What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-04-02 compared with 2025-04-10 · 228 added, 195 removed, 798 unchanged (35% of the section changed)

47 unchanged sentences

Trading Arrangements

On January 10, 2025 , Shawn D.

Nelson , CEO , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 24,000 shares of the Company’s common stock.

Nelson's plan will expire on January 10, 2026 , subject to early termination for certain specified events set forth in the plan.

No other director or officer of the Company (as defined in Section 16 of the Securities Exchange Act of 1934, as amended) adopted , modified or terminated a Rule 10b5-1 trading arrangement or a non- Rule 10b5-1 trading arrangement (each as defined in Item 408 (a) and (c) of Regulation S-K) during the thirteen weeks ended February 2, 2025.

Transactions by Section 16 directors and officers will be disclosed publicly through Form 4 filings with the SEC to the extent required by law.

No director or officer of the Company (as defined in Section 16 of the Securities Exchange Act of 1934, as amended) adopted , modified or terminated a Rule 10b5-1 trading arrangement or a non- Rule 10b5-1 trading arrangement (each as defined in Item 408 (a) and (c) of Regulation S-K) during the thirteen weeks ended February 1, 2026.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

8 unchanged sentences

Nelson is also fluent in Mandarin.

Mary Fox 52 President and Chief Operating Officer Mary Fox is the President and Chief Operating Officer of Lovesac since November 2021.

Mary Fox 53 President

Mary Fox served as the President of Lovesac since November 2021.

Previously, she served as General Manager for North America Consumer Products at BIC from 2018 to November 2021.

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51 Executive Vice President, Chief Financial Officer and Treasurer

Keith Siegner is Executive Vice President, Chief Financial Officer and Treasurer of The Lovesac Company.

Keith Siegner served as Executive Vice President, Chief Financial Officer and Treasurer of The Lovesac Company since June 2023.

From April 2021 to February 2023, he served as Chief Financial Officer of Vindex, LLC, a leading global esports technology and infrastructure company that was sold to Savvy Games Group in February 2023.

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Executive Compensation.

The information required by this Item will appear in the 2025 Proxy Statement and is incorporated by reference herein.

The information required by this item is incorporated by reference to the section entitled "Compensation Discussion and Analysis" in our Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item will appear in the 2025 Proxy Statement and is incorporated by reference herein.

The information required by this item is incorporated by reference to the section entitled "Security Ownership Of Certain Beneficial Owners And Management" in our Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item will appear in the 2025 Proxy Statement and is incorporated by reference herein.

The information required by this item is incorporated by reference to the section entitled "Certain Relationship and Related Transactions" and "Corporate Governance" in our Proxy Statement.

Principal Accountant Fees and Services.

The information required by this Item will appear in the 2025 Proxy Statement and is incorporated by reference herein.

The information required by this item is incorporated by reference to the section entitled "Proposal 3:

Ratification of the Appointment of Our Independent Registered Public Accounting Firm" in our Proxy Statement.

Exhibits, Financial Statement Schedules.

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Balance Sheets – As of February 1, 2026 and February 2, 2025

Statements of Operations – Years Ended February 2, 2025, February 4, 2024, and January 29, 2023

Statements of Changes in Stockholders’ Equity - Years Ended February 2, 2025, February 4, 2024, and January 29, 2023

Statements of Cash Flows - Years Ended February 2, 2025, February 4, 2024, and January 29, 2023

Statements of Operations – Years Ended February 1, 2026, February 2, 2025, and February 4, 2024

Statements of Changes in Stockholders’ Equity - Years Ended February 1, 2026, February 2, 2025, and February 4, 2024

Statements of Cash Flows - Years Ended February 1, 2026, February 2, 2025, and February 4, 2024

Notes to Financial Statements

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EXHIBIT INDEX

Number Description of Exhibit Filed / Incorporated by Reference from Form ** Incorporated by Reference from Exhibit Number Dated Filed

Number Description of Exhibit Filed / Incorporated by Reference from Form ** Incorporated by Reference from Exhibit Number Date Filed

2.1 Assignment and Assumption Agreement

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S-1 10.5 4/20/2018

Employment Agreement dated October 26, 2017, by and between The Lovesac Company and Shawn Nelson

S-1 10.6 4/20/2018

First Amendment to Employment Agreement dated October 2, 2019, by and between The Lovesac Company and Shawn Nelson

10-K 10.8 4/14/2021

Second Amendment to Employment Agreement dated March 24, 2022, by and between The Lovesac Company and Shawn Nelson

10-K 10.14 3/30/2022

10.7± Amended and Restated Employment Agreement dated March 23, 2023, by and between The Lovesac Company and Shawn Nelson

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8-K 10.3 11/12/2021

Mary Fox Resignation Letter from Board of Directors, dated November 9, 2021

8-K 10.4 11/12/2021

10.10± Form of Stock Option Award Agreement

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10.12± The Lovesac Company Director Compensation Policy, as amended, dated February 2, 2025

Filed herewith.

10-K 10.16 4/10/2025

10.13† Amendment No.

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10.22 3/29/2023

Employment Agreement between the Company and Keith Siegner, dated June 1, 2023

10-K 10.24 4/11/2024

10.14± Offer Letter between the Company and Keith Siegner, dated May 1 1 , 2023

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10-K 10.27 4/11/2024

Number Description of Exhibit Filed / Incorporated by Reference from Form ** Incorporated by Reference from Exhibit Number Dated Filed

10.16 First Amendment to Retailer Program Agreement between Synchrony Bank (formerly GE Capital Retail Bank) and the Company (formerly SAC Acquisition LLC), dated September 1, 2014

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10-K 10.30 4/11/2024

Ei ghth Amendment to Credit Agreement, dated as of Sept ember 7, 2023 , by and among The Lovesac Company, Wells Fargo Bank, National Association, as agent, swing line lender and L/C issuer, and the other lenders party thereto.

Number Description of Exhibit Filed / Incorporated by Reference from Form ** Incorporated by Reference from Exhibit Number Date Filed

10.19 Fourth Amendment to Retailer Program Agreement between Synchrony Bank and the Company (formerly SAC Acquisition LLC), dated November 4, 2025 , and effective as of October 1, 2025

Filed herewith.

Eighth Amendment to Credit Agreement, dated as of September 7, 2023, by and among The Lovesac Company, Wells Fargo Bank, National Association, as agent, swing line lender and L/C issuer, and the other lenders party thereto.

10-K 10.24 4/10/2025

Ninth Amendment to Credit Agreement, dated as of July 29, 2024, by and among The Lovesac Company, Wells Fargo Bank, National Association, as agent, swing line lender and L/C issuer, and the other lenders party thereto.

