Commerce.com, Inc.

Current report

Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business and financial results.

Current report

The current global trade environment is uncertain. Changes in trade policy, including trade restrictions, new or increased tariffs or quotas, embargoes, sanctions and countersanctions, safeguards or customs restrictions by the U.S. and/or other foreign governments may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions, declining consumer confidence, increased inflation or diminished expectations for the economy, and ultimately reduced demand for our and our customers’ products and services as a result of potential cost increases or reduced discretionary income of consumers. Such conditions could have a material adverse impact on our business, results of operations and cash flows. Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital. Such adverse changes could increase our costs of capital and limit our access to external financing sources to fund acquisitions, capital projects, or refinancing of debt maturities on similar terms, which could in turn reduce our cash flows and limit our ability to pursue growth opportunities.

Current report

In March 2025, the U.S. government implemented additional tariffs on goods from numerous countries, with potential for further increases in scope and amount depending on international responses. While these recent trade policy changes have not yet materially affected our business operations or financial performance, there is no assurance that we can fully mitigate the impact of future tariffs and associated economic consequences. These trade measures and any resulting retaliations could negatively affect our business and customers or may affect the demand for our platform and services, impact the competitive position of our customers' products or prevent our customers from selling products in certain countries.

Current report

None.

Current report

During the three months ended March 31, 2025, no director or officer of the Company adoptedor terminateda “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each such terms are defined in Item 408(a) of Regulation S-K.

Previous report

1A of our Annual Report on Form 10-K for the year ended December 31, 2023.

Previous report

Our failure to generate sufficient cash flow from our business to satisfy the interest rate of our 2028 Convertible Notes would adversely affect our business, financial condition and results of operations.

Previous report

The interest rate on the $150.0 million aggregate principal amount of the 2028 Convertible Notes outstanding as of

Previous report

September 30, 2024, is 7.50 percent, payable semi-annually. Our ability to pay interest and required principal payments on our indebtedness depends upon cash flows generated by our operating performance. As a result, prevailing economic conditions and financial, business and other factors, many of which are beyond our control, may affect our ability to make these payments and reduce the level of our indebtedness over time.

Previous report

If we do not generate sufficient cash flow from operations to satisfy our debt servicing obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets or seeking to raise additional capital.

Previous report

Further, our spending in relation to our debt restructuring combined with elevated interest rates could have significant adverse consequences, including: reducing cash resources available to fund working capital, capital expenditures, product development efforts and other general corporate purposes; impeding our ability to capitalize on strategic opportunities; reducing profitability; increasing our vulnerability to adverse changes in general economic, industry, and market conditions; limiting our flexibility in planning for, or reacting to, changes in our business and our industry; and placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.

Previous report

The terms of the indenture (the “2028 Convertible Notes Indenture”) that govern the 2028 Convertible Notes impose restrictions that may limit our current and future operating flexibility, particularly our ability to respond to changes in the economy or our industry or to take certain actions, which could harm our long-term interests.

Previous report

The 2028 Convertible Notes Indenture and the exchange agreement governing the exchange of 2026 Convertible Notes for 2028 Convertible Notes (to the extent the exchanging holder continues to hold a specified amount of 2028 Convertible Notes) contain a number of restrictive covenants that impose significant operating and financial restrictions on us and limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability and the ability of our subsidiaries (to the extent any such subsidiaries incur or guarantee indebtedness) to:

Previous report

incur additional indebtedness and guarantee indebtedness, including a limitation on incurring revolving credit facility indebtedness in excess of $25 million in aggregate amount (the “Senior Secured Revolving Indebtedness”) and the incurrence of any senior indebtedness; and

Previous report

limited in how we conduct our business;

Previous report

These restrictions may hinder our ability to grow in accordance with our strategies. In addition, while we are not permitted to incur any additional senior indebtedness (other than the Senior Secured Revolving Indebtedness), the incurrence of subordinated indebtedness will be subject to the requirement that the 2028 Convertible Notes be secured by all of our assets (subject to customary exceptions) concurrently with any incurrence of subordinated indebtedness.

Previous report

A breach of the covenants under the 2028 Convertible Notes Indenture or under the 2026 Convertible Notes Indenture could result in an event of default under the applicable indebtedness. Such a default, if not cured or waived, may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt that is subject to an applicable cross-acceleration or cross-default provision. Furthermore, if we were unable to repay the amounts due and payable under the 2028 Convertible Notes Indenture and the 2028 Convertible Notes are then secured, holders of the 2028 Convertible Notes could proceed against the collateral securing such indebtedness. If the holders of the 2028 Convertible Notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.

