SNBR 10-Q report for 2026-04-04
Sleep Number filed its Form 10-Q for the quarter ended April 4, 2026. The filing includes condensed consolidated balance sheets, statements of operations, cash flows, shareholders’ deficit, notes, a going-concern discussion, and a table of contents. Key points include a net loss of $50.3 million in 1Q26, cash and cash equivalents of $1.5 million, borrowings under the credit facility of $605.6 million, and management’s disclosure of substantial doubt about the company’s ability to continue as a going concern.
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SNBR — Sleep Number Corporation: 1Q26 Form 10-Q filing; financial statements and going-concern disclosure included.
Sleep Number (SNBR) filed its Form 10‑Q for the quarter ended April 4, 2026. The filing shows 1Q26 net loss of $50.3M, cash of $1.484M, $605.6M borrowings under its credit facility, and management disclosed substantial doubt about going concern.
SNBR 10-Q report for 2026-04-04 snbr-20260404 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 4, 2026 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-25121 _______________________________________________________________________ SLEEP NUMBER CORPORATION (Exact name of registrant as specified in its charter) Minnesota 41-1597886 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1001 Third Avenue South Minneapolis, Minnesota 55404 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: ( 763 ) 551-7000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share SNBR Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of April 4, 2026 , 23,049,000 s hares of the registrant’s Common Stock were outstanding. i | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES INDEX Page PART I: FINANCIAL INFORMATION 1 Item 1. Financial Statements (unaudited) 1 Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of Shareholders' Deficit 3 Condensed Consolidated Statements of Cash Flows 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk 27 Item 4. Controls and Procedures 27 PART II: OTHER INFORMATION 28 Item 1. Legal Proceedings 28 Item 1A. Risk Factors 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28 Item 3. Defaults Upon Senior Securities 28 Item 4. Mine Safety Disclosures 28 Item 5. Other Information 28 Item 6. Exhibits 29 SIGNATURES 30 1 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands, except per share amounts) April 4, 2026 January 3, 2026 Assets (unaudited) (audited) Current assets: Cash and cash equivalents $ 1,484 $ 1,693 Accounts receivable, net of allowances of $ 656 and $ 694 , respectively 13,354 15,502 Inventories 78,216 82,233 Prepaid expenses 19,727 13,656 Other current assets 30,694 36,873 Total current assets 143,475 149,957 Non-current assets: Property and equipment, net 73,755 86,528 Operating lease right-of-use assets 295,315 311,723 Goodwill and intangible assets, net 66,131 66,186 Deferred income taxes 399 399 Other non-current assets 61,933 65,267 Total assets $ 641,008 $ 680,060 Liabilities and Shareholders’ Deficit Current liabilities: Borrowings under credit facility $ 605,600 $ 588,200 Accounts payable 116,395 117,977 Customer prepayments 43,338 39,527 Accrued sales returns 12,266 12,817 Compensation and benefits 19,415 14,975 Taxes and withholding 10,908 11,429 Operating lease liabilities 79,340 81,191 Other current liabilities 44,447 46,430 Total current liabilities 931,709 912,546 Non-current liabilities: Operating lease liabilities 268,697 273,111 Other non-current liabilities 66,92 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk 27 Item 4. Controls and Procedures 27 PART II: OTHER INFORMATION 28 Item 1. Legal Proceedings 28 Item 1A. Risk Factors 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28 Item 3. Defaults Upon Senior Securities 28 Item 4. Mine Safety Disclosures 28 Item 5. Other Information 28 Item 6. Exhibits 29 SIGNATURES 30 1 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands, except per share amounts) April 4, 2026 January 3, 2026 Assets (unaudited) (audited) Current assets: Cash and cash equivalents $ 1,484 $ 1,693 Accounts receivable, net of allowances of $ 656 and $ 694 , respectively 13,354 15,502 Inventories 78,216 82,233 Prepaid expenses 19,727 13,656 Other current assets 30,694 36,873 Total current assets 143,475 149,957 Non-current assets: Property and equipment, net 73,755 86,528 Operating lease right-of-use assets 295,315 311,723 Goodwill and intangible assets, net 66,131 66,186 Deferred income taxes 399 399 Other non-current assets 61,933 65,267 Total assets $ 641,008 $ 680,060 Liabilities and Shareholders’ Deficit Current liabilities: Borrowings under credit facility $ 605,600 $ 588,200 Accounts payable 116,395 117,977 Customer prepayments 43,338 