Aterian, Inc.

Aterian, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited)

Aterian, Inc. (the "Company") is a consumer products company that predominantly operates through online retail channels such as Amazon, Walmart, and Target and its own direct to consumer websites. The Company operates its owned brands, which were either incubated or purchased, selling products in multiple categories, including home and kitchen appliances, kitchenware, air quality appliances, health and beauty products and essential oils.

On* July 17, 2026,the Company completed a strategic sale of substantially all of its marquee consumer brands pursuant to the Asset Purchase Agreement described below (the “Asset Sale”). As of June 30, 2026,*the assets and liabilities associated with the Asset Sale met the criteria for held-for-sale treatment and are presented as Assets Held for Sale and Liabilities Associated with Assets Held for Sale on the Condensed Consolidated Balance Sheets. Furthermore, the historical operating results and cash flows of these divested assets are classified as Discontinued Operations in the Condensed Consolidated Statements of Operations and cash flows for all periods presented. Following the Asset Sale, the Company's ongoing continuing operations consist primarily of its remaining legacy brands, including Vremi and Xtava.

Headquartered in New Jersey, the Company also maintains offices in China, the Philippines, and the United Kingdom.

Asset Purchase Agreement

On* July 17, 2026,the Company completed the sale of substantially all of its assets to Trademark Global, LLC ("Trademark Global"), pursuant to the Asset Purchase Agreement, dated as of April 27, 2026 (*the "Asset Purchase Agreement"). Pursuant to the Asset Purchase Agreement, Trademark Global acquired certain specified assets and liabilities of the Company, including, among other things, assets associated with the Company’s marquee consumer brands: Mueller Living, PurSteam, hOmeLabs, Squatty Potty, Healing Solutions, and Photo Paper Direct for $18.0 million in cash, subject to certain purchase price adjustments.

Securities Purchase Agreement

On* July 17, 2026,the Company completed its previously announced sale of preferred stock to David E. Lazar (“Lazar”), pursuant to that certain Securities Purchase Agreement, dated as of April 27, 2026 (the “Securities Purchase Agreement”). Pursuant to the Securities Purchase Agreement, Lazar purchased from the Company (a)1,750,000 shares of Series AA Convertible Non-Redeemable Preferred Stock, par value $0.0001 per share, of the Company (the “Series AA Preferred Stock” and such purchased shares, the “Series AA Preferred Shares”), the closing of which occurred on April 27, 2026 (the “Initial SPA Closing”), and (b)1,750,000 shares of Series AAA Convertible Non-Redeemable Preferred Stock, par value $0.0001 per share, of the Company (the “Series AAA Preferred Stock” and together with the Series AA Preferred Stock, the “Preferred Stock” and such purchased shares, the “Series AAA Preferred Shares” and together with the Series AA Preferred Shares, the “Purchased Shares”), the closing of which occurred on July 17, 2026 (the “Second SPA Closing”), in each case at a purchase price of $2.00 per share of Preferred Stock for aggregate gross proceeds of $7.0 million, subject to the terms and conditions of the Securities Purchase Agreement (the “Stock Sale,” and together with the Asset Sale, the “Aterian Transactions”). As the Company received the requisite approvals at the Special Meeting (as defined below), each (i) Series AA Preferred Share maybe converted into 7.7 shares of the Company's common stock, par value $0.0001 per share (the "common stock"), which number is based on a conversion price of $0.25974, as determined in accordance with the terms of the Securities Purchase Agreement, and (ii) Series AAA Preferred Share may*be converted into 135.1 shares of common stock, which number is based on a conversion price of $0.0148, as determined in accordance with the terms of the Securities Purchase Agreement.

9

Liquidity and Going Concern

In accordance with Accounting Standards Codification205-40, Presentation of Financial Statements - Going Concern, management evaluated whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern withinone year after the date these Condensed Consolidated Financial Statements are issued.

Since inception, the Company has incurred significant losses and used cash flows from operations to fund its enterprise. To preserve liquidity, management implemented fixed cost reduction plans in* May 2025and January 2026.*However, these actions were insufficient to fully offset macroeconomic pressures, such as tariffs, geopolitical instabilities, rising costs for raw materials and shipping, higher marketplace fees, and reduced consumer spending, which continued to negatively impact operating results and cash flows.

On* April 27, 2026,the Company entered into a series of definitive agreements (the "Aterian Transactions"), to restructure its operations and capital position. These agreements included the Asset Purchase Agreement with Trademark Global to sell marquee brands, including Mueller Living, PurSteam, hOmeLabs, Squatty Potty, Healing Solutions, and Photo Paper Direct, for $18.0 million in cash, subject to purchase price adjustments, and the Securities Purchase Agreement with Lazar for the issuance of Series AA Preferred Stock and Series AAA Preferred Stock for aggregate gross proceeds of $7.0 million. As of June 30, 2026,*the Company received gross proceeds of $3.5 million from the issuance of the Series AA Preferred Stock, which were offset by approximately $0.3 million of transaction costs recorded as a reduction to additional paid-in capital, resulting in net proceeds of approximately $3.2 million.

