BRC Inc.
For the period ended Dec 31, 2025. Filed Mar 2, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 2, 2026
BRCC$9.66-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-03.
0001891101-25-000006
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-02.
0001891101-26-000022
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 92 current paragraphs.
45 unchanged; 33 reworded; 14 added; 21 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
•DTC channel revenue decline has moderated as we continue to optimize customer acquisition, enhance retention, and provide our customers with a personalized and engaging shopping experience through targeted content and tailored product offerings on our website. Additionally, we are increasing our investment in major third-party ecommerce marketplaces in response to changing consumer purchasing behavior.
Current report
Recent Developments
Current report
Operational Improvement Plan
Current report
During the second quarter of 2025, management implemented the Operational Improvement Plan to reduce costs and improve the efficiency of certain company-wide functions. This plan was extended in the third and fourth quarters of 2025 as a result of the relocation of our corporate headquarters and a change in our third-party logistics provider. The cost of this plan was approximately $5.6 million consisting of severance and transition costs, substantially all of which were incurred as of December 31, 2025. We estimate that the costs savings as a result of this plan will exceed $8.9 million on an annualized run rate basis. As of December 31, 2025, we have realized approximately $5.3 million of these savings.
Current report
Net revenue for our Wholesale channel for the year ended December 31, 2025 increased $13.0 million, or 5%, to $258.0 million compared to $245.0 million for the corresponding period in 2024. The increase was primarily driven by expanded packaged coffee distribution and SKU expansion at FDM retailers, as well as contributions from Black Rifle Energy, which was launched in the fourth quarter of 2024. This increase was partially offset by a $19.0 million decrease in revenue recognized in connection with barter transactions, whereby finished goods inventory was exchanged for prepaid advertising credits.
Current report
Net revenue for our DTC channel for the year ended December 31, 2025 decreased $6.1 million, or 5%, to $117.6 million compared to $123.8 million for the corresponding period in 2024. The decrease was primarily driven by the impact of a $6.5 million decrease in the accrual for loyalty rewards points in 2024 following a change in the policy related to expiration of loyalty rewards points. Our DTC channel continues to stabilize as consumer purchasing behavior increasingly shifts toward third-party digital retail marketplaces rather than direct-to-consumer platforms.
Current report
Cost of goods sold for the year ended December 31, 2025 increased $30.0 million, or 13%, to $260.3 million compared to $230.3 million for the corresponding period in 2024. Gross margin decreased to 35% for the year ended December 31, 2025 from 41% for the corresponding period in 2024. The decrease in gross margin was driven by higher inflationary costs, primarily related to coffee bean prices, tariffs, and shipping costs. The decline also reflected the impact of lower net revenue resulting from the decrease in the accrual for loyalty reward points in 2024. In addition, we increased investments in trade and promotions, which were partially offset by pricing actions, productivity improvements, and favorable mix.
Current report
Marketing and advertising expenses for the year ended December 31, 2025 increased $3.6 million, or 10%, to $39.2 million compared to $35.6 million for the corresponding period in 2024. This increase was primarily driven by the expansion of partnerships, increased investment in consumer research and data, incremental shopper marketing, higher marketing spend to support the launch of Black Rifle Energy, and expanded performance-based initiatives.
Current report
General and administrative expenses for the year ended December 31, 2025 increased $3.9 million, or 8%, to $54.7 million compared to $50.8 million for the corresponding period in 2024. This increase was primarily attributable to accrued costs associated with the termination of a software contract that will be transitioned to a different software solution in 2026.
Current report
Other operating expense, net for the year ended December 31, 2025 increased $3.4 million, or 40%, to $11.9 million compared to $8.5 million for the corresponding period in 2024. The increase was primarily related to a $6.2 million increase in legal contingencies, net of insurance recoveries, partially offset by a decrease in termination costs for our retail outpost locations in 2025. For further discussion of legal contingencies see Note 15, Commitments and Contingencies, of our consolidated financial statements.
Current report
Interest expense for the year ended December 31, 2025 decreased $3.8 million, or 34%, to $7.5 million compared to $11.3 million for the corresponding period in 2024. The decrease was primarily driven by a lower average outstanding balance of the ABL Facility during the latter half of 2025.