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8-K 10.1 6/14/2024

19.1 The Loves ac Company I nsider Trading Policy , as amended

10.23± Cash-Based Award Agreement

10.1 6/12/2025

10.24± Am ended and Restated Employ ment A greement , dated as of February 23, 20 26, between The Lovesac Company and Keith Siegner

Filed herewith.

19.1 The Lovesac Company Insider Trading Policy, as amended September 9, 2025

Filed herewith.

21.1 List of Subsidiaries

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101.LAB XBRL Taxonomy Extension Label Linkbase Document

Number Description of Exhibit Filed / Incorporated by Reference from Form ** Incorporated by Reference from Exhibit Number Dated Filed

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

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Shirley Romig

/s/ John Grafer April 10, 2025

/s/ Jack Krause April 10, 2025

/s/ Alan Boehme

April 2, 2026

/s/ Wan Ling Martello

April 2, 2026

Wan Ling Martello

/s/ Vineet Mehra April 2, 2026

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FINANCIAL STATEMENTS

AS OF FEBRUARY 2, 2025 AND FEBRUARY 4, 2024 AND FOR THE YEARS ENDED FEBRUARY 2, 2025, FEBRUARY 4, 2024, AND JANUARY 29, 2023

AS OF FEBRUARY 1, 2026 AND FEBRUARY 2, 2025 AND FOR THE YEARS ENDED FEBRUARY 1, 2026, FEBRUARY 2, 2025, AND FEBRUARY 4, 2024

THE LOVESAC COMPANY

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Fair value is estimated using various considerations including the cost of similar media advertising if transacted directly, the expected sales price of product given up in exchange for the media credits, and the expected usage of media credits prior to expiration based on a forecasted media spend subject to media credits under the barter arrangement.

For the year ended February 2, 2025, the Company recognized $9.0 million of barter sales in exchange for media credits.

For the year ended February 1, 2026, the Company did not recognize any new barter sales in exchange for media credits.

The Company recognizes an asset for media credits which is subsequently evaluated for impairment at each reporting period for

1 unchanged sentence

As of February 1, 2026, the Company had $32.6 million of unused media credits and did not recognize any impairment.

We identified the barter arrangement as a critical audit matter because of the significant estimate and assumptions management makes to determine the transaction price based on the estimated fair value of the non-cash consideration received in exchange for the media credits and of forecasted media spend used to evaluate the unused media credits for potential impairment.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimate of the fair value of the sale transaction price and future utilization of media credits.

We identified the recoverability of the barter credits as a critical audit matter because of the significant estimate and assumptions management makes to determine the forecasted media spend used to evaluate the unused media credits for potential impairment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to barter arrangement included the following, among others:

◦ We tested the effectiveness of controls over the determination of the transaction price.

Our audit procedures related to the barter arrangement included the following, among others:

• We tested the effectiveness of controls over the assessment of recoverability of the barter credits

• We read the underlying barter transaction agreements

◦ For a sample of barter sale transactions, we tested that the sale occurred and the estimated fair value of the sale transaction price, as follows:

▪ Obtained shipping documents that evidenced the transfer of control of the related inventory.

• We tested the realizability of the barter credits, as follows:

◦ Compared management’s estimate of advertising costs to the actual advertising costs incurred for selected promotional campaigns subject to the barter arrangement from the third-party vendor.

▪ Compared the transaction price of the inventory sold through the bartering agreement to the transaction price of like inventory sold to other third-party customers.

▪ Tested the underlying assumptions to management’s analysis to determine their ability to utilize media credits by 1) making inquiries of management related to their projected advertising and media spend, 2) performing a lookback analysis of total marketing spend and specific marketing spend with the third-party vendor, and 3) comparing the forecasts to the amounts included in the overall business forecast as communicated to the Board of Directors.

◦ Tested the underlying assumptions to management’s analysis to determine their ability to utilize media credits by 1) making inquiries of management related to their projected advertising and media spend that are eligible for use of the barter credits, 2) performing a lookback analysis of total marketing spend and specific marketing spend with the third party vendor, and 3) comparing the forecasts to the amounts included in the overall business forecast as communicated to the Board of Directors.

/s/ Deloitte & Touche LLP

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STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED FEBRUARY 2, 2025, FEBRUARY 4, 2024, AND JANUARY 29, 2023

FOR THE YEARS ENDED FEBRUARY 1, 2026, FEBRUARY 2, 2025, AND FEBRUARY 4, 2024

(amounts in thousands, except per share data and share amounts) 2026 2025 2024

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Operating income 5,363 13,648 30,076

Interest and other income (expense), net 2,801 1,747 ( 117 )

Interest and other income, net 1,302 2,801 1,747

Net income before taxes 6,665 16,449 31,823

10 unchanged sentences

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED FEBRUARY 2, 2025, FEBRUARY 4, 2024, AND JANUARY 29, 2023

Common Additional Paid-in Capital Accumulated Earnings

(Deficit) Total Shareholders' Equity

FOR THE YEARS ENDED FEBRUARY 1, 2026, FEBRUARY 2, 2025, AND FEBRUARY 4, 2024

Common Additional Paid-in Capital Accumulated Earnings Total Shareholders' Equity

(amounts in thousands, except share amounts) Shares Amount

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Taxes paid for net share settlement of equity awards — — ( 3,675 ) — ( 3,675 )

Balance - January 29, 2023 15,195,698 — 182,554 10,540 193,094

Exercise of warrants 74,592 — — — —

Balance - February 4, 2024 15,489,364 — 183,095 34,401 217,496

Net income — — — 11,556 11,556

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Vested restricted stock units 75,283 — — — —

Repurchases of common stock ( 777,713 ) — — ( 20,112 ) ( 20,112 )

Taxes paid for net share settlement of equity awards — — ( 530 ) — ( 530 )

Exercise of warrants 74,592 — — — —

Balance - February 2, 2025 14,786,934 — 190,510 25,845 216,355

8 unchanged sentences

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED FEBRUARY 2, 2025, FEBRUARY 4, 2024, AND JANUARY 29, 2023

FOR THE YEARS ENDED FEBRUARY 1, 2026, FEBRUARY 2, 2025, AND FEBRUARY 4, 2024

(amounts in thousands) 2026 2025 2024

1 unchanged sentence

Net income $ 4,065 $ 11,556 $ 23,861

Adjustments to reconcile net income to cash provided by (used in) operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization of property and equipment 14,887 14,292 12,174

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Gain on lease termination ( 167 ) — ( 131 )

Impairment of long-lived assets 1,541 — —

Equity based compensation 5,510 7,945 4,216

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Other liabilities 40 ( 28 ) 452

Net cash provided by (used in) operating activities 38,977 76,441 ( 21,375 )

Net cash provided by operating activities 49,328 38,977 76,441

Cash Flows from Investing Activities

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Asset acquisitions not yet paid for at period end $ 1,806 $ 1,240 $ 1,576

Leasehold improvements acquired through lease incentive $ 1,824 $ — $ —

Excise tax on share repurchases, accrued but not paid $ 46 $ 183 $ —

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The Lovesac Company (the “Company”, “we”, “us” or “our”) is a technology driven company that designs, manufactures and sells unique, high quality furniture derived through its proprietary "Designed for Life" approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do.

