Solo Brands, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
SBDS$4.050.0%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001870600-25-000124
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001870600-26-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 99 current paragraphs.
37 unchanged; 37 reworded; 24 added; 31 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 26 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
On December 17, 2025, as part of the Corporate Simplification transactions, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Solo Stove Holdings, LLC (“Holdings”) and Solo Merger Sub LLC (“Merger Sub”), a subsidiary of Solo Brands, Inc. and SP SS Blocker Purchaser, LLC (“Blocker”), formed for the sole purpose of merging with and into Holdings. Pursuant to the Merger Agreement, effective January 1, 2026 (the “Effective Time”), Merger Sub merged with and into Holdings, with Holdings continuing as the surviving entity (the “Merger”) as a wholly owned subsidiary of Solo Brands, Inc.
Current report
Pursuant to the Merger Agreement, at the Effective Time, each of the common units of Holdings (“LLC Units”) beneficially owned by members of Holdings were cancelled and converted automatically into a right to receive one share of our Class A common stock, except for any LLC Units beneficially owned by either Solo Brands, Inc. or Blocker, which were cancelled for no consideration in accordance with the Merger Agreement and Holdings’ Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”). At the Effective Time, the limited liability company interests of Merger Sub were converted into LLC units of the surviving entity, resulting in Holdings continuing as our wholly owned subsidiary. In addition, immediately following the Effective Time, all of the issued and outstanding shares of our Class B common stock were retired and cancelled in accordance with our Amended and Restated Certificate of Incorporation and the LLC Agreement. As a result, upon completion of the Merger, there were no LLC Units or shares of Class B common stock of the Company outstanding.
Current report
The Merger and related transactions did not terminate or otherwise accelerate our obligations under the Tax Receivable Agreement, dated as of October 27, 2021, by and among us, Holdings and the other parties from time-to-time party thereto. However, as a result of the Merger, we expect the total future potential cash payments due under the Tax Receivable Agreement to be generally limited.
Current report
On February 20, 2026, the U.S. Supreme Court held in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act (“IEEPA”) does not authorize a U.S. President to impose tariffs during peacetime national emergencies and that the challenge to the legality of the incremental tariffs was within the exclusive jurisdiction of the U.S. Court of International Trade (“CIT”), thus affirming a prior decision of the CIT that the U.S. President lacked authority to impose incremental tariffs. As a result, on February 20, 2026, the U.S. President issued an executive order stating that the incremental tariffs were no longer in effect and ending the collection of the incremental tariffs. However, the U.S. President then issued an additional executive order imposing tariffs pursuant to Section 122 of the Trade Act of 1974 for 150 days, effective February 24, 2026. We continue to monitor the changing tariff and trade restrictions and are evaluating the potential impacts of these decisions for 2026 and any potential impacts on consumer demand and pricing expectations. We filed a lawsuit in the CIT challenging the legality of incremental tariffs and are seeking to recover the approximately $10 million in incremental tariffs that we paid in 2025 and 2026.
Current report
On April 20, 2026, the U.S. government opened the online portal for claiming refunds on IEEPA tariffs and, as of May 1, 2026, the Company has completed filing refund claims. All but a minor number of claims have been accepted by the Customs Border Protection agency and certain refunds have advanced to the United States Department of Treasury for processing. The Company plans to follow gain contingency accounting under ASC 450-30, Gain Contingencies, for recognition.
Current report
As of March 31, 2026, the Company had not received any refund payments, and uncertainty remains regarding timing, amount, and ultimate receipt of any refunds. Accordingly, no gain has been recognized in the unaudited consolidated financial statements for the three months ended March 31, 2026. We continue to monitor the impact of these tariffs as well as the future impacts of any additional tariffs or other trade actions.
Current report
Macroeconomic Factors
Current report
Trends in Seasonality
Current report
In the first quarter of 2026, some seasonal demand within our retail channel shifted to the second quarter with the timing of a number of large retail orders scheduled for the second quarter of 2026. Historically, our net sales have been highest in our second and fourth quarters. In 2025, however, we experienced a shift in the seasonal demand within our retail channel with the first quarter of 2025 far exceeding the third quarter of 2025. We do not view the first quarter of 2025’s performance as indicative that the trends experienced in 2025 are likely to result in long-term changes in our seasonality.
Current report
The 2025 restructuring activity was concluded in the fourth quarter of 2025.
Current report
The decrease in net sales for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by a decline in net sales within the Solo Stove and Chubbies segments, due to declines across both DTC and retail channels at each segment.
Current report
Gross profit decreased for the three months ended March 31, 2026 compared to the prior year period, largely as a result of the decrease in cost of sales in connection with the decline in net sales and the decline in gross profit margin, which was driven by the impact of tariffs in the current year period, and to a lesser degree, the channel mix shifting to more retail in the current year period compared to the prior year period, which generates lower gross margin.
Current report
The decrease in operating expenses for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by a decrease in SG&A as a result of a decrease in marketing and employee-related compensation. The decrease was also due to a decline in restructuring, contract termination, and impairment charges, as a result of expenses related to the execution of cost savings initiatives, such as severance resulting from a reduction in force and the costs incurred to exit two distribution centers and engagement of strategic consulting firms for operational performance improvements in the prior year period.
Current report
Additionally, depreciation and amortization expenses decreased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to the impairment of intangible assets during the prior year. A decrease was also realized in other operating expenses, as a result of strategic consulting engagements in the prior year period.
Current report
Effective as of January 1, 2026 and subsequent to the Corporate Simplification, income taxes represent the federal, foreign, state and local income taxes of the consolidated filing group of Solo Brands, Inc. and its subsidiaries. The Corporate Simplification allows us to net the tax benefit (loss) generated by Solo Brands, Inc. and our wholly owned subsidiaries, Chubbies and Oru, whereas prior to the effective date separate returns were required for each respective brand. As a result, we expect that future periods will incur lower income tax expense in periods in which any of these brands generate a loss which would offset income generated by other brands.
