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.” We recently 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 2025.

Current wording

We primarily operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our 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 and completed this exit in 2025. We expect our exit from brick-and-mortar retail to improve our profitability while having an insignificant impact on our revenue.

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 $648.5 million as of December 31, 2024. Beginning in the second half of 2022, we began to substantially reduce our operating expenses across the business in support of our efforts to become profitable. These expense reductions, particularly in advertising, have resulted in a substantial decline in our revenue.

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 ecommerce platform and Grove Brands, and over this period we have operated at a loss. We have an accumulated deficit of $660.2 million as of December 31, 2025.

Previous wording

As a part of our focus on reducing our operating expenses and focus on becoming profitable, we have recently implemented company-wide workforce restructurings and facilities reductions. In connection with the reorganizations, we recorded charges totaling $2.0 million and $3.8 million related to the reductions in our workforce, warehousing facilities and headquarters office footprint for the years ended December 31, 2024 and 2023, respectively.

Current wording

As a part of our focus on reducing our operating expenses and focus on becoming profitable, we have recently implemented company-wide workforce restructurings and facilities reductions. In connection with the reorganizations, we recorded charges totaling $1.9 million and $2.0 million related to the reductions in our workforce, warehousing facilities and headquarters office footprint for the years ended December 31, 2025 and 2024, respectively.

Previous wording

Our ability to attract new customers is a key factor for our future growth. To date we have successfully acquired new customers through online and offline marketing channels. In recent years, changes in the algorithms used for targeting and purchasing online advertising, changes to privacy and online tracking, changes to our purchase flow and subscription processes, supply and demand dynamics in the market, reductions in our advertising spend, and other factors have caused the cost of marketing on these channels to increase consistently. Failure to effectively adapt to changes in online marketing dynamics or changes to our internet platform, or to otherwise attract customers on a cost-efficient basis would adversely impact our path to revenue growth, our profitability and our operating results. Our ability to balance cost-efficient customer acquisitions while driving consumer awareness may impact the cost of our acquiring new customers, our profitability and our operating results.

Current wording

Our ability to attract new customers is a key factor for our future growth. In recent years, changes in the algorithms used for targeting and purchasing online advertising, changes to privacy and online tracking, changes to our purchase flow and subscription processes, supply and demand dynamics in the market, and other factors have caused the cost of marketing on these channels to increase consistently. Failure to effectively adapt to changes in online marketing dynamics or changes to our internet platform, or to otherwise attract customers on a cost-efficient basis would adversely impact our path to revenue growth, our profitability and our operating results. Our ability to balance cost-efficient customer acquisitions while driving consumer awareness may impact the cost of our acquiring new customers, our profitability and our operating results.

Previous wording

We believe we are in the early stages of realizing a substantial opportunity to transform the consumer products industry into a force for environmental and human good by creating and curating planet-first, high-performance brands and products. After experiencing high rates of revenue growth, in the last several years, we have substantially reduced our expense structure and operations in light of declining revenue, and as a result we have reduced our operating losses and cash consumption. To grow and achieve profitability over the longer term, we will need to re-invest to expand our DTC business and achieve a scale that will allow us to drive efficiencies in generating brand awareness, acquiring and retaining customers, creating operating leverage over headcount and other overhead, and fulfilling orders. Our recent gains in approaching profitability may not be sustainable in the near term due to the effects of steps we may take to drive growth or other factors. If we are unable to achieve profitable growth, our prospects may be materially and adversely affected.

Current wording

We believe we are in the early stages of realizing a substantial opportunity to transform the consumer products industry into a force for environmental and human good by creating and curating planet-first, high-performance brands and products. In recent years, we have substantially reduced our expense structure and operations in light of declining revenue, and as a result we have reduced our operating losses and cash consumption. To grow and achieve profitability over the longer term, we will need to re-invest to expand our DTC business and achieve a scale that will allow us to drive efficiencies in generating brand awareness, acquiring and retaining customers, creating operating leverage over headcount and other overhead, and fulfilling orders. Our recent gains in approaching profitability may not be sustainable in the near term due to the effects of steps we may take to drive growth or other factors. If we are unable to achieve profitable growth, our prospects may be materially and adversely affected.

