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What changed in BRC Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BRC Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+330 added−379 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-03)

Top changes in BRC Inc.'s 2025 10-K

330 paragraphs added · 379 removed · 278 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeToday, the Company has grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and all who love America. Black Rifle Coffee operates out of offices in Salt Lake City, Utah; San Antonio, Texas; and Nashville, Tennessee, with a manufacturing facility in Manchester, Tennessee.
Biggest changeArmy Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Hafer personally roasted, packaged, and shipped coffee directly to consumers. Today, we have grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and others who share our values.
Item 1. Business When used in this report, the terms “we,” “us,” “our,” “BRCC,” “Black Rifle Coffee,” “Black Rifle Coffee Company,” and the “Company” mean BRC Inc. and its consolidated subsidiaries, collectively, unless the context requires otherwise.
Item 1. Business When used in this report, the terms “we,” “us,” “our,” “BRCC,” “Black Rifle Coffee,” “Black Rifle Coffee Company,” and the “Company” mean BRC Inc. and its consolidated subsidiaries, collectively, unless the context otherwise requires.
These partnerships allow us to efficiently scale production to meet consumer demand while maintaining the quality standards our customers expect. 9 Table of Contents Competition We operate in a highly competitive environment across all our product categories, with competition driven by factors such as price, flavor, packaging, innovation, variety, shelf space, channel distribution, and marketing and promotional strategies.
These partnerships allow us to scale production efficiently to meet consumer demand while maintaining the quality standards our customers expect. 9 Table of Contents Competition We operate in a highly competitive environment across all our product categories, with competition driven by factors such as price, flavor, packaging, innovation, variety, shelf space, channel distribution, and marketing and promotional strategies.
We are also subject to the Fair Labor Standards Act, the Immigration Reform and Control Act of 1986 and various federal and state laws governing such matters such as minimum wage, overtime, employment tax rates, workers compensation rates, citizenship requirements, and other working conditions. A significant number of our personnel are paid at rates related to the federal minimum wage.
We are also subject to the Fair Labor Standards Act, the Immigration Reform and Control Act of 1986 and various federal and state laws governing employment matters such as minimum wage, overtime, employment tax rates, workers compensation rates, citizenship requirements, and other working conditions. A significant number of our personnel are paid at rates related to the federal minimum wage.
Environmental We believe federal and state environmental regulations have not had a material effect on operations, but more stringent and varied requirements of local government bodies with respect to zoning land use and environmental factors could delay construction and increase development costs for new facilities. 11 Table of Contents Business Combination and Organizational Structure On February 9, 2022, we consummated a business combination (the “Business Combination”) by which BRC Inc. became the parent company of Authentic Brands, pursuant to a business combination agreement dated November 21, 2021 and amended January 4, 2022 (the “Business Combination Agreement”).
Environmental We believe that federal and state environmental regulations have not had a material effect on operations, but more stringent and varied requirements of local government bodies with respect to zoning, land use, and environmental factors could delay construction and increase development costs for new facilities. 11 Table of Contents Business Combination and Organizational Structure On February 9, 2022, we consummated a business combination (the “Business Combination”) by which BRC Inc. became the parent company of Authentic Brands, pursuant to a business combination agreement dated November 21, 2021 and amended January 4, 2022 (the “Business Combination Agreement”).
Authentic Brands is the direct parent of Black Rifle Coffee Company, a Delaware limited liability company (“BRCC LLC”). Following the completion of the Business Combination, our organizational structure is what is commonly referred to as an umbrella partnership C corporation (or Up-C) structure.
Authentic Brands is the direct parent of Black Rifle Coffee Company, a Delaware limited liability company (“BRCC LLC”). Following the completion of the Business Combination, our organizational structure is commonly referred to as an umbrella partnership C corporation (or Up-C) structure.
The FTC’s franchise rules and various state laws require that we furnish a franchise disclosure document (“FDD”) containing certain financial information to prospective franchise partners in a number of states. Additionally, certain states require registration of the FDD with state authorities.
The FTC’s franchise rules and various state laws require that we furnish a franchise disclosure document (“FDD”) containing certain financial information to prospective franchise partners in certain states. Additionally, certain states require registration of the FDD with state authorities.
Each continuing owner of Authentic Brands also holds a number of shares of Class B Common Stock in the Company equal to the number of Common Units held by such owner, which shares of Class B Common Stock have no economic value, but which entitles the holder thereof to one vote per share at any meeting of our shareholders.
Each continuing owner of Authentic Brands also holds a number of shares of Class B Common Stock in the Company equal to the number of Common Units held by such owner, which shares of Class B Common Stock have no economic value, but entitle the holder thereof to one vote per share at any meeting of our shareholders.
Although we have not experienced and do not anticipate experiencing any significant problems obtaining required licenses, permits, or approvals, any difficulties, delays, or failures in obtaining such licenses, permits, registrations, exemptions, or approvals could delay or prevent the opening of, or adversely impact the viability of, an Outpost shop in a particular area.
Although we have not experienced and do not anticipate experiencing any significant problems obtaining required licenses, permits, or approvals, any difficulties, delays, or failures in obtaining such licenses, permits, registrations, exemptions, or approvals could delay or prevent the opening of, or adversely impact the viability of, an Outpost location in a particular area.
Government Regulations We are subject to extensive federal, state, and local government regulation, including those relating to, among others, public health and safety, food labeling and advertising, food safety and manufacturing, zoning and fire codes, and franchising. Failure to comply with these regulations would adversely affect our activities, including manufacturing and selling food.
Government Regulations We are subject to extensive federal, state, and local government regulation, including those relating to, among others, public health and safety, food labeling and advertising, food safety and manufacturing, zoning and fire codes, and franchising. Failure to comply with these regulations could adversely affect our activities, including manufacturing and selling food.
The development and construction of additional Outposts will be subject to compliance with the applicable zoning, land use, and environmental regulations. Our franchising activities are subject to the rules and regulations of the Federal Trade Commission (“FTC”) and various state laws regulating the offer and sale of franchises.
The development and construction of additional Outposts are subject to compliance with the applicable zoning, land use, and environmental regulations. Our franchising activities are subject to the rules and regulations of the Federal Trade Commission (“FTC”) and various state laws regulating the offer and sale of franchises.
Available Information We file annual, quarterly and current reports and other documents with the Securities and Exchange Commission (“SEC”) that are publicly available free of charge on the Investor Relations section of our website at https://ir.blackriflecoffee.com as soon as reasonably practicable after these materials are filed with or furnished to the SEC or at www.sec.gov.
Available Information We file annual, quarterly and current reports and other documents with the Securities and Exchange Commission (“SEC”) that are publicly available free of charge on the Investor Relations section of our website at https://ir.blackriflecoffee.com as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC or at www.sec.gov.
Failure to obtain or retain licenses and registrations or exemptions would adversely affect the operation of our Outposts and other properties.
Failure to obtain or retain licenses and registrations or exemptions could adversely affect the operation of our Outposts and other properties.
This organizational structure allows certain owners of Authentic Brands to retain their equity ownership in Authentic Brands, an entity that is classified as a partnership for U.S. federal income tax purposes, in the form of Common Units and Restricted Units of Authentic Brands.
This organizational structure allows certain owners of Authentic Brands to retain their equity ownership in Authentic Brands, which is classified as a partnership for U.S. federal income tax purposes, in the form of Common Units and Restricted Units of Authentic Brands.
Substantive state laws that regulate the franchise or franchise relationship exist in a substantial number of states, and bills have been introduced in Congress from time to time that would provide for federal regulation of the franchisor-franchisee relationship.
Substantive state laws that regulate the franchise or franchise relationship exist in a substantial number of states, and bills may be introduced in Congress from time to time that would provide for federal regulation of the franchisor-franchisee relationship.
Our licensed, Coffee Quality Institute-certified grader and former Green Beret leads cupping, grading, scoring, and sourcing of our coffees. We rely on co-manufacturers to support a portion of our production capacity for roast coffee and exclusively utilize co-manufacturers for the production of our RTD product lines.
Our licensed, Coffee Quality Institute-certified grader and former Green Beret oversees cupping, grading, scoring, and sourcing of our coffees. We rely on co-manufacturers to support a portion of our roasted coffee production capacity and utilize co-manufacturers exclusively for the production of our RTD and Energy product lines.
We achieve this through objectives such as: • Creating meaningful post-service career opportunities for Veterans, first responders, and their families. • Supporting charities focused on mental health and other critical needs within these communities. • Inspiring Veterans to pursue entrepreneurship through targeted programs and donations. • Providing quality products and media that resonate with these audiences.
We achieve this through objectives such as: • Creating meaningful post-service career opportunities for Veterans, first responders, and their families. • Supporting charities focused on mental health and other critical needs within these communities. • Inspiring Veterans to pursue entrepreneurship through select programs and charitable support. • Providing quality products and content that resonate with these audiences.
Additionally, our coffee, apparel, and gear are sold through specialty retailers like Bass Pro Shops, Scheels, and Ace Hardware. In 2024, the Wholesale channel generated $245.0 million in sales, compared to $225.1 million in 2023.
Additionally, our coffee, apparel, and gear are sold through specialty retailers like Bass Pro Shops, Scheels, and Ace Hardware. In 2025, the Wholesale channel generated $258.0 million in sales, compared to $245.0 million in 2024.
We believe our FDD complies in all material aspects with both the FTC franchise rules and all applicable state laws regulating franchising in those states in which we have franchises.
We believe our FDD is in material compliance with both the FTC franchise rules and all applicable state laws regulating franchising in those states in which we have franchises.
Product Supply The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua. We also source green coffee beans from over ten countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts. Quality control is also a critically important part of our manufacturing and supply chain operations.
Product Supply The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua. We also source green coffee beans from more than ten additional countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts. Quality control is a critical component of our manufacturing and supply chain operations.
Competition in the coffee market is influenced by factors such as product quality, roasting methods, brand recognition, and technology. A key competitive advantage is our in-house roasting for nearly half of our bagged coffee products, which we consider essential to delivering the exceptional quality our customers expect.
Competition in the coffee market is influenced by factors such as product quality, roasting methods, brand recognition, and technology. A key competitive capability is our in-house roasting for a significant portion of our bagged coffee products, which we consider important to delivering the exceptional quality our customers expect.
We are also subject to the Americans with Disabilities Act (“ADA”), which prohibits discrimination on the basis of a disability and public accommodations in employment, which may require us to design or modify our facilities to make reasonable accommodations for disabled persons. See Item 1A. Risk Factors. Risks Related to Regulation, Litigation and Taxation for further information.
We are also subject to the Americans with Disabilities Act (“ADA”), which prohibits discrimination on the basis of a disability and governs accessibility requirements for public accommodations and employment, which may require us to design or modify our facilities to make reasonable accommodations for disabled persons. See Item 1A. Risk Factors.
Human Capital We have built a strong and cohesive culture centered around our mission of serving coffee and content, and our culture to active military, Veterans, first responders, and all who love America. We are Veteran-controlled, and approximately 32% of our employees are Veterans or military spouses.
Human Capital We have built a strong and cohesive culture centered around our mission of serving coffee and content, and supporting active military members, Veterans, first responders, and others who share our values. We are Veteran-controlled, and approximately 32% of our employees are Veterans or military spouses.
These initiatives include partnerships with social media influencers and high-profile sports organizations to connect with new and existing audiences. For instance, in July 2022, we announced a partnership with the Dallas Cowboys, featuring product placement at AT&T Stadium.
In addition to media content, we continue to grow through strategic partnerships and collaborations that amplify our brand and extend our reach. These initiatives include partnerships with social media influencers and high-profile sports organizations to connect with new and existing audiences. For instance, in July 2022, we announced a partnership with the Dallas Cowboys, featuring product placement at AT&T Stadium.
Our goal is to maintain our current level of Veteran hires as we expand our operations and further develop our omni-channel business model. As of December 31, 2024, we employed 551 employees across locations in the United States.
Our goal is to maintain a similar level of Veteran and military spouse representation as we expand our operations and further develop our omni-channel business model. As of December 31, 2025, we employed 468 employees across locations in the United States.
In our Wholesale channel, we sell packaged coffee and our RTD beverages through leading Food, Drug, and Mass (“FDM”) retailers such as Walmart, Sam’s Club, regional and national grocery chains, and convenience stores, such as 7-Eleven, Casey’s General Store, and Circle K.
Each channel plays a distinct role in reaching our customers, building our community, and growing our brand. 8 Table of Contents In our Wholesale channel, we sell packaged coffee and our RTD beverages through leading Food, Drug, and Mass (“FDM”) retailers such as Walmart, Sam’s Club, regional and national grocery chains, and convenience stores, such as 7-Eleven, Casey’s General Store, and Circle K.
This channel allows us to engage directly with our customers and gain valuable insight into their preferences. The DTC channel includes our subscription-based Coffee Club, through which customers can receive ground, whole bean, single-serve coffee, or apparel delivered to their home or office on a customizable schedule. As of December 31, 2024, the Coffee Club served approximately 190,400 active subscribers.
The DTC channel includes our subscription-based Coffee Club, through which customers can receive ground, whole bean, single-serve coffee, or apparel delivered to their home or office on a customizable schedule. As of December 31, 2025, the Coffee Club served approximately 159,900 active subscribers.
Employee Wellness We promote health, wellness, and safety through a variety of means which include, but are not limited to, onsite employee training modules, external support such as employee assistance programs and crisis counseling, and universal escalation procedures as it pertains to safety protocols.
Employee Wellness We promote health, wellness, and safety through a variety of means, including onsite employee training modules, external support programs, such as employee assistance programs and crisis counseling, and standardized escalation procedures related to workplace safety protocols.
Despite these challenges, we are uniquely positioned to compete in the U.S. coffee market and the U.S. energy drink market. Our differentiation lies in superior product offerings, a powerful media platform, a mission-driven lifestyle brand, a loyal and engaged customer base, and a scalable omnichannel strategy supported by a large subscriber base.
Despite these challenges, we are uniquely positioned to compete in the U.S. coffee market and the U.S. energy drink market. Our differentiation lies in our product portfolio, brand positioning, in-house media and content capabilities, and omnichannel distribution strategy supported by a large and engaged subscriber base.
Of the 551 employees, 39 are focused in manufacturing, 259 are in corporate or other administrative roles, and 253 are in roles at Outposts. In addition, we employ part-time and seasonal workers. We will continue to focus on hiring Veterans and first responders and training our employees to provide the authentic Black Rifle Coffee Company experience in our Outpost locations.
Of the 468 employees, 39 were employed in manufacturing, 214 were employed in corporate or other administrative roles, and 215 were employed in Outpost operations. In addition, we employ part-time and seasonal workers. We will continue to focus on hiring Veterans and first responders and training employees to deliver a consistent Black Rifle Coffee Company experience in our Outpost locations.
