Reformation Inc.

Notes to the Condensed Consolidated Financial Statements (unaudited)

1. Organization and Nature of Business

Reformation Inc. (formerly known as REF Topco, Inc.) is a Delaware corporation headquartered in Los Angeles, California. On April 11, 2025, REF Topco, Inc. changed its legal entity name to Reformation Inc. Reformation Inc. and its subsidiaries (collectively, the “Company”) sell apparel and accessories direct to customers through its website and company-owned retail stores located in the United States and internationally, as well as through wholesale and other channels. The Company’s mission is to bring sustainable fashion to everyone by minimizing its environmental impact through the sourcing of sustainable fabrics and vintage garments and incorporating sustainable practices throughout its supply chain and broader operations.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated interim financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) as set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim reporting (“ASC 270”) and in accordance with Article 10 of Regulation S-X. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP, can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual audited 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 the Company’s financial position as of September 26, 2026 and December 27, 2025, the Company’s results of operations for the 13 and 39 weeks ended September 26, 2026 and the corresponding periods in 2025, and the Company’s cash flows for the 39 weeks ended September 26, 2026 and September 27, 2025. The financial information as of December 27, 2025, is derived from the Company’s audited consolidated financial statements and related notes for the fiscal year ended December 27, 2025. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 26, 2026, or for any other interim period or for any other future year. All intercompany balances and transactions are eliminated in consolidation.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the year ended December 27, 2025, included in the Company’s final prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Company’s initial public offering (“IPO”), on July 30, 2026 (the “IPO Prospectus”).

On July 31, 2026, the Company completed the IPO, pursuant to which the Company issued and sold 9,478,821 shares of common stock, and the selling stockholders sold an aggregate of 4,583,679 shares of common stock at a price per share of $15.00. The Company received aggregate proceeds of approximately $132.2 million from the IPO, after deducting underwriting discounts of $10.0 million. On September 1, 2026, an additional 229,546 shares of common stock were sold by the selling stockholders pursuant to the underwriters’ partial exercise of their option to purchase additional shares. The Company did not receive any proceeds from the sales of the shares by the selling stockholders. Upon the completion of the IPO, the Company’s authorized capital stock consists of 500,000,000 shares of common stock, $0.0001 par value per share and 10,000,000 shares of preferred stock, $0.0001 par value per share.

Following the IPO, the Company used $110.0 million of the net proceeds for the partial repayment of term loans under the Credit Agreement and $8.5 million to repurchase shares of common stock and outstanding stock options from certain existing stockholders and employees. The remaining proceeds will be used to pay for expenses associated with the IPO and for general corporate purposes.

Emerging Growth Company Status

The Company qualifies as an “emerging growth company” (“EGC”) as defined in Section 2(a)(19) of the Securities Act. As a result, the Company is permitted to, and intends to, rely on exemptions from certain disclosure requirements that apply to other public companies that are not EGCs. Among other exemptions, for so long as the Company is an EGC, the Company is not required to have its internal control over financial reporting audited by its independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act, to disclose certain executive compensation-related items, or to submit certain executive compensation matters to stockholder advisory votes.

In addition, under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), an EGC can delay the adoption of new or revised accounting standards until such time as those standards apply to private companies. The Company has elected to use this extended transition period and, as a result, is not required to adopt new or revised accounting standards on the dates on which adoption is required for other public companies. Accordingly, the Company’s condensed consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting standards as of public company effective dates.

Fiscal Year End

The Company operates on a 52/53-week fiscal year convention whereby its fiscal year ends on the last Saturday in December of each year. Each fiscal quarter consists of 13 weeks, except for fiscal years with 53 weeks. Fiscal 2026 will end on December 26, 2026 and will be a 52-week year. Fiscal 2025 was a 52-week year and ended on December 27, 2025.

Seasonality

The Company’s business does not exhibit the same seasonal patterns as traditional retailers, which typically generate a significant portion of net revenue in the holiday quarter. Historically, the Company has experienced increased net revenue in the second fiscal quarter compared to the first fiscal quarter due to higher spring and summer sales. The third fiscal quarter typically sees a moderate increase in net revenue relative to the second fiscal quarter, given the timing of one of the Company’s twice-yearly promotional events beginning in August. The fourth fiscal quarter is typically similar in net revenue compared to the third fiscal quarter due to our Black Friday Cyber Monday promotion. The Company expects this seasonality to continue in future years, subject to the timing and structure of its promotional sales strategy, including its twice-yearly promotional sales event and its annual Black Friday Cyber Monday promotion. The Company’s operating income has reflected these historical quarterly trends as a significant portion of our expenses are relatively fixed in the short term.

Use of Estimates

The preparation of the condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management relate to variable consideration for net sales provided to customers, including the sales return liability, allowances for excess and obsolete inventories; assumptions related to the valuation of common stock and determination of stock-based compensation; the recoverability of goodwill, the trade name, and long-lived assets; determination of incremental borrowing rate for leases; and determination of valuation allowance on deferred tax assets. Actual results could differ from these estimates.

