Lease cost associated with operating leases for the three months ended March 31, 2026 is included in the first table below. Finance leases as of March 31, 2026, and their related cost for the three months ended March 31, 2026, were immaterial. There were no finance leases during the three months ended March 31, 2025.

On August 11, 2025, through our wholly owned subsidiary, Playboy Enterprises, Inc., we entered into a triple net lease (the “Lease”) with RK Rivani LLC, a Florida limited liability company (the “Landlord”), pursuant to which, among other matters and on the terms and subject to the conditions set forth in the Lease, we leased from the Landlord approximately 20,169 square feet of office space in Miami Beach, Florida, for a term of 11 years, following renovations of the office space. As we did not take possession of the office space as of March 31, 2026, it is not reflected in our condensed consolidated financial statements or in the tables below. We expect to account for the Lease as an operating lease under ASC Topic 842, Leases. The future undiscounted fixed non-cancelable payment obligation pertaining to the Lease is approximately $27.1 million.

In February 2026, we entered into an early termination of an operating lease prior to its contractual expiration date for a Honey Birdette retail store. In connection with the termination, we received a $0.5 million lease termination fee as consideration for vacating the space early. Upon lease termination, we wrote off the remaining right-of-use asset and the corresponding operating lease liability associated with the lease and recorded $0.5 million in Other income, net in our condensed consolidated statements of operations for the three months ended March 31, 2026.

As of March 31, 2026 and December 31, 2025, the weighted-average remaining term of our operating leases was 3.8 years and 3.9 years, respectively, and the weighted-average discount rate used to estimate the net present value of the operating lease liabilities was 8.3% and 8.2%, respectively. Cash payments for amounts included in the measurement of operating lease liabilities were $2.3 million and $2.0 million for the three months ended March 31, 2026 and 2025, respectively. Right-of-use assets obtained in exchange for new operating lease liabilities were $0.2 million for the three months ended March 31, 2026. There were no right-of-use assets obtained in exchange for new operating lease liabilities for the three months ended March 31, 2025.


Remainder of 2026	$	6,585
2027	6,346
2028	3,915
2029	3,253
2030	1,908
Thereafter	1,989
Total undiscounted lease payments	23,996
Less: imputed interest	(3,521)
Total operating lease liabilities	$	20,475

Operating lease liabilities, current portion	$	7,264
Operating lease liabilities, noncurrent portion	$	13,211

From time to time, we may have certain contingent liabilities that arise in the ordinary course of our business activities. We accrue a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount.

In March 2020, our subsidiary Playboy Enterprises International, Inc. (together with its subsidiaries, “PEII”) terminated its license agreement with a licensee, AVS Products, LLC (“AVS”), for AVS’s failure to make required payments to PEII under the agreement, following notice of breach and an opportunity to cure. On February 6, 2021, PEII received a letter from counsel to AVS alleging that the termination of the contract was improper, and that PEII failed to meet its contractual obligations, preventing AVS from fulfilling its obligations under the license agreement.

On February 25, 2021, PEII brought suit against AVS in Los Angeles Superior Court to prevent further unauthorized sales of Playboy-branded products and for disgorgement of unlawfully obtained funds. On March 1, 2021, PEII also brought a claim in arbitration against AVS for outstanding and unpaid license fees. PEII and AVS subsequently agreed that the claims PEII brought in arbitration would be alleged in the Los Angeles Superior Court case instead, and on April 23, 2021, the parties entered into and filed a stipulation to that effect with the court. On May 18, 2021, AVS filed a demurrer, asking for the court to remove an individual defendant and dismiss PEII’s request for a permanent injunction. On June 10, 2021, the court denied AVS’s demurrer. AVS filed an opposition to PEII’s motion for a preliminary injunction to enjoin AVS from continuing to sell or market Playboy-branded products on July 2, 2021, which the court denied on July 28, 2021.

On August 10, 2021, AVS filed a cross-complaint for breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit and declaratory relief. As in its February 2021 letter, AVS alleges its license was wrongfully terminated and that PEII failed to approve AVS’ marketing efforts in a manner that was either timely or that was commensurate with industry practice. AVS is seeking to be excused from having to perform its obligations as a licensee, payment of the value for services rendered by AVS to PEII outside of the license, and damages to be proven at trial. The court heard PEII’s motion for summary judgment on June 6, 2023, and dismissed six out of 10 of AVS’ causes of action. AVS’ contract-related claims remain to be determined at trial, which is scheduled for August 10, 2026. In addition, PEII filed a complaint against Sunrise Brands based on their participation in AVS’s misconduct, as well as their own direct misconduct. Both cases have been related together by the court and will be tried together, for both pretrial and trial purposes. We believe AVS’ remaining claims and allegations are without merit, and we will defend this matter vigorously.