Lucky Strike Entertainment Corp

Notes to Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

(1)Description of Business and Significant Accounting Policies

Lucky Strike Entertainment Corporation, a Delaware corporation, and its subsidiaries (referred to herein as, the “Company”, “Lucky Strike Entertainment”, “Lucky Strike”, “we,” “us” and “our”) is one of the world’s premier operators of location-based entertainment.

The Company operates location-based entertainment venues under different brand names. Our AMF and Bowl America branded locations are traditional bowling locations, while the Lucky Strike and Bowlero branded locations offer a more upscale entertainment concept with lounge seating, enhanced food and beverage offerings, and more robust customer service for individuals and group events. The Company also operates other forms of location-based entertainment, such as Octane Raceway, Raging Waves water park, Shipwreck Island water park, Big Kahuna’s water park, Wet ‘n Wild Emerald Pointe water park, Castle Park and Boomers Parks. All of our locations are managed in a fully integrated and consistent basis because all of our locations are in the same business of operating location-based entertainment.

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2025.

Principles of Consolidation: The condensed consolidated financial statements and related notes include the accounts of Lucky Strike and the subsidiaries it controls. Control is determined based on ownership rights or, when applicable, based on whether the Company is considered to be the primary beneficiary of a variable interest entity. We use the equity method to account for investments in which we have the ability to exercise significant influence over the investee’s operating and financial policies, or in which we hold a partnership or limited liability company interest in an entity with specific ownership accounts, unless we have virtually no influence over the investee’s operating and financial policies. All significant intercompany balances and transactions have been eliminated in consolidation.

Segment Reporting: We manage our business activities on a consolidated basis and operate as a single operating segment: Location-based entertainment. The Company’s Chief Executive Officer, Thomas Shannon, is the Company’s chief operating decision maker (“CODM”). The CODM reviews the financial information presented on a consolidated basis since the Company provides its offerings and views key metrics, costs and margins similarly among our various location-based entertainment venues.

As a result, the CODM assesses performance and allocates resources based on net income (loss), as reported on our condensed consolidated statements of operations. The CODM manages and evaluates the results of the business in a consolidated manner to drive synergies and develop uniform strategies. Accordingly, key components and processes of the Company’s operations are centrally managed, including location acquisitions and development, customer service, marketing, human resources, finance and accounting, legal and government affairs. Segment asset information is not used by the CODM to allocate resources. The operating financial results along with significant segment expenses and other segment items are presented on the Company’s condensed consolidated statements of operations.

Use of Estimates: The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the balance sheets, statements of operations and accompanying notes. Significant estimates made by management include, but are not limited to, cash flow projections; the fair value of assets and liabilities in acquisitions; derivatives with hedge accounting; share-based compensation; depreciation and impairment of long-lived assets; carrying amount and recoverability analyses of property and equipment, assets held for sale, goodwill and other intangible assets; valuation of deferred tax assets and liabilities and income tax uncertainties; and reserves for litigation, claims and self-insurance costs. Actual results could differ from those estimates.

Change in Estimates: During the first quarter of fiscal year 2026, management conducted a review of the estimated useful lives of fixed assets due to operational changes, improved maintenance practices, and technological enhancements that are extending asset durability and reducing wear and tear. As a result of this review, the estimated useful lives were revised to better reflect their estimated future economic benefits.

The following table shows the impact of the changes in estimates:

Fair-value Estimates: We have various financial instruments included in our financial statements. Financial instruments are carried in our financial statements at either cost or fair value. We estimate fair value of assets and liabilities using the following hierarchy using the highest level possible:

Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.

Level 2: Observable prices that are based on inputs not quoted on active markets, but are corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available.

Cash and Cash Equivalents: The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents. The Company accepts a range of debit and credit cards, and these transactions are generally transmitted to a bank for reimbursement within 24 hours. The payments due from the banks for these debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash equivalents.

Prepaid Expenses and Other Current Assets: Prepaid expenses consists primarily of payments made for goods and services to be received in the near future. Prepaid expenses consists of sales tax, insurance premiums, deposits, and other costs.

