Solo Brands, Inc. Announces Corporate Simplification to Establish a Single Class of Common Stock and Limit Its Tax Receivable Agreement

Rhea-AI Summary

Solo Brands (NYSE: SBDS) announced a corporate simplification that eliminates its Up-C structure, cancels outstanding Class B shares held by former TRA parties, and exchanges Solo Stove Holdings units for Class A shares one-for-one.

The company will have a single class of common stock with approximately 2.5 million Class A shares outstanding as of January 1, 2026. The transactions are intended to limit material cash obligations under the Tax Receivable Agreement and to reduce future cash tax payments by an estimated $10 million over five years, plus ~$0.5 million in annual compliance and reporting savings.

Positive

• Estimated tax savings of $10 million over five years
• Annual savings of ~$0.5 million from reduced compliance/reporting
• Conversion to a single class of common stock with ~2.5 million shares

Negative

• TRA liability may still exist for payments in 2026 and beyond

Key Figures

Class A shares 2.5 million shares Expected Solo Brands Class A common stock outstanding as of January 1, 2026

Cash tax savings $10 million Estimated reduction in future cash tax payments over next five years

Annual cost savings $0.5 million Expected annual savings from reduced compliance and reporting costs

Exchange ratio 1-for-1 LLC units of Solo Stove Holdings exchanged for Solo Brands Class A shares

Market Reality Check

$5.98 Last Close

Volume Volume 31,972 vs 20-day average 89,048 (relative volume 0.36x) indicates subdued trading. low

Technical Shares at $6.68, trading below the 200-day MA of $12.41, and 68.55% below the 52-week high.

Peers on Argus 2 Down

SBDS fell 9.49% with light volume, while at least two peers (e.g., LGCB at -6.53%, JFBR at -6.46%) also moved down, consistent with broader sector pressure rather than an isolated move.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 10	Investor conference	Positive	+11.4%	Conference participation and 1x1 investor meetings drove improved visibility.
Nov 06	Earnings release	Negative	-31.4%	Q3 2025 sales decline and sizable net loss weighed on sentiment.
Oct 24	Product launch	Positive	+2.9%	Launch of Infinity Flame propane fire pit expanded product lineup.
Oct 21	Earnings notice	Neutral	-4.2%	Scheduling notice for upcoming Q3 results preceded a modest share decline.
Oct 21	IP/trademark news	Positive	-2.8%	Trademarking the Signature Flame coincided with a slight negative reaction.

Pattern Detected

Earnings-related updates have coincided with sharp downside moves, while product and event news have seen modest positive or mixed reactions.

Recent Company History

This announcement follows a volatile period for Solo Brands. In Q3 2025, results showed net sales of $53.0M, a 43.7% year-over-year decline and a net loss of $22.9M, which preceded a -31.35% move. Product and brand news in late October, including the Infinity Flame launch and Signature Flame trademark, saw relatively small price reactions between about -2.77% and +2.86%. A November investor conference appearance coincided with an 11.43% gain. Against this backdrop, today’s corporate simplification and expected cash savings build on earlier balance-sheet and governance efforts.

Market Pulse Summary

This announcement centers on simplifying Solo Brands’ structure and aligning with shareholders. The company plans to eliminate its Up‑C structure, cap obligations under its tax receivable agreement, and consolidate into a single class of common stock, resulting in about 2.5 million Class A shares outstanding. Management projects roughly $10 million in cash tax savings over five years and about $0.5 million in annual compliance savings. Investors may monitor how these changes interact with recent operating trends and leverage.

Key Terms

tax receivable agreement financial

"limiting material liability for potential cash payments under its Tax Receivable Agreement"

A contract in which a company agrees to pay a specified party (often former owners after a spinoff or IPO) a share of future tax savings the company realizes. Think of it like agreeing to share a future tax refund with someone who helped create the conditions for that refund. For investors it matters because those payments reduce the cash the company can use for dividends, buybacks, or reinvestment, and therefore affect valuation and returns.

up-c structure financial

"including the elimination of its umbrella partnership C corporation (Up-C) structure"

An up‑C structure is a two‑layer company setup often used in public listings where the operating business is owned by a partnership and public investors buy shares of a separate corporation that holds partnership interests. Think of it like buying stock in a holding company while the original owners keep a special stake in the business that preserves tax benefits. It matters because it can create tax advantages for sellers but adds tax complexity for investors, different cash‑flow claims and potential future dilution.

class a common stock financial

"exchanged for shares of Solo Brands Class A common stock on a one-for-one basis"

Class A common stock is a category of a company’s shares that carries a specific set of ownership rights—most commonly defined voting power and claims on dividends—set out in the company’s charter. For investors it matters because the class determines how much influence you have over corporate decisions, the share’s likely dividend and trading behavior, and how it compares in value to other share classes, like choosing a particular seat with different privileges at the company’s decision-making table.

class b common stock financial

"outstanding shares of Solo Brands Class B common stock held by former TRA parties"

A class B common stock is one of multiple types of a company’s ordinary shares that carries specific rights—often different voting power or dividend priority—compared with other classes. For investors it matters because those differences affect how much influence you have over company decisions, the income you might receive, and how freely the shares trade; think of it like owning a car with different keys: some keys let you start the engine and open the trunk, others only unlock the door.

AI-generated analysis. Not financial advice.

Strategic Actions to Align with Shareholders' Interests and Significant Cash Savings Expected

GRAPEVINE, Texas, Dec. 22, 2025 (GLOBE NEWSWIRE) -- Solo Brands, Inc. (NYSE: SBDS) (“Solo Brands” or “the Company”) a leading portfolio of lifestyle brands (Solo Stove, Chubbies, Isle and Oru) that are redefining the outdoor and apparel industries, announced that it is conducting a series of transactions that will simplify its organizational structure, including the elimination of its umbrella partnership C corporation (Up-C) structure, which has the effect of limiting material liability for potential cash payments under its Tax Receivable Agreement (the “TRA”).

“We are simplifying our corporate structure to strengthen governance and align with shareholder interests. Capping the tax receivable agreement lowers future obligations, and the simplified structure creates opportunities for efficient tax planning to support long-term value creation,” said John Larson, President and Chief Executive Officer.

As part of the transactions, the outstanding shares of Solo Brands Class B common stock held by former TRA parties will be cancelled, and corresponding units of Solo Stove Holdings, LLC, a subsidiary of the Company, will be exchanged for shares of Solo Brands Class A common stock on a one-for-one basis. As a result, Solo Brands will have a single class of common stock outstanding with approximately 2.5 million shares of Class A common stock as of January 1, 2026. Investors can find the full text of the merger agreement effecting the foregoing simplification in Solo Brands’ Current Report on Form 8-K, filed on December 17, 2025.

• The transactions are intended to limit material liability for cash payments that might otherwise be due in 2026 and beyond, under the terms of the TRA, as well as future distributions to redeemable noncontrolling interests.
• The transactions optimize our legal entity structure, reducing our future cash tax payments by an estimated $10 million over the next five years.
• In addition, Solo Brands expects to realize ~$0.5 million in annual savings from reduced compliance and financial reporting costs associated with having a single class of common stock outstanding.
  
  

About Solo Brands, Inc.

Solo Brands, headquartered in Grapevine, TX, is a leading omnichannel lifestyle brand company. Leveraging e-commerce, strategic retail relationships and physical retail stores, Solo Brands offers innovative products to consumers through five lifestyle brands – Solo Stove and TerraFlame, known for firepits, stoves, and accessories; Chubbies, a premium casual apparel and activewear brand; ISLE, maker of inflatable and hard paddle boards and accessories; and Oru Kayak, innovator of origami folding kayaks.

