The following discussion and analysis of the financial condition and results of operations of Grove Collaborative Holdings, Inc. (“Grove,” “we,” “us,” and “our”) should be read with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements based upon current expectations that involve risks and uncertainties as described in the Cautionary Note Regarding Forward-Looking Statements above. Grove’s actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors, including those set forth under the section entitled “Risk Factors” herein or in our Annual Report on Form 10-K for the year ended December 31, 2025 or in other parts of this Quarterly Report on Form 10-Q. Grove’s historical results are not necessarily indicative of the results that may be expected for any period in the future. Except as otherwise noted, all references to 2025 refer to the year ended December 31, 2025. Overview On June 16, 2022 (the “Closing Date”), we became a publicly traded company as a result of the consummation of Grove Collaborative, Inc.’s (“Legacy Grove”) merger with Virgin Group Acquisition Corp. II, a Cayman-domiciled blank check company (“VGAC II”), which we refer to herein as the “Business Combination”. Grove is a sustainability-oriented consumer products company. We use our connection with consumers to create and curate authentic, disruptive brands and products. We build natural products that perform as well as or better than many leading consumer packaged goods (“CPG”) brands (both conventional and natural), while being healthier for consumers and the planet. We primarily operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our Grove-owned brands (“Grove Brands”) and other leading natural and mission-based CPG brands, providing consumers with a selection of curated products across many categories and brands. We refer to this part of our business as “DTC.” In the fourth quarter of 2024, we made the decision to exit the business of selling Grove Co. products in brick and mortar retail channels and completed this exit in 2025. Grove is a public benefit corporation and a Certified B Corporation, meaning we adhere to third party standards for prioritizing social, environmental, and community well-being. We believe that improved innovation grows both revenue and, over the long term, can expand margins as our innovation has historically tended to be both market expanding and margin accretive. Since inception, we have invested heavily in building out both our ecommerce platform and Grove Brands, and over this period we have operated at a loss. We have an accumulated deficit of $662.2 million as of June 30, 2026. Key Factors Affecting Our Operating Performance We believe that our future business is dependent on many factors. While each of these factors presents significant opportunities for us, they also pose important challenges that we must successfully address to enable us to grow our business and improve our operations while staying true to our mission, including those discussed below and in the section entitled “Risk Factors”. Ability To Grow our Brand Awareness Our brand is integral to the growth of our business and is essential to our ability to engage with our community. Our performance will depend on our ability to profitably attract new customers and encourage consumer spending across our product portfolio. We believe the core elements of continuing to grow our brand awareness in a manner that increases our market penetration are highlighting our products’ qualities of being natural, healthy, sustainable and effective and the effectiveness of our marketing efforts. 27 Table of Contents Cost-Efficient Acquisition of New Customers and Retention of Existing Customers on our DTC Platform Our ability to attract new customers is a key factor for our future growth. In recent years, changes in the algorithms used for targeting and purchasing online advertising, changes to privacy and online tracking, changes to our purchase flow and subscription processes, supply and demand dynamics in the market, and other factors have caused the cost of marketing on these channels to increase consistently. Failure to effectively adapt to changes in online marketing dynamics or changes to our internet platform, or to otherwise attract customers on a cost-efficient basis would adversely impact our path to revenue growth, our profitability and our operating results. Our ability to balance cost-efficient customer acquisitions while driving consumer awareness may impact the cost of our acquiring new customers, our profitability and our operating results. The future activity level and profitability of our DTC customer base will depend on our ability to continue to offer a compelling value proposition to consumers including strong selection, pricing, and customer service, a smooth and compelling web and mobile application experience, a fast and reliable fulfillment, and curation within natural and sustainable products. Our success is also dependent on our ability to maintain relevance with