The Company markets and sells its products through modern and efficient showrooms and, increasingly, through online sales directly at www.lovesac.com, supported by direct-to-consumer touch points in the form of our own showrooms, which include our mobile concierge and kiosks, as well as through shop-in-shops and online pop-up-shops with third party retailers.

As of February 2, 2025, the Company operated 257 showrooms including kiosks and mobile concierges located throughout the United States.

The Company was formed as a Delaware corporation on January 3, 2017, in connection with a corporate reorganization with SAC Acquisition LLC, a Delaware limited liability company (“SAC LLC”), the predecessor entity to the Company.

The Company markets and sells its products through an omni-channel platform that includes direct-to-consumer touch points in the form of our own showrooms and online directly at www.lovesac.com.

As of February 1, 2026, the Company operated 278 showrooms located throughout the United States.

Basis of Presentation

The financial statements of the Company as of February 2, 2025 and February 4, 2024 and for the years ended February 2, 2025, February 4, 2024 and January 29, 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission.

The financial statements of the Company as of February 1, 2026 and February 2, 2025 and for the years ended February 1, 2026, February 2, 2025 and February 4, 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission.

The Company’s fiscal year is determined on a 52/53 week basis ending on the Sunday closest to February 1.

Hereinafter, fiscal years ended February 2, 2025, February 4, 2024 and January 29, 2023 are referred to as fiscal 2025, 2024 and 2023, respectively.

Fiscal 2025, 2024 and 2023 were 52-week, 53-week and 52-week fiscal years, respectively.

Hereinafter, fiscal years ended February 1, 2026, February 2, 2025 and February 4, 2024 are referred to as fiscal 2026, 2025 and 2024, respectively.

Fiscal 2026 and 2025 were 52-week fiscal years and fiscal 2024 was a 53-week fiscal year.

Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

The Company evaluates its estimates and judgements on an ongoing basis based on historical experience, expectations of future events and various other factors we believe to be reasonable under the circumstances and revise them when necessary in the period the change is determined.

The preparation of financial statements in conformity with US GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

The Company evaluates its estimates and judgments on an ongoing basis based on historical experience, expectations of future events and various other factors we believe to be reasonable under the circumstances and revise them when necessary in the period the change is determined.

Actual results may differ from the original or revised estimates.

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During fiscal 2026, 2025 and 2024, the Company recognized $ 11.3 million, $ 8.3 million and $ 6.8 million, respectively, related to customer deposits from fiscal 2025, 2024 and 2023, respectively.

The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms, which include mobile concierge and kiosks, and through the internet.

The Other channel predominantly represents net sales through the use of online and in-store pop-up shops, shop-in-shops, and barter inventory transactions.

The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms and through the internet.

The Other channel predominantly represents net sales through the use of online and in-store pop-up shops, shop-in-shops, barter inventory transactions, and the Loved by Lovesac program.

In-store pop-up-shops and shop-in-shops are staffed with associates trained to demonstrate and sell our product.

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The Company has a bartering arrangement with a third-party vendor.

The Company repurposes returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth.

The Company has the option to repurpose returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth.

Barter transactions with commercial substance are recorded at a transaction price based on the estimated fair value of the non-cash consideration of the media credits to be received and the revenue is recognized when control of inventory is transferred, which is when the inventory is picked up in our warehouse.

1 unchanged sentence

The Company recognizes an asset for media credits which is subsequently evaluated for impairment at each reporting period for any changes in circumstances.

As the barter credits are expected to be utilized at various dates through their expiration dates, the Company will classify the amount expected to be utilized in the next fiscal year as current, which is included in Prepaid expenses, with the remaining balance included as part of Other assets on the balance sheet.

For fiscal 2025, 2024, and 2023, the Company recognized $ 9.0 million, $ 12.3 million, and $ 21.3 million, respectively, of barter sales in exchange for media credits.

As the barter credits are expected to be utilized at various dates through their expiration dates, the Company classifies the amount expected to be utilized in the next fiscal year as current, which is included in Prepaid expenses, with the remaining balance included as part of Other assets on the balance sheet.

The Company did not recognize any barter sales in exchange for media credits in fiscal 2026.

For fiscal 2025 and 2024, the Company recognized $ 9.0 million and $ 12.3 million, respectively, of barter sales in exchange for media credits.

As of February 1, 2026, and February 2, 2025, the Company had $ 2.2 million and $ 5.3 million, respectively, of unused media credits expected to be utilized in the next fiscal year classified as current, and the remaining balance of $ 30.4 million and $ 31.4 million, respectively, classified as non-current.

1 unchanged sentence

The Company did not recognize any impairment for fiscal 2026, 2025, and 2024.

The difference between the opening and closing balances of the Company's prepaid barter credit primarily results from the inventory exchanged for media credits during the period, offset by utilization of those credits.

The difference between the opening and closing balances of the Company's prepaid barter credit primarily results from the utilization of media credits.

Cash and Cash Equivalents

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Recoveries of amounts previously written off are recorded when received.

Historically, collection losses have been immaterial as a significant portion of the Company’s receivables are related to individual credit card transactions and two wholesale customers.

Historically, collection losses have been immaterial as a significant portion of the Company’s receivables are related to individual credit card transactions and one wholesale customer.

For fiscal 2026, 2025, and 2024, the Company recognized $ 0.8 million, $ 0.4 million, and $ 1.0 million , respectively, related to bad debt write-offs.

3 unchanged sentences

Wholesale receivables 2,054 5,660

Other receivables 68 —

Total trade accounts receivable, net $ 11,733 $ 16,781

The Company had two wholesale customers that comprised 100 % of wholesale receivables at February 2, 2025 and February 4, 2024, respectively.

The Company had one wholesale customer that comprised 100 % of wholesale receivables at February 1, 2026 and two wholesale customers that comprised 100 % of wholesale receivable at February 2, 2025.