In the out-of-home coffee category, we compete with both nationally recognized brands and smaller local coffee shops. While long-established competitors benefit from greater brand recognition and significantly larger financial, technological, roasting, sales, and distribution resources, our expansion into the FDM market has unlocked new opportunities to increase brand awareness and make our products more accessible to consumers.
In the out-of-home coffee category, we compete with both nationally recognized brands and smaller local coffee shops. While long-established competitors benefit from greater brand recognition and significantly larger financial, technological, roasting, sales, and distribution resources, our retail distribution expansion strategy has increased brand visibility and product accessibility.
In February 2024, we entered into a three-year marketing partnership with the UFC, further elevating our presence in the sports and entertainment landscape. These partnerships, combined with our distinctive media strategy, help us build strong connections with our customers, drive brand loyalty, and ensure Black Rifle Coffee stands out in a competitive market.
In February 2024, we entered into a three-year marketing partnership with the UFC, which includes brand visibility across UFC platforms and events. These partnerships, combined with our integrated media and marketing strategy, help us build connections with our customers, drive brand loyalty, and differentiate Black Rifle Coffee in a competitive market.
In the RTD coffee, retort dairy, and energy drink categories, we face competition from established brands along with significant barriers to entry, such as production and distribution capabilities. However, our unique positioning and loyal customer base allow us to carve out a distinct space in these markets.
In the RTD coffee, retort dairy, and energy drink categories, we face competition from established brands and encounter barriers to entry, such as production and distribution capabilities. While these markets are competitive, our brand positioning and customer base support our participation in these categories.
At the same time, we captivate and entertain with humor, creativity, and engaging formats that resonate deeply with our loyal and passionate customer base. This comprehensive approach reflects our core values while fostering lasting brand loyalty and recognition. In addition to media content, we continue to grow through strategic partnerships and collaborations that amplify our brand and extend our reach.
Through brand-focused storytelling, we highlight the experiences of Veterans, first responders, and everyday heroes who embody our mission. At the same time, we captivate and entertain with humor, creativity, and engaging formats that resonate deeply with our loyal and passionate customer base. This comprehensive approach reflects our core values while fostering lasting brand loyalty and recognition.
The first quarter typically will experience lower revenues. In our DTC and Outpost revenue channels, we tend to have higher revenues and cash flow during the holiday season in the fourth quarter. Results for any quarter will not necessarily be indicative of the results for a full fiscal year.
The first quarter typically experiences lower revenues compared to other quarters of the year, while revenues and cash flows are generally higher during the holiday season in the fourth quarter compared to other quarters of the year. Results for any quarter are not necessarily indicative of the results for a full fiscal year.
Those rewards include but are not limited to medical, dental, vision, and voluntary coverages, as well as a variety of compensation rewards. Intellectual Property We own many registered trademarks and service marks in the United States, including the “Black Rifle Coffee Company” trademark, and our word marks have been registered in multiple classes of goods and services.
Intellectual Property We own a portfolio of registered trademarks and service marks in the United States, including the “Black Rifle Coffee Company” trademark, and our word marks are registered in multiple classes of goods and services. We own a more limited subset of registered trademarks in jurisdictions outside the United States.
In 2024, DTC sales totaled $123.8 million, compared to $143.2 million in 2023, reflecting a 14% decline as consumer purchasing behavior shifted toward retail channels and resources were reallocated to growing the Wholesale channel.
In 2025, DTC sales totaled $117.6 million, compared to $123.8 million in 2024, reflecting a 5% decline primarily due to consumer purchasing behavior shifting toward retail channels and reallocation of resources in order to grow the Wholesale channel.
Additionally, our customers exhibit higher spending than the typical coffee buyer, frequently purchasing merchandise alongside coffee and driving an attractive average order value of approximately $12 to $13 at our Outposts. Our ability to engage customers across multiple categories uniquely positions us for growth in a competitive market landscape. Seasonality Our business is subject to moderate seasonal fluctuations.
Additionally, our customers often purchase multiple product categories, including merchandise, which contributes to an average order value of approximately $13 at our corporate-owned Outposts. Our ability to engage customers across multiple categories supports our position in a competitive market landscape. Seasonality Our business is subject to moderate seasonal fluctuations.
Our Mission and Community Our mission at Black Rifle Coffee Company is to serve premium coffee beverages and content to active-duty military, Veterans, first responders, and all who love America. Founded and led by combat Veterans of the Global War on Terror, we are a mission-driven company committed to delivering quality products while giving back to the communities we serve.
Founded and led by combat Veterans of the Global War on Terror, we are a mission-driven company committed to delivering quality products while giving back to the communities we serve. This dedication is reflected in our recruitment and hiring practices, charitable donations, and storytelling through our media channels.
The fund focuses on Veteran-related causes, enabling us to provide direct support to individuals, charities, and organizations aligned with our mission to serve those who serve. Our Business We are a digitally native brand with an established omnichannel business model, operating through one reportable segment that comprises three primary channels: DTC, Wholesale, and Outposts.
Our Business We are a digitally native brand with an established omnichannel business model, operating through one reportable segment composed of three primary channels: Wholesale, DTC and Outposts.
Company Overview Black Rifle Coffee Company is a Veteran-founded and led premium coffee, energy drink, and media company operating through three primary channels: Wholesale, DTC, and Outposts. Founded in 2014 by U.S. Army Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Hafer personally roasted, packaged, and shipped coffee directly to consumers.
Company Overview Black Rifle Coffee Company is a Veteran-founded and led premium coffee, and energy drink, company operating through one reportable segment composed of three primary channels: Wholesale, DTC, and Outposts. We leverage in-house media and content creation to support brand awareness, customer engagement, and community building. Founded in 2014 by U.S.
These agreements typically restrict third parties’ activities with respect to use of the marks and impose brand standards requirements. We require licensees to inform us of any potential infringement of the marks. We own a variety of copyrighted materials, chiefly in the form of original artwork presented on our bagged coffee.
We license the use of our marks to franchise partners, third-party vendors, and others through franchise agreements, vendor agreements, and licensing agreements. These agreements typically limit and regulate third parties’ activities with respect to use of the marks and impose brand standards and quality control requirements. We require licensees to inform us of any potential infringement of the marks.
This dedication is reflected in our direct hiring practices, charitable donations, and storytelling through our media channels. As a public benefit corporation, Black Rifle Coffee Company balances profitability with purpose. Our public benefit purpose is to support the underserved active military, Veteran, and first-responder communities.
As a public benefit corporation, Black Rifle Coffee Company balances profitability with purpose. Our public benefit purpose is to support active duty military members, Veterans, and first-responders, including underserved populations within those communities.
We own a more limited subset of registered trademarks in jurisdictions outside the United States. Our most important trademark might be our “BRCC” logo, which immediately identifies the brand. We believe that the Black Rifle Coffee Company name and all of its associated marks are of significant value and importance to our business.
Our “BRCC” logo is a key trademark that identifies the brand. We believe that the Black Rifle Coffee Company name and all of its associated marks are important to our business. As a general policy, we pursue registration and monitor and enforce the use of our marks in the United States and take action against unauthorized users.
We have prioritized growth in this channel by expanding distribution in grocery stores, club stores, convenience stores, and specialty retailers, positioning the Wholesale channel as a key driver of future revenue. Our Outposts offer a reimagined coffee shop experience, featuring freshly brewed coffee, Black Rifle Coffee merchandise, and a welcoming environment for community connection.
We have prioritized growth in this channel by expanding distribution in grocery stores, club stores, convenience stores, and specialty retailers, positioning the Wholesale channel as a key driver of future revenue. Our DTC platform has been the foundation of our business since the inception of the company and launch of www.blackriflecoffee.com.
Since opening the first Outpost in San Antonio, Texas, in 2020, we have expanded to operate eighteen company-owned Outposts and nineteen franchised locations across ten states, including Texas, Utah, and Tennessee. In 2024, Outpost sales totaled $22.7 million, a decline from $27.3 million in 2023.
Our Outposts offer a company-operated and franchised coffee shop experience, featuring freshly brewed coffee, Black Rifle Coffee merchandise, and a community oriented environment. Since opening the first Outpost in San Antonio, Texas, in 2020, we have expanded to operate 17 company-owned Outposts and 18 franchised locations across ten states, including Texas, Utah, and Tennessee.
Beyond coffee and Black Rifle Energy, our highly engaged customers consistently purchase branded merchandise, proudly wear Black Rifle Coffee apparel, display decals and banners, and actively recommend our brand through social media and by word-of-mouth. This emotional connection and advocacy drive our growth and open opportunities to expand our product portfolio.
Beyond coffee and Black Rifle Energy, our customers also purchase branded merchandise, including Black Rifle Coffee apparel, display decals and banners, and engage with our brand through social media and word-of-mouth referrals. This brand affinity supports customer retention and provides opportunities to introduce additional products over time.
We rely on the protection of the United States Copyright Act for the protection of our copyrighted works, and challenge unauthorized users both within and outside of the U.S.
We own a variety of copyrighted materials, primarily consisting of original artwork presented on our coffee packaging and other marketing materials. We rely on the protection of the United States Copyright Act and other applicable laws for the protection of our copyrighted works, and take action to enforce our right both within and outside of the United States.
This dedication fosters a strong, cohesive culture at Black Rifle Coffee Company, and we aim for half of our new hires to be Veterans and military spouses. Our corporate giving is strengthened through direct donations to charities aligned with our public benefit purpose and through The BRCC Fund, our 501(c)(3) nonprofit organization.
This dedication fosters a strong, cohesive culture at Black Rifle Coffee Company, and we seek to maintain Veterans and military spouses as a meaningful portion of our workforce.
Guided by a three-pronged strategy—Inform, Inspire, and Entertain—we educate our audience on the craft of coffee, sharing insights into our meticulous roasting processes and premium products. Through compelling storytelling, we highlight the experiences of Veterans, first responders, and everyday heroes who embody our mission.
We create proprietary digital and social media content designed to strengthen our connection with the Black Rifle Coffee community. Guided by a three-pronged strategy—Inform, Inspire, and Entertain—we use content to educate consumers on our products and brand, including insights into our roasting processes and premium offerings.
Our product offerings have expanded beyond roast coffee to include single-serve coffee, RTD coffee, and, as of late 2024, Black Rifle Energy, a ready-to-drink energy beverage. Additionally, we offer Black Rifle branded apparel, coffee brewing equipment, and outdoor and lifestyle gear that our customers proudly wear and use to showcase their connection to our brand.
Black Rifle Coffee operates out of offices in West Valley City, Utah; San Antonio, Texas; and Nashville, Tennessee, with a manufacturing facility in Manchester, Tennessee. Our product offerings have expanded beyond traditional roast coffee to include single-serve coffee and ready-to-drink coffee products, as well as Black Rifle Energy, a ready-to-drink energy beverage launched in late 2024.
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Each channel plays a vital role in reaching our customers, building our community, and growing our brand. 8 Table of Contents Our DTC platform has been the foundation of our business since the inception of the company and launch of www.blackriflecoffee.com. This channel enabled us to quickly establish ourselves as a recognizable beverage brand in the United States.
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In addition, we offer Black Rifle branded apparel, coffee brewing equipment, and outdoor and lifestyle gear designed to extend brand engagement and customer loyalty. Our Mission and Community Our mission at Black Rifle Coffee Company is to serve premium coffee and energy beverages and provide proprietary content to active-duty military, Veterans, first responders, and others who share our values.
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While new unit growth in this channel is currently limited, we plan to resume investments in Outposts in the coming years as we refine our strategy and continue prioritizing capital allocation toward growth in the Wholesale channel. We create dynamic, cause-driven media content designed to strengthen our connection with the Black Rifle Coffee community.
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Our corporate giving is strengthened through direct cash and in-kind donations to charities aligned with our public benefit purpose, providing direct support to individuals, charities, and organizations aligned with our mission to serve those who serve.
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As this is typically not a one-size fits all approach, training and development plans are unique to the employee and their overall business unit. 10 Table of Contents Total Rewards Package Our Total Rewards Package is comprehensive in the fact that it addresses each milestone of the employee life cycle.
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This channel enabled us to establish brand awareness and scale as a recognizable beverage brand in the United States. Through this channel, we engage directly with customers and obtain insight into consumer preferences.
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As a general policy, we pursue registration and monitor the use of our marks in the United States and challenge unauthorized users. We license the use of our marks to franchise partners, third-party vendors, and others through franchise agreements, vendor agreements, and licensing agreements.
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In 2025, Outpost sales totaled $22.6 million, a decline from $22.7 million in 2024. While new unit growth in this channel is currently limited, we will continue to evaluate the role of this channel within our broader growth strategy, while prioritizing capital allocation toward growth in the Wholesale channel.
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Because development needs vary by role and function, training and development plans are tailored to individual employees and their respective business units. 10 Table of Contents Total Rewards Package Our Total Rewards Package is designed to support employees throughout the employment lifecycle and includes, among other benefits, medical, dental, vision, and voluntary coverages, as well as a variety of cash and equity-based compensation programs.
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Risks Related to Regulation, Litigation and Taxation for further information.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeChanges in Data Protection Laws are, and are likely to remain, uncertain for the foreseeable future, and our actual or perceived failure to address or comply with these laws could: increase our compliance and operational costs; limit our ability to market our products or services and attract new and retain current customers; limit or eliminate our ability to Process; expose us to regulatory scrutiny, actions, investigations, fines, and penalties; result in reputational harm; lead to a loss of customers; reduce the use of our products or services; result in litigation and liability, including class action litigation; cause us to incur significant costs, expenses, and fees (including attorney fees); cause a material adverse impact to business operations or financial results; and otherwise result in other material harm to our business (“Adverse Data Protection Impact”). 34 Table of Contents We are or may also be subject to the terms of our external and internal privacy and security policies, codes, representations, certifications, industry standards, publications, and frameworks (“Privacy Policies”) and contractual obligations to third parties related to privacy, information security, and Processing, including contractual obligations to indemnify and hold harmless third parties from the costs or consequences of non-compliance with Data Protection Laws or other obligations (“Data Protection Obligations”).
