There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended October 4, 2025, other than as noted below. Risks Related to Our Business Strategy Our operating results have been harmed, and may continue to be harmed, if we are unable to effectively manage and sustain our future growth or scale our operations. We experienced a decline in sales, and thus profitability, beginning the fiscal year ending September 30, 2023. The current declines in our revenue and operating margins means our revenue and margin growth may be less than expected. In addition, historically, we have primarily relied on cash generated from operating activities to fund our day-to-day operations and service our debt. However, we cannot guarantee that we will be able to generate sufficient cash flow to meet our debt obligations and operating costs. These conditions and events raise substantial doubt about our ability to continue as a going concern. If we are unable to scale our operations efficiently or maintain pricing power and competitive pricing, we may fail to achieve expected operating margins, which would have a material and adverse effect on our operating results and our ability to continue as a going concern. Diminished growth may also stress our ability to adequately manage our operations, quality of products, safety, and regulatory compliance. We have experienced negative impacts on our cash reserves, and it may be necessary for us to obtain additional financing, which could increase indebtedness or result in dilution to shareholders. Further, we may not be able to obtain additional financing on acceptable terms, if at all. If we are unable to streamline our operations effectively, our business, financial condition and results of operations may be adversely affected. Some of our locations have not achieved the growth and profitability we anticipated, and, from time to time, we may determine to close certain locations based on a variety of factors, including, but not limited to, geographic proximity to other stores, operating cost increases, labor costs, profitability, leases and other strategic decisions. Our business strategy depends in part on our ability to streamline our operations and improve long-term profitability, including the effective implementation of our announced closure of approximately 80 to 90 underperforming U.S. locations by the end of the first fiscal quarter of 2026. Our ability to successfully close those locations, or other future locations as appropriate to operate efficiently, depends on a number of factors beyond our control, including without limitation, general economic conditions, prevailing conditions in the commercial real estate market, success in amending or terminating existing leases on acceptable terms, availability of suitable alternative locations and other factors. If we are unable to optimize our location base by closing the number of underperforming locations we expect, on the timeline we expect, or if we are unable to transfer these existing store customers to our other sales channels or if we announce additional store closures in the future, our business, financial condition and results of operations may be adversely affected. In addition, we expect to incur costs associated with the closure of underperforming locations, including charges for the impairment of long-lived assets and inventory write-offs. These costs may turn out to be greater than we expect and may adversely impact our financial condition. Our financial condition raises substantial doubt as to our ability to continue as a going concern, we have commenced an exploration of strategic alternatives, and our stockholders could lose all or a substantial part of their investment. Historically, we have primarily relied on cash generated from operating activities to fund our day-to-day operations and service our debt. Although we continue to pursue our strategic initiatives, including ongoing cost optimization efforts, we cannot assure you that these initiatives will be realized on the anticipated timeline, or at all, or that they will generate cash flow sufficient to meet the Company’s debt obligations and operating costs. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans to address our more immediate challenges may include the following: 31 Table of Contents •execute the Company’s strategic initiatives on pricing strategy, reactivating customers, enhancing our store operations and experience, continuing our cost optimization, and improving our asset utilization to reignite growth and increase financial resilience; and •actively engage with our lenders and other financial stakeholders to explore strategic alternatives to satisfy our existing debt obligations while meeting our long-term liquidity requirements. Such strategic alternatives may include but are not limited to a deleveraging transaction, potentially combined with one or more financing transactions. Our Term Loan matures on March 9, 2028, and we expect that we will need to seek to refinance, restructure, extend or if necessary, seek relief under applicable reorganization laws prior to maturity. The Company has not set a timetable for the conclusion of its exploration of strategic alternatives, and there can be no assurance that the process will result in any transaction. There can be no assurance of the Company’s ability to realize these plans, and as a result, the Company has concluded that management’s plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern. Additional financing, whether in the form of equity or debt, may not be available to us on acceptable terms, on a timely basis, or at all. If adequate funds are not available, or if the terms of potential funding sources are unfavorable, our business would be materially harmed. Furthermore, any new equity we issue will likely result