What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-26 compared with 2025-02-21 · 288 added, 221 removed, 1134 unchanged (31% of the section changed)

56 unchanged sentences

S-1 333-231891 4.7 May 31, 2019

4.3 Indenture dated June 15, 2020, between The RealReal, Inc.

Bank National Association as Trustee, including form of 3.00% Convertible Senior Note due 2025.

8-K 001-38953 4.1 June 16, 2020

4.3 Description of Securities.

24 unchanged sentences

S-1 333-231891 10.6 May 31, 2019

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

10.6# Fourth Amendment to Loan and Security Agreement dated as of December 28, 2015 by and between The RealReal, Inc.

1 unchanged sentence

S-1 333-231891 10.7 May 31, 2019

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

10.7# Fifth Amendment to Loan and Security Agreement dated as of July 18, 2016 by and between The RealReal, Inc.

31 unchanged sentences

S-1 333-231891 10.19 May 31, 2019

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

10.18# Lease Agreement dated as of September 14, 2018 by and between The RealReal, Inc.

4 unchanged sentences

S-1 333-231891 10.21 June 17, 2019

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

10.20+ The RealReal, Inc.

27 unchanged sentences

10-Q 001-38953 10.1 May 10, 2021

Transition and Separation Agreement by and between The RealReal, Inc.

and Robert Julian dated September 28, 2023.

001-38953 10.1 September 29, 2023

10.31+ Consulting Services Agreement by and between The RealReal, Inc.

and Robert Julian dated September 28, 2023

8-K 001-38953 10.20 September 29, 2023

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

The RealReal, Inc.

4 unchanged sentences

10-Q 001-38953 10.1 August 9, 2022

Offer Letter dated January 24, 2023 between the Company and John E.

8-K 001-38953 10.1 January 25, 2023

Form of Indemnification Agreement entered into by and between The RealReal, Inc.

1 unchanged sentence

10.35 February 28, 2023

Form of Stand-Alone Performance-Based Restricted Stock Unit Award Agreement, by and between the Company and John Koryl.

99.1 March 3, 2023

Form of Stand-Alone Restricted Stock Unit Award Agreement, by and between the Company and John Koryl.

99.2 March 3, 2023

Form of Stand-Alone Restricted Stock Unit Award Agreement, by and between the Company and Luke Friang.

99.3 March 3, 2023

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

Offer Letter by and between The RealReal, Inc.

19 unchanged sentences

10.3 November 4, 2024

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

Form of Severance and Change in Control Agreement approved by the Company’s board of directors on October 29, 2024.

3 unchanged sentences

10.1 February 10, 2025

Separation Agreement, dated August 4, 2025, by and between The RealReal, Inc.

and Chatelle Lynch.

10.1 August 7, 2025

Form of Exchange Agreement, dated as of August 20, 2025, by and among The RealReal, Inc.

and the Noteholder Parties.

10.1 August 21, 2025

19 The RealReal, Inc.

Insider Trading Policy.

19 February 21, 2025

23.1 Consent of KPMG LLP, Independent Registered Public Accounting Firm

31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Incorporated by Reference

Description Form File No.

Exhibit Filing Date Filed

31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

37 unchanged sentences

Steve Lo (Principal Accounting Officer)

/s/ Chip Baird

Director February 21, 2025

/s/ Caretha Coleman Director February 26, 2026

4 unchanged sentences

Niki Leondakis

/s/ Carol Melton

Director February 21, 2025

/s/ James Miller Director February 26, 2026

/s/ Mark McCaffrey

Director February 26, 2026

Mark McCaffrey

INDEX TO FINANCIAL STATEMENTS

110 unchanged sentences

Non-convertible notes, net

140,980 134,470

Warrant liability

114,353 78,584

Other noncurrent liabilities 7,352 6,144

34 unchanged sentences

Selling, general and administrative 201,589 187,737 183,793

Restructuring 196 43,462 896

Restructuring charges — 196 43,462

Total operating expenses 540,756 504,016 542,571

3 unchanged sentences

Gain on extinguishment of debt

40,785 4,177 —

Interest income 4,257 7,943 8,805

5 unchanged sentences

$ ( 41,799 ) $ ( 134,202 ) $ ( 168,472 )

Net loss per share attributable to common stockholders, basic and diluted

$ ( 1.24 ) $ ( 1.65 ) $ ( 2.05 )

Shares used to compute net loss per share attributable to common stockholders, basic and diluted

107,878,366 101,806,000 95,921,246

Net loss per share attributable to common stockholders, basic $ ( 0.36 ) $ ( 1.24 ) $ ( 1.65 )

Net loss per share attributable to common stockholders, diluted $ ( 0.70 ) $ ( 1.24 ) $ ( 1.65 )

Weighted average shares used to compute net loss per share attributable to common stockholders, basic 114,871,414 107,878,366 101,806,000

Weighted average shares used to compute net loss per share attributable to common stockholders, diluted 116,512,265 107,878,366 101,806,000

The accompanying notes are an integral part of these financial statements.

8 unchanged sentences

Balance as of December 31, 2022 99,088,172 $ 1 $ 781,060 $ ( 951,153 ) $ ( 170,092 )

Cumulative effect adjustment due to adoption of ASU 2020-06 — — ( 112,052 ) 13,420 ( 98,632 )

Issuance of common stock upon exercise of options 8,511 — 19 — 19

4 unchanged sentences

Balance as of December 31, 2023 104,670,500 $ 1 $ 816,325 $ ( 1,119,625 ) $ ( 303,299 )

Settlement of capped calls — — 396 — 396

Issuance of common stock upon exercise of options 136,658 — 376 — 376

5 unchanged sentences

Settlement of capped calls — — 1,907 — 1,907

— — 396 — 396

Issuance of common stock upon exercise of options 221,028 — 1,030 — 1,030

22 unchanged sentences

Provision for inventory write-downs and shrinkage 2,214 2,590 9,783

2,590 9,783 4,077

Gain on debt extinguishment ( 40,785 ) ( 4,177 ) —

( 4,177 ) — —

Change in fair value of warrant liability 35,769 68,167 —

Loss related to warehouse fire, net

Loss (gain) related to warehouse fire, net ( 95 ) 740 —

Other adjustments ( 39 ) ( 165 ) ( 515 )

10 unchanged sentences

Net cash provided by (used in) operating activities 37,010 26,846 ( 61,268 )

26,846 ( 61,268 ) ( 91,557 )

Cash flow from investing activities:

3 unchanged sentences

Net cash used in investing activities ( 29,224 ) ( 25,587 ) ( 42,128 )

( 25,587 ) ( 42,128 ) ( 36,922 )

Cash flow from financing activities:

1 unchanged sentence

Proceeds from issuance of stock in connection with the Employee Stock Purchase Program 1,652 1,413 886

Repayment of 2025 Notes ( 26,749 ) — —

Taxes paid related to restricted stock vesting ( 160 ) ( 1,646 ) ( 679 )

Cash received from settlement of capped calls in conjunction with the 2024 Note Exchange

Issuance costs paid related to the 2024 Note Exchange

( 5,298 ) — —

Cash received from settlement of Capped Calls in conjunction with the Note Exchanges 1,907 396 —

Issuance costs paid related to the Note Exchanges ( 6,550 ) ( 5,298 ) —

Net cash (used in) provided by financing activities ( 28,870 ) ( 4,759 ) 226

( 4,759 ) 226 4,101

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net decrease in cash, cash equivalents, and restricted cash

( 21,084 ) ( 3,500 ) ( 103,170 )

7 unchanged sentences

Property and equipment additions not yet paid in cash 3,480 1,818 1,757

1,818 1,757 13,860

Capitalized proprietary software development costs not yet paid in cash 978 654 1,122

654 1,122 1,590

Stock-based compensation capitalized to proprietary software development costs 318 504 777

1 unchanged sentence

Net decrease in principal amount of debt due to the 2024 Note Exchange — ( 17,232 ) —

( 17,232 ) — —

Net decrease in principal amount of debt due to the February 2025 Note Exchange ( 36,656 ) — —

Net decrease in principal amount of debt due to the August 2025 Note Exchange ( 6,084 ) — —

Tax withholding liability for restricted stock — — 11

12 unchanged sentences

The Company’s functional and reporting currency is the U.S.

The Company has made a presentation change to the Company's statements of operations to reclassify its legal settlements expense to selling, general, and administrative expenses.

Additionally, the Company has made a presentation change to reclassify loss on disposal of property and equipment, impairment of capitalized proprietary software, and gain on lease termination to other adjustments within operating cash flows in the statements of cash flows.

Changes to reclassify amounts in the prior periods have been made to conform to the current period presentation.

Summary of Significant Accounting Policies

1 unchanged sentence

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period.

Significant items subject to such estimates and assumptions include those related to revenue recognition, including the returns reserve, standalone selling price related to consignment revenue transactions, valuation of inventory, software development costs, stock-based compensation, fair value of warrant liability, initial fair value of non-convertible notes issued as part of the 2024 Note Exchange (see Note 6 — Non-convertible Notes, Net), incremental borrowing rates related to lease liability, valuation of deferred taxes, and other contingencies.

