Zevia PBC

Previous wording

We are a better-for-you beverage company that develops, markets, sells, and distributes naturally delicious, zero sugar beverages. We are a Delaware public benefit corporation and have been designated as a “Certified B Corporation,” and are focused on addressing the global health challenges resulting from excess sugar consumption by offering a broad portfolio of zero sugar, zero calorie, naturally sweetened beverages. All Zevia® beverages are made with a handful of simple, plant-based ingredients, contain no artificial sweeteners, and are Non-GMO Project verified, gluten-free, Kosher, and vegan, and include a variety of flavors across Soda, Energy Drinks, and Tea drinks. Our products are distributed and sold principally across the U.S. and Canada through a wide-ranging network of major retailers in the grocery, drug, warehouse club, mass, natural, convenience and e-commerce channels and in natural product stores and specialty outlets. The Company’s products are manufactured and maintained at third-party beverage production and warehousing facilities located in both the U.S. and Canada.

Current wording

We are a better-for-you beverage company that develops, markets, sells, and distributes naturally delicious, zero sugar beverages. We are a Delaware public benefit corporation and have been designated as a “Certified B Corporation” by B Lab, an independent non-profit organization. We are focused on addressing the global health challenges resulting from excess sugar consumption by offering a broad portfolio of zero sugar, zero calorie, naturally sweetened beverages. All Zevia® beverages are made with a handful of simple ingredients, contain no artificial sweeteners, and are Non-GMO Project verified, gluten-free, Kosher and vegan, and include a variety of flavors across Soda and Energy Drinks.

Previous wording

Key Events During the Nine Months Ended September 30, 2025

Current wording

Key Events During the First Quarter of 2026

Previous wording

In the second quarter of 2024, we began executing a multi-year, broad-based Productivity Initiative designed to realign our cost structure in order to accelerate our route-to-market evolution and continue to build the Zevia® Brand. This Productivity Initiative is designed to focus on our most critical initiatives including driving growth and innovation in our highest margin carbonated better-for-you beverages, re-align our cost structure to support greater investments in the Zevia® Brand and improve operational excellence while simplifying processes across the organization.

Current wording

In the second quarter of 2024, we began executing a multi-year, broad-based Productivity Initiative designed to realign our cost structure in order to accelerate our route-to-market evolution and continue to build the Zevia® Brand. This Productivity Initiative was designed to focus on our most critical initiatives including driving growth and innovation in our highest margin carbonated better-for-you beverages, re-align our cost structure to support greater investments in the Zevia® Brand and improve operational excellence while simplifying processes across the organization. The Productivity Initiative was expected to result in estimated annualized benefits of approximately $20.0 million, and we began seeing these benefits in the second half of 2024 and expect the savings to continue to be realized through 2026. These benefits included reduction in costs of goods sold and reduction in operating expenses. We have reinvested the majority of these costs savings thus far into brand marketing and promotional activity to drive future growth. Looking forward, we intend to balance reinvesting savings to help drive revenue growth with our plans for achieving profitability. Restructuring charges related to the Productivity Initiative were completed as of December 31, 2025.

Previous wording

We continue to monitor macroeconomic trends and uncertainties such as key ingredient inflation, the shutdown of the U.S. government, the effects of tariffs, and the potential imposition of modified or additional tariffs, which may adversely affect our net sales and profitability. As a result of the rapid changes in global trade policies, including tariffs, and potential tariff modifications or the imposition of tariffs, export controls or other retaliatory actions by other countries, we have experienced and anticipate continuing to experience increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty. This has also created a complex and challenging retail environment for us as consumers reduce discretionary spending. A decline in consumer spending may have an adverse effect on our revenues, margins, and operating results. We, along with our competitors, have increased pricing on a number of products in response to widespread inflation, which could be exacerbated as a result of the tariffs. These pricing increases may result in future reductions in volume.

