SPORTSMAN'S WAREHOUSE HOLDINGS, INC.

Dollars in Thousands, except per share amounts (unaudited)

(1) Description of Business and Basis of Presentation

Description of Business

Sportsman’s Warehouse Holdings, Inc., a Delaware corporation (“Holdings”), and its subsidiaries (collectively, the “Company”) operate retail sporting goods stores. As of August 1, 2026, the Company operated 147 stores in 32 states. The Company also operates an e-commerce platform at www.sportsmans.com. The Company’s stores and website are aggregated intoone operating and reportable segment.

Basis of Presentation

The condensed consolidated financial statements included herein are unaudited and have been prepared by management of the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Company’s condensed consolidated balance sheet as of January 31, 2026 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and reflect all adjustments that are, in the opinion of management, necessary to summarize fairly the Company’s condensed consolidated financial statements for the periods presented. All of these adjustments are of a normal recurring nature. The results of the fiscal quarter ended August 1, 2026 are not necessarily indicative of the results to be obtained for the fiscal year ending January 30, 2027. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 31, 2026 (the “Fiscal 2025 Form 10-K”).

(2) Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to the Fiscal 2025 Form 10-K. The Company has consistently applied the accounting policies to all periods presented in the condensed consolidated financial statements presented herein.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which includes improvements to the disclosures in the notes to the financial statements of specified information about certain costs and expenses. This ASU requires the disclosure of (1) amounts of certain relevant expenses included in each caption on the face of the financial statements, (2) certain amounts that are already required to be disclosed under GAAP in the same disclosure as the other disaggregation requirements, (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (4) the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. This ASU is effective for public entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 with early adoption permitted. The Company is evaluating the future impact of the issuance of this ASU on its consolidated financial statements.

(3) Revenue Recognition

Revenue recognition accounting policy

The Company operates solely as an outdoor retailer, which includes both retail stores and an e-commerce platform, that offers a broad range of products in the United States and online. Generally, all revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration in exchange for those goods. Accordingly, the Company implicitly enters into a contract with customers to deliver merchandise inventory at the point of sale. Collectability is reasonably assured since the Company only extends immaterial credit for purchases to certain municipalities.

Substantially all of the Company’s revenue is for single performance obligations for the following distinct items:

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Retail store sales

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E-commerce sales

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Gift cards and loyalty rewards program

For performance obligations related to retail store and e-commerce sales contracts, the Company typically transfers control, for retail stores, upon consummation of the sale when the product is paid for and taken by the customer and, for e-commerce sales, when the products are tendered for delivery to the common carrier.

The transaction price for each contract is the stated price on the product, reduced by any stated discounts at that point in time. The Company does not engage in sales of products that attach a future material right which could result in a separate performance obligation for the purchase of goods in the future at a material discount. The implicit point-of-sale contract with the customer, as reflected in the transaction receipt, states the final terms of the sale, including the description, quantity, and price of each product purchased. Payment for the Company’s contracts is due in full upon delivery. The customer agrees to a stated price implicit in the contract that does not vary over the contract.

The transaction price relative to sales subject to a right of return reflects the amount of estimated consideration to which the Company expects to be entitled. This amount of variable consideration included in the transaction price, and measurement of net sales, is included in net sales only to the extent that it is probable that there will be no significant reversal in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. The allowance for sales returns is estimated based upon historical experience and a provision for estimated returns is recorded as a reduction in sales in the relevant period. The estimated merchandise inventory cost related to the sales returns is recorded in prepaid expenses and other. The estimated refund liabilities are recorded in accrued expenses. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net sales and earnings in the period such variances become known.

Contract liabilities are recognized primarily for gift card sales and the Company’s loyalty reward program. Cash received from the sale of gift cards is recorded as a contract liability in accrued expenses, and the Company recognizes revenue upon the customer’s redemption of the gift card. Gift card breakage is recognized as revenue in proportion to the pattern of customer redemptions by applying a historical breakage rate of 4.0% whenno escheat liability to relevant jurisdictions exists. Based upon historical experience, gift cards are predominantly redeemed in the firsttwo years following their issuance date. The Company does not sell or provide gift cards that carry expiration dates.

