UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

☐ 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: 001-37523

PURPLE INNOVATION, INC.

(Exact name of registrant as specified in its charter)

Delaware		47-4078206
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4100 NORTH CHAPEL RIDGE ROAD SUITE 200

LEHI, UTAH

84043

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (801) 756-2600

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	PRPL	The NASDAQ Stock Market LLC
Preferred Stock Purchase Rights	N/A	The NASDAQ Stock Market LLC

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 Date 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, a 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 Rule12b-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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 28, 2025, 108,243,946 shares of the registrant’s Class A common stock, $0.0001 par value per share, and 164,982 shares of the registrant’s Class B common stock, $0.0001 par value per share, were outstanding.

PURPLE INNOVATION, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

			Page
Part I.	Financial Information		1
	Item 1.	Financial Statements (Unaudited):	1
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Operations	2
		Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	3
		Condensed Consolidated Statements of Cash Flows	4
		Notes to Condensed Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
	Item 4.	Controls and Procedures	41

Part II.	Other Information		42
	Item 1.	Legal Proceedings	42
	Item 1A.	Risk Factors	42
	Item 5.	Other Information	45
	Item 6.	Exhibits	46
	Signatures		47

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PURPLE INNOVATION, INC.

Condensed Consolidated Balance Sheets

(unaudited – in thousands, except for par value)

	June 30, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	34,248		$	29,011
Accounts receivable, net		21,083			33,057
Inventories		60,903			56,863
Prepaid expenses		4,017			6,023
Other current assets		5,680			1,414
Total current assets		125,931			126,368
Property and equipment, net		87,374			93,874
Operating lease right-of-use assets		73,313			75,516
Intangible assets, net		7,577			8,890
Other long-term assets		9,593			3,197
Total assets	$	303,788		$	307,845

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	25,963		$	40,639
Accrued compensation		6,632			9,415
Customer prepayments		8,490			6,411
Accrued rebates and allowances		10,941			10,013
Accrued warranty liabilities – current portion		7,774			6,114
Operating lease obligations – current portion		16,274			15,661
Other current liabilities		8,362			12,750
Total current liabilities		84,436			101,003
Related party debt		94,539			55,394
Accrued warranty liabilities, net of current portion		24,945			26,091
Operating lease obligations, net of current portion		84,651			87,072
Warrant liabilities		28,925			16,067
Other long-term liabilities		1,871			2,009
Total liabilities		319,367			287,636
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit):
Class A common stock; $0.0001 par value, 210,000 shares authorized; 108,244 issued and outstanding at June 30, 2025, and 107,545 issued and outstanding at December 31, 2024		11			11
Class B common stock; $0.0001 par value, 90,000 shares authorized; 165 issued and outstanding at June 30, 2025, and at December 31, 2024		—			—
Additional paid-in capital		594,698			594,053
Accumulated deficit		(610,348	)		(573,866	)
Total stockholders’ equity (deficit) attributable to Purple Innovation, Inc.		(15,639	)		20,198
Noncontrolling interest		60			11
Total stockholders’ equity (deficit)		(15,579	)		20,209
Total liabilities and stockholders’ equity (deficit)	$	303,788		$	307,845

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

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Operations

(unaudited – in thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenues, net	$	105,100		$	120,271		$	209,271		$	240,304
Cost of revenues:
Cost of revenues		67,340			71,331			129,547			149,644
Cost of revenues - restructuring related charges		77			—			995			—
Total cost of revenues		67,417			71,331			130,542			149,644
Gross profit		37,683			48,940			78,729			90,660
Operating expenses:
Marketing and sales		30,616			41,377			67,242			82,839
General and administrative		14,991			18,117			29,478			37,845
Research and development		2,178			3,986			4,630			7,652
Restructuring, impairment and other related charges		4,137			—			6,097			—
Total operating expenses		51,922			63,480			107,447			128,336
Operating loss		(14,239	)		(14,540	)		(28,718	)		(37,676	)
Other income (expense):
Interest expense		(7,457	)		(4,161	)		(12,221	)		(8,635	)
Other income, net		1			53			70			4,447
Loss on extinguishment of debt		—			—			—			(3,394	)
Change in fair value – warrant liabilities		4,378			18,693			4,427			(4,906	)
Total other income (expense), net		(3,078	)		14,585			(7,724	)		(12,488	)
Net income (loss) before income taxes		(17,317	)		45			(36,442	)		(50,164	)
Income tax expense		(54	)		(54	)		(95	)		(113	)
Net loss		(17,371	)		(9	)		(36,537	)		(50,277	)
Net loss attributable to noncontrolling interest		(26	)		(36	)		(55	)		(87	)
Net income (loss) attributable to Purple Innovation, Inc.	$	(17,345	)	$	27		$	(36,482	)	$	(50,190	)

Net income (loss) per share:
Basic	$	(0.16	)	$	0.00		$	(0.34	)	$	(0.47	)
Diluted	$	(0.16	)	$	(0.00	)	$	(0.34	)	$	(0.47	)

Weighted average common shares outstanding:
Basic		108,230			107,489			107,915			106,755
Diluted		108,230			107,779			107,915			106,755

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

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(unaudited – in thousands)

