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What changed in Solo Brands, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Solo Brands, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+533 added−609 removedSource: 10-K (2026-03-23) vs 10-K (2025-03-12)

Top changes in Solo Brands, Inc.'s 2025 10-K

533 paragraphs added · 609 removed · 373 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeUtilizing our proprietary fire burning gel and bioethanol, multi-hour burns with the familiar crackle and flame of a traditional wood fire can now be enjoyed anywhere. The following products are produced by our Chubbies segment: Lifestyle Apparel. Chubbies is a fun-loving, premium apparel brand that offers well-fitted comfortable clothing with unique style.
Biggest changeThrough our acquisition activity in 2023, we “brought the fire inside” with indoor fire products that allow our customers to enjoy the warmth and comfort of a fire year-round. Utilizing our proprietary fire burning gel and bioethanol, multi-hour burns with the familiar crackle and flame of a traditional wood fire can now be enjoyed anywhere.
We follow a digital-first strategy which prioritizes a direct connection with customers through e-commerce channels. Our currently owned brands generate the majority of sales online, including through owned social channels such as Facebook and Instagram that route visitors to our sites. This is supplemented by our DTC business via relationships with select third-party e-commerce marketplaces, such as Amazon.
We follow a digital-first strategy which prioritizes a direct connection with customers through e-commerce channels. Our currently owned brands generate the majority of sales online, including through owned social channels such as TikTok, Facebook and Instagram that route visitors to our sites. This is supplemented by our DTC business via relationships with select third-party e-commerce marketplaces, such as Amazon.
While we do not directly source significant amounts of raw materials and components for most of our products, we control the specifications for key raw materials used in our products. The U.S. presidential administration recently imposed new or increased tariffs on goods manufactured in China, Mexico and Canada.
While we do not directly source significant amounts of raw materials and components for most of our products, we control the specifications for key raw materials used in our products. The U.S. presidential administration recently imposed new or increased tariffs on goods manufactured in China, Vietnam, Mexico and Canada.
Information Technology Information technology, or IT, systems are integral to our ability to operate, analyze and manage our business, research and develop new products, enhance our customers’ experience, and optimize our operating costs. Our infrastructure is cloud-first, as we believe it provides the most flexibility, scalability, and is inherently resilient with platform level redundancy in networking and computer hardware.
Information Technology Information technology (“IT”) systems are integral to our ability to operate, analyze and manage our business, research and develop new products, enhance our customers’ experience, and optimize our operating costs. Our infrastructure is cloud-first, as we believe it provides the most flexibility, scalability, and is inherently resilient with platform level redundancy in networking and computer hardware.
In addition to our DTC execution, we are strategically expanding our retail channel through retail partners that support our brand image and share our passion and dedication for innovative, best-in-class products of uncompromising design and performance. Our net sales are concentrated in the United States, though we have a growing international presence. Direct-to-Consumer (“DTC”).
In addition to our DTC execution, we strategically expand our retail channel through retail partners that support our brand image and share our passion and dedication for innovative, best-in-class products of uncompromising design and performance. Our net sales are concentrated in the United States, though we have a growing international presence. Direct-to-Consumer (“DTC”).
We also operate twelve Chubbies retail stores with plans to continue expanding, and one ISLE surf pro-shop, which provide additional opportunities to interact directly with our customers in person and strengthen customer relationships. Retail. We have built relationships with well-known outdoor products and sporting goods retailers.
We also operate eleven Chubbies retail stores with plans to continue expanding, and one ISLE surf pro-shop, which provide additional opportunities to interact directly with our customers in person and strengthen customer relationships. Retail. We have built relationships with well-known outdoor products and sporting goods retailers.
In 2024, we continued to make meaningful investments in our e-commerce and digital platform to drive growth, including the implementation of cutting-edge technology, marketing, and analytics to increase speed and ease of use on both our desktop and mobile sites.
In 2025, we continued to make meaningful investments in our e-commerce and digital platform to drive growth, including the implementation of cutting-edge technology, marketing, and analytics to increase speed and ease of use on both our desktop and mobile sites.
After these aspects of the process are complete, we seek intellectual property protection, including applying for patents and for registration of trademarks for new classes where applicable. 4 Table of Contents We own the patents, trademarks, copyrights, trade dress, and other intellectual property rights that relate to our brands and to key aspects of certain of our products.
After these aspects of the process are complete, we seek intellectual property protection, including applying for patents and for registration of trademarks for new classes where applicable. We own the patents, trademarks, copyrights, trade dress, and other intellectual property rights that relate to our brands and to key aspects of certain of our products.
For additional information, see Part I, Item 1A, Risk Factors, “Tariffs or other restrictions placed on foreign imports and any related counter-measures 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.” Distribution and Inventory Management A majority of our products are shipped from our manufacturers to one of our three United States distribution centers in Grapevine, Texas; Manchester, Pennsylvania; and Salt Lake City, Utah.
For additional information, see Part I, Item 1A, Risk Factors, “Tariffs or other restrictions placed on foreign imports and any related counter-measures 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.” Distribution and Inventory Management A majority of our products are shipped from our manufacturers to one of our two United States distribution centers in Grapevine, Texas and Manchester, Pennsylvania.
Our engineering and industrial design teams collaborate at our Grapevine, Texas headquarters to create new products, and are supported by individual product design teams at the various brand levels. As part of this process, product designs, specifications, and performance characteristics are developed.
Our engineering and industrial design teams collaborate at our Grapevine, Texas headquarters to create new products, and are supported by individual product design teams at the various brand levels. As part of this process, product designs, specifications, and 4 Table of Contents performance characteristics are developed.
Our products are carefully designed to maximize performance while minimizing complexity. We create highly functional, yet simple products that are both durable and easy-to-use. The following products are produced by our Solo Stove segment: Camping Stoves. We revolutionized the camp stove category with the launch of our Lite in 2011.
Our products are carefully designed to maximize performance while minimizing complexity. We create highly functional, yet simple products that are both durable and easy-to-use. The following product categories represent the significant products produced by our Solo Stove segment: Camping Stoves. We revolutionized the camp stove category with the launch of our Lite in 2011.
For the year ended December 31, 2024, compliance with governmental regulations did not have a material effect on our capital expenditures, earnings or competitive position, and, at this time, we do not expect to incur material capital expenditures related to compliance with regulations in 2025. 6 Table of Contents
For the year ended December 31, 2025, compliance with governmental regulations did not have a material effect on our capital expenditures, earnings or competitive position, and, at this time, we do not expect to incur material capital expenditures related to compliance with regulations in 2026.
We own and operate premium authentic outdoor brands with ingenious products influenced by customer feedback. 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. Who We Are Solo Brands operates five premium outdoor brands: Solo Stove, Oru Kayak, Inc.
We own and operate premium authentic outdoor brands with ingenious products influenced by customer feedback. 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 choose our retail partners carefully based on their reputation, demographic, and commitment to appropriately learn and showcase Solo Brands’ portfolio of products, provide hands-on customer service, and willingness to abide by our terms and conditions, including consistent adherence to our minimum-advertised price (“MAP”) policy. We also sell products on websites of retailers.
We choose our retail partners carefully based on their reputation, demographic, and commitment to appropriately learn and showcase Solo Brands’ portfolio of products, provide hands-on customer service, and willingness to abide by our terms and conditions. We also sell products on websites of retailers.
Through our direct to consumer (“DTC”) and retail channels, we develop connections with our customers, receive real-time feedback that informs our product development roadmap and marketing decisions, and enhance our brands. This connection with our customers helps to drive favorability within the communities in which we operate, including with our retail partners, and positions us for future growth.
Through our DTC and retail channels, we develop connections with our customers, receive real-time feedback that informs our product development roadmap and marketing decisions, and enhance our brands. This connection with our customers helps to drive favorability within the communities in which we operate, including with our retail partners.
We believe these sales channels provide incremental sales reach for our business and opportunities to increase awareness for our brands. In fiscal year 2024, DTC sales accounted for 70.2% of Solo Brands sales.
We believe these sales channels provide incremental sales reach for our business and opportunities to increase awareness for our brands. In fiscal year 2025, DTC sales accounted for 63.5% of Solo Brands sales.
It also laid the groundwork for the creation of Solo Brands, Inc. and acquisition of additional brands. We believe our business has distinct competitive advantages, including our ability to acquire and operate outdoor brands that have broadened our product assortment, while sharing our values of authenticity, product quality, and community.
It also laid the groundwork for the creation of Solo Brands, Inc. and acquisition of additional brands. We believe our business has distinct competitive advantages, including our broadened product assortment from prior acquisitions of outdoor brands, while sharing our values of authenticity, product quality, and community.
We currently have a number of manufacturing partners located in various countries including the United States, India, Vietnam, Cambodia, and Mexico, with the majority of our manufacturing concentrated with two manufacturers in China.
We currently have a number of manufacturing partners located in various countries including the United States, India, Vietnam, Cambodia, Mexico, and China.
While employing the same approach that led to the success of our stoves, we have successfully broadened our product line to include virtually smokeless fire pits, cooking systems, pizza ovens, patio heaters, and storage units, and added portable kayaks and paddle boards, lifestyle apparel, and other accessories.
While employing the same approach that led to the success of our stoves, we have successfully broadened our product line to include virtually smokeless indoor and outdoor fire pits and bowls, propane fire pits, pizza ovens, griddles, coolers, home and patio accessories, such as outdoor furniture and heaters, and storage units, and added portable kayaks and paddle boards, lifestyle apparel, and other accessories.
Oru offers premier kayaks that require minimal storage space, are portable, and easy-to-use. The Oru brand includes models and sizes to fit the customers’ needs, including the Inlet, Lake, Beach, Bay, Coast and Haven, along with the edgier and eye-pleasing sport versions of the Beach and Inlet that come exclusively in black.
The Oru brand includes models and sizes to fit the customers’ needs, including the Inlet, Lake, Beach, Bay, Coast and Haven, along with the edgier and eye-pleasing Sport versions of the Beach and Inlet that come exclusively in black.
Our marketing team actively utilizes a combination of digital, social media, traditional, and grass-roots initiatives to support our brand. Our marketing team is a major differentiator and strength for the Company, as it allows us to execute quickly, pivot when needed, and deliver creative content that drives customer engagement.
Our marketing teams actively utilize a combination of digital, social media, traditional, and grass-roots initiatives to support our brands. Our marketing teams are a major differentiator and strength for the brands, as they enable us to execute quickly, pivot when needed, and deliver creative content that drives customer engagement.
As an added benefit to our strategic retail partners, we provide the opportunity to leverage a variety of our products, including specialized items specific to certain of these partners, further demonstrating our desire to operate as a value adding partner. This team serves our retail partner base and identifies potential new retailers to expand our geographic footprint.
As an added benefit to our strategic retail partners, we provide the opportunity to leverage a variety of our products, including specialized items specific to certain of these partners, further demonstrating our desire to operate as a value adding partner.
We believe our domestic capacity and the capacity of international providers is sufficient to meet our future needs. Intellectual Property and Brand Protection We take the protection of our intellectual property very seriously and have taken a variety of operational and legal measures to protect our distinctive brand, designs, and inventions.
Intellectual Property and Brand Protection We take the protection of our intellectual property very seriously and have taken a variety of operational and legal measures to protect our distinctive brand, designs, and inventions.
Each of our brands has established deep relationships with trusted third-party manufacturers—predominantly in China and Southeast Asia, as well as in Mexico through a dedicated facility operated by a manufacturing labor outsourcing company. 1 Table of Contents Products We offer wide-ranging and high-quality products directly to our customers through our platform.
Each of our brands has established, long-standing relationships with trusted third-party manufacturers—predominantly in Southeast Asia, as well as in Mexico through a dedicated facility operated by a consolidated variable interest entity (“VIE”) that provides outsourced manufacturing labor. Products We offer wide-ranging and high-quality products directly to our customers through our platform.
These distribution centers, which we operate, are strategically located across the United States, allowing us to provide faster delivery throughout the United States. Certain of our products are distributed directly from our manufacturing facilities in Mexicali, Mexico and Baja California, Mexico.
These distribution centers, which we operate, are strategically located across the United States, allowing us to provide faster delivery throughout the United States. Certain of our products are distributed directly from our manufacturing facility in Mexicali, Mexico. The remaining portion of our products are shipped directly to one of our national retail partners or one of our distributors.
We work with partners who allow for production flexibility, efficiency and scalability, possess capabilities to support new products, meet our expanding sales channel strategies and other required operational needs.
Supply Chain and Quality Assurance We manage a supply chain of third-party manufacturing and logistics partners to produce and distribute our products. We work with partners who allow for production flexibility, efficiency and scalability, possess capabilities to support new products, meet our expanding sales channel strategies and other required operational needs.
In 2024, as a result of the change in the way our new Chief Executive Officer (“CEO”), who we have determined to be the chief operating decision maker (“CODM”), began assessing financial performance and allocating resources, we now 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.
Segment Information Based on the manner in which our Chief Executive Officer (“CEO”), who we have determined to be the chief operating decision maker (“CODM”), assesses financial performance and allocates resources, we operate as two reportable segments: Solo Stove, which includes the Solo Stove and TerraFlame brands and primarily offers indoor and outdoor fire pits, stoves, and accessories, and Chubbies, which offers premium casual apparel and activewear.
As of December 31, 2024, we had approximately 526 employees.
As of December 31, 2025, we had approximately 327 employees.
See Item 1A, “Risk Factors.” In relation to our sales and marketing activities, we are subject to various consumer protection rules and regulations promulgated and/or enforced by various federal and state regulators such as the U.S. Federal Trade Commission, and state attorneys general as well as non-U.S. regulatory authorities that relate to advertising, product delivery and other consumer-facing practices.
See Item 1A, “Risk Factors.” 5 Table of Contents In relation to our sales and marketing activities, we are subject to various consumer protection rules and regulations promulgated and/or enforced by various federal and state regulators such as the U.S.
The Lite set the standard, and we have continued to design and develop groundbreaking, high-performance products engineered with purposeful simplicity. We carefully design and engineer every product for immediate enjoyment, free of complexity and intimidating learning curves often found in engineered outdoor and lifestyle products.
We carefully design and engineer every product for immediate enjoyment, free of complexity and intimidating learning curves often found in engineered outdoor and lifestyle products.
ISLE produces high-quality stand-up paddle boards and a hybrid kayak with colorful designs that are engineered to accommodate every skill level, style, and interest. ISLE offers an extensive array of paddleboards, kayak hybrids, surfboards, floats and accessories with bold and award winning designs.
ISLE produces high-quality inflatable and hard board stand-up paddle boards, hybrid kayaks, surfboards and floats with colorful designs that are engineered to accommodate every skill level, style, and interest.
Our domestic and international warehouses position Solo Brands to reach customers quickly and position us to realize immediate cost savings. We use a warehouse management system at these distribution centers that interfaces with our enterprise resource planning (“ERP”) system so that we can maintain visibility and control over inventory levels and customer shipments.