Current report
The change in the income tax benefit for the three months ended March 31, 2026 compared to the income tax expense for three months ended March 31, 2025 was primarily driven by the valuation release due to the Corporate Simplification when comparing the current period to the prior year period.
Current report
The decrease in net sales for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 reflected lower unit volumes driven by our continued focus on pricing and promotional discipline within the DTC channel, as well as softness in the retail channel as partners work through elevated legacy inventory levels ahead of new product introductions.
Current report
Solo Stove Operating Expenses
Current report
The decrease in net sales for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 reflected variability in customer demand within the DTC channel, and retail net sales declined primarily due to the timing of retail shipments.
Current report
Chubbies Operating Expenses
Current report
The Corporate Simplification discussed within the Overview section was intended to limit material liability for cash payments that might otherwise be due in 2026 and beyond, under the terms of the Tax Receivable Agreement, as well as future distributions to redeemable noncontrolling interests. For more information on the Corporate Simplification, see the Overview section above.
Current report
In evaluating our ability to continue as a going concern for the twelve months following the issuance of the unaudited consolidated financial statements, contained in this Form 10-Q, management projects compliance with our financial covenants. Variability in operating results that could affect future covenant compliance raises substantial doubt about our ability to continue as a going concern.
Current report
Management is executing cost reduction and operational initiatives and based on current projections, expects to remain in compliance with the covenants under the 2025 Credit Agreement. Accordingly, management believes these plans alleviate the substantial doubt about the Company’s ability to continue as a going concern for at least the twelve months following the issuance of these financial statements. Furthermore, as disclosed within Tariffs above, all but a minor number of the Company’s IEEPA claims for refunds have been accepted by U.S. Customs and Border Protection, which, upon realization, are expected to provide additional financial flexibility which will further support the Company's ability to continue as a going concern.
Current report
Accordingly, we believe our cash, cash equivalents and cash from operating activities will be sufficient to fund our obligations for at least the next twelve months following the issuance of our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q. Our future capital requirements will depend on many factors including the outcome of our ongoing cash savings and operational initiatives, our future financial results, the expansion of sales and marketing activities, the introduction of new and enhanced products, the market acceptance of our products, and global trade and market conditions.
Removed paragraphs (31)
Previous report
We sell our products in the U.S. as well as various foreign countries, primarily Europe, Canada and Australia. We also have historically sourced and procured inventory primarily out of China and Vietnam, with some products sourced through Mexico. Tariffs on certain foreign origin goods, particularly from China, continue to put pressure on our input costs. As a result of higher tariffs and tariff uncertainty, in 2025, we diversified our supply base and began to place a higher volume of purchase orders from Vietnam and Cambodia, reducing our sourcing from China for Solo Stove and eliminating our sourcing from China almost entirely for Chubbies. Additionally, we closed and relocated the operations of a distribution center in Mexico to the U.S., in response to the repeal of the 321 Tariff Relief as of August 31, 2025. As a result of lower purchase volumes in the first half of 2025, we increased purchasing activity in the third quarter in anticipation of the holiday selling season. This led to higher tariff impacts on inventory reflected in the consolidated balance sheets and on cost of goods sold within the consolidated statements of operations and comprehensive income (loss). We expect inventory and costs of goods sold, on a per unit basis, to increase in future periods as a result of these tariffs, to the extent they remain effective. However, the proposed tariff reductions that are scheduled to go into effect on November 10, 2025 are anticipated to provide limited relief from the current tariffs. The tariff environment remains fluid and any expectations may be subject to change.
Previous report
Our product lines involve production with steel manufactured outside the U.S., the target of recent tariff actions, impacting virtually all of our Solo Stove brand products. In addition, certain of our Oru and TerraFlame brands are manufactured in and distributed from Mexico. As such, they are subject to any applicable tariffs placed on goods imported from Mexico.
Previous report
New or increased tariffs and retaliatory actions, if sustained, are expected to have a significant adverse effect on our results of operations and margins and on the sales of our products outside the U.S. The strategies we have implemented and continue to implement to mitigate the impact of such tariffs or other trade actions may not be successful. In addition, there can be no assurances that we will be able to pass any increased costs from tariffs on to our customers, that demand or profitability will not be materially adversely impacted, or that we will be successful in implementing efforts to mitigate the effect of tariffs on our business. Sourcing materials from domestic suppliers and manufacturing vendors or transitioning production to the U.S. would be a costly and lengthy process with uncertain results. For additional information, see Part I, Item 1A. "Risk Factors" in our 2024 Form 10-K,“Tariffs or other restrictions placed on foreign imports or any related counter-measures are taken by other countries harm our business and results of operations” and“Our products are manufactured by third parties outside of the United States, and our business may be harmed by legal, regulatory, economic, societal, and political risks associated with those markets.”
Previous report
Tax Legislation
Previous report
On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective beginning in 2026. We will continue to evaluate the future impact of these tax law changes on our financial statements; however, we believe that due to our sustained losses we will not realize a material benefit from these changes.
Previous report
•retention payments for key personnel to support the sustainment of operations and focus on cost saving and operational improvements;
Previous report
•termination of an underperforming licensing agreement in an effort to redeploy the allocated funds for operational purposes;
Previous report
•renegotiated a settlement of a termination fee with a former advertising services vendor at a more favorable amount to the Company, reducing the cash outflow necessary;
Previous report
•revision of pricing structure throughout our brands in order to mitigate, in part, the expected impacts of tariffs in subsequent periods; and
Previous report
We are evaluating and identifying additional cost saving initiatives that we may execute in the near term, with certain upfront costs to be reflected within restructuring, contract termination and impairment charges.
