TheRealReal, Inc.

Previous wording

We have transformed the luxury consignment experience by removing the friction and pain points inherent in the traditional consignment model. Our growth playbook centers on a scalable supply engine, and helps us forge enduring relationships with our consignors. We offer concierge at-home consultation and pickup as well as virtual consultations. Consignors may also drop off items at our luxury consignment offices. Our retail 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 over 40 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. Our growth playbook centers on a scalable supply engine, and helps us forge enduring relationships with our consignors. We offer concierge at-home consultation and pickup as well as virtual consultations. Consignors may also drop off items at our luxury consignment offices. Our retail 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 over 50 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 September 30, 2025 and 2024, our overall take rate on consigned goods was 37.9% and 38.6%, respectively. The decrease in our take rate was due to sales mix into higher value items. 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 March 31, 2026 and 2025, our overall take rate on consigned goods was 36.4% and 38.6%, respectively. The decrease in our take rate was due to sales mix into higher value items. 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

•Shipping services revenue. When we deliver purchased items to our buyers, we charge shipping fees to buyers for the outbound shipping and handling services. We also generate shipping services revenue from the shipping fees for consigned products returned by our buyers to us within policy. Shipping services revenue excludes the effect of buyer incentives and sales tax.

Current wording

•Shipping services revenue. When we deliver purchased items to our buyers, we charge shipping fees to buyers for the outbound shipping and handling services. We also generate shipping services revenue from the shipping fees for consigned products returned by our buyers to us within policy. Shipping services revenue is recognized net of immaterial buyer incentives and excludes the effect of sales tax.

Previous wording

We believe there is substantial opportunity to grow our business by having buyers also become consignors and vice versa. As of September 30, 2025, 16% of our buyers during the last twelve months also consigned items, and 49% of our consignors during the past twelve months also made purchases. We believe this approach effectively captures the flywheel effect that strengthens the network dynamics of our online marketplace. Our GMV from buyers who are also consignors has increased over time due to the effectiveness of our flywheel and more recently through tools to encourage flywheel behavior like the "Reconsign" module on our platform. If we fail to continue to attract and retain our buyer base to our online marketplace, our operating results would be adversely affected.

Current wording

We believe there is substantial opportunity to grow our business by having buyers also become consignors and vice versa. As of March 31, 2026, 16% of our buyers during the last twelve months also consigned items, and 50% of our consignors during the past twelve months also made purchases. We believe this approach effectively captures the flywheel effect that strengthens the network dynamics of our online marketplace. Our GMV from buyers who are also consignors has increased

Previous wording

Scaling operations and technology. To support the future growth of our business, we continue to invest in physical infrastructure, technology and talent. We principally conduct our intake, authentication, merchandising and fulfillment operations in our leased authentication centers located in Arizona and New Jersey comprising an aggregate of approximately 1.4 million square feet of space. We also operate retail stores in several geographies. In addition to scaling our physical infrastructure, growing our single-SKU business operations requires that we attract, train and retain highly-skilled personnel for purposes of authentication, copywriting, merchandising, pricing and fulfilling orders. We have invested substantially in technology to automate our operations and support growth. We have continued to elevate our authentication operations through the combination of technology, our rich proprietary data, and artificial intelligence capabilities to support efficiency and quality. We continue to strategically invest in technology, as innovation positions us to scale and support growth into the future.

Current wording

Scaling operations and technology. To support the future growth of our business, we continue to invest in physical infrastructure, technology and talent. We principally conduct our intake, authentication, merchandising and fulfillment operations in our leased authentication centers located in Arizona and New Jersey comprising an aggregate of approximately 1.4 million square feet of space. We also operate retail stores in several geographies. In addition to scaling our physical infrastructure, growing our single-SKU business operations requires that we attract, train and retain highly-skilled personnel for purposes of authentication, copywriting, merchandising, pricing and fulfilling orders. We have invested substantially in technology to automate our operations and support growth. We have continued to elevate our authentication operations through the combination of technology, our proprietary data and artificial intelligence capabilities to support efficiency and quality. We continue to strategically invest in technology, as innovation positions us to scale and support growth into the future.

