BRC Inc

This Annual Report includes statements that express the Company’s opinions, expectations, hopes, beliefs, plans, intentions, objectives, strategies, assumptions or projections regarding future events or future results of operations or financial condition and therefore are, or may be deemed to be, “forward-looking statements.” The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements appear in a number of places throughout this Annual Report and include statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, the markets in which the Company operates as well as any information concerning possible or assumed future results of operations of the Company. Such forward-looking statements are based on available current market material available as of the date of this Annual Report and management’s expectations, beliefs and forecasts concerning future events impacting the Company. Factors that may cause such forward-looking statements to differ from actual results include, but are not limited to:

•Competition and our ability to grow and manage growth sustainably and retain our key employees;

•Failure to achieve sustained profitability;

•Negative publicity affecting our brand and reputation, or the reputation of key employees;

•Failure to manage our debt obligations;

•Failure to effectively make use of assets received under bartering transactions;

•Failure by us to maintain our message as a supportive member of the Veteran and military communities and any other factors which may negatively affect the perception of our brand;

•Our limited operating history, which may make it difficult to successfully execute our strategic initiatives and accurately evaluate future risks and challenges;

•Failed marketing campaigns, which may cause us to incur costs without attracting new customers or realizing higher revenue;

•Failure to attract new customers or retain existing customers;

•Risks related to the use of social media platforms, including dependence on third-party platforms;

•Failure to provide high-quality customer experience to retail partners and end users, including as a result of production defaults or issues, including due to failures by one or more of our co-manufacturers, affecting the quality of our products, which may adversely affect our brand;

•Decrease in success of the direct to consumer revenue channel;

•Loss of one or more of co-manufacturers, or delays, quality, or other production issues, including labor-related production issues at any of our co-manufacturers;

•Failure to manage our supply chain, and accurately forecast our raw material and co-manufacturing requirements to support our needs;

•Failure to effectively manage or distribute our products through our Wholesale business partners, especially our key Wholesale business partners;

•Failure by third parties involved in the supply chain of coffee, store supplies or merchandise to produce or deliver products, including as a result of ongoing supply chain disruptions, or our failure to effectively manage such third parties;

•Changes in the market for high-quality coffee beans and other commodities;

•Fluctuations in costs and availability of real estate, labor, raw materials, equipment, transportation or shipping;

•Failure to successfully compete with other producers and retailers of coffee;

•Failure to successfully open new Black Rifle Coffee shops (“Outposts”), including failure to timely proceed through permitting and other development processes, or the failure of any new or existing Outposts to generate sufficient sales;

•Failure to properly manage our rapid growth, inventory needs, and relationships with various business partners;

•Failure to protect against software or hardware vulnerabilities;

•Failure to build brand recognition using our intellectual properties or otherwise;

•Shifts in consumer spending, lack of interest in new products or changes in brand perception upon evolving consumer preferences and tastes;

•Failure to adequately maintain food safety or quality and comply with food safety regulations;

•Failure to successfully integrate into new domestic and international markets;

•Risks related to leasing space subject to long-term non-cancelable leases and with respect to real property;

•Failure of our franchise partners to successfully manage their franchises;

•Failure to raise additional capital to develop the business;

•Risks related to supply chain disruptions;

•Risks related to unionization of employees;

•Failure to comply with federal, state and local laws and regulations, or failure to prevail in civil litigation matters; and

•Other risks and uncertainties indicated in this Annual Report, including those set forth in Part I Item 1A Risk Factors in this annual report.

The forward-looking statements contained in this Annual Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A, Risk Factors in this Annual Report, that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. In particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our common stock and result in a loss of all or a portion of your investment.

Risks Related to Our Business

•Our brand, including the quality of media content and active participation in the Veteran community, is core to our success, and damage to our brand or reputation and negative publicity could negatively impact our business

•Failure to maintain or enhance the value and reputation of our brand, including our support of the Veteran community, could have a negative impact on our financial results.

•Our growth strategy depends on the successful execution of our strategic initiatives, and our limited operating history may make it difficult to accurately evaluate future risks and challenges.

•We have a limited operating history, and our past financial results may not be indicative of our future performance. Further, our revenue growth rate may slow as our business matures.

•Our marketing programs may not be successful, resulting in harm to our financial results.

•Our new products or merchandise may not generate increased sales or profits.

•The loss of one or more of our primary Wholesale partners, or a significant adverse change in a primary Wholesale partner’s financial position, could negatively impact our net sales and profitability.

•We are subject to risks associated with using social media as a form of advertisement and customer engagement.

•If we fail to offer a high-quality customer experience, our business and reputation will suffer.

•Our current operations are highly dependent on the financial performance of our Direct to Consumer (“DTC”) and Wholesale channels, and reliance on third party logistics, and could negatively impact our business.

•Our business relies on co-manufacturer and third party suppliers to supply our products, and loss of our co-manufacturer, our failure to identify new co-manufacturers, or inability to accurately forecast and contract for our co-manufacturing and raw materials needs could harm our business and impede our growth.

•We strongly rely upon our Wholesale channel partners. If we cannot maintain good relationships with customers and distributors, our Wholesale revenue channel may be harmed.

•Interruption of our supply chain of coffee, store supplies, or merchandise could affect our ability to produce or deliver our products and could negatively impact our business and profitability.

•Increases in the cost of high-quality coffee beans or other commodities or decreases in the availability of high-quality coffee beans or other commodities could have an adverse impact on our business and financial results.

•Our financial condition and results of operations are dependent upon consumer discretionary spending, and a number of economic or political conditions, largely outside our control, may adversely affect that spending and as such our results may fluctuate significantly and may not fully reflect the underlying performance of our business.