Equity Method Investments: The aggregate carrying amounts of our equity method investments was $25,872 and $25,841 as of December 28, 2025 and June 29, 2025, respectively, and are included as a component of Other Assets in our accompanying condensed consolidated balance sheets. Substantially all of our equity method investments consist of a limited partner interest in a subsidiary of VICI Properties Inc. (“VICI”). Equity method investments are adjusted to recognize (1) our share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment, (2) additional contributions made or distributions received, (3) amortization of the recorded investment that exceeds our share of the book value of the investee’s net assets, and (4) impairments resulting from other-than-temporary declines in fair value. Cash distributions received from our equity method investments are considered returns on investment and presented within operating activities in the condensed consolidated statement of cash flows to the extent of cumulative equity in net income of the investee. Additional distributions in excess of cumulative equity are considered returns of our investment and are presented as investing activities.

Derivatives: We are exposed to interest rate risk. To manage this risk, we entered into interest rate collar derivative transactions associated with a portion of our outstanding debt. The interest rate collars, which are designated for accounting purposes as cash flow hedges, establish a cap and floor on the Secured Overnight Financing Rate (SOFR). The Company's interest rate collars expire on March 31, 2026.

For financial derivative instruments that are designated as a cash flow hedge for accounting purposes, the effective portion of the gain or loss on the financial derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction, and in the same period or periods during which the forecasted transaction affects earnings. Gains and losses on the financial derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

The interest rate collar agreements effectively modified our exposure to interest rate risk by converting a portion of our interest payments on floating rate debt to include a cap and floor, thus reducing the impact of interest rate changes on future interest expense. See Note 7 -Debt for more information.

Net (Loss) Income Per Share Attributable to Common Stockholders: We compute net (loss) income per share of Class A common stock and Class B common stock under the two-class method. Holders of Class A common stock and Class B common stock have equal rights to the earnings of the Company. Our participating securities include the Series A preferred stock that have a non-forfeitable right to dividends in the event that a dividend is paid on common stock, but do not participate in losses, and thus are not included in a two-class method in periods of loss. In periods where the Company reports a net loss, all potentially dilutive securities are excluded from the calculation of the diluted net loss per share attributable to common stockholders as their effect is antidilutive and accordingly, basic and diluted net loss per share attributable to common stockholders will be the same. Dilutive securities include Series A preferred stock, earnouts, stock options, and restricted stock units (“RSUs”). See Note 14 -Net (Loss) Income Per Share.

Emerging Growth Company Status: The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult because of the potential differences in accounting standards used. We will lose our emerging growth company status on June 28, 2026, which is the last day of the fiscal year following the fifth anniversary of Isos’ IPO (March 5, 2026).

Recently Issued Accounting Standards: In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures through the standardization and disaggregation of rate reconciliation categories and income taxes paid in both domestic and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be applied prospectively, with early adoption and retrospective application permitted. The Company adopted ASU 2023-09 in the first quarter of fiscal year 2026 and the adoption of this guidance will result in updates to annual disclosures to adhere to the new requirements, but will not otherwise have a significant impact on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. We are currently evaluating the impact of this standard to our consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal Use Software (“ASU 2025-06”), which will improve disclosures surrounding internal-use software and the timing of capitalization when companies use the incremental and iterative development method. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and is to be applied prospectively, with early adoption and retrospective application permitted. We are currently evaluating the impact of this standard to our consolidated financial statements.

(2)Business Acquisitions

Acquisitions: The Company continually evaluates potential acquisitions, which can be either business combinations or asset purchases, that strategically fit within the Company’s overall growth strategy in order to expand our market share in key geographic areas and to improve our ability to leverage our fixed costs.