Accounts Receivable, Net

Accounts receivable primarily consist of wholesale receivables from apparel retailers with a smaller portion attributed to credit card receivables related to sales transactions from the Company’s ecommerce platform and retail stores. Accounts receivable are carried at invoiced amounts less allowances for expected credit losses and are generally settled within 30 to 60 days. The allowance for expected credit losses is based on forecasts of future economic conditions, as well as information about past events and current conditions under the accounts receivable aging method. As of both September 26, 2026 and December 27, 2025, the allowance for credit losses was $2.4 million. The Company has elected the practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

IEEPA Tariff Receivable

During the 39 weeks ended September 26, 2026, the Company collected substantially all amounts due from regulatory authorities related to customs duties previously paid under the International Emergency Economic Powers Act (“IEEPA”). As of September 26, 2026, the remaining IEEPA tariff receivable was $0.3 million. The Company recognizes these statutory refunds when there is a valid legal refund claim against the government with the corresponding credit recognized as a reduction of Inventories in the condensed consolidated balance sheets or as a reduction of Cost of Goods Sold in the condensed consolidated statements of operations and comprehensive income (loss). The Company also recognized the benefit related to concession granted by vendors associated with these tariffs during the 13 weeks ended September 26, 2026 of approximately $0.8 million. In aggregate, the Company recognized $0.8 million and $11.0 million for the 13 and 39 weeks ended September 26, 2026, respectively, as a reduction of Cost of Goods Sold.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired. The Company operates as a single reporting unit, and its goodwill and indefinite-lived intangible asset (Trade Name) are located in the United States. Both are tested for impairment annually as of August 29, or more frequently if events or changes in circumstances indicate that impairment may exist. The Company may first assess qualitative factors to determine whether it is more likely than not that fair value is less than carrying value; if so, a quantitative test is performed. Goodwill impairment is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the goodwill balance, with fair value estimated using a discounted cash flow model and a market approach. For the Trade Name, an impairment charge is recognized for any excess of carrying value over fair value, which is generally estimated using discounted future cash flows.

The Company performed its annual qualitative assessments as of August 29, 2026 and determined that it was not more likely than not that the fair values of its reporting unit and indefinite-lived intangible asset were less than their carrying amounts. No triggering events were identified through September 26, 2026, and accordingly, no impairment of goodwill or indefinite-lived intangible assets was recognized for the 13 and 39 weeks ended September 26, 2026. Additionally, no triggering events were identified through September 27, 2025, and accordingly, no impairment of goodwill or indefinite-lived intangible assets was recognized for the 13 and 39 weeks ended September 27, 2025.

Revenue Recognition

Revenue is recognized as the net amount estimated to be received after deducting estimated or known amounts for sales returns and chargebacks. Sales returns and chargebacks are estimated using the expected value method based primarily on historical rates. Estimates are reviewed regularly until product returns are realized and the result of any such adjustments are known. As of September 26, 2026 and December 27, 2025, the amount of reserves for sales returns included in the Accrued Expenses and Other Current Liabilities on the accompanying condensed consolidated balance sheets were $13.9 million and $12.7 million, respectively.

The Company accounts for gift card transactions by recording a contract liability at the time gift cards are issued to the customer in exchange for consideration from the customer which is presented as Deferred Revenue and Deferred Revenue, Net of Current Portion in the condensed consolidated balance sheets. Contract liabilities for customer gift cards remain on the Company’s books until the gift card is redeemed by the customer, at which time the Company records the redemption of the gift card for merchandise as net revenues. Gift cards do not have an expiration date. The Company determines the probability of gift cards being redeemed based on historical redemption patterns and recognizes net revenues on unredeemed gift cards where the likelihood of the gift card being redeemed is remote and there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions (“gift card breakage”).

Gift card breakage is recognized in proportion, and over the same period, as actual gift card redemptions. Gift card breakage is included in Net Revenues in the condensed consolidated statements of operations and comprehensive income (loss). The balance of deferred revenue as of September 26, 2026 and December 27, 2025 was $11.8 million and $9.8 million, respectively, and $8.4 million as of the beginning of fiscal 2025. For the 13 weeks ended September 26, 2026 and September 27, 2025, the Company recognizednil and $0.1 million as revenue, respectively, from amounts recorded as deferred revenue at the beginning of the periods, and for the 39 weeks ended September 26, 2026 and September 27, 2025, the Company recognized $4.4 million and $4.1 million as revenue, respectively, from amounts recorded as deferred revenue at the beginning of the periods.

