VNCE

This discussion summarizes our consolidated operating results, financial condition and liquidity. The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"). All amounts disclosed are in thousands except store counts, share and per share data and percentages. See Note 1 "Description of Business and Basis of Presentation" within the notes to the Condensed Consolidated Financial Statements in this Quarterly Report for further information. This discussion contains forward-looking statements involving risks, uncertainties and assumptions that could cause our results to differ materially from expectations. For a discussion of the risks facing our business see "Item 1A—Risk Factors" of this Quarterly Report as well as in our 2025 Annual Report on Form 10-K. Executive Overview We are a global retail company that operates the Vince brand women's and men's ready-to-wear business. We serve our customers through a variety of channels that reinforces the brand image. Previously, we also owned and operated the Rebecca Taylor and Parker brands until the sale of the respective intellectual property was completed, as discussed below. Vince, established in 2002, is a leading global luxury apparel and accessories brand best known for creating elevated yet understated pieces for every day effortless style. As of May 2, 2026, we operate 42 full-price retail stores, 12 outlet stores, and the e-commerce site, vince.com. Vince is also available through premium wholesale channels globally. On April 21, 2023 the Company entered into a strategic partnership ("Authentic Transaction") with Authentic Brands Group, LLC ("Authentic"), a global brand development, marketing and entertainment platform, whereby the Company contributed its intellectual property to a newly formed Authentic subsidiary ("ABG Vince") for cash consideration and a membership interest in ABG Vince. The Company closed the Asset Sale on May 25, 2023. On May 25, 2023, in connection with the Authentic Transaction, V Opco, entered into a License Agreement (the "License Agreement") with ABG Vince, which provides V Opco with an exclusive, long-term license to use the Licensed Property in the Territory to the Approved Accounts (each as defined in the License Agreement). See Note 2 "Significant Transactions" to the Condensed Consolidated Financial Statements in this Quarterly Report for additional information. On January 22, 2025, P180 Vince Acquisition Co., a subsidiary of P180, Inc., a venture focused on accelerating growth and profitability in the luxury apparel sector, acquired a majority stake in the Company (the “P180 Acquisition”) from affiliates of Sun Capital Partners, Inc. (collectively, “Sun Capital”). Rebecca Taylor, founded in 1996 in New York City, was a contemporary womenswear line lauded for its signature prints, romantic detailing and vintage inspired aesthetic, reimagined for a modern era. On September 12, 2022, the Company announced its decision to wind down the Rebecca Taylor business. On December 22, 2022, the Company's indirectly wholly owned subsidiary, Rebecca Taylor, Inc., completed the sale of its intellectual property and certain related ancillary assets to RT IPCO, LLC, an affiliate of Ramani Group. On May 3, 2024, V Opco completed the sale of all outstanding shares of Rebecca Taylor, Inc. to Nova Acquisitions, LLC. Parker, founded in 2008 in New York City, was a contemporary women's fashion brand that was trend focused. During the first half of fiscal 2020 the Company decided to pause the creation of new products to focus resources on the operations of the Vince and Rebecca Taylor brands. On February 17, 2023, the Company's indirectly wholly owned subsidiary, Parker Lifestyle, LLC, completed the sale of its intellectual property and certain related ancillary assets to Parker IP Co. LLC, an affiliate of BCI Brands. The Company has identified two reportable segments: Vince Wholesale and Vince Direct-to-consumer. Results of Operations Comparable Sales Comparable sales include our e-commerce sales in order to align with how we manage our brick-and-mortar retail stores and e-commerce online store as a combined single direct-to-consumer channel of distribution. As a result of our omni-channel sales and inventory strategy, as well as cross-channel customer shopping patterns, there is less distinction between our brick-and-mortar retail stores and our e-commerce online store and we believe the inclusion of e-commerce sales in our comparable sales metric is a more meaningful representation of these results and provides a more comprehensive view of our year over year comparable sales metric. A store is included in the comparable sales calculation after it has completed 13 full fiscal months of operations and includes stores, if any, that have been remodeled or relocated within the same geographic market the Company served prior to the relocation. Non-comparable sales include new stores which have not completed 13 full fiscal months of operations, sales from closed stores, and relocated stores serving a new geographic market. For 53-week fiscal years, we adjust comparable sales to exclude the additional week. There may be variations in the way in which some of our competitors and other retailers calculate comparable sales. 