On* June 25, 2026,in connection with the Asset Sale to Trademark Global, LLC and the Securities Purchase Agreement with David E. Lazar, the Board of Directors of the Company conditionally declared a dividend in the form of contingent value rights. The contingent value rights were declared to record holders as of the close of business on July 8, 2026,comprising holders of the Company’s common stock, par value $0.0001 per share, and holders of certain unexercised participating warrants to purchase common stock. Each eligible holder is entitled to receiveone* contingent value right for each share of common stock held or issuable upon exercise of participating warrants as of the record date. Shares of Series AA and Series AAA Convertible Non-Redeemable Preferred Stock are expressly excluded from participating in the distribution. Because the payment of the dividend remained subject to unfulfilled conditions precedent, including stockholder approval and the closing of the transactions, and remained subject to revocation by the Board as of* June 30, 2026,no liability or reduction of equity was recognized in the condensed consolidated financial statements for the period ended June 30, 2026.*

On* July 17, 2026,*following the receipt of stockholder approval at a special meeting of stockholders, the Company completed both the Asset Sale to Trademark Global, LLC and the Stock Sale to Lazar. Upon the closing of the Stock Sale, Lazar became the beneficial owner of approximately 95.8% of the Company's issued and outstanding voting securities, constituting a change in control, and was appointed as Chief Executive Officer. Concurrently, all outstanding indebtedness under the Credit and Security Agreement with MidCap Funding IV Trust was repaid in full, all commitments thereunder were terminated, and all associated guarantees and liens were released.

On* July 17, 2026,following approval by the Company's stockholders at a special meeting, the Company completed the Asset Sale to Trademark Global for $18.0 million in cash, subject to purchase price adjustments, and completed the issuance and sale of 1,750,000 shares of Series AAA Convertible Non-Redeemable Preferred Stock to Lazar for aggregate proceeds of $3.5 million. In connection with the closing of these transactions, the Company entered into a Contingent Value Rights Agreement with Broadridge Corporate Issuer Solutions, LLC, as Rights Agent, on July 17, 2026.Each contingent value right represents a non-transferable contractual right to receive pro rata cash distributions derived from specified future proceeds, including net proceeds from the Asset Sale after satisfaction of certain indebtedness and transaction costs, setting aside $1.0 million for ongoing operational expenses, and establishing up to $6.0 million in reserves for specified liabilities. Additional potential proceeds include any remaining amounts from the specified liability reserves upon full satisfaction of such liabilities, net proceeds from future sales of remaining legacy assets and inventorynot* acquired by Trademark Global, and net proceeds from tax or tariff refunds, drawbacks, customs claims, or released restricted cash and escrow amounts held prior to closing.

The Board established* August 17, 2026as the distribution date of the contingent value rights to record holders. Upon the closing of the transactions on July 17, 2026,the condition precedent was satisfied. Consequently, the contingent value right obligation will be measured at fair value as of the effective date in thethird* quarter of2026 and recognized as a distribution from equity, within retained earnings or additional paid-in capital, with a corresponding contingent value right liability or equity instrument as evaluated under ASC480 and ASC815. The contingent value rights represent contractual payment rights only, donot carry voting or dividend rights, accrueno interest, and donot represent equity ownership in the Company.

Following the consummation of the Aterian Transactions, the Company will continue to operate its remaining legacy brands, primarily Vremi and Xtava. Management intends to utilize remaining net proceeds to support working capital for these ongoing business segments.

While the completion of the Aterian Transactions eliminated senior debt obligations and provided immediate capital, the Company's retained legacy business operations remain limited in scale. The ongoing macroeconomic challenges, potential operational cash burn associated with scaling the remaining brands, and execution risks regarding the streamlined growth strategy continue to create uncertainty regarding future cash flows.

Based on these factors, management concluded that these conditions continue to raise substantial doubt about the Company’s ability to continue as a going concern withinone year after the date these Condensed Consolidated Financial Statements are issued. Management’s ongoing plans include driving operational efficiencies across the retained business, optimizing supply chain expenditures, and evaluating additional strategic alternatives. The accompanying Condensed Consolidated Financial Statements donot include any adjustments that might result from the outcome of this uncertainty.

Nasdaq Listing—On December 9, 2025,the Company received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock, for the last30 consecutive business days, the Company isnot currently in compliance with the requirement to maintain a minimum bid price of$1.00 per share for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule5550(a)(2) (the “Bid Price Notice”).

On* May 19, 2026,Nasdaq notified the Company in the Compliance Notice that from May 1, 2026to May 18, 2026the closing bid price of the Company’s common stock had been$1.00* per share or greater and, accordingly, the Company had regained compliance with Nasdaq Listing Rule5550(a)(2) and that the matter was now closed.

10

Basis of Presentation—The Condensed Consolidated Financial Statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

Unaudited Interim Financial Information—The accompanying interim Condensed Consolidated Financial Statements are unaudited and have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments necessary for the fair presentation of the Company's financial position as of* June 30, 2026and the results of its operations and its cash flows for the periods ended June 30, 2026and2025.* The financial data and other information disclosed in these notes related to thethree andsix months ended* June 30, 2026and2025* are also unaudited. The results for thethree andsix months ended* June 30, 2026arenot* necessarily indicative of results to be expected for the year ending* December 31, 2026,*any other interim periods, or any future year or period.

The Condensed Consolidated Balance Sheet as of* December 31, 2025,presented herein, has been derived from the Company’s audited Consolidated Financial Statements for the fiscal year then ended. These unaudited Interim Condensed Consolidated Financial Statements should be read in conjunction with our Annual Report on Form10*-K for the year ended* December 31, 2025as filed with the SEC on March 20, 2026 (“Annual Report”) and have been prepared on a consistent basis with the accounting policies described in Note2* of the Notes to Consolidated Financial Statements included in our Annual Report. Our accounting policies didnot change during thethree andsix months ended* June 30, 2026,other than with respect to the new accounting pronouncements adopted as described in Note2,* Recent Accounting Pronouncements.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form10-Q and Article8 of Regulation S-X. Accordingly, they donot include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the Condensed Consolidated financial statements of the Company as of* June 30, 2026and for thethree* andsix months then ended.

