Brilliant Earth (BRLT) - 2023 Q2 - Quarterly Report

FORM 10-Q Registrant Information This section provides basic registrant information for Brilliant Earth Group, Inc., including its Nasdaq-listed Class A common stock - Brilliant Earth Group, Inc.'s Class A common stock is listed on the Nasdaq Global Market under the ticker symbol BRLT[169] - As of August 7, 2023, the company had 12,039,540 shares of Class A common stock, 35,616,783 shares of Class B common stock, 49,119,976 shares of Class C common stock, and no Class D common stock outstanding[169] - The company is identified as a "non-accelerated filer," "smaller reporting company," and "emerging growth company"[169] CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements subject to unpredictable risks and uncertainties, with no obligation to update unless legally required - All statements in this report, other than statements of historical fact, may be forward-looking statements, covering expectations for future performance, financial condition, business strategy, and operational objectives[158] - Forward-looking statements are not guarantees of future performance and are subject to difficult-to-predict risks, assumptions, and uncertainties, which may cause actual results to differ materially from expectations[158] - Unless required by applicable law, the company undertakes no obligation to update or revise any forward-looking statements[160] BASIS OF PRESENTATION BASIS OF PRESENTATION This section defines key terms, including 'Company' (Brilliant Earth Group, Inc. and subsidiaries) and 'TRA' (tax receivable agreement with continuing equity owners) - The terms "Company," "we," "us," and "our" refer to Brilliant Earth Group, Inc. and all its subsidiaries, including Brilliant Earth, LLC[161] - The "TRA" refers to the tax receivable agreement with Brilliant Earth, LLC and continuing equity owners, stipulating Brilliant Earth Group, Inc. pays 85% of tax benefits realized from certain tax basis adjustments and TRA payments to continuing equity owners[161] Part I - Financial Information Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows Unaudited Condensed Consolidated Balance Sheets (in thousands) | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :------------ | :------------- | | Total Assets | $273,329 | $262,574 | | Total Liabilities | $179,695 | $169,433 | | Total Equity | $93,634 | $93,141 | Unaudited Condensed Consolidated Statements of Operations (in thousands) | Indicator | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Net Sales | $110,184 | $108,809 | $207,882 | $208,847 | | Gross Profit | $63,489 | $57,821 | $117,165 | $107,937 | | Net Income | $1,235 | $3,751 | $795 | $7,120 | Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) | Indicator | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | | Net Cash Provided by Operating Activities | $10,870 | $4,873 | | Net Cash Used in Investing Activities | $(9,159) | $(4,068) | | Net Cash Used in Financing Activities | $(6,753) | $(18,137) | | Net Decrease in Cash, Cash Equivalents, and Restricted Cash | $(5,042) | $(17,332) | NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS This section provides detailed notes to the financial statements, covering business description, accounting policies, EPS, revenue, inventory, and debt 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note describes the company's digital-first jewelry business, its 32 showrooms, and key accounting policies - The company designs, sources, and sells ethically sourced diamonds, gemstones, and jewelry, operating 32 showrooms in the United States as of June 30, 2023[185] - As of June 30, 2023, non-controlling interests represented 87.6% of the company's net assets, reflecting the economic interest of continuing equity owners in Brilliant Earth, LLC[190] - The company has assessed all recently issued but not yet effective accounting pronouncements and expects no material impact on the condensed consolidated financial statements[244] 2. EARNINGS PER SHARE This note details basic and diluted EPS calculations, showing a $0.01 EPS for both periods, assuming LLC unit conversion Earnings Per Share (in thousands, except share and per share amounts) | Indicator | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Basic Earnings Per Share | $0.01 | $0.04 | $0.01 | $0.07 | | Diluted Earnings Per Share | $0.01 | $0.03 | $0.01 | $0.06 | | Basic Weighted-Average Shares Outstanding | 11,796,639 | 10,810,627 | 11,593,416 | 10,412,922 | | Diluted Weighted-Average Shares Outstanding | 96,889,854 | 96,208,702 | 96,820,285 | 96,386,862 | - Class A and Class C common stock do not participate in any distributions or dividends and are therefore excluded from EPS presentation[195] - Diluted EPS calculation assumes all LLC units are convertible into common stock and the company will elect to issue common stock rather than cash settlement[196] 3. REVENUE This note details revenue by geographic region, deferred revenue, and sales returns, with US net sales of $104.854 million Net Sales by Geographic Region (in thousands) | Region | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | United States | $104,854 | $102,232 | $197,469 | $195,998 | | International | $5,330 | $6,577 | $10,413 | $12,849 | | Total Net Sales | $110,184 | $108,809 | $207,882 | $208,847 | - As of June 30, 2023, total deferred revenue was $22.3 million, up from $18.6 million as of December 31, 2022[249] - The company estimates expected product returns based on historical return percentages and current sales levels, recording a refund liability and related return asset[225] 4. INVENTORIES, NET This note details inventory composition, with net inventories