Accounting Standards Codification (“ASC”) 606 requires the Company to allocate the transaction price between the goods and the loyalty reward points based on the relative standalone selling price. The Company recognizes revenue for the breakage of loyalty reward points as revenue in proportion to the pattern of customer redemption of the points by applying an estimated breakage rate of 35.0% using historical rates and future expectations.

As it relates to e-commerce sales, the Company accounts for shipping and handling as fulfillment activities, and not as a separate performance obligation. Accordingly, the Company recognizes revenue for only one performance obligation, the sale of the product, at the shipping point (when the customer gains control). Revenue associated with shipping and handling is not material. The costs associated with fulfillment are recorded in costs of goods sold.

The Company offers promotional financing and credit cards issued by a third-party bank that manages and directly extends credit to the Company’s customers. The Company provides a license to its brand and marketing services, and the Company facilitates credit applications in its stores and online. The banks are the sole owners of the accounts receivable generated under the program and, accordingly, the Company does not hold any customer receivables related to these programs and acts as an agent in the financing transactions with customers. The Company is eligible to receive a profit share from certain of its banking partners based on the annual performance of their corresponding portfolio, and the Company receives monthly payments based on forecasts of full-year performance. This is a form of variable consideration. The Company records such profit share as revenue over time using the most likely amount method, which reflects the amount earned each month when it is determined that the likelihood of a significant revenue reversal is not probable, which is typically monthly. Profit-share payments occur monthly, shortly after the end of each program month.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Sales returns

The Company allows customers to return items purchased within 30 days provided the merchandise is in resaleable condition with original packaging and the original sales/gift receipt is presented. The Company estimates a reserve for sales returns and records the respective reserve amounts, including a right to return asset when a product is expected to be returned and resold. Historical experience of actual returns and customer return rights are the key factors used in determining the estimated sales returns.

Contract balances

The following table provides information about right of return assets, contract liabilities, and sales return liabilities with customers as of August 1, 2026 and January 31, 2026:

During the 13 and 26 weeks ended August 1, 2026, the Company recognized approximately $300 and $663 in gift card breakage and approximately $693 and $1,376 in loyalty breakage, respectively. During the 13 and 26 weeks ended August 2, 2025, the Company recognized approximately $318 and $697 in gift card breakage and approximately $1,223 and $2,247 in loyalty breakage, respectively. During the 13 and 26 weeks ended August 1, 2026, the Company recognized revenue of $3,364 and $11,596, respectively, relating to contract liabilities that existed at January 31, 2026. During the 13 and 26 weeks ended August 2, 2025, the Company recognized revenue of $3,532 and $11,662, respectively, relating to contract liabilities that existed at February 1, 2025.

The current balance of the right of return assets is the expected amount of inventory to be returned that is expected to be resold. The current balance of the contract liabilities primarily relates to the gift card and loyalty reward program liabilities. The Company expects the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions over the nexttwo years. The current balance of sales return liabilities is the expected amount of sales returns from sales that have occurred.

Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by department. The percentage of net sales related to the Company’s departments during the 13 and 26 weeks ended August 1, 2026 and August 2, 2025, was approximately:

(4) Property and Equipment

Property and equipment consisted of the following as of August 1, 2026 and January 31, 2026:

(5) Accrued Expenses

Accrued expenses consisted of the following as of August 1, 2026 and January 31, 2026:

(6) Leases

At the inception of the lease, the Company’s leases have remaining certain lease terms of up to 12 years, which typically includes multiple options for the Company toextend the lease which are not reasonably certain.

During the fiscal year ended January 31, 2026, the Company entered into finance lease arrangements for cash management equipment, including money counting machines and store safes, utilized in retail store operations. These arrangements generally have initial lease terms of four years. The leased equipment is recognized as finance lease right-of-use assets with corresponding finance lease liabilities on the consolidated balance sheets. Lease expense is recognized through depreciation of the right-of-use assets and interest on the related lease liabilities over the lease term.