Held for sale classification—We report and classify a business or a component of an entity as held-for-sale (Held-For-Sale Business) when management has approved the sale or received approval to sell the business and is committed to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is anticipated to occur during the next12 months and certain other specified criteria are met. A Held-For-Sale Business is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value, a loss is recognized. As of* June 30, 2026,assets and liabilities related to a Held-For-Sale Business are reported in Assets held for sale and Liabilities held for sale, respectively, in our Condensed Consolidated Balance Sheets. Refer to Note3,* Held for Sale Classification and Discontinued Operations Presentation for additional details.

Discontinued operations presentation—We present a business, or a component of an entity, as discontinued operations if a) it meets the held-for-sale criteria, or is disposed of by sale, or is disposed of other than by sale, and b) the disposal of the business, or component of an entity, represents a strategic shift that has (or will have) a major effect on the Company's financial results. As of* June 30, 2026,we have retrospectively adjusted our Condensed Consolidated Statement of Operations to reflect the classification of continuing and discontinued operations. Refer to Note3,* Held for Sale Classification and Discontinued Operations Presentation for additional details.

Use of Estimates—Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period covered by the Condensed Consolidated Financial Statements and accompanying notes. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from those estimates.

Principles of Consolidation—The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Restricted Cash—As of* June 30, 2026and December 31, 2025,*the Company has classified the following as restricted cash: $0.1 million related to its Chinese subsidiary within “Other Non-current Assets” on the Condensed Consolidated Balance Sheets and $1.0 million related to a letter of credit within "Prepaid and Other Current Assets" on the Condensed Consolidated Balance Sheets.

Inventory and Cost of Goods Sold—The Company’s inventory consists almost entirely of finished goods. The Company currently records inventory on its balance sheet on afirst-infirst-out basis, or net realizable value, if it is below the Company’s recorded cost. The Company’s costs include the amounts it pays manufacturers for product, tariffs and duties associated with transporting product across national borders, and freight costs associated with transporting the product from its manufacturers to its warehouses, as applicable. The valuation of our inventory requires us to make judgments, based on available information such as historical data, about the likely method of disposition, such as through sales to individual customers or liquidations, and expected recoverable values of each disposition category. Changes to the relevant assumptions and projections would impact our consolidated financial results in periods subsequent to recording these estimates. If we anticipate a change in assumptions such as future demand or market conditions to be less favorable than our previous estimates, additional inventory write-downs* maybe required. Conversely, if we are able to sell inventories that had been written down to a level below the ultimate realized selling price in a previous period, sales would be recorded with a lower orno* offsetting charge to cost of goods sold.

During thethree months ended* June 30, 2026,the Company received $2.7 million from the U.S. Customs and Border Protection related to previously paid import duties, consisting of $2.6 million in duty refunds and $0.1 million in associated interest income. Of the duty refunds, $2.3 million was recorded as a reduction to cost of goods sold within Income (loss) from discontinued operations for inventory that had previously been sold, and $0.3 million was recorded as a reduction to the carrying value of inventory included within assets held for sale on the Condensed Consolidated Balance Sheet for unsold goods remaining on hand at June 30, 2026.*The $0.1 million of interest was recorded within interest income on the Condensed Consolidated Statements of Operations.

The “Cost of goods sold” line item in the Condensed Consolidated Statements of Operations consists of the book value of inventory sold to customers during the reporting period. When circumstances dictate that the Company use net realizable value as the basis for recording inventory, it bases its estimates on expected future selling prices less expected disposal costs.

11

Accounts Receivable—Accounts receivable are stated at historical cost less allowance for credit losses. On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off based on a past history of write-offs, collections and current credit conditions. A receivable is considered past due if the Company hasnot received payments based on agreed-upon terms. The Company generally doesnot require any security or collateral to support its receivables. The Company performs ongoing evaluations of its customers and maintains an allowance for credit losses. As of* June 30, 2026and December 31, 2025,the Company didnot* have an allowance for credit losses.

Revenue Recognition—The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic606, Revenue from Contracts with Customers (“ASC Topic606”). The Company derives its revenue from the sale of consumer products. The Company sells its products directly to consumers through online retail channels and through wholesale channels.

For direct-to-consumer sales, the Company considers customer order confirmations to be a contract with the customer. Customer confirmations are executed at the time an order is placed throughthird-party online channels. For wholesale sales, the Company considers the customer purchase order to be the contract.

For all of the Company’s sales and distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment date. As a result, the Company has a present and unconditional right to payment and record the amount due from the customer in accounts receivable.

Revenue from consumer product sales is recorded at the net sales price (transaction price), which includes an estimate of future returns based on historical return rates. There is judgment in utilizing historical trends for estimating future returns. The Company’s refund liability for sales returns was $0.2 million at* June 30, 2026and December 31, 2025,which is included in liabilities held-for-sale on the Condensed Consolidated Balance Sheets as of June 30, 2026and December 31, 2025,*and represents the expected value of the refund that will be due to its customers.

The Company evaluated principal versus agent considerations to determine whether it is appropriate to record platform fees paid to Amazon as an expense or as a reduction of revenue. Platform fees are recorded as sales and distribution expenses and arenot recorded as a reduction of revenue because the Company owns and controls all the goods before they are transferred to the customer. The Company can, at any time, direct Amazon, or similarly, direct otherthird-party logistics providers (“Logistics Providers”), to return the Company’s inventory to any location specified by the Company. It is the Company’s responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk. Further, the Company is subject to credit risk (i.e., credit card charge backs), establishes prices of its products, can determine who fulfills the goods to the customer (Amazon or the Company) and can limit quantities or stop selling the goods at any time. Based on these considerations, the Company is the principal in this arrangement.

Intangibles—We review long-lived assets for impairment when performance expectations, events, or changes in circumstances indicate that the asset's carrying value* maynot* be recoverable. The evaluation is performed at the lowest level of identifiable cash flows by comparing the carrying value of the asset group to the undiscounted cash flows. If the evaluation indicates that the carrying amount of the assets* maynot* be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique.