Current report
On July 18, 2025, we closed the Offering and issued 28,000,000 shares of Class A Common Stock and an additional 4,200,000 shares of Class A Common Stock as a result of the full exercise of the underwriter's option, for total net proceeds of $37.3 million.
Current report
Net cash provided by financing activities was $5.9 million for the year ended December 31, 2025, compared to net cash used in financing activities of $10.7 million for the corresponding period in 2024. The $16.6 million increase in net cash provided by financing activities was primarily due to $37.3 million of net proceeds received from the public offering in the third quarter of 2025 and $1.0 million of net proceeds from shares issued in connection with a legal settlement, partially offset by a net decrease of $31.6 million on long-term debt, primarily due to repayments of our ABL facility.
Current report
We evaluate critical estimates using these criteria on an ongoing basis and add or subtract critical estimates as appropriate. Based on this assessment, we conclude that we do not have any estimates where the nature of the estimates is material due to the level of subjectivity and judgment utilized.
Removed paragraphs (21)
Previous report
•DTC channel revenue growth declined due to both a channel level decline in the DTC category and our strategic decision to redirect investments into higher-growth areas of the business amid elevated DTC customer acquisition costs. In addition, we have limited our promotional offerings to focus on profitability.
Previous report
Net revenue for our Wholesale channel for the year ended December 31, 2024 increased $20.0 million, or 9%, to $245.0 million as compared to $225.1 million for the corresponding period in 2023. The Wholesale channel performance was primarily driven by continued growth of packaged coffee in the FDM market and the launch of Black Rifle Energy. These increases were partially offset by a $5.0 million decrease in revenue recognized related to a barter transaction whereby we exchanged finished goods inventory for prepaid advertising credits. The prepaid advertising credits are issued by a counterparty that specializes in barter transactions. The barter transactions serve as a sales channel primarily used for selling inventory that is closer to its expiration date compared to inventory sold through non-barter transactions.
Previous report
Net revenue for our DTC channel for the year ended December 31, 2024 decreased $19.5 million, or 14%, to $123.8 million as compared to $143.2 million for the corresponding period in 2023. The decline was primarily driven by lower customer acquisition due to declines in the overall DTC market, a strategic reallocation of advertising spend to higher return areas, and an increase in points of distribution in the Wholesale channel, which expanded brick and mortar availability for Black Rifle Coffee consumers. This decrease was partially offset by an increase of $6.5 million as a result of the decrease in the accrual for loyalty rewards points following a change in policy on expiration of points in the first quarter of 2024. The change in policy around the expiration of loyalty rewards point increased our gross margin percentage by 1.0% for the year ended December 31, 2024.
Previous report
Cost of goods sold for the year ended December 31, 2024 decreased $39.9 million, or 15%, to $230.3 million as compared to $270.2 million over the corresponding period in 2023. Gross margin increased to 41% for the year ended December 31, 2024 as compared to 32% for the corresponding period in 2023. The increase in gross margin was a result of product mix shift driven by an increase in the higher margin FDM market, productivity improvements, and lower warehousing costs.
Previous report
Marketing and advertising expenses for the year ended December 31, 2024 increased $4.8 million, or 16%, to $35.6 million as compared to $30.8 million for the corresponding period in 2023. This increase was due to our expansion of partnerships, including our engagement with the UFC, higher advertising spend, incremental shopper marketing, and an increase in trade promotions.
Previous report
General and administrative expenses for the year ended December 31, 2024 decreased $20.8 million, or 29%, to $50.8 million as compared to $71.6 million for the corresponding period in 2023. This decrease was as a result of our 2023 Restructuring Plan which reduced our corporate infrastructure and support that were inefficient or duplicative, including professional services, information technology, and office space.
Previous report
Other operating expense, net for the year ended December 31, 2024 increased $6.3 million, or 285%, to $8.5 million as compared to $2.2 million for the corresponding period in 2023. This increase was related to the impairment loss recognized in the fourth quarter of 2024 exceeding the impairment loss recognized in 2023.
