Vital Farms, Inc.

NOTES TO CONDENSED CONSOLID ATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts or as otherwise indicated)

Note 1. Nature of the Business and Basis of Presentation

Vital Farms, Inc. (the “Company”) was incorporated in Delaware on June 6, 2013 and is headquartered in Austin, Texas. The Company packages, markets and distributes shell eggs and other products. These products are principally sold under the name Vital Farms in addition to other trade names, primarily to retail and foodservice channels in the United States.

The accompanying unaudited condensed consolidated financial statements as of September 27, 2026 and for the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025 (the “Annual Report”).

In the opinion of management, the included disclosures are adequate, and the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for a fair statement of the Company’s consolidated financial position as of September 27, 2026, consolidated results of operations for the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025, and consolidated cash flows for the 39-week periods ended September 27, 2026 and September 28, 2025. Such adjustments are of a normal and recurring nature. The condensed consolidated balance sheet as of December 28, 2025 was derived from audited annual financial statements but does not contain all of the note disclosures from the audited annual financial statements. The condensed consolidated results of operations for the 13-week and 39-week periods ended September 27, 2026 are not necessarily indicative of the consolidated results of operations that may be expected for the fiscal year ending December 27, 2026.

Fiscal Year: The Company’s fiscal year ends on the last Sunday in December and contains either 52 or 53 weeks. In a 52-week fiscal year, each of the Company’s fiscal quarters consists of 13 weeks. The additional week in a 53-week fiscal year is added to the fourth quarter, making such quarter consist of 14 weeks. Therefore, the financial results of certain 53-week fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated 13-week quarters. The fiscal quarters ended September 27, 2026 and September 28, 2025 both contain operating results for 13 weeks.

Note 2. Summary of Significant Accounting Policies

The significant accounting policies and estimates used in preparation of the unaudited condensed consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the fiscal year ended December 28, 2025, and the notes thereto, which are included in the Annual Report. Other than the adoption of the new accounting pronouncements and standards as further described below, there have been no material changes to the Company’s significant accounting policies during the 39-week period ended September 27, 2026.

Recently Adopted Accounting Pronouncements

The new accounting pronouncements recently adopted by the Company are described in the Company’s audited consolidated financial statements as of and for the fiscal year ended December 28, 2025, and the notes thereto, which are included in the Annual Report.

In December 2025, the Financial Accounting Standards Board (the “FASB”) issued ASU 2025-12, Codification Improvements (“ASU 2025-12”), which clarifies, corrects errors, and makes minor improvements to FASB’s previous guidance. ASU 2025-12 encompasses 34 minor updates and clarifications to the codification with early adoption permitted on an issue-by-issue basis. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company has elected to early adopt the stock repurchase guidance in ASU 2025-12 for recording the excess repurchase price over par value in additional paid-in capital pursuant to a stock repurchase program authorized by the Company’s Board of Directors (the “Board of Directors”) in February 2026 during the 39-week period ended September 27, 2026. This policy change is reflected within the condensed consolidated balance sheets, statements of stockholders’ equity, and “Note 16. Common Stock” and the effect of the accounting change is qualitatively and quantitatively immaterial. The adoption did not impact the consolidated statements of operations and comprehensive (loss) income or the statements of cash flows. The Company is currently evaluating the impact of its pending adoption of the remaining updates that were not early adopted in ASU 2025-12 on its consolidated financial statements and disclosures.

There have been no new accounting pronouncements adopted by the Company during the 13-week period ended September 27, 2026.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of its pending adoption of ASU 2024-03 on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40) — Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software under ASC 350-40 by aligning it with current development practices, especially agile and iterative methods. It clarifies when to begin capitalizing costs, improves operability across different development approaches, and enhances disclosure requirements. This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2025-06 on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

Note 3. Investment Securities

The Company had no available-for-sale investment securities as of September 27, 2026.

The following table summarizes the Company’s available-for-sale investment securities as of December 28, 2025:

For the 13-week periods ended September 27, 2026 and September 28, 2025, there wereno proceeds from the sale of available-for-sale securities. For the 39-week periods ended September 27, 2026 and September 28, 2025, proceeds from the sale of available-for-sale securities were$43,002 and$404, respectively.

We liquidated our portfolio of available-for-sale investment securities as of September 27, 2026. As of September 27, 2026 and December 28, 2025, there wereno diversified investments in the Company’s securities portfolio in an unrealized loss position.