															Total
	Class A Common Stock				Class B Common Stock				Additional Paid-in			Accumulated			Stockholders’ Equity			Noncontrolling			Total Equity
	Shares		Par Value		Shares		Par Value		Capital			Deficit			(Deficit)			Interest			(Deficit)
Balance – December 31, 2024		107,545	$	11		165	$	—	$	594,053		$	(573,866	)	$	20,198		$	11		$	20,209
Net loss		—		—		—		—		—			(19,137	)		(19,137	)		(29	)		(19,166	)
Stock-based compensation		—		—		—		—		368			—			368			—			368
Issuance of stock under equity compensation plans		410		—		—		—		(81	)		—			(81	)		—			(81	)
Impact of transactions affecting NCI		—		—		—		—		(8	)		—			(8	)		8			—
Balance – March 31, 2025		107,955	$	11		165	$	—	$	594,332		$	(593,003	)	$	1,340		$	(10	)	$	1,330
Net loss		—		—		—		—		—			(17,345	)		(17,345	)		(26	)		(17,371	)
Stock-based compensation		—		—		—		—		477			—			477			—			477
Issuance of stock under equity compensation plans		289		—		—		—		(100	)		—			(100	)		—			(100	)
Accrued Distribution True-up		—		—		—		—		85			—			85			—			85
Impact of transactions affecting NCI		—		—		—		—		(96	)		—			(96	)		96			—
Balance – June 30, 2025		108,244	$	11		165	$	—	$	594,698		$	(610,348	)	$	(15,639	)	$	60		$	(15,579	)

	Class A				Class B				Additional						Total
	Common Stock				Common Stock				Paid-in			Accumulated			Stockholders’			Noncontrolling			Total
	Shares		Par Value		Shares		Par Value		Capital			Deficit			Equity			Interest			Equity
Balance – December 31, 2023		105,507	$	11		205	$	—	$	591,380		$	(475,969	)	$	115,422		$	185		$	115,607
Net loss		—		—		—		—		—			(50,217	)		(50,217	)		(51	)		(50,268	)
Stock-based compensation		—		—		—		—		492			—			492			—			492
Issuance of stock for Intellibed acquisition		1,500		—		—		—		—			—			—			—			—
Issuance of stock under equity compensation plans		473		—		—		—		(115	)		—			(115	)		—			(115	)
Impact of transactions affecting NCI		—		—		—		—		(33	)		—			(33	)		33			—
Balance – March 31, 2024		107,480	$	11		205	$	—	$	591,724		$	(526,186	)	$	65,549		$	167		$	65,716
Net income (loss)		—		—		—		—		—			27			27			(36	)		(9	)
Stock-based compensation		—		—		—		—		825			—			825			—			825
Issuance of common stock under equity compensation plans		23		—		—		—		—			—			—			—			—
Impact of transactions affecting NCI		—		—		—		—		(8	)		—			(8	)		8			—
Balance – June 30, 2024		107,503	$	11		205	$	—	$	592,541		$	(526,159	)	$	66,393		$	139		$	66,532

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

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited – in thousands)

	Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(36,537	)	$	(50,277	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		9,881			12,821
Non-cash interest		5,656			3,372
Paid-in-kind interest		6,797			4,375
Non-cash restructuring, impairment and other related charges		3,816			—
Loss on extinguishment of debt		—			3,394
Loss on disposal of property and equipment		224			112
Change in fair value – warrant liabilities		(4,427	)		4,906
Stock-based compensation		845			1,317
Changes in operating assets and liabilities:
Accounts receivable		11,974			5,719
Inventories		(4,040	)		(2,779	)
Prepaid expenses and other assets		2,671			4,665
Operating leases, net		(1,018	)		(1,340	)
Accounts payable		(17,111	)		(9,522	)
Accrued compensation		(2,783	)		4,122
Customer prepayments		2,079			(986	)
Accrued rebates and allowances		(2,572	)		(4,608	)
Accrued warranty liabilities		514			(159	)
Other accrued liabilities		(3,031	)		(862	)
Net cash used in operating activities		(27,062	)		(25,730	)

Cash flows from investing activities:
Sale of property and equipment		363			—
Purchase of property and equipment		(5,222	)		(5,142	)
Investment in intangible assets		(285	)		(111	)
Net cash used in investing activities		(5,144	)		(5,253	)

Cash flows from financing activities:
Proceeds from related party loan		39,000			61,000
Payments on term loan		—			(25,000	)
Payments on revolving line of credit		—			(5,000	)
Payments for debt issuance costs		(1,557	)		(3,466	)
Net cash provided by financing activities		37,443			27,534

Net increase (decrease) in cash and cash equivalents		5,237			(3,449	)
Cash and cash equivalents, beginning of the year		29,011			26,857
Cash and cash equivalents, end of the period	$	34,248		$	23,408

Supplemental disclosures of cash flow information:
Cash paid during the period for interest, net of amounts capitalized	$	81		$	203
Cash paid during the period for income taxes	$	165		$	293

Supplemental schedule of non-cash investing and financing activities:
Property and equipment included in accounts payable	$	435		$	375
Warrants issued	$	17,284		$	19,571
Amendment fee added to principal of loan	$	1,215		$	—

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

PURPLE INNOVATION, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Organization

The mission of Purple Innovation, Inc. (the “Company” or “Purple Inc.”) is to deliver the greatest sleep ever invented.

The Company, collectively with its subsidiary Purple Innovation, LLC (“Purple LLC”) is an omni-channel company that began as a digitally-native vertical brand founded on comfort product innovation with premium offerings, and have since expanded into brick & mortar stores as a true omni-channel brand. The Company offers a variety of innovative, branded and premium comfort products, including mattresses, pillows, cushions, bases, sheets and other products. The Company markets and sells its products through its direct-to-consumer e-commerce channels, retail brick-and-mortar wholesale partners, Purple showrooms, and third-party online retailers.