Previous wording

Ability to Successfully Transition to Shopify

Current wording

Ability to Successfully Transition our ecommerce platform

Previous wording

In March 2025, we began migrating our ecommerce platform from our legacy internally-developed solution to Shopify, a third-party service provider, and to other service providers that offer certain ecommerce solutions that integrate with Shopify. To date, we have experienced and expect to continue experiencing disruptions to platform operations, including user experience, inventory management, fulfillment operations and payment processing.

Current wording

In March 2025, we began migrating our ecommerce platform from our legacy internally-developed solution to third party service providers that offer ecommerce solutions. We have completed the migration and are in the process of resolving issues identified after the migration while simultaneously working towards optimizing the customer experience. We expect this migration to provide us with significant advantages, such as enhanced scalability, access to advanced ecommerce functionalities, and improved security measures. To date, we have experienced and expect to continue experiencing disruptions to platform operations, including user experience, inventory management, fulfillment operations and payment processing, which has adversely affected our operating results and financial condition.

Previous wording

If our platform is successfully transitioned, we expect this migration to provide us with significant advantages, such as enhanced scalability, access to advanced ecommerce functionalities, and improved security measures. We believe the migration to Shopify provides a more streamlined user experience for our customers. This transition exposes us to vendor-specific risks, such as service disruptions, changes in pricing and inventory management, potential reduced flexibility in our ecommerce experience or alterations in the platform's features and execution and fulfillment risks as we migrate our customer experience to the new platform.

Current wording

This transition away from our legacy platform exposes us to vendor-specific risks, such as service disruptions, changes in pricing and inventory management, potential reduced flexibility in our ecommerce experience or alterations in the platform's features and execution and fulfillment risks as we migrate our customer experience to the new platform. Our ability to realize the expected benefits of this transition is substantially dependent upon our ability to address these issues.

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, excludes reshipments of customer orders for any reason including damaged and missing products, and excludes retail orders. 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 existing customer engagement. In the years ended December 31, 2024 and 2023, DTC Total Orders declined primarily due to our lower advertising spend strategy, resulting in fewer new customers and therefore fewer overall orders.

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, excludes reshipments of customer orders for any reason including damaged and missing products, and excludes retail orders. 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 existing customer engagement. In the year ended December 31, 2025, DTC Total Orders declined primarily due to our lower advertising spend in prior years, resulting in fewer new customers and therefore fewer overall orders. Additionally, DTC Total Orders was negatively impacted by technology disruptions to our DTC platform.

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 year ended December 31, 2024, DTC Active Customers declined primarily due to our lower advertising spend strategy, resulting in fewer new customers and therefore fewer overall 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 year ended December 31, 2025, DTC Active Customers declined primarily due to our lower advertising spend, resulting in fewer new customers and therefore fewer overall orders, and negative impacts from technology disruptions to our DTC platform.

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 increased in the year ended December 31, 2024 compared to the prior year comparative period as a result of increased number of products sold per order due to our expanded product offering.

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 had a slight improvement in the year ended December 31, 2025 compared to the prior year comparative period due to improved promotional strategies, as well as an increase in higher priced items in customer orders.

Previous wording

We calculate Adjusted EBITDA as net loss, adjusted to exclude: stock-based compensation expense; depreciation and amortization; changes in fair values of derivative liabilities; transaction costs allocated to derivative liabilities upon closing of the Business Combination; interest income; interest expense; restructuring costs; loss on extinguishment of debt; provision for income taxes and certain litigation and legal settlement expenses that we do not consider representative of our underlying operations. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net revenue. Because Adjusted EBITDA excludes these elements that are otherwise included in our GAAP financial results, this measure has limitations when compared to net loss determined in accordance with GAAP. Further, Adjusted EBITDA is not necessarily comparable to similarly titled measures used by other companies. For these reasons, investors should not consider Adjusted EBITDA in isolation from, or as a substitute for, net loss determined in accordance with GAAP.