2026 Business Acquisitions: For business combinations, the Company allocates the consideration transferred to the identifiable assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. We estimate the fair values of the assets acquired and liabilities assumed using valuation techniques, such as the income, cost and market approaches. During the six months ended December 28, 2025, the Company hadone business acquisition in which we acquired four locations for a total consideration of $44,047. The Company is still in the process of finalizing its valuation analyses for the business acquisition. The remaining fair value estimates include working capital, intangibles, property and equipment, and operating lease assets and liabilities. If necessary, for business combinations, we will continue to refine our estimates throughout the permitted measurement period, which may result in corresponding offsets to goodwill. We expect to finalize the valuations as soon as possible, but no later than one year after the respective acquisition dates.

The following table summarizes the preliminary purchase price allocations for the fair values of the identifiable assets acquired and liabilities assumed, components of consideration transferred and the transactional related expenses during the six months ended December 28, 2025 using the acquisition method of accounting:

(3)Goodwill and Other Intangible Assets

Goodwill:

The changes in the carrying amount of goodwill for the six months ended December 28, 2025:

Intangible Assets:

The following table shows amortization expense for finite-lived intangible assets for each reporting period:

(4)Property and Equipment

As of December 28, 2025 and June 29, 2025, property and equipment consists of:

The following table shows depreciation expense related to property and equipment for each reporting period:

(5)Leases

The Company leases various assets under non-cancellable operating and finance leases. These assets include location-based entertainment venues, office space, vehicles, and equipment.

Most of our leases contain payments for some or all of the following: base rent, contingent rent, common area maintenance, insurance, real-estate taxes, and other operating expenses. Rental payments are subject to escalation depending on future changes in designated indices or based on pre-determined amounts agreed upon at lease inception.

On July 10, 2025, the Company acquired 58 existing properties that were previously under a master lease agreement with Carlyle for $306,000. Spanning 16 states, the 58 property portfolio includes prime locations in California, Illinois, Georgia, Arizona, and Colorado.

The following table summarizes the components of the net lease cost for each reporting period:

(1)Operating lease costs includes both cash and non-cash expenses for operating leases. The operating lease costs associated with our locations are recognized evenly over the lease term, therefore, the timing of the expense may differ from the timing of actual cash payments. Cash payments and lease costs can differ due to (a) the timing of cash payments relative to the level expense, (b)

non-cash adjustments as a result of purchase accounting, and (c) various other non-cash adjustments to lease costs. Please see the table below for cash paid for amounts included within our lease liabilities.

(2)Percentage rental costs for our locations primarily represents leases where we pay an extra rental amount based on a percentage of revenue in excess of predetermined revenue thresholds.

(3)Equipment and other operating lease costs primarily represents operating leases costs for equipment leases, common area maintenance charges, rent relief from the impacts of COVID-19, and other variable lease costs for operating leases where the lease payments escalate based on an index or rate.

(4)Variable occupancy costs primarily represents utilities, property insurance, and real estate taxes.

(5)Other lease costs primarily includes short-term lease costs and other variable payments for various equipment leases.

(6)Sublease income primarily represents short-term leases with pro-shops and various retail tenants.

Cash paid for amounts included in the measurement of lease liabilities for each reporting period:

(1)This table includes cash paid for amounts included in the measurement of our lease liabilities. Since the lease liability only includes amounts that are contractually fixed, this table excludes cash paid for amounts that are variable in nature, such as utilities, common area maintenance, property insurance, real estate taxes, and percentage rent.

(2)For the period ended December 29, 2024, total cash amounts within the above table include deferred repayments of $2,013 for operating leases and $4,341 for finance leases. As of December 28, 2025, there wereno deferred payments remaining.

Supplemental balance sheet information related to leases was as follows:

Lease incentive receivables from landlords of $2,595 and $3,975 as of December 28, 2025 and June 29, 2025, respectively, are reflected as a reduction of the operating and finance lease liability.

Other supplemental cash flow information related to leases was as follows for each reporting period:

For the purchase of previously leased property, the Company treated the net difference between operating lease assets and liabilities as a reduction of operating cash flows on the purchase date. Similarly, the Company treated the net difference between finance lease assets and liabilities as a reduction of financing cash flows on the purchase date. The remainder of the purchase price is being allocated to investing cash outflows.

