21anticipated to result from such transactions.

Further, dispositions and strategic transactions may distract our management’s time and attention and disrupt our ongoing business operations or relationships with customers, employees, suppliers or other parties. We continue to evaluate the potential disposition of assets and businesses that may no longer help us achieve our strategic objectives, and to view strategic transactions as a key part of our growth strategy.

If we decide to sell assets or a business, we may encounter difficulty in finding attractive terms or buyers or executing alternative exit strategies on acceptable terms in a timely manner, which could delay the accomplishment of our strategic objectives. Alternatively, we may dispose of a business at a price or on terms that are less than we had anticipated, or with the exclusion of select assets. Dispositions may also involve continued financial involvement in a divested business, such as through continuing equity ownership, transition service agreements, guarantees, indemnities or other current or contingent financial obligations. Under these arrangements, performance by the acquired or divested business, or other conditions outside our control, could affect our future financial results.

We may not realize all of the anticipated benefits of our ~~acquisitions~~strategic opportunities or corporate transactions or those benefits may take longer to realize than expected.

Our ability to realize ~~the~~ anticipated benefits of our ~~acquisitions~~strategic opportunities and corporate transactions depends, to a large extent, on our ability to implement changes ~~to acquired businesses in a manner~~ that ~~facilitates growth~~facilitate such opportunities and ~~realizes~~realize anticipated ~~synergies. We will be required to devote significant management attention, resources~~streamlining and ~~costs to realigning the business practices and operations of acquired businesses to our brand management model.~~synergies. We generally expect to benefit from streamlining, through reduced costs or outsourcing of responsibilities to third parties, and operational synergies from ~~our acquisitions resulting from the~~ consolidation of capabilities and ~~elimination of redundancies, as well as~~ greater efficiencies from increased scale and market integration. However, this process may preclude or impede realization of the benefits expected from ~~acquisitions~~strategic opportunities or corporate transactions and ~~could adversely affect current revenues and investments in future growth, which~~ could adversely affect our results of operations. We cannot be certain that we will not be required to implement further realignment activities, make additions or other changes to our workforce based on other cost reduction measures or changes in the markets and industry in which we compete. In addition, future business conditions and events may impact our ability to continue to realize any benefits of these initiatives. If we are not able to successfully achieve these objectives, the anticipated benefits of our ~~acquisitions~~transactions may not be realized fully or at all or may take longer to realize than expected.

Any future ~~acquisition~~strategic opportunities or corporate transactions may not be accretive, and may be dilutive, to our earnings per share, which may negatively affect the market price of our common stock.

Future ~~acquisitions~~strategic opportunities or corporate transactions may not be accretive to our earnings per share. Our expectations regarding the timeframe in which ~~a potential acquisition~~such transactions may become accretive to our earnings per share may not be realized. In addition, we could fail to realize all of the benefits anticipated in ~~a potential acquisition~~such transactions or experience delays or inefficiencies in realizing such benefits. Such factors could, combined with the potential issuance of shares of our common stock in connection with ~~a potential acquisition,~~any such transactions, result in ~~such acquisition~~them being dilutive to our earnings per share, which could negatively affect the market price of our common stock.

Our senior secured credit agreement contains various covenants, restrictions and required financial ratios and tests that limit our operating flexibility. The ~~terms~~violation of one or more of these covenants, ratios or tests could have a material adverse effect on our ~~credit facility impose restrictions on us that may affect our ability to successfully operate our business.~~business, financial condition and operating results.

Our senior secured credit ~~facility~~agreement contains covenants that limit our actions. These covenants could materially and adversely affect our ability to finance our future operations or capital needs or to engage in other business activities that may be in our best interests. The covenants restrict our ability to, among other things:

•incur or guarantee additional indebtedness;

•make loans and investments;

•enter into agreements restricting our subsidiaries’ abilities to pay dividends;

•create liens;

•sell or otherwise dispose of assets;

•enter new lines of business;

•merge or consolidate with other entities; and

•engage in transactions with affiliates.

The senior secured credit ~~facility~~agreement, as amended to date, also contains financial covenants requiring us to maintain a specified maximum total ~~gross~~net leverage ~~ratio.~~ratio covenant beginning with the second quarter of 2026 and to maintain a minimum balance of cash and cash equivalents. See Note 22, Subsequent Events, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. for further details.

~~Our~~The covenants in our senior secured credit agreement place significant restrictions on the manner in which we may operate our business, and our ability to ~~comply with~~meet these covenants ~~and requirements~~ may be affected by events beyond our control, such as prevailing economic conditions and changes in regulations, and if such events occur, we cannot be sure that we will be able to comply.

In addition, we are required to assess our ability to continue as a going concern as part of our preparation of financial statements at each quarter-end. This assessment includes, among other things, our ability to comply with the covenants and requirements under our senior secured credit agreement. If in future periods we are not able to demonstrate that we will be in compliance with the financial covenant requirements in our credit agreement for at least 12 months following the date of the financial statements, management could conclude there is substantial doubt about our ability to continue as a going concern, and the audit opinion that we would receive from our independent registered public accounting firm would include an explanatory paragraph regarding our ability to continue as a going concern. Such an opinion could cause us to be in breach of the covenants in our senior secured credit agreement and other of our agreements.

22If we fail to satisfy any of the foregoing covenants, the lenders could declare the outstanding principal amount of our loans under our senior secured credit agreement, including accrued and unpaid interest and all other amounts owing and payable thereunder, to be immediately due and payable, which could have a material adverse effect on our business, financial condition and operating results.

If we do not adequately adopt and manage our reporting and enterprise systems and processes, our ability to manage and grow our business may be ~~harmed.~~adversely impacted.

We are in the process of adopting and implementing new systems and processes across our businesses, which will allow us to execute our business plan and comply with regulations. We will need to continue to improve existing and implement new operational and financial systems, procedures and controls to manage our business effectively in the future. As a result, we have licensed new enterprise systems and have begun a process to expand and upgrade our operational and financial systems. If the systems we have chosen do not fit our business appropriately or if there are material delays in the implementation of, or disruption in the transition to, our new or enhanced systems, procedures or internal controls, our ability to realize the benefits and value of the systems as anticipated, operate our business as intended, achieve accuracy in the conversion of electronic data and records, and/or report financial and management information, could be adversely affected. As a result of the conversion from prior systems and processes, data integrity problems may be discovered that if not corrected could impact our business or financial results. In addition, as we add functionality to the enterprise systems and complete implementations across our businesses, new issues could arise that we have not foreseen. Such issues could adversely affect our ability to do, among other things, the following in a timely manner: provide quotes; take customer orders; ship products; provide services and support to our customers; bill and track our customers; fulfill contractual obligations; and otherwise run our business. Failure to properly or adequately address these issues could result in the diversion of management’s attention and resources, impact our ability to manage our business and negatively impact our results of operations, cash flows and stock price.

A variety of uncontrollable events may reduce demand for our products, impair our ability to provide our products or increase the cost of providing our products.

Demand for our products can be significantly adversely affected in the U.S., globally or in specific regions as a result of a variety of factors beyond our control, including: adverse weather conditions arising from short-term weather patterns or long-term change, catastrophic events or natural disasters (such as excessive heat or rain, hurricanes, typhoons, floods, tsunamis and earthquakes); health concerns, such as pandemics; international, political or military ~~developments;~~developments, including wars and other armed conflicts; and terrorist attacks. These events and others, such as fluctuations in travel and energy costs and ~~computer virus attacks,~~cyberattacks, intrusions or other widespread computing or telecommunications failures, may also damage our ability to provide our products or to obtain insurance coverage with respect to these events. An incident that affected our property directly would have a direct impact on our ability to provide products and content. Moreover, the costs of protecting against such incidents ~~reduces~~reduce the profitability of our operations.

In addition, we derive affiliate fees and royalties from the distribution of our programming, sales of our licensed goods and services by third parties, and the management of businesses operated under brands licensed from us, and we are therefore dependent on the ~~successes~~success of those third parties for that portion of our revenue. A wide variety of factors could influence the success of those third parties and if negative factors significantly impacted a sufficient number of those third parties, the profitability of one or more of our businesses could be adversely affected.

We obtain insurance against the risk of losses relating to some of these events, generally including physical damage to our property and resulting business interruption, certain injuries occurring on our property and some liabilities for alleged breach of legal responsibilities. When insurance is obtained it is subject to deductibles, exclusions, terms, conditions and limits of liability. The types and levels of coverage we obtain vary from time to time depending on our view of the likelihood of specific types and levels of loss in relation to the cost of obtaining coverage for such types and levels of loss and we may experience material losses not covered by our insurance.

~~Our financial condition and results of operations have been and are expected to continue to be adversely affected by the coronavirus pandemic.~~

A novel strain of coronavirus (“COVID-19”) was first identified in China in December 2019, and was subsequently declared a pandemic by the World Health Organization. To date, this pandemic and preventative measures taken to contain or mitigate the pandemic have caused, and are expected to continue to cause, business slowdowns or shutdowns in affected areas and significant disruption in the financial markets, both globally and in the United States. These events have led to and could continue to lead to a decline in discretionary spending by consumers, and in turn materially impact, our business, sales, financial condition and results of operations. We may experience a negative impact on our sales, operations and financial results, and we cannot predict the degree to, or the time period over, which our sales, operations and financial results will continue to be subject to risk by the pandemic and preventative measures. Risks presented by the COVID-19 pandemic include, but are not limited to:

•~~Deterioration in economic conditions in the United States and globally, including China and Australia;~~

•Reduced consumer demand for our products as consumers seek to reduce or delay discretionary spending in response to the impacts of COVID-19, including as a result of a rise in unemployment rates and diminished consumer confidence;

•~~Decreased retail traffic as a result of store closures, reduced operating hours, social distancing restrictions and/or changes in consumer behavior;~~

•~~Disruption of our ability to complete or find new licensing deals and commercial collaborations;~~

•The risk that any safety protocols in our facilities will not be effective or not be perceived as effective, or that any virus-related illnesses will be linked or alleged to be linked to such facilities, whether accurate or not;

•Incremental costs resulting from the adoption of preventative measures, including providing facial coverings and hand sanitizer, rearranging operations to follow social distancing protocols, conducting temperature checks and undertaking regular and thorough disinfecting of surfaces;

•Inventory shortages caused by a combination of increased demand for our products and longer lead-times in the manufacturing and delivery of our products, due to work restrictions related to COVID-19, import/export conditions such as port congestion, and local government orders;

•Disruption to our distribution centers and our third-party manufacturing partners and other vendors, including through the effects of facility closures, reductions in operating hours, labor shortages, and real time changes in operating procedures, including for additional cleaning and disinfection procedures;

•Bankruptcies or other financial difficulties facing our wholesale customers or licensing partners, which could cause them to be unable to make or delay making payments to us, or result in cancellation or reduction of their orders or licensing agreements;

•~~Operational risk, including but not limited to cybersecurity risks, as a result of extended workforce remote work arrangements, and restrictions on employee travel;~~

•Impacts to our distribution and logistics providers’ ability to operate or increases in their operating costs. These supply chain effects may have an adverse effect on our ability to meet consumer demand, including digital demand, and could result in an increase in our costs of production and distribution, including increased freight and logistics costs and other expenses;

•Disruption to our operations if a large number of our employees and/or a subset of our key employees and executives are impacted by COVID-19, which could negatively impact our ability to continue to operate effectively; and

•~~Significant disruption of and volatility in global financial markets, which could have a negative impact on our ability to access capital in the future.~~

We continue to monitor the latest developments regarding the pandemic and have made certain assumptions regarding the pandemic for purposes of our operating, financial and tax planning projections, including assumptions regarding the duration and severity of the pandemic and the global macroeconomic impacts of the pandemic. However, we are unable to accurately predict the extent of the impact of the pandemic on our business, operations and financial condition due to the uncertainty of future developments. In particular, we believe the ultimate impacts on our business, results of operations, cash flows and financial condition will depend on, among other things, the further spread and duration of COVID-19, third party or governmental actions taken to contain its spread and mitigate its public health effects the requirements to take action to help limit the spread of the illness, the availability, safety and efficacy of vaccines and treatments for COVID-19 and the economic impacts of the pandemic. Even in those regions where our businesses recover, should those regions fail to fully contain COVID-19 or suffer a COVID-19 relapse, those markets may not recover as quickly or at all, which could have a material adverse effect on our business and results of operations. The pandemic may also affect our business, operations or financial condition in a manner that is not presently known to us or that we currently do not consider to present significant risks.

~~In addition, the impact of COVID-19 may also exacerbate other risks discussed in this “Risk Factors” section, which could have a material effect on us.~~

Global economic conditions could have a material adverse effect on our business, operating results and financial condition.

The uncertain state of the global economy continues to impact businesses around the world. If global economic and financial market conditions further deteriorate or do not improve, the following factors could have a material adverse effect on our business, operating results and financial condition:

•Our sales are impacted by discretionary spending by consumers. Declines in consumer spending may result in reduced demand for our products, increased inventories, reduced orders from retailers for our products, order cancellations, lower revenues, higher discounts and lower gross margins.

•In the future, we may be unable to access financing in the credit and capital markets at reasonable rates in the event we find it desirable to do so.

•We conduct transactions in various currencies, which creates exposure to fluctuations in foreign currency exchange rates relative to the U.S. Dollar. Continued volatility in the markets and exchange rates for foreign currencies and contracts in foreign currencies could have a significant impact on our reported operating results and financial condition.

•As a result, we cannot ensure that demand for our offerings will remain constant. Adverse developments affecting economies throughout the world, including a general tightening of the availability of credit, decreased liquidity in certain financial markets, increased interest rates, foreign exchange fluctuations, increased energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could lead to a further reduction in discretionary spending.

•Continued volatility in the availability and prices for commodities and raw materials we use in our products and in our supply chain (such as cotton or petroleum derivatives) could have a material adverse effect on our costs, gross margins and profitability.

•If retailers of our licensed products experience declining revenues or experience difficulty obtaining financing in the capital and credit markets to purchase our products, this could result in ~~reduced orders for our products, order cancellations,~~ late ~~retailer~~licensee payments, extended payment terms, higher accounts receivable, reduced cash flows, greater expense associated with collection efforts and increased bad debt expense.

•If licensees or retailers of our products experience severe financial difficulty, ~~some may become~~including becoming insolvent ~~and cease~~or ceasing business operations, ~~which~~this could negatively impact the sale of our products to ~~consumers.~~consumers and the ability of such licensees or retailers to make required payments to us.

•Our business is particularly sensitive to reductions from time to time in discretionary consumer spending. Demand for entertainment and leisure activities can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce our users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, including lifestyle experiences such as casino gaming, and lower spending on sexual wellness, apparel or beauty products. As a result, we cannot ensure that demand for our offerings will remain constant.

If contract manufacturers of our products or other participants in our supply chain experience difficulty obtaining financing in the capital and credit markets to purchase raw materials or to finance capital equipment and other general working capital needs, it may result in delays or non-delivery of shipments of our products.

~~In particular, since we derived in 2020 and 2021,~~We derive, and expect to continue to derive, a significant portion of our revenue from ~~China,~~outside the United States, and our business development plans, results of operations and financial condition may be materially adversely affected by significant international political, social and economic ~~developments in China. A slowdown in~~instability. Continued economic ~~growth~~challenges in China, ~~such as due to~~or between the ~~outbreak of the COVID-19 pandemic,~~U.S. and China, could adversely impact our licensees in China, prospective customers, suppliers, distributors and partners of our licensees in China, which could have a material adverse effect on our results of operations and financial condition. In addition, a deterioration in trade relations between the U.S. and China or other countries, or the negative perception of U.S. brands by Chinese or other international consumers, could have a material adverse effect on our results of operations and financial condition. There is no guarantee that economic downturns, any further decrease in economic growth rates or an otherwise uncertain economic outlook ~~in China~~for the global economy will not persist in the future, that they will not be protracted or that governments will respond adequately to control and reverse such conditions, any of which could materially and adversely affect our business, financial condition and results of operations.

We have a material amount of goodwill and other intangible assets, including our trademarks and right-of-use assets, recorded on our balance sheet. As a result of changes in market conditions and declines in the estimated fair value of these assets, we have in the past, and we may in the future, be required to further write down a portion of this goodwill and other intangible assets and such write-down could, as applicable, have a material effect on our financial results.

Under current GAAP accounting standards, goodwill and indefinite life intangible assets, including some of our trademarks, are not amortized, but instead are subject to impairment evaluation based on related estimated fair values, with such testing to be done at least annually.

During the third quarter of 2022, as a result of impacts to our revenue attributable to macroeconomic factors, we recorded non-cash asset impairment charges related to the write-down of goodwill of $117.4 million, excluding $16.4 million of impairment charges related to discontinued operations, and related to trademarks and other intangible assets of $161.8 million, excluding $8.3 million of impairment charges related to discontinued operations. As of December 31, 2022, goodwill was $123.2 million, or approximately 22% of our total consolidated assets, and trademarks and other intangible assets represented approximately $236.1 million, or approximately 43% of our total consolidated assets.

During the second quarter of 2023, due to further impacts to our revenue, including declines in consumer demand and discontinued operations, we recorded non-cash asset impairment charges related to the write-down of goodwill of $66.7 million, indefinite-lived trademarks of $65.5 million, and trade names of $5.1 million.

During the fourth quarter of 2023, due to the aforementioned factors, we recorded $5.8 million of additional non-cash impairment charges related to our trademarks and $2.3 million of impairment charges related to certain Honey Birdette right-of-use assets and related leasehold improvements. As of December 31, 2023, goodwill was $54.9 million, or approximately 16%, of our total consolidated assets, trademarks and other intangible assets were $157.9 million, or approximately 47%, of our total consolidated assets, and right-of-use assets were $25.3 million, or approximately 8%, of our total consolidated assets.