Previous report
In 2024, the Company underwent significant changes to its management team, bringing about a change in strategic vision and evaluation of the Company’s initiatives and brands. The evaluation included analysis of the brand level financials, strengths of each of the brands, product design and customer service metrics, marketing campaign effectiveness and cost, efficiencies of brands on a standalone or aggregated basis, amongst other things. This evaluation, performed over the course of the nine months ended September 30, 2024, led the Company to undertake the following activities within the third quarter of 2024:
Previous report
•terminated underperforming marketing agreements with marketing barter partners that no longer aligned with the Company’s current marketing strategy;
Previous report
•charges related to the IcyBreeze reporting unit stemming from underperformance and management’s determination to revise product designs under the Solo Stove segment; and
Previous report
•reorganized the Oru and ISLE reporting units to eliminate costs and capitalize on potential synergies, through restructuring under a revised management structure.
Previous report
Our net sales have historically included a seasonal component. In the DTC channel, our historical net sales tend to be highest in our second and fourth quarters, while our retail channel has generated higher sales in the first and third quarters. Additionally, we expect variances in our net sales throughout the year relative to the timing of new product launches.
Previous report
The decrease in net sales for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 was primarily driven by a decline in net sales within the Solo Stove segment, the result of our retail partners reducing excess inventory and our resetting promotional activity across retail and DTC channels. For the nine months ended September 30, 2025, when compared to the prior year period, these declines in both DTC and retail channels within the Solo Stove segment were offset, in part, by an increase in net sales across both channels within the Chubbies segment driven by sustained consumer demand within the DTC sales channel and continued growth with retail strategic partnerships, respectively.
Previous report
In the third quarter of 2024, the Company wrote down $18.7 million of inventory and related purchase orders of the IcyBreeze reporting unit as part of the restructuring, contract termination and impairment charge activity. This write down was reflected in cost of goods sold, resulting in both the three months and nine months ended September 30, 2024 gross margins being negatively impacted.
Previous report
Cost of goods sold, when including or excluding the write down of inventory and purchase orders described above, decreased for the three and nine months ended September 30, 2025 compared to the prior year periods, in connection with the decline in net sales, while gross margin increased for each respective period.
Previous report
The decrease in operating expenses for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 was primarily driven by a decrease in restructuring, contract termination and impairment charges, as a result of non-recurring impairment charges to both goodwill and intangible assets, net and non-recurring terminations of underperforming marketing agreements, offset in part by the current period activity discussed in Note 2, Restructuring, Contract Termination and Impairment Charges in our Notes to Consolidated Financial Statements. Additionally, SG&A experienced a significant decline for both three and nine months ended September 30, 2025 when compared to the prior year periods, as a result of a significant decrease in advertising and marketing expenses, coupled with a decrease in distribution costs resulting from the decline in DTC net sales.
Previous report
Additionally, a decrease was realized in other operating expenses, as a result of a reduction in management transition costs consisting of severance for key management personnel, including additional cost associated with onboarding senior leadership positions, and strategic consulting engagements. For the nine months ended September 30, 2025 when compared to the prior year period, this decrease was offset in part by the loss recognized from the disposition of the TerraFlame manufacturing operations, in the second quarter of 2025. See Note 17, Variable Interest Entities for additional information regarding the partial disposition.
Previous report
The income tax benefit decrease for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and the income tax expense increase for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, was primarily driven by valuation allowances on deferred tax assets generated by the losses from the Solo Stove segment in the current year periods.
Previous report
The decrease in net sales for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 was primarily the result of our retail partners reducing excess inventory and our resetting promotional activity across retail and DTC channels.
Previous report
Solo Stove Segment Operating Expenses
Previous report
The decrease in net sales for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily driven by timing of retail channel net sales, with retail channel replenishments occurring in the second quarter this year compared to the third quarter of 2024. DTC net sales were essentially flat year over year, supported by sustained consumer demand.
Previous report
The increase in net sales for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily driven by increases within the retail net sales channel as a result of continued growth within our retail strategic partnerships, coupled with the ongoing ability to identify and meet consumer demands within the DTC net sales channel, with both website and owned retail store performance exceeding the prior year to date period.
Previous report
Similarly, the increase in cost of goods sold for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily the result of the increase in net sales.
Previous report
Chubbies Segment Operating Expenses
Previous report
On May 12, 2021, we entered into the Credit Agreement with JPMorgan Chase Bank, N.A., the Lenders and L/C Issuers party thereto (each as defined therein) and the other parties thereto. The Credit Agreement was subsequently amended on June 2, 2021, September 1, 2021, May 22, 2023 and most recently by the 2025 Refinancing Amendment. Initially, the credit agreement contemplated a revolving credit facility (the “2021 Revolving Credit Facility”), with the amendment on September 1, 2021 including a provision to borrow up to $100.0 million under a term loan (the “2021 Term Loan”) which was in addition to the available capacity on the 2021 Revolving Credit Facility.
Previous report
On June 13, 2025, we entered into Amendment No. 4 to Credit Agreement and Limited Waiver and Amendment No. 1 to Security Agreement (the “2025 Refinancing Amendment”), which effected a reallocation and restructuring of all revolving loans and term loans then outstanding and the waiver of certain then existing events of default. The 2025 Refinancing Amendment resulted in decreased outstanding debt, extended maturities, lower short-term cash requirements as a result of our ability to make certain interest payments in kind, and deferral with respect to compliance with certain financial covenants for a certain period of time, as further described below. As a result, the 2025 Refinancing Amendment provided us with financial flexibility and a longer runway to continue our efforts to stabilize and transform the business. Following the 2025 Refinancing Amendment, our plans continue to be focused on improving our financial results and liquidity through a variety of cost saving and operational improvements throughout 2025 and beyond as further discussed in Note 2, Restructuring, Contract Termination and Impairment Charges.
