dtc-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 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 001-40979

Solo Brands, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware									87-1360865
State or Other Jurisdiction of Incorporation or Organization									I.R.S. Employer Identification No.

1001 Mustang Dr.
Grapevine, TX									76051
Address of Principal Executive Offices									Zip Code

(817) 900-2664

Registrant’s Telephone Number, Including Area Code

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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, $0.001 par value per share	SBDS	OTCQB Venture Market

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 Data 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 Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Smaller reporting company	☒
Accelerated filer	☐	Emerging growth company	☒
Non-accelerated filer	☒

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 May 8, 2026, there were 2,558,984 shares of the registrant’s Class A common stock, $0.001 par value per share, outstanding.


TABLE OF CONTENTS
			Page
FORWARD-LOOKING STATEMENTS			i
Where You Can Find More Information			i

PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements			1
Consolidated Balance Sheets (Unaudited)			1
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)			2
Consolidated Statements of Cash Flows (Unaudited)			3
Consolidated Statements of Equity (Deficit) (Unaudited)			4

Notes to the Consolidated Financial Statements (Unaudited)			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures About Market Risk			24
Item 4. Controls and Procedures			25
PART II. OTHER INFORMATION			26
Item 1. Legal Proceedings			26
Item 1A. Risk Factors			26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			26
Item 3. Defaults Upon Senior Securities			26
Item 4. Mine Safety Disclosures			26
Item 5. Other Information			26
Item 6. Exhibits			27
Signatures			28

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) of Solo Brands, Inc. (the “Company,” “we,” “our,” or “us”) contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to statements regarding our future ability to continue as a going concern, our ability to transform our business, improve our liquidity and long-term capital structure, including through the continued execution of cost saving and operational improvements, our future results of operations and financial position, the effect of tariffs, industry and business trends, business strategy, plans, restocking trends, market growth, compliance with debt covenants and our objectives for future operations.

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our future ability to continue as a going concern; our ability to realize expected benefits from our strategic plans; our ability to implement any restructuring and cost-reduction efforts; our limited liquidity; our ability to collect refunds from tariffs paid under the International Emergency Economic Powers Act; our ability to mitigate the impact of new and increased tariffs and similar restrictions on our business; our reliance on third-party manufacturers, which operate mostly outside of the U.S., and problems with, or the loss of, our suppliers or an inability to obtain raw materials; our dependence on cash generated from operations to support our business and our growth initiatives; our ability to relist to a national exchange; risks associated with fluctuations in the price of our Class A common stock; risks associated with our indebtedness, including the limits imposed by our indebtedness to invest in the ongoing needs of our business; our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products; our ability to design, develop and introduce new products; our ability to manage our future growth effectively; our ability to expand into additional markets; risks associated with our international operations; our inability to sustain historic growth rates; our ability to cost-effectively attract new customers and retain our existing customers; the highly competitive market in which we operate; our failure to maintain product quality and product performance at an acceptable cost; the impact of product liability and warranty claims and product recalls, including write-offs; geopolitical actions, natural disasters, or pandemics; the ability of our largest stockholders to influence corporate matters; and the important factors discussed in Part I, Item 1A. “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”), and in Part II, Item 1A. “Risk Factors” in this Quarterly Report, as any such factors may be updated from time to time in its other filings with the SEC. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits to this Quarterly Report with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events or otherwise.

WHERE YOU CAN FIND MORE INFORMATION

We may use our website as a distribution channel of material information about the Company, including through press releases, investor presentations, and notices of upcoming events. We intend to utilize the investor relations section of our website at https://investors.solobrands.com as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD. We also intend to use certain social media channels, including, but not limited to, X, Facebook, Instagram, TikTok and LinkedIn, as a means of communicating with the public, our customers and investors about our Company, our products, and other matters. While not all of the information that the Company posts to its website and brand-related social media channels may be deemed to be of a material nature, some information may be, and we therefore encourage investors, the media, and others interested in our Company to review the information we make public in these locations.

All periodic and current reports, registration statements and other filings that we have filed or furnished to the SEC, including our annual reports 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, are available free of charge from the SEC’s website (www.sec.gov) and on our website at https://investors.solobrands.com. Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC.