The Company has certain retail locations at which the leases provide for variable payments for common area maintenance, property taxes, insurance and rental payments based on future sales volumes at the leased location, which are not measurable at the inception of the lease. The Company recognizes variable lease expense for these leases in the period incurred.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

During the 13 and 26 weeks ended August 1, 2026, the Company recorded non-cash decreases of $105 and $7, respectively, to the right of use assets and operating lease liabilities resulting from lease remeasurements from the exercise of lease extension options, acquired leases, new leases added and lease amendments.

In accordance with ASC 842, total lease expense was comprised of the following for the periods presented:

In accordance with ASC 842, other information related to leases was as follows for the periods presented:

In accordance with ASC 842, maturities of operating lease liabilities as of August 1, 2026 were as follows:

(7) Segments

The Company hasone reportable segment, Sportsman’s Warehouse, which operates solely as a sporting goods retailer, including both retail stores and an e-commerce platform. Thesingle operating segment derives revenues from customers purchasing goods from both the Company’s retail stores and its e-commerce platform.

The chief operating decision maker ("CODM") assesses performance for the single operating segment and decides how to allocate resources based on net income (loss) that also is reported on the condensed consolidated statement of operations.

The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets. Asset information is not presented here because its presentation here would be duplicative of the condensed consolidated balance sheets.

Net income is used in monitoring budget versus actual results. The CODM also uses net income (loss) in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

The Company’s single reportable segment revenue, segment profit or loss, and significant segment expenses are as follows:

(1)

Represents certain expenses the Company believes fall outside of typical costs related to normal operating conditions including management transition costs and executive retention.

(2)

Represents expenses incurred due to the opening of new store locations.

(3)

Significant expenses in Other operating include: marketing, credit card fees, utilities, insurance, software support, consulting and legal.

(8) Long-Term Debt

Long-term debt consisted of the following as of August 1, 2026 and January 31, 2026:

Term Loan

The Company maintains a $45,000 term loan facility (the “Term Loan Facility”), which is governed by an ABL term loan credit agreement (as amended, the “A&R Term Loan Agreement”) with Sportsman’s Warehouse, Inc. (“SWI”), a wholly owned subsidiary of Holdings, as lead borrower, Holdings, as guarantor, and other subsidiaries of Holdings, each as borrowers, and PLC Agent LLC, as administrative and collateral agent for various lenders. The Term Loan Facility consists of $25,000 in an initial ABL term loan (the “Initial Term Loan”) and $20,000 ina delayed draw ABL term loan (the “Delayed Draw Term Loan” and collectively with the Initial Term Loan, the

“Term Loans”) that were made by the ABL Lenders on July 30, 2024 and July 30, 2025, respectively. The proceeds from the Initial Term Loan were used to repay obligations under the Revolving Line of Credit described in Note 9.

The Company incurred deferred financing costs and discounts related to the original Term Loans of approximately $1,563. In conjunction with the new A&R Term Loan Agreement, the Company incurred an additional $534. These costs offset the recorded carrying amount of the Term Loans on the condensed consolidated balance sheet and are amortized to interest expense over the life of the Term Loans. As of August 1, 2026 and January 31, 2026, the Company had $45,000 and $45,000, respectively, in outstanding Term Loans. As of August 1, 2026, the Company did not have any remaining amount available for borrowing under the Term Loan Facility.

The A&R Term Loan Agreement has a stated maturity date of June 18, 2031. Borrowings under the A&R Term Loan Agreement bear interest at a rate equal to (i) a specified term secured overnight financing rate (“SOFR”), plus (ii)0.10% as a SOFR adjustment, plus (iii) the applicable margin as specified in the A&R Term Loan Agreement. The applicable margin means either 4.00% or 7.00% depending on the type of term loan. Under the A&R Term Loan Agreement, loans may be required to be converted to base rate loans and in such case, the applicable margin rate will increase by 1.0%. The interest rate on the outstanding A&R Term Loans as of August 1, 2026 was 10.45%.

