The allowance for sales returns and charge backs was $367 and $756 as of September 30, 2026 and December 31, 2025, respectively, and included in "Accounts receivable, net" on the consolidated balance sheets.

Our assets that are potentially subject to concentrations of credit risk are cash and accounts receivable. Cash balances are maintained in financial institutions, which at times exceed federally insured limits. We monitor the financial condition of the financial institutions in which our accounts are maintained and have not experienced any losses in such accounts. Our accounts receivable are spread over a number of customers, of which two customers and their affiliates accounted for 42% of total outstanding receivables as of September 30, 2026, and one customer and its affiliate accounted for 37% of total outstanding receivables as of December 31, 2025. We perform ongoing credit evaluations as to the financial condition of our customers and creditors with respect to trade accounts.


	September 30,		December 31,
	2026		2025
	(unaudited)		(audited)
Coffee and Energy:
Unroasted	$	2,939	$	3,519
Finished Goods	29,590		20,144
RTD, raw materials	42		3,935
RTD, finished goods	7,550		17,943
Apparel and other merchandise	2,085		4,162
Total inventories, net	$	42,206	$	49,703

As of September 30, 2026 and December 31, 2025, we reported $46,384 and $50,312 of other assets on the consolidated balance sheets, respectively, related to prepaid advertising credits received in exchange for inventory. We measured the non-cash consideration of the prepaid advertising credits based on the standalone selling price of the finished goods inventory at the time of transfer to the counterparty. Based upon the period over which we expect to use these advertising credits, $5,880 of these credits were current as of both September 30, 2026 and December 31, 2025, and have been recorded as "Prepaid expenses and other current assets" on the consolidated balance sheets, and $40,504 and $44,432 were non-current as of September 30, 2026 and December 31, 2025, respectively, and have been recorded as "Non-current prepaid marketing expenses" on the consolidated balance sheets.

Prepaid advertising credits are recorded upon revenue recognition, coinciding with the transfer of the inventory. The revenue recognized related to shipments of inventory in exchange for prepaid advertising credits was insignificant for both the three and nine months ended September 30, 2026 and $992 and $1,398 for the three and nine months ended September 30, 2025, respectively, on the consolidated statements of operations.


	September 30,		December 31,
	2026		2025
	(unaudited)		(audited)
Computer equipment and software	$	14,796	$	19,927
Building and leasehold improvements	8,083		24,216
Machinery and equipment	4,436		19,694
Furniture and fixtures	1,963		2,887
Vehicles	756		809
Land	—		110
Construction in progress	1,175		8,584
Property, plant, and equipment, gross	31,209		76,227
Less: accumulated depreciation and amortization	(18,761)		(33,372)
Total property, plant, and equipment, net	$	12,448	$	42,855

The following table summarizes the depreciation expense for internal use software recognized in general and administrative expense within the consolidated statements of operations (dollars in thousands, unaudited):

During the third quarter of 2026, we committed to a plan to dispose of the assets of our Manchester, Tennessee roasting facility (the "Manchester Plant"). On October 29, 2026, subsequent to the end of the third quarter of 2026, we signed an agreement to sell the Manchester Plant to Cascade Coffee, LLC for a base purchase price of $17,000, consisting of $10,000 of cash and a $7,000 note receivable to be collected on the one year anniversary of the closing of the sale. As a result, we have classified the Property Plant and Equipment (the disposal group) associated with the Manchester Plant as current "Assets held for sale" on our consolidated balance sheets as of September 30, 2026.

During the third quarter of 2026, management committed to Project Core, a multi-year initiative intended to strengthen our core coffee business, improve profitability, simplify our operations and reduce the capital intensity of our business. As part of Project Core, we modified leases for eight operating locations to substantially shorten their remaining terms. As a result, we tested the related long-lived assets, and the assets for other Outpost locations with indicators of impairment for recoverability and recognized a non-cash impairment loss of $11,698, consisting of $9,011 related to property, plant and equipment and $2,687 related to the associated operating lease right-of-use assets, which reduced their carrying values to their estimated fair value of $0 and $1,087, respectively. We estimated fair value using a discounted cash flow model, a Level 3 measurement, with significant unobservable inputs including estimated sublease income over the remaining lease terms and a discount rate of 10%.

We also remeasured the related lease liabilities for those leases that were modified during the third quarter which resulted in a reduction of right of use asset of $8,750 and a recognition of a $3,219 gain on modification of leases for the three months ended September 30, 2026.

The loss on impairment of assets and the gain from the lease modifications are presented within “Other operating expense, net” and the lease modification fees were recorded as part of "General and administrative" expense on our consolidated statements of operations.


	September 30,		December 31,
	2026		2025
	(unaudited)		(audited)
Accrued compensation and benefits	$	6,912	$	5,919
Accrued trade	4,248		2,587
Accrued inventory purchases	571		843
Accrued freight	1,689		4,333
Accrued software contracts	2,081		4,024
Accrued professional fees	2,282		2,761
Deferred purchase incentive	2,628		2,506
Accrued marketing	2,879		2,330
Accrued donations	885		1,709
Accrued sales and other taxes	1,041		1,137
Other accrued expenses	4,821		4,306
Total accrued liabilities	$	30,037	$	32,455

The purchase incentive was received in conjunction with a co-manufacturing agreement and will be recognized as a reduction of cost of sales based on units sold through 2029. $2,628 of the deferred purchase incentive is classified as current as of September 30, 2026 based upon the amount expected to be recognized in the next twelve months, while $5,096 is classified as long-term and is recorded in “Other non-current liabilities” on our consolidated balance sheets as of September 30, 2026.

The following table provides information about deferred revenue, gift cards, and the BRCC Loyalty Points rewards program (the "Loyalty Program"), including significant changes in deferred revenue balances for the below designated periods (dollars in thousands, unaudited):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Balance as of beginning of period	$	2,902	$	3,770	$	4,033	$	3,918
Sales of gift cards	86		88		344		521
Redemption of gift cards	(133)		(93)		(370)		(645)
Increase from deferral of revenue	1,309		2,946		1,309		2,946
Decrease from revenue recognition	(1,408)		(1,738)		(2,525)		(1,784)
Loyalty Program points earned	182		361		620		1,021
Loyalty Program points redeemed/expired	(296)		(665)		(769)		(1,308)
Balance as of end of period	$	2,642	$	4,669	$	2,642	$	4,669