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System1 (NYSE: SST) debt exchange cuts over $160M and extends to 2031

Filing Impact
(Very High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

System1, Inc. entered into a comprehensive exchange agreement with all existing term loan and revolver lenders to overhaul its capital structure and settle all outstanding disputes. The company will replace its $252.6 million term loan and $50.0 million revolver with a new $150.0 million term loan maturing in January 2031, the issuance of 39,250 shares of Series A Cumulative Convertible Preferred Stock with an aggregate initial stated value of $39.3 million, and a one-time cash payment of about $31.4 million.

The preferred stock carries a 7.00% annual cumulative dividend, a liquidation preference at 1.0x stated value plus accrued dividends, and is initially convertible at $10.40 per share, representing roughly 27.4% of common equity on an as-converted basis. Holders gain the right to elect one independent director and receive consent rights over certain actions, including additional indebtedness above $175.0 million. The new term loan bears interest at SOFR + 5.00%, with up to 50% payable in kind and quarterly amortization of $375,000.

The company states that, at closing, total indebtedness will have been reduced by over $160 million from the beginning of the year and maturities extended to 2031, with 100% lender participation. Closing is subject to stockholder approval of the preferred share issuance and other conditions, and is expected in the third quarter of 2026.

Positive

  • Material deleveraging and maturity extension: The exchange is expected to reduce total indebtedness by over $160 million from the beginning of the year, replace $302.6 million of existing term and revolver debt with a $150.0 million term loan, and extend debt maturity to 2031 with 100% lender participation.

Negative

  • Preferred dividend burden and dilution: The new Series A Cumulative Convertible Preferred Stock carries a 7.00% annual dividend and is initially convertible at $10.40 per share into about 27.4% of common equity, introducing ongoing cash or PIK obligations and substantial potential dilution alongside enhanced creditor governance rights.

Insights

System1 trades debt for longer-dated loans and convertible preferred, cutting leverage but adding dilution risk.

System1 is restructuring its balance sheet by exchanging a $252.6 million term loan and $50.0 million revolver for a $150.0 million term loan due 2031, convertible preferred stock with a $39.3 million stated value, and about $31.4 million cash to lenders. Management highlights that total indebtedness should fall by over $160 million from the beginning of the year if the transaction closes.

The new Priority Term Loans carry interest at SOFR + 5.00%, with up to half of interest payable in kind at a modest rate step-up, plus quarterly amortization of $375,000 and an excess cash flow sweep. They are secured by first-priority liens and governed by customary covenants and prepayment terms, which together shape System1’s future financial flexibility.

The Series A Cumulative Convertible Preferred Stock pays a 7.00% annual dividend, is initially convertible at $10.40 per share into roughly 27.4% of common equity, and carries board representation and protective consent rights, including limits on incurring debt above $175.0 million. This combination reduces near-term refinancing pressure and settles ongoing litigation, but introduces potential equity dilution and a fixed preferred dividend burden. Execution depends on stockholder approval of the preferred issuance and satisfaction of closing conditions, with System1 expecting completion in the third quarter of 2026.

Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 3.02 Unregistered Sales of Equity Securities Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 7.01 Regulation FD Disclosure Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Existing debt exchanged $252.6 million term loan + $50.0 million revolver Outstanding principal and balance prior to exchange
New term loan $150.0 million Priority Term Loans maturing January 2031
Preferred stated value $39.3 million Initial stated value of 39,250 Series A Preferred Shares
Cash payment to lenders $31,379,300.18 Aggregate one-time cash payment under Exchange Agreement
Interest rate on new loan SOFR + 5.00% per annum Priority Term Loans, with up to 50% PIK at +0.50%
Preferred dividend rate 7.00% per annum Cumulative dividends on Series A Preferred Shares
Initial conversion price $10.40 per share Conversion price into Class A Common Stock
Equity represented if converted 27.4% of common equity As-converted basis as of Exchange Agreement date
Exchange Agreement financial
"entered into that certain Exchange Agreement (the “Exchange Agreement”) with all of the Existing Term Lenders"
Priority Term Loans financial
"a new $150.0 million term loan facility held by the Participating Lenders (the “Priority Term Loans”)"
Series A Cumulative Convertible Preferred Stock financial
"issuance of 39,250 shares of Series A Cumulative Convertible Preferred Stock (the “Preferred Shares”)"
A Series A cumulative convertible preferred stock is a special class of company shares that pays dividends that accumulate if not paid and can be converted into common shares at set terms. Think of it as a VIP ticket that guarantees backpay for missed perks and also gives the holder the option to swap into regular tickets later. For investors it matters because it offers higher priority for dividend and liquidation payments while also creating potential dilution of common shareholders if converted.
Certificate of Designation regulatory
"Pursuant to the certificate of designation of the Preferred Shares (the “Certificate of Designation”)"
A certificate of designation is a formal document that spells out the specific rights and rules attached to a particular class or series of stock, usually preferred shares. Think of it as a rulebook or menu that lists dividend terms, liquidation priority, conversion or redemption rights and any special voting protections; investors use it to judge how much income, control or downside protection those shares will provide compared with other securities.
excess cash flow sweep financial
"the Priority Term Loans will also be subject to an excess cash flow sweep as contemplated in the Priority Credit Agreement"
broad-based weighted average anti-dilution financial
"The Certificate of Designation will also contain customary broad-based weighted average anti-dilution protections"
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Understanding 8-K Material Events →
0001805833FALSE00018058332026-05-292026-05-29

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 29, 2026
System1, Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-39331
92-3978051
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification Number)
4235 Redwood Avenue
Los Angeles, California
90066
(Address of principal executive offices)
(Zip Code)

(310) 924-6037
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per share
SST
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
1


Section 1 - Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed, on January 27, 2022, certain subsidiaries of System1, Inc., a Delaware corporation (the “Company”), including Orchid Merger Sub II, LLC, a Delaware limited liability company (the “Existing Borrower”), and S1 Holdco LLC, a Delaware limited liability company, entered into that certain Credit and Guaranty Agreement (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Existing Credit Agreement” and the term loans thereunder, the “Existing Term Loans” and the revolving loans thereunder, the “Existing Revolving Loans” and, together with the Existing Term Loans, the “Existing Loans” and the revolving loan commitments thereunder, the “Existing Revolving Commitments”), with the term loan lenders from time to time party thereto (solely in their capacity as such, the “Existing Term Lenders”), the revolving lenders from time to time party thereto (solely in their capacity as such, the “Existing Revolving Lenders”, and together with the Existing Term Lenders, the “Existing Lenders”), the letter of credit issuers from time to time party thereto and Ankura Trust Company, LLC, as successor by appointment to Bank of America, N.A., as administrative agent and collateral agent (in such capacities, the “Existing Agent”).

On May 29, 2026, S1 Holdings Finco, LLC, a Delaware limited liability company and a subsidiary of the Company (the “Priority Borrower”), and the Existing Borrower entered into that certain Exchange Agreement (the “Exchange Agreement”) with all of the Existing Term Lenders and the Existing Revolving Lenders (the “Participating Lenders”). The Exchange Agreement sets forth the principal terms of a comprehensive debt exchange and settlement of all outstanding disputes with the Participating Lenders (collectively, the “Transaction”).

