PLBY GROUP, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

You should read the following discussion of our financial condition and results
of operations in conjunction with our unaudited interim condensed consolidated
financial statements as of and for the three and six months ended June 30, 2022
and 2021 and the related notes thereto included in Part I, Item 1 of this
Quarterly Report on Form 10-Q, our audited consolidated financial statements as
of and for the years ended December 31, 2021 and 2020 and the related notes
thereto included in our   Annual Report on Form 10-K   filed with the SEC on
March 16, 2022. This discussion contains forward-looking statements that involve
risks and uncertainties and that are not historical facts, including statements
about our beliefs and expectations. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of
various factors, including those discussed below and particularly under the
headings "Risk Factors," "Business" and "Cautionary Note Regarding
Forward-Looking Statements" contained in our   Annual Report on Form 10-K
filed with the SEC on March 16, 2022. As used herein, "we", "us", "our", the
"Company" and "Playboy" refer to Playboy Enterprises, Inc. and its subsidiaries
prior to the consummation of the Business Combination (as defined below) and
PLBY Group Inc. and its subsidiaries following the consummation of the Business
Combination.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that are forward-looking
and as such are not historical facts. These statements are based on the
expectations and beliefs of the management of the Company in light of historical
results and trends, current conditions and potential future developments, and
are subject to a number of factors and uncertainties that could cause actual
results to differ materially from forward-looking statements. These
forward-looking statements include all statements other than historical fact,
including, without limitation, statements regarding the financial position,
capital structure, dividends, indebtedness, business strategy and plans and
objectives of management for future operations of the Company. These statements
constitute projections, forecasts and forward-looking statements, and are not
guarantees of performance. Such statements can be identified by the fact that
they do not relate strictly to historical or current facts. When used in this
Quarterly Report on Form 10-Q, words such as "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intend," "may," "might," "plan,"
"possible," "potential," "predict," "project," "should," "strive," "would" and
similar expressions may identify forward-looking statements, but the absence of
these words does not mean that a statement is not forward-looking. When we
discuss our strategies or plans, we are making projections, forecasts or
forward-looking statements. Such statements are based on the beliefs of, as well
as assumptions made by and information currently available to, our management.

The forward-looking statements contained in this Quarterly Report on Form 10-Q
are based on current expectations and beliefs concerning future developments and
their potential effects on our business. There can be no assurance that future
developments affecting us will be those that we anticipated. These
forward-looking statements involve significant risks and uncertainties that
could cause the actual results to differ materially from those discussed in the
forward-looking statements. Factors that may cause such differences include, but
are not limited to: (1) the impact of the COVID-19 pandemic on the Company's
business and acquisitions; (2) the inability to maintain the listing of the
Company's shares of common stock on Nasdaq; (3) the risk that the Company's
acquisitions or any proposed transactions disrupt the Company's current plans
and/or operations, including the risk that the Company does not complete any
such proposed transactions or achieve the expected benefits from them; (4) the
ability to recognize the anticipated benefits of acquisitions, commercial
collaborations, commercialization of digital assets and proposed transactions,
which may be affected by, among other things, competition, the ability of the
Company to grow and manage growth profitably, and retain its key employees; (5)
costs related to being a public company, acquisitions, commercial collaborations
and proposed transactions; (6) changes in applicable laws or regulations; (7)
the possibility that the Company may be adversely affected by global
hostilities, supply chain disruptions, inflation, foreign currency exchange
rates or other economic, business, and/or competitive factors; (8) risks
relating to the uncertainty of the projected financial information of the
Company; (9) risks related to the organic and inorganic growth of the Company's
businesses, and the timing of expected business milestones; and (10) other risks
and uncertainties indicated in this Quarterly Report on Form 10-Q, including
those under "Part II-Item 1A. Risk Factors." Should one or more of these risks
or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these
forward-looking statements. We caution that the foregoing list of factors is not
exclusive, and readers should not place undue reliance upon any forward-looking
statements.

Forward-looking statements included in this Quarterly Report on Form 10-Q speak
only as of the date of this Quarterly Report on Form 10-Q or any earlier date
specified for such statements. We do not undertake any obligation to update or
revise any forward-looking statements to reflect any change in its expectations
or any change in events, conditions, or circumstances on which any such
statement is based, except as may be required under applicable securities laws.
All subsequent written or oral forward-looking statements attributable to us or
persons acting on our behalf are qualified in their entirety by this Cautionary
Note Regarding Forward-Looking Statements.

                                       33
--------------------------------------------------------------------------------

Business Overview

We are a large, global consumer lifestyle company marketing our brands through a
wide range of direct-to-consumer products, licensing initiatives, digital
subscriptions and content, and location-based entertainment. 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 and
Lifestyle, such as digital gaming, hospitality and spirits; and, Beauty and
Grooming, including fragrance, skincare, grooming and cosmetics for women and
men.

We have three reportable segments: 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 Direct-to-Consumer segment derives its revenue from sales of
consumer products sold directly to consumers through our own online channels or
through third-party retailers. The Digital Subscriptions and Content segment
derives revenue from the subscription of Playboy programming 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 and collectibles.

Business Combination with MCAC

On September 30, 2020, 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, based 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").
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 and restricted stock units ("RSUs") that were
outstanding as of immediately prior to the closing of the Business Combination,
other than the Pre-Closing option granted to Legacy Playboy's 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.

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 condensed
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.

                                       34
--------------------------------------------------------------------------------

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. for $24.9 million in cash consideration. TLA is the parent
company of the Lovers family of stores, a leading omnichannel online and brick
and mortar sexual wellness chain, with 40 stores in five states as of June 30,
2022. Refer to Note 16, Business Combinations, for additional information.

