What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-29 · 201 added, 438 removed, 883 unchanged (42% of the section changed)

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Consolidated Statements of Operations for the Fiscal Years Ended December 29, 2024, December 31, 2023, and December 25, 2022

Consolidated Statements of Preferred Stock and Stockholders’ (Deficit) Equity for the Fiscal Years Ended December 31, 2023, December 25, 2022, and December 26, 2021

Consolidated Statements of Stockholders’ (Deficit) Equity for the Fiscal Years Ended December 29, 2024, December 31, 2023, and December 25, 2022

Consolidated Statements of Cash Flows for the Fiscal Years Ended December 29, 2024, December 31, 2023, and December 25, 2022

Notes to Consolidated Financial Statements

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Sweetgreen, Inc.

To the Stockholders and the Board of Directors of Sweetgreen, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Sweetgreen, Inc.

and subsidiaries (the "Company") as of December 31, 2023 and December 25, 2022, the related consolidated statements of operations, preferred stock and stockholders' (deficit) equity, and cash flows, for each of the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021 and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and December 25, 2022, and the results of its operations and its cash flows for each of the fiscal years ended December 31, 2023, December 25, 2022, and December 26, 2021 in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the "Company") as of December 29, 2024 and December 31, 2023, the related consolidated statements of operations, stockholders' (deficit) equity, and cash flows, for each of the three years in the period ended December 29, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 29, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 29, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 29, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

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Critical Audit Matter Description

The Company’s evaluation of long-lived assets at restaurants (which include property and equipment, and subsequent to the adoption of ASC 842, operating lease assets) for impairment involves reviewing for events or changes in circumstances that indicate the carrying amount of the asset may not be fully recoverable.

The Company’s evaluation of long-lived assets at restaurants (which include property and equipment and operating lease assets) for impairment involves reviewing for events or changes in circumstances that indicate the carrying amount of the asset may not be fully recoverable.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows and the asset group is at the store-level for restaurant assets (“store asset group”).

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Changes in these assumptions could have a significant impact on either the fair value, the amount of any impairment charge, or both.

We identified the impairment of long-lived assets of a store asset group as a critical audit matter because of the significant judgments made by management in estimating future cash flows used to determine recoverability of

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long-lived assets of a store asset group.

Specifically, significant judgment is required by management in the determination of projected future revenue assumptions by considering sales trends.

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We have served as the Company's auditor since 2012.

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SWEETGREEN, INC.

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Accrued payroll

14,716 13,131

Gift cards and loyalty liability

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The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC.

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( 91,674 ) ( 113,005 ) ( 189,096 )

Income tax expense

Income tax (benefit) expense

( 1,301 ) 379 1,345

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The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(in thousands, except share amounts)

Preferred Stock Class S Stock Common Stock Additional

Shares Amount Shares Amount Shares Amount

Common Stock Additional

Shares Amount

Balances at December 26, 2021 109,345,697 $ 109 $ 1,129,224 $ ( 476,216 ) $ 653,117

Adoption of ASC 842 — — — ( 4,944 ) ( 4,944 )

Net loss — — — ( 190,441 ) ( 190,441 )

Stock-based compensation expense — — — — — — 28,897 — 28,897

Issuance of common stock related to restricted shares 829,679 1 ( 1 ) — —

Exercise of stock options 957,617 1 4,757 — 4,758

Exercise of common stock warrants — — — — 61,147 — 119 — — 119

Issuance of preferred stock (net of issuance costs of $ 226 )

6,669,146 108,858 — — — — — — — —

Issuance of Class S stock for acquisition of business — — 1,843,493 2 — — 30,703 — — 30,703

Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs of $ 33.9 million

— — — — 14,950,000 15 384,677 — — 384,692

Conversion of Series F common stock warrants, previously issued upon exercise of the Series F warrants, into an equivalent amount of common stock — — — — 235,000 — 6,580 — — 6,580

Conversion of Class S stock in connection with the initial public offering — — ( 1,843,493 ) ( 2 ) 1,316,763 1 — — — 1

Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering ( 69,231,197 ) ( 614,496 ) — — 69,231,197 69 614,427 — — 614,496

Automatic exercise of Series J warrants for an equivalent amount of common stock in connection with initial public offering — — — — 1,557,686 2 16,977 — — 16,979

Repayment of related party loan — — — — — — 1,159 4,000 — 5,159

Stock-based compensation expense — — 78,736 — 78,736

Balances at December 25, 2022 111,132,993 111 1,212,716 ( 671,601 ) 541,226

Adoption of ASC 842 — — — — — — — — ( 4,944 ) ( 4,944 )

Net loss — — — ( 113,384 ) ( 113,384 )

Stock-based compensation expense — — — — — — 78,736 — — 78,736

Issuance of common stock related to restricted shares 587,078 — — — —

Exercise of stock options 929,963 2 5,387 — 5,389

Shares repurchased for employee tax withholding ( 10,888 ) — ( 166 ) — ( 166 )

Stock-based compensation expense — — 49,532 — 49,532

Balances at December 31, 2023 112,639,146 113 1,267,469 ( 784,985 ) 482,597

Net loss — — — ( 90,373 ) ( 90,373 )

Stock-based compensation expense — — — — — — 49,532 — — 49,532

Issuance of common stock related to performance stock units 1,800,000 2 — — 2

Issuance of common stock related to restricted shares 479,078 — — — —

Issuance of common stock related to Spyce milestone achievement

208,042 — 2,132 — 2,132

Exercise of stock options 1,990,576 2 12,763 — 12,765

Shares repurchased for employee tax withholding ( 531 ) — ( 2 ) — ( 2 )

Stock-based compensation expense — — 39,024 — 39,024

Balances at December 29, 2024 117,116,311 $ 117 $ 1,321,386 $ ( 875,358 ) $ 446,145

The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC.

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Non-cash restructuring charges 701 5,281 13,026

Deferred income tax expense 358 1,290 125

Deferred income tax (benefit) expense ( 1,412 ) 358 1,290

Change in fair value of contingent consideration 6,624 3,475 819

Change in fair value of preferred stock warrant liability

Changes in operating assets and liabilities:

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( 1,532 ) ( 258 ) ( 600 )

Tenant improvement receivables

82 ( 686 ) ( 480 )

( 686 ) ( 480 ) ( 283 )

Prepaid expenses and other current assets

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( 646 ) ( 533 ) ( 458 )

Deferred rent liability

Net cash provided by (used in) operating activities

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( 7,741 ) ( 6,115 ) ( 5,376 )

Acquisition, net of cash acquired

— — ( 3,340 )

Security and landlord deposits

Lease acquisition costs

( 13 ) 122 242

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Cash flows from financing activities:

Proceeds from preferred stock issuance, net of issuance costs

Proceeds from stock option exercise

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Payment of contingent consideration ( 3,868 ) ( 10,421 ) —

( 10,421 ) — —

Payment of loan origination fees — — ( 126 )

Proceeds from exercise of common stock warrants — — 119

Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs — — 384,692

Payment associated to shares repurchased for tax withholding

Proceeds from issuance of Series F warrants in connection with the initial public offering — — 1,803

Proceeds from related party loan — — 5,158

( 2 ) ( 166 ) —

Net cash (used in) provided by financing activities

8,895 ( 5,199 ) 4,632

Net (decrease) increase in cash and cash equivalents and restricted cash

Net decrease in cash and cash equivalents and restricted cash

( 39,926 ) ( 74,384 ) ( 140,560 )

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257,355 331,739 472,299

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Cash and cash equivalents and restricted cash—end of year

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Cash paid for interest

$ 184 $ 50 $ —

Non-cash investing and financing activities:

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$ 9,791 $ 6,824 $ 7,980

Acquisition non-cash consideration $ — $ — $ 30,704

Initial liability associated with contingent consideration $ — $ — $ 16,440

Conversion of redeemable convertible preferred stock to common stock in connection with public company offering $ — $ — $ 614,496

Reclassification of Series F warrant liability to APIC in connection with initial public offering $ — $ — $ 6,580

Reclassification of Series J warrant liability to APIC in connection with initial public offering $ — $ — $ 16,979

Non-cash issuance of common stock associated with Spyce milestone achievement

$ 2,132 $ — $ —

The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC.

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The Company was founded in November 2006 and incorporated in the state of Delaware in October 2009 and currently is headquartered in Los Angeles, California.

The Company’s operations are conducted as one operating segment and one reportable segment, as the Company’s chief operating decision maker, who is the Company’s Chief Executive Officer, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

The Company’s revenue is derived from retail sales of food and beverages by company-owned restaurants.

Initial Public Offering —On November 22, 2021, the Company closed its initial public offering (“IPO”), in which it issued and sold 14,950,000 shares of its Class A common stock at a price per share of $ 28.00 .

The Company received net proceeds of approximately $ 384.7 million from the IPO after deducting underwriting discounts and commis sions of $ 26.4 million and offering costs of approximately $ 7.5 million subject to certain cost reimbursements.

(“Spyce”) in September 2021 were converted into 1,316,763 shares of common stock, resulting in an aggregate of 92,754,432 outstanding shares of common stock.

These shares were then reclassified into an equivalent number of shares of Class A common stock.

Additionally, in connection with the IPO, warrants to purchase 1,557,686 shares of Series J Preferred Stock were automatically exercised for an equivalent number of shares of Class A common stock, and an aggregate of 13,477,303 shares of Class A common stock held by Messrs.

Neman, Jammet, and Ru, the Company’s co-founders, were exchanged for an equivalent number of shares of Class B common stock pursuant to the terms of an exchange agreement entered into with the Company.

Furthermore, the Series F Warrants, which were exercised during fiscal year 2021, converted into 235,000 shares of Class A common stock.

Finally, the Company recognized $ 14.3 million in other expense in the consolidated statement of operations from the change in fair value of the Series J and Series F warrants, based on the initial public offering price of $ 28.00 per share, less the underlying exercise price of the warrants and $ 5.4 million of stock-based compensation expense for options with a performance-based vesting condition satisfied at IPO.

The Company’s operations are conducted as one operating segment and one reportable segment.

Additional details on the nature of the Company’s business and their reportable operating segment is included in Note 15, “Segment Reporting”.

Principles of Consolidation —The accompanying consolidated financial statements include the accounts of the Company.

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Fiscal Year —The Company’s fiscal year is a 52- or 53-week period that ends on the last Sunday of the calendar year.

Fiscal year 2023 was a 53-week period that ended December 31, 2023.