We use a warehouse management system at these distribution centers that interfaces with our enterprise resource planning (“ERP”) system so that we can maintain visibility and control over inventory levels and customer shipments. We believe our domestic capacity and the capacity of international providers is sufficient to meet our future needs.
The remaining portion of our products are shipped directly to one of our national retail partners or one of our distributors. We manage inventory by analyzing product sell-through, forecasting demand, and working with our supply chain to ensure sufficient availability. Additionally, we lease a 20,000 square foot facility in Canada and a 72,000 square foot facility in Rotterdam, Netherlands.
We manage inventory by analyzing product sell-through, forecasting demand, and working with our supply chain to ensure sufficient availability. Additionally, we lease a 20,000 square foot facility in Canada and a 72,000 square foot facility in Rotterdam, Netherlands. Our domestic and international warehouses position Solo Brands to reach customers quickly.
In addition, our online products and services, including our e-commerce and digital communications activities, are or may be subject to U.S. and non-U.S. data privacy and cybersecurity laws, such as the U.S. 5 Table of Contents Children’s Online Privacy Protection Act, the California Consumer Privacy Act (“CCPA”), the General Data Protection Regulation (the “GDPR”), and the UK General Data Protection Regulation and the UK Data Protection Act 2018 (collectively, the “UK GDPR”).
In addition, our collection of personal information, such as through our online products and services, including our e-commerce and digital communications activities, are or may be subject to U.S. and non-U.S. data privacy and cybersecurity laws, such as the U.S.
With an emphasis on form and function, ISLE’s products are intended to help users reconnect with the simple joy of getting outside, and their innovative portable designs allow users take them anywhere they can find floatable water. 2 Table of Contents Marketing Our multifaceted marketing strategy engages existing and new customers to promote sales generation and to build brand awareness and affinity.
With an emphasis on form and function, ISLE’s products are intended to help users reconnect with the simple joy of getting outside, and their innovative portable designs allow users to take them anywhere they can find floatable water. 2 Table of Contents In 2025, ISLE introduced HĀVN, the world’s first inflatable, modular greenhouse.
The Solo Brands product design teams control every aspect of our innovation, including design, construction, material performance requirements, manufacturing protocols, supplier selection, packaging specifications, and quality plans. Utilizing our in house research and development center at our headquarters, as well as industry leading partners, the product development team is able to apply continued design, testing, and quality control.
Utilizing our in-house research and development center at our headquarters, as well as industry leading partners, the product development team is able to apply continued design, testing, and quality control.
During 2024, the majority of our products that were imported into the United States from China were already subject to tariffs that were as high as 25%, which adversely impacted our expenses. In addition, our product lines involve production with steel manufactured outside the U.S., including steel manufactured in Mexico, that is also subject to new tariffs.
During 2024, the majority of our products that were imported into the United States from China were already subject to tariffs that were as high as 25%, with 2025 experiencing tariffs as high as 70%, which adversely impacted our expenses.
Through this approach, we have expanded our product lines by designing solutions around consumer demand, including new products and accessories and additional sizes of existing product lines, as well as through strategic acquisitions that complement the Solo Brands platform.
We have expanded our product lines by designing solutions around consumer demand, including new products and accessories and additional sizes of existing product lines, as well as through strategic acquisitions that complement the Solo Brands platform. 1 Table of Contents The Solo Brands product design teams control every aspect of our innovation, including design, construction, material performance requirements, manufacturing protocols, supplier selection, packaging specifications, and quality plans.
The Chubbies brand has historically had five main product lines—Swim Trunks, Casual Shorts, Sport, Polos + Shirts, and Lounge. Chubbies has continued to challenge the men’s and kids apparel worlds, with bold patterns, innovative products designed with customer insights in mind and collaborations our customers love, such as the NFL line launched in 2024.
Chubbies has continued to challenge the men’s and kids apparel worlds, with bold patterns, innovative products designed with customer insights in mind and collaborations our customers love, such as the NFL line launched in 2024 and expanded in 2025 and the holiday inspired lines that are introduced each year.
For more information, see “Where You Can Find More Information; Available Information” above. Product Design and Development Solo Brands and its products are driven by the “create good” philosophy and are designed to get you in touch with whatever “good” is for you.
Product Design and Development Solo Brands and its products are driven by the “create good” philosophy and are designed to get you in touch with whatever “good” is for you. We create good products that foster good moments and memories, so our customers can create a good life.
At Solo Brands, not only are our products innovative, but we believe our approach to innovation stands apart from the competition. We do not believe in behind-the-curtain intuition-driven design, but rather customer-driven product development.
At Solo Brands, not only are our products innovative, but we believe our approach to innovation stands apart from the competition. Our focus is on producing products our customers desire, across all of our brands, leveraging a customer-driven product development approach.
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. Supply Chain and Quality Assurance We manage a supply chain of third-party manufacturing and logistics partners to produce and distribute our products.
The remaining operating segments, including Oru and ISLE, 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.
The Solo Stove fire pit product offering includes the new tabletop Mesa, Ranger, Bonfire, Yukon, and Canyon, each of which burns wood fuel to a fine ash for easy cleaning. Made of lightweight, durable stainless steel, our fire pits epitomize the Solo Stove brand promise of uncompromising quality, portability, and function. Cooking.
These new additions joined a family of existing Solo Stove fire pit product offerings, which include the tabletop Mesa, Ranger, Bonfire, Yukon, and Canyon, each of which burns wood fuel to a fine ash for easy cleaning. Cooking.
Created with high performance stretch fabric, Chubbies offers premium quality with a lightweight and breathable design that can be worn anywhere and anytime. The following products are produced by our All Other segment: Recreation. Oru Kayak is the original origami kayak that allows users to go from box to boat in a matter of minutes.
Created with high performance stretch fabric, Chubbies offers premium quality with a lightweight and breathable design that can be worn anywhere and anytime. In February 2026, Chubbies launched Cheekies, its new women’s swimwear line, to expand our product offerings to a new customer base. The following products are produced by our All Other segment: Recreation.
We create good products that foster good moments and memories, so our customers can create a good life. Our products undergo a rigorous development process designed to maximize performance while minimizing complexity, delivering a superior degree of quality, functionality, portability, style, and ease-of-use.
Our products undergo a rigorous development process designed to maximize performance while minimizing complexity, delivering a superior degree of quality, functionality, portability, style, and ease-of-use. The Lite set the standard, and we have continued to design and develop groundbreaking, high-performance products engineered with purposeful simplicity.
We believe that we have been able to compete successfully on the basis of our superior design capabilities and product development, brands, customer service, and our omni-channel approach. We believe that our value proposition and brand strategy create competitive advantages that set us apart from competition in the broader fragmented outdoor, leisure, recreation, and lifestyle apparel markets.
We believe that we have been able to compete successfully on the basis of our superior design capabilities and product development, brands and our omni-channel approach.
(“Oru”), International Surf Ventures, Inc. (“ISLE”), Chubbies, Inc. (“Chubbies”), and Sconberg, LLC (“TerraFlame”). Our brands develop innovative products and market them directly to customers primarily through e-commerce channels, as well as partnerships with key retailers.
Who We Are Solo Brands operates four premium outdoor brands: Solo Stove, Oru Kayak (“Oru”), International Surf Ventures (“ISLE”) and Chubbies. Our brands develop innovative products and market them directly to customers primarily through our direct-to-consumer (“DTC”) channel, which includes e-commerce and owned retail stores, as well as partnerships with key retailers.
Seasonality We believe that our sales include a seasonal component. Historically, our net sales have been highest in our second and fourth quarters, with the first quarter typically generating the lowest sales. This historical sales trend is supported by the demand for our products at the beginning of the summer and holiday shopping seasons.
This team serves our retail partner base and identifies potential new retailers to expand our geographic footprint. 3 Table of Contents Seasonality We believe that our sales include a seasonal component. Historically, our net sales have been highest in our second and fourth quarters, with the first quarter typically generating the lowest sales.
While our in-house marketing team remains the primary focus, we continue to leverage the expertise and enhanced penetration available through industry leading external marketing agencies, which led to increased brand awareness from campaigns in 2023 and 2024, such as the Snoop Dogg campaigns.
While our in-house marketing teams remain the primary focus, we continue to leverage the expertise and enhanced penetration available through industry leading external marketing agencies. Sales Channels We are an omni-channel company that leverages the power of e-commerce as well as physical retail stores.
We expect that this seasonality will continue to be a factor in our results of operations and sales. 3 Table of Contents Segment Information Historically, we have operated as a single reportable segment.
This historical sales trend is supported by the demand for our products at the beginning of the summer and holiday shopping seasons. We expect that this seasonality will continue to be a factor in our results of operations and sales.
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Our platform is led by our largest brand, Solo Stove, which was founded in 2011 by two brothers seeking to bring family together in the outdoors.
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Solo Stove offers portable, low-smoke and propane fire pits and camping stoves for backyard and outdoor use in different sizes, as well as indoor fire pits that allow the customer to bring the fire inside, griddles, pizza ovens, coolers and a variety of accessories for each.
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Our founders combined their passion for e-commerce with their love of the outdoors to create a digitally-native platform to market the revolutionary Solo Stove Lite (“Lite”), an ultralight portable backpacking camp stove that can boil water in under 10 minutes using just twigs, sticks, and leaves.
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Chubbies is a fun-loving, premium apparel brand that offers well-fitted comfortable clothing with unique style. Watersports, which is comprised of our two primarily water-oriented brands, Oru and ISLE, offers a flagship line of lightweight, foldable kayaks and produces high-quality stand-up paddle boards with colorful designs that are engineered to accommodate every skill level, style, and interest.
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Solo Stove followed the success of the Lite with the launch of its iconic, stainless steel, virtually smokeless fire pits in 2016, pioneering a new product category that has helped foster a loyal community of enthusiasts and furthers our efforts to bring people together.
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In 2025, the Company completed the disposition of the manufacturing operations for the TerraFlame brand. However, we continue to own the intellectual property of TerraFlame, as well as sole distribution rights of TerraFlame branded products. Solo Brands distributes its products through international iterations of the Solo Stove website and other partners across North America, Europe and Australia.
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We employ a data-driven approach to portfolio expansion opportunities and a product development process that is guided by direct customer feedback and market data, which allows for a reduction in the time from ideation to product delivery.
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For more information, see “Where You Can Find More Information; Available Information” above.
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To further support our end users and enhance the cooking experience, we have teamed with prominent influencers in the social media space and offer ingredients for one-time delivery or subscription. Outdoor Heating. In 2022, we challenged the outdoor heating market norms by launching a wood-pellet burning patio heater.
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Made of lightweight, durable stainless steel, our fire pits epitomize the Solo Stove brand promise of uncompromising quality, portability, and function.
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Virtually smokeless, and easy to use with a small bag of wooden pellets, rather than an expensive and heavy propane tank, our patio heater provides head to toe warmth. Storage. Launched in 2021, the Station provides an optimized storage solution for fire pits, firewood, and other accessories.
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In 2025, we reinvigorated our fire pit offerings with the addition of the Summit, which pairs a taller, brighter and more mesmerizing flame with the ability to be lit 3X faster and refined look with built-in stand, and the Infinity Flame, Solo Stove’s first ever propane-fired fire pit that leverages an innovative burner designed to mimic the look and movement of our wood burning fire pits, all wrapped in an attractive package.
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The Station provides highly functional storage that enables our customers to keep their outdoor products in one convenient location. Built to withstand ice, rain, and snow with a powder-coated aluminum frame and a UV-coated cover, the Station’s dual shelf design supports a carrying weight of up to 250 pounds.
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In 2025, we introduced the Steelfire Griddle, which delivers an elevated griddle cooking experience through use of our proprietary Racetrack Burner system and triple-layered stainless steel griddle surface. To further support our end users and enhance the cooking experience, we additionally offer a variety of cooking tools and ingredients for one-time delivery or subscription. Indoor Fire Products .
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The Station has broadened our consumer reach and was designed in response to real-time consumer feedback. Consumables. Consumables provide a high margin, recurring revenue stream that increases customer lifetime value and supports repeat purchases and engagement with our community.
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The following products are produced by our Chubbies segment: Lifestyle Apparel. Chubbies is a fun-loving, premium apparel brand that offers well-fitted comfortable clothing with unique style. The Chubbies brand, which launched its iconic casual shorts in 2011, now offers a variety of adjacent product lines for men and kids, such as Swimwear, Pants, Polos, Button-Ups, Tees, Outerwear and Lounge.
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The consumables category includes fun products that enhance the Solo Brands experience, such as Color Packs, and exciting add-ons, including Starters, All-Natural Charcoal, firewood, fuel, and pellets. Indoor Fire Products . Through our acquisition activity in 2023, we “brought the fire inside” with indoor fire products that allow our customers to enjoy the warmth and comfort of a fire year-round.
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Oru Kayak is the original origami kayak that allows users to go from box to boat in a matter of minutes. Oru offers premier kayaks that require minimal storage space, are portable, and easy-to-use.
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With loyal customers already rooted with each of our brands, we also believe a large opportunity exists for effective cross-marketing. Sales Channels We are an omni-channel company that leverages the power of e-commerce as well as physical retail stores.
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Leveraging the same composite used in the inflatable paddleboards, the HĀVN exhibits strength similar to that of traditional metal and wooden structures, all with the portability of an inflatable.
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These new tariffs and retaliatory actions by foreign governments are expected to have a significant adverse effect on our results of operations and margins and sales of our products outside the U.S.
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Oru and ISLE support their product offerings with a variety of accessories that enable the customer to use them to their fullest, such as paddles, storage bags, personal flotation devices, amongst other accessories. Marketing Our multifaceted marketing strategy engages existing and new customers to promote sales generation and to build brand awareness and affinity.
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In 2025, we saw a shift in the seasonal demand within our retail channel with the first quarter far exceeding the third quarter. We believe that this change in trend in 2025 could be indicative of a potential long-term change in our seasonality, which we will continue to monitor in future periods.
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In 2025, in connection with the tariff increases described below, we diversified our supply base and began to place a small portion of purchase orders from Vietnam and Cambodia, reducing our reliance on sourcing from China for the Solo Stove segment and eliminated our sourcing from China almost entirely for the Chubbies segment.
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As noted above, we diversified our supply base in 2025 as a tariff mitigation strategy, significantly reducing our dependence on goods manufactured in China. In addition, our product lines involve production with steel manufactured outside the U.S., including steel manufactured in Mexico, that has also been subject to new tariffs.
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These new tariffs and retaliatory actions by foreign governments had an adverse effect on our inventory and cost of goods sold in 2025 and we expect, on a per unit basis, further adverse effects in future periods as a result of these tariffs, to the extent they remain effective.
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Various tariffs enacted in 2025 have been subject to successful legal challenge, but it remains unclear whether and to whom those tariffs may be refunded, and the federal government may attempt to impose new or similar tariffs under alternative statutory mechanisms.
