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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission File Number: 001-40249
https://cdn.kscope.io/aa5d860f75685c57c3f27bbd568da2e9-tdup-20220930_g1.jpg
ThredUp Inc.
(Exact name of registrant as specified in its charter)

Delaware26-4009181
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
969 Broadway, Suite 200
Oakland, California
94607
(Address of principal executive offices)(Zip Code)

(415) 402-5202
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per shareTDUPThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  
There were 69,960,710 shares of Class A common stock and 30,844,696 shares of Class B common stock outstanding as of November 7, 2022.



TABLE OF CONTENTS

Page Number
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2

Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our future financial performance, including our revenue, cost of revenue and operating expenses and our ability to achieve and maintain future profitability;
the sufficiency of our cash, cash equivalents and capital resources to meet our liquidity needs;
our ability to effectively manage or sustain our growth and to effectively expand our operations;
our strategies, plans, objectives and goals, including our expectations regarding future infrastructure investments as well as restructuring activities;
our ability to attract and retain buyers and sellers and the continued impact of network effects as we scale our platform;
our ability to continue to generate revenue from new Resale-as-a-Service (“RaaS”) offerings as sources of revenue;
trends in our key financial and operating metrics;
our estimated market opportunity;
economic and industry trends, projected growth or trend analysis, including the effects of foreign currency exchange rate fluctuations, inflationary pressures, increased interest rates and changing consumer habits and general global economic uncertainty;
our ability to comply with laws and regulations;
the effect of uncertainties related to the ongoing global COVID-19 pandemic, including its varied social and macroeconomic consequences and recovery therefrom on United States and global economies, our business, results of operations, financial condition, demand for secondhand and resale items, sales cycles and buyer and seller retention;
our ability to remediate our material weakness in our internal control over financial reporting;
our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments; and
the increased expenses associated with being a public company.
You should not rely upon forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2021, Part II, Item 1A, Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and elsewhere in this Quarterly Report on Form 10-Q, as well as in our other filings with the Securities and Exchange Commission (“SEC”). Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
***
3

Table of Contents
Unless otherwise indicated or unless the context requires otherwise, all references in this document to “thredUP”, “the Company”, “we”, “us”, “our”, or similar references are to ThredUp Inc. and its consolidated subsidiaries.
thredUP is one of the world’s largest online resale platforms for women’s and kids’ apparel, shoes and accessories, based primarily on items processed, items sold and the capacity of our distribution centers.
The “estimated retail price” of an item is based on the estimated original retail price of a comparable item of the same quality, construction and material offered elsewhere in new condition. Our estimated original retail prices are set by our team of merchants who periodically monitor market prices for the brands and styles that we offer on our marketplace.
4

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
THREDUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

September 30,
2022
December 31,
2021
(in thousands, except par value amounts)
ASSETS
Current assets:
Cash and cash equivalents$36,713 $84,550 
Marketable securities86,501 121,277 
Accounts receivable, net3,175 4,136 
Inventory, net15,003 9,825 
Other current assets10,126 8,625 
Total current assets151,518 228,413 
Operating lease right-of-use assets46,760 39,340 
Property and equipment, net89,529 55,466 
Goodwill10,645 12,238 
Intangible assets10,242 13,854 
Other assets10,896 11,515 
Total assets$319,590 $360,826 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$8,642 $13,336 
Accrued and other current liabilities53,365 45,253 
Seller payable18,690 19,125 
Operating lease liabilities, current4,931 3,931 
Current portion of long-term debt3,881 7,768 
Total current liabilities89,509 89,413 
Operating lease liabilities, non-current50,623 36,997 
Long-term debt, net of current portion26,859 27,559 
Other non-current liabilities2,904 1,123 
Total liabilities169,895 155,092 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Class A and B common stock, $0.0001 par value; 1,120,000 shares authorized as of September 30, 2022 and December 31, 2021; 100,732 and 98,435 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
10 10 
Additional paid-in capital545,449 522,161 
Accumulated other comprehensive loss(7,636)(1,094)
Accumulated deficit(388,128)(315,343)
Total stockholders’ equity149,695 205,734 
Total liabilities and stockholders’ equity$319,590 $360,826 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

