BEYOND MEAT, INC.BYND
BEYOND MEAT, INC. Debt Disclosure
Debt
The following is a summary of debt balances as of December 31, 2025 and December 31, 2024:
December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
2027 Notes | $ | 29,459 | $ | 1,150,000 | |||||||
Debt issuance costs—2027 Notes(1) | — | (8,524) | |||||||||
2030 Notes(2) | 334,148 | — | |||||||||
Debt discount—2030 Notes issue date embedded derivatives, net(3) | (25,745) | — | |||||||||
Delayed draw term loans(4) | 104,569 | — | |||||||||
Debt issuance costs—Delayed draw term loans | (7,181) | — | |||||||||
Debt discount—Delayed draw term loan warrants | (19,510) | — | |||||||||
| Total debt outstanding | $ | 415,740 | $ | 1,141,476 | |||||||
| Less: current portion of long-term debt | — | — | |||||||||
| Long-term debt | $ | 415,740 | $ | 1,141,476 | |||||||
______________
(1) In 2025, $5.4 million in unamortized debt issuance costs related to the 2027 Notes were offset against the gain on debt restructuring, net of exchange fees, from the Exchange Offer.
(2) Amount shown includes principal amount issued plus the total undiscounted future cash flows, including any amounts contingently payable, using the PIK option, as further discussed below. Amounts contingently payable include approximately $0.6 million in additional interest in the event of default in accordance with the 2030 Notes Indenture.
(3) 2030 Notes Embedded Derivative was valued using the binomial lattice valuation model and recorded as debt discount. Amount shown is net of amortization from the issue date discount. See Note 2 and Note 3.
(4) Includes PIK interest of $4.6 million.
2027 Notes
On March 5, 2021, the Company issued $1.0 billion aggregate principal amount of 2027 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. On March 12, 2021, the initial purchasers of the 2027 Notes exercised their option to purchase an additional $150.0 million aggregate principal amount of 2027 Notes, and such additional 2027 Notes were issued on March 16, 2021.
The 2027 Notes will mature on March 15, 2027, unless earlier repurchased, redeemed or converted. The 2027 Notes were issued pursuant to, and are governed by, an indenture, dated as of March 5, 2021 (the “2027 Notes Indenture”), between the Company and U.S. Bank National Association, as trustee (the “2027 Notes Trustee”). The Company used $84.0 million of the net proceeds from the sale of the 2027 Notes to fund the cost of entering into capped call transactions, described below. The proceeds from the issuance of the 2027 Notes were approximately $1.0 billion, net of capped call transaction costs of $84.0 million and debt issuance costs totaling $23.6 million.
The 2027 Notes do not bear regular interest, and the principal amount of the 2027 Notes do not accrete.
The 2027 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 20, 2024 and on or before the 20th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any 2027 Note for redemption will constitute a “Make-Whole Fundamental Change” (as defined in the 2027 Notes Indenture) with respect to that 2027 Note, in which case the conversion rate applicable to the conversion of that 2027 Note will be increased in certain circumstances if it is converted after it is called for redemption. The Company must repay the note principal in cash.
If certain corporate events that constitute a “Fundamental Change” (as defined in the 2027 Notes Indenture) occur, then, subject to limited exceptions, noteholders may require the Company to repurchase their 2027 Notes at a cash repurchase price equal to the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain delisting events with respect to the Company’s common stock.
The 2027 Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the 2027 Notes Indenture), which include the following: (i) certain payment defaults on the 2027 Notes (which, in the case of a default in the payment of special interest and additional interest on the 2027 Notes, are subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the 2027 Notes Indenture within specified periods of time; (iii) a default by the Company in its other obligations or agreements under the 2027 Notes Indenture or the 2027 Notes if such default is not cured or waived within 60 days after notice is given in accordance with the 2027 Notes Indenture; and (iv) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its significant subsidiaries.
In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of the Company’s debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock.
Holders of the Company’s common stock have no preemptive, conversion, subscription or other rights, and there are no redemption or sinking fund provisions applicable to the Company’s common stock. The rights, preferences and privileges of the holders of the Company’s common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that the Company may designate in the future.
