A.K.A. BRANDS HOLDING CORP.

(tabular amounts in thousands, except share, per share data, unit, per unit data, ratios, or as noted)

Note 1. Organization and Description of Business

a.k.a. Brands Holding Corp. (together with its wholly-owned subsidiaries, collectively, the “Company”), which operates under the name “a.k.a. Brands” or “a.k.a.,” is a portfolio of next-generation fashion brands for the next generation of consumers. The Company seeks to leverage its industry expertise and operational synergies to accelerate its brands so they can grow faster, reach broader audiences, achieve greater scale and enhance their profitability.

The Company is headquartered in San Francisco, California, with buying, studio, marketing, fulfillment and administrative functions primarily in Australia and the United States.

Note 2. Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The Company’s unaudited condensed consolidated interim financial statements have been prepared in accordance with Article 10 of the SEC’s Regulation S-X. As permitted under those rules, certain footnotes or other financial information that are normally required by generally accepted accounting principles in the United States (“GAAP”) can be condensed or omitted. These financial statements have been prepared on the same basis as our annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of our financial information. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2025 which are included in the 2025 Form 10-K. The year-end condensed consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by GAAP. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2026 or for any other interim period or for any other future year. The accompanying condensed consolidated financial statements include the balances of the Company and all of its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. On an ongoing basis, the Company evaluates items subject to significant estimates and assumptions.

Revenue Recognition

Revenue is primarily derived from the sale of apparel merchandise through the Company’s online websites, stores, third-party marketplaces, wholesale partnerships and, when applicable, shipping revenue.

Revenue is recognized in an amount that reflects the consideration expected to be received in exchange for products. To determine revenue recognition for contracts with customers in accordance with Revenue from Contracts with Customers (Topic 606), the Company recognizes revenue from the commercial sales of products and contracts by applying the following five steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfies its performance obligation. A contract is created with the customer at the time the order is placed by the customer, which creates a single performance obligation. The Company recognizes revenue for its single performance obligation at the time control of the product passes to the customer, which is when the goods are transferred to a third-party common carrier, for purchases through the Company’s online websites or by wholesale partners, or at point of sale, for purchases in its stores. In addition, the Company has elected to treat shipping and handling as fulfillment activities and not a separate performance obligation.

Net sales from product sales includes shipping charged to the customer and is recorded net of taxes collected from customers, which are recorded in accrued liabilities and are remitted to governmental authorities. Cash discounts earned by the customers at the time of purchase and estimates for sales return allowances are deducted from gross revenue in determining net sales.

The Company generally provides refunds for goods returned within 30 to 45 days from the original purchase date. A returns reserve is recorded by the Company based on historical refund experience with a corresponding reduction of sales and cost of sales. The sales return reserve was $7.6 million and $7.9 million as of September 30, 2026 and December 31, 2025, respectively.

The following table presents a summary of the Company’s sales return reserve:

The Company also sells gift cards and issues online credits in lieu of cash refunds or exchanges. Proceeds from the issuance of gift cards and online credits issued are recorded as deferred revenue and recognized as revenue when the gift cards or online credit are redeemed or, upon inclusion in gift card and online credit breakage estimates. Breakage estimates are determined based on prior historical experience.

Revenue recognized in net sales on breakage of gift cards and online credit for thethree months ended September 30, 2026 and 2025 was $0.6 million and $0.5 million, respectively. Revenue recognized in net sales breakage of gift cards and online credit for thenine months ended September 30, 2026 and 2025 was$1.4 million and $1.5 million, respectively.

During the third quarter of 2026, the Company identified errors in the calculation of net sales attributable to geographic areas in its disaggregation of revenue disclosure. The errors resulted in an overstatement of Australia & New Zealand and Rest of world net sales and an understatement of U.S. net sales in previously reported periods. The errors had no effect on consolidated net sales or on any other amount in the Company’s annual consolidated financial statements or its interim condensed consolidated financial statements. The Company evaluated the errors under SEC Staff Accounting Bulletins No. 99 and No. 108 and concluded they were not material to any previously issued financial statements. Prior-period amounts in the tables below have been revised to correct for these errors.

