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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 001-40979

Solo Brands, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware									87-1360865
State or Other Jurisdiction of Incorporation or Organization									I.R.S. Employer Identification No.

1001 Mustang Dr.
Grapevine, TX									76051
Address of Principal Executive Offices									Zip Code

(817) 900-2664

Registrant’s Telephone Number, Including Area Code

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value per share	SBDS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Smaller reporting company	☒
Accelerated filer	☒	Emerging growth company	☒
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2025, there were 1,647,827 shares of the registrant’s Class A common stock, $0.001 par value per share, outstanding and 827,326 shares of the registrant’s Class B common stock, $0.001 par value per share, outstanding. The foregoing reflects the reverse stock split of the registrant’s Class A common stock and Class B common stock that became effective on July 8, 2025.


TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS			i
Where You Can Find More Information			i

PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements			1
Consolidated Balance Sheets (Unaudited)			1
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)			2
Consolidated Statements of Cash Flows (Unaudited)			3
Consolidated Statements of Equity (Unaudited)			4

Notes to the Consolidated Financial Statements (Unaudited)			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			32
PART II. OTHER INFORMATION			33
Item 1. Legal Proceedings			33
Item 1A. Risk Factors			33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 3. Defaults Upon Senior Securities			34
Item 4. Mine Safety Disclosures			34
Item 5. Other Information			34
Item 6. Exhibits			35
Signatures			36

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) of Solo Brands, Inc. (the “Company,” “we,” “our,” or “us”) contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to statements regarding our future ability to continue as a going concern, our ability to transform our business, improve our liquidity and long-term capital structure, including through the continued execution of cost saving and operational improvements, our compliance with the listing standards of the New York Stock Exchange (the “NYSE”), expectations with respect to the trading of our Class A common stock following the reverse stock split and trading reinstatement on the NYSE effected in July 2025, our future results of operations and financial position, the effect of tariffs, industry and business trends, business strategy, plans, restocking trends, market growth, compliance with debt covenants and our objectives for future operations.

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our future ability to continue as a going concern; our ability to realize expected benefits from our strategic plans; our ability to implement any restructuring and cost-reduction efforts; our limited liquidity; our ability to mitigate the impact of new and increased tariffs and similar restrictions on our business; our reliance on third-party manufacturers, which operate mostly outside of the U.S., and problems with, or the loss of, our suppliers or an inability to obtain raw materials; our dependence on cash generated from operations to support our business and our growth initiatives; our continued ability to comply with the listing standards of the NYSE; the effects of the reverse stock split effected in July 2025 on the trading of our Class A common stock; risks associated with fluctuations in the price of our Class A common stock; risks associated with our indebtedness, including the limits imposed by our indebtedness to invest in the ongoing needs of our business; our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products; our ability to design, develop and introduce new products; our ability to manage our future growth effectively; our ability to expand into additional markets; risks associated with our international operations; our inability to sustain historic growth rates; our ability to cost-effectively attract new customers and retain our existing customers; the highly competitive market in which we operate; our failure to maintain product quality and product performance at an acceptable cost; the impact of product liability and warranty claims and product recalls, including write-offs; geopolitical actions, natural disasters, or pandemics; the ability of our largest stockholders to influence corporate matters; and the important factors discussed in Part I, Item 1A. “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 12, 2025, and in Part II, Item 1A. “Risk Factors” in this Quarterly Report, as any such factors may be updated from time to time in its other filings with the SEC. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits to this Quarterly Report with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events or otherwise.

WHERE YOU CAN FIND MORE INFORMATION

We may use our website as a distribution channel of material information about the Company, including through press releases, investor presentations, and notices of upcoming events. We intend to utilize the investor relations section of our website at https://investors.solobrands.com as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD. We also intend to use certain social media channels, including, but not limited to, X (formerly Twitter), Facebook, Instagram, TikTok and LinkedIn, as a means of communicating with the public, our customers and investors about our Company, our products, and other matters. While not all of the information that the Company posts to its website and brand-related social media channels may be deemed to be of a material nature, some information may be, and we therefore encourage investors, the media, and others interested in our Company to review the information we make public in these locations.

All periodic and current reports, registration statements and other filings that we have filed or furnished to the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge from the SEC’s website (www.sec.gov) and on our website at https://investors.solobrands.com. Such documents are available as soon as reasonably practicable after electronic filing of the material with the SEC.

Any reference to our website or social media channels does not constitute incorporation by reference of the information contained on or available through our website, and you should not consider such information to be a part of the periodic and current reports, registration statements or other filings that we file or furnish with the SEC from time to time.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

SOLO BRANDS, INC.

Consolidated Balance Sheets

(Unaudited)


(In thousands, except par value and per share data)	September 30, 2025		December 31, 2024
ASSETS
Current assets
Cash and cash equivalents	$	16,334	$	11,980
Accounts receivable, net of allowance for credit losses of $1.3 million and $1.1 million as of September 30, 2025 and December 31, 2024, respectively	15,865		39,440
Inventory	84,831		108,575
Prepaid expenses and other current assets	11,220		12,223
Total current assets	128,250		172,218
Non-current assets
Property and equipment, net	15,784		24,195
Intangible assets, net	177,212		189,701
Goodwill	73,119		73,119
Operating lease right-of-use assets	20,377		27,683
Other non-current assets	16,303		8,144
Total non-current assets	302,795		322,842
Total assets	$	431,045	$	495,060

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	10,662	$	69,598
Accrued expenses and other current liabilities	27,003		41,661
Deferred revenue	1,200		1,829
Current portion of long-term debt	1,200		8,625
Total current liabilities	40,065		121,713
Non-current liabilities
Long-term debt, net	233,966		142,060
Deferred tax liability	5,698		6,795
Operating lease liabilities	16,300		22,079
Other non-current liabilities	1,210		9,056
Total non-current liabilities	257,174		179,990

Commitments and contingencies (Note 1)

Shareholders’ equity
Class A common stock, par value $0.001 per share; 475,000,000 shares authorized; 1,647,611 and 1,470,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	2		1
Class B common stock, par value $0.001 per share; 50,000,000 shares authorized, 827,326 shares issued and outstanding as of September 30, 2025 and December 31, 2024	1		1
Additional paid-in capital	369,665		363,691
Retained earnings (accumulated deficit)	(269,329)		(228,814)
Accumulated other comprehensive income (loss)	(246)		(434)
Treasury stock	(956)		(733)
Equity attributable to the controlling interest	99,137		133,712
Equity attributable to non-controlling interests	34,669		59,645
Total equity	133,806		193,357
Total liabilities and equity	$	431,045	$	495,060

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2025		2024		2025		2024
Net sales	$	53,038	$	94,139	$	222,547	$	311,013
Cost of goods sold	21,192		54,820		91,497		138,513
Gross profit	31,846		39,319		131,050		172,500
Operating expenses
Selling, general & administrative expenses	39,495		61,119		126,171		180,337
Depreciation and amortization expenses	5,824		6,574		19,107		19,255
Restructuring, contract termination and impairment charges	1,940		83,618		18,030		83,618
Other operating expenses	764		3,294		4,397		8,688
Total operating expenses	48,023		154,605		167,705		291,898
Income (loss) from operations	(16,177)		(115,286)		(36,655)		(119,398)
Non-operating (income) expense
Interest expense, net	7,556		3,683		19,115		10,352
Other non-operating (income) expense	(255)		(619)		2,432		(378)
Total non-operating (income) expense	7,301		3,064		21,547		9,974
Income (loss) before income taxes	(23,478)		(118,350)		(58,202)		(129,372)
Income tax expense (benefit)	(552)		(6,897)		4,068		(7,398)
Net income (loss)	(22,926)		(111,453)		(62,270)		(121,974)
Less: net income (loss) attributable to noncontrolling interests	(7,900)		(41,589)		(21,584)		(45,597)
Net income (loss) attributable to Solo Brands, Inc.	$	(15,026)	$	(69,864)	$	(40,686)	$	(76,377)

Other comprehensive income (loss)
Foreign currency translation, net of tax	$	7	$	82	$	188	$	6
Comprehensive income (loss)	(22,919)		(111,371)		(62,082)		(121,968)
Less: other comprehensive income (loss) attributable to noncontrolling interests	(7)		(24)		57		3
Less: net income (loss) attributable to noncontrolling interests	(7,900)		(41,589)		(21,584)		(45,597)
Comprehensive income (loss) attributable to Solo Brands, Inc.	$	(15,012)	$	(69,758)	$	(40,555)	$	(76,374)