23 The following table presents, for the periods indicated, our operating results as a percentage of net sales, as well as earnings per share data: Three Months Ended May 2, 2026 May 3, 2025 % of Net % of Net Amount Sales Amount Sales (in thousands, except per share data and percentages) Statements of Operations: Net sales $ 64,035 100.0 % $ 57,933 100.0 % Cost of products sold 31,643 49.4 % 28,770 49.7 % Gross profit 32,392 50.6 % 29,163 50.3 % Selling, general and administrative expenses 35,039 54.7 % 33,601 58.0 % Loss from operations (2,647 ) (4.1 )% (4,438 ) (7.7 )% Interest expense, net 644 1.0 % 856 1.5 % Other (income) (103 ) (0.2 )% — 0.0 % Loss before income taxes and equity in net income of equity method investment (3,188 ) (5.0 )% (5,294 ) (9.1 )% Benefit for income taxes (408 ) (0.6 )% — 0.0 % Loss before equity in net income of equity method investment (2,780 ) (4.4 )% (5,294 ) (9.1 )% Equity in net income of equity method investment 679 1.1 % 491 0.8 % Net loss $ (2,101 ) (3.3 )% $ (4,803 ) (8.3 )% Loss per share: Basic loss per share $ (0.16 ) $ (0.37 ) Diluted loss per share $ (0.16 ) $ (0.37 ) Three Months Ended May 2, 2026 Compared to Three Months Ended May 3, 2025 Net sales for the three months ended May 2, 2026 were $64,035, increasing $6,102, or 10.5%, versus $57,933 for the three months ended May 3, 2025. Gross profit increased 11.1% to $32,392 for the three months ended May 2, 2026 from $29,163 in the prior year first quarter. As a percentage of sales, gross margin was 50.6%, compared with 50.3% in the prior year first quarter. The total gross margin rate increase was primarily driven by the following factors: •The favorable impact from higher pricing which contributed positively by approximately 130 basis points; and •The favorable impact of lower discounting which contributed positively by approximately 100 basis points; partially offset by •The unfavorable impact from higher tariffs of approximately 190 basis points. Selling, general and administrative ("SG&A") expenses for the three months ended May 2, 2026 were $35,039, increasing $1,438, or 4.3%, versus $33,601 for the three months ended May 3, 2025. SG&A expenses as a percentage of sales were 54.7% and 58.0% for the three months ended May 2, 2026 and May 3, 2025, respectively. The increase in SG&A expenses compared to the prior fiscal year period was due primarily to approximately $1,200 of increased benefit costs, and approximately $800 of increased marketing and advertising costs, partially offset by a decrease in legal costs. Interest expense, net decreased $212, or 24.8%, to $644 in the three months ended May 2, 2026 from $856 in the three months ended May 3, 2025, primarily due to lower levels of debt under the Revolving credit facility. Benefit for income taxes for the three months ended May 2, 2026 was $408, compared to $0 for the three months ended May 3, 2025. The benefit is due to the impact of applying the Company's estimated annual effective tax rate to the year-to-date ordinary pre-tax loss. In the prior comparative period, the Company had year-to-date ordinary pre-tax losses for the interim period and anticipated annual ordinary pre-tax income for the fiscal year. The Company determined that it was more likely than not that the tax benefit of the year-to-date ordinary pre-tax loss would not be realized in the current or future years and therefore, the Company did not record any tax expense during the prior comparative period. Equity in net income of equity method investment for the three months ended May 2, 2026 and May 3, 2025 was $679 and $491, respectively, and consists of the Company's proportionate share of ABG Vince's net income. 