our consumers on a regular basis through high performing products and a consumer-friendly refill and fulfillment process, and most importantly to provide consumers with products that consistently outperform their expectations. Our ability to execute on these key value-driving areas for consumers, and to remain competitive and compelling, are necessary for our future growth. A lack of success in these areas would materially impact our operating results and financial performance. Ability to Achieve Profitable Growth; Positive Cash Flow and Scale We believe we are in the early stages of realizing a substantial opportunity to transform the consumer products industry into a force for environmental and human good by creating and curating planet-first, high-performance brands and products. In recent years, we have substantially reduced our expense structure and operations in light of declining revenue, and as a result we have reduced our operating losses and cash consumption. To grow and achieve profitability over the longer term, we will need to re-invest to expand our DTC business and achieve a scale that will allow us to drive efficiencies in generating brand awareness, acquiring and retaining customers, creating operating leverage over headcount and other overhead, and fulfilling orders. Our recent gains in approaching profitability may not be sustainable in the near term due to the effects of steps we may take to drive growth or other factors. If we are unable to achieve profitable growth, our prospects may be materially and adversely affected. Ability to Successfully Transition our ecommerce platform In March 2025, we began migrating our ecommerce platform from our legacy internally-developed solution to third party service providers that offer ecommerce solutions. We have completed the migration and have resolved a majority of the issues identified after the migration while simultaneously working towards optimizing the customer experience. This transition away from our legacy platform exposes us to vendor-specific risks, such as service disruptions, changes in pricing and inventory management, potential reduced flexibility in our ecommerce experience or alterations in the platform’s features and execution and fulfillment risks as we migrate our customer experience to the new platform. Our ability to realize the expected benefits of this transition is substantially dependent upon our ability to address these issues. Key Operating and Financial Metrics In addition to our condensed consolidated financial statements, included elsewhere in this Form 10-Q, we assess the performance of our overall business using the following metrics and measures, among others. We use the metrics to aid us in identifying trends, formulating financial projections, making strategic decisions, assessing operational efficiencies and monitoring our business. 28 Table of Contents The following table presents our key operating metrics for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except DTC Net Revenue Per Order) 2026 2025 2026 2025 Financial and Operating Data DTC Total Orders 489 640 991 1,262 DTC Active Customers 509 664 509 664 DTC Net Revenue Per Order $ 69.19 $ 65.23 $ 68.48 $ 65.84 DTC Total Orders We determine our number of DTC Total Orders by counting the number of customer orders submitted through our website and mobile application that have been shipped within the period. The metric includes orders that have been refunded and excludes reshipments of customer orders for any reason including damaged and missing products. Refunded orders are included in DTC Total Orders as we believe this provides more meaningful order management performance metrics, including fulfillment cost efficacy and refund rates. Changes in DTC Total Orders in a reporting period capture both the inflow of new customers, changes in order frequency of existing customers and customer attrition. We view the number of Total DTC Orders as a key indicator of trends in our DTC platform, and our future success in this channel will depend in part on our ability to drive growth through new customer acquisition and by increasing existing customer engagement. In the three and six months ended June 30, 2026, DTC Total Orders declined primarily due to our lower advertising spend, resulting in fewer new customers and therefore fewer overall orders. Additionally, DTC Total Orders was negatively impacted by technology disruptions to our DTC platform throughout 2025. DTC Active Customers As of the last day of each reporting period, we determine our number of DTC Active Customers by counting the number of individual customers who submitted orders through our DTC platform, and for whom an order has shipped, at least once during the preceding 364-day period. The change in active customers in a reporting period captures both the inflow of new customers as well as the outflow of customers who have not made a purchase in the last 364 days. We view the number of active customers as one of the key indicators of