The following tables present the disaggregation of the Company’s net sales by geography, based on customer address:

The Company will revise consolidated financial statements for the years ended December 31, 2025 and 2024 and the condensed consolidated financial statements for the impacted interim periods within 2026 and 2025 to correct these disclosures when those periods are presented. The corrected amounts for each period are summarized below.

Segment Information

Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the Chief Operating Decision Maker (the “CODM”) in deciding how to allocate resources and in assessing performance. The Company has determined that itsfour brands are each an operating segment. The Company has aggregated its operating segments intoone reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers and economic characteristics.

Recent Accounting Pronouncements

In November 2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Company’s consolidated statements of income, as well as qualitatively describe remaining amounts included in those captions. The Company intends to adopt ASU 2024-03 for the Company’s fiscal year ending December 31, 2027 using a prospective transition method.

Note 3. Inventory

At the end of March 2026, the Company recorded a charge of $12.0 million to cost of sales in the accompanying condensed consolidated statements of income. The write-down was primarily of streetwear inventory as we fully transition to our test-and-repeat model.

Note 4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets are comprised of the following:

In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) on goods imported into the United States were unauthorized. The Company serves as the importer of record for certain products previously subject to IEEPA tariffs and paid approximately $25.8 million in such tariffs since their inception. The U.S. Court of International Trade subsequently ordered U.S. Customs and Border Protection (“CBP”) to refund all collected IEEPA tariffs. The Company has complied with CBP’s prescribed administrative process through their Consolidated Administration and Processing of Entries (“CAPE”) system for seeking these refunds. Based upon the U.S. Supreme Court’s ruling, related U.S. Court of International Trade (“CIT”) proceedings, and the Company’s submission of tariff refund requests and assessment of the recoverability of amounts paid, the Company has concluded that the recovery of previously incurred IEEPA tariffs is probable. The estimate reflects the Company’s judgment regarding the portion of previously recognized IEEPA tariffs expected to be recoverable through the refund process administered by CBP and it may be subject to change based on the ultimate resolution of refund claims. The ultimate amount of recoveries may differ from the Company’s estimates, based on additional guidance from CBP, the resolution of specific entry-level claims or other administrative developments. To the extent there are changes in amounts that become recoverable, including any associated interest, such amounts will be recognized in the period in which information about the probable and reasonably estimable amounts becomes known to the Company.

Accordingly, during the three months ended March 31, 2026, the Company recognized a receivable in prepaid expenses and other current assets of approximately $25.8 million, with a corresponding reduction of $18.6 million to cost of sales and $7.2 million to capitalized tariffs in inventory. Of the $18.6 million cost of sales reduction, $14.4 million related to amounts recognized in cost of sales in 2025. Additionally, the Company also recognized $1.9 million of charges related to the reversal of duty drawback benefits attributable to IEEPA duties and other anticipated refund obligations.

During the three months ended June 30, 2026, the Company collected $23.2 million of the $25.8 million outstanding receivable, with a remaining balance of $2.6 million included in prepaid expenses and other current assets as of June 30, 2026. Additionally, during the three months ended June 30, 2026, the Company received and recognized $1.0 million of interest income related to IEEPA tariff refunds.

During the three months ended September 30, 2026, the Company collected $0.1 million of the $2.6 million outstanding receivable, recorded a $0.1 million reduction to interest income and sold the remaining receivables for $1.9 million with the difference being recognized as a loss on sale and recorded within other expense.

Note 5. Property and Equipment, Net

Property and equipment, net is comprised of the following:

Depreciation expense consisted of the following:

Note 6. Goodwill

The carrying value of goodwill, as of September 30, 2026 and December 31, 2025, was $96.5 million and $93.7 million, respectively. No goodwill impairment was required during either of thethree and nine months ended September 30, 2026 and 2025.