Deferred Offering Costs

The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds from the offering. As of September 26, 2026 and December 27, 2025, deferred offering costs included in Other Noncurrent Assets on the accompanying condensed consolidated balance sheets were nil and $1.6 million, respectively. Upon the closing of the IPO, all related deferred offering costs were reclassified to stockholders’ equity and recorded as a reduction of the IPO proceeds within Additional Paid-In Capital. As of September 26, 2026, $5.1 million of deferred offering costs had not yet been paid and were included in Accrued Expenses and Other Current Liabilities on the condensed consolidated balance sheets. As of September 26, 2026, the Company has recorded an accrual for estimated IPO-related offering costs based on information currently available.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures(“ASU 2023-09”). The new guidance requires, on an annual basis, disclosure of specific categories in the rate reconciliation and disclosure of income taxes paid disaggregated by jurisdiction. The Company will adopt the new standard during the year ended December 26, 2026. Adoption of the new standard is expected to result in expanded tax disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses(“ASU 2024-03”). The new guidance requires additional disclosure related to the disaggregation of income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The adoption of ASU 2024-03 is expected to result in additional disclosures and the Company is currently evaluating the effect this standard will have on the condensed consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software(“ASU 2025-06”). This update provides amendments to clarify and modernize the accounting for costs incurred to develop or acquire internal-use software. Under this guidance, capitalization for internal-use software costs begins when management has authorized and committed to funding the project and it is probable the project will be completed, and the software will be used to perform the intended function. ASU 2025-06 is effective for annual and interim periods beginning after December 15, 2027, with early adoption permitted on a retrospective, modified, or prospective basis. The Company is currently evaluating the potential impact of this guidance and the timing of adoption.

In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements(“ASU 2025-12”). This update provides amendments to a broad range of Topics arising from technical corrections, unintended application of the FASB codification, clarifications, and other minor improvements. The resulting amendments are collectively referred to as “Codification improvements”. The guidance is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. An entity may elect to early adopt the amendments on an issue-by-issue basis. During the 13 weeks ended September 26, 2026, the Company elected to early adopt Issue 10, effective prospectively as of December 28, 2025. Issue 10 clarifies the treasury stock retirement guidance in ASC 505-30-30-8 to explicitly permit the excess of the repurchase price over par or stated value to be accounted for entirely as a deduction from additional paid-in capital (“APIC”), provided that APIC does not become negative. The adoption did not have an impact on the Company’s previously issued financial statements.

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818)(“ASU 2026-02”), which establishes recognition, measurement, presentation and disclosure requirements for environmental credits and environmental credit obligations. The guidance requires costs incurred to obtain environmental credits that are used for voluntary environmental initiatives to be recognized as expense when incurred. The guidance also requires enhanced annual disclosures related to environmental credits and environmental credit obligations. The amendments are effective for public business entities for annual reporting periods beginning after December 15, 2027, and for all other entities for annual reporting periods beginning after December 15, 2028, including interim periods within those annual reporting periods, with early adoption permitted. The Company currently purchases carbon offsets in connection with its voluntary environmental initiatives and expenses the related costs as incurred. Accordingly, the Company does not expect the adoption of ASU 2026-02 to have a material impact on its consolidated financial statements; however, adoption will result in additional disclosures related to the Company’s environmental credit activities. The Company is currently evaluating the timing of adoption.

3. Inventories

Inventories consist of the following:

As of September 26, 2026 and December 27, 2025, the Company had inventory reserves in the amount of $16.0 million and $14.5 million, respectively.

4. Property and Equipment, Net

Property and equipment consist of the following:

For the 13 weeks ended September 26, 2026 and September 27, 2025, depreciation and amortization expense amounted to $4.3 million and $3.2 million, respectively. For the 39 weeks ended September 26, 2026 and September 27, 2025, depreciation and amortization expense amounted to $12.3 million and $8.6 million, respectively. Depreciation and amortization expense of property and equipment are primarily recognized within Selling, General and Administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss).

5. Goodwill, Trade Name and Intangible Assets, Net

Goodwill, trade name and intangible assets consist of the following:

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

7. Long-Term Debt

On May 2, 2024, LYMI Inc., a wholly owned subsidiary of Reformation Inc., entered into a credit agreement with JPMorgan Chase Bank, N.A., Citibank, N.A., Morgan Stanley Senior Funding, Inc. and Royal Bank of Canada (the “Credit Agreement”), to secure afive-year term loan of $165.0 million (“Term Loan”) and a revolving line of credit (“Revolver”) with a maximum borrowing capacity of $30.0 million (together, the “Credit Facility”).

On June 17, 2026, the Company entered into an amendment to its Credit Agreement (the “Amendment”). The Amendment, among other things, (i) provided for an additional $52.0 million of term loan borrowing (ii) provided for an incremental $40.0 million delayed draw term loan facility, of which, $40.0 million was funded on June 17, 2026 (iii) extended the maturity date of the term loan facilities and the revolving credit facility to June 17, 2031, and (iv) revised the scheduled principal amortization of the term loan facilities to reduce required principal payments over the remaining term of the debt. Upon entry into the Amendment, the Company had $246.7 million of term loan borrowings outstanding on June 17, 2026. Under the Amendment, Term Loans bear interest at a variable rate based on Secured Overnight Financing Rate (“SOFR”) plus an applicable margin.

The Company evaluated the Amendment in accordance with ASC 470, Debt, and concluded that the amendments to the term loan facilities should be accounted for as a debt modification as the terms were not substantially different. The Company incurred a total of $3.3 million in financing and third-party fees. Lender fees of $2.8 million allocated to the Term Loan were capitalized and are being amortized as an adjustment to interest expense over the remaining term of the debt using the effective interest method. Third-party fees of $0.3 million incurred in connection with the modification of the term loan facilities were recognized in earnings as incurred. Fees of $0.2 million allocated to the revolving borrowings were capitalized and are being amortized ratably over the term of the Revolver.