The fair value and location of all investment securities are included in “Fair Value Measurements” in Note 5 below.

Note 4. Derivative Financial Instruments

The Company enters into derivative instruments to mitigate the impact of commodity price volatility. Such instruments may include call options on commodity price contracts. Realized and unrealized gains and losses on the Company’s commodity derivatives not designated as hedging instruments are recorded in other income (expense), net. The Company recognizes all derivative instruments as either assets or liabilities.

The following table presents the aggregated outstanding notional amounts related to the Company’s derivative financial instruments for the periods presented:

For the 13-week periods ended September 27, 2026 and September 28, 2025, the pre-tax amount of commodity contract derivative (gains) losses recognized in other income (expense), net was$(1,018) and$503, respectively. For the 39-week periods ended September 27, 2026 and September 28, 2025, the pre-tax commodity contract derivative (gains) losses recognized in other expense, net was$(455) and$1,325, respectively.

The fair value and location of all outstanding derivative financial instruments are included in “Fair Value Measurements” in Note 5 below.

Note 5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are defined below:

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Level 1 – Quoted prices in active markets for identical assets or liabilities.

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Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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Level 3 – Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Assets Measured at Fair Value on a Recurring Basis

The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis for the periods presented:

During the 39-week period ended September 27, 2026, there wereno transfers between fair value measurement levels. For additional information on concentrations of credit risk for the Company’s financial instruments, refer to “Investment Securities” in Note 3 above.

Fair Value of Other Financial Instruments

The carrying values of the Company’s short-term financial instruments not included above, including cash, trade receivables, other non-trade receivables included in prepaid expense and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to their short-term nature.

Note 6. Revenue Recognition

The following table summarizes the Company’s net revenue by primary product for the periods presented:

Net revenue is primarily generated from the sale of eggs and butter. The Company’s product offerings include shell eggs, hard-boiled eggs, liquid whole eggs and stick butter.

During the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025, the Company had customers that individually accounted for 10% or more of the Company’s net revenue. The percentage of net revenue from significant customers during the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025 is as follows:

As of September 27, 2026 and December 28, 2025, the Company had customers that individually accounted for 10% or more of the Company’s accounts receivable. The percentage of accounts receivable, net due from significant customers as of September 27, 2026 and December 28, 2025 is as follows:

Note 7. Allowance for Credit Losses

As of September 27, 2026 and December 28, 2025, the Company had allowances for credit losses of$1,503 and$719, respectively.

The Company recognizes current estimated credit losses (“CECL”) for accounts receivable and other receivables. The CECL for trade receivables is estimated based on the trade receivable aging category, credit risk of specific customers, past collection history, and management’s evaluation of accounts receivable. The Company also has other receivables which are classified within prepaid expenses and other current assets. The CECL for other receivables is estimated based on the other receivables aging category and the probability of default. Provisions for CECL are classified within selling, general and administrative costs.

Changes in the allowance for credit losses for the 39-week period ended September 27, 2026 were as follows:

Note 8. Inventories

Inventory consisted of the following as of the periods presented:

On a periodic basis, the Company compares the amount of inventory on hand with its latest forecasted requirements to determine whether charges for excess or obsolete inventory reserves are required.

Note 9. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of the periods presented:

Note 10. Property, Plant and Equipment

Property, plant and equipment consisted of the following as of the periods presented:

During the 13-week periods ended September 27, 2026 and September 28, 2025, depreciation of property, plant and equipment was approximately $2,946 and$2,043, respectively. During the 39-week periods ended September 27, 2026 and September 28, 2025, depreciation of property, plant and equipment was approximately $7,816 and$6,663, respectively.

During fiscal 2025, the Company elected to sell certain parcels of land located in Indiana previously purchased for the development of “accelerator farms” that in the aggregate total approximately 526 acres. Such parcels of land met the criteria to be classified as assets held for sale. As of September 27, 2026, approximately 263 acres remain to be sold with a carrying amount of $2.1 million classified as assets held for sale in the condensed consolidated balance sheets and are expected to be disposed of within the next 12 months.

Note 11. Leases

Operating lease cost is recognized on a straight-line basis over the lease term and finance lease cost is recognized as amortization expense for the right-of-use (“ROU”) assets and interest expense associated with the finance lease liabilities.