Fiscal years 2024 and 2022 were 52-week periods that ended December 29, 2024 and December 25, 2022, respectively.

In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations.

Fiscal year 2023 was a 53-week period that ended December 31, 2023.

In a 52-week fiscal year, each quarter includes 13 weeks of operations.

In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations.

Management’s Use of Estimates —The consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant accounting estimates made by the Company include the income tax valuation allowance, impairment of long-lived assets and right-of-use assets (“ROU assets”), legal

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liabilities, valuation of the contingent consideration liability, lease accounting matters, valuation of intangible assets acquired in business combinations, goodwill, and stock-based compensation.

Significant accounting estimates made by the Company include the income tax valuation allowance, impairment of long-lived assets and right-of-use assets (“ROU assets”), legal liabilities, valuation of the contingent consideration liability, lease accounting matters, and stock-based compensation.

These estimates are based on information available as of the date of the consolidated financial statements;

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Amounts receivable from sales transactions as of December 29, 2024 and December 31, 2023, were $ 2.3 million and $ 3.0 million, respectively.

Restricted Cash —The Company’s restricted cash balance relates to certificates of deposit that are collateral for letters of credit to lease agreements entered into by the Company and cash from the Spyce acquisition.

The reconciliation of cash and cash equivalents and restricted cash presented in the Company’s accompanying consolidated balance sheets to the total amount shown in its consolidated statements of cash flows is as follows:

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$ 217,429 $ 257,355

Approximately $ 2.5 million of the restricted cash balance as of December 29, 2024 was associated with letters of credit required by the Company’s workers’ compensation insurance policy.

The remaining balance was associated with letters of credit from lease agreements.

Concentrations of Risk — The Company maintains cash balances at several financial institutions located in the United States.

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Other Current Assets — Other current assets primarily consist of the Employee Retention Credit “ERC”, outstanding receivables from the Company’s distributors and current amortization of deferred costs.

Subsequent to the adoption of ASC 842, other current assets also consist of tenant improvement allowance receivables for locations that have no corresponding operating lease asset and liability due to their rent payments being entirely variable, and amount to $ 0.8 million and $ 0.3 million as of December 31, 2023 and December 25, 2022, respectively.

Other Assets — Other Assets primarily consist of deferred costs, which are capitalized implementation costs from cloud computing arrangements in relation the Company’s enterprise resource planning system (“ERP”).

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Inventory — Inventory, consisting primarily of food, beverages and supplies, is valued at the lower of cost first-in, first-out cost or net realizable value.

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Prepaid Expenses — Prepaid expenses primarily include prepaid insurance, which is expensed in the period for which it relates.

Prepaid Expenses — Prepaid expenses primarily include prepaid office systems, which we amortize over the life of the contract, and prepaid insurance, which is expensed in the period for which it relates.

Property and Equipment —Property and equipment are recorded at cost.

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The Company capitalized internal costs related to site selection and construction activities of $ 4.6 million and $ 4.7 million for the fiscal years ended December 29, 2024 and December 31, 2023, respectively.

In addition, for fiscal year 2022, the Company recorded $ 0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline the Company’s future new restaurant openings which is recorded within restructuring charges.

Restructuring Charges — Restructuring charges are expenses that are paid in connection with reorganization of the Company’s operations during fiscal year 2022.

Additionally, in conjunction with the Company’s implementation of ASC Topic 842 (“ASC 842”), operating lease assets were evaluated for impairment, and any impairment charges incurred in conjunction with the Company’s restructuring was considered a restructuring charge.

On September 7, 2021, the Company closed its acquisition of Spyce, a Boston-based restaurant company powered by automation technology, allowing the Company to serve its food in its restaurants via automation (see Note 3).

Automated technology associated with the Company’s Infinite Kitchen is included in kitchen equipment within property and equipment.

Total research and development was $ 1.0 million, $ 1.2 million and $ 2.0 million for the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022, respectively.

These costs are primarily costs incurred to develop and improve the Infinite Kitchen, and are recorded within general and administrative costs in the Company’s accompanying consolidated statement of operations.

Restructuring Charges — Restructuring charges are expenses that are paid in connection with reorganization of the Company’s operations during fiscal year 2022 as well as the amortization of the underlying operating lease asset and related real estate and common area maintenance fees (“CAM”) charges.

Additionally, in conjunction with the Company’s implementation of ASC Topic 842 (“ASC 842”), operating lease assets were evaluated for impairment, and any impairment charges incurred in relation to the assets impacted by the Company’s restructuring was considered a restructuring charge.

For fiscal year 2022, the Company incurred total pre-tax restructuring and related charges of approximately $ 14.4 million.

This included a $ 13.0 million non-cash restructuring expense, due to a reduction of the Company’s real estate footprint by vacating the premises of the Company’s existing Sweetgreen Support Center and moving to a smaller office space adjacent to the existing location, of which $ 6.8 million related to impairment of long-lived assets and $ 5.8 million and $ 0.4 million related to impairment of the Company’s operating lease asset and closure costs, respectively, associated with the Sweetgreen Support Center, $ 0.6 million of severance and related benefits from workforce reductions affecting approximately 5 % of employees at the Sweetgreen Support Center, $ 0.6 million of costs related to abandoning certain potential future restaurant sites in an effort to streamline the Company’s future new restaurant openings, and $ 0.2 million of other related expenses.

For fiscal year 2023 , stemming from the 2022 reorganization, the Company recorded restructuring charges of $ 7.4 million primarily related to operating lease asset impairment costs from the Company’s vacated former

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Sweetgreen Support Center as well as the amortization of the underlying operating lease asset and related real estate and common area maintenance fees (“CAM”) charges.

Business Combinations —The Company utilizes the acquisition method of accounting in any acquisitions or business combinations.

The acquisition method of accounting requires companies to assign values to assets and liabilities acquired based upon their fair values at the acquisition date.

In most instances, there are not readily defined or listed market prices for individual assets and liabilities acquired in connection with a business, including intangible assets.

The determination of fair value for assets and liabilities in many instances requires a high degree of estimation.

The valuation of intangible assets, in particular, is very subjective.

The Company generally obtains third-party valuations to assist it in estimating fair values.

The use of different valuation techniques and assumptions could change the amounts and useful lives assigned to the assets and liabilities acquired and related amortization expense.

Total research and development excluding any related cost associated with the Spyce acquisition was $ 1.2 million and $ 2.0 million for the fiscal years ended December 31, 2023 and December 25, 2022, respectively.

These costs are recorded within general and administrative cost in the Company’s accompanying consolidated statement of operations.

Contingent Consideration —Due to certain conversion features, the contingent consideration issued as part of the Spyce acquisition (see Note 6 for further details) is considered a liability in accordance with ASC 480.

For fiscal years 2024 and 2023 , stemming from the 2022 reorganization, the Company recorded restructuring charges of $ 2.3 million and $ 7.4 million, respectively, primarily related to operating lease asset impairment costs recognized in fiscal year 2023 from the Company’s vacated former Sweetgreen Support Center as well as the amortization of the underlying operating lease asset and related real estate and common area maintenance fees (“CAM”) charges.

Total operating lease costs included in restructuring charges for fiscal years for 2024 and 2023 were $ 1.5 million and $ 1.8 million, respectively, and total variable leases costs included in restructuring charges for fiscal years 2024 and 2023 were $ 0.5 million and $ 0.5 million, respectively.

Contingent Consideration —Due to certain conversion features, the contingent consideration issued as part of the Spyce acquisition is considered a liability in accordance with ASC 480.

The liability associated with the contingent consideration is initially recorded at fair value (see Note 3 for further details) upon issuance date and is subsequently re-measured to fair value at each reporting date.

The initial fair value of the liability for the contingent consideration was $ 16.4 million and was included as part of the purchase price for the Spyce acquisition.

The fair value of the liability as of December 31, 2023 and December 25, 2022 was $ 8.4 million and $ 21.3 million, respectively.

During fiscal year ended December 31, 2023, the Company paid $ 10.4 million of the contingent consideration.

The fair value of the liability as of December 29, 2024 was $ 15.0 million, of which $ 9.7 million was included in other current liabilities and $ 5.3 million was included in contingent consideration liability within the

consolidated balance sheets.

The fair value of the liability as of December 31, 2023 was $ 8.4 million and included in contingent consideration liability within the consolidated balance sheets.

Changes in fair value of the contingent consideration is recognized within other expense in the accompanying consolidated statement of operations.

Other Current Liabilities —The other current liabilities is solely comprised of the short-term portion of the contingent consideration liability which was determined based on known stock price values in January 2024.

Other Current Liabilities —The other current liabilities is comprised of the short-term portion of the contingent consideration liability.

Goodwill —Goodwill, which represents the excess of the cost of an acquired entity over the fair value of the acquired net assets, has an indefinite life and, accordingly, is not amortized.

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Should actual cash flows and the Company’s future estimates vary adversely from current estimates, the Company may be required to recognize goodwill impairment charges in future years.

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capitalized subsequent to the preliminary stage of development.

Intangible Assets, net — External costs and certain internal costs, including payroll and payroll-related costs for employees, directly associated with developing computer software applications for internal use are capitalized subsequent to the preliminary stage of development as well as developed technology associated with the Company’s Infinite Kitchen.

Internal-use software costs are amortized using the straight-line method over a three year estimated useful life of the software when the project is substantially complete and ready for its intended use.

Lease Acquisition Costs —Prior to the adoption of ASC 842, lease acquisition costs included key money and legal and broker fees incurred to obtain a lease.

Key money is the amount of funds paid to a landlord or tenant to acquire the rights of tenancy under a commercial property lease.

These costs were amortized over the respective lease terms that range from 10 to 15 years and are presented net of accumulated amortization.

Amortization expense for the fiscal year ended December 26, 2021 was $ 0.4 million, of which all but an insignificant amount was included in occupancy and related expenses and the remainder was included in general and administrative expenses in the accompanying consolidated statement of operations.

Upon adoption of ASC 842, lease acquisition costs associated with legal and broker fees are expensed as incurred and no longer capitalized.

As such, lease acquisition costs only include key money.

Total lease acquisition costs, net of accumulated amortization, as of December 31, 2023 and December 25, 2022 were $ 0.5 million and $ 0.6 million, respectively.

Amortization expense for both the fiscal years ended December 31, 2023 and December 25, 2022 was $ 0.1 million, which was recorded within occupancy and related expenses in the accompanying statement of operations.