Prepaid Expenses

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Private Label Credit Card

The Company has an agreement with Synchrony Bank (formerly GE Capital Retail Bank) (“Issuer”) to provide clients with private label credit cards (the “Retailer Program Agreement”) which was amended on March 24, 2023 to extend the term of the agreement through March 31, 2026.

The Company has an agreement with Synchrony Bank (formerly GE Capital Retail Bank) (“Issuer”) to provide clients with private label credit cards (the “Retailer Program Agreement”) which was amended effective October 1, 2025 to extend the term of the agreement through March 31, 2031.

Each private label credit card bears The Lovesac Company brand logo and can only be used at the Company’s Showroom locations or website.

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The Company sells gift certificates and issues merchandise credits to its customers in the showrooms and through its website.

Revenue associated with gift certificates and merchandise credits is deferred until redemption of the gift certificate

and merchandise credits.

Revenue associated with gift certificates and merchandise credits is deferred until redemption of the gift certificate and merchandise credits.

The Company did not recognize any breakage revenue in fiscal 2026, 2025 or 2024 as the Company continues to honor all outstanding gift certificates.

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Total $ 7,581 $ ( 5,208 ) $ 2,373 $ 6,475 $ ( 4,889 ) $ 1,586

Amortization expense was $ 0.4 million in fiscal 2025, 2024, and 2023.

Amortization expense was $ 0.3 million in fiscal 2026, and $ 0.4 million in fiscal 2025 and 2024.

The following table presents the future expected amortization expense as of February 1, 2026 (in thousands):

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If required, an impairment loss is recorded for that portion of the assets' carrying value in excess of fair value.

In fiscal 2025, 2024, and 2023, the Company did not recognize any impairment charges associated with showroom-level right of use lease assets.

In June 2025, the Company initiated a cost-reduction plan that included the termination of its partnership with Best Buy.

As part of this plan, the Company executed the wind down of its Best Buy shop-in-shop locations, with closures and related workforce reductions.

This process was completed during the fourth quarter of fiscal 2026.

As a result of the Exit, the Company assessed the recoverability of long-lived assets associated with the affected locations.

For fiscal 2026, the Company recorded an impairment charge of $ 1.5 million related to property and equipment at the shop-in-shop locations.

For additional information, see Note 2.

Property and Equipment, net .

In fiscal 2025 and 2024, the Company did not recognize any impairment charges associated with long-lived assets.

Product Warranty

5 unchanged sentences

Warranty reserve was $ 3.0 million and $ 2.4 million as of February 1, 2026 and February 2, 2025, respectively, which was included in accrued expenses.

The Company leases its office, warehouse facilities and retail showrooms under operating lease agreements which expire at various dates through April 2035.

The Company leases its office, warehouse facilities and retail showrooms under operating lease agreements which expire at various dates through March 2040.

Leases with an initial term of twelve months or less are not recorded on the balance sheet and are expensed as incurred over the lease term in the Statements of Operations.

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inbound freight;

all freight costs to ship merchandise to our showrooms, and warehousing and all logistics costs associated with shipping product to our customers.

Certain of our competitors and other retailers may report gross profit differently than we do, by excluding from gross profit some or all of the costs related to their distribution network and instead including them in selling, general and administrative expenses.

freight costs to ship merchandise to our showrooms, and warehousing and all logistics costs associated with shipping product to our customers.

Certain competitors and other retailers may report gross profit differently than we do, by excluding from gross profit some or all of the costs related to their distribution network and instead including them in selling, general and administrative expenses.

As a result, the reporting of our gross profit and profit margin may not be comparable to other companies.

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showroom expenses, including occupancy costs related to showroom operations, such as rent and common area maintenance;

occupancy and expenses related to many of our operations at our headquarters, including utilities, equity based compensation, financing related expenses and public company expenses;

occupancy and expenses related to many of our operations at our headquarters, including utilities, equity based compensation, financing related expenses;

public company expenses;

customer financing fees;

and credit card transaction fees.

2 unchanged sentences

Research and development costs are charged to expense in the period incurred.

Research and development expense were $ 8.4 million, $ 7.7 million, and $ 8.4 million in fiscal years 2025, 2024, and 2023, respectively.

Research and development expense were $ 7.0 million, $ 8.4 million, and $ 7.7 million in fiscal 2026, 2025, and 2024, respectively.

Employee Benefit Plan

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Participants are able to contribute up to 100 % of their eligible compensation to the 401(k) Plan subject to limitations with the IRS.

Employer contributions to the 401(k) Plan for fiscal years 2025, 2024, and 2024 were approximately $ 2.1 million, $ 1.6 million, and $ 1.3 million, respectively.

Employer contributions to the 401(k) Plan for fiscal 2026, 2025, and 2024 were approximately $ 2.2 million, $ 2.1 million, and $ 1.6 million, respectively.

Advertising Expenses

Advertising expense include digital, social, and traditional advertising that covers all of our business channels.

Advertising expenses include digital, social, and traditional advertising that covers all of our business channels.

All advertising costs are expensed as incurred, or upon the release of the initial advertisement.

Total advertising expenses were $ 77.4 million, $ 82.3 million, and $ 71.4 million in fiscal years 2025, 2024, and 2023, respectively.

Total advertising expenses were $ 75.1 million, $ 77.4 million, and $ 82.3 million in fiscal 2026, 2025, and 2024, respectively.

Showroom Preopening and Closing Costs

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Recent Accounting Pronouncements

The Company has considered all recent accounting pronouncements issued by the Financial Accounting Standards Board and they were considered to be not applicable or the adoption of such pronouncements will not have a material impact on the financial statements.

The Company has considered all recent accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") and they were considered to be not applicable or the adoption of such pronouncements will not have a material impact on the financial statements.

Recent Accounting Pronouncements Adopted

Segment Reporting.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires all public entities to provide enhanced disclosures about significant segment expenses.

The amendments in this ASU are to be applied retrospectively and are effective for our annual financial statements starting in fiscal 2025 and interim periods starting in fiscal 2026, with early adoption permitted.

On February 5, 2024, the Company adopted ASU 2023-07 with impact to its disclosures only and no impacts to its results of operations, cash flows or financial condition.

Recent Accounting Pronouncements Not Yet Adopted

Income Taxes.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures.

This accounting standards update will be effective for us for fiscal year 2026 and interim periods beginning in

the first quarter of fiscal 2027, with early adoption permitted.

The Company expects this ASU to only impact its disclosures with no impacts to its results of operations, cash flows or financial condition.

Improvements to Income Tax Disclosures, amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation.