Any reference to our website or social media channels does not constitute incorporation by reference of the information contained on or available through our website, and you should not consider such information to be a part of the periodic and current reports, registration statements or other filings that we file or furnish with the SEC from time to time.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

SOLO BRANDS, INC.

Consolidated Balance Sheets

(Unaudited)


(In thousands, except number of shares and par value)	March 31, 2026		December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	16,456	$	20,034
Accounts receivable, net of allowance for credit losses of $0.6 million and $1.1 million as of March 31, 2026 and December 31, 2025, respectively	38,652		29,764
Inventory	82,884		81,648
Prepaid expenses and other current assets	9,749		8,767
Total current assets	147,741		140,213
Non-current assets
Property and equipment, net	12,383		13,197
Intangible assets, net	97,607		100,038
Goodwill	73,119		73,119
Operating lease right-of-use assets	16,268		17,901
Other non-current assets	15,557		15,874
Total non-current assets	214,934		220,129
Total assets	$	362,675	$	360,342

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	7,532	$	13,073
Accrued expenses and other current liabilities	29,891		30,843
Deferred revenue	1,765		1,649
Current portion of long-term debt	2,400		1,800
Total current liabilities	41,588		47,365
Non-current liabilities
Long-term debt, net	261,426		240,272
Deferred tax liability	165		6,739
Operating lease liabilities	12,526		13,888
Other non-current liabilities	677		677
Total non-current liabilities	274,794		261,576

Commitments and contingencies (Note 1)

Shareholders’ equity
Class A common stock, par value $0.001 per share; 475,000,000 shares authorized; 2,558,647 and 1,847,618 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	3		2
Class B common stock, par value $0.001 per share; 50,000,000 shares authorized, 0 and 674,319 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	—		1
Additional paid-in capital	383,346		377,331
Retained earnings (accumulated deficit)	(335,431)		(329,965)
Accumulated other comprehensive income (loss)	(433)		(274)
Treasury stock, 50,360 and 32,836 owned as of March 31, 2026 and December 31, 2025, respectively	(1,192)		(1,092)
Equity attributable to Solo Brands, Inc.	46,293		46,003
Equity attributable to noncontrolling interests	—		5,398
Total equity	46,293		51,401
Total liabilities and equity	$	362,675	$	360,342

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended March 31,
(In thousands, except per share data)		2026		2025
Net sales		$	62,881	$	77,252
Cost of goods sold		29,978		34,647
Gross profit		32,903		42,605
Operating expenses
Selling, general & administrative expenses		33,205		38,990
Depreciation and amortization expenses		4,108		6,889
Restructuring, contract termination and impairment charges		305		5,839
Other operating expenses		22		1,530
Total operating expenses		37,640		53,248
Income (loss) from operations		(4,737)		(10,643)
Non-operating (income) expense
Interest expense, net		7,493		5,570
Other non-operating (income) expense		(148)		(580)
Total non-operating (income) expense		7,345		4,990
Income (loss) before income taxes		(12,082)		(15,633)
Income tax expense (benefit)		(6,616)		2,944
Net income (loss)		(5,466)		(18,577)
Less: net income (loss) attributable to noncontrolling interests		—		(6,385)
Net income (loss) attributable to Solo Brands, Inc.		$	(5,466)	$	(12,192)

Other comprehensive income (loss)
Foreign currency translation, net of tax		$	(159)	$	—
Comprehensive income (loss)		(5,625)		(18,577)

Less: net income (loss) attributable to noncontrolling interests		—		(6,385)
Comprehensive income (loss) attributable to Solo Brands, Inc.		$	(5,625)	$	(12,192)

Net income (loss) per Class A common stock
Basic and diluted		$	(2.18)	$	(8.27)


Weighted-average Class A common stock outstanding
Basic and diluted		2,507		1,475

