10-Q

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, 2023

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: 001-41850

OVERSTOCK.COM, INC.

(Exact name of registrant as specified in its charter) 

Delaware	87-0634302
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
799 West Coliseum Way
Midvale
Utah	84047
(Address of principal executive offices)	(Zip Code)

 

(801) 947-3100

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	OSTK	NASDAQ Global Market

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 filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller 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 ☒

45,304,946 shares of the registrant's common stock, par value $0.0001, are outstanding on October 27, 2023.

OVERSTOCK.COM, INC.

TABLE OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period Ended September 30, 2023

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Consolidated Balance Sheets	5
	Consolidated Statements of Operations	7
	Consolidated Statements of Comprehensive Loss	8
	Consolidated Statements of Changes in Stockholders' Equity	9
	Consolidated Statements of Cash Flows	11
	Notes to Unaudited Consolidated Financial Statements	12
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
Signature		37

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Special Cautionary Note Regarding Forward-Looking Statements

This Report on Form 10-Q and the documents incorporated herein by reference, and our other public documents and statements our officers and representatives may make from time to time, contain forward-looking statements within the meaning of the federal securities laws. These statements are therefore entitled to the protection of the safe harbor provisions of these laws. You can find many of these statements by looking for words such as "may," "would," "could," "should," "will," "expect," "anticipate," "predict," "project," "potential," "continue," "contemplate," "seek," "assume," "believe," "intend," "plan," "forecast," "goal," "estimate," or other similar expressions which identify these forward-looking statements.

These forward-looking statements involve risks and uncertainties and relate to future events or our future financial or operating performance. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry and business, and on management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to assumptions, risks and uncertainties that are difficult to predict, and that actual results and outcomes may be materially different from the results or outcomes expressed or implied by any of our forward-looking statements for a variety of reasons, including among others:

•a recession, other economic downturns, inflation, high interest rates, our increasing exposure to the U.S. housing market, or other changes in U.S. and global economic conditions or U.S. consumer spending;

•any difficulties we may encounter as a result of our reliance on third-parties that we do not control for the performance of critical functions material to our business, such as carriers, fulfillment partners, and SaaS/IaaS providers;

•any inability to compete successfully against existing or future competitors or to effectively market our business and generate customer traffic;

•any increases in the price of importing into the U.S. or transporting to our customers the types of merchandise we sell or other supply chain challenges that limit our ability to deliver merchandise to our customers in a timely manner;

•any difficulties or other negative consequences we may encounter as a result of our purchase, implementation, integration, or use of the Bed Bath & Beyond brand and intellectual property;

•any difficulties or negative consequences we may encounter as a result of changing our company name, our company stock ticker symbol, or the stock exchange on which our common stock trades;

•any negative impact we may experience as a result of shareholder activism;

•any inability to attract and/or retain key personnel;

•any inability to generate and maintain unpaid natural traffic to our Website;

•any inability to optimize and effectively operate our distribution center, warehouse, and customer service operations;

•any inability to maintain profitability and/or generate positive cash flow from operations;

•any negative impact from our workforce working on a remote, in-office, or hybrid schedule;

•any challenges that would result in the event of any loss of functionality or unavailability of our Website or reduced performance of our transaction systems;

•our exposure to cyber-security risks, risks of data loss and other security breaches;

•the risk that we may be required to recognize losses relating to our equity and debt investments;

•the impacts that we would experience if governmental entities or providers of consumer devices and internet browsers further restrict or regulate the use of "cookie" tracking technologies;

•the impact that any litigation, claims, or regulatory matters could have on our business, financial condition, results of operations, and cash flows;

•negative economic consequences of various global conflicts;

•the possibility that we may be unable to protect our proprietary technology and to obtain trademark protection for our marks;

•current and future claims of intellectual property infringement to which we are subject;

•any difficulties we may encounter as a result of our reliance on third-parties that we do not control for their representations regarding product compliance with various laws and regulations;

•any problems associated with our lack of visibility into, and our lack of influence over, our equity method investments, including our reliance on third-parties to timely and accurately report material events to us;

•any difficulties we may encounter as a result of our evolving business practices, including our exit from non-home categories and our continuing expansion into international markets;

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•any inability of Pelion Venture Partners to successfully manage the Medici Ventures, L.P. fund, in which we are the limited partner, or any other entity in which we also have a direct minority interest;

•the risk that the amount of deferred tax assets we consider realizable could be reduced if estimates of future taxable income during the carryforward period are reduced; and

•the other risks described in this report or in our other public filings.

In evaluating all forward-looking statements, you should specifically consider the risks outlined above and in this report, especially under the headings "Special Cautionary Note Regarding Forward-Looking Statements," "Risk Factors," "Legal Proceedings," and "Management's Discussion and Analysis of Financial Condition and Results of Operations." These factors may cause our actual results and outcomes to differ materially from those contemplated by any forward-looking statement. Although we believe that our expectations reflected in the forward-looking statements are reasonable, we cannot guarantee or offer any assurance of future results, levels of activity, performance or achievements or other future events. Our forward-looking statements contained in this report speak only as of the date of this report and, except as required by law, we undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report or any changes in our expectations or any change in any events, conditions or circumstances on which any of our forward-looking statements are based.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Overstock.com, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except per share data)
	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	325,435	$	371,263
Restricted cash	38		194
Accounts receivable, net of allowance for credit losses of $1,839 and $3,223	19,580		17,693
Inventories	11,519		6,526
Prepaids and other current assets	19,157		18,833
Total current assets	375,729		414,509
Property and equipment, net	109,661		109,906
Deferred tax assets, net	66,449		41,439
Intangible assets, net	25,501		9
Goodwill	6,160		6,160
Equity securities, including securities measured at fair value of $41,091 and $82,823	169,326		296,317
Operating lease right-of-use assets	4,347		7,460
Other long-term assets, net	13,611		2,746
Total assets	$	770,784	$	878,546
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	85,272	$	75,130
Accrued liabilities	72,475		63,614
Unearned revenue	47,450		44,480
Operating lease liabilities, current	3,056		4,410
Other current liabilities	1,138		3,508
Total current liabilities	209,391		191,142
Long-term debt, net	34,232		34,476
Operating lease liabilities, non-current	1,622		3,626
Other long-term liabilities	9,355		3,476
Total liabilities	254,600		232,720
Commitments and contingencies (Note 9)
Continued on the following page See accompanying notes to unaudited consolidated financial statements.

5

Overstock.com, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except per share data)
	September 30, 2023		December 31, 2022
Stockholders' equity:
Preferred stock, $0.0001 par value, authorized shares - 5,000, issued and outstanding - none	—		—
Common stock, $0.0001 par value, authorized shares - 100,000
Issued shares - 51,585 and 51,102
Outstanding shares - 45,305 and 44,951	5		5
Additional paid-in capital	1,002,494		982,718
Accumulated deficit	(320,678)		(173,829)
Accumulated other comprehensive loss	(510)		(522)
Treasury stock at cost - 6,280 and 6,151	(165,127)		(162,546)
Total stockholders' equity	516,184		645,826
Total liabilities and stockholders' equity	$	770,784	$	878,546

See accompanying notes to unaudited consolidated financial statements.

6

Overstock.com, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net revenue	$	373,313	$	460,279	$	1,176,664	$	1,524,438
Cost of goods sold	303,353		352,807		922,619		1,170,649
Gross profit	69,960		107,472		254,045		353,789
Operating expenses
Sales and marketing	57,541		53,520		153,831		169,973
Technology	29,240		29,628		87,492		93,159
General and administrative	24,109		18,665		66,265		61,002
Total operating expenses	110,890		101,813		307,588		324,134
Operating income (loss)	(40,930)		5,659		(53,543)		29,655
Interest income, net	3,201		976		8,819		966
Other expense, net	(38,731)		(46,283)		(126,793)		(48,378)
Loss before income taxes	(76,460)		(39,648)		(171,517)		(17,757)
Provision (benefit) for income taxes	(13,411)		(2,653)		(24,668)		1,968
Net loss	$	(63,049)	$	(36,995)	$	(146,849)	$	(19,725)
Net loss per share of common stock:
Basic	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)
Diluted	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)
Weighted average shares of common stock outstanding:
Basic	45,225		45,708		45,164		43,954
Diluted	45,225		45,708		45,164		43,954

See accompanying notes to unaudited consolidated financial statements.

7

Overstock.com, Inc.

Consolidated Statements of Comprehensive Loss (Unaudited)

(in thousands)

 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net loss	$	(63,049)	$	(36,995)	$	(146,849)	$	(19,725)
Other comprehensive income
Unrealized gain on cash flow hedges, net of expense for taxes of $0, $0, $0, and $0	4		4		12		12
Other comprehensive income	4		4		12		12
Comprehensive loss	$	(63,045)	$	(36,991)	$	(146,837)	$	(19,713)

See accompanying notes to unaudited consolidated financial statements.

8

Overstock.com, Inc. Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (in thousands)
	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Equity attributable to stockholders of Overstock.com, Inc.
Shares of common stock issued
Balance at beginning of period	51,455		51,026		51,102		46,625
Common stock issued upon vesting of restricted stock	80		3		365		264
Common stock issued for ESPP purchases	50		42		118		84
Conversion of preferred stock	—		—		—		4,098
Balance at end of period	51,585		51,071		51,585		51,071
Shares of treasury stock
Balance at beginning of period	6,253		5,331		6,151		3,602
Repurchases of common stock	—		—		—		1,652
Tax withholding upon vesting of employee stock awards	27		—		129		77
Balance at end of period	6,280		5,331		6,280		5,331
Total shares of common stock outstanding	45,305		45,740		45,305		45,740
Common stock
Balance at beginning of period	$	5	$	5	$	5	$	4
Conversion and elimination of preferred stock	—		—		—		1
Balance at end of period	$	5	$	5	$	5	$	5
Shares of Series A-1 preferred stock issued
Balance at beginning of period	—		—		—		4,204
Conversion and elimination of preferred stock	—		—		—		(4,204)
Balance at end of period	—		—		—		—
Shares of treasury stock
Balance at beginning of period	—		—		—		—
Repurchases of shares	—		—		—		7
Conversion and elimination of preferred stock	—		—		—		(7)
Balance at end of period	—		—		—		—
Total shares of Series A-1 preferred stock outstanding	—		—		—		—
Shares of Series B preferred stock issued and outstanding
Balance at beginning of period	—		—		—		357
Conversion and elimination of preferred stock	—		—		—		(357)
Balance at end of period	—		—		—		—
Preferred stock	$	—	$	—	$	—	$	—
Continued on the following page See accompanying notes to unaudited consolidated financial statements.

9

Overstock.com, Inc. Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (in thousands)
	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Additional paid-in capital
Balance at beginning of period	$	995,904	$	972,845	$	982,718	$	960,544
Stock-based compensation to employees and directors	5,798		4,056		17,863		13,390
Common stock issued for ESPP purchases	792		889		1,913		2,779
Conversion and elimination of preferred stock	—		—		—		1,043
Other	—		—		—		34
Balance at end of period	$	1,002,494	$	977,790	$	1,002,494	$	977,790
Accumulated deficit
Balance at beginning of period	$	(257,629)	$	(121,323)	$	(173,829)	$	(136,590)
Net loss	(63,049)		(36,995)		(146,849)		(19,725)
Dividend issued upon conversion and elimination of preferred stock	—		—		—		(1,697)
Conversion and elimination of preferred stock	—		—		—		(306)
Balance at end of period	$	(320,678)	$	(158,318)	$	(320,678)	$	(158,318)
Accumulated other comprehensive loss
Balance at beginning of period	$	(514)	$	(529)	$	(522)	$	(537)
Net other comprehensive income	4		4		12		12
Balance at end of period	$	(510)	$	(525)	$	(510)	$	(525)
Treasury stock
Balance at beginning of period	$	(164,600)	$	(142,288)	$	(162,546)	$	(79,035)
Repurchases of common and Series A-1 preferred stock	—		—		—		(60,077)
Tax withholding upon vesting of employee stock awards	(527)		(19)		(2,581)		(3,501)
Conversion and elimination of preferred stock	—		—		—		306
Balance at end of period	$	(165,127)	$	(142,307)	$	(165,127)	$	(142,307)
Total stockholders' equity	$	516,184	$	676,645	$	516,184	$	676,645

See accompanying notes to unaudited consolidated financial statements.

10

Overstock.com, Inc. Consolidated Statements of Cash Flows (Unaudited) (in thousands)
	Nine months ended September 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(146,849)	$	(19,725)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	14,821		12,480
Non-cash operating lease cost	3,858		4,138
Stock-based compensation to employees and directors	17,863		13,390
Increase in deferred tax assets, net	(25,010)		(691)
Loss from equity method securities	126,966		49,227
Other non-cash adjustments	(532)		97
Changes in operating assets and liabilities:
Accounts receivable, net	(1,887)		745
Inventories	(4,993)		(933)
Prepaids and other current assets	490		1,991
Other long-term assets, net	(1,195)		(1,004)
Accounts payable	11,749		(17,360)
Accrued liabilities	9,171		(11,633)
Unearned revenue	2,970		(8,335)
Operating lease liabilities	(4,170)		(4,285)
Other long-term liabilities	5,879		(506)
Net cash provided by operating activities	9,131		17,596
Cash flows from investing activities:
Disbursement for notes receivable	(10,000)		—
Purchase of intangible assets	(25,782)		—
Purchase of equity securities	—		(18,920)
Capital distribution from investment	4		1,224
Expenditures for property and equipment	(16,543)		(9,724)
Other investing activities, net	562		(584)
Net cash used in investing activities	(51,759)		(28,004)
Cash flows from financing activities:
Repurchase of shares	—		(60,077)
Payments of taxes withheld upon vesting of employee stock awards	(2,581)		(3,501)
Other financing activities, net	(775)		(1,646)
Net cash used in financing activities	(3,356)		(65,224)
Net decrease in cash, cash equivalents, and restricted cash	(45,984)		(75,632)
Cash, cash equivalents, and restricted cash, beginning of period	371,457		503,366
Cash, cash equivalents, and restricted cash, end of period	$	325,473	$	427,734

See accompanying notes to unaudited consolidated financial statements.

11

Overstock.com, Inc.

Notes to Unaudited Consolidated Financial Statements

1. DESCRIPTION OF BUSINESS

Overstock.com, Inc. is a technology-focused innovator based in Midvale, Utah and owner of the Bed Bath & Beyond brand and other intellectual property related to the brand. Bed Bath & Beyond is an online home furnishings and furniture retailer in the United States and Canada. Our online shopping site sells a broad range of new home products at low prices, including furniture, décor, area rugs, bedding and bath, home improvement, and more. Our online shopping site features millions of products that tens of millions of customers visit each month.

As used herein, "Overstock," "the Company," "we," "our" and similar terms include Overstock.com, Inc. and its controlled subsidiaries, unless the context indicates otherwise. As used herein, the term "Website" refers to the Company's online shopping sites located at www.bedbathandbeyond.com, www.bedbathandbeyond.ca, www.overstockgovernment.com, and the Company's mobile app.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with our audited annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes to our significant accounting policies disclosed in Note 2—Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2022.

The accompanying unaudited consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and reflect all adjustments, consisting only of normal recurring adjustments, which are, in our opinion, necessary for a fair presentation of results for the interim periods presented. All intercompany account balances and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the full fiscal year, due to seasonality and other factors.

Use of estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in our consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, loyalty program reward point and gift card breakage, sales returns, inventory valuation, asset useful lives, equity and debt securities valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities, and contingencies. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, our accounting of these estimates may change from period to period. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.

Available-for-sale debt securities

During the nine months ended September 30, 2023, we invested $10.0 million in GrainChain, Inc. in the form of a convertible promissory note (the "Note"). The Note bears interest at an annual interest rate of 5% and accrued interest is recorded in Interest income, net in our consolidated statements of operations. The Note has a maturity date of January 3, 2025 at which time the outstanding principal and any unpaid accrued interest will automatically convert into shares of a newly created series of preferred stock issued by GrainChain, Inc. unless converted earlier under limited circumstances. The fair value of the Note, including accrued interest, was $10.4 million at September 30, 2023, which is included in Other long-term assets, net on our consolidated balance sheets.

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Based on the nature of our indirect ownership interests in GrainChain, Inc. through Medici Ventures, L.P. and the extent of our contributed capital, we held a variable interest in GrainChain, Inc., which meets the definition of a variable interest entity; however, we are not the primary beneficiary of this entity for purposes of consolidation as we do not have the power (either explicit or implicit), through voting rights or otherwise, to direct the activities of GrainChain, Inc. that most significantly impact its economic performance. Our maximum exposure to loss in this variable interest entity totaled $27.8 million as of September 30, 2023, representing our direct and indirect interest in GrainChain, Inc.

