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 June 30, 2022.

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to

Commission file number 001-38134

Blue Apron Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	81-4777373
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
28 Liberty Street, New York, New York	10005
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (347) 719-4312

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

Title of Each Class	Trading Symbol	Name of Exchange on Which Registered
Class A Common Stock, $0.0001 par value per share	APRN	New York Stock Exchange LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☒
Non-accelerated filer ☐

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 ☒

Indicate the number of shares outstanding of each class of the issuer’s common stock as of the latest practicable date.

Class	Number of Shares Outstanding
Class A Common Stock, $0.0001 par value	34,795,727 shares outstanding as of June 30, 2022
Class B Common Stock, $0.0001 par value	0 shares outstanding as of June 30, 2022
Class C Capital Stock, $0.0001 par value	0 shares outstanding as of June 30, 2022

BLUE APRON HOLDINGS, INC.

TABLE OF CONTENTS

PART I		FINANCIAL INFORMATION
	Item 1.	Consolidated Financial Statements (unaudited)	4
		Consolidated Balance Sheets	4
		Consolidated Statements of Operations	5
		Consolidated Statements of Stockholders’ Equity	6
		Consolidated Statements of Cash Flows	7
		Notes to Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
	Item 4.	Controls and Procedures	44
PART II		OTHER INFORMATION
	Item 1.	Legal Proceedings	44
	Item 1A.	Risk Factors	45
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79
	Item 3.	Defaults Upon Senior Securities	80
	Item 4.	Mine Safety Disclosures	80
	Item 5.	Other Information	80
	Item 6.	Exhibits	81
SIGNATURES			83

1

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans, and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the “Risk Factors” section and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:

● our expectations regarding our expenses and revenue, our ability to grow adjusted EBITDA and achieve or maintain profitability, the sufficiency of our cash resources and our ability to operate as a going concern in the event that certain related party transactions do not close as expected, the company’s ability, including the timing and extent, to sufficiently manage costs and to fund investments in its operations in amounts necessary to maintain compliance with financial and other covenants under its indebtedness, while continuing to support the execution of its growth strategy on the company’s anticipated timelines;

● our ability, including the timing and extent, to successfully support the execution of our growth strategy, (including the ability to successfully increase marketing and technology improvements on our planned timeline, if at all), cost-effectively attract new customers and retain existing customers, including our ability to sustain any increase in demand resulting from both our growth strategy and the COVID-19 pandemic, and/or our ability to continue to expand our product offerings and distribution channels, and to continue to execute operational efficiency practices;

● our expectations regarding, and the stability of, our supply chain, including potential shortages, interruptions or continued increased costs in the supply or delivery of ingredients, and parcel and freight carrier interruptions or delays and/or higher freight or fuel costs, as a result of inflation or otherwise;

● changes in consumer behaviors, tastes, and preferences that could lead to changes in demand, including as a result of, among other things, the impact of inflation or other macroeconomic factors¸ and to some extent, long-term impacts on consumer behavior, and spending habits;

● our ability to attract and retain qualified employees and personnel in sufficient numbers;

● any material and adverse impact of the COVID-19 pandemic or any future surges, including as a result of new variants and subvariants of the virus, on our operations and results, such as challenges in employee recruiting and retention, any prolonged closures, or series of temporary closures, of one or both of our fulfillment centers, supply chain or carrier interruptions or delays, and any resulting need to cancel or shift customer orders;

● our ability to effectively compete;

2

● our ability to maintain and grow the value of our brand and reputation;

● our ability to achieve our environmental, sustainability and corporate governance goals (“ESG”) on our anticipated timeframe, if at all;

● our ability to maintain food safety and prevent food-borne illness incidents and our susceptibility to supplier-initiated recalls;

● our ability, including the timing and extent, to sufficiently manage costs and to fund investments in our operations in amounts necessary to maintain compliance with financial, ESG, and other covenants under our indebtedness while continuing to support the execution of our growth strategy on our anticipated timelines;

● our ability to comply with modified or new laws and regulations applying to our business, or the impact that such compliance may have on our business;

● our vulnerability to adverse weather conditions, natural disasters, wars, and public health crises, including pandemics; and

● our ability to obtain and maintain intellectual property protection.

While we may elect to update these forward-looking statements at some point in the future, whether as a result of any new information, future events, or otherwise, we have no current intention of doing so except to the extent required by applicable law.

3

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

BLUE APRON HOLDINGS, INC.

Consolidated Balance Sheets

(In thousands, except share and per-share data)

(Unaudited)

	June 30,		December 31,
	2022		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	54,028	$	82,160
Accounts receivable, net		276		234
Related party receivables		10,000		—
Inventories, net		28,856		24,989
Prepaid expenses and other current assets		15,519		12,249
Total current assets		108,679		119,632
Property and equipment, net		100,397		108,355
Other noncurrent assets		6,995		3,719
TOTAL ASSETS	$	216,071	$	231,706
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	40,653	$	27,962
Current portion of related party payables		6,000		—
Current portion of long-term debt		—		3,500
Accrued expenses and other current liabilities		29,507		31,951
Deferred revenue		13,308		7,958
Warrant obligation		—		8,001
Total current liabilities		89,468		79,372
Long-term debt		27,217		25,886
Facility financing obligation		35,832		35,886
Related party payables		3,000		—
Other noncurrent liabilities		8,156		10,509
TOTAL LIABILITIES		163,673		151,653
Commitments and contingencies (Note 10)
STOCKHOLDERS’ EQUITY:
Class A common stock, par value of $0.0001 per share — 1,500,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 34,795,727 and 31,694,400 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		3		3
Class B common stock, par value of $0.0001 per share — 175,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021		—		—
Class C capital stock, par value of $0.0001 per share — 500,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021		—		—
Additional paid-in capital		780,481		746,564
Accumulated deficit		(728,086)		(666,514)
TOTAL STOCKHOLDERS’ EQUITY		52,398		80,053
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	216,071	$	231,706

The accompanying notes are an integral part of these Consolidated Financial Statements.

4

BLUE APRON HOLDINGS, INC.

Consolidated Statements of Operations

(In thousands, except share and per-share data)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net revenue	$	124,237	$	124,010	$	241,988	$	253,716
Operating expenses:
Cost of goods sold, excluding depreciation and amortization		81,158		77,585		160,648		159,177
Marketing		21,776		16,316		49,690		36,256
Product, technology, general and administrative		38,510		36,802		81,767		73,353
Depreciation and amortization		5,464		5,612		10,868		11,232
Total operating expenses		146,908		136,315		302,973		280,018
Income (loss) from operations		(22,671)		(12,305)		(60,985)		(26,302)
Gain (loss) on extinguishment of debt		650		(4,089)		650		(4,089)
Interest income (expense), net		(1,435)		(2,731)		(3,205)		(4,439)
Other income (expense), net		387		548		2,033		548
Income (loss) before income taxes		(23,069)		(18,577)		(61,507)		(34,282)
Benefit (provision) for income taxes		(54)		(10)		(65)		(26)
Net income (loss)	$	(23,123)	$	(18,587)	$	(61,572)	$	(34,308)
Net income (loss) per share attributable to Class A and Class B common stockholders:
Basic	$	(0.68)	$	(0.98)	$	(1.86)	$	(1.86)
Diluted	$	(0.68)	$	(0.98)	$	(1.86)	$	(1.86)
Weighted-average shares used to compute net income (loss) per share attributable to Class A and Class B common stockholders:
Basic		34,073,695		18,876,600		33,185,992		18,410,729
Diluted		34,073,695		18,876,600		33,185,992		18,410,729

The accompanying notes are an integral part of these Consolidated Financial Statements.

5

BLUE APRON HOLDINGS, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)

	Class A			Class B			Additional				Total
	Common Stock			Common Stock			Paid-In		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
2022
Balance — December 31, 2021	31,694,400	$	3	—	$	—	$	746,564	$	(666,514)	$	80,053
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	120,981		0	—		—		0		—		—
Issuance of common stock upon exercise of warrants	488,055		0	—		—		4,096		—		4,096
Issuance of common stock from the February 2022 Private Placement, net of issuance costs	357,143		0	—		—		4,809		—		4,809
Share-based compensation	—		—	—		—		2,233		—		2,233
Net income (loss)	—		—	—		—		—		(38,449)		(38,449)
Balance — March 31, 2022	32,660,579	$	3	—	$	—	$	757,702	$	(704,963)	$	52,742
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	191,487		0	—		—		0		—		—
Issuance of common stock upon exercise of warrants	235,329		0	—		—		953		—		953
Issuance of common stock from the April 2022 Private Placements, net of issuance costs	1,708,332		0	—		—		20,027		—		20,027
Share-based compensation	—		—	—		—		1,799		—		1,799
Net income (loss)	—		—	—		—		—		(23,123)		(23,123)
Balance — June 30, 2022	34,795,727	$	3	—	$	—	$	780,481	$	(728,086)	$	52,398
2021
Balance — December 31, 2020	14,365,664	$	1	3,493,791	$	1	$	642,106	$	(578,133)	$	63,975
Conversion from Class B to Class A common stock	100,000		0	(100,000)		(0)		—		—		—
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	191,595		0	—		—		0		—		—
Share-based compensation	—		—	—		—		2,366		—		2,366
Net income (loss)	—		—	—		—		—		(15,721)		(15,721)
Balance — March 31, 2021	14,657,259	$	1	3,393,791	$	1	$	644,472	$	(593,854)	$	50,620
Conversion from Class B to Class A common stock	83		0	(83)		(0)		—		—		—
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	138,389		0	—		—		0		—		—
Issuance of common stock, net of offering costs	5,411,900		1	—		—		21,143		—		21,144
Share-based compensation	—		—	—		—		3,300		—		3,300
Net income (loss)	—		—	—		—		—		(18,587)		(18,587)
Balance — June 30, 2021	20,207,631	$	2	3,393,708	$	1	$	668,915	$	(612,441)	$	56,477

The accompanying notes are an integral part of these Consolidated Financial Statements.

6

BLUE APRON HOLDINGS, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(61,572)	$	(34,308)
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities:
Depreciation and amortization of property and equipment		10,868		11,232
Loss (gain) on disposal of property and equipment		135		—
Loss (gain) on extinguishment of debt		(650)		4,089
Loss (gain) upon derecognition of Blue Torch warrant obligation		(214)		—
Changes in fair value of warrant obligation		(1,819)		(548)
Changes in reserves and allowances		66		132
Share-based compensation		4,039		5,465
Non-cash interest expense		450		807
Changes in operating assets and liabilities:
Accounts receivable		(43)		9
Related party receivables		(10,000)		—
Inventories		(3,907)		(4,719)
Prepaid expenses and other current assets		(3,620)		8,439
Accounts payable		12,632		16,515
Current portion of related party payables		6,000		—
Accrued expenses and other current liabilities		(4,041)		(19,110)
Deferred revenue		5,350		(312)
Related party payables		3,000		—
Other noncurrent assets and liabilities		(3,794)		1,431
Net cash from (used in) operating activities		(47,120)		(10,878)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2,985)		(3,009)
Proceeds from sale of property and equipment		111		1,302
Net cash from (used in) investing activities		(2,874)		(1,707)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from debt issuances		28,200		—
Net proceeds from equity and warrant issuances		25,500		21,571
Repayments of debt		(30,625)		(1,750)
Payments of debt and equity issuance costs		(1,143)		(572)
Receipt of funds held in escrow		—		5,000
Release of funds held in escrow		—		(5,000)
Principal payments on capital lease obligations		(69)		(77)
Net cash from (used in) financing activities		21,863		19,172
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(28,131)		6,587
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period		83,597		45,842
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	55,466	$	52,429
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes, net of refunds	$	65	$	60
Cash paid for interest	$	3,456	$	3,494
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:
Non-cash additions to property and equipment	$	163	$	223
Purchases of property and equipment in Accounts payable and Accrued expenses and other current liabilities	$	497	$	265

The accompanying notes are an integral part of these Consolidated Financial Statements.

7

BLUE APRON HOLDINGS, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization and Description of Business

When used in these notes, Blue Apron Holdings, Inc. and its subsidiaries are collectively referred to as the “Company.”

The Company designs original recipes with fresh, seasonally-inspired produce and high-quality ingredients, which are sent directly to customers for them to prepare, cook, and enjoy. The Company creates meal experiences around original recipes every week based on what’s in-season with farming partners and other suppliers. Customers can choose which recipes they would like to receive in a given week, and the Company delivers those recipes to their doorsteps along with the pre-portioned ingredients required to cook those recipes.

In addition to meals, the Company sells wine through Blue Apron Wine, a direct-to-consumer wine delivery service. The Company also sells a curated selection of cooking tools, utensils, pantry items, and add-on products for different culinary occasions through Blue Apron Market, its e-commerce market.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The unaudited interim Consolidated Financial Statements (the “Consolidated Financial Statements”) have been prepared on the same basis as the audited Consolidated Financial Statements, and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2022 and December 31, 2021, results of operations for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. These unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2022 (the “Annual Report”). There have been no material changes in the Company's significant accounting policies from those that were disclosed in Note 2, Summary of Significant Accounting Policies, included in the Annual Report, except those additional significant policies as described within the accompanying notes to the Consolidated Financial Statements.

The accompanying Consolidated Financial Statements include the accounts of Blue Apron Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its Consolidated Financial Statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”).

Liquidity and Going Concern Evaluation

Under Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company is required to evaluate whether there is substantial doubt regarding its ability to continue as a going concern each reporting period, including interim periods.

In this evaluation, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within twelve months of the issuance date of this Quarterly Report on Form 10-Q, and considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, and the Company’s conditional and unconditional obligations before such date.

8

The Company has a history of significant net losses, including $61.6 million and $34.3 million for the six months ended June 30, 2022, and 2021, respectively, and operating cash flows of $(47.1) million and $(10.9) million for the six months ended June 30, 2022, and 2021, respectively. The Company's current operating plan indicates it will continue to incur net losses and generate negative cash flows from operating activities.

On May 5, 2022, the Company entered into a Note Purchase and Guarantee Agreement (the “note purchase agreement”), the proceeds of which were used, together with cash on hand, to repay in full and terminate its previous financing agreement. The note purchase agreement contains two financial maintenance covenants: (i) a minimum liquidity covenant that is set between $15.0 million and $25.0 million, depending on the results of the most recently performed Asset Valuation (as defined in the note purchase agreement), for any date subsequent to June 30, 2022, including within required cash flow forecasts provided to the noteholders, and (ii) a covenant requiring a minimum Asset Coverage Ratio (as defined in the note purchase agreement) of at least 1.25 to 1.00.

As of the date of this Quarterly Report on Form 10-Q, the Company’s initial Asset Valuation has not been completed, with the minimum liquidity covenant therefore currently set at $25.0 million. As of June 30, 2022, the Company had cash and cash equivalents of $54.0 million and total outstanding debt of $27.2 million, net of unamortized debt issuance costs, all of which was classified as long-term debt. The Company was in compliance with all of the covenants under the note purchase agreement as of June 30, 2022.

On April 29, 2022, the Company entered into a purchase agreement with RJB Partners LLC (“RJB”)(the “RJB April 2022 Purchase Agreement”), an affiliate of Joseph N. Sanberg, an existing stockholder of the Company. Under the RJB April 2022 Purchase Agreement, the Company agreed to issue and sell 3,333,333 shares of Class A common stock for an aggregate purchase price of $40.0 million (or $12.00 per share), of which 1,666,667 shares of Class A common stock were issued and sold to an affiliate of Joseph N. Sanberg for an aggregate purchase price of $20.0 million concurrently with the execution of the agreement, and with the remainder to be issued and sold under a second closing, initially expected to close by May 30, 2022 or such other date as agreed to by the parties.

On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase from the Company (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total, as well as agreeing to extend the date of the second closing to on or before August 31, 2022. The Company expects to invest these proceeds in its long-term growth plan, or for general corporate purposes. The Company may use up to $25.0 million for strategic purposes aimed at enhancing shareholder value, including exploring share buybacks. RJB’s obligation to complete the second closing is not subject to closing conditions, and, pursuant to such amendment, Joseph N. Sanberg has agreed to personally guarantee the payment of the aggregate purchase price of $50.0 million.

In addition, on May 5, 2022, the Company entered into a gift card sponsorship agreement with an affiliate of Joseph N. Sanberg (the “May Sponsorship Gift Cards Agreement”), pursuant to which such affiliate agreed to pay the Company a $20.0 million net sponsorship fee to support a marketing program through which the Company will distribute gift cards, at the Company’s sole discretion, in order to support its growth strategy. On August 7, 2022, the Company amended the May Sponsorship Gift Cards Agreement to extend the funding date to on or before August 31 2022, and pursuant to which, Joseph N. Sanberg personally guaranteed his affiliate’s obligation.

Without the liquidity provided by the second closing of the RJB April 2022 Purchase Agreement and the funding of the May Sponsorship Gift Cards Agreement (collectively, the “liquidity transactions”), the Company's forecast of future cash flows indicates that such cash flows would not be sufficient for the Company to maintain compliance under its minimum liquidity covenant for a period of twelve months following the issuance date of this Quarterly Report on Form 10-Q, which would result in an event of default under the note purchase agreement. Upon such event of default, the noteholders could declare all outstanding principal and interest be due and payable immediately and foreclose against the assets securing the borrowings. If the Company would be unable to obtain a waiver or successfully renegotiate the terms of its note purchase agreement, and the noteholders enforced one or more of their rights upon default, the Company would be unable to meet its current obligations.

9

While management was able to obtain personal guarantees from Joseph N. Sanberg relating to his affiliates’ obligations to fund the liquidity transactions via the executed amendments above, which upon receipt of such proceeds would alleviate substantial doubt, there is no assurance that the liquidity transactions will be consummated in a timely manner, in amounts that are sufficient to maintain the Company's compliance under its minimum liquidity covenant, or on terms acceptable to the Company, or at all. Although the Company has been reviewing a number of potential alternatives regarding maintaining compliance with its minimum liquidity covenant, including cost reduction initiatives, renegotiating the terms of its note purchase agreement, and/or alternative sources for additional financing, such alternatives may not be achievable on favorable conditions, or at all, and these conditions and events in the aggregate raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s Consolidated Financial Statements do not include any adjustments that may result from the outcome of this uncertainty and have been prepared assuming the Company will continue as a going concern.

Use of Estimates

In preparing its Consolidated Financial Statements in accordance with GAAP, the Company is required to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, costs, and expenses, and disclosure of contingent assets and liabilities which are reported in the Consolidated Financial Statements and accompanying disclosures. The accounting estimates that require the most difficult and subjective judgments include revenue recognition, inventory valuation, leases, the fair value of share-based awards, the fair value of the Blue Torch warrant obligation, recoverability of long-lived assets, and the recognition and measurement of contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from the Company’s estimates and assumptions.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act. This classification has allowed the Company to elect to take advantage of the extended transition period afforded for the implementation of new or revised accounting standards. The Company expects to lose its emerging growth company status on December 31, 2022, and as a result, will adopt all accounting pronouncements currently deferred under the emerging growth company election according to public company standards beginning with its Annual Report on Form 10-K for the year ending December 31, 2022, including interim period disclosures within that filing. The adoption dates for the new accounting pronouncements disclosed below have been presented accordingly.

Smaller Reporting Company Status

The Company is a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, and therefore qualifies for reduced disclosure requirements for smaller reporting companies.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued its standard on lease accounting, Accounting Standards Update No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases. Subsequent to February 2016, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments, ASU No. 2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, ASU No. 2019-01, Leases (Topic 842): Codification Improvements, ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, to improve and clarify certain aspects of ASU No. 2016-02, as well as to defer its effective date for certain entities, and ASU No. 2021-05, Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments. For the Company, the new standard is effective for annual periods beginning January 1, 2022, and interim periods beginning January 1, 2023. Upon adoption of this standard, the Company expects to recognize, on a discounted basis, its minimum commitments under non-cancelable operating leases on the Consolidated Balance Sheets resulting in the recording of

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right-of-use assets and lease obligations. The Company is currently evaluating any additional impacts this guidance will have on its Consolidated Financial Statements.

In December 2019, the FASB issued Accounting Standards Update No. 2019-12 (“ASU 2019-12”), Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The standard is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well as improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For the Company, the amendments in ASU 2019-12 are effective for annual periods beginning January 1, 2022, and interim periods beginning January 1, 2023. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements.

3. Inventories, Net

Inventories, net consist of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Fulfillment	$	2,721	$	1,879
Product		26,135		23,110
Inventories, net	$	28,856	$	24,989

Product inventory primarily consists of bulk and prepped food, containers, pre-made meals, products available for resale, and wine products. Fulfillment inventory consists of packaging used for shipping and handling. Product and fulfillment inventories are recognized as components of Cost of goods sold, excluding depreciation and amortization in the accompanying Consolidated Statements of Operations when sold.

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Prepaid insurance	$	7,599	$	6,929
Other current assets		7,920		5,320
Prepaid expenses and other current assets	$	15,519	$	12,249

5. Restricted Cash

Restricted cash reflects pledged cash deposited into savings accounts that is used as security primarily for fulfillment centers and office space leases.

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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts reported in the Consolidated Statements of Cash Flows:

	June 30,		December 31,
	2022		2021
	(in thousands)
Cash and cash equivalents	$	54,028	$	82,160
Restricted cash included in Prepaid expenses and other current assets		369		608
Restricted cash included in Other noncurrent assets		1,069		829
Total cash, cash equivalents, and restricted cash	$	55,466	$	83,597
	June 30,		December 31,
	2021		2020
	(in thousands)
Cash and cash equivalents	$	50,990	$	44,122
Restricted cash included in Prepaid expenses and other current assets		536		610
Restricted cash included in Other noncurrent assets		903		1,110
Total cash, cash equivalents, and restricted cash	$	52,429	$	45,842

6. Property and Equipment, Net

Property and equipment, net consists of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Computer equipment	$	12,078	$	11,556
Capitalized software		26,730		24,163
Fulfillment equipment		51,741		52,058
Furniture and fixtures		2,727		2,730
Leasehold improvements		32,825		32,507
Buildings(1)		114,877		114,877
Construction in process(2)		1,317		1,746
Property and equipment, gross		242,295		239,637
Less: accumulated depreciation and amortization		(141,898)		(131,282)
Property and equipment, net	$	100,397	$	108,355

(1) Buildings includes a build-to-suit lease arrangement in Linden, New Jersey where the Company is considered the owner for accounting purposes, and as of June 30, 2022 and December 31, 2021, contained $31.3 million of the capitalized fair value of the building, $80.8 million of costs incurred directly by the Company relating to this arrangement, and $2.8 million of capitalized interest for related construction projects. The Company capitalized the cost of interest for the related construction projects based on the applicable capitalization rate for the project.

(2) Construction in process includes all costs capitalized related to projects that have not yet been placed in service.

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7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Accrued compensation	$	11,190	$	11,490
Accrued credits and refunds reserve		1,282		1,258
Accrued marketing expenses		3,933		7,095
Accrued shipping expenses		2,114		1,344
Accrued workers' compensation reserve		4,352		3,358
Other current liabilities		6,636		7,406
Accrued expenses and other current liabilities	$	29,507	$	31,951

8. Deferred Revenue

Deferred revenue consists of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Cash received prior to fulfillment	$	2,727	$	4,861
March Sponsorship Gift Cards		8,558		—
Gift cards, prepaid orders, and other		2,023		3,097
Deferred revenue	$	13,308	$	7,958

Under ASC 606, Revenue from Contracts with Customers, the Company has two types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased, which are included in Deferred revenue on the Consolidated Balance Sheets, and are recognized as revenue upon transfer of control of its products, and (ii) unredeemed gift cards and other prepaid orders, which are included in Deferred revenue on the Consolidated Balance Sheets, and are recognized as revenue when gift cards are redeemed and the products are delivered. Certain gift cards are not expected to be redeemed, also known as breakage, and are recognized as revenue over the expected redemption period, subject to requirements to remit balances to governmental agencies.

Contractual liabilities included in Deferred revenue on the Consolidated Balance Sheets were $13.3 million and $8.0 million as of June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 2022, the Company recognized $6.5 million to Net revenue from the Deferred revenue as of December 31, 2021.

See Note 13 for further information regarding the March Sponsorship Gift Cards.

9. Debt

2020 and 2021 Term Loans

On October 16, 2020, the Company entered into a financing agreement which provided for a senior secured term loan in the aggregate principal amount of $35.0 million (the “2020 Term Loan”). The 2020 Term Loan bore interest at a rate equal to LIBOR (subject to a 1.50% floor) plus 8.00% per annum, with the principal amount repayable in equal quarterly installments of $875,000 through December 31, 2022, and the remaining unpaid principal amount of the 2020 Term Loan due on March 31, 2023.

On May 5, 2021 (the “closing date”), the Company amended the financing agreement (the “Amendment”), which modified certain provisions of the financing agreement, such as increasing the interest rate margin on the 2020 Term Loan by 1.00% per annum, resulting in the 2020 Term Loan bearing interest, from and after the closing date, at a rate equal to LIBOR (subject to a 1.50% floor) plus 9.00% per annum. In addition, the Amendment provided for a $5.0

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million term loan (the “2021 Term Loan”) that was funded into an escrow account and subsequently released in full from the escrow account to the lenders upon the Company’s completion of an underwritten public offering in June 2021.

The Company evaluated the Amendment under ASC 470-50 regarding the modification of an existing debt instrument, which states that if the modification of the terms of an existing debt agreement is considered substantial, the transaction shall be accounted for as an extinguishment, with the amended debt instrument then initially recorded at fair value. The Company concluded that the modification was considered substantial, and qualified for extinguishment accounting under such guidance. Accordingly, the Company recorded a $4.1 million extinguishment loss in the Consolidated Statements of Operations, which consisted of (i) a $4.6 million loss related to the contemporaneous issuance of the Blue Torch warrant obligation, as discussed below, and (ii) a $0.1 million loss related to fees paid on behalf of the lender, which were partially offset by (iii) a $0.6 million gain related to the difference between the fair value of the modified debt instrument and the net carrying value of the debt immediately before extinguishment.

The 2020 Term Loan was repaid in full on May 5, 2022 with the proceeds of the senior secured notes issued under the note purchase agreement described below.

Blue Torch Warrant Obligation

In connection with the Amendment, the Company agreed to prospectively grant warrants (the “Blue Torch warrant obligation”) to the lenders. Under the terms of the Blue Torch warrant obligation, so long as the 2020 Term Loan remained outstanding, on the first day of each quarter beginning on July 1, 2021, the Company issued a warrant to the lenders to purchase at an exercise price of $0.01 per share such number of shares of Class A common stock of the Company as equaled 0.50% of the then outstanding shares of common stock of the Company, on a fully-diluted basis.

The Blue Torch warrant obligation was accounted for in accordance with ASC 815-40, Contracts in an Entity’s Own Equity, as a liability recognized at fair value as of the closing date, due to certain settlement provisions within the corresponding warrant obligation provisions under the financing agreement that did not meet the criteria to be classified in stockholders’ equity. The Blue Torch warrant obligation was remeasured to fair value at each balance sheet date, with changes in fair value recorded in Other income (expense), net in the Consolidated Statements of Operations. The Blue Torch warrant obligation was terminated within the termination of the Company’s financing agreement, as discussed below.

Note Purchase Agreement and Financing Agreement Transaction

On May 5, 2022 (the “issue date”), the Company entered into a Note Purchase and Guarantee Agreement (the “note purchase agreement”), which provides for, among other things, the issuance of $30.0 million in aggregate principal amount of senior secured notes due May 5, 2027 (the “senior secured notes”) at a purchase price equal to 94.00% thereof. The proceeds of the senior secured notes were used, together with cash on hand, to repay in full the outstanding amount under the 2020 Term Loan and pay fees and expenses in connection with the transactions contemplated by the note purchase agreement. The Company subsequently terminated its financing agreement, effective as of the issue date, which also resulted in the termination of the Blue Torch warrant obligation.

The Company evaluated the termination of the financing agreement under ASC 470-50 regarding the extinguishment of debt, which states that the difference between the reacquisition price and the net carrying amount of the extinguished debt shall be recognized in the current period as an extinguishment gain or loss. Accordingly, the Company recorded a $0.7 million extinguishment gain in the Consolidated Statements of Operations, which consisted of (i) a $2.6 million gain related to the allocation of the reacquisition price between the 2020 Term Loan and the Blue Torch warrant obligation, as discussed below, partially offset by (ii) a $0.9 million loss related to the 2020 Term Loan prepayment fee, (iii) a $0.9 million loss related to the derecognition of unamortized debt issuance costs, and (iv) a $0.1 million loss related to legal and consulting fees incurred.

In addition, ASC 470-50 states that if upon extinguishment of debt the parties also exchange unstated (or stated) rights or privileges, the portion of the consideration exchanged allocable to such unstated (or stated) rights or privileges shall be given appropriate accounting recognition. As such, the Company allocated a portion of the reacquisition price to

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the exchange of the Blue Torch warrant obligation, which resulted in a $0.2 million gain recorded in Other income (expense), net in the Consolidated Statements of Operations upon its derecognition.

Upon receiving a minimum specified bond rating after the issue date, as specified within the terms of the note purchase agreement, the senior secured notes bear interest at a rate equal to 8.875% per annum, payable in arrears on June 30 and December 31 of each calendar year. The senior secured notes will amortize semi-annually in equal installments of $1.5 million beginning on December 31, 2025, with the remaining unpaid principal amount of the senior secured notes due on May 5, 2027.

The note purchase agreement contains two financial maintenance covenants:

• a minimum liquidity covenant of:

i. for any date ending prior to or ending on June 30, 2022, including those within required cash flow forecasts provided to the noteholders, $15.0 million;

ii.for any date thereafter, including those within required cash flow forecasts provided to the noteholders:

• $15.0 million if the most recent Asset Valuation (as defined in the note purchase agreement) is greater than $25.0 million;

• $20.0 million if the most recent Asset Valuation is greater than $20.0 million but less than $25.0 million; or

• $25.0 million if the most recent Asset Valuation is less than or equal to $20.0 million, or is as of yet uncompleted; and

• a covenant requiring a minimum Asset Coverage Ratio (as defined in the note purchase agreement) of at least 1.25 to 1.00.

As of the date of this Quarterly Report on Form 10-Q, the Company’s initial Asset Valuation has not been completed, with the minimum liquidity covenant therefore currently set at $25.0 million. Subsequent to the initial report, the Asset Valuation is required to be provided to the noteholders no later than 30 days after June 30 and December 31 of each fiscal year.

The Company has also agreed to use commercially reasonable efforts to cause 90% of the packaging for its meal kit boxes to be recyclable, reusable, or compostable (the “ESG KPI Goal”). If the Company fails to achieve the ESG KPI Goal prior to the date on which the senior secured notes are due, the Company will be required to pay a fee equal to 1% of the principal amount of the senior secured notes.

The borrower under the note purchase agreement is the Company’s wholly-owned subsidiary, Blue Apron, LLC. The obligations under the note purchase agreement are guaranteed by Blue Apron Holdings, Inc. and its subsidiaries other than the borrower, and secured by substantially all of the assets of the borrower and the guarantors. The note purchase agreement contains additional restrictive covenants and affirmative and financial reporting covenants restricting the Company and the Company’s subsidiaries’ activities. Restrictive covenants include limitations on the incurrence of indebtedness and liens, restrictions on affiliate transactions, restrictions on the sale or other disposition of collateral, and limitations on dividends and stock repurchases.

As of June 30, 2022, the Company was in compliance with all of the covenants under the note purchase agreement.

In connection with the note purchase agreement, the Company capitalized $2.9 million in deferred financing costs in Long-term debt, which are being amortized using the effective interest method over the life of the debt, in accordance with ASC 835-30, Imputation of Interest. The following table summarizes the presentation of the Company’s debt balances in the Consolidated Balance Sheets as of the dates indicated below:

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	Senior secured notes		2020 Term Loan		Debt issuance costs, net		Net
	(In thousands)
June 30, 2022
Current portion of long-term debt	$	—	$	—	$	—	$	—
Long-term debt		30,000		—		(2,783)		27,217
Total	$	30,000	$	—	$	(2,783)	$	27,217
December 31, 2021
Current portion of long-term debt	$	—	$	3,500	$	—	$	3,500
Long-term debt		—		27,125		(1,239)		25,886
Total	$	—	$	30,625	$	(1,239)	$	29,386

Facility Financing Obligation

As of June 30, 2022 and December 31, 2021, the Company had a facility financing obligation of $35.8 million and $35.9 million, respectively, related to the leased facility in Linden, New Jersey under the build-to-suit accounting guidance.

10. Commitments and Contingencies

The Company records accruals for loss contingencies associated with legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. If the Company determines that a loss is reasonably possible, the Company discloses the matter, and, if estimable, the amount or range of the possible loss in the notes to the Consolidated Financial Statements.

In addition, from time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of such litigation and claims cannot be predicted with certainty, the Company currently believes that there are no ordinary course matters that will have a material adverse effect on its business, operating results, financial conditions, or cash flows.

11. Stockholders’ Equity (Deficit)

April 2022 Private Placements

On April 29, 2022, the Company entered into the RJB April 2022 Purchase Agreement, which provided for, among other things, 3,333,333 shares of Class A common stock for an aggregate purchase price of $40.0 million (or $12.00 per share). Long Live Bruce, LLC, an affiliate of Joseph N. Sanberg, was assigned RJB’s rights to 1,666,667 shares of Class A common stock for an aggregate purchase price of $20.0 million under the RJB April 2022 Private Placement Agreement, which was issued and sold concurrently with the execution of the purchase agreement (the “first closing”). The remainder of the Class A common shares under the RJB April 2022 Private Placement Agreement were to be issued and sold under a second closing, initially expected to close by May 30, 2022 or such other date as agreed to by the parties.

In addition, on April 29, 2022, the Company entered into a purchase agreement with Linda Findley (the “Findley April 2022 Private Placement”), a director of the Company and its President and Chief Executive Officer, under which the Company agreed to issue and sell to Ms. Findley in a separate private placement, which closed concurrently with the execution of the first closing, 41,666 shares of Class A common stock for an aggregate purchase price of $0.5 million (or $12.00 per share).

The first closing of the RJB April 2022 Private Placement and the Findley April 2022 Private Placement (collectively, the “April 2022 Private Placements”) resulted in $20.1 million of proceeds, net of issuance costs.

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On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase, in lieu of the remaining shares to be issued under the second closing, 10,000,000 shares of Class A common stock for an aggregate purchase price of $50.0 million (or $5.00 per share), as well as agreeing to extend the date of the second closing to on or before August 31, 2022. The Company expects to invest these proceeds in its long-term growth plan, or for general corporate purposes. The Company may use up to $25.0 million for strategic purposes aimed at enhancing shareholder value, including exploring share buybacks. RJB’s obligation to complete the second closing is not subject to closing conditions, and Joseph N. Sanberg has personally guaranteed fulfillment of RJB’s obligation to complete the second closing.

February 2022 Private Placement

On February 14, 2022, the Company entered into a purchase agreement with RJB, an affiliate of Joseph N. Sanberg, under which the Company agreed to issue and sell to RJB units consisting of Class A common stock and warrants to purchase shares of Class A common stock in a private placement (the “February 2022 Private Placement”) which closed concurrently with the execution of the purchase agreement for an aggregate purchase price of $5.0 million (or $14.00 per unit). In the aggregate, RJB received (i) 357,143 shares of Class A common stock, and (ii) warrants to purchase 500,000 shares of Class A common stock at exercise prices of $15.00 per share, $18.00 per share, and $20.00 per share, resulting in $4.8 million of proceeds, net of issuance costs.

The shares of Class A common stock and warrants were issued separately and constitute separate securities. The Company conducted an assessment of the classification of the warrants issued in the February 2022 Private Placement and, based on their terms, concluded the warrants were equity-classified. Accordingly, the net proceeds were recorded within Additional paid-in capital.

Each equity-classified warrant issued by the Company has a term of seven years from the date of issuance. Each such warrant may only be exercised for cash, except in connection with certain fundamental transactions, and no fractional shares will be issued upon exercise of the warrants. The warrants are non-transferable, except in limited circumstances, and have not been and will not be listed or otherwise trade on any stock exchange. The number of shares issuable upon exercise of the warrants and the applicable exercise prices is subject to adjustment upon the occurrence of certain events.

As of June 30, 2022, the equity-classified warrants issued by the Company were as follows:

	Exercise Price	Issued	Exercised	Outstanding as of June 30, 2022
$	15.00	6,525,714	—	6,525,714
$	18.00	3,262,857	—	3,262,857
$	20.00	1,631,429	—	1,631,429

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12. Share-based Compensation

The Company recognized share-based compensation for share-based awards in Cost of goods sold, excluding depreciation and amortization, and Product, technology, general and administrative expenses as follows:

	Three Months Ended
	June 30,
	2022		2021
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	-	$	14
Product, technology, general and administrative		1,704		3,132
Total share-based compensation	$	1,704	$	3,146

	Six Months Ended
	June 30,
	2022		2021
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	2	$	30
Product, technology, general and administrative		3,875		5,435
Total share-based compensation	$	3,877	$	5,465

In February 2022, the Company granted 247,161 shares of performance-based restricted stock units of its Class A common stock to certain employees, including the Company’s executive officers. Such units are subject to vesting conditions that are tied to the performance of the Company's stock price relative to the performance of a peer group of publicly traded companies’ stock price over a performance period beginning February 25, 2022 through February 25, 2025. The Company utilized the Monte Carlo simulation valuation model to value the grant as it was determined to include a market condition. The total grant date fair value was $1.3 million, and will be recognized on a straight-line basis over the performance period of three years.

13. Related Party Transactions

Due to their status as beneficial owners of more than 10 percent (10%) of the voting power of the outstanding capital stock of the Company, Joseph N. Sanberg and his affiliates meet the definition of “related parties” per ASC 850, Related Party Disclosures.

Feeding America Bulk Sale

On June 23, 2022, the Company entered into a purchase agreement with Feeding America for a bulk purchase of meal kit boxes and other bulk product items (the “Feeding America bulk sale”) for an aggregate net purchase price of $10.0 million, funded by a donation from an affiliate of Joseph N. Sanberg.

Gift Card Sponsorship Agreements

On March 11, 2022, the Company entered into a gift card sponsorship agreement (the “March Sponsorship Gift Cards”) with an affiliate of Joseph N. Sanberg, pursuant to which such affiliate agreed to pay the Company a $9.0 million net sponsorship fee to support a marketing program through which the Company would distribute gift cards, at the Company’s sole discretion, in order to support its growth strategy.

On May 5, 2022, the Company entered into the May Sponsorship Gift Cards Agreement with an affiliate of Joseph N. Sanberg, pursuant to which such affiliate agreed to pay the Company a $20.0 million net sponsorship fee to support a marketing program through which the Company will distribute gift cards, at the Company’s sole discretion, in order to support its growth strategy. On August 7, 2022, the Company amended the May Sponsorship Gift Cards Agreement to extend the funding date to on or before August 31, 2022, and pursuant to which, Joseph N. Sanberg personally guaranteed his affiliate’s obligation. However, as the Company concluded the contract did not meet the

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collectability criterion under ASC 606, Revenue from Contracts with Customers, as of the date of this Quarterly Report on Form 10-Q, the May Sponsorship Gift Cards were not recognized within the Consolidated Financial Statements.

ASC 105, Generally Accepted Accounting Principles (“ASC 105”), describes the decision-making framework when no guidance exists in GAAP for a particular transaction. Specifically, ASC 105 instructs companies to look for guidance for a similar transaction within GAAP and apply that guidance by analogy.

While these agreements are not considered contracts with a customer based on the terms thereof, the Company evaluated the terms of the agreements and, as these services are the output of the Company’s ordinary activities, has analogized to ASC 606, Revenue from Contracts with Customers, and more specifically, the recognition of the Company’s unredeemed gift cards and other prepaid orders. See Note 2 to the Consolidated Financial Statements of the Annual Report on Form 10-K for a description of the Company’s revenue recognition accounting policy.

Sustainability and Carbon Credit Agreement

On March 31, 2022, the Company entered into a Sustainability and Carbon Credit Agreement (the “Sustainability Agreement”) with an affiliate of Joseph N. Sanberg. Under the terms of the agreement, the Company purchased and subsequently retired $3.0 million of carbon offsets, which were recognized in Product, technology, general and administrative expenses during the six months ended June 30, 2022.

Such affiliate also performed the assessment of the Company’s 2021 annual carbon footprint that provided it with the basis for determining the amount of carbon offsets the Company needed to purchase. The fee for these services was waived as a condition of entering into the Sustainability Agreement.

On June 30, 2022, the Company entered into a statement of work under the Sustainability Agreement, through which the affiliate transferred to the Company a sufficient amount of carbon offsets for its estimated 2023 and 2024 emissions based upon its 2021 annual carbon footprint, for a purchase price of $6.0 million, which will be paid in twenty-four equal monthly installments beginning on July 31, 2022.

2022 Private Placements

On April 29, 2022, the Company entered into respective purchase agreements with RJB and Linda Findley, a director of the Company and its President and Chief Executive Officer, under which the Company agreed to issue and sell to RJB and Ms. Findley, respectively, shares of Class A common stock for respective aggregate purchase prices of $40.0 million and $0.5 million (or $12.00 per unit). Of the $40.0 million of Class A common stock purchased by RJB under the April Private Placements, $20.0 million closed concurrently with the execution of the purchase agreement. On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase from the Company (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total, as well as agreeing to extend the date of the second closing to on or before August 31, 2022.

On February 14, 2022, the Company entered into a purchase agreement with RJB, under which the Company agreed to issue and sell to RJB units of Class A common stock and warrants to purchase shares of Class A common stock in the February 2022 Private Placement, for an aggregate purchase price of $5.0 million (or $14.00 per unit).

See Note 11 for further discussion of the April 2022 Private Placements and February 2022 Private Placement.

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The following table summarizes the composition and amounts of the transactions in the Company’s Consolidated Statements of Operations involving its related parties:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2022		2021		2022		2021
	(In thousands)
Net revenue:
Feeding America bulk sale	$	10,000	$	-	$	10,000	$	-
March Sponsorship Gift Cards	$	442	$	-	$	442	$	-
Cost of goods sold, excluding depreciation and amortization	$	5,468	$	-	$	5,468	$	-
Product, technology, general and administrative	$	3,000	$	-	$	3,000	$	-

14. Earnings per Share

Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted-average number of common shares, including potential dilutive common shares assuming the dilutive effect of outstanding common stock options, restricted stock units, and warrants. For periods in which the Company has reported net loss, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

	Three Months Ended June 30,
	2022				2021
	Class A		Class B		Class A		Class B
(In thousands, except share and per-share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(23,123)	$	—	$	(15,245)	$	(3,342)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic		34,073,695		—		15,482,841		3,393,759
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted		34,073,695		—		15,482,841		3,393,759
Net income (loss) per share attributable to common stockholders—basic (1)	$	(0.68)	$	—	$	(0.98)	$	(0.98)
Net income (loss) per share attributable to common stockholders—diluted (1)	$	(0.68)	$	—	$	(0.98)	$	(0.98)

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	Six Months Ended June 30,
	2022				2021
	Class A		Class B		Class A		Class B
(In thousands, except share and per-share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(61,572)	$	—	$	(27,942)	$	(6,366)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic		33,185,992		—		14,994,302		3,416,427
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted		33,185,992		—		14,994,302		3,416,427
Net income (loss) per share attributable to common stockholders—basic (1)	$	(1.86)	$	—	$	(1.86)	$	(1.86)
Net income (loss) per share attributable to common stockholders—diluted (1)	$	(1.86)	$	—	$	(1.86)	$	(1.86)

(1) Net income (loss) per share attributable to common stockholders — basic and net income (loss) per share attributable to common stockholders — diluted may not recalculate due to rounding.

