GoPro entered into a second lien credit agreement providing for a secured term loan in an aggregate principal amount of $50 million from Farallon Capital Management, and certain of its affiliates. The company closed the debt financing as part of a strategic initiative to bolster its balance sheet and placed approximately $94 million in escrow to repay the convertible debt maturing in November 2025.

"This debt financing underscores our disciplined approach to capital management and reinforces our commitment to achieving long-term financial strength," said Brian McGee, GoPro's CFO and COO. "Farallon's understanding of our business needs allowed us to develop a solution that enhances our balance sheet in a way that is intended to provide the flexibility we need to meet our near-term obligations while continuing to execute on the business."

GoPro's obligations under the Second Lien Credit Agreement are guaranteed by certain of GoPro's domestic subsidiaries and are secured by a second lien security interest in substantially all of the assets of GoPro, including its intellectual property, and a pledge of shares in certain of GoPro's subsidiaries.

The Second Lien Credit Agreement contains customary representations, warranties and affirmative and negative covenants, including financial covenants. The negative covenants include restrictions on the incurrence of liens and indebtedness, certain investments, dividends, stock repurchases and other matters, all subject to certain exceptions. The financial covenants require (a) GoPro to maintain liquidity (defined as unrestricted cash, cash equivalents and availability under the Revolving Credit Agreement (as defined below) of at least $40,000,000, subject to a step-down to $30,000,000 upon achievement of a total leverage ratio below 1.00:1.00; (b) GoPro not to have EBITDA (as defined in the Second Lien Credit Agreement) of (i) less than $10,000,000 for the fiscal quarter ending December 31, 2025, (ii) less than $10,000,000 for the period of four consecutive fiscal quarters ending March 31, 2026, (iii) $22,000,000 for the period of four consecutive fiscal quarters ending June 30, 2026, (iv) $30,000,000 for the period of four consecutive fiscal quarters ending September 30, 2026 or (v) $40,000,000 for any period of four consecutive fiscal quarters ending on or after December 31, 2026; and (c) GoPro not to permit an asset coverage ratio of less than (i) on or prior to December 31, 2025, 1.25:1.00 or (ii) thereafter, 1.15:1.00.

In connection with entering the Second Lien Credit Agreement, GoPro entered into an Amendment to its existing credit agreement with Wells Fargo Bank, National Association, as administrative agent and the lenders from time to time party thereto, in order to permit entry into the Second Lien Credit Agreement and grant the administrative agent and the lenders a first-priority security interest in all of GoPro's intellectual property registrations and applications pursuant to an Amended and Restated Guaranty and Security Agreement.

In addition, GoPro has agreed to issue to Farallon or its affiliates warrants (the "Warrants") to purchase 11,076,968 shares of Class A Common Stock, par value $0.0001 of GoPro ("Common Stock") to Farallon or its affiliates. Each Warrant has an exercise price of $1.25 per share, is immediately exercisable, will expire on August 4, 2035 (ten years from the date of issuance), and is subject to customary adjustments for certain transactions affecting GoPro's capitalization.