Intangible assets other than goodwill

We capitalize and amortize intangible assets other than goodwill over their estimated useful lives unless such lives are indefinite. Intangible assets other than goodwill acquired separately from third parties are capitalized at cost, including any related direct acquisition costs, while such assets acquired as part of a business combination are capitalized at their acquisition-date fair value. Indefinite-lived intangible assets are tested for impairment annually or more frequently when events or circumstances indicate that the carrying value more likely than not exceeds its fair value. In addition, we routinely evaluate the remaining useful life of intangible assets not being amortized to determine whether events or circumstances continue to support an indefinite useful life, including any legal, regulatory, contractual, competitive, economic, or other factors that may limit their useful lives. Definite lived intangible assets are amortized using the straight-line method of amortization over their useful lives, with the exception of certain intangibles (such as acquired customer lists) which are amortized using an accelerated method of amortization based on estimated customer attrition rates. These definite lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

3. FAIR VALUE MEASUREMENT

The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs (in thousands): 

	Fair Value Measurements at September 30, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents—Money market funds	$	264,576	$	264,576	$	—	$	—
Equity securities, at fair value	41,091		15		—		41,076
Available-for-sale debt securities (1)	10,358		—		—		10,358
Trading securities held in a "rabbi trust" (1)	459		459		—		—
Total assets	$	316,484	$	265,050	$	—	$	51,434
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	475	$	475	$	—	$	—
Total liabilities	$	475	$	475	$	—	$	—

 

	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents—Money market funds	$	252,650	$	252,650	$	—	$	—
Equity securities, at fair value	82,823		36		—		82,787
Trading securities held in a "rabbi trust" (1)	399		399		—		—
Total assets	$	335,872	$	253,085	$	—	$	82,787
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	396	$	396	$	—	$	—
Total liabilities	$	396	$	396	$	—	$	—

___________________________________________

(1)    Included in Prepaids and other current assets and Other long-term assets, net in the consolidated balance sheets.

(2)     Included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

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The following table provides activity for our Level 3 investments (in thousands):

	Amount
Level 3 investments at December 31, 2021	$	102,355
Increase due to purchases of Level 3 investments	18,920
Decrease in fair value of Level 3 investments	(38,488)
Level 3 investments at December 31, 2022	82,787
Increase due to purchases of Level 3 investments	10,000
Decrease in fair value of Level 3 investments	(41,711)
Accrued interest on Level 3 investments	358
Level 3 investments at September 30, 2023	$	51,434

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Computer hardware and software, including internal-use software and website development	$	246,875	$	240,148
Building	69,356		69,350
Land	12,781		12,781
Furniture and equipment	10,907		12,642
Building machinery and equipment	9,828		9,791
Land improvements	7,060		7,060
Leasehold improvements	1,749		2,904
	358,556		354,676
Less: accumulated depreciation	(248,895)		(244,770)
Total property and equipment, net	$	109,661	$	109,906

Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Capitalized internal-use software and website development	$	3,069	$	1,714	$	9,350	$	5,826
Depreciation of internal-use software and website development	1,217		1,684		5,932		4,965

Depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	170	$	171	$	610	$	509
Technology	2,940		2,997		10,930		9,143
General and administrative	928		953		2,991		2,785
Total depreciation	$	4,038	$	4,121	$	14,531	$	12,437

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5. INTANGIBLE ASSETS, NET

On June 12, 2023, we entered into an Asset Purchase Agreement with Bed Bath & Beyond Inc. ("BBBY"), and certain subsidiaries, to acquire certain intellectual property related to the Bed Bath & Beyond banner from BBBY. On June 27, 2023, under a Bankruptcy Court supervised process, the U.S. Bankruptcy Court for the District of New Jersey approved the sale of the assets to the Company and on June 28, 2023, BBBY delivered the intellectual property assets via an Intellectual Property Assignment Agreement. The total purchase price, inclusive of direct acquisition-related expenses totaled $25.6 million which has been allocated to two major asset categories consisting of $21.8 million for trade names with an indefinite useful life and $3.8 million for customers lists with an estimated useful life of five years.

Intangible assets, net consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Intangible assets subject to amortization, gross (1)	$	5,331	$	1,552
Less: accumulated amortization of intangible assets	(1,833)		(1,543)
Intangible assets subject to amortization, net	3,498		9
Intangible assets not subject to amortization	22,003		—
Total intangible assets, net	$	25,501	$	9

___________________________________________

(1)    At September 30, 2023, the weighted average remaining useful life for intangible assets subject to amortization, gross was 4.8 years.

6. EQUITY SECURITIES

Equity securities consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Equity securities accounted for under the equity method under ASC 323	$	128,235	$	213,494
Equity securities accounted for under the equity method under the fair value option	41,076		82,787
Equity securities under ASC 321	15		36
Total equity securities	$	169,326	$	296,317

Our equity securities accounted for under the equity method under ASC 323 include equity securities in which we can exercise significant influence, but not control, over these entities through holding more than a 20% voting interest in the entity.

The following table includes our equity securities accounted for under the equity method and related ownership interest as of September 30, 2023:

	Ownership interest
Medici Ventures, L.P.	99%
tZERO Group, Inc.	28%
SpeedRoute, LLC	49%

The carrying amount of our equity method securities was $169.3 million at September 30, 2023, which is included in Equity securities on our consolidated balance sheets, of which $41.1 million is valued under the fair value option (tZERO and SpeedRoute). For our investments in Medici Ventures, tZERO, and SpeedRoute there is no difference in the carrying amount of the assets and liabilities and our maximum exposure to loss, and there is no difference between the carrying amount of our investment in Medici Ventures and the amount of underlying equity we have in the entity's net assets.

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The following table summarizes the net loss recognized on equity method securities recorded in Other expense, net in our consolidated statements of operations (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net loss recognized on our proportionate share of the net assets of our equity method securities	$	(41,837)	$	(17,231)	$	(85,255)	$	(20,979)
Increase (decrease) in fair value of equity method securities held under fair value option	2,691		(29,413)		(41,711)		(28,248)

Regulation S-X Rule 10-01(b)(1)

In accordance with Rule 10-01(b)(1) of Regulation S-X, which applies to interim reports on Form 10-Q, the Company must determine if its equity method investees are considered "significant subsidiaries". Summarized income statement information of an equity method investee is required in an interim report if the significance criteria are met as defined under SEC guidance.

The following is the unaudited summarized financial information for those equity method securities that met the significance criteria for the period ended September 30, 2023, presented on a quarterly lag, (in thousands):

	Nine months ended September 30,
	2023		2022
Results of Operations
Revenues	$	1,373	$	2,070
Pre-tax loss	(15,681)		(23,151)
Net loss	(15,882)		(22,913)

7. BORROWINGS

In March 2020, we entered into two loan agreements. The loan agreements provide a $34.5 million Senior Note, carrying interest at an annual rate of 4.242%, and a $13.0 million Mezzanine Note, carrying interest at an annual rate of 5.002%. The loans carry a blended annual interest rate of 4.45%. The Senior Note is for a 10-year term (stated maturity date is March 6, 2030) and requires interest only payments, with the principal amount and any then unpaid interest due and payable at the end of the 10-year term. The Mezzanine Note has a stated 10-year term, though the agreement requires principal and interest payments monthly over approximately a 46-month payment period. Our debt issuance costs and debt discount are amortized using the straight-line basis which approximates the effective interest method.

As of September 30, 2023, the total outstanding debt on these loans was $35.3 million, net of $331,000 in capitalized debt issuance costs, and the total amount of the current portion of these loans included in Other current liabilities on our consolidated balance sheets was $1.1 million.

Both loans include certain financial and non-financial covenants and are secured by our corporate headquarters and the related land and rank senior to stockholders. The financial covenants require that Overstock maintain a net worth in excess of $30 million and minimum liquid assets of $3 million for so long as the Mezzanine Note is outstanding and is reduced to maintaining a net worth in excess of $15 million and minimum liquid assets of $1 million for the remainder of the term that the Senior Note is outstanding. We are in compliance with our debt covenants and continue to monitor our ongoing compliance with our debt covenants.

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8. LEASES

We have operating leases for warehouses, office space, and data centers. Our leases have remaining lease terms of one year to four years, some of which may include options to extend the leases perpetually, and some of which may include options to terminate the leases within one year.

The components of lease expenses were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	1,344	$	1,507	$	4,242	$	4,585
Variable lease cost	370		291		1,117		1,053

The following table provides a summary of other information related to leases (in thousands):

	Nine months ended September 30,
	2023		2022
Cash payments included in operating cash flows from lease arrangements	$	4,475	$	4,776
Right-of-use assets obtained in exchange for new operating lease liabilities	836		344

The following table provides supplemental balance sheet information related to leases:

	September 30, 2023		December 31, 2022
Weighted-average remaining lease term—operating leases	1.67 years		2.04 years
Weighted-average discount rate—operating leases	7	%	7	%

Maturity of lease liabilities under our non-cancellable operating leases as of September 30, 2023, are as follows (in thousands):

Payments due by period	Amount
2023 (Remainder)	$	1,030
2024	2,987
2025	689
2026	250
2027	83
Thereafter	—
Total lease payments	5,039
Less interest	361
Present value of lease liabilities	$	4,678

 

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9. COMMITMENTS AND CONTINGENCIES

Legal proceedings and contingencies

From time to time, we are involved in litigation concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website. In connection with such litigation, we have been in the past and we may be in the future subject to significant damages. In some instances, other parties may have contractual indemnification obligations to us. However, such contractual obligations may prove unenforceable or non-collectible, and if we cannot enforce or collect on indemnification obligations, we may bear the full responsibility for damages, fees, and costs resulting from such litigation. We may also be subject to penalties and equitable remedies that could force us to alter important business practices. Such litigation could be costly and time consuming and could divert or distract our management and key personnel from our business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect our business, results of operations, financial position, or cash flows. The nature of the loss contingencies relating to claims that have been asserted against us are described below.

As previously disclosed, in October 2019, we received a subpoena from the SEC requiring us to produce documents and other information related to the Series A-1 Preferred stock dividend we announced to stockholders in June 2019 and requesting copies of 10b5-1 plans entered into by certain officers and directors. In December 2019, we received a subpoena from the SEC requesting our insider trading policies and certain employment and consulting agreements. We also received requests from the SEC for our communications with our former Chief Executive Officer and Director, Patrick Byrne, and the matters referenced in the December 2019 subpoenas. In January 2021, we received a subpoena from the SEC requesting information regarding our retail guidance in 2019 and certain communications with current and former executives, board members, and investors. We continue to cooperate with the SEC on these matters.

On September 27, 2019, a purported securities class action lawsuit was filed against us and our former Chief Executive Officer and former Chief Financial Officer in the United States District Court of Utah, alleging violations under Section 10(b), Rule 10b-5, Section 20(a), and Section 20A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). On October 8, 2019, October 17, 2019, October 31, 2019, and November 20, 2019, four similar lawsuits were filed in the same court also naming us and the above referenced former executives as defendants, bringing similar claims under the Exchange Act, and seeking similar relief. These cases were consolidated into a single lawsuit in December 2019. The Court appointed The Mangrove Partners Master Fund Ltd. as lead plaintiff in January 2020. In March 2020, an amended consolidated complaint was filed against us, our President, our former Chief Executive Officer, and our former Chief Financial Officer. We filed a motion to dismiss and, on September 28, 2020, the court granted our motion and entered judgment in our favor. The plaintiffs filed a motion to amend their complaint on October 23, 2020. The United States District Court of Utah granted the plaintiffs' motion to amend their complaint on January 6, 2021. The plaintiffs filed their amended complaint on January 11, 2021. We filed a motion to dismiss plaintiffs' amended complaint, and on September 20, 2021, the court granted our motion and entered judgment in our favor. On October 18, 2021, the plaintiffs filed a Notice of Appeal, appealing the ruling of the district court to the United States Court of Appeals for the Tenth Circuit. We are awaiting a ruling from the Tenth Circuit that heard oral argument on the appeal on February 9, 2023. No estimates of the possible losses or range of losses can be made at this time. We intend to continue to vigorously defend this consolidated action.

On November 22, 2019, a shareholder derivative suit was filed against us and certain past and present directors and officers of ours in the United States District Court for the District of Delaware, with allegations that include: (i) breach of fiduciary duties, (ii) unjust enrichment, (iii) insider selling and misappropriation of the Company's information, and (iv) contribution under Sections 10(b) and 21D of the Exchange Act. On December 17, 2019, a similar lawsuit was filed in the same court, naming the same defendants, bringing similar claims, and seeking similar relief. These cases were consolidated into a single lawsuit in January 2020. In March 2020, the court entered a stay on litigation, pending the outcome of the securities class action motion to dismiss. The case remains stayed pending the outcome of the plaintiffs' appeal to the Tenth Circuit in the securities class action. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend these actions.

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On April 23, 2020, a putative class action lawsuit was filed against us in the Circuit Court of the County of St. Louis, State of Missouri, alleging that we over-collected taxes on products sold into the state of Missouri. We removed the case to United States District Court, Eastern District of Missouri on May 22, 2020, and on February 9, 2021, the case against us was dismissed. On March 1, 2021, a putative class action lawsuit was filed against us in the Circuit Court of the County of St. Louis, State of Missouri, alleging similar allegations to the April 23, 2020 putative class action lawsuit that was dismissed, that we over-collected taxes on products sold into the state of Missouri. We filed a motion to compel arbitration, which was denied on October 13, 2021. We filed a motion to dismiss, which was denied on March 16, 2022. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend this action.

We establish liabilities when a particular contingency is probable and estimable. At September 30, 2023 and December 31, 2022, our established liabilities were not material.

10. INDEMNIFICATIONS AND GUARANTEES

During our normal course of business, we have made certain indemnities, commitments, and guarantees under which we may be required to make payments in relation to certain transactions. These indemnities include, but are not limited to, indemnities we entered into in favor of Loan Core Capital Funding Corporation LLC under our building loan agreements, various lessors in connection with facility leases for certain claims arising from such facility or lease, the environmental indemnity we entered into in favor of the lenders under our prior loan agreements, customary indemnification arrangements in underwriting agreements and similar agreements, and indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments, and guarantees varies, and in certain cases, is indefinite. In addition, the majority of these indemnities, commitments, and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. As such, we are unable to estimate with any reasonableness our potential exposure under these items. We have not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets. We do, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is both probable and reasonably estimable.

11. STOCKHOLDERS' EQUITY

Common stock

Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends declared by the Board of Directors out of funds legally available, subject to prior rights of holders of all classes of stock outstanding having priority rights as to dividends.

Preferred stock conversion

Following the June 10, 2022 conversion of all outstanding Series A-1 and Series B preferred stock into shares of our common stock, the Company eliminated the Series A-1 and Series B preferred stock class by filing Certificates of Elimination with the Delaware Secretary of State.

JonesTrading Sales Agreement

Our "at the market" sales agreement with JonesTrading Institutional Services LLC and D.A. Davidson & Co. remains active; however, the authorization from our Board of Directors to sell shares of our common stock pursuant to the "at the market" sales program has expired. During the nine months ended September 30, 2023 and 2022, we did not sell any shares of our common stock pursuant to the "at the market" sales program.

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Stock Repurchase Program

During the three and nine months ended September 30, 2023, we did not repurchase any shares of our common stock under our stock repurchase program. During the three months ended September 30, 2022, we did not repurchase any shares of our common stock under our stock repurchase program. During the nine months ended September 30, 2022, we repurchased $59.8 million of our common stock and $306,000 of our Series A-1 preferred stock under the stock repurchase program at average prices of $36.16 and $42.16 per share, respectively. During the nine months ended September 30, 2022, we retired 7,244 shares of our Series A-1 preferred stock treasury stock which had been previously repurchased under the stock repurchase program. The retirement increased Accumulated deficit by $306,000. As of September 30, 2023, we had $19.9 million available for future share repurchases under our current repurchase authorization through December 31, 2023.

12. STOCK-BASED AWARDS

Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	11	$	32	$	41	$	99
Sales and marketing	249		5		677		595
Technology	2,286		1,735		7,317		5,517
General and administrative	3,252		2,284		9,828		7,179
Total stock-based compensation	$	5,798	$	4,056	$	17,863	$	13,390

Overstock restricted stock awards

The Overstock.com, Inc. Amended and Restated 2005 Equity Incentive Plan provides for the grant of restricted stock units to employees and directors of the Company and other types of equity awards of the Company. These restricted stock awards generally vest over three years at 33.3% at the end of the first year, 33.3% at the end of the second year and 33.4% at the end of the third year, subject to the recipient's continuing service to us.

