Grove Collaborative Holdings, Inc.

Previous wording

We operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our Grove-owned brands (“Grove Brands”) and other leading natural and mission-based CPG brands, providing consumers with a selection of curated products across many categories and brands. We refer to this part of our business as “DTC.” In the fourth quarter of 2024, we made the decision to exit the business of selling Grove Co. products in brick and mortar retail channels. We expect our exit from brick and mortar retail to improve our profitability while having an insignificant impact on our revenue, and to be completed in the second half of 2025.

Current wording

We operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our Grove-owned brands (“Grove Brands”) and other leading natural and mission-based CPG brands, providing consumers with a selection of curated products across many categories and brands. We refer to this part of our business as “DTC.” In the fourth quarter of 2024, we made the decision to exit the business of selling Grove Co. products in brick and mortar retail channels. We expect our exit from brick and mortar retail to improve our profitability while having an insignificant impact on our revenue, and to be completed by the end of 2025.

Previous wording

Grove is a public benefit corporation and a Certified B Corporation, meaning we adhere to third party standards for prioritizing social, environmental, and community well-being. We believe that improved innovation grows both revenue and, over the long term, can expand margins as our innovation has historically tended to be both market expanding and margin accretive. Since inception, we have invested heavily in building out both our e-commerce platform and Grove Brands, and over this period we have operated at a loss. We have an accumulated deficit of $655.7 million as of June 30, 2025.

Current wording

Grove is a public benefit corporation and a Certified B Corporation, meaning we adhere to third party standards for prioritizing social, environmental, and community well-being. We believe that improved innovation grows both revenue and, over the long term, can expand margins as our innovation has historically tended to be both market expanding and margin accretive. Since inception, we have invested heavily in building out both our e-commerce platform and Grove Brands, and over this period we have operated at a loss. We have an accumulated deficit of $658.6 million as of September 30, 2025.

Previous wording

On July 4, 2025, the tax law referred to as One, Big, Beautiful, Bill Act (“OBBB”) was signed into law, which includes comprehensive U.S. corporate tax legislation. The legislation includes the modification and extension of prior tax law under the Tax Cuts and Jobs Act (“TCJA”) and the introduction of new provisions. Examples include the extension of so-called permanently restoring bonus depreciation allowances, permanent changes in the limitations for deducting business interest expense and permanent expensing of domestic research and development costs. The impact on current and deferred taxes for tax law changes is reported in continuing operations in the interim period which includes the enactment date. We have done a preliminary analysis of the changes impacting our business and has determined that the aggregate impact, assuming various state tax legislation conforms to the OBBB, would not have a material impact. We will continue to assess the tax accounting impacts as more information is made available and will record the tax impact, if any, in the third quarter of 2025.

Current wording

On July 4, 2025, the tax law referred to as One, Big, Beautiful, Bill Act (“OBBB”) was signed into law, which includes comprehensive U.S. corporate tax legislation. The legislation includes the modification and extension of prior tax law under the Tax Cuts and Jobs Act (“TCJA”) and the introduction of new provisions. Examples include the extension of so-called permanently restoring bonus depreciation allowances, permanent changes in the limitations for deducting business interest expense and permanent expensing of domestic research and development costs. The impact on current and deferred taxes for tax law changes is reported in continuing operations in the interim period which includes the enactment date. We have performed an analysis of the changes impacting our business and have determined that the aggregate impact, assuming various state tax legislation conforms to the OBBB, does not have a material impact.

Previous wording

We determine our number of DTC Total Orders by counting the number of customer orders submitted through our website and mobile application that have been shipped within the period. The metric includes orders that have been refunded and excludes reshipments of customer orders for any reason including damaged and missing products. Refunded orders are included in DTC Total Orders as we believe this provides more meaningful order management performance metrics, including fulfillment cost efficacy and refund rates. Changes in DTC Total Orders in a reporting period capture both the inflow of new customers, changes in order frequency of existing customers and customer attrition. We view the number of Total DTC Orders as a key indicator of trends in our DTC platform, and our future success in this channel will depend in part on our ability to drive growth through new customer acquisition and by increasing the engagement and retention of existing customers. In the three and six months ended June 30, 2025, reduced DTC Total Orders is largely the result of lower advertising spend across 2024 and prior years which in turn led to fewer new customer acquisitions and therefore fewer repeat customer orders due to the recurring order nature of the business, and temporary disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers.