The following have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders as their effect would have been antidilutive:

	Three Months Ended June 30,
	2022		2021
	Class A	Class B	Class A	Class B
Stock options	32,583	—	—	49,044
Restricted stock units	2,523,956	—	2,485,995	—
Warrants	11,420,000	—	—	—
Total anti-dilutive securities	13,976,539	—	2,485,995	49,044

	Six Months Ended June 30,
	2022		2021
	Class A	Class B	Class A	Class B
Stock options	34,267	—	—	50,462
Restricted stock units	2,376,497	—	2,241,522	—
Warrants	11,420,000	—	—	—
Total anti-dilutive securities	13,830,764	—	2,241,522	50,462

15. Fair Value Measurements

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data is not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.

The fair value hierarchy consists of the following three levels:

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

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Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

The Company uses observable market data when available, and minimizes the use of unobservable inputs when determining fair value.

The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3):

	June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash and cash equivalents:
Money market accounts	$	—	$	—	$	—	$	—
Total assets measured at fair value	$	—	$	—	$	—	$	—
Liabilities:
Warrant obligation	$	—	$	—	$	—	$	—
Other noncurrent liabilities:
Warrant obligation		—		—		—		—
Total liabilities measured at fair value	$	—	$	—	$	—	$	—

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash and cash equivalents:
Money market accounts	$	2,635	$	—	$	—	$	2,635
Total assets measured at fair value	$	2,635	$	—	$	—	$	2,635
Liabilities:
Warrant obligation	$	—	$	—	$	8,001	$	8,001
Other noncurrent liabilities:
Warrant obligation		—		—		1,588		1,588
Total liabilities measured at fair value	$	—	$	—	$	9,589	$	9,589

Money market accounts

Money market accounts are classified within Level 1 of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts approximates fair value due to their short-term maturities. The Company closed its money market accounts during the three months ended June 30, 2022.

Warrant obligation

The Blue Torch warrant obligation issued in conjunction with the Amendment, as discussed in Note 9, was accounted for in accordance with ASC 815-40, Contracts in an Entity’s Own Equity, as a liability recognized at fair value, and is remeasured as of each balance sheet date with changes in fair value recorded in Other income (expense), net in the Consolidated Statements of Operations. The amount of each warrant to be issued under the obligation set forth in the financing agreement was based upon 0.50% of the then-outstanding shares of the Company’s common stock on a fully-diluted basis on the first day of each quarter, beginning on July 1, 2021, so long as the 2020 Term Loan remained

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outstanding. As such, the fair value of the Blue Torch warrant obligation was calculated using the estimated amount of warrants to be issued over the life of the financing agreement multiplied by the price of the Company’s stock as of the closing date, less $0.01 per share to represent each warrant’s exercise price. The estimated amount of shares to be issued was derived from the Company’s estimate of shares of the Company’s common stock on a fully-diluted basis over the life of the financing agreement.

On May 5, 2022, the Company fully repaid the 2020 Term Loan with the proceeds of its senior secured notes and cash on hand and terminated its financing agreement effective as of the same date, which also resulted in the termination of the warrant obligation. As of May 5, 2022, all warrants that had been issued under the Blue Torch warrant obligation had been exercised in full, resulting in no liability-classified warrants outstanding. See Note 9 for further discussion.

The following table summarizes the changes of the Blue Torch warrant obligation as of June 30, 2022 and December 31, 2021:

	Balance as of December 31, 2021		Loss (gain) on changes in stock price		Loss (gain) on changes in estimated common stock on a fully-diluted basis		Exercise of warrants		Derecognition		Balance as of June 30, 2022
		(In thousands)
Warrant obligation	$	9,589	$	(1,971)	$	153	$	(5,050)	$	(2,721)	$	-

16. Subsequent Events

On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase from the Company (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total, as well as agreeing to extend the date of the second closing to on or before August 31, 2022. The Company expects to invest these proceeds in its long-term growth plan, or for general corporate purposes. The Company may use up to $25.0 million for strategic purposes aimed at enhancing shareholder value, including exploring share buybacks. RJB’s obligation to complete the second closing is not subject to closing conditions, and, pursuant to such amendment, Joseph N. Sanberg has agreed to personally guarantee the payment of the aggregate purchase price of $50.0 million.

In addition, on August 7, 2022, the Company amended the May Sponsorship Gift Cards Agreement to extend the funding date to on or before August 31 2022, and pursuant to which, Joseph N. Sanberg personally guaranteed his affiliate’s obligation.

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Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is meant to provide material information relevant to an assessment of the financial condition and results of operations of our company, including an evaluation of the amounts and certainty of cash flows from operations and from outside resources, so as to allow investors to better view our company from management’s perspective. You should read the following discussion of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 25, 2022. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in the section titled “Risk Factors” under Part II, Item 1A, below. In this discussion, we use certain financial measures that are considered non-GAAP financial measures under Securities and Exchange Commission rules. These rules require supplemental explanation and reconciliation, which is included elsewhere in this Quarterly Report on Form 10-Q. Investors should not consider non-GAAP financial measures in isolation from or in substitution for financial information presented in compliance with U.S. generally accepted accounting principles (“GAAP”). In the below discussion, we use the term basis points to refer to units of one-hundredth of one percent.

Overview

Blue Apron’s vision is Better Living Through Better Food™. Founded in 2012, we are on a mission to spark discovery, connection, and joy through cooking. We offer fresh, chef-designed recipes that empower our customers to embrace their culinary curiosity and challenge their abilities to see what a difference cooking quality food can make in their lives.

Our core product is the meal experience we help our customers create. These experiences extend from discovering new recipes, ingredients, and cooking techniques to preparing meals with families and loved ones to sharing photos and stories of culinary triumphs. Central to these experiences are the original recipes we design with fresh, seasonally-inspired produce and high-quality ingredients sent directly to our customers. We do this by employing technology and expertise across many disciplines – demand planning, recipe creation, procurement, recipe merchandising, fulfillment operations, distribution, customer service, and marketing – to drive our end-to-end value chain.

We offer our customers four weekly meal plans—a Two Serving Signature Plan, a Two-Serving Vegetarian Plan, a Two-Serving Wellness Plan, and a Four-Serving Signature Plan. In addition, customers can add Add-ons recipes to each box, which includes appetizers, side dishes, desserts, à la carte proteins, and/or Heat & Meat meals, which are pre-made meals ready to heat and eat in minutes. We also sell wine, which can be paired with our meals, through Blue Apron Wine, our direct-to-consumer wine delivery service. Through Blue Apron Market, our e-commerce market, we sell a curated selection of cooking tools, utensils, pantry items, add-on products for different culinary occasions, which are tested and recommended by our culinary team, and à la carte wine offerings. Our products are available to purchase through our website and mobile app, as well as through third-party sales platforms for our meal kit products.

Key Financial and Operating Metrics

We use the following key financial and operating metrics to evaluate our business and operations, measure our performance, identify trends affecting our business, project our future performance, and make strategic decisions. You should read the key financial and operating metrics in conjunction with the following discussion of our results of

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operations and financial condition together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(In thousands)
Net revenue	$	124,237	$	124,010	$	241,988	$	253,716
Net income (loss)	$	(23,123)	$	(18,587)	$	(61,572)	$	(34,308)
Adjusted EBITDA	$	(15,503)	$	(3,547)	$	(46,240)	$	(9,605)
Net cash from (used in) operating activities	$	(18,322)	$	1,073	$	(47,120)	$	(10,878)
Free cash flow	$	(19,986)	$	(190)	$	(50,105)	$	(13,887)

The following chart does not reflect the impact of the Feeding America bulk sale for an aggregate net purchase price of $10.0 million during the three months ended June 30, 2022 on the Company’s Consolidated Financial Statements:

	Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
	2022		2022		2021		2021		2021
Orders (in thousands)		1,701		1,869		1,678		1,760		1,977
Customers (in thousands)		349		367		336		350		375
Average Order Value	$	67.14	$	62.99	$	63.78	$	62.30	$	62.72
Orders per Customer		4.9		5.1		5.0		5.0		5.3
Average Revenue per Customer	$	328	$	321	$	319	$	313	$	330

Orders

We define Orders as the number of paid orders by our Customers across our meal, wine, and market products sold on our e-commerce platforms and, beginning in the second quarter of 2022, through third-party sales platforms in any reporting period, inclusive of orders that may have eventually been refunded or credited to customers. Orders, together with Average Order Value, is an indicator of the net revenue we expect to recognize in a given period. We view Orders delivered as a key indicator of our scale and financial performance, however Orders has limitations as a financial and operating metric as it does not reflect the product mix chosen by our customers or the purchasing behavior of our customers. Because of these and other limitations, we consider, and you should consider, Orders in conjunction with our other metrics, including net revenue, net income (loss), adjusted EBITDA, net cash from (used in) operating activities, free cash flow, Average Order Value, and Orders per Customer.

Customers

We determine our number of Customers by counting the total number of individual customers who have paid for at least one Order from Blue Apron across our meal, wine, or market products sold on our e-commerce platforms and, beginning in the second quarter of 2022, through third-party sales platforms in a given reporting period. For example, the number of Customers in the three months ended June 30, 2022 was determined based on the total number of individual customers who paid for at least one Order across our meal, wine, or market products in the quarter ended June 30, 2022, including sales made on third-party sales platforms. We view the number of Customers as a key indicator of our scale and financial performance, however Customers has limitations as a financial and operating metric as it does not reflect the product mix chosen by our customers, Order frequency, or the purchasing behavior of our customers. Because of these and other limitations, we consider, and you should consider, Customers in conjunction with our other metrics, including net revenue, net income (loss), adjusted EBITDA, net cash from (used in) operating activities, free cash flow, Orders per Customer, and Average Revenue per Customer.

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Average Order Value

We define Average Order Value as our net revenue from our meal, wine, and market products sold on our e-commerce platforms and, beginning in the second quarter of 2022, through third-party sales platforms, in a given reporting period divided by the number of Orders in that period. We view Average Order Value as a key indicator of the mix of our product offerings chosen by our customers, the mix of promotional discounts, and the purchasing behavior of our customers.

Orders per Customer

We define Orders per Customer as the number of Orders in a given reporting period divided by the number of Customers in that period. We view Orders per Customer as a key indicator of our customers’ purchasing patterns, including their repeat purchase behavior.

Average Revenue per Customer

We define Average Revenue per Customer as our net revenue from our meal, wine, and market products sold on our e-commerce platforms and, beginning in the second quarter of 2022, through third-party sales platforms in a given reporting period divided by the number of Customers in that period. We view Average Revenue per Customer as a key indicator of our customers’ purchasing patterns, including their repeat purchase behavior.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure defined by us as net income (loss) before interest income (expense), net, gain (loss) on extinguishment of debt, other income (expense), net, benefit (provision) for income taxes, depreciation and amortization, and share-based compensation expense. We have presented adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business. Accordingly, we believe that adjusted EBITDA provides useful information in understanding and evaluating our operating results. Please see “Non-GAAP Financial Measures” for a discussion of the use of non-GAAP financial measures and for a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable measure calculated in accordance with GAAP.

Free Cash Flow

Free cash flow is a non-GAAP financial measure defined by us as net cash from (used in) operating activities less purchases of property and equipment. We have presented free cash flow in this Quarterly Report on Form 10-Q because it is used by our management and board of directors as an indicator of the amount of cash we generate or use and to evaluate our ability to satisfy current and future obligations and to fund future business opportunities. Accordingly, we believe that free cash flow provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our ability to satisfy our financial obligations and pursue business opportunities, and allowing for greater transparency with respect to a key financial metric used by our management in their financial and operational decision-making. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt repayments or capital lease obligations that are not deducted from the measure. Additionally, other companies, including companies in our industry, may calculate free cash flow differently, which reduces its usefulness as a comparative measure. Please see “Non-GAAP Financial Measures” for a discussion of the use of non-GAAP financial measures and for a reconciliation of free cash flow to net cash from (used in) operating activities, the most directly comparable measure calculated in accordance with GAAP.

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Impact of COVID-19 on our Business

Since late in the first quarter of 2020, the COVID-19 pandemic has to varying degrees resulted in significant economic disruptions and changes to the labor market and consumer behaviors in the United States, which has impacted and may continue to impact our business.

In particular, beginning in late March 2020, we experienced an increase in demand due in part to changes in consumer behaviors resulting from the various restrictions that have been enacted throughout much of the United States in response to the COVID-19 pandemic. As restrictions have lifted and as vaccines have become more widely available in the United States and people begin to resume pre-pandemic activities, such as travel and dining out, this increased demand due to the pandemic began to decline after the first quarter of 2021 and is continuing to decline.

The COVID-19 pandemic or any future surges, including as a result of new variants and subvariants of the virus, may have other adverse effects on our business, operations, and financial results and condition, including, among other things, as a result of adverse impacts on labor availability, our fulfillment center operations, supply chain and logistics disruptions, consumer behaviors, and on the overall economy, including recent high inflation levels impacting consumer spending. While most areas of the United States have reduced most or all COVID-19 restrictions, as the pandemic continues and if new outbreaks emerge, there is uncertainty regarding the magnitude and duration of the economic and social effects of the COVID-19 pandemic, and therefore, we cannot predict the full extent of the positive or negative impacts the pandemic will have on our business, operations, and financial results and condition in future periods.

Please see “Risk Factors” under Part II, Item 1A for further discussion regarding risks associated with the COVID-19 pandemic.

Components of Our Results of Operations

Net Revenue

We generate net revenue primarily from the sale of meals to customers through our Two-Serving, Four-Serving, and Meal Prep Plans, as well as our Add-On, premium, and customization up-sell offerings. We also generate net revenue through sales of Blue Apron Wine, sales on Blue Apron Market, sales of meal kits on third-party platforms, and through enterprise bulk sales on an ad hoc basis. We generally derive substantially all of our net revenue from sales of our meals through our direct-to-consumer platform. We deduct promotional discounts, actual customer credits and refunds as well as customer credits and refunds expected to be issued to determine net revenue. Customers who receive a damaged meal or wine order or are dissatisfied with a meal or wine order and contact us within seven days of receipt of the order may receive a full or partial refund, full or partial credit against future purchase, or replacement, at our sole discretion. Credits only remain available for customers who maintain a valid account with us. Customers who return an unused, undamaged Blue Apron Market product within 30 days of receipt receive a full refund.

Our business is seasonal in nature and, as a result, our revenue and expenses and associated revenue trends fluctuate from quarter to quarter. We anticipate that the first quarter of each year will generally represent our strongest quarter in terms of customer engagement. Conversely, during the summer months and the end of year holidays, when people are vacationing more often or have less predictable weekly routines, we generally anticipate lower customer engagement. However, seasonal trends may be masked and impacted by marketing investments. In 2020, the economic and social impact of the COVID-19 pandemic masked, in part, the seasonal fluctuations in our operating results as we saw our strongest quarter in the second quarter of 2020. We believe that historical seasonal trends have affected and will continue to affect our quarterly results in the future. However, we cannot predict the ongoing impact, if any, that the COVID-19 pandemic or other macroeconomic factors, such as inflation, or our marketing investments, may have on seasonality in future periods and we have begun to see a return to normal seasonality in 2021 and 2022. We also anticipate that our net revenue will be impacted by the timing and outcome of our growth strategy, including ongoing product expansion initiatives, pricing updates, as well as the timing and extent of the sale and issuance of gift cards and the associated revenue upon the redemption of those gift cards, which generally occurs within one year of gift card issuance. Net revenue will also be impacted by gift card breakage revenue, which is our estimate of the portion of our gift card balance not expected to be redeemed. During 2022, we entered into various agreements with related parties

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under which we agreed to issue $29.0 million (net of promotional discounts) of gift cards, which may result in higher levels of gift card breakage revenue and which may inflate net revenue or mask seasonal trends in future periods. See Note 13 to the consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion.

In addition, our net revenue is impacted by our marketing strategies, including the timing and amount of paid advertising and promotional activity. As part of the acceleration of our growth strategy using the proceeds from the 2021 Capital Raise (as defined below) that closed in November 2021, we significantly increased marketing expenses toward the end of the fourth quarter of 2021 and the first half of 2022. Our plan is to have increased marketing expenses throughout the remainder of 2022. However, our ability to grow net revenue and to continue to increase marketing expenses throughout the remainder of 2022, as compared to the equivalent periods in 2021, is dependent upon our ability to close the remaining $70.0 million of the liquidity transactions (as defined below) with related parties or our ability to obtain additional funding. As such, we expect that any potential reductions in marketing investments in the second half of 2022 will impact our net revenue.

Credit card charges are recorded in deferred revenue until the criteria for revenue recognition have been met. Because we generally charge credit cards in advance of shipment and, historically, customers have most frequently requested delivery of their meals earlier in the week, our deferred revenue balance at the end of a financial reporting period may fluctuate significantly based on the day of the week on which that period ends. Consequently, large changes in deferred revenue at any particular time are not meaningful indicators of our financial results or future net revenue trends.

Cost of Goods Sold, excluding Depreciation and Amortization

Cost of goods sold, excluding depreciation and amortization, consists of product and fulfillment costs. Product costs include the cost of food, packaging for food that is portioned prior to delivery to customers, labor and related personnel costs incurred to portion food for our meals, inbound shipping costs, and cost of products sold through Blue Apron Wine and Blue Apron Market. Fulfillment costs consist of costs incurred in the shipping and handling of inventory including the shipping costs to our customers, labor and related personnel costs related to receiving, inspecting, warehousing, picking inventory, and preparing customer orders for shipment, and the cost of packaging materials and shipping supplies. As noted above, our business is seasonal in nature and, as a result we anticipate that the third quarter of each year will generally reflect higher levels of cost of goods sold, excluding depreciation and amortization, due to higher packaging and shipping costs due to warmer temperatures. In the near-term we expect that these expenses will be higher because of the various actions taken to increase capacity in our fulfillment centers, as well as due to higher labor costs, including our minimum wage increase for hourly employees in the fourth quarter of 2021, to help recruit and retain fulfillment center employees, higher food costs, due in part to inflationary pressures, higher fuel and logistics costs, and ongoing investments in product innovation to provide product variety, flexibility, and additional choice for our customers. Over time, we expect such expenses to decrease as a percentage of net revenue as we continue to focus on operational improvements and optimizing our fulfillment center operations.

Marketing

Our marketing expenses consist primarily of costs incurred to acquire new customers, retain existing customers, and build our brand awareness through various online and offline paid channels, including digital and social media, television, direct mail, radio and podcasts, email, brand activations, and certain variable and fixed payments to strategic brand partnerships. Also included in marketing expenses are the costs of orders through our customer referral program, in which certain existing customers may invite others to receive a complimentary meal kit, as well as costs paid to third parties to market our products. The cost of the customer referral program is based on our costs incurred for fulfilling a complimentary meal delivery, including product and fulfillment costs.

As part of the acceleration of our growth strategy, we increased marketing expenses toward the end of the fourth quarter of 2021 and in the first half of 2022. Our ability to continue to have higher marketing expenses throughout the remainder of 2022, as compared to the equivalent periods in 2021, is dependent upon our ability to close the remaining $70.0 million of the liquidity transactions (as defined below) with related parties or our ability to obtain additional funding. We anticipate that our marketing strategies, including the timing and extent of our marketing investments, will be informed by the sufficiency of our cash resources, our strategic priorities, our ability to accelerate

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our growth strategy, the seasonal trends in our business, our marketing technology capabilities, and the competitive landscape of our market, and will fluctuate from quarter-to-quarter and have a significant impact on our quarterly results of operations. We also anticipate that our future marketing strategies and investments may continue to be impacted by macroeconomic and other factors. For example, as we did in response to the COVID-19 pandemic, we may reduce marketing expenditures in future periods if we experience heightened demand in a short period of time to help us manage unforeseen demand to alleviate any future capacity constraints.

Product, Technology, General and Administrative

Product, technology, general and administrative expenses consist of costs related to the development of our products and technology, general and administrative expenses, and overhead expenses, which include: payroll and related expenses for employees involved in the application, production, and maintenance of our platform and other technology infrastructure costs; payroll and related expenses for employees performing corporate and other managerial functions; facilities’ costs such as occupancy and rent costs for our corporate offices and fulfillment centers; carbon offsets; and payment processing fees, professional fees, and other general corporate and administrative costs. Over time, we expect such expenses to decrease as a percentage of net revenue reflecting our continued focus on expense management to the extent we scale our business.

Depreciation and Amortization

Depreciation and amortization consists of depreciation expense for our property and equipment and amortization expense for capitalized software development costs.

Gain (Loss) on Extinguishment of Debt

Gain (loss) on extinguishment of debt relates to the extinguishment loss recorded upon the amendment of the 2020 Term Loan in May 2021 and the extinguishment gain recorded upon the termination of the financing agreement in May 2022.

Interest Income (Expense), Net

Interest income (expense), net consists primarily of interest expense on our outstanding borrowings, capital lease financings, and build-to-suit lease financings partially offset by interest income on cash and cash equivalents balances.

Other Income (Expense), Net

Other income (expense), net consists of the change in fair value of the Blue Torch warrant obligation upon remeasurement as of each reporting period, as well as the gain recorded upon its derecognition.

Benefit (Provision) for Income Taxes

Our benefit (provision) for income taxes and our effective tax rates are affected by permanent differences between GAAP and statutory tax laws, certain one-time items, and the impact of valuation allowances. Our tax provision results from state taxes in a jurisdiction in which net operating losses are not available to offset our tax obligation. We continue to maintain a valuation allowance for all of our deferred tax assets in federal and state tax jurisdictions, as we have concluded it is more likely than not the deferred tax assets will not be utilized.

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Results of Operations

The following sets forth our consolidated statements of operations data for each of the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(In thousands)
Net revenue	$	124,237	$	124,010	$	241,988	$	253,716
Operating expenses:
Cost of goods sold, excluding depreciation and amortization		81,158		77,585		160,648		159,177
Marketing		21,776		16,316		49,690		36,256
Product, technology, general and administrative		38,510		36,802		81,767		73,353
Depreciation and amortization		5,464		5,612		10,868		11,232
Total operating expenses		146,908		136,315		302,973		280,018
Income (loss) from operations		(22,671)		(12,305)		(60,985)		(26,302)
Gain (loss) on extinguishment of debt		650		(4,089)		650		(4,089)
Interest income (expense), net		(1,435)		(2,731)		(3,205)		(4,439)
Other income (expense), net		387		548		2,033		548
Income (loss) before income taxes		(23,069)		(18,577)		(61,507)		(34,282)
Benefit (provision) for income taxes		(54)		(10)		(65)		(26)
Net income (loss)	$	(23,123)	$	(18,587)	$	(61,572)	$	(34,308)

The following table sets forth our consolidated statements of operations data as a percentage of net revenue for each of the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Operating expenses:
Cost of goods sold, excluding depreciation and amortization	65.3	%	62.6	%	66.4	%	62.7	%
Marketing	17.5	%	13.2	%	20.5	%	14.3	%
Product, technology, general and administrative	31.0	%	29.7	%	33.8	%	28.9	%
Depreciation and amortization	4.4	%	4.5	%	4.5	%	4.4	%
Total operating expenses	118.2	%	109.9	%	125.2	%	110.4	%
Income (loss) from operations	(18.2)	%	(9.9)	%	(25.2)	%	(10.4)	%
Gain (loss) on extinguishment of debt	0.5	%	(3.3)		0.3	%	(1.6)	%
Interest income (expense), net	(1.2)	%	(2.2)	%	(1.3)	%	(1.7)	%
Other income (expense), net	0.3	%	0.4	%	0.8	%	0.2	%
Income (loss) before income taxes	(18.6)	%	(15.0)	%	(25.4)	%	(13.5)	%
Benefit (provision) for income taxes	(0.0)	%	(0.0)	%	(0.0)	%	(0.0)	%
Net income (loss)	(18.6)	%	(15.0)	%	(25.4)	%	(13.5)	%

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

Net Revenue

	Three Months Ended
	June 30,
	2022		2021		% Change
	(In thousands)
Net revenue	$	124,237	$	124,010	0	%

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Net revenue increased by $0.2 million, or 0%, to $124.2 million for the three months ended June 30, 2022 from $124.0 million for the three months ended June 30, 2021. The increase in net revenue was primarily due to the $10.0 million of net revenue from the Feeding America bulk sale recognized during the three months ended June 30, 2022, in addition to an increase in Average Order Value due to pricing increases and the continued execution of our growth strategy. The increases in net revenue were partially offset by decreases in Customers and Orders due, in part, to noted increases in travel amongst our customers. In addition, net revenue for the three months ended June 30, 2021 was positively impacted by the recognition of the recovery of $2.0 million related to customer credits issued in the third quarter of 2020, as a result of a voluntary recall of onions that were supplied to us.

Operating Expenses

Cost of Goods Sold, excluding Depreciation and Amortization

	Three Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	81,158		$	77,585		5	%
% of net revenue		65.3	%		62.6	%

Cost of goods sold, excluding depreciation and amortization, increased by $3.6 million, or 5%, to $81.2 million for the three months ended June 30, 2022 from $77.6 million for the three months ended June 30, 2021. The increase was primarily due to the reasons set forth below, partially offset by a decrease in Orders. As a percentage of net revenue, cost of goods sold, excluding depreciation and amortization, increased to 65.3% for the three months ended June 30, 2022 from 62.6% for the six months ended June 30, 2021. The increase in cost of goods sold, excluding depreciation and amortization, as a percentage of net revenue, was primarily due to:

● an increase of 150 basis points in food and product packaging costs, driven by the costs related to new product offerings and enhancements to our existing product offerings to provide variety, flexibility, and additional choice for our customers, as well as price increases due to inflationary pressures; and

● an increase of 120 basis points in shipping and fulfillment packaging due to rate increases and fuel surcharges from shipping carriers.

Marketing

	Three Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Marketing	$	21,776		$	16,316		33	%
% of net revenue		17.5	%		13.2	%

Marketing expenses increased by $5.5 million, or 33%, to $21.8 million for the three months ended June 30, 2022 from $16.3 million for the three months ended June 30, 2021. The increase was seen across online paid channels and offline paid channels. As a percentage of net revenue, marketing expenses increased to 17.5% for the three months ended June 30, 2022 from 13.2% for the three months ended June 30, 2021. This increase as a percentage of net revenue included an increase of 280 basis points in offline paid channels and an increase of 150 basis points in online paid channels.

The increase in marketing expenses is part of our growth strategy to drive customer acquisition.

Product, Technology, General and Administrative

Three Months Ended

June 30, 

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	2022			2021			% Change
	(In thousands)
Product, technology, general and administrative	$	38,510		$	36,802		5	%
% of net revenue		31.0	%		29.7	%

Product, technology, general and administrative expenses increased by $1.7 million, or 5%, to $38.5 million for the three months ended June 30, 2022 from $36.8 million for the three months ended June 30, 2021. This increase was primarily driven by investments to support our business and execute on key business initiatives, including:

● an increase of $2.3 million in personnel costs, primarily driven by increases in bonuses; offset by

● a decrease of $0.6 million in facilities costs for our corporate offices and fulfillment centers, including occupancy and rent.

As a percentage of net revenue, product, technology, general and administrative expenses increased 130 basis points to 31.0% for the three months ended June 30, 2022 from 29.7% for the three months ended June 30, 2021, primarily due to investments to support our business and execute on key business initiatives.

Depreciation and Amortization

	Three Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Depreciation and amortization	$	5,464		$	5,612		(3)	%
% of net revenue		4.4	%		4.5	%

Depreciation and amortization decreased by $0.1 million, or 3%, to $5.5 million for the three months ended June 30, 2022 from $5.6 million for the three months ended June 30, 2021. This decrease was primarily driven by lower investments. As a percentage of net revenue, depreciation and amortization decreased to 4.4% for the three months ended June 30, 2022 from 4.5% for the three months ended June 30, 2021.

Income (Loss) from Operations

	Three Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Income (loss) from operations	$	(22,671)		$	(12,305)		84	%
% of net revenue		(18.2)	%		(9.9)	%

Income (loss) from operations for the three months ended June 30, 2022 and 2021 was $(22.7) million and $(12.3) million, respectively. This change was due to an increase in operating expenses of $10.6 million, partially offset by an increase in net revenue of $0.2 million. As a percentage of net revenue, income (loss) from operations was (18.2)% and (9.9)% for the three months ended June 30, 2022 and 2021, respectively. This change was primarily driven by increases as a percentage of net revenue in marketing expenses, cost of goods sold, excluding depreciation and amortization, and product, technology, general and administrative expenses, partially offset by a decrease in depreciation and amortization, for the reasons set forth above.

Gain (Loss) on Extinguishment of Debt

Gain (loss) on extinguishment of debt for the three months ended June 30, 2022 and 2021 was $0.7 million and $(4.1) million, respectively. This change was due to the extinguishment gain recorded upon the termination of the financing agreement in May 2022, as compared to the extinguishment loss recorded upon the amendment of the financing agreement in May 2021.

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Interest Income (Expense), Net

Interest income (expense), net for the three months ended June 30, 2022 and 2021 was $(1.4) million and $(2.7) million, respectively. This change was primarily due to the payment of $0.5 million of the closing fee and the derecognition of $0.4 million unamortized debt issuance costs recorded in conjunction with the release of the 2021 Term Loan during the three months ended June 30, 2021, as well as decreased interest expense incurred on outstanding borrowings of $0.4 million.

Other Income (Expense), net

Other income (expense), net for the three months ended June 30, 2022 and 2021 was $0.4 million and $0.5 million, respectively. This change consists of the change in fair value of the Blue Torch warrant obligation upon remeasurement as of each reporting period, as well as the gain recorded upon its derecognition.

Benefit (Provision) for Income Taxes

The provision for income taxes recorded in the three months ended June 30, 2022 and 2021 reflects state income taxes in a jurisdiction for which net operating losses were not available to offset our tax obligation.

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

Net Revenue

	Six Months Ended
	June 30,
	2022		2021		% Change
	(In thousands)
Net revenue	$	241,988	$	253,716	(5)	%

Net revenue decreased by $11.7 million, or 5%, to $242.0 million for the six months ended June 30, 2022 from $253.7 million for the six months ended June 30, 2021. The decrease in net revenue was primarily due to decreases in Customers and Orders, which were due, in part, to noted increases in travel amongst our customers. In addition, net revenue for the three months ended June 30, 2021, being positively impacted by the recognition of the recovery of $2.0 million related to customer credits issued in the third quarter of 2020 as a result of a voluntary recall of onions supplied to the Company. These decreases were partially offset by the $10.0 million of Feeding America bulk sale net revenue recognized during the three months ended June 30, 2022, and an increase in Average Order Value due to pricing increases and the execution of our growth strategy, including through product innovation.

Operating Expenses

Cost of Goods Sold, excluding Depreciation and Amortization

	Six Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	160,648		$	159,177		1	%
% of net revenue		66.4	%		62.7	%

Cost of goods sold, excluding depreciation and amortization, increased by $1.4 million, or 1%, to $160.6 million for the six months ended June 30, 2022 from $159.2 million for the six months ended June 30, 2021. The increase was primarily due to the reasons set forth below, partially offset by a decrease in Orders. As a percentage of net revenue, cost of goods sold, excluding depreciation and amortization, increased to 66.4% for the six months ended June

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30, 2022 from 62.7% for the six months ended June 30, 2021. The increase in cost of goods sold, excluding depreciation and amortization, as a percentage of net revenue, was primarily due to:

● an increase of 150 basis points in shipping and fulfillment packaging due to rate increases and fuel surcharges from shipping carriers;

● an increase of 140 basis points in food and product packaging costs, driven by the costs related to new product offerings and enhancements to our existing product offerings to provide variety, flexibility, and additional choice for our customers, as well as price increases due to inflationary pressures; and

● an increase of 80 basis points in labor costs due to minimum wage increases for our hourly employees.

Marketing

	Six Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Marketing	$	49,690		$	36,256		37	%
% of net revenue		20.5	%		14.3	%

Marketing expenses increased by $13.4 million, or 37%, to $49.7 million for the six months ended June 30, 2022 from $36.3 million for the six months ended June 30, 2021. The increase was seen across online paid channels, offline paid channels, and in our customer referral program. As a percentage of net revenue, marketing expenses increased to 20.5% for the six months ended June 30, 2022 from 14.3% for the six months ended June 30, 2021. This increase as a percentage of net revenue included an increase of 330 basis points in online paid channels, an increase of 280 basis points in offline paid channels, and an increase of 10 basis points in our customer referral program.

The significant increase in marketing expenses in the first half of 2022, which began toward the end of the fourth quarter of 2021 following the 2021 Capital Raise (as defined below), is part of the acceleration of our growth strategy to drive customer acquisition.

Product, Technology, General and Administrative

	Six Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Product, technology, general and administrative	$	81,767		$	73,353		11	%
% of net revenue		33.8	%		28.9	%

Product, technology, general and administrative expenses increased by $8.4 million, or 11%, to $81.8 million for the six months ended June 30, 2022 from $73.4 million for the six months ended June 30, 2021. This increase was primarily driven by investments to support our business and execute on key business initiatives, including:

● an increase of $3.9 million in personnel costs, primarily driven by increases in bonuses;

● an increase of $2.5 million in corporate overhead and administrative costs, driven by investments in external consultants to support operational efficiency; and

● an increase of $2.0 million in facilities costs for our corporate offices and fulfillment centers, primarily driven by the purchase and subsequent retirement of carbon offsets during the three months ended March 31, 2022 in order to fulfill our commitment to being carbon neutral as of March 31, 2022.

As a percentage of net revenue, product, technology, general and administrative expenses increased 490 basis points to 33.8% for the six months ended June 30, 2022 from 28.9% for the six months ended June 30, 2021, primarily due to investments to support our business and execute on key business initiatives.

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Depreciation and Amortization

	Six Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Depreciation and amortization	$	10,868		$	11,232		(3)	%
% of net revenue		4.5	%		4.4	%

Depreciation and amortization decreased by $0.2 million, or 3%, to $10.9 million for the six months ended June 30, 2022 from $11.2 million for the six months ended June 30, 2021. This decrease was primarily driven by lower investments. As a percentage of net revenue, depreciation and amortization increased to 4.5% for the six months ended June 30, 2022 from 4.4% for the six months ended June 30, 2021.

Income (Loss) from Operations

	Six Months Ended
	June 30,
	2022			2021			% Change
	(In thousands)
Income (loss) from operations	$	(60,985)		$	(26,302)		132	%
% of net revenue		(25.2)	%		(10.4)	%

Income (loss) from operations for the six months ended June 30, 2022 and 2021 was $(61.0) million and $(26.3) million, respectively. This change was due to an increase in operating expenses of $23.0 million, and a decrease in net revenue of $11.7 million. As a percentage of net revenue, income (loss) from operations was (25.2)% and (10.4)% for the six months ended June 30, 2022 and 2021, respectively. This change was primarily driven by increases as a percentage of net revenue in marketing expenses, product, technology, general and administrative expenses, cost of goods sold, excluding depreciation and amortization, and depreciation and amortization, for the reasons set forth above.

Gain (Loss) on Extinguishment of Debt

Gain (loss) on extinguishment of debt for the six months ended June 30, 2022 and 2021 was $0.7 million and $(4.1) million, respectively. This change was due to the extinguishment gain recorded upon the termination of the financing agreement in May 2022, as compared to the extinguishment loss recorded upon the amendment of the financing agreement in May 2021.

Interest Income (Expense), Net

Interest income (expense), net for the six months ended June 30, 2022 and 2021 was $(3.2) million and $(4.4) million, respectively. This change was primarily due to the payment of $0.5 million of the closing fee and the derecognition of $0.4 million unamortized debt issuance costs recorded in conjunction with the release of the 2021 Term Loan during the three months ended June 30, 2021, as well as decreased interest expense incurred on outstanding borrowings of $0.3 million

Other Income (Expense), net

Other income (expense), net for the six months ended June 30, 2022 and 2021 was $2.0 million and $0.5 million, respectively. This change consists of the change in fair value of the Blue Torch warrant obligation upon remeasurement as of each reporting period, as well as the gain recorded upon its derecognition.

Benefit (Provision) for Income Taxes

The provision for income taxes recorded in the six months ended June 30, 2022 and 2021 reflects state income taxes in a jurisdiction for which net operating losses were not available to offset our tax obligation.

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Non-GAAP Financial Measures

To provide additional information regarding our financial results, we monitor and have presented within this Quarterly Report on Form 10-Q adjusted EBITDA and free cash flow, which are non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by U.S. GAAP and are not necessarily comparable to similarly-titled measures presented by other companies.

We define adjusted EBITDA as net income (loss) before interest income (expense), net, gain (loss) on extinguishment of debt, other income (expense), net, benefit (provision) for income taxes, depreciation and amortization, and share-based compensation expense. We have presented adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business.

We use adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We believe adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.

Our adjusted EBITDA is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of adjusted EBITDA rather than net income (loss), which is the most directly comparable GAAP equivalent. Some of these limitations are:

● adjusted EBITDA excludes share-based compensation expense, as share-based compensation expense has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; 

● adjusted EBITDA excludes depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future; 

● adjusted EBITDA excludes gains and losses on extinguishments of debt, as these primarily represent non-cash accounting adjustments;

● adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest, which reduces cash available to us; 

● adjusted EBITDA does not reflect other (income) expense, net as this represents changes in the fair value of the Blue Torch warrant obligation as of each reporting period, which must be settled either in cash, harming our liquidity, or our Class A common shares, resulting in dilution to our stockholders;

● adjusted EBITDA does not reflect income tax payments that reduce cash available to us; and 

● other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

We define free cash flow as net cash from (used in) operating activities less purchases of property and equipment. We have presented free cash flow in this Quarterly Report on Form 10-Q because it is used by our management and board of directors as an indicator of the amount of cash we generate or use and to evaluate our ability to satisfy current and future obligations and to fund future business opportunities. Accordingly, we believe that free cash flow provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our ability to satisfy our financial obligations and pursue business opportunities, and allowing for greater transparency with respect to a key financial metric used by our management in their financial and operational decision-making.

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Our free cash flow is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of free cash flow rather than net cash from (used in) operating activities, which is the most directly comparable GAAP equivalent. Some of these limitations are:

● free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations, such as debt repayments or capital lease obligations, that are not deducted from the measure; and

● other companies, including companies in our industry, may calculate free cash flow differently, which reduces its usefulness as a comparative measure.

Because of these limitations, we consider, and you should consider, adjusted EBITDA and free cash flow together with other financial information presented in accordance with GAAP.

The following tables present a reconciliation of these non-GAAP measures to the most directly comparable measure calculated in accordance with GAAP, for each of the periods presented:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(In thousands)
Reconciliation of net income (loss) to adjusted EBITDA
Net income (loss)	$	(23,123)	$	(18,587)	$	(61,572)	$	(34,308)
Share-based compensation		1,704		3,146		3,877		5,465
Depreciation and amortization		5,464		5,612		10,868		11,232
Loss (gain) on extinguishment of debt		(650)		4,089		(650)		4,089
Interest (income) expense, net		1,435		2,731		3,205		4,439
Other (income) expense, net		(387)		(548)		(2,033)		(548)
Provision (benefit) for income taxes		54		10		65		26
Adjusted EBITDA	$	(15,503)	$	(3,547)	$	(46,240)	$	(9,605)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(In thousands)
Reconciliation of net cash from (used in) operating activities to free cash flow
Net cash from (used in) operating activities	$	(18,322)	$	1,073	$	(47,120)	$	(10,878)
Purchases of property and equipment		(1,664)		(1,263)		(2,985)		(3,009)
Free cash flow	$	(19,986)	$	(190)	$	(50,105)	$	(13,887)

Liquidity and Capital Resources

The following table shows our cash and cash equivalents, accounts receivable, net, restricted cash, and working capital as of the dates indicated:

	June 30,		December 31,
	2022		2021
	(In thousands)
Cash and cash equivalents	$	54,028	$	82,160
Accounts receivable, net	$	276	$	234
Related party receivables	$	10,000	$	—
Restricted cash included in Prepaid expenses and other assets	$	369	$	608
Restricted cash included in Other noncurrent assets	$	1,069	$	829
Working capital (1)	$	(34,928)	$	(30,399)

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(1) We define working capital as the difference between our current assets (excluding cash and cash equivalents) and current liabilities (excluding the current portion of long-term debt and the current Blue Torch warrant obligation).

Our cash requirements are principally for working capital and capital expenditures to support our business, including investments at our fulfillment centers, investments in sustainability efforts, and investment in marketing to support the execution of our growth strategy. Our primary sources of liquidity are cash and cash equivalents, cash flows from the operations of our business, and cash generated through financing activities, as discussed below.

Equity Financing Transactions

April 2022 Private Placements

On April 29, 2022, we entered into a purchase agreement with RJB Partners LLC (“RJB”)(the “RJB April 2022 Purchase Agreement”), an affiliate of Joseph N. Sanberg, one of our existing stockholders. The RJB April 2022 Purchase Agreement provided for, among other things, 3,333,333 shares of Class A common stock for an aggregate purchase price of $40.0 million (or $12.00 per share). Long Live Bruce, LLC, an affiliate of Joseph N. Sanberg, was assigned RJB’s rights to 1,666,667 shares of Class A common stock for an aggregate purchase price of $20.0 million under the RJB April 2022 Purchase Agreement, which was issued and sold concurrently with the execution of the purchase agreement (the “first closing”). The remainder of the Class A common shares under the RJB April 2022 Private Placement Agreement were to be issued and sold under a second closing, initially expected to close by May 30, 2022 by May 30, 2022 or such other date as agreed to by the parties.

In addition, on April 29, 2022, we entered into a purchase agreement with Linda Findley (the “Findley April 2022 Private Placement”), one of our directors and our President and Chief Executive Officer, under which we agreed to issue and sell to Ms. Findley in a separate private placement, which closed concurrently with the execution of the first closing, 41,666 shares of Class A common stock for an aggregate purchase price of $0.5 million (or $12.00 per share).

The first closing of the RJB April 2022 Purchase Agreement and the Findley April 2022 Private Placement (collectively, the “April 2022 Private Placements”) resulted in $20.1 million of proceeds, net of issuance costs.

On August 7, 2022, we amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase from us (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total, as well as agreeing to extend the date of the second closing to on or before August 31, 2022. We expect to invest these proceeds in our long-term growth plan, or for general corporate purposes. We may use up to $25.0 million for strategic purposes aimed at enhancing shareholder value, including exploring share buybacks. RJB’s obligation to complete the second closing is not subject to closing conditions, and, pursuant to such amendment, Joseph N. Sanberg has agreed to personally guarantee the payment of the aggregate purchase price of $50.0 million.

We are using the net proceeds of the April 2022 Private Placements and intend to use those from the second closing to support the execution of our growth strategy and for other working capital and general corporate purchases, in addition to the purposes noted above.