The Company was incorporated in Delaware on May 19, 2015, as a special purpose acquisition company under the name of Global Partnership Acquisition Corp (“GPAC”). On February 2, 2018, the Company consummated a transaction structured similar to a reverse recapitalization (the “Business Combination”) pursuant to which the Company acquired a portion of the equity of Purple LLC. At the closing of the Business Combination (the “Closing”), the Company became the sole managing member of Purple LLC, and GPAC was renamed Purple Innovation, Inc.

As the sole managing member of Purple LLC, Purple Inc. through its officers and directors is responsible for all operational and administrative decision making and control of the day-to-day business affairs of Purple LLC without the approval of any other member.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of Purple Inc., its controlled subsidiary Purple LLC, and Purple LLC’s wholly owned subsidiary Advanced Comfort Technologies, Inc., dba Intellibed (“Intellibed”). All intercompany balances and transactions have been eliminated in consolidation. As of June 30, 2025, Purple Inc. held 99.85% of the common units of Purple LLC and Purple LLC Class B Unit holders held 0.15% of the common units in Purple LLC.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The unaudited condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which were considered of normal recurring nature) considered necessary to present fairly the Company’s financial results. The results of the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2025, or for any other interim period or other future year.

Liquidity

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. In connection with its preparation of the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to its ability to continue as a going concern within one year after the date of the issuance of such financial statements. The Company had cash and cash equivalents of approximately $34.2 million and an accumulated deficit of $610.3 million at June 30, 2025, a net loss of $36.5 million and net cash used in operating and investing activities of $32.2 million for the six months ended June 30, 2025. During the first six months of 2025, the Company entered into the 2025 Amendment (as defined below) and the Second 2025 Amendment (as defined below) of the Amended and Restated Credit Agreement, pursuant to which it received an aggregate of $39.0 million in additional term loan proceeds.

The Company has also taken a number of other actions to increase cash flow. In August 2024, the Company implemented the Restructuring Plan (as defined below) to consolidate manufacturing operations to create efficiencies and cost savings. The Company has realized and plans to continue to realize direct material cost savings through supply chain initiatives and supplier diversification efforts. The Company has taken additional cost-saving initiatives in the first half of 2025 to maintain liquidity to support its operations and strategies. Additionally, the Company entered into an agreement with Mattress Firm, Inc. (“Mattress Firm”), a business unit of Somnigroup International, Inc. (“SGI”) to expand its inventory of the Company’s products across SGI’s national store network from approximately 5,000 mattress slots to a minimum of 12,000 mattress slots (see Note 13 — Commitments and Contingencies, SGI Commercial Arrangements).

Accordingly, the Company concluded that it will have sufficient liquidity to fund its operations for at least one year from the date of this Quarterly Report on Form 10-Q.

Although the Company currently expects its sources of capital to be sufficient to meet its near-term liquidity needs, there can be no assurance that such sources will be sufficient to satisfy its liquidity requirements in the future, including the related party loan due December 31, 2026 (see Note 10 — Debt). If the Company cannot generate or obtain needed funds, it might be forced to make substantial reductions in its operating and capital expenses or pursue restructuring plans, which could adversely affect its business operations and ability to execute its current business strategy.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Variable Interest Entities

Purple LLC is a variable interest entity. The Company determined that it is the primary beneficiary of Purple LLC as it is the sole managing member and has the power to direct the activities most significant to Purple LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At June 30, 2025, Purple Inc. had a 99.85% economic interest in Purple LLC and consolidated 100% of Purple LLC’s assets, liabilities and results of operations in the Company’s unaudited condensed consolidated financial statements contained herein. The holders of Class B Units of Purple LLC (“Class B Units”) held 0.15% of the economic interest in Purple LLC as of June 30, 2025. For further discussion see Note 15 — Stockholders’ Equity.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The Company regularly makes estimates and assumptions including, but not limited to, estimates that affect revenue recognition, accounts receivable and the allowance for credit losses, valuation of inventories, sales returns, warranty returns, impairment reviews of long-lived assets and definite-lived intangible assets, warrant liabilities, stock based compensation, the recognition and measurement of loss contingencies, the recognition and measurement of restructuring and related charges, estimates of current and deferred income taxes, deferred income tax valuation allowances, and amounts associated with the Company’s tax receivable agreement with InnoHold, LLC (“InnoHold”). Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. Actual results could differ materially from those estimates.

Segment Information

The Company operates in one operating segment. This is consistent with the organizational structure and internal reporting evaluated regularly by the Company’s Chief Executive Officer who is our chief operating decision maker (“CODM”) when making operational decisions and allocating resources. For additional information regarding the Company’s segment reporting, refer to Note 20 – Segment Information and Concentrations.

Recent Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU amends existing income tax disclosure guidance, primarily requiring more detailed disclosures for income taxes paid and the effective tax rate reconciliation. This ASU is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption. The guidance was effective for the Company as of January 1, 2025, and the new disclosure requirements will be effective in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2025. Other than the new disclosure requirements, this guidance is not expected to have an impact on the Company’s consolidated financial statements.

Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the consolidated financial statements. The prescribed cost and expense categories requiring disaggregated disclosures include purchases of inventory, employee compensation, depreciation and intangible asset amortization, along with certain other expense disclosures already required by GAAP that would need to be integrated within the new tabular disaggregated expense disclosures. Additionally, the amendments also require the disclosure of total selling expenses and an entity’s definition of those expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the potential impact this update will have on its expense disclosures in the notes to the consolidated financial statements.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

3. Restructuring, Impairment and Other Related Charges

In August 2024, the Company initiated a restructuring plan to strategically realign the Company’s focus on the achievement of operational efficiencies that are expected to improve profitability and provide for reinvesting in technology and marketing initiatives (the “Restructuring Plan”). The Company’s Restructuring Plan includes the permanent closure of its Grantsville and Salt Lake City, Utah manufacturing facilities to consolidate mattress production in its Georgia plant, and a headcount reduction at the Company’s Utah headquarters to drive additional operating efficiencies. The consolidation into the Georgia facility was finalized in December 2024 and the closure of the two Utah manufacturing facilities was completed in May 2025. The reduction in workforce at the Utah headquarters was completed in August 2024.

