Allbirds Inc

Previous wording

We generate our revenue via sales of footwear and apparel products, primarily through our direct business, a digitally-led vertical retail distribution strategy. We generally market directly to consumers via our localized multilingual digital platform and our physical footprint of 43 stores as of June 30, 2024. In addition to our direct business, we selectively partner with third-parties, including retailers and distributors, to sell our products through their channels, which helps us reach more consumers and increase brand awareness.

Current wording

We generate our revenue via sales of footwear and apparel products, primarily through our direct business, a digitally-led vertical retail distribution strategy. We generally market directly to consumers via our localized multilingual digital platform and our physical footprint of 34 stores as of September 30, 2024. In addition to our direct business, we selectively partner with third-parties, including retailers and distributors, to sell our products through their channels, which helps us reach more consumers and increase brand awareness.

Previous wording

Our product and brand initiatives include increasing focus on our core franchises, through a concentration on comfort and quality and better commercialization of our innovative materials, as well as a highly focused brand strategy that reconnects with core consumers. We expect these initiatives to begin to impact the business in the second half of 2024.

Current wording

Our product and brand initiatives include increasing focus on our core franchises, through a concentration on comfort and quality and better commercialization of our innovative materials, as well as a highly focused brand strategy that reconnects with core consumers. While these initiatives are underway, we expect they will begin to impact the business in the second half of 2025.

Previous wording

Our store-based distribution initiatives in the United States include optimizing our existing store fleet and selectively expanding our third-party distribution channels. Store optimization will include slowing the pace of new store openings, closing certain stores that do not meet our profitability targets, and investing in corporate and retail store talent and store marketing. As of June 30, 2024, we had completed all planned new store openings and we continue to evaluate ways to optimize our existing store fleet, which includes the planned closure of approximately 10-15 stores in the United States 2024. We closed 3 stores in the United States in the first quarter of 2024 and 10 stores in the United States during the second quarter of 2024, for a total closure of 13 stores during the six months ended June 30, 2024.

Current wording

Our store-based distribution initiatives in the United States include optimizing our existing store fleet and selectively expanding our third-party distribution channels. Store optimization will include slowing the pace of new store openings, closing certain stores that do not meet our profitability targets, and investing in corporate and retail store talent and store marketing. As of September 30, 2024, we had completed all planned new store openings and we continue to evaluate ways to optimize our existing store fleet, which includes the planned closure of approximately 10-15 stores in the United States in 2024. We closed 3 stores in the United States in the first quarter of 2024, 10 stores in the United States during the second quarter of 2024, and 1 store in the United States during the third quarter of 2024, for a total closure of 14 stores during the nine months ended September 30, 2024.

Previous wording

Our international go-to-market strategy initiative encompasses evaluating ways to reduce complexity and grow internationally in a cost- and capital-efficient manner. In the third quarter of 2023, we transitioned our South Korean and Canadian businesses to independent third-party distributors. In the first half of 2024, we signed distribution agreements with independent third-party distributors in the Gulf Countries, Southeast Asia, Benelux, and Scandinavia. In the second quarter of 2024, we transitioned our Australasian and Japanese businesses to independent third-party distributors. Subsequent to quarter end, the Company announced distribution and licensing agreements and transitioned an additional region, China. Distributors oversee the sale and distribution of our products, purchased from us, across eCommerce, brick and mortar, and wholesale channels in their respective territories and are required to allocate dedicated brand and marketing resources to their operations for us. We may continue to enter into similar distribution arrangements with third parties in other international markets, which we expect to impact both our short and long term results of operations. The distributor model will result in a reduction to net revenue and gross profit in the near term for regions we transitioned from a direct model, because the selling price to distributors will be below the retail price we have historically sold to our direct consumers. Because we expect lower operating expenses as compared to the direct model, we also expect these transitions to improve adjusted EBITDA profitability and inventory efficiency, while also helping to reduce overall complexity in our business.