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We believe that our innovative products are highly distinguished from competing products, with Solo Stove bringing to market new and innovative takes on their virtually smokeless fire pit design and branching into new categories with the introduction of the propane fire pit, griddle and cooler in 2025, Chubbies continually evolving its approach to patterns and product assortment that caters to its consumers’ needs and Watersports creating unique product offerings that provide their customers with a variety of ways to embrace the water.
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Federal Trade Commission, and state attorneys general as well as non-U.S. regulatory authorities that relate to advertising, product delivery and other consumer-facing practices.
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Children’s Online Privacy Protection Act, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), the General Data Protection Regulation (the “GDPR”), and the UK General Data Protection Regulation and the UK Data Protection Act 2018 (collectively, the “UK GDPR”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, any such access, disclosure or other loss or unauthorized use of information or data, whether actual or perceived, could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant penalties and fines in the United States, Canada, EU and UK.
Biggest changeThere can be no assurance that our cybersecurity risk management program and processes, including our IRP, and other preventative actions the Company has taken and continues to take that are designed to reduce the risk of cybersecurity threats and incidents and protect its systems and information, will be fully implemented, complied with or successful in protecting against all cybersecurity threats and incidents. 20 Table of Contents In addition, any such access, disclosure or other loss or unauthorized use of information or data, whether actual or perceived, could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant penalties and fines in the United States, Canada, EU and UK.
In addition, our product lines involve production with steel manufactured outside the U.S., including steel manufactured in Mexico that is subject to the new tariffs, including virtually all of our Solo Stove and TerraFlame brands’ products. Further, certain of our Solo Stove, Oru and TerraFlame brands’ products are produced in Mexico and are subject to the new tariffs on Mexico.
In addition, our product lines involve production with steel manufactured outside the U.S., including in Mexico that is subject to tariffs, including virtually all of our Solo Stove and TerraFlame brands’ products. Further, certain of our Solo Stove, Oru and TerraFlame brands’ products are produced in Mexico and are subject to the new tariffs on Mexico.
Growth may increase the strain on our resources, and we could experience operating difficulties, including difficulties in sourcing, logistics, recruiting, maintaining internal controls, marketing, designing innovative products, and meeting consumer needs.
Growth may increase the strain on our resources, and we could experience operating difficulties, including in sourcing, logistics, recruiting, maintaining internal controls, marketing, designing innovative products, and meeting consumer needs.
In addition, as we expand into new areas and new product categories we will continue to face, different and, in some cases, more formidable competition.
In addition, as we expand into new areas and product categories we will continue to face, different and, in some cases, more formidable competition.
This evolution may affect our ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us.
This evolution may affect our ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, and result in liability or impose additional costs on us.
If we or our third party service providers suffer, or are believed to have suffered, a material loss or disclosure of personal or confidential information as a result of an actual or potential breach of our information technology systems, we may suffer reputational, competitive and/or business harm, incur significant costs and be subject to government investigations, litigation, fines and/or damages, which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.
If we or our third-party service providers suffer, or are believed to have suffered, a loss or disclosure of personal or confidential information as a result of an actual or potential breach of our information technology systems, we may suffer reputational, competitive and/or business harm, incur significant costs and be subject to government investigations, litigation, fines and/or damages, which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.
These restrictions limit or prohibit, among other things, and in each case, subject to certain customary exceptions, our ability to: (a) pay dividends on, redeem or repurchase our stock, or make other distributions; (b) incur or guarantee additional indebtedness; (c) sell stock in our subsidiaries; (d) create or incur liens; (e) make acquisitions or investments; (f) transfer or sell certain assets or merge or consolidate with or into other companies; (g) make certain payments or prepayments of indebtedness subordinated to our obligations under the Revolving Credit Facility; and (h) enter into certain transactions with our affiliates.
These restrictions limit or prohibit, among other things, and in each case, subject to certain customary exceptions, our ability to: (a) pay dividends on, redeem or repurchase our stock, or make other distributions; (b) incur or guarantee additional indebtedness; (c) sell stock in our subsidiaries; (d) create or incur liens; (e) make acquisitions or investments; (f) transfer or sell certain assets or merge or consolidate with or into other companies; (g) make certain payments or prepayments of indebtedness subordinated to our obligations under the 2025 Revolving Credit Facility; and (h) enter into certain transactions with our affiliates.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our business, results of operations, and financial condition.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our business, results of operations, and financial condition.
For example, the Continuing LLC Owners may have different tax positions from us, especially in light of the Tax Receivable Agreement that could influence our decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when Solo Brands, Inc. should terminate the Tax Receivable Agreement and accelerate its obligations thereunder.
For example, the Prior Continuing LLC Owners may have different tax positions from us, especially in light of the Tax Receivable Agreement that could influence our decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when Solo Brands, Inc. should terminate the Tax Receivable Agreement and accelerate its obligations thereunder.
Our large reliance on our one distribution center in Texas makes us vulnerable to natural disasters, weather-related disruptions, accidents, system failures, public health issues, or other unforeseen events that could delay or impair our ability to fulfill retailer orders and/or ship merchandise purchased on our website, which could harm our sales.
Our large reliance on our distribution center in Texas makes us vulnerable to natural disasters, weather-related disruptions, accidents, system failures, public health issues, or other unforeseen events that could delay or impair our ability to fulfill retailer orders and/or ship merchandise purchased on our website, which could harm our sales.
For example, the TCPA imposes various consumer consent requirements and other restrictions in connection with certain telemarketing activity and other communication with consumers by phone, fax or text message. The CAN-SPAM Act and the Telemarketing Sales Rule and analogous state laws also impose various restrictions on marketing conducted use of email, telephone, fax or text message.
For example, the TCPA imposes various consumer consent requirements and other restrictions in connection with certain telemarketing activity and other communication with consumers by phone, fax or text message. The CAN-SPAM and the Telemarketing Sales Rule and analogous state laws also impose various restrictions on marketing conducted use of email, telephone, fax or text message.
There can be no assurance that Holdings and its subsidiaries will generate sufficient cash flow to distribute funds to Solo Brands, Inc., or that applicable state law and contractual restrictions, including negative covenants in any debt agreements of Holdings or its subsidiaries (including the Revolving Credit Facility), will permit such distributions.
There can be no assurance that Holdings and its subsidiaries will generate sufficient cash flow to distribute funds to Solo Brands, Inc., or that applicable state law and contractual restrictions, including negative covenants in any debt agreements of Newco or Holdings or its subsidiaries (including the Revolving Credit Facility), will permit such distributions.
In addition, Canada’s Anti-Spam Legislation, or CASL, prohibits email marketing without the recipient’s consent, with limited exceptions. Failure to comply with PIPEDA, CASL, or provincial privacy or data protection laws could result in significant fines and penalties or possible damage awards.
In addition, Canada’s Anti-Spam Legislation (“CASL”), prohibits email marketing without the recipient’s consent, with limited exceptions. Failure to comply with PIPEDA, CASL, or provincial privacy or data protection laws could result in significant fines and penalties or possible damage awards.
Many of our competitors and potential competitors have significant competitive advantages, including learning from our experiences and taking advantage of new product popularity, greater financial strength, larger research and development teams, larger marketing budgets, and more distribution and other resources than we do.
Many competitors have significant competitive advantages, including learning from our experiences and taking advantage of new product popularity, greater financial strength, larger research and development teams, larger marketing budgets and more distribution and other resources than we do.
We depend in part on our retail partners to display and present our products to customers, and our failure to maintain and further develop our relationships with our domestic retail partners could harm our business. The physical placement of our products at our selected retail partners plays an important part in our sales strategy.
We depend in part on our retail partners to display and present our products to customers, and our failure to maintain and further develop our relationships with our domestic retail partners could harm our business. The physical placement of our products at retail partners plays an important part in our sales strategy.
We also may not achieve the anticipated benefits from either past or future acquisitions due to a number of factors, including: • risks associated with conducting due diligence; • problems integrating the purchased businesses, products or technologies; • anticipated and unanticipated costs or liabilities associated with the acquisition; • inability to achieve anticipated synergies; • issues maintaining uniform standards, procedures, controls and policies across our brands; 17 Table of Contents • the diversion of management’s attention from other business concerns; • the loss of our or the acquired business’s key employees; • adverse effects on existing business relationships with suppliers, distributors, retail partners and customers; • risks associated with entering new markets in which we have limited or no experience; • increased legal, accounting and compliance costs; or • the issuance of dilutive equity securities, the incurrence of debt, or the use of cash to fund such acquisitions.
We also may not achieve the anticipated benefits from either past or future acquisitions due to a number of factors, including: • risks associated with conducting due diligence; • problems integrating the purchased businesses, products or technologies; • anticipated and unanticipated costs or liabilities associated with the acquisition; • inability to achieve anticipated synergies; • issues maintaining uniform standards, procedures, controls and policies across our brands; • the diversion of management’s attention from other business concerns; • the loss of our or the acquired business’s key employees; • adverse effects on existing business relationships with suppliers, distributors, retail partners and customers; • risks associated with entering new markets in which we have limited or no experience; • increased legal, accounting and compliance costs; or • the issuance of dilutive equity securities, the incurrence of debt, or the use of cash to fund such acquisitions.
The market price of our Class A common stock has fluctuated significantly and is highly volatile and may continue to fluctuate substantially due to many factors, including: • our ability to continue as a going concern; • our ability to satisfy the covenants under our Revolving Credit Facility; • the execution of liquidity, cost-saving and restructuring initiatives; • the volume and timing of sales of our products; • the introduction of new products or product enhancements by us or our competitors; • disputes or other developments with respect to our or others’ intellectual property rights; • our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis; • product liability claims or other litigation; • quarterly variations in our growth, profitability or results of operations, or those of our competitors; • media exposure of our products or our competitors; • announcement or expectation of additional equity or debt financing efforts; • additions or departures of key personnel; • issuance of new or updated research or reports by securities analysts; • failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; • changes in governmental regulations or in reimbursement; • changes in earnings estimates or recommendations by securities analysts; and • general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
The market price of our Class A common stock has fluctuated significantly and is highly volatile and may continue to fluctuate substantially due to many factors, including: • our ability to continue as a going concern; • our ability to satisfy the covenants under our Amended Credit Agreement; • the execution of liquidity, cost-saving and restructuring initiatives; • the volume and timing of sales of our products; • the introduction of new products or product enhancements by us or our competitors; • disputes or other developments with respect to our or others’ intellectual property rights; • our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis; • product liability claims or other litigation; • quarterly variations in our growth, profitability or results of operations, or those of our competitors; • media exposure of our products or our competitors; • announcement or expectation of additional equity or debt financing efforts; • additions or departures of key personnel; • issuance of new or updated research or reports by securities analysts; • failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; • changes in governmental regulations or in reimbursement; • changes in earnings estimates or recommendations by securities analysts; and • general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
The U.S. government also prohibits imports of items that are made or manufactured (in whole or in part) using forced labor, including under the Tariff Act of 1937 and the Uyghur Forced Labor Protection Act, or UFLPA.
The U.S. government also prohibits imports of items that are made or manufactured (in whole or in part) using forced labor, including under the Tariff Act of 1937 and the Uyghur Forced Labor Protection Act.
Some of our competitors may aggressively discount their products or offer other attractive sales terms in order to gain market share, which could impact our pricing, profit margins and market share.
Some of our competitors may aggressively discount products or offer other attractive sales terms in order to gain market share, which could impact our pricing, profit margins and market share.
Our results of operations are subject to seasonal and quarterly variations, which could cause the price of our common stock to decline. We believe that our sales include a seasonal component.
Our results of operations are subject to seasonal and quarterly variations, which could cause the price of our Class A common stock to decline. We believe that our sales include a seasonal component.
These information technology systems, most of which are managed by third parties, may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components, power outages, hardware failures, computer viruses, and malware (e.g. ransomware), misconfigurations, “bugs” or other vulnerabilities, malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state--supported actor, attacks by computer hackers, telecommunication failures, user errors or catastrophic events.
These information technology systems, most of which are managed by third parties, may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components, power outages, hardware failures, computer viruses, and malware, misconfigurations, “bugs” or other vulnerabilities, malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state--supported actor, attacks by computer hackers, telecommunication failures, user errors or catastrophic events.
In light of the complex and evolving nature of EEA and UK privacy laws on cookies and tracking technologies, there can be no assurance that we will be successful in our efforts to comply with such laws; violations of such laws could result in regulatory investigations, fines, orders to cease / change our use of such technologies, as well as civil claims including class actions and reputational damage.
In light of the complex and evolving nature of privacy laws on cookies and tracking technologies, there can be no assurance that we will be successful in our efforts to comply with such laws; violations of such laws could result in regulatory investigations, fines, orders to cease / change our use of such technologies, as well as civil claims including class actions and reputational damage.
Also, as a result of our intention to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us as long as we qualify as an “emerging growth company” or as a “smaller reporting company” our financial statements may not be comparable to those of companies that fully comply with regulatory and reporting requirements upon the public company effective dates.
Also, as a result of our intention to take advantage of some or all of the reduced regulatory and reporting requirements that are available to us as long as we qualify as an “emerging growth company” or as a “smaller reporting company” our financial statements may not be comparable to those of companies that fully comply with regulatory and reporting requirements upon the public company effective dates.
As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, or the DGCL, which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, the board approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned 85% of the common stock or (iii) following board approval, the business combination receives the approval of the holders of at least two-thirds of our outstanding common stock not held by such interested stockholder.
As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law (“the DGCL”), which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, the board approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned 85% of the common stock or (iii) following board approval, the business combination receives the approval of the holders of at least two-thirds of our outstanding common stock not held by such interested stockholder.
As laws and regulations, including the Federal Trade Commission, or FTC, enforcement, rapidly evolve to govern the use of these communications and marketing platforms, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations could adversely impact our business, financial condition and results of operations or subject us to fines or other penalties.
As laws and regulations, including the Federal Trade Commission (“FTC”), enforcement, rapidly evolve to govern the use of these communications and marketing platforms, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations could adversely impact our business, financial condition and results of operations or subject us to fines or other penalties.
In particular, we must comply with the Payment Card Industry Data Security Standard, or PCI-DSS, a set of requirements designed to ensure that all companies that process, store or transmit payment card information maintain a secure environment to protect cardholder data. We rely on vendors to handle PCI-DSS matters and to ensure PCI-DSS compliance.
In particular, we must comply with the Payment Card Industry Data Security Standard (“PCI-DSS”), a set of requirements designed to ensure that all companies that process, store or transmit payment card information maintain a secure environment to protect cardholder data. We rely on vendors to handle PCI-DSS matters and ensure compliance.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and 18 Table of Contents regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
For example, consumer perception could be influenced by negative media attention regarding any consumer complaints about our products, our management team, ownership structure, sourcing practices and supply chain partners, employment practices, ability to execute against our mission and values, and our products or brand, such as any advertising campaigns or media allegations that challenge the sustainability of our products and our supply chain, or that challenge our marketing efforts regarding the quality of our products, which could have an adverse effect on our business, brand and reputation.