On* July 17, 2026,the Company completed the sale of substantially all of its assets to Trademark Global, pursuant to the Asset Purchase Agreement, dated as of April 27, 2026.*Pursuant to the Asset Purchase Agreement, Trademark Global acquired certain specified assets and liabilities of the Company, including, among other things, assets associated with the Company’s marquee consumer brands: Mueller Living, PurSteam, hOmeLabs, Squatty Potty, Healing Solutions, and Photo Paper Direct for $18.0 million in cash, subject to certain purchase price adjustments.

Based on the definitive deal terms, specifically the $18.0 million base purchase price and the estimated purchase price adjustments, the Company evaluated the carrying value of its brand intangible assets. As of* June 30, 2026,management evaluated the carrying value of these brand intangible assets based on the finalized deal terms and expected net proceeds, and determined thatno* impairment was required for thethree months ended* June 30, 2026.Previously, the Company determined that the estimated allocated proceeds from the Asset Purchase Agreement were lower than the carrying values for certain definite-lived brand assets, and accordingly recorded a non-cash impairment charge of $3.4 million during thefirst* quarter of2026. This charge was recorded within Income (loss) from discontinued operations on the Condensed Consolidated Statement of Operations.

12

Fair Value of Financial Instruments—The Company’s financial instruments, including net accounts receivable, accounts payable, and accrued and other current liabilities are carried at historical cost. As of* June 30, 2026and December 31, 2025,the carrying amounts of these instruments approximated their fair values because of their short-term nature. The Company’s credit facility is carried at amortized cost at June 30, 2026and December 31, 2025,*and the carrying amount approximates fair value as the stated interest rate approximates market rates currently available to the Company.

The fair value of the stock purchase warrants issued in connection with the Company’s common stock offering on* March 1, 2022were measured using the Black-Scholes model. Inputs used to determine the estimated fair value of the warrant liabilities include the fair value of the underlying stock at the valuation date, the term of the warrants, and the expected volatility of the underlying stock. The significant unobservable input used in the fair value measurement of the warrant liabilities is the estimated term of the warrants. Upon the issuance of the stock purchase warrants, the Company evaluated the terms of each warrant to determine the appropriate accounting and classification pursuant to FASB ASC Topic480,* Distinguishing Liabilities from Equity (“ASC480”), and FASB Accounting Standards Codification Topic815, Derivatives and Hedging (“ASC815”). Based on the Company’s evaluation and due to certain terms in the warrant agreements, it concluded the stock purchase warrants should be classified as a liability with subsequent remeasurement as long as such warrants continue to be classified as liabilities.

Assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes athree-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level1**—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level2**—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that arenot active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level3**—Unobservable inputs that are supported by little orno market data for the related assets or liabilities.

A summary of the activity of the Level3 liabilities carried at fair value on a recurring basis for thesix months ended* June 30, 2026and June 30, 2025*is as follows (in thousands):

Equity Investment

During thethree months ended* June 30, 2026,*the Company recognized an impairment loss of $0.1 million on its equity investment, which is included within Other expense, net in the Condensed Consolidated Statements of Operations.

Recent Accounting Pronouncements

Since the issuance of the Company's Annual Report on Form10-K for the year ended* December 31, 2025,there have beenno* material updates to the recent accounting pronouncement previously disclosed.

13

Held for sale classification—We report and classify a business or a component of an entity as held-for-sale (Held-For-Sale Business) when management has approved the sale or received approval to sell the business and is committed to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is anticipated to occur during the next12 months and certain other specified criteria are met. A Held-For-Sale Business is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value, a loss is recognized. As of* June 30, 2026,*assets and liabilities related to a Held-For-Sale Business are reported in Assets held for sale and Liabilities held for sale, respectively, in our Condensed Consolidated Balance Sheets.

The following table summarizes the components of assets and liabilities held-for-sale on the Condensed Consolidated Balance Sheets at* June 30, 2026 (*in thousands):

Discontinued operations presentation—We present a business, or a component of an entity, as discontinued operations if a) it meets the held-for-sale criteria, or is disposed of by sale, or is disposed of other than by sale, and b) the disposal of the business, or component of an entity, represents a strategic shift that has (or will have) a major effect on the Company's financial results. As of* June 30, 2026,*we have retrospectively adjusted our Condensed Consolidated Statement of Operations to reflect the classification of continuing and discontinued operations.

The following table presents the amounts related to the operations of the Company that have been reflected in Income (loss) from discontinued operations (in thousands):

14

Accounts receivable consisted of the following as of* June 30, 2026and December 31, 2025 (*in thousands):

Inventory consisted of the following as of* June 30, 2026and December 31, 2025 (*in thousands):

Prepaid and other current assets consisted of the following as of* June 30, 2026and December 31, 2025 (*in thousands):

Accrued and other current liabilities consisted of the following as of* June 30, 2026and December 31, 2025 (*in thousands):

The Company sponsors, through its professional employer organization provider, a401(k) defined contribution plan covering all eligible US employees. Contributions to the401(k) plan are discretionary. Currently, the Company doesnot match or make any contributions to the401(k) plan.

15

MidCap Credit Facility

On* December 22, 2021,*the Company entered into a Credit and Security Agreement (the “Credit Agreement” or the "Existing Credit Agreement") together with certain of its subsidiaries party thereto as borrowers, the entities party thereto as lenders, and Midcap Funding IV Trust, as administrative agent, pursuant to which, among other things, (i) the Lenders agreed to provide athree year revolving credit facility in a principal amount of up to $40.0 million subject to a borrowing base consisting of, among other things, inventory and sales receivables (subject to certain reserves), and (ii) the Company agreed to issue to MidCap Funding XXVII Trust a warrant (the “Midcap Warrant”) to purchase up to an aggregate of 16,667 shares of common stock of the Company, in exchange for the Lenders extending loans and other extensions of credit to the Company under the Credit Agreement.

