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 sold to retailers, distributors, and direct to consumers. The Company produces and sells the pellets used to fire the grills and also sells Traeger-branded rubs, spices, and sauces, as well as grill accessories (including P.A.L. Pop-And-Lock accessory rails, covers, barbecue tools, trays, liners, MEATER smart thermometers and merchandise). 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.

Traeger, Inc. has no material assets and liabilities or standalone operations other than its ownership in its consolidated subsidiaries. TGPX Holdings II LLC is the only direct subsidiary of Traeger, Inc. TGPX Holdings II LLC is a holding company with no other operations, cash flows, material assets or liabilities other than the equity interest in TGP Holdings III LLC.

Reverse Stock Split – On March 17, 2026, following approval by the Company’s stockholders and Board of Directors, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s common stock at a ratio of 1-for-50 (the “Reverse Stock Split”), effective as of 5:00 p.m. Eastern Time (the “Effective Time”). The Company’s common stock began trading on the New York Stock Exchange on a split-adjusted basis at the opening of the market on March 18, 2026 under the same trading symbol “COOK.” The Reverse Stock Split did not affect the number of authorized shares of common stock, the par value per share, or any other terms of the common stock.

As a result of the Reverse Stock Split, at the Effective Time, every 50 shares of the Company’s issued and outstanding common stock were automatically converted into one validly issued, fully paid and non-assessable share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Holders who otherwise would have been entitled to receive a fractional share received a cash payment in lieu thereof.

All share, per share, and equity award amounts in the accompanying unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented.

Basis of Presentation and Principles of Consolidation –The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 6, 2026 (the “Annual Report on Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the consolidated financial position, results of operations and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of results that may be expected for any other interim period or for the year ended December 31, 2026.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

There have been no significant changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2026, as compared with those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 6, 2026.

Emerging Growth Company Status – The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with the adoption of new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company will remain an emerging growth company until December 31, 2026.

2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates –The preparation of these 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates and the assumptions made by management that present the greatest amount of estimation uncertainty include customer credits and returns, obsolete inventory reserves, valuation of cash- or stock-settled restricted stock units, valuation and impairment of intangible assets and reserves for warranty. Actual results could differ from these estimates.

Concentrations –Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash in banks, trade accounts receivable, foreign currency contracts, and business activity with certain third-party contract manufacturers of the Company’s products. 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. Two customers (each a large U.S. retailer) that accounted for a significant portion of net sales are as follows:

Concentrations of credit risk exist to the extent credit terms are extended with four customers that account for a significant portion of the Company’s trade accounts receivables. As of September 30, 2026, there were four customers A, B, C and D that accounted for 33%,15%,9%, and 10% of the Company's trade accounts receivables as compared to 38%,15%,16%, and 0% as of December 31, 2025, respectively. 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 trade accounts receivable as of September 30, 2026 or December 31, 2025. Additionally, no other single customer accounted for greater than 10% of the Company’s net sales for the three and nine months ended September 30, 2026 and 2025, respectively.

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 located in China, Taiwan, and Vietnam for the contract manufacturing of its grills and accessories. The majority of the Company’s purchases from these suppliers are denominated in Chinese yuan renminbi. 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.

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 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.

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. 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. During the three months ended September 30, 2025, the Company performed a quantitative impairment test and determined that the carrying value of the reporting unit was in excess of its fair value and recorded a non-cash impairment charge of $74.7 million for the three and nine months ended September 30, 2025, which fully impaired the Company’s goodwill. The Company had no goodwill as of September 30, 2026 or December 31, 2025. For details associated with the Company’s interim goodwill impairment, see Note 7 –Goodwill.

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 three months ended September 30, 2026, the Company recordedno receipts, compared to $1.0 million for the three months ended September 30, 2025. For the nine months ended September 30, 2026 and 2025, the Company recorded total receipts of $11.6 million and $6.0 million, respectively. These amounts were recorded within other income, net in the accompanying condensed consolidated statements of operations and comprehensive loss.

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.

In November 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments in this update clarify interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. This update is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

3 –REVENUE

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

4 –ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following (in thousands):

5 –INVENTORIES

Inventories consisted of the following (in thousands):

6 –ACCRUED EXPENSES

Accrued expenses consisted of the following (in thousands):

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

7 –GOODWILL

In connection with the preparation of the condensed consolidated financial statements for the three and nine months ended September 30, 2025, the Company conducted additional testing of its goodwill and long-lived assets. As a result of this review, 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. However, the Company did identify indicators of goodwill impairment for the single reporting unit and concluded that due to a sustained decrease of the Company’s stock price, a triggering event had occurred and therefore the Company performed a quantitative impairment test.

In performing the quantitative assessment of goodwill, the Company estimated the reporting unit’s fair value based upon a weighted 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.