For example, consumer 8 Table of Contents perception could be influenced by negative media attention regarding any consumer complaints about our products, our management team, ownership structure, sourcing practices and supply chain partners, employment practices, ability to execute against our mission and values, and our products or brand, such as any advertising campaigns or media allegations that challenge the sustainability of our products and our supply chain, or that challenge our marketing efforts regarding the quality of our products, which could have an adverse effect on our business, brand and reputation.
Additional compliance investment and potential business process changes may also be required. In addition, similar laws have been passed in other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States.
Additional compliance investment and potential business process changes may also be required. In addition, similar laws have been enacted in other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States.
Security Incidents Security incidents compromising the confidentiality, integrity, and availability of our confidential or personal information and our third-party service providers’ information technology systems could result from cyber-attacks, computer malware, viruses, social engineering (including spear phishing and ransomware attacks), credential stuffing, supply chain attacks, efforts by individuals or groups of hackers and sophisticated organizations, including state-sponsored organizations, errors or malfeasance of our personnel, and security vulnerabilities in the software or systems on which we and our third party service providers rely.
Security Incidents Security incidents compromising the confidentiality, integrity, and availability of our confidential or personal information and our third-party service providers’ information technology systems could result from cyber-attacks, computer malware, viruses, social engineering, credential stuffing, supply chain attacks, efforts by individuals or groups of hackers and sophisticated organizations, including state-sponsored organizations, errors or malfeasance of our personnel, and security vulnerabilities in the software or systems on which we and our third party service providers rely.
We may not be able to maintain and enhance a loyal customer base if we receive customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, operating results and growth prospects.
For example, we may not be able to maintain and enhance a loyal customer base if we receive customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, operating results and growth prospects.
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.
In addition, there can be no assurances that we will be able to pass any additional increased costs from tariffs on to our customers, that demand or profitability will not be further materially adversely impacted, or that we will be successful in implementing any additional efforts to mitigate the effect of tariffs on our business.
We are also subject to the European Union, or EU, and UK rules with respect to cross-border transfers of personal data from the EEA and the UK to the United States and other jurisdictions that the European Commission/ UK competent authorities do not recognize as having “adequate” data protection laws unless a data transfer mechanism has been put in place, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain.
We are also subject to the European Union (“EU”) and UK rules with respect to cross-border transfers of personal data from the EEA and the UK to the United States and other jurisdictions that the European Commission/ UK competent authorities do not recognize as having “adequate” data protection laws unless a data transfer mechanism has been put in place, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain.
In the event that any seasonal or quarterly fluctuations in our net sales and results of operations result in our failure to meet our forecasts or the forecasts of the research analysts that may cover us in the future, the market price of our common stock could fluctuate or decline.
In the event that any seasonal or quarterly fluctuations in our net sales and results of operations result in our failure to meet our forecasts or the forecasts of the research analysts that may cover us in the future, the market price of our Class A common stock could fluctuate or decline.
If our products are defective or used incorrectly by our customers, bodily injury, property damage or other injury, including death, may result in, and could give rise to product liability claims against us, which could adversely affect our brands' image or reputation.
If our products are defective or used incorrectly, bodily injury, property damage or other injury, including death, may result in, and could give rise to product liability claims against us, which could adversely affect our brands’ image or reputation.
Payments under the Tax Receivable Agreement are not conditioned on the Continuing LLC Owners’ ownership of our shares.
Payments under the Tax Receivable Agreement are not conditioned on the Prior Continuing LLC Owners’ ownership of our shares.
If regulators start to enforce the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology 21 Table of Contents personnel, adversely affect our margins, increase costs and subject us to additional liabilities.
If regulators start to enforce the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities.
We cannot predict if investors will find our Class A common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our Class A common stock.
We cannot predict if investors will find our Class A common stock less attractive if we continue to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our Class A common stock.
Because we are a premium brand, our sales depend, in part, on retail partners effectively displaying our products, including providing attractive space and point of purchase displays in their stores, and training their sales personnel to sell our products.
Because we are a premium brand, our sales depend, in part, on retail partners effectively displaying our products, including providing attractive space and point of purchase displays in their stores, and training sales personnel.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, none of the Original LLC Owners or any director who is not employed by us or his or her affiliates has any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us.
Our amended and restated certificate of incorporation provides that, to the fullest extent 26 Table of Contents permitted by law, none of the Original LLC Owners or any director who is not employed by us or his or her affiliates has any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us.
Case law from the Court of Justice of the European Union, or CJEU, states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
Case law from the Court of Justice of the European Union (“CJEU”) states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business. 20 Table of Contents Third Party Data Processing and Transfers We depend on a number of third parties in relation to the operation of our business, a number of which process personal data on our behalf.
As we may continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business. Third Party Data Processing and Transfers We depend on a number of third parties in relation to the operation of our business, a number of which process personal data on our behalf.
Moreover, both advocates and opponents to certain ESG matters, including diversity, equity and inclusion, are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
Moreover, both advocates and opponents to certain ESG matters, are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
Our reliance on suppliers and manufacturers in foreign markets, as well as our sales in non-U.S. markets, creates risks inherent in doing business in foreign jurisdictions, including: (a) the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to the importation and taxation of goods; (b) weaker protection for intellectual property and other legal rights than in the United States, and practical difficulties in enforcing intellectual property and other rights outside of the United States; (c) compliance with the U.S.
Our reliance on suppliers and manufacturers in foreign markets, as well as our sales in non-U.S. markets, creates risks inherent in doing business in foreign jurisdictions, including: (a) complying with various foreign laws and regulations, including trade and labor restrictions and laws relating to the importation and taxation of goods; (b) weaker protection for and practical difficulties in enforcing intellectual property and other legal rights than in the United States; (c) compliance with the U.S.
For example, laws in all 50 U.S. states may require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach. These laws are not consistent, and compliance in the event of a widespread data breach may be difficult and costly.
For example, 17 Table of Contents laws in all 50 U.S. states may require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach. These laws are not consistent, and compliance in the event of a widespread data breach may be difficult and costly.
Non-U.S. Privacy Laws In Canada, the Personal Information Protection and Electronic Documents Act, or PIPEDA, and various provincial laws require that companies give detailed privacy notices to consumers, obtain consent to use personal information, with limited exceptions, allow individuals to access and correct their personal information, and report certain data breaches.
Non-U.S. Privacy Laws In Canada, the Personal Information Protection and Electronic Documents Act (“PIPEDA”), and various provincial laws require that companies give detailed privacy notices to consumers, obtain consent to use personal information, with limited exceptions, allow individuals to access and correct their personal information, and report certain data breaches.
While we do not expect the Court’s decision to have a significant impact on our business, other new or revised taxes and, in particular, sales taxes, VAT and similar taxes could increase the cost of doing business online and decrease the attractiveness of selling products over the internet.
While we do not expect the Court’s decision to have a significant impact on our business, other new or revised taxes and, in particular, sales taxes, VAT and similar taxes could increase the cost of doing business online and 23 Table of Contents decrease the attractiveness of selling products over the internet.
The terms of Holdings’ or its subsidiaries’ current and future debt instruments or other agreements may restrict the ability of Holdings to make distributions to Solo Brands, Inc. or of Holdings’ subsidiaries to make distributions to Holdings.
The terms of Newco’s, Holdings’ or its subsidiaries’ current and future debt instruments or other agreements may restrict the ability of Newco to make distributions to Solo Brands, Inc. or of Holdings or its subsidiaries to make distributions to Newco.
Any significant failure, inadequacy, interruption or data security incident of our information technology systems, or those of our third-party service providers, could disrupt our business operations, which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.
Any significant failure, inadequacy, interruption or data security incident involving our information technology systems or data, or that of our third-party service providers, could disrupt our business operations, which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.
If we do not successfully manage our current initiatives and restructuring activities, expected efficiencies and benefits might be delayed or not realized, and our business, financial condition, and results of operations may be materially adversely affected. Our limited liquidity poses additional risks to our business and operations.
If we do not successfully manage our ongoing or future initiatives and restructuring activities, expected efficiencies and benefits might be delayed or not realized, and our business, financial condition, and results of operations may be materially adversely affected. Our limited liquidity poses additional risks to our business and operations.
We currently have a number of manufacturing partners located in various locations, including China, India, Vietnam, Cambodia, United States and Mexico. The majority of our fire pits, our highest grossing product, are currently made by two manufacturers in China, with additional limited production in China, India and Vietnam.
We currently have a number of manufacturing partners located in various locations, including China, India, Vietnam, Cambodia, United States and Mexico. The majority of our fire pits, our highest grossing product, are currently made in China, with additional limited production in Vietnam and Cambodia.
The success of our new and enhanced products depends on many factors, including anticipating consumer preferences, finding innovative solutions to consumer problems, differentiating our products from those of our competitors, and maintaining the strength of our brand while also expanding our brand beyond the categories of products we currently sell.
The success of these products depends on many factors, including anticipating consumer preferences, finding innovative solutions to consumer problems, differentiating our products from those of our competitors, and maintaining the strength of our brand while also expanding our brand beyond the categories of products we currently sell.
There are significant costs and risks inherent in selling our products in international markets, including: (a) failure to effectively establish our core brand identity; (b) increased employment costs; (c) increased shipping and distribution costs, which could increase our expenses and reduce our margins; (d) potentially lower margins in some regions; (e) longer collection cycles in some regions; (f) increased competition from local providers of similar products; (g) compliance with foreign laws and regulations, including taxes and duties, laws governing the marketing and use of e-commerce websites and enhanced data privacy laws and security, rules, and regulations; (h) establishing and maintaining effective internal controls at foreign locations and the associated increased costs; (i) increased counterfeiting and the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; (j) compliance with anti-bribery, anti-corruption, sanctions and anti-money laundering laws, such as the FCPA, the Bribery Act, and OFAC regulations, by us, our employees, and our business partners; (k) currency exchange rate fluctuations and related effects on our results of operations; (l) economic weakness, including inflation, or political instability in foreign economies and markets; (m) compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; (n) workforce uncertainty in countries where labor unrest is more common than in the United States; (o) business interruptions resulting from geopolitical actions, including war and terrorism, such as the recent wars between Russia and Ukraine and between Israel and surrounding areas, or natural disasters, including earthquakes, typhoons, floods, fires, and public health issues, including the outbreak of a pandemic or contagious disease, or xenophobia resulting therefrom; (p) the imposition of tariffs on products that we import into international markets that could make such products more expensive compared to those of our competitors; (q) our ability to expand internationally could be impacted by the intellectual property rights of third parties that conflict with or are superior to ours; (r) difficulty developing retail relationships; and (s) other costs and risks of doing business internationally.
There are significant costs and risks inherent in selling our products in international markets, including: (a) failure to effectively establish our core brand identity; (b) increased employment costs; (c) increased shipping and distribution costs, which could increase our expenses and reduce our margins; (d) potentially lower margins in some regions; (e) longer collection cycles in some regions; (f) increased competition from local providers of similar products; (g) compliance with foreign laws and regulations, including taxes and duties, laws governing the marketing and use of e-commerce websites and enhanced data privacy laws and security, rules, and regulations; (h) establishing and maintaining effective internal controls at foreign locations and the associated increased costs; (i) increased counterfeiting and other challenges involving intellectual property rights; (j) compliance with anti-bribery, anti-corruption, sanctions, export controls, and anti-money laundering laws, such as the FCPA, the Bribery Act, and OFAC regulations, by us, our employees, and our business partners; (k) currency exchange rate fluctuations and related effects on our results of operations; (l) economic weakness, including inflation, or political instability in foreign economies and markets; (m) compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; (n) workforce uncertainty in countries where labor unrest is more common than in the United States; (o) business interruptions resulting from geopolitical actions, including war and terrorism, such as the recent wars between Russia and Ukraine and between Israel and surrounding areas, or natural disasters, including earthquakes, typhoons, floods, fires, and public health issues; (p) the imposition of tariffs on products that we import into international markets that could make such products more expensive compared to those of our competitors; (q) our ability to sustain performance internationally could be impacted by the intellectual property rights of third parties that conflict with or are superior to ours; (r) difficulty developing retail relationships; and (r) other costs and risks of doing business internationally.
The actual amounts payable under the Tax Receivable will be determined in part by reference to the market value of our Class A common stock at the time of the sale and the prevailing tax rates applicable to us over the life of the tax receivable agreement and will generally be dependent on us generating sufficient future taxable income to realize the benefit.
The actual amounts payable under the Tax Receivable Agreement will be determined in part by reference to the market value of our Class A common stock at the time of the prior redemptions and exchanges and the prevailing tax rates applicable to us over the life of the Tax Receivable Agreement and will generally be dependent on us generating sufficient future taxable income to realize the benefit.
The threat of our debt being accelerated in connection with a change of control could also make it more difficult for us to attract potential buyers or to consummate a change of control transaction that would otherwise be beneficial to our stockholders.
The threat of our debt being accelerated in connection with a change of control also makes it more difficult for us to attract potential buyers or to consummate a change of control transaction that could otherwise be beneficial to our stockholders.
Information Technology Dependencies We increasingly rely on information technology systems to market and sell our products, process, transmit and store electronic and financial information, manage a variety of business processes and activities and comply with regulatory, legal and tax requirements.
Information Technology Dependencies We increasingly rely on information technology systems to market and sell our products, process, transmit and store electronic, personal, financial, and other confidential information, manage a variety of business processes and activities and comply with regulatory, legal and tax requirements.
As such, Solo Brands, Inc. has no independent means of generating revenue or cash flow, and its ability to pay taxes and operating expenses or declare and pay dividends in the future, if any, is dependent upon the financial results and cash flows of Holdings and its subsidiaries, and distributions Solo Brands, Inc. receives from Holdings.
As such, Solo Brands, Inc. has no independent means of generating revenue or cash flow, and its ability to pay taxes and operating expenses or declare and pay dividends in the future, if any, is dependent upon the financial results and cash flows of Holdings and its subsidiaries, and distributions Solo Brands, Inc. receives from Holdings through Holdings’ distributions to Newco and Newco’s distributions to Solo Brands, Inc.
In the European Economic Area (the “EEA”), we are subject to the GDPR and in the United Kingdom, or UK, we are subject to the UK GDPR, in each case in relation to our collection, control, processing, sharing, international transfers, disclosure and other use of personal data.
In the European Economic Area (the “EEA”), we are subject to the GDPR and in the UK, we are subject to the UK GDPR, in each case in relation to our collection, control, processing, sharing, international transfers, disclosure and other use of personal data.
Other risks related to our limited liquidity and any mitigating strategies include, but are not limited to, the high costs of negotiating agreements and seeking and executing liquidity initiatives; our ability to maintain our relationships with our suppliers, service providers, customers, and other third parties; our ability to retain and attract employees; and our ability to maintain contracts that are critical to our operations.