There can be no assurance that any future downturn in the business of any of our segments, or a continued decrease in our market capitalization, will not result in a further write-down of goodwill or other intangibles. We will review our goodwill, trademarks, right-of-use assets, digital assets and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any write-down of intangible assets resulting from future periodic evaluations could, as applicable, have a material effect on our financial results.

Additional Risks Related to Our Licensing and Direct-to-Consumer Businesses

We utilize various licensing and selling models in our operations, and our success is dependent on our ability to manage these different models.

In addition to the licensing model, we operate online and brick-and-mortar retail stores and we produce and sell directly to customers. Although we believe these various models could have certain benefits, these models could themselves be unsuccessful and our beliefs could turn out to be wrong. Moreover, our pursuit of these different models could divert management’s attention and other resources, including time and capital. As a result, our future success depends in part on our ability to successfully manage these multiple models. If we are unable to do so, our performance, financial condition and prospects could be ~~materially harmed.~~

adversely impacted.

Risks that impact our business as a whole may also impact the success of our direct-to-consumer, or DTC, business.

We may not successfully execute on our DTC strategy (which includes our online and brick-and-mortar retail platforms). Consumers may not be willing to pay for an expanding set of DTC products, potentially exacerbated by an economic downturn. Government ~~regulation,~~regulations, including revised foreign content and ownership regulations, may impact the implementation of our DTC business plans. Poor quality ~~broadband~~internet or transportation infrastructure in certain markets may impact our customers’ access to our DTC products and may diminish our customers’ experience with our DTC products. These and other risks may impact the profitability and success of our DTC businesses.

The agency relationship for our consumer brands licensing business may not ultimately be successful.

We currently engage an agency to act as our products licensing agent in most countries. In the event we need to engage a new agency to act as our products licensing agent, the transition from the current licensing agent to a new products licensing agent may be subject to delays, as the new agent may lack institutional knowledge of our consumer brand licensing business, and there may be unanticipated issues arising from the new relationship and the transition. The failure of our agent to find or maintain revenue-enhancing licensing opportunities for the business could have an adverse impact on the revenue and cash flows of our consumer business.

Our growth will depend on our ability to attract and retain customers and subscribers, and the loss of customers or subscribers, failure to attract new customers and subscribers in a cost-effective manner, or failure to effectively manage our growth could adversely affect our business, financial condition, results of operations and prospects.

Our ability to achieve growth in revenue in the future will depend, in large part, upon our ability to attract new customers and subscribers to our offerings, retain existing customers and subscribers of our offerings and reactivate customers and subscribers in a cost-effective manner. Achieving such growth may require us to increasingly engage in sophisticated and costly sales and marketing efforts, some or all of which may not provide a material return on investment. We have used and expect to continue to use a variety of free and paid marketing channels, in combination with compelling offers and opportunities to achieve our objectives. For paid marketing, we intend to leverage a broad array of advertising channels, including billboards, radio, social media platforms, ~~planes,~~ affiliates and paid and organic search, and other digital channels, such as search and mobile display. If the search engines and other digital platforms on which we rely modify their algorithms, change their terms, including with respect to cookies, data and/or privacy controls, or if the prices at which we use such services increase, then our costs could increase, and fewer customers and subscribers may reach our use our platforms. If links to our platforms are not displayed prominently in online search results or on social media, if fewer customers or subscribers click through to our platforms, if our other marketing campaigns are not effective, or if the costs of attracting customers and subscribers using any of our current methods significantly increase, then our ability to efficiently attract new customers and subscribers could be reduced, our revenue could decline and our business, financial condition and results of operations could be ~~harmed.~~adversely impacted.

Additionally, as technological or regulatory standards change and we modify our offerings to comply with those standards, we may need customers and subscribers to take certain actions to continue accessing our platforms, such as performing age verification checks or accepting new terms and conditions. Customers and subscribers may be deterred from using our offerings at any time, including if the quality of their experience, including our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the customer experience generally offered by competitive offerings.

~~A new agency relationship for~~

If we are unable to predict or effectively react to changes in consumer demand or shopping patterns, our sales may decline and we may write-down inventory.

Our success depends in part on our ability to anticipate and respond in a timely manner to changing consumer ~~brands licensing business may not ultimately~~demand, preferences, and shopping patterns, which cannot be ~~successful.~~

We currently engage an agency to act as our global products licensing agent. In the event we need to engage a new agency to act as our global products licensing agent, the transition from the current licensing agent to a new global products licensing agent may bepredicted with certainty and are subject to ~~delays, as the new global agent may lack institutional knowledge of our~~continual change and evolution. If we are unable to provide retail and digital experiences that align with consumer ~~brand licensing business,~~expectations and ~~there may be unanticipated issues arising from the new relationship and the transition. The failure of our global agent to find or maintain revenue-enhancing licensing opportunities for the business~~preferences, it could have an adverse impact on our revenues, business and results of operations.

We often make advance commitments to purchase products, which may make it more difficult for us to adapt to rapidly-evolving changes in consumer preferences. Our sales could decline significantly if we misjudge the ~~revenue~~market for our new merchandise, which may result in significant merchandise markdowns and ~~cash flows~~lower margins, missed opportunities for other products, or inventory write-downs, and could have a negative impact on our reputation, profitability and demand. Failure to meet stockholder expectations, particularly with respect to earnings, sales, and operating margins, could also result in volatility in the market value of our stock.

We record a charge for product inventories that have become obsolete or exceed anticipated demand, or for which cost exceeds net realizable value. If we determine that an impairment has occurred, we record a write-down by the amount for which costs exceed net realizable value. No assurance can be given that we will not incur write-downs, fees, impairments and other charges given the rapid and unpredictable pace of product obsolescence in the direct-to-consumer markets in which we compete. For the twelve-month period ended December 31, 2023, we recorded non-cash inventory reserve charges of $6.9 million.

Our business depends on consumer ~~business.~~purchases of discretionary goods and content, which can be negatively impacted during an economic downturn or periods of inflation. This could materially impact our sales, profitability and financial condition.

Our products and content may be considered discretionary items for consumers. Many factors impact discretionary spending, including general economic conditions, unemployment, the availability of consumer credit and inflationary pressures and consumer confidence in future economic conditions. Global economic conditions may continue to be uncertain, particularly in light of the impacts of the slowdown of the Chinese economy, ongoing international armed conflicts and geopolitical tensions, and the potential impacts of sustained inflationary pressure in the United States (our largest market) remain unknown, making trends in consumer discretionary spending unpredictable. Historically, consumer purchases of discretionary items tend to decline during recessionary periods when disposable income is lower or during other periods of economic instability or uncertainty, which may lead to declines in sales and slow our long-term growth expectations. Any near or long-term economic disruptions in markets where we sell our products and content, particularly in the United States, Australia, China or other key markets, may adversely impact our sales, profitability and financial condition and our prospects for growth. In addition, as pandemic conditions improve and restrictions ease, we are unable to predict whether consumer preferences for discretionary items will shift and the level of consumer spending within our industry will be negatively impacted for a period of time. If this were to occur, our sales and prospects for growth may be negatively impacted.

A substantial portion of our licensing revenue is concentrated with a limited number of licensees and retail partners, such that the loss of a licensee or retail partner has decreased, and could continue to materially decrease, our revenue and cash flows.

Our licensing revenues are concentrated with a limited number of licensees and retail partners. For instance, during the years ended December 31, ~~2021~~2023 and ~~2020,~~2022, the five largest license agreements comprised ~~20%~~21% and ~~32%~~25%, respectively, of our consolidated ~~revenues, respectively,~~revenues. In 2023 and ~~the~~2022, our largest licensee, which was terminated in October 2023, contributed 9%16% and ~~15%~~12%, respectively, of our consolidated ~~revenues, respectively, during those years.~~revenues. The changes from 2022 to 2023 were driven by GAAP-required revenue recognition related to terminated licenses. In October 2023, we terminated licensing agreements with certain Chinese licensees due to ongoing, uncured breaches of their licenses, which had comprised $152.2 million of unrecognized licensing revenue over the remaining terms of such long-term contracts as of the termination date, and resulted in a decrease in licensing revenue of $16.6 million in 2023. Because we are dependent on these licensees for a significant portion of our licensing revenue, if any of ~~these~~our material licensees ~~were to~~ have financial difficulties affecting their ability to make payments, cease operations, or if any ~~of these~~such licensees ~~decides~~do not to renew or extend any existing agreements, or to significantly reduce ~~its~~their sales of licensed products under any agreement, we were, and could continue to be, required to adjust how we account for revenue pursuant to such licenses, and our revenue and cash flows were, and could continue to be, reduced substantially, which has had, and could continue to have, a material adverse ~~effect~~impact on our financial condition, results of operations orand business.

Our ~~wholesale~~ licensing arrangements subject us to a number of risks.

We have entered into several arrangements in connection with our licensing strategy. Although we believe our licensing arrangements may have certain benefits, these arrangements are subject to a number of risks and our beliefs could turn out to be wrong. If any of these risks occur and we do not achieve the intended or expected benefits of our licensing strategy, our results of operations, and financial condition could be materially adversely affected.

The terms of our licensing arrangements vary. These different terms could have a material impact on our performance. These effects on our performance could become increasingly significant in future periods, to the extent our new licensees gain traction over time with new retailers and consumer bases and the proportion of our royalty revenues from these licensees increases, or if we pursue similar arrangements in the future.

Additionally, in licensing arrangements, we have limited ability to control various aspects of the manufacturing process, including access to raw materials, the timing of delivery of finished products, the quality of finished products and manufacturing costs. Our licensees may not be able to produce finished products of the quality or in the quantities that are sufficient to meet retailer and consumer demand in a timely manner or at all, which could result in an inability to generate revenues from any such products and loss of confidence in our brands. Interruptions or delays in the manufacturing process can occur at any time and for a variety of reasons, many of which are outside our control, including, among others, unforecasted spikes in demand, shortages of raw materials, labor disputes, backlogs, insufficient devotion of resources to the manufacture of products bearing our brands, or problems that may arise with manufacturing operations or facilities or our licensees’ businesses generally. On the other hand, our licensees may produce inventory in excess of retailer and consumer demand, in which case over-supply may cause retail prices of products bearing our brands to decline. Further, we compete with other brand owners for the time and resources of our licensees, which could curtail or limit our ability to engage new or maintain relationships with existing licensee partners on acceptable terms or at all. Further, the unplanned loss of any of our wholesale licensees could lead to inadequate market coverage for retail sales of products bearing our brands, create negative impressions of us and our brands with retailers and consumers, and add downward pricing pressure on products bearing our brands as a result of liquidating a former wholesaler’s inventory of such products. The occurrence of any of these risks could adversely impact our reputation, performance and financial condition.

We rely on the accuracy of our licensees’ sales reports for reporting and collecting our royalty revenues, and if these reports are untimely or incorrect, our revenues could be delayed or inaccurately reported or collected.

Most of our licensing royalty revenues are generated from retailers that manufacture and sell products bearing our brands in their stores and on their websites, and from wholesalers that manufacture and distribute products bearing our brands and sell these products to retailers. ~~In addition, we generate revenues from licensees that sell products that we have developed and designed.~~ Under our existing agreements, our licensees pay us fees based on their sales of products or, for some of our wholesale licensees, based on their manufacturing costs. As a result, we rely on our licensees to accurately report their sales or costs in collecting our license and design fees, preparing our financial reports, projections and budgets and directing our sales and marketing efforts. Although all of our agreements permit us to audit our licensees, if any of them understate their sales or costs, we may not collect and recognize the royalty revenues to which we are entitled on a timely basis or at all, or we may endure significant expense to obtain compliance.

The failure of licensees to adequately produce, market, import and sell products bearing Playboy’s trademarks in their license categories, continue their operations, renew their license agreements or pay their obligations under their license agreements has resulted in, and could continue to result in, a decline in the results of operations of our business.

A significant part of our revenues depends on royalty payments made to us pursuant to license agreements. Although the license agreements for our trademarks usually require the advance payment of a portion of the license fees and, in most cases, provide for guaranteed minimum royalty payments to us, the failure of licensees to satisfy their obligations under these agreements, or their inability to operate successfully or at all, could result in their breach and/or the early termination of such agreements, their non-renewal of such agreements or the decision to amend such agreements to reduce the guaranteed minimum royalty payments or sales royalties due thereunder, thereby eliminating some or all of that stream of revenue.

There can be no assurances that we will not lose the licensees under our license agreements due to their failure to exercise the option to renew or extend the term of those agreements, or the cessation of their business operations (as a result of their financial difficulties or otherwise) without equivalent options for ~~replacement. Any~~replacement or termination of ~~such~~their license agreements for cause. In October 2023, we terminated licensing agreements with certain Chinese licensees due to ongoing, uncured breaches of their licenses, which comprised $152.2 million of unrecognized licensing revenue under our long-term contracts as of the termination date and resulted in a decrease in licensing revenue of $16.6 million in 2023. Such failures by our licensees have reduced, and could continue to reduce, the ~~anticipated~~ revenue stream to be generated by ~~the~~our license agreements. In addition, the failure of licensees to meet their production, manufacturing and distribution requirements, or to be able to continue to import goods (including, without limitation, as a result of labor strikes or unrest), could cause a decline in their sales and potentially decrease the amount of royalty payments (over and above the guaranteed minimum royalty payments) due to us. ~~Any~~A decrease in royalties for any of the above reasons has had, and could continue to have, a material and adverse ~~effect~~impact on our financial condition, results of operations or business.

Further, the failure of licensees and/or their third party manufacturers, which we do not control, to adhere to local laws, industry standards and practices generally accepted in the United States in areas of worker safety, worker rights of association, social compliance, and general health and welfare, could result in accidents and practices that cause disruptions or delays in production and/or ~~substantial harm to~~adversely impact the reputation of our trademarks, any of which could have a material adverse effect on the business and financial results of our business. A weak economy or softness in sectors of licensees of our consumer business could exacerbate this risk. This, in turn, could decrease our potential revenues and cash flows.

We rely on ~~third parties to help operate certain aspects~~our suppliers, and the suppliers of our ~~e-commerce business.~~licensees, to comply with our terms and conditions, regulatory requirements and the quality and delivery expectations of our customers.

Our ability, and the ability of our licensees, to deliver quality products on schedule is dependent upon a variety of factors, including execution of internal performance plans, availability of raw materials, internal and supplier produced parts and structures, conversion of raw materials into parts and assemblies, and performance of suppliers and others. We and our licensees rely on numerous third-party suppliers for the production of our direct-to-consumer and licensed products. We do not currently have the ability to manufacture such products ourselves. Consequently, we risk disruptions in our supply of key products and components if our suppliers fail or are unable to perform because of shortages in raw materials, operational problems, strikes, natural disasters, health crises or other factors. In addition, numerous jurisdictions have enacted regulations against conflict minerals, forced labor and human trafficking in supply chains. While we have policies and procedures to avoid these practices in our supply chain, we cannot guarantee that suppliers will always comply with these laws and expectations. We may face enforcement liability and reputational challenges if we are unable to sufficiently meet these expectations.

We and our licensees may also have disputes with suppliers arising from, among other things, the quality of products and services or customer concerns about the supplier. If ~~these third parties~~any of our or our licensees suppliers fail to ~~perform,~~timely meet their contractual obligations or have regulatory compliance or other problems, our ~~business~~ability to fulfill our obligations may be jeopardized. If we or our licensees were to experience difficulty in obtaining certain products, there could be ~~harmed.~~

We are dependent on information technology systems and third parties to operate certain of our e-commerce and subscription websites, process transactions, respond to customer inquiries and maintain cost-efficient operations. The failure of our information technology systems to operate properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in integrating new systems, could adversely affect our business. Our information technology systems, websites, and operations of third parties on whom we rely, may encounter damage or disruption or slowdown caused by a failure to successfully upgrade systems, system failures, viruses, computer “hackers”, natural disasters, pandemics, or other causes. These could cause information, including data related to customer orders, to be lost or delayed which could result in delays in the delivery of products to our customers or lost sales, which could reduce demand for our products and cause our sales to decline. Any significant disruption in our information technology systems or websites could harm our reputation and credibility and could have a materialan adverse effect on our ~~business, financial condition, and~~ results of ~~operations.~~operations and on our customer relationships and our reputation.

Our commercial agreements, strategic alliances, and other business relationships expose us to risks.

We provide physical ~~e-commerce,~~ and ~~omnichannel~~e-commerce retail and other products and content to businesses through commercial agreements, strategic alliances, and business relationships. These arrangements are complex and require substantial infrastructure capacity, personnel, and other resource commitments, which may limit the amount of business we can service. We may not be able to implement, maintain, and develop the components of these commercial relationships, which may include web services, fulfillment, customer service, inventory management, tax collection, payment processing, hardware, content, and third-party software, and engaging third parties to perform services.relationships. The amount of compensation we receive under certain of our commercial agreements is partially dependent on the volume of the other company’s sales. Therefore, when the other company’s offerings are not successful, the compensation we receive may be lower than expected or the agreement may be terminated. Moreover, we may not be able to enter into additional or alternative commercial relationships and strategic alliances on favorable terms. We also may be subject to claims from businesses to which we provide these products and content if we are unsuccessful in implementing, maintaining, or developing these products and content.

As our agreements terminate, we may be unable to renew or replace these agreements on comparable terms, or at all. We may in the future enter into amendments on less favorable terms or encounter parties that have difficulty meeting their contractual obligations to us, which could adversely affect our operating results.

Our present and future e-commerce services agreements, other commercial agreements, and strategic alliances create additional risks such as:

•disruption of our ongoing business, including loss of management focus on existing businesses;

•impairment of other relationships;

•variability in revenue and income from entering into, amending, or terminating such agreements or relationships; and

•difficulty integrating under the commercial agreements.

