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What changed in Grove Collaborative Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Grove Collaborative Holdings, 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.

+329 added−355 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-19)

Top changes in Grove Collaborative Holdings, Inc.'s 2025 10-K

329 paragraphs added · 355 removed · 275 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

58 edited+6 added−11 removed76 unchanged
Biggest changeSustainability and Environmental Health and Safety Grove’s corporate sustainability ethos and sustainable product offering are our primary differentiators. Our customers seek carefully created and curated products that align with their values around environmental health and safety. As part of that value proposition, we pride ourselves on our industry-leading sustainability work in areas relevant to our business: plastic, forests, and carbon.
Biggest changeInstead, we believe that lifting the industry towards increased environmental and human health will be the “new normal” and will materially benefit Grove. Environmental and Human Health Grove’s corporate sustainability ethos and sustainable product offering are our primary differentiators. Our customers seek carefully created and curated products that align with their values around environmental health and safety.
In addition, Grove’s social compliance program helps to ensure equitable, healthy and safe working conditions. Grove requires all our direct finished producers in a non-low-risk country (according to amfori) to be audited according the amfori Business Social Compliance Initiative (“amfori BSCI”) standard. We monitor for social compliance and continuous improvement in accordance with amfori’s BSCI Code of Conduct.
In addition, Grove’s social compliance program helps to ensure equitable, healthy and safe working conditions. Grove requires all our direct finished producers in a non-low-risk country (according to amfori) to be audited according to the amfori Business Social Compliance Initiative (“amfori BSCI”) standard. We monitor for social compliance and continuous improvement in accordance with amfori’s BSCI Code of Conduct.
In addition to prioritizing plant-based ingredients, the Grove standard lists all the anti-ingredients you’ll never find in our products, from parabens to phosphates and triclosan. Our Brands Brand Strategy Increasingly, consumers are demanding brands that are thoughtfully designed with a focus on consumer needs and preferences, and that meet higher standards than ever in environmental sustainability and human health.
In addition to prioritizing plant-based ingredients, the Grove Standard lists all of the anti-ingredients you’ll never find in our products, from parabens to phosphates and triclosan. Our Brands Brand Strategy Increasingly, consumers are demanding brands that are thoughtfully designed with a focus on consumer needs and preferences, and that meet higher standards than ever in environmental sustainability and human health.
The CCPA was recently amended by the California Privacy Rights Act of 2020 (“CPRA”), and several states have also enacted or approved policy legislation imposing additional data protection obligations on companies doing business in those states, resulting in further complexity.
The CCPA was amended by the California Privacy Rights Act of 2020 (“CPRA”), and several states have also enacted or approved policy legislation imposing additional data protection obligations on companies doing business in those states, resulting in further complexity.
We regularly conduct surveys, and, based on customer feedback, we believe that our typical customer cares deeply about their family and their homes, seeks safe and effective products, and is conscientious about the impact they have on the planet.
We regularly conduct surveys, and, based on customer feedback, we believe that our typical customer cares deeply about their family and their homes, seeks safe and effective products, and is conscientious about the impact they have on themselves and the planet.
We expect to continue to collaborate with these brands to help bring their complementary products to consumers while also executing on our strategy to make our DTC platform a destination for consumer discovery. Over the long term, we do not view the trends driving Grove’s growth as winner-take-all.
We expect to continue to collaborate with these brands to help bring their complementary products to consumers while also executing on our strategy to make our DTC platform a destination for consumer discovery. Over the long term, we do not view the trends driving Grove’s business as winner-take-all.
Our Elizabethtown, PA fulfillment center recently won the PMA Risk Management Excellence Award. PMA is our workers' compensation insurance provider. To obtain this recognition a client must maintain a lost time frequency rate better than the target rate set by the underwriter for a period of 24 months.
Our Elizabethtown, PA fulfillment center recently achieved the PMA Risk Management Excellence Award. PMA is our workers' compensation insurance provider. To obtain this recognition a client must maintain a lost time frequency rate better than the target rate set by the underwriter for a period of 24 months.
Our current and potential competitors include: (1) companies that sell household and personal care products online and in physical stores; (2) physical, e-commerce, and omnichannel retailers, vendors, distributors, and manufacturers of the products we offer and sell to consumers; and (3) web search engines, comparison shopping websites, social networks, and other online and app-based means of discovering, using, or acquiring goods, either directly or in collaboration with other retailers.
Our current and potential competitors include: (1) companies that sell household and personal care products online and in physical stores; (2) physical, ecommerce, and omnichannel retailers, vendors, distributors, and manufacturers of the products we offer and sell to consumers; and (3) web search engines, comparison shopping websites, social networks, and other online and app-based means of discovering, using, or acquiring goods, either directly or in collaboration with other retailers.
The FTC recently issued the “Health Products Compliance Guide” (“FTC Guide”) which provides guidance from FTC regarding how companies should ensure that claims about the benefits and safety of health-related products are truthful, not misleading, and supported by science.
The FTC has issued the “Health Products Compliance Guide” (“FTC Guide”) which provides guidance from FTC regarding how companies should ensure that claims about the benefits and safety of health-related products are truthful, not misleading, and supported by science.
Although the Endorsement Guides are advisory in nature and do not operate directly with the force of law, they provide guidance about what the FTC staff generally believes the Federal Trade Commission Act (the “FTC Act”) requires in the context using of 11 Table of Contents endorsements and testimonials in advertising and any practices inconsistent with the Endorsement Guides can result in violations of the FTC Act’s proscription against unfair and deceptive practices.
Although the Endorsement Guides are advisory in nature and do not operate directly with the force of law, they provide guidance about what the FTC staff generally believes the Federal Trade Commission Act (the “FTC Act”) requires in the context using of endorsements and testimonials in advertising and any practices inconsistent with the Endorsement Guides can result in violations of the FTC Act’s proscription against unfair and deceptive practices.
Motivated by a desire to learn and discover, they are spending more time engaging with the natural HPC category and making sustainable choices as part of their environmentally conscious lifestyle. Our Distribution Strategy We reach consumers through our DTC and other ecommerce channels. Our approach enables us to reach more customers with differentiated offerings.
Motivated by a desire to learn and discover, they are spending more time engaging with the natural HPC category and making sustainable choices as part of their environmental- and health- conscious lifestyle. Our Distribution Strategy We reach consumers through our DTC and other ecommerce channels. Our approach enables us to reach more customers with differentiated offerings.
Our aim is to conserve forests through our business, both by avoiding use of paper products that directly contribute to deforestation as well as by actively funding forest conservation, both directly and through our carbon offset programs. Two Million Acres of Forest. In 2022, we reached our goal to plant 1 million trees.
Our aim is to conserve forests through our business, both by avoiding use of paper products that directly contribute to deforestation as well as by actively funding forest conservation, both directly and through our carbon offset programs. 6 Table of Contents Two Million Acres of Forest. In 2022, we reached our goal to plant 1 million trees.
Our key long-term strategic advantage comes from a combination of our authentic mission and our direct relationships with customers. We gained differentiated insights on consumer preferences and provided a platform for them to tell us what they value in each product category we carried.
Our key long-term strategic advantage comes from a combination of our authentic mission and our direct relationships with customers. We have gained differentiated insights on consumer preferences and provided a platform for them to tell us what they value in each product category we carry.
We offer customers our flexible monthly subscribe-and-save shipment service to help them stay on top of their home care regimen, as well as non-subscription options to ship as needed. Customers can subscribe to individual products at appropriate cadences to make sure they never run out.
We offer customers our flexible subscribe-and-earn shipment service to help them stay on top of their home care regimen, as well as non-subscription options to ship as needed. Customers can subscribe to individual products at appropriate cadences to make sure they never run out.
All of our shipments are offset so they are carbon neutral and all plastic sold is offset through our partnerships with rePurpose Global. Grove believes that we can go farther together in achieving the shared goal of making our industry more sustainable.
All of our shipments are offset so they are carbon neutral and all plastic sold is offset through our partnerships with rePurpose Global. 7 Table of Contents Grove believes that we can go farther together in achieving the shared goal of making our industry more sustainable.
This new FTC Guide applies to all products making health-related claims, including, but not limited to, food, over-the-counter drugs, dietary supplements and homeopathic products.
The FTC Guide applies to all products making health-related claims, including, but not limited to, food, over-the-counter drugs, dietary supplements and homeopathic products.
If the advertiser does not have proof that the endorser’s experience represents what people will generally achieve using the product as described in the ad, then an ad featuring that endorser must make clear to the audience what results they can generally expect to achieve, and the advertiser must have a reasonable basis for its representations regarding those generally expected results.
If the advertiser does not have proof that the endorser’s experience represents what people will generally achieve using the product as described in the ad, then an ad featuring that endorser must make clear to the audience what results they can generally expect to achieve, and the 11 Table of Contents advertiser must have a reasonable basis for its representations regarding those generally expected results.
In the year ended December 31, 2024, we generated approximately 41% of our net revenue from Grove Brands, with 84% of that net revenue from home care products. As we grow our product assortment and distribution in our other categories including health and wellness, beauty, and personal care, we expect the contribution of sales from these categories to increase.
In the year ended December 31, 2025, we generated approximately 41% of our net revenue from Grove Brands, with 73% of that net revenue from home care products. As we grow our product assortment and distribution in our other categories including health and wellness, beauty, and personal care, we expect the contribution of sales from these categories to increase.
We compete based on various product attributes, including sustainability, price, and quality. We compete with producers of household and personal care products and e-commerce and traditional sales outlets. Some of our competitors are also our partners and we distribute their products.
We compete based on various product attributes, including sustainability, price, and quality. We compete with producers of household and personal care products and ecommerce and traditional sales outlets. Some of our competitors are also our partners and we distribute their products.
We offer market-competitive compensation and benefits including life and health (medical, dental, and vision) insurance, health savings accounts, a 401(k) plan, voluntary supplemental benefits, paid time off, paid parental leave, a free Grove VIP membership and discounts for purchases made on our website. Team Member Safety .
We offer market-competitive compensation and benefits including life and health (medical, dental, and vision) insurance, health savings accounts, a 401(k) plan, voluntary supplemental benefits, paid flexible time off, paid parental leave, a free Green Rewards VIP Membership and discounts for purchases made on our website. Team Member Safety .
With an assortment of products ranging from household cleaners to hand and dish soaps to tree-free home tissues and laundry detergent, Grove Co. is the largest brand on our DTC platform. 5 Table of Contents Third-Party Brands In addition to Grove Brands, we offer a curated portfolio of approximately 300 third-party brands on our DTC platform and provide consumers with a selection of over 3,000 third-party products.
With an assortment of products ranging from household cleaners to hand and dish soaps to tree-free home tissues and laundry detergent, Grove Co. is the largest brand on our DTC platform. 5 Table of Contents Third-Party Brands In addition to Grove brands, we offer a curated portfolio of over 400 third-party brands on our DTC platform and provide consumers with a selection of over 7,000 third-party products.
After building a robust portfolio of efficacious, good-for-the-world products, we expanded to offer our Grove Brand products in brick-and-mortar retail stores in 2021 in addition to operating our DTC platform. In October 2024, we made the strategic decision to wind down our brick-and-mortar retail business.
After building a robust portfolio of efficacious, good-for-the-world products, we expanded to offer our Grove Brand products in brick-and-mortar retail stores in 2021 in addition to operating our DTC platform. In October 2024, we made the strategic decision to wind down our brick-and-mortar retail business, which was completed in 2025.
Our DTC shoppers can reach out to our Grove Guides team for any questions pertaining to their orders. 7 Table of Contents Customers can call, chat, text, or email our Grove Guides team to modify orders, ask about new products, request a refund, or learn more about our sustainability practices.
Our DTC shoppers can reach out to our Grove Guides team for any questions pertaining to their orders. Customers can call, chat, text, or email our Grove Guides team to modify orders, ask about new products, request a refund, or learn more about our sustainability practices.
Since our inception, we have attracted and maintained strong relationships with a diverse group of clean and natural brands within home care, beauty and personal care, from emerging brands such as Caraway, Cocofloss, Koala Eco and Rugged to globally recognized brands such as Mrs. Meyers, Seventh Generation, Method, and Burt’s Bees.
Since our inception, we have attracted and maintained strong relationships with a diverse group of clean and natural brands within home care, beauty and personal care, from emerging brands such as Caraway, Cocofloss, ATTITUDE and Homecourt to globally recognized brands such as Mrs. Meyers, Seventh Generation, Method, and Burt’s Bees.
MOCRA also provides FDA with mandatory recall authority over cosmetic products. Our tampon, feminine and sexual health products are regulated as medical devices by the FDA and must be manufactured in an establishment registered with the FDA and in conformity with applicable regulatory clearances, device listing and quality system regulations.
MOCRA also provides FDA with mandatory recall authority over cosmetic products. The third-party tampon, feminine and sexual health products we offer are regulated as medical devices by the FDA and must be manufactured in an establishment registered with the FDA and in conformity with applicable regulatory clearances, device listing and quality system regulations.
We paired this insight with our product innovation capabilities, and in 2016 we launched Grove Co., our flagship home care brand. We have since established Grove Co. as the largest brand by revenue on our DTC platform.
We paired the insight we have gained from our customers with our product innovation capabilities, and in 2016 we launched Grove Co., our flagship home care brand. We have since established Grove Co. as the largest brand by revenue on our DTC platform.
We offer a highly compelling proposition to our third-party brands by providing access to more than 688,000 environmentally-conscious and digitally-savvy customers who shopped on our DTC platform in 2024. We consider these third-party brands to be important long-term partners both in serving our customers on our digital platform and in changing the industry for the better.
We offer a highly compelling proposition to our third-party brands by providing access to nearly 600,000 environmentally-conscious and digitally-savvy customers who shopped on our DTC platform in 2025. We consider these third-party brands to be important long-term partners both in serving our customers on our digital platform and in changing the industry for the better.
Approximately 66% of our total employee population is located in our fulfillment centers. As of March 19, 2025, none of our employees are covered by a collective bargaining agreement. Compensation and Benefits Our compensation and benefits are designed to enable us to attract, motivate, and retain highly-qualified talent.
Approximately 69% of our total employee population is located in our fulfillment centers. As of March 5, 2026, none of our employees are covered by a collective bargaining agreement. Compensation and Benefits Our compensation and benefits are designed to enable us to attract, motivate, and retain highly-qualified talent.
Value Proposition to Consumers We believe that sustainability is critical. Grove’s products offer a unique blend of sustainability, efficacy, consumer centricity and modern design offered at accessible prices and supported by exceptional customer service and a strong online community.
Our next recertification will occur in 2027. Value Proposition to Consumers We believe that sustainability is critical. Grove’s products offer a unique blend of sustainability, efficacy, consumer centricity and modern design offered at accessible prices and supported by exceptional customer service and a strong online community.
While we continue to believe that there are long term growth trends in the reduced-plastic waste industry and that we will be able to continue to grow our business in the long run, consumer behavior patterns and macro-economic factors will continue to be a risk to our business and will continue to adversely impact our financial performance for at least the near to medium term.
While we continue to believe that there are long term growth trends in the reduced-plastic waste and personal health industries and that we will be able to grow our business in the long run, consumer behavior patterns, ongoing impact of ecommerce platform migration and macro-economic factors will continue to be a risk to our business and will continue to adversely impact our financial performance for at least the near to medium term.
For outbound fulfillment parcel shipping, we partner with national as well as regional carriers. We utilize a rate-shop service to identify best pricing and time in transit for our delivery points. Freight costs represent a significant portion of our operating expenses.
For inbound shipments, we utilize state-of-the-art transportation management systems that optimize time and costs. For outbound fulfillment parcel shipping, we partner with national as well as regional carriers. We utilize a rate-shop service to identify best pricing and time in transit for our delivery points. Freight costs represent a significant portion of our operating expenses.
