# EDGAR Filing Document

**Accession Number:** 0001701758
**File Stem:** 0001628280-26-022929
**Filing Date:** 2026-4
**Character Count:** 433541
**Document Hash:** df2cd4928ae0cfb45bf7b01a39a4fec5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-26-022929.hdr.sgml**: 20260402

**ACCESSION NUMBER**: 0001628280-26-022929

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 101

**CONFORMED PERIOD OF REPORT**: 20260201

**FILED AS OF DATE**: 20260402

**DATE AS OF CHANGE**: 20260402

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Lovesac Co
- **CENTRAL INDEX KEY:** 0001701758
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-FURNITURE STORES [5712]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 320514958
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0204

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38555
- **FILM NUMBER:** 26830635

**BUSINESS ADDRESS:**
- **STREET 1:** 421 ATLANTIC STREET, SUITE 200
- **CITY:** STAMFORD
- **STATE:** CT
- **BUSINESS PHONE:** 203-817-2279

**MAIL ADDRESS:**
- **STREET 1:** 421 ATLANTIC STREET, SUITE 200
- **CITY:** STAMFORD
- **STATE:** CT

?xml version='1.0' encoding='ASCII'? love-20260201

<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

⌧ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the fiscal year ended February 1, 2026** 

or

□ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

For the transition period from ___________ to ___________

**Commission File Number: 001-38555**

**THE LOVESAC COMPANY**

(Exact Name of Registrant as Specified in Its Charter)

---

| | |
|:---|:---|
| **Delaware** | **32-0514958** |
| State or Other Jurisdiction of<br>Incorporation or Organization | I.R.S. Employer Identification No. |
| **421 Atlantic Street**<br>**Stamford, Connecticut** | **06901** |
| Address of Principal Executive Offices | Zip Code |

---

Registrant's telephone number, including area code (888) 636-1223

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.00001 par value per share | LOVE | The Nasdaq Stock Market LLC |

---

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes □ No ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes □ No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☒ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ⌧

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. □

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes □ No ☒

As of August 3, 2025 (last business day of the registrant's most recently completed second fiscal quarter), the aggregate market value of the voting common stock held by non-affiliates of the Registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) was approximately $241,847,507.

As of March 30, 2026, there were 14,617,106 shares of common stock, $0.00001 par value per share, outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE** 

Certain portions of the registrant's definitive proxy statement relating to its 2026 Annual Meeting of Stockholders, or the 2026 Proxy Statement, to be filed with the Securities and Exchange Commission, are incorporated by reference into Part III of this Annual Report on Form 10-K. Such 2026 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. Except with respect to information specifically incorporated by reference in this Form 10-K, the proxy statement is not deemed to be filed as part of this Form 10-K.

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
| | | Page |
| **<u>[PART I.](#ib81ee4199c7d40c598eb42b95f65358d_13)</u>** |  |  |
| <u>[Item 1.](#ib81ee4199c7d40c598eb42b95f65358d_16)</u> | <u>[Business.](#ib81ee4199c7d40c598eb42b95f65358d_16)</u> | [1](#ib81ee4199c7d40c598eb42b95f65358d_16) |
| <u>[Item 1A.](#ib81ee4199c7d40c598eb42b95f65358d_19)</u> | <u>[Risk Factors.](#ib81ee4199c7d40c598eb42b95f65358d_19)</u> | [8](#ib81ee4199c7d40c598eb42b95f65358d_19) |
| <u>[Item 1B.](#ib81ee4199c7d40c598eb42b95f65358d_22)</u> | <u>[Unresolved Staff Comments.](#ib81ee4199c7d40c598eb42b95f65358d_22)</u> | [32](#ib81ee4199c7d40c598eb42b95f65358d_22) |
| <u>[Item 1C.](#ib81ee4199c7d40c598eb42b95f65358d_25)</u> | <u>[Cybersecurity](#ib81ee4199c7d40c598eb42b95f65358d_25)</u> | [33](#ib81ee4199c7d40c598eb42b95f65358d_25) |
| <u>[Item 2.](#ib81ee4199c7d40c598eb42b95f65358d_28)</u> | <u>[Properties.](#ib81ee4199c7d40c598eb42b95f65358d_28)</u> | [33](#ib81ee4199c7d40c598eb42b95f65358d_28) |
| <u>[Item 3.](#ib81ee4199c7d40c598eb42b95f65358d_31)</u> | <u>[Legal Proceedings.](#ib81ee4199c7d40c598eb42b95f65358d_31)</u> | [34](#ib81ee4199c7d40c598eb42b95f65358d_31) |
| <u>[Item 4.](#ib81ee4199c7d40c598eb42b95f65358d_34)</u> | <u>[Mine Safety Disclosures.](#ib81ee4199c7d40c598eb42b95f65358d_34)</u> | [34](#ib81ee4199c7d40c598eb42b95f65358d_34) |
| **<u>[PART II.](#ib81ee4199c7d40c598eb42b95f65358d_37)</u>** |  |  |
| <u>[Item 5.](#ib81ee4199c7d40c598eb42b95f65358d_40)</u> | <u>[Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](#ib81ee4199c7d40c598eb42b95f65358d_40)</u> | [35](#ib81ee4199c7d40c598eb42b95f65358d_40) |
| <u>[Item 6.](#ib81ee4199c7d40c598eb42b95f65358d_43)</u> | <u>[\[Reserved\].](#ib81ee4199c7d40c598eb42b95f65358d_43)</u> | [36](#ib81ee4199c7d40c598eb42b95f65358d_43) |
| <u>[Item 7.](#ib81ee4199c7d40c598eb42b95f65358d_46)</u> | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations.](#ib81ee4199c7d40c598eb42b95f65358d_46)</u> | [36](#ib81ee4199c7d40c598eb42b95f65358d_46) |
| <u>[Item 7A.](#ib81ee4199c7d40c598eb42b95f65358d_76)</u> | <u>[Quantitative and Qualitative Disclosures About Market Risk.](#ib81ee4199c7d40c598eb42b95f65358d_76)</u> | [44](#ib81ee4199c7d40c598eb42b95f65358d_76) |
| <u>[Item 8.](#ib81ee4199c7d40c598eb42b95f65358d_79)</u> | <u>[Financial Statements and Supplementary Data.](#ib81ee4199c7d40c598eb42b95f65358d_79)</u> | [45](#ib81ee4199c7d40c598eb42b95f65358d_79) |
| <u>[Item 9.](#ib81ee4199c7d40c598eb42b95f65358d_82)</u> | <u>[Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.](#ib81ee4199c7d40c598eb42b95f65358d_82)</u> | [45](#ib81ee4199c7d40c598eb42b95f65358d_82) |
| <u>[Item 9A.](#ib81ee4199c7d40c598eb42b95f65358d_85)</u> | <u>[Controls and Procedures.](#ib81ee4199c7d40c598eb42b95f65358d_85)</u> | [45](#ib81ee4199c7d40c598eb42b95f65358d_85) |
| <u>[Item 9B.](#ib81ee4199c7d40c598eb42b95f65358d_88)</u> | <u>[Other Information.](#ib81ee4199c7d40c598eb42b95f65358d_88)</u> | [48](#ib81ee4199c7d40c598eb42b95f65358d_88) |
| <u>[Item 9C.](#ib81ee4199c7d40c598eb42b95f65358d_94)</u> | <u>[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.](#ib81ee4199c7d40c598eb42b95f65358d_94)</u> | [48](#ib81ee4199c7d40c598eb42b95f65358d_94) |
| **<u>[PART III.](#ib81ee4199c7d40c598eb42b95f65358d_97)</u>** |  |  |
| <u>[Item 10.](#ib81ee4199c7d40c598eb42b95f65358d_100)</u> | <u>[Directors, Executive Officers and Corporate Governance.](#ib81ee4199c7d40c598eb42b95f65358d_100)</u> | [49](#ib81ee4199c7d40c598eb42b95f65358d_100) |
| <u>[Item 11.](#ib81ee4199c7d40c598eb42b95f65358d_103)</u> | <u>[Executive Compensation.](#ib81ee4199c7d40c598eb42b95f65358d_103)</u> | [50](#ib81ee4199c7d40c598eb42b95f65358d_103) |
| <u>[Item 12.](#ib81ee4199c7d40c598eb42b95f65358d_106)</u> | <u>[Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](#ib81ee4199c7d40c598eb42b95f65358d_106)</u> | [50](#ib81ee4199c7d40c598eb42b95f65358d_106) |
| <u>[Item 13.](#ib81ee4199c7d40c598eb42b95f65358d_109)</u> | <u>[Certain Relationships and Related Transactions, and Director Independence.](#ib81ee4199c7d40c598eb42b95f65358d_109)</u> | [50](#ib81ee4199c7d40c598eb42b95f65358d_109) |
| <u>[Item 14.](#ib81ee4199c7d40c598eb42b95f65358d_112)</u> | <u>[Principal Accountant Fees and Services.](#ib81ee4199c7d40c598eb42b95f65358d_112)</u> | [50](#ib81ee4199c7d40c598eb42b95f65358d_112) |
| **<u>[PART IV.](#ib81ee4199c7d40c598eb42b95f65358d_115)</u>** |  |  |
| <u>[Item 15.](#ib81ee4199c7d40c598eb42b95f65358d_118)</u> | <u>[Exhibits, Financial Statement Schedules.](#ib81ee4199c7d40c598eb42b95f65358d_118)</u> | [51](#ib81ee4199c7d40c598eb42b95f65358d_118) |
| <u>[Item 16.](#ib81ee4199c7d40c598eb42b95f65358d_121)</u> | <u>[Form 10-K Summary.](#ib81ee4199c7d40c598eb42b95f65358d_121)</u> | [51](#ib81ee4199c7d40c598eb42b95f65358d_121) |

---

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**TRADEMARKS**

*The Lovesac Company owns or has rights to use multiple trademarks that it uses in conjunction with the operation of its business. The trademarks of The Lovesac Company, which are registered in U.S. Patent and Trademark Office, are the registered word trademarks of LOVESAC, DESIGNED FOR LIFE FURNITURE CO., DESIGNED FOR LIFE, DFL, ALWAYS FITS, FOREVER NEW, TOTAL COMFORT, THE WORLD'S MOST ADAPTABLE COUCH, SACTIONALS, LOVESOFT, SIDE, STEALTHTECH, DON'T JUST HEAR IT, FEEL IT, SACTIONALS POWER HUB, THE WORLD'S MOST VERSATILE TABLE, ANYTABLE, THE WORLD'S MOST COMFORTABLE SEAT, SACS, SAC, SUPERSAC, MOVIESAC, PILLOWSAC, CITYSAC, GAMERSAC, SQUATTOMAN, DURAFOAM, FOOTSAC, ROOM FOR TWO, REWRITING THE RULES OF COMFORT, and various registered design trademarks and registered trade dress. Solely for convenience, the Company only uses the™ or® symbols the first time any trademark or trade name is mentioned. Such references are not intended to indicate in any way that the Company will not assert, to the fullest extent permitted under applicable law, its rights to its trademarks and trade names. Each trademark or trade name of any other company appearing in this Annual Report on Form 10-K is, to the Company's knowledge, owned by such other company.*

**FORWARD-LOOKING STATEMENTS**

*This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other legal authority, which statements may involve substantial risk and uncertainties. All statements contained in this Annual Report on Form 10-K other than statements of historical fact, including statements regarding our future operating results, financial position and liquidity, our business strategy and plans, market growth and trends, and our objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions*.

*You should not place undue reliance on forward looking statements. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur at all or on a specified timeframe. The cautionary statements set forth in this Annual Report on Form 10-K, including in Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things: business disruptions or other consequences of economic instability, recession, political instability, civil unrest, armed hostilities and global conflict, natural and man-made disasters, pandemics or other public health crises, or other catastrophic events; the impact of changes or declines in consumer spending and increases in interest rates and inflation on our business, sales, results of operations and financial condition; active, pending or threatened litigation; our ability to manage and sustain our growth and profitability effectively, including in our ecommerce business, forecast our operating results, and manage inventory levels; our cash flows, changes in the market price of our common stock, global economic and market conditions and other considerations that could impact the specific timing, price and size of repurchases under our stock repurchase program or our ability to fund any stock repurchases; our ability to improve our products and develop and launch new products; our ability to successfully open and operate new showrooms; our ability to advance, implement or achieve the goals set forth in our ESG Report; our ability to realize the expected benefits of investments in our supply chain and infrastructure, as well as our efforts to onshore manufacturing for a portion of our Sactionals production; disruption in our supply chain and dependence on foreign manufacturing and imports for our products; execution of our share repurchase program and its expected benefits for enhancing long-term shareholder value; our ability to acquire new customers and engage existing customers; reputational risk associated with increased use of social media; our ability to attract, develop and retain highly skilled associates and employees; cybersecurity and vulnerability to electronic break-ins and other similar disruptions or other system interruptions or failures in our technology infrastructure needed to service our customers, process transactions and fulfill orders; unauthorized disclosure of sensitive or confidential information through breach of our computer system; the ability of third-party providers to continue uninterrupted service; the impact of changes in diplomatic and trade relations, as well as tariffs, and the countermeasures and tariff mitigation initiatives; the regulatory environment in which we operate; our ability to maintain, grow and enforce our brand and intellectual property rights and avoid infringement or violation of the intellectual property rights of others; any inability to implement and maintain effective internal control over financial reporting; and our ability to compete and succeed in a highly competitive and evolving industry.* 

*We caution you that the foregoing list may not contain all of the factors that may impact the forward-looking statements made in this Annual Report on Form 10-K.*

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

*You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Annual Report on Form 10-K primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report on Form 10-K. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur at all or on a specified timeline, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.*

*The forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Annual Report on Form 10-K to reflect events or circumstances after the date of this Annual Report on Form 10-K or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.*

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**PART I.**

**Item 1. Business.**

When used in this report, the terms "we," "us," "our," "Lovesac" and the "Company" mean The Lovesac Company.

**Company Overview**

We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through our proprietary Designed for Life® approach which results in products that are built to last a lifetime and designed to evolve as our customers' lives do. Our current product offering is comprised of modular couches called Sactionals®, premium foam beanbag chairs called Sacs®, the immersive surround sound home theater system called StealthTech®, the PillowSac® Chair, the Sactionals Reclining Seat, a recently launched platform of premium seating called Snugg<sup>TM</sup>, and various accessories. Innovation is at the center of our design philosophy with all of our core products protected by a robust portfolio of utility and design patents. We market and sell our products through an omni-channel platform that includes direct-to-consumer touch points in the form of our own showrooms and online directly at www.lovesac.com. We believe that our ecommerce centric approach, coupled with our ability to deliver our large upholstered products through express couriers, is unique to the furniture industry.

**Product Overview**

Our products serve as a set of building blocks that can be rearranged, restyled and re-upholstered for any new setting or occasion, mitigating constant changes in fashion and style. They are built to last and evolve throughout a customer's life.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•* Sactionals**. Our Sactional product line currently represents a majority of our net sales. We believe our Sactionals platform is unlike competing products in its adaptability yet is comparable aesthetically to similarly priced premium couches and sectionals. Our Sactional products include a number of patented features relating to their geometry and modularity, coupling mechanisms and other features. Utilizing primarily two, standardized pieces, "seats" and "sides," and approximately 200 high quality, tight-fitting cover options that are removable, washable, and changeable, customers can create numerous permutations of a sectional couch with minimal effort. Customization is further enhanced with our specialty-shaped modular offerings, such as our wedge seat, angled sides and roll or swept arms. In September 2024, we launched the AnyTable*®*, a versatile table that seamlessly enhances any Sactionals living space, and in November 2024, we launched the Sactionals Reclining Seat, an innovation that integrates advanced reclining technology and delivers unparalleled comfort and flexibility while maintaining the sleek, sophisticated aesthetic of our Sactionals. Our custom features and accessories can be added easily and quickly to a Sactional to meet endless design, style, storage and utility preferences, reflecting our Designed for Life philosophy. Sactionals are built to meet the highest durability and structural standards applicable to fixed couches. Sactionals are comprised of standardized units and we guarantee their compatibility over time, which we believe is a major pillar of their value proposition to the consumer. Our Sactionals represented 91.1%, 91.4% and 91.0% of our net sales for fiscal 2026, 2025 and 2024, respectively.

Our Sactionals StealthTech Sound + Charge product line complements our Sactionals as a unique innovation that features immersive surround sound by Harman Kardon and convenient wireless charging, all seamlessly embedded and hidden inside the adaptable Sactionals platform. The system includes two Sound + Charge Sides each with embedded front- and rear-firing Harman Kardon speakers, a Subwoofer that easily integrates into a Sactionals Seat Frame and a Center Channel, all working in unison to deliver captivating surround sound that is completely hidden from view. In May 2023, we introduced Satellite Subwoofers as an add-on to the Sound + Charge System. The Satellite Subwoofer is an upgrade to the existing StealthTech setup and enhances the bass and overall entertainment experience. In November 2024, we launched the StealthTech Charge Side, integrating wireless device charging into our Sactionals Sides without the need for our sound system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Sacs**. We believe that our Sacs product line is a category leader in oversized beanbags. The Sac product line offers 5 different sizes ranging from 32 pounds to 95 pounds with capacity to seat 3+ people on the larger model Sacs. Filled with Durafoam, a proprietary blend of shredded foam, Sacs provide serene comfort and guaranteed durability. Their removable covers are machine washable and may be easily replaced with a wide selection of cover offerings. In May 2024, we launched the PillowSac Chair, an accessory that elevates the style and comfort of our existing PillowSac. In October 2025, the Company launched the PillowSac Chair Jr., which delivers the same comfort and premium materials as the PillowSac Chair, scaled for smaller spaces. Our Sacs represented 6.1%, 7.2% and 7.4% of our net sales for fiscal 2026, 2025 and 2024, respectively.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Other**. Our Other product line enhances the versatility of our Sacs and Sactionals, catering to the evolving demands and preferences of our customers. Our current offerings include Sactional-specific drink holders, Footsac blankets, decorative pillows, fitted seat tables, ottomans in various styles and finishes, and the unique Sactionals Power Hub. These products provide our customers with the flexibility to personalize their furnishings with both decorative and practical add-ons, ensuring they can adapt to meet changing style preferences.

In May 2025, the Company launched Snugg (previously referred to as EverCouch™), a new platform of premium seating. Snugg combines the familiar shape of a sofa, loveseat, or chair with durable quality and flexible design. Similar to Lovesac's Sactionals seating solution, Snugg includes washable fabrics, changeable covers, adaptable arm styles, and customizable fill. Snugg can be moved as a single unit like a traditional couch, or disassembled and reassembled for easier transport, providing comfortable seating and a versatile fit for a range of spaces.

**Sales Channels**

We offer our products through an omni-channel platform that provides a seamless and meaningful experience to our customers online and in-store. Our distribution strategy allows us to reach customers through three distinct, brand-enhancing channels.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Showrooms**. We market and sell our products through 278 showroom locations strategically situated at top tier malls, lifestyle centers, and street locations in 45 states in the U.S. We carefully select what we believe are the best small-footprint showroom locations in high-end malls and lifestyle centers for our showrooms. Compared to traditional retailers, our showrooms require significantly less square footage because of our need to have only a few in-showroom sample configurations for display and our ability to stock our inventory for immediate sale. The architecture and layout of these showrooms are designed to communicate our brand personality and key product features. Our goal is to educate first-time customers, creating an environment where people can touch, feel, read, and understand the technology behind our products. Our showroom concept emphasizes our unique product platform and utilizes technology in more experiential ways to increase traffic and net sales. Net sales generated by this channel accounted for 67.1%, 62.6% and 62.5% of total net sales for fiscal 2026, 2025 and 2024, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Ecommerce**. Through our ecommerce channel, we believe we are able to significantly enhance the consumer shopping experience for home furnishings, driving deeper brand engagement and loyalty, while also realizing more favorable margins than our showroom locations. We believe our robust technological capabilities position us well to benefit from the growing consumer preference to transact at home and via mobile devices. Our net sales generated by this channel accounted for 27.6%, 28.8% and 28.5% of total net sales for fiscal 2026, 2025 and 2024, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Other touchpoints**. We augment our showrooms with other touchpoint strategies including online and in store pop-up-shops, shop-in-shops, barter inventory transactions, and the Loved by Lovesac program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦ In store and online pop-up-shops**. We utilize in store pop-up-shops to increase the number of locations where customers can experience and purchase our products, a low cost alternative to drive brand awareness, in store net sales, and ecommerce net sales. These in store pop-up-shops are typically 10-day shows and are staffed similarly to our showrooms with associates trained to demonstrate and sell our products and promote our brand. In fiscal 2026 and 2025, we operated 689 and 601 in store pop-up-shops, respectively, and 14 and 9 online pop-ups on Costco.com, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Shop-in-shops**. Shop-in-shops are designed to be in permanent locations carrying the same digital technology of our showrooms and are also staffed with associates trained to demonstrate and sell our products. Shop-in-shops require less capital expenditure to open a productive space to drive brand awareness and touchpoint opportunities for demonstrating and selling our products. In June 2025, the Company discontinued its partnership with Best Buy, resulting in the closure of all remaining Best Buy shop-in-shop locations as of February 1, 2026. Prior to the discontinuation of the partnership, we operated 49 Best Buy shop-in-shops as of February 2, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Barter inventory transactions**. Our barter inventory transactions with a third party vendor are part of our Circular Operations ("CO"), Designed for Life, and Environmental, Social and Governance ("ESG") initiatives. CO is a way of doing business that is meant to reduce our footprint, while dramatically extending the life of products through more looped, localized, long-term, and sustainable practices, policies, and programs. Our barter inventory arrangement permits us from time to time to repurpose

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returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth. See **Note 1. Basis of Presentation, and Summary of Significant Accounting Policies** in the Notes to the Financial Statements included in Part IV of this report for more information about our unused media credits as of February 1, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Loved by Lovesac.** In June 2025, we launched the Loved by Lovesac program which enables customers to purchase quality-assured, revitalized open-box products through our dedicated resale platform at www.lovedbylovesac.com. All items are inspected and verified for resale prior to listing. We believe this initiative aligns with our Designed for Life philosophy and supports our commitment to sustainability by extending the lifecycle of our products and reducing environmental impact. The Company has initiated a limited launch of Loved by Lovesac, which as of February 1, 2026, is available in 29 select states nationwide.

Other net sales, which includes pop-up-shop sales, shop-in-shop sales, barter inventory transactions, and the Loved by Lovesac program, accounted for 5.3%, 8.6% and 9.0% of total net sales for fiscal 2026, 2025 and 2024, respectively.

**Customers**

Our Designed for Life products provide flexibility, upgrade ability and sustainability, elements that attract a wide customer base and can change as their life changes. Our customers have different tastes, styles, purchasing goals and budgets when shopping for couches, and our Sactionals platform's modularity addresses this array of needs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Target Demographics.** Based on our internal data, our target customer is 25 to 54 years in age with an annual household income of over $75,000. We consider this to be an attractive demographic because of its higher than average rates of household formation and furniture purchasing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Customer Lifetime Value.** We aim to maximize customer lifetime value for both new and existing customers by delivering a consistent brand message across our omni-channel platform, which we believe influences our customers' buying decisions, and through our unique product offerings designed to evolve with our customers' needs. We believe we have an opportunity to increase revenue and loyalty from new and existing customers, thereby extending customer lifetime value. We will continue to drive penetration of Sactionals and StealthTech, and invest in product development to enhance customer experience and drive sales of additional products to existing customers. We believe we are well positioned in the market and there is significant room to expand our customer base and convert them into active, lifetime customers.

**Growth Strategies**

To position Lovesac for future growth, in the last several years we have made significant investments in overhead, optimized and integrated our business technologies and processes, and further developed our marketing strategies. In addition, we have refocused our strategy regarding our showrooms, moving across malls, lifestyle centers, strip malls, and pad sites and continue to support ecommerce sales, a critical growth channel. We are moving to fixed versus variable rent structures in many of our lease arrangements, and our interactive technology driven showroom experience has resulted in higher traffic levels and conversion.

We are also focused on the following key strategies to drive sales growth:

***Continue to Build on Our Brand***

We aggressively invest in brand building and direct marketing efforts through a robust and diverse marketing mix, with a focus on building the Lovesac and Sactional customer base. Our ecommerce channel plays a significant role in the shopper journey as it is frequently the first step in the shopping journey a prospect will take and our first opportunity to build our brand and educate on our product. We continue to invest into this digital channel to improve user experience, enhancing their research, understanding and confidence in their purchase decision.

Our commitment to sustainability is central to our stated purpose and strategy. Our Designed For Life approach calls for products that are built to last a lifetime and designed to evolve with our customers' lives. Sactionals represent our Designed For Life philosophy in action and customers generally invest in them with a long-term focus. We believe this is a competitive advantage and has helped us establish a unique brand and a successful culture.

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***Strategy on Innovation***

Innovation and test-and-learn are engrained within our Company, from product to operations to marketing and distribution. From inception, we have focused on developing unique, innovative and proprietary product platforms. We deploy a dual strategy that combines continuous research with product innovation. We are continuously expanding and introducing new extensions to these platforms to broaden the appeal, grow the addressable market of our product offerings and ultimately continue to grow and evolve with our customers' needs. We continually evaluate new products to complement our Sactionals and Sac lines and are currently developing accessories for the tech-savvy consumer such as StealthTech Sound + Charge product line and related innovations. In fiscal year 2026, we launched a new platform of premium seating called Snugg, as well as the PillowSac Chair Jr. As we continue to grow our business and add additional showrooms in strategic locations across the United States, we seek the ability to service more customers locally with area-designated representatives who will shift their efforts between our showrooms and customers' homes.

***Increase Sales and Operating Margins***

We seek to increase sales and operating margins through our premium market position and pricing strategy and omni-channel platform, which we believe will require relatively small near-term increases in fixed overhead.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Premium Market Position and Pricing**. Our products are positioned in the premium couch segment of the furniture market. We market as premium products because of our proprietary foam fillings, higher quality materials, our unique Designed For Life design philosophy, and unique Circular Operations operating philosophy, requiring a distinct level of manufacturing and service capabilities. At our price point, we offer a unique value proposition that combines both beautiful aesthetics and utility to our customers that we believe our competitors cannot offer. The difference is explained by our platform approach, where once a customer buys their first couch, the cost of expanding and adding to it over time drives more value than the traditional method of purchasing another new couch to replace the old one.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Omni-channel Platform.** By leveraging our omni-channel platform, we cost-effectively drive traffic to our ecommerce channel, resulting in increased web-based sales and improved operating margins. We continually seek to improve our ecommerce capabilities to drive sales, improve customer satisfaction score ("CSAT"), and take advantage of the lower cost of this channel. Our showrooms and other direct marketing efforts work in concert to drive customer conversion in ecommerce, providing customers with the flexibility to purchase where, when, and how they want. Customers have the capability to begin an order in the showroom, continue the purchase online, and vice versa. In addition, our shop-in-shops provide a low-cost alternative to drive brand awareness and both in-store and ecommerce sales.

**Supply Chain and Sourcing**

We manage a global supply chain of highly vetted and qualified, third-party manufacturing partners to produce our products. Our partners operate facilities located in Vietnam, Malaysia, China, Indonesia, Taiwan, India, and the United States. We do not currently own or operate any manufacturing facilities as we believe our partners' facilities are sufficient to meet our current demand and will be able to meet any additional demand in the future. As previously announced, we expect to invest in additional domestic manufacturing capabilities to support supply chain redundancy for our Sactional products. Additionally, we work closely with our manufacturing partners regarding product quality and manufacturing process efficiency. To mitigate the concentration risk in our supply chain, we have and continue to pursue a higher diversification of manufacturing partners, with both sourcing, tariff, and geographical advantages. We expect that our efforts to onshore our sourcing of Sactionals will be cost-neutral after the initial ramp-up occurs.

**Logistics and Distribution**

We are able to efficiently distribute and ship our products to our customers. Due to the unique modularity of our Sactionals products, the compact design of our Snugg and the ability to shrink our Sacs, we are able to distribute our products through nationwide express couriers and efficiently utilize warehouse space and international shipping routes. We believe our Sactionals are the only product in its category that enjoys this logistical advantage.

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**Seasonality**

We experience seasonal fluctuations in our sales. A larger percentage of our sales occur in the fourth quarter of our fiscal year, which coincides with Black Friday (the day after Thanksgiving, when retailers typically offer holiday discounts), the holiday season and our related promotional and marketing campaigns. Our total net sales for each of the fiscal 2026 quarters in sequential order equaled 19.8%, 23.0%, 21.5% and 35.7%, respectively.

**Intellectual Property**

We own 52 U.S. federal trademark registrations, 303 foreign trademark registrations, and a number of U.S. and foreign trademark applications and common law trademark rights. Some of our registered U.S. trademarks include registrations for Lovesac*®*, Designed for Life*®,* DFL®, Sactionals*®*, SAC*®*, StealthTech*®,* Moviesac*®*, Squattoman*®*, Total Comfort*®*, Footsac*®*, The World's Most Comfortable Seat*®*, and The World's Most Adaptable Couch*®*. Our trademarks, if not abandoned, are scheduled to expire between calendar years 2026 and 2036.

In order to maintain our U.S. trademark registrations, we must continue to use the marks in commerce on the goods and services identified in the registrations and must make required filings with the U.S. Patent and Trademark Office at intervals specified by applicable statutes and regulations. Failure to comply with these requirements may result in abandonment or cancellation of the registrations.

We have 55 issued U.S. utility patents and 85 issued foreign utility patents, that expire between 2035 and 2043. Our Sactional technology patents include our proprietary geometric modular system and segmented bi-coupling technology. Our StealthTech technology patents include our proprietary sound and entertainment system. We have patents covering the ornamental appearance of our product lines. We also have multiple patents pending and expect to file patent applications for future innovations. We believe that our patent portfolio, combined with our innovative design approach may deter others from attempting to imitate or replicate our products.

**Competition**

Our business is rapidly evolving and intensely competitive. Retailers compete based on a variety of factors, including design, quality, price and customer service. Levels of competition and the ability of our competitors to attract customers through competitive pricing or other factors may impact our results of operations. Our competition includes furniture stores, big box retailers, department stores, specialty retailers and online furniture retailers and marketplaces.

We believe our combination of proprietary products, brand strength, loyal customer base, omni-channel approach, technological platform, unique consumer experience, logistical advantages and seasoned management team allow us to compete effectively against and differentiate ourselves from the competition.

**Environmental Sustainability and Social Responsibility**

Our business is purpose driven, pursuing continued economic growth alongside environmental and social responsibility through innovative and lasting programs. We have incorporated social, environmental, health and safety procedures into our global manufacturing standards. Additionally, we are taking an enhanced inventory of our carbon footprint and constructing new operational processes to reduce waste throughout our value chain.

Our social and environmental initiatives include but are not limited to the following:

***Social Responsibility Initiatives***

We aim to foster an inclusive culture where associates feel welcomed and valued, something we believe that will help associates reach their fullest talent potential and deliver remarkable results. Our Belonging at Lovesac initiatives focus on supporting associates, including focusing on the behaviors that will help mitigate bias throughout the employee experience to enable people of all identities and backgrounds to feel like they belong and do their best work. Furthermore, we offer continuous opportunities to learn new skills on the job and tools to develop meaningful careers. Associate development hours and engagement scores are regularly measured and reported with a goal to transparently share our progress in these areas each year. Extending our social commitments beyond our own operations and into the communities where we can make a difference, we have established a committee to expand future community giving programs known as Lovesac Gives Back. The program's mission is to support our ambition to become the most beloved home brand in America by giving back to the communities we serve.

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***Environmental Sustainability Initiatives***

Delivering innovative solutions to support a sustainable, low carbon future is anchored in our guiding principles. In fiscal 2022, we established new Environmental, Social and Governance (ESG) targets to minimize our overall environmental impacts across a range of important measures, such as emission, energy use, waste, and sustainable sourcing. Each year, our internal ESG Committee, comprised of members of our leadership team, works to track and report on progress towards these ongoing commitments. By 2040, we plan to reach targets of zero waste and zero emissions across our entire value chain. We are also aiming to repurpose 1 billion plastic bottles in our products with fabrics made from recycled plastic fibers. Detailed information on these and other long-term environmental goals can be found in our fiscal year 2025 ESG Report.

We monitor our sourcing facilities that manufacture Lovesac products for implementation of safe and ethical business practices in the areas of working hours, wages, benefits, forced labor, discrimination, and child labor. These facilities are also required to manage their environmental impacts, provide a safe and healthy environment in all workspaces, comply with all local wage and hour laws and regulations, and comply with all applicable environmental laws and regulations. Ethical and environmental practices are confirmed through agreements with our manufacturers to submit to third party auditing and authorized monitoring. We work to ensure our products are safe for our customers and their homes with strict safety standards and responsible use of chemicals. To achieve these standards, we strive for all of our products to meet or exceed performance requirements for product durability, safety, and consumer satisfaction through rigorous safety inspections.

In December 2025, we published our fifth annual Environmental, Social, and Governance (ESG) report aligned with the guidance of the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD). We believe that transparently disclosing the goals and metrics pertinent to our ESG programs will grant our stakeholders continued visibility of our progress. To that end, we expect to update this report annually for consistent transparency of our evolving ESG strategy and related efforts.

**Environmental Compliance**

Our manufacturing operations are subject to a variety of U.S. and international environmental protection measures. We believe that our operations comply in all material respects with applicable environmental laws and regulations. Our compliance with these requirements is not expected to have a material effect upon our capital expenditures, cash flows, earnings, or competitive position.

**Human Capital**

The long-term success of our business depends on attracting, developing and retaining top talent to drive our growth strategy and support our guiding principles. These principles are the foundation of our business and grounded in true sustainability, a singular focus on high quality execution of fewer core products, consideration of all stakeholder perspectives in our decision-making, and championing meaningful relationships through the development of products that bring people together.

Our corporate culture celebrates our associates at online rallies and annual in-person events designed to engage our associates and reward them for exemplary performance and embodiment of our core competencies and values. We support our associates' professional development through training platforms and programs on topics relevant to our business, functional areas, or policies and procedures. Our associates participate in coaching sessions with their managers where they are evaluated on their performance relative to certain key performance indicators and alignment with our core competencies and given actionable feedback. We engage our associates on many levels to share learnings, educate, and foster community and connection.

Our talent acquisition strategy is to attract top talent and become a sought-after U.S. employer focused on our Designed For Life philosophy and a culture of Top Ambition and Love Matters. We have initiated this strategy by expanding the areas from which we source talent and offering flexible remote working opportunities for eligible associates. We will continue to build on this strategy, working in parallel with our evolving future work strategy. We also offer a robust and immersive onboarding plan to create a strong foundation for our new associates and timely, effective integration.

