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 ~~SEPTEMBER~~MARCH 3031, ~~2025~~2026

☐ 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		~~84048~~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

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 ~~November~~April 327, ~~2025~~2026, 108,~~245~~825,~~876~~636 shares of the registrant’s Class A common stock, $0.0001 par value per share, and 163,052 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 Stockholders’ Equity	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	2827
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4235
	Item 4.	Controls and Procedures	4235
Part II.	Other Information		4336
	Item 1.	Legal Proceedings	4336
	Item 1A.	Risk Factors	4336
	Item 5.	Other Information	4636
	Item 6.	Exhibits	4737
	Signatures		4838

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PURPLE INNOVATION, INC.

Condensed Consolidated Balance Sheets

(unaudited – in thousands, except for par value)

	September 30, 2025			December 31, 2024
	March 31, 2026			December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	3224,~~358~~955		$	2924,~~011~~345
Accounts receivable, net		2521,~~210~~143			3341,~~057~~272
Inventories		6558,~~770~~088			5659,~~863~~725
Prepaid expenses		75,~~401~~829			65,~~023~~487
Other current assets		5,~~667~~562			15,~~414~~891
Total current assets		~~136~~115,~~406~~577			~~126~~136,~~368~~720
Property and equipment, net		7975,~~495~~833			9377,~~874~~961
Operating lease right-of-use assets		7067,~~668~~085			7567,~~516~~271
Intangible assets, net		6,~~895~~152			86,~~890~~346
Other long-term assets		87,~~657~~340			37,~~197~~961
Total assets	$	~~302~~271,~~121~~987		$	~~307~~296,~~845~~259
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3541,~~661~~992		$	40,~~639~~312
Accrued compensation		75,~~765~~913			97,~~415~~673
Customer prepayments		54,~~209~~738			65,~~411~~276
Accrued rebates and allowances		138,~~820~~573			1013,~~013~~416
Accrued warranty liabilities – current portion		7,~~635~~498			67,~~114~~141
Operating lease obligations – current portion		16,~~379~~902			1517,~~661~~366
Other current liabilities		107,~~628~~597			1210,~~750~~339
Total current liabilities		9793,~~097~~213			101,~~003~~523
Related party debt		~~102~~119,~~889~~199			55111,~~394~~305
Accrued warranty liabilities, net of current portion		2419,~~163~~981			2619,~~091~~570
Operating lease obligations, net of current portion		8074,~~837~~997			8775,~~072~~616
Warrant liabilities		2223,~~032~~108			16,~~067~~150
Other long-term liabilities		21,~~010~~629			21,~~009~~764
Total liabilities		~~329~~332,~~028~~127			~~287~~325,~~636~~928
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit):
Class A common stock; $0.0001 par value, 210,000 shares authorized; 108,246 issued and outstanding at September 30, 2025, and 107,545 issued and outstanding at December 31, 2024		11			11
Class A common stock; $0.0001 par value, 210,000 shares authorized; 108,634 issued and outstanding at March 31, 2026 and 108,246 issued and outstanding at December 31, 2025		11			11
Class B common stock; $0.0001 par value, 90,000 shares authorized; 163 issued and outstanding at September 30, 2025, and at December 31, 2024		—			—
Class B common stock; $0.0001 par value, 90,000 shares authorized; 163 issued and outstanding at March 31, 2026 and at December 31, 2025		—			—
Additional paid-in capital		595,~~118~~687			~~594~~595,~~053~~582
Accumulated deficit		(~~622~~655,~~068~~821	)		(~~573~~625,~~866~~280	)
Total stockholders’ equity (deficit) attributable to Purple Innovation, Inc.		(2660,~~939~~123	)		20(29,~~198~~687	)
Noncontrolling interest		32(17	)		1118
Total stockholders’ equity (deficit)		(2660,~~907~~140	)		20(29,~~209~~669	)
Total liabilities and stockholders’ equity (deficit)	$	~~302~~271,~~121~~987		$	~~307~~296,~~845~~259

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 September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2025			2024			2025			2024
	2026			2025
Revenues, net	$	~~118~~95,~~766~~730		$	~~118~~104,~~598~~171		$	~~328,037~~		$	~~358,902~~
Cost of revenues:
Cost of revenues		6760,~~915~~535			7062,~~546~~207			~~197,462~~			~~220,190~~
Cost of revenues - restructuring related charges		—			~~12,859~~918			~~995~~			~~12,859~~
Total cost of revenues		6760,~~915~~535			8363,~~405~~125			~~198,457~~			~~233,049~~
Gross profit		5035,~~851~~195			3541,~~193~~046			~~129,580~~			~~125,853~~
Operating expenses:
Marketing and sales		4031,~~120~~557			4236,~~939~~626			~~107,362~~			~~125,778~~
General and administrative		1518,~~200~~033			1714,~~266~~487			~~44,678~~			~~55,111~~
Research and development		2,~~367~~448			2,~~920~~452			~~6,997~~			~~10,572~~
Restructuring, impairment and other related charges		~~5,290~~—			181,~~881~~960			~~11,387~~			~~18,881~~
Total operating expenses		6252,~~977~~038			8255,~~006~~525			~~170,424~~			~~210,342~~
Operating loss		(1216,~~126~~843	)		(4614,~~813~~479	)		~~(40,844~~	)		~~(84,489~~	)
Other income (expense):
Interest expense		(8,~~203~~219	)		(4,~~394~~764	)		~~(20,424~~	)		~~(13,029~~	)
Other income, net		1,~~742~~491			~~7,165~~69			~~1,812~~			~~11,612~~
Loss on extinguishment of debt		—			—			—			(3,394	)
Change in fair value – warrant liabilities		(6,958	)		49
Change in fair value – warrant liabilities		6,892			4,795			11,319			(111	)
Total other expense, net		(13,686	)		(4,646	)
Total other income (expense), net		431			7,566			(7,293	)		(4,922	)
Net loss before income taxes		(30,529	)		(19,125	)
Net loss before income taxes		(11,695	)		(39,247	)		(48,137	)		(89,411	)
Income tax expense		(47	)		(41	)
Income tax expense		(53	)		(63	)		(148	)		(176	)
Net loss		(30,576	)		(19,166	)
Net loss		(11,748	)		(39,310	)		(48,285	)		(89,587	)
Net loss attributable to noncontrolling interest		(35	)		(29	)
Net loss attributable to noncontrolling interest		(28	)		(82	)		(83	)		(169	)
Net loss attributable to Purple Innovation, Inc.	$	(30,541	)	$	(19,137	)
Net loss attributable to Purple Innovation, Inc.	$	(11,720	)	$	(39,228	)	$	(48,202	)	$	(89,418	)
Net loss per share:
Net loss per share:
Basic	$	(0.28	)	$	(0.18	)
Basic	$	(0.11	)	$	(0.36	)	$	(0.45	)	$	(0.84	)
Diluted	$	(0.28	)	$	(0.18	)
Diluted	$	(0.11	)	$	(0.36	)	$	(0.45	)	$	(0.84	)
Weighted average common shares outstanding:
Weighted average common shares outstanding:
Basic		108,386			107,596
Basic		108,245			107,508			108,026			107,008
Diluted		108,386			107,596
Diluted		108,409			107,508			108,191			107,008

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				Class B					Additional						Total Stockholders’ Equity (Deficit) attributable to Purple						Total
	Class A Common Stock				Class B Common Stock					Additional Paid-in			Accumulated			Stockholders’ Equity			Noncontrolling			Total Equity
	Common Stock				Common Stock					Paid-in			Accumulated			Innovation,			Noncontrolling			Equity
	Shares		Par Value		Shares			Par Value		Capital			Deficit			~~(Deficit)~~Inc.			Interest			(Deficit)
Balance – December 31, 2024		107,545	$	11		165		$	—	$	594,053		$	(573,866	)	$	20,198		$	11		$	20,209
Balance – December 31, 2025		108,246	$	11		163		$	—	$	595,582		$	(625,280	)	$	(29,687	)	$	18		$	(29,669	)
Net loss		—		—		—			—		—			(1930,~~137~~541	)		(1930,~~137~~541	)		(2935	)		(1930,~~166~~576	)
Stock-based compensation		—		—		—			—		~~368~~156			—			~~368~~156			—			~~368~~156
Issuance of stock under equity compensation plans		~~410~~388		—		—			—		(8151	)		—			(8151	)		—			(8151	)
Impact of transactions affecting NCI		—		—		—			—		(8	)		—			(8	)		8			—
Balance – March 31, 2026		108,634	$	11		163		$	—	$	595,687		$	(655,821	)	$	(60,123	)	$	(17	)	$	(60,140	)
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	)
Net loss		—		—		—			—		—			(11,720	)		(11,720	)		(28	)		(11,748	)
Stock-based compensation		—		—		—			—		420			—			420			—			420
Exchange of stock		2		—		(2	)		—		—			—			—			—			—
Balance – September 30, 2025		108,246	$	11		163		$	—	$	595,118		$	(622,068	)	$	(26,939	)	$	32		$	(26,907	)

	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
Balance – December 31, 2024		107,545	$	11		165		$	—	$	594,053		$	(573,866	)	$	20,198		$	11		$	20,209
Net loss		—		—		—			—		—			(5019,~~217~~137	)		(5019,~~217~~137	)		(5129	)		(5019,~~268~~166	)
Stock-based compensation		—		—		—			—		~~492~~368			—			~~492~~368			—			~~492~~368
Issuance of stock for Intellibed acquisition		1,500		—		—			—		—			—			—			—			—
Issuance of stock under equity compensation plans		410		—		—			—		(81	)		—			(81	)		—			(81	)
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
Balance – March 31, 2025		107,955	$	11		165		$	—	$	594,332		$	(593,003	)	$	1,340		$	(10	)	$	1,330
Net loss		—		—		—			—		—			(39,228	)		(39,228	)		(82	)		(39,310	)
Stock-based compensation		—		—		—			—		791			—			791			—			791
Exchange of stock		13		—		(13	)		—		—			—			—			—			—
Impact of transactions affecting NCI		—		—		—			—		11			—			11			(11	)		—
Balance – September 30, 2024		107,516	$	11		192		$	—	$	593,343		$	(565,387	)	$	27,967		$	46		$	28,013

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)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2025			2024
	2026			2025
Cash flows from operating activities:
Net loss	$	(4830,~~285~~576	)	$	(8919,~~587~~166	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		194,~~659~~427			275,~~448~~050
Non-cash interest		93,~~537~~736			52,~~303~~120
Paid-in-kind interest		114,~~266~~504			72,~~028~~789
Non-cash restructuring, impairment and other related charges		~~3,775~~—			~~20,115~~635
Loss on extinguishment of debt		—			3,394
Loss on disposal of property and equipment		66			88
Loss on disposal of property and equipment		318			770
Change in fair value – warrant liabilities		6,958			(49	)
Change in fair value – warrant liabilities		(11,319	)		111
Stock-based compensation		156			368
Stock-based compensation		1,265			2,108
Changes in operating assets and liabilities:
Accounts receivable		720,~~847~~129			8,~~140~~669
Inventories		(81,~~907~~637	)		2(3,~~971~~314	)
Prepaid expenses and other assets		~~755~~789			~~378~~2,229
Operating leases, net		(~~2,080~~897	)		(~~2,105~~848	)
Accounts payable		(41,~~464~~377	)		(169,~~558~~701	)
Accrued compensation		(1,~~650~~760	)		10(1,~~045~~970	)
Customer prepayments		(~~1,202~~538	)		(12,~~940~~685	)
Accrued rebates and allowances		~~307~~(4,843	)		(3,~~203~~854	)
Accrued warranty liabilities		~~(407~~768	)		(~~621~~487	)
Other accrued liabilities		(42,~~445~~944	)		1(2,~~592~~944	)
Net cash used in operating activities		(28,030	)		(24,611	)
Net cash provided by (used in) operating activities		2,989			(23,070	)
Cash flows from investing activities:
Sale of property and equipment		~~464~~—			—258
Purchase of property and equipment		(61,~~076~~612	)		(62,~~160~~241	)
Investment in intangible assets		(~~454~~421	)		(~~221~~161	)
Net cash used in investing activities		(62,~~066~~033	)		(62,~~381~~144	)
Cash flows from financing activities:
Proceeds from related party loan		~~39,000~~—			6119,000
Payments on term loan		—			(25,000	)
Payments for debt issuance costs		(346	)		(1,170	)
Payments on revolving line of credit		—			(5,000	)
Net cash provided by (used in) financing activities		(346	)		17,830
Payments for debt issuance costs		(1,557	)		(3,466	)
Net increase (decrease) in cash and cash equivalents		610			(7,384	)
Net cash provided by financing activities		37,443			27,534
Cash and cash equivalents, beginning of the period		24,345			29,011
Net increase (decrease) in cash and cash equivalents		3,347			(3,458	)
Cash and cash equivalents, end of the period	$	24,955		$	21,627
Cash and cash equivalents, beginning of the year		29,011			26,857
Cash and cash equivalents, end of the period	$	32,358		$	23,399
Supplemental disclosures of cash flow information:
Cash paid during the period for interest, net of amounts capitalized	$	~~116~~20		$	4639
Cash paid during the period for income taxes	$	~~173~~19		$	~~305~~28
Supplemental schedule of non-cash investing and financing activities:
Property and equipment included in accounts payable	$	~~271~~519		$	~~352~~459
Warrants issued	$	~~17,284~~—		$	—5,396
Amendment fee added to principal of loan	$	1,~~215~~286		$	—978

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~~business 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 ~~September~~March 3031, ~~2025~~2026, 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~~ regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain ~~information~~ information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted ~~pursuant~~ pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction ~~with~~ 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~~2025. 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 of normal recurring nature) considered necessary to present fairly the Company’s financial results. The results of the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025,~~2026 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, ~~2025,~~2026 or for any other interim period or other future year.

Liquidity and Going Concern

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~~the preparation of the unaudited condensed consolidated financial statements for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, 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 $32.4 million and an accumulated deficit of $622.1 million at September 30, 2025, a net loss of $48.2 million and net cash used in operating and investing activities of $34.1 million for the nine months ended September 30, 2025. During the first nine 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.

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

The Company ~~has~~had cash ~~also~~and cash ~~taken~~equivalents ~~a number~~ of ~~other~~approximately ~~actions to increase cash flow~~$25.0 million Inand ~~August~~an ~~2024,~~accumulated ~~the~~deficit ~~Company~~of $655.8 ~~implemented~~million ~~the~~at ~~Restructuring~~March ~~Plan (as~~31, ~~defined below) to consolidate manufacturing operations to create efficiencies and cost savings~~2026. The Company ~~has realized and plans~~ tohad ~~continue~~a tonet ~~realize~~loss ~~direct~~of $30.5 million ~~material~~and ~~cost~~net ~~savings~~cash ~~through~~provided ~~supply~~by ~~chain~~operating ~~initiatives~~activities and ~~supplier~~used ~~diversification efforts. The Company has taken additional cost-saving initiatives~~ in ~~the~~investing ~~first~~activities ~~nine-months~~was of$3.0 ~~2025 to maintain liquidity to support its operations~~ million and ~~strategies~~$2. ~~Additionally~~0 million, ~~the Company entered into an agreement with Mattress Firm~~respectively, ~~Inc.~~for ~~(“Mattress~~the ~~Firm”),~~three amonths ~~business~~ended ~~unit~~March ~~of Somnigroup International~~31, ~~Inc~~2026. ~~(“SGI”)~~The toCompany ~~expand~~has ~~its~~a ~~inventory~~history of ~~the~~recurring ~~Company’s~~net ~~products~~losses ~~across~~and ~~SGI’s national store network~~cash ~~from~~used ~~approximately~~in 5operations,~~000~~ ~~mattress~~an ~~slots~~accumulated ~~to a minimum of 12~~deficit,~~000~~ ~~mattress~~and ~~slots~~requiring ~~(see~~additional ~~Note~~capital 13to —fund ~~Commitments~~its ~~and Contingencies, SGI Commercial Arrangements)~~operations.

~~Accordingly,~~ The funds the Company ~~concluded~~has ~~that~~on hand itand ~~will~~any ~~have~~follow-on ~~sufficient~~capital, ~~liquidity~~if needed, will be used to fund its operations ~~for~~and atinvest ~~least~~in ~~one~~the ~~year~~business to expand sales and marketing efforts, as well as to invest in innovation. As described below, management has implemented plans to both increase its revenues from the sales ~~date~~of its products and to achieve cost savings within the next year, sufficient to generate positive operating cash flow levels. However, the Company may be adversely impacted by uncertain market conditions and there can be no assurance that the Company will be successful in this ~~Quarterly~~regard. If such plans are not successful, the Company may need to raise additional capital in order to support operations and ~~Report~~business oninitiatives. ~~Form~~Access ~~10-Q~~to additional capital is ~~issued~~uncertain and not within the control of the Company. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

~~Although~~The Company has taken a number of actions to increase cash flow and support its operations and strategies. In August 2024, the Company ~~currently~~implemented ~~expects~~the ~~its~~Restructuring Plan ~~sources~~(as ofdefined ~~capital~~below) to beconsolidate ~~sufficient~~manufacturing operations resulting in cost savings. The Company has realized and plans to ~~meet~~continue to realize direct material cost savings by concentrating efforts on driving gross margin improvement through various methods such as selective pricing actions, continued mix shift towards the Restore and Rejuvenate collections, and by driving cost savings through supply chain initiatives and manufacturing efficiency. The Company has delivered direct material cost savings from its ~~near-term~~supplier ~~liquidity~~diversification ~~needs~~efforts, improved ~~there~~scrap ~~can~~and beyield noresults ~~assurance~~from continuous improvements, and outbound freight costs reflect cost improvements along with improved delivery reliability. The Company has been successful in subleasing the two manufacturing facilities that ~~such~~were ~~sources~~vacated ~~will~~as bepart ~~sufficient~~of tothe Restructuring ~~satisfy~~Plan. ~~its~~The ~~liquidity~~Company ~~requirements~~has also taken additional cost-saving initiatives in 2025 and the ~~future~~beginning of 2026 to reduce headcount and streamline responsibilities and reporting structure. Further, management’s plans include additional actions intended to improve liquidity and reduce costs, including a planned optimization of advertising spend, limiting the ~~related~~number ~~party~~of ~~loan~~new ~~due~~store ~~December~~openings, efforts 31to mitigate tariff impacts by managing the country of origin, ~~2026~~and ~~(see~~other cost-saving initiatives. As disclosed in Note 10 —- Debt)., the IfCompany has elected to have interest paid-in-kind and added to the ~~Company~~principal ~~cannot~~amount ~~generate~~of orthe ~~obtain~~loans ~~needed~~under ~~funds~~the Amended and Restated Credit Agreement and on March 24, it2026, ~~might~~the beCompany ~~forced~~executed the Third Amendment to ~~make~~the ~~substantial~~Amended and Restated Credit Agreement (the “Third ~~reductions~~Amendment”) inwith ~~its~~the ~~operating~~Lenders to extend the maturity date of the Amended and ~~capital~~Restated ~~expenses~~Credit orAgreement ~~pursue~~from ~~restructuring~~December ~~plans~~31, ~~which~~2026 ~~could~~to April ~~adversely~~30, ~~affect~~2027. ~~its~~The ~~business~~Company ~~operations~~ is currently evaluating potential strategic alternatives and ~~ability~~opportunities to ~~execute~~achieve ~~its~~additional ~~current~~liquidity through ~~business~~one ~~strategy~~or more future debt refinancings.

~~Variable~~Additionally, ~~Interest~~in ~~Entities~~May 2025, 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). The Company is now represented in Mattress Firm’s full store network and with the recent launch of Purple Royale, the exclusive Luxe product for Mattress Firm, the Company has expanded to all 12,000 committed slots. The Company has also expanded into more Costco clubs in the fourth quarter of 2025.

~~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 September 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~~do ~~herein.~~not ~~The~~include ~~holders~~any ofadjustments ~~Class~~that Bmay ~~Units~~result offrom ~~Purple LLC (“Class B Units”) held 0.15% of~~ the ~~economic~~outcome ~~interest in Purple LLC as~~ of ~~September~~these ~~30, 2025~~uncertainties. ~~For further discussion see Note 15 — Stockholders’ Equity.~~

~~Use~~Revenue Recognition of– ~~Estimates~~Consideration Payable to Customers

~~The preparation~~There ofhave ~~the~~been ~~unaudited~~no ~~condensed~~material changes ~~consolidated~~to ~~financial statements in conformity with GAAP requires~~ the Company’s torevenue ~~establish~~recognition ~~accounting~~ policies ~~and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities~~ as ofdescribed ~~the~~in ~~date of~~ the ~~unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The~~ Company’s ~~bases~~Annual ~~its~~Report ~~estimates~~ on ~~historical~~Form ~~experience and on various other assumptions believed to be reasonable~~10-K, ~~the~~except ~~results of which form the basis~~ for ~~making judgments about~~ the ~~carrying~~following ~~values~~application of ~~assets~~accounting ~~and~~guidance ~~liabilities. The Company regularly makes estimates and assumptions including, but not limited~~ to, ~~estimates~~certain ~~that~~arrangements ~~affect~~with ~~revenue recognition, accounts receivable and the allowance for credit losses, valuation of inventories, sales returns, warranty returns, impairment reviews of long~~third-~~lived~~party 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”)manufacturers. ~~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~~The Company enters into arrangements ~~Information~~with third-party manufacturers, including manufacturers under common control with certain customers, to produce mattress products sold to those customers. The Company evaluates these arrangements to determine whether payments to such manufacturers represent consideration payable to a customer or payments for goods or services received, in accordance with ASC 606—Revenue from Contracts with Customers. For certain customer-specific or exclusive product arrangements, the Company has concluded that payments to a manufacturer under common control with a customer are economically linked to the underlying customer arrangement and represent consideration payable to that customer. Accordingly, revenue for these arrangements is presented net of payments made to the third-party manufacturers.

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.6

~~Recent~~PURPLE INNOVATION, INC. ~~Accounting~~Notes ~~Pronouncements~~to Condensed Consolidated Financial Statements (unaudited)

~~In December~~Variable ~~2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU amends~~Interest 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.Entities

6Purple 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 March 31, 2026, 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 March 31, 2026. For further discussion see Note 15 — Stockholders’ Equity.

~~PURPLE INNOVATION,~~Use ~~INC. Notes~~of ~~to Condensed Consolidated Financial Statements (unaudited)~~Estimates

~~In November~~The ~~2024,~~preparation of the ~~FASB~~unaudited condensed ~~issued~~consolidated ~~ASU~~financial ~~No.~~statements ~~2024-03,~~in ~~Income~~conformity ~~Statement~~with —GAAP ~~Reporting~~requires ~~Comprehensive~~the ~~Income~~Company —to ~~Expense~~establish ~~Disaggregation Disclosures~~accounting ~~(Subtopic~~policies ~~220-40):~~and ~~Disaggregation~~to ofmake estimates ~~Income~~and ~~Statement~~judgments ~~Expenses,~~that ~~which~~affect ~~requires~~the ~~disclosure~~reported amounts of ~~certain~~assets ~~costs~~and liabilities and ~~expenses~~disclose ~~on an~~contingent ~~interim~~assets and ~~annual~~liabilities ~~basis~~as in of the ~~notes~~date toof the unaudited condensed consolidated financial statements~~. The~~ ~~prescribed~~and ~~cost~~the reported amounts of revenues and ~~expense~~expenses ~~categories~~during ~~requiring~~the reporting ~~disaggregated~~period. ~~disclosures~~The ~~include~~Company ~~purchases~~bases ofits ~~inventory,~~estimates ~~employee~~on ~~compensation,~~historical ~~depreciation~~experience and ~~intangible~~on ~~asset~~various ~~amortization~~other assumptions believed to be reasonable, ~~along~~the results ~~with~~of ~~certain~~which ~~other~~form ~~expense~~the ~~disclosures~~basis ~~already~~for ~~required~~making byjudgments ~~GAAP~~about ~~that~~the ~~would~~carrying ~~need~~values toof beassets ~~integrated~~and ~~within~~liabilities. ~~the~~The ~~new~~Company ~~tabular~~regularly ~~disaggregated~~makes estimates ~~expense~~and ~~disclosures.~~assumptions ~~Additionally~~including, ~~the~~but ~~amendments~~not ~~also~~limited ~~require~~to, ~~the~~estimates ~~disclosure~~that ofaffect ~~total~~revenue ~~selling~~recognition, ~~expenses~~accounts receivable and anthe ~~entity’s~~allowance ~~definition~~for credit oflosses, ~~those~~valuation ~~expenses.~~of ~~The~~inventories, ~~guidance~~sales isreturns, ~~effective~~warranty ~~for~~returns, ~~annual~~impairment ~~reporting~~reviews ~~periods~~of ~~beginning~~long-lived ~~after~~assets ~~December~~and 15definite-lived intangible assets, ~~2026~~warrant liabilities, ~~and~~stock ~~interim~~based ~~periods~~compensation, ~~within annual~~the ~~reporting~~recognition ~~periods~~and ~~beginning~~measurement ~~after~~of ~~December~~loss 15contingencies, ~~2027. Early~~the ~~adoption~~recognition isand ~~permitted. The~~measurement of ~~guidance~~restructuring isand torelated becharges, ~~applied~~estimates ~~either (1)~~of ~~prospectively~~current toand ~~financial~~deferred ~~statements~~income ~~issued~~taxes, ~~for~~deferred ~~reporting~~income ~~periods~~tax ~~after~~valuation ~~the~~allowances, ~~effective~~and ~~date~~amounts associated orwith ~~(2)~~the ~~retrospectively~~Company’s totax ~~any~~receivable oragreement ~~all prior~~with ~~periods~~InnoHold, ~~presented~~LLC in(“InnoHold”). ~~the~~Predicting ~~financial~~future ~~statements. The~~events ~~Company~~ is inherently ~~currently~~an ~~evaluating~~imprecise ~~the~~activity ~~potential~~and, ~~impact~~as ~~this~~such, ~~update~~requires ~~will~~the ~~have on~~use ~~its~~of ~~expense~~judgment. ~~disclosures~~Actual inresults ~~the~~could ~~notes~~differ tomaterially ~~the~~from ~~consolidated~~those ~~financial statements~~estimates.

~~In September~~Segment 2025, the FASB issued ASU No. 2025-06, “Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact this update will have on its consolidated financial statements and related disclosures.Information

3The Company operates in one operating segment. This is consistent with the organizational structure and internal reporting evaluated regularly ~~Restructuring,~~by ~~Impairment~~the Company’s Chief Executive Officer who is our chief operating decision maker (“CODM”) when making operational decisions and ~~Other~~allocating ~~Related~~resources. ~~Charges~~For additional information regarding the Company’s segment reporting, refer to Note 20 – Segment Information and Concentrations.

~~In August~~Recent ~~2024,~~Accounting 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.Pronouncements

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

	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		—		2,414		3,102
Total cash charges		929		942		5,865		7,736
Non-cash charges:
Accelerated depreciation		11,482		—		5,507		16,989
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		—		25,535		41,043
Total restructuring, impairment and other related charges	$	16,437	$	942	$	31,400	$	48,779

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.

~~Of the $~~7.7 million of employee-related and other cash charges incurred since inception of the restructuring activities, the Company recognized $0.1 million and $2.9 million during the three and nine months ended September 30, 2025. Similarly, of the combined charges incurred related to accelerated depreciation, write-down of long-lived assets and impairment of assets of $37.0 million since the inception of the restructuring activities, the Company recognized $5.2 million and $9.5 million during the three and nine months ended September 30, 2025, respectively. 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 nine months ended September 30, 2025.

~~Accelerated depreciation~~PURPLE ~~primarily~~INNOVATION, ~~represents $17~~INC.~~0 million of increased depreciation expense associated with shortening the useful lives of the~~ ~~production~~Notes ~~equipment and leasehold improvements at the two Utah manufacturing facilities that were closed~~ to ~~reflect~~Condensed ~~the~~Consolidated ~~remaining~~Financial ~~period~~Statements ~~these assets will remain in service.~~(unaudited)

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

7In September 2025, the FASB issued ASU No. 2025-06, “Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact this update will have on its consolidated financial statements and related disclosures.

~~PURPLE INNOVATION,~~Accounting ~~INC.~~for Government ~~Notes~~Grants toReceived ~~Condensed~~by ~~Consolidated~~Business ~~Financial Statements (unaudited)~~Entities

~~Impairment of~~In ~~assets~~December ~~included~~2025, ~~impairment~~the ~~charges~~FASB issued ofASU ~~$5.4~~2025-10, ~~million~~“Accounting ~~associated~~for ~~with~~Government ~~the~~Grants ~~closing~~Received ~~and~~by ~~subleasing~~Business ofEntities,” to ~~the~~establish ~~Salt~~guidance ~~Lake~~on ~~City,~~the ~~Utah and Grantsville~~recognition, ~~Utah~~measurement, ~~manufacturing facilities~~ and ~~related~~presentation ~~impairment charges associated with certain leasehold improvements~~ of ~~the~~government ~~properties.~~grants ~~The~~received ~~fair values of the impaired assets were determined~~ by ~~the~~business ~~Company~~entities. toThis beguidance ~~Level 3~~is ~~under~~effective ~~the fair value hierarchy (refer to Note 4— Fair Value Measurements~~ for ~~the~~annual ~~definition~~periods ~~of Level 3 inputs) and were estimated based on internal expertise related to current~~beginning ~~marketplace~~after ~~conditions~~December ~~and~~15, ~~estimated~~2028. ~~future~~Early ~~discounted~~adoption ~~cash~~is ~~flows~~permitted. ~~These~~The ~~assets~~Company ~~were~~does ~~adjusted~~not toexpect ~~their estimated fair values at~~ the ~~time~~ adoption of ~~impairment.~~this Ifto ~~estimated~~have ~~fair~~a ~~values~~significant ~~subsequently~~impact ~~decline,~~on its ~~the~~consolidated ~~carrying~~financial ~~values of the assets will be adjusted accordingly~~statements.

