Beyond(BYON) - 2025 Q1 - Quarterly Report

Special Cautionary Note Regarding Forward-Looking Statements The report contains forward-looking statements subject to known and unknown risks and uncertainties, which may cause actual results to differ materially from expectations - The report contains forward-looking statements subject to known and unknown risks and uncertainties, which may cause actual results to differ materially from expectations[9][10] - Key risks include dependence on third-party companies, intense competition, inability to respond to consumer needs, marketing effectiveness, economic factors (recessions, inflation), trade policies, changing business model, talent retention, reliance on search engines, profitability/cash flow, infrastructure reliance, compliance with laws, cyberattacks, legal proceedings, and reputation damage[10][11][12] PART I. FINANCIAL INFORMATION This section presents the company's unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the quarter ITEM 1. Financial Statements (Unaudited) This section presents the company's unaudited consolidated financial statements for the quarter ended March 31, 2025, including balance sheets, statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows, along with detailed notes on business description, accounting policies, asset valuations, and other financial disclosures Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time Consolidated Balance Sheets (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total Assets | $363,725 | $401,954 | | Total Liabilities | $220,357 | $239,222 | | Total Stockholders' Equity | $143,368 | $162,732 | | Cash and cash equivalents | $114,576 | $159,169 | | Inventories | $24,588 | $11,546 | Consolidated Statements of Operations This statement details the company's revenues, costs, and net loss over a specific reporting period Consolidated Statements of Operations (in thousands, except per share) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :--------- | | Net revenue | $231,748 | $382,281 | (39.4%) | | Cost of goods sold | $173,616 | $307,922 | (43.6%) | | Gross profit | $58,132 | $74,359 | (21.8%) | | Operating expenses | $81,679 | $131,884 | (38.1%) | | Operating loss | $(23,547) | $(57,525) | 59.0% | | Net loss | $(39,912) | $(73,928) | 46.0% | | Basic Net loss per share | $(0.74) | $(1.62) | 54.3% | Consolidated Statements of Comprehensive Loss This statement presents the net loss and other comprehensive income or loss, leading to the total comprehensive loss for the period Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Net loss | $(39,912) | $(73,928) | 46.0% | | Other comprehensive income | $0 | $4 | (100.0%) | | Comprehensive loss | $(39,912) | $(73,924) | 46.0% | Consolidated Statements of Changes in Stockholders' Equity This statement outlines the changes in the company's equity accounts, including common stock and accumulated deficit, over the reporting period Consolidated Statements of Changes in Stockholders' Equity (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total Stockholders' Equity | $143,368 | $162,732 | | Common stock issued (shares) | 63,413 | 59,560 | | Additional paid-in capital | $1,093,943 | $1,072,869 | | Accumulated deficit | $(780,378) | $(740,466) | - Common stock sold through offerings generated $19.47 million in additional paid-in capital for the three months ended March 31, 2025[22] Consolidated Statements of Cash Flows This statement reports the cash inflows and outflows from operating, investing, and financing activities for the period Consolidated Statements of Cash Flows (in thousands) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(50,921) | $(34,610) | | Net cash used in investing activities | $(13,145) | $(9,126) | | Net cash provided by (used in) financing activities | $19,454 | $(2,519) | | Net decrease in cash, cash equivalents, and restricted cash | $(44,612) | $(46,255) | | Cash, cash equivalents, and restricted cash, end of period | $141,481 | $256,494 | Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations and additional information supporting the unaudited consolidated financial statements 1. Description of Business This note describes the company's e-commerce focus and its portfolio of retail brands - Beyond, Inc. is an e-commerce focused affinity company owning or having interests in retail brands like Bed Bath & Beyond, Overstock, and buybuy BABY, offering products and services for home potential and life milestones[26] 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and standards applied in preparing the financial statements - The financial statements are unaudited and prepared in accordance with SEC rules for interim reporting, omitting certain GAAP disclosures[28] - The company adopted ASU 2023-07 (Segment Reporting) as of January 1, 2024, resulting in additional segment reporting disclosures[31] - New accounting standards ASU 2023-09 (Income Taxes) and ASU 2024-03 (Income Statement—Reporting Comprehensive Income) are expected to be adopted in future periods, primarily impacting disclosures without material financial statement impact[32][33] 3. Fair Value Measurement This note details the valuation methods and categories used for assets and liabilities measured at fair value Fair Value Measurement (in thousands) | Asset Category | March 31, 2025 Total | December 31, 2024 Total | | :---------------------------- | :------------------- | :---------------------- | | Cash equivalents—Money market funds | $22,033 | $21,799 | | Equity securities, at fair value | $25,400 | $21,640 | | Available-for-sale debt securities | $10,989 | $10,985 | | Debt securities, at fair value | $7,211 | $14,814 | | Total assets measured at fair value | $65,633 | $69,238 | - Level 3 investments decreased from $47.44 million at December 31, 2024, to $32.16 million at March 31, 2025, primarily due to transfers out and a decrease in fair value[36] 4. Property and Equipment, Net This note provides information on the company's property and equipment, including capitalization and depreciation Property and Equipment, Net (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :---------------------------------------------------------------------- | :------------- | :---------------- | | Total property and equipment, net | $19,498 | $23,544 | | Capitalized internal-use software and website development (3 months ended March 31) | $1,348 | $3,384 | | Depreciation of internal-use software and website development (3 months ended March 31) | $3,389 | $1,950 | 5. Intangible Assets, Net This note details the company's intangible assets, including acquisitions and disposals, and their valuation - The company acquired intellectual property related to the buybuy BABY brand for $5.0 million in February 2025, allocated to trade names with an indefinite useful life[38] - The company sold its rights in the Zulily brand for $5.0 million in March 2025, retaining a 25% ownership stake in Zulily Newco[39] Intangible Assets, Net (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total intangible assets, net | $32,773 | $30,246 | | Intangible assets not subject to amortization | $30,351 | $27,152 | 6. Equity Securities This note provides details on the company's equity investments, including ownership interests and recognized losses Equity Securities (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------------------------ | :------------- | :---------------- | | Total equity securities | $77,741 | $78,186 | | Equity securities accounted for under the equity method under ASC 323 | $52,341 | $56,546 | | Equity securities accounted for under the equity method under the fair value option | $25,400 | $21,640 | - The company increased its investment in Kirkland's, Inc. by $8.0 million and converted an $8.5 million convertible note, resulting in approximately 40% ownership[41] Equity Method Investee Ownership Interest (March 31, 2025) | Equity Method Investee | Ownership interest | | :--------------------- | :---------------------------------- | | Medici Ventures, L.P. | 99% | | tZERO Group, Inc. | 28% | | SpeedRoute, LLC | 49% | | Kirkland's, Inc. | 40% | | Zulily Newco | 25% | Net Loss Recognized on Equity Method Securities (in thousands) | Net Loss Recognized on Equity Method Securities | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss recognized on proportionate share | $(4,205) | $(9,734) | | Decrease in fair value of equity method securities | $(12,868) | $(8,718) | 7. Borrowings This note describes the company's outstanding debt and compliance with debt covenants - As of March 31, 2025, the company had an outstanding balance of $25.0 million on a one-year revolving line of credit with BMO Bank N.A., bearing interest at SOFR plus 1.00%[46][47] - The company is in compliance with its debt covenants, which include maintaining cash in a collateral account three percent greater than BMO's aggregate commitments[48] 8. Leases This note outlines the company's operating lease arrangements, costs, and future payment obligations - The company has operating leases for a warehouse, office space, and data center with remaining terms of one to eight years[49] Lease Metric (in thousands) | Lease Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $912 | $882 | | Variable lease cost | $309 | $268 | | Cash payments from lease arrangements | $851 | $936 | Lease Liability Maturity (in thousands) | Lease Liability Maturity | Amount | | :-------------------------------------- | :----- | | 2025 (Remainder) | $904 | | 2026 | $1,247 | | 2027 | $1,137 | | 2028 | $1,099 | | 2029 | $1,132 | | Thereafter | $3,497 | | Total lease payments | $9,016 | | Present value of lease liabilities | $7,132 | 9. Commitments and Contingencies This note discloses the company's involvement in legal proceedings and other potential liabilities - The company is involved in various legal proceedings (consumer protection, employment, intellectual property, securities laws) that could result in significant damages or require changes to business practices[51] - Established liabilities for probable and estimable contingencies were not material at March 31, 2025, or December 31, 2024[52] 10. Indemnifications and Guarantees This note describes the company's various indemnification and guarantee arrangements - The company has various indemnities, commitments, and guarantees (e.g., facility leases, underwriting agreements, directors/officers) with varying or indefinite durations, for which potential future payments are not reasonably estimable[53] 11. Stockholders' Equity This note provides details on changes in stockholders' equity, including stock offerings and repurchase programs - The company sold 3,486,895 shares of common stock through