Biggest changeAny significant change to Data Protection Laws and Data Protection Obligations, including without limitation, how the express or implied consent of customers for Processing is obtained, could increase our costs and require us to modify our operations, possibly in a material manner, which we may be unable to complete and may limit our ability to store and Process customer data and operate our business. 33 Table of Contents Changes in Data Protection Laws are, and are likely to remain, uncertain for the foreseeable future, and our actual or perceived failure to address or comply with these laws could: increase our compliance and operational costs; limit our ability to market our products or services and attract new and retain current customers; limit or eliminate our ability to Process; expose us to regulatory scrutiny, actions, investigations, fines, and penalties; result in reputational harm; lead to a loss of customers; reduce the use of our products or services; result in litigation and liability, including class action litigation; cause us to incur significant costs, expenses, and fees (including attorney fees); cause a material adverse impact to business operations or financial results; and otherwise result in other material harm to our business (“Adverse Data Protection Impact”).
Our current operations are highly dependent on the financial performance of our DTC and Wholesale channels, and reliance on third party logistics, as well as other risks, could negatively impact our business.
Our current operations are highly dependent on the financial performance of our Wholesale and DTC channels, and reliance on third-party logistics, as well as other risks, could negatively impact our business.
If we continue to add third party logistics providers, require them to expand their fulfillment, distribution, or warehouse capabilities, expand to new locations, add products categories with different fulfillment requirements, or change the mix of products we sell, our logistics and distribution network will become increasingly complex and its operation will become more challenging for us and our third party logistics providers.
If we continue to add or change third-party logistics providers, require them to expand their fulfillment, distribution, or warehouse capabilities, expand to new locations, add products categories with different fulfillment requirements, or change the mix of products we sell, our logistics and distribution network will become increasingly complex and its operation will become more challenging for us and our third-party logistics providers.
Best, our founder and co-founder, are instrumental to our marketing and publicity strategy and are closely identified with both the brand and us in general. They actively promote the brand through their large social media platforms and through various public appearances, and we believe that the unique personalities of our founders are part of our success.
Best, our founder and co-founder, are instrumental to our marketing and publicity strategy and are closely identified with both the brand and us in general. They actively promote the brand through their large social media platforms and through various public appearances, and we believe that the unique personalities of our founder and co-founders are part of our success.
Therefore, there is no guarantee such a conflict would be resolved in favor of our stockholders, which could have a material adverse effect on our business, results of operations and financial condition, which in turn could cause the price of our stock to decline.
Therefore, there is no guarantee such a conflict would be resolved in favor of our stockholders, which could have a material adverse effect on our business, financial condition and results of operations, which in turn could cause the price of our stock to decline.
We are a “controlled company” within the meaning of New York Stock Exchange (“NYSE”) rules and, as a result, we qualify for exemptions from certain corporate governance requirements. Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such requirements.
We are a “controlled company” within the meaning of New York Stock Exchange (the “NYSE”) rules and, as a result, we qualify for exemptions from certain corporate governance requirements. Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such requirements.
Potential disruptions could arise from various factors, including casualty loss at our roasting facility, interruptions by third party logistics service providers or common carriers, trade restrictions such as quotas or increased tariffs, regulatory action like placement of a foreign supplier on an FDA import alert, rising postage and shipping costs, embargoes, customs restrictions, pandemics, social or labor unrest, weather events, natural disasters, political disputes, military conflicts, or other unforeseen incidents.
Potential disruptions could arise from various factors, including casualty loss at our roasting facility, interruptions or delays by third-party logistics service providers or common carriers, trade restrictions such as quotas or increased tariffs, regulatory action like placement of a foreign supplier on an FDA import alert, rising postage and shipping costs, embargoes, customs restrictions, pandemics, social or labor unrest, weather events, natural disasters, political disputes, military conflicts, or other unforeseen incidents.
Furthermore, if non-employees cease publishing content supporting us on their social media platforms for any reason, our online presence may decrease and our operating results may suffer. 16 Table of Contents Additionally, we rely on third party social media platforms, such as Facebook, Instagram, YouTube, Google, and others, to generate new customers and to engage with existing customers.
Furthermore, if non-employees cease publishing content supporting us on their social media platforms for any reason, our online presence may decrease and our operating results may suffer. 16 Table of Contents Additionally, we rely on third-party social media platforms, such as Facebook, Instagram, YouTube, X, Google, and others, to generate new customers and to engage with existing customers.
We depend on cash generated from our operations to support our growth, and we may need to raise additional capital, which may not always be available on acceptable terms or at all. In addition, as we expand our business, it is important that we continue to maintain a high level of customer service and satisfaction.
We depend on cash generated from our operations to support future growth, and we may need to raise additional capital, which may not always be available on acceptable terms or at all. In addition, as we expand our business, it is important that we continue to maintain a high level of customer service and satisfaction.
In these situations, our obligations under the TRA could have a substantial negative impact on its liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control. There can be no assurance that we will be able to finance its obligations under the TRA.
In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control. There can be no assurance that we will be able to finance our obligations under the TRA.
Additionally, if our competitors begin to evolve their business strategies and adopt aspects of our business model, such as our subscription model and innovative content and branding, including Veteran and first-responder-focused branding -- certain examples of which exist -- our customers may be drawn to those competitors for their beverage needs and our business could be harmed.
Additionally, if our competitors begin to evolve their business strategies and adopt aspects of our business model, such as our subscription model and innovative content and branding, including military, Veteran and first-responder-focused branding—certain examples of which exist—our customers may be drawn to those competitors for their beverage needs and our business could be harmed.
It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find this provision of the Charter inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors. 41 Table of Contents Certain significant stockholders and Authentic Brands’ members whose interests may differ from those of our public stockholders following the Business Combination have the ability to significantly influence our business and management.
It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find this provision of the Charter inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors. 40 Table of Contents Certain significant stockholders and Authentic Brands’ members whose interests may differ from those of our public stockholders following the Business Combination have the ability to significantly influence our business and management.
Not only are research and development expensive investments, there is also no guarantee that our co-manufacturing partners or distribution networks will fully cooperate in producing or promoting our new products. Launching new products at commercial convenience stores, for example, requires lead time.
Not only are research and development expensive investments, but there is also no guarantee that our co-manufacturing partners or distribution networks will fully cooperate in producing or promoting our new products. Launching new products at commercial convenience stores, for example, requires lead time.
Noncompliance could result in Adverse Data Protection Impact, including proceedings against us by governmental and regulatory entities, collaborators, individuals, or others. 35 Table of Contents We rely on a variety of marketing techniques and practices, including email and social media marketing, online targeted advertising, and cookie-based processing, to sell our products and services and to attract new customers, and we, and our vendors, are subject to various current and future Data Protection Laws and Data Protection Obligations that govern marketing and advertising practices, including recent developments for the regulation of “opt-in” and “opt-out” options regarding direct marketing to consumers through the use of emails and text messaging.
Noncompliance could result in Adverse Data Protection Impact, including proceedings against us by governmental and regulatory entities, collaborators, individuals, or others. 34 Table of Contents We rely on a variety of marketing techniques and practices, including email and social media marketing, online targeted advertising, and cookie-based processing, to sell our products and services and to attract new customers, and we, and our vendors, are subject to various current and future Data Protection Laws and Data Protection Obligations that govern marketing and advertising practices, including recent developments for the regulation of “opt-in” and “opt-out” options regarding direct marketing to consumers through the use of emails and text messaging.
If we are not able to provide this report in a timely manner or at all, or if the report is not viewed favorably by parties doing business with us or regulators or others reviewing our credentials, our reputation and status as a public benefit corporation may be harmed and the value of our stock could decrease as a result. 39 Table of Contents Our only material assets are our direct and indirect interests in BRCC LLC, and we are accordingly dependent upon distributions from BRCC LLC to pay dividends and taxes and other expenses.
If we are not able to provide this report in a timely manner or at all, or if the report is not viewed favorably by parties doing business with us or regulators or others reviewing our credentials, our reputation and status as a public benefit corporation may be harmed and the value of our stock could decrease as a result. 38 Table of Contents Our only material assets are our direct and indirect interests in BRCC LLC, and we are accordingly dependent upon distributions from BRCC LLC to pay dividends and taxes and other expenses.
While the selling holders may experience a positive rate of return based on the trading price of the Company’s common stock, the public holders of the Company’s common stock may not experience a similar rate of return on the common stock they purchased due to differences in the applicable purchase price and trading price. 42 Table of Contents We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
While the selling holders may experience a positive rate of return based on the trading price of the Company’s common stock, the public holders of the Company’s common stock may not experience a similar rate of return on the common stock they purchased due to differences in the applicable purchase price and trading price. 41 Table of Contents We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
Accordingly, being a public benefit corporation could have a material adverse effect on our business, results of operations and financial condition, which in turn could cause the price of our stock to decline. 38 Table of Contents While we generally believe our pursuit of our PBC Purpose creates value for our brand as well as the individuals and organizations we serve, there is no assurance that we will be able to achieve the PBC Purpose or that the expected positive impact from being a public benefit corporation will be realized, which could have a material adverse effect on our reputation, which in turn may have a material adverse effect on our business, results of operations and financial condition.
Accordingly, being a public benefit corporation could have a material adverse effect on our business, financial condition and results of operations, which in turn could cause the price of our stock to decline. 37 Table of Contents While we generally believe our pursuit of our PBC Purpose creates value for our brand as well as the individuals and organizations we serve, there is no assurance that we will be able to achieve the PBC Purpose or that the expected positive impact from being a public benefit corporation will be realized, which could have a material adverse effect on our reputation, which in turn may have a material adverse effect on our business, financial condition and results of operations.
At this time, it remains unclear what the U.S. government or foreign governments will or will not do with respect to international trade agreements and policies or additional tariffs that may be imposed.
At this time, it remains unclear what the U.S. government or foreign governments will or will not do with respect to future international trade agreements and policies or additional tariffs that may be imposed.
The supply and price of coffee we purchase can also be affected by multiple factors in the producing countries, such as weather (including the potential effects of climate change), natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels, political and economic conditions, tariffs, and the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies.
The supply and price of coffee we purchase are and can be affected by multiple factors in the producing countries, such as weather (including the potential effects of climate change), natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels, political and economic conditions, tariffs, and the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies.
The imposition of menu-labeling laws could have an adverse effect on our results of operations and financial position, as well as the beverage industry in general. 37 Table of Contents Risks Related to Our Corporate Structure The Tax Receivable Agreement with the Unitholders of Authentic Brands, LLC (“Authentic Brands”) requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make could be substantial.
The imposition of menu-labeling laws could have an adverse effect on our results of operations and financial position, as well as the beverage industry in general. 36 Table of Contents Risks Related to Our Corporate Structure The Tax Receivable Agreement with the Unitholders of Authentic Brands, LLC (“Authentic Brands”) requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make could be substantial.
Our franchise partners are independent business operators and are not our employees, and as such we have limited control over how our franchise partners run their businesses, and their inability to operate successfully could adversely affect our operating results. 27 Table of Contents We receive royalties, franchise fees, and collect franchisee contributions to a BRCC franchisee marketing fund that is dedicated to Outpost promotional initiatives.
Our franchise partners are independent business operators and are not our employees, and as such we have limited control over how our franchise partners run their businesses, and their inability to operate successfully could adversely affect our operating results. 26 Table of Contents We receive royalties, franchise fees, and collect franchisee contributions to a BRCC franchisee marketing fund that is dedicated to Outpost promotional initiatives.
As laws and regulations governing the use of these platforms evolve, any failure by us or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms could subject us to regulatory investigations, class action lawsuits, liability, fines, suspension or removal from such platform, or other penalties and adversely affect our business, financial condition, and operating results.
As laws and regulations governing the use of these platforms evolve, any failure by us or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms could subject us to regulatory investigations, class action lawsuits, liability, fines, suspension or removal from such platform, or other penalties and adversely affect our business, financial condition, and results of operations.
Any charges related to the write off of excess inventories could have a material adverse effect on our business, operating results, and financial condition. In addition, we may face risks related to payment terms, arrangements, and due dates with respect to our co-manufacturer, suppliers, or other vendors due to liquidity concerns.
Any charges related to the write off of excess inventories could have a material adverse effect on our business, financial condition and results of operations. In addition, we may face risks related to payment terms, arrangements, and due dates with respect to our co-manufacturer, suppliers, or other vendors due to liquidity concerns.
If our information technology networks and systems or data processing (or those of our third party service providers) suffers damage, security incidents, disruption or shutdown, and such issues are not effectively resolved in a timely manner, they could cause a material adverse impact to our Business Functions and our business, reputation, and financial condition.
If our information technology networks and systems or data processing (or those of our third-party service providers) suffers damage, security incidents, disruption or shutdown, and such issues are not effectively resolved in a timely manner, they could cause a material adverse impact to our Business Functions, reputation and our business, financial condition and results of operations.
We rely on co-manufacturers to provide us with a significant portion of our production capacity, in particular with our RTD coffee, Black Rifle Energy, rounds, and certain suppliers to supply various components of co-manufactured products, such as dairy and aluminum cans, and to a lesser extent our at-home coffee products, such as whole bean and ground bagged coffee.
We rely on co-manufacturers to provide us with a significant portion of our production capacity, in particular with our RTD coffee, Black Rifle Energy, rounds, and certain suppliers to supply various components of co-manufactured products, such as dairy and aluminum cans, and our at-home coffee products, such as whole bean and ground bagged coffee.
For example, controlled companies: 43 Table of Contents • are not required to have a board that is composed of a majority of “independent directors,” as defined under the NYSE rules; • are not required to have a compensation committee that is composed entirely of independent directors; and • are not required to have director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominations committee that is composed entirely of independent directors.
For example, controlled companies: 42 Table of Contents • are not required to have a board that is composed of a majority of “independent directors,” as defined under the NYSE rules; • are not required to have a compensation committee that is composed entirely of independent directors; and • are not required to have director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominations committee that is composed entirely of independent directors.
Our operating results and growth strategies are partly dependent upon the success of our franchise partners, and we have limited control with respect to their operations. Additionally, our franchise partners’ interests may conflict or diverge with our interests in the future, which could have a negative impact on our business.
Our operating results and growth strategies are partly dependent upon the success of our franchise partners, and we have limited control with respect to their operations. Additionally, our franchise partners’ interests may conflict or diverge with our interests in the future, which could have a negative impact on our business, financial condition and results of operations.
Further, public benefit corporations may not be attractive targets for activists or hedge fund investors because new directors would still have to consider and give appropriate weight to the public benefit along with stockholder value, and stockholders committed to the public benefit can enforce this through derivative suits.
Further, public benefit corporations may not be attractive targets for activists or hedge fund investors because new directors would still have to consider and give appropriate weight to the PBC Purpose along with stockholder value, and stockholders committed to the PBC Purpose can enforce this through derivative suits.
Our founders often appear in unscripted and un-reviewed online publications, such as podcasts, over which we have little curation. Ultimately, the risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may harm our business.
Our founder and co-founders often appear in unscripted and un-reviewed online publications, such as podcasts, over which we have little curation. Ultimately, the risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may harm our business.