Further, the Company recorded $ 1.7 million of legal fee expenses associated with obtaining a lease for the fiscal year ended December 25, 2022 which was recorded to general and administrative expenses within the consolidated statement of operations.

The Company also recorded a $ 4.2 million adjustment to accumulated deficit as of the effective date of the adoption of ASC 842, related to legal fees no longer capitalizable.

Developed technology intangible assets were recognized in conjunction with the Company’s acquisition of Spyce on September 7, 2021.

The estimated useful life of developed technology is five years .

Lease Acquisition Costs — Lease acquisition costs included key money which is the amount of funds paid to a landlord or tenant to acquire the rights of tenancy under a commercial property lease.

These costs are amortized over the respective lease terms that range from 10 to 15 years and are presented net of accumulated amortization.

Revenue Recognition —The Company recognizes food and beverage revenue, net of discounts and incentives, when payment is tendered at the point of sale as the performance obligation has been satisfied, through the Company’s three disaggregated revenue channels:

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Pick-Up Channel refers to sales to customers made for pick-up at one of the Company’s restaurants through the Sweetgreen website or mobile app.

Native Delivery Channel refers to sales to customers for delivery made through the Sweetgreen website or mobile app.

Native Delivery Channel refers to sales to customers for delivery made through the Sweetgreen website or

Outpost and Catering Channel refers to sales to customers for delivery made through the Sweetgreen website or mobile app to Outposts, which are the Company’s offsite drop-off points at offices, residential buildings and hospitals.

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In-Store Channel (Non-Digital component) refers to sales to customers who make in-store purchases in the Company’s restaurants, whether they pay by cash or credit card, or digital scan-to-pay.

Digital scan-to-pay was eliminated during the fiscal quarter ended September 24, 2023.

Purchases made in the Company’s In-Store Channel via cash or credit card are referred to as “Non-Digital” transactions, and purchases made in the Company’s In-Store Channel via digital scan-to-pay, prior to its elimination, were included as part of the Company’s Owned Digital Channels.

Purchases made in the Company’s In-Store Channel via cash or credit card are referred to as “Non-Digital” transactions, and purchases made in the Company’s In-Store Channel via digital scan-to-pay, prior to its elimination in 2023, were included as part of the Company’s Owned Digital Channels.

Marketplace Channel refers to sales to customers for delivery or pick-up made through third-party delivery marketplaces, including DoorDash, Grubhub, Uber Eats, ezCater, Sharebite and others.

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The revenue from gift cards is recognized when redeemed by customers.

Because the Company does not track addresses of gift card purchasers, the relevant jurisdiction related to the requirement for escheatment,

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the legal obligation to remit unclaimed assets to the state, is the Company’s state of incorporation, which is Delaware.

Because the Company does not track addresses of gift card purchasers, the relevant jurisdiction related to the requirement for escheatment, the legal obligation to remit unclaimed assets to the state, is the Company’s state of incorporation, which is Delaware.

The state of Delaware requires escheatment after 5 years from issuance.

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Fair Value of Financial Instruments —The fair value measurement accounting guidance creates a fair value hierarchy to prioritize the inputs used to measure fair value into three categories.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement, where Level 1 is the highest category (observable inputs) and Level 3 is the lowest category (unobservable inputs).

A financial instrument’s level

within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement, where Level 1 is the highest category (observable inputs) and Level 3 is the lowest category (unobservable inputs).

The three levels are defined as follows:

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In other words, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).

Impairment and Closure Costs — Impairment includes impairment charges related to our long-lived assets, which include property and equipment and internally developed software, and subsequent to the adoption of

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ASC 842, operating lease assets.

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows (“asset group”).

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If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material.

The Company determined that triggering events, primarily related to the impact of changing customer behavior trends, including slower than expected return to office during and following the COVID-19 pandemic (including as a result of many workplaces adopting remote or hybrid models) and as a result of broader macroeconomic conditions on the Company’s near-term restaurant level cash flow forecast, restructuring activities and anticipated store closures, occurred for certain restaurants and its Support Center, that required an impairment review of the Company’s long-lived assets.

The Company determined that triggering events, primarily related to the impact of changing customer behavior trends, including slower than expected return to office and as a result of broader macroeconomic conditions on the Company’s near-term restaurant level cash flow forecast, restructuring activities and anticipated store closures, occurred for certain restaurants and its Support Center, that required an impairment review of the Company’s long-lived assets.

No indicators of impairment were found for the Company’s intangible assets for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022.

Based on the results of this analysis, the Company recorded non-cash impairment charges of $ 4.3 million during the fiscal year ended December 31, 2023, related to the operating lease asset for the Company’s former Sweetgreen Support Center vacated previously during fiscal year 2022, which was recorded under restructuring charges within the consolidated statement of operations.

Based on the results of the analysis, for the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $ 1.7 million associated with one store location, which was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 1.7 million total non-cash impairment, $ 1.3 million was related to property and equipment, and $ 0.4 million was related to operating lease assets.

During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges of $ 4.3 million, related to the operating lease asset for the Company’s former Sweetgreen Support Center vacated previously during fiscal year 2022, which was recorded under restructuring charges within the consolidated statement of operations.

During the fiscal year ended December 25, 2022 the Company recorded non-cash impairment charge of $ 15.0 million, of which $ 8.8 million was related to property and equipment and $ 6.2 million was related to operating lease assets.

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Of the $ 6.2 million of operating lease impairment, $ 5.8 million was associated with the Company’s vacated Sweetgreen Support Center and was recorded in restructuring charges within the consolidated statement of operations, and $ 0.4 million was associated with certain store locations and was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 15.0 million total non-cash impairment expense, $ 12.6 million was included within restructuring charges and $ 2.4 million was included within impairment and closure costs within the consolidated statement of

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During the fiscal year ended December 26, 2021, the Company recorded non-cash impairment charges of $ 4.4 million, related to certain of the Company’s stores, as well as the two stores operated by Spyce Food Co.

Prior to the adoption of ASC 842, closure costs included non-cash restaurant charges such as up-front expensing the net present value of unpaid rent remaining on the life of a lease offset by assumed sublease income.

Subsequent to the adoption of ASC 842, closure costs include lease and related costs associated with closed restaurants including the amortization of the operating lease asset, and expenses associated with common area maintenance fees and real estate taxes for previously impaired stores.

Closure costs include lease and related costs associated with closed restaurants including the amortization of the operating lease asset, and expenses associated with common area maintenance fees and real estate taxes for previously impaired stores.

During the fiscal year ended December 29, 2024, the Company recognized closure costs of $ 0.5 million related to the amortization of the operating lease asset and expenses associated with CAM and real estate taxes for previously closed stores, including three previously impaired stores that were closed during the fiscal year ended December 31, 2023.

During the fiscal year ended fiscal year December 25, 2022, the Company closed one store operated by Spyce, which was fully impaired in a prior period.

This closure resulted in closure costs of $ 0.5 million.

During fiscal year ended December 26, 2021, the Company closed one store operated by Spyce, which was fully impaired in prior periods.

During the fiscal year ended December 25, 2022, the Company closed one store operated by Spyce, which was fully impaired in a prior period.

This closure resulted in closure costs of $ 0.5 million.

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Some of the Company’s operating leases include provisions for payment of a fixed CAM amount per annum, and as such, these payments have been included in the calculation of the operating lease liability.

As of the date of adoption, the Company calculated its operating lease assets and lease liabilities as the present value of fixed lease payments over the reasonably certain lease term beginning at the commencement date.

The Company measured the lease liability by discounting the future fixed contractual payments included in the lease agreement, using either the rate explicit in the lease or its incremental borrowing rate (“IBR”).

The IBR used to measure the lease liability is derived from the yield curve commensurate with the credit rating of the Company and further adjusted for seniority based on a notching analysis.

The IBR used to measure the lease liability is derived from the yield curve commensurate with the credit rating of the

Company and further adjusted for seniority based on a notching analysis.

The most significant assumption in calculating the IBR is the Company’s credit rating, and the IBR is also subject to judgment.

For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the consolidated balance sheets.

The Company applied ASC 842 using the effective date method, which allowed the Company to apply the standard as of the adoption date, and to recognize the cumulative effect of initially applying ASC 842 as an adjustment to accumulated deficit at December 27, 2021.

Therefore, the comparative information for the fiscal year ended December 26, 2021 has not been adjusted and continues to be reported under ASC 840.

Certain leases contain provisions for contingent rent that require additional rental payments based upon restaurant sales volume.

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The Company receives tenant improvement allowances, generally in the form of cash, from some of the landlords of its leased properties.

The tenant improvement allowances that are expected to be received are

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included in the measurement of the initial operating lease liability, which are also reflected as a reduction to the initial measurement of the right-of-use asset and amortized over the applicable lease terms.

For periods prior to the adoption of ASC 842, leases are accounted for under ASC 840.

Under ASC 840, minimum lease payments, including minimum scheduled rent increases, are recognized as rent expense on a straight-line basis over the applicable lease terms.

The term used for rent expense is calculated initially from the date of lease commencement through the lease term.

Certain lease agreements contain a free rent holiday period that generally begins on the lease commencement date and ends on the rent commencement date.

During the free rent holiday period, no cash rent payments are due under the terms of the lease.

In addition, certain leases contain fixed escalations throughout the lease term.

Expense is recorded for both free rent holiday periods and fixed escalations on a straight-line basis over the lease term.

The difference between the cash paid to the property owner and the amount recognized as rent expense on the straight-line basis is included as deferred rent liability in the accompanying consolidated balance sheet.

Tenant improvement allowances received and earned are recorded as deferred rent liability in the accompanying consolidated balance sheet and amortized on a straight-line basis as a reduction to rent expense over the applicable lease terms.

The tenant improvement allowances that are expected to be received are included in the measurement of the initial operating lease liability, which are also reflected as a reduction to the initial measurement of the right-of-use asset and amortized over the applicable lease terms.

Contingencies —The Company is subject to various claims, lawsuits, governmental investigations, and administrative proceedings that arise in the ordinary course of business.

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The Company utilized a dividend yield of zero , as it had no history or plan of declaring dividends on its common stock.

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The grant date fair value of restricted stock units (“RSUs”) is estimated based on the fair value of the Company’s common stock on the date of grant.

Prior to the Company’s IPO in November 2021, RSUs granted by the Company vest upon the satisfaction of both a service-based vesting condition, which is typically four years , and a liquidity event-related performance vesting condition.

Prior to the Company’s initial public offering (“IPO”) in November 2021, RSUs granted by the Company vest upon the satisfaction of both a service-based vesting condition, which is typically four years , and a liquidity event-related performance vesting condition.