The following table summarizes goodwill activity:

Note 7. Intangible Assets

The gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives as of September 30, 2026 and December 31, 2025, included in intangible assets, net in the accompanying condensed consolidated balance sheets, are as follows:

Amortization of acquired intangible assets with finite useful lives is included in general and administrative expenses and was$2.3 million and $2.3 million for the three months ended September 30, 2026 and 2025, respectively and was$7.0 million and$7.1 million for the nine months ended September 30, 2026 and 2025, respectively.

Future estimated amortization expense for acquired identifiable intangible assets is as follows:

Note 8. Debt

Amended and Restated Credit Agreement

On October 14, 2025, the Company entered into an Amended and Restated Syndicated Facility Agreement (the “Amended and Restated Credit Agreement”) with the other borrowers party thereto, A.K.A. Brands Intermediate Holding Corp., as Holdings, Keybank National Association, as administrative agent, collateral agent, security trustee and lead arranger, and the other persons party thereto from time to time, which amends and restates in its entirety the Syndicated Facility Agreement, dated as of September 21, 2021 (as amended, restated, increased, extended, supplemented or otherwise modified from time to time). The Amended and Restated Credit Agreement amends and restates the Senior Secured Credit Facility to, among other things, (i) establish revolving credit facility commitments in an aggregate principal amount of$35.3 million, (ii) establish term loans in an aggregate principal amount of$85.0 million, (iii) adjust the pricing stepdowns related to the interest rate and (iv) resize baskets within certain negative covenants based on a Consolidated EBITDA (as defined in the Amended and Restated Credit Agreement) of $35.2 million.

The Amended and Restated Credit Agreement extends the maturity date of the revolving credit facility commitments and the term loans to October 14, 2028. The Company is required to make mandatory amortization payments in respect of the term loans in an amount equal to (a) commencing with the fiscal quarter ending on December 31, 2025 and until the fiscal quarter ending on December 31, 2027, a principal amount of term loans equal to the aggregate outstanding principal amount of term loans made on the date of the execution of the Amended and Restated Credit Agreement, multiplied by 1.875% and (b) commencing with the fiscal quarter ending on March 31, 2028, a principal amount of term loans equal to the aggregate outstanding principal amount of term loans made on the date of the execution of the Amended and Restated Credit Agreement, multiplied by 2.50%. Borrowings under the Amended and Restated Credit Agreement accrue interest at Term SOFR plus an applicable margin dependent upon the Company’s net leverage ratio, as defined in the Amended and Restated Credit Agreement. The highest interest rate under the agreement occurs at a net leverage ratio of greater than 2.75 x, yielding an interest rate of Term SOFR plus 3.75%.

The Amended and Restated Credit Agreement includes certain financial covenants requiring the Company to maintain a maximum total net leverage ratio and a minimum fixed charge coverage ratio, each tested as of the last day of every fiscal quarter. Specifically, the Company must maintain a maximum total net leverage ratio of 3.50 to 1.00 and a minimum fixed charge coverage ratio of 1.35 to 1.00 for 2025 and 2026,3.25 to 1.00 and 1.50 to 1.00 for 2027, and 3.00 to 1.00 and 1.75 to 1.00 for 2028, respectively. The agreement also includes a capital expenditure covenant limiting growth-related capital expenditures for new store development to$17.5 million for the period from October 14, 2025, through the first anniversary of that date, with annual limits of$20.0 million and$22.5 million in subsequent years. If the Company does not comply with these financial covenants, it may, subject to certain conditions and limitations, make direct or indirect equity contributions to cure such non-compliance. Additionally, the Company is required to make a mandatory prepayment of a portion of excess cash flow, as defined in the Amended and Restated Credit Agreement, based on its net leverage ratio. A prepayment of 50% of excess cash flow is required if the net leverage ratio exceeds 2.0 x, which is reduced to 25% if the ratio is less than or equal to 2.0 x, andno prepayment is required if the ratio is less than or equal to 1.0 x. As of September 30, 2026, the Company was in compliance with all financial debt covenants.

As of September 30, 2026, the all-in rate (Term SOFR plus the applicable margin) for the Company’s term loan and borrowings under the revolving line of credit was 7.58%.