Current wording

We determine our number of DTC Total Orders by counting the number of customer orders submitted through our website and mobile application that have been shipped within the period. The metric includes orders that have been refunded and excludes reshipments of customer orders for any reason including damaged and missing products. Refunded orders are included in DTC Total Orders as we believe this provides more meaningful order management performance metrics, including fulfillment cost efficacy and refund rates. Changes in DTC Total Orders in a reporting period capture both the inflow of new customers, changes in order frequency of existing customers and customer attrition. We view the number of Total DTC Orders as a key indicator of trends in our DTC platform, and our future success in this channel will depend in part on our ability to drive growth through new customer acquisition and by increasing the engagement and retention of existing customers. In the three and nine months ended September 30, 2025, reduced DTC Total Orders is largely the result of lower advertising spend across 2024 and prior years which in turn led to fewer new customer acquisitions and therefore fewer repeat customer orders due to the recurring order nature of the business, and disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers, which counteracted the increase in advertising spend in the three and nine months ended September 30, 2025.

Previous wording

As of the last day of each reporting period, we determine our number of DTC Active Customers by counting the number of individual customers who submitted orders through our DTC platform, and for whom an order has shipped, at least once during the preceding 364-day period. The change in active customers in a reporting period captures both the inflow of new customers as well as the outflow of customers who have not made a purchase in the last 364 days. We view the number of active customers as one of the key indicators of growth in our DTC channel. In the three and six months ended June 30, 2025, reduced DTC Active Customers is largely the result of lower advertising spend across 2024 and prior years, which in turn led to fewer new customer acquisitions and fewer repeat orders.

Current wording

As of the last day of each reporting period, we determine our number of DTC Active Customers by counting the number of individual customers who submitted orders through our DTC platform, and for whom an order has shipped, at least once during the preceding 364-day period. The change in active customers in a reporting period captures both the inflow of new customers as well as the outflow of customers who have not made a purchase in the last 364 days. We view the number of active customers as one of the key indicators of growth in our DTC channel. In the three and nine months ended September 30, 2025, the reduction in DTC Active Customers is largely the result of lower advertising spend across 2024 and prior years, which in turn led to fewer new customer acquisitions and fewer repeat orders. Additionally, the decrease is also due in part to disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers.

Previous wording

We define DTC Net Revenue Per Order as our DTC Total Net Revenue in a given reporting period, divided by the DTC Total Orders in that period. We view DTC Net Revenue per Order as a key indicator of the performance of our DTC business. DTC Net Revenue Per Order decreased in the three and six months ended June 30, 2025 compared to the prior year comparative periods as a result of an increase in lower value recurring orders, the elimination of certain customer fees in 2024, partially offset by improved promotional strategies resulting in reduced discounts offered to customers.

Current wording

We define DTC Net Revenue Per Order as our DTC Total Net Revenue in a given reporting period, divided by the DTC Total Orders in that period. We view DTC Net Revenue per Order as a key indicator of the performance of our DTC business. DTC Net Revenue Per Order remained consistent in the three months ended September 30, 2025 compared to the prior year comparative period. For the nine months ended September 30, 2025, DTC Net Revenue Per Order decreased as a result of an increase in lower value recurring orders and the elimination of certain customer fees in 2024, partially offset by improved promotional strategies resulting in reduced discounts offered to customers.

Previous wording

(1)Restructuring expenses for the three months ended June 30, 2024 consisted of $1.2 million of severance-related charges, $0.7 million of asset impairment charges and $0.3 million of costs related to the closure of our facility in Missouri. Restructuring expenses for the six months ended June 30, 2024 consisted of a $3.1 million gain from the modification of our lease at our San Francisco headquarters offset by $1.5 million in severance-related charges, $0.7 million of asset impairment charges and $0.3 million of costs related to the closure of our facility in Missouri.

Current wording

(1)Restructuring expenses for the three months ended September 30, 2024 consisted solely of costs related to the move to a new distribution facility in Nevada. Restructuring expenses for the nine months ended September 30, 2024 consisted of a $3.1 million gain from the modification of our lease at our San Francisco headquarters offset by $1.5 million in severance-related charges and $2.1 million of costs related to the closure of our facility in Missouri and our move to a new distribution facility in Nevada.

Previous wording

Selling, general and administrative expenses consist primarily of compensation and benefit costs for personnel involved in general corporate functions, including stock-based compensation expense, and certain fulfillment costs, as further outlined below. Selling, general and administrative expenses also include the allocated facilities, equipment, depreciation and overhead costs, marketing costs including qualified cost of credits issued through our referral program, costs associated with our customer service operation, and costs of environmental offsets. Selling, general and administrative expenses have declined for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 as a result of decreases in fulfillment costs largely driven by lower sales and our cost management initiatives.

Current wording

Selling, general and administrative expenses consist primarily of compensation and benefit costs for personnel involved in general corporate functions, including stock-based compensation expense, and certain fulfillment costs, as further outlined below. Selling, general and administrative expenses also include the allocated facilities, equipment, depreciation and overhead costs, marketing costs including qualified cost of credits issued through our referral program, costs associated with our customer service operation, and costs of environmental offsets. Selling, general and administrative expenses have declined for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, as a result of decreases in fulfillment costs largely driven by lower sales and our cost management initiatives. In November 2025, we executed a reduction in force as part of an initiative to streamline selling, general, and administrative expenses, which is expected to lower our ongoing cost structure and deliver savings beginning in the fourth quarter. While these actions are anticipated to generate longer-term efficiencies, the immediate cash savings are expected to be offset by severance and other costs incurred related to the reduction in force.

Previous wording

Change in fair values of derivative liabilities consists primarily of changes in fair values of Earn-Out Shares, Public Warrants and Private Placement Warrant and the derivative liability related to our term debt we extinguished in 2024 (the “Structural Derivative Liability”). Changes in the fair value of our derivative liabilities may fluctuate significantly in future periods primarily due to fluctuations in the fair value of our common stock.

Current wording

Change in fair values of derivative liabilities consists primarily of changes in fair values of Earn-Out Shares, Public Warrants and Private Placement Warrant and the derivative liability related to our term debt we extinguished in 2024 (the

Previous wording

Comparisons of the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Comparisons of the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

Revenue decreased by $8.1 million, or 15%, and $18.1 million, or 17%, for the three and six months ended June 30, 2025, respectively, as compared to the three and six months ended June 30, 2024. This decline was primarily driven by a decrease in DTC Total Orders from lower advertising expenses in previous periods, temporary disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers and decreases in DTC Net Revenue Per Order.

Current wording

Revenue decreased by $4.5 million, or 9%, and $22.6 million, or 15%, for the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024, respectively. This decline was primarily driven by a decrease in DTC Total Orders from lower advertising expenses in previous periods and temporary disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers for both the three and nine months ended September 30, 2025, respectively, compared to the prior year comparative periods.

Previous wording

Cost of goods sold decreased by $4.4 million, or 18%, for the three months ended June 30, 2025, respectively, as compared to the three months ended June 30, 2024, primarily due to a decrease in DTC Total Orders and lower cost of goods per order.

Current wording

Cost of goods sold decreased by $2.3 million, or 10%, and $10.0 million, or 14%, for the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024, primarily due to a decrease in DTC Total Orders.

Previous wording

Gross margin in the three months ended June 30, 2025 increased by 155 basis points, compared to the three months ended June 30, 2024, primarily due to improved promotional strategies resulting in reduced discounts offered to customers and increases in third-party vendor funding, offset by the elimination of certain per order fees charged to our customers.

Current wording

Gross margin in the three months ended September 30, 2025 increased by 30 basis points, compared to the three months ended September 30, 2024, primarily due to improved promotional strategies resulting in reduced discounts offered to customers and a product sales mix favoring higher margin products.

Previous wording

Gross margin in the six months ended June 30, 2025 decreased by 52 basis points, compared to the six months ended June 30, 2024, due to the elimination of certain per order fees charged to our customers, partially offset by improved promotional strategies resulting in reduced discounts offered to customers.

Current wording

Gross margin in the nine months ended September 30, 2025 decreased by 28 basis points, compared to the nine months ended September 30, 2024, due to the elimination of certain per order fees charged to our customers, partially offset by improved promotional strategies resulting in reduced discounts offered to customers.

Previous wording

Advertising expenses increased by $0.3 million, or 12%, and $1.0 million, or 23% for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024 driven by increases in online advertising and television advertising expenses, offset by decreases in performance partnerships and shopper marketing expenses.

Current wording

Advertising expenses increased by $0.3 million, or 12%, and $1.4 million, or 19% for the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024 driven by increases in online advertising and television advertising expenses, offset by decreases in performance partnerships and shopper marketing expenses following our exit from brick-and-mortar retail.

Previous wording

Product development expenses decreased by $3.2 million, or 59%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to a $1.3 million decrease in amortization expenses related to certain internally developed software which was fully amortized at the end of fiscal year 2024, a $1.1 million decrease in severance-related expenses and a $0.8 million decrease in salaries from reductions in headcount.

Current wording

Product development expenses decreased by $3.2 million, or 66%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to a $2.1 million decrease in amortization expenses related to certain internally developed software which was fully amortized at the end of fiscal year 2024, a $0.7 million decrease in salaries from reductions in headcount and a $0.3 million decrease in consulting fees.

Previous wording

Product development expenses decreased by $5.1 million, or 56%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to a $2.2 million decrease in amortization expenses related to certain internally developed software which was fully amortized at the end of fiscal year 2024, a $1.9 million decrease in salaries and stock based compensation from reductions in headcount and a $1.1 million decrease in severance-related expenses.

Current wording

Product development expenses decreased by $8.3 million, or 60%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to a $4.2 million decrease in amortization expenses related to certain internally developed software which was fully amortized at the end of fiscal year 2024, a $2.7 million decrease in salaries and stock based compensation from reductions in headcount and a $1.1 million decrease in severance-related expenses.

Previous wording

Selling, general and administrative expenses decreased by $6.8 million, or 13%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. Fulfillment costs decreased by $3.1 million due to a lower volume of orders. Additionally, stock-based compensation decreased by $3.8 million and corporate salaries decreased by

Current wording

Selling, general and administrative expenses decreased by $3.5 million, or 14%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Stock-based compensation decreased by $1.5 million and corporate salaries decreased by $0.5 million, both driven by reductions in headcount. Additionally, fulfillment costs decreased by $0.9 million due to a lower volume of orders.

Previous wording

Selling, general and administrative expenses decreased by $4.2 million, or 15%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Fulfillment costs decreased by $1.0 million due to a lower volume of orders. Additionally, stock-based compensation decreased by $1.9 million and corporate salaries decreased by $0.3 million both driven by reductions in headcount, depreciation expense decreased by $0.7 million primarily due to accelerated depreciation associated with the closure of our Missouri facility in the prior period that did not recur in the current period, and asset impairment charges decreased by $0.7 million related to the asset impairment in June 2024. These decreases were offset by a $0.7 million increase in certain fees and expenses to support our acquisitions.

Current wording

Selling, general and administrative expenses decreased by $10.2 million, or 13%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Stock-based compensation decreased by $5.4 million and corporate salaries decreased by $1.2 million, both driven by reductions in headcount. Additionally, fulfillment costs decreased by $4.0 million due to a lower volume of orders. Depreciation expense decreased by $2.0 million primarily due to accelerated depreciation associated with the closure of our Missouri facility in the prior period that did not recur in the current period, and asset impairment charges decreased by $0.7 million related to the asset impairment in June 2024. These decreases were offset by the absence of a $3.1 million gain recorded in the prior period related to a partial lease termination of our San Francisco office that occurred in March 2024 and a $1.2 million increase in certain fees and expenses to support our acquisitions.

Previous wording

Interest expense decreased by $3.8 million, or 93%, and $7.6 million, or 92%, for the three and six months ended June 30, 2025, respectively, as compared to the three and six months ended June 30, 2024 primarily due to the extinguishment of our term debt facility in 2024.

Current wording

Interest expense decreased by $2.7 million, or 90%, and $10.2 million, or 92%, for the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024 primarily due to the extinguishment of our term debt facility in 2024.

Previous wording

The change in the fair value of derivative liabilities for the three and six months ended June 30, 2025, was driven by the changes in our stock price from December 31, 2024 through June 30, 2025. The change in the fair value of derivative liabilities for the three and six months ended June 30, 2024, was driven by the changes in our stock price from December 31, 2023 through June 30, 2024 and by changes in the fair value of the Structural Derivative Liability related to our term loan we extinguished in 2024.

Current wording

The change in the fair value of derivative liabilities for the three and nine months ended September 30, 2025, was driven by the changes in our stock price from December 31, 2024 through September 30, 2025. The change in the fair value of derivative liabilities for the three and nine months ended September 30, 2024, was driven by the changes in our stock price from December 31, 2023 through September 30, 2024 and by changes in the fair value of the Structural Derivative Liability related to our term loan we extinguished in 2024.

Previous wording

Other income decreased by $0.9 million, or 89%, and $1.8 million, or 86%, for the three and six months ended June 30, 2025, respectively, as compared to the three and six months ended June 30, 2024, primarily due to lower on-hand cash as a result of the extinguishment of our term loan in 2024.

Current wording

Other income decreased by $0.5 million, or 83%, and $2.3 million, or 86%, for the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024, primarily due to lower on-hand cash as a result of the extinguishment of our term loan in 2024.

Previous wording

As of June 30, 2025, we had $10.0 million in unrestricted cash and cash equivalents (which excludes restricted cash of $3.9 million). We incurred negative cash flows from operating activities of $5.9 million for the six months ended June 30, 2025. We have incurred significant losses since inception and have an accumulated deficit of approximately $655.7 million. To date, we have funded our operations principally through redeemable convertible preferred stock and common stock financings, the incurrence of debt and the closing of the Business Combination. We have total outstanding indebtedness of $7.5 million as of June 30, 2025.

Current wording

As of September 30, 2025, we had $8.9 million in unrestricted cash and cash equivalents (which excludes restricted cash of $3.4 million). We incurred negative cash flows from operating activities of $6.9 million for the nine months ended September 30, 2025. We have incurred significant losses since inception and have an accumulated deficit of approximately $658.6 million. To date, we have funded our operations principally through redeemable convertible preferred stock and common stock financings, the incurrence of debt and the closing of the Business Combination. We have total outstanding indebtedness of $7.5 million as of September 30, 2025.

Previous wording

On March 10, 2023, we entered into the Siena Revolver (defined below) with Siena Lending Group, LLC (“Siena”) which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The total borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory and accounts receivable balances and other limitations as specified in the agreement. Additional borrowing capacity from the Siena Revolver was $0.4 million as of June 30, 2025. On May 8, 2025, the Company entered into an amendment to the Siena Revolver (the “Amendment No. 3”) which, among other things, extended the maturity date of the Siena Revolver to April 10, 2028 and eliminated the financial covenant applicable to the Siena Revolver.

Current wording

On March 10, 2023, we entered into the Siena Revolver (defined below) with Siena Lending Group, LLC (“Siena”) which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The total borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory, accounts receivable balances and certain qualifying cash balances held with third party processors and other limitations as specified in the agreement. Additional borrowing capacity from the Siena Revolver was $0.7 million as of September 30, 2025. On May 8, 2025, the Company entered into a third amendment to the Siena Revolver which, among other things, extended the maturity date of the Siena Revolver to April 10, 2028 and eliminated the financial covenant applicable to the Siena Revolver. On September 26, 2025, the Company entered into a fourth amendment, which among other things, amended the Siena Revolver to include certain qualifying cash balances held with third party processors in the borrowing base, subject to such balances meeting eligibility criteria.

Previous wording

On July 18, 2022, we entered into the Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD. (“Yorkville”), whereby we have the right, but not the obligation, to sell to Yorkville up to $100.0 million of our shares of common stock, subject to certain conditions. On July 8, 2025, we and Yorkville amended the SEPA (the “Amended SEPA”) to extend the term to August 1, 2027. The shares of our common stock that may be issued under the Amended SEPA may be sold by us to the Yorkville at our discretion from time to time and sales of our common stock under the Amended SEPA will depend upon market conditions and other factors. Additionally, in no event may we sell more than 6,511,532 shares of our common stock to Yorkville under the Amended SEPA, which number of shares is equal to 19.99% of the shares of the Company's common stock outstanding immediately prior to the execution of the SEPA (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the Amended SEPA. Unless our average stock price exceeds $15.33, we will be unable to sell the full $100.0 million commitment to Yorkville without seeking stockholder approval to issue additional shares in excess of the Exchange Cap. As of June 30, 2025, we have sold 147,965 shares under the SEPA and there were 6,363,567 shares available to be sold to Yorkville under the Exchange Cap. As of July 31, 2025, under the terms of the SEPA we would be able to raise additional gross proceeds of approximately $8.7 million.

Current wording

On July 18, 2022, we entered into the SEPA, whereby we have the right, but not the obligation, to sell to Yorkville up to $100.0 million of our shares of common stock, subject to certain conditions. On July 8, 2025, we and Yorkville amended the SEPA (the “Amended SEPA”) to extend the term to August 1, 2027. The shares of our common stock that may be issued under the Amended SEPA may be sold by us to the Yorkville at our discretion from time to time and sales of our common stock under the Amended SEPA will depend upon market conditions and other factors. Additionally, in no event may we sell more than 6,511,532 shares of our common stock to Yorkville under the Amended SEPA, which number of shares is equal to 19.99% of the shares of the Company's common stock outstanding immediately prior to the execution of the SEPA (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the Amended SEPA. Unless our average stock price exceeds $15.33, we will be unable to sell the full $100.0 million commitment to Yorkville without seeking stockholder approval to issue additional shares in excess of the Exchange Cap. As of September 30, 2025, we have sold 147,965 shares under the SEPA and there were 6,363,567 shares available to be sold to Yorkville under the Exchange Cap. As of October 31, 2025, under the terms of the SEPA we would be able to raise additional gross proceeds of approximately $8.1 million.

Previous wording

Our most significant contractual obligations relate to our loan facility, purchase commitments on inventory and operating lease obligations on our fulfillment centers and corporate offices. As of June 30, 2025, we had $9.2 million of enforceable and legally binding inventory purchase commitments predominantly due within one year. For information on our contractual obligations for operating leases, see “Leases” in Note 7 of the Notes to our audited consolidated financial statements as of and for the years ended December 31, 2024 and December 31, 2023 included in Form 10-K filed with the SEC on March 19, 2025.

Current wording

Our most significant contractual obligations relate to our loan facility, purchase commitments on inventory and operating lease obligations on our fulfillment centers and corporate offices. As of September 30, 2025, we had $10.8 million of enforceable and legally binding inventory purchase commitments predominantly due within one year. For information on our contractual obligations for operating leases, see “Leases” in Note 7 of the Notes to our audited consolidated financial statements as of and for the years ended December 31, 2024 and December 31, 2023 included in Form 10-K filed with the SEC on March 19, 2025.

Previous wording

On March 10, 2023, we entered into a Loan and Security Agreement (the “Siena Revolver”) with Siena Lending Group, LLC which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The borrowing capacity under the Siena Revolver, as modified by the third amendment to the Siena Revolver (“Amendment No. 3”), is subject to certain conditions, including our inventory and accounts receivable balances and other limitations as specified in the agreement. If at any time the amount of outstanding borrowings under the Siena Revolver exceeds the borrowing capacity, we are required to prepay borrowings sufficient to eliminate the excess. As of June 30, 2025, there was an outstanding principal amount of $7.5 million and additional borrowing capacity from the Siena Revolver was $0.4 million.

Current wording

On March 10, 2023, we entered into a Loan and Security Agreement (the “Siena Revolver”) with Siena Lending Group, LLC which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory, accounts receivable balances and certain qualifying cash balances held with third party processors and other limitations as specified in the agreement. If at any time the amount of outstanding borrowings under the Siena Revolver exceeds the borrowing capacity, we are required to prepay borrowings sufficient to eliminate the excess. As of September 30, 2025, there was an outstanding principal amount of $7.5 million and additional borrowing capacity from the Siena Revolver was $0.7 million.

Previous wording

The interest rates applicable to borrowings under Amendment No. 3 are based on a fluctuating rate of interest measured by reference to either, at our option, (i) a Base Rate plate 3.25% or (ii) the term Secured Overnight Financing Rate (“Term SOFR”) then in effect plus 4.25%. The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) federal funds rate plus 0.50% and (3) 5.00% per annum. In accordance with the agreement, Siena has been provided with our periodic financial statements and updated projections to facilitate their ongoing assessment of the Company. Under Amendment No. 3, the Siena Revolver matures on April 10, 2028.

Current wording

The interest rates applicable to borrowings under the Siena Revolver are based on a fluctuating rate of interest measured by reference to either, at our option, (i) a Base Rate plate 3.25% or (ii) the term Secured Overnight Financing Rate (“Term SOFR”) then in effect plus 4.25%. The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) federal funds rate plus 0.50% and (3) 5.00% per annum. In accordance with the agreement, Siena has been provided with our periodic financial statements and updated projections to facilitate their ongoing assessment of the Company. The Siena Revolver matures on April 10, 2028.

Previous wording

Net cash used in operating activities of $5.9 million for the six months ended June 30, 2025 was primarily attributable to our net loss of $7.2 million, non-cash adjustments of $2.9 million, and a net increase in our operating assets and liabilities of $1.6 million. Non-cash adjustments consisted primarily of a $2.3 million stock-based compensation expense, $0.9 million in depreciation and amortization and $0.2 million in non-cash interest expense, offset by $0.4 million of inventory write-downs and a $0.2 million of change in fair value of derivative liabilities. The change in operating assets and liabilities primarily resulted from a $3.0 million decrease in accrued expenses and accounts payable, a $0.3 million decrease in deferred revenue and a $0.3 million decrease in other liabilities, offset by a $1.0 million decrease in inventory, a $0.6 million net decrease in operating lease right-of-use assets and liabilities and a $0.4 million decrease in prepaid expenses and other assets.

Current wording

Net cash used in operating activities of $6.9 million for the nine months ended September 30, 2025 was primarily attributable to our net loss of $10.1 million, non-cash adjustments of $4.3 million, and a net increase in our operating assets and liabilities of $1.0 million. Non-cash adjustments consisted primarily of a $3.5 million stock-based compensation expense, $1.3 million in depreciation and amortization and $0.3 million in non-cash interest expense, offset by $0.6 million of inventory write-downs and a $0.2 million of change in fair value of derivative liabilities. The change in operating assets and liabilities primarily resulted from a $3.2 million decrease in accrued expenses and accounts payable, a $1.2 million decrease in deferred revenue and a $0.2 million decrease in other liabilities, offset by a $2.0 million decrease in inventory, a $1.0 million decrease in prepaid expenses and other assets and a $0.6 million net decrease in operating lease right-of-use assets and liabilities.

Previous wording

Net cash used in operating activities of $10.8 million for the six months ended June 30, 2024 was primarily attributable to our net loss of $13.5 million, non-cash adjustments of $9.2 million, and net increase in our operating assets and liabilities of $6.5 million. Non-cash adjustments consisted primarily of a $6.5 million stock-based compensation expense, $4.6 million in depreciation and amortization activity, $1.9 million non-cash interest expense, and $0.7 million in asset impairment charges, offset by a $3.1 million gain on lease modification, $1.2 million of inventory write-downs and $0.2 million of change in fair value of derivative liabilities. The change in operating assets and liabilities primarily resulted from a $4.9 million net decrease in operating lease right-of-use assets and liabilities, a $3.5 million net decrease in accounts payable and accrued expenses, and a $0.4 million decrease in deferred revenue and other liabilities, offset by a $2.2 million decrease in inventory and $0.1 million increase in prepaid expenses and other assets.

Current wording

Net cash used in operating activities of $10.0 million for the nine months ended September 30, 2024 was primarily attributable to our net loss of $14.8 million, non-cash adjustments of $7.0 million, and net increase in our operating assets and liabilities of $2.2 million. Non-cash adjustments consisted primarily of a $9.3 million stock-based compensation expense, $7.4 million in depreciation and amortization activity, $2.8 million non-cash interest expense, partially offset by a $3.1 million gain on lease modification and $1.9 million of inventory write-downs. The change in operating assets and liabilities primarily resulted from a $4.7 million net decrease in operating lease right-of-use assets and liabilities, a $3.7 million net decrease in accounts payable and accrued expenses, and a $0.4 million decrease in deferred revenue and other liabilities, partially offset by a $6.1 million decrease in inventory.

Previous wording

Net cash used in investing activities of $3.8 million for the six months ended June 30, 2025 was primarily due to $2.8 million of cash paid for strategic acquisitions and $1.0 million for the purchase of property and equipment.

Current wording

Net cash used in investing activities of $4.0 million for the nine months ended September 30, 2025 was primarily due to $2.8 million of cash paid for strategic acquisitions and $1.1 million for the purchase of property and equipment.

Previous wording

Net cash used in investing activities of $0.9 million for the six months ended June 30, 2024 was primarily due to the capitalization of internally developed software costs.

Current wording

Net cash used in investing activities of $1.3 million for the nine months ended September 30, 2024 was primarily due to the capitalization of internally developed software costs, partially offset by proceeds from sale of property and equipment.

Previous wording

Net cash used in financing activities of $0.6 million for each of the six months ended June 30, 2025 and 2024 primarily consists of payments related to stock-based award activities during each period offset by proceeds related to our employee stock purchase plan.

Current wording

Net cash used in financing activities of $1.1 million for the nine months ended September 30, 2025 primarily consists of payments related to stock-based award activities during each period offset by proceeds related to our employee stock purchase plan.