The following table summarizes restricted stock award activity (in thousands, except per share data):

	Nine months ended September 30, 2023
	Units	Weighted Average Grant Date Fair Value
Outstanding—beginning of year	781	$	50.17
Granted at fair value	1,078	21.01
Vested	(365)	40.56
Forfeited	(128)	36.26
Outstanding—end of period	1,366	$	40.36

Employee Stock Purchase Plan

 Purchases under the Overstock.com, Inc. 2021 Employee Stock Purchase Plan (the "ESPP") during the nine months ended September 30, 2023 and 2022 were 117,687 shares and 83,570 shares, respectively, at an average purchase price per share of $16.25 and $35.41, respectively. At September 30, 2023, approximately 2.8 million shares of common stock remained available under the ESPP.

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Stock-based compensation related to the ESPP is included in the stock-based compensation expense table above combined with the expense associated with our restricted stock units. Stock-based compensation related to the ESPP was $437,000 and $576,000 for the three months ended September 30, 2023 and 2022, respectively, and $1.5 million and $1.8 million for the nine months ended September 30, 2023 and 2022, respectively.

13. REVENUE AND CONTRACT LIABILITY

Unearned Revenue

The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands):

	Amount
Unearned revenue at December 31, 2021	$	59,387
Increase due to deferral of revenue at period end, net	32,993
Decrease due to beginning contract liabilities recognized as revenue	(47,900)
Unearned revenue at December 31, 2022	44,480
Increase due to deferral of revenue at period end, net	31,682
Decrease due to beginning contract liabilities recognized as revenue	(28,712)
Unearned revenue at September 30, 2023	$	47,450

Our total unearned revenue related to outstanding loyalty program rewards was $11.3 million and $10.9 million at September 30, 2023 and December 31, 2022, respectively. Breakage income related to loyalty program rewards and gift cards is recognized in Net revenue in our consolidated statements of operations. Breakage included in revenue was $948,000 and $1.1 million for the three months ended September 30, 2023 and 2022, respectively, and $2.8 million and $3.3 million for the nine months ended September 30, 2023 and 2022, respectively. The timing of revenue recognition of these reward dollars is driven by actual customer activities, such as redemptions and expirations. At September 30, 2023, we had an additional $5.8 million of unearned contract revenue classified within Other long-term liabilities on our consolidated balance sheets.

Sales returns allowance

The following table provides additions to and deductions from the sales returns allowance, which is included in our Accrued liabilities balance in our consolidated balance sheets (in thousands):

	Amount
Allowance for returns at December 31, 2021	$	13,923
Additions to the allowance	161,492
Deductions from the allowance	(165,193)
Allowance for returns at December 31, 2022	10,222
Additions to the allowance	94,331
Deductions from the allowance	(96,231)
Allowance for returns at September 30, 2023	$	8,322

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14. NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(63,049)	$	(36,995)	$	(146,849)	$	(19,725)
Less: Preferred stock dividends—issued	—		—		—		1,697
Undistributed loss	(63,049)		(36,995)		(146,849)		(21,422)
Less: Undistributed loss allocated to participating securities	—		—		—		(1,227)
Net loss attributable to common stockholders	$	(63,049)	$	(36,995)	$	(146,849)	$	(20,195)
Denominator:
Weighted average shares of common stock outstanding—basic	45,225		45,708		45,164		43,954
Effect of dilutive securities:
Restricted stock awards	—		—		—		—
Weighted average shares of common stock outstanding—diluted	45,225		45,708		45,164		43,954
Net loss per share of common stock:
Basic	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)
Diluted	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)

The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Restricted stock units	1,366	833	1,366	833
Employee stock purchase plan	170	95	170	95

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides information that we believe to be relevant to an understanding of our consolidated financial condition and results of operations. The statements in this section regarding industry outlook, our expectations regarding the performance of our business and any other non-historical statements are forward-looking statements. Our actual results and outcomes may differ materially from those contained in or implied by any forward-looking statements contained herein. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in "Special Cautionary Note Regarding Forward Looking Statements" and in Part II, Item 1A, "Risk Factors" included in this Quarterly Report on Form 10-Q. You should read the following discussion together with our consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and with the sections entitled "Special Cautionary Note Regarding Forward-Looking Statements," Part I, Item 1A, "Risk Factors," and our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022.

We are a technology-focused innovator and owner of the Bed Bath & Beyond brand and other intellectual property related to the brand. Bed Bath & Beyond is an online home furnishings and furniture retailer in the United States and Canada. As used herein, "Overstock," "the Company," "we," "our" and similar terms include Overstock.com, Inc. and our controlled subsidiaries, unless the context indicates otherwise.

Overview

We provide furniture and home furnishings to assist consumers in "Making Dream Homes Come True," particularly for our target customers—consumers who seek support throughout the shopping journey to find quality, stylish furniture and home furnishings at competitive prices, and who want a broad range of products to meet their budget requirements. We believe that the furniture and home furnishings market, which is highly fragmented and has traditionally been served by brick-and-mortar stores, will continue transitioning to online sales as consumers become increasingly comfortable shopping online for goods in this product category. We continually update and augment our product assortment to meet the evolving preferences of our customers and current trends. Our products include furniture, décor, area rugs, bedding and bath, home improvement, and more. We sell our products and services primarily through our internet websites located at www.bedbathandbeyond.com, www.bedbathandbeyond.ca, and www.overstockgovernment.com (referred to collectively as the "Website") and through our mobile app. Nearly all of our retail sales through our Website and mobile app were from transactions in which we fulfilled orders through our network of manufacturers, distributors and other suppliers ("partners"). Our use of the term "partner" does not mean that we have formed any legal partnerships with any of our retail partners. We provide our partners with access to a large customer base and convenient services for marketing, order fulfillment, customer service, returns handling, and other services. Our supply chain allows us to ship directly to our customers from our partners or from our warehouses. Our warehouses primarily fulfill orders from sales of our partners' owned inventory, including some customer returns of partner products.

We continue to focus on driving growth through expanding our home assortment, making it easier for our customers to find and view a broad assortment of products, increasing mobile app adoption driving higher customer retention, average order size, and brand loyalty, optimizing our marketing efforts to grow Bed Bath & Beyond consideration among home shoppers, growing our customer base in Canada, and gaining market share by strengthening our brand pillars of "Selection," "Findability," "Value," and "Support."

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Executive Commentary

This executive commentary is intended to provide investors with a view of our business through the eyes of our management. As an executive commentary, it necessarily focuses on selected aspects of our business. This executive commentary is intended as a supplement to, but not a substitute for, the more detailed discussion of our business included elsewhere herein. Investors are cautioned to read our entire "Management's Discussion and Analysis of Financial Condition and Results of Operations," our interim and audited financial statements, and the discussion of our business and risk factors and other information included elsewhere or incorporated in this report. This executive commentary includes forward-looking statements, and investors are cautioned to read "Special Cautionary Note Regarding Forward-Looking Statements."

Revenue decreased 18.9% for the three months ended September 30, 2023, compared to the same period in 2022. This decrease was primarily due to a 21% decrease in average order value. The decrease was partially offset by a 3% increase in orders delivered. The decrease in average order value was largely driven by orders mixing into categories with lower average unit retail price along with increased promotional and discounting activity following the launch of the Bed Bath & Beyond brand in August. The increase in orders delivered was driven by growth in customers shopping and partially offset by the impact of macroeconomic factors impacting consumer sentiment and a shift in consumer spending preferences.

Gross profit decreased 34.9% for the three months ended September 30, 2023, compared to the same period in 2022, due to lower sales and a decrease in gross margin. Gross margin decreased to 18.7% for the three months ended September 30, 2023, compared to 23.3% for the same period in 2022, primarily due to increased promotional discounting and expense deleverage related to carrier costs associated with a shift in product mix.

Sales and marketing expenses as a percentage of revenue increased from 11.6% for the three months ended September 30, 2022 to 15.4% for the three months ended September 30, 2023, primarily due to increased performance marketing expense, partially offset by lower brand advertising.

Technology expenses totaled $29.2 million for the three months ended September 30, 2023, a $388,000 decrease compared to the three months ended September 30, 2022, primarily due to a reduction in staff-related expenses.

General and administrative expenses increased $5.4 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022, primarily due to Bed Bath & Beyond brand integration expenses.

Our consolidated cash and cash equivalents balance decreased from $371.3 million as of December 31, 2022, to $325.4 million as of September 30, 2023.

Additional commentary related to macroeconomic trends

We continue to monitor recent macroeconomic trends, including, but not limited to, geopolitical events, fluctuating interest rates, and inflation. These events have and may continue to negatively impact consumer confidence and consumer spending which have and may continue to adversely affect our business and our results of operations. Due to the uncertain and constantly evolving nature and volatility created by these disruptions to global economic activities, we cannot currently predict the long-term impact of these events on our operations and financial results. Nevertheless, as of September 30, 2023, the challenges arising from these events have not adversely affected our liquidity or capacity to service our debt, nor have these conditions required us to reduce our capital expenditures.

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Results of Operations

Comparisons of Three Months Ended September 30, 2023 to Three Months Ended September 30, 2022, and Nine Months Ended September 30, 2023 to Nine Months Ended September 30, 2022.

Net revenue, cost of goods sold, gross profit and gross margin

The following table summarizes our net revenue, cost of goods sold, and gross profit (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Net revenue	$	373,313		$	460,279		$	1,176,664		$	1,524,438
Cost of goods sold
Product costs and other cost of goods sold	287,900			334,932			876,471			1,109,909
Merchant fees, customer service, and other	15,453			17,875			46,148			60,740
Total cost of goods sold	303,353			352,807			922,619			1,170,649
Gross profit	$	69,960		$	107,472		$	254,045		$	353,789
Year-over-year percentage change
Net revenue	(18.9)		%				(22.8)		%
Gross profit	(34.9)		%				(28.2)		%
Percent of net revenue
Cost of goods sold
Product costs and other cost of goods sold	77.1		%	72.8		%	74.5		%	72.8		%
Merchant fees, customer service, and other	4.1		%	3.9		%	3.9		%	4.0		%
Total cost of goods sold	81.3		%	76.7		%	78.4		%	76.8		%
Gross margin	18.7		%	23.3		%	21.6		%	23.2		%

The 18.9% decrease in net revenue for the three months ended September 30, 2023, as compared to the same period in 2022, was primarily due to a 21% decrease in average order value. The decrease was partially offset by a 3% increase in orders delivered. The decrease in average order value was largely driven by orders mixing into categories with lower average unit retail price along with increased promotional and discounting activity following the launch of the Bed Bath & Beyond brand in August. The increase in orders delivered was driven by growth in customers shopping and partially offset by the impact of macroeconomic factors impacting consumer sentiment and a shift in consumer spending preferences.

The 22.8% decrease in net revenue for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily due to a 15% decrease in the number of customer orders delivered and a decrease in average order value of 9%. This decreased order activity was largely driven by the impact of macroeconomic factors including a relatively high inflationary environment and uncertainty impacting consumer sentiment, a shift in consumer spending preferences, and our strategy to exit non-home categories, partially offset by an increase in orders delivered following the launch of the Bed Bath & Beyond brand in August.

We cannot estimate the impact that macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, or geopolitical events will have on our business in the future due to the unpredictable nature of the ultimate development and duration of these conditions.

International net revenues were less than 4% of total net revenues for each of the three and nine months ended September 30, 2023 and 2022.

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Change in estimate of average transit times (days)

Our revenue related to merchandise sales is recognized upon delivery to our customers. As we ship high volumes of packages through multiple carriers, it is not practical for us to track the actual delivery date of each shipment. Therefore, we use estimates to determine which shipments are delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times. We review and update our estimates on a quarterly basis based on our actual transit time experience. However, actual shipping times may differ from our estimates, which can be further impacted by uncertainty, volatility, and any disruption to our carriers caused by certain macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, or geopolitical events.

The following table shows the effect that hypothetical changes in the estimate of average shipping transit times would have had on the reported amount of revenue and income before income taxes (in thousands):

	Three months ended September 30, 2023
Change in the Estimate of Average Transit Times (Days)	Increase (Decrease) Revenue		Increase (Decrease)  Income Before Income Taxes
2	$	(10,882)	$	(1,441)
1	$	(4,265)	$	(562)
As reported	As reported		As reported
-1	$	3,976	$	494
-2	$	7,534	$	947

Gross profit and gross margin

Our overall gross margins fluctuate based on competitive pricing; product costs; discounting; product mix of sales; advertising revenue and our marketing allowance program; and operational and fulfillment costs. Merchant fees, customer service, and other (previously labeled "Fulfillment and related costs") include merchant processing fees associated with customer payments made by credit cards and other payment methods and other variable fees, customer service costs, costs incurred to operate and staff our warehouses, including rent and depreciation expense associated with these facilities, costs to receive, inspect, pick, and prepare customer order for delivery, and direct and indirect labor costs including payroll, payroll-related benefits, and stock-based compensation, all of which we include as costs in calculating gross margin. Merchant fees, customer service, and other as a percentage of sales may vary due to several factors, such as our ability to effectively manage merchant fees, customer service costs, and warehouse costs. We believe that some companies in our industry, including some of our competitors, account for merchant fees, customer service, and other costs within operating expenses, and therefore exclude merchant fees, customer service, and other costs from gross margin. As a result, our gross margin may not be directly comparable to others in our industry.

Gross margins for the past seven quarterly periods and fiscal year ending 2022 were:

	Q1 2022		Q2 2022		Q3 2022		Q4 2022		FY 2022		Q1 2023		Q2 2023		Q3 2023
Gross margin	23.4	%	22.9	%	23.3	%	22.1	%	23.0	%	23.5	%	22.4	%	18.7	%

Gross profit for the three months ended September 30, 2023 decreased 34.9% compared to the same period in 2022, due to lower sales and a decrease in gross margin. Gross margin decreased to 18.7% for the three months ended September 30, 2023, compared to 23.3% for the same period in 2022, primarily due to increased promotional discounting and expense deleverage related to carrier costs associated with a shift in product mix.

Gross profit for the nine months ended September 30, 2023 decreased 28.2% compared to the same period in 2022, primarily due to lower sales and a decrease in gross margin. Gross margin decreased to 21.6% for the nine months ended September 30, 2023, compared to 23.2% for the same period in 2022, primarily due to increased promotional discounting and carrier costs. The decrease was partially offset by operational efficiencies.

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Operating expenses

Sales and marketing expenses

We use a variety of online advertising channels to attract new and repeat customers, including search engine marketing, personalized emails, mobile app, loyalty program, affiliate marketing, display banners, and social media. We also build our brand awareness through linear and streaming TV.

Costs associated with our discounted shipping and other promotions, such as coupons, are not included in sales and marketing expense. Rather, they are accounted for as a reduction in revenue as they reduce the amount of consideration we expect to receive in exchange for goods or services and therefore affect net revenues and gross margin. We consider these promotions to be an effective marketing tool.

The following table summarizes our sales and marketing expenses (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Sales and marketing expenses	$	57,541		$	53,520		$	153,831		$	169,973
Advertising expense included in sales and marketing expenses	54,961			51,173			146,650			162,219
Year-over-year percentage change
Sales and marketing expenses	7.5		%				(9.5)		%
Advertising expense included in sales and marketing expenses	7.4		%				(9.6)		%
Percent of net revenue
Sales and marketing expenses	15.4		%	11.6		%	13.1		%	11.1		%
Advertising expense included in sales and marketing expenses	14.7		%	11.1		%	12.5		%	10.6		%

The 380 basis point increase in sales and marketing expenses as a percent of net revenue for the three months ended September 30, 2023, as compared to the same period in 2022, was primarily due to increased performance marketing expense, partially offset by lower brand advertising.

The 200 basis point increase in sales and marketing expenses as a percent of net revenue for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily due to increased performance marketing expense, partially offset by lower brand advertising.

Technology expenses

We seek to deploy our capital resources efficiently in technology to support operations including private and public cloud, web services, customer support solutions, and product search. We also invest in technology to enhance the customer experience including machine learning algorithms, generative AI, improving our process automation and efficiency, modernizing and expanding our systems, and supporting and expanding our logistics infrastructure. We expect to continue to incur technology expenses to support these efforts and these expenditures may continue to be material.

The frequency and variety of cyberattacks on our Website, enterprise systems, services, and on third parties we use to support our technology continues to increase. The impact of such attacks, their costs, and the costs we incur to protect ourselves against future attacks, have not been material to date. However, we consider the risk introduced by cyberattacks to be serious and will continue to incur costs related to efforts to protect ourselves against them.