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In fiscal 2026, a majority of our workforce continued to work remotely. To support our headquarters-based associates, we ensure that our associates have the technology to support remote work and are redefining our future working environment to offer flexible working solutions. For associates supporting our showrooms, we implemented specific protocols to ensure the safety of our associates and our customers.

As of February 1, 2026, we had 917 full-time associates and 965 part-time associates, and we contracted with eighteen independent contractors.

All associates and contractors are subject to contractual agreements that specify, among other things, requirements for confidentiality, ownership of newly developed intellectual property and restrictions on working for competitors as well as other matters.

**Belonging at Lovesac** 

At Lovesac, we champion building meaningful relationships as we foster an inclusive culture that embraces and celebrates the individuality of everyone. We believe that when associates feel welcomed and valued, they can reach their fullest talent potential and deliver remarkable results. We believe our culture and our business is enhanced by our workforce being comprised of individuals with diverse backgrounds, perspectives, skills, and experiences that align with the needs of our business. We are an equal opportunity employer. We believe in meritocratic hiring of A players with the necessary skills and talent to move us into the next chapter and rewarding Associates for performance. In fiscal 2026, we continued to focus on the behaviors that will help mitigate bias throughout the employee experience to enable people of all identities and backgrounds to feel welcome and do their best work. We maintained our steering committee of senior leaders and an action council of associates that direct and enable our belonging initiatives. We measure the impact on our associates' experiences through the annual Engagement Survey.

**Product Development**

We design and sell non-seasonally driven, Designed For Life products, that are focused on driving incremental value for our customer. The process leverages numerous inputs to shape our product roadmap, sequencing of product launches, and prioritization of product projects. A few examples of these sources of information are consumer insights generated by research commissioned by Lovesac, patterning our category and key competitors, and product opportunities developed to address customer satisfaction. All products that we bring to market must adhere to our Designed For Life design philosophy which calls for products that are built to last a lifetime and designed to evolve as life changes. This ensures that our products not only leverage responsible inputs when possible, but also create a sustainable product that is built to last and designed to evolve.

**Government Regulation**

We are subject to numerous U.S. and international trade laws and regulations, and U.S. federal, state and foreign laws and regulations covering a variety of subject matters, many of which are evolving. These laws and regulations involve matters including privacy, data use, data protection and personal information, intellectual property, anti-spam, consumer credit offerings, content protection, electronic contracts and communications (such as "do not call/mail" and text messaging requirements), consumer protection, pricing transparency and false advertising, use of artificial intelligence, Internet neutrality, product liability and labeling, ecommerce, taxation, environmental, safety, economic or other trade prohibitions, sanctions, or tariffs, anti-corruption and political law compliance, securities law compliance, and online payment services. Our compliance with these laws and regulations may be onerous and could, individually or in the aggregate, increase our cost of doing business and/or otherwise have an adverse impact on our business, reputation, financial condition, and operating results.

For additional information about government regulation applicable to our business, see Part I, Item 1A. Risk Factors in this Annual Report on Form 10-K.

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**Available Information** 

Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our Proxy Statements and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") are available, free of charge, on our investor relations website (https://investor.lovesac.com) as soon as reasonably practicable after we file such materials electronically with or furnish it to the SEC. Information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K and the inclusion of our website address in this Annual Report is for reference only. The SEC also maintains a website that contains our SEC filings at www.sec.gov.

**Item 1A. Risk Factors.**

*An investment in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K, including our financial statements and the related notes thereto. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us, or that we currently believe are not material, also may become important factors that affect us and impair our business operations. The occurrence of any of the events or developments discussed in the risk factors below could have a material and adverse impact on our business, results of operations, financial condition and cash flows, and in such case, our future prospects would likely be materially and adversely affected. If any of such events or developments were to happen, the trading price of our common stock could decline.*

**<u>Summary</u>**

Our business is subject to numerous risks and uncertainties, as described below, that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. The principal factors and uncertainties that make investing in our common stock risky include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any decline in consumer spending including due to negative impact from economic conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain our brand image, engage new and existing customers and gain market share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to compete successfully;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract, develop, motivate and maintain well-qualified associates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• systems interruptions that impair customer access to our sites or other performance failures in our technology infrastructure, including significant disruptions of or breach in security of information technology systems and violation of data privacy laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our dependence on a small number of suppliers, including international suppliers and those in developing countries, foreign manufacturing and imports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully develop U.S. domestic manufacturing capabilities and achieve expected cost, capacity, and supply-chain benefits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of increases in demand for, or the price of, raw materials used to manufacture our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to effectively market and launch our products and increase customer traffic;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully open and operate new showrooms and continue to achieve showroom growth rates that we have achieved in the past;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to successfully adapt to consumer shopping preferences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to sustain profitability, and raise capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain effective internal controls over financial reporting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact related to the restatement of our previously issued financial statements;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to accurately forecast our operating results and growth rate or manage our growth effectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to protect our trademarks, brand image, or other intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of potential product recalls or product safety issues that could result in significant costs and damage to our brand;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unfavorable changes to government regulation, including of the Internet and ecommerce; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to meet our publicly announced guidance.

**Business and Industry Risks**

***If we fail to manage our growth effectively, our business, financial condition and operating results could be harmed.***

Our historical growth rates may not be sustainable or indicative of future growth. To manage our growth effectively, we must continue to implement our operational plans and strategies, acquire new and retain existing customers, increase our showroom base, optimize our omni-channel operations, and improve and expand our infrastructure of people and information systems. The success of our growth strategy depends, in part, on our ability to keep existing customers engaged and attract new customers to our brand. There is no guarantee that we will continue to be able to retain existing customers and drive customer acquisition rates necessary for us to maintain our current growth rate.

Additionally, we may not be able to achieve the showroom sales growth rates that we have achieved historically as we continue to expand our showroom base. While our focus is to continue the expansion of our showrooms, this may result in the closure of underperforming showroom locations or locations with declining profitability in order to pursue more productive opportunities that are in line with our real estate strategy. In addition, the results of operations of our showroom locations have and are expected to continue to fluctuate based on, among others, consumer spending patterns, fashion trends, competition, current economic conditions, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our product assortment, the success of marketing programs, weather conditions and public health crises. These factors may cause our showroom sales results and growth rates in the future to be materially lower than recent periods or our expectations, which could harm our business and results of operations.

Growing our business through our omni-channel operations is key to our growth strategy. Our goal is to offer our customers seamless access to our products across our channels, and our success depends on our ability to anticipate and implement innovations in sales and marketing strategies to appeal to existing and potential customers who increasingly rely on multiple channels, such as ecommerce, to meet their shopping needs. Failure to enhance our technology and marketing efforts to align with our customers' developing shopping preferences could significantly impair our ability to meet our strategic business and financial goals.

Additionally, the growth of our business places significant demands on our operations, as well as our management and other employees. The growth of our business may require significant additional resources to meet these daily requirements, which may not scale in a cost-effective manner or may negatively affect the quality of our sites and customer experience. We are also required to manage relationships with a growing number of suppliers, customers and other third parties across the world. Our information technology systems and our internal controls and procedures may not be adequate to support future growth of our supplier and employee base. Failure to manage our growth and organizational change effectively could lead us to over-invest or under-invest in technology and operations; result in weaknesses in our infrastructure, systems or controls; give rise to operational mistakes, losses or loss of productivity or business opportunities; reduce customer satisfaction; limit our ability to respond to competitive pressures; and result in loss of employees and reduced productivity of remaining employees. If we are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be materially adversely affected.

***Our business, results of operations and financial condition may be adversely affected by global economic conditions and the effect of economic pressures and other business factors on discretionary consumer spending and consumer preferences.***

We face numerous business risks relating to macroeconomic factors. Uncertainties in global economic conditions that are beyond our control have in the past impacted discretionary consumer spending and our business and may in the future materially adversely affect our business, results of operations, financial condition and stock price. Consumer purchases of discretionary items, including our products, generally decline during recessionary periods and other times when disposable income is lower. Factors impacting discretionary consumer spending include general economic conditions, inflation,

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reduction in wages and discretionary income, levels of unemployment, consumer debt, reductions in net worth based on severe market declines, residential real estate and mortgage markets, taxation, regulations and new or increased tariffs, including retaliatory tariffs, export controls, volatility of fuel and energy prices, fluctuations in interest rates or currency exchange rates, consumer confidence, closure or restricted operating conditions for businesses, political and economic uncertainty, inclement weather, natural disasters, health epidemics or pandemics and other macroeconomic factors, including geopolitical conditions and regional conflicts. Deterioration in economic conditions, increasing inflation or increasing unemployment levels may reduce the level of discretionary consumer spending and inhibit consumers' use of credit, which may adversely affect our sales. In recessionary periods and other periods where disposable income is adversely affected, we may have to increase the number of promotional sales or otherwise dispose of inventory we have previously paid to manufacture, which could further adversely affect our financial performance. A downturn in the economic environment can also lead to financial instability, increased credit and collectability risk on our receivables, the failure of important partners, including suppliers, manufacturers, logistics providers, and other financial institutions. It is difficult to predict when or for how long any of these conditions could affect our business and a prolonged economic downturn could have a material adverse effect on our business, financial condition, operating results and prospects.

***Our inability to maintain our brand image, engage new and existing customers and gain market share could have a material adverse effect on our growth strategy and our business, financial condition, operating results and prospects.***

Our ability to maintain our brand image and reputation is integral to our business and implementation of our growth strategy. Maintaining, promoting and growing our brand will depend largely on the success of our design, merchandising and marketing efforts and our ability to provide a consistent, high-quality product and customer experience. Our reputation could be jeopardized if we fail to maintain high standards for product quality and integrity and any negative publicity about these types of concerns, whether real or perceived, may reduce demand for our products. If customers do not have a satisfactory shopping experience, they may seek out alternative offerings from our competitors and may not return as a customer as often in the future, or at all. In addition, unfavorable publicity regarding, for example, our practices relating to privacy and data protection, product quality or availability, poor customer service, delivery problems, competitive pressures, litigation or regulatory activity, could seriously harm our reputation. A significant portion of our customers' brand experience also depends on third parties outside our control, including manufacturers, suppliers, assembly and installation service providers and logistics providers such as FedEx, UPS and other third-party delivery agents. If these third parties do not meet our or our customers' expectations, our brands may suffer irreparable damage. Additionally, our reputation could be damaged if we do not (or are perceived not to) act responsibly with respect to any social or sustainability matters, which could negatively impact our business and results of operations. While we believe our brand enjoys a loyal customer base, the success of our growth strategy depends, in part, on our ability to keep existing customers engaged and attract new customers to our brand. We may not be able to maintain and enhance our brand if we receive unfavorable customer complaints, negative publicity or otherwise fail to live up to consumers' expectations. If we experience damage to our reputation or loss of consumer confidence, we may not be able to retain existing customers or acquire new customers, which could have a material adverse effect on our business, financial condition, operating results and prospects.

***If we fail to acquire new customers, or fail to do so in a cost-effective manner, we may not be able to achieve revenue growth or profitability.***

To acquire new customers, we must appeal to prospects who have historically used other means of commerce to purchase furniture, such as traditional furniture retailers. We have made significant investments related to customer acquisition and expect to continue to spend significant amounts to acquire additional customers and to reactivate prior customers. To date, we have reached new customers primarily through our showroom presence in various markets, and through social media, digital content, third-party advocates for our brand and products, by word of mouth, and through national television advertisements. These efforts are expensive and may not result in the cost-effective acquisition of customers. Our marketing expenses have varied from period to period, and we expect this trend to continue as we test new channels and refine our marketing strategies. There is no guarantee that these methods will continue to be successful or will drive customer acquisition rates necessary for us to achieve revenue growth or profitability.

We also utilize non-paid advertising. Our non-paid advertising efforts include search engine optimization, non-paid social media, mobile "push" notifications and email. We obtain a significant amount of traffic via search engines and, therefore, rely on search engines such as Google. We employ search engine optimization and search engine marketing strategies, and our ability to maintain and increase the number of visitors directed to our website and application is not entirely within our control. Search engines frequently update and change the logic that determines the placement and display of results of a user's search, such that the purchased or algorithmic placement of links to our sites can be negatively affected. Moreover, a search engine could, for competitive or other purposes, alter its search algorithms or results, causing our sites to place

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lower in search query results. A major search engine could change its algorithms in a manner that negatively affects our paid or non-paid search ranking, and competitive dynamics could impact the effectiveness of search engine marketing or search engine optimization. Furthermore, major search engines can and have shifted to artificial intelligence-generated search results, which may cause us to experience a significant decrease in traffic to our sites. Mobile "push" notifications and emails are also an important source of traffic to our sites. Regulatory changes could limit our ability to send such communications or impose additional requirements upon us in connection with sending such communications. Further, changes in how web and mail services block, organize and prioritize email may reduce the number of prospective customers who receive or open our emails. Our use of email and other messaging services to send communications to consumers may also result in legal claims against us, which may cause us increased expenses, and if successful might result in fines and orders with costly reporting and compliance obligations or might limit or prohibit our ability to send emails or other messages. We also obtain a significant amount of traffic via social networking websites or other channels used by our current and prospective customers. As e-commerce and social networking continue to rapidly evolve, we must continue to establish relationships with these channels and may be unable to develop or maintain these relationships on acceptable terms. If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers, reactivate prior customers or retain our existing customers and our financial condition would suffer.

Further, some of our new customers originate from word of mouth or other non-paid referrals from existing customers. If our efforts to satisfy our existing customers are not successful, we may not be able to acquire new customers or reactivate prior customers through these referrals, which may adversely affect how we continue to grow our business, or may require us to incur significantly higher marketing expenses in order to acquire new customers.

***Our business is highly competitive. Competition presents an ongoing threat to the success of our business.***

Our business is rapidly evolving and intensely competitive, and we have many competitors in different industries. We compete with furniture stores, big box retailers, department stores, specialty retailers and online furniture retailers and marketplaces.

We expect competition in both retail stores and ecommerce to continue to increase. Our ability to compete successfully depends on many factors both within and beyond our control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the size and composition of our customer base;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our selling and marketing efforts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the quality, price, reliability and uniqueness of products we offer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the convenience of the shopping experience that we provide;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to distribute our products and manage our operations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reputation and brand strength.

Many of our current and potential competitors have longer operating histories, greater brand recognition, larger fulfillment infrastructures, greater technological capabilities, faster and less costly shipping, more efficient distribution models, significantly greater financial, marketing and other resources and larger customer bases than we do. These factors may allow our competitors to, among other things, derive greater sales from their existing customer base, acquire customers at lower costs and respond more quickly than we can to new or emerging technologies and changes in consumer habits. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies. If we are unable to successfully compete, our business, financial condition, operating results and prospects could be materially adversely affected.

We have faced and may face price competition in the future. In addition, competitors with whom we compete, or who can obtain better pricing, more favorable contractual terms and conditions, or more favorable allocations of products during

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periods of limited supply may be able to offer lower prices than we are able to offer. Our operating results and financial condition may be adversely affected by these and other industry-wide pricing pressures.

***We rely on the performance of members of management and highly skilled personnel. If we are unable to attract, develop, motivate and retain well-qualified associates, our business could be harmed.***

We believe our success has depended, and continues to depend, on the efforts and talents of Shawn Nelson, our founder, member of the Board of Directors and Chief Executive Officer; Mary Fox, our President; Keith Siegner, our Executive Vice President, Chief Financial Officer and Treasurer; and other members of our management team. Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled associates. The market for such associates in the cities in which we operate is competitive. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them. The loss of any of our key associates, including members of our senior management team, could materially adversely affect our ability to execute our business plan, and we may not be able to find adequate replacements. Our inability to recruit and develop mid-level managers could have similar adverse effects on our ability to execute our business plan. Moreover, we believe that a key contributor to our success and our ability to retain highly skilled personnel has been our corporate culture, which we believe fosters innovation, teamwork, and a passion for our products and consumers. If we fail to maintain the beneficial aspects of our corporate culture globally, it could adversely affect our ability to attract and retain employees, continue to perform at current levels, or execute on our business strategy.

Our officers and other key associates are employed at-will, meaning that they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. While others have employment agreements with stated terms, they could still leave our employ. If we do not succeed in retaining and motivating existing associates or attracting well-qualified associates, our business, financial condition, operating results and prospects may be materially adversely affected.

***System interruptions that impair customer access to our sites or other performance failures in our technology infrastructure could damage our business, reputation and brand, and substantially harm our business and results of operations.***

The satisfactory performance, reliability and availability of our website, transaction processing systems and technology infrastructure are critical to our reputation, and our ability to acquire and retain customers and maintain adequate customer service levels. We currently rely on a variety of third-party service providers to support mission critical systems and the efficient flow of merchandise from and between warehouses and showrooms to customers and we cannot be sure that these third-party systems, services and support will continue to be available to us without interruption. For example, we rely on common carriers for the delivery of merchandise purchased by customers through our website and in our showrooms, and the systems we employ to communicate delivery schedules and update customers about order tracking interface with the information systems of these common carriers. Our own systems, which are customized versions of ecommerce, customer relationship management, payment processing, and inventory management software technologies deployed by numerous retailers and wholesalers in a variety of industries, must work seamlessly in order for information to flow correctly and update accurately across these systems. We and our third-party service providers have and may in the future experience periodic system interruptions from time to time. Any damage to our technology systems or website could cause interruptions to our operations that materially adversely affect our ability to meet customers' requirements, resulting in an adverse impact to our business, financial condition and results of operations.

In addition, continued growth in our transaction volume, as well as surges in online traffic and orders associated with promotional activities and seasonal trends in our business, place additional demands on our technology platform and could cause or exacerbate slowdowns or interruptions. We have in the past and may in the future experience slowdowns or interruptions in some or all of our sites when we are updating them, and new technologies or infrastructures may not be fully integrated with existing systems on a timely basis, or at all. Additionally, periodically these systems and our website may need to be expanded, updated or upgraded as our business needs change. Our net revenue depends on the number of visitors who shop on our sites and the volume of orders we can handle. Unavailability of our sites or reduced order fulfillment performance would reduce the volume of goods sold and could also materially adversely affect consumer perception of our brand.

Through third parties that underwrite customer risk, we offer financing options in order to increase the market demand for our products among customers who may not be able to buy them using cash. The systems of these third parties must work efficiently in order to give customers real-time credit availability. Changes in the risk underwriting or technologies of these

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third parties may result in lower credit availability to our potential customers and therefore reduced sales. The occurrence of any of the foregoing could substantially harm our business and results of operations.

***Unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system or otherwise, could severely hurt our business.***

Certain aspects of our business involve the receipt, storage and transmission of customers' personal information and consumer preferences, as well as confidential information about our associates, our suppliers and our Company, some of which is entrusted to third-party service providers and vendors. Despite the security measures we have in place, our facilities and systems, and those of third parties with which we do business, have been subject to and may in the future be vulnerable to security breaches, acts of vandalism and theft, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events. In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify these cybersecurity risks.

An electronic security breach in our systems (or in the systems of third parties with which we do business) that results in the unauthorized release of individually identifiable information about customers or other sensitive data could occur and have a material adverse effect on our reputation, lead to substantial financial losses from remedial actions, and lead to a substantial loss of business and other liabilities, including possible punitive damages. In addition, as the regulatory environment relating to retailers and other companies' obligation to protect such sensitive data becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could result in additional costs, and a material failure on our part to comply could subject us to fines, other regulatory sanctions and lawsuits.

***A substantial portion of our business is dependent on a small number of suppliers. In some instances, our suppliers are the only source of supply, or one of a limited number of suppliers, used by the Company for materials, components or services. A material disruption or labor shortage at any of our suppliers could impede our ability to meet customer demand, manufacture or deliver our products, and reduce our sales, and/or negatively affect our financial results.***

We do not own or operate any manufacturing facilities and therefore depend on third-party suppliers for the manufacturing of all of our products. Moreover, a substantial portion of our business is dependent on a small number of suppliers. Sacs are currently manufactured by one manufacturer in North Carolina, which has previously experienced, and may continue to experience in the future, disruptions to its manufacturing operations. Sactionals are currently manufactured by suppliers in Vietnam, Malaysia, China, Indonesia, Taiwan, and India. If our relationship with these suppliers or the suppliers' services are disrupted, terminated or otherwise negatively impacted, we could have difficulty or incur additional costs in replacing these suppliers.

We rely on two primary logistics and transportation carriers to fulfill our last mile product delivery services. These carriers could be vulnerable to labor challenges, liquidity concerns, the impacts of global health conditions, or other factors that may result in delays in deliveries or increased costs of deliveries. Any significant delay in deliveries to our customers could cause increased order cancellations or returns and cause us to lose sales or incur increased costs. Delays in deliveries and increases in freight charges or other costs of deliveries has and could continue to harm our sales, profitability, cash flows and financial condition.

Some of our third-party suppliers experienced a shortage of qualified labor at their manufacturing facilities in certain geographies, due in part to general macroeconomic factors. A prolonged shortage of qualified labor may result in disruption, delays in deliveries or increased costs of deliveries, which could decrease our third-party suppliers' ability to effectively produce and meet our demands and efficiently operate their facilities. A prolonged labor shortage could also lead to increased labor costs from higher overtime, the need to hire temporary help to meet demand and higher wages rates in order to attract and retain employees. Any of these developments or manufacturing disruptions could materially increase our sourcing costs and have a material adverse effect on our results of operations.

Certain of our suppliers' manufacturing facilities, and machines within an otherwise operational facility, have previously ceased temporarily, and could in the future cease, operations unexpectedly due to a number of events, which could materially and adversely impact our business, operations and financial condition. These events include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• equipment failure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• public health crises, such as the COVID-19 pandemic;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fires, floods, earthquakes, hurricanes, or other natural disasters and climate-related events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unscheduled maintenance outages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• utility and transportation infrastructure disruptions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• labor difficulties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other operational problems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• war or terrorism;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• political, social or economic instability, such as any conflict that may arise between China and Taiwan; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financial instability or bankruptcy of any such supplier.

Further, we rely on our suppliers' representations of product quality, safety and compliance with applicable laws and standards. If our suppliers or other vendors violate our agreements, applicable laws or regulations, or implement practices regarded as unethical, unsafe, or hazardous to the environment, it could damage our reputation and negatively affect our operating results. Further, concerns regarding the safety and quality of products provided by our suppliers could cause our customers to avoid purchasing those products from us, or avoid purchasing products from us altogether, even if the basis for the concern is outside our control. As such, any issue, or perceived issue, regarding the quality and safety of any items we sell, regardless of the cause, could adversely affect our brand, reputation, operations and financial results. We are also subject to risks of fraud from our suppliers. If our suppliers violate our agreements, applicable laws or regulations, or implement fraudulent practices regarding their products, it could harm our business, reputation and brands and our operating results may be negatively affected.

***We are subject to risks associated with our dependence on foreign manufacturing, suppliers and imports for our products.***

Our business highly depends on global trade, as well as trade and other factors that impact the specific countries where our vendors' production facilities are located. Our future success will depend in large part upon our ability to maintain our existing foreign vendor relationships and to develop new ones based on the requirements of our business and any changes in trade dynamics that might dictate changes in the locations for sourcing of products. While we rely on long-term relationships with many of our vendors, we have no long-term contracts with them and generally transact business with them on an order-by-order basis.

Our current suppliers operate manufacturing facilities located in Vietnam, Malaysia, China, Indonesia, Taiwan, and India. We are developing additional relationships with domestic manufacturing partners. Our reliance on international suppliers for the substantial majority of our products increases our risk of supply chain disruption. Events that have in the past and could in the future cause disruptions to our supply chain include but are not limited to, the imposition of additional trade laws or regulations; public health crises; the imposition of additional duties, tariffs and other charges on imports and exports; foreign currency fluctuations; theft; and restrictions on the transfer of funds. The occurrence of any of the foregoing could materially increase the cost and reduce or delay the supply of our products, which could adversely affect our business, financial condition, operating results and prospects.

Many of our imported products are subject to existing duties, tariffs, anti-dumping duties and quotas that may limit the quantity or affect the price of some types of goods that we import into the United States. The U.S. Government has also raised the possibility of other initiatives that may affect importation of goods including renegotiation of trade agreements with other countries and the introduction of new or increased import duties or tariffs with respect to products from a number of different countries. The U.S. has imposed or proposed the imposition of new tariffs on products imported into the U.S. from a number of countries, and could propose additional tariffs or increases to those already in place. A portion of our products have been affected by increased tariffs and may be subject to further increased tariffs. The possible implementation of a border tax or new or increased tariffs, or the uncertainty surrounding existing or invalidated tariffs and any related refund processes, could materially increase our cost of goods sold with respect to merchandise that we purchase from vendors who manufacture products outside the U.S., which could in turn require us to increase our prices and, in the event consumer demand declines as a result, negatively impact our results of operations. Furthermore, certain of our competitors may be better positioned than us to withstand or react to border taxes, tariffs or other restrictions on global trade and as a result, we may lose market share to such competitors. Due to broad uncertainty regarding the timing, content

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and extent of any regulatory changes in the U.S. or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition and results of operations.

We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations. Although we and our vendors seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations. It is possible that U.S. Customs and Border Protection or other relevant authorities could, upon review or audit, disagree with the valuation, rules of origin or classification methods applied to certain merchandise. Any such disagreement could result in the retroactive assessment of additional duties with interest, the imposition of penalties, or other enforcement actions without the ability to mitigate such penalties, thereby adversely affecting our operations or financial results. In addition, recent events have resulted in substantial regulatory uncertainty regarding international trade and trade policy, both in the United States and abroad. For example, in February 2026, the Supreme Court of the U.S. issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). To preserve its rights to recover such duties, we filed a complaint and a protective action with the U.S. Court of International Trade seeking a full refund of all tariffs paid under the invalidated IEEPA authorities, but the ultimate availability, timing and amount of any potential refunds of these tariffs remain uncertain. Following the Supreme Court decision, the U.S. Administration announced a new 15% global tariff under Section 122 of the Trade Act of 1974, subject to certain carveouts. At this time we cannot reasonably estimate the total financial impact of this ruling, however it, and any additional tariffs, may materially affect our future results of operations and cash flows.

Additionally, the availability of certain goods could be affected if suppliers choose to limit their exposure to U.S. markets in response to unfavorable trade policies, and we may be unable to source alternatives quickly enough to avoid interruptions in product supply. Further, these changes to tariffs or other rules related to cross border trade, could materially increase our cost of goods sold with respect to products that we purchase from vendors who manufacture products abroad, which could in turn require us to increase our prices and, in the event consumer demand declines as a result, negatively impact our financial performance. Certain of our competitors may be better positioned than us to withstand or react to these kinds of changes including border taxes, tariffs or other restrictions on global trade and as a result we may lose market share to such competitors. In addition, while we may be able to continue to expand and shift our sourcing options, such expansion is time consuming and would be difficult or impracticable for many products and may result in an increase in our manufacturing costs. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the United States or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition and results of operations.

***Our reliance on suppliers in developing countries increases our risk with respect to available manufacturing infrastructure, labor and employee relations, political and economic stability, corruption, and regulatory, environmental, health and safety compliance.***

Our reliance on suppliers in developing countries increases our risk with respect to infrastructure available to support manufacturing, labor and employee relations, political and economic stability, natural disasters, corruption, and regulatory, environmental, health and safety compliance. Any failure of our suppliers to comply with ethical sourcing standards or labor or other local laws in the country of manufacture, or the divergence of a supplier's labor practices from those generally accepted as ethical in the United States, could disrupt the shipment of products, force us to locate alternative manufacturing sources, reduce demand for our products, damage our reputation and/or expose us to potential liability for their wrongdoings. Any of these events could have a material adverse effect on our reputation, business, financial condition, operating results and prospects.

***We may not be able to achieve expected returns from additional investments in U.S. domestic manufacturing capabilities.***

We have commenced efforts to support supply chain redundancy in the United States for our Sactionals product line with goals to expand our production capabilities and de-risk our exposure to the volatile international trade landscape in a cost-neutral fashion. Our efforts to identify and on-board domestic manufacturing partners may not be successful in achieving these goals for a variety of reasons, including that labor costs in the U.S. generally exceed those of the countries from which we obtain products from our overseas manufacturing partners.

As a result, it may be difficult to find manufacturing partners in the United States with capabilities and production capacity to permit us to develop this manufacturing channel on favorable terms.

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***Most of our products are shipped from our suppliers by ocean vessel. If a disruption occurs in the operation of ports through which our products are imported, we may incur increased costs and suffer delays, which could have a material adverse effect on our business, financial condition, operating results and prospects.***

Most of our products are shipped from our suppliers by ocean vessel. If a disruption occurs in the operation of ports through which our products are imported, for instance, as a result of port congestion, adverse weather, terrorist attack, natural disasters or climate change, we may incur increased costs related to air freight or use of alternative ports. Shipping by air is significantly more expensive than shipping by ocean and our margins could be reduced. Shipping to alternative ports could also lead to delays in receipt of our products. We rely on third-party shipping companies to deliver our products to us. Our ability to efficiently ship products to customers has been and may be in the future negatively affected by factors beyond our and the shipping companies' control, which may include labor disputes, union organizing activity, supply chain issues, the closure of such shipping companies' offices or a reduction in operational capacity due to an economic slowdown or the inability to sufficiently ramp up operational capacity during an economic recovery or upturn, health pandemics and epidemics, political instability, military conflict, increased fuel costs and costs associated with any regulations to address climate change, and other factors affecting the shipping industry's capacity or ability to deliver our products to us. For example, ocean freight capacity issues increased during the COVID-19 pandemic which resulted in greater demand for shipping and reduced capacity and equipment, which resulted in increases in shipping container rates. As a result, our inventory levels were adversely impacted and resulted in elevated, and sometimes lengthy, customer backorders. While the pandemic-era disruptions have largely subsided, if in the future there are transportation delays, increases on costs of shipping containers, more extensive travel restrictions, closures or disruptions of businesses and facilities or social, economic, political or labor instability in the affected areas, as a result of pandemics or otherwise, these developments could have a material adverse effect on our business, financial condition, operating results and prospects.

Additionally, a port fee implemented by the U.S. on Chinese-operated and built vessels restricts a percentage of U.S. products from being transported on non-U.S. vessels, which could have the potential to dramatically impact shipping capacity and costs. Furthermore, retaliatory measures from China or other nations could further compound disruptions and cost increases within the global shipping industry. This fee, or other similar fees, could result in a significant increase in our shipping costs, cause inventory disruptions and have a material adverse effect on our operations and financial results.

Additionally, we cannot guarantee that products we receive from suppliers will be of sufficient quality or free from damage, or that such products will not be damaged during shipping, while stored in one of our distribution facilities, or when returned by customers. While we take measures to ensure the products' quality and avoid damage, including evaluating supplier product samples, conducting inventory inspections and inspecting returned products, we cannot control the products while it is out of our possession or prevent all damage while in our distribution facilities.

***Increases in the demand for, or the price of, raw materials used to manufacture our products or other fluctuations in sourcing or distribution costs could increase our costs and negatively impact our gross margin.***

Our gross margin depends, in part, on our ability to mitigate rising costs or shortages of raw materials used to manufacture our products. Raw materials used to manufacture our products are subject to availability constraints and price volatility impacted by a number of factors, including supply and demand for fabrics, steel and metal components, and electronic components, weather, government regulations, economic conditions, economic and political instability, and other unpredictable factors. In addition, our sourcing costs may fluctuate due to labor conditions, transportation or freight costs, energy prices, currency fluctuations, tariffs and trade restrictions, public health crises, or other unpredictable factors. The occurrence of any of the foregoing could increase our costs, delay or reduce the availability of our products and negatively impact our gross margin. For example, members of the U.S. Government have called for substantial changes to tax policies, including the imposition of new or increased tariffs or trade restrictions. The U.S. Government has also raised the possibility of other initiatives that may affect importation of goods including renegotiation of trade agreements with other countries and the introduction of new or increased import duties or tariffs with respect to products from a number of different countries. The U.S. has imposed or proposed the imposition of new tariffs on products imported into the U.S. from a number of countries. If maintained, these and other newly announced tariffs and the potential escalation of trade disputes could increase price and supply pressures.

Although we instituted measures to ensure our supply chain remains open to us, we have in the past, and may in the future continue to, experience raw material supply chain challenges related to suppliers negatively impacted by macroeconomic factors and shipping delays. These global supply chain challenges could continue or reoccur in the future and in turn materially adversely impact our manufacturing production and fulfillment of backlog. While we strive to maintain multiple sources for our raw materials, the impact of certain other macroeconomic conditions on raw materials and increased demand on our supply chain, could again cause additional pricing and availability pressures. Higher raw material prices and costs of sourced products could have an adverse effect on our future margins. We expect raw material prices to remain

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at historically high levels in many categories during fiscal 2027 due to price inflation and increased tariffs in certain raw materials and global supply chain complexities. Macroeconomic factors, such as inflation, will continue to introduce uncertainty into many markets, especially with respect to freight and labor availability. To the extent that we experience incremental costs in any of these areas, we may increase our selling prices or assess material surcharges to offset the impact. However, increases in selling prices, or surcharges, may not fully mitigate the impact of raw material cost increases which would adversely impact operating income.

***Our inability to manage our inventory levels and products, including with respect to our omni-channel operations, could have a material adverse effect on our business, financial condition, operating results and prospects.***

Inventory levels in excess of customer demand may result in lower than planned financial performance. We may be required to mark down certain products to sell any excess inventory or to sell such inventory through liquidation channels at prices that are significantly lower than our retail prices, any of which would negatively impact our business and operating results. Alternatively, if we underestimate demand for our products, we may experience inventory shortages resulting in delays in fulfilling customer demands and replenishing to appropriate inventory levels, missed sales and lost revenues. We may not always be able to respond quickly and effectively to changes in consumer taste and demand due to the amount of time and financial resources that may be required to bring new products to market or to constraints in our supply chain if our vendors do not have the capacity to handle elevated levels of demand for part or all of our orders or could experience delays in production for our products. Much of our merchandise requires that we provide vendors with significant ordering lead times and we may not be able to source sufficient inventory if demand for a product is greater than anticipated. Continued or lengthy delays in fulfilling customer demand could cause our customers to shop with our competitors instead of us, which could harm our business. Either of these events could significantly affect our operating results and brand image and loyalty.

***We are required to make substantial lease payments under our leases, and any failure to make these lease payments when due would likely harm our business. In addition, many of our leases contain use restrictions that may limit our ability to introduce new products or relocation clauses that allow the landlord to move the location of our showrooms. As our leases expire, we may be unable to negotiate acceptable renewals.***

We do not own any of our showrooms. Instead, we rent all of our showroom spaces pursuant to leases. Nearly all of our leases require a fixed annual rent, and many of them require the payment of additional rent if showroom sales exceed a negotiated amount. Most of our leases are "net" leases that require us to pay all costs of insurance, maintenance and utilities, as well as applicable taxes.