Retail We expanded into brick-and-mortar retail in April 2021, with the launch of a curated assortment of Grove Co. best sellers in cleaning, hand and dish categories at Target, in a nationwide partnership both in store and on Target.com We also expanded our retail partners to include Amazon, CVS, Meijer, and Kroger.
Retail We expanded into brick-and-mortar retail in April 2021, with the launch of a curated assortment of Grove Co. best sellers in cleaning, hand and dish categories at Target, in a nationwide partnership both in store and on Target.com.
We have applied to register or registered many of our trademarks in the U.S. and other jurisdictions, and we will pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective. Worldwide, we have 21 issued patents and five patent applications pending. Our issued patents will begin expiring in March 2034.
We have applied to register or registered many of our trademarks in the U.S. and other jurisdictions, and we will pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective. 9 Table of Contents As of December 31, 2025, worldwide, we have 21 issued patents and five patent applications pending.
We operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our Grove-owned brands (“Grove Brands”) and partner with other leading natural and mission-based CPG brands, providing consumers a selection of curated products across many categories and brands.
Grove’s distribution strategy enables us to reach consumers any time, anywhere they want to shop. We operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our Grove-owned brands (“Grove Brands”) and partner with other leading natural and mission-based CPG brands, providing consumers a selection of curated products across many categories and brands.
Early on, it became clear that the current carbon, plastic, and ingredient footprint of our industry is unsustainable, and that there will be massive share shift to products that perform while supporting human and environmental health. Grove is a sustainability-oriented consumer products innovator. We use our connection with consumers to create and curate authentic, disruptive brands and products.
Early on, it became clear that the current carbon, plastic, and ingredient footprint of our industry is unsustainable, and that there will be massive share shift to products that perform while supporting human and environmental health. Grove is a human health and sustainability-oriented consumer products company.
The CPSC monitors compliance of consumer products under its jurisdiction through market surveillance and has the authority to conduct product safety related inspections of establishments where consumer products 10 Table of Contents are manufactured, held, or transported.
These statutes and the related regulations establish safety standards and bans for consumer products. The CPSC monitors compliance of consumer products under its jurisdiction through market surveillance and has the authority to conduct product safety related inspections of establishments where consumer products are manufactured, held, or transported.
Our principal 9 Table of Contents trademark assets include the trademarks “Grove,” “Grove Co.,” and “Grove Collaborative,” which are registered or pending registration in the U.S. and targeted foreign jurisdictions, as well as our logos, taglines and multiple product brand names.
However, these measures may not be effective in all cases. Our principal trademark assets include the trademarks “Grove,” “Grove Co.,” and “Grove Collaborative,” which are registered or pending registration in the U.S. and targeted foreign jurisdictions, as well as our logos, taglines and multiple product brand names.
In the first two years as a PMA client, Grove exceeded this criteria. Less than 5% of PMA clients qualify for this award. Facilities We lease fulfillment center locations in Reno, Nevada and Elizabethtown, Pennsylvania, which we use for inbound and receiving, packing and shipping, transportation, operations technology, warehouse IT, operations management, and human resources.
In the first two years as a PMA client, Grove exceeded this criteria. Facilities We lease fulfillment center locations in Reno, Nevada and Elizabethtown, Pennsylvania, which we use for inbound and receiving, packing and shipping, transportation, operations technology, warehouse IT, operations management, and human resources. During the year ended December 31, 2024 we ceased fulfillment operations in our St.
In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights agreements with our employees, consultants, contractors and business partners. Our employees are also subject to invention assignment agreements.
We also hold domain registrations for many of our product names and other related trade names and slogans. In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights agreements with our employees, consultants, contractors and business partners. Our employees are also subject to invention assignment agreements.
Developing a full greenhouse gas emissions inventory by measuring Scope 1 (from sources we own directly), and Scopes 2 and 3 (from indirect sources) emissions helps Grove understand our full value chain emissions and focus our efforts on the greatest reduction opportunities. Grove also maintains carbon neutral customer shipping and facilities.
Developing a full greenhouse gas emissions inventory by measuring Scope 1 (from sources we own directly), and Scopes 2 and 3 (from indirect sources) emissions helps Grove understand our full value chain emissions and focus our efforts on the greatest reduction opportunities. We recognize that the majority of our carbon footprint comes from both upstream and downstream sources.
The passion of our employees is evident in the design and delivery of our products, the support we provide to our consumers and the impact we are making in our community and industry.
We seek to recruit and retain talented and engaged team members who are committed to our values, goals, and our community. The passion of our employees is evident in the design and delivery of our products, the support we provide to our consumers and the impact we are making in our community and industry.
We intend to pursue additional patent protection to the extent we believe it would be beneficial and cost-effective. We are the registered holder of multiple domestic and international domain names that include “grove” and similar variations. We also hold domain registrations for many of our product names and other related trade names and slogans.
Our issued patents will begin expiring in March 2034. We intend to pursue additional patent protection to the extent we believe it would be beneficial and cost-effective. We are the registered holder of multiple domestic and international domain names that include “grove” and similar variations.
Trademarks and Other Intellectual Property We protect our intellectual property through a combination of trademarks, domain names, copyrights, trade secrets and patents, as well as contractual provisions and restrictions on access to our proprietary technology.
Peters, Missouri facility. Our workforce outside of our fulfillment centers generally works remotely, and we have right-sized our office footprint accordingly. Trademarks and Other Intellectual Property We protect our intellectual property through a combination of trademarks, domain names, copyrights, trade secrets and patents, as well as contractual provisions and restrictions on access to our proprietary technology.
Fulfillment We have two fulfillment centers dedicated to our DTC platform, which are capable of reaching approximately 80% of our customers with two-day or faster shipping. We also regularly work to optimize and automate our operations to improve our margin profile while ensuring a seamless shopping experience for customers.
Fulfillment We have two fulfillment centers dedicated to our DTC platform, which have enabled us to achieve an approximate average delivery time of two days for customer deliveries. We also regularly work to optimize and automate our operations to improve our margin profile while ensuring a seamless shopping experience for customers.
For every ounce of plastic we sell, we recover this equal amount of ocean-bound plastic in partnership with rePurpose Global. Our plastic neutrality program recovers low- 6 Table of Contents value plastic waste that is most likely to end up as pollution, helps scale local plastic waste management value chains, and empowers marginalized waste worker communities. Beyond Plastic.
Our plastic neutrality program recovers low-value plastic waste that is most likely to end up as pollution, helps scale local plastic waste management value chains, and empowers marginalized waste worker communities. Beyond Plastic.
Grove builds natural products that perform as well as or better than many leading consumer packaged goods (“CPG”) brands (both conventional and natural), while being healthier for consumers and the planet. Grove’s distribution strategy enables us to reach consumers any time, anywhere they want to shop.
We use our connection with consumers to create and curate authentic, disruptive brands and products. Grove builds natural products that perform as well as or better than many leading consumer packaged goods (“CPG”) brands (both conventional and natural), while being healthier for consumers and the planet.
The Internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser-known businesses to compete against us. We strive to make our workplace, our products, and our services more equitable and inclusive. We believe an inclusive culture contributes to Grove’s success. Our People We value our employees.
The Internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser-known businesses to compete against us. Our People We value our employees. They are our most important asset and key to the success of our company and mission.
We drive engagement through open, transparent communication via monthly “all hands” meetings, the all company Slack channel, an open door practice and measure progress through an annual engagement survey that had 94% participation in 2024. Human connection is also important at Grove.
We drive engagement through open, transparent communication via monthly “all hands” meetings, the all company Slack channel, an open door practice and measure progress through an annual engagement survey that had 90% participation in 2025. As of December 31, 2025, we had approximately 235 full-time employees, as well 60 part-time and temporary employees.
We believe we can deliver higher returns by focusing our investment in our DTC channels, and as such we made the decision to wind down our brick-and-mortar distribution strategy in 2024. Supply Chain and Operations Freight Our freight strategy focuses on inbound and outbound transportation. For inbound shipments, we utilize state-of-the-art transportation management systems that optimize time and costs.
We believe we can deliver higher returns by focusing our investment in our DTC channels, and, as such completed the wind down of our brick-and-mortar distribution strategy in 2025, although we still maintain selling relationships with select ecommerce and digital channel partners. Supply Chain and Operations Freight Our freight strategy focuses on inbound and outbound transportation.
In addition, there are requirements for the reporting of certain adverse events or medical device reports for medical devices. The FDA may change the regulations as to any product category, requiring a change in labeling, product formulation or analytical testing.
In addition, there are requirements for the reporting of certain adverse events or medical device reports for medical devices.
During the year ended December 31, 2024 , we made the strategic decision to wind down its brick-and-mortar retail business. Grove is a public benefit corporation and a Certified B Corporation, meaning we adhere to third party standards for prioritizing social, environmental, and community well-being. We have a history of doing well by doing good.
Grove is a public benefit corporation and a Certified B Corporation, meaning we adhere to third party standards for prioritizing social, environmental, and community well-being. We have a history of doing well by doing good. Since our inception, we have invested heavily in building out both our Grove DTC platform and our Grove Brands.
Plastic The HPC industry has been built on seemingly cheap and disposable single-use plastic packaging. As consumers awaken to the reality of the plastic pollution crisis, they are urgently and increasingly demanding new solutions. Plastic Neutrality . Every order at Grove is 100% plastic neutral.
As consumers awaken to the reality of the plastic pollution crisis, they are urgently and increasingly demanding new solutions. Plastic Neutrality . Every order at Grove is 100% plastic neutral. For every ounce of plastic we sell, we recover this equal amount of ocean-bound plastic in partnership with rePurpose Global.
All our product innovation work leverages our three pillars of development: consumer centricity, efficacy, and sustainability. The Grove Co. Brand The Grove Co. brand is a market leader in products that contain little to no single-use plastic, or are refillable or reusable - as defined by our Beyond Plastic™ standard.
Combined with our mission, we believe that our direct relationship with consumers gives us a durable competitive advantage in building the brands to lead that change. The Grove Co. Brand The Grove Co. brand is a market leader in products that contain little to no single-use plastic, or are refillable or reusable – as defined by our Beyond Plastic™ standard.
We are subject to regulation by the CPSC under the Consumer Product Safety Act, the Federal Hazardous Substances Act, and other laws enforced by the CPSC. These statutes and the related regulations establish safety standards and bans for consumer products.
The FDA may change the regulations as to any product category, requiring a change in labeling, product formulation or analytical testing. 10 Table of Contents We are subject to regulation by the CPSC under the Consumer Product Safety Act, the Federal Hazardous Substances Act, and other laws enforced by the CPSC.
We continue to actively pursue opportunities to develop and expand our sales on third-party ecommerce platforms. Our Purpose We believe that the consumer products industry has contributed to the current environmental crises, specifically the proliferation of single-use plastic.
We continue to actively pursue opportunities to develop and expand our sales on third-party ecommerce platforms. 4 Table of Contents Our Purpose We believe consumers are increasingly seeking products that support healthier homes and reduce environmental impact, without compromising performance or convenience.
Since 2019, Grove has operated carbon neutral facilities and customer shipping. We’re committed to using our advocacy efforts and relationship with industry partners and suppliers to push for decarbonization, rather than using offsetting as a standalone strategy to reach our climate goals.
Grove’s science based targets will guide our advocacy efforts and relationship with industry partners and suppliers to push for decarbonization, rather than using offsetting as a standalone strategy to reach our climate goals. Healthier Homes Sustainability is not just about protecting the planet – it’s also about protecting the people who call it home.
In recent years, we have experienced declining revenues, with revenues in the years ended December 31, 2024 and 2023 were approximately 22% and 19% respectively lower than in their respective previous years. The decline results primarily from the Company’s reductions in advertising spend and our strategic shift toward achieving profitability.
Over this period we have operated at a loss with an accumulated deficit of $660.2 million as of December 31, 2025. We have experienced declining revenues in recent years. Revenues for the years ended December 31, 2025 and 2024 were approximately 15% and 22% lower than in their respective previous years.
It is our belief that we need to create business models and products that meet the 4 Table of Contents environmental needs of our time and the growing demand of consumers who are aware of the importance of making environmentally conscious decisions. Sustainability is our core differentiator.
It is our belief that we need to create business models and products designed to meet these expectations through responsible ingredient and material choices and a focus on reducing environmental footprint. Our commitment to sustainability is a core differentiator of our Company.
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Since our inception, we have invested heavily in building out both our Grove DTC platform and our Grove Brands. Over this period we have operated at a loss with an accumulated deficit of $648.5 million as of December 31, 2024.
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The decline resulted primarily from our reductions in advertising spend, the impact of the ecommerce platform migration, and our strategic shift toward achieving Adjusted EBITDA profitability.
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The shift away from plastic in Home and Personal Care (“HPC”) products is a clear consumer and industry trend. Combined with our mission, we believe that our direct relationship with consumers gives us a durable competitive advantage in building the brands to lead that change.
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As part of that value proposition, we pride ourselves on our industry-leading sustainability work in areas relevant to our business: plastic, forests, and carbon. Plastic The health and personal care (“HPC”) industry has been built on seemingly cheap and disposable single-use plastic packaging.
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Instead, we believe that lifting the industry towards increased environmental and human health will be the “new normal” and will materially benefit Grove. Product Development and Innovation We believe we have a durable competitive advantage in product development, based on the data and consumer insights garnered through our DTC platform.
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Since 2019, Grove has operated carbon neutral facilities and customer shipping. In 2025, Grove’s science-based targets were approved by the Science Based Targets Initiative (“SBTi”) – a major step in our commitment to reduce our company emissions.
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We estimate that we can develop products faster than most traditional CPG companies using a variety of strategies only available as a result of our DTC platform: • We can test market acceptance of product attributes prior to or as part of product launch, including fragrance, price point, marketing messaging, sustainability and more.
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Grove upholds strict human health standards across both our owned brands, including Grove Co., and the 400+ carefully vetted brands spanning all product categories. We maintain a formal list of more than 10,000 banned or restricted ingredients across all categories, a list grounded in globally recognized chemical safety principles and closely aligned with the precautionary approach used in EU frameworks.
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We can assess market acceptance of products on our DTC platform prior to a product ready date to determine consumer interest via our waitlist feature. • We can quickly gather consumer feedback by including samples in existing shipments, conducting online focus groups, and asking our consumers directly.
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In December 2025, we launched our Green Rewards customer loyalty program, which enables our customers to earn a rewards balance from purchases and other activities that these customers can apply to future purchases. We leverage data to further enhance the customer experience by personalizing pages to better fit our customers shopping needs.
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We can then improve the products where possible and relaunch or drop underperforming products at relatively little cost. • We can launch products on our DTC platform at any point, without the constraints of retailer shelf reset timelines. • We have an understanding of our consumers based on historical purchasing behavior, demographic information, and the ways in which they engage with our community and platform.
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That’s why we are proud to announce our science-based targets were officially approved by SBTi in 2025. Grove also maintains carbon neutral customer shipping and facilities.
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In addition, our research and product development team brings both HPC product experience as well as digital channel know-how to our innovation road map. We believe the combination of our data along with our innovation capabilities allows us to consistently produce high-quality, efficacious products with speed to market.
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Grove recently launched an updated first order experience for new customers by changing the consumer subscription experience, removing gated access and creating incentives for customers to opt into a program to subscribe to individual products for increased savings. We leverage data to further enhance the customer experience by personalizing pages to better fit our customers shopping needs.
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They are our most important asset and key to the success of our company and mission. We seek to recruit and retain talented and engaged team members who are committed to our values, goals, and our community.
