Traeger, Inc.

1 –DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Nature of Operations – Traeger, Inc. and its wholly owned Subsidiaries (collectively “Traeger” or the “Company”) design, source, sell, and support wood pellet fueled barbecue grills and Flatrock flat top grills sold to retailers, distributors, and direct to consumers. The Company produces and sells the pellets used to fire the wood pellet barbecue grills and also sells Traeger-branded rubs, spices, and sauces, as well as grill accessories (including MEATER smart thermometers, P.A.L. Pop-And-Lock accessory rails, grill covers, liners, tools, apparel, and other ancillary items). A significant portion of the Company’s sales are generated from customers throughout the United States (“U.S.”), and the Company continues to develop distribution in Canada and Europe. The Company’s headquarters are in Salt Lake City, Utah.

Basis of Presentation and Principles of Consolidation –The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates –The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates and assumptions made by management that present the greatest amount of estimation uncertainty include customer credits and returns, obsolete reserves, valuation and impairment of intangible assets including goodwill, and reserves for warranty. Actual results could differ from these estimates.

Cash and Cash Equivalents –The Company considers cash on deposit and short-term investments with remaining maturities at acquisition ofthree months or less to be cash and cash equivalents.

Concentrations –Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash in banks, trade accounts receivable, and foreign currency contracts. Credit is extended to customers based on an evaluation of the customer’s financial condition and collateral is not generally required in the Company’s sales transactions. Three customers that accounted for a significant portion of revenue are as follows for the fiscal periods indicated:

Concentrations of credit risk exist to the extent credit terms are extended with four large customers that account for a significant portion of our trade accounts receivables. As of December 31, 2025, there were four large customers A, B, C, and D that accounted for 38%,15%,4%, and 16% of the Company’s trade accounts receivable as compared to 31%,28%,4%, and 13% as of December 31, 2024. A disruption to a business that would impact its ability to meet its financial obligations on the part of any one of these four customers could result in a material amount of exposure to the Company. No other single customer accounted for greater than 10% of the Company’s trade accounts receivable as of December 31, 2025 and 2024. Additionally, no other single customer accounted for greater than 10% of the Company’s revenue for the years ended December 31, 2025, 2024, and 2023.

The Company’s international sales to dealers and distributors located in the European Union, the United Kingdom, and Canada are denominated in Euros, British Pounds, and Canadian Dollars, respectively.

The Company relies on a limited number of suppliers for its contract manufacturing of grills and accessories. A significant disruption in the operations of certain of these manufacturers, or in the transportation of parts and accessories would impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on the Company’s business, financial condition, and results of operations.

Accounts Receivable, Net –The Company reports its accounts receivable based on the amount that is expected to be collected from its sales to customers. The accounts receivable balance is comprised of the amounts invoiced to customers and reduced by an estimated credit loss and a reserve for estimated returns, discounts, and allowances. The Company estimates its credit losses over the contractual term of the receivable and establishes an allowance for credit losses based on historical experience, current available information, and expectations of future economic conditions. The Company mitigates credit loss risk from accounts receivable by assessing customers for credit worthiness, including ongoing credit evaluations and their payment trends. As the risk of loss is determined to be similar based on the credit risk factors, we aggregate receivables on a collective basis when assessing credit losses. Accounts receivable are uncollateralized customer obligations due under normal trade terms. Receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded to income when received. The Company estimates the reserve for returns, discounts, and allowances based on historical experience, contractual terms, and agreed upon arrangements.

Inventories –Inventories consist of finished goods, work-in-process, and raw materials. Inventories are stated at the lower of cost or net realizable value, with cost for raw materials and finished goods stated as an approximate cost determined on the first-in first-out basis. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Assessments to value the inventory at the lower of the cost to purchase the inventory, or the net realizable value of the inventory, are based upon assumptions about future demand, physical deterioration, changes in price levels, and market conditions. As a result of the Company’s assessments, when the net realizable value of inventory is less than the carrying value, the inventory cost is written down to the net realizable value and the write down is recorded as a charge to cost of revenue. Inventories include indirect acquisition and production costs that are incurred to bring the inventories to their present condition and location. Inventories are recorded net of reserves for obsolescence. Once established, the original cost of the inventory less the related inventory reserve represents the new cost basis of such products.

Derivative Instruments –The Company is exposed to the impact of changes in foreign currency exchange rates and benchmark interest rates. The Company uses foreign exchange option contracts for the purpose of economically hedging exposure to changes in currency fluctuations between the U.S. Dollar and the Chinese Renminbi, as well as a floating-to-fixed interest rate swap agreement to hedge a portion of the Company’s variable rate debt. The Company accounts for these contracts in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging, which requires that all derivatives be recognized at fair value in the accompanying consolidated balance sheets, and that corresponding gains and losses are recognized within other income, net in the accompanying consolidated statements of operations and comprehensive loss. The Company applies hedge accounting to the interest rate swap agreement and does not apply hedge accounting to the foreign exchange option contracts. For details associated with the Company’s dedesignated interest rate swap hedging relationship, see Note 8 –Derivatives.

Property, Plant, and Equipment –Property, plant, and equipment is stated at cost less accumulated depreciation and amortization. Additions and betterments to property, plant, and equipment that improve economic performance, extend the useful life, or improve the quality of units or services produced of the component asset are capitalized.

The Company does not depreciate amounts recorded for land. Depreciation and amortization on individual components of property is computed using the straight-line method over the estimated useful lives of the assets as follows:

When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are derecognized from the respective accounts. The remaining carrying value along with any proceeds are considered and recognized as a gain or loss within general and administrative expense or selling and marketing expense in the accompanying consolidated statements of operations and comprehensive loss. The cost of maintenance and repairs are expensed as incurred.

The Company capitalizes costs for internal-use software incurred during the application development stage. Software costs related to preliminary project activities and post implementation activities are expensed as incurred. The Company capitalizes costs incurred for software purchases and certain costs related to website development. Capitalized costs related to internal-use software, software purchases, and website development are amortized on a straight-line basis over the estimated useful life of the software, not to exceed three years. Capitalized costs less accumulated amortization are included within property, plant, and equipment, net on the accompanying consolidated balance sheets.

