TheRealReal Inc

Previous wording

We have transformed the luxury consignment experience by removing the friction and pain points inherent in the traditional consignment model. For consignors, we offer concierge at-home consultation and pickup as well as virtual consultations via online face-to-face platforms. Consignors may also drop off items at our luxury consignment offices. Our Neighborhood and Flagship Stores provide an alternative location to drop off consigned items and an opportunity to interact with our authentication experts. Consignors may also utilize our complimentary shipping directly to our authentication centers. We leverage our proprietary transactional database and market insights from approximately 39.2 million item sales since our inception to deliver optimal pricing and rapid sell-through. For buyers, we offer highly coveted and exclusive authenticated pre-owned luxury goods at attractive values, as well as a high-quality experience befitting the products we offer. Our online marketplace is powered by our proprietary technology platform, including consumer facing applications and purpose-built software that supports our complex, single-SKU inventory management system.

Current wording

We have transformed the luxury consignment experience by removing the friction and pain points inherent in the traditional consignment model. For consignors, we offer concierge at-home consultation and pickup as well as virtual consultations via online face-to-face platforms. Consignors may also drop off items at our luxury consignment offices. Our Neighborhood and Flagship Stores provide an alternative location to drop off consigned items and an opportunity to interact with our authentication experts. Consignors may also utilize our complimentary shipping directly to our authentication centers. We leverage our proprietary transactional database and market insights from approximately 40.9 million item sales since our inception to deliver optimal pricing and rapid sell-through. For buyers, we offer highly coveted and exclusive authenticated pre-owned luxury goods at attractive values, as well as a high-quality experience befitting the products we offer. Our online marketplace is powered by our proprietary technology platform, including consumer facing applications and purpose-built software that supports our complex, single-SKU inventory management system.

Previous wording

•Consignment revenue. When we sell goods through our online marketplace or retail stores on behalf of our consignors, we retain a percentage of the proceeds, which we refer to as our take rate. Take rates vary depending on the total value of goods sold through our online marketplace on behalf of a particular consignor as well as the category and price point of the items. In the three months ended March 31, 2024 and 2023, our overall take rate on consigned goods was 38.4% and 37.4%, respectively. The increase in our take rate was due to the update of our consignor commission structure (effective November 1, 2022). Additionally, we earn revenue from our subscription program, First Look, in which we offer buyers early access to the items we sell in exchange for a monthly fee.

Current wording

•Consignment revenue. When we sell goods through our online marketplace or retail stores on behalf of our consignors, we retain a percentage of the proceeds, which we refer to as our take rate. Take rates vary depending on the total value of goods sold through our online marketplace on behalf of a particular consignor as well as the category and price point of the items. In the three months ended June 30, 2024 and 2023, our overall take rate on consigned goods was 38.5% and 36.7%, respectively. The increase in our take rate was due to the update of our consignor commission structure (effective November 1, 2022). Additionally, we earn revenue from our subscription program, First Look, in which we offer buyers early access to the items we sell in exchange for a monthly fee.

Previous wording

We generate revenue from orders processed through our website, mobile app and retail stores. Our omni-channel experience enables buyers to purchase anytime and anywhere. We have a global base of more than 36.2 million members as of March 31, 2024. We count as a member any user who has registered an email address on our website or downloaded our mobile app, thereby agreeing to our terms of service.

Current wording

We generate revenue from orders processed through our website, mobile app and retail stores. Our omni-channel experience enables buyers to purchase anytime and anywhere. We have a global base of more than 37.0 million members as of June 30, 2024. We count as a member any user who has registered an email address on our website or downloaded our mobile app, thereby agreeing to our terms of service.