We may be subject to product liability claims when people or property are harmed by the products we sell or manufacture.

Some of the products we sell have exposed us, and may continue to expose us, to product liability claims relating to personal injury or illness, death, or environmental or property damage, and can require product recalls or other actions. Third parties who sell products using our platforms and stores increase our exposure to product liability claims, such as when these sellers do not have sufficient protection from such claims. Although we maintain our own liability insurance and may be indemnified by our manufacturers and/or licensees, we cannot be certain that our coverage or indemnification will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. Although we impose contractual terms on sellers that are intended to prohibit sales of certain types of products, we may not be able to detect, enforce, or collect sufficient damages for breaches of such agreements. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.

Our consumer business is subject to additional risks associated with our international licensees.

Many of the licensees of our consumer business are located outside the U.S. Our consumer business and our licensees face numerous risks in doing business outside the U.S., including: (i) unusual or burdensome foreign laws or regulatory requirements or unexpected changes to those laws or requirements; (ii) tariffs, trade protection measures, import or export licensing requirements, trade embargoes, sanctions and other trade barriers; (iii) competition from foreign companies; (iv) longer accounts receivable collection cycles and difficulties in collecting accounts receivable; (v) less effective and less predictable protection and enforcement of intellectual property rights; (vi) changes in the political or economic condition of a specific country or region (including, without limitation, as a result of political ~~unrest)~~unrest and wars and other armed conflicts), particularly in emerging markets or jurisdictions where political events may strongly influence consumer spending; (vii) fluctuations in the value of foreign currency versus the U.S. dollar, the cost of currency exchange and compliance with exchange controls; (viii) potentially adverse tax consequences; and (ix) cultural differences in the conduct of business. Any one or more of such factors could cause the future international sales of licensees to decline. In addition, the business practices of our consumer business in international markets are subject to the requirements of the U.S. Foreign Corrupt Practices Act and all other applicable anti-bribery laws, any violation of which could subject us to significant fines, criminal sanctions and other penalties. The occurrence of any of the above risks and uncertainties could result in a material adverse effect on our consumer business’s financial condition, results of operations or business.

~~We are subject to product liability claims when people or property are harmed by the products we sell or manufacture.~~

Some of the products we sell or manufacture expose us to product liability or food safety claims relating to personal injury or illness, death, or environmental or property damage, and can require product recalls or other actions. Third parties who sell products using our platforms and stores increase our exposure to product liability claims, such as when these sellers do not have sufficient protection from such claims. Although we maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. Although we impose contractual terms on sellers that are intended to prohibit sales of certain type of products, we may not be able to detect, enforce, or collect sufficient damages for breaches of such agreements. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.

Additional Risks Related to Our Digital Subscriptions and Content Business

Free content on the ~~internet~~Internet and competition from free platforms and other social media and content-creator sites is increasing competition for our adult content products and creator platform and is changing the dynamics of the marketplace for our ~~adult content~~digital products.

Demand for our paid adult content products and our creator platform is significantly impacted by the availability of free adult entertainment available on the Internet, ~~in general and at the~~ “YouTube-like” adult video sites (commonly known as “tube sites”), as well as from social media platforms and other subscription-based content-creator sites. ~~The tube~~Such other sites and platforms feature free adult videos, some of which consist of unlicensed, or pirated, excerpts of professionally produced adult movies (including at times pirated versions of our proprietary videos). ~~Content-creator~~Other content-creator sites allow consumers to subscribe for content from specific creators, many of which offer adult-oriented content. The availability of these free adult videos and creator-specific subscriptions may diminish the demand for our paid video offerings on our proprietary websites, including our Playboy Club on ~~centerfold.com~~playboy.com, playboy.tv and playboyplus.com, and for our other content products, and has diluted the market presence of our website. The tube sites, social media platforms and other content-creator sites may materially affect the revenues we generate from our websites and other adult content offerings. It is uncertain what ~~affect~~effect tube sites, other free internet adult websites and competing content-creator sites will have on our on-going operations and our future financial results. No assurance can be given that we will be able to effectively compete against the tube sites and other internet products.

Failure to maintain our agreements with multiple system operators, or MSOs, and direct-to-home, or DTH, operators on favorable terms could adversely affect our business, financial condition or results of operations.

We currently have agreements with many of the largest MSOs in the U.S. and internationally. Our agreements with these operators may be terminated on short notice without penalty. If one or more MSOs or DTH operators terminate or do not renew these agreements, or do not renew them on terms as favorable as those of current agreements, our business, financial condition or results of operations could be materially adversely affected.

In addition, competition among television programming providers is intense for both channel space and viewer spending. Our competition varies in both the type and quality of programming offered, but consists primarily of other premium pay platforms, such as general-interest premium channels, and other adult movie pay platforms. We compete with other pay platforms as we attempt to obtain or renew carriage with DTH operators and individual cable affiliates, negotiate fee arrangements with these operators, negotiate for video-on-demand, or VOD, and subscription video-on-demand rights and market our programming through these operators to consumers. The competition with programming providers has intensified as a result of consolidation in the DTH and cable systems industries, which has resulted in fewer, but larger, operators. Competition has also intensified with VOD’s lower cost of entry for programmers compared to linear networks and with capacity constraints disappearing. The impact of industry consolidation, any decline in our access to and acceptance by DTH and/or cable systems and the possible resulting deterioration in the terms of agreements, cancellation of fee arrangements or pressure on margin splits with operators of these systems could adversely affect our business, financial condition or results of operations.

Limits on our access to satellite transponders could adversely affect our business, financial condition or results of operations.

Our cable television and DTH operations require continued access to satellite transponders to transmit programming to cable and DTH operators. Material limitations on our access to these systems or satellite transponder capacity could materially adversely affect our business, financial condition or results of operations. Our access to transponders may also be restricted or denied if:

•we or the satellite transponder providers are indicted or otherwise charged as a defendant in a criminal proceeding;

•the Federal Communications Commission issues an order initiating a proceeding to revoke the satellite owner’s authorization to operate the satellite;

•the satellite transponder providers are ordered by a court or governmental authority to deny us access to the transponder;

•we are deemed by a governmental authority to have violated any obscenity law; or

•the satellite transponder providers fail to provide the required services.

In addition to the above, the access of Playboy TV and the Playboy Channel and our other networks to transponders may be restricted or denied if a governmental authority commences an investigation or makes an adverse finding concerning the content of their transmissions. Technical failures may also affect our satellite transponder providers’ ability to deliver transmission services.

There has been a shift in consumer behavior as a result of technological innovations and changes in the distribution of content, which may affect our viewership and the profitability of our content business in unpredictable ways.

Technology and business models in ~~our~~the digital content industry continue to evolve rapidly. Changes to these business models include the increasing presence of user-generated content, streaming platforms and ~~the~~ greater video consumption through time-delayed or time-shifted viewing of television programming through social media and content creation sites, streaming platforms, on-demand platforms, and digital video recorder, or DVRs. Consumer behavior related to changes in content distribution and technological innovation affect our economic model and viewership in ways that are not entirely predictable.

Consumers are increasingly viewing content on a time-delayed or on-demand basis from traditional distributors and from streaming and social media platforms, connected apps and websites and on a wide variety of screens, such as televisions, tablets, mobile phones and other devices. Additionally, devices that allow users to view television programs on a time-shifted basis and technologies that enable users to fast-forward or skip programming, including commercials, such as DVRs and portable digital devices and systems that enable users to store or make portable copies of content may affect the attractiveness of our offerings to advertisers and could therefore adversely affect our revenues. There is increased demand for short-form, user-generated and interactive content, which ~~have~~we are addressing through our content creator platform, the Playboy Club. Such content is different ~~economic models~~ than our ~~traditional~~past content offerings. Likewise, distributors are offering smaller programming packages known as “skinny ~~bundles,”~~bundles” and content-creator platforms allow for a la carte consumption, both of which are delivered at a lower cost than traditional subscription offerings and sometimes allow consumers to create a customized package of ~~networks,~~content, that are gaining popularity among consumers. If the Playboy Club does not provide the on-demand content sought by consumers, our networks are not included in ~~these~~on-demand content packages or consumers favor alternative offerings, we may experience a decline in viewership or content consumption and ultimately the demand for our programming and content, which could lead to lower ~~distribution and advertising~~ revenues.

In order to respond to changes in content distribution models in our industry, we have invested in, developed and launched ~~DTC products (including~~ our ~~online retail stores).~~content creator platform, the Playboy Club. There can be no assurance, however, that our ~~viewers~~consumers will respond to our ~~DTC~~digital products and services or that our ~~DTC~~digital strategy will be successful, particularly given the increase in ~~DTC~~digital products and platforms on the market. Each distribution model has different risks and economic consequences for us, so the rapid evolution of consumer preferences may have an economic impact that is not completely predictable. Distribution windows are also evolving, potentially affecting revenues from other windows. If we cannot ensure that our distribution methods and content are responsive to our target audiences, our business could be adversely affected.

We may be unable to sell additional, or renew, Playboy Club memberships, which could materially and adversely affect our business, results of operations and financial condition.

The success of our content creator platform, the Playboy Club, may depend on our ability to sell a sufficient number of new, or renew existing, memberships to the platform. We may not be successful in attracting members to the Playboy Club, and membership levels may materially decline over time. We may also have to cancel or suspend memberships if a member fails to provide appropriate payment for membership. In addition, we may experience attrition and we must continually engage existing members and attract new members in order to maintain Playboy Club membership levels. It is possible that a portion of our member base may not regularly use the offerings of the Playboy Club and may cancel their memberships. In order to increase Playboy Club membership levels, we may from time to time offer promotions or incentives. If we are not successful in optimizing pricing or membership incentives or finding other ways to add memberships, our membership levels may decrease, and in turn growth in the Playboy Club’s revenues may suffer, which will have an increasing impact on our financial results as we continue to a capital-light model that increasingly invests in our digital segment. As a result of these factors, we cannot be certain that our Playboy Club membership levels will be adequate to maintain or permit the expansion of our content creator platform. A decline in Playboy Club membership levels and revenues of the creator platform could have an adverse effect on our business, results of operations and financial condition.

Our digital content business involves risks of liability claims for media content, which could adversely affect our business, financial condition or results of operations.

As a distributor of media content, we may face potential liability for:

•defamation;

•invasion of privacy;

•negligence;

•copyright or trademark infringement; and

•other claims based on the nature and content of the materials distributed.

These types of claims have been brought, sometimes successfully, against broadcasters, publishers, online providers and other disseminators of media content. We could also be exposed to liability in connection with material available through our ~~websites.~~websites, including our creator platform. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on us. In addition, measures to reduce our exposure to liability in connection with material available through our websites could require us to take steps that would substantially limit the attractiveness of our websites and/or their availability in various geographic areas, which would negatively affect their ability to generate revenues.

Risks Related to the Ownership of Our Common Stock

If we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our ~~Common Stock.~~common stock.

Our ~~Common Stock~~common stock is currently listed on Nasdaq. In order to maintain such listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements.

On ~~August 9, 2020,~~November 3, 2023, we received a letter (the “Nasdaq Staff Deficiency Letter”) from Nasdaq indicating that, for the ~~Company notified~~prior thirty consecutive business days, the bid price for PLBY’s common stock had closed below the minimum $1.00 per share requirement for continued listing on The Nasdaq that it was not in compliance with Nasdaq Listing Rules 5605(b)(1) and 5605(c)(2)(A) as a result of the resignation of a member of the Company’s board who was also a member of the Company’s Audit Committee.Global Market under Nasdaq Listing Rule ~~5605(b)~~5450(a)(1) ~~requires a majority independent board and 5605(c)(2)(A) requires the Audit Committee~~. Nasdaq gave us until May 1, 2024 to regain compliance with such rule, which compliance was confirmed by Nasdaq to have ~~at least three independent members (as defined by Nasdaq Listing Rule 5605(a)(2) and Rule 10A-3(b)(1) under the Securities Exchange Act~~been achieved as of 1934), at least one of whom is an audit committee financial expert. As a result of the resignation of Mr. Suying Liu, the Company no longer has a majority independent board or an Audit Committee comprised of three independent directors. The Nasdaq Listing Rules provide for a cure period during which the Company may regain compliance. Under Nasdaq Listing Rules, the Company shall have until the earlier of its next annual meeting of stockholders or one year from the occurrence of the event that caused the failure to comply with Nasdaq Listing Rules 5605(b)(1) and 5605(c)(2)(A); provided, however, that if the next annual meeting of stockholders occurs no later than 180 days following the event that caused the vacancy, the Company shall instead have 180 days from such event to regain compliance.

January 9, 2024. There can be no assurances that we will be able to ~~regain compliance with Nasdaq’s listing standards or if we do later regain compliance with Nasdaq’s listing standards, will be able to~~ continue to comply with ~~the~~ applicable listing standards. If we are unable to maintain compliance with ~~these Nasdaq~~Nasdaq’s listing requirements, our ~~Common Stock will~~common stock could be delisted from Nasdaq. If Nasdaq delists our ~~Common Stock,~~common stock, we could face significant material adverse consequences, including:

•a limited availability of market quotations for our securities;

•loss of eligibility to use or rely on our existing and/or any new registration statements on Form S-3;

•a determination that our ~~Common Stock~~common stock is a “penny stock” which will require brokers trading in our ~~Common Stock~~common stock to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our ~~Common Stock;~~common stock;

•a limited amount of news and analyst coverage for our company; and

•a decreased ability to issue additional securities or obtain additional financing in the future.

RTOur Chairman, Suhail Rizvi, together with entities he controls (“RT”), owns a significant percentage of our ~~Common Stock,~~common stock, and it may effectively control all our major corporate decisions, and ~~its~~their interests may conflict with your interests as an owner of our ~~Common Stock~~common stock and with our interests.

RT beneficially owned approximately ~~27.4%~~25.0% of our ~~Common Stock~~common stock as of March ~~8, 2022.~~22, 2024. Under the terms of ~~the~~an Investor Rights Agreement we entered into with RT, RT has the right, but not the obligation, to nominate to the ~~Company's board of directors (the "Board")~~Board a number of designees equal to (i) three directors, if and so long as RT and its affiliates beneficially own, in the aggregate, 50% or more of the shares of our ~~Common Stock,~~common stock, (ii) two directors, in the event that RT and its affiliates beneficially own, in the aggregate, 35% or more, but less than 50%, of the shares of ~~Common Stock~~common stock and (iii) one director, in the event that RT and its affiliates beneficially own, in the aggregate, 15% or more, but less than 35%, of the shares of our ~~Common Stock~~common stock (in each case, subject to proportional adjustment in the event that the size of the Board is increased or ~~decreased following the Closing)~~decreased). RT also has the right to appoint the chairman of the Board so long as RT and its affiliates beneficially own, in the aggregate, 15% or more of the shares of ~~Common Stock.~~common stock. We anticipate that Suhail Rizvi, our current chairman of the Board and a manager of the RT entities, will continue to serve as ~~RT's~~RT’s designee on the Board and chairman of the Board.

On January 30, 2023, we entered into a standstill agreement (the “Standstill Agreement”) with RT in connection with the Company’s public rights offering that closed in February 2023. Pursuant to the Standstill Agreement, among other limitations, RT and their affiliates agreed not to purchase shares of our common stock to the extent that RT and their affiliates’ ownership would exceed 29.99% of our outstanding shares of common stock in the aggregate following any acquisition of common stock during the standstill period. The standstill period means any period from and after January 30, 2023 in which RT and their affiliates collectively own, beneficially or of record, more than 14.9% of the total outstanding shares of our common stock.

The directors RT elects have the authority to incur additional debt, issue or repurchase stock, declare dividends and make other decisions that could be detrimental to stockholders. Even though RT may own or control less than a majority of our total outstanding shares of our ~~Common Stock,~~common stock, it is able to influence the outcome of corporate actions so long as it owns a significant portion of our total outstanding shares of our ~~Common Stock.~~common stock.

RT may have interests that are different from yours and may vote in a way with which you disagree and that may be adverse to your interests. In addition, RT’s concentration of ownership could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which could cause the market price of our ~~Common Stock~~common stock to decline or prevent our stockholders from realizing a premium over the market price for their common stock.

Additionally, RT is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us or supply us with goods and services. RT may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. Stockholders should consider that the interests of RT may differ from their interests in material respects.

The market price of the Company’s common stock is likely to be highly volatile, and you may lose some or all of your investment.

The market price of the Company’s common stock is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following:

•the ~~impact of COVID-19 pandemic on our business;~~

•~~the~~ inability to obtain or maintain the listing of our shares of common stock on Nasdaq;

•the inability to recognize the anticipated benefits of ~~the Business Combination,~~any strategic opportunities or corporate transactions, which may be affected by, among other things, competition, our ability to grow and manage growth profitably, and our ability to retain our key employees;

•changes in applicable laws or regulations;

•risks relating to the uncertainty of our projected financial information; and

•risks related to the organic and inorganic growth of our business and the timing of expected business milestones.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of the Company’s common stock, regardless of the Company’s actual operating performance.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.

The trading market for our ~~Common Stock~~common stock will be influenced by the research and reports that securities or industry analysts publish about us. If securities or industry analysts initiate coverage and one or more of the analysts who cover us downgrade our ~~Common Stock~~common stock or publish inaccurate or unfavorable research about our company, our ~~Common Stock~~common stock share price would likely decline. If analysts publish target prices for our ~~Common Stock~~common stock that are below the historical sales prices for ~~the ordinary shares of PLBY~~our common stock on a securities exchange or the then-current public price of our ~~Common Stock,~~common stock, it could cause our stock price to decline significantly. ~~Further,~~In 2023, multiple investment analysts ceased coverage of our stock. Due to such stoppage of analyst coverage, and if ~~one or more of these~~further analysts cease coverage of us or fail to publish reports on us regularly, demand for our ~~Common Stock~~common stock could decrease, which might cause our ~~Common Stock~~common stock price and trading volume to decline.