Leases –The Company primarily leases office space, vehicles, and equipment from third parties. The Company determines if a contract is a lease at inception. A contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The lease term begins on the commencement date, which is the date the Company takes possession of the asset, and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Certain of the Company’s leases contain renewal options for varying periods, which can be exercised both by mutual agreement and at the Company’s sole discretion. Leases are classified as operating or finance leases based on factors such as the lease term, lease payments, and the economic life, fair value, and estimated residual value of the asset. Where leases include options to purchase the leased asset at the end of the lease term, this is assessed as a part of the Company’s lease classification determination. As of December 31, 2025, the Company’s leases have remaining lease terms ranging from 1 month to 12 years.

Under ASC 842, the Company recognizes a right-of-use (“ROU”) asset and lease liability to account for its leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized on the commencement date based on the present value of lease payments over the noncancellable lease term. ROU assets are based on the lease liability and are increased by prepaid lease payments and decreased by lease incentives received. Lease incentives are amortized through the lease asset as reductions of expense over the lease term. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s ROU assets and lease liabilities.

When lease agreements provide allowances for leasehold improvements, the Company assesses whether it is the owner of the leasehold improvements for accounting purposes. When the Company concludes that it is the owner, it capitalizes the leasehold improvement assets and recognizes the related depreciation expense on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. Additionally, the Company recognizes the amounts of allowances to be received from the lessor as a reduction of the lease liability and the associated right of use asset. When the Company concludes that it is not the owner, the payments that the Company makes towards the leasehold improvements are capitalized and ultimately recognized within the ROU asset upon lease commencement. Amounts recorded within ROU asset are recognized as a component of straight-line rent expense over the term of the lease.

Leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term. Some of the leases include rent escalations based on inflation indexes. Operating lease liabilities are calculated using the prevailing index or rate at lease commencement. Subsequent escalations in the index or rate and contingent rental payments are recognized as variable lease expenses. Certain leases require the Company to pay taxes, insurance, maintenance and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the ROU assets and lease liabilities to the extent they are variable in nature. These variable lease costs are recognized as a variable lease expense when incurred.

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

As a practical expedient, lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes. The Company elected the short-term lease recognition exemption for all leases that qualify. Therefore, leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets; instead, lease payments are recognized as lease expense on a straight-line basis over the lease term. The depreciable life of the ROU assets and leasehold improvements are limited by the expected lease term unless the Company is reasonably certain of a transfer of title or purchase option.

The Company uses the rate implicit in the lease, when known, to discount future lease payments based on the information available on the commencement date for each lease. If the rate implicit in the lease is not known, the Company uses its incremental borrowing rate as the discount rate. The determination of the incremental borrowing rate requires judgment and is determined using the Company’s current secured borrowing rate, considering various factors aligned with the lease including total lease payments and lease term.

The Company subleases portions of its previous headquarters in three separate phases until the lease expires in 2026. Income from the subleased property is recognized on a straight-line basis and presented as a reduction of costs, allocated against general and administrative expenses in the Company’s accompanying consolidated statements of operations and comprehensive loss. Sublease income for the years ended December 31, 2025, 2024, and 2023 was immaterial.

Deferred Financing Costs –Costs incurred in connection with long-term debt financing are deferred and reflected net of notes payable and are amortized to interest expense utilizing the effective-interest method over the term of the related financing. Costs incurred in connection with the refinancing to the revolving credit facility, and amendments to the Receivables Financing Agreement are capitalized and recorded as other long-term assets on the accompanying consolidated balance sheets. These costs are being amortized to interest expense on a straight-line basis over the term of each respective credit facility.

Intangible Assets –Finite-lived intangible assets are initially recorded at fair value and presented net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company is currently amortizing acquired intangible assets, including customer relationships, distributor relationships, business trademarks, and technology over periods ranging between 5.0 years and 25 years. Amortization related to acquired patent technology and to capitalized patent costs are recorded as a component of cost of revenue, and amortization related to acquired business trademarks, customer relationships, and distributor relationships are recorded in amortization of intangible assets in the accompanying consolidated statements of operations and comprehensive loss.

Goodwill –Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Substantially all of the Company’s goodwill was recognized in the purchase price allocations when the Company was acquired in 2017 and when Apption Labs Limited (together with its subsidiaries, “Apption Labs”) was acquired in July 2021, with smaller incremental amounts recognized in subsequent business combinations. Goodwill is not amortized, but is tested for impairment at the reporting unit level annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In conducting the impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company currently operates as a single reporting unit under the guidance in Topic 350, Intangibles - Goodwill and Other.

When testing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company elects to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, the Company performs a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if the Company’s reporting unit’s carrying amount exceeds its fair value, it will record an impairment charge based on that difference.

The Company conducts annual goodwill impairment tests in the fourth quarter of each fiscal year or whenever an indicator of impairment exists. For the annual impairment tests conducted in the fourth quarter of 2024, the Company performed a qualitative assessment of goodwill and determined that it was more likely than not that the fair value of goodwill was greater than its carrying value. Therefore the quantitative impairment test was not performed andno impairment of goodwill was recorded in connection with the annual impairment test.

However, as part of the June 30, 2025 and September 30, 2025 interim goodwill impairment test, the Company identified a potential indicator of impairment due to the sustained decrease of the Company’s stock price which led to the conclusion that a triggering event had occurred and therefore the Company performed a quantitative test for the single reporting unit in each respective period.

To estimate the reporting unit fair value as part of the quantitative impairment test, the Company applied a weighted valuation analysis using both an income approach and a market-based approach. The income approach utilizes a discounted cash flow analysis, and the market-based approach utilizes comparable public company information, key valuation multiples, and considers a market control premium associated with cost synergies and other cash flow benefits that arise from obtaining control over a reporting unit, and guideline transactions, when applicable. The significant assumptions used in these approaches include revenue growth rates, profit margins, and discount rates under the income approach as well as valuation multiples derived from comparable public companies under the market approach.

Based on the June 30, 2025 interim impairment test of goodwill, the Company determined there was no goodwill impairment. Based on the September 30, 2025 interim impairment test of goodwill, the Company determined the carrying value of the reporting unit was in excess of its fair value after consideration of a control premium and recorded a non-cash impairment charge of $74.7 million, which fully impaired the Company’s goodwill balance. For details associated with the Company’s interim goodwill impairment, see Note 11 –Goodwill and Intangibles.