Current wording

We continue to monitor macroeconomic trends and uncertainties such as key ingredient inflation, any potential shutdown of the U.S. government, the ongoing conflicts in the Middle East, the effects of tariffs, and the potential imposition of modified or additional tariffs, which may adversely affect our net sales and profitability. As a result of the rapid changes in global trade policies, including tariffs, and potential tariff modifications or the imposition of tariffs, export controls or other retaliatory actions by other countries, we have experienced and anticipate continuing to experience increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty. This has also created a complex and challenging retail environment for us as consumers reduce discretionary spending. A decline in consumer spending may have an adverse effect on our revenues, margins, and operating results. We, along with our competitors, have increased pricing on a number of products in response to widespread inflation, which could be exacerbated as a result of the tariffs. These pricing increases may result in future reductions in volume.

Previous wording

The following summarizes the components of our results of operations for the three and nine months ended September 30, 2025 and 2024, respectively.

Current wording

The following summarizes the components of our results of operations for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

We generate net sales from the sales of our products, including Soda, Energy Drinks, and Tea drinks, to our customers, which include grocery distributors, national retailers, convenience retailers, natural products retailers, warehouse club retailers and retailers with e-commerce channels, in the U.S. and Canada.

Current wording

We generate net sales from the sales of our products, including Soda, Energy Drinks, and Tea drinks, to our customers, which include grocery distributors, national retailers, convenience retailers, natural products retailers, warehouse club retailers and retailers with e-commerce channels, in the U.S. and Canada. In 2026, we will discontinue selling the Tea product line.

Previous wording

We expect our future growth to be driven by a combination of new distribution, increased organic sales from existing outlets, package and product innovation, and continued pricing strength; however, sales levels in any given period may continue to be impacted by seasonality, increased level of competition, and customers’ efforts to manage inventory.

Current wording

We expect our future growth to be driven by a combination of new distribution, increased organic sales from existing outlets, package and product innovation, and continued pricing strength; however, sales levels in any given period may continue to be impacted by seasonality, increased level of competition, customers’ efforts to manage inventory, and discontinuation of products/packages such as the decision to discontinue Tea in 2026.

Previous wording

Our cost of goods sold is subject to price fluctuations in the marketplace, particularly in the price of aluminum and other raw materials, as well as in the cost of production, packaging, in-bound freight and logistics. Due to the recent implementation of tariffs, we began to see an increase in our cost of goods sold during the three months ended June 30, 2025, and expect to continue to see an increase in our cost of goods going forward.

Current wording

Our cost of goods sold is subject to price fluctuations in the marketplace, particularly in the price of aluminum and other raw materials, as well as in the cost of production, packaging, in-bound freight and logistics. Due to the implementation of tariffs, we saw an increase in our cost of goods sold throughout 2025 and in the first quarter of 2026, and expect a continued increase in our cost of goods going forward.

Previous wording

Gross profit consists of our net sales less costs of goods sold. Our gross profit and gross margin are affected by the mix of distribution channels of our net sales in each period, as well as the level of discounts and promotions offered during the period. Gross profit may be favorably impacted by leveraging our asset-light business model and through increased distribution direct to retailers, the increased scale of our business, our Productivity Initiative, and our continued focus on cost and efficiency improvements.

Current wording

Gross profit consists of our net sales less cost of goods sold. Our gross profit and gross margin are affected by the mix of distribution channels of our net sales in each period, as well as the level of discounts and promotions offered during the period. Gross profit may be favorably impacted by leveraging our asset-light business model and through increased distribution direct to retailers, the increased scale of our business, our Productivity Initiative, and our continued focus on cost and efficiency improvements.

Previous wording

Our selling expenses are expected to decrease as a percentage of sales over time as a result of our Productivity Initiative and our continued focus on cost improvements in our supply chain. Our selling expenses are expected to decrease from the prior year in the short-term, largely due the Productivity Initiative.