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Our entire professional team gathers once per year during our Annual Summit and our employees meet quarterly with co-workers in geographic meet-ups that we call Grove Gatherings. These activities keep us engaged, informed, and connected. As of December 31, 2024, we had approximately 339 full-time employees, as well 76 part-time and temporary employees.
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During the year ended December 31, 2024 we ceased fulfillment operations in our St. Peters, Missouri facility. Our workforce outside of our fulfillment centers generally works remotely, and we have right-sized our office footprint accordingly.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

115 edited+29 added−21 removed333 unchanged
Biggest changeIf we are unable to achieve profitable growth in the future, our business could be adversely affected. • Our quarterly operating results fluctuate, which could cause our stock price to decline. • We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to generate sufficient revenue to achieve and maintain profitability. • We may require additional financing, and a failure to obtain this necessary capital when needed could adversely impact us. • We may not be able to compete successfully. • We must find sustainable solutions that support our brand and long-term growth. • If we fail to cost-effectively acquire new consumers or retain our existing consumers, our business could be adversely affected. • Maintaining consumer awareness of our brand, building brand loyalty and generating interest in our products requires substantial spending on advertising and marketing, and our reduction in this spending to achieve profitability may adversely affect our brand awareness. • Our brand and reputation may be diminished due to real or perceived quality, safety, efficacy or environmental impact issues with our products. • Failure to introduce new products that meet the expectations of our customers may adversely affect us. • Government regulation of the Internet and ecommerce is evolving, and unfavorable changes or failure by us to comply with these regulations could have an adverse effect on our business. • We may become subject to product liability claims, which could materially harm our business and liquidity. • We are subject to a number of other laws and regulations, which could impact our business. • We have pursued and may in the future pursue acquisitions to expand our business, and if any of those acquisitions are unsuccessful, our business may be harmed. • We may experience damage or destruction to our distribution centers, which may harm our business. • We are dependent on our management team, and the loss of one or more key employees could harm our business. • Labor-related matters, including labor disputes, may adversely affect our operations. • Our business, including our costs and supply chain, is subject to risks associated with outsourcing, manufacturing, warehousing, distribution, infrastructure and logistics to third-party providers, and the loss of any of our key suppliers or logistical service providers could negatively impact our business. • Shipping is a critical part of our business and any changes in our shipping arrangements or any interruptions in shipping could adversely affect our operating results. • Risks associated with the outsourcing of our fulfillment process and other technology-related functions, including our transition to Shopify, could materially and adversely affect our business. • We are subject to risks related to online payment methods, including third-party payment processing-related risks. • We may be unable to adequately obtain, maintain, protect, defend and enforce our intellectual property rights. 13 Table of Contents • We rely on trademark, copyright, and patent law, trade secret protection, and confidentiality and/or license agreements with our employees, customers, and others to protect our proprietary rights. • We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. • Indemnity provisions in various agreements to which we are party potentially expose us to substantial liability for infringement, misappropriation or other violation of intellectual property rights. • We must successfully maintain, scale and upgrade our information technology systems, and our failure to do so could have an adverse effect on our business. • If we (or our vendors) are unable to protect against or adequately respond to mitigate the impacts of a service interruption, data corruption, or cybersecurity attack, our operations could be disrupted, our reputation may be harmed and we could face significant costs to remediate the incident and defend against claims by business partners, customers, or regulators. • We use open source software in our platform, which may subject us to additional risks and harm our intellectual property. • The actual or perceived failure by us or our vendors to comply with applicable privacy and data protection laws, regulations or industry standards could have an adverse effect on our business, financial condition, results of operations and prospects. • Changes in existing laws or regulations or related official guidance, or the adoption of new laws or regulations or guidance, may increase our costs and otherwise adversely affect our business, financial condition, results of operations and prospects. • Failure by our network of ecommerce partners, suppliers or manufacturers to comply with laws and regulations, or with the specifications and requirements of our products, may adversely affect our business. • Our status as a public benefit corporation and a Certified B Corporation may not result in anticipated benefits. • As a public benefit corporation, our duty to balance a variety of interests may result in actions that do not maximize stockholder value. • As a public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on our financial condition and results of operations. • We and our directors and executive officers may be subject to litigation.
Biggest changeFailure to obtain this necessary capital when needed could adversely impact us. • We may not be able to compete successfully. • We must find sustainable solutions that support our brand and long-term growth. • If we fail to cost-effectively acquire new customers or retain our existing customers, our business could be adversely affected. • Our reduction in advertising and marketing spending to achieve profitability may adversely affect our brand awareness. • Our brand and reputation may be diminished due to real or perceived quality, safety, efficacy or environmental impact issues with our products. • Failure to introduce new products that meet the expectations of our customers may adversely affect us. • Unfavorable changes in or failure by us to comply with government regulation of the Internet and ecommerce could have an adverse effect on our business. • We may become subject to product liability claims, which could materially harm our business and liquidity. • We are subject to a number of laws and regulations, which could impact our business. • We may pursue acquisitions to expand our business, and if any of those acquisitions are unsuccessful, our business may be harmed. • We may experience damage or destruction to our distribution centers, which may harm our business. • We are dependent on our management team, and the loss of one or more key employees could harm our business. • Our corporate cost-cutting initiatives and headcount reductions could disrupt our business and may not achieve our objectives. • Labor-related matters, including labor disputes, may adversely affect our operations. • Our business, including our costs and supply chain, is subject to risks associated with outsourcing, manufacturing, warehousing, distribution, infrastructure and logistics to third-party providers, and the loss of any of our key suppliers or logistical service providers could negatively impact our business. • Shipping is a critical part of our business and any changes in our shipping arrangements or any interruptions in shipping could adversely affect our operating results. • Risks associated with the outsourcing of our customer interface platform, fulfillment process and other technology-related functions could materially and adversely affect our business. 13 Table of Contents • We are subject to risks related to online payment methods, including third-party payment processing-related risks. • We may be unable to adequately obtain, maintain, protect, defend and enforce our intellectual property rights. • We rely on trademark, copyright, and patent law, trade secret protection, and confidentiality and/or license agreements with our employees, customers, and others to protect our proprietary rights. • We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. • Indemnity provisions in various agreements to which we are party potentially expose us to substantial liability for infringement, misappropriation or other violation of intellectual property rights. • We must successfully maintain, scale and upgrade our information technology systems, and our failure to do so could have an adverse effect on our business. • If we (or our vendors) are unable to protect against or adequately respond to mitigate the impacts of a service interruption, data corruption, or cybersecurity attack, our operations could be disrupted, our reputation may be harmed and we could face significant costs to remediate the incident and defend against claims by business partners, customers, or regulators. • We use open source software in our platform, which may subject us to additional risks and harm our intellectual property. • The actual or perceived failure by us or our vendors to comply with applicable privacy and data protection laws, regulations or industry standards could have an adverse effect on our business, financial condition, results of operations and prospects. • Changes in existing laws or regulations or related official guidance, or the adoption of new laws or regulations or guidance, including the implementation of tariffs, may increase our costs and otherwise adversely affect our business, financial condition, results of operations and prospects. • Failure by our network of ecommerce partners, suppliers or manufacturers to comply with laws and regulations, or with the specifications and requirements of our products, may adversely affect our business. • Our status as a public benefit corporation and a Certified B Corporation may not result in anticipated benefits. • As a public benefit corporation, our duty to balance a variety of interests may result in actions that do not maximize stockholder value. • As a public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on our financial condition and results of operations. • We and our directors and executive officers may be subject to litigation.
You should consider carefully the risks and uncertainties described in Part 1, Item 1A, “Risk Factors” in this Annual Report on Form 10-K as part of your evaluation of an investment in our securities.
You should consider carefully the risks and uncertainties described in this Part 1, Item 1A, “Risk Factors” in this Annual Report on Form 10-K as part of your evaluation of an investment in our securities.
Some of the factors that may negatively influence consumer spending include high levels of unemployment; higher consumer debt levels; reductions in net worth, declines in asset values, and related market uncertainty; home foreclosures and reductions in home values; fluctuating interest rates and credit availability; fluctuating fuel and other energy costs; tariffs, fluctuating commodity prices; the high rate of inflation and general uncertainty regarding the overall future political and economic environment.
Some of the factors that may negatively influence consumer spending include high levels of unemployment; higher consumer debt levels; reductions in net worth, declines in asset values, and related market uncertainty; home foreclosures and reductions in home values; fluctuating interest rates and credit availability; fluctuating fuel and other energy costs; tariffs, fluctuating commodity prices; the rate of inflation and general uncertainty regarding the overall future political and economic environment.
We have historically acquired a significant number of our customers through digital advertising on social media channels owned by Meta and Alphabet that may, along with other social media platforms we may engage, terminate their agreements with us at any time or introduce factors beyond our control, such as such as adjustments to algorithms that may decrease user engagement or negatively affect our ability to reach a broad audience; increase pricing; and change their policies which may have the effect of negatively impacting advertising through these channels, all of which could impact our ability to attract new customers.
We have historically acquired a significant number of our customers through digital advertising on social media channels owned by Meta and Alphabet that may, along with other social media platforms we may engage, terminate their agreements with us at any time or introduce factors beyond our control, such as adjustments to algorithms that may decrease user engagement or negatively affect our ability to reach a broad audience; increase pricing; and change their policies which may have the effect of negatively impacting advertising through these channels, all of which could impact our ability to attract new customers.
Some of these indemnity agreements provide for uncapped liability and some indemnity provisions survive termination or expiration of the applicable agreement. As we continue to grow, the possibility of infringement claims and other intellectual property rights claims against us may increase.
Some of these indemnity agreements provide for uncapped liability and some indemnity provisions survive termination or expiration of the applicable agreement. As we continue to grow, the possibility of infringement claims and other intellectual property rights against us may increase.
The value of our securities, including our Class A Common Stock and our warrants, may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • variations in our operating performance, disruptions to our operations or the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual results of operations; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements, and our filings with the SEC; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations affecting our business; • commencement of, or involvement in, or the cost of resolving government investigations or litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Class A Common Stock available for public sale; and 37 Table of Contents • general economic and political conditions such as recessions, interest rates, fuel prices and general inflationary pressures, foreign currency fluctuations, international tariffs, social, political, and economic risks, and acts of war or terrorism.
The value of our securities, including our Class A Common Stock and our warrants, may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • variations in our operating performance, disruptions to our operations or the performance of our competitors in general; 37 Table of Contents • actual or anticipated fluctuations in our quarterly or annual results of operations; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements, and our filings with the SEC; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations affecting our business; • commencement of, or involvement in, or the cost of resolving government investigations or litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Class A Common Stock available for public sale; and • general economic and political conditions such as recessions, interest rates, fuel prices and general inflationary pressures, foreign currency fluctuations, international tariffs, social, political, and economic risks, and acts of war or terrorism.
These challenges have been compounded by recent trends in the macroeconomic environment, with increased inflationary pressure on consumer spending, increased interest rates and reduced access to capital constraining liquidity, all of which may cause us to reduce spending in areas that historically drive growth and which could materially adversely affect our business.
These challenges have been compounded by recent trends in the macroeconomic environment, with tariffs, increased inflationary pressure on consumer spending, increased interest rates and reduced access to capital constraining liquidity, all of which may cause us to reduce spending in areas that historically drive growth and which could materially and adversely affect our business.
In addition, our operations may not provide sufficient cash to meet the repayment obligations of our debt incurred under our loan agreements. • If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline. • We face significant expenses and administrative burdens as a public company, which could have an adverse effect on our business, financial condition and results of operations. • If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy of our reported financial information and this may lead to a decline in our stock price. • Delaware law and our governing documents contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable. • Our Certificate of Incorporation, as amended, designates a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, stockholders, employees, or agents.
In addition, our operations may not provide sufficient cash to meet the repayment obligations of our debt. • If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline. • We face significant expenses and administrative burdens as a public company, which could have an adverse effect on our business, financial condition and results of operations. • If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy of our reported financial information and this may lead to a decline in our stock price. • Delaware law and our governing documents contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable. • Our Certificate of Incorporation, as amended, designates a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, stockholders, employees, or agents.
We may incur additional expenses and our reputation could be harmed if consumers and potential consumers believe that our products do not meet their expectations, are not properly labeled or are damaged.
We may incur additional expenses and our reputation could be harmed if consumers believe that our products do not meet their expectations, are not properly labeled or are damaged.
If this were to occur, we could face significant material adverse consequences, including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that our Class A Common Stock is a “penny stock” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; • a decreased ability to issue additional securities or obtain additional financing in the future; and 40 Table of Contents • the triggering of an Event of Default as defined in the debt facility that we are a party to.
If this were to occur, we could face significant material adverse consequences, including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that our Class A Common Stock is a “penny stock” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; • a decreased ability to issue additional securities or obtain additional financing in the future; and • the triggering of an Event of Default as defined in the debt facility that we are a party to.
Our ability to achieve profitable growth in the future depends on a number of factors, including our ability to increase awareness of our brand and successfully compete with other companies; price our products effectively so that we are able to attract new consumers and expand sales to our existing consumers; continue to innovate and introduce new products; maintain and improve our technology platform supporting our e-commerce business; expand our supplier and fulfillment capacities; drive operational efficiency; and maintain quality control over our product offerings.
Our ability to achieve profitable growth in the future depends on a number of factors, including our ability to increase awareness of our brand and successfully compete with other companies; price our products effectively so that we are able to attract new consumers and expand sales to our existing consumers; continue to innovate and introduce new products; maintain and improve our technology platform supporting our ecommerce business; expand our supplier and fulfillment capacities; drive operational efficiency; and maintain quality control over our product offerings.
If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card payments from consumers or facilitate other types of online payments.
If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use 27 Table of Contents payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card payments from consumers or facilitate other types of online payments.
Our current and potential competitors include: (1) companies that sell household and personal care products online and in physical stores; (2) physical, e-commerce, and omnichannel retailers, vendors, distributors, and manufacturers of the products we offer and sell to consumers; and (3) web search engines, comparison shopping websites, social networks, and other online and app-based means of discovering, using, or acquiring goods, either directly or in collaboration with other retailers.
Our current and potential competitors include: (1) companies that sell household and personal care products online and in physical stores; (2) physical, ecommerce, and omnichannel retailers, vendors, distributors, and manufacturers of the products we offer and sell to consumers; and (3) web search engines, comparison shopping websites, social networks, and other online and app-based means of discovering, using, or acquiring goods, either directly or in collaboration with other retailers.
For example, in December 2009, the FTC substantially revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides”) to eliminate a safe harbor principle that formerly recognized that advertisers could publish consumer testimonials that conveyed truthful but extraordinary results from using the advertiser’s product as long as the advertiser clearly and conspicuously disclosed that the endorser’s results were not typical.
For example, in December 2009, the FTC substantially revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides”) to eliminate a safe harbor principle that formerly recognized that advertisers could publish consumer testimonials that conveyed truthful but extraordinary results from using the advertiser’s product as long as the advertiser clearly and conspicuously disclosed that the endorser’s results were not 34 Table of Contents typical.
At the federal level, the United States Congress is also considering various proposals for comprehensive federal data privacy legislation and, while no comprehensive federal data privacy law currently exists, we are subject to applicable existing federal laws and regulations, such as the rules and regulations promulgated under the authority of the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to data privacy and security.
At the federal level, the United States Congress is also considering various proposals for comprehensive federal data privacy legislation and, while no comprehensive federal data privacy law currently exists, we are subject to applicable existing federal laws and regulations, such as the rules and regulations promulgated under the authority of the FTC, which regulates unfair or deceptive acts or practices, including with respect to data privacy and security.
It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.