Other risks include, but are not limited to, the high costs of negotiating agreements and seeking and executing liquidity initiatives; our ability to maintain our relationships with our suppliers, service providers, customers, and other third parties; our ability to retain and attract employees; and our ability to maintain contracts that are critical to our operations.
If our goodwill, other intangible assets, or fixed assets become impaired, we may be required to record a charge to our earnings. We have in the past and may be required to record future impairments of goodwill, other intangible assets, or fixed assets to the extent the fair value of these assets falls below their book value.
If our goodwill or long-lived assets, to include our intangible assets, become impaired, we may be required to record a charge to our earnings. We have in the past recorded and may be required to record future impairments of goodwill, other intangible assets, or fixed assets to the extent the fair value of these assets falls below their book value.
The Revolving Credit Facility also places certain limitations on our ability to enter into certain types of transactions, financing arrangements and investments, to make certain changes to our capital structure, and to guarantee certain indebtedness, among other things. The Revolving Credit Facility also places certain restrictions on the payment of dividends and distributions and certain management fees.
The Amended Credit Agreement also places certain limitations on our ability to enter into certain types of transactions, financing arrangements and investments, to make certain changes to our capital structure, and to guarantee certain indebtedness, among other things. The Amended Credit Agreement also places certain restrictions on the payment of dividends and distributions and certain management fees.
If the debt under the Revolving Credit Facility were to be accelerated, we would not have sufficient cash or may not be able to sell sufficient collateral to repay this debt, which would immediately and materially harm our business, results of operations, and financial condition.
If the debt under the Amended Credit Agreement were to be accelerated, we would not have sufficient cash or may not be able to sell sufficient collateral to repay this debt, which would immediately and materially harm our business, results of operations, and financial condition.
Under the Tax Receivable Agreement, Solo Brands, Inc. generally will be required to make cash payments to the Continuing LLC Owners equal to 85% of the tax benefits, if any, that Solo Brands, Inc. actually realizes, or in certain circumstances is deemed to realize, as a result of (1) increases in Solo Brands, Inc.’s proportionate share of the tax basis of the assets of Holdings resulting from (a) any future redemptions or exchanges of LLC Interests by the Continuing LLC Owners for Solo Brands, Inc.
Under the Tax Receivable Agreement, Solo Brands, Inc. generally is required to make cash payments to the TRA Participants equal to 85% of the tax benefits, if any, that Solo Brands, Inc. actually realizes, or in certain circumstances is deemed to realize, as a result of (1) increases in Solo Brands, Inc.’s proportionate share of the tax basis of the assets of Holdings resulting from prior redemptions or exchanges of LLC Interests by the Prior Continuing LLC Owners for Solo Brands, Inc.
If we do not meet our stakeholders’ expectations or we are not effective in addressing social and environmental responsibility matters or achieving relevant sustainability goals, or choose to modify or terminate certain sustainability goals or other ESG practices, trust in our brand may suffer and our business and/or our ability to access capital could be harmed.
If we do not meet, or are 28 Table of Contents perceived not to meet, our stakeholders’ expectations or we are not effective in addressing social and environmental responsibility matters or achieving relevant sustainability goals, or choose to modify or terminate certain sustainability goals or other ESG practices, trust in our brand may suffer and our business and/or our ability to access capital could be harmed.
The growing use of social and digital media by us, our consumers and third parties increases the speed and extent that information or misinformation and opinions can be shared. Negative publicity about us, our brand or our products on social or digital media could seriously damage our brand and reputation.
The growing use of social and digital media increases the speed and extent that information or misinformation and opinions can be shared. Negative publicity about us, our brand or our products on social or digital media could seriously damage our brand and reputation.
If we are unable to successfully design, develop and introduce new products, our business will be harmed. Solo Stove made up the majority of our total revenue in the year ended December 31, 2024.
If we are unable to successfully design, develop and introduce new products, our business will be harmed. The Solo Stove and Chubbies segments made up the majority of our total revenue in the year ended December 31, 2025.
Any losses that we may suffer from product liability claims, and the effect that any product liability litigation may have upon the reputation and marketability of our products, may have a negative impact on our business, financial condition or results of operations. 25 Table of Contents Risks Related to Our Organizational Structure and the Tax Receivable Agreement Solo Brands, Inc.’s sole material asset is its interest in Holdings, and, accordingly, it will depend on distributions from Holdings to pay its taxes and expenses, including payments under the Tax Receivable Agreement.
Any losses that we may suffer from product liability claims, and the effect that any product liability litigation may have upon the reputation and marketability of our products, may have a negative impact on our business, financial condition or results of operations. 22 Table of Contents Risks Related to Our Organizational Structure and the Tax Receivable Agreement Solo Brands, Inc.’s principal asset is its indirect interest in Holdings, and, accordingly, it will depend on distributions from its subsidiaries (including Holdings and Newco) to pay its taxes and expenses, including payments under the Tax Receivable Agreement.
We have entered into the Registration Rights Agreement with the Original LLC Owners, certain of our other stockholders and Holdings pursuant to which the shares of Class A common stock issued upon redemption or exchange of LLC Interests held by the Continuing LLC Owners and the shares of Class A common stock issued to the Former LLC Owners in connection with the Reorganization Transactions are eligible for resale, subject to certain limitations set forth therein.
We have entered into the Registration Rights Agreement with the Original LLC Owners, certain of our other stockholders and Holdings pursuant to which certain shares of Class A common stock held by the Prior Continuing LLC Owners and the shares of Class A common stock issued to the Former LLC Owners in connection with the Reorganization Transactions are eligible for resale, subject to certain limitations set forth therein.
The failure of any manufacturer to perform to our expectations could result in 14 Table of Contents supply shortages or delays for certain products and harm our business.
The failure of any manufacturer to perform to our expectations could result in supply shortages or delays for certain products and harm our business.
U.S. Privacy Laws Domestic privacy and data security laws are complex and changing rapidly. Within the United States, many states are considering adopting, or have already adopted, privacy regulations.
U.S. Privacy Laws Domestic privacy and data security laws are complex and changing rapidly. Within the United States, many states have enacted, or are considering adopting, privacy laws and regulations.
However, these provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
However, these provisions would not apply to suits brought to enforce a duty or liability created by the Exchange 27 Table of Contents Act or any other claim for which the federal courts have exclusive jurisdiction.
We may experience difficulties as we continue to implement changes to our business and related policies and procedures to keep pace with our development and, if our operations resume growth, in managing such growth and building the appropriate processes and controls in the future.
We may experience difficulties as we continue to implement changes to keep pace with our development and, if our operations resume growth, in managing such growth and building the appropriate processes and controls in the future.
As a manufacturer and distributor of consumer products, we are subject to the U.S. Consumer Products Safety Act of 1972, as amended by the Consumer Product Safety Improvement Act of 2008, which empowers the U.S. Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous, and similar laws under foreign jurisdictions.
Consumer Products Safety Act of 1972, as amended by the Consumer Product Safety Improvement Act of 2008, which empowers the U.S. Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous, and similar laws under foreign jurisdictions.
Private parties are also seeking to limit the ability to monitor and market customer behavior. Those increased limitations may also impact marketing techniques and effectiveness. We rely significantly on the use of information technology, as well as those of our third party service providers.
Private parties are also seeking to limit the ability to monitor and market customer behavior. Those increased limitations may also impact marketing techniques and effectiveness. We rely significantly on the use of information technology and data, including that of our third-party service providers.
Moreover, while we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot assure you that our insurance will be adequate to cover financial, legal, business, or reputational losses, costs, and liabilities related to these incidents.
Moreover, while we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot assure you that our insurance will be adequate to cover financial, legal, business, or reputational losses, costs, and liabilities related to these incidents, or will be available to us in the future.
Violations of the FCPA, the Bribery Act, OFAC restrictions, or other sanctions, export control, anti-corruption, anti-money laundering, and anti-terrorism laws, or allegations of such acts, could damage our reputation and subject us to civil or criminal investigations in the United States and in 11 Table of Contents other jurisdictions and related shareholder lawsuits, could lead to substantial civil and criminal, monetary and nonmonetary penalties and could cause us to incur significant legal and investigatory fees, which could harm our business, financial condition, cash flows, and results of operations.
Violations of sanctions, export control, anti-corruption, anti-money laundering, and anti-terrorism laws, or allegations of such acts, could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions and related shareholder lawsuits, could lead to substantial civil and criminal, monetary and nonmonetary penalties and could cause us to incur significant legal and investigatory fees, which could harm our business, financial condition, cash flows and results of operations.
Additionally, even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company if the market value of our common stock held by non-affiliates is below $250 million (or $700 million if our annual revenue is less than $100 million) as of December 31 in any given year, which would allow us to continue taking advantage of certain of these exemptions.
Additionally, even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company if the market value of our common stock held by non-affiliates is below $250 million (or $700 million if our annual revenue is less than $100 million) as of the last business day of our second fiscal quarter in any given year, which would allow us to continue taking advantage of certain of these exemptions.
We have made substantial investments in these areas in order to maintain and enhance our brand and these experiences, but such investments are not always successful. Any negative publicity, regardless of its accuracy, could materially adversely affect our business.
We have made substantial investments in these areas, and will need to continue to invest in these actions, in order to maintain and enhance our brand and these experiences, but such investments are not always successful. Any negative publicity, regardless of its accuracy, could materially adversely affect our business.
Any payments made by Solo Brands, Inc. to the Continuing LLC Owners under the Tax Receivable Agreement will not be available for reinvestment in the business and will generally reduce the amount of cash that might have otherwise been available to Solo Brands, Inc. and its subsidiaries.
Any payments made by Solo Brands, Inc. to the TRA Participants under the Tax Receivable Agreement will not be available for reinvestment in the business and will generally reduce the amount of cash that might have otherwise been available to Solo Brands, Inc. and its subsidiaries.
We may be subject to liability if we infringe upon the intellectual property rights of third parties and have increased costs protecting our intellectual property rights. Third parties may sue us for alleged infringement of their intellectual property rights.
We may be subject to liability if we infringe upon the intellectual property rights of third parties and have incurred and may continue to incur costs protecting our intellectual property rights. Third parties may sue us for alleged infringement of their intellectual property rights.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company aims to regularly assess and update its processes, procedures and management techniques in light of ongoing cybersecurity developments. 35 Table of Contents Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal IRT personnel; threat intelligence and other information obtained from governmental, public or private sources; and alerts and reports produced by security tools deployed in our internal IT environment Recognizing the complexity and evolving nature of cybersecurity threats, the Company also engages with a range of external experts, including cybersecurity assessors and consultants in evaluating and testing its cybersecurity management systems and IRP, including its use of third-party service providers.
Biggest changeOur management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal IRT personnel; threat intelligence and other information obtained from governmental, public or private sources; and alerts and reports produced by security tools deployed in our internal IT environment.
The Board also receives briefings from the CISO and ISOC members on our cyber risk management program. Board members receive presentations on cybersecurity topics from our CISO, internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies. The ISOC, is responsible for assessing and managing our material risks from cybersecurity threats.
The Board also receives briefings from the CIO or ISOC members on our cyber risk management program. Board members receive presentations on cybersecurity topics from our CIO, internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies. The ISOC is responsible for assessing and managing our material risks from cybersecurity threats.
The Board oversees management’s implementation of our cybersecurity risk management program. The Board receives periodic reports from the CISO on our cybersecurity risks. In addition, the CISO and ISOC members update the Board, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant.
The Board oversees management’s implementation of our cybersecurity risk management program. The Board receives periodic reports from the CIO on our cybersecurity risks. In addition, the CIO and ISOC members update the Board, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant.
Any significant failure, inadequacy, interruption or data security incident of our information technology systems, or those of our third-party service providers, could disrupt our business operations, which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.” Governance Our Board considers cybersecurity risk as part of its risk oversight function.
Any significant failure, inadequacy, interruption or data security incident involving our information technology systems or data, or that of our third-party service providers, could disrupt our business operations, which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.” Governance Our Board considers cybersecurity risk as part of its risk oversight function.
The IRP is designed to maximize the effectiveness of the Company’s response through an established plan of action and assigning responsibilities to appropriate personnel and/or third-party contractors.
The IRP is designed to guide the Company’s response through an established plan of action and assigning responsibilities to appropriate personnel and/or third-party contractors.
For more information on how cybersecurity risk could materially affect the Company’s business strategy, results of operations, or financial condition, please refer to “Item 1A Risk Factors—Risks Related to our Business and Industry—We rely significantly on the use of information technology, as well as those of our third-party service providers.
For more information on how cybersecurity risk could materially affect the Company’s business strategy, results of operations, or financial condition, please refer to “Item 1A Risk Factors—Risks Related to our Business and Industry—We rely significantly on the use of information technology and data, including that of our third-party service providers.
Prior to The Container Store, he worked at Pier 1 Imports, Inc., which saw him in diverse senior leadership positions, notably as VP of Technology with a strategic focus on IT, Ecommerce, and Business Development.
Prior to The Container Store, he worked at Pier 1 Imports, Inc., where he served in diverse senior leadership positions, notably as VP of Technology with a strategic focus on IT, Ecommerce, and Business Development.
The Company has developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. The Company designs and assesses the program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF.
The Company has developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. The Company designs and assesses the program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).
The Company has also established an Incident Response Team (“IRT”), which is a subset of the ISOC, and maintains an Incident Response Plan (“IRP”), the purpose of which is to respond to cybersecurity incidents. The IRT assesses the risks and impacts of cybersecurity incidents and creates and manages action plans for each specific cybersecurity incident.
The Company has also established an Incident Response Team (“IRT”), which is a subset of the ISOC, and maintains an Incident Response Plan (“IRP”), the purpose of which is to respond to cybersecurity incidents. The IRT assesses the risks and impacts of cybersecurity incidents.
As part of its overall risk management framework, the Company maintains an Information Security Oversight Committee (“ISOC”) which is responsible for overseeing company-wide cybersecurity strategy, architecture and policies. The Company’s ISOC is chaired by its Chief Information Security Officer (the “CISO”), who reports to our Chief Information Officer, who is also a member of ISOC.
As part of its overall risk management framework, the Company maintains an Information Security Oversight Committee (“ISOC”) which is responsible for overseeing company-wide cybersecurity strategy, architecture and policies. The Company’s ISOC is chaired by its Chief Information Officer (the “CIO”).
To date, we have not identified risks from cybersecurity threats or incidents, including as a result of any previous cybersecurity incidents, that have materially affected the Company or are reasonably likely to materially affect our operations, business strategy, results of operations or financial condition.
The Company’s collaboration with these third parties includes consultation and review of security enhancements. 29 Table of Contents To date, we have not identified risks from cybersecurity threats or incidents, including as a result of any previous cybersecurity incidents, that have materially affected the Company or are reasonably likely to materially affect our operations, business strategy, results of operations or financial condition.
These partnerships enable the Company to leverage specialized knowledge and insights and to assist in updating its cybersecurity strategies and processes to align with industry best practices. The Company’s collaboration with these third parties includes consultation and review of security enhancements.
