Opening the filing
8-K
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. ☐
Item 2.02. Results of Operations and Financial Condition.
The information appearing below under Item 4.02(a) regarding certain previously reported financial information of GoPro, Inc. (the “Company”) for the fiscal year ended December 31, 2025 and the fiscal quarter and year-to-date periods ended September 30, 2025, March 31, 2026, and June 30, 2026 is incorporated herein by reference into this Item 2.02. The information appearing below under Item 4.02(a) refers to certain financial statements that the Company intends to restate. The Company identified certain errors related to accounting for certain debt instruments. The errors related to (i) the initial measurement of the liability classified warrants issued to Mateo Financing, LLC (the “Warrants”) on August 4, 2025, (ii) recognition of changes in fair value of the warrant liability at each subsequent reporting period, (iii) the accounting for the November 5, 2025 Warrant repricing in connection with an amendment to the 2025 Credit Agreement, and (iv) debt discount amortization due to initial measurement errors. A separate error was identified related to the accounting for the Company's convertible debentures (the "Convertible Debentures") issued in 2026 as part of the Securities Purchase Agreement entered into with YA II PN, Ltd. In accounting for the bifurcation of the embedded conversion derivative from the Convertible Debentures, the Company used the fair value of the convertible debenture as the fair value of the embedded conversion derivative, rather than determining the fair value of the embedded conversion derivative using a with-and-without valuation approach and recognizing the combined instrument as short-term debt. As a result, the amounts initially allocated to the embedded conversion derivative and debt host at issuance, and the related debt discount and subsequent interest expense, were incorrectly recorded. These errors do not affect the Company's revenue, gross margin, operating loss, cash, operating cash flows, EBITDA or non-GAAP operating income (loss) in any of the restated periods. However, the corrections affect net loss and other non-cash adjustments within the adjustments to reconcile net loss to net cash used in operating activities, with offsetting adjustments such that net cash used in operating activities remains unchanged.
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
(a)
While preparing the proxy statement related to the transactions contemplated by the Agreement and Plan of Merger, dated as of September 1, 2026, by and among the Company, Action Acquisitions LLC and Starman Optical, Inc., and finalizing the financial records for the fiscal quarter ended September 30, 2026, the Company identified errors in the accounting for certain debt instruments. On October 9, 2026, the Audit Committee of the Board of Directors (the "Audit Committee") of the Company, in consultation with management, concluded that (i) the previously issued audited consolidated financial statements of the Company as of and for the fiscal year ended December 31, 2025 (the “2025 Audited Financial Statements”), included in the Company’s Annual Report on Form 10-K filed on March 12, 2026 and subsequently updated in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on June 1, 2026 (collectively, the “2025 10-K”), (ii) the unaudited condensed consolidated financial statements of the Company as of September 30, 2025 and for the three and nine months then ended (the “Q3 2025 Financial Statements”), included in the Company's Quarterly Report on Form 10-Q filed on November 6, 2025 and (iii) the unaudited condensed consolidated financial statements of the Company as of March 31, 2026 and June 30, 2026 and for the three-month periods then ended, and, with respect to June 30, 2026, the six months then ended (the "2026 Financial Statements"), included in the Company's Quarterly Reports on Form 10-Q filed on May 11, 2026 and August 10, 2026, respectively, were materially misstated due to the above described errors and should no longer be relied upon. The 2025 Audited Financial Statements, Q3 2025 Financial Statements and the 2026 Financial Statements are collectively referred to as the “Impacted Financial Statements.” Any previously furnished or filed reports, earnings releases, press releases, investor presentations or similar communications of the Company describing the Impacted Financial Statements should no longer be relied upon.
The Company plans to restate the 2025 Audited Financial Statements and include them in an amendment to the 2025 10-K (the “2025 10-K/A”). The 2025 10-K/A will also include a restatement of the Q3 2025 Financial Statements. The Company also plans to restate its 2026 Financial Statements and include them in an amendment to each of its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2026 (the "Q1 2026 10-Q/A") and June 30, 2026 (the "Q2 2026 10-Q/A"). The Company intends to file the 2025 10-K/A, Q1 2026 10-Q/A, and Q2 2026 10-Q/A with the SEC as soon as reasonably practicable. The restatements described in this paragraph are collectively referred to as the "Restatements."
