Purple Innovation Inc

DEF 14A 1 ea0209971-03.htm PROXY STATEMENT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Check the appropriate box:

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Special Meeting of Stockholders

Dear Fellow Stockholder:

August 26, 2024

We are pleased to invite you to attend our special meeting of stockholders to be held on Tuesday, October 15, 2024, at 10:00 a.m. Mountain Time, as it may be adjourned or postponed from time to time. The special meeting will be conducted virtually via live audio webcast on the Internet.

The special meeting is primarily being called to ask our stockholders to consider and approve the following proposals to help protect the tax benefits of our approximately $238 million of net operating loss carryforwards (NOLs):

• to amend our Second Amended and Restated Certificate of Incorporation to prohibit certain acquisitions of shares of our common stock that would result in ownership of greater than 4.9% of our common stock (or, for stockholders who already own greater than 4.9%, one-half of one percentage point greater than their current ownership); and

• to ratify our June 27, 2024 Stockholder Rights Agreement in order to deter certain acquisitions of shares of our common stock that would result in ownership of greater than 4.9% of our common stock (or, for stockholders who already own greater than 4.9%, one-half of one percentage point greater than their current ownership).

Our ability to utilize our current NOLs to offset future taxable income may be significantly limited if we experience an “ownership change,” as determined under Section 382 of the Internal Revenue Code of 1986, as amended. If these proposals are not approved by our stockholders and no action is taken to protect our current NOLs, we believe it is possible that we could experience an ownership change under Code Section 382 before our current NOLs are fully utilized or expire. This could result in the limitation or loss of a very meaningful benefit to our Company and the value of your investment in us.

If approved at our special meeting, these NOL protections will sunset on June 30, 2025, when we believe the risk of an ownership change under Code Section 382 should significantly diminish.

Our Board of Directors has unanimously approved the proposals set forth in the accompanying proxy statement and recommends that you vote in favor of each proposal. We sincerely appreciate your support, and we look forward to seeing you at the special meeting.

Sincerely,

/s/ Robert T. DeMartini

Robert T. DeMartini

Chief Executive Officer

4100 North Chapel Ridge Road

Suite 200

(801) 756-2600

Notice of Special Meeting of Stockholders

to be Held October 15, 2024

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “Special Meeting”) of Purple Innovation, Inc., a Delaware corporation (the “Company,” “Purple,” “we” or “our”), will be held on October 15, 2024, at 10:00 a.m., Mountain Time, for the following purposes, as more fully described in the proxy statement accompanying this Notice of Special Meeting of Stockholders (the “Notice”):

1. NOL PROTECTIVE CHARTER AMENDMENT. To approve an amendment (the “NOL Protective Charter Amendment”) to the Company’s Second Amended and Restated Certificate of Incorporation (the “Current Charter”), to prohibit certain acquisitions of shares of our common stock in order to protect the tax benefits of our approximately $238 million of net operating loss carryforwards, as described in the accompanying proxy statement (the “NOL Protective Charter Amendment Proposal” or “Proposal No. 1”).

2. RATIFICATION OF NOL RIGHTS PLAN. To ratify the Company’s NOL Rights Plan in order to deter certain acquisitions of shares of our common stock in order to protect the tax benefits of our approximately $238 million of net operating loss carryforwards, as described in the accompanying proxy statement (the “Ratification of NOL Rights Plan Proposal” or “Proposal No. 2”).

3. ADJOURNMENT. To approve the adjournment or postponement of the Special Meeting, if necessary, to continue to solicit votes for Proposals Nos. 1 and 2, as described in the accompanying proxy statement (the “Adjournment Proposal” or “Proposal No. 3”).

Only stockholders of record at the close of business on August 20, 2024, are entitled to receive notice of, and to vote at, the Special Meeting and any adjournments or postponements thereof. We recommend that stockholders vote “FOR” Proposals 1, 2 and 3 listed above. Our stock transfer books will remain open between the record date and the date of the Special Meeting. Beginning two days after this Notice is given, a list of stockholders eligible to vote at the Special Meeting will be available for inspection by stockholders at our principal office at any time up to the Special Meeting.

The Special Meeting will be conducted exclusively via live audio webcast and online stockholder tools. To attend and vote at the Special Meeting, you must register in advance athttps://register.proxypush.com/PRPL prior to the deadline of October 13, 2024, at 5:00 p.m. Eastern Time. Stockholders who register will be able to attend and listen to the Special Meeting live, submit questions and vote their shares electronically at the Special Meeting from virtually any location around the world. There will be no physical meeting location. Even if you plan on participating in the Special Meeting electronically, to ensure your representation at the Special Meeting, we encourage you to complete, sign, date and return your proxy card promptly and, in any case, prior to 11:59 p.m., Eastern Time on October 14, 2024, either by Internet according to the instructions included in the notice of internet availability of proxy materials (the “Notice of Internet Availability of Proxy Materials”) or by mail. To ensure that all your shares are voted if your shares are represented by more than one Notice or proxy card, please vote once for each Notice or proxy card you receive. You may revoke your proxy at any time prior to the Special Meeting.