The liquidity event-related performance vesting condition was achieved upon the consummation of the Company's IPO.

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Provided that each founder continues to be employed by the Company through the derived service period, stock-based compensation expense is recognized over the derived service period, regardless of whether the stock price goals are achieved.

Prior to the Company’s IPO, the Company determined that the Option Pricing Method (“OPM”) was the most appropriate method for determining the fair value of its common stock.

Under the OPM, shares are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class.

The estimated fair values of the common stock are inferred by analyzing these options.

Interest Income —Interest income consists of interest earned on cash and cash equivalents.

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Debt origination fees are amortized on a straight-line basis over the commitment period.

Net Loss Per Share —The Company calculated basic and diluted net loss per share attributable to common stockholders using the two-class method required for companies with participating securities.

The Company considers its previously outstanding preferred stock to be participating securities as the holders are entitled to receive non-cumulative dividends on a pari passu basis in the event that a dividend is paid on common stock.

Under the two-class method, basic net loss per share available to common shareholders was calculated by dividing the net loss available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.

Prior to the IPO, the net loss available to common shareholders was not allocated to the preferred stock as the holders of preferred stock did not have a contractual obligation to share in losses.

Net Loss Per Share —The Company calculated basic and diluted net loss per share by dividing income available to common stockholders by the weighted-average number of shares of common stock during each period.

Diluted net loss per share available to common shareholders was computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period.

For purposes of this calculation, preferred stock and stock options to purchase common stock were considered common stock equivalents but had been excluded from the calculation of diluted net loss per share available to common shareholders as their effect was anti-dilutive.

In periods in which the Company reports a net loss available to common shareholders, diluted net loss per share available to common shareholders is the same as basic net loss per share available to common shareholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The Company reported net loss available to common shareholders for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022.

Upon completion of the Company's IPO, all of the Company’s outstanding shares of redeemable convertible preferred stock were automatically converted into 69,231,197 shares of common stock (which was then

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reclassified into Class A common stock) and their carrying amount reclassified into stockholders' (deficit) equity.

As of December 31, 2023, there were no shares of redeemable convertible preferred stock issued and outstanding.

The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting rights.

Accordingly, the Class A common stock and Class B common stock shared proportionately in the Company’s net losses.

Prior to the IPO, there were no shares of Class A or Class B common stock issued and outstanding.

Employee Benefit Plan — The Company sponsors a qualified 401(k) defined contribution plan (the “Plan”) covering eligible employees.

Employee Benefit Plan — The Company sponsors a qualified 401(k) defined contribution plan (the “401k Plan”) covering eligible employees.

Participants may contribute a portion of their annual compensation limited to a maximum annual amount set by the Internal Revenue Service.

The Company matches 50 % of an eligible employee’s contribution up to 3 % of wages.

The Company previously matched 50 % of an eligible employee’s contribution up to 3 % of wages.

An employee becomes eligible once the individual has worked at the Company for 6 months, has worked 500 or more hours, and is 21 years or older.

The Company has temporarily paused this matching contribution, effective in the fourth fiscal quarter of 2022.

For the fiscal years ended December 25, 2022, and December 26, 2021 the matching contribution was $ 1.0 million, and $ 1.2 million, respectively.

For the fiscal year ended December 25, 2022 the matching contribution was $ 1.0 million.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No.

2016-02, “Leases”.

ASC 842 establishes a right-of-use model that requires a lessee to record an ROU Asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.

Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

The new standard was effective for fiscal years beginning after December 15, 2018, including interim periods therein.

In July 2018, the FASB issued ASU No.

2018-11, which provides an alternative transition method that allows entities to apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

In June 2020, the FASB issued ASU No.

2020-05 which delayed the effective date to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

The Company adopted ASC 842, and all related topics as of December 27, 2021.

The Company did not elect the package of three practical expedients, and thus reassessed all contracts for lease identification, lease classification and initial direct costs.

There was no change related to lease identification or lease classification and the reassessment of initial direct costs resulted in a cumulative-effect adjustment in retained earnings, related to previously capitalized legal fees that will no longer meet the definition of initial direct costs under the new standard.

Additionally, the Company recognized a cumulative-effect adjustment in retained earnings, related to impairment of operating lease assets existing as of the implementation date.

The Company also did not elect the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of right-of-use assets.

Further, the Company elected a short-term lease exception policy, permitting it to not apply the recognition requirements of this standard to short-term leases (i.e.

leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for all leases.

In November 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure primarily through enhanced disclosures about significant segment expenses.

The Company adopted ASU No.

2023-07 during the year ended December 29, 2024.

See Note 15 "Segment Reporting" in the accompanying notes to the consolidated financial statements for further detail for the expanded disclosures as a result of adopting ASU No.

Recently Issued Accounting Pronouncements Not Yet Adopted

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The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating the impact of adopting this ASU on our disclosures.

The Company is currently evaluating the impact of adopting this ASU on its disclosures.

In November 2024, the FASB issued ASU No.

2024-03, "Disaggregation of Income Statement Expenses (Subtopic 220-40)." The ASU requires public entities to disaggregate, in a tabular presentation, certain income statement expenses into different categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures.

The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the consolidated financial statements.

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REVENUE RECOGNITION

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$ 730 $ 480 $ 378

During the second quarter of fiscal 2023, the Company launched its Sweetpass and Sweetpass + loyalty program nationwide.

Prior to the introduction of Sweetpass, t he Company had a loyalty program called Sweetgreen Rewards, which was terminated during fiscal year 2021 and all revenue related to performance obligations for Sweetgreen Rewards was satisfied as of December 26, 2021.

Sweetpass is the Company’s loyalty program where customers can earn rewards, birthday treats, menu exclusives and more.

All customers that create a digital account will automatically be enrolled in this free program.

For additional perks like a daily $ 3 off, customers can upgrade to Sweetpass+ for $ 10 per month.

In both the Sweetpass and Sweetpass + program, customers can earn rewards for completing challenges which are generally earned by customers when they purchase certain goods within established time periods of one to two weeks.

The Rewards generally provide customers with future discounts or free goods, and typically expire within one week to two weeks after they are issued.

The Company defers revenue associated with the estimated standalone selling price of the Rewards, which is based on the value of the product to which the reward is related to and incorporates the estimate of the likelihood that the Rewards will be redeemed.

The Rewards are recognized as revenue when the customer redeems the Rewards or it expires.

Due to the insignificant nature of outstanding Rewards as of December 31, 2023, no revenue was deferred for the fiscal year ended December 31, 2023 related to the Rewards.

The costs associated with Rewards redeemed are primarily included within food, beverage and packaging costs.

The contract terms for Sweetpass + are generally one month and customers have the right to terminate the monthly contract at any point in time.

The Company determined that the customer receives daily benefits evenly during the one month contract period and all benefits associated with Sweetpass + expire at the end of the

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The $ 10 monthly subscription revenue related to Sweetpass + is recognized over the contract period, which is typically one month .

Additionally, the daily discounts offered under Sweetpass + is recognized as a reduction of revenue when customers redeem such discount.

Due to the insignificant nature of unrecognized revenue related to Sweetpass + as of December 31, 2023, no revenue was deferred for the fiscal year ended December 31, 2023 related to the monthly subscription fees paid by customers for Sweetpass + .

The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis:

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Contingent consideration $ 14,974 — — 14,974 $ 8,350 — — 8,350

Contingent consideration as of December 29, 2024 was $ 15.0 million of which $ 9.7 million is included in other current liabilities and $ 5.3 million is included in contingent consideration within the consolidated balance sheets.

The fair value of the contingent consideration was determined based on significant inputs not observable in the market.

Contingent Consideration

In connection with the Company’s acquisition of Spyce on September 7, 2021, the former equity holders of Spyce may receive up to 714,285 additional shares of Class A common stock, calculated based on the initial offering price of the Company’s Class A common stock of $ 28.00 per share sold in the Company’s initial public offering (“IPO”) (the “Reference Price”), contingent on the achievement of certain performance milestones between the closing date of the acquisition and June 30, 2026 .

On September 7, 2021, the Company closed its acquisition of Spyce Food Co.

(“Spyce”), a Boston-based restaurant company powered by automation technology.

In connection with the Company’s acquisition the former equity holders of Spyce may receive up to 714,285 additional shares of Class A common stock, calculated based on the initial offering price of the Company’s Class A common stock of $ 28.00 per share sold in the IPO (the “Reference Price”), contingent on the achievement of certain performance milestones between the closing date of the acquisition and June 30, 2026 .

Add itionally, the former equity holders of Spyce may receive true-up payments in cash, as described here.

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The analysis considered, among other items, the equity value, the contractual terms of the Spyce merger agreement, potential liquidity event scenarios (prior to the IPO), the Company’s credit-adjusted discount rate, equity volatility, risk-free rate, and the probability that milestone targets required for issuance of shares under the contingent consideration will be achieved.

During the fourth quarter of fiscal 2023, the first milestone was achieved, which resulted in former equity holders of Spyce being eligible to receive $ 6.0 million, which was issued and paid subsequent to December 31, 2023 .

Of this $ 6.0 million, $ 2.1 million was issued in Class A common stock and $ 3.9 million was issued in cash, based on a VWAP Price of $ 10.20 .

As the stock was issued and payment was made within one year from December 31, 2023, it was included in other current liabilities within the Consolidated Balance Sheets.

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During the fourth quarter of fiscal 2023, the first milestone was achieved, which resulted in former equity holders of Spyce being eligible to receive $ 6.0 million.

Of this $ 6.0 million, $ 2.1 million was issued in Class A common stock, which resulted in 208,042 shares issued, and $ 3.9 million was issued in cash, based on a VWAP Price of $ 10.20 .

This amount became known as of December 31, 2023, and as the stock was issued and payment was made within one year from December 31, 2023, it was included in other current liabilities within the Consolidated Balance Sheets as of December 31, 2023.

This amount was not disclosed as a level 3 estimate as of December 31, 2023 as it was a fixed and determinable amount as of December 31, 2023.

The stock was issued and cash was paid during the fiscal year ended December 29, 2024.

The following table provides a roll forward of the aggregate fair values of the Company’s contingent consideration, for which fair value is determined using Level 3 inputs.

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Balance—December 31, 2023

Change in fair value 6,624

Balance—December 29, 2024

The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022 reflecting certain property and equipment and operating leases for which an impairment loss was recognized during the corresponding periods within impairment and closure costs and restructuring charges within the consolidated statement of operations.