Previous report
Interest expense for the year ended December 31, 2024 increased $5.0 million, or 79%, to $11.3 million as compared to $6.3 million for the corresponding period in 2023. The increase was primarily due to an increase in average debt balances and higher interest rates. Fiscal year 2024 utilized a $75.0 million senior credit facility and a $50.0 million term loan with rates at the term Secured Overnight Financing Rate (“SOFR”) plus 2.60% to 3.10%, based on average excess availability of the borrowing base and term SOFR plus 8.50%, respectively. This agreement was entered in the third quarter 2023. In the first half of fiscal year 2023, the previous senior credit facility held a rate of Bloomberg Short-Term Bank Yield (“BSBY”) plus 2.00% to 2.25%, based on average excess availability of the borrowing base.
Previous report
Other expense, net consisted of miscellaneous income (expense) items such as bank fees and credit card rebates in 2023.
Previous report
Net cash used in financing activities was $10.7 million for the year ended December 31, 2024, compared to net cash provided by financing activities of $21.4 million for the corresponding period in 2023. The $32.1 million decrease in net cash provided was primarily due to an increase in repayments of long-term debt of $93.3 million and payment of $1.0 million of debt extinguishment costs, offset by proceeds from issuance of long-term debt of $58.7 million, net of $3.6 million of debt issuance costs.
Previous report
2023 Restructuring Plan
Previous report
During fiscal year 2023, management implemented a plan to reduce costs and improve efficiency of certain company-wide functions. We incurred a total of $6.8 million of restructuring costs of which $3.5 million related to severance costs for the reduction in workforce and $3.3 million related to advisory fees, fees for terminated leases, and costs related to our Salt Lake City production shutdown. These total costs incurred were included in the following line items in the consolidated statement of operations: (1) severance costs of $3.5 million were included in “Salaries, wages and benefits”, (2) advisory fees of $2.4 million and fees related to terminated leases of $0.4 million were included in “General and administrative” expenses, and (3) $0.5 million of costs related to our Salt Lake City production shutdown were included in “Costs of goods sold”.
Previous report
We incurred an additional $0.3 million of severance costs in the first quarter of 2024, which are included in the line item “Salaries, wages and benefits” in the consolidated statement of operations.
Previous report
The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain. We consider an accounting policy to be a critical estimate if (1) we must make assumptions that were uncertain when the judgment was made, and (2) changes in the estimate assumptions or selection of a different estimate methodology could have a significant impact on our financial position and the results that we report in our consolidated financial statements. While we believe that our estimates, assumptions and judgments are reasonable, they are based on information available when the estimate was made.
Previous report
Revenue Recognition
Previous report
We recognize revenue in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, or Accounting Standards Codification ("ASC") 606. Revenue is recognized when a customer obtains control of products or services in an amount that reflects the consideration which we received, or expect to receive, in exchange for those goods or services. We are required to identify our contracts with customers, identify the performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfies a performance obligation.
Previous report
The majority of our revenue is derived from the sale of our products. In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to be entitled.
Previous report
Revenue is recognized when control of the product is transferred to the customer (i.e., when our performance obligation is satisfied), which is defined by the commercial terms of each purchase but typically occurs at the date of delivery of the merchandise to the customer. As such, customer orders are recorded as deferred revenue prior to delivery of products. In determining whether control has transferred, we considered whether risks and rewards of ownership have transferred to the customer. We estimate which shipments have been delivered and recognize corresponding revenue at the end of the period. Delivery date estimates are based on average transit times calculated based on factors such as the type of carrier, the fulfillment source, the delivery destination and historical transit time experience. Actual shipping times may differ from our estimates.
Previous report
Equity-Based Compensation
Previous report
We account for stock-based compensation in accordance with ASC Topic 718, Compensation — Stock Compensation. Equity-based awards are mainly awarded to employees and members of our Board and measured at fair value at each grant date. We calculate the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. We calculate the fair value of restricted stock units on the date of grant based on the closing price of our Class A Common Stock. We calculate the fair value of performance-based restricted stock units on the date of grant using the Monte Carlo pricing model. We recognize expense over the requisite service period for awards expected to vest using the straight-line method and recognize forfeitures as they occur. See Note 14, Equity-Based Compensation within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for additional information regarding the accounting for stock-based awards.