These partnerships enable the Company to leverage specialized knowledge and insights and to assist in updating its cybersecurity strategies and processes.
Removed
The IRP contemplates that if a cybersecurity threat or incident is identified, the IRT would communicate the cybersecurity threat or incident and any damages to the CISO and other members of senior management of the Company.
Added
The Company aims to regularly assess and update its processes, procedures and management techniques in light of ongoing cybersecurity developments.
Removed
The Company then would assess the materiality of the cybersecurity threat or incident to determine if any public disclosures are required under the SEC’s cybersecurity disclosure rule. If deemed necessary, third-party consultants, legal counsel and assessors would be engaged to evaluate the materiality assessment.
Added
Recognizing the complexity and evolving nature of cybersecurity threats, the Company also engages with a range of external experts, including cybersecurity assessors and consultants in evaluating and testing its cybersecurity management systems and IRP, including evaluating cybersecurity threats associated with our use of key third-party service providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are located in a 430,000 square foot leased facility in Grapevine, Texas, which is used by both of our reportable segments. In addition to our corporate headquarters, the Solo Stove segment maintains leases in Texas, Utah, Pennsylvania, Mexico, Canada, and the Netherlands for warehousing, distribution and office space.
Biggest changeItem 2. Properties Our corporate headquarters are located in a 430,000 square foot leased facility in Grapevine, Texas, which is used by both of our reportable segments. In addition to our corporate headquarters, the Solo Stove segment maintains leases in Texas, Utah, Pennsylvania, Canada, and the Netherlands for warehousing, distribution and office space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe results of any current or future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, reputational harm and other factors. The Company is not currently a party to any pending litigation that the Company considers material.
Biggest changeThe results of any current or future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, reputational harm and other factors.
Removed
Item 4. Mine Safety Disclosures Not applicable. 36 Table of Contents PART II
Added
Other than the below, the Company is not currently a party to any pending litigation that the Company considers material. In January 2026, the Company filed a lawsuit in the U.S. Court of International Trade (“CIT”) challenging the legality of incremental tariffs and seeking a refund of incremental tariffs paid by the Company.
Added
To facilitate the administration of new cases that continue to be filed challenging the imposition of tariffs, the case was stayed pending the final outcome of V.O.S. Selections, Inc. v. United States (“V.O.S”), which held that the International Emergency Economic Powers Act (“IEEPA”) does not authorize a U.S. President to impose tariffs, and the CIT’s determination of further proceedings.
Added
On February 20, 2026, the U.S. Supreme Court issued its decision in Learning Resources, Inc. v. Trump (“Learning Resources”) holding that the IEEPA does not authorize a U.S. President to impose tariffs and that the challenge to the legality of the incremental tariffs was within the exclusive jurisdiction of the CIT, thus affirming the decision in V.O.S.
Added
Therefore, the outcome of the Company’s lawsuit at the CIT may determine our ability to recover the approximately $8 million in incremental tariffs that we paid in 2025, in addition to the incremental tariffs we have paid in 2026. Item 4. Mine Safety Disclosures Not applicable. 30 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeBase Period Company/Index 10/28/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Solo Brands, Inc. $ 100.00 $ 91.94 $ 23.80 $ 36.24 $ 6.71 S&P 500 Index 100.00 103.69 80.56 103.77 127.96 S&P 500 Apparel, Accessories & Luxury Goods Index $ 100.00 $ 99.33 $ 54.64 $ 52.44 $ 48.58 The performance graph and table shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act. 37 Table of Contents Unregistered Sales of Equity Securities None.
Biggest changeBase Period December 31, Company/Index 10/28/2021 2021 2022 2023 2024 2025 Solo Brands, Inc. $ 100.00 $ 91.94 $ 23.80 $ 36.24 $ 6.71 $ 0.89 S&P 500 Index 100.00 103.69 80.56 103.77 127.96 148.93 S&P 500 Apparel, Accessories & Luxury Goods Index 100.00 99.33 54.64 52.44 48.58 47.60 The performance graph and table shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act. 31 Table of Contents Unregistered Sales of Equity Securities Other than as previously reported and the issuances of Class A common stock upon redemption of LLC interests consistent with the Company’s prior disclosure, there have been no unregistered sales of equity securities during the period covered by this report.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers We did not repurchase any of our equity securities during the quarter ended December 31, 2024. Item 6. [Reserved] 38 Table of Contents
Purchases of Equity Securities by the Issuer or Affiliated Purchasers We did not repurchase any of our equity securities during the quarter ended December 31, 2025. Item 6. [Reserved] 32 Table of Contents
This does not include the significant number of beneficial owners whose stock is in nominee or “street name” accounts through brokers, bank, or other nominees. Dividend Policy We have not declared or paid any cash dividends on our common stock. We intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
As of March 16, 2026, there were approximately 40 shareholders of record for our Class A common stock. This does not include the significant number of beneficial owners whose stock is in nominee or “street name” accounts through brokers, bank, or other nominees. Dividend Policy We have not declared or paid any cash dividends on our common stock.
Removed
There is no established trading market for our Class B common stock. As of March 10, 2025, other than shares offered to the public, there were approximately 9 shareholders of record for our Class A common stock and approximately 54 shareholders of record for our Class B common stock.
Added
In connection with the resumption of trading on the NYSE following a trading suspension, our ticker symbol changed to “SBDS” from “DTC” effective July 24, 2025. As described in Item 1, Business – Merger Agreement, we no longer have any outstanding shares of Class B common stock.
Added
We intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSolo Stove Segment Results for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Solo Stove Net Sales Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Net sales $ 297,379 $ 351,583 $ (54,204) (15.4) % Direct-to-consumer net sales 220,552 264,655 (44,103) (16.7) % Retail net sales 76,827 86,928 (10,101) (11.6) % The decrease in net sales for the year ended December 31, 2024 compared to the year ended December 31, 2023 was driven by declines in both DTC and retail channel net sales.
Biggest changeSolo Stove Segment Results for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Solo Stove Net Sales Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Net sales $ 167,220 $ 297,379 $ (130,159) (43.8) % Direct-to-consumer net sales 124,303 220,552 (96,249) (43.6) % Retail net sales 42,917 76,827 (33,910) (44.1) % The decrease in both retail and DTC channel net sales for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by lower unit volumes in the DTC channel as a result of disciplined pricing and promotional actions, as well as reduced retail replenishment as partners worked through excess inventory. 38 Table of Contents Solo Stove Cost of Goods Sold Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Cost of goods sold $ 63,524 $ 113,977 $ (50,453) (44.3) % The decrease in cost of goods sold for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily in line with the decrease in net sales.
While our issuance of letters of credit does not increase our borrowings outstanding under the Revolving Credit Facility, it does reduce the amounts available under the Revolving Credit Facility.
While our issuance of letters of credit does not increase our borrowings outstanding under the 2025 Revolving Credit Facility, it does reduce the amounts available under the 2025 Revolving Credit Facility.
The actual amount of customer returns and rebates may differ from our estimates. We elected to account for shipping costs as fulfillment activities, and not as separate performance obligations. Net sales include shipping costs charged to the customer with the related shipping expense recognized in selling, general and administrative expenses when the revenue is recognized.
The actual amount of customer returns and rebates 42 Table of Contents may differ from our estimates. We elected to account for shipping costs as fulfillment activities, and not as separate performance obligations. Net sales include shipping costs charged to the customer with the related shipping expense recognized in selling, general & administrative expenses when the revenue is recognized.
Contractual Obligations Our material cash commitments from known contractual and other obligations primarily consist of obligations for long-term debt and related interest, leases for properties and equipment and purchase obligations as part of normal operations. See Note 12, Long-Term Debt, in Item 8 of this Annual Report for more information regarding scheduled maturities of our long-term debt.
Contractual Obligations Our material cash commitments from known contractual and other obligations primarily consist of obligations for long-term debt and related interest, leases for properties and equipment and purchase obligations as part of normal operations. See Note 13, Debt, net, in Item 8 of this Annual Report for more information regarding scheduled maturities of our long-term debt.
Sales taxes collected from customers are excluded from net sales, which are subsequently remitted to government authorities. 46 Table of Contents Inventory Inventories, consisting primarily of finished goods are recorded at the lower of cost or net realizable value. Cost is determined using an average costing method, calculated using the weighted average cost of historical purchases.
Sales taxes collected from customers are excluded from net sales, which are subsequently remitted to government authorities. Inventory Inventories, consisting primarily of finished goods are recorded at the lower of cost or net realizable value. Cost is determined using an average costing method, calculated using the weighted average cost of historical purchases.
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.
Any taxable income or loss generated by Holdings was passed through to and included in the taxable income or loss of its members, including us, on a pro rata basis.
We 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.
We operate as two reportable segments: Solo Stove, which includes the Solo Stove and TerraFlame brands and primarily offers indoor and outdoor fire pits, stoves, and accessories, and Chubbies, which offers premium casual apparel and activewear. The remaining operating segments are included within the Corporate and All Other category.
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.
Holdings was treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Holdings was not subject to U.S. federal and certain state and local income taxes.
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.
We have been subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to our allocable share of any taxable income or loss of Holdings, as well as any stand-alone income or loss generated by Solo Brands, Inc.
The increase in changes in working capital was coupled with an increase in cash usage of $38.2 million from changes in net income (loss) after non-cash adjustments, driven by a decline in our operations, primarily net sales, reflected through changes in net income (loss).
The increase in changes in working capital was coupled with an increase in cash usage of $26.4 million from changes in net income (loss) after non-cash adjustments, driven by a decline in our operations, primarily net sales, reflected through changes in net income (loss).
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.
Net sales within all 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.
We have recorded a valuation allowance against Solo Brands, Inc. and Oru’s deferred tax assets resulting from current losses, as discussed below, resulting in a net deferred tax asset the consolidated group. Solo Brands, Inc. evaluated and concluded that as of December 31, 2024, we had $19.1 million of valuation allowances.
We have recorded a valuation allowance against Solo Brands, Inc. and Oru’s deferred tax assets resulting from current losses resulting in a net deferred tax asset the consolidated group. Solo Brands, Inc. evaluated and concluded that as of December 31, 2025, we had $40.6 million of valuation allowances.
The future occurrence of a potential indicator of impairment could include matters such as: a decrease in expected net earnings, a further decline in equity market conditions, a decline in comparable market multiples, a continued and sustained decline in our common stock price, a significant adverse change in legal factors or the general business climate, an adverse action or assessment by a regulator, and a significant downturn in demand for products offered by us.
See Note 10, Goodwill, for further details regarding our goodwill balance and accumulated impairment losses. 43 Table of Contents The future occurrence of a potential indicator of impairment could include matters such as: a decrease in expected net earnings, a further decline in equity market conditions, a decline in comparable market multiples, a continued and sustained decline in our common stock price, a significant adverse change in legal factors or the general business climate, an adverse action or assessment by a regulator, and a significant downturn in demand for products offered by us.
This evaluation, undertaken over the course of 2024, led the Company to undertake the following activities during the second half of 2024: • termination of underperforming marketing agreements with marketing barter partners that no longer aligned with the Company’s current marketing strategy; • winding up of the IcyBreeze reporting unit stemming from underperformance and management’s determination to revise product designs; and • reorganizing the Oru and ISLE reporting units to eliminate costs and capitalize on potential synergies, through restructuring under a revised management structure.
This evaluation led the Company to undertake the following activities during the second half 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.
We fund our working capital, which is primarily comprised of inventory, accounts payable, and accounts receivable, net, and other cash requirements from cash flows from operating activities, cash on hand, and borrowings under our Revolving Credit Facility.
We fund our working capital, which is primarily comprised of inventory and accounts payable, and other cash requirements from cash flows from operating activities, cash on hand, and borrowings under our 2025 Revolving Credit Facility. Our cash flows from operating activities and borrowings under the 2025 Revolving Credit Facility are our principal sources of liquidity.
Partially offsetting these declines, the Chubbies segment experienced increases in both DTC and retail channel net sales. 40 Table of Contents 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.
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.
Our utilization of these transition periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act.
Our utilization of these transition periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act. We expect that we will no longer qualify as an emerging growth company as of December 31, 2026.
Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % (1) Gross profit 260,264 302,152 (41,888) (13.9) % Gross margin (Gross profit as a % of net sales) (1) 57.3 % 61.1 % (377) (1) Change in gross margin period over period in basis points In 2024, the Company wrote down $18.3 million of inventory and related purchase orders of the IcyBreeze reporting unit as part of the restructuring, contract termination and impairment charge activity.
Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % (1) Gross profit $ 188,080 $ 260,264 $ (72,184) (27.7) % Gross profit margin (Gross profit as a % of net sales) (1) 59.4 % 57.3 % 210 (1) Change in gross profit margin period over period in basis points In 2024, the Company wrote down $18.3 million of inventory and related purchase orders of the IcyBreeze reporting unit as part of the restructuring, contract termination and impairment charge activity.
For information regarding our other contractual obligations, see Note 12 - Long-Term Debt, Note 14 - Leases, and Note 2 - Significant Accounting Policies in Item 8 of this Annual Report.
See Note 15, Leases, in Item 8 of this Annual Report for additional information on leases. For information regarding our other contractual obligations, see Note 2 - Significant Accounting Policies in Item 8 of this Annual Report.
Market conditions can impact the viability of these institutions, and any inability to access or delay in accessing these funds could adversely affect our business and financial position. The table below reflects our sources, facilities and availability of liquidity as of December 31, 2024. See Note 12, Long-Term Debt in Item 8 of this Annual Report for additional information.
Market conditions can impact the viability of these institutions, and any inability to access or delay in accessing these funds could adversely affect our business and financial position. The table below reflects our sources, facilities and availability of liquidity as of December 31, 2025. See below for details on our outstanding debt balance as of December 31, 2025.
In conducting the impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. We currently operate as five reporting units.
In conducting the impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. We currently operate as four reporting units. As of our annual assessment date, October 1, 2025, we had one reporting unit with remaining goodwill, Chubbies.
Based on the results of the quantitative interim goodwill impairment test, the calculated fair value of the Chubbies reporting unit exceeded its book value by less than 10% as of September 30, 2024.
Based on the results of the annual quantitative impairment test of goodwill, the calculated fair value of the Chubbies reporting unit exceeded its book value by more than 10% as of December 31, 2025.
Our future product sales and our cash flows are difficult to predict, and actual sales may not be in line with our forecasts. We maintain the majority of our cash and cash equivalents in bank deposit and overnight sweep accounts with major highly rated multi-national and local financial institutions, and our deposits at these institutions exceed insured limits.
We maintain the majority of our cash and cash equivalents in bank deposit and overnight sweep accounts with major, highly-rated multi-national and local financial institutions, and our deposits at these institutions exceed insured limits.
While these activities are intended to provide future benefit to the Company, the majority of these activities required cash outlays in 2024. In order to fund these cash outlays, the Company leveraged cash from operations and draws on the Revolving Credit Facility (as defined below).
