System1, Inc.

System1, Inc. established Series A Cumulative Convertible Preferred Stock by filing a Certificate of Designation, designating 39,250 shares with an initial stated value of $1,022.05 per share. Shareholders approved the issuance of this preferred stock at the 2026 annual meeting. Concurrently, Robert Sharp was elected as a director by the holders of the Preferred Shares, and three Class I directors were elected. The company also ratified Deloitte and Touche LLP as its independent auditor and previously disclosed a comprehensive debt exchange and settlement transaction.

System1, Inc. will hold its Annual Meeting on July 22, 2026, where stockholders will vote on a proposal to approve the issuance of Series A Cumulative Convertible Preferred Stock. This issuance is part of a comprehensive debt exchange and settlement with existing lenders, aiming to reduce outstanding indebtedness, extend debt maturity, and resolve litigation. The transaction involves a new $150 million term loan, 39,250 Preferred Shares (initial stated value $39.25 million), and a cash payment of over $31 million. The Preferred Shares are convertible into approximately 37.8% of the company's outstanding common stock, leading to potential dilution for existing stockholders.

System1, Inc. entered into a comprehensive debt exchange agreement with all its existing term loan and revolver lenders, strengthening its capital structure and reducing total debt. The transaction replaces $302.6 million in existing debt with a new $150.0 million term loan facility maturing in January 2031, the issuance of convertible preferred stock valued at $39.3 million, and a cash payment of approximately $31.4 million. This initiative is expected to reduce the company's total indebtedness by over $160 million and extend its debt maturity cycle, enhancing financial flexibility. The transaction is contingent on shareholder approval and is anticipated to close in the third quarter of 2026.

System1, Inc. reported supplemental financial information for Q1 2026, showing a significant decline in financial performance. The company posted revenue of $37.2 million and a net loss of $(47.1) million, which included a substantial goodwill impairment charge of $36.8 million. Adjusted EBITDA also decreased significantly to $2.7 million. Both Marketing and Products revenue streams experienced declines, while the number of active marketing partners fell sharply.

System1, Inc. reported a significant net loss of $(57.6) million for the first quarter of 2026, a substantial increase from $(19.9) million in the prior year, alongside a revenue decline to $37.2 million. The company disclosed substantial doubt about its ability to continue as a going concern due to declining cash flows, negative net working capital, and upcoming debt maturities. An impairment charge of $36.8 million on long-lived assets further impacted financial results, and the company is facing legal proceedings from lenders.

System1, Inc. announced its first quarter 2026 financial results, reporting a significant decline in revenue to $37.2 million from $74.5 million year-over-year, and a widened GAAP Net Loss of $57.6 million compared to $19.9 million in the prior year. Adjusted EBITDA also decreased to $2.7 million. The company is undergoing a strategic reset, narrowing its focus to AI and consumer intent, and significantly reduced marketing activities for search monetization to achieve cost savings and improve its financial profile. Management expressed optimism about future operating performance and capital structure right-sizing.

System1, Inc. filed an Amendment No. 1 to its Annual Report on Form 10-K for the year ended December 31, 2025. This amendment provides the previously omitted information for Items 10, 11, 12, 13, and 14, including details on directors, executive officers, corporate governance, and executive compensation. The filing includes the 2025 compensation for named executive officers and outlines the structure and members of the board committees.