growth in our DTC channel. In the three and six months ended June 30, 2026, DTC Active Customers declined primarily due to our lower advertising spend, resulting in fewer new customers and therefore fewer overall orders, and negative impacts from technology disruptions to our DTC platform throughout 2025. DTC Net Revenue Per Order We define DTC Net Revenue Per Order as our DTC Total Net Revenue in a given reporting period, divided by the DTC Total Orders in that period. We view DTC Net Revenue per Order as a key indicator of the performance of our DTC business. For the three and six months ended June 30, 2026, DTC Net Revenue Per Order increased due to a more favorable product mix, more efficient promotional efforts following the introduction of our Green Rewards Loyalty Program, and a temporary increase in lower value orders in the prior period that did not reoccur in the current period. Non-GAAP Financial Measures: Adjusted EBITDA and Adjusted EBITDA Margin We prepare and present our financial statements in accordance with U.S. GAAP (“GAAP”). In addition, we believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. For these reasons, management uses Adjusted EBITDA in evaluating our operating performance and resource allocation and forecasting. As such, we believe Adjusted EBITDA provides investors with additional useful information in evaluating our performance. We calculate Adjusted EBITDA as net loss, adjusted to exclude: stock-based compensation expense; depreciation and amortization; changes in fair values of derivative liabilities; interest income; interest expense; restructuring costs; transaction related costs related to certain strategic merger & acquisition projects; provision for income taxes and certain litigation and legal settlement expenses that we do not consider representative of our underlying operations. We define 29 Table of Contents Adjusted EBITDA Margin as Adjusted EBITDA divided by net revenue. Because Adjusted EBITDA excludes these elements that are otherwise included in our GAAP financial results, this measure has limitations when compared to net loss determined in accordance with GAAP. Further, Adjusted EBITDA is not necessarily comparable to similarly titled measures used by other companies. For these reasons, investors should not consider Adjusted EBITDA in isolation from, or as a substitute for, net loss determined in accordance with GAAP. The following table presents a reconciliation of net loss, the most directly comparable financial measure stated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Reconciliation of Net Loss to Adjusted EBITDA (in thousands, except percentages) Net loss $ (920) $ (3,626) $ (1,929) $ (7,173) Stock-based compensation 845 1,378 1,651 2,347 Depreciation and amortization 399 488 790 866 Changes in fair value of derivative liabilities (72) (70) (171) (214) Interest income (71) (109) (146) (281) Interest expense 272 305 546 651 Transaction related costs (1) — 712 — 1,275 Provision for income taxes 8 10 16 19 Total Adjusted EBITDA $ 461 $ (912) $ 757 $ (2,510) Net loss margin (2.5) % (8.2) % (2.6) % (8.2) % Adjusted EBITDA margin (loss) 1.3 % (2.1) % 1.0 % (2.9) % (1) Transaction related costs are costs and expenses primarily associated with the acquisition of Grab Green and the acquisition of 8Greens. These costs include costs of integrating the businesses and costs for third-party legal, accounting, consulting and other similar type professional services. These costs are considered incremental to our normal operating charges and were incurred solely as a result of the transactions. Components of Results of Operations Revenue, Net We generate revenue primarily from the sale of both third-party and our Grove Brands products through our DTC platform. Customers purchase products through the website or mobile application through a combination of directly selecting items from the catalog, items that are suggested by our recommendation engine, and featured products that appear in marketing on-site, in emails and on our mobile application. Most customers purchase a combination of products recommended by us based on previous purchases and new products discovered through marketing or catalog browsing. Customers can opt to subscribe and have orders auto-shipped to them on a specified date or shipped immediately through an option available on the website and mobile application. We recognize revenue from the sale of our products through our DTC platform net of discounts, sales tax, customer service credits and estimated refunds. Sales tax collected from customers is not considered revenue and is included in accrued liabilities until remitted to the taxing authorities. In December 2025, we introduced our Green Rewards customer loyalty program which enables our customers to earn rewards from purchases and other activities that these customers can apply to future purchases. We defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our Green Rewards customer loyalty program and Green Rewards VIP Membership. Cost of Goods Sold Cost of goods sold consists of the product costs of merchandise, inbound freight costs, vendor allowances, costs associated with inventory shrinkage and damages and inventory write-offs and related reserves. 