It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. 43 Table of Contents
If our charge-back rate becomes excessive, card associations also may require us to pay fines or refuse to process our transactions. In 27 Table of Contents addition, we may be subject to additional fraud risk if third-party service providers or our employees fraudulently use consumer information for their own gain or facilitate the fraudulent use of such information.
If our charge-back rate becomes excessive, card associations also may require us to pay fines or refuse to process our transactions. In addition, we may be subject to additional fraud risk if third-party service providers or our employees fraudulently use consumer information for their own gain or facilitate the fraudulent use of such information.
Our ability to amend the terms of the Public Warrants with the consent of at least 65% of the then-outstanding Public Warrants is unlimited; however, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, convert the Warrants into cash, shorten the exercise period, or decrease the number of shares of our Class A Common Stock purchasable upon exercise of a Warrant.
Our ability to amend the terms of the Public Warrants with the consent of at least 65% of the then-outstanding Public Warrants is unlimited; however, examples of such amendments could be amendments to, among other 38 Table of Contents things, increase the exercise price of the Warrants, convert the Warrants into cash, shorten the exercise period, or decrease the number of shares of our Class A Common Stock purchasable upon exercise of a Warrant.
Product recalls could result in significant losses due to their costs, the destruction of product inventory, lost sales due to the unavailability of the product for a period of time and potential loss of existing - ecommerce partners or consumers, negative publicity and a potential negative impact on our ability to attract new consumers due to negative consumer experiences or because of an adverse impact on our brand and reputation.
Product recalls could result in significant losses due to their costs, the destruction of product inventory, lost sales due to the unavailability of the product for a period of time and potential loss of existing - ecommerce partners or 22 Table of Contents consumers, negative publicity and a potential negative impact on our ability to attract new consumers due to negative consumer experiences or because of an adverse impact on our brand and reputation.
The 21 Table of Contents harm may be immediate without affording us an opportunity for redress or correction and could have a material adverse effect on our business, results of operations, financial condition, and prospects. Failure to introduce new products that meet the expectations of our customers may adversely affect our ability to continue to grow.
The harm may be immediate without affording us an opportunity for redress or correction and could have a material adverse effect on our business, results of operations, financial condition, and prospects. Failure to introduce new products that meet the expectations of our customers may adversely affect our ability to continue to grow.
All of the products we offer are supplied or manufactured by a limited number of third-party suppliers and manufacturers, and as a result, we may be subject to price fluctuations or supply disruptions. Our operating results would be negatively impacted by increases in the costs of our products, and we have no guarantees that costs will not rise.
A significant portion of the products we offer are supplied or manufactured by a limited number of third-party suppliers and manufacturers, and as a result, we may be subject to price fluctuations or supply disruptions. Our operating results would be negatively impacted by increases in the costs of our products, and we have no guarantees that costs will not rise.
Because the purchase price per share to be paid by Yorkville for the shares of common stock that we may elect to sell under the Equity Purchase Agreement will fluctuate based on the market prices of our common stock during the applicable pricing period for each of those sales, it is not possible for us to predict, as of the date of this report and prior to any such sales, the number of shares of common stock that we will sell under the Equity Purchase Agreement, the purchase price per share or the aggregate gross proceeds that we will receive from those purchases under the Equity Purchase Agreement.
Because the purchase price per share to be paid by Yorkville for the shares of common stock that we may elect to sell under the Amended SEPA will fluctuate based on the market prices of our common stock during the applicable pricing period for each of those sales, it is not possible for us to predict, as of the date of this report and prior to any such sales, the number of shares of common stock that we will sell under the Amended SEPA, the purchase price per share or the aggregate gross proceeds that we will receive from those purchases under the Amended SEPA.
However, any of these parties may breach their agreements with us and disclose information improperly. In addition, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how and trade secrets or each party that has developed intellectual property on our behalf.
However, any of these parties may breach their agreements with us and disclose information improperly. In addition, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how and trade secrets or each party 29 Table of Contents that has developed intellectual property on our behalf.
In 34 Table of Contents October 2021, California passed a new environmental marketing law banning recyclability claims unless a product and/or its packaging meets specifically enumerated benchmarks focused on the practical realities of the recycling process; the benchmarks may be more stringent than those currently imposed by the FTC’s Green Guides.
In October 2021, California passed a new environmental marketing law banning recyclability claims unless a product and/or its packaging meets specifically enumerated benchmarks focused on the practical realities of the recycling process; the benchmarks may be more stringent than those currently imposed by the FTC’s Green Guides.
We must successfully maintain, scale and upgrade our information technology systems, and our failure to do so could have an adverse effect on our business, financial condition, results of operations and prospects. We continue to invest in and implement upgrades to our systems and procedures, including building new policies, procedures, training programs and monitoring tools.
We must successfully maintain, scale and upgrade our information technology systems, and our failure to do so could have an adverse effect on our business, financial condition, results of operations and prospects. 30 Table of Contents We continue to invest in and implement upgrades to our systems and procedures, including building new policies, procedures, training programs and monitoring tools.
Risks Related to Ownership of Our Securities • The price of our Class A Common Stock and warrants may be volatile. • Warrants are or may become exercisable for shares of our common stock, and additional shares of our common stock may become issuable, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. • The Public Warrants may never be in the money, and they may expire worthless and the terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment. • We may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to holders of the Public Warrants, thereby making the Public Warrants worthless. • Our taking advantage of certain exemptions from disclosure requirements available to “emerging growth companies” under the Securities Act of 1993, as amended, could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. • We may incur debt or assume contingent or other liabilities or dilute our stockholders in connection with acquisitions or strategic alliances. • Future sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for our Class A Common Stock to decline. • The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. • Because there are no current plans to pay cash dividends on our Class A Common Stock for the foreseeable future, holders of our Class A Common Stock may not receive any return on investment unless such holders sell their Class A Common Stock for a price greater than that which such holder paid for it. • The Series A Preferred Stock and Series A′ Preferred Stock contains rights, preferences and privileges that may limit our business flexibility or reduce the value of our Class A Common Stock • Covenants and other provisions in our loan agreements restrict our business and operations in many ways, and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely 14 Table of Contents affected.
Risks Related to Ownership of Our Securities • The price of our Class A Common Stock and warrants may be volatile. • Warrants are or may become exercisable for shares of our common stock, and additional shares of our common stock may become issuable, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. • The Public Warrants may never be in the money, and they may expire worthless and the terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment. • We may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to holders of the Public Warrants, thereby making the Public Warrants worthless. • Our taking advantage of certain exemptions from disclosure requirements available to “emerging growth companies” under the Securities Act of 1933, as amended, could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. • We may incur debt or assume contingent or other liabilities or dilute our stockholders in connection with acquisitions or strategic alliances. • Future sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for our Class A Common Stock to decline. • The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. • We have no current plans to pay cash dividends on our Class A Common Stock for the foreseeable future, and holders of our Class A Common Stock may not receive any return on their investment. • The Series A Preferred Stock and Series A′ Preferred Stock contains rights, preferences and privileges that may limit our business flexibility or reduce the value of our Class A Common Stock 14 Table of Contents • Covenants and other provisions in our loan agreements restrict our business and operations, and if we do not effectively manage our covenants, our financial conditions and results of operations could be adversely affected.
Any of the above circumstances or events may possibly cause customers to stop purchasing our products, impair our ability to increase revenue from existing customers, impair our ability to grow our customer base and otherwise harm our business, financial condition and results of operations. Our quarterly operating results fluctuate, which could cause our stock price to decline.
Any of the above circumstances or events may possibly cause customers to stop purchasing our products, impair our ability to increase revenue from existing customers, impair our ability to grow our customer base and otherwise harm our business, financial condition and results of operations. 17 Table of Contents Our quarterly operating results fluctuate, which could cause our stock price to decline.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no 29 Table of Contents right to prevent them from using that technology or information to compete with us, and our competitive position would be materially and adversely harmed.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us, and our competitive position would be materially and adversely harmed.
Competition may adversely affect our business, operating results and financial condition. 19 Table of Contents Competition in the natural and sustainable consumer products market presents an ongoing threat to the success of our business. The number of companies entering the natural and sustainable consumer products market with offerings similar to ours continues to increase.
Competition may adversely affect our business, operating results and financial condition. 19 Table of Contents Competition in the natural, sustainable and wellness consumer products markets presents an ongoing threat to the success of our business. The number of companies entering the natural, sustainable, and wellness consumer products markets with offerings similar to ours continues to increase.
Any such derivative litigation may be costly and have an adverse impact on our financial condition and results of operations. 36 Table of Contents We and our directors and executive officers may be subject to litigation for a variety of claims, which could harm our reputation and adversely affect our business, results of operations and financial condition.
Any such derivative litigation may be costly and have an adverse impact on our financial condition and results of operations. We and our directors and executive officers may be subject to litigation for a variety of claims, which could harm our reputation and adversely affect our business, results of operations and financial condition.
If we or our distribution partners do not successfully optimize, operate and manage the expansion of the capacity of our warehouse fulfillment centers, our business, financial condition, results of operations and prospects could be adversely affected. We operate warehouse fulfillment centers located in Reno, Nevada and Elizabethtown, Pennsylvania. . We closed our St.
If we or our distribution partners do not successfully optimize, operate and manage our warehouse fulfillment centers, our business, financial condition, results of operations and prospects could be adversely affected. We operate warehouse fulfillment centers located in Reno, Nevada and Elizabethtown, Pennsylvania. . We closed our St.
If customers do not perceive our e-commerce service or products to be reliable, sustainable and of high quality, if we fail to introduce new and improved products and services, or if we introduce new products or services that are not favorably received by the market, we may not be able to attract or retain customers.
If customers do not perceive our ecommerce service or products to be reliable, sustainable and of high quality, if we fail to introduce new and improved products and services, or if we introduce new products or services that are not favorably received by the market, we may not be able to attract or retain customers.
We collect, store, share, use, retain, safeguard, transfer, analyze and otherwise process, and our vendors process on our behalf, personal information, confidential information and other information necessary to provide and deliver our products through our e-commerce channel to operate our business, for legal and marketing purposes, and for other business-related purposes.
We collect, store, share, use, retain, safeguard, transfer, analyze and otherwise process, and our vendors process on our behalf, personal information, confidential information and other information necessary to provide and deliver our products through our ecommerce channel to operate our business, for legal and marketing purposes, and for other business-related purposes.
The CCPA, requires companies that process information of California residents to make new disclosures to consumers about their data collection, use and sharing practices, allows consumers to opt out of the sale of personal information with third parties and prohibits covered businesses from discriminating against California residents (for example, charging more for services) for exercising any of their rights under the CCPA.
The CCPA, requires companies that process information of California residents to make disclosures to consumers about their data collection, use and sharing practices, allows consumers to opt out of the 33 Table of Contents sale of personal information with third parties and prohibits covered businesses from discriminating against California residents (for example, charging more for services) for exercising any of their rights under the CCPA.
Furthermore, if we were to combine our proprietary platform with open source software in a certain manner, we could, under certain of the open source licenses, be required to release the source code of our proprietary platform to the public or offer our platform to users at no cost.
Furthermore, if we were to combine our proprietary platform with open source software 32 Table of Contents in a certain manner, we could, under certain of the open source licenses, be required to release the source code of our proprietary platform to the public or offer our platform to users at no cost.
Additionally, in no event may we sell more than 6,511,532 shares of our common stock to Yorkville under the Equity Purchase Agreement, which number of shares is equal to 19.99% of the shares of the Company's common stock outstanding immediately prior to the execution of the Equity Purchase Agreement (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the Equity Purchase Agreement.
Additionally, in no event may we sell more than 6,511,532 shares of our common stock to Yorkville under the Amended SEPA, which number of shares is equal to 19.99% of the shares of the Company's common stock outstanding immediately prior to the execution of the Amended SEPA (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the Amended SEPA.
We compete based on various product attributes, including sustainability, price, and quality. We compete with producers of household and personal care products and e-commerce and traditional sales outlets for these products. Some of our competitors are also our partners and we distribute their products.
We compete based on various product attributes, including sustainability, price, and quality. We compete with producers of household and personal care products and ecommerce and traditional sales outlets for these products. Some of our competitors are also our partners and we distribute their products.
Our success depends substantially upon the continued services of our executive officers and other key members of management, particularly our Chief Executive Officer. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives.
Our success depends substantially upon the continued services of our executive officers and other key members of management, particularly our Chief Executive Officer. From time to time, there may be changes relating to our executive management team and key employees resulting from the hiring or departure of executives and key employees.
Summary of Risk Factors Below is a summary of some of the material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks and uncertainties that we face. The risk factors summarized is qualified in its entirety by those more complete discussions of such risks and uncertainties.
Summary of Risk Factors Below is a summary of some of the material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks and uncertainties that we face. The risk factors summarized are qualified in their entirety by those more complete discussions of such risks and uncertainties that follow.
In the United States, our obligations include rules and regulations promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the CCPA and other state and federal laws relating to privacy and data security.
In the United States, our obligations include rules and regulations promulgated under the authority of the FTC, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the CCPA and other state and federal laws relating to privacy and data security.
In addition, any unsuccessful effort may adversely affect our brand and reputation. If our efforts to attract new customers and engage existing customers with new and enhanced products are unsuccessful or if such efforts are more costly than we expect, our business may be harmed and our potential for growth may be impaired.
In addition, any unsuccessful effort may adversely affect our brand and reputation. If our efforts to attract new customers and 21 Table of Contents engage existing customers with new and enhanced products are unsuccessful or if such efforts are more costly than we expect, our business may be harmed and our potential for growth may be impaired.
We are a public benefit corporation incorporated under Delaware law. As a public benefit corporation, we are required to balance the financial interests of our stockholders with the best interests of those stakeholders materially affected by our conduct, including particularly those affected by the specific benefit purposes set forth in our Certificate of Incorporation, as amended (“Charter”).
As a public benefit corporation, we are required to balance the financial interests of our stockholders with the best interests of those stakeholders materially affected by our conduct, including particularly those affected by the specific benefit purposes set forth in our Certificate of Incorporation, as amended (“Charter”).
Moreover, no assurance can be given that these agreements will be effective in controlling access to, distribution, use, misuse, misappropriation, reverse engineering or disclosure of our proprietary information, know-how and trade secrets, platform or confidential information. Further, these agreements may not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings.
Moreover, these agreements may not be effective in controlling access to, distribution, use, misuse, misappropriation, reverse engineering or disclosure of our proprietary information, know-how and trade secrets, platform or confidential information. Further, these agreements may not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings.
While we may continue to opportunistically seek access to additional funds by utilizing the Equity Purchase Agreement, through additional public or private equity offerings or debt financings, through partnering or other strategic arrangements, or a combination of the foregoing, additional funds may not be available when we need them on terms that are acceptable to us, or at all.
While we may opportunistically seek access to additional funds by utilizing the Amended SEPA, through additional public or private equity offerings or debt financings, through partnering or other strategic arrangements, or a combination of the foregoing, additional funds may not be available when we need them on terms that are acceptable to us, or at all.
In effecting the transition, we have experienced and expect to continue experiencing disruptions to platform operations, including user experience, inventory management, fulfillment operations and payment processing, among other risks.
In effecting the transition, we have experienced and expect to continue experiencing disruptions to platform operations, including user experience, inventory management, fulfillment operations and payment processing, among others.
In addition, if we do not have sufficient fulfillment capacity or experience a problem fulfilling orders in a timely manner, our consumers may experience delays in receiving their purchases, which could harm our reputation and our relationship with our consumers.
In addition, 26 Table of Contents if we do not have sufficient fulfillment capacity or experience a problem fulfilling orders in a timely manner, our consumers may experience delays in receiving their purchases, which could harm our reputation and our relationship with our consumers.