Previous wording

Through March 31, 2024, we have cumulatively paid more than $4.2 billion in commissions to our consignors. In the three months ended March 31, 2024, our gross merchandise value ("GMV") increased by 2% to $451.9 million compared to $444.4 million in the three months ended March 31, 2023. Additionally, net merchandise value ("NMV") increased by 2% to $334.8 million from $327.8 million in the three months ended March 31, 2024 and 2023 due to GMV growth. Our total revenue increased by 1% to $143.8 million from $141.9 million in the three months ended March 31, 2024 and 2023, respectively. In the three months ended March 31, 2024 and 2023, our gross profit was $107.3 million and $90.0 million, respectively, representing an increase of 19%.

Current wording

Through June 30, 2024, we have cumulatively paid more than $4.4 billion in commissions to our consignors. Our gross merchandise value (“GMV”) increased by 4% to $440.9 million from $423.3 million in the three months ended June 30, 2024 and 2023, respectively. Our GMV increased by 3% to $892.9 million from $867.7 million in the six months ended June 30, 2024 and 2023, respectively. Additionally, our net merchandise value (“NMV”) increased by 8% to $329.4 million from $303.9 million in the three months ended June 30, 2024 and 2023, respectively, and by 5% to $664.2 million from $631.7 million in the six months ended June 30, 2024 and 2023, respectively. Our total revenue increased by 11% to $144.9 million from $130.9 million in the three months ended June 30, 2024 and 2023, respectively, and increased by 6% to $288.7 million from $272.8 million in the six months ended June 30, 2024 and 2023, respectively. In the three months ended June 30, 2024 and 2023, our gross profit was $107.5 million and $86.2 million, respectively, representing an increase of 25%. In the six months ended June 30, 2024 and 2023, our gross profit was $214.7 million and $176.2 million, respectively, representing an increase of 22%.

Previous wording

Consignor growth and retention. We grow our sales by increasing the supply of luxury goods offered through our consignment online marketplace. We grow our supply both by attracting new consignors and by creating lasting engagement with existing consignors. We generate leads for new consignors principally through our advertising activity. We convert those leads into active consignors through the activities of our sales professionals, who are trained and incentivized to identify and source high-quality, coveted luxury goods from consignors. Our sales professionals form a consultative relationship with consignors and deliver a high-quality, rapid consigning experience. Our existing relationships with consignors allow us to unlock valuable supply across multiple categories, including women’s fashion, men’s fashion, jewelry and watches. Using artificial intelligence to assist our pricing team, we leverage our proprietary transactional database and market insights based on more than 39.2 million item sales since inception to deliver consignors optimal pricing and rapid sell-through.

Current wording

Consignor growth and retention. We grow our sales by increasing the supply of luxury goods offered through our consignment online marketplace. We grow our supply both by attracting new consignors and by creating lasting engagement with existing consignors. We generate leads for new consignors principally through our advertising activity. We convert those leads into active consignors through the activities of our sales professionals, who are trained and incentivized to identify and source high-quality, coveted luxury goods from consignors. Our sales professionals form a consultative relationship with consignors and deliver a high-quality, rapid consigning experience. Our existing relationships with consignors allow us to unlock valuable supply across multiple categories, including women’s fashion, men’s fashion, jewelry and watches. Using artificial intelligence to assist our pricing team, we leverage our proprietary transactional database and market insights based on more than 40.9 million item sales since inception to deliver consignors optimal pricing and rapid sell-through.

Previous wording

Our growth has been driven in significant part by repeat sales by existing consignors concurrent with growth of our consignor base. The percentage of GMV from repeat consignors in the three months ended March 31, 2024 was 85% as compared to 82% for the three months ended March 31, 2023.

Current wording

Our growth has been driven in significant part by repeat sales by existing consignors concurrent with growth of our consignor base. The percentage of GMV from repeat consignors in the three months ended June 30, 2024 was 85% as compared to 84% for the three months ended June 30, 2023.

Previous wording

The key operating and financial metrics that we use to assess the performance of our business are set forth below for the three months ended March 31, 2024 and 2023.

Current wording

The key operating and financial metrics that we use to assess the performance of our business are set forth below for the three and six months ended June 30, 2024 and 2023.