If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and any accrued and unpaid special interest and additional interest on, all of the 2027 Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any
other Event of Default occurs and is continuing, then, the 2027 Notes Trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of 2027 Notes then outstanding, may declare the principal amount of, and any accrued and unpaid special interest and additional interest on, all of the 2027 Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the 2027 Notes Indenture consists exclusively of the right of the noteholders to receive special interest on the 2027 Notes for up to 365 days at a specified rate per annum not exceeding 0.50% on the principal amount of the Notes.
The total amount of debt issuance costs of $23.6 million was recorded as a reduction to 2027 Notes in the Company’s consolidated balance sheet and was being amortized as interest expense over the term of the 2027 Notes using the effective interest method. In the years ended December 31, 2025 and December 31, 2024, the Company recognized $3.1 million and $3.9 million, respectively, in interest expense related to the amortization of the debt issuance costs related to the 2027 Notes. The effective interest rate for the 2027 Notes in each of the years ended December 31, 2025 and December 31, 2024 was 0.3%, respectively. In October 2025, concurrently with the completion of the Exchange Offer, the remaining unamortized debt issuance costs associated with the 2027 Notes in the amount of $5.4 million was offset against the gain on debt restructuring discussed below.
Exchange Offer and Consent Solicitation
On September 29, 2025, the Company commenced the Exchange Offer to exchange any and all of its 2027 Notes issued pursuant to the 2027 Notes Indenture, for a pro rata portion of (i) up to $202.5 million in aggregate principal amount of the 2030 Notes and (ii) up to 326,190,370 of the New Shares.
Early Settlement of the Exchange Offer
On October 15, 2025, the Company completed the early settlement of the exchange of the 2027 Notes that were validly tendered on or before the Early Tender Date in the Exchange Offer. Pursuant to the early settlement of the Exchange Offer, $1,114,603,000 in aggregate principal amount of the 2027 Notes were validly tendered, accepted for exchange by the Company and subsequently canceled (“Early Tendered Notes”). The Early Tendered Notes represented 96.92% of the aggregate principal amount of the previously outstanding 2027 Notes. Following the cancellation of the Early Tendered Notes, $35,397,000 in aggregate principal amount of the 2027 Notes remained outstanding. On the Early Settlement Date, the Company issued (i) $196,217,000 in aggregate principal amount of 2030 Notes and (ii) 316,150,176 New Shares, in exchange for the Early Tendered Notes. In addition, the Company issued an additional $12.5 million in aggregate principal amount of 2030 Notes as payment of the SteerCo Premium, for a total of $208,717,000 in aggregate principal amount of 2030 Notes. The Company also completed the Consent Solicitation and entered into the Supplemental Indenture to the 2027 Notes Indenture with the 2027 Notes Trustee. The Supplemental Indenture eliminated substantially all of the restrictive covenants in the 2027 Notes Indenture as well as certain events of default and related provisions applicable to the 2027 Notes.
Transaction Support Agreement
In connection with the Exchange Offer and Consent Solicitation, the Company entered into a transaction support agreement dated September 29, 2025 (the “Transaction Support Agreement”) with certain beneficial owners or nominees, investment managers or advisors for beneficial holders of the 2027 Notes who held approximately 47% of the aggregate principal amount of the 2027 Notes (the “Supporting Noteholders”) as of the effective date of the Transaction Support Agreement. The Company agreed in the Transaction Support Agreement to pay or cause to be paid to the Supporting Noteholders, in proportion to the principal amount of 2027 Notes held by each such Supporting Noteholder, a non-refundable amount at the initial settlement date of the 2030 Notes equal to $12.5 million in aggregate principal amount of 2030 Notes included above.
In accordance with the terms of the Transaction Support Agreement, the Transaction Support Agreement automatically terminated on the Early Settlement Date.