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The following table summarizes our technology expenses (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Technology expenses	$	29,240		$	29,628		$	87,492		$	93,159
Year-over-year percentage change
Technology expenses	(1.3)		%				(6.1)		%
Technology expenses as a percent of net revenue	7.8		%	6.4		%	7.4		%	6.1		%

The $388,000 decrease in technology expenses for the three months ended September 30, 2023, as compared to the same period in 2022, was primarily due to a reduction in staff-related expenses.

The $5.7 million decrease in technology expenses for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily due to a reduction in staff-related expenses.

General and administrative expenses

The following table summarizes our general and administrative expenses (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
General and administrative expenses	$	24,109		$	18,665		$	66,265		$	61,002
Year-over-year percentage change
General and administrative expenses	29.2		%				8.6		%
General and administrative expenses as a percent of net revenue	6.5		%	4.1		%	5.6		%	4.0		%

The $5.4 million increase in general and administrative expenses for the three months ended September 30, 2023, as compared to the same period in 2022, was primarily due to Bed Bath & Beyond brand integration expenses.

The $5.3 million increase in general and administrative expenses for the nine months ended September 30, 2023, as compared to the same period in 2022, was primarily due to Bed Bath & Beyond brand integration expenses.

Other expense, net

Other expense, net for the three months ended September 30, 2023 was $38.7 million as compared to $46.3 million for the three months ended September 30, 2022. The decrease was primarily due to a $7.5 million decrease in loss recognized from our equity method securities.

Other expense, net for the nine months ended September 30, 2023 was $126.8 million as compared to $48.4 million for the nine months ended September 30, 2022. The increase was primarily due to a $77.7 million increase in loss recognized from our equity method securities.

Income taxes

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate adjusted for discrete items, if any, for relevant interim periods. We update our estimate of the annual effective tax rate each quarter and make cumulative adjustments if our estimated annual effective tax rate changes.

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Our quarterly tax provision and our quarterly estimate of our annual effective tax rate are subject to significant variations due to several factors including: variability in predicting our pre-tax and taxable income, the mix of jurisdictions to which those items relate, relative changes in expenses or losses for which tax benefits are limited or not recognized, how we do business, fluctuations in our stock price, economic outlook, political climate, and other conditions such as supply chain challenges, inflation, rising interest rates, and geopolitical events. In addition, changes in laws, regulations, and administrative practices will impact our rate. Our effective tax rate can be volatile based on the amount of pre-tax income. For example, the impact of discrete items on our effective tax rate is greater when pre-tax income is lower.

Our provision (benefit) for income tax for the three months ended September 30, 2023 and 2022 was $(13.4) million and $(2.7) million, respectively. The effective tax rate for the three months ended September 30, 2023 and 2022 was 17.5% and 6.7%, respectively. Our provision (benefit) for income tax for the nine months ended September 30, 2023 and 2022 was $(24.7) million and $2.0 million, respectively. The effective tax rate for the nine months ended September 30, 2023 and 2022 was 14.4% and (11.1)%, respectively. Our tax expense decreased during the three and nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to a decrease in income before income taxes. Our tax rate changed during the three and nine months ended September 30, 2023 as compared to the same period in 2022, primarily due to current period losses from operations more heavily impacting our loss before income taxes. Our effective tax rate for the three and nine months ended September 30, 2023 differs from the statutory federal income tax rate of 21% primarily due to year-to-date losses on our equity method securities for which tax benefits are limited.

Each quarter we assess the recoverability of our deferred tax assets under ASC Topic 740. We assess available positive and negative evidence to estimate whether we will generate sufficient future taxable income to use our existing deferred tax assets. We have no carryback ability, and therefore we must rely on future taxable income, including tax planning strategies, to support their realizability. At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize our federal and state net deferred tax assets. However, it is possible that some or all of these deferred tax assets could ultimately expire unused, if we are unable to generate sufficient taxable income. Therefore, unless we are able to generate sufficient income from our operations, a valuation allowance to reduce our deferred tax assets may be required, which would materially increase our expenses in the period the allowance is recognized and materially adversely affect our results of operations and financial condition. We currently maintain a valuation allowance against our deferred tax assets for capital losses and the state of Utah, because of the uncertainty regarding the realizability of these deferred tax assets. Any activities that impact the valuation allowance will be recognized discretely in the period in which they occur. We will continue to monitor the need for a valuation allowance against our other deferred tax assets on a quarterly basis.

We are subject to taxation in the United States and multiple state and foreign jurisdictions. Tax years beginning in 2018 are subject to examination by taxing authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used.

Liquidity and Capital Resources

Overview

We believe that our cash and cash equivalents currently on hand and expected cash flows from future operations will be sufficient to continue operations for at least the next twelve months. We continue to monitor, evaluate, and manage our operating plans, forecasts, and liquidity considering the most recent developments driven by macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, and geopolitical events. We proactively seek opportunities to improve the efficiency of our operations and have in the past and may in the future take steps to realize internal cost savings, including aligning our staffing needs based on our current and expected future levels of operations and process streamlining.

Current sources of liquidity

Our principal sources of liquidity are existing cash and cash equivalents and accounts receivable, net. At September 30, 2023, we had $325.4 million of cash and cash equivalents and $19.6 million of accounts receivable, net.

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Cash flow information is as follows (in thousands):

	Nine months ended September 30,
	2023		2022
Cash provided by (used in):
Operating activities	$	9,131	$	17,596
Investing activities	(51,759)		(28,004)
Financing activities	(3,356)		(65,224)

Operating activities

Cash received from customers generally corresponds to our net revenues as our customers primarily use credit cards to buy from us, causing our receivables from these sales transactions to settle quickly. We have payment terms with our partners that generally extend beyond the amount of time necessary to collect proceeds from our customers.

The $9.1 million of net cash provided by operating activities during the nine months ended September 30, 2023 was primarily due to loss from operating activities adjusted for non-cash items of $8.9 million offset by cash provided by changes in operating assets and liabilities of $18.0 million.

The $17.6 million of net cash provided by operating activities during the nine months ended September 30, 2022 was primarily due to income from operating activities adjusted for non-cash items of $58.9 million offset by cash used by changes in operating assets and liabilities of $41.3 million.

Investing activities

For the nine months ended September 30, 2023, investing activities resulted in a net cash outflow of $51.8 million, primarily due to $25.8 million for purchases of intangible assets, $10.0 million for disbursement for notes receivable and $16.5 million of expenditures for property and equipment.

For the nine months ended September 30, 2022, investing activities resulted in a net cash outflow of $28.0 million, primarily due to $18.9 million for purchases of equity securities and $9.7 million of expenditures for property and equipment.

Financing activities

For the nine months ended September 30, 2023, financing activities resulted in a net cash outflow of $3.4 million, primarily due to $2.6 million for payment of taxes withheld upon vesting of employee stock awards.

For the nine months ended September 30, 2022, financing activities resulted in a net cash outflow of $65.2 million, primarily due to $60.1 million for repurchases of our common stock and Series A-1 preferred stock under the Repurchase Program and $3.5 million for payment of taxes withheld upon vesting of employee stock awards.    

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Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of September 30, 2023 and the effect such obligations and commitments are expected to have on our liquidity and cash flow in future periods (in thousands):

Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating leases (1)	$	5,039	$	3,288	$	1,605	$	146	$	—
Loan agreements (2)	45,383		2,723		2,968		2,972		36,720
Total contractual cash obligations	$	50,422	$	6,011	$	4,573	$	3,118	$	36,720

 __________________________________________

(1)    Represents the future minimum lease payments under non-cancellable operating leases. For information regarding our operating lease obligations, see Note 8—Leases, in the Notes to Unaudited Consolidated Financial Statements included in Item 1, Part I, Financial Statements (Unaudited) of this Quarterly Report on Form 10-Q.

(2)    Represents future interest and principal payments on the financing agreements with Loan Core Capital Funding Corporation LLC. For information regarding our financing agreements, see Note 7—Borrowings, in the Notes to Unaudited Consolidated Financial Statements included in Item 1, Part I, Financial Statements (Unaudited) of this Quarterly Report on Form 10-Q.

Tax contingencies

We are involved in various tax matters, the outcomes of which are uncertain. As of September 30, 2023, accrued tax contingencies were $3.6 million. Changes in federal, foreign, state, and local tax laws may increase our tax contingencies. The timing of the resolution of income tax contingencies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities. These assessments may or may not result in changes to our contingencies related to positions on prior years' tax filings.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires that we make estimates and judgments. We base these on historical experience and on other assumptions that we believe to be reasonable. There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in Note 2—Accounting Policies and Supplemental Disclosures, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2022.

Government Regulation

We are subject to a wide variety of laws, rules, mandates, and regulations, some of which apply or may apply to us as a result of our retail business, and others of which apply to us for other reasons, such as our status as a publicly held company or the places in which we sell certain types or amounts of products. Our retail business is subject to general business regulations and laws, regulations and laws specifically governing the internet, e-commerce, and other services we offer. Existing and future laws and regulations may result in increasing expense and may impede our growth. Applicable and potentially applicable regulations and laws include regulations and laws regarding taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile communications, electronic device certification, electronic waste, energy consumption, environmental regulation, electronic contracts and other communications, competition, consumer protection, employment, import and export matters, information reporting requirements, access to our services and facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics and quality of products and services, product labeling and unfair and deceptive trade practices.

Our efforts to expand our retail business outside of the U.S. expose us to foreign and additional U.S. laws and regulations, including but not limited to, laws and regulations relating to taxation, business licensing or certification requirements, advertising practices, online services, the importation of specified or proscribed items, importation quotas, consumer protection, environmental protection, intellectual property rights, consumer and data protection, privacy, encryption, restrictions on pricing or discounts, and the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk for the effect of interest rate changes, foreign currency fluctuations, and changes in the market values of our securities. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.

Interest Rate Sensitivity

The fair value of our cash and cash equivalents (highly liquid instruments with a remaining maturity of 90 days or less at the date of purchase) would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments.

Our loan agreements carry a fixed blended annual interest rate of 4.45%. As a result, we have no direct financial statement risk associated with changes in interest rates.

Foreign Currency Risk

Most of our sales and operating expenses are denominated in U.S. dollars, and therefore, our net revenue and operating expenses are not currently subject to significant foreign currency risk.

Inflation

Increases in commodity and shipping prices and energy and labor costs have resulted in inflationary pressures across various parts of our business and operations, including our partners and supply chain. We continue to monitor the impact of inflation to minimize its effects on our customers. We work with our partners to limit the amount of cost increases that are passed on through higher pricing. If costs borne by the Company or our partners were to be subject to incremental inflationary pressures, we may not be able to fully offset such higher costs through pricing actions or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition, and results of operations.

Investment Risk

The fair values of our equity and debt securities may be subject to fluctuations due to volatility of the stock market in general, investment-specific circumstances, and changes in general economic conditions. At September 30, 2023, our recorded value in equity securities of public and private companies was $169.3 million, of which $15,000 relates to publicly traded companies, recorded at fair value, which are subject to market price volatility. At September 30, 2023, $41.1 million of our equity securities and $10.4 million of our debt securities are of private companies, recorded at fair value using Level 3 inputs. Our fair value assessment of private companies includes a review of recent operating results and trends, recent sales/acquisitions of the securities, and other publicly available data. Valuations of private companies are inherently more complex due to the lack of readily available market data. As such, we believe that market sensitivities are not practicable. These investments valued using Level 3 inputs represent 16.3% of assets measured at fair value. See Note 3—Fair Value Measurement for further information. For our equity interest in Medici Ventures, L.P., we record our proportionate share of the entity's reported net income or loss, which reflects the fair value changes of the underlying investments of the entity and any other income or losses of the entity.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation required by the Exchange Act under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Limitations on Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Disclosure Controls and Procedures and Internal Control Over Financial Reporting

There were no changes in either our disclosure controls and procedures or our internal controls over financial reporting that occurred during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our disclosure controls and procedures or our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in, or become subject to litigation or other legal proceedings concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website. We also prosecute lawsuits to enforce our legal rights. In connection with such litigation or other legal proceedings, we have been in the past and we may be in the future subject to significant damages, associated costs, or equitable remedies relating to the operation of our business. Such litigation could be costly and time consuming and could divert or distract our management and key personnel from our business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect our business, results of operations, financial position, or cash flows. For additional details, see the information set forth under Item 1 of Part I, Financial Statements—Note 9—Commitments and Contingencies, subheading Legal Proceedings and Contingencies, contained in the Notes to Unaudited Consolidated Financial Statements of this Quarterly Report on Form 10-Q, which is incorporated by reference in answer to this Item.

ITEM 1A. RISK FACTORS

Any investment in our securities involves a high degree of risk. Please consider the following risk factors carefully. If any one or more of the following risks were to occur, it could have a material adverse effect on our business, prospects, financial condition and results of operations, and the market price of our securities could decrease significantly. Statements below to the effect that an event could or would harm our business (or have an adverse effect on our business or similar statements) mean that the event could or would have a material adverse effect on our business, prospects, financial condition and results of operations, which in turn could or would have a material adverse effect on the market price of our securities. Many of the risks we face involve more than one type of risk. Consequently, you should read all of the risk factors below carefully, the risk factors described in our Form 10-K for the year ended December 31, 2022, and in any reports we file with the SEC after we file this Form 10-Q, before deciding whether to purchase or hold our securities. We have not repeated risk factors contained in our Form 10-K for the year ended December 31, 2022, which are incorporated herein by reference. The occurrence of any of these risks could harm our business, the trading price of our securities could decline, and investors could lose part or all of their investment.

Other than the risk factors set forth below, there are no material changes from the risk factors previously disclosed in Part I - Item 1A - "Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2022.

We may not realize the expected benefits of our recently announced planned company name change, our planned company stock ticker change, our determination to transfer the listing of our shares to a different stock exchange, or our purchase of the Bed Bath & Beyond brand and other intellectual property due to potential risks and uncertainties.

We recently announced our intention to change our company name from Overstock.com, Inc. to Beyond, Inc., change our company ticker symbol from OSTK to BYON, and transfer the listing of our common stock from NASDAQ to the NYSE. We also recently purchased certain assets from Bed Bath & Beyond which we are continuing to use, implement, and integrate with our existing business. Risks and uncertainties associated with these efforts could prevent us from realizing the expected benefits of our proposed company name change, stock ticker symbol change, common stock listing transfer, and purchase of the Bed Bath & Beyond brand and other intellectual property. Any of the following potential risks and uncertainties, if they were to occur, could negatively impact our financial results and prevent us from achieving the expected benefits of these ongoing and proposed actions:

•brand confusion resulting from our re-naming, re-branding, or damage to our existing brand;

•loss of sales or customers due to confusion resulting from our business re-naming, re-branding, loyalty program re-branding, or otherwise;

•unexpected costs associated with the integration, implementation, use, or maintenance of the acquired intellectual property assets;

•loss of customer traffic directed from third-party search associated with operating a new website;

•disruptions or problems associated with our common stock trading with the new ticker symbol or on the new exchange;

•higher than anticipated promotional discounting or marketing costs to acquire customers;

•disruptions to our website or ongoing business;

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•diversion of the attention of management or key personnel;

•employee fatigue resulting from implementation efforts that could negatively impact our ability to hire or retain key personnel;

•disruptions or changes to our existing business relationships with suppliers or other third parties resulting from our purchase of the Bed Bath & Beyond assets;

•elevated risks associated with fraudulent activities during the process of our global brand expansion;

•costs to defend claims against Bed Bath & Beyond that we do not owe as an asset purchaser, but could be required to pay in order to defend and preserve our rights;

•unexpected economic, political, or regulatory risks; or

•any other unforeseen costs, expenses, losses, disruptions, delays, or negative impacts.

Shareholder activism could negatively impact our business.

Responding to actions by activist shareholders could result in substantial cost, disrupt business operations, and divert the attention of our management, Board, and employees. Further, shareholder activism could give rise to perceived uncertainties regarding the future direction of our business, which could adversely affect our relationships with our employees, suppliers, customers, or service providers, could make it more difficult to attract and retain qualified personnel, and could result in stock price fluctuations. Such a result could have a material adverse effect on our personnel, business, prospects, and financial results.

We may be required to recognize losses relating to our equity method investments.

At September 30, 2023, we held equity method investments totaling approximately $169.3 million. The underlying equity interests are in private entities that are in the startup or development stages. Equity method securities are inherently risky because we do not have the ability to influence business decisions, and the markets for the technologies or products these companies are developing are typically in the early stages and may never materialize. Since these investments are in companies that are in the early startup or development stages, even if their technology or products are viable, they may not be able to obtain the capital or resources necessary to successfully bring their technology or products to market. In addition, the valuations of private companies are inherently more complex due to the lack of readily available market data. The fair values of the underlying equity securities may be subject to fluctuations due to investment-specific circumstances such as failing to complete development milestones, achieve financial forecasts, or raise adequate capital, among other items. We have recognized losses related to these equity method securities in the past and may in the future recognize additional losses. Additionally, due to tax law limitations around deductibility of capital and investment losses, we may not be able to recognize a tax benefit on these losses when they occur. Any such loss could be material and could have a material adverse effect on our financial results.

