FIGS, Inc.

Previous wording

If we experience problems with our distribution center’s operational infrastructure, our ability to meet customer expectations, manage inventory, complete sales, ship products and achieve objectives for operating efficiencies could be harmed.

Current wording

If we experience problems with our fulfillment center’s operational infrastructure, our ability to meet customer expectations, manage inventory, complete sales, ship products and achieve objectives for operating efficiencies could be harmed.

Previous wording

Our supply chain consists of a diversified network of global production partners spread across multiple continents. We source the vast majority of the fabrics used in our products from a limited number of suppliers in China, and we source the other raw materials and product components used in our products from suppliers located predominantly in the Asia Pacific region. We then work with manufacturing partners to produce our products in facilities located in Southeast Asia, the Middle East, China and South America. During the quarter ended June 30, 2026, approximately 60% of our finished goods were produced by suppliers in Vietnam and approximately one-third by our Jordanian manufacturing partner. Limited production also occurred in China and other countries. As a result of the WRO issued by CBP on June 23, 2026 against certain garments produced by our Jordanian manufacturing partner, our products produced by this partner may not currently be imported into the United States, and we may ultimately be unable or choose not to sell recently finished product from this partner. We have instituted various strategies to mitigate the impact of the WRO, including transitioning raw materials and future production to our other manufacturing partners, although doing so may increase risks associated with our reliance on a limited number of third party suppliers. Overall, we expect the WRO will adversely impact our net revenues, gross margin, and inventory levels in the second half of 2026.

Current wording

Our supply chain consists of a diversified network of global production partners spread across multiple continents. We source the vast majority of the fabrics used in our products from a limited number of suppliers in China, and we source the other raw materials and product components used in our products from suppliers located predominantly in the Asia Pacific region. We then work with manufacturing partners to produce our products in facilities located in Southeast Asia, the Middle East, China and South America. In addition, as part of our overall supply chain strategy, we also continuously work to strengthen our sourcing and manufacturing capabilities, which from time to time includes diversifying manufacturing operations geographically and strategically refining our manufacturing base into high-quality manufacturing partners to improve product quality and consistency. During the quarter ended September 30, 2026, the vast majority of our finished goods were produced by suppliers in Vietnam. Limited production also occurred in China and other countries.

Previous wording

The United States has announced and implemented changes to U.S. trade policy in recent years, including increasing tariffs on imports, in some cases significantly, and potentially modifying or terminating existing trade agreements, which, in certain instances, has prompted retaliatory trade measures by other countries. These measures have increased our product costs. The changes to U.S. trade policy and the tariff environment have also been dynamic, unpredictable and subject to ongoing modification. For example, in April 2025, the United States announced a new universal baseline tariff of 10% on all U.S. imports, plus additional country-specific tariffs applicable to certain trading partners. Since that announcement, tariff rates and effective dates have been adjusted on several occasions. In February 2026, the United States Supreme Court ruled that the use of the International Emergency Economic Powers Act (“IEEPA”) to impose tariffs was not permitted, invalidating a significant portion of tariffs that had been in effect since April 2025. While the ruling struck down the IEEPA-based tariffs, it did not address the Administration’s ability to impose tariffs using other mechanisms. The Administration responded by invoking a 10.0% global tariff pursuant to Section 122 of the Trade Act of 1974 (the “Trade Act”), effective on February 24, 2026, which expired on July 24, 2026. On July 23, 2026, the Administration imposed new tariffs ranging from 10.0%-12.5% pursuant to Section 301 of the Trade Act, effective July 24, 2026. These tariffs are intended to replace the Section 122 tariffs and affect imports from approximately 60 countries and territories, including those where our suppliers are located. As of the date hereof, goods manufactured in Vietnam and Jordan are subject to tariff rates of 12.5% and 10.0%, respectively.