Net income (loss) per Class A common stock
Basic and diluted	$	(9.22)	$	(47.72)	$	(26.59)	$	(52.38)


Weighted-average Class A common stock outstanding
Basic and diluted	1,629		1,464		1,530		1,458

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(In thousands)	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(62,270)	$	(121,974)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Depreciation and amortization	19,927		19,942
PIK Interest	7,138		—
Noncash operating lease expense	5,855		6,517
Amortization of debt issuance costs	2,059		645
Equity-based compensation, net	1,833		4,545
Loss on disposition of the TerraFlame manufacturing operations	1,516		—
Inventory charges associated with restructuring and consolidation activities	—		18,742
Prepaid marketing charges	—		1,871
Restructuring, contract termination and impairment charges	(220)		83,618
Other	861		290

Change in fair value of contingent consideration	(787)		4,721
Deferred income taxes	(1,097)		(9,631)



Changes in assets and liabilities
Accounts receivable	22,442		4,058
Inventory	24,180		(12,434)
Prepaid expenses and other current assets	1,036		(807)
Accounts payable	(57,597)		29,608
Accrued expenses and other current liabilities	(13,759)		(20,282)
Deferred revenue	(639)		(3,566)
Operating lease liabilities	(4,652)		(4,176)
Other non-current assets and liabilities	1,155		(1,157)
Payments of contingent consideration	—		(3,000)


Net cash (used in) provided by operating activities	(53,019)		(2,470)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures - patents, property and equipment	(4,600)		(6,898)
Capital expenditures - software	(4,990)		(4,614)


Net cash (used in) provided by investing activities	(9,590)		(11,512)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facilities and term loans	277,322		40,000
Repayments of revolving credit facilities and term loans	(189,322)		(28,750)
Debt issuance costs paid	(18,502)		—
Net consideration paid to Former Sellers of TerraFlame	(2,500)		—
Finance lease liability principal paid	—		(144)


Distributions to non-controlling interests	—		(4,284)

Surrender of stock to settle taxes on restricted stock awards	(223)		(188)

Stock issued under employee stock purchase plan	—		178
Net cash (used in) provided by financing activities	66,775		6,812
Effect of exchange rate changes on cash	188		(178)
Net change in cash and cash equivalents	4,354		(7,348)
Cash and cash equivalents balance, beginning of period	11,980		19,842
Cash and cash equivalents balance, end of period	$	16,334	$	12,494

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Equity

(Unaudited)


	Class A Common Stock			Class B Common Stock
(In thousands)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interest		Total Shareholders’ Equity
Balance at December 31, 2024	1,470	$	1	827	$	1	$	363,691	$	(228,814)	$	(434)	$	(733)	$	59,645	$	193,357
Net income (loss)	—	—		—	—		—		(12,192)		—		—		(6,385)		(18,577)
Equity-based compensation, net of income tax expense (benefit)	10	—		—	—		368		—		—		—		(313)		55
Other comprehensive income (loss)	—	—		—	—		—		—		—		—		—		—


Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(213)		—		(213)
Vested equity-based compensation and re-allocation of ownership percentage	—	—		—	—		(9)		—		—		—		9		—
Balance at March 31, 2025	1,480	$	1	827	$	1	$	364,050	$	(241,006)	$	(434)	$	(946)	$	52,956	$	174,622
Net income (loss)	—	—		—	—		—		(13,468)		—		—		(7,299)		(20,767)
Equity-based compensation, net of income tax expense (benefit)	—	—		—	—		582		—		—		—		325		907
Other comprehensive income (loss)	—	—		—	—		—		—		181		—		—		181

Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(3)		—		(3)
Issuance of Class A common stock in lieu of cash lender consent fee	122	—		—	—		750		—		—		—		—		750
Other	—	—		—	—		(2)		171		—		—		—		169
Vested equity-based compensation and re-allocation of ownership percentage(1)	21	—		—	—		3,306		—		—		—		(3,306)		—
Balance at June 30, 2025	1,623	$	2	827	$	1	$	368,686	$	(254,303)	$	(253)	$	(949)	$	42,676	$	155,860
Net income (loss)	—	—		—	—		—		(15,026)		—		—		(7,900)		(22,926)
Equity-based compensation, net of income tax expense (benefit)	—	—		—	—		557		—		—		—		314		871
Other comprehensive income (loss)	—	—		—	—		—		—		7		—		—		7


Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(7)		—		(7)
Other	—	—		—	—		—		—		—		—		—		—
Vested equity-based compensation and re-allocation of ownership percentage	25	—		—	—		422		—		—		—		(421)		1
Balance at September 30, 2025	1,648	$	2	827	$	1	$	369,665	$	(269,329)	$	(246)	$	(956)	$	34,669	$	133,806

(1) Reflects the re-allocation of equity from the non-controlling interest to the Company in relation to the share issuance to a certain lender in lieu of a cash consent fee, in connection with the refinancing activity described in Note 11, Debt, Net.

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

Consolidated Statements of Equity

(Unaudited)


	Class A Common Stock			Class B Common Stock
(In thousands)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interest		Total Equity
Balance at December 31, 2023	1,449	$	1	826	$	1	$	357,474	$	(115,458)	$	(230)	$	(526)	$	131,001	$	372,263
Net income (loss)	—	—		—	—		—		(3,402)		—		—		(3,082)		(6,484)
Equity-based compensation, net of income tax expense (benefit)	—	—		—	—		1,109		—		—		—		—		1,109
Other comprehensive income (loss)	—	—		—	—		—		—		(43)		—		—		(43)
Tax distributions to non-controlling interests	—	—		—	—		—		—		—		—		(4,284)		(4,284)
Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(122)		—		(122)

Vested equity-based compensation and re-allocation of ownership percentage	5	—		1	—		(349)		—		—		—		349		—
Balance at March 31, 2024	1,454	$	1	827	$	1	$	358,234	$	(118,860)	$	(273)	$	(648)	$	123,984	$	362,439
Net income (loss)	—	—		—	—		—		(3,111)		—		—		(926)		(4,037)
Equity-based compensation, net of income tax expense (benefit)	—	—		—	—		1,230		—		—		—		—		1,230
Other comprehensive income (loss)	—	—		—	—		—		—		(33)		—		—		(33)

Employee stock purchase plan	1	—		—	—		179		—		—		—		—		179


Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(31)		—		(31)
Vested equity-based compensation and re-allocation of ownership percentage	7	—		—	—		41		—		—		—		(41)		—
Balance at June 30, 2024	1,462	$	1	827	$	1	$	359,684	$	(121,971)	$	(306)	$	(679)	$	123,017	$	359,747
Net income (loss)	—	—		—	—		—		(69,864)		—		—		(41,589)		(111,453)
Equity-based compensation, net of income tax expense (benefit)	—	—		—	—		1,679		—		—		—		—		1,679
Other comprehensive income (loss)	—	—		—	—		—		—		82		—		—		82





Surrender of stock to settle taxes on equity awards	—	—		—	—		—		—		—		(35)		—		(35)
Vested equity-based compensation and re-allocation of ownership percentage	46	—		—	—		(583)		—		—		—		583		—
Balance at September 30, 2024	1,508	$	1	827	$	1	$	360,780	$	(191,835)	$	(224)	$	(714)	$	82,011	$	250,020

See Notes to Consolidated Financial Statements (Unaudited)

SOLO BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands)

(Unaudited)

NOTE 1 – Significant Accounting Policies

Included below are selected significant accounting policies. Refer to Note 2 - Significant Accounting Policies, within the annual consolidated financial statements in the Company’s 2024 Form 10-K for the full list of significant accounting policies.

Basis of Presentation

The unaudited consolidated financial statements contained herein have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the rules of the Securities and Exchange Commission (the “SEC”). Accordingly, these unaudited consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented have been reflected. The unaudited consolidated financial statements include those of our wholly-owned and majority-owned subsidiaries and the entity consolidated under the variable interest entity model. Intercompany balances and transactions are eliminated in consolidation. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the 2024 Form 10-K. Certain prior period amounts have been conformed to the current period’s presentation.