30 Table of Contents Gross Profit and Gross Margin Gross profit represents revenue less the cost of goods sold. Gross margin is gross profit expressed as a percentage of revenue. To help motivate first-time customers to purchase on our DTC platform, we generally offer higher discounts, and as a result, our overall margins can be adversely affected in periods of rapid new customer acquisition. Our gross margin also fluctuates from period-to-period based on promotional activity, product and channel mix, the timing of promotions and launches, and inbound transportation rates, among other factors. Our gross profit and gross margin may not be comparable with that of other retailers because we include certain fulfillment related costs in selling, general, and administrative expenses while other retailers may include these expenses in cost of goods sold. Operating Expenses Our operating expenses consist of advertising, product development, and selling, general and administrative expenses. Advertising Advertising costs are expensed as incurred and consist primarily of our customer acquisition costs associated with online advertising, as well as advertising on television, direct mail campaigns and other media. Costs associated with the production of advertising are expensed when the first advertisement is shown. Product Development Product development expenses are related to the ongoing support and maintenance of our DTC platform, as well as amortization of capitalized, internally developed software and the product and packaging innovation in our Grove Brands products. Product development expenses consist primarily of personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expense. Product development costs also include allocated facilities, equipment, depreciation and overhead costs. Selling, General and Administrative Selling, general and administrative expenses consist primarily of compensation and benefit costs for personnel involved in general corporate functions, including stock-based compensation expense, and certain fulfillment costs, as further outlined below. Selling, general and administrative expenses also include the allocated facilities, equipment, depreciation and overhead costs, marketing costs, costs associated with our customer service operation, and costs of environmental offsets. Selling, general and administrative expenses have declined for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, as a result of decreases in fulfillment costs largely driven by lower sales, lower outbound shipping costs and other cost management initiatives. Fulfillment costs represent those costs incurred in operating and staffing our fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packing and preparing customer orders for shipment, shipping and handling expenses, packing materials costs and payment processing and related transaction costs. These costs are included within selling, general and administrative expenses in the statements of operations. Non-operating expenses, net Interest expense consists primarily of interest expense associated with our debt financing arrangement. To the extent there are changes in prevailing interest rates in future periods, we anticipate cash payments for interest and interest expense to fluctuate as interest rates change. Change in fair values of derivative liabilities consists primarily of changes in fair values of Earn-Out Shares, Public Warrants and Private Placement Warrant. Changes in the fair value of our derivative liabilities may fluctuate significantly in future periods primarily due to fluctuations in the fair value of our common stock. Other income, net consists primarily of interest income. Provision for Income Taxes We account for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statements and income tax bases of assets and liabilities using 31 Table of Contents enacted tax rates in effect for the year in which the differences are expected to reverse. We recognize the benefits of tax return positions in the financial statements when they are more likely than not to be sustained by the taxing authority, based on the technical merits at the reporting date. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes. We recognize interest and penalties related to unrecognized tax benefits, if any, as income tax expense. Results of Operations The following table sets forth our results of operations for each period presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue, net $ 36,569 $ 44,026 $ 72,793 $ 87,573 Cost of goods sold 16,984 19,631 33,353 40,114 Gross profit 19,585 24,395 39,440 47,459 Operating expenses: Advertising 1,235 2,722 2,397 5,529 Product development 1,513 2,207 2,948 3,986 Selling, general and administrative 17,620 22,956 35,779 44,942 Operating loss (783) (3,490) (1,684) (6,998) Non-operating expenses (income): Interest expense 272 305 546 651 Changes in fair value of derivative liabilities (72) (70) (171) (214) Other income, net (71) (109) (146) (281) Total non-operating expenses, net 129 126 229 156 Loss before provision for income taxes (912) (3,616) (1,913) (7,154) Provision for income taxes 8 10 16 19 Net loss $ (920) $ (3,626) $ (1,929) $ (7,173) 32 Table of Contents The following table sets forth our statements of operations data expressed as a percentage of revenue: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue, net 100 % 100 % 100 % 100 % Cost of goods sold 46 45 46 46 Gross profit 54 55 54 54 Operating expenses: Advertising 3 6 3 6 Product development 4 5 4 5 Selling, general and administrative 48 52 49 51 Operating loss (2) (8) (2) (8) Non-operating expenses (income): Interest expense 1 1 1 1 Changes in fair value of derivative liabilities — — — — Other income, net — — — — Total non-operating expenses, net — — — — Loss before provision for income taxes (2) (8) (3) (8) Net loss (3) % (8) % (3) % (8) % Comparisons of the Three and Six Months Ended June 30, 2026 and 2025 Revenue, Net Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 Amount % 2026 2025 Amount % (in thousands, except percentages) Revenue, net: Grove Brand $ 16,679 $ 17,825 $ (1,146) (6) % $ 33,179 $ 35,438 $ (2,259) (6) % Third-party product 19,890 26,201 (6,311) (24) 39,614 52,135 (12,521) (24) Total revenue, net $ 36,569 $ 44,026 $ (7,457) (17) % $ 72,793 $ 87,573 $ (14,780) (17) % Revenue decreased by $7.5 million, or 17%, and $14.8 million, or 17%, for the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025. This decline was primarily driven by a decrease in DTC Total Orders from lower advertising expenses and disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers throughout 2025, partially offset by an increase in DTC Net Revenue Per Order, driven by a more favorable product mix, improved promotional strategies resulting in reduced discounts offered to customers, and a temporary increase in lower value orders in the prior period that did not reoccur in the current period. 33 Table of Contents Cost of Goods Sold and Gross Profit Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 Amount % 2026 2025 Amount % (in thousands, except percentages) Cost of goods sold $ 16,984 $ 19,631 $ (2,647) (13)% $ 33,353 $ 40,114 $ (6,761) (17) % Gross profit 19,585 24,395 (4,810) (20)% 39,440 47,459 (8,019) (17) % Gross margin 54 % 55 % 54 % 54 % Cost of goods sold decreased by $2.6 million, or 13%, and $6.8 million, or 17%, for the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025, primarily due to a decrease in DTC Total Orders. Gross margin in the three months ended June 30, 2026 decreased by 190 basis points, compared to the three months ended June 30, 2025, one-time disposals in the quarter, as well as a sell-through of previously reserved inventory in the prior year that did not reoccur. These decreases were offset partially by more targeted promotional strategies, as a result of the launch of Green Rewards in the fourth quarter of 2025. Gross margin in the six months ended June 30, 2026 remained flat, compared to the six months ended June 30, 2025. Operating Expenses Advertising Expenses Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 Amount % 2026 2025 Amount % (in thousands, except percentages) Advertising $ 1,235 $ 2,722 $ (1,487) (55) % $ 2,397 $ 5,529 $ (3,132) (57) % Advertising expenses decreased by $1.5 million, or 55%, and $3.1 million, or 57% for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025 primarily driven by decreases in online advertising expenses. Product Development Expenses Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 Amount % 2026 2025 Amount % (in thousands, except percentages) Product development $ 1,513 $ 2,207 $ (694) (31) % $ 2,948 $ 3,986 $ (1,038) (26) % Product development expenses decreased by $0.7 million, or 31%, and $1.0 million, or 26%, for the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025, primarily due to reductions in headcount. 34 Table of Contents Selling, General and Administrative Expenses Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 Amount % 2026 2025 Amount % (in thousands, except percentages) Selling, general and administrative $ 17,620 $ 22,956 $ (5,336) (23) % $ 35,779 $ 44,942 $ (9,163) (20) % Selling, general and administrative expenses decreased by $5.3 million, or 23%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Fulfillment costs decreased by $2.4 million due to a lower volume of orders and lower outbound shipping costs. Corporate salaries and related benefits decreased by $1.5 million and stock-based compensation decreased by $0.5 million, both primarily driven by reductions in headcount. Additionally, insurance costs decreased by $0.4 million and rent expense decreased by $0.3 million due to subleasing one of our warehouses beginning in December 2025. Selling, general and administrative expenses decreased