Current wording

Our selling expenses are expected to increase in the short-term due to the effect of the ongoing conflicts in the Middle East. Excluding the effect of conflicts in the Middle East, our selling expenses are expected to decrease as a percentage of sales over time as a result of our Productivity Initiative and our continued focus on cost improvements in our supply chain.

Previous wording

Marketing expenses are expected to increase as we invest in brand awareness, which are expected to be partially funded by the Productivity Initiative. We significantly increased our investment in marketing in the first nine months of 2025, in order to help build our brand, with a focus on driving trial and customer conversions. We expect marketing investments in the fourth quarter of 2025 to decline compared to the fourth quarter of 2024 due to an opportunistic marketing investment made in the prior year.

Current wording

Marketing expenses are expected to increase as we invest in brand awareness, which are expected to be partially funded by the Productivity Initiative. We significantly increased our investment in marketing in 2025, in order to help build our brand, with a focus on driving awareness and customer conversations, and we expect this increased investment to continue throughout 2026.

Previous wording

General and administrative expenses include all salary and other personnel expenses (other than equity-based compensation expense) for our employees, including employees related to management, marketing, sales, product development, quality control, accounting, information technology and other functions. Our ongoing general and administrative expenses are expected to remain relatively flat as a percentage of net sales over time, but may fluctuate in any given quarter as a result of timing and amount of variable compensation expense.

Current wording

General and administrative expenses include all salary and other personnel expenses (other than equity-based compensation expense) for our employees, including employees related to management, marketing, sales, product development, quality control, accounting, information technology and other functions and legal costs. Our ongoing general and administrative expenses are expected to remain relatively flat as a percentage of net sales over time, but may fluctuate in any given quarter as a result of timing and amount of variable compensation expense.

Previous wording

Equity-based compensation expense consists of the recorded expense of equity-based compensation for our employees and, if any, for certain consultants and service providers who are non-employees. We record equity-based compensation expense for employee grants using grant date fair value for RSUs or a Black-Scholes valuation model to calculate the fair value of stock options by date granted. Equity-based compensation cost for RSU awards is measured based on the closing fair market value of the Zevia LLC Class B unit or the Zevia PBC Class A common stock, as applicable, on the date of grant. Our equity-based compensation expense is expected to remain relatively consistent in absolute dollars but decline as a percentage of net sales over time.

Current wording

Equity-based compensation expense consists of the recorded expense of equity-based compensation for our employees and, if any, for certain consultants and service providers who are non-employees. We record equity-based compensation expense for employee grants using grant date fair value for RSUs and PSUs or a Black-Scholes valuation model to calculate the fair value of stock options by date granted. Equity-based compensation cost for RSU and PSU awards is measured based on the closing fair market value of the Zevia PBC Class A common stock, on the date of grant. Our equity-based compensation expense is expected to remain relatively consistent in absolute dollars but decline as a percentage of net sales over time.

Previous wording

Restructuring expenses include employee severance and benefit costs to terminate a specified number of employees as well as costs for restructuring consulting services, impairment loss of certain assets, contract termination costs and other related charges designed to reduce costs and improve efficiency while continuing to invest in our brand and related initiatives. Restructuring charges related to the Productivity Initiative were complete as of September 30, 2025.

Current wording

Restructuring expenses include employee severance and benefit costs to terminate a specified number of employees as well as costs for restructuring consulting services, impairment loss of certain assets, contract termination costs and other related charges designed to reduce costs and improve efficiency while continuing to invest in our brand and related initiatives.

Previous wording

Other (expense) income, net consists primarily of interest income (expense), and foreign currency (loss) gains.

Current wording

Other income, net consists primarily of interest income (expense), and foreign currency (loss) gains.

