Playboy, Inc.

Brand-licensing turnaround narrowing losses on the Byborg LMA but still unprofitable with very high leverage.

Strengths

• 15-year Byborg LMA provides $20M/yr guaranteed royalties, lifting licensing gross profit and de-risking the capital-light pivot
• Net loss cut sharply to $12.7M from $79.4M; cash $37.8M (64th pct) and gross margin ~71% (64th pct)

Risks

• Debt/equity 9.4 (98th pct) and ROE -69% reflect a strained, near-negative equity base
• Still operating-loss-making (op margin -6.6%, 18th pct; net margin -10.5%, 17th pct) with material weaknesses in internal controls

Notable findings

• Restatement2 (the “A&R Second Amendment”) to our Amended and Restated Credit and Guaranty Agreement, dated as of May 10, 2023 (as amended on November 2, 2023, the “A&R Credit Agreement”), which provided for, amo 8-K ↗
• Auditor changeRecent 8-K item 4.01 8-K ↗
• High leverageHigh leverage (debt/equity 9.40)
• Net lossNet loss (net margin -10.5%)
• Cash burnNegative free cash flow (-1.0M)
• Material weakness• material weaknesses identified with respect to our internal controls over financial reporting; • potential impairments of our intangible assets; • potential limitations on the use of our net ope
• Chronic dilutionShare count +36%/yr over 4y (dilution, book value/share -99%)
• Exec changeRecent 8-K item 5.02 8-K ↗
• Revenue declineRevenue -13.4% YoY