(6)Accounts Payable and Accrued Expenses

As of December 28, 2025 and June 29, 2025, accounts payable and accrued expenses consist of:

(7)Debt

The following table summarizes the Company’s debt structure as of December 28, 2025 and June 29, 2025:

Term Loan: On September 22, 2025, the Company entered into a Fifteenth Amendment (the “Fifteenth Amendment”) to the First Lien Credit Agreement. The Fifteenth Amendment provided for a refinanced $1,200,000 term loan maturing on September 22, 2032 (the “Term Loan”) . The proceeds from the Term Loan, along with proceeds from the Notes (defined below), were used to fully repay outstanding borrowings under the First Lien Credit Agreement, including:

•$1,275,861 under the existing term loan

•$230,000 under the Bridge Term Loan (defined below)

•All outstanding borrowings under the Revolver (defined below)

The refinancing was accounted for as a non-substantial debt modification, resulting in no gain or loss.

The Term Loan is repaid on a quarterly basis in principal payments of $3,000 beginning on March 31, 2026. The Term Loan bears interest at a rate per annum equal to the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus 3.25%, subject to a step down to 3.00% per annum at Total Leverage Ratio level of 2.90:1.00. Interest on the Term Loan is due on the last day of the interest period. The interest period, as agreed upon between the Company and its lenders, can be eitherone, three, orsix months in length. As of December 28, 2025, the interest period isone month.

7.25% Senior Secured Notes: On September 22, 2025, the Company issued $500,000 aggregate principal amount of 7.25% Senior Secured Notes (the “Notes”). The Notes were issued pursuant to the indenture, also dated as of September

22, 2025 (the “Indenture”). The Notes bear interest at the rate of 7.25% per annum and will mature on October 15, 2032. Interest on the Notes will be payable semi-annually in arrears on April 15 and October 15 of each year, beginning on April 15, 2026. The Indenture includes customary redemption provisions, including, among others, the right to redeem the Notes, in whole or in part, (1) prior to October 15, 2028, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium, and (2) on or after October 15, 2028, at the redemption prices set forth in the Indenture.

Revolver: Under the First Lien Credit Agreement, the Company has access to a senior secured revolving credit facility (the “Revolver”). On July 16, 2025, the Company entered into a Fourteenth Amendment (the “Fourteenth Amendment”) to the First Lien Credit Agreement. The Fourteenth Amendment provided for a $50,000 increase of the Revolver commitment to an aggregate amount of $385,000.

In connection with the Fifteenth Amendment, the Revolver commitment was increased by $40,000 to an aggregate amount of $425,000, and the amount outstanding as of the effective date of the Fifteenth Amendment of $155,000 was repaid. Any outstanding balance on the Revolver is due on September 22, 2030. Interest on borrowings under the Revolver is based on the Adjusted Term SOFR. Borrowings under the Revolver bear interest at a rate per annum equal to SOFR plus 2.5%. Unused commitments under the Revolving Credit Facility incur initial commitment fees of 0.25%.

Bridge Term Loan: On July 10, 2025, the Company entered into a Thirteenth Amendment (the “Thirteenth Amendment”) to the First Lien Credit Agreement. The Thirteenth Amendment provided for a $230,000 bridge term loan (the “Bridge Term Loan”), which provided additional financing to acquire the Carlyle master lease agreement. The maturity date for the Bridge Term Loan is the date that is 364 days after July 10, 2025. The Bridge Term Loan bears interest at a rate per annum equal to the Adjusted Term SOFR plus 2.50%, which will increase by 0.50% on each of the 90th, 180th and 270th days after July 10, 2025. In connection with the Fifteenth Amendment, the Bridge Term Loan was repaid in full andno amounts are outstanding.