Significant items subject to such estimates and assumptions include those related to revenue recognition, including the returns reserve, standalone selling price related to consignment revenue transactions, valuation of inventory, software development costs, stock-based compensation, fair value of warrant liability, initial fair value of non-convertible notes issued in the 2024 Note Exchange (see Note 6 — Non-convertible Notes, Net), initial fair value of convertible notes issued in the 2025 Notes Exchanges (see Note 7 — Convertible Senior Notes, Net), incremental borrowing rates related to lease liability, valuation of deferred taxes, and other contingencies.

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

4 unchanged sentences

The two-class method requires income (loss) available or attributable to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company’s convertible senior notes are participating securities as they give the holders the right to receive dividends if dividends or distributions declared to the common stockholders is equal to or greater than the last reported sale price of the Company’s common stock on the trading day immediately preceding the ex-dividend date for such dividend or distribution as if the instruments had been converted into shares of common stock.

The Company’s Convertible Senior Notes (as defined below) are participating securities as they give the holders the right to receive dividends if dividends or distributions declared to the common stockholders is equal to or greater than the last reported sale price of the Company’s common stock on the trading day immediately preceding the ex-dividend date for such dividend or distribution as if the instruments had been converted into shares of common stock.

No undistributed earnings were allocated to the participating securities as the contingent event is not satisfied as of the reporting date.

For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares and assumed conversion of the convertible senior notes are not assumed to have been issued within the calculation, if their effect is anti-dilutive.

The Company has one operating segment and one reportable segment as its chief operating decision maker, who is its Chief Executive Officer, reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Basic net loss per share attributable to common stockholders is calculated by dividing the net loss for the period by the weighted-average number of shares of common stock outstanding during the period.

Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method, as applicable, based on the nature of such securities.

The Company has one operating segment and one reportable segment as its chief operating decision maker, the Chief Executive Officer (the "CODM"), reviews financial information on a consolidated basis for purposes of allocating

resources and evaluating financial performance.

All long-lived assets are located in the United States and substantially all revenue is attributed to consignors and buyers based in the United States.

11 unchanged sentences

Title to the consigned goods remains with the consignor until transferred to the buyer upon purchase of the consigned goods and expiration of the allotted return period.

The Company does not take title of consigned goods at any time except in certain cases where returned goods become Company-owned inventory.

The Company does not take title of consigned goods at any time except in certain cases where returned goods become Company-owned inventory or the Company buys goods directly from a vendor or consignor.

The Company recognizes consignment revenue upon purchase of the consigned good by the buyer as its performance obligation of providing consignment services to the consignor is satisfied at that point.

Consignment revenue is recognized net of estimated returns, cancellations, buyer incentives and adjustments.

The Company recognizes a returns reserve based on historical experience, which is recorded in other accrued and current liabilities on the balance sheets (see Note 5).

The Company recognizes a returns reserve based on historical experience, which is recorded in other accrued and current liabilities on the balance sheets (see Note 5 — Balance Sheet Components).

Sales tax assessed by governmental authorities is excluded from revenue.

17 unchanged sentences

The Company determines itself to be the principal in this arrangement.

The Company charges a fee to buyers

for this service and has elected to treat shipping and handling activities performed as a separate performance obligation.

The Company charges a fee to buyers for this service and has elected to treat shipping and handling activities performed as a separate performance obligation.

For shipping services revenue, the Company's SSP is estimated using a market approach considering external and internal data points on the stand-alone sales price of the shipping service.

All outbound shipping and handling costs for buyers are accounted for as cost of shipping services and recognized as the shipping activity occurs.

All outbound shipping and handling costs for buyers are

accounted for as cost of shipping services and recognized as the shipping activity occurs.

The Company also generates shipping services revenue from the shipping fees for consigned products returned by buyers to the Company within policy.

26 unchanged sentences

Selling, general and administrative expense is principally comprised of the personnel-related costs for employees involved in sales, finance and administration, and includes stock-based compensation expense.

Selling, general and

administrative expense also includes allocated facility and overhead costs and professional services, including accounting and legal advisors.

Selling, general and administrative expense also includes allocated facility and overhead costs and professional services, including accounting and legal advisors.

Stock-based Compensation

15 unchanged sentences

Restricted cash consists of cash deposited with a financial institution as collateral for the Company’s letters of credit for its facility leases and the Company’s credit cards.

The Company had $ 14.9 million in restricted cash as of December 31, 2024 and 2023.

The following table provides a reconciliation of cash, cash equivalents and restricted cash for the year ended December 31, 2024 that sum to the total of the same amounts shown in the statements of cash flows (in thousands):

The Company had $ 14.8 million and $ 14.9 million in restricted cash as of December 31, 2025 and 2024, respectively.

The following table provides a reconciliation of cash, cash equivalents and restricted cash for the periods presented that sum to the total of the same amounts shown in the statements of cash flows (in thousands):

December 31, 2025 December 31, 2024 December 31, 2023

4 unchanged sentences

Accounts receivables are recorded at the amounts billed to buyers and do not bear interest.

Accounts receivables result from credit card transactions, the majority of which are settled within two business days.

Accounts receivables result from transactions with payment processors, the majority of which are settled within two business days.

Inventory, Net

3 unchanged sentences

After the inventory value is reduced, adjustments are not made to increase it from the estimated net realizable value.

Additionally, inventory is recorded net of an allowance for shrinkage

which represents the risk of physical loss of inventory.

Additionally, inventory is recorded net of an allowance for shrinkage which represents the risk of physical loss of inventory.

Provisions for inventory shrinkage are estimated based on historical experience and are adjusted based upon physical inventory counts.

29 unchanged sentences

The corresponding right-of-use asset is recorded based on the corresponding lease liability at lease inception, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred and any tenant incentives allowed for under the lease.

The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be

exercised at the inception of the lease.

The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be exercised at the inception of the lease.

Operating lease right-of-use assets, current portion of operating lease liabilities, and operating lease liabilities, net of current portion are included on the Company’s balance sheet.

2 unchanged sentences

The Company has finance leases for vehicles and equipment, and the amounts of finance lease right-of-use assets and finance lease liabilities have been immaterial to date.

Convertible Senior Notes, Net

Prior to the adoption of ASU 2020-06 on January 1, 2022, convertible debt instruments that may be settled in cash or other assets, or partially in cash, upon conversion, were separately accounted for as long-term debt and equity components (or conversion feature).

The debt component represented the Company’s contractual obligation to pay principal and interest and the equity component represented the Company’s option to convert the debt security into equity of the Company or the equivalent amount of cash.

Upon issuance, the Company allocated the debt component on the basis of the estimated fair value of a similar liability that does not have an associated convertible feature and the remaining proceeds are allocated to the equity component.

The bifurcation of the debt and equity components resulted in a debt discount for the aforementioned notes.

The Company uses the effective interest method to amortize the debt discount to interest expense over the amortization period which is the expected life of the debt.

Following the adoption of ASU 2020-06, there is no bifurcation of the liability and equity components of the 3.00 % Convertible Senior Notes due 2025 (the “2025 Notes”) and the 1.00 % Convertible Senior Notes due 2028 (the “2028 Notes” and, together with the 2025 Notes, the “Notes”), and the entire principal of the Notes are accounted for as debt.

The Company initially recognizes incurred debt, net of any discounts, premiums and issuance costs related to the debt offering.

11 unchanged sentences

Debt issuance costs, which consist of direct incremental legal, consulting, banking and accounting fees related to the anticipated debt offering, are amortized to interest expense over the estimated life of the related debt based on the effective interest method.

The Company presents debt issuance costs on the balance sheets as a direct deduction from the associated debt.

The Company adopted ASU 2020-06 as of January 1, 2022 using the modified retrospective method.

Prior to the adoption of ASU 2020-06 on January 1, 2022, a portion of debt issuance costs incurred in connection with the convertible senior notes issued in June 2020 and March 2021 was allocated to the equity component and was recorded as a reduction to additional paid in capital and was not amortized to interest expense over the estimated life of the related debt.

Following the adoption of ASU 2020-06, the debt issuance costs previously allocated to the equity component of both series of Notes were reclassified to debt.

As such, all of the debt issuance costs are recorded as a direct deduction from the related principal debt amounts on the balance sheet, and are all amortized to interest expense over the estimated remaining life of the related debt.

The Company presents debt issuance costs as a direct deduction from the related principal debt amounts on the balance sheet, and are all amortized to interest expense over the estimated remaining life of the related debt.

Income taxes are accounted for under the asset and liability method.

14 unchanged sentences

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures requires disclosures about significant segment expenses that are regularly provided to the chief operating decision maker.

This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the standard during the year ended December 31, 2024 and applied it retrospectively to the periods presented.

The adoption of this standard did not have a material impact on the Company's financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures.