Total Debt and Interest

Outstanding debt consisted of the following:

Interest expense, which included the amortization of debt issuance costs, totaled$2.1 millionand$2.4 million for thethree months ended September 30, 2026 and 2025, respectively, and totaled$6.5 million and$7.5 million for thenine months ended September 30, 2026 and 2025, respectively. Additionally, as of September 30, 2026, the Company had$9.3 million of outstanding letters of credit. As of September 30, 2026, the carrying value of the Company’s total debt approximated its fair value.

As of September 30, 2026, the maturities of principal amounts of our total debt obligations were as follows:

Note 9. Leases

The Company leases office locations, warehouse facilities and stores under various non-cancellable operating lease agreements. The Company’s leases have remaining lease terms of approximately 1 year to 10 years, which represent the non-cancellable periods of the leases and include extension options that the Company determined are reasonably certain to be exercised. The Company excludes from the lease terms any extension options that are not reasonably certain to be exercised, ranging from approximately 6 months to 3 years. Lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as payments for common area maintenance and administrative services. The Company often receives customary incentives from landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases. Leases are classified as operating or financing at commencement. The Company does not have any material financing leases.

Operating lease right-of-use assets and liabilities on the condensed consolidated balance sheets represent the present value of the remaining lease payments over the remaining lease terms. The Company uses its incremental borrowing rate to calculate the present value of the lease payments, as the implicit rates in the leases are not readily determinable. Operating lease costs consist primarily of the fixed lease payments included in the operating lease liabilities and are recorded on a straight-line basis over the lease terms.

The Company’s operating lease costs were as follows:

The Company does not have any sublease income and the Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants.

Supplemental cash flow information relating to the Company’s operating leases was as follows:

Other information relating to the Company’s operating leases was as follows:

As of September 30, 2026, the maturities of operating lease liabilities were as follows:

Note 10. Income Taxes

Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. The Company will adjust its liability for uncertain tax positions, if any, based on changes in facts and circumstances such as the closing of a tax audit or changes in estimates. The Company’s income tax provision may be impacted to the extent that the final outcome of these tax positions is different than the position taken.

The Company is subject to income taxes in the United States, Australia, New Zealand and the United Kingdom. Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes. During the ordinary course of business, the Company considers tax positions for which the ultimate tax determination is uncertain for the purpose of determining whether a reserve is required, despite the Company’s belief that the tax positions are fully supportable. To date the Company has not established a reserve provision because the Company believes that all tax positions are highly certain.

The following table summarizes our effective tax rate for the periods presented:

For the three and nine months ended September 30, 2026, as compared to the same periods in the prior year, the Company’s effective tax rate changed primarily due to discrete income tax expense recorded in the same periods in 2025 related to disallowed amortization expense on intangible assets. In addition, the Company is projecting a full-year pre-tax loss in the U.S. in the current year, for which no tax benefit is recognized due to the full valuation allowance on the U.S. net deferred tax assets. The effective tax rate for the three and nine months ended September 30, 2026 was lower than the U.S. statutory rate of 21.0% primarily due to the full valuation allowance on the net deferred tax assets in the U.S. and Australia, which results in no tax benefit being recognized on pre-tax losses in those jurisdictions, while income tax expense continues to be recorded on pre-tax income in New Zealand and the United Kingdom.

Note 11. Accrued Liabilities

Accrued liabilities consisted of the following:

Note 12. Deferred Revenue

Deferred revenue consisted of the following:

Note 13. Equity-based Compensation

Incentive Plans

2021 Omnibus Incentive Plan

In September 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Omnibus Incentive Plan (the “2021 Plan”) which became effective in connection with the Company’s initial public offering of common stock (the “IPO”). The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units and other forms of equity and cash compensation. A total of 408,355 shares of the Company’s common stock, as adjusted for the Reverse Stock Split, were initially reserved for issuance under the 2021 Plan. The number of shares of common stock reserved and available for issuance under the 2021 Plan increases on January 1 of each year by 1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors. On May 30, 2023, the Company’s stockholders approved an amendment to the 2021 Plan to increase the number of shares available for issuance under the 2021 Plan by 833,333 shares of the Company’s common stock, as adjusted for the Reverse Stock Split. On May 22, 2024, the Company’s stockholders approved an amendment to the 2021 Plan to increase the number of shares available for issuance under the 2021 Plan by 1,100,000 shares of the Company’s common stock. As of September 30, 2026, there were 2,876,478 shares reserved for issuance of awards under the 2021 Plan.