Previous report
Applying these valuation and allocation approaches involves the use of estimates, judgment and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and cash flows, as well as discount rates, valuation multiples, the selection of comparable public companies and comparable transactions, and the probability of future events. Changes in any or all of these estimates and assumptions, or the relationships between these assumptions, impact our valuation as of each valuation date and may have a material impact on the valuation of our equity and equity awards. These estimates involve inherent uncertainties and, if different assumptions had been used, equity-based compensation expense could have been materially different from the amounts recorded.
Reworded paragraphs (33)
Previous wording
Unless the context otherwise requires, references to “we”, “us”, “our”, “Black Rifle Coffee”, “Black Rifle Coffee Company”, “BRCC” and the “Company” in this section are to the business and operations of BRC Inc. and its consolidated subsidiaries. The following discussion and analysis should be read in conjunction with the audited annual consolidated financial statements and related notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data in this Annual Report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause BRCC’s actual results to differ materially from management’s expectations. Factors which could cause such differences are discussed herein and set forth in Part I, Item 1A, Risk Factors in this Annual Report.
Current wording
Unless the context otherwise requires, references to “we”, “us”, “our”, “Black Rifle Coffee”, “Black Rifle Coffee Company”, “BRCC” and the “Company” in this section are to the business and operations of BRC Inc. and its consolidated subsidiaries. The following discussion and analysis should be read in conjunction with the audited annual consolidated financial statements and related notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data of this Annual Report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause BRCC’s actual results to differ materially from management’s expectations. Factors which could cause such differences are discussed herein and set forth in Part I, Item 1A, Risk Factors in this Annual Report.
Previous wording
Black Rifle Coffee Company is a Veteran-founded and led premium coffee, energy drink, and media company operating through one reportable segment that comprises three primary channels: Wholesale, DTC, and Outposts. Founded in 2014 by U.S. Army Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Hafer personally roasted, packaged, and shipped coffee directly to consumers. Today, the company has grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and all who love America.
Current wording
Black Rifle Coffee Company is a Veteran-founded and led premium coffee, and energy drink company operating through one reportable segment composed of three primary channels: Wholesale, DTC, and Outposts. We leverage in-house media and content creation to support brand awareness, customer engagement, and community building. Founded in 2014 by U.S. Army Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Mr. Hafer personally roasted, packaged, and shipped coffee directly to consumers. Today, we have grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and others who share our values.
Previous wording
In February 2022, we completed the Business Combination and as a result of the consummation of a series of mergers in connection therewith, Authentic Brands became a subsidiary of BRC Inc., with BRC Inc. acting as the sole managing member thereof as a public benefit corporation. The Business Combination was accounted for as a reverse acquisition and a recapitalization of Authentic Brands. Accordingly, the Business Combination was reflected as the equivalent of Authentic Brands issuing stock for the net assets of SilverBox, accompanied by a recapitalization. Under this method of accounting, SilverBox is treated as the “acquired” company for financial reporting purposes. The net assets of SilverBox are stated at historical cost, with no goodwill or other intangible assets recorded. This accounting treatment was determined by the individual controlling Authentic Brands prior to the Business Combination, who also controls the combined company post Business Combination.
Current wording
In February 2022, we completed the Business Combination and as a result of the consummation of a series of mergers in connection therewith, Authentic Brands became a subsidiary of BRC Inc., with BRC Inc. acting as the sole managing member thereof as a public benefit corporation. The Business Combination was accounted for as a reverse acquisition and a recapitalization of Authentic Brands. Accordingly, the Business Combination was reflected as the equivalent of Authentic Brands issuing stock for the net assets of SilverBox, accompanied by a recapitalization. Under this method of accounting, SilverBox is treated as the “acquired” company for financial reporting purposes. The net assets of SilverBox are stated at historical cost, with no goodwill or other intangible assets recorded. This accounting treatment was determined by the controlling owner of Authentic Brands prior to the Business Combination, who also controls the combined company following the Business Combination.
Previous wording
•Wholesale channel revenue increased as we added new customers and continued to expand our presence in the FDM market. We expect further revenue growth in this channel as we invest in customer acquisition, new product launches, and distribution expansion in the FDM market.