The obligations under the Credit Agreement are a senior secured obligation of the Company and rank senior to all indebtedness of the Company. Borrowings under the Credit Agreement bear interest at a rate of Term Secured Overnight Financing Rate ("Term SOFR"), which is defined as SOFR plus 0.10%, plus 5.50%. The Company will also be required to pay a commitment fee of 0.50% in respect of the undrawn portion of the commitments, which is generally based on average daily usage of the facility during the immediately preceding fiscal quarter. The Credit Agreement doesnot require any amortization payments.

The Credit Agreement minimum liquidity covenant, which includes the Company’s unrestricted U.S. cash plus the revolving loan availability, requires that Midcap shallnot permit the credit party liquidity at any time to be less than (a) during the period commencing on* February1st* through and including* May31st* of each calendar year, $12.5 million and (b) at all other times, $15.0 million. The Credit Agreement includes events of default that are customary for these types of credit facilities, including the occurrence of a change of control.

The Midcap Warrant has an exercise price of $56.40 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, is immediately exercisable, has a term often years from the date of issuance and is exercisable on a cash or cashless basis.

On* February 23, 2024,the Company amended its asset backed credit facility with MidCap Financial Trust. The Credit Agreement term was extended to December 2026*and gives the Company access to $17 million in current commitments which can be increased, subject to certain conditions, to $30.0 million. The Credit Agreement extension reduced the minimum liquidity financial covenant from a peak of $15.0 million to $6.8 million of U.S. cash on hand and/or availability in the Credit Agreement. The extension fee was less than $0.1 million.

On* March 25, 2025 (the “Third Amendment Effective Date”) the Company entered into AmendmentNo.* 3 (the*“3rd* Amendment”) to the Credit Agreement. Material changes contained in the3rd Amendment include, among other things, adding repurchase of the Company’s common stock of up to*$1.5* million per year, consisting of up to $1.5 million in repurchases allowed during the period from* March 25, 2025through December 22, 2025,and up to an additional $1.5 million allowed during the period from December 23, 2025through the maturity date, subject to certain liquidity and compliance conditions. As of May 2, 2025,*the Company had temporarily suspended its share repurchase program.

On* August 29, 2025 (the “Fourth Amendment Effective Date”) the Company entered into AmendmentNo.* 4 to the Credit Agreement. Material changes contained in AmendmentNo. 4 include a reduction to the Minimum Credit Party Liquidity (as defined in the Credit Agreement) covenant to $5.0 million, upon the Company’s delivery of a liquidity certificate evidencing liquidity of at least $6.8 million, the Minimum Liquidity Covenant Reduction Period (as defined in the Credit Agreement) will terminate and the covenant will increase to $6.8 million thereafter, and an Availability Reserve (as defined in the Credit Agreement) of $2.8 million during the Minimum Liquidity Covenant Reduction Period and $1.0 million thereafter.

On* March 13, 2026 (the "Fifth Amendment Effective Date"), the Company and its subsidiaries entered into AmendmentNo.* 5 to its Credit and Security Agreement with MidCap Funding IV Trust. Under the terms of the amendment, the Company’s minimum liquidity covenant was reduced from $5.0 million to $3.5 million during the Minimum Liquidity Covenant Reduction Period. This reduction period commenced on the Fifth Amendment Effective Date and is subject to extension at the Company's option on a weekly basis through* May 9, 2026,*provided it remains in compliance with certain fee payment obligations.

The Company is in compliance with the financial covenants contained within the Credit Agreement as of* June 30, 2026.*

As of* June 30, 2026,there wasno outstanding principal balance under the Existing Credit Agreement. As of June 30, 2026,*the Company had an overpayment balance of $0.4 million due from the lender resulting from routine cash sweeps mechanics, as well as unamortized deferred financing costs of $0.1 million, both of which are included within Prepaid Expenses and Other Current Assets on the Condensed Consolidated Balance Sheet.

On* July 17, 2026,*in connection with the closing of the Asset Sale and the Stock Sale, all outstanding indebtedness under the Existing Credit Agreement was repaid in full and all commitments thereunder were terminated. Additionally, all guarantees and liens securing the indebtedness under the Existing Credit Agreement were fully discharged and released.

The Company’s credit facility consisted of the following as of* June 30, 2026and December 31, 2025 (*in thousands):

Interest Expense, Net

Interest expense, net consisted of the following for thethree andsix months ended* June 30, 2026and2025* (in thousands):

Seller Notes

As of* June 30, 2026,the Company entered into a binding settlement agreement to fully discharge its outstanding Seller Notes with an aggregate carrying value of $0.3 million in exchange for a cash settlement payment of $38 thousand. Accordingly, during thethree* months ended* June 30, 2026,the Company recognized a gain on extinguishment of debt of $0.3 million in the Condensed Consolidated Statements of Operations. The remaining $38 thousand settlement obligation was included in Seller Notes on the Condensed Consolidated Balance Sheets as of June 30, 2026,and was paid in full in July 2026.*

Securities Purchase Agreement and Warrants

In* March 2022,the Company raised approximately $27.5 million through a private placement involving common stock and accompanying stock purchase warrants. The 590,637 common stock warrants issued in the transaction were classified as liabilities with subsequent remeasurement each quarter. As of June 30, 2026,*these warrants remain outstanding and haveno associated liability recorded on the Company’s Condensed Consolidated Balance Sheet due to the decline in the Company’s share price.