Previous wording

Net sales were $40.8 million for the three months ended September 30, 2025 as compared to $36.4 million for the three months ended September 30, 2024. Equivalized cases sold were 3.3 million during the three months ended September 30, 2025 as compared to 2.9 million during the three months ended September 30, 2024. The increase in net sales was primarily due to a 12.6% increase in the number of equivalized cases sold, which resulted in $4.6 million higher net sales largely the result of expanded distribution at one customer in the mass channel and one customer in the club channel, and lower allowance for incentives and discounts of $0.5 million, partially offset by pricing declines as a result of channel mix of $0.6 million. We define an equivalized case as a 288 fluid ounce case.

Current wording

Net sales were $46.1 million for the three months ended March 31, 2026 as compared to $38.0 million for the three months ended March 31, 2025. Equivalized cases sold were 3.6 million during the three months ended March 31, 2026 as compared to 3.0 million during the three months ended March 31, 2025. The increase in net sales was primarily due to a 20.4% increase in the number of equivalized cases sold, which resulted in $7.8 million higher net sales, which was largely the result of expanded distribution at one customer in the club channel as well as higher volumes in the mass and e-commerce channels, and lower allowance for incentives and discounts of $0.7 million, partially offset by pricing declines as a result of channel mix of $0.4 million. We define an equivalized case as a 288 fluid ounce case.

Previous wording

Cost of goods sold was $22.2 million for the three months ended September 30, 2025 as compared to $18.5 million for the three months ended September 30, 2024. The increase of $3.7 million, or 20.0%, was largely due to increased volumes which resulted in $2.4 million of higher costs of goods sold, as well as higher write-downs related to excess and obsolete inventory of $1.2 million mainly related to new packaging design and reduction in reserve estimate in prior year, partially offset by unfavorable unit costs of $0.1 million driven by tariffs, which was slightly offset by improvements in unit costs related to the Productivity Initiative.

Current wording

Cost of goods sold was $23.8 million for the three months ended March 31, 2026 as compared to $19.0 million for the three months ended March 31, 2025. The increase of $4.8 million, or 25.3%, was largely due to increased volumes which resulted in $3.9 million of higher costs of goods sold, unfavorable unit costs of $0.8 million driven by tariffs, which was slightly offset by improvements in unit costs related to the Productivity Initiative, and higher write-downs related to excess and obsolete inventory of $0.2 million, mainly related to new packaging design.

Previous wording

Gross profit was $18.6 million for the three months ended September 30, 2025 as compared to $17.9 million for the three months ended September 30, 2024. The increase in gross profit of $0.8 million, or 4.3%, was primarily due to higher volumes and lower spend on promotional activity, partially offset by higher inventory write-downs, unfavorable unit costs, and channel mix.

Current wording

Gross profit was $22.3 million for the three months ended March 31, 2026 as compared to $19.0 million for the three months ended March 31, 2025. The increase in gross profit of $3.3 million, or 17.1%, was primarily due to higher volumes and lower spend on promotional activity, partially offset by unfavorable unit costs, higher inventory write-downs, and channel mix.

Previous wording

Gross margin for the three months ended September 30, 2025 decreased to 45.6% from 49.1% in the prior-year period. The decrease was primarily due to higher inventory write-downs, unfavorable unit costs, and channel mix, partially offset by lower spend on promotional activity.

Current wording

Gross margin for the three months ended March 31, 2026 decreased to 48.4% from 50.1% in the prior-year period. The decrease was primarily due to unfavorable unit costs, higher inventory write-downs, and channel mix, partially offset by lower spend on promotional activity.

Previous wording

Selling and marketing expenses were $12.7 million for the three months ended September 30, 2025 as compared to $12.0 million for the three months ended September 30, 2024. Marketing expenses were $5.0 million for the three months ended September 30, 2025 as compared to $3.5 million for the three months ended September 30, 2024, an increase of $1.5 million, or 40.8%. Selling expenses were $7.7 million for the three months ended September 30, 2025 as compared to $8.5 million for the three months ended September 30, 2024, a decrease of $0.7 million, or 8.9%.