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 and nine months ended September 30, 2025 and 2024.

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 months ended March 31, 2026 and 2025.

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 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.

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 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, net of immaterial buyer incentives. Shipping services revenue excludes the effect of 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. We continue to assess our take rate structure and may implement further changes in the future to, among other things, optimize take rate, limit consignment of lower value items, and increase supply of higher value 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. We continue to assess our take rate structure and may implement further changes in the future.

Previous wording

Average order value (“AOV”) means the average value of all orders placed across our online marketplace and retail stores, excluding the effect of buyer incentives, shipping fees and sales taxes. Our focus on luxury goods across multiple categories drives a consistently strong AOV. Our AOV reflects both the average price of items sold as well as the number of items per order. Our AOV is a key driver of our operating leverage.

Current wording

AOV means the average value of all orders placed across our online marketplace and retail stores, excluding the effect of buyer incentives, shipping fees and sales taxes. Our focus on luxury goods across multiple categories drives a consistently strong AOV. Our AOV reflects both the average price of items sold as well as the number of items per order. Our AOV is a key driver of our operating leverage.

Previous wording

Adjusted EBITDA means GAAP net income (loss) before interest income, interest expense, provision for income taxes, and depreciation and amortization, further adjusted to exclude stock-based compensation, payroll taxes on employee stock transactions, legal settlement charges, restructuring charges, gain on extinguishment of debt, change in fair value of warrant liability and restructuring and other expenses. Adjusted EBITDA provides a basis for comparison of our business operations between current, past and future periods by excluding items that we believe are not indicative of our core operating performance. Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA has certain limitations as the measure excludes the impact of certain expenses that are included in our statements of operations that are necessary to run our business and should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated and presented in accordance with GAAP.

Current wording

Adjusted EBITDA means GAAP net income (loss) before interest income, interest expense, provision for income taxes, and depreciation and amortization, further adjusted to exclude stock-based compensation, payroll taxes on employee stock transactions, gain on extinguishment of debt, change in fair value of warrant liability and certain one-time expenses. Adjusted EBITDA provides a basis for comparison of our business operations between current, past and future periods by excluding items that we believe are not indicative of our core operating performance. Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA has certain limitations as the measure excludes the impact of certain expenses that are included in our statements of operations that are necessary to run our business and should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated and presented in accordance with GAAP.

Previous wording

The following table provides a reconciliation of net loss to Adjusted EBITDA (in thousands):

Current wording

The following table provides a reconciliation of net income (loss) to Adjusted EBITDA (in thousands):

Previous wording

(1) The gain on extinguishment of debt for the three and nine months ended September 30, 2025 reflects the difference between the carrying value of the 2025 Exchanged Notes and the fair value of the 2031 Notes. The gain on extinguishment of debt for the nine months ended September 30, 2024 reflects the difference between the carrying value of the 2024 Exchanged Notes and the fair value of the 2029 Notes.

Current wording

(1) The gain on extinguishment of debt for the three months ended March 31, 2025 reflects the difference between the carrying value of the February 2025 Exchanged Notes and the fair value of the 2031 Notes.

Previous wording

(2) The change in fair value of warrant liability for the three and nine months ended September 30, 2025 and September 30, 2024 reflects the remeasurement of the Warrants issued by the Company in connection with the 2024 Note Exchange in February 2024.

Current wording

(2) The change in fair value of warrant liability for the three months ended March 31, 2026 and March 31, 2025 reflects the remeasurement of the Warrants issued by the Company in connection with the 2024 Note Exchange in February 2024.

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 onthe 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 on the gross purchase price paid by buyers for goods, net of allowances for product returns, buyer incentives and adjustments.

Previous wording

•Shipping services revenue. We generate shipping services revenue from the outbound shipping and handling fees we charge when 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. We generate shipping services revenue from the outbound shipping and handling fees we charge when 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, net of immaterial buyer incentives. Shipping services revenue excludes the effect of sales tax.

Previous wording

Consignment revenue increased by $41.6 million, or 12%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in revenue was driven primarily by an increase in consignment GMV, a 8% increase in our AOV and 6% increase in the number of orders during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Current wording

Consignment revenue increased by $22.1 million, or 18%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in revenue was driven primarily by a 24% increase in consignment GMV during the three months ended March 31, 2026.