Acquisition of Honey Birdette

On June 28, 2021 ("Contract Date"), we entered into a Share Purchase Agreement
(the "SPA") 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 ("Closing Date"), 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. As a result of the transaction,
Honey Birdette became an indirect, wholly-owned subsidiary of the Company. 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.
Refer to Note 16, Business Combinations, for additional information.

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.

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 Quarterly
Report on Form 10-Q titled "Risk Factors."
                                       35
--------------------------------------------------------------------------------

Expanding the Consumer Products Business through Owned and Operated Products and
Channels

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, in 2021, we acquired and launched our
own direct-to-consumer online sales channels, yandy.com, loversstores.com and
honeybirdette.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.

Reduced Reliance on China Licensing Revenues

We have enjoyed substantial success in licensing our trademarks in China where
we are a leading men's apparel brand and where licensing revenues have grown
year-over-year. However, as a result of this success, the percentage of total
net revenue attributable to China licensing had become 48% of our total revenue
by the end of 2019. With the acquisition of Yandy in December 2019, TLA in March
2021 and Honey Birdette in August 2021 and the ramp up of North American
consumer product sales, that percentage reduced to 16.6% and 16.0% for the three
and six months ended June 30, 2022, respectively, and we expect it will continue
to become a smaller percentage of total net 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 the end
of the year typically result in higher revenues and profit in our fourth
quarter, particularly at Yandy. Historically, October sales of costumes have
resulted in significantly higher revenues than in other months, but are also
coming under increasing pressure from competition in this category. We expect
investment and growth in expanding the consumer products category and
distribution will likely accelerate the strong fourth quarter seasonality of the
business in the future.

Attractive Merger and Acquisition Opportunities are Increasing

Building on our successful acquisition and integration of Yandy in late 2019,
TLA in March of 2021, Honey Birdette in August 2021 and GlowUp in October 2021,
we continue to identify and assess potentially advantageous merger, acquisition
and investment opportunities. On April 1, 2022, pursuant to an asset purchase
agreement, we acquired assets that could be used to enhance our Centerfold
business. 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.

Impact of COVID-19 on our Business

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 and Honey Birdette 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;

                                       36
--------------------------------------------------------------------------------

•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;

•Reducing retail store traffic during the Omicron variant surge; 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. In the first six months of 2022, certain of
our licensing partners faced macroeconomic pressures, such as supply chain and
inventory issues, as well as chronic COVID-related closures, resulting in lower
than expected retail sales versus their forecasts. They have been working
proactively to catch up on delayed launches. Holiday sales are anticipated to
come earlier this year and consumers to start shopping ahead this holiday
season, and we will be in close communication with our licensing partners during
the second half of this year.

As of the date of this Quarterly Report, our business as a whole has not
suffered any material adverse consequences to date from the COVID-19 pandemic.
The extent of the impact of COVID-19 on our future operational and financial
performance will depend on certain developments, including the further duration
of the COVID-19 pandemic and spread of its variants and its impact on employees
and vendors, all of which are uncertain and cannot be predicted. As of the date
of these unaudited consolidated financial statements, the full extent to which
COVID-19 may impact our future financial condition or results of operations is
uncertain.

How We Assesses 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 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,
in addition to sales of consumer products sold through third-party retailers or
online direct-to-customer and from the subscription of our programming which is
distributed through various channels, including websites and domestic and
international television.

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 Excess
Royalties only when the annual minimum guarantee is exceeded. Generally, Excess
Royalties are recognized when they are earned.

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.
                                       37
--------------------------------------------------------------------------------

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 on
centerfold.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 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, credit card fees and
collectibles, personnel costs including stock-based compensation, Playboy
Television operating expenses, costs associated with branding events, paper and
printing costs, 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, changes in
the fair value of contingent consideration, general marketing and promotional
activities and insurance.

Related Party Expenses

Related party expenses consist of management fees paid to an affiliate of one of
our stockholders for management and consulting services.

Other Operating Expenses

Other operating expenses primarily consist of impairment of digital assets.

Nonoperating Income (Expense)

Interest Expense

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

Fair Value Remeasurement Gain

Changes to the fair value of 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. Other income (expense), net for the
three and six months ended June 30, 2021 also included a $0.7 million gain from
settlement of convertible promissory notes payable to United Talent Agency, LLC
("UTA") at a 20% discount.
                                       38
--------------------------------------------------------------------------------

Provision for Income Taxes

The provision for 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 our U.S. and state deferred tax assets.

Results of Operations

Comparison of the Three Months Ended June 30, 2022 and 2021

The following table summarizes key components of our results of operations for
the periods indicated:

                                                 Three Months Ended
                                                      June 30,
                                                 2022           2021        $ Change      % Change
                                                          (in thousands)
Net revenues                                 $   65,414$ 49,851$ 15,563           31  %
Costs and expenses
Cost of sales                                   (28,058)      (23,675)       (4,383)          19  %
Selling and administrative expenses             (40,965)      (29,616)      (11,349)          38  %
Other operating expenses                         (2,574)            -        (2,574)         100  %
Total costs and expenses                        (71,597)      (53,291)      (18,306)          34  %
Operating (loss) income                          (6,183)       (3,440)       (2,743)          80  %
Nonoperating income (expense):
Interest expense                                 (4,083)       (2,253)       (1,830)          81  %
Loss on extinguishment of debt                        -        (1,217)        1,217         (100) %
Fair value remeasurement gain                     1,754             -         1,754          100  %
Other (expense) income, net                        (317)           (3)         (314)              *
Total nonoperating expense                       (2,646)       (3,473)          827           24  %
Loss before income taxes                         (8,829)       (6,913)       (1,916)          28  %
Benefit (expense) from income taxes                 514        (2,003)        2,517               *
Net loss                                         (8,315)       (8,916)          601            7  %
Net loss attributable to PLBY Group, Inc.    $   (8,315)$ (8,916)$    601            7  %


