ThredUp Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) as of December 31, 2023. The term “disclosure controls and procedures,” as defined under the Exchange Act, means controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023. Remediation of Previously Disclosed Material Weakness in Internal Control Over Financial Reporting In connection with the audit of our consolidated financial statements for the fiscal year ended December 31, 2022, and as previously described in our Annual Report on Form 10-K for the year ended December 31, 2022 in connection with the audits of our consolidated financial statements in certain prior years, we identified certain control deficiencies in the design and implementation of our internal control over financial reporting that, in the aggregate, constituted a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis. Our material weakness related to the following control deficiency: • We did not design and maintain adequate controls over the preparation and review of certain account reconciliations and journal entries. Specifically, we did not design and maintain controls and we did not maintain a sufficient complement of accounting personnel to ensure account reconciliations were prepared and reviewed at the appropriate level of precision on a consistent and timely basis. To address our material weakness, we have performed the following actions: • Designed and implemented new and revised manual business process controls and general information technology controls; • Implemented additional financial and business process applications; and • Hired key accounting personnel. Once the above remediation actions were completed, we evaluated the design and implementation and tested the operating effectiveness of relevant business process and general information technology controls. As a result of these remediation efforts, management has concluded that, as of December 31, 2023, the aforementioned material weakness has been remediated. Changes in Internal Control over Financial Reporting Except as noted in the preceding section related to the remediation of our material weakness, there were no other changes in our internal control over financial reporting that occurred during our most recent fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 83 Table of Contents Inherent Limitations on Effectiveness of Controls Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designated and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Management’s Annual Report on Internal Control over Financial Reporting Management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. GAAP. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm on internal control over financial reporting due to an exemption for emerging growth companies pursuant to Section 404 of the Sarbanes-Oxley Act. Item 9B. Other Information Trading Plans Our directors and officers (as defined in Exchange Act Rule 16a-1(f)) may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the three months ended December 31, 2023, no such plans or other arrangements were adopted or terminated . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 84 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2023. Our board of directors has adopted a code of conduct that applies to all of our employees, officers and directors. The full text of our code of conduct is available on our investor relations website at ir.thredup.com under the “Corporate Governance” section. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendments to, or waiver from, a provision of our code of conduct by posting such information on the website address and location specified above. Item 11. Executive Compensation The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2023. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2023. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2023. Item 14. Principal Accountant Fees and Services The information required under this Item is incorporated herein by reference to our definitive proxy statement to be filed with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2023. 85 Table of Contents PART IV Item 15. Exhibit and Financial Statement Schedules (a) The following documents are filed as part of this Annual Report on Form 10-K, or incorporated herein by reference: 1. Financial Statements. The financial statements included in Part II, Item 8, Financial Statements and Supplementary Data , of this document are filed as part of this Annual Report on Form 10‑K. 2. Financial Statement Schedules. Schedules are omitted because the required information is inapplicable, not material, or the information is presented in the consolidated financial statements or related notes. 3. Exhibits. The exhibits listed in the Exhibit Index immediately below are filed as part of this Annual Report on Form 10-K, or are incorporated by reference herein. (b) Exhibit Index: Incorporated by Reference Exhibit Number Exhibit Description Form File No. Exhibit Filing Date 3.1 Amended and Restated Certificate of Incorporation of the Registrant. S-1 333-253834 3.2 3/3/2021 3.2 Amended and Restated Bylaws of the Registrant, as adopted on February 16, 2023 . 8-K 001-40249 3.1 2/21/2023 4.1 Form of Class A common stock certificate of the Registrant. S-1 333-253834 4.1 3/3/2021 4.2 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. 