The following table summarizes the restructuring, impairment and other related charges the Company has recognized since the restructuring announcement in 2024 through the second quarter of 2025 in its consolidated statement of operations (in thousands):

	Cost of Revenues		Operating Expenses		Restructuring, Impairment and Other Related Charges		Total
Cash charges:
Employee-related costs	$	241	$	942	$	3,451	$	4,634
Other costs		688		—		2,250		2,938
Total cash charges		929		942		5,701		7,572
Non-cash charges:
Accelerated depreciation		11,482		—		135		11,617
Inventory write-downs		4,026		—		—		4,026
Write-down of long-lived assets		—		—		6,112		6,112
Impairment of assets		—		—		13,916		13,916
Total non-cash charges		15,508		—		20,163		35,671
Total restructuring, impairment and other related charges	$	16,437	$	942	$	25,864	$	43,243

Of the $7.6 million of employee-related and other cash charges incurred since inception of the restructuring activities, the Company recognized $0.8 million and $2.8 million during the three and six months ended June 30, 2025. Similarly, of the combined charges incurred related to accelerated depreciation, write-down of long-lived assets and impairment of assets of $31.6 million since the inception of the restructuring activities, the Company recognized $3.4 million and $4.3 million during the three and six months ended June 30, 2025. Finally, of the inventory write-downs recognized since inception of the restructuring activities of $4.0 million, no charges were recorded during the three and six months ended June 30, 2025.

Accelerated depreciation primarily represents $11.6 million of increased depreciation expense associated with shortening the useful lives of the production equipment and leasehold improvements at the two Utah manufacturing facilities that were closed to reflect the remaining period these assets will remain in service.

The $6.1 million write-down of long-lived assets represents the write-down to salvage value of other property and equipment located at the two Utah manufacturing facilities that were closed.

Impairment of assets included impairment charges of $5.4 million associated with the closing and subleasing of the Salt Lake City, Utah and Grantsville, Utah manufacturing facilities and related impairment charges associated with certain leasehold improvements of the properties. The fair values of the impaired assets were determined by the Company to be Level 3 under the fair value hierarchy (refer to Note 4— Fair Value Measurements for the definition of Level 3 inputs) and were estimated based on internal expertise related to current marketplace conditions and estimated future discounted cash flows. These assets were adjusted to their estimated fair values at the time of impairment. If estimated fair values subsequently decline, the carrying values of the assets will be adjusted accordingly.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Impairment of assets also included the write-off of an $8.5 million indefinite-lived intangible asset. Initiating the Restructuring Plan was determined to be a triggering event for potential impairment of this asset. As a result of the impairment assessment performed, the Company determined this indefinite-lived intangible asset was impaired and recorded an impairment charge to write off the entire $8.5 million balance.

The lease for the Company’s Grantsville, Utah manufacturing facility included a five-year renewal option that was reasonably certain of being exercised and was included in the lease term when the Right of Use (“ROU”) asset and lease liability were originally measured. Because of the closure of this facility as part of the Restructuring Plan, the renewal option will not be exercised and a reassessment of the lease terms was completed. As a result, the original lease term was shortened and the Company recorded a $10.5 million reduction to the ROU asset and corresponding lease liability in the 2024 consolidated balance sheet, using the applicable discount rate at the effective date of the reassessment.

The following table summarizes activity for the six months ended June 30, 2025 associated with employee-related and other costs recorded pursuant to the Restructuring Plan, as presented in the indicated line item of the consolidated statement of operations, that will be settled in cash and are included in accounts payable or accrued compensation on the unaudited condensed consolidated balance sheets (in thousands):

Liability balance at December 31, 2024	$	993
Employee-related costs – restructuring charges		354
Other costs – restructuring charges		1,779
Cash paid		(2,800	)
Liability balance at June 30,2025	$	326

The following table summarizes the estimated restructuring and other related charges associated with the Restructuring Plan to be recognized in the future (in thousands):

	Cost of Revenues		Operating Expenses		Restructuring, Impairment and Other Related Charges		Total
Cash charges	$	—	$	—	$	400	$	400
Non-cash charges		—		—		500		500
Total estimated charges to be recognized in future ^(a)	$	—	$	—	$	900	$	900

(a)

These charges include certain estimates that are provisional and include management judgments and assumptions that could change materially as the Company completes the execution of the Restructuring Plan. Actual results may differ from these estimates, and the completion of the plan could result in additional restructuring, impairment or other related charges not reflected above.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

4. Fair Value Measurements

The Company uses the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are:

Level 1—Quoted market prices in active markets for identical assets or liabilities;

Level 2—Significant other observable inputs (i.e., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable, such as interest rate and yield curves, and market-corroborated inputs); and

Level 3—Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions.

The classification of fair value measurements within the established three-level hierarchy is based upon the lowest level of input that is significant to the measurements. Financial instruments, although not recorded at fair value on a recurring basis include cash and cash equivalents, receivables, accounts payable and the Company’s debt obligations. The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value because of the short-term nature of these accounts.