February 2022 Private Placement

On February 14, 2022, we entered into a purchase agreement with RJB, under which we agreed to issue and sell to RJB units of Class A common stock and warrants to purchase shares of Class A common stock in a private placement (the “February 2022 Private Placement”) which closed concurrently with the execution of the purchase agreement for an aggregate purchase price of $5.0 million (or $14.00 per unit). In the aggregate, RJB received (i) 357,143 shares of Class

38

A common stock, and (ii) warrants to purchase 500,000 shares of Class A common stock at various exercise prices of $15.00 per share, $18.00 per share, and $20.00 per share, resulting in $4.8 million of proceeds, net of issuance costs.

The net proceeds of the February 2022 Private Placement were used for working capital and general corporate purposes, including to continue to execute our growth strategy.

2021 Capital Raise

On November 4, 2021, we closed a series of transactions referred to as the 2021 Capital Raise, which resulted in the issuance of (i) 7,500,000 shares of Class A common stock, and (ii) warrants to purchase 10,500,000 shares of Class A common stock at exercise prices of $15.00 per share, $18.00 per share, and $20.00 per share, resulting in $70.3 million of proceeds, net of issuance costs.

On September 15, 2021, we closed the Salzberg Private Placement, as contemplated within the 2021 Capital Raise described above, and which resulted in the issuance of (i) 300,000 shares of Class A common stock, and (ii) warrants to purchase 420,000 shares of Class A common stock at exercise prices of $15.00 per share, $18.00 per share, and $20.00 per share, resulting in $2.8 million of proceeds, net of issuance costs.

The net proceeds of the 2021 Capital Raise were used for general corporate purposes, primarily consisting of (i) an acceleration and expansion of our growth strategy, (ii) an acceleration of certain of our environmental and sustainability initiatives, including the achievement of our goal of carbon neutrality by March 31, 2022, and (iii) increased investments in our hourly employees, including raising the base hourly compensation rate to at least $18 per hour for employees in October 2021, as well as enhancing our employee benefits and programs.

Underwritten public offerings

On April 29, 2020, we filed a universal shelf registration statement (the “2020 Shelf”) on Form S-3 with the Securities and Exchange Commission (the “SEC”), to register for sale from time to time up to $75.0 million of Class A common stock, preferred stock, debt securities and/or warrants in one or more offerings, which became effective on July 23, 2020.

On August 10, 2020, we completed an underwritten public offering of 4,000,000 shares of our Class A common stock under the 2020 Shelf, resulting in $32.9 million of proceeds, net of underwriting discounts and commissions and offering costs.

On June 18, 2021, we completed an underwritten public offering (the “June 2021 offering”) of 5,411,900 shares of our Class A common stock, including the 705,900 shares issuable upon the underwriter’s exercise of its option to purchase additional shares, under the 2020 Shelf, resulting in $21.1 million of proceeds, net of underwriting discounts and commissions and offering costs.

As of June 30, 2022, $15.0 million of our Class A common stock, preferred stock, debt securities and/or warrants remain available for issuance under the 2020 Shelf.

Debt financing transactions

On October 16, 2020, we entered into a financing agreement which provided for a senior secured term loan in the aggregate principal amount of $35.0 million (the “2020 Term Loan”). The 2020 Term Loan bore interest at a rate equal to LIBOR (subject to a 1.50% floor) plus 8.00% per annum, with the principal amount repayable in equal quarterly installments of $875,000 through December 31, 2022, and the remaining unpaid principal amount of the 2020 Term Loan due on March 31, 2023.

On May 5, 2021 (the “closing date”), we amended the financing agreement (the “Amendment”), which modified certain provisions of the financing agreement, such as increasing the interest rate margin on the 2020 Term

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Loan by 1.00% per annum, resulting in the 2020 Term Loan bearing interest, from and after the closing date, at a rate equal to LIBOR (subject to a 1.50% floor) plus 9.00% per annum. In addition, the Amendment provided for a $5.0 million term loan (the “2021 Term Loan”) that was funded into an escrow account and subsequently released in full from the escrow account to the lenders upon our completion of an underwritten public offering in June 2021.

On May 5, 2022 (the “issue date”), we entered into the Note Purchase and Guarantee Agreement (the “note purchase agreement”), which provides for, among other things, the issuance of $30.0 million in aggregate principal amount of senior secured notes due May 5, 2027 (the “senior secured notes”) at a purchase price equal to 94.00% thereof. The proceeds of the senior secured notes were used, together with cash on hand, to repay in full the outstanding amount under our 2020 Term Loan and pay fees and expenses in connection with the transactions contemplated by the note purchase agreement. We terminated our financing agreement effective as of the same date.

Upon receiving a minimum specified bond rating after the issue date, as specified within the terms of the note purchase agreement, the senior secured notes bear interest at a rate equal to 8.875% per annum, payable in arrears on June 30 and December 31 of each calendar year. The senior secured notes will amortize semi-annually in equal installments of $1.5 million beginning on December 31, 2025, with the remaining unpaid principal amount of the senior secured notes due on May 5, 2027.

The note purchase agreement contains two financial maintenance covenants:

● a minimum liquidity covenant of:

i. for any date prior to or ending on June 30, 2022, including those within required cash flow forecasts provided to the noteholders, $15.0 million; and

ii. for any date thereafter, including those within required cash flow forecasts provided to the noteholders:

● $15.0 million if our most recent Asset Valuation (as defined in the note purchase agreement) is greater than $25.0 million;

● $20.0 million if our most recent Asset Valuation is greater than $20.0 million but less than $25.0 million; or

● $25.0 million if our most recent Asset Valuation is less than or equal to $20.0 million, or is as of yet uncompleted; and

● a covenant requiring us to maintain a minimum Asset Coverage Ratio (as defined in the note purchase agreement) of at least 1.25 to 1.00.

As of the date of this Quarterly Report on Form 10-Q, our initial Asset Valuation has not been completed, with the minimum liquidity covenant therefore currently set at $25.0 million. Subsequent to the initial report, the Asset Valuation is required to be provided to the noteholders no later than 30 days after June 30 and December 31 of each fiscal year.

We have also agreed to use commercially reasonable efforts to cause 90% of the packaging for our meal kit boxes to be recyclable, reusable, or compostable (the “ESG KPI Goal”); the failure to achieve the ESG KPI Goal prior to the date on which the senior secured notes are repaid will require us to pay a fee equal to 1% of the principal amount of the senior secured notes.

The note purchase agreement contains additional restrictive covenants and affirmative and financial reporting covenants restricting our and our subsidiaries’ activities. Restrictive covenants include limitations on the incurrence of indebtedness and liens, restrictions on affiliate transactions, restrictions on the sale or other disposition of collateral, and limitations on dividends and stock repurchases.

Total outstanding debt, net of debt issuance costs and issued letters of credit outstanding were $27.7 million and $1.4 million, respectively, as of June 30, 2022, and $29.4 million and $1.4 million, respectively, as of December 31,

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2021. In addition, as of June 30, 2022, we were in compliance with all of the covenants under the note purchase agreement.

Known Liquidity Trends

Management considered conditions and events that could raise substantial doubt about our ability to continue as a going concern within twelve months of the issuance date of this Quarterly Report on Form 10-Q, and considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows, and our conditional and unconditional obligations before such date.

We have a history of significant net losses, including $61.6 million and $34.3 million for the six months ended June 30, 2022, and 2021, respectively, and operating cash flows of $(47.1) million and $(10.9) million for the six months ended June 30, 2022, and 2021, respectively. Our current operating plan indicates we will continue to incur net losses and generate negative cash flows from operating activities.

In addition to the financing transactions discussed above, on May 5, 2022, we entered into a gift card sponsorship agreement (the “May Sponsorship Gift Cards Agreement”) with an affiliate of Joseph N. Sanberg, pursuant to which such affiliate agreed to pay us a $20.0 million net sponsorship fee to support a marketing program through which we will distribute gift cards, at our sole discretion, in order to support our growth strategy. On August 7, 2022, we amended the May Sponsorship Gift Cards Agreement to extend the funding date to on or before August 31, 2022, and pursuant to which, Joseph N. Sanberg personally guaranteed his affiliate’s obligation.

Without the liquidity provided by the second closing of the RJB April 2022 Purchase Agreement and the funding of the May Sponsorship Gift Cards Agreement (collectively, the “liquidity transactions”), our forecast of future cash flows indicates that such cash flows would not be sufficient for us to maintain compliance under our minimum liquidity covenant for a period of twelve months following the issuance date of this Quarterly Report on Form 10-Q, which would result in an event of default under the note purchase agreement. Upon such event of default, the noteholders could declare all outstanding principal and interest be due and payable immediately and foreclose against the assets securing the borrowings. If we would be unable to obtain a waiver or successfully renegotiate the terms of its note purchase agreement, and the noteholders enforced one or more of their rights upon default, we would be unable to meet our current obligations.

While management was able to obtain personal guarantees from Joseph N. Sanberg relating his affiliates’ obligations to fund the liquidity transactions via the executed amendments noted above, which upon receipt of such proceeds would alleviate substantial doubt, there is no assurance that the liquidity transactions will be consummated in a timely manner, in amounts that are sufficient to maintain our compliance under our minimum liquidity covenant, or on acceptable terms to us, or at all. Although we have been reviewing a number of potential alternatives regarding maintaining compliant with our minimum liquidity covenant, including cost reduction initiatives, renegotiating the terms of our note purchase agreement, and/or alternative sources for additional financing, such alternatives may not be achievable on favorable conditions, or at all, and these conditions and events in the aggregate raise substantial doubt regarding our ability to continue as a going concern.

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Cash Flows

The following table presents the major components of net cash flows from and used in operating, investing, and financing activities for the periods indicated:

	Six Months Ended
	June 30,
	2022		2021
	(In thousands)
Net cash from (used in) operating activities	$	(47,120)	$	(10,878)
Net cash from (used in) investing activities		(2,874)		(1,707)
Net cash from (used in) financing activities		21,863		19,172
Net increase (decrease) in cash, cash equivalents, and restricted cash		(28,131)		6,587
Cash, cash equivalents, and restricted cash–beginning of period		83,597		45,842
Cash, cash equivalents, and restricted cash–end of period	$	55,466	$	52,429

Net Cash from (used in) Operating Activities

Net cash from (used in) operating activities consists of net income (loss) adjusted for primarily non-cash items and changes in operating assets and liabilities.

For the six months ended June 30, 2022, net cash from (used in) operating activities was $(47.1) million and consisted of net income (loss) of $(61.6) million, partially offset by non-cash items of $12.9 million and a net change in operating assets and liabilities of $1.6 million. Changes in operating assets and liabilities were primarily driven by increases in accounts payable, the current portion of related party payables, deferred revenue, and related party payables of $27.0 million, partially offset by increases in related party receivables, inventories, other noncurrent assets and liabilities of $21.3 million and a decrease in accrued expenses and other current liabilities of $3.9 million.

For the six months ended June 30, 2021, net cash from (used in) operating activities was $(10.9) million and consisted of net income (loss) of $(34.3) million, primarily non-cash items of $21.2 million, and a net change in operating assets and liabilities of $2.3 million. Changes in operating assets and liabilities were primarily driven by an increase in accounts payable of $16.5 million and decreases in prepaid expenses and other current assets, other noncurrent assets and liabilities, and accounts receivable of $9.9 million, partially offset by decreases in accrued expenses and other current liabilities and deferred revenue of $19.4 million and an increase in inventories of $4.7 million.

Net Cash from (used in) Investing Activities

Net cash from (used in) investing activities primarily relates to capital expenditures to support our business initiatives and drive efficiency in fulfillment center operations and investment in software development.

For the six months ended June 30, 2022, net cash from (used in) investing activities was $(2.9) million and consisted primarily of $(3.0) million for purchases of property and equipment, of which approximately $(1.7) million relates to capitalized software costs, to support business initiatives and ongoing product expansion, partially offset by $0.1 million of proceeds from the sales of fixed assets.

In the future we expect to incur capital expenditures primarily related to the execution of our growth strategy and to further optimize and drive efficiency in our operations and capitalized software costs. As of June 30, 2022, our projected capital expenditures are expected to amount to approximately $5.0 million to $7.0 million in the aggregate over the next 12 months. The timing and amount of our projected expenditures is dependent upon a number of factors, including our ability to successfully execute our growth strategy, and may vary significantly from our estimates.

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For the six months ended June 30, 2021, net cash from (used in) investing activities was $(1.7) million and consisted primarily of $(3.0) million for purchases of property and equipment, of which approximately $(1.2) million relates to capitalized software costs, to support business initiatives and ongoing product expansion, partially offset by $1.3 million of proceeds from the sales of fixed assets.

Net Cash from (used in) Financing Activities

Net cash from (used in) financing activities primarily relates to our debt and equity financing transactions.

For the six months ended June 30, 2022, net cash from (used in) financing activities was $21.9 million and consisted primarily of the net proceeds relating to our debt, equity, and warrant issuances, partially offset by repayments of debt and payments of debt and equity issuance costs.

For the six months ended June 30, 2021, net cash from (used in) financing activities was $19.1 million and consisted primarily of $21.1 million of proceeds from the public offering of Class A common stock, net of offering costs and the receipt of funds held in escrow, partially offset by the release of the funds held in escrow, repayments of debt, payments of debt issuance costs, and principal payments on capital lease obligations.

Free Cash Flow

We define free cash flow as net cash from (used in) operating activities less purchases of property and equipment.

Our free cash flow was $(50.1) million and $(13.9) million for the six months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022, free cash flow consisted of $(47.1) million of net cash from (used in) operating activities and $(3.0) million for purchases of property and equipment, of which approximately $(1.7) million relates to capitalized software costs. For the six months ended June 30, 2021, free cash flow consisted of $(10.9) million of net cash from (used in) operating activities and $(3.0) million for purchases of property and equipment, of which approximately $(1.2) million relates to capitalized software costs. Please see “Non-GAAP Financial Measures” for a discussion of the use of non-GAAP financial measures and for a reconciliation of free cash flow to net cash from (used in) operating activities, the most directly comparable measure calculated in accordance with GAAP.

Contractual Obligations

Other than the borrowings disclosed above in the "Debt Financing Transactions” section and changes which occur in the normal course of business, as of June 30, 2022, there were no other significant changes to the contractual obligations reported in our Annual Report on Form 10-K for the year ended December 31, 2021.

Off-Balance Sheet Arrangements

As of June 30, 2022 and December 31, 2021, we did not have any off-balance sheet arrangements, except for operating leases and letters of credit entered into in the normal course of business as discussed above.

Related Party Transactions

For information regarding related party transactions, see Note 13, Related Party Transactions, included in Part I, Item 1, Notes to Consolidated Financial Statements, in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Significant Estimates

In preparing our consolidated financial statements in accordance with GAAP, we are required to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, costs and expenses, and disclosure of contingent assets and liabilities that are reported in the Consolidated Financial Statements and accompanying disclosures. The accounting estimates that require the most difficult and subjective judgments include revenue recognition, inventory

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valuation, leases, the fair value of share-based awards, the fair value of the Blue Torch warrant obligation, recoverability of long-lived assets, and the recognition and measurement of contingencies. Therefore, we consider these to be our critical accounting policies. Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates and assumptions. See Note 2 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of our other accounting policies and information about our critical accounting policies.

Emerging Growth Company Status

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act. This classification has allowed us to elect to take advantage of the extended transition period afforded for the implementation of new or revised accounting standards. We expect to lose our emerging growth company status on December 31, 2022, and as a result, we will adopt all accounting pronouncements currently deferred under the emerging growth company election according to public company standards beginning with our Annual Report on Form 10-K for the year ending December 31, 2022, including interim period disclosures within that filing.

Recent Accounting Pronouncements

For information about recent accounting pronouncements, see Note 2, Summary of Significant Accounting Policies, Recently Issued Accounting Pronouncements and Recently Adopted Accounting Pronouncements, included in Part I, Item 1, Notes to Consolidated Financial Statements, in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are not required to provide information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2022 at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of such litigation and claims cannot be predicted with certainty, we currently believe that there are no ordinary course matters that will have a material adverse effect on our business, operating results, financial conditions, or cash flows.

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Item 1A.

RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. Certain factors may have a material adverse effect on our business, financial condition, and results of operation. You should carefully consider the risks and uncertainties described below, together with all of the other information included in this Quarterly Report on Form 10-Q, including our consolidated financial statements and the related notes, and in our other filings with the Securities and Exchange Commission (the “SEC”). Our business, financial condition, operating results, cash flow and prospects could be materially and adversely affected by any of these risks or uncertainties. In that case, the trading price of our Class A common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

Our consolidated financial statements contain a statement regarding a substantial doubt about our ability to continue as a going concern because the second closing of the RJB April 2022 Private Placement and the funding of the May Gift Card Sponsorship have not yet occurred on the time frames contemplated in each of those agreements. If such transactions, as amended and described below, do not close as expected and we do not find alternate financing, we will be in breach of our minimum liquidity covenant under our senior secured notes within the next 12 months.

As of the date of this Quarterly Report on Form 10-Q, we have not closed the $20.0 million second closing as contemplated by the RJB April 2022 Private Placement Purchase Agreement, pursuant to which we agreed to issue and sell to RJB, and RJB agreed to purchase from us, 1,666,667 shares of Class A common stock for an aggregate purchase price of $20.0 million or ($12.00 per share). Additionally, as of the date of this Quarterly Report on Form 10-Q, we have not received the $20.0 million gift card receivable owed to us from an affiliate of Joseph N. Sanberg, pursuant to a May Gift Card Sponsorship Agreement. On August 7, 2022, we amended the RJB April 2022 Private Placement Purchase Agreement regarding the second closing, pursuant to which (i) the parties agreed to extend the date of the second closing to August 31, 2022 or such earlier date as may be mutually agreed to by the parties and (ii) RJB agreed to purchase from the Company (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total. In addition, pursuant to the amendment to the RJB April 2022 Private Placement Purchase Agreement, Joseph N. Sanberg agreed to personally guarantee the payment of the aggregate purchase price of $50.0 million. In addition, on August 7, 2022, we amended the May Gift Card Sponsorship Agreement to provide for a personal guarantee by Joseph N. Sanberg of its affiliates obligation to fund the $20.0 million net sponsorship fee pursuant to the Gift Card Sponsorship Agreement. We expect both the second closing of the RJB April 2022 Private Placement and the funding of the May Sponsorship Gift Cards to occur on or before August 31, 2022.

If these transactions do not close as expected, and we are unable to raise additional capital from other financing sources, we believe that our available cash, cash equivalents and short-term investments will not be sufficient to allow us to maintain compliance with the minimum liquidity covenant in our senior secured notes, currently set at $25.0 million, which would, if that minimum liquidity covenant is not met as of the applicable measurement date, result in an event of default under our senior secured notes. Upon such event of default, under our senior secured notes, the noteholders could declare all outstanding principal and interest to be due and payable immediately and foreclose against the assets securing the borrowings and could enforce one or more of their other rights. In that case, we could be forced to commence a bankruptcy or take other defensive action, which would materially adversely affect our business, financial condition and operating results.

Primarily as a result of the timing of the second closing of the RJB April 2022 Private Placement and the funding of the May Gift Card Sponsorship transaction, there is substantial doubt about our ability to continue as a going concern for twelve months following the issuance date of the consolidated financial statements as of and for the three and six months ended June 30, 2022.

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Our ability to continue as a going concern requires us to have sufficient capital to meet our minimum liquidity covenant, as well as to continue to make investments and to fund our operations. Because our operating revenues alone are not expected to provide us with sufficient capital to meet our minimum liquidity covenant for the twelve months following the date of this report in the near term based on our current operating plans and programs, we are dependent upon our ability to receive the amounts from the second closing of the RJB April 2022 Private Placement and the funding of the May Gift Cards Sponsorship transaction as expected or our ability to obtain additional funding or adjust operating plans or programs and associated spending. Absent additional funding or operating adjustments, we cannot assure you that our future cash and cash equivalents, together with cash generated from operations, will be sufficient to allow us to fund our operations or any future growth, including to attract and retain customers. If such financing is not available and such operating adjustments cannot be made, or we are unable to refinance our senior secured notes, on satisfactory terms or at all, we may be unable to operate our business, develop new business or execute on our strategic plan to sustain net revenue growth, in each case at the rate desired or at all, and our operating results would suffer. Additionally, new debt financing may increase expenses, contain covenants that further restrict the operation of our business, and will need to be repaid regardless of operating results. For example, covenants contained in our senior secured notes include limitations on our ability to pay dividends; create, incur or assume indebtedness or liens; consummate a merger, sale, disposition or similar transaction; engage in transactions with affiliates; and make investments. Our senior secured notes also require us to make quarterly interest payments (and quarterly principal payments starting in 2024). Equity financing, debt financing that is convertible into equity, or debt or equity financing in which we issue equity or derivative securities, such as the warrants issued to our prior lenders and issued in the rights offering and recent private placements, could result in dilution to our existing stockholders.

If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially harm our business, results of operations, and future prospects. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

We have a history of losses, and we may be unable to achieve or sustain profitability.

We have experienced net losses in each year since our inception. In the years ended December 31, 2021, 2020 and 2019, we incurred net losses of $88.4 million, $46.2 million, and $61.1 million, respectively. We may incur substantial operating expenses in the future if we are able to increase marketing expenses throughout the remainder of 2022; however, our ability to increase marketing expenses is dependent upon our ability to close the second closing of the RJB April 2022 Private Placement and May Gift Card Sponsorship transaction as expected, or our ability to obtain additional funding. If we are unable to maintain or increase marketing spending, we may be unable to continue to attract new and retain existing customers, enhance our technology and infrastructure invest to optimize and drive efficiency in our distribution and fulfillment capabilities, and expand our product offerings and we may not succeed in increasing our customer count, net revenue and margins sufficiently to offset our expenses or at all, which may require us to reduce certain expenditures that could be important to maintaining or increasing our net revenue and margins. For the six months ended June 30, 2022 and 2021, we incurred net losses of $61.6 million and $34.3 million, respectively. We anticipate that we will continue to incur substantial operating expenses in the foreseeable future as we have begun to and plan to continue to increase marketing spend in 2022 to continue to attract new and retain existing customers, enhance our technology and infrastructure invest to optimize and drive efficiency in our distribution and fulfillment capabilities, and expand our product offerings. These efforts may prove more expensive than we anticipate, and we may not succeed in increasing our customer count, net revenue and margins sufficiently to offset these expenses or at all, which may require us to reduce certain expenditures that could be important to maintaining or increasing our net revenue and margins. We also incur significant expenses in operating our fulfillment centers, including personnel costs, obtaining and storing ingredients and other products, and developing our technology and we have seen, and may continue to see, as a result of inflation or other factors, higher ingredient, shipping and labor costs, which have, and could continue to have, a negative impact on margins. In addition, many of our expenses, including the costs associated with our fulfillment centers, are fixed. Accordingly, we may not be able to achieve or maintain profitability, maintain efficient variable margins, and we may incur significant losses for the foreseeable future.

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We may be unable to successfully execute our growth strategy. If we fail to cost-effectively acquire new customers or retain our existing customers or if we fail to derive profitable net revenue from our customers, our business would be materially adversely affected.

Our growth strategy, and our ability to grow net revenue and operate profitably depends largely on our ability to cost-effectively acquire new customers, retain existing customers, and to keep customers engaged so that they continue to purchase products from us, including our higher value offerings. If we are unable to cost-effectively acquire new customers, retain our existing customers, or keep customers engaged, our business, financial condition and operating results would be materially adversely affected. For example, the number of our customers declined to approximately 349,000 in the three months ended June 30, 2022 from approximately 375,000 in the three months ended June 30, 2021, and our net revenue remained relatively flat at $124.2 million from $124.0 million in that same period (after giving effect to a one-time $10.0 million bulk purchase to an enterprise customer in the three months ended June 30, 2022). While we experienced an increase in demand starting in 2020 due, in part, to the impact the COVID-19 pandemic has had on consumer behaviors, we saw a decrease in demand in 2021 over 2020 as more normal consumer behaviors patterns started to return. In addition, if, as a result of the COVID-19 pandemic or otherwise, we face significant disruptions in our supply chain, are unable to continue to operate one or more of our fulfillment centers or are unable to timely deliver orders to our customers, we may not be able to retain our customers or attract new customers. Further, to meet increased demand and eliminate complexity in our operations during 2020, we cut back on or delayed certain product offerings and we delayed the launch of other new product offerings that are part of our growth strategy, and if we need to cut back or delay certain product offerings in the future as a result of, supply chain issues, the pandemic or otherwise, there could be an adverse effect on our ability to retain or attract customers.

We have historically spent significant amounts on advertising and other marketing activities, such as digital and social media, television, radio and podcasts, direct mail, and email, to acquire new customers, retain and engage existing customers, and promote our brand. While we have reduced our marketing expenditures from historic levels, in late 2019, during parts of 2020 and 2021, we increased marketing expenditures to more normal levels. In the fourth quarter of 2021, using a portion of the proceeds from the equity capital raised closed in the fourth quarter of 2021, we significantly increased our marketing expenses and may continue to do so in future periods compared to prior year periods, and for marketing expense to continue to comprise a significant portion of our operating expenses. However, our ability to increase marketing expenses is dependent upon our ability to close the May Sponsorship Gift Cards transaction and the second closing of the RJB April 2022 Private Placement as expected or our ability to obtain additional funding. For the years ended December 31, 2021, 2020, and 2019, our marketing expenses were $72.1 million, $49.9 million, and $48.1 million, respectively, representing approximately 15.3%, 10.8%, and 10.6% of net revenue, respectively. For the three months ended June 30, 2022 and 2021, our marketing expenses were $21.8 million and $16.3 million, respectively, representing approximately 17.5% and 13.2% of net revenue, respectively. If we are unable to deliver results from our growth strategy on our anticipated timeline or at all, or otherwise effectively manage expenses and cash flows, we may reduce spending, particularly in marketing and capital expenditures, to the extent needed in order to comply with the liquidity covenant under our senior secured notes, which may materially adversely impact net revenue and our ability to execute our growth strategy on our anticipated timeline or at all. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

In addition, if we are able to close the May Sponsorship Gift Cards transaction and the second closing of the RJB April 2022 Private Placement as expected and able to continue to invest in our planned marketing expenditures we may fail to identify or execute cost efficient marketing opportunities as we adjust our investments in marketing, including our ability to successfully make new marketing technology investments on our planned timeline, if at all, in response to the ongoing elimination of cookie-based tracking, or fail to fully understand or estimate the conditions, characteristics and behaviors that drive customer behavior. As we continue to refine our marketing strategy to strategically prioritize customer acquisition channels that we believe will be more successful at attracting high affinity customers, including through an increased focus on partnerships, we may fail to identify channels that accomplish this objective or fail to understand or mitigate continuing and new negative effects of reducing our marketing expenses or of limiting our investment in historical marketing channels. Any of these failures may adversely impact our ability to attract or retain potential customers, including by making us less competitive relative to competitors. Additionally, our decision to strategically invest in new and existing customers who we believe have high potential to be valuable to the business may fail to properly identify such customers or retain customers who generate the value that we anticipate. In addition,

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the increased demand we saw as a result of the impact the COVID-19 pandemic has had on consumer behaviors resulted in us, at times, temporarily reducing marketing spend for portions of 2020 in order to manage capacity. If any of our marketing activities prove less successful than anticipated in attracting new customers or retaining existing customers, we may not be able to recover our marketing spend, our cost to acquire new customers may increase, and our existing customers may reduce the frequency or size of their purchases from us. In addition, our third-party marketing partners may not provide adequate value for their services. Any of the foregoing events could materially adversely affect our business, financial condition and operating results, as well as present a risk that we fail to comply with certain covenants under our senior secured notes, which could lead to an event of default under our senior secured notes.

Our net revenue in any period is essentially a function of our ability to attract and retain customers and the frequency and size of the orders placed by those customers. If customers do not perceive our product offerings to be of sufficient value and quality, or if we fail to offer new and relevant product offerings, we may not be able to attract or retain customers or engage existing customers so that they continue to purchase products from us. Many of our new customers originate from referrals from existing customers, and therefore we must ensure that our existing customers remain loyal to us in order to continue receiving those referrals. Our new customers typically evaluate whether our product offerings fit their lifestyles, tastes and preferences before deciding whether to continue purchasing our product offerings and, if so, the frequency at which they make purchases. While an increase in order frequency or size could potentially offset losses of customers and, similarly, an increase in the number of customers could potentially offset a reduction in the frequency or size of the orders placed by our customers, our continued failure to attract and retain customers would materially adversely affect our business, financial condition and operating results.

If we fail to grow net revenue on our anticipated timeline or at all or effectively manage any future net revenue growth, or if we fail to effectively manage costs, our business could be materially adversely affected.

Our net revenue increased from $454.9 million in 2019 to $460.6 million in 2020 and $470.4 million in 2021. The number of our full-time employees increased from 1,635 at December 31, 2019 to 1,934 at December 31, 2020 and declined to 1,795 at December 31, 2021. As of June 30, 2022, we had 1,694 full-time employees. Our ability to grow net revenue is dependent upon our ability to close the May Sponsorship Gift Cards transaction and the second closing of the RJB April 2022 Private Placement as expected or our ability to obtain additional funding. As such, we expect that any reductions in marketing investments in the future will impact our net revenue If we are unable to grow net revenue on our anticipated timeline or at all, or if our net revenues decline, or if we do not effectively manage our costs, or if we fail to recognize the benefits of recent or any future price increases, or if we fail to accurately forecast net revenue to plan operating expenses, our business, financial condition and operating results would be materially adversely affected. In addition, any future growth and expansion of our business and our product offerings may place additional demands on our operations teams and require significant additional financial, operational, human capital, technological and other resources to meet our needs, which may not be available in a cost-effective manner or at all. We are also required to manage relationships with various suppliers and other third parties, and expend time and effort to integrate new suppliers into our fulfillment operations. If we do not attain net revenue growth or if we do not effectively manage any future growth or costs, including as a result of inflation, we may not be able to execute on our business plan, respond to competitive pressures, take advantage of market opportunities, satisfy customer requirements, maintain high quality product offerings, or maintain compliance with certain covenants in our senior secured notes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

In addition, changes to our actual or projected operating results may indicate that the carrying value of our long-lived assets may not be recoverable, which may require us to recognize impairment charges on any of our assets, or require us to reduce investment in the business or engage in additional business restructurings and incur additional restructuring charges. These changes may include any deterioration of operating results, changes in business plans or changes in anticipated cash flows. Any significant shortfall, now or in the future, in net revenue resulting from our inability to resume and sustain net revenue growth or to effectively manage our net revenue or any future growth could lead to an indication that the carrying value of our long-lived assets may not be recoverable, which could result in an impairment. Any such charges could materially adversely affect our business, financial condition and operating results.

Changes in food costs and availability could materially adversely affect our business.

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The success of our business depends in part on our ability to anticipate and react to changes in food and supply costs and availability. We are susceptible to increases in food costs as a result of factors beyond our control, such as general economic conditions, inflation, market changes, increased competition, exchange rate fluctuations, seasonal fluctuations, shortages or interruptions, weather conditions, changes in global climates, global demand, food safety concerns, public health crises, such as pandemics and epidemics, generalized infectious diseases, changes in law or policy, wars, declines in fertile or arable lands, product recalls and government regulations. For example, any prolonged negative impact of the COVID-19 pandemic or inflationary periods, such as the current inflationary environment, on food and supply costs and availability could materially and adversely impact our business, financial condition and operating results. In addition, deflation in food prices could reduce the attractiveness of our product offerings relative to competing products and thus impede our ability to maintain or increase overall sales, while food inflation, particularly periods of rapid inflation, have and could continue to reduce our operating margins as there may be a lag between the time of the price increase and the time at which we are able to increase the price of our product offerings. We generally do not have long term supply contracts or guaranteed purchase commitments with our food suppliers, and we do not hedge our commodity risks. In limited circumstances, we may enter into strategic purchasing commitment contracts with certain suppliers, but many of these contracts are relatively short in duration and may provide only limited protection from price fluctuations, and the use of these arrangements may limit our ability to benefit from favorable price movements. As a result, we may not be able to anticipate, react to or mitigate against cost fluctuations which could materially adversely affect our business, financial condition and operating results.

Any increase in the prices of the ingredients most critical to our recipes, or scarcity of such ingredients, such as vegetables, poultry, beef, pork and seafood, would adversely affect our operating results. Alternatively, in the event of cost increases or decrease of availability with respect to one or more of our key ingredients, we may choose to temporarily suspend including such ingredients in our recipes, rather than paying the increased cost for the ingredients. Any such changes to our available recipes could materially adversely affect our business, financial condition and operating results.

Our indebtedness could adversely affect our business and financial condition. Furthermore, restrictive covenants in our senior secured notes may limit our ability to raise additional capital to fund our operations and limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations under the senior secured notes or other obligations.

As of June 30, 2022, we had $30.0 million in outstanding borrowings under our senior secured notes. Our debt could have important consequences for our business, including: making it more difficult for us to satisfy our obligations under the senior secured notes or to our trade or other creditors; increasing our vulnerability to adverse economic or industry conditions; limiting our ability to obtain additional financing to fund our existing operations or any future expansion of our business, including our strategic plan to achieve and maintain net revenue growth, particularly when the availability of financing in the capital markets may be limited; requiring us to dedicate a substantial portion of our cash flow from operations for payments on our indebtedness and thus reducing the availability of our cash flow to fund working capital, capital expenditures, business development, acquisitions and general corporate or other requirements; increasing our vulnerability to and limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; increasing our vulnerability to general adverse conditions; restricting us from making acquisitions or cause us to make non-strategic divestures; placing us at a competitive disadvantage to less-leveraged competitors; and limiting our ability to obtain additional debt and equity financing for working capital, capital expenditures, business development, debt service requirements, acquisitions and general corporate or other purposes.

Our ability to make scheduled payments on or to refinance our debt obligations, including the senior secured notes, depends on our financial condition and operating performance and the condition of the debt and capital markets, which are subject to prevailing economic, industry and competitive conditions, as well as certain financial, business, legislative, political, regulatory and other factors beyond our control. We expect to use cash flow from operations to meet our current and future financial obligations, including funding our operations, debt service requirements and capital expenditures. Our business may not generate sufficient cash flow from operations in the future, which could result in our being unable to repay indebtedness or to fund other liquidity needs. In addition, the note purchase agreement governing the senior secured notes contains covenants that will limit our ability to engage in activities that may be in our long-term

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best interests. Our failure to comply with those covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of all of our indebtedness.

Restrictive covenants in the note purchase agreement governing the senior secured notes may limit our ability to pursue our business strategies.

The note purchase agreement governing the senior secured notes limits our ability, and the terms of any future indebtedness may limit our ability, among other things, to:

• incur or guarantee additional indebtedness or issue certain preferred stock;

• make capital expenditures;

• make certain investments;

• pay dividends or make distributions on our capital stock or make certain other restricted payments;

• sell assets, including capital stock of our subsidiaries;

• enter into certain transactions with our affiliates;

• create or incur liens on certain assets;

• agree to payment restrictions affecting our restricted subsidiaries; and

• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.

In addition, the note purchase agreement contains (i) a liquidity maintenance covenant, which requires our liquidity (as defined in the notes purchase agreement) to be no less than $15.0 million prior to June 30, 2022, which we have complied with, and $25.0 million thereafter (with future adjustments available to be made subject to the completion of an asset valuation delivered in the first and third quarter of each year such that if the asset valuation demonstrates a value greater than $20.0 million and less than $25.0 million, the liquidity amount shall be $20.0 million and if the asset valuation is greater than $25.0 million, the liquidity amount shall be $15.0 million) and (ii) an asset coverage ratio covenant, which requires our liquidity to be no less than 1.25:1.00 on each quarterly test date. As of the date of this Quarterly Report on Form 10-Q, the initial asset valuation has not been completed, and, accordingly, the company is currently subject to a $25.0 million liquidity covenant.

A breach of the covenants or restrictions under the note purchase agreement could result in a default thereunder. Any such default may allow the noteholders to accelerate the notes and may result in the acceleration of any other future debt to which a cross-acceleration or cross-default provision applies. If we are unable to repay the amounts due and payable under the note purchase agreement, holders of the senior secured notes could, pursuant to the security documents proceed against the collateral in which they have first-priority security interests. In the event the holders of senior secured notes accelerate the repayment of the senior secured notes, we cannot assure you that we would have sufficient assets to repay such indebtedness or be able to borrow or raise additional equity in an amount sufficient to repay such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms acceptable to us. As a result of these restrictions, we may be:

• limited in how we conduct our business and execute our business strategy;

• unable to raise additional debt or equity financing to fund our operations; or

• unable to compete effectively or to take advantage of new business opportunities.

These restrictions may also affect our ability to grow in accordance with our growth plans.

If we fail to successfully improve our customer experience, including by continuing to develop new product offerings and enhancing our existing product offerings, our ability to attract new customers and retain existing customers may be materially adversely affected, and we may not be able to comply with the covenants in our senior secured notes.

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Our customers have a wide variety of options for purchasing food, including traditional and online grocery stores and restaurants, and consumer tastes and preferences may change from time to time, including as a result of the COVID-19 pandemic and the resulting restrictions that were affected throughout most of the United States, which limited some of these options for consumers. Our ability to retain existing customers, attract new customers and increase customer engagement with us will depend in part on our ability to successfully improve our customer experience, including by having sufficient funds to continue creating and introducing new product offerings, improving upon and enhancing our existing product offerings and strengthening our customers’ digital interactions with our brand and products, including online and mobile. As a result, we may introduce significant changes to our existing product offerings, develop and introduce new and unproven product offerings, revise our customers’ digital experiences and/or offer our products through new distribution channels. If our new or enhanced product offerings are unsuccessful, including because they fail to generate sufficient net revenue or operating profit to justify our investments in them, we may be unable to attract or retain customers, and our business and operating results could be materially adversely affected. Furthermore, new or shifting customer demands, tastes or interests, superior competitive offerings or a deterioration in our product quality or our ability to bring new or enhanced product offerings to market quickly and efficiently could negatively affect the attractiveness of our products and the economics of our business and require us to make substantial changes to and additional investments in our product offerings or business model. In addition, we frequently experiment with and test different product offerings and marketing and pricing strategies, such as our implementation of a shipping charge on all subscription meal kit and wine orders in 2021 and our new meal and wine price increase implemented in the second quarter of 2022, as well as our customers’ digital experiences, including by updating our online and mobile platforms. If these experiments, tests and updates are unsuccessful, or if the product offerings and strategies we introduce based on the results of such experiments, tests and updates do not perform as expected, our ability to retain existing customers, attract new customers, and increase customer engagement may be adversely affected.

Developing and launching new product offerings or enhancements to our existing product offerings involves significant risks and uncertainties, including risks related to the reception of such product offerings by our existing and potential future customers, increases in operational complexity, unanticipated delays or challenges in implementing such offerings or enhancements, increased strain on our operational and internal resources (including an impairment of our ability to accurately forecast demand and related supply), inability to adequately support new offerings or enhancements with sufficient marketing investment and negative publicity in the event such new or enhanced product offerings are perceived to be unsuccessful. In addition, as a result of both the increased demand we saw as a result of the impact the COVID-19 pandemic had on consumer behaviors and due to pandemic-related labor shortages, in 2020 we delayed, and may in the future delay, launching certain new product offerings or cut back on certain weekly cycles in order to remove some operational complexities to meet demand levels, which may have an adverse effect on our ability to retain or attract new customers. For example, in response to the increase in demand as a result of the COVID-19 pandemic, in order to streamline our operations, we temporarily suspended additional menu options through much of the second quarter of 2020, such as returning to eight weekly options under our Two-Serving Plan instead of the eleven weekly options we had introduced in the third quarter of 2019, and delaying the national rollout of our Meal Prep Plan and other new initiatives. We have also closed certain weekly cycle offerings early to limit capacity. While we have reintroduced additional menu option variety back into our offerings and have launched new products, which increase complexity, we may not be able to meet customer demand if we are unable to fully operate our fulfillment centers due to labor shortages or planned or unplanned pauses in production. See “Our results could be materially and adversely affected by the COVID-19 pandemic in the United States” for more information.

Significant new initiatives have in the past resulted in, and our recent new initiatives may in the future result in, operational challenges affecting our business. In addition, developing and launching certain new product offerings and enhancements to our existing product offerings may involve significant capital investments and such investments may not prove to be justified. Any of the foregoing risks and challenges could materially adversely affect our ability to attract and retain customers as well as our visibility into expected operating results, and could materially adversely affect our business, financial condition and operating results.

If we do not successfully maintain, operate and optimize our fulfillment centers and logistics channels, and manage our ongoing real property and operational needs, our business, financial condition and operating results could be materially adversely affected.

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If we do not successfully maintain, operate and optimize our fulfillment centers, or if we vacate these facilities, or repurpose parts of these facilities as part of our operating efficiency initiatives or otherwise, we may experience insufficient or excess fulfillment capacity, increased costs, impairment charges or other harm to our business. For example, following the closure of the Arlington, Texas fulfillment center in the first half of 2020, we temporarily reopened it in January 2021 to leverage existing assets to meet forecasted demand while we continued to identify and implement other operating efficiencies in our other fulfillment centers; we then closed the Arlington fulfillment center in April 2021, consolidating production volume at our other fulfillment centers. We have encountered in the past, and may encounter in the future, both as a result of the COVID-19 pandemic and otherwise, higher levels of worker absenteeism and difficulty in hiring a sufficient number of employees to adequately staff our fulfillment centers, causing us to use higher levels of temporary workers through third parties, generally at greater cost and providing lower levels of performance, and to cancel or delay customer orders and close some weekly offering cycles early to manage demand. If we do not have sufficient fulfillment capacity or experience problems or delays in fulfilling orders, our customers may experience delays in receiving their meal deliveries, receive deficient orders and/or have their orders canceled, which could harm our reputation and our customer relationships and could materially adversely affect our business, financial condition and operating results. In addition, any disruption in, or the loss of operations at, one or more of our fulfillment centers, even on a short-term basis, whether as a result of COVID-19 or otherwise, could delay or postpone production of our products, which could materially adversely affect our business, financial condition and operating results.

If events or circumstances indicate that the carrying value of our long-lived assets may not be recoverable, we may be required to recognize impairment charges on any of our assets. For example, in 2017 we recorded impairment charges of $9.5 million on long-lived assets primarily related to the transition of all of our Jersey City fulfillment center operations to our fulfillment center in Linden, New Jersey, as well as our decision to no longer pursue the planned build-out of the Fairfield, California facility, which lease was terminated on March 30, 2020. We also rely on fixed duration leases for our other real properties, including for our headquarters in New York, New York, which we entered into in October 2019 and expires in December 2024. If we are unable to timely enter into suitable lease agreements or extensions for any of our real properties, we may incur additional unanticipated costs associated with identifying and securing an alternative premise, suffer disruptions to our operations as a result of any necessary transition, face employee attrition or experience other harm to our business. In May 2021, we entered into an agreement to sublease the remainder of our Arlington fulfillment center, which sublease is expected to continue through the duration of our existing lease for the fulfillment center. See “We have implemented significant reorganization activities in our business, including the closure of our fulfillment center in Arlington, Texas in 2020. These and other reorganization activities could have long-term adverse effects on our business, including additional attrition in personnel and the failure to achieve the anticipated benefits and savings from these activities” for more information.