~~Impairment of assets also included the write-off of an $8~~3.5 ~~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~~Impairment ~~Company determined this indefinite-lived intangible asset was impaired~~ and ~~recorded~~Other ~~an impairment charge to write off the entire $8.5 million balance.~~Related Charges

~~The lease~~In ~~for~~August 2024, the Company’s initiated ~~Grantsville,~~a ~~Utah~~restructuring plan ~~manufacturing~~to ~~facility~~strategically ~~included~~realign athe ~~five-year~~Company’s ~~renewal~~focus ~~option~~on ~~that~~the ~~was~~achievement ~~reasonably~~of ~~certain~~operational efficiencies ofthat ~~being~~are ~~exercised~~expected ~~and~~to ~~was~~improve ~~included~~profitability inand ~~the~~provide ~~lease~~for ~~term~~reinvesting ~~when~~in ~~the~~technology ~~Right~~and ofmarketing ~~Use~~initiatives (the “~~ROU~~Restructuring Plan”). ~~asset~~The Company’s ~~and~~Restructuring ~~lease~~Plan ~~liability~~includes ~~were originally measured. Because of~~ the permanent closure of ~~this~~its ~~facility~~Grantsville asand ~~part~~Salt ofLake ~~the~~City, ~~Restructuring~~Utah manufacturing ~~Plan,~~facilities ~~the~~to ~~renewal~~consolidate ~~option~~mattress ~~will~~production ~~not~~in beits ~~exercised~~Georgia plant, and a ~~reassessment of~~headcount reduction at the ~~lease~~Company’s ~~terms~~Utah headquarters ~~was~~to ~~completed~~drive additional operating efficiencies. AsThe aconsolidation ~~result,~~into the ~~original~~Georgia ~~lease~~facility ~~term~~ was ~~shortened~~finalized ~~and~~in December 2024 and the ~~Company~~closure ~~recorded~~of athe ~~$10.5~~two ~~million~~Utah ~~reduction to~~manufacturing ~~the~~facilities ~~ROU~~was ~~asset~~completed ~~and~~in ~~corresponding~~May ~~lease~~2025. ~~liability~~The reduction in workforce at the ~~2024~~Utah ~~consolidated~~headquarters ~~balance~~was completed ~~sheet,~~in ~~using~~August ~~the~~2024. ~~applicable~~All ~~discount~~restructuring ~~rate~~activities atwere completed in the ~~effective~~ ~~date~~third quarter of ~~the reassessment~~2025.

The following table summarizes ~~activity for~~ the ~~nine months ended September 30~~restructuring, ~~2025~~impairment ~~associated with employee-related~~ and other ~~costs~~related ~~recorded pursuant~~charges to the ~~Restructuring~~Company ~~Plan,~~recognized asduring ~~presented in~~ the ~~indicated~~first ~~line~~quarter ~~item~~ of ~~the~~2025 ~~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~~statement ~~sheets~~of operations (in thousands):

Liability balance at December 31, 2024	$	993
	Cost of Revenues			Restructuring, Impairment and Other Related Charges		Total
Employee-related costs – restructuring charges		354
Cash charges:
Other costs – restructuring charges		1,991
Employee-related costs	$	—		$	171	$	171
Cash paid		(3,330	)
Other costs		688			1,154		1,842
Liability balance at September 30,2025	$	8
Total cash charges		688			1,325		2,013
Non-cash charges:
Accelerated depreciation		230			—		230
Write-down of long-lived assets		—			635		635
Total non-cash charges		230			635		865
Total restructuring, impairment and other related charges	$	918		$	1,960	$	2,878

~~There~~Accelerated depreciation primarily ~~are~~represents no$0.2 ~~additional~~million ~~restructuring~~of ~~charges~~increased ~~expected~~depreciation toexpense beassociated ~~incurred~~with inshortening the ~~future~~useful lives of the production equipment at the two Utah manufacturing facilities that were closed to reflect the remaining period these assets will remain in service.

8The $0.6 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.

~~PURPLE INNOVATION,~~The ~~INC~~$2. ~~Notes~~0 million of cash charges relates to ~~Condensed~~costs ~~Consolidated~~incurred ~~Financial~~in ~~Statements~~shutting ~~(unaudited)~~down and transitioning operations from the two Utah manufacturing facilities that were closed.

~~4. Fair Value Measurements~~8

~~The Company~~PURPLE ~~uses~~INNOVATION, ~~the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value~~INC. ~~Fair value is the~~ ~~price~~Notes ~~that would be received~~ to ~~sell~~Condensed anConsolidated ~~asset~~Financial ~~or paid to transfer a liability in an orderly transaction between market participants at~~Statements ~~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:~~(unaudited)

~~Level 1—Quoted~~4. ~~market~~Fair ~~prices~~Value ~~in active markets for identical assets or liabilities;~~Measurements

~~Level~~The Company uses the fair ~~2—Significant~~value ~~other~~hierarchy ~~observable~~that prioritizes the inputs (ito valuation techniques used to measure fair value.~~e.,~~ ~~quoted~~Fair ~~prices~~value ~~for~~is ~~similar~~the ~~items~~price inthat ~~active~~would ~~markets,~~be received ~~quoted~~to ~~prices~~sell ~~for~~an ~~identical~~asset or ~~similar~~ ~~items~~paid to transfer a liability in ~~markets~~an ~~that~~orderly ~~are~~transaction ~~not~~between ~~active,~~market ~~inputs~~participants ~~other~~at ~~than~~the ~~quoted~~measurement ~~prices~~date, essentially ~~that~~an ~~are~~exit ~~observable~~price, ~~such~~based ason ~~interest~~the ~~rate~~highest and ~~yield~~best ~~curves, and~~use ~~market-corroborated~~of ~~inputs);~~the ~~and~~asset or liability. The levels of the fair value hierarchy are:

Level 3 1—~~Unobservable~~Quoted ~~inputs~~market prices in active ~~which~~markets ~~there~~for isidentical ~~little~~assets or ~~no market data, which require the reporting unit to develop its own assumptions.~~liabilities;

~~The classification~~Level of2—Significant ~~fair~~other ~~value~~observable inputs ~~measurements~~(i.e., ~~within~~quoted ~~the~~prices ~~established~~for ~~three-level~~similar ~~hierarchy~~items isin ~~based~~active ~~upon the lowest level of input that is significant to the measurements. Financial instruments~~markets, ~~although~~quoted ~~not~~prices ~~recorded~~for atidentical ~~fair~~or ~~value~~similar onitems ain ~~recurring~~markets ~~basis~~that ~~include~~are ~~cash and cash~~not ~~equivalents~~active, ~~receivables,~~inputs ~~accounts~~other ~~payable~~than ~~and~~quoted ~~the~~prices ~~Company’s~~that ~~debt~~are ~~obligations.~~observable, ~~The~~such ~~carrying~~as ~~amounts~~interest ofrate ~~cash~~ and ~~cash~~yield ~~equivalents~~curves, ~~receivables,~~ ~~accounts payable~~ and ~~accrued expenses approximate fair value because of the short~~market-~~term~~corroborated ~~nature of these accounts.~~inputs); and

~~The estimated fair value of the Company’s debt arrangements is based on~~ Level ~~2 and Level~~ 3—Unobservable inputs. ~~Level~~in which 2there ~~inputs~~is ~~include~~little ~~observable inputs~~or ~~such~~no as market~~-based~~ ~~expectations for interest rates~~data, ~~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~~require ~~valued using a Monte Carlo model and~~ the ~~timing~~reporting ~~and~~unit ~~probability~~to ofdevelop aits ~~warrant~~own ~~reprice event, like a strategic alternative transaction~~assumptions. ~~As of September 30, 2025, the estimated fair value of the Company’s debt arrangements was $113.0 million.~~

The classification of fair ~~significant~~value ~~inputs~~measurements within the established three-level hierarchy is based upon the lowest level of input that is significant to the ~~valuation~~measurements. Financial ~~model~~instruments, ~~were~~although asnot ~~follows:~~recorded at fair value on a recurring basis include cash, cash equivalents, accounts receivables, accounts payable, and the Company’s debt obligations. The carrying amounts of cash, cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these accounts.

	September 30,
	2025
Interest rate volatility		6 - 15	%
Risk free interest rate		3.66	%
SOFR interest rate		3.99	%
Discount rate		36 – 38	%

The estimated fair value of the Company’s related party debt 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 various issuances 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. The estimated fair value of the Company’s related party debt was $112.7 million and $72.6 million as of March 31, 2026 and 2025.

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~~Significant inputs, ~~include~~certain of which are unobservable, 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).

9The following table summarizes the Company’s total Level 3 liability activity for the three months ended March 31, 2026 (in thousands):

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

	Warrants		Total Level 3 Liabilities
Fair value as of December 31, 2025	$	16,150	$	16,150
Change in valuation inputs⁽¹⁾		6,958		6,958
Fair value as of March 31, 2026	$	23,108		23,108

~~The following~~(1) ~~table~~Changes ~~summarizes~~in ~~the~~valuation ~~Company’s~~inputs ~~total~~are ~~Level~~recognized 3as ~~liability~~the ~~activity~~change ~~for~~in ~~the~~fair ~~nine~~value ~~months~~– ~~ended~~warrant ~~September~~liabilities ~~30,~~in ~~2025~~the ~~(in~~unaudited ~~thousands):~~condensed consolidated statement of operations.

Fair value as of December 31, 2024	$	16,067
Initial measurement at time of issuance(1)		17,284
Change in valuation inputs(2)		(11,319	)
Fair value as of September 30, 2025	$	22,032

(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.

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

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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Sales Category

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

e-commerce

4540,~~275~~596

5045,~~211~~397

~~133,756~~

~~148,351~~

Showrooms

2118,~~950~~847

2017,~~612~~986

~~55,705~~

~~55,550~~

Wholesale

5136,~~541~~287

4740,~~775~~788

~~138,576~~

~~155,001~~

Revenues, net

~~118~~95,~~766~~730

~~118~~104,~~598~~171

~~328,037~~

~~358,902~~

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 $54.27 million and $65.43 million at ~~September~~March 3031, ~~2025,~~2026 and December 31, ~~2024~~2025, respectively. During the ~~nine~~ three months ended ~~September~~March 3031, ~~2025~~2026, the Company recognized all of the revenue that was deferred in customer prepayments at December 31, ~~2024~~ 2025.

6. Inventories

Inventories consisted of the following (in thousands):

	September 30,		December 31,
	March 31,		December 31,
	2025		2024
	2026		2025
Raw materials	$	1921,~~229~~556	$	2023,~~193~~420
Work-in-process		76,~~864~~205		6,~~602~~355
Finished goods		3830,~~677~~327		3029,~~068~~950
Inventories	$	6558,~~770~~088	$	5659,~~863~~725

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):

	September 30,			December 31,
	March 31,			December 31,
	2025			2024
	2026			2025
Equipment	$	8086,~~334~~764		$	7080,~~900~~999
Equipment in progress		63,~~262~~146			137,~~130~~218
Leasehold improvements		58,~~775~~867			5758,~~936~~862
Furniture and fixtures		30,~~330~~422			3230,~~699~~744
Office equipment		1,624			1,~~611~~624
Total property and equipment		~~177~~180,~~325~~823			~~176~~179,~~276~~447
Accumulated depreciation		(97104,~~830~~990	)		(82101,~~402~~486	)
Property and equipment, net	$	7975,~~495~~833		$	9377,~~874~~961

Equipment in progress reflects equipment, primarily related to mattress manufacturing, which is being constructed and was not in service at ~~September 30,~~March ~~2025~~31, 2026 or December 31, ~~2024~~2025. Interest capitalized on borrowings during the active construction period of major capital projects totaled $0.1 million and $0.52 million during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025,~~2026 ~~respectively,~~ and ~~totaled $0.2 million and $0.9 million during the three and nine months ended September 30~~2025, ~~2024,~~ respectively. Depreciation expense was $83.8 million and $174.12 million during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025,~~2026 ~~respectively,~~ and ~~was $13.5 million and $23.7 million during the three and nine months ended September 30~~2025, ~~2024,~~ respectively. Included in depreciation expense for the three ~~and nine~~ months ended ~~September 30,~~March ~~2025~~31, 2025 was $50.2 million ~~and $5.6 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 $0.7 million and $1.0.6 million at ~~September 30~~March 31, ~~2025,~~2026 and December 31, ~~2024~~2025, respectively.

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

	Three Months Ended September 30,					Nine Months Ended September 30,
	Three Months Ended March 31,
	2025			2024		2025			2024
	2026			2025
Operating lease costs	$	4,~~543~~540		$	4,~~808~~780	$	~~13,891~~		$	~~14,772~~
Variable lease costs		1,~~149~~126			1,~~033~~042		~~3,353~~			~~3,075~~
Short term lease cost		63			—		169			—
Short-term lease costs		110			42
Sublease income		(1,158	)		—		(2,099	)		—
Total lease costs	$	5,776		$	5,864
Total lease costs	$	4,597		$	5,841	$	15,314		$	17,847

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 ~~September~~March 3031, ~~2025~~2026 (in thousands):

2025 (excluding the nine months ended September 30, 2025)(a)	$	5,460
2026 (excluding the three months ended March 31, 2026)(1)	$	14,504
2026		22,079
2027		21,008
2027		19,861
2028		20,688
2028		19,647
2029		17,880
2029		16,820
2030		12,072
Thereafter		3425,~~270~~297
Total operating lease payments		~~118~~111,~~137~~449
Less – lease payments representing interest		(2019,~~921~~550	)
Present value of operating lease payments	$	9791,~~216~~899

(a1) Amount consists of $514.68 million of undiscounted cash flows offset by $0.13 million of tenant improvement allowances which are expected to be fully utilized in fiscal ~~2025~~2026.

As of ~~September~~March 3031, ~~2025,~~2026 and December 31, ~~2024~~2025, the weighted-average remaining term of operating leases was 6.1 years and 6.83 years, respectively, and the weighted-average discount rate of operating leases was 6.0490% and 6.0979%, respectively.

The following table provides supplemental information related to the Company’s unaudited condensed consolidated statement of cash flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2025,~~2026 and ~~2024~~2025 (in thousands):

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024
	2026		2025
Cash paid for amounts included in present value of operating lease liabilities (b)	$	16,644	$	12,426
Cash paid for amounts included in present value of operating lease liabilities (1)	$	5,503	$	4,099
Right-of-use assets obtained in exchange for operating lease liabilities		71,~~305~~668		27,~~981~~192

(b1) 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):

	September 30,		December 31,
	March 31,		December 31,
	2025		2024
	2026		2025
Accrued sales returns	$	3,~~625~~522	$	64,~~515~~492
Accrued sales and use tax and property tax		2,604		3,059
Accrued sales tax and use tax		1,669		2,264
Insurance financing		2,746		1,328
Asset retirement obligation		1,132		1,132
Asset retirement obligation		1,132		1,440
Insurance financing		470		1,676
Other		~~521~~804		~~408~~775
Total other current liabilities	$	107,~~628~~597	$	1210,~~750~~339

~~10. Debt~~12

~~Debt~~PURPLE INNOVATION, INC. ~~consisted~~Notes ofto ~~the~~Condensed ~~following~~Consolidated ~~(in~~Financial ~~thousands~~Statements (unaudited):

	September 30,			December 31,
	2025			2024
Related party loan	$	122,160		$	70,679
Less: unamortized debt issuance costs		(19,271	)		(15,285	)
Total debt		102,889			55,394
Current portion of debt and unamortized issuance costs		—			—
Debt, net of current portion	$	102,889		$	55,394

10. Debt

12Debt consisted of the following (in thousands):

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

	March 31,			December 31,
	2026			2025
Related party loan	$	132,487		$	126,697
Less: unamortized debt issuance costs		(13,288	)		(15,392	)
Total related party debt		119,199			111,305

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~~ and Delaware Trust Company, as administrative agent. The Lenders agreed to assume the Loan Parties’ obligations under the Term ~~Loan~~ 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~~ 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~~and ~~2024~~incurred ~~Warrants~~additional ~~include~~fees ~~full-ratchet~~and ~~anti-dilution~~expenses ~~protections, subject to a floor~~ of $03.~~8502~~5 ~~with~~million ~~respect~~that towere ~~adjustments~~recorded toas ~~the~~debt ~~exercise~~issuance ~~price~~costs in ~~and~~the ~~expire~~first onquarter ~~January~~of ~~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. As of March 31, 2025, the Company was in compliance with all covenants under the Amended and Restated Credit Agreement.

132025 Amendment

~~PURPLE~~On March 12, 2025, the Loan ~~INNOVATION~~Parties, ~~INC~~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. ~~Notes~~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 ~~Condensed~~an ~~Consolidated~~initial ~~Financial~~aggregate principal ~~Statements~~amount of $80.0 million, pursuant to Section 2.18 of the Amended and Restated Credit Agreement, 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 (~~unaudited~~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.

~~2025 Amendment~~13

~~On March~~PURPLE 12INNOVATION, 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 AgreementINC. ~~The 2025 Amendment, among other things, provides for an increase in the initial principal amount of the Related Party~~ ~~Loan~~Notes ~~by $19.0 million (the “First Incremental Loan”) from an initial Related Party Loan principal amount of $61.0 million~~ to anCondensed ~~initial~~Consolidated ~~aggregate~~Financial ~~principal amount of $80.0 million, and allows the Loan Parties to request one or more additional term loans from~~Statements ~~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~~unaudited). 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~~as the ~~2025~~effective ~~Lenders~~borrowing ~~did~~rate was not ~~grant~~reduced, atherefore ~~concession as~~ the ~~effective borrowing~~2025 ~~rate~~Lenders ~~was~~did not ~~reduced~~grant a concession, and the 2025 Amendment terms were not substantially different from the Amended and Restated Credit Agreement.

14Second 2025 Amendment

~~PURPLE~~On May 2, 2025, the Loan Parties ~~INNOVATION~~entered into a Second Amendment to the Amended and Restated Credit Agreement (the “Second 2025 Amendment”) with the 2025 Lenders, which ~~INC~~amends the Amended A&R Credit Agreement. The Second 2025 Amendment, among other things, provides for a commitment increase in ~~Notes~~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 ~~Condensed~~$80.0 ~~Consolidated~~million ~~Financial~~(the ~~Statements~~“Existing Loan”) to an initial aggregate principal amount of up to $100.0 million (~~unaudited~~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.

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. 14

~~The Second~~PURPLE ~~2025~~INNOVATION, ~~Amendment also provides that (i) the Second Incremental Loan shall be senior in right of repayment to the initial $61~~INC.~~0 million~~ ~~loan~~Notes 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~~Condensed anConsolidated ~~amount~~Financial ~~equal to the~~Statements ~~greater of~~ (aunaudited) 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~~0.2 million,~~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~~Common AStock ~~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~~Third ~~has~~Amendment ~~elected~~ to ~~have interest paid-in-kind and added to~~ the ~~principal amount of the loans. Interest expense under the Related~~Amended ~~Party~~A&R ~~Loan,~~Credit the First Incremental Loan and the Second Incremental Loan for the three and nine months ended September 30, 2025, consisted of paid-in-kind interest of $4.5 million and $11.3 million, respectively, and debt issuance cost amortization of $3.9 million and $9.5 million, respectively. Interest expense under the Related Party Loan for the three and nine months ended September 30, 2024, consisted of paid-in-kind interest of $2.7 million and $7.0 million, respectively, and debt issuance cost amortization of $1.9 million and $5.3 million, respectively. The effective interest rate was 14.68% and 14.68% for the three and nine months ended September 30, 2025, respectively, and 15.66% and 15.73% for the three and nine months ended September 30, 2024, respectively.Agreement

~~As of~~On ~~September~~March 3024, ~~2025~~2026, the ~~Company~~Loan ~~was~~Parties inentered ~~compliance~~into a Third Amendment to the Amended A&R Credit Agreement with ~~all~~the ~~covenants~~Lenders, which revised the maturity date under the Amended ~~and~~A&R ~~Restated~~ Credit Agreement asfrom ~~amended~~December by31, 2026, to April 30, 2027 and waived certain requirements and events of default relating to the going concern qualification in our December 31, 2025 financial statements. In connection with the Third Amendment, ~~and~~the Loan Parties agreed to pay to the ~~Second~~Lenders an amendment fee in the aggregate amount of $1.6 million, equal to 1.25% pro rata based on each Lender’s outstanding principal amount (the “Amendment Fee”). Of the Amendment Fee, approximately $1.3 million was payable-in-kind by adding such amount to the 2025 Lenders’ outstanding principal amount. The remaining $0.3 million of the Amendment Fee was paid in cash to the other lenders. In connection with the Third Amendment, the Loan Parties also agreed to reimburse the 2025 Lenders for certain expenses in the amount of $0.3 million.

15Pursuant to the Third Amendment to the Amended A&R Credit Agreement, the Loan Parties waived certain requirements and events of default relating to the going concern qualification in our December 31, 2025 financial statements. Accordingly, the Company is in compliance as of March 31, 2026, with all covenants under the Amended A&R Credit Agreement.

~~PURPLE~~The Company determined that it was experiencing financial difficulty and that the extension represented a concession granted by the Lenders ~~INNOVATION~~as the effective borrowing rate was reduced. Accordingly, ~~INC~~the Company accounted for the Third Amendment as a troubled debt restructuring. ~~Notes~~Since tothe ~~Condensed~~undiscounted ~~Consolidated~~future ~~Financial~~cash ~~Statements~~payments were more than the carrying amount of the existing instrument, no gain was recognized. The ~~(unaudited)~~impact of the revised terms, including the extension and associated amendment fee, has been reflected in the carrying amount of the debt and is being recognized through interest expense prospectively using a revised effective interest rate.

11The 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 ~~Warrant~~Loan ~~Liabilities~~and the Second Incremental Loan for the three months ended March 31, 2026 and 2025 consisted of paid-in-kind interest of $4.5 million and $2.8 million, respectively and debt issuance cost amortization of $3.7 million and $2.1 million, respectively. The effective interest rate was 14.03% and 14.68% for the three months ended March 31, 2026 and 2025, respectively.

~~On January 23, 2024, in connection with the Amended and Restated Credit Agreement, the Company issued 20~~11.0 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 recorded at fair value on the date of issuance with the offset included in debt issuance costs. This liability is subsequently re-measured to fair value at each reporting date or exercise date with changes in the fair value included in earnings.Liabilities

~~The~~On January 23, 2024, in connection with the Amended and Restated Credit Agreement, the Company ~~used~~issued a20.0 ~~Monte~~million ~~Carlo~~2024 ~~Simulation~~Warrants ~~model~~to the Lenders, on March 12, 2025, in connection with the 2025 Amendment, the Company issued 6.2 million 2025 Warrants to ~~determine~~the 2025 Lenders, on May 2, 2025, in connection with the ~~fair~~Second 2025 ~~value~~Amendment, ofthe Company issued 6.6 million 2025 Additional Warrants to the ~~liability~~2025 ~~associated~~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 Common Stock (the “SGI Warrants,” collectively, the “Warrants”). ~~The~~Each ~~model~~Warrant ~~used~~entitles the registered holder to purchase one ~~key~~share ~~assumptions~~of ~~and~~the ~~inputs~~Company’s Class A common stock at a price of $1.50 per share, ~~such~~subject asto adjustment. 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, ~~fair~~or ~~market~~earlier ~~value~~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, ~~risk~~each ~~free~~holder ~~interest~~will ~~rate~~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 ~~warrant~~the ~~life~~extent that after giving effect to such exercise, ~~expected~~the holder (together with its affiliates) would beneficially own in excess of ~~volatility~~49.9% ~~and~~of the ~~probability~~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 ~~re-~~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 ~~event~~of the Warrants. The ~~following~~Company ~~are~~determined the ~~assumptions~~fundamental ~~used~~transaction inprovisions ~~calculating~~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 recorded at fair value on the date of issuance with the offset included in debt issuance costs. This liability is subsequently re-measured to fair value at each reporting date or exercise date with changes in the fair value included in earnings.

	September 30,			December 31,
	2025			2024
Trading price of common stock on measurement date	$	0.93		$	0.78
Exercise price	$	1.50		$	1.50
Risk free interest rate		3.95 – 4.04	%		4.45	%
Warrant life in years		8.32 – 9.45			9.06
Expected volatility		88.0	%		88.0	%
Expected dividend yield		—			—
Probability of an event causing a warrant re-price		70.0	%		25.0	%
Estimated date of event causing a warrant re-price		March 2026			January 2029

~~The Warrants~~PURPLE ~~had a fair value of $22.0 million as of September 30~~INNOVATION, ~~2025~~INC. ~~The Company recognized a $6.9 million and a $11.3 million gain in~~ ~~its~~Notes ~~unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2025, respectively related~~ to aCondensed ~~net~~Consolidated ~~decrease~~Financial ~~in the fair value of the Warrants outstanding at the end of the period compared to the fair value of the Warrants at~~Statements previous measurement dates. The Company recorded a gain of $4.8 million for the three months ended September 30, 2024 and a loss of $0.1 million for the nine months ended September, 2024 related to the change in fair value of the 2024 Warrants outstanding at the end of the period compared to the fair value of the warrants at previous measurement dates.(unaudited)

12The Company used a Monte Carlo Simulation model to determine the fair value of the liability associated with the Warrants. The model used key assumptions and inputs, ~~Other~~such ~~Long~~as exercise price, fair market value of common stock, risk free interest rate, warrant life, expected volatility and the probability of a warrant re-~~Term~~price ~~Liabilities~~event. The following are the assumptions used in calculating fair value of the Warrants:

Other long-term liabilities consist of the following (in thousands):

	March 31,			December 31,
	2026			2025
Trading price of common stock on measurement date	$	0.66		$	0.69
Exercise price	$	1.50		$	1.50
Risk free interest rate		4.08 – 4.15	%		3.95 – 4.03	%
Warrant life in years		7.82 – 8.95			8.06 – 9.20
Expected volatility		87.0	%		88.0	%
Expected dividend yield		—			—
Probability of an event causing a warrant re-price		40.0	%		70.0	%
Estimated date of event causing a warrant re-price		March 2027			May 2026

	September 30,		December 31,
	2025		2024
Asset retirement obligations	$	1,144	$	1,098
Other		866		911
Total other long-term liabilities	$	2,010	$	2,009

The Warrants had a fair value of $23.1 million as of March 31, 2026. The Company recognized a $7.0 million expense in the unaudited condensed consolidated statement of operations for the three months ended March 31, 2026 related to an increase in the fair value of the Warrants outstanding at the end of the period compared to the fair value of the Warrants at the end of 2025. The Company recorded a de minimis gain for the three months ended March 31, 2025 related to the increase in fair value of the Warrants outstanding at the end of the period.

1612. Other Long-Term Liabilities

~~PURPLE INNOVATION,~~Other ~~INC.~~long-term liabilities ~~Notes~~consist toof ~~Condensed~~the ~~Consolidated~~following ~~Financial Statements~~ (~~unaudited~~in thousands):

13. Commitments and Contingencies

	March 31,		December 31,
	2026		2025
Asset retirement obligations	$	1,176	$	1,160
Other		453		604
Total other long-term liabilities	$	1,629	$	1,764

~~Warranty Liabilities~~13. Commitments and Contingencies

~~The Company~~Warranty provides a limited warranty on most of the products it sells. The estimated warranty costs associated with products sold through DTC channels are expensed at the time of sale and included in cost of revenues. The estimated warranty return costs associated with products sold through the wholesale channel are recorded at the time of sale and included as an offset to net revenues. Estimates for warranty costs are based on the results of product testing, industry and historical trends and warranty claim rates incurred, and are adjusted for any current or expected trends as appropriate. Actual warranty claim costs could differ from these estimates. The Company regularly assesses and adjusts the estimate of accrued warranty claims by updating claims rates for actual trends and projected claim costs. The Company classifies estimated warranty costs expected to be paid beyond a year as a long-term liability. The Company has accrued $31.8 million and $32.2 million in estimated future warranty costs as of September 30, 2025, and December 31, 2024, respectively.Liabilities

~~Chief~~The Company provides a limited ~~Executive~~warranty ~~Officer~~on ~~Cash~~most ~~Bonus~~of ~~Award~~the products it sells. The estimated warranty return costs associated with products sold through DTC channels are expensed at the time of sale and included in cost of revenues. The estimated warranty return costs associated with products sold through the wholesale channel are recorded at the time of sale and included as an offset to net revenues. Estimates for DTC warranty costs are based primarily on historical warranty claims, estimated warranty costs and the estimate warranty claim rate. Estimates for wholesale warranty costs are based primarily on the historical warranty claim amounts and the estimated claim rate and may be adjusted for any current or expected trends as appropriate. Actual warranty claim costs could differ from these estimates. The Company regularly assesses and adjusts the estimate of accrued warranty claims by updating claims rates for actual trends and projected claim costs. The Company classifies estimated warranty costs expected to be paid beyond a year as a long-term liability. The Company has accrued $27.5 million and $26.7 million in estimated future warranty costs as of March 31, 2026 and December 31, 2025, respectively.

~~On January 26, 2024, the Company’s board of directors (the “Board”) approved an amendment to the~~ Chief Executive Officer’s ~~employment~~Cash ~~agreement.~~Bonus Under the amendment, the Company agreed that, among other things, the Chief Executive Officer will be eligible to earn a cash payment of up to $5.0 million, less tax and other required withholdings, based on the volume weighted average price per share of the Company’s Class A common stock on NASDAQ during the period from March 16, 2026 through June 30, 2026 subject to his continued employment with the Company. The amount earned will be payable in quarterly installments commencing with the first payroll period following June 30, 2026. The Company determined the provisions surrounding the future bonus payment require it 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. The Company recorded a de minimis compensation expense in its unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2025. The Company recorded a compensation expense reduction of $0.2 million for the three months ended September 30, 2024, and a $0.1 million compensation expense for the nine months ended September 30, 2024, in its unaudited condensed consolidated statement of operations related to the future bonus payment.Award

~~Senior~~On January 26, 2024, the Company’s board of directors (the “Board”) ~~Leadership~~approved ~~Team~~an ~~Special~~amendment ~~Recognition~~to ~~Bonus~~the Chief Executive Officer’s employment agreement. Under the amendment, the Company agreed that, among other things, the Chief Executive Officer will be eligible to earn a cash payment of up to $5.0 million, less tax and other required withholdings, based on the volume weighted average price per share of the Company’s Class A common stock on NASDAQ during the period from March 16, 2026 through June 30, 2026 subject to his continued employment with the Company. The amount earned will be payable in quarterly installments commencing with the first payroll period following June 30, 2026. The Company determined the provisions surrounding the future bonus payment require it 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. The Company recorded a de minimis compensation expense reduction in the unaudited condensed consolidated statement of operations for the three months ended March 31, 2026 and 2025 related to this future bonus payment.