Previous wording

Shipping services revenue is generated from shipping fees we charge to buyers for outbound shipping and handling activities related to delivering purchased items to our buyers. We also generate shipping services revenue fromthe shipping fees for consigned products returned by our buyers to us within policy. We recognize shipping services revenue over time as the shipping activity occurs. Shipping services revenue excludes the effect of buyer incentives and sales tax.

Current wording

Shipping services revenue is generated from shipping fees we charge to buyers for outbound shipping and handling activities related to delivering purchased items to our buyers. We also generate shipping services revenue from the shipping fees for consigned products returned by our buyers to us within policy. We recognize shipping services revenue over time as the shipping activity occurs. Shipping services revenue excludes the effect of buyer incentives and sales tax.

Previous wording

Take rate is a key driver of our revenue and provides comparability to other marketplaces. The numerator used to calculate our take rate is equal to net consignment sales and the denominator is equal to the numerator plus consignor commissions. Net consignment sales represent the value of sales from consigned goods net of platform-wide discounts less consignor commission, product returns and order cancellations. We exclude direct revenue from our calculation of take rate because direct revenue represents the sale of inventory owned by us, which costs are included in cost of direct revenue. Our take rate reflects the high level of service that we provide to our consignors across multiple touch points and the consistently high velocity of sales for their goods. In November 2022, we updated our take rate structure with the goals of optimizing take rate, limiting consignment of lower value items, and increasing supply of higher value items. Previously, our take rate was primarily based on a tiered commission structure for consignors, where the more they sell the higher percent commission they earn. Consignors typically started at a 55% commission (which equals a 45% take rate for us) and could earn up to a 70% commission. In addition, there were commission exceptions from the tiered commission structure based on category and price point of the items.

Current wording

Take rate is a key driver of our revenue and provides comparability to other marketplaces. The numerator used to calculate our take rate is equal to net consignment sales and the denominator is equal to the numerator plus consignor commissions. Net consignment sales represent the value of sales from consigned goods net of platform-wide discounts less consignor commission, product returns and order cancellations. We exclude direct revenue from our calculation of take rate because direct revenue represents the sale of inventory owned by us, which costs are included in cost of direct revenue. Our take rate reflects the high level of service that we provide to our consignors across multiple touch points and the consistently high velocity of sales for their goods. In November 2022, we updated our take rate structure with the goals of optimizing take rate, limiting consignment of lower value items, and increasing supply of higher value items.

Previous wording

Active buyers include buyers who purchased goods through our online marketplace during the 12 months ended on the last day of the period presented, irrespective of returns or cancellations. We believe this metric reflects scale, brand awareness, buyer acquisition and engagement.

Current wording

Active buyers include buyers who purchased goods through our online marketplace during the period presented, irrespective of returns or cancellations. We believe this metric reflects scale, brand awareness, buyer acquisition and engagement.

Previous wording

(2) The restructuring charges for the three months ended March 31, 2023 consist of impairment of right-of-use assets and property and equipment, employee severance charges, and other charges, including legal and transportation expenses. See "Note 10 - Restructuring" in the notes to the unaudited financial statements for disclosure regarding the restructuring expenses incurred.

Current wording

(1) The restructuring charges for the three and six months ended June 30, 2023 consist of impairment of right-of-use assets and property and equipment, employee severance charges, and other charges, including legal and transportation expenses. See "Note 10 - Restructuring" in the notes to the unaudited financial statements for disclosure regarding the restructuring expenses incurred.

Previous wording

(3) The gain on extinguishment of debt for the three months ended March 31, 2024 reflects the difference between the carrying value of the Exchanged Notes and the fair value of the 2029 Notes.

Current wording

(2) The gain on extinguishment of debt for the six months ended June 30, 2024 reflects the difference between the carrying value of the Exchanged Notes and the fair value of the 2029 Notes.