Impairment of Assets –Long-lived assets, including property, plant, and equipment, operating right-of-use assets, and finite-lived intangible assets subject to amortization, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset or asset group. If impairment exists, the impairment loss is measured and recorded based on discounted estimated future cash flows. In estimating future cash flows, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of cash flows from other asset groups. The Company concluded there were no indicators of impairment identified at December 31, 2024. As part of the June 30, 2025 and September 30, 2025 interim goodwill impairment testing, the Company conducted additional analysis related to its long-lived assets. As a result of these analysis as well as additional qualitative analysis as of December 31, 2025, the Company concluded there were no events or changes in circumstances which indicated that the carrying value of the long-lived assets may not be recoverable andno impairment was recorded.

Fair Value of Financial Instruments –For financial assets and liabilities recorded at fair value on a recurring or a non-recurring basis. Fair value is the price the Company would receive to sell an asset, or pay to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. These two types of inputs create the following fair value hierarchy:

•Level 1: Quoted prices for identical instruments in active markets.

•Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•Level 3: Significant inputs to the valuation model are unobservable.

The carrying amounts reported in the Company’s accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable, prepaid expenses, and other current assets, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these instruments. The carrying amounts reported in the Company’s accompanying consolidated balance sheets for the variable rate Revolving Credit Facility and Receivables Financing Agreement (defined below) also approximate their fair value. The fair value of the fixed rate First Lien Term Loan Facility (defined below) is considered a Level 2 instrument in the fair value hierarchy due to the unobservable nature of the inputs. For details associated with the Company’s fair value measurement of financial instruments, see Note 9 –Fair Value Measurements.

Contingent Consideration –The purchase consideration associated with the acquisition of Apption Labs included contingent cash consideration payable to the sellers based on achievement of certain revenue, earnings, and successful product launch thresholds for fiscal years 2021, 2022 and 2023. The fair value of contingent consideration obligation was estimated based on the probability assessments with respect to the likelihood of achieving the performance targets and discount rates consistent with the level of risk of achievement. The Company included the fair value of this contingent obligation in current and non-current contingent consideration in the accompanying consolidated balance sheets.

At each reporting period, the Company revalued the contingent consideration obligation to its fair value and recorded increases and decreases in fair value within the change in fair value of contingent consideration in the accompanying consolidated statements of operations and comprehensive loss. Changes in the fair value of the contingent consideration obligation resulted from changes in discount periods and rates and changes in probability assumptions with respect to the likelihood of achieving the performance targets. In April 2024, the Company paid the remaining $15.0 million of contingent consideration based on the achievement of certain earnings and product launch thresholds for fiscal year 2023.

Revenue Recognition and Sales Reserves and Allowances –The Company recognizes revenue at the amount to which it expects to be entitled when a contract exists with a customer that specifies the goods and services to be provided at an agreed upon sales price and when the performance obligation is satisfied. The performance obligation for most of the Company’s sales transactions is considered complete when control transfers, which is determined when products are shipped or delivered to the customer depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery of point-of-sale transactions.

Shipping charges billed to customers are included in net sales and related shipping costs are included in cost of sales. The company has elected to account for shipping and handling activities performed after control has been transferred to the customer as a fulfillment cost.

The Company enters into contractual arrangements with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company does not have long-term contracts that are satisfied over time. Due to the nature of the contracts, no significant judgment exists in relation to the identification of the customer contract or satisfaction of the performance obligation. The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts.

The Company has certain contractual programs and practices with customers that can give rise to elements of variable consideration such as customer cooperative advertising and volume incentive rebates. The Company estimates the variable consideration using the most likely amount method based on sales and contractual rates with each customer and records the estimated amount of credits for these programs as a reduction to net sales.

The Company has entered into contracts with some customers that allow for credits to be claimed for certain matters of operational compliance, promotional discounts or for returns to the retail customer from end consumers. Credits that will be issued associated with these items are estimated using the expected value method and are based on actual historical experience and are recorded as a reduction of revenue at the time of recognition or when circumstances change resulting in a change in estimated returns. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company also offers assurance-type warranties relating to its products sold to end customers that are accounted for under ASC Topic 460, Guarantees. See Warranty Costs below.

Cost of Revenue – Cost of revenue consists of product costs, including costs of products from third-party contract manufacturers of grills, consumables, and accessories, costs of components, direct and indirect manufacturing costs of wood pellet production, packaging, inbound freight and duties, warehousing and fulfillment, warranty costs, product quality testing and inspection costs, excess and obsolete inventory write-downs, cloud-hosting costs for connected devices, depreciation of tooling and manufacturing equipment, amortization of internal use software and patented technology, and certain employee-related expenses.

Warranty Costs – The Company generally provides its customers with athree-year limited warranty on residential model pellet grills and aone-year warranty on accessories for defects in material and workmanship under normal use and maintenance. Warranty liabilities are recorded on the basis of grills and accessories sold and reflect management’s estimate of warranty-related costs expected to be incurred during the respective unexpired warranty periods. Management’s estimates of warranty costs are based on historical as well as current product replacement and related delivery costs incurred and warranty policies. Warranty claims expense is included in cost of revenue on the accompanying consolidated statements of operations and comprehensive loss.

On December 14, 2023, the Company announced a voluntary recall of its Flatrock flat top grill. Consequently, the impact on operating results was $0.3 million and $2.6 million for years ended December 31, 2024 and 2023, respectively. These costs were primarily due to product returns, recall charges, inventory-write offs, and expenses related to logistics, rework, and legal fees. There wereno such amounts recorded for the fiscal year ended 2025.

Sales and Marketing –Sales and marketing expenses consist primarily of the advertising and marketing of the Company’s products and personnel-related expenses, including salaries, benefits, and stock-based compensation expense, as well as sales incentives and professional services. These costs are included in sales and marketing expenses within total operating expenses in the accompanying consolidated statements of operations and comprehensive loss.

Advertising Costs –The Company incurs non-direct response advertising costs which are expensed as incurred. Advertising expense was $15.7 million, $20.1 million, and $39.8 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is included within sales and marketing expense in the accompanying consolidated statements of operations and comprehensive loss.