Previous report
In connection with the entry into the 2025 Refinancing Amendment, during the nine months ended September 30, 2025, we paid down (i) $136.5 million of loans under the 2021 Revolving Credit Facility, and (ii) $32.5 million of 2021 Term Loan outstanding as of June 13, 2025.
Previous report
During the nine months ended September 30, 2025, the obligation to pay a former vendor a $5.4 million payment, plus applicable interest in periods beyond January 1, 2025, as a result of terminating an agreement for advertising services in a prior period, as previously disclosed within our 2024 Form 10-K, was settled for an aggregate amount of $4.0 million. The gain recognized from the reduced settlement was recorded to restructuring, contract termination and impairment charges on the consolidated statements of operations and comprehensive income (loss).
Reworded paragraphs (37)
Previous wording
We own and operate premium brands with ingenious products that we market and deliver through our direct-to-consumer (“DTC”) platform and retail partnerships. We aim to help our customers enjoy good moments that create lasting memories. We consistently deliver innovative, high-quality products that are loved by our customers and revolutionize the outdoor experience, build community and help everyday people reconnect with what matters most. We operate as two reportable segments: Solo Stove, which includes the Solo Stove and TerraFlame brands and primarily offers indoor and outdoor firepits, stoves, and accessories, and Chubbies, which offers premium casual apparel and activewear. The remaining operating segments are included within the Corporate and All Other category. The CODM makes operating decisions, assesses financial performance, and allocates resources based upon discrete financial information at the reportable segment level.
Current wording
Solo Brands operates four premium outdoor brands: Solo Stove, Chubbies, Oru Kayak (“Oru”) and International Surf Ventures (“ISLE”), with Oru and ISLE regarded in aggregate as Watersports. Our brands develop innovative products and market them directly to customers primarily through our direct-to-consumer (“DTC”) channel, which includes e-commerce and owned retail stores, as well as partnerships with key retailers. We aim to help our customers enjoy meaningful moments that create lasting memories. We consistently deliver innovative, high-quality products that are loved by our customers and revolutionize the outdoor experience, build community and help everyday people reconnect with what matters most. We operate as two reportable segments: Solo Stove, which includes the Solo Stove and TerraFlame brands and primarily offers indoor and outdoor fire pits, stoves, and accessories, and Chubbies, which offers premium casual apparel and activewear. The remaining operating segments are included within the Corporate and All Other category. In 2025, the Company completed the disposition of the manufacturing operations for the TerraFlame brand. However, we continue to own the intellectual property of TerraFlame, as well as sole distribution rights of TerraFlame branded products. The CODM makes operating decisions, assesses financial performance, and allocates resources based upon discrete financial information at the reportable segment level.
Previous wording
For the three and nine months ended September 30, 2025, we experienced a decrease in our net sales from $94.1 million and $311.0 million for the three and nine months ended September 30, 2024 to $53.0 million and $222.5 million, respectively. The decline in net sales, for both the three and nine months ended September 30, 2025 when compared to the prior year periods, was primarily driven by the decline in DTC and retail channel net sales within the Solo Stove segment, with the nine month period being offset in part by an increase in net sales across both channels within the Chubbies segment. The Chubbies segment, while experiencing a decline in retail and relatively flat DTC channel net sales in the three months ended September 2025, continues to exceed the prior year period net sales in both channels on a year to date basis.
Current wording
For the three months ended March 31, 2026, we experienced a decrease in our net sales from $77.3 million for the three months ended March 31, 2025 to $62.9 million. The decline in net sales was primarily driven by the decline in DTC and retail channel net sales within the Solo Stove segment and, to a lesser extent, the Chubbies segment. While net sales for three months ended March 31, 2026 declined when compared to the three months ended March 31, 2025, loss from operations decreased from $10.6 million to $4.7 million. This decrease was primarily driven by effective management of operating expenses to align with the decline in net sales, particularly advertising and marketing costs but also includes payroll and distribution costs rightsizing, and a reduction in restructuring, contract termination and impairment charges.
Previous wording
Current macroeconomic factors, including overall economic and political uncertainty, financial and capital markets instability, new or increasing tariffs, high interest rates and high inflation, remain very dynamic and highly uncertain. The effects of the macroeconomic environment could further reduce our net sales and negatively impact our gross margin, net income (loss) and cash flows.
Current wording
Current macroeconomic factors, including overall economic and political uncertainty and unrest, financial and capital markets instability, new or increasing tariffs, high interest rates and high inflation, remain very dynamic and highly uncertain. The effects of the macroeconomic environment could further reduce our net sales and negatively impact our gross margin, net income (loss) and cash flows.
Previous wording
Key Factors Affecting Our Financial Condition and Results of Operations
Current wording
Other Key Factors Affecting Our Financial Condition and Results of Operations
Previous wording
To date in 2025, management, along with our Board of Directors, engaged strategic consulting firms to assist with improving the financial results of our operations. This operational improvement involved the engagement of restructuring, legal and investment banking consultants to perform financial planning, forecasting and project management activities. Certain of these strategic consulting firms assisted in developing operational plans for the near- and long-term, as well as having assisted and continuing to assist in identifying cost saving initiatives to reduce our operational expenses and aid in the development of enhanced internal reporting to deliver timely insight to management.