16

On* July 17, 2026,the Company completed its sale of preferred stock to David E. Lazar, pursuant to that certain Securities Purchase Agreement, dated as of April 27, 2026.Pursuant to the Securities Purchase Agreement, Lazar purchased from the Company (a)1,750,000 shares of Series AA Convertible Non-Redeemable Preferred Stock, par value $0.0001 per share, of the Company (the “Series AA Preferred Stock” and such purchased shares, the “Series AA Preferred Shares”), the closing of which occurred on April 27, 2026,and (b)1,750,000 shares of Series AAA Convertible Non-Redeemable Preferred Stock, par value $0.0001 per share, of the Company (the “Series AAA Preferred Stock” and together with the Series AA Preferred Stock, the “Preferred Stock” and such purchased shares, the “Series AAA Preferred Shares” and together with the Series AA Preferred Shares, the “Purchased Shares”), the closing of which occurred on July 17, 2026,in each case at a purchase price of $2.00 per share of Preferred Stock for aggregate gross proceeds of $7.0 million, subject to the terms and conditions of the Securities Purchase Agreement. As the Company received the requisite approvals at the Special Meeting, each (i) Series AA Preferred Share maybe converted into 7.7 shares of common stock, which number is based on a conversion price of $0.25974, as determined in accordance with the terms of the Securities Purchase Agreement, and (ii) Series AAA Preferred Share may*be converted into 135.1 shares of common stock, which number is based on a conversion price of $0.0148, as determined in accordance with the terms of the Securities Purchase Agreement.

On* June 25, 2026,in connection with the Asset Sale to Trademark Global, LLC and the Securities Purchase Agreement with David E. Lazar, the Board of Directors of the Company conditionally declared a dividend in the form of contingent value rights. The contingent value rights were declared to record holders as of the close of business on July 8, 2026,comprising holders of the Company’s common stock, par value $0.0001 per share, and holders of certain unexercised participating warrants to purchase common stock. Each eligible holder is entitled to receiveone* contingent value right for each share of common stock held or issuable upon exercise of participating warrants as of the record date. Shares of Series AA and Series AAA Convertible Non-Redeemable Preferred Stock are expressly excluded from participating in the distribution. Because the payment of the dividend remained subject to unfulfilled conditions precedent, including stockholder approval and the closing of the transactions, and remained subject to revocation by the Board as of* June 30, 2026,no liability or reduction of equity was recognized in the condensed consolidated financial statements for the period ended June 30, 2026.*

On* April 27, 2026,*the Company received gross proceeds of $3.5 million from the issuance of the Series AA Preferred Stock, which were offset by approximately $0.3 million of transaction costs recorded as a reduction to additional paid-in capital, resulting in net proceeds of approximately $3.2 million.

The Company hasthree equity plans:

2014 Amended and Restated Equity Incentive Plan

The board of directors of Aterian Group, Inc., (the “Board”) a subsidiary of the Company (“AGI”), adopted, and AGI’s stockholders approved, the Aterian Group, Inc.2014 Equity Incentive Plan on* June 11, 2014.On March 1, 2017,AGI’s board of directors adopted, and AGI’s stockholders approved, an amendment and restatement of the2014* Equity Incentive Plan (as amended, the “Aterian2014 Plan”). As of* June 30, 2026,there wereno shares reserved for future issuance under the Aterian2014* Plan.

2018 Equity Incentive Plan

The Board adopted the Aterian, Inc.2018 Equity Incentive Plan (the*“2018* Plan”) on* October 11, 2018.The2018* Plan was approved by its stockholders on* May 24, 2019.As of June 30, 2026,1,876,449 shares were reserved for awards available for future issuance under the2018* Plan.

Options granted to date under the Aterian2014 Plan and the2018 Plan generally vest either: (i) over afour-year period with 25% of the shares underlying the options vesting on thefirst anniversary of the vesting commencement date with the remaining 75% of the shares vesting on a pro-rata basis over the succeedingthirty-six months, subject to continued service with the Company through each vesting date, or (ii) over athree-year period with 33 1/3% of the shares underlying the options vesting on thefirst anniversary of the vesting commencement date with the remaining 66 2/3% of the shares vesting on a pro-rata basis over the succeedingtwenty-four months, subject to continued service with the Company through each vesting date. Options granted are generally exercisable for up to 10 years subject to continued service with the Company.

Inducement Equity Incentive Plan

On* May 27, 2022,*the Compensation Committee of the Board (the “Compensation Committee”) adopted the Aterian, Inc.2022 Inducement Equity Incentive Plan (the “Inducement Plan”). The Inducement Plan will serve to advance the interests of the Company by providing a material inducement for the best available individuals to join the Company as employees by affording such individuals an opportunity to acquire a proprietary interest in the Company.

The Inducement Plan provides for the grant of equity-based awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares solely to prospective employees of the Company or an affiliate of the Company provided that certain criteria are met. Awards under the Inducement Plan* mayonly be granted to an individual, as a material inducement to such individual to enter into employment with the Company or an affiliate of the Company, who (i) hasnot* previously been an employee or director of the Company or (ii) is rehired following a bona fide period of non-employment with the Company. The maximum number of shares available for grant under the Inducement Plan is 225,000 shares of the Company’s common stock (subject to adjustment for recapitalizations, stock splits, reorganizations and similar transactions). The Inducement Plan is administered by the Compensation Committee and expiresten years from the date of effectiveness. As of* June 30, 2026,*193,473 shares were reserved for future issuance under the Inducement Plan.

The Inducement Plan hasnot been and willnot be approved by the Company’s stockholders. Awards under the Inducement Plan will be made pursuant to the exemption from Nasdaq stockholder approval requirements for equity compensation provided by Nasdaq Listing Rule5635(c)(4), which permits Nasdaq listed companies to make inducement equity awards to new employees withoutfirst obtaining stockholder approval of the award.

The following is a summary of stock option activity during thesix months ended* June 30, 2026*:

As of* June 30, 2026*, all options have been fully expensed.