Pursuant to the Exchange Agreement, on the contemplated effective date of the exchange (the “Exchange Effective Date”), (a) all of the Existing Loans and all of the Existing Revolving Commitments under the Existing Credit Agreement shall be deemed repaid in full and terminated, in exchange for (b) the receipt by each Participating Lender of their pro rata share of the consideration specified in the Exchange Agreement on the terms and subject to the conditions set forth therein. The consideration under the Exchange Agreement consists of (i) a new $150.0 million term loan facility held by the Participating Lenders (the “Priority Term Loans”), (ii) the issuance of 39,250 shares of Series A Cumulative Convertible Preferred Stock (the “Preferred Shares”) to the Participating Lenders, with an aggregate initial stated value of $39.3 million (the “Share Consideration”), and (iii) a one-time cash payment to the Participating Lenders in the aggregate amount of $31,379,300.18, which amount shall be reduced dollar-for-dollar by the sum of (A) the aggregate amount of all amortization payments made by the Existing Borrower under the Existing Credit Agreement during the period from and including April 1, 2026 until the Exchange Effective Date (the “Interim Period”) and (B) the difference between (1) the aggregate amount of regularly scheduled interest payments actually made by the Existing Borrower under the Existing Credit Agreement during the Interim Period and (2) the amount of regularly scheduled interest payments the Priority Borrower would have been required to make under the Priority Credit Agreement during the Interim Period.

Pursuant to the financing agreement related to the Priority Term Loans (the “Priority Credit Agreement”) to be entered into at the Exchange Effective Date, the Priority Term Loans will mature in January 2031 and bear interest at a rate per annum equal to SOFR + 5.00%; provided that up to 50% of the interest accruing may, at the election of the Priority Borrower be paid by capitalizing such interest and adding such capitalized interest to the then outstanding principal amount of the Priority Term Loans, subject to an increase to the applicable interest rate for such capitalized portion by 0.50%. Amortization will be required to be paid in quarterly installments equal to $375,000, beginning with the first full fiscal quarter following the Exchange Effective Date, and the principal balance of the the Priority Term Loans will also be subject to an excess cash flow sweep as contemplated in the Priority Credit Agreement. The Priority Term Loans will be secured by first‑priority liens on substantially all assets of the Priority Borrower and the guarantors. The Priority Credit Agreement will contain customary affirmative and negative covenants, events of default and mandatory prepayment provisions for transactions of this type.

Pursuant to the stock purchase agreement related to the Share Consideration (the “Stock Purchase Agreement”) to be entered into as of the Exchange Effective Date, the Participating Lenders will receive the Share Consideration in exchange for a portion of the Existing Loans pursuant to the Exchange Agreement. The Stock Purchase Agreement will contain customary representations and warranties of the Company and the Participating Lenders, including with respect to organization and authority, capitalization, compliance with laws, accredited investor status, investment intent and non-reliance, as well as customary covenants, closing conditions and expense allocation provisions for transactions of this type. The Stock Purchase Agreement will also provide the Participating Lenders with customary resale registration rights with respect to the shares of Class A Common Stock (the “Common Stock”) issuable upon conversion of the Preferred Shares.
2


Pursuant to the certificate of designation of the Preferred Shares (the “Certificate of Designation”) to be filed as of the Exchange Effective Date, the Preferred Shares will accrue cumulative dividends at a rate of 7.00% per annum, compounded quarterly unless paid in cash, and will have a liquidation preference equal to 1.0x the initial stated value thereof plus accrued and unpaid dividends. The Preferred Shares will initially be convertible at the option of the holders into shares of the Company’s Common Stock at a conversion price of $10.40 per share, subject to customary anti-dilution adjustments, representing approximately 27.4% of the Company’s common equity on an as-converted basis as of the date the Exchange Agreement was entered into. The conversion ratio will initially be approximately 96.178 shares of Common Stock per Preferred Share and will increase as dividends accrue. The Preferred Shares will be redeemable at the election of the holders for cash in an amount equal to the initial stated value thereof plus accrued and unpaid dividends, subject to the availability of legally available funds under Delaware law. The holders of the Preferred Shares will have the right to elect one independent director to the Company’s Board of Directors for so long as at least 50% of the originally issued Preferred Shares remain outstanding, and will have customary protective consent rights with respect to certain adverse actions, including adverse charter amendments, restricted payments, issuances of senior or pari passu securities and the incurrence of indebtedness in excess of $175.0 million, for so long as at least 25% of the originally issued Preferred Shares remain outstanding. The Certificate of Designation will also contain customary broad-based weighted average anti-dilution protections, subject to customary exceptions.