On August 24, 2026, the Company used a portion of the net proceeds from the IPO to make an early principal payment of $110.0 million on the Term Loan, which was applied to the balloon payment due at maturity. In connection with the partial prepayment, the Company recognized a $2.2 million loss on debt extinguishment related to the write-off of unamortized debt issuance costs.

As of September 26, 2026 and December 27, 2025, the Company had $136.7 million and $158.8 million outstanding under its Term Loan, respectively, andno borrowings under its Revolver.

The Credit Facility includes a $10.0 million sub-limit on letters of credit. Outstanding letters of credit reduce the amount available to borrow on the Revolver. As of September 26, 2026 and December 27, 2025, the available credit under the Revolver was $23.2 million and $26.4 million, respectively, reflecting the available limit of $30.0 million less outstanding letters of credit of $6.8 million and $3.6 million, respectively. Loan amounts under the Revolver may be borrowed, repaid and re-borrowed during the term. The unused portion of the Revolver bears a commitment fee of 0.50%.

The following summarizes the Company’s outstanding long-term debt:

The Term Loan may be prepaid in whole or in part prior to the maturity date and is subject to certain lender fees if converted, assigned, or paid on a day other than the end of the interest period.

The Term Loan requires quarterly principal payments with a balloon payment upon maturity. Scheduled principal payments for future fiscal years are as follows:

Interest on the Term Loan is payable quarterly and accrues, at the Company’s option, at either SOFR plus 3.75% or the Alternate Base Rate plus 2.75%. The Alternate Base Rate is defined as the greatest of (i) the prime rate, (ii) the New York Federal Reserve Bank rate plus 0.50%, and (iii) one-month Term SOFR plus 1.00%, subject to a floor of 1.00%.

Borrowings under the Credit Facility are collateralized by substantially all assets of the Company. The Credit Agreement contains various customary representations and warranties, affirmative and negative covenants, including, among others, covenants limiting the ability of the Company and its subsidiaries to dispose of assets, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments, and enter into transactions with affiliates, in each case subject to customary exceptions. The Credit Facility requires the Company to maintain a minimum fixed charge coverage ratio of 1.15 to 1.00 as of the last day of each fiscal quarter of the Company through March 31, 2025 and 1.25 to 1.00 for each fiscal quarter thereafter. The Credit Facility also requires that the Company maintain a maximum leverage ratio of 3.50 times Consolidated Adjusted Earnings Before Income Taxes, Depreciation and Amortization (“Adjusted EBITDA”) (as defined in the financing agreement) as of the last day of any fiscal quarter of the Company. As of September 26, 2026, the Company was in compliance with all financial covenants contained in the Credit Facility.

8. Net Revenues

A summary of disaggregated net revenues is as follows:

Direct-to-consumer represents net revenues from e-commerce through the Company’s online sale platform and net revenues from retail through direct product sales made from stores located in the U.S., United Kingdom, Canada, and France. Wholesale and other net revenues consist of sales made to third-party retailers such as department stores and online retailers, sales to distributors, and other miscellaneous revenues such as sample sales.

9. Income Taxes

The Company accounts for income taxes in interim periods using an income statement approach in accordance with ASC 740-270. Under this approach, the interim income tax provision is determined by estimating the annual effective tax rate expected to be applicable for the full fiscal year and applying that rate to year to date ordinary income (or loss).

For the 13 weeks ended September 26, 2026, the Company’s effective tax rate of 165.9% differs from the U.S. federal statutory rate of 21% primarily due to the limitation on the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), including a $2.1 million discrete tax expense to write down deferred tax assets related to stock-based compensation expected to be subject to the Section 162(m) limitation, and a $0.3 million discrete tax expense from the remeasurement of deferred tax assets and liabilities for changes in state statutory rate, partially offset by excess tax benefits on stock-based awards of $0.8 million in connection with the dividend recapitalization. For the 13 weeks ended September 27, 2025, the Company’s effective tax rate of 29.5% differs from the U.S. federal statutory rate of 21% primarily due to state and local income taxes and stock-based compensation expense. For the 39 weeks ended September 26, 2026, the Company’s effective tax rate of 131.6% differs from the U.S. federal statutory rate of 21% primarily due to the Section 162(m) limitation, including the discrete deferred tax asset write-down described above, partially offset by excess tax benefits on stock-based awards in connection with the dividend recapitalization, as well as increases in reserves for uncertain tax positions and discrete state and local tax items. For the 39 weeks ended September 27, 2025, the Company’s effective tax rate of 28.4% differs from the U.S. federal statutory rate of 21% primarily due to state and local income taxes on ordinary income.

10. Stock-Based Compensation

In 2019, the Company established the 2019 Stock Option Plan (the “2019 Plan”) to allow the Company to issue nonqualified stock options (“NQSO”) to eligible participants. Options under the 2019 Plan have a term of no more thanten years from the date of grant and are generally cancelled 90 days after termination of employment or other service. In July 2026, vesting of all outstanding options under the 2019 Plan was fully accelerated upon completion of the Company’s IPO, when the Company’s controlling stockholder’s beneficial ownership fell under 50% of the Company’s issued and outstanding shares.