Table of Contents
THREDUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months EndedNine Months Ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
(in thousands, except per share amounts)
Revenue:
Consignment$41,553 $48,071 $137,524 $141,356 
Product26,392 15,203 79,537 37,557 
Total revenue67,945 63,274 217,061 178,913 
Cost of revenue:
Consignment9,087 10,080 29,354 31,599 
Product14,362 7,100 40,335 17,370 
Total cost of revenue23,449 17,180 69,689 48,969 
Gross profit44,496 46,094 147,372 129,944 
Operating expenses:
Operations, product and technology38,702 32,081 121,824 91,455 
Marketing14,752 16,941 51,370 48,344 
Sales, general and administrative15,232 12,569 47,276 34,206 
Total operating expenses68,686 61,591 220,470 174,005 
Operating loss(24,190)(15,497)(73,098)(44,061)
Interest expense103 619 764 1,751 
Other income, net(624)(1,418)(1,108)(604)
Loss before provision for income taxes(23,669)(14,698)(72,754)(45,208)
Provision for income taxes9 17 31 57 
Net loss$(23,678)$(14,715)$(72,785)$(45,265)
Loss per share, basic and diluted$(0.24)$(0.15)$(0.73)$(0.65)
Weighted-average shares used in computing loss per share, basic and diluted100,253 96,349 99,409 70,113 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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THREDUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)

Three Months EndedNine Months Ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
(in thousands)
Net loss$(23,678)$(14,715)$(72,785)$(45,265)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments(2,217) (5,258) 
Unrealized gain (loss) on available-for-sale securities(28)8 (1,284)(28)
Total other comprehensive income (loss)(2,245)8 (6,542)(28)
Total comprehensive loss$(25,923)$(14,707)$(79,327)$(45,293)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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THREDUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(Unaudited)

Convertible Preferred StockCommon Stock
SharesAmountSharesAmountAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity
(in thousands)
Balance as of December 31, 2021
 $ 98,435 $10 $522,161 $(1,094)$(315,343)$205,734 
Exercise of stock options334 — 754 754 
Stock-based compensation3,618 3,618 
Issuance of common stock to settle restricted stock units173 — — 
Other comprehensive loss(1,710)(1,710)
Net loss(20,708)(20,708)
Balance as of March 31, 2022  98,942 10 526,533 (2,804)(336,051)187,688 
Exercise of stock options160 — 874 874 
Stock-based compensation10,353 10,353 
Issuance of common stock to settle restricted stock units685 — — 
Issuance of common stock from employee stock purchase plan166 — — 
Other comprehensive loss(2,587)(2,587)
Net loss(28,399)(28,399)
Balance as of June 30, 2022  99,953 10 537,760 (5,391)(364,450)167,929 
Exercise of stock options139 — 229 229 
Stock-based compensation7,460 7,460 
Issuance of common stock to settle restricted stock units640 — — 
Other comprehensive loss(2,245)(2,245)
Net loss(23,678)(23,678)
Balance as of September 30, 2022 $ 100,732 $10 $545,449 $(7,636)$(388,128)$149,695 

