Black Rock Coffee Bar, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q ("Form 10-Q"), and audited consolidated financial statements included in our final prospectus filed with the SEC on September 15, 2025 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Prospectus”). In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties, and other factors outside the Company’s control, as well as assumptions, such as our plans, objectives, expectations, and intentions. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including those described under the sections entitled “Forward-Looking Statements” above and “Risk Factors” elsewhere in this Form 10-Q, in the Prospectus and our other filings with the SEC.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q ("Form 10-Q"), and audited consolidated financial statements included in our Annual Report on Form 10-K ("Form 10-K") for the year ended December 31, 2025 filed with the SEC on March 4, 2026. In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties, and other factors outside the Company’s control, as well as assumptions, such as our plans, objectives, expectations, and intentions. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including those described under the sections entitled “Forward-Looking Statements” above and “Risk Factors” elsewhere in this Form 10-Q, in the Form 10-K and our other filings with the SEC.

Previous wording

We are a high-growth operator of guest-centric, drive-thru coffee bars offering premium caffeinated beverages and an elevated in-store experience crafted by our engaging baristas. Black Rock Coffee Bar was founded in 2008 in Beaverton, Oregon, by our co-founders Daniel Brand and Jeff Hernandez. What started as a single 160 square foot coffee bar in 2008 is now one of the fastest growing beverage companies in the United States by revenue and the largest fully company-owned coffee retailer in the country, with 169 locations spanning seven states as of September 30, 2025, from the Pacific Northwest to Texas.

Current wording

We are a high-growth operator of guest-centric, drive-thru coffee bars offering premium caffeinated beverages and an elevated in-store experience crafted by our engaging baristas. Black Rock Coffee Bar was founded in 2008 in Beaverton, Oregon, by our co-founders Daniel Brand and Jeff Hernandez. What started as a single 160 square foot coffee bar in 2008 is now one of the fastest growing beverage companies in the United States by revenue and the largest fully company-owned coffee retailer in the country, with 190 locations spanning seven states as of March 31, 2026, from the Pacific Northwest to Texas.

Previous wording

In assessing the performance of our business, in addition to considering a variety of measures in accordance with GAAP, our management team also considers a variety of key performance measures and non-GAAP financial measures. The key performance measures and non-GAAP financial measures used by our management to evaluate our performance are: Total Stores (End of Period), Net New Store Openings, Same Store Sales Growth, Average Unit Volume, Store revenue, Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin.

Current wording

In assessing the performance of our business, in addition to considering a variety of measures in accordance with GAAP, our management team also considers a variety of key performance measures and non-GAAP financial measures. The key performance measures and non-GAAP financial measures used by our management to evaluate our performance are: Total Stores (End of Period), Net New Store Openings, Same Store Sales Growth, Average Unit Volume, Store revenue, Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Total store operating weeks.

Previous wording

(3)The Company does not consider income (loss) from operations, income (loss) from operations margin, net loss or net loss margin to be key performance measures but has included such metrics in this table to provide the most directly comparable GAAP metric to Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin.

Current wording

(3)The Company does not consider income (loss) from operations, income (loss) from operations margin, net income (loss) or net income (loss) margin to be key performance measures but has included such metrics in this table to provide the most directly comparable GAAP metric to Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin.

Previous wording

As of September 30, 2025 and 2024, there were 134 stores and 108 stores, respectively, in our comparable store base.

Current wording

As of March 31, 2026 and 2025, there were 144 stores and 121 stores, respectively, in our comparable store base.

Previous wording

Adjusted EBITDA is net loss adjusted to exclude interest expense, net, income tax expense, and depreciation and amortization, further adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance, including transaction costs associated with our IPO, capital restructuring costs, equity-based compensation, certain litigation costs, net, point-of-sale system transition costs and other non-core costs. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of Total revenue. We use Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. See “Non-GAAP Financial Measures” below for our reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA Margin to net loss margin.

