Smartbird, Inc.

Previous wording

Allbirds is a global lifestyle brand that innovates with naturally derived materials to make better footwear and apparel products in a better way, while treading lighter on our planet.

Current wording

Allbirds is a purpose-driven lifestyle brand that innovates with sustainable materials to make better footwear and apparel products in a better way, while treading lighter on our planet.

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 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.

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 digital platform and our physical footprint of 28 stores as of March 31, 2025. In addition to our direct business, we selectively partner with third parties, including distributors and retailers, to sell our products through their channels, which helps us reach more consumers and increase brand awareness.

Previous wording

For the three and nine months ended September 30, 2024 and 2023:

Current wording

For the three months ended March 31, 2025 and 2024:

Previous wording

•We generated net revenue of $43.0 million and $133.9 million for the three and nine months ended September 30, 2024, respectively, as compared to $57.2 million and $182.1 million for the same periods in 2023.

Current wording

•We generated net revenue of $32.1 million for the three months ended March 31, 2025, as compared to $39.3 million for the same period in 2024.

Previous wording

•We generated net loss of $21.2 million and $67.6 million for the three and nine months ended September 30, 2024, respectively, as compared to $31.6 million and $95.7 million for the same periods in 2023.

Current wording

•We generated net loss of $21.9 million for the three months ended March 31, 2025, as compared to $27.3 million for the same period in 2024.

Previous wording

•We generated adjusted EBITDA loss of $16.2 million and $50.9 million for the three and nine months ended September 30, 2024, respectively, as compared to $19.0 million and $58.9 million for the same periods in 2023.

Current wording

•We generated adjusted EBITDA loss of $18.6 million for the three months ended March 31, 2025, as compared to $20.9 million for the same period in 2024.

Previous wording

Ability to Increase Brand Awareness and Drive Efficient Customer Acquisition

Current wording

Ability to Grow Brand Awareness and Drive Efficient Customer Acquisition

Previous wording

In addition to seeking to acquire new customers, we continuously seek ways to engage with our base of existing customers. We aim to grow our closet share within our existing customer base by focusing on and developing our core franchises. We believe we must continue to both innovate with new products and focus on core products in order to drive consumer engagement and increase our closet share. While we continue to do this, we must constantly evaluate and improve our strategy to anticipate current and future consumer preferences and demands. At the same time, it is critical that we maintain our commitment to offering comfortable and sustainable products. In connection with our strategic transformation plan announced in March 2023, we are refocusing our product strategy on our core franchise products. Our growth within our existing customer base will depend in part on our success focusing our product strategy to appeal to our existing customers.

Current wording

In addition to seeking to acquire new customers, we continuously seek ways to engage with our base of existing customers. We aim to grow our closet share within our existing customer base by focusing and developing on our core franchises. We believe we must continue to both innovate with new products and focus on core products in order to drive consumer engagement and increase our closet share. While we continue to do this, we must constantly evaluate and improve our strategy to anticipate current and future consumer preferences and demands. At the same time, it is critical that we maintain our commitment to offering comfortable and sustainable products. Our product strategy is focused on our core franchise products. Our growth within our existing customer base will depend in part on our success focusing our product strategy to appeal to our existing customers.

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 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.

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. In 2024, we closed 15 stores in the United States and 3 stores in Europe, and in the first quarter of 2025 we closed 5 stores in the United States. In 2023 and 2024, we transitioned the operations of international stores to distributor partners in South Korea, Canada, Australasia, Japan, and China. As of December 31, 2024, we do not operate any stores in those geographies. Our remaining stores are located in the United States and the United Kingdom.

Previous 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.

Current wording

1 In the first quarter of 2024, we closed the operations of three stores in the U.S. In the second quarter of 2024, we closed the operations of ten stores in the U.S. In the third quarter of 2024, we closed the operations of one store in the U.S. In the fourth quarter of 2024, we closed the operations of one store in the U.S. In the first quarter of 2025, we closed the operations of five stores in the U.S.

Previous 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.

Current wording

2 In the third quarter of 2023, we transitioned the operations of three international stores to 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

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.