Final Settlement of the Exchange Offer
On October 30, 2025, the Company completed the final settlement of the exchange of the 2027 Notes that were validly tendered in the Exchange Offer and not validly withdrawn following the Early Tender Date in connection with the Exchange Offer. Pursuant to the final settlement of the Exchange Offer, an additional $5,938,000 in aggregate principal amount of the 2027 Notes were validly tendered (“Additional Tendered Notes”), accepted for exchange by the Company and subsequently canceled. In connection with the final settlement of the Exchange Offer, on the Final Settlement Date, the Company issued (i) $1,004,000 in aggregate principal amount of 2030 Notes and (ii) 1,684,270 New Shares, in exchange for the Additional Tendered Notes.
Following the Final Settlement Date, a total of (i) $209,721,000 in aggregate principal amount of 2030 Notes (inclusive of $12.5 million in aggregate principal amount of 2030 Notes as payment of the SteerCo Premium) and (ii) 317,834,446 New Shares have been issued by the Company in connection with the Exchange Offer. The Additional Tendered Notes and the Early Tendered Notes together represent 97.44% of the aggregate outstanding principal amount of 2027 Notes. As of December 31, 2025, $29,459,000 in aggregate principal amount of the 2027 Notes remained outstanding as further discussed below.
2030 Notes Indenture
The 2030 Notes were issued pursuant to an indenture and security agreement dated as of October 15, 2025 (as supplemented, the “2030 Notes Indenture”), by and between the Company and Wilmington Trust, National Association, as Trustee and Collateral agent.
The 2030 Notes are secured, second lien obligations of the Company. The 2030 Notes will mature on October 15, 2030, unless earlier redeemed, converted, equitized or repurchased in accordance with the terms of the 2030 Notes. The 2030 Notes bear interest at a rate of 7.00% per annum from the Early Settlement Date, which interest may be paid in cash or, subject to certain limitations, in shares of common stock. At the option of the Company, interest on the 2030 Notes may be accrued and compounded in whole or in part for any interest period as “payment-in-kind” (“PIK”) interest at a rate of 9.50% per annum from the Early Settlement Date. The Company used the PIK option as discussed below under Gain on Debt Restructuring. Subsequent to the year ended December 31, 2025, on January 12, 2026, the Company and Beyond Meat BV entered into a First Supplemental Indenture (the “First Supplemental Indenture”) with the Collateral Agent. The First Supplemental Indenture modified the 2030 Notes Indenture to provide for the guarantee of the 2030 Notes by Beyond Meat BV, which are secured on a second-priority basis by the Company’s assets and the assets of Beyond Meat BV, subject to certain exceptions. See Note 17.
The conversion rate for the 2030 Notes was initially set to a number of shares of common stock per $1,000 principal amount of 2030 Notes equal to the lesser of (i) 1,029.2716 and (ii) an amount calculated based on a 10% premium to a reference price determined over an observation period consisting of 20 consecutive trading days immediately following the Early Settlement Date, (excluding any trading days on which there is a Market Disruption Event, as defined in the 2030 Notes Indenture) with such conversion rate subject to customary adjustments. The conversion rate will be increased for conversions occurring prior to October 15, 2028, to reflect a “make-whole” premium, payable in the form of shares of common stock, to compensate holders for interest that would have been payable to such date. On November 14, 2025, the initial conversion rate for 2030 Notes was established as 572.7784 shares of the Company’s common stock per $1,000 principal amount of the 2030 Notes, which represents a conversion price of approximately $1.7459 per share of common stock.
The Company is permitted to satisfy its obligations under the 2030 Notes with any settlement method it is otherwise permitted to elect, including by physical settlement of shares of common stock. The 2030 Notes are
convertible at any time prior to the close of business on the second trading day immediately preceding the maturity date.