Current wording

Our international go-to-market strategy initiative encompasses evaluating ways to reduce complexity and grow internationally in a cost- and capital-efficient manner. With respect to geographies we operated directly, in the third quarter of 2023, we transitioned our South Korean and Canadian businesses, in the second quarter of 2024, we transitioned our businesses in Australasian and Japan, and in the third quarter of 2024, we transitioned our business in China, in each instance, to independent third-party distributors. In addition, we have begun to partner with third-party distributors in new geographies. In the first and second quarters of 2024, we signed distribution agreements with independent third-party distributors in the Gulf Countries, Southeast Asia, Benelux, and Scandinavia. In the third quarter of 2024, we signed a distribution agreement with an independent third-party distributor for six countries in Europe. Distributors oversee the sale and distribution of our products, purchased from us, across eCommerce, brick and mortar, and wholesale channels in their respective territories and are required to allocate dedicated brand and marketing resources to their operations for us. We may continue to enter into similar distribution arrangements with third parties in other international markets, which we expect to impact both our short and long term results of operations. The distributor model will result in a reduction to net revenue and gross profit in the near term for regions we transitioned from a direct model, because the selling price to distributors will be below the retail price we have historically sold to our direct consumers. Because we expect lower operating expenses as compared to the direct model, we also expect these transitions to improve adjusted EBITDA profitability and inventory efficiency, while also helping to reduce overall complexity in our business.

Previous wording

Related to these initiatives, we recognized restructuring expenses of $1.0 million and $1.8 million for the three and six months ended June 30, 2024, respectively, compared to $1.0 million and $4.3 million for the three and six months ended June 30, 2023, which are recorded within restructuring expense in the condensed consolidated statements of operations and comprehensive loss. These expenses primarily consist of employee-related benefits and third-party professional fees and other related charges.

Current wording

Related to these initiatives, we recognized restructuring expenses of $0.0 million and $1.8 million for the three and nine months ended September 30, 2024, respectively, compared to $1.2 million and $5.5 million for the three and nine months ended September 30, 2023, which are recorded within restructuring expense in the condensed consolidated statements of operations and comprehensive loss. These expenses primarily consist of employee-related benefits and third-party professional fees and other related charges.

Previous wording

Our long-term growth strategy relies on our ability to grow across our digital and retail channels, while still maintaining our goal of long-term profitability. We believe an omni-channel buying experience is important to meeting the needs of our customer base. Although we continue to view retail stores as key to reaching new customers and increasing penetration of omni-channel customers, we plan to try to optimize our store fleet and focus on ensuring that our retail stores are efficiently driving customer acquisition. These optimization efforts include a combination of efforts, including evaluating new store openings, closing existing stores, investing in store marketing, expanding our third-party partnerships, and continuing the use of third-party distributors in certain international markets, such as the distribution agreements entered into as of the first half of 2024 and the additional distribution agreements we expect to enter into in other international markets.

Current wording

Our long-term growth strategy relies on our ability to grow across our digital and retail channels, while still maintaining our goal of long-term profitability. We believe an omni-channel buying experience is important to meeting the needs of our customer base. Although we continue to view retail stores as key to reaching new customers and increasing penetration of omni-channel customers, we plan to try to optimize our store fleet and focus on ensuring that our retail stores are efficiently driving customer acquisition. These optimization efforts include a combination of efforts, including evaluating new store openings and store closings, investing in store marketing, expanding our third-party partnerships, and continuing the use of third-party distributors in certain international markets, such as the distribution agreements entered into in 2024 and the additional distribution agreements we expect to enter into in other international markets.

Previous wording

However, we continue to monitor and respond to evolving developments regarding recent macroeconomic events including elevated inflation, rising interest rates, liquidity concerns at, and failures of, banks and other financial institutions, supply chain disruptions, fluctuations in currency exchange rates, and geopolitical conflicts, which have led to further economic uncertainty in the global economy. These macroeconomic conditions have had and are likely to continue to have adverse consequences on consumer spending, including the buying patterns of our customers and prospective customers. See the section titled “Risk Factors—Risks Related to Our Business, Brand, Products, and Industry—Economic uncertainty in our key markets may affect consumer purchases of discretionary items, which has affected and may continue to adversely affect demand for our products” in Part II, Item 1A. Risk Factors, for further details.

Current wording

However, we continue to monitor and respond to evolving developments regarding recent macroeconomic events including elevated inflation, changing interest rates, liquidity concerns at, and failures of, banks and other financial institutions, supply chain disruptions, fluctuations in currency exchange rates, and geopolitical conflicts, which have led to further economic uncertainty in the global economy. These macroeconomic conditions have had and are likely to continue to have adverse consequences on consumer spending, including the buying patterns of our customers and prospective customers. See the section titled “Risk Factors—Risks Related to Our Business, Brand, Products, and Industry—Economic uncertainty in our key markets may affect consumer purchases of discretionary items, which has affected and may continue to adversely affect demand for our products” in Part II, Item 1A. Risk Factors, for further details.