by $9.2 million, or 20%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. Fulfillment costs decreased by $3.7 million due to a lower volume of orders. Corporate salaries and related benefits decreased by $2.1 million and stock-based compensation decreased by $0.7 million, both primarily driven by reductions in headcount. Additionally, insurance costs decreased by $0.7 million, rent expense decreased by $0.7 million due to subleasing one of our warehouses beginning in December 2025, professional fees and software costs each decreased by $0.4 million. Interest expense Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 Amount % 2026 2025 Amount % (in thousands, except percentages) Interest expense $ 272 $ 305 $ (33) (11) % $ 546 $ 651 $ (105) (16) % Interest expense decreased by less than $0.1 million, or 11%, and $0.1 million, or 16%, for the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025, primarily due to lower interest rates on our outstanding debt. Non-operating expenses, net Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 Amount % 2026 2025 Amount % (in thousands, except percentages) Changes in fair value of derivative liabilities $ (72) $ (70) $ (2) ** $ (171) $ (214) $ 43 ** Other income, net (71) (109) 38 (35) % (146) (281) 135 (48) % **Change not meaningful The change in the fair value of derivative liabilities for the three and six months ended June 30, 2026, was not meaningful. The change in the fair value of derivative liabilities for the three and six months ended June 30, 2025, was driven by the changes in our stock price from December 31, 2024 through June 30, 2025. Other income decreased by less than $0.1 million, or 35%, and $0.1 million, or 48%, for the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025, related to interest income due to lower on-hand cash. 35 Table of Contents Liquidity, Capital Resources and Requirements As of June 30, 2026, we had $8.3 million in unrestricted cash and cash equivalents (which excludes restricted cash of $3.1 million). We generated positive cash flows from operating activities of $0.6 million for the six months ended June 30, 2026. We have incurred significant losses since inception and have an accumulated deficit of approximately $662.2 million. To date, we have funded our operations principally through redeemable convertible preferred stock and common stock financings, the incurrence of debt and the closing of the Business Combination. We have total outstanding indebtedness of $7.5 million as of June 30, 2026. On August 11, 2023 (the “Series A Preferred Stock Closing Date”), we entered into a subscription agreement with Volition Capital Fund IV, L.P. (“Volition”) and received gross proceeds of $10.0 million in exchange for 10,000 shares of our Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”), a warrant to purchase 1,579,778 shares of our Class A common stock at an exercise price of $6.33 (the “Volition Warrants”) and a warrant to purchase 20,905 shares of our Class A common stock at an exercise price of $0.01 per share (the “Volition Penny Warrants”). The Series A Preferred Stock was redeemable, at the option of the holder, for the original issuance price plus any declared but unpaid dividends following the seventh anniversary of the Series A Preferred Stock Closing Date (“Optional Redemption”). On September 20, 2024, (the “Series A' Preferred Stock Closing Date”), we entered into another subscription agreement with Volition where we received gross proceeds of $15.0 million in exchange for 15,000 shares of our Series A' Redeemable Convertible Preferred Stock (the “Series A' Preferred Stock” and together with the Series A Preferred Stock, the “Preferred Stock”). In connection with the issuance of the Series A' Preferred Stock, we agreed with Volition to cancel the Volition Warrants, cancel the Volition Penny Warrants and modify certain redemption terms of the Series A Preferred Stock already held by Volition, such that it is no longer subject to Optional Redemption. The holders of our outstanding Preferred Stock are entitled to receive cumulative dividends at the rate of 6% per annum of the original issuance price of each share. Such accruing dividends are payable only when, as and if declared by our Board of Directors. On March 10, 2023, we entered into the Siena Revolver (defined below) with Siena Lending Group, LLC (“Siena”) which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The total borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory, accounts receivable balances and certain qualifying cash balances held with third party processors and other limitations as specified in the agreement. The Siena Revolver matures on April 10, 2028. Additional borrowing capacity from the Siena Revolver was $0.4 million as of June 30, 2026. On July 18, 2022, we entered into the SEPA, whereby we had the right, but not the obligation, to sell to Yorkville up to $100.0 million of our shares of common stock at our request until July 18, 2025, subject to certain conditions. On