This new guidance is designed to enhance the transparency and decision usefulness of income tax disclosures.

The amendments of this update are related to the rate reconciliation and income taxes paid, requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently assessing the impact that adopting this new accounting standard will have on its financial statements.

The Company has adopted this ASU as of December 31, 2025 prospectively to the current period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

Refer to Note 13.

Income Taxes in the accompanying notes to the financial statements for further detail.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires companies to disclose in the notes to the financial statements the disaggregation of certain expense categories included within the income statement expense captions.

7 unchanged sentences

The Company is currently assessing the impact that adopting this new accounting standard will have on its financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

This ASU provides updated guidance clarifying the capitalization of costs related to internal-use software, including enhanced guidance on cloud computing arrangements.

ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted.

The Company is currently assessing the impact that adopting this new accounting standard will have on its financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities.

The amendments in this update establish the accounting for a government grant received by a business entity.

The guidance is effective for fiscal years beginning after December 15, 2028, with early adoption permitted.

The Company is currently assessing the impact that adopting this new accounting standard will have on its financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently assessing the impact that adopting this new accounting standard will have on its financial statements.

Cash and Cash Equivalents

24 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table sets forth the Company's financial instruments on the balance sheet that were measured at fair value on a recurring basis for the period indicated by level within the fair value hierarchy (in thousands):

The following tables set forth the Company's financial instruments on the balance sheet that were measured at fair value on a recurring basis for the period indicated by level within the fair value hierarchy (in thousands):

December 31, 2025

6 unchanged sentences

$ — $ — $ 114,353 $ 114,353

As of December 31, 2023, the Company held $ 124.8 million in money market funds.

Such amounts are considered Level 1 and the Company held no other assets or liabilities that are measured at fair value on a recurring basis.

December 31, 2024

Financial assets:

Money market funds

$ 147,342 $ — $ — $ 147,342

Financial liabilities:

$ — $ — $ 78,584 $ 78,584

Fair Value Measurements of Other Financial Instruments

3 unchanged sentences

Estimated Fair Value

2025 Convertible senior notes $ 26,653 $ 26,493 $ 170,564 $ 128,219

2028 Convertible senior notes $ 276,807 $ 216,291 $ 281,857 $ 99,978

2029 Non-convertible notes

$ 134,470 $ 140,889 $ — $ —

The principal amounts of the 2025 Notes, the 2028 Notes and the 2029 Notes are $ 26.7 million, $ 281.0 million, and $ 137.9 million, respectively.

2025 Notes $ — $ — $ 26,653 $ 26,493

2028 Notes $ 47,703 $ 45,152 $ 276,807 $ 216,291

2029 Notes $ 140,980 $ 153,712 $ 134,470 $ 140,889

2031 Notes $ 183,130 $ 280,269 $ — $ —

During the period ended June 30, 2025, the Company repaid the outstanding principal amount of the 3.00 % Convertible Senior Notes due 2025 (the "2025 Notes") at maturity.

The outstanding principal amounts of the 1.00 % Convertible Senior Notes due 2028 (the "2028 Notes"), 4.25 %/ 8.75 % PIK/cash senior secured notes due 2029 (the “2029 Notes”) and 4.00 % Convertible Senior Notes due 2031 (the “2031 Notes” and, together with the 2028 Notes, and the 2029 Notes, the "Notes") are $ 48.2 million, $ 143.8 million and $ 190.1 million, respectively.

The difference between the principal amounts of such notes and their respective net carrying amounts are the unamortized debt issuance costs and debt premiums.

As of December 31, 2024, the fair value of the 2025 Notes, the 2028 Notes and the 2029 Notes, which differs from their carrying value, is determined based on the quoted bid prices of such notes in an over-the counter market using the latest trading information of the reporting period.

For the periods presented, the fair value of the 2025 Notes, the 2028 Notes, the 2029 Notes and the 2031 Notes, which differs from their carrying value, is determined based on the quoted bid prices of such notes in an over-the counter market using the latest trading information of the reporting period.

Fair Value Measurement of Warrants

In connection with the 2024 Note Exchange (defined in Note 6 – Non-convertible Notes, Net), the Company issued warrants (the "Warrants") to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the Warrants) of the Company’s common stock to the holders of the Exchanged Notes at an exercise price of $ 1.71 , subject to certain cashless exercise provisions and adjustment in accordance with the terms of the Warrants.

In connection with the 2024 Note Exchange (defined in Note 6 – Non-convertible Notes, Net), the Company issued warrants (the "Warrants") to the participants in the 2024 Note Exchange to acquire an aggregate of up to 7,894,737 shares (subject to adjustment in accordance with the terms of the Warrants) of the Company’s common stock to the holders of the Exchanged Notes at an exercise price of $ 1.71 , subject to certain cashless exercise provisions and adjustment in accordance with the terms of the Warrants.

The Warrants are exercisable from the date of issuance until they expire on March 1, 2029.

2 unchanged sentences

Issuance costs allocated to the Warrants are included in selling, general and administrative on the Company’s statements of operations.

The aggregate fair value of the Warrants upon issuance and as of December 31, 2024 was $ 10.4 million and $ 78.6 million, respectively, determined using a Black-Scholes Model with the following inputs:

On issuance December 31, 2024

The aggregate fair value of the Warrants for the periods presented was determined using a Black-Scholes Model with the following inputs:

December 31, 2025 December 31, 2024

Stock price $ 15.78 $ 10.93

6 unchanged sentences

3.55 % 4.38 %

The following table presents the activity related to the Warrants during the year ended December 31, 2024.

December 31, 2024

Opening balance

The following table presents the activity related to the Warrants for each of the years presented:

December 31, 2025 December 31, 2024

Beginning balance $ 78,584 $ —

Issuance of warrants — 10,417

Change in fair value 35,769 68,167

Balance as of December 31, 2024

Ending balance $ 114,353 $ 78,584

Balance Sheet Components

16 unchanged sentences

The impairment charges are included in restructuring in the statements of operations.

The Company did not record impairment of leasehold improvements or disposal of fixed assets related to the savings plan during the year ended December 31, 2024.

The Company did not record impairment of leasehold improvements or disposal of fixed assets related to the savings plan during the years ended December 31, 2024 and December 31, 2025.

Other Accrued and Current Liabilities

14 unchanged sentences

2024 Note Exchange

On February 29, 2024 (the “Closing Date”), the Company entered into exchange agreements with certain holders (the “Exchange Holders”) of its 2025 Notes and 2028 Notes to exchange (i) $ 145.8 million in aggregate principal amount of the 2025 Notes and (ii) $ 6.5 million in aggregate principal amount of the 2028 Notes (together, the “Exchanged Notes”) for $ 135.0 million in aggregate principal amount of the Company’s 4.25 %/ 8.75 % PIK/Cash Senior Secured Notes due 2029 (the “2029 Notes”), pursuant to an indenture (the “2024 Note Exchange”).

On February 29, 2024, the Company entered into exchange agreements with certain holders of its 2025 Notes and 2028 Notes to exchange (i) $ 145.8 million in aggregate principal amount of the 2025 Notes and (ii) $ 6.5 million in aggregate principal amount of the 2028 Notes (together, the “2024 Exchanged Notes”) for $ 135.0 million in aggregate principal amount of the Company’s 2029 Notes, pursuant to an indenture (the “2024 Note Exchange”).

The 2029 Notes bear interest at a rate of 13.00 % per annum, consisting of cash interest at a rate of 8.75 % per annum payable semi-annually in arrears and payment in-kind (“PIK”) interest at a rate of 4.25 % per annum payable semi-annually .

During the year ended December 31, 2024, $ 2.9 million was added to the principal amounts outstanding due to accrued PIK interest.

During the years ended December 31, 2025 and December 31, 2024, $ 5.9 million and $ 2.9 million was added to the principal amounts

outstanding due to accrued PIK interest, respectively.

The 2029 Notes will mature on the earlier of (a) March 1, 2029 and (b) any date, if any, on or after December 1, 2027 on which (a) the aggregate principal amount of the 2028 Notes then outstanding is greater than $ 20 million and (b) the difference between (i) the amount of unrestricted cash and cash equivalents held by the Company and its subsidiaries (if any) as of such date of determination and (ii) the aggregate principal amount of 2028 Notes outstanding as of such date of determination is less than $ 75 million.

In connection with the 2024 Note Exchange, the Company issued the Warrants (see Note 4 – Fair Value Measurement for further details on the terms of the Warrants).

As a result of the 2024 Note Exchange, the Company’s principal debt balance decreased $ 17.2 million.

As a result of the 2024 Note Exchange, the Company’s principal debt balance decreased $ 17.2 million as of the closing date of the 2024 Note Exchange.

As the terms of the 2029 Notes were deemed to have substantially different terms from the 2024 Exchanged Notes, the 2024 Note Exchange was accounted for as an extinguishment of the 2024 Exchanged Notes.