We adopted this ASU for fiscal 2026, on a retroactive basis.

Income Taxes.

Recent Accounting Pronouncements Not Yet Adopted

Intangibles-Goodwill and Internal-Use Software.

In September 2025, the FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which updates the cost capitalization threshold for internal-use software developments costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met.

This ASU is effective for annual periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating this ASU to determine the impact of adoption on its Condensed Financial Statements and related disclosures.

Disaggregation of income statement expenses.

3 unchanged sentences

The Company expects this ASU to only impact its disclosures with no impacts to its results of operations, cash flows or financial condition.

Climate-Related Disclosures.

In March 2024, the SEC passed rule changes that will require registrants to provide certain climate-related information in their registration statements and annual reports.

The new rules enhance and standardize climate-related disclosures in an effort to provide investors with more consistent, comparable and reliable information about the impact of climate-related risks on registrants.

The rules require disclosure of greenhouse gas (GHG) emissions in annual reports and registration statements Additionally, all registrants would be required to provide numerous climate-related disclosures within their financial statements and elsewhere in their filings.

In April 2024, the SEC released an order staying this final rule pending judicial review of all the petitions challenging the rule.

The Company is currently evaluating the impact of the potential rule change.

This accounting standards update would be effective for us for fiscal year 2027.

Property and Equipment, net

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Computers 3 Years 4,634 5,747

Tools, Dies, Molds 5 Years 1,525 779

Tools, Dies, Molds Shorter of 5 years or purchase agreement term

Vehicles 5 Years 496 497

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Depreciation and amortization expense was $ 14.9 million, $ 14.3 million, and $ 12.2 million in fiscal 2026, 2025, and 2024, respectively.

In June 2025, the Company initiated a cost-reduction plan that included the termination of its partnership with Best Buy.

As part of this plan, the Company executed the wind down of its Best Buy shop-in-shop locations (the "Exit"), with closures and related workforce reductions.

This process was completed during the fourth quarter of fiscal 2026.

As a result of the Exit, the Company assessed the recoverability of long-lived assets associated with the affected locations.

For fiscal 2026, the Company recorded an impairment charge of $ 1.5 million related to property and equipment at the shop-in-shop locations.

The impairment was determined by comparing the carrying amount of the assets to the estimated undiscounted future cash flows.

As the carrying amounts were not recoverable, the assets were written down to their estimated fair values, which were determined using a discounted cash flow model based on historical performance and expected future profitability.

These impairment charges are included within selling, general and administrative expense in the Statements of Operations.

As part of the Exit, the Company incurred severance and other one-time employee termination benefits, as well as costs associated with decommissioning the Best Buy shop-in-shop locations.

These costs did not have a material impact on the financial statements.

Accrued Expenses

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Total Accrued Expenses $ 38,788 $ 51,986

(1) Other accrued expenses consists primarily of professional fees, credit card fees, rent, property and equipment, and other operating costs.

(1) Other accrued expenses consists primarily of professional fees, credit card fees, tax contingencies, rent, property and equipment, and other operating costs.

The Company is subject to federal, state and local corporate income taxes.

The components of the provision for income taxes reflected on the statements of operations for fiscal 2025, 2024, and 2023 are set forth below:

The components of the provision for income taxes reflected on the statements of operations for fiscal 2026, 2025, and 2024 are set forth below (in thousands):

2026 2025 2024

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Total income tax expense $ 2,600 $ 4,893 $ 7,962

A reconciliation of income taxes at the federal statutory corporate rate to the effective rate for fiscal 2025, 2024, and 2023 is as follows:

A reconciliation of income taxes at the federal statutory corporate rate to the effective rate for fiscal 2026, 2025, and 2024 after the adoption of ASU 2023-09 is as follows (dollar amounts in thousands):

2026 2025 2024

Provision (benefit) at federal Statutory rates 21.0 % 21.0 % 21.0 %

State tax, net of federal provision (benefit) 6.6 % 5.1 % 4.9 %

Non-deductible executive compensation — % 0.3 % 1.8 %

Permanent adjustments 0.2 % 0.1 % 0.2 %

Federal tax at statutory rate $ 1,399 21.0 % $ 3,454 21.0 % $ 6,683 21.0 %

State and local income taxes, net of federal effect (1)

512 7.7 % 1,078 6.6 % 1,632 5.1 %

R&D Tax Credit ( 233 ) ( 3.5 ) % ( 353 ) ( 2.2 ) % ( 1,131 ) ( 3.6 ) %

Non-taxable or non-deductible items:

Section 162(m) Limit on Compensation 262 3.9 % — — % 149 0.5 %

Share-based compensation 577 8.7 % 442 2.7 % 81 0.3 %

Penalties 10 0.1 % 316 1.9 % 8 — %

Equity-based compensation 2.7 % 0.5 % 0.1 %

Research and development credit ( 2.1 ) % ( 3.6 ) % — %

Meals and Entertainment 21 0.3 % 30 0.2 % 24 0.1 %

Changes in unrecognized tax benefits 75 1.1 % ( 38 ) ( 0.2 ) % 452 1.4 %

Other ( 23 ) ( 0.3 ) % ( 36 ) ( 0.2 ) % 64 0.2 %

Uncertain tax benefits ( 0.2 ) % 1.4 % — %

Effective tax rate 29.7 % 25.0 % 28.1 %

Total income tax expense $ 2,600 39.0 % $ 4,893 29.7 % $ 7,962 25.0 %

(1) The following states make up the majority of the tax effect in this category:

Fiscal 2026—California, Florida, Maryland, Virginia, Illinois, Pennsylvania, New Jersey, and New York;

Fiscal 2025—California, New Jersey, Pennsylvania, Illinois, Florida, New York, and Maryland;

Fiscal 2024—California, New Jersey, Illinois, Pennsylvania, Florida, Maryland, and New York.

The following table presents income taxes paid, net of refunds received, disaggregated by jurisdiction (in thousands):

Jurisdiction 2026 2025 2024

Federal $ 7,343 $ 6,000 $ 1,108

States 2,630 2,447 702

Total $ 9,973 $ 8,447 $ 1,810

Significant components of the Company's deferred tax assets are as follows (in thousands):

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Deferred Income Tax Assets

Federal net operating loss carryforward $ 2,252 $ —

State net operating loss carryforward 334 286

Research and development credit carryforward 181 —

Intangible assets 433 467

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Merchandise inventories 5,621 4,534

Charitable contributions 13 —

Research and development capitalization 2,091 4,183

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Net Deferred Income Tax Asset $ 13,387 $ 15,277

At February 2, 2025 and February 4, 2024, the Company did no t have any net operating loss carryforwards available for federal income tax purposes.