_________________

*Not meaningful
                                       39

--------------------------------------------------------------------------------

The following table sets forth our condensed consolidated statements of
operations data expressed as a percentage of total revenue for the periods
indicated:

                                                 Three Months Ended
                                                      June 30,
                                               2022              2021
Net revenues                                   100%              100%
Costs and expenses
Cost of sales                                  (43)              (47)
Selling and administrative expenses            (63)              (60)
Other operating expenses                       (3)                -
Total costs and expenses                      (109)             (107)
Operating (loss) income                        (9)               (7)

Nonoperating income (expense):

Interest expense                               (6)               (5)
Loss on extinguishment of debt                  -                (2)
Fair value remeasurement gain                   3                 -
Other (expense) income, net                     -                 -
Total nonoperating expense                     (3)               (7)
Loss before income taxes                       (12)              (14)
Benefit (expense) from income taxes             1                (4)
Net loss                                       (13)              (18)
Net loss attributable to PLBY Group, Inc.     (13)%             (18)%

Net Revenues

Net revenues increased by $15.6 million, or 31%, due to higher
direct-to-consumer revenue of $16.6 million, of which $22.4 million was
attributable to the acquisition of Honey Birdette, partly offset by a decrease
of $5.8 million in other direct-to-consumer revenue.

Cost of Sales

Cost of sales increased by $4.4 million, or 19%, primarily due to the increase
in direct-to-consumer cost of sales of $9.5 million related to the acquisition
of Honey Birdette and expenses related to our creator platform of $2.8 million,
partly offset by a decrease of $2.6 million as a result of lower product and
shipping costs, TLA amortization of the inventory step-up in the prior year
comparative period of $2.3 million, lower personnel costs of $1.1 million and
$0.8 million of inventory written off in the prior year comparative period.

Selling and Administrative Expenses

Selling and administrative expenses increased by $11.3 million, or 38%,
primarily due to increased direct-to-consumer costs of $9.8 million related to
the acquisition of Honey Birdette and $1.7 million related to increased
e-commerce marketing costs, $2.9 million of expenses related to our creator
platform, $7.7 million of higher employee compensation related costs, partly
offset by $8.6 million of non-cash fair value change due to contingent
liabilities fair value remeasurement relating to our acquisitions.

Other Operating Expenses

Other operating expenses increased by $2.6 million, or 100%, due to the
impairment of digital assets recognized in the three months ended June 30, 2022
as a result of the fair value of our digital assets decreasing below their
carrying value.

Nonoperating Income (Expense)

Interest Expense

Interest expense increased by $1.8 million, or 81%, primarily due to incremental
borrowings of $70.0 million pursuant to the Amendment No. 1 to the New Credit
Agreement and the Aircraft Term Loan of $9.0 million, offset by the lower
interest rate obtained pursuant to the Refinancing.
                                       40
--------------------------------------------------------------------------------

Loss on Extinguishment of Debt

Loss on extinguishment of debt decreased by $1.2 million, or 100% due to the
Refinancing in the second quarter of 2021.

Fair Value Remeasurement Gain

Fair value remeasurement gain increased by $1.8 million, or 100%, due to the
remeasurement of our preferred stock liability to its fair value at June 30,
2022.

Benefit (Expense) from Income Taxes

Provision for income taxes changed from $2.0 million of tax expense during the
three months ended June 30, 2021 to $0.5 million of tax benefit during the three
months ended June 30, 2022. During the three months ended June 30, 2022, we
recognized a net discrete tax expense of $0.1 million, primarily related to (i)
Section 162(m) limitations and (ii) a stock compensation shortfall addback.
During the three months ended June 30, 2021, we recognized a net discrete tax
benefit of $0.4 million, primarily related to the release of valuation allowance
due to purchase accounting deferred tax adjustments.

Comparison of the Six Months Ended June 30, 2022 and 2021

The following table summarizes key components of our results of operations for
the periods indicated:

                                                  Six Months Ended
                                                      June 30,
                                                2022           2021         $ Change      % Change
                                                          (in thousands)
Net revenues                                 $ 134,792$  92,531$ 42,261           46  %
Costs and expenses
Cost of sales                                  (56,958)       (42,699)      (14,259)          33  %
Selling and administrative expenses            (72,195)       (57,561)      (14,634)          25  %
Related party expenses                               -           (250)          250         (100) %
Other operating expenses                        (4,933)             -        (4,933)         100  %
Total costs and expenses                      (134,086)      (100,510)      (33,576)          33  %
Operating (loss) income                            706         (7,979)        8,685               *
Nonoperating income (expense):
Interest expense                                (8,133)        (5,550)       (2,583)          47  %
Loss on extinguishment of debt                       -         (1,217)        1,217          100  %
Fair value remeasurement gain                    1,754              -         1,754          100  %
Other (expense) income, net                       (397)           742        (1,139)        (154) %
Total nonoperating expense                      (6,776)        (6,025)         (751)          12  %
Loss before income taxes                        (6,070)       (14,004)        7,934          (57) %
Benefit (expense) from income taxes              3,298             91         3,207               *
Net loss                                        (2,772)       (13,913)      

11,141 (80) %
Net loss attributable to PLBY Group, Inc.$ (2,772)$ (13,913)$ 11,141 (80) %