On January 26, 2024, the Board unanimously approved a special recognition bonus payment to certain members of the Company’s senior leadership team. The bonus was awarded to incentivize retention and continued engagement with the Company during these challenging times in the bedding industry. Each participant is eligible to earn a special recognition bonus payment equal to 15 months of their regular salary. The special recognition bonus payment is paid as follows, subject to the employee’s continued employment with the Company: 10% was paid in August 2024, 20% was paid in February 2025, and the remaining 70% was to be paid in August 2025. Certain members of the Company’s senior leadership team agreed to postpone their August 2025 payment until January 2026 for a 15% premium on the amount that was due to be paid in August 2025. Related to this bonus payment, the Company recorded a $0.4 million and $1.3 million compensation expense for the three and nine months ended September 30, 2025, respectively and $0.9 million and $2.3 million compensation expense for the three and nine months ended September 30, 2024, respectively, in its unaudited condensed consolidated statement of operations.16

~~Long-Term~~PURPLE INNOVATION, INC. ~~Incentive~~Notes ~~Cash~~to ~~Bonus~~Condensed ~~Award~~Consolidated Financial Statements (unaudited)

~~On July~~Senior ~~17,~~Leadership ~~2025, the Board unanimously approved a cash long-term incentive award to those employees eligible to participate in the Company’s~~Team ~~2017~~Special ~~Plan~~Recognition (as defined below). The incentive award payment is based on a combination of time-based payments over a three-year period and performance-based payments paid in three years if certain financial performance targets are met.Bonus

On ~~June~~January 2026, 2024, the Board unanimously approved a ~~performance~~special ~~cash~~recognition ~~long-term~~bonus ~~incentive~~payment ~~award~~ to ~~those~~certain ~~employees~~members ~~eligible~~of ~~to participate in~~ the Company’s ~~2017~~senior leadership ~~Plan~~team. The ~~incentive~~bonus ~~award~~was ~~payment~~awarded isto ~~based~~incentivize onretention aand ~~performance~~continued ~~goal~~engagement ofwith the ~~volume~~Company ~~weighted~~during ~~average~~these ~~price~~challenging ~~per~~times ~~share~~in the bedding industry. Each participant is eligible to earn a special recognition bonus payment equal to 15 months of their regular salary. The special recognition bonus payment is paid as follows, subject to the ~~Company~~employee’s ~~Class~~continued Aemployment ~~common~~with ~~stock~~the onCompany: 10% ~~NASDAQ~~was onpaid ~~March~~in 31August 2024, ~~2027.~~20% ~~The~~was ~~Company~~paid ~~determined~~in February 2025, and the ~~provisions~~remaining ~~surrounding~~70% was to be paid in August 2025. Certain members of the ~~performance~~Company’s ~~cash~~senior ~~long-term~~leadership ~~incentive~~team ~~award~~agreed ~~require~~to itpostpone totheir beAugust ~~accounted~~2025 ~~for~~payment asuntil January 2026 for a ~~liability~~15% atpremium ~~fair~~on ~~value~~the atamount that ~~each~~was ~~reporting~~due ~~period~~to be paid in August 2025. Related to this bonus payment, ~~with~~the Company recorded no compensation expense for the three months ~~changes~~ended inMarch ~~fair~~31, ~~value~~2026 ~~recognized~~and ina ~~earnings~~de minimis compensation expense for the three months ended March 31, 2025 in the ~~period~~unaudited condensed consolidated statement of ~~change~~operations.

~~The~~Long-Term ~~Company~~Incentive ~~recorded~~Cash ~~$0.2~~Bonus million of compensation expense in the unaudited consolidated statement of operations for the three and nine months ended September 30, 2025, and a de minimis amount for the three and nine months ended September 30, 2024 related to these future cash award payments.Awards

On July 17, 2025, the Board unanimously approved a long-term incentive cash award to those employees eligible to participate in the Company’s 2017 Plan. The incentive award payment is based on a combination of time-based payments over a three-year period and performance-based payments paid in three years if certain financial performance targets are met.

~~PURPLE~~On ~~INNOVATION~~June 20, ~~INC~~2024, the Board unanimously approved a performance long-term incentive cash award to those employees eligible to participate in the Company’s 2017 Plan. The incentive award payment is based on a performance goal of the volume weighted average price per ~~Notes~~share of the Company’s Common Stock on NASDAQ on March 31, 2027. The Company determined the provisions surrounding the performance cash long-term incentive award require it to ~~Condensed~~be ~~Consolidated~~accounted ~~Financial~~for ~~Statements~~as a liability at fair value at each reporting period, with changes in fair ~~(unaudited)~~value recognized in earnings in the period of change.

~~Settlement~~The Company recorded a de minimis amount of ~~Insurance~~compensation ~~Claim~~expense in the unaudited condensed consolidated statement of operations for the three months ended March 31, 2026 and 2025 related to these future award payments.

~~In January~~Rights ~~2024, the Company received a $4.3 million payment for partial settlement~~ of aSecurities previously filed business interruption claim which was recorded during the first quarter of 2024 as other income, net in the unaudited condensed consolidated statement of operations. In July 2024, pursuant to the same previously filed business interruption claim, the Company received the remaining settlement payment amount of $7.3 million which was recorded during the third quarter of 2024 as other income, net in the unaudited condensed consolidated statement of operations.Holders

~~Rights~~On January 23, 2024, in connection with the issuance of the 2024 Warrants, the Company entered into an amended and restated registration rights agreement with holders of the Warrants (the “Holders”), providing for the registration under the Securities Act of 1933, as amended, of the 2024 Warrants, the shares issuable upon the exercise of the 2024 Warrants and Common Stock held by the Holders as of such date, subject to customary terms and conditions.

On ~~January~~ ~~23,~~March ~~2024~~12, 2025 in connection with the issuance of the ~~2024~~2025 Warrants, the Company entered into ana ~~amended~~Second Amended and ~~restated~~Restated ~~registration rights~~Registration ~~agreement~~Rights Agreement (the “Registration Rights Agreement”) with ~~holders of~~ the ~~2024 Warrants (the “2024~~ Holders”), providing for the registration ~~under~~of the ~~Securities~~2025 ~~Act of 1933~~Warrants, ~~as amended (~~the ~~“Securities~~shares ~~Act”),~~ of ~~the~~Common ~~2024~~Stock ~~Warrants, the shares~~ issuable upon the exercise of the ~~2024~~ Warrants, and ~~Class~~the ACommon ~~common~~Stock ~~stock~~ held by the ~~2024~~ Holders as of such date (the “~~2024~~ Registrable Securities”)~~, subject to customary terms and conditions~~. The Registration Rights Agreement entitles the 2024 Holders to demand registration of the Registrable Securities and to piggyback on the registration of securities by the Company and other Company security holders. The Company will be responsible for the payment of the 2024 Holders’ expenses in connection with any offering or sale of Registrable Securities by the 2024 Holders, including underwriting discounts or selling commissions, placement agent or broker fees or similar discounts, commissions or fees relating to the sale of certain Registrable Securities. The Registration Rights Agreement provided further that the Company was required to prepare and file with the SEC a registration statement to register the resale of the Registrable Securities. The registration statement filed by the Company on March 21, 2024, registering the Registrable Securities, became effective on June 4, 2024.

~~In connection~~On May 2, 2025 in connection with the issuance of the 2025 Additional Warrants, ~~on March 12, 2025,~~ the Company entered into a ~~Second~~Third Amended and Restated Registration Rights Agreement (the “~~2025~~Third Amended Registration Rights Agreement”) with ~~CCP, Blackwell, and Coliseum Capital Co-Invest III, L.P., (~~the ~~“2025~~ Holders”), providing for the registration under the Securities Act of the 2025 Additional Warrants, the shares issuable upon the exercise of the 2025 Additional Warrants, other warrants held by the ~~2025~~ Holders (and shares issuable upon exercise thereof) and the ~~Class A~~Common ~~common~~Stock ~~stock~~ held by the ~~2025~~ Holders as of such date (the “2025 ~~Initial~~ Additional Registrable Securities”), subject to customary terms and conditions. The 2025 Registration Rights Agreement entitles the 2025 Holders to demand registration of the 2025 Registrable Securities and also to piggyback on the registration of Company securities by the Company and other Company securityholders. The Company will be responsible for the payment of the 2025 Holders’ expenses in connection with any offering or sale of the 2025 Registrable Securities by the 2025 Holders, including underwriting discounts or selling commissions, placement agent or broker fees or similar discounts, commissions or fees relating to the sale of certain 2025 Registrable Securities.

~~In connection~~On May 2, 2025 in connection with the issuance of the ~~2025 Additional Warrants and the~~ SGI Warrants, ~~on May 2, 2025,~~ the Company entered into a ~~Third Amended and Restated~~ Registration Rights Agreement (the “~~Third~~SGI Registration Rights Agreement”) and collectively with the 2025 ~~Holders~~Registration ~~and~~Rights ~~Coliseum Capital~~Agreement ~~Co-Invest~~and ~~III,~~the ~~L.P.,~~Third ~~and~~Amended a Registration Rights Agreement, (the “~~SGI~~ Registration Rights ~~Agreement~~Agreements”) with SGI ~~(together with the Second Amendment Term Loan Lenders)~~, providing for the registration under the Securities Act of ~~1933, as amended (~~the ~~“Securities Act”) of the 2025 Additional Warrants and the~~ SGI Warrants, ~~and~~ the shares issuable upon the exercise of ~~such warrants, as well as other warrants held by~~ the ~~2025~~SGI ~~Holders~~Warrants, (and ~~shares issuable upon exercise thereof) and~~ the ~~Class~~Common AStock ~~common stock~~ held by ~~the~~SGI ~~2025 Holders~~ as of such date (~~together with~~ the ~~2025 Initial Registrable Securities, the~~ “~~2025~~SGI Registrable Securities”), ~~subject to customary terms~~ and ~~conditions. The Third Registration Rights Agreement and SGI Registration Rights Agreement entitle the 2025 Holders~~collectively ~~and~~with ~~SGI to demand registration of~~ the 2025 Registrable Securities. ~~The Registration Rights Agreement~~ and ~~SGI Registration Rights Agreement also entitle the~~ 2025 ~~Holders~~Additional ~~and~~Registrable ~~SGI~~Securities, ~~to piggyback on~~ the registration of Company securities by the Company and other Company securityholders. The Company will be responsible for the payment of the 2025 Holders’ and SGI’s expenses in connection with any offering or sale of 2025 “Registrable Securities ~~by them~~”), ~~including~~subject ~~underwriting discounts or selling commissions, placement agent or broker fees~~to orcustomary ~~similar~~terms ~~discounts,~~and ~~commissions or fees relating to the sale of certain Registrable Securities~~conditions.

~~The registration statement filed by the Company on May 23, 2025, which registered the 2025 Registrable Securities, was declared effective by the SEC on May 30, 2025.~~17

~~NOL~~PURPLE INNOVATION, INC. ~~Rights~~Notes ~~Plan~~to Condensed Consolidated Financial Statements (unaudited)

~~On June~~The ~~27,~~Registration ~~2024, the Board approved the adoption of a limited-duration stockholder rights agreement (the “NOL~~ Rights ~~Plan”)~~Agreements ~~with~~entitle ~~a stated expiration date of June 30, 2025. The Board approved~~ the ~~NOL~~investors ~~Rights~~party ~~Plan~~thereto to ~~protect~~demand ~~stockholder~~registration ~~value~~of bythe ~~attempting~~Registrable ~~to safeguard~~Securities ~~the~~and ~~Company’s~~also ~~ability~~ to ~~use~~piggyback ~~its~~on ~~June 30, 2024 estimated $238 million of net operating losses (~~the ~~“Current~~registration ~~NOLs”)~~of toCompany ~~reduce~~securities ~~potential future federal income tax obligations from becoming substantially limited~~ by ~~future ownership changes in~~ the Company~~’s common~~ ~~stock~~and ~~under~~other ~~Code~~Company ~~Section 382~~securityholders. OnThe ~~October~~Company ~~15,~~will ~~2024,~~be atresponsible afor ~~special~~the ~~meeting~~payment of ~~stockholders (~~the ~~“Special Meeting”), the Company~~Holders’s expenses ~~stockholders~~in ~~ratified~~connection ~~the~~with ~~NOL~~any ~~Rights~~offering ~~Plan.~~or ~~See~~sale ~~Note 15 – Stockholders’ Equity – NOL Rights Plan for further discussion~~ of ~~the~~Registrable ~~NOL Rights Plan. On May 6~~Securities, ~~2025,~~including ~~the~~underwriting ~~Board~~discounts ~~approved~~or ~~the~~selling ~~early termination of the NOL Rights Plan~~commissions, ~~effective~~placement ~~May~~agent 7,or ~~2025.~~broker Infees ~~conjunction~~or ~~with~~similar ~~the termination of the NOL Rights Plan~~discounts, ~~the~~commissions ~~Company~~or ~~filed~~fees arelating ~~Certificate~~to ~~of Elimination with~~ the ~~Secretary of~~sale ~~State~~ of ~~the~~certain ~~State~~Registrable ~~of Delaware eliminating the Series C Junior Participating Preferred Stock, effective May 7, 2025~~Securities.

18The registration statement filed on May 23, 2025, which registered the Registrable Securities, was declared effective by the SEC on May 30, 2025.

~~PURPLE INNOVATION,~~SGI ~~INC. Notes~~Commercial ~~to Condensed Consolidated Financial Statements (unaudited)~~Arrangements

~~NOL~~On May 2, 2025, the Company ~~Protective~~entered ~~Charter~~into a Second Amendment to Master Retailer Agreement (the “MRA Amendment”) with Mattress Firm, a business unit of SGI, which provides that SGI, through its Mattress Firm stores, will expand its inventory of the Company’s products across its national store network from approximately 5,000 mattress slots to a minimum of 12,000 mattress slots. The agreement includes a $3.5 million fee to be paid by the Company to reimburse Mattress Firm for certain costs in transitioning to the product placement required by the agreement. The fee is accounted for under the provisions of ASC 606—Revenue from Contracts with Customers as consideration payable to a customer as a reduction of revenue over the life of the contract and is included in accrued rebates and allowances on the audited consolidated balance sheets. The Company recorded $0.3 million as a reduction of revenue in the unaudited condensed consolidated statement of operations for the three months ended March 31, 2026.

~~To further~~Also ~~safeguard~~on ~~the~~May 2, 2025, the Company’s ~~ability~~entered tointo ~~use~~an ~~its~~Amended ~~Current~~and ~~NOLs,~~Restated onMaster ~~July~~Vendor ~~27,~~Supply ~~2024,~~and Services Agreement (the ~~Board~~“Sherwood ~~adopted,~~Agreement” and ~~recommended~~together with ~~that~~the MRA Amendment the ~~Company’s~~ ~~stockholders~~“SGI ~~approve,~~Agreements”) anwith ~~amendment~~Tempur toSherwood, ~~the~~LLC, ~~Company’s~~a ~~Certificate~~subsidiary of ~~Incorporation~~Tempur ~~(the~~Sealy. ~~“NOL~~The ~~Protective~~Sherwood ~~Charter~~Agreement ~~Amendment”)~~provides that ~~adds~~Tempur anSherwood, ~~additional~~LLC ~~layer~~will ofhave ~~protection~~the ofexclusive right to assemble certain product lines, such as Purple Royale, that the ~~Current~~Company sells ~~NOLs~~to ~~until~~Mattress ~~June~~Firm. 30The SGI Agreements expire on December 31, ~~2025~~2027. byRevenue ~~voiding~~for certain ~~transfers~~product ofarrangements is presented differently ~~common~~depending ~~stock~~on ~~that~~the ~~could~~nature ~~result~~of inthe anunderlying ~~ownership~~manufacturing ~~change~~relationships ~~under~~and ~~Code~~the ~~Section~~application ~~382~~of ASC 606—Revenue from Contracts with Customers. AtUnder the ~~Special~~guidance, ~~Meeting~~payments to Tempur Sherwood, ~~the~~LLC ~~Company’s~~are ~~stockholders~~evaluated to determine whether they are economically linked ~~approved~~to the ~~NOL~~underlying ~~Protective~~customer ~~Charter Amendment~~arrangement. OnThe ~~May~~Company 6,has ~~2025~~concluded that payments to Tempur Sherwood, ~~the~~LLC ~~Board~~are ~~approved~~economically linked to the Mattress ~~early~~Firm ~~termination~~MRA Amendment and therefore represent consideration payable to a customer. As a result of the ~~NOL~~Purple ~~Protective~~Royale ~~Charter Amendment~~launch, ~~effective~~these payments ~~May~~are 7recorded as a reduction of revenue, ~~2025.~~and ~~See~~revenue ~~Note~~is 15presented –on ~~Stockholders’~~a ~~Equity~~net –basis. ~~NOL~~The ~~Protective~~Company ~~Charter~~recorded ~~Amendment~~$4.9 ~~for~~million in consideration ~~further~~paid ~~discussion~~to Tempur Sherwood, LLC as a reduction of revenue in the ~~NOL~~unaudited ~~Protective~~condensed ~~Charter~~consolidated ~~Amendment~~statement of operations for the three months ended March 31, 2026.

In connection with the SGI ~~Commercial~~Agreements, ~~Arrangements~~the Company issued to SGI the SGI Warrants to purchase 8.0 million shares of the Company’s Class A common stock at a strike price of $1.50 per share. The SGI 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 Company determined the warrants are required to be accounted for as a liability at the fair value of $6.5 million on the date of the transaction (see Note 11 – Warrant Liabilities). The fair value of the warrants on the date of the transaction is accounted for under the provisions of ASC 606—Revenue from Contracts with Customers and deemed to be consideration payable to a customer as a reduction of revenue over the life of the contract. The Company recorded $0.6 million as a reduction of revenue in the unaudited condensed consolidated statement of operations for the three months ended March 31, 2026.

On May 2, 2025, the Company entered into a Second Amendment to Master Retailer Agreement (the “MRA Amendment”) with Mattress Firm, a business unit of SGI, which provides that SGI, through its Mattress Firm stores, will expand its inventory of the Company’s products across its national store network from approximately 5,000 mattress slots to a minimum of 12,000 mattress slots. The agreement includes a $3.5 million fee to be paid by the Company to reimburse Mattress Firm for certain costs in transitioning to the product placement required by the agreement. The fee is accounted for under the provisions of ASC 606—Revenue from Contracts with Customers as consideration payable to a customer as a reduction of revenue over the life of the contract and is included in accrued rebates and allowances on the unaudited condensed consolidated balance sheets. The Company recorded $0.3 million and $0.5 million as a reduction of revenue for the three and nine months ended September 30, 2025, respectively. Also on May 2, 2025, the Company entered into an Amended and Restated Master Vendor Supply and Services Agreement (the “Sherwood Agreement” and together with the MRA Amendment the “SGI Agreements”) with Tempur Sherwood, LLC, a subsidiary of Tempur Sealy. The Sherwood Agreement provides that Tempur Sherwood, LLC will have the exclusive right to assemble certain product lines that the Company sells to Mattress Firm. The SGI Agreements expire on December 31, 2027.18

~~In connection~~PURPLE ~~with the SGI Agreements~~INNOVATION, ~~the Company issued to SGI the SGI Warrants to purchase 8~~INC.~~0 million shares of the Company’s~~ ~~Class~~Notes ~~A common stock at a strike price of $1.50 per share. The SGI Warrants include full-ratchet anti-dilution protections, subject~~ to a ~~floor~~Condensed ofConsolidated ~~$0.6979~~Financial ~~with respect to adjustments to the exercise price and expire on March 12, 2035. The Company determined the warrants~~Statements ~~are required to be accounted for as a liability at the fair value of $6.5 million on the date of the transaction~~ (~~see Note 11 – Warrant Liabilities~~unaudited). The fair value of the warrants on the date of the transaction is accounted for under the provisions of ASC 606—Revenue from Contracts with Customers and deemed to be consideration payable to a customer as a reduction of revenue over the life of the contract. The Company recorded $0.6 million and $1.0 million as a reduction of revenue for the three and nine months ended September 30, 2025.

Non-Income ~~Related~~ Related Taxes

The U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc., No.17-494, reversed a longstanding precedent that remote sellers are not required to collect state and local sales taxes. The Company cannot predict the effect of these and other attempts to impose sales, income or other taxes on e-commerce. The Company currently collects and reports on sales tax in all states in which it does business. However, the application of existing, new or revised taxes on the Company’s business, in particular, sales taxes, value-added tax and similar taxes would likely increase the cost of doing business online and decrease the attractiveness of selling products over the internet. The application of these taxes on the Company’s business could also create significant increases in internal costs necessary to capture data and collect and remit taxes. There have been, and will continue to be, substantial ongoing costs associated with complying with the various indirect tax requirements in the numerous markets in which the Company conducts or will conduct business.

Legal Proceedings

On December 16, 2022, Purple’s founders filed a complaint against Purple Inc. in the Fourth Judicial District Court in the State of Utah. In that suit, the plaintiffs alleged that they each entered into employment agreements with Purple LLC in February 2018. The plaintiffs contended that certain corporate transactions reduced their “ownership interest and voting power in Purple” and that, as a result, they should have continued to be paid a salary when they retired from Purple LLC. The plaintiffs calculated that they were each owed “no less than $500,000” in unpaid salary. In October 2023, the Court granted Purple Inc.’s motion and ordered that the claims brought by the plaintiffs be dismissed in full, with prejudice. The Court entered a final judgment dismissing the case in January 2024. The plaintiffs appealed. After oral arguments, on April 3, 2025, the Utah Court of Appeals ordered ~~that~~ the case return to the District Court for further fact finding. The Utah Supreme Court declined to hear the case, sending back for further action at the trial court that we expect will continue ~~into~~throughout 2026. The Company maintains insurance to cover the costs of defending against claims of this nature and intends to continue to vigorously defend against these claims in the course of the plaintiffs’ appeal.

19On April 3, 2023, Purple’s founders filed a complaint against Purple LLC in the Delaware Court of Chancery. The complaint alleges that Purple LLC breached the limited liability company agreement of Purple LLC by failing to pay the full amount of tax distributions owed under the agreement. The plaintiffs seek damages of approximately $3.0 million in allegedly unpaid tax distributions as well as legal fees and expenses incurred in connection with the litigation. On June 13, 2023, Purple LLC filed an answer to the complaint denying the plaintiffs’ allegations, setting forth its affirmative defenses, and requesting dismissal of all claims and entry of judgment in Purple LLC’s favor. A trial date has been set for October 2026. The outcome of the litigation cannot be predicted at this stage in the proceedings. Purple LLC denies all allegations and intends to vigorously defend against these claims.

~~PURPLE~~On April 16, 2024, Purple’s ~~INNOVATION~~founders, ~~INC~~in their capacity as a former landlord of Purple LLC, brought a lawsuit against Purple LLC, as lessee, for amounts allegedly owed under a real estate lease which the parties terminated effective September 30, 2023. In the suit, the plaintiffs allege approximately ~~Notes~~$2.5 million in damages, based primarily on a dispute regarding whether Purple LLC left the premises in the condition required by the lease. The plaintiffs further claim approximately $0.8 million in holdover rent, as well as unspecified amounts in interest, late fees, liquidated damages, attorney fees and costs. Fact discovery is scheduled to ~~Condensed~~conclude ~~Consolidated~~in ~~Financial~~2026. ~~Statements~~The court has not yet set a date for trial. ~~(unaudited)~~Purple LLC denies all allegations and intends to vigorously defend against these claims.

On April 3, 2023, Purple’s founders filed a complaint against Purple LLC in the Delaware Court of Chancery. The complaint alleges that Purple LLC breached the limited liability company agreement of Purple LLC by failing to pay the full amount of tax distributions owed under the agreement. The plaintiffs seek damages of approximately $3.0 million in allegedly unpaid tax distributions as well as legal fees and expenses incurred in connection with the litigation. On June 13, 2023, Purple LLC filed an answer to the complaint denying the plaintiffs’ allegations, setting forth its affirmative defenses, and requesting dismissal of all claims and entry of judgment in Purple LLC’s favor. A trial date has been set for June 2026. The outcome of the litigation cannot be predicted at this early stage in the proceedings. Purple LLC denies all allegations and intends to vigorously defend against these claims. 19

~~On April~~PURPLE 16INNOVATION, 2024, Purple’s founders, in their capacity as a former landlord of Purple LLC, brought a lawsuit against Purple LLC, as lessee, for amounts allegedly owed under a real estate lease which the parties terminated effective September 30, 2023INC. ~~In the suit,~~ ~~the~~Notes plaintiffs allege approximately $2.5 million in damages, based primarily on a dispute regarding whether Purple LLC left the premises in the condition required by the lease. The plaintiffs further claim approximately $0.8 million in holdover rent, as well as unspecified amounts in interest, late fees, liquidated damages, attorney fees and costs. Purple LLC denies all allegations and intends to ~~vigorously defend~~Condensed ~~against~~Consolidated ~~these~~Financial ~~claims.~~Statements

On July 24, 2024, a former part-time employee filed a class action lawsuit against Purple LLC in California Superior Court in the County of Alameda alleging failure to pay all wages, failure to pay overtime pay rate, failure to provide all meal periods, and other employment-related causes of action. The suit seeks damages, interest, attorneys’ fees, costs and other relief on behalf of all non-exempt California employees of Purple LLC during the applicable statutory periods. On September 30, 2024, the plaintiffs filed an amended complaint adding a claim for penalties under California’s Private Attorneys General Act. Purple LLC and the plaintiffs mediated the claims on May 8, 2025, which resulted in the parties agreeing to a settlement. The settlement agreement has been signed by the parties. The California Superior Court is expected to approve the settlement.(unaudited)

On ~~February~~ 10July 24, ~~2025~~2024, a ~~shareholder~~former part-time ~~of the Company~~employee filed a class action lawsuit against Purple LLC in ~~the~~California Superior Court ofin ~~Chancery~~the ofCounty ~~the~~of Alameda ~~State~~alleging offailure ~~Delaware~~to ~~against~~pay ~~Purple~~all ~~Inc.~~wages, ~~and~~failure ~~the~~to ~~individual~~pay ~~members~~overtime ofpay ~~the~~rate, ~~Board~~failure ~~alleging~~to ~~that~~provide ~~Section~~all 29meal ofperiods, ~~the~~and ~~NOL~~other ~~Rights Plan violates~~employment-related ~~Delaware~~causes ~~General~~of ~~Corporate Law Sections 102(b)(7) and 141(a)~~action. The suit seeks ~~declaratory~~damages, ~~relief~~interest, attorneys’ fees, costs, and other relief on behalf of all non-exempt California employees of Purple LLC during the ~~class~~applicable statutory periods. ~~The~~On ~~Company~~September ~~denies~~30, ~~all~~2024, ~~allegations~~the plaintiffs filed an amended complaint adding a claim for penalties under California’s Private Attorneys General Act. Purple LLC and ~~intends~~the plaintiffs mediated the claims on May 8, 2025, which resulted in the parties agreeing to ~~vigorously~~a ~~defend~~settlement. ~~against~~The ~~these~~settlement ~~claims~~agreement has been signed by the parties and are currently waiting for the California Superior Court to approve the settlement.

~~The~~On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). The Company ~~and~~estimates ~~Purple~~that ~~LLC~~approximately ~~are~~$5.3 ~~from~~million ~~time~~of toits ~~time~~previous ~~involved~~tariff inpayments ~~various~~are ~~other~~subject ~~claims~~to this ruling. On March 6, ~~legal~~2026, ~~proceedings~~the ~~and~~Company ~~complaints~~filed ~~arising~~a lawsuit in the ~~ordinary course~~U.S. Court of ~~business~~International Trade against the U.S. ~~The~~Customs ~~Company~~and ~~does~~Border Protection ~~not~~(“CBP”), ~~believe~~the ~~that~~CBP ~~adverse~~commissioner, ~~decisions~~and inthe ~~any~~United ~~such~~States ~~pending~~of orAmerica ~~threatened~~seeking ~~proceedings,~~a orfull ~~any~~refund ~~amount that~~of all IEEPA tariffs that the Company ~~might~~has bepaid ~~required~~to the United States. The financial impact of these events is uncertain, as it is unclear to ~~pay~~what extent duties will be refunded by ~~reason~~CBP, ~~thereof~~what processes will govern such refunds, ~~would~~or ~~have~~if athe ~~material~~Company ~~adverse~~can ~~effect~~fully oncollect the related amounts claimed. No adjustments have been recorded in the accompanying unaudited condensed consolidated financial ~~condition~~statements oras ~~future~~the Company will apply the involuntary conversion model which results in recognition of ~~the~~recoveries ~~Company~~when reimbursement is probable.

14The Company is from time to time involved in various other claims, legal proceedings and complaints arising in the ordinary course of business. The Company does not ~~Related~~believe ~~Party~~that ~~Transactions~~adverse decisions in any such pending or threatened proceedings, or any amount that the Company might be required to pay by reason thereof, would have a material adverse effect on the financial condition or future results of the Company.

~~The Company~~14. ~~has~~Related ~~engaged~~Party ~~in various transactions with entities or individuals which are considered related parties.~~Transactions

~~Coliseum~~The Company has engaged in ~~Capital~~various ~~Management,~~transactions ~~LLC~~with entities or individuals which are considered related parties.

~~Immediately following the Business Combination, Adam Gray was appointed to the Board. Mr. Gray is a manager of~~ Coliseum Capital, ~~LLC~~Management, ~~which is the~~ general partner of CCP and Coliseum Co-Invest Debt Fund, L.P. (“CDF”), and he is also a managing partner of CCM, which is the investment manager of Blackwell and also manages investment funds and accounts. Mr. Gray has voting and dispositive control over securities held by CCP, CDF and Blackwell. Lenders under the Amended and Restated Credit Agreement and 2025 Lenders under the 2025 Amendment and Second 2025 Amendment included CCP and Blackwell. See Note 10— Debt for further discussion. In April 2023, Adam Gray was appointed Chairman of the Board of the Company as part of an agreement to resolve litigation that had been brought by Coliseum against the Company.LLC

15Immediately following the Business Combination, Adam Gray was appointed to the Board. Mr. Gray is a manager of Coliseum Capital, LLC, which is the general partner ~~Stockholders’~~of ~~Equity~~CCP and Coliseum Co-Invest Debt Fund, L.P. (“CDF”), and he is also a managing partner of Coliseum Capital Management, LLC (“CCM”), which is the investment manager of Blackwell and also manages investment funds and accounts. Mr. Gray has voting and dispositive control over securities held by CCP, CDF and Blackwell. In April 2023, Adam Gray was appointed Chairman of the Board of the Company as part of an agreement to resolve litigation that had been brought by Coliseum against the Company. Refer to Note 10— Debt for more information on the Related Party Loan and amendments.

~~Class A~~15. ~~Common~~Stockholders’ ~~Stock~~Equity

~~The Company has 210.0 million shares of~~ Class A ~~common~~Common stock authorized. Holders of the Company’s Class A common stock are entitled to one vote for each share held on all matters to be voted on by the stockholders. Holders of Class A common stock and holders of Class B common stock voting together as a single class have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders. At September 30, 2025, 108.2 million shares of Class A common stock were outstanding.Stock

20The Company has 210.0 million shares of Class A common stock authorized. Holders of the Company’s Class A common stock are entitled to one vote for each share held on all matters to be voted on by the stockholders. Holders of Class A common stock and holders of Class B common stock voting together as a single class have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders. At March 31, 2026, 108.6 million shares of Class A common stock were outstanding.