Current wording

Selling and marketing expenses were $14.5 million for the three months ended March 31, 2026 as compared to $15.3 million for the three months ended March 31, 2025. Marketing expenses were $5.1 million for the three months ended March 31, 2026 as compared to $6.2 million for the three months ended March 31, 2025, a decrease of $1.1 million, or 17.7%. Selling expenses were $9.4 million for the three months ended March 31, 2026 as compared to $9.1 million for the three months ended March 31, 2025, an increase of $0.3 million, or 3.3%.

Previous wording

The decrease in selling expenses of $0.8 million was primarily due to decreases in repackaging costs of $0.6 million due to automation of certain processes, warehousing costs of $0.1 million and freight transfer costs of $0.1 million largely driven by the Productivity Initiative and lower inventory levels.

Current wording

The increase in selling expenses of $0.3 million was primarily due to higher freight and warehousing costs of $1.4 million, driven by increased volumes, partially offset by decreases in repackaging costs of $0.5 million due to the automation of certain processes, and lower warehousing costs of $0.6 million, largely driven by the Productivity Initiative and lower inventory levels.

Previous wording

Equity-based compensation expenses were $1.0 million for the three months ended September 30, 2025 as compared to $1.0 million for the three months ended September 30, 2024, primarily related to outstanding equity-based awards being recognized over the remaining service periods of the awards. The decrease of $0.1 million was primarily driven by a $0.3 million decrease related to the accelerated method of expense recognition on certain equity awards issued in connection with the Company’s IPO in 2021 in which the service period was completed during the first quarter of 2025, partially offset by expense related to newly issued equity awards.

Current wording

Equity-based compensation expenses were $0.9 million for the three months ended March 31, 2026 as compared to $0.7 million for the three months ended March 31, 2025, primarily related to outstanding equity-based awards being recognized over the remaining service periods of the awards. The increase of $0.2 million was primarily driven by forfeitures during the three months ended March 31, 2025 related to the reduction in workforce and new equity awards during the three months ended March 31, 2026.

Previous wording

Restructuring expenses were zero for the three months ended September 30, 2025, as compared to $0.1 million for the three months ended September 30, 2024. The restructuring expenses in the prior year primarily include costs to exit two third-party warehouse and distribution facilities.

Current wording

Restructuring expenses were zero for the three months ended March 31, 2026, as compared to $2.1 million for the three months ended March 31, 2025. The restructuring expenses in the prior year period primarily included employee related severance costs.

Previous wording

As of September 30, 2025, we had $26.0 million in cash and cash equivalents. We believe that our cash and cash equivalents as of September 30, 2025, together with our operating activities and available borrowings under the Secured Revolving Line of Credit (as defined below), will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments beyond the next 12 months.

Current wording

As of March 31, 2026, we had $26.6 million in cash and cash equivalents. We believe that our cash and cash equivalents as of March 31, 2026, together with our operating activities and available borrowings under the Secured Revolving Line of Credit (as defined below), will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments beyond the next 12 months.

Previous wording

On August 12, 2025, we and our wholly-owned subsidiary, Zevia LLC, entered into an Equity Distribution Agreement (the “Agreement”) with Piper Sandler & Co. as sales agent (the “Agent”), pursuant to which we may sell from time to time through the Agent, shares of Class A common stock, par value $0.001 (the “Common Stock”), having an aggregate gross sale price of up to $20 million (the “Offering”). Sales of Common Stock, if any, under the Agreement may be made in any transactions that are deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. In addition, with our prior consent and subject to the terms it may establish, the Agent may also sell the Common Stock by any other method permitted by law, including privately negotiated transactions. Under the Agreement, we will pay the Agent a commission equal to 3.0% of the gross sales price of the Common Stock sold in the Offering. The Agent has agreed to use its commercially reasonable efforts to sell the shares of common stock in the Offering, subject to the terms of the Agreement. During the three months ended September 30, 2025, we elected not to issue shares under this Agreement.