Current wording
•Wholesale channel revenue continues to increase as we add new customers and expand our presence in the FDM market. We expect continued revenue growth in this channel as we invest to increase brand awareness, and in customer acquisition, new product launches, including our Black Rifle Energy product line, and expanded distribution in the FDM market.
Previous wording
•Outpost channel revenue decreased due to lower transaction volumes at existing Outpost retail locations. In 2025, we anticipate limited growth in this channel as we reallocate investments to other channels while we work to improve profitability through operational and strategic changes, which may include closing underperforming Outposts. We expect accelerated growth in future years as we resume investment in this part of the business.
Current wording
•Outpost channel revenue is stabilizing as we focus on improving transaction volumes and average order values through customer retention programs and tailored product offerings. In 2026, we expect limited growth in this channel as we reallocate investments to other channels while seeking to improve profitability through operational and strategic changes, which may include the closure of underperforming Outposts.
Previous wording
Maintaining and growing brand awareness and loyalty is critical to our success. We believe we have developed an efficient marketing strategy that enhances brand awareness and drives consumer engagement. Consumer appreciation of our brands is primarily reflected in the increase of our sales across our three channels over the last few years. We expect to continue to refine and develop our brand strategy utilizing reach-based formats such as national television, streaming advertising, and other select avenues. In addition, we will leverage our social media presence and employ targeted digital advertising to expand the reach of our brand.
Current wording
Maintaining and growing brand awareness and loyalty is critical to our success. We believe we have developed an effective marketing strategy that enhances brand awareness and drives consumer engagement. Consumer appreciation of our brand is primarily reflected in our sales across our three channels. We intend to continue to refine and develop our brand strategy utilizing reach-based formats such as streaming advertising and other select marketing channels. In addition, we will leverage our social media presence and employ targeted digital advertising to expand the reach of our brand.
Previous wording
Our Ability to Grow Our Customer Base in Our Outposts and Wholesale Channels
Current wording
Our Ability to Grow Our Customer Base in Our Wholesale Channel
Previous wording
We continue to expand our customer base through our Wholesale channel, with our products now available in a growing number of physical retail locations. Wholesale customers include large national retailers, regional retailers, distributors, and dealers, reflecting our increases in market presence and distribution reach.
Current wording
We continue to expand our customer base through our Wholesale channel, with our products now available in a growing number of physical retail locations. Wholesale customers include large national retailers, regional retailers, distributors, and dealers, reflecting increased market presence and distribution reach.
Previous wording
We believe that consistently acquiring and retaining customers at a reasonable cost will be a key driver of our future performance. We continue to build brand awareness and reach new consumers by investing in existing and new channels and markets. Our expertise in digital creative and engagement provides a distinct advantage in attracting, converting, and retaining our consumers. We remain focused on measuring and optimizing marketing performance to ensure that our advertising spend is both effective and efficient, while managing customer acquisition costs and maximizing returns on marketing investments.
Current wording
We believe that consistently acquiring and retaining customers at a reasonable cost will be a key driver of our future performance. We continue to build brand awareness and reach new consumers by investing in existing and new channels and markets. Our capabilities in digital marketing and consumer engagement provide a competitive advantage in attracting, converting, and retaining our consumers. We remain focused on measuring and optimizing marketing performance to ensure that our advertising spend is efficient, while managing customer acquisition costs and maximizing returns on marketing investments.
Previous wording
Our Ability to Drive Repeat Usage of Our Products
Current wording
Our Ability to Drive Repeat Purchases of Our Products
Previous wording
We gain substantial economic value from repeat users of our products who consistently re-order our products. The pace of our growth rate will be affected by the repeat usage dynamics of existing and newly acquired customers.
Current wording
We gain substantial economic value from repeat users of our products who consistently re-order our products. The pace of our growth rate may be affected by the repeat purchase behavior among existing and newly acquired customers.
Previous wording
Our goal is to continue to expand our product line over time to increase our growth opportunity and reduce product-specific risks through diversification into multiple products each designed around daily use. Our pace of growth will be partially affected by the cadence and magnitude of new product launches over time. Moving forward, we believe that it is important to our business that we continue innovating with new products and flavors.
Current wording
Our goal is to continue to expand our product line over time to increase our growth opportunities and reduce product-specific risks through diversification into multiple products intended for regular consumer use. Our pace of growth will be partially affected by the timing and scale of new product launches. We believe that it is important to our business to continue to innovate with new products and flavors.