~~PURPLE INNOVATION,~~Class ~~INC. Notes~~B toCommon ~~Condensed Consolidated Financial Statements (unaudited)~~Stock

The Company has 90.0 million shares of Class B common stock authorized. Holders of the Company’s Class B common stock will vote together as a single class with holders of the Company’s Class A common stock on all matters properly submitted to a vote of the stockholders. Shares of Class B common ~~Common~~stock ~~Stock~~may be issued only to InnoHold, their respective successors and assigns, as well as any permitted transferees of InnoHold. A holder may transfer their shares of Class B common stock to any transferee (other than the Company) only if such holder also simultaneously transfers an equal number of such holder’s Class B Units to such transferee. The Class B common stock is not entitled to receive dividends, if declared by the Board, or to receive any portion of any such assets in respect of their shares upon liquidation, dissolution, distribution of assets or winding-up of the Company in excess of the par value of such stock. At March 31, 2026, 0.2 million shares of Class B common stock were outstanding.

~~The Company~~Preferred has 90.0 million shares of Class B common stock authorized. Holders of the Company’s Class B common stock will vote together as a single class with holders of the Company’s Class A common stock on all matters properly submitted to a vote of the stockholders. Shares of Class B common stock may be issued only to InnoHold, their respective successors and assigns, as well as any permitted transferees of InnoHold. A holder may transfer their shares of Class B common stock to any transferee (other than the Company) only if such holder also simultaneously transfers an equal number of such holder’s Class B Units to such transferee. The Class B common stock is not entitled to receive dividends, if declared by the Board, or to receive any portion of any such assets in respect of their shares upon liquidation, dissolution, distribution of assets or winding-up of the Company in excess of the par value of such stock. At September 30, 2025, 0.2 million shares of Class B common stock were outstanding.Stock

The Company has 5.0 million shares of preferred stock authorized. The preferred stock may be issued from time to time in one or more series. The Board is expressly authorized to provide for the issuance of shares of the preferred stock in one or more series and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, designations and other special rights or restrictions. At December 31, 2025, there were no shares of preferred stock outstanding. On June 27, 2024, 0.3 million shares of the Company’s authorized shares of preferred stock were designated as Series C Junior Participating Preferred Stock, par value $0.0001 per share (“Series C Preferred Shares”). In conjunction with the termination of the NOL Rights Plan, the Company filed a Certificate of Elimination eliminating the Series C Junior Participating Preferred Stock, effective May 7, 2025. At March 31, 2026, there were no shares of preferred stock outstanding

The Company has 5.0 million shares of preferred stock authorized. The preferred stock may be issued from time to time in one or more series. The Board is expressly authorized to provide for the issuance of shares of the preferred stock in one or more series and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, designations and other special rights or restrictions. On June 27, 2024, 0.3 million shares of the Company’s authorized shares of preferred stock were designated as Series C Junior Participating Preferred Stock, par value $0.0001 per share (“Series C Preferred Shares”). In conjunction with the termination of the NOL Rights Plan, the Company filed a Certificate of Elimination eliminating the Series C Junior Participating Preferred Stock, effective May 7, 2025. At September 30, 2025, there were no shares of preferred stock outstanding.20

~~NOL~~PURPLE INNOVATION, INC. ~~Rights~~Notes ~~Plan~~to Condensed Consolidated Financial Statements (unaudited)

On June 27, 2024, the Board adopted, and the Company entered into the NOL Rights Plan, which is designed to preserve approximately $238 million of the Company’s Current NOLs under Section 382 of the of the Internal Revenue Code of 1986, as amended (“Code Section 382”). At the Special Meeting, the Company’s stockholders ratified the NOL Rights Plan. The Company’s ability to use the Current NOLs to offset future taxable income may be significantly limited if the Company experiences an “ownership change” under Code Section 382, which occurs if one or more stockholders or groups of stockholders that is deemed to own at least 5% of the Company’s common stock increases their aggregate ownership by more than 50 percentage points over its lowest ownership percentage within a rolling three-year period. The NOL Rights Plan is intended to prevent an ownership change by acting as a deterrent to any Person (as such term is defined in the NOL Rights Plan) acquiring 4.9% or more of the outstanding common stock of the Company (or, in the case of a Grandfathered Person (as such term is defined in the NOL Rights Plan), an additional one-half of one percentage point of the outstanding common stock of the Company above their current ownership percentage). Any Person that acquires shares of the Company’s common Stock in violation of the limitations of the NOL Rights Plan is known as an “Acquiring Person.” For purposes of the NOL Rights Plan, “common stock” includes (i) the Class A common stock; (ii) the Class B common stock; and (iii) any interest that would be treated as “stock” of the Company pursuant to Treasury Regulation § 1.382-2T(f)(18). Notwithstanding the foregoing, the NOL Rights Plan allows for the exercise of currently outstanding conversion rights, exchange rights, warrants or options, or otherwise, without triggering the NOL Rights Plan. See Note 11 – Warrant Liabilities for further discussion of the Company’s outstanding warrants.Warrants

The ~~NOL~~ ~~Rights~~Company ~~Plan~~issued ~~provided for the issuance of a dividend of one preferred share purchase right (a “Right”) for each share~~warrants ofin ~~common~~connection ~~stock~~with ~~outstanding~~various onfinancing ~~July~~transactions ~~26,~~and ~~2024~~agreements. ~~Each~~The ~~Right~~Company ~~entitles~~had the ~~holder~~following towarrants ~~purchase~~outstanding ~~from~~at ~~the~~March ~~Company~~31, ~~one one-thousandth of a share~~2026 ofand ~~Series~~December ~~C Preferred Share for a purchase price of $2.75~~31, ~~subject~~2025 ~~to adjustment as provided~~ (in ~~the NOL Rights Plan. Each Series C Preferred Share is designed to be the economic equivalent of one share of common stock.~~thousands):

The Rights provided that they expire on the earliest to occur of (i) the close of business on June 30, 2025; (ii) the time at which the Rights are redeemed (as discussed below) or exchanged by the Company; (iii) the repeal of Code Section 382, if the Board determines that the NOL Rights Plan is no longer necessary for the preservation of the Current NOLs; or (v) the beginning of a taxable year of the Company to which the Board determines that no Current NOLs may be carried forward.

	March 31,		December 31,
	2026		2025
2024 Warrants		20,000		20,000
2025 Warrants		6,230		6,230
2025 Additional Warrants		6,557		6,557
SGI Warrants		8,000		8,000
Total Warrants		40,787		40,787

The ~~initial~~ ~~issuance~~following oftable ~~the Rights as a dividend had no tax, financial accounting or reporting impact. The fair value of the Rights is nominal,~~provides ~~since~~ the ~~Rights~~exercise ~~were~~price ~~not exercisable when issued~~ and noexpiration ~~value~~date isfor ~~attributable~~each towarrant ~~them.~~tranche ~~Additionally,~~as ~~the Rights do not meet the definition~~ of aMarch ~~liability under GAAP and therefore were not accounted for as a long-term obligation. Accordingly~~31, ~~the NOL Rights Plan and the Rights issued thereunder have no impact on the Company’s unaudited consolidated financial statements.~~2026:

On May 6, 2025, the Board approved the early termination of the NOL Rights Plan, effective May 7, 2025.

	Warrant Share Equivalent (000’s)		Exercise Price⁽¹⁾		Expiration Date
2024 Warrants		20,000	$	1.50	January 23, 2034
2025 Warrants		6,230	$	1.50	March 12, 2035
2025 Additional Warrants		6,557	$	1.50	March 12, 2035
SGI Warrants		8,000	$	1.50	March 12, 2035

21(1) Subject to adjustment.

~~PURPLE INNOVATION~~While the Warrants are exercisable, the ~~INC~~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 Common Stock issuable ~~Notes~~upon exercise of the Warrants upon not less than 45 days’ prior written notice of redemption to ~~Condensed~~each ~~Consolidated~~holder. ~~Financial~~This ~~Statements~~redemption right is only available if the reported last sale price of the 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. 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 (~~unaudited~~together with its affiliates) would beneficially own in excess of 49.9% of the shares of Common Stock outstanding immediately after giving effect to such exercise.

~~NOL Protective~~Noncontrolling ~~Charter Amendment~~Interest

~~Concurrently~~Noncontrolling interest (“NCI”) ~~with~~is the ~~adoption~~membership ofinterest ~~NOL~~in ~~Rights~~Purple ~~Plan,~~LLC onheld ~~June~~by ~~27,~~holders ~~2024,~~other ~~the~~than ~~Board adopted, and recommended that~~ the Company’s. ~~stockholders~~At ~~approve at~~March ~~the Special Meeting~~31, ~~the~~2026 ~~NOL~~and ~~Protective~~December ~~Charter Amendment that adds an additional layer of protection of the Current NOLs until June 30~~31, 2025, ~~by voiding any transfer of common stock that results in any Person holding 4.9% or more of~~ the ~~outstanding common stock of the~~combined ~~Company~~NCI ~~(or,~~percentage in ~~the~~Purple ~~case~~LLC ofwas ~~a Person already holding more than 4~~0.915% ofand ~~the outstanding common stock of the Company as of the date of the NOL Protective Charter Amendment~~0.15%, ~~one-half of one percentage point of the outstanding common stock of the Company above their current ownership percentage)~~respectively. AtThe ~~the Special Meeting, the~~ Company’s ~~stockholders~~has ~~approved~~consolidated the ~~NOL~~financial ~~Protective~~position ~~Charter~~and ~~Amendment.~~results ~~Any~~of ~~acquisition~~operations of ~~common~~Purple ~~stock~~LLC inand ~~violation~~reflected of the ~~NOL~~proportionate ~~Protective~~interest ~~Charter~~held ~~Amendment~~by ~~would~~all besuch ~~void~~Purple asLLC ofClass ~~the~~B ~~date~~Unit itholders isas ~~attempted~~NCI.

~~On May~~16. 6,Income ~~2025,~~Taxes ~~the Board approved the early termination of the NOL Protective Charter Amendment, effective May 7, 2025.~~

~~Warrants~~The Company’s sole material asset is Purple LLC, which is treated as a partnership for U.S. federal income tax purposes and for purposes of certain state and local income taxes. Purple LLC’s net taxable income and any related tax credits are passed through to its members and are included in the members’ tax returns, even though such net taxable income or tax credits may not have actually been distributed. While the Company consolidates Purple LLC for financial reporting purposes, the Company will be taxed on its share of earnings of Purple LLC not attributed to the noncontrolling interest holders, which will continue to bear their share of income tax on its allocable earnings of Purple LLC. The income tax burden on the earnings taxed to the noncontrolling interest holders is not reported by the Company in its consolidated financial statements under GAAP.

The Company ~~issued~~reported ~~warrants~~de inminimis ~~connection~~income ~~with~~tax ~~various~~expense ~~financing~~on ~~transactions~~a ~~and~~pretax ~~agreements~~loss of $30.5 ~~The~~million ~~Company~~for ~~had~~ the ~~following~~three ~~warrants~~months ~~outstanding~~ended March 31, 2026 as compared to de minimis income tax expense on pretax loss of $19.1 million atfor ~~September~~the 30three months ended March 31, 2025,. ~~and~~This ~~December~~resulted in an effective tax rate of (0.15%) for the three months ended March 31, ~~2024~~2026 as ~~(in~~compared ~~thousands~~to (0.21%): for the three months ended March 31, 2025. The Company’s effective tax rate for the three months ended March 31, 2026 differs from the statutory federal rate of 21% primarily due to the impact of the full valuation allowance recorded against the Company’s deferred tax assets at March 31, 2026.

	September 30,		December 31,
	2025		2024
2024 Warrants		20,000		20,000
2025 Warrants		6,230		—
2025 Additional Warrants		6,557		—
SGI Warrants		8,000		—
Total Warrants		40,787		20,000

~~The following~~PURPLE ~~table~~INNOVATION, ~~provides~~INC. Notes ~~the~~to ~~exercise~~Condensed ~~price~~Consolidated ~~and~~Financial ~~expiration date for each warrant tranche as of September 30, 2025:~~Statements (unaudited)

	Warrant Share Equivalents (000’s)		Exercise Price (a)		Expiration Date
2024 Warrants		20,000	$	1.50	January 23, 2034
2025 Warrants		6,230	$	1.50	March 12, 2035
2025 Additional Warrants		6,557	$	1.50	March 12, 2035
SGI Warrants		8,000	$	1.50	March 12, 2035

In connection with the Business Combination, the Company entered into a tax receivable agreement with InnoHold, which provides for the payment by the Company to InnoHold of 80% of the net cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the Closing as a result of (i) any tax basis increases in the assets of Purple LLC resulting from the distribution to InnoHold of the cash consideration, (ii) the tax basis increases in the assets of Purple LLC resulting from the redemption by Purple LLC or the exchange by the Company, as applicable, of Class B Paired Securities or cash, as applicable, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, payments it makes under the agreement.

(As noncontrolling interest holders exercise their right to exchange or cause Purple LLC to redeem all or a) ~~Subject~~portion of their Class B Units, a tax receivable agreement liability may be recorded based on 80% of the estimated future cash tax savings that the Company may realize as a result of increases in the basis of the assets of Purple LLC attributed to ~~adjustment~~the Company as a result of such exchange or redemption. The amount of the increase in asset basis, the related estimated cash tax savings and the attendant liability to be recorded will depend on the price of the Company’s Class A common stock at the time of the relevant redemption or exchange.

~~While the~~The ~~Warrants~~effects ~~are~~of ~~exercisable,~~uncertain ~~the~~tax ~~Company~~positions ~~may~~are ~~call~~recognized ~~the Warrants for redemption~~ in ~~whole~~the ~~and~~consolidated financial ~~not~~statements inif ~~part~~these atpositions ~~any~~meet ~~time at~~ a ~~price~~“more-likely-than-not” ~~of $0~~threshold.~~01 per~~ ~~share~~For ofthose ~~Class~~uncertain Atax ~~common~~positions ~~stock~~that ~~issuable~~are recognized ~~upon~~in ~~exercise of~~ the ~~Warrants~~consolidated ~~upon~~financial ~~not~~statements, ~~less~~liabilities ~~than~~are 45established ~~days’~~to ~~prior~~reflect ~~written~~the ~~notice~~portion of ~~redemption to~~those ~~each~~positions ~~holder.~~it ~~This~~cannot ~~redemption~~conclude “more-likely-than-not” ~~right~~to isbe ~~only~~realized ~~available~~upon ifultimate ~~the~~settlement. ~~reported~~The ~~last~~Company’s ~~sale~~policy ~~price~~is ofto ~~the~~recognize ~~Class~~interest Aand ~~common~~penalties related ~~stock~~to ~~equals~~unrecognized ortax ~~exceeds $24.00~~benefits ~~per share~~ on ~~each~~the ofincome 20tax ~~trading~~expense ~~days~~line ~~within~~in ~~a 30-trading day period ending three business days before~~ the ~~Company~~accompanying ~~sends~~consolidated ~~the~~statement ~~notice~~ of ~~redemption to the holders~~operations. AAccrued interest ~~holder~~and ofpenalties ~~the~~would ~~Warrants~~be ~~will~~included ~~not~~on ~~have~~ the ~~right~~related totax ~~exercise~~liability ~~its~~line ~~Warrants,~~in to the ~~extent~~consolidated ~~that~~balance ~~after~~sheet. ~~giving effect~~As toof ~~such~~March ~~exercise~~31, 2026, the Company ~~holder~~had ~~(together~~unrecognized ~~with~~tax ~~its~~benefits ~~affiliates) would beneficially own in excess~~ of 49$1.9%1 ~~of the shares of Class A common stock outstanding immediately after giving effect to such exercise~~million.

~~Noncontrolling Interest~~17. Net Loss Per Common Share

~~Noncontrolling interest~~Basic net income (~~“NCI”~~loss) per common share is ~~the~~calculated ~~membership~~by ~~interest~~dividing innet ~~Purple~~income ~~LLC~~(loss) ~~held~~attributable byto ~~holders~~common ~~other~~stockholders ~~than~~by the ~~Company.~~weighted Ataverage ~~September~~number ~~30,~~of ~~2025,~~shares ~~and~~of ~~December~~Class ~~31,~~A ~~2024,~~common ~~the~~stock ~~combined~~outstanding ~~NCI~~during ~~percentage~~each inperiod. ~~Purple~~Diluted ~~LLC~~net ~~was~~income ~~0.15%.~~(loss) ~~The~~per ~~Company~~share ~~has~~reflects ~~consolidated~~ the ~~financial~~weighted-average ~~position~~number ~~and~~of ~~results~~common ofshares ~~operations~~outstanding ofduring ~~Purple~~the ~~LLC~~period ~~and~~used ~~reflected~~in the ~~proportionate~~basic ~~interest~~net ~~held~~income by(loss) ~~all~~computation ~~such~~plus ~~Purple~~the ~~LLC~~effect ~~Class~~of Bcommon ~~Unit~~stock ~~holders~~equivalents asthat are ~~NCI~~dilutive.

22The following table sets forth the calculation of basic and diluted weighted average shares outstanding and net loss per share for the periods presented (in thousands, except per share amounts):

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

	Three Months Ended March 31,
	2026			2025
Numerator:
Net loss attributable to Purple Innovation, Inc. – basic	$	(30,541	)	$	(19,137	)
Less – net loss attributed to noncontrolling interest		—			—
Net loss attributable to Purple Innovation, Inc. – diluted	$	(30,541	)	$	(19,137	)
Denominator:
Weighted average shares—basic		108,386			107,596
Add – dilutive effect of Class B shares		—			—
Weighted average shares—diluted		108,386			107,596
Net loss per common share:
Basic	$	(0.28	)	$	(0.18	)
Diluted	$	(0.28	)	$	(0.18	)

~~16. Income Taxes~~ 22

~~The Company’s~~PURPLE ~~sole material asset is Purple LLC~~INNOVATION, ~~which is treated as a partnership for U~~INC.~~S. federal income tax purposes and for purposes~~ ofNotes ~~certain state and local income taxes. Purple LLC’s net taxable income and any related tax credits are passed through~~ to ~~its members~~Condensed ~~and~~Consolidated ~~are~~Financial ~~included in the members’ tax returns, even though such net taxable income or tax credits may not have actually~~Statements been distributed. While the Company consolidates Purple LLC for financial reporting purposes, the Company will be taxed on its share of earnings of Purple LLC not attributed to the noncontrolling interest holders, which will continue to bear their share of income tax on its allocable earnings of Purple LLC. The income tax burden on the earnings taxed to the noncontrolling interest holders is not reported by the Company in its consolidated financial statements under GAAP.(unaudited)

The Company ~~reported~~excludes ~~$0.1~~from the ~~million~~diluted innet ~~various state tax expenses on a pretax~~ loss ofper ~~$48.1~~common ~~million~~share ~~for~~computation ~~the~~potentially ~~nine~~dilutive ~~months~~securities ~~ended~~related ~~September~~to 30warrants, ~~2025,~~ asequity ~~compared~~awards toand ~~various~~convertible ~~state taxes~~ shares of ~~$0.2~~Class ~~million~~B oncommon astock ~~pretax~~when ~~loss~~their ofexercise ~~$89.4~~or ~~million~~performance ~~for~~vesting ~~the~~price ~~nine~~is ~~months~~greater ~~ended~~than ~~September~~the ~~30,~~average ~~2024. This~~market ~~resulted~~price ~~in an effective tax rate~~ of ~~(0.31%) for~~ the ~~nine months ended September 30, 2025, as compared to (0.20%) for the nine months ended September 30, 2024. The~~ Company’s common ~~effective~~stock ~~tax~~or ~~rate~~they ~~for~~are ~~the~~otherwise ~~nine~~anti-dilutive. ~~months~~Potentially ~~ended~~dilutive ~~September~~securities ~~30,~~that ~~2025,~~have ~~differs~~been excluded from the ~~statutory federal~~calculation ~~rate~~ of ~~21%~~diluted net ~~primarily~~loss ~~due~~per tocommon ~~the~~share ~~impact~~are ofas ~~the~~follows ~~full~~(in ~~valuation allowance recorded against the Company’s deferred tax assets at September 30, 2025.~~thousands):

	Three Months Ended March 31,
	2026		2025
Warrants		40,787		26,230
Restricted stock units		1,506		3,397
Stock Options		500		529
Class B Shares		163		165

As noncontrolling interest holders exercise their right to exchange or cause Purple LLC to redeem all or a portion of their Class B Units, a tax receivable agreement liability may be recorded based on 80% of the estimated future cash tax savings that the Company may realize as a result of increases in the basis of the assets of Purple LLC attributed to the Company as a result of such exchange or redemption18. ~~The~~ ~~amount~~Equity ofCompensation the increase in asset basis, the related estimated cash tax savings and the attendant liability to be recorded will depend on the price of the Company’s Class A common stock at the time of the relevant redemption or exchange.Plans

~~The effects~~2017 ofEquity ~~uncertain tax positions are recognized in the consolidated financial statements if these positions meet a “more-likely-than-not”~~Incentive threshold. For those uncertain tax positions that are recognized in the consolidated financial statements, liabilities are established to reflect the portion of those positions it cannot conclude “more-likely-than-not” to be realized upon ultimate settlement. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties would be included on the related tax liability line in the consolidated balance sheet. As of September 30, 2025, the Company had unrecognized tax benefits of $1.1 million.Plan

~~On July~~The 4,Purple ~~2025~~Innovation, ~~the~~Inc. 2017 ~~One~~Equity ~~Big~~Incentive ~~Beautiful~~Plan ~~Bill Act~~ (the “~~OBBBA~~2017 Plan”) ~~was~~provides ~~enacted~~for ingrants ~~the~~of ~~U.S.~~stock ~~The~~options, ~~OBBBA~~stock ~~includes~~appreciation ~~significant provisions~~rights, ~~such~~ asrestricted ~~the~~stock units ~~permanent~~and ~~extension~~other ofstock-based ~~certain~~awards. ~~expiring~~Directors, ~~provisions~~officers ~~of the Tax Cuts~~ and ~~Jobs~~other ~~Act~~employees, ~~modifications~~as towell ~~the~~as ~~international~~others ~~tax~~performing ~~framework and~~consulting ~~the~~or ~~restoration~~advisory ~~of favorable tax treatment~~ services for ~~certain~~the ~~business~~Company ~~provisions.~~and ~~The~~its ~~legislation has multiple effective dates~~subsidiaries, ~~with~~are ~~certain provisions~~eligible ~~effective~~for ingrants ~~2025~~under ~~and~~the ~~others~~2017 ~~implemented through 2027~~Plan. ~~The~~As ~~Company~~of ~~has~~March ~~evaluated~~31, ~~the~~2026, ~~impacts~~an aggregate of ~~OBBBA~~2.7 ~~enacted~~million ~~during the quarter.~~shares ~~There~~remain ~~was~~available ~~not~~for aissuance ~~material impact to the income tax expense~~ or ~~effective~~use ~~tax~~under ~~rate for~~ the ~~quarter~~2017 ~~ended September 30, 2025~~Plan.

23Employee Stock Options

~~PURPLE INNOVATION,~~The ~~INC.~~following table summarizes the Company’s ~~Notes~~total tostock ~~Condensed~~option ~~Consolidated~~activity ~~Financial~~for ~~Statements (unaudited)~~the three months ended March 31, 2026:

17. Net Loss Per Common Share

	Options (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Intrinsic Value (in thousands)
Options outstanding as of January 1, 2025		500	$	6.82		1.3	$	—
Granted		—		—		—		—
Exercised		—		—		—		—
Forfeited		—		—		—		—
Options outstanding as of March 31, 2026		500	$	6.82		1.0	$	—

~~Basic net~~Outstanding ~~income~~and ~~(loss)~~exercisable ~~per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of Class A common~~ stock ~~outstanding~~options ~~during~~as ~~each period. Diluted net income (loss) per share reflects the weighted-average number~~ of ~~common shares outstanding during the period used in the basic net income (loss) computation plus the effect of common stock~~ ~~equivalents~~March ~~that~~31, 2026 are ~~dilutive.~~as follows:

The following table sets forth the calculation of basic and diluted weighted average shares outstanding and net loss per share for the periods presented (in thousands, except per share amounts):

		Options Outstanding			Options Exercisable
Exercise Prices		Number of Options Outstanding (in thousands)	Weighted Average Remaining Life (Years)		Number of Options Exercisable (in thousands)	Weighted Average Remaining Life (Years)		Intrinsic Value (in thousands)
$	6.82	500		1.0	500		1.0	$	—

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Numerator:
Net loss attributable to Purple Innovation, Inc. – basic	$	(11,720	)	$	(39,228	)	$	(48,202	)	$	(89,418	)
Add – net loss attributed to noncontrolling interest		(28	)		—			(83	)		—
Net income (loss) attributable to Purple Innovation, Inc. – diluted	$	(11,748	)	$	(39,228	)	$	(48,285	)	$	(89,418	)
Denominator:
Weighted average shares—basic		108,245			107,508			108,026			107,008
Add – dilutive effect of Class B common stock		164			—			165			—
Add – dilutive effect of equity securities		—			—			—			—
Weighted average shares—diluted		108,409			107,508			108,191			107,008
Net loss per common share:
Basic	$	(0.11	)	$	(0.36	)	$	(0.45	)	$	(0.84	)
Diluted	$	(0.11	)	$	(0.36	)	$	(0.45	)	$	(0.84	)

~~The Company~~PURPLE ~~excludes from the diluted net loss per common share computation potentially dilutive securities related to warrants~~INNOVATION, equity awards and convertible shares of Class B common stock when their exercise or performance vesting price is greater than the average market price of the Company’s common stock or they are otherwise anti-dilutiveINC. ~~Potentially dilutive securities that have been excluded from~~ ~~the~~Notes ~~calculation~~to ofCondensed ~~diluted~~Consolidated ~~net~~Financial ~~loss per common share are as follows~~ Statements (~~in thousands~~unaudited):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Warrants		40,787		20,000		40,787		20,000
Restricted stock units		3,141		2,253		3,165		2,432
Stock options		500		554		500		554
Class B common stock		—		200		—		203

The estimated fair value of Company stock options is amortized over the options vesting period on a straight-line basis. All outstanding stock options were vested as of January 1, 2026 and there was no remaining unrecognized stock compensation cost. There was no stock option expense for the three months ended March 31, 2026 and was de minimis for the three months ended March 31, 2025.

~~18.~~Employee Restricted ~~Equity~~Stock ~~Compensation Plans~~Units

~~2017~~The following table summarizes ~~Equity~~the ~~Incentive~~Company’s ~~Plan~~restricted stock unit activity for the three months ended March 31, 2026:

The Purple Innovation, Inc. 2017 Equity Incentive Plan (the “2017 Plan”) provides for grants of stock options, stock appreciation rights, restricted stock units and other stock-based awards. Directors, officers and other employees, as well as others performing consulting or advisory services for the Company and its subsidiaries, are eligible for grants under the 2017 Plan. As of September 30, 2025, an aggregate of 1.8 million shares remain available for issuance or use under the 2017 Plan.

	Number Outstanding (in thousands)			Weighted Average Grant Date Fair Value
Nonvested restricted stock units as of January 1, 2026		3,141		$	1.25
Granted		—			—
Vested		(707	)		1.39
Forfeited		(928	)		1.87
Nonvested restricted stock units as of March 31, 2026		1,506		$	0.80

24The Company recorded restricted stock unit expense of $0.2 million and $0.4 million during the three months ended March 31, 2026 and 2025, respectively.

~~PURPLE~~For restricted stock units ~~INNOVATION~~outstanding as of March 31, ~~INC~~2026, there were $0. ~~Notes~~8 tomillion ~~Condensed~~of ~~Consolidated~~total ~~Financial~~unrecognized ~~Statements~~stock compensation costs with a remaining recognition ~~(unaudited)~~period of 1.5 years.

~~Employee Stock Options~~24

~~The following~~PURPLE ~~table~~INNOVATION, ~~summarizes~~INC. Notes ~~the~~to ~~Company’s~~Condensed ~~total~~Consolidated ~~stock~~Financial ~~option activity for the nine months ended September 30, 2025:~~Statements (unaudited)

	Options (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Intrinsic Value (in thousands)
Options outstanding as of January 1, 2025		529		$	7.17		2.2	$	—
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited		(29	)		13.12		—		—
Options outstanding as of September 30, 2025		500		$	6.82		1.5	$	—

Aggregate Non-Cash Stock-Based Compensation

~~Outstanding~~The Company has accounted ~~and~~for ~~exercisable~~all stock-based ~~options~~compensation asunder the provisions of ~~September~~ASC ~~30,~~718 ~~2025,~~Compensation—Stock ~~are~~Compensation. asThis ~~follows:~~standard requires the Company to record a non-cash expense associated with the fair value of stock-based compensation over the requisite service period.

		Options Outstanding			Options Exercisable
Exercise Prices		Number of Options Outstanding (in thousands)	Weighted Average Remaining Life (Years)		Number of Options Exercisable (in thousands)	Weighted Average Remaining Life (Years)		Intrinsic Value (in thousands)
$	6.82	500		1.5	500		1.5	$	—

The following table summarizes the aggregate non-cash stock-based compensation recognized in the statement of operations for stock awards, employee stock options and employee restricted stock units (in thousands):

The estimated fair value of Company stock options is amortized over the options vesting period on a straight-line basis. Stock option expense was de minimis for the three and nine months ended September 30, 2025, and 2024.

	Three Months Ended March 31,
	2026			2025
Cost of revenues	$	(16	)	$	103
Marketing and sales		8			(176	)
General and administrative		162			363
Research and development		2			78
Total non-cash stock-based compensation	$	156		$	368

~~As of September 30, 2025, all outstanding stock options have been expensed and there is no remaining amount of unrecognized stock compensation cost~~19. ~~There~~Employee ~~were~~Retirement ~~no stock options that vested during the nine months ended September 30, 2025.~~Plan

~~Employee~~In July 2018, the Company ~~Restricted~~established ~~Stock~~a ~~Units~~401(k) plan that qualifies as a deferred compensation arrangement under Section 401 of the IRS Code. All eligible employees over the age of 18 and with 4 months’ service are eligible to participate in the plan. The plan provides for the Company to match employee contributions up to 5% of eligible earnings. Company contributions immediately vest. The Company’s matching contribution expense was $0.8 million and $1.1 million for the three months ended March 31, 2026 and 2025, respectively.

~~During the nine months ended September 30, 2025, the Company granted 1~~20.2 ~~million~~Segment ~~restricted~~Information ~~stock~~and units under the 2017 Plan to certain members of the Company’s management team. The restricted stock awards had a grant date fair value of $0.8 million or $0.66 per share. The estimated fair value of these awards is recognized on a straight-line basis over the vesting period.Concentrations

The Company designs and manufactures ~~following~~a ~~table~~variety ~~summarizes~~of innovative, branded and premium comfort products, including mattresses, pillows, cushions, bases, sheets, and other products. The Company has one reportable segment that operates an omni-channel distribution strategy which allows the Company to offer a seamless shopping experience to its customers across multiple sales channels. The Company’s one ~~restricted~~segment ~~stock~~markets ~~unit~~and ~~activity~~sells ~~for~~products ~~the~~through ~~nine~~its ~~months~~direct-to-consumer ~~ended~~e-commerce ~~September~~channels, 30retail brick-and-mortar wholesale partners, Purple ~~2025:~~showrooms, and third-party online retailers.