The components of lease cost, classified within cost of goods sold, selling, general and administrative and interest expense for the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025 are below:

Future undiscounted cash flows are as follows:

During the 39-week periods ended September 27, 2026 and September 28, 2025, ROU assets obtained in exchange for new finance lease obligations were$139 and$2,637, respectively. During the 39-week periods ended September 27, 2026 and September 28, 2025, ROU assets obtained in exchange for new operating lease obligations were$65,710 and$65,448, respectively, of which$30,747 and$0 were related to operating ROU asset lease modifications, respectively. During the 39-week periods ended September 27, 2026 and September 28, 2025, decreases in operating ROU assets due to lease terminations and modifications were$399 and$3,881, respectively.

Note 12. Goodwill and Other Assets

Goodwill and other assets consisted of the following as of the periods presented:

As of September 27, 2026 and December 28, 2025, the Company capitalized costs of$15,959 and$12,849, respectively, relating to cloud computing arrangement implementation costs. Of this total,$9,971 and$9,501 are classified as non-current assets under the heading “goodwill and other assets,” including$2,758 and$668 of accumulated amortization, and$3,230 and$2,680 are classified as current assets under the heading “prepaid expenses and other current assets” as of September 27, 2026 and December 28, 2025, respectively. This software was developed by a third party in conjunction with the Company’s employees. Amortization of the cloud computing arrangement implementation costs began once the software was placed in service in September 2025 and is classified within “selling, general and administrative costs.”

Note 13. Accrued Liabilities

Accrued liabilities consisted of the following as of the periods presented:

Note 14. Product Exit Costs

In May 2026, management of the Company elected to wind down and discontinue its butter product offerings to focus on its core egg product categories, with such discontinuation expected to be substantially completed by the end of fiscal 2026.

There was no activity related to the exit of the Company’s butter product offerings during the 13-week period ended September 27, 2026. The following table summarizes the activity related to the exit of the Company’s butter product offerings during the 39-week period ended September 27, 2026:

The inventory obsolescence recognized during the 39-week period ended September 27, 2026 arose from the termination of the contractual relationship by the Company’s butter processor due to the Company’s previously announced decision to wind down its butter product offerings. The Company is evaluating various alternative courses of action related to the wind-down of its butter products and the Company may incur additional costs from such actions. The Company estimates that it will continue to incur costs related to the exit of the Company’s butter product offerings through the end of fiscal 2026. The Company’s management estimates that the total costs incurred related to the exit of its butter product offerings will be between $8.0 million and $13.0 million, consisting of expenses relating to inventory write-downs, inclusive of the inventory obsolescence recorded by the Company to date. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the wind-down of the Company’s butter business.

Note 15. Long-Term Debt

The Company’s long-term debt obligations consist of the following:

JPMorgan Credit Facility

In April 2024, the Company entered into a syndicated credit agreement with JPMorgan Chase Bank, N.A. (“JPMorgan”) and the other lenders party thereto (the “JPMorgan Credit Facility”), which provided for a five-year, $60.0 million revolving credit facility. The JPMorgan Credit Facility was terminated on August 4, 2026 (the “Closing Date”), in connection with the Company’s consummation of the JPMorgan ABL Credit Facility and the Silver Point Term Loan (each as defined below).

The JPMorgan Credit Facility included a $5.0 million letter of credit sub-limit and an accordion option that would allow the Company to increase the aggregate revolving commitments or add incremental term loans in an aggregate amount not to exceed the greater of (i) $35.0 million and (ii) an amount equal to 100% of consolidated adjusted EBITDA.

Any borrowings under the JPMorgan Credit Facility bore interest, at the Company’s election, at either (i) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus 0.10% plus a margin of either 1.75%, 2.00% or 2.25% depending on the Company’s net leverage ratio or (ii) an alternative base rate plus a margin of either 0.75%, 1.00% or 1.25%, depending on the Company’s net leverage ratio. The Company was required to pay a commitment fee on the undrawn portion of the aggregate commitments that accrued at either 0.20% or 0.375% per annum depending on the Company’s revolving credit exposure. Additionally, the Company was required to pay a participation fee on the account of each lender for each outstanding letter of credit at a rate equal to the applicable rate used to determine the interest rate applicable to term benchmark revolving loans.