July 8, 2025, we and Yorkville amended the SEPA (the “Amended SEPA”) to extend the term to August 1, 2027. The shares of our common stock that may be issued under the Amended SEPA may be sold by us to Yorkville at our discretion from time to time and sales of our common stock under the Amended SEPA will depend upon market conditions and other factors. Additionally, in no event may we sell more than 6,511,532 shares of our common stock to Yorkville under the Amended SEPA, which number of shares is equal to 19.99% of the shares of our common stock outstanding immediately prior to the execution of the SEPA (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the Amended SEPA. Unless our average stock price exceeds $15.33, we will be unable to sell the full $100.0 million commitment to Yorkville without seeking stockholder approval to issue additional shares in excess of the Exchange Cap. As of June 30, 2026, we have sold 147,965 shares under the SEPA and there were 6,363,567 shares available to be sold to Yorkville under the Exchange Cap. As of July 31, 2026, under the terms of the Amended SEPA we would be able to raise additional gross proceeds of approximately $6.8 million. Management believes that currently available resources will provide sufficient funds to enable us to meet our obligations for at least one year following the date these condensed consolidated financial statements are available to be issued. Cash from operations could be affected by our customers and other risks detailed in the section titled “Risk Factors.” In the event we raise additional capital to execute strategic initiatives and fund our operations, our ability to raise additional capital may be adversely impacted by the trading price of our common stock. We may seek access to additional funds by utilizing the SEPA. Additionally, we may seek additional funds through new public or private equity offerings or new debt financings, through partnering or other strategic arrangements, through the exercise of certain of our warrants, or a combination of the foregoing. There can be no assurance that any such new debt or new equity financing arrangements will be available on terms acceptable to us, or at all. 36 Table of Contents To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. Debt financing arrangements may require us to pledge certain assets or enter into covenants that could restrict our operations or our ability to pay dividends or other distributions on our common stock or incur further indebtedness. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. In addition, our Class A Common Stock trading price may not exceed the respective exercise prices of our Public Warrants, Private Placement Warrants and/or our other outstanding warrants before the respective warrants expire, and therefore we may not receive any proceeds from the exercise of warrants to fund our operations. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition could be materially and adversely affected. Contractual Obligations and Other Commitments Our most significant contractual obligations relate to our loan facility, purchase commitments on inventory and operating lease obligations on our fulfillment centers and corporate offices. As of June 30, 2026, we had $11.9 million of enforceable and legally binding inventory purchase commitments predominantly due within one year. For information on our contractual obligations for operating leases, see “Leases” in Note 7 of the Notes to our audited consolidated financial statements as of and for the years ended December 31, 2025 and December 31, 2024 included in Form 10-K filed with the SEC on March 5, 2026. Loan Facility On March 10, 2023, we entered into a Loan and Security Agreement (the “Siena Revolver”) with Siena Lending Group, LLC which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million. The borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory, accounts receivable balances and certain qualifying cash balances held with third party processors and other limitations as specified in the agreement. If at any time the amount of outstanding borrowings under the Siena Revolver exceeds the borrowing capacity, we are required to prepay borrowings sufficient to eliminate the excess. As of June 30, 2026, there was an outstanding principal amount of $7.5 million and additional borrowing capacity from the Siena Revolver was $0.4 million. The interest rates applicable to borrowings under the Siena Revolver are based on a fluctuating rate of interest measured by reference to either, at our option, (i) a Base Rate plus 3.25% or (ii) the term Secured Overnight Financing Rate (“Term SOFR”) then in effect plus 4.25%. The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) federal funds rate plus 0.50% and (3) 5.00% per annum. In accordance with the agreement, Siena has been provided with our periodic financial statements and updated projections to facilitate their ongoing assessment of us. The Siena Revolver matures on April 10, 2028. Cash Flows