First Lien Credit Agreement Covenants: Obligations owed under the First Lien Credit Agreement are secured by a first priority security interest on substantially all assets of Lucky Strike. and the guarantor subsidiaries. The First Lien Credit Agreement contains customary events of default, restrictions on indebtedness, liens, investments, asset dispositions, dividends and affirmative and negative covenants. The Company is subject to a financial covenant requiring that the First Lien Leverage Ratio (as defined in the First Lien Credit Agreement) not exceed 6.00:1.00 as of the end of any fiscal quarter if amounts outstanding on the Revolver exceed an amount equal to 40% of the aggregate Revolver commitment (subject to certain exclusions) at the end of such fiscal quarter. In addition, payment of borrowings under the Revolver may be accelerated if there is an event of default, and Lucky Strike would no longer be permitted to borrow additional funds under the Revolver while a default or event of default were outstanding.

7.25% Senior Secured Notes Covenants: The Notes are secured by substantially all of the assets of the Company and certain wholly owned subsidiaries of the Company. The Indenture contains customary restrictive covenants and events of default.

Letters of Credit: Outstanding standby letters of credit as of December 28, 2025 and June 29, 2025 totaled $24,122 and $22,422, respectively, and are guaranteed by JP Morgan Chase Bank, N.A. The available amount of the Revolver is reduced by the outstanding standby letters of credit.

Other Equipment Loan: On August 19, 2022, the Company entered into an equipment loan agreement for a principal amount of $15,350 with JP Morgan Chase Bank, N.A.. The loan matures August 19, 2029 and bears a fixed interest rate of 6.24%. The loan is repaid on a monthly basis in fixed payments of $153 plus a final payment at maturity. The loan obligation is secured by a lien on the equipment.

Covenant Compliance: The Company was in compliance with all debt covenants as of December 28, 2025.

Interest rate collars: The Company entered intotwo interest rate collars effective as of March 31, 2023 for an aggregate notional amount of our term loan of $800,000. The collar hedging strategy stabilizes interest rate fluctuations by setting both a floor and a cap. The hedge transactions have a trade and hedge designation date of April 4, 2023. The hedge transactions, each for a notional amount of $400,000, provide for interest rate collars. The interest rate collars establish a floor on SOFR of 0.9429% and 0.9355%, respectively, and a cap on SOFR of 5.50%. The interest rate collars have a maturity date of March 31, 2026.

The fair value of the collar agreements as of December 28, 2025 and June 29, 2025 was a liability of $0 and $16, respectively, and is included within the condensed consolidated balance sheets.

Since SOFR was within the collar cap and floor rates, there was no interest impact on the condensed consolidated statement of operations.

(8)Income Taxes

For interim periods, the Company generally uses the estimated annual effective tax rate (“AETR”) method to calculate its income tax provision based on the current estimate of its AETR plus the tax effect of discrete items occurring during the period. The estimated AETR is based on forecasted annual results which may fluctuate due to significant changes in the forecasted or actual results and any other transaction that results in differing tax treatment.

For the three and six months ended December 28, 2025, the Company departed from the estimated AETR method and computed its provision for income taxes using the discrete effective tax rate method (the “discrete method”), as allowed under ASC Topic 740, Income Taxes - Interim Reporting. The discrete method is applied when the application of the estimated AETR is impractical because it is not possible to reliably estimate the AETR. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is more appropriate than the AETR method as our full-year forecasted pre-tax income, relative to our forecasted permanent differences, has the potential to distort our estimated AETR.

The Company’s effective tax rate for the six months ended December 28, 2025 was (13)%, which differs from the US federal statutory rate of 21% primarily due to state taxes incurred relating to the repurchase of the 58 properties under the Carlyle master lease agreement, the change in fair value of the earnout liability, increase to the valuation allowance against the deferred tax asset for business interest expense that cannot be deducted under IRC Section 163(j), permanent differences, and other discrete tax items. The Company’s effective tax rate for the six months ended December 29, 2024 was (70)%, which differs from the US federal statutory rate of 21% due to the change in fair value of the earnout liability, permanent differences, and other discrete tax items.