Our deferred tax assets may be subject to additional valuation allowances, which could adversely affect our operating results.

Determining whether a valuation allowance for deferred tax assets is appropriate requires judgment and an evaluation of all positive and negative evidence. At each reporting period, we assess the need for, or the sufficiency of, a valuation allowance against deferred tax assets. During 2021, based on the weight of all the positive and negative evidence, we concluded that it was more likely than not that we will realize certain federal and state net deferred tax assets based on future taxable income. Therefore, we reversed the valuation allowance on those deferred tax assets during 2021. We currently maintain a valuation allowance against our deferred tax assets for capital losses and the state of Utah, because of the uncertainty regarding the realizability of these deferred tax assets.

Our conclusion that it is more likely than not that we will realize certain federal and state net deferred tax assets is primarily based on our estimate of future taxable income. Our estimate of future taxable income is based on internal projections which primarily consider historical performance, but also include various internal estimates and assumptions and certain external data. We believe all of these inputs are reasonable, although inherently subject to judgment. At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize our federal and state net deferred tax assets. However, it is possible that some or all of these deferred tax assets could ultimately expire unused, if we are unable to generate sufficient taxable income. Therefore, unless we are able to generate sufficient income from our operations, a valuation allowance to reduce our deferred tax assets may be required, which would materially increase our expenses in the period the allowance is recognized and materially adversely affect our results of operations and financial condition.

35

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Purchases of Equity Securities

See Note 11—Stockholders' Equity, in the Notes to Unaudited Consolidated Financial Statements included in Item 1, Part I, Financial Statements (Unaudited) of this Quarterly Report on Form 10-Q for information regarding our authorized share repurchase program. There were no repurchases made during the three months ended September 30, 2023. As of September 30, 2023, the approximate dollar value of shares that may yet be purchased under the stock repurchase program is $19.9 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On September 12, 2023, Barclay F. Corbus, a director of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 6,821 shares of Overstock.com, Inc. common stock between January 22, 2024 and February 5, 2024, subject to certain conditions.

On September 12, 2023, Joanna C. Burkey, a director of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 2,543 shares of Overstock.com, Inc. common stock between March 4, 2024 and March 5, 2024, subject to certain conditions.

On September 15, 2023, Allison H. Abraham, chairwoman of the board of directors of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 5,000 shares of Overstock.com, Inc. common stock between January 24, 2024 and January 25, 2024, subject to certain conditions.

ITEM 6. EXHIBITS

(a)	Exhibit Number	Exhibit Description
	31.1*	Exhibit 31.1 Certification of Chief Executive Officer
	31.2*	Exhibit 31.2 Certification of Chief Financial Officer
	32.1**	Exhibit 32.1 Section 1350 Certification of Chief Executive Officer
	32.2**	Exhibit 32.2 Section 1350 Certification of Chief Financial Officer
	101	Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Stockholders' Equity, and (vi) Notes to Consolidated Financial Statements.
	104	The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL (included as Exhibit 101).

______________________________________

* Filed herewith.

** Furnished herewith.

36

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	October 31, 2023	OVERSTOCK.COM, INC.
		/s/ ADRIANNE B. LEE
		Adrianne B. Lee
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

37

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jonathan E. Johnson III, certify that:

1.             I have reviewed this Quarterly Report on Form 10-Q of Overstock.com, Inc.;

2.             Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.            evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.             The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 31, 2023	/s/ JONATHAN E. JOHNSON III
		Jonathan E. Johnson III
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Adrianne B. Lee, certify that:

1.             I have reviewed this Quarterly Report on Form 10-Q of Overstock.com, Inc.;

2.             Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.            evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.             The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 31, 2023	/s/ ADRIANNE B. LEE
		Adrianne B. Lee
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Jonathan E. Johnson III, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Overstock.com, Inc. on Form 10-Q for the quarter ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that information contained in such Report fairly presents in all material respects the financial condition and results of operations of Overstock.com, Inc.

Date:	October 31, 2023	/s/ JONATHAN E. JOHNSON III
		Jonathan E. Johnson III
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Adrianne B. Lee, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Overstock.com, Inc. on Form 10-Q for the quarter ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that information contained in such Report fairly presents in all material respects the financial condition and results of operations of Overstock.com, Inc.

Date:	October 31, 2023	/s/ ADRIANNE B. LEE
		Adrianne B. Lee
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 27, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-41850
Entity Registrant Name	OVERSTOCK.COM, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-0634302
Entity Address, Address Line One	799 West Coliseum Way
Entity Address, City or Town	Midvale
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84047
City Area Code	801
Local Phone Number	947-3100
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	OSTK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		45,304,946
Entity Central Index Key	0001130713
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 325,435	$ 371,263
Restricted cash	38	194
Accounts receivable, net of allowance for credit losses of $1,839 and $3,223	19,580	17,693
Inventories	11,519	6,526
Prepaids and other current assets	19,157	18,833
Total current assets	375,729	414,509
Property and equipment, net	109,661	109,906
Deferred tax assets, net	66,449	41,439
Intangible assets, net	25,501	9
Goodwill	6,160	6,160
Equity securities, including securities measured at fair value of $41,091 and $82,823	169,326	296,317
Operating lease right-of-use assets	4,347	7,460
Other long-term assets, net	13,611	2,746
Total assets	770,784	878,546
Current liabilities:
Accounts payable	85,272	75,130
Accrued liabilities	72,475	63,614
Unearned revenue	47,450	44,480
Operating lease liabilities, current	3,056	4,410
Other current liabilities	1,138	3,508
Total current liabilities	209,391	191,142
Long-term debt, net	34,232	34,476
Operating lease liabilities, non-current	1,622	3,626
Other long-term liabilities	9,355	3,476
Total liabilities	254,600	232,720
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, $0.0001 par value, authorized shares - 5,000, issued and outstanding - none	0	0
Common stock, $0.0001 par value, authorized shares - 100,000	5	5
Additional paid-in capital	1,002,494	982,718
Accumulated deficit	(320,678)	(173,829)
Accumulated other comprehensive loss	(510)	(522)
Treasury stock at cost - 6,280 and 6,151	(165,127)	(162,546)
Equity attributable to stockholders of Overstock.com, Inc.	516,184	645,826
Total liabilities and stockholders' equity	$ 770,784	$ 878,546

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for credit loss	$ 1,839	$ 3,223
Equity securities at fair value	$ 41,091	$ 82,823
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	51,585,000	51,102,000
Common stock, shares outstanding (in shares)	45,305,000	44,951,000
Treasury stock (in shares)	6,280,000	6,151,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net revenue	$ 373,313	$ 460,279	$ 1,176,664	$ 1,524,438
Cost of goods sold	303,353	352,807	922,619	1,170,649
Gross profit	69,960	107,472	254,045	353,789
Operating expenses
Sales and marketing	57,541	53,520	153,831	169,973
Technology	29,240	29,628	87,492	93,159
General and administrative	24,109	18,665	66,265	61,002
Total operating expenses	110,890	101,813	307,588	324,134
Operating income (loss)	(40,930)	5,659	(53,543)	29,655
Interest income, net	3,201	976	8,819	966
Other expense, net	(38,731)	(46,283)	(126,793)	(48,378)
Loss before income taxes	(76,460)	(39,648)	(171,517)	(17,757)
Provision (benefit) for income taxes	(13,411)	(2,653)	(24,668)	1,968
Net loss attributable to stockholders of Overstock.com, Inc.	$ (63,049)	$ (36,995)	$ (146,849)	$ (19,725)
Net loss per share of common stock:
Basic	$ (1.39)	$ (0.81)	$ (3.25)	$ (0.46)
Diluted	$ (1.39)	$ (0.81)	$ (3.25)	$ (0.46)
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Basic	45,225,000	45,708,000	45,164,000	43,954,000
Diluted	45,225,000	45,708,000	45,164,000	43,954,000

XML

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (63,049)	$ (36,995)	$ (146,849)	$ (19,725)
Other comprehensive income
Unrealized gain on cash flow hedges, net of expense for taxes of $0, $0, $0, and $0	4	4	12	12
Other comprehensive income	4	4	12	12
Comprehensive income (loss) attributable to stockholders of Overstock.com, Inc.	$ (63,045)	$ (36,991)	$ (146,837)	$ (19,713)

XML

Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Unrealized gain on cash flow hedges, tax expense	$ 0	$ 0	$ 0	$ 0

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Total	Common stock	Preferred stock	Additional paid-in capital	Accumulated deficit	Accumulated other comprehensive loss	Treasury stock	Series A-1 Preferred Stock	Series A-1 Preferred Stock Preferred stock	Series B Preferred Stock Preferred stock
Increase (Decrease) in Stockholders' Equity
Preferred stock, outstanding (in shares)										357,000
Beginning balance (in shares) at Dec. 31, 2021		46,625,000					3,602,000
Increase (Decrease) in Stockholders' Equity
Common stock issued upon vesting of restricted stock		264,000
Common stock issued for ESPP purchases		84,000
Conversion of preferred stock		4,098,000
Repurchases of common stock							1,652,000		7,000
Tax withholding upon vesting of employee stock awards							77,000
Ending balance (in shares) at Sep. 30, 2022		51,071,000					5,331,000
Beginning balance at Dec. 31, 2021		$ 4,000
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock		1,000
Ending balance at Sep. 30, 2022		$ 5,000
Beginning balance (in shares) at Dec. 31, 2021									4,204,000
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock									4,204,000	357,000
Ending balance (in shares) at Sep. 30, 2022									0
Beginning balance (in shares) at Dec. 31, 2021									0
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock								7,244	(7,000)
Ending balance (in shares) at Sep. 30, 2022									0
Beginning balance at Dec. 31, 2021				$ 960,544,000	$ (136,590,000)	$ (537,000)	$ (79,035,000)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation to employees and directors				13,390,000
Common stock issued for ESPP purchases				2,779,000
Conversion and elimination of preferred stock				1,043,000
Other				34,000
Net loss	$ (19,725,000)				(19,725,000)
Dividend issued upon conversion and elimination of preferred stock					(1,697,000)
Conversion and elimination of preferred stock					(306,000)
Net other comprehensive income	12,000					12,000
Repurchases of common and Series A-1 preferred stock							60,077,000
Tax withholding upon vesting of employee stock awards							3,501,000
Conversion and elimination of preferred stock					306,000		(306,000)
Ending balance at Sep. 30, 2022	676,645,000			977,790,000	(158,318,000)	(525,000)	$ (142,307,000)
Increase (Decrease) in Stockholders' Equity
Preferred stock, outstanding (in shares)										0
Beginning balance (in shares) at Jun. 30, 2022		51,026,000					5,331,000
Increase (Decrease) in Stockholders' Equity
Common stock issued upon vesting of restricted stock		3,000
Common stock issued for ESPP purchases		42,000
Conversion of preferred stock		0
Repurchases of common stock							0		0
Tax withholding upon vesting of employee stock awards							0
Ending balance (in shares) at Sep. 30, 2022		51,071,000					5,331,000
Beginning balance at Jun. 30, 2022		$ 5,000
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock		0
Ending balance at Sep. 30, 2022		$ 5,000
Beginning balance (in shares) at Jun. 30, 2022									0
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock									0	0
Ending balance (in shares) at Sep. 30, 2022									0
Beginning balance (in shares) at Jun. 30, 2022									0
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock									0
Ending balance (in shares) at Sep. 30, 2022									0
Beginning balance at Jun. 30, 2022				972,845,000	(121,323,000)	(529,000)	$ (142,288,000)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation to employees and directors				4,056,000
Common stock issued for ESPP purchases				889,000
Conversion and elimination of preferred stock				0
Other				0
Net loss	(36,995,000)				(36,995,000)
Dividend issued upon conversion and elimination of preferred stock					0
Conversion and elimination of preferred stock					0
Net other comprehensive income	4,000					4,000
Repurchases of common and Series A-1 preferred stock							0
Tax withholding upon vesting of employee stock awards							19,000
Conversion and elimination of preferred stock							0
Ending balance at Sep. 30, 2022	$ 676,645,000			977,790,000	(158,318,000)	(525,000)	$ (142,307,000)
Increase (Decrease) in Stockholders' Equity
Common stock, shares outstanding (in shares)		45,740,000
Preferred stock, outstanding (in shares)									0	0
Preferred stock, $0.0001 par value, authorized shares - 5,000, issued and outstanding - none			$ 0
Common stock, shares outstanding (in shares)	44,951,000
Preferred stock, outstanding (in shares)	0									0
Preferred stock, $0.0001 par value, authorized shares - 5,000, issued and outstanding - none	$ 0
Beginning balance (in shares) at Dec. 31, 2022		51,102,000					6,151,000
Increase (Decrease) in Stockholders' Equity
Common stock issued upon vesting of restricted stock		365,000
Common stock issued for ESPP purchases		118,000
Conversion of preferred stock		0
Repurchases of common stock							0		0
Tax withholding upon vesting of employee stock awards							129,000
Ending balance (in shares) at Sep. 30, 2023		51,585,000					6,280,000
Beginning balance at Dec. 31, 2022		$ 5,000
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock		0
Ending balance at Sep. 30, 2023		$ 5,000
Beginning balance (in shares) at Dec. 31, 2022	0								0
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock									0	0
Ending balance (in shares) at Sep. 30, 2023	0								0
Beginning balance (in shares) at Dec. 31, 2022									0
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock									0
Ending balance (in shares) at Sep. 30, 2023									0
Beginning balance at Dec. 31, 2022	$ 645,826,000			982,718,000	(173,829,000)	(522,000)	$ (162,546,000)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation to employees and directors				17,863,000
Common stock issued for ESPP purchases				1,913,000
Conversion and elimination of preferred stock				0
Other				0
Net loss	(146,849,000)				(146,849,000)
Dividend issued upon conversion and elimination of preferred stock					0
Conversion and elimination of preferred stock					0
Net other comprehensive income	12,000					12,000
Repurchases of common and Series A-1 preferred stock							0
Tax withholding upon vesting of employee stock awards							2,581,000
Conversion and elimination of preferred stock							0
Ending balance at Sep. 30, 2023	$ 516,184,000			1,002,494,000	(320,678,000)	(510,000)	$ (165,127,000)
Increase (Decrease) in Stockholders' Equity
Preferred stock, outstanding (in shares)										0
Beginning balance (in shares) at Jun. 30, 2023		51,455,000					6,253,000
Increase (Decrease) in Stockholders' Equity
Common stock issued upon vesting of restricted stock		80,000
Common stock issued for ESPP purchases		50,000
Conversion of preferred stock		0
Repurchases of common stock							0		0
Tax withholding upon vesting of employee stock awards							27,000
Ending balance (in shares) at Sep. 30, 2023		51,585,000					6,280,000
Beginning balance at Jun. 30, 2023		$ 5,000
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock		0
Ending balance at Sep. 30, 2023		$ 5,000
Beginning balance (in shares) at Jun. 30, 2023									0
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock									0	0
Ending balance (in shares) at Sep. 30, 2023	0								0
Beginning balance (in shares) at Jun. 30, 2023									0
Increase (Decrease) in Stockholders' Equity
Conversion and elimination of preferred stock									0
Ending balance (in shares) at Sep. 30, 2023									0
Beginning balance at Jun. 30, 2023				995,904,000	(257,629,000)	(514,000)	$ (164,600,000)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation to employees and directors				5,798,000
Common stock issued for ESPP purchases				792,000
Conversion and elimination of preferred stock				0
Other				0
Net loss	$ (63,049,000)				(63,049,000)
Dividend issued upon conversion and elimination of preferred stock					0
Conversion and elimination of preferred stock					0
Net other comprehensive income	4,000					4,000
Repurchases of common and Series A-1 preferred stock							0
Tax withholding upon vesting of employee stock awards							527,000
Conversion and elimination of preferred stock							0
Ending balance at Sep. 30, 2023	$ 516,184,000			$ 1,002,494,000	$ (320,678,000)	$ (510,000)	$ (165,127,000)
Increase (Decrease) in Stockholders' Equity
Common stock, shares outstanding (in shares)	45,305,000	45,305,000
Preferred stock, outstanding (in shares)	0								0	0
Preferred stock, $0.0001 par value, authorized shares - 5,000, issued and outstanding - none	$ 0		$ 0

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (146,849)	$ (19,725)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	14,821	12,480
Non-cash operating lease cost	3,858	4,138
Stock-based compensation to employees and directors	17,863	13,390
Increase in deferred tax assets, net	(25,010)	(691)
Loss from equity method securities	126,966	49,227
Other non-cash adjustments	(532)	97
Changes in operating assets and liabilities:
Accounts receivable, net	(1,887)	745
Inventories	(4,993)	(933)
Prepaids and other current assets	490	1,991
Other long-term assets, net	(1,195)	(1,004)
Accounts payable	11,749	(17,360)
Accrued liabilities	9,171	(11,633)
Unearned revenue	2,970	(8,335)
Operating lease liabilities	(4,170)	(4,285)
Other long-term liabilities	5,879	(506)
Net cash provided by operating activities	9,131	17,596
Cash flows from investing activities:
Disbursement for notes receivable	(10,000)	0
Purchase of intangible assets	(25,782)	0
Purchase of equity securities	0	(18,920)
Capital distribution from investment	4	1,224
Expenditures for property and equipment	(16,543)	(9,724)
Other investing activities, net	562	(584)
Net cash used in investing activities	(51,759)	(28,004)
Cash flows from financing activities:
Repurchase of shares	0	(60,077)
Payments of taxes withheld upon vesting of employee stock awards	(2,581)	(3,501)
Other financing activities, net	(775)	(1,646)
Net cash used in financing activities	(3,356)	(65,224)
Net decrease in cash, cash equivalents, and restricted cash	(45,984)	(75,632)
Cash, cash equivalents, and restricted cash, beginning of period	371,457	503,366
Cash, cash equivalents, and restricted cash, end of period	$ 325,473	$ 427,734

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DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS

1. DESCRIPTION OF BUSINESS

Overstock.com, Inc. is a technology-focused innovator based in Midvale, Utah and owner of the Bed Bath & Beyond brand and other intellectual property related to the brand. Bed Bath & Beyond is an online home furnishings and furniture retailer in the United States and Canada. Our online shopping site sells a broad range of new home products at low prices, including furniture, décor, area rugs, bedding and bath, home improvement, and more. Our online shopping site features millions of products that tens of millions of customers visit each month.