24 Performance by Segment The Company has identified two reportable segments as further described below: •Vince Wholesale segment—consists of the Company's operations to distribute Vince brand products to major department stores and specialty stores in the United States and select international markets; and •Vince Direct-to-consumer segment—consists of the Company's operations to distribute Vince brand products directly to the consumer through its Vince branded full-price specialty retail stores, outlet stores, and e-commerce platform. Unallocated corporate expenses are related to the Vince brand and are comprised of SG&A expenses attributable to corporate and administrative activities (such as marketing, design, finance, information technology, legal and human resource departments), and other charges that are not directly attributable to the Company's Vince Wholesale and Vince Direct-to-consumer reportable segments. Three Months Ended May 2, May 3, (in thousands) 2026 2025 Net Sales: Vince Wholesale $ 32,066 $ 30,290 Vince Direct-to-consumer 31,969 27,643 Total net sales $ 64,035 $ 57,933 Income (loss) from operations: Vince Wholesale $ 10,134 $ 9,397 Vince Direct-to-consumer 1,847 (800 ) Total segment income from operations 11,981 8,597 Unallocated corporate (14,628 ) (13,035 ) Total loss from operations $ (2,647 ) $ (4,438 ) Vince Wholesale Three Months Ended (in thousands) May 2, 2026 May 3, 2025 $ Change Net sales $ 32,066 $ 30,290 $ 1,776 Income from operations 10,134 9,397 737 Net sales from our Vince Wholesale segment increased $1,776, or 5.9%, to $32,066 in the three months ended May 2, 2026 from $30,290 in the three months ended May 3, 2025, due primarily to increased shipments. Income from operations from our Vince Wholesale segment increased $737, or 7.8%, to $10,134 in the three months ended May 2, 2026 from $9,397 in the three months ended May 3, 2025, primarily driven by an increase in net sales, partially offset by a decrease in gross margin primarily due to the impact of tariffs. Vince Direct-to-consumer Three Months Ended (in thousands) May 2, 2026 May 3, 2025 $ Change Net sales $ 31,969 $ 27,643 $ 4,326 Income (loss) from operations 1,847 (800 ) 2,647 Net sales from our Vince Direct-to-consumer segment increased $4,326, or 15.6%, to $31,969 in the three months ended May 2, 2026 from $27,643 in the three months ended May 3, 2025. Comparable sales, including e-commerce, increased $4,459 or 17.7%, due to an increase in both e-commerce and retail stores volume and higher prices. Non-comparable sales, including Vince Unfold, which was exited in the first quarter of fiscal 2025, decreased $133. Since May 3, 2025, 4 net stores have closed bringing our total retail store count to 54 (consisting of 42 full price stores and 12 outlet stores) as of May 2, 2026, compared to 58 (consisting of 44 full price stores and 14 outlet stores) as of May 3, 2025. 25 Our Vince Direct-to-consumer segment had income from operations of $1,847 in the three months ended May 2, 2026 compared to a loss of $800 in the three months ended May 3, 2025. The increase was primarily driven by an increase in net sales. Liquidity and Capital Resources The Company's sources of liquidity are cash and cash equivalents, cash flows from operations, if any, borrowings available under the 2023 Revolving Credit Facility (as defined in Note 4 "Long-Term Debt and Financing Arrangements") and the Company's ability to access the capital markets, including the Sales Agreement entered into with Virtu Americas LLC in June 2023 (see Note 7 "Stockholders' Equity" for further information). The Company's primary cash needs are funding working capital requirements, including royalty payments under the License Agreement, meeting debt service requirements and capital expenditures for new stores and related leasehold improvements. The most significant components of the Company's working capital are cash and cash equivalents, accounts receivable, inventories, accounts payable and other current liabilities. The Company’s future financial results may be subject to substantial fluctuations, and may be impacted by business conditions and macroeconomic factors, particularly in light of the recently implemented tariffs. While we expect to meet our monthly Excess Availability (as defined in the 2023 Revolving Credit Facility Agreement) covenant and believe that our other sources of liquidity will generate sufficient cash flows to meet our obligations for the next twelve months from the date these financial statements are issued, the foregoing expectation is dependent on a number of factors, including, among others, our ability to generate sufficient cash flow from a combination of tariff mitigating initiatives, our ongoing ability to manage our operating obligations, the ability of our partners to satisfy their payment obligations to us when due, the results of the currently ongoing inventory valuation and potential borrowing restrictions imposed by our lenders based on their credit judgment, all of which could