On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025. The most significant impact to the Company under the bill was the permanent reinstatement of bonus depreciation on qualified property and modifications to the calculation for excess business interest expense limitation under IRC Section 163(j) to the current tax estimate. The Company will continue to monitor the potential impacts of the bill on the Company’s consolidated financial statements.

(9)Commitments and Contingencies

From time to time, we are involved in various inquiries, investigations, claims, lawsuits and other legal proceedings that are incidental to the conduct of our business. These matters typically involve claims from customers, employees or other third parties involved in operational issues common to the retail, restaurant and entertainment industries. Such matters typically represent actions with respect to contracts, intellectual property, taxation, employment, employee benefits, personal injuries and other matters. A number of such claims may exist at any given time and there are currently a number of claims and legal proceedings pending against us. While it is not feasible to predict the outcome of all claims and legal proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

(10)Earnouts

There were 11,418,099 and 11,418,291 unvested earnout shares outstanding as of December 28, 2025 and June 29, 2025, respectively.

The outstanding unvested earnout shares will vest if the closing share price of Lucky Strike’s Class A common stock equals or exceeds $17.50 per share for any 10 trading days within any consecutive 20 trading day period that occurs from December 15, 2021 through December 15, 2026.

All but 35,935 earnout shares are classified as a liability and changes in the fair value of the earnout shares are recognized in the statement of operations. Those earnout shares not classified as a liability are classified as equity compensation to employees and recognized as compensation expense on a straight-line basis over the expected term or upon the contingency being met.

See Note 11 -Fair Value of Financial Instruments for a summary of changes in the estimated fair value of the earnout shares for the periods ended December 28, 2025 and December 29, 2024.

(11)Fair Value of Financial Instruments

Debt

The fair value and carrying value of our debt as of December 28, 2025 and June 29, 2025 are as follows:

The fair value of our debt is estimated based on trading levels of lenders buying and selling their participation levels of funding (Level 2).

There were no transfers in or out of any of the levels of the valuation hierarchy during the three and six months ended December 28, 2025 and the fiscal year ended June 29, 2025.

Items Measured at Fair Value on a Recurring Basis

The Company holds certain assets and liabilities that are required to be measured at fair value on a recurring basis. The following table is a summary of fair value measurements and hierarchy level as of December 28, 2025 and June 29, 2025:

The fair value of earnout shares was estimated using a Monte Carlo simulation model (level 3 inputs). The key inputs into the Monte Carlo simulation as of December 28, 2025 were as follows:

The following table sets forth a summary of changes in the estimated fair value of the Company's Level 3 Earnout liability for the three months ended December 28, 2025 and December 29, 2024:

*Amount has been adjusted due to rounding.

Other Financial Instruments

Other financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses. The financial statement carrying amounts of these items approximate the fair value due to their short duration.

(12)Common Stock, Preferred Stock and Stockholders’ Equity

The Company is authorized to issue three classes of stock to be designated, respectively, Class A common stock, Class B common stock (together with Class A common stock, the “Common Stock”) and Series A preferred stock (the “Preferred Stock”). The total number of shares of capital stock which the Company shall have authority to issue is 2,400,000,000, divided into the following:

Class A common stock:

•Authorized:2,000,000,000 shares, with a par value of $0.0001 per share as of December 28, 2025 and June 29, 2025.

•Issued and Outstanding:78,962,689 shares (inclusive of 1,577,381 shares contingent on certain stock price thresholds but excluding 43,751,032 shares held in treasury) as of December 28, 2025 and 81,684,310 shares (inclusive of 1,581,366 shares contingent on certain stock price thresholds but excluding 40,868,233 shares held in treasury) as of June 29, 2025.

Class B common stock:

•Authorized:200,000,000 shares, with a par value of $0.0001 per share as of December 28, 2025 and June 29, 2025.

•Issued and Outstanding:58,519,437 shares as of December 28, 2025 and June 29, 2025.

Preferred Stock:

•Authorized:200,000,000 shares, with a par value of $0.0001 per share as of December 28, 2025 and June 29, 2025.