Previous wording

1 In the first quarter of 2024, we closed the operations of three stores in the US. In the second quarter of 2024, we closed the operations of ten stores in the US.

Current wording

2 In the first quarter of 2024, we closed the operations of three stores in the US. In the second quarter of 2024, we closed the operations of ten stores in the US. In the third quarter of 2024, we closed the operation of one store in the US.

Previous wording

2 In the third quarter of 2023, we transitioned the operations of two stores in Canada and one store in South Korea to unrelated third-party distributors, resulting in a reduction of three international stores. In the second quarter of 2024, we transitioned the operations of two stores in Japan and one store in New Zealand to unrelated third-party distributors, resulting in a reduction of three international stores. In the second quarter of 2024, we closed one store in Europe.

Current wording

3 In the third quarter of 2023, we transitioned the operations of two stores in Canada and one store in South Korea to unrelated third-party distributors. In the second quarter of 2024, we transitioned the operations of two stores in Japan and one store in New Zealand to unrelated third-party distributors and closed one store in Europe. In the third quarter of 2024, we transitioned the operations of six stores in China to an unrelated third-party distributor and closed two stores in Europe.

Previous wording

We generate net revenue primarily from sales of our products. We sell products directly through our own digital channels, our leased retail stores, and third-party retailers and distributors. As of June 30, 2024, the majority of our sales are through our digital channels and leased retail stores. Revenue is recognized when we satisfy our performance obligation by transferring control of the promised goods to the customer, net of allowances for returns, discounts, and any taxes collected from customers. This occurs either upon shipment or upon receipt, depending on the terms of sale. We expect overall sales to decline in 2024, driven by lower unit sales in our direct business, the planned closure of retail stores in the United States, and the international transitions as described above.

Current wording

We generate net revenue primarily from sales of our products. We sell products directly through our own digital channels, our leased retail stores, and third-party retailers and distributors. As of September 30, 2024, the majority of our sales are through our digital channels and leased retail stores. Revenue is recognized when we satisfy our performance obligation by transferring control of the promised goods to the customer, net of allowances for returns, discounts, and any taxes collected from customers. This occurs either upon shipment or upon receipt, depending on the terms of sale. We expect overall sales to decline in 2024, driven by lower unit sales in our direct business, including the planned closure of retail stores in the United States, and the international transitions as described above.

Previous wording

Selling, general, and administrative expense (“SG&A expense”) consists of personnel and related costs including salaries, benefits, bonuses, and stock-based compensation for our corporate and retail employees, third-party professional fees, information technology, payment processing fees, fixed and variable lease costs for corporate offices and retail stores, depreciation and amortization, software costs, legal fees, and other administrative costs associated with operating our business.

Current wording

Selling, general, and administrative expense (“SG&A expense”) consists of personnel and related costs including salaries, benefits, bonuses, and stock-based compensation for our corporate and retail employees, third-party professional fees, software costs, payment processing fees, fixed and variable lease costs for retail stores and corporate offices, depreciation and amortization, legal fees, and other administrative operating costs.

Previous wording

Net loss from sales of businesses consists of gains or losses associated with the sale of certain net assets used in connection with the operation of our businesses in Japan and Australasia in the second quarter of 2024, based on the difference between the net book value of assets and liabilities sold against the consideration received.

Current wording

Net loss from sales of businesses consists of gains or losses associated with the sale of certain net assets used in connection with the operation of our businesses in Japan and Australasia in the second quarter of 2024, and China in the third quarter of 2024, based on the difference between the net book value of assets and liabilities sold against the consideration received.

Previous wording

Other income (expense) consists of gains or losses on lease terminations and modifications, gains or losses on foreign currency, impairment of a note receivable associated with our Canadian third-party distributor, gains or losses on sales of property and equipment, and changes in the fair value of our equity investments.

Current wording

Other income (expense) consists of gains or losses on lease terminations and modifications, gains or losses on foreign currency, gains or losses on sales of property and equipment, and changes in the fair value of our equity investments.