At February 1, 2026, the Company had $ 10.7 million of net operating loss carryforwards available for federal income tax purposes.

At February 2, 2025, the Company did no t have any net operating loss carryforwards available for federal income tax purposes.

The Company has approximately $ 6.4 million and $ 4.8 million of state net operating loss carryforwards as of February 1, 2026 and February 2, 2025, respectively.

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The Company recognizes only those tax positions that meet the more-likely-than-not recognition threshold and establishes tax reserves for uncertain tax positions that do not meet this threshold.

As of February 2, 2025 and February 4, 2024, the Company has unrecognized tax benefits of $ 0.4 million and $ 0.5 million, respectively.

As of February 1, 2026 and February 2, 2025, the Company had unrecognized tax benefits of $ 0.4 million at each reporting date.

The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months;

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The amended returns did not have a material impact to the financial statements.

On August 16, 2022, the Inflation Reduction Act was signed into law.

The Inflation Reduction Act includes various tax provisions, which are effective for tax years beginning on or after January 1, 2023.

The Company assessed and concluded that the Inflation Reduction Act did not have an impact to the financials as of February 2, 2025, and will continue to monitor the impact of the changes.

For tax years beginning after December 31, 2021, the Tax Cuts & Jobs Act of 2017 eliminated the option to deduct research and development expenditures as incurred and instead required taxpayers to capitalize and amortize them over five or 15 years beginning in 2022.

For fiscal 2025, 2024, and 2023, due to the capitalization of research and development expenditures, the Company’s current federal taxable income increased by approximately $ 7.5 million, $ 9.0 million, and $ 7.7 million , respectively, with a corresponding increase in the Company’s deferred tax assets.

The Company will continue to monitor the impact of changes in tax legislation.

For fiscal 2025 and 2024, due to the capitalization of research and development expenditures, the Company’s current federal taxable income increased by approximately $ 7.5 million and $ 9.0 million, respectively, with a corresponding increase in the Company’s deferred tax assets.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law.

The OBBBA includes various changes to U.S.

federal income tax law, including extensions of several expiring provisions from the Tax Cuts and Jobs Act of 2017.

The OBBBA has multiple effective dates, with certain provisions effective in 2025.

The OBBBA did not have a material impact on the Company’s effective tax rate for year ended February 1, 2026.

The Company will continue to evaluate the impact of the new legislation on its consolidated financial statements as additional guidance is issued.

Basic and Diluted Net Income Per Common Share

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Weighted-average number of common shares outstanding, basic 14,684,339 15,502,469 15,427,975

15,502,469 15,427,975 15,198,754

Effect of dilutive securities (1)(2)

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Weighted-average number of common shares outstanding, diluted 14,695,579 16,791,471 16,460,383

16,791,471 16,460,383 15,955,668

Basic net income per share $ 0.28 $ 0.75 $ 1.55

$ 0.75 $ 1.55 $ 1.74

Diluted net income per share $ 0.28 $ 0.69 $ 1.45

$ 0.69 $ 1.45 $ 1.66

(1) The effect of dilutive securities includes unvested restricted stock units, stock options and warrants.

During fiscal 2024, all remaining outstanding warrants were exercised.

For fiscal 2025, 2024, and 2023, the effects of 495,366 stock options outstanding were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive.

For fiscal 2026, the effects of 385,285 stock options outstanding, which would have been anti-dilutive, were excluded from the computation of diluted net income per share.

For fiscal 2025 and 2024, the effects of 495,366 stock options outstanding, which would have been anti-dilutive, were excluded from the computation of diluted net income per share.

(2) The Company prospectively corrected the diluted earnings per share calculation.

The impact to previous years was not material.

Components of lease expense were as follows (in thousands):

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Total lease expense $ 43,506 $ 41,934 $ 43,595

Variable lease expense includes percentage rent, maintenance, sales tax on rent, insurance and other variable charges included in the lease as well as rental expenses related to short term leases.

Variable lease expense includes percentage rent, maintenance, real estate taxes, insurance and other variable charges included in the lease as well as rental expenses related to short term leases.

During fiscal 2026, 2025, and 2024, we did not recognize any impairment charges associated with showroom-level right-of-use assets.

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Non-cash activities:

Net additions to right-of-use assets obtained in exchange for lease obligations $ 22,639 $ 42,064 $ 53,239

Right-of-use assets obtained in exchange for lease obligations $ 28,840 $ 22,639 $ 42,064

Weighted average remaining lease term - operating leases 6.9 years 6.9 years 7.5 years

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Two similar shareholder derivative actions, captioned Valle v.

Dellomo , No.

3:24-cv-1327, and McKinnon v.

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3:24-cv-01260-VAB (i.e., the “Derivative Action”).

The parties have reached an agreement in principle to settle the Derivative Action, which is subject to execution of a definitive agreement and, among other conditions, approval by the Court.

If the contemplated settlement is ultimately concluded as agreed in principle, the Company believes the resolution will not have a material impact to the financial statements.

On May 19, 2025, the parties signed a definitive agreement to settle the Derivative Action.

On June 2, 2025, plaintiffs’ counsel filed an unopposed motion seeking preliminary approval of the settlement.

On June 3, 2025, the Court granted the motion for preliminary approval.

On October 2, 2025, the Court approved the settlement as submitted by the parties, concluding the litigation.

On March 21, 2024, a putative class action complaint related to the Company’s pricing was filed against the Company.

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On February 7, 2025, the court unstayed the proceedings in the case for the purpose of ruling on the Company's pending motion to dismiss.

On March 28, 2025, the court granted the Company's motion to dismiss with leave to amend, but dismissed Plaintiff's request for injunctive relief without leave to amend.

The court provided the plaintiff 30 days to file another amended complaint.

If the plaintiff amends his complaint, the Company will have 21 days to file a responsive pleading.

On March 28, 2025, the court granted the Company's motion to dismiss with leave to amend, but dismissed the plaintiff's request for equitable relief, including injunctive relief, without leave to amend.

On April 18, 2025, the plaintiff filed a second amended complaint.

On June 2, 2025, the Company filed a motion to dismiss the plaintiff’s second amended complaint.

The Company’s motion to dismiss the plaintiff’s second amended complaint is pending a decision by the Court.

At this time, we are unable to reasonably estimate the possible loss or range of loss from this proceeding.

Financing Arrangements

Revolving Line of Credit

On February 6, 2018, the Company established a $ 25.0 million line of credit with Wells Fargo Bank, National Association ("Wells").

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Stockholders' Equity

Common Stock Warrants

On June 29, 2018, the Company issued 281,750 warrants with a five-year term and an average exercise price of $ 19.20 to Roth Capital Partners, LLC as part of the underwriting agreement in connection with the Company's IPO.

Warrants may be exercised on a cashless basis, where the holders receive fewer shares of common stock in lieu of a cash payment to the Company.

As of January 30, 2022, the weighted average contractual life of the 281,750 outstanding warrants was 1.4 years.

There were no warrants issued, exercised, or expired and canceled in fiscal 2023 and the weighted average remaining contractual life was 0.4 years as of January 29, 2023.

In fiscal 2024, Roth Capital Partners, LLC performed a cashless exercise of all 281,750 remaining outstanding warrants resulting in 74,592 net shares issued.

As of February 2, 2025, no warrants remain outstanding.

Equity Incentive Plans

Equity Incentive Plan

The Company adopted the Second Amended and Restated 2017 Equity Incentive Plan (the "2017 Equity Plan") which provides for awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance based restricted stock units, cash-based awards and other stock-based awards.

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In fiscal 2025, the 2017 Equity Plan was amended to increase the shares of our common stock authorized and reserved for issuance by 1,100,000 shares, which increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan to 3,979,889 shares of common stock.

Time-Based Restricted Stock Units

Time-based restricted stock units ("RSU awards") granted under the 2017 Equity Plan are generally subject to only a service-based vesting condition.

RSU awards vest equally over three years on the anniversary date of the grant date if employed at the time of vesting.

The valuation of these RSU awards is based solely on the fair value of the Company’s stock on the date of grant.

Performance-Based Restricted Stock Units

Performance-based restricted stock units ("PSU awards") granted under the 2017 Equity Plan are generally subject to both a service-based vesting condition and a performance-based vesting condition.

PSU awards will vest upon the achievement of specified performance targets and subject to continued service through the applicable vesting dates.

PSU awards will vest upon the achievement of specified performance targets established at the beginning of the performance period and subject to continued service through the applicable vesting date.

The stock-based compensation expense relating to PSU awards is recognized over the requisite service period when it is probable that the performance condition will be satisfied.

Stock Options

In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an exercise price of $ 38.10 per share.

100 % of the stock options are subject to vesting on the third anniversary of the date of grant if the officers are still employed by the Company and the average closing price of the Company’s common stock for the prior 40 consecutive trading days has been at least $ 75 by the third anniversary of the grant.

Both the employment and the market condition were originally to be satisfied no later than June 5, 2022 or the options would terminate.

These options were valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest.

The 495,366 stock options were modified in fiscal 2022 to extend the term of the options through June 5, 2024.

This resulted in additional compensation of approximately $ 0.9 million, of which, $ 0.3 million was recorded upon modification with the remaining expense to be recognized over the remaining expected term.

The market condition was met on June 5, 2021, which was the date on which the average closing price of the Company’s common stock had been at least $ 75 for 40 consecutive trading days.

The options vested and became exercisable on June 5, 2022 as the officers were still employed on that date.

There were no stock options issued, exercised, or expired and canceled during fiscal 2025, 2024, and 2023.

The following represents stock option activity during fiscal 2025, 2024, and 2023 :

Number of options Weighted average exercise price Weighted average remaining contractual life (in years) Average intrinsic value

Outstanding at January 30, 2022 495,366 $ 38.10 2.35 $ 6,162

Canceled and forfeited — —

Exercised — —

Outstanding at January 29, 2023 495,366 38.10 1.35 —

Canceled and forfeited — —

Exercised — —

Outstanding at February 4, 2024 495,366 38.10 5.34 —

Canceled and forfeited — —

Exercised — —

Outstanding and exercisable at February 2, 2025 495,366 $ 38.10 4.34 $ —

Time and Performance Based Restricted Stock Units

The following table summarizes the Company's RSU and PSU awards activity during fiscal 2025, 2024, and 2023:

In March 2023, Shawn Nelson, our Chief Executive Officer, received a one-time performance and retention long-term incentive grant of 235,000 Restricted Stock Units (the “RSU Grant”) pursuant to the 2017 Equity Plan and Mr.

Nelson’s Restricted Stock Units Agreement and Grant Notice (the “RSU Agreement”).

The RSU Grant vests on the later to occur of (i) the fifth anniversary of the date of grant so long as, (x) on or prior to such date (subject to certain limited extensions), the Company has achieved a specified level of performance with respect to share price and net sales, and (y) Mr.

Nelson remains in continuous service with the Company as Chief Executive Officer through such date;

or (ii) if the specified level of performance with respect to net sales is not achieved on or prior to the fifth anniversary of the date of grant, but the other conditions in subclause (i) are achieved, the first date that such specified level of performance with respect to net sales is achieved, so long as it is achieved on or prior to the seventh anniversary of the date of grant and so long as Mr.

remains in continuous service with the Company through such date.

Except in the event of termination of employment as defined in the 2017 Equity Plan, the RSU Grant will be settled in shares of common stock of the Company on the first anniversary of the applicable vesting date.

The RSU grant was valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest.

The grant date fair value of the RSU Grant was $ 4.4 million.

The expense will be recognized on a straight-line basis over the explicit service period.

The following table summarizes the Company's PSU awards activity during fiscal 2026:

Number of shares Weighted average grant date fair value

Unvested at January 30, 2022 533,333 $ 28.41

Granted 289,625 44.20

Forfeited ( 62,186 ) 29.09

Vested ( 120,516 ) 36.03

Unvested at January 29, 2023 640,256 34.50

Unvested at February 2, 2025 960,055 $ 23.94

Granted 330,314 19.87

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Unvested at February 1, 2026 1,046,994 $ 22.05

During fiscal 2025 and 2024, 606,063 and 657,494 PSU awards were granted with a weighted-average grant date fair value of $ 21.28 and $ 26.38 , respectively.

During fiscal 2026, 2025, and 2024, the total fair value of PSU awards vested was $ 0.7 million, less than $ 0.1 million, and $ 6.6 million, respectively.

Time-Based Restricted Stock Units

Time-based restricted stock units ("RSU awards") granted under the 2017 Equity Plan are generally subject to only a service-based vesting condition.

RSU awards vest equally over three years on the anniversary date of the grant date if employed at the time of vesting.

The valuation of these RSU awards is based solely on the fair value of the Company’s stock on the date of grant.

The following table summarizes the Company's RSU awards activity during fiscal 2026:

Number of shares Weighted average grant date fair value

Unvested at February 2, 2025 328,947 $ 24.96

Granted 383,904 19.35

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Unvested at February 1, 2026 504,488 $ 20.37

Nelson’s Restricted Stock Units Agreement and Grant Notice (the “RSU Agreement”).