Current wording

The United States has announced and implemented changes to U.S. trade policy in recent years, including increasing tariffs on imports, in some cases significantly, and potentially modifying or terminating existing trade agreements, which, in certain instances, has prompted retaliatory trade measures by other countries. These measures have increased our product costs. The changes to U.S. trade policy have also been dynamic, unpredictable and subject to ongoing modification. For example, in April 2025, the United States announced a new universal baseline tariff of 10% on all U.S. imports, plus additional country-specific tariffs applicable to certain trading partners. Since that announcement, tariff rates and effective dates have been adjusted on several occasions. In February 2026, the United States Supreme Court ruled that the use of the International Emergency Economic Powers Act (“IEEPA”) to impose tariffs was not permitted, invalidating a significant portion of tariffs that had been in effect since early 2025. The Administration responded by invoking a 10.0% global tariff pursuant to Section 122 of the Trade Act of 1974 (the “Trade Act”), effective on February 24, 2026, which expired on July 24, 2026, and new tariffs ranging from 10.0% to 12.5% pursuant to Section 301 of the Trade Act, effective July 24, 2026. These new tariffs affect imports from approximately 60 countries and territories, including those where our suppliers are located. As of the date hereof, goods manufactured in Vietnam are subject to a tariff rate of 12.5%.

Previous wording

The ruling, and the Administration’s subsequent actions, have created substantial uncertainty regarding the tariff environment, including with respect to (i) the scope and duration of the new tariffs imposed under Section 301 and any new or higher tariffs that may be imposed and (ii) the outcome of pending legal challenges to the Section 122 tariffs and the potential for further legal challenges to those, the Section 301 tariffs and any future tariffs. Any prolonged uncertainty or volatility in tariff policy could disrupt our supply chain planning, increase our costs and adversely affect our ability to price our products competitively. Moreover, tariffs and other trade barriers, including those imposed by other countries on the United States, could adversely impact demand for our products domestically and in international markets, which in turn could adversely affect our inventory levels. Given that substantially all of our products are currently manufactured outside of the United States, additional trade actions by the United States or other countries could further increase our product costs and harm our business, financial condition and results of operations.

Current wording

The ruling, and the Administration’s subsequent actions, have created substantial uncertainty, including with respect to (i) the scope and duration of the new tariffs imposed under Section 301 and any new or higher tariffs that may be imposed and (ii) the outcome of pending legal challenges to the Section 122 and Section 301 tariffs and the potential for further legal challenges to those and any future tariffs. Any prolonged uncertainty or volatility in tariff policy could disrupt our supply chain planning, increase our costs and adversely affect our ability to price our products competitively. Moreover, tariffs and other trade barriers, including those imposed by other countries on the United States, could adversely impact demand for our products domestically and in international markets, which in turn could adversely affect our inventory levels. Given that substantially all of our products are currently manufactured outside of the United States, additional trade actions by the United States or other countries could further increase our product costs and harm our business, financial condition and results of operations.

Previous wording

We have implemented, and plan to continue to implement as needed, various mitigation strategies in response to the sustained elevated U.S. tariff levels, which have included, and may in the future again include, adjusting the countries from which we source our products and renegotiating terms with suppliers, but we cannot be certain how effective these measures will be over the long term. We have also increased prices on certain products, which could reduce the competitiveness of our products and adversely affect demand. If we fail to manage these dynamics successfully, net revenues, gross margin and profitability could be adversely affected.

Current wording

We have implemented, and plan to continue to implement as needed, various mitigation strategies in response to the sustained elevated U.S. tariff levels, which have included, and may in the future again include, adjusting the countries from which we source our products and renegotiating terms with suppliers, but we cannot be certain how effective these measures will be over the long term. These efforts may lead, and from time to time have led, to additional risks and costs, which may adversely impact our results of operations in the short term. We have also increased prices on certain products, which could reduce the competitiveness of our products and adversely affect demand. If we fail to manage these dynamics successfully, net revenues, gross margin and profitability could be adversely affected.