The 2030 Notes Indenture includes incurrence based negative covenants, including but not limited to, limitations on debt, limitations on liens, limitations on investments, limitations on mergers, consolidations, and sales of all or substantially all assets, limitations on transactions with affiliates, limitations on restricted payments, limitations on asset sales, limitations on dividends and other payment restrictions affecting any direct or indirect subsidiaries, limitations on future guarantees by subsidiaries without such subsidiaries also guaranteeing the 2030 Notes, limitations on disposals of assets, limitations on impairment of security and restrictions on certain liability management priming transactions with respect to the 2030 Notes. Subsequent to the year ended December 31, 2025, on January 12, 2026, the Company and Beyond Meat BV entered into the First Supplemental Indenture with the Collateral Agent (see Note 17). The 2030 Notes Indenture also includes a covenant requiring minimum liquidity of $15.0 million, to be tested quarterly, a requirement that the Company will not permit more than $60.0 million in aggregate principal amount of the 2027 Notes to remain outstanding as of or following the date that is 90 days prior to the maturity of the 2027 Notes, a covenant that limits the Company’s ability to repurchase, redeem, retire, exchange or otherwise acquire the 2027 Notes other than pursuant to the prices and other conditions to be set forth in the 2030 Notes Indenture and a cap of $60.0 million on the amount of cash that can be used to repay the 2027 Notes at the maturity of such notes, subject to increase to the extent of any equity raises by the Company.
Under certain circumstances and subject to conditions set forth in the 2030 Notes Indenture, the Company may elect to redeem, equitize or force a mandatory conversion of the 2030 Notes.
If certain corporate events constituting a make-whole fundamental change occur (which shall include, among other things, the acquisition by any person or group of more than 50% of the outstanding common stock of the Company or a delisting of the Company’s common stock), the Company shall offer to repurchase all of the outstanding 2030 Notes for cash at a repurchase price equal to 100% of the aggregate principal amount of the 2030 Notes then outstanding plus accrued and unpaid interest. If a fundamental change occurs, then the Company will in certain circumstances increase the conversion rate for the 2030 Notes for a specified period of time on the terms set forth in the 2030 Notes Indenture.
As of December 31, 2025, the Company was in compliance with the covenants under the 2030 Notes.
2030 Notes Embedded Derivative
The 2030 Notes contain certain embedded derivatives that require bifurcation and separate accounting from the debt host pursuant to ASC 815. See Note 2 and Note 3.
Intercreditor Agreement
In connection with the issuance of the 2030 Notes and the entry into the 2030 Notes Indenture, the Company entered into the Intercreditor Agreement among Unprocessed Foods, the lender under the Company’s Loan and Security Agreement, as the first lien representative and the first lien collateral agent for the first lien claimholders, Wilmington Trust, National Association, as the initial second lien collateral agent for the initial second lien claimholders and as the initial second lien representative for the initial second lien claimholders, and the Company, as a grantor, which, among other things, provides for the relative priorities of the security interests in the assets securing the 2030 Notes, the loans pursuant to the Loan and Security Agreement and certain of the Company’s additional debt, and certain other matters relating to the administration of security interests. The terms of the Intercreditor Agreement expressly subordinate, in right of payment and in liens, the obligations under the 2030 Notes to the obligations under the Loan and Security Agreement.
Voting Agreements
Each party to the Transaction Support Agreement entered into voting agreements with the Company agreeing, and by tendering 2027 Notes in the Exchange Offer, each participating holder of 2027 Notes is deemed to have agreed with the Company that it will appear at the special meeting to be held following the Exchange Offer and every stockholder meeting thereafter until the earlier of (i) the date following the date of the Company’s annual meeting in 2026, (ii) the date certain stockholder proposals are approved and (iii) June 19, 2026, or otherwise cause the New Shares received by such holder in the Exchange Offer to be counted as present threat for purposes of determining a quorum, and be present (in person or by proxy, which includes by remote communication) and vote (or cause to be voted) all of the New Shares received by such holder in the Exchange Offer in favor of certain stockholder proposals.
The Company also agreed in the voting agreements (i) not to effectuate a reverse stock split for a period of 120 days after October 15, 2025 (the “Early Release Date”) or (ii) during the period beginning on the Early Release Date and ending on the date that is 180 days after October 15, 2025 (the “Final Release Date”) unless in the case of this clause (ii), (a) the Company’s common stock fails to meet the minimum bid price of at least $1.00 per share on the Nasdaq Global Select Market for any fifteen (15) consecutive business days in the period commencing fifteen (15) business days prior to the Early Release Date and ending on the Final Release Date or (b) the Company has received a notice from the Nasdaq Stock Market LLC (“Nasdaq”) of failure to meet the continued listing requirement for minimum bid price at any time prior to such reverse stock split and has not subsequently cured such deficiency to Nasdaq’s satisfaction.