The Company determined that incorrect valuation inputs and methodology were used in the initial and subsequent measurement of the Warrants, as the Black-Scholes valuations at initial measurement and at each subsequent measurement date incorrectly used an expected term shorter than the remaining contractual term through August 1, 2035, and incorrectly included an illiquidity discount. As a result, the warrant liability was understated, and long-term debt was overstated, by $8.1 million at initial measurement on August 4, 2025. The initial measurement error and the continued use of incorrect valuation inputs and methodology also caused an understatement of interest expense of approximately $0.5 million, $1.4 million and $0.6 million in the three and nine months ended September 30, 2025, the year ended December 31, 2025, and the fiscal quarter ended March 31, 2026, respectively, and impacted the recognition of changes in the fair value of the warrant liability recognized in Other Income (Expense) of approximately $(5.6) million, $2.2 million, $3.9 million, $(0.1) million, and $3.7 million in the three and nine months ended September 30, 2025, the year ended December 31, 2025, fiscal quarter ended March 31, 2026, fiscal quarter ended June 30, 2026, and six months ended June 30, 2026, respectively. It also caused an understatement of the loss from debt extinguishment of approximately $7.1 million recognized in other income (expense) in the quarter ended March 31, 2026 and six months ended June 30, 2026. In addition, the incremental $1.0 million fair value transferred to the lender through the November 2025 exercise-price reduction was recorded in other income (expense) rather than as an additional debt discount amortized to interest expense.
As it relates to the Convertible Debentures embedded conversion derivative error, the Company recorded the initial measurement based on the fair value of the convertible debt instrument on a standalone basis as an embedded conversion derivative of $30.9 million in Accrued expenses and other liabilities and recorded a loss of $7.1 million, as recorded in other income (expense), (representing the difference between the initial measurement and the cash received) rather than determining the difference between the basis of the hybrid instrument and the fair value of the embedded conversion derivative using the “with-and-without” method and recording the combined amount of the embedded conversion derivative liability and the debt host in short-term debt of $23.8 million. The related debt discount and subsequent amortization were incorrectly recorded, resulting in an overstatement of interest expense of approximately $1.0 million, $2.1 million, and $3.1 million for the quarters ended March 31, 2026 and June 30, 2026, and the six months ended June 30, 2026, respectively. Errors in recognizing subsequent changes in the fair value of the embedded conversion derivative caused other income (expense), net to be understated by approximately $0.3 million, $0.8 million, and $1.1 million in those respective quarters and for the six months ended, June 30, 2026, respectively. In addition, losses recognized upon conversions were understated by approximately $2.9 million in the fiscal quarter ended June 30, 2026.
In connection with the Restatements, the Company evaluated the impact of the restated financial results on incentive-based compensation under its Compensation Recovery Policy. The review covered current and former executive officers and other covered persons during the applicable recovery period. The Restatements did not affect the financial reporting measures on which incentive-based compensation received by covered persons was based, including non-GAAP operating income and revenue. In addition, no performance-based bonuses were earned under the Company’s 2025 executive bonus plan, and the 2025 performance stock unit awards were not earned and were forfeited. Based on this analysis, the Company determined that no erroneously awarded incentive-based compensation was subject to recovery under its Compensation Recovery Policy. The Company's management and Audit Committee have determined the misstatements were unintentional and were not the result of fraud or any other attempt to deceive.
Three and nine months ended September 30, 2025 As of September 30, 2025, long-term debt was overstated by approximately $7.6 million ($36.3 million as restated, compared with $43.9 million as previously reported). Other long-term liabilities were understated by approximately $13.8 million ($22.1 million as restated, compared with $8.4 million). As a result, total liabilities were understated, and total stockholders' equity was overstated, by approximately $6.2 million. For the three months ended September 30, 2025, interest expense was understated by approximately $0.5 million and other income (expense), net was overstated by approximately $5.6 million. As a result, net loss was understated by approximately $6.2 million ($27.4 million as restated, compared with $21.3 million as previously reported), and basic and diluted net loss per share was $(0.17) as restated, compared with $(0.13) as previously reported. Because the Warrants were issued in August 2025, interest expense was understated by approximately $0.5 million ($5.5 million as restated, compared with $4.9 million as previously reported) and other income (expense), net was overstated by approximately $5.6 million ($6.3 million as restated, compared with $0.6 million as previously reported) for the nine months ended September 30, 2025. For that period, net loss was $90.5 million as restated, compared with $84.4 million as previously reported, and basic and diluted net loss per share was $(0.57) as restated, compared with $(0.53) as previously reported.