If and when the Public Warrants 38 Table of Contents become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Historically, we have relied on a homegrown e-commerce platform that required ongoing investment to stay current with industry trends and consumer expectations.
Historically, we have relied on a homegrown ecommerce platform that required ongoing investment to stay current with industry trends and consumer expectations.
Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, warehousing, distribution, infrastructure and logistics to third-party providers, and the loss of any of our key suppliers or logistical service providers could negatively impact our business.
Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing, warehousing, distribution, infrastructure and logistics to third-party providers, some of which are located internationally, and the loss of any of our key suppliers or logistical service providers could negatively impact our business.
Changes to our DTC business designed to attract new customers and retain existing customers, including, but not limited to expanded shopping personalization, non-subscription options, and user generated and editorial content may not perform as well as our historical DTC platform which could negatively impact our results of operations. We recently updated our e-commerce experience.
Changes to our DTC business designed to attract new customers and retain existing customers, including, but not limited to, expanded shopping personalization, non-subscription options, and user generated and editorial content may not perform as well as our historical DTC platform which could negatively impact our results of operations.
We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to generate sufficient revenue to achieve and maintain profitability. We have incurred significant losses since our inception. For the years ended December 31, 2024 and 2023 we incurred net losses of $27.4 million and $43.2 million , respectively.
We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to generate sufficient revenue to achieve and maintain profitability. We have incurred significant losses since our inception. For the years ended December 31, 2025 and 2024 we incurred net losses of $11.7 million and $27.4 million , respectively.
We maintain liability insurance; however, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.
Our liability insurance coverage may not be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.
For example, the Trump administration’s adoption of tariffs could negatively impact us if the tariff applies to goods we source or manufacture in other countries. For example, we have manufacturing relationships in China, Mexico and Canada.
For example, the current presidential administration’s implementation of tariffs could negatively impact us if the tariff applies to goods we source or manufacture in other countries. For example, we have manufacturing relationships in China, Mexico and Canada.
In addition, although we carry general liability insurance, but our insurance may not be adequate to indemnify us for all liability that may be imposed or otherwise protect us from liabilities or damages with respect to claims alleging compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.
Our insurance may not be adequate to indemnify us for all liability that may be imposed or otherwise protect us from liabilities or damages with respect to claims alleging compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.
We pursue the registration of certain aspects of our intellectual property in the U.S. and other countries. As we apply to register our unregistered trademarks in the U.S. and other countries, our applications may not be allowed for registration in a timely fashion or at all, and our registered trademarks may not be maintained or enforced.
As we apply to register our unregistered trademarks in the U.S. and other countries, our applications may not be allowed for registration in a timely fashion or at all, and our registered trademarks may not be maintained or enforced.
Because the techniques used by hackers change frequently, we may be unable to anticipate these techniques or implement adequate preventive measures.
Because the techniques used by hackers change frequently, we may be 31 Table of Contents unable to anticipate these techniques or implement adequate preventive measures.
While we regularly defend against and respond to cybersecurity threats and attacks, our efforts to contain, mitigate and remediate a data security incident may not be successful, resulting in unexpected interruptions, delays, cessation of service, negative publicity, and other harm to our business and our competitive position.
Our defense measures against cybersecurity threats and attacks and efforts to contain, mitigate and remediate a data security incident may not be successful, resulting in unexpected interruptions, delays, cessation of service, negative publicity, and other harm to our business and our competitive position.
As litigation is inherently unpredictable, we cannot assure you that any potential claims or disputes will not harm our business, results of operations and financial condition. The results of regulatory proceedings, litigation, claims, and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment.
As litigation is inherently unpredictable, potential claims or disputes may harm our business, results of operations and financial condition. The results of regulatory proceedings, litigation, claims, and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.
If an analyst ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.
There can be no assurance that any limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages. We could be required to fundamentally change our business activities and practices in response to a security breach or related regulatory actions or litigation, which could have an adverse effect on our business.
The limitations of liability in our contracts may not be enforceable or adequate or would otherwise protect us from liabilities or damages. We could be required to fundamentally change our business activities and practices in response to a security breach or related regulatory actions or litigation, which could have an adverse effect on our business.
If our employees decide to form or affiliate with a union, we cannot predict the negative effects such future organizational activities will have on our business and operations.
None of our employees are currently represented by a union. If our employees decide to form or affiliate with a union, we cannot predict the negative effects such future organizational activities will have on our business and operations.
If they are not, our business, operating results and financial condition will be harmed. 20 Table of Contents Other factors may reduce our ability to acquire, maintain and further engage with customers, including the effectiveness of our marketing efforts and other expenditures we make to continue to acquire new customers and maintain and increase engagement with existing customers; system updates to app stores and advertising platforms; changes in search algorithms by search engines; the development of new search engines or social media sites that reduce traffic on existing search engines and social media sites; and changes in consumer behavior.
Other factors may reduce our ability to acquire, maintain and further engage with customers, including the effectiveness of our marketing efforts and other expenditures we make to continue to acquire new customers and maintain and increase engagement with existing customers; system updates to app stores and advertising platforms; changes in 20 Table of Contents search algorithms by search engines; the development of new search engines or social media sites that reduce traffic on existing search engines and social media sites; and changes in consumer behavior.
As of December 31, 2024, the aggregate number of shares of our Class A Common Stock reserved for future issuance under our Incentive Equity Plan is 5,182,186 . The Compensation Committee of the board of directors may determine the exact number of shares to be reserved for future issuance under our equity incentive plans at its discretion.
As of December 31, 2025 , the aggregate number of shares of our Class A Common Stock reserved for future issuance under our Incentive Equity Plan is 6,338,929 . The Compensation Committee of the board of directors may determine the exact number of shares to be reserved for future issuance under our equity incentive plans at its discretion.
Furthermore, our reliance on suppliers and manufacturers outside of the United States, many of which are located in China, the number of third parties with whom we transact and the number of jurisdictions to which we sell complicates our efforts to comply with customs duties and excise taxes and any failure to comply could adversely affect our business.
Furthermore, our reliance on suppliers and manufacturers outside of the United States, many of which are located in China, complicates our efforts to comply with customs duties and excise taxes and any failure to comply could adversely affect our business.
We do not have employment agreements with any of our executive officers or key management personnel and, therefore, they could terminate their employment with us at any time. We do not maintain key person life insurance policies on any of our employees.
Such changes may be disruptive to our business. We do not have employment agreements with any of our executive officers or key management and, therefore, they could terminate their employment with us at any time. We do not maintain key person life insurance policies on any of our employees.
False or misleading marketing claims concerning a product’s registration or its efficacy may also create the risk for challenges under federal or state law. 16 Table of Contents After a number of years of rapid growth, in recent years we have seen substantial declines in our revenues and business operations, particularly as we have shifted our operating strategy to achieve profitability.
False or misleading marketing claims concerning a product’s registration or its efficacy may also create the risk for challenges under federal or state law. 16 Table of Contents In recent years we have seen substantial declines in our revenues and business operations, particularly as we have shifted our operating strategy in an effort to become Adjusted EBITDA profitable.
In addition, there is no assurance that the expected positive impact from being a public benefit corporation will be realized. Accordingly, being a public benefit corporation and complying with our related obligations could negatively impact our ability to provide the highest possible return to our stockholders.
In addition, the expected positive impact from being a public benefit corporation may not be realized. Accordingly, being a public benefit corporation and complying with our related obligations could negatively impact our ability to provide the highest possible return to our stockholders.
The shares of our common stock 18 Table of Contents that may be issued under the Equity Purchase Agreement may be sold by us to Yorkville at our discretion from time to time and sales of our common stock under the Equity Purchase Agreement will depend upon market conditions and other factors.
The shares of our common stock that may be issued under the Amended SEPA may be sold by us to Yorkville at our discretion from time to time and sales of our common stock under the Amended SEPA will depend upon market conditions and other factors.
We strive to adapt our marketing efforts to evolving legal and regulatory requirements and related guidance; however, we may not always anticipate or timely identify changes in regulation or official guidance that could impact our business, with the result that we could be subject to litigation and enforcement actions that could adversely affect our business, financial condition, results of operations and prospects.
We may not always anticipate or timely identify changes in regulation or official guidance that could impact our business, with the result that we could be subject to litigation and enforcement actions that could adversely affect our business, financial condition, results of operations and prospects.
In addition, since the onset of the COVID-19 pandemic, our personnel are often working remotely and relying on their own equipment, which may pose additional data security risks to networks, systems and data.
In addition, our personnel are often working remotely and relying on their own equipment, which may pose additional data security risks to networks, systems and data.
To, among other anticipated benefits, streamline operations, provide customers with a better shopping experience, free up resources that had been used to maintain standard ecommerce functionality, support brand growth by improving onsite conversion and unlock continuous innovation, we have begun migrating our legacy platform to Shopify and other providers that provide services that are used with Shopify.
To, among other anticipated benefits, streamline operations, provide customers with a better shopping experience, free up resources that had been used to maintain standard ecommerce functionality, support brand growth by improving onsite conversion and unlock continuous innovation, we migrated the operation of our legacy platform to third-party technology providers.
If we are unable to achieve profitable growth in the future, our business prospects and our stock price could be adversely affected. From our launch in 2012 through 2021, we experienced rapid growth in our revenues and expansion of our business operations. Beginning in 2022, we have experienced sequential declines in revenues.
If we are unable to achieve profitable growth in the future, our business prospects and our stock price could be adversely affected. Beginning in 2022, we have experienced sequential declines in revenues.
This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. 39 Table of Contents We may incur debt or assume contingent or other liabilities or dilute our stockholders in connection with acquisitions or strategic alliances.
This may make comparison of our financial statements with another public company which is neither an 39 Table of Contents emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 28 Table of Contents If we move into new markets and expand our products or services offerings, incumbent participants in such markets may assert their intellectual property and other proprietary rights against us as a means of slowing our entry into such markets or as a means to extract substantial license and royalty payments from us.
If we move into new markets and expand our products or services offerings, incumbent participants in such markets may assert their intellectual property and other proprietary rights against us as a means of slowing our entry into such markets or as a means to extract substantial license and royalty payments from us.
It also subjects us to new tariffs that the Trump administration may determine to adopt, which could cause disruption in our business, increased costs and reduced demand as a result of increased prices.
It also subjects us to new tariffs that have been implemented, which could cause disruption in our business, increased costs and reduced demand as a result of increased prices.
We may issue equity securities to pay for future acquisitions or strategic alliances or otherwise, which could be dilutive to existing stockholders. We may also incur debt or assume contingent or other liabilities in connection with acquisitions and strategic alliances, which could impose restrictions on our business operations and harm our operating results.
We may incur debt or assume contingent or other liabilities or dilute our stockholders in connection with acquisitions or strategic alliances. We may issue equity securities to pay for future acquisitions or strategic alliances or otherwise, which could be dilutive to existing stockholders.
While we have some disaster recovery arrangements in place, our preparations may not be adequate to account for disasters or similar events that may occur in the future and may not effectively permit us to continue operating in the event of any problems with respect to our systems or those of our third-party data centers or any other third-party facilities.
Our disaster recovery preparations and data redundancy measures may not be adequate to account for disasters or similar events that may occur in the future and may not effectively permit us to continue operating in the event of any problems with respect to our systems or those of our third-party data centers or any other third-party facilities and our business interruption insurance may not be sufficient to compensate us for the losses that could occur.
Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, could have an adverse effect on our business, financial condition, results of operations and prospects. 35 Table of Contents Our status as a public benefit corporation and a Certified B Corporation may not result in the benefits that we anticipate.
Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, could have an adverse effect on our business, financial condition, results of operations and prospects.
Any damage to, failure of or interference with our cloud service that is hosted by us, AWS or by third-party providers we may utilize in the future, whether as a result of our actions, actions by the third-party data centers, actions by other third parties, or acts of God, could result in interruptions in our cloud service and/or the loss of our or our customers’ data, including 25 Table of Contents personal information.
Any damage to, failure of or interference with cloud services we use, whether as a result of our actions, actions by the third-party data centers, actions by other third parties, or acts of God, could result in interruptions in our cloud service and/or the loss of our or our customers’ data, including personal information.
In the event of actual or alleged non-compliance, we might be forced to find alternative partners, suppliers or manufacturers and we may be subject to lawsuits and/or regulatory enforcement actions related to such non-compliance.
Additionally, our partners, suppliers and manufacturers are required to maintain the quality of our products and to comply with our standards and specifications. In the event of actual or alleged non-compliance, we might be forced to find alternative partners, suppliers or manufacturers and we may be subject to lawsuits and/or regulatory enforcement actions related to such non-compliance.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe strive to ensure ongoing compliance with the requirements under applicable standards including the Payment Card Industry Data Security Standards and relevant data privacy and protection laws and regulations. Additionally, our teams reference the standards, guidelines, and practices from the NIST Cybersecurity Framework (CSF) to align our cybersecurity program and risk management practices.
Biggest changeWe strive to manage ongoing compliance with the requirements under applicable standards and relevant data privacy and protection laws and regulations. Additionally, our teams reference the standards, guidelines, and practices from the NIST Cybersecurity Framework (CSF) to align our cybersecurity program and risk management practices.
Our team of cybersecurity professionals then collaborate with other stakeholders across our organization to further analyze the risk to the Company and form detection, mitigation and remediation strategies. We are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition.
Our team of cybersecurity professionals then collaborate with other stakeholders across our organization to further analyze the risk to us and form detection, mitigation and remediation strategies. We are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition.
We face risks from cybersecurity threats that, if realized, are reasonably likely to 44 Table of Contents materially affect us, including our operations, business strategy, results of operations, or financial condition. For additional information, see Part I, Item 1A, Risk Factors-Risks Related to Our Business.
We face risks from cybersecurity threats that, if realized, are reasonably likely to 45 Table of Contents materially affect us, including our operations, business strategy, results of operations, or financial condition. For additional information, see Part I, Item 1A, Risk Factors-Risks Related to Our Business.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe are no longer utilizing a 138,550 square foot space in Missouri which was previously used as one of our fulfillment centers, we are actively marketing this space for sublease. We believe our current properties are more than sufficient for our needs.
Biggest changeWe lease fulfillment centers in Pennsylvania and Nevada that represent approximately a combined 488,000 square feet of space. We are no longer utilizing a 138,550 square foot space in Missouri which was previously used as one of our fulfillment centers, which we are subleasing to a third-party. We believe our current properties are more than sufficient for our needs.
Item 2. Properties All of our physical properties are located within the United States. Our corporate headquarters are in San Francisco, California where we lease approximately 7,800 rentable square feet of office space. The lease expires on May 31, 2027. We lease fulfillment centers in Pennsylvania and Nevada that represent approximately a combined 488,000 square feet of space.
Item 2. Properties All of our physical properties are located within the United States. Our corporate headquarters are in San Francisco, California where we lease approximately 7,800 rentable square feet of office space. We are no longer utilizing the lease space and are actively marketing the space for sublease. The lease expires on May 31, 2027.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRefer to Note 6, Commitments and Contingencies in our financial statements, included elsewhere in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None 45 Table of Contents Part II
Biggest changeRefer to Note 7, Commitments and Contingencies in our financial statements, included elsewhere in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None 46 Table of Contents Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 45 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. Selected Financial Data 46 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 64 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 46 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 47 Item 6. Selected Financial Data 47 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 48 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 64 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn February 15, 2025, all of the Company’s outstanding shares of Class B Common Stock were automatically converted into Class A Common Stock.
Biggest changeThe outstanding shares of our Class B Common Stock automatically converted to Class A Common Stock in February 2025 pursuant to our certificate of incorporation. Any outstanding options or rights to purchase Class B Common Stock also converted to options or rights to purchase Class A Common Stock at the same time.
The number of holders of record presented here also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy We have never declared or paid cash dividends on our Class A Common Stock or Class B Common Stock.
The number of holders of record presented here also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy We have never declared or paid cash dividends on our Class A Common Stock.
The actual number of holders of our Class A Common Stock and Class B Common Stock may be greater than the number of record holders, and may include stockholders who are beneficial owners, but whose shares are held in street names by brokers or other nominees.
The actual number of holders of our Class A Common Stock may be greater than the number of record holders, and may include stockholders who are beneficial owners, but whose shares are held in street names by brokers or other nominees.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is currently listed on the NYSE under the ticker symbol “GROV”. The Company’s public warrants trade on an over-the-counter exchange.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is currently listed on the NYSE under the ticker symbol “GROV”. The Company’s public warrants trade on an over-the-counter exchange. We previously had shares of Class B Common Stock outstanding.
Holders of Record As of December 31, 2024, there were 409 and 504 stockholders of record of our Class A Common Stock and Class B Common Stock, respectively.
Holders of Record As of December 31, 2025, there were 911 stockholders of record of our Class A Common Stock.
Securities Authorized For Issuance Under Equity Compensation Plans See Part III, Item 12 of this Annual Report for the required information. Recent Sales of Unregistered Securities A description of our unregistered sales of equity securities during the year ended December 31, 2024 was previously included in our Current Report on Form 8-K filed on September 23, 2024.
Securities Authorized For Issuance Under Equity Compensation Plans See Part III, Item 12 of this Annual Report for the required information. Recent Sales of Unregistered Securities There were no sales of unregistered equity securities during the year ended December 31, 2025.
Removed
This conversion occurred because, as of December 31, 2024, the aggregate number of outstanding shares of Class B Common Stock (including securities exercisable or convertible into Class B Common Stock) represented less than ten percent of all outstanding shares of Common Stock.
Removed
This calculation included both Class A Common Stock and Class B Common Stock, as well as securities exercisable for or convertible into Common Stock. After the conversion, the converted shares and securities carry identical rights, including voting rights, to those of Class A Common Stock or equivalent converted securities.

Item 7. Management's Discussion & Analysis

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

89 edited+19 added−46 removed67 unchanged
Biggest changeResults of Operations The following table sets forth our results of operations for each period presented: Year Ended December 31, 2024 2023 (in thousands) Revenue, net $ 203,425 $ 259,278 Cost of goods sold 94,077 121,919 Gross profit 109,348 137,359 Operating expenses: Advertising 10,265 21,292 Product development 18,456 16,401 Selling, general and administrative 103,174 134,929 Operating loss (22,547) (35,263) Non-operating expenses: Interest expense 12,777 16,077 Loss on extinguishment of debt 5,004 — Changes in fair value of derivative liabilities (9,888) (216) Other income, net (3,057) (7,930) Total non-operating expenses, net 4,836 7,931 Loss before provision for income taxes (27,383) (43,194) Provision for income taxes 40 38 Net loss $ (27,423) $ (43,232) 53 Table of Contents The following table sets forth our consolidated statements of operations data expressed as a percentage of net revenue: Year Ended December 31, 2024 2023 (as a percentage of revenue) Revenue, net 100 % 100 % Cost of goods sold 46 47 Gross profit 54 53 Operating expenses: Advertising 5 8 Product development 9 6 Selling, general and administrative 51 52 Operating loss (11) (13) Non-operating expenses: Interest expense 6 6 Loss on extinguishment of debt 2 — Changes in fair value of derivative liabilities (5) — Other income, net (2) (3) Total non-operating expenses, net 1 3 Loss before provision for income taxes (13) (17) Provision for income taxes — — Net loss (13) % (17) % Comparisons of the Year Ended December 31, 2024 and December 31, 2023 Revenue, Net Year Ended December 31, Change 2024 2023 Amount % (in thousands) Revenue, net: Grove Brands $ 82,942 $ 119,006 $ (36,064) (30) % Third-party products 120,483 140,272 $ (19,789) (14) % Total revenue, net $ 203,425 $ 259,278 $ (55,853) (22) % Revenue decreased by $55.9 million, or 22%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by a decrease in DTC Total Orders, partially offset by increases in DTC Net Revenue Per Order. 54 Table of Contents Cost of Goods Sold and Gross Profit Year Ended December 31, Change 2024 2023 Amount % (in thousands) Cost of goods sold $ 94,077 $ 121,919 $ (27,842) (23) % Gross profit 109,348 137,359 (28,011) (20) % Gross margin 54 % 53 % 1 % Cost of goods sold decreased by $27.8 million, or 23%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily driven by a decrease in DTC Total Orders, partially offset by higher cost of goods per order.
Biggest changeWe recognize interest and penalties related to unrecognized tax benefits, if any, as income tax expense. 53 Table of Contents Results of Operations The following table sets forth our results of operations for each period presented: Year Ended December 31, 2025 2024 (in thousands) Revenue, net $ 173,716 $ 203,425 Cost of goods sold 80,443 94,077 Gross profit 93,273 109,348 Operating expenses: Advertising 9,710 10,265 Product development 7,484 18,456 Selling, general and administrative 87,396 103,174 Operating loss (11,317) (22,547) Non-operating expenses: Interest expense 1,225 12,777 Loss on extinguishment of debt — 5,004 Changes in fair value of derivative liabilities (404) (9,888) Other income, net (455) (3,057) Total non-operating expenses, net 366 4,836 Loss before provision for income taxes (11,683) (27,383) Provision for income taxes 33 40 Net loss $ (11,716) $ (27,423) The following table sets forth our consolidated statements of operations data expressed as a percentage of net revenue: Year Ended December 31, 2025 2024 (as a percentage of revenue) Revenue, net 100 % 100 % Cost of goods sold 46 46 Gross profit 54 54 Operating expenses: Advertising 6 5 Product development 4 9 Selling, general and administrative 50 51 Operating loss (6) (11) Non-operating expenses: Interest expense 1 6 Loss on extinguishment of debt — 2 Changes in fair value of derivative liabilities — (5) Other income, net — (2) Total non-operating expenses, net 1 4 Loss before provision for income taxes (7) (13) Provision for income taxes — — Net loss (7) % (13) % 54 Table of Contents Comparisons of the Year Ended December 31, 2025 and December 31, 2024 Revenue, Net Year Ended December 31, Change 2025 2024 Amount % (in thousands) Revenue, net: Grove Brands $ 71,940 $ 82,942 $ (11,002) (13) % Third-party products 101,776 120,483 $ (18,707) (16) % Total revenue, net $ 173,716 $ 203,425 $ (29,709) (15) % Revenue decreased by $29.7 million, or 15%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily driven by a decrease in DTC Total Orders from lower advertising expenses in previous periods and disruptions related to the migration from our internally developed legacy ecommerce platform to third party service providers for the year ended December 31, 2025 compared to the prior year.
The change in operating assets and liabilities primarily resulted from a $4.3 million decrease in operating lease right-of-use assets and liabilities primarily driven by payments related to the modification of our lease at our San Francisco offices and a $5.9 million net decrease in accounts payable and accrued expenses, partially offset by a $12.5 million decrease in our inventory.
The change in operating assets and liabilities primarily resulted from a $4.3 million decrease in net operating lease right-of-use assets and liabilities primarily driven by payments related to the modification of our lease at our San Francisco offices and a $5.9 million net decrease in accounts payable and accrued expenses, partially offset by a $12.5 million decrease in our inventory.
In addition, we believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook.
GAAP (“GAAP”). In addition, we believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook.
The triggering events that will result in the vesting of the Grove Earn-Out Shares during the Earn-Out Period are the following: • 1,301,206 shares will vest if the share price of our Class A Common Stock is greater than or equal to $62.50 over any 20 trading days within any consecutive 30 trading day period during the Earn-Out Period; • 1,301,206 shares will vest, including the shares subject to the $62.50 threshold if not previously vested, if the share price of our Class A Common Stock is greater than or equal to $75.00 over any 20 trading days within any 30 consecutive trading day period during the Earn-Out Period; and • If, during the Earn-Out Period, there is a Change of Control Transaction (as defined in the Merger Agreement), then all remaining triggering events that have not previously occurred and the related vesting conditions shall be deemed to have occurred.
The triggering events that will result in the vesting of the Grove Earn-Out Shares during the Earn-Out Period are the following: • 1,301,202 shares will vest if the share price of our Class A Common Stock is greater than or equal to $62.50 over any 20 trading days within any consecutive 30 trading day period during the Earn-Out Period; • 1,301,202 shares will vest, including the shares subject to the $62.50 threshold if not previously vested, if the share price of our Class A Common Stock is greater than or equal to $75.00 over any 20 trading days within any 30 consecutive trading day period during the Earn-Out Period; and • If, during the Earn-Out Period, there is a Change of Control Transaction (as defined in the Merger Agreement), then all remaining triggering events that have not previously occurred and the related vesting conditions shall be deemed to have occurred.
The holders of the Preferred Stock are entitled to receive cumulative dividends at the rate of 6% per annum of the original issuance price of each share. Such accruing dividends are payable only when, as and if declared by our Board of Directors.
The holders of our outstanding Preferred Stock are entitled to receive cumulative dividends at the rate of 6% per annum of the original issuance price of each share. Such accruing dividends are payable only when, as and if declared by our Board of Directors.
Product Development Product development expenses are related to the ongoing support and maintenance of our proprietary technology, including our DTC platform, as well as amortization of capitalized, internally developed software, and related to the product and packaging innovation in our Grove Brands products. Product development expenses consist primarily of personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expense.
Product Development Product development expenses are related to the ongoing support and maintenance of our DTC platform, as well as amortization of capitalized, internally developed software and the product and packaging innovation in our Grove Brands products. Product development expenses consist primarily of personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expense.
For these reasons, investors should not consider Adjusted EBITDA in isolation from, or as a substitute for, net loss determined in accordance with GAAP. 50 Table of Contents The following table presents a reconciliation of net loss, the most directly comparable financial measure stated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented.
For these reasons, investors should not consider Adjusted EBITDA in isolation from, or as a substitute for, net loss determined in accordance with GAAP. The following table presents a reconciliation of net loss, the most directly comparable financial measure stated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented.
In recent years, changes in the algorithms used for targeting and purchasing online advertising, changes to privacy and online tracking, changes to our purchase flow and subscription processes, supply and demand dynamics in the market, reductions in our advertising spend, and other factors have caused the cost of marketing on these channels to increase consistently.
In recent years, changes in the algorithms used for targeting and purchasing online advertising, changes to privacy and online tracking, changes to our purchase flow and subscription processes, supply and demand dynamics in the market, and other factors have caused the cost of marketing on these channels to increase consistently.
Therefore, we used an expected dividend yield of zero. 60 Table of Contents Earn-Out Share Liability At the closing of the Business Combination, certain Legacy Grove shareholders were issued an aggregate of 2,799,696 shares of Grove Class B Common Stock (“Earn-Out Shares”).
Therefore, we used an expected dividend yield of zero. 61 Table of Contents Earn-Out Share Liability At the closing of the Business Combination, certain Legacy Grove shareholders were issued an aggregate of 2,799,696 shares of Grove Class B Common Stock (“Earn-Out Shares”).
To date, we have funded our operations principally through redeemable convertible preferred stock and common stock financings, the incurrence of debt and the closing of the Business Combination. We have total outstanding indebtedness of $7.5 million as of December 31, 2024.
To date, we have funded our operations principally through redeemable convertible preferred stock and common stock financings, the incurrence of debt and the closing of the Business Combination. We have total outstanding indebtedness of $7.5 million as of December 31, 2025.
Our significant accounting policies are described in Note 2 to our audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023 included in this Annual Report on Form 10-K.
Our significant accounting policies are described in Note 2 to our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 included in this Annual Report on Form 10-K.
The remaining 2,602,412 shares are subject to vesting and forfeitures based upon certain triggering events that can occur during a period of ten years following the closing of the Business Combination (the “Earn-Out Period”).
The remaining 2,602,404 shares are subject to vesting and forfeitures based upon certain triggering events that can occur during a period of ten years following the closing of the Business Combination (the “Earn-Out Period”).
Earn-Out shares which are subject to a service condition are accounted for under Accounting Standards Codification (“ASC”) 718. See Note 3— Fair Value Measurements and Fair Value of Financial Instruments and Note 10— Common Stock and Warrants.
Earn-Out shares which are subject to a service condition are accounted for under Accounting Standards Codification (“ASC”) 718. See Note 4— Fair Value Measurements and Fair Value of Financial Instruments and Note 10— Common Stock and Warrants.
Non-cash adjustments consisted primarily of a $12.0 million stock-based compensation expense, $9.8 million in depreciation and amortization, $5.0 million in loss on extinguishment of debt, $3.4 million in non-cash interest expense and $1.3 million in asset impairment, partially offset by $9.9 million in changes in fair value of derivative liabilities, $3.1 million gain on lease modification and $3.1 million in changes to our inventory reserve.
Non-cash adjustments consisted primarily of a $12.0 million stock-based compensation expense, $9.8 million in depreciation and amortization, $5.0 million in loss on extinguishment of debt, $3.4 million in non-cash interest expense and $1.3 million in asset impairment, partially offset by $9.9 million in changes in fair value of derivative liabilities, $3.1 million gain on lease modification and $3.1 million in changes to our inventory write-down.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter and our annual revenue exceeds $100 million during such completed fiscal year, or (ii) the market value of our common stock held by non-affiliates exceeds $700 million. 63 Table of Contents
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter and our annual revenue exceeds $100 million during such completed fiscal year, or (ii) the market value of our common stock held by non-affiliates exceeds $700 million.
Additionally, in no event may we sell more than 6,511,532 shares of our common stock to Yorkville under the SEPA, which number of shares is equal to 19.99% of the shares of the Company's common stock outstanding immediately prior to the execution of the SEPA (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the SEPA.
Additionally, in no event may we sell more than 58 Table of Contents 6,511,532 shares of our common stock to Yorkville under the SEPA, which number of shares is equal to 19.99% of the shares of the Company's common stock outstanding immediately prior to the execution of the SEPA (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable NYSE rules or comply with certain other requirements as described in the Amended SEPA.
Most customers purchase a combination of products recommended by us based on previous purchases and new products discovered through marketing or catalog browsing. Customers can opt to subscribe and have orders auto-shipped to them on a specified date or shipped immediately through an option available on the website and mobile application.
Most customers purchase a combination of products 51 Table of Contents recommended by us based on previous purchases and new products discovered through marketing or catalog browsing. Customers can opt to subscribe and have orders auto-shipped to them on a specified date or shipped immediately through an option available on the website and mobile application.
Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements in our Annual Report on Form 10-K, and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements in our Annual Report on Form 10-K, and, similar to 63 Table of Contents emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
On September 20, 2024 (the “Series A' Preferred Stock Closing Date”), we entered into another subscription agreement with Volition where we received gross proceeds of $15.0 million in exchange for 15,000 shares of our Series A' Redeemable Convertible Preferred Stock (the “Series A' Preferred Stock” and together with the Series A Preferred Stock, the “Preferred Stock”).
On September 20, 2024, we entered into a subscription agreement with Volition where we received gross proceeds of $15.0 million in exchange for 15,000 shares of our Series A' Redeemable Convertible Preferred Stock (the “Series A' Preferred Stock” and together with the Series A Redeemable Convertible Preferred Stock, the “Preferred Stock”).
Smaller Reporting Company Status We are a “smaller reporting company” meaning that the market value of the Company’s stock held by non-affiliates is less than $250 million.
Smaller Reporting Company Status We are a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $250 million.
Our recent gains in 48 Table of Contents approaching profitability may not be sustainable in the near term due to the effects of steps we may take to drive growth or other factors. If we are unable to achieve profitable growth, our prospects may be materially and adversely affected.
Our recent gains in approaching profitability may not be sustainable in the near term due to the effects of steps we may take to drive growth or other factors. If we are unable to achieve profitable growth, our prospects may be materially and adversely affected.
(“Volition”) and received gross proceeds of $10.0 million in exchange for 10,000 shares of our Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”), a warrant to purchase 1,579,778 shares of our Class A Common Stock at an exercise price of $6.33 (the “Volition Warrant”) and a warrant to purchase 20,905 shares of our Class A Common Stock at an exercise price of $0.01 per share (the “Volition Penny Warrants” and together with the Volition Warrant the “Volition Warrants”).
(“Volition”) and received gross proceeds of $10.0 million in exchange for 10,000 shares of our Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”), a warrant to purchase 1,579,778 shares of our Class A common stock at an exercise price of $6.33 (the “Volition Warrants”) and a warrant to purchase 20,905 shares of our Class A common stock at an exercise price of $0.01 per share (the “Volition Penny Warrants”).
If we are unable to raise additional capital when desired, our business, results of operations, and financial condition could be materially and adversely affected. Contractual Obligations and Other Commitments Our most significant contractual obligations relate to the Siena Loan Facility (described below), purchase commitments on inventory and operating lease obligations on our fulfillment centers and corporate offices.
If we are unable to raise additional capital when desired, our business, results of operations, and financial condition could be materially and adversely affected. Contractual Obligations and Other Commitments Our most significant contractual obligations relate to our loan facility, purchase commitments on inventory and operating lease obligations on our fulfillment centers and corporate offices.
We operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our Grove-owned brands (“Grove Brands”) and other leading natural and mission-based CPG brands, providing consumers with a selection of curated products across many categories and brands.
We primarily operate an online direct-to-consumer website and mobile application (“DTC platform”) where we both sell our Grove Brands and other leading natural and mission-based CPG brands, providing consumers with a selection of curated products across many categories and brands.
For information on our contractual obligations for operating leases, see “Leases” in Note 7 of the Notes to our audited consolidated financial statements as of and for the years ended December 31, 2024 and December 31, 2023 included in this filing on Form 10-K.
For information on our contractual obligations for operating leases, see “Leases” in Note 8 of the Notes to our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 included in this filing on Form 10-K.
We refer to this part of our business as “DTC.” We recently made the decision to exit the business of selling Grove Co. products in brick and mortar retail channels. We expect our exit from brick-and-mortar retail to improve our profitability while having an insignificant impact on our revenue, and to be completed in 2025.
We refer to this part of our business as “DTC.” In the fourth quarter of 2024, we made the decision to exit the business of selling Grove Co. products in brick and mortar retail channels and completed this exit in 2025. We expect our exit from brick-and-mortar retail to improve our profitability while having an insignificant impact on our revenue.
In connection with the issuance of the Series A' Preferred Stock, we agreed with Volition to cancel the Volition Warrants, cancel the Volition Penny Warrants and modify the redemption terms of the Series A Preferred Stock such that it is no longer subject to Optional Redemption.
In connection with the issuance of the Series A' Preferred Stock, we agreed with Volition to cancel the Volition Warrants, cancel the Volition Penny Warrants and modify certain redemption terms of the Series A Preferred Stock already held by Volition, such that it is no longer subject to Optional Redemption.
To the extent there are changes in prevailing 52 Table of Contents interest rates in future periods we anticipate cash payments for interest and interest expense to fluctuate as interest rates change. Loss on extinguishment of debt relates to the full payoff of the Structural Debt Facility (as defined below) in 2024 that was accounted for as an extinguishment.
To the extent there are changes in prevailing interest rates in future periods, we anticipate cash payments for interest and interest expense to fluctuate as interest rates change. Loss on extinguishment of debt relates to the full payoff of the Structural Debt Facility in 2024 that was accounted for as an extinguishment.
Siena Revolver On March 10, 2023, we entered into a Loan and Security Agreement (the “Siena Revolver”) with Siena Lending Group, LLC which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million. In July 2024, we entered into an amendment to the Siena Revolver (the “Siena Amendment”).
Loan Facility On March 10, 2023, we entered into a Loan and Security Agreement (the “Siena Revolver”) with Siena Lending Group, LLC which permits us to receive funding through a revolving line of credit with an initial commitment of $35.0 million.
In connection with the reorganizations, we recorded charges totaling $2.0 million and $3.8 million related to the reductions in our workforce, warehousing facilities and headquarters office footprint for the years ended December 31, 2024 and 2023, respectively. 47 Table of Contents Key Factors Affecting Our Operating Performance We believe that our future business is dependent on many factors.
In connection with the reorganizations, we recorded charges totaling $1.9 million and $2.0 million related to the reductions in our workforce, warehousing facilities and headquarters office footprint for the years ended December 31, 2025 and 2024, respectively. Key Factors Affecting Our Operating Performance We believe that our future business is dependent on many factors.
We calculate Adjusted EBITDA as net loss, adjusted to exclude: stock-based compensation expense; depreciation and amortization; changes in fair values of derivative liabilities; transaction costs allocated to derivative liabilities upon closing of the Business Combination; interest income; interest expense; restructuring costs; loss on extinguishment of debt; provision for income taxes and certain litigation and legal settlement expenses that we do not consider representative of our underlying operations.
We calculate Adjusted EBITDA as net loss, adjusted to exclude: stock-based compensation expense; depreciation and amortization; changes in fair values of derivative liabilities; interest income; interest expense; restructuring costs; transaction related costs related to certain strategic merger & acquisition projects; loss on extinguishment of debt; provision for income taxes and certain litigation and legal settlement expenses that we do not consider representative of our underlying operations.
In addition, our Class A Common Stock trading price may not exceed the respective exercise prices of our Public Warrants, Private Placement Warrants, warrants granted to HGI (as defined below) and/or our Legacy Grove Warrants before the respective warrants expire, and therefore we may not receive any proceeds from the exercise of warrants to fund our operations.
In addition, our Class A Common Stock trading price may not exceed the respective exercise prices of our Public Warrants, Private Placement Warrants and/or our other outstanding warrants before the respective warrants expire, and therefore we may not receive any proceeds from the exercise of warrants to fund our operations.
We will continue to be an emerging growth company for the first five fiscal years after the VGAC II Initial Public Offering unless any of the following events occur earlier: (i) we have more than $1.235 billion in annual revenue, (ii) we have more than $700.0 million in market value of our Class A Common Stock held by non-affiliates or (iii) we issue more than $1.0 billion of non-convertible debt securities over a three-year period.
We will continue to be an emerging growth company through December 31, 2026 unless any of the following events occur earlier: (i) we have more than $1.235 billion in annual revenue, (ii) we have more than $700.0 million in market value of our Class A Common Stock held by non-affiliates or (iii) we issue more than $1.0 billion of non-convertible debt securities over a three-year period.
Following the closing of the Business Combination, we uses this extended transition period to enable it to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (1) is no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.
We use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
Cost of Goods Sold Cost of goods sold consists of the product costs of merchandise, inbound freight costs, vendor allowances, costs associated with inventory shrinkage and damages and inventory write-offs and related reserves. 51 Table of Contents Gross Profit and Gross Margin Gross profit represents revenue less the cost of goods sold.
Cost of Goods Sold Cost of goods sold consists of the product costs of merchandise, inbound freight costs, vendor allowances, costs associated with inventory shrinkage and damages and inventory write-offs and related reserves. Gross Profit and Gross Margin Gross profit represents revenue less the cost of goods sold. Gross margin is gross profit expressed as a percentage of revenue.
We incurred negative cash flow from operating activities of $9.7 million for the year ended December 31, 2024. We have incurred significant losses since inception and have an accumulated deficit of approximately $648.5 million.
We incurred negative cash flow from operating activities of $7.0 million for the year ended December 31, 2025. We have incurred significant losses since inception and have an accumulated deficit of approximately $660.2 million.
Since inception, we have invested heavily in building out both our e-commerce platform and Grove Brands, and over this period we have operated at a loss. We have an accumulated deficit of $648.5 million as of December 31, 2024.
Since inception, we have invested heavily in building out both our ecommerce platform and Grove Brands, and over this period we have operated at a loss. We have an accumulated deficit of $660.2 million as of December 31, 2025.
To date, we have experienced and expect to continue experiencing disruptions to platform operations, including user experience, inventory management, fulfillment operations and payment processing. If our platform is successfully transitioned, we expect this migration to provide us with significant advantages, such as enhanced scalability, access to advanced ecommerce functionalities, and improved security measures.
We expect this migration to provide us with significant advantages, such as enhanced scalability, access to advanced ecommerce functionalities, and improved security measures. To date, we have experienced and expect to continue experiencing disruptions to platform operations, including user experience, inventory management, fulfillment operations and payment processing, which has adversely affected our operating results and financial condition .
During the year ended December 31, 2023, certain shareholders surrendered an aggregate 197,284 Earn-Out Shares which, per terms of the Merger Agreement (as defined below), were cancelled by the Company and not reallocated among the remaining holders.
Certain shareholders have surrendered an aggregate 197,292 Earn-Out Shares which, per terms of the Merger Agreement (as defined below), were cancelled by the Company and not reallocated among the remaining holders.
While each of these factors presents significant opportunities for us, they also pose important challenges that we must successfully address to enable us to grow our business and improve our operations while staying true to our mission, including those discussed below and in the section entitled “Risk Factors”.
While each of these factors presents significant opportunities for us, they also pose important challenges that we must successfully address to enable us to grow our business and improve our operations while staying true to our mission, including those discussed below and in the section entitled “Risk Factors”. 48 Table of Contents Ability To Grow our Brand Awareness Our brand is integral to the growth of our business and is essential to our ability to engage with our community.
Selling, General and Administrative Selling, general and administrative expenses consist primarily of compensation and benefit costs for personnel involved in general corporate functions, including stock-based compensation expense, and certain fulfillment costs, as further outlined below.
Product development costs also include allocated facilities, equipment, depreciation and overhead costs. Selling, General and Administrative Selling, general and administrative expenses consist primarily of compensation and benefit costs for personnel involved in general corporate functions, including stock-based compensation expense, and certain fulfillment costs, as further outlined below.
We believe the migration to Shopify provides a more streamlined user experience for our customers. This transition exposes us to vendor-specific risks, such as service disruptions, changes in pricing and inventory management, potential reduced flexibility in our ecommerce experience or alterations in the platform's features and execution and fulfillment risks as we migrate our customer experience to the new platform.
This transition away from our legacy platform exposes us to vendor-specific risks, such as service disruptions, changes in pricing and inventory management, potential reduced flexibility in our ecommerce experience or alterations in the platform's features and execution and fulfillment risks as we migrate our customer experience to the new platform.
In the year ended December 31, 2024, DTC Active Customers declined primarily due to our lower advertising spend strategy, resulting in fewer new customers and therefore fewer overall orders.
In the year ended December 31, 2025, DTC Active Customers declined primarily due to our lower advertising spend, resulting in fewer new customers and therefore fewer overall orders, and negative impacts from technology disruptions to our DTC platform.
Fulfillment costs represent those costs incurred in operating and staffing our fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packing and preparing customer orders for shipment, outbound shipping and handling expenses, packing materials costs and payment processing and related transaction costs.
We anticipate this reduction in force will result in operating efficiencies for our business. 52 Table of Contents Fulfillment costs represent those costs incurred in operating and staffing our fulfillment centers, including costs attributable to receiving, inspecting and warehousing inventories, picking, packing and preparing customer orders for shipment, outbound shipping and handling expenses, packing materials costs and payment processing and related transaction costs.
After experiencing high rates of revenue growth, in the last several years, we have substantially reduced our expense structure and operations in light of declining revenue, and as a result we have reduced our operating losses and cash consumption.
In recent years, we have substantially reduced our expense structure and operations in light of declining revenue, and as a result we have reduced our operating losses and cash consumption.
Investing Activities Net cash used in investing activities was $1.6 million and $3.0 million for the years ended December 31, 2024 and 2023, respectively was primarily due to purchases of property and equipment, including capitalized software development. 59 Table of Contents Financing Activities Net cash used in financing activities was $59.2 million for the year ended December 31, 2024 and primarily consisted of the repayment of debt, including the settlement of the Structural Derivative Liability, of $72.3 million, net payments related to stock-based award activities of $1.4 million, payment of Series A' Preferred Stock issuance costs of $0.5 million and payment of debt issuance costs of $0.3 million.
Net cash used by financing activities was $59.2 million for the year ended December 31, 2024 and primarily consisted of the repayment of debt, including the settlement of the Structural Derivative Liability of $72.3 million, net payments related to stock-based awards of $1.4 million, payment of Series A' Preferred Stock issuance costs of $0.5 million and payment of debt issuance costs of $0.3 million.
The borrowing capacity under the Siena Revolver, as modified by the Siena Amendment, is subject to certain conditions, including our inventory and accounts receivable balances and other limitations as specified in the agreement.
The borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory, accounts receivable balances and certain qualifying cash balances held with third party processors and other limitations as specified in the agreement.
Net cash used in operating activities was $8.0 million for the year ended December 31, 2023, primarily attributable to our net loss of $43.2 million, non-cash adjustments of $24.2 million, and an increase in our net operating assets and liabilities of $11.0 million.
Net cash used in operating activities was $9.7 million for the year ended December 31, 2024, primarily attributable to our net loss of $27.4 million, non-cash adjustments of $15.2 million, and an increase in our net operating assets and liabilities of $2.4 million.
Cost-Efficient Acquisition of New Customers and Retention of Existing Customers on our DTC Platform Our ability to attract new customers is a key factor for our future growth. To date we have successfully acquired new customers through online and offline marketing channels.
Cost-Efficient Acquisition of New Customers and Retention of Existing Customers on our DTC Platform Our ability to attract new customers is a key factor for our future growth.
As of December 31, 2024, we had $9.1 million of enforceable and legally binding inventory purchase commitments all due within one year.
As of December 31, 2025, we had $11.2 million of enforceable and legally binding inventory purchase commitments predominantly due within one year.
No fractional shares were issued in connection with the Reverse Stock Split. Restructuring and Facilities Closures As a part of our focus on reducing our operating expenses and focus on becoming profitable, we have recently implemented company-wide workforce restructurings and facilities reductions.
Restructuring and Facilities Closures As a part of our focus on reducing our operating expenses and focus on becoming profitable, we have recently implemented company-wide workforce restructurings and facilities reductions.
We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes. We recognize interest and penalties related to unrecognized tax benefits, if any, as income tax expense.
We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes.
The interest rates applicable to borrowings under the Siena Revolver were not modified by the Siena Amendment and are based on a fluctuating rate of interest measured by reference to either, at our option, (i) a Base Rate, plus an applicable margin, or (ii) the term SOFR then in effect, plus 0.10% and an applicable margin.
The interest rates applicable to borrowings under the Siena Revolver are based on a fluctuating rate of interest measured by reference to either, at our option, (i) a Base Rate plus 3.25% or (ii) the term Secured Overnight Financing Rate (“Term SOFR”) then in effect, plus 4.25%.
See the section titled “Liquidity and Capital Resources—Loan Facilities” below for further details. The change in the fair value of derivative liabilities for the year ended December 31, 2024, other than the Structural Derivative liability, was primarily driven by the changes in our stock price during the period.
See the section titled “Liquidity and Capital Resources—Loan Facilities” below for further details. The change in the fair value of derivative liabilities for the year ended December 31, 2025, was primarily driven by the settlement of the Structural Derivative in connection with the payoff of the Structural Debt Facility.