Current wording

Adjusted EBITDA is net income (loss) adjusted to exclude interest expense, net, income tax expense, and depreciation and amortization, further adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance, including transaction costs associated with our IPO, capital restructuring costs, equity-based compensation, gain (loss) on the remeasurement of the liability related to the TRA, certain litigation costs, net, and other non-core costs. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of Total revenue. We use Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. See “Non-GAAP Financial Measures” below for our reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA Margin to net loss margin.

Previous wording

Interest expense, netincludes cash and non-cash charges related to our Prior Credit Facility and New Credit Facilities, including the amortization of debt issuance costs and loan modification fees, net of capitalized interest associated with borrowings related to eligible capital expenditures and interest income earned on our related party note receivable and cash and cash equivalents.

Current wording

Interest expense, netincludes cash and non-cash charges related to our finance obligations, Prior Credit Facility and New Credit Facilities, including the amortization of debt issuance costs and loan modification fees, net of capitalized interest associated with borrowings related to eligible capital expenditures and interest income earned on our related party note receivable and cash and cash equivalents.

Previous wording

Store revenue increased $10.0 million, or 24.2%, to $51.4 million for the three months ended September 30, 2025, compared to $41.4 million for the three months ended September 30, 2024. The increase in store revenue was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed $4.6 million, as well as 10 stores opened prior to September 30, 2024 that are not yet in the comparable store base, which contributed $860.3 thousand. The remainder of the increase was primarily driven by Same Store Sales Growth of 10.8%, which contributed $4.2 million, which consists of 5.0%, or $1.9 million, from menu price increases and product mix, and 6.1%, or $2.4 million, from increased traffic, partially offset by a decrease of 0.3%, or $126.6 thousand, as a result of higher discounting for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Current wording

Store revenue increased $10.6 million, or 23.7%, to $55.4 million for the three months ended March 31, 2026, compared to $44.8 million for the three months ended March 31, 2025. The increase in store revenue was primarily driven by 36 Net New Store Openings subsequent to March 31, 2025, which contributed $7.5 million, in the three months ended March 31, 2026. The increase was also driven by 10 stores opened prior to March 31, 2025 that are not yet in the comparable store base, which contributed an incremental $0.8 million for the three months ended March 31, 2026, in addition to the $2.0 million these 10 stores contributed for the three months ended March 31, 2025. The remainder of the increase was primarily driven by Same Store Sales Growth of 5.2%, which contributed $2.2 million, which consists of 3.0%, or $1.3 million, from menu price increases, and 2.8%, or $1.2 million, from increased check size for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, partially offset by a decrease of 0.6%, or $0.3 million, as a result of decreased traffic.

Previous wording

Beverage, food and packaging costs increased $2.6 million, or 21.9%, to $14.3 million for the three months ended September 30, 2025, compared to $11.7 million for the three months ended September 30, 2024. The increase in beverage, food and packaging costs was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $1.3 million of incremental expense, as well as increased traffic at stores in the comparable store base.

Current wording

Beverage, food and packaging costs increased $2.3 million, or 18.4%, to $15.0 million for the three months ended March 31, 2026, compared to $12.7 million for the three months ended March 31, 2025. The increase in beverage, food and packaging costs was primarily driven by 36 Net New Store Openings subsequent to March 31, 2025, which contributed approximately $2.0 million of incremental expense.

Previous wording

As a percentage of total revenue, beverage, food and packaging costs decreased for the three months ended September 30, 2025 primarily due to menu price increases, improvements in operating efficiencies, and volume pricing efficiencies driven by greater economies of scale as we continued to expand our store footprint.

Current wording

As a percentage of total revenue, beverage, food and packaging costs decreased for the three months ended March 31, 2026 primarily due to lower discounting and improvements in operating efficiencies.

Previous wording

Labor and related expenses increased$1.6 million, or 17.0%, to$10.8 million for the three months ended September 30, 2025, compared to$9.2 millionfor thethree months ended September 30, 2024. The increase in labor and related expenses was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately$1.1 million in incremental expense, as well as an increase in prevailing wage rates in many of our markets and increased traffic at stores in the comparable store base.