Reverse Stock Split

On July 8, 2025, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of all issued and outstanding shares of the Company’s common stock at a ratio of 1-for-40. The reverse stock split did not change the par value or the authorized number of shares of the Company’s common stock. The Company’s condensed consolidated financial statements present the retroactive effect of the reverse stock split on the Company’s Class A and Class B common stock and per share amounts for all periods presented.

Going Concern Evaluation

The consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of the filing dates of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the three months ended March 31, 2025, the Company concluded that substantial doubt existed about the Company’s ability to continue as a going concern for one year following the issuance of each of the financial statements as a result of the Company’s net losses, accumulated deficit and liquidity position, as well as the Company’s noncompliance with certain financial covenants under the credit agreement governing the 2021 Revolving Credit Facility (as defined herein) and the 2021 Term Loan (as defined herein) as of March 31, 2025.

On June 13, 2025, the Company entered into Amendment No. 4 to Credit Agreement and Limited Waiver and Amendment No. 1 to Security Agreement (the “2025 Refinancing Amendment”), which amends the credit agreement dated as of May 12, 2021 (as amended by Amendment No. 1, dated as of June 2, 2021, Amendment No. 2, dated as of September 1, 2021, Amendment No. 3, dated as of May 22, 2023, the “Credit Agreement” and as further amended by the 2025 Refinancing Amendment, the “Amended Credit Agreement”), by and among the Borrower, JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and letter of credit issuer, and the lenders party thereto.

The 2025 Refinancing Amendment amended the Credit Agreement to, among other things, effect a restructuring of all revolving loans and term loans then outstanding. The 2025 Refinancing Amendment resulted in extended maturities, lower short-term cash requirements as a result of the Company’s 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 the Company with financial flexibility and a longer runway to continue the Company’s efforts to stabilize and transform the business. Following the 2025 Refinancing Amendment, the Company’s plans continue to be focused on improving its 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.

As a result of the factors noted above, the substantial doubt surrounding the Company’s ability to continue as a going concern that was raised as of the issuance date of the December 31, 2024 and March 31, 2025 financial statements was alleviated. The Company is 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, including a minimum fixed charge coverage ratio, a maximum leverage ratio and a minimum liquidity amount, with 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 in Note 11, Debt, Net, the Company expects to be in compliance with such covenants and believes its cash, cash equivalents and cash from operating activities will be sufficient to fund the Company’s obligations for at least the next twelve months following the issuance of these financial statements.

If the Company fails to realize the expected benefits from its cost saving and operational improvement initiatives, if the Company’s liquidity condition deteriorates, or if the Company pursues potential growth opportunities that are not successful, the Company’s business, operating results

and financial condition could be materially adversely impacted and could result in the violation of its financial and nonfinancial covenants, which may require it 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.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates and assumptions about future events and their effects cannot be made with certainty. Estimates may change as new events occur when additional information becomes available and if the operating environment changes. Actual results could differ from estimates.

Debt Issuance Costs

Debt issuance costs related to term debt are recorded as a direct deduction from the carrying value of the associated debt liability on the consolidated balance sheets. The costs are amortized using the effective interest rate method over the term of the related debt. Debt issuance costs related to revolving loans are recorded within other non-current assets and amortized straight-line over the term of the related debt. Amortization of debt issuance costs are recorded as a component of interest expense, net on the consolidated statements of operations and comprehensive income (loss). Costs incurred in connection with an expected refinancing, restructuring or debt issuance are capitalized and recorded within other non-current assets. Upon completion of the transaction, such costs are reclassified to their appropriate presentation based on the nature of the resulting debt instrument.

Restructuring, Contract Termination and Impairment Charges

Restructuring, contract termination and impairment charges are primarily comprised of severance and employee-related benefits, contract termination fees and asset impairment charges. We recognize employee severance costs as a liability at estimated fair value, at the time of communication to employees, unless future service is required, in which case the costs are recognized ratably over the future service period. Contract termination fees include costs incurred to terminate a contract and the impacts to related assets or liabilities associated with these contracts. Asset impairment charges include impairments of long-lived assets and goodwill, as addressed in Note 2 - Significant Accounting Policies, in the 2024 Form 10-K. Restructuring, contract termination and asset impairment activities are recognized when they are incurred and included in restructuring, contract termination and impairment charges on the consolidated statements of operations and comprehensive income (loss).

Commitments and Contingencies

From time to time, the Company is involved in various legal proceedings. While the Company intends to prosecute and defend any lawsuit vigorously, the Company presently believes that the ultimate outcome of any currently pending legal proceeding will not have any material adverse effect on its financial position, cash flows, or results of operations. However, litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, which could impact the Company’s business and the results of operations for the period in which the ruling occurs or future periods. Based on the information available, the Company evaluates the likelihood of potential outcomes. The Company records the appropriate liability when the amount is deemed probable and reasonably estimable. In addition, the Company does not accrue for estimated legal fees and other directly related costs as they are expensed as incurred. The consolidated balance sheets do not include a liability for any potential obligations as of September 30, 2025 or December 31, 2024.

Recently Issued Accounting Pronouncements - Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, that requires presentation of specific categories of reconciling items, as well as reconciling items that meet a quantitative threshold, in the reconciliation between the income tax provision and the income tax provision using statutory tax rates. The ASU also requires disclosure of income taxes paid disaggregated by jurisdiction with separate disclosure of income taxes paid to individual jurisdictions that meet a quantitative threshold. The amendments in this accounting standard are effective for fiscal years beginning after December 15, 2024, on a prospective basis. Early adoption and retrospective application are permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements but will require certain additional disclosures in the Company’s financial statements for the year ending December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), expanding disclosure requirements related to certain income statement expenses. The ASU also requires tabular disclosure of certain operating expenses disaggregated into categories, such as purchases of inventory, employee compensation, and depreciation. The FASB subsequently issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) to clarify the effective date of ASU 2024-03. The guidance is effective for fiscal years beginning after December 15, 2026, on a prospective basis, with retrospective application being optional. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements but will require certain additional disclosures.

NOTE 2 - Restructuring, Contract Termination and Impairment Charges

2025 Restructuring Activity

In 2025, management and the Board of Directors of the Company engaged strategic consulting firms to assist the Company with improving financial results from its operations. This operational improvement effort 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 the operational expenses of the Company and aid in the development of enhanced internal reporting to deliver timely insight to management. Expenses related to these strategic consulting firms recognized within restructuring were $0.5 million and $7.0 million for the three and nine months ended September 30, 2025, respectively.

The cost saving initiatives identified and executed upon in the nine months ended September 30, 2025 have been designed to reduce operational expenditures over the long-term. The key cost saving initiatives and operational planning activities undertaken in the nine months ended September 30, 2025 in excess of $0.5 million, for which the Company recorded the related charges to restructuring, contract termination and impairment charges on the consolidated statements of operations and comprehensive income (loss) as applicable, were as follows (all amounts listed are year to date, with the amounts for the three months ended September 30, 2025 included in the table below):

•Restructuring

◦retention payments to key personnel to support the sustainment of operations and focus on cost saving and operational improvements, resulting in a restructuring charge of $5.7 million;

◦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, resulting in a restructuring charge of $1.0 million;

◦expenses related to the strategic consulting firms discussed above, resulting in a restructuring charge of $7.0 million;

•Contract Terminations

•termination of an underperforming licensing agreement in an effort to redeploy the allocated funds for operational purposes, resulting in a charge to contract termination of $2.5 million;

•settlement of a termination fee with a former advertising services vendor, with a previously accrued balance of $5.4 million that was settled for $4.0 million, a $1.4 million benefit to the Company; and

•closure of two distribution centers in the first half of 2025 and one distribution center in the third quarter of 2025 to reduce fixed costs in the short term and in future periods, as well as eliminate unnecessary capacity, resulting in charges to restructuring of $1.5 million, contract termination of $0.2 million and impairment of $0.5 million, or an aggregate charge to expense of $2.2 million.

2024 Restructuring Activity

In 2024, the Company underwent a significant change in management and personnel across the organization. The management team engaged in a detailed review of the business and its brand level components, both internally and through the engagement of external strategic partners. Management developed a strategic plan focused on returning the Company back to growth. This strategic plan involved the following activities:

•termination of underperforming marketing agreements with marketing barter partners that no longer aligned with the Company’s current marketing strategy;

•charges related to the IcyBreeze reporting unit stemming from underperformance and management’s determination to revise product design; and

•reorganization of the Oru and ISLE reporting units to eliminate costs and capitalize on potential synergies, through restructuring under a revised management structure, which resulted in severance and other changes.