_________________

*Not meaningful
                                       41

--------------------------------------------------------------------------------

The following table sets forth our condensed consolidated statements of
operations data expressed as a percentage of total revenue for the periods
indicated:

                                                   Six Months Ended
                                                       June 30,
                                                   2022             2021
Net revenues                                            100  %      100  %
Costs and expenses
Cost of sales                                           (42)        (46)
Selling and administrative expenses                     (54)        (62)
Related party expenses                                    -           -
Other operating expenses                                 (3)          -
Total costs and expenses                                (99)       (108)
Operating (loss) income                                   1          (8)
Nonoperating income (expense):                            -           -

Interest expense                                         (6)         (6)
Fair value remeasurement gain                             1           -
Loss on extinguishment of debt                            -          (1)
Other (expense) income, net                               -           -
Total nonoperating expense                               (5)         (7)
Loss before income taxes                                 (4)        (15)
Benefit (expense) from income taxes                       2           -
Net loss                                                 (2)        (15)
Net loss attributable to PLBY Group, Inc.                (2) %      (15) %

Net Revenues

Net revenues increased by $42.3 million, or 46%, primarily due to increased
direct-to-consumer revenue, of which $6.3 million was attributable to the
acquisition of TLA and $44.6 million was attributable to the acquisition of
Honey Birdette, offset by a decrease in other direct-to-consumer revenue of $6.7
million and higher sales of non-fungible tokens in the prior year comparative
period of $0.8 million.

Cost of Sales

Cost of sales increased by $14.3 million, or 33%, primarily due to an increase
in direct-to-consumer cost of sales of $18.5 million related to Honey Birdette,
as well as expenses related to our creator platform of $4.1 million, partly
offset by a decrease of $2.7 million in the cost of sales as a result of lower
product and shipping costs for e-commerce and lower cost of sales from TLA
primarily due to the amortization of the inventory step-up in the prior year
comparative period of $2.3 million.

Related Party Expenses

Related party expenses decreased by $0.3 million, or 100%, due to the
termination of our management agreement with an affiliate of one of our
stockholders for management and consulting services in the first quarter of 2021
upon consummation of the Business Combination.

Selling and Administrative Expenses

Selling and administrative expenses increased by $14.6 million, or 25%,
primarily due to increased direct-to-consumer costs of $19.9 million related to
the acquisition of Honey Birdette and $4.8 million related to the acquisition of
TLA, higher e-commerce marketing costs of $3.4 million, higher employee
compensation related costs of $11.6 million, $4.1 million of expenses
attributable to our creator platform as well as increased cloud-based software
and technology infrastructure investments of $2.8 million, partly offset by
$27.9 million of non-cash fair value change due to the contingent liabilities
fair value remeasurement relating to our acquisitions, and $5.0 million of bonus
payments in the prior year comparative period.

Other Operating Expenses

Other operating expenses increased by $4.9 million, or 100%, due to impairment
of digital assets recognized in the six months ended June 30, 2022 as a result
of the fair value of our digital assets decreasing below their carrying value.
                                       42
--------------------------------------------------------------------------------

Nonoperating Income (Expense)

Interest Expense

Interest expense increased by $2.6 million, or 47%, from $5.6 million, primarily
due to incremental borrowings of $70.0 million pursuant to the Amendment No. 1
to the New Credit Agreement and the Aircraft Term Loan of $9.0 million offset by
the lower interest rate obtained pursuant to the Refinancing.

Loss on Extinguishment of Debt

Loss on extinguishment of debt decreased by $1.2 million, or 100%, due to the
Refinancing in the second quarter of 2021.

Fair Value Remeasurement Gain

Fair value remeasurement gain increased by $1.8 million, or 100%, due to the
remeasurement of our preferred stock liability to its fair value at June 30,
2022.

Other (Expense) Income, Net

Other (expense) income, net decreased by $1.1 million, primarily due to the $0.7
million gain from settlement of convertible promissory notes recognized during
the first quarter of 2021, as we settled the convertible promissory note payable
to UTA at a 20% discount.

Benefit (Expense) from Income Taxes

Provision for income taxes increased from $0.1 million of tax benefit during the
six months ended June 30, 2021 to $3.3 million of tax benefit during the six
months ended June 30, 2022. During the six months ended June 30, 2022, we
recognized a net discrete tax benefit of $2.8 million, primarily related to (i)
Section 162(m) limitations, (ii) stock compensation windfall and shortfall
adjustments, and (iii) withholding tax prior year true-up adjustments. During
the six months ended June 30, 2021,we recognized a net discrete tax benefit of
$0.6, primarily related to the release of valuation allowance due to purchase
accounting deferred tax adjustments.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the
following non-GAAP measure is useful in evaluating our operational performance.
We use the following non-GAAP financial information to evaluate our ongoing
operations and for internal planning and forecasting purposes. We believe that
non-GAAP financial information, when taken collectively, may be helpful to
investors in assessing our operating performance.

EBITDA and Adjusted EBITDA

"EBITDA" is defined as net income or loss before interest, income tax expense or
benefit, and depreciation and amortization. "Adjusted EBITDA" is defined as
EBITDA adjusted for stock-based compensation and other special items determined
by management. Adjusted EBITDA is intended as a supplemental measure of our
performance that is neither required by, nor presented in accordance with, GAAP.
We believe that the use of EBITDA and Adjusted EBITDA provides an additional
tool for investors to use in evaluating ongoing operating results and trends and
in comparing our financial measures with those of comparable companies, which
may present similar non-GAAP financial measures to investors. However, investors
should be aware that when evaluating EBITDA and Adjusted EBITDA, we may incur
future expenses similar to those excluded when calculating these measures. In
addition, our presentation of these measures should not be construed as an
inference that our future results will be unaffected by unusual or nonrecurring
items. Our computation of Adjusted EBITDA may not be comparable to other
similarly titled measures computed by other companies, because all companies may
not calculate Adjusted EBITDA in the same fashion.

