Form 8-K - Current report

0001857154false00018571542024-07-172024-07-17

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

July 17, 2024

Date of Report (Date of earliest event reported)

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Krispy Kreme, Inc.

(Exact name of registrant as specified in its charter)

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Delaware			001-40573			37-1701311
(State or other jurisdiction of incorporation)			(Commission File Number)			(IRS Employer Identification No.)

2116 Hawkins Street, Charlotte, North Carolina 28203

(Address of principal executive offices)

[phone]

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

_________________________

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-14(c) under the Exchange Act (17 CFR 240.13e-14(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $0.01 par value per share

DNUT

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 1.01. Entry into a Material Definitive Agreement.

On July 17, 2024 (the “Effective Date”), Insomnia Cookies Holdings, LLC (“Insomnia”), a Delaware limited liability company and indirect subsidiary of Krispy Kreme, Inc. (the “Company”), entered into a Unit Purchase Agreement (the “Agreement”) with (i) Mistral Sleepless Holdings, LLC, a Delaware limited liability company (“Mistral”), and (ii) Verlinvest Cookies Holdings, Inc., a Delaware corporation (“Verlinvest”), in connection with a recapitalization of Insomnia.

Pursuant to the terms and conditions of the Agreement, Insomnia issued and sold preferred interest membership units of Insomnia (i) to Mistral for an aggregate purchase price payment of $62.1 million and (ii) to Verlinvest for an aggregate purchase price payment of $78.5 million, in a simultaneous sign and close transaction (the “Transaction”).

In addition, Insomnia and Krispy Kreme Doughnut Corporation (“KKDC”), a North Carolina corporation and an indirect, wholly owned subsidiary of the Company, redeemed 1,010,027 Insomnia Common Units held by KKDC in exchange for $127.4 million. Following the consummation of the redemption, the Company indirectly owns approximately 34% of Insomnia.

The foregoing summary of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement.

On July 22, 2024, the Company issued a press release announcing the Transaction. A copy of such press release is attached as Exhibit 99.1 and is also available on the Company’s website at investors.krispykreme.com.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Substantially concurrently with the Transaction, Insomnia and KKDC entered into agreements with each of Michael Tattersfield and Joshua Charlesworth providing for the cancellation of all of the restricted equity units (“REUs”) awarded to such executive under Insomnia’s Executive Ownership Plan in exchange for a lump-sum cash payment (the “REU Cash-Out”). In the REU Cash-Out, Mr. Tattersfield received $1.98 million for the cancellation of his 15,699 REUs and Mr. Charlesworth received $0.49 million for the cancellation of his 3,925 REUs.

Item 8.01. Other Events.

In connection with the Transaction, Insomnia as borrower entered into an Intercompany Loan Agreement with KKDC as creditor, dated July 17, 2024, in the amount of $45 million (the “Loan”). The maturity date of the Loan is the earlier of (a) 5.5 years and (b) Insomnia’s refinancing of its debt sufficient to pay the Loan in full.

Item 9.01. Financial Statements and Exhibits

The following exhibits are filed with this Current Report on Form 8-K:

			Exhibit No.						Description
			99.1						Press Release issued by Krispy Kreme, Inc. dated July 22, 2024

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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.

KRISPY KREME, INC.

Dated: July 22, 2024

By:    /s/ Joshua Charlesworth

Name:			Joshua Charlesworth
Title:			President and Chief Executive Officer

Krispy Kreme Sells Majority Ownership Stake of Insomnia Cookies $350 million enterprise valuation doubled since 2018 acquisition Charlotte, NC, July 22, 2024 – Krispy Kreme, Inc. (NASDAQ: DNUT) today announced the sale of a majority ownership stake of Insomnia Cookies to Verlinvest and Mistral Equity Partners. The transaction represents a $350 million total enterprise value, which has doubled since Krispy Kreme’s 2018 acquisition. “As we build a bigger and better Krispy Kreme, this transaction allows us to focus on our core strategy of producing, selling, and distributing fresh doughnuts daily while also further strengthening our balance sheet,” said Josh Charlesworth, Krispy Kreme President and CEO. The transaction closed on July 17, 2024. Krispy Kreme received $127.4 million for the sale and expects to receive an additional $45 million in the coming weeks following an Insomnia Cookies refinancing of intercompany debt. Krispy Kreme intends to use the proceeds to further strengthen its fresh doughnut business and expand availability, as well as pay down debt. It will remain as an approximately 34% minority shareholder in Insomnia Cookies. "Following a thorough review, we are confident that Verlinvest and Mistral are the right partners to share in the success of Insomnia Cookies given their food industry experience and long- standing track record of value creation,” Charlesworth added. “Building off of a very successful five-year partnership with Krispy Kreme, we’re thrilled to welcome Verlinvest and Mistral to this new chapter of our journey,” said Insomnia Cookies Founder Seth Berkowitz, who will continue in his role as CEO. Clément Pointillart, Verlinvest Managing Director said, “We are enthusiastic about our investment in Insomnia Cookies, an incredible brand so close to our core DNA and at a pivotal point in its growth trajectory. We’re eager to support Seth and help unlock the full potential of the business both in the US and internationally.” Andrew Heyer, Founder and CEO of Mistral Equity Partners commented, “We are excited to partner with the company through the next phase of its growth. Having known Seth since 2004, we are delighted to have the opportunity to work with him again as well as the best-in-class teams at Krispy Kreme and Verlinvest.” Krispy Kreme expects to update its full year 2024 guidance at its upcoming second quarter 2024 earnings call. Evercore and Morgan Stanley & Co. LLC acted as financial advisors in the transaction. Exhibit 99.1