General and Administrative –General and administrative expense consist primarily of personnel-related expenses, including salaries, benefits, and stock-based compensation and facilities for executive, finance, accounting, legal, human resources, and information technology functions. General and administrative expense also includes fees for professional services principally comprised of legal, audit, tax and accounting services, and insurance. These costs are included in general and administrative expenses within total operating expenses in the accompanying consolidated statements of operations and comprehensive loss.

Research and Development –Research and development expenses consist primarily of personnel-related expenses, including salaries, benefits, and stock-based compensation expense, as well as professional services, prototype materials, and software platform costs. Research and development expense was $12.4 million, $15.2 million, and $11.5 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is included within general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss.

Income Taxes –The Company accounts for income taxes using the asset and liability method. The asset and liability method requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company’s assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established on deferred tax assets if it is determined by management that it is more-likely-than-not that such deferred tax assets will not be realized.

Income and loss for tax purposes may differ from the financial statement amounts and may be allocated to the members on a different basis for tax purposes than for financial statement purposes.

The preparation of consolidated financial statements in conformity with ASC 740, Income Taxes, requires the Company to report information regarding its exposure to various tax positions taken by the Company. The Company has determined whether any tax positions have met the recognition threshold and has measured the Company’s exposure to those tax positions. Management believes that the Company has adequately addressed all relevant tax positions and that there are no uncertain tax positions that would require adjustment to the consolidated financial statements to comply with the provisions of the guidance. The Company has elected to record any interest and penalties related to uncertain tax positions within interest expense on the accompanying consolidated statements of operations and comprehensive loss. No interest and penalties related to uncertain tax positions were recorded for either the year-ended December 31, 2025, 2024, or 2023, respectively.

The Company has recorded research and development tax credits that are available for developing new or improved or innovative products, processes, software, or inventions.

CARES Act –On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide certain relief as a result of the coronavirus pandemic (“COVID-19”). The CARES Act provides tax relief, along with other stimulus measures, including a provision for an Employee Retention Tax Credit (“ERTC”). As there is no authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities, the Company accounts for the ERTC by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance.

In 2023, the Company submitted claims to the Internal Revenue Service (“IRS”) for the ERTC. In accordance with IAS 20, the Company will recognize the claimed amounts once it has obtained reasonable assurance of receipt, defined as the point at which the claims have been accepted by the IRS and the corresponding cash payments have been received. For the year ended December 31, 2025, the Company received $6.0 million from the IRS in connection with these tax credits, of which $1.3 million represented interest. These amounts were recorded within other income, net in the accompanying consolidated statements of operations and comprehensive loss. There wereno such amounts recorded for the fiscal years ended 2024 and 2023.

In January 2026, the Company received the final benefit associated with the remaining ERTC claims submitted to the IRS, totaling $11.6 million, of which $2.8 million represented interest. The full amount will be recorded within other income, net in the consolidated statements of operations and comprehensive loss for fiscal year 2026.

Stock-Based Compensation –The Company awards stock-based compensation to employees and directors under the Traeger, Inc. 2021 Incentive Award Plan (the “2021 Plan”), which is described in Note 15 –Stock-Based Compensation.

The Company recognizes compensation expense for time-based restricted stock units (“RSUs”) and time-based restricted shares (“RSAs”) on a straight-line basis over the requisite service period. For the performance-based restricted stock units (“PSUs”) and performance-based restricted shares (“Performance Shares”), the compensation expense is recognized on an accelerated basis over the requisite service period. The compensation expense related to the PSUs and Performance Shares with a performance condition could increase or decrease depending on the estimated probability of achieving the applicable adjusted EBITDA goals over the requisite service period. For PSUs and Performance Shares with a market condition, the Company uses a Monte Carlo pricing model to estimate the fair value of the awards as of the grant date, using various simulations of future stock prices through a stochastic model to estimate the fair value over the remaining term of the performance period. In addition, when an award is forfeited prior to the vesting date, the Company will recognize an adjustment for the previously recognized expense in the period of the forfeiture, with the exception of awards with market conditions for which the requisite service period has been satisfied.

Comprehensive Loss –The Company’s comprehensive loss is determined based on net loss adjusted for gains and losses on foreign currency translation adjustments and the interest rate swap, as well as amortized gains and losses associated with the dedesignated interest rate swap.

Foreign Currency –The Company has foreign subsidiaries for which the net sales generated, as well as most of the related expenses directly incurred from those operations, are denominated in local currencies. The functional currency of these foreign subsidiaries that either operate or support these operations are generally the same as the Company’s functional currency. Results of operations for the Company’s consolidated foreign subsidiaries are remeasured from the local currency to the U.S. dollar using average exchange rates during the period, while monetary assets and liabilities are remeasured at the exchange rate in effect at the reporting date. Non-monetary assets and liabilities and equity accounts of consolidated foreign subsidiaries are carried at historical values. Resulting gains or losses from remeasuring foreign currency financial statements are recorded within other income, net in the accompanying consolidated statements of operations and comprehensive loss.

Foreign currency transaction gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the U.S. Dollar are included within other income, net in the accompanying consolidated statements of operations and comprehensive loss. The Company recorded a net foreign exchange gain of $1.1 million and losses of $1.0 million, and $0.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Retirement Plan –The Company maintains a defined contribution retirement plan (“401(k) plan”) for all full-time employees in the United States. This 401(k) plan allows employees to contribute a portion of their eligible compensation up to the certain maximum dollar limits set by the Internal Revenue Service. The Company made matching contributions to the 401(k) plan of $1.9 million, $2.1 million, and $2.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. The expenses are recorded consistent with the payroll expense associated to each individual employee to whom the matching contributions pertains.

Recently Issued Accounting Standards

As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”), allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.

New Accounting Pronouncements Recently Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. The Company elected to early adopt ASU 2023-09 effective January 1, 2025, and applied the new disclosure requirements prospectively in this Annual Report for the fiscal year ended December 31, 2025. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. For further information, refer to Note 16 –Income Taxes.

New Accounting Pronouncements Issued but Not Yet Adopted

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, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) which modifies the accounting guidance for costs incurred in connection with internal-use software. The amendments in this update are intended to improve the operability of the guidance by removing references to software development project stages, thereby making the guidance neutral to different software development methodologies. Under the revised standard, entities will apply a single model for capitalizing and expensing costs related to internal-use software, regardless of the development approach. ASU 2025-06 is effective for annual periods 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 2025-06.

