BRC Inc.

10. Operational Improvement Plan

Beginning in the second quarter of fiscal year 2025, management implemented an Operational Improvement Plan to reduce costs and improve the efficiency of certain company-wide functions. These costs pertained primarily to workforce reductions. In the third quarter of 2025, the Operational Improvement Plan was modified as a result of the relocation of our corporate headquarters, as well as the relocation of our inventory resulting from a change in third party logistics providers. The actions for this plan were substantially complete by the end of the first quarter of 2026.

Headcount was reduced by approximately 68 employees across the Company as part of the Operational Improvement Plan. No liabilities were excluded due to the inability to estimate fair value. Accrued severance costs are expected to be paid by the end of the fourth quarter of fiscal year 2026 and are included in "Salaries, wages, and benefits" in our consolidated statement of operations.

Transition costs incurred relate to the relocation of our corporate headquarters, as well as the relocation of our inventory during the third and fourth quarters of 2025, and are reported as "Cost of goods sold" and "General and administrative", respectively, in our consolidated statements of operations.

As of March 31, 2026, accrued restructuring costs related to the 2025 Operational Improvement Plan, consist of the following (dollars in thousands, unaudited):