Current wording
In 2025, management, along with our Board of Directors, engaged strategic consulting firms to assist with improving our financial results. This operational improvement involved the engagement of restructuring, legal and investment banking consultants to perform financial planning, forecasting and project management activities. Certain of these strategic consulting firms assisted and continued toassist in developing operational plans for the near- and long-term throughout 2025, as well as identified cost-saving initiatives to reduce our operational expenses and aid in the development of enhanced internal reporting to deliver timely insight to management.
Previous wording
The cost saving initiatives identified and executed upon in the three and nine months ended September 30, 2025 were designed to reduce operational expenditures over the long-term. The key cost saving initiatives and operational planning activities undertaken so far in 2025 were as follows:
Current wording
The cost saving initiatives identified and executed in the three months ended March 31, 2025 were designed to reduce operational expenditures over the long-term. The key cost saving initiatives and operational planning activities undertaken during the three months ended March 31, 2025 were as follows:
Previous wording
•reduction in force (“RIF”) of management and non-management personnel in an effort to align headcount with the operational needs of the business, resulting in a moderate decline in related expenses in the short term, with the significance of the savings anticipated to be recognized in future periods;
Current wording
•RIF of management and non-management personnel in an effort to align headcount with the operational needs of the business resulted in a moderate decline in related expenses in the short term, with the significance of the savings anticipated to be recognized in future periods;
Previous wording
•closure of two distribution centers in the first half of 2025, with the closure of a third in the third quarter of 2025, to reduce fixed costs in the short term and in future periods, as well as unnecessary capacity;
Current wording
•closure of two distribution centers to reduce fixed costs in the short term and in future periods, as well as eliminate unnecessary capacity; and
Previous wording
While these activities are intended to provide future benefit to the Company, most of these activities required cash outlays in the current period, with certain additional cash outlays expected to occur throughout the remainder of 2025. In order to fund these cash outlays, the Company used cash from operations and borrowings under the 2021 Revolving Credit Facility (as defined below) and the 2025 Revolving Credit Facility (as defined below). The following table outlines the cash outlays and the period in which they occurred.
Current wording
While these activities were intended to provide future benefit to the Company, most of these activities required up-front cash outlays. In order to fund these cash outlays, the Company used cash from operations and borrowings under the prior revolving credit facility. The following table outlines the cash outlays and the period in which they occurred.
Previous wording
Consolidated Results for the Three and Nine Months Ended September 30, 2025 Compared to the Three and Nine Months Ended September 30, 2024
Current wording
Consolidated Results for the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
Previous wording
Net sales are comprised of DTC and retail channel sales to retail partners. Net sales in both channels reflect the impact of partial shipments, product returns, and discounts for certain sales programs or promotions.
Current wording
Net sales are comprised of DTC and retail channel sales to retail partners. Net sales within all channels reflect the impact of partial shipments, product returns, and discounts for certain sales programs or promotions.
Previous wording
(1)Change in gross margin period over period in basis points
Current wording
(1)Change in gross profit margin period over period in basis points
Previous wording
Operating expenses consist of (1) selling, general and administrative (“SG&A”) expenses, (2) restructuring, contract termination and impairment charges, (3) depreciation and amortization expenses and (4) other operating expenses, as defined below.
Current wording
Operating expenses consist of (1) selling, general & administrative (“SG&A”) expenses, (2) restructuring, contract termination and impairment charges, (3) depreciation and amortization expenses and (4) other operating expenses, as defined below.
Previous wording
•Selling, General and Administrative (“SG&A”) Expenses - SG&A expenses consist primarily of marketing costs, wages, equity-based compensation expense, benefits costs, costs of our warehousing and logistics operations, costs of operating on third-party DTC marketplaces, professional fees and services, costs of shipping product to our customers and general corporate expenses.
Current wording
•Selling, General & Administrative (“SG&A”) Expenses - SG&A expenses consist primarily of marketing costs, wages, equity-based compensation expense, benefits costs, costs of our warehousing and logistics operations, costs of operating on third-party DTC marketplaces, professional fees and services, costs of shipping product to our customers and general corporate expenses.
Previous wording
Interest expense, net increased for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 due to a higher average debt balance and higher average interest rates. Interest rates under the 2025 Refinancing Agreement are higher than those previously incurred, which has resulted in the weighted average interest rates on the 2025 Term Loan and 2025 Revolving Credit Facility to be in excess of prior periods.
Current wording
Interest expense, net increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to higher average interest rates, partially offset by lower average debt balance. Interest rates under the 2025 Credit Agreement are higher than those previously incurred, which has resulted in the weighted average interest rates on the 2025 Term Loan and 2025 Revolving Credit Facility to be in excess of prior periods.
Previous wording
Income taxes represent federal, state, and local income taxes on the Company's allocable share of taxable income of Holdings, as well as Oru's and Chubbies' federal and state, and the Company’s foreign tax expense related to international subsidiaries. We are the sole managing member of Holdings, and as a result, consolidate the financial results of Holdings. Holdings is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Holdings is passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. We are subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of Holdings, as well as any stand-alone income or loss generated by Solo Brands, Inc.
Current wording
Prior to the Corporate Simplification, income taxes represented federal, state, and local income taxes on our allocable share of taxable income of Holdings, as well as Oru’s and Chubbies’ federal and state taxable income, and our foreign tax expense related to international subsidiaries. Prior to the Corporate Simplification described above, we were the sole managing member of Holdings and, as a result, consolidated the financial results of Holdings. Holdings was treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Holdings was not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Holdings was passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis. We have been subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to our allocable share of any taxable income or loss of Holdings, as well as any stand-alone income or loss generated by Solo Brands, Inc.
Previous wording
Solo Stove Segment Results for the Three and Nine Months Ended September 30, 2025 Compared to the Three and Nine Months Ended September 30, 2024
Current wording
Solo Stove Segment Results for the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
Previous wording
The decrease in cost of goods sold for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 was primarily in line with the decrease in net sales.