Current wording

Labor and related expenses increased$2.1 million, or 21.8%, to$11.5 million for the three months ended March 31, 2026, compared to$9.4 millionfor thethree months ended March 31, 2025. The increase in labor and related expenses was primarily driven by 36 Net New Store Openings subsequent to March 31, 2025, which contributed approximately$1.9 million in incremental expense, as well as an increase in prevailing wage rates in three of our markets.

Previous wording

As a percentage of total revenue, labor and related expenses decreased for the three months ended September 30, 2025 primarily due to menu price increases to offset increases in prevailing wage rates, our ongoing efforts to improve employee retention and operational efficiency.

Current wording

As a percentage of total revenue, labor and related expenses decreased for the three months ended March 31, 2026 primarily due to our ongoing efforts to improve employee retention and operational efficiency.

Previous wording

Occupancy and related expenses increased$805 thousand, or 24.9%, to $4.0 million for thethree months ended September 30, 2025, compared to $3.2 million for the three months ended September 30, 2024. The increase in occupancy and related expenses was primarily due to 25 Net New Store Openings subsequent to September 30, 2024, which contributed approximately $578.1 thousand in incremental expense.

Current wording

Occupancy and related expenses increased$1.0 million, or 26.1%, to $4.7 million for thethree months ended March 31, 2026, compared to $3.7 million for the three months ended March 31, 2025. The increase in occupancy and related expenses was primarily due to 36 Net New Store Openings subsequent to March 31, 2025, which contributed approximately $1.0 million in incremental expense.

Previous wording

Other store operating expenses increased $1.5 million, or 26.9%, to $7.1 million for thethree months ended September 30, 2025, compared to $5.6 million for the three months ended September 30, 2024. The increase in other store operating expenses was primarily driven by higher delivery commissions and merchant processing fees associated with increased sales and transaction volumes, which contributed approximately$713.2 thousand of incremental expense, and increased operating costs associated with 25 Net New Store Openings subsequent to September 30, 2024.

Current wording

Other store operating expenses increased $1.5 million, or 24.7%, to $7.8 million for thethree months ended March 31, 2026, compared to $6.2 million for the three months ended March 31, 2025. The increase in other store operating expenses was primarily driven by higher delivery commissions and merchant processing fees associated with increased sales and transaction volumes, which contributed approximately$0.6 million of incremental expense and increased operating costs associated with 36 Net New Store Openings subsequent to March 31, 2025.

Previous wording

Selling, general and administrative expenses increased $14.4 million, or 82.7%, to $31.9 million for the nine months ended September 30, 2025, compared to $17.5 million for the nine months ended September 30, 2024. The increase in selling, general, and administrative expenses was primarily driven by$11.6 million of IPO-related expenses. The remainder of the increase was primarily driven by a $2.1 million increase in our corporate payroll expenses to support future growth and strategic initiatives, and an$867.8 thousand increase in equity-based compensation.

Current wording

Selling, general, and administrative expenses increased $2.4 million, or 34.3%, to $9.2 million for thethree months ended March 31, 2026, compared to $6.9 million for the three months ended March 31, 2025. The increase in selling, general, and administrative expenses was primarily driven by a$0.9 million increase in our corporate payroll expenses as a result of increased headcount to support future growth and strategic initiatives, $0.7 million of incremental public company costs and an increased investment in marketing which contributed $0.4 million of incremental expense for the three months ended March 31, 2026. The remainder of the increase was primarily driven bya$1.2 million increase in equity-based compensation, partially offset by $1.1 million of IPO-related expenses incurred during the three months ended March 31, 2025.

Previous wording

Depreciation and amortization incre ased$497.0 thousand, or 19.6%, to$3.0 million for the three months ended September 30, 2025, compared to$2.5 millionfor thethree months ended September 30, 2024. The increase in depreciation and amortization was primarily driven by 25 Net New Store Openings subsequent to September 30, 2024.