Three months ended December 31, 2025 For the three months ended December 31, 2025, interest expense was understated by approximately $0.9 million and other income (expense), net was understated by approximately $7.9 million. As a result, net loss was overstated by approximately $7.0 million ($2.1 million as restated, compared with $9.1 million as previously reported). Basic and diluted net loss per share was $(0.01) as restated, compared with $(0.06) as previously reported.
Year ended December 31, 2025 As of December 31, 2025, long-term debt was overstated by approximately $7.7 million ($36.6 million as restated, compared with $44.3 million as previously reported). Other long-term liabilities, which include the Warrants, were understated by approximately $6.8 million ($15.9 million as restated, compared with $9.1 million). Together, these resulted in a $0.8 million overstatement of total liabilities and a corresponding understatement of total stockholders' equity. For the year ended December 31, 2025, interest expense was understated by approximately $1.4 million and other income (expense), net was understated by approximately $2.2 million. As a result, net loss was overstated by approximately $0.8 million ($92.6 million as restated, compared with $93.5 million as previously reported). Basic and diluted net loss per share was $(0.58) as restated, compared with $(0.59) as previously reported.
Three months ended March 31, 2026 For the three months ended March 31, 2026, interest expense was overstated by approximately $0.4 million and other expense, net was overstated by approximately $4.1 million. As a result, net loss was overstated by approximate $4.5 million ($76.3 million as restated, compared with $80.8 million as previously reported). Basic and diluted net loss per share was $(0.47) as restated, compared with $(0.50), as previously reported .
Three and six months ended June 30, 2026 As of June 30, 2026, short-term debt was understated by approximately $9.0 million ($81.6 million as restated, compared with $72.7 million as previously reported). Other long-term liabilities were understated by approximately $3.0 million ($8.6 million as restated, compared with $5.6 million as previously reported). As a result, total liabilities were understated, and total stockholders' deficit was overstated, by approximately $3.4 million. For the three months ended June 30, 2026, interest expense was overstated by approximately $2.1 million and other income (expense), net was understated by approximately $2.2 million ($7.0 million of other income (expense), net as restated, compared with $4.8 million of other income (expense), net as previously reported). As a result, net loss was understated by approximately $0.2 million ($51.2 million as restated, compared with $51.0 million as previously reported), and basic and diluted net loss per share was $(0.30) both as restated and as previously reported. For the six months ended June 30, 2026, interest expense was overstated by approximately $2.5 million ($8.1 million as restated, compared with $10.6 million as previously reported) and other income (expense), net was overstated by approximately $1.9 million ($20.5 million of other income (expense), net as restated, compared with $22.4 million of other income (expense), net as previously reported). For that period, net loss was overstated by approximately $4.3 million ($127.5 million as restated, compared with $131.8 million as previously reported), and basic and diluted net loss per share was approximately $(0.76) as restated, compared with $(0.79) as previously reported.
Item 8.01 Other Events.
The Company has informed the agents under its revolving credit facility with Wells Fargo Bank, National Association and its term loan credit facility with Farallon Capital Management, L.L.C. and the holders under the Company's convertible debentures issued to YA II PN, Ltd., and its senior secured notes issued to affiliates of Nicholas Woodman, of its intention to restate its financial statements and the status of its ongoing accounting review. As the historical accounting errors and consequent restatements constitute a default or event of default under each of the facilities, convertible debentures and senior secured notes, the Company has requested and obtained waivers from default under each of the facilities, convertible debentures and senior secured notes. On October 16, 2026 the Company obtained a waiver from the lenders under its term loan credit facility of its non-compliance with the minimum asset coverage ratio as of September 30, 2025 and December 31, 2025. The Company cannot assure that it will obtain the remaining waivers on acceptable terms or at all.