In connection with debt extinguishment accounting, the Company recorded a gain of $ 4.2 million as the difference between the carrying amount of the 2024 Exchanged Notes and the fair value of the 2029 Notes.

Included in the recorded gain are unamortized debt discounts and issuance costs related to the Exchanged Notes and the fair value of the Warrants as they represent fees paid to the Exchange Holders as part of the 2024 Note Exchange.

Included in the recorded gain are unamortized debt discounts and issuance costs related to the 2024 Exchanged Notes and the fair value of the Warrants as they represent fees paid to certain holders of its 2025 Notes and 2028 Notes in connection with the 2024 Note Exchange.

The Company allocated issuance costs to the Warrants and the 2029 Notes based on relative fair value.

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Issuance costs related to the 2029 Notes are being amortized to interest expense through the expected maturity of the 2029 Notes at an effective interest rate of 13.35 %.

The indenture governing the 2029 Notes contains certain covenants, which include (i) a covenant by the Company not to permit liquidity (calculated as the sum of (a) unused commitments then available to be drawn under any revolving credit facility, delayed draw term loan facility or qualified securitization financing permitted thereunder (after giving effect to any borrowing base or similar limitations), plus (b) the amount of unrestricted cash and cash equivalents held by the Company and its subsidiaries (if any)) to be less than $ 25 million as of the last day of any month, (ii) limitations on the Company’s and certain of its future subsidiaries’ (if any) ability to, among other things, (a) grant or incur liens securing indebtedness, (b) incur assume or guarantee additional indebtedness, (c) enter into transactions with affiliates, (d) sell or

otherwise dispose of assets, including capital stock of subsidiaries, (e) make certain restricted payments or other investments, or (f) pay dividends or make other distributions (including loans and other advances and (iii) limitations, in the case of the Company and any future guarantor (if any), to consolidate, amalgamate or merge with or into, or sell all or substantially all of its assets to, another person.

As of December 31, 2024 the Company was in compliance with all covenants.

The indenture governing the 2029 Notes sets forth certain events of default after which the 2029 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company or its subsidiaries.

The indenture governing the 2029 Notes (the "2029 Notes Indenture") contains certain covenants, which include (i) a covenant by the Company not to permit liquidity (calculated as the sum of (a) unused commitments then available to be drawn under any revolving credit facility, delayed draw term loan facility or qualified securitization financing permitted thereunder (after giving effect to any borrowing base or similar limitations), plus (b) the amount of unrestricted cash and cash equivalents held by the Company and its subsidiaries (if any)) to be less than $ 25 million as of the last day of any month, (ii) limitations on the Company’s and certain of its future subsidiaries’ (if any) ability to, among other things, (a) grant or incur liens securing indebtedness, (b) incur assume or guarantee additional indebtedness, (c) enter into transactions with affiliates, (d) sell or otherwise dispose of assets, including capital stock of subsidiaries, (e) make certain restricted payments or other investments, or (f) pay dividends or make other distributions (including loans and other advances and (iii) limitations, in the case of the Company and any future guarantor (if any), to consolidate, amalgamate or merge with or into, or sell all or substantially all of its assets to, another person.

As of December 31, 2025 the Company was in compliance with such covenants.

The 2029 Notes Indenture sets forth certain events of default after which the 2029 Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company or its subsidiaries.

The 2029 Notes are guaranteed by certain of the Company’s future wholly-owned domestic subsidiaries (if any) on a senior secured basis.

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and October 1, 2026 and thereafter - 100.0 %.

In addition, prior to March 1, 2025, the Company may redeem the 2029 Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100 % of the principal amount of the 2029 Notes redeemed plus the applicable premium as of, and accrued and unpaid interest to, but excluding, the applicable redemption date (subject to the right of holders of record of the relevant record date to receive interest due on the relevant interest payment date).

Notwithstanding the foregoing, at any time and from time to time on or prior to March 1, 2025, the Company may redeem in the aggregate up to 40 % of the original aggregate principal amount of the 2029 Notes (calculated after giving effect to the issuance of any PIK payments) with the net proceeds of one or more equity offerings to the extent the net cash proceeds thereof are contributed to the common equity capital of the Company or are used to purchase capital stock (other than disqualified stock) of the Company, at a redemption price of 113.0 %, plus accrued and unpaid interest, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), provided at least 60 % of the original aggregate principal amount of the 2029 Notes (calculated after giving effect to any PIK payments) remains outstanding after each such redemption.

A schedule of the Company's future maturities for the 2029 Notes with interest components included in principal, is as follows (in thousands):

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Convertible Senior Notes, Net

In June 2020, the Company issued an aggregate principal of $ 172.5 million of its 2025 Notes, pursuant to an indenture, in a private offering to qualified institutional buyers.

The 2025 Notes will mature on June 15, 2025, unless earlier redeemed or repurchased by the Company or converted.

February 2025 Note Exchange

On February 10, 2025, the Company entered into an exchange agreement with certain holders of its 2028 Notes to exchange $ 183.3 million in aggregate principal amount of the 2028 Notes (the “February 2025 Exchanged Notes”) for $ 146.7 million in aggregate principal amount of the Company's 2031 Notes, pursuant to an indenture (such exchange, the “February 2025 Note Exchange” and, together with the August 2025 Note Exchange and the 2024 Note Exchange, the "Note Exchanges" and such indenture, the "2031 Notes Indenture").

As a result of the February 2025 Note Exchange, the Company's principal debt balance decreased $ 36.7 million as of the closing date of the February 2025 Note Exchange.

The Company did not receive any cash connected to the February 2025 Note Exchange.

The 2031 Notes bear cash interest at a rate of 4.00 % per annum payable semi-annually in arrears;

provided that, solely with respect to the interest payment due on August 15, 2025, the 2031 Notes will bear additional cash interest at the rate of 1.25 % per year from September 1, 2024 to but excluding February 10, 2025, which interest will be paid in consideration for the accrued and unpaid interest on the February 2025 Exchanged Notes.

As the terms of the 2031 Notes issued on February 10, 2025 were deemed to have substantially different terms from the February 2025 Exchanged Notes, the February 2025 Note Exchange was accounted for as an extinguishment of the February 2025 Exchanged Notes.

In connection with debt extinguishment accounting, the Company recorded a gain of $ 37.1 million as the difference between the carrying amount of the February 2025 Exchanged Notes and the fair value of the 2031 Notes issued in the February 2025 Note Exchange.

Included in the recorded gain are unamortized debt discounts and issuance costs related to the February 2025 Exchanged Notes.

The Company recorded $ 5.2 million of issuance costs related to the 2031 Notes issued in connection with the February 2025 Note Exchange, which are being amortized to interest expense through the expected maturity of the 2031 Notes at an effective interest rate of 4.79 %.

The 2031 Notes Indenture does not contain any financial covenants;

it does contain customary covenants and events of default.

August 2025 Note Exchange

On August 20, 2025, the Company entered into an exchange agreement with certain holders of its 2028 Notes to exchange $ 49.5 million in aggregate principal amount of the 2028 Notes (the “August 2025 Exchanged Notes”, and together with the "February 2025 Exchanged Notes", the "2025 Exchanged Notes") for $ 43.4 million in aggregate principal amount of the Company's 2031 Notes, pursuant to the 2031 Notes Indenture (such exchange, the “August 2025 Note Exchange”, and together with the "February 2025 Note Exchange", the "2025 Note Exchanges").

As a result of the August 2025 Note Exchange, the Company's principal debt balance decreased $ 6.1 million as of the closing date of the August 2025 Note Exchange.

The Company did not receive any cash connected to the August 2025 Note Exchange.

As the terms of the 2031 Notes issued on August 20, 2025 were deemed to have substantially different terms from the August 2025 Exchanged Notes, the August 2025 Note Exchange was accounted for as an extinguishment of the August 2025 Exchanged Notes.

In connection with debt extinguishment accounting, the Company recorded a gain of $ 3.7 million as the difference between the carrying amount of the August 2025 Exchanged Notes and the fair value of the 2031 Notes issued in the August 2025 Note Exchange.

Included in the recorded gain are unamortized debt discounts and issuance costs related to the August 2025 Exchanged Notes.

The Company recorded $ 1.3 million of issuance costs related to the 2031 Notes issued in connection with the August 2025 Note Exchange, which are being amortized to interest expense through the expected maturity of the 2031 Notes at an effective interest rate of 3.79 %.

The 2031 Notes issued on August 20, 2025, together with the 2031 Notes previously issued by the Company on February 10, 2025, will form a single class of $ 190.1 million aggregate principal amount of 2031 Notes and will mature on February 15, 2031.

As of December 31, 2025, the carrying amount of the 2031 Notes is $ 183.1 million, net of unamortized issuance costs and debt discount, net of $ 6.9 million.

The 2031 Notes were classified as long-term liabilities as of December 31, 2025.