Most importantly, if our customers perceive that we have abandoned or decreased the priority of our mission and our authenticity, in particular with respect to our support of the Veteran and military communities, we could lose significant portions of our customer base and experience substantial harm to our reputation and our operating results.
Most importantly, if our customers perceive that we have abandoned or decreased the priority of our mission and our authenticity, in particular with respect to our support of the military, Veteran and first-responder communities, we could lose significant portions of our customer base and experience substantial harm to our reputation and our operating results.
If the adoption of new revenue models adversely impacts our subscriber relationships, then subscriber growth, subscriber engagement, and our business, financial condition, and operating results could be harmed. 17 Table of Contents Our DTC and Wholesale business’ success depends on third party logistics and a network of brokers and distributors.
If the adoption of new revenue models adversely impacts our subscriber relationships, then subscriber growth, subscriber engagement, and our business, financial condition, and results of operations could be harmed. 17 Table of Contents Our DTC and Wholesale business’ success depends on third-party logistics and a network of brokers and distributors.
Failure to properly expand into new channels or introduce different product types could result in significant expenditures without increased revenue. Developing new products and introducing them into Wholesale retailers, convenience stores, and our DTC platforms is an expensive and time-consuming process.
Failure to successfully expand into new channels or introduce different product types could result in significant expenditures without increased revenue. Developing new products and introducing them into Wholesale retailers, convenience stores, and our DTC platforms is an expensive and time-consuming process.
The loss of our co-manufacturer, any disruption or delay at our co-manufacturer, or any failure to identify and engage co-manufacturers to increase production capacity, could delay or postpone the production of our products or reduce our overall production capacity, either of which could have a material adverse effect on our business, operating results, and financial condition.
The loss of a co-manufacturer, any disruption or delay at our co-manufacturers, or any failure to identify and engage co-manufacturers to increase production capacity, could delay or postpone the production of our products or reduce our overall production capacity, either of which could have a material adverse effect on our business, financial condition and results of operations.
The value of the advertising provided under the arrangement may be difficult to value, and we are relying in significant part on the good faith of the counterparty to value the advertising accurately. The quantity of advertising available under the arrangement may also decrease over the four-year term because of inflation or other factors that increase the cost of advertising.
The value of the advertising provided under the arrangement may be difficult to value, and we are relying in significant part on the good faith of the counterparty to value the advertising accurately. The quantity of advertising available under the arrangement may also decrease over the term because of inflation or other factors that increase the cost of advertising.
Kadenacy became unavailable to us for any reason, or do not devote adequate time to our business operations, it may be difficult or impossible for us to find adequate replacements, which could cause us to be less successful in maintaining our brand and developing and effectively executing on our strategies.
Amigh, became unavailable to us for any reason, or do not devote adequate time to our business operations, it may be difficult or impossible for us to find adequate replacements, which could cause us to be less successful in maintaining our brand and developing and effectively executing on our strategies.
Lost sales and royalty payments caused by such closures or alterations, plus increased expenses from litigation, would harm our business. 36 Table of Contents Our business also carries a unique risk of liability in our industry regarding personal injury to employees and contractors.
Lost sales and royalty payments caused by such closures or alterations, plus increased expenses from litigation, would harm our business. 35 Table of Contents Our business also carries a unique risk of liability in our industry regarding personal injury to employees and contractors.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our Board or management. 40 Table of Contents In addition, as a Delaware public benefit corporation, we are generally subject to provisions of Delaware law, including the DGCL.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our Board or management. 39 Table of Contents In addition, as a Delaware public benefit corporation, we are generally subject to provisions of Delaware law, including the DGCL.
In addition to traditional computer “hackers,” threat actors, personnel (such as through theft, sabotage or misuse), and sophisticated nation-states and nation-state supported actors now engage in attacks. Our information technology networks and systems and those of third parties upon whom we rely, and the Processing they perform, may be vulnerable to data security and privacy threats, cyber and otherwise.
In addition to traditional computer “hackers,” threat actors, personnel (such as through theft, sabotage or misuse), and sophisticated nation-states and nation-state supported actors now engage in attacks. 22 Table of Contents Our information technology networks and systems and those of third parties upon whom we rely, and the Processing they perform, may be vulnerable to data security and privacy threats, cyber and otherwise.
From time to time, there have been and may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The loss of one or more of our executive officers or key employees could harm our business.
From time to time, there have been and may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The loss of one or more of our executive officers or key employees could harm our business. Mr. Hafer and Mr.
Such substantial indebtedness has important consequences for us, including: • a significant portion of our cash flow will be used to service such indebtedness, thereby limiting the availability of our cash flow to fund future growth, capital expenditures, working capital, business activities and other general corporate requirements; • restrictive covenants in the debt agreements could prevent us from borrowing additional funds for working capital, capital expenditures, and debt service requirements, which could result in an inability to fund our growth or result in a default under the debt agreements; • an increase in interest rates, as experienced since 2022 or as we may experience in the future, could significantly increase the cost of the variable rate debt under the debt agreements; • any inability to service or refinance such indebtedness or the acceleration of such indebtedness could result in default which could result in all of the outstanding indebtedness becoming due and payable, an inability to access the revolving credit facility (in whole or in part), foreclosure against the borrowers’ assets, and bankruptcy or liquidation; • such indebtedness increases our vulnerability to economic downturns and adverse industry conditions and reduces our flexibility to plan for, or react to, changes in our business or industry; and • our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors with less indebtedness, may be compromised due to the indebtedness and the restrictive covenants in the debt agreements. 29 Table of Contents We can provide no assurance that our business will generate sufficient cash flow from operations to service or repay the debt obligations, or that we will have the ability to issue new debt, draw on the revolving credit facility, or find other alternative sources of funds to satisfy our obligations and working capital needs.
Such substantial indebtedness has important implications for us, including: • a significant portion of our cash flow will be used to service such indebtedness, thereby limiting the availability of our cash flow to fund future growth, capital expenditures, working capital, business activities and other general corporate requirements; • restrictive covenants in the debt agreements could prevent us from borrowing additional funds for working capital, capital expenditures, and debt service requirements, which could result in an inability to fund our growth or result in a default under the debt agreements; • an increase in interest rates could significantly increase the cost of the variable rate debt under the debt agreements; • any inability to service or refinance such indebtedness or the acceleration of such indebtedness could result in default which could result in all of the outstanding indebtedness becoming due and payable, an inability to access the revolving credit facility (in whole or in part), foreclosure against the borrowers’ assets, and bankruptcy or liquidation; • such indebtedness increases our vulnerability to economic downturns and adverse industry conditions and reduces our flexibility to plan for, or react to, changes in our business or industry; and • our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors with less indebtedness, may be compromised due to the indebtedness and the restrictive covenants in the debt agreements. 28 Table of Contents We can provide no assurance that our business will generate sufficient cash flow from operations to service or repay the debt obligations, or that we will have the ability to issue new debt, draw on the revolving credit facility, or find other alternative sources of funds to satisfy our obligations and working capital needs.
In the United States, these include rules and regulations promulgated under the authority of the FTC, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act (the “CCPA”) and other state and federal laws relating to privacy and data security.
In the United States, these include rules and regulations promulgated under the authority of the FTC, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act (as amended, the “CCPA”) and other state and federal laws relating to privacy and data security.
Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors, and to do comparison shopping, as well as to engage with us and our competitors through digital services and experiences that are offered on mobile platforms.
Many of our consumers shop with us through our digital platforms. Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors, and to do comparison shopping, as well as to engage with us and our competitors through digital services and experiences that are offered on mobile platforms.
Rapid expansion may strain our existing resources, creating challenges in hiring, training, and managing a dispersed and growing workforce across multiple jurisdictions. Failure to scale effectively while maintaining our company culture could negatively impact our ability to attract and retain talent, execute our corporate strategy, and sustain long-term growth.
This moderate expansion may strain our existing resources, creating challenges in hiring, training, and managing a dispersed and growing workforce across multiple jurisdictions. Failure to scale effectively while maintaining our company culture could negatively impact our ability to attract and retain talent, execute our corporate strategy, and sustain long-term growth.
Also, because we own real estate used for office space, warehouse space, and manufacturing facilities, we are subject to all the risks generally associated with owning real estate, including changes in the investment climate for real estate, as well as strict, joint, and several liability for environmental contamination at or from the property, regardless of fault.
Also, because we own real estate used for manufacturing facilities, we are subject to all the risks generally associated with owning real estate, including changes in the investment climate for real estate, as well as strict, joint, and several liability for environmental contamination at or from the property, regardless of fault.
Our founders’ public personas are more closely tied to our brand than other companies, and we believe that the continued engagement of our founders with our customers will be a contributor to our growth. Additionally, our founders and executive officers occasionally travel in small aircraft to remote locations, sometimes together.
Our founder’s and co-founders’ public personas are more closely tied to our brand than other companies, and we believe that the continued engagement of our founder and co-founders with our customers will be a contributor to our growth. Additionally, our founder, co-founders and executive officers occasionally travel in small aircraft to remote locations, sometimes together.
Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our recovery. We are subject to numerous federal, state, and local laws with which compliance is both costly and complex.
Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our recovery. 31 Table of Contents We are subject to numerous federal, state, and local laws with which compliance is both costly and complex.
Our founder, Evan Hafer, beneficially owns approximately 63% of the combined voting power of our voting securities. As a result, we are a “controlled company” within the meaning of the NYSE corporate governance standards.
Our founder, Evan Hafer, beneficially owns approximately 51% of the combined voting power of our voting securities. As a result, we are a “controlled company” within the meaning of the NYSE corporate governance standards.
Financial Statements of this annual report), which provides for an asset-based revolving credit facility with committed maximum borrowing capacity of $75.0 million, and the Term Loan Financing Agreement (as defined in Note 8 , Long- Term Deb t to the audited financial statements in Item 8.
Financial Statements of this Annual Report), which provides for an asset-based revolving credit facility with committed maximum borrowing capacity of $75.0 million, and the Term Loan Financing Agreement (as defined in Note 8, Long-Term Debt to the audited financial statements in Item 8.
Extortion 23 Table of Contents payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Further, incidents experienced by other companies may also be leveraged against us.
Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Further, incidents experienced by other companies may also be leveraged against us.
Our ability to operate new Outposts profitably and increase average Outpost revenue and comparable Outpost sales will depend on many factors, some of which are beyond our control, including: • consumer awareness and understanding of our brand; • general economic conditions, which can affect Outpost traffic, local labor costs, and prices we pay for the products and other supplies we use; • consumption patterns and beverage preferences that differ from region to region; • changes in consumer preferences and discretionary spending, including in connection with broader economic concerns; • difficulties obtaining or maintaining adequate relationships with distributors or suppliers in new markets; • increases in prices for commodities, including coffee, milk, and flavored syrups; • inefficiency in our labor costs as the staff gains experience; • competition, either from our competitors in the beverage industry or our other Outposts; • temporary and permanent site characteristics of new Outposts; • changes in government regulation; and • other unanticipated increases in costs, any of which could give rise to delays or cost overruns.
Our ability to operate Outposts profitably will depend on many factors, some of which are beyond our control, including: • consumer awareness and understanding of our brand; • general economic conditions, which can affect Outpost traffic, local labor costs, and prices we pay for the products and other supplies we use; • consumption patterns and beverage preferences that differ from region to region; • changes in consumer preferences and discretionary spending, including in connection with broader economic concerns; • difficulties obtaining or maintaining adequate relationships with distributors or suppliers in new markets; • increases in prices for commodities, including coffee, milk, and flavored syrups; 21 Table of Contents • inefficiency in our labor costs as the staff gains experience; • competition, either from our competitors in the beverage industry or our other Outposts; • temporary and permanent site characteristics of Outposts; • changes in government regulation; and • other unanticipated increases in costs, any of which could give rise to delays or cost overruns.
Our largest primary Wholesale partner represented 28% of our consolidated net sales in 2024, and the failure to increase or maintain our sales with our primary Wholesale partners would have a negative impact on our growth prospects and any decrease or loss of any of our primary Wholesale partners’ business could result in a decrease in our net sales and operating income if we are unable to capture these sales through our DTC operations or other Wholesale accounts.
Our largest primary Wholesale partner represented 30% of our consolidated net sales in 2025, and the failure to increase or maintain our sales with our primary Wholesale partners would have a negative impact on our growth prospects and any decrease or loss of any of our primary Wholesale partners’ business could result in a decrease in our net sales and operating income if we are unable to capture these sales through our DTC operations or other Wholesale accounts.
For example, over the past two years, various social media platforms have implemented data privacy changes that limit the ability to target and measure advertising.
For example, over the past several years, various social media platforms have implemented data privacy changes that limit the ability to target and measure advertising.
Failure to attract new customers or retain existing ones, particularly in a cost-effective manner, could limit our ability to increase sales and materially harm our business and financial condition. Our new products or merchandise may not generate increased sales or profits.
Failure to attract new customers or retain existing ones, particularly in a cost-effective manner, could limit our ability to increase sales and materially harm our business, financial condition and results of operations. Our new products or merchandise may not generate increased sales or profits.
If our competitors increase their marketing spend while our available funds decrease, or if our advertising, promotions, or new product offerings are less effective than those of our competitors, our results of operations and financial performance could be adversely affected.
If our competitors increase their marketing spend while our available funds decrease, or if our advertising, promotions, or new product offerings are less effective than those of our competitors, our business, financial condition and results of operations could be adversely affected.
If we are unable to expand existing or secure new third party logistics providers to meet our future needs, our order fulfillment and shipping times may be delayed and our business, financial condition, and operating results may suffer.
If we are unable to expand existing or secure new third-party logistics providers to meet our future needs, our order fulfillment and shipping times may be delayed and our business, financial condition, and results of operations may suffer.
Due to our customer base, online presence, and reputation, among other factors, our Class A Common Stock may be subject to similar market volatility in the future not necessarily related to the performance of our business. 20 Table of Contents We may not be able to compete successfully with other producers and retailers of coffee and energy drinks.
Due to our customer base, online presence, and reputation, among other factors, our Class A Common Stock may be subject to similar market volatility in the future not necessarily related to the performance of our business. We may not be able to compete successfully with other producers and retailers of coffee, RTD and energy drinks.
If we are not able to continue to provide high levels of customer service, our reputation, as well as our business, could be harmed. 28 Table of Contents Disruptions at the bank in which we deposit our funds could have an adverse impact on our business and financial condition.
If we are not able to continue to provide high levels of customer service, our reputation, as well as our business, financial condition and results of operations, could be harmed. 27 Table of Contents Disruptions at the bank in which we deposit our funds could have an adverse impact on our business, financial condition and results of operations.