The JPMorgan Credit Facility was secured by liens on substantially all of the Company’s assets, including certain intellectual property assets and investment securities. It required the Company to maintain (i) a net leverage ratio of no greater than 3.25 to 1.00, subject to two increases up to 4.00 to 1.00 for a certain period following material acquisitions, and (ii) a fixed charge coverage ratio of no less than 1.35 to 1.00. On August 3, 2026, the Company entered into Amendment No. 1 to the JPMorgan Credit Facility to (i) waive the event of default related to the Company’s breach of the fixed charge coverage ratio covenant for the fiscal quarter ended June 28, 2026, (ii) suspend the testing of the fixed charge coverage ratio for the fiscal quarter ended June 28, 2026, (iii) modify the conditions to each revolving borrowing and (iv) modify certain negative covenant thresholds. In connection with the establishment of the JPMorgan ABL Credit Facility (as defined below) on August 4, 2026, the JPMorgan Credit Facility was terminated.

During the 13-week periods ended September 27, 2026 and September 28, 2025, the Company recognized interest expense of$0.3 million and$0 related to draws on the JPMorgan Credit Facility, respectively. During the 39-week periods ended September 27, 2026 and September 28, 2025, the Company recognized interest expense of$0.4 million and$0 related to draws on the JPMorgan Credit Facility, respectively.

JPMorgan ABL Credit Facility

On the Closing Date, the Company entered into an asset-backed credit agreement with JPMorgan (the “JPMorgan ABL Credit Facility”), which provides for a three-year revolving credit facility of up to $60.0 million. Availability under the JPMorgan ABL Credit Facility is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of the Company’s accounts receivable and inventory as reduced by certain reserves, if any. The JPMorgan ABL Credit Facility replaced the existing JPMorgan Credit Facility, which was terminated concurrently with the establishment of the JPMorgan ABL Credit Facility.

Any borrowings under the JPMorgan ABL Credit Facility bear interest at (i) for the first twelve months, either (a) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus a margin of 2.50%, or (b) an alternative base rate plus a margin of 1.50% or (ii) after the first twelve months, either (a) an adjusted term Secured Overnight Financing Rate or adjusted daily Secured Overnight Financing Rate plus a margin of either 1.75%, 2.00% or 2.25% depending on the Company’s fixed charge coverage ratio, or (b) an alternative base rate plus a margin of either 0.75%, 1.00% or 1.25% depending on the Company’s fixed charge coverage ratio. The Company is required to pay a commitment fee on the undrawn portion of the aggregate commitments that accrues at 0.375% per annum.

The JPMorgan ABL Credit Facility is secured by liens on substantially all of the Company’s assets, including a first lien on the Company’s accounts, accounts receivable and inventory and a second lien on all other assets. It requires the Company to maintain (i) minimum revolving availability of $15.0 million for the first twelve months following the effective date of the JPMorgan ABL Credit Facility, and (ii) a fixed charge coverage ratio of not less than 1.10 to 1.00 for months 13 through 36. The loan agreement contains customary negative covenants that limit the Company’s ability, and the ability of its subsidiaries, to take certain actions without lender consent or unless otherwise permitted under the agreement.

As of September 27, 2026, there wereno outstanding borrowings and $25.9 million of availability for borrowing in excess of the Minimum Availability under the JPMorgan ABL Credit Facility. During the 13-week period ended September 27, 2026, the Company didnot recognize any interest expense related to draws on the JPMorgan ABL Credit Facility.

Silver Point Term Loan

On the Closing Date, the Company entered into a term loan agreement with Silver Point Finance, LLC (“Silver Point”) and the lenders party thereto (the “Silver Point Term Loan”), which provides for a $125.0 million term loan with a three-year tenor. The Company borrowed the full amount of the Silver Point Term Loan on the Closing Date and used a portion of the proceeds to repay the existing indebtedness under the JPMorgan Credit Facility.

The Silver Point Term Loan bears interest at either (i) an adjusted term Secured Overnight Financing Rate (subject to a 1.00% floor) plus 7.50% or (ii) an alternative base rate (subject to a 2.00% floor) plus 6.50%. As of September 27, 2026, the effective interest rate on the Silver Point Term Loan was 14.73%, based on the Company’s election for the loan to bear interest at the Secured Overnight Financing Rate. The Company evaluates its variable interest rate on a quarterly basis. The Company is required to make installment payments equal to 0.25% of the aggregate gross original principal amount of the outstanding amount borrowed of the Silver Point Term Loan on the last business day of each fiscal quarter, commencing with the fiscal quarter ending December 27, 2026.