Previous wording

Our provision for income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We record deferred tax assets and liabilities based on differences between the book and tax bases of assets and liabilities. The deferred tax assets and liabilities are calculated by applying enacted tax rates and laws to taxable years in which such differences are expected to reverse. Because we have a recent history of pre-tax book losses and are expected to be in a pre-tax book loss position in the near term, a valuation allowance was maintained against the deferred tax assets in the United States, Vietnam, Hong Kong, Canada, South Korea, and New Zealand as of June 30, 2024.

Current wording

Our provision for income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We record deferred tax assets and liabilities based on differences between the book and tax bases of assets and liabilities. The deferred tax assets and liabilities are calculated by applying enacted tax rates and laws to taxable years in which such differences are expected to reverse. Because we have a recent history of pre-tax book losses and are expected to be in a pre-tax book loss position in the near term, a valuation allowance was maintained against the deferred tax assets in the United States, Vietnam, Hong Kong, Canada, New Zealand, and South Korea as of September 30, 2024.

Previous wording

(1)Includes stock-based compensation expense of $2.9 million and $6.3 million for the three and six months ended June 30, 2024, respectively, and $5.3 million and $11.0 million for the three and six months ended June 30, 2023, respectively.

Current wording

(1)Includes stock-based compensation expense of $2.6 million and $8.9 million for the three and nine months ended September 30, 2024, respectively, and $4.7 million and $15.7 million for the three and nine months ended September 30, 2023, respectively.

Previous wording

(2)Includes depreciation and amortization expense of $2.6 million and $7.4 million for the three and six months ended June 30, 2024, respectively, and $5.0 million and $10.1 million for the three and six months ended June 30, 2023, respectively.

Current wording

(2)Includes depreciation and amortization expense of $2.9 million and $10.2 million for the three and nine months ended September 30, 2024, respectively, and $5.2 million and $15.3 million for the three and nine months ended September 30, 2023, respectively.

Previous wording

Net revenue decreased by $18.9 million, or 26.8%, for the three months ended June 30, 2024 as compared to the same period in 2023. Our sales decrease was primarily driven by a decrease in the number of units sold, partially offset by higher average selling prices within our direct business, our transition to third-party distributors in certain international markets, and retail store closures.

Current wording

Net revenue decreased by $14.2 million, or 24.9%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by a decrease in the number of units sold, partially offset by higher average selling prices within our direct business, our transition to third-party distributors in certain international markets, and retail store closures.

Previous wording

Cost of revenue decreased by $14.8 million, or 36.7%, for the three months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by the decrease in units sold, lower freight and duty costs, and a decrease in inventory write-downs and adjustments.

Current wording

Cost of revenue decreased by $8.4 million, or 26.1%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by the decrease in units sold, lower freight, duty, and warehouse costs, and a decrease in inventory write-downs and adjustments.

Previous wording

Gross profit decreased by $4.1 million, or 13.6%, for the three months ended June 30, 2024 as compared to the same period in 2023. The decrease in gross profit was driven by the decrease in the number of units sold, partially offset by lower freight and duty costs and decreases in inventory write-downs and adjustments.

Current wording

Gross profit decreased by $5.8 million, or 23.4%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease in gross profit was driven by the decrease in the number of units sold, lower freight, duty, and warehouse costs and a decrease in inventory write-downs and adjustments.

Previous wording

Our gross margin increased to 50.5% for the three months ended June 30, 2024 from 42.8% in the same period in 2023, primarily due to lower freight and duty costs per unit and decreases in inventory write-downs and adjustments.

Current wording

Our gross margin increased to 44.4% for the three months ended September 30, 2024 from 43.5% in the same period in 2023, primarily due to lower freight, duty, and warehouse costs per unit and a decrease in inventory write-downs and adjustments.

Previous wording

Selling, general, and administrative expense decreased by $12.7 million, or 27.4%, for the three months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreases in personnel and related expenses, occupancy costs, and stock-based compensation expense.

Current wording

Selling, general, and administrative expense decreased by $12.6 million, or 28.9%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreases in personnel and related expenses, depreciation and amortization expense, stock-based compensation expense, and occupancy costs.

Previous wording

Marketing expense decreased by $0.8 million, or 6.3%, for the three months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreased digital advertising spend for performance marketing.