Previous wording

Moreover, our products are also subject to importation-related regulations, including those enforced by CBP, such as WROs. For example, on June 23, 2026, CBP issued a WRO against certain garments produced by our Jordanian manufacturing partner. As a result of the WRO, our products produced by this partner may not currently be imported into the United States, and we may ultimately be unable or choose not to sell recently finished product from this partner. We have instituted various strategies to mitigate the impact of the WRO, including transitioning raw materials and future production to our other manufacturing partners. Overall, we expect the WRO to adversely impact our net revenues, gross margin, and inventory levels in the second half of 2026. Future WROs could cause material delays and further unexpectedly affect our business, financial condition and results of operations.

Current wording

Moreover, our products are also subject to importation-related regulations, including those enforced by CBP, such as WROs. For example, on June 23, 2026, CBP issued a WRO against certain garments produced by our Jordanian manufacturing partner. As a result of the WRO, our products produced by this partner may not currently be imported into the United States, and we may ultimately be unable or choose not to sell recently finished product from this partner. We have instituted various strategies to mitigate the impact of the WRO, including transitioning raw materials and production to our other manufacturing partners. The WRO adversely impacted net revenues, costs and inventory levels for the three months ended September 30, 2026, and we expect the WRO will continue to adversely impact net revenues, costs and inventory levels for at least the remainder of the year ending December 31, 2026. Future WROs could cause material delays and further unexpectedly affect our business, financial condition and results of operations.

Previous wording

We are committed to supporting our communities around the globe. Operating with compassion and integrity is core to our values, which makes our reputation sensitive to allegations of unethical or improper business practices, whether real or perceived. The failure, or alleged failure, of any of our suppliers or manufacturers to provide safe and humane factory conditions and oversight at their facilities could damage our reputation and brand, result in legal claims against us, subject our goods to detention or exclusion, or cause us to seek alternate suppliers or manufacturers, which could affect our business, financial condition and results of operations. For example, previously there were allegations relating to the working conditions at our Jordanian manufacturing partner. On June 23, 2026, CBP issued a WRO against certain garments produced by that partner. As a result of the WRO, our products produced by this partner may not currently be imported into the United States, and we may ultimately be unable or choose not to sell recently finished product from this partner. We have instituted various strategies to mitigate the impact of the WRO, including transitioning raw materials and future production to our other manufacturing partners, although doing so may increase risks associated with our reliance on a limited number of third party suppliers. These developments have subjected us, and may continue to subject us, to additional costs and challenges, including supply chain disruption, and increased sourcing and logistics costs, which we expect to adversely affect our net revenues, gross margin and inventory levels in the second half of 2026.

Current wording

We are committed to supporting our communities around the globe. Operating with compassion and integrity is core to our values, which makes our reputation sensitive to allegations of unethical or improper business practices, whether real or perceived. The failure, or alleged failure, of any of our suppliers or manufacturers to provide safe and humane factory conditions and oversight at their facilities could damage our reputation and brand, result in legal claims against us, subject our goods to detention or exclusion, or cause us to seek alternate suppliers or manufacturers, which could affect our business, financial condition and results of operations. For example, previously there were allegations relating to the working conditions at our Jordanian manufacturing partner. On June 23, 2026, CBP issued a WRO against certain garments produced by that partner. As a result of the WRO, our products produced by this partner may not currently be imported into the United States, and we may ultimately be unable or choose not to sell recently finished product from this partner. We have instituted various strategies to mitigate the impact of the WRO, including transitioning raw materials and production to our other manufacturing partners, although doing so may increase risks associated with our reliance on a limited number of third-party suppliers. These developments have subjected us, and may continue to subject us, to additional costs and challenges, including supply chain disruption, and increased sourcing and logistics costs, which we expect to continue to adversely affect our net revenues, costs and inventory levels for at least the remainder of the year ending December 31, 2026.

Previous wording

We do not control our suppliers and manufacturers or their business, and they may not comply with our guidelines or applicable law. Moreover, while we rely on our manufacturers’ and suppliers’ compliance reporting as well as contractual provisions in our vendor manual in order to comply with regulations applicable to our products, expectations of ethical business practices continually evolve and may be substantially more demanding than applicable legal requirements. The products we sell are also subject to regulation by the Federal Consumer Product Safety Commission, the Federal Trade Commission and similar state and international regulatory authorities. Product safety, labeling and licensing concerns may require us to voluntarily remove selected merchandise from our inventory. Such recalls or voluntary removal of merchandise can result in, among other things, lost sales, diverted resources, potential harm to our reputation and increased customer service costs and legal expenses, which could adversely affect our results of operations. Moreover, failure of our suppliers or manufacturers to comply with applicable laws and regulations and contractual requirements could lead to litigation against us or cause us to seek other vendors, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations.

