Lulu's Fashion Lounge Holdings, Inc.

Current report

We may not be able to refinance the 2021 Credit Agreement, as amended, on favorable terms within our anticipated timeframe, or at all, in order to meet our current and future capital needs.

Current report

The 2021 Credit Agreement, as amended, will mature on August 22, 2025 (the "Maturity Date"). The Forbearance Period under the Forbearance Agreement, as amended, also expires on August 22, 2025. Although the Company is currently negotiating a new asset-based revolving credit facility, we may not be able to timely refinance the 2021 Credit Agreement, as amended, on favorable terms, within our anticipated timeframe, or at all, including due to our current financial condition, market volatility and uncertainty resulting from international conflicts or geopolitical tensions, among other factors. Failure to repay the indebtedness outstanding under the 2021 Credit Agreement, as amended, by the Maturity Date, without a timely cure, waiver or further extension of the Forbearance Period, would result in an event of default under the 2021 Credit Agreement, as amended. If an event of default under the 2021 Credit Agreement, as amended, occurs and is not cured or waived, the lenders could elect to declare all amounts outstanding under the 2021 Credit Agreement, as amended, immediately due and payable and exercise other remedies as set forth in the 2021 Credit Agreement, as amended. In addition, the lenders would have the right to enforce their security interests against the collateral pledged to them, which includes substantially all of our assets.

Current report

We currently have $5.8 million of indebtedness outstanding under the terms of the 2021 Credit Agreement, as amended. In addition, we expect to require additional capital in the future to respond to business opportunities, challenges, or unforeseen circumstances. If we are unable to refinance the 2021 Credit Agreement, as amended, on favorable terms within our anticipated timeframe, or at all, our ability to repay our indebtedness under the 2021 Credit Agreement, as amended, and continue to grow or support our business, and respond to business challenges could be significantly limited.

Current report

We are required to meet the Nasdaq Capital Market’s continued listing requirements and other Nasdaq rules, or we may risk delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell our common stock.

Current report

We are required to meet the continued listing requirements of the Nasdaq Capital Market and other Nasdaq rules, including those regarding director independence and independent committee requirements, minimum share price, minimum stockholders' equity and certain other continued listing standards and corporate governance requirements.

Current report

We have previously failed to meet the continued listing requirements of the Nasdaq Global Market under Nasdaq rules. Specifically, we received a deficiency letter from Nasdaq on February 27, 2025 regarding not being in compliance with the minimum close bid price of $1.00 per share required for continued listing, and we received a deficiency letter on May 21, 2025 regarding not being in compliance with the minimum $10 million of stockholders' equity required for

Current report

continued listing on the Nasdaq Global Market. We regained compliance with these deficiencies through our implementation of the Reverse Stock Split and our transfer to the Nasdaq Capital Market, respectively. While we are currently in compliance with the continued listing requirements of the Nasdaq Capital Market, there can be no guarantee that we will be able to maintain compliance with these requirements in the future. If we are unable to maintain compliance with the continued listing requirements of the Nasdaq Capital Market in the future, our common stock could be delisted.

Previous report

International trade disputes and tariffs imposed by the United States and/or other countries’ governments or a global trade war could adversely impact our business.

Previous report

A predominant portion of the merchandise we sell is originally manufactured in countries other than the United States, including China and Mexico. International trade disputes that result in tariffs and other protectionist or retaliatory measures could adversely affect our business, including disruption and cost increases in our established patterns for sourcing our merchandise and increased uncertainties in planning our sourcing strategies and forecasting our margins. For example, on April 4, 2025, a global reciprocal tariff program was announced, establishing a minimum 10% tariff on most imported goods. Certain country-specific tariffs significantly increased, reaching 145% on Chinese imports and 125% on certain United States goods imported into China. However, on May 12, 2025, the United States and China reached a 90-day agreement to substantially reduce these tariffs and allow for further negotiations. These tariffs may be increased in the future or additional tariffs may be imposed on imports from China or other countries, including additional countries where our products are manufactured or sourced from. The imposition or increase of any such tariffs would likely increase the cost of our merchandise and negatively impact our operating results. Although such changes would have implications across the entire industry, we may fail to effectively adapt to and managethe adjustments in strategy that would be necessary in response to those changes. We are working with our current suppliers to mitigate our exposure to current or potential tariffs and seeking opportunities to engage other suppliers, but there can be no assurance that we will be able to offset any increased costs or secure other suppliers. It is also possible one or more of these suppliers may suffer disruptions in their business or experience significant increases in the cost of their goods or services sold due to factors beyond their control, including changes in the import and export policies, including trade restrictions, new or increased tariffs, sanctions and countersanctions. Further, we may have to increase prices for our customers, which could reduce the competitiveness of our products and adversely affect sales.

Previous report

Other countries may also change their business and trade policies in anticipation of or in response to the United States’ and/or other countries’ increased import tariffs and other changes in international trade policy and regulations already enacted or that may be enacted in the future. In addition to the general uncertainty and overall risk from potential changes in trade laws and policies, as we make business decisions in the face of such uncertainty, we may incorrectly anticipate the outcomes, miss out on business opportunities, or fail to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes. These risks could adversely affect our revenues, reduce our profitability, and negatively impact our business.