Pursuant to the Exchange Agreement, the parties thereto agree that on or prior to the Exchange Effective Date a joint stipulation of settlement and dismissal with prejudice will be filed in the litigation among certain of such parties currently pending in the United States District Court for the Southern District of New York, pursuant to which any and all claims and causes of action asserted against any party in such action will be dismissed with prejudice.

The effectiveness of the Transaction contemplated by the Exchange Agreement is subject to the satisfaction of the closing conditions detailed in the Exchange Agreement, including approval by the Company’s stockholders of the issuance of the Share Consideration required by Rule 312.03 of the NYSE Listed Company Manual, which the Company intends to seek at its 2026 annual meeting of stockholders. The Company expects the transaction to close in the third quarter of 2026 following its annual meeting of stockholders.

The Exchange Agreement contains representations and warranties, covenants and indemnification provisions customary for similar transactions. The representations, warranties and covenants contained in the Exchange Agreement were made solely for the benefit of the applicable parties to the Exchange Agreement and may be subject to limitations agreed upon by the applicable contracting parties. There is no assurance that the transaction contemplated by the Exchange Agreement will be consummated on the terms described above, on a timely basis or at all.

The foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Exchange Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Cautionary Note Regarding Forward-Looking Statements

This Form 8-K includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, particularly any statements or materials regarding System1’s future results. Forward-looking statements include, but are not limited to, statements regarding System1 or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “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.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause System1’s actual financial results or operating performance to be materially different from those expressed or implied by these forward-looking statements. Readers or users of this Form 8-K should carefully review the “Risk Factors” and other information included in our Annual Report on Form 10-K for the fiscal year ending December 31, 2025, as well as our Form 10-Qs, Form 8-Ks and other reports filed with the Securities and Exchange Commission (the “SEC”) from time to time. Please refer to these SEC filings for additional information regarding the risks and other factors that may impact System1’s business, prospects, financial results and operating performance.
3


Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from any forward-looking statements contained in this Form 8-K. Forward-looking statements speak only as of the date they are made, and System1 does not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.


Section 2 - Financial Information

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The matters described in Item 1.01 of this Current Report on Form 8-K are incorporated herein by reference.


Section 3 - Securities and Trading Markets

Item 3.02 Unregistered Sales of Equity Securities.

The matters described in Item 1.01 of this Current Report on Form 8-K are incorporated herein by reference.


Section 7 - Regulation FD

Item 7.01 Regulation FD Disclosure.

On June 1, 2026, the Company issued a press release announcing the entry into the Exchange Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report and is incorporated by reference herein.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Securities Act or the Exchange Act unless specifically identified therein as being incorporated therein by reference.


Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.
Description
10.1
Exchange Agreement*
99.1
Press Release of System1, Inc., dated June 1, 2026
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule and/or exhibit to the Securities and Exchange Commission upon request.
4

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

System1, Inc.
Date:
June 1, 2026
By:
/s/ Tridivesh Kidambi
Name:
Tridivesh Kidambi
Title:
Chief Financial Officer
5
Exhibit 99.1

system1logobmpa.jpg

System1 Strengthens Capital Structure and Reduces Total Debt Through Exchange Transaction With Lenders

•Secures new $150.0 million term loan with extended maturity to 2031, replacing $302.6 million existing outstanding term loan and revolver.
•Participation from all existing term loan and revolver lenders.
•Enhances long-term financial flexibility and supports strategic execution.
•Transaction expected to close in the third quarter of 2026, subject to shareholder approval.