As used herein, "Overstock," "the Company," "we," "our" and similar terms include Overstock.com, Inc. and its controlled subsidiaries, unless the context indicates otherwise. As used herein, the term "Website" refers to the Company's online shopping sites located at www.bedbathandbeyond.com, www.bedbathandbeyond.ca, www.overstockgovernment.com, and the Company's mobile app.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with our audited annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes to our significant accounting policies disclosed in Note 2—Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2022.

The accompanying unaudited consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and reflect all adjustments, consisting only of normal recurring adjustments, which are, in our opinion, necessary for a fair presentation of results for the interim periods presented. All intercompany account balances and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the full fiscal year, due to seasonality and other factors.

Use of estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in our consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, loyalty program reward point and gift card breakage, sales returns, inventory valuation, asset useful lives, equity and debt securities valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities, and contingencies. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, our accounting of these estimates may change from period to period. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.

Available-for-sale debt securities

During the nine months ended September 30, 2023, we invested $10.0 million in GrainChain, Inc. in the form of a convertible promissory note (the "Note"). The Note bears interest at an annual interest rate of 5% and accrued interest is recorded in Interest income, net in our consolidated statements of operations. The Note has a maturity date of January 3, 2025 at which time the outstanding principal and any unpaid accrued interest will automatically convert into shares of a newly created series of preferred stock issued by GrainChain, Inc. unless converted earlier under limited circumstances. The fair value of the Note, including accrued interest, was $10.4 million at September 30, 2023, which is included in Other long-term assets, net on our consolidated balance sheets.

Based on the nature of our indirect ownership interests in GrainChain, Inc. through Medici Ventures, L.P. and the extent of our contributed capital, we held a variable interest in GrainChain, Inc., which meets the definition of a variable interest entity; however, we are not the primary beneficiary of this entity for purposes of consolidation as we do not have the power (either explicit or implicit), through voting rights or otherwise, to direct the activities of GrainChain, Inc. that most significantly impact its economic performance. Our maximum exposure to loss in this variable interest entity totaled $27.8 million as of September 30, 2023, representing our direct and indirect interest in GrainChain, Inc.

Intangible assets other than goodwill

We capitalize and amortize intangible assets other than goodwill over their estimated useful lives unless such lives are indefinite. Intangible assets other than goodwill acquired separately from third parties are capitalized at cost, including any related direct acquisition costs, while such assets acquired as part of a business combination are capitalized at their acquisition-date fair value. Indefinite-lived intangible assets are tested for impairment annually or more frequently when events or circumstances indicate that the carrying value more likely than not exceeds its fair value. In addition, we routinely evaluate the remaining useful life of intangible assets not being amortized to determine whether events or circumstances continue to support an indefinite useful life, including any legal, regulatory, contractual, competitive, economic, or other factors that may limit their useful lives. Definite lived intangible assets are amortized using the straight-line method of amortization over their useful lives, with the exception of certain intangibles (such as acquired customer lists) which are amortized using an accelerated method of amortization based on estimated customer attrition rates. These definite lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

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FAIR VALUE MEASUREMENT

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

3. FAIR VALUE MEASUREMENT

The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs (in thousands): 

	Fair Value Measurements at September 30, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents—Money market funds	$	264,576	$	264,576	$	—	$	—
Equity securities, at fair value	41,091		15		—		41,076
Available-for-sale debt securities (1)	10,358		—		—		10,358
Trading securities held in a "rabbi trust" (1)	459		459		—		—
Total assets	$	316,484	$	265,050	$	—	$	51,434
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	475	$	475	$	—	$	—
Total liabilities	$	475	$	475	$	—	$	—

 

	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents—Money market funds	$	252,650	$	252,650	$	—	$	—
Equity securities, at fair value	82,823		36		—		82,787
Trading securities held in a "rabbi trust" (1)	399		399		—		—
Total assets	$	335,872	$	253,085	$	—	$	82,787
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	396	$	396	$	—	$	—
Total liabilities	$	396	$	396	$	—	$	—

___________________________________________

(1)    Included in Prepaids and other current assets and Other long-term assets, net in the consolidated balance sheets.

(2)     Included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

The following table provides activity for our Level 3 investments (in thousands):

	Amount
Level 3 investments at December 31, 2021	$	102,355
Increase due to purchases of Level 3 investments	18,920
Decrease in fair value of Level 3 investments	(38,488)
Level 3 investments at December 31, 2022	82,787
Increase due to purchases of Level 3 investments	10,000
Decrease in fair value of Level 3 investments	(41,711)
Accrued interest on Level 3 investments	358
Level 3 investments at September 30, 2023	$	51,434

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PROPERTY AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment, Net [Abstract]

PROPERTY AND EQUIPMENT, NET

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Computer hardware and software, including internal-use software and website development	$	246,875	$	240,148
Building	69,356		69,350
Land	12,781		12,781
Furniture and equipment	10,907		12,642
Building machinery and equipment	9,828		9,791
Land improvements	7,060		7,060
Leasehold improvements	1,749		2,904
	358,556		354,676
Less: accumulated depreciation	(248,895)		(244,770)
Total property and equipment, net	$	109,661	$	109,906

Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Capitalized internal-use software and website development	$	3,069	$	1,714	$	9,350	$	5,826
Depreciation of internal-use software and website development	1,217		1,684		5,932		4,965

Depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	170	$	171	$	610	$	509
Technology	2,940		2,997		10,930		9,143
General and administrative	928		953		2,991		2,785
Total depreciation	$	4,038	$	4,121	$	14,531	$	12,437

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INTANGIBLE ASSETS, NET

9 Months Ended

Sep. 30, 2023

Intangible Assets, Net (Excluding Goodwill) [Abstract]

INTANGIBLE ASSETS, NET

5. INTANGIBLE ASSETS, NET

On June 12, 2023, we entered into an Asset Purchase Agreement with Bed Bath & Beyond Inc. ("BBBY"), and certain subsidiaries, to acquire certain intellectual property related to the Bed Bath & Beyond banner from BBBY. On June 27, 2023, under a Bankruptcy Court supervised process, the U.S. Bankruptcy Court for the District of New Jersey approved the sale of the assets to the Company and on June 28, 2023, BBBY delivered the intellectual property assets via an Intellectual Property Assignment Agreement. The total purchase price, inclusive of direct acquisition-related expenses totaled $25.6 million which has been allocated to two major asset categories consisting of $21.8 million for trade names with an indefinite useful life and $3.8 million for customers lists with an estimated useful life of five years.

Intangible assets, net consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Intangible assets subject to amortization, gross (1)	$	5,331	$	1,552
Less: accumulated amortization of intangible assets	(1,833)		(1,543)
Intangible assets subject to amortization, net	3,498		9
Intangible assets not subject to amortization	22,003		—
Total intangible assets, net	$	25,501	$	9

___________________________________________

(1)    At September 30, 2023, the weighted average remaining useful life for intangible assets subject to amortization, gross was 4.8 years.

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EQUITY SECURITIES

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

EQUITY SECURITIES

6. EQUITY SECURITIES

Equity securities consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Equity securities accounted for under the equity method under ASC 323	$	128,235	$	213,494
Equity securities accounted for under the equity method under the fair value option	41,076		82,787
Equity securities under ASC 321	15		36
Total equity securities	$	169,326	$	296,317

Our equity securities accounted for under the equity method under ASC 323 include equity securities in which we can exercise significant influence, but not control, over these entities through holding more than a 20% voting interest in the entity.

The following table includes our equity securities accounted for under the equity method and related ownership interest as of September 30, 2023:

	Ownership interest
Medici Ventures, L.P.	99%
tZERO Group, Inc.	28%
SpeedRoute, LLC	49%

The carrying amount of our equity method securities was $169.3 million at September 30, 2023, which is included in Equity securities on our consolidated balance sheets, of which $41.1 million is valued under the fair value option (tZERO and SpeedRoute). For our investments in Medici Ventures, tZERO, and SpeedRoute there is no difference in the carrying amount of the assets and liabilities and our maximum exposure to loss, and there is no difference between the carrying amount of our investment in Medici Ventures and the amount of underlying equity we have in the entity's net assets.

The following table summarizes the net loss recognized on equity method securities recorded in Other expense, net in our consolidated statements of operations (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net loss recognized on our proportionate share of the net assets of our equity method securities	$	(41,837)	$	(17,231)	$	(85,255)	$	(20,979)
Increase (decrease) in fair value of equity method securities held under fair value option	2,691		(29,413)		(41,711)		(28,248)

Regulation S-X Rule 10-01(b)(1)

In accordance with Rule 10-01(b)(1) of Regulation S-X, which applies to interim reports on Form 10-Q, the Company must determine if its equity method investees are considered "significant subsidiaries". Summarized income statement information of an equity method investee is required in an interim report if the significance criteria are met as defined under SEC guidance.

The following is the unaudited summarized financial information for those equity method securities that met the significance criteria for the period ended September 30, 2023, presented on a quarterly lag, (in thousands):

	Nine months ended September 30,
	2023		2022
Results of Operations
Revenues	$	1,373	$	2,070
Pre-tax loss	(15,681)		(23,151)
Net loss	(15,882)		(22,913)

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BORROWINGS

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

BORROWINGS

7. BORROWINGS

In March 2020, we entered into two loan agreements. The loan agreements provide a $34.5 million Senior Note, carrying interest at an annual rate of 4.242%, and a $13.0 million Mezzanine Note, carrying interest at an annual rate of 5.002%. The loans carry a blended annual interest rate of 4.45%. The Senior Note is for a 10-year term (stated maturity date is March 6, 2030) and requires interest only payments, with the principal amount and any then unpaid interest due and payable at the end of the 10-year term. The Mezzanine Note has a stated 10-year term, though the agreement requires principal and interest payments monthly over approximately a 46-month payment period. Our debt issuance costs and debt discount are amortized using the straight-line basis which approximates the effective interest method.

As of September 30, 2023, the total outstanding debt on these loans was $35.3 million, net of $331,000 in capitalized debt issuance costs, and the total amount of the current portion of these loans included in Other current liabilities on our consolidated balance sheets was $1.1 million.

Both loans include certain financial and non-financial covenants and are secured by our corporate headquarters and the related land and rank senior to stockholders. The financial covenants require that Overstock maintain a net worth in excess of $30 million and minimum liquid assets of $3 million for so long as the Mezzanine Note is outstanding and is reduced to maintaining a net worth in excess of $15 million and minimum liquid assets of $1 million for the remainder of the term that the Senior Note is outstanding. We are in compliance with our debt covenants and continue to monitor our ongoing compliance with our debt covenants.

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LEASES

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

8. LEASES

We have operating leases for warehouses, office space, and data centers. Our leases have remaining lease terms of one year to four years, some of which may include options to extend the leases perpetually, and some of which may include options to terminate the leases within one year.

The components of lease expenses were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	1,344	$	1,507	$	4,242	$	4,585
Variable lease cost	370		291		1,117		1,053

The following table provides a summary of other information related to leases (in thousands):

	Nine months ended September 30,
	2023		2022
Cash payments included in operating cash flows from lease arrangements	$	4,475	$	4,776
Right-of-use assets obtained in exchange for new operating lease liabilities	836		344

The following table provides supplemental balance sheet information related to leases:

	September 30, 2023		December 31, 2022
Weighted-average remaining lease term—operating leases	1.67 years		2.04 years
Weighted-average discount rate—operating leases	7	%	7	%

Maturity of lease liabilities under our non-cancellable operating leases as of September 30, 2023, are as follows (in thousands):

Payments due by period	Amount
2023 (Remainder)	$	1,030
2024	2,987
2025	689
2026	250
2027	83
Thereafter	—
Total lease payments	5,039
Less interest	361
Present value of lease liabilities	$	4,678

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

Legal proceedings and contingencies

From time to time, we are involved in litigation concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website. In connection with such litigation, we have been in the past and we may be in the future subject to significant damages. In some instances, other parties may have contractual indemnification obligations to us. However, such contractual obligations may prove unenforceable or non-collectible, and if we cannot enforce or collect on indemnification obligations, we may bear the full responsibility for damages, fees, and costs resulting from such litigation. We may also be subject to penalties and equitable remedies that could force us to alter important business practices. Such litigation could be costly and time consuming and could divert or distract our management and key personnel from our business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect our business, results of operations, financial position, or cash flows. The nature of the loss contingencies relating to claims that have been asserted against us are described below.

As previously disclosed, in October 2019, we received a subpoena from the SEC requiring us to produce documents and other information related to the Series A-1 Preferred stock dividend we announced to stockholders in June 2019 and requesting copies of 10b5-1 plans entered into by certain officers and directors. In December 2019, we received a subpoena from the SEC requesting our insider trading policies and certain employment and consulting agreements. We also received requests from the SEC for our communications with our former Chief Executive Officer and Director, Patrick Byrne, and the matters referenced in the December 2019 subpoenas. In January 2021, we received a subpoena from the SEC requesting information regarding our retail guidance in 2019 and certain communications with current and former executives, board members, and investors. We continue to cooperate with the SEC on these matters.

On September 27, 2019, a purported securities class action lawsuit was filed against us and our former Chief Executive Officer and former Chief Financial Officer in the United States District Court of Utah, alleging violations under Section 10(b), Rule 10b-5, Section 20(a), and Section 20A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). On October 8, 2019, October 17, 2019, October 31, 2019, and November 20, 2019, four similar lawsuits were filed in the same court also naming us and the above referenced former executives as defendants, bringing similar claims under the Exchange Act, and seeking similar relief. These cases were consolidated into a single lawsuit in December 2019. The Court appointed The Mangrove Partners Master Fund Ltd. as lead plaintiff in January 2020. In March 2020, an amended consolidated complaint was filed against us, our President, our former Chief Executive Officer, and our former Chief Financial Officer. We filed a motion to dismiss and, on September 28, 2020, the court granted our motion and entered judgment in our favor. The plaintiffs filed a motion to amend their complaint on October 23, 2020. The United States District Court of Utah granted the plaintiffs' motion to amend their complaint on January 6, 2021. The plaintiffs filed their amended complaint on January 11, 2021. We filed a motion to dismiss plaintiffs' amended complaint, and on September 20, 2021, the court granted our motion and entered judgment in our favor. On October 18, 2021, the plaintiffs filed a Notice of Appeal, appealing the ruling of the district court to the United States Court of Appeals for the Tenth Circuit. We are awaiting a ruling from the Tenth Circuit that heard oral argument on the appeal on February 9, 2023. No estimates of the possible losses or range of losses can be made at this time. We intend to continue to vigorously defend this consolidated action.