As a result of these activities, the Company recognized significant charges for restructuring and contract terminations, in addition to asset impairment charges related to IcyBreeze. This plan was completed in the fourth quarter of 2024 and, as such, there are no outstanding liabilities related to this plan as of September 30, 2025.

The components of the restructuring, contract termination and impairment charges, inclusive of the $25.0 million goodwill impairment charge recognized at the Solo Stove reporting unit in the third quarter of 2024, as discussed in Note 8, Goodwill, are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025	2024
Restructuring charges(1)	$	1,572	$	580	15,803	580
Impairment charges	333		68,216		804	68,216
Contract termination	35		14,822		1,423	14,822
Total restructuring, contract termination and impairment charges	$	1,940	$	83,618	18,030	83,618

(1) Includes other immaterial amounts that are not outlined in the narrative above.

The changes in restructuring liabilities for the nine months ended September 30, 2025 are as follows:


(in thousands)	Restructuring Charges
Balance at December 31, 2024	$	—
Restructuring charges	15,803
Payments	(14,732)
Non-cash restructuring charges	(318)
Balance at September 30, 2025	$	753

The following table summarizes the current liabilities related to the restructuring charges:


(in thousands)	September 30, 2025		December 31, 2024
Accounts payable	$	137	$	—
Accrued expenses and other current liabilities	616		—
Total current liabilities	$	753	$	—

The Company expects to continue to evaluate and identify additional cost saving initiatives that it may execute in the near term, with potential expenses to be incurred at the onset of said initiative that will be reflected within restructuring, contract termination and/or impairment charges. As of September 30, 2025, the Company is unable to estimate the potential upfront costs of these future cost saving initiatives, due to their preliminary nature.

NOTE 3 – Revenue

The Company primarily engages in direct-to-consumer transactions, which are comprised of product sales directly from the Company’s website, and business-to-business transactions, or retail, which are comprised of product sales to retailers, including where possession of the Company’s products is taken and sold by the retailer in-store or online.

The following table disaggregates net sales by channel (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net sales by channel
Direct-to-consumer	$	42,027	$	64,480	$	135,493	$	214,293



Retail	11,011		29,659		87,054		96,720



Net sales	$	53,038	$	94,139	$	222,547	$	311,013

NOTE 4 – Inventory

Inventory consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Finished products on hand, net of inventory obsolescence reserve of $2.6 million and $15.2 million as of September 30, 2025 and December 31, 2024, respectively	$	73,977	$	80,098
Finished products in transit	9,120		21,756
Raw materials	1,734		6,721


Inventory	$	84,831	$	108,575

NOTE 5 – Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Inventory deposits	$	2,692	$	2,066
Retainers(1)	1,835		—
Tax receivables	1,626		2,026
Software	1,072		1,016
Prepaid marketing	781		535
Insurance(2)	408		2,556

Other	2,806		4,024
Prepaid expenses and other current assets	$	11,220	$	12,223

(1) The retainers line item reflects certain vendors requiring advance payments for their services in 2025.

(2) The insurance line item decreased, as a result of the premium payments occurring in the fourth quarter of each year.

NOTE 6 – Property and Equipment, Net

Property and equipment, net consisted of the following:


	September 30, 2025		December 31, 2024
Machinery	$	14,289	$	14,145
Leasehold improvements	10,632		11,058
Buildings(1)	1,136		4,238
Furniture and fixtures	6,038		5,259
Software and website development	1,981		1,804
Computer and other equipment	1,923		1,809
Land(1)	94		1,090
Construction in progress	162		335
Property and equipment, gross	36,255		39,738
Accumulated depreciation	(20,471)		(15,543)
Property and equipment, net	$	15,784	$	24,195

(1) The buildings and land line items decreased as a result of the disposition of the TerraFlame manufacturing operations (as defined in Note 17, Variable Interest Entities) during the second quarter of 2025, as discussed in Note 17, Variable Interest Entities.

Depreciation expense was $1.4 million and $4.8 million for the three and nine months ended September 30, 2025, compared to $1.4 million and $3.8 million for the three and nine months ended September 30, 2024, respectively. Depreciation expense is recorded to depreciation and amortization expenses on the consolidated statements of operations and comprehensive income (loss).

NOTE 7 – Intangible Assets, Net

Intangible assets consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Gross carrying value
Brand	$	205,614	$	205,614
Trademark	26,773		26,714
Customer relationships	31,128		31,128

Patents	15,690		14,211
Intangible assets, gross	279,205		277,667

Accumulated amortization and impairments(1)
Brand	(72,766)		(62,783)
Trademarks	(7,296)		(5,956)
Customer relationships	(11,905)		(9,839)

Patents	(10,026)		(9,388)
Accumulated amortization and impairments(1)	(101,993)		(87,966)
Intangible assets, net	$	177,212	$	189,701

(1) Includes aggregate impairments for brand of $6.5 million, trademarks of $5.4 million, customer relationships of $0.5 million and patents of $6.8 million as of September 30, 2025 and December 31, 2024.

Second and Third Quarters - 2025

In the second and third quarters of 2025, the Company did not identify any triggering events that would indicate the potential for impairment of its held and used long-lived asset groups.

First Quarter - 2025

In the first quarter of 2025, the Company observed the following triggering events for the Company’s held and used long-lived asset groups:

•A sustained decline in the share price of the Company’s Class A common stock as of March 31, 2025; and

•the potential impact of tariff increases.

Long-lived asset groups are determined by the lowest level of independent, identifiable cash flows, for which the Company has determined are its brands and in the case of Chubbies, the owned retail store level. As a result of the identified triggering events, the Company performed a recoverability test for the identified long-lived asset groups. The results of the test indicated that the carrying amounts for the long-lived asset groups were expected to be recoverable.

2024 Impairment Testing

In the third quarter of 2024, the Company observed the following triggering events for the Company’s held and used long-lived asset groups:

•A sustained decline in the share price of the Company’s Class A common stock as of September 30, 2024; and

•Underperformance of the IcyBreeze reporting unit for the third quarter and year to date period ended September 30, 2024;

As a result of the identified triggering events, the Company performed a recoverability test for the identified long-lived asset groups, and the results of the test indicated that the carrying amounts for the long-lived asset group of IcyBreeze were not expected to be recovered. The Company estimated the fair value of the asset group, which included the use of level 3 inputs, of IcyBreeze and wrote down the intangible assets to their estimated fair value, resulting in nominal value assigned to the existing intangible asset(s). See Note 2, Restructuring, Contract Termination and Impairment Charges for impairment considerations as they relate to the property and equipment, net of IcyBreeze.

The Company recorded an aggregate $13.3 million impairment charge to the intangible assets of IcyBreeze as of December 31, 2024. As a result of this impairment charge, the Company also reassessed the useful life of the intangible assets of IcyBreeze. As of December 31, 2024, $0.9 million of value continued to be attributable to the patent intangible asset of IcyBreeze, for which the Company expects to continue to obtain value over its remaining useful life. As such, the remaining useful life of the patent intangible asset was not revised. The impact of the impairment does not have a material impact to amortization expense in any future year.

NOTE 8 – Goodwill

The carrying value of goodwill at our Chubbies reporting unit, the only reporting unit with remaining goodwill, was $73.1 million as of September 30, 2025 and December 31, 2024.

Second and Third Quarters - 2025

In the second and third quarters of 2025, the Company did not identify any triggering events that would indicate the potential for impairment of its remaining goodwill balance.

First Quarter 2025

In the first quarter of 2025, the Company identified indications of impairment, as noted above in Note 7, Intangible Assets, Net. The Company elected to perform a qualitative goodwill analysis (“Step 0”) of the Chubbies reporting unit, which included assessing the economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit, prior period fair values and other entity and reporting unit specific events. Based on this assessment, the Company determined that it was more likely than not that the fair value of the Chubbies reporting unit exceeded its respective carrying value as of March 31, 2025.