Current wording

Depreciation and amortization incre ased$0.6 million, or 19.8%, to$3.5 million for the three months ended March 31, 2026, compared to$2.9 millionfor thethree months ended March 31, 2025. The increase in depreciation and amortization was primarily driven by 36 Net New Store Openings subsequent to March 31, 2025.

Previous wording

Pre-opening costs increased $359.0 thousand, or 31.4%, to $1.5 million for thethree months ended September 30, 2025, compared to $1.1 million for the three months ended September 30, 2024. The increase in pre-opening costs was primarily a result of 4 incremental Net New Store Openings for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Current wording

Pre-opening costs increased $0.4 million, or 51.5%, to $1.1 million for thethree months ended March 31, 2026, compared to $0.7 million for the three months ended March 31, 2025. The increase in pre-opening costs was primarily a result of increased wages and team costs as a result of 4 more Net New Store Openings for thethree months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

Interest expense, net decreased $202.0 thousand, or 6.6%, to $2.9 million for thethree months ended September 30, 2025, compared to $3.1 million for the three months ended September 30, 2024. The decrease in interest expense, net was primarily driven by repaying all outstanding borrowings under the Prior Credit Facility and entering into the New Credit Facilities, which carry a lower interest rate and less outstanding borrowings when compared to the Prior Credit Facility.

Current wording

Interest expense, net decreased $2.6 million, or 86.1%, to $0.4 million for thethree months ended March 31, 2026, compared to $3.0 million for the three months ended March 31, 2025. The decrease in interest expense, net was primarily driven by repaying all outstanding borrowings under the Prior Credit Facility and entering into the New Credit Facilities, which carry a lower interest rate and less outstanding borrowings when compared to the Prior Credit Facility.

Previous wording

The increase in other expense, net to $6.9 million for thethree months ended September 30, 2025 from $716.0 thousand for the three months ended September 30, 2024 was primarily driven by $5.3 million in expense incurred in connection with the forgiveness of our related party note receivable and a $1.6 million debt extinguishment charge incurred during the three months ended September 30, 2025.

Current wording

The increase of $337 thousand in other expense, net to $352 thousand for the three months ended March 31, 2026 from $15 thousand for the three months ended March 31, 2025 was primarily driven $351 thousand of remeasurement expense related to the TRA liability incurred during the three months ended March 31, 2026.

Previous wording

In addition to our consolidated financial statements, which are prepared in accordance with GAAP, we present Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin in this Form 10-Q as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe that these non-GAAP financial measures assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. Management believes Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone provide.

Current wording

In addition to our condensed consolidated financial statements, which are prepared in accordance with GAAP, we present Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin in this Form 10-Q as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe that these non-GAAP financial measures assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. Management believes Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Store-Level Profit, Store-Level Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone provide.

Previous wording

The following tables provide reconciliations of net loss to Adjusted EBITDA and net loss margin to Adjusted EBITDA Margin as well as income from operations to Store-Level Profit and Store-Level Profit Margin for the periods presented:

Current wording

The following tables provide reconciliations of net income (loss) to Adjusted EBITDA and net income (loss) margin to Adjusted EBITDA Margin as well as income from operations to Store-Level Profit and Store-Level Profit Margin for the periods presented:

Previous wording

(3)For the three months ended September 30, 2025, includes non-recurring legal fees. For the three months ended September 30, 2024, includes legal costs, offset by insurance proceeds, stemming from the Roasters settlement (refer to Note 5 in the audited consolidated financial statements included in our Prospectus), along with other non-recurring legal fees.

Current wording

(2)For the three months ended March 31, 2026, includes non-recurring legal fees. For the three months ended March 31, 2025, includes legal costs, offset by insurance proceeds.