We have designed and built our own fulfillment center infrastructure, including customizing third-party inventory and package handling software systems, which is tailored to meet the specific needs of our business. Furthermore, we are continuing to expand the use of automated production equipment and processes in our fulfillment centers. To the extent we add capacity, capabilities and automated production equipment and processes to our fulfillment centers, our fulfillment operations will become increasingly complex and challenging. Any failure to hire, train and/or retain employees capable of operating our fulfillment centers could materially adversely affect our business, financial condition and operating results. We also may be unable to procure and implement automated production equipment and processes on a timely basis, and they may not operate as intended or achieve anticipated cost efficiencies. For example, suppliers could miss their equipment delivery schedules, new production lines and operations could improve less rapidly than expected, or not at all, the equipment or processes could require longer design time than anticipated or redesigning after installation, and new production technology may involve equipment and processes with which we are not fully experienced. Difficulties we experience in further automating our fulfillment processes could impair our ability to reduce costs and could materially adversely affect our business, financial condition and operating results. Furthermore, we currently, and may in the future continue to, contract with third parties to conduct certain of our fulfillment processes and operations on our behalf. Interruptions or failures in these services, or operational impacts arising from transitioning between these third-party providers, could delay or prevent the delivery of our products and adversely affect our ability to fulfill our customers’ orders. In addition, any disruption in the operation of our fulfillment centers, including due to factors such as earthquakes, extreme weather, fires, floods, public health crises, such as pandemics and epidemics, government-mandated closures, power losses, telecommunications failures, acts of war or terrorism, human errors and similar events or disruptions, could materially adversely affect our business, financial condition and operating results.

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We may incur future capital expenditures in our fulfillment centers in order to optimize and drive efficiency in our operations. For a discussion of our projected future capital expenditures and risks related to such capital expenditures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” In executing our growth strategy and continuing to expand our product offerings and grow our customer base, we may be unable to effectively increase our fulfillment capacity or effectively control expansion related expenses. In addition, as we continue to execute our growth strategy, we may experience problems fulfilling orders in a timely manner or in a manner our customers expect, or our customers may experience delays in receiving their purchases, or, if we grow faster than anticipated, we may exceed our fulfillment center capacity sooner than we anticipate, any of which could harm our reputation and our relationships with our customers. Many of the expenses and investments with respect to our fulfillment centers are fixed, and any expansion of such fulfillment centers will require additional investment of capital. We expect to continue to incur certain capital expenditures in the future for our fulfillment center operations. We may incur such expenses or make such investments in advance of expected sales, and such expected sales may not occur. The timing and amount of our projected capital expenditures is dependent upon a number of factors and may vary significantly from our estimates. We cannot assure you that we will have sufficient capital resources to fund future capital expenditures or if any future capital expenditures will be timely or effectively integrated into our existing operations, any adjustments to production volume, including transitions between fulfillment centers, will be completed on an efficient and timely basis without adversely impacting our operations, that our fulfillment software systems will continue to meet our business needs, or that we will be able to execute on our strategic plans or recruit qualified managerial and operational personnel necessary to support our strategic plans. In addition, we intend to reduce spending on capital expenditures, to the extent needed, if we are unable to deliver results from our growth strategy, or otherwise effectively manage expenses and cash flows, in order to comply with the financial covenants in our senior secured notes, which will negatively and materially impact net revenue and our ability to execute our growth strategy on our anticipated timeline, if at all. Any changes to our overall fulfillment capacity or existing fulfillment center operations will put pressure on our managerial, financial, operational, technological and other resources.

Our business depends on a strong and trusted brand, and any failure to maintain, protect or enhance our brand, including as a result of events outside our control, could materially adversely affect our business.

We have developed a strong and trusted brand, and we believe our future success depends on our ability to maintain and grow the value of the Blue Apron brand. Maintaining, promoting and positioning our brand and reputation will depend on, among other factors, the success of our food safety, quality assurance, marketing and merchandising efforts and our ability to provide a consistent, high quality customer experience. Any negative publicity, regardless of its accuracy, could materially adversely affect our business. Brand value is based in large part on perceptions of subjective qualities, and any incident that erodes the loyalty of our customers or suppliers, including adverse publicity or a governmental investigation or litigation, could significantly reduce the value of our brand and significantly damage our business.

We believe that our customers hold us and our products to a high food safety standard. Therefore, real or perceived quality or food safety concerns or failures to comply with applicable food regulations and requirements, whether or not ultimately based on fact and whether or not involving us (such as incidents involving our competitors), could cause negative publicity and lost confidence in our company, brand or products, which could in turn harm our reputation and sales, and could materially adversely affect our business, financial condition and operating results.

In addition, social media platforms and other forms of Internet-based communications provide individuals with access to broad audiences, and the availability of information on social media platforms is virtually immediate, as can be its impact. Many social media platforms immediately publish the content their participants post, often without filters or checks on accuracy of the content posted. Furthermore, other Internet-based or traditional media outlets may in turn reference or republish such social media content to an even broader audience. Information concerning us, regardless of its accuracy, may be posted on such platforms at any time. Information posted may be adverse to our interests or may be inaccurate, each of which may materially harm our brand, reputation, performance, prospects and business, and such harm may be immediate and we may have little or no opportunity to respond or to seek redress or a correction.

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The value of our brand also depends on effective customer support to provide a high-quality customer experience, which requires significant personnel expense. If not managed properly, this expense could impact our profitability. Failure to manage or train our own or outsourced customer support representatives properly, or our inability to hire and/or retain sufficient customer support representatives in sufficient numbers could result in lower-quality customer support and/or increased customer response times, compromising our ability to handle customer complaints effectively. For example, in light of ongoing nationwide labor shortages, both as a result of the COVID-19 pandemic and otherwise, we have encountered in the past and may encounter in the future difficulty hiring and retaining customer support representatives, resulting in increased customer response times.

As we have seen disruptions in labor availability from time to time, whether as a result of the COVID-19 pandemic, general market trends or otherwise, we have had to, and may in the future have to, cancel or delay some customer orders, and we have closed, and may continue to close, some weekly offering cycles early to manage demand. In addition, we have had to, and may again have to, pause production at a fulfillment center in order to implement our COVID-19 sanitation procedures, which has resulted, and could again result in, delayed or canceled orders. These actions or other actions that we may take in response to the COVID-19 pandemic that have the effect of delaying or canceling orders could negatively impact our ability to maintain, protect or enhance our brand.

Environmental, social and governance matters may impact our business and reputation.

There has been increased focus, including by consumers, investors and other stakeholders, as well as by governmental and non-governmental organizations, on ESG matters. We have and plan to continue undertaking ESG initiatives. Any failure to meet our ESG commitments could negatively impact our business, financial condition and operating results. These impacts could be difficult and costly to overcome. We are also subject to an ESG covenant under our senior secured notes which may require us to pay a 1% penalty upon repayment of the senior secured notes if we fail to meet that covenant.

In addition, achieving our ESG initiatives may result in increased costs in our supply chain, fulfillment, and/or corporate business operations, and could deviate from our initial estimates and have a material adverse effect on our business and financial condition. In addition, standards and research regarding ESG initiatives could change and become more onerous for both for us and our third-party suppliers and vendors to meet successfully. Evolving data and research could undermine our claims and beliefs that we have made in reliance on current research, which could also result in costs, a decrease in net revenue, and negative market perception that could have a material adverse effect on our business and financial condition.

Increased competition presents an ongoing threat to the success of our business.

We expect competition in food sales generally, and with companies providing food delivery in particular, to continue to increase. We compete with other meal kit, food and meal delivery companies, the supermarket industry, including online supermarket retailers, and a wide array of food retailers (including natural and organic, specialty, conventional, mass, discount and other food retail formats). We also compete with a wide array of casual dining and quick service restaurants and other food service businesses in the restaurant industry, as well as a broad range of online wine retailers, wine specialty stores and retail liquor stores. In addition, we compete with food manufacturers, consumer packaged goods companies, and other food and ingredient producers.

We believe that our ability to compete depends upon many factors both within and beyond our control, including:

● our marketing efforts;

● the flexibility and variety of our product offerings relative to our competitors, and our ability to timely launch new product initiatives;

● the quality and price of products offered by us and our competitors;

● our reputation and brand strength relative to our competitors;

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● customer satisfaction;

● consumer tastes and preferences and trends in consumer spending, which have changed, and may continue to change, in response to macroeconomic factors, like inflation, the impact of the COVID-19 pandemic or otherwise;

● the size and composition of our customer base;

● the convenience of the experience that we provide;

● the strength of our food safety and quality program

● our ability to comply with, and manage the costs of complying with, laws and regulations applicable to our business, including the regulations relating to COVID-19; and

● our ability to cost-effectively source and distribute the products we offer and to manage our operations.

Some of our current competitors have, and potential competitors may have, longer operating histories, larger or more efficient fulfillment infrastructures, greater technical capabilities, significantly greater financial, marketing and other resources and larger customer bases than we do. In addition, business combinations and consolidation in and across the industries in which we compete could further increase the competition we face and result in competitors with significantly greater resources and customer bases than us. Further, some of our other current or potential competitors may be smaller, less regulated, and have a greater ability to reposition their product offerings than companies that, like us, operate at a larger scale. These factors may allow our competitors to derive greater sales and profits from their existing customer base, acquire customers at lower costs, respond more quickly than we can to changes in consumer demand and tastes, or otherwise compete with us effectively, which may adversely affect our business, financial condition and operating results. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build larger customer bases or generate additional sales more effectively than we do.

In addition, as the COVID-19 pandemic’s impact on consumer behaviors has tapered, and consumers seek out other dining options or resume traveling, we may see an increase in competition, which may be significant, and which could have an adverse effect on our business, financial condition and operating results.

Food safety and food borne illness incidents or advertising or product mislabeling may materially adversely affect our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings.

Selling food for human consumption involves inherent legal and other risks, and there is increasing governmental scrutiny of and public awareness regarding food safety. Unexpected side effects, illness, injury or death related to allergens, food borne illnesses or other food safety incidents (including food tampering or contamination) caused by products we sell, or involving suppliers that supply us with ingredients and other products, could result in the discontinuance of sales of these products or our relationships with such suppliers, or otherwise result in increased operating costs or harm to our reputation. Shipment of adulterated products, even if inadvertent, can result in criminal or civil liability. Such incidents could also expose us to product liability, negligence or other lawsuits brought by consumers, consumer agencies or others. Any claims brought against us may exceed or be outside the scope of our existing or future insurance policy coverage or limits. Any judgment against us that is in excess of our insurance policy limits or not covered by our policies or not subject to insurance would have to be paid from our cash reserves, which would reduce our capital resources, which could impact our ability to execute our growth strategy and/or comply with the minimum liquidity covenant in our senior secured notes.

The occurrence of food borne illnesses or other food safety incidents could also adversely affect the price and availability of affected ingredients, resulting in higher costs, disruptions in supply and a reduction in our sales. Furthermore, any instances of food contamination, whether or not caused by our products, could subject us or our suppliers to a food recall pursuant to the Food Safety Modernization Act of the United States Food and Drug Administration, or FDA, and comparable state laws. The risk of food contamination may be also heightened further due to changes in government funding or a government shutdown. Our meat and poultry suppliers may operate only under

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inspection by the United States Department of Agriculture, or USDA. While USDA meat and poultry inspections are considered essential services, a government shutdown or lapse in funding may increase the risk that inspectors perform their duties inadequately, fail to report for work, or leave their positions without prompt replacement, potentially compromising food safety.

We have been in the past, and could be in the future, subject to food recalls. Food recalls could result in significant losses due to their costs, the destruction of product inventory, lost net revenues due to customer credits and refunds, lost future sales due to the unavailability of the product for a period of time and potential loss of existing customers and a potential negative impact on our ability to retain existing customers and attract new customers due to negative consumer experiences or as a result of an adverse impact on our brand and reputation.

In addition, food companies have been subject to targeted, large-scale tampering as well as to opportunistic, individual product tampering, and we could be a target for product tampering. Forms of tampering could include the introduction of foreign material, chemical contaminants and pathological organisms into consumer products as well as product substitution. Beginning in July 2019, FDA requirements require companies like us to analyze, prepare and implement “food defense” mitigation strategies specifically to address tampering designed to inflict widespread public health harm. If we do not adequately address the possibility, or any actual instance, of product tampering, we could face possible seizure or recall of our products and the imposition of civil or criminal sanctions, which could materially adversely affect our business, financial condition and operating results.

Changes in consumer tastes and preferences or in consumer spending due to inflation or otherwise, and other economic or financial market conditions could materially adversely affect our business.

Our operating results may be materially adversely affected by changes in consumer tastes and preferences. Our future success depends in part on our ability to anticipate the tastes, eating habits and lifestyle preferences of consumers and to offer products that appeal to consumer tastes and preferences. Consumer tastes and preferences may change from time to time and can be affected by a number of different trends and other factors that are beyond our control. For example, our net revenue could be materially adversely affected by changes in consumer demand in response to nutritional and dietary trends, dietary concerns regarding items such as calories, sodium, carbohydrates or fat, or concerns regarding food safety. Our competitors may react more efficiently and effectively to these changes than we can. We cannot provide any assurances regarding our ability to respond effectively to changes in consumer health perceptions or our ability to adapt our product offerings to trends in eating habits. If we fail to anticipate, identify or react to these changes and trends, or to introduce new and improved products on a timely basis, or if we cease offering such products or fail to maintain partnerships that react to these changes and trends, we may experience reduced demand for our products, which could materially adversely affect our business, financial condition and operating results.

In addition, the business of selling food products over the Internet is dynamic and continues to evolve. The market segment for food delivery has grown significantly, and this growth may not continue or may decline, including specifically with respect to the meal solutions sector. If customers cease to find value in this model or otherwise lose interest in our product offerings or our business model generally, we may not acquire new customers in numbers sufficient to sustain growth in our business or retain existing customers at rates consistent with our business model, which could be materially adversely affect our business, financial condition, and operating results.

Furthermore, preferences and overall economic conditions, such as inflation, that impact consumer confidence and spending, including discretionary spending, could have a material impact on our business. Economic conditions affecting disposable consumer income such as employment levels, business conditions, higher rates of inflation, slower growth or recession, market volatility, negative impacts on the economy from the COVID-19 pandemic and related uncertainty, negative financial news, changes in housing market conditions, the availability of credit, interest rates, tax rates, new or increased tariffs, fuel and energy costs, the effect of natural disasters or acts of terrorism, and other matters, could reduce consumer spending or cause consumers to shift their spending to lower priced alternatives, each of which could materially adversely affect our business, financial condition and operating results.

In addition, the business of selling food products over the Internet is dynamic and continues to evolve. The market segment for food delivery has grown significantly, and this growth may not continue or may decline, including

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specifically with respect to the meal solutions sector. If customers cease to find value in this model or otherwise lose interest in our product offerings or our business model generally, we may not acquire new customers in numbers sufficient to sustain growth in our business or retain existing customers at rates consistent with our business model, which could be materially adversely affect our business, financial condition, and operating results.

In addition to an adverse impact on demand for our products, uncertainty about, or a decline in, economic conditions could have a significant impact on our suppliers, logistics providers and other business partners, including resulting in financial instability, inability to obtain credit to finance operations and insolvency. Certain of our suppliers, and their manufacturing and assembly activities, are located outside the United States, and as a result our operations and performance depend on both global and regional economic conditions. These and other economic factors could materially adversely affect our business, financial condition and operating results.

Our results could be materially and adversely affected by the COVID-19 pandemic in the United States.

Continued and future outbreaks of COVID-19 in the United States, including as a result of new variants and subvariants of the virus, could materially and adversely impact our business, including as a result of the loss of adequate labor, whether as a result of heightened absenteeism or challenges in recruiting and retention or otherwise, prolonged closures, or series of temporary closures, of one or more fulfillment centers as a result of a COVID-19 outbreak, a government order or otherwise, or supply chain or carrier interruptions or delays. Further, the COVID-19 pandemic has had, and could continue to have, a negative impact on economic conditions, which may adversely impact consumer demand for meal kits, which may have a material adverse effect on our business, financial condition and operating results. To the extent any of these events occur, our business, financial condition and operating results could be materially and adversely affected. The extent to which the COVID-19 pandemic impacts our business will depend on future developments, including the duration and severity of the COVID-19 pandemic, the emergence of new variants or subvariants of the virus, the level of COVID-19 vaccination rates in various areas of the United States, any re-introduction of restrictions on consumer behaviors, the length of time for economic and operating conditions to return to prior levels, together with resulting consumer behaviors, and numerous other uncertainties, all of which remain uncertain.

We continue to monitor our operations and government recommendations and we have made modifications to our normal operations as a result of the COVID-19 pandemic. Our fulfillment centers have experienced, and may experience in the future, disruptions in production, including as a result of planned or unplanned pauses in production to implement additional safety measures, as well as a result of worker absenteeism at higher-than-normal rates and/or challenges in hiring and retaining sufficient workforce. Such disruptions have caused, and could continue to cause, delayed or canceled orders, or the decision to close certain weekly cycles early, each of which could have an adverse effect on our brand and our results of operations. These operational risks related to COVID-19 have impacted, and may continue to impact, the timing of certain new product launches. In addition, in response to the COVID-19 pandemic, our corporate employees, including our test kitchen employees, as well as other employees outside of our fulfillment centers, have generally been required to, and more recently given the option to, work remotely since the end of the first quarter of 2020, which may, if prolonged, have an adverse impact on the productivity of certain parts of our workforce, which could negatively impact our business and results of operations.

Our ability to source quality ingredients and other products is critical to our business, and any disruption to our supply or supply chain could materially adversely affect our business.

We depend on frequent deliveries of ingredients and other products from a variety of local, regional, national and international suppliers, and some of our suppliers may depend on a variety of other local, regional, national and international suppliers to fulfill the purchase orders we place with them. The availability of such ingredients and other products at competitive prices depends on many factors beyond our control, including the number and size of farms, ranches, vineyards and other suppliers that provide crops, livestock and other raw materials that meet our quality and production standards.

We rely on our suppliers, and their supply chains, to meet our quality and production standards and specifications and supply ingredients and other products in a timely and safe manner. We have developed and

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implemented a series of measures to ensure the safety and quality of our third-party supplied products, including using contract specifications, certificates of identity for some products or ingredients, sample testing by suppliers and sensory based testing. However, no safety and quality measures can eliminate the possibility that suppliers may provide us with defective or out of specification products against which regulators may take action or which may subject us to litigation or require a recall. Suppliers may provide us with food that is or may be unsafe, food that is below our quality standards or food that is improperly labeled. In addition to a negative customer experience, we could face possible seizure or recall of our products and the imposition of civil or criminal sanctions if we incorporate a defective or out of specification item into one of our deliveries.

Furthermore, there are many factors beyond our control which could cause shortages or interruptions in the supply of our ingredients and other products, including adverse weather, environmental factors, natural disasters, prolonged utility outages, unanticipated demand, shipping and distribution issues, labor problems, public health crises, such as pandemics and epidemics, changes in law or policy, food safety issues by our suppliers and their supply chains, and the financial health of our suppliers and their supply chains. For example, any prolonged negative impact on our supply chain as a result of the COVID-19 pandemic, or otherwise, could materially and adversely impact our business, financial condition and operating results. Production of the agricultural products used in our business may also be materially adversely affected by drought, water scarcity, temperature extremes, scarcity of agricultural labor, changes in government agricultural programs or subsidies, import restrictions, scarcity of suitable agricultural land, crop conditions, crop or animal diseases or crop pests. Failure to take adequate steps to mitigate the likelihood or potential effect of such events, or to effectively manage such events if they occur, may materially adversely affect our business, financial condition and operating results, particularly in circumstances where an ingredient or product is sourced from a single supplier or location.

In addition, unexpected delays in deliveries from suppliers that ship directly to our fulfillment centers or increases in transportation costs, including through increased fuel costs, could materially adversely affect our business, financial condition and operating results. Labor shortages or work stoppages in the transportation industry, long term disruptions to the national transportation infrastructure, reduction in capacity and industry specific regulations such as hours of service rules that lead to delays or interruptions of deliveries, whether as a result of the COVID-19 pandemic or otherwise, could also materially adversely affect our business, financial condition and operating results.

We currently source certain of our ingredients from suppliers located outside of the United States. Any event causing a disruption or delay of imports from suppliers located outside of the United States, including weather, drought, crop related diseases, the imposition of import or export restrictions, restrictions on the transfer of funds or increased tariffs, destination based taxes, value added taxes, quotas or increased regulatory requirements, could increase the cost or reduce the supply of our ingredients and the other materials required by our product offerings, which could materially adversely affect our business, financial condition and operating results. Furthermore, our suppliers’ operations may be adversely affected by political and financial instability, resulting in the disruption of trade from exporting countries, restrictions on the transfer of funds or other trade disruptions, each of which could adversely affect our access or ability to source ingredients and other materials used in our product offerings on a timely or cost-effective basis.

We have implemented significant reorganization activities in our business, including the closure of our fulfillment center in Arlington, Texas in 2020. These and other reorganization activities could have long-term adverse effects on our business, including additional attrition in personnel and the failure to achieve the anticipated benefits and savings from these activities.

We have implemented significant reorganization activities in our business to adjust our cost structure, and we may engage in similar reorganization activities in the future. In February 2020, we announced a plan to close our fulfillment center in Arlington, Texas. As part of this plan, in the first and second quarters of 2020 we transferred all of the remaining production volume from our Arlington, Texas fulfillment center to our Linden, New Jersey and Richmond, California fulfillment centers. Previously, in the first quarter of 2019 we had transferred a substantial portion of production volume from our Arlington, Texas fulfillment center to our Linden, New Jersey fulfillment center. In addition, in the fall of 2018 and the fall of 2017, we implemented reductions in the number of our employees across our corporate offices and fulfillment centers. These actions resulted and could result in the future in the loss of employees across various functions, the loss of institutional knowledge and expertise and the reallocation and combination of

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certain roles and responsibilities across our organization, all of which could adversely affect our operations. In addition, there is a risk of reduced employee morale and, as a result, we could face further employee attrition following a reorganization activity. We may also be unable to efficiently transition the production volume between our fulfillment centers or maintain our production efficiencies during or after any such transfer. For example, we temporarily reopened the Arlington fulfillment center in January 2021 to leverage existing assets to meet forecasted demand while we continued to identify and implement other operating efficiencies in our other fulfillment centers; we then closed the Arlington fulfillment center in April 2021, consolidating production volume at our other fulfillment centers.

Other reorganization activities in which we may engage in the future, as well as other ongoing or future cost reduction activities, may reduce our available talent, assets, capabilities and other resources and could slow improvements in our products and services, adversely affect our ability to respond to competition and limit our ability to satisfy customer demands. As a result, our management may need to divert a disproportionate amount of its attention away from our day-to-day strategic and operational activities, and devote a substantial amount of time to managing the organizational changes brought about by the reorganization. If we do not have sufficient resources, we may not be able to effectively manage the changes in our business operations resulting from the reorganization, which may result in weaknesses in our operations, risks that we may not be able to comply with legal and regulatory requirements, loss of business opportunities, loss of employees and reduced productivity among remaining employees. If we are unable to effectively manage these activities, our expenses may be higher than expected, and we may not be able to implement our business strategy or achieve the anticipated benefits and savings from any such activities.

We may also determine to take additional measures to reduce costs, especially if we do not close the May Sponsorship Gift Cards transaction and the second closing of the RJB April 2022 Private Placement as expected, which could result in further disruptions to our operations and present additional challenges to the effective management of our company. For example, if we are unable to deliver results from our growth strategy, or otherwise effectively manage expenses and cash flows, we intend to reduce spending, particularly in marketing and capital expenditures, to the extent needed in order to comply with the minimum liquidity covenant in our senior secured notes, which will negatively and materially impact net revenue and our ability to execute our growth strategy. In addition, delays in implementing planned restructuring activities, unexpected costs, or the failure to meet targeted improvements may diminish the operational or financial benefits we realize from such actions. Any of the circumstances described above could materially adversely affect our business and operating and financial results.

If we lose key management or fail to meet our need for qualified employees with specialized skills, our business, financial condition and operating results could be materially adversely affected.

Our future success is dependent upon our ability to retain key management. Our executive officers and other management personnel are employees “at will” and could elect to terminate their employment with us at any time. For example, we had three executive officers resign in each of 2020 and 2019, including the chief executive officer and one of our founders. Since 2017, we have had three different chief executive officers. We do not maintain “key person” insurance on the lives of any of our executive officers.

Our future success is also dependent upon our ability to attract, retain and effectively deploy qualified employees, including management, possessing a broad range of skills and expertise. We may need to offer higher compensation and other benefits in order to attract and retain key personnel in the future, and, to attract top talent, we must offer competitive compensation packages before we have the opportunity to validate the productivity and effectiveness of new employees. Additionally, from time to time we have not been, and we may not in the future be, able to hire sufficient workforce quickly enough or to retain sufficient workforce, or if we cannot grow net revenue, we may not have adequate resources to meet our hiring needs, and we must effectively deploy our workforce in order to efficiently allocate our internal resources. If we fail to meet our hiring needs, successfully integrate our new hires or effectively deploy our existing personnel, our efficiency and ability to meet our forecasts, our ability to successfully execute on our strategic plan to sustain net revenue growth and our employee morale, productivity and retention could all suffer. Any of these factors could materially adversely affect our business, financial condition and operating results.

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Our past net revenue growth masked seasonal fluctuations in our operating results. If our net revenue declines or if it begins to increase at a more moderate rate, or as seasonal patterns become more pronounced, seasonality could have a material impact on our results.

Our business is seasonal in nature, which impacts the levels at which customers engage with our products and brand, and, as a result, the trends of our revenue and our expenses fluctuate from quarter to quarter. For example, prior to the effect of the economic and social impact of the COVID-19 pandemic, we historically anticipated that the first quarter of each year would generally represent our strongest quarter in terms of customer engagement. Conversely, during the summer months and the end of year holidays, when people are vacationing more often or have less predictable weekly routines, we historically anticipated lower customer engagement. In addition, our marketing strategies and expenditures, which may be informed by these seasonal trends, will impact our quarterly results of operations. These seasonal trends may cause our net revenue and our cash requirements to vary from quarter to quarter depending on the variability in the volume and timing of sales. We believe that these seasonal trends have affected and will continue to affect our quarterly results in the future. However, we cannot predict the impact that the COVID-19 pandemic or other macroeconomic trends such as inflation may have on seasonality. Our past net revenue growth, due in part to the impact of the COVID-19 pandemic on consumer behaviors, masked seasonality, but if our net revenue declines or if it increases at a moderate rate, or if seasonal spending by our customers becomes more pronounced, seasonality could have a more significant impact on our operating results from period to period. In addition, in the first and second quarters of 2022, we entered into sponsorship agreements with a related party under which we agreed to issue $29.0 million of gift cards (net of promotional discounts), which may result in higher levels of card breakage revenue which may inflate net revenue or mask seasonality in future periods. As of the date of this Quarterly Report on Form 10-Q, we have not yet received $20.0 million relating to the May Sponsorship Gift Cards transaction, which is now expected to be received by August 31, 2022. See Notes 13 and 16 to the consolidated financial statements in this Quarterly Report on Form 10-Q.

We rely on our proprietary technology and data to forecast customer demand and to manage our supply chain, and any failure of this technology could materially adversely affect our business, financial condition and operating results.

We rely on our proprietary technology and data to forecast demand and predict our customers’ orders, determine the amounts of ingredients and other supply to purchase, and to optimize our in-bound and out-bound logistics for delivery and transport of our supply to our fulfillment centers and of our product offerings to customers. If this technology fails or produces inaccurate results at any step in this process—such as if the data we collect from customers is insufficient or incorrect, if we over or underestimate future demand, or if we fail to optimize delivery routes to our customers—we could experience increased food waste or shortages in key ingredients, the operational efficiency of our supply chain may suffer (including as a result of excess or shortage of fulfillment center capacity) or our customers may experience delays or failures in the delivery of our product offerings, for example by missing ingredients. Moreover, forecasts based on historical data, regardless of any historical patterns or the quality of the underlying data, are inherently uncertain, and unforeseen changes in consumer tastes or external events could result in material inaccuracy of our forecasts, which could result in disruptions in our business and our incurrence of significant costs and waste. Furthermore, any interruptions or delays in our ability to use or access our proprietary technology could lead to interruptions or delays in our supply chain. The occurrence of any of the foregoing risks could materially adversely affect our business, financial condition and operating results.

The reliable and cost-effective storage, transport and delivery of ingredients and other products and our product offerings is critical to our business, and any interruptions, delays or failures could materially adversely affect our reputation, business, financial condition and operating results.

We maintain arrangements with third parties to store ingredients and other products, to deliver ingredients and other products from our suppliers to our fulfillment centers and to transport ingredients and other products between our fulfillment centers. Interruptions or failures in these services could delay or prevent the delivery of these ingredients and other products to us and therefore adversely affect our ability to fulfill our customers’ orders. These interruptions may be due to events that are beyond our control or the control of the third parties with whom we contract.

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We also maintain arrangements with third-party transport carriers to deliver the food products we sell to our customers. Interruptions, delays or failures in these carrier services could prevent the timely or proper delivery of these products, which may result in significant product inventory losses given the highly perishable nature of our food products. These interruptions may be due to events that are beyond our control or the control of these carriers, including adverse weather, natural disasters and public health crises, such as pandemics and epidemics. If these carriers experience performance problems or other difficulties, we may not be able to deliver orders in a timely manner and meet customer expectations, and our business and reputation could suffer. For example, carrier interruptions and delays as a result of the COVID-19 pandemic or otherwise could impact our ability to deliver orders to our customers which could materially and adversely impact our business, financial condition and operating results. In addition, if we are not able to maintain acceptable pricing and other terms with these carriers, whether as a result of inflation or otherwise, and we do not increase the price of our product offerings, we may experience reduced operating margins.

We rely on third-party transport carriers for the delivery of our wines to our customers. State and federal laws regulate the ability of transport carriers to transport wine, and carriers may be required to obtain licenses in order to deliver wine to our customers. Changes in our access to those carriers, including changes in prices and fuel surcharges or changes in our relationships with those carriers, changes in the laws allowing third party transport of wine, or regulatory discipline against licenses held by those carriers, could materially adversely affect our wine business.

Delivery of the products we sell to our customers could also be affected or interrupted by the merger, acquisition, insolvency, or government shutdown of the carriers we engage to make deliveries. If the products we sell are not delivered in proper condition or on a timely basis, our business and reputation could suffer.

Unionization activities may disrupt our operations and adversely affect our business.

Although none of our employees is currently covered under a collective bargaining agreement, our employees may elect to seek to be represented by labor unions in the future. For example, in April 2018, a local labor union filed an election petition with the National Labor Relations Board seeking to represent certain employees at our Linden, New Jersey facility; however, such employees subsequently voted to not be represented by the union and one of our competitors recently faced a union election in three states. If a significant number of our employees were to become unionized and collective bargaining agreement terms were to deviate significantly from our current compensation and benefits structure, our business, financial condition and operating results could be materially adversely affected. In addition, a labor dispute involving some or all of our employees may harm our reputation, disrupt our operations and reduce our net revenues, and the resolution of labor disputes may increase our costs.

Any failure to adequately store, maintain and deliver quality perishable foods could materially adversely affect our business, financial condition and operating results.

Our ability to adequately store, maintain and deliver quality perishable foods is critical to our business. We store food products, which are highly perishable, in refrigerated fulfillment centers and ship them to our customers inside boxes that are insulated with thermal or corrugate liners and frozen refrigerants to maintain appropriate temperatures in transit and use refrigerated third-party delivery trucks to support temperature control for shipments to certain locations. Keeping our food products at specific temperatures maintains freshness and enhances food safety. In the event of extended power outages, natural disasters or other catastrophic occurrences, failures of the refrigeration systems in our fulfillment centers or third-party delivery trucks, failure to use adequate packaging to maintain appropriate temperatures, or other circumstances both within and beyond our control, our inability to store highly perishable inventory at specific temperatures could result in significant product inventory losses as well as increased risk of food borne illnesses and other food safety risks. Improper handling or storage of food by a customer—without any fault by us—could result in food borne illnesses, which could nonetheless result in negative publicity and harm to our brand and reputation. Further, we contract with third parties to conduct certain fulfillment processes and operations on our behalf. Any failure by such third party to adequately store, maintain or transport perishable foods could negatively impact the safety, quality and merchantability of our products and the experience of our customers. The occurrence of any of these risks could materially adversely affect our business, financial condition and operating results.

Disruptions in our data and information systems could harm our reputation and our ability to run our business.

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We rely extensively on data and information systems for our supply chain, order processing, fulfillment operations, financial reporting, human resources and various other operations, processes and transactions. Furthermore, a significant portion of the communications between, and storage of personal data of, our personnel, customers and suppliers depends on information technology. Our data and information systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches (including breaches of our transaction processing or other systems that could result in the compromise of confidential customer data), catastrophic events, data breaches and usage errors by our employees or third-party service providers. Our data and information technology systems may also fail to perform as we anticipate, and we may encounter difficulties in adapting these systems to changing technologies or expanding them to meet the future needs of our business. If our systems are breached, damaged or cease to function properly, we may have to make significant investments to fix or replace them, suffer interruptions in our operations, incur liability to our customers and others or face costly litigation, and our reputation with our customers may be harmed. We also rely on third parties for a majority of our data and information systems, including for third-party hosting and payment processing. If these facilities fail, or if they suffer a security breach or interruption or degradation of service, a significant amount of our data could be lost or compromised and our ability to operate our business and deliver our product offerings could be materially impaired. In addition, various third parties, such as our suppliers and payment processors, also rely heavily on information technology systems, and any failure of these systems could also cause loss of sales, transactional or other data and significant interruptions to our business. Any material interruption in the data and information technology systems we rely on, including the data or information technology systems of third parties, could materially adversely affect our business, financial condition and operating results.

Our business is subject to data security risks, including security breaches.

We, or our third-party vendors on our behalf, collect, process, store and transmit substantial amounts of information, including information about our customers and suppliers. We take steps to protect the security and integrity of the information we collect, process, store or transmit, but there is no guarantee that inadvertent or unauthorized use or disclosure will not occur or that third parties will not gain unauthorized access to this information despite such efforts. Security breaches, computer malware, computer hacking attacks and other compromises of information security measures have become more prevalent in the business world and may occur on our systems or those of our vendors in the future. Large Internet companies and websites have from time to time disclosed sophisticated and targeted attacks on portions of their websites, and an increasing number have reported such attacks resulting in breaches of their information security. We and our third-party vendors are at risk of suffering from similar attacks and breaches. Although we take steps to maintain confidential and proprietary information on our information systems, these measures and technology may not adequately prevent security breaches and we rely on our third-party vendors to take appropriate measures to protect the security and integrity of the information on those information systems. Because techniques used to obtain unauthorized access to or to sabotage information systems change frequently and may not be known until launched against us, we may be unable to anticipate or prevent these attacks. In addition, we have experienced, and may experience in the future, a “credentials stuffing” incident, which is where a third party is able to illicitly obtain a customer’s identification and password credentials on the dark web to access a customer’s account and certain account data. We have also experienced, and may experience in the future, fraudulent use of promotional coupons or gift card codes.

Any actual or suspected security breach or other compromise of our security measures or those of our third-party vendors, whether as a result of hacking efforts, denial of service attacks, viruses, malicious software, break ins, phishing attacks, social engineering or otherwise, could harm our reputation and business, damage our brand and make it harder to retain existing customers or acquire new ones, require us to expend significant capital and other resources to address the breach, and result in a violation of applicable laws, regulations or other legal obligations. Our insurance policies may not be adequate to reimburse us for direct losses caused by any such security breach or indirect losses due to resulting customer attrition.

We rely on email and other messaging services to connect with our existing and potential customers. Our customers may be targeted by parties using fraudulent spoofing and phishing emails to misappropriate passwords, payment information or other personal information or to introduce viruses through Trojan horse programs or otherwise through our customers’ computers, smartphones, tablets or other devices. Despite our efforts to mitigate the

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effectiveness of such malicious email campaigns through product improvements, spoofing and phishing may damage our brand and increase our costs. Any of these events or circumstances could materially adversely affect our business, financial condition and operating results.

We are subject to risks associated with payments to us from our customers and other third parties, including risks associated with fraud.

Nearly all of our customers’ payments are made by credit card or debit card. We currently rely exclusively on one third-party vendor to provide payment processing services, including the processing of payments from credit cards and debit cards, and our business would be disrupted if this vendor becomes unwilling or unable to provide these services to us and we are unable to find a suitable replacement on a timely basis. We are also subject to payment brand operating rules, payment card industry data security standards and certification requirements, which could change or be reinterpreted to make it more difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from customers, which would make our services less convenient and attractive to our customers and likely result in a substantial reduction in net revenue. We may also incur losses as a result of claims that the customer did not authorize given purchases, fraud, erroneous transmissions and customers who have closed bank accounts or have insufficient funds in their accounts to satisfy payments owed to us.

We are subject to, or voluntarily comply with, a number of other laws and regulations relating to the payments we accept from our customers and third parties, including with respect to money laundering, money transfers, privacy, and information security, and electronic fund transfers. These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply. If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.

The termination of, or material changes to, our relationships with key suppliers or vendors could materially adversely affect our business, financial condition and operating results.

We currently depend on a limited number of suppliers for some of our key ingredients. We strive to work with suppliers that engage in certain growing, raising or farming standards that we believe are superior to conventional practices and that can deliver products that are specific to our quality, food safety and production standards. Currently, there are a limited number of meat and seafood suppliers that are able to simultaneously meet our standards and volume requirements. As such, these suppliers could be difficult to replace if we were no longer able to rely on them. We also work with suppliers that produce specialty or unique ingredients for us. It can take a significant amount of time and resources to identify, develop and maintain relationships with certain suppliers, including suppliers that produce specialty or unique products for us. In the event of any disruptions to our relationships with our suppliers of specialty products, the ingredients they produce for us would be difficult to replace. The termination of, or material changes to, arrangements with key suppliers or vendors, disagreements with key suppliers or vendors as to payment or other terms, or the failure of a key supplier or vendor to meet its contractual obligations to us may require us to contract with alternative suppliers or vendors. For example, the failure of a key supplier to meet its obligations to us or otherwise deliver ingredients at the volumes that meet our quality and production standards could require us to make purchases from alternative suppliers or make changes to our product offerings. If we have to replace key suppliers or vendors, we may be subject to pricing or other terms less favorable than those we currently enjoy, and it may be difficult to identify and secure relationships with alternative suppliers or vendors that are able to meet our volume requirements, food safety and quality or other standards. If we cannot replace or engage suppliers or vendors who meet our specifications and standards in a short period of time, we could encounter increased expenses, shortages of ingredients and other items, disruptions or delays in customer shipments or other harm. In this event, we could experience a significant reduction in sales and incur higher costs for replacement goods and customer refunds during the shortage or thereafter, any of which could materially adversely affect our business, financial condition and operating results.

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In our wine business, we rely on the use of third-party alternating proprietorship winemaking facilities. We rely on the host or owner of such facilities to ensure that the facilities are operational and maintained in good condition. Changes in those facilities or our access to those facilities, including changes in prices or changes in our relationships with the third parties who own and operate those facilities, or regulatory discipline against licenses held by those third parties, or any failure by such third parties to maintain their facilities in good condition, may impair our ability to produce wines at such facilities and could materially adversely affect our wine business.

Our results could be adversely affected by natural disasters, public health crises, political crises or other catastrophic events.

Natural disasters, such as hurricanes, tornadoes, floods, earthquakes, droughts and other adverse weather and climate conditions; crop pests or diseases; animal diseases; unforeseen public health crises, such as pandemics and epidemics, such as the COVID-19 pandemic; political crises, such as terrorist attacks, war and other political instability or uncertainty; or other catastrophic events, whether occurring in the United States or internationally, could disrupt our operations or the operations of one or more of our suppliers or vendors. In particular, these types of events could impact our supply chain from or to the impacted region given our dependency on frequent deliveries of ingredients and other products from a variety of local, regional and national suppliers. In addition, these types of events could adversely affect consumer spending in the impacted regions or our ability to deliver our products to our customers safely, cost-effectively or at all. To the extent any of these events occur, our business, financial condition and operating results could be materially and adversely affected.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

As a public company, we are required to comply with the rules of the SEC implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. We are required to disclose changes made in our internal controls and procedures on a quarterly basis and to make annual assessments of our internal control over financial reporting pursuant to Section 404. As an emerging growth company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm, and management, may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

To comply with the requirements of being a public company, we have undertaken various actions, and may need to take additional actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff. Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business. Additionally, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could be materially adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

Risks Related to Our Intellectual Property

We may be accused of infringing or violating the intellectual property rights of others.

Other parties have claimed or may claim in the future that we infringe or violate their trademarks, patents, copyrights, domain names, publicity rights or other proprietary rights. Such claims, regardless of their merit, could result

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in litigation or other proceedings and could require us to expend significant financial resources and attention by our management and other personnel that otherwise would be focused on our business operations, result in injunctions against us that prevent us from using material intellectual property rights, or require us to pay damages to third parties. We may need to obtain licenses from third parties who allege that we have infringed or violated their rights, but such licenses may not be available on terms acceptable to us or at all. In addition, we may not be able to obtain or use on terms that are favorable to us, or at all, licenses or other rights with respect to intellectual property that we do not own, which would require us to develop alternative intellectual property. To the extent we rely on open-source software, we may face claims from third parties that claim ownership of the open-source software or derivative works that were developed using such software, or otherwise seek to enforce the terms of the applicable open-source license. Similar claims might also be asserted regarding our in-house software. These risks have been amplified by the increase in intellectual property claims by third parties whose sole or primary business is to assert such claims. As knowledge of our business expands, we are likely to be subject to intellectual property claims against us with increasing frequency, scope and magnitude. We may also be obligated to indemnify affiliates or other partners who are accused of violating third parties’ intellectual property rights by virtue of those affiliates or partners’ agreements with us, and this could increase our costs in defending such claims and our damages. Furthermore, such affiliates and partners may discontinue their relationship with us either as a result of injunctions or otherwise. The occurrence of these results could harm our brand or materially adversely affect our business, financial position and operating results.

We may not be able to adequately protect our intellectual property rights.

We regard our customer lists and other consumer data, trademarks, service marks, domain names, copyrights, trade dress, trade secrets, know how, proprietary technology and similar intellectual property as critical to our future success. We cannot be sure that our intellectual property portfolio will not be infringed, violated or otherwise challenged by third parties, or that we will be successful in enforcing, defending or combatting any such infringements, violations, or challenges. We also cannot be sure that the law might not change in a way that would affect the nature or extent of our intellectual property ownership.

We rely on patent, registered and unregistered trademark, copyright and trade secret protection and other intellectual property protections under applicable law to protect these proprietary rights. While we have taken steps toward procuring trademark registration for several of our trademarks in key countries around the world and have entered or may enter into contracts to assist with the procurement and protection of our trademarks, we cannot assure you that our common law, applied for, or registered trademarks are valid and enforceable, that our trademark registrations and applications or use of our trademarks will not be challenged by known or unknown third parties, or that any pending trademark or patent applications will issue or provide us with any competitive advantage. Effective intellectual property protection may not be available to us or may be challenged by third parties. Furthermore, regulations governing domain names may not protect our trademarks and other proprietary rights that may be displayed on or in conjunction with our website and other marketing media. We may be unable to prevent third parties from acquiring or retaining domain names that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights.