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About Krispy Kreme Headquartered in Charlotte, N.C., Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Our iconic Original Glazed® doughnut is universally recognized for its hot-off-the-line, melt-in-your-mouth experience. Krispy Kreme operates in more than 35 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing Ecommerce and delivery business with more than 14,000 fresh points of access. Our purpose of touching and enhancing lives through the joy that is Krispy Kreme guides how we operate every day and is reflected in the love we have for our people, our communities, and the planet. Connect with Krispy Kreme Doughnuts at www.krispykreme.com and follow us on social: X, Instagram and Facebook. About Insomnia Cookies Insomnia Cookies is a rapidly expanding late-night bakery concept headquartered in Philadelphia, PA. Founded at the University of Pennsylvania by then-student Seth Berkowitz, Insomnia Cookies has been feeding the insatiable hunger of loyal Insomniacs since 2003. Today, with over 250 locations worldwide, Insomnia Cookies offers a wide variety of delicious cookies, ice cream, and other sweet treats in-store, for local delivery, and nationwide shipping. Details about Insomnia Cookies' menu, delivery, and nationwide shipping options can be found here (late-night delivery until 1 a.m. or later). To place an order or learn more about Insomnia Cookies, visit www.InsomniaCookies.com Keep up-to-date on the latest cookie news and grand opening deals by following Insomnia Cookies on Instagram, Facebook, X, and TikTok. About Verlinvest Verlinvest is an international, family-backed evergreen investment company. It identifies inflection points in consumer behaviors and partners with the businesses that are driving these consumer revolutions forward while having a positive impact. Established in 1995, with offices in Brussels, London, New York, Mumbai, and Singapore, Verlinvest focuses on the FMCG, health, consumer technology, and lifestyle categories, investing across three strategies: Platform, Growth, and Venture. Its portfolio includes the likes of Oatly, Tony’s Chocolonely, K1 Speed, Vita Coco, and Mutti. About Mistral Equity Partners Mistral Equity Partners is a New York City-based private equity firm that specializes in the consumer and media sectors and is especially attracted to businesses that are supported by strong demographic trends and fundamental changes in consumer preferences. Mistral invests primarily in North American companies with enterprise values between $100 million and $300 million. Mistral’s principals also have invested capital through Haymaker Acquisition Corp. and its successor SPAC entities managed by Mistral CEO Andrew Heyer and Mistral Managing Director Christopher Bradley. Mistral and Haymaker portfolio investments include or have included: Jamba Juice, Lovesac, OneSpaWorld, Biote, ARKO, Vino Volo, and Shearer’s Foods. Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements that involve risks and uncertainties. The words “continue,” “towards,” “expect,” “outlook,” “guidance,” or similar words, or the negative of these words, identify forward-looking statements. Such forward-looking statements are based

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on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended January 1, 2023, filed by us with the Securities and Exchange Commission (“SEC”) and described in the other filings we make from time to time with the SEC. We believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise. Investor Relations [e-mail] Financial Media Edelman Smithfield for Krispy Kreme, Inc. Ashley Firlan & Ashna Vasa [e-mail]

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Cover Page Document	Jul. 17, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 17, 2024
Entity Registrant Name	Krispy Kreme, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40573
Entity Tax Identification Number	37-1701311
Entity Address, Address Line One	2116 Hawkins Street
Entity Address, City or Town	Charlotte
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28203
City Area Code	800
Local Phone Number	457-4779
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	DNUT
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001857154
Amendment Flag	false

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