39,527 Accrued sales returns 12,266 12,817 Compensation and benefits 19,415 14,975 Taxes and withholding 10,908 11,429 Operating lease liabilities 79,340 81,191 Other current liabilities 44,447 46,430 Total current liabilities 931,709 912,546 Non-current liabilities: Operating lease liabilities 268,697 273,111 Other non-current liabilities 66,921 72,878 Total liabilities 1,267,327 1,258,535 Shareholders’ deficit: Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding — — Common stock, $ 0.01 par value; 142,500 shares authorized, 23,049 and 22,860 shares issued and outstanding, respectively 230 229 Additional paid-in capital 34,906 32,454 Accumulated deficit ( 661,455 ) ( 611,158 ) Total shareholders’ deficit ( 626,319 ) ( 578,475 ) Total liabilities and shareholders’ deficit $ 641,008 $ 680,060 See accompanying notes to condensed consolidated financial statements. 2 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited - in thousands, except per share amounts) Three Months Ended April 4, 2026 March 29, 2025 Net sales $ 318,987 $ 393,261 Cost of sales 134,372 152,726 Gross profit 184,615 240,535 Operating expenses: Sales and marketing 160,795 189,103 General and administrative 33,592 38,619 Research and development 5,348 10,903 Restructuring costs 21,736 60 Total operating expenses 221,471 238,685 Operating (loss) income ( 36,856 ) 1,850 Interest expense, net 13,103 11,081 Loss before income taxes ( 49,959 ) ( 9,231 ) Income tax expense (benefit) 338 ( 585 ) Net loss $ ( 50,297 ) $ ( 8,646 ) Basic and diluted net loss per share: Net loss per share – basic and diluted $ ( 2.19 ) $ ( 0.38 ) Weighted-average shares – basic and diluted 22,991 22,706 See accompanying notes to condensed consolidated financial statements. 3 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Shareholders’ Deficit (unaudited - in thousands) Common Stock Additional Paid-in Capital Accumulated Deficit Total Shares Amount Balance at January 3, 2026 22,860 $ 229 $ 32,454 $ ( 611,158 ) $ ( 578,475 ) Net loss — — — ( 50,297 ) ( 50,297 ) Stock-based compensation 292 2 2,824 — 2,826 Repurchases of common stock ( 103 ) ( 1 ) ( 372 ) — ( 373 ) Balance at April 4, 2026 23,049 $ 230 $ 34,906 $ ( 661,455 ) $ ( 626,319 ) Common Stock Additional Paid-in Capital Accumulated Deficit Total Shares Amount Balance at December 28, 2024 22,388 224 27,390 ( 479,200 ) ( 451,586 ) Net loss — — — ( 8,646 ) ( 8,646 ) Stock-based compensation 346 3 3,948 — 3,951 Repurchases of common stock ( 74 ) — ( 563 ) — ( 563 ) Balance at March 29, 2025 22,660 227 30,775 ( 487,846 ) ( 456,844 ) See accompanying notes to condensed consolidated financial statements. 4 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited - in thousands) Three Months Ended April 4, 2026 March 29, 2025 Cash flows from operating activities: Net loss $ ( 50,297 ) $ ( 8,646 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 12,371 14,836 Stock-based compensation 2,826 3,951 Inventory obsolescence write off 2,099 — Loss on disposal and impairment of leased assets 17,539 17 Deferred income taxes — ( 1,321 ) Changes in operating assets and liabilities: Accounts receivable 2,148 3,291 Inventories 1,918 ( 724 ) Income taxes 482 736 Prepaid expenses and other assets ( 4,266 ) 781 Accounts payable 3,818 8,784 Customer prepayments 3,811 ( 6,576 ) Accrued compensation and benefits 4,354 ( 9,686 ) Other taxes and withholding ( 1,003 ) ( 1,925 ) Other accruals and liabilities ( 3,551 ) ( 6,144 ) Net cash used in operating activities ( 7,751 ) ( 2,626 ) Cash flows from investing activities: Purchases of property and equipment ( 5,441 ) ( 4,599 ) Net cash used in investing activities ( 5,441 ) ( 4,599 ) Cash flows from financing activities: Net increase in short-term borrowings 13,805 9,087 Repurchases of common stock ( 373 ) ( 563 ) Debt issuance costs ( 449 ) ( 1,558 ) Net cash provided by financing activities 12,983 6,966 Net decrease in cash and cash equivalents ( 209 ) ( 259 ) Cash and cash equivalents, at beginning of period 1,693 1,950 Cash and cash equivalents, at end of period $ 1,484 $ 1,691 See accompanying notes to condensed consolidated financial statements. 5 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of Contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited) 1. Business and Summary of Significant Accounting Policies Business & Basis of Presentation The Company prepared the condensed consolidated financial statements as of and for the three months ended April 4, 2026 of Sleep Number Corporation and its 100%-owned subsidiaries (Sleep Number or the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in the opinion of management, all normal recurring adjustments, including the elimination of all intra-entity balances and transactions, necessary to present fairly its financial position as of April 4, 2026 and January 3, 2026 , and the consolidated results of operations and cash flows for the periods presented. The historical and quarterly consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the most recent audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2026 and other recent filings with the SEC. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the consolidated financial statements in future periods and could be material. The Company’s critical accounting policies consist of stock-based compensation, warranty liabilities, revenue recognition and valuation allowance for deferred tax assets. Accounting Pronouncements Recently Adopted In July 2025 , the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, including those assets acquired in a business combination. This guidance is effective for the Company for its fiscal year and all interim periods beginning January 4, 2026 on a prospective basis. The Company has elected the practical expedient under the standard which permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. This simplifies the estimation process for short-term financial assets. The adoption of ASU 2025‑05 did not have a material impact on the Company’s results of operations, cash flows or financial condition. Going Concern The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the foreseeable future. Historically, the Company has relied principally on liquidity generated from operating activities to fund the Company’s day- to-day operations and service its debt. The Company has a history of net losses and negative operating cash flows and expects to continue to incur additional losses in the future. Although the Company continues to pursue its turnaround strategy “Sleep Number Shifts,” centered on product, marketing and distribution, as well as ongoing cost savings and operating efficiencies, to reignite growth and increase financial resilience, the timing and realization of its turnaround strategy cannot be guaranteed to ensure sufficient cash flow is generated to provide liquidity to meet the Company’s obligations. While the Company was able to amend its Credit Agreement to provide that the lenders will forbear from 6 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of Contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited) exercising certain rights and remedies in respect to certain events of default under the Credit Agreement (the “Specified Defaults”) through the first week ending after July 1, 2026, and add a $ 25 million term loan facility with a maturity date of June 30, 2026, the Company was not able to amend covenants beyond July 1, 2026 and therefore the Company anticipates that it will not remain in compliance with the financial covenants of its Credit Agreement for the next twelve months. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan to address the substantial doubt about the Company’s ability to continue as a going concern, as described above, includes the following ongoing actions: • execute the Company’s turnaround strategy centered on product, marketing and distribution with ongoing cost savings and operating efficiencies to reignite growth and increase financial resilience; • following the recent amendment of the Credit Agreement, the Company continues to engage with lenders to fulfill the Company’s obligations under the credit facility and other provisions as needed ; and • work with financial advisors to negotiate with the lenders and identify and secure additional capital options, alternative financing arrangements, strategic alternatives, or other comprehensive solutions to address the Company’s capital structure and leverage needs to return to growth and create long-term value. There can be no assurance of the Company’s ability to realize these plans. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of issuance of these financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. 2. Fair Value Measurements At both April 4, 2026 and January 3, 2026 , the Company had $ 17 million of debt and equity securities that fund the deferred compensation plan and are classified in other non-current assets. The Company also had corresponding deferred compensation plan liabilities of $ 17 million at both April 4, 2026 and January 3, 2026 which are included in other non-current liabilities. The majority of the debt and equity securities are Level 1 as they trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis. Unrealized gains/(losses) on the debt and equity securities offset those associated with the corresponding deferred compensation plan liabilities. During the three months ended April 4, 2026 , the Company continued to initiate cost savings and