Solo Brands, Inc.

NOTE 19 –Fair Value Measurements

The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined within Note 2, Significant Accounting Policies.

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands):

There were no transfers of financial assets and liabilities measured at fair value between the valuation hierarchy Levels 1, 2 and 3 for the years ended December 31, 2025 and 2024.

The table below reconciles beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Contingent Consideration

The contingent consideration as of December 31, 2024 related to the Company’s acquisition of the TerraFlame business in 2023 and relied on forecasted results through the expected post-closing payment period. The fair value of the contingent consideration was valued using a threshold and cap (capped call) structure. This contingent consideration represented a stand-alone liability that was measured at fair value on a recurring basis at the end of each reporting period using inputs that are unobservable and significant to the overall fair value measurement and were considered a Level 3 estimate.

In connection with the disposition of the TerraFlame manufacturing operations, as described in Note 22, Variable Interest Entities, the contingent consideration was fully relieved as of June 30, 2025. A gain of $0.8 million and a loss of $1.4 million, respectively, were recognized as a result of the remeasurement of the fair value of the contingent consideration for the years ended December 31, 2025 and 2024 and were recorded to selling, general & administrative expenses on the consolidated statements of operations and comprehensive income (loss).

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on a recurring basis on our consolidated balance sheets include cash and cash equivalents, restricted cash, accounts receivable, net, accounts payable and other debt. The fair value of the Company’s cash and cash equivalents, accounts receivable, net and accounts payable approximate their carrying values due to the short-term nature of the instruments.

With the 2025 Refinancing Amendment, as discussed in Note 13, Debt, net, the outstanding debt of the Company is recorded at carrying value, less associated debt issuance costs, which the Company believes approximates fair value based on the variable nature of interest at market rates using Level 2 inputs.

Other

In the fourth quarter of 2025, the Company performed a fair valuation of the long-lived assets of the Solo Stove asset group in response to an identified triggering event. Further details and the related level 3 inputs used in the valuation of this asset group are provided in Note 9, Intangible Assets, net. Additionally, the Company conducted its annual qualitative impairment test of goodwill as of October 1, 2025, the details of which and the level 3 inputs utilized are provided in Note 10, Goodwill.