The estimated fair value of the Company’s debt arrangements is based on Level 2 and Level 3 inputs. Level 2 inputs include observable inputs such as market-based expectations for interest rates, credit risk and volatility. The unobservable Level 3 inputs are associated with the required rate of return for the security implied by the May 2025 issuance of debt bundled with warrants, which were valued using a Monte Carlo model and the timing and probability of a warrant reprice event, like a strategic alternative transaction. As of June 30, 2025, the estimated fair value of the Company’s debt arrangements was $90.3 million.

The significant inputs to the valuation model were as follows:

	June 30,
	2025
Interest rate volatility		8 - 21	%
Risk free interest rate		3.84	%
SOFR interest rate		4.36	%
Discount rate		39 – 43	%

The warrant liabilities (see Note 11 — Warrant Liabilities for more information) are Level 3 instruments and use internal models to estimate fair value using certain significant unobservable inputs which require determination of relevant inputs and assumptions. Accordingly, changes in these unobservable inputs may have a significant impact on fair value. Such inputs include risk free interest rate, expected average life, expected dividend yield, expected volatility and the timing and probability of a warrant reprice event. These Level 3 liabilities generally decrease (increase) in value based upon an increase (decrease) in risk free interest rate and expected dividend yield. Conversely, the fair value of these Level 3 liabilities generally increases (decreases) in value if the expected average life or expected volatility were to increase (decrease).

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The following table summarizes the Company’s total Level 3 liability activity for the six months ended June 30, 2025 (in thousands):

Fair value as of December 31, 2024	$	16,067
Initial measurement at time of issuance⁽¹⁾		17,285
Change in valuation inputs⁽²⁾		(4,427	)
Fair value as of June 30, 2025	$	28,925

(1)	The Company issued 6.2 million warrants on March 12, 2025, and 14.6 million warrants on May 2, 2025. See Note 11 – Warrant Liabilities.

(2)	Changes in valuation inputs are recognized as the change in fair value – warrant liabilities in the unaudited condensed consolidated statement of operations.

5. Revenue from Contracts with Customers

The Company markets and sells its products through direct-to-consumer e-commerce channels, Purple showrooms, retail brick-and-mortar wholesale partners, and third-party online retailers. Revenue is recognized when the Company satisfies its performance obligations under the contract which involves transferring the promised products to the customer, subject to shipping terms.

Disaggregated Revenue

The Company classifies revenue as either direct-to-consumer (“DTC”) or wholesale revenue. DTC revenues include the e-commerce channel which sells directly to consumers who purchase online, through the contact center, and through online marketplaces and the showrooms channel that sells directly to consumers who purchase at a Purple showroom location. The wholesale channel includes all product sales to the Company’s retail brick and mortar and online wholesale partners where consumers make purchases at their retail locations or through their online channels.

The following tables present the Company’s revenue disaggregated by sales channel (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Sales Category	2025		2024		2025		2024
e-commerce	$	43,084	$	48,666	$	88,481	$	98,140
Showrooms		15,769		18,197		33,755		34,938
Wholesale		46,247		53,408		87,035		107,226
Revenues, net	$	105,100	$	120,271	$	209,271	$	240,304

Contract Balances

Payments for the sale of products through the direct-to-consumer e-commerce channel, Purple showrooms and our contact center are collected at point of sale in advance of shipping the products. The amounts received for unshipped products are recorded as customer prepayments. Customer prepayments totaled $8.5 million and $6.4 million at June 30, 2025, and December 31, 2024, respectively. During the six months ended June 30, 2025, the Company recognized all of the revenue that was deferred in customer prepayments at December 31, 2024.

6. Inventories

Inventories consisted of the following (in thousands):

	June 30,		December 31,
	2025		2024
Raw materials	$	19,316	$	20,193
Work-in-process		4,333		6,602
Finished goods		37,254		30,068
Inventories	$	60,903	$	56,863

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

7. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	June 30,			December 31,
	2025			2024
Equipment	$	73,216		$	70,900
Equipment in progress		13,086			13,130
Leasehold improvements		58,674			57,936
Furniture and fixtures		30,025			32,699
Office equipment		1,624			1,611
Total property and equipment		176,625			176,276
Accumulated depreciation		(89,251	)		(82,402	)
Property and equipment, net	$	87,374		$	93,874

Equipment in progress reflects equipment, primarily related to mattress manufacturing, which is being constructed and was not in service at June 30, 2025, or December 31, 2024. Interest capitalized on borrowings during the active construction period of major capital projects totaled $0.1 million and $0.3 million during the three and six months ended June 30, 2025, respectively, and totaled $0.3 million and $0.7 million during the three and six months ended June 30, 2024, respectively. Depreciation expense was $4.1 million and $8.3 million during the three and six months ended June 30, 2025, respectively, and was $5.1 million and $10.3 million during the three and six months ended June 30, 2024, respectively. Included in depreciation expense for the three and six months ended June 30, 2025, was $0.1 million and $0.4 million, respectively, related to accelerated depreciation associated with the Restructuring Plan. See Note 3— Restructuring and Impairment Charges for further discussion.

8. Leases

The Company leases its manufacturing and distribution facilities, corporate offices, Purple showrooms and certain equipment under non-cancelable operating leases with various expiration dates through 2036. The Company’s office and manufacturing leases provide for initial lease terms up to 16 years, while Purple showrooms have initial lease terms of up to 10 years. Certain leases may contain options to extend the term of the original lease. The exercise of lease renewal options is at the Company’s discretion. Any lease renewal options are included in the lease term if exercise is reasonably certain at lease commencement. The Company also leases vehicles and other equipment under both operating and finance leases with initial lease terms of three to five years. The ROU asset for finance leases totaled $0.9 million and $1.0 million at June 30, 2025, and December 31, 2024, respectively.