an "at the market" offering, generating $19.5 million in net proceeds for the three months ended March 31, 2025[55] - As of March 31, 2025, $136.3 million remained available under the "at the market" sales program[55] - No shares were repurchased under the stock repurchase program during the three months ended March 31, 2025, with $69.9 million remaining available for future repurchases through December 31, 2025[56] 12. Stock-Based Awards This note details the company's stock-based compensation expense and equity award grants Stock-based Compensation Expense (in thousands) | Stock-based Compensation Expense | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of goods sold | $1 | $0 | | Sales and marketing | $103 | $222 | | Technology | $57 | $1,980 | | General and administrative | $933 | $2,574 | | Total stock-based compensation | $1,094 | $4,776 | - The company granted 472,240 performance-based shares (PSUs) to executive management in Q1 2025, vesting based on Adjusted EBITDA, Gross Margin, and Contribution Margin performance metrics over three years[61] - Stock-based compensation related to PSUs was a $2.1 million credit for the three months ended March 31, 2025, due to staff reductions[62] - Employee Stock Purchase Plan (ESPP) purchases were 90,921 shares in Q1 2025 (vs. 56,575 in Q1 2024) at an average price of $5.43 (vs. $16.53 in Q1 2024)[64] 13. Revenue and Contract Liability This note provides information on unearned revenue, breakage income, and sales returns allowances Unearned Revenue (in thousands) | Unearned Revenue | Amount | | :------------------------------ | :----- | | Unearned revenue at December 31, 2024 | $43,095 | | Increase due to deferral of revenue, net | $20,543 | | Decrease due to beginning contract liabilities recognized as revenue | $(22,831) | | Unearned revenue at March 31, 2025 | $40,807 | - Breakage income from loyalty program rewards and gift cards recognized in revenue was $6.6 million for the three months ended March 31, 2025, significantly up from $1.3 million in the prior year[67] Sales Returns Allowance (in thousands) | Sales Returns Allowance | Amount | | :------------------------------------- | :----- | | Allowance for returns at December 31, 2024 | $9,526 | | Additions to the allowance | $20,955 | | Deductions from the allowance | $(22,760) | | Allowance for returns at March 31, 2025 | $7,721 | 14. Net Loss Per Share This note presents the calculation of basic and diluted net loss per share Net Loss Per Share (in thousands, except per share) | Net Loss Per Share | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :-------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to common stockholders | $(39,912) | $(73,928) | | Weighted average shares outstanding—basic | 53,661 | 45,587 | | Basic Net loss per share | $(0.74) | $(1.62) | | Diluted Net loss per share | $(0.74) | $(1.62) | - 2,579 thousand restricted stock units, PSUs, and Performance Share Options, and 405 thousand ESPP shares were excluded from diluted EPS calculation for Q1 2025 as their effect would have been anti-dilutive[69] 15. Business Segments This note describes the company's reportable operating segments and how performance is evaluated - The company operates one reportable segment, Retail, which aggregates the Overstock.com and Bed Bath & Beyond (including buybuy BABY) operating segments due to similar economic characteristics[70] - The Chief Operating Decision Maker (CODM) evaluates segment performance based on Net Revenues, Gross Profit, Sales and Marketing, Technology, General & Administrative expenses (as % of Gross Profit), Operating Income (Loss), and Consolidated Cash and Cash Equivalents[71][72] 16. Subsequent Events This note discloses significant events that occurred after the balance sheet date - On April 3, 2025, the company entered into a standby letter of credit agreement for an initial $5.0 million, expected to increase to $11.0 million, in favor of a payment processor as a financial guarantee[73] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operational results for the three months ended March 31, 2025, discussing revenue trends, expense management, liquidity, and capital resources, while also highlighting strategic priorities and macroeconomic influences Overview This section provides a high-level introduction to the company's business model, brands, and strategic focus - The company is an e-commerce affinity marketing company with brands like Overstock, Bed Bath & Beyond, and buybuy BABY, offering products and services for homes and life milestones[75] - The Bed Bath & Beyond brand focuses on home-related products for bedroom, bathroom, kitchen, and patio, with a strategy to elevate product quality, add aspirational brands, and enhance customer engagement[76][77] - The Overstock brand aims to provide discounted quality goods and a "treasure hunt-like" experience across home and lifestyle categories[78] - The recent buybuy BABY acquisition reunites it with Bed Bath & Beyond to support customers through key life stage shopping moments[79] Executive Commentary This section offers management's insights into key financial performance metrics and the factors influencing them Executive Commentary (in thousands, except percentages) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :----- | :-------------------------------- | :-------------------------------- | :--------- | | Revenue | $231,748 | $382,281 | (39.4%) | | Gross profit | $58,132 | $74,359 | (21.8%) | | Gross margin | 25.1% | 19.5% | +5.6 pp | | Sales and marketing expenses as % of revenue | 13.5% | 17.8% | -4.3 pp | | Technology expenses | $26,700 | $29,600 | (9.7%) | | General and administrative expenses | $14,300 | $20,500 | (30.0%) | | Customer service and merchant fees | $9,400 | $13,900 | (32.9%) | - Revenue decreased 39.4% primarily due to a 46% decrease in orders delivered, influenced by a shift in consumer spending, macroeconomic factors, and reduced sales and marketing spend, partially offset by a 12% increase in average order value[80] - Gross margin increased to 25.1% (from 19.5% YoY) due to merchandising actions and a reduction in carrier costs[81] - Consolidated cash and cash equivalents decreased from $159.2 million (Dec 31, 2024) to $114.6 million (March 31, 2025)[84] - The company continues to monitor macroeconomic trends (global conflicts, trade barriers, inflation, interest rates) which have negatively impacted consumer confidence and spending, but have not materially affected liquidity or debt servicing capacity to date[85] Results of Operations This section provides a detailed analysis of the company's financial performance, including revenue, cost of goods sold, and operating expenses Net revenue, cost of goods sold, gross profit and gross margin This section analyzes the key drivers and trends in the company's top-line revenue, cost of sales, and profitability Net Revenue, Cost of Goods Sold, Gross Profit and Gross Margin (in thousands, except percentages) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Net revenue | $231,748 | $382,281 | (39.4%) | | Cost of goods sold | $173,616 | $307,922 | (43.6%) | | Gross profit | $58,132 | $74,359 | (21.8%) | | Gross margin | 25.1% | 19.5% | +5.6 pp | - The 39.4% decrease in net revenue was primarily due to a 46% decrease in orders delivered, partially offset by a 12% increase in average order value[86] - Gross margin increased to 25.1% (from 19.5% YoY) due to merchandising actions and reduced carrier costs[91] Operating expenses This section details the various categories of operating expenses and their impact on the company's financial results Sales and marketing expenses This section analyzes trends and changes in the company's sales and marketing expenditures Sales and Marketing Expenses (in thousands, except percentages) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Sales and marketing expenses | $31,290 | $67,906 | (53.9%) | | Advertising expense | $29,377 | $64,960 | (54.8%) | | Sales and marketing expenses as % of net revenue | 13.5% | 17.8% | -4.3 pp | - The decrease in sales and marketing expenses was primarily due to decreased performance marketing expense and brand advertising, reflecting a focus on more efficient traffic channels[94] Technology expenses This section examines the company's technology-related costs and investments Technology Expenses (in thousands, except percentages) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Technology expenses | $26,718 | $29,581 | (9.7%) | | Technology expenses as % of net revenue | 11.5% | 7.7% | +3.8 pp | - The $2.9 million decrease in technology expenses was primarily due to a reduction in staff-related expenses[97] - The company continues to invest in technology, including machine learning and generative AI, to enhance customer experience and operational efficiency[95] General and administrative expenses This section reviews the company's general and administrative overhead costs General and Administrative Expenses (in thousands, except percentages) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | | General and administrative expenses | $14,314 | $20,454 | (30.0%) | | General and administrative expenses as % of net revenue | 6.2% | 5.4% | +0.8 pp | - The $6.1 million decrease was primarily due to a reduction in staff-related expenses[98] Customer service and merchant fees This section analyzes expenses related to customer support and merchant transaction fees Customer Service and Merchant Fees (in thousands, except percentages) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | YoY Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Customer service and merchant fees | $9,357 | $13,943 | (32.9%) | | Customer service and merchant fees as % of net revenue | 4.0% | 3.6% | +0.4 pp | - The $4.6 million decrease was primarily due to decreased order volume[100] Other expense, net This section discusses non-operating expenses and income, including those from equity method securities - Other expense, net decreased by $1.9 million year-over-year, primarily due to a $1.4 million decrease in loss recognized from equity method securities[101] Income taxes This section details the company's provision for income taxes and effective tax rate Income Taxes (in thousands, except percentages) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Provision for income taxes | $194 | $329 | | Effective tax rate | (0.5%) | (0.4%) | - The effective tax rate differs from the statutory federal rate of 21% primarily due to year-to-date losses on retail operations for which tax benefits are limited[104] - The company maintains a valuation allowance against its deferred tax assets for the U.S. jurisdiction due to a cumulative loss position