Volatility in ~~the Company’s~~our share price could subject ~~the Company~~us to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. If ~~the Company faces~~we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could ~~harm its~~adversely impact our business.

Because we do not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

We currently anticipate we will retain future earnings for the development, operation and expansion of our business and ~~does~~do not anticipate declaring or paying any cash dividends for the foreseeable future. As a result, capital appreciation, if any, of our shares of ~~Common Stock~~common stock would be your sole source of gain on an investment in such shares for the foreseeable future.

Sales of a substantial number of shares of our ~~Common Stock~~common stock in the public market could cause the price of our ~~Common Stock~~common stock to decline.

On ~~September 9, 2021,~~June 10, 2022, the SEC declared effective our resale registration statement on Form ~~S-1~~S-3 (File No. ~~333-259213) effective,~~333-264515), pursuant to which certain existing stockholders of the Company are able to sell up to ~~2,269,552~~30,534,974 shares of Common Stock in the public market, subject in certain cases to remaining applicable contractual lock-up agreements. On May 10, 2021, the SEC declared our registration statement on Form S-1 (File No. 333-255585) effective, pursuant to which certain stockholders of the Company are able to sell up to 21,854,262 shares of Common Stock in the public market, subject in certain cases to remaining applicable contractual lock-up agreements. On February 10, 2021, the SEC declared our registration statement on Form S-1 (File No. 333-250017) effective, pursuant to which certain institutional and accredited investors (collectively, the “PIPE Investors”) are able to sell up to 5,390,763 Shares of Common Stockcommon stock in the public market.

AsOn September 13, 2022, the SEC declared effective our shelf registration statement on Form S-3 (File No. 333-267273), pursuant to which we registered up to $250 million of ~~April 12, 2021, 50%~~primary issuances of certain securities listed in such registration statement. On January 24, 2023, we took down $16.25 million of such shelf registration for the issuance of 6,357,341 shares of our common stock in a registered direct offering to a limited number of investors. We also completed a rights offering in February 2023, pursuant to which we took down $50 million of the shelf registration for the issuance of 19,561,050 shares ~~received or~~of common stock. Accordingly, as of the date of this Annual Report on Form 10-K, up to $183.75 million of securities could be ~~received by Playboy stockholders in~~issued pursuant to the ~~Business Combination were released from contractual lock-up restrictions,~~unused portion of ~~which 10,458,406 shares are currently available for resale under~~ the ~~resale registration statement.~~shelf registration.

We also have registered on ~~a Form~~Forms S-8 a total of ~~9,868,539~~14,161,508 shares of ~~Common Stock~~common stock underlying awards that we have issued, or may in the future issue, under our employee equity incentive plans. These shares may be sold freely in the public market upon issuance, or pursuant to the reoffer prospectus in the ~~Form~~Forms S-8, as applicable, subject to existing lock-up agreements and relevant vesting schedules, and applicable securities laws. Promptly following the filing of this Annual Report on Form 10-K, we intend to register more than 2.9 million new shares of common stock and over 300,000 shares of common stock that were returned to our equity incentive plans (due to their cancellation or forfeiture, which may be reissued under such plans) on another Form S-8 for future issuances under our equity incentive plans, in accordance with the terms thereof. See Note 12, Stockholders Equity–Common Stock, for additional information regarding our common stock reserved for future issuance as of December 31, 2023.

The presence of these shares of ~~Common Stock~~common stock trading in the public market may have an adverse effect on the market price of our ~~Common Stock.~~common stock. Sales of a substantial number of shares of our ~~Common Stock~~common stock in the public market or the perception that these sales might occur could depress the market price of our ~~Common Stock~~common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our ~~Common Stock.~~common stock. In addition, the sale of substantial amounts of our ~~Common Stock~~common stock could adversely impact its price.

Future sales of shares of our ~~Common Stock~~common stock may depress our stock price.

Future sales of a substantial number of shares of our ~~Common Stock~~common stock in the public market, or the perception that such sales might occur, could depress the market price of our ~~Common Stock~~common stock and could impair ~~its~~our ability to raise capital through the sale of additional equity securities.

You may experience future dilution as a result of future equity offerings or other issuances of our shares of common stock.

In order to raise additional capital, we may in the future offer additional shares of our common stock or securities convertible into or exchangeable for our common stock at prices that may not be the same as the price you paid for your shares. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by you, and investors purchasing shares or other securities in the future could have rights superior to those purchased by you. Sales of additional shares of our common stock or securities convertible into shares of common stock will dilute our stockholders’ ownership in us.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (c) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the DGCL or our certificate of amended and restated incorporation or our bylaws, or (d) any action asserting a claim related to or involving the Company that is governed by the internal affairs doctrine except for, as to each of (a) through (d) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter ~~jurisdiction,.~~jurisdiction. Our amended and restated certificate of incorporation also provides that the federal district courts of the Unites States will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities ~~Act.~~Act of 1933, as amended (the “Securities Act”).

The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could ~~seriously harm~~adversely impact our business. The choice of forum provision requiring that the Court of Chancery of the State of Delaware be the exclusive forum for certain actions would not apply to suits brought to enforce any liability or duty created by the Exchange Act.

General Risk Factors

Any inability to identify, fund investment in and commercially exploit new technology could have a material adverse impact on our business, financial condition or results of operations.

We are engaged in businesses that have experienced significant technological changes over the past several years and are continuing to undergo technological changes. Our ability to implement our business plan and to achieve the results projected by management will depend on management’s ability to anticipate technological advances and implement strategies to take advantage of future technological changes. Any inability to identify, fund investment in and commercially exploit new technology or the commercial failure of any technology that we pursue, such as Internet and mobile, could result in our businesses becoming burdened by obsolete technology and could have a material adverse impact on our business, financial condition or results of operations.

We will need to generate profits or obtain additional capital to fund our operations in the future. If we are unsuccessful in generating profits or obtaining new capital, we may not be able to continue operations or may be forced to sell assets to do so. Alternatively, capital may not be available to us on favorable terms, or if at all. If available, financing terms may lead to significant dilution of our stockholders’ equity.

We are not profitable and have had negative cash flow from operations since becoming a public company in February 2021. To fund our operations and develop and commercialize our products, we have relied primarily on equity and debt financings. We expect our capital expenditures and working capital requirements in 2024 to be largely consistent with 2023, as we continue to invest in our creator platform. We may, however, need additional cash resources to fund our operations until the creator platform achieves a level of revenue that provides for operating profitability.

We evaluated whether there are any conditions and events, considered in the aggregate, that have the potential to raise substantial doubt about our ability to continue as a going concern over the next twelve months from the date of filing this Annual Report on Form 10-K. Although consequences of ongoing macroeconomic uncertainty could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors, such as those discussed above, we believe our existing sources of liquidity, along with proceeds from asset dispositions and savings from cost reductions initiatives, will be sufficient to meet our obligations as they become due under the A&R Credit Agreement (as defined herein) and our other obligations for at least one year following the date of the filing of this Annual Report on Form 10-K. We believe that we will have sufficient funds for our operations for the following 12 months to allow us to fund our current operating plan through the following 12 months without additional capital. However, to the extent that our current resources are insufficient to satisfy our cash requirements, we may be required to obtain additional funds during the following 12 months. Additional capital may not be available at such times or amounts as needed by us.

Even if capital is available, it might be available only on unfavorable terms. Any additional equity or convertible or in-kind debt financing into which we enter could be dilutive to our existing stockholders. Any future debt financing into which we enter may impose covenants upon us that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity capital that we raise may contain terms that are not favorable to us or our stockholders. If we raise additional funds through collaboration, joint venture or licensing arrangements with third parties, we may need to relinquish rights to certain intellectual property or grant licenses on terms that are not favorable to us. If access to sufficient capital is not available as and when needed, our business may be materially impaired, and we may be required to cease operations, curtail one or more business segments, scale back or eliminate the development of business opportunities, or significantly reduce expenses, sell assets, seek a merger or joint venture partner, file for protection from creditors or liquidate all of our assets. Any of these factors could harm our financial results.

We may not realize the expected financial benefits from our disposition of assets and/or our cost reductions, including within the anticipated timelines.

Our strategic initiatives include identifying and implementing actions designed to shift to a more capital-light business model and significantly reduce our expenses. In April 2023, we sold our Yandy business, and in November 2023, we sold our Lovers business and certain of our art assets. We are also considering the sale of additional art assets. Pursuant to our A&R Credit Agreement (as amended), the net proceeds of such dispositions may be retained by us and used to support our remaining business. However, there can be no assurance that such proceeds will sufficiently improve our liquidity position or our operations.

We continue to review the cost structure of our businesses and additional cost rationalization. We significantly restructured our technology expenses in the first and fourth quarters of 2023, and cost-excessive and under-utilized software packages were either terminated or not renewed upon expiration of applicable agreements. However, this resulted in a restructuring charge of $5.1 million for the year ended December 31, 2023, excluding $0.4 million of costs related to discontinued operations. In addition, during the year ended December 31, 2023, we reduced headcount within the Playboy Direct-to-Consumer business and our corporate office, resulting in severance charges of $3.5 million and a net increase of $0.1 million of stock-based compensation expenses, which was comprised of a $2.4 million reduction of stock-based compensation expenses due to forfeitures of certain equity grants, offset by additional stock-based compensation expense of $2.3 million due to acceleration of certain equity awards during the second quarter of 2023.

We may not be able to fully implement all asset dispositions or intended cost reduction actions or realize their benefits, including within the anticipated timeline, nor may we be able to identify and/or implement additional asset dispositions or cost reduction actions necessary to achieve positive cash flows, including potentially as a result of factors outside of our control. In addition, the implementation of these dispositions, cost reduction actions and changes to our workforce could have unintended consequences to us, including negatively impacting our sales, diversion of management attention, employee attrition beyond workforce reductions, and lower employee morale among our current employees. If we are not able to fully achieve the expected financial benefits of our asset dispositions and cost reduction actions within the anticipated timeline, we may not be able to effectively mitigate the negative impacts of the current ongoing negative macroeconomic conditions on our business, which in turn, could weaken our ability to support our ongoing operations, satisfy covenants under our A&R Credit Agreement and otherwise meet our obligations as they become due, and further, cause management to change its assessment of our ability to continue as a going concern (see Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K for further discussion of management’s most recent assessment).

Our failure to fully realize the expected financial benefits from our asset dispositions and cost reduction actions could also lead to the implementation of additional restructuring-related activities in the future, which could exacerbate these risks or introduce new risks which could materially adversely affect our business, financial position, liquidity and results of operations.

We are subject to periodic claims and litigation that could result in unexpected expenses and could ultimately be resolved against us.

From time to time, we are involved in litigation and other proceedings and litigation arising in the ordinary course of business, such as the matters described in ““Item 3, Legal ~~Proceedings~~”Proceedings” of this Annual Report on Form 10-K. Defending these claims, even those without merit, could cause us to incur significant legal expenses and divert financial and management resources. These claims could also result in significant settlement amounts, damages, ~~fine~~fines or other penalties. An unfavorable outcome of any particular proceeding could exceed the limits of our insurance policies or the carriers may decline to fund such final settlements and/or judgments and could have an adverse impact on our business, financial condition, and results of operations. In addition, an adverse resolution of any lawsuit or claim against us could negatively impact our reputation and our brand image and could have a material adverse effect on our business.

In addition, we rely on our employees, consultants and sub-contractors to conduct our operations in compliance with applicable laws and standards. Any violation of such laws or standards by these individuals, whether through negligence, harassment, discrimination or other misconduct, could result in significant liability for us and adversely affect our business. For example, negligent operations by employees could result in serious injury or property damage, and sexual harassment or racial and gender discrimination could result in legal claims and ~~reputational harm.~~adversely impact our reputation.

If we are unable to attract and retain key employees and hire qualified management and personnel our ability to compete could be ~~harmed.~~adversely impacted.

We believe that our ability to successfully implement our business strategy and to operate profitably depends, in part, on our ability to retain our key personnel. If key personnel become unable or unwilling to continue in their present positions, our business, financial condition or results of operations could be materially adversely affected. Our success also depends, in part, on our continuing ability to identify, hire, attract, train and develop other highly qualified personnel, including appropriate technical and engineering employees to support our expanding digital platforms.

Competition for these employees can be intense, and our ability to hire, attract and retain them depends on our ability to provide competitive compensation. We may not be able to attract, assimilate, develop or retain qualified personnel in the future, and our failure to do so could adversely affect our business, including the execution of our global business strategy. Any failure by our management team to perform as expected may have a material adverse effect on our business, prospects, financial condition and results of operations.

~~Past performance by our management team and their affiliates may not be indicative of future performance of an investment in us.~~

Information regarding performance by, or businesses associated with, our management team or businesses associated with them is presented for informational purposes only. Past performance by our management team is not a guarantee the success with respect to any acquisition we may consummate. You should not rely on the historical record of the performance of our management team or businesses associated with them as indicative of our future performance of an investment in us or the returns we will, or are likely to, generate going forward.

~~We are subject to data security and privacy risks that could negatively affect our results, operations or reputation.~~

Online security breaches could materially adversely affect our business, financial condition or results of operations. Any well-publicized compromise of security could deter use of the Internet in general or use of the Internet to conduct transactions that involve transmitting confidential information or downloading sensitive materials in particular. In addition to our own sensitive and proprietary business information, we handle transactional and personal information about our consumers and users of our digital experiences, which include online distribution channels and product engagement. In offering products via online payment, we may increasingly rely on technology licensed from third parties to provide the security and authentication necessary to effect secure transmission of confidential information such as customer credit card numbers. Advances in computer capabilities, new discoveries in the field of cryptography or other developments could compromise or breach the algorithms that we use to protect our data and/or our customers’ data. If third parties are able to penetrate our network security or otherwise misappropriate confidential information, we could be subject to liability, which could result in litigation. In addition, experienced programmers or “hackers” may attempt to misappropriate proprietary information or cause interruptions in our product offerings that could require us to expend significant capital and resources to protect against or remediate these problems. We have been the target of "phishing", "spoofing", "social engineering" and other data breach attempts. While we do not believe that our data systems or information technology have been materially breached, we expect that we may continue to be a target for unauthorized access to our systems and technology, including through the use of ransomware. If any such attempts are materially successful in the future, we could be subject to liability which could negatively impact our financial condition and damage our business.

Increased scrutiny by regulatory agencies, such as the Federal Trade Commission and state agencies, of the use of customer information could also result in additional expenses if we are obligated to reengineer systems to comply with new regulations or to defend investigations of our privacy practices. In addition, we must comply with increasingly complex and rigorous, and sometimes conflicting, regulatory standards enacted to protect business and personal data in the United States, Europe and elsewhere. For example, the European Union adopted the General Data Protection Regulation (the “GDPR”), which became effective on May 25, 2018; and California passed the California Consumer Privacy Act (the “CCPA”) which became effective on January 1, 2020. The U.S. Children’s Online Privacy Protection Act (COPPA) also regulates the collection, use and disclosure of personal information from children under 13-years of age. While none of our content is directed at children under 13-years of age, if COPPA were to apply to us, failure to comply with COPPA may increase our costs, subject us to expensive and distracting government investigations and could result in substantial fines. These laws impose additional obligations on companies regarding the handling of personal data and provide certain individual privacy rights to persons whose data is stored. Compliance with existing, proposed and recently enacted laws (including implementation of the privacy and process enhancements called for under GDPR and CCPA) and regulations can be costly and time consuming, and any failure to comply with these regulatory standards could subject us to legal and reputational risks.

Customer interaction with our content is subject to our privacy policy and terms of service. If we fail to comply with our posted privacy policy or terms of service or if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our financial condition and harm our business. If regulators, the media or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, and negatively impact our financial condition and damage our business.

Geopolitical risks, such as those associated with Russia’s ~~invasion of~~war with Ukraine and armed conflicts in the Middle East, could result in a decline in the outlook for the U.S. and global economies.

The uncertain nature, magnitude, and duration of hostilities stemming from Russia’s ~~recent military invasion of~~ongoing war with Ukraine and armed conflicts in the Middle East, including the potential effects of sanctions, retaliatory attacks (including cyberattacks) and ~~retaliatory cyber-attacks~~trade disruptions on the world economy and markets, have contributed to increased market volatility and uncertainty, and such geopolitical risks could have an adverse impact on macroeconomic factors which affect our assets and businesses.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Risk Management and Strategy

We understand our responsibility to assess, identify, and manage material risks associated with cybersecurity threats and incidents, as such terms are defined in Item 106(a) of Regulation S-K. Such risks include, among other things: operational disruptions, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy and/or security laws.

Identifying, assessing and managing cybersecurity risk is part of our overall risk management strategy. Cybersecurity risks related to our business, technical operations, privacy and compliance requirements are identified and addressed through third party security software, information technology (IT) security protocols, governance oversight, and risk and compliance reviews. To defend, detect and respond to cybersecurity incidents, we, among other things: conduct routine privacy and cybersecurity reviews of systems and applications, conduct employee training, monitor emerging laws and regulations related to data protection and information security (including with respect to our digital products) and implement changes as necessary.

Our cybersecurity program is primarily overseen by our Interim Chief Information Officer and Senior Director of IT Infrastructure. They work closely with their information technology team and our senior management to develop and advance our cybersecurity strategy, as well as to respond to cybersecurity incidents. Our cybersecurity leaders report to our Chief Operating Officer and General Counsel on cybersecurity matters and collaborate with technical and business stakeholders across our business units to assess risks and implement strategies.