Our required payments under these leases are substantial and account for a significant portion of our selling, general and administrative expenses. We expect that any new showrooms we open will also be leased, which will further increase our lease expenses and require significant capital expenditures. We depend on cash flow from operations to pay our lease expenses and to fulfill our other cash needs. If our business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise available to us from other sources, we may not be able to service our substantial lease expenses, which would harm our business.

Our substantial lease obligations could have significant negative consequences, including, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increasing our vulnerability to general adverse economic and industry conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limiting our ability to obtain additional financing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring a substantial portion of our available cash to pay our rental obligations, reducing cash available for other purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limiting our flexibility in planning for or reacting to changes in our business or in the industry in which we compete; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• placing us at a disadvantage with respect to some of our competitors who sell their products exclusively online.

Moreover, our showroom leases are generally long term and non-cancelable, and we generally expect future showrooms to be subject to similar long term, non-cancelable leases. If an existing or future showroom is not profitable, and we decide to close it, we may nonetheless be required to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term if we cannot negotiate a mutually acceptable termination payment.

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Many of our leases contain use clauses that restrict the types of products we may offer at specific locations. These provisions may limit our operations to particular categories of merchandise or restrict us from entering the market for new rooms of furniture or offering certain types of merchandise without landlord consent, which such consent may be withheld, conditioned or delayed. If we are unable to timely obtain landlord consent to expand into new rooms or categories or modify our merchandise offerings, we may be prevented from capitalizing on new revenue opportunities, implementing strategic initiatives, or optimizing our product assortment. In addition, any required negotiations with landlords could result in increased costs, lease amendments on less favorable terms, or operational disruptions.

Many of our leases also include relocation clauses that allow the landlord to move the location of our showrooms. If any of our showrooms are relocated, there can be no assurance that the new location will experience the same levels of customer traffic or success that the prior location experienced. In addition, as our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close showrooms in desirable locations. We may also be unable to enter into new leases on terms acceptable to us or in desirable locations. If any of the foregoing occur, our business, sales and results of operations may be harmed.

***Our business depends on effective marketing and increased customer traffic, and the failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our e-commerce and our omnichannel approach for shopping.***

We rely on a variety of marketing strategies to compete for customers and increase sales. If our competitors increase their spending on marketing, if our marketing is less effective than that of our competitors, or if we do not adequately leverage the technology and data analytics needed to generate concise competitive insight, our business, financial condition, operating results and prospects could be adversely affected. We use digital advertising to drive sales and traffic to our e-commerce sites. As a result, if the online market for our products does not continue to gain acceptance, a significant portion of our business may suffer. Our success will depend, in part, on our ability to attract consumers who have historically purchased furniture through traditional retailers. Furthermore, we may have to incur significantly higher and more sustained advertising and promotional expenditures in order to attract additional online consumers to our sites and convert them into purchasing customers online. We market our products globally through a range of advertising and promotional programs and campaigns, including social media. Customer response to our advertisements depends on merchandise assortment, availability and creative presentation, as well as the general retail sales environment, current domestic and global economic conditions and competition. If we do not successfully market our products or invest in the right campaigns or promotions for the right products at the right time, the lack of success or increased costs of promotional programs could have an adverse effect on our business, financial condition, and results of operations.

***Our increased use of social media poses reputational risks.***

As use of social media becomes more prevalent, our susceptibility to risks related to social media increases. The immediacy of social media precludes us from having real-time control over postings made regarding us via social media, whether matters of fact or opinion. Information distributed via social media could result in immediate unfavorable publicity we may not be able to reverse. Our ability to prevent Internet publication of false or misleading information regarding our products or the Company is limited. We rely in part upon third parties, such as social media influencers, to market its brand, and are unable to fully control their efforts. Influencers with whom we maintain a relationship could engage in behavior or use their platforms to communicate directly with our customers in a manner that reflects poorly on our brand, and these communications may be attributed to us or otherwise adversely affect us. It is not possible to prevent such behavior, and the precautions we take to prevent or detect this activity may not be effective. This unfavorable publicity could result in damage to our reputation and therefore have a material adverse effect on our business, financial condition, operating results and prospects.

***Our efforts to launch new products may not be successful.***

We plan to continue to expand our product line in the future. We may not be able to develop products which are attractive to our customers, and our costs to develop new products may be significant. It may take longer than we might expect for a product, even if ultimately successful, to achieve attractive sales results. We incur significant research and development and other expenditures in the pursuit of improvements and additions to our product line. The success of new product introductions depend on a number of factors including, but not limited to, timely and successful research and development, pricing, market and consumer acceptance, the ability to successfully identify and originate product trends, effective forecasting and management of product demand, purchase commitments and inventory levels, availability of products in appropriate quantities to meet anticipated demand, ability to obtain timely and adequate delivery of components for our new products from third-party suppliers, management of any changes in major component suppliers, management of

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manufacturing and supply costs, management of risks and delays associated with new product design and production ramp-up issues, logistics, and the risk that new products may have quality issues or other defects or bugs in the early stages of introduction including testing of new parts and features. Failure to successfully develop or market new products or delays in the development of new products could have a material adverse effect on our financial condition, results of operations and business.

***Our ability to attract customers to our showrooms depends heavily on successfully locating our showrooms in suitable locations. Any impairment of a showroom location, including any decrease in customer traffic, could cause our sales to be lower than expected.***

We plan to open new showrooms in high traffic urban and suburban locations and historically we have favored top tier mall locations near luxury and contemporary retailers that we believe are consistent with our key customers' demographics and shopping preferences. Our site selection has evolved to include lifestyle and strip shopping centers. Sales at these showrooms are derived, in part, from the volume of foot traffic in these locations. Showroom locations may become unsuitable due to, and our sales volume and customer traffic generally may be harmed by, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• economic downturns in a particular area;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition from nearby retailers selling similar products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changing consumer demographics in a particular market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changing preferences of consumers in a particular market;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the closing or decline in popularity of other businesses located near our store;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced customer foot traffic outside a showroom location; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• store impairments due to acts of God, climate-related events, pandemic, terrorism, protest or periods or civil unrest.

Even if a showroom location becomes unsuitable, we will generally be unable to cancel the long-term lease associated with such showroom.

***We may be unable to successfully open and operate new showrooms, which could have a material adverse effect on our business, financial condition, operating results and prospects.***

As of February 1, 2026, we had 278 showrooms. Our growth strategy relies in part on our ability to increase our showroom base. There can be no assurance that we will succeed in opening additional showrooms. If we are unable to successfully open and operate new showrooms, it could have a material adverse effect on our business, financial condition, operating results and prospects.

Our ability to successfully open and operate new showrooms depends on many factors, including, among other things, our ability to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify new markets where our products and brand image will be accepted or the performance of our showrooms will be successful;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• find available and suitable showroom locations that align with our consumer location strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• obtain labor and materials required to construct our showrooms that can achieve capital payback requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• obtain desired locations, including showroom size and adjacency, in targeted high traffic street and urban locations and top tier malls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adapt our showrooms to address public health crises;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• negotiate acceptable lease terms, including desired rent and tenant improvement allowances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• achieve brand awareness, affinity and purchaser intent in new markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• manage capital expenditures while designing new showrooms and remodeling our existing showrooms;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• hire, train and retain showroom associates and field management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assimilate new showroom associates and field management into our corporate culture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• source and supply sufficient inventory levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• employ the technologies needed to service a customer and complete a transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• successfully integrate new showrooms into our existing operations and information technology systems; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• have the capital necessary to fund new showrooms.

In addition, new showroom openings may negatively impact our financial results due to the effect of opening costs and lower sales during the initial period following opening. New showrooms, particularly those in new markets, build their brand recognition and customer base over time and, as a result, may have lower margins and incur higher operating expenses. Unavailability of desired showroom locations, delays in the acquisition or opening of new showrooms, delays or costs resulting from a decrease in commercial development due to capital restraints, difficulties in staffing and operating new showroom locations or a lack of customer acceptance of showrooms in new market areas may negatively impact our new showroom growth and the costs or the profitability associated with new showrooms. While we are seeking to mitigate some of the risks related to our mall-based showrooms by opening high traffic street and lifestyle center-based showrooms and continuing to build our online sales, there can be no assurance that this strategy will be successful or lead to greater sales.

***As we expand our showroom base and expend capital remodeling our existing showrooms, we may not be able to achieve the showroom sales growth rates that we have achieved in the past and there is no guarantee that this will result in incremental showroom traffic or sales, which could cause our share price to decline.***

As we expand our showroom base, we may not be able to achieve the showroom sales growth rates that we have achieved historically. If our showroom sales growth rates decline or fail to meet market expectations, our financial results could be impacted and the value of our common stock could decline. While our focus is to continue the expansion of our showrooms, this may result in the closure of underperforming showroom locations or locations with declining profitability in order to pursue more productive opportunities that are in line with our real estate strategy. The closure of these showrooms and transition to new showroom locations as part of our strategy may impact our sales and productivity.

In addition, the results of operations of our showroom locations have fluctuated in the past and can be expected to continue to fluctuate in the future. A variety of factors affect showroom sales, including, among others, consumer spending patterns, fashion trends, competition, current economic conditions, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our product assortment, the success of marketing programs, weather conditions and public health crises. If we misjudge the market for our products, we may have excess inventory of some of our products and miss opportunities for other products. These factors may cause our showroom sales results in the future to be materially lower than recent periods or our expectations, which could harm our results of operations and result in a decline in the price of our common stock.

We intend to continue remodeling our existing showroom base to reflect our new showroom design, and we intend to expend capital doing so. Our new showroom concept is designed to increase customer traffic and sales by emphasizing our unique product platform and using experiential technology. However, there is no guarantee that the capital spent on these remodeled showrooms will result in increased showroom traffic or increased sales.

***Our inability to successfully optimize our omni-channel operations and maintain a relevant and reliable omni-channel experience for our customers could have a material adverse effect on our growth strategy and our business, financial condition, operating results and prospects.***

Growing our business through our omni-channel operations is key to our growth strategy. Our goal is to offer our customers seamless access to our products across our channels, and our success depends on our ability to anticipate and implement innovations in sales and marketing strategies to appeal to existing and potential customers who increasingly rely on multiple channels, such as ecommerce, to meet their shopping needs. However, our omni-channel operations create additional complexities in our ability to manage inventory levels, as well as certain operational issues, including timely shipping and returns. Accordingly, our success depends to a large degree on continually evolving the processes and technology that enable us to plan and manage inventory levels and fulfill orders, address any related operational issues and further align channels to optimize our omni-channel operations. Additionally, while we interact with many of our

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customers through our showrooms, our customers are increasingly using computers, tablets and smartphones to make purchases online and to help them make purchasing decisions when in our showrooms. Our customers also engage with us online through our social media channels, including Facebook and Instagram, by providing feedback and public commentary about aspects of our business. Failure to enhance our technology and marketing efforts to align with our customers' developing shopping preferences could significantly impair our ability to meet our strategic business and financial goals. Moreover, if we do not successfully optimize our omni-channel operations, or if they do not achieve their intended objectives, it could have a material adverse effect on our business, financial condition, operating results and prospects.

***Purchasers of furniture may choose not to shop online, which could affect the growth of our business.***

The online market for furniture is less developed than the online market for apparel, consumer electronics and other consumer products in the United States. While we believe this market is growing, it still accounts for a relatively smaller percentage of the market as a whole. We are relying on online sales for our continued success and growth. If the online market for furniture does not continue to gain wider acceptance, our growth and business may suffer.

In addition, our success in the online market will depend, in part, on our ability to attract consumers who have historically purchased furniture through traditional retailers. We may have to incur significantly higher and more sustained advertising and promotional expenditures in order to attract additional online consumers to our website and convert them into purchasing customers. Specific factors that could impact consumers' willingness to purchase furniture from us online include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• concerns about buying products, and in particular larger products, with a limited physical storefront, face-to-face interaction with sales personnel and the ability to physically examine products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delivery time associated with online orders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or perceived lack of security of online transactions and concerns regarding the privacy of personal information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delayed shipments or shipments of incorrect or damaged products

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inconvenience associated with returning or exchanging items purchased online;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• usability, functionality and features of our website; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our reputation and brand strength.

If the online shopping experience we provide does not appeal to consumers or meet the expectations of existing customers, we may not acquire new customers at rates consistent with historical periods, and existing customers' buying patterns may not be consistent with historical buying patterns. If either of these events occur, our business, sales and results of operations may be harmed.

***We depend on our ecommerce business and failure to successfully manage this business and deliver a seamless omni-channel shopping experience to our customers could have an adverse effect on our growth strategy, business, financial condition, operating results and prospects.***

Sales through our ecommerce channel account for a significant portion of our revenues. Our business, financial condition, operating results and prospects are dependent on maintaining our ecommerce business. Dependence on our ecommerce business and the continued growth of our direct and retail channels subjects us to certain risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the failure to successfully implement new systems, system enhancements and Internet platforms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the failure of our technology infrastructure or the computer systems that operate our website and their related support systems, causing, among other things, website downtimes, telecommunications issues or other technical failures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the reliance on third-party computer hardware/software providers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• rapid technological change, including as a result of artificial intelligence;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• liability for online content;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• violations of federal, state, foreign or other applicable laws, including those relating to data protection;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• credit card fraud;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cyber security and vulnerability to electronic break-ins and other similar disruptions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diversion of traffic and sales from our stores.

Our failure to successfully address and respond to these risks and uncertainties could negatively impact sales, increase costs, diminish our growth prospects and damage the reputation of our brand, each of which could have a material adverse effect on our business, financial condition, operating results and prospects.

***Seasonal trends in our business create variability in our financial and operating results and place increased strain on our operations.***

Historically, we have experienced surges in online traffic and orders associated with promotional activities and seasonal trends. This activity may place additional demands on our technology systems and logistics network and could cause or exacerbate slowdowns or interruptions. Any such system, site or service interruptions could prevent us from efficiently receiving or fulfilling orders, which may reduce the volume or quality of goods we sell and may cause customer dissatisfaction and harm our reputation and brand.

***Climate change or measures to address climate change can negatively affect our business or damage our reputation***.

Climate change related events, including increased frequency or severity of natural disasters and other extreme weather conditions (including fluctuations in temperatures, water availability, floods, wildfires and resultant air quality impacts, other unusual or prolonged adverse weather patterns and power shutoffs associated with these events) and their impact on critical infrastructure, could pose risks to our supplier facilities, impair our production capabilities, and disrupt our supply chain. Climate change may also have a negative effect on the pricing and availability of wood sourced and used in the manufacture of our products. In addition, the impacts of climate change may alter customer preferences toward increased demand for climate-friendly products, resulting in a potential loss in market share if we fail to meet this demand. We have elected to set and publicly share corporate sustainability metrics related to reducing our impact on the environment. These statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Any failure to achieve or properly report on the targets set forth in our ESG Report, or any perception of failure to act responsibly in the areas in which we report, may harm our reputation with investors, customers and other third parties. This damage to our reputation may result in reduced demand for our products or increase the risk of litigation, all of which can negatively affect our business and operations.

***Significant merchandise returns could harm our business.***

We allow our customers to return products, subject to our return policy. If customer returns are significant, our business, financial condition, operating results and prospects could be harmed. Further, we modify our policies relating to returns from time to time, which may result in customer dissatisfaction or an increase in the number of product returns.

***We are subject to risks related to online payment methods.***

We accept payment using a variety of methods, including credit card, debit card, PayPal, Apple Pay, Amazon Pay, Affirm and gift cards. As we offer new payment options to consumers, we may become subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and increase our operating costs and we may be unable to pass through these costs to consumers. We are also subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply.

As our business changes, we may also be subject to different rules under existing standards, which may require new assessments that involve costs above what we currently pay for compliance. If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or have restrictions placed upon, our ability

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to accept credit card and debit card payments from consumers or our ability to facilitate other types of online payments. In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs. If any of these events were to occur, our business, financial condition and operating results could be materially adversely affected.

In addition, we occasionally receive orders placed with fraudulent credit card data. We may suffer losses as a result of orders placed with fraudulent credit card data even if the associated financial institution approved payment of the orders. Under current credit card practices, we may be liable for fraudulent credit card transactions. Our failure to adequately prevent fraudulent transactions could damage our reputation, result in litigation or regulatory action and lead to expenses that could harm our business, financial condition, operating results and prospects.

**Financial Risks**

***Our ability to raise capital in the future may be limited. Our inability to raise capital when needed could prevent us from growing and could have a material adverse effect on our business, financial condition, operating results and prospects.***

If we experience insufficient cash flow from operations to support our operating and capital needs, we will be required to raise additional capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all. We may sell common stock, preferred stock, convertible securities and other equity securities in one or more transactions at prices and in such a manner as we may determine from time to time. If we sell any such equity securities in subsequent transactions, investors may be materially diluted. Concerns over the economic impact of fluctuating inflation and interest rates, slower growth or recession, new or increased tariffs, decreased consumer confidence in the economy and armed hostilities, have caused extreme volatility in financial and capital markets, which has adversely impacted our stock price and may materially adversely affect our ability to access capital markets. Debt financing, if available, may involve restrictive covenants and could reduce, among other things, our operational flexibility. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures. In addition, debt financings may be blocked by our senior lender that provides an asset-backed revolving credit facility to fund our inventory purchases in advance of customer sales. Our lender has, and any subsequent senior lender likely will have, the right to consent to any new debt financing. There can be no assurance that our lender will provide such consent. Our inability to raise capital when needed could prevent us from growing and have a material adverse effect on our business, financial condition, operating results and prospects.

***We previously identified material weaknesses in our internal control over financial reporting that resulted in a restatement of our financial statements. Although these weaknesses have been remediated, if we experience additional material weaknesses or other deficiencies in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.***

We are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Section 404 of the Sarbanes-Oxley Act ("Section 404") requires that we furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment requires disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm also needs to attest to the effectiveness of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud. Any failure to maintain or implement required new or improved controls, or difficulties encountered in implementation could cause us to fail to meet our reporting obligations.

Our disclosure controls and procedures and internal controls over financial reporting have in the past been subject to deficiencies and material weaknesses which resulted in the restatement of our financial statements, and we cannot assure you that additional material weaknesses will not arise in the future. If other material weaknesses or other deficiencies arise in the future or if our independent registered public accounting firm is unable to express an opinion or expresses a qualified or adverse opinion about the effectiveness of our internal control over financial reporting, we may be unable to accurately report our future financial results, which could cause our future financial results to be materially misstated and require additional restatement. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements. We may also have difficulty accessing capital on favorable terms, or at all, be subject to fines, penalties or judgments, and incur reputational harm

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which may materially and adversely affect our business, results of operations and financial condition. Additionally, investors may lose confidence in our financial reporting and our stock price may decline as a result.

Additionally, we have in the past experienced high employee turnover in our accounting department which has resulted in significant time and expense relating to identifying, recruiting, hiring, relocating and integrating qualified individuals. High employee turnover of key personnel may deplete our institutional knowledge base, erode our competitiveness and impact our internal controls and our financial reporting. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to prevent or avoid potential future material weaknesses. Our failure to maintain the adequacy and effectiveness of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed, and we could fail to meet our financial and other reporting obligations.

***We face risks related to the restatement of our previously issued financial statements and the material weaknesses in our internal control over financial reporting.***

As previously disclosed, we reached a determination to restate our financial statements as of and for the year ended January 29, 2023, and the unaudited condensed quarterly financial information for the quarterly periods ended April 30, 2023, October 30, 2022, July 31, 2022 and May 1, 2022. As a result, we voluntarily self-reported to the SEC information concerning the internal investigation of these accounting matters. As a result of self-reporting, the Company was the subject of a non-public investigation by the SEC. The Company cooperated fully with the SEC in its investigation, and on October 29, 2024, the Company agreed to a settlement to resolve the claims against it. Without admitting or denying the SEC's allegations, we agreed to the entry of a final judgment ordering us to pay a $1.5 million civil penalty and imposing a permanent injunction against future violations of Section 17(a)(3) of the Securities Act of 1933 and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and the associated rules thereunder. As a result of the restatements, we have become subject to a number of additional risks and uncertainties, which may affect investor confidence in the accuracy of our financial disclosures and may raise reputational issues for our business. Specifically, we were involved in a putative securities class action that was filed against us and certain of our current and former officers, which we have settled. We were also involved in certain putative shareholder derivative actions filed on behalf of the Company against certain of its current and former officers and directors, which have concluded. We may in the future be subject to additional litigation or other disputes, which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement. We cannot assure that all of the risks and challenges described above will be eliminated or that general reputational harm will not persist. If one or more of the foregoing risks or challenges persist, our business, operations and financial condition are likely to be materially and adversely affected.

***We may be unable to accurately forecast our operating results and growth rate, which may adversely affect our reported results and stock price.***

We may not be able to accurately forecast our operating results and growth rate. We use a variety of factors in our forecasting and planning processes, including historical results, recent history and assessments of economic and market conditions. Our growth rates may not be sustainable, and our growth depends on the continued growth of demand for the products we offer. Lower demand caused by changes in customer preferences, a weakening of the economy or other factors may result in decreased revenues or growth. Furthermore, many of our expenses and investments are fixed, and we may not be able to adjust our spending in a timely manner to compensate for any unexpected shortfall in our operating results. Failure to accurately forecast our operating results and growth rate could cause our actual results to be materially lower than anticipated. If our growth rate declines as a result, investors' perceptions of our business may be adversely affected, and the market price of our common stock could decline.

***We may not be able to fully utilize our media credits if our third-party vendor ceases operations or if there are significant changes to our marketing strategy before the credits expire.***

The Company recognizes an asset for media credits obtained through barter transactions with a third-party vendor. We utilize these marketing credits as a percentage of certain advertising costs. If our third-party experiences a material adverse effect on their business, they may be unable to offer the level of advertising needed to fully utilize our remaining credits. If our business or the broader macroeconomic environment experiences a material change to advertising or marketing strategies, we may be unable to fully utilize our credits prior to expiration. If we determine through evaluation that we may not be able to fully utilize our remaining credits, the Company may be required to impair the remaining credits, and that impairment could have a material adverse effect on our financial statements.

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**Legal, Tax and Regulatory Risks**

***A significant disruption in, or breach in security of, our information technology systems or violations of data protection laws could have a material adverse effect on our business and reputation.*** 

In the ordinary course of business, we electronically collect, use and store confidential information, including proprietary business information belonging to us, our customers, suppliers, business partners and other third parties and personally identifiable information of our associates. We rely on information technology systems to protect this information and to keep financial records, process orders, manage inventory, coordinate shipments to customers, and operate other critical functions. There can be no assurance that the precautions of our partners, vendors, and other third parties on which we rely will be adequate to prevent significant damage, system failure or data loss. These precautions may change over time as laws and regulations regarding data privacy, security and protection of information change. Our information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, telecommunication failures and user errors. In addition, our remote hybrid working environment may exacerbate these and other operational risks. If we experience a disruption in our information technology systems, whether due to human error or misconduct, system errors or vulnerabilities in our or our third party service providers' products, systems or solutions, it could result in the loss of sales and customers and significant incremental costs, which could materially adversely affect our business.

We have been and may in the future be subject to security breaches caused by computer viruses and other malicious codes, malware, ransomware, phishing and other unauthorized access attempts, social engineering, denial-of-service attacks, illegal break-ins or hacking, sabotage, acts of vandalism by disgruntled associates or third parties, and other means of unauthorized access. The risk of a security breach or disruption, particularly through cyberattack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Additionally, because techniques used to obtain unauthorized access to systems and networks are increasingly sophisticated and constantly evolving, we may not be able to anticipate, detect, or prevent all attacks until after they have already been launched. For example, as artificial intelligence continues to evolve, cyber-attackers could also use artificial intelligence to develop malicious code and sophisticated phishing attempts. Our information technology network and systems have been and, we believe, continue to be under constant attack. Accordingly, despite our security measures or those of our third-party service providers, a security breach may occur, including breaches that we may not be able to detect. A breach of our or our third party service providers' information technology systems that results in the unauthorized release of confidential information could adversely affect our reputation, leading to a loss of our existing customers and potential future customers, cause financial losses due to remedial actions or potential liability, including punitive damages and regulatory fines or penalties, and materially increase the costs we incur to protect against these risks, including costs associated with insurance coverage and potential remediation measures. In addition, we have a large remote workforce and have implemented security and other policies to govern this population of associates. Although we continue to implement strong physical and cybersecurity measures to ensure that our business operations remain functional and to ensure uninterrupted service to our customers, our systems and our operations remain vulnerable to cyberattacks and other disruptions due to the fact that a significant portion of our employees work remotely, and we cannot be certain that our mitigation efforts will be effective.

***Failure to comply with personal data protection and privacy laws, and other laws and regulations applicable to our business, can adversely affect our business.***

We are subject to a variety of continuously evolving and developing laws and regulations in numerous state, federal and foreign jurisdictions regarding personal data protection and privacy laws, including the California Consumer Privacy Act, which was significantly modified by the California Privacy Rights Act, new privacy legislation passed in an increasing number of states, as well as the European Union's General Data Protection Regulation and China's Personal Information Protection Act. Failure to comply with these laws and regulations or to otherwise protect personal data from unauthorized access, use or other processing, could result in litigation, claims, legal or regulatory proceedings, inquiries or investigations, damage to our reputation, fines or penalties, all of which can adversely affect our business.

Our handling of data is subject to a variety of laws and regulations, including regulation by various government agencies, including the United States Federal Trade Commission (FTC) and various state, local and foreign regulators, and agencies. Our agreements with certain customers and business partners may also subject us to certain requirements related to our processing of personal information, including obligations to use industry-standard or reasonable security measures to safeguard personal information. We also expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine always predict the impact of such future laws, regulations, and standards may

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have on our business. We expect that existing laws, regulations, and standards may even be interpreted differently or inconsistently relative to each other in the future.

We are also subject to numerous laws and regulations including those relating to the production, sale, marketing, labeling, content, safety and distribution of our products, anti-corruption (such as the Foreign Corrupt Practices Act), employment and occupational health and safety, and environmental, social and governance matters and reporting, among others. Compliance with these laws and regulations is costly and complex given the nature of our business, our reliance on third party suppliers in foreign countries and our exposure to the laws of those countries, and the frequent adoption of new laws and regulations. Failure to comply with such laws or regulations can subject us to criminal or civil investigations or enforcement actions, fines, penalties, injunctions or restrictions, all of which can adversely affect our business.

***We may not be able to adequately protect our intellectual property rights.***

We regard our customer and prospect lists, trademarks, domain names, copyrights, patents and similar intellectual property as critical to our success, and we rely on trademark, copyright and patent law, trade secret protection, agreements and other methods with our associates and others to protect our proprietary rights. We might not be able to obtain protection in the United States or internationally for our intellectual property, and we might not be able to obtain effective intellectual property protection in countries in which we may in the future sell products. If we are unable to obtain such protection, our business, financial condition, operating results and prospects may be harmed. Additionally, associates, contractors or consultants may misappropriate or disclose our confidential information or intellectual property and agreements with those persons may not exist, may not cover the information or intellectual property in question, or may not be enforceable, all of which could have an adverse impact on our business, financial condition, operating results and prospects for the future.

The protection of our intellectual property rights may require the expenditure of significant financial, managerial and operational resources. Notwithstanding such expenditures, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing, misappropriating or disclosing confidential information or intellectual property. The validity, enforceability and infringement of our patents, trademarks, trade secrets and other intellectual property rights may be challenged by others in litigation or through administrative process, and we may not prevail in such disputes. Additionally, because the process of obtaining patent and trademark protection is expensive and time-consuming, we may not be able to prosecute all necessary or desirable patent and trademark applications at a reasonable cost or in a timely manner, and such applications may never be granted. Even if such applications issue as patents and trademarks, there can be no assurance that these patents and trademarks will adequately protect our intellectual property, as the legal standards relating to the validity, enforceability and scope of protection of patents, trademarks and other intellectual property rights are uncertain. If we are unable to adequately protect our intellectual property rights, our business, financial condition, operating results and prospects may be harmed.

We also might be required to spend significant resources to monitor and protect our intellectual property rights. We may not be able to discover or determine the extent of any infringement, misappropriation, disclosure or other violation of our intellectual property rights, confidential information or other proprietary rights. We may initiate claims or litigation against others for infringement, misappropriation or violation of our intellectual property rights, confidential information or other proprietary rights or to establish the validity of such rights. Despite our efforts, we may be unable to prevent third parties, former associates, consultants or independent contractors from infringing upon, misappropriating, disclosing or otherwise violating our intellectual property rights, confidential information and other proprietary rights. In addition, initiating claims or litigation against others for infringement, misappropriation, disclosure or violation of our intellectual property rights, confidential information or proprietary rights will be expensive, and may be prohibitively expensive. Any litigation or other dispute resolution mechanism, whether or not it is resolved in our favor, could result in significant expense to us and divert the efforts of our technical and management personnel, which may materially adversely affect our business, financial condition, operating results and prospects.

For example, we rely on trademark registrations and common law trademark rights to protect the distinctiveness of our brand. Additionally, there can be no assurance that the actions we have taken to establish and protect our trademarks will be adequate to prevent counterfeiting or infringement of our trademarks by others. Further, the laws of certain foreign countries may not protect the use of unregistered trademarks to the same extent as do the laws of the United States. As a result, international protection of our brand image may be limited, and our right to use our trademarks outside the United States could be impaired. Other persons or entities may have rights to trademarks that contain portions of our marks or may have registered similar or competing marks for furniture and/or accessories in foreign countries where our products are manufactured. There may also be other prior registrations of trademarks identical or similar to our trademarks in other foreign countries of which we are not aware. Accordingly, it may be possible for others to prevent the manufacture of our branded merchandise in certain foreign countries or the sale or exportation of our branded merchandise from certain

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foreign countries to the United States. If we were unable to reach a licensing arrangement with these parties, we might be unable to manufacture our products in those countries. Our inability to register our trademarks or purchase or license the right to use the relevant trademarks or logos in these jurisdictions could limit our ability to manufacture our products in less costly markets or penetrate new markets in jurisdictions outside the United States. The occurrence of any of the foregoing could harm our business.

***Evolving government regulations and investor expectations on environmental, social and governance factors may impose additional costs and expose us to new risks.***

There is uncertainty regarding potential laws, regulations and policies related to global environmental sustainability matters, climate change laws and regulations, including disclosure obligations and reporting on such matters. Changes in the legal or regulatory environment affecting ESG and sustainability disclosure, responsible sourcing, supply chain transparency, or environmental protection, among others, including regulations to limit carbon dioxide and other greenhouse gas emissions, to discourage the use of plastic or to limit or to impose additional costs on commercial water use may result in increased compliance costs for us and our business partners, all of which may negatively impact our results of operations, financial condition and cash flows. The expectations related to ESG and sustainability matters are rapidly evolving, and from time to time, we announce certain initiatives and goals, related to these matters. We could fail, or be perceived to fail to act responsibly, in our efforts, or we could fail in accurately reporting our progress on such initiatives and goals.

***We may be subject to product liability claims if people or property are harmed by the products we sell.***

We have not had any significant product liability claims to date. We place a high priority on designing our products to be safe for consumers and safety test our products in third-party laboratories. Still, the products we sell or have manufactured may expose us to product liability claims, litigation and regulatory action relating to personal injury, death and environmental or property damage. Some of our agreements with our suppliers and international manufacturers may not indemnify us from product liability for a particular supplier's or international manufacturer's products, or our suppliers or international manufacturers may not have sufficient resources or insurance to satisfy their indemnity and defense obligations. Although we maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. Any product liability claims asserted against us could, among other things, harm our reputation, damage our brand, cause us to incur significant costs, and have a material adverse effect on our business, results of operations and financial condition.

***Product warranty claims could have a material adverse effect on our business.***

We provide a lifetime warranty on the hard insert pieces of our Sactionals and the soft insert pieces of our Sacs and a limited warranty on our StealthTech components and covers which, if deficient, could lead to warranty claims. The Company maintains a reserve for warranty claims. However, there can be no assurance that our reserve for warranty claims will be adequate or additional warranty reserves will not be required due to failures in the technology in our StealthTech components or reduced warranty reserves may be required. Material warranty claims could, among other things, harm our reputation and damage our brand, cause us to incur significant repair and/or replacement costs, and have a material adverse effect on our business, financial condition, operating results and prospects.

***Product recalls and other claims could affect our financial position and results of operations.***

As a retailer of consumer products, we could be required to repurchase or recall one or more of our products if they are found to not meet quality or safety standards or be defective. A repurchase or recall of our products could be costly to us and could damage the reputation of our brands. If we were required to remove, or voluntarily remove our products from the market, our reputation could be impaired and our ability to sell affected inventory could be challenged. As a result, product recalls could have a material adverse effect on our business, results of operations and financial condition.

***We are and may in the future be subject to securities litigation, which is expensive and could divert management attention.***

We are involved in and may in the future be subject to litigation or other disputes, which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatements, market price volatility or other factors. The outcome of any such litigation is uncertain. Additionally, the market price of our common stock has been and may continue to be volatile. As a result, we may be the target of securities class action litigation in the future. The defense or settlement of this litigation and any future litigation could be time-consuming and

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expensive, divert the attention of management away from our business, and, if any litigation is adversely resolved against us, could have a material adverse effect on our financial condition. Any additional regulatory consequences, litigation, claim or dispute, whether successful or not, could subject us to additional costs, divert the attention of our management, or impair our reputation. Each of these consequences could have a material adverse effect on our business, results of operations and financial condition.

***Our insurance coverage may be insufficient to cover litigation or other claims asserted against us, which could have a material adverse effect on our business, financial condition and results of operation.***

We are subject to the risk of litigation from time to time, including relating to claims involving the federal and state securities laws, product liability claims, wage and hour claims, and pricing-related claims. Our insurance coverage may be insufficient to fully cover any such claims that may be asserted against us. Certain types of claims may not be covered by our insurance policies, may be subject to significant exclusions or limitations, or may exceed applicable policy limits, potentially exposing us to substantial cash exposure upon settlement or judgment. In addition, our insurers may deny coverage for certain claims, assert that exclusions apply, or become insolvent or otherwise unable to satisfy their coverage obligations. We may also be required to incur substantial deductibles or self-insured retentions before insurance coverage applies. Even where insurance coverage is available, we may incur significant legal fees and other costs in defending claims that are not fully reimbursed by insurance. If we are required to pay substantial amounts in connection with litigation or other claims that are not covered by insurance, or that exceed our coverage limits, such payments could materially and adversely affect our business, financial condition, cash flows, and results of operations.