	Number Outstanding (in thousands)			Weighted Average Grant Date Fair Value
Nonvested restricted stock units as of January 1, 2025		3,808		$	1.91
Granted		1,150			0.66
Vested		(919	)		2.22
Forfeited		(898	)		2.30
Nonvested restricted stock units as of September 30, 2025		3,141		$	1.25

The accounting policies for the Company’s one segment are the same as those described in Note 2 – Summary of Significant Accounting Policies. The CODM assesses performance for the segment and decides how to allocate resources based on consolidated net income or loss as reported in the consolidated statement of operations. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The Company does not have intra-entity sales or transfers.

The CODM uses consolidated ~~Company~~net ~~recorded~~loss ~~restricted~~to ~~stock~~evaluate ~~unit~~earnings ~~expense~~generated offrom ~~$0.4~~segment ~~million~~assets ~~and~~(return ~~$1.3~~on ~~million~~assets) ~~during~~in ~~the~~deciding ~~three~~whether ~~and~~to ~~nine~~reinvest ~~months~~profits ~~ended~~into ~~September~~its ~~30,~~single ~~2025,~~reportable ~~respectively~~segment or into other parts of the entity, ~~and~~such $0as for acquisitions.8 ~~million~~Consolidated ~~and~~net $2loss is also used to monitor budget versus actual results.1 ~~million~~The ~~during~~monitoring ~~the~~of ~~three~~budgeted ~~and~~versus ~~nine~~actual ~~months~~results ~~ended~~are ~~September~~used ~~30,~~in ~~2024,~~assessing ~~respectively~~the segment’s performance and in establishing management’s compensation.

~~For restricted stock units outstanding as of September 30, 2025, there were $1.8 million of total unrecognized stock compensation costs with a remaining recognition period of 1.5 years.~~25

25PURPLE INNOVATION, INC. Notes to Condensed Consolidated Financial Statements (unaudited)

~~PURPLE~~The following table summarizes segment revenue, ~~INNOVATION~~significant segment expenses, ~~INC. Notes~~other tosegment ~~Condensed~~items ~~Consolidated~~and ~~Financial~~segment ~~Statements~~ profit or loss (~~unaudited~~in thousands):

Aggregate Non-Cash Stock-Based Compensation

	Three Months Ended March 31,
	2026			2025
Revenues, net	$	95,730		$	104,171
Reductions (additions):
Cost of revenues		60,535			62,207
Cost of revenues – restructuring related charges		—			918
Advertising expense		11,342			14,602
Marketing sales expense		5,132			7,187
Wholesale marketing and sales expense		4,932			4,323
Showrooms marketing and sales expense		10,151			10,514
General and administrative expense		18,033			14,487
Research and development expense		2,448			2,452
Restructuring, impairment and other related charges		—			1,960
Other segment items, net ⁽¹⁾		13,686			4,646
Income tax expense		47			41
Net loss attributable to noncontrolling interest		(35	)		(29	)
Net reductions		126,271			123,308
Segment net loss	$	(30,541	)	$	(19,137	)

~~The Company~~(1) ~~has~~Other ~~accounted~~segment ~~for~~items, ~~all~~net ~~stock-based~~include ~~compensation~~interest ~~under~~expense, ~~the~~other ~~provisions~~(income) ofexpense, ~~ASC~~net, ~~718~~loss ~~Compensation—Stock~~on ~~Compensation. This~~extinguishment ~~standard~~of ~~requires~~debt, ~~the~~and ~~Company~~change toin ~~record a non-cash expense associated with the~~ fair value of ~~stock-based~~warrant ~~compensation over the requisite service period~~liabilities.

The Company classifies products ~~following~~into ~~table~~two ~~summarizes~~major ~~the~~categories: ~~aggregate~~sleep ~~non-cash~~products ~~stock-based~~and ~~compensation~~other. ~~recognized~~Sleep inproducts ~~the~~include ~~statement~~mattresses, ofplatforms, ~~operations~~adjustable ~~for~~bases, ~~stock~~mattress ~~awards~~protectors, ~~employee~~pillows ~~stock~~and ~~options~~sheets. Other products include cushions and ~~employee~~various ~~restricted~~other ~~stock~~products. ~~units~~In ~~(in~~the ~~thousands):~~three months ended March 31, 2026 and 2025 sales of other products accounted for less than 3.0% of net revenues.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025			2024
Cost of revenues	$	77	$	104	$	279		$	294
Marketing and sales		65		167		(44	)		391
General and administrative		225		440		834			1,195
Research and development		53		80		196			228
Total non-cash stock-based compensation	$	420	$	791	$	1,265		$	2,108

The Company defines international revenues as sales to customers located outside of the United States. In the three months ended March 31, 2026 and 2025 international customers accounted for less than 1.0% of net revenues.

19The Company had one individual customer that accounted for approximately 40.8% and 36.0% of accounts receivable at March 31, 2026 and 2025, respectively, and approximately ~~Employee~~8.3% ~~Retirement~~and ~~Plan~~11.9% of net revenue during the three months ended March 31, 2026 and 2025, respectively.

~~In July~~The ~~2018,~~Company ~~the~~currently ~~Company~~obtains materials ~~established~~and acomponents ~~401(k)~~used ~~plan~~in ~~that~~production ~~qualifies~~from asoutside asources. ~~deferred~~As ~~compensation~~a ~~arrangement~~result, ~~under~~the ~~Section 401~~Company ofis ~~the IRS~~dependent ~~Code.~~upon ~~All~~suppliers ~~eligible~~that ~~employees~~in ~~over~~some instances, are the ~~age~~sole source of 18supply. ~~and~~The ~~with~~Company 4is ~~months’~~continuing ~~service~~efforts ~~are eligible~~ to ~~participate~~dual-source inkey ~~the plan~~components. The ~~plan provides~~failure ~~for~~of one or more of the Company’s suppliers to ~~match~~provide ~~employee~~materials ~~contributions~~or upcomponents ~~to 5% of~~on ~~eligible~~a ~~earnings.~~timely ~~Company~~basis ~~contributions~~could ~~immediately~~significantly ~~vest~~impact the results of operations. The Company’s ~~matching~~believes that ~~contribution~~it ~~expense~~can ~~was $0.7~~obtain ~~million~~these raw materials and ~~$2.6~~components ~~million~~from ~~for~~other sources of supply in the ~~three~~ordinary ~~and~~course ~~nine~~of ~~months~~business, ~~ended September~~although an unexpected ~~30,~~loss ~~2025,~~of ~~respectively,~~supply ~~and~~over ~~$1.1~~a ~~million~~short ~~and~~period ~~$3.2~~of ~~million~~time may not allow for the ~~three~~replacement ~~and~~of ~~nine~~these ~~months~~sources ~~ended September~~in ~~30,~~the ~~2024,~~ordinary ~~respectively~~course of business.

20The Company maintains its cash balances in financial institutions based in the United States that are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 for each financial institution per entity. At times, the Company’s cash balance deposited at financial institutions ~~Segment~~exceed ~~Information~~the federally insured deposit limits. The Company has not experienced any losses in such accounts and ~~Concentrations~~believes it is not exposed to any significant credit risk related to these deposits.

The Company designs and manufactures a variety of innovative, branded and premium comfort products, including mattresses, pillows, cushions, bases, sheets, and other products. The Company has one reportable segment that operates an omni-channel distribution strategy which allows the Company to offer a seamless shopping experience to its customers across multiple sales channels. The Company’s one segment markets and sells products through its direct-to-consumer e-commerce channels, retail brick-and-mortar wholesale partners, Purple showrooms, and third-party online retailers.26

~~The accounting~~ITEM ~~policies for the Company’s one segment are the same as those described in Note~~ 2 ~~– Summary of Significant Accounting Policies~~. ~~The~~MANAGEMENT’S ~~CODM~~DISCUSSION ~~assesses~~AND ~~performance~~ANALYSIS ~~for~~OF ~~the~~FINANCIAL ~~segment~~CONDITION ~~and~~AND ~~decides~~RESULTS ~~how~~OF to allocate resources based on consolidated net income or loss as reported in the consolidated statement of operations. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The Company does not have intra-entity sales or transfers.OPERATIONS

The ~~CODM~~ ~~uses~~following ~~consolidated~~discussion ~~net~~is intended ~~income~~to ~~(loss)~~provide toa ~~evaluate~~review ~~earnings~~of ~~generated~~the ~~from~~operating ~~segment~~results ~~assets~~and ~~(return~~financial oncondition ~~assets)~~of inPurple ~~deciding~~Innovation, ~~whether~~Inc. ~~to reinvest~~The ~~profits~~discussion ~~into~~should ~~its~~be ~~single~~read in ~~reportable~~conjunction ~~segment~~with orthe ~~into~~unaudited ~~other~~condensed ~~parts~~consolidated offinancial statements and the ~~entity,~~notes ~~such~~thereto asincluded ~~for~~in ~~acquisitions~~“Part I. ~~Consolidated~~Item ~~net income~~1. ~~(loss)~~Financial isStatements.” ~~also~~Capitalized terms used toin ~~monitor~~this ~~budget~~“Part ~~versus~~I. ~~actual~~Item ~~results~~2. ~~The~~Management’s ~~monitoring~~Discussion and Analysis of ~~budgeted~~Financial Condition ~~versus~~and ~~actual~~Results ~~results~~of ~~are~~Operations ~~used~~and innot ~~assessing~~otherwise defined shall have the ~~segment’s~~ ~~performance~~meanings ~~and~~set forth in ~~establishing~~“Part ~~management’s~~I. ~~compensation~~Item. 1 Financial Statements.”

26FORWARD-LOOKING STATEMENTS

~~PURPLE~~This quarterly report on Form ~~INNOVATION~~10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act, and ~~INC~~Section 21E of the Securities Exchange Act of 1934, as amended (“the “Exchange Act”), that represent our current expectations and beliefs. All statements other than statements of historical fact are “forward-looking statements” for purposes ~~Notes~~of tofederal ~~Condensed~~and ~~Consolidated~~state ~~Financial~~securities ~~Statements~~laws. In some cases, you can identify these statements by forward-looking words such as “believe,” ~~(unaudited)~~“expect,” “project,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,” “would,” “could,” “may,” “might,” the negative of these words and other similar words.

~~The~~All forward-looking statements ~~following~~included ~~table~~in ~~summarizes~~this ~~segment~~Quarterly ~~revenue~~Report are made only as of the date hereof. It is routine for our internal projections and expectations to change throughout the year, ~~significant~~and ~~segment~~any ~~expenses~~forward-looking statements based upon these projections or expectations may change prior to the end of the next quarter or year. In addition, ~~other~~any ~~segment~~statements ~~items~~that refer to projections of our future financial performance, our anticipated growth and ~~segment~~trends ~~profit~~in orour ~~loss~~businesses (inincluding ~~thousands~~the discussion under the heading “Outlook for Growth”):, and other characterizations of future events or circumstances are forward-looking statements.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenues, net	$	118,766		$	118,598		$	328,037		$	358,902
Reductions (additions):
Cost of revenues		67,915			70,546			197,462			220,190
Cost of revenues – restructuring related charges		—			12,859			995			12,859
Advertising expense		16,904			16,297			39,178			45,026
Marketing sales expense		7,089			8,491			20,757			26,484
Wholesale marketing and sales expense		5,484			5,059			14,787			15,939
Showrooms marketing and sales expense		10,643			13,092			32,640			38,329
General and administrative expense		15,200			17,266			44,678			55,111
Research and development expense		2,367			2,920			6,997			10,572
Restructuring, impairment and other related charges		5,290			18,881			11,387			18,881
Other segment items, net (d)		(431	)		(7,566	)		7,293			4,922
Income tax expense		53			63			148			176
Net loss attributable to noncontrolling interest		(28	)		(82	)		(83	)		(169	)
Net reductions		130,486			157,826			376,239			448,320
Segment net loss	$	(11,720	)	$	(39,228	)	$	(48,202	)	$	(89,418	)

We caution and advise readers that these statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict, including those included in the “Risk Factors” section of this Quarterly Report and in our Annual Report on Form 10-K filed with the SEC on March 31, 2026. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements and investors are cautioned not to place undue reliance on any such statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

~~(d)~~Overview ~~Other segment items, net include interest expense, other (income) expense, net, and change in fair value~~ of ~~warrant~~Our ~~liabilities.~~Business

~~The Company~~Our ~~classifies~~mission ~~products~~is ~~into~~to ~~two major categories: sleep products and other. Sleep products include mattresses, platforms, adjustable~~deliver ~~bases, mattress protectors, pillows and sheets. Other products include cushions and various other products. In~~ the ~~three~~greatest ~~and~~sleep ~~nine~~ever ~~months ended September 30, 2025, and 2024 sales of other products accounted for approximately 3~~invented.~~0% of net revenues.~~

~~The~~We began as a digitally-native ~~Company~~vertical ~~defines~~brand ~~international~~founded ~~revenues~~on comfort product innovation with premium offerings, and have since expanded into brick & mortar stores as a ~~sales~~true toomni-channel ~~customers~~brand. ~~located~~We ~~outside~~offer a variety of ~~the~~innovative, ~~United~~branded ~~States~~and premium comfort products, including mattresses, pillows, cushions, bases, sheets and more. InOur products are the ~~three~~result of decades of innovation and ~~nine~~investment ~~months~~in ~~ended~~proprietary and patented comfort technologies ~~September~~and 30the development of our own manufacturing processes. Our proprietary Hyper-Elastic Polymer gel technology underpins many of our comfort products and provides a range of benefits that differentiate our products from our competitors. Specially engineered to relieve pressure, maintain ~~2025~~an ideal body temperature, and ~~2024~~provide ~~international~~instantly ~~customers~~adaptive ~~accounted~~support, Purple’s patented technology has been tested rigorously within medical and consumer applications for ~~less~~over ~~than 1~~30 years.0% ofOriginally ~~net~~designed ~~revenues~~for use in hospital beds and wheelchairs, we adapted this unique pressure-relieving material for our mattresses, pillows and other cushion products.

~~The Company~~We ~~had~~market ~~one individual customer that accounted for approximately 17.1%~~ and ~~29.4%~~sell ofour ~~accounts receivable at September 30, 2025 and~~products ~~December~~via ~~31,~~our ~~2024,~~direct-to-consumer ~~respectively~~channel, ~~and~~which ~~approximately~~includes 17Purple.3%com ~~and~~(our ~~14.8%~~direct-to-consumer ofe-commerce), ~~net~~Purple ~~revenue~~showrooms, ~~during~~our ~~the~~customer ~~three~~contact center and ~~nine~~online ~~months~~marketplaces ~~ended~~(collectively ~~September 30~~“DTC”), ~~2025,~~ ~~respectively,~~ and ~~approximately~~our ~~13.0%~~wholesale ~~and~~channel ~~13.9%~~through ofretail ~~net~~brick-and-mortar ~~revenue during the three~~ and ~~nine~~online wholesale ~~months ended September 30, 2024, respectively~~partners.

The Company currently obtains materials and components used in production from outside sources. As a result, the Company is dependent upon suppliers that in some instances, are the sole source of supply. The Company is continuing efforts to dual-source key components. The failure of one or more of the Company’s suppliers to provide materials or components on a timely basis could significantly impact the results of operations. The Company believes that it can obtain these raw materials and components from other sources of supply in the ordinary course of business, although an unexpected loss of supply over a short period of time may not allow for the replacement of these sources in the ordinary course of business.Organization

~~The Company~~Our ~~maintains~~business ~~its~~consists ~~cash~~of ~~balances~~Purple Inc. inand ~~financial~~its ~~institutions~~consolidated ~~based~~subsidiary, inPurple ~~the~~LLC. ~~United~~As ~~States~~the ~~that~~sole ~~are~~managing ~~insured~~member byof ~~the~~Purple ~~Federal~~LLC, ~~Deposit~~Purple ~~Insurance Corporation~~Inc., ~~(FDIC)~~through upits toofficers ~~$250~~and directors,~~000~~ is responsible for ~~each~~all ~~financial~~operational ~~institution~~and ~~per~~administrative ~~entity.~~decision Atmaking ~~times,~~and ~~the~~control ~~Company’s~~of ~~cash~~the ~~balance~~day-to-day ~~deposited~~business ~~at financial~~affairs ~~institutions~~of ~~exceed~~Purple LLC without the ~~federally~~approval ~~insured~~of ~~deposit~~any ~~limits~~other member. ~~The~~At ~~Company~~March ~~has~~31, ~~not~~2026, ~~experienced~~Purple ~~any~~Inc. ~~losses~~had ina ~~such~~99.85% ~~accounts~~economic ~~and~~ownership ~~believes it~~interest isin ~~not~~Purple ~~exposed~~LLC towhile ~~any~~Class ~~significant~~B unit ~~credit~~holders ~~risk~~had ~~related~~the toremaining ~~these deposits~~0.15%.

27Recent Developments in Our Business

~~ITEM 2.~~Operational ~~MANAGEMENT’S~~Developments ~~DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~The following~~We ~~discussion~~entered is2026 ~~intended~~building on tothe ~~provide~~progress awe ~~review~~made ofin the ~~operating~~fourth ~~results~~quarter, and ~~financial~~our ~~condition~~first ofquarter ~~Purple~~reflects ~~Innovation~~continued progress and greater consistency across our channels. Trends were solid during the quarter, ~~Inc~~with growth in our showroom and wholesale channels. The E-commerce channel also ~~discussion~~improved ~~should~~sequentially bedeclining ~~read~~10% in ~~conjunction~~the ~~with~~first ~~the~~quarter ~~unaudited~~year ~~condensed~~over ~~consolidated~~year ~~financial~~compared ~~statements~~to ~~and~~down 15% in the ~~notes~~prior ~~thereto~~period ~~included~~year over year, inreflecting ~~“Part~~more I.disciplined ~~Item~~marketing 1.execution ~~Financial~~and ~~Statements~~early signs of improved conversion.” ~~Capitalized~~Importantly, ~~terms~~we ~~used~~continue to see the benefits of actions taken last year reflected in ~~this~~our ~~“Part~~operating Iexpense performance. ~~Item~~This 2.progress ~~Management’s~~is ~~Discussion and~~a ~~Analysis~~direct result of ~~Financial~~the ~~Condition~~changes ~~and~~we’ve ~~Results~~made ofto ~~Operations”~~the ~~and~~business, not ~~otherwise~~a ~~defined~~recovery ~~shall~~of ~~have~~ the ~~meanings~~broader ~~set~~market, reinforcing ~~forth~~the indurability ~~“Part I.~~of ~~Item.~~the 1model ~~Financial~~we’ve ~~Statements~~been building.”

~~FORWARD-LOOKING STATEMENTS~~27

~~This quarterly~~Impact ~~report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning~~ of ~~Section 27A~~Revenue ofPresentation the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (“the “Exchange Act”), that represent our current expectations and beliefs. All statements other than statements of historical fact are “forward-looking statements” for ~~purposes of federal and state securities laws. In some cases, you can identify these statements by forward-looking~~Certain ~~words~~Product such as “believe,” “expect,” “project,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,” “would,” “could,” “may,” “might,” the negative of these words and other similar words.Arrangements

~~All forward-looking~~Revenue ~~statements~~for ~~included~~certain inproduct arrangements ~~this~~is ~~Quarterly~~presented ~~Report~~differently ~~are~~depending ~~made~~on ~~only~~the asnature of the ~~date~~underlying ~~hereof.~~manufacturing Itrelationships isand ~~routine~~the ~~for~~application ~~our~~of ~~internal projections~~ASC ~~and~~606—Revenue ~~expectations~~from toContracts ~~change~~with ~~throughout~~Customers. Under the ~~year~~guidance, ~~and~~payments ~~any~~to ~~forward~~third-~~looking~~party ~~statements~~manufacturers, ~~based~~including ~~upon~~manufacturers under ~~these~~common ~~projections~~control with certain customers, are evaluated to determine whether they are economically linked to an underlying customer arrangement. For certain customer-specific or ~~expectations~~exclusive ~~may~~product ~~change~~programs where the manufacturer is under common control with the customer, ~~prior~~the Company has concluded that payments to the ~~end~~manufacturer ofare economically linked to the ~~next~~customer ~~quarter~~relationship orand ~~year~~therefore represent consideration payable to a customer. InAs ~~addition~~a result, ~~any~~these ~~statements~~payments ~~that~~are ~~refer~~recorded toas ~~projections~~a reduction of ~~our~~revenue, ~~future~~and ~~financial~~revenue ~~performance,~~is presented on a ~~our~~net ~~anticipated~~basis. ~~growth~~The ~~and~~Company ~~trends~~recorded $4.9 million in ~~our~~consideration ~~businesses~~paid ~~(including~~as ~~the~~a ~~discussion~~reduction ~~under~~of revenue in the ~~heading~~unaudited ~~“Outlook~~condensed consolidated statement of operations for ~~Growth”)~~the three months ended March 31, ~~and~~2026. This presentation results in reported revenue being lower than the gross amount ~~other~~billed ~~characterizations~~to the customer. While the net presentation affects reported revenue, it does not impact gross profit dollars for these arrangements. The distinction reflects the application of ~~future~~GAAP ~~events~~to ordifferent ~~circumstances~~fact ~~are~~patterns ~~forward-looking~~rather ~~statements~~than a difference in the underlying economics of the transactions.

~~We caution~~Debt and advise readers that these statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict, including those included in the “Risk Factors” section of this Quarterly Report and in our Annual Report on Form 10-K filed with the SEC on March 14, 2025, and our Quarterly Reports on Form 10-Q filed with the SEC on May 6, 2025, and July 30, 2025. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements and investors are cautioned not to place undue reliance on any such statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.Financings

~~Overview~~On March 24, 2026, the Loan Parties entered into the Third Amendment with the Lenders, which revised the maturity date under the Amended A&R Credit Agreement from December 31, 2026, to April 30, 2027 and waived certain requirements and events of ~~Our~~default ~~Business~~relating to the going concern qualification in our December 31, 2025 financial statements. In connection with the Third Amendment, the Loan Parties agreed to pay to the Lenders an amendment fee in the aggregate amount of $1.6 million, equal to 1.25% pro rata based on each Lender’s outstanding principal amount (the “Amendment Fee”). Of the Amendment Fee, approximately $1.3 million is payable-in-kind by adding such amount to the 2025 Lenders’ outstanding principal amount. The remaining $0.3 million of the Amendment Fee was paid in cash to the other lenders. In connection with the Third Amendment, the Loan Parties also agreed to reimburse the 2025 Lenders for certain expenses in the amount of $0.3 million.

~~Our mission~~Review isof toStrategic ~~deliver~~Alternatives ~~the greatest sleep ever invented.~~

We ~~began~~ ashave aengaged ~~digitally-native vertical brand founded on comfort product innovation~~ with ~~premium offerings, and have since expanded into~~multiple ~~brick~~parties &about ~~mortar stores as~~ a ~~true~~broad ~~omni-channel~~range ~~brand.~~of Weopportunities ~~offer~~to amaximize ~~variety~~shareholder ofvalue, ~~innovative~~including, ~~branded~~but ~~and~~not ~~premium~~limited ~~comfort products~~to, ~~including mattresses,~~a ~~pillows~~merger, ~~cushions,~~sale ~~bases,~~or ~~sheets~~other ~~and~~strategic or ~~more~~financial transaction. ~~Our~~The ~~products~~Board ~~are~~has ~~the~~formed ~~result~~a ofspecial ~~decades~~committee of ~~innovation~~independent ~~and~~directors ~~investment in proprietary~~ and ~~patented~~we ~~comfort~~have ~~technologies~~engaged ~~and~~a ~~the~~financial ~~development~~advisor ~~of our own manufacturing processes. Our proprietary Hyper-Elastic Polymer gel technology~~to ~~underpins~~support ~~many~~them ofin ~~our~~evaluating ~~comfort products and provides~~ a range of ~~benefits~~options ~~that~~and ~~differentiate~~exploring ~~our~~other ~~products~~potential ~~from~~strategic ~~our competitors~~alternatives. ~~Specially engineered~~If towe ~~relieve~~are ~~pressure,~~unsuccessful ~~maintain~~in anengaging in ~~ideal~~a ~~body~~favorable ~~temperature,~~strategic ~~and provide instantly adaptive support~~alternative, ~~Purple’s~~then ~~patented~~our ~~technology has~~ability ~~been~~to ~~tested~~grow ~~rigorously~~our ~~within~~business ~~medical~~ and ~~consumer~~compete ~~applications~~with ~~for over 30 years. Originally designed for use in hospital beds and wheelchairs~~larger, weincluding ~~adapted this unique pressure-relieving material for our mattresses~~combined, ~~pillows~~competitors ~~and~~may be ~~other~~adversely ~~cushion products~~affected.

~~We market~~Impact ~~and~~of ~~sell~~United ~~our~~States ~~products~~Tariff via our direct-to-consumer channel, which includes Purple.com (our direct-to-consumer e-commerce), Purple showrooms, our customer contact center and online marketplaces (collectively “DTC”), and our wholesale channel through retail brick-and-mortar and online wholesale partners.Policy

28We continue to actively manage the impact of recent United States tariff policies. Importantly, all of our mattresses are manufactured in the United States, and about 15% of our cost of goods is tied to products sourced from overseas. This limited exposure is primarily concentrated in the textile side of the business, which includes sheets and mattress covers, but also includes the import of bases and foundations. Tariffs impacted us by approximately $1.0 million during the three months ended March 31, 2026 due to our mitigation efforts which have reduced the overall impact to our initial expectations. The tariff landscape remains fluid, and we are actively evaluating sourcing alternatives and pricing strategies on a case-by-case basis. We believe that our vertically integrated model and strong vendor relationships give us the flexibility to remain agile and responsive to changes in tariff policies, and we believe that we will be able to partially mitigate these impacts through a combination of supply chain repositioning, vendor collaborations, and selective pricing actions. On March 6, 2026, we filed a lawsuit in the U.S. Court of International Trade against the U.S. Customs and Border Protection (“CBP”), the CBP commissioner, and the United States of America seeking a full refund of the $5.3 million in tariffs imposed under the International Emergency Economic Powers Act that the Company has paid to the United States (See Note 13 – Commitments and Contingencies, Legal Proceedings).

~~Organization~~Executive Summary – Results of Operations

~~Our~~Net revenues decreased $8.4 ~~business~~million, ~~consists~~or of8.1%, ~~Purple~~to ~~Inc~~$95.7 ~~and~~million ~~its~~for ~~consolidated~~the ~~subsidiary~~three months ended March 31, ~~Purple~~2026 ~~LLC~~compared to $104.2 Asmillion for the ~~sole~~three ~~managing~~months ~~member~~ended ofMarch 31, ~~Purple~~2025. ~~LLC~~The drop in revenue was primarily due to a decrease in e-commerce sales and recognized wholesale revenue. From a sales channel perspective, ~~Purple~~e-commerce ~~Inc~~net revenues decreased $4.8 million, ~~through~~ ~~its~~or ~~officers~~10.6%, wholesale net revenues decreased $4.5 million or 11.0% and ~~directors~~showroom net revenues increased $0.9 million, isor ~~responsible~~4.8%. ~~for~~The ~~all~~decrease ~~operational~~in ~~and~~wholesale ~~administrative~~revenue ~~decision~~was ~~making~~due ~~and~~mainly ~~control~~to of$4.9 ~~the~~million ~~day-~~in payments to~~-day~~ a manufacturer ~~business~~that ~~affairs~~is ofunder ~~Purple~~common ~~LLC~~control ~~without~~with ~~the~~a ~~approval~~customer ofand ~~any~~represents ~~other~~consideration ~~member.~~paid Atto ~~September~~a ~~30,~~customer. ~~2025~~Accordingly, ~~Purple~~these ~~Inc~~payments are recorded as a reduction in revenue. ~~had~~The decreases were partially offset by our showroom net revenue increase of $0.9 million or 4.8%. The increase in our showrooms channel represents a 997.850% ~~economic~~year-over-year ~~ownership~~increase for all stores that have been open for 13 or more months. This is the ~~interest~~third consecutive quarter of year-over-year growth in ~~Purple~~the ~~LLC~~showrooms ~~while~~channel, ~~Class~~driven Bby ~~unit~~increased ~~holders~~order ~~had~~values ~~the~~through ~~remaining~~effective 0upselling and product bundling.~~15%.~~

~~Recent Developments in Our Business~~28

~~Operational~~Gross profit decreased ~~Developments~~$5.9 million, or 14.3%, to $35.2 million for the three months ended March 31, 2026 compared to $41.0 million for the three months ended March 31, 2025. Our gross profit percentage decreased to 36.8% of net revenues in the first quarter of 2026 from 39.4% in the first quarter of 2025 due to our strategic investment in Purple Royale floor models to support the Mattress Firm rollout, as well as modest manufacturing overhead deleverage driven by lower production volumes and less favorable absorption of fixed costs.

~~Our third~~Operating ~~quarter~~expenses ~~2025~~decreased ~~revenue~~$3.5 ~~increased slightly compared to last year~~million, ~~reflecting~~or ~~the continued execution of our strategic priorities~~6. ~~Wholesale~~3% ~~revenue~~to ~~grew 7~~$52.9%0 ~~during~~million for the ~~quarter~~three asmonths ~~our~~ended ~~Mattress~~March ~~Firm expansion continues~~31, ~~showroom~~2026 ~~revenue~~compared ~~increased~~to 6$55.5% asmillion wefor ~~continue to catch up from~~ the ~~second~~three ~~quarter~~months ~~backlog~~ended ~~and~~March ~~e-commerce~~31, ~~was down 9~~2025.8% asThis wedecrease ~~continue~~was todriven by ~~evolve~~a ~~our~~$3.3 ~~website~~million ~~experience.~~decrease ~~Gross~~in ~~profits were~~advertising upspending, toa 42$2.8% ~~mainly~~million todecrease ~~the reduction~~ in ~~our~~employee ~~restructuring~~related ~~costs~~expenses ~~over~~and ~~last year as we have now completed that plan~~$2.0 Wemillion ~~also~~decrease ~~have realized~~in ~~the~~restructuring ~~benefits~~related ~~of the continued improvement in lowering material~~ costs from ~~ongoing~~last ~~sourcing~~year, ~~initiatives~~partially ~~and~~offset ~~the~~by ~~recent actions to reduce our cost of warranty returns~~$4.6 ~~Operating~~million ~~expenses~~in ~~continue~~strategic toalternative ~~decline as we have improved advertising efficiency, implemented numerous cost reduction efforts~~ and ~~closely~~other ~~managed our expenses with disciplined cost controls~~costs.