2025 Notes, 2028 Notes and 2031 Notes

In June 2020, the Company issued an aggregate principal amount of $ 172.5 million of its 2025 Notes, pursuant to an indenture, in a private offering to qualified institutional buyers.

In February 2024, certain of the 2025 Notes were extinguished in connection with the 2024 Note Exchange (see Note 6 — Non-convertible Notes, Net).

At issuance, the Company received net proceeds from the 2025 Notes offering of approximately $ 165.8 million, after deducting the initial purchasers’ discount and commission and offering expenses.

The Company used approximately $ 22.5 million of the net proceeds from the 2025 Notes offering to fund the net cost of entering into the capped call

transactions described below.

The Company intends to use the remainder of the net proceeds for general corporate purposes.

In March 2021, the Company issued an aggregate principal of $ 287.5 million of its 2028 Notes, pursuant to an indenture, in a private offering to qualified institutional buyers.

On June 15, 2025, the 2025 Notes matured, and the Company repaid the outstanding principal amount and accrued interest in full.

The total cash payment upon maturity of the 2025 Notes was $ 27.2 million.

Upon maturity, the 2025 Notes were retired, and no obligations remain under the indenture governing the 2025 Notes.

In March 2021, the Company issued an aggregate principal amount of $ 287.5 million of its 2028 Notes, pursuant to an indenture, in a private offering to qualified institutional buyers.

The 2028 Notes will mature on March 1, 2028, unless earlier redeemed or repurchased by the Company or converted.

In February 2024, certain of the 2028 Notes were extinguished in connection with the 2024 Note Exchange (see Note 6 — Non-convertible Notes, Net).

In connection with the 2024 Note Exchange and 2025 Note Exchanges, certain of the 2028 Notes were extinguished.

At issuance, the Company received net proceeds from the 2028 Notes offering of approximately $ 278.1 million, after deducting the initial purchasers’ discount and commission and offering expenses.

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The Company intends to use the remainder of the net proceeds for general corporate purposes.

The 2025 Notes accrue interest at a rate of 3.00 % per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020.

The initial conversion rate applicable to the 2025 Notes is 56.2635 shares of common stock per $1,000 principal amount of 2025 Notes (which is equivalent to an initial conversion price of approximately $ 17.77 per share of the Company’s common stock).

The 2025 Notes which accrued interest at a rate of 3.00 % per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020, matured on June 15, 2025.

At maturity, the Company repaid the outstanding principal and accrued interest in full.

The 2028 Notes accrue interest at a rate of 1.00 % per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021.

The initial conversion rate applicable to the 2028 Notes is 31.4465 shares of common stock per $1,000 principal amount of 2028 Notes (which is equivalent to an initial conversion price of approximately $ 31.80 per share of the Company’s common stock).

The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest.

In addition, upon the occurrence of a corporate event, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2025 Notes and 2028 Notes in connection with such corporate event.

The 2025 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after June 20, 2023, and the 2028 Notes will be redeemable, in whole or in part, at the Company's option at any time, and from time to time, on or after March 5, 2025, in each case if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the related redemption notice.

In addition, calling any Note for redemption will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.

Prior to March 15, 2025, in the case of the 2025 Notes, and December 1, 2027, in the case of the 2028 Notes, the applicable Convertible Senior Notes will be convertible only under the following circumstances:

• During any calendar quarter (and only during such calendar quarter), if, the last reported sale price per share of the Company’s common stock exceeds 130 % of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

• During the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of 2025 Notes and 2028 Notes for such trading day was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day;

The 2031 Notes accrue interest at a rate of 4.00 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2025;

The initial conversion rate applicable to the 2031 Notes is 95.5795 shares of common stock per $1,000 principal amount of 2031 Notes (which is equivalent to an initial conversion price of approximately $ 10.46 per share of the Company’s common stock).

The conversion rate for the Convertible Senior Notes is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest.

In addition, upon the occurrence of a corporate event, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert any of its Convertible Senior Notes in connection with such corporate event.

The 2028 Notes will be redeemable, in whole or in part, at the Company's option at any time, and from time to time, on or after March 5, 2025, in each case if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the related redemption notice.

The 2031 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after February 15, 2028, to, but excluding, February 15, 2030, if the last reported sale price per share of the Company’s common stock has been at least 120 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately before the date the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately

before the date the Company provides notice of redemption.

In addition, the 2031 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after February 15, 2030 (such redemption, a “2031 Notes Par Redemption”).

Calling any Convertible Senior Note for redemption, other than a 2031 Notes Par Redemption, will constitute a make-whole fundamental change (as defined in the applicable indenture governing each of the Convertible Senior Notes) with respect to that Convertible Senior Note, in which case the conversion rate applicable to the conversion of that Convertible Senior Note will be increased in certain circumstances if it is converted after it is called for redemption.

Prior to December 1, 2027, in the case of the 2028 Notes, and November 15, 2030, in the case of the 2031 Notes, the applicable Convertible Senior Notes will be convertible only under the following circumstances:

• During any calendar quarter (and only during such calendar quarter) (in the case of the 2031 Notes, commencing after the calendar quarter ending on June 30, 2025), if, the last reported sale price per share of the Company’s common stock exceeds 130 %, in the case of the 2028 Notes, or 125 % in the case of the 2031 Notes, of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

• During the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of Convertible Senior Notes for such trading day was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day;

• Upon the occurrence of specified corporate transactions;

• If the Company calls any 2025 Notes and 2028 Notes for redemption.

On and after March 15, 2025, in the case of the 2025 Notes, and December 1, 2027, in the case of the 2028 Notes, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2025 Notes and 2028 Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances.

Upon conversion, the 2025 Notes and 2028 Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock.

It is the Company’s current intent to settle conversions of the 2025 Notes and the 2028 Notes through combination settlement,

which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock.

The conditions allowing holders of either the 2025 Notes or the 2028 Notes to convert were not met as of December 31, 2024 .

The 2025 Notes and 2028 Notes are unsecured and unsubordinated obligations of the Company and will rank senior in right of payment to any of future indebtedness of the Company that is expressly subordinated in right of payment to the 2025 Notes and 2028 Notes;

• If the Company calls any Convertible Senior Notes for redemption.

On and after December 1, 2027, in the case of the 2028 Notes, and November 15, 2030, in the case of the 2031 Notes, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their Convertible Senior Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances.

Upon conversion, the Convertible Senior Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock.

As of December 31, 2025 , the conditions allowing holders to convert the 2031 Notes were met;

however, the conditions for the 2028 Notes were not met.

The Convertible Senior Notes are unsecured and unsubordinated obligations of the Company and will rank senior in right of payment to any of future indebtedness of the Company that is expressly subordinated in right of payment to the Convertible Senior Notes;

rank equal in right of payment to any existing and future unsecured indebtedness of the Company that is not so subordinated;

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and be structurally subordinated to all existing and future indebtedness and other liabilities and obligations incurred by future subsidiaries of the Company.

If bankruptcy, insolvency, or reorganization occurs with respect to the Company (and not solely with respect to a significant subsidiary of the Company), then the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes and 2028 Notes then outstanding will immediately become due and payable without any further action or notice by any person.

If an event of default (other than bankruptcy, insolvency, or reorganization with respect to the Company and not solely with respect to a significant subsidiary of the Company) occurs and is continuing, then, with the exception of certain reporting events of default, the trustee, by notice to the Company, or noteholders of at least 25 % of the aggregate principal amount of 2025 Notes or 2028 Notes, as applicable, then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes or 2028 Notes, as applicable, the outstanding to become due and payable immediately.

The carrying amount of the 2025 Notes is $ 26.7 million as of December 31, 2024, with principal of $ 26.7 million, net of unamortized issuance costs of $ 0.1 million.

The 2025 Notes were classified as short-term liabilities as of December 31, 2024.

The issuance costs related to the 2025 Notes are being amortized to interest expense over the expected life of the 2025 Notes or approximately its five-year term at an effective interest rate of 3.74 %.

If bankruptcy, insolvency, or reorganization occurs with respect to the Company (and not solely with respect to a significant subsidiary of the Company), then the principal amount of, and all accrued and unpaid interest on, the entire amount of the applicable series of the Convertible Senior Notes then outstanding will immediately become due and payable without any further action or notice by any person.

If an event of default (other than bankruptcy, insolvency, or reorganization with respect to the Company and not solely with respect to a significant subsidiary of the Company) occurs and is continuing, then, with the exception of certain reporting events of default, the trustee, by notice to the Company, or noteholders of at least 25 % of the aggregate principal amount of the applicable series of the Convertible Senior Notes, then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2028 Notes or 2031 Notes, as applicable, then outstanding to become due and payable immediately.

The carrying amount of the 2028 Notes is $ 47.7 million as of December 31, 2025, with principal of $ 48.2 million, net of unamortized issuance costs of $ 0.5 million.

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The issuance costs related to the 2028 Notes are being amortized to interest expense over the expected life of the 2028 Notes or approximately its seven-year term at an effective interest rate of 1.45 %.