Effective July 29, 2026, the Company adopted the 2026 Omnibus Incentive Plan (the “2026 Plan”), under which employees, consultants and directors of the Company and its affiliates are eligible to receive incentive awards. The 2026 Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards. In connection with the adoption of the 2026 Plan,5,316,858 shares of the Company’s common stock were reserved for issuance.

On July 29, 2026, the Board of Directors granted stock options to employees to purchase approximately 0.7 million shares under the 2026 Plan. One-third of these options vest on the first anniversary of the grant date, with the remaining two-thirds vesting ineight equal quarterly installments thereafter, subject to continued service through the applicable vesting dates. The Board of Directors also granted approximately 2.7 million restricted stock units (“2026 Plan RSUs”) to certain employees, officers and directors, with vesting periods of up tothree years.

The 2026 Plan provides that, except as otherwise provided in the applicable award agreement, upon a Change in Control, the unvested portion of an outstanding award will become fully vested and, as applicable, exercisable if the award is not assumed or substituted by the acquiring or successor entity. If the award is assumed or substituted, it will remain outstanding and continue to vest in accordance with its existing terms. Award agreements may provide for additional or separate vesting acceleration conditions.

The stock option and restricted stock unit award agreements granted during the 13 weeks ended September 26, 2026 provide for full vesting acceleration upon the occurrence of both a Change in Control and a qualifying termination during the applicable Change in Control protection period, which extends from three months before through 12 months after the Change in Control. Upon satisfaction of both conditions, any unvested stock options and restricted stock units become fully vested and, with respect to stock options, exercisable. Options granted under the 2026 Plan have a maximum contractual term of ten years from the date of grant, subject to earlier expiration in accordance with the 2026 Plan and the applicable award agreement. Upon termination of employment or service, unvested options generally terminate immediately, while vested options generally remain exercisable for three months following termination. For certain qualifying terminations vested options generally remain exercisable until the earlier of six months following termination or the contractual expiration date and may be subject to the Change in Control vesting acceleration provisions described above. The applicable award agreements govern the specific post-termination exercise, forfeiture and acceleration provisions. The Company evaluates the terms of individual award agreements to determine whether any acceleration provisions affect the recognition of stock-based compensation expense.

As of September 26, 2026,12,041,818 shares of common stock were reserved for issuance under the 2026 and 2019 Plans (collectively, the “SBC Plans”), of which 1,264,255 shares were available for future grants under the 2026 Plan. No additional awards may be granted under the 2019 Plan.

Stock Options

Prior to March 27, 2026, the Company granted 50% of its options with a service condition (“time-based option”) and 50% of the options with both market and an implied performance condition (“performance-based option”) (collectively, the “Options”). The time-based options generally vest over afour-year period with 25% of the shares vestingone year after the service date and the remaining 75% of shares vesting in equal installments monthly for the following 36 months. The performance-based options were originally set to vest when the Company’s controlling stockholder achieves a multiple of invested capital (“MOIC”) ranging from 175% to 250% of invested capital, based on cash proceeds received by the investor. At the grant date, the performance-based awards had a service condition, the MOIC condition, and an implied performance condition because the MOIC condition was not deemed to be achievable without the occurrence of a Change in Control or an IPO. Prior to March 27, 2026, no compensation cost was recognized for the performance-based options as the implied performance condition was not considered probable.

On March 27, 2026, the Company’s Board of Directors removed the non-service conditions on all outstanding performance-based options, thereby converting such options to time-based vesting awards. Following the modification, the former performance-based options have the same time-based vesting and other key terms as the time-based options under the same option agreement.

The modification was determined to be an improbable-to-probable modification and, accordingly, was accounted for as new equity awards for accounting purposes, with compensation cost measured based on the fair value of the modified awards as of the modification date. The aggregate fair value of modified awards was $25.3 million at the date of modification, determined using the Black-Scholes option-pricing model with the following weighted-average assumptions: expected term of 0.9 years, expected volatility of 45%, risk-free interest rate of 3.76%, and expected dividend yield of 0%. Compensation cost for the modified awards is measured at the modification-date fair value and recognized over the requisite service period of the modified awards. For awards that were already vested as of the modification date, the related compensation cost was recognized immediately. During the 13 weeks ended March 28, 2026, the Company recognized compensation expense of $23.8 million in connection with this modification since the majority of these options were vested at the modification date.

On July 29, 2026, the Board of Directors granted stock options to employees to purchase approximately 0.7 million shares under the 2026 Plan. One-third of these options vest on the first anniversary of the grant date, with the remaining two-thirds vesting ineight equal quarterly installments thereafter, subject to continued service through the applicable vesting dates.

In connection with the IPO, the Company repurchased and retired approximately 193,000 shares of common stock from certain existing employee stockholders for $2.7 million and settled approximately 830,000 employee stock options for $5.8 million, representing the net cash consideration after deducting the applicable exercise prices. The settlement of the employee stock options was accounted for separately under ASC 718, Compensation—Stock Compensation(“ASC 718”). Because the consideration paid to settle the options did not exceed the fair-value-based measure of the awards on the settlement date, no incremental stock-based compensation expense was recognized in connection with the settlement.