In addition to adjusting for non-cash stock-based compensation, we typically
adjust for nonoperating expenses and income, such as management fees paid to one
of our stockholders, merger related bonus payments, non-recurring special
projects including the implementation of internal controls, expenses associated
with financing activities, acquisition related inventory step-up amortization
and costs, the expense associated with reorganization and severance resulting in
the elimination or rightsizing of specific business activities or operations as
we transform from a print and digital media business to a commerce centric
business.

Because of these limitations, EBITDA and Adjusted EBITDA should not be
considered in isolation or as a substitute for performance measures calculated
in accordance with GAAP. We compensate for these limitations by relying
primarily on our GAAP results and using EBITDA and Adjusted EBITDA on a
supplemental basis. Investors should review the reconciliation of net loss to
EBITDA and Adjusted EBITDA below and not rely on any single financial measure to
evaluate our business.

The following table reconciles net loss to EBITDA and Adjusted EBITDA:

                                       43
--------------------------------------------------------------------------------

                                               Three Months Ended June 30,                 Six Months Ended June 30,
                                                 2022                  2021                 2022                 2021
                                                                           (in thousands)
Net loss                                   $       (8,315)$  (8,916)$      (2,772)$ (13,913)
Adjusted for:
Interest expense                                    4,083              2,253                  8,133              5,550
Loss on extinguishment of debt                          -              1,217                      -              1,217
Provision for income taxes                           (514)             2,003                 (3,298)               (91)
Depreciation and amortization                       2,457              1,034                  5,962              1,762
EBITDA                                             (2,289)            (2,409)                 8,025             (5,475)
Adjusted for:
Stock-based compensation                            4,747                361                 11,286              3,859
Adjustments                                         1,431              1,460                  2,720              7,500
Amortization of inventory step-up                       -              2,250                      -              2,250
Contingent consideration fair value                (8,641)                 -                (27,939)                 -

remeasurement

Preferred stock fair value remeasurement           (1,754)                 -                 (1,754)                 -
Impairments                                         3,937                  -                  6,296                  -
Acquisition related costs                               -              4,218                      -              4,218
Management fees and expenses                            -                  -                      -                250
Adjusted EBITDA                            $       (2,569)$   5,880$      (1,366)$  12,602

•Adjustments for the three and six months ended June 30, 2022 are related to
severance, and consulting, advisory and other costs relating to special
projects, including the implementation of internal controls over financial
reporting and adoption of accounting standards.

•Contingent consideration fair value remeasurement for the three and six months
ended June 30, 2022 relates to non-cash fair value change due to contingent
liabilities fair value remeasurement resulting from the acquisition of Honey
Birdette and GlowUp.

•Preferred stock fair value remeasurement for the three and six months ended
June 30, 2022 relates to non-cash fair value change due to preferred stock
liability fair value remeasurement.

•Impairments for the three and six months ended June 30, 2022 relate to the
impairment of digital assets and asset impairment related to intangible assets
acquired during the three months ended June 30, 2022.

•Adjustments for the three and six months ended June 30, 2021 are primarily
related to bonus payments in connection with the Business Combination, as well
as consulting, advisory and other costs relating to non-recurring items and
special projects, including, the implementation of internal controls over
financial reporting, and executive search costs.

•Amortization of inventory valuation step-up adjustment for the three and six
months ended June 30, 2021 relates to amortization of a non-cash inventory
valuation step-up as part of the purchase accounting resulting from the
acquisition of TLA.

•Acquisition related costs for the three and six months ended June 30, 2021
include consulting and advisory costs related to acquisition activities.

•Management fees and expenses adjustments for the six months ended June 30, 2021
represent fees paid to one of our stockholders.

                                       44
--------------------------------------------------------------------------------

Segments

Our Chief Executive Officer is our Chief Operating Decision Maker ("CODM"). Our
segment disclosure is based on our intention to provide the users of our
consolidated financial statements with a view of the business from our
perspective. We operate our business in three primary operating and reportable
segments: Licensing, Direct-to-Consumer, and Digital Subscriptions and Content.
Licensing operations include the licensing of one or more of our trademarks
and/or images for consumer products and location-based entertainment businesses.
Direct-to-Consumer operations include consumer products sold through third-party
retailers or online direct-to-customer. Digital Subscriptions and Content
operations include the licensing of one or more of our trademarks and/or images
for online gaming and the production, marketing and sales of programming under
the Playboy brand name, which is distributed through various channels, including
domestic and international television and sales of tokenized digital art and
collectibles.

The following are our results of financial performance by segment for each of
the periods presented:

                                                             Three Months Ended June 30,                 Six Months Ended June 30,
                                                               2022                  2021                 2022                  2021
                                                                    (in thousands)                             (in thousands)
Net revenues:
Licensing                                                $       15,876$  15,961$       30,437$  31,665
Direct-to-Consumer                                               44,601             28,014                  94,243             50,061
Digital Subscriptions and Content                                 4,694              5,704                   9,434             10,619
All Other                                                           243                172                     678                186
Total                                                    $       65,414$  49,851$      134,792$  92,531
Operating income (loss):
Licensing                                                $       12,653$  11,655$       24,122$  22,963
Direct-to-Consumer                                                  690               (656)                  2,951              1,019
Digital Subscriptions and Content                                (5,692)             1,845                  (8,052)             4,164
Corporate                                                       (13,987)           (16,289)                (18,861)           (36,098)
All Other                                                           153                  5                     546                (27)
Total                                                    $       (6,183)$  (3,440)         $          706          $  (7,979)


Licensing

Net revenues decreased by $0.1 million, or 0.5%, for the three months ended
June 30, 2022, compared to the comparable prior year period, primarily due to
lower royalties from licensing collaborations.