Cancellation of 2027 Notes Tendered in the Exchange Offer
The Company caused the Early Tendered Notes and the Additional Tendered Notes accepted for exchange to be delivered to the 2027 Notes Trustee for cancellation on the Early Settlement Date and Final Settlement Date, respectively. The Tendered Notes represented 97.44% of the previously outstanding 2027 Notes.
Gain on Debt Restructuring
The Exchange Offer qualified as a TDR under ASC 470-60. Since the undiscounted cash flows of the 2030 Notes, including any amounts contingently payable after the restructuring, plus the fair value of the New Shares issued in the Exchange Offer were less than the carrying amount of the exchanged 2027 Notes discussed above, the carrying value of the 2030 Notes was determined to be equal to the total undiscounted cash flows, including any amounts contingently payable, using the PIK option described above, all recognized as of the Exchange Offer issuance dates noted above, net of exchange fees. Amounts contingently payable in the total undiscounted cash flows include approximately $0.6 million in additional interest in the event of default in accordance with the 2030 Notes Indenture. As a result, except for the discount amortization of the embedded derivative discussed above, no interest expense will be recognized for the 2030 Notes after the Final Settlement Date. The Company recorded a gain on debt restructuring, net of exchange fees, of $548.7 million, included in the Company’s consolidated statements of operations, which resulted in an increase of $3.53 in net income per share attributable to common stockholders—basic, for the year ended December 31, 2025. The gain on debt restructuring was calculated as the difference between the carrying amount of the 2027 Notes and the sum of (i) the carrying amount of the 2030 Notes (computed as described above), net of exchange fees and (ii) the fair value of the New Shares issued. See Note 2.
The Company incurred total issuance costs related to the 2030 Notes of approximately $38.2 million, of which $6.5 million were attributable to legal fees and other direct costs incurred in granting equity interest (issuing New Shares) and $31.7 million were attributable to legal fees and other direct costs incurred to effect the TDR. The equity-related costs reduced the initial carrying amount of the equity interest issued and the non-equity costs incurred in the TDR were recorded as approximately $14.1 million included in selling, general and administrative expenses and approximately $17.6 million as a reduction to the gain on debt restructuring in the Company’s consolidated statement of operations for the year ended December 31, 2025. In addition, in connection with the Exchange Offer, approximately $5.4 million of remaining unamortized debt costs from the
2027 Notes were written off and included as a reduction to the gain on debt restructuring, net of exchange fees, included in the Company’s consolidated statements of operations for the year ended December 31, 2025.
The Company did not receive any cash proceeds from the Exchange Offer. In exchange for issuing the 2030 Notes and New Shares pursuant to the Exchange Offer, the Company received and canceled 97.44% of the 2027 Notes that were exchanged.
The carrying amount of the liability for the 2030 Notes as of December 31, 2025, was $308.4 million, net of debt discount, which represents the issuance date principal amount plus the undiscounted future cash flows using the PIK election, including any amounts contingently payable that was recognized on the completion of the Exchange Offer and is included in 2030 Notes, net, under Long-term liabilities in the Company’s consolidated balance sheet.
The following is a summary of the 2027 Notes as of December 31, 2025:
| (in thousands) | Principal Amount | Unamortized Issuance Costs(1) | Net Carrying Amount | Fair Value | ||||||||||||||||||||||||||||
| Amount | Leveling | |||||||||||||||||||||||||||||||
2027 Notes | $ | 29,459 | $ | — | $ | 29,459 | $ | 19,693 | Level 2 | |||||||||||||||||||||||
__________
(1) Upon closing of the Exchange Offer, unamortized debt issuance costs associated with the 2027 Notes in the amount of $5.4 million were written off to Gain on debt restructuring in the Company’s consolidated statement of operations for the year ended December 31, 2025.
