v3.26.1
Subsequent Events
6 Months Ended
Jun. 30, 2026
Subsequent Events [Abstract]  
Subsequent Events [Text Block] Subsequent events
2026 Notes
On July 9, 2026, the Company closed the sale of the 2026 Notes and the 2026 Warrants contemplated by the Woodman Purchase Agreement, dated as of July 1, 2026, by and among the Company and certain entities (the Buyers) affiliated with Nicholas Woodman, the Company’s Chief Executive Officer and Chairman of the Board of Directors. In connection with the closing, (i) the Company received $19.9 million in net proceeds in exchange for issuing the 2026 Notes in an aggregate principal amount of $20.0 million to the Buyers and (ii) the Company issued the 2026 Warrants exercisable for 25,706,940 shares of the Company's Class B common stock, par value $0.0001 per share. The 2026 Notes mature on July 21, 2028 and have an interest rate of 6.50% per annum, subject to adjustment after the occurrence and during the continuance of any event of default, which is payable semi-annually in kind through an increase to the principal amount of the 2026 Notes. The Company may redeem the 2026 Notes at its option in whole or in part at any time at a price in cash equal to the principal amount being redeemed plus accrued and unpaid interest to the redemption date (the Redemption Price). In addition, the Company is required to redeem the 2026 Notes at the Redemption Price upon the occurrence of certain events, including (i) the repayment in full of all amounts outstanding under the 2025 Credit Agreement, (ii) the receipt by the Company of cash proceeds from dispositions of property sufficient to repay in full and terminate the 2021 Credit Agreement, the 2025 Credit Agreement and the 2026 Notes, (iii) if an event of default occurs, upon the request of the holder, and (iv) certain bankruptcy and change of control events.
The 2026 Notes contain customary affirmative covenants of the Company and customary events of default that include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, failure to perform certain covenants, cross default to the 2021 Credit Agreement and 2025 Credit Agreement, bankruptcy and insolvency events, certain judgments, and certain material ERISA events. The occurrence of an event of default could result in the acceleration of the obligations under the 2026 Notes and the Company’s other indebtedness. The Company’s obligations under the 2026 Notes are secured by a third lien security interest in substantially all the assets of the Company, pursuant to a security agreement and an intercreditor agreement with Wells Fargo Bank, N.A., Farallon Capital Management, L.L.C. and the Buyers.
The exercise price of the 2026 Warrants is $0.7780 per share. The 2026 Warrants are exercisable at any time on or after the earlier of (i) the six month anniversary of the closing and (ii) either (x) the Company’s first public announcement of a change of control or (y) the Company’s first public announcement of the signing of a definitive agreement for a transaction which, if consummated, would result in a change of control. The 2026 Warrants will expire on July 9, 2029 and are subject to customary adjustments for certain transactions affecting the Company’s capitalization.
Pursuant to the terms of the 2026 Warrants, in the event of a fundamental transaction, the successor entity will succeed to, and be substituted for the Company, and may exercise every right and power that the Company may exercise and will assume all of its obligations under the 2026 Warrants with the same effect as if such successor entity had been named in the 2026 Warrant itself. If holders of Class B Common Stock are given a choice as to the securities, cash or property to be received in a fundamental transaction, then a holder of the 2026 Warrants will be given the same choice as to the consideration it receives upon any exercise of the 2026 Warrants following such fundamental transaction. Notwithstanding the foregoing, in the event of a fundamental transaction, the holders of the 2026 Warrants will have the right to require the Company or a successor entity to purchase the 2026 Warrant for cash in the amount of the Black-Scholes value of the unexercised portion of the 2026 Warrants concurrently with or within 30 days following the consummation of a fundamental transaction.
As of the issuance of these financial statements, management has not yet completed its evaluation of the financial statement impact of the Woodman Purchase Agreement and is unable to reasonably estimate the financial statement effect. The Company anticipates the 2026 Notes to be classified as a current liability.
On July 9, 2026, the Company amended the 2021 Credit Agreement and 2025 Credit Agreement to permit the transactions contemplated by the Woodman Purchase Agreement, as referenced in Note 4 Financing arrangements.
Nasdaq Minimum Bid Price Notification
On July 21, 2026, the Company received a notice from the Nasdaq Stock Market LLC indicating the Company was not in compliance with Nasdaq’s Listing Rule 5450(a)(1), as the minimum bid price of the Company’s Class A common stock has been below $1.00 per share for 30 consecutive business days. The Company has 180 calendar days to regain compliance by maintaining a minimum bid price of at least $1.00 for a minimum of 10 consecutive business days during this 180 calendar day grace period.
If compliance is not achieved by the deadline, the Company may be eligible for an additional 180-day grace period, provided it meets other listing requirements and signals its intent to cure the deficiency, potentially through a reverse stock split. Failure to regain compliance or qualify for an extension will result in a delisting notification, which the Company may appeal. The notice currently has no immediate impact on the listing or trading of the Company’s common stock.
Share Conversion
On August 3, 2026 and August 4, 2026, the Company issued 1,185,888 and 1,467,783 shares, respectively, of the Company’s Class A common stock due to the exercise of the conversion option by YA II PN for a principal amount of $0.8 million and $1.0 million, respectively, of the Convertible Debentures.