On November 22, 2019, a shareholder derivative suit was filed against us and certain past and present directors and officers of ours in the United States District Court for the District of Delaware, with allegations that include: (i) breach of fiduciary duties, (ii) unjust enrichment, (iii) insider selling and misappropriation of the Company's information, and (iv) contribution under Sections 10(b) and 21D of the Exchange Act. On December 17, 2019, a similar lawsuit was filed in the same court, naming the same defendants, bringing similar claims, and seeking similar relief. These cases were consolidated into a single lawsuit in January 2020. In March 2020, the court entered a stay on litigation, pending the outcome of the securities class action motion to dismiss. The case remains stayed pending the outcome of the plaintiffs' appeal to the Tenth Circuit in the securities class action. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend these actions.

On April 23, 2020, a putative class action lawsuit was filed against us in the Circuit Court of the County of St. Louis, State of Missouri, alleging that we over-collected taxes on products sold into the state of Missouri. We removed the case to United States District Court, Eastern District of Missouri on May 22, 2020, and on February 9, 2021, the case against us was dismissed. On March 1, 2021, a putative class action lawsuit was filed against us in the Circuit Court of the County of St. Louis, State of Missouri, alleging similar allegations to the April 23, 2020 putative class action lawsuit that was dismissed, that we over-collected taxes on products sold into the state of Missouri. We filed a motion to compel arbitration, which was denied on October 13, 2021. We filed a motion to dismiss, which was denied on March 16, 2022. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend this action.

We establish liabilities when a particular contingency is probable and estimable. At September 30, 2023 and December 31, 2022, our established liabilities were not material.

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INDEMNIFICATIONS AND GUARANTEES

9 Months Ended

Sep. 30, 2023

Guarantees and Product Warranties [Abstract]

INDEMNIFICATIONS AND GUARANTEES

10. INDEMNIFICATIONS AND GUARANTEES

During our normal course of business, we have made certain indemnities, commitments, and guarantees under which we may be required to make payments in relation to certain transactions. These indemnities include, but are not limited to, indemnities we entered into in favor of Loan Core Capital Funding Corporation LLC under our building loan agreements, various lessors in connection with facility leases for certain claims arising from such facility or lease, the environmental indemnity we entered into in favor of the lenders under our prior loan agreements, customary indemnification arrangements in underwriting agreements and similar agreements, and indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments, and guarantees varies, and in certain cases, is indefinite. In addition, the majority of these indemnities, commitments, and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. As such, we are unable to estimate with any reasonableness our potential exposure under these items. We have not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets. We do, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is both probable and reasonably estimable.

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

STOCKHOLDERS' EQUITY

11. STOCKHOLDERS' EQUITY

Common stock

Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends declared by the Board of Directors out of funds legally available, subject to prior rights of holders of all classes of stock outstanding having priority rights as to dividends.

Preferred stock conversion

Following the June 10, 2022 conversion of all outstanding Series A-1 and Series B preferred stock into shares of our common stock, the Company eliminated the Series A-1 and Series B preferred stock class by filing Certificates of Elimination with the Delaware Secretary of State.

JonesTrading Sales Agreement

Our "at the market" sales agreement with JonesTrading Institutional Services LLC and D.A. Davidson & Co. remains active; however, the authorization from our Board of Directors to sell shares of our common stock pursuant to the "at the market" sales program has expired. During the nine months ended September 30, 2023 and 2022, we did not sell any shares of our common stock pursuant to the "at the market" sales program.

Stock Repurchase Program

During the three and nine months ended September 30, 2023, we did not repurchase any shares of our common stock under our stock repurchase program. During the three months ended September 30, 2022, we did not repurchase any shares of our common stock under our stock repurchase program. During the nine months ended September 30, 2022, we repurchased $59.8 million of our common stock and $306,000 of our Series A-1 preferred stock under the stock repurchase program at average prices of $36.16 and $42.16 per share, respectively. During the nine months ended September 30, 2022, we retired 7,244 shares of our Series A-1 preferred stock treasury stock which had been previously repurchased under the stock repurchase program. The retirement increased Accumulated deficit by $306,000. As of September 30, 2023, we had $19.9 million available for future share repurchases under our current repurchase authorization through December 31, 2023.

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STOCK-BASED AWARDS

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED AWARDS

12. STOCK-BASED AWARDS

Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	11	$	32	$	41	$	99
Sales and marketing	249		5		677		595
Technology	2,286		1,735		7,317		5,517
General and administrative	3,252		2,284		9,828		7,179
Total stock-based compensation	$	5,798	$	4,056	$	17,863	$	13,390

Overstock restricted stock awards

The Overstock.com, Inc. Amended and Restated 2005 Equity Incentive Plan provides for the grant of restricted stock units to employees and directors of the Company and other types of equity awards of the Company. These restricted stock awards generally vest over three years at 33.3% at the end of the first year, 33.3% at the end of the second year and 33.4% at the end of the third year, subject to the recipient's continuing service to us.

The following table summarizes restricted stock award activity (in thousands, except per share data):

	Nine months ended September 30, 2023
	Units	Weighted Average Grant Date Fair Value
Outstanding—beginning of year	781	$	50.17
Granted at fair value	1,078	21.01
Vested	(365)	40.56
Forfeited	(128)	36.26
Outstanding—end of period	1,366	$	40.36

Employee Stock Purchase Plan

 Purchases under the Overstock.com, Inc. 2021 Employee Stock Purchase Plan (the "ESPP") during the nine months ended September 30, 2023 and 2022 were 117,687 shares and 83,570 shares, respectively, at an average purchase price per share of $16.25 and $35.41, respectively. At September 30, 2023, approximately 2.8 million shares of common stock remained available under the ESPP.

Stock-based compensation related to the ESPP is included in the stock-based compensation expense table above combined with the expense associated with our restricted stock units. Stock-based compensation related to the ESPP was $437,000 and $576,000 for the three months ended September 30, 2023 and 2022, respectively, and $1.5 million and $1.8 million for the nine months ended September 30, 2023 and 2022, respectively.

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REVENUE AND CONTRACT LIABILITY

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUE AND CONTRACT LIABILITY

13. REVENUE AND CONTRACT LIABILITY

Unearned Revenue

The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands):

	Amount
Unearned revenue at December 31, 2021	$	59,387
Increase due to deferral of revenue at period end, net	32,993
Decrease due to beginning contract liabilities recognized as revenue	(47,900)
Unearned revenue at December 31, 2022	44,480
Increase due to deferral of revenue at period end, net	31,682
Decrease due to beginning contract liabilities recognized as revenue	(28,712)
Unearned revenue at September 30, 2023	$	47,450

Our total unearned revenue related to outstanding loyalty program rewards was $11.3 million and $10.9 million at September 30, 2023 and December 31, 2022, respectively. Breakage income related to loyalty program rewards and gift cards is recognized in Net revenue in our consolidated statements of operations. Breakage included in revenue was $948,000 and $1.1 million for the three months ended September 30, 2023 and 2022, respectively, and $2.8 million and $3.3 million for the nine months ended September 30, 2023 and 2022, respectively. The timing of revenue recognition of these reward dollars is driven by actual customer activities, such as redemptions and expirations. At September 30, 2023, we had an additional $5.8 million of unearned contract revenue classified within Other long-term liabilities on our consolidated balance sheets.

Sales returns allowance

The following table provides additions to and deductions from the sales returns allowance, which is included in our Accrued liabilities balance in our consolidated balance sheets (in thousands):

	Amount
Allowance for returns at December 31, 2021	$	13,923
Additions to the allowance	161,492
Deductions from the allowance	(165,193)
Allowance for returns at December 31, 2022	10,222
Additions to the allowance	94,331
Deductions from the allowance	(96,231)
Allowance for returns at September 30, 2023	$	8,322

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NET LOSS PER SHARE

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

NET LOSS PER SHARE

14. NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(63,049)	$	(36,995)	$	(146,849)	$	(19,725)
Less: Preferred stock dividends—issued	—		—		—		1,697
Undistributed loss	(63,049)		(36,995)		(146,849)		(21,422)
Less: Undistributed loss allocated to participating securities	—		—		—		(1,227)
Net loss attributable to common stockholders	$	(63,049)	$	(36,995)	$	(146,849)	$	(20,195)
Denominator:
Weighted average shares of common stock outstanding—basic	45,225		45,708		45,164		43,954
Effect of dilutive securities:
Restricted stock awards	—		—		—		—
Weighted average shares of common stock outstanding—diluted	45,225		45,708		45,164		43,954
Net loss per share of common stock:
Basic	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)
Diluted	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)

The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Restricted stock units	1,366	833	1,366	833
Employee stock purchase plan	170	95	170	95

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net loss	$ (63,049)	$ (36,995)	$ (146,849)	$ (19,725)

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Insider Trading Arrangements	3 Months Ended	9 Months Ended
	Sep. 30, 2023 shares	Sep. 30, 2023 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Barclay F. Corbus [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On September 12, 2023, Barclay F. Corbus, a director of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 6,821 shares of Overstock.com, Inc. common stock between January 22, 2024 and February 5, 2024, subject to certain conditions.
Name	Barclay F. Corbus
Title	director
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 12, 2023
Arrangement Duration		14 days
Aggregate Available	6,821	6,821
Joanna C. Burkey [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On September 12, 2023, Joanna C. Burkey, a director of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 2,543 shares of Overstock.com, Inc. common stock between March 4, 2024 and March 5, 2024, subject to certain conditions.
Name	Joanna C. Burkey
Title	director
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 12, 2023
Arrangement Duration		1 day
Aggregate Available	2,543	2,543
Allison H. Abraham [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On September 15, 2023, Allison H. Abraham, chairwoman of the board of directors of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 5,000 shares of Overstock.com, Inc. common stock between January 24, 2024 and January 25, 2024, subject to certain conditions.
Name	Allison H. Abraham
Title	chairwoman of the board of directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 15, 2023
Arrangement Duration		1 day
Aggregate Available	5,000	5,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with our audited annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes to our significant accounting policies disclosed in Note 2—Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2022.

The accompanying unaudited consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and reflect all adjustments, consisting only of normal recurring adjustments, which are, in our opinion, necessary for a fair presentation of results for the interim periods presented. All intercompany account balances and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the full fiscal year, due to seasonality and other factors.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in our consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, loyalty program reward point and gift card breakage, sales returns, inventory valuation, asset useful lives, equity and debt securities valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities, and contingencies. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, our accounting of these estimates may change from period to period. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.

Intangible assets other than goodwill

Intangible assets other than goodwill

We capitalize and amortize intangible assets other than goodwill over their estimated useful lives unless such lives are indefinite. Intangible assets other than goodwill acquired separately from third parties are capitalized at cost, including any related direct acquisition costs, while such assets acquired as part of a business combination are capitalized at their acquisition-date fair value. Indefinite-lived intangible assets are tested for impairment annually or more frequently when events or circumstances indicate that the carrying value more likely than not exceeds its fair value. In addition, we routinely evaluate the remaining useful life of intangible assets not being amortized to determine whether events or circumstances continue to support an indefinite useful life, including any legal, regulatory, contractual, competitive, economic, or other factors that may limit their useful lives. Definite lived intangible assets are amortized using the straight-line method of amortization over their useful lives, with the exception of certain intangibles (such as acquired customer lists) which are amortized using an accelerated method of amortization based on estimated customer attrition rates. These definite lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

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FAIR VALUE MEASUREMENT (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs (in thousands): 

	Fair Value Measurements at September 30, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents—Money market funds	$	264,576	$	264,576	$	—	$	—
Equity securities, at fair value	41,091		15		—		41,076
Available-for-sale debt securities (1)	10,358		—		—		10,358
Trading securities held in a "rabbi trust" (1)	459		459		—		—
Total assets	$	316,484	$	265,050	$	—	$	51,434
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	475	$	475	$	—	$	—
Total liabilities	$	475	$	475	$	—	$	—

 

	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents—Money market funds	$	252,650	$	252,650	$	—	$	—
Equity securities, at fair value	82,823		36		—		82,787
Trading securities held in a "rabbi trust" (1)	399		399		—		—
Total assets	$	335,872	$	253,085	$	—	$	82,787
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	396	$	396	$	—	$	—
Total liabilities	$	396	$	396	$	—	$	—

___________________________________________

(1)    Included in Prepaids and other current assets and Other long-term assets, net in the consolidated balance sheets.

(2)     Included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides activity for our Level 3 investments (in thousands):

	Amount
Level 3 investments at December 31, 2021	$	102,355
Increase due to purchases of Level 3 investments	18,920
Decrease in fair value of Level 3 investments	(38,488)
Level 3 investments at December 31, 2022	82,787
Increase due to purchases of Level 3 investments	10,000
Decrease in fair value of Level 3 investments	(41,711)
Accrued interest on Level 3 investments	358
Level 3 investments at September 30, 2023	$	51,434

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PROPERTY AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment, Net [Abstract]

Property, Plant and Equipment

Property and equipment, net consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Computer hardware and software, including internal-use software and website development	$	246,875	$	240,148
Building	69,356		69,350
Land	12,781		12,781
Furniture and equipment	10,907		12,642
Building machinery and equipment	9,828		9,791
Land improvements	7,060		7,060
Leasehold improvements	1,749		2,904
	358,556		354,676
Less: accumulated depreciation	(248,895)		(244,770)
Total property and equipment, net	$	109,661	$	109,906

Capitalization of Internal Costs, Policy

Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Capitalized internal-use software and website development	$	3,069	$	1,714	$	9,350	$	5,826
Depreciation of internal-use software and website development	1,217		1,684		5,932		4,965

Schedule of Depreciation and Amortization by Operating Expense Category

Depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	170	$	171	$	610	$	509
Technology	2,940		2,997		10,930		9,143
General and administrative	928		953		2,991		2,785
Total depreciation	$	4,038	$	4,121	$	14,531	$	12,437

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INTANGIBLES ASSETS, NET (Tables)

9 Months Ended

Sep. 30, 2023

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Intangible assets subject to amortization, gross (1)	$	5,331	$	1,552
Less: accumulated amortization of intangible assets	(1,833)		(1,543)
Intangible assets subject to amortization, net	3,498		9
Intangible assets not subject to amortization	22,003		—
Total intangible assets, net	$	25,501	$	9

___________________________________________

(1)    At September 30, 2023, the weighted average remaining useful life for intangible assets subject to amortization, gross was 4.8 years.

Schedule of Indefinite-Lived Intangible Assets

Intangible assets, net consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Intangible assets subject to amortization, gross (1)	$	5,331	$	1,552
Less: accumulated amortization of intangible assets	(1,833)		(1,543)
Intangible assets subject to amortization, net	3,498		9
Intangible assets not subject to amortization	22,003		—
Total intangible assets, net	$	25,501	$	9

___________________________________________

(1)    At September 30, 2023, the weighted average remaining useful life for intangible assets subject to amortization, gross was 4.8 years.