If you attend and vote electronically at the Special Meeting, your proxy will be revoked automatically and only your vote at the Special Meeting will be counted. If your shares are held in the name of a broker, bank or other nominee, you must obtain a legal proxy, executed in your favor, from the holder of record to be able to vote in person at the Special Meeting.

If you hold your shares in the name of a broker, bank or other nominee, your broker, bank or other nominee may not vote your shares at its own discretion, absent instructions from you. Accordingly, please provide appropriate voting instructions to your broker, bank or other nominee to ensure your vote will count.

Your Vote is Very Important.

IN ORDER TO ENSURE YOUR REPRESENTATION AT THE SPECIAL MEETING, WE URGE YOU TO VOTE BY COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND, IN ANY CASE, SUCH THAT IT IS RECEIVED PRIOR TO 11:59 P.M., EASTERN TIME ON OCTOBER 14, 2024.

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be held on October 15, 2024: The proxy statement is available athttps://annualgeneralmeetings.com/prplsp2024.

PURPLE INNOVATION, INC.

By Order of the Board of Directors,

/s/ Tricia McDermott

Tricia McDermott

Chief Legal Officer, Secretary

4100 North Chapel Ridge Road

Suite 200

(801) 756-2600

Proxy Statement

Solicitation of Proxies

The accompanying proxy is solicited on behalf of Purple Innovation, Inc., a Delaware corporation (the “Company,” “Purple,” “we” or “our”), by its Board of Directors (the “Board”) for use at the special meeting of stockholders of Purple to be held at 10:00 a.m., Mountain Time on October 15, 2024, or at any adjournments or postponements thereof (the “Special Meeting”), for the purposes set forth in this proxy statement and in the accompanying Notice of Special Meeting of Stockholders (the “Notice”). The Special Meeting will be held exclusively via live audio webcast and online stockholder tools. There will not be an option to attend the Special Meeting in person.

A Notice of Internet Availability of Proxy Materials, or a proxy statement and accompanying form of proxy, are first being mailed to the Company’s stockholders on or about August 28, 2024. The Notice of Internet Availability of Proxy Materials provides instructions on how to access our proxy statement, vote by Internet prior to the Special Meeting and receive a paper copy of our proxy materials by mail. This proxy statement can be accessed directly athttps://annualgeneralmeetings.com/prplsp2024 using the control number located on your Notice of Internet Availability of Proxy Materials or proxy card. Any proxy duly provided pursuant to this solicitation may be revoked by the person or entity giving it at any time before it is voted by delivering a written notice of revocation to our Secretary, by executing a later dated proxy and delivering it to our Secretary, or by attending and voting at the Special Meeting (although attendance at the Special Meeting will not, in and of itself, constitute a revocation of a duly provided proxy). If you hold shares through a broker, bank or other nominee, you must follow the instructions of your broker, bank or other nominee to change or revoke your voting instructions. If you wish to vote online during the Special Meeting, you will be required to follow the process set forth below in “Voting and Related Matters — Voting at the Special Meeting.”

Outstanding Shares and Voting Rights

Stockholders who owned Purple Innovation, Inc. Class A common stock, par value $0.0001 per share (the “Class A Stock”), or Class B common stock, par value $0.0001 per share (the “Class B Stock” and together with the Class A Stock, the “Common Stock”), at the close of business on August 20, 2024 (the “Record Date”) are entitled to receive notice of, virtually attend and vote at, the Special Meeting.

Each share of Class A Stock and Class B Stock, voting together as a single class, is entitled to one vote. On the Record Date, there were 107,502,951 shares of Class A Stock outstanding, and 204,981 shares of Class B Stock outstanding, together constituting a total of 107,707,932 votes.

To constitute a quorum for the conduct of business at the Special Meeting, a majority of all outstanding shares of Common Stock entitled to vote at the Special Meeting must be represented, in person or by proxy, at the Special Meeting. Under the Delaware General Corporation Law (the “DGCL”), shares represented by proxy that reflect abstentions will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum at the Special Meeting. However, as no “routine” matters will be voted on at the Special Meeting, “broker non-votes” (which are shares held by a broker, bank or other nominee that are represented at the Special Meeting, but with respect to which such broker or nominee is not empowered to vote on a particular proposal) will not be counted as shares that are present for purposes of determining the presence of a quorum for the transaction of stockholder business at the Special Meeting. Importantly, Coliseum Capital Management, LLC and its affiliates (collectively, “Coliseum”) has indicated it intends to attend the Special Meeting for quorum purposes and to vote its shares “FOR” all proposals. Since Coliseum has voting power over approximately 43.5% of our Common Stock outstanding and entitled to vote on the Record Date, Coliseum’s attendance at the Special Meeting is anticipated to have a significant impact on the presence of a quorum for the transaction of stockholder business at the Special Meeting.