Previous report

We have undertaken, and may in the future undertake, restructuring activities that could result in disruptions to our business or otherwise materially harm our results of operations or financial condition.

Previous report

From time to time, we have implemented restructuring plans to support key strategic initiatives which include driving efficient revenue growth and delivering long-term profitability. For example, we initiated a restructuring plan in September 2023, intended to, among other things, advance the Company's ongoing commitment to profitable growth, which was materially complete at the end of fiscal 2023. This follows an earlier restructuring plan we initiated in December 2022 intended to reduce our cost structure through a reduction of Company workforce and office space, which was completed during the third quarter of fiscal year 2023. In September 2024, we implemented a new restructuring plan which will include workforce reductions, reduction in real estate footprint, and costs incurred associated with asset impairments. Our restructuring plans present potential risks that could have a material adverse effect on our operations, financial condition, results of operations, cash flow, or business reputation.

Previous report

Changes resulting from our strategic restructuring plans and any future initiatives may not be successful in yielding our intended results and may not appropriately address the short-term and long-term strategic objectives for our business. Implementation of the restructuring plans and any other cost-saving initiatives may be costly and disruptive to our business, the expected costs and charges may be greater than we have forecasted, and the estimated cost savings may be lower than we have anticipated. Additionally, certain aspects of the 2024 Restructuring Plan, such as severance costs in connection with reducing our headcount, could negatively impact our cash flows. In addition, our initiatives could result in personnel attrition beyond our planned reduction in headcount or reduced employee morale, which could in turn adversely impact productivity, including through a loss of continuity, loss of accumulated knowledge, inefficiency during transitional periods, or our ability to attract highly skilled employees. If any restructuring activities we have undertaken or undertake in the future fail to achieve some or all of the expected benefits, our business, financial condition, and results of operations could be materially and adversely affected.

Previous report

Losing key members of our management or operations teams could hinder our ability to attract and retain the necessary talent for continued operations and growth.

Previous report

Our success depends substantially upon the continued services of our executive officers and other key members of management, particularly our chief executive officer. From time to time, there may be changes in our management team resulting from the hiring, departure or realignment of executives. For example, in September 2024, Brent Bellm, our former CEO and Chairman of our Board of Directors, departed from these positions with the Company. Such changes may be disruptive to our business. Mr. Bellm was with the Company for nine years and during this time developed institutional knowledge and relationships. The departure of Mr. Bellm could lead to a loss of leadership continuity, key relationships, and in-depth understanding of our business, operations, and industry.

Previous report

Effective succession planning for management is important to our long-term success. While we have a succession plan in place, a new CEO, Travis Hess, even with significant experience, may not possess the same level of institutional knowledge and partner relationships, potentially impacting our decision-making, strategic direction, and overall business performance during the transition period.

Previous report

Item 2.05 Costs Associated with Exit or Disposal Activities

Previous report

The information set forth in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key factors affecting our performance—2024 Restructure” above is incorporated herein by reference.

Previous report

Item 2.06 Material Impairments.

Previous report

The information referred to in Item 2.05 is incorporated by reference into this Item 2.06.

Previous report

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Previous report

Effective as of November 4, 2024, the Compensation Committee of the Board of Directors approved certain retention payments for Daniel Lentz, the Company’s Chief Financial Officer, including (i) a cash retention bonus in an amount equal to $50,000 (the “Cash Bonus”) and (ii) a stock option to purchase 16,160 shares of the Company’s common stock with an exercise price per share equal to the fair market value of a share of Company common stock on November 11, 2024, the date of grant (the “Option”). 25% of the Cash Bonus is payable to Mr. Lentz on or as soon as practicable after each of December 31, 2024, and March 31, 2025, and 50% of the Cash Bonus is payable to Mr. Lentz on or as soon as practicable after September 30, 2025 (each a “Retention Date”), in each case, subject to Mr. Lentz’s continued employment with the Company through the applicable Retention Date. The Option will vest as to 25% of the Option shares on each of the first two Retention Dates and 50% on the third Retention Date, subject to Mr. Lentz’s continued employment with the Company through the applicable Retention Date.

Previous report

In connection with Brent Bellm ceasing to serve as the Company’s Chief Executive Officer as previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 2, 2024 (the “8-K”), the Company entered into a Separation Agreement and General Release (the “Separation Agreement”) with Mr. Bellm on November 6, 2024. The Separation Agreement contained the material terms described in the 8-K, with the addition of a 90-day extension of the post-termination exercise period of single stock option covering 900,000 shares of the Company’s common stock previously granted to Mr. Bellm.

Previous report

On September 6, 2024, Brent Bellm, the Company's former Chief Executive Officer, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the purchase of up to $50,000 of the Company’s common stock until January 27, 2025.