The following table summarizes our cash flows for the periods presented: Six Months Ended June 30, 2026 2025 Change (in thousands) Net cash provided by (used in) operating activities $ 592 $ (5,885) (110.1) % Net cash used in investing activities (451) (3,820) (88.2) % Net cash used in financing activities (521) (648) (19.6) % Net decrease in cash, cash equivalents and restricted cash $ (380) $ (10,353) Operating Activities Net cash provided by operating activities of $0.6 million for the six months ended June 30, 2026 was primarily attributable to our net loss of $1.9 million, non-cash adjustments of $2.4 million, and a net increase in our operating assets and liabilities of $0.1 million. Non-cash adjustments consisted of a $1.7 million stock-based compensation expense, $0.8 million in depreciation and amortization and $0.1 million in non-cash interest expense, offset by $0.2 million of change in fair value of derivative liabilities. The change in operating assets and liabilities resulted from a $2.2 million decrease in prepaid expenses and other assets related to the timing of collections on our accounts receivable and a $1.9 million increase 37 Table of Contents in deferred revenue, offset by a $2.4 million decrease in accrued expenses and accounts payable related to the timing of payments, a $1.0 million increase in inventory to support ongoing operations and a $0.5 million net increase in operating lease right-of-use assets and liabilities. Net cash used in operating activities of $5.9 million for the six months ended June 30, 2025 was primarily attributable to our net loss of $7.2 million, non-cash adjustments of $2.9 million, and a net increase in our operating assets and liabilities of $1.6 million. Non-cash adjustments consisted primarily of a $2.3 million stock-based compensation expense, $0.9 million in depreciation and amortization and $0.2 million in non-cash interest expense, offset by $0.4 million of inventory write-downs and $0.2 million of change in fair value of derivative liabilities. The change in operating assets and liabilities primarily resulted from a $3.0 million decrease in accounts payable and accrued expenses, a $0.3 million decrease in deferred revenue and a $0.3 million decrease in other liabilities, offset by a $1.0 million decrease in inventory, a $0.6 million net decrease in operating lease right-of-use assets and liabilities and a $0.4 million decrease in prepaid expenses and other assets. Investing Activities Net cash used in investing activities of $0.5 million for the six months ended June 30, 2026 was due to the purchase of property and equipment. Net cash used in investing activities of $3.8 million for the six months ended June 30, 2025 was due to $2.8 million of cash paid for strategic acquisitions and $1.0 million for the purchase of property and equipment. Financing Activities Net cash used in financing activities of $0.5 million for the six months ended June 30, 2026 consists of payments related to stock-based award activities during the period and principal payments related to our financing arrangement for insurance offset by proceeds related to our employee stock purchase plan. Net cash used in financing activities of $0.6 million for the six months ended June 30, 2025 primarily consists of payments related to stock-based award activities during the period offset by proceeds related to our employee stock purchase plan. Off-Balance Sheet Arrangements We do not have any off-balance sheet financing arrangements, as defined in Item 303 of Regulation S-K, as of June 30, 2026. Critical Accounting Estimates There have been no significant changes to our critical accounting policies since December 31, 2025. For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements, refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K. Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The JOBS Act permits companies with emerging growth company status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they apply to private companies. Following the closing of the Business Combination, we use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates. We will continue to be an emerging growth company for the first five fiscal years after the VGAC II Initial Public Offering unless any of the following events occur earlier: (i) we have more than $1.235 billion in annual revenue, (ii) we have more than $700.0 million in market value of our Class A Common Stock held by non-affiliates or (iii) we issue more than $1.0 billion of non-convertible debt securities over a three-year period. 38 Table of Contents Smaller Reporting Company Status We are a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $250 million. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements in our Annual Report on Form 10-K, and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter and our annual revenue exceeds $100 million during such completed fiscal year, or (ii) the market value of our common stock held by non-affiliates exceeds $700 million.