10-K 001-40249 4.2 3/22/2022 4.3 Tenth Amended and Restated Investors’ Rights Agreement, dated February 16, 2021, by and among the Registrant and certain of its stockholders. S-1 333-253834 4.2 3/3/2021 10.1 Form of Indemnification Agreement between the Registrant and each of its directors and executive officers. S-1 333-253834 10.1 3/3/2021 10.2 # Second Amended and Restated 2010 Stock Incentive Plan, as amended, and forms of agreements thereunder. S-1 333-253834 10.2 3/3/2021 10.3 # 2021 Stock Option and Incentive Plan and forms of agreements thereunder. S-1/A 333-253834 10.3 3/17/2021 10.4 # 2021 Employee Stock Purchase Plan. S-1/A 333-253834 10.4 3/17/2021 10.5 # Senior Executive Cash Incentive Bonus Plan. S-1 333-253834 10.5 3/3/2021 10.6 # Executive Severance Plan. S-1 333-253834 10.6 3/3/2021 10.7 # Non-Employee Director Compensation Policy. S-1 333-253834 10.7 3/3/2021 10.8 # Terms and Conditions of the Registrant’s Fiscal Year 2021 Incentive Compensation Targets. S-1 333-253834 10.8 3/3/2021 10.9 # Offer Letter between the Registrant and Anthony Marino, dated August 5, 2013. S-1 333-253834 10.9 3/3/2021 10.10 # Offer Letter between the Registrant and Sean Sobers, dated September 30, 2019. S-1 333-253834 10.10 3/3/2021 10.11 # Offer Letter between the Registrant and Chris Homer, dated July 1, 2010. 10-K 001-40249 10.11 3/22/2022 10.12 # Board Member Agreement between the Registrant and Mandy Ginsberg, dated December 3, 2020. S-1 333-253834 10.11 3/3/2021 10.13 # Board Member Agreement between the Registrant and Marcie Vu, dated February 11, 2021. S-1 333-253834 10.12 3/3/2021 10.14 ^ Amended and Restated Loan and Security Agreement, dated February 3, 2021, by and between the Registrant and Western Alliance Bank. S-1/A 333-253834 10.14 3/17/2021 86 Table of Contents 10.15 First Amendment to Amended and Restated Loan and Security Agreement, dated as of May 14, 2021, by and among ThredUp Inc., ThredUp CF LLC, ThredUp Intermediary Holdings LLC, Knitwit GC LLC, and Western Alliance Bank. 8-K 001-40249 10.10 5/18/2021 10.16 Second Amendment to Amended and Restated Loan and Security Agreement, dated as of December 3, 2021, by and among ThredUp Inc., ThredUp CF LLC, ThredUp Intermediary Holdings LLC, Knitwit GC LLC, and Western Alliance Bank. 10-K 001-40249 10.16 3/22/2022 10.17 †^ Second Amended and Restated Loan and Security Agreement dated as of July 14, 2022, by and among ThredUp Inc., ThredUp Intermediary Holdings LLC, Knitwit GC LLC, the lenders from time to time party thereto, and Western Alliance Bank, as agent 8-K 001-40249 10.1 7/20/2022 10.18 First Amendment to Second Amended and Restated Loan and Security Agreement, dated as of December 14, 2023, by and among ThredUp Inc., ThredUp Intermediary Holdings LLC and Knitwit GC LLC, and Western Alliance Bank. Filed herewith 16.1 Letter Re Change in Certifying Accountant — KPMG LLP dated September 6, 2022 8-K 001-40249 16.1 9/6/2022 21.1 Subsidiaries of the Registrant Filed herewith 23.1 Consent of Independent Registered Public Accounting Firm – Deloitte & Touche LLP Filed herewith 24.1 Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K) Filed herewith 31.1 Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 31.2 Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 32.1 * Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Furnished herewith 32.2 * Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Furnished herewith 97.1 ThredUp Inc. Compensation Recovery Policy Filed herewith 101.INS XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document Filed herewith 101.SCH Inline XBRL Taxonomy Extension Schema Document Filed herewith 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed herewith 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed herewith 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith 104 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) Filed herewith # Indicates management contract or compensatory plan, contract or agreement. 87 Table of Contents * The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in such filing. † Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K under the Securities Act. The Company agrees to furnish supplementally any omitted schedules to the Securities and Exchange Commission upon request. ^ Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because they are both (i) not material and (ii) the type that the registrant treats as private or confidential. A copy of the omitted portions will be furnished to the Securities and Exchange Commission upon request. Item 16. Form 10-K Summary None. 88 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THREDUP INC. By: /s/ SEAN SOBERS Sean Sobers Chief Financial Officer (Principal Financial and Accounting Officer) Date: March 4, 2024 89 Table of Contents POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Sean Sobers and Alon Rotem, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ JAMES REINHART Chief Executive Officer March 4, 2024 James Reinhart (Principal Executive Officer and Director) /s/ SEAN SOBERS Chief Financial Officer March 4, 2024 Sean Sobers (Principal Financial and Accounting Officer) /s/ IAN FRIEDMAN Director March 4, 2024 Ian Friedman /s/ MANDY GINSBERG Director March 4, 2024 Mandy Ginsberg /s/ TIMOTHY HALEY Director March 4, 2024 Timothy Haley /s/ JACK LAZAR Director March 4, 2024 Jack Lazar /s/ PATRICIA NAKACHE Director March 4, 2024 Patricia Nakache /s/ DAN NOVA Director March 4, 2024 Dan Nova /s/ CORETHA RUSHING Director March 4, 2024 Coretha Rushing /s/ MARCIE VU Director March 4, 2024 Marcie Vu 90