Option activity under the SBC Plans for time-based option grants is as follows:

(a)As discussed above, on March 27, 2026, the Company's Board of Directors modified the terms of all outstanding performance-based options, thereby converting these to time-based awards.

For the 13 weeks ended September 26, 2026 and September 27, 2025, stock-based compensation expense under the SBC Plans was $1.6 million and $0.3 million, respectively. Included in the amount recognized during the 13 weeks ended September 26, 2026 is $1.3 million of stock-based compensation expense related to the accelerated vesting of all outstanding time-based options under the 2019 Plan as a result of the Company’s IPO. Stock-based compensation expense was recognized mostly in Selling, General and Administrative expense except for an immaterial amount recorded in Cost of Goods Sold for the 13 weeks ended September 26, 2026 and September 27, 2025, respectively.

For the 39 weeks ended September 26, 2026 and September 27, 2025, stock-based compensation expense was $27.5 million and $0.8 million, respectively. Stock-based compensation expense was recognized mostly in Selling, General and Administrative expense except for $0.7 million and $0.1 million recorded in Cost of Goods Sold for the 39 weeks ended September 26, 2026 and September 27, 2025, respectively.

During the 13 and 39 weeks ended September 26, 2026, the Company granted 726,558 stock options with a weighted-average grant-date fair value of $8.50 per share. The grant-date fair value of the stock options was estimated using the Black-Scholes option-pricing model using an expected term of 5.9 years, which was determined using the simplified method, expected volatility of 56%, a risk-free interest rate of 4.43%, and an expected dividend yield of 0%.

As of September 26, 2026, total unrecognized compensation cost related to unvested time-based options under the 2026 Plan was $5.8 million, which is expected to be recognized over a weighted-average period of 2.8 years.

Non-Plan Restricted Stock Units

During fiscal 2025 and the 39 weeks ended September 26, 2026, the Company’s Board of Directors granted restricted stock units (“Non-Plan RSUs”) to key employees outside of the SBC Plans.

The Non-Plan RSUs contain both a service condition and a performance condition. The service condition generally requires service over a period of three or four years. The performance condition provides for accelerated vesting upon a Change in Control or an IPO, and the awards are forfeited if neither event occurs within seven years of the grant date. The performance condition was satisfied upon completion of the IPO in July 2026. As a result, during the 13 weeks ended September 26, 2026, the Company recognized $5.2 million of stock-based compensation expense related to the Non-Plan RSUs, substantially all of which was recognized in Selling, General and Administrative expense, with an immaterial amount recognized in Cost of Goods Sold.

Activity related to the Non-Plan RSUs was as follows:

2026 Plan Restricted Stock Units

On July 29, 2026, the Board of Directors granted approximately 2.7 million restricted stock units (“2026 Plan RSUs”) to certain employees, officers and directors. The 2026 Plan RSUs generally vest based on continued service over a period of up tothree years and provide for accelerated vesting upon the occurrence of a Change in Control as described above. Certain awards vested immediately upon grant. Stock-based compensation expense related to the immediately vested portion of the 2026 Plan RSUs was $0.8 million for each of the 13 and 39 weeks ended September 26, 2026.

Activity related to the 2026 Plan RSUs was as follows:

Stock-based compensation expense related to the 2026 Plan RSUs was $3.8 million for each of the 13 and 39 weeks ended September 26, 2026. Such expense was recognized substantially within Selling, General and Administrative expense, with an immaterial amount recognized in Cost of Goods Sold.

As of September 26, 2026, total unrecognized compensation cost related to unvested RSUs was $37.1 million, which is expected to be recognized over a weighted-average period of 2.1 years.

CEO Performance Award

On July 29, 2026, the Board of Directors granted Hali Borenstein, the Company’s Chief Executive Officer, a performance-based restricted stock unit award with a target of 300,000 RSUs (the “PSU Award”). The award is eligible to vest based on the achievement of specified stock price targets during thefive-year period following the grant date and is divided intosix tranches, each subject to a separate, progressively higher stock price target. Achievement of the applicable stock price targets is assessed quarterly based on the highest 60-consecutive-trading-day volume-weighted average trading price of the Company's common stock during the applicable quarter. The stock price targets range from 1.75 times to 3.0 times the Company’s IPO price of $15.00 per share. Depending on the level of achievement of the applicable market conditions, the payout under the PSU Award may range from 0% to 200% of the target number of RSUs, or up to 600,000 RSUs.

The aggregate grant-date fair value of the PSU Award was $5.8 million. The Company used a Monte Carlo valuation model to determine the fair value of the six tranches as of the grant date. The Monte Carlo valuation model, using different share price paths, calculates a derived service period which is the median share price path on which the market condition is satisfied for each tranche. The requisite service period was determined to be the greater of the derived service period or the explicit two year service period. For each of the six tranches, stock compensation expense is recognized on a straight-line basis over the requisite service period. Previously recognized compensation cost is not reversed if a market condition is not satisfied, provided the requisite service is rendered.