3 –REVENUE

The following table disaggregates revenue by product category, geography, and sales channel for the fiscal periods indicated (in thousands):

4 –LEASES

The Company has various lease agreements related to office space, warehouses, vehicles, and office equipment. The leases expire at various dates through 2037, which are primarily accounted for as operating leases.

The following table presents the components of lease costs (in thousands):

The following table presents lease terms and discount rates:

At December 31, 2025, future lease payments (receipts) under operating leases were as follows (in thousands):

The following table presents supplemental cash flow information (in thousands):

5 –ACCOUNTS RECEIVABLES, NET

Accounts receivables, net consists of the following (in thousands):

6 –INVENTORIES

Inventories consisted of the following (in thousands):

Included within inventories are adjustments of $3.6 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively, to record inventory to net realizable value.

7 –ACCRUED EXPENSES

Accrued expenses consisted of the following (in thousands):

The changes in the Company’s warranty accrual, included within accrued expenses in the accompanying consolidated balance sheets, were as follows for the fiscal periods indicated (in thousands):

8 –DERIVATIVES

Interest Rate Swap

On February 25, 2022, the Company entered into a floating-to-fixed interest rate swap agreement to hedge or otherwise protect against fluctuations on a portion of the Company’s variable rate debt. The agreement provides for a notional amount of $379.2 million, fixed rate of 2.08% and a maturity date of February 28, 2026. This agreement was designated as a cash flow hedge on the exposure of the variability of future cash flows subject to the variable monthly interest rates on $379.2 million of the term loan portion under the First Lien Term Loan Facility (as defined below). The Company assessed hedge effectiveness at the time of entering into the agreement, utilizing a regression analysis, and determined the hedge is expected to be highly effective.

In January 2023, the Company changed the interest reset period from one month to three months on the term loan portion under the First Lien Term Loan Facility (as defined below). As a result, the Company dedesignated its hedging relationship. At the time of dedesignation, the total amount recorded within accumulated other comprehensive income (“AOCI”) was $21.3 million and will be amortized into earnings as a reduction of interest expense over the term of the previously hedged interest payments. As of December 31, 2025 the Company had $0.6 million remaining within AOCI to be amortized into earnings as a reduction of interest expense.

For periods where the net position is in an asset balance, the balance is recorded within prepaid expenses and other current assets in the accompanying consolidated balance sheets. The gross and net balances from the interest rate swap contract position were as follows (in thousands):

Foreign Currency Contracts

The Company is exposed to foreign currency exchange rate risk related to its purchases and international operations. The Company utilizes foreign currency contracts to manage foreign currency risk in purchasing inventory and capital equipment, and future settlement of foreign-denominated assets and liabilities. The volume of the Company’s foreign currency contract activity is limited by the amount of transaction exposure in each foreign currency and the Company’s election as to whether to hedge the transactions. There are no derivative instruments entered into for speculative purposes.

The Company had outstanding foreign currency contracts as of December 31, 2025 and 2024. The Company did not elect hedge accounting for any of these contracts. All outstanding contracts are with the same counterparty and thus the fair market value of the contracts in an asset position are offset by the fair market value of the contracts in a liability position to reach a net position. For periods where the net position is an asset balance, the balance is recorded within prepaid expenses and other current assets in the accompanying consolidated balance sheets, and for periods where the net position is a liability balance, the balance is recorded within other non-current liabilities in the accompanying consolidated balance sheets. Changes in the net fair value of contracts are recorded within other income, net in the accompanying consolidated statements of operations and comprehensive loss.

The gross and net balances from foreign currency contract positions were as follows (in thousands):

Gains (losses) from foreign currency contracts were recorded within other income, net in the accompanying consolidated statements of operations and comprehensive loss as follows for the fiscal periods indicated (in thousands):

9 –FAIR VALUE MEASUREMENTS

The following table presents information about the fair value measurement of the Company’s financial instruments (in thousands):

(1)Included within prepaid expenses and other current assets in the accompanying consolidated balance sheets.

(2)Included within prepaid expenses and other current assets in the accompanying consolidated balance sheets.

(3)Included within other current liabilities in the accompanying consolidated balance sheets.

Transfers of assets and liabilities among Level 1, Level 2, and Level 3 are recorded as of the actual date of the events or change in circumstances that caused the transfer. For the years ended December 31, 2025 and 2024, there were no transfers between levels of the fair value hierarchy of the Company’s assets or liabilities measured at fair value.

The fair value of the Company’s derivative assets and liabilities through its foreign currency contracts is based upon observable market-based inputs that reflect the present values of the differences between estimated future foreign currency rates versus fixed future settlement prices per the contracts and therefore are classified within Level 2. The fair value of the Company’s interest rate swap contract held with a financial institution is classified as a Level 2 financial instrument, which is valued using observable underlying interest rates and market-determined risk premiums at the reporting date.

Certain assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments under certain circumstances. These assets include goodwill, which is evaluated using Level 3 inputs when written down to fair value and thus impaired. Once impaired, such assets are not subsequently adjusted to fair value unless further impairment occurs. During an interim goodwill impairment test, the Company determined that the carrying value of goodwill was in excess of its fair value after consideration of a control premium and recorded a non-cash impairment charge of $74.7 million. For further details, see Note 2 –Summary of Significant Accounting Policies.

The following financial instruments are recorded at their carrying amount (in thousands):

(1)Included within the current portion of notes payable and notes payable, net of current portion in the accompanying consolidated balance sheets. Due to the unobservable nature of the inputs these financial instruments are considered to be Level 2 instruments in the fair value hierarchy.

Due to the short-term nature of the borrowings under the Receivables Financing Agreement (as defined below), the carrying amounts approximate their fair values.

10 –PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consisted of the following (in thousands):

Depreciation expense related to property, plant, and equipment recorded within cost of revenue was $6.4 million, $7.2 million, and $7.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. Depreciation expense related to property, plant, and equipment recorded within general and administrative expense was $5.8 million, $6.6 million, and $7.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

11 –GOODWILL AND INTANGIBLES

Goodwill is primarily attributable to the allocations of the purchase price from the acquisition of Traeger Pellet Grills Holdings LLC on September 25, 2017 (the “Transaction”) and the acquisition of Apption Labs on July 1, 2021.

