five-year "call" option,
exercisable until April 2012, from CAC to acquire an additional 1,250,000 of REC
common units owned by the CAC, at an exercise price of $1.25 per common unit;
and (iii) a "put" option which CAC may exercise at any time between April 2008
and April 2012, requiring BABW to purchase some or all of such 1,250,000 shares
of common units of REC owned by CAC, at fifty cents ($0.50) per unit. The
aggregate number of units subject to the put and call is 1,250,000 units. The
$150,000 purchase price for the option would offset the purchase price on a put,
but would not offset the call price.
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Additionally, BABW maintains an advisory services agreement signed in May 2006
under which BABW provides advisory services to REC in exchange for warrants to
purchase 10% of the fully diluted equity of REC, at an aggregate exercise price
of $800. BABW could exercise the warrants upon certain specified events,
including an IPO of REC, any reclassification, reorganization, consolidation,
merger, sale of substantially all the assets of REC or its successor, a
bankruptcy or similar event or any voluntary or involuntary dissolution,
liquidation or winding-up of REC.
As a result of the transactions described above, BABW would own as much as
approximately 34% of fully diluted equity in REC by early 2008 (excluding of any
additional funding rounds by REC which may impact BABW's percentage ownership,
and including the full exercise of the option/put on the REC shares owned by CAC
and the issuance of equity in exchange for the anticipated services as described
above).
Maxine Clark, BABW's Chairman and Chief Executive Bear, continues to serve on
the management committee of REC.
The information furnished in this Item 7.01 is being furnished and shall not be
deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of
1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, regardless of any
general incorporation language in such filing. In addition, this report shall
not be deemed an admission as to the materiality of any information contained
herein that is required to be disclosed solely as a requirement of this Item.
Item 9.01. Financial Statements and Exhibits.
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(d) Exhibits
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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 hereunto duly authorized.
BUILD-A-BEAR WORKSHOP, INC.
Date: May 1, 2007 By: /s/ Tina Klocke
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Name: Tina Klocke
Title: Chief Financial Bear,
Secretary and Treasurer
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99.1 Press Release dated May 1, 2007
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