We also rely on confidentiality, supplier, license and other agreements with our employees, suppliers and others. There is no guarantee that these third parties will comply with these agreements and refrain from misappropriating our proprietary rights. Misappropriation of our proprietary rights could materially adversely affect our business, financial position and operating results.

We may not be able to discover or determine the extent of any unauthorized use or infringement or violation of our intellectual property or proprietary rights. Third parties also may take actions that diminish the value of our proprietary rights or our reputation. The protection of our intellectual property may require the expenditure of significant financial and managerial resources. Moreover, the steps we take to protect our intellectual property may not adequately protect our proprietary rights or prevent third parties from continuing to infringe or misappropriate these rights. We also cannot be certain that others will not independently develop or otherwise acquire equivalent or superior technology or other intellectual property rights, which could materially adversely affect our business, financial condition and operating results.

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Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to obtain and use information that we regard as proprietary. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity. Such litigation could be costly, time consuming and distracting to management, result in a diversion of resources, the impairment or loss of portions of our intellectual property and could materially adversely affect our business, financial condition and operating results. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. These steps may be inadequate to protect our intellectual property. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Despite our precautions, it may be possible for unauthorized third parties to use information that we regard as proprietary to create product offerings that compete with ours.

Risks Related to Government Regulation of Our Food Operations

We are subject to extensive governmental regulations, which require significant expenditures and ongoing compliance efforts.

We are subject to extensive federal, state and local regulations. Our food processing facilities and products are subject to inspection by the USDA, the FDA and various state and local health and agricultural agencies. Applicable statutes and regulations governing food products include rules for labeling the content of specific types of foods, the nutritional value of that food and its serving size, as well as rules that protect against contamination of products by food borne pathogens and food production rules addressing the discharge of materials and pollutants and animal welfare. Many jurisdictions also provide that food producers adhere to good manufacturing or production practices (the definitions of which may vary by jurisdiction) with respect to processing food. Recently, the food safety practices of the meat processing industry and produce industry have been subject to intense scrutiny and oversight by the USDA and FDA, respectively, and the FDA has begun to evaluate the possible need for new regulations for e-commerce food delivery companies, and future food-borne illness outbreaks or other food safety incidents related to meat or produce could lead to further governmental regulation of our business or of our suppliers. In addition, our fulfillment centers are subject to various federal, state and local laws and regulations relating to workplace safety and workplace health. Our fulfillment centers and offices, as applicable are also subject to additional FDA, Centers for Disease Control and Prevention, Occupational Safety and Health Administration regulations and guidelines and local guidelines relating to mitigating the spread of COVID-19. Failure to comply with all applicable laws and regulations could subject us or our suppliers to civil remedies, including fines, injunctions, product recalls or seizures and criminal sanctions, any of which could have a material adverse effect on our business, financial condition and operating results. Furthermore, compliance with current or future laws or regulations, including those related to mitigating the spread of COVID-19, could require us to make significant expenditures or otherwise materially adversely affect our business, financial condition and operating results.

Even inadvertent, non-negligent or unknowing violations of federal, state or local regulatory requirements could expose us to adverse governmental action and materially adversely affect our business, financial condition and operating results.

The Federal Food, Drug, and Cosmetic Act, or FDCA, which governs the shipment of foods in interstate commerce, generally does not distinguish between intentional and unknowing, non-negligent violations of the law’s requirements. Most state and local laws operate similarly. Consequently, almost any deviation from subjective or objective requirements of the FDCA or state or local law leaves us vulnerable to a variety of civil and criminal penalties.

In the future, we may deploy new equipment, update our facilities or occupy new facilities. These activities require us to adjust our operations and regulatory compliance systems to meet rapidly changing conditions. Although we have adopted and implemented systems to prevent the production of unsafe or mislabeled products, any failure of those systems to prevent or anticipate an instance or category of deficiency could result in significant business interruption and financial losses to us. The occurrence of events that are difficult to prevent completely, such as the introduction of pathogenic organisms from the outside environment into our facilities, also may result in the failure of our products to meet legal standards. Under these conditions we could be exposed to civil and criminal regulatory action.

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In some instances we may be responsible or held liable for the activities and compliance of our third-party vendors and suppliers, despite limited visibility into their operations. Although we monitor and carefully select our third-party vendors, suppliers, or other strategic partners, they may fail to adhere to regulatory standards, our safety and quality standards or labor and employment practices, and we may fail to identify deficiencies or violations on a timely basis or at all. In addition, a statute in California called the Transparency in Supply Chains Act of 2010 requires us to audit our suppliers with respect to certain risks related to slavery and human trafficking and to mitigate any such risks in our operations, and any failure to disclose issues or other non-compliance could subject us to action by the California Attorney General.

We cannot assure you that we will always be in full compliance with all applicable laws and regulations or that we will be able to comply with any future laws and regulations. Failure to comply with these laws and regulations could materially adversely affect our business, financial condition and operating results.

Changes to law, regulation or policy applicable to foods could leave us vulnerable to adverse governmental action and materially adversely affect our business, financial condition and operating results.

The food industry is highly regulated. We invest significant resources in our efforts to comply with the local, state and federal food regulatory regimes under which we operate. However, we cannot assure you that existing laws and regulations will not be revised or that new, more restrictive laws, regulations, guidance or enforcement policies will not be adopted or become applicable to us, our suppliers or the products we distribute. We also operate under a business model that is relatively new to the food industry, in which we rapidly source, process, store and package meal ingredients—including fresh fruits and vegetables, and poultry, beef and seafood, each of which may be subject to a unique regulatory regime—and ship them directly to consumers in the course of e-commerce transactions. Our business model leaves our business particularly susceptible to changes in and reinterpretations of compliance policies of the FDA and other government agencies, and some of our competitors may interpret the applicability of the same or similar laws and regulations to their businesses differently than we interpret them. Furthermore, it is unclear how the FDA may interpret and enforce certain recently promulgated regulations, such as the requirements regarding food defense mitigation strategies, or if the FDA will adopt new regulations for e-commerce food delivery companies, which present considerable future uncertainty. Recent and ongoing changes in senior federal government officials and policy priorities create additional uncertainty.

Our existing compliance structures may be insufficient to address the changing regulatory environment and changing expectations from government regulators regarding our business model. This may result in gaps in compliance coverage or the omission of necessary new compliance activity.

Our facilities and operations are governed by numerous and sometimes conflicting registration, licensing and reporting requirements.

Our fulfillment centers are required to be registered with the federal government and, depending on their location, are also subject to the authority of state and local governments. In some cases, disparate registration and licensing requirements lead to legal uncertainty, inconsistent government classifications of our operations and unpredictable governmental actions. Regulators may also change prior interpretations of governing licensing and registration requirements. Our relatively new business model leaves us particularly susceptible to these factors. If we misapply or misidentify licensing or registration requirements, fail to maintain our registrations or licenses or otherwise violate applicable requirements, our products may be subject to seizure or recall and our operations subject to injunction. This could materially adversely affect our business, financial condition and operating results.

Similarly, we are required to submit reports to the FDA’s Reportable Food Registry in the event that we determine a product may present a serious danger to consumers. The reporting requirement may be triggered based on a subjective assessment of incomplete and changing facts. Our inventory moves very rapidly throughout our supply and distribution chain. Should we fail, in a timely fashion, to identify and report a potentially reportable event which, subsequently, is determined to have been reportable, government authorities may institute civil or criminal enforcement actions against us, and may result in civil litigation against us or criminal charges against certain of our employees. This could materially adversely affect our business, financial condition and operating results.

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Good manufacturing process standards and food safety compliance metrics are complex, highly subjective and selectively enforced.

The federal regulatory scheme governing food products establishes guideposts and objectives for complying with legal requirements rather than providing clear direction on when particular standards apply or how they must be met. For example, FDA regulations referred to as Hazard Analysis and Risk Based Preventive Controls for Human Food require that we evaluate food safety hazards inherent to our specific products and operations. We must then implement “preventive controls” in cases where we determine that qualified food safety personnel would recommend that we do so. Determining what constitutes a food safety hazard, or what a qualified food safety expert might recommend to prevent such a hazard, requires evaluating a variety of situational factors. This analysis is necessarily subjective, and a government regulator may find our analysis or conclusions inadequate. Similarly, the standard of “good manufacturing practice” to which we are held in our food production operations relies on a hypothesis regarding what individuals and organizations qualified in food manufacturing and food safety would find to be appropriate practices in the context of our operations. Our business model, and the scale and nature of our operations, have relatively few meaningful comparisons among traditional food companies. Government regulators may disagree with our analyses and decisions regarding the good manufacturing practices appropriate for our operations.

Decisions made or processes adopted by us in producing our products are subject to after the fact review by government authorities, sometimes years after the fact. Similarly, governmental agencies and personnel within those agencies may alter, clarify or even reverse previous interpretations of compliance requirements and the circumstances under which they will institute formal enforcement activity. It is not always possible accurately to predict regulators’ responses to actual or alleged food production deficiencies due to the large degree of discretion afforded regulators. We may be vulnerable to civil or criminal enforcement action by government regulators if they disagree with our analyses, conclusions, actions or practices. This could materially adversely affect our business, financial condition and operating results.

Packaging, labeling and advertising requirements are subject to varied interpretation and selective enforcement.

We operate under a novel business model in which we source, process, store and package meal ingredients and ship them directly to consumers. Most FDA requirements for mandatory food labeling are decades old and were adopted prior to the advent of large-scale, direct to consumer food sales and e-commerce platforms. Consequently, we, like our competitors, must make judgments regarding how best to comply with labeling and packaging regulations and industry practices not designed with our specific business model in mind. Government regulators may disagree with these judgments, leaving us open to civil or criminal enforcement action. This could materially adversely affect our business, financial condition and operating results.

We are subject to detailed and complex requirements for how our products may be labeled and advertised, which may also be supplemented by guidance from governmental agencies. Generally speaking, these requirements divide information into mandatory information that we must present to consumers and voluntary information that we may present to consumers. Packaging, labeling, disclosure and advertising regulations may describe what mandatory information must be provided to consumers, where and how that information is to be displayed physically on our materials or elsewhere, the terms, words or phrases in which it must be disclosed, and the penalties for non-compliance.

Voluntary statements made by us or by certain third parties, whether on package labels or labeling, on websites, in print, in radio, on social media channels, or on television, can be subject to FDA regulation, Federal Trade Commission, or FTC, regulation, USDA regulation, state and local regulation, or any combination of the foregoing. These statements may be subject to specific requirements, subjective regulatory evaluation, and legal challenges by plaintiffs. FDA, FTC, USDA and state and local level regulations and guidance can be confusing and subject to conflicting interpretations. Guidelines, standards and market practice for, and consumers’ understandings of, certain types of voluntary statements, such as those characterizing the nutritional and other attributes of food products, continue to evolve rapidly, and regulators may attempt to impose civil or criminal penalties against us if they disagree with our approach to using voluntary statements. Furthermore, in recent years the FDA has increased enforcement of its regulations with respect to nutritional, health and other claims related to food products, and plaintiffs have commenced legal actions against a number of companies that market food products positioned as “natural” or “healthy,” asserting

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false, misleading and deceptive advertising and labeling claims, including claims related to such food being “all natural” or that they lack any genetically modified ingredients. Should we become subject to similar claims or actions, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is unfounded, and the cost of defending against any such claims could be significant. The occurrence of any of the foregoing risks could materially adversely affect our business, financial condition and operating results.

Risks Related to Government Regulation of our Wine Business

If we do not comply with the specialized regulations and laws that regulate the alcoholic beverage industry, our business could be materially adversely affected.

Alcoholic beverages are highly regulated at both the federal and state levels. Regulated areas include production, importation, product labeling, taxes, marketing, pricing, delivery, ownership restrictions, prohibitions on sales to minors, and relationships among alcoholic beverage producers, wholesalers and retailers. We cannot assure you that we will always be in full compliance with all applicable regulations or laws, that we will be able to comply with any future regulations and laws, that we will not incur material costs or liabilities in connection with compliance with applicable regulatory and legal requirements, or that such regulations and laws will not materially adversely affect our wine business. We rely on various internal and external personnel with relevant experience complying with applicable regulatory and legal requirements, and the loss of personnel with such expertise could adversely affect our wine business.

Licenses issued by state and federal alcoholic beverage regulatory agencies are required in order to produce, sell and ship wine. We have state and federal licenses, and must remain in compliance with state and federal laws in order to keep our licenses in good standing. Compliance failures can result in fines, license suspension or license revocation. In some cases, compliance failures can also result in cease-and-desist orders, injunctive proceedings or other criminal or civil penalties. If our licenses do not remain in good standing, our wine business could be materially adversely affected.

Our wine business relies substantially on state laws that authorize the shipping of wine by out of state producers directly to in state consumers. Those laws are relatively new in many states, and it is common for the laws to be modified or regulators to change prior interpretations of governing licensing requirements. Adverse changes to laws or their interpretation allowing a producer to ship wine to consumers across state lines could materially adversely affect our wine business.

Other Risks Related to Government Regulation

Government regulation of the Internet, e-commerce and other aspects of our business is evolving, and we may experience unfavorable changes in or failure to comply with existing or future regulations and laws.

We are subject to a number of regulations and laws that apply generally to businesses, as well as regulations and laws specifically governing the Internet and e-commerce and the marketing, sale and delivery of goods and services over the Internet. Existing and regulations and laws may impede the growth and availability of the Internet and online services and may limit our ability to operate our business. These laws and regulations, which continue to evolve, cover taxation, tariffs, privacy and data protection, data security, pricing, content, copyrights, distribution, mobile and other communications, advertising practices, electronic contracts, sales procedures, automatic subscription renewals, credit card processing procedures, consumer protections, the provision of online payment services, unencumbered Internet access to our services, the design and operation of websites, and the characteristics and quality of product offerings that are offered online. We cannot guarantee that we have been or will be fully compliant in every jurisdiction, as it is not entirely clear how existing laws and regulations governing issues such as property ownership, sales and other taxes, consumer protection, libel and personal privacy apply or will be enforced with respect to the Internet and e-commerce, as many of these laws were adopted prior to the advent of the Internet and e-commerce and do not contemplate or address the unique issues they raise. Moreover, as e-commerce continues to evolve, increasing regulation and enforcement efforts by federal and state agencies and the prospects for private litigation claims related to our data collection, privacy policies or other e-commerce practices become more likely. In addition, the adoption of any laws or

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regulations, or the imposition of other legal requirements, that adversely affect our ability to market, sell, and deliver our products could decrease our ability to offer, or customer demand for, our offerings, resulting in lower net revenue, and existing or future laws or regulations could impair our ability to expand our product offerings, which could also result in lower net revenue and make us more vulnerable to increased competition. Future regulations, or changes in laws and regulations or their existing interpretations or applications, could also require us to change our business practices, raise compliance costs or other costs of doing business and materially adversely affect our business, financial condition and operating results.

Failure to comply with privacy related obligations, including federal and state privacy laws and regulations and other legal obligations, or the expansion of current or the enactment of new privacy related obligations could materially adversely affect our business.

A variety of federal and state laws and regulations govern the collection, use, retention, sharing, transfer and security of customer data. We also may choose to comply with, or may be required to comply with, self-regulatory obligations or other industry standards with respect to our collection, use, retention, sharing or security of customer data.

We strive to comply with all applicable laws, regulations, self-regulatory requirements, policies and legal obligations relating to privacy, data usage, and data protection. It is possible, however, that these laws, regulations and other obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and which may conflict with other rules or requirements or our practices. We cannot guarantee that our practices have complied, comply, or will comply fully with all such laws, regulations, requirements and obligations.

We have posted our privacy policy which describes our practice related to the collection, use and disclosure of customer data on our website and in our mobile application. Any failure, or perceived failure, by us to comply with our posted privacy policy or with any federal or state laws, regulations, self-regulatory requirements, industry standards, or other legal obligations could result in claims, proceedings or actions against us by governmental entities, customers or others, or other liabilities, or could result in a loss of customers, any of which could materially adversely affect our business, financial condition and operating results. In addition, a failure or perceived failure to comply with industry standards or with our own privacy policy and practices could result in a loss of customers and could materially adversely affect our business, financial condition and operating results.

Additionally, existing privacy related laws, regulations, self-regulatory obligations and other legal obligations are evolving and are subject to potentially differing interpretations. Various federal and state legislative and regulatory bodies may expand current laws or enact new laws regarding privacy matters, and courts may interpret existing privacy related laws and regulations in new or different manners. For example, we are subject to the California Consumer Privacy Act of 2018, which came into effect on January 1, 2020 and its successor, the California Privacy Rights Act, which will take effect in January 2023, which require, among other things, that companies that process information on California residents to provide new disclosures to California consumers, allows such consumers to opt out of data sharing with third parties and provides a new cause of action for data breaches. Some other states have adopted, and many other states are considering, similar legislation. While we have invested and may continue to invest in readiness to comply with the applicable legislation, the effects of these new and evolving laws, regulations, and other obligations potentially are far-reaching and may require us to further modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

Changes in privacy related laws, regulations, self-regulatory obligations and other legal obligations, or changes in industry standards or consumer sentiment, such as our need to adjust our digital marketing in response to the ongoing elimination of cookie-based tracking, could require us to incur substantial costs or to change our business practices, including changing, limiting or ceasing altogether the collection, use, sharing, or transfer of data relating to consumers. Any of these effects could materially adversely affect our business, financial condition and operating results.

Our failure to collect state or local sales, use or other similar taxes could result in substantial tax liabilities, including for past sales, as well as penalties and interest, and our business could be materially adversely affected.

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In general, we have not historically collected state or local sales, use or other similar taxes in any jurisdictions in which we do not have a tax nexus, in reliance on court decisions or applicable exemptions that restrict or preclude the imposition of obligations to collect state and local sales, use and other similar taxes with respect to online sales of our products. In addition, we have not historically collected state or local sales, use or other similar taxes in certain jurisdictions in which we do have a physical presence in reliance on applicable exemptions. On June 21, 2018, the U.S. Supreme Court decided, in South Dakota v. Wayfair, Inc., that state and local jurisdictions may, at least in certain circumstances, enforce a sales and use tax collection obligation on remote vendors that have no physical presence in such jurisdiction. A number of states have already begun, or have positioned themselves to begin, requiring sales and use tax collection by remote vendors and/or by online marketplaces. The details and effective dates of these collection requirements vary from state to state. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could result in substantial tax liabilities, including for past sales as well as penalties and interest, which could materially adversely affect our business, financial condition and operating results.

Changes in tax treatment of companies engaged in e-commerce could materially adversely affect the commercial use of our sites and our business, financial condition and operating results.

The decision of the U.S. Supreme Court in South Dakota v. Wayfair, Inc., discussed above, permits state and local jurisdictions, in certain circumstances, to impose sales and use tax collection obligation on remote vendors, and a number of states have already begun imposing such obligations on Internet vendors and online marketplaces. In addition, due to the global nature of the Internet, it is possible that various states might attempt to impose additional or new regulation on our business or levy additional or new sales, income or other taxes relating to our activities. Tax authorities at the federal, state, and local levels are currently reviewing the appropriate treatment of companies engaged in e-commerce. New or revised federal, state, or local tax regulations may subject us or our customers to additional sales, income, and other taxes. New or revised taxes and, in particular, sales taxes, value added taxes and similar taxes (including sales and use taxes that we may be required to collect as a result of the Wayfair decision) are likely to increase costs to our customers and increase the cost of doing business online (including the cost of compliance processes necessary to capture data and collect and remit taxes), and such taxes may decrease the attractiveness of purchasing products over the Internet. Any of these events could materially adversely affect our business, financial condition and operating results.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations which could subject our business to higher tax liability.

We may be limited in the portion of net operating loss carryforwards that we can use in the future to offset taxable income for U.S. federal and state income tax purposes. As of December 31, 2021 and 2020, we had U.S. federal net operating loss carryforwards of $460.9 million and $397.5 million, respectively, and state net operating loss carryforwards of $197.7 million and $153.2 million, respectively, that are available to offset future tax liabilities. Of the $460.9 million of federal net operating loss carryforwards, $221.5 million was generated before January 1, 2018 and is subject to a 20-year carryforward period. The remaining $239.4 million can be carried forward indefinitely, but is subject to an 80% taxable income limitation, in any future taxable year. The pre-2018 federal and all state net operating losses will begin to expire in 2032 and 2033, respectively, if not utilized.

Furthermore, Section 382 of the Internal Revenue Code of 1986, as amended (“the Code”), limits the ability of a company that undergoes an “ownership change” (generally defined as a greater than 50 percentage point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) to utilize net operating loss carryforwards and tax credit carryforwards and certain built-in losses recognized in years after the ownership change. Future changes in our stock ownership, some of which may be outside of our control, could result in an ownership change under Section 382 of the Code. In addition, Section 383 of the Code generally limits the amount of tax liability in any post-ownership change year that can be reduced by pre-ownership change tax credit carryforwards. If we were to undergo an “ownership change,” it could materially limit our ability to utilize our net operating loss carryforwards and other deferred tax assets.

Risks Related to Our Class A Common Stock

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The market price of our Class A common stock has been and may in the future be highly volatile, and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, and which could result in substantial losses for investors purchasing our shares.

The stock market in general and the market for our Class A common stock in particular has, from time to time, and may again, experience extreme volatility that has often been unrelated to the operating performance of particular companies. For example, since our initial public offering in June 2017, the market price of our Class A common stock has ranged from a high of $165.00 (adjusted for the reverse stock split that occurred in June 2019) to a low of $2.01. Some of the factors that may cause the market price of our Class A common stock to fluctuate include:

● price and volume fluctuations in the overall stock market from time to time;

● volatility in the market price and trading volume of comparable companies;

● actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts;

● announcements of new service offerings, strategic alliances or significant agreements by us or by our competitors;

● departure of key personnel;

● litigation involving us or that may be perceived as having an adverse effect on our business;

● changes in general economic, industry and market conditions and trends;

● investors’ general perception of us;

● sales or perceived sales of large blocks of our stock; and

● announcements regarding industry consolidation.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. For example, we have been subject to several putative class action lawsuits alleging federal securities law violations in connection with our initial public offering, or IPO. Because of the past and the potential future volatility of our stock price, we may become the target of additional securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.

Our quarterly operating results or other operating metrics may fluctuate significantly, which could cause the trading price of our Class A common stock to continue to decline.

Our quarterly operating results and other operating metrics have fluctuated in the past and may in the future fluctuate as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including:

● the level of demand for our service offerings and our ability to maintain and increase our customer base, including our ability to maintain higher levels of demand that may result from our growth strategy and/or from the impact the COVID-19 pandemic has had on consumer behaviors;

● the timing and success of new service introductions by us or our competitors or any other change in the competitive landscape of our market;

● the mix of products sold;

● order rates by our customers;

● pricing pressure as a result of competition or otherwise;

● delays or disruptions in our supply chain;

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● our ability to reduce costs;

● errors in our forecasting of the demand for our products, which could lead to lower net revenue or increased costs;

● seasonal or other variations in buying patterns by our customers;

● changes in and timing of sales and marketing and other operating expenses that we may incur;

● levels of customer credits and refunds;

● adverse litigation judgments, settlements or other litigation related costs;

● food safety concerns, regulatory proceedings or other adverse publicity about us or our products;

● costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write downs;

● changes in consumer tastes and preferences and consumer spending habits; and

● general economic conditions.

Any one of the factors above or the cumulative effect of some or all of the factors above may result in significant fluctuations in our operating results.

The variability and unpredictability of our quarterly operating results or other operating metrics could result in our failure to meet our expectations or those of any analysts that cover us or investors with respect to net revenue or other operating results for a particular period. If we fail to meet or exceed such expectations for these or any other reasons, the market price of our Class A common stock could continue to fall substantially, and we could face costly lawsuits, including securities class action suits.

If securities or industry analysts do not publish research or reports about us, our business or our market, or if they publish negative evaluations of our stock or the stock of other companies in our industry, the price of our stock and trading volume could decline.

The trading market for our Class A common stock is influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If the analyst(s) covering our business downgrade their evaluations of our stock or the stock of other companies in our industry, the price of our stock could decline. Since December 31, 2018, twelve of the analysts who formerly covered our stock have ceased to cover our stock and we currently have only three analysts covering our stock, two of whom have commenced coverage in recent weeks. If these remaining analysts cease to cover our stock and other analysts do not begin to cover our stock, we could lose additional visibility in the market for our stock, which in turn could cause our stock price to decline further. The trading market for our Class A common stock is influenced by the research and reports that industry or financial analysts publish about us or our business. There can be no assurance that existing analysts will continue to cover us or that new analysts will begin to cover us. There is also no assurance that any covering analyst will provide favorable coverage. A lack of research coverage or adverse coverage may negatively impact the market price of our Class A common stock. In addition, if one or more of the analysts covering our business downgrade their evaluations of our stock or the stock of other companies in our industry, the price of our Class A common stock could decline.

Because we do not expect to pay any dividends on our Class A common stock for the foreseeable future, investors may never receive a return on their investment.

You should not rely on an investment in our Class A common stock to provide dividend income. We have never paid cash dividends to holders of our Class A common stock and do not anticipate that we will pay any cash dividends to holders of our Class A common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and support our existing operations. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase our Class A common stock.

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Joseph N. Sanberg and his affiliates beneficially own a significant portion of our outstanding Class A common stock, and therefore have significant influence over the outcome of matters subject to stockholder approval, including a change of control, which could make our Class A common stock less attractive to some investors or otherwise harm our stock price.

As of June 30, 2022, Mr. Sanberg and his affiliates beneficially own an aggregate of 17.6 million shares of our outstanding Class A common stock (including 9.0 million shares issuable upon exercise of warrants held by Mr. Sanberg’s affiliates), which collectively represent approximately 40.2% of our outstanding capital stock. The shares underlying the warrants are only entitled to voting rights upon exercise. In addition, we have agreed to issue RJB 10,000,000 additional shares of Class A common stock pursuant to the August 2022 amendment to the RJB April 2022 Private Placement Purchase Agreement which we expect to issue on or before August 31, 2022. Upon the issuance of the additional shares pursuant to the private placement amendment, Mr. Sanberg and his affiliates will own, assuming the exercise of his warrants, approximately 51.3% of our outstanding capital stock.

Pursuant to a purchase agreement (the “September Purchase Agreement”), with RJB and Mr. M. Salzberg, dated September 15, 2021, RJB is subject to a voting agreement, pursuant to which RJB agreed to cause all of our voting securities beneficially owned by it or certain of its affiliates, including Mr. Sanberg, in excess of 19.9% of the total voting power of our outstanding capital stock to be voted in proportion to, and accordance with, the vote of all of our stockholders, limiting the effective voting power of the securities beneficially held by Mr. Sanberg.

In addition, under the August 2022 amendment to the RJB April 2022 Private Placement Purchase Agreement, we have agreed, effectively immediately following, and contingent upon, the closing of the second closing of the RJB April 2022 Private Placement, to appoint one individual designated by Joseph N. Sanberg, which individual will be Alex Chalunkal, to serve as a Class III director on our board of directors. Under the terms of the August 2022 amendment to the RJB April 2022 Private Placement Purchase Agreement we are obligated to nominate Mr. Sanberg’s designee for election as a director until the expiration of the standstill period in the September 2021 Private Placement Agreement with RJB.

As a result, these stockholders will have significant influence over matters submitted to our stockholders for approval, including the election of directors and the approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power might delay, defer or prevent a change in control or delay or prevent a merger, consolidation, takeover or other business combination involving us on terms that other stockholders may desire, which, in each case, could adversely affect the market price of our Class A common stock.

Substantial sales of shares of our Class A common stock could cause the market price of our Class A common stock to decline and/or result in dilution to our stockholders.

Sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales might occur, could reduce the market price of our Class A common stock and could impair our ability to raise capital through the sale of additional equity or other securities. We are unable to predict the effect that such sales may have on the prevailing market price of our Class A common stock.

As of June 30 2022, an aggregate of 1,773,493 shares of our common stock remained available for future grants under our equity incentive plans. Shares registered under our registration statements on Form S-8 are available for sale in the public market subject to vesting arrangements and exercise of options, and the restrictions of Rule 144 under the Securities Act of 1933, or the Securities Act. If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our Class A common stock could decline.

Additionally, as of June 30, the holders of an aggregate of approximately 18.4 million registrable securities have rights, subject to certain conditions, to include their securities in registration statements that we may file for ourselves or other stockholders. If we were to register these securities for resale, they could be freely sold in the public market. If these additional securities are sold, or if it is perceived that they will be sold, in the public market, the trading price of our Class A common stock could decline.

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We currently have on file with the SEC a universal shelf registration statement which allows us to offer and sell registered Class A common stock, preferred stock, debt securities and warrants from time to time pursuant to one or more offerings of up to $75,000,000 in aggregate offering price at prices and terms to be determined at the time of sale. On August 10, 2020, we consummated an underwritten public offering of 4,000,000 shares of Class A common stock registered under our universal shelf registration statement. On June 18, 2021, we consummated an underwritten public offering of 5,411,900 shares of Class A common stock, including the 705,900 shares issuable upon the underwriter’s exercise of its option to purchase additional shares, under our universal shelf registration statement. Following the August 2020 and June 2021 underwritten offerings, approximately $15.0 million in aggregate offering price remains available for issuance under our universal shelf registration statement.

In connection with the amendment to our prior senior secured term loan, on the first day of each quarter that our senior secured notes was outstanding, beginning on or after July 1, 2021, we were obligated to issue warrants to the lenders to purchase such number of shares of Class A common stock as equals 0.50% of the then outstanding shares of our common stock on a fully-diluted basis and we are required to file a registration statement with the SEC to register for resale the shares of Class A common stock underlying the warrants. Pursuant to this obligation, on July 1, 2021, we issued warrants to the lenders exercisable for an aggregate of 130,350 shares of Class A common stock, on October 1, 2021, we issued warrants to the lenders exercisable for an aggregate of 133,868 shares of Class A common stock, on January 1, 2022 for an aggregate of 224,516 shares of Class A common stock, and on April 1, 2022 for an aggregate of 236,016 shares of Class A common stock; all such warrants have been fully exercised, and a total of 724,750 shares have been issued to the lenders upon such exercises. We filed registration statements for the resale of such shares with the SEC on July 30, 2021, October 15, 2021, January 14, 2022, and April 15, 2022, respectively.

On September 15, 2021, in connection with the private placement with Mr. M. Salzberg pursuant to the September Purchase Agreement, we issued to Mr. M. Salzberg (i) 300,000 shares of Class A common stock, (ii) warrants to purchase 240,000 shares of Class A common stock at an exercise price of $15.00 per share, (iii) warrants to purchase 120,000 shares of Class A common stock at an exercise price of $18.00 per share, and (iv) warrants to purchase 60,000 shares of Class A common stock at an exercise price of $20.00 per share, for an aggregate purchase price of $3.0 million.

On November 4, 2021, in connection with the Purchase Agreement and concurrently with the closing of the rights offering, we issued to RJB an aggregate of (i) 6,265,813 shares of Class A common stock, (ii) warrants to purchase 5,012,354.58219726 shares of Class A common stock at an exercise price of $15.00 per share, (iii) warrants to purchase 2,506,177.291098630 shares of Class A common stock at an exercise price of $18.00 per share, and (iv) warrants to purchase 1,253,088.645549316 shares of Class A common stock at an exercise price of $20.00 per share, for an aggregate purchase price of $62.7 million in two private placements. On November 4, 2021, we entered into a registration rights agreement with RJB and Mr. M. Salzberg, pursuant to which RJB, Mr. M. Salzberg and their respective permitted transferees have the right to request that we file a shelf registration statement with respect to all or a portion of the shares that they hold, which include (x) shares of Class A common stock held prior to the execution of the Purchase Agreement, and (y) shares of Class A common stock and shares underlying the warrants purchased in connection with the Purchase Agreement.

On February 14, 2022, in connection a private placement with RJB pursuant to a purchase agreement (the “February Purchase Agreement”), we issued to RJB an aggregate of (i) 357,143 shares of Class A common stock, (ii) warrants to purchase 285,714 shares of Class A common stock at an exercise price of $15.00 per share, (iii) warrants to purchase 142,857 shares of Class A common stock at an exercise price of $18.00 per share, and (iv) warrants to purchase 71,429 shares of Class A common stock at an exercise price of $20.00 per share, for an aggregate purchase price of $5.0 million. On February 14, 2022, we entered into a registration rights agreement with RJB pursuant to which, among other things, RJB and its permitted transferees have the right to request that we file a shelf registration statement with respect to all or a portion of the shares of Class A common stock and shares underlying the warrants purchased in connection with the February Purchase Agreement.

On April 29, 2022, in connection with a private placement with RJB, pursuant to the “April RJB Purchase Agreement”, we issued to (i) Long Live Bruce, LLC (“LLB”), which was assigned RJB’s rights to purchase the foregoing shares, an aggregate of 1,666,667 shares of Class A common stock. On April 29, 2022, in connection with a

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separate private placement with Linda Findley, a director and our President and Chief Executive Officer, pursuant to a purchase agreement (the “April Findley Purchase Agreement”), we issued to Ms. Findley an aggregate of 41,666 shares of Class A common stock. On April 29, 2022, (i) we and RJB entered into an amendment and restatement of the registration rights agreement entered into with RJB in connection with the February 2022 private placement, pursuant to which, among other things, RJB and its permitted transferees have the right to request that we file a shelf registration statement with respect to all or a portion of the shares Class A common stock purchased in connection with the April RJB Purchase Agreement and the shares of Class A common stock and shares underlying the warrants purchased in connection with the February Purchase Agreement, and (ii) a registration rights agreement with Ms. Findley, pursuant to which, among other things, Ms. Findley and her permitted transferees have the right to request that we file a shelf registration statement with respect to all or a portion of the shares of Class A common stock purchased in connection with the April Findley Purchase Agreement. On August 7, 2022 we and RJB entered into an amendment to the amended and restated registration rights agreement to include the shares expected to be issued to RJB by August 31, 2022.

Sales of additional amounts of shares of our Class A common stock or other securities convertible into shares of Class A common stock, including the warrants issued to our prior lenders in connection with the amendment to our prior senior secured notes and the warrants issued pursuant to the September and February Purchase Agreements, for which we are obligated to file shelf registrations with the SEC relating to the shares underlying those warrants, would dilute our stockholders’ ownership in us.

The exclusion of our Class A common stock from major stock indexes could adversely affect the trading market and price of our Class A common stock.

Prior to September 15, 2021, we had issued and outstanding shares of Class B common stock with ten votes per share. Since that date, all issued and outstanding shares of Class B common stock were converted into Class A common stock and all shares now consist of Class A common stock with one vote per share. However, because our certificate of incorporation authorizes the issuance of different classes of stock with different voting rights, our Class A common stock could be excluded from stock indexes that exclude the securities of companies with unequal voting rights. Exclusion from stock indexes could make it more difficult, or impossible, for some fund managers to buy the excluded securities, particularly in the case of index tracking mutual funds and exchange traded funds. The exclusion of our Class A common stock from major stock indexes could adversely affect the trading market and price of our Class A common stock.

Anti-takeover provisions in our restated certificate of incorporation and our amended and restated bylaws, as well as provisions of Delaware law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our Class A common stock.

Our restated certificate of incorporation and amended and restated bylaws and Delaware law contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our Class A common stock. These provisions may also prevent or delay attempts by our stockholders to replace or remove our management. Our corporate governance documents include provisions:

● establishing a classified board of directors with staggered three-year terms so that not all members of our board are elected at one time, which will be fully phased out in 2024;

● providing that directors may be removed by stockholders only for cause and only with a vote of the holders of at least 66 2/3% of the votes that all our stockholders would be entitled to cast for the election of directors;

● limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;

● requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;

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● authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Class A common stock; and

● limiting the liability of, and providing indemnification to, our directors and officers.

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders holding shares representing more than 15% of the voting power of our outstanding voting stock from engaging in certain business combinations with us. Any provision of our restated certificate of incorporation or amended and restated bylaws, each as may be further amended and/or amended and restated from time to time, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.

The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our Class A common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your Class A common stock in an acquisition.

Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders. Our restated certificate of incorporation further provides that the federal district courts of the United States of America are the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. These choice of forum provisions could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of our company, (2) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee or stockholder of our company to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the General Corporation Law or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery or (4) any action asserting a claim governed by the internal affairs doctrine. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find this choice of forum provision contained in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results.

Our restated certificate of incorporation further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Some members of our management team have limited experience managing a public company.

Some members of our management team have limited experience managing a publicly traded company, interacting with public company investors and/or complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently continue to manage being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the scrutiny of securities analysts and investors. These obligations and constituents require significant attention from our management team and could divert their attention away from the day-to-day management of our business, which could materially adversely affect our business, financial condition and operating results.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

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As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), the Sarbanes-Oxley Act of 2002, the listing requirements of the NYSE and other applicable securities rules and regulations. Compliance with these rules and regulations may continue to increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly, and increase demand on our systems and resources, particularly after we are no longer an emerging growth company or a smaller reporting company. Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and operating results and maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire even more employees in the future, which will increase our costs and expenses.

As a public company, we are required to evaluate our internal controls and during the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting that we are unable to remediate before the end of the same fiscal year in which the material weakness is identified, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to attest to management’s report on the effectiveness of our internal controls, which will be required after we are no longer an emerging growth company, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our Class A common stock to decline.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. To comply with evolving laws, regulations and standards, we may need to invest additional resources, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business could be materially harmed.

As a result of being a public company and the accompanying rules and regulations, it is more expensive for us to obtain director and officer liability insurance, and in the future we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our Class A common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and may remain an emerging growth company until December 31, 2022 (the last day of our fiscal year following the fifth anniversary of our IPO), subject to specified conditions. For so long as we remain an emerging growth company, we are permitted, and intend, to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. We would cease to be an emerging growth company earlier if we have more than $1.07 billion in annual revenue, we have more than $700 million in market value of our stock held by non-affiliates or we issue more than $1 billion of non-convertible debt securities over a three-year period. These exemptions include reduced disclosure obligations regarding executive compensation and exemptions from the requirements to hold non-binding advisory votes on executive compensation and golden parachute payments, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, not being

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required to comply with certain requirements of Auditing Standard 3101 relating to providing a supplement to the auditor’s report regarding critical audit matters and not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation. Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company, which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation and not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. In general, we will qualify as a smaller reporting company for as long as we have less than $250 million of public float (calculated as the aggregate market value of our Class A common stock and Class B common stock held by non-affiliates, based on the closing price of our Class A common stock on the NYSE on the last business day of our second fiscal quarter). We cannot predict whether investors will find our Class A common stock less attractive if we rely on these exemptions. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, while we are an emerging growth company we will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies. Accordingly, we will incur additional costs in connection with complying with the accounting standards applicable to public companies at such time or times as they become applicable to us.

General Risk Factors

Higher labor costs due to statutory and regulatory changes could materially adversely affect our business, financial condition and operating results.

Various federal and state labor laws, including new laws and regulations enacted in response to COVID-19, govern our relationships with our employees and affect operating costs. These laws include employee classifications as exempt or non-exempt, minimum wage requirements, unemployment tax rates, workers’ compensation rates, overtime, family leave, workplace health and safety standards, payroll taxes, citizenship requirements and other wage and benefit requirements for employees classified as non-exempt. As our employees are paid at rates set at, or above but related to, the applicable minimum wage, further increases in the minimum wage could increase our labor costs. Significant additional government regulations could materially adversely affect our business, financial condition and operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Equity Securities

On April 1, 2022, in connection with the amendment to our prior financing agreement entered into in May 2021, we issued warrants to purchase 236,073 shares of Class A common stock to certain lenders party to our prior financing agreement. The warrants had an exercise price of $0.01 per share. These warrants were exercised in full in the second quarter of 2022.

The issuance of the warrants was made in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act in that the transaction was by an issuer not involving any public offering. At issuance, the recipients of the warrants represented that they were “accredited investors” and represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof. In connection with the grant of the warrants, we filed a registration statement on Form S-3 on April 15, 2022, registering the resale of the shares of Class A common stock issuable upon exercise of the warrants on a delayed or continuous basis and such registration statement was declared effective on January 28, 2022. We did not pay or give, directly or indirectly, any commission or other remuneration, including underwriting discounts and commissions, in connection with the issuance of the warrants.

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Other than the securities reported above, during the period covered by this Quarterly Report on Form 10-Q, we did not issue any unregistered equity securities other than pursuant to transactions previously reported in our Current Reports on Form 8-K.

Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

Exhibit	Description
10.1	Purchase Agreement, dated as of April 29, 2022, by and between Blue Apron Holdings, Inc. and RJB Partners LLC (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 5, 2022)
10.2	Amendment No. 1 to Purchase Agreement, dated as of August 7, 2022, by and between Blue Apron Holdings, Inc., RJB Partners LLC and Joseph N. Sanberg (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 8, 2022)
10.3*	Waiver and Extension of Board Diversity Goal, dated as of June 22, 2022, by and between Blue Apron Holdings, Inc. and RJB Partners LLC
10.4	Purchase Agreement, dated as of April 29, 2022, by and between Blue Apron Holdings, Inc. and Linda Findley (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 5, 2022)
10.5	Amended and Restated Registration Rights Agreement, dated as of April 29, 2022, by and between Blue Apron Holdings, Inc. and RJB Partners LLC (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 5, 2022)
10.6	Amendment No. 1 to Amended and Restated Registration Rights Agreement, dated as of August 7, 2022, by and between Blue Apron Holdings, Inc. and RJB Partners LLC (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 8, 2022)
10.7	Registration Rights Agreement, dated as of April 29, 2022, by and between Blue Apron Holdings, Inc. and Linda Findley (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 5, 2022)
10.8*	Registration Rights Agreement, dated as of June 1, 2022, by and between Blue Apron Holdings, Inc. and Long Live Bruce, LLC
10.9	Note Purchase and Guarantee Agreement, dated as of May 5, 2022, among Blue Apron Holdings, Inc., The Bank of New York Mellon Trust Company and the other parties thereto (incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 5, 2022)
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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
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

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101.INS*	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
*	Filed herewith.
**	Furnished herewith.

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SIGNATURES

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.

	BLUE APRON HOLDINGS, INC.
Date: August 8, 2022	/s/ Linda Findley
	Linda Findley
	President, Chief Executive Officer, and Director
	(Principal Executive Officer)
Date: August 8, 2022	/s/ Randy J. Greben
	Randy J. Greben
	Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

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EX-10.3

Exhibit 10.3

Execution Version

WAIVER AND EXTENSION

THIS WAIVER AND EXTENSION is made and entered into as of June 22, 2022 by and between Blue Apron Holdings, Inc. a Delaware corporation (the “Company”) and RJB Partners LLC, a Delaware limited liability company (“Purchaser”).

WHEREAS, the Company and the Purchaser are party to that certain Purchase Agreement, dated as of September 15, 2022, by and among the Company and Purchaser (the “Purchase Agreement”);

WHEREAS, capitalized terms used but not defined therein shall have the meaning set forth in the Purchase Agreement;

WHEREAS, pursuant to Section 6(b)(iii) of the Purchase Agreement, the Company adopted resolutions regarding the governance matters set forth on Annex F to the Purchase Agreement, including Item 3 thereof; and

WHEREAS, the parties desire to waive compliance by the Company with the second sentence of Item 3 of Annex F to the Purchase Agreement, and extend the deadline for compliance with such obligation to December 15, 2022.