Current wording

However, we continue to monitor and respond to evolving developments regarding recent macroeconomic events including elevated inflation, tariffs, 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.

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 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.

Current wording

We generate net revenue primarily from sales of our footwear and apparel products. We sell products directly through our own digital channels (including our websites, our discontinued mobile app, and marketplace platforms), our leased retail stores, and third-party retailers and distributors. As of March 31, 2025, the majority of our sales are through our direct channels. 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 in 2025 to be in line with 2024, primarily driven by demand for new products in the fourth quarter of the year, offset by the impacts of our international distributor transitions, retail store closures, and sales trends in our direct business in the first three quarters of the year.

Previous wording

Cost of revenue consists primarily of the cost of purchased inventory, inbound and outbound shipping costs, import duties, distribution center and related equipment costs, and inventory write-downs or write-offs. We generally expect our cost of revenue to decrease or increase in absolute dollars in line with net revenue fluctuations.

Current wording

Cost of revenue consists primarily of the cost of purchased inventory, inbound and outbound shipping costs, import duties, distribution center and related equipment costs, and inventory write-downs or write-offs. Shipping costs to receive products from our suppliers are included in the cost of inventory and recognized as cost of revenue upon the sale of products to our customers. We generally expect our cost of revenue to decrease or increase in absolute dollars in line with net revenue fluctuations.

Previous wording

Gross profit represents net revenue less the cost of revenue. Gross margin is gross profit expressed as a percentage of net revenue. Our gross margin may fluctuate from period to period based on a number of factors, including business outcomes, the mix of products we sell in different geographies and channels, price increases, promotional activities, the innovation initiatives we undertake in each product category, cost drivers (including commodity prices, transportation rates, manufacturing costs), and inventory write-downs or write-offs, among other factors. We expect that these factors will result in a stronger gross margin profile in 2024 and beyond.

Current wording

Gross profit represents net revenue less the cost of revenue. Gross margin is gross profit expressed as a percentage of net revenue. Our gross margin may fluctuate from period to period based on a number of factors, including business outcomes, the mix of products we sell in different geographies and channels, price increases, promotional activities, the innovation initiatives we undertake in each product category, cost drivers (including commodity prices, transportation rates, manufacturing costs), and inventory write-downs or write-offs, among other factors. We expect gross margin improvement in 2025.

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, 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.

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, 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 the business.

Previous wording

Marketing expense consists of advertising costs incurred to acquire new customers, retain existing customers, and build our brand awareness. We expect marketing expense as a percentage of net revenue to increase as we prioritize marketing spend to align with our updated product strategy.

Current wording

Marketing expense consists of advertising costs incurred to acquire new customers, retain existing customers, and build our brand awareness. We expect marketing expense to increase in 2025 as we are prioritizing our marketing spend to align with our product strategy.

Previous wording

Restructuring expense consists of professional service fees, severance and other employee-related benefits, and other miscellaneous costs associated with exit and disposal activities. We expect restructuring expense to decrease in 2024 as compared to 2023, as a result of the timing of the execution of our strategic transformation plan.

Current wording

Restructuring expense consists of professional service fees, severance and other employee-related benefits, and other miscellaneous costs associated with exit and disposal activities.

Previous wording

Interest income primarily consists of interest income generated from our cash and cash equivalents, offset by interest expense associated with our credit agreement with JPMorgan Chase Bank, N.A. We expect interest income and expense to fluctuate based on our future bank balances, credit line utilization, and the interest rate environment.

Current wording

Interest income primarily consists of interest income generated from our cash and cash equivalents, offset by interest expense associated with our credit agreement with JPMorgan Chase Bank, N.A, which we refer to as our Credit Agreement. We expect interest income and expense to fluctuate based on our future bank balances, credit line utilization, and the interest rate environment.

Previous 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.

Current wording

Other income 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, New Zealand, and South Korea as of September 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, China, Hong Kong, Canada, New Zealand, Germany, Japan and South Korea as of March 31, 2025.

Previous 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.

Current wording

(1)Includes stock-based compensation expense of $2.3 million for the three months ended March 31, 2025, and $3.3 million for the three months ended March 31, 2024.

Previous 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.

Current wording

(2)Includes depreciation and amortization expense of $1.9 million for the three months ended March 31, 2025, and $4.8 million for the three months ended March 31, 2024.

Previous 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.

Current wording

Net revenue decreased by $7.2 million, or 18.3%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily driven by a decrease in our direct business of $6.9 million, driven by approximately $4.1 million in our retail business, primarily due to store closures. Net revenue was also impacted by our transition to third-party distributors in our international business by approximately $2.8 million. These decreases were partially offset by gift card breakage revenue of $1.9 million, resulting from a change in accounting estimate.

Previous 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.

Current wording

Gross profit decreased by $4.1 million, or 22.0%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease in gross profit was driven by the decreases in net revenue and cost of revenue.

Previous 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.

Current wording

Selling, general, and administrative expense decreased by $14.5 million, or 36.5%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreases in personnel and related expenses of $4.6 million, depreciation and amortization expense of $2.9 million, occupancy costs of $2.7 million, professional services fees of $1.1 million, and stock-based compensation expense of $1.1 million.

Previous 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.

Current wording

Restructuring expense decreased by $0.8 million, or 100.0%, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was driven by completion of the strategic transformation plan in 2024.

Previous 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.

Current wording

Interest income decreased by $0.7 million, or 71.3%, for the three months ended March 31, 2025 as compared to the same period in 2024. 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 $0.3 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.

Current wording

Other income decreased by $1.0 million, or 57.1%, for the three months ended March 31, 2025, primarily due to lower gains on the termination and modification of certain operating leases.

Previous 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.

Current wording

Income tax provision decreased by $0.2 million, or 72.4%, for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to our transition to third-party distributors in certain international markets and the mix of taxable income in foreign jurisdictions that resulted in differences in the effective tax rates.

Previous wording

Adjusted EBITDA is defined as net loss before stock-based compensation expense, including common stock warrant expense, depreciation and amortization expense, impairment expense, restructuring expense (consisting of professional fees, personnel and related expenses, and other related charges resulting from our strategic initiatives), non-cash gains or losses on the sales of businesses relating to our March 2023 initiatives, other income or expense (consisting of consisting of non-cash gains or losses on foreign currency, non-cash gains or losses on sales of property and equipment, and non-cash gains or losses on modifications or terminations of leases), interest income or expense, and income tax provision or benefit.

Current wording

Adjusted EBITDA is defined as net loss before stock-based compensation expense, depreciation and amortization expense, impairment expense, restructuring expense (consisting of professional fees, personnel and related expenses, and other related charges resulting from our strategic initiatives), non-cash gains or losses on the sales of businesses relating to our March 2023 initiatives, other income or expense (consisting of consisting of non-cash gains or losses on foreign currency, non-cash gains or losses on sales of property and equipment, and non-cash gains or losses on modifications or terminations of leases), interest income or expense, and income tax provision or benefit.

Previous 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.

Current wording

Adjusted EBITDA loss decreased by $2.3 million, for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily driven by decreased net loss, which was driven primarily by the reduction in operating expenses during the period.

Previous 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.

Current wording

Adjusted EBITDA margin declined from (53.1)% to (58.1)% for the three months ended March 31, 2025 as compared to the same period in 2024. The change was primarily driven by the same factors as noted in the adjusted EBITDA discussion above.

Previous 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.

Current wording

As of March 31, 2025, we had cash and cash equivalents of $39.1 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

We believe our existing cash and cash equivalent balances, cash flow from operations, and amounts available for borrowing under our Credit Agreement will be sufficient to meet our cash requirements over the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of our existing cash and cash equivalent balances, cash flow from operations, amounts available for borrowing under our Credit Agreement, and issuances of equity securities or debt offerings.

Current wording

We believe our existing cash and cash equivalent balances, cash flow from operations, and amounts available for borrowing under our Credit Agreement (including the extension, amendment, or replacement of the Credit Agreement before it matures on April 17, 2026), will be sufficient to meet our cash requirements over the next 12 months. Our longer-term expected future cash requirements and obligations will necessitate continuing availability of funding from equity securities and debt offerings, and ultimately achieving positive results from operations.

Previous wording

In February 2019, we entered into the Credit Agreement, as subsequently amended in March 2023 pursuant to the First Amendment to Credit Agreement and in April 2023 pursuant to the Second Amendment to Credit Agreement. The Credit Agreement, as amended, is an asset-based loan with a revolving line of credit of up to $50.0 million, subject to a borrowing base formula, and an optional accordion of up to $50.0 million. Interest on borrowings under the Credit Agreement accrue at a variable rate equal to (i) the Term Secured Overnight Financing Rate (“SOFR”), plus (ii) 0.10%, plus (iii) a specified spread of 1.75% or 2.00% dependent on the average quarterly revolver availability, calculated on the last day of each fiscal quarter being greater than 20% of the total revolver commitments or less than or equal to 20% of the total revolver commitments, respectively. The commitment fee under the Credit Agreement is 0.20% per annum on the average daily unused portion of each lender’s commitment. In addition, we are required to pay a fronting fee of 0.125% per annum on the average daily aggregate face amount of issued and outstanding letters of credit. Interest, commitment fees and fronting fees are payable monthly, in arrears.

Current wording

Agreement. The Credit Agreement, as amended, is an asset-based loan with a revolving line of credit of up to $50.0 million, subject to a borrowing base formula, and an optional accordion of up to $50.0 million. Interest on borrowings under the Credit Agreement accrue at a variable rate equal to (i) the Term Secured Overnight Financing Rate (“SOFR”), plus (ii) 0.10%, plus (iii) a specified spread of 1.75% or 2.00% dependent on the average quarterly revolver availability, calculated on the last day of each fiscal quarter being greater than 20% of the total revolver commitments or less than or equal to 20% of the total revolver commitments, respectively. The commitment fee under the Credit Agreement is 0.20% per annum on the average daily unused portion of each lender’s commitment. In addition, we are required to pay a fronting fee of 0.125% per annum on the average daily aggregate face amount of issued and outstanding letters of credit. Interest, commitment fees and fronting fees are payable monthly, in arrears.

Previous 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.

Current wording

During thethree months ended March 31, 2025, net cash used in operating activities was $27.9 million, which consisted of a net loss of$21.9 million, in part driven by a net change of $(9.0) million in our operating assets and liabilities and partially offset by non-cash charges of $3.0 million. The change in operating assets and liabilities was primarily due to a decrease of$10.4 million in accounts payable due to timing of payments made and a decrease of

Previous 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.

Current wording

During thethree months ended March 31, 2024, net cash used in operating activities was $26.2 million, which consisted of a net loss of$27.3 million, offset by a net change of $(9.2) million in our operating assets and liabilities and non-cash charges of $10.3 million. The change in operating assets and liabilities was primarily due to a decrease of$5.8 million for operating lease right of use assets and short-term and long-term lease liabilities as a result of retail store closures and$4.0 million in inventory as a result of higher on-hand inventory.

Previous wording

During thenine months ended September 30, 2024, net cash provided by investing activities was $1.5 million, and consisted primarily of $2.5 millionof proceeds from the sale of our businesses and a decrease of $2.2 million in security deposits related to our closed retail stores, partially offset by $3.1 million cash outflows for the purchases of property and equipment to support the ongoing operations of our corporate development and retail stores.

Current wording

During thethree months ended March 31, 2025, net cash provided by investing activities was $0.2 million, and consisted primarily of $0.4 millionof proceeds from the sale of our businesses and a decrease of $44.0 thousand in security deposits related to our closed retail stores, partially offset by $0.6 million cash outflows for the purchases of property and equipment to support the ongoing operations of our corporate development and retail stores.

Previous wording

Net cash used in investing activities for thenine months ended September 30, 2023 was $8.7 million and consisted primarily of cash outflows for the purchases of property and equipment to support the opening of retail stores.

Current wording

During thethree months ended March 31, 2024, net cash used in investing activities was $0.8 million, and consisted primarily of cash outflows for the purchases of property and equipment to support the ongoing operations of our retail stores, offset by $0.3 millionof proceeds from the sale of our Korean subsidiary in the third quarter of 2023.