The Silver Point Term Loan is secured by liens on substantially all of the Company’s assets, including a first lien on all assets (other than the Company’s accounts, accounts receivable and inventory) and a second lien on the Company’s accounts, accounts receivable and inventory. The loan agreement contains customary negative covenants that limit the Company’s ability, and the ability of its subsidiaries, to take certain actions without lender consent or unless otherwise permitted under the agreement.

During the 13-week period ended September 27, 2026, the Company recognized $2.4 million in interest expense, including amortization of debt discount and issuance costs, related to the Silver Point Term Loan.

Note 16. Common Stock

As of September 27, 2026, the Company’s amended and restated certificate of incorporation authorized the Company to issue up to 310,000,000 shares of common stock, par value $0.0001 per share, of which 42,935,200 shares were issued and outstanding.

The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock, if any. Each share of the Company’s common stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders. Holders of the Company’s common stock are entitled to receive dividends as may be declared by the Board of Directors, if any, subject to the preferential dividend rights of preferred stock, if any. No cash dividends were declared or paid during the periods presented.m

As of each balance sheet date, the Company had reserved shares of common stock for issuance in connection with the following:

Stock Repurchase Program

In February 2026, the Board of Directors authorized entry into a stock repurchase program, which authorized the Company to periodically repurchase up to $100.0 million of its common stock. In August 2026, the Board of Directors terminated the stock repurchase program.

No shares of common stock were repurchased during the 13-week period ended September 27, 2026. During the 39-week period ended September 27, 2026, the Company repurchased 2,130,851 shares of its common stock at an average price per share of $16.43 for an aggregate cost of $35.0 million.

Note 17. Stock-Based Compensation

The Company measures compensation expense for all stock-based awards based on the estimated fair values on the date of the grant. Stock options generally vest ratably over three years from the date of grant, subject to the recipient’s continued service over such period, and expire 10 years from the date of grant. RSUs generally vest ratably over three years from the date of grant, subject to the recipient’s continued service over such period, and contain no other service or performance conditions. PSUs vest at the end of athree-year period based on the achievement of certain Company performance metrics and the recipient’s continued service over such period. The Company’s policy is to recognize stock-based compensation expense on a straight-line basis over the requisite service or vesting period. For awards that are contingent upon performance metrics, the probability of achievement is taken into account in the calculation of the expense to be recognized and modified as needed. Forfeitures for stock options and restricted stock awards, including RSUs and PSUs, are recognized as they occur.

The Company recognized stock-based compensation expense in the condensed consolidated statements of operations for the periods presented:

(1) Included within selling, general and administrative expense for the 39-week period ended September 27, 2026 is $3.3 million of reversals of previously recognized stock-based compensation expense resulting from a change in estimate based on revised expectations of the attainment levels for performance metrics of certain PSUs, partially offset by $7.8 million of ongoing expenses associated with existing grants.

Stock Option Activity

The following table summarizes stock option activity since December 28, 2025:

The fair value of stock options vested during the 13-week periods ended September 27, 2026 and September 28, 2025 was$0 and$12, respectively. The fair value of stock options vested during the 39-week periods ended September 27, 2026 and September 28, 2025 was$0 and$979, respectively. As of September 27, 2026, total unrecognized stock-based compensation expense related to unvested stock options was$1, which is expected to be recognized over a weighted-average period of 0.16 years.

Restricted Stock Unit Activity

The following table summarizes RSU activity since December 28, 2025:

(1) Includes 90,917 shares of common stock withheld to cover taxes on the release of vested RSUs and became available for future grants pursuant to the 2020 Incentive Plan.

The fair value of RSU shares vested during the 13-week periods ended September 27, 2026 and September 28, 2025 was$83 and$119, respectively. The fair value of RSU shares vested during the 39-week periods ended September 27, 2026 and September 28, 2025 was$5,286 and$5,624, respectively. As of September 27, 2026, total unrecognized stock-based compensation expense related to the Company’s unvested RSU activity was$14,498, which is expected to be recognized over a weighted-average period of 2.00 years.

Performance Stock Unit Activity

The Company grants PSUs to certain of its officers and employees. These PSUs vest at the end of a three-year period based upon the level of achievement of certain Company performance metrics and the recipient’s continued service over such period. The number of shares that can be earned will range from 0% to 200% of the granted PSUs, based upon the Company’s level of achievement of the stated performance metrics. The number of PSUs expected to vest and for which compensation cost has been recognized is based on the number of awards that the Company believes are probable to vest as of September 27, 2026.