17

A summary of restricted stock award activity within the Company’s equity plans and changes for thesix months ended* June 30, 2026* is as follows:

As of* June 30, 2026*, the total unrecognized compensation expense related to unvested shares of restricted common stock was $1.5 million, which the Company expects to recognize over an estimated weighted-average period of 2.0 years.

Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. During thethree months ended* June 30, 2026and2025,* $0.3 million and a reversal of $3 thousand of stock-based compensation were included in general and administrative expenses on the Condensed Consolidated Statement of Operations and $0.1 million and $0.1 million of stock-based compensation were included within discontinued operations, respectively. Duringsix months ended* June 30, 2026and2025,* $0.7 million and $0.6 million of stock-based compensation were included in general and administrative expenses on the Condensed Consolidated Statement of Operations and $0.1 million and $0.3 million of stock-based compensation were included within discontinued operations, respectively.

18

Basic net loss per share is determined by dividing net loss by the weighted-average shares of common stock outstanding during the period. Diluted net loss per share is determined by dividing net loss by diluted weighted-average shares outstanding. Diluted weighted-average shares reflect the dilutive effect, if any, of potentially dilutive shares of common stock, such as options to purchase common stock calculated using the treasury stock method and convertible notes using the “if-converted” method. In periods with reported net operating losses, all options to purchase common stock are deemed anti-dilutive such that basic net loss per share and diluted net loss per share are equal.

The Company’s shares of restricted common stock are entitled to receive dividends and hold voting rights applicable to the Company’s common stock, irrespective of any vesting requirement. Accordingly, although the vesting commences upon the elimination of the contingency, the shares of restricted common stock are considered a participating security and the Company is required to apply thetwo-class method to consider the impact of the shares of restricted common stock on the calculation of basic and diluted earnings per share. The Company is currently in a net loss position and is thereforenot required to present thetwo-class method; however, in the event the Company is in a net income position, thetwo-class method must be applied by allocating all earnings during the period to shares of common stock and shares of restricted common stock.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

Based on the location of the Company’s current operations, the majority of sales tax is collected and remitted either by the Company or on its behalf by e-commerce marketplaces in most states within the U.S. To date, the Company has hadno actual or threatened sales and use tax claims from any state where it doesnot already claim nexus or any state where it sold products prior to claiming nexus. However, the Company believes that the likelihood of incurring a liability as a result of sales tax nexus being asserted by certain states where it sold products prior to claiming nexus is probable. As of* June 30, 2026and December 31, 2025,*the Company estimates that the potential liability, including current sales tax payable is approximately $0.9 million, which has been recorded in accrued and other current liabilities on the Condensed Consolidated Balance Sheets. The Company believes this is the best estimate of an amount due to taxing agencies, given that such a potential loss is an unasserted liability that would be contested and subject to negotiation between the Company and the state, or decided by a court.

From time to time, the Company is party to various actions and claims arising in the normal course of business. The Company doesnot believe that the final outcome of these matters will have a material adverse effect on the Company’s financial position or results of operations. In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate risk. However,no assurance can be given that the final outcome of such proceedings willnot materially impact the Company’s financial condition or results of operations. Further,no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters.

During* Juneand July 2026,in connection with the proxy statement filed in relation to the Asset Sale and Stock Sale, the Company received demand letters from purported stockholders alleging certain omitted information or disclosure deficiencies in the proxy materials. The Company evaluated the demands, determined that the proxy disclosures complied with all applicable reporting requirements, and proceeded with the special meeting where the required stockholder approvals were obtained. The Company believes the claims asserted in these demand letters are without merit and that the likelihood of any material loss arising from these matters is remote. Consequently,no liability has been accrued in the Condensed Consolidated Balance Sheets as of June 30, 2026.*

In* February 2026,we announced a voluntary recall in coordination with the U.S. Consumer Product Safety Commission (the "CPSC") for approximately 195,000 units of our PurSteam Mighty Lil Steamers and Elite Travel Steamers due to reports of hot water expelling from the nozzle. We have incurred, and expect to continue to incur, costs related to this recall, including refund payments and legal expenses. As a result of this recall, a putative class action complaint, Sarah Brannon v. Aterian, Inc., was filed against us on March 6, 2026,in the U.S. District Court for the District of New Jersey. The complaint alleges various violations, including breach of implied warranty, unjust enrichment, and violations of the New Jersey Products Liability Act. While the Company ceased selling these steamers in2024,* the defense of this existing litigation, and the potential for additional product liability or class action lawsuits, could result in significant legal expenses, settlements, or judgments.

On* May 13, 2026,*the Company entered into a settlement agreement and general release to resolve this litigation. Under the terms of the agreement, the Company agreed to pay a total settlement sum of $100,000 in exchange for a full release of all claims related to the purchase and use of the products. The agreement stipulates a voluntary dismissal of the claims with prejudice and includes customary provisions regarding confidentiality, non-disparagement, and a denial of any wrongdoing or liability by the company.

Total accrued liabilities related to estimated product recall costs were $0.1 million and $0.4 million as of* June 30, 2026and December 31, 2025,*respectively.

19

On* May 14, 2025,the Company announced a fixed cost reduction plan, which included a workforce reduction affecting approximately 20 employees. The Company had substantially completed this reduction as of the year ended December 31, 2025.In connection with this plan, the Company recognized restructuring charges of approximately $1.9 million, of which $1.1 million is recorded in Sales and Distribution expenses and $0.8 million is recorded in General and Administrative expenses, primarily related to severance, during the year ended December 31, 2025.Severance payments were completed during thesecond* quarter of2026.