~~On May~~Total 2,other ~~2025~~expense, wenet ~~entered~~increased ~~into~~$9.0 ~~the~~million, ~~Second~~or ~~Amendment~~194.6% to ~~Master Retailer Agreement with Mattress Firm, a business unit of SGI, which provides~~$13.7 ~~that~~million ~~SGI,~~for ~~through~~the ~~its~~three ~~Mattress~~months ~~Firm~~ended ~~stores,~~March ~~will expand its inventory of our products across its national store network from approximately 5~~31,~~000~~ ~~mattress~~2026 ~~slots~~compared to ~~a minimum of 12,000 mattress slots~~$4.6 ~~This~~million ~~rollout~~for isthe ~~progressing~~three ~~well,~~months ~~with~~ended ~~Purple~~March ~~products now being represented in Mattress Firm’s full store network~~31, ~~representing~~2025. ~~approximately~~The ~~9,200~~other ~~slots today~~expense, net ~~keeping~~in ~~us on pace for~~ the ~~minimum~~first ~~12,000 slots~~quarter inof 2026. ~~This~~consists ~~expansion~~of ~~represents~~interest ~~roughly~~expense of $208.2 million ~~in incremental revenue this year~~ and wea ~~anticipate approximately~~ $707.0 million ~~next~~ ~~year.~~loss Inon ~~partnership~~change ~~with~~in ~~Mattress~~fair ~~Firm,~~value weof ~~are developing an exclusive Luxe product for Mattress Firm~~warrants, ~~scheduled to launch early~~ ~~next~~partially ~~year,~~offset ~~which~~by ~~will~~$1.5 ~~increase~~million ~~our~~in ~~total~~other ~~slot count to the contractual minimum~~income. ~~Also~~The onother ~~May 2~~expense, ~~2025,~~net wein ~~entered into~~ the ~~Sherwood~~first ~~Agreement with~~quarter ~~Tempur~~of ~~Sherwood,~~2025 ~~LLC,~~consists ~~a subsidiary~~ of ~~Tempur~~interest ~~Sealy~~expense of $4.8 ~~The Sherwood Agreement provides that Tempur Sherwood~~million, ~~LLC~~partially ~~will~~offset ~~have~~by ~~the~~$0.2 ~~exclusive right~~million toin ~~assemble~~other ~~certain~~income ~~product~~and ~~lines~~gain ~~that~~on wechange ~~sell~~in tofair ~~Mattress~~value ~~Firm~~of warrants.

~~The new~~Net ~~Rejuvenate~~loss ~~2.0~~attributable ~~collection~~to ~~launched~~Purple Inc. inwas ~~the second quarter 2025 and is available across all of our showroom locations~~$30.5 ~~Our showrooms~~million ~~delivered~~for ~~strong performance during~~ the ~~quarter~~three ~~with~~months ~~net~~ended ~~revenue~~March ~~increasing~~31, ~~over~~2026 ~~the~~compared ~~same~~to ~~period~~a ~~last~~net ~~year~~loss byof ~~6.5% to~~ $2219.01 million ~~and~~for ~~year~~the ~~over~~three ~~year~~months ~~comparable~~ended ~~sales~~March 31, ~~increasing by 12~~2025.~~0%,~~ ~~reflecting~~The ~~the strength of our premium positioning and value proposition~~$11.4 ~~Momentum~~million ~~remains~~increase ~~strong~~ in ~~our~~net ~~showrooms~~loss aswas ~~Rejuvenate~~primarily ~~2.0~~due ~~mattress~~to ~~sales~~lower ~~nearly~~gross ~~doubled~~margins ~~year~~and ~~over year. Since~~ the ~~launch,~~ weincrease ~~have~~in ~~sold~~loss ~~more~~from ~~than~~change ~~3,000~~in ~~units~~fair value ~~through~~of ~~our direct channels. In conjunction with~~ the ~~launch of Rejuvenate 2.0~~warrants, wepartially ~~are expanding~~offset ~~with~~by ~~other~~reduced ~~wholesale~~operating ~~partners~~expenses. ~~For our new Rejuvenate 2.0 collection, slot placement with our other wholesale partners have increased 68% compared to last year.~~

~~Restructuring Activities~~Outlook for Growth

~~In August~~The ~~2024,~~way we ~~initiated~~think about the business ~~Restructuring~~today ~~Plan~~is tofundamentally ~~strategically~~different ~~realign~~than ~~our~~a ~~operational~~year ~~focus~~ago. toLast ~~achieve~~year ~~efficiencies~~was inabout ~~our~~reshaping ~~operations that~~the ~~are~~business ~~expected to improve profitability and provide~~ for ~~reinvesting~~a intougher ~~technology~~market ~~and~~– ~~marketing initiatives. The Restructuring Plan~~right ~~includes~~sizing ~~the permanent closure of both Utah manufacturing facilities to consolidate mattress production in~~ our ~~Georgia~~cost ~~plant~~structure, ~~and~~strengthening athe ~~headcount reduction~~foundation atand ~~our~~restoring ~~Utah headquarters to drive additional operating efficiencies~~profitability. ~~Closure~~Now, ofwe ~~the~~are ~~two~~focused ~~Utah~~on ~~manufacturing~~growth ~~facilities~~with ~~was~~our ~~completed~~strategic infocus ~~the~~areas ~~second~~that ~~quarter~~build ofon ~~2025~~what ~~while~~is ~~consolidation~~already ~~into~~working ~~the~~and ~~Georgia~~how ~~facility~~we ~~was~~are ~~finalized~~running inour ~~December 2024~~business. ~~The~~We ~~reduction~~believe inwe ~~workforce at~~are ~~our~~well ~~Utah~~positioned ~~headquarters~~to ~~was~~grow ~~completed~~our inbusiness given ~~August~~our ~~2024.~~new ~~The~~grid ~~Restructuring~~innovation, ~~Plan~~evolved ismessaging ~~now~~strategy, ~~complete.~~our ~~During~~new ~~the~~cost ~~three~~structure ~~months~~and ~~ended~~other ~~September 30,~~cost ~~2025,~~saving ~~we recognized $5~~initiatives.3 ~~million~~Our inPath ~~costs relating~~ to ~~the~~Premium Sleep ~~Restructuring~~strategy ~~Plan,~~remains ~~which~~focused ~~related~~on to the ~~write-off~~following ofthree ~~equipment~~priorities ~~that was determined~~ to ~~have~~drive ~~no future use.~~growth:

~~In addition~~● Knowing Our Consumer. Knowing our consumer continues to shape how we show up across all channels. We have shifted away from promotion-led messaging toward clearer, benefit driven marketing focused on our differentiated technology and how we ~~continue~~deliver better sleep. Our Less Pain, Better Sleep positioning continues to ~~implement~~resonate, ~~additional~~providing ~~cost~~a ~~savings~~consistent, ~~measures~~consumer-led inmessage ~~2025~~that ~~beyond~~translates ~~those~~across ~~implemented~~e-commerce, ~~pursuant~~retail, and wholesale channels. We are making our differentiation clearer, our content more educational and our local marketing more effective at converting awareness into foot traffic. We continue to make changes to our ~~Restructuring~~creative ~~Plan~~approach and how we guide consumers through the online purchase journey with a more focused and tactical path to identifying the right mattress.

29● Delivering Better Sleep. Our innovation continues to resonate with consumers, with our premium products maintaining strong interest in both wholesale and showroom channels. We saw a strong initial response to the launch of Purple Royale, our new premium offering developed in partnership with Mattress Firm. Additionally, Rejuvenate 2.0 continues to outperform our expectations with strong demand. This performance reinforces the strength of our premium positioning and the resonance of our innovation with consumers. We are also seeing a positive halo effect across the portfolio, supporting performance in adjacent categories. We are focused on elevating the full consumer journey across both owned and partner channels. This includes improving how we present and explain our technology in-store, with greater emphasis on pain relief and more effective use of demonstrations and digital support. This is resulting in improved engagement from retail sales associates, particularly within our wholesale channel, as our product storytelling continues to resonate. We have also made changes to our online sales approach, enhancing live customer care and follow-up to better replicate the in-store experience in a digital environment, which is helping improve engagement and close rates. At the same time, we’re enhancing our delivery experience to ensure a more consistent and credible brand experience from purchase through fulfillment. These improvements are helping reinforce our value proposition and support stronger conversion.

~~Debt Financings~~● Executing with Financial Discipline. We have taken meaningful steps to resize and simplify the business, and we are seeing those benefits reflected in our operating efficiency and cost structure. These actions have created a more stable foundation as we shift toward growth. In the first quarter, gross margin came in below our normal 40% baseline, primarily driven by higher levels of floor model discounts associated with the Purple Royale rollout at Mattress Firm. We view this as temporary, and as the floor model transition normalizes, we expect improved contribution from Purple Royale. We’ve seen similar dynamics during prior transitions and would expect a comparable normalization as floor model activity moderates. At the same time, we are making continued progress in our underlying cost structure, particularly across sourcing, operations, and fulfillment, supported by ongoing productivity initiatives and supply chain optimization efforts. We are also actively managing a more dynamic cost environment, including tariff dynamics and rising input costs. Our mitigation efforts are well underway, including diversifying our supplier base, expanding multi-sourcing, and selectively in-sourcing key components, such as pillows, where we see both cost and quality benefits.

~~On March~~There ~~12,~~is ~~2025,~~no ~~Purple~~guarantee ~~LLC,~~that ~~Purple~~we ~~Inc.~~will ~~and~~be ~~Intellibed~~able ~~(collectively, the “Loan Parties”), entered into an Amendment~~ to ~~the~~ ~~Amended~~effectively ~~and~~execute ~~Restated~~on ~~Credit~~these ~~Agreement (the “2025 Amendment”) with Coliseum Capital Partners (“CCP”) and Blackwell Partners LLC – Series A (“Blackwell”) (collectively the “2025 Lenders”)~~initiatives, which ~~amends~~are ~~the~~subject ~~Amended~~to ~~and Restated Credit Agreement. The Amendment~~risks, ~~among other things~~uncertainties, ~~provides~~and ~~for~~assumptions anthat ~~increase~~are indifficult ~~the~~to ~~initial~~predict, ~~principal amount of~~ including the ~~Related~~risks ~~Party~~described ~~Loan by~~in ~~$19.0 million (~~the “~~First~~Risk ~~Incremental Loan~~Factors”) ~~from~~section ~~an initial Related Party Loan principal amount~~ of ~~$61.0~~this ~~million~~Quarterly toReport ~~an initial~~and ~~aggregate~~in ~~principal~~our ~~amount~~Annual ofReport ~~$80.0~~on ~~million,~~Form ~~and~~10-K ~~allows~~filed with the ~~Loan~~SEC ~~Parties~~on toMarch ~~request one or more additional term loans from CCP~~31, ~~Blackwell~~ 2026 and ~~other~~elsewhere ~~lenders~~herein. ~~(collectively~~Therefore, ~~the~~actual ~~“Lenders”)~~results inmay andiffer ~~initial~~materially ~~aggregate~~and ~~principal~~adversely ~~amount~~from ~~not~~those todescribed ~~exceed $20~~above.~~0 million~~ onIn ~~terms~~addition, towe bemay, ~~agreed~~in ~~to by~~ the ~~parties~~future, ~~and~~adapt ~~subject~~these tofocuses ~~the~~in ~~approval~~response ofto ~~the~~changes ~~Required Lenders (as defined~~ in the ~~Amended~~market ~~and Restated Credit Agreement). The First Incremental Loan will bear interest at the same rate as the Initial Loan, which may be paid in cash~~ or ~~in kind at~~ our ~~option~~business.

~~In addition,~~Operating weResults ~~also~~for ~~paid (i) an amendment fee equal to 2% of~~ the ~~outstanding~~Three ~~principal~~Months ~~and~~Ended ~~accrued~~March ~~and unpaid interest under the Related Party Loan held by the 2025 Lenders~~31, ~~paid~~2026 ~~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 debt issuance costs in March 2025.~~

~~In connection~~The ~~with~~following ~~the~~table ~~2025~~sets ~~Amendment,~~forth for ~~we issued to~~ the ~~2025~~periods ~~Lenders~~indicated, ~~warrants~~our ~~(the~~results ~~“2025 Warrants”) to purchase 6.2 million shares~~ of ~~our~~operations ~~Class~~and Athe ~~common~~percentage ~~stock at a price~~ of ~~$1.50~~total ~~per~~revenue ~~share,~~represented ~~subject~~in toour ~~certain~~unaudited ~~adjustments~~condensed ~~(see Note 11 – Warrant Liabilities).~~consolidated ~~These~~statements ~~warrants include full-ratchet anti-dilution protections, subject to a floor~~ of ~~$0.6979~~operations ~~with~~(dollars ~~respect~~in ~~to adjustments to the exercise price and expire on March 12, 2035.~~thousands):

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 (as defined in the Second 2025 Amendment), which amends the Amended A&R Credit Agreement. The Second 2025 Amendment, among other things, provides for a commitment increase pursuant to Section 2.18 of the Amended A&R Credit Agreement 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 our option.

	Three Months Ended March 31,
	2026			% of Net Revenues			2025			% of Net Revenues
Revenues, net	$	95,730			100.00	%	$	104,171			100.0	%
Cost of revenues:
Cost of revenues		60,535			63.2			62,207			59.7
Cost of revenues - restructuring related charges		—			—			918			0.9
Total cost of revenues		60,535			63.2			63,125			60.6
Gross profit		35,195			36.8			41,046			39.4
Operating expenses:
Marketing and sales		31,557			33.0			36,626			35.2
General and administrative		18,033			18.8			14,487			13.9
Research and development		2,448			2.6			2,452			2.4
Restructuring, impairment and other related charges		—			—			1,960			1.9
Total operating expenses		52,038			54.4			55,525			53.3
Operating loss		(16,843	)		(17.6	)		(14,479	)		(13.9	)
Other income (expense):
Interest expense		(8,219	)		(8.6	)		(4,764	)		(4.6	)
Other income, net		1,491			1.6			69			0.1
Change in fair value – warrant liabilities		(6,958	)		(7.3	)		49			—
Total other expense, net		(13,686	)		(14.3	)		(4,646	)		(4.5	)
Net loss before income taxes		(30,529	)		(31.9	)		(19,125	)		(18.4	)
Income tax expense		(47	)		—			(41	)		—
Net loss		(30,576	)		(31.9	)		(19,166	)		(18.4	)
Net loss attributable to noncontrolling interest		(35	)		—			(29	)		—
Net loss attributable to Purple Innovation, Inc.	$	(30,541	)		(31.9	)	$	(19,137	)		(18.4	)

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 reasonRevenues, 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.Net

30Net revenues decreased $8.4 million, or 8.1%, to $95.7 million for the three months ended March 31, 2026 compared to $104.2 million for the three months ended March 31, 2025. This decrease was primarily driven by our e-commerce and wholesale recognized revenue. From a sales channel perspective, e-commerce net revenues decreased $4.8 million, or 10.6%, wholesale net revenue decreased $4.5 million or 11.0% and showroom net revenues increased $0.9 million, or 4.8%. The decrease in wholesale revenue was due mainly to $4.9 million in payments to a manufacturer that is under common control with a customer and represents consideration paid to a customer. Accordingly, these payments are recorded as a reduction in revenue.

~~In addition,~~Total weCost ~~also paid (i) an amendment fee equal to 0.25%~~ of the outstanding principal and accrued and unpaid interest under the Existing Loan, 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.Revenues

~~In connection~~Total ~~with~~cost ~~the~~of ~~Second~~revenues decreased ~~2025~~$2.6 ~~Amendment~~million, weor ~~issued~~4.1%, to $60.5 million for the ~~2025~~three ~~Lenders~~months ended March 31, ~~warrants~~2026, (compared to $63.1 million for the “three months ended March 31, 2025. ~~Additional~~This ~~Warrants”)~~decrease was due primarily to ~~purchase 6~~$4.69 million ~~shares~~in ofcosts ~~our~~associated ~~Class~~with Aa ~~common~~manufacturer ~~stock~~that atis affiliated with a ~~price~~customer recorded as reduction of $1revenue.50 ~~per~~This ~~share,~~decrease ~~subject~~was topartially ~~certain~~offset ~~adjustments.~~by ~~These~~less ~~2025~~favorable ~~Additional~~absorption ~~Warrants~~of ~~include~~fixed ~~full-ratchet~~costs ~~anti-dilution~~from ~~protections,~~lower ~~subject~~production volumes. Our gross profit percentage decreased to a36.8% ~~floor~~of net revenues in the first quarter of 2026 $0from 39.~~6979~~4% ~~with~~in ~~respect~~the first quarter of 2025, due to ~~adjustments~~our strategic investment in Purple Royale floor models to support the ~~exercise~~Mattress Firm ~~price~~rollout, as well as modest manufacturing overhead deleverage driven by lower production volumes and ~~expire on~~less ~~March~~favorable ~~12,~~absorption of ~~2035~~fixed costs.

~~Warrants~~30

~~In connection~~Marketing with the 2025 Amendment, we issued to the 2025 Lenders the 2025 Warrants to purchase 6.2 million shares of our Class A common stock. Each 2025 Warrant entitles the registered holder to purchase one share of our Class A common stock at a price of $1.50 per share, subject to adjustment with a floor of $0.6979 and expire on March 12, 2035. The 2025 Warrants contain certain provisions that do not meet the criteria for equity classification and therefore were recorded as liabilities. The liability for the 2025 Warrants was recorded at a fair value of $5.4 million on the date of issuance with the offset included in debt issuance costs.Sales

~~In connection~~Marketing ~~with~~and ~~the~~sales ~~Second~~expense ~~2025~~decreased ~~Amendment~~$5.1 million, weor ~~issued~~13.8%, to $31.6 million for the ~~2025~~three ~~Lenders~~months ~~the~~ended ~~2025~~March ~~Additional~~31, ~~Warrants~~2026 compared to ~~purchase 6~~$36.6 million ~~shares of~~for ~~our~~the ~~Class~~three Amonths ~~common~~ended ~~stock.~~March ~~Each~~31, 2025. ~~Additional~~This ~~Warrant~~decrease ~~entitles~~primarily consisted ~~the registered holder to purchase one share~~ of ~~our Class A common stock at~~ a ~~price of~~ $13.503 ~~per~~million ~~share,~~decrease ~~subject~~in toadvertising ~~adjustment~~spend, ~~with~~ a ~~floor of~~ $01.~~6979~~3 ~~and~~million ~~expire~~decrease onin ~~March~~employee ~~12,~~related ~~2035.~~expenses ~~The~~due ~~liability~~to ~~for~~head ~~the~~count reductions ~~2025~~and ~~Additional Warrants was recorded at a fair value of~~ $50.42 million ondecrease ~~the~~in ~~date~~all ofother ~~issuance~~marketing ~~with~~and ~~the~~sales ~~offset included in debt issuance costs~~expenses.

~~In connection~~General with the SGI Agreement, we issued to SGI, warrants to purchase 8.0 million shares of our Class A common stock at a strike price of $1.50 per share (the “SGI Warrants”). The SGI 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 liability for the 2025 Additional Warrants was recorded at a fair value of $6.5 million on the date of issuance with the offset recorded as an asset to be amortized as a reduction of revenue over the life of the SGI Agreement.Administrative

~~A holder~~General ofand ~~the~~administrative ~~warrants~~expense ~~will~~increased ~~not~~$3.5 ~~have~~million, or 24.5%, to $18.0 million for the ~~right~~three tomonths ~~exercise~~ended ~~them~~March 31, 2026 compared to ~~the~~$14.5 ~~extent~~million ~~that~~for ~~after~~the ~~giving~~three ~~effect~~months toended ~~such~~March ~~exercise~~31, ~~the~~2025. ~~holder~~This increase ~~(together~~was ~~with~~due ~~its~~to ~~affiliates)~~a ~~would~~$4.3 ~~beneficially~~million ~~own~~increase in ~~excess~~strategic ofalternative ~~49.9%~~costs ofand ~~the~~an ~~shares~~increase of ~~Class~~$0.7 Amillion ~~common~~in ~~stock~~all ~~outstanding~~other ~~immediately~~general and administrative ~~after~~costs, ~~giving~~partially ~~effect~~offset by a $1.4 million decrease in employee related costs due to ~~such~~headcount ~~exercise~~reductions.

~~The warrant~~Research ~~liability is subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. During the three~~ and ~~nine months ended September 30, 2025, we incurred a gain of $6.9 million and $11.3 million due to the decrease in the fair value of the warrants outstanding at September 30, 2025.~~Development

~~Registration~~Research and development expense was flat to prior year at $2.4 million ~~Rights~~for ~~Agreements~~the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

~~In connection with the issuance of the 2025 Warrants~~Restructuring, onImpairment ~~March 12, 2025, we entered into a Second Amended~~ and ~~Restated~~Other ~~Registration Rights~~Related Agreement (the “2025 Registration Rights Agreement”) with CCP, Blackwell, and Coliseum Capital Co-Invest III, L.P., (the “2025 Holders”), providing for the registration under the Securities Act of the 2025 Warrants, the shares issuable upon the exercise of the 2025 Warrants, other warrants held by the 2025 Holders (and shares issuable upon exercise thereof) and the Class A common stock held by the 2025 Holders as of such date (the “2025 Registrable Securities”), subject to customary terms and conditions.Charges

~~In connection~~There ~~with~~were ~~the~~no ~~issuance of the 2025 Additional Warrants~~restructuring, impairment ~~on May 2, 2025, we entered into a Third Amended~~ and ~~Restated~~other ~~Registration Rights~~related ~~Agreement~~charges ~~(the “Third Amended Registration Rights Agreement”) with the 2025 Holders, providing~~ for the ~~registration under~~three ~~the~~months ~~Securities~~ended ~~Act~~March ~~of the 2025 Additional Warrants~~31, ~~the~~2026 ~~shares~~as ~~issuable~~all ~~upon~~restructuring ~~the~~activities ~~exercise~~were ofcompleted ~~the~~in 2025 ~~Additional Warrants, other~~. ~~warrants~~We ~~held~~incurred by$2.0 ~~the~~million ~~2025~~of ~~Holders~~restructuring, ~~(and~~impairment ~~shares issuable upon exercise thereof)~~ and ~~the~~other ~~Class~~related Acharges ~~common~~during ~~stock held by~~ the ~~2025~~three ~~Holders~~months ~~as of~~ended ~~such~~March ~~date (the “2025 Additional Registrable Securities”)~~31, ~~subject to customary terms and conditions~~2025.

31Operating Loss

~~In connection~~Operating ~~with~~loss ~~the~~increased ~~issuance~~$2.4 million, ofor ~~the SGI Warrants~~16.3%, onto ~~May~~$16.8 2million, ~~2025,~~for ~~we entered into a Registration Rights Agreement (~~the ~~“SGI~~three ~~Registration Rights~~months ~~Agreement”~~ended ~~and~~March ~~collectively with the 2025 Registration Rights Agreement and the Third Amended Registration Rights Agreement~~31, ~~the~~ ~~“Registration~~2026 ~~Rights~~compared ~~Agreements”)~~to ~~with~~$14.5 ~~SGI,~~million ~~providing~~ for the ~~registration~~three ~~under~~months ~~the~~ended ~~Securities Act of the SGI Warrants,~~March ~~the~~31, ~~shares~~2025. ~~issuable~~This ~~upon~~increase ~~the~~in ~~exercise~~our ofoperating ~~the~~loss ~~SGI~~is ~~Warrants, and~~ the ~~Class~~result ~~A common stock held by SGI as~~ of ~~such~~a ~~date~~lower ~~(the~~gross ~~“SGI~~profit ~~Registrable Securities”~~percent and ~~collectively~~increases ~~with~~in ~~the~~strategic ~~2025~~alternative ~~Registrable Securities and 2025 Additional Registrable Securities~~costs, ~~the “Registrable~~ ~~Securities”),~~partially ~~subject~~offset toby ~~customary~~reduced ~~terms~~advertising spend and ~~conditions~~lower headcount costs.

~~The Registration~~Interest Rights Agreements entitle the investors party thereto to demand registration of the Registrable Securities and also to piggyback on the registration of Company securities by us and other Company securityholders. We will be responsible for the payment of the investors’ expenses in connection with any offering or sale of Registrable Securities, including underwriting discounts or selling commissions, placement agent or broker fees or similar discounts, commissions or fees relating to the sale of certain Registrable Securities.Expense

~~The~~Interest expense totaled $8.2 ~~registration~~million ~~statement~~for ~~filed~~the onthree ~~May~~months ~~23,~~ended ~~2025~~March 31, ~~which~~2026 ~~registered~~compared to $4.8 million for the ~~Registrable~~three ~~Securities~~months ended March 31, 2025. This increase was primarily ~~declared~~due ~~effective~~to byadditional ~~the~~interest ~~SEC~~incurred on ~~May~~a ~~30,~~higher principal balance on the Related Party Loan as the Company elected the paid-in-kind ~~2025~~option on monthly interest over the past 12 months.

~~NOL Rights Plan~~31

~~On June~~Other 27Income, 2024, our Board of Directors (“Board”) adopted, and we entered into, a limited-duration stockholder rights agreement (the “NOL Rights Plan”) with a stated expiration date of June 30, 2025. Our Board approved the NOL Rights Plan to protect stockholder value by attempting to safeguard our ability to use our June 30, 2024, estimated $238 million of net operating losses (the “Current NOLs”) to reduce potential future federal income tax obligations from becoming substantially limited by future ownership of our common stock. Upon adopting the NOL Rights Plan, 0.3 million shares of our authorized shares of preferred stock were designated as Series C Preferred Shares. Pursuant to the NOL Rights Plan, our Board authorized and declared a dividend of one right for each outstanding share of common stock to stockholders of record at the close of business on July 26, 2024. Upon a stockholder acquiring greater than a 4.9% ownership percentage threshold (or, if a stockholder has beneficial ownership of in excess of 4.9%, then the ownership percentage that is one-half of one percentage point greater than their current beneficial ownership percentage), the rights will become exercisable to significantly dilute any stockholder who violates the ownership limitations of the NOL Rights Plan. The NOL Rights Plan was ratified at a special meeting of our stockholders on October 15, 2024 (the “Special Meeting”). On May 6, 2025, the Board accelerated the termination of the NOL Rights Plan and the NOL Protective Charter Amendment, to May 7, 2025.Net

~~NOL~~Other income increased to ~~Protective~~$1.5 ~~Charter~~million ~~Amendment~~for the three months ended March 31, 2026 compared to $0.1 million for the three months ended March 31, 2025. This increase was mainly due to $1.3 million received for sublease rent payments on facilities we are no longer using and have subleased to other parties.

~~In connection~~Change with the NOL Rights Plan, our Board adopted a NOL Protective Charter Amendment that adds an additional layer of protection to our Current NOLs until June 30, 2025 by voiding any transfer of common stock that results in aFair ~~stockholder~~Value ~~acquiring~~– ~~beyond~~Warrant a 4.9% ownership percentage threshold (or, if a stockholder has current beneficial ownership of in excess of 4.9%, then the ownership percentage that is one-half of one percentage point greater than their current beneficial ownership percentage). The NOL Protective Charter Amendment was approved by our stockholders at the Special Meeting. On May 6, 2025, the Board accelerated the termination of the NOL Rights Plan and the NOL Protective Charter Amendment to May 7, 2025.Liabilities

~~Review~~Our Warrants contain certain provisions that did not meet the criteria for equity classification and therefore are recorded as liabilities with a re-measurement of fair ~~Strategic~~value ~~Alternatives~~at each reporting date. We incurred a $7.0 million loss on the change in fair value of our warrant liabilities for the three months ended March 31, 2026 related to the increase in fair value from the previous reporting date. For the three months ended March 31, 2025, we recognized a negligible gain related to the net decrease in fair value of the warrant liability.

~~We have~~Income ~~engaged~~Tax ~~with~~(Expense) ~~multiple~~Benefit parties about a broad range of opportunities to maximize shareholder value, including, but not limited to, a merger, sale or other strategic or financial transaction. The Board has formed a special committee of independent directors and we have engaged a financial advisor to support them in evaluating a range of options and exploring other potential strategic alternatives. If we are unsuccessful in engaging in a favorable strategic alternative, then our ability to grow our business and compete with larger, including combined, competitors may be adversely affected.

32We had a de minimis income tax expense for the three months ended March 31, 2026 and 2025. The income tax expense amounts in both the first quarter of 2026 and 2025 were related to various state taxes.

~~Impact of~~Noncontrolling ~~United States Tariff Policy~~Interest

We ~~continue~~ tocalculate ~~actively~~net ~~manage~~loss ~~the impact of recent United States tariff policies. Importantly,~~attributable ~~all of our mattresses are manufactured in the United States, and about 15% of our cost of goods is tied~~ to ~~products~~noncontrolling ~~sourced~~interests ~~from~~on ~~overseas.~~a ~~This~~quarterly ~~limited~~basis ~~exposure~~using istheir ~~primarily~~weighted ~~concentrated in~~average ~~the~~ownership ~~textile side of the business, which includes sheets and mattress covers, but also includes the import of bases and foundations~~percentage. ~~Tariffs~~Net ~~impacted~~loss usattributed ~~by approximately $2.0 million in the third quarter due~~ to ~~our mitigation efforts which have reduced the overall impact~~noncontrolling tointerests ~~our~~was ~~initial~~negligible ~~expectations.~~for ~~While future changes in tariffs are difficult to predict, we currently estimate~~ the ~~total~~three ~~cost~~months ~~exposure~~ended inMarch ~~2025 to be less than our previous $10 million estimate~~31, ~~due~~2026 ~~to a combination of our mitigation efforts~~ and ~~changes to the underlying tariff rates~~2025. We have begun shifting sourcing outside of China, and in July, we implemented price increases on select products, including two mattress models. The tariff landscape remains fluid, and we are actively evaluating sourcing alternatives and pricing strategies on a case-by-case basis. We believe that our vertically integrated model and strong vendor relationships give us the flexibility to remain agile and responsive to changes in tariff policies, and we believe that we will be able to mitigate these impacts through a combination of supply chain repositioning, vendor collaborations, and selective pricing actions.