Previous wording

Our take rate decreased to 38.1% from 38.5% during the nine months ended September 30, 2025 compared to the same period last year due to sales mix into higher value items.

Current wording

Our take rate decreased to 36.4% from 38.6% during the three months ended March 31, 2026 compared to the same period last year due to sales mix into higher value items.

Previous wording

Direct revenue increased by $7.3 million, or 47%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by higher sell through of high value inventory acquired from businesses or individual sellers and inventory acquired from out of policy returns. 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.

Current wording

Direct revenue increased by $5.4 million, or 26%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by higher sales of items acquired from businesses, individual sellers, and from out of policy returns. Increases in out of policy returns is consistent with the growth in our consignment business. 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.

Previous wording

Cost of consignment revenue increased by $1.0 million, or 7%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024, driven by higher consignment volume, partially offset by increased operational efficiencies.

Current wording

Cost of consignment revenue increased by $2.5 million, or 19%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, driven by higher consignment volume.

Previous wording

Cost of direct revenue increased by $5.2 million, or 40%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily attributable to the increase in direct revenue compared to the prior year.

Current wording

Cost of direct revenue increased by $5.0 million, or 33%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily attributable to the increase in direct revenue compared to the prior year.

Previous wording

Direct revenue gross margin increased by 366 basis points for the three months ended September 30, 2025, primarily due to category mix of products sold during the three months ended September 30, 2025.

Current wording

Direct revenue gross margin decreased by 411 basis points for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to category mix of products sold and favorable inventory adjustments in prior year.

Previous wording

The shipping services revenue gross margin decreased by 400 basis points for the nine months ended September 30, 2025, primarily due to increased order volume and higher carrier costs.

Current wording

The shipping services revenue gross margin increased by 476 basis points for the three months ended March 31, 2026, primarily due to increase in shipping fees.

Previous wording

Marketing expense increased by $2.5 million, or 22%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to an increase in advertising costs and employee severance related costs.

Current wording

Marketing expense increased by $2.7 million, or 17%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to an increase in advertising costs due to increased advertising volumes and changes in the composition of marketing spend.

Previous wording

As a percent of revenue, marketing expense remained flat at 8% in the three months ended September 30, 2025 and 2024. 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 9.8% from 9.9% in the three months ended March 31, 2026 and 2025, respectively. These expenses may vary from period to period as a percentage of revenue, depending primarily upon our marketing investments.

Previous wording

Operations and technology expense increased by $4.5 million, or 7%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was driven by higher variable hourly compensation from increased volume compared to the prior period.

Current wording

Operations and technology expense increased by $5.7 million, or 9%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was driven by higher employee costs due to increased volume, and an increase in software and service expenses. The increased employee costs were partially offset by realized efficiencies in our fulfillment processes that moderated the overall increase.

Previous wording

As a percent of revenue, operations and technology expense decreased to 41% from 45% in the three months ended September 30, 2025 and 2024, 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 38.3% from 41.9% in the three months ended March 31, 2026 and 2025, respectively, due to improved operating efficiencies in our authentication centers. 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

Selling, general and administrative expense increased by $4.1 million, or 9%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to higher employee costs and employee severance related costs.

Current wording

Selling, general and administrative expense increased by $2.4 million, or 5%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to higher employee costs.

Previous wording

As a percent of revenue, selling, general and administrative expense decreased to 30% from 32% in the nine months ended September 30, 2025 and 2024, 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 27.6% from 31.2% in the three months ended March 31, 2026 and 2025, 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

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 2024 Note Exchange in February 2024. The warrant liability is subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. During the nine months ended September 30, 2025, we incurred a gain of $3.1 million due to the decrease in the fair value of the warrants outstanding at September 30, 2025.

Current wording

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 2024 Note Exchange in February 2024. The warrant liability is subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. During the three months ended March 31, 2026, we incurred a gain of $47.3 million due to the decrease in the fair value of the warrants outstanding at March 31, 2026. The decrease in the fair value of the warrant liability was primarily driven by a decrease in the Company’s stock price during the period, which resulted in a lower valuation of the warrants.