NOW, THEREFORE, Purchaser and the Company hereby agree as follows:

1.The Purchaser agrees to a waiver and extension with respect to the Company’s obligations under the second sentence of Item 3 of Annex F to the Purchase Agreement, and any related provisions of the Purchase Agreement, and the Company agrees to comply with the obligation set forth in the second sentence of Item 3 of Annex F to the Purchase Agreement on or prior to December 15, 2022.

2.No other term or provision of the Purchase Agreement shall be deemed affected or otherwise modified other than as set forth under Section 1 above.

A. MISCELLANEOUS.

a. This Waiver and Extension may be amended or modified only by a written agreement executed and delivered by the Company and the Purchaser. This Waiver and Extension may not be modified or amended except as provided in the immediately preceding sentence and any purported amendment by any party or parties effected in a manner which does not comply with this provision shall be void, ab initio. Any failure by any party at any time to enforce any of the provisions of this Waiver and Extension shall not be construed as a waiver of such provision or any other provisions hereof.

b. The provisions of Sections 13, 14, 15, 16, 17, 18, 20, and 22 of the Purchase Agreement shall be deemed to apply, mutatis mutandis, to this Amendment.

c. This Waiver and Extension may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Waiver and Extension by e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, each of the undersigned has executed this Waiver and Extension as of the date set forth above.

BLUE APRON HOLDINGS, INC.
By:
Name:	Linda Findley
Title:	President and Chief Executive Officer
RJB PARTNERS LLC
By:
Name:	Joseph Sanberg
Title:	Managing Member

EX-10.8

EXHIBIT 10.8

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of June 1, 2022, by and between Blue Apron Holdings, Inc., a Delaware corporation (the “Company”) and Long Live Bruce, LLC, a Delaware limited liability company (“the “Purchaser”). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Purchase Agreement (as defined below).

W I T N E S S E T H:

WHEREAS, the Company and RJB Partners LLC, a Delaware limited liability company (“RJB”), entered into that certain Purchase Agreement, dated as of April 29, 2022 (the “Purchase Agreement”), pursuant to which the Company sold to the Purchaser (which was assigned RJB’s right to purchase the PIPE Shares (as defined herein)) 1,666,666 shares of Class A Common Stock (the “PIPE Shares”);

WHEREAS, pursuant to the Purchase Agreement, the Company agreed to grant certain registration rights to the Purchaser (as assignee to RJB’s right to purchase the PIPE Shares) (including any of its Permitted Transferees) with respect to the PIPE Shares; and

WHEREAS, the Company and the Purchaser desire to enter into this Agreement in order to establish certain registration rights in respect of the PIPE Shares, which registration rights were assigned to the Purchaser in connection with RJB’s assignment to the Purchaser of the right to purchase the PIPE Shares;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

Section 1. Certain Definitions.

In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings:

“Affiliate” of a Person shall mean any Person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such other Person; for the purposes of this Agreement, the Company or its subsidiaries shall not be deemed to be an Affiliate of the Purchaser.

“Agreement” means this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Registration Rights Agreement as the same may be in effect at the time such reference becomes operative.

“April 2022 Amended and Restated Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement, dated as of April 29, 2022, by and between the Company and RJB.

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

“Holders” means the Purchaser and its Permitted Transferees.

“November 2021 Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of November 4, 2021, by and among the Company, RJB and Matthew B. Salzberg.

“Permitted Transfer” means with respect to any Registrable Securities any transfer of Registrable Securities in the manner permitted for such Registrable Securities under clause (i), clause (1) or clause (2) of Section 8(a) of the Purchase Agreement.

“Permitted Transferee” means any Person who receives Registrable Securities pursuant to a Permitted Transfer and executes a joinder to this Agreement in the form attached hereto as Exhibit A.

“Person” means an individual, corporation, partnership, association, joint stock company, limited liability company, joint venture, trust, governmental entity, unincorporated organization or other legal entity.

“PIPE Shares” shall have the meaning ascribed to it in the recitals of this Agreement.

“Prospectus” means the prospectus or prospectuses (whether preliminary or final) included in any Registration Statement and relating to Registrable Securities, as amended or supplemented and including all material incorporated by reference in such prospectus or prospectuses.

“Purchase Agreement” shall have the meaning ascribed to it in the recitals of this Agreement.

“Purchaser” shall have the meaning ascribed to it in the first paragraph of this Agreement.

“Registrable Securities” means the PIPE Shares or any other common equity securities of the Company issued as a dividend or distribution with respect to, or in exchange for or in replacement of, the PIPE Shares held by the Holders. Equity securities will cease being Registrable Securities when they are (i) sold by the holder thereof pursuant to Rule 144, (ii) eligible to be sold by the holder thereof pursuant to Rule 144 and such sale can be made without restriction as to volume or manner of sale under Rule 144 unless the applicable Holder has determined in good faith that the inclusion of such securities as “Registrable Securities” is reasonably necessary or advisable to implement the Holders’ strategy with respect to selling such securities (for the avoidance of doubt, including the price, quantum and time at which such securities may be sold) or (iii) sold pursuant to any offering registered under the Securities Act (including, for the avoidance of doubt, under the Shelf Registration Statement).

“Registration Statement” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all documents incorporated by reference in such Registration Statement.

“RJB” shall have the meaning ascribed to it in the recitals of this Agreement.

“SEC” means the Securities and Exchange Commission or any successor agency.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means any shares of Class A Common Stock and any other securities that may be issued after the date hereof in respect of, or in exchange for such Class A Common Stock.

“Shelf Registration Statement” means a “shelf” registration statement of the Company relating to a “shelf” offering in accordance with Rule 415 of the Securities Act, or any similar rule that may be adopted by the SEC, pursuant to the provisions of Section 2(a) hereof which covers all of the Registrable Securities held by the Holders, on an appropriate form under the Securities Act, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

“Termination Date” means the first date on which there are no Registrable Securities or there are no Holders.

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“underwritten offering” means a registered offering in which securities of the Company are sold to one or more underwriters pursuant to an underwriting agreement.

Section 2. Shelf Registration.

(a)Required Registration. The Company shall (i) cause a Shelf Registration Statement to be filed with the SEC (x) within thirty (30) days of the date that a Holder requests the Company to make such filing or (y) on such other date as mutually agreed by the Company and a Holder, and (ii) use commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the SEC as promptly as possible but in any event no later than sixty (60) days after the Shelf Registration Statement is filed pursuant to clause (i) (the “Shelf Registration”). Each Holder agrees, severally but not jointly, to furnish to the Company (i) in writing, all information with respect to such Holder that the Company reasonably deems required or advisable to be included in the Shelf Registration Statement and any other information necessary to make any such information previously furnished to the Company by such Holder not misleading and (ii) completed and executed selling shareholder questionnaires, powers of attorney, indemnities and other documents reasonably required by the Company at least five (5) days prior to the anticipated filing date. Prior to filing the Shelf Registration Statement and any amendments thereto with the SEC, the Company shall provide drafts thereof to the Purchaser and its counsel, and the Purchaser and its counsel shall be given a reasonable opportunity to review and comment upon such Shelf Registration Statement. The Shelf Registration Statement, in the form in which it becomes effective, will conform in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company agrees to use its commercially reasonable efforts to keep the Shelf Registration Statement continuously effective for as long as the Holders hold any Registrable Securities. The Company further agrees, if necessary, to promptly supplement or amend the Shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registrations, and the Company agrees to furnish to the Holders copies of any such supplement or amendment promptly after its being used or filed with the SEC.

(b)Right to Request Registration. Subject to the provisions hereof, at any time the Shelf Registration Statement covering all Registrable Securities is not effective, other than as permitted in accordance with Section 4 hereof, and until the Termination Date, a Holder may at any time request registration under the Securities Act for resale of all, but not less than all, of the Registrable Securities then-held by the applicable Holder(s) (a “Demand Registration” and each Holder who properly initiates such request shall be referred to individually as an “Initiating Holder” and collectively as the “Initiating Holders”). Subject to Section 2(f) and Sections 4 and 5 below, the Company shall (i) file a Registration Statement registering for resale such number of Registrable Securities as requested to be so registered pursuant to this Section 2(b) (a “Demand Registration Statement”) within forty-five (45) days after the Initiating Holders’ request therefor and (ii) use commercially reasonable efforts to cause such Demand Registration Statement to be declared effective by the SEC as soon as practical thereafter. To the extent requested by the Initiating Holders, the Demand Registration Statement shall allow the offer and sale of the Registrable Securities on a continuous basis pursuant to Rule 415 under the Securities Act, unless the Company is not eligible to use a form which allows such offer and sale in which case the Demand Registration Statement shall allow such offer and resale for so long a period as permitted by the Securities Act and the rules thereunder.

(c)Number of and Restrictions on Demand Registrations. Subject to the limitations of Sections 2(b) and 4(a), the Holders collectively shall be entitled to effect one (1) Demand Registration hereunder, provided that the total number of Demand Registrations effected hereunder plus the total number of Demand Registrations effected under the November 2021 Registration Rights Agreement by the RJB Holders (as such term is defined therein) and the April 2022 Amended and Restated Registration Rights Agreement by the Holders (as such term is defined therein) shall not exceed either (i) five (5) Demand Registrations in the aggregate or (ii) two (2) Demand Registrations in any 12-month period. A Registration Statement shall not count as a permitted Demand Registration unless and until it has become effective. Subject to Section 2(e), no Holder shall be entitled to request a Demand Registration (i) if the Shelf Registration Statement is effective and not subject to suspension permitted under Section 4 hereof or (ii) if there is an effective Demand Registration Statement which permits the offer and sale of the Registrable Securities on a continuous basis under Rule 415. Further, no Holder shall be entitled to request a

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Demand Registration at any time when the Company is diligently pursuing a primary or secondary underwritten offering.

(d)Priority on Demand Registrations. The Company may include securities other than Registrable Securities in a Demand Registration for any accounts (including for the account of the Company) on the terms provided below; and if such Demand Registration is an underwritten offering, such securities may be included only with the consent of the managing underwriters of such offering. If the managing underwriters of the requested Demand Registration advise the Company and the Initiating Holder that in their opinion the number of securities proposed to be included in the Demand Registration exceeds the number of securities which can be sold in such underwritten offering without materially delaying or jeopardizing the success of the offering (including the price per share of any Shares proposed to be sold in such underwritten offering), the Company shall include in such Demand Registration (i) first, the number of Registrable Securities that the Initiating Holder proposes to sell, and (ii) second, the number of securities proposed to be included therein by any other Persons (including securities to be sold for the account of the Company) allocated among such Persons in such manner as the Company may determine. If the number of securities which can be sold is less than the number of securities proposed to be registered pursuant to clause (i) above by the Initiating Holder, the number of securities to be sold shall be allocated to the Initiating Holder in their entirety.

(e)Underwritten Offerings. The Holders shall be entitled to request an underwritten offering or a block trade (i) in connection with a Demand Registration, subject to the terms and conditions of this Section 2 or (ii) at any time that a Shelf Registration Statement covering Registrable Securities is effective (a “Shelf Underwritten Offering”). The Company shall as promptly as reasonably practicable (and in any event within twenty (20) days) amend or supplement any Shelf Registration Statement as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Underwritten Offering and otherwise use its commercially reasonable efforts to facilitate such Shelf Underwritten Offering, provided that, in the case of any Shelf Underwritten Offering, the Holders agree to consult in good faith with the chief executive officer and/or chief financial officer of the Company regarding the Company’s involvement in such Shelf Underwritten Offering and agree to consider in good faith any reasonable suggestions or comments provided on a timely basis by such officer(s) with regard to the Company’s involvement in such Shelf Underwritten Offering to such Holders, the managing underwriters, or their respective counsel. For the avoidance of doubt, a Shelf Underwritten Offering constitutes a Demand Registration with respect to the applicable Holder. If any of the Registrable Securities are to be sold in an underwritten offering, the Holders of a majority of the securities to be included in such offering shall select the managing underwriter or underwriters (which shall be reasonably acceptable to the board of directors of the Company) to administer any such offering.

(f)Effective Period of Demand Registration. Upon the date of effectiveness of the Demand Registration (if the offering thereunder is an underwritten offering) and if such offering is priced promptly on or after such date, the Company shall use commercially reasonable efforts to keep such Demand Registration Statement effective for sale on a continuous basis under Rule 415, or if such rule is unavailable to the Company, for a period equal to one hundred eighty (180) days from such date (or such longer period as in the opinion of counsel for the underwriters a Prospectus is required by law to be delivered in connection with sale of Registrable Securities by an underwriter or dealer) or such shorter period which shall terminate when all of the Registrable Securities covered by such Demand Registration have been sold by the Initiating Holder. If the Company shall withdraw the Demand Registration pursuant to Section 5 before the end of such period, the Initiating Holder shall be entitled to a replacement Demand Registration which shall be subject to all of the provisions of this Agreement. A Demand Registration shall not count as the one permitted Demand Registration hereunder if (i) after the Registration Statement has become effective, such Registration Statement or the related offer, sale or distribution of Registrable Securities thereunder becomes the subject of any stop order, injunction or other order or restriction imposed by the SEC or any other governmental agency or court for any reason not attributable to the Initiating Holder or its Affiliates and such interference is not thereafter eliminated so as to permit the completion of the contemplated distribution of Registrable Securities or (ii) if the Demand Registration is for an underwritten offering, the conditions specified in the related underwriting agreement, if any, are not satisfied or waived for any reason not attributable to the Initiating Holder or its Affiliates, and as a result of any such circumstances described in clause (i) or (ii), less than seventy five percent (75%) of the Registrable Securities covered by the Registration Statement are sold by the Initiating Holder pursuant to such Registration Statement.

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Section 3. Piggyback Registrations.

(a)Right to Piggyback. Prior to the Termination Date, in the event the Shelf Registration Statement is not effective, whenever the Company proposes to register any Shares under the Securities Act (other than on a registration statement on Form S-8, F-8, S-4 or F-4), whether for its own account or for the account of one or more holders of securities, and the form of registration statement to be used may be used for any registration of Registrable Securities (a “Piggyback Registration”), the Company shall give written notice to the Holders of its intention to effect such a registration and, subject to Sections 3(b) and 3(c), shall include in such registration statement and in any offering of Shares to be made pursuant to that registration statement all Registrable Securities with respect to which the Company has received a written request for inclusion therein from a Holder within ten (10) days after such Holder’s receipt of the Company’s notice or, in the case of a primary offering, such shorter time as is reasonably specified by the Company in light of the circumstances. The Company shall have no obligation to proceed with any Piggyback Registration and may abandon, terminate and/or withdraw such registration for any reason at any time prior to the pricing thereof. Any Holder may elect to withdraw its request for inclusion of Registrable Securities in any Piggyback Registration by giving written notice to the Company of such request to withdraw at least five (5) days prior to the effectiveness of such Registration Statement or prior to the pricing of the applicable offering. No registration effected under this Section 3 shall relieve the Company of its obligations to effect any registration of the sale of Registrable Securities under Section 2(a) and no registration effected pursuant to this Section 3 shall be deemed to have been effected pursuant to Section 2(b).

(b)Priority on Primary Piggyback Registrations. If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company and the managing underwriters advise the Company and the Holders (if any Holders have elected to include Registrable Securities in such Piggyback Registration) that in their good faith opinion the number of securities proposed to be included in such offering exceeds the number of securities which can be sold in such offering without materially delaying or jeopardizing the success of the offering (including the price per security proposed to be sold in such offering), the Company shall include in such registration and offering (i) first, the number of Shares that the Company proposes to sell, and (ii) second, the number of securities requested to be included therein by holders of securities, including the Holders (if any Holders have elected to include Registrable Securities in such Piggyback Registration), pro rata (as nearly as practicable) among all participating holders on the basis of the number of securities requested to be included therein by all such holders or as such holders and the Company may otherwise agree.

(c)Priority on Secondary Piggyback Registrations. If a Piggyback Registration is initiated as an underwritten registration on behalf of a holder of securities other than a Holder and the managing underwriters advise the Company that in their good faith opinion the number of securities proposed to be included in such registration exceeds the number of securities which can be sold in such offering without materially delaying or jeopardizing the success of the offering (including the price per security proposed to be sold in such offering), then the Company shall include in such registration (i) first, the number of securities requested to be included therein by the holder(s) requesting such registration (including any Initiating Holders), (ii) second, the number of securities requested to be included therein by other holders of securities including any other Holders (if any other Holders have elected to include Registrable Securities in such Piggyback Registration), pro rata (as nearly as practicable) among participating holders on the basis of the number of securities requested to be included therein by such holders or as such holders and the Company may otherwise agree and (iii) third, the number of securities that the Company proposes to sell. For the avoidance of doubt, if a Piggyback Registration is effected pursuant to this Section 3 by certain Holders with regard to a Demand Registration Statement resulting from a Demand Registration initiated by one or more other Holders that are parties hereto, the underlying Demand Registration would still be deemed to have been effected for the Initiating Holders.

(d)Selection of Underwriters. If any Piggyback Registration is a primary or secondary underwritten offering, subject to the terms and conditions of Section 2 hereof, the Company shall have the sole right to select the managing underwriter or underwriters to administer any such offering.

(e)Basis of Participation. The Holders may not sell Registrable Securities in any offering pursuant to a Piggyback Registration unless it (i) agrees to sell such Registrable Securities on the same basis provided in the underwriting or other distribution arrangements approved by the Company and that apply to the Company and/or any other holders involved in such Piggyback Registration and (ii) completes and executes all questionnaires,

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powers of attorney, indemnities, underwriting agreements, lockups and other documents required under the terms of such arrangements.

Section 4. Suspension Periods.

(a)Suspension Periods. The Company may (i) delay the filing or effectiveness of a Registration Statement in conjunction with a Shelf Registration or Demand Registration or (ii) prior to the pricing of any underwritten offering or other offering of Registrable Securities pursuant to a Shelf Registration or Demand Registration, delay such underwritten or other offering (and, if it so chooses, withdraw any registration statement that has been filed), but in each case described in clauses (i) and (ii) above, only if (A) the Company, by decision of either its chief executive officer or its board of directors or similar governing body, determines in her or its reasonable and good faith judgement (x) that proceeding with such an offering would require the Company to disclose material non-public information that would not otherwise be required to be disclosed at that time and that the Company has, in the reasonable business judgment of its chief executive officer, a valid business purpose to continue to retain as confidential or (y) that the registration or offering to be delayed could, if not delayed, materially adversely affect any bona fide pending or proposed transaction that would be material to the Company and its subsidiaries taken as a whole, including any debt or equity financing, any acquisition or disposition, any recapitalization or reorganization or any other material transaction, whether due to commercial reasons, a desire to avoid premature disclosure of information or any other reason or (B) the registration or offering to be delayed would, if not delayed, render the Company unable to comply with requirements under the Securities Act or Exchange Act, the rules and regulations of the SEC, FINRA, or state securities authority, or other applicable laws or the requirements of any securities exchange on which the Company’s securities are listed. Any period during which the Company has delayed a filing, an effective date or an offering pursuant to this Section 4 is herein called a “Suspension Period.” If pursuant to this Section 4 the Company delays or withdraws a Demand Registration requested by the Holders, the Initiating Holders making the request shall be entitled to withdraw such request and, if they do so, such request shall not count against the limitation on the number of such registrations set forth in Section 2. The Company shall provide prompt written notice to participating Holders of the commencement and termination of any Suspension Period (and any withdrawal of a registration statement pursuant to this Section 4), but shall not be obligated under this Agreement to disclose the reasons therefor. Holders shall keep the existence of each Suspension Period confidential and refrain from making offers and sales of Registrable Securities (and direct any other Persons making such offers and sales to refrain from doing so) during each Suspension Period under the applicable Registration Statement. The Company may not commence a Suspension Period more than two (2) times during any twelve (12) month-period. Each Suspension Period shall be in effect for no more than ninety (90) days and, in the aggregate, Suspension Periods may not be in effect for more than one hundred and twenty (120) days in any twelve (12)-month period.

(b)Other Lockups. Notwithstanding any other provision of this Agreement, the Company shall not be obligated to take any action hereunder that would violate any lockup or similar restriction binding on the Company in connection with a prior or pending registration or underwritten offering.

Section 5. Holdback Agreements.

The restrictions in this Section 5 shall apply to a Holder for as long as such Holder is the beneficial owner of any Registrable Securities, as determined pursuant to Rule 13d-3 and Rule 13d-5 of the Exchange Act. If the Company proposes to sell Shares or other securities convertible into or exchangeable for (or otherwise representing a right to acquire) Shares in a primary underwritten offering pursuant to any registration statement under the Securities Act, or if any other Person proposes to sell securities in a secondary underwritten offering, in each case in which the Holders have been provided piggyback rights in accordance with Section 3 hereof, and if the managing underwriters for such offering advise the Company (in which case the Company promptly shall notify the Holders) that a public sale or distribution of securities outside such offering would materially adversely affect such offering, then, if requested by the Company, each Holder shall agree, severally and not jointly, as contemplated in this Section 5, not to (and to cause Affiliates controlled by such Holder or under common control with such Holder, not to) sell, transfer, pledge, issue, grant or otherwise dispose of, directly or indirectly (including by means of any short sale), or request the registration of, any Registrable Securities (or any securities of any Person that are convertible into or exchangeable for, or otherwise represent a right to acquire, any Registrable Securities) for a period (each such period, a “Holdback Period”) beginning on the tenth day before the pricing date for the underwritten offering

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and extending through the earlier of (i) the ninetieth day after such pricing date (subject to customary automatic extension in the event of the release of earnings results of or material news relating to the Company) and (ii) such earlier day (if any) as may be designated for this purpose by the managing underwriters for such offering (each such agreement of the Holders, a “Holdback Agreement”). Each Holdback Agreement shall be in writing in form and substance satisfactory to the Company and the managing underwriters. Notwithstanding the foregoing, (i) the Holders shall not be obligated to enter a Holdback Agreement unless the Company and each selling shareholder in such offering, if any, also execute agreements substantially similar to such Holdback Agreement, (ii) the Holdback Period applicable to the Holders shall not be longer than that which is applicable to any other holder of Shares and (iii) any agreement with the underwriters with respect to a Holdback Period shall provide that the underwriters may not waive the holdback period for any other holder of Shares unless it is similarly waived for the Holders. A Holdback Agreement shall not apply to (i) the exercise of any warrants or options to purchase securities of the Company (provided that such restrictions shall apply with respect to the securities issuable upon such exercise), (ii) any securities included in the underwritten offering giving rise to the application of this Section 5 or (iii) any Permitted Transfer.

Section 6. Registration Procedures.

(a)Whenever a Holder requests that any Registrable Securities be registered pursuant to this Agreement or requests a Shelf Underwritten Offering, the Company shall use commercially reasonable efforts to effect, as soon as practical as provided herein, the registration and the sale of such Registrable Securities in accordance with the intended methods of disposition thereof, and, pursuant thereto, the Company shall, as soon as practical as provided herein, use its commercially reasonable efforts to:

(i)subject to the other provisions of this Agreement, in accordance with the Securities Act and all applicable rules and regulations promulgated thereunder, prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and cause such Registration Statement to become effective (unless it is automatically effective upon filing); provided, that before filing a Registration Statement pursuant to this Agreement, the Company will furnish to counsel of the Holders in such offering copies of the registration statement, any prospectus, and prospectus supplement, and such other documents proposed to be filed with the SEC as such Holders may reasonably request, and the Company shall give the Holders and their counsel a reasonable opportunity to comment on such documents and keep such Holders reasonably informed as to the registration process (and the Holders of the Registrable Securities covered by such Registration Statement shall have the right to request that the Company modify any information contained in such Registration Statement pertaining to the Holders and the Company will use its commercially reasonable efforts to address requests such Holders may reasonably propose);

(ii)prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to comply with the applicable requirements of the Securities Act and keep such Registration Statement effective for the relevant period required hereunder, but no longer than is necessary to complete the distribution of the securities covered by such Registration Statement, and to comply with the applicable requirements of the Securities Act with respect to the disposition of all the securities covered by such Registration Statement during such period in accordance with the intended methods of disposition set forth in such Registration Statement; provided, that before filing any amendments or supplements or any free writing prospectuses related thereto, the Company will furnish to counsel of the Holders in such offering copies of the registration statement, any prospectus, and prospectus supplement, and such other documents proposed to be filed with the SEC as such Holders may reasonably request, and the Company shall give the Holders and their counsel a reasonable opportunity to comment on such documents and keep such Holders reasonably informed as to the registration process (and the Holders of the Registrable Securities covered by such Registration Statement shall have the right to request that the Company modify any information contained in such Registration Statement, amendment or supplement thereto pertaining to the Holders and the Company will use its commercially reasonable efforts to address requests such Holders may reasonably propose);

(iii)if requested by the managing underwriters (if any) or the holders of a majority of the then outstanding Registrable Securities included in such Registration Statement, promptly include in a prospectus supplement or post-effective amendment such information as the managing underwriters (if any) or such holders may reasonably request in order to permit the intended method of distribution of such securities and to make all

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required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Company has received such request;

(iv)obtain the withdrawal of any order suspending the effectiveness of any Registration Statement, or the lifting of any suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction in the United States;

(v)deliver, without charge, such number of copies of the Registration Statement, preliminary and final Prospectus and any supplement or exhibit thereto or documents incorporated therein as the Holders may reasonably request in order to facilitate the disposition of the Registrable Securities of Holders covered by such Registration Statement in conformity with the requirements of the Securities Act, and the Company hereby consents to the use of such Registration Statement, Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Securities and the underwriters or agents, if any, in connection with the offering and sale of the Registrable Securities covered thereby;

(vi)register or qualify such Registrable Securities under such other securities or blue sky laws as the Holders or underwriters reasonably request and continue such registration or qualification in effect in such jurisdictions for as long as the applicable Registration Statement may be required to be kept effective under this Agreement (provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (v), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction);

(vii)notify the Holders and each distributor of such Registrable Securities identified by the Holders, at any time when a Prospectus relating thereto would be required under the Securities Act to be delivered by such distributor, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, at the reasonable request of the Holders, prepare, as soon as practical, a supplement or amendment to such Prospectus so that, as thereafter delivered to any prospective purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(viii)in the case of an underwritten offering in which the Holders participate pursuant to a Demand Registration or a Piggyback Registration, enter into an underwriting agreement, containing customary provisions (including provisions for indemnification, lockups, opinions of counsel and comfort letters), and take all such other customary and reasonable actions as the managing underwriters of such offering may request in order to facilitate the disposition of such Registrable Securities (including, making appropriate personnel of the Company available at reasonable times and places to assist in customary road-shows that the managing underwriters determine are necessary or advisable to effect the offering);

(ix)in the case of an underwritten offering in which the Holders participate pursuant to a Demand Registration or a Piggyback Registration, and to the extent not prohibited by applicable law, (A) make reasonably available, for inspection by the managing underwriters of such offering and one attorney and accountant acting for such managing underwriters, pertinent corporate documents and financial and other records of the Company and its subsidiaries and controlled Affiliates (but excluding any documents incorporated by reference in such Registration Statement, amendments or supplements that are available on the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (or any successor system)), (B) cause the Company’s officers and employees to supply information reasonably requested by such managing underwriters or attorney in connection with such offering, (C) make the Company’s independent accountants available for any such underwriters’ due diligence and have them provide customary comfort letters to such underwriters in connection therewith; and (D) cause the Company’s counsel to furnish customary legal opinions to such underwriters in connection therewith; provided, however, that such records and other information shall be subject to such confidential treatment as is customary for underwriters’ due diligence reviews;

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(x)cause all such Registrable Securities to be listed on the New York Stock Exchange or such other national securities exchange (if any) on which securities of the same class issued by the Company are then listed;

(xi)provide a transfer agent, registrar and CUSIP number (if applicable) for all such Registrable Securities not later than the effective date of such Registration Statement and, at a reasonable time before any proposed sale of Registrable Securities pursuant to a Registration Statement, provide the transfer agent with printed certificates or book entry statements for, or other indicia acceptable to the transfer agent of, the Registrable Securities to be sold;

(xii)make generally available to its shareholders, as soon as reasonably practicable, a consolidated earnings statement (which need not be audited) for a period of twelve (12) months beginning after the effective date of the Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act and Rule 158 thereunder;

(xiii)promptly notify each Holder and the managing underwriters of any underwritten offering, if any:

(A) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or any post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

(B) of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for any additional information regarding the Holders;

(C) of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and

(D) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction.

(xiv)cooperate and assist in any filings required to be made with FINRA;

(xv)if the Shelf Registration Statement covering Registrable Securities has been outstanding for at least three years and any Registrable Securities remain outstanding, at the end of the third year, file a new Shelf Registration Statement covering the Registrable Securities; and

(xvi)take such other actions and deliver such other documents and instruments as may be reasonably requested and are necessary to facilitate the registration and disposition of Registrable Securities as contemplated hereby.

For the avoidance of doubt, the provisions of clauses (viii) and (ix) of this Section 6(a) shall apply only in respect of an underwritten offering.

(b)No Registration Statement (including any amendments thereto) shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading, and no Prospectus (including any supplements thereto) shall contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case, except for any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in reliance on and in

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conformity with written information furnished to the Company by or on behalf of the Holders or any underwriter or other distributor specifically for use therein.

(c)At all times after the Company has filed a Registration Statement with the SEC pursuant to the requirements of the Securities Act and until the Termination Date, the Company shall use commercially reasonable efforts to continuously maintain in effect the Registration Statement of Class A Common Stock under Section 12 of the Exchange Act and to use commercially reasonable efforts to file all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, all to the extent required to enable the Holders to be eligible to sell Registrable Securities (if any) pursuant to Rule 144 under the Securities Act.

(d)The Company may require each Holder and each distributor of Registrable Securities as to which any registration is being effected to, and each Holder severally and not jointly agrees to, and to cause any distributor to, furnish to the Company information regarding such Person and the distribution of such securities as the Company may from time to time reasonably request in connection with such registration.

(e)The Holders agree that, upon being advised in writing by the Company of the occurrence of an event pursuant to Section 6(a)(vii), such Holders will immediately discontinue (and direct any other Persons making offers and sales of Registrable Securities to immediately discontinue) offers and sales of Registrable Securities pursuant to any Registration Statement (other than those pursuant to a plan that is in effect prior to such time and that complies with Rule 10b5-1 of the Exchange Act) until it is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 6(a)(vii), and, if so directed by the Company, each such Holder will deliver to the Company all copies, other than permanent file copies then in the Holders’ possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.

(f)The Company may prepare and deliver an issuer free-writing prospectus (as such term is defined in Rule 405 under the Securities Act) in lieu of any supplement to a prospectus, and references herein to any “supplement” to a Prospectus shall include any such issuer free-writing prospectus. Neither the Holders nor any other seller of Registrable Securities may use a free-writing prospectus to offer or sell any such shares without the Company’s prior written consent.

(g)It is understood and agreed that any failure of the Company to file a Registration Statement or any amendment or supplement thereto or to cause any such document to become or remain effective or usable within or for any particular period of time as provided in Sections 2, 4 or 6 or otherwise in this Agreement, due to reasons that are not reasonably within its control (including, for the avoidance of doubt, bona fide delays related to the services to be provided by third parties including the Company’s auditors or advisors), or due to any refusal of the SEC to permit a registration statement or prospectus to become or remain effective or to be used because of unresolved SEC comments thereon (or on any documents incorporated therein by reference) despite the Company’s good faith and commercially reasonable efforts to resolve those comments, shall not be a breach of this Agreement.

(h)It is further understood and agreed that the Company shall not have any obligations under this Section 6 at any time on or after the Termination Date, unless an underwritten offering in which the Holders have participated has been priced but not completed prior to the Termination Date, in which event the Company’s obligations under this Section 6 shall continue with respect to such offering until it is so completed (but not more than sixty (60) days after the commencement of the offering).

(i)Notwithstanding anything to the contrary in this Agreement, the Company shall not be required to file a Registration Statement or include Registrable Securities in a Registration Statement unless it has received from participating Holders, at least five (5) days prior to the anticipated filing date of the Registration Statement, requested information required to be provided by such Holders for inclusion therein.

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Section 7. Registration Expenses.

(a)All fees and expenses incurred by the Company incident to the Company’s performance of or compliance with this Agreement, including all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, FINRA fees, listing application fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all independent certified public accountants, custodians and other Persons retained by the Company, internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties) and expenses in connection with participation in any road show, and the reasonable and documented fees and disbursements of one (1) counsel for the Holders, collectively, shall be borne by the Company during the term of this Agreement, provided that the legal fees and disbursements payable hereunder in connection with Holders’ counsel plus the legal fees and disbursements payable under the November 2021 Registration Rights Agreement in connection with the RJB Holders’ counsel and the April 2022 Amended and Restated Registration Rights Agreement in connection with the Holders’ counsel shall not exceed $200,000 in the aggregate. Subject to the preceding sentence, the applicable Holder shall bear the cost of all underwriting discounts and commissions associated with any sale of Registrable Securities by such Holder and shall pay all fees and expenses of any selling brokers, dealer managers or similar securities industry professionals or any other advisers representing such Holder and any related stock transfer taxes.

(b)The obligation of the Company to bear the expenses described in Section 7(a) shall apply irrespective of whether a registration, once properly demanded or requested becomes effective or is withdrawn or suspended.

Section 8. Indemnification.

(a)The Company shall indemnify, to the fullest extent permitted by law, each Holder, its respective officers, directors, members, employees, agents, Affiliates, and Representatives, and each Person who controls such Holder (within the meaning of the Securities Act) (collectively, the “Holder Indemnified Persons”) against all losses, claims, damages, liabilities, judgments, costs (including reasonable costs of investigation) and expenses (including reasonable attorneys’ fees) arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained or incorporated by reference in any Registration Statement or Prospectus, free writing prospectus or any amendment thereof or supplement thereto, in the information conveyed by the Company or its representatives to a purchaser at the time of sale to such purchaser or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any violation or alleged violation by the Company of the Securities Act or any other similar foreign, federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission so made in reliance and in conformity with information furnished in writing to the Company by or on behalf of the applicable Holder expressly for use therein; (ii) use by the applicable Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that such Prospectus is outdated or defective; (iii) an applicable Holder’s failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required (and not exempted) to the Persons asserting an untrue statement or omission or alleged untrue statement or omission at or prior to the written confirmation of the sale of Registrable Securities (except to the extent caused by the Company’s breach of its obligations under this Agreement); (iv) the disposition of any Registrable Securities pursuant to any Registration Statement or Prospectus covering such Registrable Securities by an applicable Holder during a Suspension Period; (v) any breach or failure to comply with any of the Holder’s covenants or agreements contained herein or (vi) any violations by such Holder Indemnified Person of state or federal securities laws. In connection with an underwritten offering, in which any Holder participates, conducted pursuant to a registration effected hereunder, the Company shall indemnify each participating underwriter and each Person who controls such underwriter (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of any participating Holder.

(b)In connection with any Registration Statement in which a Holder is participating, such Holder shall furnish to the Company in writing such information as the Company reasonably requests for use in

- 11 -

connection with any such Registration Statement or Prospectus, or amendment or supplement thereto, and shall indemnify, severally and not jointly, to the fullest extent permitted by law, the Company, its officers, directors, members, employees, agents, Affiliates, and Representatives and each Person who controls the Company (within the meaning of the Securities Act) (collectively, the “Company Indemnified Persons”) against all losses, claims, damages, liabilities, judgments, costs (including reasonable costs of investigation) and expenses (including reasonable attorneys’ fees) arising out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement or Prospectus, or any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that the same are made in reliance and in conformity with information furnished in writing to the Company by or on behalf of such participating Holder expressly for use therein; provided, however, that such Holder will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) any breach or failure to comply with any of the Company’s covenants or agreements contained herein or (ii) any violations by such Company Indemnified Person of state or federal securities laws. No Holder of Registrable Securities shall be liable in respect of indemnity amounts for more than the net proceeds actually received by such Holder in connection with such Registrable Securities.

(c)Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying Person of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying Person to assume the defense of such claim with counsel reasonably satisfactory to the indemnified Person. Failure to notify the indemnifying Person shall not relieve it from any liability that it may have to an indemnified Person except to the extent that the indemnifying Person is materially and adversely prejudiced thereby. An indemnifying Person who is entitled to, and elects to, assume the defense of a claim shall not be subject to any liability for any settlement made by the indemnified Person without its consent (but such consent will not be unreasonably withheld). An indemnifying Person who is entitled to, and elects to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to one local counsel) for all Persons indemnified (hereunder or otherwise) by such indemnifying Person with respect to such claim (and all other claims arising out of the same circumstances), unless in the reasonable judgment of any indemnified Person there may be one or more legal or equitable defenses available to such indemnified Person which are in addition to or may conflict with those available to another indemnified Person with respect to such claim). If an indemnifying Person is entitled to, and elects to, assume the defense of a claim, the indemnified Person shall continue to be entitled to participate in the defense thereof, with counsel of its own choice, but, except as set forth above, the indemnifying Person shall not be obligated to reimburse the indemnified Person for the costs thereof. The indemnifying Person shall not consent to the entry of any judgment or enter into or agree to any settlement relating to a claim or action for which any indemnified Person would be entitled to indemnification by any indemnified Person hereunder unless such judgment or settlement imposes no ongoing obligations or imposition of equitable remedies on any such indemnified Person and includes as an unconditional term the giving, by all relevant claimants and plaintiffs to such indemnified Person, a release, satisfactory in form and substance to such indemnified Person, from all liabilities in respect of such claim or action for which such indemnified Person would be entitled to with regard to such indemnification. The indemnifying Person shall not be liable hereunder for any amount paid or payable or incurred pursuant to or in connection with any judgment entered or settlement effected with the consent of an indemnified Person unless the indemnifying Person has also consented to such judgment or settlement (but such consent will not be unreasonably withheld).

(d)The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified Person or any officer, director or controlling Person of such indemnified Person and shall survive the transfer of securities and the Termination Date but only with respect to offers and sales of Registrable Securities made before the Termination Date or during the period following the Termination Date referred to in Section 6(h).

(e)If the indemnification provided for in or pursuant to this Section 8 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying Person, in lieu of indemnifying such indemnified Person, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying Person on the one hand and of the indemnified Person on the other in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses as well as any

- 12 -

other relevant equitable considerations. The relative fault of the indemnifying Person on the one hand and of the indemnified Person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying Person or by the indemnified Person, and by such Person’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of the indemnifying Person be greater in amount than the amount for which such indemnifying Person would have been obligated to pay by way of indemnification if the indemnification provided for under Section 8(a) or 8(b) hereof had been available under the circumstances.

Section 9. Securities Act Restrictions.

Subject to the terms and conditions of the Purchase Agreement, to the extent the Registrable Securities are restricted securities under the Securities Act, they may not be offered or sold except pursuant to an effective Registration Statement or an available exemption from registration under the Securities Act. Accordingly, the Holders shall not, directly or through others, offer or sell any Registrable Securities except pursuant to a Registration Statement as contemplated herein or pursuant to Rule 144 or another exemption from registration under the Securities Act, if available. Prior to any transfer of Registrable Securities, other than pursuant to an effective registration statement or in accordance with Section 8(a) of the Purchase Agreement, each Holder shall notify the Company of such transfer and the Company may require such Holder to provide, prior to such transfer, such evidence that the transfer will comply with the Securities Act (including written representations or an opinion of counsel) as the Company may reasonably request. The Company may impose stop-transfer instructions with respect to any Registrable Securities that are to be transferred in contravention of this Agreement or, if applicable, the Purchase Agreement. Any certificates representing the Registrable Securities may bear a legend (and the Company’s share registry may bear a notation) referencing the restrictions on transfer contained in this Agreement (and the Purchase Agreement, if any), until such time as such securities have ceased to be (or are to be transferred in a manner that results in their ceasing to be) Registrable Securities. Subject to the provisions of this Section 9, the Company will replace any such legended certificates with unlegended certificates promptly upon surrender of the legended certificates to the Company or its designee and cause shares that cease to be Registrable Securities to bear a general unrestricted CUSIP number, in order to facilitate a lawful transfer or at any time after such shares cease to be Registrable Securities.

Section 10. Miscellaneous.

(a)Notices. All notices, communications and deliveries required or permitted by this Agreement shall be made in writing signed by the party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (i) on the date delivered if delivered in person, (ii) on the third (3rd) Business Day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid); (iii) on the date of confirmation of receipt (or the first Business Day following such receipt if the date of such receipt is not a Business Day) of transmission by email; or (iv) on the day after it is delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows:

(i)if to the Purchaser, at:

Long Live Bruce, LLC

528 Palisades Dr. #545

Pacific Palisades, CA 90272

Attention: Joseph Sanberg

Email: joseph@agopartners.com

with a copy (which shall not constitute notice) to:

Sullivan and Cromwell LLP

1888 Century Park East, Suite 2100

Los Angeles, CA 90067

Attention: Alison S. Ressler

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Email: resslera@sullcrom.com

(ii)if to the Company, at:

Blue Apron Holdings, Inc.

28 Liberty Street

New York, NY 10005

Attention: General Counsel

Email: legalnotices@blueapron.com

With copies (which shall not constitute notice) to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention: David A. Westenberg, Esq.

Email: David.Westenberg@wilmerhale.com

and

Wilmer Cutler Pickering Hale and Dorr LLP

7 World Trade Center

250 Greenwich Street

New York, NY 10007

Attention: Christopher Barnstable-Brown, Esq.

Email: Chris.Barnstable-Brown@wilmerhale.com

or to such other representative or at such other address of a party as such party hereto may furnish to the other parties in writing in accordance with this Section 10. If notice is given pursuant to this Section 10 of any assignment to a Permitted Transferee, permitted successor or assign of a party hereto, the notice shall be given as set forth above to such Permitted Transferee, successor or permitted assign of such party.

(b)No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No waiver hereunder shall be effective unless it is in writing and signed by the party against whom the waiver is to be enforced. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(c)Assignment. Except in connection with any Permitted Transfer by a Holder, this Agreement may not be assigned by any Holder without the prior written consent of the Company and this Agreement may not be assigned by the Company without the prior written consent of the Holders. This Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the parties hereto and their respective successors and assigns.

(d)No Third-Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person or entity other than the Company and the Holders, any benefits, rights, or remedies (except as specified in Section 9 hereof).

(e)Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York (other than its rules of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby).

(f)Waiver of Jury Trial; Consent to Jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO

- 14 -

THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

(g)Entire Agreement. This Agreement and the Purchase Agreement embody the entire agreement and understanding between the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties, or undertakings, other than those set forth or referred to herein or therein, with respect to the registration rights granted by the Company with respect to the PIPE Shares. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter of this Agreement.

(h)Severability. If any provision of this Agreement or the application thereof to any person or circumstances is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

(i)Restriction on Third-Party Registration Rights. The Company agrees that it shall not grant any registration rights to any third party (i) unless such rights are expressly made subject to the rights of the Holders in a manner consistent with this Agreement or (ii) if such registration rights are senior to, or take priority over, the registration rights granted to the Holders under this Agreement, and in the event such registration rights are granted to a third party, the Company will so notify the Holders.

(j)Amendment. No amendment of any provision of this Agreement will be effective unless made in writing and signed by an officer of a duly authorized representative of the Company and the Holder against whom such amendment is to be effective.

(k)Specific Performance. Each party acknowledges and agrees that each party hereto will be irreparably damaged in the event any of the provisions of this Agreement are not performed by the parties in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that each of the Company and each Holder, to the extent entitled to the benefit of the provisions hereof, shall be entitled to an injunction or injunctions to prevent breaches of this Agreement, and to enforce specifically this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction. Each party agrees that it will not oppose the granting of such injunction, specific performance and other equitable relief on the basis that the other party has an adequate remedy at law.

(l)Miscellaneous.

(i)The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning of this Agreement.

(ii)Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

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(iii)The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

(iv)This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same instrument.

[Signature page follows]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

BLUE APRON HOLDINGS, INC.
By:	/s/ Linda Findley
Name:	Linda Findley
Title:	President and Chief Executive Officer

LONG LIVE BRUCE, LLC
By:	/s/ Joseph Sanberg
Name:	Joseph Sanberg
Title:	Managing Member

[Signature Page to Registration Rights Agreement]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

BLUE APRON HOLDINGS, INC.
By:	/s/ Linda Findley
Name:	Linda Findley
Title:	President and Chief Executive Officer
LONG LIVE BRUCE, LLC
By:	/s/ Joseph Sanberg
Name:	Joseph Sanberg
Title:	Managing Member

[Signature Page to Registration Rights Agreement]

Exhibit A

FORM OF JOINDER TO

REGISTRATION RIGHTS AGREEMENT

THIS JOINDER to the Registration Rights Agreement, dated as of May [●], 2022, by and between Blue Apron Holdings, Inc., a Delaware corporation, and Long Live Bruce, LLC, a Delaware limited liability company (the “Registration Rights Agreement”), is made and entered into as of [●], by and between the Company and [●] (“New Holder”). Capitalized terms used herein but not otherwise defined shall have the meanings set forth in the Registration Rights Agreement.

WHEREAS, New Holder has acquired certain Registrable Securities from [●].

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder hereby agree as follows:

1.Agreement to be Bound. New Holder hereby agrees that upon execution of this Joinder, it shall become a party to the Registration Rights Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Registration Rights Agreement as though an original party thereto and shall be deemed a Holder for all purposes thereof.

2.Successors and Assigns. This Joinder shall bind and inure to the benefit of and be enforceable by the Company, the Holders and their respective successors, heirs and assigns and Holder and its successors, heirs and assigns.

3.Counterparts. This Joinder may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same instrument.

4.Notices. For purposes of Section 10(a) of the Registration Rights Agreement, all notices, demands or other communications to the New Holder shall be directed to:

[Name]

[Address]

[Email Address]

5.Governing Law. This Joinder shall be governed by and construed in accordance with the internal laws of the State of New York (other than its rules of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby).

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Linda Findley, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Blue Apron Holdings, 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: August 8, 2022
	/s/ Linda Findley
	Linda Findley
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Randy J. Greben, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Blue Apron Holdings, 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: August 8, 2022
	/s/ Randy J. Greben
	Randy J. Greben
	Chief Financial Officer and Treasurer
	(Principal Financial and 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, Linda Findley, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of Blue Apron Holdings, Inc. for the fiscal quarter ended June 30, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Blue Apron Holdings, Inc.

/s/ Linda Findley
Linda Findley
President and Chief Executive Officer

(Principal Executive Officer)

August 8, 2022

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, Randy J. Greben, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of Blue Apron Holdings, Inc. for the fiscal quarter ended June 30, 2022 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Blue Apron Holdings, Inc.

/s/ Randy J. Greben
Randy J. Greben
Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

August 8, 2022

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2022 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2022
Entity File Number	001-38134
Entity Registrant Name	Blue Apron Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-4777373
Entity Address, Address Line One	28 Liberty Street
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10005
City Area Code	347
Local Phone Number	719-4312
Title of 12(b) Security	Class A Common Stock, $0.0001 par value per share
Trading Symbol	APRN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001701114
Amendment Flag	false
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	34,795,727
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	0
Class C
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	0

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash and cash equivalents	$ 54,028	$ 82,160
Accounts receivable, net	276	234
Related party receivables	10,000
Inventories, net	28,856	24,989
Prepaid expenses and other current assets	15,519	12,249
Total current assets	108,679	119,632
Property and equipment, net	100,397	108,355
Other noncurrent assets	6,995	3,719
TOTAL ASSETS	216,071	231,706
CURRENT LIABILITIES:
Accounts payable	40,653	27,962
Current portion of related party payables	6,000
Current portion of long-term debt		3,500
Accrued expenses and other current liabilities	29,507	31,951
Deferred revenue	13,308	7,958
Warrant obligation		8,001
Total current liabilities	89,468	79,372
Long-term debt	27,217	25,886
Facility financing obligation	35,832	35,886
Related party payables	3,000
Other noncurrent liabilities	8,156	10,509
TOTAL LIABILITIES	163,673	151,653
Commitments and contingencies (Note 10)
STOCKHOLDERS' EQUITY:
Additional paid-in capital	780,481	746,564
Accumulated deficit	(728,086)	(666,514)
TOTAL STOCKHOLDERS' EQUITY	52,398	80,053
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	216,071	231,706
Class A
STOCKHOLDERS' EQUITY:
Common Stock	$ 3	$ 3

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Class A
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	1,500,000,000	1,500,000,000
Common stock, issued (in shares)	34,795,727	31,694,400
Common stock, outstanding (in shares)	34,795,727	31,694,400
Class B
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	175,000,000	175,000,000
Common stock, issued (in shares)	0	0
Common stock, outstanding (in shares)	0	0
Class C
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	0	0
Common stock, outstanding (in shares)	0	0

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Consolidated Statements of Operations
Net revenue	$ 124,237	$ 124,010	$ 241,988	$ 253,716
Operating expenses:
Cost of goods sold, excluding depreciation and amortization	81,158	77,585	160,648	159,177
Marketing	21,776	16,316	49,690	36,256
Product, technology, general and administrative	38,510	36,802	81,767	73,353
Depreciation and amortization	5,464	5,612	10,868	11,232
Total operating expenses	146,908	136,315	302,973	280,018
Income (loss) from operations	(22,671)	(12,305)	(60,985)	(26,302)
Gain (loss) on extinguishment of debt	650	(4,089)	650	(4,089)
Interest income (expense), net	(1,435)	(2,731)	(3,205)	(4,439)
Other income (expense), net	387	548	2,033	548
Income (loss) before income taxes	(23,069)	(18,577)	(61,507)	(34,282)
Benefit (provision) for income taxes	(54)	(10)	(65)	(26)
Net income (loss)	$ (23,123)	$ (18,587)	$ (61,572)	$ (34,308)
Net income (loss) per share attributable to Class A and Class B common stockholders:
Basic (in dollars per share)	$ (0.68)	$ (0.98)	$ (1.86)	$ (1.86)
Diluted (in dollars per share)	$ (0.68)	$ (0.98)	$ (1.86)	$ (1.86)
Weighted-average shares used to compute net income (loss) per share attributable to Class A and Class B common stockholders:
Basic (in shares)	34,073,695	18,876,600	33,185,992	18,410,729
Diluted (in shares)	34,073,695	18,876,600	33,185,992	18,410,729

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock Class A	Common Stock Class B	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2020	$ 1	$ 1	$ 642,106	$ (578,133)	$ 63,975
Beginning balance (in shares) at Dec. 31, 2020	14,365,664	3,493,791
Conversion from Class B to Class A common stock	$ 0	$ 0
Conversion from Class B to Class A common stock (in shares)	100,000	(100,000)
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	$ 0		0
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings (in shares)	191,595
Share-based compensation			2,366		2,366
Net income (loss)				(15,721)	(15,721)
Ending balance at Mar. 31, 2021	$ 1	$ 1	644,472	(593,854)	50,620
Ending balance (in shares) at Mar. 31, 2021	14,657,259	3,393,791
Beginning balance at Dec. 31, 2020	$ 1	$ 1	642,106	(578,133)	63,975
Beginning balance (in shares) at Dec. 31, 2020	14,365,664	3,493,791
Net income (loss)					(34,308)
Ending balance at Jun. 30, 2021	$ 2	$ 1	668,915	(612,441)	56,477
Ending balance (in shares) at Jun. 30, 2021	20,207,631	3,393,708
Beginning balance at Mar. 31, 2021	$ 1	$ 1	644,472	(593,854)	50,620
Beginning balance (in shares) at Mar. 31, 2021	14,657,259	3,393,791
Conversion from Class B to Class A common stock	$ 0	$ 0
Conversion from Class B to Class A common stock (in shares)	83	(83)
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	$ 0		0
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings (in shares)	138,389
Share-based compensation			3,300		3,300
Net income (loss)				(18,587)	(18,587)
Value of common stock, gross	$ 1		21,143		21,144
Issuance of common stock, net of offering costs (in shares)	5,411,900
Ending balance at Jun. 30, 2021	$ 2	$ 1	668,915	(612,441)	56,477
Ending balance (in shares) at Jun. 30, 2021	20,207,631	3,393,708
Beginning balance at Dec. 31, 2021	$ 3		746,564	(666,514)	80,053
Beginning balance (in shares) at Dec. 31, 2021	31,694,400
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	$ 0		0
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings (in shares)	120,981
Issuance of common stock upon exercise of warrants	$ 0		4,096		4,096
Issuance of common stock upon exercise of warrants (in shares)	488,055
Issuance of common stock from the Private Placements, net of issuance costs	$ 0		4,809		4,809
Issuance of common stock from the Private Placements, net of issuance costs (in shares)	357,143
Share-based compensation			2,233		2,233
Net income (loss)				(38,449)	(38,449)
Ending balance at Mar. 31, 2022	$ 3		757,702	(704,963)	52,742
Ending balance (in shares) at Mar. 31, 2022	32,660,579
Beginning balance at Dec. 31, 2021	$ 3		746,564	(666,514)	80,053
Beginning balance (in shares) at Dec. 31, 2021	31,694,400
Net income (loss)					(61,572)
Ending balance at Jun. 30, 2022	$ 3		780,481	(728,086)	52,398
Ending balance (in shares) at Jun. 30, 2022	34,795,727
Beginning balance at Mar. 31, 2022	$ 3		757,702	(704,963)	52,742
Beginning balance (in shares) at Mar. 31, 2022	32,660,579
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings	$ 0		0
Issuance of common stock upon exercise of stock options and vesting of restricted stock, net of tax withholdings (in shares)	191,487
Issuance of common stock upon exercise of warrants	$ 0		953		953
Issuance of common stock upon exercise of warrants (in shares)	235,329
Issuance of common stock from the Private Placements, net of issuance costs	$ 0		20,027		20,027
Issuance of common stock from the Private Placements, net of issuance costs (in shares)	1,708,332
Share-based compensation			1,799		1,799
Net income (loss)				(23,123)	(23,123)
Ending balance at Jun. 30, 2022	$ 3		$ 780,481	$ (728,086)	$ 52,398
Ending balance (in shares) at Jun. 30, 2022	34,795,727

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (61,572)	$ (34,308)
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities:
Depreciation and amortization of property and equipment	10,868	11,232
Loss (gain) on disposal of property and equipment	135
Loss (gain) on extinguishment of debt	(650)	4,089
Loss (gain) upon derecognition of Blue Torch warrant obligation	(214)
Changes in fair value of warrant obligation	(1,819)	(548)
Changes in reserves and allowances	66	132
Share-based compensation	4,039	5,465
Non-cash interest expense	450	807
Changes in operating assets and liabilities:
Accounts receivable	(43)	9
Related party receivables	(10,000)
Inventories	(3,907)	(4,719)
Prepaid expenses and other current assets	(3,620)	8,439
Accounts payable	12,632	16,515
Current portion of related party payables	6,000
Accrued expenses and other current liabilities	(4,041)	(19,110)
Deferred revenue	5,350	(312)
Related party payables	3,000
Other noncurrent assets and liabilities	(3,794)	1,431
Net cash from (used in) operating activities	(47,120)	(10,878)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(2,985)	(3,009)
Proceeds from sale of property and equipment	111	1,302
Net cash from (used in) investing activities	(2,874)	(1,707)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from debt issuances	28,200
Net proceeds from equity and warrant issuances	25,500	21,571
Repayments of debt	(30,625)	(1,750)
Payments of debt and equity issuance costs	(1,143)	(572)
Receipt of funds held in escrow		5,000
Release of funds held in escrow		(5,000)
Principal payments on capital lease obligations	(69)	(77)
Net cash from (used in) financing activities	21,863	19,172
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(28,131)	6,587
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - Beginning of period	83,597	45,842
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - End of period	55,466	52,429
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes, net of refunds	65	60
Cash paid for interest	3,456	3,494
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:
Non-cash additions to property and equipment	163	223
Purchases of property and equipment in Accounts payable and Accrued expenses and other current liabilities	$ 497	$ 265

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Organization and Description of Business

6 Months Ended

Jun. 30, 2022

Organization and Description of Business

Organization and Description of Business

1. Organization and Description of Business

When used in these notes, Blue Apron Holdings, Inc. and its subsidiaries are collectively referred to as the “Company.”

The Company designs original recipes with fresh, seasonally-inspired produce and high-quality ingredients, which are sent directly to customers for them to prepare, cook, and enjoy. The Company creates meal experiences around original recipes every week based on what’s in-season with farming partners and other suppliers. Customers can choose which recipes they would like to receive in a given week, and the Company delivers those recipes to their doorsteps along with the pre-portioned ingredients required to cook those recipes.

In addition to meals, the Company sells wine through Blue Apron Wine, a direct-to-consumer wine delivery service. The Company also sells a curated selection of cooking tools, utensils, pantry items, and add-on products for different culinary occasions through Blue Apron Market, its e-commerce market.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The unaudited interim Consolidated Financial Statements (the “Consolidated Financial Statements”) have been prepared on the same basis as the audited Consolidated Financial Statements, and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2022 and December 31, 2021, results of operations for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. These unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2022 (the “Annual Report”). There have been no material changes in the Company's significant accounting policies from those that were disclosed in Note 2, Summary of Significant Accounting Policies, included in the Annual Report, except those additional significant policies as described within the accompanying notes to the Consolidated Financial Statements.

The accompanying Consolidated Financial Statements include the accounts of Blue Apron Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its Consolidated Financial Statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”).

Liquidity and Going Concern Evaluation

Under Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company is required to evaluate whether there is substantial doubt regarding its ability to continue as a going concern each reporting period, including interim periods.

In this evaluation, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within twelve months of the issuance date of this Quarterly Report on Form 10-Q, and considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, and the Company’s conditional and unconditional obligations before such date.

The Company has a history of significant net losses, including $61.6 million and $34.3 million for the six months ended June 30, 2022, and 2021, respectively, and operating cash flows of $(47.1) million and $(10.9) million for the six months ended June 30, 2022, and 2021, respectively. The Company's current operating plan indicates it will continue to incur net losses and generate negative cash flows from operating activities.

On May 5, 2022, the Company entered into a Note Purchase and Guarantee Agreement (the “note purchase agreement”), the proceeds of which were used, together with cash on hand, to repay in full and terminate its previous financing agreement. The note purchase agreement contains two financial maintenance covenants: (i) a minimum liquidity covenant that is set between $15.0 million and $25.0 million, depending on the results of the most recently performed Asset Valuation (as defined in the note purchase agreement), for any date subsequent to June 30, 2022, including within required cash flow forecasts provided to the noteholders, and (ii) a covenant requiring a minimum Asset Coverage Ratio (as defined in the note purchase agreement) of at least 1.25 to 1.00.

As of the date of this Quarterly Report on Form 10-Q, the Company’s initial Asset Valuation has not been completed, with the minimum liquidity covenant therefore currently set at $25.0 million. As of June 30, 2022, the Company had cash and cash equivalents of $54.0 million and total outstanding debt of $27.2 million, net of unamortized debt issuance costs, all of which was classified as long-term debt. The Company was in compliance with all of the covenants under the note purchase agreement as of June 30, 2022.

On April 29, 2022, the Company entered into a purchase agreement with RJB Partners LLC (“RJB”)(the “RJB April 2022 Purchase Agreement”), an affiliate of Joseph N. Sanberg, an existing stockholder of the Company. Under the RJB April 2022 Purchase Agreement, the Company agreed to issue and sell 3,333,333 shares of Class A common stock for an aggregate purchase price of $40.0 million (or $12.00 per share), of which 1,666,667 shares of Class A common stock were issued and sold to an affiliate of Joseph N. Sanberg for an aggregate purchase price of $20.0 million concurrently with the execution of the agreement, and with the remainder to be issued and sold under a second closing, initially expected to close by May 30, 2022 or such other date as agreed to by the parties.

On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase from the Company (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total, as well as agreeing to extend the date of the second closing to on or before August 31, 2022. The Company expects to invest these proceeds in its long-term growth plan, or for general corporate purposes. The Company may use up to $25.0 million for strategic purposes aimed at enhancing shareholder value, including exploring share buybacks. RJB’s obligation to complete the second closing is not subject to closing conditions, and, pursuant to such amendment, Joseph N. Sanberg has agreed to personally guarantee the payment of the aggregate purchase price of $50.0 million.

In addition, on May 5, 2022, the Company entered into a gift card sponsorship agreement with an affiliate of Joseph N. Sanberg (the “May Sponsorship Gift Cards Agreement”), pursuant to which such affiliate agreed to pay the Company a $20.0 million net sponsorship fee to support a marketing program through which the Company will distribute gift cards, at the Company’s sole discretion, in order to support its growth strategy. On August 7, 2022, the Company amended the May Sponsorship Gift Cards Agreement to extend the funding date to on or before August 31 2022, and pursuant to which, Joseph N. Sanberg personally guaranteed his affiliate’s obligation.

Without the liquidity provided by the second closing of the RJB April 2022 Purchase Agreement and the funding of the May Sponsorship Gift Cards Agreement (collectively, the “liquidity transactions”), the Company's forecast of future cash flows indicates that such cash flows would not be sufficient for the Company to maintain compliance under its minimum liquidity covenant for a period of twelve months following the issuance date of this Quarterly Report on Form 10-Q, which would result in an event of default under the note purchase agreement. Upon such event of default, the noteholders could declare all outstanding principal and interest be due and payable immediately and foreclose against the assets securing the borrowings. If the Company would be unable to obtain a waiver or successfully renegotiate the terms of its note purchase agreement, and the noteholders enforced one or more of their rights upon default, the Company would be unable to meet its current obligations.

While management was able to obtain personal guarantees from Joseph N. Sanberg relating to his affiliates’ obligations to fund the liquidity transactions via the executed amendments above, which upon receipt of such proceeds would alleviate substantial doubt, there is no assurance that the liquidity transactions will be consummated in a timely manner, in amounts that are sufficient to maintain the Company's compliance under its minimum liquidity covenant, or on terms acceptable to the Company, or at all. Although the Company has been reviewing a number of potential alternatives regarding maintaining compliance with its minimum liquidity covenant, including cost reduction initiatives, renegotiating the terms of its note purchase agreement, and/or alternative sources for additional financing, such alternatives may not be achievable on favorable conditions, or at all, and these conditions and events in the aggregate raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s Consolidated Financial Statements do not include any adjustments that may result from the outcome of this uncertainty and have been prepared assuming the Company will continue as a going concern.

Use of Estimates

In preparing its Consolidated Financial Statements in accordance with GAAP, the Company is required to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, costs, and expenses, and disclosure of contingent assets and liabilities which are reported in the Consolidated Financial Statements and accompanying disclosures. The accounting estimates that require the most difficult and subjective judgments include revenue recognition, inventory valuation, leases, the fair value of share-based awards, the fair value of the Blue Torch warrant obligation, recoverability of long-lived assets, and the recognition and measurement of contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from the Company’s estimates and assumptions.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act. This classification has allowed the Company to elect to take advantage of the extended transition period afforded for the implementation of new or revised accounting standards. The Company expects to lose its emerging growth company status on December 31, 2022, and as a result, will adopt all accounting pronouncements currently deferred under the emerging growth company election according to public company standards beginning with its Annual Report on Form 10-K for the year ending December 31, 2022, including interim period disclosures within that filing. The adoption dates for the new accounting pronouncements disclosed below have been presented accordingly.

Smaller Reporting Company Status

The Company is a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, and therefore qualifies for reduced disclosure requirements for smaller reporting companies.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued its standard on lease accounting, Accounting Standards Update No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases. Subsequent to February 2016, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments, ASU No. 2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, ASU No. 2019-01, Leases (Topic 842): Codification Improvements, ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, to improve and clarify certain aspects of ASU No. 2016-02, as well as to defer its effective date for certain entities, and ASU No. 2021-05, Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments. For the Company, the new standard is effective for annual periods beginning January 1, 2022, and interim periods beginning January 1, 2023. Upon adoption of this standard, the Company expects to recognize, on a discounted basis, its minimum commitments under non-cancelable operating leases on the Consolidated Balance Sheets resulting in the recording of

right-of-use assets and lease obligations. The Company is currently evaluating any additional impacts this guidance will have on its Consolidated Financial Statements.

In December 2019, the FASB issued Accounting Standards Update No. 2019-12 (“ASU 2019-12”), Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The standard is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well as improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For the Company, the amendments in ASU 2019-12 are effective for annual periods beginning January 1, 2022, and interim periods beginning January 1, 2023. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements.

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Inventories, Net

6 Months Ended

Jun. 30, 2022

Inventories, Net

Inventories, Net

3. Inventories, Net

Inventories, net consist of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Fulfillment	$	2,721	$	1,879
Product		26,135		23,110
Inventories, net	$	28,856	$	24,989

Product inventory primarily consists of bulk and prepped food, containers, pre-made meals, products available for resale, and wine products. Fulfillment inventory consists of packaging used for shipping and handling. Product and fulfillment inventories are recognized as components of Cost of goods sold, excluding depreciation and amortization in the accompanying Consolidated Statements of Operations when sold.

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Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2022

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Prepaid insurance	$	7,599	$	6,929
Other current assets		7,920		5,320
Prepaid expenses and other current assets	$	15,519	$	12,249

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Restricted Cash

6 Months Ended

Jun. 30, 2022

Restricted Cash

Restricted Cash

5. Restricted Cash

Restricted cash reflects pledged cash deposited into savings accounts that is used as security primarily for fulfillment centers and office space leases.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts reported in the Consolidated Statements of Cash Flows:

	June 30,		December 31,
	2022		2021
	(in thousands)
Cash and cash equivalents	$	54,028	$	82,160
Restricted cash included in Prepaid expenses and other current assets		369		608
Restricted cash included in Other noncurrent assets		1,069		829
Total cash, cash equivalents, and restricted cash	$	55,466	$	83,597
	June 30,		December 31,
	2021		2020
	(in thousands)
Cash and cash equivalents	$	50,990	$	44,122
Restricted cash included in Prepaid expenses and other current assets		536		610
Restricted cash included in Other noncurrent assets		903		1,110
Total cash, cash equivalents, and restricted cash	$	52,429	$	45,842

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2022

Property and Equipment, Net

Property and Equipment, Net

6. Property and Equipment, Net

Property and equipment, net consists of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Computer equipment	$	12,078	$	11,556
Capitalized software		26,730		24,163
Fulfillment equipment		51,741		52,058
Furniture and fixtures		2,727		2,730
Leasehold improvements		32,825		32,507
Buildings(1)		114,877		114,877
Construction in process(2)		1,317		1,746
Property and equipment, gross		242,295		239,637
Less: accumulated depreciation and amortization		(141,898)		(131,282)
Property and equipment, net	$	100,397	$	108,355

(1) Buildings includes a build-to-suit lease arrangement in Linden, New Jersey where the Company is considered the owner for accounting purposes, and as of June 30, 2022 and December 31, 2021, contained $31.3 million of the capitalized fair value of the building, $80.8 million of costs incurred directly by the Company relating to this arrangement, and $2.8 million of capitalized interest for related construction projects. The Company capitalized the cost of interest for the related construction projects based on the applicable capitalization rate for the project.

(2) Construction in process includes all costs capitalized related to projects that have not yet been placed in service.

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Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2022

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Accrued compensation	$	11,190	$	11,490
Accrued credits and refunds reserve		1,282		1,258
Accrued marketing expenses		3,933		7,095
Accrued shipping expenses		2,114		1,344
Accrued workers' compensation reserve		4,352		3,358
Other current liabilities		6,636		7,406
Accrued expenses and other current liabilities	$	29,507	$	31,951

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Deferred Revenue

6 Months Ended

Jun. 30, 2022

Deferred Revenue

Deferred Revenue

8. Deferred Revenue

Deferred revenue consists of the following:

	June 30,		December 31,
	2022		2021
	(In thousands)
Cash received prior to fulfillment	$	2,727	$	4,861
March Sponsorship Gift Cards		8,558		—
Gift cards, prepaid orders, and other		2,023		3,097
Deferred revenue	$	13,308	$	7,958

Under ASC 606, Revenue from Contracts with Customers, the Company has two types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased, which are included in Deferred revenue on the Consolidated Balance Sheets, and are recognized as revenue upon transfer of control of its products, and (ii) unredeemed gift cards and other prepaid orders, which are included in Deferred revenue on the Consolidated Balance Sheets, and are recognized as revenue when gift cards are redeemed and the products are delivered. Certain gift cards are not expected to be redeemed, also known as breakage, and are recognized as revenue over the expected redemption period, subject to requirements to remit balances to governmental agencies.

Contractual liabilities included in Deferred revenue on the Consolidated Balance Sheets were $13.3 million and $8.0 million as of June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 2022, the Company recognized $6.5 million to Net revenue from the Deferred revenue as of December 31, 2021.

See Note 13 for further information regarding the March Sponsorship Gift Cards.

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Debt

6 Months Ended

Jun. 30, 2022

Debt

Debt

9. Debt

2020 and 2021 Term Loans

On October 16, 2020, the Company entered into a financing agreement which provided for a senior secured term loan in the aggregate principal amount of $35.0 million (the “2020 Term Loan”). The 2020 Term Loan bore interest at a rate equal to LIBOR (subject to a 1.50% floor) plus 8.00% per annum, with the principal amount repayable in equal quarterly installments of $875,000 through December 31, 2022, and the remaining unpaid principal amount of the 2020 Term Loan due on March 31, 2023.

On May 5, 2021 (the “closing date”), the Company amended the financing agreement (the “Amendment”), which modified certain provisions of the financing agreement, such as increasing the interest rate margin on the 2020 Term Loan by 1.00% per annum, resulting in the 2020 Term Loan bearing interest, from and after the closing date, at a rate equal to LIBOR (subject to a 1.50% floor) plus 9.00% per annum. In addition, the Amendment provided for a $5.0

million term loan (the “2021 Term Loan”) that was funded into an escrow account and subsequently released in full from the escrow account to the lenders upon the Company’s completion of an underwritten public offering in June 2021.

The Company evaluated the Amendment under ASC 470-50 regarding the modification of an existing debt instrument, which states that if the modification of the terms of an existing debt agreement is considered substantial, the transaction shall be accounted for as an extinguishment, with the amended debt instrument then initially recorded at fair value. The Company concluded that the modification was considered substantial, and qualified for extinguishment accounting under such guidance. Accordingly, the Company recorded a $4.1 million extinguishment loss in the Consolidated Statements of Operations, which consisted of (i) a $4.6 million loss related to the contemporaneous issuance of the Blue Torch warrant obligation, as discussed below, and (ii) a $0.1 million loss related to fees paid on behalf of the lender, which were partially offset by (iii) a $0.6 million gain related to the difference between the fair value of the modified debt instrument and the net carrying value of the debt immediately before extinguishment.

The 2020 Term Loan was repaid in full on May 5, 2022 with the proceeds of the senior secured notes issued under the note purchase agreement described below.

Blue Torch Warrant Obligation

In connection with the Amendment, the Company agreed to prospectively grant warrants (the “Blue Torch warrant obligation”) to the lenders. Under the terms of the Blue Torch warrant obligation, so long as the 2020 Term Loan remained outstanding, on the first day of each quarter beginning on July 1, 2021, the Company issued a warrant to the lenders to purchase at an exercise price of $0.01 per share such number of shares of Class A common stock of the Company as equaled 0.50% of the then outstanding shares of common stock of the Company, on a fully-diluted basis.

The Blue Torch warrant obligation was accounted for in accordance with ASC 815-40, Contracts in an Entity’s Own Equity, as a liability recognized at fair value as of the closing date, due to certain settlement provisions within the corresponding warrant obligation provisions under the financing agreement that did not meet the criteria to be classified in stockholders’ equity. The Blue Torch warrant obligation was remeasured to fair value at each balance sheet date, with changes in fair value recorded in Other income (expense), net in the Consolidated Statements of Operations. The Blue Torch warrant obligation was terminated within the termination of the Company’s financing agreement, as discussed below.

Note Purchase Agreement and Financing Agreement Transaction

On May 5, 2022 (the “issue date”), the Company entered into a Note Purchase and Guarantee Agreement (the “note purchase agreement”), which provides for, among other things, the issuance of $30.0 million in aggregate principal amount of senior secured notes due May 5, 2027 (the “senior secured notes”) at a purchase price equal to 94.00% thereof. The proceeds of the senior secured notes were used, together with cash on hand, to repay in full the outstanding amount under the 2020 Term Loan and pay fees and expenses in connection with the transactions contemplated by the note purchase agreement. The Company subsequently terminated its financing agreement, effective as of the issue date, which also resulted in the termination of the Blue Torch warrant obligation.

The Company evaluated the termination of the financing agreement under ASC 470-50 regarding the extinguishment of debt, which states that the difference between the reacquisition price and the net carrying amount of the extinguished debt shall be recognized in the current period as an extinguishment gain or loss. Accordingly, the Company recorded a $0.7 million extinguishment gain in the Consolidated Statements of Operations, which consisted of (i) a $2.6 million gain related to the allocation of the reacquisition price between the 2020 Term Loan and the Blue Torch warrant obligation, as discussed below, partially offset by (ii) a $0.9 million loss related to the 2020 Term Loan prepayment fee, (iii) a $0.9 million loss related to the derecognition of unamortized debt issuance costs, and (iv) a $0.1 million loss related to legal and consulting fees incurred.

In addition, ASC 470-50 states that if upon extinguishment of debt the parties also exchange unstated (or stated) rights or privileges, the portion of the consideration exchanged allocable to such unstated (or stated) rights or privileges shall be given appropriate accounting recognition. As such, the Company allocated a portion of the reacquisition price to

the exchange of the Blue Torch warrant obligation, which resulted in a $0.2 million gain recorded in Other income (expense), net in the Consolidated Statements of Operations upon its derecognition.

Upon receiving a minimum specified bond rating after the issue date, as specified within the terms of the note purchase agreement, the senior secured notes bear interest at a rate equal to 8.875% per annum, payable in arrears on June 30 and December 31 of each calendar year. The senior secured notes will amortize semi-annually in equal installments of $1.5 million beginning on December 31, 2025, with the remaining unpaid principal amount of the senior secured notes due on May 5, 2027.

The note purchase agreement contains two financial maintenance covenants:

• a minimum liquidity covenant of:

i. for any date ending prior to or ending on June 30, 2022, including those within required cash flow forecasts provided to the noteholders, $15.0 million;

ii.for any date thereafter, including those within required cash flow forecasts provided to the noteholders:

• $15.0 million if the most recent Asset Valuation (as defined in the note purchase agreement) is greater than $25.0 million;

• $20.0 million if the most recent Asset Valuation is greater than $20.0 million but less than $25.0 million; or

• $25.0 million if the most recent Asset Valuation is less than or equal to $20.0 million, or is as of yet uncompleted; and

• a covenant requiring a minimum Asset Coverage Ratio (as defined in the note purchase agreement) of at least 1.25 to 1.00.

As of the date of this Quarterly Report on Form 10-Q, the Company’s initial Asset Valuation has not been completed, with the minimum liquidity covenant therefore currently set at $25.0 million. Subsequent to the initial report, the Asset Valuation is required to be provided to the noteholders no later than 30 days after June 30 and December 31 of each fiscal year.

The Company has also agreed to use commercially reasonable efforts to cause 90% of the packaging for its meal kit boxes to be recyclable, reusable, or compostable (the “ESG KPI Goal”). If the Company fails to achieve the ESG KPI Goal prior to the date on which the senior secured notes are due, the Company will be required to pay a fee equal to 1% of the principal amount of the senior secured notes.

The borrower under the note purchase agreement is the Company’s wholly-owned subsidiary, Blue Apron, LLC. The obligations under the note purchase agreement are guaranteed by Blue Apron Holdings, Inc. and its subsidiaries other than the borrower, and secured by substantially all of the assets of the borrower and the guarantors. The note purchase agreement contains additional restrictive covenants and affirmative and financial reporting covenants restricting the Company and the Company’s subsidiaries’ activities. Restrictive covenants include limitations on the incurrence of indebtedness and liens, restrictions on affiliate transactions, restrictions on the sale or other disposition of collateral, and limitations on dividends and stock repurchases.

As of June 30, 2022, the Company was in compliance with all of the covenants under the note purchase agreement.

In connection with the note purchase agreement, the Company capitalized $2.9 million in deferred financing costs in Long-term debt, which are being amortized using the effective interest method over the life of the debt, in accordance with ASC 835-30, Imputation of Interest. The following table summarizes the presentation of the Company’s debt balances in the Consolidated Balance Sheets as of the dates indicated below:

	Senior secured notes		2020 Term Loan		Debt issuance costs, net		Net
	(In thousands)
June 30, 2022
Current portion of long-term debt	$	—	$	—	$	—	$	—
Long-term debt		30,000		—		(2,783)		27,217
Total	$	30,000	$	—	$	(2,783)	$	27,217
December 31, 2021
Current portion of long-term debt	$	—	$	3,500	$	—	$	3,500
Long-term debt		—		27,125		(1,239)		25,886
Total	$	—	$	30,625	$	(1,239)	$	29,386

Facility Financing Obligation

As of June 30, 2022 and December 31, 2021, the Company had a facility financing obligation of $35.8 million and $35.9 million, respectively, related to the leased facility in Linden, New Jersey under the build-to-suit accounting guidance.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies

Commitments and Contingencies

10. Commitments and Contingencies

The Company records accruals for loss contingencies associated with legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. If the Company determines that a loss is reasonably possible, the Company discloses the matter, and, if estimable, the amount or range of the possible loss in the notes to the Consolidated Financial Statements.

In addition, from time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of such litigation and claims cannot be predicted with certainty, the Company currently believes that there are no ordinary course matters that will have a material adverse effect on its business, operating results, financial conditions, or cash flows.

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Stockholders' Equity (Deficit)

6 Months Ended

Jun. 30, 2022

Stockholders' Equity (Deficit)

Stockholders' Equity (Deficit)

11. Stockholders’ Equity (Deficit)

April 2022 Private Placements

On April 29, 2022, the Company entered into the RJB April 2022 Purchase Agreement, which provided for, among other things, 3,333,333 shares of Class A common stock for an aggregate purchase price of $40.0 million (or $12.00 per share). Long Live Bruce, LLC, an affiliate of Joseph N. Sanberg, was assigned RJB’s rights to 1,666,667 shares of Class A common stock for an aggregate purchase price of $20.0 million under the RJB April 2022 Private Placement Agreement, which was issued and sold concurrently with the execution of the purchase agreement (the “first closing”). The remainder of the Class A common shares under the RJB April 2022 Private Placement Agreement were to be issued and sold under a second closing, initially expected to close by May 30, 2022 or such other date as agreed to by the parties.

In addition, on April 29, 2022, the Company entered into a purchase agreement with Linda Findley (the “Findley April 2022 Private Placement”), a director of the Company and its President and Chief Executive Officer, under which the Company agreed to issue and sell to Ms. Findley in a separate private placement, which closed concurrently with the execution of the first closing, 41,666 shares of Class A common stock for an aggregate purchase price of $0.5 million (or $12.00 per share).

The first closing of the RJB April 2022 Private Placement and the Findley April 2022 Private Placement (collectively, the “April 2022 Private Placements”) resulted in $20.1 million of proceeds, net of issuance costs.

On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase, in lieu of the remaining shares to be issued under the second closing, 10,000,000 shares of Class A common stock for an aggregate purchase price of $50.0 million (or $5.00 per share), as well as agreeing to extend the date of the second closing to on or before August 31, 2022. The Company expects to invest these proceeds in its long-term growth plan, or for general corporate purposes. The Company may use up to $25.0 million for strategic purposes aimed at enhancing shareholder value, including exploring share buybacks. RJB’s obligation to complete the second closing is not subject to closing conditions, and Joseph N. Sanberg has personally guaranteed fulfillment of RJB’s obligation to complete the second closing.

February 2022 Private Placement

On February 14, 2022, the Company entered into a purchase agreement with RJB, an affiliate of Joseph N. Sanberg, under which the Company agreed to issue and sell to RJB units consisting of Class A common stock and warrants to purchase shares of Class A common stock in a private placement (the “February 2022 Private Placement”) which closed concurrently with the execution of the purchase agreement for an aggregate purchase price of $5.0 million (or $14.00 per unit). In the aggregate, RJB received (i) 357,143 shares of Class A common stock, and (ii) warrants to purchase 500,000 shares of Class A common stock at exercise prices of $15.00 per share, $18.00 per share, and $20.00 per share, resulting in $4.8 million of proceeds, net of issuance costs.

The shares of Class A common stock and warrants were issued separately and constitute separate securities. The Company conducted an assessment of the classification of the warrants issued in the February 2022 Private Placement and, based on their terms, concluded the warrants were equity-classified. Accordingly, the net proceeds were recorded within Additional paid-in capital.

Each equity-classified warrant issued by the Company has a term of seven years from the date of issuance. Each such warrant may only be exercised for cash, except in connection with certain fundamental transactions, and no fractional shares will be issued upon exercise of the warrants. The warrants are non-transferable, except in limited circumstances, and have not been and will not be listed or otherwise trade on any stock exchange. The number of shares issuable upon exercise of the warrants and the applicable exercise prices is subject to adjustment upon the occurrence of certain events.

As of June 30, 2022, the equity-classified warrants issued by the Company were as follows:

	Exercise Price	Issued	Exercised	Outstanding as of June 30, 2022
$	15.00	6,525,714	—	6,525,714
$	18.00	3,262,857	—	3,262,857
$	20.00	1,631,429	—	1,631,429

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Share-based Compensation

6 Months Ended

Jun. 30, 2022

Share-based Compensation

Share-based Compensation

12. Share-based Compensation

The Company recognized share-based compensation for share-based awards in Cost of goods sold, excluding depreciation and amortization, and Product, technology, general and administrative expenses as follows:

	Three Months Ended
	June 30,
	2022		2021
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	-	$	14
Product, technology, general and administrative		1,704		3,132
Total share-based compensation	$	1,704	$	3,146

	Six Months Ended
	June 30,
	2022		2021
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	2	$	30
Product, technology, general and administrative		3,875		5,435
Total share-based compensation	$	3,877	$	5,465

In February 2022, the Company granted 247,161 shares of performance-based restricted stock units of its Class A common stock to certain employees, including the Company’s executive officers. Such units are subject to vesting conditions that are tied to the performance of the Company's stock price relative to the performance of a peer group of publicly traded companies’ stock price over a performance period beginning February 25, 2022 through February 25, 2025. The Company utilized the Monte Carlo simulation valuation model to value the grant as it was determined to include a market condition. The total grant date fair value was $1.3 million, and will be recognized on a straight-line basis over the performance period of three years.

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Related Party Transactions

6 Months Ended

Jun. 30, 2022

Related Party Transactions

Related Party Transactions

13. Related Party Transactions

Due to their status as beneficial owners of more than 10 percent (10%) of the voting power of the outstanding capital stock of the Company, Joseph N. Sanberg and his affiliates meet the definition of “related parties” per ASC 850, Related Party Disclosures.

Feeding America Bulk Sale

On June 23, 2022, the Company entered into a purchase agreement with Feeding America for a bulk purchase of meal kit boxes and other bulk product items (the “Feeding America bulk sale”) for an aggregate net purchase price of $10.0 million, funded by a donation from an affiliate of Joseph N. Sanberg.

Gift Card Sponsorship Agreements

On March 11, 2022, the Company entered into a gift card sponsorship agreement (the “March Sponsorship Gift Cards”) with an affiliate of Joseph N. Sanberg, pursuant to which such affiliate agreed to pay the Company a $9.0 million net sponsorship fee to support a marketing program through which the Company would distribute gift cards, at the Company’s sole discretion, in order to support its growth strategy.

On May 5, 2022, the Company entered into the May Sponsorship Gift Cards Agreement with an affiliate of Joseph N. Sanberg, pursuant to which such affiliate agreed to pay the Company a $20.0 million net sponsorship fee to support a marketing program through which the Company will distribute gift cards, at the Company’s sole discretion, in order to support its growth strategy. On August 7, 2022, the Company amended the May Sponsorship Gift Cards Agreement to extend the funding date to on or before August 31, 2022, and pursuant to which, Joseph N. Sanberg personally guaranteed his affiliate’s obligation. However, as the Company concluded the contract did not meet the

collectability criterion under ASC 606, Revenue from Contracts with Customers, as of the date of this Quarterly Report on Form 10-Q, the May Sponsorship Gift Cards were not recognized within the Consolidated Financial Statements.

ASC 105, Generally Accepted Accounting Principles (“ASC 105”), describes the decision-making framework when no guidance exists in GAAP for a particular transaction. Specifically, ASC 105 instructs companies to look for guidance for a similar transaction within GAAP and apply that guidance by analogy.

While these agreements are not considered contracts with a customer based on the terms thereof, the Company evaluated the terms of the agreements and, as these services are the output of the Company’s ordinary activities, has analogized to ASC 606, Revenue from Contracts with Customers, and more specifically, the recognition of the Company’s unredeemed gift cards and other prepaid orders. See Note 2 to the Consolidated Financial Statements of the Annual Report on Form 10-K for a description of the Company’s revenue recognition accounting policy.

Sustainability and Carbon Credit Agreement

On March 31, 2022, the Company entered into a Sustainability and Carbon Credit Agreement (the “Sustainability Agreement”) with an affiliate of Joseph N. Sanberg. Under the terms of the agreement, the Company purchased and subsequently retired $3.0 million of carbon offsets, which were recognized in Product, technology, general and administrative expenses during the six months ended June 30, 2022.

Such affiliate also performed the assessment of the Company’s 2021 annual carbon footprint that provided it with the basis for determining the amount of carbon offsets the Company needed to purchase. The fee for these services was waived as a condition of entering into the Sustainability Agreement.

On June 30, 2022, the Company entered into a statement of work under the Sustainability Agreement, through which the affiliate transferred to the Company a sufficient amount of carbon offsets for its estimated 2023 and 2024 emissions based upon its 2021 annual carbon footprint, for a purchase price of $6.0 million, which will be paid in twenty-four equal monthly installments beginning on July 31, 2022.

2022 Private Placements

On April 29, 2022, the Company entered into respective purchase agreements with RJB and Linda Findley, a director of the Company and its President and Chief Executive Officer, under which the Company agreed to issue and sell to RJB and Ms. Findley, respectively, shares of Class A common stock for respective aggregate purchase prices of $40.0 million and $0.5 million (or $12.00 per unit). Of the $40.0 million of Class A common stock purchased by RJB under the April Private Placements, $20.0 million closed concurrently with the execution of the purchase agreement. On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase from the Company (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total, as well as agreeing to extend the date of the second closing to on or before August 31, 2022.

On February 14, 2022, the Company entered into a purchase agreement with RJB, under which the Company agreed to issue and sell to RJB units of Class A common stock and warrants to purchase shares of Class A common stock in the February 2022 Private Placement, for an aggregate purchase price of $5.0 million (or $14.00 per unit).

See Note 11 for further discussion of the April 2022 Private Placements and February 2022 Private Placement.

The following table summarizes the composition and amounts of the transactions in the Company’s Consolidated Statements of Operations involving its related parties:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2022		2021		2022		2021
	(In thousands)
Net revenue:
Feeding America bulk sale	$	10,000	$	-	$	10,000	$	-
March Sponsorship Gift Cards	$	442	$	-	$	442	$	-
Cost of goods sold, excluding depreciation and amortization	$	5,468	$	-	$	5,468	$	-
Product, technology, general and administrative	$	3,000	$	-	$	3,000	$	-

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Earnings per Share

6 Months Ended

Jun. 30, 2022

Earnings per Share

Earnings per Share

14. Earnings per Share

Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted-average number of common shares, including potential dilutive common shares assuming the dilutive effect of outstanding common stock options, restricted stock units, and warrants. For periods in which the Company has reported net loss, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

	Three Months Ended June 30,
	2022				2021
	Class A		Class B		Class A		Class B
(In thousands, except share and per-share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(23,123)	$	—	$	(15,245)	$	(3,342)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic		34,073,695		—		15,482,841		3,393,759
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted		34,073,695		—		15,482,841		3,393,759
Net income (loss) per share attributable to common stockholders—basic (1)	$	(0.68)	$	—	$	(0.98)	$	(0.98)
Net income (loss) per share attributable to common stockholders—diluted (1)	$	(0.68)	$	—	$	(0.98)	$	(0.98)

	Six Months Ended June 30,
	2022				2021
	Class A		Class B		Class A		Class B
(In thousands, except share and per-share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(61,572)	$	—	$	(27,942)	$	(6,366)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic		33,185,992		—		14,994,302		3,416,427
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted		33,185,992		—		14,994,302		3,416,427
Net income (loss) per share attributable to common stockholders—basic (1)	$	(1.86)	$	—	$	(1.86)	$	(1.86)
Net income (loss) per share attributable to common stockholders—diluted (1)	$	(1.86)	$	—	$	(1.86)	$	(1.86)

(1) Net income (loss) per share attributable to common stockholders — basic and net income (loss) per share attributable to common stockholders — diluted may not recalculate due to rounding.

The following have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders as their effect would have been antidilutive:

	Three Months Ended June 30,
	2022		2021
	Class A	Class B	Class A	Class B
Stock options	32,583	—	—	49,044
Restricted stock units	2,523,956	—	2,485,995	—
Warrants	11,420,000	—	—	—
Total anti-dilutive securities	13,976,539	—	2,485,995	49,044

	Six Months Ended June 30,
	2022		2021
	Class A	Class B	Class A	Class B
Stock options	34,267	—	—	50,462
Restricted stock units	2,376,497	—	2,241,522	—
Warrants	11,420,000	—	—	—
Total anti-dilutive securities	13,830,764	—	2,241,522	50,462

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Measurements

Fair Value Measurements

15. Fair Value Measurements

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data is not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.

The fair value hierarchy consists of the following three levels:

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

The Company uses observable market data when available, and minimizes the use of unobservable inputs when determining fair value.

The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3):

	June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash and cash equivalents:
Money market accounts	$	—	$	—	$	—	$	—
Total assets measured at fair value	$	—	$	—	$	—	$	—
Liabilities:
Warrant obligation	$	—	$	—	$	—	$	—
Other noncurrent liabilities:
Warrant obligation		—		—		—		—
Total liabilities measured at fair value	$	—	$	—	$	—	$	—

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash and cash equivalents:
Money market accounts	$	2,635	$	—	$	—	$	2,635
Total assets measured at fair value	$	2,635	$	—	$	—	$	2,635
Liabilities:
Warrant obligation	$	—	$	—	$	8,001	$	8,001
Other noncurrent liabilities:
Warrant obligation		—		—		1,588		1,588
Total liabilities measured at fair value	$	—	$	—	$	9,589	$	9,589

Money market accounts

Money market accounts are classified within Level 1 of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts approximates fair value due to their short-term maturities. The Company closed its money market accounts during the three months ended June 30, 2022.

Warrant obligation

The Blue Torch warrant obligation issued in conjunction with the Amendment, as discussed in Note 9, was accounted for in accordance with ASC 815-40, Contracts in an Entity’s Own Equity, as a liability recognized at fair value, and is remeasured as of each balance sheet date with changes in fair value recorded in Other income (expense), net in the Consolidated Statements of Operations. The amount of each warrant to be issued under the obligation set forth in the financing agreement was based upon 0.50% of the then-outstanding shares of the Company’s common stock on a fully-diluted basis on the first day of each quarter, beginning on July 1, 2021, so long as the 2020 Term Loan remained

outstanding. As such, the fair value of the Blue Torch warrant obligation was calculated using the estimated amount of warrants to be issued over the life of the financing agreement multiplied by the price of the Company’s stock as of the closing date, less $0.01 per share to represent each warrant’s exercise price. The estimated amount of shares to be issued was derived from the Company’s estimate of shares of the Company’s common stock on a fully-diluted basis over the life of the financing agreement.

On May 5, 2022, the Company fully repaid the 2020 Term Loan with the proceeds of its senior secured notes and cash on hand and terminated its financing agreement effective as of the same date, which also resulted in the termination of the warrant obligation. As of May 5, 2022, all warrants that had been issued under the Blue Torch warrant obligation had been exercised in full, resulting in no liability-classified warrants outstanding. See Note 9 for further discussion.

The following table summarizes the changes of the Blue Torch warrant obligation as of June 30, 2022 and December 31, 2021:

	Balance as of December 31, 2021		Loss (gain) on changes in stock price		Loss (gain) on changes in estimated common stock on a fully-diluted basis		Exercise of warrants		Derecognition		Balance as of June 30, 2022
		(In thousands)
Warrant obligation	$	9,589	$	(1,971)	$	153	$	(5,050)	$	(2,721)	$	-

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Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events

Subsequent Events

16. Subsequent Events

On August 7, 2022, the Company amended the RJB April 2022 Purchase Agreement, pursuant to which RJB agreed to purchase from the Company (i) the 1,666,667 shares of Class A common stock under the initial RJB April 2022 Purchase Agreement at a price of $5.00 per share, instead of $12.00 per share, and (ii) an additional 8,333,333 shares of Class A common stock at a price of $5.00 per share, for an aggregate purchase price of $50.0 million and 10,000,000 shares of Class A common stock in total, as well as agreeing to extend the date of the second closing to on or before August 31, 2022. The Company expects to invest these proceeds in its long-term growth plan, or for general corporate purposes. The Company may use up to $25.0 million for strategic purposes aimed at enhancing shareholder value, including exploring share buybacks. RJB’s obligation to complete the second closing is not subject to closing conditions, and, pursuant to such amendment, Joseph N. Sanberg has agreed to personally guarantee the payment of the aggregate purchase price of $50.0 million.

In addition, on August 7, 2022, the Company amended the May Sponsorship Gift Cards Agreement to extend the funding date to on or before August 31 2022, and pursuant to which, Joseph N. Sanberg personally guaranteed his affiliate’s obligation.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The unaudited interim Consolidated Financial Statements (the “Consolidated Financial Statements”) have been prepared on the same basis as the audited Consolidated Financial Statements, and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2022 and December 31, 2021, results of operations for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. These unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2022 (the “Annual Report”). There have been no material changes in the Company's significant accounting policies from those that were disclosed in Note 2, Summary of Significant Accounting Policies, included in the Annual Report, except those additional significant policies as described within the accompanying notes to the Consolidated Financial Statements.

The accompanying Consolidated Financial Statements include the accounts of Blue Apron Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its Consolidated Financial Statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”).

Use of Estimates

Use of Estimates

In preparing its Consolidated Financial Statements in accordance with GAAP, the Company is required to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, costs, and expenses, and disclosure of contingent assets and liabilities which are reported in the Consolidated Financial Statements and accompanying disclosures. The accounting estimates that require the most difficult and subjective judgments include revenue recognition, inventory valuation, leases, the fair value of share-based awards, the fair value of the Blue Torch warrant obligation, recoverability of long-lived assets, and the recognition and measurement of contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from the Company’s estimates and assumptions.

Emerging Growth and Smaller Reporting Company Status

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act. This classification has allowed the Company to elect to take advantage of the extended transition period afforded for the implementation of new or revised accounting standards. The Company expects to lose its emerging growth company status on December 31, 2022, and as a result, will adopt all accounting pronouncements currently deferred under the emerging growth company election according to public company standards beginning with its Annual Report on Form 10-K for the year ending December 31, 2022, including interim period disclosures within that filing. The adoption dates for the new accounting pronouncements disclosed below have been presented accordingly.

Smaller Reporting Company Status

The Company is a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, and therefore qualifies for reduced disclosure requirements for smaller reporting companies.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued its standard on lease accounting, Accounting Standards Update No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases. Subsequent to February 2016, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments, ASU No. 2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, ASU No. 2019-01, Leases (Topic 842): Codification Improvements, ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, to improve and clarify certain aspects of ASU No. 2016-02, as well as to defer its effective date for certain entities, and ASU No. 2021-05, Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments. For the Company, the new standard is effective for annual periods beginning January 1, 2022, and interim periods beginning January 1, 2023. Upon adoption of this standard, the Company expects to recognize, on a discounted basis, its minimum commitments under non-cancelable operating leases on the Consolidated Balance Sheets resulting in the recording of

right-of-use assets and lease obligations. The Company is currently evaluating any additional impacts this guidance will have on its Consolidated Financial Statements.

In December 2019, the FASB issued Accounting Standards Update No. 2019-12 (“ASU 2019-12”), Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The standard is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well as improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For the Company, the amendments in ASU 2019-12 are effective for annual periods beginning January 1, 2022, and interim periods beginning January 1, 2023. The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements.

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Inventories, Net (Tables)

6 Months Ended

Jun. 30, 2022

Inventories, Net

Summary of inventories, net

	June 30,		December 31,
	2022		2021
	(In thousands)
Fulfillment	$	2,721	$	1,879
Product		26,135		23,110
Inventories, net	$	28,856	$	24,989

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Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2022

Prepaid Expenses and Other Current Assets

Summary of prepaid expenses and other current assets

	June 30,		December 31,
	2022		2021
	(In thousands)
Prepaid insurance	$	7,599	$	6,929
Other current assets		7,920		5,320
Prepaid expenses and other current assets	$	15,519	$	12,249

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Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2022

Restricted Cash

Reconciliation of cash between balance sheets and statements of cash flows

	June 30,		December 31,
	2022		2021
	(in thousands)
Cash and cash equivalents	$	54,028	$	82,160
Restricted cash included in Prepaid expenses and other current assets		369		608
Restricted cash included in Other noncurrent assets		1,069		829
Total cash, cash equivalents, and restricted cash	$	55,466	$	83,597
	June 30,		December 31,
	2021		2020
	(in thousands)
Cash and cash equivalents	$	50,990	$	44,122
Restricted cash included in Prepaid expenses and other current assets		536		610
Restricted cash included in Other noncurrent assets		903		1,110
Total cash, cash equivalents, and restricted cash	$	52,429	$	45,842

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2022

Property and Equipment, Net

Summary of property and equipment

	June 30,		December 31,
	2022		2021
	(In thousands)
Computer equipment	$	12,078	$	11,556
Capitalized software		26,730		24,163
Fulfillment equipment		51,741		52,058
Furniture and fixtures		2,727		2,730
Leasehold improvements		32,825		32,507
Buildings(1)		114,877		114,877
Construction in process(2)		1,317		1,746
Property and equipment, gross		242,295		239,637
Less: accumulated depreciation and amortization		(141,898)		(131,282)
Property and equipment, net	$	100,397	$	108,355

(1) Buildings includes a build-to-suit lease arrangement in Linden, New Jersey where the Company is considered the owner for accounting purposes, and as of June 30, 2022 and December 31, 2021, contained $31.3 million of the capitalized fair value of the building, $80.8 million of costs incurred directly by the Company relating to this arrangement, and $2.8 million of capitalized interest for related construction projects. The Company capitalized the cost of interest for the related construction projects based on the applicable capitalization rate for the project.

(2) Construction in process includes all costs capitalized related to projects that have not yet been placed in service.

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Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2022

Accrued Expenses and Other Current Liabilities

Summary of accrued expenses and other current liabilities

	June 30,		December 31,
	2022		2021
	(In thousands)
Accrued compensation	$	11,190	$	11,490
Accrued credits and refunds reserve		1,282		1,258
Accrued marketing expenses		3,933		7,095
Accrued shipping expenses		2,114		1,344
Accrued workers' compensation reserve		4,352		3,358
Other current liabilities		6,636		7,406
Accrued expenses and other current liabilities	$	29,507	$	31,951

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Deferred Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Deferred Revenue

Summary of deferred revenue

	June 30,		December 31,
	2022		2021
	(In thousands)
Cash received prior to fulfillment	$	2,727	$	4,861
March Sponsorship Gift Cards		8,558		—
Gift cards, prepaid orders, and other		2,023		3,097
Deferred revenue	$	13,308	$	7,958

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Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt

Summary of presentation of debt balances

	Senior secured notes		2020 Term Loan		Debt issuance costs, net		Net
	(In thousands)
June 30, 2022
Current portion of long-term debt	$	—	$	—	$	—	$	—
Long-term debt		30,000		—		(2,783)		27,217
Total	$	30,000	$	—	$	(2,783)	$	27,217
December 31, 2021
Current portion of long-term debt	$	—	$	3,500	$	—	$	3,500
Long-term debt		—		27,125		(1,239)		25,886
Total	$	—	$	30,625	$	(1,239)	$	29,386

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Stockholders' Equity (Deficit) (Tables)

6 Months Ended

Jun. 30, 2022

Stockholders' Equity (Deficit)

Schedule of equity-classified warrants issued

	Exercise Price	Issued	Exercised	Outstanding as of June 30, 2022
$	15.00	6,525,714	—	6,525,714
$	18.00	3,262,857	—	3,262,857
$	20.00	1,631,429	—	1,631,429

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Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-based Compensation

Schedule of Share-based Compensation Cost

	Three Months Ended
	June 30,
	2022		2021
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	-	$	14
Product, technology, general and administrative		1,704		3,132
Total share-based compensation	$	1,704	$	3,146

	Six Months Ended
	June 30,
	2022		2021
	(In thousands)
Cost of goods sold, excluding depreciation and amortization	$	2	$	30
Product, technology, general and administrative		3,875		5,435
Total share-based compensation	$	3,877	$	5,465

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings per Share

Schedule of earnings per share

	Three Months Ended June 30,
	2022				2021
	Class A		Class B		Class A		Class B
(In thousands, except share and per-share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(23,123)	$	—	$	(15,245)	$	(3,342)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic		34,073,695		—		15,482,841		3,393,759
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted		34,073,695		—		15,482,841		3,393,759
Net income (loss) per share attributable to common stockholders—basic (1)	$	(0.68)	$	—	$	(0.98)	$	(0.98)
Net income (loss) per share attributable to common stockholders—diluted (1)	$	(0.68)	$	—	$	(0.98)	$	(0.98)

	Six Months Ended June 30,
	2022				2021
	Class A		Class B		Class A		Class B
(In thousands, except share and per-share data)
Numerator:
Net income (loss) attributable to common stockholders	$	(61,572)	$	—	$	(27,942)	$	(6,366)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—basic		33,185,992		—		14,994,302		3,416,427
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders—diluted		33,185,992		—		14,994,302		3,416,427
Net income (loss) per share attributable to common stockholders—basic (1)	$	(1.86)	$	—	$	(1.86)	$	(1.86)
Net income (loss) per share attributable to common stockholders—diluted (1)	$	(1.86)	$	—	$	(1.86)	$	(1.86)

(1) Net income (loss) per share attributable to common stockholders — basic and net income (loss) per share attributable to common stockholders — diluted may not recalculate due to rounding.

Summary of shares that are excluded from the computation of diluted net income (loss) per share attributable to common stockholders as their effect would have been antidilutive

	Three Months Ended June 30,
	2022		2021
	Class A	Class B	Class A	Class B
Stock options	32,583	—	—	49,044
Restricted stock units	2,523,956	—	2,485,995	—
Warrants	11,420,000	—	—	—
Total anti-dilutive securities	13,976,539	—	2,485,995	49,044

	Six Months Ended June 30,
	2022		2021
	Class A	Class B	Class A	Class B
Stock options	34,267	—	—	50,462
Restricted stock units	2,376,497	—	2,241,522	—
Warrants	11,420,000	—	—	—
Total anti-dilutive securities	13,830,764	—	2,241,522	50,462

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Measurements

Schedule of assets measured on a recurring basis

	June 30, 2022
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash and cash equivalents:
Money market accounts	$	—	$	—	$	—	$	—
Total assets measured at fair value	$	—	$	—	$	—	$	—
Liabilities:
Warrant obligation	$	—	$	—	$	—	$	—
Other noncurrent liabilities:
Warrant obligation		—		—		—		—
Total liabilities measured at fair value	$	—	$	—	$	—	$	—

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash and cash equivalents:
Money market accounts	$	2,635	$	—	$	—	$	2,635
Total assets measured at fair value	$	2,635	$	—	$	—	$	2,635
Liabilities:
Warrant obligation	$	—	$	—	$	8,001	$	8,001
Other noncurrent liabilities:
Warrant obligation		—		—		1,588		1,588
Total liabilities measured at fair value	$	—	$	—	$	9,589	$	9,589

Rollforward of fair value of Level 3 instruments

	Balance as of December 31, 2021		Loss (gain) on changes in stock price		Loss (gain) on changes in estimated common stock on a fully-diluted basis		Exercise of warrants		Derecognition		Balance as of June 30, 2022
		(In thousands)
Warrant obligation	$	9,589	$	(1,971)	$	153	$	(5,050)	$	(2,721)	$	-

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Summary of Significant Accounting Policies - Liquidity and Going Concern Evaluation (Details) - USD ($) $ / shares in Units, $ in Thousands							3 Months Ended				6 Months Ended
	Aug. 07, 2022	May 05, 2022	Apr. 29, 2022	Feb. 14, 2022	May 05, 2021	Oct. 16, 2020	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Significant Accounting Policies [Line Items]
Cash and cash equivalents							$ 54,028		$ 50,990		$ 54,028	$ 50,990	$ 82,160	$ 44,122
Long-term debt							27,200				27,200
Long-term debt							27,217				27,217		25,886
Less: current debt													3,500
Minimum liquidity balance											25,000
Proceeds from issuance of common stock, gross proceeds									21,144
Net losses							23,123	$ 38,449	$ 18,587	$ 15,721	61,572	34,308
Operating cash flows											(47,120)	$ (10,878)
Warrant exercise price (in dollars per share)					$ 0.01
Equity subject to warrant exercise (as a percent)					0.50%
Private Placement | Class A
Significant Accounting Policies [Line Items]
Share price			$ 12.00
April 2022 Private Placement | Class A
Significant Accounting Policies [Line Items]
Shares issued and sold			3,333,333
Proceeds from issuance of common stock, gross proceeds			$ 40,000
February 2022 Private Placement | Private Placement
Significant Accounting Policies [Line Items]
Proceeds from issuance of common stock, net of offering costs				$ 5,000
February 2022 Private Placement | Private Placement | Class A
Significant Accounting Policies [Line Items]
Shares issued and sold				357,143
Purchase agreement with RJB | Private Placement
Significant Accounting Policies [Line Items]
Proceeds from issuance of common stock, gross proceeds			20,000
Purchase agreement with Linda Findley | Private Placement | Class A
Significant Accounting Policies [Line Items]
Proceeds from issuance of common stock, gross proceeds			$ 500
Share price			$ 12.00
Gift Card Sponsorship Agreement with Aspiration Carbon Reduction
Significant Accounting Policies [Line Items]
Unredeemed gift cards sponsored		$ 20,000
Note Purchase and Guarantee Agreement
Significant Accounting Policies [Line Items]
Minimum asset coverage ratio		1.25%
Any date subsequent to June 30, 2022 | Note Purchase and Guarantee Agreement
Significant Accounting Policies [Line Items]
Minimum liquidity balance		$ 15,000
Performed Asset Valuation | Note Purchase and Guarantee Agreement
Significant Accounting Policies [Line Items]
Minimum liquidity balance		$ 25,000
Scenario, Plan | Purchase agreement with RJB | Private Placement | Class A
Significant Accounting Policies [Line Items]
Shares issued and sold			1,666,667
2020 Term Loan
Significant Accounting Policies [Line Items]
Long-term debt							27,217				27,217		29,386
Long-term debt							$ 27,217				$ 27,217		25,886
Less: current debt													$ 3,500
Face value of debt						$ 35,000
Margin added to variable rate (as a percent)						1.50%
Interest rate (as a percent)						8.00%
Warrant exercise price (in dollars per share)					$ 0.01
Equity subject to warrant exercise (as a percent)					0.50%
2021 Term Loan
Significant Accounting Policies [Line Items]
Face value of debt					$ 5,000
Margin added to variable rate (as a percent)					1.50%
Interest rate (as a percent)					9.00%
Subsequent Event | Purchase agreement with RJB | Private Placement
Significant Accounting Policies [Line Items]
Proceeds from issuance of common stock, gross proceeds	$ 50,000
Subsequent Event | Purchase agreement with RJB | Private Placement | Class A
Significant Accounting Policies [Line Items]
Shares issued and sold	10,000,000
Proceeds from issuance of common stock, gross proceeds	$ 50,000
Subsequent Event | Purchase Agreement with RJB Partners LLC, April 2022 | Private Placement | Class A
Significant Accounting Policies [Line Items]
Shares issued and sold	1,666,667
Share price	$ 12.00
Subsequent Event | Purchase Agreement with RJB Partners LLC, August 2022 | Private Placement | Class A
Significant Accounting Policies [Line Items]
Shares issued and sold	8,333,333
Proceeds from issuance of common stock, gross proceeds	$ 50,000
Share price	$ 5.00
Subsequent Event | Scenario, Plan | Purchase Agreement with RJB Partners LLC, April 2022 | Private Placement | Class A
Significant Accounting Policies [Line Items]
Shares issued and sold	1,666,667
Subsequent Event | Maximum. | Purchase agreement with RJB | Private Placement
Significant Accounting Policies [Line Items]
Proceeds from stock issuance, usage for strategic purpose	$ 25,000

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Inventories, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Inventories, Net
Fulfillment	$ 2,721	$ 1,879
Product	26,135	23,110
Inventories, net	$ 28,856	$ 24,989

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Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Prepaid Expenses and Other Current Assets
Prepaid insurance	$ 7,599	$ 6,929
Other current assets	7,920	5,320
Prepaid expenses and other current assets	$ 15,519	$ 12,249

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Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Restricted Cash
Cash and cash equivalents	$ 54,028	$ 82,160	$ 50,990	$ 44,122
Restricted cash included in Prepaid expenses and other current assets	$ 369	$ 608	$ 536	$ 610
Restricted Cash and Cash Equivalents, Asset, Statement of Financial Position [Extensible List]	Prepaid Expense and Other Assets, Current	Prepaid Expense and Other Assets, Current	Prepaid Expense and Other Assets, Current	Prepaid Expense and Other Assets, Current
Restricted cash included in Other noncurrent assets	$ 1,069	$ 829	$ 903	$ 1,110
Restricted Cash and Cash Equivalents, Noncurrent, Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent	Other Assets, Noncurrent	Other Assets, Noncurrent	Other Assets, Noncurrent
Total cash, cash equivalents, and restricted cash	$ 55,466	$ 83,597	$ 52,429	$ 45,842

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Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property and equipment, net
Computer equipment	$ 12,078	$ 11,556
Capitalized software	26,730	24,163
Fulfillment equipment	51,741	52,058
Furniture and fixtures	2,727	2,730
Leasehold improvements	32,825	32,507
Buildings	114,877	114,877
Construction in process	1,317	1,746
Property and equipment, gross	242,295	239,637
Less: accumulated depreciation and amortization	(141,898)	(131,282)
Property and equipment, net	100,397	108,355
Build-to-suit lease financings included in Buildings	31,300	31,300
Cost incurred to date	80,800	80,800
Capitalized interest to date	$ 2,800	$ 2,800

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Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Accrued expenses and other current liabilities
Accrued compensation	$ 11,190	$ 11,490
Accrued credits and refunds reserve	1,282	1,258
Accrued marketing expenses	3,933	7,095
Accrued shipping expenses	2,114	1,344
Accrued workers' compensation reserve	4,352	3,358
Other current liabilities	6,636	7,406
Accrued expenses and other current liabilities	$ 29,507	$ 31,951

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Deferred Revenue (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($) item	Dec. 31, 2021 USD ($)
Deferred Revenue
Cash received prior to fulfillment	$ 2,727	$ 4,861
March Sponsorship Gift Cards	8,558
Gift cards, prepaid orders, and other	2,023	3,097
Deferred revenue	$ 13,308	$ 7,958
Number of types of contractual liabilities | item	2
Deferred revenue recognized during the period	$ 6,500

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Debt (Details) - USD ($)					3 Months Ended		6 Months Ended
	May 05, 2022	Apr. 05, 2022	May 05, 2021	Oct. 16, 2020	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Debt instruments
Loss (gain) on extinguishment of debt	$ 700,000		$ 4,100,000		$ (650,000)	$ 4,089,000	$ (650,000)	$ 4,089,000
Warrant exercise price (in dollars per share)			$ 0.01
Equity subject to warrant exercise (as a percent)			0.50%
Current portion of long-term debt, net									$ 3,500,000
Long-term Debt, net					27,217,000		27,217,000		25,886,000
Long-term debt, net					27,200,000		27,200,000
Minimum liquidity balance							25,000,000.0
Gain loss on issuance of warrant obligation			$ 4,600,000
Gain (Loss) on fees paid on behalf of lender			100,000
Gain (Loss) on fair value adjustment of debt			$ 600,000
Gain (Loss) on prepayment fees	900,000
Gain (Loss) on derecognition of deferred financing fees	900,000
Gain (Loss) on legal and consulting fees	100,000
Gain (Loss) on allocation of reacquisition price to warrant obligation	$ 200,000
Note Purchase and Guarantee Agreement
Debt instruments
Minimum asset coverage ratio	1.25%
Note Purchase and Guarantee Agreement | Any Date After June 30, 2022 if Asset Valuation is Greater Than $25.0 million
Debt instruments
Minimum liquidity balance	$ 15,000,000.0
Note Purchase and Guarantee Agreement | Any Date After June 30, 2022 if Asset Valuation is Less Than or Equal to $20.0 million
Debt instruments
Minimum liquidity balance	25,000,000.0
2020 Term Loan
Debt instruments
Repayment of revolving credit facility				$ 875,000
Face value of debt				$ 35,000,000.0
Margin added to variable rate (as a percent)				1.50%
Interest rate (as a percent)				8.00%
Warrant exercise price (in dollars per share)			$ 0.01
Equity subject to warrant exercise (as a percent)			0.50%
Long term debt current, Gross									3,500,000
Debt issuance costs, net, current									(1,239,000)
Current portion of long-term debt, net									3,500,000
Long term debt noncurrent, Gross									27,125,000
Debt issuance costs, noncurrent, net					(2,783,000)		(2,783,000)
Long-term Debt, net					27,217,000		27,217,000		25,886,000
Long-term Debt, Gross									30,625,000
Debt issuance costs, net					(2,783,000)		(2,783,000)		(1,239,000)
Long-term debt, net					27,217,000		27,217,000		29,386,000
Gain (Loss) on allocation of reacquisition price to warrant obligation	$ 2,600,000
Maturities of Long-term Debt [Abstract]
Amount outstanding									$ 30,625,000
2021 Term Loan
Debt instruments
Face value of debt			$ 5,000,000.0
Margin added to variable rate (as a percent)			1.50%
Interest rate (as a percent)			9.00%
Increase in interest rate (as a percent)			1.00%
Senior secured notes
Debt instruments
Long term debt noncurrent, Gross					30,000,000		30,000,000
Long-term Debt, Gross					30,000,000		30,000,000
Maturities of Long-term Debt [Abstract]
Amount outstanding					$ 30,000,000		$ 30,000,000
Senior secured notes | Any Date Ending Prior on or Prior to June 30, 2022
Debt instruments
Minimum liquidity balance, subsequent period		$ 25,000,000.0
Senior secured notes | Note Purchase and Guarantee Agreement
Debt instruments
Percentage of purchase price	94.00%
Face value of debt	$ 30,000,000.0
Interest rate (as a percent)	8.875%
Minimum asset coverage ratio	1.25%
Percentage of Fee on failure to achieve ESG KPI Goal	1.00%
Percentage of ESG KPI Goal	90.00%
Periodic payment	$ 1,500,000
Senior secured notes | Note Purchase and Guarantee Agreement | Any Date Ending Prior on or Prior to June 30, 2022
Debt instruments
Minimum liquidity balance	15,000,000.0
Senior secured notes | Note Purchase and Guarantee Agreement | Any Date After June 30, 2022 if Asset Valuation is $20.0 million but Less than $25.0 million
Debt instruments
Minimum liquidity balance	$ 20,000,000.0

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Debt - Components, covenants, facility financing obligation (Details) - USD ($) $ in Thousands		6 Months Ended
	May 05, 2022	Jun. 30, 2022	Dec. 31, 2021
Debt instruments
Minimum liquidity balance		$ 25,000
Facility financing obligation		$ 35,832	$ 35,886
Senior secured notes
Debt instruments
Deferred financing costs in Long-term debt	$ 2,900

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Stockholders' Equity (Deficit) (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended
	Aug. 07, 2022	Apr. 29, 2022	Feb. 14, 2022	Jun. 30, 2021	Jun. 30, 2022	May 05, 2021
Class of Stock [Line Items]
Warrant exercise price (in dollars per share)						$ 0.01
Value of common stock, gross				$ 21,144
Exercise Price 15.00
Class of Stock [Line Items]
Warrant exercise price (in dollars per share)					$ 15.00
Exercise Price 18.00
Class of Stock [Line Items]
Warrant exercise price (in dollars per share)					18.00
Exercise Price 20.00
Class of Stock [Line Items]
Warrant exercise price (in dollars per share)					$ 20.00
Class A | Exercise Price 15.00
Class of Stock [Line Items]
Warrant exercise price (in dollars per share)			$ 15.00
Class A | Exercise Price 18.00
Class of Stock [Line Items]
Warrant exercise price (in dollars per share)			18.00
Class A | Exercise Price 20.00
Class of Stock [Line Items]
Warrant exercise price (in dollars per share)			$ 20.00
Purchase Agreement With RJB Partners LLC And Matthew Salzberg [Member] | February 2022 Private Placement
Class of Stock [Line Items]
Warrant term			7 years
Private Placement | February 2022 Private Placement
Class of Stock [Line Items]
Proceeds from issuance of common stock, gross proceeds			$ 5,000
Unit price			$ 14.00
Private Placement | Purchase agreement with RJB
Class of Stock [Line Items]
Value of common stock, gross		$ 20,000
Private Placement | Class A
Class of Stock [Line Items]
Share price		$ 12.00
Private Placement | Class A | February 2022 Private Placement
Class of Stock [Line Items]
Proceeds from issuance of stock, net of offering costs			$ 4,800
Issuance of common stock, net of offering costs (in shares)			357,143
Number of warrants			500,000
Private Placement | Class A | April 2022 Private Placement
Class of Stock [Line Items]
Issuance of common stock, net of offering costs (in shares)		3,333,333
Value of common stock, gross		$ 40,000
Share price		$ 12.00
Private Placement | Class A | Scenario, Plan | Purchase agreement with RJB
Class of Stock [Line Items]
Issuance of common stock, net of offering costs (in shares)		1,666,667
Purchase agreement with RJB | Class A | April 2022 Private Placement
Class of Stock [Line Items]
Issuance of common stock, net of offering costs (in shares)		1,666,667
Value of common stock, gross		$ 20,000
Purchase agreement with Linda Findley | April 2022 Private Placement
Class of Stock [Line Items]
Proceeds from issuance of stock, net of offering costs		20,100
Purchase agreement with Linda Findley | Class A | April 2022 Private Placement
Class of Stock [Line Items]
Proceeds from issuance of common stock, gross proceeds		$ 500
Unit price		$ 12.00
Issuance of common stock, net of offering costs (in shares)		41,666
Subsequent Event | Private Placement | Purchase agreement with RJB
Class of Stock [Line Items]
Value of common stock, gross	$ 50,000
Subsequent Event | Private Placement | Purchase agreement with RJB | Maximum.
Class of Stock [Line Items]
Proceeds from stock issuance, usage for strategic purpose	$ 25,000
Subsequent Event | Private Placement | Class A | Purchase agreement with RJB
Class of Stock [Line Items]
Issuance of common stock, net of offering costs (in shares)	10,000,000
Value of common stock, gross	$ 50,000

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Stockholders' Equity (Deficit) - Equity-classified warrants (Details) - $ / shares	6 Months Ended
	Jun. 30, 2022	May 05, 2021
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)		$ 0.01
Exercise Price 15.00
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)	$ 15.00
Issued	6,525,714
Outstanding	6,525,714
Exercise Price 18.00
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)	$ 18.00
Issued	3,262,857
Outstanding	3,262,857
Exercise Price 20.00
Class of Warrant or Right [Line Items]
Exercise price (in dollars per share)	$ 20.00
Issued	1,631,429
Outstanding	1,631,429

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Share-based Compensation - Expense and Assumptions (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation recognized		$ 1,704	$ 3,146	$ 3,877	$ 5,465
Performance-based restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted	247,161
Unrecognized share-based compensation, other than options	$ 1,300
Period of recognition of costs	3 years
Cost of goods sold, excluding depreciation and amortization
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation recognized			14	2	30
Product, technology, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation recognized		$ 1,704	$ 3,132	$ 3,875	$ 5,435

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Related Party Transactions (Details) $ / shares in Units, $ in Thousands								3 Months Ended	6 Months Ended
	Aug. 07, 2022 USD ($) $ / shares shares	Jun. 23, 2022 USD ($)	May 05, 2022 USD ($)	Apr. 29, 2022 USD ($) $ / shares	Mar. 31, 2022 USD ($)	Mar. 11, 2022 USD ($)	Feb. 14, 2022 USD ($) $ / shares	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)
Related Party Transaction [Line Items]
Value of common stock, gross								$ 21,144
Gift Card Sponsorship Agreement with Aspiration Carbon Reduction.
Related Party Transaction [Line Items]
Unredeemed gift cards sponsored			$ 20,000
Deferred revenue			$ 20,000
Private Placement | Purchase agreement with RJB
Related Party Transaction [Line Items]
Value of common stock, gross				$ 20,000
Private Placement | Class A
Related Party Transaction [Line Items]
Share price | $ / shares				$ 12.00
Private Placement | Class A | Purchase agreement with Linda Findley
Related Party Transaction [Line Items]
Share price | $ / shares				$ 12.00
Value of common stock, gross				$ 500
RJB Partners LLC | Private Placement | Class A
Related Party Transaction [Line Items]
Value of common stock, gross				40,000
Value of shares issued on the execution of purchase agreement				$ 20,000
Gift Card Sponsorship Agreement | Aspiration Carbon Reduction Gateway, LLC
Related Party Transaction [Line Items]
Unredeemed gift cards sponsored						$ 9,000
Sustainability and Carbon Credit Agreement | Aspiration Sustainable Impact Services, LLC
Related Party Transaction [Line Items]
Purchased					$ 3,000				$ 6,000
Number of installments									24
February 2022 Private Placement | RJB Partners LLC | Private Placement
Related Party Transaction [Line Items]
Proceeds from issuance of common stock, net of offering costs							$ 5,000
Unit price | $ / shares							$ 14.00
Purchase Agreement With Feeding America | Joseph N. Sanberg
Related Party Transaction [Line Items]
Purchased		$ 10,000
Subsequent Event | Private Placement | Purchase agreement with RJB
Related Party Transaction [Line Items]
Value of common stock, gross	$ 50,000
Subsequent Event | Private Placement | Class A | Purchase agreement with RJB
Related Party Transaction [Line Items]
Value of common stock, gross	$ 50,000
Issuance of common stock, net of offering costs (in shares) | shares	10,000,000
Subsequent Event | Private Placement | Class A | Purchase Agreement with RJB Partners LLC, April 2022
Related Party Transaction [Line Items]
Share price | $ / shares	$ 12.00
Issuance of common stock, net of offering costs (in shares) | shares	1,666,667
Subsequent Event | Private Placement | Class A | Purchase Agreement with RJB Partners LLC, August 2022
Related Party Transaction [Line Items]
Share price | $ / shares	$ 5.00
Value of common stock, gross	$ 50,000
Issuance of common stock, net of offering costs (in shares) | shares	8,333,333

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Related Party Transactions - Net revenue (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Related Party Transactions
Cost of goods sold, excluding depreciation and amortization	$ 5,468	$ 5,468
Product, technology, general and administrative	3,000	3,000
Feeding America bulk sale
Related Party Transactions
Net revenue	10,000	10,000
March Sponsorship Gift Cards
Related Party Transactions
Net revenue	$ 442	$ 442

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Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Numerator:
Net income (loss)	$ (23,123)	$ (38,449)	$ (18,587)	$ (15,721)	$ (61,572)	$ (34,308)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders-basic	34,073,695		18,876,600		33,185,992	18,410,729
Weighted average diluted shares outstanding (in shares)	34,073,695		18,876,600		33,185,992	18,410,729
Net income (loss) per share attributable to common stockholders-basic	$ (0.68)		$ (0.98)		$ (1.86)	$ (1.86)
Net income (loss) per share attributable to common stockholders-diluted	$ (0.68)		$ (0.98)		$ (1.86)	$ (1.86)
Class A
Numerator:
Net income (loss) attributable to common stockholders	$ (23,123)		$ (15,245)		$ (61,572)	$ (27,942)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders-basic	34,073,695		15,482,841		33,185,992	14,994,302
Weighted average diluted shares outstanding (in shares)	34,073,695		15,482,841		33,185,992	14,994,302
Net income (loss) per share attributable to common stockholders-basic	$ (0.68)		$ (0.98)		$ (1.86)	$ (1.86)
Net income (loss) per share attributable to common stockholders-diluted	$ (0.68)		$ (0.98)		$ (1.86)	$ (1.86)
Class B
Numerator:
Net income (loss) attributable to common stockholders			$ (3,342)			$ (6,366)
Denominator:
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders-basic			3,393,759			3,416,427
Weighted average diluted shares outstanding (in shares)			3,393,759			3,416,427
Net income (loss) per share attributable to common stockholders-basic			$ (0.98)			$ (1.86)
Net income (loss) per share attributable to common stockholders-diluted			$ (0.98)			$ (1.86)

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Earnings per Share - Antidilutive Common Shares (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Class A
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders	13,976,539	2,485,995	13,830,764	2,241,522
Class A | Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders	32,583		34,267
Class A | Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders	2,523,956	2,485,995	2,376,497	2,241,522
Class A | Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders	11,420,000		11,420,000
Class B
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders		49,044		50,462
Class B | Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total anti-dilutive securities that have been excluded from the computation of diluted net income (loss) per share attributable to common stockholders		49,044		50,462

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Fair Value Measurements (Details) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
	May 05, 2021	Jun. 30, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Warrant exercise price (in dollars per share)	$ 0.01
Equity subject to warrant exercise (as a percent)	0.50%
Warrants
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		$ 9,589
Loss (gain) on changes in stock price		(1,971)
Loss (gain) on changes in estimated common stock outstanding on a fully-diluted basis		153
Exercise of warrants		(5,050)
Derecognition		$ (2,721)
Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, fair value			$ 2,635
Financial liabilities, fair value			9,589
Fair Value, Measurements, Recurring | Warrants
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial liabilities, fair value			8,001
Fair Value, Measurements, Recurring | Warrants | Noncurrent liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial liabilities, fair value			1,588
Fair Value, Measurements, Recurring | Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, fair value			2,635
Fair Value, Measurements, Recurring | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, fair value			2,635
Fair Value, Measurements, Recurring | Level 1 | Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, fair value			2,635
Fair Value, Measurements, Recurring | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial liabilities, fair value			9,589
Fair Value, Measurements, Recurring | Level 3 | Warrants
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial liabilities, fair value			8,001
Fair Value, Measurements, Recurring | Level 3 | Warrants | Noncurrent liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial liabilities, fair value			$ 1,588

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended
	Aug. 07, 2022	Apr. 29, 2022	Feb. 14, 2022	Jun. 30, 2021
Subsequent Event [Line Items]
Proceeds from issuance of common stock, gross proceeds				$ 21,144
Private Placement | Purchase agreement with RJB
Subsequent Event [Line Items]
Proceeds from issuance of common stock, gross proceeds		$ 20,000
Private Placement | Class A
Subsequent Event [Line Items]
Share price		$ 12.00
Private Placement | Class A | February 2022 Private Placement
Subsequent Event [Line Items]
Issuance of common stock, net of offering costs (in shares)			357,143
Private Placement | Class A | Purchase agreement with RJB | Scenario, Plan
Subsequent Event [Line Items]
Issuance of common stock, net of offering costs (in shares)		1,666,667
Private Placement | Class A | Purchase agreement with Linda Findley
Subsequent Event [Line Items]
Proceeds from issuance of common stock, gross proceeds		$ 500
Share price		$ 12.00
Subsequent Event | Private Placement | Purchase agreement with RJB
Subsequent Event [Line Items]
Proceeds from issuance of common stock, gross proceeds	$ 50,000
Subsequent Event | Private Placement | Purchase agreement with RJB | Maximum.
Subsequent Event [Line Items]
Proceeds from stock issuance, usage for strategic purpose	25,000
Subsequent Event | Private Placement | Class A | Purchase agreement with RJB
Subsequent Event [Line Items]
Proceeds from issuance of common stock, gross proceeds	$ 50,000
Issuance of common stock, net of offering costs (in shares)	10,000,000
Subsequent Event | Private Placement | Class A | Purchase Agreement with RJB Partners LLC, April 2022
Subsequent Event [Line Items]
Issuance of common stock, net of offering costs (in shares)	1,666,667
Share price	$ 12.00
Subsequent Event | Private Placement | Class A | Purchase Agreement with RJB Partners LLC, April 2022 | Scenario, Plan
Subsequent Event [Line Items]
Issuance of common stock, net of offering costs (in shares)	1,666,667
Subsequent Event | Private Placement | Class A | Purchase Agreement with RJB Partners LLC, August 2022
Subsequent Event [Line Items]
Proceeds from issuance of common stock, gross proceeds	$ 50,000
Issuance of common stock, net of offering costs (in shares)	8,333,333
Share price	$ 5.00