2024 Impairment Testing

In the third quarter of 2024, the Company observed the following indicators of impairment for the Company’s goodwill, indicating the fair value of one or more of our reporting units more likely than not did not exceed their carrying values:

•A sustained decline in the share price of the Company’s Class A common stock as of September 30, 2024; and

•Underperformance of the IcyBreeze reporting unit for the third quarter and year to date period ended September 30, 2024;

As a result of these impairment indicators, the Company determined it appropriate to perform an interim quantitative goodwill impairment test for all of its reporting units as of September 30, 2024. Through the quantitative goodwill impairment test performed as of September 30, 2024, the Company determined that the carrying amounts of the IcyBreeze and Solo Stove reporting units exceeded their respective fair values and goodwill impairment charges of $19.9 million and $25.0 million, respectively, were recognized. The Chubbies reporting unit was determined to have a fair value exceeding its book value by more than 5%.

NOTE 9 – Other Non-Current Assets

Other non-current assets consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Capitalized software(1)	9,335		5,388
Unamortized debt issuance costs - Revolving credit facilities(2)	5,786		—
Other	1,182		2,756
Other non-current assets	$	16,303	$	8,144

(1) The capitalized software line item increased, as a result of ongoing capitalization related to the Company’s enterprise resource planning (“ERP”) platform and web platform development for the Solo Stove segment.

(2) See Note 11, Debt, Net for details on the debt issuance costs related to the 2025 Revolving Credit Facility.

NOTE 10 – Accrued Expenses and Other Current Liabilities

Significant accrued expenses and other current liabilities were as follows (in thousands):


	September 30, 2025		December 31, 2024
Leases(1)	$	7,237	$	9,370
Inventory(2)	6,684		14,812
Income taxes	3,027		56

Payroll	1,928		1,834
Allowance for sales rebates	1,909		3,434
Allowance for sales returns	1,502		4,264
Non-income taxes	1,471		3,602


Warranty	1,078		844






Other	2,167		3,445
Accrued expenses and other current liabilities	$	27,003	$	41,661

(1) The leases line item decreased by $2.1 million, primarily as a result of the termination of the leases for three distribution centers, as discussed in Note 2, Restructuring, Contract Termination and Impairment Charges, in 2025.

(2) The inventory line item decreased by $8.1 million, primarily as a result of timing and invoices received subsequent to December 31, 2024.

NOTE 11 – Debt, Net

Debt, net consisted of the following (in thousands):


	Weighted-Average Interest Rate at September 30, 2025		September 30, 2025		December 31, 2024
Term loans	8.38	%	$	245,938	$	74,375
Revolving credit facilities	5.95	%	—		69,000
Unamortized debt issuance costs - Term loans			(11,972)		(1,315)
Long-term debt, net			233,966		142,060
Plus: current portion of long-term debt			1,200		8,625

Total debt, net of debt issuance costs			235,166		150,685

Revolving Credit Facility and Term Loan

On May 12, 2021, the Company entered into a credit agreement with a bank (the “2021 Revolving Credit Facility”). On June 2, 2021, September 1, 2021 and May 22, 2023, the Company entered into amendments to the 2021 Revolving Credit Facility, which resulted in an increase in the maximum amount available under the 2021 Revolving Credit Facility to $350 million. The 2021 Revolving Credit Facility was scheduled to mature on May 12, 2026 and had a variable interest rate equal to either the base rate (as defined in the Credit Agreement) or SOFR plus an applicable margin. Interest was due, at a minimum, on a quarterly basis, with principal in respect of the 2021 Revolving Credit Facility, not due until maturity.

The amendment on September 1, 2021 included a provision for the Company to borrow up to $100 million under a term loan (the “2021 Term Loan”), which was in addition to the available capacity on the 2021 Revolving Credit Facility. The 2021 Term Loan was scheduled to mature on May 12, 2026 and had a variable interest rate equal to either the base rate (as defined in the credit agreement) or SOFR plus an applicable margin. Principal payments were due quarterly beginning on December 31, 2021.

During the six months ended June 30, 2025, the Company borrowed an aggregate amount of $277.3 million under the 2021 Revolving Credit Facility, all of which was refinanced with the other outstanding debt obligations in connection with the 2025 Refinancing Amendment.

On June 13, 2025, the Company entered into the 2025 Refinancing Amendment, which provided for (i) refinancing term loans, including the 2021 Term Loan, with an aggregate principal amount of $240 million (“2025 Term Loan”) and (ii) a revolving credit facility with an initial committed amount of $90 million (“2025 Revolving Credit Facility”). The 2025 Revolving Credit Facility includes (i) a sub-limit of $10 million for swing line loans and (ii) a separate sub-limit of $20 million for the issuance of letters of credit.

In connection with the entry into the 2025 Refinancing Amendment, the Company paid down (i) $136.5 million of loans under the 2021 Revolving Credit Facility, and (ii) $32.5 million of the 2021 Term Loan outstanding as of June 13, 2025. Prior to the 2025 Refinancing Amendment, a payment of $0.5 million was made on the 2021 Term Loan for the six months ended June 30, 2025.

Pursuant to the 2025 Refinancing Amendment, the maturity date of the 2025 Revolving Credit Facility and 2025 Term Loan is June 30, 2028. The Company is 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 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%.

Each of the 2025 Revolving Credit Facility and 2025 Term Loan bear interest at (depending on the Company’s election from time to time) either an adjusted term rate defined in the agreement based on SOFR or the base rate defined in the credit agreement, each plus an applicable margin and (ii) the 2025 Term Loan will 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 agreement, each plus an applicable margin. The interest is payable in kind (“PIK”), 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 the Company’s election, after which time, it is only payable in cash. PIK capitalized for the three and nine months ended September 30, 2025 was $6.0 million and $7.1 million, respectively. The unfunded portion of the commitments under the 2025 Revolving Credit Facility will accrue an annual commitment fee of 0.50%. The interest rate as of September 30, 2025 on the 2025 Term Loan was 9.8%, which is approximately 200 basis points higher than the rate that would be applicable to the 2025 Revolving Credit Facility in the event there were an outstanding balance.

As a result of the 2025 Refinancing Agreement, the outstanding borrowings with maturities in excess of twelve months from September 30, 2025 on the 2025 Term Loan and 2025 Revolving Credit Facility were reclassified to non-current liabilities from current liabilities.

Subsequent to June 13, 2025 through September 30, 2025, the Company borrowed an aggregate of $19.8 million, with repayments of $19.8 million under the 2025 Revolving Credit Facility. As of September 30, 2025, availability for future draws on the 2025 Revolving Credit Facility based on the borrowing base as of such date was $60.6 million, net of $3.7 million of letters of credit issued and outstanding. Availability under the 2021 Revolving Credit Facility as of December 31, 2024 was $279.6 million, net of $1.4 million of letters of credit issued and outstanding.

In conjunction with the 2025 Refinancing Amendment, the Company incurred $23.8 million of third-party expenses, primarily related to (i) strategic consulting firms, as discussed in Note 2, Restructuring, Contract Termination and Impairment Charges, and (ii) lender fees, of which $4.4 million attributable to the 2025 Revolving Credit Facility was recognized within other non-operating, net. The Company capitalized $6.4 million related to borrowings under the 2025 Revolving Credit Facility, which were recorded to other non-current assets on the consolidated balance sheets and will be amortized on a straight-line basis through the maturity date. The remaining $13.0 million, including $12.1 million of debt issuance costs attributable to the 2025 Term Loan and $0.9 million of previously unamortized issuance costs, were recorded to long-term debt, net on the consolidated balance sheets. Additionally, in connection with the 2025 Refinancing Amendment, the Company issued 121,998 shares of Class A common stock to a certain lender in lieu of a cash consent fee. The fair value of the Class A common stock was approximately $0.8 million as of the refinancing date and was included in total debt issuance costs recorded to long-term debt, net on the consolidated balance sheets.

Long-term debt, net approximates fair value based on the variable nature of interest at market rates using Level 2 inputs within the fair value hierarchy, as defined in Note 2, Significant Accounting Policies, in the 2024 Form 10-K. See Note 15, Fair Value Measurements of this Quarterly Report for the period ended September 30, 2025 for more information regarding the fair value considerations for long-term debt, net.

Interest expense was $7.6 million and $20.7 million, net of interest income, for the three and nine months ended September 30, 2025, respectively, and $3.7 million and $10.4 million for the corresponding periods in 2024, respectively.

The Company was in compliance with all covenants under the Amended Credit Agreement as of September 30, 2025.