2021 Employee Stock Purchase Plan

In September 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (the “ESPP”) which became effective in connection with the IPO. A total of 102,088 shares of the Company’s common stock, as adjusted for the Reverse Stock Split, were initially reserved for issuance under the ESPP. The number of shares reserved and available for issuance under the ESPP automatically increases on January 1 of each year by 1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors. As of September 30, 2026, there were 656,878 shares reserved for issuance under the ESPP.

The offering periods of the ESPP aresix months long and are anticipated to be offered twice per year. The price at which common stock is purchased under the ESPP is equal to 85% of the fair market value of a share of the Company’s common stock on the first or last day of the offering period, whichever is lower. The fair value of the discount and the look-back period will be estimated using the Black-Scholes option pricing model.

Grant Activity

Stock Options

The 2021 Plan provides for the issuance of incentive and nonqualified stock options. Under the 2021 Plan, the exercise price of a stock option shall not be less than the fair market value of one share of the Company’s common stock on the date of grant. Stock options have a contractual term, the period during which they are exercisable, not to exceedten years from the date of grant, and generally vest over time, based on performance or based on the achievement of a market condition.

In September 2023, an award, including 416,667 performance-based stock options (the “Bryett Award”), was issued to Wesley Bryett, a member of the Company’s board of directors and co-founder of Princess Polly. This award expires afterten years, or upon the termination of Mr. Bryett’s service to the Company, and includes four tranches of stock options that will vest and become exercisable based upon the achievement of various common stock price targets. The weighted average exercise price for the options in the Bryett Award is $109.27. Each tranche of stock options has a different derived service period, the average of which is approximately 5.5 years. As of September 30, 2026, no options issued as part of the Bryett Award had vested, the options heldno intrinsic value, and total unrecognized compensation cost related to the Bryett Award was $0.5 million, which is expected to be recognized over 2.5 years.

In connection with the appointment of Ciaran Long as the Chief Executive Officer in January 2025, Mr. Long was granted a performance-based stock option, representing a contingent right to purchase 100,000 shares of common stock at a specified price, upon vesting of the option (the “Long Award”). The Long Award expires afterten years, or upon the termination of Mr. Long’s service to the Company, and includes four tranches that will vest and become exercisable based upon the achievement of various common stock price targets. The weighted average exercise price for the option in the Long Award is $120.00. Each tranche has a different derived service period, the average of which is approximately 4.2 years. As of September 30, 2026, no tranche of the Long Award had vested, the option heldno intrinsic value, and total unrecognized compensation cost related to the Long Award was $0.6 million, which is expected to be recognized over 2.4 years.

A summary of the Company's time-based stock option activity under the 2021 Plan for thenine months ended September 30, 2026, is as follows:

As of September 30, 2026, there wasno unrecognized compensation cost related to unvested time-based stock options issued under the 2021 Plan.

Restricted Stock Units

The 2021 Plan provides for the issuance of restricted stock units (“RSUs”). Time-based RSUs issued prior to March 31, 2022 vest over four years while all time-based RSUs issued after that date vest over three years.