Current wording
The decrease in cost of goods sold for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily in line with the decrease in net sales.
Previous wording
Segment operating expenses consist of (1) marketing expenses, (2) employee related expenses, such as wages and benefits, and (3) other segment operating expenses, which primarily consist of seller fees, shipping and fulfillment related expenses.
Current wording
Segment operating expenses consist of (1) marketing expenses, (2) employee-related expenses, such as wages and benefits, and (3) other operating expenses, which primarily consist of shipping and fulfillment-related expenses.
Previous wording
Segment operating expenses decreased for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, the result of a decrease in brand level marketing expenses, as well as decreases in other segment operating expenses driven by a decrease in seller fees and shipping expenses, each stemming from the decline in DTC channel net sales.
Current wording
Operating expenses decreased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, the result of a decrease in brand level marketing expenses, a decrease in other segment operating expenses driven by a decrease in seller fees and shipping expenses, each stemming from the decline in DTC channel net sales, coupled with a decrease in employee-related compensation as we streamline operations to be more in line with reduced sales.
Previous wording
Chubbies Segment Results for the Three and Nine Months Ended September 30, 2025 Compared to the Three and Nine Months Ended September 30, 2024
Current wording
Chubbies Segment Results for the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
Previous wording
Segment operating expense for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 declined, primarily as a result of reductions in marketing expense consistent with prior quarters in 2025 and employee related expenses.
Current wording
Operating expenses for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 declined, primarily as a result of reductions in employee-related compensation.
Previous wording
Historically, our cash requirements have principally been for working capital purposes and acquisitions. In the short-term, our cash requirements are for working capital and payment of restructuring and other fees. We expect these and other cash needs to continue as we seek to improve, develop and transform our business. We fund our working capital, which is primarily comprised of inventory and accounts payable, and other cash requirements from cash flows from operating activities, cash on hand, and borrowings under our 2025 Revolving Credit Facility. Our cash flows from operating activities and borrowings under the 2025 Revolving Credit Facility are our principal sources of liquidity. Cash flows from operating activities result primarily from the sales of our portfolio of products. Our future product sales and our cash flows are difficult to predict, and actual sales may not be in line with our forecasts.
Current wording
Our cash requirements are for working capital, payment of restructuring and other fees, and repayment of our current and long-term debt obligations. We expect these and other cash needs to continue as we seek to improve, develop and transform our business. We fund our working capital, which is primarily comprised of inventory and accounts payable, and other cash requirements from cash flows from operating activities, cash on hand, and borrowings under our 2025 Revolving Credit Facility. Our cash flows from operating activities and borrowings under the 2025 Revolving Credit Facility are our principal sources of liquidity. Cash flows from operating activities result primarily from the sales of our portfolio of products. Our future product sales and our cash flows are difficult to predict, and actual sales may not be in line with our forecasts.
Previous wording
We are required to meet a Credit Agreement Adjusted EBITDA floor of $25 million for the twelve months ended December 31, 2025. In addition, the Company must comply with other financial covenants under the 2025 Refinancing Amendment (as defined below), including a minimum fixed charge coverage ratio, a maximum leverage ratio and a minimum liquidity amount, with the first full measurement period for such financial covenants to occur in the third quarter of 2026, as well as other non-financial covenants. While the 2025 Refinancing Amendment included amended financial covenants, as described in further detail below and in Note 11, Debt, Net, we expect to be in compliance with such covenants and believe our cash, cash equivalents and cash from operating activities will be sufficient to fund our obligations for at least the next twelve months following the issuance of these financial statements.
Current wording
The Company must comply with financial covenants under the 2025 Credit Agreement (as defined below), including a minimum fixed charge coverage ratio, a maximum leverage ratio and a minimum liquidity amount, with the first full measurement period for such financial covenants to occur in the third quarter of 2026, as well as other non-financial covenants as described in further detail below and in Note 10, Debt, Net, As of March 31, 2026, we expect to be in compliance with such covenants applicable as of such date under the 2025 Credit Agreement.
Previous wording
If we fail to realize the expected benefits from our cost saving and operational improvement initiatives, if our liquidity condition deteriorates, or if we pursue potential growth opportunities that are not successful, our business, operating results and financial condition could be materially adversely impacted and could result in the violation of our financial and nonfinancial covenants, which may require us to seek additional funds from issuances of equity or debt, including from additional credit facilities or loans from other sources. There is no guarantee that such sources will be available when needed, or at all.
Current wording
If we fail to realize the expected benefits from our ongoing and future cost saving and operational improvement initiatives, if our liquidity condition deteriorates, or if we pursue potential opportunities that are not successful, our business, operating results and financial condition could be materially adversely impacted and could result in the breach of our financial and nonfinancial covenants. As a result, we may be required to seek additional funds from issuances of equity or debt, including from additional credit facilities or loans from other sources, pursue strategic transactions or seek additional relief from our creditors. There is no guarantee that such sources, transactions or relief will be available when needed, or at all.
Previous wording
After giving effect to the loan reallocation and restructuring effected pursuant to the 2025 Refinancing Amendment, the credit facilities evidenced by the Amended Credit Agreement consist of the following: (i) revolving commitments under the Revolving Credit Facility in an aggregate amount equal to $90.0 million (the “2025 Revolving Credit Facility”); and (ii) refinancing term loans, including the 2021 Term Loan (the “2025 Term Loan”) in an aggregate principal amount equal to $240.0 million. The 2025 Revolving Credit Facility also includes the ability to issue up to $20.0 million in letters of credit, with $3.7 million of letters of credit issued and outstanding as of September 30, 2025. While our issuance of letters of credit does not increase our borrowings outstanding under the 2025 Revolving Credit Facility, it does reduce the amounts available under the 2025 Revolving Credit Facility.