As of September 30, 2025, the future maturities of principal amounts of our total debt obligations, excluding finance lease obligations, through maturity and in total, consists of the following:


Years Ending December 31,	Amount
2025 (remaining three months)	—
2026	1,800
2027	7,800
2028	237,538

Total	$	247,138

NOTE 12 – Other Non-Current Liabilities

Significant other non-current liabilities were as follows (in thousands):


	September 30, 2025		December 31, 2024
Contingent consideration(1)	$	—	$	7,232

Long-term non-income taxes	1,210		1,130

Finance lease liability	—		694

Other non-current liabilities	$	1,210	$	9,056

(1) Contingent consideration declined, due to alleviation through disposition of the TerraFlame manufacturing operations, as discussed in Note 15, Fair Value Measurements and Note 17, Variable Interest Entities.

NOTE 13 – Equity-Based Compensation

The Company recognized equity-based compensation expense of $0.9 million for both the three and nine months ended September 30, 2025, with the first quarter of 2025 resulting in a net benefit due to forfeitures related to the departure of the former CEO and other key members of management at that time, and expense of $1.9 million and $4.7 million for the corresponding periods in 2024, respectively. Our stock options have contractual terms of four years to ten years and become exercisable over a three-year period. Expense related to stock options is recognized on a straight-line basis over the vesting period. Expense related to restricted stock units ("RSUs") issued to eligible employees under the Solo Brands, Inc. 2021 Incentive Award Plan (the “Incentive Award Plan”) is recognized over the vesting period, generally between two years and three years, with awards prior to 2024 having a four-year vesting period. Expense related to RSUs granted to non-employee directors under the Incentive Award Plan is recognized on a straight-line basis over the vesting period, with newly appointed non-employee directors grants and grants to continuing non-employee directors vesting over a one-year period. Expense related to performance stock units (“PSUs”) is recognized on a straight-line basis from their award date to the end of the performance period, generally two years. Expense related to special performance stock units (“SPSUs”) is recognized on a straight-line basis from their award date to the end of the requisite service period of three years. Expense related to the Executive Performance Stock Units (“EPSUs”) is recognized over the derived service period.

The following table summarizes equity-based compensation awards granted and forfeited during the nine months ended September 30, 2025:


(in thousands)	Number of Shares Granted	Number of Shares Forfeited
RSUs	92	(17)
EPSUs	—	(37)
SPSUs	—	(10)

NOTE 14 – Income Taxes

Provision for Income Taxes

The Company is subject to U.S. federal, state, and local income taxes on the Company's allocable share of taxable income of Solo Stove Holdings, LLC (“Holdings”). The subsidiaries of Holdings are also subject to income taxes in the foreign jurisdictions in which they operate. 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 generally not subject to U.S. federal and certain state and local income taxes. Instead, taxable income or loss is allocated to its members 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. Furthermore, we are subject to income taxes for our Chubbies, Oru Mexico and Solo Stove foreign operations.

Our forecasted annual effective tax rate (“AETR”), as calculated for our tax filing jurisdictions generating earnings, was 23.8% as of September 30, 2025. The effective income tax rate was 2.3% and (7.0)% for the three and nine months ended September 30, 2025, compared to 5.8% and 5.7% for the corresponding periods in 2024. The decrease for the three months and nine months ended September 30, 2025 were primarily driven by a decrease in the valuation allowances recorded on the Solo Brands, Inc. deferred tax assets in the current year period when compared to the same

period in the prior year. Our effective income tax rate for the nine months ended September 30, 2025 is negative due to earnings generated on the Chubbies, Oru Mexico and Solo Stove foreign operations.

Income tax expense for the three and nine months ended September 30, 2025 was $(0.6) million and $4.1 million, compared to $6.9 million and $7.4 million of income tax benefit in the corresponding period in 2024. Income taxes represent federal, state, and local income taxes as calculated by our AETR of Chubbies' federal and state tax expense and Oru Mexico and Solo Stove’s foreign tax expense.

The weighted-average ownership interest in Holdings was 66.9% and 63.8% as of September 30, 2025 and 2024, respectively.

Deferred Tax Assets and Liabilities

As of September 30, 2025, the total deferred tax liability related to the basis difference in the Company's investment in Holdings was nominal, after consideration of the valuation allowance. The total net basis difference currently recorded would reverse upon the eventual sale of its interest in Holdings as a capital loss.

During the nine months ended September 30, 2025, the Company did not recognize any deferred tax assets related to additional tax basis increases generated from expected future payments under the Tax Receivable Agreement, as defined in Note 16 - Income Taxes, to the audited consolidated financial statements included in our 2024 Form 10-K.

The Company evaluates the realizability of its deferred tax assets on a quarterly basis and establishes valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of September 30, 2025, the Company concluded, based on the weight of all available positive and negative evidence, that not all of the Solo Brands, Inc. deferred tax assets are more likely than not to be realized. During the year ended December 31, 2024, the Company evaluated and concluded that there was significant negative evidence related to the realizability of Oru's deferred tax assets, resulting in the Company recording a full valuation allowance against the deferred tax assets of Oru. As of September 30, 2025, there has been no change in the valuation allowance assessment related to Oru’s deferred tax assets, with a full valuation allowance remaining in place.

Tax Legislation

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. The Company will continue to evaluate the future impact of these tax law changes on its financial statements; however, the Company believes that due to its sustained losses it will not realize a material benefit from these changes.

NOTE 15 – 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, in the 2024 Form 10-K.

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


			Fair Value Measurements
December 31, 2024	Total Fair Value		Level 1		Level 2		Level 3
Financial liabilities:

Contingent Consideration	$	7,232	$	—	$	—	$	7,232

There were no transfers of financial assets and liabilities measured at fair value between the valuation hierarchy Levels 1, 2 and 3 for the nine months ended September 30, 2025 and year ended December 31, 2024.

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 17, Variable Interest Entities, the Company remeasured the contingent consideration immediately preceding the disposition. As the contingent consideration was fully relieved as of June 30, 2025, no expense was recognized for the three months ended September 30, 2025 with a gain of $0.8 million being recognized for the nine months ended September 30, 2025. For the same periods in 2024, losses of $0.2 million and $1.7 million, respectively, were recognized as a result of the remeasurement of the fair value of the contingent consideration and were recorded to selling, general and 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 and notes receivable, net and notes 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 and are classified as Level 1 measurement in the fair value hierarchy.

With the 2025 Refinancing Amendment, as discussed in Note 11, 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.

NOTE 16 – Net Income (Loss) Per Share

Basic net income (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Solo Brands, Inc. by the weighted average number of shares of Class A common stock outstanding during the period. Diluted net income (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Solo Brands, Inc. by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. The weighted average number of shares has been retrospectively adjusted as a result of the 1-for-40 reverse stock split effected in the third quarter of 2025. See Note 1, Significant Accounting Policies for additional information.

The following table sets forth the calculation of the basic and diluted net income (loss) per share for the Company’s Class A common stock (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income (loss)	$	(22,926)	$	(111,453)	$	(62,270)	$	(121,974)
Less: Net income (loss) attributable to non-controlling interests	(7,900)		(41,589)		(21,584)		(45,597)
Net income (loss) attributable to Solo Brands, Inc.	$	(15,026)	$	(69,864)	$	(40,686)	$	(76,377)







Weighted average shares of Class A common stock outstanding - basic and diluted	1,629		1,464		1,530		1,458



Net income (loss) per share of Class A common stock outstanding - basic and diluted	$	(9.22)	$	(47.72)	$	(26.59)	$	(52.38)

NOTE 17 - Variable Interest Entities

Consolidated Variable Interest Entities (“VIE”)

As of September 30, 2025 and December 31, 2024, we consolidated one entity that is a VIE, that relates to a manufacturing entity for Oru, for which we are the primary beneficiary. Through a management agreement governing the entity, we manage the entity and handle all day-to-day operating decisions. Accordingly, we have the decision-making power over the activities that most significantly impact the economic performance of our VIE and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, manufacturing schedules, production processes, units of production and types of products. The Company is contractually obligated to provide financial support to the VIE.

Total assets of the VIE included on the consolidated balance sheet as of September 30, 2025 and December 31, 2024 were $2.6 million and $2.2 million, respectively. Total liabilities of the VIE included on the consolidated balance sheets as of September 30, 2025 and December 31, 2024 were $3.1 million and $2.8 million, respectively.

