Bark, Inc.

Previous wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto for the year ended March 31, 2025 contained in the Annual Report on Form 10-K filed with the SEC on June 4, 2025. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, “the Company” and “BARK” are intended to mean the business and operations of BARK, Inc. and its subsidiaries. The unaudited condensed consolidated financial statements for the three and six months ended September 30, 2025 and 2024, respectively, present the financial position and results of operations of BARK, Inc. and its wholly-owned subsidiaries.

Current wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto for the year ended March 31, 2025 contained in the Annual Report on Form 10-K filed with the SEC on June 4, 2025. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, “the Company” and “BARK” are intended to mean the business and operations of BARK, Inc. and its subsidiaries. The unaudited condensed consolidated financial statements for the three and nine months ended December 31, 2025 and 2024, respectively, present the financial position and results of operations of BARK, Inc. and its wholly-owned subsidiaries.

Previous wording

Macroeconomic Conditions. Macroeconomic conditions and the related effects on levels of consumer spending impact our business as purchases of discretionary items tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty. Inflation, rising interest rates, higher fuel and energy costs and commodity prices, reductions in net worth based on market declines and uncertainty, home prices, credit availability and consumer debt levels, political instability due to war or other geopolitical factors and other macroeconomic pressures and general uncertainty regarding the overall future economic environment have led to recession fears and created a challenging environment.

Current wording

Macroeconomic Conditions. Macroeconomic conditions and the related effects on levels of consumer spending impact our business as purchases of discretionary items tend to decline when disposable income is lower or when there are recessions, inflationary pressures or other economic uncertainty. Inflation, rising interest rates, higher fuel and energy costs and commodity prices, reductions in net worth based on market declines and uncertainty, home prices, credit availability and consumer debt levels, political instability due to war or or global conflicts or other geopolitical factors and other macroeconomic pressures and general uncertainty regarding the overall future economic environment have led to recession fears and created a challenging environment.

Previous wording

We use the following key financial and operating metrics to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions. These key financial and operating metrics should be read in conjunction with the following discussion of our results of operations and financial condition together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

We use the following key financial and operating metrics to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions. These key financial and operating metrics should be read in conjunction with the following discussion of our results of operations and financial condition together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. These measures may not be comparable to similarly titled performance indicators used by other companies.

Previous wording

Treats— Includes treats and chews included in our BarkBox and Super Chewer boxes, as well as the sale of treats on Bark.co. Many of our treats feature monthly themes, similar to our toys. Today, BARK is one of the largest treat brands in the U.S. by revenue. The Company also began selling its treats in over 2,400 doors nationwide in the Spring of 2024. The Company has been expanding its treat offering among other partners, including Amazon, Chewy, Meijer and anticipates further expansion in the year ahead.

Current wording

Treats— Includes treats and chews included in our BarkBox and Super Chewer boxes, as well as the sale of treats on Bark.co. Many of our treats feature monthly themes, similar to our toys. Today, BARK is one of the largest treat brands in the U.S. by revenue. The Company anticipates expansion of its treat offerings amongst commerce customers.

Previous wording

Direct to Consumer revenue decreasedby $20.5 million, or 19.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily driven by a 22.2%, or 0.7 million decrease in Total Orders, and a $0.04 or 0.1% decrease in AOV. The decrease was partially offset by an increase in revenue from BARK Air of $2.1 million. Total BARK Air revenue was $3.6 million or 4.4% of Direct to Consumer revenue.

Current wording

Direct to Consumer revenue decreasedby $26.5 million, or 25.0%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. This decrease was primarily driven by a 27.2%, or 0.9 million decrease in Total Orders. The decrease was partially offset by an increase in revenue from BARK Air of $1.4 million. Total BARK Air revenue was $3.4 million or 4.2% of Direct to Consumer revenue.

Previous wording

Direct to Consumer and Commerce gross profit decreased by$13.5 million and $0.6 million, respectivelyfor the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The decrease in Commerce gross profit is partly attributable to higher tariffs and increased inbound shipping costs in the quarter.