Previous wording

We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. Our primary requirements for liquidity are to fund our working capital needs, operating lease obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their beverage and food purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payments are due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new stores, existing store capital investments for maintenance, as well as investments in our corporate technology infrastructure to support our corporate office, store locations and digital strategy. We have historically funded our operations primarily through cash provided by operating activities, draws under our Prior Credit Facility as well as the issuance and sales of securities through private placements. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity securities to finance such acquisitions, which would result in additional expenses or dilution to our shareholders.

Current wording

We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. Our primary requirements for liquidity are to fund our working capital needs, operating lease obligations, purchase obligations, capital expenditures and general corporate needs. Our requirements for working capital are generally not significant because our guests pay for their beverage and food purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payments are due to the supplier of such items. Our ongoing capital expenditures are principally related to opening new stores, existing store capital investments for maintenance, as well as investments in our corporate technology infrastructure to support our corporate office, store locations and digital strategy. We have historically funded our operations primarily through cash provided by operating activities, draws under our New Credit Facilities and Prior Credit Facility as well as the issuance and sales of securities through private placements. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity securities to finance such acquisitions, which would result in additional expenses or dilution to our shareholders.

Previous wording

If we do not have sufficient funds to pay taxes, payments under the Tax Receivable Agreement or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent we are unable to make payments under the Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement. In addition, if Black Rock OpCo does not have sufficient funds to make distributions, the ability of Black Rock Coffee Bar, Inc. to declare and pay cash dividends will also be restricted or impaired.

Current wording

If we do not have sufficient funds to pay taxes, payments under the Tax Receivable Agreement or other liabilities or to fund our operations, we may have to borrow funds or otherwise raise capital, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders or equity holders. To the extent we are unable to make payments under the Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement. In addition, if Black Rock OpCo does not have sufficient funds to make distributions, the ability of Black Rock Coffee Bar, Inc. to declare and pay cash dividends will also be restricted or impaired.

Previous wording

In addition, we may require additional capital resources to execute strategic initiatives to grow our business in the future. We believe, however, that cash provided by operating activities and existing cash on hand, together with remaining amounts available under our New Credit Facilities, will be sufficient to satisfy our anticipated cash requirements for the next twelve months and the foreseeable future, including our expected capital expenditures for expansion of our store base and production facilities, incremental public company costs, debt service requirements, Tax Receivable Agreement obligations, operating lease obligations, and working capital obligations. See Note 6 and Note 7 to our consolidated financial statements included elsewhere in this Form 10-Q for more information. Our sources of liquidity could be affected by factors described in Part II, Item 1A “Risk Factors” and, depending on the severity and direct impact of these factors on us, we may not be able to secure additional financing on acceptable terms, or at all.

Current wording

In addition, we may require additional capital resources to execute strategic initiatives to grow our business in the future. We believe, however, that cash provided by operating activities and existing cash on hand, together with remaining amounts available under our New Credit Facilities and collections of tenant improvement allowances, will be sufficient to satisfy our anticipated cash requirements for the next twelve months and the foreseeable future, including our expected capital expenditures for expansion of our store base and production facilities, incremental public company costs, debt service requirements, Tax Receivable Agreement obligations, operating lease obligations, and working capital obligations. See Note 6 (Long-Term Debt), Note 7 (Leases) and Note 10 (Income Taxes and Tax Receivable Agreement) to our condensed consolidated financial statements included elsewhere in this Form 10-Q for more information. Our sources of liquidity could be affected by factors described in Part I, Item 1A "Risk Factors" in our 10-K, and risk factors described in Part II, Item 1A “Risk Factors” and elsewhere in this Form 10-Q, depending on the severity and direct impact of these factors on us, we may not be able to secure additional financing on acceptable terms, or at all.

Previous wording

We had cash and cash equivalents of $32.6 million and $10.2 million as of September 30, 2025 and December 31, 2024, respectively.

Current wording

We had cash and cash equivalents of $20.0 million and $28.4 million as of March 31, 2026 and December 31, 2025, respectively.