The VIE’s assets may only be used to settle the VIE’s obligations and may not be used for other consolidated entities. The VIE’s liabilities are non-recourse to the general credit of the Company’s other consolidated entities.

Unconsolidated VIE

In June 2025, the Company disposed of 100% of the equity interests of the subsidiaries operating the TerraFlame business, which included disposition of the TerraFlame fixed assets (collectively, the “TerraFlame manufacturing operations”) to the individuals who originally sold to the Company the equity interests in those subsidiaries in 2023 (“Former Sellers”). Further, in connection with the disposition, the Company made a $2.5 million cash payment to the Former Sellers, in consideration for the termination of the Equity Purchase Agreement executed in 2023 and satisfaction of the remaining contingent consideration, which had a fair value of $6.4 million as of the date of the transaction.

The purpose of the transaction was for the Company to maintain exclusive rights to TerraFlame intellectual property and the right to distribute TerraFlame products, while reducing costs to operate the business, and to allow the Former Sellers the opportunity to use the fixed assets of the TerraFlame business, which primarily consist of a manufacturing facility, the related equipment to produce TerraFlame and other concrete based products and the TerraFlame assembled workforce in Mexico, to pursue other business opportunities. Thus, the Company retained the intellectual property and all finished goods of TerraFlame, as it will continue to be the exclusive distributor of TerraFlame products. In line with the transaction, the Company and the Former Sellers executed a supply agreement in which the Former Sellers have agreed to continue to manufacture TerraFlame products and sell these products to the Company at cost plus a specified margin, as well as a required annual minimum purchase commitment of $0.8 million.

In addition to the gain of $0.7 million recognized on remeasurement of the contingent consideration as of June 12, 2025, as discussed in Note 15, Fair Value Measurements, the Company recognized a loss of $1.4 million upon deconsolidation as of June 30, 2025, which was recorded to other operating expenses on the consolidated statements of operations and comprehensive income (loss). The assets transferred to the Former Sellers, which had a net book value of $5.5 million, were deconsolidated from the consolidated balance sheets as of June 30, 2025 and the remaining contingent consideration, which had a fair value of $6.4 million as of the transaction date, was relieved.

The Company performed a VIE analysis and determined that TerraFlame was a VIE, but that the Company is not its primary beneficiary. The Former Sellers have the power due to their (i) 100% equity ownership of the VIE, (ii) ability to direct the VIE and (iii) make all significant decisions that impact the economic performance of the VIE. The Company’s maximum exposure to loss to the unconsolidated VIE is limited to the annual minimum purchase commitment of $0.8 million.

NOTE 18 - Segments

The Company conducts its worldwide operations through separate business segments, each of which represents major product lines. Operations are conducted in the U.S. and various foreign countries, primarily in Europe, Canada and Australia. Segment reporting is based upon the “management approach,” i.e., how we organize operating segments for which separate financial information is (1) available and (2) evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer.

The Company’s two reportable segments are as follows:

Segment

Key Brands

Description of Primary Products

Solo Stove

Solo Stove and TerraFlame(1)

Indoor and outdoor firepits, stoves, and accessories

Chubbies

Premium casual apparel and activewear

(1) While certain assets and manufacturing operations of the TerraFlame business were transferred to the Former Sellers during the second quarter of 2025, the Company will continue to be sole distributor of TerraFlame products and will recognize the resulting profit or loss from the Company’s distribution activities within the Solo Stove reporting units.

Remaining operating segments that did not meet the criteria necessary to be considered a reportable segment are aggregated into All Other.

Our CODM relies on internal management reporting that analyzes our segments’ EBITDA, which he utilizes to evaluate performance and allocate resources. As segment assets are not reported to or used by the CODM to measure business performance or allocate resources, total segment assets are not presented below.

The following table presents the percentage of net sales attributable to the Company’s two reportable segments:


	Percentage of Net Sales
	Solo Stove		Chubbies
Three Months Ended September 30, 2025	58.1	%	31.1	%
Three Months Ended September 30, 2024	63.1	%	20.8	%

Nine Months Ended September 30, 2025	42.8	%	46.6	%
Nine Months Ended September 30, 2024	58.4	%	28.5	%

A single customer contributed greater than 10% of consolidated net sales for the three months ended September 30, 2024, with net sales of $10.1 million, from which both the Solo Stove and Chubbies segments generated net sales activity. The three and nine months ended September 30, 2025 and the nine months ended September 30, 2024 did not have any customers who contributed 10% or greater to consolidated net sales for the respective period.

Our sales to foreign customers, mostly attributable to the Solo Stove segment, were $3.9 million and $16.2 million for the three and nine months ended September 30, 2025 and $7.6 million and $23.3 million for the three and nine months ended September 30, 2024, respectively. The following table presents the percentage of international net sales attributable to our two reportable segments:


	Percentage of International Net Sales
	Solo Stove		Chubbies
Three Months Ended September 30, 2025	79.1	%	—	%
Three Months Ended September 30, 2024	83.3	%	2.5	%

Nine Months Ended September 30, 2025	83.2	%	2.6	%
Nine Months Ended September 30, 2024	84.0	%	2.6	%

Net sales to no individual country outside the U.S. accounted for more than 10% of net sales for the three and nine months ended September 30, 2025 and 2024.


	Three Months Ended September 30, 2025
(in thousands)	Solo Stove		Chubbies		All Other(1)		Consolidated
Net sales	$	30,792	$	16,478	$	5,768	$	53,038
Cost of goods sold	11,958		6,592		2,642		21,192


Marketing expense	6,676		2,928		824		10,428
Employee related compensation	2,348		3,210		490		6,048
Other segment operating expenses(2)	8,447		4,979		1,331		14,757
Segment EBITDA	1,363		(1,231)		481		613
Corporate and other non-segment operating expenses(3)							9,026
Restructuring, contract termination and impairment charges							1,940
Depreciation and amortization expenses							5,824
Interest expense, net							7,556
Other non-operating (income) expense							(255)
Income (loss) before income taxes							$	(23,478)

Depreciation and amortization expenses	$	4,287	$	1,384	$	153	$	5,824


	Nine Months Ended September 30, 2025
(in thousands)	Solo Stove		Chubbies		All Other(1)		Consolidated
Net sales	$	95,218	$	103,622	$	23,707	$	222,547
Cost of goods sold	37,158		42,591		11,748		91,497


Marketing expense	21,476		10,453		2,799		34,728
Employee related compensation	8,471		10,054		2,102		20,627
Other segment operating expenses(2)	24,842		18,983		4,412		48,237
Segment EBITDA	3,271		21,541		2,646		27,458
Corporate and other non-segment operating expenses(3)							26,976
Restructuring, contract termination and impairment charges							18,030
Depreciation and amortization expenses							19,107
Interest expense, net							19,115
Other non-operating (income) expense							2,432
Income (loss) before income taxes							$	(58,202)

Depreciation and amortization expenses	$	14,095	$	4,170	$	842	$	19,107


	Three Months Ended September 30, 2024
(in thousands)	Solo Stove		Chubbies		All Other(1)		Consolidated
Net sales	$	59,377	$	19,605	$	15,157	$	94,139
Cost of goods sold	20,622		7,595		26,603		54,820


Marketing expense	11,506		3,138		4,769		19,413
Employee related compensation	3,007		3,693		1,013		7,713
Other segment operating expenses(2)	9,657		5,655		4,017		19,329
Segment EBITDA	14,585		(476)		(21,245)		(7,136)
Corporate and other non-segment operating expenses(3)							17,958
Restructuring, contract termination and impairment charges							83,618
Depreciation and amortization expenses							6,574
Interest expense, net							3,683
Other non-operating (income) expense							(619)
Income (loss) before income taxes							$	(118,350)

Depreciation and amortization expenses	$	4,679	$	1,316	$	579	$	6,574


	Nine Months Ended September 30, 2024
(in thousands)	Solo Stove		Chubbies		All Other(1)		Consolidated
Net sales	$	181,514	$	88,558	$	40,941	$	311,013
Cost of goods sold	66,756		34,797		36,960		138,513


Marketing expense	35,428		12,925		12,991		61,344
Employee related compensation	7,538		10,385		2,977		20,900
Other segment operating expenses(2)	34,785		18,254		10,018		63,057
Segment EBITDA	37,007		12,197		(22,005)		27,199
Corporate and other non-segment operating expenses(3)							43,724
Restructuring, contract termination and impairment charges							83,618
Depreciation and amortization expenses							19,255
Interest expense, net							10,352
Other non-operating (income) expense							(378)
Income (loss) before income taxes							$	(129,372)

Depreciation and amortization expenses	$	13,998	$	3,556	$	1,701	$	19,255

1 Includes net sales of our operating segments that did not meet the requirements to be considered a reportable segment, which includes net sales of Oru, ISLE and IcyBreeze (through date of wind-down), as well as the consolidating elimination entries that are not specific to our reportable segments.