Current wording

We calculate Adjusted EBITDA as net loss, adjusted to exclude: stock-based compensation expense; depreciation and amortization; changes in fair values of derivative liabilities; interest income; interest expense; restructuring costs; transaction related costs related to certain strategic merger & acquisition projects; loss on extinguishment of debt; provision for income taxes and certain litigation and legal settlement expenses that we do not consider representative of our underlying operations. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net revenue. Because Adjusted EBITDA excludes these elements that are otherwise included in our GAAP financial results, this measure has limitations when compared to net loss determined in accordance with GAAP. Further, Adjusted EBITDA is not necessarily comparable to similarly titled measures used by other companies. For these reasons, investors should not consider Adjusted EBITDA in isolation from, or as a substitute for, net loss determined in accordance with GAAP.

Previous wording

(1) Restructuring expenses for the year ended December 31, 2024 consisted of $3.1 million gain from our modification of the lease at our San Francisco headquarters offset by $1.3 million of costs related to our move to a new distribution facility in Nevada, $2.5 million in severance-related charges, and $1.3 million related to impairment of operating lease right-of-use assets. For the year ended December 31, 2023 restructuring expenses consisted of $2.5 million related to operating lease right-of-use and fixed asset impairment charges and $1.3 million in severance-related charges.

Current wording

(1) Restructuring expenses for the year ended December 31, 2025 consisted of $1.0 million in severance-related charges and $0.9 million related to the impairment of operating lease right-of-use assets and fixed assets of our San Francisco lease. Restructuring expenses for the year ended December 31, 2024 consisted of $3.1 million gain from our modification of the lease at our San Francisco headquarters offset by $1.3 million of costs related to our move to a new distribution facility in Nevada, $2.5 million in severance-related charges, and $1.3 million related to impairment of operating lease right-of-use assets.

Previous wording

While our historical financial results have included selling in brick-and-mortar retail channels, we have made the decision to exit those channels. We do not expect this decision to have a significant impact on our financial results. We expect revenue to remain approximately flat to down in the mid single digit percentage range in 2025 compared to 2024. We expect first quarter of 2025 revenue to be lower than revenue in the fourth quarter of 2024 due to seasonality and adverse impact from our Shopify transition. We expect revenue to improve in the second and third quarters of 2025 compared to the first quarter of 2025, leading to year over year growth in the fourth quarter of 2025.

Current wording

While our historical financial results have included selling in brick-and-mortar retail channels, we completed our exit from these channels in 2025.

Previous wording

Gross profit represents revenue less the cost of goods sold. Gross margin is gross profit expressed as a percentage of revenue. We generally record higher gross margins associated with sales of Grove Brands products compared to sales of third-party products. To help motivate first-time customers to purchase on our DTC platform, we generally offer higher discounts and free product offerings, and as a result, our overall margins can be adversely affected in periods of rapid new customer acquisition. Our gross margin also fluctuates from period-to-period based on promotional activity, product and channel mix, the timing of promotions and launches, and inbound transportation rates, among other factors. Our gross profit and gross margin may not be comparable with that of other retailers because we include certain fulfillment related costs in selling, general, and administrative expenses while other retailers may include these expenses in cost of goods sold.

Current wording

Gross profit represents revenue less the cost of goods sold. Gross margin is gross profit expressed as a percentage of revenue. To help motivate first-time customers to purchase on our DTC platform, we generally offer higher discounts and free product offerings, and as a result, our overall margins can be adversely affected in periods of rapid new customer acquisition. Our gross margin also fluctuates from period-to-period based on promotional activity, product and channel mix, the timing of promotions and launches, and inbound transportation rates, among other factors. Our gross profit and gross margin may not be comparable with that of other retailers because we include certain fulfillment related costs in selling, general, and administrative expenses while other retailers may include these expenses in cost of goods sold.

Previous wording

Advertising costs are expensed as incurred and consist primarily of our customer acquisition costs associated with online advertising, as well as advertising on television, direct mail campaigns and other media. Costs associated with the production of advertising are expensed when the first advertisement is shown. We expect to maintain advertising costs at current levels as a percent of revenue through 2025 focused on deploying spend efficiently across channels while managing cash flow.

Current wording

Advertising costs are expensed as incurred and consist primarily of our customer acquisition costs associated with online advertising, as well as advertising on television, direct mail campaigns and other media. Costs associated with the production of advertising are expensed when the first advertisement is shown.

Previous wording

Product development expenses are related to the ongoing support and maintenance of our proprietary technology, including our DTC platform, as well as amortization of capitalized, internally developed software, and related to the product and packaging innovation in our Grove Brands products. Product development expenses consist primarily of personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expense. Product development costs also include allocated facilities, equipment, depreciation and overhead costs. As a result of our restructuring efforts and decision to transition to the Shopify platform, we expect product development costs as a percentage of revenue to decrease throughout 2025.

Current wording

Product development expenses are related to the ongoing support and maintenance of our DTC platform, as well as amortization of capitalized, internally developed software and the product and packaging innovation in our Grove Brands products. Product development expenses consist primarily of personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expense. Product development costs also include allocated facilities, equipment, depreciation and overhead costs.

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 in 2024 as a result of decreases in fulfillment costs largely driven by lower sales and our cost management initiatives. We expect to continue to drive efficiencies in selling, general & administrative expenses throughout 2025.

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 in 2025 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. We anticipate this reduction in force will result in operating efficiencies for our business.

Previous wording

Fulfillment costs represent those costs incurred in operating and staffing our fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packing and preparing customer orders for shipment, outbound shipping and handling expenses, packing materials costs and payment processing and related transaction costs. These costs are included within selling, general and administrative expenses in the consolidated statements of operations. We expect fulfillment costs to remain relatively stable over 2025 on a per order basis due to increased outbound shipping costs.

Current wording

Fulfillment costs represent those costs incurred in operating and staffing our fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packing and preparing customer orders for shipment, outbound shipping and handling expenses, packing materials costs and payment processing and related transaction costs. These costs are included within selling, general and administrative expenses in the consolidated statements of operations.

Previous wording

Interest expense consists primarily of interest expense associated with our debt financing arrangements. In fiscal years 2024 and 2023, we have recorded higher interest expense due to higher interest rates on our Structural Debt Facility (as defined below) and increases in the prime rate. We expect interest expense to decline following our full repayment of our term debt under the Structural Debt Facility (as defined below) in 2024. To the extent there are changes in prevailing interest rates in future periods we anticipate cash payments for interest and interest expense to fluctuate as interest rates change.

Current wording

Interest expense consists primarily of interest expense associated with our debt financing arrangement. In fiscal year 2025, we have recorded lower interest expense due to the extinguishment of the Structural Debt Facility (as defined below). To the extent there are changes in prevailing interest rates in future periods, we anticipate cash payments for interest and interest expense to fluctuate as interest rates change.

Previous wording

Loss on extinguishment of debt relates to the full payoff of the Structural Debt Facility (as defined below) in 2024 that was accounted for as an extinguishment.

Current wording

Loss on extinguishment of debt relates to the full payoff of the Structural Debt Facility in 2024 that was accounted for as an extinguishment.

Previous wording

Change in fair values of derivative liabilities consists primarily of changes in fair values of HGI Additional Shares, Earn-Out Shares (as defined below), Public Warrants and Private Placement Warrant and Structural Derivative liabilities. 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 “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.

Previous wording

Other income, net consists of the reduction of transaction costs allocated to derivative liabilities upon Business Combination and interest income.

Current wording

Other income, net consists primarily of interest income.

Previous wording

Cost of goods sold decreased by $27.8 million, or 23%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by a decrease in DTC Total Orders, partially offset by higher cost of goods per order.

Current wording

Cost of goods sold decreased by $13.6 million, or 14%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily driven by a decrease in DTC Total Orders.

Previous wording

Selling, general and administrative expenses decreased by $31.8 million, or 24%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Fulfillment costs decreased by $13.6 million, including an $8.6 million decrease in outbound shipping and handling expenses and a $2.8 million decrease in fulfillment labor both due to a lower volume of orders. Stock-based compensation expense decreased by $2.8 million driven by lower expense relating to the vesting of RSU awards resulting from the terms of the option exchange we effected in October 2022 and reductions in headcount. Other general and administrative expenses, excluding stock-based compensation expense and fulfillment costs, decreased by $15.4 million, which includes $5.9 million in reductions to corporate compensation and benefits due to decreases in headcount, a $1.8 million reduction in professional fees, a $1.5 million decrease in costs associated with being a publicly traded company, a $1.1 million net decrease in operating lease right of use asset and other fixed asset impairments, a $0.6 million decrease in rent expense, a $0.5 million decrease in software-related expenses and a $3.1 million gain on a partial lease termination relating to our San Francisco office that occurred in March 2024.

Current wording

Selling, general and administrative expenses decreased by $15.8 million, or 15%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Stock-based compensation decreased by $7.2 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024 due to decreases in the grant date fair value of awards and reductions in headcount. Corporate salaries decreased by $2.7 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024 driven by reductions in headcount. Fulfillment costs decreased by $5.9 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024 due to a lower volume of orders. Other general and administrative costs, excluding stock-based compensation expense and corporate salaries and fulfillment costs, decreased by $4.6 million, which includes a $1.9 million decrease in depreciation expense 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, a $1.0 million decrease in other expenses related to closing our Missouri facility, a$0.6 million decrease in professional fees, a $0.6 million decrease in insurance expenses and a $0.5 million decrease in impairment related to our operating lease right-of-use assets, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. These decreases were offset by the absence of a $3.1 million gain recorded for the year ended December 31, 2024 related to a partial lease termination of our San Francisco office that occurred in March 2024 and a $1.3 million increase in certain fees and expenses to support our acquisitions.

Previous wording

Interest expense decreased by $3.3 million, or 21%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily due to the full repayment of the Structural Debt Facility in 2024. See the section titled “Liquidity and Capital Resources” below for further details.

Current wording

Interest expense decreased by $11.6 million, or 90%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to the extinguishment of the Structural Debt Facility in 2024. See the section titled “Liquidity and Capital Resources” below for further details.

Previous wording

The change in the fair value of derivative liabilities for the year ended December 31, 2024, other than the Structural Derivative liability, was primarily driven by the changes in our stock price during the period. The change in fair value of the Structural Derivative liability for the year ended December 31, 2024 primarily due to the settlement of the derivative in connection with the full payoff of the Structural Debt Facility in 2024.

Current wording

The change in the fair value of derivative liabilities for the year ended December 31, 2025, was primarily driven by the settlement of the Structural Derivative in connection with the payoff of the Structural Debt Facility.

Previous wording

As of December 31, 2024, we had $19.6 million in unrestricted cash and cash equivalents (which excludes restricted cash of $4.7 million). We incurred negative cash flow from operating activities of $9.7 million for the year ended December 31, 2024. We have incurred significant losses since inception and have an accumulated deficit of approximately $648.5 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 December 31, 2024. As described more fully below, during the year ended December 31, 2024, we used $72.3 million to repay the Structural Debt Facility in full, consisting of $72.0 million in principal and remainder as an exit fee.

Current wording

As of December 31, 2025, we had $8.5 million in unrestricted cash and cash equivalents (which excludes restricted cash of $3.3 million). We incurred negative cash flow from operating activities of $7.0 million for the year ended December 31, 2025. We have incurred significant losses since inception and have an accumulated deficit of approximately $660.2 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 December 31, 2025.

Previous wording

On August 11, 2023 (the “Series A Preferred Stock Closing Date”), we entered into a subscription agreement with Volition Capital Fund IV, L.P. (“Volition”) and received gross proceeds of $10.0 million in exchange for 10,000 shares of our Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”), a warrant to purchase 1,579,778 shares of our Class A Common Stock at an exercise price of $6.33 (the “Volition Warrant”) and a warrant to purchase 20,905 shares of our Class A Common Stock at an exercise price of $0.01 per share (the “Volition Penny Warrants” and together with the Volition Warrant the “Volition Warrants”). The Series A Preferred Stock was redeemable, at the option of the holder, for the original issuance price plus any declared but unpaid dividends following the seventh anniversary of the Series A Preferred Stock Closing Date (“Optional Redemption”).

Current wording

On August 11, 2023 (the “Series A Preferred Stock Closing Date”), we entered into a subscription agreement with Volition Capital Fund IV, L.P. (“Volition”) and received gross proceeds of $10.0 million in exchange for 10,000 shares of our Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”), a warrant to purchase 1,579,778 shares of our Class A common stock at an exercise price of $6.33 (the “Volition Warrants”) and a warrant to purchase 20,905 shares of our Class A common stock at an exercise price of $0.01 per share (the “Volition Penny Warrants”). The Series A Preferred Stock was redeemable, at the option of the holder, for the original issuance price plus any declared but unpaid dividends following the seventh anniversary of the Series A Preferred Stock Closing Date (“Optional Redemption”).

Previous wording

On September 20, 2024 (the “Series A' Preferred Stock Closing Date”), we entered into another subscription agreement with Volition where we received gross proceeds of $15.0 million in exchange for 15,000 shares of our Series A' Redeemable Convertible Preferred Stock (the “Series A' Preferred Stock” and together with the Series A Preferred Stock, the “Preferred Stock”). In connection with the issuance of the Series A' Preferred Stock, we agreed with Volition to cancel the Volition Warrants, cancel the Volition Penny Warrants and modify the redemption terms of the Series A Preferred Stock such that it is no longer subject to Optional Redemption. The holders of the Preferred Stock are entitled to receive cumulative dividends at the rate of 6% per annum of the original issuance price of each share. Such accruing dividends are payable only when, as and if declared by our Board of Directors.

Current wording

On September 20, 2024, we entered into a subscription agreement with Volition where we received gross proceeds of $15.0 million in exchange for 15,000 shares of our Series A' Redeemable Convertible Preferred Stock (the “Series A' Preferred Stock” and together with the Series A Redeemable Convertible Preferred Stock, the “Preferred Stock”). In connection with the issuance of the Series A' Preferred Stock, we agreed with Volition to cancel the Volition Warrants, cancel the Volition Penny Warrants and modify certain redemption terms of the Series A Preferred Stock already held by Volition, such that it is no longer subject to Optional Redemption. The holders of our outstanding Preferred Stock are entitled to receive cumulative dividends at the rate of 6% per annum of the original issuance price of each share. Such accruing dividends are payable only when, as and if declared by our Board of Directors.

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 $5.2 million as of December 31, 2024. The Siena Revolver matures on March 10, 2026 and is collateralized by our inventory and accounts receivable.

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 $1.1 million as of December 31, 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 million of our shares of common stock at our request until July 18, 2025, subject to certain conditions. The shares of our common stock that may be issued under the SEPA may be sold by us to Yorkville at our discretion from time to time and sales of our common stock under the 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 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 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 December 31, 2024, 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 February 28, 2025, under the terms of the SEPA we would be able to raise additional gross proceeds of approximately $10.1 million.

Current wording

6,511,532 shares of our common stock to Yorkville under the 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 December 31, 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 February 27, 2026, under the terms of the SEPA we would be able to raise additional gross proceeds of approximately $8.8 million.

Previous wording

To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. Debt financing arrangements may require us to pledge certain assets or enter into covenants that could restrict our operations or our ability to pay dividends or other distributions on our common stock or incur further indebtedness. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. In addition, our Class A Common Stock trading price may not exceed the respective exercise prices of our Public Warrants, Private Placement Warrants, warrants granted to HGI (as defined below) and/or our Legacy Grove Warrants before the respective warrants expire, and therefore we may not receive any proceeds from the exercise of warrants to fund our operations. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition could be materially and adversely affected.

Current wording

To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. Debt financing arrangements may require us to pledge certain assets or enter into covenants that could restrict our operations or our ability to pay dividends or other distributions on our common stock or incur further indebtedness. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. In addition, our Class A Common Stock trading price may not exceed the respective exercise prices of our Public Warrants, Private Placement Warrants and/or our other outstanding warrants before the respective warrants expire, and therefore we may not receive any proceeds from the exercise of warrants to fund our operations. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition could be materially and adversely affected.

Previous wording

Our most significant contractual obligations relate to the Siena Loan Facility (described below), purchase commitments on inventory and operating lease obligations on our fulfillment centers and corporate offices. As of December 31, 2024, we had $9.1 million of enforceable and legally binding inventory purchase commitments all 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 this filing on Form 10-K.

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 December 31, 2025, we had $11.2 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 8 of the Notes to our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 included in this filing on Form 10-K.

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. In July 2024, we entered into an amendment to the Siena Revolver (the “Siena Amendment”). The borrowing capacity under the Siena Revolver, as modified by the Siena Amendment, is subject to certain conditions, including our inventory and accounts receivable balances and other limitations as specified in the agreement. As of December 31, 2024, there was an outstanding principal amount of $7.5 million and additional borrowing capacity from the Siena Revolver was $5.2 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 December 31, 2025, there was an outstanding principal amount of $7.5 million and additional borrowing capacity was $1.1 million under the Siena Revolver.

Previous wording

The interest rates applicable to borrowings under the Siena Revolver were not modified by the Siena Amendment and are based on a fluctuating rate of interest measured by reference to either, at our option, (i) a Base Rate, plus an applicable margin, or (ii) the term SOFR then in effect, plus 0.10% and an applicable margin. The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) federal funds rate (“Federal Funds Rate”) plus 0.50% and (3) 5.00% per annum. The applicable margin for the Siena Revolver borrowings is based on the Company’s monthly average principal balance outstanding and ranges from 2.75% to 4.50% per annum in the case of Base Rate Borrowings, as defined by the Siena Revolver, and 3.75% to 5.50% per annum in the case of Term SOFR (as defined below) borrowings, as defined by the Siena Revolver. The Siena Revolver also contains various financial covenants we must maintain to avoid an Event of Default, as defined by the agreement. 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 March 10, 2026. As of December 31, 2024, we were in compliance with all covenants related to the Siena Revolver.

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 plus 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 (“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 was $8.0 million for the year ended December 31, 2023, primarily attributable to our net loss of $43.2 million, non-cash adjustments of $24.2 million, and an increase in our net operating assets and liabilities of $11.0 million. Non-cash adjustments consisted primarily of a $15.5 million stock-based compensation expense, $5.8 million in depreciation and amortization, $3.8 million in non-cash interest expense and $2.5 million in asset impairment, partially offset by $3.7 million in reduction in transaction costs allocated to derivative liabilities upon the Business Combination. The change in operating assets and liabilities primarily resulted from a decrease of $3.7 million in deferred revenue, a decrease of $1.6 million in operating lease right-of-use assets and liabilities, partially offset by a $15.0 million decrease in inventory and a $1.7 million decrease in prepaid and other assets.

Current wording

Net cash used in operating activities was $7.0 million for the year ended December 31, 2025, primarily attributable to our net loss of $11.7 million, non-cash adjustments of $6.5 million, and an increase in our net operating assets and liabilities of $1.7 million. Non-cash adjustments consisted primarily of a $4.3 million stock-based compensation expense, $1.7 million in depreciation and amortization, $0.9 million in asset impairment and $0.3 million in non-cash interest expense, partially offset by $0.4 million in changes in fair value of derivative liabilities and $0.3 million in changes to our inventory write-downs. The change in operating assets and liabilities primarily resulted from a $2.5 million net decrease in accounts payable and accrued expenses due to overall decreases in our expenses and timing of payments, a decrease of $1.3 million in deferred revenue, a $1.2 million increase in prepaid expenses and other assets and $0.4 million decrease in other liabilities, partially offset by a $3.3 million decrease in our inventory and a $0.5 million increase in net operating lease right-of-use assets and liabilities.

Previous wording

Net cash used in operating activities was $9.7 million for the year ended December 31, 2024, primarily attributable to our net loss of $27.4 million, non-cash adjustments of $15.2 million, and an increase in our net operating assets and liabilities of $2.4 million. Non-cash adjustments consisted primarily of a $12.0 million stock-based compensation expense, $9.8 million in depreciation and amortization, $5.0 million in loss on extinguishment of debt, $3.4 million in non-cash interest expense and $1.3 million in asset impairment, partially offset by $9.9 million in changes in fair value of derivative liabilities, $3.1 million gain on lease modification and $3.1 million in changes to our inventory reserve. The change in operating assets and liabilities primarily resulted from a $4.3 million decrease in operating lease right-of-use assets and liabilities primarily driven by payments related to the modification of our lease at our San Francisco offices and a $5.9 million net decrease in accounts payable and accrued expenses, partially offset by a $12.5 million decrease in our inventory.

Current wording

Net cash used in operating activities was $9.7 million for the year ended December 31, 2024, primarily attributable to our net loss of $27.4 million, non-cash adjustments of $15.2 million, and an increase in our net operating assets and liabilities of $2.4 million. Non-cash adjustments consisted primarily of a $12.0 million stock-based compensation expense, $9.8 million in depreciation and amortization, $5.0 million in loss on extinguishment of debt, $3.4 million in non-cash interest expense and $1.3 million in asset impairment, partially offset by $9.9 million in changes in fair value of derivative liabilities, $3.1 million gain on lease modification and $3.1 million in changes to our inventory write-down. The change in operating assets and liabilities primarily resulted from a $4.3 million decrease in net operating lease right-of-use assets and liabilities primarily driven by payments related to the modification of our lease at our San Francisco offices and a $5.9 million net decrease in accounts payable and accrued expenses, partially offset by a $12.5 million decrease in our inventory.

Previous wording

Net cash used in investing activities was $1.6 million and $3.0 million for the years ended December 31, 2024 and 2023, respectively was primarily due to purchases of property and equipment, including capitalized software development.

Current wording

Net cash used in investing activities of $1.6 million for the year ended December 31, 2024 was primarily due to purchases of property and equipment, including capitalized software development.

Previous wording

Net cash used in financing activities was $59.2 million for the year ended December 31, 2024 and primarily consisted of the repayment of debt, including the settlement of the Structural Derivative Liability, of $72.3 million, net payments related to stock-based award activities of $1.4 million, payment of Series A' Preferred Stock issuance costs of $0.5 million and payment of debt issuance costs of $0.3 million. These outflows were partially offset by $15.0 million in proceeds from the issuance of the Series A' Preferred Stock.

Current wording

Net cash used by financing activities was $59.2 million for the year ended December 31, 2024 and primarily consisted of the repayment of debt, including the settlement of the Structural Derivative Liability of $72.3 million, net payments related to stock-based awards of $1.4 million, payment of Series A' Preferred Stock issuance costs of $0.5 million and payment of debt issuance costs of $0.3 million. These outflows were partially offset by $15.0 million in proceeds from the issuance of the Series A' Preferred Stock.