in substantial dilution to our existing stockholders. Any strategic alternative we pursue, including any deleveraging transactions, is likely to be highly dilutive to, or eliminate the value of, our existing common stock, and holders of our common stock may receive little or no recovery. In addition, any such transaction could result in the cancellation or discharge of a portion of our indebtedness, which could give rise to taxable cancellation of indebtedness income or, if that income is excluded from taxable income (including in a case under the Bankruptcy Code or to the extent we are insolvent), a reduction in our net operating loss carryforwards and other tax attributes. Any such transaction could also result in an ownership change under Section 382 of the Internal Revenue Code and materially limit our ability to use any remaining net operating loss carryforwards and other tax attributes. If we are unable to obtain a waiver or forbearance or other agreement from the lenders under the Term Loan, obtain additional financing, improve our results or liquidity or execute any operational improvements, we will be unable to continue to fund our operations, continue to sell our products, realize value from our assets, or discharge our liabilities in the normal course of business. If we become unable to continue as a going concern, we could have to liquidate our assets, and potentially realize significantly less than the values at which they are carried on our financial statements, and stockholders could lose all or part of their investment. If we file to commence remedies under applicable restructuring or reorganization laws our operations and ability to develop and execute our business plan, and our ability to continue as a going concern, are subject to the risks and uncertainties associated with bankruptcy. As such, remedies under applicable restructuring or reorganization laws are likely to have a material adverse effect on our business, financial condition, results of operations and liquidity. During any such cases, our senior management would be required to spend a significant amount of time and effort attending to the restructuring of the business instead of focusing exclusively on our business operations. Bankruptcy Court protection also might make it more difficult to retain management and other employees necessary to the success and growth of our business. In addition, the exploration and negotiation of strategic alternatives will result in substantial advisory, legal and other transaction costs, whether or not any transaction is completed. Public disclosure of, or speculation concerning, the process may cause our suppliers to shorten or withdraw the extended payment terms we have negotiated with certain of our primary suppliers, or to require accelerated, prepaid or cash-on-delivery terms, and may adversely affect our ability to obtain or maintain letters of credit, surety bonds and insurance on acceptable terms. Any of these developments would reduce our available liquidity, potentially during periods of peak seasonal working capital need, and could further impair our ability to complete a transaction on acceptable terms, or at all. Additionally, our financial statements have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Thus, our financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Risks Related to Our Indebtedness Our substantial indebtedness could materially adversely affect our financial condition and our ability to operate our business, react to changes in the economy or industry or pay our debts and meet our obligations under our debt agreements, and could divert our cash flow from operations to debt payments. We have a substantial amount of indebtedness. As of July 4, 2026, our total borrowings under our Term Loan and our Revolving Credit Facility totaled $786.7 million. Subject to any restrictions in the agreements governing our existing debt, it is possible that we may incur additional debt. Our indebtedness could have important consequences to our stockholders, including but not limited to the following: 32 Table of Contents •it may be difficult for us to satisfy our obligations, including debt service requirements under our existing or future debt agreements, resulting in possible defaults on and acceleration of such debt; •our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, or other general corporate purposes may be impaired; •a substantial portion of cash flow from operations may be dedicated to the payment of principal and interest on our debt, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities, and acquisitions or for other purposes; •we are more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited; •our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our high level of debt and restrictive covenants contained in the agreements governing our existing and any future debt; •our ability to borrow additional funds or to refinance debt may be limited; and •even if we satisfy our debt obligations and avoid a default or restructuring, the dedication of our cash flow to servicing our debt, in particular our Term Loan, may leave us with insufficient funds to pursue capital expenditures, acquisitions or new product development, or investment in improved sales volume initiatives we believe would be profitable, and market perceptions of our leverage and liquidity could depress the trading price of our common stock. Our Term Loan matures on March 9, 2028, and we continue to actively engage with our lenders, however, in order to satisfy our existing debt obligations and meet our long-term liquidity requirements, we expect that we will need to seek to refinance, restructure, extend or otherwise address our indebtedness prior to maturity, and there can be no assurance that we will be able to do so