•We may not be able to compete successfully with other producers and retailers of coffee. Intense competition in our markets could make it more difficult to expand our business.

•Our growth strategy depends in part on opening new Outposts in existing and new markets. We may be unsuccessful in opening new Outposts or establishing new markets, which could adversely affect our growth.

•We are increasingly dependent on information technology and our ability to process data in order to operate and sell our goods and services.

•If the technology-based systems that give our consumers the ability to shop or interact with us online do not function effectively, our operating results, as well as our ability to grow our digital commerce business globally or to retain our customer base, could be materially adversely affected.

•We rely significantly on information technology and data to operate our business, including our supply chain and retail operations, and any failure, inadequacy, compromise or interruption of that technology or data could lead to adverse consequences.

•If we or our franchise partners are unable to protect our customers’ and employees’ personal, financial, or other confidential data, or if our information technology systems are compromised, we could be exposed to data loss, litigation, liability and reputational damage.

•We may not be able to adequately protect our intellectual property, including trademarks, trade names, and service marks, which, in turn, could harm the value of our brand and adversely affect our business.

•Evolving consumer preferences and tastes, including public or medical opinions about caffeine consumption, may adversely affect our business.

•Food safety and quality concerns may negatively impact our brand, business, and profitability, and our internal operational controls and standards may not always be met. Any possible instances or reports, whether true or not, of food or beverage-borne illness or adulteration could reduce our sales.

•We are subject to the risks associated with leasing space subject to long-term non-cancelable lease and, with respect to the real property that we own, owning real estate.

•Our operating results and growth strategies are partly dependent upon the success of our franchise partners, and we have limited control with respect to their operations. Additionally, our franchise partners’ interests may conflict or diverge with our interests in the future, which could have a negative impact on our business.

•If we fail to maintain adequate operational and financial resources, particularly if we continue to grow rapidly, we may be unable to execute our business plan or maintain high levels of service and customer satisfaction.

•Disruptions at the bank in which we deposit our funds could have an adverse impact on our business and financial condition.

•Authentic Brands’ debt obligations could impair our financial condition and adversely affect our business, and we may be unable to generate the cash flow to service such debt obligations.

•Authentic Brands’ debt agreements impose restrictions on our business.

•Our barter arrangement may not provide the benefits we expect.

Risks Related to People and Culture

•We depend on our founder, executive officers, and other key employees, and the loss of one or more of these employees, the failure of one or more of these employees to dedicate adequate time to the Company’s affairs, or an inability to attract and retain other highly skilled employees could harm our business.

•Changes in the availability of and the cost of labor could harm our business.

•Our unique workplace atmosphere may produce specific challenges.

•Unionization activities may disrupt our operations and affect our profitability.

Risks Related to Regulation Litigation and Taxation

•We may be subject to liability for placing advertisements with content that is deemed inappropriate or misleading.

•We, as well as our vendors, are subject to stringent and changing laws, regulations, and industry standards related to data Processing (“Data Protection Laws”), protection, privacy, and security. The actual or perceived failure by us, our customers, or vendors to comply with such laws, regulations, and industry standards may harm our business, financial condition, results of operations, and prospects.

•We and our franchise partners are subject to extensive government regulations that could result in claims leading to increased costs and restrict our ability to operate franchises.

•Our business, like many other beverage and restaurant companies, is subject to the risk of class action lawsuits and other proceedings that are costly, divert management attention, and, if successful, could result in our payment of substantial damages or settlement costs.

•Legislation and regulations requiring the display and provision of nutritional information for our menu offerings, and new information or attitudes regarding diet and health or adverse opinions about the health effects of consuming our menu offerings, could affect consumer preferences and negatively impact our business, financial condition, and results of operations.

•Following the Business Combination, we have incurred significant increased expenses and administrative burdens as a public company, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Corporate Structure

•The Tax Receivable Agreement (“TRA”) with the Unitholders of Authentic Brands, LLC (“Authentic Brands”) requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make could be substantial.

•The amounts that we may be required to pay under the TRA may be accelerated in certain circumstances and may also significantly exceed the actual tax savings that it ultimately realizes.

•We are a public benefit corporation, and our focus on our public benefit company purpose may negatively impact our financial performance.

•Our status as a public benefit corporation could make our acquisition, which may be beneficial to our stockholders, more difficult.

•As a public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder interests and the PBC Purpose, the occurrence of which may have an adverse impact on our financial condition and results of operations.

•As a public benefit corporation, we are required to comply with various new reporting requirements, which, even if complied with, could result in harm to our reputation.

•Our only material assets are our direct and indirect interests in BRCC LLC, and we are accordingly dependent upon distributions from BRCC LLC to pay dividends and taxes and other expenses.

•Delaware law, the Charter and the Bylaws contain certain provisions, including anti- takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

•Certain significant stockholders and Authentic Brands’ members whose interests may differ from those of our public stockholders following the Business Combination have the ability to significantly influence our business and management.

•We may issue additional shares of our Class A Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.

•A significant portion of our shares of Class A Common Stock are available for immediate resale by certain existing shareholders and may be sold into the market in the future. Sales of our Class A Common Stock by our existing shareholders may cause the market price of our Class A Common Stock to drop significantly, even if our business is doing well.

•We are subject to rules and regulations regarding our internal control over financial reporting. Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.

•We are a “controlled company” within the meaning of NYSE rules and, as a result, we qualify for exemptions from certain corporate governance requirements. Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such requirements.

•Because there are no current plans to pay cash dividends on our Class A Common Stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A Common Stock for a price greater than that which you paid for it.