If you hold your shares in an account at a broker, bank or other nominee, then you should be aware that, if you fail to instruct your broker, bank or other nominee how to vote within 10 days of the Special Meeting, your broker, bank or other nominee does not have discretionary authority to vote on our “non-routine” proposals under the rules of the New York Stock Exchange (the “NYSE”), and therefore your broker, bank or other nominee is not permitted to vote your shares in its discretion on your behalf at the Special Meeting.

The voting standards for the three matters to be acted upon at the Special Meeting are as follows:

• Proposal No. 1. The approval of the NOL Protective Charter Amendment Proposal requires the affirmative vote of a majority of the outstanding shares of Common Stock entitled to vote at the Special Meeting. Abstentions, broker non-votes and shares not present virtually or represented by proxy at the Special Meeting will be considered in determining the number of votes necessary for approval of Proposal No. 1 and will therefore have the effect of a negative vote. Coliseum has indicated that it intends to vote all of its shares of Common Stock in favor of Proposal No. 1 at the Special Meeting. Since Coliseum has voting power over approximately 43.5% of our Common Stock outstanding and entitled to vote on the Record Date, Coliseum’s vote is anticipated to have a significant impact on the outcome of Proposal No. 1.

• Proposal No. 2. Pursuant to the NOL Rights Plan, as defined herein, the approval of the Ratification of NOL Rights Plan Proposal requires the affirmative vote of a majority of the outstanding shares of Common Stock entitled to vote at the Special Meeting. Abstentions, broker non-votes and shares not present virtually or represented by proxy at the Special Meeting will be considered in determining the number of votes necessary for approval of Proposal No. 2 and will therefore have the effect of a negative vote. Coliseum has indicated that it intends to vote all of its shares of Common Stock in favor of Proposal No. 2 at the Special Meeting. Since Coliseum has voting power over approximately 43.5% of our Common Stock outstanding and entitled to vote on the Record Date, Coliseum’s vote is anticipated to have a significant impact on the outcome of Proposal No. 2.

• Proposal No. 3. The Adjournment Proposal will only be presented if there is a quorum present at the Special Meeting but not enough votes at the time of the Special Meeting to approve Proposals No. 1 and 2 described herein. If there is not a quorum present at the Special Meeting, the chair of the Special Meeting may adjourn the Special Meeting from time to time until a quorum is present. If presented, the Adjournment Proposal will be approved if a majority of the votes cast by stockholders present or represented by proxy at the Special Meeting and entitled to vote thereon vote in favor of the Adjournment Proposal. Abstentions, broker non-votes and shares not present virtually or represented by proxy at the Special meeting will not be counted as votes cast and will have no effect on the determination of Proposal No. 3. Coliseum has indicated it intends to attend the Special Meeting for quorum purposes and vote all of its shares of Common Stock in favor of Proposal No. 3, if presented, at the Special Meeting. Since Coliseum has voting power over approximately 43.5% of our Common Stock outstanding and entitled to vote on the Record Date, Coliseum’s attendance at the Special Meeting is anticipated to have a significant impact on the presence of a quorum for the transaction of stockholder business at the Special Meeting, and Coliseum’s vote is anticipated to have a significant impact on the outcome of Proposal No. 3, if presented, at the Special Meeting.

FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that represent our current expectations and beliefs. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws. In some cases, you can identify these statements by forward-looking words such as “believe,” “expect,” “project,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,” “would,” “could,” “may,” “might,” the negative of these words and other similar words. All forward-looking statements included in this proxy statement are made only as of the date hereof. It is routine for our internal projections and expectations to change throughout the year, and any forward-looking statements based upon these projections or expectations may change prior to the end of the next quarter or year. In addition, any statements that refer to projections of our future financial performance, our future net operating loss carryforwards or our future taxable income, and other characterizations of future events or circumstances are forward-looking statements. We caution and advise readers that these statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict, including those considerations included in the “Proposal No. 1 — The NOL Protective Charter Amendment Proposal — Certain Considerations Related to the NOL Protective Charter Amendment” and “Proposal No. 2 — The Ratification of NOL Rights Plan Proposal — Certain Considerations Related to the NOL Rights Plan.” Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements and investors are cautioned not to place undue reliance on any such statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.