on acceptable terms, or at all. If we are unsuccessful in refinancing or otherwise restructuring our indebtedness, or we are unsuccessful in seeking additional sources of capital, we may not have sufficient liquidity and capital resources to repay our indebtedness when it matures or otherwise meet our long-term cash requirements. Our debt obligations along with our financial condition raises substantial doubt as to our ability to continue as a going concern. Our credit rating was recently downgraded to CCC from CCC+, and there is a risk of further downgrades in the future. Credit rating downgrades have and may continue to adversely affect our ability to access capital markets, increase our borrowing costs, limit our financing options, and reduce our financial flexibility. Lower credit ratings may also result in more stringent covenants in our debt agreements, require us to provide additional collateral for existing obligations, trigger early repayment obligations under certain of our debt instruments, or limit our ability to refinance existing debt on favorable terms. Given our substantial indebtedness, these impacts could further constrain our operational flexibility, intensify the risks associated with our leverage, exacerbate our vulnerability to economic downturns, and adversely affect our liquidity, financial condition, and ability to fund operations, capital expenditures, and strategic initiatives. Furthermore, all of our debt under our Credit Facilities bears interest at variable rates. If these rates were to increase significantly, our ability to borrow additional funds may be reduced and the risks related to our substantial debt would intensify. In addition, as substantially all of our assets are pledged as collateral to secure our indebtedness, if we default or declare bankruptcy, after these obligations are met, there may not be sufficient funds or assets to satisfy our subordinate interests, including those of our stockholders. Servicing our debt requires a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we have been unable to generate sufficient cash flow to service our debt obligations. Our business may not generate sufficient cash flow from operating activities to service our debt obligations. Our cash flows from operating activities have been negatively impacted by a range of factors, including efforts around prior customer reactivation and value perception, persistent inflationary pressures on the consumer – including the growing bifurcation of household income and wealth – combined with ongoing softness in the pool and spa care vertical. Our ability to make payments on, and to refinance, our debt while funding planned capital expenditures, depends on our ability to generate sufficient cash flow. To some extent, this is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control. However, the timing and realization of our strategy cannot guarantee sufficient cash flow will be generated to meet our debt obligations and operating costs. If we are unable to generate sufficient cash flow from operations to service our debt and meet our other commitments, we may need to refinance or restructure all or a portion of our debt specifically our Term Loan maturing March 9, 2028, sell material assets or operations, delay capital expenditures, or raise additional capital. We may not be able to effect any of these actions on a timely basis on commercially reasonable terms or at all, and even if successful, these actions may not be sufficient to meet our capital requirements. Our credit rating was recently downgraded to CCC from CCC+, and there is a risk of further downgrades in the future. Credit rating downgrades have and may continue to adversely affect our ability to access capital markets, increase our borrowing costs, 33 Table of Contents limit our financing options, and reduce our financial flexibility. In addition, the terms of our existing or future debt agreements may restrict us from pursuing any of these alternatives. Even if we satisfy our debt obligations and avoid a default or restructuring the dedication of our cash flow to servicing our debt, in particular our Term Loan, may leave us with insufficient funds to pursue capital expenditures, acquisitions or other initiatives we believe could prove profitable, and market perceptions of our leverage and liquidity could depress the trading price of our common stock. Risks Related to Ownership of Our Common Stock Our common stock may be delisted from The Nasdaq Global Select Market if we are unable to maintain compliance with Nasdaq's continued listing standards. As previously disclosed, on February 11, 2026, we received notification from Nasdaq that our common stock was subject to potential delisting from The Nasdaq Global Select Market because we were not in compliance with Nasdaq Listing Rule 5450(b)(3)(C) because, for a period of 30 consecutive business days, we failed to maintain a minimum market value of publicly held shares (“MVPHS”) of our common stock of $15,000,000 (as calculated pursuant to Nasdaq Listing Rules). On May 29, 2026, we received a letter from Nasdaq notifying us that we had regained compliance with Nasdaq Listing Rule 5450(b)(3)(C) by maintaining MVPHS of $15,000,000 or greater for the period from May 14, 2026 to May 28, 2026. However, there can be no assurance that we will be able to maintain compliance with Nasdaq’s continued listing standards. If we do not maintain compliance with these, our common stock may be delisted from Nasdaq. Any delisting of our common stock would likely adversely affect the market liquidity and market price of our common stock and our ability to obtain financing for the continuation of our operations. Consequently, stockholders may not be able to sell our common stock at prices equal to or greater than the price paid.