Current wording

Commission and similar state and international regulatory authorities. Product safety, labeling and licensing concerns may require us to voluntarily remove selected merchandise from our inventory. Such recalls or voluntary removal of merchandise can result in, among other things, lost sales, diverted resources, potential harm to our reputation and increased customer service costs and legal expenses, which could adversely affect our results of operations. Moreover, failure of our suppliers or manufacturers to comply with applicable laws and regulations and contractual requirements could lead to litigation against us or cause us to seek other vendors, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations.

Previous wording

U.S. imports of any items from Xinjiang and specifically targets the cotton and apparel industry as high-priority sectors for enforcement. We do not intentionally source any products or materials from the Xinjiang region (either directly or indirectly through our supply chain) and we prohibit our suppliers and manufacturers from doing business with or sourcing from any company or entity located in China’s Xinjiang region. However, the presumptive ban on virtually all imports from that region has from time to time affected and could in the future affect the global sourcing and availability of raw materials, such as cotton and rayon, used in the manufacturing of certain of our products and/or lead to our products being held for inspection by CBP and delayed, which has occurred from time to time, or rejected for entry into the United States, which could unexpectedly affect our inventory levels, result in other supply chain disruptions, or cause us to be subject to penalties, fines or sanctions. Even if we were not subject to penalties, fines or sanctions, if products we source are linked in any way to the Xinjiang region, our reputation could be harmed. If our vendors are unable to obtain raw materials or finished goods from the countries where we or they wish to purchase them, either because of such regulatory changes or for any other reason, or if the cost of doing so should increase, or any new restrictions imposed on U.S. companies that do business in China or other changes that lead to restrictions on our ability to do business in China, including near-term changes in global trade policy and additional tariffs or future trade barriers our business, financial condition and results of operations could be adversely affected.

Current wording

Certain legacy trade restrictions related to the Xinjiang region of China could also impact our business. The U.S. Government has taken several steps to address forced labor concerns in the Xinjiang Uyghur Autonomous Region of China, including sanctions on specific entities and individuals; WROs issued by CBP that prohibit the entry of imports of certain items from Xinjiang; and the Uyghur Forced Labor Prevention Act, which imposes a rebuttable presumption against U.S. imports of any items from Xinjiang and specifically targets the cotton and apparel industry as high-priority sectors for enforcement. We do not intentionally source any products or materials from the Xinjiang region (either directly or indirectly through our supply chain) and we prohibit our suppliers and manufacturers from doing business with or sourcing from any company or entity located in China’s Xinjiang region. However, the presumptive ban on virtually all imports from that region has from time to time affected and could in the future affect the global sourcing and availability of raw materials, such as cotton and rayon, used in the manufacturing of certain of our products and/or lead to our products being held for inspection by CBP and delayed, which has occurred from time to time, or rejected for entry into the United States, which could unexpectedly affect our inventory levels, result in other supply chain disruptions, or cause us to be subject to penalties, fines or sanctions. Even if we were not subject to penalties, fines or sanctions, if products we source are linked in any way to the Xinjiang region, our reputation could be harmed. If our vendors are unable to obtain raw materials or finished goods from the countries where we or they wish to purchase them, either because of such regulatory changes or for any other reason, or if the cost of doing so should increase, or any new restrictions imposed on U.S. companies that do business in China or other changes that lead to restrictions on our ability to do business in China, including near-term changes in global trade policy and additional tariffs or future trade barriers our business, financial condition and results of operations could be adversely affected.

Previous wording

In addition, many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to data privacy, data security, and data breaches. For example, California enacted the CCPA, which gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as statutory damages and a private right of action for data breaches that is expected to increase data breach litigation. The enactment of the CCPA has prompted other states to enact similar bills. For example, Virginia, Colorado, Oregon, Texas, Montana, Iowa, Utah and Connecticut also maintain comprehensive privacy laws, and several other states have passed comprehensive privacy laws that will take effect over the next few years. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. We will be required to comply with these new privacy laws if our operations fall within their scope, which may increase our compliance costs and potential liability and may require us to make changes to our business practices.

Current wording

In addition, many state legislatures have adopted legislation that regulates how we operate online, including measures relating to data privacy, data security, and data breaches. For example, California enacted the CCPA, which imposes obligations on businesses that process personal information of California residents. Among other things, the CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used. The CCPA also requires periodic cybersecurity audits and risk assessments, and provides for civil penalties for violations, as well as statutory damages and a private right of action for data breaches that is expected to increase data breach litigation. The enactment of the CCPA has prompted other states to enact similar bills. For example, Virginia, Colorado, Oregon, Texas, Montana, Iowa, Utah and Connecticut also maintain comprehensive privacy laws, and several other states have passed comprehensive privacy laws that will take effect over the next few years. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. We will be required to comply with these new privacy laws if our operations fall within their scope, which may increase our compliance costs and potential liability and may require us to make changes to our business practices.

Previous wording

In the past, following periods of volatility, stockholders have sometimes instituted securities class action litigation against companies, and such litigation has been filed against us as well. This or future litigation against us could result in substantial costs, divert management’s attention and resources, and harm our business, financial condition and results of operations.

Current wording

In the past, following periods of volatility, stockholders have sometimes instituted securities class action litigation against companies, and such litigation has been filed against us as well. Future litigation against us could result in substantial costs, divert management’s attention and resources, and harm our business, financial condition and results of operations.

Previous wording

•the timing and success of new products launches;

Current wording

•the timing and success of new product launches;

Previous wording

We cannot predict whether our dual-class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with dual-class or multi-class share structures in certain of their indices. In July 2017 to April 2023, S&P Dow Jones excluded companies with multiple share classes from the S&P Composite 1500 (composed of the S&P 500, S&P MidCap 400 and S&P SmallCap 600). Indices have discretion to reassess and implement such policies with respect to multi-class differing voting right structures. Under any such policies, our multi-class capital structure would make us ineligible for inclusion in any of these indices. As a result, the market price of our Class A common stock could be adversely affected.

Current wording

We cannot predict whether our dual-class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with dual-class or multi-class share structures in certain of their indices. From July 2017 to April 2023, S&P Dow Jones excluded companies with multiple share classes from the S&P Composite 1500 (composed of the S&P 500, S&P MidCap 400 and S&P SmallCap 600). Indices have discretion to reassess and implement such policies with respect to multi-class differing voting right structures. Under any such policies, our multi-class capital structure would make us ineligible for inclusion in any of these indices. As a result, the market price of our Class A common stock could be adversely affected.

Previous wording

In August 2024, our board of directors authorized a share repurchase program to repurchase up to $50.0 million of our outstanding Class A common stock, with no expiration date. On February 27, 2025, our board of directors authorized an increase of $50.0 million to the share repurchase program, and on August 6, 2026, our board of directors authorized an additional increase of $100.0 million to the share repurchase program, bringing the total authorization for repurchases under the program to up to $200.0 million of our outstanding Class A common stock. As of the date hereof, we have approximately $119.2 million available for future repurchases of our Class A common stock under the share repurchase program.

Current wording

In August 2024, our board of directors authorized a share repurchase program to repurchase up to $50.0 million of our outstanding Class A common stock, with no expiration date. On February 27, 2025, our board of directors authorized an increase of $50.0 million to the share repurchase program, and on August 6, 2026, our board of directors authorized an additional increase of $100.0 million to the share repurchase program, bringing the total authorization for repurchases under the program to up to $200.0 million of our outstanding Class A common stock. As of September 30, 2026, we had approximately $105.3 million available for future repurchases of our Class A common stock under the share repurchase program.