The following table presents the Company’s lease costs (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2025			2024		2025			2024
Operating lease costs	$	4,569		$	5,178	$	9,349		$	9,964
Variable lease costs		1,162			1,173		2,204			2,042
Short term lease cost		63			—		105			—
Sublease income		(637	)		—		(932	)		—
Total lease costs	$	5,157		$	6,351	$	10,726		$	12,006

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The table below reconciles the undiscounted cash flows for each of the first five years and total remaining years to the operating lease liabilities recorded on the unaudited condensed consolidated balance sheet at June 30, 2025 (in thousands):

2025 (excluding the six months ended June 30,2025)^(a)	$	10,860
2026		22,242
2027		19,702
2028		19,525
2029		16,820
Thereafter		34,270
Total operating lease payments		123,419
Less – lease payments representing interest		(22,494	)
Present value of operating lease payments	$	100,925

(a)	Amount consists of $11.2 million of undiscounted cash flows offset by $0.3 million of tenant improvement allowances which are expected to be fully utilized in fiscal 2025.

As of June 30, 2025, and December 31, 2024, the weighted-average remaining term of operating leases was 6.6 years and 6.8 years, respectively, and the weighted-average discount rate of operating leases was 6.18% and 6.09%, respectively.

The following table provides supplemental information related to the Company’s unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2025, and 2024 (in thousands):

	Six Months Ended June 30,
	2025		2024
Cash paid for amounts included in present value of operating lease liabilities ^(b)	$	7,318	$	8,388
Right-of-use assets obtained in exchange for operating lease liabilities		7,305		2,981

(b)

Operating cash flows paid for operating leases are included within the change in operating leases, net within the unaudited condensed consolidated statement of cash flows offset by non-cash ROU asset amortization and lease liability accretion.

9. Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	June 30,		December 31,
	2025		2024
Accrued sales returns	$	3,066	$	6,515
Accrued sales and use tax and property tax		2,579		3,059
Insurance financing		820		1,328
Asset retirement obligation		1,132		1,440
Other		765		408
Total other current liabilities	$	8,362	$	12,750

10. Debt

Debt consisted of the following (in thousands):

	June 30,			December 31,
	2025			2024
Related party loan	$	117,691		$	70,679
Less: unamortized debt issuance costs		(23,152	)		(15,285	)
Total debt		94,539			55,394
Current portion of debt and unamortized issuance costs		—			—
Debt, net of current portion	$	94,539		$	55,394

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

2024 Credit Agreement

On January 23, 2024, Purple LLC, Purple Inc. and Intellibed (collectively, the “Loan Parties”) entered into an amended and restated credit agreement (the “Amended and Restated Credit Agreement”), which amended and restated the then existing term loan agreement (“Term Loan Agreement”), with Coliseum Capital Partners (“CCP”) and other lenders (collectively, the “Lenders”) and Delaware Trust Company, as administrative agent. The Lenders agreed to assume the Loan Parties’ obligations under the Term Loan Agreement and refinance their existing obligations. A term loan in the amount of $61.0 million (the “Related Party Loan”) was funded by the Lenders that repaid in full the $25.0 million of term loans outstanding, repaid in full the $5.0 million of asset based lending loans outstanding, paid fees, premiums and expenses incurred in connection with this transaction, and provided net proceeds to the Company (after payments of outstanding debt, unpaid accrued interest and expenses) equal to approximately $27.0 million. Interest on the Related Party Loan is payable each month and the principal outstanding matures and is due on December 31, 2026. The Company has elected for interest to be capitalized and added to the principal amount of the loan. The Related Party Loan bears interest at a rate equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York plus 0.10%, with a floor of 3.5% per annum, plus (ii) 8.25% per annum (or, if Purple LLC elects to pay interest in kind to reduce it cash obligations, 10.25% per annum). Any prepayments of principal on or after August 7, 2024, but before August 7, 2025, are subject to a prepayment penalty of 1.25%, and any prepayments of principal on or after August 7, 2025, are subject to a prepayment penalty of 2.50%. The Loan Parties may request an additional term loan from the Lenders in an aggregate amount not to exceed $19.0 million on terms requested by them to the extent agreed to by the Lenders at their discretion. The Amended and Restated Credit Agreement also removed restrictions and requirements typically associated with an asset-based loan. Total fees and expenses of $3.5 million were recorded as debt issuance costs in the first quarter of 2024 and are being amortized over the life of the loan.

In connection with the Amended and Restated Credit Agreement, the Company issued 20.0 million warrants (the “2024 Warrants”) to the Lenders (see Note 11 – Warrant Liabilities). These 2024 Warrants include full-ratchet anti-dilution protections, subject to a floor of $0.8502 with respect to adjustments to the exercise price and expire on January 23, 2034. The 2024 Warrants had a fair value of $19.6 million upon issuance and were recorded as a debt discount and are being amortized over the life of the loan.

The Amended and Restated Credit Agreement granted a security interest to the Lenders in substantially all of the assets (subject to certain limited exceptions) of the Loan Parties to secure the Loan Parties’ loans and other obligations under the Amended and Restated Credit Agreement, including a security interest in the intellectual property owned by the Loan Parties.