The 2027 Notes are carried at face value on the Company’s consolidated balance sheets. As of December 31, 2025, the estimated fair value of the 2027 Notes was approximately $19.7 million. The 2027 Notes are quoted on the Intercontinental Exchange and are classified as Level 2 financial instruments. The estimated fair value of the 2027 Notes was determined based on the actual bid price of the 2027 Notes on December 22, 2025, the last business day in 2025 when the 2027 Notes were traded.
The following is a summary of the 2030 Notes as of December 31, 2025:
| (in thousands) | Principal Amount | Undiscounted Cash Flows(1) | Unamortized Derivative Discount(2) | Carrying Amount | Fair Value | ||||||||||||||||||||||||||||||
| Amount | Leveling | ||||||||||||||||||||||||||||||||||
2030 Notes | $ | 209,721 | $ | 124,427 | $ | (25,745) | $ | 308,403 | $ | 166,267 | Level 2 | ||||||||||||||||||||||||
__________
(1) Represents the undiscounted future cash flows using the PIK election, including any amounts contingently payable, recognized on the restructuring date in accordance with TDR accounting discussed above.
(2) Represents the unamortized embedded derivatives in the 2030 Notes, recorded as a single derivative, bifurcated from the host and recorded as a discount in accordance with ASC 815. The Embedded Derivative discount is being amortized to interest expense at an effective interest rate of 1.6% per annum over the term of the 2030 Notes.
As of December 31, 2025, the estimated fair value of the 2030 Notes was approximately $166.3 million. The 2030 Notes are quoted on the Intercontinental Exchange and are classified as Level 2 financial instruments. The estimated fair value of the 2030 Notes was determined based on the actual bid price of the 2030 Notes on December 29, 2025, the last business day in 2025 when the 2030 Notes were traded.
As of December 31, 2025, the remaining lives of the 2027 Notes and 2030 Notes were approximately 1.2 years and 4.8 years, respectively.
Loan and Security Agreement
On May 7, 2025, the Company, as borrower, entered into the Loan and Security Agreement with the Lenders and certain of the Company’s subsidiaries party thereto from time to time, as guarantors, pursuant to which the Lenders agreed to provide for the Delayed Draw Term Loan Facility and the loans thereunder in an aggregate principal amount of $100.0 million. Beyond Meat BV has guaranteed the Company’s obligations under the Loan and Security Agreement. The Delayed Draw Term Loans are secured by a first-priority lien and security interest in substantially all of the assets, subject to certain exceptions, of the Company and Beyond Meat BV.
The Delayed Draw Term Loans borrowed under the Loan and Security Agreement mature on February 7, 2030 (the “Initial Maturity Date”), which date may be extended by the Company, with the relevant Lenders’ consent, to no later than May 7, 2035. Borrowings under the Loan and Security Agreement accrue interest at a rate per annum of 12.0%; provided that if the maturity date of any Delayed Draw Term Loan has been extended after the Initial Maturity Date, then such rate per annum will be 17.5% after the Initial Maturity Date. Proceeds of the Delayed Draw Term Loans may not be used to repay, amortize or restructure any debt for borrowed money other than debt owed to the Lenders and debt incurred by a Loan Party to finance the purchase, construction or improvement of any asset or services. Accrued but unpaid interest on each Delayed Draw Term Loan is compounded on a quarterly basis and payable “in kind” (“PIK”) interest by adding the amount of such accrued interest to the principal amount of the outstanding Delayed Draw Term Loans under the Loan and Security Agreement. As of December 31, 2025, the effective interest on the Delayed Draw Term Loans was 13.8%.
Among other things, the Loan and Security Agreement includes covenants that (i) require the Company to maintain liquidity of at least $15.0 million, (ii) do not permit the Company’s cash interest payments due under all of the Loan Parties’ subordinated debt and unsecured debt for borrowed money for any fiscal year of the Company, in the aggregate, to exceed $20.0 million, and (iii) cap the amount of cash that can be used to repay the 2027 Notes at maturity at $60.0 million, subject to increase to the extent of any equity raises by the Company. The Loan and Security Agreement also contains covenants that restrict the ability of the Loan Parties and certain of their subsidiaries to make dividends or distributions, incur additional debt (including subordinated debt), engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change their businesses or make investments. The Loan and Security Agreement also contains change of control provisions that could have the effect of delaying or preventing an otherwise beneficial takeover of the Company.