While these activities are intended to provide future benefit to the Company, most of these activities required up-front cash outlays. In order to fund these cash outlays, the Company used cash from operations and borrowings under the 2021 Revolving Credit Facility (as defined below) and the 2025 Revolving Credit Facility (as defined below).
JOBS Act We currently qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, we are provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies.
Accordingly, we are provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies.
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. • 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. • Depreciation and Amortization Expenses - Depreciation and amortization expenses consist of depreciation of property and equipment and amortization of definite-lived intangible assets. • Other Operating Expenses - Other operating expenses include certain costs incurred as a result of being a public company, secondary offering completed in May 2023, acquisition-related expenses, business optimization and expansion expenses and management transition costs.
Gross profit and Cost of goods sold, when considered with or without the impacts of the write down of inventory and purchase orders described above, decreased for the year ended December 31, 2025 compared to the prior year period, while gross profit margin increased when including the impact of the write down and decreased when excluding the impact. 36 Table of Contents Consolidated Operating Expenses Operating expenses consist of (1) selling, general & administrative (“SG&A”) expenses, (2) restructuring, contract termination and impairment charges, (3) depreciation and amortization expenses and (4) other operating expenses, as defined below. • Selling, General & Administrative (“SG&A”) Expenses - SG&A expenses consist primarily of marketing costs, wages, equity-based compensation expense, benefits costs, costs of our warehousing and logistics operations, costs of operating on third-party DTC marketplaces, professional fees and services, costs of shipping product to our customers and general corporate expenses. • 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. • Depreciation and Amortization Expenses - Depreciation and amortization expenses consist of depreciation of property and equipment and amortization of definite-lived intangible assets. • 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.
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.
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. In 2025, retail channel net sales were highest in the first and fourth quarters.
Recent Accounting Pronouncements For a description of recent accounting pronouncements, see “Recently Adopted Accounting Pronouncements” and “Recently Issued Accounting Standards—Not Yet Adopted” in Note 2, Significant Accounting Policies, in Item 8 of this Annual Report on Form 10-K.
Recent Accounting Pronouncements For a description of recent accounting pronouncements, see “Recently Adopted Accounting Pronouncements” and “Recently Issued Accounting Standards—Not Yet Adopted” in Note 2, Significant Accounting Policies, in Item 8 of this Annual Report on Form 10-K. JOBS Act We currently qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Chubbies Segment Results for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Chubbies Net Sales Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Net sales $ 112,713 $ 101,599 $ 11,114 10.9 % Direct-to-consumer net sales 57,824 56,405 1,419 2.5 % Retail net sales 54,889 45,194 9,695 21.5 % The increase in net sales for the year ended December 31, 2024 compared to the year ended December 31, 2023 was driven by increases realized in the Retail net sales channel as a result of continued growth within our retail strategic partnerships, coupled with the continued ability to identify and meet consumer demands within the DTC net sales channel, with both website and owned retail store performance exceeding the prior period.
Chubbies Segment Results for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Chubbies Net Sales Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Net sales $ 122,943 $ 112,713 $ 10,230 9.1 % Direct-to-consumer net sales 59,126 57,824 1,302 2.3 % Retail net sales 63,817 54,889 8,928 16.3 % The increase in net sales for the year ended December 31, 2025 compared to the year ended December 31, 2024 was driven by increases in the retail net sales channel as a result of continued growth within our retail strategic partnerships, coupled with the continued ability to identify and meet consumer demands within the DTC net sales channel.
See Note 9, Intangible Assets, net in Item 8 of this Annual Report, for further details regarding intangible asset balances and related accumulated amortization and impairment losses.
Impairment charges related to intangible assets are recorded to restructuring, contract termination and impairment charges on the consolidated statements of operations and comprehensive income (loss). See Note 9, Intangible Assets, net in Item 8 of this Annual Report on Form 10-K, for further details regarding intangible asset balances and related accumulated amortization and impairment losses.
During this same period of comparison, gross margin remained relatively flat, in line with the decrease in net sales. Solo Stove Segment Operating Expenses Segment operating expenses consist of (1) marketing expenses, (2) employee related expenses, such as wages and benefits, and (3) other segment operating expenses, which primarily consist of shipping and fulfillment related expenses.
Solo Stove Operating Expenses Segment operating expenses consist of (1) marketing expenses, (2) employee related expenses, such as wages and benefits, and (3) other operating expenses, which primarily consist of shipping and fulfillment related expenses.
If these assets were for sale, our estimates of their values could be significantly different because of market conditions, specific transaction terms and a buyer's perspective on future cash flows. Impairment charges related to intangible assets are recorded to restructuring, contract termination and impairment charges on the consolidated statements of operations and comprehensive income (loss).
Future changes in the judgments, assumptions and estimates that are used in the impairment testing for intangibles could result in significantly different estimates of fair value. If these assets were for sale, our estimates of their values could be significantly different because of market conditions, specific transaction terms and a buyer’s perspective on future cash flows.
These declines driven by the Solo Stove segment were offset in part by increases within the Chubbies segment in both the retail and DTC net sales channels, primarily driven by continued growth within our retail strategic partnerships.
The decline in net sales was primarily driven by the decline in DTC and retail channel net sales within the Solo Stove segment, offset in part by an increase in net sales across both channels within the Chubbies segment.
As so amended, the Revolving Credit Facility allows us to borrow up to $350.0 million of revolving loans, including the ability to issue up to $20.0 million in letters of credit, with $1.4 million of letters of credit issued and outstanding as of December 31, 2024.
The 2025 Revolving Credit Facility also includes the ability to issue up to $20 million in letters of credit, with $3.7 million of letters of credit issued and outstanding as of December 31, 2025.
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, state and 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.
Interest rates under the 2025 Refinancing Agreement (as defined below) are higher than those under our prior credit facilities. Consolidated Income Taxes Income taxes represent federal, state, and local income taxes on our allocable share of taxable income of Holdings, as well as Oru’s and Chubbies’ federal and state taxable income, and our foreign tax expense related to international subsidiaries.
Discussion within the relevant comparative periods and sections have been included below. Consolidated Results for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Consolidated Net Sales Net sales are comprised of DTC and retail channel sales to retail partners.
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. 35 Table of Contents Consolidated Results for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Consolidated Net Sales Net sales are comprised of DTC and retail channel sales to retail partners.
Chubbies Goodwill as of September 30, 2024 $ 73,119 Sensitivity analysis, approximate hypothetical impairment charge: Discount rate increase of 150 BPS (1,383) EBITDA margin decrease of 175 BPS (1,383) Revenue growth rate decrease of 400 BPS (383) Intangible Assets We evaluate the carrying value of definite-lived intangible assets whenever a change in circumstances indicates that the net carrying value may not be recoverable from the undiscounted future cash flows from operations.
Intangible Assets We evaluate the carrying value of definite-lived intangible assets whenever a change in circumstances indicates that the net carrying value may not be recoverable from the undiscounted future cash flows from operations.
Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Interest expense, net $ 14,004 $ 11,004 $ 3,000 27.3 % Interest expense, net increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to an increase in the weighted average interest rate on our total debt balance, as well as a higher average debt balance in 2024 when compared to the prior year.
Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Interest expense, net $ 26,560 $ 14,004 $ 12,556 89.7 % Interest expense, net increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 as a result of a higher average debt balance and higher average interest rates.
Investing activities The $38.6 million decrease in cash used in investing activities, was primarily driven by the $34.6 million decrease in cash used in acquisition activity in 2024, compared to the prior year with the 2023 acquisitions, partially offset by an increase in capital expenditures in 2024, primarily related to the addition of seven owned retail stores within our Chubbies segment in 2024.
Investing activities The $2.5 million decrease in cash used in investing activities, was primarily due to a decline in the number of retail store openings within our Chubbies Segment in the current year when compared to the prior, with just one store opening in 2025 and seven store openings in 2024, offset in part by an increase in the capitalization of software in 2025, primarily driven by an increase in capital projects in 2025 compared to 2024.
Liquidity and Capital Resources Historically, our cash requirements have principally been for working capital purposes and acquisitions. We expect these needs to continue as we seek to develop and grow our business.
Liquidity and Capital Resources Our cash requirements are for working capital, payment of restructuring and other fees and repayment of our current and long-term debt obligations. We expect these and other cash needs to continue as we seek to improve, develop and transform our business.
For additional information, see Part I, Item 1A, Risk Factors, “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.” Current macroeconomic factors remain very dynamic, such as greater political uncertainty, as well as financial instability, new or increasing tariffs, high interest rates and high inflation, all of which could reduce our net sales or negatively impact our gross margin, net loss and cash flows.
Risk Factors, “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.” 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.
The CODM makes operating decisions, assesses financial performance, and allocates resources based upon discrete financial information at the reportable segment level. For the year ended December 31, 2024, we experienced a decrease in our net sales from $494.8 million for the year ended December 31, 2023 to $454.6 million.
For the year ended December 31, 2025, we experienced a decrease in our net sales from $454.6 million for the year ended December 31, 2024 to $316.6 million.
Therefore, a 150 basis point (“BPS”) increase in the discount rate, a 175 BPS decrease in the EBITDA margin or a 400 BPS decrease in revenue growth would indicate a potential hypothetical impairment charge for this reporting unit for the amounts reflected in the chart below.
However, a 100 basis point (“BPS”) increase in the discount rate, a 200 BPS decrease in the EBITDA margin or a 200 BPS decrease in revenue growth could indicate a potential hypothetical fair value less than the reporting units carrying value.
These strategic consulting arrangements consisted primarily of engagements for brand and marketing strategy, product roadmap development, cost efficiency program design and information technology and finance transformations. 41 Table of Contents Consolidated Income (Loss) From Operations Income (loss) from operations is comprised of gross profit, less selling, general and administrative expenses, depreciation and amortization expense, restructuring, contract termination and impairment charges and other operating expenses.
See Note 22 - Variable Interest Entities for additional information regarding the partial disposition. Consolidated Income (Loss) From Operations Income (loss) from operations is comprised of gross profit, less selling, general & administrative expenses, depreciation and amortization expense, restructuring, contract termination and impairment charges and other operating expenses.
When excluding the write down of inventory and purchase orders described above, cost of goods sold decreased for the year ended December 31, 2024 compared to the prior year period, in line with the decline in net sales.
In line with the decline in net sales in 2025, purchase order activity and inventory receipts from our international suppliers was lower for the year ended December 31, 2025 when compared to the same period in 2024, further limiting the overall impact of tariffs in 2025.
During this same period of comparison, gross margin decreased slightly as a result of the growth in retail channel net sales. 43 Table of Contents Chubbies Segment Operating Expenses Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Segment operating expenses $ 51,193 $ 48,039 $ 3,154 6.6 % Marketing expenses 14,569 13,863 706 5.1 % Employee related compensation 13,833 10,942 2,891 26.4 % Other segment operating expenses 22,791 23,234 (443) (1.9) % The increase in segment operating expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by increases in employee related compensation, as a result of the increased headcount for the seven additional owned retail stores opened in 2024.
Chubbies Cost of Goods Sold Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % (1) Cost of goods sold $ 51,749 $ 45,707 $ 6,042 13.2 % The increase in cost of goods sold for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily in line with the increase in net sales. 39 Table of Contents Chubbies Operating Expenses Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Operating expenses $ 48,783 $ 51,193 $ (2,410) (4.7) % Marketing expenses 12,371 14,569 (2,198) (15.1) % Employee related compensation 12,910 13,833 (923) (6.7) % Other operating expenses 23,502 22,791 711 3.1 % Operating expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 declined, primarily as a result of reductions in marketing expenses and employee related expenses.
Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Operating expenses $ 434,882 $ 530,002 $ (95,120) (17.9) % Selling, general and administrative expenses 262,172 249,432 12,740 5.1 % Restructuring, Contract Termination and Impairment Charges 136,099 248,967 (112,868) (45.3) % Depreciation and amortization expenses 25,702 26,593 (891) (3.4) % Other operating expenses 10,909 5,010 5,899 117.7 % The decrease in operating expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by a decrease in restructuring, contract termination and impairment charges, as a result of fewer goodwill and long-lived asset impairment charges, offset in part by the increase in contract termination expenses with the termination of a legacy marketing agreement with a former marketing barter partner.
Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Operating expenses $ 301,563 $ 434,882 $ (133,319) (30.7) % Selling, general & administrative expenses 176,248 262,172 (85,924) (32.8) % Restructuring, Contract Termination and Impairment Charges 93,495 136,099 (42,604) (31.3) % Depreciation and amortization expenses 25,674 25,702 (28) (0.1) % Other operating expenses 6,146 10,909 (4,763) (43.7) % The decrease in operating expenses for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by a decrease in SG&A as a result of a significant decrease in advertising and marketing expenses, coupled with a decrease in distribution costs driven by the lower net sales in Solo Stove DTC channel.
Principal under the Revolving Credit Facility is not due until maturity. In addition to the above, the amendment on September 1, 2021 included a provision to borrow up to $100.0 million under the Term Loan. The proceeds from the Term Loan were used to fund the Chubbies acquisition.
Initially, the credit agreement contemplated a revolving credit facility (the “2021 Revolving Credit Facility”), with the amendment on September 1, 2021 including a provision to borrow up to $100 million under a term loan (the “2021 Term Loan”) which was in addition to the available capacity on the 2021 Revolving Credit Facility.
Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Segment operating expenses $ 137,489 $ 136,395 $ 1,094 0.8 % Marketing expenses 67,682 71,837 (4,155) (5.8) % Employee related compensation 12,642 8,848 3,794 42.9 % Other segment operating expenses 57,165 55,710 1,455 2.6 % Segment operating expenses were relatively flat for the year ended December 31, 2024 compared to the year ended December 31, 2023, with increases in employee related compensation as a result of costs associated with the separation of certain management personnel and addition of senior leadership positions, as well as increases in other segment operating expenses as a result of an increase in seller fees stemming from increased marketplace sales within the DTC net sales channel.
Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Operating expenses $ 85,810 $ 137,489 $ (51,679) (37.6) % Marketing expenses 35,985 67,682 (31,697) (46.8) % Employee related compensation 10,963 12,642 (1,679) (13.3) % Other operating expenses 38,862 57,165 (18,303) (32.0) % Operating expenses decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily as a result of a decrease in marketing expenses, as well as decreases in other operating expenses driven by a decrease in seller fees and shipping expenses, both stemming from the decline in DTC channel net sales.
Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Income (loss) from operations $ (174,618) $ (227,850) $ 53,232 (23.4) % The decrease in loss from operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by a decrease in restructuring, contract termination and impairment charges, offset in part by the decline in gross profit.
Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Income (loss) from operations $ (113,483) $ (174,618) $ 61,135 35.0 % The decrease in loss from operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by a reduction in selling, general & administrative expenses through effective management of these expenses in alignment with the decline in net sales, particularly advertising and marketing costs and distribution costs, and a reduction in restructuring, contract termination and impairment charges, offset in part by the reduction in gross profit realized from the decline in net sales in the current year when compared to the prior year. 37 Table of Contents Consolidated Interest Expense Interest expense, net consists primarily of interest on our revolving credit facilities and term loans.