Each of the subsidiaries of Holdings is a borrower under the Term Loan Facility, and all obligations under the Term Loan Facility are guaranteed by Holdings. All of the obligations under the Term Loan Facility are secured by a lien on substantially all of Holdings’ tangible and intangible working capital assets and the tangible and intangible working capital assets of all of Holdings’ subsidiaries. The lien securing the obligations under the Term Loan Facility is a first priority lien as to equipment, fixtures, intellectual property, and equity interests.

SWI and the other borrowers may be required to make mandatory prepayments under the Term Loan Facility in the event of a disposition of certain property or assets, in the event of receipt of certain insurance or condemnation proceeds, upon the issuance of certain debt or equity securities, upon the incurrence of certain indebtedness for borrowed money or upon the receipt of certain payments not received in the ordinary course of business.

The A&R Term Loan Agreement requires the Company to maintain a minimum availability at all times of not less than the greater of $30,000 and 10% of the gross borrowing base. In addition, the A&R Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit the ability of the Company to incur, create or assume certain indebtedness, to create, incur or assume certain liens, to make certain investments, to make sales, transfers and dispositions of certain property and to undergo certain fundamental changes, including certain mergers, liquidations and consolidations. The A&R Term Loan Agreement also contains customary events of default, including defaults triggered by defaults under the Revolving Line of Credit. See Note 9 for information on the Revolving Line of Credit.

As of August 1, 2026 and January 31, 2026, the Company had $1,091 and $835, respectively, in outstanding deferred financing fees and discounts related to the Term Loans. During the 13 and 26 weeks ended August 1, 2026, the Company recognized $119 and $277, respectively, of non-cash interest expense with regard to the amortization of deferred financing fees and discounts related to the Term Loans. During the 13 and 26 weeks ended August 2, 2025, the Company recognized $106 and $208, respectively, of non-cash interest expense with regard to the amortization of deferred financing fees and discounts related to the Term Loans.

The scheduled minimum payments on outstanding long-term debt were as follows as of August 1, 2026:

(9) Revolving Line of Credit

The Company maintains a $315,000 revolving credit facility (the “Revolving Line of Credit”), which is governed by an amended and restated credit agreement (as amended, the Amended Credit Agreement”) with SWI, as lead borrower, Holdings, and other subsidiaries of Holdings, each as borrowers, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, collateral agent, swing line lender, letter of credit issuer and lender, with a consortium of banks led by Wells Fargo, to amend the Amended and Restated Credit Agreement, dated as of May 23, 2018, as previously amended May 17, 2022, and July 30, 2024.

As of August 1, 2026 and January 31, 2026, the Company had $138,702 and $57,936, respectively, in outstanding revolving loans under the Revolving Line of Credit. Amounts outstanding are offset on the condensed consolidated balance sheets by amounts in depository accounts under lock-box type arrangements, which were $13,584 and $10,412 as of August 1, 2026 and January 31, 2026, respectively. As of August 1, 2026, the Company had$102,996 available for borrowing under the Revolving Line of Credit, calculated based upon certain borrowing base restrictions and stand-by commercial letters of credit of $5,382 under the terms of the Revolving Line of Credit.

In conjunction with the Amended Credit Agreement, the Company incurred $1,473 in fees paid to various parties, which were capitalized. The Company will continue to amortize these fees and the prior recorded fees which were capitalized in association with the May 17, 2022 amendment. Fees associated with the Revolving Line of Credit were recorded in prepaid expenses and other assets.