The following table summarizes PSU activity since December 28, 2025:

The fair value of PSU shares vested during the 13-week and 39-week periods ended September 27, 2026 and September 28, 2025 was$0, asno shares have vested as of such periods. As of September 27, 2026, total unrecognized stock-based compensation expense related to the Company’s unvested PSU activity was$6,092, which is expected to be recognized over a weighted-average period of 2.04 years.

2020 Equity Incentive Plan: In July 2020, the Board of Directors adopted the 2020 Incentive Plan, which was subsequently approved by the Company’s stockholders and became effective on July 30, 2020. Initially, the maximum number of the Company’s common stock that may be issued under the 2020 Incentive Plan was 8,595,871 shares. The 2020 Incentive Plan provides that the number of shares reserved and available for issuance under the 2020 Incentive Plan will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Board of Directors. As of September 27, 2026,14,982,703 shares were available for future grants of the Company’s common stock, which includes 1,791,885 shares of common stock that were automatically added to the available reserve on January 1, 2026.

Employee Stock Purchase Plan: In July 2020, the Board of Directors adopted the 2020 ESPP, which was subsequently approved by the Company’s stockholders and became effective on July 30, 2020. The 2020 ESPP authorizes the initial issuance of up to 900,000 shares of the Company’s common stock to certain eligible employees or, as designated by the Board of Directors, employees of a related company. The 2020 ESPP provides that the number of shares reserved and available for issuance under the 2020 ESPP will automatically increase each January 1, beginning on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to the lesser of (i)1% of the outstanding number of shares of common stock on the immediately preceding December 31 and (ii)900,000, or such lesser number of shares as determined by the Board of Directors. As of September 27, 2026,3,250,195 shares of the Company’s common stock were available for future issuance under the 2020 ESPP, which includes 447,971 shares of common stock that were automatically added to the available reserve on January 1, 2026. The Board of Directors authorizes six-month offering periods, with the most recent beginning on May 16, 2026.

Note 18. Income Taxes

The Company’s effective tax (benefit) rate for the 13-week periods ended September 27, 2026 and September 28, 2025 was approximately(30%) and 25%, respectively. The Company’s effective tax (benefit) rate for the 39-week periods ended September 27, 2026 and September 28, 2025 was(25%) and 27%, respectively. The Company’s effective tax benefit for the 13-week and 39-week periods ended September 27, 2026 differs from the statutory rate due primarily to state taxes, offset by the impact of compensation deduction limitations under Internal Revenue Code Section 162(m). The Company’s effective tax rate for the 13-week and 39-week periods ended September 28, 2025 differs from the statutory rate due primarily to discrete tax benefits related to the exercise of non-qualified stock options and the vesting of restricted stock units. In addition, the effective tax rates for the 13-week and 39-week periods ended September 28, 2025 were impacted by a discrete tax item primarily associated with an uncertain tax position related to state income taxes. As of September 27, 2026 and December 28, 2025, the Company had uncertain tax positions of $0.5 million and $1.7 million, respectively, under the heading “Other liabilities” in the condensed consolidated balance sheets.

For interim periods, the Company’s income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions, and other items. The Company’s estimated annual effective tax rate differs from the federal statutory rate of 21% due to state income taxes and the impact of compensation deduction limitations under Internal Revenue Code Section 162(m).

Note 19. Net (Loss) Income Per Share

Basic and diluted net (loss) income per share attributable to Vital Farms, Inc. common stockholders were calculated as follows:

The Company excluded the following shares of common stock, outstanding at each period end, from the computation of dilutednet (loss) income per share attributable to Vital Farms, Inc. common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Note 20. Accumulated Other Comprehensive (Loss) Income

There were no amounts reclassified from accumulated other comprehensive (loss) income(“AOCI”) to the unaudited condensed consolidated statement of income for the 13-week periods ended September 27, 2026 and September 28, 2025. The amounts reclassified from AOCI for the periods presented below were as follows (in thousands):

The gross amount and related tax expense recorded in, and associated with, each component of other comprehensive (loss) income were as follows (in thousands):

Note 21. Commitments and Contingencies

Indemnification Agreements: In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its Board of Directors and its executive officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. As of September 27, 2026, the Company has not incurred any material costs as a result of such indemnification agreements.