over a three-year period[105] Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations and fund its operations Overview This section provides a general assessment of the company's liquidity position and future capital needs - The company believes current cash and expected cash flows will be sufficient for at least the next twelve months, actively managing operating plans and seeking cost savings[108] - Future capital requirements depend on growth, business strategy execution, and consumer sentiment, with potential needs for additional capital from outside sources[110] Current sources of liquidity This section identifies the primary sources of cash and available capital for the company Current Sources of Liquidity (in thousands) | Metric | March 31, 2025 | | :-------------------- | :------------- | | Cash and cash equivalents | $114,600 | | Accounts receivable, net | $18,100 | - A standby letter of credit agreement for an initial $5.0 million (expected to increase to $11.0 million) was entered into on April 3, 2025, with BMO Bank N.A[112] - As of March 31, 2025, $136.3 million remained available under the "at the market" common stock sales program, which generated $19.5 million in net proceeds during the quarter[113] Cash flow information This section summarizes the cash inflows and outflows across operating, investing, and financing activities Cash Flow Activity (in thousands) | Cash Flow Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(50,921) | $(34,610) | | Investing activities | $(13,145) | $(9,126) | | Financing activities | $19,454 | $(2,519) | Operating activities This section details cash generated or used by the company's core business operations - Net cash used in operating activities was $50.9 million for Q1 2025, primarily due to operating loss adjusted for non-cash items and $34.6 million used by changes in operating assets and liabilities, including $15.0 million for inventory purchases[116] Investing activities This section outlines cash flows related to the acquisition and disposal of long-term assets and investments - Net cash outflow from investing activities was $13.1 million for Q1 2025, mainly for purchases of equity securities ($8.0 million), intangible assets ($5.2 million), and property/equipment ($1.2 million), partially offset by proceeds from intangible asset sales ($1.3 million)[118] Financing activities This section describes cash flows from debt, equity, and dividend transactions - Net cash inflow from financing activities was $19.5 million for Q1 2025, primarily from net proceeds of common stock sales through the "at the market" offering[120] Contractual Obligations and Commitments This section details the company's future payment obligations under various agreements Contractual Obligations (in thousands) | Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :------------------------------------- | :---- | :--------------- | :-------- | :-------- | :---------------- | | Operating leases | $9,016 | $1,215 | $2,348 | $2,215 | $3,238 | Tax contingencies This section discusses potential tax liabilities and their estimated impact - Accrued tax contingencies were $3.7 million as of March 31, 2025, with potential for additional assessments within the next 12 months[122] Critical Accounting Policies and Estimates This section highlights the accounting policies and judgments that significantly impact the financial statements - No material changes to critical accounting policies and estimates were reported for the quarter ended March 31, 2025, compared to the prior annual report, except as disclosed in Note 2[123] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk This section outlines the company's exposure to market risks, including interest rate changes, foreign currency fluctuations, and investment market values, detailing how these factors could impact its financial condition and operations Interest Rate Sensitivity This section assesses the potential impact of interest rate fluctuations on the company's financial instruments - Cash and cash equivalents are not significantly affected by interest rate changes due to their short-term nature[126] - Changes in prevailing interest rates are not expected to materially impact results from the revolving line of credit (SOFR plus 1.00%)[127] Foreign Currency Risk This section evaluates the company's exposure to risks arising from changes in foreign exchange rates - Most sales and operating expenses are in U.S. dollars, limiting current foreign currency risk, but exposure could increase with global operations growth[128] Inflation This section discusses the effects of inflationary pressures on the company's costs and pricing strategies - Inflationary pressures from commodity, shipping, energy, and labor costs affect the business and supply chain[129] - The company works with partners to limit cost increases passed to customers, but an inability to fully offset higher costs could harm business and financial condition[129] - The effects of inflation on historical results have been immaterial, but future material impact is not assured[129] Investment Risk This section describes the risks associated with the fair value of the company's equity and debt securities - Fair values of equity and debt securities are subject to stock market volatility, investment-specific circumstances, and general economic