The Revolving Line of Credit has a maturity of June 18, 2031. Borrowings under the Revolving Line of Credit bear interest based on either the base rate or Term SOFR (as defined in the Amended Credit Agreement), at the Company’s option, in each case plus an applicable margin. The base rate is the greatest of (1) the floor rate (as defined in the Amended Credit Agreement as a rate of interest equal to 0.0%) (2) Wells Fargo’s prime rate, (3) the federal funds rate (as defined in the Amended Credit Agreement) plus 0.50% or (4) the one-month Term SOFR (as defined in the Amended Credit Agreement) plus 1.00%. The applicable margin for loans under the Revolving Line of Credit, which varies based on the average daily availability, ranges from 0.75% to 1.00% per year for base rate loans and from 1.75% to 2.00% per year for Term SOFR loans. The Company is required to pay a commitment fee for the unused portion of the Revolving Line of Credit, which will range from 0.25% to 0.30% per annum, depending on the average daily availability under the Revolving Line of Credit. The weighted average interest rate on the amounts outstanding under the Revolving Line of Credit as of August 1, 2026 and January 31, 2026 was 5.56% and 5.09%, respectively.

Each of the subsidiaries of Holdings is a borrower under the Revolving Line of Credit, and all obligations under the Revolving Line of Credit are guaranteed by Holdings. All of the obligations under the Revolving Line of Credit are secured by a lien on substantially all of Holdings’ tangible and intangible working capital assets and the tangible and intangible working capital assets of all of Holdings’ subsidiaries. The lien securing the obligations under the Revolving Line of Credit is a first priority lien as to certain liquid assets, including cash, accounts receivable, deposit accounts and inventory.

SWI and the other borrowers may be required to make mandatory prepayments under the Revolving Line of Credit in the event of a disposition of certain property or assets, in the event of receipt of certain insurance or condemnation proceeds, upon the issuance of certain debt or equity securities, upon the incurrence of certain indebtedness for borrowed money or upon the receipt of certain payments not received in the ordinary course of business.

The Amended Credit Agreement requires the Company to maintain a minimum availability at all times under its Revolving Line of Credit of not less than the greater of $30,000 and 10% of the gross borrowing base. In addition, the Amended Credit Agreement contains customary affirmative and negative covenants, including covenants that limit the Company’s ability to incur, create or assume certain indebtedness, to create, incur or assume certain liens, to make certain investments, to make sales, transfers and dispositions of certain property and to undergo certain fundamental changes, including certain mergers, liquidations and consolidations. The Amended Credit Agreement also contains customary events of default, including defaults triggered by defaults under the Term Loan Facility. As of August 1, 2026, the Company held approximately $407,771 in collateralized eligible inventory and credit card receivables related to the Term Loan and the Revolving Line of Credit.

As of August 1, 2026 and January 31, 2026, the Company had $1,582 and $201, respectively, in outstanding deferred financing fees. During the 13 and 26 weeks ended August 1, 2026, the Company recognized $54 and $92, respectively, of non-cash interest expense with regard to the amortization of deferred financing fees. During the 13 and 26 weeks ended August 2, 2025, the Company recognized $38 and $76, respectively, of non-cash interest expense with regard to the amortization of deferred financing fees.

During the 13 and 26 weeks ended August 1, 2026, gross borrowings under the Revolving Line of Credit were $346,656 and $688,003, respectively. During the 13 and 26 weeks ended August 2, 2025, gross borrowings under the Revolving Line of Credit were $351,274 and $691,412, respectively. During the 13 and 26 weeks ended August 1, 2026, gross paydowns under the Revolving Line of Credit were $330,225 and $611,898, respectively. During the 13 and 26 weeks ended August 2, 2025, gross paydowns under the Revolving Line of Credit were $342,162 and $617,082, respectively.

Restricted Net Assets

The provisions of the A&R Term Loan Agreement and the Amended Credit Agreement restrict all of the net assets of the Company’s consolidated subsidiaries, which constitute all of the net assets on the Company’s condensed consolidated balance sheet as of August 1, 2026, from being used to pay any dividends without prior written consent from the financial institutions party to the respective agreement.