In* January 2026,the Company implemented a fixed cost reduction plan that included a workforce reduction affecting approximately 16 employees and independent contractors. The Company has substantially completed this reduction as of March 31, 2026.In connection with this plan, the Company recognized restructuring charges of approximately $0.3 million, which is recorded in Sales and Distribution expenses, primarily related to severance, during thethree* months ended* March 31, 2026.Severance payments were completed during thesecond* quarter of2026.

The accounting for the restructuring costs follows the provisions of ASC420, "Accounting for Costs Associated with Exit or Disposal Activities," which requires the recognition of a liability once the restructuring plan is communicated to affected employees and meets the criteria of being probable and reasonably estimable. The Company recognizes a liability for employee severance, other benefits, and involuntary terminations on the communication date.

The following table provides a summary of the restructuring costs incurred (in thousands):

The following table provides a summary of the Company's total restructuring reserve (in thousands):

As of* June 30, 2026,*the Company didnot have a liability for restructuring costs.

As of* December 31, 2025,*the Company had a liability of $0.5 million for restructuring costs, respectively, which are included in accrued and other current liabilities on the Condensed Consolidated Balance Sheet.

The Company will continue to assess the restructuring plan's progress and provide updates as required in future financial statements if there are material changes to the initial estimates or additional significant restructuring activities.

20

Aterian, Inc. is a consumer products company that predominantly operates through online retail channels such as Amazon, Walmart, and Target and its own direct to consumer websites. The Company operates its owned brands, which were either incubated or purchased, selling products in multiple categories, including home and kitchen appliances, kitchenware, air quality appliances, health and beauty products and essential oils. The Company has determined that it hasone operating segment. The Company's chief operating decision maker ("CODM") is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating margin and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow operating margin and the allocation of budget between cost of goods sold, variable sales costs, and other vendor and payroll expenses.

(1) Other segment items primarily include income taxes, interest expense, other income, gain on extinguishment of debt, and the change in fair value of warrant liabilities.

The CODM doesnot use total assets as a financial metric when making key operating decisions.

21

On* July 17, 2026,*the Company completed its sale of assets to Trademark Global pursuant to the Asset Purchase Agreement. Pursuant to the Asset Purchase Agreement, Trademark Global acquired certain specified assets and liabilities of the Company, including, among other things, assets associated with the Company’s marquee consumer brands: Mueller Living, PurSteam, hOmeLabs, Squatty Potty, Healing Solutions, and Photo Paper Direct for $18.0 million in cash, subject to certain purchase price adjustments.

On* July 17, 2026,the Company completed its sale of preferred stock to Lazar, pursuant to the Securities Purchase Agreement. Pursuant to the Securities Purchase Agreement, Lazar purchased from the Company (a)1,750,000 shares of Series AA Preferred Stock, the closing of which occurred on April 27, 2026,and (b)1,750,000 shares of Series AAA Preferred Stock, the closing of which occurred on July 17, 2026,in each case at a purchase price of $2.00 per share of Preferred Stock for aggregate gross proceeds of $7.0 million, subject to the terms and conditions of the Securities Purchase Agreement. As the Company received the requisite approvals at the Special Meeting, each (i) Series AA Preferred Share maybe converted into 7.7 shares of common stock, which number is based on a conversion price of $0.25974, as determined in accordance with the terms of the Securities Purchase Agreement, and (ii) Series AAA Preferred Share may*be converted into 135.1 shares of common stock, which number is based on a conversion price of $0.0148, as determined in accordance with the terms of the Securities Purchase Agreement.

In connection with the closing of these transactions, the Company entered into a Contingent Value Rights Agreement with Broadridge Corporate Issuer Solutions, LLC, as Rights Agent, on* July 17, 2026.Each contingent value right represents a non-transferable contractual right to receive pro rata cash distributions derived from specified future proceeds, including net proceeds from the Asset Sale after satisfaction of certain indebtedness and transaction costs, setting aside $1.0 million for ongoing operational expenses, and establishing up to $6.0 million in reserves for specified liabilities. Additional potential proceeds include any remaining amounts from the specified liability reserves upon full satisfaction of such liabilities, net proceeds from future sales of remaining legacy assets and inventorynot* acquired by Trademark Global, and net proceeds from tax or tariff refunds, drawbacks, customs claims, or released restricted cash and escrow amounts held prior to closing.

The Board established* August 17, 2026,as the distribution date of the contingent value rights to record holders. Upon the closing of the transactions on July 17, 2026,the condition precedent was satisfied. Consequently, the contingent value right obligation will be measured at fair value as of the effective date in thethird* quarter of2026 and recognized as a distribution from equity, within retained earnings or additional paid-in capital, with a corresponding contingent value right liability or equity instrument as evaluated under ASC480 and ASC815. The contingent value rights represent contractual payment rights only, donot carry voting or dividend rights, accrueno interest, and donot represent equity ownership in the Company.

On* July 17, 2026,*in connection with the closing of the asset and preferred stock sales, all remaining commitments under the Existing Credit Agreement with MidCap Funding IV Trust were terminated, and all associated financial obligations thereunder were settled in full. Concurrently, all guarantees, mortgages, security interests, and liens securing the indebtedness under the Existing Credit Agreement were fully discharged and released.

The Company is currently evaluating the accounting for the transaction, and an estimate of the financial effect, including the final gain or loss on the sale, cannot be made at this time.

Effective* July 17, 2026,David E. Lazar was appointed as the Chief Executive Officer of the Company, succeeding Arturo Rodriguez, who ceased serving as Chief Executive Officer while remaining on the Company's Board of Directors. In connection with this transition, the Company entered into a Transition and Separation Agreement with Mr. Rodriguez to provide operational transition services through September 30, 2026.*

On* August 4, 2026,*875,000 shares of Series AA preferred stock were converted into 6,737,500 shares of common stock for David E. Lazar (at a conversion ratio of 7.7 common shares per preferred share).

22