Previous wording

(4) The change in fair value of warrant liability for the three months ended March 31, 2024 reflects the remeasurement of the warrants issued by the Company in connection with the Note Exchange in February 2024.

Current wording

(3) The change in fair value of warrant liability for the three and six months ended June 30, 2024 reflects the remeasurement of the warrants issued by the Company in connection with the Note Exchange in February 2024.

Previous wording

(1) The CEO transition charges for the three months ended March 31, 2023 consist of retention bonuses for certain executives incurred in connection with our founder's resignation on June 6, 2022.

Current wording

(4) One time expenses for the three and six months ended June 30, 2024 reflects estimated losses related to the fire at one of our New Jersey authentication centers, net of estimated insurance recoveries. See "Note 11 - Commitments and Contingencies" in the notes to the unaudited financial statements for disclosure regarding the event. One time expenses for the six months ended June 30, 2023 consists of retention bonuses for certain executives incurred in connection with our founder's resignation on June 6, 2022.

Previous wording

•Direct revenue. We generate direct revenue from the sale of items that we own, which we refer to as our inventory. We generally acquire inventory when we accept out of policy returns from buyers, and when we make direct purchases from businesses and consignors. We recognize direct revenue upon shipment based on the gross purchase price paid by buyers for goods, net of allowances for product returns, buyer incentives and adjustments.

Current wording

•Direct revenue. We generate direct revenue from the sale of items that we own, which we refer to as our inventory. We generally acquire inventory when we accept out of policy returns from buyers, and when we make direct purchases from businesses and consignors. We recognize direct revenue upon shipment based onthe gross purchase price paid by buyers for goods, net of allowances for product returns, buyer incentives and adjustments.

Previous wording

Restructuring expense is primarily comprised of right-of-use asset and fixed asset impairments, severance benefits, and other related charges, including a net gain on lease terminations. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows using discount rate and other quantitative and qualitative factors. The assumptions used such as projected future cash flows, discount rates, and determination of appropriate market comparable, are subject to volatility and may differ from actual results.

Current wording

Restructuring expense is primarily comprised of right-of-use asset and fixed asset impairments, severance benefits, and other related charges, including net gain on lease terminations. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows using discount rate and other quantitative and qualitative factors. The assumptions used such as projected future cash flows, discount rates, and determination of appropriate market comparable, are subject to volatility and may differ from actual results.

Previous wording

Consignment revenue increased by $13.0 million, or 13%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase in revenue was driven primarily by an increase in consignment GMV and improvement in our take rate during the three months ended March 31, 2024. GMV growth during the three months ended March 31, 2024 was driven by an 8% increase in AOV driven by a year-over-year increase in average selling prices, partially offset by a 6% decrease in orders.

Current wording

Consignment revenue increased by $16.1 million, or 17% in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase in revenue was driven primarily by an increase in consignment GMV and improvement in our take rate during the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Previous wording

Direct revenue decreased by $12.2 million, or 49%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily driven by our planned actions to minimize vendor-purchased company-owned inventory as the margin profile of our direct revenue is lower than consignment revenue. We recognize direct revenue upon shipment of the purchased good to the buyer. Direct revenue as a percentage of total revenue may vary from period to period primarily based on the amount of consignment revenue.

Current wording

Direct revenue decreased by $4.2 million, or 20%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily driven by our planned actions to minimize vendor-purchased company-owned inventory as the margin profile of our direct revenue is lower than consignment revenue. We recognize direct revenue on a gross basis upon shipment of the purchased good to the buyer. Direct revenue as a percentage of total revenue may vary from period to period primarily based on the growth of consignment revenue.

Previous wording

Shipping services revenue increased by $1.1 million, or 8%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to an increase in the standard shipping fee per order, partially offset by a decrease in the number of orders in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Shipping services revenue increased by $2.1 million, or 16%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to the increase in the number of orders in the three months ended June 30, 2024 and due to an increase in the standard shipping fee per order.