We have devoted, and will continue to devote in the future, significant resources to launch and promote new products to serve broader customer demand, adapt to changes in markets trends, and account for shifts in customer preferences.
We have devoted, and will continue to devote in the future, significant resources to research, launch and promote new products to serve broader customer demand, adapt to changes in market trends, and account for shifts in customer preferences.
We hold substantially all of our deposits with a single bank and the bank also serves as the lender under our senior credit facility. We rely on our deposits with the bank and access to our senior credit facility to fund a substantial amount of our operations.
We hold all of our deposits with a single bank and the bank also serves as the lender under our senior credit facility. We rely on our deposits with the bank and access to our senior credit facility to fund our operations.
As a result, we currently have cash and cash equivalents deposited in excess of federally insured levels with the bank, and if the bank were to fail, we could lose our deposits over $250,000. We may be adversely affected by the effects of inflation.
In addition, we currently have cash and cash equivalents deposited in excess of federally insured levels with the bank, and if the bank were to fail, we could lose our deposits over $250,000. We may be adversely affected by the effects of inflation.
Additionally, we plan to grow our Outpost business by opening new Company-operated and franchised locations, driving sales at existing locations, and enhancing digital platforms such as online ordering and loyalty programs. Failure to execute these strategic initiatives could result in slowed or halted growth, materially impacting our business, financial results, and overall financial condition.
Additionally, we plan to grow our Outpost business by driving sales at existing locations, and enhancing digital platforms such as online ordering and loyalty programs. Failure to execute these strategic initiatives could result in slowed or halted growth, materially impacting our business, financial results, and overall financial condition.
They also engage in outdoor recreational activities that have known risks, such as bear hunting and mountain sports. These activities could put our founders at risk and cause potential harm to our business. If the services of Mr. Hafer, Mr. Best, our Chief Executive Officer, Mr. Mondzelewski or Mr.
They also engage in outdoor recreational activities that have known risks, such as hunting and mountain sports. These activities could put our founder, co-founders and executive officers at risk and cause potential harm to our business. If the services of Mr. Hafer, Mr. Best, our Chief Executive Officer, Mr. Mondzelewski, or our Chief Financial Officer, Mr.
We were founded as a digitally native coffee brand in 2014 and have since expanded into multiple growth channels, including Wholesale retail, merchandise sales, franchised and Company-operated retail locations, RTD coffee, and energy drinks. Our Wholesale channel sales grew from $225.1 million in 2023 to $245.0 million in 2024.
We were founded as a digitally native coffee brand in 2014 and have since expanded into multiple growth channels, including Wholesale retail, merchandise sales, franchised and Company-operated retail locations, RTD coffee, and energy drinks. Our Wholesale channel sales grew from $245.0 million in 2024 to $258.0 million in 2025.
The specialty coffee and energy drink markets are intensely competitive, including with respect to product quality, innovation, service, convenience, store location, delivery service, mobile ordering, and price. We face significant and increasing competition in all these areas in each of our channels and markets.
The specialty coffee and energy drink markets are intensely competitive, including with respect to product quality, innovation, service, convenience, store location, delivery service, mobile ordering, and price. We face significant and increasing competition in all these areas in each of our channels and markets, including an increase in Veteran-owned specialty coffee roasters.
We may not be able to adequately protect our intellectual property, including trademarks, trade names, and service marks, which, in turn, could harm the value of our brand and adversely affect our business.
We may not be able to adequately protect our intellectual property, including trademarks, trade names, and service marks, which, in turn, could harm the value of our brand and adversely affect our business, financial condition and results of operations.
Our reputation and the quality of our brand are critical to our business and success in existing markets and will be critical to our success as we enter new markets. Our brand and authenticity in supporting the Veteran and military community is a core driver of our success.
Our reputation and the quality of our brand are critical to our business and success in existing markets and will be critical to our success as we enter new markets. Our brand and authenticity in supporting the military, Veteran and first-responder communities is a core driver of our success.
A decrease in customer consumption as a result of these health concerns or negative publicity could significantly reduce the demand for our products and could harm our business. 26 Table of Contents Food safety and quality concerns may negatively impact our brand, business, and profitability, and our internal operational controls and standards may not always be met.
A decrease in customer consumption as a result of these health concerns or negative publicity could significantly reduce the demand for our products and could harm our business, financial condition and results of operations. 25 Table of Contents Food safety and quality concerns may negatively impact our brand, business, and profitability, and our internal operational controls and standards may not always be met.
We may be subject to liability for placing advertisements with content that is deemed inappropriate or misleading. We are subject to a number of regulations applicable to the labeling and advertising of our products. The FDA places a number of restrictions and guidelines on food labeling.
We may be subject to liability for placing advertisements with content that is deemed inappropriate or misleading. We are subject to a number of regulations applicable to the labeling and advertising of our products, including with respect to use of the American flag. The FDA places a number of restrictions and guidelines on food labeling.
Similar incidents or reports occurring at coffee and convenience shops unrelated to us could likewise create negative publicity, which could negatively impact consumer behavior towards us. Our products may also be subject to food recalls or other regulatory warnings promulgated by the U.S. Food and Drug Administration (“FDA”), state regulatory authorities, or other regulatory bodies.
Similar incidents or reports occurring at coffee and convenience shops unrelated to us could likewise create negative publicity, which could negatively impact consumer behavior towards us. Our products may also be subject to food recalls or other regulatory warnings promulgated by the FDA, state regulatory authorities, or other regulatory bodies.
Failure to maintain or enhance the value and reputation of our brand, including our support of the Veteran community, could have a negative impact on our financial results. We believe that brand authenticity and mission alignment are critical to customer loyalty.
Failure to maintain or enhance the value and reputation of our brand, including our support of the military, Veteran and first-responder communities, could have a negative impact on our financial results. We believe that brand authenticity and mission alignment are critical to customer loyalty.
As of December 31, 2024, approximately 51% of our Outposts were operated by our franchise partners.
As of December 31, 2025, approximately 51% of our Outposts were operated by our franchise partners.
Risks Related to Our Business Our brand, including the quality of media content and active participation in the Veteran community, is core to our success, and damage to our brand or reputation and negative publicity could negatively impact our business, financial condition, and results of operations.
Risks Related to Our Business Our brand, including the quality of media content and active participation in the military, Veteran and first-responder communities, is core to our success, and damage to our brand or reputation and negative publicity could negatively impact our business, financial condition, and results of operations.
In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future.
This in turn could adversely affect our business, financial condition and results of operations. In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our business, financial condition and results of operations could be materially and adversely affected in the future.
Any one or more of the factors listed below or described elsewhere in this section could harm our business: • fluctuations in the cost and availability of real estate, labor, raw materials, equipment, shipping; • pricing pressure; • consumer preferences, including those described above; • money available to consumers for discretionary purchases, which may be affected by job losses, inflation, higher taxes, changes in federal economic policy, or other macroeconomic or political factors; • severe weather or other natural or man-made disasters affecting a large market or several closely located markets that may temporarily but significantly affect our business in such markets; • especially in our large markets, labor discord or disruption, geopolitical events, social unrest, war, terrorism, political instability, acts of public violence, boycotts, hostilities and social unrest and other health pandemics that lead to avoidance of public places or cause people to stay at home; and • adverse outcomes of litigation.
Any one or more of the factors listed below or described elsewhere in this section could harm our business: • fluctuations in the cost and availability of real estate, labor, raw materials, equipment, shipping; • pricing pressure; • consumer preferences, including those described above; • money available to consumers for discretionary purchases, which may be affected by job losses, inflation, higher taxes, changes in federal economic policy, or other macroeconomic or political factors; • severe weather or other natural or man-made disasters affecting a large market or several closely located markets that may temporarily but significantly affect our business in such markets; • especially in our large markets, labor discord or disruption, geopolitical events, social unrest, war, terrorism, political instability, acts of public violence, boycotts, hostilities and social unrest and other health pandemics that lead to avoidance of public places or cause people to stay at home; and • adverse outcomes of litigation. 20 Table of Contents Additionally, certain public entities have recently experienced extreme volatility in the market prices and trading volume of their common stock.
Our business, like many other beverage and restaurant companies, is subject to the risk of class action lawsuits and other proceedings that are costly, divert management attention, and, if successful, could result in our payment of substantial damages or settlement costs.
Our business is subject to the risk of class action lawsuits and other proceedings that are costly, divert management attention, and, if successful, could result in our payment of substantial damages or settlement costs.
Based on these assessments and estimates, we may establish reserves, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes, gains or losses may differ materially from our assessments and estimates.
These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes, gains or losses may differ materially from our assessments and estimates.
If we fail to manage our anticipated growth and change in a manner that preserves the key aspects of our corporate culture, the quality of our products and services may suffer, which could negatively affect our brand and reputation and harm our ability to attract users, employees, and organizations.
If we fail to manage future changes in our business in a manner that preserves the key aspects of our corporate culture, the quality of our products and services may suffer, which could negatively affect our brand and reputation and harm our ability to attract users, employees, and organizations.
If we fail to preserve our brand identity, including the quality of our media content and active engagement with the Veteran community, our consumer perception, brand equity, and financial results could be negatively impacted.
If we fail to preserve our brand identity, including the quality of our media content and active engagement with the military, Veteran and first-responder communities, our consumer perception, brand equity, and financial results could be negatively impacted.
We could be required to fundamentally change our business activities and practices in response to a security incident or related regulatory actions or litigation, which could have an adverse effect on our business.
We could be required to fundamentally change our business activities and practices in response to a security incident or related regulatory actions or litigation, which could have an adverse effect on our business, financial condition and results of operations.
Evolving consumer preferences and tastes, including public or medical opinions about caffeine consumption, may adversely affect our business. Our continued success depends on our ability to attract and retain customers.
Evolving consumer preferences and tastes, including public or medical opinions about caffeine consumption, may adversely affect our business, financial condition and results of operations. Our continued success depends on our ability to attract and retain customers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Management and Strategy As one of the critical elements of the Company’s strategy, the Company’s cybersecurity program is focused on the following key areas: • Governance: As discussed in more detail under the heading “Governance,” the Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board, which regularly interacts with members of senior management tasked with various risk management functions. • Collaborative Approach: The Company has implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management promptly. • Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. • Incident Response and Recovery Planning: The Company has established and maintains comprehensive incident response and recovery plans that fully address the Company’s response to a cybersecurity incident, and such plans are tested and evaluated regularly. • Education and Awareness: The Company provides regular, mandatory training for personnel regarding cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes, and practices. 44 Table of Contents The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents.
Biggest changeRisk Management and Strategy As one of the critical elements of the Company’s strategy, the Company’s cybersecurity program is focused on the following key areas: • Governance: As discussed in more detail under the heading “Governance,” the Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board, which regularly interacts with members of senior management tasked with various risk management functions. • Collaborative Approach: The Company has implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management promptly. 43 Table of Contents • Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. • Incident Response and Recovery Planning: The Company has established and maintains comprehensive incident response and recovery plans that fully address the Company’s response to a cybersecurity incident, and such plans are tested and evaluated regularly. • Education and Awareness: The Company provides regular, mandatory training for personnel regarding cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes, and practices.
These efforts include a wide range of activities, including assessments, tabletop exercises, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning. The Company also engages third parties to perform assessments on our cybersecurity measures. Governance The Board, in coordination with the Audit Committee, oversees the Company’s management of risks arising from cybersecurity threats.
The Company also engages third parties to perform assessments on our cybersecurity measures. Governance The Board, in coordination with the Audit Committee, oversees the Company’s management of risks arising from cybersecurity threats.
Added
The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including assessments, tabletop exercises, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The material properties used by the Company in connection with its roasting, manufacturing, warehousing, distribution and corporate administrative operations are as follows: Property Location Approximate Size (sq. ft.) Function Owned/Leased Salt Lake City, UT 30,295 HQ and Corporate Owned Manchester, TN 65,000 Manufacturing Owned San Antonio, TX 9,106 Corporate Leased Nashville, TN 13,203 Corporate Leased As of December 31, 2024, the Company had eighteen Company-operated stores, all of which are leased.
Biggest changeProperties The material properties used by the Company in connection with its roasting, manufacturing, warehousing, distribution and corporate administrative operations are as follows: Property Location Approximate Size (sq. ft.) Function Owned/Leased West Valley City, UT 10,200 HQ and Corporate Leased Manchester, TN 65,000 Manufacturing Owned San Antonio, TX 9,106 Corporate Leased Nashville, TN 13,203 Corporate Leased As of December 31, 2025, the Company had 17 Company-operated stores, all of which are leased.
In addition to the locations listed above, we hold inventory at various locations managed by third-party warehouses. We believe our existing facilities, both owned and leased, are in good condition and suitable for the conduct of our business.
In addition to the locations listed above, we hold inventory at various locations managed by third-party warehouses. We believe our existing facilities, both owned and leased, are in good condition and suitable for the conduct of our business. 44 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeExcept as described below, our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows. 45 Table of Contents On April 28, 2022, Tang Capital Partners, LP (“Tang Capital”) filed a lawsuit in federal district court in the Southern District of New York against the Company, Tang Capital Partners, LP v.
Biggest changeExcept as described below, our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows. On February 3, 2023, Strategy and Execution, Inc.
On June 22, 2023, John Brian Clark, JBC Structured Products LLC, and Marathon Capital LLC (collectively, “Clark”) filed a complaint against BRC Inc. and Black Rifle Coffee Company LLC: John Brian Clark, et al. v. BRC Inc., et al., Case 1:23-CV-5340 (RWL) (Southern District of New York). Clark alleges breach of contract and is seeking a declaratory judgment.
On June 22, 2023, John Brian Clark, JBC Structured Products LLC, and Marathon Capital LLC (collectively, “Clark”) filed a complaint against BRC Inc. and Black Rifle Coffee Company LLC: John Brian Clark, et al. v. BRC Inc., et al., Case 1:23-CV-5340 (RWL) (Southern District of New York). Clark alleged breach of contract and sought a declaratory judgment.
On November 13, 2024, the court denied the Company’s motion to dismiss other than for the co-manufacturer’s claim of fraudulent inducement, for which the court has granted leave to amend.
On November 13, 2024, the court denied the Company’s motion to dismiss other than for the co-manufacturer’s claim of fraudulent inducement, for which the court has granted leave to amend. The parties are currently engaged in discovery. The Company believes that it has meritorious defenses to the claims asserted against it and will defend itself in these proceedings.
On May 8, 2024, SEI filed a motion for reconsideration of the order granting the partial motion to dismiss, and on May 14, 2024, SEI filed a motion for leave to amend its complaint. These motions are currently pending. On October 3, 2024, SEI and the Company held a mediation, at which no agreement was reached.