Previous wording

The decrease in net cash provided by (used in) operating activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily driven by $17.4 million of IPO-related expenses paid during the nine months ended September 30, 2025, partially offset by an increase in revenue due to 25 Net New Store Openings subsequent to September 30, 2024, incremental revenue generated from 10 stores opened prior to September 30, 2024 that are not yet in the comparable store base and Same Store Sales Growth of 10.3%, as well as improved operating performance as a result of improved labor efficiency and working capital management.

Current wording

The increase in net cash provided by operating activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily driven by an increase in revenue due to 36 Net New Store Openings subsequent to March 31, 2025 and Same Store Sales Growth of 5.2%, as well as improved operating performance as a result of improved operating efficiency and working capital management. Operating cash flows for the three months ended March 31, 2025 benefited from cash generated from 5 Net New Store Openings and Same Store Sales Growth of 9.2%.

Previous wording

The increase in net cash used in investing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily driven by increased investments in capital expenditures as a result of Net New Store Openings and our growing development pipeline.

Current wording

The increase in net cash used in investing activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily driven by increased investments in capital expenditures as a result of Net New Store Openings and our growing development pipeline. Net cash used in investing activities during the three months ended March 31, 2025 was primarily driven by investments in capital expenditures to support our development pipeline and Net New Store Openings.

Previous wording

Material cash requirements from known contractual obligations arising in the normal course of business primarily consist of operating lease obligations and long-term debt. In addition, we expect that we will require significant cash to make payments under the Tax Receivable Agreement, and we are currently unable to estimate the amounts and timing of the payments that may be due thereunder. The following table summarizes our current and long-term material cash requirements as of September 30, 2025:

Current wording

Material cash requirements from known contractual obligations arising in the normal course of business primarily consist of operating lease obligations, long-term debt and purchase obligations. In addition, we expect that we will require significant cash to make payments under the Tax Receivable Agreement, and we are currently unable to estimate the amounts and timing of the payments that may be due thereunder. The following table summarizes our current and long-term material cash requirements as of March 31, 2026:

Previous wording

(1)Long-term debt includes the principal amount of borrowings outstanding under our New Credit Facilities and the interest payments on our New Credit Facilities, which are based on the weighted-average interest rate as of September 30, 2025. As contractual interest rates and the amount of debt outstanding are variable in certain cases, actual cash payments may differ from the estimates provided.

Current wording

(1) Long-term debt includes the principal amount of borrowings outstanding under our New Credit Facilities and the interest payments on our New Credit Facilities, which are based on the weighted-average interest rate as of March 31, 2026. Long-term debt also includes total payments to be made under our finance obligations. As contractual interest rates and the amount of debt outstanding are variable in certain cases, actual cash payments may differ from the estimates provided.

Previous wording

Concurrently with the consummation of the IPO, Black Rock OpCo and certain of its wholly-owned subsidiaries entered into the New Credit Agreement with JPMorgan Chase Bank, N.A., as the administrative agent, and other loan parties and lenders party thereto, to provide for (i) a $50.0 million New Term Loan and (ii) a $25.0 million New Revolving Credit Facility. As of the closing of the IPO, the aggregate principal amount borrowed under the New Credit Facilities was $50.0 million from the New Term Loan which was used, together with proceeds from the Co-Founder Contribution and net proceeds from the IPO, to repay all amounts outstanding under the Prior Credit Facility. Subsequent to the IPO, we made a principal payment in the amount of $30.0 million thereby reducing the outstanding balance of the New Term Loan as of September 30, 2025 to $20.0 million.

Current wording

Concurrently with the consummation of the IPO, Black Rock OpCo and certain of its wholly-owned subsidiaries entered into the New Credit Agreement with JPMorgan Chase Bank, N.A., as the administrative agent, and other loan parties and lenders party thereto, to provide for (i) a $50.0 million New Term Loan and (ii) a $25.0 million New Revolving Credit Facility. As of the closing of the IPO, the aggregate principal amount borrowed under the New Credit Facilities was $50.0 million from the New Term Loan which was used, together with proceeds from the Co-Founder Contribution and net proceeds from the IPO, to repay all amounts outstanding under the Prior Credit Facility. Subsequent to the IPO, we made principal payments in the amount of $30.3 million thereby reducing the outstanding principal balance of the New Term Loan as of March 31, 2026 to $19.8 million.

Previous wording

The New Credit Agreement contains certain affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens on assets, fundamental changes and asset sales, investments, negative pledges, repurchase of stock, dividends and other distributions, and transactions with affiliates. In addition, the New Credit Agreement also contains financial covenants that require us to not exceed a maximum net rent adjusted leverage ratio and to maintain a minimum fixed charge coverage ratio.

Current wording

The New Credit Agreement contains certain affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens on assets, fundamental changes and asset sales, investments, negative pledges, repurchase of stock, dividends and other distributions, and transactions with affiliates. In addition, the New Credit Agreement also contains financial covenants that require us not to exceed a maximum net rent adjusted leverage ratio and to maintain a minimum fixed charge coverage ratio.

Previous wording

Borrowings under the New Credit Agreement are available as alternate base rate (“ABR”) or term benchmark loans. ABR loans under the New Credit Agreement accrue interest at an alternate base rate plus an applicable rate, and term benchmark loans accrue interest at an adjusted SOFR rate plus an applicable rate. The ABR rate represents the greatest of (i) the prime rate, (ii) the Federal Reserve’s Bank of New York overnight rate plus 0.5% and (iii) the one-month adjusted term SOFR rate plus 1.0%. The applicable rate for the ABR and term benchmark loans is tied to a pricing grid tied to our net rent adjusted leverage ratio. The adjusted SOFR rate will represent the term SOFR rate plus 0.10%. The applicable rate spread for ABR and term benchmark loans ranges from 0.50% to 1.75% and 1.50% to 2.75%, respectively. Interest on the new Credit Agreement is payable at least quarterly and upon maturity. As of September 30, 2025, the weighted-average interest rate on outstanding borrowings under the New Revolving Credit Facility was 6.75%.

Current wording

Borrowings under the New Credit Agreement are available as alternate base rate (“ABR”) or term benchmark loans. ABR loans under the New Credit Agreement accrue interest at an alternate base rate plus an applicable rate, and term benchmark loans accrue interest at an adjusted SOFR rate plus an applicable rate. The ABR rate represents the greatest of (i) the prime rate, (ii) the Federal Reserve’s Bank of New York overnight rate plus 0.5% and (iii) the one-month adjusted term SOFR rate plus 1.0%. The applicable rate for the ABR and term benchmark loans is tied to a pricing grid tied to our net rent adjusted leverage ratio. The adjusted SOFR rate will represent the term SOFR rate plus 0.10%. The applicable rate spread for ABR and term benchmark loans ranges from 0.50% to 1.75% and 1.50% to 2.75%, respectively. Interest on the New Credit Agreement is payable at least quarterly and upon maturity. As of March 31, 2026, the weighted-average interest rate on outstanding borrowings under the New Revolving Credit Facility was approximately 6.02%.

Previous wording

As of September 30, 2025, we did not have any off-balance sheet arrangements, except for operating leases entered in the normal course of business where we have not taken physical possession of the leased property.

Current wording

As of March 31, 2026, we did not have any off-balance sheet arrangements, except for operating leases entered in the normal course of business where we have not taken physical possession of the leased property and unrecorded purchase obligations related to our legally binding firm purchase commitments for inventory purchases.

Previous wording

We will remain an emerging growth company until the earliest of (i) December 31, 2030, (ii) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

Current wording

We will remain an emerging growth company until the earliest of (i) December 31, 2030, (ii) the last day of the first fiscal year in which our annual gross revenue exceeds $1.235 billion, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.