Current wording

On August 12, 2025, we and our wholly-owned subsidiary, Zevia LLC, entered into an Equity Distribution Agreement (the “Agreement”) with Piper Sandler & Co. as sales agent (the “Agent”), pursuant to which we may sell from time to time through the Agent, shares of Class A common stock, par value $0.001 (the “Common Stock”), having an aggregate gross sale price of up to $20 million (the “Offering”). Sales of Common Stock, if any, under the Agreement may be made in any transactions that are deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. In addition, with our prior consent and subject to the terms it may establish, the Agent may also sell the Common Stock by any other method permitted by law, including privately negotiated transactions. Under the Agreement, we will pay the Agent a commission equal to 3.0% of the gross sales price of the Common Stock sold in the Offering. The Agent has agreed to use its commercially reasonable efforts to sell the shares of common stock in the Offering, subject to the terms of the Agreement. During the period from August 12, 2025 to March 31, 2026, we elected not to issue shares under this Agreement.

Previous wording

Future capital requirements will depend on many factors, including our rate of revenue growth, gross margin and the level of expenditures in all areas of the Company. In future years, we may experience an increase in operating and capital expenditures from time to time, as needed, as we expand business activities. To the extent that existing capital resources and sales growth are not sufficient to fund future activities, we may seek alternative financing through additional equity or debt financing transactions. Additional funds may not be available on terms favorable to us or at all. Also, we will continue to assess our liquidity needs in light of current and future global health emergencies, inflationary pressures, tariffs as well as changes in tariff or U.S. foreign trade policies, relatively high interest rates, volatility in the financial markets, recession fears, shutdown of the U.S. government, current and future global hostilities, and political tensions between the U.S. and China that may continue to disrupt and impact the global and national economies and global financial markets. If any disruption continues into the future, we may not be able to access the financial markets and could experience an inability to access additional capital, which could negatively affect our operations in the future. Failure to raise additional capital, if and when needed, could have a material adverse effect on our financial position, results of operations, and cash flows.

Current wording

Future capital requirements will depend on many factors, including our rate of revenue growth, gross margin and the level of expenditures in all areas of the Company. In future years, we may experience an increase in operating and capital expenditures from time to time, as needed, as we expand business activities. To the extent that existing capital resources and sales growth are not sufficient to fund future activities, we may seek alternative financing through additional equity or debt financing transactions. Additional funds may not be available on terms favorable to us or at all. Also, we will continue to assess our liquidity needs in light of current and future global health emergencies, inflationary pressures, tariffs as well as changes in tariff or U.S. foreign trade policies, relatively high interest rates, volatility in the financial markets, recession fears, financial institution instability, any potential shutdown of the U.S. government, current and future global hostilities, including the ongoing conflicts in the Middle East, and political tensions between the U.S. and China that may continue to disrupt and impact the global and national economies and global financial markets. If any disruption continues into the future, we may not be able to access the financial markets and could experience an inability to access additional capital, which could negatively affect our operations in the future. Failure to raise additional capital, if and when needed, could have a material adverse effect on our financial position, results of operations, and cash flows.

Previous wording

In connection with the IPO and the Reorganization Transactions in July 2021, the Direct Zevia Stockholders and certain continuing members of Zevia LLC received the right to receive future payments pursuant to the TRA. The amount payable under the TRA will be based on an annual calculation of the reduction in our U.S. federal, state and local taxes resulting from the utilization of certain pre-IPO tax attributes and tax benefits resulting from sales and exchanges by continuing members of Zevia LLC. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement” included in the prospectus dated July 21, 2021 and filed with the SEC on July 23, 2021. We expect that the payments that we may be required to make under the TRA may be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we expect that the reduction in tax payments for us associated with the federal, state and local tax benefits described above would aggregate to approximately $68.9 million through 2040. Under such scenario we would be required to pay the Direct Zevia Stockholders and certain continuing members of Zevia LLC 85% of such amount, or $58.6 million, through 2040.