For the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $ 1.7 million associated with one store location, which was recorded in impairment and closure costs within the consolidated statement of operations.

Of the $ 1.7 million total non-cash impairment, $ 1.3 million was related to property and equipment, and $ 0.4 million was related to operating lease assets.

Fair Value Measurements

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(dollar amounts in thousands)

Certain property and equipment, net

$ — $ — $ — $ — $ 1,347

Operating lease assets $ 6,001 $ — $ — $ 6,001 $ 389

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(dollar amounts in thousands)

Certain property and equipment, net

$ — $ — $ — $ — $ 8,821

Operating lease assets $ 5,719 $ — $ — $ 5,719 $ 4,291

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$ — $ — $ — $ — $ 8,821

Operating lease assets $ 10,744 $ — $ — $ 10,744 $ 6,228

The fair value of these assets represents a Level 3 fair value measurement.

Unobservable inputs include the discount rate, projected restaurant revenues and expenses, and sublease income if we are closing the restaurant.

For the operating lease assets’ fair value estimate as of December 31, 2023 and December 25, 2022, the Company estimated the sublease income through early fiscal 2032 and discounted such cash flows using a property specific discount rate of approximately nine percent.

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For the operating lease assets’ fair value estimate as of December 29, 2024, December 31, 2023, and December 25, 2022 the Company estimated the sublease income through early fiscal 2032 and discounted such cash flows using a property specific discount rate of approximately 9.0 % to 9.5 %.

PROPERTY AND EQUIPMENT

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2024 December 31,

Leasehold improvements

$ 303,035 $ 262,191

Kitchen equipment

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43,045 36,692

Leasehold improvements

262,191 212,825

Assets not yet placed in service

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Loss on asset disposals for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022, was $ 0.3 million, $ 0.7 million, and $ 0.3 million, respectively.

As of December 31, 2023, the Company had seven facilities under construction due to open during 2024.

As of December 29, 2024, the Company had nine facilities under construction due to open during 2025.

Depreciation commences after a store opens and the related assets are placed in service.

As of December 25, 2022, the Company had twenty facilities under construction, all of which were opened during fiscal year 2023.

December 31, 2023, the Company had seven facilities under construction, all of which were opened during fiscal year 2024.

Depreciation commences after a store opens and the related assets are placed in service.

Based on the Company’s review of its property and equipment for impairment, for the fiscal year ended December 31, 2023 the Company did not record a non-cash impairment charge.

For the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $ 1.3 million within impairment and closure costs, within the consolidated statement of operations.

The Company did not record any non-cash impairment charges for the fiscal year ended December 31, 2023.

For the fiscal year ended December 25, 2022, the Company recorded non-cash impairment charges of $ 8.8 million, of which $ 2.0 million was recorded within impairment and closure costs and $ 6.8 million was recorded within restructuring charges within the consolidated statement of operations.

For the fiscal year ended December 26, 2021, the Company recorded non-cash impairment charges of $ 4.4 million, respectively, within impairment and closure costs in the consolidated statement of operations.

INTANGIBLE ASSETS, NET

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Total $ 24,040 $ 27,407

Developed technology intangible assets were recognized in conjunction with the Company’s acquisition of Spyce on September 7, 2021.

The estimated useful lives of developed technology is five years and the assets were placed into service during the second fiscal quarter of 2023.

Amortization expense for internal software was $ 10.0 million, $ 7.7 million, and $ 6.4 million for the fiscal years ended 2023, 2022 and 2021, respectively.

Estimated amortization of internal software for each of the next five years is as follows:

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(dollar amounts in thousands)

BUSINESS ACQUISITION

On September 7, 2021, the Company closed its acquisition of Spyce, a Boston-based restaurant company powered by automation technology.

The Company acquired 100 % of the stock of Spyce via a merger.

The purpose of the acquisition is to allow the Company to serve its food with even better quality, consistency and efficiency in its restaurants via automation.

Pursuant to the merger agreement, upon closing of the acquisition, the Company issued 1,843,493 shares of Class S stock (the “Class S Shares”) worth approximately $ 37.5 million, of which $ 6.8 million is considered post-business combination compensation expense, see Note 12 for details, and subject to certain vesting requirements of certain Spyce employees.

In connection with the Company’s IPO, the Class S Shares converted into 1,316,763 shares of common stock pursuant to a formula based on the Reference Price, which such shares were then reclassified into shares of Class A common stock.

Additionally, the Company paid off approximately $ 3.5 million of certain indebtedness and transaction expenses of Spyce.

Furthermore, the former equity holders of Spyce may receive up to an aggregate of 714,285 additional shares of Class A common stock contingent on the achievement of certain performance milestones between the closing date and June 30, 2026.

The acquisition of Spyce was not significant pursuant to Rule 3-05 of Regulation S-X.

The allocation of the purchase price and the transaction costs is as follows (in thousands):

Fair value of assets acquired

As of September 7,

Restricted cash 203

Property and equipment, net 707

Other assets 660

Developed technology 20,050

Goodwill 29,695

Total assets acquired $ 51,315

Fair value of liabilities assumed

Other liabilities 628

Total liabilities assumed $ 628

Total identifiable net assets $ 50,687

Fair value of consideration

Cash consideration, net of cash acquired 2,762

Closing third party expenses 781

Equity consideration 30,704

Contingent equity consideration 16,440

Total consideration $ 50,687

Determining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates.

The fair value of the

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intangibles assets was determined using a cost approach, which were based on the Company’s best estimate of recreating the developed technology acquired as part of the transaction.

This includes estimates related to opportunity costs, developers profit, weighted average weight of return, and projected overhead.

Use of different estimates and judgments could yield materially different results.

The Company’s consolidated financial statements for the fiscal years ended December 31, 2023 and December 25, 2022 reflect results of operations of the acquired business.

The Company accounted for this acquisition under the acquisition method in accordance with ASC Topic 805, Business Combinations.

The goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing restaurants and the workforce of Spyce.

For tax purposes the acquisition was treated as a stock purchase, and as such any goodwill or other intangible assets recorded as a result of this transaction are not deductible for tax purposes .

Supplemental Pro Forma Information (unaudited)

The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition occurred on December 28, 2020.

Amortization expense for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022 was $ 11.0 million, $ 10.0 million, and $ 7.7 million, respectively.

Estimated amortization for each of the next five years is as follows:

(dollar amounts in thousands)

Fiscal Year Ended

December 26, 2021

Net loss attributable to Sweetgreen, Inc.

$ ( 156,050 )

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings.

These pro forma amounts have been calculated by applying the Company’s accounting policies.

The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of December 31, 2019, nor are they indicative of results of operations that may occur in the future.

ACCRUED EXPENSES

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Accrued general and sales tax

Rent deferrals

Accrued delivery fee

Accrued settlements and legal fees

Rent deferrals and accrued rent

Accrued delivery fee

Other accrued expenses

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$ 26,564 $ 20,845

Credit Facility —On December 14, 2020, the Company entered into a First Amended and Restated Revolving Credit, Delayed Draw Term Loan and Security Agreement (as subsequently amended, as discussed below, the “2020 Credit Facility”) with EagleBank.

The 2020 Credit Facility superseded the Company’s 2017 revolving credit facility with EagleBank and allows the Company to borrow (i) up to $ 35.0 million (subsequently increased to $ 45.0 million) in the aggregate principal amount under the refinanced revolving facility and (ii) up to $ 10.0 million in the aggregate principal amount under a delayed draw term loan facility, which expired on December

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14, 2021, and which was never drawn on.

The refinanced revolving facility originally matured on December 14, 2022 (and has since been extended to December 13, 2024).

However, if the Company issues certain convertible debt or unsecured indebtedness under the 2020 Credit Facility, then the refinanced revolving facility will mature on the earlier to occur of (i) the maturity date indicated in the previous sentence and (ii) 90 days prior to the scheduled maturity date for any portion of such permitted convertible debt or unsecured indebtedness.

On May 9, 2022, the Company and Eagle Bank amended the 2020 Credit Facility to allow for the issuance of letters of credit of up to $ 1.5 million under the revolving facility.

In connection therewith, EagleBank issued a $ 950,000 irrevocable standby Letter of Credit to the Company with The Travelers Indemnity Company as the beneficiary in connection with the Company’s workers compensation insurance policy.

On December 13, 2022, the Company and Eagle Bank amended the 2020 Credit Facility to extend the maturity date from December 14, 2022 to December 13, 2024.

The 2020 Credit Facility also increased the revolving facility cap by $ 10.0 million, to allow for the Company to borrow up to $ 45.0 million in the aggregate principal amount under the refinanced revolving facility.

The Company incurred $ 0.1 million of loan origination fees related to the amendment, which was recorded within other current assets on the audited consolidated balance sheets and will be amortized over the life of the facility.

Under the 2020 Credit Facility, interest accrues on the outstanding loan balance and is payable monthly at a rate of the adjusted one-month term Secured Overnight Financing Rate, plus 2.90 %, with a floor on the interest rate at 3.75 %.

Credit Facility —During fiscal year 2024, the Company was party to a First Amended and Restated Revolving Credit, Delayed Draw Term Loan and Security Agreement (as amended, the “Credit Facility”) with EagleBank.

The Credit Facility allowed the Company to borrow up to $ 45.0 million in the aggregate principal amount under a revolving facility, including the issuance of letters of credit up to $ 3.5 million.

There have been no letters of credit issued, no borrowings, and no repayments under our credit facility during the fiscal years ended December 29, 2024, December 31, 2023, or December 25, 2022.

The Company did not renew the Credit Facility in 2024 and it expired pursuant to its terms on December 13, 2024.

As of December 29, 2024 and December 31, 2023, the Company had no outstanding balance under the Credit Facility.

On April 26, 2023, the Company and Eagle Bank further amended the 2020 Credit Facility to allow for an increase to the issuance of Letters of Credit of up to $ 3.5 million.

In connection therewith, the Company increased its irrevocable standby Letter of Credit with Eagle Bank to $ 1.95 million, with The Travelers Indemnity Company as the beneficiary in connection with the Company’s workers’ compensation insurance policy.

This replaced the previous amendment dated May 9, 2022.

Under the 2020 Credit Facility, the Company is required to maintain certain levels of liquidity (defined as total cash and cash equivalents on hand plus the available amount under the revolving facility) which liquidity amount shall be no less than the trailing 90-day cash burn.