On May 8, 2024, SEI filed a motion for reconsideration of the order granting the partial motion to dismiss, and on May 14, 2024, SEI filed a motion for leave to amend its complaint. On January 28, 2025, the parties settled all remaining claims not subject of the pending motions.
The complaint alleges that Clark suffered damages arising from the Company’s refusal to allow Clark to exercise warrants. The lawsuit seeks unspecified general and compensatory damages, attorneys’ fees, and other reasonable costs and disbursements.
The complaint alleged that Clark suffered damages arising from the Company’s refusal to allow Clark to exercise warrants.
The Company believes that it has meritorious defenses to the claims asserted against it and will defend itself in these proceedings. $2.7 million has been included in accrued liabilities related to this matter. 46 Table of Contents Item 4. Mine Safety Disclosures Not applicable. Part II
The Company has recorded accrued liabilities of $2.7 million related to this matter, which does not include interest or penalties. Item 4. Mine Safety Disclosures Not applicable. Part II
Removed
BRC Inc., Case 22-CV-3476 (RWL) (Southern District of New York). The complaint alleges that Tang Capital suffered damages arising from the Company’s refusal on two alleged occasions to permit Tang Capital to exercise warrants.
Added
In connection with this settlement, the Company paid SEI $0.4 million. On March 30, 2025, both SEI motions for reconsideration of the order granting the partial motion to dismiss and for leave to amend its complaint were denied by the court. On April 14, 2025, the Company filed a motion for attorneys' fees, which currently remains pending.
Removed
On March 8, 2023, the court granted the Company’s motion to dismiss a claim for declaratory judgment but denied the Company’s motion to dismiss Tang Capital's breach of contract claim. Each party filed respective motions for summary judgment and completed the briefing of these motions on May 31, 2024.
Added
On June 27, 2025, SEI filed an appeal in the U.S. Court of Appeals for the Fifth Circuit (the "Fifth Circuit"), alleging the district court erred in granting the Company’s motion to dismiss and denying SEI’s motion for leave to amend its complaint. The Company filed a response with the Fifth Circuit on August 27, 2025.
Removed
Tang Capital's motion for summary judgment sought $10.5 million in compensatory damages, plus prejudgment interest.
Added
The Company and SEI held a mediation on October 13, 2025, but did not reach a settlement. On October 23, 2025, the Fifth Circuit affirmed the judgment of the district court granting the Company's motion to dismiss and denying SEI's motion for leave to amend.
Removed
On November 8, 2024, the court granted in part, and denied in part, the respective motions for summary judgment, holding that the Company breached the warrant agreement by not allowing Tang Capital to exercise warrants, but determining that there were fact issues that need to be resolved at trial on the issue of Tang Capital’s alleged damages, including whether Tang could have mitigated its alleged damages.
Added
On December 24, 2025 the Company and Clark agreed to settle all claims relating to the lawsuit, a portion of which was paid in December 2025, and a portion of which will be paid by the end of the second quarter of 2026.
Removed
The case is currently set for trial in July 2025. The Company believes that it has meritorious defenses to the damage claims asserted against it and will defend itself vigorously in these proceedings and potentially on appeal; however, there can be no assurances that it will be successful in its efforts.
Removed
The Company is not able at this time to determine or predict the ultimate outcome of this lawsuit or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. On February 3, 2023, Strategy and Execution, Inc.
Removed
On January 28, 2025, the parties settled all remaining claims not subject of the pending motions.
Removed
The Company believes that it has meritorious defenses to the claims asserted against it in the pending motions and will continue to defend itself vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts. $0.4 million has been included in accrued liabilities related to this matter and this amount was paid to the counterparty in the first quarter of 2025.
Removed
The Company believes that it has meritorious defenses to the claims asserted against it and will defend itself vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts.
Removed
Currently the case is stayed through the resolution of the Tang Capital matter, but Clark has the option to end the stay at any time after the end of June 2024 or a summary judgment decision in Tang Capital, whichever comes first.
Removed
The Company is not able at this time to determine or predict the ultimate outcome of this lawsuit or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.
Removed
On May 15, 2024, Alta Partners, LLC (“Alta”) filed a lawsuit in the federal district court in the Southern District of New York against the Company: Alta Partners, LLC v. BRC Inc., Case 24-CV-03741 (AT) (RWL) (Southern District of New York).
Removed
The complaint alleges breach of contract and that Alta suffered damages arising from the Company’s refusal to permit Alta to exercise warrants between March 11 and May 4, 2022. The lawsuit seeks unspecified general and compensatory damages, attorneys’ fees, and other costs and disbursements.
Removed
On July 11, 2024, the Company filed a pre-motion with the court, posing certain arguments in its defense and requesting permission to move to dismiss.
Removed
The Company believes that it has meritorious defenses to the claims asserted against it and will defend itself in these proceedings; however, the Company is not able at this time to determine or predict the ultimate outcome of this lawsuit or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe number of record holders does not include persons who held our securities in nominee or “street name” form, w hose shares of record are held by banks, brokers, and other financial institutions.
Biggest changeThe number of record holders does not include persons who held our securities in nominee or “street name” form, w hose shares of record are held by banks, brokers, and other financial institutions. 45 Table of Contents Dividends It is the present intention of the Board to retain all earnings, if any, for use in the Company’s business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future.
Holders As of February 26, 2025, there were 37 holders of record of our Class A Common Stock, 51 holders of record of our Class B Common Stock and no holders of record of our Class C Common Stock and Preferred Stock.
Holders As of February 26, 2026, there were 31 holders of record of our Class A Common Stock, 48 holders of record of our Class B Common Stock and no holders of record of our Class C Common Stock and Preferred Stock.
Removed
In May 2022, the Company redeemed all of its outstanding warrants in accordance with a warrant agreement between Continental Stock Transfer & Trust Company and SilverBox. Following the redemption, the Company has no warrants outstanding. In connection with the redemption, the warrants ceased trading on the NYSE and were delisted.
Removed
Dividends It is the present intention of the Board to retain all earnings, if any, for use in the Company’s business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table represents the selected results of operations for BRCC for the periods indicated ( amounts in thousands ): Year Ended December 31, 2024 2023 Revenue, net $ 391,490 $ 395,623 Cost of goods sold 230,316 270,175 Gross profit 161,174 125,448 Operating expenses Marketing and advertising 35,631 30,794 Salaries, wages and benefits 62,415 71,054 General and administrative 50,827 71,613 Other operating expense, net 8,453 2,198 Total operating expenses 157,326 175,659 Operating income (loss) 3,848 (50,211) Non-operating income (expenses) Interest expense, net (11,325) (6,330) Other income, net — 10 Total non-operating expenses (11,325) (6,320) Loss before income taxes (7,477) (56,531) Income tax expense 172 185 Net loss $ (7,649) $ (56,716) 50 Table of Contents Components of Our Operating Income (Loss) Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 The following table summarizes our revenue, gross profit, gross margin, and total operating expenses (dollars in thousands) : Year Ended December 31, 2024 2023 $ Change % Change Revenue, net $ 391,490 $ 395,623 $ (4,133) (1) % Cost of goods sold 230,316 270,175 (39,859) (15) % Gross profit 161,174 125,448 35,726 28 % Gross margin (1) 41 % 32 % Total operating expenses $ 157,326 $ 175,659 $ (18,333) (10) % (1) Gross margin is calculated as gross profit as a percentage of revenue, net Revenue, net Net revenue for the year ended December 31, 2024 decreased $4.1 million, or 1%, to $391.5 million as compared to $395.6 million for the corresponding period in 2023.
Biggest changeThe following table presents the selected results of operations for BRCC for the periods indicated ( amounts in thousands ): Year Ended December 31, 2025 2024 Revenue, net $ 398,263 $ 391,490 Cost of goods sold 260,317 230,316 Gross profit 137,946 161,174 Operating expenses Marketing and advertising 39,213 35,631 Salaries, wages and benefits 56,744 62,415 General and administrative 54,736 50,827 Other operating expense, net 11,850 8,453 Total operating expenses 162,543 157,326 Operating income (loss) (24,597) 3,848 Non-operating income (expenses) Interest expense, net (7,506) (11,325) Total non-operating expenses (7,506) (11,325) Loss before income taxes (32,103) (7,477) Income tax expense 132 172 Net loss $ (32,235) $ (7,649) Components of Our Operating Income (Loss) Comparison of the year ended December 31, 2025 to the year ended December 31, 2024 The following table summarizes our revenue, gross profit, gross margin, and total operating expenses (dollars in thousands) : Year Ended December 31, 2025 2024 $ Change % Change Revenue, net $ 398,263 $ 391,490 $ 6,773 2 % Cost of goods sold 260,317 230,316 30,001 13 % Gross profit 137,946 161,174 (23,228) (14) % Gross margin (1) 35 % 41 % Total operating expenses $ 162,543 $ 157,326 $ 5,217 3 % (1) Gross margin is calculated as gross profit as a percentage of revenue, net Revenue, net Net revenue for the year ended December 31, 2025 increased $6.8 million, or 2%, to $398.3 million as compared to $391.5 million for the corresponding period in 2024. 49 Table of Contents The following table summarizes net sales by channel for the periods indicated ( dollars in thousands): Year Ended December 31, 2025 2024 $ Change % Change Wholesale $ 258,005 $ 245,040 $ 12,965 5 % DTC 117,638 123,779 (6,141) (5) % Outpost 22,620 22,671 (51) — % Total net sales $ 398,263 $ 391,490 $ 6,773 2 % Net revenue for our Wholesale channel for the year ended December 31, 2025 increased $13.0 million, or 5%, to $258.0 million compared to $245.0 million for the corresponding period in 2024.
The following discussion and analysis should be read in conjunction with the audited annual consolidated financial statements and related notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data in this Annual Report.
The following discussion and analysis should be read in conjunction with the audited annual consolidated financial statements and related notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data of this Annual Report.
Operating expenses also consist of salaries, wages, and benefits of payroll and payroll related expenses for labor not directly related to producing our products. Payroll expenses include both fixed and variable compensation. Variable compensation includes bonuses and equity-based compensation. General and administration costs include other professional fees and services, and general corporate infrastructure expenses, including utilities and depreciation and amortization.
Operating expenses also consist of salaries, wages, and benefits, and payroll related expenses for labor not directly related to producing our products. Payroll expenses include both fixed and variable compensation. Variable compensation includes bonuses and equity-based compensation. General and administrative costs include other professional fees and services, and general corporate infrastructure expenses, including utilities and depreciation and amortization.
In addition, we will leverage our social media presence and employ targeted digital advertising to expand the reach of our brand. Our Ability to Grow Our Customer Base in Our Outposts and Wholesale Channels We continue to expand our customer base through our Wholesale channel, with our products now available in a growing number of physical retail locations.
In addition, we will leverage our social media presence and employ targeted digital advertising to expand the reach of our brand. Our Ability to Grow Our Customer Base in Our Wholesale Channel We continue to expand our customer base through our Wholesale channel, with our products now available in a growing number of physical retail locations.
Liquidity and Capital Resources Liquidity Overview Our principal use of cash is to support the growth of our business, including increasing working capital requirements related to inventories, accounts receivable, and general and administrative expenses. Furthermore, we use cash to fund our debt service commitments, capital equipment acquisitions, and other growth-related needs.
Liquidity and Capital Resources Liquidity Overview Our principal use of cash is to support the growth of our business, including increasing working capital requirements related to inventories, accounts receivable, and general and administrative expenses. We also use cash to fund our debt service commitments, capital equipment acquisitions, and other growth-related needs.
Critical accounting estimates are accounting estimates where the nature of the estimates are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and the impact of the estimates on financial condition or operating performance is material.
Critical accounting estimates are accounting estimates where the nature of the estimates is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and where the impact of the estimates on financial condition or operating performance is material.
We remain focused on measuring and optimizing marketing performance to ensure that our advertising spend is both effective and efficient, while managing customer acquisition costs and maximizing returns on marketing investments. Our Ability to Drive Repeat Usage of Our Products We gain substantial economic value from repeat users of our products who consistently re-order our products.
We remain focused on measuring and optimizing marketing performance to ensure that our advertising spend is efficient, while managing customer acquisition costs and maximizing returns on marketing investments. Our Ability to Drive Repeat Purchases of Our Products We gain substantial economic value from repeat users of our products who consistently re-order our products.
For the comparisons of the years ended December 31, 2023 and 2022, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 6, 2024.
For the comparisons of the years ended December 31, 2024 and 2023, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 3, 2025.
The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua, and since 2020, we have also sourced green coffee beans from over ten countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts.
The majority of our green coffee beans come from Colombia, Brazil, and Nicaragua and since 2020, we have also sourced green coffee beans from more than ten additional countries in Latin America, Africa, and Asia to diversify our supply chain and offer our customers specialty and limited-time-only roasts.
The net assets of SilverBox are stated at historical cost, with no goodwill or other intangible assets recorded. This accounting treatment was determined by the individual controlling Authentic Brands prior to the Business Combination, who also controls the combined company post Business Combination.
The net assets of SilverBox are stated at historical cost, with no goodwill or other intangible assets recorded. This accounting treatment was determined by the controlling owner of Authentic Brands prior to the Business Combination, who also controls the combined company following the Business Combination.
As a result, the consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.
Accordingly, the consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.
We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
We have elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
JOBS Act The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies for up to five years or until we are no longer an emerging growth company.
JOBS Act The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies for up to five years or until such companies are no longer emerging growth companies.
Wholesale customers include large national retailers, regional retailers, distributors, and dealers, reflecting our increases in market presence and distribution reach. 48 Table of Contents Our Ability to Acquire and Retain Customers at a Reasonable Cost We believe that consistently acquiring and retaining customers at a reasonable cost will be a key driver of our future performance.
Wholesale customers include large national retailers, regional retailers, distributors, and dealers, reflecting increased market presence and distribution reach. Our Ability to Acquire and Retain Customers at a Reasonable Cost We believe that consistently acquiring and retaining customers at a reasonable cost will be a key driver of our future performance.
Trends Certain trends affecting our business within the respective sales channels are as follows: • Wholesale channel revenue increased as we added new customers and continued to expand our presence in the FDM market.
Trends Certain trends affecting our business within the respective sales channels are as follows: • Wholesale channel revenue continues to increase as we add new customers and expand our presence in the FDM market.
Income tax expense was $0.2 million for each of the years ended December 31, 2024 and 2023, representing effective tax rates of (2.3)% and 0.3%, respectively.
Income tax expense was $0.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively, representing effective tax rates of (0.4)% and (2.3)%, respectively.