Interest Expense Year Ended December 31, Change 2024 2023 Amount % (in thousands) Interest expense $ 12,777 $ 16,077 $ (3,300) (21) % Interest expense decreased by $3.3 million, or 21%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily due to the full repayment of the Structural Debt Facility in 2024.
Interest Expense Year Ended December 31, Change 2025 2024 Amount % (in thousands) Interest expense $ 1,225 $ 12,777 $ (11,552) (90) % Interest expense decreased by $11.6 million, or 90%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to the extinguishment of the Structural Debt Facility in 2024.
In the years ended December 31, 2024 and 2023, DTC Total Orders declined primarily due to our lower advertising spend strategy, resulting in fewer new customers and therefore fewer overall orders.
In the year ended December 31, 2025, DTC Total Orders declined primarily due to our lower advertising spend in prior years, resulting in fewer new customers and therefore fewer overall orders. Additionally, DTC Total Orders was negatively impacted by technology disruptions to our DTC platform.
The total borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory and accounts receivable balances and other limitations as specified in the agreement. Additional borrowing capacity from the Siena Revolver was $5.2 million as of December 31, 2024. The Siena Revolver matures on March 10, 2026 and is collateralized by our inventory and accounts receivable.
The total borrowing capacity under the Siena Revolver is subject to certain conditions, including our inventory, accounts receivable balances and certain qualifying cash balances held with third party processors and other limitations as specified in the agreement. Additional borrowing capacity from the Siena Revolver was $1.1 million as of December 31, 2025.
As of December 31, 2024, we have sold 147,965 shares under the SEPA and there were 6,363,567 shares available to be sold to Yorkville under the Exchange Cap.
As of December 31, 2025, we have sold 147,965 shares under the SEPA and there were 6,363,567 shares available to be sold to Yorkville under the Exchange Cap. As of February 27, 2026, under the terms of the SEPA we would be able to raise additional gross proceeds of approximately $8.8 million.
Stock-Based Compensation We recognize the cost of share-based awards granted to employees and non-employees based on the estimated grant-date fair value of the awards. 62 Table of Contents For stock option awards with service only vesting conditions, we recognize expenses on a straight-line basis over the requisite service period, which is generally the vesting period of the award.
For stock option awards with service only vesting conditions, we recognize expenses on a straight-line basis over the requisite service period, which is generally the vesting period of the award. We estimate the grant-date fair value of the stock option awards with service only vesting conditions using the Black-Scholes option-pricing model.
Year Ended December 31, 2024 2023 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) Net loss $ (27,423) $ (43,232) Stock-based compensation 11,995 15,513 Depreciation and amortization 9,821 5,824 Changes in fair value of derivative liabilities (9,888) (216) Reduction of transaction costs allocated to derivative liabilities upon Business Combination — (3,745) Interest income (3,057) (3,773) Interest expense 12,777 16,077 Restructuring expenses (1) 2,032 3,811 Loss on extinguishment of debt 5,004 — Provision for income taxes 40 38 Litigation and legal settlement expenses — 520 Total Adjusted EBITDA $ 1,301 $ (9,183) Net loss margin (13.5) % (16.7) % Adjusted EBITDA margin 0.6 % (3.5) % (1) Restructuring expenses for the year ended December 31, 2024 consisted of $3.1 million gain from our modification of the lease at our San Francisco headquarters offset by $1.3 million of costs related to our move to a new distribution facility in Nevada, $2.5 million in severance-related charges, and $1.3 million related to impairment of operating lease right-of-use assets.
Year Ended December 31, 2025 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) Net loss $ (11,716) $ (27,423) Stock-based compensation 4,284 11,995 Depreciation and amortization 1,680 9,821 Changes in fair value of derivative liabilities (404) (9,888) Interest income (455) (3,057) Interest expense 1,225 12,777 Restructuring expenses (1) 1,919 2,032 Transaction related costs (2) 1,275 — Loss on extinguishment of debt — 5,004 Provision for income taxes 33 40 Total Adjusted EBITDA $ (2,159) $ 1,301 Net loss margin (6.7) % (13.5) % Adjusted EBITDA margin (1.2) % 0.6 % (1) Restructuring expenses for the year ended December 31, 2025 consisted of $1.0 million in severance-related charges and $0.9 million related to the impairment of operating lease right-of-use assets and fixed assets of our San Francisco lease.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2024 2023 (in thousands) Net cash used in operating activities $ (9,749) $ (7,993) Net cash used in investing activities (1,621) (2,985) Net cash provided by (used in) financing activities (59,189) 9,856 Net increase (decrease) in cash, cash equivalents and restricted cash $ (70,559) $ (1,122) Operating Activities Net cash used in operating activities was $9.7 million for the year ended December 31, 2024, primarily attributable to our net loss of $27.4 million, non-cash adjustments of $15.2 million, and an increase in our net operating assets and liabilities of $2.4 million.
The Siena Revolver matures on April 10, 2028. 59 Table of Contents Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2025 2024 Change (in thousands) Net cash used in operating activities $ (6,954) $ (9,749) (28.7) % Net cash used in investing activities (3,999) (1,621) 146.7 % Net cash used in financing activities (1,559) (59,189) (97.4) % Net decrease in cash, cash equivalents and restricted cash $ (12,512) $ (70,559) Operating Activities Net cash used in operating activities was $7.0 million for the year ended December 31, 2025, primarily attributable to our net loss of $11.7 million, non-cash adjustments of $6.5 million, and an increase in our net operating assets and liabilities of $1.7 million.
The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) federal funds rate (“Federal Funds Rate”) plus 0.50% and (3) 5.00% per annum.
The Base Rate is defined as the greatest of: (1) Prime Rate as published in the Wall Street Journal, (2) federal funds rate (“Federal Funds Rate”) plus 0.50% and (3) 5.00% per annum. In accordance with the agreement, Siena has been provided with our periodic financial statements and updated projections to facilitate their ongoing assessment of the Company.
The change in operating assets and liabilities primarily resulted from a decrease of $3.7 million in deferred revenue, a decrease of $1.6 million in operating lease right-of-use assets and liabilities, partially offset by a $15.0 million decrease in inventory and a $1.7 million decrease in prepaid and other assets.
The change in operating assets and liabilities primarily resulted from a $2.5 million net decrease in accounts payable and accrued expenses due to overall decreases in our expenses and timing of payments, a decrease of $1.3 million in deferred revenue, a $1.2 million increase in prepaid expenses and other assets and $0.4 million decrease in other liabilities, partially offset by a $3.3 million decrease in our inventory and a $0.5 million increase in net operating lease right-of-use assets and liabilities.
We believe the core elements of continuing to grow our brand awareness in a manner that increases our market penetration are highlighting our products’ qualities of being natural, sustainable and effective and the effectiveness of our marketing efforts. Ability to Continue to Innovate in Products and Packaging Our continued product innovation is integral to our future growth.
Our performance will depend on our ability to profitably attract new customers and encourage consumer spending across our product portfolio. We believe the core elements of continuing to grow our brand awareness in a manner that increases our market penetration are highlighting our products’ qualities of being natural, sustainable and effective and the effectiveness of our marketing efforts.
As of February 28, 2025, under the terms of the SEPA we would be able to raise additional gross proceeds of approximately $10.1 million. 57 Table of Contents Management believes that currently available resources will provide sufficient funds to enable us to meet our obligations for at least one year following the date these consolidated financial statements are available to be issued.
Management believes that currently available resources will provide sufficient funds to enable us to meet our obligations for at least one year following the date these consolidated financial statements are available to be issued.
DTC Net Revenue Per Order increased in the year ended December 31, 2024 compared to the prior year comparative period as a result of increased number of products sold per order due to our expanded product offering. Non-GAAP Financial Measures: Adjusted EBITDA and Adjusted EBITDA Margin We prepare and present our financial statements in accordance with U.S. GAAP (“GAAP”).
DTC Net Revenue Per Order had a slight improvement in the year ended December 31, 2025 compared to the prior year comparative period due to improved promotional strategies, as well as an increase in higher priced items in customer orders. 50 Table of Contents Non-GAAP Financial Measures: Adjusted EBITDA and Adjusted EBITDA Margin We prepare and present our financial statements in accordance with U.S.
Selling, general and administrative expenses have declined in 2024 as a result of decreases in fulfillment costs largely driven by lower sales and our cost management initiatives. We expect to continue to drive efficiencies in selling, general & administrative expenses throughout 2025.
Selling, general and administrative expenses have declined in 2025 as a result of decreases in fulfillment costs largely driven by lower sales and our cost management initiatives. In November 2025, we executed a reduction in force as part of an initiative to streamline selling, general, and administrative expenses, which is expected to lower our ongoing cost structure and deliver savings.
On July 18, 2022, we entered into the Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD. (“Yorkville”), whereby we have the right, but not the obligation, to sell to Yorkville up to $100 million of our shares of common stock at our request until July 18, 2025, subject to certain conditions.
(“Yorkville”), whereby we have the right, but not the obligation, to sell to Yorkville up to $100 million of our shares of common stock at our request until July 18, 2025, subject to certain conditions. On July 8, 2025, we and Yorkville amended the SEPA (the “Amended SEPA”) to extend the term to August 1, 2027.
As a result, if factors or expected outcomes change and significantly different assumptions or estimates are used, our stock-based compensation could be materially different. Significant inputs and assumptions include: Fair value of Common Stock – The fair value of the shares of common stock underlying our stock options has been determined based on market prices.
Significant inputs and assumptions include: Fair value of Common Stock – The fair value of the shares of common stock underlying our stock options has been determined based on market prices.
Our DTC platform remains a core part of our strategy and customer value proposition in addition to providing key data and customer feedback driving our innovation process.
We use the metrics to aid us in identifying trends, formulating financial projections, making strategic decisions, assessing operational efficiencies and monitoring our business. Our DTC platform remains a core part of our strategy and customer value proposition in addition to providing key data and customer feedback driving our innovation process.
These costs are included within selling, general and administrative expenses in the consolidated statements of operations. We expect fulfillment costs to remain relatively stable over 2025 on a per order basis due to increased outbound shipping costs. Non-operating expenses, net Interest expense consists primarily of interest expense associated with our debt financing arrangements.
These costs are included within selling, general and administrative expenses in the consolidated statements of operations. Non-operating expenses, net Interest expense consists primarily of interest expense associated with our debt financing arrangement. In fiscal year 2025, we have recorded lower interest expense due to the extinguishment of the Structural Debt Facility (as defined below).
Non-operating expenses (income), net Year Ended December 31, Change 2024 2023 Amount % (in thousands) Loss on extinguishment of debt $ 5,004 $ — $ 5,004 ** Changes in fair value of derivative liabilities (9,888) (216) (9,672) ** Other income, net (3,057) (7,930) 4,873 (61) % **Change not meaningful Loss on extinguishment of debt resulted from the repayment of our Structural Debt Facility during the year ended December 31, 2024.
See the section titled “Liquidity and Capital Resources” below for further details. 56 Table of Contents Non-operating expenses, net Year Ended December 31, Change 2025 2024 Amount % (in thousands) Loss on extinguishment of debt $ — $ 5,004 $ (5,004) (100) % Changes in fair value of derivative liabilities (404) (9,888) 9,484 (96) % Other income, net (455) (3,057) 2,602 (85) % Loss on extinguishment of debt resulted from the repayment of our Structural Debt Facility during the year ended December 31, 2024.
Non-cash adjustments consisted primarily of a $15.5 million stock-based compensation expense, $5.8 million in depreciation and amortization, $3.8 million in non-cash interest expense and $2.5 million in asset impairment, partially offset by $3.7 million in reduction in transaction costs allocated to derivative liabilities upon the Business Combination.
Non-cash adjustments consisted primarily of a $4.3 million stock-based compensation expense, $1.7 million in depreciation and amortization, $0.9 million in asset impairment and $0.3 million in non-cash interest expense, partially offset by $0.4 million in changes in fair value of derivative liabilities and $0.3 million in changes to our inventory write-downs.
Off-Balance Sheet Arrangements We do not have any off-balance sheet financing arrangements, as defined in Item 303 of Regulation S-K, as of the year ended December 31, 2024. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
We record inventory reserves based on the excess of the carrying value or average cost over the amount we expect to realize from the ultimate sale of the inventory.
We record inventory write-downs based on the excess of the carrying value or average cost over the amount we expect to realize from the ultimate sale of the inventory. 62 Table of Contents Stock-Based Compensation We recognize the cost of share-based awards granted to employees and non-employees based on the estimated grant-date fair value of the awards.
Key Operating and Financial Metrics In addition to our consolidated financial statements, included elsewhere in this Annual Report on Form 10-K, we assess the performance of our overall business using the following metrics and measures, among others. We use the metrics to aid us in identifying trends, formulating financial projections, making strategic decisions, assessing operational efficiencies and monitoring our business.
Our ability to realize the expected benefits of this transition is substantially dependent upon our ability to address these issues. 49 Table of Contents Key Operating and Financial Metrics In addition to our consolidated financial statements, included elsewhere in this Annual Report on Form 10-K, we assess the performance of our overall business using the following metrics and measures, among others.
The following table presents our key operating metrics for the periods presented: (in thousands, except DTC Net Revenue Per Order and percentages) Year Ended December 31, 2024 2023 Financial and Operating Data Grove Brands % Net Revenue 41 % 46 % DTC Total Orders 2,930 3,852 DTC Active Customers 688 920 DTC Net Revenue Per Order $ 67 $ 64 Grove Brands % Net Revenue We define Grove Brands % Net Revenue as total net revenue across all channels attributable to Grove Brands, divided by our total net revenue.
The following table presents our key operating metrics for the periods presented: (in thousands, except DTC Net Revenue Per Order) Year Ended December 31, 2025 2024 Financial and Operating Data DTC Total Orders 2,420 2,930 DTC Active Customers 599 688 DTC Net Revenue Per Order $ 67 $ 67 DTC Total Orders We determine our number of DTC Total Orders by counting the number of customer orders submitted through our website and mobile application that have been shipped within the period.
Change in fair values of derivative liabilities consists primarily of changes in fair values of HGI Additional Shares, Earn-Out Shares (as defined below), Public Warrants and Private Placement Warrant and Structural Derivative liabilities. Changes in the fair value of our derivative liabilities may fluctuate significantly in future periods primarily due to fluctuations in the fair value of our common stock.
Changes in the fair value of our derivative liabilities may fluctuate significantly in future periods primarily due to fluctuations in the fair value of our common stock. Other income, net consists primarily of interest income.
Other income, net decreased by $4.9 million, or 61%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to the $3.7 million gain recorded in the first quarter of 2023 as a result of reaching settlement with Morgan Stanley related to the de-SPAC fees allocated to derivative instruments and due to lower on-hand cash as a result of the repayment of Structural Debt Facility . 56 Table of Contents Liquidity, Capital Resources and Requirements As of December 31, 2024, we had $19.6 million in unrestricted cash and cash equivalents (which excludes restricted cash of $4.7 million).
Other income, net decreased by $2.6 million, or 85%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to the full payoff of the Structural Debt Facility in 2024, which reduced the cash balance available for earning interest income. 57 Table of Contents Liquidity, Capital Resources and Requirements As of December 31, 2025, we had $8.5 million in unrestricted cash and cash equivalents (which excludes restricted cash of $3.3 million).
Ability to Successfully Transition to Shopify In March 2025, we began migrating our ecommerce platform from our legacy internally-developed solution to Shopify, a third-party service provider, and to other service providers that offer certain ecommerce solutions that integrate with Sho pify.
Ability to Successfully Transition our ecommerce platform In March 2025, we began migrating our ecommerce platform from our legacy internally-developed solution to third party service providers that offer ecommerce solutions. We have completed the migration and are in the process of resolving issues identified after the migration while simultaneously working towards optimizing the customer experience.

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