be significantly and negatively impacted by the recently implemented and new retaliatory and/or reciprocal tariffs, as well as changing trade policies between the U.S. and its trading partners, in addition to other macroeconomic factors. Any material negative impact from these factors or others could require us to implement alternative plans to satisfy our liquidity needs, which may be unsuccessful. In the event that we are unable to timely service our debt, meet other contractual payment obligations or fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness before maturity, seek waivers of or amendments to our contractual obligations for payment, reduce or delay scheduled expansions and capital expenditures liquidate inventory through additional discounting, sell material assets or operations or seek other financing opportunities. There can be no assurance that these options would be readily available to us and our inability to address our liquidity needs could materially and adversely affect our operations and jeopardize our business, financial condition and results of operations. Operating Activities Three Months Ended (in thousands) May 2, 2026 May 3, 2025 Operating activities Net loss $ (2,101 ) $ (4,803 ) Add (deduct) items not affecting operating cash flows: Depreciation and amortization 616 761 Provision for bad debt (32 ) 32 Loss on disposal of property and equipment — 43 Amortization of deferred financing costs 92 91 Share-based compensation expense 91 146 Capitalized PIK Interest 265 243 Equity in net income of equity method investment, net of distributions 719 1,285 Changes in assets and liabilities: Receivables, net 11,980 9,873 Inventories (4,475 ) (3,078 ) Prepaid expenses and other current assets (3,007 ) (3,699 ) Accounts payable and accrued expenses (10,726 ) (11,560 ) Other assets and liabilities (2,333 ) (1,151 ) Net cash used in operating activities $ (8,911 ) $ (11,817 ) Net cash used in operating activities during the three months ended May 2, 2026 was $8,911, which consisted of net loss of $2,101, impacted by non-cash items of $1,751 and cash used in working capital of $8,561. Net cash used in working capital primarily resulted from cash outflows due to a decrease in accounts payable and accrued expenses of $10,726, due primarily to timing of payments, and cash outflows of $4,475 due to an increase in inventories related to the timing of inventory receipts and increased costs due primarily to the impact of tariffs, partially offset by cash inflows from receivables of $11,980 mainly attributable to timing of collections. 26 Net cash used in operating activities during the three months ended May 3, 2025 was $11,817, which consisted of net loss of $4,803, impacted by non-cash items of $2,601 and cash used in working capital of $9,615. Net cash used in working capital resulted from cash outflows due to a decrease in accounts payable and accrued expenses of $11,560, due primarily to timing of payments, cash outflows in prepaid expenses and other current assets, due primarily to prepaid royalty payments, and an increase in inventories, partially offset by cash inflows from receivables of $9,873 mainly attributable to timing of collections. Investing Activities Three Months Ended (in thousands) May 2, 2026 May 3, 2025 Investing activities Payments for capital expenditures $ (216 ) $ (1,424 ) Net cash used in investing activities $ (216 ) $ (1,424 ) Net cash used in investing activities of $216 and $1,424 during the three months ended May 2, 2026 and May 3, 2025, respectively, represents capital expenditures primarily related to retail store buildouts, including leasehold improvements and store fixtures. Financing Activities Three Months Ended (in thousands) May 2, 2026 May 3, 2025 Financing activities Proceeds from borrowings under the Revolving Credit Facilities $ 65,300 $ 63,500 Repayment of borrowings under the Revolving Credit Facilities (55,900 ) (48,150 ) Tax withholdings related to restricted stock vesting (1 ) — Proceeds from issuance of common stock, net of certain fees — 4 Financing fees — (135 ) Net cash provided by financing activities $ 9,399 $ 15,219 Net cash provided by financing activities was $9,399 during the three months ended May 2, 2026, primarily consisting of $9,400 of net borrowings under the Company's revolving credit facilities. Net cash provided by financing activities was $15,219 during the three months ended May 3, 2025, primarily consisting of $15,350 of net borrowings under the Company's revolving credit facilities. 