On June 26, 2025 and September 18, 2025, at the Company’s request, Unprocessed Foods, as the sole Lender at such time, made Delayed Draw Term Loans to the Company in the principal amounts of $40.0 million and $60.0 million, respectively. The Company plans to use the proceeds from such Delayed Draw Term Loans for general corporate purposes.
The total amount of debt issuance costs related to the Delayed Draw Term Loan Facility was $7.3 million, which is being amortized to interest expense over the term of the loan using the effective interest rate method. As of December 31, 2025, the Company had drawn the entire $100.0 million and had no amount available under the Delayed Draw Term Loan Facility.
In the year ended December 31, 2025, the Company recorded accrued unpaid interest of $4.6 million in PIK interest expense related to the Delayed Draw Term Loans and $0.6 million in interest expense from the amortization of the debt discount resulting from the Warrants.
Embedded Derivatives in Delayed Draw Term Loans
The Delayed Draw Term Loans contain certain embedded derivatives that require bifurcation and separate accounting from the debt host pursuant to ASC 815, including separate valuations of fair value for those derivatives both at the issuance date and all reporting periods thereafter until the derivatives expire, are canceled or the debt is no longer outstanding. The issuance date fair value of the derivatives is recorded as a
debt discount and amortized, while the changes to the fair value of those derivatives after the issuance date are marked to market and recognized in the consolidated statements of operations. The Company assessed the fair value of these derivatives and determined that both the issuance date fair value and the subsequent changes to fair value as of December 31, 2025, were immaterial, subject to subsequent reassessment.
Amendment to the Loan and Security Agreement
On October 15, 2025, the Company also entered into the First Amendment to LSA, with Unprocessed Foods, which amends the Loan and Security Agreement, among the Company, as the borrower, Unprocessed Foods, as a lender, and the other lenders from time to time party thereto. Pursuant to the First Amendment to LSA, the Loan and Security Agreement was amended to, among other things, add cross defaults to the Loan and Security Agreement related to events of default under other debt secured by a second priority security interest and certain secured debt for borrowed money. The amendment was deemed to be a debt modification pursuant to ASC 470, with no material amounts being recorded in the Company’s consolidated financial statements in connection with a modification for the year ended December 31, 2025.
As of December 31, 2025, the Company was in compliance with the covenants of the Loan and Security Agreement. However, because the Company failed to timely deliver to the lender by March 31, 2026 certain audited annual financial statements for the fiscal year ended December 31, 2025, as required by the terms of the Loan and Security Agreement, the Company was in default and provided notice thereof to the lender as required. Upon the filing of this report containing such audited annual financial statements and delivery to the lender of certain other documents required to be delivered concurrently, such default will be remedied and the Company will regain compliance with the covenants of the Loan and Security Agreement.
Warrant Agreement
On May 7, 2025, in connection with the entry into the Loan and Security Agreement, the Company and the Lenders entered into the Warrant Agreement setting forth the rights and obligations of the Company and the Lenders, as holders, in connection with Warrants representing the Lenders’ right to purchase up to, in the aggregate, 9,558,635 shares of common stock, at an initial exercise price of $3.26 per share calculated based on the terms of the Warrant Agreement. The Loan and Security Agreement provides that at each funding date of any Delayed Draw Term Loan, the Company would execute and deliver to the applicable Lenders Warrants representing the pro rata portion of the Maximum Warrant Share Amount based on the amount of Delayed Draw Term Loan provided by such Lender on the date thereof.
The Warrants are exercisable by the holder thereof, in whole or in part, at any time, or from time to time, prior to the expiration of the Warrant Agreement by tendering to the Company at its principal office a notice of exercise. Promptly upon receipt of such exercise notice and the payment of the exercise price, and in no event later than business days thereafter, the Company will issue to such holder the whole number of shares of common stock purchased plus an amount in cash representing any fractional share of common stock otherwise due upon such exercise.