The carrying amount of the 2031 Notes is $ 183.1 million as of December 31, 2025, with a principal of $ 190.1 million, net of the $ 5.8 million unamortized issuance costs and debt discount, net of $ 1.2 million.

The 2031 Notes were classified as long-term liabilities as of December 31, 2025.

The following table sets forth the amounts recorded in interest expense related to the 2025 Notes as of the dates indicated (in thousands):

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$ 1,284 $ 4,129 $ 4,180

A schedule of the Company's future maturities for the 2025 and 2028 Notes, is as follows (in thousands):

The following table sets forth the amounts recorded in interest expense related to the 2031 Notes as of the dates indicated (in thousands):

Year Ended December 31,

2025 2024 2023

Contractual interest expense $ 5,831 $ — $ —

Amortization of debt issuance costs 1,095 — —

Total interest and amortization expense

$ 6,926 $ — $ —

A schedule of the Company's future maturities for the Convertible Senior Notes, is as follows (in thousands):

Fiscal Year 2028 Notes

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Capped Call Transactions with Respect to the 2025 Notes and 2028 Notes

In connection with the issuance of the 2025 Notes and 2028 Notes, including the initial purchasers’ exercise of the option to purchase additional Notes, the Company entered into capped call transactions with respect to its common stock with certain financial institutions (collectively, the “Counterparties”).

The Company paid an aggregate amount of approximately $ 22.5 million to the Counterparties in connection with the 2025 capped call transactions (the “2025 Capped Calls”) and $ 33.7 million to the Counterparties in connection with the 2028 capped call transactions and (the “2028 Capped Calls” and, together with the 2025 Capped Calls, the “Capped Calls”).

In connection with the issuance of the 2025 Notes and 2028 Notes, including the initial purchasers’ exercise of the option to purchase additional 2025 Notes and 2028 Notes, the Company entered into capped call transactions with respect to its common stock with certain financial institutions (collectively, the “Counterparties”).

The Company paid an aggregate amount of approximately $ 22.5 million to the Counterparties in connection with the 2025 Notes capped call transactions (the “2025 Capped Calls”) and $ 33.7 million to the Counterparties in connection with the 2028 Notes capped call transactions and (the “2028 Capped Calls” and, together with the 2025 Capped Calls, the “Capped Calls”).

The 2025 Capped Calls and 2028 Capped Calls initially covered approximately 9,705,454 shares and 9,040,869 shares of the Company’s common stock at a strike price that corresponds to the initial conversion price of the 2025 Notes and the 2028 Notes, respectively.

The 2025 Capped Calls and the 2028 Capped Calls are subject to anti-dilution adjustments that are intended to be substantially identical to those in the 2025 Notes and the 2028 Notes, as applicable, and are exercisable upon conversion of the 2025 Notes or the 2028 Notes, as applicable.

The Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offer and announcement events.

The Capped Calls are subject to adjustment upon the

occurrence of specified extraordinary events affecting the Company, including merger events, tender offer and announcement events.

In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions.

The 2025 Capped Calls settle in components commencing on April 16, 2025 with the last component scheduled to expire on June 12, 2025.

The 2025 Capped Calls settle in components, which settlement commenced on April 16, 2025 with the last component having expired on June 12, 2025.

The initial 2025 Capped Calls entered into in connection with the issuance of the 2025 Notes expired upon the maturity of the 2025 Notes on June 15, 2025.

The 2028 Capped Calls settle in components commencing on December 31, 2027 with the last component scheduled to expire on February 28, 2028.

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The cap price of the 2028 Capped Call is initially $ 48.00 per share, which represents a premium of 100.0 % over the closing price of the Company’s common stock of $ 24.00 per share on March 3, 2021, and is subject to certain adjustments under the terms of the capped call transactions.

The Company expects to receive from the Counterparties a number of shares of the Company’s common stock or, at the Company’s election (subject to certain conditions), cash, with an aggregate market value (or, in the case of cash settlement, in an amount) approximately equal to the product of such excess times the number of shares of the Company’s common stock relating to the 2025 Capped Calls and 2028 Capped Calls being exercised.

These Capped Call instruments meet the conditions outlined in ASC 815-40 to be classified in stockholders’ equity, are not accounted for as derivatives, and are not subsequently remeasured as long as the conditions for equity classification continue to be met.

The Company recorded a reduction to additional paid-in capital of approximately $ 22.5 million and $ 33.7 million related to the premium payments for the 2025 Capped Call and 2028 Capped Call transactions.

In connection with the 2024 Note Exchange, the Company received $ 0.4 million in cash in connection with settling certain Capped Calls.

After giving effect to such settlements, the 2025 Capped Calls and 2028 Capped Calls outstanding cover approximately 1,504,992 and 8,837,095 shares of the Company's common stock, respectively.

The Company initially recorded a reduction to additional paid-in capital of approximately $ 22.5 million and $ 33.7 million related to the premium payments for the 2025 Capped Call and 2028 Capped Call transactions, respectively.

The Company received $ 0.4 million, $ 1.5 million and $ 0.4 million in cash in connection with settling certain Capped Calls in connection with the 2024 Note Exchange, February 2025 Note Exchange and August 2025 Note Exchange, respectively.

After giving effect to such settlements, the 2028 Capped Calls outstanding cover approximately 1,515,752 shares of the Company's common stock.

As the Capped Calls were equity classified, the proceeds from settlement of these Capped Calls were recorded to additional paid in capital.

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7,894,737 7,894,737

30,365,350 32,743,585

Share-based Compensation Plans

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These available shares increase annually by an amount equal to the lesser of 8,000,000 shares, 5 % of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or the number of shares determined by the Company’s board of directors.

The Company’s board of directors approved an increase of shares available for grant under the 2019 Plan by 4,465,083 shares on May 5, 2021, by 4,648,003 shares on February 23, 2022, by 4,954,409 shares on February 13, 2023, and by 5,233,525 shares on February 20, 2024.

Activity under the Company’s stock option plan is set forth below:

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Options vested and exercisable— December 31, 2025 634,564 9.71 2.9 4,489

There were no stock options granted in 2024 and in 2023.

The aggregate intrinsic value of options exercised for the years ended December 31, 2024, 2023 and 2022 was $ 0.3 million, zero and $ 5.3 million, respectively.

There were no stock options granted in 2025, 2024 and 2023.

The aggregate intrinsic value of options exercised for the years ended December 31, 2025, 2024 and 2023 was $ 1.6 million, $ 0.3 million and zero , respectively.

The aggregate intrinsic value of options exercised is the difference between the fair value of the underlying common stock on the date of exercise and the exercise price for in-the-money stock options.

In February 2022, the Company granted PSUs with financial performance targets to certain employees of the Company.

The number of shares of the Company's common stock issued upon settlement will depend on the achievement of financial metrics relative to the approved performance targets, and can range from 0 % to 150 % of the target amount.

The PSUs are subject to continuous service with the Company and will vest after approximately three years .

The PSUs are measured using the fair value at the date of grant.

The compensation expense associated with PSUs is recognized based on the estimated number of shares that the Company expects will vest and may be adjusted based on interim estimates of performance against the performance condition.

During the year ended December 31, 2024, the Company has not recognized stock-based compensation expense as attainment of financial performance targets is not considered probable.

In March 2023, the Company granted PSUs under the 2019 Plan subject to the achievement of both market and service conditions to certain employees of the Company .

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The compensation expense will be recognized regardless of whether the market condition is ever satisfied, provided the requisite service period is satisfied.

In March and October 2024, the Company granted PSUs with financial performance targets to certain employees of the Company.

The Company granted PSUs with financial performance targets to certain employees of the Company in 2024 and 2025.

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Inducement Grants

The Company granted stock-based awards outside of the 2019 Plan to the certain executives.

The Company granted stock-based awards outside of the 2019 Plan to certain executives.

These awards were granted as inducements material to their commencement of employment and entry into offer letters with the Company, in accordance with Nasdaq Listing Rule 5635(c)(4).

The inducement pool consisted of a total of 5,625,000 shares of the Company's common stock, which includes (a) 2,050,000 shares of PSUs that are eligible to vest based on market and service conditions in four tranches over a five-year performance period and (b) 3,575,000 shares of RSUs generally subject to the same terms and conditions as grants that are made under the 2019 Plan.

The unvested PSUs and RSUs held by the Company's former Chief Executive Officer John Koryl were forfeited upon his separation from the Company on October 28, 2024.

The inducement pool consisted of a total of 5,625,000 shares of the Company's common stock, which included (a) 2,050,000 shares of PSUs that are eligible to vest based on market and service conditions in four tranches over a five-year performance period and (b) 3,575,000 shares of RSUs generally subject to the same terms and conditions as grants that are made under the 2019 Plan.

The activity in the inducement pool is included in the summary of RSU activity table below.

14 unchanged sentences

In connection with the Company’s initial public offering, the Company adopted the Employee Stock Purchase Plan (the “ESPP”).

