The $20M preferred investment provides near-term liquidity but the low $1.448 conversion price signals potential for heavy dilution if converted. Monitor the 2026 annual report for the Tranche 2 conditions (net sales ≥ $172.5M, Adjusted EBITDA ≥ -$3M) — if met, the additional $5M tranche closes. The 6% PIK dividend structure means the company can conserve cash but the accreted value grows over time, increasing the eventual conversion/dilution overhang. Watch for any early funding election by the investor, which would waive the performance conditions.
Price Chart
Executive Summary
Zevia PBC entered into a securities purchase agreement with Bubble Holdings, LLC for a $20M Series A Senior Convertible Preferred Stock investment ($1,000/share, 6% PIK dividend, convertible at $1.448/share). The deal closes in two tranches: $15M at initial closing and $5M deferred, contingent on 2026 net sales of at least $172.5M and Adjusted EBITDA no worse than -$3M. The company also amended its LLC agreement to create mirroring Series A Preferred Units. This provides a meaningful capital infusion but carries significant dilution risk given the low conversion price relative to the current stock price.
Key Financial Metrics
Key Facts
- Zevia PBC sold 20,000 shares of Series A Senior Convertible Preferred Stock at $1,000/share for $20M total to Bubble Holdings, LLC (GP Investments affiliate)
- Initial closing of $15M (15,000 shares) occurred on October 22, 2026; deferred closing of $5M (5,000 shares) contingent on 2026 net sales ≥ $172.5M and Adjusted EBITDA ≥ -$3M
- Series A Preferred Stock carries a 6.00% per annum cumulative dividend, payable in cash or PIK, convertible into Class A Common Stock at $1.448/share
- Conversion price of $1.448 represents a significant discount to the current stock price, implying substantial potential dilution
- Investor has redemption rights starting year 4 or upon incurrence of new debt exceeding certain thresholds, at the greater of accreted value or 1.5x original issuance price
- Company amended its LLC agreement to create Series A Senior Convertible Preferred Units mirroring the preferred stock terms
- As of October 21, 2026, Zevia had 72.2M Class A shares outstanding, 5.2M Class B shares, and 2.2M stock options outstanding
Financial Impact
$20M gross proceeds from Series A Preferred Stock issuance; $1.448/share conversion price represents a substantial discount to market; 6% annual PIK dividend adds to accreted value
Risk Factors
- Significant dilution risk: conversion price of $1.448/share is well below current trading levels, potentially flooding the market with shares upon conversion
- 6% PIK dividend increases the accreted value over time, compounding the eventual conversion obligation
- Investor redemption rights starting year 4 or upon incurrence of new debt could create a $30M+ cash liability (1.5x original issuance price)
- Deferred $5M tranche is contingent on achieving 2026 sales and EBITDA targets — failure could signal operational weakness
- Preferred stock ranks senior to common in liquidation, potentially limiting common equity recovery in downside scenarios
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 3 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001437749-26-033400 |
| Exhibit: ex_1029930.htm | 0001437749-26-033400 |
| Exhibit: ex_1029931.htm | 0001437749-26-033400 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 23, 2026 3d ago | 8-K | $1.28 | awaiting T+20 | — | $1.27 (−0.78%) |
Jun 15, 2026 19w ago | 8-K | $1.27 $1.72 | ▲ +35.43% | ▲ +36.18% | $1.27 (−0.00%) |
May 6, 2026 24w ago | 8-K | $1.30 $1.37 | ▲ +5.38% | ▲ +2.25% | $1.27 (−2.31%) |
Feb 25, 2026 34w ago | 8-K | $1.35 $1.17 | ▼ −13.33% | ▼ −6.92% | $1.27 (−5.93%) |
US Market Status
Subscribe to SecBot
Get Real-Time SEC Filing Intelligence
Comprehensive SEC filing analysis delivered the moment filings hit EDGAR. Sentiment scoring, impact analysis, and actionable insights for every material event.
Create a free account Live analysis, Telegram alerts, watchlists and the MCP server for subscribers