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 by the end of 2025.

Current wording

We primarily 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 and completed this exit in 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 $658.6 million as of September 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 ecommerce platform and Grove Brands, and over this period we have operated at a loss. We have an accumulated deficit of $661.2 million as of March 31, 2026.

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, 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

The future activity level and profitability of our DTC customer base will depend on our ability to continue to offer a compelling value proposition to consumers including strong selection, pricing, customer service, smooth and compelling web and mobile application experience, fast and reliable fulfillment, and curation within natural and sustainable products. Our success is also dependent on our ability to maintain relevance with our consumers on a regular basis through high performing products and a consumer-friendly refill and fulfillment process, and most importantly to provide consumers with products that consistently outperform their expectations. Our ability to execute on these key value-driving areas for consumers, and to remain competitive and compelling, are necessary for our future growth. A lack of success in these areas would materially impact our operating results and financial performance.

Current wording

The future activity level and profitability of our DTC customer base will depend on our ability to continue to offer a compelling value proposition to consumers including strong selection, pricing, and customer service, a smooth and compelling web and mobile application experience, a fast and reliable fulfillment, and curation within natural and sustainable products. Our success is also dependent on our ability to maintain relevance with our consumers on a regular basis through high performing products and a consumer-friendly refill and fulfillment process, and most importantly to provide consumers with products that consistently outperform their expectations. Our ability to execute on these key value-driving areas for consumers, and to remain competitive and compelling, are necessary for our future growth. A lack of success in these areas would materially impact our operating results and financial performance.

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

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. We believe the migration provides a more streamlined user experience for our customers. 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.

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 have resolved a majority of the issues identified after the migration while simultaneously working towards optimizing the customer experience.

Previous wording

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. Our ability to realize the expected benefits of this transition is substantially dependent upon our ability to address these issues.

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 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.

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 existing customer engagement. In the three months ended March 31, 2026, 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 throughout 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 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.

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 months ended March 31, 2026, 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 throughout 2025.

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 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.

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. For the three months ended March 31, 2026, DTC Net Revenue Per Order increased due to more targeted promotional efforts, including the shift to rewards-based incentives through Green Rewards which launched in the fourth quarter of 2025, 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; interest income; interest expense; restructuring and severance related costs; transaction related costs related to certain strategic merger & acquisition projects; provision for income taxes and certain litigation and legal settlement expenses. 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; 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

We generate revenue primarily from the sale of both third-party and our Grove Brands products through our DTC platform. Customers purchase products through our website or mobile application through a combination of directly selecting items from the catalog, items that are suggested by our recommendation engine, and featured products that appear in marketing on-site, in emails and on our mobile application. Most customers purchase a combination of products recommended by us based on previous purchases and new products discovered through marketing or catalog browsing. Customers can opt to subscribe and have orders auto-shipped to them on a specified date or shipped immediately through an option available on the website and mobile application. We recognize revenue from the sale of our products through our DTC platform net of discounts, sales tax, customer service credits and estimated refunds. Sales tax collected from customers is not considered revenue and is included in accrued liabilities until remitted to the taxing authorities.

Current wording

We generate revenue primarily from the sale of both third-party and our Grove Brands products through our DTC platform. Customers purchase products through the website or mobile application through a combination of directly selecting items from the catalog, items that are suggested by our recommendation engine, and featured products that appear in marketing on-site, in emails and on our mobile application. Most customers purchase a combination of products recommended by us based on previous purchases and new products discovered through marketing or catalog browsing. Customers can opt to subscribe and have orders auto-shipped to them on a specified date or shipped immediately through an option available on the website and mobile application. We recognize revenue from the sale of our products through our DTC platform net of discounts, sales tax, customer service credits and estimated refunds. Sales tax collected from customers is not considered revenue and is included in accrued liabilities until remitted to the taxing authorities.

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 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 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

Product development expenses are related to the ongoing support and maintenance of our DTC platform 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.

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 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.

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, costs associated with our customer service operation, and costs of environmental offsets. Selling, general and administrative expenses have declined for the three months ended March 31, 2026 compared to the three months ended March 31, 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 has lowered our ongoing cost structure.

Previous wording

Interest expense consists primarily of interest expense associated with our debt financing arrangement. In previous periods, we have recorded higher interest expense due to higher outstanding debt balances and higher prime rates. 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. 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

“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. 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

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

Current wording

Comparisons of the Three Months Ended March 31, 2026 and 2025

Previous 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.

Current wording

Revenue decreased by $7.3 million, or 17%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. This decline was primarily driven by a decrease in DTC Total Orders from lower advertising expenses in previous periods and disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers throughout 2025.

Previous 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.

Current wording

Cost of goods sold decreased by $4.1 million, or 20%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to a decrease in DTC Total Orders and a lower cost of goods per order.

Previous 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.

Current wording

Selling, general and administrative expenses decreased by $3.8 million, or 17%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Fulfillment costs decreased by $1.4 million due to a lower volume of orders. Corporate salaries decreased by $0.8 million, driven by reductions in headcount. Additionally, professional fees decreased by $0.5 million, software costs decreased by $0.3 million, insurance costs decreased by $0.3 million, and rent expense decreased by $0.3 million due to the subleasing one of our warehouses beginning in December 2025.

Previous 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.

Current wording

Interest expense decreased by $0.1 million, or 21%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 primarily due to lower interest rates on our outstanding debt.

Previous 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.

Current wording

The change in the fair value of derivative liabilities for the three months ended March 31, 2026, was not meaningful. The change in the fair value of derivative liabilities for the three months ended March 31, 2025, was driven by the changes in our stock price from December 31, 2024 through March 31, 2025.

Previous 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.

Current wording

Other income decreased by $0.1 million, or 56%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, related to interest income due to lower on-hand cash.

Previous 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.

Current wording

As of March 31, 2026, we had $7.2 million in unrestricted cash and cash equivalents (which excludes restricted cash of $3.3 million). We incurred negative cash flows from operating activities of $0.7 million for the three months ended March 31, 2026. We have incurred significant losses since inception and have an accumulated deficit of approximately $661.2 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 March 31, 2026.

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 modified the redemption terms of the Series A Preferred Stock modified the redemption terms of the Series A Preferred Stock such that the Series A Preferred Stock 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, (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 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, 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.

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. The Siena Revolver matures on April 10, 2028. Additional borrowing capacity from the Siena Revolver was $1.7 million as of March 31, 2026.

Previous 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.

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 at our request until July 18, 2025, 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 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 our 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 March 31, 2026, 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 April 30, 2026, under the terms of the Amended SEPA we would be able to raise additional gross proceeds of approximately $7.2 million.

Previous wording

Management believes that currently available resources will provide sufficient funds to enable us to meet our obligations for at least one year following the date these condensed consolidated financial statements are available to be issued. Cash from operations could be affected by our customers and other risks detailed in the section titled “Risk Factors.” In the event we raise additional capital to execute strategic initiatives and fund our operations, our ability to raise additional capital may be adversely impacted by the trading price of our common stock. We may seek access to additional funds by utilizing the SEPA. Additionally, we may seek additional funds through new public or private equity offerings or new debt financings, through partnering or other strategic arrangements, through the exercise of certain of our warrants, or a combination of the foregoing. There can be no assurance that any such new debt or new equity financing arrangements will be available on terms acceptable to the Company, or at all.

Current wording

Management believes that currently available resources will provide sufficient funds to enable us to meet our obligations for at least one year following the date these condensed consolidated financial statements are available to be issued. Cash from operations could be affected by our customers and other risks detailed in the section titled “Risk Factors.” In the event we raise additional capital to execute strategic initiatives and fund our operations, our ability to raise additional capital may be adversely impacted by the trading price of our common stock. We may seek access to additional funds by utilizing the SEPA. Additionally, we may seek additional funds through new public or private equity offerings or new debt financings, through partnering or other strategic arrangements, through the exercise of certain of our warrants, or a combination of the foregoing. There can be no assurance that any such new debt or new equity financing arrangements will be available on terms acceptable to us, or at all.

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 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.

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 March 31, 2026, we had $11.5 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, 2025 and December 31, 2024 included in Form 10-K filed with the SEC on March 5, 2026.

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 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.

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 March 31, 2026, there was an outstanding principal amount of $7.5 million and additional borrowing capacity from the Siena Revolver was $1.7 million.

Previous 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.

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 us. The Siena Revolver matures on April 10, 2028.

Previous 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.

Current wording

Net cash used in operating activities of $0.7 million for the three months ended March 31, 2026 was primarily attributable to our net loss of $1.0 million, non-cash adjustments of $1.2 million, and a net increase in our operating assets and liabilities of $0.8 million. Non-cash adjustments consisted of a $0.8 million stock-based compensation expense, $0.4 million in depreciation and amortization and $0.1 million in non-cash interest expense, and a $0.1 million of change in fair value of derivative liabilities. The change in operating assets and liabilities resulted from a $3.1 million increase in inventory to support ongoing operations, a $1.5 million decrease in accrued expenses and accounts payable related to the timing of payments and a $0.2 million net increase in operating lease right-of-use assets and liabilities, offset by a $3.0 million decrease in prepaid expenses and other assets related to the timing of collections on our accounts receivable, a $0.8 million increase in deferred revenue and a $0.1 million increase in other operating liabilities.

Previous 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.

Current wording

Net cash used in operating activities of $6.9 million for the three months ended March 31, 2025 was attributable to our net loss of $3.5 million, non-cash adjustments of $1.2 million, and net increase in our operating assets and liabilities of $4.6 million. Non-cash adjustments consisted of a $1.0 million stock-based compensation expense, $0.4 million in depreciation and amortization activity and $0.1 million non-cash interest expense, partially offset by $0.1 million of inventory write-downs and $0.1 million of change in fair value of derivative liabilities. The change in operating assets and liabilities primarily resulted from a $3.5 million decrease in accounts payable and accrued expenses, a $0.5 million increase in inventory and a $0.5 million decrease in deferred revenues.

Previous 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.

Current wording

Net cash used in investing activities of $0.3 million for the three months ended March 31, 2026 was due to the purchase of property and equipment.

Previous 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.

Current wording

Net cash used in investing activities of $3.4 million for the three months ended March 31, 2025 was due to $2.8 million of cash paid for strategic acquisitions and $0.5 million for the purchase of property and equipment.

Previous 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.

Current wording

Net cash used in financing activities of $0.5 million for the three months ended March 31, 2025 primarily consists of payments related to stock-based award activities during the period.

Previous wording

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The JOBS Act permits companies with emerging growth company status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. Following the closing of the Business Combination, we use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates. We will continue to be an emerging growth company for the first five fiscal years after the VGAC II Initial Public Offering unless any of the following events occur earlier: (i) we have more than $1.235 billion in annual revenue, (ii) we have more than $700.0 million in market value of our Class A Common Stock held by non-affiliates or (iii) we issue more than $1.0 billion of non-convertible debt securities over a three-year period.

Current wording

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The JOBS Act permits companies with emerging growth company status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they apply to private companies. Following the closing of the Business Combination, we use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates. We will continue to be an emerging growth company for the first five fiscal years after the VGAC II Initial Public Offering unless any of the following events occur earlier: (i) we have more than $1.235 billion in annual revenue, (ii) we have more than $700.0 million in market value of our Class A Common Stock held by non-affiliates or (iii) we issue more than $1.0 billion of non-convertible debt securities over a three-year period.

Previous wording

We are a “smaller reporting company” meaning that the market value of the Company’s stock held by non-affiliates is less than $250 million. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements in our Annual Report on Form 10-K, and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter and our annual revenue exceeds $100 million during such completed fiscal year, or (ii) the market value of our common stock held by non-affiliates exceeds $700 million.

Current wording

We are a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $250 million. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements in our Annual Report on Form 10-K, and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter and our annual revenue exceeds $100 million during such completed fiscal year, or (ii) the market value of our common stock held by non-affiliates exceeds $700 million.