In May 2024, an award (the “Interim CEO Award”) of 150,000 performance-based RSUs (“PSUs”) was issued to Ciaran Long, Interim Chief Executive Officer and Chief Financial Officer of the Company. The Interim CEO Award expires after five years, or upon the termination of Mr. Long’s service to the Company, and includesten tranches of PSUs that will vest based upon the achievement of various common stock price targets. If any common stock price target is achieved for one or more tranches of PSUs prior to April 1, 2025, the vesting date for the applicable tranche(s) will be April 1, 2025. At the time of the grant, each PSU had a fair value of $29.50. Each tranche of PSUs has a different derived service period, the average of which is approximately 2.9 years. As of September 30, 2026, the common stock price target fortwo tranches of PSUs issued as part of the Interim CEO Award had been achieved, and the total unrecognized compensation cost related to the Interim CEO Award was $0.1 million, which is expected to be recognized over a weighted average period of 1.3 years.

In July 2026, the Company granted performance-based RSUs (the “2026 PSUs”) under the 2021 Plan to a number of employees. The number of 2026 PSUs that may be earned ranges from 0% to 150% of the target number of units granted, based on the achievement of financial performance targets for the fiscal year ending December 31, 2026. No 2026 PSUs will be earned unless the Company achieves a minimum level of consolidated Adjusted EBITDA for fiscal 2026. Performance results are expected to be certified by the compensation committee of the Company’s board of directors in the first quarter of 2027. One-third of the earned 2026 PSUs will vest on the certification date. The remaining two-thirds will vest in eight equal quarterly installments through March 31, 2029, subject to the holder’s continued service through each vesting date. The grant date fair value of the 2026 PSUs was $11.02 per unit, based on the closing price of the Company’s common stock on the grant date. Compensation cost is recognized based on the number of units expected to be earned, to the extent achievement of the performance conditions is considered probable. The Company reassesses the probable outcome of the performance conditions each reporting period and recognizes the cumulative effect of any change in the period of the change.

A summary of the Company's 2026 PSU activity under the 2021 Plan for thenine months ended September 30, 2026, is as follows:

As of September 30, 2026, the Company determined that achievement of the minimum consolidated Adjusted EBITDA threshold was not probable. Accordingly, no compensation cost has been recognized for the 2026 PSUs. The number of PSUs reflected in the table above reflects PSUs at target. The number of PSUs ultimately earned may range from 0% to 150% of target.

A summary of the Company's time-based RSU activity under the 2021 Plan for thenine months ended September 30, 2026, is as follows:

As of September 30, 2026, there was $5.3 million of total unrecognized compensation cost related to unvested time-based RSUs issued under the 2021 Plan, which is expected to be recognized over a weighted-average period of 1.8 years.

ESPP Purchase Rights

Asix-month offering period for the ESPP ended on May 31, 2026. There were 12,535 shares purchased using ESPP purchase rights with a weighted average purchase price of $8.03.

Equity-Based Compensation Expense

The Company recognizes compensation expense in general and administrative expenses within operating expenses for stock options, time-based RSUs, ESPP purchase rights and time-based incentive units granted prior to the IPO by amortizing the grant date fair value on a straight-line basis over the expected vesting period to the extent the vesting of the grant is considered probable. For the 2026 PSUs, the Company recognizes compensation expense in general and administrative expenses based on the grant date fair value and the number of units expected to be earned, using the graded-vesting attribution method over the requisite service period of each separately vesting tranche, to the extent achievement of the performance conditions is considered probable. The Company reassesses the probability of achievement each reporting period and recognizes the cumulative effect of any change in estimate in the period of the change. The Company recognizes equity-based award forfeitures in the period such forfeitures occur.

The following table summarizes the Company’s equity-based compensation expense by award type for all Plans:

Note 14. Stockholders’ Equity

Preferred Stock

In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 50,000,000 shares of undesignated preferred stock with a par value of $0.001 per share with rights and preferences, including voting rights, designated from time to time by the Company’s board of directors. There wereno shares of preferred stock issued and outstanding as of September 30, 2026.

Common Stock

The Company hasone class of common stock. In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 500,000,000 shares of common stock with a par value of $0.001 per share, withone vote per share. Holders of common stock are entitled to receive any dividends as may be declared from time to time by the Company’s board of directors.