With the assistance of third-party software, including appropriate firmware, we manage cybersecurity risk through establishing defenses against incidents, detecting and reporting cybersecurity incidents, analyzing and assessing incidents and potential responses, implementing applicable containment, eradication and recovery actions, and understanding the reasons leading to a cybersecurity incident and appropriate changes to avoid further incidents. We perform routine reviews of our service providers, for third-party risk management, and regularly push out security updates across our business.

Our cybersecurity measures are intended to protect against unauthorized access to information, and they include authentication technology, entitlement management, access control, anti-malware software, and transmission of data firewalls. We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, in our risk factor disclosures in Item 1A of this Annual Report on Form 10-K. During the years ended December 31, 2022 and 2023, we did not, to our knowledge, experience any cybersecurity incidents or breaches that materially impacted our business, performance or results.

Governance

Our Board has overall responsibility for risk oversight, with its committees assisting the Board in performing this function based on their respective areas of expertise. Our Board has delegated primary oversight of risks related to cybersecurity to the Audit Committee of the Board, which reports on its activities and findings to the full Board as appropriate. The Audit Committee is charged with reviewing our cybersecurity processes for assessing key strategic, operational, and compliance risks. Our General Counsel, Chief Operating Officer and/or our Interim Chief Information Officer (as applicable) provide information to the Audit Committee on cybersecurity risks from time to time or as needed. These briefings include assessments of cybersecurity risks, information regarding any incidents, and cybersecurity risk management needs. Our Interim Chief Information Officer and his team, including the Senior Director of IT Infrastructure have extensive experience in cybersecurity, complemented by industry-standard certifications, and are committed to safeguarding organizational assets and mitigating cybersecurity risks effectively while efficiently leveraging cloud technologies to meet the needs of our business. In the event of a potentially material cybersecurity event, the Chair of the Audit Committee is notified and briefed, and meetings of the Audit Committee and/or full Board would be held, as appropriate.

Item 2. Properties

Our corporate headquarters is located in Los Angeles, California, where we lease and occupy approximately 45,000 square feet of office space. Our Licensing, Direct-to-Consumer and Digital Subscriptions and Content segments all use our corporate headquarters.

We also lease and occupy approximately 52,000 square feet of combined office and warehouse space in Phoenix, Arizona, housing inventory management and fulfillment operations for our Direct-to-Consumer segment.

Pursuant to our acquisition of Lovers in March 2021, we acquired over 25,000 square feet of leased office and warehouse space in Auburn, Washington. As of December 31, 2021, Lovers operated 40 retail locations in five states, ranging in size between 1,472 and 15,000 square feet per location. The Lovers properties are used by our Direct-to-Consumer segment.

~~Pursuant to our acquisition of~~Through Honey Birdette, ~~in August 2021,~~ we also ~~acquired~~have over 15,000 square feet of leased office and warehouse space in the Sydney, Australia area. As of December 31, ~~2021,~~2023, Honey Birdette ~~operates 59~~operated 62 retail locations in Australia, the U.S. and the U.K., ranging in size between approximately 400 and 1,200 square feet per location. The Honey Birdette properties are used by our Direct-to-Consumer segment.

We believe our properties are suitable for the purposes for which they are being used and fit our needs.

Item 3. Legal Proceedings

From time to time, we may become involved in additional legal proceedings arising in the ordinary course of our business. Except for the proceedings below, we are not currently a party to any other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition, and results of operations.

~~TNR Case~~

On December 17, 2021, Thai Nippon Rubber Industry Public Limited Company, a manufacturer of condoms and lubricants and a publicly traded Thailand company (“TNR”), filed a complaint in the U.S. District Court for the Central District of California against Playboy and its subsidiary Products Licensing, LLC. TNR alleges a variety of claims relating to Playboy’s termination of a license agreement with TNR and the business relationship between Playboy and TNR prior to such termination. TNR alleges, among other things, breach of contract, unfair competition, breach of the implied covenant of good faith and fair dealing, and interference with contractual and business relations due to Playboy’s conduct. TNR is seeking over $100 million in damages arising from the loss of expected profits, declines in the value of TNR’s business, unsalable inventory and investment losses. Playboy believes TNR’s claims and allegations are without merit, and Playboy will defend itself vigorously in this matter.

~~Dream Case~~

On December 7, 2021, Steve Shaw, a former consultant to GlowUp Digital, Inc. (a/k/a “Dream” and subsequently renamed Centerfold Digital Inc.), the company acquired by a wholly-owned subsidiary of the Company, brought suit in the Superior Court of the State of California, County of Los Angeles, against Michael Dow and Michael Berman (the principals of Dream), Centerfold Digital Inc. and Playboy. Mr. Shaw alleges a variety of claims, based upon an alleged (unsigned) agreement with Dream that Mr. Shaw was to be granted up to 20% of the equity of Dream (valued at $6 million based on the $30 million purchase price in the agreement for the Company’s acquisition of Dream). Subsequent to such alleged agreement and prior to the Company’s acquisition of Dream, Dream and Mr. Shaw entered into a standard mutual release agreement pursuant to which Mr. Shaw released any claims against Dream, including any rights to equity in Dream, in exchange for a monetary payment. Mr. Shaw is alleging, among other things, breach of contract, misrepresentation and fraud in connection with his alleged agreement with Dream and the circumstances under which he entered into the release. Mr. Shaw is seeking damages, costs and attorneys’ fees. Playboy believes Mr. Shaw’s claims and allegations are without merit, and Playboy will defend itself vigorously in this matter, including the assertion of its own counterclaims.

AVS Case

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~~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~~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 set for September 30, 2024. The parties are currently engaged in discovery. We believe AVS’ remaining claims and allegations are without merit, and we will defend this matter vigorously. ~~The parties are currently engaged in discovery. The court has set a preliminary trial date of September 13, 2022.~~

~~Indian Harbor~~TNR Case

On ~~October 15, 2018, Playboy~~December 17, 2021, Thai Nippon Rubber Industry Public Limited Company, a manufacturer of condoms and lubricants and a publicly traded Thailand company (“TNR”), filed a ~~lawsuit~~complaint in ~~Los Angeles Superior~~the U.S. District Court ~~(the “Court”)~~for the Central District of California against PEII and its ~~insurer, Indian Harbor Insurance Company (“Indian Harbor”), captioned Playboy Enterprises, Inc. v. Indian Harbor Insurance Company, for~~subsidiary Products Licensing, LLC. TNR alleges a variety of claims relating to the termination of a license agreement with TNR and the business relationship between PEII and TNR prior to such termination. TNR alleges, among other things, breach of contract, ~~and~~unfair competition, breach of the implied covenant of good faith and fair dealing, and interference with contractual and business relations due to PEII’s conduct. TNR is seeking ~~declaratory relief, after Indian Harbor threatened~~over $100 million in damages arising from the loss of expected profits, declines in the value of TNR’s business, unsalable inventory and investment losses. After PEII indicated it would move to ~~sue Playboy on~~dismiss the complaint, TNR received two extensions of time from the court to file an alleged theory of lack of coverage after Indian Harbor paid approximately $4.8 million towards the settlement of claims against Playboy made by Elliot Friedman. Among other things, we are seeking declaratory relief that the underlying claims asserted against Playboy are covered claims under Playboy’s insurance policies with Indian Harbor. On December 14, 2018, Indian Harboramended complaint. TNR filed its ~~answer to the~~amended complaint and filed counterclaims against Playboy for declaratory relief that it has no obligation to provide coverage for the underlying claims and that it is entitled to recoup the amounts it paid in the settlement, with interest. Indian Harboron March 16, 2022. On April 25, 2022, PEII filed a motion to dismiss the complaint. That motion was partially granted, and the court dismissed TNR’s claims under California franchise laws without leave to amend. A trial date has been set for ~~summary judgment,~~October 1, 2024. We believe TNR’s claims and allegations are without merit, and we will defend this matter vigorously.

New Handong Arbitration

On February 8, 2024, PEII and certain of its subsidiaries initiated arbitration in the Hong Kong International Arbitration Centre (the “Arbitration”) against PEII’s terminated China licensee, New Handong Investment (Guangdong) Co., Ltd. (“New Handong”). In October 2023, PEII’s subsidiary terminated its license agreement with New Handong due to ongoing, uncured material breaches by New Handong. PEII and its subsidiaries are seeking ~~among other things, summary adjudication that (1)~~damages, including the ~~insurance policy does not provide coverage because~~payment of outstanding guaranteed minimum royalties, the ~~underlying claim was allegedly first made before~~payment of all guaranteed minimum royalties for the ~~policy period~~remainder of the ~~policy and (2) that Indian Harbor does not have to provide coverage because Playboy allegedly failed to provide timely notice~~term of the ~~claim. On September 9, 2020,~~agreement, and other contractual damages for a variety of breaches, including unauthorized sales of products, underpayment of earned royalties, failing to use approved trademarks and affix official holograms to all products, and the ~~Court denied Indian Harbor’s motion, in part, ruling~~use of unapproved sublicensees, as well as a declaration that the termination of the agreement was lawful and valid and an order requiring New Handong to refrain from any further manufacture, sale, distribution or other use of any Playboy intellectual property or products. While PEII believes it has strong claims against New Handong, and that the facts of the matter support those claims, even in the event PEII were to obtain all the relief it seeks from the Arbitration, PEII can provide no assurance or guarantee that it will be able to enforce the results of ~~law that Playboy had properly reported~~ the underlying claim under the correct policy; but granted the motion as to Playboy’s breach of contract and bad faith claims because Indian Harbor ultimately funded the settlement. Based on the summary judgment ruling, the parties agreed to enter into a stipulated judgment in Playboy’s favor to advance the issues for appeal, with Indian Harbor intending to appeal the Court’s decision as to when the underlying claim was first made. The Court entered the parties’ stipulated judgment on July 26, 2021. On October 15, 2021, Indian Harbor filed its notice of appeal. On December 13, 2021, Indian Harbor filed its opening appellate brief, and our response is due by March 29, 2022. We intend to continue to prosecute our claims in this matter and vigorously defend ourselvesArbitration against ~~Indian Harbor’s counterclaims on appeal.~~New Handong or recover any or all monetary awards from New Handong.

Item 4. Mine Safety Disclosures

Not applicable.

3738

PART II

Item 5. Market for ~~Registrant's~~Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

~~PLBY's~~PLBY’s common stock trades on the Nasdaq Global Market under the symbol “PLBY”. Prior to February 10, 2021 and before the completion of the Business Combination with Mountain Crest Acquisition Corp, the common stock of Mountain Crest Acquisition Corp traded on the Nasdaq under the ticker symbol “MCAC”.

Holders

As of March ~~4, 2022,~~22, 2024, there were 6171 holders of record of our outstanding common stock. In addition to holders of record of our common stock we believe there is a substantially greater number of “street name” holders or beneficial holders whose common stock is held of record by banks, brokers and other financial institutions.

Dividend Policy

PLBY has not paid any cash dividends on our common stock to date. The payment of cash dividends is subject to the discretion of our Board and may be affected by various factors, including our future earnings, financial condition, capital requirements, share repurchase activity, current and future planned strategic growth initiatives, levels of indebtedness, and other considerations our Board deems relevant. In addition, the terms of our New Credit Agreement (defined below) also restrict our ability to pay dividends, and we may also enter into credit agreements or other borrowing arrangements in the future that may restrict our ability to declare or pay cash dividends on our capital stock. We currently anticipate we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

See Part III, Item 12 of this Annual Report on Form 10-K and Note ~~12,~~14, Stock-Based Compensation of the Notes to the Consolidated Financial Statements included herein for additional information required.

~~Stock Price Performance~~

The graph above compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s (“S&P”) 500 index and the Nasdaq Composite index. The graph assumes an initial investment of $100 in our common stock at the market close on August 27, 2020, which was the first day on which our common stock commenced trading on its own. Data for the S&P 500 and the Nasdaq Composite assume reinvestment of dividends. Total return equals stock price appreciation plus reinvestment of dividends. The stock price performance of the graph above is not necessarily indicative of future stock price performance.

Recent Sales of Unregistered Securities

~~During the three months ended December 31, 2021, pursuant to the merger agreement for the acquisition of GlowUp Digital Inc. (the "GlowUp Agreement"),~~On March 3, 2023, we issued as merger consideration to holders of GlowUp’s equity securities that were accredited investors an aggregate of 548,034 shares of our common stock based on a price of $23.4624 per share. The issuance of such shares was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering, as such issuance was pursuant to a private placement to accredited investors.

~~On December 3, 2021, we issued 39,741~~3,312 shares of our common stock to an independent contractor based on a price of $37.7444 per share as payment for services pursuant to the terms of a license, services and collaboration agreement. Such shares were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act, ~~of 1933, as amended,~~ as they were issued pursuant to a private placement to an accredited investor.

Use of Proceeds from Registered Offerings

On ~~June 9, 2021,~~September 13, 2022, the SEC declared effective our shelf registration statement on Form ~~S-1~~S-3 (File No. ~~333-256855) was declared effective by~~333-267273), pursuant to which we registered up to $250 million of primary issuances of certain securities listed in such registration statement. On January 24, 2023, we took down $16.25 million of such shelf registration for the ~~SEC for our public offering~~issuance of ~~common stock. At the closing~~6,357,341 shares of our ~~public offering on June 14, 2021 we sold 4,720,000 shares of~~ common stock atin a ~~public~~registered direct offering ~~price~~to a limited number of ~~$46.00 per share.~~investors. We received net proceeds of approximately $13.75 million from the ~~sale~~registered direct offering, after the payment of offering fees and expenses, with such net proceeds to be used for general corporate purposes, which could include the repayment of debt under our senior credit agreement. We also completed a rights offering in February 2023, pursuant to which we issued 19,561,050 shares of common ~~stock sold in the offering~~stock. We received net proceeds of approximately ~~$202.9~~$47.6 million ~~net~~from the rights offering, after the payment of ~~underwriting discounts~~offering fees and ~~commissions and offering~~ expenses. ~~There has been no material change in~~We used $45 million of the ~~planned use of~~net proceeds from the rights offering for repayment of debt under our ~~2021 public offering from that described in the final prospectus filed by us~~senior credit agreement, with the ~~SEC~~remainder for use on ~~June 11, 2021.~~other general corporate purposes.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

~~None.~~

~~Item 6. [Reserved]~~

The table below provides information regarding our share repurchases made by the Company during the fourth quarter of 2023. All repurchased shares became treasury shares of the Company.


Month of Fourth Quarter of 2023	Total Number of Shares Purchased	Average Price Paid Per Share(1)		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs(2)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(3)
October 1 through October 31	—	$	—	—	$	—
November 1 through November 30	810,463	0.49		810,463	49,589,252
December 1 through December 31	739,466	0.78		739,466	49,000,011
Total for Quarter	1,549,929	$	0.69	1,549,929	$	49,000,011

_________________

(1) Excludes commissions paid.

(2) Our 2022 Stock Repurchase Program (the “Repurchase Program”) was approved by the Board on May 14, 2022 and announced on May 17, 2022. The Repurchase Program authorizes the Company to purchase up to an aggregate of $50 million worth of its outstanding shares of common stock, and such authorization expires on May 31, 2024.

(3) Amounts represent the approximate dollar value of the maximum dollar value of shares that may yet be purchased under the Repurchase Program as of the end of the applicable period, inclusive of any applicable commission costs paid during the period.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Annual Report on Form 10-K. This section of this Annual Report on Form 10-K generally discusses ~~2021~~2023 and ~~2020~~2022 items and year-to-year comparisons between ~~2021~~2023 and ~~2020.~~2022. In addition to historical information, the following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results and the timing of events could differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed ~~below .~~in Item 1A. Risk Factors.

~~As used herein,~~

Unless otherwise indicated or the context otherwise requires, references to the “Company”, “PLBY”, “we”, “us”, “our”~~, the “Company”~~ and ~~“Playboy”~~other similar terms refer to ~~Playboy Enterprises, Inc. and its subsidiaries prior to the consummation of the Business Combination (defined below) and~~ PLBY Group, Inc. and its ~~subsidiaries following the consummation of the Business Combination.~~consolidated subsidiaries.

Business Overview

We are a large, global consumer lifestyle company marketing ~~its~~our brands through a wide range of direct-to-consumer products, licensing initiatives, and digital subscriptions and ~~content, and location-based entertainment.~~content. We reach ~~millions of~~ consumers worldwide with products across four key market categories: ~~Sexual Wellness, including lingerie and intimacy products;~~ Style and Apparel, including a variety of apparel and accessories ~~products for men and women; Gaming~~products; Digital Entertainment and Lifestyle, ~~such as digital gaming,~~including our creator platform, the Playboy Club, web and television-based entertainment, and our spirits and hospitality products; Sexual Wellness, including lingerie and ~~spirits;~~intimacy products; and Beauty and Grooming, including fragrance, skincare, grooming and ~~cosmetics for women and men.~~cosmetics.