conditions[130] Investment Type (March 31, 2025) | Investment Type | Value (in millions) | | :------------------------------- | :------------------ | | Equity securities | $77.7 | | Publicly-traded equity securities (at fair value) | $11.4 | | Equity securities (Level 3 inputs) | $14.0 | | Debt securities (Level 3 inputs) | $18.2 | - Investments valued using Level 3 inputs represent 49.0% of assets measured at fair value, and sensitivity analysis for these is not practicable due to valuation complexity[130] ITEM 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures, confirming their effectiveness, while also acknowledging inherent limitations and reporting no material changes to internal control over financial reporting during the quarter Evaluation of Disclosure Controls and Procedures This section reports on the assessment of the effectiveness of the company's disclosure controls - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of March 31, 2025[131] Limitations on Disclosure Controls and Procedures This section acknowledges the inherent limitations of any control system in preventing all errors or fraud - Controls and procedures provide only reasonable assurance and may not prevent or detect all error and fraud[132] Changes in Internal Control Over Financial Reporting This section reports on any material changes to the company's internal control over financial reporting during the period - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2025[133] PART II. OTHER INFORMATION This section includes disclosures on legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits ITEM 1. Legal Proceedings This section discloses the company's involvement in various legal proceedings, including consumer protection, employment, intellectual property, and securities laws, which could potentially result in significant damages or operational changes, with outcomes being uncertain - The company is involved in various legal proceedings that could result in significant damages, equitable remedies, or operational changes, with uncertain outcomes potentially affecting business and financial results[136] - Further details are incorporated by reference from Note 9—Commitments and Contingencies in the financial statements[136] ITEM 1A. Risk Factors This section highlights that investing in the company's securities carries a high degree of risk, with no material changes to previously disclosed risk factors, except for an updated emphasis on the adverse effects of tariffs and other trade barriers on product pricing and access - Investment in the company's securities involves a high degree of risk, and investors should consider all risk factors disclosed[137] - No material changes from previously disclosed risk factors in the Annual Report on Form 10-K, except for an updated emphasis on tariffs, bans, or other measures that increase product prices or limit access[138][139] - Restrictions on international trade, including tariffs, are expected to increase imported product prices or limit access, potentially reducing consumer demand and impacting sales volume and financial results[139] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports that no shares were repurchased under the company's stock repurchase program during the three months ended March 31, 2025, with a significant amount remaining available for future repurchases - No shares were repurchased under the stock repurchase program during the three months ended March 31, 2025[140] - As of March 31, 2025, $69.9 million remained available for future share repurchases under the current authorization through December 31, 2025[140] ITEM 3. Defaults Upon Senior Securities This section states that there were no reported defaults upon senior securities during the period - No defaults upon senior securities[141] ITEM 4. Mine Safety Disclosures This section indicates that the disclosures related to mine safety are not applicable to the company's operations - Not applicable[142] ITEM 5. Other Information This section confirms no disclosures in lieu of Form 8-K, no material changes to board nominee recommendation procedures, and details the termination of a Rule 10b5-1 trading plan by a former President - No disclosures in lieu of reporting on a Current Report on Form 8-K[144] - No material changes to procedures for security holders to recommend board nominees[145] - Dave Nielsen, former President, terminated a Rule 10b5-1(c) trading plan to sell up to 5,528 shares between March 5, 2025, and December 31, 2025[146] ITEM 6. Exhibits This section provides a comprehensive list of all exhibits accompanying the Form 10-Q, including various agreements, corporate governance documents, and required certifications, with financial statements also provided in Inline XBRL format - The report includes various exhibits such as the Asset Purchase Agreement, Amended and Restated Certificate of Incorporation, Bylaws, Employment Letter Agreements, and certifications (Rule 13a-14(a)/15d-14(a) and Section 1350)[148] - Financial statements are attached as Exhibit 101 in Inline XBRL format[148] Signatures This section formally attests to the accuracy and completeness of the report by authorized officers - The report was signed on April 29, 2025, by Adrianne B. Lee, President and Chief Financial Officer (Principal Financial Officer) of Beyond, Inc[153][154]