Previous wording

Cost of consignment revenue decreased by $2.2 million, or 14%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, driven by efficiencies in our cost leverage.

Current wording

Cost of consignment revenue decreased by $1.5 million, or 10%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven by efficiencies in our cost leverage.

Previous wording

Cost of direct revenue decreased by $12.7 million, or 51%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily attributable to the decrease in direct revenue compared to the prior year.

Current wording

Cost of direct revenue decreased by $6.7 million, or 33%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily attributable to the decrease in direct revenue compared to the prior year.

Previous wording

Our total gross margin increased by 1,119 basis points in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to the increase in consignment revenue and decrease in direct revenue as a percentage of total revenue and the improvement in our take rate. Gross margin may vary from period to period.

Current wording

Our total gross margin increased by 829 basis points in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to the increase in consignment revenue and decrease in direct revenue as a percentage of total revenue and the improvement in take rate. Gross margin may vary from period to period.

Previous wording

As a percent of revenue, marketing expense decreased to 10.6% from 12.3% in the three months ended March 31, 2024 and 2023, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments. We expect these expenses to decrease as a percentage of revenue over the longer term.

Current wording

As a percent of revenue, marketing expense decreased to 9% from 12% in the three months ended June 30, 2024 and 2023. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments. We expect these expenses to decrease as a percentage of revenue over the longer term.

Previous wording

As a percent of revenue, operations and technology expense decreased to 43.8% from 47.9% in the three months ended March 31, 2024 and 2023, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments. We expect these expenses to decrease as a percentage of revenue over the longer term.

Current wording

As a percent of revenue, operations and technology expense decreased to 45% from 50% in the three months ended June 30, 2024 and 2023, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments. We expect these expenses to decrease as a percentage of revenue over the longer term.

Previous wording

Selling, general and administrative expense decreased by $3.1 million, or 6%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The change was primarily due to lower legal settlement expenses, lower employee compensation and lease related expenses due to headcount reductions and office closures as a result of the savings plan implemented during 2023.

Current wording

Selling, general and administrative expense increased by $2.8 million, or 6%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily due to increased employee compensation related expenses due to an increase in headcount compared to the prior period.

Previous wording

Interest income increased by an immaterial amount for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Current wording

Interest income decreased by $0.1 million, or 6%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Previous wording

Returns and cancellations as a percentage of GMV for the three months ended March 31, 2024 was 25.9%, compared to 26.2% for the three months ended March 31, 2023. Our take rate increased to 38.4% from 37.4% during the three months ended March 31, 2024 compared to the same period last year due to the update of our commission structure which went into effect on November 1, 2022.

Current wording

Additionally, returns and cancellations as a percentage of GMV improved for the six months ended June 30, 2024 to 25.6% from 27.2% for the six months ended June 30, 2023. Our take rate increased to 38.4% from 37.0% during the six months ended June 30, 2024 compared to the same period last year due to the update of our commission structure which went into effect on November 1, 2022.

Previous wording

Direct revenue gross margin increased by 364 basis points for the three months ended March 31, 2024, primarily driven by strategic liquidation of company owned inventory sold at discounted prices, which resulted in the sell through of inventory that was previously reserved. The margin profile of our direct revenue is lower than the margin profile of our consignment revenue.

Current wording

Direct revenue gross margin increased by 1,072 basis points for the six months ended June 30, 2024, primarily driven by strategic liquidation of company owned inventory sold at discounted prices, which resulted in sell through of inventory that was previously reserved. The margin profile of our direct revenue is lower than the margin profile of our consignment revenue.

Previous wording

The shipping services revenue gross margin increased by 847 basis points for the three months ended March 31, 2024, primarily due to the increase in the standard shipping fee per order.

Current wording

The shipping services revenue gross margin increased by 622 basis points for the six months ended June 30, 2024, primarily due to the increase in the standard shipping fee per order.