We have three reportable segments: Direct-to-Consumer, Licensing ~~Direct-to-Consumer,~~ and Digital Subscriptions and Content. ~~The Licensing segment derives revenue from trademark licenses for third-party consumer products and location-based entertainment businesses. The~~Our Direct-to-Consumer segment derives its revenue from sales of consumer products sold directly to consumers through our own online channels ~~or through~~and retail stores. Our former Lovers and Yandy direct-to-consumer businesses were classified as discontinued operations in the condensed consolidated statements of operations for all periods presented (see Note 3, Assets and Liabilities Held for Sale and Discontinued Operations). Our Licensing segment derives revenue from trademark licenses for third-party ~~retailers. The~~consumer products, location-based entertainment businesses and online gaming. Our Digital Subscriptions and Content segment derives revenue from ~~the subscription of~~subscriptions to Playboy programming and content, which is distributed through various channels, including websites and domestic and international TV, ~~from trademark licenses for online gaming~~ and ~~from~~ sales of ~~tokenized digital art~~creator content offerings and ~~collectibles.~~

~~Merger with MCAC~~

~~On September 30, 2020,~~memberships through the Playboy Enterprises, Inc. (“Legacy Playboy”) entered into an agreement and plan of merger (“Merger Agreement”), with our predecessor, Mountain Crest Acquisition Corp, a publicly-traded special purpose acquisition company incorporated in Delaware (“MCAC”), MCAC Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of MCAC (“Merger Sub”), and Dr. Suying Liu, the Chief Executive Officer of MCAC. Pursuant to the Merger Agreement, at the closing of the transactions contemplated thereby, Merger Sub would merge with and into Legacy Playboy (the “Merger”) with Legacy Playboy surviving the Merger as a wholly-owned subsidiary of MCAC (the “Business Combination”). Under the Merger Agreement, MCAC acquired all of the outstanding shares of Legacy Playboy common stock for approximately $381.3 million in aggregate consideration, comprised of (i) 23,920,000 shares of MCAC common stock, basedClub on ~~a price of $10.00 per share, subject to adjustment, and (ii) the assumption of no more than $142.1 million of Legacy Playboy net debt (the “Net Debt Target”)~~playboy.com. The number of shares issued at closing was subject to adjustment at a rate of one share of MCAC common stock for each $10.00 increment that the Net Debt (as defined in the Merger Agreement) is greater than (in which case the number of shares would be reduced) or less than (in which case the number of shares would be increased) the Net Debt Target. The Business Combination closed on February 10, 2021.

~~Legacy Playboy’s options~~

Disposition of Businesses

See Note 3, Assets and ~~restricted stock units (“RSUs”) that were outstanding as of immediately prior to the closing of the Business Combination, but not the Pre-Closing Option granted to~~Liabilities Held for Sale and Discontinued Operations for information regarding our Chief Executive Officer in January 2021, were accelerated and fully vested. Each outstanding option was assumed by MCAC and automatically converted into an option to purchase such number of shares of our common stock equal to the product of (x) the merger consideration and (y) the option holder’s respective percentage of the merger consideration. All RSUs that were then outstanding were terminated and shall be subsequently paid, in settlement, in shares of common stock equal to the product of (x) the merger consideration, and (y) the terminated RSU holder’s respective percentage of the merger consideration.business dispositions.

In connection with the execution of the Merger Agreement, Legacy Playboy, Sunlight Global Investment LLC (“Sponsor”), and Dr. Suying Liu entered into a stock purchase agreement pursuant to which Legacy Playboy purchased 700,000 shares of MCAC’s common stock (the “Initial Shares”) from Sponsor. The Sponsor transferred the Initial Shares to Legacy Playboy upon the closing of the Merger and the Initial Shares were recorded as treasury stock on the consolidated balance sheet.

In connection with the Merger, MCAC also entered into subscription agreements (the “Subscription Agreements”) and registration rights agreements (the “PIPE Registration Rights Agreements”), each dated as of September 30, 2020, with certain institutional and accredited investors, pursuant to which, among other things, MCAC agreed to issue and sell, in a private placement immediately prior to the closing of the Business Combination, an aggregate of 5,000,000 shares of common stock for $10.00 per share (the “PIPE Investment”). The PIPE Investment was consummated substantially concurrently with the closing of the Business Combination for net proceeds of $46.8 million.

On February 10, 2021, the Business Combination was consummated and MCAC (i) issued an aggregate of 20,916,812 shares of its common stock to existing stockholders of Legacy Playboy, (ii) assumed Legacy Playboy options exercisable for an aggregate of 3,560,541 shares of MCAC common stock at a weighted-average exercise price of $5.61 and (iii) assumed the obligation to issue shares in respect of terminated Legacy Playboy RSUs for an aggregate of 2,045,634 shares of MCAC common stock to be settled one year following the closing date. In addition, in connection with the consummation of the Business Combination, MCAC was renamed “PLBY Group, Inc.” and started trading on the Nasdaq on February 11, 2021.

The Business Combination was accounted for as a reverse recapitalization whereby MCAC, who is the legal acquirer, was treated as the “acquired” company for financial reporting purposes and Legacy Playboy was treated as the accounting acquirer. This determination was primarily based on Legacy Playboy having a majority of the voting power of the post-combination company, Legacy Playboy’s senior management comprising substantially all of the senior management of the post-combination company, the relative size of Legacy Playboy compared to MCAC, and Legacy Playboy’s operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of a capital transaction in which Legacy Playboy was issued stock for the net assets of MCAC. The net assets of MCAC are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Legacy Playboy.

~~Acquisition of TLA~~

On March 1, 2021, we completed the acquisition of 100% of the equity of TLA Acquisition Corp ("TLA"). for $24.9 million in cash consideration. TLA is the parent company of the Lovers family of stores, a leading omni-channel online and brick and mortar sexual wellness chain, with 41 stores in five states (40 stores as of December 31, 2021). The primary drivers for the acquisition were to leverage TLA’s brick-and-mortar presence, e-commerce capabilities, attractive brand positioning and customer database. TLA’s operating results are consolidated with our results beginning on March 1, 2021. Therefore, the consolidated results of operations for the year ended December 31, 2021 may not be comparable to the same period in 2020.

~~Acquisition of Honey Birdette~~

On June 28, 2021, we entered into a Share Purchase Agreement to acquire Honey Birdette (Aust) Pty Limited ("Honey Birdette"), a company organized under the laws of Australia. Aggregate consideration for the acquisition of $327.7 million as of the Contract Date consisted of approximately $235.0 million in cash (based on an exchange rate of 0.7391 U.S. dollars per Australian dollars) and 2,155,849 shares of Company common stock, valued at $92.7 million as of the Contract Date, based on a Contract Date per share price of $43.02. Pursuant to the SPA, on August 9, 2021, the Company acquired all of the capital stock of Honey Birdette. The Closing Date per share price of $26.57 per share of Company common stock resulted in total consideration transferred of $288.8 million. On August 11, 2021, in connection with the acquisition of Honey Birdette, we amended the New Term Loan (as defined below) to borrow an additional $70.0 million. On August 19, 2021, an additional 4,412 shares of Company common stock were issued to the Honey Birdette sellers pursuant to the terms of a true-up under the SPA. The acquisition of the luxury lingerie brand Honey Birdette expands our brand portfolio with a new high-end franchise, and provides us with product design, sourcing and direct-to-consumer capabilities that we believe can be leveraged to accelerate the growth of our core apparel and sexual wellness businesses. Honey Birdette’s operating results are consolidated with our results beginning on August 9, 2021. Therefore, the consolidated results of operations for the year ended December 31, 2021 may not be comparable to the same period in 2020.

~~Acquisition of GlowUp Digital Inc~~.

On October 22, 2021, we completed the acquisition of GlowUp Digital Inc. ("GlowUp"), a Delaware corporation, pursuant to that certain Agreement and Plan of Merger, dated as of October 15, 2021, by and among the Company, PB Global Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of the Company, GlowUp and Michael Dow, solely in his capacity as representative of the holders of the outstanding shares of GlowUp’s common stock and of the holders of the outstanding Simple Agreements for Future Equity ("SAFEs") issued by GlowUp (the "GlowUp Merger"). At the effective time of the GlowUp Merger, the separate corporate existence of Merger Sub ceased, and GlowUp survived the GlowUp Merger as a wholly-owned subsidiary of the Company under the name “Centerfold Digital Inc” ("Centerfold").

At the closing of the GlowUp Merger, in accordance with the terms of the GlowUp Agreement, including certain adjustments to the GlowUp Merger consideration determined as of the closing, (i) holders of GlowUp’s equity securities that are accredited investors became entitled to receive, in the aggregate, 548,034 shares of the Company’s common stock, par value $0.0001 per share, and (ii) holders of GlowUp equity securities that are nonaccredited investors became entitled to receive, in the aggregate, $342,308 in cash. Pursuant to the GlowUp Agreement, the number of GlowUp Merger consideration shares was determined based on a price per share of $23.4624, which was the volume weighted average closing price per share of the Company’s common stock on the Nasdaq Global Market over the 10 consecutive trading day period ending on (and including) the trading day immediately preceding the execution of the GlowUp Agreement (i.e., October 14, 2021), representing aggregate closing consideration of approximately $13.2 million. In addition, $0.8 million in transaction expenses were paid by the Company on behalf of the sellers as of closing. Contingent consideration of up to an additional 664,311 shares of our stock and $0.4 million in cash in the aggregate may be issued or paid (as applicable) to GlowUp’s equity holders upon the release of the portion thereof held back in respect of indemnification obligations or the satisfaction of performance criteria, as applicable, pursuant to the terms of the GlowUp Agreement. The fair value of contingent consideration at closing was $18.1 million, ~~$9.2 million~~ of which was classified as equity and $8.9 million was recorded in current liabilities. The closing date per share price of the Company’s common stock of $27.60 resulted in total consideration transferred valued at $34.4 million at closing. The acquisition enabled the Company to acquire the technology foundation for the launch of Playboy’s new creator-led social content platform. Centerfold’s operating results are consolidated with our results beginning on October 22, 2021. Therefore, our consolidated results of operations for the year ended December 31, 2021 may not be comparable to the same period in 2020.

~~Debt Refinancing~~

On May 25, 2021, we entered into a Credit and Guaranty Agreement (the “New Credit Agreement”) with Acquiom Agency Services LLC, as the administrative agent and collateral agent. We obtained a $160 million senior secured term loan (the “New Term Loan”), which was fully funded at the closing of the transactions contemplated by the New Credit Agreement (the “Refinancing”). The New Term Loan has a final maturity date of May 25, 2027 and will accrue interest at LIBOR plus 5.75%, with a LIBOR floor of 0.50%. The Refinancing replaced and repaid in full all borrowings under our existing credit facility for which DBD Credit Funding LLC served as administrative agent and a lender. The existing credit facility consisted of a term loan (as amended, the “2014 Term Loan”) that was scheduled to expire on December 31, 2023.

We entered into Amendment No. 1 to the Credit and Guaranty Agreement, dated as of August 11, 2021 (the “First Amendment”), to the New Credit Agreement, by and among PLBY, Playboy Enterprises, Inc., the subsidiary guarantors party thereto, the lenders party thereto, and Acquiom Agency Services LLC, as the administrative agent and the collateral agent, to, among other things: (a) obtain a $70 million incremental term loan (the “Incremental Term Loan”), thereby increasing the aggregate principal amount of term loan indebtedness outstanding under the New Credit Agreement to $230 million, and (b) amend the terms of the New Credit Agreement to, among other things, permit Honey Birdette and certain of its subsidiaries to guaranty the obligations under the New Credit Agreement.

~~Aircraft Term Loan~~

~~In May 2021, we borrowed $9.0 million under a five-year~~ term loan maturing in May 2026 to fund the purchase of an aircraft. The stated interest rate was 6.25% as of December 31, 2021. The Aircraft Term Loan requires monthly amortization payments of approximately $0.1 million, commencing on July 1, 2021.

~~PublicOffering~~

In June 2021, we completed a public offering in which 4,720,000 shares of our common stock were sold at a price of $46 per share. The underwriters were also granted an option to purchase up to an additional 708,000 shares of our common stock from us at the public offering price, less underwriting discounts and commissions. Such option expired unexercised. We incurred approximately $13.2 million of underwriting commissions and $1.0 million of public offering related fees, which were netted against the proceeds. The net proceeds received from the public offering were $202.9 million.

Key Factors and Trends Affecting Our Business

We believe that our performance and future success depends on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report on Form 10-K titled “Risk Factors.”

~~Expanding~~Shifting to a Capital-Light Business Model

In pursuit of a commercial strategy that relies on a more capital-light business model focused on revenue streams with higher margin, lower working capital requirements and higher growth potential, we continue to review the ~~Consumer Products Business through Owned~~cost structure of our businesses and ~~Operated Products~~additional cost rationalization. We significantly restructured our technology expenses in the first and ~~Channels~~fourth quarters of 2023, and cost-excessive and under-utilized software packages were either terminated or not renewed upon expiration of applicable agreements. This resulted in a restructuring charge of $5.1 million for the year ended December 31, 2023, excluding $0.4 million of costs related to discontinued operations. In addition, we reduced headcount within the Playboy Direct-to-Consumer business and our corporate office during fiscal 2023, resulting in a severance charge of $3.5 million and a net increase of $0.1 million of stock-based compensation expenses, which was comprised of a $2.4 million reduction of stock-based compensation expenses due to forfeitures of equity grants during the third quarter of 2023, offset by additional stock-based compensation expense of $2.3 million due to acceleration of certain equity awards during the second quarter of 2023.

We are accelerating our growth in company-owned and branded consumer products in attractive and expanding markets in which we have a proven history of brand affinity and consumer spend. Additionally, we have acquired and launched our own direct-to-consumer online sales channels, ~~yandy.com, honeybirdette.com, loversstores.com~~ ~~and~~ ~~pleasureforall.com, in addition to~~ ~~playboy.com, to further accelerate the sales of these products. However, our new product and new distribution strategies are in their early stages and will take time to fully develop.~~

4241

~~Reduced Reliance on~~ China Licensing Revenues

~~We have enjoyed substantial success in licensing our trademarks in~~

Our revenues from China ~~where we are a leading men’s apparel brand, and where licensing revenues have consistently grown year-over-year. However,~~(including Hong Kong) as a ~~result of this success, the~~ percentage ~~of total net revenue attributable to China licensing had become 48%~~ of our total revenues, excluding revenues from discontinued operations, were 20% and 23% for the years ended December 31, 2023 and 2022, respectively. Due to challenging economic conditions in China, collections from certain of our Chinese licensees slowed significantly, and we had to renegotiate terms of, or terminate, certain licenses. In October 2023, we terminated licensing agreements with certain Chinese licensees due to ongoing, uncured breaches of their licenses, which comprised $152.2 million of unrecognized Licensing revenue byunder our long-term contracts as of the ~~end of 2019. With the acquisition of Yandy~~termination date. Revenue recognized in ~~December 2019, TLA in March 2021 and Honey Birdette in August 2021, and the ramp up of North American consumer product sales,~~connection with such contracts that ~~percentage reduced to 17.7% for~~were subsequently terminated was $27.1 million during the year ended December 31, ~~2021, despite higher China licensing revenues,~~2023. Future contract modifications and ~~we expect it will continue to become a smaller percentage of total net~~collectability issues could further impact the revenue ~~in the future as North American consumer product sales, largely through direct-to-consumer channels, accelerate.~~

~~Seasonality of Our Consumer Product Sales Results in Stronger Fourth Quarter Revenues~~

~~A combination of online Halloween costume sales and holiday sales toward~~recognized against our ongoing contract assets. At the end of the ~~year typically result~~first quarter of 2023, we entered into the China JV with Charactopia Licensing Limited, the brand management unit of Fung Group, which operates the Playboy consumer products business in ~~higher revenues~~mainland China, Hong Kong and ~~profit~~Macau. The China JV is intended to reinvigorate our China-market Playboy apparel business through expanding Playboy’s reach and online storefronts by adding new licensees.

Impairments

Our indefinite-lived intangible assets, including trademarks and goodwill, that are not amortized, and the carrying amounts of our long-lived assets, including property and equipment, stores, acquired intangible assets and right-of-use operating lease assets, may continue to be subject to impairment testing and impairments which reduce their value on our balance sheet. We periodically review for impairments whenever events or changes in our circumstances indicate that such assessment would be appropriate. We experienced further declines in revenue and profitability (including due to discontinued operations) during the year ended December 31, 2023, which caused us to test the recoverability of our indefinite-lived and long-lived assets and resulted in the impairments set forth in our consolidated financial statements. If we continue to experience declines in revenue or profitability, which could occur upon further declines in consumer demand or additional discontinued operations, we may record further non-cash asset impairment charges as of the applicable impairment testing date.

Seasonality of Revenues

While we receive revenue throughout the year, our businesses have experienced, and may continue to experience, seasonality. For example, our licensing business historically experienced higher receipts in its first and third fiscal quarters due to the licensing fee structure in our licensing agreements, which typically require advance payment of such fees during those quarters, but such payments can be subject to variations, extensions or delays. Our direct-to-consumer business has historically experienced higher sales in the fourth quarter ~~particularly at Yandy. Historically, October sales~~due to the U.S. holiday season, but changing market conditions and demand could affect such sales. Historical seasonality of ~~costumes have resulted in significantly higher~~ revenues ~~than in other months but are also coming under~~may be subject to change as increasing pressure from competition and changes in ~~this category. We expect investment~~consumer trends and ~~growth in expanding the~~economic conditions impact our licensees and consumers. Transitioning to a capital-light business model with a more streamlined consumer products ~~category and distribution will likely accelerate~~business may further impact the ~~strong fourth quarter~~ seasonality of ~~the~~our business in the future.

~~Attractive Merger and Acquisition Opportunities are Increasing~~

Building on our successful acquisition and integration of Yandy in late 2019 and TLA in March of 2021, we continue to identify and assess potentially advantageous merger, acquisition and investment opportunities. On August 9, 2021, pursuant to the SPA, we acquired Honey Birdette. Honey Birdette is a fast-growing luxury lifestyle brand, which we believe will help accelerate our high-end brand growth in new regions. On October 22, 2021, we acquired GlowUp Digital Inc. We will continue focusing on potential tuck-in opportunities to complement our organic growth with potential for larger, strategic mergers and acquisitions initiatives over the long-term. We believe our mergers and acquisitions strategy will be supported by our operating cash flow and balance sheet flexibility.