The changes in the carrying amount of goodwill were as follows (in thousands):

The Company’s intangible assets consisted of the following at the dates indicated below (dollars in thousands):

The preponderance of the customer relationships and trademark were pushed down from the purchase accounting in the Transaction (as defined above) in 2017.

Estimated annual amortization expense for the next five years and thereafter for the years ending December 31, (in thousands):

Amortization expense related to intangible assets recorded within cost of revenue was $6.7 million for the year ended December 31, 2025 and $7.2 million for the years ended December 31, 2024 and 2023. Amortization expense related to intangible assets recorded within amortization of intangible assets was $35.3 million, $35.3 million, and $35.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

12 –NOTES PAYABLE

Notes payable refers to the corporate level debt facilities. The Company’s corporate debt is incurred and guaranteed by certain of its operating subsidiaries, but it is not guaranteed by the Company or any parent entities above the borrower and guarantors in the ownership structure.

The Company’s corporate level consolidated outstanding debt is as follows (dollars in thousands):

On June 29, 2021, the Company refinanced its existing credit facilities and entered into a First Lien Credit Agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (the “First Lien Credit Agreement”). The First Lien Credit Agreement originally provided for (i) a $560.0 million senior secured term loan facility (the “First Lien Term Loan Facility”), which includes a $50.0 million delayed draw term loan and (ii) a $125.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the First Lien Term Loan Facility, the “Credit Facilities”). The Company entered into an agency transfer agreement on April 30, 2024, pursuant to which Morgan Stanley Senior Funding, Inc. succeeded Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent for the Credit Facilities. The Company’s obligations under the First Lien Credit Agreement were substantively unchanged.

On August 5, 2025, the Company entered into an amendment to the First Lien Credit Agreement (the “Amendment”) to, among other things, extend the maturity date of a portion of the Revolving Credit Facility, reduce the size of the Revolving Credit Facility by 10% and modify other provisions of the Revolving Credit Facility, as described below.

The First Lien Term Loan Facility accrues interest at a rate per annum that considers both fixed and floating components. The fixed component ranges from 3.00% to 3.25% per annum based on the Company’s Public Debt Rating (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR (as defined in the First Lien Credit Agreement) for the relevant interest period. The First Lien Term Loan Facility requires quarterly principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028.

Loans under the Revolving Credit Facility accrue interest at a rate per annum that considers both fixed and floating components. The fixed component ranges from 2.75% to 3.25% per annum based on the Company’s most recently determined First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR for the relevant interest period. The Revolving Credit Facility also has a variable commitment fee, which is based on the Company’s most recently determined First Lien Net Leverage Ratio and ranges from 0.25% to 0.50% per annum on undrawn amounts. Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility.

The Amendment made several material modifications to the Revolving Credit Facility. The overall size of the Revolving Credit Facility has been reduced by 10% to $112.5 million, and has been split into two tranches: a $30.0 million tranche expiring on June 29, 2026 and a $82.5 million tranche expiring on December 29, 2027 (the “Extended Revolving Facility”). No payment of outstanding principal amounts under either tranche is due prior to the respective expiration date of each tranche.

Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, Traeger Pellet Grills Holdings LLC, and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages, and the equity interest of each of these respective entities. Upon event of default, the assets of Traeger SPE LLC, substantially consisting of the Company’s accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities. There are no guarantees from any entities above TGPX Holdings II LLC, including Traeger, Inc.

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit the Company’s ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments, and engage in certain affiliate transactions. Pursuant to the Amendment, the Company has agreed to certain additional negative covenant restrictions for the benefit of the lenders under the Extended Revolving Facility. All lenders under the Revolving Credit Facility are the beneficiaries of a First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) test of 6.20 to 1.00, which is only applicable if the Company’s utilization of the Revolving Credit Facility in excess of a threshold set forth in the First Lien Credit Agreement. The lenders under the Extended Revolving Facility are the beneficiaries of a 6.20 to 1.00 First Lien Net Leverage Ratio covenant with a lower trigger threshold for testing, as set forth in the Amendment, and a minimum liquidity covenant requiring the maintenance of liquidity of at least $15.0 million, which is tested monthly. As of December 31, 2025, the Company was in compliance with the covenants under the Credit Facilities.

Future maturities of the notes payable are as follows as of December 31, (in thousands):

13 –RECEIVABLES FINANCING AGREEMENT

On November 2, 2020, the Company entered into a receivables financing agreement (the “Receivables Financing Agreement”). Through the Receivables Financing Agreement, the Company participates in a trade receivables securitization program administered on its behalf by MUFG Bank Ltd. (“MUFG”). Through this arrangement, the Company has secured short-term capital requirements financing using outstanding accounts receivable balances as collateral, which have been contributed by the Company to a wholly owned subsidiary, Traeger SPE LLC. As a special purpose entity (the “SPE”), Traeger SPE LLC has been structured so that its assets (substantively the accounts receivable contributed by the Company to the SPE) are outside the reach of other creditors, including the lenders under the Company's New First Lien Credit Agreement. While the Company provides services to the SPE through continuing involvement in the aspects of collection and cash application of the receivables, the receivables are owned by the SPE once contributed to it by the Company. The Company is the primary beneficiary and holds all equity interests of the SPE, thus the Company consolidates the SPE without any significant judgments.

The maximum borrowing capacity under the Receivables Financing Agreement is between $30.0 million and $75.0 million. The Receivables Financing Agreement allows for seasonal adjustments to the maximum borrowing capacity and further adjustments can be made up to two times annually at the discretion of the Company (with consent of the lenders under the Receivables Financing Agreement). The Company is required to pay fixed interest on outstanding cash advances of 2.5%, a floating interest based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%. The Receivables Financing Agreement also includes a liquidity threshold of $42.5 million and if the Company’s liquidity falls below this threshold, it may result in an increase in the required level of reserves, which would result in a reduction of the borrowing base under the Receivables Financing Agreement during such a liquidity shortfall.

On August 6, 2024, the Company entered into Amendment No. 10 to the Receivables Financing Agreement in order to extend the expiration of the facility to August 6, 2027. As part of the amendment, the Company is required to pay an upfront fee for the facility, along with a fixed interest rate on outstanding cash advances of approximately 2.6% and a floating interest rate based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement). The Company was in compliance with the covenants under the Receivables Financing Agreement as of December 31, 2025.

As of December 31, 2025, the Company hadno outstanding borrowings under this facility. As of December 31, 2024, the Companyhad $5.0 million of borrowings outstanding, which were used for general corporate and working capital purposes.

14 –COMMITMENTS AND CONTINGENCIES

Unconditional purchase commitments

The Company has unconditional purchase commitments for cloud-hosting costs, distribution contracts, software licenses, and other professional fees. Future minimum payments under these unconditional purchase commitments are as follows as of December 31, (in thousands):

Legal Matters

In the normal course of business, the Company is involved in legal proceedings and other potential loss contingencies, some of which are covered by insurance. In accordance with ASC Topic 450, Contingencies (“Topic 450”), the Company establishes accruals for contingencies when it is probable that a loss will be incurred and the amount, or range of amounts, can be reasonably estimated. If the reasonable estimate is a range, the Company will accrue the best estimate in that range. When no amount within the range is a better estimate than any other amount, the Company will accrue the minimum amount in the range. Legal proceedings and other contingencies for which no accrual has been established are disclosed to the extent required by Topic 450.

In August 2024, the Company received an offer of compromise to reach an out-of-court settlement for a product liability matter. A formal settlement agreement was finalized in February 2025 and the matter was paid in March 2025 through the Company's insurance policies in the amount of $15.0 million.

15 –STOCK-BASED COMPENSATION

The Traeger, Inc. 2021 Incentive Award Plan (the "2021 Plan") became effective as of July 28, 2021, the day prior to the first public trading date of the Company's common stock. The 2021 Plan provides for the grant of stock options, including incentive stock options, and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash awards to the Company’s employees and consultants and directors of the Company and its subsidiaries. Subject to the adjustment described in the following sentence, the initial number of shares of common stock avai lable for issuance under awards granted pursuant to the 2021 Plan was equal to 14,105,750 shares, which shares may be authorized but unissued shares, treasury shares, or shares purchased in the open market. On January 1, 2026 and January 1, 2025, an additional 6,853,413 shares and 6,532,441 shares of common stock became available for issuance under awards granted pursuant to the 2021 Plan, respectively, as a result of the operation of an automatic annual increase provision in the 2021 Plan.

The Company grants time-based restricted stock units (“RSUs”) and time-based restricted shares (“RSAs”) to employees which generally vest over athree-year vesting period, with one-third of the RSUs or RSAs vesting on the first, second and third anniversaries of the grant date subject to continued employment or service with the Company and its affiliates. In 2024, the Company granted performance-based restricted stock units (“PSUs”) and performance-based restricted shares (“Performance Shares”) which cliff vested based on the achievement of certain annual adjusted EBITDA goals over an annual performance period subject to continued employment. In 2025, the Company granted PSUs and Performance Shares which will cliff vest based on the achievement of certain relative total shareholder return (“Relative TSR”) goals at the end of athree-year performance period subject to continued employment or, solely with respect to the Performance Shares, service.

For RSUs and RSAs, the compensation expense is recognized on a straight-line basis over the requisite service period. For the PSUs and Performance Shares, the compensation expense is recognized on an accelerated basis over the requisite service period. The compensation expense related to the PSUs and Performance Shares with a performance condition could increase or decrease depending on the estimated probability of achieving the applicable adjusted EBITDA goals over the requisite service period. For PSUs and Performance Shares with a market condition, the Company uses a Monte Carlo pricing model to estimate the fair value of the awards as of the grant date, using various simulations of future stock prices through a stochastic model to estimate the fair value over the remaining term of the performance period. In addition, when an award is forfeited prior to the vesting date, the Company will recognize an adjustment for the previously recognized expense in the period of the forfeiture, with the exception of awards with market conditions for which the requisite service period has been satisfied.

A summary of the RSU and RSA activity during the year ended December 31, 2025 was as follows:

(1)On March 6, 2025, as part of the Separation Agreement between the Company and Dominic Blosil, the Company’s former Chief Financial Officer, the Board of Directors of the Company approved the modification of Mr. Blosil’s then-outstanding and unvested RSUs, such that the RSUs continued to vest pursuant to their terms, with any then-remaining unvested RSUs vesting in full on December 31, 2025, subject to Mr. Blosil continuing to provide advisory services to the Company through such date. The modification has a negligible impact on the accompanying condensed consolidated statements of operations and comprehensive loss for all periods presented.

As of December 31, 2025, the Company had$8.6 million of unrecognized stock-based compensation expense related to unvested RSUs and RSAs that is expected to be recognized over a weighted-average period of 1.85 years.

A summary of the PSU and Performance Share activity during the year ended December 31, 2025 was as follows:

(1)In March 2025 the Board of Directors of the Company, acting upon the unanimous recommendation of its compensation committee, approved a modification to the then outstanding Performance Shares and PSUs to provide for certain adjustments to the applicable adjusted EBITDA goals. As a result of the modification, the Company recorded $1.1 million of incremental expense during the year ended December 31, 2025.

(2)Represents the target number of Performance Shares and PSUs granted in 2025, and the corresponding grant-date fair value of those awards.

As of December 31, 2025, the Company had$2.7 million of unrecognized stock-based compensation expense related to unvested PSUs and Performance Shares that are expected to be recognized over a weighted-average period of 2.31 years.

Summary of Stock-Based Compensation

The Company's stock-based compensation was classified as follows in the accompanying consolidated statements of operations and comprehensive loss for the fiscal periods indicated (in thousands):

During the years ended December 31, 2025,2024, and 2023 the Company paid $1.8 million, $2.2 million, and $0, respectively, for the net settlement of income tax obligations related to employee equity awards that vested during the period.

16 –INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The components of loss before income taxes were as follows for the fiscal periods indicated (in thousands):

Provision (benefit) for income taxes consisted of the following components for the fiscal periods indicated (in thousands):

A reconciliation of the differences between the effective and statutory income tax rates after the adoption of ASU 2023-09 are as follows for the fiscal period indicated (dollars in thousands):

(1)The state and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California, Georgia, Illinois, New Jersey, and Texas.

A reconciliation of the differences between the effective and statutory income tax rates prior to the adoption of ASU 2023-09 are as follows for the fiscal periods indicated:

The differences between the U.S. statutory rate and the Company’s effective tax rate for the years ended December 31, 2025, 2024, and 2023 are primarily due to the changes in valuation allowance, nondeductible goodwill impairment, state taxes, and stock-based compensation.

