Funko, Inc. (NASDAQ:FNKO), a leading pop culture consumer products company, announced today that it has reached a preliminary settlement in several derivative lawsuits. The U.S. District Court for the Central District of California granted preliminary approval of the settlement on July 26, 2024.
The derivative lawsuits, including Smith v. Mariotti, In re Funko, Inc. Derivative Litigation, and Fletcher v. Mariotti, were filed against certain current and former directors and officers of the company. The suits alleged various breaches of fiduciary duties, abuse of control, gross mismanagement, waste of corporate assets, and unjust enrichment.
According to the SEC filing, the details of the proposed settlement are outlined in the Notice of Pendency Proposed Settlement of Derivative Matters and the Stipulation and Agreement of Settlement, which are attached to the filing as Exhibits 99.1 and 99.2, respectively. However, the contents of this report, including the attached exhibits, are not considered filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor are they incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as explicitly stated in such filings.
Funko's legal officer and secretary, Tracy D. Daw, signed the report filed on August 2, 2024. The settlement is subject to court approval, and the company will provide further details as required by the court's order.
Investors and stakeholders in Funko, Inc. can expect the company to disclose additional information regarding the terms of the settlement and any impact it may have on the company's governance and financial position. The settlement aims to resolve the disputes raised in the lawsuits and avoid the expense and distraction of continued litigation.
This report is based on a press release statement and provides an update on the legal proceedings involving Funko, Inc. without speculating on broader industry impacts or trends.
In other recent news, Funko has been in the spotlight with a series of significant developments. The company reported robust Q1 net sales of $216 million and an adjusted EBITDA of $10 million, maintaining their 2024 financial outlook with expected net sales between $1.047 billion and $1.103 billion, and an adjusted EBITDA between $65 million and $85 million.
In addition to financial performance, leadership changes have also been announced, with Cynthia Williams stepping in as the new CEO. Analyst firms DA Davidson and B.Riley have reacted positively to these developments, with both firms raising their price targets for Funko shares, citing confidence in Williams' ability to drive growth and profitability for the company.
Furthermore, Funko has announced the release date for its new video game, Funko Fusion, which is expected to contribute to the company's future performance. These are among the recent developments that are shaping the trajectory of Funko.
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