2023 Revolving Credit Facility On June 23, 2023, V Opco, entered into a new $85,000 senior secured revolving credit facility (the "2023 Revolving Credit Facility") pursuant to a Credit Agreement (the "2023 Revolving Credit Agreement") by and among V Opco, the guarantors named therein, Bank of America, N.A. ("BofA"), as Agent, the other lenders from time to time party thereto, and BofA Securities, Inc., as sole lead arranger and sole bookrunner. All outstanding amounts under the 2018 Revolving Credit Facility (as defined below) were repaid in full and such facility was terminated pursuant to the terms thereof as a result of all parties completing their obligations under such facility. The 2023 Revolving Credit Facility provides for a revolving line of credit of up to the lesser of (i) the Borrowing Base (as defined in the 2023 Revolving Credit Agreement) and (ii) $85,000, as well as a letter of credit sublimit of $10,000. The 2023 Revolving Credit Agreement also permits V Opco to request an increase in aggregate commitments under the 2023 Revolving Credit Facility of up to $15,000, subject to customary terms and conditions. The 2023 Revolving Credit Facility matures on the earlier of June 23, 2028, and 91 days prior to the earliest maturity date of any Material Indebtedness (as defined in the 2023 Revolving Credit Agreement), including the subordinated indebtedness pursuant to the Third Lien Credit Agreement. Interest is payable on the loans under the 2023 Revolving Credit Facility, at Vince LLC's request, either at Term SOFR, the Base Rate, or SOFR Daily Floating Rate, in each case, with applicable margins subject to a pricing grid based on an average daily excess availability calculation. The "Base Rate" means, for any day, a fluctuating rate per annum equal to the highest of (i) the Federal Funds Rate for such day, plus 0.5%; (ii) the rate of interest in effect for such day as publicly announced from time to time by BofA as its prime rate; (iii) the SOFR Daily Floating Rate on such day, plus 1.0%; and (iv) 1.0%. During the continuance of certain specified events of default, at the election of BofA in its capacity as Agent, interest will accrue at a rate of 2.0% in excess of the applicable non-default rate. 27 The applicable margins for SOFR Term and SOFR Daily Floating Rate Loans are: (i) 2.0% when the average daily Excess Availability (as defined in the 2023 Revolving Credit Agreement) is greater than 66.7% of the Loan Cap (as defined in the 2023 Revolving Credit Agreement); (ii) 2.25% when the average daily Excess Availability is greater than or equal to 33.3% but less than or equal to 66.7% of the Loan Cap; and (iii) 2.5% when the average daily Excess Availability is less than 33.3% of the Loan Cap. The applicable margins for Base Rate Loans are: (a) 1.0% when the average daily Excess Availability is greater than 66.7% of the Loan Cap; (b) 1.25% when the average daily Excess Availability is greater than or equal to 33.3% but less than or equal to 66.7% of the Loan Cap; and (c) 1.5% when the average daily Excess Availability is less than 33.3% of the Loan Cap. In accordance with the First Amendment, from the First Amendment Effective Date (January 21, 2025) until the first Adjustment Date occurring after the twelve (12) month anniversary of the First Amendment Effective Date, the applicable margin will be 2.50% with respect to SOFR Term Loans and SOFR Daily Floating Rate Loans and 1.50% with respect to Base Rate Loans. The 2023 Revolving Credit Facility contains a financial covenant requiring Excess Availability at all times to be no less than the greater of (i) 10.0% of the Loan Cap in effect at such time and (ii) $7,500. The 2023 Revolving Credit Facility contains representations and warranties, covenants and events of default that are customary for this type of financing, including limitations on the incurrence of additional indebtedness, liens, burdensome agreements, investments, loans, asset sales, mergers, acquisitions, prepayment of certain other debt, the repurchase of capital stock, transactions with affiliates, and the ability to change the nature of its business or its fiscal year. The 2023 Revolving Credit Facility generally permits dividends in the absence of any default or event of default (including any event of default arising from a contemplated dividend), so long as (i) after giving pro forma effect to the contemplated dividend and on a pro forma basis for the 30-day period immediately preceding such dividend, Excess Availability will be at least the greater of 20.0% of the Loan Cap and $15,000 and (ii) after giving pro forma effect to the contemplated dividend, the Consolidated Fixed Charge Coverage Ratio (as defined in the 2023 Revolving Credit Agreement) for the 12 months preceding such