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
(In thousands)	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(5,466)	$	(18,577)
Adjustments to reconcile net income (loss) to net cash and cash equivalents (used in) provided by operating activities
Depreciation and amortization	5,234		7,136
Interest expense payable in kind	5,804		—
Noncash operating lease expense	1,636		1,985
Amortization of debt issuance costs	1,470		215
Equity-based compensation, net	617		55



Restructuring, contract termination and impairment charges	—		564
Other	103		160

Change in fair value of contingent consideration	—		(70)
Deferred income taxes	(5,275)		(1,371)



Changes in assets and liabilities
Accounts receivable	(9,068)		(13,953)
Inventory	(1,366)		5,605
Prepaid expenses and other current assets	(992)		1,711
Accounts payable	(5,536)		(46,602)
Accrued expenses and other current liabilities	(2,113)		(7,094)
Deferred revenue	116		(287)
Operating lease liabilities	(1,347)		(1,438)
Other non-current assets and liabilities	113		(3,227)



Net cash provided by (used in) operating activities	(16,070)		(75,188)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(2,308)		(3,207)



Net cash provided by (used in) investing activities	(2,308)		(3,207)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facilities and term loans	15,000		277,322
Repayments of revolving credit facilities and term loans	—		(500)
Debt issuance costs paid	—		(3,798)






Surrender of stock to settle taxes on restricted stock awards	(100)		(213)


Net cash provided by (used in) financing activities	14,900		272,811
Effect of exchange rate changes on cash	(100)		(2)
Net change in cash and cash equivalents	(3,578)		194,414
Cash and cash equivalents balance, beginning of period	20,034		11,980
Cash and cash equivalents balance, end of period	$	16,456	$	206,394

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Equity (Deficit)

(Unaudited)


	Class A Common Stock			Class B Common Stock
(In thousands)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interest		Total Shareholders’ Equity
Balance at December 31, 2025	1,848	$	2	674	$	1	$	377,331	$	(329,965)	$	(274)	$	(1,092)	$	5,398	$	51,401
Net income (loss)	—	—		—	—		—		(5,466)		—		—		—		(5,466)
Equity-based compensation, net of income tax expense (benefit)	—	—		—	—		617		—		—		—		—		617
Conversion of Class B Common Stock	673	1		(674)	(1)		5,398		—		—		—		(5,398)		—

Other comprehensive income (loss)	—	—		—	—		—		—		(159)		—		—		(159)



Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(100)		—		(100)
Vested equity-based compensation	38	—		—	—		—		—		—		—		—		—
Balance at March 31, 2026	2,559	$	3	—	$	—	$	383,346	$	(335,431)	$	(433)	$	(1,192)	$	—	$	46,293

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Equity (Deficit)

(Unaudited)


	Class A Common Stock			Class B Common Stock
(In thousands)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interest		Total Shareholders’ Equity
Balance at December 31, 2024	1,470	$	1	827	$	1	$	363,691	$	(228,814)	$	(434)	$	(733)	$	59,645	$	193,357
Net income (loss)	—	—		—	—		—		(12,192)		—		—		(6,385)		(18,577)
Equity-based compensation, net of income tax expense (benefit)	—	—		—	—		368		—		—		—		(313)		55


Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(213)		—		(213)

Vested equity-based compensation and re-allocation of ownership percentage	10	—		—	—		(9)		—		—		—		9		—
Balance at March 31, 2025	1,480	$	1	827	$	1	$	364,050	$	(241,006)	$	(434)	$	(946)	$	52,956	$	174,622

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands)

(Unaudited)

NOTE 1 – Significant Accounting Policies

Included below are selected significant accounting policies. Refer to Note 2 - Significant Accounting Policies, within the annual consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”) for the full list of significant accounting policies.

Basis of Presentation

The unaudited consolidated financial statements contained herein have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the rules of the United States Securities and Exchange Commission (“SEC”). Accordingly, these unaudited consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented have been reflected. The unaudited consolidated financial statements include those of our wholly-owned and majority-owned subsidiaries and an entity consolidated under the variable interest entity model. Intercompany balances and transactions are eliminated in consolidation. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the 2025 Form 10-K. Certain prior period amounts have been conformed to the current period’s presentation.

