BRC Inc.

9. Business Optimization Plans

2025 Operational Improvement Plan

Beginning in the second quarter of fiscal year 2025, we implemented an Operational Improvement Plan (the "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 84 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, and are reported as "Cost of goods sold" and "General and administrative", respectively, in our consolidated statements of operations.

As of September 30, 2026, accrued restructuring costs related to the Operational Improvement Plan, consist of the following (dollars in thousands, unaudited):

Project Core

During the third quarter of 2026, management committed to Project Core (together with the Operational Improvement Plan, the "Business Optimization Plans"), a multi-year initiative to strengthen our core coffee business, improve profitability, simplify our operations and reduce the capital intensity of our business. As part of Project Core, we plan to close 12 company-operated Outposts by the end of the first quarter of 2027. During the third quarter of 2026, we recognized $11,980 of related costs, net, consisting of $11,698 of non-cash impairment charges and $3,501 of cash lease modification fees, partially offset by a $3,219 non-cash gain on lease modifications (see Note 3, Supplemental Balance Sheet Information). We are not yet able to reasonably estimate the total costs of Project Core because the remaining actions have not been finalized. The unpaid lease modification fees are included in "Operating lease liability" on our consolidated balance sheets as of September 30, 2026, and there wereno other accrued liabilities as a result of Project Core.