Previous wording
Our ability to grow and meet future demand will be affected by our ability to properly plan for and source inventory from a variety of suppliers and co-manufacturers located inside and outside the United States. The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua, and since 2020, we have also sourced green coffee beans from over ten countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts. Quality control is also a critically important part of our manufacturing and supply chain operations. 100% of our coffee is roasted in the United States. Our licensed, Coffee Quality Institute-certified grader and former Green Beret, leads cupping, grading, scoring, and sourcing of our coffees. We also must effectively manage our co-manufacturers and suppliers.
Current wording
Our ability to grow and meet future demand will be affected by our ability to properly plan for and source inventory from a variety of suppliers and co-manufacturers located inside and outside the United States. The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua and since 2020, we have also sourced green coffee beans from more than ten additional countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts. Quality control is a critical component of our manufacturing and supply chain operations. All of our bagged coffee is roasted in the United States. Our licensed, Coffee Quality Institute-certified grader and former Green Beret, oversees cupping, grading, scoring, and sourcing of our coffees. We also must effectively manage our co-manufacturers and suppliers.
Previous wording
Operating expenses consist of marketing and advertising expenses related to brand marketing campaigns through various online platforms, including email, digital, website, social media, search engine optimization, as well as performance marketing efforts including retargeting, paid search and product advertisements, as well as social media advertisements and sponsorships. Operating expenses also consist of salaries, wages, and benefits of payroll and payroll related expenses for labor not directly related to producing our products. Payroll expenses include both fixed and variable compensation. Variable compensation includes bonuses and equity-based compensation. General and administration costs include other professional fees and services, and general corporate infrastructure expenses, including utilities and depreciation and amortization.
Current wording
Operating expenses consist of marketing and advertising expenses related to brand marketing campaigns through various online platforms, including email, digital, website, social media, search engine optimization, as well as performance marketing efforts including retargeting, paid search and product advertisements, as well as social media advertisements and sponsorships. Operating expenses also consist of salaries, wages, and benefits, and payroll related expenses for labor not directly related to producing our products. Payroll expenses include both fixed and variable compensation. Variable compensation includes bonuses and equity-based compensation. General and administrative costs include other professional fees and services, and general corporate infrastructure expenses, including utilities and depreciation and amortization.
Previous wording
Interest expense consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs. For the year ended December 31, 2024, interest expense also included the extinguishment of debt costs.
Current wording
Interest expense consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs. For the year ended December 31, 2024, interest expense also included debt extinguishment costs.
Previous wording
In accordance with ASC 740, Income Taxes, the Company evaluates the technical merits of its income tax positions and establishes unrecognized income tax benefits for uncertain tax positions when deemed appropriate. The Company evaluates and accounts for uncertain tax positions using a two-step approach: Step 1. Recognition – occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step 2. Measurement – determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. See Note 16, Income Taxes for additional information.
Current wording
In accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, the Company evaluates the technical merits of its income tax positions and establishes unrecognized income tax benefits for uncertain tax positions when deemed appropriate. The Company evaluates and accounts for uncertain tax positions using a two-step approach: Step 1. Recognition – occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step 2. Measurement – determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized occurs when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. See Note 13, Income Taxes for additional information.
Previous wording
This discussion and analysis pertains to comparisons of material changes in the consolidated financial statements for the years ended December 31, 2024 and 2023. For the comparisons of the years ended December 31, 2023 and 2022, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 6, 2024. The following table represents the selected results of operations for BRCC for the periods indicated (amounts in thousands):
Current wording
This discussion and analysis pertains to comparisons of material changes in the consolidated financial statements for the years ended December 31, 2025 and 2024. For the comparisons of the years ended December 31, 2024 and 2023, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 3, 2025. The following table presents the selected results of operations for BRCC for the periods indicated (amounts in thousands):
Previous wording
Net revenue for the year ended December 31, 2024 decreased $4.1 million, or 1%, to $391.5 million as compared to $395.6 million for the corresponding period in 2023.
Current wording
Net revenue for the year ended December 31, 2025 increased $6.8 million, or 2%, to $398.3 million as compared to $391.5 million for the corresponding period in 2024.