The Revolving Credit Facility matures on May 12, 2026 and bears interest at a rate equal to the base rate as defined in the agreement plus an applicable margin, which as of December 31, 2024, was based on SOFR. Interest is due on the last business day of each March, June, September and December.
Each of the 2025 Revolving Credit Facility and the 2025 Term Loan bear interest at (depending on our election from time to time) either an adjusted term rate defined in the agreement based on SOFR or the base rate defined in the Amended Credit Agreement, each plus an applicable margin.
Key Factors Affecting Our Financial Condition and Results of Operations In 2024, the Company refined its strategic vision and conducted a comprehensive evaluation of its initiatives and brands. The evaluation included analysis of the brand level financials, product design, customer metrics, marketing campaign effectiveness and potential synergies, amongst other items.
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.
These tariffs and retaliatory actions are expected to have a significant adverse effect on our results of operations and margins and sales of our products outside the U.S. Any strategies we implement to mitigate the impact of such tariffs or other trade actions may not be successful.
The strategies we have implemented and continue to implement to mitigate the impact of such tariffs or other trade 33 Table of Contents actions may not be successful. For additional information, see Part I, Item 1A.
Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Income tax expense (benefit) $ (8,958) $ (36,225) $ 27,267 (75.3) % Income tax benefit decreased for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the book losses in the prior year due to the restructuring, contract termination and impairment charges (see Note 3, Restructuring, Contract Termination and Impairment Charges for more information) which exceeded those recognized in 2024, as well as by the increase in the Company’s valuation allowance, as compared to the prior year which included a net release of the Company’s valuation allowance.
Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Income tax expense (benefit) $ 3,422 $ (8,958) $ 12,380 (138.2) % The increase in income tax expense for the year ended December 31, 2025 compared to the income tax benefit for the year ended December 31, 2024 was primarily driven by a full valuation allowance on deferred tax assets on losses generated from the Solo Stove segment in 2025, with only a partial valuation allowance in the prior year, as well as an increase in income tax expense associated with the Chubbies segment in the year ended December 31, 2025.
We also source and procure inventory, primarily out of China, with some products sourced through Mexico. As such, we are exposed to and impacted by global macroeconomic factors. In recent years, tariffs on goods manufactured in China have increased significantly.
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.
In addition to historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. 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.
In addition to historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Overview Solo Brands operates four premium outdoor brands: Solo Stove, Chubbies, Oru Kayak (“Oru”) and International Surf Ventures (“ISLE”), with Oru and ISLE regarded in aggregate as Watersports.
Although we cannot predict with certainty all of our particular short-term cash uses or the timing or amount of cash requirements, or the effects of our plan to refinance or restructure our debt or enter into other financing arrangements as described above, there is uncertainty about our ability to meet our cash obligations for the next twelve months. 44 Table of Contents Revolving Credit Facility and Term Loan On May 12, 2021, we entered into a credit agreement with JPMorgan Chase Bank, N.A., the Lenders and L/C Issuers party thereto (each as defined therein) and the other parties thereto (as subsequently amended on June 2, 2021, September 1, 2021 and May 22, 2023, the “Revolving Credit Facility”).
Revolving Credit Facilities and Term Loans On May 12, 2021, we entered into the Credit Agreement with JPMorgan Chase Bank, N.A., the Lenders and L/C Issuers party thereto (each as defined therein) and the other parties thereto.
Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Net sales $ 454,550 $ 494,776 $ (40,226) (8.1) % Direct-to-consumer net sales 319,064 358,052 (38,988) (10.9) % Retail net sales 135,486 136,724 (1,238) (0.9) % The decrease in net sales for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by a decline in both DTC and retail channel net sales within the Solo Stove segment as a result of a lack of new product launches in the 2024 period, with the prior year benefiting from new products released in the fourth quarter of 2022, and a non-recurring transaction in 2023 with a marketing barter partner.
Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Net sales $ 316,581 $ 454,550 $ (137,969) (30.4) % Direct-to-consumer net sales 200,939 319,064 (118,125) (37.0) % Retail net sales 115,642 135,486 (19,844) (14.6) % The decrease in net sales for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by a decline in net sales within the Solo Stove segment, offset in part by an increase in net sales across both channels within the Chubbies segment.
Removed
The decline in net sales was primarily driven by the Solo Stove segment, as a result of a lack of significant new product launches in 2024 when compared to the prior year, with the prior year continuing to benefit from the release of new products in the fourth quarter of 2022.
Added
Our brands develop innovative products and market them directly to customers primarily through our direct-to-consumer (“DTC”) channel, which includes e-commerce and owned retail stores, as well as partnerships with key retailers. We aim to help our customers enjoy good moments that create lasting memories.
Removed
This resulted in a decline in DTC channel net sales of 10.9% in 2024 when compared to the prior year. The retail channel net sales similarly experienced a decline, of a lesser magnitude, in 2024 when compared to the prior year, further driven by a non-recurring transaction with a marketing barter partner in the third quarter of 2023.
Added
In 2025, the Company completed the disposition of the manufacturing operations for the TerraFlame brand. However, we continue to own the intellectual property of TerraFlame, as well as sole distribution rights of TerraFlame branded products. The CODM makes operating decisions, assesses financial performance, and allocates resources based upon discrete financial information at the reportable segment level.
Removed
Management undertook these activities with the intent of enhancing the foundation of the Company as part of the strategic initiative to return the Company to growth.
Added
While net sales for the year ended December 31, 2025 declined when compared to the prior year, loss from operations decreased from $174.6 million to $113.5 million, respectively.
Removed
The items noted above had the following purposes: • Through the termination of the underperforming marketing agreements, management could be able to repurpose the funds previously allocated to these marketing contracts, towards increased investment in direct response marketing. Marketing spend under a certain marketing agreement was $16.9 million in 2023 and $3.7 million in 2024.
Added
This decrease was primarily driven by a reduction in restructuring, contract termination and impairment charges and effective management of operating expenses to align with the decline in net sales, particularly advertising and marketing costs and distribution costs.
Removed
Redirection of these marketing funds to direct response marketing may generate more favorable returns on the marketing dollars spent in future periods, as direct response marketing is better aligned to how our target market consumes their media. • IcyBreeze was acquired in 2023 to enter the portable cooler market and expand our product offering.
Added
Partially offsetting these expense declines was the reduction in gross profit realized from the lower net sales in the current year when compared to the prior year.
Removed
Through the course of ownership, IcyBreeze underperformed projections. Management made the decision to wind-down the operations of IcyBreeze in the third quarter of 2024, with sell through of remaining legacy products.
Added
On December 17, 2025, as part of the Corporate Simplification transactions, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Holdings and Solo Merger Sub LLC (“Merger Sub”), a subsidiary of Solo Brands, Inc. and SP SS Blocker Purchaser, LLC (“Blocker”), formed for the sole purpose of merging with and into Holdings.
Removed
This wind-down of operations, while resulting in a direct reduction to revenue attributable to the Company, is also anticipated to benefit net income (loss) in future periods. • The reorganization of the Oru and ISLE reporting units under a single brand president and leadership team was designed to be strategically beneficial, as both brands operate within the same outdoor watersports space.
Added
Pursuant to the Merger Agreement, effective January 1, 2026 (the “Effective Time”), Merger Sub was merged with and into Holdings, with Holdings continuing as the surviving entity (the “Merger”) as our wholly owned subsidiary of Solo Brands, Inc.
Removed
The Company expects to benefit from improved margins through the consolidation of overhead and exploration of manufacturing and logistics synergies. In addition, the Company expects to be able to better leverage the combined scale of the Oru and ISLE reporting units as we seek to scale and achieve growth.
Added
Pursuant to the Merger Agreement, at the Effective Time, each of the common units of Holdings (“LLC Units”) beneficially owned by members of Holdings were cancelled and converted automatically into a right to receive one share of our Class A common stock, except for any LLC Units beneficially owned by either Solo Brands, Inc. or Blocker, which were cancelled for no consideration in accordance with the Merger Agreement and Holdings’ Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”).
Removed
The following table outlines the cash outlays and the period in which they occurred. 39 Table of Contents 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 Economic Factors Affecting our Performance We sell our products in the U.S. as well as various foreign countries, primarily Europe, Canada and Australia.
Added
At the Effective Time, the limited liability company interests of Merger Sub were converted into LLC Units as the surviving entity, resulting in Holdings continuing as our wholly owned subsidiary.
Removed
In addition, the U.S. presidential administration recently imposed an additional aggregate 20% tariffs on goods manufactured in China, 25% tariffs on all steel manufactured outside of the U.S. and 25% tariffs on almost all goods manufactured in Mexico and Canada.
Added
In addition, immediately following the Effective Time, all of the issued and outstanding shares of our Class B common stock were retired and cancelled in accordance with our Amended and Restated Certificate of Incorporation and the Holdings LLC Agreement.
Removed
China, Canada and Mexico have retaliated or are expected to retaliate with tariffs on goods manufactured in, or exported by, the United States. Tariffs on certain foreign origin goods continue to put pressure on input costs, for which we have been able to partially mitigate through the U.S. government’s duty draw-back mechanism, tariff exclusion process, footprint utilization, and prudent sourcing.
Added
As a result, upon completion of the Merger, there were no LLC Units or shares of Class B common stock of the Company outstanding.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+6 added−4 removed4 unchanged
Biggest changeDuring 2024 and 2023, net sales in international markets accounted for 6.9% and 6.0% of our consolidated revenues, respectively. Therefore, we do not believe exposure to foreign currency fluctuations has had a material impact on our net sales.
Biggest changeForeign Currency Risk Our international sales are primarily denominated in local currencies. During the years ended December 31, 2025 and 2024, net sales in international markets accounted for 7.0% and 6.9% of our consolidated revenues, respectively. Therefore, we do not believe exposure to foreign currency fluctuations has had a material impact on our net sales.
A portion of our operating expenses are incurred outside the Unites States and are denominated in foreign currencies, which are also subject to fluctuations due to changes in foreign currency exchange rates. In addition, our suppliers may incur many costs, including labor costs, in other currencies.
A portion of our operating expenses are incurred outside the United States and are denominated in foreign currencies, which are also subject to fluctuations due to changes in foreign currency exchange rates. In addition, our suppliers may incur many costs, including labor costs, in other currencies.
Our market risk exposure is primarily the result of fluctuations in interest rates. 48 Table of Contents Interest Rate Risk In order to maintain liquidity and fund business operations, we have a long-term credit facility and separate term loan that bear variable interest rates based on prime, federal funds, or SOFR plus an applicable margin based on our total net leverage ratio.
Our market risk exposure is primarily the result of fluctuations in interest rates. 44 Table of Contents Interest Rate Risk We have a long-term credit facility and separate term loan that bear variable interest rates based on prime, federal funds, or SOFR plus an applicable margin based on our total net leverage ratio.
A 100 bps unfavorable change in foreign currency exchange rates to which we are exposed would increase our operating expenses by approximately $0.3 million and decrease our net sales by approximately $0.3 million for the year ended December 31, 2024. 49 Table of Contents
A 100 bps unfavorable change in foreign currency exchange rates to which we are exposed would increase our operating expenses by approximately $0.1 million and decrease our n et sales by approximately $0.2 million for the year ended December 31, 2025. 45 Table of Contents
Commodity Price Risk The primary raw materials and components used by our contract manufacturing partners include stainless steel and aluminum. We believe these materials are readily available from multiple vendors. Certain of these products use petroleum or natural gas as inputs.
Our primary cost exposures for commodities, components, parts, and accessories used in our products are with stainless steel and aluminum. We believe these materials are readily available from multiple vendors. Certain of these products use petroleum or natural gas as inputs.
However, we do not believe there is a significant direct correlation between petroleum or natural gas prices and the costs of our products. The U.S. government has imposed tariffs on certain foreign goods from a variety of countries and regions that it perceives as engaging in unfair trade practices.
However, we do not believe there is a significant direct correlation between petroleum or natural gas prices and the costs of our products. The U.S. government has and potentially will continue to impose tariffs on certain foreign goods, particularly steel and aluminum, as well as goods from China.
Inflation Risk Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results.
A 100 bps increase in SOFR would increase our interest expense by approximately $2.5 million in any given year. Inflation Risk Inflationary factors such as increases in the cost of our products and overhead costs may adversely affect our operating results.
Removed
As of December 31, 2024, we had indebtedness of $69.0 million and $83.0 million, with annualized rates of interest of 7.03% and 7.08%, under our Revolving Credit Facility and Term Loan, respectively. The nature and amount of our long-term debt varies as a result of business requirements, market conditions, and other factors.
Added
As of December 31, 2025, we had indebtedness of $253.1 million, with an annualized rate of interest of 9.17%, under our 2025 Term Loan, with no current indebtedness under our 2025 Revolving Credit Facility. As of December 31, 2025, we have not entered into any interest rate swap contracts.
Removed
We may elect to enter into interest rate swap contracts to reduce the impact associated with interest rate fluctuations, but as of December 31, 2024, we have not entered into any such contracts. A 100 bps increase in SOFR would increase our interest expense by approximately $1.5 million in any given year.
Added
Commodity Price Risk The majority of the commodities, components, parts, and accessories used in our manufacturing process, as well as finished goods, are exposed to commodity cost changes.
Removed
If we become unable to recover a substantial portion of any increased tariff related costs from our customers, manufacturers, or other available avenues, the imposition of the new or increased international tariffs could materially and adversely affect our business, financial condition and results of operations.
Added
These changes may be affected by several factors, including, for example, demand; inflation; deflation; changing prices; foreign currency fluctuations; tariffs; duties; trade regulatory actions; industry actions; and changes to international trade policies, agreements, and/or regulation, including antidumping and countervailing duties on certain products imported from foreign countries; and competitor activity.
Removed
We will continue to monitor international trade policy and will make adjustments to our supply base where possible to mitigate the impact on our costs. We do not currently hedge commodity price risk. Foreign Currency Risk Our international sales are primarily denominated in local currencies.
Added
In any given period, we strategically attempt to mitigate potentially unfavorable impacts as a result of changes to the cost of commodities, components, parts, and accessories that affect our product lines through the following initiatives: collaboration with suppliers, reviewing alternative sourcing options, engaging in internal cost reduction efforts, and utilizing tariff exclusions and duty drawback mechanisms, all as appropriate.
Added
We do not currently hedge commodity price risk. When appropriate, we may also increase prices on some of our products to offset changes in the cost of commodities, components, parts, and accessories.
Added
To the extent that commodity and component costs increase and we do not have firm pricing from our suppliers, or our suppliers are not able to honor such prices, and/or our initiatives and/or product price increases are less effective than anticipated and/or do not fully offset cost increases, we may experience a decline in our revenues and/or gross margins, which could materially adversely affect our results of operations and financial condition.

Other SBDS 10-K year-over-year comparisons