Contacts:
Mark Anderson, Senior Director of Treasury & Investor Relations
Investors@solobrands.com

Three Part Advisors, LLC
Sandy Martin: smartin@threepa.com, 214-616-2207
Steven Hooser: shooser@threepa.com, 214-872-2710

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the impact of the transactions on future potential cash payments under the TRA and future tax savings and compliance savings, our future financial position, turnaround efforts, including rebuilding retail relationships, strategic transformation goals, cost efficiency initiatives, future growth and brand investments, and shareholder value, our future ability to continue as a going concern, our liquidity, and the expected benefits of operational improvements and restructuring efforts,. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “guidance,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. These statements are neither promises nor guarantees, and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our future ability to continue as a going concern; our ability to realize expected benefits from our strategic plans; our ability to implement any restructuring and cost-reduction efforts, including, but not limited to, the transactions described in this press release; our limited liquidity; our ability to mitigate the impact of new and increased tariffs and similar restrictions on our business; our reliance on third-party manufacturers, which operate mostly outside of the U.S., and problems with, or the loss of, our suppliers or an inability to obtain raw materials; our dependence on cash generated from operations to support our business and our growth initiatives; our continued ability to comply with the listing standards of the NYSE; the effects of the reverse stock split effected in July 2025 on the trading of our Class A common stock; risks associated with fluctuations in the price of our Class A common stock; risks associated with our indebtedness, including the limits imposed by our indebtedness to invest in the ongoing needs of our business; our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products; our ability to design, develop and introduce new products; our ability to manage our future growth effectively; our ability to expand into additional markets; risks associated with our international operations; our inability to sustain historic growth rates; our ability to cost-effectively attract new customers and retain our existing customers; the highly competitive market in which we operate; our failure to maintain product quality and product performance at an acceptable cost; the impact of product liability and warranty claims and product recalls, including write-offs; geopolitical actions, natural disasters, or pandemics; the ability of our largest stockholders to influence corporate matters. These and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, and any subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, or other filings we make with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Forward-looking statements speak only as of the date the statements are made and are based on information available to Solo Brands at the time those statements are made and/or management's good faith belief as of that time with respect to future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Availability of Information on Solo Brands’ Website and Social Media Profiles

Investors and others should note that Solo Brands routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Solo Brands investors website at https://investors.solobrands.com. We also intend to use the social media profiles listed below as a means of disclosing information about us to our customers, investors and the public. While not all of the information that the Company posts to the Solo Brands investors website or to social media profiles is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Solo Brands to review the information that it shares at the “Investors” link located at the top of the page on https://solobrands.com and to regularly follow our social media profiles. Users may automatically receive email alerts and other information about Solo Brands when enrolling an email address by visiting "Investor Email Alerts" in the "Resources" section of Solo Brands investor website at https://investors.solobrands.com.

Social Media Profiles:
https://linkedin.com/company/solo-brands/
https://instagram.com/solobrands/
https://www.facebook.com/groups/368095467245044/

FAQ

What corporate changes did Solo Brands (SBDS) announce on December 22, 2025?

Solo Brands announced elimination of its Up-C structure, cancellation of certain Class B shares, and a one-for-one exchange of Solo Stove Holdings units for Class A shares.

How many Class A shares will be outstanding for SBDS after the simplification?

Solo Brands expects approximately 2.5 million Class A shares outstanding as of January 1, 2026.

How much tax savings does Solo Brands (SBDS) project from the transactions?

The company estimates $10 million in reduced cash tax payments over the next five years.

What annual cost savings will Solo Brands (SBDS) realize from one class of stock?

Solo Brands expects about $0.5 million in annual savings from lower compliance and financial reporting costs.

Will the Tax Receivable Agreement (TRA) be fully eliminated for SBDS?

The transactions are intended to limit material liability under the TRA, but the company indicates TRA-related payments might still exist in 2026 and beyond.

Where can investors find the legal agreement for Solo Brands' restructuring?

Investors can review the merger agreement in Solo Brands' Form 8-K filed on December 17, 2025.