Furthermore, we may be unable to obtain certain types or levels of commercial insurance at acceptable rates or on commercially reasonable terms, and in some cases coverage may be unavailable entirely. As a result, we may elect to self-insure for certain exposures, and if we experience a significant loss that exceeds our insurance coverage or our self-insurance reserves, our expenses could increase and our business, financial condition, and operating results could be materially adversely affected.

***Government regulation of the Internet and ecommerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.***

We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and ecommerce. Existing and future regulations and laws could impede the growth of the Internet, ecommerce or mobile commerce. These regulations and laws may involve taxes, tariffs, privacy and data security, anti-spam, consumer credit offerings, content protection, electronic contracts and communications (such as "do not call/mail" and text messaging requirements), consumer protection, use of artificial intelligence, Internet neutrality and gift cards. It is not clear how existing laws governing issues such as property ownership, sales and other taxes and consumer privacy apply to the Internet as the vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or ecommerce. It is possible that general business regulations and laws, or those specifically governing the Internet or ecommerce, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Additionally, we are subject to various federal, state and local consumer protection, pricing transparency and false advertising laws that regulate retailers and govern the marketing, advertising, promotion and sale of merchandise, including California's Consumer Legal Remedies Act.

Though we seek at all times to be in full compliance with all such laws, we cannot be sure that our practices have complied, comply or will comply fully with all such laws and regulations. Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business and proceedings or actions against us by governmental entities or others. Any such proceeding or action could damage our reputation and brand, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our website by consumers and result in the imposition of monetary liability. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any such laws or regulations. In particular, we are subject to a putative class action lawsuit in California related to the Company's pricing practices. The complaint generally alleges that the Company falsely advertised discounts on certain products. The plaintiff seeks, among other things, an unspecified amount of monetary damages, including treble damages, punitive damages, injunctive relief related to the Company's sales practices, and attorneys' fees, expert fees, and other expenses. Although we intend to defend ourselves vigorously against the claims asserted against us, we cannot predict the potential outcomes, cost and expenses associated with current and any future claims and lawsuits. Any damages, legal fees, or costs associated with litigating or resolving claims under any such laws could be material.

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***Our products or marketing activities may be found to infringe or violate the intellectual property rights of others.***

Third parties may assert claims or initiate litigation asserting that our products or our marketing activities infringe or violate such third parties' patent, copyright, trademark, trade secret or other intellectual property rights. The asserted claims and/or litigation could include claims against us or our suppliers alleging infringement of intellectual property rights with respect to our products or components of such products.

Regardless of the merit of the claims, if our products are alleged to infringe or violate the intellectual property rights of other parties, we could incur substantial costs and we may have to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• obtain licenses to use such intellectual property rights, which may not be available on commercially reasonable terms, or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• redesign our products or change our marketing activities to avoid infringement or other violations of the intellectual property rights of others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• stop using the subject matter protected by the intellectual property held by others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pay significant compensatory and/or enhanced damages, attorneys' fees and costs; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our time, financial and management resources.

If any of the foregoing occur, our business, financial condition, operating results and prospects could be materially adversely affected.

**Risks Related to Ownership of Our Common Stock**

***The trading price of the shares of our common stock has been and is likely to continue to be highly volatile.***

The stock market in general has experienced volatility that has often been unrelated to the operating performance of particular companies. The market price for our common stock may be influenced by many factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated fluctuations in our customer growth, sales, or other operating results;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• variations between our actual operating results and the expectations of securities analysts, investors, and the financial community;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information, or our failure to meet expectations based on this information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our Company, or our failure to meet these estimates or the expectations of investors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additional shares of our common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• announcements by us or our competitors of significant products, acquisitions, strategic partnerships, joint ventures, or capital commitments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• lawsuits threatened or filed against us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developments in new legislation or rulings by judicial or regulatory bodies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other events or factors, including those resulting from war or incidents of terrorism, or responses to these events; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the societal and economic impact of macroeconomic factors, public health crises and international conflicts.

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***If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.***

The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us or our business. If one or more of these securities or industry analysts ceases coverage of us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more of the analysts who cover us downgrades our common stock, publishes inaccurate or unfavorable research about our business or if our operating results do not meet their expectations, our stock price could decline.

***Future sales and issuances of our common stock or rights to purchase common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline.*** 

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. Future sales and issuances of our common stock or rights to purchase our common stock could result in substantial dilution to our existing stockholders. We may sell shares or other securities in the future that could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the current price per share of our common stock.

***We cannot guarantee that our share repurchase program will be fully consummated or will enhance long-term stockholder value, and share repurchases could increase the volatility of the trading price of our common stock and diminish our cash reserves.***

In June 2024, our Board of Directors approved a share repurchase program. As of February 1, 2026, $14.1 million remained available for future purchases under the share repurchase program. In March 2026, subsequent to the end of the fiscal period, our Board of Directors authorized the repurchase of an additional $40.0 million of our outstanding common stock under the share repurchase program. As a result, total remaining availability under the share repurchase program increased to $54.1 million. Our share repurchase program does not have an expiration date and does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares on any particular timetable or at all. There can be no assurance that we will repurchase shares at favorable prices or at all. Further, our share repurchases could affect the trading price of our common stock, increase its volatility, reduce the market liquidity for our stock and may be suspended or terminated at any time, which may result in a lower market valuation of our common stock. Repurchasing our common stock will reduce the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or business opportunities, and other general corporate purposes. The actual timing, number and value of shares repurchased will depend on various factors, including the market price of our common stock, trading volume, general market conditions and other corporate and economic considerations.

***Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our Company more difficult, and limit attempts by our stockholders to replace or remove our current management.***

Provisions in our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws include provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships by the affirmative vote of a majority of the directors or stockholders holding at least 25% of our issued and outstanding shares of common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that directors may only be removed by the majority of the shares of voting stock then outstanding entitled to vote generally in election of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• require two-thirds of all directors who constitute the board of directors or holders at least a majority of the issued and outstanding shares our common stock to adopt, amend or repeal provisions of our Amended and Restated Bylaws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• require 50% of the voting power of all then outstanding shares of our capital stock entitled to vote generally in election of directors to amend, alter or repeal, or adopt any provision inconsistent with certain sections of our Amended and Restated Certificate of Incorporation;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• except as otherwise provided by the terms of any series of preferred stock, special meetings of our stockholders may be called only by the board of directors, the chairperson of the board of directors, the chief executive officer, the president (in the absence of a chief executive officer) or at least 25% of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• restrict the forum for certain litigation against us to Delaware

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law ("DGCL"), which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any holder of at least 15% of our capital stock for a period of three years following the date on which the stockholder became a 15% stockholder.

***Actions of activist stockholders could be costly and time-consuming, divert management's attention and resources, and have an adverse effect on our business.***

Activist stockholders could take actions that could be costly and time-consuming to us, disrupt our operations, and divert the attention of our board of directors, management, and employees, such as public proposals and requests for potential nominations of candidates for election to our board of directors, requests to pursue a strategic combination or other transaction, or other special requests. If an activist campaign were to be launched against us, we may retain legal, financial and communications advisers, the costs of which could be significant and negatively impact our future financial results. In addition, perceived uncertainties as to our future direction, strategy, or leadership created as a consequence of activist stockholder initiatives could result in the loss of potential business opportunities, harm our ability to attract new or retain existing investors, customers, directors, employees or other partners, and cause our stock price to experience periods of volatility or stagnation.

***Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.***

Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case, to the fullest extent permitted by Delaware law. Pursuant to our charter, our directors will not be liable to us or any stockholders for monetary damages for any breach of fiduciary duty, except (i) for acts that breach his or her duty of loyalty to us or our stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; and (iii) as otherwise required pursuant to the DGCL. The amended and restated bylaws also require us, if so requested, to advance expenses that such director or officer incurred in defending or investigating a threatened or pending action, suit or proceeding, provided that such person will return any such advance if it is ultimately determined that such person is not entitled to indemnification by us. We have indemnified certain of our officers and directors and advanced expenses in connection with certain claims. These claims have and any claims for indemnification by our directors and officers in the future may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

***Our amended and restated bylaws designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and designates the federal district courts of the United States as the sole and exclusive forum for claims arising under the Securities Act, which, in each case could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers employees, agents or other stockholders.***

Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (a) derivative action or proceeding brought on our behalf; (b) action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee to us or our stockholders; (c) action asserting a claim arising under any provision of the DGCL or our amended and restated certificate of incorporation or amended and restated bylaws; or (d) action asserting a claim governed by the internal affairs doctrine.

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Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the federal district courts of the United States shall be the sole and exclusive forum for the resolution of any action asserting a claim arising under the Securities Act or the rules and regulations promulgated thereunder. Pursuant to the Exchange Act, claims arising thereunder must be brought in federal district courts of the United States.

To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in any shares of our capital stock shall be deemed to have notice of and consented to the forum provision in our amended and restated bylaws. This choice of forum provision may limit a stockholder's ability to bring a claim in a different judicial forum, including one that it may find favorable or convenient for a specified class of disputes with us or our directors, officers, other stockholders or employees, which may discourage such lawsuits, make them more difficult or expensive to pursue and result in outcomes that are less favorable to such stockholders than outcomes that may have been attainable in other jurisdictions.

By agreeing to this provision, however, stockholders are not deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. The enforceability of similar choice of forum provisions in other companies' certificates of incorporation or bylaws has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. If a court were to find the choice of forum provisions in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition and results of operations.

***We do not expect to declare any dividends in the foreseeable future.***

The continued operation and growth of our business will require substantial cash. Accordingly, we do not anticipate paying any cash dividends to holders of our common stock at any time in the foreseeable future. Any determination to pay future dividends will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, contractual restrictions, indebtedness, restrictions imposed by applicable law and other factors our board of directors deems relevant. Consequently, the only way our shareholders may be able to realize future gain on their investment is to sell their shares of common stock after the price of such shares has appreciated. However, there is no guarantee that our shares of common stock will appreciate in value.

***We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which would cause the price of our securities to decline.***

From time to time, we release earnings guidance in our earnings conference calls, earnings releases, or otherwise, regarding our future performance that represents our management's estimates as of the date of release. This guidance includes forward-looking statements based on projections prepared by our management. Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies on our business, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. Some of those key assumptions relate to the macroeconomic environment, including inflation and fluctuations in interest rates, which are inherently difficult to predict. We generally state possible outcomes as high and low ranges, which are intended to provide a sensitivity analysis as variables are changed but are not intended to imply that actual results could not fall outside of the suggested ranges. Furthermore, analysts and investors may develop and publish their own projections of our business, which may form a consensus about our future performance. Furthermore, if we make downward revisions of our previously announced guidance, if we withdraw our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our securities would decline. Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will not materialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results may vary from our guidance and the variations may be material. In light of the foregoing, investors are urged not to rely upon our guidance in making an investment decision regarding our securities. Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this "Risk Factors" section, many of which are outside of our control, could result in the actual operating results being different from our guidance, and the differences may be adverse and material.

**Item 1B. Unresolved Staff Comments.** 

None.

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**Item 1C. Cybersecurity.**

***Risk Management and Strategy***

We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws.

The Company is committed to protecting its information system and data from cyber threats. We utilize third party technical tools to control system access and filter, restrict and regulate content that may pose a material risk to the Company. Employees are required to use multi-factor authentication to access Company systems and undergo annual security training. Management is responsible for identifying, monitoring and mitigating the material risks facing the Company, including cybersecurity risks. Management provides regular reports to the Board to review our top risks, identify trends and help manage risk.

Our cybersecurity risk management and strategy is overseen by our Chief Technology and Digital Transformation Officer as well as other members of the senior leadership team at Lovesac. These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents and report to the Board on any appropriate items. Our Chief Technology and Digital Transformation Officer has over 25 years of experience managing information technology and cybersecurity matters and is responsible for assessing and managing these cybersecurity risks. Team members who support our information security program have relevant educational and industry experience.

***Cybersecurity Governance***

Cybersecurity is an important part of our risk management and an area of focus for our Board and management. Our Board of Directors is responsible for the risk oversight of the Company, including cybersecurity risks. The Board receives updates on a quarterly basis from senior management, including leaders from our Information Technology and Security, Risk Management, Finance, and Legal teams and our Chief Technology and Digital Transformation Officer regarding matters of cybersecurity. This includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives. The Audit Committee of the Company's Board of Directors oversees, among other things, the adequacy and effectiveness of the Company's internal controls, including internal controls designed to assess, identify, and manage material risks from cybersecurity threats. The Board of Directors, as a whole and at the Audit Committee level, oversee the most significant risks facing the Company and our processes to identify, prioritize, assess, manage and mitigate those risks.

The Audit Committee, which is comprised solely of independent directors, has been designated by our Board to oversee cybersecurity risk. The Audit Committee is informed of material risks from cybersecurity threats pursuant to the escalation criteria as set forth in the Company's disclosure controls and procedures. The Audit Committee receives reports, briefings and presentations from senior management, including our Chief Technology and Digital Transformation Officer, at periodic committee meetings, including, more in-depth presentations on specific areas of risk and regular enterprise risk management updates.

Although the Company endeavors to mitigate cybersecurity risks, the nature of our business exposes us to cybersecurity threats and attacks that can lead to the unauthorized acquisition or access, compromise, loss, misuse or theft of our data, including personal information, confidential information or intellectual property. Additional information on cybersecurity risks we face is discussed in Part I, Item 1A, "Risk Factors," under the heading "Legal, Tax and Regulatory Risks."

**Item 2. Properties.** 

Our primary offices are located in Stamford, Connecticut, where we occupy 28,000 square feet of office space pursuant to a lease agreement that expires in March 2040, and in Saint George, Utah, where we occupy 10,696 square feet of office space pursuant to a lease agreement that expires September 2031. We also lease retail space for our showrooms, in 278 locations throughout the majority of the U.S. states including Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and the District of Columbia.

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**Item 3. Legal Proceedings.**

See **Note 7. Commitments, Contingencies and Related Parties** to our financial statements within Part IV of this Annual Report on Form 10-K for a description of our legal proceedings, which is incorporated herein by reference.

**Item 4. Mine Safety Disclosures.**

Not applicable.

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**PART II.**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**

**Market Information**

Our common stock is traded on Nasdaq under the symbol "LOVE."

**Holders**

As of March 30, 2026, there were 109 holders of record of our common stock. Because shares of our common stock are held by depositories, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of record holders.

**Issuer Purchases of Equity Securities**

In June 2024, our board of directors authorized the repurchase of up to $40.0 million in shares of our outstanding common stock. During the thirteen weeks ended February 1, 2026, the Company did not repurchase shares of common stock. As of February 1, 2026, $14.1 million remained available for future purchases under the current share repurchase program.

On March 26, 2026, subsequent to the end of the fiscal period, our board of directors authorized the repurchase of an additional $40.0 million of our outstanding common stock under the share repurchase program. As a result, total remaining availability under the share repurchase program increased to $54.1 million.

**Dividends**

We have never paid cash dividends on any of our capital stock and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. We do not intend to pay cash dividends to holders of our common stock in the foreseeable future.

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**Lovesac Stock Performance Graph**

*The graph below shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our other filings under the Securities Act or the Exchange Act.*

The following graph compares the cumulative total stockholder return on our common stock (assuming reinvestment of dividends) with the cumulative total return on the Russell 2000 and the S&P 500 from January 31, 2021 through February 1, 2026. The graph assumes a $100 investment in each of our common stock, the Russell 2000 and the S&P 500 on January 31, 2021. The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Common Stock.

![Picture1.jpg](love-20260201_g1.jpg)

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **January 31,<br>2021** | **January 30,<br>2022** | **January 29,<br>2023** | **February 4,<br>2024** | **February 2,<br>2025** | **February 1,<br>2026** |
| The Lovesac Company common stock | 100.00 | 89.39 | 45.93 | 40.71 | 45.21 | 23.56 |
| Russell 2000 | 100.00 | 95.87 | 94.44 | 98.53 | 116.41 | 134.81 |
| S&P 500 | 100.00 | 121.00 | 112.98 | 139.92 | 172.78 | 201.03 |

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**Item 6. [Reserved]**

Not applicable.

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. As discussed in the section titled "Forward-Looking Statements," the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" under Part I, Item 1A in this Annual Report on Form 10-K.*

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*We operate on a 52- or 53-week fiscal year that ends on the Sunday closest to February 1. Each fiscal year generally is comprised of four 13-week fiscal quarters, although in the years with 53 weeks, the fourth quarter represents a 14-week period. Fiscal years 2026 and 2025 consisted of 52 weeks, and fiscal year 2024 consisted of 53 weeks.*

**Overview**

We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through our proprietary Designed for Life® approach which results in products that are built to last a lifetime and designed to evolve as our customers' lives do. Our current product offering is comprised of modular couches called Sactionals®, premium foam beanbag chairs called Sacs®, the immersive surround sound home theater system called StealthTech®, the PillowSac® Chair, the Sactionals Reclining Seat, a recently launched platform of premium seating called Snugg<sup>TM</sup>, and various accessories. Innovation is at the center of our design philosophy with all of our core products protected by a robust portfolio of utility and design patents. We market and sell our products through an omni-channel platform that includes direct-to-consumer touch points in the form of our own showrooms and online directly at www.lovesac.com. We believe that our ecommerce centric approach, coupled with our ability to deliver our large upholstered products through express couriers, is unique to the furniture industry.

**Our Operations**

See **Item 1. Business** for information on our products, customers, business model, channels, growth strategies, seasonality and other factors describing our business.

**Factors Affecting Our Operating Results**

While our growth strategy has contributed to our improving operating results, it also presents significant risks and challenges. The timing and magnitude of new showroom openings, existing showroom renovations, and marketing activities may affect our results of operations in future periods. These strategic initiatives will require substantial expenditures.

Other factors that could affect our results of operations in future periods include:

***Macroeconomic Factors***

There are a number of macroeconomic factors and uncertainties that in recent years have negatively affected the overall business environment and our business, including fluctuations in inflation, elevated interest rates, housing market conditions, consumer debt and available credit, increased tariff and trade restrictions, global conflicts and uncertainties in the global financial markets. These factors have had and continue to have a negative impact on us and the markets in which we operate, including the potential for an economic recession, a continued downturn in the housing market, and a reduction in consumer discretionary spending. We believe that these macroeconomic factors have contributed to the slowdown in demand that we have experienced in our business which may continue in future periods.

***Seasonality in Quarterly Results***

Our business is seasonal. As a result, our revenues fluctuate from quarter to quarter, which often affects the comparability of our results between periods. Working capital requirements are typically higher in the third fiscal quarter due to inventory built-up in advance of the holiday selling season. Net sales are historically higher in the fourth fiscal quarter due primarily to the impact of the holiday selling season. As such, results of a period shorter than a full year may not be indicative of results expected for the entire year.

***Competition***

The retail industry is highly competitive and retailers compete based on a variety of factors, including design, quality, price and customer service. Levels of competition and the ability of our competitors to attract customers through competitive pricing or other factors may impact our results of operations.

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**How We Assess the Performance of Our Business**

We consider a variety of financial and operating measures, including the following, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

*Net Sales*

Net sales reflect our sale of merchandise plus shipping and handling revenue less returns and discounts. Net sales made at Company operated showrooms, including shop-in-shops and pop-up-shops, and via the web are recognized, typically at the point of transference of title when the goods are shipped.

*Omni-channel Comparable Net Sales*

Omni-channel comparable net sales is a measure that highlights the performance of our existing locations and websites by measuring the change in net sales for a period over the comparable prior-period of equivalent length. Comparable net sales includes sales at all retail locations and online, open greater than 12 months (including remodels and relocations) and excludes closed showrooms. Comparable net sales is intended only as supplemental information and is not a substitute for net sales presented in accordance with US GAAP.

*New Customer*

We define a customer as new when the customer has completed a transaction at Lovesac either at a showroom or internet channel only for the first time. Repeat customers accounted for approximately 50.4% of all transactions in fiscal 2026 compared to 46.8% in fiscal 2025. We expect a healthy mix between new and repeat customers in our transaction mix as we spend on acquiring new customers.

*Cost of Merchandise Sold*

Cost of merchandise sold includes the direct cost of sold merchandise; inventory shrinkage; inventory adjustments due to obsolescence, including excess and slow-moving inventory and lower of cost or net realizable value reserves; inbound freight; freight costs to ship merchandise to our showrooms, and warehousing and all logistics costs associated with shipping product to our customers.

The primary drivers of our cost of merchandise sold are raw materials costs, labor costs in the countries where we source our merchandise, and logistics costs. We expect gross profit to increase to the extent that we successfully grow our net sales and continue to realize scale economics with our manufacturing partners. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and use product markdowns to efficiently sell these products. The timing and level of markdowns are driven primarily by customer acceptance of our merchandise.

We are pursuing initiatives to increase domestic manufacturing of Sactional (or certain products) as part of our broader supply chain strategy. These efforts are intended to enhance supply chain reliability, mitigate tariff and logistics risks, and improve operational efficiency through automation and reduced transportation distances. Implementation is expected to occur in phases and requires upfront investment and operational execution. The ultimate impact on our cost structure and operating results will depend on a number of factors, and there can be no assurance that anticipated benefits will be realized.

*Gross Profit*

Gross profit is equal to our net sales less cost of merchandise sold. Gross profit as a percentage of our net sales is referred to as gross margin. Certain competitors and other retailers may report gross profit differently than we do, by excluding from gross profit some or all of the costs related to their distribution network and instead including them in selling, general and administrative expenses. As a result, the reporting of our gross profit and profit margin may not be comparable to other companies.

*Selling, General and Administrative Expenses*

Selling, general and administrative expenses include all operating costs, other than advertising and marketing expense and depreciation and amortization, not included in cost of merchandise sold. These expenses include all payroll and payroll-related expenses; showroom expenses, including occupancy costs related to showroom operations, such as rent and common area maintenance; occupancy and expenses related to many of our operations at our headquarters, including utilities, equity based compensation, financing related expense; public company expenses; customer financing fees; and

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credit card transaction fees. Selling, general and administrative expenses as a percentage of net sales is usually higher in lower volume quarters and lower in higher volume quarters because a significant portion of the costs are relatively fixed.

Historically, our revenue growth has been accompanied by higher selling, general and administrative expenses, primarily related to payroll and rent. We expect these expenses to increase as we continue to grow our business. As net sales volumes expand, we anticipate leveraging selling, general and administrative expenses as a percentage of net sales. To support our growth, we continue to invest in infrastructure, including research and development for existing and future products and foundational technology initiatives. These investments may reduce the degree of expense leverage during the investment period. We expect to realize greater leverage following these investments, with the most significant impact expected in the fourth quarter.

*Advertising and Marketing Expense*

Advertising and marketing expense include digital, social, and traditional advertising and marketing initiatives, that cover all of our business channels. Advertising and marketing expenses are projected to rise as the Company drives net sales growth, supported by ongoing investments in these areas and careful monitoring to ensure efficient resource allocation.

**Basis of Presentation and Results of Operations**

The following discussion provides an analysis of the Company's financial condition and results of operations from management's perspective and should be read in conjunction with the financial statements and related notes included in this report. The discussion in this Form 10-K generally focuses on fiscal 2026 compared to fiscal 2025. A discussion of our results of operations and changes in financial condition for fiscal 2025 compared to fiscal 2024 has been excluded from this report, but can be found in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal 2025 Annual Report on Form 10-K.

***Results of Operations***

The following table summarizes key components of our results of operations for fiscal 2026, 2025, and 2024:

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| | **2026** | **2025** | **2024** | **2026** | **2025** | **2024** |
|  | *(In thousands)* | *(In thousands)* | *(In thousands)* | *(Percentage of net sales)* | *(Percentage of net sales)* | *(Percentage of net sales)* |
| Net sales |  |  |  |  |  |  |
| &nbsp;&nbsp;Showrooms | $468007 | $425863 | $437394 | 67.1% | 62.6% | 62.5% |
| &nbsp;&nbsp;Internet | 192349 | 196313 | 199778 | 27.6% | 28.8% | 28.5% |
| &nbsp;&nbsp;Other | 36759 | 58452 | 63093 | 5.3% | 8.6% | 9.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | 697115 | 680628 | 700265 | 100.0% | 100.0% | 100.0% |
| Cost of merchandise sold | 303900 | 282793 | 299222 | 43.6% | 41.5% | 42.7% |
| Gross profit | 393215 | 397835 | 401043 | 56.4% | 58.5% | 57.3% |
| Operating expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative expenses | 283987 | 281450 | 264314 | 40.7% | 41.4% | 37.7% |
| &nbsp;&nbsp;Advertising and marketing | 88659 | 88027 | 94050 | 12.7% | 12.9% | 13.4% |
| &nbsp;&nbsp;Depreciation and amortization | 15206 | 14710 | 12603 | 2.2% | 2.2% | 1.8% |
| Total operating expenses | 387852 | 384187 | 370967 | 55.6% | 56.5% | 52.9% |
| Operating income | 5363 | 13648 | 30076 | 0.8% | 2.0% | 4.4% |
| Interest and other income, net | 1302 | 2801 | 1747 | 0.2% | 0.4% | 0.2% |
| Net income before taxes | 6665 | 16449 | 31823 | 1.0% | 2.4% | 4.6% |
| Income tax expense | 2600 | 4893 | 7962 | 0.4% | 0.7% | 1.1% |
| Net income | $4065 | $11556 | $23861 | 0.6% | 1.7% | 3.5% |

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***Other Operational Data***

Our recent showroom growth is summarized in the following table:

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| | | |
|:---|:---|:---|
| **Showroom Count:** | **2026** | **2025** |
| Showrooms open at beginning of period | 257 | 230 |
| Showrooms opened | 28 | 39 |
| Showrooms closed | (7) | (12) |
| Showrooms open at end of period<sup>(1)</sup> | 278 | 257 |
| Showroom remodels | 2 |  |

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<sup>(1)</sup> During the second quarter of fiscal 2026, the Company made the decision to repurpose its 2 mobile concierges for marketing related activity and they are included in the showrooms closed within fiscal 2026. During the fourth quarter of fiscal 2026, the Company also closed its last remaining kiosk. Showrooms open as of fiscal 2025 include 1 kiosk and 2 mobile concierges.

**Fiscal 2026 Compared to Fiscal 2025**

***Net sales***

Net sales increased $16.5 million, or 2.4%, in fiscal 2026 compared to fiscal 2025 driven by new showroom openings and an increase of 0.5% in omni-channel comparable net sales. In fiscal 2026, the number of repeat customers increased by 8.8%, partially offset by a 5.6% decline in new customers. In the prior year, the number of repeat and new customers increased by 15.6% and 1.4%, respectively.

Showroom net sales increased $42.1 million, or 9.9% in fiscal 2026 compared to fiscal 2025.

Internet sales (sales made directly to customers through our ecommerce channel) decreased $4.0 million, or 2.0%, in fiscal 2026 compared to fiscal 2025.

Other sales, which include pop-up-shop sales, shop-in-shop sales, barter inventory transactions, and the Loved by Lovesac program, decreased $21.7 million, or 37.1% in fiscal 2026 compared to fiscal 2025. The decrease was primarily attributable to the Company's decision not to engage in any barter transactions during the current period, and the closure of the Company's Best Buy shop-in-shop locations as a result of the discontinuation of its partnership with Best Buy.

***Gross profit***

Gross profit decreased $4.6 million, or 1.2%, in fiscal 2026 compared to fiscal 2025. Gross margin decreased 210 basis points to 56.4% of net sales in fiscal 2026 from 58.5% of net sales in fiscal 2025. The decrease was primarily driven by increases of 180 basis points in inbound transportation and tariff costs and 40 basis points in outbound transportation and warehousing costs, partially offset by an increase of 10 basis points in product margin driven by price increases, cost reduction initiatives and concessions from our vendors in response to changes in the tariff environment, partially offset by higher promotional discounting.

***Selling, general and administrative expenses***

SG&A expenses increased $2.5 million, or 0.9%, in fiscal 2026 compared to fiscal 2025. The increase was primarily related to increases of $14.8 million in payroll, due to higher incentive compensation and an out-of-period $1.6 million expense pertaining to prior periods employee benefits, $1.8 million in rent, $1.5 million in impairment charges related to the Best Buy partnership discontinuation, and $1.6 million in other overhead costs. These increases were partially offset by decreases of $12.9 million in legal and professional fees, $2.4 million in equity-based compensation, and $1.9 million in credit card fees. As a percentage of net sales, SG&A was 40.7% in fiscal 2026, compared to 41.4% in fiscal 2025.

***Advertising and marketing expenses***

Advertising and marketing expenses increased $0.6 million, or 0.7%, in fiscal 2026 compared to fiscal 2025. Advertising and marketing expenses were 12.7% and 12.9% of net sales in fiscal 2026 and 2025, respectively.

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***Depreciation and amortization expenses***

Depreciation and amortization expenses increased $0.5 million, or 3.4%, in fiscal 2026 compared to fiscal 2025, primarily driven by capital investments for new showrooms.

***Interest and other income, net***

Interest and other income, net was $1.3 million in fiscal 2026 compared to $2.8 million in fiscal 2025. The decrease in interest income was primarily the result of lower cash deposits in the Company's interest-bearing bank accounts.

***Income tax expense***

Income tax expense was $2.6 million in fiscal 2026 compared to $4.9 million in fiscal 2025. The decrease is primarily driven by lower net income before taxes, partially offset by an increase in the effective tax rate.

**Liquidity and Capital Resources**

***General***

Our business relies on cash flows from operations, our revolving line of credit (see "Revolving Line of Credit" below) and securities issuances as our primary sources of liquidity. At February 1, 2026, we had $101.9 million in cash and cash equivalents. Our primary cash needs are for marketing and advertising, inventory, payroll, showroom rent, capital expenditures associated with opening new showrooms and updating existing showrooms, as well as infrastructure and information technology. We periodically use cash to repurchase shares of our common stock under our share repurchase program. The most significant components of our working capital are cash and cash equivalents, merchandise inventory, prepaid expenses, accounts payable, accrued expenses, customer deposits, and other current liabilities. We believe that cash expected to be generated from operations, the availability under our revolving line of credit and our existing cash balances are sufficient to meet working capital requirements and anticipated capital expenditures for the next 12 months. Our long-term cash needs will depend on, among other things, our profitability and our ability to manage working capital requirements, and if needed, our ability to identify and secure other potential sources to fund future working capital needs and meet capital expenditure requirements.

***Capital Expenditures***

Historically, we have invested significant capital expenditures in opening new showrooms and updating existing showrooms. These capital expenditures have increased in the past and may continue to increase in future periods as we open additional showrooms. Capital expenditures are anticipated to support our showroom growth, including capital outlays for leasehold improvements, fixtures and equipment, and the construction of new showrooms. Cash paid for capital expenditures was $24.0 million in fiscal 2026. Capital expenditures are projected to be in the range of $19.0 million to $25.0 million for fiscal 2027.

***Leases***

The majority of our operating leases relate to company showrooms. We also lease our corporate facilities. At February 1, 2026, we had aggregate lease obligations of $238.2 million, with $35.2 million payable within 12 months. See Note 6, "Leases" of the Notes to Financial Statements for further discussion of our operating leases.

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***Cash Flow Analysis***

The following table summarizes operating, investing, and financing activities for fiscal 2026, 2025, and 2024:

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| **in thousands** | **2026** | **2025** | **2024** |
| Net cash provided by operating activities | $49328 | $38977 | $76441 |
| Net cash used in investing activities | (24020) | (21517) | (29211) |
| Net cash used in financing activities | (7189) | (20762) | (3727) |
| Net change in cash and cash equivalents | 18119 | (3302) | 43503 |
| Cash and cash equivalents at end of period | $101853 | $83734 | $87036 |

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*Net cash provided by operating activities*

Net cash provided by operating activities consists primarily of net income adjusted for certain non-cash items, including depreciation and amortization, equity based compensation, non-cash lease expense, and deferred income taxes, and the effect of changes in working capital and other activities.

Net cash provided by operating activities was $49.3 million in fiscal 2026 compared to $39.0 million in the prior fiscal year. The increase was primarily driven by favorable working capital fluctuations, particularly from inventory management.

*Net cash used in investing activities*

Investing activities consist primarily of investments related to capital expenditures for new showroom openings and the acquisition of intangible assets.

Net cash used in investing activities was $24.0 million in fiscal 2026, primarily driven by one-time capital expenditures related to our new corporate office and continued investments in new showrooms. For fiscal 2025, net cash used in investing was $21.5 million, primarily driven by the continued investments in new showrooms.

*Net cash used in financing activities*

Financing activities consist primarily of repurchases of our common stock, taxes paid for the net settlement of equity awards and payment of deferred financing costs.

For fiscal 2026 and 2025, net cash used in financing activities was $7.2 million and $20.8 million, respectively, mainly due to the repurchase of our common stock and taxes paid for the net share settlement of equity awards.

***Revolving Line of Credit***

We are party to a credit agreement providing for an asset-based revolving credit facility with the lenders party thereto, and Wells Fargo Bank, National Association ("Wells Fargo Bank"), as administrative agent, that matures July 29, 2029. The maximum revolver commitment is $40.0 million, subject to borrowing base and availability restrictions, and also includes an uncommitted accordion feature that allows the Company, subject to certain customary conditions, to increase the size of the revolving credit facility by $10.0 million. Our credit agreement includes a $1,000,000 sublimit for the issuance of letters of credit and a $4,000,000 sublimit for swing line loans.

We are required to pay a commitment fee of 0.30% based on the daily unused portion of the credit facility. Amounts outstanding under the credit facility, at our option, bear interest at either a base rate or a term secured overnight term rate ("SOFR") based rate, plus, in either case, a margin determined by reference to our quarterly average excess availability under the credit facility and ranging from 0.50% to 0.75% for borrowings accruing interest at base rate and from 1.625% to 1.850% for borrowings accruing interest at term SOFR. Swing line loans will at all times accrue interest at a base rate plus the applicable margin. The lower margins described above will apply initially and will adjust thereafter from time to time based on the quarterly average excess availability under the credit facility.

For additional information regarding our line of credit with Wells Fargo Bank, see **Note 8. Financing Arrangements** in the Notes to the Financial Statements included in Part IV of this report. As of February 1, 2026 and February 2, 2025, the Company's borrowing availability under the line of credit was $36.0 million and $32.6 million, respectively, and there were no outstanding borrowings under our credit facility.

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***Share Repurchase***

On June 11, 2024, our board of directors authorized a share repurchase program for up to $40.0 million of shares of our common stock. Under the share repurchase program, we may repurchase shares from time to time in the open market, privately negotiated transactions and accelerated share repurchase. The timing, volume and nature of share repurchases, if any, will be at our sole discretion and will be dependent on market conditions, liquidity, applicable securities laws, and other factors. We may suspend or discontinue the share repurchase program at any time. We plan on funding any repurchases in the future with our current cash and cash equivalents and future cash flows.