•Issued and Outstanding:117,087 shares as of December 28, 2025 and June 29, 2025.

Series A Preferred Stock

Dividends accumulate on a cumulative basis on a 360-day year commencing from the issue date. The dividend rate is fixed at 5.5% per annum on a liquidation preference of $1,000 per share. Payment dates are June 30 and December 31 of each year with a record date of June 15 for the June 30 payment date and December 15 for the December 31 payment date. Declared dividends will be paid in cash if the Company declares the dividend to be paid in cash. If the Company does not pay all or any portion of the dividends that have accumulated as of any payment date, then the dollar amount of the dividends not paid in cash will be added to the liquidation preference and deemed to be declared and paid in-kind. For the six months ended December 28, 2025, accumulated dividends in the amount of $3,502 were added to the liquidation preference and deemed to be declared and paid in-kind. For the six months ended December 28, 2025, dividends in the amount of $3,597 were accumulated on the Preferred Stock.

Stock Dividend

Common stock dividends paid during the six months ended December 28, 2025 is as follows:

(1)Amounts include dividends paid to holders of Series A preferred stock on an as-converted basis. The amounts do not reflect amounts paid for accrued dividends on previously unvested share-based awards or amounts accrued for currently unvested share-based awards.

On February 3, 2026, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.06 per share of common stock, which will be paid on March 6, 2026, to stockholders of record on February 20, 2026.

Share Repurchase Program

On February 7, 2022, the Company announced that its Board of Directors authorized a share repurchase program providing for repurchases of up to $200,000 of the Company’s outstanding Class A common stock through February 3, 2024. On each of May 15, 2023, September 6, 2023 and February 2, 2024, the Board of Directors authorized a replenishment of then-remaining balance of the share repurchase program to $200,000, which in aggregate increased the total amount that has been authorized under the share repurchase program to approximately $551,518. On February 2, 2024, the Board of Directors extended the share repurchase program indefinitely. Treasury stock purchases are stated at cost and presented as a reduction of equity on the condensed consolidated balance sheets. Repurchases of shares are made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases are based on a variety of factors, including stock price, regulatory limitations, debt agreement limitations, and other market and economic factors. The share repurchase program does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase program at any time.

For the six months ended December 28, 2025,2,882,799 shares of Class A common stock were repurchased for a total of $24,653, for an average purchase price per share of $8.55. As of December 28, 2025, the remaining balance of the repurchase program was $67,570.

(13)Share-Based Compensation

The Company hastwo stock plans: the Lucky Strike Entertainment Corporation 2021 Omnibus Incentive Plan (“2021 Plan”) and the Lucky Strike Entertainment Corporation Employee Stock Purchase Plan (“ESPP”). These stock incentive plans are designed to attract and retain key personnel by providing them the opportunity to acquire an equity interest in the Company and align the interest of key personnel with those of the Company’s stockholders.

As of December 28, 2025 and June 29, 2025, the total share-based compensation cost not yet recognized is as follows:

Share-based compensation recognized in the condensed consolidated statements of operations for the periods ended December 28, 2025 and December 29, 2024 is as follows:

The Company did not have any recognized income tax benefits, net of valuation allowances, related to our share-based compensation plans.

(14)Net (Loss) Income Per Share

The computations of basic and diluted net (loss) income per share of Class A common stock and Class B common stock are as follows:

*The impact of potentially dilutive convertible Preferred Stock, service based RSUs, market and service based RSUs, stock options, and purchases of shares under our ESPP were excluded from the diluted per share calculations because they would have been antidilutive

*The impact of potentially dilutive convertible Preferred Stock, service based RSUs, market and service based RSUs, stock options, and purchases of shares under our ESPP were excluded from the diluted per share calculations because they would have been antidilutive

The impact from incremental shares for our diluted per share calculations are as follows:

(15)Supplemental Cash Flow Information

(1) Includes cash paid for the interest portion on finance leases and financing obligations. See Note 5 -Leases for supplementary information relating to leasing transactions.