Current wording

Direct to Consumer and Commerce gross profit decreased by$17.5 million and $0.2 million, respectivelyfor the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The decrease in Commerce gross profit attributable to lower revenue in the quarter.

Previous wording

Gross profit as a percentage of revenue decreased 2.5% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Direct to Consumer gross margin was 63.3%, 60 basis points lower than the same period last year. Excluding the impact of BARK Air, Direct to Consumer gross margin was 65.6%, 80 basis points higher than the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements and plan mix changes. Commerce gross margin was 40.2%, 480 basis points lower than the same period last year. The decrease in Commerce gross margin is primarily attributable to changes in customer mix and, to a lesser extent, the timing of the implementation of our tariff mitigation strategies.

Current wording

Gross profit as a percentage of revenue decreased 20 basis points for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. Direct to Consumer gross margin was 66.4%, 10 basis points higher than the same period last year. Excluding the impact of BARK Air, Direct to Consumer gross margin was 69.2%, 180 basis points higher than the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements and plan mix changes. Commerce gross margin was

Previous wording

Total general and administrative expense decreased by $5.9 million, or 9.4%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease from the prior period was primarily due to: decreased shipping and fulfillment costs of $2.6 million attributable to lower Direct to Consumer volumes, decreased compensation expense of $2.7 million, as well as decreased professional fees of $0.5 million.

Current wording

Total general and administrative expense decreased by $9.7 million, or 15.1%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The decrease from the prior period was primarily due to: decreased shipping and fulfillment costs of $7.6 million attributable to lower Direct to Consumer volumes, decreased compensation expense of $1.4 million, decreased insurance expense of $0.2 million, and decreased professional fees of $0.2 million.

Previous wording

Advertising and marketing expense decreased by $3.3 million, or 17.5%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease is primarily attributable to decreased Direct to Consumer marketing spend.

Current wording

Advertising and marketing expense decreased by $11.3 million, or 41.3%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The decrease is primarily attributable to decreased Direct to Consumer marketing spend.

Previous wording

Interest income decreased by $0.7 million, or 49.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in interest income is due to an overall decrease in cash in interest-bearing deposit accounts.

Current wording

Interest income decreased by $0.9 million, or 75.2%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The decrease in interest income is due to an overall decrease in cash in interest-bearing deposit accounts.

Previous wording

Other income, net increased by $0.3 millionfor the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to the change of the fair value of our warrant liabilities.

Current wording

Other income, net increased by $0.2 millionfor the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The increase was primarily due to the change of the fair value of our warrant liabilities.

Previous wording

Direct to Consumer revenue decreasedby $38.3 million, or 18.3%, for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. This decrease was primarily driven by the 20.1% or 1.3 million decrease in Total Orders, in addition to a $0.09 or 0.3% decrease in AOV. The decrease was partially offset by increased revenue from BARK Air of $3.9 million. Total BARK Air revenue was $6.0 million or 3.5% of Direct to Consumer revenue.

Current wording

Direct to Consumer revenue decreasedby $64.9 million, or 20.5%, for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. This decrease was primarily driven by the 22.4% or 2.3 million decrease in Total Orders. The decrease was partially offset increased revenue from BARK Air of $5.3 million. Total BARK Air revenue was $9.3 million or 3.7% of Direct to Consumer revenue.

Previous wording

Commerce revenue increased by$5.8 million for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. This increase was primarily driven by sales volume from existing and new customers.

Current wording

Commerce revenue increased by$4.4 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. This increase was primarily driven by sales volume from existing and new customers.

Previous wording

Direct to Consumer and Commerce gross profit decreased by$22.8 million and $0.5 million, respectivelyfor the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The decrease in Commerce gross profit is partly attributable to the opportunistic sell-through of surplus inventory, higher tariffs and inbound shipping costs.

Current wording

Direct to Consumer and Commerce gross profit decreased by$40.3 million and $0.7 million, respectivelyfor the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. The decrease in Direct to Consumer gross profit is primarily attributable to a decrease in revenue. The decrease in Commerce gross profit is partly attributable to the opportunistic sell-through of surplus inventory, higher tariffs and inbound shipping costs.

Previous wording

Gross profit as a percentage of revenue decreased 150 basis points for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. Direct to Consumer gross margin was 65.2%, 100 basis points higher and Commerce gross margin was 37.2%, 830 basis points lower than the same period last year, respectively. Excluding the impact of BARK Air, Direct to Consumer gross margin increased 270 basis points compared to the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements and plan mix changes.

Current wording

Gross profit as a percentage of revenue decreased 110 basis points for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. Direct to Consumer gross margin was 65.6%, 70 basis points higher than the same period last year. Excluding the impact of BARK Air, Direct to Consumer gross margin increased 230 basis points compared to the same period last year. The increase in Direct to Consumer gross margin is primarily attributable to product cost improvements and plan mix changes.

Previous wording

Commerce gross margin was 37.2%, 830 basis points lower than the same period last year. The decrease in Commerce gross margin is primarily attributable to opportunistic sell-through of surplus inventory, changes in customer mix, and, to a lesser extent, timing of our tariff mitigation strategies in the current period.

Current wording

Commerce gross margin was 40.2%, 470 basis points lower than the same period last year. The decrease in Commerce gross margin is primarily attributable to opportunistic sell-through of surplus inventory, and changes in customer mix. The decrease was partially offset by our tariff mitigation strategies in the current period.

Previous wording

General and administrative expense decreased by $12.1 million, or 9.6%, for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. This decrease from the prior period was primarily due to: decreased shipping and fulfillment costs of $5.2 million attributable to lower direct to consumer volumes, decreased compensation expense of $5.7 million primarily due to a decrease in headcount, decreased impairment expense of $1.4 million, and decreased professional and legal fees of $0.7 million.

Current wording

General and administrative expense decreased by $21.8 million, or 11.4%, for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. This decrease from the prior period was primarily due to: decreased shipping and fulfillment costs of $12.8 million attributable to lower direct to consumer volumes, decreased compensation expense of $7.0 million primarily due to a decrease in headcount, decreased impairment expense of $1.1 million, and decreased professional and legal fees of $0.9 million.

Previous wording

Advertising and marketing expense decreased by $8.5 million, or 21.8%, for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The decrease during the period is attributable to decreased Direct to Consumer marketing spend.

Current wording

Advertising and marketing expense decreased by $19.8 million, or 29.8%, for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. The decrease during the period is attributable to decreased Direct to Consumer marketing spend.

Previous wording

Other income (expense), net increased by $1.7 million for the six months ended September 30, 2025 compared to the six months ended September 30, 2024. The increase in other income (expense), net, was primarily due to the decrease in the fair value of our warrant liabilities of $1.6 million.

Current wording

Other income (expense), net increased by $1.9 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. The increase in other income (expense), net, was primarily due to the decrease in the fair value of our warrant liabilities of $1.6 million.

Previous wording

We calculate Free Cash Flow as net cash provided by (used in) operating activities less capital expenditures.

Current wording

We calculate Free Cash Flow as net cash (used in) provided by operating activities less capital expenditures.

Previous wording

(3)Includes consulting fees related to technology transformation activities, and payroll costs for employees that dedicate significant time to this project. We believe that these costs are discrete and non-recurring in nature, as they relate to a one-time unification of our product offerings on our new commerce platform. As such, they are not normal, recurring operating expenses and are not reflective of ongoing trends in the cost of doing business.

Current wording

(3)Includes consulting fees related to technology transformation activities, and payroll costs for employees that dedicate significant time to this project. We believe that these costs are discrete and non-recurring in nature, as they mainly relate to a one-time unification of our product offerings on our new commerce platform. As such, they are not normal, recurring operating expenses and are not reflective of ongoing trends in the cost of doing business.

Previous wording

(4) For the three months ended September 30, 2025, other items is comprised of executive transition costs including recruiting costs of $0.1 million. For the three months ended September 30, 2024, other items is comprised of executive transition costs including recruiting costs of less than $0.1 million, costs associated with the share repurchase program of less than $0.1 million, and duplicate headquarters rent of less than $0.1 million. For the six months ended September 30, 2025, other items is comprised of executive transition costs including recruiting costs of $0.1 million and costs associated with the share repurchase program of less than $0.1 million. For the six months ended September 30, 2024, other items is comprised of executive transition costs including recruiting costs of $0.4 million, non-recurring retention payments to management of $0.2 million, costs associated with the share repurchase program of $0.2 million, and duplicate headquarters rent of less than $0.1 million.

Current wording

(4) For the three months ended December 31, 2025, other items is comprised of executive transition costs including recruiting costs of $0.1 million. For the three months ended December 31, 2024, other items is comprised of executive transition costs including recruiting costs of less than $0.1 million, costs associated with the stock repurchase program of less than $0.1 million, and duplicate headquarters rent of less than $0.1 million. For the nine months ended December 31, 2025, other items is comprised of executive transition costs including recruiting costs of $0.3 million and costs associated with the stock repurchase program of less than $0.1 million. For the nine months ended December 31, 2024, other items is comprised of executive transition costs including recruiting costs of $0.5 million, costs associated with the stock repurchase program of $0.3 million, and duplicate headquarters rent of less than $0.1 million.

Previous wording

Since inception, we have funded our operations with proceeds from sales of our capital stock and proceeds from borrowings in addition to cash generated by our operations. As of September 30, 2025, we had cash and cash equivalents of approximately $63.4 million. We expect that our cash and cash equivalents, together with cash provided by our operating activities and proceeds from borrowings (as defined below), will be sufficient to fund our operations for at least the next 12 months. We are required to comply with certain financial and non-financial covenants related to our borrowing agreements, which we expect to be in compliance with during the next 12 months. Our future capital requirements will depend on many factors, including our pace of new and existing customer growth and our investments in partnerships and unexplored channels. We may be required to seek additional equity or debt financing.

Current wording

Since inception, we have funded our operations with proceeds from sales of our capital stock and proceeds from borrowings in addition to cash generated by our operations. As of December 31, 2025, we had cash and cash equivalents of approximately $21.7 million. We expect that our cash and cash equivalents, together with cash provided by our operating activities and proceeds from borrowings, will be sufficient to fund our operations for at least the next 12 months. We are required to comply with certain financial and non-financial covenants related to our borrowing agreements, which we expect to be in compliance with during the next 12 months. Our future capital requirements will depend on many factors, including our pace of new and existing customer growth and our investments in partnerships and unexplored channels. We may be required to seek additional equity or debt financing.

Previous wording

On November 27, 2020, the Company issued $75.0 million aggregate principal amount of 2025 Convertible Notes (the “2025 Convertible Notes”) to Magnetar Capital, LLC (“Magnetar”) under an indenture, dated as of November 27, 2020, between Legacy BARK and U.S. Bank National Association, as trustee and collateral agent (the “Indenture”). The Company received net proceeds of approximately $74.7 million from the sale of the 2025 Convertible Notes, after deducting fees and expenses of approximately $0.3 million. The Company recorded the expenses associated with the issuance of the 2025 Convertible Notes as a discount to the note and will amortize the expenses over the term of the note.

Current wording

On November 27, 2020, the Company issued $75.0 million aggregate principal amount of 2025 Convertible Notes (the “2025 Convertible Notes”) to Magnetar Capital, LLC (“Magnetar”) under an indenture, dated as of November 27, 2020, between Legacy BARK and U.S. Bank National Association, as trustee and collateral agent (the “Indenture”). The Company received net proceeds of approximately $74.7 million from the sale of the 2025 Convertible Notes, after deducting fees and expenses of approximately $0.3 million. The Company recorded the expenses associated with the issuance of the 2025 Convertible Notes as a discount to the note and amortized the expenses over the term of the note.

Previous wording

On November 2, 2023, the Company repurchased $45.0 million of the $83.5 million of outstanding aggregate principal amount of 5.50% Convertible Secured Notes due 2025 (the “2025 Convertible Notes”) from entities affiliated with Magnetar Financial, LLC (collectively, the “Holders”), pursuant to the terms and conditions of a negotiated notes purchase agreement (the “2023 Agreement”) among the Company and the Holders.

Current wording

On November 2, 2023, the Company repurchased $45.0 million of the $83.5 million of outstanding aggregate principal amount of 5.50% Convertible Secured Notes due 2025 from entities affiliated with Magnetar Financial, LLC (collectively, the “Holders”), pursuant to the terms and conditions of a negotiated notes purchase agreement (the “2023 Agreement”) among the Company and the Holders.

Previous wording

Pursuant to the 2023 Agreement, the Company repurchased $45.0 million in aggregate principal amount of the 2025 Convertible Notes plus $2.2 million of accrued and unpaid interest thereon to, but excluding the repurchase date, from the Holders for a total cash purchase price of $44.4 million. In addition, $1.0 million of unamortized deferred financing fees were derecognized from the Company’s balance sheet on the date of extinguishment. The accelerated deferred financing fees were recognized as a component of gain on extinguishment of debt. The Company recognized a gain on debt extinguishment of $1.8 million in connection with the repurchase. In the unlikely event that a Change of Control (as defined in the Indenture) of the Company occurs at any time after the date of the 2023 Agreement and prior to the December 1, 2025 maturity date of the Notes, the Holders are also entitled to receive an additional cash “true-up” payment from the Company, totaling, in the aggregate for all Holders, either (i) $11.3 million in the event that the Company elects to redeem all of the Notes outstanding at the time of such Change of Control or (ii) $4.5 million in the event that the Holders elect to require the Company to repurchase all of the 2025 Convertible Notes outstanding at the time of such Change of Control, in each event, in accordance with the terms and conditions specified in the Agreement.

Current wording

Pursuant to the 2023 Agreement, the Company repurchased $45.0 million in aggregate principal amount of the 2025 Convertible Notes plus $2.2 million of accrued and unpaid interest thereon to, but excluding the repurchase date, from the Holders for a total cash purchase price of $44.4 million. In addition, $1.0 million of unamortized deferred financing fees were derecognized from the Company’s balance sheet on the date of extinguishment. The accelerated deferred financing fees were recognized as a component of gain on extinguishment of debt. The Company recognized a gain on debt extinguishment of $1.8 million in connection with the repurchase.

Previous wording

Western Alliance Bank—Line of Credit

Current wording

Western Alliance Bank—Revolving Line of Credit

Previous wording

The Credit Facility has a borrowing base subject to an amount equal to eighty percent (80.00%) of the Company’s trailing three months of subscription revenue and an amount equal to (80.00%) of certain of the Company’s customer accounts receivable when a collateral audit is performed and sixty percent (60.00%) when no such collateral audit is performed. Western Alliance has first perfected security in substantially all of the Company’s assets, including its rights to its intellectual property.

Current wording

The Credit Facility has a borrowing base subject to an amount equal to eighty percent (80.00%) of the Company’s trailing three months of subscription revenue and an amount equal to eighty percent (80.00%) of certain of the Company’s customer accounts receivable when a collateral audit is performed and sixty percent (60.00%) when no such collateral audit is performed. Western Alliance has first perfected security in substantially all of the Company’s assets, including its rights to its intellectual property.

Previous wording

The Credit Facility requires the Company to comply with certain financial and performance covenants, including, among other things, minimum cash deposits with Western Alliance. The Credit Facility also contains affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, making payments in respect of subordinated debt or our 2025 Convertible Notes, incurring indebtedness, making loans and investments, incurring liens, or entering into mergers, asset sales and transactions with affiliates.

Current wording

The Credit Facility requires the Company to comply with certain financial and performance covenants, including, among other things, minimum cash deposits with Western Alliance. The Credit Facility also contains affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, making payments in respect of subordinated debt, incurring indebtedness, making loans and investments, incurring liens, or entering into mergers, asset sales and transactions with affiliates.

Previous wording

The following table summarizes our cash flows for the six months ended September 30, 2025 and 2024:

Current wording

The following table summarizes our cash flows for the nine months ended December 31, 2025 and 2024:

Previous wording

For the six months ended September 30, 2025, net cash used in operating activities was $23.5 million. The $23.5 million of net cash used in operating activities consisted of net loss of $17.7 million adjusted for non-cash charges totaling$15.8 million and a net increase of $21.6 million in our net operating assets and liabilities. The non-cash charges primarily consisted of$7.3 million for stock based compensation, and depreciation and amortization of $5.1 million. The increase in our net operating assets and liabilities was primarily driven by an increase in inventory of $13.8 million and an increase in accounts receivable of $7.5 million.

Current wording

For the nine months ended December 31, 2025, net cash used in operating activities was $21.8 million. The $21.8 million of net cash used in operating activities consisted of net loss of $26.3 million adjusted for non-cash charges totaling$22.5 million and a net decrease of $17.9 million in our net operating assets and liabilities. The non-cash charges primarily consisted of$10.9 million for stock based compensation, and depreciation and amortization of $7.2 million. The decrease in our net operating assets and liabilities was primarily driven by an increase in inventory of $3.9 million, an increase in accounts receivable of $2.7 million and a net decrease in accounts payable and accrued expenses of $4.3 million.

Previous wording

For the six months ended September 30, 2024, net cash provided by operating activities was $4.6 million. The $4.6 million of net cash provided by operating activities consisted of net loss of $15.3 million adjusted for non-cash charges totaling $18.7 million and a net increase of $1.2 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $0.9 million for changes in fair value of warrants, $5.9 million for stock based compensation, impairment of $2.1 million, depreciation and amortization of $5.7 million, and increase in the provision for inventory obsolescence of $1.4 million. The increase in our net operating assets and liabilities was primarily driven by higher accounts payable and accrued expenses of $22.9 million, offset by and an increase in inventory of $5.6 million and an increase in accounts receivable of $9.2 million.

Current wording

For the nine months ended December 31, 2024, net cash provided by operating activities was $3.2 million. The $3.2 million of net cash provided by operating activities consisted of net loss of $26.8 million adjusted for non-cash charges totaling $28.1 million and a net increase of $1.9 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $0.7 million for changes in fair value of warrants, $9.8 million for stock based compensation, impairment of $2.1 million, depreciation and amortization of $8.4 million, paid in kind interest on convertibles notes of $2.2 million, and an increase in the provision for inventory obsolescence of $1.1 million. The increase in our net operating assets and liabilities was primarily driven by higher accounts payable and accrued expenses of $26.7 million, offset by and an increase in inventory of $7.3 million and an increase in accounts receivable of $3.7 million.

Previous wording

For the six months ended September 30, 2025 and 2024, net cash used in investing activities was $2.6 million and $3.9 million, respectively, primarily due to software development costs and capital expenditures.

Current wording

For the nine months ended December 31, 2025 and 2024, net cash used in investing activities was $2.7 million and $4.4 million, respectively, primarily due to software development costs and capital expenditures.

Previous wording

For the six months ended September 30, 2025 and 2024, net cash used in financing activities was $2.8 million and $6.5 million, respectively, primarily due to payments and corresponding excise tax related to the repurchase of common stock.

Current wording

For the nine months ended December 31, 2025, net cash used in financing activities was $45.8 million, primarily due to the repurchase of the 2025 Convertible Notes of $42.9 million and $1.8 million in payments to repurchase common stock.