As a result of the interim quantitative impairment assessment, the carrying value of the single reporting unit exceeded its fair value after consideration of a control premium, and the Company recorded $74.7 million non-cash goodwill impairment for the three and nine months ended September 30, 2025. The Company had no goodwill as of September 30, 2026 or December 31, 2025.

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 provided 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 was expected to be highly effective.

In January 2023, the Company dedesignated its hedging relationship. At the time of dedesignation the total amount recorded in accumulated other comprehensive income (loss) was $21.3 million and as of February 28, 2026, this amount was fully amortized into earnings as a reduction of interest expense over the term of the previously hedged interest payments.

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 September 30, 2026 and December 31, 2025. The Company did not elect hedge accounting for any of these contracts. 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 condensed consolidated balance sheets and for periods where the net position is a liability balance, the balance is recorded within other current liabilities in the accompanying condensed consolidated balance sheets. Changes in the net fair value of contracts are recorded within other income, net in the accompanying condensed 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 in other income, net within the accompanying condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

9 –FAIR VALUE MEASUREMENTS

For financial assets and liabilities recorded at fair value on a recurring or 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 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 condensed 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. As of September 30, 2026 and December 31, 2025, 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 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 measured at fair value on a non-recurring basis are subject to fair value adjustments only in certain circumstances. These assets can include goodwill that is written down to fair value when it is impaired, which uses Level 3 inputs. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. As of September 30, 2025, 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 the three and nine months ended September 30, 2025. The Company had no goodwill as of September 30, 2026 or December 31, 2025. For details associated with the Company's interim goodwill impairment, see Note 7 –Goodwill.

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

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

10 –DEBT AND FINANCING ARRANGEMENTS

Notes Payable

On June 29, 2021, the Company refinanced its existing credit facilities and entered into the First Lien Credit Agreement. The First Lien Credit Agreement originally provided for a $560.0 million senior secured term loan facility (the “First Lien Term Loan Facility”), including a $50.0 million delayed draw term loan, and a $125.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the First Lien Term Loan Facility, the “Credit Facilities”).

The First Lien Term Loan Facility accrues interest at Term SOFR plus a fixed spread ranging 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 First Lien Term Loan Facility requires quarterly principal payments from December 2021 through June 2028, with any remaining unpaid principal and accrued interest due on the maturity date of June 29, 2028. As of September 30, 2026 and December 31, 2025, the total principal amount outstanding on the First Lien Term Loan Facility was $403.1 million and $403.3 million, respectively.

On August 5, 2025, the Company amended the First Lien Credit Agreement (the “Amendment”) to reduce the overall size of the Revolving Credit Facility from $125.0 million to $112.5 million and split it into two tranches: a $30.0 million tranche which expired on June 29, 2026 and an $82.5 million tranche expiring on December 29, 2027 (the “Extended Revolving Facility”). Loans under the Extended Revolving Facility accrue interest at Term SOFR plus a fixed spread ranging from 2.75% to 3.25% per annum, with a commitment fee of 0.25% to 0.50% per annum on undrawn amounts, each based on the Company's First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). Letters of credit may be issued under the Extended Revolving Facility in an amount not to exceed $11.4 million which, when issued, lower the overall borrowing capacity of the facility. No payment of outstanding principal amounts under either tranche is due prior to the respective expiration date of each tranche. As of September 30, 2026 and December 31, 2025, the Company hadno outstanding loan amounts under the Extended Revolving Facility.

Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, TCP Traeger Blocker, LP, 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. The assets of Traeger SPE LLC (the “SPE”), substantively consisting of our 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. 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. 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. 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 September 30, 2026, the Company was in compliance with the covenants under the Credit Facilities.

Accounts Receivable Credit Facility

On November 2, 2020, the Company entered into a receivables financing agreement (as amended, 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”), using outstanding accounts receivable balances as collateral, which have been contributed by the Company to its wholly owned subsidiary and special purpose entity, Traeger SPE LLC (the “SPE”). While the Company provides operational services to the SPE, 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 September 30, 2026.

As of September 30, 2026 and December 31, 2025, the Company hadno outstanding loan amounts under the Receivables Financing Agreement.

11 –COMMITMENTS AND CONTINGENCIES

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 April 2026, U.S. Customs and Border Protection (“U.S. Customs”) issued the Company a proposed Notice of Action asserting that certain drip tray and bucket liners sourced from China are subject to antidumping and countervailing duty orders.

The Company has responded to this proposed Notice of Action and has initiated formal proceedings before the U.S. Department of Commerce to seek a scope ruling on the applicable orders. The Company establishes accruals when a particular contingency is probable and reasonably estimable. As of September 30, 2026, the Company has not recorded an accrual because management concluded that a loss is not probable and the amount, or range of amounts, is not reasonably estimable.