Previous wording

Gain on extinguishment of debt increased by $3.7 million, or 100% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was due to the gain recorded from the extinguishment of the August 2025 Exchanged Notes (as defined below) and the issuance of the additional 2031 Notes during the three months ended September 30, 2025 (See Note 7 — Convertible Senior Notes, Net).

Current wording

During the three months ended March 31, 2025, the Company recognized a gain on extinguishment of debt of $37.1 million due to the extinguishment of the Exchanged Notes (as defined below) and the issuance of the 2031 Notes during the three months ended March 31, 2025 (See Note 7 — Convertible Senior Notes, Net). No such transactions occurred in the three months ended March 31, 2026.

Previous wording

Interest income decreased by $1.1 million, or 58%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 due to lower average cash balances.

Current wording

Interest income decreased by $0.4 million, or 27% for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 due to lower average cash balances.

Previous wording

Interest expense increased by $5.0 million, or 32% in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was due to the full-period impact of the 2029 Notes during the nine months ended September 30, 2025 compared to a partial period of interest expense during the nine months ended September 30, 2024, as well as the issuance of the 2031 Notes in February 2025 and August 2025.

Current wording

Interest expense increased by $0.9 million, or 14% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was due to the full-quarter impact of the 2031 Notes in the current quarter compared to a partial quarter of interest expense in the prior period.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $108.4 million and an accumulated deficit of $1,256.8 million. We had restricted cash of $14.9 million as of September 30, 2025, 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.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $124.0 million and an accumulated deficit of $1,256.7 million. We had restricted cash of $14.8 million as of March 31, 2026, 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. However, during the years ended December 31, 2025 and 2024, we achieved positive cash flow from operations.

Previous wording

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 our 2025 Notes and the related capped call transactions. In March 2021, we received net proceeds of $244.5 million from our 2028 Notes and the related capped call transactions. In February 2024, we exchanged $145.8 million of our 2025 Notes and $6.5 million of our 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes in the 2024 Note Exchange (see Note 6 — Non-convertible Notes, Net). In February 2025, we exchanged $183.3 million aggregate principal amount of the 2028 Notes for $146.7 million aggregate principal amount of our 2031 Notes in the February 2025 Note Exchange (see Note 7 — Convertible Senior Notes, Net). In June 2025, the 2025 Notes matured, and the Company repaid the outstanding principal amount and accrued interest in full. The total cash payment upon maturity was $27.2 million, which included the outstanding principal amount and accrued interest through the maturity date. In August 2025, we exchanged $49.5 million aggregate principal amount of the 2028 Notes for $43.4 million aggregate principal amount of additional 2031 Notes in the August 2025 Note Exchange (see Note 7 — Convertible Senior Notes, Net). As a result of the Note Exchanges, we significantly extended the average maturity date of our outstanding balance.

Current wording

February 2024, we exchanged $145.8 million of our 2025 Notes and $6.5 million of our 2028 Notes for $135.0 million in aggregate principal amount of the 2029 Notes (see Note 6 — Non-convertible Notes, Net). In February 2025, we exchanged $183.3 million aggregate principal amount of the 2028 Notes for $146.7 million aggregate principal amount of our new 2031 Notes in the February 2025 Note Exchange (see Note 7 — Convertible Senior Notes, Net). In June 2025, the 2025 Notes matured, and the Company repaid the outstanding principal amount and accrued interest in full. The total cash payment upon maturity was $27.2 million, which included the outstanding principal amount and accrued interest through the maturity date. In August 2025, we exchanged $49.5 million aggregate principal amount of the 2028 Notes for $43.4 million aggregate principal amount of additional 2031 Notes (see Note 7 — Convertible Senior Notes, Net). As a result of the 2024 Note Exchange and 2025 Note Exchanges, we significantly extended the average maturity date of our outstanding indebtedness.

Previous wording

We expect that operating losses and negative cash flows from operations may continue in the foreseeable future. We believe our existing cash and cash equivalents as of September 30, 2025 will be sufficient to meet our working capital and capital expenditures needs for at least the next 12 months.