Share Repurchases & Share Forfeitures

On May 25, 2023, the Company's board of directors approved a share repurchase program (the “Share Repurchase Program”). Pursuant to the Share Repurchase Program, the Company was initially authorized to repurchase up to $2.0 million of shares of the Company’s common stock. Subsequently, in 2023, the Company’s board of directors approved an additional repurchase capacity under the Share Repurchase Program of $3.0 million of shares of the Company’s common stock. The timing of any repurchases by the Company and the actual number of shares repurchased are at the Company’s discretion, and, in deciding when to repurchase shares and the amount of shares to repurchase, the Company will consider available liquidity, general market and economic conditions, alternate uses for the capital and other factors. Share repurchases may be made from time to time through a Rule 10b5-1 trading plan, open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. The Share Repurchase Program may be suspended or discontinued at any time and has no expiration date.

Additionally, from time to time, the Company’s employees may surrender shares of the Company’s common stock to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares of common stock issued under the 2021 Plan. With respect to these surrendered shares, the price paid per share is based on the fair value at the time of surrender.

During the three months ended September 30, 2026, the Company repurchased 18,142 shares of its common stock for $0.2 million, at an average price of $11.29 per share, all of which were shares surrendered by employees to satisfy tax obligations upon vesting of equity awards. During the nine months ended September 30, 2026, the Company repurchased 73,727 shares of its common stock for $0.8 million, at an average price of $10.87 per share, all of which were shares surrendered by employees to satisfy tax obligations upon vesting of equity awards. No repurchases were made under the Share Repurchase Program during the three and nine months ended September 30, 2026.

Note 15. Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share and a reconciliation of the weighted average number of shares outstanding:

Basic net income (loss) per share is calculated by dividing net income (loss) for the period by the weighted-average number of shares of common stock for the period. Diluted net income (loss) per share has been calculated in a manner consistent with that of basic net income (loss) per share while giving effect to shares issuable upon exercise and/or vesting of potentially dilutive stock option and RSU grants, as well as ESPP purchase rights, outstanding during the period, if applicable. Due to the net loss for all periods shown, no potentially dilutive securities had an impact on diluted loss per share for any period. For thethree months ended September 30, 2026 and 2025,506,739 and 806,443 shares, respectively, were excluded from the calculation of weighted-average diluted common shares outstanding as they had an anti-dilutive effect. For thenine months ended September 30, 2026 and 2025,476,597 and 545,690 shares, respectively, were excluded from the calculation of weighted-average diluted common shares outstanding as they had an anti-dilutive effect.

Note 16. Commitments and Contingencies

Contingencies

The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses material contingencies when it believes a loss is not probable but reasonably possible. Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Although the Company cannot predict with assurance the outcome of any litigation or tax matters, it does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company’s operating results, financial position or cash flows.

Indemnifications

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters. The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the consolidated financial statements.

Note 17. Segment Information

The Company has determined that itsfour brands are each an operating segment and has aggregated its operating segments intoone reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers and economic characteristics. The Chief Executive Officer of the Company is the CODM. The CODM uses both gross margin and Adjusted EBITDA as measures of profit or loss to evaluate performance and allocate resources. Gross margin is disclosed below as the segment profit measure as it is most consistent with the amounts included in the Company’s consolidated financial statements. See Note 3, “Inventory,” and Note 4, “Prepaid Expenses and Other Current Assets,” for discussion of inventory write-offs and tariff receivables impacting gross margin.

The follo wing table sets forth gross margin for the periods shown:

Note 18. Subsequent Events

The Company has evaluated subsequent events occurring through the date that these financial statements were issued, and determined the following subsequent event occurred that would require disclosure in these financial statements.

Revolving Line of Credit

On October 2, 2026, the Company borrowed $1.0 million under the revolving line of credit, which is part of the Company’s Amended and Restated Credit Agreement. The initial applicable interest rate for the borrowings is 7.84% and final payoff is due on October 14, 2028.

On October 23, 2026, the Company borrowed $1.0 million under the revolving line of credit, which is part of the Company’s Amended and Restated Credit Agreement. The initial applicable interest rate for the borrowings is 7.70% and final payoff is due on October 14, 2028.