dividend will be greater than or equal to 1.0 to 1.0. In accordance with the First Amendment, V Opco shall not make certain Restricted Payments as defined in the Agreement until the earlier of (i) the date that is eighteen (18) month anniversary of the First Amendment Effective Date, which date is July 21, 2026 and (ii) the first date following the twelve (12) month anniversary of the First Amendment Effective Date on which the Consolidated Fixed Charge Coverage Ratio is greater than or equal to 1.0 to 1.0. All obligations under the 2023 Revolving Credit Facility are guaranteed by the Company and Vince Intermediate and any future subsidiaries of the Company (other than Excluded Subsidiaries as defined in the 2023 Revolving Credit Agreement) and secured by a lien on substantially all of the assets of the Company, V Opco and Vince Intermediate and any future subsidiary guarantors, other than among others, equity interests in ABG Vince, as well as the rights of V Opco under the License Agreement. No financing costs were incurred during the three months ended May 2, 2026 and May 3, 2025, respectively. As of May 2, 2026, the Company was in compliance with applicable covenants. As of May 2, 2026, $31,236 was available under the 2023 Revolving Credit Facility, net of the Loan Cap, and there were $20,100 of borrowings outstanding and $6,160 of letters of credit outstanding under the 2023 Revolving Credit Facility. The weighted average interest rate for borrowings outstanding under the 2023 Revolving Credit Facility as of May 2, 2026 was 6.0%. On January 22, 2025, V Opco, LLC entered into that certain First Amendment (the “First Amendment”) to the 2023 Revolving Credit Agreement. The First Amendment amends the 2023 Revolving Credit Agreement to, among other things, (a) consent to the P180 Acquisition (see Note 2 "Significant Transactions" for additional information); (b) provide that, until the first Adjustment Date following January 22, 2026, the applicable margin will be 2.50% with respect to SOFR Term Loans and SOFR Daily Floating Rate Loans and 1.50% with respect to Base Rate Loans; (c) eliminate the ability to make certain Restricted Payments until the earlier of (i) the date that is eighteen (18) month anniversary of the First Amendment Effective Date, which date is July 21, 2026 and (ii) the first date following the twelve (12) month anniversary of the First Amendment Effective Date on which the Consolidated Fixed Charge Coverage Ratio is greater than or equal to 1.0 to 1.0; and (d) until January 22, 2026, modify the thresholds applicable for the Agent’s rights to conduct field exams and inventory appraisals to Excess Availability being less than the greater of 25% of Loan Cap and $18,750 and, following January 24, 2026, such thresholds shall revert back to Excess Availability being less than the greater of 20% of Loan Cap and $15,000. On March 18, 2026, V Opco entered into the Second Amendment (the "2023 Revolving Credit Facility Second Amendment") to the 2023 Revolving Credit Facility which, among other things, (a) modified the definition of Eligible Trade Receivables in the Credit Agreement to increase concentration limits and (b) expanded the eligibility criteria for Accounts owed by certain customers that may be included in the Borrowing Base. 28 Third Lien Credit Facility On December 11, 2020, V Opco entered into a $20,000 subordinated term loan credit facility (the "Third Lien Credit Facility") pursuant to a credit agreement (the "Third Lien Credit Agreement"), as amended from time to time, dated December 11, 2020, by and among V Opco, as the borrower, VHC and Vince Intermediate, as guarantors, and SK Financial Services, LLC ("SK Financial"), as administrative agent and collateral agent, and other lenders from time to time party thereto. The proceeds were received on December 11, 2020 and were used to repay a portion of the borrowings outstanding under the 2018 Revolving Credit Facility. SK Financial is an affiliate of Sun Capital Partners, Inc. ("Sun Capital"). The Third Lien Credit Facility was reviewed and approved by the Special Committee of the Company's Board of Directors, consisting solely of directors not affiliated with Sun Capital, which committee was represented by independent legal advisors. Immediately prior to the P180 Acquisition, the affiliates of Sun Capital owned approximately 67% of the Company's common stock. Interest on loans under the Third Lien Credit Facility is payable in kind at a rate revised in connection with the Third Lien Third Amendment (as defined and discussed below) to be equal to the Daily Simple SOFR, subject to a credit spread adjustment of 0.10% per