Income Tax Provision The following table summarizes income tax provisions for the periods indicated ( dollars in thousands ): Year Ended December 31, 2024 2023 Income tax expense $ 172 $ 185 Effective income tax rate (2.3) % 0.3 % For further detail of income tax matters, see Note 16, Income Taxes , within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Income Tax Provision The following table summarizes income tax provisions for the periods indicated ( dollars in thousands ): Year Ended December 31, 2025 2024 Income tax expense $ 132 $ 172 Effective income tax rate (0.4) % (2.3) % For further details regarding income tax matters, see Note 13, Income Taxes , within the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Financing Activities Net cash used in financing activities was $10.7 million for the year ended December 31, 2024, compared to net cash provided by financing activities of $21.4 million for the corresponding period in 2023.
Financing Activities Net cash provided by financing activities was $5.9 million for the year ended December 31, 2025, compared to net cash used in financing activities of $10.7 million for the corresponding period in 2024.
For the year ended December 31, 2024, interest expense also included the extinguishment of debt costs. 49 Table of Contents Income tax provision The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse.
Income tax provision The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse.
We continue to build brand awareness and reach new consumers by investing in existing and new channels and markets. Our expertise in digital creative and engagement provides a distinct advantage in attracting, converting, and retaining our consumers.
We continue to build brand awareness and reach new consumers by investing in existing and new channels and markets. Our capabilities in digital marketing and consumer engagement provide a competitive advantage in attracting, converting, and retaining our consumers.
Our pace of growth will be partially affected by the cadence and magnitude of new product launches over time. Moving forward, we believe that it is important to our business that we continue innovating with new products and flavors.
Our pace of growth will be partially affected by the timing and scale of new product launches. We believe that it is important to our business to continue to innovate with new products and flavors.
Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. See Note 16, Income Taxes for additional information.
Derecognition of a tax position that was previously recognized occurs when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained.
The pace of our growth rate will be affected by the repeat usage dynamics of existing and newly acquired customers. Our Ability to Expand Our Product Line Our goal is to continue to expand our product line over time to increase our growth opportunity and reduce product-specific risks through diversification into multiple products each designed around daily use.
The pace of our growth rate may be affected by the repeat purchase behavior among existing and newly acquired customers. Our Ability to Expand Our Product Line Our goal is to continue to expand our product line over time to increase our growth opportunities and reduce product-specific risks through diversification into multiple products intended for regular consumer use.
Our ability to draw from the credit facilities is subject to a borrowing base and other covenants. There are no defaults or events of default at this time.
Our ability to draw from the credit facilities is subject to a borrowing base and other covenants. As of December 31, 2025, we are in compliance with our covenants under the credit facilities and there are no defaults or events of default.
Results of Operations This discussion and analysis pertains to comparisons of material changes in the consolidated financial statements for the years ended December 31, 2024 and 2023.
See Note 13, Income Taxes for additional information. 48 Table of Contents Results of Operations This discussion and analysis pertains to comparisons of material changes in the consolidated financial statements for the years ended December 31, 2025 and 2024.
Interest expense Interest expense consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs.
Interest expense Interest expense consists of interest on our borrowing arrangements, the amortization of debt discounts, and deferred financing costs. For the year ended December 31, 2024, interest expense also included debt extinguishment costs.
In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause BRCC’s actual results to differ materially from management’s expectations.
In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause BRCC’s actual results to differ materially from management’s expectations. Factors which could cause such differences are discussed herein and set forth in Part I, Item 1A, Risk Factors in this Annual Report.
Components of Our Non-Operating Income (Expenses) Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 The following table summarizes non-operating expenses for the periods indicated (dollars in thousands) : Year Ended December 31, 2024 2023 $ Change % Change Interest expense, net $ (11,325) $ (6,330) $ 4,995 79 % Other income, net — 10 10 (100) % Total non-operating expenses $ (11,325) $ (6,320) $ 5,005 79 % 52 Table of Contents Interest expense for the year ended December 31, 2024 increased $5.0 million, or 79%, to $11.3 million as compared to $6.3 million for the corresponding period in 2023.
Components of Our Non-Operating Income (Expenses) Comparison of the year ended December 31, 2025 to the year ended December 31, 2024 The following table summarizes non-operating expenses for the periods indicated (dollars in thousands) : Year Ended December 31, 2025 2024 $ Change % Change Interest expense, net $ (7,506) $ (11,325) $ (3,819) (34) % Total non-operating expenses $ (7,506) $ (11,325) $ (3,819) (34) % Interest expense for the year ended December 31, 2025 decreased $3.8 million, or 34%, to $7.5 million compared to $11.3 million for the corresponding period in 2024.
Quality control is also a critically important part of our manufacturing and supply chain operations. 100% of our coffee is roasted in the United States. Our licensed, Coffee Quality Institute-certified grader and former Green Beret, leads cupping, grading, scoring, and sourcing of our coffees. We also must effectively manage our co-manufacturers and suppliers.
Quality control is a critical component of our manufacturing and supply chain operations. All of our bagged coffee is roasted in the United States. Our licensed, Coffee Quality Institute-certified grader and former Green Beret, oversees cupping, grading, scoring, and sourcing of our coffees.
Critical Accounting Estimates Critical accounting estimates are those that management believes are the most important portrayal of our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
We currently expect to fund our material capital requirements with borrowings from our credit facilities, but we may also seek additional debt or equity financing. 52 Table of Contents Critical Accounting Estimates Critical accounting estimates are those that management believes are the most important to the portrayal of our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Operating expenses Total operating expenses for the year ended December 31, 2024 decreased $18.3 million, or 10%, to $157.3 million as compared to $175.7 million for the corresponding period in 2023.
Operating expenses Total operating expenses for the year ended December 31, 2025 increased $5.2 million, or 3%, to $162.5 million compared to $157.3 million for the corresponding period in 2024.
Measurement – determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.
Recognition – occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step 2. Measurement – determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.
While we believe that our estimates, assumptions and judgments are reasonable, they are based on information available when the estimate was made. Our significant accounting estimates are discussed in more detail in Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of Part II of this 10-K.
Our significant accounting estimates are discussed in more detail in Note 2, Summary of Significant Accounting Policies to our consolidated financial statements included in Item 8 of Part II of this 10-K.
Consumer appreciation of our brands is primarily reflected in the increase of our sales across our three channels over the last few years. We expect to continue to refine and develop our brand strategy utilizing reach-based formats such as national television, streaming advertising, and other select avenues.
We believe we have developed an effective marketing strategy that enhances brand awareness and drives consumer engagement. Consumer appreciation of our brand is primarily reflected in our sales across our three channels. We intend to continue to refine and develop our brand strategy utilizing reach-based formats such as streaming advertising and other select marketing channels.
Components of Our Results of Operations Revenue, net We sell our products both directly and indirectly to our customers through a broad set of physical and online platforms. Our revenue, net reflects the impact of product returns as well as discounts and fees for certain sales programs, trade spend, promotions, and loyalty rewards.
Our revenue, net reflects the impact of product returns as well as discounts and fees for certain sales programs, trade spend, promotions, and loyalty rewards.
A valuation allowance is recognized if under applicable accounting standards the Company determines it is more likely than not that its deferred tax assets would not be realized. In accordance with ASC 740, Income Taxes, the Company evaluates the technical merits of its income tax positions and establishes unrecognized income tax benefits for uncertain tax positions when deemed appropriate.
A valuation allowance is recognized if under applicable accounting standards the Company determines it is more likely than not that its deferred tax assets would not be realized.
Our primary sources of cash are (1) cash on hand, (2) cash provided by operating activities, and (3) net borrowings from our credit facilities.
Our primary sources of cash are (1) cash on hand, (2) cash provided by operating activities, and (3) net borrowings from our credit facilities. As of December 31, 2025, our cash and cash equivalents were $4.3 million, our working capital was $24.2 million, and under our credit facilities, we had $55.4 million of available borrowings.
In addition, the tax benefit for the year ended December 31, 2024 reflects the impact of our assessment that we will not be able to record the benefit of certain current year deferred tax assets for which a valuation allowance is expected.
The effective tax rate for the year ended December 31, 2025 reflects pretax losses and our assessment that certain current year deferred tax assets are not expected to be realized, resulting in the recognition of a valuation allowance.
The following table summarizes operating expenses for the periods indicated ( dollars in thousands ): Year Ended December 31, 2024 2023 $ Change % Change Marketing and advertising $ 35,631 $ 30,794 $ 4,837 16 % Salaries, wages and benefits 62,415 71,054 (8,639) (12) % General and administrative 50,827 71,613 (20,786) (29) % Other operating expense, net 8,453 2,198 6,255 285 % Total operating expenses $ 157,326 $ 175,659 $ (18,333) (10) % Marketing and advertising expenses for the year ended December 31, 2024 increased $4.8 million, or 16%, to $35.6 million as compared to $30.8 million for the corresponding period in 2023.
The following table summarizes operating expenses for the periods indicated ( dollars in thousands ): Year Ended December 31, 2025 2024 $ Change % Change Marketing and advertising $ 39,213 $ 35,631 $ 3,582 10 % Salaries, wages and benefits 56,744 62,415 (5,671) (9) % General and administrative 54,736 50,827 3,909 8 % Other operating expense, net 11,850 8,453 3,397 40 % Total operating expenses $ 162,543 $ 157,326 $ 5,217 3 % Marketing and advertising expenses for the year ended December 31, 2025 increased $3.6 million, or 10%, to $39.2 million compared to $35.6 million for the corresponding period in 2024.
See Note 8, Long-Term Debt , to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding the Credit Agreements. 53 Table of Contents Cash Flows from Operating, Investing and Financing Activities Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 The following table summarizes our cash flows for the periods indicated (dollars in thousands) : Year Ended December 31, 2024 2023 $ Change % Change Cash flows provided by (used in): Operating activities $ 11,308 $ (24,967) $ 36,275 145 % Investing activities $ (7,713) $ (21,508) $ (13,795) (64) % Financing activities $ (10,698) $ 21,398 $ (32,096) (150) % Operating Activities Net cash provided by operating activities was $11.3 million for the year ended December 31, 2024, compared to net cash used in operating activities of $25.0 million for the corresponding period in 2023.
Cash Flows from Operating, Investing and Financing Activities Comparison of the year ended December 31, 2025 to the year ended December 31, 2024 The following table summarizes our cash flows for the periods indicated (dollars in thousands) : Year Ended December 31, 2025 2024 $ Change % Change Cash flows provided by (used in): Operating activities $ (9,810) $ 11,308 $ (21,118) (187) % Investing activities $ 1,418 $ (7,713) $ (9,131) (118) % Financing activities $ 5,912 $ (10,698) $ 16,610 (155) % Operating Activities Net cash used in operating activities was $9.8 million for the year ended December 31, 2025, compared to net cash provided by operating activities of $11.3 million for the corresponding period in 2024.
The minimum purchase amounts are based on quantity and in the aggregate will be approximately $26.1 million for 2025, $30.0 million for 2026 and $32.4 million for 2027. See Note 1 8 , Commitments and Contingencies to the consolidated financial statements included in Item 8 of Part II of this Annual Report for information regarding such manufacturing and purchase agreements.
Commitments The Company has entered into several manufacturing and purchase agreements to purchase coffee products from third-party suppliers. The minimum purchase amounts are based on quantity and in the aggregate will be approximately $30.0 million for 2025, $32.4 million for 2026 and $15.1 million for 2027.
See Note 9 , Leases to the consolidated financial statements included in Item 8 of Part II of this Annual Report for additional information. 54 Table of Contents Capital Expenditures Future capital requirements will vary materially from period to period and will depend on factors such as adding additional roasting capacity, expansion of our corporate and information technology infrastructure relating to growth initiatives and expansion and growth by opening additional Company-operated Outposts.
Capital Expenditures Future capital requirements will vary materially from period to period and will depend on factors such as the addition of roasting capacity and the expansion of our corporate and information technology infrastructure to support changes in the Company.
This decrease was as a result of our 2023 Restructuring Plan whereby, we reduced compensation costs through headcount reductions in 2023 for which we realized the full benefit in 2024. General and administrative expenses for the year ended December 31, 2024 decreased $20.8 million, or 29%, to $50.8 million as compared to $71.6 million for the corresponding period in 2023.
This decrease was primarily driven by reduced compensation costs through headcount reductions, partially offset by an increase in severance costs associated with our Operational Improvement Plan. 50 Table of Contents General and administrative expenses for the year ended December 31, 2025 increased $3.9 million, or 8%, to $54.7 million compared to $50.8 million for the corresponding period in 2024.
Investing Activities Net cash used in investing activities was $7.7 million for the year ended December 31, 2024, compared to net cash used in investing activities of $21.5 million for the corresponding period in 2023. The $13.8 million decrease in net cash used was primarily due to reduced capital expenditure projects for our Outpost locations, roasting facilities and information technology.
Investing Activities Net cash provided by investing activities was $1.4 million for the year ended December 31, 2025, compared to net cash used in investing activities of $7.7 million for the corresponding period in 2024.
Founded in 2014 by U.S. Army Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Hafer personally roasted, packaged, and shipped coffee directly to consumers.
Army Veteran Evan Hafer, Black Rifle Coffee began with a one-pound coffee roaster in a garage, where Mr. Hafer personally roasted, packaged, and shipped coffee directly to consumers. Today, we have grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and others who share our values.
Net revenue for our DTC channel for the year ended December 31, 2024 decreased $19.5 million, or 14%, to $123.8 million as compared to $143.2 million for the corresponding period in 2023.
This increase was partially offset by a $19.0 million decrease in revenue recognized in connection with barter transactions, whereby finished goods inventory was exchanged for prepaid advertising credits. Net revenue for our DTC channel for the year ended December 31, 2025 decreased $6.1 million, or 5%, to $117.6 million compared to $123.8 million for the corresponding period in 2024.
Other operating expense, net for the year ended December 31, 2024 increased $6.3 million, or 285%, to $8.5 million as compared to $2.2 million for the corresponding period in 2023. This increase was related to the impairment loss recognized in the fourth quarter of 2024 exceeding the impairment loss recognized in 2023.
This increase was primarily attributable to accrued costs associated with the termination of a software contract that will be transitioned to a different software solution in 2026. Other operating expense, net for the year ended December 31, 2025 increased $3.4 million, or 40%, to $11.9 million compared to $8.5 million for the corresponding period in 2024.
The change in policy around the expiration of loyalty rewards point increased our gross margin percentage by 1.0% for the year ended December 31, 2024. Net revenue for our Outpost channel for the year ended December 31, 2024 decreased $4.7 million, or 17%, to $22.7 million as compared to $27.3 million for the corresponding period in 2023.