The following table summarizes the grant-date fair value by tranche:

The stock price targets are market conditions because they are based on specified prices of the Company’s common stock. In accordance with ASC 718, the effect of the market conditions is reflected in the grant-date fair value of the awards. The Company estimated the grant-date fair value of each tranche using a Monte Carlo simulation model with the following significant assumptions:

During the 13 and 39 weeks ended September 26, 2026, the Company recognized $0.4 million of stock-based compensation expense related to the PSU Award, all of which was recognized in Selling, General and Administrative expense.

As of September 26, 2026, total unrecognized compensation cost related to unvested PSUs was $5.4 million, which is expected to be recognized over a weighted-average period of 2.2 years.

Employee Stock Purchase Plan

In connection with the Company’s IPO, the Company adopted the Reformation Inc. Employee Stock Purchase Plan (the “ESPP”), which became effective on July 29, 2026. Under the ESPP, the maximum aggregate number of shares of common stock initially reserved for issuance is 590,762 shares. The number of shares reserved for issuance under the ESPP will increase annually, beginning December 27, 2026, and continuing through calendar year 2035, by an amount equal to the lesser of (i)1% of the shares of common stock issued and outstanding as of the last day of the immediately preceding fiscal year or (ii) such number of shares as determined by the Board of Directors or its designated committee. As of September 26, 2026, no shares of common stock had been purchased or issued under the ESPP, as the initial offering period had not yet commenced.

11. Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share for the periods indicated:

Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised, converted or settled in common stock.

As of September 26, 2026, the Company had 423,565 vested RSUs for which the underlying shares of common stock had not yet been issued due to settlement restrictions associated with the Company's IPO. These RSUs are expected to be settled in January 2027. As all substantive vesting conditions had been satisfied and the awards are required to be settled in common stock, the underlying shares are included in the weighted-average number of common shares outstanding for purposes of calculating basic and diluted earnings (loss) per share from their respective vesting dates.

The dilutive effect of the Company’s outstanding time-based stock options and RSUs is calculated using the treasury stock method and included in the computation of diluted earnings (loss) per share when dilutive. Potential common shares are excluded from the computation of diluted earnings (loss) per share when their effect would be antidilutive.

The Company’s PSU Award (see Note 10) is subject to the achievement of specified stock price targets sustained over a defined number of trading days. For purposes of calculating diluted earnings (loss) per share, the shares underlying the PSU Award are considered contingently issuable shares and are included in the computation only if the applicable conditions would be satisfied assuming the end of the reporting period were the end of the contingency period. As of the end of the reporting period, the applicable stock price conditions, including the required minimum number of trading days, had not been satisfied. Accordingly, the shares underlying the PSU Award were excluded from the computation of diluted earnings (loss) per share.

The Company’s contingently issuable shares of common stock underlying performance-based stock options and RSUs were excluded from the computation of diluted earnings (loss) per share as of September 27, 2025, because the applicable performance and market conditions had not been satisfied.

The following potential shares of common stock were excluded from the computation of diluted earnings (loss) per share because their inclusion would have been antidilutive or, in the case of contingently issuable shares, because the applicable performance or market conditions had not been satisfied:

•For the 13 weeks ended September 26, 2026 and September 27, 2025, the weighted-average outstanding time-based stock options to purchase 5,495,982 and 40,884 shares of common stock, respectively. For the 39 weeks ended September 26, 2026 and September 27, 2025, the weighted-average outstanding time-based stock options to purchase 5,223,880 and 37,145 shares of common stock, respectively.

•For the 13 and 39 weeks ended September 26, 2026, weighted-average 2026 Plan RSUs representing 1,881,778 and 625,899 shares of common stock, respectively.

•As of September 26, 2026 and September 27, 2025, the effect ofnil and 3,051,654 of contingently issuable performance-based shares, respectively.

•As of September 26, 2026 and September 27, 2025, the effect of 600,000 and 77,629 of contingently issuable performance-based RSUs, respectively.

12. Stockholders’ Equity

The Company’s Board of Directors has authorized one class of common stock. On July 13, 2026, the Company effected a 142.7-for-1 forward split of its common stock and a proportionate increase in the number of authorized shares. Accordingly, all share and per share information throughout the condensed consolidated financial statements has been retroactively adjusted to reflect the stock split.

In connection with the IPO, the number of authorized shares was increased to 500,000,000. Upon the completion of the IPO, the Company’s authorized capital stock consisted of 500,000,000 shares of common stock, $0.0001 par value per share, and 10,000,000 shares of preferred stock, $0.0001 par value per share.

As of September 26, 2026, the Company had 59,079,320 shares of common stock issued and outstanding, as adjusted for the stock split. No shares of preferred stock had been issued or were outstanding as of September 26, 2026.