The Company was in compliance with the applicable financial covenants as of December 31, 2023 and December 25, 2022.

The obligations under the 2020 Credit Facility are guaranteed by the Company’s existing and future material subsidiaries and secured by substantially all of the Company’s and subsidiaries guarantor’s assets.

The 2020 Credit Facility also restricts the Company’s ability, and the ability of the Company’s subsidiary guarantors, to, among other things, incur liens;

incur additional indebtedness;

transfer or dispose of assets;

make acquisitions, change the nature of the business;

guarantee obligations;

pay dividends to shareholders or repurchase stock;

and make advances, loans, or other investments.

The 2020 Credit Facility contains customary events of default, including, without limitation, failure to pay the outstanding loans or accrued interest on the due date.

The Company had unamortized loan origination fees of $ 0.1 million and $ 0.1 million as of December 31, 2023 and December 25, 2022, respectively, which are included within the accompanying consolidated balance sheet in other current assets.

The Company recognized $ 0.1 million of interest expense in both fiscal years 2023 and 2022, respectively, related to the amortization of loan origination fees.

On December 25, 2022 the Company adopted ASU 2016-02, Leases (“ASC 842”), using a modified retrospective approach under the effective date method.

The Company did not elect the package of practical expedients permitted under the transition guidance within ASC 842 which, among other items, required the Company to re-evaluate historical lease classifications and determine if previously classified initial direct costs would qualify for capitalization under ASC 842.

As a result, the Company recorded a $ 4.9 million cumulative-effect adjustment to accumulated deficit, of which $ 4.2 million was related to legal fees no longer capitalizable under ASC 842 and $ 0.7 million was related to operating lease asset impairment of stores determined to be impaired in a prior period.

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In addition to the items mentioned above, the Company elected the following:

• Adopt the short-term lease exception for leases with terms of twelve months or less and account for them as if they were operating leases under ASC 840;

• Apply the practical expedient of combining lease and non-lease components.

Results for reporting periods beginning on or after December 27, 2021 are presented under ASC 842.

Prior period amounts were not revised and continue to be reported in accordance with ASC 840, the accounting standard then in effect.

The components of lease cost for the fiscal years ended December 31, 2023 and December 25, 2022 were as follows:

(dollar amounts in thousands) Classification December 31,

2023 December 25,

As of December 31, 2023, the Company had unamortized loan origination fees of $ 0.1 million, which are included within the accompanying consolidated balance sheet in other current assets.

The Company recognized $ 0.1 million of interest expense in both fiscal years 2024 and 2023, respectively, related to the amortization of loan origination fee s.

The components of lease cost were as follows:

(dollar amounts in thousands) Classification December 29, 2024 December 31, 2023 December 25, 2022

Operating lease cost Occupancy and related expense

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Total lease cost $ 64,407 $ 59,289 $ 51,114

During the fiscal year ended December 29, 2024, the Company recorded a non-cash impairment charge related to operating lease assets of $ 0.4 million , which is recorded within impairment and closure costs in the consolidated financial statements.

During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges related to operating lease assets of $ 4.3 million, all of which is recorded within restructuring charges in the consolidated statement of operations.

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A summary of lease terms and discount rates for operating leases as of December 29, 2024 and December 31, 2023 is as follows:

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2023 December 25,

December 29, 2024 December 31, 2023

Weighted average remaining lease term (years):

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Operating Leases 6.75 % 6.51 %

Supplemental cash flow information related to leases as of December 31, 2023 and December 25, 2022 is as follows:

2023 December 25,

Supplemental cash flow information related to leases as of December 29, 2024, December 31, 2023 and December 25, 2022 as follows:

December 29, 2024 December 31, 2023 December 25, 2022

Cash paid for amounts included in the measurement of lease liabilities:

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Operating leases $ 46,167 $ 24,416 $ 57.396

Prior to the adoption of ASC 842, the fiscal years ended December 26, 2021 were in accordance with ASC 840.

As such, the following table below outlines the components of rent expense for the fiscal years ended December 26, 2021:

(dollar amounts in thousands) Fiscal Year Ended

December 26, 2021

Contingent rent

Pre-opening rent

sublease income

Rent expense for the fiscal year ended December 26, 2021 was $ 35.4 million, of which $ 29.8 million, is included in occupancy and related expenses, $ 2.5 million, is included in general and administrative expenses and $ 3.1 million, is included in pre-opening costs in the accompanying consolidated statements of operations.

In April 2020, the FASB issued guidance allowing entities to make a policy election whether to account for lease concessions related to the COVID-19 pandemic as lease modifications.

The election applies to any lessor-provided lease concession related to the impact of the COVID-19 pandemic, provided the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee.

During the fiscal year ended December 27, 2020, the Company received non-substantial concessions from certain landlords in the form of rent deferrals and abatements.

The Company elected to not account for these rent concessions as lease modifications.

The rent deferrals are recorded as part of accrued expenses and the rent abatements are accounted for as variable lease payments.

The Company recorded $ 1.3 million and $ 1.7 million of rent deferrals within accrued expenses as of December 31, 2023 and December 25, 2022, respectively, see Note 7.

In November 2021 in connection with the IPO, the Company implemented a dual class common stock structure pursuant to which all the then-outstanding shares of its common stock were reclassified as Class A common stock and a new class of Class B common stock was authorized.

In connection with the IPO, an aggregate of 13,477,303 shares of Class A common stock held by the Company’s founders were exchanged for an equivalent number of Class B common stock.

The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to 10 votes per share.

Derecognition of operating lease assets due to termination or impairment

$ 389 $ 4,291 $ 6,228

The Company has a dual class common stock structure, whereby the Class A common stock is entitled to one vote per share and the Class B common stock is entitled to 10 votes per share.

The Class A and Class B common stock have the same dividend and liquidation rights.

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certificate of incorporation, including transfers for tax and estate planning purposes or to any other founder or any affiliate of any founder) or (ii) the one-year anniversary of the death or permanent disability of such founder.

Any founder’s shares of Class B common stock will convert automatically into Class A common stock, on a one -to-one basis, upon either the (i) the sale or transfer of such share of Class B common stock (except for certain permitted transfers described in the Company’s amended and restated certificate of incorporation, including transfers for tax and estate planning purposes or to any other founder or any affiliate of any founder) or (ii) the one-year anniversary of the death or permanent disability of such founder.

Additionally, all outstanding shares of the Company’s Class B common stock will convert automatically into shares of the Company’s Class A common stock on the final conversion date, defined as the earlier of (i) the nine-month anniversary of the death or permanent disability of the last of the founders;

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Class A and Class B common stock are collectively referred to as “common stock” throughout the notes to the consolidated financial statements, unless otherwise noted.

In connection with the IPO, (i) 69,231,197 outstanding shares of preferred stock were converted into an equivalent number of shares of common stock and (ii) 1,843,493 shares of outstanding Class S stock issued in connection with our acquisition of Spyce in September 2021 were converted into 1,316,763 shares of common stock, resulting in an aggregate of 92,754,432 outstanding shares of common stock.

These shares were then reclassified into an equivalent number of shares of Class A common stock.

Neman, Jammet, and Ru were exchanged for an equivalent number of shares of Class B common stock pursuant to the terms of an exchange agreement entered into with us.

In the IPO, the Company issued and sold 14,950,000 shares of common stock at a price to the public of $ 28.00 per share, resulting in net proceeds of $ 384.7 million after deducting underwriting discounts and commissions and offering expenses.

As of December 29, 2024 and December 31, 2023, the Company had reserved shares of common stock for issuance in connection with the following:

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31,707,440 36,190,848

PREFERRED STOCK

From January 2021 to February 2021, the Company completed the closing of the sale of an aggregate of 6,669,146 shares of its Series J Preferred Stock at a purchase price of $ 17.10 per share for proceeds of $ 114.0 million, net of issuance costs of $ 0.3 million (the “Series J Financing”) .

In connection with the Series J Financing, the Company issued certain warrants to purchase shares of the Series J Preferred Stock to the purchasers in the Series J Financing (collectively, the “Series J Warrants”).

The Series J Warrants were exercisable for a number of shares based on the fair market value of the Series J Preferred Stock at the time of exercise, up to a maximum of 2,000,715 shares of Series J Preferred Stock (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification) in the aggregate.

Additionally, in connection with entering into a prior credit facility with CNF Investments IV, LLC in December 2016, the Company issued a warrant to purchase 235,000 shares of Series F preferred stock (the “Series F

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Both the Series J Warrants and Series F Warrants were determined to be classified as a liability on the consolidated balance sheet because the warrants are free standing financial instruments that may require the Company to transfer assets upon exercise.

The liability associated with the warrants is initially recorded at fair value upon issuance date and is subsequently re-measured to fair value at each reporting date.

The proceeds from the Series J Financing were allocated using the with-and-without method, in which a portion of the proceeds equal to the fair value of the Series J Warrants were allocated to the warrants first, and the remaining proceeds, net of issuance cost, were allocated to the Series J Preferred Stock on a residual basis.

The initial fair value of the liability for the Series J Warrants was $ 4.95 million and remaining proceeds, net of issuance cost, was recorded as an increase to preferred stock on the consolidated statements of preferred stock and stockholders’ deficit.

Changes in fair value of the warrant liability are recognized within other expense, net in the accompanying consolidated statement of operations.

The fair value of the warrants is estimated using a scenario-based approach, specifically the Probability Weighted Expected Return Method (“PWERM”) with two scenarios – the initial public offering (“IPO”) scenario and the Stay Private scenario.

In the IPO scenario, the value of the warrant was calculated using a Black Scholes model which involves making assumptions like the underlying stock value, term, volatility and risk-free rate.

The underlying value was calculated using a future waterfall based on the expected IPO date equity value which was then discounted back at a risk adjusted rate and a term was considered based on the remaining contractual life of the warrant considering that the warrants survives the IPO scenario.

In the Stay Private scenario, the value of the warrants was calculated using an option pricing method (“OPM”).

The OPM framework involves making assumptions for the equity value, expected time to liquidity, volatility and risk-free rate.

The equity value was implied based on an independent third-party valuation such that the value for the weighted average value of most recent financing across the IPO and Stay Private scenarios equals the amount paid.

The equity value implied in the Stay Private scenario was further supported using the DCF and Market approaches.

Upon the IPO, t he fair value of the Series J and Series F warrant liability was calculated as the IPO price of $ 28.00 per share, less the exercise price of each respective warrant, multiplied by the number of warrants exercised.

The value of the warrant liability was then reclassified into APIC.