Net revenue for our Outpost channel for the year ended December 31, 2025 remained relatively flat compared to the corresponding period in 2024. Cost of goods sold Cost of goods sold for the year ended December 31, 2025 increased $30.0 million, or 13%, to $260.3 million compared to $230.3 million for the corresponding period in 2024.
Liabilities relating to operating leases that have commenced as of December 31, 2024 have been reported on the balance sheet as operating lease liabilities. Payments on leases are expected to be approximately $3.9 million in the next twelve months, and approximately $37.3 million beyond twelve months through 2043.
Payments on leases are expected to be approximately $3.7 million in the next twelve months, and approximately $31.3 million beyond twelve months through 2043. See Note 9, Leases to the consolidated financial statements included in Item 8 of Part II of this Annual Report for additional information.
Factors which could cause such differences are discussed herein and set forth in Part I, Item 1A, Risk Factors in this Annual Report. 47 Table of Contents Overview Black Rifle Coffee Company is a Veteran-founded and led premium coffee, energy drink, and media company operating through one reportable segment that comprises three primary channels: Wholesale, DTC, and Outposts.
Overview Black Rifle Coffee Company is a Veteran-founded and led premium coffee, and energy drink company operating through one reportable segment composed of three primary channels: Wholesale, DTC, and Outposts. We leverage in-house media and content creation to support brand awareness, customer engagement, and community building. Founded in 2014 by U.S.
This increase was due to our expansion of partnerships, including our engagement with the UFC, higher advertising spend, incremental shopper marketing, and an increase in trade promotions. Salaries, wages and benefits expenses for the year ended December 31, 2024 decreased $8.6 million, or 12%, to $62.4 million as compared to $71.1 million for the corresponding period in 2023.
Salaries, wages and benefits expenses for the year ended December 31, 2025 decreased $5.7 million, or 9%, to $56.7 million compared to $62.4 million for the corresponding period in 2024.
Gross margin increased to 41% for the year ended December 31, 2024 as compared to 32% for the corresponding period in 2023. The increase in gross margin was a result of product mix shift driven by an increase in the higher margin FDM market, productivity improvements, and lower warehousing costs.
Gross margin decreased to 35% for the year ended December 31, 2025 from 41% for the corresponding period in 2024. The decrease in gross margin was driven by higher inflationary costs, primarily related to coffee bean prices, tariffs, and shipping costs.
This decrease was partially offset by an increase of $6.5 million as a result of the decrease in the accrual for loyalty rewards points following a change in policy on expiration of points in the first quarter of 2024.
The decrease was primarily driven by the impact of a $6.5 million decrease in the accrual for loyalty rewards points in 2024 following a change in the policy related to expiration of loyalty rewards points. Our DTC channel continues to stabilize as consumer purchasing behavior increasingly shifts toward third-party digital retail marketplaces rather than direct-to-consumer platforms.
The $32.1 million decrease in net cash provided was primarily due to an increase in repayments of long-term debt of $93.3 million and payment of $1.0 million of debt extinguishment costs, offset by proceeds from issuance of long-term debt of $58.7 million, net of $3.6 million of debt issuance costs. 2023 Restructuring Plan During fiscal year 2023, management implemented a plan to reduce costs and improve efficiency of certain company-wide functions.
The $16.6 million increase in net cash provided by financing activities was primarily due to $37.3 million of net proceeds received from the public offering in the third quarter of 2025 and $1.0 million of net proceeds from shares issued in connection with a legal settlement, partially offset by a net decrease of $31.6 million on long-term debt, primarily due to repayments of our ABL facility.
We expect accelerated growth in future years as we resume investment in this part of the business. Key Factors Affecting Our Performance Our Ability to Increase Brand Awareness Maintaining and growing brand awareness and loyalty is critical to our success. We believe we have developed an efficient marketing strategy that enhances brand awareness and drives consumer engagement.
We estimate that the costs savings as a result of this plan will exceed $8.9 million on an annualized run rate basis. As of December 31, 2025, we have realized approximately $5.3 million of these savings. Key Factors Affecting Our Performance Our Ability to Increase Brand Awareness Maintaining and growing brand awareness and loyalty is critical to our success.
In addition, we have limited our promotional offerings to focus on profitability. • Outpost channel revenue decreased due to lower transaction volumes at existing Outpost retail locations. In 2025, we anticipate limited growth in this channel as we reallocate investments to other channels while we work to improve profitability through operational and strategic changes, which may include closing underperforming Outposts.
In 2026, we expect limited growth in this channel as we reallocate investments to other channels while seeking to improve profitability through operational and strategic changes, which may include the closure of underperforming Outposts. 46 Table of Contents Recent Developments Operational Improvement Plan During the second quarter of 2025, management implemented the Operational Improvement Plan to reduce costs and improve the efficiency of certain company-wide functions.
The Company evaluates and accounts for uncertain tax positions using a two-step approach: Step 1. Recognition – occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step 2.
In accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, the Company evaluates the technical merits of its income tax positions and establishes unrecognized income tax benefits for uncertain tax positions when deemed appropriate. The Company evaluates and accounts for uncertain tax positions using a two-step approach: Step 1.
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Today, the company has grown into a widely recognized and nationally distributed brand steadfast in its commitment to supporting active-duty military, Veterans, first responders, and all who love America.
Added
We expect continued revenue growth in this channel as we invest to increase brand awareness, and in customer acquisition, new product launches, including our Black Rifle Energy product line, and expanded distribution in the FDM market. • DTC channel revenue decline has moderated as we continue to optimize customer acquisition, enhance retention, and provide our customers with a personalized and engaging shopping experience through targeted content and tailored product offerings on our website.
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We expect further revenue growth in this channel as we invest in customer acquisition, new product launches, and distribution expansion in the FDM market. • DTC channel revenue growth declined due to both a channel level decline in the DTC category and our strategic decision to redirect investments into higher-growth areas of the business amid elevated DTC customer acquisition costs.
Added
Additionally, we are increasing our investment in major third-party ecommerce marketplaces in response to changing consumer purchasing behavior. • Outpost channel revenue is stabilizing as we focus on improving transaction volumes and average order values through customer retention programs and tailored product offerings.
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The following table summarizes net sales by channel for the periods indicated ( dollars in thousands): Year Ended December 31, 2024 2023 $ Change % Change Wholesale $ 245,040 $ 225,059 $ 19,981 9 % DTC 123,779 143,232 (19,453) (14) % Outpost 22,671 27,332 (4,661) (17) % Total net sales $ 391,490 $ 395,623 $ (4,133) (1) % Net revenue for our Wholesale channel for the year ended December 31, 2024 increased $20.0 million, or 9%, to $245.0 million as compared to $225.1 million for the corresponding period in 2023.
Added
This plan was extended in the third and fourth quarters of 2025 as a result of the relocation of our corporate headquarters and a change in our third-party logistics provider. The cost of this plan was approximately $5.6 million consisting of severance and transition costs, substantially all of which were incurred as of December 31, 2025.
Removed
The Wholesale channel performance was primarily driven by continued growth of packaged coffee in the FDM market and the launch of Black Rifle Energy. These increases were partially offset by a $5.0 million decrease in revenue recognized related to a barter transaction whereby we exchanged finished goods inventory for prepaid advertising credits.
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We also must effectively manage our co-manufacturers and suppliers. 47 Table of Contents Components of Our Results of Operations Revenue, net We sell our products both directly and indirectly to our customers through a broad set of physical and online platforms.
Removed
The prepaid advertising credits are issued by a counterparty that specializes in barter transactions. The barter transactions serve as a sales channel primarily used for selling inventory that is closer to its expiration date compared to inventory sold through non-barter transactions.
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The increase was primarily driven by expanded packaged coffee distribution and SKU expansion at FDM retailers, as well as contributions from Black Rifle Energy, which was launched in the fourth quarter of 2024.
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The decline was primarily driven by lower customer acquisition due to declines in the overall DTC market, a strategic reallocation of advertising spend to higher return areas, and an increase in points of distribution in the Wholesale channel, which expanded brick and mortar availability for Black Rifle Coffee consumers.
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The decline also reflected the impact of lower net revenue resulting from the decrease in the accrual for loyalty reward points in 2024. In addition, we increased investments in trade and promotions, which were partially offset by pricing actions, productivity improvements, and favorable mix.
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The decline was primarily driven by lower transaction volumes and reduced foot traffic in 2024 compared to the prior year. 51 Table of Contents Cost of goods sold Cost of goods sold for the year ended December 31, 2024 decreased $39.9 million, or 15%, to $230.3 million as compared to $270.2 million over the corresponding period in 2023.
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This increase was primarily driven by the expansion of partnerships, increased investment in consumer research and data, incremental shopper marketing, higher marketing spend to support the launch of Black Rifle Energy, and expanded performance-based initiatives.
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This decrease was as a result of our 2023 Restructuring Plan which reduced our corporate infrastructure and support that were inefficient or duplicative, including professional services, information technology, and office space.
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The increase was primarily related to a $6.2 million increase in legal contingencies, net of insurance recoveries, partially offset by a decrease in termination costs for our retail outpost locations in 2025. For further discussion of legal contingencies see Note 1 5 , Commitments and Contingencies , of our consolidated financial statements.
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The increase was primarily due to an increase in average debt balances and higher interest rates.
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The decrease was primarily driven by a lower average outstanding balance of the ABL Facility during the latter half of 2025.
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Fiscal year 2024 utilized a $75.0 million senior credit facility and a $50.0 million term loan with rates at the term Secured Overnight Financing Rate (“SOFR”) plus 2.60% to 3.10%, based on average excess availability of the borrowing base and term SOFR plus 8.50%, respectively. This agreement was entered in the third quarter 2023.
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On July 18, 2025, we closed the Offering and issued 28,000,000 shares of Class A Common Stock and an additional 4,200,000 shares of Class A Common Stock as a result of the full exercise of the underwriter's option, for total net proceeds of $37.3 million. 51 Table of Contents See Note 8, Long-Term Debt , to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding the Credit Agreements.
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In the first half of fiscal year 2023, the previous senior credit facility held a rate of Bloomberg Short-Term Bank Yield (“BSBY”) plus 2.00% to 2.25%, based on average excess availability of the borrowing base. Other expense, net consisted of miscellaneous income (expense) items such as bank fees and credit card rebates in 2023.
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The $21.1 million change in net cash from operating activities was primarily driven by a net loss of $32.2 million in 2025 compared to a net loss of $7.6 million in 2024, as well as changes in working capital, including inventory and accounts payable.
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As of December 31, 2024, our cash and cash equivalents were $6.8 million, our working capital was $20.3 million, and under our credit facilities, we had $25.5 million of available borrowings, after the consideration of the $5.0 million reduction required before the Availability Block Release Date, the date on which we have maintained a fixed charge coverage ratio of not less than 1.10 to 1.00 based on a trailing four fiscal quarter calculation as of December 31, 2024, and no defaults or events of default are then continuing.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, we had $40.0 million outstanding on our Term Loan Facility and $28.9 million outstanding on our ABL Facility with available borrowings of $25.5 million. The carrying value of the variable interest rate debt approximates its fair value as the borrowings are based on market interest rates.
Biggest changeThe carrying value of the variable interest rate debt approximates its fair value as the borrowings are based on market interest rates. A hypothetical increase of interest rates of 5% on our outstanding variable rate borrowings would result in additional interest expense annually of approximately $1.9 million. 53 Table of Contents
Borrowings under our ABL Facility bear interest at a rate per annum of either (i) the Base Rate (as defined below) plus a margin ranging from 0.50% to 1.50% or (ii) term SOFR plus a margin ranging from 1.50% to 2.50%.
Borrowings under our ABL Facility bear interest at a rate per annum of either (i) the Alternate Base Rate (as defined in the ABL Credit Agreement) plus a margin ranging from 0.50% to 1.50% or (ii) Term SOFR (as defined in the ABL Credit Agreement) plus a margin ranging from 1.50% to 2.50%.
Interest Rate Risk Our Term Loan Facility bears interest at a rate per annum equal to either (i) a reference rate plus a margin ranging from 5.00% to 5.50% based on a total net leverage ratio threshold or (ii) term SOFR plus a margin ranging from 6.00% to 6.50% based on a total net leverage ratio threshold.
Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk Our Term Loan Facility bears interest at a rate per annum equal to either (i) a Reference Rate (as defined in the Term Loan Financing Agreement) plus a margin ranging from 5.00% to 5.50% based on a total net leverage ratio threshold or (ii) term SOFR (as defined in the Term Loan Financing Agreement) plus a margin ranging from 6.00% to 6.50% based on a total net leverage ratio threshold.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk Commodity Risks Our profitability is dependent on, among other things, our ability to anticipate and react to changes in costs of key operating resources. Commodity price risk is our primary market risk, which is affected by purchases of coffee beans, dairy products, aluminum cans, and other materials and commodities.
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We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities. As of December 31, 2025, we had $36.7 million outstanding on our Term Loan Facility and $2.0 million outstanding on our ABL Facility with available borrowings of $55.4 million.
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We purchase and roast quality coffee beans that can be subject to significant volatility. Increases in the “C” coffee commodity price increase the price of high-quality coffee. We generally enter into fixed price purchase commitments for the green coffee we roast.
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The supply and price of coffee we purchase can also be affected by multiple factors in the producing countries, such as weather (including the potential effects of climate change), natural disasters, crop disease, inventory levels, and political and economic conditions, including trade policy.
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Because of the significance of coffee beans to our operations, combined with our ability to only partially mitigate future price risk through purchasing practices, increases in the cost of high-quality coffee beans could have a material adverse impact on our profitability.
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"Base Rate" means, for any day, the base commercial lending rate of PNC as publicly announced to be in effect from time to time. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities.
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A hypothetical increase of interest rates of 5% on our outstanding variable rate borrowings would result in additional interest expense annually of approximately $3.4 million. 56 Table of Contents Inflation Inflationary factors such as increases in the cost of our products, overhead costs, and parcel freight costs have had an impact on our operating results.
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While we have begun to partially offset inflation and other changes in costs of essential operating resources by slightly increasing prices, along with more efficient purchasing practices and productivity improvements, there can be no assurance that we will be able to continue to do so in the future. From time to time, competitive conditions could limit our pricing flexibility.
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There can be no assurance that future cost increases can be offset by increased prices or that increased prices will be fully absorbed by our customers without any resulting change to their purchasing patterns. In addition, there can be no assurance that we will generate overall revenue growth in an amount sufficient to offset inflationary or other cost pressures.
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The cost of constructing our Outposts is subject to inflation, which could increase the costs of labor and materials.
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An increasing rate of inflation in the future may have a material adverse effect on our ability to maintain current levels of gross profit and operating expenses, if the selling prices of our products do not increase with these increased costs. 57 Table of Contents

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