LOS ANGELES, CA – June 1, 2026 – System1, Inc. (NYSE: SST) (“System1” or the “Company”), which operates flagship internet utilities including CouponFollow, MapQuest, and Startpage.com, and a best-in-class customer acquisition and marketing platform powered by artificial intelligence, today announced that on May 29, 2026, it entered into a comprehensive transaction including a debt exchange agreement with all of its existing term loan and revolver lenders (the “Lenders”) and a full settlement of all outstanding disputes with the Lenders.

Under the exchange agreement transaction, the Company will exchange its existing term loan facility, which currently has an outstanding principal balance of $252.6 million and a maturity date in July 2027, and its existing revolving credit facility, which has a balance of $50.0 million and a maturity date in January 2027, for a new $150.0 million term loan facility maturing in January 2031 held by the Lenders, the issuance of shares to the Lenders of convertible preferred stock with an aggregate initial stated value of $39.3 million, subject to redemption in January 2031, and a one-time cash payment to the Lenders in the aggregate amount of approximately $31.4 million.

Issuance of the convertible preferred stock remains subject to approval by System1 shareholders, which approval is a condition to the closing of the transaction. The Company expects the transaction to close in the third quarter of 2026 following its annual shareholder meeting, the timing of which will be announced at a later date.

“We are grateful to our lender group for their partnership and constructive engagement throughout this process,” said Michael Blend, Co-Founder, Chairman and Chief Executive Officer of System1. “This transaction materially strengthens our balance sheet and provides a long-term capital structure that supports the focus and discipline we are bringing to the business. We believe this agreement positions System1 to continue executing against our strategic priorities while creating long-term value for shareholders.”

“Through this exchange we have delivered on our commitment to strengthening our capital structure and improving leverage over time,” commented Tridivesh Kidambi, Chief Financial Officer of System1. “At the close of the transaction, we will have reduced our total indebtedness by over $160 million from the beginning of the year and extended our debt maturity cycle to 2031, with 100% lender participation. With the enhanced financial flexibility this transaction provides, we remain fully focused on executing on our strategic initiatives, driving meaningful growth and delivering long-term value to our shareholders.”

Management will host a conference call at 5:00 PM ET today to discuss the transaction. The live webcast and replay will be accessible on the Company’s Investor Relations website at ir.system1.com.

The Company has filed a Form 8-K with the Securities and Exchange Commission providing additional details regarding this transaction. The foregoing description of the transaction does not purport to be complete and is qualified in its entirety by reference to the Form 8-K and exhibits filed therewith.

About System1, Inc.

System1 operates flagship internet utilities including CouponFollow, MapQuest, and Startpage.com, and a best-in-class marketing platform powered by artificial intelligence, enabling third party publishers to monetize and
maximize the value of user traffic across a wide range of advertising category verticals. For more information, visit www.system1.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, particularly any statements or materials regarding System1’s future results. Forward-looking statements include, but are not limited to, statements regarding System1 or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “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.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause System1’s actual financial results or operating performance to be materially different from those expressed or implied by these forward-looking statements. Readers or users of this press release should evaluate the risk factors summarized below, which summary list is not exclusive. Readers or users of this press release should also carefully review the “Risk Factors” and other information included in our Annual Report on Form 10-K for the fiscal year ending December 31, 2025, as well as our Form 10-Qs, Form 8-Ks and other reports filed with the Securities and Exchange Commission (the “SEC”) from time to time. Please refer to these SEC filings for additional information regarding the risks and other factors that may impact System1’s business, prospects, financial results and operating performance.