For the six months ended June 30, 2022, net revenues decreased by $1.2 million,
or 3.9%, compared to the comparable prior year period, primarily due to lower
royalties in 2022 due to certain amended licensing agreements and contract
terminations.

Operating income increased by $1.0 million, or 8.6%, for the three months ended
June 30, 2022, compared to the comparable prior year period, primarily due to
lower costs.

For the six months ended June 30, 2022, operating income increased by $1.2
million, or 5.0%, compared to the comparable prior year period, primarily due to
lower costs of $2.3 million, partly offset by decreased revenues of $1.2
million.

Direct-to-Consumer

Net revenues increased by $16.6 million, or 59.2%, for the three months ended
June 30, 2022, compared to the comparable prior year period, primarily due to
revenue of $22.4 million attributable to the acquisition of Honey Birdette in
the third quarter of 2021, partly offset by a decrease of $5.8 million in other
direct-to-consumer revenue.

For the six months ended June 30, 2022, net revenues increased by $44.2 million,
or 88.3%, compared to the comparable prior year period, primarily due to revenue
of $44.6 million attributable to the acquisition of Honey Birdette in the third
quarter of 2021 and $6.3 million attributable to the acquisition of TLA in the
first quarter of 2021, partially offset by a decrease in e-commerce revenue of
$6.7 million.

Operating income increased by $1.3 million, or over 100%, for the three months
ended June 30, 2022, compared to the comparable prior year period, primarily due
to operating income of $3.1 million attributable to the acquisition of Honey
Birdette in the third quarter of 2021 and $1.3 million attributable to the
acquisition of TLA in the first quarter of 2021, offset by higher e-commerce
marketing costs of $1.7 million and $1.4 million primarily as a result of lower
e-commerce sales.
                                       45
--------------------------------------------------------------------------------

For the six months ended June 30, 2022, operating income increased by $1.9
million, or over 100%, primarily due to operating income of $6.2 million
attributable to the acquisition of Honey Birdette in the third quarter of 2021
and $2.6 million attributable to the acquisition of TLA in the first quarter of
2021, offset by higher e-commerce marketing costs of $3.4 million and $4.1
million of lower e-commerce sales.

Digital Subscriptions and Content

Net revenues decreased by $1.0 million for the three months ended June 30, 2022,
compared to the comparable prior year period of $5.7 million, attributable to
the sale of non-fungible tokens in the second quarter of 2021.

For the six months ended June 30, 2022, net revenues decreased by $1.2 million,
or 11.2%, compared to the comparable prior year period. The decrease was
primarily attributable to the sale of non-fungible tokens in the second quarter
of 2021.

Operating income decreased by $7.5 million, or more than 100%, for the three
months ended June 30, 2022, compared to the comparable prior year period. The
decrease was primarily attributable to the digital assets impairment of $2.6
million, as well as expenses related to our creator platform of $5.7 million.

For the six months ended June 30, 2022, operating income decreased by $12.2
million, or more than 100%, compared to the comparable prior year period,
primarily due to the impairment of digital assets of $4.9 million and expenses
related to our creator platform of $8.2 million.

All Other

The increase in net revenues for the three months ended June 30, 2022, compared
to the comparable prior year period, was immaterial.

For the six months ended June 30, 2022 net revenues increased by $0.5 million,
or more than 100%, compared to the comparable prior year period. The increase
was primarily attributable to revenue recognized from the fulfillment of
magazine subscription obligations in the first quarter of 2022.

The increase in operating income for the three months ended June 30, 2022,
compared to the comparable prior year period, was immaterial.

For the six months ended June 30, 2022, operating income increased by $0.6
million, or more than 100%, compared to the comparable prior year period,
primarily due to revenue recognized from the fulfillment of magazine
subscription obligations in the first quarter of 2022.

Corporate

Corporate expenses decreased by $2.3 million, or 14.1%, for the three months
ended June 30, 2022. compared to the comparable prior year period, primarily due
to $8.6 million of non-cash fair value change due to contingent liabilities fair
value remeasurement relating to our acquisitions, $4.2 million of acquisition
related costs and expenses in the prior year comparative period, partly offset
by higher employee compensation related costs of $6.4 million and increased
cloud-based software and technology infrastructure investments of $1.6 million.

For the six months ended June 30, 2022, corporate expenses decreased by $17.2
million, or 47.8%, compared to the comparable prior year period, primarily due
to $27.9 million of non-cash fair value change due to contingent liabilities
fair value remeasurement relating to our acquisitions, $4.2 million of
acquisition related costs and costs associated with our transition to a public
company in the prior year comparative period, partly offset by higher employee
compensation related costs of $11.4 million and increased cloud-based software
and technology infrastructure investments of $2.5 million.

Liquidity and Capital Resources

Sources of Liquidity

Our main source of liquidity is cash generated from operating and financing
activities, which primarily includes cash derived from revenue generating
activities, in addition to proceeds from our public offering and issuance of
debt in 2021, and proceeds from the issuance and sale of Series A Preferred
Stock in May 2022.

                                       46
--------------------------------------------------------------------------------

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.