In connection with the IPO, all shares of the Company’s outstanding preferred stock automatically converted into 69,231,197 shares of common stock, which were subsequently reclassified as Class A common stock.

Additionally, the Series J Warrants were automatically exercised upon the IPO for 1,557,686 shares of Class A common stock and the Series F Warrants were exercised during fiscal year 2021 and converted into 235,000 shares of Class A common stock in connection with the IPO.

STOCK-BASED COMPENSATION

2021 Equity Incentive Plan

In connection with the Company’s IPO, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which allows for issuance of stock options (including incentive stock options and non-qualified stock options), restricted stock units (“RSUs”), including performance-based awards, and other types of awards.

The maximum number of shares of common stock that may be issued under the 2021 Plan is 35,166,753 , which is the sum of (i) 11,500,000 new shares, plus (ii) an additional number of shares consisting of (a) shares that were available for the issuance of awards under any prior equity incentive plans in place (which shall include the Prior Stock Plans (as defined below) and the Spyce Plan (as defined below)) prior to the time the Company’s 2021 Plan became effective and (b) any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Prior Stock Plans that on or after the Company’s 2021 Plan became effective, terminate or expire prior to the exercise or settlement;

During the fiscal year ended December 26, 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which allows for issuance of stock options (including incentive stock options and non-qualified stock options), restricted stock units (“RSUs”), including performance-based awards, and other types of awards.

The maximum number of shares of common stock that may be issued under the 2021 Plan is 35,166,753 , which is the sum of (i) 11,500,000 new shares, plus (ii) an additional number of shares consisting of (a) shares that were available for the issuance of awards under any prior equity incentive plans in place (which shall include the Prior Stock Plans (as defined below) prior to the time the Company’s 2021 Plan became effective and (b) any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Prior Stock Plans that on or after the Company’s 2021 Plan became effective, terminate or expire prior to the exercise or settlement;

are not issued because the award is settled in cash;

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Options granted to members of the Company’s board of directors generally vest immediately.

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2009 Stock Plan and 2019 Equity Incentive Plan

Prior to the Company’s IPO, the Company granted stock options, RSUs and performance-based restricted stock awards (“PSUs”) to its employees, as well as nonemployees (including directors and others who provide substantial services to the Company) under the Company’s 2009 Stock Plan and 2019 Equity Incentive Plan (collectively, the “Prior Stock Plans”).

Awards permitted to be granted under the Prior Stock Plans include incentive stock options to the Company’s employees and non-qualified stock options to the Company’s employees and non-employees, as well as stock appreciation rights, restricted stock awards, RSUs (including PSUs), and other forms of stock awards to the Company’s employees, directors and consultants and any of the Company’s affiliated employees and consultants.

Options granted in the fiscal year ended December 26, 2021 generally have vesting terms between one year and four years and have a contractual life of 10 years.

No further stock awards will be granted under the Prior Stock Plans now that the 2021 Equity Incentive Plan is effective;

however, awards outstanding under the Prior Stock Plans will continue to be governed by their existing terms.

All stock options, RSUs and performance based restricted stock awards (“PSUs”) granted prior to the 2021 Plan were rolled into the 2021 Plan.

Awards granted prior to the adoption of the 2021 Plan had similar terms with each award vesting between one and 4 year period, and have a contractual life of 10 years.

Spyce Acquisition

In conjunction with the Spyce acquisition, the Company issued shares of Class S stock which converted to the Class A common stock upon the Company’s IPO.

Shares of Class S stock that were issued to certain Spyce employees, and the corresponding shares of Class A common stock received by such employees in connection with the Company’s IPO, are subject to time-based service requirements and vested on September 7, 2023, as these requirements were met.

In conjunction with the Spyce acquisition, the Company issued shares of restricted stock that were issued to certain Spyce employees.

As the value is fixed, the grant date fair value of these shares represents the fair value of the shares on the acquisition date.

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Stock Options

Prior to the Company’s IPO, the Company granted stock options to its employees, as well as nonemployees (including directors and others who provide subst antial services to the Company) under the Prior Stock Plans, and subsequent to its IPO, under the 2021 Plan .

In addition, as part of the Spyce acquisition, see Note 6 for further details, the Company assumed certain options to purchase shares of common stock issued pursuant to the Spyce Food Co.

2016 Stock Option and Grant Plan (the “Spyce Plan”), which, following such assumption, are exercisable for 96,151 shares of the Company’s Class A common stock with a weighted average exercise price of $ 8.95 .

The portion of the assumed options under the Spyce plan related to vesting prior to the closing date of the acquisition is included in the fair value of the equity consideration transferred in the acquisition when

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measuring goodwill.

The portion of the assumed options under the Spyce plan that vest after the closing date of the acquisition will be recognized as compensation expense as the assumed options vest.

The Company grants stock options to its employees, as well as nonemployees (including directors and others who provide subst antial services to the Company) under the 2021 Plan .

The following table summarizes the Company’s stock option activity for the fiscal years ended December 29, 2024 and December 31, 2023 , including options assumed pursuant to the Spyce Plan, as described above:

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13,169,869 9.88 6.04 $ 297,037

The total intrinsic value of options exercised in fiscal years 2024, 2023 and 2022 was $ 50.8 million, $ 7.5 million and $ 13.6 million, respectively.

The weighted-average fair value of options granted in fiscal years 2024, 2023 and 2022 was $ 9.72 , $ 9.07 , and $ 8.02 , respectively, all of which were granted to employees.

The weighted average fair value of options granted in fiscal year 2021 was $ 7.84 and $ 4.47 for stock options issued to employees and non-employees, respectively.

The fair value of each option granted has been estimated as of the date of the grant using the Black-Scholes option-pricing model with the assumptions during the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022 included in the table below.

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Dividend yield

Fair Value of Common Stock — Prior to the Company’s IPO, the absence of an active market for the Company’s common stock requires the Company to estimate the fair value of its common stock.

Subsequent to the Company’s IPO, its board of directors determines the fair market value of its common stock based on its closing price as reported on close of business the day immediately preceding the date of grant on the New York Stock Exchange.

Fair Value of Common Stock — The Company’s board of directors determines the fair market value of its common stock based on its closing price as reported on close of business the day immediately preceding the date of grant on the New York Stock Exchange.

Risk-Free Interest Rate —The yield on actively traded non-inflation indexed U.S.

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The Company calculated the expected term using the simplified method for “plain vanilla” stock option awards.

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Expected Volatility —There is no substantive share price history to calculate volatility and, as such, the Company has elected to use an approximation based on the volatility of other comparable public companies, which compete directly with the Company, over the expected term of the options.

Expected Volatility —Given the timing of the IPO occurring in 2021, there is not sufficient share price history that extends through the expected term of the options, as such, the Company has elected to use an approximation based on the volatility of other comparable public companies, which compete directly with the Company, over the expected term of the options.

Dividend Yield —The Company has not issued regular dividends on common shares in the past nor does the Company expect to issue dividends in the foreseeable future.

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Restricted stock units

During the fiscal year ended December 26, 2021 and prior to the Company’s IPO, excluding the founder PSUs and Spyce PSUs (each as described below), the Company issued 1,980,125 RSUs to certain employees, and 50,000 RSUs to members of its board of directors, both of which vest only upon the satisfaction of both service-based and liquidity event-related performance conditions.

The fair value of these RSUs was determined based on contemporaneous third-party valuations of the Company’s common stock, sales of the Company’s redeemable convertible preferred stock to outside investors in arms-length transactions (including the Company’s IPO), the Company’s operating and financial performance, the lack of marketability, and the general and industry-specific economic outlook, amongst other factors.

The grant date fair value of RSUs is recognized as compensation expense over the requisite service period, using the accelerated attribution method, once the liquidity event-related performance vesting condition becomes probable of being achieved.

The service-based vesting condition is generally satisfied by the award holder providing services to us, typically over a four-year period for employees and a one-year period for members of the Company’s board of directors.

The liquidity event-related performance vesting condition was satisfied upon the effectiveness of the Company’s IPO registration statement.

Stock-based compensation expense for RSUs that had not met the service-based vesting condition as of December 31, 2023 will be recorded over the remaining requisite service period.

During the fiscal years ended December 29, 2024 and December 31, 2023 , the Company issue d 535,789 a nd 428,428 RSUs, respectively, to certain employees, which vest upon the satisfaction of certain service periods.

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The RSUs are excluded from common stock issued and outstanding until the satisfaction of these vesting conditions and are not considered a participating security for purposes of calculating net loss per share attributable to common stockholders.

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The following table summarizes the Company’s RSU activity for fiscal years ended December 31, 2023 and December 25, 2022 :

The following table summarizes the Company’s RSU activity for fiscal year ended December 29, 2024 :

(dollar amounts in thousands except per share amounts) Number of

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Balance—December.

Granted 2,418,793 24.20

31, 2023 951,517 $ 17.41

Forfeited, cancelled, or expired

( 11,367 ) 29.51

Balance—December.

26, 2021 2,392,426 $ 24.18

Granted 535,789 20.81

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29, 2024 910,024 $ 17.72

Granted 428,428 9.07

( 587,078 ) 22.08

Forfeited, cancelled, or expired

( 670,514 ) 21.19

Balance—December.

31, 2023 951,517 $ 17.41

The weighted-average grant date fair value per RSU granted during the fiscal years ended December 31, 2023 and December 25, 2022 was $ 9.07 and $ 19.45 , respectively.

As of December 29, 2024, unrecognized compensation expense related to RSUs was $ 9.1 million and is expected to be recognized over a weighted average period of 1.67 years .

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7 $ 75.00 900,000

The Company estimated the grant date fair value of the founder PSUs based on multiple stock price paths developed through the use of a Monte Carlo simulation model within a hybrid framework with two possible

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scenarios (IPO and Change of Control).

A Monte Carlo simulation model also calculates a derived service period for each of the seven vesting tranches, which is the measure of the expected time to achieve each Company stock price target, as described above.

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As of December 29, 2024 unrecognized compensation expense related to PSUs was $ 9.8 million and is expected to be recognized over a weighted average period of 0.72 years.

During the fiscal year ended December 29, 2024 , the service condition and stock price goal for the first two tranches were met, resulting in 600,000 PSUs vesting and being released for each founder during that period (for a total of 1,800,000 PSUs vesting).

The fair value of the total shares released as of the vesting date during the fiscal year ended December 29, 2024 was $ 67.8 million, solely related to the founder PSUs, and the Company incurred $ 1.1 million in payroll taxes associated with the transactions which are included in general and administrative expenses within the accompanying consolidated statement of operations.