Previous wording

Operations and technology expense decreased by $5.1 million, or 7%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily due to lower employee compensation related expenses due to a decrease in headcount related to the savings plan implemented during 2023.

Current wording

Operations and technology expense decreased by $5.2 million or 4% in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily due to lower employee compensation related expenses due to a decrease in headcount related to the savings plan implemented during 2023.

Previous wording

As a percent of revenue, selling, general and administrative expense decreased to 32.5% from 35.1% in the three months ended March 31, 2024 and 2023, respectively. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.

Current wording

As a percent of revenue, selling, general and administrative expense decreased to 33% from 35% in the six months ended June 30, 2024 and 2023, respectively. These expenses may vary from period to period as a percentage of revenue. We expect these expenses to decrease as a percentage of revenue over the longer term.

Previous wording

Restructuring charges decreased by $36.2 million, or 99% for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. We incurred charges to reduce our real estate presence and operating expenses through the closure of certain retail and office locations and workforce reduction during the three months ended March 31, 2023, which were substantially completed during 2023.

Current wording

Restructuring charges decreased by $38.1 million, or 99%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. We incurred charges to reduce our real estate presence and operating expenses through the closure of certain retail and office locations and workforce reduction during the six months ended June 30, 2023, which were substantially completed during 2023.

Previous wording

The fair value of warrant liability increased by $15.6 million, or 100% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The Company issued 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 as part of the Note Exchange in February 2024. The change was due to the unrealized loss on the change in fair value of the warrant liability from the issuance date to March 31, 2024 (See Note 6 — Non-convertible Notes, Net).

Current wording

The fair value of warrant liability increased by $10.0 million, or 100% for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The Company issued 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 as part of the Note Exchange in February 2024. The change was due to the unrealized loss on the change in fair value of the warrant liability from the issuance date to June 30, 2024 (See Note 6 — Non-convertible Notes, Net).

Previous wording

Gain on extinguishment of debt increased by $4.2 million, or 100% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was due to the gain recorded from the extinguishment of the Exchanged Notes (as defined below) and the issuance of the 2029 Notes (See Note 6 — Non-convertible Notes, Net).

Current wording

Gain on extinguishment of debt increased by $4.2 million, or 100% for the six months ended June 30, 2024 compared to the six months ended March 31, 2023. The increase was due to the gain recorded from the extinguishment of the Exchanged Notes (as defined below) and the issuance of the 2029 Notes (See Note 6 — Non-convertible Notes, Net).

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $166.0 million and an accumulated deficit of $1,150.7 million. With the expiration of the Revolving Credit Agreement in the three months ended June 30, 2023, we had restricted cash of $14.9 million as of March 31, 2024, consisting of cash deposited with a financial institution as collateral for our letters of credit, facility leases and credit cards. Since inception, we have generated negative cash flows from operations and have primarily financed our operations through equity and convertible debt financings. In July 2019, we received net proceeds of $315.5 million upon completion of our IPO on July 2, 2019. In June 2020, we received net proceeds of $143.3 million from the issuance of the 2025 Notes and the related capped call transactions. In March 2021, we received net proceeds of $244.5 million from the 2028 Notes and the related capped call transactions. In February 2024, we exchanged $145.8 million of the 2025 Notes and $6.5 million of the 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes (the “Note Exchange”). As a result of the Note Exchange, we significantly extended the average maturity date of our outstanding indebtedness.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $150.7 million and an accumulated deficit of $1,167.4 million. With the expiration of the Revolving Credit Agreement in the three months ended June 30, 2023, we had restricted cash of $14.9 million as of June 30, 2024, consisting of cash deposited with a financial institution as collateral for our letters of credit, facility leases and credit cards. Since inception, we have generated negative cash flows from operations and have primarily financed our operations through equity and convertible debt financings. In July 2019, we received net proceeds of $315.5 million upon completion of our IPO on July 2, 2019. In June 2020, we received net proceeds of $143.3 million from the issuance of the 2025 Notes and the related capped call transactions. In March 2021, we received net proceeds of $244.5 million from the 2028 Notes and the related capped call transactions. In February 2024, we exchanged $145.8 million of the 2025 Notes and $6.5 million of the 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes (the “Note Exchange”). As a result of the Note Exchange, we significantly extended the average maturity date of our outstanding indebtedness.