The Employee Stock Purchase Plan permits employees to purchase shares of common stock during six-month offering periods at a purchase price equal to the lesser of (1) 85 % of the fair market value of a share of common stock on the first business day of such offering period and (2) 85 % of the fair market value of a share of common stock on

the last business day of such offering period.

The initial number of shares of common stock that could be issued under the employee stock purchase plan was 1,750,000 shares.

These available shares increase by an amount equal to the lesser of 1,750,000 shares, 1 % of the number of shares of common stock outstanding on the immediately preceding December 31, or the number of shares determined by the Company’s board of directors.

The Company's board of directors approved an increase in the shares available for grant under the ESPP by 893,016 shares on May 5, 2021, by 929,601 shares on February 23, 2022, by 990,882 shares on February 13, 2023, and by 1,046,705 shares on February 20, 2024.

During the years ended December 31, 2025, 2024 and 2023, employees purchased 428,975 , 566,354 , and 865,676 shares, respectively, at an average price of $ 3.85 , $ 2.49 and $ 1.02 , respectively.

25 unchanged sentences

$ 28,943 $ 29,082 $ 34,273

During the year ended December 31, 2022, the Company recognized compensation expense of $ 1.0 million within selling, general and administrative associated with the modification of certain outstanding equity awards pursuant to the terms of the transition and separation agreement the Company entered into with its founder, Julie Wainwright, in connection with her resignation as Chief Executive Officer on June 6, 2022.

During the years ended December 31, 2025, 2024 and 2023, the Company capitalized $ 0.3 million, $ 0.5 million, and $ 0.8 million of stock-based compensation expense to proprietary software, respectively.

1 unchanged sentence

The Company recorded operating lease costs of $ 21.5 million, $ 20.9 million and $ 22.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company incurred $ 5.5 million, $ 5.2 million and $ 5.6 million of variable lease costs for the years ended December 31, 2024, 2023 and 2022, respectively, which is comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance.

The Company incurred $ 5.5 million of variable lease costs for the years ended December 31, 2025, 2024 and $ 5.2 million for the year ended December 31, 2023, which is comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance.

Due to the office and store closures in the year ended December 31, 2023, the Company reviewed its right-of-use assets for impairment.

1 unchanged sentence

As a result, the Company recorded $ 31.1 million related to the impairment of certain office and store right-of-use assets during the year ended December 31, 2023.

No impairment charges were recorded during the year ended December 31, 2024.

No impairment charges were recorded during the years ended December 31, 2025 and December 31, 2024.

The impairment charges are included in restructuring in the statements of operations.

1 unchanged sentence

The Company treated the lease termination amendments as lease modifications for accounting purposes as of the applicable effective dates of such terminations which resulted in a decrease of $ 7.7 million to the related lease liabilities, and a decrease of $ 1.4 million to the related right-of-use assets for the year ended December 31, 2023.

The Company recorded a net gain on the lease terminations of $ 0.7 million during the year ended December 31, 2023.

recorded a net gain on the lease terminations of $ 0.7 million during the year ended December 31, 2023.

The net gain on lease terminations is included in restructuring in the statements of operations.

Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):

As of December 31, 2025, maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):

Fiscal Year Amount

4 unchanged sentences

Present value of operating lease liabilities $ 91,438

(1) Total future minimum payments excludes $ 2.1 million of future payments required under a signed lease agreement that has not yet commenced.

Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands):

13 unchanged sentences

For the year ended December 31, 2023, the Company recognized $ 43.5 million in restructuring which consisted of right-of-use asset impairment charge of $ 31.1 million, leasehold improvements impairment charge of $ 8.6 million, employee severance of $ 3.0 million, and other related charges of $ 1.5 million, partially offset by a $ 0.7 million gain on lease terminations.

The Company recorded an immaterial amount of restructuring for the year ended December 31, 2024.

The Company recorded an immaterial amount of restructuring for the year ended December 31, 2024 and no restructuring expense was recorded for the year ended December 31, 2025.

The restructuring related charges were recorded on a separate line item in the Company's statements of operations.

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The Company maintains property, cargo, general liability and business interruption insurance coverage.

As of December 31, 2024, discussions with the insurance company are still ongoing.

Based on the provisions of the Company’s insurance policies, the Company recorded insurance recoveries for fire related costs for which recovery was deemed probable.

T he Company recorded losses related to the fire, net of insurance recoveries, of $ 0.7 million for the year ended December 31, 2024 within Operations and Technology on the statements of operations.

During the year ended December 31, 2025, the Company received all remaining insurance recoveries related to the 2024 warehouse fire.

T he Company recorded a net gain related to the fire of $ 0.1 million for the year ended December 31, 2025.

T he Company recorded a loss related to the fire, net of insurance recoveries, of $ 0.7 million for the year ended December 31, 2024 within Operations and Technology on the statements of operations.

As of December 31, 2025, the Company has no outstanding insurance receivables.

As of December 31, 2024, the Company recorded $ 2.5 million of insurance receivables within prepaid and other current assets on the balance sheet.

The Company has received $ 3.9 million in payments from insurers towards its claims to cover immediate impacts of the fire.

$ 3.4 million of the payments are included within net cash flows from operating activities and $ 0.5 million of the payments are included within net cash flows from investing activities in the statements of cash flows due to the nature of the advance insurance payments.

The Company has received $ 3.7 million and $ 3.9 million in payments from insurers towards its claims to cover impacts of the fire during the years ended December 31, 2025 and December 31, 2024, respectively.

For the year ended December 31, 2025 and December 31, 2024, $ 1.4 million and $ 3.4 million of the payments were included within net cash flows from operating activities, respectively, and $ 2.3 million and $ 0.5 million of the payments are included within net cash flows from investing activities in the statements of cash flows, respectively, due to the nature of the insurance payments.

Noncancelable Purchase Commitments

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However, on July 19, 2023, the Court ordered a stay of the case at the parties’ request to enable the parties to attempt mediation again.

The parties have continued to engage in settlement discussions facilitated by a mediator.

The final outcome of this litigation, including our liability, if any, with respect to Chanel’s claims, is uncertain.

The parties engaged in settlement discussions moderated by the mediator over the course of two years but were unable to reach a settlement or any reasonable range.

On October 6, 2025, the stay was lifted, and the parties appeared for a conference before the magistrate judge to discuss a schedule for the remainder of the litigation on October 14, 2025.

With the parties’ consent, the magistrate judge will hold a settlement conference to facilitate further discussions between the parties on March 5, 2026.

The final outcome of this litigation, including our liability, if any, with respect to

Chanel’s claims, is uncertain.

An unfavorable outcome in this or similar litigation could adversely affect the Company’s business and could lead to other similar lawsuits.

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The claims are for alleged violations of Sections 11 and 15 of the Securities Act.

On February 23, 2024, plaintiff filed a motion for class certification, which has been set for hearing on February 25, 2025.

On February 23, 2024, plaintiff filed a motion for class certification.

On July 22, 2025, the court entered an order denying the motion for class certification.

On September 19, 2025, plaintiff filed a notice of appeal of the class certification decision, which appeal remains pending.

While the Company intends to defend vigorously against this litigation, there can be no assurance that the Company will be successful in its defense.

3 unchanged sentences

The Company has not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in its financial statements.

The components of the Company’s income tax provision consisted of (in thousands):

Domestic and international pre-tax loss consists of the following (in thousands):

Year Ended December 31,

2025 2024 2023

United States

$ ( 41,436 ) $ ( 133,926 ) $ ( 168,189 )

International

Loss before income taxes

$ ( 41,436 ) $ ( 133,926 ) $ ( 168,189 )

The components of the Company’s income tax provision were as follows (in thousands):

Year Ended December 31,

2025 2024 2023

Total current tax expense 363 276 283

1 unchanged sentence

Total provision for income taxes $ 363 $ 276 $ 283

The reconciliation of the Federal statutory income tax provision for the Company’s effective income tax provision (in thousands):

Rate Reconciliation

The Company adopted ASU 2023-09 'Income Taxes (Topic 740):

Improvements to Income Tax Disclosures' on a prospective basis beginning with the year December 31, 2025.

The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the Company's U.S.

Federal statutory income tax amount and rate to its actual effective amount and rate for the year ended December 31, 2025:

Year Ended December 31, 2025

2024 2023 2022

(in thousands)

Tax at federal statutory rate

2 unchanged sentences

363 ( 0.9 ) %

Research and development credits

( 410 ) 1.0 %

Valuation allowance

2,664 ( 6.3 ) %

Nondeductible Items

Section 162(m) compensation limitation

3,609 ( 8.6 ) %

Warrant liability fair value adjustment

7,512 ( 17.9 ) %

Other contributing items

1,444 ( 3.5 ) %

Other adjustments

( 106 ) 0.3 %

Stock-based compensation

Non-deductible items

( 5,879 ) 14.0 %

Effective tax rate

$ 363 ( 0.9 ) %

(1) State taxes in Texas make up the majority (greater than 50%) of the tax effect in this category.