~~COVID-19~~

In March 2020, COVID-19 was declared a pandemic by the World Health Organization. Since that time, we have focused on protecting our employees, customers and vendors to minimize potential disruptions while managing through this pandemic, including taking the following actions during 2020 and 2021:

•~~Temporarily closed our offices in Los Angeles, CA and Phoenix, AZ;~~

•~~Implemented social distancing measures, required the wearing of masks and increased sanitization practices in our warehousing and fulfillment facilities, Lovers retail stores and corporate offices;~~

•~~Established ongoing work at home accommodations for all office employees, and limited company-related travel;~~

•Amended our credit facility to defer amortization payments for the quarters ended June 30, 2020 and September 30, 2020, to 2021 and eliminated excess cash flow (principal) payments during those two quarters;

•~~Deferred payroll taxes to 2021/2022 under the Coronavirus Aid, Relief and Economic Security Act of 2020;~~

•~~Offered curbside pickup at our Lovers stores;~~

•~~Temporarily closed certain Honey Birdette retail stores in Australia subsequent to its acquisition; and~~

•~~Required employees at our offices in Los Angeles, CA to be vaccinated before returning to the office.~~

Nonetheless, the COVID-19 pandemic continues to disrupt and delay global supply chains, affect production and sales across a range of industries and result in legal restrictions requiring businesses to close and consumers to stay at home for days-to-months at a time. These disruptions have impacted our business, including by:

•~~Slowing product development processes and the launch of new products;~~

•~~Causing certain products sold by Yandy to be out-of-stock;~~

•~~Hindering new licensing and collaboration deals;~~

•~~Temporarily closing retail stores of Honey Birdette and certain of our licensees; and~~

•~~Closing the London Playboy Club and certain other Playboy-branded live gaming operations.~~

~~As a result of such disruptions, licensing revenues from certain gaming and retail licensees declined in 2020 and 2021, as compared to royalties from such sources during pre-pandemic periods.~~

As of the date of this Annual Report, our business as a whole has not suffered any material adverse consequences to date from the COVID-19 pandemic, as negative impacts have thus far been offset by an increase in online direct-to-consumer sales and higher royalties from licensing collaborations in the United States.

The extent of the impact of COVID-19 on our future operational and financial performance will depend on certain developments, including the further duration and spread of the outbreak and its impact on employees and vendors, all of which are uncertain and cannot be predicted. As of the date of these consolidated financial statements, the full extent to which COVID-19 may impact our future financial condition or results of operations is uncertain.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of the business are revenues, salaries and benefits, and selling and administrative expenses. To help assess performance with these key indicators, we use Adjusted EBITDA as a non-GAAP financial measure. We believe this non-GAAP measure provides useful information to investors and expanded insight to measure revenue and cost performance as a supplement to the GAAP consolidated financial statements. See the “EBITDA and Adjusted EBITDA” section below for reconciliations of Adjusted EBITDA to net loss, the closest GAAP measure.

Components of Results of Operations

Revenues

We generate revenue from sales of consumer products sold through our retail stores or online direct-to-customer, trademark licenses for third-party consumer products, online gaming and location-based entertainment businesses, ~~sales of our tokenized digital art and collectibles,~~ and sales of creator offerings to consumers on ~~centerfold.com,~~ our creator-led platform ~~launched in December 2021,~~ on playboy.com, in addition to ~~sales of consumer products sold through third-party retailers or online direct-to-customer and from the subscription of~~subscriptions to our programming, which is distributed through various channels, including websites and domestic and international television.

Consumer Products

Revenue from sales of online apparel and accessories, including sales through third-party sellers, is recognized upon delivery of the goods to the customer. Revenue from sales of apparel at our retail stores is recognized at the time of transaction. Revenue is recognized net of incentives and estimated returns. We periodically offer promotional incentives to customers, which include basket promotional code discounts and other credits, which are recorded as a reduction of revenue.

Trademark Licensing

We license trademarks under multi-year arrangements to consumer products, online gaming and location-based entertainment businesses. Typically, the initial contract term ranges between one to ten years. Renewals are separately negotiated through amendments. Under these arrangements, we generally receive an annual non-refundable minimum guarantee that is recoupable against a sales-based royalty generated during the license year. Earned royalties received in excess of the minimum guarantee (“Excess Royalties”) are typically payable quarterly. We recognize revenue for the total minimum guarantee specified in the agreement on a straight-line basis over the term of the agreement and ~~recognizes~~recognize Excess Royalties only when the annual minimum guarantee is exceeded. Generally, Excess Royalties are recognized when they are earned. In the event that the collection of any royalty becomes materially uncertain or unlikely, we recognize revenue from our licensees on a cash basis.

~~Consumer Products~~

Revenue from sales of online apparel and accessories, including sales through third-party sellers, is recognized upon delivery of the goods to the customer. Revenue is recognized net of incentives and estimated returns. We periodically offer promotional incentives to customers, which include basket promotional code discounts and other credits, which are recorded as a reduction of revenue.

~~Magazine and~~ Digital Subscriptions

Digital subscription revenue is derived from subscription sales of playboyplus.com and playboy.tv, which are online content platforms. We receive fixed consideration shortly before the start of the subscription periods from these contracts, which are primarily sold in monthly, annual, or lifetime subscriptions. Revenues from lifetime subscriptions are recognized ratably over a five-year period, representing the estimated period during which the customer accesses the platforms. Revenues from ~~Playboy~~ ~~magazine and~~ digital subscriptions are recognized ratably over the subscription period. ~~We discontinued publishing~~ ~~Playboy~~ ~~magazine in the first quarter of 2020.~~

Revenues generated from the sales of creator offerings to consumers via our creator platform on ~~centerfold.com~~playboy.com~~, our creator-led platform launched in December 2021,~~ are recognized at the point in time when the sale is processed. Revenues generated from ~~centerfold.com~~subscriptions to our creator platform are recognized ratably over the subscription period.

~~Revenue from sales of our tokenized digital art and collectibles is recognized at the point in time when the sale is processed.~~

TV and Cable Programming

We license programming content to certain cable television operators and direct-to-home satellite television operators who pay royalties based on monthly subscriber counts and pay-per-view and video-on-demand buys for the right to distribute our programming under the terms of affiliation agreements. Royalties are generally collected monthly and recognized as revenue as earned.

Cost of Sales

Cost of sales primarily consist of merchandise costs, warehousing and fulfillment costs, agency fees, website expenses, digital platform expenses, marketplace traffic acquisition costs, credit card processing fees, personnel and ~~editorial content~~affiliate costs, ~~for~~ ~~Playboy~~ ~~magazine (through March 31, 2020), websites, and Playboy Television, branding events and paper, printing, postage and freight~~including stock-based compensation, costs associated with ~~Playboy~~ ~~magazine (through March 31, 2020).~~branding events, customer shipping and handling expenses, fulfillment activity costs and freight-in expenses.

Selling and Administrative Expenses

Selling and administrative expenses primarily consist of corporate office and retail store occupancy costs, personnel costs, including stock-based compensation, and contractor fees for accounting/finance, legal, human resources, information technology and other administrative functions, general marketing and promotional activities and insurance.

~~Related Party Expenses~~Contingent Consideration Fair Value Remeasurement Gain

~~Related party expenses~~Contingent consideration fair value remeasurement gain consists of non-cash changes in the fair value of contingent consideration recorded in conjunction with the acquisitions of GlowUp Digital Inc. (“GlowUp”) and Honey Birdette.

Impairments

Impairments consist of ~~management fees paid to an affiliate~~the impairments of ~~one~~certain licensing contracts, Playboy-branded trademarks, trade names and goodwill and certain digital assets.

Gain on Sale of the Aircraft

Gain on sale of the aircraft represents the gain on the sale of our ~~stockholders for management and consulting services.~~former corporate aircraft (the “Aircraft”).

Other Operating ~~Expenses~~(Expense) Income, Net

Other operating ~~expenses~~(expense) income, net primarily ~~consist~~consists of ~~impairment~~gains on the sale of certain digital assets ~~recognized in~~and the ~~fourth quarter~~loss resulting from the settlement of ~~2021.~~a secured promissory note.

Nonoperating (Expense) Income

~~Investment Income~~

~~Investment income primarily consists of interest received on our cash and cash equivalents.~~

Interest expense

Interest expense consists of interest on our long-term debt and the amortization of deferred financing ~~costs.~~costs and debt discount.

~~Loss~~Gain (Loss) on Extinguishment of Debt

~~On May 25, 2021, we completed~~In September 2022, in connection with the sale of the Aircraft, a ~~refinancing~~related term loan obtained in connection with our acquisition of ~~our term loan. As~~the Aircraft (the “Aircraft Term Loan”) was repaid in full and all related liens discharged. A loss on early extinguishment of such debt, which was comprised of the write-off of certain deferred financing costs and a ~~result, in~~prepayment penalty, was $0.2 million.

In the ~~second~~first quarter of ~~2021,~~2023, we recorded a loss on partial extinguishment of debt in the amount of ~~approximately $1.2~~$1.8 million ~~which is comprised of $1.0 million of fees expensed as incurred in connection with the refinancing, as well as~~related to the write-off ~~of $0.2 million~~ of unamortized debt discount and deferred financing ~~fees~~costs as a result of ~~such refinancing.~~$45 million in prepayments of our debt pursuant to amendments of our senior secured credit agreement in December 2022 and February 2023. In the second quarter of 2023, we recorded a gain on partial extinguishment of debt in the amount of $8.0 million upon the amendment and restatement of our senior secured credit agreement (the “A&R Credit Agreement”). See Liquidity and Capital Resources section for definitions and additional details.

Fair Value Remeasurement Gain

Fair value remeasurement gain consists of changes to the fair value of mandatorily redeemable preferred stock liability related to its remeasurement.

Other Income (Expense), Net

Other income (expense), net consists primarily of other miscellaneous nonoperating items, such as bank charges and foreign exchange gains or losses as well as non-recurring transaction fees.

~~The provision for~~Benefit from Income Taxes

Benefit from income taxes consists of an estimate for U.S. federal, state, and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Due to cumulative losses, we maintain a valuation allowance against ~~the definite-lived~~our U.S. federal and state deferred tax assets, as well as Australia, U.K. and China deferred tax assets.

4544

Results of Operations

Comparison of Fiscal Years Ended December 31, ~~2021~~2023 and ~~2020~~2022

The following table summarizes key components of ~~Playboy’s~~our results of operations for the periods indicated (in thousands):




		Year Ended December 31,
		2021		2020		$ Change		% Change		2023				2022			$ Change				% Change
Net revenues	Net revenues	$	246,586	$	147,662	$	98,924	67	%	Net revenues	$	142,950	$		$	185,536		$	(42,586)			(23)	%
Costs and expenses:	Costs and expenses:
Cost of sales	Cost of sales	(114,161)		(74,384)		(39,777)		53	%
Cost of sales
Cost of sales
Selling and administrative expenses	Selling and administrative expenses	(200,063)		(58,659)		(141,404)		241	%
Related party expenses		(250)		(1,007)		757		(75)	%
Other operating expenses		(964)		—		(964)		*
Total costs and expenses		(315,438)		(134,050)		(181,388)		135	%
Operating (loss) income		(68,852)		13,612		(82,464)		*
Impairments
Contingent consideration fair value remeasurement gain
Gain on sale of the aircraft
Other operating (expense) income, net
Total operating expense
Operating loss
Nonoperating (expense) income:	Nonoperating (expense) income:
Interest expense	Interest expense	(13,312)		(13,463)		151		(1)	%
Loss on extinguishment of debt		(1,217)		—		(1,217)		*
Gain from settlement of convertible note		700		1,454		(754)		(52)	%
Other income, net		2,226		198		2,028		*
Interest expense
Interest expense
Gain (loss) on extinguishment of debt
Fair value remeasurement gain
Other income (expense), net
Total nonoperating expense	Total nonoperating expense	(11,603)		(11,811)		208		(2)	%
(Loss) income before income taxes		(80,455)		1,801		(82,256)		*
Benefit (expense) from income taxes		2,779		(7,072)		9,851		(139)	%
Loss from continuing operations before income taxes
Benefit from income taxes
Net loss from continuing operations
Income (loss) from discontinued operations, net of tax
Net loss	Net loss	(77,676)		(5,271)		(72,405)		*
Net loss attributable to PLBY Group, Inc.	Net loss attributable to PLBY Group, Inc.	$	(77,676)	$	(5,271)	$	(72,405)	*		Net loss attributable to PLBY Group, Inc.	$	(180,418)	$		$	(277,704)	$			$	97,286			(35)	%


Delaware						37-1958714
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


Large accelerated filer	☒☐	Accelerated filer	☐☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐


			Page
Cautionary Note Regarding Forward-Looking Statements

Part I			5
Item 1. Business			5
Item 1A. Risk Factors			1110
Item 1B. Unresolved Staff Comments			3536
Item 1C. Cybersecurity			36
Item 2. Properties			3537
Item 3. Legal Proceedings			3637
Item 4. Mine Safety Disclosures			3738

Part II			3839
Item 5. Market for ~~Registrant's~~Registrant ’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			3839
Item 6 . 6. [Reserved]			3940
Item 7. ~~Management's~~Management ’s Discussion and Analysis of Financial Condition and Results of Operations			3940
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			5756
Item 8. Financial Statements and Supplementary Data			5957
Index to Consolidated Financial Statements			59
~~Report of Independent Registered Public Accounting Firm~~ ~~(BDO USA, LLP)~~			6057
Report of Independent Registered Public Accounting Firm ~~(Prager Metis CPAs LLP)~~(BDO USA, P.C.)			6258
Consolidated Statements of Operations			6360
Consolidated Statements of Comprehensive Loss			6461
Consolidated Balance Sheets			6562
Consolidated Statements of Stockholders’ Equity			6663
Consolidated Statements of Cash Flows			6764
Notes to the Consolidated Financial Statements			6866
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures			103
Item 9A. Controls and Procedures			103
Item 9B. Other Information			107
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			107

Part III			108
Item 10. Directors, Executive Officers and Corporate Governance			108
Item 11. Executive Compensation			108
Item 12. Security Ownership of Certain Beneficial ~~Owner~~s Owners and Management and Related Stockholder Matters			108
Item 13. Certain Relationships and Related Transactions, and Director Independence			108
Item 14. Principal ~~Accounting~~Accountant Fees and Services			108

Part IV			109
Item 15. Exhibits, Financial Statement Schedules			109
Item 16. Form 10-K Summary			~~112~~110

Signatures			~~113~~111


	Year Ended December 31,
	2023		2022
Net revenues	100	%	100	%
Costs and expenses:
Cost of sales	(38.3)		(44.7)
Selling and administrative expenses	(86.4)		(81.1)
Impairments	(108.3)		(152.8)
Contingent consideration fair value remeasurement gain	0.3		15.7
Gain on sale of the aircraft	—		3.1
Other operating (expense) income, net	(0.4)		0.3
Total operating expense	(233.1)		(259.5)
Operating loss	(133.1)		(159.5)
Nonoperating (expense) income:
Interest expense	(16.3)		(9.6)
Gain (loss) on extinguishment of debt	4.3		(0.7)
Fair value remeasurement gain	4.6		5.1
Other income (expense), net	0.6		(0.4)
Total nonoperating expense	(6.8)		(5.6)
Loss from continuing operations before income taxes	(139.9)		(165.1)
Benefit from income taxes	9.6		30.0
Net loss from continuing operations	(130.3)		(135.1)
Income (loss) from discontinued operations, net of tax	4.2		(14.6)
Net loss	(126.1)		(149.7)
Net loss attributable to PLBY Group, Inc.	(126.1)	%	(149.7)	%


		Year Ended December 31,					Year Ended December 31,
		2021		2020			2023	2022
Net loss	Net loss	$	(77,676)	$	(5,271)
Adjusted for:	Adjusted for:
(Income) loss from discontinued operations, net of tax
(Income) loss from discontinued operations, net of tax
(Income) loss from discontinued operations, net of tax
Net loss from continuing operations
Adjusted for:
Interest expense	Interest expense	13,312		13,463
Loss on extinguishment of debt		1,217		—
Benefit (expense) from income taxes		(2,779)		7,072
Interest expense
Interest expense
(Gain) loss on extinguishment of debt
Benefit from income taxes
Depreciation and amortization	Depreciation and amortization	7,291		2,259
EBITDA	EBITDA	(58,635)		17,523
Adjusted for:	Adjusted for:					Adjusted for:
Stock-based compensation	Stock-based compensation	58,446		2,988
Reduction in force expenses		—		3,165
Impairments
Contingent consideration fair value remeasurement
Mandatorily redeemable preferred stock fair value remeasurement
Recognition of prepaid royalty guarantees
Write-down of capitalized software
Inventory reserve charges
Gain on sale of the Aircraft
Adjustments	Adjustments	9,413		1,880
Amortization of inventory step-up		8,089		3,230
Contingent consideration fair value remeasurement		2,369		—
Digital assets impairment		964		—
Management fees and expenses		250		1,007
Nonoperating expenses		—		(1,299)
Acquisition related costs		11,549		(109)
Adjusted EBITDA	Adjusted EBITDA	$	32,445	$	28,385


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			Page
Audited Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm (BDO USA, ~~LLP;~~P.C.; Los Angeles, California; PCAOB ID: # 243)			6058
~~Report~~ ~~of Independent Registered Public Accounting Firm~~ ~~(Prager Metis CPAs LLP; El Segundo, California; PCAOB ID: # 4054)~~			62