Litigation: The Company is subject to various claims and contingencies that are in the scope of ordinary and routine litigation incidental to its business, including those related to regulation, litigation, business transactions, employee-related matters and taxes, among others. When the Company becomes aware of a claim or potential claim, the likelihood of any loss or exposure is assessed. Based on these assessments and estimates, the Company may establish reserves, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from the Company’s assessments and estimates.

On March 27, 2026, the Company and certain of its officers were named as defendants in a putative class action complaint then captioned Don Wilkerson et al. v. Vital Farms, Inc. et al. in the United States District Court for the Western District of Texas (the “W.D. Tex. Court”). The plaintiffs allege that the defendants made false and/or misleading statements about the Company’s business, operations and prospects in violation of Section 10(b) of the Exchange Act, Rule 10b5-1 promulgated thereunder, and Section 20(a) of the Exchange Act. In early July 2026, the W.D. Tex. Court appointed an individual named Xiaohu Wang as lead plaintiff in the case and the securities class action was recaptioned Xiaohu Wang et al. v. Vital Farms, Inc. et al. (the “Wang Securities Class Action”). The plaintiffs filed an amended complaint on September 25, 2026. Pursuant to the parties’ briefing schedule in the Wang Securities Class Action, defendants’ motion to dismiss the amended complaint is due November 24, 2026.

On July 8, 2026, the Company and certain of its directors and officers were named as defendants in a stockholder derivative lawsuit captioned Chirag Mody et al. v. Vital Farms, Inc. et al. in the W.D. Tex. Court (the “Mody Stockholder Derivative Lawsuit”). The plaintiffs allege that the defendants breached their fiduciary duties, engaged in gross mismanagement, acts of corporate waste and unjust enrichment. The plaintiffs further allege that the defendants made false and/or misleading statements about the Company’s business, operations and prospects in violation of Section 14(a) of the Exchange Act. On October 7, 2026, the W.D. Tex. Court granted the parties’ stipulation to stay the Mody Stockholder Derivative Lawsuit pending resolution of the Wang Securities Class Action.

Although the Company maintains insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions and caps on amounts recoverable. Even if the Company believes a claim is covered by insurance, insurers may dispute its entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of the Company’s recovery. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company records a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible.

The Company intends to vigorously defend itself in these matters. Given the uncertainty of the litigation, the stage of the case and legal standards that must be met for, among other things, class certification and success on the merits, the Company is unable to reasonably estimate the possible loss or range of loss, if any, that may result from the claims.

Note 22. Related Party Transactions

Sandpebble Builders Preconstruction, Inc.: The Company utilizes Sandpebble Builders Preconstruction, Inc. and Sandpebble South, Inc. (collectively “Sandpebble”) for certain project management and related services associated with the construction and expansion of the Company’s egg processing facilities, including certain limited project management and related services for the Company’s planned future egg packing facility in Seymour, Indiana. Victor Canseco, the owner and principal of Sandpebble, is the father of Russell Diez-Canseco, the Company’s President, Chief Executive Officer and Executive Chairperson (the “CEO”) and a member of the Board of Directors. In connection with the services described above, the Company paid Sandpebble$85 and$604 during the 13-week periods ended September 27, 2026 and September 28, 2025, respectively, and$638 and$1,887 during the 39-week periods ended September 27, 2026 and September 28, 2025, respectively. Amounts paid to Sandpebble are included in property, plant and equipment, net and selling, general and administrative costs. As of September 27, 2026 and December 28, 2025, amounts owed to Sandpebble were$12 and$136, respectively, and are included in accounts payable and accrued liabilities.

Note 23. Segment Reporting

The Company has onlyone reportable segment for which discrete financial information is available: Eggs and Butter. The Company derives revenue in the United States and manages and organizes its business activities on a consolidated basis. The Eggs and Butter segment derives revenues primarily from sales of its products, including eggs and butter, to customers, which include natural retailers, mainstream retailers, distributors and foodservice customers. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

The following tables present the significant segment expenses and other segment items regularly reviewed by the Company’s chief operating decision maker, currently the CEO:

(1) Excludes depreciation and amortization.

(2)Other segment expenses included in segment net (loss) income include the change in fair value of derivative instruments and other miscellaneous gains and losses.

(1) Excludes depreciation and amortization.

(2)Other segment expenses included in segment net (loss) income include the change in fair value of derivative instruments and other miscellaneous gains and losses.