~~Executive Summary~~Liquidity –and ~~Results~~Capital ~~of Operations~~Resources

~~Net~~Our principal sources of funds ~~revenues~~are ~~increased~~cash ~~$0.2~~flows ~~million,~~from oroperations ~~0.1%~~and cash and cash equivalents on hand, supplemented with borrowings made pursuant to ~~$118.8~~various ~~million~~loan ~~for~~agreements. Principal ~~the~~uses ~~three~~of ~~months~~funds ~~ended~~consist ~~September~~of 30capital expenditures, ~~2025~~working capital needs, ~~compared~~operating tolease ~~$118.6~~payment ~~million~~obligations and investing in innovation. ~~for~~In accordance with the ~~three~~terms ~~months~~of ~~ended~~our ~~September~~various 30loan agreements, ~~2024.~~we ~~The~~have ~~increase~~elected ~~reflects~~to ~~the~~pay ~~continued~~interest ~~execution~~in ofkind on our ~~strategic~~loans ~~priorities.~~to ~~Wholesale~~reduce ~~revenue grew~~cash 7obligations.9% Our ~~during~~working capital needs depend largely upon the ~~quarter~~timing asof ~~our~~cash ~~Mattress~~receipts ~~Firm~~from ~~expansion~~product ~~continues~~sales, ~~showroom~~payments ~~revenue~~to ~~increased~~vendors 6and others, changes in inventories, and operating lease payment obligations.5% Our cash and cash equivalents and working capital positions were $25.0 million and $22.4 million, respectively, as weof ~~continue~~March 31, 2026 compared to ~~catch~~$24.3 upmillion ~~from the~~and ~~second~~$35.2 ~~quarter~~million, ~~backlog~~respectively, as of ~~Rejuvenate~~December 31, 2025. Cash used for capital expenditures was $2.0 ~~deliveries~~million and ~~e-commerce~~$2.1 ~~was~~million ~~down~~for 9the three months ended March 31, 2026 and 2025.8% asOur wecapital ~~continue~~expenditures in to2026 ~~evolve~~have primarily consisted of additional investments made in our ~~website~~manufacturing ~~experience~~operations and showroom facilities. Additional details regarding our current debt are described above in Note 10 - Debt.

~~Gross profit~~Our ~~increased~~financial ~~$15.7~~statements ~~million,~~have been orprepared ~~44.5%,~~on toa ~~$50.9~~going ~~million~~concern ~~for~~basis ~~the~~of ~~three~~accounting, ~~months~~which ~~ended~~contemplates ~~September~~continuity ~~30,~~of ~~2025~~operations, ~~compared~~realization toof ~~$35.2~~assets ~~million~~and ~~for~~liabilities ~~the~~and ~~three~~commitments ~~months~~in ~~ended~~the ~~September~~normal ~~30,~~course ~~2024~~of business. ~~Our~~In ~~gross~~connection ~~profit~~with ~~percentage~~the ~~increased~~preparation toof ~~42.8%~~the ofconsolidated ~~net~~financial ~~revenues~~statements infor the year ~~third~~ended ~~quarter~~December 31, of 2025 ~~from~~, ~~29.7%~~we inconducted ~~the~~an ~~third~~evaluation ~~quarter~~as ofto ~~2024.~~whether ~~The~~there ~~increase~~were inconditions ~~gross~~and ~~profit~~events, isconsidered ~~due~~in ~~mainly to~~ the ~~completion~~aggregate, which ofraised ~~our~~substantial ~~Restructuring~~doubt ~~Plan,~~ as ~~we had~~to ~~fewer~~our ~~costs~~ability ~~this~~to ~~year,~~continue ~~continued~~as ~~improvement~~a ingoing ~~lowering~~concern ~~material~~within ~~costs,~~one ~~improving~~year ~~operating~~after ~~efficiency and~~ the ~~recent~~date ~~actions~~of ~~to reduce~~the ~~our~~issuance ~~cost~~ of ~~warranty~~such financial ~~returns~~statements.

Operating expenses decreased $19.0 million, or 23.2% to $63.0 million for the three months ended September 30, 2025, compared to $82.0 million for the three months ended September 30, 2024. This decrease was driven by a $13.6 million decrease in restructuring costs and a $6.5 million decrease in employee related expenses, partially offset by $1.0 million decrease in all other operating expenses.32

~~Other~~We ~~income~~had cash ~~(expense),~~and ~~net~~cash ~~decreased~~equivalents of approximately $725.1 0 million, orand ~~94.3%~~an toaccumulated ~~other~~deficit ~~income (expense), net~~ of $0655.48 million ~~for~~at ~~the~~March ~~three months ended September 30~~31, 2026. ~~2025,~~We ~~compared~~incurred toa ~~other income (expense),~~ net ofloss of $730.6 5 million ~~for~~and ~~the~~net ~~three~~cash ~~months~~provided ~~ended~~by ~~September~~operating ~~30,~~activities ~~2024.~~and ~~The~~net ~~other~~cash ~~income~~used ~~(expense), net~~ in ~~the~~investing ~~third~~activities was ~~quarter of 2025 consists of~~ $63.90 million ~~gain on the change in fair value of warrants~~ and $12.70 million, ~~in other income~~respectively, ~~partially~~ ~~offset~~for bythe ~~interest~~three ~~expense~~months ofended ~~$8.2~~March ~~million. The other income (expense)~~31, ~~net~~2026. inWe ~~the~~have ~~third~~a ~~quarter~~history of ~~2024~~recurring ~~consists~~net ~~of $4.8 million~~losses ~~gain~~and oncash ~~the~~used ~~change~~ in ~~fair~~operations, ~~value~~an ofaccumulated ~~warrants~~deficit, and ~~all~~requiring ~~other~~additional ~~income,~~capital ~~net of $7.2 million due~~ to anfund ~~insurance~~our ~~claim payment, partially offset by $4~~operations.~~4 million in interest expense.~~

~~Net~~The funds we have on hand and any follow-on capital, if needed, will ~~loss~~be ~~attributable~~used to ~~Purple~~fund ~~Inc.~~our ~~was~~operations ~~$11.7~~and ~~million~~invest ~~for~~in the ~~three~~business ~~months~~to ~~ended~~expand ~~September~~sales 30and marketing efforts, ~~2025~~ ~~compared~~as well as to ainvest ~~$39~~in innovation.2 ~~million~~As described ~~net~~below, ~~loss~~we ~~attributable~~have toimplemented ~~Purple~~plans ~~Inc.~~that ~~for~~we ~~the~~believe ~~three~~will ~~months ended~~both ~~September~~increase ~~30,~~our ~~2024.~~revenues ~~The~~from ~~$27.5~~the ~~million~~sales ~~decrease~~of inour ~~net~~products ~~loss~~and ~~was~~achieve cost ~~primarily~~savings ~~due~~within tothe ~~$26.5 million~~next inyear, ~~lower~~sufficient ~~costs~~to asgenerate apositive ~~result~~operating ofcash ~~our~~flow ~~Restructuring~~levels. ~~Plan~~However, ~~$8.1~~we ~~million~~may inbe ~~operational~~adversely impacted by ~~efficiency~~uncertain ~~improvements~~market conditions and ~~other~~there ~~cost~~can ~~reduction~~be ~~efforts~~no ~~and~~assurance ~~$2.1~~that ~~million~~we will be successful in ~~increased~~this ~~gain on~~regard. ~~fair~~If ~~value~~such ofplans ~~warrant~~are ~~liabilities~~not successful, we ~~partially~~may ~~offset~~need byto araise ~~$5.4~~additional ~~million~~capital ~~reduction~~ in ~~insurance claims~~order to support operations and ~~other~~business ~~proceeds~~initiatives. ~~received~~Access into ~~2024~~additional capital is uncertain and $3not within our control.8 ~~million~~Accordingly, inthere ~~increased~~is ~~interest~~substantial ~~expense~~doubt about our ability to continue as a going concern.

33We have taken a number of actions to increase cash flow and support our operations and strategies. In August 2024, we implemented the Restructuring Plan (as defined below) to consolidate manufacturing operations resulting in cost savings. We have realized and plan to continue to realize direct material cost savings by concentrating efforts on driving gross margin improvement through various methods such as selective pricing actions, continued mix shift towards the Restore and Rejuvenate collections, and by driving cost savings through supply chain initiatives and manufacturing efficiency. We have delivered direct material cost savings from our supplier diversification efforts, improved scrap and yield results from continuous improvements, and outbound freight costs reflect cost improvements along with improved delivery reliability. We have been successful in subleasing the two manufacturing facilities that were vacated as part of the Restructuring Plan. We have also taken additional cost-saving initiatives in 2025 and the beginning of 2026 to reduce headcount and streamline responsibilities and reporting structure. Further, our plans include additional actions intended to improve liquidity and reduce costs, including planned optimization of advertising spend, limiting the number of new store openings, efforts to mitigate tariff impacts by managing the country of origin, and other cost-saving initiatives. We have elected to have interest paid-in-kind and added to the principal amount of the loans under the Amended and Restated Credit Agreement. On March 24, 2026, we executed the Third Amendment to the Amended and Restated Credit Agreement (the “Third Amendment”) with the Lenders to extend the maturity date of the Amended and Restated Credit Agreement from December 31, 2026 to April 30, 2027. We are currently evaluating potential strategic alternatives and opportunities to achieve additional liquidity through one or more future debt refinancings.

~~Outlook~~Additionally, in May 2025, we 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). We are now represented in Mattress Firm’s full store network and with the recent launch of Purple Royale, the exclusive Luxe product for ~~Growth~~Mattress Firm, we have expanded to all 12,000 committed slots. We have also expanded into more Costco clubs in the fourth quarter of 2025.

~~We believe~~Other weContractual are well positioned to grow our business given our new grid innovation, evolved messaging strategy, the Restructuring Plan and other cost saving initiatives. We believe we are entering the fourth quarter with significant momentum that we believe will continue building through the end of the year, with fourth quarter to date revenues up in the low-double digits percentage range versus the same period last year. We are seeing validation of our brand and innovation strategy through the success of Rejuvenate 2.0, which has sold more than twice as many units as our Rejuvenate 1.0 in the prior year through our direct channels, the growing momentum behind our Mattress Firm expansion, which is rolling out across the country, the deepening partnership with Costco as we prepare to launch in 450 clubs for their year-end furniture show and the strong interest from other traditional and non-traditional partners. Our Path to Premium Sleep strategy remains focused on the following three key initiatives to drive sustainable and profitable market share:Obligations

●Other ~~Pioneer~~material ~~new~~contractual obligations ~~technologies~~primarily toinclude ~~maintain~~operating ~~our~~lease ~~competitive~~payment ~~advantage~~obligations. ~~Our~~See ~~strategy~~Note ~~focuses~~8 on- ~~offering~~Leases aof differentiated product that we believe provides unique benefits and higher customer satisfaction, all fueled by our proprietary flexible gel technology. Advancements and innovation in our grid technology have led to a new grid technology marking a significant advancement in our product lineup. We believe that our new DreamLayer grid, stacked with our original grid, creates a unique combination that further differentiates us in the ~~market~~unaudited ~~while~~condensed ~~driving~~consolidated financial ~~superior~~statements ~~comfort and support~~ for anadditional ~~even~~information ~~more~~on ~~premium sleep experience~~leases. This advancement resulted in a refresh of our current Rejuvenate line. The new Rejuvenate 2.0 collection launched in the second quarter 2025 and has been one of the most successful product introductions in our history. In our showrooms, Rejuvenate 2.0 has sold more than twice the number of units, almost doubling net revenue compared to Rejuvenate 1.0 in the same period last year. In addition, we have significantly expanded our distribution of pillows by launching our renowned DreamLayer and Freeform pillows into our wholesale channel. In the second quarter 2025, we also introduced our new Grid Cloud pillow, designed to bring the benefits of our grid technology to a broader audience. We are encouraged by the early performance of this pillow, which is outperforming our expectations and demonstrates the versatility of our proprietary grid technology across new comfort categories.

● Promote our product differentiation to drive sales. We started as a brand built on differentiation. In recent years, the category has relied extensively on discount messaging to attract customers, with less focus on product benefits. As part of our evolved messaging strategy, our efforts are focused on reinforcing the strength of our brand, clearly communicating the “Less Pain, Better Sleep” benefits of our technology and supporting premium positioning across all channels. This campaign continues to perform well and has been expanded across digital and social media platforms. We believe this focus on differentiation will drive stronger engagement, higher conversion and sustained growth across our channels.33

●Cash ~~Prioritize~~Flows ~~gross~~for ~~profit~~the ~~improvements.~~Three WeMonths ~~believe~~Ended ~~continued gross margin gains will come from driving cost savings through efficiency gains~~March 31, ~~supplier~~2026 ~~diversification~~Compared efforts, and improved warranty, scrap and yield results from continuous improvements efforts. We have also ramped up in-house pillow production, changed vendors for key mattress components and improved our delivery program to ~~drive~~the ~~cost~~Three ~~improvements~~Months ~~and~~Ended ~~better~~March ~~deliveries. We believe our sourcing~~31, ~~manufacturing and consolidation efforts are delivering meaningful structural improvements that position us for sustained profitable growth moving forward.~~2025

~~There is~~The nofollowing ~~guarantee~~summarizes ~~that we will be able to effectively execute on these initiatives, which are subject to risks, uncertainties, and assumptions~~our ~~that~~cash ~~are~~flows ~~difficult~~for ~~to predict, including~~ the ~~risks~~three ~~described~~months inended ~~the “Risk Factors” section of this Quarterly Report and in our Annual Report on Form 10-K filed with the SEC on~~ March 1431, ~~2025,~~2026 and ~~our Quarterly Reports on Form 10-Q filed with the SEC on May 6,~~ 2025, ~~and~~as ~~July~~reported ~~30, 2025. Therefore, actual results may differ materially and adversely from those described above. In addition, we may,~~ in ~~the~~our ~~future,~~unaudited ~~adapt~~condensed ~~these~~consolidated ~~focuses~~statements inof ~~response~~cash ~~to changes~~ flows (in ~~the market or our business.~~ thousands):

	Three Months Ended March 31,
	2026			2025
Net cash provided by (used in) operating activities	$	2,989		$	(23,070	)
Net cash used in investing activities		(2,033	)		(2,144	)
Net cash provided by (used in) financing activities		(346	)		17,830
Net increase (decrease) in cash		610			(7,384	)
Cash, beginning of the period		24,345			29,011
Cash, end of the period	$	24,955		$	21,627

~~Operating~~Cash provided by operating activities was $3.0 million for the three ~~Results~~months ended March 31, 2026 compared to cash used in operating activities was $23.1 million for the ~~Three~~three ~~Months~~months ~~Ended~~ended ~~September~~March 3031, 2025,. The $26.1 million increase in year-over-year cash provided by operating activities included a $28.5 million increase in cash provided from the changes in operating assets and ~~2024~~liabilities and an $8.8 million increase in non-cash cash adjustments, partially offset by a $11.4 million increase in net loss.

~~The~~Cash used in investing activities ~~following~~reflected ~~table~~net ~~sets~~capital ~~forth~~expenditures of $2.0 million and $2.1 million for the ~~periods~~three ~~indicated,~~months ~~our~~ended ~~results~~March of31, ~~operations~~2026 and ~~the~~2025, ~~percentage~~respectively. Capital ofexpenditures ~~total~~in ~~revenue~~the ~~represented~~first inthree ~~our unaudited~~months ~~condensed~~of ~~consolidated~~2026 ~~statements~~primarily consisted of ~~operations~~additional ~~(dollars~~investments made in ~~thousands):~~our manufacturing operations.

	Three Months Ended September 30,
	2025			% of Net Revenues			2024			% of Net Revenues
Revenues, net	$	118,766			100.0	%	$	118,598			100.0	%
Cost of revenues:
Cost of revenues		67,915			57.2			70,546			59.5
Cost of revenues - restructuring related charges		—			0.0			12,859			10.8
Total cost of revenues		67,915			57.2			83,405			70.3
Gross profit		50,851			42.8			35,193			29.7
Operating expenses:
Marketing and sales		40,120			33.8			42,939			36.2
General and administrative		15,200			12.8			17,266			14.6
Research and development		2,367			2.0			2,920			2.5
Restructuring, impairment and other related charges		5,290			4.5			18,881			15.9
Total operating expenses		62,977			53.0			82,006			69.1
Operating loss		(12,126	)		(10.2	)		(46,813	)		(39.5	)
Other income (expense):
Interest expense		(8,203	)		(6.9	)		(4,394	)		(3.7	)
Other income, net		1,742			1.5			7,165			6.0
Change in fair value – warrant liabilities		6,892			5.8			4,795			4.0
Total other income, net		431			0.4			7,566			6.4
Net loss before income taxes		(11,695	)		(9.8	)		(39,247	)		(33.1	)
Income tax expense		(53	)		—			(63	)		(0.0	)
Net loss		(11,748	)		(9.9	)		(39,310	)		(33.1	)
Net loss attributable to noncontrolling interest		(28	)		—			(82	)		(0.0	)
Net loss attributable to Purple Innovation, Inc.	$	(11,720	)		(9.9	)	$	(39,228	)		(33.1	)

Cash used in investing activities was $0.3 million for the three months ended March 31, 2026 compared to cash provided in investing activities of $17.8 million during the three months ended March 31, 2025. Cash used in financing activities for 2026 consist of amendment fess paid in cash to certain lenders for the Third Amendment. Financing activities during the first three months of 2025 included $19.0 million of proceeds from the 2025 Amendment financing offset in part by $1.2 million in payments for debt issuance costs.

~~Revenues, Net~~Critical Accounting Estimates

~~Net revenues~~We ~~increased~~discuss ~~$0.2~~our ~~million,~~critical oraccounting policies ~~0.1%,~~and toestimates ~~$118.8~~in Management’s ~~million~~Discussion ~~for~~and ~~the~~Analysis ~~three~~of ~~months~~Financial ~~ended~~Condition ~~September~~and ~~30,~~Results ~~2025,~~of ~~compared to $118.6 million~~Operations in ~~for~~our ~~the~~2025 ~~three~~Annual ~~months~~Report ~~ended~~on ~~September~~Form ~~30,~~10-K ~~2024.~~filed ~~From~~with athe ~~sales~~SEC ~~channel~~on ~~perspective,~~March ~~wholesale net revenues increased $3.8 million~~31, ~~or 7~~2026.~~9%, showrooms~~ ~~net~~There ~~revenues~~have ~~increased~~been ~~$1.3~~no ~~million,~~significant orchanges ~~6.5%,~~in ~~and~~our ~~e-commerce~~critical ~~net~~accounting policies ~~revenues~~since ~~decreased~~the ~~$4.9~~end ~~million,~~of orfiscal 92025.~~8%.~~

~~Total Cost~~Available ~~of Revenues~~Information

~~Total cost~~Our ofwebsite ~~revenues~~address ~~decreased~~is ~~$15~~www.5purple.com. We ~~million,~~make oravailable ~~18.6%,~~free toof ~~$67.9~~charge ~~million~~on ~~for~~ the ~~three~~Investor ~~months~~Relations ~~ended~~portion ~~September~~of ~~30,~~our ~~2025~~website, ~~compared to $83~~investors.~~4 million~~purple.com, ~~for~~our ~~the~~annual ~~three~~report ~~months~~on ~~ended~~Form ~~September 30~~10-K, quarterly ~~2024.~~reports ~~This~~on ~~decrease~~Form ~~was~~10-Q, ~~due~~current ~~primarily~~reports toon noForm ~~restructuring~~8-K, ~~costs incurred in the third quarter of 2025~~ and ~~lower~~amendments ~~material costs attributable~~ to ~~supply~~those ~~chain~~reports ~~initiatives,~~filed ~~partially~~or ~~offset~~furnished bypursuant ~~increased costs due~~ to ~~tariffs.~~Section 13(a) ~~Our~~or ~~gross~~15(d) ~~profit~~of ~~percentage~~the ~~increased~~Exchange toAct ~~42.8%~~as ofsoon ~~net~~as ~~revenues~~reasonably inpracticable ~~the~~after ~~third~~we ~~quarter~~electronically offile ~~2025~~such ~~from~~material ~~29.7%~~with, inor ~~the~~furnish ~~third~~it ~~quarter of 2024~~to, ~~due~~ ~~mainly to~~ the SEC. ~~completion~~The inclusion of our ~~Restructuring~~website ~~Plan,~~address ~~continued improvement~~ in ~~lowering~~this ~~material~~report ~~costs~~does asnot weinclude ~~realize~~or ~~the~~incorporate ~~benefits~~by ~~from ongoing~~reference ~~sourcing~~into ~~initiatives~~this ~~and~~report ~~improving~~any information on our ~~operating efficiency~~website.

35We also use the Investor Relations portion of our website, investors.purple.com, as a channel of distribution of additional Company information that may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website shall not be deemed to be incorporated herein by reference.

~~Marketing and Sales~~34

~~Marketing and~~ITEM sales expense decreased $2.8 million, or 6.6%, to $40.1 million for the three months ended September 30, 2025, compared to $42.9 million for the three months ended September 30, 2024. This decrease primarily consisted of a $3.0 ~~million~~QUANTITATIVE ~~decrease~~AND inQUALITATIVE ~~employee~~DISCLOSURES ~~related costs~~ABOUT ~~due~~MARKET ~~to headcount reductions, a $0.4 million decrease in all other marketing and sales costs, partially offset by a $0.6 million increase in advertising spending.~~RISK

~~General and~~Interest ~~Administrative~~Rate Risk

~~General~~Our operating results are ~~and~~subject ~~administrative~~to ~~expense~~risk ~~decreased~~from ~~$2.1~~interest ~~million,~~rate orfluctuations ~~12.0%,~~on tothe ~~$15~~outstanding borrowings.2 ~~million~~Interest ~~for~~rate ~~the~~risk ~~three~~is ~~months~~highly ~~ended~~sensitive ~~September~~due 30to many factors, including ~~2025~~U.S. monetary and tax policies, ~~compared to~~U.S. ~~$17~~and international economic factors and other factors beyond our control.3 ~~million~~The ~~for~~proceeds we received from the ~~three~~Related ~~months~~Party ~~ended~~Loan ~~September~~entered ~~30,~~into in January 2024. ~~This~~bears ~~decrease~~interest ~~was~~at ~~due~~a variable rate which exposes us to amarket ~~$3.2~~risks ~~million~~relating to ~~decrease~~changes in ~~employee~~interest ~~related costs~~rates. ~~from~~As ~~headcount~~of ~~reductions~~March 31, a2026, we had $0132.35 million ~~reduction~~of invariable ~~professional~~rate ~~services~~debt ~~mainly~~associated ~~from~~with ~~certain~~the ~~consulting~~Related ~~services~~Party ~~that have~~Loan. ~~been~~Based ~~discontinued,~~on ~~partially~~this ~~offset~~debt bylevel, an increase of ~~$0.7~~100 ~~million~~basis points in ~~additional~~the ~~strategic~~effective ~~alternative~~interest ~~spending~~rate ~~and~~on ~~$0.7~~the ~~million~~outstanding ~~increase~~debt amount would result in an increase in ~~all~~interest ~~other~~expense ~~general~~of ~~and~~approximately ~~administrative~~$1.3 ~~expenses~~million over the next 12 months.

~~Research~~We do not use derivative financial ~~and~~instruments ~~Development~~for speculative or trading purposes, but this does not preclude our adoption of specific hedging strategies in the future.

~~Research and~~ITEM ~~development expense decreased $0.5 million, or 18.9%, to $2.~~4 ~~million for the three months ended September 30, 2025, compared to $2~~.9 ~~million~~CONTROLS ~~for~~AND the three months ended September 30, 2024. The decrease is due to a $0.3 million decrease in employee related costs from headcount reductions and $0.2 million decrease in all other product development costs.PROCEDURES

~~Restructuring, Impairment~~(a) ~~and~~Evaluation ~~Other~~of ~~Related~~Disclosure ~~Charges~~Controls and Procedures

~~Restructuring~~Our management, with the participation ~~impairment~~of our Chief Executive Officer (“CEO”) and ~~other~~Chief ~~related~~Financial ~~charges~~Officer ~~decreased~~(“CFO” ~~$13.6~~and ~~million~~together orwith ~~72.0%~~the CEO, tothe ~~$5.3~~“Certifying Officers”), ~~million~~evaluated ~~for~~the effectiveness of the ~~three~~design ~~months~~and ~~ended~~operation ~~September~~of ~~30,~~our ~~2025, compared~~disclosure tocontrols ~~$18.9~~and ~~million~~procedures ~~for~~(as ~~the~~such ~~three~~term ~~months~~is ~~ended~~defined in ~~September~~Rule ~~30,~~13a-15(e) ~~2024~~under the Exchange Act). InOur ~~August~~disclosure ~~2024,~~controls weand ~~initiated~~procedures aare ~~Restructuring Plan~~designed to ~~permanently~~provide reasonable assurance that the ~~close~~information required to be disclosed in our ~~two~~reports ~~Utah~~filed ~~manufacturing~~or ~~facilities~~submitted under the Exchange Act is recorded, processed, summarized and ~~consolidate~~reported within ~~mattress~~the ~~production~~time inperiods ~~our~~specified ~~Georgia~~in ~~plant.~~the ~~The~~SEC’s ~~Restructuring~~rules ~~Plan~~and ~~also~~forms. Because ~~provided for~~of aits ~~headcount~~inherent ~~reduction~~limitations, atinternal ~~our~~control ~~Utah~~over financial ~~headquarters~~reporting tomay ~~drive~~not ~~additional~~prevent ~~operating~~or ~~efficiencies~~detect misstatements. ~~The~~Therefore, ~~decrease~~even isthose ~~due~~systems determined to ~~the~~be ~~completion of~~effective ~~the~~can ~~costs~~provide only reasonable assurance of ~~our~~achieving ~~Restructuring~~their ~~Plan~~control objectives. ~~The~~Disclosure ~~$5.3~~controls ~~million~~and ofprocedures ~~restructuring~~include, without limitation, controls and procedures ~~impairment~~designed ~~charges~~to ~~recorded~~ensure that information required to be disclosed in ~~operating~~our ~~expense~~reports ~~during the~~filed ~~third~~or ~~quarter~~submitted ofunder ~~2025~~the ~~included~~Exchange ~~assets~~Act ~~that~~is ~~were~~accumulated and ~~determined~~communicated to ~~have~~management, noincluding ~~future~~our ~~use~~Certifying ~~and~~Officers, ~~were~~or ~~written~~persons ~~off~~performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

~~Operating~~Based upon this evaluation, ~~Loss~~and the above criteria, our Certifying Officers concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026 at the reasonable assurance level.

~~Operating loss~~(b) ~~decreased~~Changes ~~$34.7 million, or 74.1%, to $12.1 million, for the three months ended September 30, 2025, compared to $46.8 million for the three months ended September 30, 2024. This decrease~~ in ~~our~~Internal ~~operating~~Controls ~~loss~~Over ~~is the result of the completion of the costs of our Restructuring~~Financial ~~Plan, the benefits realized through our Restructuring Plan, supply chain initiatives, and other cost reduction efforts throughout the Company~~Reporting.

~~Interest~~There were no changes in our ~~Expense~~internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Interest expense totaled $8.2 million for the three months ended September 30, 2025, compared to $4.4 million for the three months ended September 30, 2024. This increase was primarily due to additional interest incurred on a higher principal balance on the Related Party Loan as result of the increase in loan funding by $39.0 million and the Company electing the paid-in-kind option on monthly interest over the past 12 months.35

36PART II. OTHER INFORMATION

~~Change in~~ITEM ~~Fair~~1. ~~Value~~LEGAL ~~– Warrant Liabilities~~PROCEEDINGS

~~We have~~The ~~40.8~~Company ~~million~~is ~~warrants~~from ~~outstanding~~time ~~that contain certain provisions that do not meet the criteria for equity classification and therefore~~to ~~are~~time ~~recorded~~involved asin ~~liabilities~~various ~~with a re-measurement of fair value at each reporting date. For the three months ended September 30~~claims, ~~2025, we~~legal ~~recognized~~proceedings aand ~~$6.9~~complaints ~~million~~arising ~~gain related to the decrease~~ in ~~fair value of~~ the ~~warrant~~ordinary ~~liabilities~~course as of ~~September 30, 2025, as compared with the previous measurement date~~business. ~~The~~Please ~~decrease~~refer ~~is due mainly~~ to ~~the~~Note ~~change~~13 — inCommitments ~~the probability~~ and ~~timing~~Contingencies ofto ~~a fundamental transaction. For~~ the ~~three~~unaudited ~~months~~condensed ~~ended~~consolidated ~~September~~financial ~~30,~~statements ~~2024,~~contained ~~we recognized a 4.8 million gain related to the decrease~~ in ~~the~~this ~~fair~~report ~~value of the warrants~~for ~~from~~certain ~~the~~information ~~January~~regarding ~~2024~~our ~~issuance~~legal ~~date~~proceedings.

~~Income Tax~~ITEM ~~Expense~~1A. RISK FACTORS

WeThe ~~had~~Company’s abusiness, ~~$0.1~~reputation, ~~million~~results ~~income~~of ~~tax~~operations, ~~expense~~financial ~~for~~condition ~~the~~and ~~three~~stock ~~months~~price ~~ended~~can ~~September~~be 30materially and adversely affected by a number of factors, ~~2025~~whether currently known or unknown, ~~compared~~including tothose ~~$0.1~~described ~~million~~in ~~income~~Part ~~tax~~I, ~~expense~~Item ~~for~~ 1A of the ~~three~~2025 ~~months~~Annual ~~ended~~Report ~~September~~on Form 3010-K filed with the SEC on March 31, ~~2024.~~2026 ~~The~~under ~~income~~the ~~tax~~heading ~~expense~~“Risk ~~amounts~~Factors.” There inhave been no material changes from the ~~three~~risk ~~months~~factors ~~ended~~previously ~~September~~disclosed ~~30,~~in our 2025 ~~and~~Annual ~~2024~~Report ~~were related~~on toForm ~~various~~10-K ~~state~~filed ~~taxes~~with the SEC on March 31, 2026.