Current wording
On June 13, 2025, we entered into Amendment No. 4 to Credit Agreement and Limited Waiver and Amendment No. 1 to Security Agreement (the “2025 Credit Agreement”) with JPMorgan Chase Bank, N.A., the Lenders and L/C Issuers party thereto (each as defined therein) and the other parties thereto. The 2025 Credit Agreement consists of the following: (i) revolving commitments under the Revolving Credit Facility in an aggregate amount equal to $90 million (the “2025 Revolving Credit Facility”), subject to availability under the borrowing base set forth in the 2025 Credit Agreement; and (ii) refinancing term loans, including the 2021 Term Loan (the “2025 Term Loan”) in an aggregate principal amount equal to $240 million. The 2025 Revolving Credit Facility also includes the ability to issue up to $20 million in letters of credit, with $3.7 million of letters of credit issued and outstanding as of March 31, 2026. While our issuance of letters of credit does not increase our borrowings outstanding under the 2025 Revolving Credit Facility, it does reduce the amounts available under the 2025 Revolving Credit Facility.
Previous wording
Under the 2025 Refinancing Amendment, the maturity date of the 2025 Revolving Credit Facility and the 2025 Term Loan is June 30, 2028. We are required to make mandatory amortization payments on the 2025 Term Loan as follows: (a) beginning with the fiscal quarter ending on June 30, 2026, the aggregate outstanding principal amount of the 2025 Term Loan as of June 13, 2025 multiplied by 0.25% and (b) beginning with the fiscal quarter ending on June 30, 2027, the aggregate outstanding principal amount of the 2025 Term Loan as of June 13, 2025 multiplied by 1.00%.
Current wording
Under the 2025 Credit Agreement, the maturity date of the 2025 Revolving Credit Facility and the 2025 Term Loan is June 30, 2028. We are required to make mandatory amortization payments on the 2025 Term Loan as follows: (a) beginning with the fiscal quarter ending on June 30, 2026, the aggregate outstanding principal amount of the 2025 Term Loan as of June 13, 2025 multiplied by 0.25% and (b) beginning with the fiscal quarter ending on June 30, 2027, the aggregate outstanding principal amount of the 2025 Term Loan as of June 13, 2025 multiplied by 1.00%.
Previous wording
Each of the 2025 Revolving Credit Facility and the 2025 Term Loan bear interest at (depending on our election from time to time) either an adjusted term rate defined in the agreement based on SOFR or the base rate defined in the Amended Credit Agreement, each plus an applicable margin. The interest is payable in kind, and thus capitalized thereon and increasing the principal balance thereof, (i) on a quarterly basis through March 31, 2026, and (ii) for the period beginning on April 1, 2026 and ending on March 31, 2027 and for which availability under the 2025 Revolving Credit Facility is less than $20.0 million, upon our election, after which time, it is only payable in cash. The unfunded portion of the commitments under the 2025 Revolving Credit Facility will accrue an annual commitment fee.
Current wording
Each of the 2025 Revolving Credit Facility and the 2025 Term Loan bear interest at (depending on our election from time to time) either an adjusted term rate defined in the agreement based on SOFR or the base rate defined in the 2025 Credit Agreement, each plus an applicable margin. The interest is payable in kind, and thus capitalized thereon and increasing the principal balance thereof, (i) on a quarterly basis through March 31, 2026, and (ii) for the period beginning on April 1, 2026 and ending on March 31, 2027 upon our election, and (iii) after March 31, 2027, it is only payable in cash. The unfunded portion of the commitments under the 2025 Revolving Credit Facility will accrue an annual commitment fee.
Previous wording
The 2025 Refinancing Amendment also requires the Company to comply with additional reporting requirements, including, among others, (i) delivering on the date that is twenty (20) days after the end of the previous calendar month (or thirty-five (35) days for the borrowing base certificate and accounts and inventory report due for the months ended May 30, 2025, June 30, 2025, and July 31, 2025), (a) a borrowing base certificate calculating the borrowing base and availability under the 2025 Revolving Credit Facility, (b) a 13-week cash flow forecast for the Company and its subsidiaries, (c) a liquidity report, and (d) an accounts and inventory report; and (ii) delivering no later than thirty (30) days after the end of the previous calendar month (commencing for the month ending June 30, 2025), a key performance indicator report and certain additional reports on the Company’s operating plan and other measures, such as Credit Agreement Adjusted EBITDA. In addition, the 2025 Refinancing Amendment extends the delivery dates for quarterly financial statement deliverables to sixty (60) days after the end of the applicable fiscal quarter.
Current wording
The 2025 Credit Agreement also requires the Company to comply with additional reporting requirements, including, among others, (i) delivering on the date that is twenty (20) days after the end of the previous calendar month (a) a borrowing base certificate calculating the borrowing base and availability under the 2025 Revolving Credit Facility, (b) a 13-week cash flow forecast for the Company and its subsidiaries, (c) a liquidity report, and (d) an accounts and inventory report; and (ii) delivering no later than thirty (30) days after the end of the previous calendar month, a key performance indicator report and certain additional reports on the Company’s operating plan and other measures, such as Credit Agreement Adjusted EBITDA. In addition, the 2025 Credit Agreement extends the delivery dates for quarterly financial statement deliverables to sixty (60) days after the end of the applicable fiscal quarter.