The Warrants will be exercisable by payment in cash from time to time until June 26, 2030. The Warrants are subject to adjustment from time to time in accordance with the provisions of the Warrant Agreement, including a weighted average adjustment for certain below-market issuances of equity or equity-linked securities, subject to exceptions set forth in the Warrant Agreement. Subject to compliance with applicable federal and state securities laws, the Warrant Agreement and all rights thereunder are transferable by the Holder subject to the terms of the Warrant Agreement.
The Company agreed in the Warrant Agreement to provide certain customary registration rights with respect to the resale of shares of common stock underlying Warrants held by or issuable to the holders from time to time and the Company subsequently registered for resale on a registration statement on Form S-3 the 9,558,635 shares of common stock underlying the Warrants outstanding. As the Company is no longer eligible to use Form S-3 registration statements, the Company is required to use its commercially reasonable efforts to
register for resale on a registration statement on Form S-1 the shares of common stock underlying the Warrants outstanding. The Warrant Agreement also contains customary indemnity, exculpation and contribution obligations in connection with such registration.
On June 26, 2025, in connection with the Initial Draw, the Company issued to Unprocessed Foods Warrants to purchase 3,823,454 shares of Common Stock with an initial exercise price of $3.26 per share, a fair value per share of $2.09 and an aggregate fair value of $8.0 million. The aggregate fair value of the issued Warrants was recorded as a discount to the $40.0 million in term loan balance included in Delayed draw term loans, net in the Company’s consolidated balance sheet and is being amortized to interest expense using the effective interest rate method.
As of June 28, 2025, the Company concluded it was reasonably certain to draw the remaining $60.0 million available under the Delayed Draw Term Loan Facility before December 31, 2025, and therefore reasonably certain that it would issue to the Lenders Warrants to purchase the remaining 5,735,181 unissued shares of common stock pursuant to the Loan and Security Agreement. The fair value of the contingently issuable Warrants measured as of June 28, 2025 was $12.1 million, which amount was initially recorded as a warrant asset and included in Prepaid expenses and other current assets in the Company’s consolidated balance sheet as of June 28, 2025. The Company recorded $20.1 million in liability for the total fair value of the issued and contingently issuable Warrants in Delayed draw term loan warrants in its consolidated balance sheet at June 28, 2025.
On September 18, 2025, the Company drew the remaining $60.0 million available under the Delayed Draw Term Loan Facility. In connection with the Second Draw, the Company issued to Unprocessed Foods Warrants to purchase 5,735,181 shares of common stock with an initial exercise price of $3.26 per share, that were previously accounted for as contingently issuable Warrants.
Pursuant to the terms of the Warrant Agreement, the exercise price of the Warrants is subject to a weighted average adjustment for certain below-market issuances of equity or equity-linked securities, subject to exceptions. On December 22, 2025, the Company adjusted the exercise price for the Warrants from $3.26 to $1.95 in order to fully account for any and all potential past or future adjustments relating to the exchange of the 2027 Notes for $209,721,000 in principal amount of 2030 Notes and 317,834,446 shares of common stock that was completed on October 30, 2025, the payment of interest on the 2030 Notes in the form of common stock or in the form of payment-in-kind interest, as well as certain mandatory conversions, equitizations and make-whole payments that could result in additional issuances of common stock thereunder, if any. There was no corresponding adjustment to the number of shares of common stock underlying the Warrants. On December 31,2025, the Company remeasured the fair value of the total warrant liability marking it to market. See Note 2 and Note 3.
The debt discount arising from the warrant liability is amortized to interest expense over the life of the Warrant Agreement. In 2025, the Company recorded $0.6 million in interest expense related to the amortization of the debt discount resulting from the Warrants. Total unamortized debt issuance costs related to the Delayed Draw Term Loans were $7.2 million as of December 31, 2025. No such costs existed as of December 31, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 9, 2026 | Showing above |
| 2024 | Mar 5, 2025 | |
| 2023 | Mar 1, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 2, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 19, 2020 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.