12 –STOCK-BASED COMPENSATION

On July 28, 2021, the Traeger, Inc. 2021 Incentive Award Plan (the “2021 Plan”) became effective. 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.

The Company grants time-based restricted stock units (“RSUs”) and time-based restricted stock awards (“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 2025, the Company granted performance-based restricted stock units (“PSUs”) and performance-based restricted stock (“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 grant date fair values of the PSUs and Performance Shares were estimated using a Monte Carlo pricing model, using various simulations of future stock prices through a stochastic model over the remaining term of the performance period.

In 2026, the Company granted time-based restricted stock units to certain employees thatmay be settled in cash or shares at the discretion of the Company's Board of Directors or the Compensation Committee (“Cash- or Stock-Settled RSUs”). The Cash- or Stock-Settled RSUs vest over athree-year period, with one-third of the awards vesting on the first, second and third anniversaries of the vesting commencement date subject to continued employment with the Company and its affiliates. The value of a vesting tranche on any given vesting date is subject to a pre-determined per-share settlement cap and floor. If the fair market value of a share at time of vesting is greater than the per-share cap, the Company will make no incremental payment in excess of the cap and the amount paid to the employee will be equal to the cap value. If the fair market value of a share at time of vesting is less than the per-share floor, then the Company will make an additional payment such that the value of the vesting share and the additional payment is equal to the per-share floor. As of September 30, 2026, the Company intends to settle these awards in cash and, accordingly, has classified them as liability awards under ASC 718.

For Cash- or Stock-Settled RSUs, the compensation expense is recognized on an accelerated basis over the requisite service period. The Cash- or Stock-Settled RSUs are classified as liabilities and are remeasured at fair value each reporting period until settlement using a Black-Scholes-Merton valuation model. As a result, the compensation expense related to the Cash- or Stock-Settled RSUs could increase or decrease based on changes in the Company’s stock price, expected volatility, and changes to other valuation assumptions.

The Company’s policy is to recognize forfeitures as they occur. Accordingly, when an equity or liability 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 nine months ended September 30, 2026 was as follows:

As of September 30, 2026, the Company had $4.2 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 1.43 years.

A summary of the PSU and Performance Share activity during the nine months ended September 30, 2026 was as follows:

As of September 30, 2026, the Company had $1.8 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 1.57 years.

A summary of the Cash- or Stock-Settled RSU liability award activity during the nine months ended September 30, 2026 was as follows:

As of September 30, 2026, the Company had $8.9 million of unrecognized stock-based compensation expense related to unvested Cash- or Stock-Settled RSUs that are expected to be recognized over a weighted-average period of 2.58 years. As of September 30, 2026, the Company recorded$2.3 million and$1.5 million of current and non-current Cash- or Stock-Settled RSU liabilities within accrued expenses and other non-current liabilities, respectively, in the accompanying condensed consolidated balance sheets.

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

13 –INCOME TAXES

For the three months ended September 30, 2026 and 2025, the Company recorded an income tax provision and benefit of $1.0 million and $0.3 million, respectively. For the nine months ended September 30, 2026 and 2025, the Company recorded income tax benefits of $0.2 million and $2.3 million, respectively.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. As of September 30, 2026, the Company's U.S. operations have resulted in losses, and as such, the Company maintains a valuation allowance against substantially all its U.S. deferred tax assets.

14 –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. For the three months ended September 30, 2026 and 2025, the Company recorded expenses associated with such services of$0.9 million and $0.8 million, respectively. For the nine months ended September 30, 2026 and 2025, the Company recorded expenses associated with such services of$2.4 million and $2.9 million, respectively. Amounts payable to the third party as of September 30, 2026 and December 31, 2025 were$0.5 million and $0.7 million, respectively.

15 –NET LOSS PER SHARE

The Company computes basic earnings (loss) per share (“EPS”) attributable to common stockholders by dividing net 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 earnings (loss) per share because the effect was anti-dilutive for the fiscal periods indicated:

16 –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”).

As a result of these initiatives, the Company recorded restructuring and other costs of$1.7 million and $6.2 million for the three months ended September 30, 2026 and 2025, respectively, and $6.4 million and$9.7 million for the nine months ended September 30, 2026 and 2025, respectively. These costs were primarily related to consulting fees and severance and other personnel costs recorded within restructuring and other costs in the accompanying condensed consolidated statements of operations and comprehensive loss. Project Gravity, in its entirety, is expected to be substantially completed by the end of fiscal year 2026. 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 presents a roll-forward of restructuring-related liabilities recorded within accrued expenses in the accompanying condensed consolidated balance sheets (in thousands):

17 –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 (gross profit divided by revenue), 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 condensed 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 condensed 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 condensed 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, and 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 condensed consolidated statements of operations and comprehensive loss.