On May 16, 2022, we issued and sold 25,000 shares of Series A Preferred Stock to
Drawbridge DSO Securities LLC at a price of $1,000 per share, resulting in total
gross proceeds to us of $25.0 million, and we agreed to sell to the Purchaser,
and the Purchaser agreed to purchase from us, up to an additional 25,000 shares
of Series A Preferred Stock on the terms set forth in the securities purchase
agreement entered into by us and the Purchaser. We incurred approximately $1.5
million of fees associated with the transaction, $1.3 million of which was
netted against the gross proceeds.

As of June 30, 2022, our principal source of liquidity was our cash in the
amount of $44.6 million which is primarily held in operating and deposit
accounts. Although consequences of the COVID-19 pandemic and resulting economic
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 will be sufficient to fund our operations, including lease
obligations, debt service requirements, capital expenditures and working capital
obligations for at least the next 12 months. We may seek additional equity or
debt financing in the future to satisfy capital requirements, respond to adverse
developments such as the COVID-19 pandemic, changes in our circumstances or
unforeseen events or conditions, or fund organic or inorganic growth
opportunities. In the event that additional financing is required from third
party sources, we may not be able to raise it on acceptable terms or at all.

Debt

2014 Term Loan

In June 2014, we borrowed $150.0 million under a four-and-one-half-year term
loan maturing on December 31, 2018, at an effective rate of 7.0% from DBD Credit
Funding LLC pursuant to a credit agreement (the "Credit Agreement"). From 2016
to 2020, the term loan was amended multiple times to borrow an additional
$12.0 million, increase the commitment amount, extend the maturity date to
December 31, 2023, set up a debt reserve account and excess cash account, and to
revise the quarterly principal payments and applicable margin rates, among other
amendments. Our debt bore interest at a rate per annum equal to the Eurodollar
Rate for the interest period in effect plus the applicable margin in effect from
time to time. The Eurodollar Rate is the greater of (a) an interest rate per
annum (rounded upward, if necessary, to the next 1/100th of 1%) determined by
the administrative agent divided by 1 minus the statutory reserves (if any) and
(b) 1.25% per annum.

In January 2021, the term loan was amended to defer the excess cash flow payment
due in January 2021 to April 2021 among other amendments. The terms of the
modified term loan were not considered substantially different and the amendment
was accounted for as a modification. On May 25, 2021, the Credit Agreement was
repaid in full and terminated upon completion of the refinancing described
below.

New Term Loan

On May 25, 2021, we borrowed $160.0 million under a term loan maturing on May
25, 2027 (the "New Term Loan"), at an effective rate of LIBOR plus 5.75%, with a
LIBOR floor of 0.50%. The New Term Loan replaced the 2014 Term Loan. The
interest rate applicable to borrowings under the New Term Loan may subsequently
be adjusted on periodic measurement dates provided for under the New Credit
Agreement based on the type of loans borrowed by us and our total leverage ratio
at such time. At our option, we may borrow loans which accrue interest at (i) a
base rate (with a floor of 1.50%) or (ii) at LIBOR, in each case plus an
applicable per annum margin. The per annum applicable margin for base rate loans
is 4.25% or 4.75%, with the lower rate applying when the total leverage ratio as
of the applicable measurement date is 3.00 to 1.00 or less, and the per annum
applicable margin for LIBOR loans is 5.25% or 5.75%, with the lower rate
applying when the total leverage ratio as of the applicable measurement date is
3.00 to 1.00 or less. The New Term Loan requires quarterly amortization payments
of $0.4 million, commencing on September 30, 2021, with the balance becoming due
at maturity. The interest rate on the New Term Loan was 6.25% as of June 30,
2022.

Our obligations pursuant to the New Credit Agreement are guaranteed by us and
any of our current and future wholly-owned, domestic subsidiaries, subject to
certain exceptions. In connection with the New Credit Agreement, the Company and
the other guarantor subsidiaries of the Company entered into a Pledge and
Security Agreement with the collateral agent, pursuant to which we granted a
senior security interest to the agent in substantially all of our assets
(including the stock of certain of our subsidiaries) in order to secure our
obligations under the New Credit Agreement.
                                       47
--------------------------------------------------------------------------------

We entered into Amendment No. 1 to the New Credit Agreement, dated as of August
11, 2021, 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.

The Incremental Term Loan was incurred on materially the same terms as the New
Term Loan. The New Credit Agreement, as amended by the First Amendment, requires
quarterly amortization payments of $0.6 million, commencing on September 30,
2021. The Incremental Term Loan, together with cash on hand, was used to finance
the acquisition of Honey Birdette and to pay fees and expenses incurred in
connection with the Incremental Term Loan and such acquisition.

On August 8, 2022, we entered into Amendment No. 2 to the New Credit Agreement,
by and among the Company, 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. See Note 19, Subsequent
Events, within the notes to our unaudited condensed consolidated financial
statements, in addition to Part II, Item 5, "Other Information" of this
Quarterly Report, for a summary of the Second Amendment.

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 June 30, 2022. The Aircraft Term Loan requires monthly amortization
payments of approximately $0.1 million, commencing on July 1, 2021. We incurred
$0.1 million of financing costs related to the Aircraft Term Loan as of December
31, 2021, which were capitalized.