Reverse Stock Split

On July 8, 2025, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of all issued and outstanding shares of the Company’s common stock at a ratio of 1-for-40. The reverse stock split did not change the par value or the authorized number of shares of the Company’s common stock. The Company’s condensed consolidated financial statements present the retroactive effect of the reverse stock split on the Company’s Class A and Class B common stock and per share amounts for all periods presented.

Corporate Simplification

On December 17, 2025, as part of the Corporate Simplification transactions, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Solo Stove Holdings, LLC (“Holdings”) and Solo Merger Sub LLC (“Merger Sub”), a subsidiary of Solo Brands, Inc. and SP SS Blocker Purchaser, LLC (“Blocker”), formed for the sole purpose of merging with and into Holdings. Pursuant to the Merger Agreement, effective January 1, 2026 (the “Effective Time”), Merger Sub merged with and into Holdings, with Holdings continuing as the surviving entity (the “Merger”) as a wholly owned subsidiary of Solo Brands, Inc., as described further in Note 11, Income Taxes and Note 12, Equity.

The weighted-average ownership interest in Holdings was 0.0% and 64.1% as of March 31, 2026 and 2025, respectively.

Tariffs

On February 20, 2026, the U.S. Supreme Court held in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (“IEEPA”) does not authorize a U.S. President to impose tariffs during peacetime national emergencies and that the challenge to the legality of the incremental tariffs was within the exclusive jurisdiction of the U.S. Court of International Trade (“CIT”), thus affirming a prior decision of the CIT that the U.S. President lacked authority to impose incremental tariffs. As a result, on February 20, 2026, the U.S. President issued an executive order stating that the incremental tariffs were no longer in effect and ending the collection of the incremental tariffs. However, the U.S. President then issued an additional executive order imposing tariffs pursuant to Section 122 of the Trade Act of 1974 for 150 days, effective February 24, 2026. We continue to monitor the changing tariff and trade restrictions and are evaluating the potential impacts of these decisions for 2026 and any potential impacts on consumer demand and pricing expectations. We filed a lawsuit in the CIT challenging the legality of incremental tariffs and are seeking to recover the approximately $10 million in incremental tariffs that we paid in 2025 and 2026.

On April 20, 2026, the U.S. government opened the online portal for claiming refunds on IEEPA tariffs and, as of May 1, 2026, the Company has completed filing refund claims. All but a minor number of claims have been accepted by the Customs Border Protection agency and certain refunds have advanced to the United States Department of Treasury for processing. The Company plans to follow gain contingency accounting under ASC 450-30, Gain Contingencies, for recognition.

As of March 31, 2026, the Company had not received any refund payments, and uncertainty remains regarding timing, amount, and ultimate receipt of any refunds. Accordingly, no gain has been recognized in the unaudited consolidated financial statements for the three months ended March 31, 2026.

Going Concern

The unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

On June 13, 2025, the Company entered into Amendment No. 4 to the Credit Agreement and Limited Waiver and Amendment No. 1 to Security Agreement (the “2025 Credit Agreement”), which amended the credit agreement dated May 12, 2021 (as amended, the “Credit Agreement”) by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto. The 2025 Credit Agreement restructured the Company’s outstanding revolving and term loans, extended certain maturities, reduced near-term cash interest requirements through the ability to make certain interest payments in-kind and deferred compliance with certain financial covenants for a defined period of time.

Beginning with the quarter ending September 30, 2026, the Company will be required to comply with additional financial covenants under the 2025 Credit Agreement, including leverage, fixed charge coverage and minimum liquidity requirements, as described further in Note 10, Debt, Net.

In evaluating its ability to continue as a going concern for the twelve months following the issuance of these unaudited consolidated financial statements, management projects compliance with these financial covenants. Conditions and events, including the risk of operating performance variability could affect future covenant compliance, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance of these unaudited consolidated financial statements. Management developed plans intended to mitigate these conditions, including optimization of the Company's distribution and fulfillment network, reductions in marketing spend and other fixed operating costs. These plans alleviate the substantial doubt about the Company’s ability to continue as a going concern for at least the twelve months following the issuance of these consolidated financial statements. Furthermore, as disclosed within Tariffs above, all but a minor number of the Company's IEEPA claims for refunds have been accepted by U.S. Customs and Border Protection, which, upon realization, are expected to provide additional financial flexibility which will further support the Company’s ability to continue as a going concern. Such refunds will only be recognized in the financial statements when they are realized.

If the Company does not achieve the expected benefits from these operational initiatives or if operating results or liquidity deteriorate, the Company could be required to seek additional capital through equity or debt financings or other sources. There can be no assurance that such financing would be available on acceptable terms, or at all.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates and assumptions about future events and their effects cannot be made with certainty. Estimates may change as new events occur when additional information becomes available and if our operating environment changes. Actual results could differ from our estimates.

Concentrations of Credit Risk

The Company extends trade credit to its retail customers on terms that generally are practiced in the industry. The Company periodically performs credit analyses and monitors the financial condition of its customers to reduce credit risk. The Company performs ongoing credit evaluations of its customers, but generally does not require collateral to support accounts receivable. Accounts receivable mostly consist of amounts due from our business-to-business customers.

As of March 31, 2026, Costco represented 23.7% of total outstanding accounts receivable. As of December 31, 2025, Dick’s Sporting Goods and Spreetail represented 28.0% and 12.7%, respectively, of total outstanding accounts receivable. There are no other significant concentrations of receivables that represent a significant credit risk.

Debt Issuance Costs

Debt issuance costs related to term debt are recorded as a direct deduction from the carrying value of the associated debt liability on the consolidated balance sheets. The costs are amortized using the effective interest rate method over the term of the related debt. Debt issuance costs related to revolving loans are recorded within other non-current assets and amortized straight-line over the term of the related debt. Amortization of debt issuance costs are recorded as a component of interest expense, net on the consolidated statements of operations and comprehensive income (loss). Costs incurred in connection with an expected refinancing, restructuring or debt issuance are capitalized and recorded within other non-current assets.

Restructuring, Contract Termination and Impairment Charges

Restructuring, contract termination and impairment charges are primarily comprised of severance and employee-related benefits, contract termination fees and impairment charges. We recognize employee severance costs as a liability at estimated fair value, at the time of communication to affected employees, unless future service is required, in which case the costs are recognized ratably over the future service period. Contract termination fees include costs incurred to terminate a contract and the impacts to related assets or liabilities associated with these contracts. Asset impairment charges include impairments of long-lived assets, including intangible assets and goodwill, as addressed in Note 2 - Significant Accounting Policies, in the 2025 Form 10-K. Restructuring, contract termination and asset impairment activities are recognized when they are incurred and included in restructuring, contract termination and impairment charges on the unaudited consolidated statements of operations and comprehensive income (loss).

Commitments and Contingencies

From time to time, the Company is involved in various legal proceedings. While the Company intends to prosecute and defend any lawsuit vigorously, the Company presently believes that the ultimate outcome of any currently pending legal proceeding will not have any material adverse

effect on its financial position, cash flows, or results of operations. However, litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, which could impact the Company’s business and the results of operations for the period in which the ruling occurs or future periods. Based on the information available, the Company evaluates the likelihood of potential outcomes. The Company records the appropriate liability when the amount is deemed probable and reasonably estimable. In addition, the Company does not accrue for estimated legal fees and other directly related costs as they are expensed as incurred. The unaudited consolidated balance sheets do not include a liability for any potential obligations as of March 31, 2026 or December 31, 2025.

Recently Issued Accounting Pronouncements - Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), that requires the disclosure of certain amounts included in certain expense captions on the face of the income statement. The FASB subsequently issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) to clarify the effective date of ASU 2024-03. The guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements, but will require certain additional disclosures. The Company does not expect to early adopt at this time.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes the accounting for internal-use software by removing all references to prescriptive and sequential software development stages. ASU 2025-06 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. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. The Company does not expect to early adopt at this time.

NOTE 2 - Restructuring, Contract Termination and Impairment Charges

2026 Restructuring Activity

During the three months ended March 31, 2026, the Company executed a reduction in force (“RIF”) of management and non-management personnel in an effort to align headcount with the operational needs of the business.

2025 Restructuring Activity

In 2025, management, along with our Board of Directors, engaged strategic consulting firms to assist with improving our financial results. This operational improvement involved the engagement of restructuring, legal and investment banking consultants to perform financial planning, forecasting and project management activities. Certain of these strategic consulting firms assisted and continue to assist in developing operational plans for the near- and long-term, as well as identifying cost saving initiatives to reduce our operational expenses and aid in the development of enhanced internal reporting to deliver timely insight to management.

The cost saving initiatives identified and executed upon in the three months ended March 31, 2025 were designed to reduce operational expenditures over the long-term. The key cost saving initiatives and operational planning activities undertaken during the three months ended March 31, 2025 were as follows:

•RIF of management and non-management personnel in an effort to align headcount with the operational needs of the business resulting in a moderate decline in related expenses in the short term, with the significance of the savings anticipated to be recognized in future periods;

•closure of two distribution centers to reduce fixed costs in the short term and in future periods, as well as eliminate unnecessary capacity; and

•reduction in marketing spend and promotional activity within the Solo Stove segment to better align product pricing with our retail partners.

While these activities are intended to provide future benefit to the Company, most of these activities required up-front cash outlays. In order to fund these cash outlays, the Company used cash from operations and borrowings under the prior revolving credit facility. The following table outlines the cash outlays and the period in which they occurred.

The components of the restructuring, contract termination and impairment charges are as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Restructuring charges	$	305	$	5,208
Impairment charges	—		471
Contract termination	—		160
Total restructuring, contract termination and impairment charges	$	305	$	5,839

The Company expects to continue to evaluate and identify additional cost-saving initiatives that it may execute in the near term, with potential expenses to be incurred at the onset of said initiative that will be reflected within restructuring, contract termination and/or impairment charges. As of March 31, 2026, the Company is unable to estimate the potential upfront costs of these future cost saving initiatives, due to their preliminary nature.

NOTE 3 – Revenue

The Company primarily engages in direct-to-consumer transactions, which are comprised of product sales directly from the Company’s website, and business-to-business transactions, or retail, which are comprised of product sales to retailers, including where possession of the Company’s products is taken and sold by the retailer in-store or online.

The following table disaggregates net sales by channel (in thousands):


	Three Months Ended March 31,
		2026		2025

Direct-to-consumer		$	24,067	$	33,800



Retail		38,814		43,452



Net sales		$	62,881	$	77,252

The following table disaggregates net sales by product (in thousands):


	Three Months Ended March 31,
		2026		2025
Fire pits, stoves and accessories		$	16,026	$	26,128
Apparel		36,675		42,689
Other		10,180		8,435
Net sales		$	62,881	$	77,252

The following table disaggregates net sales by geographic region (in thousands):


	Three Months Ended March 31,
		2026		2025
United States		$	60,742	$	71,692
International		2,139		5,560
Net sales		$	62,881	$	77,252

NOTE 4 – Inventory

Inventory consisted of the following (in thousands):


	March 31, 2026		December 31, 2025
Finished products on hand, net of inventory obsolescence reserve of $3.0 million and $3.5 million as of March 31, 2026 and December 31, 2025, respectively	$	76,531	$	69,193
Finished products in transit	4,745		10,783
Raw materials	1,608		1,672


Inventory	$	82,884	$	81,648

NOTE 5 – Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	March 31, 2026		December 31, 2025
Inventory deposits	$	2,574	$	2,341
Tax receivables	1,578		1,641
Software	1,774		1,083
Insurance	572		630
Other	3,251		3,072
Prepaid expenses and other current assets	$	9,749	$	8,767

NOTE 6 – Property and Equipment, Net

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


	March 31, 2026		December 31, 2025
Machinery	$	15,018	$	14,261
Leasehold improvements	10,890		10,892
Buildings	568		568
Furniture and fixtures	5,172		4,976
Software and website development	1,517		1,428
Computer and other equipment	1,117		1,118
Land	94		94
Construction in progress	347