During fiscal 2026 and 2025, we repurchased $6.0 million and $19.9 million, respectively, of shares of our common stock pursuant to the share repurchase program. As of February 1, 2026, we had $14.1 million available to repurchase shares pursuant to the share repurchase program. For additional information, see **Note 9. Stockholders' Equity** in the Notes to the Financial Statements included in Part IV of this report.

**Critical Accounting Policies and Estimates**

The management's discussion and analysis of financial condition and results of operations is based upon our financial statements, which have been prepared in conformity with US GAAP. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations and requires us to make significant estimates and assumptions. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions and conditions. In applying these policies, management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, and other various other assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. We continue to monitor the effects of global macroeconomic and geopolitical uncertainty, general market, political and economic conditions.

All of our significant accounting policies are outlined in **Note 1. Basis of Presentation, and Summary of Significant Accounting Policies** in the Notes to the Financial Statements included in Part IV of this report. There have been no material changes to the significant accounting policies during fiscal 2026.

***Barter Arrangements***

The Company has a bartering arrangement with a third-party vendor. The Company has the option to repurpose open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth. Barter transactions with commercial substance are recorded at a transaction price based on the estimated fair value of the non-cash consideration of the media credits to be received and the revenue is recognized when control of inventory is transferred, which is when the inventory is picked up in our warehouse. Fair value is estimated using various considerations, including the cost of similar media advertising if transacted directly, the expected sales price of product given up in exchange for the media credits, and the expected usage of media credits prior to expiration based on forecasted media spend subject to media credits under the barter arrangement. Projecting marketing spend requires estimating such factors as sales growth, inflation, overall economics of the retail industry, and changes in marketing trends, and are therefore subject to variability and difficult to predict, among other things. The Company recognizes an asset for media credits which is subsequently evaluated for impairment at each reporting period for any changes in circumstances. The Company did not recognize any barter sales in exchange for media credits in fiscal 2026. For fiscal 2025 and 2024, the Company recognized $9.0 million and $12.3 million, respectively, of barter sales in exchange for media credits. The Company had $32.6 million and $36.7 million of unused media credits as of February 1, 2026, and February 2, 2025, respectively, and did not recognize any impairment.

***Impairment of Long-Lived Assets***

Our long-lived assets consist of property and equipment and right-of-use assets from leases. Property and equipment includes leasehold improvements, and other tangible assets. Long-lived assets are reviewed for potential impairment at such time that events or changes in circumstances indicate that the carrying amount of an asset might not be recovered. We evaluate for impairment at the individual showroom level, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we will first compare the carrying amount of the assets to the future undiscounted cash flows for the respective long-lived asset. If the estimated future cash flows are less than the carrying amounts of the assets, an impairment loss is measured as the excess of the carrying value over its fair value. We estimate fair value based on future discounted cash flow based on our historical operations of the showroom and estimates of future showroom profitability and economic conditions. These estimates include factors such as sales growth,

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gross margin, employment costs, lease escalation, and overall macroeconomic conditions, and are therefore subject to variability. Actual future results may differ from those estimates. If required, an impairment loss is recorded for that portion of the assets' carrying value in excess of fair value.

In June 2025, the Company initiated a cost-reduction plan that included the termination of its partnership with Best Buy. As part of this plan, the Company executed the wind down of its Best Buy shop-in-shop locations (the "Exit"), with closures and related workforce reductions. This process was completed during the fourth quarter of fiscal 2026. As a result of the Exit, the Company assessed the recoverability of long-lived assets associated with the affected locations. For fiscal 2026, the Company recorded an impairment charge of $1.5 million related to property and equipment at the shop-in-shop locations. For additional information, see **Note 2. Property and Equipment, net** in the Notes to the Financial Statements included in Part IV of this report.

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

***Merchandise Inventories***

Merchandise inventories are comprised of finished goods which are carried at the lower of cost or net realizable value, including warehousing and capitalized freight costs. Cost is determined on a weighted-average method basis. Merchandise inventories consist primarily of foam filled furniture, sectional couches, and related accessories. We adjust our inventory for obsolescence based on historical trends, aging reports, specific identification and its estimates of future retail sales prices. In addition, we include capitalized freight and warehousing costs in inventory related to the finished goods in inventory.

***Operating Leases***

The Company determines if a long-term contractual obligation is a lease at inception. The majority of our operating leases relate to company showrooms. We also lease our corporate facilities. These operating leases expire at various dates through fiscal 2040. Showroom leases may include options that allow us to extend the lease term beyond the initial base period, subject to terms agreed upon at lease inception. Some leases also include early termination options, which can be exercised under specific conditions. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company records lease liabilities at the present value of the lease payments not yet paid, discounted at the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term. As the Company's leases do not provide an implicit interest rate, the Company uses an incremental borrowing rate based on the information available at possession date in determining the present value of lease payments.

We recognize operating lease cost over the estimated term of the lease, which includes options to extend lease terms that are reasonably certain of being exercised, starting when possession of the property is taken from the landlord, which normally includes a construction period prior to the showroom opening. When a lease contains a predetermined fixed escalation of the fixed rent, we recognize the related operating lease cost on a straight-line basis over the lease term. In addition, certain of our lease agreements include variable lease payments, such as payments based on a percentage of sales that are in excess of a predetermined level and/or increases based on a change in the consumer price index or fair market value. These variable lease payments are excluded from minimum lease payments and are included in the determination of net lease cost when it is probable that the expense has been incurred and the amount can be reasonably estimated. If an operating lease asset is impaired, the remaining operating lease asset will be amortized on a straight-line basis over the remaining lease term.

**Recent Accounting Pronouncements**

See **Note 1. Basis of Presentation, and Summary of Significant Accounting Policies** in the Notes to the Financial Statements included in Part IV of this report for a discussion of recently issued and adopted accounting standards.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk.**

In the normal course of business, we are exposed to a variety of market risks, including fluctuations in interest rates and inflation that could affect our financial position and results of operations.

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**Interest Rate Risk**

Cash and cash equivalents and short-term investments were held primarily in cash deposits, certificates of deposit, money market funds and investment grade corporate debt. The fair value of our cash, cash equivalents and short-term investments will fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest.

Interest on the revolving line of credit incurred pursuant to the credit agreements described herein would accrue at a floating rate based on a formula tied to certain market rates at the time of occurrence; however, we do not expect that any changes in prevailing interest rates will have a material impact on our results of operations.

**Inflation**

In fiscal 2026, we continued to see normalization of inflationary pressures in the supply chain. We continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. If our costs were to be subject to more significant inflationary pressures, we may not be able to fully offset such higher costs through price increases or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition and results of operations.

**Item 8. Financial Statements and Supplementary Data.**

The Company's financial statements are contained in the pages beginning on F-1, which appear at the end of this Annual Report on Form 10-K.

**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.**

None.

**Item 9A. Controls and Procedures** 

***Evaluation of Disclosure Controls and Procedures***

Our management, with the participation of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation, that our disclosure controls and procedures were effective as of February 1, 2026.

***Management's Annual Report on Internal Control over Financial Reporting***

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. The Company's internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Management assessed the effectiveness of the Company's internal control over financial reporting as of February 1, 2026. In making this assessment, management used the criteria set forth in 2013 by the Committee of Sponsoring Organizations of the Tread way Commission (COSO) in "Internal Control-Integrated Framework." Based on management's assessment using the COSO criteria, management has concluded that the Company's internal control over financial reporting was effective as of February 1, 2026. The effectiveness of our internal control over financial reporting as of February 1, 2026 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report, included within this Item 9A of this Annual Report on Form 10-K.

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***Changes in our Internal Control over Financial Reporting***

There were no changes in our internal control over financial reporting that occurred during the fourth fiscal quarter of the fiscal year ended February 1, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

***Limitations on the Effectiveness of Controls***

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and procedures or the Company's internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

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**<u>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>** 

To the Stockholders and the Board of Directors of The Lovesac Company

**Opinion on Internal Control over Financial Reporting**

We have audited the internal control over financial reporting of The Lovesac Company (the "Company") as of February 1, 2026, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 1, 2026, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the financial statements as of and for the year ended February 1, 2026, of the Company and our report dated April 2, 2026, expressed an unqualified opinion on those financial statements.

**Basis for Opinion** 

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying *Management's Annual Report on Internal Control over Financial Reporting*. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

**Definition and Limitations of Internal Control over Financial Reporting**

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Stamford, Connecticut

April 2, 2026

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**Item 9B. Other Information.**

*Trading Arrangements*

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

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.**

Not applicable.

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**PART III.**

**Item 10. Directors, Executive Officers and Corporate Governance.**

The following is a list of the names, ages and backgrounds of our current executive officers as of April 2, 2026:

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Age** | **Present Position** | **Business Experience** |
| Shawn Nelson | 49 | Chief Executive Officer and Director | Shawn Nelson founded Lovesac in 1998 and is currently serving as Chief Executive Officer of the Company and as a member of the Board of Directors. Mr. Nelson is the lead designer of the Company's patented products and leads sourcing, creative, design, public relations, investor relations and culture. In 2005, Mr. Nelson won Richard Branson's "The Rebel Billionaire" on Fox and continues to participate in ongoing TV appearances. Mr. Nelson has a Master's Degree in Strategic Design and Management and is a former graduate-level instructor at Parsons, The New School for Design in New York City. Mr. Nelson is also fluent in Mandarin. |
| Mary Fox | 53 | President | Mary Fox served as the President of Lovesac since November 2021. Previously, she served as General Manager for North America Consumer Products at BIC from 2018 to November 2021. Prior to joining BIC, she spent six years at L'Oréal in various roles within Ecommerce, New Business Development, and Business Transformation in the United States. Before L'Oréal, Ms. Fox held several senior leadership positions at Walmart in both the United States and International divisions. During her time as SVP Global Sourcing at Walmart, Ms. Fox co-founded the Sustainable Apparel Coalition in 2009 with Patagonia, which is now the leading global apparel, footwear, and textile coalition focused on sustainable production. Since 2023, Ms. Fox is a director of AF Ventures, a venture capital fund investing in high growth consumer products. She also served as a director of AF Acquisition Corp., a special purpose acquisition company targeting the better-for-you food and beverage, health and wellness, beauty, personal care and pet industries, from 2021 to 2023. She also served on the Board of Directors of The Lovesac Company from February 2020 to November 2021. Ms. Fox graduated from Coventry University in the United Kingdom and holds a degree in manufacturing engineering and business studies. |
| Keith Siegner | 51 | Executive Vice President, Chief Financial Officer and Treasurer | Keith Siegner served as Executive Vice President, Chief Financial Officer and Treasurer of The Lovesac Company since June 2023. From April 2021 to February 2023, he served as Chief Financial Officer of Vindex, LLC, a leading global esports technology and infrastructure company that was sold to Savvy Games Group in February 2023. In this role, Keith led global finance operations for Vindex and its subsidiaries, which included Esports Engine, Vindex Intelligence and Belong Gaming Arenas. Prior to joining Vindex he served as the Vice President, Investor Relations, Mergers & Acquisitions, and Treasurer at Yum! Brands (NYSE: YUM), which included leading the capital markets, global cash management, and risk finance teams, as well as several years in corporate strategy. Before YUM, Keith was a senior banking executive in equity research for over 15 years at UBS Securities, where he was Executive Director, and at Credit Suisse before that. He began his career at Arthur Andersen in the International Tax Consulting Division. Keith received Bachelor's and Master's accounting degrees from Wake Forest University, and is a Certified Financial Analyst Charterholder and a Certified Public Accountant (inactive). |

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We will file with the SEC a definitive proxy statement (the "2026 Proxy Statement") pursuant to Regulation 14A for our 2026 annual meeting of stockholders within 120 days of the fiscal year ended February 1, 2026. The additional information required by this Item will appear in the 2026 Proxy Statement and is incorporated by reference herein.

Our board of directors has adopted a Code of Business Conduct and Ethics applicable to all officers, directors and associates, which is available on our website (https://investor.lovesac.com) under "Governance." We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Conduct by posting such information on the website address and location specified above.

**Item 11. Executive Compensation.**

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

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

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

**Item 13. Certain Relationships and Related Transactions, and Director Independence.**

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

**Item 14. Principal Accountant Fees and Services.**

The information required by this item is incorporated by reference to the section entitled "Proposal 3: Ratification of the Appointment of Our Independent Registered Public Accounting Firm" in our Proxy Statement.

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**PART IV.**

**Item 15. Exhibits, Financial Statement Schedules.**

(a)The following documents are filed as part of this report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Financial Statements (see Part II, **Item 8. Financial Statements and Supplementary Data**)

---

| | |
|:---|:---|
| <u>[Report of Independent Registered Public Accounting Firm](#ib81ee4199c7d40c598eb42b95f65358d_136)</u> (PCAOB ID 34) | [F-](#ib81ee4199c7d40c598eb42b95f65358d_136)[3](#ib81ee4199c7d40c598eb42b95f65358d_136) |
| <u>[Balance Sheets – As of February 1, 2026 and February 2, 2025](#ib81ee4199c7d40c598eb42b95f65358d_139)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_139)[5](#ib81ee4199c7d40c598eb42b95f65358d_139) |
| <u>[Statements of Operations – Years Ended February 1, 2026, February 2, 2025, and February 4, 2024](#ib81ee4199c7d40c598eb42b95f65358d_142)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_142)[6](#ib81ee4199c7d40c598eb42b95f65358d_142) |
| <u>[Statements of Changes in Stockholders' Equity - Years Ended February 1, 2026, February 2, 2025, and February 4, 2024](#ib81ee4199c7d40c598eb42b95f65358d_145)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_145)[7](#ib81ee4199c7d40c598eb42b95f65358d_145) |
| <u>[Statements of Cash Flows - Years Ended February 1, 2026, February 2, 2025, and February 4, 2024](#ib81ee4199c7d40c598eb42b95f65358d_148)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_148)[8](#ib81ee4199c7d40c598eb42b95f65358d_148) |
| <u>[Notes to Financial Statements](#ib81ee4199c7d40c598eb42b95f65358d_151)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_151)[9](#ib81ee4199c7d40c598eb42b95f65358d_151) |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Financial Statement Schedules

Schedules have been omitted because they are not required or are not applicable or because the information required to be set forth therein either is not material or is included in the financial statements or notes thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Exhibits

See the Exhibit Index.

**Item 16. Form 10-K Summary.**

Optional disclosure not included in this Annual Report on Form 10-K.

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**EXHIBIT INDEX**

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| | | | | |
|:---|:---|:---|:---|:---|
| **Exhibit <br>Number** | **Description of Exhibit** | **Filed / Incorporated by Reference from Form \*\*** | **Incorporated by Reference from Exhibit Number** | **Date Filed** |
| 2.1 | <u>[Assignment and Assumption Agreement](https://www.sec.gov/Archives/edgar/data/0001701758/000121390018004741/fs12018ex2-1_thelovesac.htm)</u> | S-1 | 2.1 | 4/20/2018 |
| 3.1 | <u>[Amended and Restated Certificate of Incorporation](https://www.sec.gov/Archives/edgar/data/0001701758/000121390021031240/ea142262ex3-1_thelovesac.htm)</u>  | 8-K | 3.1 | 6/7/2021 |
| 3.2 | <u>[Amended and Restated Bylaws](https://www.sec.gov/Archives/edgar/data/1701758/000162828023040449/ex32amendedandrestatedby.htm)</u> | 8-K | 3.2 | 12/1/2023 |
| 4.5 | <u>[Description of the Company's securities registered pursuant to Section 12 of the Exchange Act of 1934](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/love-ex45descriptionofse.htm)</u> | 10-K | 4.5 | 4/11/2024 |
| 10.1† | <u>[Wells Fargo Credit Agreement](https://www.sec.gov/Archives/edgar/data/0001701758/000121390018004741/fs12018ex10-1_thelovesac.htm)</u>  | S-1 | 10.1 | 4/20/2018 |
| 10.2† | <u>[Amendment No. 6 to Credit Agreement between The Lovesac Company and Wells Fargo Bank, N.A.](https://www.sec.gov/Archives/edgar/data/1701758/000162828022007882/exhibit102lovesacwfamend.htm)</u> | 10-K | 10.2 | 3/30/2022 |
| 10.3± | <u>[Second Amended and Restated 2017 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1701758/000162828022016186/secondamendedandrestated.htm)</u> | 10-Q | 10.1 | 6/8/2022 |
| 10.4± | <u>[Amendment No. 1 to Second Amended and Restated 2017 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1701758/000162828023020672/exhibit101to2023annualmeet.htm)</u> | 8-K | 10.1 | 6/2/2023 |
| 10.5± | <u>[Form of Restricted Stock Units Agreement](https://www.sec.gov/Archives/edgar/data/0001701758/000121390018006772/fs12018a1ex10-3_lovesac.htm)</u> | S-1/A | 10.3 | 5/23/2018 |
| 10.6 | <u>[Amended and Restated Registration Rights Agreement](https://www.sec.gov/Archives/edgar/data/0001701758/000121390018004741/fs12018ex10-5_thelovesac.htm)</u> | S-1 | 10.5 | 4/20/2018 |
| 10.7± | <u>[Amended and Restated Employment Agreement dated March 23, 2023, by and between The Lovesac Company and Shawn Nelson](https://www.sec.gov/Archives/edgar/data/1701758/000162828023009725/love-fye202310xkex1016nels.htm)</u> | 10-K | 10.16 | 3/29/2023 |
| 10.8± | <u>[Employment Agreement between The Lovesac Company and Mary Fox, dated September 30, 2021](https://www.sec.gov/Archives/edgar/data/0001701758/000162828021022961/employmentagreement-execut.htm)</u> | 8-K | 10.1 | 11/12/2021 |
| 10.9± | <u>[Offer Letter between The Lovesac Company and Mary Fox, dated September 30, 2021](https://www.sec.gov/Archives/edgar/data/0001701758/000162828021022961/offerletter-newexecutiveof.htm)</u> | 8-K | 10.3 | 11/12/2021 |
| 10.10± | <u>[Form of Stock Option Award Agreement](https://www.sec.gov/Archives/edgar/data/0001701758/000121390021021548/f10k2021ex10-11_thelove.htm)</u> | 10-K | 10.11 | 4/14/2021 |
| 10.11± | <u>[The Lovesac Company Annual Incentive Compensation Plan](https://www.sec.gov/Archives/edgar/data/0001701758/000162828021024765/annualincentivecompensatio.htm)</u> | 10-Q | 10.1 | 12/9/2021 |
| 10.12± | <u>[The Lovesac Company Director Compensation Policy, as amended, dated February 2, 2025](https://www.sec.gov/Archives/edgar/data/1701758/000162828025017241/directorcompensationpoli.htm)</u> | 10-K | 10.16 | 4/10/2025 |
| 10.13† | <u>[Amendment No. 7 to Credit Agreement between The Lovesac Company and Wells Fargo Bank, N.A.](https://www.sec.gov/Archives/edgar/data/1701758/000162828023009725/love-fye202310xkex1022amen.htm)</u> | 10-K | 10.22 | 3/29/2023 |
| 10.14± | <u>[Offer Letter between the Company and Keith Siegner, dated May 1](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/keithofferfinalmay11th20.htm)[1](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/keithofferfinalmay11th20.htm)[, 2023](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/keithofferfinalmay11th20.htm)</u> | 10-K | 10.25 | 4/11/2024 |
| 10.15 | <u>[Retailer Program Agreement between Synchrony Bank (formerly GE Capital Retail Bank) and the Company (formerly SAC Acquisition LLC), dated April 1, 2013](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/sacacquisitionretailerag.htm)</u> | 10-K | 10.27 | 4/11/2024 |
| 10.16 | <u>[First Amendment to Retailer Program Agreement between Synchrony Bank (formerly GE Capital Retail Bank) and the Company (formerly SAC Acquisition LLC), dated September 1, 2014](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/sacacquisition1stamend9-.htm)</u> | 10-K | 10.28 | 4/11/2024 |
| 10.17 | <u>[Second Amendment to Retailer Program Agreement between Synchrony Bank (formerly SAC Acquisition LLC), dated May 11, 2018, and effective as of January 1, 2018](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/lovesacsynchronyamendmen.htm)</u> | 10-K | 10.29 | 4/11/2024 |
| 10.18 | <u>[Third Amendment to Retailer Program Agreement between Synchrony Bank and the Company (formerly SAC Acquisition LLC), dated March 24, 2023, and effective as of January 1, 2023](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/lovesac3rdamendment323.htm)</u> | 10-K | 10.30 | 4/11/2024 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Exhibit <br>Number** | **Description of Exhibit** | **Filed / Incorporated by Reference from Form \*\*** | **Incorporated by Reference from Exhibit Number** | **Date Filed** |
| 10.19 | <u>[Fourth](thelovesaccompany_synchr.htm)[Amendment to Retailer Program Agreement between Synchrony Bank and the Company (formerly SAC Acquisition LLC), dated](thelovesaccompany_synchr.htm)[November 4, 2025](thelovesaccompany_synchr.htm)[, and effective as of](thelovesaccompany_synchr.htm)[October 1, 2025](thelovesaccompany_synchr.htm)</u> | Filed herewith. |  |  |
| 10.20<u>[†](https://www.sec.gov/Archives/edgar/data/1701758/000101376224002912/ea021025501ex10-1_thelovesac.htm)</u> | <u>[Eighth Amendment to Credit Agreement, dated as of September 7, 2023, by and among The Lovesac Company, Wells Fargo Bank, National Association, as agent, swing line lender and L/C issuer, and the other lenders party thereto.](https://www.sec.gov/Archives/edgar/data/1701758/000162828025017241/amendmentno8lovesac-exec.htm)</u> | 10-K | 10.24 | 4/10/2025 |
| 10.21<u>[†](https://www.sec.gov/Archives/edgar/data/1701758/000101376224002912/ea021025501ex10-1_thelovesac.htm)</u> | <u>[Ninth Amendment to Credit Agreement, dated as of July 29, 2024, by and among The Lovesac Company, Wells Fargo Bank, National Association, as agent, swing line lender and L/C issuer, and the other lenders party thereto.](https://www.sec.gov/Archives/edgar/data/1701758/000101376224002912/ea021025501ex10-1_thelovesac.htm)</u> | 8-K | 10.1 | 7/31/2024 |
| 10.22± | <u>[Amendment No. 2 to the Second Amended and Restated 2017 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1701758/000162828024028320/amendmentno2tosecondamende.htm)</u> | 8-K | 10.1 | 6/14/2024 |
| 10.23± | <u>[Cash-Based Award Agreement](https://www.sec.gov/Archives/edgar/data/1701758/000162828025030861/cash-basedawardagreement.htm)</u> | 10-Q | 10.1 | 6/12/2025 |
| 10.24± | <u>[Am](siegneramendedandrestate.htm)[ended and Restated Employ](siegneramendedandrestate.htm)[ment A](siegneramendedandrestate.htm)[greement](siegneramendedandrestate.htm)[,](siegneramendedandrestate.htm)[dated as of February 23, 20](siegneramendedandrestate.htm)[26, between](siegneramendedandrestate.htm)[The Lovesac](siegneramendedandrestate.htm)[Company and Keith Siegner](siegneramendedandrestate.htm)</u> | Filed herewith. |  |  |
| 19.1 | <u>[The Lovesac Company Insider Trading Policy, as amended September 9, 2025](insidertradingpolicyamen.htm)</u> | Filed herewith. |  |  |
| 21.1 | <u>[List of Subsidiaries](https://www.sec.gov/Archives/edgar/data/0001701758/000121390021021548/f10k2021ex21-1_thelove.htm)</u> | 10-K | 21.1 | 4/14/2021 |
| 23.1 | <u>[Consent of Deloitte & Touche LLP](fy26ex231deloitteconsent.htm)</u> | Filed herewith. |  |  |
| 31.1 | <u>[Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended](fy2610-kex311.htm)</u> | Filed herewith. |  |  |
| 31.2 | <u>[Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended](fy2610-kex312.htm)</u> | Filed herewith. |  |  |
| 32.1\* | <u>[Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended](fy2610-kex321.htm)</u> | Filed herewith. |  |  |
| 32.2\* | <u>[Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended](fy2610-kex322.htm)</u> | Filed herewith. |  |  |
| 97.1\* | <u>[The Lovesac Dodd-Frank Clawback Policy](https://www.sec.gov/Archives/edgar/data/1701758/000162828024015804/dodd-frankclawbackpolicy.htm)</u> | 10-K | 97.1 | 4/11/2024 |
| 101.INS | XBRL Instance Document |  |  |  |
| 101.SCH | XBRL Taxonomy Extension Schema Document |  |  |  |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document |  |  |  |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |  |  |  |

---

± Indicates a management contract or compensatory plan.

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

† Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon its request.

\* This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**SIGNATURES** 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | **The Lovesac Company** | **The Lovesac Company** |
| | By: | /s/ Shawn Nelson |
| | | Shawn Nelson |
| Date: April 2, 2026 |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |
|  | By: | /s/ Keith Siegner |
|  |  | Keith Siegner |
| Date: April 2, 2026 |  | Executive Vice President and <br> Chief Financial Officer |
|  |  | (Principal Financial Officer and<br> Principal Accounting Officer) |

---

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**POWER OF ATTORNEY**

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Shawn Nelson and Keith Siegner, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | |
|:---|:---|
| /s/ Shawn Nelson | April 2, 2026 |
| Shawn Nelson |  |
| Chief Executive Officer and Director |  |
| (Principal Executive Officer) |  |
| /s/ Keith Siegner | April 2, 2026 |
| Keith Siegner |  |
| Executive Vice President and |  |
| Chief Financial Officer |  |
| (Principal Financial Officer and Principal Accounting Officer) |  |
| /s/ Andrew Heyer | April 2, 2026 |
| Andrew Heyer |  |
| Chairman and Director |  |
| /s/ Walter McLallen | April 2, 2026 |
| Walter McLallen |  |
| Director |  |
| /s/ Sharon M. Leite | April 2, 2026 |
| Sharon M. Leite |  |
| Director |  |
| /s/ Shirley Romig | April 2, 2026 |
| Shirley Romig |  |
| Director |  |
| /s/ Alan Boehme | April 2, 2026 |
| Alan Boehme |  |
| Director |  |
| /s/ Wan Ling Martello | April 2, 2026 |
| Wan Ling Martello |  |
| Director |  |
| /s/ Vineet Mehra | April 2, 2026 |
| Vineet Mehra |  |
| Director |  |

---

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**THE LOVESAC COMPANY**

**FINANCIAL STATEMENTS**

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

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**THE LOVESAC COMPANY**

**CONTENTS**

---

| | |
|:---|:---|
| **<u>[Report of Independent Registered Public Accounting Firm (PCAOB ID](#ib81ee4199c7d40c598eb42b95f65358d_136)</u><u>34</u><u>[)](#ib81ee4199c7d40c598eb42b95f65358d_136)</u>** | [F-](#ib81ee4199c7d40c598eb42b95f65358d_136)[3](#ib81ee4199c7d40c598eb42b95f65358d_136) |
| **Financial Statements** |  |
| &nbsp;&nbsp;&nbsp;<u>[Balance Sheets](#ib81ee4199c7d40c598eb42b95f65358d_139)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_139)[5](#ib81ee4199c7d40c598eb42b95f65358d_139) |
| &nbsp;&nbsp;&nbsp;<u>[Statements of Operations](#ib81ee4199c7d40c598eb42b95f65358d_142)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_142)[6](#ib81ee4199c7d40c598eb42b95f65358d_142) |
| &nbsp;&nbsp;&nbsp;<u>[Statements of Changes in Stockholders' Equity](#ib81ee4199c7d40c598eb42b95f65358d_145)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_145)[7](#ib81ee4199c7d40c598eb42b95f65358d_145) |
| &nbsp;&nbsp;&nbsp;<u>S[tatement](#ib81ee4199c7d40c598eb42b95f65358d_148)</u><u>[s of Cash Flows](#ib81ee4199c7d40c598eb42b95f65358d_148)</u> | [F-](#ib81ee4199c7d40c598eb42b95f65358d_148)[8](#ib81ee4199c7d40c598eb42b95f65358d_148) |
| **<u>[Notes to the Financial Statements](#ib81ee4199c7d40c598eb42b95f65358d_151)</u>** | [F-](#ib81ee4199c7d40c598eb42b95f65358d_151)[9](#ib81ee4199c7d40c598eb42b95f65358d_151) |

---

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**<u>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

To the Stockholders and the Board of Directors of The Lovesac Company

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of The Lovesac Company (the "Company") as of February 1, 2026 and February 2, 2025, the related statements of operations, changes in stockholders' equity, and cash flows, for each of the three years in the period ended February 1, 2026, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 1, 2026 and February 2, 2025, and the results of its operations and its cash flows for each of the three years in the period ended February 1, 2026, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of February 1, 2026, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 2, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Barter Arrangements — Refer to Note 1 to the financial statements***

*Critical Audit Matter Description*

The Company has a bartering arrangement with a third-party vendor, in which the Company repurposes returned open-box inventory in exchange for media credits. Barter sale transactions with commercial substance are recorded at a transaction price based on the estimated fair value of the non-cash consideration of the media credits to be received and the revenue is recognized when control of inventory is transferred, which is when the inventory is picked up from the Company's warehouse. Fair value is estimated using various considerations including the cost of similar media advertising if transacted directly, the expected sales price of product given up in exchange for the media credits, and the expected usage of media credits prior to expiration based on a forecasted media spend subject to media credits under the barter arrangement. For the year ended February 1, 2026, the Company did not recognize any new barter sales in exchange for media credits. The Company recognizes an asset for media credits which is subsequently evaluated for impairment at each reporting period for

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

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

We identified the recoverability of the barter credits as a critical audit matter because of the significant estimate and assumptions management makes to determine the forecasted media spend used to evaluate the unused media credits for potential impairment. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management's estimate of the future utilization of media credits.

***How the Critical Audit Matter Was Addressed in the Audit***

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We read the underlying barter transaction agreements

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

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

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

/s/ Deloitte & Touche LLP

Stamford, Connecticut

April 2, 2026

We have served as the Company's auditor since fiscal 2023.

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**THE LOVESAC COMPANY**

**BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
| (amounts in thousands, except share and per share amounts) | **February 1, 2026** | **February 2, 2025** |
| **Assets** |  |  |
| **Current Assets** |  |  |
| Cash and cash equivalents | $101853 | $83734 |
| Trade accounts receivable, net | 11733 | 16781 |
| Merchandise inventories, net | 106317 | 124333 |
| Prepaid expenses | 10473 | 14807 |
| Other current assets | 6260 | 6942 |
| **Total Current Assets** | 236636 | 246597 |
| Property and equipment, net | 86400 | 77990 |
| Operating lease right-of-use assets | 163322 | 157750 |
| Goodwill | 144 | 144 |
| Intangible assets, net | 2373 | 1586 |
| Deferred tax asset | 13387 | 15277 |
| Other assets | 32420 | 32906 |
| **Total Assets** | $534682 | $532250 |
| **Liabilities and Stockholders' Equity** |  |  |
| **Current Liabilities** |  |  |
| Accounts payable | $43736 | $51814 |
| Accrued expenses | 38788 | 51986 |
| Payroll payable | 21936 | 9501 |
| Customer deposits | 11544 | 11250 |
| Current operating lease liabilities | 24111 | 22662 |
| Sales taxes payable | 6996 | 7897 |
| **Total Current Liabilities** | 147111 | 155110 |
| Operating lease liabilities, long-term | 168400 | 160361 |
| Income tax payable, long-term | 464 | 424 |
| Line of credit |  |  |
| **Total Liabilities** | $315975 | $315895 |
| **Commitments and Contingencies (See Note 7)** |  |  |
| **Stockholders' Equity** |  |  |
| Preferred stock $0.00001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of February 1, 2026 and February 2, 2025. |  |  |
| Common stock $0.00001 par value, 40,000,000 shares authorized, 14,617,238 shares issued and outstanding as of February 1, 2026 and 14,786,934 shares issued and outstanding as of February 2, 2025. |  |  |
| Additional paid-in capital | 194843 | 190510 |
| Accumulated earnings | 23864 | 25845 |
| **Stockholders' Equity** | 218707 | 216355 |
| **Total Liabilities and Stockholders' Equity** | $534682 | $532250 |

---

***The accompanying notes are an integral part of these financial statements***

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**THE LOVESAC COMPANY**

**STATEMENTS OF OPERATIONS**

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

---

| | | | |
|:---|:---|:---|:---|
| (amounts in thousands, except per share data and share amounts) | **2026** | **2025** | **2024** |
| Net sales | $697115 | $680628 | $700265 |
| Cost of merchandise sold | 303900 | 282793 | 299222 |
| Gross profit | 393215 | 397835 | 401043 |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative expenses | 283987 | 281450 | 264314 |
| &nbsp;&nbsp;Advertising and marketing | 88659 | 88027 | 94050 |
| &nbsp;&nbsp;Depreciation and amortization | 15206 | 14710 | 12603 |
| Total operating expenses | 387852 | 384187 | 370967 |
| Operating income | 5363 | 13648 | 30076 |
| Interest and other income, net | 1302 | 2801 | 1747 |
| Net income before taxes | 6665 | 16449 | 31823 |
| Income tax expense | 2600 | 4893 | 7962 |
| Net income | $4065 | $11556 | $23861 |
| Net income per common share: |  |  |  |
| &nbsp;&nbsp;Basic | $0.28 | $0.75 | $1.55 |
| &nbsp;&nbsp;Diluted | $0.28 | $0.69 | $1.45 |
| Weighted average shares outstanding: |  |  |  |
| &nbsp;&nbsp;Basic | 14684339 | 15502469 | 15427975 |
| &nbsp;&nbsp;Diluted | 14695579 | 16791471 | 16460383 |

---

***The accompanying notes are an integral part of these financial statements***

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**THE LOVESAC COMPANY**

 **STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Common** | **Common** | **Additional Paid-in Capital** | **Accumulated Earnings** | **Total Shareholders' Equity** |
|<br>(amounts in thousands, except share amounts) | **Shares** | **Amount** | **Additional Paid-in Capital** | **Accumulated Earnings** | **Total Shareholders' Equity** |
| **Balance - January 29, 2023** | 15195698 | $— | $182554 | $10540 | $193094 |
| Net income |  |  |  | 23861 | 23861 |
| Equity-based compensation |  |  | 4216 |  | 4216 |
| Vested restricted stock units | 219074 |  |  |  |  |
| Taxes paid for net share settlement of equity awards |  |  | (3675) |  | (3675) |
| Exercise of warrants | 74592 |  |  |  |  |
| **Balance - February 4, 2024** | 15489364 |  | 183095 | 34401 | 217496 |
| Net income |  |  |  | 11556 | 11556 |
| Equity-based compensation |  |  | 7945 |  | 7945 |
| Vested restricted stock units | 75283 |  |  |  |  |
| Repurchases of common stock | (777713) |  |  | (20112) | (20112) |
| Taxes paid for net share settlement of equity awards |  |  | (530) |  | (530) |
| **Balance - February 2, 2025** | 14786934 |  | 190510 | 25845 | 216355 |
| Net income |  |  |  | 4065 | 4065 |
| Equity-based compensation |  |  | 5510 |  | 5510 |
| Vested restricted stock units | 136629 |  |  |  |  |
| Repurchases of common stock | (306325) |  |  | (6046) | (6046) |
| Taxes paid for net share settlement of equity awards |  |  | (1177) |  | (1177) |
| **Balance - February 1, 2026** | 14617238 | $— | $194843 | $23864 | $218707 |

---

***The accompanying notes are an integral part of these financial statements***

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**THE LOVESAC COMPANY**

 **STATEMENTS OF CASH FLOWS**

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

---

| | | | |
|:---|:---|:---|:---|
| (amounts in thousands) | **2026** | **2025** | **2024** |
| **Cash Flows from Operating Activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $4065 | $11556 | $23861 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization of property and equipment | 14887 | 14292 | 12174 |
| &nbsp;&nbsp;&nbsp;Amortization of other intangible assets | 319 | 418 | 429 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred financing fees | 73 | 127 | 159 |
| &nbsp;&nbsp;&nbsp;Net loss on disposal of property and equipment | 466 | 140 | 235 |
| &nbsp;&nbsp;&nbsp;Gain on lease termination | (167) |  | (131) |
| &nbsp;&nbsp;&nbsp;Impairment of long-lived assets | 1541 |  |  |
| &nbsp;&nbsp;&nbsp;Equity based compensation | 5510 | 7945 | 4216 |
| &nbsp;&nbsp;&nbsp;Non-cash lease expense | 27136 | 25171 | 22631 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | 1890 | (4474) | (2126) |
| &nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade accounts receivable | 5048 | (3318) | (4360) |
| &nbsp;&nbsp;&nbsp;Merchandise inventories | 18016 | (25893) | 21187 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 4955 | (6064) | (164) |
| &nbsp;&nbsp;&nbsp;Other assets | 486 | (4241) | (6301) |
| &nbsp;&nbsp;&nbsp;Accounts payable | (8887) | 22392 | 2669 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other payables | (1467) | 17507 | 14020 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | (24877) | (19546) | (14007) |
| &nbsp;&nbsp;&nbsp;Customer deposits | 294 | 2993 | 1497 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 40 | (28) | 452 |
| **Net cash provided by operating activities** | 49328 | 38977 | 76441 |
| **Cash Flows from Investing Activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | (23135) | (21026) | (28736) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments for patents and trademarks | (885) | (491) | (475) |
| **Net cash used in investing activities** | (24020) | (21517) | (29211) |
| **Cash Flows from Financing Activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxes paid for net share settlement of equity awards | (1177) | (530) | (3675) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchases of common stock | (6000) | (19929) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the line of credit |  |  | 255 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on the line of credit |  |  | (255) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of deferred financing costs | (12) | (303) | (52) |
| **Net cash used in financing activities** | (7189) | (20762) | (3727) |
| **Net change in cash and cash equivalents** | 18119 | (3302) | 43503 |
| **Cash and cash equivalents - Beginning** | 83734 | 87036 | 43533 |
| **Cash and cash equivalents - Ending** | $101853 | $83734 | $87036 |
| **Supplemental Cash Flow Data:** |  |  |  |
| Cash paid for taxes | $9973 | $8447 | $1810 |
| Cash paid for interest | $122 | $112 | $146 |
| Non-cash investing and financing activities: |  |  |  |
| &nbsp;&nbsp;Asset acquisitions not yet paid for at period end | $1806 | $1240 | $1576 |
| &nbsp;&nbsp;Leasehold improvements acquired through lease incentive | $1824 | $— | $— |
| &nbsp;&nbsp;Excise tax on share repurchases, accrued but not paid | $46 | $183 | $— |

---

***The accompanying notes are an integral part of these financial statements***

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

**THE LOVESAC COMPANY**

**NOTES TO FINANCIAL STATEMENTS**

**Note 1. Basis of Presentation, and Summary of Significant Accounting Policies**

**Nature of Operations**

The Lovesac Company (the "Company", "we", "us" or "our") is a technology driven company that designs, manufactures and sells unique, high quality furniture derived through its proprietary "Designed for Life" approach which results in products that are built to last a lifetime and designed to evolve as our customers' lives do. The Company markets and sells its products through an omni-channel platform that includes direct-to-consumer touch points in the form of our own showrooms and online directly at www.lovesac.com. As of February 1, 2026, the Company operated 278 showrooms located throughout the United States. The Company was formed as a Delaware corporation on January 3, 2017, in connection with a corporate reorganization with SAC Acquisition LLC, a Delaware limited liability company, the predecessor entity to the Company.

**Basis of Presentation**

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

**Fiscal Year**

The Company's fiscal year is determined on a 52/53 week basis ending on the Sunday closest to February 1. Hereinafter, fiscal years ended February 1, 2026, February 2, 2025 and February 4, 2024 are referred to as fiscal 2026, 2025 and 2024, respectively. Fiscal 2026 and 2025 were 52-week fiscal years and fiscal 2024 was a 53-week fiscal year.

**Use of Estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The Company evaluates its estimates and judgments on an ongoing basis based on historical experience, expectations of future events and various other factors we believe to be reasonable under the circumstances and revise them when necessary in the period the change is determined. Actual results may differ from the original or revised estimates.

**Revenue Recognition**

The Company's revenue consists substantially of product net sales. The Company reports product net sales net of discounts and recognizes them at the point in time when control transfers to the customer, which generally occurs upon our delivery to a third-party carrier.

Shipping and handling charges billed to customers are included in revenue. The Company recognizes shipping and handling expense as fulfillment activities (rather than a promised good or service) when the activities are performed. Accordingly, the Company records the expenses for shipping and handling activities at the same time the Company recognizes revenue. Shipping and handling costs incurred are included in cost of merchandise sold and include inbound freight and tariff costs relative to inventory sold, warehousing, and last mile shipping to our customers. Shipping and handling costs were $133.9 million, $116.0 million and $133.2 million in fiscal 2026, 2025 and 2024, respectively.

Estimated refunds for returns and allowances are recorded using our historical return patterns, adjusting for any changes in returns policies. The Company records estimated refunds for net sales returns on a monthly basis as a reduction of net sales and cost of sales on the statement of operations and an increase in inventory and customers returns liability on the balance sheet. As of February 1, 2026 and February 2, 2025, there was a returns allowance recorded on the balance sheet in the amount of $8.5 million and $9.2 million, respectively, which was included in accrued expenses, and sales returns of $1.9 million and $2.4 million, respectively, included in merchandise inventories.

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In some cases, deposits are received before the Company transfers control, resulting in contract liabilities. These contract liabilities are reported as customer deposits on the Company's balance sheet. As of February 1, 2026, and February 2, 2025, the Company recorded customer deposit liabilities in the amount of $11.5 million and $11.3 million, respectively. During fiscal 2026, 2025 and 2024, the Company recognized $11.3 million, $8.3 million and $6.8 million, respectively, related to customer deposits from fiscal 2025, 2024 and 2023, respectively.

The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms and through the internet. The Other channel predominantly represents net sales through the use of online and in-store pop-up shops, shop-in-shops, barter inventory transactions, and the Loved by Lovesac program. In-store pop-up-shops and shop-in-shops are staffed with associates trained to demonstrate and sell our product. The following represents net sales disaggregated by channel:

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| | | | |
|:---|:---|:---|:---|
| (in thousands) | **2026** | **2025** | **2024** |
| Showrooms | $468007 | $425863 | $437394 |
| Internet | 192349 | 196313 | 199778 |
| Other | 36759 | 58452 | 63093 |
| Total net sales | $697115 | $680628 | $700265 |

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The Company has no foreign operations and its net sales to foreign countries was less than 0.01% of total net sales in fiscal 2026, 2025, and 2024.

The Company had no customers that comprise more than 10% of total net sales in fiscal 2026, 2025, or 2024. See **Note 10. Segment Information** for net sales disaggregated by product**.**

***Barter Arrangements***

The Company has a bartering arrangement with a third-party vendor. The Company has the option to repurpose returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth. Barter transactions with commercial substance are recorded at a transaction price based on the estimated fair value of the non-cash consideration of the media credits to be received and the revenue is recognized when control of inventory is transferred, which is when the inventory is picked up in our warehouse. Fair value is estimated using various considerations, including the cost of similar media advertising if transacted directly, the expected sales price of product given up in exchange for the media credits, and the expected usage of media credits prior to expiration based on forecasted media spend subject to media credits under the barter arrangement. The Company recognizes an asset for media credits which is subsequently evaluated for impairment at each reporting period for any changes in circumstances. As the barter credits are expected to be utilized at various dates through their expiration dates, the Company classifies the amount expected to be utilized in the next fiscal year as current, which is included in Prepaid expenses, with the remaining balance included as part of Other assets on the balance sheet.

The Company did not recognize any barter sales in exchange for media credits in fiscal 2026. For fiscal 2025 and 2024, the Company recognized $9.0 million and $12.3 million, respectively, of barter sales in exchange for media credits. As of February 1, 2026, and February 2, 2025, the Company had $2.2 million and $5.3 million, respectively, of unused media credits expected to be utilized in the next fiscal year classified as current, and the remaining balance of $30.4 million and $31.4 million, respectively, classified as non-current. The credits expire from January 2034 through October 2034 and the Company expects to utilize all credits prior to expiration. The Company did not recognize any impairment for fiscal 2026, 2025, and 2024. The difference between the opening and closing balances of the Company's prepaid barter credit primarily results from the utilization of media credits.

**Cash and Cash Equivalents** 

The Company considers all highly liquid investments with a maturity at purchase of three months or less to be cash equivalents. The Company has deposits with financial institutions that maintain Federal Deposit Insurance Corporation "FDIC" deposit insurance up to $250,000 per depositor. The portion of the deposit in excess of this limit represents a credit risk to the Company. Due to the high cash balance maintained by the Company, the Company does maintain depository balances in excess of the insured amounts.

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**Trade Accounts Receivable, net**

Trade accounts receivable are stated at their estimated realizable amount and do not bear interest for which collectability is reasonably assured. Management determines the allowance for doubtful accounts by regularly evaluating individual customer accounts, considering the customer's financial condition, and credit history, and general and industry current economic conditions. Trade accounts receivables are evaluated for collectability on a regular basis and an allowance is recorded, if necessary. Recoveries of amounts previously written off are recorded when received. Historically, collection losses have been immaterial as a significant portion of the Company's receivables are related to individual credit card transactions and one wholesale customer. For fiscal 2026, 2025, and 2024, the Company recognized $0.8 million, $0.4 million, and $1.0 million, respectively, related to bad debt write-offs.

Breakdown of trade accounts receivable is as follows:

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| | | |
|:---|:---|:---|
| (in thousands) | **February 1, 2026** | **February 2, 2025** |
| Credit card receivables | $9611 | $11121 |
| Wholesale receivables | 2054 | 5660 |
| Other receivables | 68 |  |
| Total trade accounts receivable, net | $11733 | $16781 |

---

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

**Prepaid Expenses**

The Company recognizes payments made for goods and services to be received in the near future as prepaid expenses. Prepaid expenses consist primarily of barter credits and payments related to income taxes, insurance, rent, credit card fees, marketing, software licenses, and other costs.

**Other Current Assets**

Other current assets consist primarily of rebate receivables, deposits, and other receivables.

**Private Label Credit Card** 

The Company has an agreement with Synchrony Bank (formerly GE Capital Retail Bank) ("Issuer") to provide clients with private label credit cards (the "Retailer Program Agreement") which was amended effective October 1, 2025 to extend the term of the agreement through March 31, 2031. Each private label credit card bears The Lovesac Company brand logo and can only be used at the Company's Showroom locations or website. The Issuer is the sole owner of the accounts issued under the private label credit card program and absorbs the losses associated with non-payment by the private label card holders and fraudulent charges with specific requirements.

During the term of the Retailer Program Agreement, the Company receives a percentage of private label credit card sales from the Issuer and is also eligible to receive incentive payments for the achievement of certain targets. These funds are recorded within net revenue in the statements of operation. The Company also receives reimbursement funds from the Issuer for certain expenses the Company incurs. These reimbursement funds are used by the Company to fund marketing and other programs associated with the private label credit card and are recorded within net revenue in the statements of operation.

**Merchandise Inventories, net**

Merchandise inventories are comprised of finished goods which are carried at the lower of cost or net realizable value. Cost is determined on a weighted-average method basis. Merchandise inventories consist primarily of foam filled furniture, sectional couches, and related accessories. The Company adjusts its inventory for obsolescence based on historical trends, aging reports, specific identification and its estimates of future retail sales prices. In addition, the Company includes capitalized freight and warehousing costs in inventory relative to the finished goods in inventory.

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**Gift Certificates and Merchandise Credits**

The Company sells gift certificates and issues merchandise credits to its customers in the showrooms and through its website. Revenue associated with gift certificates and merchandise credits is deferred until redemption of the gift certificate and merchandise credits. The Company did not recognize any breakage revenue in fiscal 2026, 2025 or 2024 as the Company continues to honor all outstanding gift certificates.

**Property and Equipment, net**

Property and equipment are stated at cost less accumulated depreciation and amortization. Office and showroom furniture and equipment, software and vehicles are depreciated using the straight-line method over their estimated useful lives. Leasehold improvements are amortized using the straight-line method over their expected useful lives or lease term, whichever is shorter.

Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation or amortization is removed from the accounts, and any resulting gain or loss is reflected in operations for the period. The disposals generally relate to the decommissioning of aged assets, remodeled showrooms, and fixtures used during pop-up-shops. Expenditures for major betterments that extend the useful lives of property and equipment are capitalized.

**Goodwill**

Goodwill represents the excess of the purchase price over the fair value of the identified net assets of each business acquired. Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and in interim periods if certain events occur indicating that the carrying amounts may be impaired. The Company did not recognize any goodwill impairment charges during fiscal 2026, 2025, or 2024.

**Intangible Assets, net**

Intangible assets with finite useful lives, including patents, trademarks, and other intangible assets are being amortized on a straight-line basis over their estimated lives of 10 years, 3 years, and 5 years, respectively. Intangible assets with finite useful lives are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset might not be recovered. There were no impairments during fiscal 2026, 2025, or 2024.

Intangible assets, net as of February 1, 2026 and February 2, 2025 consists of (in thousands):

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **February 1, 2026** | **February 1, 2026** | **February 1, 2026** | **February 1, 2026** | **February 2, 2025** | **February 2, 2025** | **February 2, 2025** | **February 2, 2025** |
| | **Weighted-Average Remaining Life (in years)** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** | **Weighted-Average Remaining Life (in years)** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** |
| Patents | 7.9 | $4928 | $(2721) | $2207 | 7.5 | $3974 | $(2459) | $1515 |
| Trademarks | 2.4 | 1813 | (1647) | 166 | 2.0 | 1661 | (1590) | 71 |
| Other intangibles | 0.0 | 840 | (840) |  | 0.0 | 840 | (840) |  |
| &nbsp;&nbsp;Total |  | $7581 | $(5208) | $2373 |  | $6475 | $(4889) | $1586 |

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

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

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| | |
|:---|:---|
| 2027 | $390 |
| 2028 | 365 |
| 2029 | 330 |
| 2030 | 283 |
| 2031 | 253 |
| After | 752 |
|  | $2373 |

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**Impairment of Long-Lived Assets**

Our long-lived assets consist of property and equipment and right-of-use assets from leases. Property and equipment includes leasehold improvements, and other tangible assets. Long-lived assets are reviewed for potential impairment at such time that events or changes in circumstances indicate that the carrying amount of an asset might not be recovered. We evaluate for impairment at the individual showroom level, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we will first compare the carrying amount of the assets to the future undiscounted cash flows for the respective long-lived asset. If the estimated future cash flows are less than the carrying amounts of the assets, an impairment loss is measured as the excess of the carrying value over its fair value. We estimate fair value based on future discounted cash flow based on our historical operations of the showroom and estimates of future showroom profitability and economic conditions. These estimates include factors such as sales growth, gross margin, employment costs, lease escalation, and overall macroeconomic conditions, and are therefore subject to variability. Actual future results may differ from those estimates. If required, an impairment loss is recorded for that portion of the assets' carrying value in excess of fair value.

In June 2025, the Company initiated a cost-reduction plan that included the termination of its partnership with Best Buy. As part of this plan, the Company executed the wind down of its Best Buy shop-in-shop locations, with closures and related workforce reductions. This process was completed during the fourth quarter of fiscal 2026. As a result of the Exit, the Company assessed the recoverability of long-lived assets associated with the affected locations. For fiscal 2026, the Company recorded an impairment charge of $1.5 million related to property and equipment at the shop-in-shop locations. For additional information, see **Note 2. Property and Equipment, net**.

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

**Product Warranty**

Depending on the type of merchandise, the Company offers either a three-year limited warranty or a lifetime warranty. The Company's warranties require it to repair or replace defective products at no cost to the customer. At the time product revenue is recognized, the Company reserves for estimated future costs that may be incurred under its warranties based on historical experience. The Company periodically reviews the adequacy of its recorded warranty liability. Product warranty expense, without any reserve adjustments, was approximately $2.7 million, $2.5 million, and $2.0 million in fiscal 2026, 2025, and 2024. Warranty reserve was $3.0 million and $2.4 million as of February 1, 2026 and February 2, 2025, respectively, which was included in accrued expenses.

**Leases**

The Company leases its office, warehouse facilities and retail showrooms under operating lease agreements which expire at various dates through March 2040. Leases with an initial term of twelve months or less are not recorded on the balance sheet and are expensed as incurred over the lease term in the Statements of Operations.

The Company determines if a contract contains a lease at inception based on our right to control the use of an identified asset and our right to obtain substantially all of the economic benefits from the use of that identified asset. Operating right-of-use assets represents the right to use an underlying asset pursuant to the lease for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease, both of which are recognized based on the present value of future minimum lease payments over the lease term at the possession date. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. We combine lease and non-lease components for our showroom real estate leases in determining the lease payments subject to the initial present value calculation.

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The lease payments are discounted at the Company's incremental borrowing rate as the implicit rate in the lease is not readily determinable for most of the Company's leases, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We determine incremental borrowing rates quarterly as of the last day of each prior fiscal quarter provided by a third party valuation specialist.

We recognize operating lease cost over the estimated term of the lease, which includes options to extend lease terms that are reasonably certain of being exercised, starting when possession of the property is taken from the landlord, which normally includes a construction period prior to the showroom opening. When a lease contains a predetermined fixed escalation of the fixed rent, we recognize the related operating lease cost on a straight-line basis over the lease term. In addition, certain of our lease agreements include variable lease payments, such as payments based on a percentage of net sales that are in excess of a predetermined level and/or increases based on a change in the consumer price index or fair market value. These variable lease payments are excluded from minimum lease payments and are included in the determination of net lease cost when it is probable that the expense has been incurred and the amount can be reasonably estimated. If an operating lease asset is impaired, the remaining operating lease asset will be amortized on a straight-line basis over the remaining lease term.

**Fair Value Measurements**

The carrying amount of the Company's financial instruments classified as current assets and current liabilities approximate fair values based on the short-term nature of the accounts.

**Cost of Merchandise Sold**

Cost of merchandise sold includes the direct cost of sold merchandise; inventory shrinkage; inventory adjustments due to obsolescence, including excess and slow-moving inventory and lower of cost or net realizable value reserves; inbound freight; freight costs to ship merchandise to our showrooms, and warehousing and all logistics costs associated with shipping product to our customers. Certain competitors and other retailers may report gross profit differently than we do, by excluding from gross profit some or all of the costs related to their distribution network and instead including them in selling, general and administrative expenses. As a result, the reporting of our gross profit and profit margin may not be comparable to other companies.

The primary drivers of our cost of merchandise sold are raw materials costs, labor costs in the countries where we source our merchandise, and logistics costs. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and use product markdowns to efficiently sell these products. The timing and level of markdowns are driven primarily by customer acceptance of our merchandise.

**Selling, General and Administrative Expenses**

Selling, general and administrative expenses include all operating costs, other than advertising and marketing expense and depreciation and amortization, not included in cost of merchandise sold. These expenses include all payroll and payroll-related expenses; showroom expenses, including occupancy costs related to showroom operations, such as rent and common area maintenance; occupancy and expenses related to many of our operations at our headquarters, including utilities, equity based compensation, financing related expenses; public company expenses; customer financing fees; and credit card transaction fees. Selling, general and administrative expenses as a percentage of net sales is usually higher in lower volume quarters and lower in higher volume quarters because a significant portion of the costs are relatively fixed.

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**Research and Development Expenses**

Research and development costs are charged to expense in the period incurred. Research and development expense were $7.0 million, $8.4 million, and $7.7 million in fiscal 2026, 2025, and 2024, respectively.

**Employee Benefit Plan**

In February 2017, the Company established The Lovesac Company 401(k) Plan (the "401(k) Plan") with elective deferrals beginning May 1, 2017. The 401(k) Plan calls for elective deferral contributions, safe harbor matching contributions and profit sharing contributions. All employees of the Company will be eligible to participate in the 401(k) Plan in the month following one (1) month of service and the employee is over age 21. Participants are able to contribute up to 100% of their eligible compensation to the 401(k) Plan subject to limitations with the IRS. Employer contributions to the 401(k) Plan for fiscal 2026, 2025, and 2024 were approximately $2.2 million, $2.1 million, and $1.6 million, respectively.

**Advertising Expenses**

Advertising expenses include digital, social, and traditional advertising that covers all of our business channels. All advertising costs are expensed as incurred, or upon the release of the initial advertisement. Total advertising expenses were $75.1 million, $77.4 million, and $82.3 million in fiscal 2026, 2025, and 2024, respectively.

**Showroom Preopening and Closing Costs**

Non-capital expenditures incurred in preparation for opening new retail showrooms are expensed as incurred and included in selling, general and administrative expenses.

The Company continually evaluates the profitability of its showrooms. When the Company closes or relocates a showroom, the Company incurs unrecoverable costs, including the net book value of abandoned fixtures and leasehold improvements, lease termination payments, costs to transfer inventory and usable fixtures and other costs of vacating the leased location. Such costs are expensed as incurred and are included in selling, general and administrative expenses.

**Equity-Based Compensation**

The Company adopted the 2017 Equity Plan which provides for awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. All awards shall be granted within 10 years from the effective date of the 2017 Equity Plan. Vesting is typically over a three or four-year period and is contingent upon continued employment with the Company on each vesting date.

The fair value of the restricted stock units is determined based on the closing price of the Company's common stock on the grant date and the expense is recognized over the service period. For performance based restricted stock units, the number of units received will depend on the achievement of financial metrics relative to the approved performance targets. For performance based restricted stock units, stock-based compensation expense is recognized based on expected achievement of performance targets. The Company recognizes forfeitures as they occur.

**Income Taxes**

The Company accounts for uncertainty in income taxes using a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as non-current to the extent that the Company anticipates payment (or receipt) of cash beyond one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

Deferred income taxes are provided on temporary differences between the income tax basis of assets and liabilities and the amounts reported in the financial statements and on net operating loss and tax credit carry forwards.

A valuation allowance is provided for that portion of deferred income tax assets not likely to be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

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**Basic and Diluted Net Income (Loss) Per Common Share**

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares outstanding plus dilutive potential common shares, including unvested restricted stock units, stock options, and warrants. Diluted net income per common share includes, in periods in which they are dilutive, the effect of those potentially dilutive securities under the treasury stock method, where the average market price of the common stock exceeds the exercise prices for the respective periods. In periods of loss, there are no potentially dilutive common shares to add to the weighted average number of common shares outstanding.

**Recent Accounting Pronouncements**

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

*Recent Accounting Pronouncements Adopted*

Income Taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. We adopted this ASU for fiscal 2026, on a retroactive basis. See **Note 4. Income Taxes.**

*Recent Accounting Pronouncements Not Yet Adopted*

Intangibles-Goodwill and Internal-Use Software. In September 2025, the FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which updates the cost capitalization threshold for internal-use software developments costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. This ASU is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating this ASU to determine the impact of adoption on its Condensed Financial Statements and related disclosures.

Disaggregation of income statement expenses. In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which requires additional disclosure of certain costs and expenses within the notes to the financial statements. This accounting standards update will be effective for us for fiscal year 2028 and interim periods beginning in the first quarter of fiscal 2029, with early adoption permitted. The Company expects this ASU to only impact its disclosures with no impacts to its results of operations, cash flows or financial condition.

**Note 2. Property and Equipment, net**

Property and equipment, net as of February 1, 2026 and February 2, 2025 consists of (in thousands):

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| | | | |
|:---|:---|:---|:---|
| | **Estimated Life** | **February 1, 2026** | **February 2, 2025** |
| Office and store furniture, and equipment | 5 Years | $16553 | $15410 |
| Software | 5 Years | 1778 | 3006 |
| Leasehold improvements | Shorter of estimated useful life or lease term | 115913 | 97874 |
| Computers | 3 Years | 4634 | 5747 |
| Tools, Dies, Molds | Shorter of 5 years or purchase agreement term | 3426 | 1525 |
| Vehicles | 5 Years | 496 | 497 |
| Construction in process | NA | 1913 | 6442 |
| &nbsp;&nbsp;Total |  | 144713 | 130501 |
| Accumulated depreciation and amortization |  | (58313) | (52511) |
| Property and equipment, net |  | $86400 | $77990 |

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

In June 2025, the Company initiated a cost-reduction plan that included the termination of its partnership with Best Buy. As part of this plan, the Company executed the wind down of its Best Buy shop-in-shop locations (the "Exit"), with closures and related workforce reductions. This process was completed during the fourth quarter of fiscal 2026. As a result of the Exit, the Company assessed the recoverability of long-lived assets associated with the affected locations. For fiscal 2026, the Company recorded an impairment charge of $1.5 million related to property and equipment at the shop-in-shop locations.

The impairment was determined by comparing the carrying amount of the assets to the estimated undiscounted future cash flows. As the carrying amounts were not recoverable, the assets were written down to their estimated fair values, which were determined using a discounted cash flow model based on historical performance and expected future profitability. These impairment charges are included within selling, general and administrative expense in the Statements of Operations.

As part of the Exit, the Company incurred severance and other one-time employee termination benefits, as well as costs associated with decommissioning the Best Buy shop-in-shop locations. These costs did not have a material impact on the financial statements.

**Note 3. Accrued Expenses**

The following table presents the components of accrued expenses (in thousands):

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| | | |
|:---|:---|:---|
| | **February 1, 2026** | **February 2, 2025** |
| Accrued warehouse, freight, and inventory | $15762 | $17837 |
| Customer return liability | 9463 | 10042 |
| Accrued income taxes | 492 | 8259 |
| Accrued advertising and marketing | 3135 | 6707 |
| Warranty liability | 3035 | 2391 |
| Other accrued expenses<sup>(1)</sup> | 6901 | 6750 |
| Total Accrued Expenses | $38788 | $51986 |

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

**Note 4. Income Taxes**

The Company is subject to federal, state and local corporate income taxes. The components of the provision for income taxes reflected on the statements of operations for fiscal 2026, 2025, and 2024 are set forth below (in thousands):

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| | | | |
|:---|:---|:---|:---|
| | **2026** | **2025** | **2024** |
| Current taxes: |  |  |  |
| U.S. federal | $(212) | $6767 | $6898 |
| State and local | 922 | 2600 | 3190 |
| Total current tax expense | $710 | $9367 | $10088 |
| Deferred taxes: |  |  |  |
| U.S. federal | $2106 | $(3498) | $(1238) |
| State and local | (216) | (976) | (888) |
| Total deferred tax (benefit) expense | 1890 | (4474) | (2126) |
| Total income tax expense | $2600 | $4893 | $7962 |

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

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2026** | **2026** | **2025** | **2025** | **2024** | **2024** |
| U.S. Federal tax at statutory rate | $1399 | 21.0% | $3454 | 21.0% | $6683 | 21.0% |
| State and local income taxes, net of federal effect<sup>(1)</sup> | 512 | 7.7% | 1078 | 6.6% | 1632 | 5.1% |
| Tax Credits: |  |  |  |  |  |  |
| &nbsp;&nbsp;R&D Tax Credit | (233) | (3.5)% | (353) | (2.2)% | (1131) | (3.6)% |
| Non-taxable or non-deductible items: |  |  |  |  |  |  |
| &nbsp;&nbsp;Section 162(m) Limit on Compensation | 262 | 3.9% |  | —% | 149 | 0.5% |
| &nbsp;&nbsp;Share-based compensation | 577 | 8.7% | 442 | 2.7% | 81 | 0.3% |
| &nbsp;&nbsp;Penalties | 10 | 0.1% | 316 | 1.9% | 8 | —% |
| &nbsp;&nbsp;Meals and Entertainment | 21 | 0.3% | 30 | 0.2% | 24 | 0.1% |
| &nbsp;&nbsp;Changes in unrecognized tax benefits | 75 | 1.1% | (38) | (0.2)% | 452 | 1.4% |
| &nbsp;&nbsp;Other | (23) | (0.3)% | (36) | (0.2)% | 64 | 0.2% |
| Total income tax expense | $2600 | 39.0% | $4893 | 29.7% | $7962 | 25.0% |

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<sup>(1)</sup> The following states make up the majority of the tax effect in this category: Fiscal 2026—California, Florida, Maryland, Virginia, Illinois, Pennsylvania, New Jersey, and New York; Fiscal 2025—California, New Jersey, Pennsylvania, Illinois, Florida, New York, and Maryland; Fiscal 2024—California, New Jersey, Illinois, Pennsylvania, Florida, Maryland, and New York.

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

---

| | | | |
|:---|:---|:---|:---|
| **Jurisdiction** | **2026** | **2025** | **2024** |
| U.S. Federal | $7343 | $6000 | $1108 |
| States | 2630 | 2447 | 702 |
| Total | $9973 | $8447 | $1810 |

---

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

---

| | | |
|:---|:---|:---|
| | **February 1, 2026** | **February 2, 2025** |
| Deferred Income Tax Assets |  |  |
| &nbsp;&nbsp;Federal net operating loss carryforward | $2252 | $— |
| &nbsp;&nbsp;State net operating loss carryforward | 334 | 286 |
| &nbsp;&nbsp;Research and development credit carryforward | 181 |  |
| &nbsp;&nbsp;Intangible assets | 433 | 467 |
| &nbsp;&nbsp;Accrued liabilities | 3457 | 4043 |
| &nbsp;&nbsp;Equity-based compensation | 2863 | 3122 |
| &nbsp;&nbsp;Merchandise inventories | 5621 | 4534 |
| &nbsp;&nbsp;Charitable contributions | 13 |  |
| &nbsp;&nbsp;Research and development capitalization | 2091 | 4183 |
| &nbsp;&nbsp;Operating lease liabilities | 49573 | 46994 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Deferred Income Tax Assets | 66818 | 63629 |
| Deferred Income Tax Liabilities |  |  |
| &nbsp;&nbsp;Operating lease right of use asset | (42057) | (40505) |
| &nbsp;&nbsp;Property and equipment | (11374) | (7847) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Deferred Tax Liabilities | (53431) | (48352) |
| Net Deferred Income Tax Asset | $13387 | $15277 |

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At February 1, 2026, the Company had $10.7 million of net operating loss carryforwards available for federal income tax purposes. At February 2, 2025, the Company did not have any net operating loss carryforwards available for federal income tax purposes. The Company has approximately $6.4 million and $4.8 million of state net operating loss carryforwards as of February 1, 2026 and February 2, 2025, respectively. The state net operating losses expire at various times between 2032 and 2040. The statute of limitations has expired for all tax years prior to 2022 for federal and state tax purposes. However, the net operating losses generated on the Company's federal and state tax returns in prior years may be subject to adjustments by the federal and state tax authorities.

As of February 1, 2026 and February 2, 2025, the Company did not record a valuation allowance against its net deferred tax assets, due to its assessment and conclusion that it is more likely than not that it would realize its net deferred tax assets.

A reconciliation of beginning and ending amounts of unrecognized tax benefits for fiscal 2026, 2025, and 2024 is as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **2026** | **2025** | **2024** |
| Gross unrecognized tax benefit, beginning of period | $375 | $452 | $— |
| Additions based on tax positions related to the current year | 45 | 65 | 177 |
| Additions related to tax positions in prior year | 1 |  | 275 |
| Settlements related to tax positions in a prior period |  |  |  |
| Decreases based on tax positions in a prior period |  | (142) |  |
| Gross unrecognized tax benefit, end of period | $421 | $375 | $452 |

---

The Company recognizes only those tax positions that meet the more-likely-than-not recognition threshold and establishes tax reserves for uncertain tax positions that do not meet this threshold. As of February 1, 2026 and February 2, 2025, the Company had unrecognized tax benefits of $0.4 million at each reporting date. The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months; however, the ultimate outcome of tax matters is uncertain and unforeseen results can occur. We had no material interest or penalties during fiscal 2026, 2025, and 2024. To the extent these unrecognized tax benefits are ultimately recognized, approximately $0.4 million will impact the Company's effective tax rate. Our policy is to record interest and penalties directly related to uncertain tax positions as income tax expense in the statements of operations.

The Internal Revenue Service (IRS) has concluded the audit of the Company's fiscal 2019 federal income tax return as of February 4, 2024. During fiscal 2025, the Company filed amended federal and state income tax returns for fiscal 2022 and 2023 as a result of the IRS audit settlement. The amended returns did not have a material impact to the financial statements.

For tax years beginning after December 31, 2021, the Tax Cuts & Jobs Act of 2017 eliminated the option to deduct research and development expenditures as incurred and instead required taxpayers to capitalize and amortize them over five or 15 years beginning in 2022. For fiscal 2025 and 2024, due to the capitalization of research and development expenditures, the Company's current federal taxable income increased by approximately $7.5 million and $9.0 million, respectively, with a corresponding increase in the Company's deferred tax assets.

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law. The OBBBA includes various changes to U.S. federal income tax law, including extensions of several expiring provisions from the Tax Cuts and Jobs Act of 2017. The OBBBA has multiple effective dates, with certain provisions effective in 2025. The OBBBA did not have a material impact on the Company's effective tax rate for year ended February 1, 2026. The Company will continue to evaluate the impact of the new legislation on its consolidated financial statements as additional guidance is issued.

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**Note 5. Basic and Diluted Net Income Per Common Share**

The following table sets forth the computation of basic and diluted net income per share for fiscal 2026, 2025, and 2024:

---

| | | | |
|:---|:---|:---|:---|
| (amounts in thousands, except per share data and share amounts) | **2026** | **2025** | **2024** |
| Net income | $4065 | $11556 | $23861 |
| Weighted-average number of common shares outstanding, basic | 14684339 | 15502469 | 15427975 |
| Effect of dilutive securities<sup>(1)(2)</sup> | 11240 | 1289002 | 1032408 |
| Weighted-average number of common shares outstanding, diluted | 14695579 | 16791471 | 16460383 |
| Basic net income per share | $0.28 | $0.75 | $1.55 |
| Diluted net income per share | $0.28 | $0.69 | $1.45 |

---

<sup>(1)</sup> The effect of dilutive securities includes unvested restricted stock units, stock options and warrants. During fiscal 2024, all remaining outstanding warrants were exercised. For fiscal 2026, the effects of 385,285 stock options outstanding, which would have been anti-dilutive, were excluded from the computation of diluted net income per share. For fiscal 2025 and 2024, the effects of 495,366 stock options outstanding, which would have been anti-dilutive, were excluded from the computation of diluted net income per share.

<sup>(2)</sup> The Company prospectively corrected the diluted earnings per share calculation. The impact to previous years was not material.

**Note 6. Leases**

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

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| | | | |
|:---|:---|:---|:---|
| | **2026** | **2025** | **2024** |
| Operating lease expense | $37629 | $34469 | $30305 |
| Variable and short term lease expense | 5877 | 7465 | 13290 |
| &nbsp;&nbsp;Total lease expense | $43506 | $41934 | $43595 |

---

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

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

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Future minimum lease payments under non-cancelable leases as of February 1, 2026 were as follows (in thousands):

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| | |
|:---|:---|
| 2027 | $35232 |
| 2028 | 36770 |
| 2029 | 33588 |
| 2030 | 31690 |
| 2031 | 26436 |
| Thereafter | 74481 |
| &nbsp;&nbsp;Total undiscounted future minimum lease payments | 238197 |
| Less: imputed interest | (45686) |
| &nbsp;&nbsp;Total present value of lease obligations | 192511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: current operating lease liability | (24111) |
| Operating lease liability- long term | $168400 |

---

Supplemental cash flow information related to our operating leases is as follows (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2026** | **2026** | **2025** | **2025** | **2024** | **2024** |
| **Operating cash flow information:** |  |  |  |  |  |  |
| &nbsp;&nbsp;Amounts paid on operating lease liabilities | $| 39043 | $| 34651 | $| 29748 |
| **Non-cash activities:** |  |  |  |  |  |  |
| &nbsp;&nbsp;Right-of-use assets obtained in exchange for lease obligations | $| 28840 | $| 22639 | $| 42064 |
| **Weighted average remaining lease term - operating leases** | 6.9 years | 6.9 years | 6.9 years | 6.9 years | 7.5 years | 7.5 years |
| **Weighted average discount rate - operating leases** | 5.59% | 5.59% | 5.23% | 5.23% | 4.97% | 4.97% |

---

**Note 7. Commitments, Contingencies and Related Parties**

**Legal Proceedings**

We are subject to legal proceedings and claims that arise in the ordinary course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described below. We make a provision for a loss contingency when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, we disclose such an estimate, if material. If such a loss or range of losses is not reasonably estimable, we disclose that fact. We review any such loss contingency provisions at least quarterly and adjust them to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. We recognize insurance recoveries, if any, when they are probable of receipt. All associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Legal proceedings are inherently unpredictable. It is possible that our financial position, results of operations or cash flows could be materially negatively affected in any particular period by an unfavorable resolution of one or more of such legal proceedings.

As previously disclosed, the Company voluntarily self-reported to the SEC information concerning the internal investigation of the accounting matters that led to the restatement of its previously issued audited financial statements as of and for the year ended January 29, 2023 and our unaudited condensed financial statements for the quarterly periods ended April 30, 2023, October 30, 2022, July 31, 2022 and May 1, 2022. As a result of self-reporting, the Company was the subject of a non-public investigation by the SEC. The Company cooperated fully with the SEC in its investigation, and on October 29, 2024, the Company agreed to a settlement to resolve the claims against it. Without admitting or denying the SEC's allegations, Lovesac agreed to the entry of a final judgment ordering it to pay a $1.5 million civil penalty and imposing a permanent injunction against future violations of Section 17(a)(3) of the Securities Act of 1933 and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and the associated rules thereunder. During

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fiscal 2025, the penalties were recognized within selling, general and administrative expense in the Statements of Operations and paid in full.

On December 19, 2023, a putative securities class action was filed against the Company and certain of its current and former officers related to the restatement of certain of the Company's financial statements. The suit, captioned *Gutknecht v. The Lovesac Company*, No. 3:23-cv-1640, was filed in the United States District Court for the District of Connecticut and alleges that all defendants violated Sections 10(b) of the Exchange Act and SEC Rule 10b-5 and that the individual defendants violated Section 20(a) of the Exchange Act. The complaint generally alleges that the Company made certain misrepresentations or failed to disclose certain accounting errors related to the restatement of its financial statements and that the Company's disclosure controls and procedures and internal controls over financial reporting were deficient. The plaintiffs seek, among other things, an unspecified amount of damages and attorneys' fees, expert fees and other costs. On March 11, 2024, the court appointed Susan Cooke Peña as Lead Plaintiff and The Rosen Law Firm, P.A. as Lead Counsel. On May 29, 2024, the parties entered into a term sheet to settle the action, subject to various conditions, including execution of a definitive settlement agreement, filing of the definitive agreement with the court, and court approval. The parties executed the definitive settlement agreement on July 30, 2024. The court preliminarily approved the proposed settlement on August 1, 2024, authorized dissemination of notice to the class, and scheduled a fairness hearing. On December 9, 2024, the Court entered an order approving final settlement of the litigation, including dismissing the lawsuit and releasing all claims in exchange for a settlement payment by the Company (the "Approval Order"). On December 10, 2024, the Court entered judgment dismissing the litigation on the merits and with prejudice according to the terms of the parties' settlement agreement and the Approval Order. During fiscal 2025, the settlement was recognized within selling, general and administrative expense in the Statements of Operations and paid in full.

On July 29, 2024, a putative shareholder derivative action captioned Getz v. Nelson, No. 3:24-cv-1260, was filed in the United States District Court for the District of Connecticut on behalf of the Company against certain of its current and former officers and directors. Two similar shareholder derivative actions, captioned Valle v. Dellomo, No. 3:24-cv-1327, and McKinnon v. Nelson, No. 3:24-cv-1343, were filed in the same court against the same defendants on August 19, 2024, and August 21, 2024, respectively. The cases assert claims on behalf of the Company for breach of fiduciary duty, violations of the Exchange Act, unjust enrichment, corporate waste, and aiding and abetting primary violations. The factual allegations underlying those claims are similar to those alleged in the securities class action. The plaintiffs seek, among other things, an unspecified amount of damages and attorneys' fees, expert fees, and other costs. On September 20, 2024, the Court consolidated the three lawsuits under the caption In re The Lovesac Company Derivative Litigation, Lead Case No. 3:24-cv-01260-VAB (i.e., the "Derivative Action"). On May 19, 2025, the parties signed a definitive agreement to settle the Derivative Action. On June 2, 2025, plaintiffs' counsel filed an unopposed motion seeking preliminary approval of the settlement. On June 3, 2025, the Court granted the motion for preliminary approval. On October 2, 2025, the Court approved the settlement as submitted by the parties, concluding the litigation.

On March 21, 2024, a putative class action complaint related to the Company's pricing was filed against the Company. The lawsuit, captioned *Nguyen v. The Lovesac Company*, was filed in the Superior Court of California, County of Sacramento, and was removed to the United States District Court for the Eastern District of California. The complaint generally alleges that the Company falsely advertised discounts on certain products. The plaintiff seeks, among other things, an unspecified amount of monetary damages, including treble damages, punitive damages, injunctive relief related to the Company's sales practices, and attorneys' fees, expert fees, and other expenses. On June 24, 2024, the Company filed a motion to dismiss. On July 15, 2024, the plaintiff filed an amended complaint. On August 12, 2024, the Company filed a motion to dismiss the plaintiff's amended complaint. On November 26, 2024, the court entered an order to stay all proceedings in the case in light of a mediation of the dispute scheduled for January 23, 2025. The parties were unable to come to an agreement at the January 23, 2025 mediation. On February 7, 2025, the court unstayed the proceedings in the case for the purpose of ruling on the Company's pending motion to dismiss. On March 28, 2025, the court granted the Company's motion to dismiss with leave to amend, but dismissed the plaintiff's request for equitable relief, including injunctive relief, without leave to amend. On April 18, 2025, the plaintiff filed a second amended complaint. On June 2, 2025, the Company filed a motion to dismiss the plaintiff's second amended complaint. The Company's motion to dismiss the plaintiff's second amended complaint is pending a decision by the Court. At this time, we are unable to reasonably estimate the possible loss or range of loss from this proceeding.

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**Note 8. Financing Arrangements**

**Revolving Line of Credit**

On February 6, 2018, the Company established a $25.0 million line of credit with Wells Fargo Bank, National Association ("Wells"). On March 25, 2022, the Company amended the credit agreement to extend the maturity date to March 25, 2024, and among other things, increase the maximum revolver commitment from $25.0 million to $40.0 million, subject to borrowing base and availability restrictions. Availability is based on eligible accounts receivable and inventory. The amended agreement contains a financial covenant that requires us to maintain undrawn availability under the credit facility of at least 10% of the lesser of (i) the aggregate commitments in the amount of $40.0 million and (ii) the amounts available under the credit facility based on eligible accounts receivable and inventory. Our credit agreement includes a $1.0 million sublimit for the issuance of letters of credit and a $4.0 million sublimit for swing line loans.

Under the amended line of credit, the Company may elect that revolving loans bear interest at either a base rate or a term SOFR based rate, plus, in either case, a margin determined by reference to our quarterly average excess availability under the line of credit and ranging from 0.50% to 0.75% for borrowings accruing interest at a base rate and from 1.625% to 1.850% for borrowings accruing interest at term SOFR. Swing line loans will at all times accrue interest at a base rate plus the applicable margin. The lower margins described above will apply initially and will adjust thereafter from time to time based on the quarterly average excess availability under the line of credit.

On March 24, 2023, the Company amended the credit agreement to extend the maturity date to September 30, 2024. On July 29, 2024, the Company amended the credit agreement to, among other things, add an uncommitted accordion feature that allows the Company, subject to certain customary conditions, increase the size of the revolving credit facility by $10.0 million and extend the maturity date of the loans made under the credit agreement from September 30, 2024 to July 29, 2029.

As of February 1, 2026 and February 2, 2025, the Company's borrowing availability under the line of credit with Wells was $36.0 million and $32.6 million, respectively, there were no borrowings outstanding on this line of credit, and the Company was in compliance with required covenants.

**Note 9. Stockholders' Equity**

***Equity Incentive Plan***

The Company adopted the Second Amended and Restated 2017 Equity Incentive Plan (the "2017 Equity Plan") which provides for awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance based restricted stock units, cash-based awards and other stock-based awards. All awards shall be granted within 10 years from the effective date of the 2017 Equity Plan. In fiscal 2025, the 2017 Equity Plan was amended to increase the shares of our common stock authorized and reserved for issuance by 1,100,000 shares, which increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan to 3,979,889 shares of common stock.

*Performance-Based Restricted Stock Units*

Performance-based restricted stock units ("PSU awards") granted under the 2017 Equity Plan are generally subject to both a service-based vesting condition and a performance-based vesting condition. PSU awards will vest upon the achievement of specified performance targets established at the beginning of the performance period and subject to continued service through the applicable vesting date. The stock-based compensation expense relating to PSU awards is recognized over the requisite service period when it is probable that the performance condition will be satisfied.

In March 2023, Shawn Nelson, our Chief Executive Officer, received a one-time performance and retention long-term incentive grant of 235,000 Restricted Stock Units (the "RSU Grant") pursuant to the 2017 Equity Plan and Mr. Nelson's Restricted Stock Units Agreement and Grant Notice (the "RSU Agreement"). The RSU Grant vests on the later to occur of (i) the fifth anniversary of the date of grant so long as, (x) on or prior to such date (subject to certain limited extensions), the Company has achieved a specified level of performance with respect to share price and net sales, and (y) Mr. Nelson remains in continuous service with the Company as Chief Executive Officer through such date; or (ii) if the specified level of performance with respect to net sales is not achieved on or prior to the fifth anniversary of the date of grant, but the other conditions in subclause (i) are achieved, the first date that such specified level of performance with respect to net sales is achieved, so long as it is achieved on or prior to the seventh anniversary of the date of grant and so long as Mr. Nelson

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remains in continuous service with the Company through such date. Except in the event of termination of employment as defined in the 2017 Equity Plan, the RSU Grant will be settled in shares of common stock of the Company on the first anniversary of the applicable vesting date. The RSU grant was valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The grant date fair value of the RSU Grant was $4.4 million. The expense will be recognized on a straight-line basis over the explicit service period.

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

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| | | |
|:---|:---|:---|
| | **Number of shares** | **Weighted average grant date fair value** |
| Unvested at February 2, 2025 | 960055 | $23.94 |
| Granted | 330314 | 19.87 |
| Forfeited | (212395) | 27.26 |
| Vested | (30980) | 21.56 |
| Unvested at February 1, 2026 | 1046994 | $22.05 |

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During fiscal 2025 and 2024, 606,063 and 657,494 PSU awards were granted with a weighted-average grant date fair value of $21.28 and $26.38, respectively. During fiscal 2026, 2025, and 2024, the total fair value of PSU awards vested was $0.7 million, less than $0.1 million, and $6.6 million, respectively.

*Time-Based Restricted Stock Units* 

Time-based restricted stock units ("RSU awards") granted under the 2017 Equity Plan are generally subject to only a service-based vesting condition. RSU awards vest equally over three years on the anniversary date of the grant date if employed at the time of vesting. The valuation of these RSU awards is based solely on the fair value of the Company's stock on the date of grant.

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

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| | | |
|:---|:---|:---|
| | **Number of shares** | **Weighted average grant date fair value** |
| Unvested at February 2, 2025 | 328947 | $24.96 |
| Granted | 383904 | 19.35 |
| Forfeited | (43867) | 20.79 |
| Vested | (164496) | 27.06 |
| Unvested at February 1, 2026 | 504488 | $20.37 |

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During fiscal 2025 and 2024, 241,571 and 179,184 RSU awards were granted with a weighted-average grant date fair value of $21.93 and $26.94, respectively. During fiscal 2026, 2025, and 2024, the total fair value of RSU awards vested was $4.5 million, $3.6 million, and $3.1 million, respectively.

*Stock Options*

In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an exercise price of $38.10 per share. The market condition was met on June 5, 2021, which was the date on which the average closing price of the Company's common stock had been at least $75 for 40 consecutive trading days. The options vested and became exercisable on June 5, 2022 as the officers were still employed on that date. All expenses associated with the stock options were recognized in prior years.

During fiscal 2026, 110,081 stock options were forfeited related to a former officer and director's termination of service; no other stock options were issued, exercised, or canceled. During fiscal 2025 and 2024, there were no stock options issued, exercised, canceled or forfeited.

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The following represents stock option activity during fiscal 2026:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Number of options** | **Weighted average exercise price** | **Weighted average remaining contractual life (in years)** | **Aggregate intrinsic value** |
| Outstanding at February 2, 2025 | 495366 | $38.10 | 4.34 |  |
| Issued |  |  |  |  |
| Forfeited | (110081) | 38.10 |  |  |
| Exercised |  |  |  |  |
| Outstanding and exercisable at February 1, 2026 | 385285 | $38.10 | 3.34 | $— |

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Equity-based compensation expense was approximately $5.5 million, $7.9 million, and $4.2 million for fiscal 2026, 2025, and 2024, respectively. The income tax benefit for the vesting of our equity-based compensation awards was $0.6 million, $1.2 million and $1.0 million for fiscal 2026, 2025, and 2024, respectively. The total unrecognized equity based compensation cost related to unvested RSU and PSU awards was approximately $13.0 million as of February 1, 2026 and will be recognized in operations over a weighted average period of 2.3 years.

***Common Stock Warrants***

On June 29, 2018, the Company issued 281,750 warrants with a five-year term and an average exercise price of $19.20 to Roth Capital Partners, LLC as part of the underwriting agreement in connection with the Company's IPO. Warrants may be exercised on a cashless basis, where the holders receive fewer shares of common stock in lieu of a cash payment to the Company. As of January 29, 2023, the weighted average contractual life of the 281,750 outstanding warrants was 0.4 years. In fiscal 2024, Roth Capital Partners, LLC performed a cashless exercise of all 281,750 remaining outstanding warrants resulting in 74,592 net shares issued. As of February 1, 2026, no warrants remain outstanding.

***Share Repurchase Program***

On June 11, 2024, our Board of Directors approved a $40.0 million share repurchase program. Under the share repurchase program, we may repurchase shares from time to time in the open market, privately negotiated transactions and accelerated share repurchase. The timing, volume and nature of share repurchases, if any, will be at our sole discretion and will be dependent on market conditions, liquidity, applicable securities laws, and other factors. We may suspend or discontinue the share repurchase program at any time. The exact number of shares to be repurchased by the Company, if any, is not guaranteed. Depending on market conditions and other factors, these repurchases may be commenced or suspended at any time or periodically without prior notice.

During fiscal 2026 and 2025, we repurchased and subsequently retired 306,325 and 777,713 shares of common stock, costing $6.0 million and $19.9 million, respectively, including broker commissions and fees. The Inflation Reduction Act imposed a nondeductible 1% excise tax on the net value of stock repurchases. During fiscal 2026 and 2025, the excise tax on net share repurchases was not material.

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

On March 26, 2026, subsequent to the end of the fiscal period, our board of directors authorized the repurchase of an additional $40.0 million of our outstanding common stock under the share repurchase program. As a result, total remaining availability under the share repurchase program increased to $54.1 million.

**Note 10. Segment Information**

Segments are reflective of how the chief operating decision maker ("CODM") reviews operating results for the purpose of allocating resources and assessing performance. The CODM group of the Company is comprised of the Chief Executive Officer and the President.

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The Company markets and sells its products through an omni-channel platform that provides a seamless and meaningful experience to its customers across multiple channels. The Company has one operating segment which aligns with the way our CODM group evaluates performance and allocates resources within the Company. As the Company's products and sales channels are complementary and analyzed in the same manner, the Company operates its business as one operating segment and therefore it has one reportable segment.

The CODM group regularly receives financial information presented on an entity-wide basis. The CODM group uses net sales and net income as reported on the statements of operations to allocate resources, assess performance of our business, and evaluate earnings generated in deciding where to reinvest profits into its single reportable segment. Net sales and net income are used to monitor budget versus actual results. The significant expenses considered by the CODM group in evaluating the performance of our business are consistent with the financial information included on the Company's statements of operations. There are no additional expense categories and amounts that meet the definition of significant expense items that are regularly provided to the CODM group and included in net income. The CODM group may also evaluate financial performance based on net income adjusted for certain items that are unusual and non-recurring. While management uses these additional adjusted metrics in assessing and allocating resources to our business, management recognizes that US GAAP principles are the basis of our performance.

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

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| | | | |
|:---|:---|:---|:---|
| | **2026** | **2025** | **2024** |
| Sactionals | $634792 | $621898 | $637388 |
| Sacs | 42587 | 48798 | 51719 |
| Other<sup>(1)</sup> | 19736 | 9932 | 11158 |
| Total net sales | $697115 | $680628 | $700265 |

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<sup>(1)</sup> Includes our new product platform Snugg.

Interest income, net is as follows:

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| | | | |
|:---|:---|:---|:---|
| | **2026** | **2025** | **2024** |
| Interest income, net<sup>(1)</sup> | 1303 | 2800 | 1747 |

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

As the Company discloses a single reportable segment, total net sales is reported in the statements of operations, segment assets are reported in the balance sheets, and capital expenditures are reported in the statements of cash flows. The Company has material long-lived assets, as stated on the balance sheet, with immaterial long-lived assets located in foreign countries. The accounting policies of the reported segment are the same as those described in **Note 1. Basis of Presentation, and Summary of Significant Accounting Policies.**

Refer to *Revenue Recognition* in **Note 1. Basis of Presentation, and Summary of Significant Accounting Policies** for additional information on our sales channels, geographic areas, and major customers.

**Note 11. Subsequent Events**

***Supreme Court Tariff Ruling***

In February 2026, the Supreme Court of the U.S. issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. To preserve its rights to recover such duties, the Company has filed a complaint and a protective action with the U.S. Court of International Trade ("CIT") seeking a full refund of all tariffs paid under the invalidated IEEPA authorities. Following the Supreme Court decision, the U.S. Administration announced a new 10% global tariff under Section 122 of the Trade Act of 1974, subject to certain carveouts. At this time the Company cannot reasonably estimate the total financial impact of this ruling, however it, and any additional tariffs, may materially affect the Company's future results of operations and cash flows.

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<u>[**Table of Contents**](#ib81ee4199c7d40c598eb42b95f65358d_7)</u>

In the event the Company receives a refund of tariffs previously paid, it may elect to return a portion of such amounts to vendors that provided the Company tariff relief and/or price concessions. Any such obligations would be assessed based on commercial considerations, and could reduce any benefit from a refund.

## Exhibit 10.19

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2 Execution Copy FOURTH AMENDMENT TO RETAILER PROGRAM AGREEMENT (Lovesac) THIS FOURTH AMENDMENT TO RETAILER PROGRAM AGREEMENT (this "Amendment" or "Fourth Amendment") is entered into on November 4, 2025 and made effective on October 1, 2025 (the "Fourth Amendment Effective Date"), by and between Synchrony Bank ("Bank"), and The Lovesac Company dba LoveSac Alternative Furniture Co. and Lovesac ("Retailer"). This Amendment amends the Retailer Program Agreement between Bank and Saq Acquisition LLC (as predecessor in interest to Retailer) dated April 1, 2013 ("Agreement"). Capitalized terms used herein and not otherwise defined have the meanings given them in the Agreement. WHEREAS, Bank and Retailer desire to amend the Agreement to extend the term of the Agreement and to address certain other issues set forth below, subject to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises and subject to the terms and conditions hereinafter set forth, the parties hereby agree as follows: I. AMENDMENTS TO THE AGREEMENT 1.1 Amendment to Section 5(j). Effective on the Fourth Amendment Effective Date, the reference to "20 basis points (0.20%)" in Section 5(j) is deleted and replaced with a reference to "30 basis points (0.30%)". 1.2 Amendment to Section 5(k). Section 5(k) is deleted and replaced as follows: "(k) Starting with the Program Year that begins on April 1, 2026, and continuing for each subsequent Program Year, Bank will allocate $75,000 to the Technology Fund within 30 days after the beginning of each Program Year. "Technology Fund" means a record maintained by Bank that is used to fund the mutually agreed upon costs and expenses of implementing the mutually agreed upon technology projects for the Program, including agreed upon costs incurred by Bank and Retailer. As long as there are funds available in the Technology Fund, Bank will reimburse Retailer for mutually agreed upon technology expenses within 30 days after the receipt of an invoice that meets Bank's reasonable requirements. Except for the right to require Bank to make payments from such fund from time to time in accordance with this Agreement, Retailer shall have no right, title or interest in or to the Technology Fund or in or to any amounts which have been allocated thereto. Any amounts previously allocated to the Technology Fund but not used as of (x) twelve months after the funds are added to the Technology Fund, or (y) the date of any notice of termination or non-renewal of the Agreement, may be withdrawn and retained by Bank for its own account without obligation to account therefor to Retailer." 1.3 Addition of a new Section 5(l). A new section 5(l) is added as follows: "(l) As an incentive for the Retailer to enter into this Fourth Amendment to extend the Term of the Program, provided that no event has occurred that would permit the Bank to terminate this Agreement under Section 15(b), Bank will pay the Retailer $600,000 within 30 days after the end of each Program Year during the Term, starting with the Program Year beginning April 1, 2026. Exhibit 10.19

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3 Execution Copy 1.4 Amendment to Section 15(a). Section 15(a) is hereby deleted and replaced with the following: "(a) This Agreement shall commence upon the execution of this Agreement and shall continue until and including March 31, 2031, unless earlier terminated in accordance with the provisions of this Agreement. 1.5 Amendment to Schedule 5(a). Effective on the Fourth Amendment Effective Date, 2025, Schedule 5(a) to the Agreement is hereby deleted in its entirety and replaced with the revised Schedule 5(a), attached hereto as Attachment I. II. GENERAL 2.1 Authority for Amendment. Each party hereby represents and warrants to the other that the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of such party and upon execution by all parties, will constitute a legal, binding obligation. 2.2 Effect of Amendment. Except as specifically amended hereby, the Agreement, and all terms contained therein, remains in full force and effect. The Agreement, as amended by this Amendment, constitutes the entire understanding of the parties with respect to the subject matter hereof. 2.3 Binding Effect; Severability. Each reference herein to a party hereto shall be deemed to include its successors and assigns, all of whom shall be bound by this Amendment and in whose favor the provisions of this Amendment shall inure. In case any one or more of the provisions contained in this Amendment shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 2.4 Further Assurances. The parties hereto agree to execute such other documents and instruments and to do such other and further things as may be necessary or desirable for the execution and implementation of this Amendment and the consummation of the transactions contemplated hereby and thereby. 2.5 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Utah, without regard to principles of conflicts of laws. 2.6 Counterparts. This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one agreement. [Remainder of page intentionally left blank]

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4 Execution Copy IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers, all as of the day and year first above written. SYNCHRONY BANK By: Name: Anthony S. Foster Its: Senior Vice President THE LOVESAC COMPANY By: Name: Keith Siegner Its: Chief Financial Officer

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5 Execution Copy Attachment 1 Schedule 5(a) To Retailer Program Agreement (Lovesac) Approved Credit-Based Promotions A. Non-Promotional Credit Offer: Retailer Fee Percentage: 0.00% B. Credit-Based Promotions: Table 1 – Retailer Fee Percentages in effect October 1, 2025 Promotional Term Retailer Fee Percentage With Pay/Deferred Interest Equal Pay/No Interest 6 Month 0.09% NA 12 Month 2.23% NA 18 Month 5.09% NA 24 Month 8.09% 8.28% 36 Month N/A 10.85% 48 Month N/A 13.36% 60 Month N/A 16.15% 72 Month N/A 19.01% The Retailer Fee Percentages set forth above may change as the Retailer Fee Percentages are revised as set forth in Section 5(c). Table 2 – Standard Retailer Fee Percentages at a Base Cost of Funds Index of 200 bps (2.00%) Promotional Term Retailer Fee Percentage With Pay/Deferred Interest Equal Pay/No Interest 6 Month -0.63% NA 12 Month 1.22% NA 18 Month 3.58% NA 24 Month 6.07% 7.13% 36 Month N/A 9.55% 48 Month N/A 11.63% 60 Month N/A 13.99% 72 Month N/A 16.42% The Retailer Fee Percentages set forth in Table 2 are subject to revision as set forth in in Section 5(c) and 5(e) and be effective on October 1, 2025.

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## Exhibit 10.24

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AMENDED AND RESTATED EMPLOYMENT AGREEMENT AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of February 23, 2026 (the "Agreement"), between The Lovesac Company, a Delaware corporation (the "Company") and Keith Siegner (the "Executive"). WHEREAS, the Company and Executive previously entered into that certain Employment Agreement dated as of March 18, 2023 (the "Prior Employment Agreement"); and WHEREAS, the Company is in the business of manufacturing, distributing and selling furniture in the retail market; WHEREAS, the Company wishes to assure itself of the management services of the Executive for the period provided in this Agreement, and the Executive desires to serve in the employ of the Company for such period and upon the terms and conditions hereinafter provided; and WHEREAS, the Company and Executive desire to memorialize the terms and conditions of the Executive's employment by a written agreement. IT IS THEREFORE AGREED AS FOLLOWS: 1. Employment Duties and Acceptance. 1.1 Employment by the Company. The Company shall employ the Executive, for itself and its subsidiaries and affiliates, for the Term (as herein defined), to render exclusive and full-time services in the capacity of Executive Vice President, Chief Financial Officer and Treasurer of the Company. 1.2 Duties/Authority. The Executive shall have such responsibilities, powers and duties substantially consistent with those customarily assigned to individuals serving in such position at comparable companies or as may be reasonably required by the conduct of the business of the Company. The Executive will report to Mary Fox, President of the Company. The Executive shall devote the Executive's full working time and efforts to the business and affairs of the Company. The Executive shall not, without the prior approval of the Company, whether for compensation or otherwise, directly or indirectly, alone or as a member of any partnership or other organization, be actively engaged in or concerned with any other business duties or personal pursuits which are in conflict with the Executive's duties to the Company (whether under this Agreement or otherwise). The Executive's reasonable participation in charitable organizations shall not be considered a violation of this provision. 1.3 Acceptance of Employment by the Executive. The Executive accepts such employment and shall render the services described above. Subject to appointment by the Board as such, the Executive may also serve during all or any part of the Term Exhibit 10.24

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&nbsp;&nbsp;&nbsp;&nbsp;as an officer of any other entity controlled by the Company, and as a director of the Company and of any other entity controlled by the Company, in each case without any compensation therefor other than that specified in this Agreement. 1.4 Place of Employment. The Executive's principal place of employment shall be at the Company's headquarters, subject to such reasonable travel as the rendering of the services hereunder may require. 2. Term of Employment. The stated term of employment under this Agreement (the "Term") shall commence on the date hereof and shall continue until terminated in accordance with Section 4 of this Agreement. 3. Compensation. 3.1 Salary. As compensation for all services to be rendered pursuant to this Agreement, the Company shall pay the Executive during the Term a salary of $560,000 per annum (the "Base Salary"), payable not less frequently than monthly, less such deductions as shall be required to be withheld by applicable rules and regulations. The Base Salary shall not preclude raises, equity compensation, annual bonus and other compensation or incentives, as set forth herein or, should the Board, in its sole and absolute discretion, so determine to provide such additional compensation or incentives to the Executive. The Executive's total compensation, including Base Salary, Annual Bonus and equity compensation opportunities shall be subject to annual review by the Board (or a compensation committee thereof) and adjustments considered based upon individual performance, market alignment or other factors. The Executive acknowledges and understands that the Board is under no obligation to increase any component of the Executive's total compensation pursuant to this review. 3.2 Annual Bonus. (a) The Company shall pay the Executive during the Term an annuai bonus with a target value of 70% of the Executive's Base Salary up to 140% of the Executive's Base Salary (except as otherwise provided below in this paragraph) ("Annual Bonus"), subject to the Company's achievements relative to certain performance targets established by the Board (or a compensation committee thereof) for the performance period, and individual performance, as applicable. The Annual Bonus will be determined by the Board after receipt of the Company's audited financials for the applicable year, and for the avoidance of doubt will be paid during the calendar year in which occurs the last day of the fiscal year with respect to which such Annual Bonus relates. The terms and conditions of Annual Bonuses shall be governed by the Company's Annual Incentive Compensation Plan. (b) The Executive must remain employed through the bonus payment date to receive any Annual Bonus; provided, however, that in the event of termination of the Executive's employment by the Company, for any reason other than for Cause (as defined below), and the performance targets are achieved in accordance

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&nbsp;&nbsp;&nbsp;&nbsp;with Section 3.2(a), and subject to the conditions set forth in Section 4.4, Annual Bonuses shall be awarded pro rata based on the proportion of such fiscal year served by the Executive. The Executive shall not be entitled to any such pro rata Annual Bonuses with respect to any fiscal year occurring after the fiscal year in which the Executive was terminated. 3.3 Equity Compensation. (a) Annual Equity Award. The Executive shall be eligible to receive a discretionary annual award of RSUs ("Annual RSUs") valued at $791,000, the terms of which shall be governed by the 2017 Plan, including any equity grant documents thereunder. Half of such Annual RSU award shall be subject to time-based vesting, and half shall be PRSUs. PRSUs are eligible to vest based on Company performance relative to metrics and targets set by the Board (or a compensation committee thereof) for the applicable fiscal year. Once vested, Annual RSUs are settled in shares of Company common stock and issued in three installments on or about the anniversary of the grant date provided that the Executive is employed by the Company on such date. (b) Long Term Performance Award. The Executive shall be eligible to receive a discretionary annual Long- Term Performance Award ("LTPA") valued up to $630,000 pursuant to the Company's LTPA Program, the terms of which shall be governed by the 2017 Plan, including any equity grant documents thereunder. LTPAs are eligible to vest based on the Company's achievements relative to accelerated performance targets set by the Board (or a compensation committee thereof) for a specific performance period. Once vested, LTPAs are settled in shares of Company common stock or cash and issued in a single installment on or about the anniversary of the grant date provided that the Executive is employed by the Company on such date. 3.4 Participation in Employee Benefit Plans. The Executive shall be permitted during the Term, if and to the extent eligible, to participate on the same terms in any group life, hospitalization or disability insurance plan, health program, retirement savings plan or similar benefit plan of the Company that is available generally to other senior executives and managers of the Company and its subsidiaries. The Board may determine to offer the Executive participation in stock, phantom stock or profit based bonus or similar plans, to the extent applicable, and may provide the Executive with additional fringe benefits. 3.5 Expenses. Subject to policies applicable to senior executives of the Company generally, as may from time to time be established by the Board, the Company shall pay or reimburse the Executive for reasonable travel, entertainment and other business expenses actually incurred or paid by the Executive during the Term in the performance of the Executive's services under this Agreement, and which expenses are consistent with the Company's policies in effect from time to time with respect to such travel, entertainment and other business expenses, upon presentation of expense statements or vouchers or such other supporting information

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&nbsp;&nbsp;&nbsp;&nbsp;as it may require. 3.6 Vacation. The Executive shall be entitled to participate in the Company's paid time off program for other executives 4. Termination. 4.1 Termination upon Death. If the Executive dies during the Term, this Agreement shall terminate. 4.2 Termination upon Disability. If during the Term the Executive becomes physically or mentally disabled, whether totally or partially, so that the Executive is unable substantially to perform Executive's services hereunder (as determined, in good faith, by a physician selected by the Board and reasonably acceptable to the Executive or the Executive's legal representative, which agreement as to acceptability will not be unreasonably delayed or withheld) for (a) a period of three (3) consecutive months, or (b) for shorter periods aggregating three (3) months during any six (6) month period, the Company may at any time after the last day of the three (3) consecutive months of disability or the day on which the shorter periods of disability equal an aggregate of three (3) months, by written notice to the Executive, terminate the Term of the Executive's employment hereunder. Nothing in this Section 4.2 shall be deemed to extend the Term. 4.3 Termination for Cause. The Company may at any time by written notice to the Executive terminate the Term of the Executive's employment hereunder for Cause and the Executive shall have no right to receive any compensation or benefit hereunder on and after the effective date of such notice except for the payment or provision, as applicable, of (a) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), (b) all unreimbursed expenses for which Executive is otherwise entitled to reimbursement pursuant to Section 3.5 (if any), and (c) other payments, entitlements or benefits (if any), in accordance with terms of the applicable plans, programs, arrangements or other agreements of the Company or any affiliate thereof (other than any severance plan or policy) as to which the Executive held rights to such payments, entitlements or benefits, whether as a participant, beneficiary or otherwise, on the date of termination ("Other Benefits"). For purposes hereof, the term "Cause" shall mean: (i) conviction of the Executive for any crime constituting a felony in the jurisdiction in which committed, or for any other criminal act against the Company or its subsidiaries involving dishonesty or willful misconduct intended to injure the Company or its subsidiaries (whether or not a felony and whether or not criminal proceedings are initiated); (ii) failure or refusal of the Executive in any material respect to perform the duties of the Executive's employment or to follow the lawful and proper directives of the President and Chief Executive Officer, provided such duties or directives are consistent with this Agreement and such failure or refusal continues uncured for a period of thirty (30) days after written notice thereof specifying the nature of such failure or refusal and requesting that it be cured is given by the Company to the Executive; (iii) breach by the Executive of the provisions of Sections 5.1, 5.2, 5.3, 5.4, 5.5, or 5.8; or (iv) any willful or intentional act of the Executive committed for the purpose, or having the reasonably foreseeable effect, of injuring the Company, its subsidiaries or their business or reputation or of improperly or unlawfully converting for the Executive's own personal benefit any property of the Company or the subsidiaries.

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&nbsp;&nbsp;&nbsp;&nbsp;4.4 Termination with Good Reason or without Cause. During the Term, (a) the Executive may terminate Executive's employment with the Company at any time with Good Reason (as defined below), and (b) the Company may terminate the Executive's employment without Cause, upon ten (10) days' written notice to the Executive. In either such case, provided the Executive has not breached and does not breach the provisions of Sections 5.1, 5.2, 5.3, 5.4, 5.5, or 5.8 and the Executive has entered into and not revoked a general release of claims without additional post-termination restrictions included therein in form reasonably satisfactory to the Company so that it becomes effective within sixty (60) days after the Executive's termination of employment, the Executive shall continue to receive (i) for a period of twelve (12) months immediately following the Executive's date of termination (A) the Executive's Base Salary as in effect on the date of such notice, payable in accordance with the Company's payroll schedule, and (B) coverage under the Company's group health plan under COBRA, if elected, paid for by the Company (or reimbursed for the premiums therefor), (ii) the payment or provision of Other Benefits, and (iii) coverage under the term life insurance policy (or be reimbursed for the premiums therefor) and the Company's directors' and officers' liability indemnification and insurance coverage. If the severance benefits hereunder are considered "deferred compensation" subject to Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") and the period to consider and revoke the release spans two tax years, the severance will begin to be paid in the second tax year even if the release becomes effective in the earlier tax year, and the first such payment shall include all payments that would have otherwise become payable prior to such first payment date if not for such restriction. For purposes of this Agreement, "Good Reason" means (1) the assignment to the Executive of duties and responsibilities not commensurate with the Executive's position with the Company, (2) the failure of the Company to provide compensation and benefits to the Executive as required herein, (3) a reduction in the Executive's Base Salary without the Executive's consent, or (4) the failure of the Company to adhere in any substantial manner to any of its other covenants herein; provided that any of the foregoing continues for a period of twenty (20) days after written notice thereof, specifying the nature thereof and requesting that it be cured, is given by the Executive to the Company. No severance will be paid for a "Good Reason" termination unless the Executive terminates employment within sixty (60) days after the first occurrence of the condition and the Company has not cured such condition within thirty (30) days after written notice thereof (which notice shall state that such condition constitutes Good Reason) from the Executive. 4.5 Voluntary Termination. The Executive may terminate the Executive's employment with the Company at any time in the Executive's sole and absolute discretion upon giving at least sixty (60) days advance written notice to such effect to the Company (a "Voluntary Termination"). In the event the Executive's employment is terminated during the Term by the Executive's Voluntary Termination (other than termination by the Executive for Good Reason), then the Executive shall be entitled only to receive the Executive's Base Salary payable through the date of such Voluntary Termination. 4.6 Compensation Upon Disability. In the event of termination of this Agreement by reason of disability as set forth in Section 4.2 hereof, the Company shall pay to the Executive, (a) the Executive's Base Salary as in effect on the date of termination for four (4) months immediately following the Executive's date of termination, payable in accordance with the provisions of Section 3.1 hereof, and (b) all benefits from the Company and its employee benefit plans earned and accrued as of such termination date.

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&nbsp;&nbsp;&nbsp;&nbsp;5 Confidentiality, Intellectual Property, Noncompete, Nonsolicitation, and Non-Disparagement. 5.1 Nondisclosure and Nonuse of Confidential Information. The Executive will not disclose or use at any time during or after the Term any Confidential Information (as defined below) of which the Executive is or becomes aware, whether or not such information is developed by the Executive, except to the extent that such disclosure or use is directly related to and required by the Executive's performance of duties assigned to the Executive pursuant to this Agreement. Under all circumstances and at all times, the Executive will take all appropriate steps to safeguard Confidential Information in the Executive's possession and to protect it against disclosure, misuse, espionage, loss and theft. For purposes hereof, "Confidential Information" means information that is not generally known to the public and that was or is used, developed or obtained by the Company or its subsidiaries in connection with their business. It shall not include information (a) required to be disclosed by court or administrative order, (b) lawfully obtainable from other sources or which is in the public domain through no fault of the Executive, or (c) the disclosure of which is consented to in writing by the Company. 5.2 Ownership of Intellectual Property. In the event that the Executive as part of the Executive's activities on behalf of the Company generates, authors or contributes to any invention, design, new development, device, product, method of process (whether or not patentable or reduced to practice or comprising Confidential Information), any copyrightable work (whether or not comprising Confidential Information) or any other form of Confidential Information relating directly or indirectly to the business of the Company as now or hereinafter conducted (collectively, "Intellectual Property"), the Executive acknowledges that such Intellectual Property is the sole and exclusive property of the Company and hereby assigns all right title and interest in and to such Intellectual Property to the Company. Any copyrightable work prepared in whole or in part by the Executive during the Term will be deemed "a work made for hire" under Section 201(b) of the Copyright Act of 1976, as amended, and the Company will own all of the rights comprised in the copyright therein. The Executive will promptly and fully disclose all Intellectual Property and will cooperate with the Company to protect the Company' interests in and rights to such Intellectual Property (including providing reasonable assistance in securing patent protection and copyright registrations and executing all documents as reasonably requested by the Company, whether such requests occur prior to or after termination of the Executive's employment hereunder). 5.3 Delivery of Materials upon Termination of Employment. As requested by the Company, from time to time and upon the termination of the Executive's employment with the Company for any reason, the Executive will promptly deliver to the Company all copies and embodiments, in whatever form or medium, of all Confidential Information or Intellectual Property in the Executive's possession or within Executive's control (including written records, notes, photographs, manuals, notebooks, documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all other materials containing any Confidential Information or Intellectual Property) irrespective of the location or form of such material and, if requested by the Company, will provide the Company with written confirmation that all such materials have been delivered to the Company. The Executive shall be permitted to retain a copy of this Agreement and other documents concerning the Executive's entitlement to compensation to enforce the terms of this Agreement or any other rights afforded by law to the Executive.

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&nbsp;&nbsp;&nbsp;&nbsp;5.4 Noncompetition. The Executive acknowledges that during Executive's employment with the Company, Executive will become familiar with trade secrets and other Confidential Information concerning the Company, its subsidiaries and their respective predecessors, and that Executive's services will be of special, unique and extraordinary value to the Company. In addition, the Executive hereby agrees that at any time during the Term, and after termination of employment, for the duration of the Noncompetition Period (as defined below), the Executive will not directly or indirectly own, manage, control, participate in, consult with, render services for or in any manner engage in any business competing with the businesses of the Company or its subsidiaries as such businesses exist or are in process or being planned as of the termination of employment, within any county in which the Company or its subsidiaries have operating locations, leases, options to lease or acquire property, or definitive plans known to the Executive at the time of termination to engage in such businesses. The "Noncompetition Period" shall be 12 months following the termination of employment. It shall not be considered a violation of this Section 5.4 for the Executive to be a passive owner of not more than 2% of the outstanding stock of any class of a corporation which is publicly traded, so long as the Executive has no active participation in the business of such corporation. 5.5 Nonsolicitation. The Executive hereby agrees that (a) during the Term and for a period of 12 months after the termination of employment (the "Nonsolicitation Period") the Executive will not, directly or indirectly through another entity, actively induce or attempt to induce any employee of the Company or its subsidiaries to leave the employ of the Company or its subsidiaries, or in any way interfere with the relationship between the Company or its subsidiaries and any employee thereof or otherwise employ or receive the services of any individual who was an employee of the Company or its subsidiaries at any time during such Nonsolicitation Period or within the three-month period prior thereto and (b) during the Nonsolicitation Period, the Executive will not induce or attempt to induce any customer, supplier, client, insurer, reinsurer, broker, licensee or other business relation of the Company or its subsidiaries to cease doing business with the Company or its subsidiaries. 5.6 Enforcement of Noncompete and Nonsolicitation. If, at the enforcement of Sections 5.4 or 5.5, a court holds that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances will be substituted for the stated duration, scope or area and that the court will be permitted to revise the restrictions contained in Sections 5.4 or 5.5 to cover the maximum duration, scope and area permitted by law. 5.7 Equitable Relief. The Executive acknowledges that (a) the covenants contained herein are reasonable, (b) the Executive's services are unique, and (c) a breach or threatened breach by him of any of Executive's covenants and agreements with the Company contained in Sections 5.1, 5.2, 5.3, 5.4, 5.5 or 5.8 could cause irreparable harm to the Company for which they would have no adequate remedy at law. Accordingly, and in addition to any remedies which the Company may have at law, in the event of an actual or threatened breach by the Executive of the Executive's covenants and agreements contained in Sections 5.1, 5.2, 5.3, 5.4, 5.5 or 5.8, the Company shall have the absolute right to apply to any court of competent jurisdiction for such injunctive or other equitable relief as such court may deem necessary or appropriate in the circumstances.

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&nbsp;&nbsp;&nbsp;&nbsp;5.8 Non-Disparagement. During the time that Executive is employed by the Company and thereafter, without limitation of time, Executive shall not at any time make, publish or communicate to any person or entity, including, but not limited to, the customers or suppliers of the Company or any of its affiliates, any Disparaging (as defined below) remarks, comments or statements concerning Company, any other equity holders of the Company, or any affiliates of any of the foregoing. The Company shall instruct its Directors and Officers not to make any Disparaging comments or statements concerning Executive. "Disparaging" remarks, comments or statements are those that impugn the character, honesty, integrity, morality, business acumen or abilities of the individual or entity being disparaged. 5.9 Nothing in this agreement prohibits or restricts the parties from contacting, assisting, responding to, providing truthful testimony to or filing charges with any regulatory organization, authority or agency (e.g., the EEOC, IRS, SEC or FINRA), or from complying with any court or administrative order or subpoena, or from providing any other disclosure required by law. Nothing in this Agreement prohibits or is intended to restrict or impede the Executive from discussing the terms and conditions of his employment with coworkers or union representatives, or exercising protected rights under Section 7 of the National Labor Relations Act, or exercising protected rights to the extent that such right cannot be waived by agreement, or otherwise disclosing information as permitted by law. Notwithstanding any provisions of this Agreement or Company policy applicable to the unauthorized use or disclosure of trade secrets, the Executive is hereby notified that, pursuant to the Defend Trade Secrets Act, the Executive cannot be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (b) solely for the purpose of reporting or investigating a suspected violation of law. The Executive also may not be held so liable for such disclosures made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the trade secret to the Executive's attorney and use the trade secret information in the court proceeding, if the Executive files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. 6 Other Provisions. 6.1 Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, via facsimile or other electronic means, sent by overnight delivery service with delivery signature required, or sent with return receipt requested by certified, registered, or express mail, postage prepaid to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice, and shall be deemed given when so delivered personally, upon confirmation of receipt when delivered via facsimile or other electronic means, or if mailed, two days after the date of mailing, as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;if to the Company, at: The Lovesac Company 421 Atlantic Street Suite 201, Stamford, CT 06901 Attention: Head of People Department Copy to: The Lovesac Company 421 Atlantic Street Suite 201, Stamford, CT 06901 Attention: General Counsel legal@lovesac.com if to the Executive, to the Executive at: 65 Whitney Street Westport, CT 06880 Each of the foregoing shall be entitled to specify a different address by giving notice as aforesaid to each of the other persons or entities listed above. 6.2 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the parties and supersedes and nullifies any prior understandings, agreements or representations by or among the parties, written or oral, that may have related in any way to the subject matter hereof including, without limitation, any prior employment agreement or separation agreement. 6.3 Waivers and Amendments. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties making specific reference to this Agreement, or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;6.4 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with and subject to, the laws of the State of Connecticut applicable to agreements made and to be performed entirely within such state. 6.5 Acknowledgments. The Executive acknowledges that the Executive has read this entire Agreement, has had the opportunity to consult with an attorney, and fully understands the terms of this Agreement. The Executive is satisfied with the terms of this Agreement and agrees that its terms are binding upon the Executive and the Executive's heirs, assigns, executors, administrators, and legal representatives. 6.6 Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and permitted assigns. No rights or obligations of the Executive under this Agreement may be assigned or transferred by the Executive other than the Executive's right to compensation and benefits hereunder, which may be transferred by will or operation of law subject to the limitations of this Agreement. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation or amalgamation or scheme of arrangement in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes by operation of law or in writing duly executed by the assignee or transferee all of the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter oflaw, as if no such assignment or transfer had taken place. Failure of the Company to obtain such express assumption and agreement at or prior to the effectiveness of any such assignment, merger, consolidation, amalgamation or scheme of arrangement shall be a breach of this Agreement and shall entitle the Executive to such compensation and benefits from the Company in the same amount and on the same terms to which the Executive would be entitled hereunder if the Company had terminated Executive's employment without Cause. 6.7 Counterparts. This Agreement may be executed in two or more counterparts (which may be effectively delivered by facsimile or other electronic means), each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 6.8 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement 6.9 Severability. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

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&nbsp;&nbsp;&nbsp;&nbsp;6.10 Section 409A. (a) If the Company determines in good faith that any prov1s10n of this Agreement would cause the Executive to incur an additional tax, penalty, or interest under Section 409A of the Code and the applicable guidance thereunder ("Section 409A"), the Company and the Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A or causing the imposition of such additional tax, penalty, or interest under Section 409A. The preceding provision, however, shall not be construed as a guarantee by the Company of any particular tax effect to the Executive under this Agreement. (b) "Termination of employment," or words of similar import, as used in this Agreement means, for purposes of any payments under this Agreement that are payments of deferred compensation subject to Section 409A, the Executive's "separation from service" as defined in Section 409A. For purposes of Section 409A, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. (c) With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, the Executive, as specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (i) the expenses eligible for reimbursement or the amount of in- kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Section 105(b) of the Code, (ii) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. If a payment obligation under this Agreement or other compensation arrangement arises on account of Executive's separation from service while the Executive is a "specified employee" (as defined under Section 409A and determined in good faith by the Compensation Committee of the Board), any payment of deferred compensation" (as defined under Treasury Regulation Section l.409A-l(b)(l), after giving effect to the exemptions in Treasury Regulation Sections l.409A-l(b)(3) through (b)(12)) that is scheduled to be paid within six (6) months after such separation from service shall accrue without interest and shall be paid within fifteen (15) days after the end of the six (6)-month period beginning on the date of such separation from service or, if earlier, within fifteen (15) days after the appointment of the personal representative or executor of the Executive's estate following his death.

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&nbsp;&nbsp;&nbsp;&nbsp;6.11 Attorneys Fees. The prevailing party in any litigation between the Company and the Executive concerning the parties' employment relationship and/or any claim arising from this Agreement shall be entitled to an award of the reasonable legal fees and disbursements incurred by such party. IN WITNESS WHEREOF, the parties have executed this Agreement the date first above written. The Lovesac Company _____________________________ Mary Fox President Executive _________________________________ Keith Siegner Mary Fox (Feb 23, 2026 12:53:03 PST)

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## Exhibit 19.1

![](insidertradingpolicyamen001.jpg)

THE LOVESAC COMPANY INSIDER TRADING POLICY (As amended September 9, 2025) This Insider Trading Policy describes the standards of The Lovesac Company and its subsidiaries, if any (the "Company"), on trading, and causing the trading of, the Company's securities or securities of certain other publicly traded companies while in possession of confidential information. This Policy is divided into two parts: the first part prohibits trading in certain circumstances and applies to all of the Company's directors, officers, employees and other agents and members of the forgoing persons' respective immediate family members and households, and the second part imposes special additional trading restrictions and applies to all (i) directors of the Company, (ii) executive officers of the Company and (iii) the employees or roles listed on Appendix A (collectively, "Covered Persons"). One of the principal purposes of the federal securities laws is to prohibit so-called "insider trading." Simply stated, insider trading occurs when a person uses material nonpublic information obtained through involvement with the Company to make decisions to purchase, sell, give away or otherwise trade the Company's securities or to provide that information to others outside the Company. The prohibitions against insider trading apply to trades, tips and recommendations by virtually any person, including all persons associated with the Company, if the information involved is "material" and "nonpublic." These terms are defined in this Policy under Part I, Section 3 below. The prohibitions would apply to any director, officer or employee who buys or sells Company stock on the basis of material nonpublic information that he or she obtained about the Company, its customers, suppliers, or other companies with which the Company has contractual relationships or may be negotiating transactions. PART I 1. Applicability This Policy applies to all trading or other transactions in the Company's securities, including common stock, options and any other securities that the Company may issue, such as preferred stock, notes, bonds and convertible securities, as well as to derivative securities relating to any of the Company's securities, whether or not issued by the Company. This Policy applies to all directors, officers, employees and other agents of the Company and their respective immediate family members, members of their households, dependents and any other individuals or entities whose transactions in securities they influence, direct or control (collectively "you" or "your"). You are responsible for making sure that these individuals and entities comply with this Policy. 2. General Policy: No Trading or Causing Trading While in Possession of Material Nonpublic Information (a) You may not purchase or sell, or offer to purchase or sell, any Company security, whether or not issued by the Company, while in possession of material nonpublic information about the Company. (The terms "material" and "nonpublic" are defined in Part I, Section 3(a) and Exhibit 19.1

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2 (b) below). (b) If you know of any material nonpublic information about the Company, you may not communicate that information to ("tip") any other person, including family members and friends, or otherwise disclose such information without the Company's authorization. (c) You may not purchase or sell any security of any other company, whether or not issued by the Company, while in possession of material nonpublic information about that company that was obtained in the course of your involvement with the Company. If you know of any such material nonpublic information, you may not communicate that information to, or tip, any other person, including family members and friends, or otherwise disclose such information without the Company's authorization. (d) For compliance purposes, you should never trade, tip or recommend securities (or otherwise cause the purchase or sale of securities) while in possession of information that you have reason to believe is material and nonpublic unless you first consult with, and obtain the advance approval of, the Compliance Officer (which is defined in Part I, Section 3(c) below). (e) Covered Persons must "pre-clear" all trading in securities of the Company in accordance with the procedures set forth in Part II, Section 4 below. 3. Definitions (a) Material. Insider trading restrictions come into play only if the information you possess is "material." Materiality, however, involves a relatively low threshold. Information is generally regarded as "material" if it has market significance, that is, if its public dissemination is likely to affect the market price of securities, or if it otherwise is information that a reasonable investor would want to know before making an investment decision. Material information can be positive or negative and can relate to virtually any aspect of a company's business or to any type of security, debt or equity. Some common examples of information that may be material include:  Financial results and financial condition;  significant changes in the Company's prospects;  significant write-downs in assets or increases in reserves;  developments regarding significant litigation or government agency investigations;  changes in liquidity;  changes in earnings estimates or unusual gains or losses in major operations;  major changes in management;  changes in dividends;  extraordinary borrowings;  award or loss of a significant contract;  changes in debt ratings;

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3  proposals, plans or agreements, even if preliminary in nature, involving mergers, acquisitions, divestitures, recapitalizations, strategic alliances, licensing arrangements, or purchases or sales of substantial assets;  offerings of Company securities;  pending statistical reports (such as, consumer price index, money supply and retail figures, or interest rate developments); and  information relating to significant cybersecurity risks or incidents. The above list is not exhaustive, and many other types of information may be considered "material" depending on the circumstances. Material information is not limited to historical facts but may also include projections and forecasts. With respect to a future event, such as a merger, acquisition or introduction of a new product, the point at which negotiations or product development are determined to be material is determined by balancing the probability that the event will occur against the magnitude of the effect the event would have on a Company's operations or stock price should it occur. Thus, information concerning an event that would have a large effect on stock price, such as a merger, may be material even if the possibility that the event will occur is relatively small. When in doubt about whether particular nonpublic information is material, you should presume it is material. If you are unsure whether information is material, you should consult the Compliance Officers before making any decision to disclose such information or to trade in or recommend securities to which that information relates. (b) Nonpublic. Insider trading prohibitions come into play only when you possess information that is material and "nonpublic." The fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. To be "public" the information must have been widely disseminated in a manner designed to reach investors generally, and the investors must be given the opportunity to absorb the information. Even after public disclosure of information about the Company, you must wait until the close of business on the second trading day after the information was publicly disclosed before you can treat the information as public. Nonpublic information may include: (i) information available to a select group of analysts or brokers or institutional investors; (ii) undisclosed facts that are the subject of rumors, even if the rumors are widely circulated; and (iii) information that has been entrusted to the Company on a confidential basis until a public announcement of the information has been made and enough time has elapsed for the market to respond to a public announcement of the information (normally two (2) trading days). As with questions of materiality, if you are not sure whether information is considered public, you should either consult with the Compliance Officers or assume that the information is nonpublic and treat it as confidential. (c) Compliance Officers. The Company has appointed the Chief Financial Officer and General Counsel as the Compliance Officers for this Policy. The duties of the Compliance Officers include, but are not limited to, the following:

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4 (i) assisting with implementation and enforcement of this Policy; (ii) circulating this Policy to all employees and ensuring that this Policy is amended as necessary to remain up-to-date with insider trading laws; (iii) pre-clearing all trading in securities of the Company by Covered Persons in accordance with the procedures set forth in Part II, Section 4 below; and (iv) providing approval of any Rule 10b5-1 plans under Part II, Section 1(c) below and any prohibited transactions under Part II, Section 5 below. (v) providing a reporting system with an effective whistleblower protection mechanism. 4. Exceptions The trading restrictions of this Policy do not apply to the following: (a) 401(k) Plan. Investing 401(k) plan contributions in a Company stock fund in accordance with the terms of the Company's 401(k) plan. However, any changes in your investment election regarding the Company's stock are subject to trading restrictions under this Policy. (b) Options. Exercising options to purchase Company shares granted under the Company's applicable equity incentive plan for cash or the delivery of previously owned Company shares. However, the sale of any shares issued on the exercise of Company-granted options and any cashless exercise of Company-granted options are subject to trading restrictions under this Policy. 5. Violations of Insider Trading Laws Penalties for trading on or communicating material nonpublic information can be severe, both for individuals involved in such unlawful conduct and their employers and supervisors, and may include jail terms, criminal fines, civil penalties and civil enforcement injunctions. Given the severity of the potential penalties, compliance with this Policy is absolutely mandatory. (a) Legal Penalties. A person who violates insider trading laws by engaging in transactions in a company's securities when he or she has material nonpublic information can be sentenced to a substantial jail term, subject to disgorgement of profits and required to pay a criminal penalty of several times the amount of profits gained or losses avoided. In addition, a person who tips others may also be liable for transactions by the tippees to whom he or she has disclosed material nonpublic information. Tippers can be subject to the same penalties and sanctions as the tippees, and the SEC has imposed large penalties even when the tipper did not profit from the transaction. The SEC can also seek substantial civil penalties from any person who, at the time of an insider trading violation, "directly or indirectly controlled the person who committed such violation," which would apply to the Company and/or management and supervisory personnel. These control persons may be held liable for up to the greater of $1.2 million or three times the amount of the profits gained or losses avoided plus, in the case of entities, a criminal penalty of up to $2.5 million. Even for violations that result in a small or no profit, the SEC can seek penalties from a company and/or its management and supervisory personnel as control persons.

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5 (b) Company-imposed Penalties. Employees who violate this Policy may be subject to disciplinary action by the Company, including dismissal for cause. Any exceptions to the Policy, if permitted, may only be granted by the Compliance Officers and must be provided before any activity contrary to the above requirements takes place. 6. Inquiries If you have any questions regarding any of the provisions of this Policy, please contact the Compliance Officers. PART II 1. Blackout Periods All Covered Persons are prohibited from trading in the Company's securities during blackout periods as defined below. (a) Quarterly Blackout Periods. Trading in the Company's securities is prohibited during the period beginning at the close of the market on two weeks before the end of each fiscal quarter and ending at the close of business on the trading day following the date the Company's financial results are publicly disclosed and Form 10-Q or Form 10-K is filed. For example, if the Company filed its Form 10-Q on Thursday, December 11, the trading window would open at the close of business on Friday, December 12. During these periods, you generally possess or are presumed to possess material nonpublic information about the Company's financial results. (b) Other Blackout Periods. From time to time, other types of material nonpublic information regarding the Company (such as negotiation of mergers, acquisitions or dispositions or new product developments) may be pending and not be publicly disclosed. While such material nonpublic information is pending, the Company may impose special blackout periods during which you are prohibited from trading in the Company's securities. If the Company imposes a special blackout period that affects you, you will be notified. (c) Exception. These trading restrictions do not apply to transactions under a pre- existing written plan, contract, instruction, or arrangement under Rule 10b5-1 under the Securities Exchange Act of 1934 (an "Approved 10b5-1 Plan") provided that such Approved 10b5-1 Plan complies with the requirements set forth in Part II, Section 3 below and in SEC Rule 10b5-1 as then in effect. 2. Trading Window You are permitted to trade in the Company's securities when no blackout period is in effect. Generally, this means that you can trade during the period beginning on the day that blackout period under Section 1(a) ends and ending on the day that the next blackout period under Section 1(a) begins. However, even during this trading window, if you are in possession of any material nonpublic information you should not trade in the Company's securities until the information has been made publicly available or is no longer material. In addition, the Company may close this

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6 trading window if a special blackout period under Part II, Section 1(b) above is imposed and will re-open the trading window once the special blackout period has ended. 3. Pre-Arranged Trading Plans SEC Rule 10b5-1(c) provides a defense from insider trading liability if trades occur pursuant to a pre-arranged "trading plan" that meets specified conditions. Under this rule, if you enter into and operated a binding contract, an instruction or a written plan in good faith that specifies the amount, price and date on which securities are to be purchased or sold, and if these arrangements are established in accordance with the terms of Rule 10b5-1 and at a time when you do not possess material, non-public information relevant to such trades, then the transactions under the trading plan will be exempt from the trading restrictions set forth in this Policy. Arrangements under Rule 10b5-1(c) may specify the amount, price and date through a formula or may specify trading parameters which another person has discretion to administer, but you must not exercise any subsequent discretion affecting the transactions, and if your broker or any other person exercises discretion in implementing trades, you must not influence his or her actions and he or she must not possess any relevant material, non- public information at the time of the trades. Covered Persons must represent in such trading plans that they are not aware of any material, non-public information about the Company and are entering such trading plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5. Trading plans can be established for a single trade or a series of trades, however no more than one single-trade trading plan may be entered into in any 12- month period. Covered Persons may only have one trading plan in place for purchases or sales during any one period, except in limited circumstances in accordance with SEC rules and after specific approval by the Compliance Officers. It is important that you properly document the details of a trading plan. In addition to the trading plan requirements described above, there are a number of additional procedural conditions to Rule 10b5-1(c) that must be satisfied before you can rely on a trading plan as an affirmative defense against an insider trading charge. These requirements include, among others: (a) that you act in good faith; (b) that you not modify your trading instructions while you possess relevant material, non-public information; and (c) that you not enter into or alter a corresponding or hedging transaction or position. Because Rule 10b5-1(c) is complex, you must be sure that you fully understand the applicable limitations and conditions under Rule 10b5-1 before you establish a trading plan. A Covered Person may only enter into or modify a trading plan if (a) it is precleared by the Compliance Officers; (b) at a time that the Covered Person is not in possession of material, non-public information; and (c) only during a trading window period outside of the blackout period that applies to the Covered Person. Consistent with the requirements of Rule 10b5-1, the Company requires a waiting period (a "cooling-off period") between the establishment of a trading plan and the commencement of trading under such trading plan. The cooling-off period must be, (a) for Section 16 reporting persons, at least the later of (i) 90 days, or (ii) two business days following the disclosure in a periodic report of the Company's financial results for the fiscal period in which the trading plan was adopted, subject to a maximum of 120 days and, (b) for all other Covered Persons, 30 days. Consistent with the requirements of Rule 10b5-1, the cooling-off periods are also required for modifications of a trading plan that changes the amount of shares subject to the trading plan,

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7 the transaction price or the timing of the transaction. For other types of trading plan modifications, the Company requires a cooling-off period of 30 days between the modification and commencement of trading under such plan. The Compliance Officers will review a proposed trading plan to determine if the plan is in compliance with this Policy. If the Compliance Officers deem appropriate, a review of any trading plan or modification may be considered by the Audit Committee prior to approval. Revocation of a trading plan should occur only in unusual circumstances. Effectiveness of any revocation or amendment of a trading plan will be subject to the prior review and approval of the Compliance Officers. Revocation is effected upon written notice to the broker and, once a trading plan has been revoked, the participant must wait at least 30 days before trading outside of a trading plan and comply with the applicable cooling-off period for establishing a new plan discussed in the preceding paragraph. Under certain circumstances, a trading plan must be revoked. This may include circumstances such as the announcement of a merger or the occurrence of an event that would cause the transaction either to violate the law or to have an adverse effect on the Company. The Compliance Officers and the administrator of the Company's stock plans are authorized to notify the broker in such circumstances, thereby insulating the insider in the event of revocation. All trading plans entered into or terminated by a Section 16 reporting person of the Company will be disclosed in the Company's next Form 10-Q or Form 10-K. 4. Pre-clearance of Securities Transactions (a) Because Covered Persons are likely to obtain material nonpublic information on a regular basis, the Company requires all such persons to refrain from trading, even during a trading window under Part II, Section 2 above, without first pre-clearing all transactions in the Company's securities. (b) Subject to the exemption in subsection (d) below, no Covered Person may, directly or indirectly, purchase or sell (or otherwise make any transfer or gift of) any Company security at any time without first obtaining prior approval from a Compliance Officer. The attached pre- clearance form shall be used for this purpose. These procedures also apply to transactions by such Covered Person's spouse, other persons living in such person's household and minor children and to transactions by individuals or entities over which such person exercises influence, directs or controls. (c) Unless revoked, a grant of permission will normally remain valid until the close of trading two business days following the day on which it was granted. If the transaction does not occur during the two-day period, pre-clearance of the transaction must be re-requested. (d) Pre-clearance is not required for purchases and sales of securities under an Approved 10b5-1 Plan. With respect to any purchase or sale under an Approved 10b5-1 Plan, the third-party effecting transactions on behalf of the Covered Person should be instructed to send duplicate confirmations of all such transactions to the Compliance Officers.

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8 5. Prohibited Transactions (a) Covered Persons are prohibited from trading in the Company's equity securities during a blackout period imposed under an "individual account" retirement or pension plan of the Company, during which at least 50% of the plan participants are unable to purchase, sell or otherwise acquire or transfer an interest in equity securities of the Company, due to a temporary suspension of trading by the Company or the plan fiduciary. (b) Covered Persons, including any such person's spouse, other persons living in such person's household and minor children and individuals or entities over which such person exercises influence, directs or control, are prohibited from engaging in the following transactions in the Company's securities unless advance approval is obtained from the Board of Directors for transactions involving directors and executive officers of the Company, or the Compliance Officers for transactions involving such other roles listed on Appendix A: (i) Short-term trading. Covered Persons who purchase or sell Company securities may not transact in an opposite purchase or sale of any Company securities of the same class for at least six months after the purchase; (ii) Short sales. Covered Persons may not sell the Company's securities short; (iii) Options trading. Covered Persons may not buy or sell puts or calls or other derivative securities on the Company's securities; (iv) Trading on margin or pledging. Covered Persons may not hold Company securities in a margin account or pledge Company securities as collateral for a loan; and (v) Hedging. Covered Persons may not enter into hedging or monetization transactions or similar arrangements with respect to Company securities. 6. Acknowledgment and Certification Persons subject to this Policy are required to sign the attached acknowledgment and certification.

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## Exhibit 23.1

**Exhibit 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in Registration Statement No. 333-280583 on Form S-8 of our reports dated April 2, 2026, relating to the financial statements of The Lovesac Company and the effectiveness of The Lovesac Company's internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended February 1, 2026.

/s/ Deloitte & Touche LLP

Stamford, CT

April 2, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO**

**EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Shawn Nelson, certify that:

1. I have reviewed this Annual Report on Form 10-K of The Lovesac Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: April 2, 2026 | Signed: | /s/ Shawn Nelson |
| | Name: | Shawn Nelson |
| | Title: | Chief Executive Officer |
| | | (Principal Executive Officer) |

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO**

**EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Keith Siegner, certify that:

1. I have reviewed this Annual Report on Form 10-K of The Lovesac Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: April 2, 2026 | Signed: | /s/ Keith Siegner |
| | Name: | Keith Siegner |
| | Title: | Executive Vice President and Chief Financial Officer |
| | | (Principal Financial Officer and Principal Accounting Officer) |

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Shawn Nelson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K of The Lovesac Company for the fiscal year ended February 1, 2026, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of The Lovesac Company.

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| | | |
|:---|:---|:---|
| Date: April 2, 2026 | Signed: | /s/ Shawn Nelson |
| | Name: | Shawn Nelson |
| | Title: | Chief Executive Officer |
| | | (Principal Executive Officer) |

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## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Keith Siegner, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K of The Lovesac Company for the fiscal year ended February 1, 2026, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of The Lovesac Company.

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| | | |
|:---|:---|:---|
| Date: April 2, 2026 | Signed: | /s/ Keith Siegner |
| | Name: | Keith Siegner |
| | Title: | Executive Vice President and Chief Financial Officer |
| | | (Principal Financial Officer and Principal Accounting Officer) |

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