Financial Statements:
Consolidated Statements of Operations			6360
Consolidated Statements of Comprehensive Loss			6461
Consolidated Balance Sheets			6562
Consolidated Statements of Stockholders’ Equity			6663
Consolidated Statements of Cash Flows			6764
Notes to the Consolidated Financial Statements			6866


	December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	28,120	$	31,815
Restricted cash	1,587		—
Receivables, net of allowance for credit losses	7,496		14,214
Inventories, net	13,000		20,612
Prepaid expenses and other current assets	7,802		16,276
Assets held for sale	11,692		37,801
Total current assets	69,697		120,718
Restricted cash	1,969		3,809
Property and equipment, net	13,514		13,804
Operating right-of-use assets	25,284		28,082
Goodwill	54,899		123,217
Other intangible assets, net	157,901		236,137
Contract assets, net of current portion	8,716		13,680
Other noncurrent assets	2,274		15,137
Total assets	$	334,254	$	554,584
Liabilities, Redeemable Noncontrolling Interest, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	14,500	$	13,630
Accrued agency fees and commissions	901		7,785
Deferred revenues, current portion	9,205		10,480
Long-term debt, current portion	304		2,050
Operating lease liabilities, current portion	6,955		6,278
Other current liabilities and accrued expenses	27,066		25,566
Liabilities held for sale	—		27,126
Total current liabilities	58,931		92,915
Deferred revenues, net of current portion	4,641		21,406
Long-term debt, net of current portion	190,115		191,125
Deferred tax liabilities, net	9,304		27,414
Operating lease liabilities, net of current portion	24,621		26,695
Mandatorily redeemable preferred stock, at fair value	—		39,099
Other noncurrent liabilities	957		886
Total liabilities	288,569		399,540
Commitments and contingencies (Note 15)
Redeemable noncontrolling interest	(208)		(208)
Stockholders’ equity:
Preferred stock, $0.0001 par value per share, 5,000,000 shares authorized, 50,000 shares designated Series A preferred stock, of which 0 shares were issued and outstanding as of December 31, 2023; 50,000 shares were issued and outstanding as of December 31, 2022	—		—
Common stock, $0.0001 par value; 150,000,000 shares authorized at December 31, 2023 and 2022; 74,783,683 shares issued and 72,533,754 shares outstanding at December 31, 2023; 47,737,699 shares issued and 47,037,699 shares outstanding at December 31, 2022	7		5
Treasury stock, at cost: 2,249,929 shares and 700,000 shares at December 31, 2023 and 2022, respectively	(5,445)		(4,445)
Additional paid-in capital	690,055		617,233
Accumulated other comprehensive loss	(24,910)		(24,145)
Accumulated deficit	(613,814)		(433,396)
Total stockholders’ equity	45,893		155,252
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity	$	334,254	$	554,584


	Series A Preferred Stock			Common stock
	Shares	Amount		Shares	Amount		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at December 31, 2021	—	$	—	42,296,121	$	4	$	(4,445)	$	586,349	$	(3,725)	$	(155,692)	$	422,491
Shares issued in connection with options exercise, net exercised	—	—		495,052	—		—		1,924		—		—		1,924
Shares issued in connection with equity incentive plans	—	—		3,759,122	1		—		—		—		—		1
Shares issued pursuant to a license, services and collaboration agreement	—	—		30,911	—		—		—		—		—		—
Shares issued in connection with asset purchase	—	—		103,570	—		—		1,333		—		—		1,333
Shares issued in connection with preferred shares agreement	50,000	—		—	—		—		—		—		—		—
Shares issued in connection with the settlement of the performance holdback contingent consideration relating to the acquisition of GlowUp	—	—		352,923	—		—		260		—		—		260
Stock-based compensation expense and vesting of restricted stock units	—	—		—	—		—		22,553		—		—		22,553
Reclassification of the fair value of the lock-up shares contingent consideration relating to the acquisition of Honey Birdette	—	—		—	—		—		4,814		—		—		4,814
Other comprehensive loss	—	—		—	—		—		—		(20,420)		—		(20,420)
Net loss	—	—		—	—		—		—		—		(277,704)		(277,704)
Balance at December 31, 2022	50,000	$	—	47,037,699	$	5	$	(4,445)	$	617,233	$	(24,145)	$	(433,396)	$	155,252
Issuance of common stock in rights offering	—	—		19,561,050	2		—		47,600		—		—		47,602
Issuance of common stock in registered direct offering	—	—		6,357,341	—		—		13,890		—		—		13,890
Exchange of mandatorily redeemable preferred shares	(50,000)	—		—	—		—		—		—		—		—
Shares issued in connection with equity incentive plans	—	—		1,124,281	—		—		—		—		—		—
Shares issued pursuant to a license, services and collaboration agreement	—	—		3,312	—		—		—		—		—		—
Stock-based compensation expense and vesting of restricted stock units	—	—		—	—		—		11,332		—		—		11,332
Shares repurchased pursuant to the 2022 Stock Repurchase Program	—	—		(1,549,929)	—		(1,000)		—		—		—		(1,000)
Other comprehensive loss	—	—		—	—		—		—		(765)		—		(765)
Net loss	—	—		—	—		—		—		—		(180,418)		(180,418)
Balance at December 31, 2023	—	$	—	72,533,754	$	7	$	(5,445)	$	690,055	$	(24,910)	$	(613,814)	$	45,893


PLBY Group, Inc.
Consolidated Statements of Cash Flows (continued)
(in thousands)
	Year Ended December 31,
	2023		2022
Supplemental Disclosures
Cash (refunded) paid for income taxes	$	(1,753)	$	5,327
Cash paid for interest	$	17,258	$	15,546
Supplemental Disclosure of Non-cash Activities
Capitalized stock-based compensation expense	$	1,735	$	2,014
Purchases of property and equipment	$	596	$	379
Reclassification of the fair value of the lock-up shares contingent consideration relating to the acquisition of Honey Birdette	$	—	$	4,814
Right-of-use assets in exchange for lease liabilities - continuing operations	$	4,540	$	6,209
Right-of-use assets in exchange for lease liabilities - discontinued operations	$	1,018	$	5,750
Shares issued pursuant to a license, services and collaboration agreement	$	—	$	237
Shares issued in connection with asset purchase	$	—	$	1,333
Shares issued in connection with the settlement of the performance holdback contingent consideration relating to the acquisition of GlowUp	$	—	$	260


~~Cash - trust account and cash~~	$	~~54,044~~
~~Cash - PIPE Investment~~	~~46,844~~
~~Less: transaction costs paid in 2021~~	~~(977)~~
~~Net contributions from Merger and PIPE Investment~~	~~99,911~~
~~Less: transaction costs paid in 2020~~	~~(292)~~
~~Merger and PIPE Investment~~	$	~~99,619~~


Customer	December 31, 2023	December 31, 2022
Customer A	*	31	%
_________________ *Indicates the receivables for the customer did not exceed 10% of the Company’s total as of December 31, 2023.


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Liabilities
PSARs liability	$	—	$	—	$	(858)	$	(858)


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Liabilities
Contingent consideration liability	$	—	$	—	$	(835)	$	(835)
Mandatorily redeemable preferred stock	—		—		(39,099)		(39,099)
Total liabilities	$	—	$	—	$	(39,934)	$	(39,934)


	Year Ended December 31,
	2023		2022		$ Change		% Change
Net revenues
Direct-to-consumer	$	77,984	$	105,177	$	(27,193)	(26)	%
Licensing	44,292		60,861		(16,569)		(27)
Digital subscriptions and content	20,670		18,709		1,961		10
All other	4		789		(785)		(99)
Total	$	142,950	$	185,536	$	(42,586)	(23)	%

Operating (loss) income
Direct-to-consumer	$	(98,886)	$	(177,388)	$	78,502	(44)	%
Licensing	(46,898)		(73,979)		27,081		(37)
Digital subscriptions and content	(2,440)		(13,016)		10,576		(81)
Corporate	(42,132)		(32,428)		(9,704)		30
All other	(13)		711		(724)		(102)
Total	$	(190,369)	$	(296,100)	$	105,731	(36)	%


	Year Ended December 31,
	2023		2022		$ Change		% Change
Net cash provided by (used in):
Operating activities	$	(42,788)	$	(64,042)	$	21,254	(33)	%
Investing activities	13,060		9,377		3,683		39
Financing activities	26,184		11,559		14,625		127


Total Fair Value		Valuation Technique	Unobservable Inputs	Rate
$	32,594	Binomial lattice model	Preferred credit spread (annual)	18	%
			Yield volatility	50	%
			Dividend settlement	Paid-in-kind (PIK)


	December 31, 2021
~~Beginning balance~~	$	~~858~~
~~Issuance of contingent consideration in connection with our acquisitions~~	~~34,390~~
~~PSARs liability settlement~~	~~(846)~~
~~Change in fair value and other~~	~~2,228~~
~~Ending balance~~	$	~~36,630~~


	Contingent Consideration		Mandatorily Redeemable Preferred Stock Liability		Total
Balance at December 31, 2022	$	835	$	39,099	$	39,934
Change in fair value and other	(436)		(6,505)		(6,941)
Mandatorily redeemable preferred stock	—		(32,594)		(32,594)
Balance at December 31, 2023	$	399	$	—	$	399


	Fair Value		Valuation Technique	Unobservable Inputs	Range
October 31, 2023
Indefinite-lived trademarks	$	145,087	Multi-period excess earnings method	Revenue growth rate	(39.2)% - 52.4%
				Discount rate	17.0%
			Relief from royalty	Revenue growth rate	(9.9)% - 233.0%
				Royalty rate	7.0%
				Discount rate	17.0% - 30.0%
June 30, 2023
Indefinite-lived trademarks	150,650		Multi-period excess earnings method	Revenue growth rate	(0.6)% - 52.6%
				Discount rate	16.0%
			Relief from royalty	Revenue growth rate	(34.5)% - 200.0%
				Royalty rate	7.0%
				Discount rate	16.0% - 28.0%
Trade names	12,550		Relief from royalty	Revenue growth rate	3.0% - 10.0%
				Royalty rate	3.0%
				Discount rate	17.0%
Goodwill	21,176		Discounted cash flow	Revenue growth rate	3.0% - 10.0%
				Discount rate	14.0%
September 1, 2022
Indefinite-lived trademarks	216,185		Multi-period excess earnings method	Revenue growth rate	2.5% - 12.3%
				Discount rate	18.0%
			Relief from royalty	Revenue growth rate	(5.0)% - 10.0%
				Royalty rate	2.0% - 7.0%
				Discount rate	18.0%
Trade names	20,032		Relief from royalty	Revenue growth rate	2.5% - 10.0%
				Royalty rate	0.3% - 4.0%
				Discount rate	19.0% - 35.0%
Goodwill	90,498		Discounted cash flow	Revenue growth rate	3.0% - 10.0%
				Discount rate	16.0%


	Contract Liabilities, Net
Balance at December, 31, 2021	$	(35,070)
Revenues recognized that were included in gross contract liabilities at December, 31, 2021	54,840
Contract assets reclassified to accounts receivable in 2022	(28,947)
Cash received in advance since prior year and remains in net contract liabilities at December, 31, 2022	(5,946)
Contract modifications and terminations in 2022	(524)
Balance at December, 31, 2022	$	(15,647)
Revenues recognized that were included in gross contract liabilities at December, 31, 2022 (1)	41,919
Contract assets reclassified to accounts receivable in 2023	(30,295)
Cash received in advance since prior year and remains in net contract liabilities at December, 31, 2023	(5,170)
Contract impairments, modifications and terminations in 2023	5,610
Balance at December, 31, 2023	$	(3,583)
_________________ (1) Includes $5.1 million of revenue recognized from prepaid royalty guarantees in connection with a licensing contract terminated in the fourth quarter of 2023.


		Year Ended December 31, 2021										Year Ended December 31, 2023
		Licensing		Direct-to-consumer		Digital subscriptions and content		Other		Total		Licensing	Direct-to- Consumer	Digital Subscriptions and Content	Other	Total
Trademark licensing	Trademark licensing	$	64,021	$	—	$	2,034	$	—	$	66,055
Magazine, digital subscriptions and product		—		—		21,268		799		22,067
Digital subscriptions and products
TV and cable programming	TV and cable programming	—		—		10,454		162		10,616
Consumer products	Consumer products	—		147,848		—		—		147,848
Total revenues	Total revenues	$	64,021	$	147,848	$	33,756	$	961	$	246,586


	Year Ended December 31, 2020
	Licensing		Direct-to-consumer		Digital subscriptions and content		Other		Total
Trademark licensing	$	61,142	$	—	$	2,420	$	—	$	63,562
Magazine, digital subscriptions and product	—		—		8,658		771		9,429
TV and cable programming	—		—		9,835		692		10,527
Consumer products	—		64,116		—		28		64,144
Total revenues	$	61,142	$	64,116	$	20,913	$	1,491	$	147,662


	Year Ended December 31, 2022
	Licensing		Direct-to- Consumer		Digital Subscriptions and Content		Other		Total
Trademark licensing	$	60,861	$	—	$	—	$	—	$	60,861
Magazine, digital subscriptions and products	—		—		9,333		789		10,122
TV and cable programming	—		—		9,376		—		9,376
Consumer products	—		105,177		—		—		105,177
Total revenues	$	60,861	$	105,177	$	18,709	$	789	$	185,536


	Weighted- Average Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
December 31, 2021
Trade names	11.8	$	85,684	$	(3,293)	$	82,391
Distribution agreements	15	3,720		(2,687)		1,033
Photo and magazine archives	10	2,000		(2,000)		—
Customer list	10	1,180		(236)		944
Developed technology	3	2,300		(149)		2,151
Total		$	94,884	$	(8,365)	$	86,519


	Weighted- Average Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
December 31, 2020
Distribution agreements	15	$	3,720	$	(2,438)	$	1,282
Photo and magazine archives	10	2,000		(1,967)		33
Licensing agreements	9	5,913		(5,913)		—
Customer list	10	1,180		(118)		1,062
Total		$	12,813	$	(10,436)	$	2,377


2022		$	8,430
2023		8,430
2024	2024	8,281
2025	2025	7,663
2026	2026	7,457
2027
2028
Thereafter	Thereafter	46,258
Total	Total	$	86,519


~~Balance at December 31, 2020~~	$	~~504~~
~~Acquisition of TLA~~	~~16,374~~
~~Acquisition of Honey Birdette~~	~~223,381~~
~~Acquisition of GlowUp~~	~~32,603~~
~~Foreign currency translation adjustment~~	~~(2,285)~~
~~Balance at December 31, 2021~~	$	~~270,577~~


	Gross Goodwill		Impairments		Net Goodwill
Balance at December 31, 2021	$	254,214	$	—	$	254,214
Foreign currency translation adjustment in relation to Honey Birdette	(13,557)		—		(13,557)
Impairments(1)	—		(117,440)		(117,440)
Balance at December 31, 2022	$	240,657	$	(117,440)	$	123,217
Foreign currency translation adjustment in relation to Honey Birdette	(1,658)		—		(1,658)
Impairments (1)	—		(66,660)		(66,660)
Balance at December 31, 2023	$	238,999	$	(184,100)	$	54,899
_________________ (1) As of the impairment dates. Impairment charges on goodwill recorded in the consolidated statements of operations for the years ended December 31, 2023 and 2022 were $67.5 million and $115.2 million, respectively. The offset relates to foreign currency translation.


2022	$	3,206
2023	3,265
2024	3,327
2025	3,396
2026	6,875
Thereafter	217,350
Total	$	237,419


	Number of options	Weighted- average exercise price		Weighted- average remaining contractual term (years)	Aggregate intrinsic value (in thousands)
Balance – December 31, 2020	2,594,597	$	3.79	8.5	$	13,791
Granted (1)	1,225,249	$	14.24
Exercised	(608,775)	$	3.83		$	20,207
Forfeited	—	—
Cancelled	—	—
Balance – December 31, 2021	3,211,071	$	7.77	7.9	$	60,978
Exercisable – December 31, 2021	1,985,822	$	3.77	7.1	$	45,407
Vested and expected to vest as of December 31, 2021	3,211,071	$	7.77	7.9	$	60,978


		Number of awards	Weighted- average grant date fair value per share		Number of awards	Weighted- average grant date fair value per share
Unvested and outstanding balance at December 31, 2020		313,976	$	4.30
Unvested and outstanding balance at December 31, 2021
Granted	Granted	679,562	$	28.22
Vested	Vested	(404,992)	$	9.77
Forfeited	Forfeited	(3,471)	$	28.08
Unvested and outstanding balance at December 31, 2021		585,075	$	28.15
Unvested and outstanding balance at December 31, 2022
Granted
Vested
Forfeited
Unvested and outstanding balance at December 31, 2023


	~~Year Ended December 31, 2021~~
~~Operating lease cost~~	$	~~9,099~~
~~Variable lease cost~~	~~1,370~~
~~Short-term lease cost~~	~~674~~
~~Sublease income~~	~~(368)~~
~~Net lease cost~~	$	~~10,775~~


Years ending December 31:	Amounts
2022	$	11,447
2023	9,894
2024	8,314
2025	6,588
2026	6,131
Thereafter	7,393
Total undiscounted lease payments	49,767
Less: imputed interest	(4,536)
Total operating lease liabilities	$	45,231
Operating lease liabilities, current portion	9,697
Operating lease liabilities, noncurrent portion	$	35,534


	Minimum Lease Commitments		Sublease Income
2021	$	3,433	$	(288)
2022	3,451		(313)
2023	3,564		(322)
2024	3,828		(246)
2025	3,588		—
Thereafter	7,553		—
Total	$	25,417	$	(1,169)


	Employee Separation Costs
Balance at December 31, 2022	$	1,192
Costs incurred and charged to expense	3,660
Costs paid or otherwise settled	(3,668)
Balance at December 31, 2023	$	1,184