Previous wording
Net revenue for our Outpost channel for the year ended December 31, 2024 decreased $4.7 million, or 17%, to $22.7 million as compared to $27.3 million for the corresponding period in 2023. The decline was primarily driven by lower transaction volumes and reduced foot traffic in 2024 compared to the prior year.
Current wording
Net revenue for our Outpost channel for the year ended December 31, 2025 remained relatively flat compared to the corresponding period in 2024.
Previous wording
Total operating expenses for the year ended December 31, 2024 decreased $18.3 million, or 10%, to $157.3 million as compared to $175.7 million for the corresponding period in 2023.
Current wording
Total operating expenses for the year ended December 31, 2025 increased $5.2 million, or 3%, to $162.5 million compared to $157.3 million for the corresponding period in 2024.
Previous wording
Salaries, wages and benefits expenses for the year ended December 31, 2024 decreased $8.6 million, or 12%, to $62.4 million as compared to $71.1 million for the corresponding period in 2023. This decrease was as a result of our 2023 Restructuring Plan whereby, we reduced compensation costs through headcount reductions in 2023 for which we realized the full benefit in 2024.
Current wording
Salaries, wages and benefits expenses for the year ended December 31, 2025 decreased $5.7 million, or 9%, to $56.7 million compared to $62.4 million for the corresponding period in 2024. This decrease was primarily driven by reduced compensation costs through headcount reductions, partially offset by an increase in severance costs associated with our Operational Improvement Plan.
Previous wording
For further detail of income tax matters, see Note 16, Income Taxes, within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Current wording
For further details regarding income tax matters, see Note 13, Income Taxes, within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Previous wording
Income tax expense was $0.2 million for each of the years ended December 31, 2024 and 2023, representing effective tax rates of (2.3)% and 0.3%, respectively. In addition, the tax benefit for the year ended December 31, 2024 reflects the impact of our assessment that we will not be able to record the benefit of certain current year deferred tax assets for which a valuation allowance is expected.
Current wording
Income tax expense was $0.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively, representing effective tax rates of (0.4)% and (2.3)%, respectively. The effective tax rate for the year ended December 31, 2025 reflects pretax losses and our assessment that certain current year deferred tax assets are not expected to be realized, resulting in the recognition of a valuation allowance.
Previous wording
Our principal use of cash is to support the growth of our business, including increasing working capital requirements related to inventories, accounts receivable, and general and administrative expenses. Furthermore, we use cash to fund our debt service commitments, capital equipment acquisitions, and other growth-related needs.
Current wording
Our principal use of cash is to support the growth of our business, including increasing working capital requirements related to inventories, accounts receivable, and general and administrative expenses. We also use cash to fund our debt service commitments, capital equipment acquisitions, and other growth-related needs.
Previous wording
Our primary sources of cash are (1) cash on hand, (2) cash provided by operating activities, and (3) net borrowings from our credit facilities. As of December 31, 2024, our cash and cash equivalents were $6.8 million, our working capital was $20.3 million, and under our credit facilities, we had $25.5 million of available borrowings, after the consideration of the $5.0 million reduction required before the Availability Block Release Date, the date on which we have maintained a fixed charge coverage ratio of not less than 1.10 to 1.00 based on a trailing four fiscal quarter calculation as of December 31, 2024, and no defaults or events of default are then continuing. Our ability to draw from the credit facilities is subject to a borrowing base and other covenants. There are no defaults or events of default at this time. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for at least the next twelve months.
Current wording
Our primary sources of cash are (1) cash on hand, (2) cash provided by operating activities, and (3) net borrowings from our credit facilities. As of December 31, 2025, our cash and cash equivalents were $4.3 million, our working capital was $24.2 million, and under our credit facilities, we had $55.4 million of available borrowings. Our ability to draw from the credit facilities is subject to a borrowing base and other covenants. As of December 31, 2025, we are in compliance with our covenants under the credit facilities and there are no defaults or events of default. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for at least the next twelve months.
Previous wording
Net cash provided by operating activities was $11.3 million for the year ended December 31, 2024, compared to net cash used in operating activities of $25.0 million for the corresponding period in 2023. The total increase of $36.3 million in net cash provided was primarily due to a net loss of $56.7 million improving to net loss of $7.6 million for 2024.
Current wording
Net cash used in operating activities was $9.8 million for the year ended December 31, 2025, compared to net cash provided by operating activities of $11.3 million for the corresponding period in 2024. The $21.1 million change in net cash from operating activities was primarily driven by a net loss of $32.2 million in 2025 compared to a net loss of $7.6 million in 2024, as well as changes in working capital, including inventory and accounts payable.
Previous wording
Net cash used in investing activities was $7.7 million for the year ended December 31, 2024, compared to net cash used in investing activities of $21.5 million for the corresponding period in 2023. The $13.8 million decrease in net cash used was primarily due to reduced capital expenditure projects for our Outpost locations, roasting facilities and information technology.
Current wording
Net cash provided by investing activities was $1.4 million for the year ended December 31, 2025, compared to net cash used in investing activities of $7.7 million for the corresponding period in 2024. The $9.1 million change was primarily due to lower capital expenditures, including reduced investment in our Outpost locations, roasting facilities and information technology, as well as $5.1 million in proceeds from the sale of property during 2025.
Previous wording
The Company has entered into several manufacturing and purchase agreements to purchase coffee products from third-party suppliers. The minimum purchase amounts are based on quantity and in the aggregate will be approximately $26.1 million for 2025, $30.0 million for 2026 and $32.4 million for 2027. See Note 18, Commitments and Contingencies to the consolidated financial statements included in Item 8 of Part II of this Annual Report for information regarding such manufacturing and purchase agreements.
Current wording
The Company has entered into several manufacturing and purchase agreements to purchase coffee products from third-party suppliers. The minimum purchase amounts are based on quantity and in the aggregate will be approximately $30.0 million for 2025, $32.4 million for 2026 and $15.1 million for 2027. See Note 15, Commitments and Contingencies to the consolidated financial statements included in Item 8 of Part II of this Annual Report for information regarding such manufacturing and purchase agreements.
Previous wording
Liabilities relating to operating leases that have commenced as of December 31, 2024 have been reported on the balance sheet as operating lease liabilities. Payments on leases are expected to be approximately $3.9 million in the next twelve months, and approximately $37.3 million beyond twelve months through 2043. See Note 9, Leases to the consolidated financial statements included in Item 8 of Part II of this Annual Report for additional information.
Current wording
Liabilities relating to operating leases that have commenced as of December 31, 2025 have been reported on the balance sheet as operating lease liabilities. Payments on leases are expected to be approximately $3.7 million in the next twelve months, and approximately $31.3 million beyond twelve months through 2043. See Note 9, Leases to the consolidated financial statements included in Item 8 of Part II of this Annual Report for additional information.
Previous wording
Future capital requirements will vary materially from period to period and will depend on factors such as adding additional roasting capacity, expansion of our corporate and information technology infrastructure relating to growth initiatives and expansion and growth by opening additional Company-operated Outposts. We currently expect to fund our material capital requirements with borrowings from our credit facilities, but we may also seek additional debt or equity financing.
Current wording
Future capital requirements will vary materially from period to period and will depend on factors such as the addition of roasting capacity and the expansion of our corporate and information technology infrastructure to support changes in the Company. We currently expect to fund our material capital requirements with borrowings from our credit facilities, but we may also seek additional debt or equity financing.
Previous wording
Critical accounting estimates are those that management believes are the most important portrayal of our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Critical accounting estimates are accounting estimates where the nature of the estimates are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and the impact of the estimates on financial condition or operating performance is material.
Current wording
Critical accounting estimates are those that management believes are the most important to the portrayal of our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Critical accounting estimates are accounting estimates where the nature of the estimates is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and where the impact of the estimates on financial condition or operating performance is material.
Previous wording
Our significant accounting estimates are discussed in more detail in Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of Part II of this 10-K. The critical accounting estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below.
Current wording
Our significant accounting estimates are discussed in more detail in Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of Part II of this 10-K.
Previous wording
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies for up to five years or until we are no longer an emerging growth company. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.
Current wording
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies for up to five years or until such companies are no longer emerging growth companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We have elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Accordingly, the consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.