Such risks, uncertainties and assumptions include, but are not limited to: (1) our ability to maintain our key relationships with network partners and advertisers, including our monetization arrangements; (2) our ability to collect, process, effectively utilize and safely store the first party data that we obtain through our services; (3) the performance of our marketing platform; (4) changes in customer demand for our services and our ability to quickly adapt to such changes; (5) our ability to maintain and attract consumers and advertisers in the face of changing economic or competitive conditions; (6) our ability to improve and maintain adequate internal control over financial reporting and remediate identified material weaknesses; (7) our ability to successfully source and complete acquisitions and to integrate the operations of companies System1 acquires; (8) our ability to raise financing in the future as and when needed or on market terms; (9) our ability to compete with existing competitors and the entry of new competitors in the market; (10) changes in applicable laws or regulations impacting the business in which we operate and our ability to maintain compliance with the various laws that our business and operations are subject to; (11) our ability to protect our intellectual property rights; (12) our integration of new and developing technologies, including the adoption of artificial intelligence and machine learning technologies; (13) substantial doubt about our ability to continue as a going concern; and (14) other risks and uncertainties indicated from time to time in our filings with the SEC. The foregoing list of factors is not exclusive.

Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from any forward-looking statements contained in this press release. System1’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the forward-looking statements for the purpose of their inclusion in this press release, and accordingly, do not express an opinion or provide any other form of assurance with respect thereto for the purpose of this press release. Forward-looking statements speak only as of the date they are made, and System1 does not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that such trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.

No Offer or Solicitation

This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Additional Information and Where to Find It

System1 may file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the proxy statement or any other document that System1 may file with the SEC. The definitive proxy statement (if and when available) will be mailed to stockholders of System1. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the proxy statement (if and when available) and other documents containing important information about System1 and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by System1 will be available free of charge on System1’s Investor Relations website at ir.system1.com or by contacting System1 Investor Relations at ir@system1.com.

Certain Information Regarding Participants in the Solicitation

System1 and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of System1, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in the Company’s proxy statement for its 2025 annual meeting of stockholders, which was filed with the SEC on May 19, 2025, and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on April 30, 2026, and on the Company’s Investor Relations website at ir.system1.com. Information about the directors of the Company and other participants in the proxy solicitations will be contained in the proxy statement and other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors should read the proxy statement carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from the Company using the sources indicated above.






Investors:
System1 Investor Relations
ir@system1.com

Source: View Original Filing on SEC EDGAR

FAQ

What debt is System1 (SST) exchanging in this 8-K transaction?

System1 is exchanging its existing term loan with an outstanding principal balance of $252.6 million and its revolving credit facility with a $50.0 million balance for a new $150.0 million term loan due January 2031, plus preferred stock and a cash payment to lenders.

How much will System1’s total indebtedness change after the exchange?

Management states that, upon closing, System1 will have reduced total indebtedness by over $160 million from the beginning of the year. This reduction comes from replacing $302.6 million of existing loans with a $150.0 million term loan and issuing convertible preferred shares instead of additional debt.

What are the key terms of System1’s new $150 million term loan?

The new Priority Term Loans total $150.0 million, mature in January 2031, and bear interest at SOFR + 5.00% per annum. Up to 50% of interest can be paid in kind at a rate 0.50% higher, with quarterly amortization of $375,000 and an excess cash flow sweep.

What are the main features of System1’s new convertible preferred stock?

System1 will issue 39,250 Series A Cumulative Convertible Preferred shares with an aggregate initial stated value of $39.3 million, paying a 7.00% annual cumulative dividend. They are initially convertible at $10.40 per share into roughly 27.4% of common equity, with customary anti-dilution protections and redemption rights.

How does the exchange affect System1 (SST) governance and lender rights?

Holders of the Preferred Shares may elect one independent director while at least 50% of the original issue remains outstanding. They also receive protective consent rights over adverse charter changes, restricted payments, issuance of senior or pari passu securities, and incurring indebtedness above $175.0 million while at least 25% remain outstanding.

When is System1’s exchange transaction expected to close and what approvals are needed?

System1 expects the transaction to close in the third quarter of 2026, following its annual meeting of stockholders. Effectiveness is subject to closing conditions in the Exchange Agreement, including shareholder approval of the convertible preferred share issuance required by Rule 312.03 of the NYSE Listed Company Manual.

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