~~Noncontrolling Interest~~ITEM 5. OTHER INFORMATION

~~We calculate~~10b5-1 ~~net~~Trading income or loss attributable to noncontrolling interests on a quarterly basis using their weighted average ownership percentage. Net loss attributed to noncontrolling interests was negligible for the three months ended September 30, 2025, and 2024.Plans

~~Operating~~During the first quarter ~~Results~~of ~~for~~2026, ~~the~~none ~~Nine~~of ~~Months~~our ~~Ended~~directors ~~September~~or ~~30,~~executive ~~2025,~~officers adopted or terminated any ~~and~~“Rule ~~2024~~10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

The following table sets forth for the periods indicated, our results of operations and the percentage of total revenue represented in our unaudited condensed consolidated statements of operations (dollars in thousands):36

	Nine Months Ended September 30,
	2025			% of Net Revenues			2024			% of Net Revenues
Revenues, net	$	328,037			100.0	%	$	358,902			100.0	%
Cost of revenues:
Cost of revenues		197,462			60.2			220,190			61.4
Cost of revenues - restructuring related charges		995			0.3			12,859			3.6
Total cost of revenues		198,457			60.5			233,049			64.9
Gross profit		129,580			39.5			125,853			35.1
Operating expenses:
Marketing and sales		107,362			32.7			125,778			35.0
General and administrative		44,678			13.6			55,111			15.4
Research and development		6,997			2.1			10,572			2.9
Restructuring, impairment and other related charges		11,387			3.5			18,881			5.3
Total operating expenses		170,424			52.0			210,342			58.6
Operating loss		(40,844	)		(12.5	)		(84,489	)		(23.5	)
Other income (expense):
Interest expense		(20,424	)		(6.2	)		(13,029	)		(3.6	)
Other income, net		1,812			0.6			11,612			3.2
Loss on extinguishment of debt		—			—			(3,394	)		(0.9	)
Change in fair value – warrant liabilities		11,319			3.5			(111	)		—
Total other expense, net		(7,293	)		(2.2	)		(4,922	)		(1.4	)
Net loss before income taxes		(48,137	)		(14.7	)		(89,411	)		(24.9	)
Income tax expense		(148	)		—			(176	)		—
Net loss		(48,285	)		(14.7	)		(89,587	)		(25.0	)
Net loss attributable to noncontrolling interest		(83	)		—			(169	)		—
Net loss attributable to Purple Innovation, Inc.	$	(48,202	)		(14.7	)	$	(89,418	)		(24.9	)

ITEM 6. EXHIBITS

Number		Description
10.1		Third Amendment to Amended and Restated Credit Agreement, dated as of March 24, 2026, by and among the Loan Parties and the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 31, 2026).
10.2*+		Amendment to Amended and Restated Employment Agreement dated March 30, 2026, between Purple Innovation, Inc., and Robert DeMartini.
10.3*+		Amendment to Performance Share Unit Agreement dated March 30, 2026, between Purple Innovation, Inc. and Todd E. Vogensen.
10.4*+		Amendment to Restricted Share Unit Agreement dated March 30, 2026, between Purple Innovation, Inc. and Todd E. Vogensen.
31.1*		Certification by Robert T. DeMartini, Chief Executive Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification by Todd E. Vogensen, Chief Financial Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification by Robert T. DeMartini, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification by Todd E. Vogensen, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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~~Revenues, Net~~* Filed herewith. ** Furnished herewith. + Indicates management contract or compensatory plan.

Net revenues decreased $30.9 million, or 8.6%, to $328.0 million for the nine months ended September 30, 2025, compared to $358.9 million for the nine months ended September 30, 2024. This decrease was primarily driven by the industry-wide demand softness for home-related products, reductions in Wholesale door count in 2024 and softness in the e-commerce channel. From a sales channel perspective, e-commerce net revenues decreased $14.5 million, or 9.8%, showrooms net revenues increased $0.2 million, or 0.3%, and wholesale net revenues decreased $16.4 million, or 10.6%.37

~~Total Cost of Revenues~~SIGNATURE

~~Total cost~~Pursuant ~~of revenues decreased $34.6 million, or 14.8%,~~ to ~~$198.5 million for~~ the ~~nine months ended September 30, 2025, compared to $233.0~~requirements ~~million~~of ~~for~~ the ~~nine~~Securities ~~months~~Exchange ~~ended~~Act ~~September~~of 301934, 2024. This decrease was due primarily to reduced sales volumes, lower restructuring costs as we completed our Restructuring Plan, and lower material costs that were largely attributable to supply chain initiatives implemented over the ~~last~~registrant 12has ~~months.~~duly ~~Our~~caused ~~gross~~this ~~profit~~report ~~percentage increased~~ to ~~39.5%~~be ofsigned ~~net~~on ~~revenues~~its ~~for~~behalf ~~the~~by ~~first nine months of 2025 from 35.1% in~~ the ~~first~~undersigned ~~nine months of 2024 due primarily to the completion of our Restructuring Plan, continued improvement in lowering material~~thereunto ~~costs~~duly ~~as we realize the benefits from ongoing sourcing initiatives and improving our operating efficiency~~authorized.

Marketing and Sales

	PURPLE INNOVATION, INC.

Date: April 28, 2026	By:	/s/ Robert T. DeMartini
		Robert T. DeMartini
		Chief Executive Officer
		(Principal Executive Officer)

Date: April 28, 2026	By:	/s/ Todd E. Vogensen
		Todd E. Vogensen
		Chief Financial Officer
		(Principal Financial Officer)

Marketing and sales expense decreased $18.4 million, or 14.6%, to $107.4 million for the nine months ended September 30, 2025, compared to $125.8 million for the nine months ended September 30, 2024. This decrease was due mainly to $8.0 million decrease in employee related costs due to headcount reductions, a $5.8 million decrease in advertising spending and a $4.6 million decrease in all other marketing and sales costs.

Date: April 28, 2026	By:	/s/ George T. Ulrich
		George T. Ulrich
		VP Accounting and Financial Reporting
		(Principal Accounting Officer)

~~General and Administrative~~38

General and administrative expense decreased $10.4 million, or 18.9%, to $44.7 million for the nine months ended September 30, 2025, compared to $55.1 million for the nine months ended September 30, 2024. This decrease was primarily due to a $7.2 million decrease in employee related expenses due to headcount reductions, a $4.8 million reduction in professional services mainly from certain consulting services that have been discontinued, and a $0.4 million reduction in all other general and administrative expenses, partially offset by an increase of $1.9 million in additional strategic alternative spending.

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Research and Development

Research and development expense decreased $3.6 million, or 33.8%, to $7.0 million for the nine months ended September 30, 2025, compared to $10.6 million for the nine months ended September 30, 2024. This decrease is due to a $0.9 million decrease in employee expenses due to headcount reductions, a $1.4 million decrease from a loss incurred in 2024 on the write off of a certain project in 2024 and a $1.3 million decrease in other product development costs.

Restructuring, Impairment and Other Related Charges

Restructuring, impairment and other related charges decreased $7.5 million or 39.7%, to $11.4 million for the nine months ended September 30, 2025, compared to $18.9 million for the nine months ended September 30, 2024. In August 2024, we initiated a Restructuring Plan to permanently close our two Utah manufacturing facilities and consolidate mattress production in our Georgia plant. The Restructuring Plan also provided for a headcount reduction at our Utah headquarters to drive additional operating efficiencies. The $5.3 million of restructuring and impairment charges recorded in operating expense during the third quarter of 2025 included assets that were determined to have no future use and were written off. The $11.4 million of restructuring and impairment charges recorded in operating expense during the first nine months of 2025 included $9.5 million incurred related to accelerated depreciation, write-down of long-lived assets and impairment of assets and $2.9 million of employee-related and other cash charges.

Operating Loss

Operating loss decreased $43.6 million, or 51.7%, to $40.8 million, for the nine months ended September 30, 2025, compared to $84.5 million for the nine months ended September 30, 2024. This decrease in our operating loss is the result of the benefits realized through improved advertising efficiency, the benefits realized through our Restructuring Plan, supply chain initiatives and other cost reduction efforts throughout the Company, partially offset by increased costs due to tariffs, costs related to our manufacturing facility consolidation and the ramp-up costs relating to the Rejuvenate 2.0 launch.

Interest Expense

Interest expense totaled $20.4 million for the nine months ended September 30, 2025, compared to $13.0 million for the nine months ended September 30, 2024. This increase was primarily due to additional interest incurred on a higher principal balance on the Related Party Loan as a result of the increase in loan funding by $39.0 million and the Company electing the paid-in-kind option on monthly interest over the past 12 months.

Loss on Extinguishment of Debt

In January 2024, we entered into the Amended and Restated Credit Agreement that terminated and paid off our 2023 credit agreements. This termination was accounted for as an extinguishment of debt and $3.4 million of unamortized debt issuance costs relating to the 2023 credit agreements were recorded as loss on extinguishment of debt in the first quarter of 2024.

Change in Fair Value – Warrant Liabilities

We have 40.8 million warrants outstanding that contain certain provisions that do not meet the criteria for equity classification and therefore are recorded as liabilities with a re-measurement of fair value at each reporting date. For the nine months ended September 30, 2025, we recognized a $11.3 million gain related to the decrease in fair value of the warrant liabilities. The decrease is due mainly to the change in the probability and timing of a fundamental transaction. For the nine months ended September 30, 2024, we recognized a $0.1 million loss related to the increase in the fair value of the warrants from the January 2024 issuance.

Income Tax Expense

We had a $0.2 million income tax expense for the nine months ended September 30, 2025, compared to $0.2 million income tax expense for the nine months ended September 30, 2024. The income tax expense amounts in the nine months ended September 30, 2025 and 2024 were related to various state taxes.

Noncontrolling Interest

We calculate net income or loss attributable to noncontrolling interests on a quarterly basis using their weighted average ownership percentage. Net loss attributed to noncontrolling interests was $0.1 million for the nine months ended September 30, 2025, and $0.2 million for the nine months ended September 30, 2024.

Liquidity and Capital Resources

Our principal sources of funds are cash flows from operations and cash and cash equivalents on hand, supplemented with borrowings made pursuant to various loan agreements. Principal uses of funds consist of capital expenditures, working capital needs and operating lease payment obligations. In accordance with the terms of our various agreements, we have elected to pay interest in kind on our loans to reduce cash obligations. Our working capital needs depend largely upon the timing of cash receipts from product sales, payments to vendors and others, changes in inventories, and operating lease payment obligations. Our cash and cash equivalents and working capital positions were $32.4 million and $39.3 million, respectively, as of September 30, 2025, compared to $29.0 million and $25.4 million, respectively, as of December 31, 2024. Cash used for capital expenditures totaled $6.1 million and $6.4 million for the nine months ended September 30, 2025, and 2024, respectively. Our capital expenditures in the first nine months of 2025 have primarily consisted of additional investments made in our manufacturing operations. Additional details about our loan agreements are described above under “Recent Developments in our Business – Debt Financing.”

Our 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 our preparation of our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025, we conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to our ability to continue as a going concern within one year after the date of the issuance of such financial statements. We had cash and cash equivalents of approximately $32.4 million and an accumulated deficit of $622.1 million at September 30, 2025, a net loss of $48.2 million and net cash used in operating and investing activities of $34.1 million for the nine months ended September 30, 2025. We entered into the 2025 Amendment and the Second 2025 Amendment, pursuant to which we received an aggregate of $39.0 million in additional term loan proceeds from the 2025 Lenders.

We have also taken a number of other actions to increase cash flow. In August 2024, we implemented the Restructuring Plan to consolidate manufacturing operations to create efficiencies and cost savings. We have realized and plan to continue to realize direct material cost savings through supply chain initiatives and supplier diversification efforts. We have taken additional cost-saving initiatives during 2025 to maintain liquidity to support our operations and strategies. Additionally, we entered into an agreement with Mattress Firm, a business unit of SGI to expand its inventory of our products across SGI’s national store network from approximately 5,000 mattress slots to a minimum of 12,000 mattress slots.

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

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

Other Contractual Obligations

Other material contractual obligations primarily include operating lease payment obligations. See Note 8 - Leases of the unaudited condensed consolidated financial statements for additional information on leases.

Cash Flows for the Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024

The following summarizes our cash flows for the nine months ended September 30, 2025, and 2024 as reported in our unaudited condensed consolidated statements of cash flows (in thousands):

	Nine Months Ended September 30,
	2025			2024
Net cash used in operating activities	$	(28,030	)	$	(24,611	)
Net cash used in investing activities		(6,066	)		(6,381	)
Net cash provided by financing activities		37,443			27,534
Net increase (decrease) in cash		3,347			(3,458	)
Cash, beginning of the period		29,011			26,857
Cash, end of the period	$	32,358		$	23,399

Cash used in operating activities was $28.0 million and $24.6 million for the nine months ended September 30, 2025, and 2024, respectively. Significant components of the $3.4 million year-over-year increase in cash used in operating activities included a $12.9 million increase in cash used from the changes in operating assets and liabilities and $31.8 million increase in cash used due to a decrease in net noncash adjustments, partially offset by a $41.3 million decrease in net loss.

Cash used in investing activities reflected net capital expenditures of $6.1 million and $6.4 million for the nine months ended September 30, 2025, and 2024, respectively. Capital expenditures in the first nine months of 2025 primarily consisted of additional investments made in our manufacturing operations.

Cash provided by financing activities was $37.4 million during the nine months ended September 30, 2025, compared to $27.5 million during the nine months ended September 30, 2024. Financing activities during the first nine months of 2025 included $39.0 million of proceeds from the additional financing offset in part by $1.6 million in payments for debt issuance costs. Financing activities during the first nine months of 2024 included $61.0 million of proceeds received from the Related Party Loan under the Amended and Restated Credit Agreement, offset in part by a $25.0 million payment to pay off the term loans from the 2023 credit agreement, a $5.0 million payment to pay off the ABL Loans from the 2023 credit agreement, and payments of $3.5 million for debt issuance costs associated with entering into the Amended and Restated Credit Agreement.

Critical Accounting Estimates

We discuss our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K filed with the SEC on March 14, 2025. There have been no significant changes in our critical accounting policies since the end of fiscal 2024.

Available Information

Our website address is www.purple.com. We make available free of charge on the Investor Relations portion of our website, investors.purple.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The inclusion of our website address in this report does not include or incorporate by reference into this report any information on our website.

We also use the Investor Relations portion of our website, investors.purple.com, as a channel of distribution of additional Company information that may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website shall not be deemed to be incorporated herein by reference.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our operating results are subject to risk from interest rate fluctuations on the outstanding borrowings. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. The proceeds we received from the Related Party Loan entered into in January 2024 and amended by the 2025 Amendment and the Second 2025 Amendment, bears interest at a variable rate which exposes us to market risks relating to changes in interest rates. As of September 30, 2025, we had $122.2 million of variable rate debt associated with the Related Party Loan. Based on this debt level, an increase of 100 basis points in the effective interest rate on the outstanding debt amount would result in an increase in interest expense of approximately $1.2 million over the next 12 months.

We do not use derivative financial instruments for speculative or trading purposes, but this does not preclude our adoption of specific hedging strategies in the future.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO” and together with the CEO, the “Certifying Officers”), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Based upon this evaluation, and the above criteria, our Certifying Officers concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2025, at the reasonable assurance level.

(b) Changes in Internal Controls Over Financial Reporting.

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is from time to time involved in various claims, legal proceedings and complaints arising in the ordinary course of business. Please refer to Note 13 — Commitments and Contingencies to the unaudited condensed consolidated financial statements contained in this report for certain information regarding our legal proceedings.

ITEM 1A. RISK FACTORS

Except as described below, there have been no material changes from the risk factors previously disclosed in our 2024 Annual Report on Form 10-K filed with the SEC on March 14, 2025. The disclosure of risks identified below does not imply that the risk has not already materialized.

Changes in U.S. trade policy including the impact of tariffs are having and may continue to have a material adverse effect on our business and results of operations.

Our business and results of operations are being and may continue to be adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions which may be imposed by the U.S. or other governments with little or no advance notice. In the recent past, U.S. trade policy has resulted in retaliatory measures on U.S. goods and may result in further retaliatory measures. Further changes to trade policy may result in additional retaliatory measures. If we are unable to navigate further these unpredictable changes in U.S. or international trade policy, it could have a material adverse impact on our business and results of operations.

Some of our products require materials that may be subject to these recent tariffs, especially our products requiring textiles. In addition, some U.S manufacturers have recently asked the U.S. government to extend increased steel tariff protections to mattress springs. Any imposition of or increase in tariffs on imports of these products or components, as well as corresponding price increases for such materials available domestically, could increase our costs. To the extent that we are unsuccessful in finding alternative suppliers that are subject to smaller or no tariffs, negotiating sharing these costs with our suppliers, or failing to pass cost increases on to our customers, such cost increases could adversely affect our business and results of operations. Higher costs could also inhibit our ability to develop new products and innovations.

Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation, and diminished expectations for the economy, and ultimately may reduce demand for our products. Such conditions could have a material adverse impact on our business, results of operations and cash flows. Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital. Such adverse changes could increase our costs of capital and limit our access to financing sources, which could in turn reduce our cash flow and limit our ability to pursue growth opportunities.

Our indebtedness, related covenants, and certain prepayment obligations, including make-whole payments, could limit operational and financial flexibility and adversely affect our business if we breach such covenants or default on such indebtedness.

On January 23, 2024, to refinance existing obligations, we entered into the Amended and Restated Credit Agreement. Upon entry into the Amended and Restated Credit Agreement, we received a term loan in the amount of $61.0 million. The Amended and Restated Credit Agreement imposes various affirmative and negative covenants, including covenants regarding dispositions of property, investments, forming or acquiring subsidiaries, business combinations or acquisitions, incurrence of additional indebtedness, paying dividends or making distributions and transactions with affiliates, among other customary covenants.

These restrictions may prevent us from taking actions that we believe would be in the best interests of the business and complicate our ability to execute our business strategy or compete with less restricted companies. If we fail to comply with the covenants under the Amended and Restated Credit Agreement, we may need to seek future amendments or waivers and/or alternative liquidity sources, such as subordinated debt, which may not be favorable or available. Before taking any action requiring a waiver under the Amended and Restated Credit Agreement, we must first obtain approval from the Lenders, which may cause us to incur additional costs and may not be granted. Non-compliance could lead to defaults, which could materially adversely affect our financial condition and results of operations, including possible acceleration of our debt, as well as other cross-defaulting debt obligations. Additionally, defaults could significantly impair our ability to secure alternative financing and limit our business strategies. Our compliance with these covenants will depend on successfully implementing our business strategies, as breaches could lead to defaults and acceleration of our debt, potentially forcing us into bankruptcy or liquidation.

In addition, on March 12, 2025, we entered into the 2025 Amendment, pursuant to which the 2025 Lenders agreed to provide us with an incremental term loan of $19.0 million pursuant to Section 2.18 of the Amended and Restated Credit Agreement. On May 2, 2025, we entered into the 2025 Second Amendment, pursuant to which the 2025 Lenders agreed to provide us with an incremental term loan of $20.0 million pursuant to Section 2.18 of the Amended A&R Credit Agreement. The 2025 Amendment also amended the Amended A&R Credit Agreement to (i) provide for an additional term loan from the 2025 Term Loan Lenders (as defined in the 2025 Amendment) in an aggregate amount not to exceed $20.0 million, subject to the approval of the Required Lenders in their discretion, (ii) provide for the payment of substantial make-whole payments in the event we prepay the loans prior to their maturity, and (iii) provide that the incremental term loan will be senior in right of repayment to the initial term loan.

Under the Amended and Restated Credit Agreement, we have mandatory prepayment obligations, including upon certain asset dispositions, equity issuances, debt incurrences and extraordinary receipts of cash. As amended by the 2025 Amendment, we may be required to make substantial “make-whole” payments to the Lenders. If required to prepay or pay such make-whole payments, we may lack the liquidity to do so, resulting in default. Prepayments, including make-whole payments, would also divert resources from operating expenses, potentially harming relationships with suppliers, hindering growth strategies, and jeopardizing our business continuity. In addition, such payments could result in holders of our Class A common stock not receiving any consideration in a sale of our business, or if we were to liquidate, dissolve, or wind-up, either voluntarily or involuntarily.

We may need additional funds to execute our business plan, maintain our liquidity, repay our debt and fund our operations. We may not be able to obtain such funds on acceptable terms or at all.

We have experienced recurring operating losses and negative cash flows and may continue to generate operating losses and consume significant cash resources in the future. For the years ended December 31, 2024, and 2023, we had negative cash flow from operating activities of $18.0 million and $54.7 million, respectively. As of December 31, 2024, we had unrestricted cash and cash equivalents of $29.0 million and borrowings of $70.7 million under our Amended and Restated Credit Agreement, which will become due on December 31, 2026.

On March 12, 2025, we borrowed an additional $19.0 million under the Amended and Restated Credit Agreement pursuant to the 2025 Amendment, which will also become due on December 31, 2026. On May 2, 2025, we borrowed an additional $20 million under the Amended and Restated Credit Agreement, pursuant to the 2025 Second Amendment. The 2025 Amendment also added certain make-whole payments with respect to our borrowings under the Amended and Restated Credit Agreement, which would require substantial payments in connection with certain pre-payments or refinancing of our outstanding borrowings.

In connection with the preparation of our 2024 financial statements, we undertook a going concern assessment and concluded the Company will have sufficient liquidity for its operations for at least one year from the date those consolidated financial statements were issued. However, there can be no assurance that we will be able to maintain the liquidity necessary to fund our long-term operations and growth strategies, or repay our debt obligations when due. As a result, we may need to secure additional sources of liquidity to fund our long-term operating activities and capital expenditures. However, there can be no assurance that we will be able to obtain additional financing as needed on terms favorable to us, or at all. If we fail to meet liquidity and capital requirements, we may need to scale back or halt our growth plans, risking slower growth, losing suppliers, failing to meet customer demands, and losing employees. We may also need to restructure our obligations or pursue other measures to address any liquidity deficiency.

Under the Amended and Restated Credit Agreement, we can request additional loans, but the Lenders may deny requests, limiting our access to future funds and adversely affecting our liquidity, financial condition and results of operations. As a condition to providing future funds, the Lenders may require other revisions to the Amended and Restated Credit Agreement, such as increasing prepayment or make-whole payments or including additional restrictive covenants, which could adversely affect our business and financial condition.

Future equity or debt financings may involve issuing securities likely to be dilutive to our existing stockholders, such as warrants, as we did on January 23, 2024 when we issued to the Lenders, as partial consideration for their entering into the Amended and Restated Credit Agreement, warrants (the “2024 Warrants”) to purchase 20.0 million shares of our common stock (approximately 19% of our currently outstanding common stock) at a price of $1.50 per share, subject to certain adjustments. In addition, on March 12, 2025, we issued to the 2025 Lenders, as partial consideration for their entering into the 2025 Amendment, warrants to purchase 6.2 million shares of our common stock, and on May 2, 2025 we issued to the 2025 Lenders, as partial consideration for their entering into the Second 2025 Amendment, warrants to purchase 6.6 million shares of our common stock and on May 2, 2025 we issued to SGI as partial consideration for their entering into the SGI Agreement, warrants to purchase 8.0 million shares of our common stock at a price of $1.50 per share, subject to certain adjustments. The exercise of such warrants and/or any additional similar securities in the future would dilute the value and amount of our common stock. Similarly, any new securities we may issue may carry preferences, superior voting rights, or additional terms that could adversely affect shareholders of our common stock. Future capital raising efforts may incur substantial costs, such as investment banking, legal, and accounting fees, and could lead to non-cash expenses that negatively impact our financial condition.

Our business could suffer if we are unsuccessful in making, integrating and maintaining commercial agreements, strategic alliances and other business relationships.

We rely on commercial agreements and strategic relationships with suppliers, service providers, and wholesale partners. Disruptions in these relationships or strategic decisions by partners could negatively affect our business. For example, (i) one of our competitors has acquired one of our wholesale partners, which could disrupt our relationship or prevent us from continuing to sell our products in favorable placements alongside the competitor’s products or at all in the wholesale partner’s stores, and (ii) one of our competitors owns a manufacturing company with which we have a manufacturing relationship, and that competitor could disrupt that relationship to harm our manufacturing efforts. We may also struggle to maintain or develop these relationships and may not be able to secure new ones on favorable terms.

We sell products through wholesale partnerships and may seek to expand these relationships. However, these wholesale partnerships may not be profitable and could incur additional costs compared to our DTC operations. In addition, an expansion of these relationships may concentrate our business with one customer resulting in greater reliance on that customer, which could adversely affect our ability to grow our business and compete in our industry. Wholesale relationships may be terminated or modified, or wholesale partners may reduce orders or fail to meet their obligations, resulting in lost sales and adversely affecting our financial performance, results of operations and financial condition. Disputes with partners or the termination or amendment of agreements could lead to expenses, delayed payments, liabilities, and distractions from our strategic objectives. If we cannot renew or replace agreements on favorable terms, it could harm our business. Wholesale partners may also compete against us in key channels, harming our business. Maintaining these relationships may require significant resources and could limit our sales channels, adversely affecting other areas of our business.

We are expanding Purple showrooms across the U.S., which may compete with our wholesale partners for customers. This omni-channel strategy carries the risk of diminishing sales in other channels, increasing costs, and the potential loss of wholesale partners. Managing this omni-channel strategy may require significant resources, potentially impacting other areas of our business. If our financial performance falls short of expectations, we may struggle to secure favorable payment terms or obtain credit from commercial partners that have extended credit to us.

We recently increased our use of third-party manufacturers to assemble certain of our products using Company-made Hyper-Elastic Polymer material. We depend on our third-party manufacturers to maintain high levels of productivity and satisfactory delivery schedules. These third-party manufacturers may experience difficulties assembling our products, particularly in the early stages of their engagement as they develop expertise in assembling our products to our standards. For example, we recently experienced temporary issues with certain third-party manufacturers assembling our mattresses. Although such issues were resolved, the occurrence of such issues in the future would materially harm our business. The ability of our suppliers to effectively satisfy our production requirements could also be impacted by their financial difficulty or damage to their operations caused by fire, pandemic, terrorist attack, natural disaster, or other events. The failure of any supplier to perform to our expectations could result in supply shortages or delays for certain products and components and harm our business.

NASDAQ may delist our securities from its exchange, which could harm our business and limit our stockholders’ liquidity.

Our common stock is currently listed on NASDAQ, which has listing criteria. We cannot assure that our common stock will continue to be listed on NASDAQ in the future. To continue listing our common stock on NASDAQ, we must maintain certain governance, financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity, a minimum number of holders of our common stock, and a $1.00 minimum per share bid price for our common stock. If we fail to maintain a $1.00 minimum per share bid price for a period of 30 consecutive business days, we have 180 calendar days to maintain our common stock at a $1.00 minimum per share bid price for 10 consecutive trading days. If we do not regain compliance within 180 calendar days, NASDAQ may grant a second compliance period of 180 calendar days or it may determine to delist our common stock, at which point we would have an opportunity to appeal the delisting determination to a hearings panel. While we are currently in compliance with the minimum bid price requirement, there can be no guarantee that we will be able to maintain such compliance. Currently, the minimum bid price of our common stock has closed below $1.00 every trading day since September 24, 2025.

If we are unable to comply with NASDAQ’S continued listing requirements, our common stock may be subject to delisting. If NASDAQ delists our common stock from trading on its exchange or if we decide to voluntarily delist from NASDAQ and/or deregister our common stock under the federal securities laws, we could face significant material adverse consequences, including but not limited to (i) a limited availability of market quotations for our common stock; (ii) reduced liquidity for our common stock; (iii) a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; (iv) a limited amount of news and analyst coverage, and in the event of deregistration of our common stock, less public disclosure about us; and (v) a decreased ability to issue additional securities or obtain additional financing in the future.

Our stockholders may experience substantial dilution in the value of their investment or may otherwise have their interests impaired if we issue additional debt or equity securities or securities convertible into equity securities, as well as due to the exercise of the currently outstanding Warrants.

We may attempt to increase our capital by entering additional secured or unsecured debt or debt-like financing, or by issuing additional debt or equity securities, including issuances of secured or unsecured notes, preferred stock, hybrid securities or convertible securities. Our Second Amended and Restated Certificate of Incorporation allows us to issue up to 300 million shares of our common stock, including 210 million shares of Class A common stock and 90 million shares of Class B common stock, and up to five million shares of undesignated preferred stock.

We have previously sold and may in the future sell additional shares of our common stock or convertible securities at prices that are lower than the prices paid by existing stockholders, and investors purchasing shares or other securities could have rights superior to existing stockholders, which could result in substantial dilution of existing stockholders. For example, in February 2023 we issued 13.4 million shares of common stock pursuant to a public offering, on January 23, 2024, we issued to the Lenders under the Amended and Restated Credit Agreement the 2024 Warrants to purchase 20.0 million shares of our common stock at a price of $1.50 per share, subject to adjustments, and on March 12, 2025, we issued to the 2025 Lenders under the 2025 Amendment the 2025 Warrants to purchase 6.2 million shares of our common stock at a price of $1.50 per share, subject to adjustments. In addition, on May 2, 2025, we issued to the 2025 Lenders under the Second 2025 Amendment the 2025 Additional Warrants to purchase 6.6 million shares of our common stock at a price of $1.50 per share, subject to adjustments and on May 2, 2025, we issued to SGI as partial consideration for their entering into the SGI Agreement, warrants to purchase 8.0 million shares of our common stock at a price of $1.50 per share, subject to adjustments. The exercise of the Warrants will dilute the value of Class A common stock and stockholder voting power. In addition, the Warrants include full-ratchet anti-dilution protections, subject to certain conditions, which could result in the Warrants becoming exercisable for a significantly greater number of shares if we engage in a dilutive financing.

In the event of our liquidation, holders of our debt would receive distributions of our assets before distributions to holders of our common stock, including substantial make-whole payments, and holders of securities senior to the common stock would receive distributions of our assets before distributions to the holders of our common stock. Because future debt and equity offerings may be influenced by market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or debt financings. Market conditions could impose less favorable terms for the issuance of our securities in the future.

ITEM 5. OTHER INFORMATION

10b5-1 Trading Plans

During the third quarter of 2025, none of our directors or executive officers adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

ITEM 6. EXHIBITS

Number		Description
10.1+		Long-Term Incentive Cash Bonus Agreement dated July 22, 2025, between Purple Innovation, Inc. and Robert DeMartini (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 23, 2025).
10.2+		Long-Term Incentive Cash Bonus Agreement dated July 23, 2025, between Purple Innovation, Inc. and Todd Vogensen (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on July 23, 2025).
10.3+		Long-Term Incentive Cash Bonus Agreement dated July 22, 2025, between Purple Innovation, Inc. and Eric Haynor (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on July 23, 2025).
10.4+		Agreement dated July 23, 2025, between Purple Innovation, Inc. and Robert DeMartini (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 29, 2025).
10.5+		Agreement dated July 24, 2025, between Purple Innovation, Inc. and Todd Vogensen (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on July 29, 2025).
10.6+		Agreement dated July 24, 2025, between Purple Innovation, Inc. and Eric Haynor (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on July 29, 2025).
10.7+		Amendment to Amended and Restated Employment Agreement dated August 7, 2025, between Purple Innovation, Inc. and Robert DeMartini (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2025).
10.8+		Form of Amendment to the Restricted Share Unit Agreement dated August 7, 2025, between Purple Innovation, Inc. and certain officers of the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2025).
31.1*		Certification by Robert T. DeMartini, Chief Executive Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification by Todd E. Vogensen, Chief Financial Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification by Robert T. DeMartini, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification by Todd E. Vogensen, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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* Filed herewith. ** Furnished herewith. + Indicates management contract or compensatory plan

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PURPLE INNOVATION, INC.
Date: November 4, 2025	By:	/s/ Robert T. DeMartini
		Robert T. DeMartini
		Chief Executive Officer
		(Principal Executive Officer)
Date: November 4, 2025	By:	/s/ Todd E. Vogensen
		Todd E. Vogensen
		Chief Financial Officer
		(Principal Financial Officer)
Date: November 4, 2025	By:	/s/ George T. Ulrich
		George T. Ulrich
		VP Accounting and Financial Reporting
		(Principal Accounting Officer)

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