Current wording

In connection with the IPO and the Reorganization Transactions in July 2021, the Direct Zevia Stockholders and certain continuing members of Zevia LLC received the right to receive future payments pursuant to the TRA. The amount payable under the TRA will be based on an annual calculation of the reduction in our U.S. federal, state and local taxes resulting from the utilization of certain pre-IPO tax attributes and tax benefits resulting from sales and exchanges by continuing members of Zevia LLC. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement” included in the prospectus dated July 21, 2021 and filed with the SEC on July 23, 2021. We expect that the payments that we may be required to make under the TRA may be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we expect that the reduction in tax payments for us associated with the federal, state and local tax benefits described above would aggregate to approximately $69.6 million through 2041. Under such scenario we would be required to pay the Direct Zevia Stockholders and certain continuing members of Zevia LLC 85% of such amount, or $59.2 million, through 2041.

Previous wording

Net cash used in operating activities of $4.2 million for the nine months ended September 30, 2025 was primarily driven by a net loss of $9.9 million, partially offset by non-cash expenses of $3.8 million primarily related to equity-based compensation and depreciation and amortization expense, and a net increase in cash related to changes in operating assets and liabilities of $1.8 million. Changes in cash flows related to operating assets and liabilities were primarily due to a decrease in inventories of $4.5 million due to decreased production of inventory as inventory levels are managed, partially offset by an increase in accounts receivable of $1.8 million largely due to the increase in net sales, a net decrease in accounts payable, accrued expenses and other current liabilities of $0.4 million due to timing of purchases and decreased production of inventory, and lower lease liability of $0.5 million.

Current wording

Net cash provided by operating activities of $1.6 million for the three months ended March 31, 2026 was primarily driven by a net increase in cash related to changes in operating assets and liabilities of $2.8 million and non-cash expenses of $1.2 million primarily related to equity-based compensation and depreciation and amortization expense, partially offset by net loss of $2.4 million. Changes in cash flows related to operating assets and liabilities were primarily due to a decrease in inventories of $5.2 million due to sales and decreased production of inventory as inventory levels are managed and decreased accounts receivable of $2.0 million driven by timing of collections, partially offset by a net decrease in accounts payable, accrued expenses and other current liabilities of $3.8 million due to timing of purchases and decreased production of inventory and increased prepaid expenses and other assets of $0.4 million driven by timing of payments.

Previous wording

Net cash used in operating activities of $1.0 million for the nine months ended September 30, 2024 was primarily driven by a net increase in cash related to changes in operating assets and liabilities of $12.4 million. Changes in cash flows related to operating assets and liabilities were primarily due to a decrease in inventories of $13.9 million due to decreased production of inventory as inventory levels are managed, decreased prepaid expenses and other assets of $2.4 million largely due to a decrease in prepaid deposits related to the sale of raw materials, and a decrease in accounts receivable of $1.1 million due to timing of payments, partially offset by a net decrease in accounts payable, accrued expenses and other current liabilities of $4.6 million due to timing of purchases and decreased production of inventory. These increases were partially offset by a decrease in cash due to a net loss of $17.0 million, partially offset by non-cash expenses of $5.6 million primarily related to equity-based compensation and depreciation and amortization expense.

Current wording

Net cash used in operating activities of $2.9 million for the three months ended March 31, 2025 was primarily driven by a net loss of $6.4 million, partially offset by non-cash expenses of $1.1 million primarily related to equity-based compensation and depreciation and amortization expense, and a net increase in cash related to changes in operating assets and liabilities of $2.3 million. Changes in cash flows related to operating assets and liabilities were primarily due to a decrease in accounts receivable of $2.0 million largely due to timing of payments and a decrease in inventories of $1.5 million due to decreased production of inventory as inventory levels are managed, partially offset by increased prepaid expenses and other assets of $0.9 million driven by timing of payments, and a net decrease in accounts payable, accrued expenses and other current liabilities of $0.3 million due to timing of purchases and decreased production of inventory.

