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Related Party Transactions
 6 Months Ended
Jun. 30, 2025
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
On November 5, 2024, The Million S.a.r.l (a subsidiary of Byborg) completed the purchase of 14,900,000 shares of our common stock and became a significant stockholder of the Company as of such date. Thus, both The Million S.a.r.l and Byborg, as well as their subsidiaries, are considered related parties of the Company.
On December 14, 2024, we entered into a Securities Purchase Agreement with The Million S.a.r.l, pursuant to which we agreed to sell to such purchaser 16,956,842 shares of our common stock, par value $0.0001 per share, at a price of $1.50 per share, which agreement was entered into subject to the approval of our stockholders. At our 2025 annual meeting of stockholders held on June 16, 2025, our stockholders rejected the transaction, preventing it from being completed.
In addition, on December 14, 2024, we entered into the LMA with Byborg, pursuant to which Byborg agreed to license the operation of our Playboy Plus, Playboy TV (digital and linear) and Playboy Club businesses and to license the right to use certain Playboy trademarks and other intellectual property for related businesses and certain other categories. The LMA has an initial term of 15 years, with the operations and license rights pursuant to the LMA having commenced as of January 1, 2025. Pursuant to the LMA, we will receive minimum guaranteed royalties of $20 million per year of the term, to be paid in installments during each year. In addition, Byborg will prepay the minimum guaranteed amount for the second half of year 15 of the initial term of the LMA. Playboy is also entitled to receive excess royalties from the operations licensed and operated by Byborg, on the terms and conditions set forth in the LMA. During the three and six months ended June 30, 2025, the Company recognized $5.0 million and $10.0 million of minimum guaranteed royalties as licensing revenue pursuant to the LMA, respectively.
There is a transition period under which we will continue to operate the licensed Playboy Plus, Playboy TV (online and linear) and Playboy Club according to the terms of the TSA while Byborg works to take full operational control. The first $5.0 million of operating expenses incurred in relation to such licensed businesses is our responsibility to bear. Any operating expenses paid by us with respect to such licensed businesses above the $5.0 million threshold will be reimbursed to us by Byborg. Byborg is entitled to cash collected by us while operating the licensed businesses during the transition period and we are obligated to remit the funds to Byborg quarterly. The cash will be remitted on a net basis to Byborg, such that any operating expenses incurred beyond the $5.0 million expense threshold will be deducted from amounts we have collected for Byborg. In the second quarter of 2025, the $5.0 million of operating expenses of the digital businesses which we were responsible for under the LMA had been incurred and paid by us. The operating expenses related to the licensed digital businesses totaled $3.0 million and $6.8 million during the three and six months ended June 30, 2025, respectively, out of which $1.2 million and $5.0 million were recorded in our condensed consolidated statements of operations for the three and six months ended June 30, 2025, respectively. During the six months ended June 30, 2025, operating expenses of $1.8 million in excess of the $5.0 million threshold were recorded as a reduction to the Payable to Byborg, net balance as of June 30, 2025. As of June 30, 2025, the remittances payable to Byborg totaled $2.6 million, the majority of which will be paid to Byborg in the third quarter of 2025.