Promissory Notes – Creative Artists Agency and Global Brands Group

In December 2016, we entered into a global consumer products licensing agency
representation agreement with Creative Artists Agency - Global Brands Group LLP
("CAA-GBG"). Concurrently, we borrowed $13.0 million from CAA-GBG pursuant to
the terms of a promissory note. The promissory note was noninterest bearing and
was to be repaid in monthly installments in an amount equal to 11.00% of the
monthly collections under the representation agreement beginning in 2017 and
ending in 2021. In August 2018, we and CAA-GBG agreed to terminate the original
promissory note and issue convertible promissory notes with the principal
amounts equal to the outstanding amount of the original promissory note. A
convertible promissory note was issued to CAA Brand Management, LLC ("CAA") for
$2.7 million and a convertible promissory note was issued to GBG International
Holding Company Limited ("GBG") for $7.3 million. These notes were noninterest
bearing and were convertible into shares of our common stock no later than
October 31, 2020, which was extended to December 31, 2020. In December 2020, we
repaid the outstanding principal balance of the GBG note at a 20% discount
resulting in a gain on settlement of $1.5 million. In January 2021, the
outstanding note with CAA was converted into 51,857 shares of Legacy Playboy's
common stock, which was exchanged for 290,563 shares of our common stock upon
the closing of the Business Combination in February 2021.

Convertible Promissory Notes – United Talent Agency

In March and June 2018, we issued convertible promissory notes to UTA for an
aggregate principal amount of $3.5 million. These notes were noninterest bearing
and were convertible into shares of our common stock no later than October 31,
2020, which was extended to December 31, 2020. In January 2021, the settlement
terms of the outstanding notes were amended to extend the term to the one-month
anniversary of the termination or expiration of the Merger Agreement. In
February 2021, we repaid the outstanding principal balance of the notes at a 20%
discount resulting in a gain on settlement of $0.7 million.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

                                          Six Months Ended June 30,
                                             2022                 2021
                                                (in thousands)
Net cash provided by (used in):
Operating activities                $      (43,055)$ (21,618)
Investing activities                        (5,178)              (37,752)
Financing activities                        23,451               301,469


                                       48

--------------------------------------------------------------------------------

Cash Flows from Operating Activities

Net cash used in operating activities was $43.1 million, including a net loss of
$2.8 million for the six months ended June 30, 2022. Net loss was adjusted for
non-cash charges of $2.2 million, primarily attributable to stock-based
compensation expense of $11.3 million, impairment of digital and other assets of
$6.3 million and $6.0 million of depreciation and amortization expense and fixed
asset impairments, partially offset by changes in the fair value of contingent
liabilities of $29.7 million, amortization of right of use assets of $4.2
million and deferred income taxes of $2.8 million. Other changes in assets and
liabilities represent items that had a current period cash flow impact, such as
changes in working capital. Net cash outflows from changes in working capital of
$38.1 million were primarily associated with an increase in receivables and
prepaid and other assets offset by a decrease in accrued payables, salaries,
wages, and employee benefits, deferred revenues, operating lease liabilities and
other current liabilities.

Net cash used in operating activities was $21.6 million, including a net loss of
$13.9 million for the six months ended June 30, 2021. Net loss was adjusted for
non-cash charges of $7.6 million, primarily attributable to stock-based
compensation expense of $3.9 million, amortization of right of use assets of
$2.5 million and $1.8 million of depreciation and amortization expense. Other
changes in assets and liabilities represent items that had a current period cash
flow impact, such as changes in working capital. Net cash outflows from changes
in working capital of $15.3 million were primarily associated with an increase
in contract assets, receivables and other assets and liabilities, and a decrease
in accrued salaries, wages, and employee benefits, offset by an increase in
accounts payable largely associated with infrastructure development costs
incurred as part of our transition to a public company.

Cash Flows from Investing Activities

Net cash used in investing activities was $5.2 million for the six months ended
June 30, 2022, which was primarily due to the acquisition of property and
equipment.

Net cash used in investing activities was $37.8 million for the six months ended
June 30, 2021, which was primarily due to the acquisition of TLA and purchase of
an aircraft.

Cash Flows from Financing Activities

Net cash provided by financing activities was $23.5 million for the six months
ended June 30, 2022, which was primarily due to net proceeds of $23.8 million
from our issuance of preferred stock.

Net cash provided by financing activities was $301.5 million for the six months
ended June 30, 2021, which was primarily due to net proceeds from our June 2021
public offering, as well as issuance of long-term debt, net cash acquired from
the Business Combination and PIPE Investment, partially offset by the repayment
of borrowings and the payment of financing costs.

Contractual Obligations

There have been no material changes to our contractual obligations from December
31, 2021, as disclosed in our audited consolidated financial statements included
in our Annual Report on Form 10-K filed on March 16, 2022, other than those
relating to new store leases entered into in the second quarter of 2022, as
disclosed in Note 13 "Commitments and Contingencies".

Critical Accounting Policies and Estimates

Our interim condensed consolidated financial statements have been prepared in
accordance with US GAAP. The preparation of these financial statements requires
us to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities as of
the date of the financial statements, as well as the reported expenses incurred
during the reporting periods. Estimates and judgments used in the preparation of
our interim condensed consolidated financial statements are, by their nature,
uncertain and unpredictable, and depend upon, among other things, many factors
outside of our control, such as demand for our products, inflation, foreign
currency exchange rates, economic conditions and other current and future
events, such as the impact of the COVID-19 pandemic and global hostilities. Our
estimates are based on our historical experience and on various other factors
that we believe are reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

During the six months ended June 30, 2022, there were no material changes to our
critical accounting policies or in the methodology used for estimates from those
described in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in our   Annual Report on Form 10-K   filed with
the SEC on March 16, 2022.
                                       49
--------------------------------------------------------------------------------

Recent Accounting Pronouncements

There were no recently adopted accounting pronouncements applicable to the
Company for the quarter ended June 30, 2022. We do not believe that there were
any recently issued, but not yet effective, accounting pronouncements that would
have a material effect on our financial statements.

© Edgar Online, source Glimpses