The following table presents the required disclosures prior to the Company's adoption of ASU 2023-09 and reconciles the U.S.

federal statutory income tax rate to the actual global effective income tax rate for the years ended December 31, 2024 and December 31, 2023 (in thousands):

Year Ended December 31,

Tax at federal statutory rate $ ( 28,144 ) $ ( 35,290 )

State taxes, net of federal effect ( 7,627 ) ( 9,554 )

Stock-based compensation 3,192 8,956

Non-deductible items 1,988 504

Tax credits ( 169 ) ( 531 )

Warrant liability fair value adjustment 18,333 —

Adoption of ASU 2020-06 — — ( 28,045 )

Provision to return adjustments ( 1,927 ) 9,259

( 1,927 ) 9,259 —

Valuation allowance 14,651 26,501

14,651 26,501 80,254

Other ( 21 ) 438

Provision for income taxes $ 276 $ 283

The Company’s deferred tax assets and liabilities (in thousands):

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes.

The Company’s significant components of deferred tax assets and liabilities are as follows (in thousands):

Deferred tax assets:

2 unchanged sentences

Fixed assets and intangibles

13,695 10,461

Capitalized research and development

6 unchanged sentences

Capped calls 14,241 15,011

Convertible debt — 2,329

Tax credits 3,248 2,738

9 unchanged sentences

Net deferred tax assets $ — $ —

(1) Under the Tax Cuts and Jobs Act of 2017, research and development costs are no longer fully deductible when incurred and are required to be capitalized and amortized for U.S.

tax purposes effective January 1, 2022.

The mandatory capitalization requirement increases our gross deferred tax assets, which are fully offset by the valuation allowance.

In assessing the realizability of deferred tax assets, the Company evaluates all available positive and negative evidence by considering whether it is more likely than not that some portion or all of the deferred tax assets will not be recognized.

7 unchanged sentences

If not utilized, these losses will expire beginning in 2026 for state tax purposes.

However, beginning in tax year 2018 and forward, the Federal law has changed such that net operating losses generated after December 31, 2017 may be carried forward indefinitely.

However, beginning in tax year 2018 and forward, the Federal law has changed such that net operating losses generated after December 31, 2017 may

be carried forward indefinitely.

Accordingly, $ 159.4 million of the federal net operating losses will begin to expire in 2033.

However, $ 710.4 million of the federal net operating losses will not expire.

As of December 31, 2024 and 2023, the Company has a credit carryforward of $ 4.7 million and $ 4.3 million for federal tax purposes, respectively, and $ 1.0 million for state tax purposes.

As of December 31, 2025 and 2024, the Company has a credit carryforward of $ 6.0 million and $ 4.7 million for federal tax purposes, respectively, and $ 0.9 million and $ 1.0 million for state tax purposes, respectively.

If not utilized, these credits will expire beginning in 2041 for federal tax purposes and do not expire for state tax purposes.

The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an “ownership change” of a corporation.

Accordingly, a company’s ability to use net operating losses may be limited as prescribed under Internal Revenue Code Section 382 (“IRC Section 382”).

Events which may cause limitations in the amount of the net operating losses that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period.

Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions.

The Tax Reform Act of 1986 limits the use of net operating losses and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company.

During 2019, the Company analyzed whether any of the reported net operating losses would be limited because of these rules.

During 2019 and 2025, the Company analyzed whether any of the reported net operating losses would be limited because of these rules.

Based on the analysis the Company believes $ 3.3 million of the Federal and $ 2.1 million of California net operating losses will not be available to offset future taxable income because of the limitation.

2 unchanged sentences

In the normal course of business, the Company is subject to examination by federal, state and local, jurisdictions, where applicable.

December 31, 2024 and 2023, all years generally remain open to examination.

As of December 31, 2025 and 2024, all years generally remain open to examination.

Additionally, net operating loss carryforwards are subject to examination by the Internal Revenue Service and the California Franchise Tax Board for up to three and four years, respectively, after utilization.

11 unchanged sentences

The Company estimates that there will be no material changes in its uncertain tax positions in the next 12 months.

The Company adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025 and has included the following table as a result of its adoption, which presents income taxes paid (net of refunds received) for the year ended December 31, 2025 (in thousands):

Year Ended December 31, 2025

State and Local

All other states

Income tax, net of amounts refunded

The amount of cash income taxes paid by the Company during the years ended December 31, 2024 and December 31, 2023 was $ 0.2 million.

On July 4, 2025, the U.S.

government enacted The One Big Beautiful Bill Act of 2025 ("OBBBA") which includes, among other provisions, changes to the U.S.

corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act.

Certain provisions are effective for the Company beginning in 2025.

The Company determined that the OBBBA did not have a material impact on the financial statements for the year ended December 31, 2025.

Net Loss Per Share Attributable to Common Stockholders

2 unchanged sentences

2025 2024 2023

Net loss attributable to common stockholders

Net loss attributable to common stockholders, basic

$ ( 41,799 ) $ ( 134,202 ) $ ( 168,472 )

Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted

Effect of gain on debt extinguishment ( 40,785 ) — —

Effect of coupon interest and amortization expense related to the 2025 Exchanged Notes 740 — —

Net loss attributable to common stockholders, diluted $ ( 81,844 ) $ ( 134,202 ) $ ( 168,472 )

Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic

114,871,414 107,878,366 101,806,000

Net loss per share attributable to common stockholders, basic and diluted

Effect of dilutive 2025 Exchanged Notes

1,640,851 — —

Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, diluted 116,512,265 107,878,366 101,806,000

Net loss per share attributable to common stockholders:

$ ( 0.36 ) $ ( 1.24 ) $ ( 1.65 )

$ ( 0.70 ) $ ( 1.24 ) $ ( 1.65 )

The following securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive (on an as-converted basis):

3 unchanged sentences

Estimated shares issuable under the Employee Stock Purchase Plan 68,879 248,523 367,074

Assumed conversion of the 2025 Notes and 2028 Notes

Assumed conversion of anti-dilutive Convertible Senior Notes

19,687,744 10,342,056 18,746,323

2 unchanged sentences

38,089,354 33,708,248 32,928,249

The 2025 Notes and 2028 Notes issued in June 2020 and in March 2021, respectively, are convertible, based on the applicable conversion rate, into cash, shares of the Company’s common stock or a combination thereof, at the Company’s election.

The impact of the assumed conversion to diluted net loss per share is computed on an as-converted basis.

Retirement Plan

4 unchanged sentences

Segment Information

The Company has one reportable segment as its chief operating decision maker (the "CODM"), who is its Chief Executive Officer, reviews financial information on a consolidated basis.

The Company has one reportable segment as its CODM reviews financial information on a consolidated basis.

The Company generates revenue from the sale of pre-owned luxury goods through its online marketplace and retail stores.

1 unchanged sentence

The Company does not have intra-entity sales or transfers.

The chief operating decision maker assesses performance and allocates resources based on net loss, as reported on the statements of operations.

The CODM assesses performance and allocates resources based on net loss, as reported on the statements of operations.

Net loss is used to monitor budget versus actual results.

18 unchanged sentences

13,961 12,811 16,740

Restructuring (3)

Restructuring and one time expenses (3)

1,711 196 43,462

6 unchanged sentences

Provision for income taxes

( 363 ) ( 276 ) ( 283 )

Net loss attributable to common stockholders $ ( 41,799 ) $ ( 134,202 ) $ ( 168,472 )

1 unchanged sentence

(2) Administration and other segment expenses include insurance, supplies, and taxes.

(3) Restructuring expenses for the year ended December 31, 2024 and 2022 consist of employee severance charges.

For the year ended December 31, 2023 it consists of impairment of right-of-use assets and property and equipment, employee severance charges, gain on lease terminations, and other charges.

Subsequent Events

On February 10, 2025, the Company entered into an exchange agreement with certain holders of its 2028 Notes to exchange $ 183.3 million in aggregate principal amount of the 2028 Notes for $ 146.7 million in aggregate principal amount of new convertible senior notes due 2031 (“2031 Notes”), issued pursuant to an Indenture, dated February 10, 2025.

The exchange was consummated, and the 2031 Notes were issued in a private placement, on February 10, 2025.

The 2031 Notes bear cash interest at a rate of 4.00 % per annum payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2025 (with additional interest being paid solely on the first interest payment date of the 2031 Notes in consideration for the accrued and unpaid interest on the 2028 Notes exchanged for the 2031 Notes) and will mature on February 15, 2031.

The 2031 Notes are convertible into shares of the Company’s common stock on the terms and subject to the conditions set forth in the Indenture.

The Company is currently evaluating the impact of this transaction on its financial statements.

(3) Restructuring and one time expenses for the year ended December 31, 2025 and 2024 consist of employee severance charges.

For the year ended December 31, 2023 restructuring and one time expenses consists of impairment of right-of-use assets and property and equipment, employee severance charges, gain on lease terminations, and other charges.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures