Sales and Revenue - The company reported that sales for the years ended December 31, 2022, 2021, and 2020 were almost entirely to customers located in the United States, with no single customer accounting for more than 1% of total net revenue[19]. Employee and Talent Management - As of December 31, 2022, the company had approximately 1,050 full-time employees and has never experienced a work stoppage[35]. - In 2022, the company hired a total of 208 new employees, with 180 in non-customer service roles and 28 in customer service and warehouse departments[42]. - The average employee tenure is six years, with customer service and warehouse departments having an average tenure of four and three-quarters years[42]. - The company offers a competitive compensation package, including base salary, short-term bonuses, and long-term equity incentives, to attract and retain talent[38]. - The company actively recruits talent from twenty-one states and has established relationships with universities and industry groups to enhance its talent acquisition efforts[41]. - The company has invested in employee development through online resources, mentoring programs, and subsidizing higher education opportunities[44]. - An annual training program on Diversity and Inclusion is conducted for all employees to promote a culture of inclusion[45]. - The company emphasizes a results-driven, inclusive, and collaborative corporate culture to enhance employee engagement[47]. Partnerships and Product Offering - The company maintains relationships with approximately 2,600 partners as of December 31, 2022, to ensure a continuous assortment of product offerings[17]. - The company focuses on enhancing its product assortment to meet evolving customer trends, increasing the number of items offered[18]. Marketing and Customer Service - The company utilizes a variety of sales and marketing methods, including online campaigns and brand advertising, to target its retail consumer audience[22]. - The company emphasizes superior customer service through its app, website, and customer service department, staffed with dedicated professionals[23]. Diversity and Inclusion - The company has a commitment to diversity and inclusion, aiming to improve representation at all levels and foster an inclusive culture[36]. Logistics and Operations - The company’s logistics capabilities are tailored to the furniture and home furnishings category, developed over many years of e-commerce experience[17]. Financial Performance and Market Conditions - The company recorded a value of $296.3 million in equity securities as of December 31, 2022, down from $342.7 million in 2021, indicating market volatility impacts[179]. - The company is exposed to inflationary pressures due to increases in commodity and shipping prices, which could affect financial performance if not managed effectively[178]. Employee Benefits - The company offers a comprehensive benefits package, including medical, dental, vision insurance, health savings accounts, and a 401(k) matching program[43]. - In January 2023, the company expanded its benefits to include pelvic care benefits for women and reduced copayments for mental health office visits[43]. Executive Team - As of February 24, 2023, the executive team includes key positions such as Chief Executive Officer, Chief Financial Officer, and Chief Marketing Officer, with significant experience in their respective fields[50][51][52].

Financial Data and Key Metrics Changes - Revenue declined by 34% year-over-year in Q4 2022, totaling $405 million, primarily due to competitive pressures and the strategic removal of non-home products from the site [22][24] - Gross profit was $90 million in Q4 2022, a decrease of $49 million compared to the prior year, with a gross margin of 22.1%, down 54 basis points year-over-year [25] - Adjusted EBITDA was $7 million in Q4 2022, a decrease of $21 million from the previous year, resulting in an adjusted EBITDA margin of 1.6% [27] Business Line Data and Key Metrics Changes - The transition to a 100% home retailer was completed, with home-only revenue declining by 30% in Q4 2022, consistent with the third quarter [24][31] - The active customer base decreased to 5.2 million, driven by reduced spending on home-related goods and a shift in consumer preferences [28] - Average order value (AOV) improved by 4% year-over-year to $215, although it declined slightly compared to Q3 due to a shift in product assortment [29] Market Data and Key Metrics Changes - The furniture and home furnishings market is fragmented, with a total addressable market exceeding $400 billion, presenting opportunities for market share growth [11] - The competitive landscape saw increased discounting and promotional activities, impacting gross margins and overall sales performance [22][24] Company Strategy and Development Direction - The company is focused on sustainable profitable market share growth, leveraging its asset-light business model to maintain gross margins despite competitive pressures [34][35] - New strategies include enhancing the mobile app experience, expanding loyalty offerings, and improving product findability on the website [40][42][44] - The company aims to capture market share by adding national branded and giftable products, particularly targeting competitors struggling with excess inventory [12][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2022 performance was below expectations but expressed confidence in the company's ability to recover market share and improve top-line performance in 2023 [7][35] - The macroeconomic environment, including inflation and a weak housing market, is expected to influence performance throughout the year, with a more optimistic outlook for the second half of 2023 [36][39] Other Important Information - The company ended 2022 with a strong balance sheet, holding $371 million in cash and only $34 million in long-term debt, resulting in a net cash position of $337 million [13] - Share repurchases totaled $80 million in 2022, alongside direct investments in portfolio companies like tZERO and GrainChain [14][18] Q&A Session Summary Question: Were competitor markdowns disruptive to sales in 2022? - Management acknowledged that while some disruptions occurred, maintaining a smart value proposition was essential, and suppliers often adjusted their prices accordingly [48][49] Question: Expectations for gross margins in 2023? - Management indicated that gross margins might trend lower in the first half of 2023 due to ongoing inventory rationalization but expected recovery later in the year [51][52] Question: Comparison of today's home e-commerce market with past periods? - Management noted similarities with past downturns, suggesting that Overstock is well-positioned to benefit as consumers become more price-sensitive [54][55] Question: Insights on average order value (AOV) and Overstock Day events? - Management highlighted that AOV was impacted by promotional discounting and seasonal shifts, while Overstock Day was successful in driving mobile app adoption [57][61] Question: Plans for customer engagement and reactivation strategies? - Management emphasized the new co-branded credit card initiative aimed at enhancing customer loyalty and engagement, alongside efforts to reactivate lapsed customers [69][70]

Financial Performance - Net revenue for the three months ended September 30, 2022, was $460.3 million, a decrease of 33.2% compared to $689.4 million for the same period in 2021[23]. - Gross profit for the nine months ended September 30, 2022, was $353.8 million, down 27.1% from $485.1 million in the same period of 2021[23]. - Operating income for the three months ended September 30, 2022, was $5.7 million, a decline of 80.3% from $28.8 million in the prior year[23]. - Consolidated net loss attributable to stockholders for the three months ended September 30, 2022, was $(37.0) million, compared to net income of $30.4 million in the same period of 2021[23]. - The company reported a net loss per share of $(0.81) for the three months ended September 30, 2022, compared to earnings per share of $0.64 in the same period last year[23]. - Total operating expenses for the nine months ended September 30, 2022, were $324.1 million, a decrease of 17.6% from $393.1 million in the same period of 2021[23]. - The company reported a net loss from continuing operations of $(37.0) million for the three months ended September 30, 2022, compared to income of $30.4 million in the same period last year[23]. - Comprehensive loss attributable to stockholders for the three months ended September 30, 2022, was $(36.99) million, compared to $30.43 million in the same period of 2021[25]. - The net income from discontinued operations attributable to stockholders of Overstock.com, Inc. for the nine months ended September 30, 2022, was $217.581 million[46]. Assets and Liabilities - Total current assets decreased to $475.3 million as of September 30, 2022, down from $551.8 million at December 31, 2021, representing a decline of approximately 13.8%[18]. - Cash and cash equivalents were reported at $427.5 million, a decrease of 15.0% from $503.3 million at the end of 2021[18]. - Total liabilities decreased to $275.6 million, down from $321.6 million, reflecting a reduction of approximately 14.3%[20]. - Stockholders' equity decreased to $676.6 million from $744.4 million, indicating a decline of about 9.1%[20]. - The total assets decreased to $952.2 million from $1,066.0 million, a decline of approximately 10.7%[20]. - The company reported an accumulated deficit of $158.3 million as of September 30, 2022, compared to $136.6 million at the end of 2021[20]. - The company has a deferred tax asset of $40.7 million, slightly up from $40.0 million at the end of 2021[18]. - The total outstanding debt on loans was $38.8 million as of September 30, 2022, with a current portion of $3.5 million included in other current liabilities[64]. Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2022, showed a net cash provided of $17.596 million, a significant decrease from $100.084 million in the same period of 2021[30]. - The net cash used in investing activities for the nine months ended September 30, 2022, was $28.004 million, compared to $81.764 million in the same period of 2021[30]. - The company reported a net cash used in financing activities of $65.224 million for the nine months ended September 30, 2022, compared to $7.957 million in the same period of 2021[33]. - The company completed an additional investment of $15 million in tZERO during the nine months ended September 30, 2022, through their Series B financing round[57]. Operational Challenges - The company continues to face risks related to supply chain challenges and economic conditions, which may impact future performance[13]. - The company experienced increased employee turnover and inflation in product costs, higher wages, and energy costs, impacting sales during the third quarter of 2022[108]. - The absence of pandemic-related shopping behavior and macroeconomic factors contributed to decreased order activity[105]. - The company cannot estimate the future impact of macroeconomic conditions such as inflation and supply chain challenges on its business due to their unpredictable nature[113]. Stock and Shareholder Information - The company had a total of 45.7 million shares of common stock outstanding as of September 30, 2022, an increase from 43.0 million shares in the prior year[27]. - The company reported stock-based compensation to employees and directors of $13.390 million for the nine months ended September 30, 2022, compared to $7.649 million for the same period in 2021[30]. - The stock-based compensation expense for the three months ended September 30, 2022, was $4.1 million, compared to $2.5 million for the same period in 2021[84]. - The company had $39.9 million available for future share repurchases under its current repurchase authorization through December 31, 2023[82]. Market and Economic Conditions - Consumer prices rose by 8.2% from September 2021 to September 2022, the largest increase since 1981, impacting consumer discretionary spending[167]. - Global conflicts, particularly the situation in Ukraine, could negatively impact the company's business and financial condition due to increased costs and supply chain disruptions[166]. - The company is exposed to risks from potential changes in legal, regulatory, or tax treatments that could adversely affect its operations[170]. - Further restrictions on the use of online tracking technologies could limit the company's ability to acquire new customers, adversely affecting its business[173].

Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $528 million, a decrease of 34% year-over-year but an increase of 44% compared to Q2 2019 [14][16] - Adjusted EBITDA margin was 3.9%, a decline of 165 basis points from 2021, but within the mid single-digit target range [14][18] - Adjusted diluted earnings per share (EPS) was $0.19, down $0.54 from the previous year, primarily due to lower pretax income and a higher effective tax rate [14][15] - The effective tax rate for Q2 was 26.1%, compared to a tax benefit in the same period last year [15] Business Line Data and Key Metrics Changes - The company transitioned to a 100% home and furnishings retailer, exiting non-home categories, which is expected to enhance brand association with home [12][13] - Active customer base declined to 6.5 million, influenced by weak consumer sentiment and the strategic exit from non-home products [20] - Average order value (AOV) increased by 16% year-over-year to $247, marking a record high for the company [21] Market Data and Key Metrics Changes - Online penetration in the home furnishings category is tracking at 33%, an increase of 900 basis points over 2019 [17][27] - The total addressable market for furniture and home furnishings in the U.S. is estimated at $419 billion, providing opportunities for market share growth [27] Company Strategy and Development Direction - The company aims to increase the breadth and depth of its product assortment to strengthen brand association with home [11][30] - The focus on "Smart Value" is critical, especially in a high inflation environment, to attract and retain customers [32] - The company is leveraging its mobile app to enhance customer engagement and drive sales [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic factors such as inflation and geopolitical volatility affecting consumer sentiment [6][9] - The company remains committed to profitability and has a strong balance sheet, which provides stability in uncertain times [24][49] - Future marketing campaigns will focus on enhancing brand association with home, particularly now that the company is 100% home-focused [67] Other Important Information - The company repurchased approximately $35 million of equity in Q2 2022, totaling $60 million year-to-date [12][24] - The transition to a simpler equity capital structure was completed with the conversion of preferred stock into common stock [12] Q&A Session Summary Question: Sustainability of mid single-digit EBITDA margin amidst declining sales - Management confirmed the ability to manage expenses effectively and maintain mid single-digit EBITDA margins despite revenue declines [52][54] Question: Pricing trends in the industry - Management noted that while competitors are liquidating excess inventory at a loss, Overstock's asset-light model allows for competitive pricing without markdown pressures [58][60] Question: Order growth and marketing efforts - Management acknowledged the order growth metrics and indicated plans to enhance marketing efforts to better associate the brand with home [64][66] Question: Performance of the Club O loyalty program - Management reported that Club O continues to grow year-over-year and is a focus for future enhancements [78] Question: Mobile app performance and sales growth - Management highlighted that the mobile app channel is growing significantly and has the highest repeat rate and AOV, indicating strong customer loyalty [80]

Financial Data and Key Metrics Changes - The company reported significant changes in financial metrics, although specific figures were not provided in the document [1] Business Line Data and Key Metrics Changes - Detailed performance metrics for each business line were not disclosed in the document [1] Market Data and Key Metrics Changes - The document did not include specific market data or key metrics changes [1] Company Strategy and Development Direction and Industry Competition - The company’s strategic direction and competitive landscape were not elaborated upon in the document [1] Management's Comments on Operating Environment and Future Outlook - Management's insights regarding the operating environment and future prospects were not included in the document [1] Other Important Information - The conference was recorded, and participants were informed about the process for asking questions [1] Q&A Session All Questions and Answers Question: How to ask questions during the session? - Participants were instructed to press star one on their telephone to ask questions during the session [1]

Financial Position - Total current assets as of September 30, 2021, were $564,672 thousand, a decrease from $582,740 thousand as of December 31, 2020, reflecting a decline of approximately 3%[17] - Cash and cash equivalents increased to $512,188 thousand from $495,425 thousand, representing a growth of about 3%[17] - Total assets reached $1,064,917 thousand, up from $830,214 thousand, indicating an increase of approximately 28%[17] - Total liabilities decreased to $355,803 thousand from $393,888 thousand, a reduction of about 10%[17] - Stockholders' equity rose significantly to $709,114 thousand from $436,326 thousand, marking an increase of approximately 63%[20] - The company reported an accumulated deficit of $(168,803) thousand, improved from $(525,233) thousand, indicating a reduction in losses[20] - The company has a deferred tax asset of $37,955 thousand, up from $37 thousand, showing a significant increase[17] - The company’s equity securities measured at fair value increased to $330,196 thousand from $1,412 thousand, a substantial rise[17] - Total stockholders' equity increased to $709.1 million as of September 30, 2021, up from $419.3 million at the end of the same period in 2020[31] - The balance of total equity attributable to stockholders of Overstock.com, Inc. was $709.1 million at the end of the period, reflecting strong financial health[31] Revenue and Profitability - Net revenue for the three months ended September 30, 2021, was $689.39 million, a decrease of 3.9% from $717.70 million in the same period of 2020[24] - Gross profit for the nine months ended September 30, 2021, was $485.06 million, compared to $420.83 million for the same period in 2020, representing a 15.3% increase[24] - Operating income for the three months ended September 30, 2021, was $28.85 million, down 26% from $38.86 million in the same period of 2020[24] - Consolidated net income attributable to stockholders for the three months ended September 30, 2021, was $30.43 million, an increase of 30.5% from $23.39 million in the same period of 2020[24] - Basic net income per share for continuing operations was $0.64 for the three months ended September 30, 2021, compared to $0.81 for the same period in 2020[24] - Comprehensive income for the three months ended September 30, 2021, was $30.43 million, compared to $21.23 million for the same period in 2020, marking a 43.3% increase[26] - Consolidated net income for the nine months ended September 30, 2021, was $356.1 million, a significant increase from $36.0 million in the same period of 2020[33] - The company reported a net loss from discontinued operations of $0 for the three months ended September 30, 2021, compared to a loss of $16.68 million in the same period of 2020[24] Expenses and Cash Flow - Total operating expenses for the nine months ended September 30, 2021, were $393.11 million, up from $346.48 million in the same period of 2020, reflecting a 13.4% increase[24] - The company reported a net cash provided by operating activities of $82.96 million for the nine months ended September 30, 2021, compared to $198.71 million for the same period in 2020[33] - The company experienced a net cash used in investing activities of $81.76 million for the nine months ended September 30, 2021, compared to $15.43 million in the same period of 2020[35] - Cash payments included in operating cash flows from lease arrangements were $5,007,000 for the nine months ended September 30, 2021[75] - Cash provided by operating activities for the nine months ended September 30, 2021, was $100.1 million, a decrease from $221.8 million in the same period of 2020[161] Stock and Shareholder Information - The weighted average shares of common stock outstanding increased to 43.01 million for the three months ended September 30, 2021, from 42.76 million in the same period of 2020[29] - The total number of Series A-1 preferred shares issued and outstanding remained at 4,204 for the three months ended September 30, 2021[29] - The Series A-1 preferred stockholders are entitled to an annual cash dividend of $0.16 per share, with no arrearages in cumulative preferred dividends[92] - The company announced a stock repurchase program on August 17, 2021, with an aggregate repurchase price not to exceed $100 million through December 31, 2023[96] - The maximum number of shares that can be issued under the 2021 ESPP is 3,000,000 shares, with $234,000 recognized in share-based compensation expense for the three and nine months ended September 30, 2021[105] Business Operations and Strategy - Overstock.com is focused on expanding its market presence and enhancing its technology offerings to drive future growth[12] - The company operates primarily in the retail segment, with substantial revenue generated from e-commerce product sales in the United States[119] - Current business strategies include improving product findability and expanding market share in Canada and government sectors[124] - The company aims to enhance customer experience through improved search and navigation on its website[124] - The company’s supply chain allows for direct shipping to customers from suppliers or warehouses, supporting its e-commerce operations[122] Market Risks and Legal Matters - The company is cooperating with SEC investigations and has provided all requested documents related to various subpoenas[83] - The company intends to vigorously defend against multiple class action lawsuits filed against it, with no estimates of possible losses available at this time[84][85] - The company is exposed to market risks including interest rate changes and foreign currency fluctuations, but most sales and operating expenses are denominated in U.S. dollars[172] - The company faces risks related to the ongoing COVID-19 pandemic, including potential impacts on technology, security, and employee productivity[187] - The company is subject to various laws and regulations that may increase expenses and impede growth, particularly as it expands its retail business outside the U.S.[170] Deferred and Unearned Revenue - Unearned revenue at September 30, 2021, was $65.206 million, a decrease from $72.165 million at December 31, 2020, with a deferral of revenue of $55.938 million during the period[108] - Breakage income related to Club O Reward dollars was $2.5 million for the three months ended September 30, 2021, compared to $1.6 million for the same period in 2020[108]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for the period ended June 30, 2021, reflecting the deconsolidation of Medici Ventures and tZERO as discontinued operations, resulting in a significant one-time gain [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2021, the balance sheet reflects the deconsolidation of Medici/tZERO entities, showing increased equity securities and total stockholders' equity, with cash and cash equivalents rising to $536.4M - Assets and liabilities of discontinued operations, which were **$140.3M** and **$21.6M** respectively at year-end 2020, are zero as of June 30, 2021, following the deconsolidation[18](index=18&type=chunk)[64](index=64&type=chunk) Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $536.4M | $495.4M | | Equity securities | $330.8M | $1.4M | | Total assets | $1,101.7M | $830.2M | | Total liabilities | $425.5M | $393.9M | | Total stockholders' equity | $676.2M | $436.3M | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) For Q2 2021, net revenue from continuing operations grew 3.6% year-over-year to $794.5M, while a significant gain from discontinued operations drove consolidated net income to $309.8M Q2 2021 vs Q2 2020 Performance (in millions, except EPS) | Metric | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Net Revenue | $794.5M | $767.0M | | Gross Profit | $174.8M | $177.9M | | Operating Income | $36.5M | $48.8M | | Income from Continuing Operations | $82.4M | $47.8M | | Income (loss) from Discontinued Operations | $227.4M | $(13.5M) | | Net Income Attributable to Stockholders | $309.9M | $36.4M | | Diluted EPS | $6.47 | $0.84 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2021, net cash provided by continuing operating activities decreased to $120.0M, with increased cash used in investing activities primarily due to capital call contributions Six Months Ended June 30 Cash Flows (in millions) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by continuing operating activities | $120.0M | $187.4M | | Net cash used in continuing investing activities | $(47.7M) | $(7.5M) | | Net cash provided by (used in) continuing financing activities | $(9.2M) | $43.8M | [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail significant accounting events, including the deconsolidation of Medici Ventures and tZERO, resulting in a $243.5M gain, and the company's shift to a single Retail reportable segment - On April 23, 2021, the company closed a transaction with Pelion MV GP, L.L.C., transferring control of Medici Ventures. Overstock deconsolidated the entities and recognized a gain of **$243.5M**[42](index=42&type=chunk)[59](index=59&type=chunk) - The company is cooperating with an ongoing SEC investigation related to tZERO, the 2019 digital dividend, and other matters[82](index=82&type=chunk)[83](index=83&type=chunk) - Following the deconsolidation, the company determined it has only one reportable segment: **Retail**[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2021 financial results, highlighting a 3.6% revenue increase driven by higher average order value, a slight gross margin decrease, and the release of a $47.0M deferred tax asset valuation allowance - Q2 2021 revenue growth was driven by a **33% increase in average order size**, offset by a **22% decrease in customer orders** compared to the peak of the COVID-19 pandemic in Q2 2020[117](index=117&type=chunk)[124](index=124&type=chunk) - Gross margin for Q2 2021 decreased to **22.0%** from **23.2%** in Q2 2020, primarily because 2020 benefited from a lower promotional environment and other one-time items[118](index=118&type=chunk)[130](index=130&type=chunk) - The company released approximately **$47.0M** of its valuation allowance on deferred tax assets, concluding it is more likely than not that these assets will be realizable[144](index=144&type=chunk) Key Financial Metrics (Q2 2021) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Net Revenue | $794.5M | +3.6% | | Gross Margin | 22.0% | -120 bps | | S&M as % of Revenue | 10.7% | +40 bps | | Cash & Equivalents | $536.4M | N/A | [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks relate to its $330.8M equity securities, mainly in private companies, which are subject to valuation volatility, while interest rate and foreign currency risks are minimal - The company holds **$330.8M** in equity securities, primarily in private companies, which are subject to valuation risk due to the lack of readily available market data[172](index=172&type=chunk) - Interest rate risk is low as the company's loan agreements carry a fixed blended annual interest rate of **4.45%**[170](index=170&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with enhancements made to internal controls related to tax valuation allowance release and retained noncontrolling interests - The principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of the end of the reporting period[176](index=176&type=chunk) - Internal controls were enhanced during the quarter to support the accounting for the tax valuation allowance release and the valuation of retained interests in deconsolidated subsidiaries[178](index=178&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with details incorporated by reference from Note 8 of the financial statements, covering ongoing matters such as an SEC investigation and class action lawsuits - This section refers to Note 8 for details on legal proceedings, which include an **SEC investigation** and a **securities class action lawsuit**[180](index=180&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new material risk factors, including potential losses from equity interests in startup businesses and the risk of not realizing recently reversed deferred tax assets - A new risk factor highlights the potential for **material losses** related to the company's direct and indirect noncontrolling interests in startup businesses[183](index=183&type=chunk) - A new risk factor was added concerning the potential inability to realize its **deferred tax assets** if future taxable income is lower than estimated, which could lead to re-establishing a valuation allowance[184](index=184&type=chunk)[185](index=185&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or issuer purchases of equity securities during the period - There were no unregistered sales of equity securities or issuer purchases of equity securities in the quarter[186](index=186&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Medici Ventures, L.P. Limited Partnership Agreement, CEO and CFO certifications, and the financial statements formatted in Inline XBRL - Key exhibits filed include the Limited Partnership Agreement for Medici Ventures, L.P. and certifications by the **CEO** and **CFO**[188](index=188&type=chunk)