Subsequent to the Company’s IPO, the Company issued 321,428 PSUs to the Spyce founders (“Spyce PSUs”) based on three separate performance-based milestone targets.

The Company will recognize stock compensation expense related to each performance-based milestone target as it becomes probable of occurring, based on the stock price on the date of grant.

During the fiscal years ended December 31, 2023 and December 25, 2022 , the Company h as not recorded any stock-based compensation expense related to the Spyce PSUs.

Unrecognized compensation expense related to the Spyce PSUs is $ 9.8 million, which will be expensed if the performance-based milestone targets become probable of being met.

During the fiscal year ended December 29, 2024, the Company modified the number of shares underlying these grants and the vesting terms to remove the performance-based component, resulting in the total number of shares decreasing to 85,395 , all of which are scheduled to vest on March 15, 2025.

The expense related to these RSUs is included within the RSU section above.

During the fiscal years ended December 29, 2024 and December 31, 2023 the Company did not issue any PSUs.

As described above, the Company granted a total of 6,621,248 PSUs during the fiscal year ended December 26, 2021 with a weighted average grant date fair value of $ 15.56 .

There were no grants, releases, forfeitures, cancellations, or expirations since the grant date.

There were no grants, forfeitures, cancellations, or expirations since the grant date, and the founder PSUs released during the fiscal year ended December 29, 2024 are described above and summarized below.

The following table summarizes the Company’s PSU activity for the fiscal year ended December 29, 2024 :

(dollar amounts in thousands except per share amounts) Number of

Shares Weighted-

Grant Date Fair Value

Balance—December.

31, 2023 6,621,428 $ 15.56

( 1,800,000 ) 18.19

Forfeited, cancelled, or expired

( 321,428 ) —

Balance—December.

29, 2024 4,500,000 $ 15.62

A summary of stock-based compensation expense recognized fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022 is as follows:

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$ 39,024 $ 49,532 $ 78,736

Included within the $ 15.4 million of stock-based compensation expense for stock options during the fiscal year ended December 26, 2021, the Company recorded $ 5.4 million of stock-based compensation expense for options with a performance-based vesting condition that were satisfied at the closing of the IPO.

Stock-based compensation expense is recorded within general and administrative expenses within the Company’s consolidated statements of operations.

The Company’s entire pretax loss for the fiscal years ended December 29, 2024, December 31, 2023, and December 25, 2022 was from its U.S domestic operations.

For the fiscal years ended December 31, 2023, December 25, 2022 and December 26, 2021, the Company recorded an income tax expense of $ 0.4 million, $ 1.3 million, and $ 0.1 million respectively.

The components of the provision for income taxes for the fiscal year ended December 31, 2023 and December 25, 2022 are as follows (in thousands):

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For the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022, the Company recorded an income tax (benefit) expense of $( 1.3 ) million, $ 0.4 million, and $ 1.3 million, respectively.

The components of the provision for income taxes for the fiscal year ended December 29, 2024, December 31, 2023, and December 25, 2022 are as follows (in thousands):

(dollar amounts in thousands) Fiscal Year Ended

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December 31, 2023

Fiscal Year Ended

December 25, 2022

Total Current

( 1,432 ) 323 1,271

Total deferred ( 1,412 ) 358 1,290

Total provision for income taxes $ 379 $ 1,345

Total provision for income taxes (benefit) expense

$ ( 1,301 ) $ 379 $ 1,345

A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows:

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Nondeductible executive compensation ( 20.0 %) ( 8.2 %) ( 19.4 %)

Stock compensation and related items 15.8 % — % — %

1.8 % ( 0.5 %) ( 0.8 %)

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( 54,000 ) ( 57,469 )

Net deferred tax asset (liability)

Net deferred tax (liability) asset

$ ( 361 ) $ ( 1,773 )

As of December 29, 2024 and December 31, 2023, Company management assessed the realizability of deferred tax assets, in order to determine the need for a valuation allowance.

As of the fiscal years ended December 31, 2023 and December 25, 2022, the Company is in a net deferred tax asset position of $ 184.9

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million and $ 163.8 million, respectively.

As of the fiscal years ended December 29, 2024 and December 31, 2023, the Company is in a net deferred tax asset position of $ 202.7 million and $ 184.9 million, respectively.

The deferred tax assets consist principally of net operating loss carryforwards.

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The Company recognizes accrued interest and penalties, if any, related to uncertain tax positions in income tax provision in its financial statements, if applicable.

The Company did not have any accrued interest of penalties associated with any uncertain tax positions, and no interest expense was recognized during the fiscal years ended December 31, 2023 and

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December 25, 2022.

The Company did not have any accrued interest of penalties associated with any uncertain tax positions, and no interest expense was recognized during the fiscal years ended December 29, 2024 and December 31, 2023.

The following table summarizes the activity related to the Company’s gross uncertain tax positions for the fiscal years ended December 29, 2024 and December 31, 2023:

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$ 431 $ 1,556

Increases related to prior year tax positions

(Decreases) related to prior year tax positions

(Decreases) increases related to current year tax positions

( 338 ) ( 1,125 )

(Decreases) related to lapsing of statute of limitations

End of year balance

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On March 11, 2021, President Biden signed the American Rescue Plan Act (“ARPA”).

The ARPA includes several provisions, such as measures that extend and expand the employee retention credit, previously enacted under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), through December 31, 2021.

The ARPA includes several provisions, such as measures that extend and expand the employee retention credit, previously enacted under the Coronavirus Aid, Relief and Economic Security Act (“CARES

Act”), through December 31, 2021.

The ARPA did not have a material impact on the Company’s consolidated financial statements.

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As of December 31, 2023 the Company received $ 3.4 million cash payment reducing the ERC receivable within other current assets on the Consolidated Balance Sheet to $ 3.6 million.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law.

The IRA contains several revisions to the Internal Revenue Code, including 15% corporate minimum income tax for entities with adjusted financial statement income of over $1.0 billion and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022.

These tax law changes did not have a material effect on the Company’s results of operations.

No additional cash payments receipts have been received to date.

NET LOSS PER SHARE

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As the liquidation and dividend rights were identical, the undistributed earnings were allocated on a proportionate basis and the resulting net loss per share attributable to common stockholders were, therefore, the same for both Class A and Class B common stock on an individual or combined basis.

On November 22, 2021, the Company completed its IPO, in which it issued and sold 14,950,000 shares of its Class A common stock at a price of $ 28.00 per share.

On that date, all of the Company’s outstanding preferred stock automatically converted into 69,231,197 shares of Class A common stock.

These shares were included in the Company’s issued and outstanding common stock starting on that date.

Additionally, 1,843,493 shares of outstanding Class S stock issued in connection with the Company’s acquisition of Spyce in September 2021 were converted into 1,316,763 shares of Class A common stock, the Series J Warrants were automatically exercised upon the IPO for 1,557,686 shares of Class A common stock and the Series F Warrants were

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exercised during fiscal year 2021 and converted into 235,000 shares of Class A common stock in connection with the IPO.

The following table sets forth the computation of net loss per common share:

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$ ( 0.79 ) $ ( 1.01 ) $ ( 1.73 )

The Company’s potentially dilutive securities, which include preferred stock and options to purchase common stock, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive.

The Company’s potentially dilutive securities, which include options to purchase common stock, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive.

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same.

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The majority of the Company’s purchase obligations relate to amounts owed for supplies within its restaurants.

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The Company is subject to various claims, lawsuits, governmental investigations and administrative proceedings that arise in the ordinary course of business.

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However, an increase in the number of these claims, or one or more successful claims under which the Company incurs greater liabilities than the Company currently anticipates, could materially and adversely affect the Company’s business, financial position, results of operations, and cash flows.

Subsequent Events

In January 2024, the Company made an aggregate cash payment of $ 3.9 million and issued 208,042 shares of its Class A common stock to former equity holders of Spyce in connection with the achievement of a performance milestone.

See Notes 3 and 6.

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Reportable Segment

The Company’s operations are conducted as one operating segment and one reportable segment.

The Company’s chief operating decision maker (“CODM”) is the chief executive officer.

The Company defines its segments based on the way the Company’s internally reported financial information is regularly reviewed by the CODM to analyze financial performance, make decisions, and allocate resources.

The Company has one revenue stream, which is derived from retail sales of food and beverages by company-owned restaurants within the United States.

The Company’s approach to designing its menu and related food and beverage offerings are consistent throughout the United States.

Additionally, the Company’s food ethos, manners in which stores are operated and available channels are consistent throughout the United States.

Based on these factors, the CODM manages business activities, allocates resources and assess financial performance on a consolidated basis.

The accounting policies are the same as those described in the summary of significant accounting policies.

Sweetgreen does not have intra-company sales or transfers.

The CODM assesses performance for Sweetgreen and decides how to allocate resources based on Net loss as reported on the Consolidated Statement of Operation.

The CODM uses Net loss to monitor budget versus actual results as well as benchmarking Sweetgreen to its competitors.

The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of Sweetgreen.

The assets of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements.

Therefore, no further information is disclosed herein.

Other than certain disaggregated expense information provided in relation to General and Administrative expense (“G&A”), significant expenses regularly provided to the CODM is presented on the face of the statement of operations.

The CODM is also regularly provided disaggregated expense information for G&A, which is disaggregated between operating support center cost, stock-based compensation, all of which was included within G&A (see note 10), and other expenses, as shown below:

Fiscal Year Ended

December 29, 2024 Fiscal Year Ended

December 31, 2023 Fiscal Year Ended

December 25, 2022

General and administrative

Operating support center cost (1)

$ 107,626 $ 95,452 $ 107,697

Stock-based compensation

39,024 49,532 78,736

Other expenses (2)

3,292 1,778 934

Total General and administrative $ 149,942 $ 146,762 $ 187,367

(1) Operating support center costs consist primarily of operations, technology, finance, legal, human resources, administrative personnel, and other personnel costs that support restaurant development and operations, as well as brand-related marketing.

(2) Other expense typically includes expenses recorded for accruals related to legal settlements, one-time costs incurred to acquire Spyce, amortization costs associated with the implementation of our Enterprise Risk Management system and the employer portion of the founder performance stock unit payroll tax.

Additionally, the CODM regularly reviews interest income, interest expense, depreciation and amortization and income tax expense, which are included on the face of the income statement.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

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 8. Financial Statements and Supplementary Data