Previous wording
In addition, pursuant to the 2025 Refinancing Amendment, we are required to comply with the following financial covenants: (a) a maximum Total Leverage Ratio, which is tested on a quarterly basis, commencing with the fiscal quarter ending on September 30, 2026, (b) a minimum Fixed Charge Coverage Ratio, which is tested on a quarterly basis, commencing with the fiscal quarter ending on September 30, 2026, (c) a $10.0 million average minimum liquidity covenant for the first three calendar months of each fiscal year and a $20 million average minimum liquidity covenant for the last nine calendar months of each fiscal year, which in each case, is tested on a monthly basis, commencing with the fiscal month ending on July 31, 2026; and (d) a minimum Credit Agreement Adjusted EBITDA covenant of $25 million for the four fiscal quarter period ending on December 31, 2025.
Current wording
In addition, pursuant to the 2025 Credit Agreement, we will be or were required to comply with the following financial covenants: (a) a maximum Total Leverage Ratio, which is tested on a quarterly basis, commencing with the fiscal quarter ending on September 30, 2026, (b) a minimum Fixed Charge Coverage Ratio, which is tested on a quarterly basis, commencing with the fiscal quarter ending on September 30, 2026, (c) a $10.0 million average minimum liquidity covenant for the first three calendar months of each fiscal year and a $20 million average minimum liquidity covenant for the last nine calendar months of each fiscal year, which in each case as applicable, is tested on a monthly basis, commencing with the fiscal month ending on July 31, 2026.
Previous wording
The $50.5 million increase in cash used in operating activities period over period, was due to a $16.1 million increase in cash usage from changes in operating assets and liabilities (“working capital”), which was primarily driven by an increase in cash usage in the first and second quarters of 2025 for accounts payable as of December 31, 2024, mostly related to inventory purchases and marketing expenses incurred in the fourth quarter of 2024, offset in part by the reduction in replenishment of inventory as we focus on prudent management of our inventory balances in the 2025 period. The increase in changes in working capital was coupled with an increase in cash usage of $34.5 million from changes in net income (loss) after non-cash adjustments, driven by a decline in our operations, primarily net sales, reflected through changes in net income (loss).
Current wording
The $59.1 million decrease in cash used in operating activities period over period, was due to a $45.1 million decline in cash usage from changes in operating assets and liabilities (“working capital”), which was mostly related to accounts payable reductions in the current quarter. The decrease in changes in working capital was coupled with a decrease in cash usage of $14.0 million from changes in net income (loss) after non-cash adjustments, driven by a reduction in net loss, plus interest expense payable in kind recognized in the first quarter of 2026.
Previous wording
The $1.9 million decrease in cash used in investing activities in the current period when compared to the prior year period was primarily due to a decline in the number of retail store openings within our Chubbies Segment in the current year when compared to the prior, with just one store opening as of September 30, 2025 and six store openings as of September 30, 2024.
Current wording
The $0.9 million decrease in cash used in investing activities in the current period when compared to the prior period was due to a decrease in capital expenditures.
Previous wording
The $60.0 million increase in cash provided by financing activities in the current period when compared to the prior year period was primarily driven by a $58.2 million increase in cash provided by net debt activity, inclusive of borrowings, repayments and debt issuance costs in relation to the 2025 Refinancing Amendment, offset in part by a $2.5 million payment in connection with the disposition of the TerraFlame manufacturing operations.
Current wording
The $257.9 million decrease in cash provided by financing activities in the current period when compared to the prior year period was primarily driven by a $258.0 million decrease in cash provided by net debt activity, inclusive of borrowings, repayments and debt issuance costs in relation to the 2025 Credit Agreement in the prior year quarter.
Previous wording
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. In preparing the consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosure of contingent assets and liabilities. We re-evaluate our estimates on an ongoing basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions.
Current wording
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. In preparing the consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosure of contingent assets and liabilities. We re-evaluate our estimates on an ongoing basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions.
Previous wording
See Note 2 - Significant Accounting Policies, to the audited consolidated financial statements included in our 2024 Form 10-K for more information about our significant accounting policies, including our critical accounting policies. The critical accounting estimates that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements are described in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2024 Form 10-K. During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies and estimates from those discussed in our 2024 Form 10-K. Within the context of these critical accounting estimates, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
Current wording
See Note 2 - Significant Accounting Policies, to the audited consolidated financial statements included in our 2025 Form 10-K for more information about our significant accounting policies, including our critical accounting policies. The critical accounting estimates that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements are described in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2025 Form 10-K. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies and estimates from those discussed in our 2025 Form 10-K. Within the context of these critical accounting estimates, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
Previous wording
For a description of recent accounting pronouncements, see “Recently Adopted Accounting Pronouncements” and “Recently Issued Accounting Pronouncements—Not Yet Adopted” in Note 1 - Significant Accounting Policies, to the unaudited consolidated financial statements included elsewhere in this Quarterly Report.
Current wording
For a description of recent accounting pronouncements, see “Recently Issued Accounting Pronouncements—Not Yet Adopted” in Note 1 - Significant Accounting Policies, to the unaudited consolidated financial statements included elsewhere in this Quarterly Report.
Previous wording
We currently qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, we are provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. Until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act, we have elected to adopt new or revised accounting guidance within the same time period as private companies, unless management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Our utilization of these transition periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act.
Current wording
We currently qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, we are provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We have elected to adopt new or revised accounting guidance within the same time period as private companies, unless management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Our utilization of these transition periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act. We expect that we will no longer qualify as an emerging growth company as of December 31, 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
During the three months ended March 31, 2026, the Company executed areduction in force (“RIF”) of management and non-management personnel in an effort to align headcount with the operational needs of the business, resulting in a moderate decline in related expenses in the short term, with the significance of the savings anticipated to be recognized in future periods.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
In order to fund the cash outlays required for these initiatives, the Company leveraged income from operations and draws on the 2021 Revolving Credit Facility. The following table outlines the cash outlays and the period in which they occurred.
Previous report — wording carried elsewhere
Discussion within the relevant comparative periods and sections have been included below.