operationa Item 1A. Risk Factors 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28 Item 3. Defaults Upon Senior Securities 28 Item 4. Mine Safety Disclosures 28 Item 5. Other Information 28 Item 6. Exhibits 29 SIGNATURES 30 1 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands, except per share amounts) April 4, 2026 January 3, 2026 Assets (unaudited) (audited) Current assets: Cash and cash equivalents $ 1,484 $ 1,693 Accounts receivable, net of allowances of $ 656 and $ 694 , respectively 13,354 15,502 Inventories 78,216 82,233 Prepaid expenses 19,727 13,656 Other current assets 30,694 36,873 Total current assets 143,475 149,957 Non-current assets: Property and equipment, net 73,755 86,528 Operating lease right-of-use assets 295,315 311,723 Goodwill and intangible assets, net 66,131 66,186 Deferred income taxes 399 399 Other non-current assets 61,933 65,267 Total assets $ 641,008 $ 680,060 Liabilities and Shareholders’ Deficit Current liabilities: Borrowings under credit facility $ 605,600 $ 588,200 Accounts payable 116,395 117,977 Customer prepayments 43,338 39,527 Accrued sales returns 12,266 12,817 Compensation and benefits 19,415 14,975 Taxes and withholding 10,908 11,429 Operating lease liabilities 79,340 81,191 Other current liabilities 44,447 46,430 Total current liabilities 931,709 912,546 Non-current liabilities: Operating lease liabilities 268,697 273,111 Other non-current liabilities 66,921 72,878 Total liabilities 1,267,327 1,258,535 Shareholders’ deficit: Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding — — Common stock, $ 0.01 par value; 142,500 shares authorized, 23,049 and 22,860 shares issued and outstanding, respectively 230 229 Additional paid-in capital 34,906 32,454 Accumulated deficit ( 661,455 ) ( 611,158 ) Total shareholders’ deficit ( 626,319 ) ( 578,475 ) Total liabilities and shareholders’ deficit $ 641,008 $ 680,060 See accompanying notes to condensed consolidated financial statements. 2 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited - in thousands, except per share amounts) Three Months Ended April 4, 2026 March 29, 2025 Net sales $ 318,987 $ 393,261 Cost of sales 134,372 152,726 Gross profit 184,615 240,535 Operating expenses: Sales and marketing 160,795 189,103 General and administrative 33,592 38,619 Research and development 5,348 10,903 Restructuring costs 21,736 60 Total operating expenses 221,471 238,685 Operating (loss) income ( 36,856 ) 1,850 Interest expense, net 13,103 11,081 Loss before income taxes ( 49,959 ) ( 9,231 ) Income tax expense (benefit) 338 ( 585 ) Net loss $ ( 50,297 ) $ ( 8,646 ) Basic and diluted net loss per share: Net loss per share – basic and diluted $ ( 2.19 ) $ ( 0.38 ) Weighted-average shares – basic and diluted 22,991 22,706 See accompanying notes to condensed consolidated financial statements. 3 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Shareholders’ Deficit (unaudited - in thousands) Common Stock Additional Paid-in Capital Accumulated Deficit Total Shares Amount Balance at January 3, 2026 22,860 $ 229 $ 32,454 $ ( 611,158 ) $ ( 578,475 ) Net loss — — — ( 50,297 ) ( 50,297 ) Stock-based compensation 292 2 2,824 — 2,826 Repurchases of common stock ( 103 ) ( 1 ) ( 372 ) — ( 373 ) Balance at April 4, 2026 23,049 $ 230 $ 34,906 $ ( 661,455 ) $ ( 626,319 ) Common Stock Additional Paid-in Capital Accumulated Deficit Total Shares Amount Balance at December 28, 2024 22,388 224 27,390 ( 479,200 ) ( 451,586 ) Net loss — — — ( 8,646 ) ( 8,646 ) Stock-based compensation 346 3 3,948 — 3,951 Repurchases of common stock ( 74 ) — ( 563 ) — ( 563 ) Balance at March 29, 2025 22,660 227 30,775 ( 487,846 ) ( 456,844 ) See accompanying notes to condensed consolidated financial statements. 4 | 1Q 2026 FORM 10-Q SLEEP NUMBER CORPORATION Table of contents SLEEP NUMBER CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited - in thousands) Three Months Ended April 4, 2026 March 29, 2025 Cash flows from operating activities: Net loss $ ( 50,297 ) $ ( 8,646 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 12,371 14,836 Stock-based compensation 2,826 3,951 Inventory obsolescence write off 2,099 — Loss on disposal and impairment of leased assets 17,539 17 Deferred income taxes — ( 1,321 ) Changes in operating assets and liabilities: Accounts receivabl
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Filed by Sleep Number Corporation; analysis compiled from the company's Form 10‑Q and accompanying financial statements and notes.
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Suggested action: sell (recommended strategy). Review the full 10‑Q for detailed line-item analysis, lender amendment terms, covenant schedule, and potential capital solutions before taking or adjusting positions.