annum, plus 9.0%. During the continuance of certain specified events of default, interest may accrue on the loans under the Third Lien Credit Facility at a rate of 2.0% in excess of the rate otherwise applicable to such amount. The Company had incurred $485 in deferred financing costs associated with the Third Lien Credit Facility, of which a $400 closing fee is payable in kind and was added to the principal balance. These deferred financing costs were recorded as deferred debt issuance costs. In connection with the debt extinguishment (see below), unamortized debt issuance costs of $179 were included in the calculation of the gain on extinguishment. All obligations under the Third Lien Credit Facility are guaranteed by the Company, Vince Intermediate and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries and are secured on a junior basis relative to the 2023 Revolving Credit Facility by a lien on substantially all of the assets of the Company, Vince Intermediate, V Opco and the Company's existing material domestic restricted subsidiaries as well as any future material domestic restricted subsidiaries. On April 21, 2023, V Opco entered into that certain Consent and Third Amendment to Credit Agreement (the "Third Lien Third Amendment"), which, among other things, (a) permitted the sale of the intellectual property of the Vince Business contemplated in the Asset Sale, (b) replaced LIBOR as an interest rate benchmark in favor of Daily Simple SOFR, subject to a credit spread adjustment of 0.10% per annum, plus 9.0% (c) amended the Third Lien Credit Agreement's maturity date to the earlier of (i) March 30, 2025 and (ii) 180 days after the maturity date under the 2018 Revolving Credit Facility, (d) reduced the capacity to incur indebtedness and liens, make investments, restricted payments and dispositions and repay certain indebtedness and (e) modified certain representations and warranties, covenants and events of default in respect of documentation related to the Asset Sale. The Third Lien Third Amendment became effective upon the consummation of the Asset Sale, the prepayment of the Term Loan Credit Facility in full and other transactions contemplated by the Asset Purchase Agreement. On June 23, 2023, V Opco entered into the Fourth Amendment (the "Third Lien Fourth Amendment") to the Third Lien Credit Agreement which, among other things, (a) extended the Third Lien Credit Agreement's maturity date to the earlier of (i) September 30, 2028 and (ii) 91 days prior to the earliest maturity date of any Material Indebtedness (as defined therein) other than the 2023 Revolving Credit Facility and (b) modified certain representations and warranties, covenants and events of default in respect of documentation conforming to the terms of the 2023 Revolving Credit Facility. On January 22, 2025, V Opco entered into the Fifth Amendment (the “Third Lien Fifth Amendment”) to the Third Lien Credit Agreement which, among other things, consented to the P180 Acquisition. Seasonality The apparel and fashion industry in which we operate is cyclical and, consequently, our revenues are affected by general economic conditions and the seasonal trends characteristic to the apparel and fashion industry. Purchases of apparel are sensitive to a number of factors that influence the level of consumer spending, including economic conditions and the level of disposable consumer income, consumer debt, interest rates and consumer confidence as well as the impact of adverse weather conditions. In addition, fluctuations in the amount of sales in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting direct-to-consumer sales; as such, the financial results for any particular quarter may not be indicative of results for the fiscal year. We expect such seasonality to continue. Critical Accounting Estimates Management's discussion and analysis of financial condition and results of operations relies on our condensed consolidated financial statements, as set forth in Part I, Item 1 of this Quarterly Report, which are prepared based on certain critical accounting policies that require management to make judgments and estimates that are subject to varying degrees of uncertainty. While we 29 believe that these accounting policies are based on reasonable measurement criteria, actual future events can and often do result in outcomes materially different from these estimates. A summary of our critical accounting estimates is included in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our 2025 Annual Report on Form 10-K. As of May 2, 2026, there have been no material changes to the critical accounting estimates contained therein.