(10) Income Taxes

During the 13 and 26 weeks ended August 1, 2026, the Company recognized income tax benefit of $11 and income tax expense of $1,033, respectively. During the 13 and 26 weeks ended August 2, 2025, the Company recognized income tax expense of $97 and income tax benefit of $1,233, respectively. The Company's effective tax rate during the 13 and 26 weeks ended August 1, 2026 was 0.2% and -4.1%, respectively. The Company’s effective tax rate during the 13 and 26 weeks ended August 2, 2025 was -1.4% and 4.2%, respectively. The Company’s effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, due to state taxes, permanent items, and discrete items relating to stock award deductions, and any expense offset by a valuation allowance.

(11) Stockholders’ Equity

Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share represents basic earnings per share adjusted to include the potentially dilutive effect of nonvested share awards and nonvested share unit awards.

The following table sets forth the computation of basic and diluted earnings per share for the periods presented:

(12) Stock-Based Compensation

Stock-Based Compensation

During the 13 and 26 weeks ended August 1, 2026, the Company recognized total stock-based compensation expense of $962 and $1,741, respectively. During the 13 and 26 weeks ended August 2, 2025, the Company recognized total stock-based compensation expense of $827 and $1,620, respectively. Compensation expense related to the Company’s stock-based payment awards is recognized in selling, general, and administrative expenses in the condensed consolidated statements of operations.

Employee Stock Plan

As of August 1, 2026, the number of shares available for awards under the Amended and Restated 2019 Performance Incentive Plan (as amended and restated, the “Amended 2019 Plan”) was 1,362. As of August 1, 2026, there were 3,745 unvested stock awards outstanding under the Amended 2019 Plan.

Employee Stock Purchase Plan

The Company also maintains an Amended and Restated Employee Stock Purchase Plan (the “ESPP”) that was approved by the Company’s stockholders in fiscal year 2015, under which 1,600 shares of common stock were authorized. During the 13 weeks ended August 1, 2026,58 shares were issued under the ESPP and, as of August 1, 2026, the number of shares available for issuance was 579.

Nonvested Performance-Based Stock Awards

During the 13 and 26 weeks ended August 1, 2026, the Company issued 395 nonvested performance-based stock awards to employees at a weighted average grant date fair value of $1.45 per share. During the 13 and 26 weeks ended August 2, 2025, the Company didnot issue any performance-based stock awards to employees.

The following table sets forth the rollforward of outstanding nonvested performance-based stock awards (per share amounts are not in thousands):

Nonvested Stock Unit Awards

During the 13 and 26 weeks ended August 1, 2026, the Company issued 708 and 2,234 nonvested stock units to employees and directors at a weighted average grant date fair value of $1.36 and $1.38 per share, respectively. The shares issued to employees of the Company vest over athree-year period withone third of the shares vesting on each anniversary of the grant date. The shares issued to directors of the Company vest over a 12-month period withone-twelfth of the shares vesting each month.

During the 13 and 26 weeks ended August 2, 2025, the Company issued 314 and 1,149 nonvested stock units to employees and directors at a weighted average grant date fair value of $1.96 and $1.28 per share, respectively. The shares issued to employees of the Company vest over athree-year period withone third of the shares vesting on each anniversary of the grant date. The shares issued to directors of the Company vest over a 12-month period withone-twelfth of the shares vesting each month.

The following table sets forth the rollforward of outstanding nonvested stock units (per share amounts are not in thousands):

(13) Commitments and Contingencies

Legal Matters

The Company is involved in various legal matters generally incidental to its business. After discussion with legal counsel, management is not aware of any matters for which the likelihood of a loss is probable and reasonably estimable, and which could have a material impact on its consolidated financial condition, liquidity, or results of operations.

On July 18, 2024, and January 13, 2025, respectively, Kjersten Higley filed putative class action lawsuits against the Company in the Superior Court of the State of Washington in King County. The complaints asserted claims on behalf of purported classes of individuals alleging, among other things, that the Company failed to properly compensate class members for all time worked and business expenses and that certain individuals were required to enter into non-disclosure agreements that allegedly restricted discussion of compensation. The matters were subsequently consolidated, and the parties have reached an agreement in principle to resolve the consolidated action, which is subject to final approval by the Court. The Company denies the allegations and any liability or wrongdoing.