2 Includes expenses for seller fees, shipping and fulfillment, along with certain fixed and other variable expenses incurred in the normal course of business.

3 Includes corporate general and administrative service expenses of $5.9 million and $18.6 million and $5.9 million and $23.1 million for the three and nine months ended September 30, 2025 and 2024, respectively, with the remaining non-segment operating expenses being primarily fixed costs.

Net sales exclude all intercompany sales between our reportable segments and All Other, as well as related profits, which were not material for the nine months ended September 30, 2025 and 2024.

NOTE 19 - Related Parties

The Company occasionally enters into transactions with related parties in the normal course of business. One related party, which is wholly owned by an employee of Solo Brands and this employee’s immediate family, purchases merchandise from Solo Brands to sell in a certain geographical market. There were no significant sales or expenses associated with related parties for the three and nine months ended September 30, 2025 or 2024.

Amounts receivable from this related party were nominal as of September 30, 2025 and $1.1 million as of December 31, 2024. The accounts receivable associated with this related party is included in accounts receivable, net on the consolidated balance sheets. There were no significant liabilities due to related parties as of September 30, 2025 and December 31, 2024.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In the following discussion, references to “we,” “us,” “our,” the “Company,” and similar references mean Solo Brands, Inc. and its consolidated subsidiaries, unless the context otherwise requires. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes to those statements included elsewhere in this Quarterly Report, as well as our audited consolidated financial statements included in our 2024 Form 10-K. Some of the numbers included herein have been rounded for the convenience of the presentation. In addition to historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Item I, Part 1A, “Risk Factors” of our 2024 Form 10-K and elsewhere in this Quarterly Report. See further our “Forward-Looking Statements” in this Quarterly Report.

Overview

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.

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.

Economic Factors Affecting our Performance

Tariffs

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.

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.

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.”

Tax Legislation

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.

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.

Discussion within the relevant comparative periods and sections have been included below.

Key Factors Affecting Our Financial Condition and Results of Operations

2025 Restructuring Activity

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.

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:

•retention payments for key personnel to support the sustainment of operations and focus on cost saving and operational improvements;

•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;

•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;

•termination of an underperforming licensing agreement in an effort to redeploy the allocated funds for operational purposes;

•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;

•revision of pricing structure throughout our brands in order to mitigate, in part, the expected impacts of tariffs in subsequent periods; and

•reduction in marketing spend and promotional activity within the Solo Stove segment to better align product pricing with our retail partners.

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.


Activity	Cash Outlay (dollars in thousands)		Period
Reduction in force	$	914	Fiscal year 2025
Closure of distribution centers	976		Q1 & Q3 2025
Engagement of strategic consulting firms	7,187		Fiscal year 2025
Retention payments to key personnel	5,655		Q2 2025

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.

2024 Restructuring Activity

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:

•terminated underperforming marketing agreements with marketing barter partners that no longer aligned with the Company’s current marketing strategy;

•charges related to the IcyBreeze reporting unit stemming from underperformance and management’s determination to revise product designs under the Solo Stove segment; and

•reorganized the Oru and ISLE reporting units to eliminate costs and capitalize on potential synergies, through restructuring under a revised management structure.

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.


Activity	Cash Outlay (dollars in thousands)		Period
Termination of marketing agreements	$	9,000	Q4 2024
Reorganization of the Oru and ISLE Reporting Units	349		Q4 2024
Wind-down of the Operations of the IcyBreeze Reporting Unit	205		Q3 - Q4 2024

Discussion within the relevant comparative periods and sections have been included below.

Consolidated Results for the Three and Nine Months Ended September 30, 2025 Compared to the Three and Nine Months Ended September 30, 2024

Consolidated Net Sales

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.

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.


	Three Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Net sales	$	53,038	$	94,139	$	(41,101)	(43.7)	%
Direct-to-consumer net sales	42,027		64,480		(22,453)		(34.8)	%
Retail net sales	11,011		29,659		(18,648)		(62.9)	%


	Nine Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Net sales	$	222,547	$	311,013	$	(88,466)	(28.4)	%
Direct-to-consumer net sales	135,493		214,293		(78,800)		(36.8)	%
Retail net sales	87,054		96,720		(9,666)		(10.0)	%

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.

Consolidated Gross Profit and Gross Margin

Gross profit reflects net sales less cost of goods sold, which primarily includes the purchase cost of our products from our third-party manufacturers, inbound freight and duties, costs related to manufacturing of certain of our products, product quality testing and inspection costs and depreciation on molds and equipment that we own.


	Three Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$	%
Gross profit	31,846		39,319		(7,473)	(19.0)	%
Gross margin (Gross profit as a % of net sales)(1)	60.0	%	41.8	%		1,820


	Nine Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$	%
Gross profit	131,050		172,500		(41,450)	(24.0)	%
Gross margin (Gross profit as a % of net sales)(1)	58.9	%	55.5	%		340

(1) Change in gross margin period over period in basis points

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.

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.

Consolidated Operating Expenses

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.

•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.

•Depreciation and Amortization Expenses - Depreciation and amortization expenses consist of depreciation of property and equipment and amortization of definite-lived intangible assets.

•Restructuring, Contract Termination and Impairment Charges - Restructuring, contract termination and impairment charges consist of severance and employee-related benefits, contract termination fees and asset impairment charges.

•Other Operating Expenses - Other operating expenses include certain costs incurred as a result of being a public company, acquisition-related expenses, business optimization and expansion expenses and management transition costs, including severance.


	Three Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Operating expenses	$	48,023	$	154,605	$	(106,582)	(68.9)	%
Selling, general and administrative expenses	39,495		61,119		(21,624)		(35.4)	%
Depreciation and amortization expenses	5,824		6,574		(750)		(11.4)	%
Restructuring, Contract Termination and Impairment Charges	1,940		83,618		(81,678)		(97.7)	%
Other operating expenses	764		3,294		(2,530)		(76.8)	%


	Nine Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Operating expenses	$	167,705	$	291,898	$	(124,193)	(42.5)	%
Selling, general and administrative expenses	126,171		180,337		(54,166)		(30.0)	%
Depreciation and amortization expenses	19,107		19,255		(148)		(0.8)	%
Restructuring, Contract Termination and Impairment Charges	18,030		83,618		(65,588)		(78.4)	%
Other operating expenses	4,397		8,688		(4,291)		(49.4)	%

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.

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.

Consolidated Interest Expense

Interest expense, net consists primarily of interest on our revolving credit facilities and term loans.


	Three Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Interest expense, net	$	7,556	$	3,683	$	3,873	105.2	%


	Nine Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Interest expense, net	$	19,115	$	10,352	$	8,763	84.7	%

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.

Consolidated Income Taxes

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.


	Three Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Income tax expense (benefit)	$	(552)	$	(6,897)	$	6,345	(92.0)	%


	Nine Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Income tax expense (benefit)	$	4,068	$	(7,398)	$	11,466	(155.0)	%

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.

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

Solo Stove Net Sales


	Three Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Net sales	$	30,792	$	59,377	$	(28,585)	(48.1)	%
Direct-to-consumer net sales	23,787		36,991		(13,204)		(35.7)	%
Retail net sales	7,005		22,386		(15,381)		(68.7)	%


	Nine Months Ended September 30,				Change
(dollars in thousands)	2025		2024		$		%
Net sales	$	95,218	$	181,514	$	(86,296)	(47.5)	%
Direct-to-consumer net sales	70,940		130,541		(59,601)		(45.7)	%
Retail net sales	24,278		50,973		(26,695)		(52.4)	%

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.

Solo Stove Cost of Goods Sold


	Three Months Ended September 30,		Change
(dollars in thousands)	2025	2024	$

Solo Brands, Inc. 10-Q