Current wording

We expect that operating losses may continue in the foreseeable future. We believe our existing cash and cash equivalents as of March 31, 2026 will be sufficient to meet our working capital and capital expenditures needs for at least the next 12 months.

Previous wording

During the nine months ended September 30, 2024, net cash used in operating activities was $1.1 million, which consisted of a net loss of $65.7 million, adjusted by non-cash charges of $73.4 million and cash outflows due to a net change of $8.8 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 decrease of $15.3 million in operating lease liabilities and a $5.0 million decrease in accrued consignor payable, partially offset by an increase of $10.0 million in other accrued and current liabilities.

Current wording

During the three months ended March 31, 2026, net cash used in operating activities was $16.6 million, which consisted of net income of $38.9 million, adjusted by non-cash charges of $30.2 million and cash outflows due to a net change of $25.4 million in our operating assets and liabilities. The net change in our non-cash charges was primarily due to the $47.3 million unrealized gain on change in fair value of warrant liability. The net change in our operating assets and liabilities was primarily the result of cash outflows due to a $9.2 million decrease in accrued consignor payables, a $6.9 million decrease in other accrued and current liabilities, a $6.0 million decrease in operating lease liabilities, and a $4.0 million increase in inventory, net.

Previous wording

During the nine months ended September 30, 2025, net cash used in operating activities was $12.5 million, which primarily consisted of a net loss of $3.0 million, adjusted by non-cash charges of $22.1 million and cash outflows due to a net change of $31.6 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 $16.4 million decrease in operating lease liabilities, a $12.4 million increase in accounts receivable, and a $8.3 million increase in inventory, partially offset by a $7.2 million increase in other accrued and current liabilities.

Current wording

During the three months ended March 31, 2025, net cash used in operating activities was $28.3 million, which consisted of net income of $62.4 million, adjusted by non-cash charges of $59.2 million and cash outflows due to a net change of $31.5 million in our operating assets and liabilities. The net change in our non-cash charges was primarily due to the $42.5 million unrealized gain on change in fair value of warrant liability and the $37.1 million gain on debt extinguishment in connection with the 2025 Note Exchanges. The net change in our operating assets and liabilities was primarily the result of cash outflows due to a $14.5 million increase in accounts receivables, a $9.3 million decrease in other accrued and current liabilities, a $7.4 million decrease in accrued consignor payables and a $5.5 million decrease in operating lease liabilities, partially offset by a $7.3 million decrease in prepaid expenses and other current assets.

Previous wording

During the nine months ended September 30, 2024, net cash used in investing activities was $16.8 million, which consisted of $9.2 million for purchases of property and equipment, net, including leasehold improvements and $8.1 million for capitalized proprietary software development costs, partially offset by $0.5 million of insurance proceeds received related to the warehouse fire.

Current wording

During the three months ended March 31, 2026, net cash used in investing activities was $10.6 million, which consisted of $7.5 million for purchases of property and equipment, net, including leasehold improvements and $3.2 million for capitalized proprietary software development costs.

Previous wording

During the nine months ended September 30, 2025, net cash used in investing activities was $22.3 million, which consisted of $15.0 million for purchases of property and equipment, net, including leasehold improvements and $9.7 million for capitalized proprietary software development costs, partially offset by $2.3 million of insurance proceeds received related to the warehouse fire.

Current wording

During the three months ended March 31, 2025, net cash used in investing activities was $5.9 million, which consisted of $4.7 million for purchases of property and equipment, net, including leasehold improvements and $2.9 million for capitalized proprietary software development costs, partially offset by $1.7 million of insurance proceeds received related to the warehouse fire that occurred in May 2024.

Previous wording

During the nine months ended September 30, 2024, net cash used in financing activities was $4.6 million, which primarily consisted of payment of debt issuance costs related to the 2024 Note Exchange.

Current wording

During the three months ended March 31, 2025, net cash provided by financing activities was $1.5 million, which primarily consisted of the proceeds received from the settlement of Capped Calls in conjunction with the 2025 Note Exchanges.