Previous wording

Net cash used in investing activities of $0.2 million for the nine months ended September 30, 2025 was primarily due to purchases of software used in ongoing operations.

Current wording

Net cash used in investing activities of $0.3 million for the three months ended March 31, 2026 was primarily due to purchases of quality control equipment for use in ongoing operations.

Previous wording

Net cash used in investing activities of $0.2 million for the nine months ended September 30, 2024 was primarily due to purchases of computer equipment, marketing fixtures, and software used in ongoing operations.

Current wording

Net cash used in investing activities of less than $0.1 million for the three months ended March 31, 2025 was primarily due to purchases of computer equipment and quality control equipment for use in ongoing operations.

Previous wording

Net cash used in financing activities of $0.2 million for the nine months ended September 30, 2025 was primarily due to financing costs paid partially offset by proceeds from the exercise of stock options.

Current wording

Net cash used in financing activities of $0.1 million for the three months ended March 31, 2026 was primarily due to financing costs paid.

Previous wording

We calculate Adjusted EBITDA as net loss adjusted to exclude: (1) other income (expense), net, which includes interest (income) expense and foreign currency (gains) losses, (2) (benefit) provision for income taxes, (3) depreciation and amortization, (4) equity-based compensation, and (5) restructuring expenses. Also, Adjusted EBITDA may in the future be adjusted for amounts impacting net income related to the TRA liability and other infrequent and unusual transactions.

Current wording

We calculate Adjusted EBITDA as net loss adjusted to exclude: (1) other income (expense), net, which includes interest (income) expense and foreign currency (gains) losses, (2) (benefit) provision for income taxes, (3) depreciation and amortization, (4) equity-based compensation, (5) restructuring expenses, and (6) certain litigation expenses. Also, Adjusted EBITDA may in the future be adjusted for amounts impacting net income related to the TRA liability and other infrequent and unusual transactions.

Previous wording

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of Adjusted EBITDA include that (1) it does not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures, (3) it does not consider the impact of equity-based compensation expense, including the potential dilutive impact thereof, and (4) it does not reflect other non-operating expenses, including interest (income) expense, foreign currency (gains)/losses, and restructuring. In addition, our use of Adjusted EBITDA may not be comparable to similarly-titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net income (loss) and other results stated in accordance with U.S. GAAP.

Current wording

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of Adjusted EBITDA include that (1) it does not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures, (3) it does not consider the impact of equity-based compensation expense, including the potential dilutive impact thereof, (4) it does not reflect other non-operating expenses, including interest (income) expense, foreign currency (gains)/losses, and restructuring expenses, and (5) it does not reflect certain litigation expenses that we have determined (a) to arise outside of the ordinary course of business, (b) are not reflective of our ongoing operating activities, and (c) are infrequent or unusual based on considerations which we assess regularly, such as frequency of similar cases that have been brought to date, or that are expected to be brought within two years, the complexity of the case, the nature of the remedies sought, the counterparty involved and overall litigation strategy. In addition, our use of Adjusted EBITDA may not be comparable to similarly-titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net income (loss) and other results stated in accordance with U.S. GAAP.

Previous wording

Our leases generally consist of long-term operating leases, which are payable monthly and relate to our office space. For a further discussion on our debt and operating lease commitments as of September 30, 2025, see the sections above including Note 7,* Debt*, and Note 8,Leases, included in the accompanying unaudited condensed consolidated financial statements of this Quarterly Report.

Current wording

Our leases generally consist of long-term operating leases, which are payable monthly and relate to our office space. For further discussion on our debt and operating lease commitments as of March 31, 2026, see the sections above including Note 7,* Debt*, and Note 8,Leases, included in the accompanying unaudited condensed consolidated financial statements of this Quarterly Report.