Previous wording

During the three months ended March 31, 2024, net cash used operating activities was $3.5 million, which consisted of a net loss of $31.1 million, adjusted by non-cash charges of $33.1 million and cash outflows due to a net change of $5.5 million in our operating assets and liabilities. The net change in our non-cash charges was primarily due to the unrealized loss on change in fair value of warrant liability which were issued in connection with the Note Exchange during the three months ended March 31, 2024. The net change in our operating assets and liabilities was primarily the result of cash outflows due to a $4.9 million decrease in operating lease liabilities and a $3.0 million increase in accounts receivables partially offset by a $3.0 million decrease in prepaid expenses and other current assets.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $10.2 million, which consisted of a net loss of $47.8 million, adjusted by non-cash charges of $54.5 million and cash outflows due to a net change of $16.9 million in our operating assets and liabilities. The net change in our non-cash charges operating assets and liabilities was primarily the result of cash outflows due to a $12.7 million decrease in accrued consignor payable and a decrease of $9.9 million in operating lease liabilities, partially offset by a decrease of $4.8 million in prepaid expenses and other current assets.

Previous wording

During the three months ended March 31, 2023, net cash used in operating activities was $30.4 million, which consisted of a net loss of $82.5 million, adjusted by non-cash charges of $60.2 million and cash outflows due to a net change of $8.1 million in our operating assets and liabilities. The net change in our non-cash charges was primarily due to property, plant, equipment, and right-of-use asset impairments taken in connection with our reduction in real estate and savings plan during the three months ended March 31, 2023. The net change in our operating assets and liabilities was primarily the result of cash outflows due to a decrease of $9.4 million in accrued consignor payable, a $6.2 million decrease in operating lease liabilities, and a $1.4 million decrease in accounts payable partially offset by cash inflows due to a decrease of $8.7 million in inventory and a $2.6 million decrease in accounts receivables.

Current wording

During the six months ended June 30, 2023, net cash used in operating activities was $60.9 million, which consisted of a net loss of $123.8 million, adjusted by non-cash charges of $85.1 million and cash outflows due to a net change of $22.1 million in our operating assets and liabilities. The net change in our operating assets and liabilities was primarily the result of cash outflows due to a $19.7 million decrease in accrued consignor payable, a decrease of $11.4 million in operating lease liabilities, and a $9.6 million decrease in other accrued and current liabilities, partially offset by an increase of $10.5 million in inventory and a $5.2 million increase in accounts receivable.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $5.3 million, which consisted of $2.1 million for purchases of property and equipment, net, including leasehold improvements and $3.2 million for capitalized proprietary software development costs.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $10.3 million, which consisted of $5.1 million for purchases of property and equipment, net, including leasehold improvements and $5.1 million for capitalized proprietary software development costs.

Previous wording

During the three months ended March 31, 2023, net cash used in investing activities was $15.9 million, which primarily consisted of $11.7 million for purchases of property and equipment, net, including leasehold improvements, and $4.2 million for capitalized proprietary software development costs.

Current wording

During the six months ended June 30, 2023, net cash used in investing activities was $27.3 million, which consisted of $19.8 million for purchases of property and equipment, net, including leasehold improvements and $7.5 million for capitalized proprietary software development costs.

Previous wording

During the three months ended March 31, 2024, net cash used in financing activities was $0.9 million, which primarily consisted of payment of debt issuance costs related to the Note Exchange.

Current wording

During the six months ended June 30, 2024, net cash used in financing activities was $4.5 million, which primarily consisted of payment of debt issuance costs related to the Note Exchange.