Playboy, Inc.

Greetings and welcome to the Playboy Group's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the forum presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Matt Chesler, Investor Relations. Matt, you may go ahead.

Thank you, operator, and good afternoon. I'd like to remind everyone that the information discussed today is qualified in its entirety by the form 8-K filed today by PLBY Group, which may be accessed on the SEC's website and PLBY Group's website. Today's call is also being webcast, and a replay will be posted to the company's investor relations website. Please note that statements made during this call, including financial projections or other statements that are not historical in nature, may constitute forward-looking statements. Such statements are made on the basis of PLBY Group's views and assumptions regarding future events and business performance at the time they are made, and we do not undertake any obligation to update these statements. Forward-looking statements are subject to risk, which could cause the company's actual results to differ from its historical results and forecasts. including those risks set forth in the company's filing with the SEC, and you should refer to and carefully consider those for more information. This cautionary statement applies to all forward-looking statements made during this call. Do not place undue reliance on any forward-looking statements. During this call, the company may refer to non-GAAP financial measures. Such non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings release. TLBY group filed with its form 8K today. I'd now like to turn the call over to Ben before we begin the Q&A session. Ben?

Thanks, Matt, and thanks, everyone, for joining us today. Before we get into Q&A, I'd like to quickly review a few of the key developments that we have achieved during the third quarter and in the last couple weeks. most specifically related to our balance sheet and our liquidity. About a week ago, we closed a strategic investment from Byborg for over $22 million. Today, we have approximately $30 million of cash on the balance sheet. And just this week, we have restructured our debt, something that we have talked about previously through an exclusivity period with our lenders where we have realized on a senior debt basis, a $66 million discount on the senior debt. With that, we have issued a new $28 million convertible preferred to our lenders. So the net reduction is $38 million in leverage. The convert is convertible at our option at any time in cash or in stock at the 5D VWAP subject to a floor of $1.50 and a cap of $4.50. So should the stock be anywhere within that range, it is our option to convert it. If the stock were over $4.50, we would always have the option to pay in cash or redeem in stock. And we think the combination of the cash on our balance sheet and the significant reduction in debt that we have achieved puts us on a much more stable financial footing moving forward. We're excited and continuing to work on the strategic deal. We talked about the non-binding LOI. We have signed with BiBorg, and we expect to close that before year end. And with that, Matt, I will open it up to questions.