Dividend Recapitalization Transaction

On June 17, 2026, the Company declared a dividend in the amount of $1.63 per share (as adjusted for the 142.7-for-1 forward stock split) to holders of its common stock using proceeds from the Amendment to the Credit Agreement as discussed in Note 7. The Board of Directors determined the dividend to be an extraordinary dividend under the 2019 Plan and certain RSU agreements, and consequently approved an adjustment to options outstanding under the 2019 Plan and RSUs outstanding under the RSU Agreements, pursuant to which (i) certain options and RSUs received an amount in cash equal to $1.63 for each such option and RSU, as applicable, (ii) the strike price of certain options was reduced by $1.63 for each such option and (iii) certain RSUs received an accrued dividend right equal to $1.63 for each such RSU, which are payable at the same time, and subject to the same terms, as the underlying RSU. The aggregate amount of the dividend and cash payments in respect of certain options and RSUs was $89.7 million. During the 39 weeks ended September 26, 2026, the Company recognized stock-based compensation expense of $1.5 million in connection with the dividend declaration on June 17, 2026. Of the total $89.7 million, $1.5 million was reflected in cash flows from operating activities, and the remaining $88.2 million was classified as a financing cash outflow in the Company's condensed consolidated statements of cash flows.

On July 31, 2026, the Company completed its IPO pursuant to which the Company issued and sold 9,478,821 shares of common stock, and the selling stockholders sold an aggregate of 4,583,679 shares of common stock at a price per share of $15.00. The Company received aggregate proceeds of approximately $132.2 million from the IPO, after deducting underwriting discounts of $10.0 million. The Company incurred offering costs of $8.0 million, of which $5.1 million were accrued in Accrued Expenses and Other Current Liabilities on the accompanying condensed consolidated balance sheet as of September 26, 2026.

On September 1, 2026, an additional 229,546 shares of common stock were sold by the selling stockholders pursuant to the underwriters’ partial exercise of their option to purchase additional shares. The Company did not receive any proceeds from the sale of the shares by the selling stockholders.

Share Repurchases

On August 10, 2026, the Company repurchased and retired approximately 193,000 shares of common stock from certain existing employee stockholders for $2.7 million. Because the consideration paid to repurchase the shares did not exceed the fair-value of the shares, no incremental stock-based compensation expense was recognized in connection with the transaction.

13. Leases

The Company has certain manufacturing facilities, warehouse, office, and retail space that are accounted for as operating leases. The Company’s lease terms may include options to extend or terminate the lease and are, therefore, included in the operating lease right-of-use assets and operating lease liabilities when such options are reasonably certain to be exercised. Rent expense is recorded on a straight-line basis over the term of the lease (“operating lease cost”) and is included in Cost of Goods Sold and Selling, General, and Administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss).

The following table presents the Company’s total lease cost:

Other information related to leases are as follows:

Future minimum lease payments for operating leases are as follows:

14. Commitments and Contingencies

Legal Matters

The Company is from time to time involved in various claims and legal actions arising in the ordinary course of business, including proceedings involving workers’ compensation and other employee claims, unfair business practices, tort, and other general liability claims. While the Company cannot predict with certainty the results of these claims and legal actions in which it is currently or in the future may be involved, the Company does not expect that the ultimate disposition of any currently pending claims or actions will have a material adverse effect on the Company’s condensed consolidated balance sheets, statements of operations and comprehensive income (loss), or liquidity.

15. Employee Benefit Plan

In 2019, the Company established The LYMI Inc. 401(k) Profit Sharing Plan and Trust (the “Plan”) of LYMI Inc. Employees who have worked for the Company for 13 consecutive weeks and meet certain eligibility restrictions may participate in the Plan and may defer up to 92% of their salaries up to the maximum amount allowed by law of their eligible compensation to the Plan. The Company’s matching contribution is based on a percentage formula set forth in the Plan agreement. For the 13 weeks ended September 26, 2026 and September 27, 2025, Company contributions to the Plan were $0.4 million and $0.4 million, respectively. For the 39 weeks ended September 26, 2026 and September 27, 2025, Company contributions to the Plan were $1.6 million and $1.4 million, respectively. Contributions to the employee benefit plan are primarily recognized within Selling, General and Administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss).

16. Segment Information

The Company’s operations are conducted asone operating segment andone reportable segment via revenue derived from the sale of individual products sold to customers through various channels. Segment information has been determined based on how the Company’s chief operating decision maker (“CODM”) manages its business, makes operating decisions, and evaluates operating performance. The Company’s CODM is its Chief Executive Officer. The Company’s assets are managed centrally and are reported internally in the same manner as the condensed consolidated financial statements, and thus, no additional information is disclosed herein. While the CODM evaluates operating performance based on both consolidated net income (loss) and Adjusted EBITDA, the primary measure of profit and loss evaluated by the CODM for its single reportable segment is consolidated net income (loss).

The CODM is also regularly provided disaggregated expense information, as shown below:

(a)Amounts are exclusive of depreciation and amortization expense as well as certain employee compensation and occupancy expenses.

(b)Amount is exclusive of stock-based compensation expense.

(c)Other segment expenses primarily include technology costs, professional fees, loss on extinguishment of debt, and other general and administrative expenses.

17. Geographic Information

The Company operated in the United States and internationally for the 13 and 39 weeks ended September 26, 2026 and September 27, 2025. Net revenues from retail stores are attributed to the geographic area in which the store is located, while net revenues from e-commerce and wholesale are attributed based on the customer's shipping destination.

The following table lists net revenues by geographic area:

The following table lists property and equipment, net by geographic area:

The following table lists right-of-use assets by geographic area:

18. Subsequent Events

Management evaluated all subsequent events through the date the condensed consolidated financial statements were issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.