SNBRQ · Sleep Number Corp

Substantial doubt about the company's ability to continue as a going concern.

“the Company anticipates that it will not remain in compliance with the financial covenants of its Credit Agreement for the next twelve months. These conditions and events raise substantial doubt about the Company's ability to continue as a going concern. Management's plan to address the substantial doubt about the Company's ability to continue as a going concern, as described above, includes the following ongoing actions: •execute the Company's turnaround strategy centered on product, marketing and distribution with ongoing cost savings and operating efficiencies to reignite growth and increase financial resilience; •following the recent amendment of the Credit Agreement, the Company continues to engage with lenders to fulfill the Company's obligations under the credit facility and other provisions as needed; and •work with financial advisors to negotiate with the lenders and identify and secure additional capital options, alternative financing arrangements, strategic alternatives, or other comprehensive solutions to address the Company's capital structure and leverage needs to return to growth and create long-term value. There can be no assurance of the Company's ability to realize these plans. As a result, the Company has concluded that management's plans do not alleviate substantial doubt about the Company's ability to continue as a going concern for at least one year from the date of issuance of these financial statements.”