The Loan Parties (other than Purple LLC) provided an unconditional guaranty of the payment of all obligations and liabilities of Purple LLC under the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement also provides for standard indemnification of the Lenders and contains representations, warranties and certain covenants of the Loan Parties. While any amounts are outstanding under the Amended and Restated Credit Agreement, the Loan Parties are subject to a number of affirmative and negative covenants, including covenants regarding dispositions of property, investments, forming or acquiring subsidiaries, business combinations or acquisitions, incurrence of additional indebtedness and transactions with affiliates, among other customary covenants. The Loan Parties are also restricted from paying dividends or making other distributions or payments on their capital stock, subject to limited exceptions.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

2025 Amendment

On March 12, 2025, the Loan Parties, entered into the First Amendment to the Amended and Restated Credit Agreement (the “2025 Amendment” and the Amended and Restated Credit Agreement as so amended, the “Amended A&R Credit Agreement”) with CCP and Blackwell Partners LLC – Series A (“Blackwell”) (collectively the “2025 Lenders”), which amends the Amended and Restated Credit Agreement. The 2025 Amendment, among other things, provides for an increase in the initial principal amount of the Related Party Loan by $19.0 million (the “First Incremental Loan”) from an initial Related Party Loan principal amount of $61.0 million to an initial aggregate principal amount of $80.0 million, and allows the Loan Parties to request one or more additional term loans from the 2025 Lenders in an initial aggregate principal amount not to exceed $20.0 million on terms to be agreed to by the parties and subject to the approval of the Required Lenders (as defined in the Amended and Restated Credit Agreement). The First Incremental Loan will bear interest at the same rate as the Initial Loan (as defined in the Amended and Restated Credit Agreement), which may be paid in cash or in kind at the Company’s option.

The 2025 Amendment also provides that (i) the First Incremental Loan shall be senior in right of repayment to the Related Party Loan and (ii) in any voluntary or mandatory prepayment in part or in full of the First Incremental Loan for any reason, the Company will be required to pay an amount equal to the greater of (i) the Make-Whole Premium (as defined below) and (ii) 2.50% of the aggregate principal amount of the First Incremental Loan so prepaid, replaced or assigned. The “Make-Whole Premium” is determined as follows: on the date of prepayment, the excess of (A) (x) 100% of the principal amount of such First Incremental Loan, plus (y) the present value at such date of all remaining scheduled interest payments due on such First Incremental Loan from the prepayment date through the maturity date, assuming that all such interest accrues at the Make-Whole Premium Rate (as defined in the 2025 Amendment), computed using a discount rate equal to the Treasury Rate as of such prepayment date plus 50 basis points, over (B) the principal amount of such First Incremental Loan on such prepayment date.

The 2025 Amendment requires prepayment from certain amounts of proceeds received by the Company related to asset dispositions, equity issuances, incurrence of indebtedness, and extraordinary receipts. Additionally, upon an event of default, the 2025 Lenders may declare all or any portion of the term loan then outstanding to be accelerated and due and payable, immediately, including the prepayment premium. The Company determined that these features qualify as a derivative and must be bifurcated from the debt, but such value is de minimis. The Company will reassess whether the derivative has more than a de minimis value at each reporting period.

The 2025 Amendment also includes contingent interest upon an event of default at a rate of 2%. Certain non-credit related factors qualify as a derivative and must be bifurcated from the debt, but such value is de minimis.

In addition, the Company also paid (i) an amendment fee equal to 2% of the outstanding principal and accrued and unpaid interest under the Related Party Loan held by the 2025 Lenders, paid in kind and (ii) a 2% work fee of the initial aggregate principal amount of the First Incremental Loan paid to the 2025 Lenders, deducted from the proceeds at closing. Total fees and expenses of $2.1 million were recorded as a debt discount upon issuance of the Incremental Loan and are being amortized over the life of the loan.

In connection with the 2025 Amendment, the Company issued to the 2025 Lenders, warrants (the “2025 Warrants”) to purchase 6.2 million shares of the Company’s Class A common stock at a price of $1.50 per share, subject to certain adjustments (see Note 11 – Warrant Liabilities). These 2025 Warrants include full-ratchet anti-dilution protections, subject to a floor of $0.6979 with respect to adjustments to the exercise price and expire on March 12, 2035. The 2025 Warrants had a fair value of $5.4 million upon issuance and were recorded as a debt discount upon issuance of the Incremental Loan and is being amortized over the life of the loan.

The 2025 Amendment was evaluated and determined to be a modification of debt since the 2025 Lenders did not grant a concession as the effective borrowing rate was not reduced, and the 2025 Amendment terms were not substantially different from the Amended and Restated Credit Agreement.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Second 2025 Amendment

On May 2, 2025, the Loan Parties entered into a Second Amendment to the Amended and Restated Credit Agreement (the “Second 2025 Amendment”) with the 2025 Lenders, which amends the Amended A&R Credit Agreement. The Second 2025 Amendment, among other things, provides for a commitment increase in the initial principal amount of the senior secured term loan facility by $20.0 million (the “Second Incremental Loan”) from an aggregate principal amount of up to $80.0 million (the “Existing Loan”) to an initial aggregate principal amount of up to $100.0 million (the “Loan”) and allows the Loan Parties to request one or more additional term loans from the Lenders in an initial aggregate principal amount not to exceed $20.0 million on terms to be agreed to by the parties and subject to the approval of the Required Lenders (as defined in the Amended A&R Credit Agreement). The Second Incremental Loan will bear interest at the same rate as the Existing Loan, which may be paid in cash or in kind at the Company’s option.