Current wording

Marketing expense decreased by $0.3 million, or 3.2%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreased digital advertising spend for performance marketing.

Previous wording

Restructuring expense decreased by $0.1 million, or 8.4%, for the three months ended June 30, 2024 as compared to the same period in 2023, which related to the execution of the strategic transformation plan announced in March 2023.

Current wording

Restructuring expense decreased by $1.2 million, or 97.2%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by execution of the strategic transformation plan announced in March 2023.

Previous wording

Interest income increased by $0.4 million, or 22%, for the six months ended June 30, 2024, primarily driven by our short-term investments in money market funds, partially offset by interest expense related to our Credit Agreement.

Current wording

Interest income decreased by $0.4 million, or 33.6%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by a decrease in our short-term investments in money market funds and interest expense related to our Credit Agreement.

Previous wording

Other income (expense) changed by $0.6 million, from a loss of $0.1 million for the three months ended June 30, 2023 to income of $0.6 million for the three months ended June 30, 2024, primarily due to gains on the termination and modification of certain operating leases and the reversal of the impairment of a note receivable associated with our Canadian third-party distributor, partially offset by foreign currency losses.

Current wording

Other income (expense) changed by $0.3 million, from a loss of $0.2 million for the three months ended September 30, 2023 to income of $0.2 million for the three months ended September 30, 2024, primarily due to gains on the termination and modification of certain operating leases, partially offset by foreign currency losses.

Previous wording

Income tax provision increased by $0.3 million, or 100.0%, to $0.6 million compared to $0.3 million for the three months ended March 31, 2024 as compared to the same period in 2023. This was due to the mix of geographic income and associated effective tax rates for the comparative periods.

Current wording

Income tax provision decreased by $0.05 million, or 35.8%, for the three months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily due to the mix of geographic income and associated effective tax rates for the comparative periods.

Previous wording

Net revenue decreased by $33.9 million, or 27.2%, for the six months ended June 30, 2024, as compared to the same period in 2023. Our sales decrease was primarily driven by a decrease in the number of units sold within our direct business, our transition to third-party distributors in certain international markets, and retail store closures.

Current wording

Net revenue decreased by $48.2 million, or 26.5%, for the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by a decrease in the number of units sold, partially offset by higher average selling prices within our direct business, our transition to third-party distributors in certain international markets, and retail store closures.

Previous wording

Cost of revenue decreased by $26.5 million, or 36.3%, for the six months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by the decrease in units sold, lower freight and duty costs, and a decrease in inventory write-downs and adjustments.

Current wording

Cost of revenue decreased by $34.9 million, or 33.2%, for the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by the decrease in units sold, lower freight and duty costs, and a decrease in inventory write-downs and adjustments.

Previous wording

Gross profit decreased by $7.5 million, or 14.3%, for the six months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by the decrease in the number of units sold.

Current wording

Gross profit decreased by $13.3 million, or 17.3%, for the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by the decrease in the number of units sold, lower freight and duty costs, and a decrease in inventory write-downs and adjustments.

Previous wording

Our gross margin increased to 49.0% for the six months ended June 30, 2024 from 41.6% for the same period in 2023, primarily due to lower freight and duty costs per unit and decreases in inventory write-downs and adjustments.

Current wording

Our gross margin increased to 47.5% for the nine months ended September 30, 2024 from 42.2% for the same period in 2023, primarily due to lower freight and duty costs per unit and a decrease in inventory write-downs and adjustments.

Previous wording

Selling, general, and administrative expense decreased by $15.7 million, or 17.7%, for the six months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreases in personnel and related expenses, stock-based compensation, and occupancy costs.

Current wording

Selling, general, and administrative expense decreased by $28.3 million, or 21.3%, for the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreases in personnel and related expenses, stock-based compensation expense, depreciation and amortization expense, and occupancy costs.

Previous wording

Marketing expense decreased by $4.5 million, or 18.8%, for the six months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreased digital advertising spend for performance marketing.

Current wording

Marketing expense decreased by $4.8 million, or 14.1%, for the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreased digital advertising spend for performance marketing.

Previous wording

Restructuring expense decreased by $2.5 million, or 59.0%, for the six months ended June 30, 2024 as compared to the same period in 2023, primarily due to lower fees incurred related to the execution of the strategic transformation plan announced in March 2023.

Current wording

Restructuring expense decreased by $3.7 million, or 67.6%, for the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily due to lower fees incurred related to the execution of the strategic transformation plan announced in March 2023.

Previous wording

Other income (expense) changed by $2.4 million, from expense of $0.1 million for the six months ended June 30, 2023 to income of $2.3 million for the six months ended June 30, 2024, primarily due to gains on the termination and modification of certain operating leases, partially offset by foreign currency losses.

Current wording

Other income (expense) changed by $2.8 million, from expense of $0.3 million for the nine months ended September 30, 2023 to income of $2.5 million for the nine months ended September 30, 2024, primarily due to gains on the termination and modification of certain operating leases, partially offset by foreign currency losses.

Previous wording

Income tax provision increased by $0.3 million, or 58.8%, for the six months ended June 30, 2024 as compared to the same period in 2023. The decrease was primarily due to a change in the mix of geographic income that resulted in differences in the effective tax rates for the comparative period.

Current wording

Income tax provision increased by $0.2 million, or 39.0%, for the nine months ended September 30, 2024 as compared to the same period in 2023. The increase was primarily due to a change in the mix of geographic income that resulted in differences in the effective tax rates for the comparative period.

Previous wording

Adjusted EBITDA loss decreased by $4.6 million and $5.3 million, respectively, for the three and six months ended June 30, 2024 as compared to the same periods in 2023. The decreases were primarily driven by decreased net loss, which was driven primarily by the reductions in operating expenses during the periods.

Current wording

Adjusted EBITDA loss decreased by $2.7 million and $8.1 million, respectively, for the three and nine months ended September 30, 2024 as compared to the same periods in 2023. The decreases were primarily driven by decreased net loss, which was driven primarily by the reductions in operating expenses during the periods.

Previous wording

Adjusted EBITDA margin declined from (25.9)% to (26.6)% for the three months ended June 30, 2024 as compared to the same period in 2023. The changes were primarily driven by the same factors as noted in the adjusted EBITDA discussion above.

Current wording

Adjusted EBITDA margin declined from (33.1)% to (37.8)% for the three months ended September 30, 2024 as compared to the same period in 2023. The change was primarily driven by the same factors as noted in the adjusted EBITDA discussion above.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $87.2 million. Our operations have been funded primarily through cash flows from the sale of our products and net proceeds from sales of equity securities, including our IPO in 2021.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $78.6 million. Our operations have been funded primarily through cash flows from the sale of our products and net proceeds from sales of equity securities, including our IPO in 2021.

Previous wording

During thesix months ended June 30, 2024, net cash used in operating activities was $41.8 million, which consisted of a net loss of$46.5 million, offset by a net change of $(11.2) million in our operating assets and liabilities and non-cash charges of $15.9 million. The change in operating assets and liabilities was primarily due to a decrease of$8.9 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures.

Current wording

During thenine months ended September 30, 2024, net cash used in operating activities was $53.0 million, which consisted of a net loss of$67.6 million, offset by a net change of $(6.9) million in our operating assets and liabilities and non-cash charges of $21.5 million. The change in operating assets and liabilities was primarily due to a decrease of$10.6 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures and an increase of$4.5 million in inventory as a result of higher on-hand inventory, partially offset by an increase of$3.2 million in accounts payable due to timing of payments made and an increase of$2.2 million in accounts receivable due to timing of cash received.

Previous wording

During thesix months ended June 30, 2023, net cash used in operating activities was $20.1 million, which consisted of a net loss of$64.1 million, offset by a net change of $15.5 million in our operating assets and liabilities and non-cash charges of $28.6 million. The change in operating assets and liabilities was primarily due to a decrease of$16.3 million in inventory as a result of lower on-hand inventory and a decrease of$4.6 million in accounts receivable due to timing of cash received, partially offset by a decrease of$8.0 million in accounts payable due to payments made.

Current wording

During thenine months ended September 30, 2023, net cash used in operating activities was $25.5 million, which consisted of a net loss of$95.7 million, offset by a net change of $27.7 million in our operating assets and liabilities and non-cash charges of $40.1 million. The change in operating assets and liabilities was primarily due to a decrease of$23.1 million in inventory as a result of lower on-hand inventory and a decrease of$3.8 million in accounts receivable due to timing of cash received, partially offset by a decrease of$2.8 million in accounts payable due to payments made.