Nelson remains in continuous service with the Company as Chief Executive Officer through such date;

Nelson remains in continuous service with the Company through such date.

The RSU grant was valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest.

The grant date fair value of the RSU Grant was $ 4.4 million.

The expense will be recognized on a straight-line basis over the longest of the derived, explicit, or implicit service period.

During fiscal 2025 and 2024, 241,571 and 179,184 RSU awards were granted with a weighted-average grant date fair value of $ 21.93 and $ 26.94 , respectively.

During fiscal 2026, 2025, and 2024, the total fair value of RSU awards vested was $ 4.5 million, $ 3.6 million, and $ 3.1 million, respectively.

Stock Options

In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an exercise price of $ 38.10 per share.

The market condition was met on June 5, 2021, which was the date on which the average closing price of the Company’s common stock had been at least $ 75 for 40 consecutive trading days.

The options vested and became exercisable on June 5, 2022 as the officers were still employed on that date.

All expenses associated with the stock options were recognized in prior years.

During fiscal 2026, 110,081 stock options were forfeited related to a former officer and director's termination of service;

no other stock options were issued, exercised, or canceled.

During fiscal 2025 and 2024, there were no stock options issued, exercised, canceled or forfeited.

The following represents stock option activity during fiscal 2026:

Number of options Weighted average exercise price Weighted average remaining contractual life (in years) Aggregate intrinsic value

Outstanding at February 2, 2025 495,366 $ 38.10 4.34 —

Forfeited ( 110,081 ) 38.10

Exercised — —

Outstanding and exercisable at February 1, 2026 385,285 $ 38.10 3.34 $ —

Equity-based compensation expense was approximately $ 5.5 million, $ 7.9 million, and $ 4.2 million for fiscal 2026, 2025, and 2024, respectively.

The income tax benefit for the vesting of our equity-based compensation awards was $ 0.6 million, $ 1.2 million and $ 1.0 million for fiscal 2026, 2025, and 2024, respectively.

The total unrecognized equity based compensation cost related to unvested RSU and PSU awards was approximately $ 13.0 million as of February 1, 2026 and will be recognized in operations over a weighted average period of 2.3 years.

Common Stock Warrants

Warrants may be exercised on a cashless basis, where the holders receive fewer shares of common stock in lieu of a cash payment to the Company.

As of January 29, 2023, the weighted average contractual life of the 281,750 outstanding warrants was 0.4 years.

In fiscal 2024, Roth Capital Partners, LLC performed a cashless exercise of all 281,750 remaining outstanding warrants resulting in 74,592 net shares issued.

As of February 1, 2026, no warrants remain outstanding.

Share Repurchase Program

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Depending on market conditions and other factors, these repurchases may be commenced or suspended at any time or periodically without prior notice.

During fiscal 2025, we repurchased and subsequently retired 777,713 shares of common stock for $ 19.9 million, including broker commissions and fees.

During fiscal 2026 and 2025, we repurchased and subsequently retired 306,325 and 777,713 shares of common stock, costing $ 6.0 million and $ 19.9 million, respectively, including broker commissions and fees.

The Inflation Reduction Act imposed a nondeductible 1% excise tax on the net value of stock repurchases.

During fiscal 2025, the excise tax on net share repurchases was not material.

As of February 2, 2025, we had $ 20.1 million available to repurchase shares pursuant to the share repurchase program.

During fiscal 2026 and 2025, the excise tax on net share repurchases was not material.

As of February 1, 2026, and February 2, 2025, the share repurchase program had $ 14.1 million and $ 20.1 million in remaining authorized funds, respectively.

On March 26, 2026, subsequent to the end of the fiscal period, our board of directors authorized the repurchase of an additional $ 40.0 million of our outstanding common stock under the share repurchase program.

As a result, total remaining availability under the share repurchase program increased to $ 54.1 million.

Segment Information

Segments are reflective of how the chief operating decision maker ("CODM") reviews operating results for the purpose of allocating resources and assessing performance.

The CODM group of the Company is comprised of the Chief Executive Officer and the President/Chief Operating Officer.

The Company markets and sells its products through an omni-channel platform that provides a seamless and meaningful experience to its customers across multiple channel.

The CODM group of the Company is comprised of the Chief Executive Officer and the President.

The Company markets and sells its products through an omni-channel platform that provides a seamless and meaningful experience to its customers across multiple channels.

The Company has one operating segment which aligns with the way our CODM group evaluates performance and allocates resources within the Company.

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While management uses these additional adjusted metrics in assessing and allocating resources to our business, management recognizes that US GAAP principles are the basis of our performance.

The Company’s net sales by product which are considered one segment are as follows:

The Company’s net sales by product which are considered one reportable segment are as follows:

2026 2025 2024

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Sacs 42,587 48,798 51,719

Other 9,932 11,158 11,585

19,736 9,932 11,158

Total net sales $ 697,115 $ 680,628 $ 700,265

Interest income (expense), net is as follows:

(1) Includes our new product platform Snugg.

Interest income, net is as follows:

2026 2025 2024

Interest income (expense), net (1)

Interest income, net (1)

1,303 2,800 1,747

(1) Interest income (expense), net is included in Interest and other income (expense), net on the statements of operations.

(1) Interest income, net is included in Interest and other income, net on the statements of operations.

As the Company discloses a single reportable segment, total net sales is reported in the statements of operations, segment assets are reported in the balance sheets, and capital expenditures are reported in the statements of cash flows.

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Basis of Presentation, and Summary of Significant Accounting Policies for additional information on our sales channels, geographic areas, and major customers.

Subsequent Events

Supreme Court Tariff Ruling

In February 2026, the Supreme Court of the U.S.

issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA").

The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments.

To preserve its rights to recover such duties, the Company has filed a complaint and a protective action with the U.S.

Court of International Trade ("CIT") seeking a full refund of all tariffs paid under the invalidated IEEPA authorities.

Following the Supreme Court decision, the U.S.

Administration announced a new 10% global tariff under Section 122 of the Trade Act of 1974, subject to certain carveouts.

At this time the Company cannot reasonably estimate the total financial impact of this ruling, however it, and any additional tariffs, may materially affect the Company’s future results of operations and cash flows.

In the event the Company receives a refund of tariffs previously paid, it may elect to return a portion of such amounts to vendors that provided the Company tariff relief and/or price concessions.

Any such obligations would be assessed based on commercial considerations, and could reduce any benefit from a refund.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures