COMMITMENTS AND CONTINGENCIES

Purchase Obligations. There were no material changes outside the ordinary course of business during the three

months ended June 30, 2026, to the Company’s purchase obligations disclosed in the 2026 Annual Report.

Contingencies. Except as noted below, there were no material changes outside the ordinary course of business

during the three months ended June 30, 2026, to the Company’s contingencies disclosed in Note 8, “Commitments

and Contingencies,” in the Company’s consolidated financial statements in Part IV of the 2026 Annual Report.

Tariff Refunds. In February 2026, the US Supreme Court invalidated tariffs imposed under the International

Emergency Economic Power Act (IEEPA). In March 2026, the US Court of International Trade subsequently issued

an order directing US Customs and Border Protection (CBP) to refund IEEPA tariffs that were previously collected.

In April 2026, CBP released the Consolidated Administration and Processing Entries (CAPE) functionality to

facilitate a phased approach to process IEEPA tariff refunds. Subsequent to June 30, 2026, the Company began

filing for refunds of previously paid IEEPA tariffs pursuant to the CAPE Phase 2 administrative refund process

announced in June 2026.

The Company previously paid an aggregate gross amount of approximately $120,000 in IEEPA tariffs. The net effect

that any tariff refunds may have on the Company’s condensed consolidated financial statements may be less than

the gross amount of IEEPA tariffs as a result of a number of factors, including accommodations provided under cost-

sharing arrangements with independent manufacturers, income taxes payable on refunds received, and other

relevant factors. In addition, the amount and timing of receipt of refunds are subject to uncertainty as a result of

potential changes in the CBP claims process, and further legal challenges to current and proposed tariff regimes.

The Company will apply a gain contingency model in accordance with Accounting Standards Codification Topic 450,

Contingencies, to account for potential refunds of previously paid tariffs. Under this model, a gain contingency is not

recognized in the condensed consolidated financial statements until the gain is realized or realizable. If tariff refunds

are ultimately received or otherwise become realizable, the Company will evaluate the appropriate accounting

treatment under US GAAP based on the facts and circumstances existing at that time, including the nature of the

recovery, applicable tax impacts, cost-sharing or other arrangements with independent manufacturers, and other

relevant factors. The Company may also consider such developments in connection with future business decisions.

As of June 30, 2026, and as of the date of this Quarterly Report, the Company has not recognized any receivable

and corresponding reduction to cost of sales related to any IEEPA tariff refunds or related interest in its condensed

consolidated financial statements. The Company continues to closely monitor these developments and assess the

potential impact on its condensed consolidated financial statements.

The Company was named as a defendant in two purported consumer class actions relating to alleged tariff-related

pricing actions and potential governmental tariff reimbursements. The Company intends to defend these matters