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EQUITY SECURITIES (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Equity Securities

Equity securities consist of the following (in thousands):

	September 30, 2023		December 31, 2022
Equity securities accounted for under the equity method under ASC 323	$	128,235	$	213,494
Equity securities accounted for under the equity method under the fair value option	41,076		82,787
Equity securities under ASC 321	15		36
Total equity securities	$	169,326	$	296,317

Equity Securities Ownership Interest

The following table includes our equity securities accounted for under the equity method and related ownership interest as of September 30, 2023:

	Ownership interest
Medici Ventures, L.P.	99%
tZERO Group, Inc.	28%
SpeedRoute, LLC	49%

Equity Method Investments

The following table summarizes the net loss recognized on equity method securities recorded in Other expense, net in our consolidated statements of operations (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net loss recognized on our proportionate share of the net assets of our equity method securities	$	(41,837)	$	(17,231)	$	(85,255)	$	(20,979)
Increase (decrease) in fair value of equity method securities held under fair value option	2,691		(29,413)		(41,711)		(28,248)

Equity Method Investments, Summarized Financial Information

The following is the unaudited summarized financial information for those equity method securities that met the significance criteria for the period ended September 30, 2023, presented on a quarterly lag, (in thousands):

	Nine months ended September 30,
	2023		2022
Results of Operations
Revenues	$	1,373	$	2,070
Pre-tax loss	(15,681)		(23,151)
Net loss	(15,882)		(22,913)

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LEASES (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Components of Lease Costs and Other Operating Lease Information

The components of lease expenses were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	1,344	$	1,507	$	4,242	$	4,585
Variable lease cost	370		291		1,117		1,053

Other Lease Information

The following table provides a summary of other information related to leases (in thousands):

	Nine months ended September 30,
	2023		2022
Cash payments included in operating cash flows from lease arrangements	$	4,475	$	4,776
Right-of-use assets obtained in exchange for new operating lease liabilities	836		344

Leases, Additional Financial Information

The following table provides supplemental balance sheet information related to leases:

	September 30, 2023		December 31, 2022
Weighted-average remaining lease term—operating leases	1.67 years		2.04 years
Weighted-average discount rate—operating leases	7	%	7	%

Lessee, Operating Lease, Liability, to be Paid, Maturity

Maturity of lease liabilities under our non-cancellable operating leases as of September 30, 2023, are as follows (in thousands):

Payments due by period	Amount
2023 (Remainder)	$	1,030
2024	2,987
2025	689
2026	250
2027	83
Thereafter	—
Total lease payments	5,039
Less interest	361
Present value of lease liabilities	$	4,678

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STOCK-BASED AWARDS (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Based Compensation

Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Cost of goods sold	$	11	$	32	$	41	$	99
Sales and marketing	249		5		677		595
Technology	2,286		1,735		7,317		5,517
General and administrative	3,252		2,284		9,828		7,179
Total stock-based compensation	$	5,798	$	4,056	$	17,863	$	13,390

Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity

The following table summarizes restricted stock award activity (in thousands, except per share data):

	Nine months ended September 30, 2023
	Units	Weighted Average Grant Date Fair Value
Outstanding—beginning of year	781	$	50.17
Granted at fair value	1,078	21.01
Vested	(365)	40.56
Forfeited	(128)	36.26
Outstanding—end of period	1,366	$	40.36

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REVENUE AND CONTRACT LIABILITY (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Deferred Revenues

The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands):

	Amount
Unearned revenue at December 31, 2021	$	59,387
Increase due to deferral of revenue at period end, net	32,993
Decrease due to beginning contract liabilities recognized as revenue	(47,900)
Unearned revenue at December 31, 2022	44,480
Increase due to deferral of revenue at period end, net	31,682
Decrease due to beginning contract liabilities recognized as revenue	(28,712)
Unearned revenue at September 30, 2023	$	47,450

Schedule of Sales Returns, Reserve For Sales Returns

The following table provides additions to and deductions from the sales returns allowance, which is included in our Accrued liabilities balance in our consolidated balance sheets (in thousands):

	Amount
Allowance for returns at December 31, 2021	$	13,923
Additions to the allowance	161,492
Deductions from the allowance	(165,193)
Allowance for returns at December 31, 2022	10,222
Additions to the allowance	94,331
Deductions from the allowance	(96,231)
Allowance for returns at September 30, 2023	$	8,322

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NET LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Numerator:
Net loss	$	(63,049)	$	(36,995)	$	(146,849)	$	(19,725)
Less: Preferred stock dividends—issued	—		—		—		1,697
Undistributed loss	(63,049)		(36,995)		(146,849)		(21,422)
Less: Undistributed loss allocated to participating securities	—		—		—		(1,227)
Net loss attributable to common stockholders	$	(63,049)	$	(36,995)	$	(146,849)	$	(20,195)
Denominator:
Weighted average shares of common stock outstanding—basic	45,225		45,708		45,164		43,954
Effect of dilutive securities:
Restricted stock awards	—		—		—		—
Weighted average shares of common stock outstanding—diluted	45,225		45,708		45,164		43,954
Net loss per share of common stock:
Basic	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)
Diluted	$	(1.39)	$	(0.81)	$	(3.25)	$	(0.46)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Restricted stock units	1,366	833	1,366	833
Employee stock purchase plan	170	95	170	95

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Maximum exposure to loss	$ 27.8
GrainChain, Inc. Convertible Promissory Note Due 2025 | Convertible Debt
Debt Instrument [Line Items]
Debt instrument, face amount	$ 10.0
Annual interest rate	5.00%
Carrying amount	$ 10.4

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FAIR VALUE MEASUREMENT - Assets and Liabilities Measured At Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
Cash equivalents—Money market funds	$ 264,576	$ 252,650
Equity securities, at fair value	41,091	82,823
Available-for-sale debt securities	10,358
Trading securities held in a "rabbi trust"	459	399
Total assets	316,484	335,872
Liabilities:
Deferred compensation accrual "rabbi trust"	475	396
Total liabilities	475	396
Level 1
Assets:
Cash equivalents—Money market funds	264,576	252,650
Equity securities, at fair value	15	36
Available-for-sale debt securities	0
Trading securities held in a "rabbi trust"	459	399
Total assets	265,050	253,085
Liabilities:
Deferred compensation accrual "rabbi trust"	475	396
Total liabilities	475	396
Level 2
Assets:
Cash equivalents—Money market funds	0	0
Equity securities, at fair value	0	0
Available-for-sale debt securities	0
Trading securities held in a "rabbi trust"	0	0
Total assets	0	0
Liabilities:
Deferred compensation accrual "rabbi trust"	0	0
Total liabilities	0	0
Level 3
Assets:
Cash equivalents—Money market funds	0	0
Equity securities, at fair value	41,076	82,787
Available-for-sale debt securities	10,358
Trading securities held in a "rabbi trust"	0	0
Total assets	51,434	82,787
Liabilities:
Deferred compensation accrual "rabbi trust"	0	0
Total liabilities	$ 0	$ 0

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FAIR VALUE MEASUREMENT - Level 3 Investment Activity (Details) - Level 3 - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 82,787	$ 102,355
Increase due to purchases of Level 3 investments	10,000	18,920
Decrease in fair value of Level 3 investments	(41,711)	(38,488)
Accrued interest on Level 3 investments	358
Ending balance	$ 51,434	$ 82,787

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PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 358,556	$ 354,676
Less: accumulated depreciation	(248,895)	(244,770)
Total property and equipment, net	109,661	109,906
Computer hardware and software, including internal-use software and website development
Property, Plant and Equipment [Line Items]
Property and equipment, gross	246,875	240,148
Building
Property, Plant and Equipment [Line Items]
Property and equipment, gross	69,356	69,350
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	12,781	12,781
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	10,907	12,642
Building machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,828	9,791
Land improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,060	7,060
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,749	$ 2,904

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PROPERTY AND EQUIPMENT, NET - Capitalized Software & Website Development (Details) - Software Development - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Line Items]
Capitalized internal-use software and website development	$ 3,069	$ 1,714	$ 9,350	$ 5,826
Depreciation of internal-use software and website development	$ 1,217	$ 1,684	$ 5,932	$ 4,965

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PROPERTY AND EQUIPMENT, NET - Depreciation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Line Items]
Total depreciation	$ 4,038	$ 4,121	$ 14,531	$ 12,437
Cost of goods sold
Property, Plant and Equipment [Line Items]
Total depreciation	170	171	610	509
Technology
Property, Plant and Equipment [Line Items]
Total depreciation	2,940	2,997	10,930	9,143
General and administrative
Property, Plant and Equipment [Line Items]
Total depreciation	$ 928	$ 953	$ 2,991	$ 2,785

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INTANGIBLE ASSETS, NET - Narrative (Details) $ in Thousands	Jun. 28, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Purchase price of intangible assets, including direct acquisition related costs	$ 25,600
Trade Names
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets acquired	21,800
Customer Lists
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets acquired	$ 3,800
Finite-lived intangible assets, useful life	5 years

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INTANGIBLE ASSETS, NET - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Intangible assets subject to amortization, gross	$ 5,331	$ 1,552
Less: accumulated amortization of intangible assets	(1,833)	(1,543)
Intangible assets subject to amortization, net	3,498	9
Intangible assets not subject to amortization	22,003	0
Intangible assets, net	$ 25,501	$ 9
Weighted average remaining useful life (in years)	4 years 9 months 18 days

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EQUITY SECURITIES - Summary Of Equity Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Equity Securities [Line Items]
Equity securities accounted for under the equity method under ASC 323	$ 128,235	$ 213,494
Equity securities accounted for under the equity method under the fair value option	41,091	82,823
Total equity securities	169,326	296,317
Fair Value, Recurring
Schedule of Equity Securities [Line Items]
Equity securities accounted for under the equity method under the fair value option	41,100
Level 3
Schedule of Equity Securities [Line Items]
Equity securities accounted for under the equity method under the fair value option	41,076	82,787
Level 1
Schedule of Equity Securities [Line Items]
Equity securities accounted for under the equity method under the fair value option	$ 15	$ 36

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EQUITY SECURITIES - Equity Securities Accounted Under ASC 323 And Ownership Interest (Details) - Overstock.com, Inc.	9 Months Ended
	Sep. 30, 2023
Medici Ventures, L.P.
Schedule of Equity Method Investments [Line Items]
Limited liability company or limited partnership, members or limited partner, ownership interest (in percent)	99.00%
tZero.com, Inc.
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage (in percent)	28.00%
SpeedRoute
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage (in percent)	49.00%

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EQUITY SECURITIES (Details) - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]
Total equity securities	$ 169,326	$ 296,317
Equity securities, at fair value	41,091	$ 82,823
Fair Value, Recurring
Schedule of Equity Method Investments [Line Items]
Equity securities, at fair value	$ 41,100

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EQUITY SECURITIES - Net Gain (Loss) Recognized On Equity Method Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]
Net loss recognized on our proportionate share of the net assets of our equity method securities	$ (41,837)	$ (17,231)	$ (85,255)	$ (20,979)
Increase (decrease) in fair value of equity method securities held under fair value option	$ 2,691	$ (29,413)	$ (41,711)	$ (28,248)

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EQUITY SECURITIES - Summarized Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Results of Operations
Pre-tax loss	$ (76,460)	$ (39,648)	$ (171,517)	$ (17,757)
Net loss	$ (63,049)	$ (36,995)	(146,849)	(19,725)
tZero.com, Inc.
Results of Operations
Revenues			1,373	2,070
Pre-tax loss			(15,681)	(23,151)
Net loss			$ (15,882)	$ (22,913)

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BORROWINGS (Details) - USD ($) $ in Thousands	Mar. 06, 2020	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term debt, net		$ 34,232	$ 34,476
Senior Notes
Debt Instrument [Line Items]
Minimum net worth required for mezzanine note duration		30,000
Minimum liquid assets compliance for duration of mezzanine note		3,000
Minimum net work required for compliance		15,000
Minimum liquid assets		1,000
Loan Core Capital Funding Corporation
Debt Instrument [Line Items]
Senior & Mezzanine Note Total Outstanding		35,300
Debt issuance costs		331
Senior & Mezzanine Note Current liabilities		$ 1,100
Loan Core Capital Funding Corporation | Senior Notes
Debt Instrument [Line Items]
Long-term debt, net	$ 34,500
Annual interest rate	4.242%
Term (in years)	10 years
Loan Core Capital Funding Corporation | Mezzanine Note
Debt Instrument [Line Items]
Long-term debt, net	$ 13,000
Annual interest rate	5.002%
Term (in years)	10 years
Principal and interest only payments	46 months
Loan Core Capital Funding Corporation | Senior and Mezzanine Blended Rate
Debt Instrument [Line Items]
Annual interest rate	4.45%

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LEASES - Additional Information (Details)	Sep. 30, 2023
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term (in years)	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term (in years)	4 years

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LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lease, Cost [Abstract]
Operating lease cost	$ 1,344	$ 1,507	$ 4,242	$ 4,585
Variable lease cost	$ 370	$ 291	$ 1,117	$ 1,053

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LEASES - Other Information Related To Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Cash payments included in operating cash flows from lease arrangements	$ 4,475	$ 4,776
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 836	$ 344

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LEASES - Supplemental Balance Sheet Information (Details)	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Weighted-average remaining lease term—operating leases	1 year 8 months 1 day	2 years 14 days
Weighted-average discount rate—operating leases	7.00%	7.00%

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LEASES - Operating Lease Maturities and Future Minimum Payments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity
2023 (Remainder)	$ 1,030
2024	2,987
2025	689
2026	250
2027	83
Thereafter	0
Total lease payments	5,039
Less interest	361
Present value of lease liabilities	$ 4,678

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STOCKHOLDERS' EQUITY - Common Stock (Details)	Sep. 30, 2023 vote
Equity [Abstract]
Common stock, number of votes	1

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STOCKHOLDERS' EQUITY - JonesTrading Agreements (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Equity [Abstract]
Proceeds from issuance of common stock	$ 0	$ 0

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STOCKHOLDERS' EQUITY - Stock Repurchase Program (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Class of Stock [Line Items]
Remaining authorized repurchase amount	$ 19,900,000		$ 19,900,000
Accumulated deficit
Class of Stock [Line Items]
Conversion and elimination of preferred stock				$ 306,000
Common Stock
Class of Stock [Line Items]
Payments for repurchase of common stock	$ 0	$ 0	$ 0	$ 59,800,000
Average price per share of shares repurchased (in dollars per share)				$ 36.16
Series A-1 Preferred Stock
Class of Stock [Line Items]
Payments for repurchase of preferred stock and preference stock				$ 306,000
Average price per share of shares repurchased (in dollars per share)				$ 42.16
Conversion and elimination of preferred stock				7,244

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STOCK-BASED AWARDS - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 5,798	$ 4,056	$ 17,863	$ 13,390
Cost of goods sold
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	11	32	41	99
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	249	5	677	595
Technology
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	2,286	1,735	7,317	5,517
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 3,252	$ 2,284	$ 9,828	$ 7,179

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STOCK-BASED AWARDS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock-Based Awards
Stock issued during period, employee stock purchase plan (in shares)			117,687	83,570
Average price per share (in dollars per share)			$ 16.25	$ 35.41
Restricted Stock Awards | First year
Stock-Based Awards
Annual award vesting percentage			33.30%
Restricted Stock Awards | Second year
Stock-Based Awards
Annual award vesting percentage			33.30%
Restricted Stock Awards | Third year
Stock-Based Awards
Annual award vesting percentage			33.40%
Employee Stock
Stock-Based Awards
Number of shares available under plan (in shares)	2,800,000		2,800,000
Employee benefits and share-based compensation	$ 437	$ 576	$ 1,500	$ 1,800

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STOCK-BASED AWARDS - Restricted Stock Activity (Details) - Restricted Stock Awards shares in Thousands	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Units
Outstanding-beginning of year (in shares) | shares	781
Granted at fair value (in shares) | shares	1,078
Vested (in shares) | shares	(365)
Forfeited (in shares) | shares	(128)
Outstanding-end of period (in shares) | shares	1,366
Weighted Average Grant Date Fair Value
Outstanding-beginning of year (in dollars per share) | $ / shares	$ 50.17
Granted at fair value (in dollars per share) | $ / shares	21.01
Vested (in dollars per share) | $ / shares	40.56
Forfeited (in dollars per share) | $ / shares	36.26
Outstanding-end of period (in dollars per share) | $ / shares	$ 40.36

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REVENUE AND CONTRACT LIABILITY - Deferred Revenue (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Beginning balance	$ 44,480	$ 59,387
Increase due to deferral of revenue at period end, net	31,682	32,993
Decrease due to beginning contract liabilities recognized as revenue	(28,712)	(47,900)
Ending balance	$ 47,450	$ 44,480

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REVENUE AND CONTRACT LIABILITY - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Unearned revenue	$ 47,450		$ 47,450		$ 44,480
Gift card and club o rewards breakage	948	$ 1,100	2,800	$ 3,300
Contract with Customer, Liability, Noncurrent	5,800		5,800
Club O Reward Points
Disaggregation of Revenue [Line Items]
Unearned revenue	$ 11,300		$ 11,300		$ 10,900

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REVENUE AND CONTRACT LIABILITY - Sales Returns Allowance (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Beginning balance	$ 10,222	$ 13,923
Additions to the allowance	94,331	161,492
Deductions from the allowance	(96,231)	(165,193)
Ending balance	$ 8,322	$ 10,222

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NET LOSS PER SHARE - Income & Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net loss	$ (63,049)	$ (36,995)	$ (146,849)	$ (19,725)
Less: Preferred stock dividends—issued	0	0	0	1,697
Undistributed loss	(63,049)	(36,995)	(146,849)	(21,422)
Less: Undistributed loss allocated to participating securities	0	0	0	(1,227)
Net loss attributable to common stockholders	$ (63,049)	$ (36,995)	$ (146,849)	$ (20,195)
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Basic	45,225,000	45,708,000	45,164,000	43,954,000
Restricted stock awards	0	0	0	0
Diluted	45,225,000	45,708,000	45,164,000	43,954,000
Net loss per share of common stock:
Basic	$ (1.39)	$ (0.81)	$ (3.25)	$ (0.46)
Diluted	$ (1.39)	$ (0.81)	$ (3.25)	$ (0.46)

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NET LOSS PER SHARE - Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Payment Arrangement
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	1,366	833	1,366	833
Employee Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	170	95	170	95