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Convertible Preferred StockCommon Stock
SharesAmountSharesAmountAdditional Paid-in CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’ Equity (Deficit)
(in thousands)
Balance as of December 31, 202065,971 $247,041 12,890 $1 $29,989 $ $(252,167)$(222,177)
Exercise of stock options1,458 — 1,875 1,875 
Stock-based compensation3,498 3,498 
Conversion of preferred stock warrants to Class B common stock warrants1,827 1,827 
Preferred stock conversion to Class B common stock(65,971)(247,041)65,971 7 247,034 247,041 
Sale of Class A common stock upon initial public offering, net of issuance costs13,800 1 175,533 175,534 
Cashless exercise of common stock warrant25 — — 
Net loss(16,171)(16,171)
Balance as of March 31, 2021  94,144 9 459,756  (268,338)191,427 
Exercise of stock options525 — 959 959 
Stock-based compensation2,896 2,896 
Cashless exercise of common stock warrant104 — — 
Issuance of common stock to settle restricted stock units8 — — 
Withholding taxes for the net share settlement of restricted stock units(1)— (29)(29)
Other comprehensive loss(36)(36)
Net loss(14,379)(14,379)
Balance as of June 30, 2021  94,780 9 463,582 (36)(282,717)180,838 
Exercise of stock options534 — 1,023 1,023 
Stock-based compensation2,995 2,995 
Issuance of Class A common stock upon closing of follow-on offering2,000 1 45,524 45,525 
Issuance of common stock to settle restricted stock units14 — — 
Other comprehensive income8 8 
Net loss(14,715)(14,715)
Balance as of September 30, 2021 $ 97,328 $10 $513,124 $(28)$(297,432)$215,674 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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THREDUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended
September 30,
2022
September 30,
2021
(in thousands)
Cash flows from operating activities:
Net loss$(72,785)$(45,265)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization10,217 6,147 
Stock-based compensation expense20,758 9,389 
Reduction in carrying amount of right-of-use assets4,820 3,201 
Other1,409 1,768 
Changes in operating assets and liabilities:
Accounts receivable, net795 (72)
Inventory, net(6,222)(587)
Other current and non-current assets(1,732)(4,720)
Accounts payable(3,000)574 
Accrued and other current liabilities6,918 14,082 
Seller payable(380)4,582 
Operating lease liabilities2,396 (3,235)
Other non-current liabilities(133)4 
Net cash used in operating activities(36,939)(14,132)
Cash flows from investing activities:
Purchases of marketable securities(3,475)(102,715)
Maturities of marketable securities35,830 1,600 
Purchases of property and equipment, net(39,316)(15,207)
Net cash used in investing activities(6,961)(116,322)
Cash flows from financing activities:
Proceeds from debt, net of discount491 4,625 
Repayment of debt(5,333)(2,000)
Proceeds from issuance of Class A common stock, net of underwriting discounts and commissions 226,905 
Payment of costs for the initial public offering and the follow-on offering (4,251)
Proceeds from exercise of stock options and employee stock purchase plan3,878 3,782 
Tax withholding related to vesting of restricted stock units(1,958)(29)
Net cash provided by (used in) financing activities(2,922)229,032 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(918) 
Net change in cash, cash equivalents and restricted cash(47,740)98,578 
Cash, cash equivalents and restricted cash, beginning of period91,840 67,539 
Cash, cash equivalents and restricted cash, end of period$44,100 $166,117 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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THREDUP INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Description of Business
ThredUp Inc. (“thredUP” or the “Company”) was formed as a corporation in the State of Delaware in January 2009. thredUP is a large resale platform that enables consumers to buy and sell primarily secondhand women’s and kid’s apparel, shoes and accessories.
2. Significant Accounting Policies
Basis of Presentation and Use of Estimates
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany account balances and transactions have been eliminated upon consolidation. The unaudited condensed consolidated financial statements were prepared in accordance with the United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Quarterly Report on Form 10‑Q and Article 10 of Regulation S-X. As permitted under those rules, certain footnotes or other financial information can be condensed or omitted.
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and the related disclosures. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, the useful lives of property and equipment and intangibles, allowance for sales returns, allowance for bad debts, breakage on loyalty points and rewards and valuation of inventory, stock-based compensation, right-of-use assets, goodwill and acquired intangibles and income taxes.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 2022, and the results of operations and cash flows for the interim periods presented.
The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 10-K”).
Reclassifications
Certain reclassifications were made to the prior period condensed consolidated statement of cash flows to conform to the current period presentation.
New Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU changes the impairment model for most financial assets, requiring the use of an expected loss model which requires entities to estimate the lifetime expected credit loss on financial assets measured at amortized cost. Such credit losses will be recorded as an allowance to offset the amortized cost of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In addition, credit losses relating to available-for-sale debt securities will now be recorded through an allowance for credit losses rather than as a direct write-down to the security. This standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect that the adoption of this standard will have a material impact on its condensed consolidated financial statements.
Revenue from Loyalty Reward Redemption and Expiration
As of September 30, 2022 and December 31, 2021, the Company had a liability of $3.3 million and $4.0 million, respectively, related to its customer loyalty program, which is included in accrued and other current liabilities within the Company’s condensed consolidated balance sheets. The Company recognized revenue from loyalty reward redemption and expiration of $2.2 million and $3.6 million for the three months ended September 30, 2022 and 2021, respectively, and $7.4 million and $10.3 million for the nine months ended September 30, 2022 and 2021, respectively.
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Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s condensed consolidated balance sheets that sum to the total of the same such amounts shown in the Company’s condensed consolidated statements of cash flows:

September 30,
2022
December 31,
2021
(in thousands)
Cash and cash equivalents$36,713 $84,550 
Restricted cash included in Other current assets1,685 560 
Restricted cash included in Other assets5,702 6,730 
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows$44,100 $91,840 

Fair Value Measurements
The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures, for its financial and non-financial assets and liabilities. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 inputs are unobservable inputs for the asset or liability.
The Company measures certain assets and liabilities at fair value as discussed throughout the notes to its condensed consolidated financial statements. As of both September 30, 2022 and December 31, 2021, the carrying amounts of the Company’s accounts receivable, other current assets, other assets, accounts payable, seller payable and accrued and other current liabilities approximated their estimated fair values due to their relatively short maturities. Management believes the terms of its long-term debt reflect current market conditions for an instrument with similar terms and maturity, and as such, the carrying value of the Company’s long-term debt approximated its fair value as of both September 30, 2022 and December 31, 2021.
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3. Financial Instruments and Fair Value Measurements
The following tables provide information about the Company’s financial instruments that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such values as of September 30, 2022 and December 31, 2021:

September 30, 2022
Level 1Level 2Level 3Total
(in thousands)
Assets:
Cash equivalents:
Money market funds$8,025 $ $ $8,025 
Commercial paper 5,646  5,646 
Total cash equivalents8,025 5,646  13,671 
Marketable securities:
Corporate debt securities32,473   32,473 
U.S. treasury securities29,073   29,073 
U.S. government agency bonds24,955   24,955 
Total marketable securities86,501   86,501 
Total assets at fair value$94,526 $5,646 $ $100,172 

December 31, 2021
Level 1Level 2Level 3Total
(in thousands)
Assets:
Cash equivalents:
Money market funds$41,376 $ $ $41,376 
Commercial paper 12,098  12,098 
Total cash equivalents41,376 12,098  53,474 
Marketable securities:
Corporate debt securities55,921   55,921 
U.S. treasury securities37,190   37,190 
U.S. government agency bonds28,166   28,166 
Total marketable securities121,277   121,277 
Total assets at fair value$162,653 $12,098 $ $174,751 

The following tables summarize the cost, gross unrealized gains, gross unrealized losses and fair value of the marketable securities as of September 30, 2022 and December 31, 2021:

September 30, 2022
Cost or Amortized CostUnrealizedFair Value
GainsLosses
(in thousands)
Corporate debt securities$32,984 $ $(511)$32,473 
U.S. treasury securities29,596  (523)29,073 
U.S. government agency bonds25,553  (598)24,955 
Total$88,133 $ $(1,632)$86,501 

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December 31, 2021
Cost or Amortized CostUnrealizedFair Value
GainsLosses
(in thousands)
Corporate debt securities$56,098 $ $(177)$55,921 
U.S. treasury securities37,286  (96)37,190 
U.S. government agency bonds28,258  (92)28,166 
Total$121,642 $ $(365)$121,277 

As of September 30, 2022 and December 31, 2021, the Company’s cash equivalents approximated their estimated fair value. As such, there are no unrealized gains or losses related to the Company’s cash equivalents.
For the Company’s marketable securities, which were all classified as available-for-sale, the Company utilizes third-party pricing services to obtain fair value. Third-party pricing methodologies incorporate bond terms and conditions, current performance data, proprietary pricing models, real-time quotes from contributing dealers, trade prices and other market data.
The Company’s money market funds, U.S. treasury securities, corporate debt securities and U.S. government agency bonds were valued using Level 1 inputs because they are valued using quoted prices in active markets.
The Company’s commercial paper is valued using Level 2 inputs because it is valued using quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
There were no transfers between levels during the nine months ended September 30, 2022. As of September 30, 2022, of the $86.5 million carrying amount of marketable securities, $83.0 million had a contractual maturity date of less than one year and $3.5 million had a contractual maturity date between one to two years.
4. Property and Equipment, Net
Property and equipment, net consisted of the following:

September 30,
2022
December 31,
2021
(in thousands)
Property and equipment$118,244 $76,028 
Less: accumulated depreciation and amortization(28,715)(20,562)
Property and equipment, net$89,529 $55,466 

Depreciation and amortization expense of property and equipment was $2.9 million and $2.2 million for the three months ended September 30, 2022 and 2021, respectively, and $8.3 million and $6.1 million for the nine months ended September 30, 2022 and 2021, respectively.
5. Goodwill and Other Intangible Assets
Goodwill is primarily attributable to the planned growth in the combined business after the acquisition of Remix Global EAD (“Remix”). Goodwill is reviewed for impairment at least annually, absent any interim indicators of impairment. Goodwill was $10.6 million and $12.2 million as of September 30, 2022 and December 31, 2021, respectively. The decrease in goodwill during the nine months ended September 30, 2022 was due to foreign currency translation adjustments.
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The gross carrying amounts and accumulated amortization of the Company’s intangible assets with determinable lives as of September 30, 2022 and December 31, 2021 were as follows:

September 30, 2022
Amortization PeriodGross Carrying AmountAccumulated AmortizationNet Carrying Amount
(in years)(in thousands)
Customer relationships8$4,420 $(542)$3,878 
Developed technology34,166 (1,362)2,804 
Trademarks93,995 (435)3,560 
Total$12,581 $(2,339)$10,242 

December 31, 2021
Amortization PeriodGross Carrying AmountAccumulated AmortizationNet Carrying Amount
(in years)(in thousands)
Customer relationships8$5,092 $(150)$4,942 
Developed technology34,798 (373)4,425 
Trademarks94,602 (115)4,487 
Total$14,492 $(638)$13,854 

The changes in the gross carrying amounts were due to foreign currency translation adjustments.
Amortization expense related to developed technology, customer relationships, and trademarks is recorded within operations, product and technology; sales, general and administrative; and marketing expense, respectively, within the Company’s condensed consolidated statements of operations. Amortization expense of intangible assets with determinable lives was $0.6 million and zero for the three months ended September 30, 2022 and 2021, respectively, and $1.9 million and zero for the nine months ended September 30, 2022 and 2021, respectively.
6. Balance Sheet Components
Inventories consisted of the following:

September 30,
2022
December 31,
2021
(in thousands)
Raw materials$888 $908 
Work in process592 670 
Finished goods13,523 8,247 
Total$15,003 $9,825 

Accrued and other current liabilities consisted of the following:

September 30,
2022
December 31,
2021
(in thousands)
Gift card and site credit liabilities$18,980 $13,223 
Accrued vendor liabilities8,701 6,031 
Allowance for returns7,326 6,209 
Accrued compensation5,623 6,438 
Deferred revenue6,326 5,878 
Accrued taxes4,440 5,728 
Accrued other1,969 1,746 
Total$53,365 $45,253 
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7. Long-Term Debt
In February 2019, the Company entered into a loan and security agreement (“Term Loan”) with Western Alliance Bank for an aggregate amount of up to $40.0 million to refinance its prior loan and security agreement with Silicon Valley Bank. The Company incurred an immaterial amount of debt issuance costs in connection with the Term Loan. The debt issuance costs are recorded on the Company’s condensed consolidated balance sheet and are being amortized over the life of the Term Loan using the effective-interest method.
The Term Loan was subsequently amended several times, with the most recent amendment taking place in July 2022. As amended, the Term Loan matures on July 14, 2027 and provides for an aggregate borrowing amount of up to $70.0 million, which bears interest at the prime rate published in the Wall Street Journal plus a margin of 1.25%, with a floor of 6.00%. The Company incurred an immaterial amount of debt issuance costs in connection with the amendment. For accounting purposes, pursuant to FASB ASC Topic 470, Debt, this transaction was accounted for as a modification of the Term Loan. The debt issuance costs were recognized in interest expense within the Company’s condensed consolidated statement of operations during the third quarter of 2022.
The Term Loan requires the Company to comply with certain financial covenants, including, among other things, liquidity requirements, performance metrics, and a debt service coverage ratio. The Term Loan also contains affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, redeeming and repurchasing certain other indebtedness, loans and investments, additional indebtedness, liens, mergers, asset sales and transactions with affiliates. In addition, the Term Loan contains customary events of default. As of September 30, 2022 and December 31, 2021, the Company was in compliance with its debt covenants under the Term Loan.
The Term Loan is payable in consecutive monthly installments. Interest is due monthly on amounts outstanding under the Term Loan. The Company is also permitted to make voluntary prepayments without penalty or premium at any time.
As of September 30, 2022 and December 31, 2021, the effective interest rate for borrowings under the Term Loan was 8.22% and 6.65%, respectively.
During the nine months ended September 30, 2022, the Company borrowed an aggregate amount of $0.7 million under the Term Loan and repaid a total of $5.3 million on amounts outstanding under the Term Loan. During the nine months ended September 30, 2021, the Company borrowed an aggregate amount of $5.0 million under the Term Loan and repaid a total of $2.0 million on amounts outstanding under the Term Loan. As of September 30, 2022 and December 31, 2021, the amount outstanding under the Term Loan was $31.3 million and $36.0 million, respectively.
During the three months ended September 30, 2022 and 2021, the Company recognized $0.1 million and $0.6 million, respectively, of interest expense relating to the Term Loan, which included $0.1 million and $0.1 million, respectively, relating to amortization of debt discount and issuance costs. During the nine months ended September 30, 2022 and 2021, the Company recognized $0.8 million and $1.8 million, respectively, of interest expense relating to the Term Loan, which included $0.3 million and $0.3 million, respectively, relating to amortization of debt discount and issuance costs.
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As of September 30, 2022, annual scheduled principal payments of the Term Loan were as follows:

Amount
(in thousands)
2022$1,000 
20234,000 
20244,000 
20254,000 
20264,000 
Thereafter14,333 
Total principal payments31,333 
Less: unamortized debt discount(593)
Less: current portion of long-term debt(3,881)
Non-current portion of long-term debt$26,859 

8. Common Stock
Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible at any time into one share of Class A common stock.
The table below summarizes the Class A common stock and Class B common stock authorized, issued and outstanding as of September 30, 2022 and December 31, 2021:

September 30, 2022
AuthorizedIssued and Outstanding
(in thousands)
Class A common stock1,000,000 69,887 
Class B common stock120,000 30,845 
Total1,120,000 100,732 

December 31, 2021
AuthorizedIssued and Outstanding
(in thousands)
Class A common stock1,000,000 57,779 
Class B common stock120,000 40,656 
Total1,120,000 98,435 

9. Stock-Based Compensation
The Company has stock-based compensation plans, which are more fully described in Note 11, Stock-Based Compensation Plans, to the Consolidated Financial Statements included in the 2021 10-K. During the nine months ended September 30, 2022, the Company granted 10.2 million restricted stock unit awards with a weighted-average grant date fair value of $7.09 per award.
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The following table provides information about stock-based compensation expense by financial statement line item:

Three Months EndedNine Months Ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
(in thousands)
Operations, product and technology$2,480 $1,024 $7,842 $3,358 
Marketing818 341 2,377 1,067 
Sales, general and administrative3,879 1,630 10,539 4,964 
Total stock-based compensation expense$7,177 $2,995 $20,758 $9,389 

10. Commitments and Contingencies
Legal Contingencies
The Company is subject to litigation claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.
Indemnifications
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for limited and customary indemnification obligations. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made.
11. Income Taxes
The quarterly income tax provision reflects an estimate of the corresponding quarter’s state taxes in the United States. The provision for income tax expense for the three and nine months ended September 30, 2022 and 2021 was determined based upon estimates of the Company’s annual effective tax rate for the years ending December 31, 2022 and 2021, respectively. Since the Company is in a full valuation allowance position due to losses incurred since inception, the provision for taxes consists solely of certain state income taxes.
12. Loss Per Share
The following participating securities have been excluded from the computation of diluted loss per share for the periods presented because including them would have been anti-dilutive:

September 30,
2022
September 30,
2021
(in thousands)
Outstanding stock options17,966 20,796 
Restricted stock units8,693 352 
Delayed share issuance related to acquisition