The Second 2025 Amendment also provides that (i) the Second Incremental Loan shall be senior in right of repayment to the initial $61.0 million loan under the Amended and Restated Credit Agreement and pari passu with the First Incremental Loan and (ii) in any voluntary or mandatory prepayment in part or in full of the Second Incremental Loan for any reason, the Company will be required to pay an amount equal to the greater of (a) the Make-Whole Premium (as defined below) and (b) 2.5% of the aggregate principal amount of the Second Incremental Loan so prepaid, replaced or assigned. The “Make-Whole Premium” is determined as follows: on the date of prepayment, the excess of (A) (x) 100% of the principal amount of such Second Incremental Loan, plus (y) the present value at such date of all remaining scheduled interest payments due on such Second Incremental Loan from the prepayment date through the maturity date, assuming that all such interest accrues at the Make-Whole Premium Rate (as defined in the Second 2025 Amendment), computed using a discount rate equal to the Treasury Rate as of such prepayment date plus 50 basis points, over (B) the principal amount of such Second Incremental Loan on such prepayment date.

In addition, the Company also paid (i) an amendment fee equal to 0.25% of the outstanding principal and accrued and unpaid interest under the Existing Loan held by the Lenders, paid in kind to the 2025 Lenders, (ii) a work fee equal to 0.1% of the outstanding principal and accrued and unpaid interest under the Existing Loan, paid in cash to the Required Lenders, (iii) a waiver fee, to induce the Required Lenders to waive certain preemptive and right of first refusal rights, equal to 0.15% of the outstanding principal and accrued and unpaid interest under the Existing Loan, paid in cash to the Required Lenders, and (iv) a commitment fee equal to $150,000, paid in cash to the Required Lenders.

In connection with the Second 2025 Amendment, the Company issued to the 2025 Lenders, warrants (the “2025 Additional Warrants”) to purchase 6.6 million shares of the Company’s Class A common stock at a price of $1.50 per share, subject to certain adjustments (see Note 11 – Warrant Liabilities). These 2025 Additional Warrants include full-ratchet anti-dilution protections, subject to a floor of $0.6979 with respect to adjustments to the exercise price and expire on March 12, 2035. The 2025 Additional Warrants had a fair value of $5.4 million upon issuance and were recorded as a debt discount upon issuance of the Incremental Loan and is being amortized over the life of the loan.

The Second 2025 Amendment was evaluated and determined to be a modification of debt since the 2025 Lenders did not grant a concession, as the effective borrowing rate was not reduced, and the 2025 Amendment terms were not substantially different from the Amended and Restated Credit Agreement.

The Company has elected to have interest paid-in-kind and added to the principal amount of the loans. Interest expense under the Related Party Loan, the First Incremental Loan and the Second Incremental Loan for the three and six months ended June 30, 2025, consisted of paid-in-kind interest of $4.0 million and $6.8 million, respectively, and debt issuance cost amortization of $3.5 million and $5.7 million, respectively. Interest expense under the Related Party Loan for the three and six months ended June 30, 2024, consisted of paid-in-kind interest of $2.5 million and $4.4 million, respectively, and debt issuance cost amortization of $1.9 million and $3.3 million, respectively. The effective interest rate was 14.67% and 14.68% for the three and six months ended June 30, 2025, respectively, and 15.68% and 15.78% for the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, the Company was in compliance with all covenants under the Amended and Restated Credit Agreement as amended by the 2025 Amendment and the Second 2025 Amendment.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

11. Warrant Liabilities

On January 23, 2024, in connection with the Amended and Restated Credit Agreement, the Company issued 20.0 million 2024 Warrants to the Lenders, on March 12, 2025, in connection with the 2025 Amendment, the Company issued 6.2 million 2025 Warrants to the 2025 Lenders, on May 2, 2025, in connection with the Second 2025 Amendment, the Company issued 6.6 million 2025 Additional Warrants to the 2025 Lenders, and on May 2, 2025, in connection with the SGI Agreements (as defined below), the Company issued to SGI warrants to purchase 8.0 million shares of the Company’s Class A common stock (the “SGI Warrants,” collectively, the “Warrants”). Each Warrant entitles the registered holder to purchase one share of the Company’s Class A common stock at a price of $1.50 per share. The Warrants include full-ratchet anti-dilution protections, subject to a floor price ranging from $0.6979 to $0.8502 with respect to adjustments to the exercise price and expire between January 23, 2034 and March 12, 2035. While the Warrants are exercisable, the Company may call the Warrants for redemption in whole and not in part at any time at a price of $0.01 per share of Class A common stock issuable upon exercise of the Warrants upon not less than 45 days’ prior written notice of redemption to each holder, provided that this redemption right is only available if the reported last sale price of the Class A common stock equals or exceeds $24.00 per share on each of 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the holders. The Warrants will expire on the 10-year anniversary of issuance, or earlier upon redemption. The holders do not have the rights or privileges of holders of Class A common stock or any voting rights until they exercise their Warrants. After the issuance of shares of Class A common stock upon exercise of the Warrants, each holder will be entitled to one vote for each share of Class A common stock held on all matters to be voted on by stockholders generally. A holder of the Warrants will not have the right to exercise its Warrants, to the extent that after giving effect to such exercise, the holder (together with its affiliates) would beneficially own in excess of 49.9% of the shares of Class A common stock outstanding immediately after giving effect to such exercise. The Warrants contain a repurchase provision which, upon an occurrence of a fundamental transaction as defined in the warrant agreement, could give rise to an obligation of the Company to pay cash to the warrant holders. In addition, other provisions may lead to a reduction in the exercise price of the Warrants. The Company determined the fundamental transaction provisions require the Warrants to be accounted for as a liability at fair value on the date of the transaction, with changes in fair value recognized in earnings in the period of change. As a result, the liability for these Warrants was recorde

SEC Form 10-Q filed by Purple Innovation Inc.