Cash paid for income taxes, net of refunds received, by jurisdiction after the adoption of ASU 2023-09 are as follows for the fiscal period indicated (in thousands):

Cash paid for income taxes, net of refunds received, during the years ended December 31, 2024 and 2023 was $2.0 million and $3.1 million, respectively.

The amounts that comprised deferred income tax assets, net are as follows for the fiscal periods indicated (in thousands):

As of December 31, 2025, the Company has net operating loss carryforwards of approximately $162.3 million for federal income tax purposes, which will be available to offset future taxable income. Due to recent tax legislation, approximately $159.0 million of these net operating losses are eligible for indefinite carryforward, limited by certain taxable income limitations. The federal net operating losses will begin to expire in 2037 if not utilized. The Company is not aware of any restrictions or limitations on use of the net operating losses under Internal Revenue Code Section 382. The Company has net operating loss carryforwards of approximately $133.8 million for state income tax purposes, which will be available to offset future taxable income. The state net operating losses will begin to expire in 2026 if not utilized. Due to cumulative losses, the Company has recorded a valuation allowance against its net deferred tax assets as of December 31, 2025, 2024, and 2023, respectively.

The Company also has federal research and development tax credit carryforwards of $4.4 million and state research and development tax credit carryforwards of $1.1 million, which begin to expire in 2038 and 2032, respectively, if not utilized.

The Company annually conducts an analysis of its tax positions and does not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. A tax benefit is recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. For such positions, the largest benefit that has a greater than 50% likelihood of being realized upon settlement is recognized in the financial statements.

The following summarizes activity related to unrecognized tax benefits for the fiscal periods indicated (in thousands):

The Company does not expect any significant change in its unrecognized tax benefits within the next 12 months. At December 31, 2025, the Company had $2.1 million of total unrecognized tax benefits recorded against research and development tax credit carryforwards, none of which would impact the effective tax rate if recognized.

The Company has elected to recognize interest and penalties related to uncertain tax positions as a component of interest expense from continuing operations in the accompanying consolidated statements of operations and comprehensive loss. No interest or penalties have been recorded through the year ended December 31, 2025.

The Company files tax returns in the United States and in various foreign and state jurisdictions. The Company is not currently under examination by any taxing jurisdiction as of December 31, 2025. With exception for years generating net operating loss carryforwards, the Company is no longer subject to U.S. federal, state, or local income tax examinations by tax authorities for years before 2021.

17 –RELATED PARTY TRANSACTIONS

The Company outsources a portion of its customer service and support through a third party who is an affiliate of the Company through common ownership. The total amount of expenses the Company recorded associated with such services totaled $3.6 million, $5.3 million, and $5.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. Amounts payable to the third party at December 31, 2025 and 2024 was $0.7 million and $0.8 million, respectively.

18 –EARNINGS (LOSS) PER SHARE

The Company computes basic earnings (loss) per share (“EPS”) attributable to common stockholders by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, restricted stock units, restricted stock awards, performance stock units and performance shares are considered to be potential common shares.

The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders for the fiscal periods indicated (in thousands, except share and per share amounts):

The following table includes the number of units and shares that may be dilutive common shares in the future, and were not included in the computation of diluted loss per share because the effect was anti-dilutive for the fiscal periods indicated:

19 –RESTRUCTURING PLAN

On May 15, 2025, the Board of Directors of the Company approved a comprehensive enterprise initiative designed to streamline the Company’s organizational structure and rebalance its cost base to achieve profitability and cash flow generation. As part of this initiative, the Company plans to identify opportunities to deliver cost savings and operational efficiencies. These savings are expected to be achieved through a multi-step strategic optimization plan (“Project Gravity”).

Project Gravity, in its entirety, is expected to be substantially completed by the end of fiscal year 2026, with the majority of the total charges incurred in fiscal year 2025. All restructuring charges recognized to date have been substantially settled in cash and the Company does not currently anticipate significant non-cash charges associated with Project Gravity.

The following table summarizes the Project Gravity costs recorded in the accompanying consolidated statements of operations and comprehensive loss for the fiscal period indicated (in thousands):

The following table presents a roll-forward of restructuring-related liabilities recorded within accrued expenses in the accompanying consolidated balance sheets (in thousands):

20 –SEGMENT INFORMATION

The Company operates asone operating and reportable segment. The Company’s one operating segment derives revenues from customers through the design, sourcing, sales, and support of wood pellet fueled barbecue grills, the pellets used to fire the grills as well as rubs, spices, sauces, and grill accessories. The operational structure, including sales, research, product design, operations, marketing, and administrative functions, is focused on the entire product suite rather than individual product categories, channels, and geographies. The accounting policies of the Company’s one operating segment are the same as those described in the summary of significant accounting policies. The Company’s chief operating decision maker (“CODM”), the CEO, regularly reviews segment assets and liabilities on the consolidated balance sheets as total consolidated assets. The CODM assesses performance for the Company’s one operating segment and decides how to allocate resources based on consolidated revenue, gross margin, demand creation costs, and net loss, by comparing actual results to historical results and previously forecasted financial information. As there is a single operating segment, the Company does not have intra-entity sales or transfers that impact the consolidated financials.

The following table presents segment information for revenue, segment profit (loss), and significant expenses with respect to the Company’s single reportable segment (in thousands):

(1)Represents expenses directly associated with building brand awareness and driving consumer demand for the Company’s products, which primarily include advertising, promotional campaigns, sponsorships, digital and social media initiatives, and other marketing activities designed to enhance consumer engagement, expand market reach, and strengthen the brand’s market presence. Demand creation costs are recorded within sales and marketing in the accompanying consolidated statements of operations and comprehensive loss.

(2)Represents total operating expenses, excluding demand creation, goodwill impairment and restructuring and other costs, as presented in the accompanying consolidated statements of operations and comprehensive loss. These expenses primarily include employee-related costs such as salaries, wages, benefits and stock-based compensation, as well as amortization of intangible assets, research and development costs, external professional service fees, depreciation expense.

(3)Represents consolidated goodwill impairment, restructuring and other costs, interest expense, other income, net, and provision (benefit) for income taxes as presented in the accompanying consolidated statement of operations and comprehensive loss.