of $39.413 million, and $23 million in vendor consigned inventory Inventories, Net (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :--- | :------------ | :------------- | | Loose Diamonds | $11,507 | $11,894 | | Fine Jewelry and Other | $28,269 | $27,744 | | Inventory Obsolescence Reserve | $(363) | $(307) | | Total Inventories, Net | $39,413 | $39,331 | - As of June 30, 2023, the company held $23 million in vendor consigned inventory, not recorded on the unaudited condensed consolidated balance sheets[228] 5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES This note details accrued expenses and other current liabilities, totaling $34.163 million as of June 30, 2023 Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :--- | :------------ | :------------- | | Vendor Expenses | $12,122 | $14,769 | | Unbilled Inventory Received | $9,736 | $7,973 | | Payroll Expenses | $3,923 | $5,301 | | Sales and Other Taxes Payable | $3,002 | $4,137 | | Sales Returns and Allowances Reserve | $1,599 | $2,332 | | Current Portion of TRA | $0 | $502 | | Other | $3,781 | $2,819 | | Total | $34,163 | $37,833 | Sales Returns and Allowances Activity (in thousands) | Indicator | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | | Beginning Balance | $2,332 | $2,338 | | Provision | $10,133 | $10,817 | | Returns and Allowances | $(10,866) | $(11,609) | | Ending Balance | $1,599 | $1,546 | 6. LEASES This note details operating leases, with right-of-use assets of $38.333 million and lease liabilities of $44.695 million Operating Lease Right-of-Use Assets and Liabilities (in thousands) | Category | June 30, 2023 | June 30, 2022 | | :--- | :------------ | :------------ | | Net Book Value of Operating Lease Right-of-Use Assets | $38,333 | $21,427 | | Total Lease Liabilities | $44,695 | $24,424 | Total Lease Cost (in thousands) | Category | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Total Lease Cost | $2,126 | $1,054 | $3,944 | $1,978 | - As of June 30, 2023, the weighted-average remaining lease term for operating leases was 7.5 years, with a weighted-average discount rate of 4.5%[258] 7. DEBT This note details the company's debt structure, including the $61.174 million term loan and an 8.21% effective interest rate Term Loan Net Book Value (in thousands) | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :------------ | :------------- | | Outstanding Principal | $61,750 | $63,375 | | Debt Issuance Costs | $(576) | $(663) | | Net Book Value | $61,174 | $62,712 | - The company repaid the Runway term loan of $58.2 million in May 2022, recognizing a $0.6 million loss on debt extinguishment[293] - The SVB credit facility, established on May 24, 2022, includes a $65 million term loan and a $40 million revolving credit facility, both maturing on May 24, 2027; no amounts were outstanding under the revolving credit facility as of June 30, 2023[294][297] - For the three months ended June 30, 2023, the company's effective interest rate on debt was 8.21%, up from 7.10% in the prior year, primarily due to increased variable rates on the SVB credit agreement[4] 8. EQUITY-BASED COMPENSATION This note details equity-based compensation, with RSU expense of $2.4 million and $25.6 million in unrecognized RSU costs Equity-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | RSUs | $2,400 | $1,800 | $4,400 | $3,200 | | Stock Options | $200 | $300 | $400 | $900 | | Restricted LLC Units | $100 | $100 | $100 | $100 | - As of June 30, 2023, total unrecognized RSU compensation cost was $25.6 million, expected to be recognized over approximately 2.9 years[299] - As of June 30, 2023, total unrecognized stock option compensation cost was $1.2 million, expected to be recognized over approximately 1.7 years[301] 9. INCOME TAXES AND TAX RECEIVABLE AGREEMENT This note details income tax treatment and TRA impact, with a 2.97% effective tax rate and $9.4 million in deferred tax assets - For the six months ended June 30, 2023, the company's effective tax rate was 2.97%, differing from the U.S. federal statutory rate of 21% primarily due to income attributable to non-controlling interests, state tax expense, and other permanent items[11] - As of June 30, 2023, the company recorded $9.4 million in deferred tax assets and a corresponding estimated liability of $7.9 million, representing 85% of the estimated tax benefits payable to continuing equity owners[275] - The TRA requires the company to pay continuing equity owners 85% of the tax benefits realized (or deemed realized in certain circumstances) from tax basis adjustments and TRA payments, with expected payments being substantial[141][306] 10. COMMITMENTS AND CONTINGENCIES This note discloses potential litigation and claims, with no current material impact expected, but PAGA lawsuit liability is uncertain - The company does not believe any current litigation or audits, if unfavorably resolved, would materially impact its financial position, operating results, or cash flows[14] - In December 2022, the company received a representative action lawsuit under California's Private Attorneys General Act (PAGA) from a former employee alleging violations of California labor laws; the company is actively defending and has appealed the denial of a motion to compel arbitration[112][308] - Currently, any liability related to the PAGA lawsuit is uncertain or not reasonably estimable[112] Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's discussion and analysis of financial condition and results, covering company overview, key factors, and metrics Company Overview Brilliant Earth is a digital-first, ethically sourced jewelry company, founded in 2005, with 32 showrooms and global sales - Brilliant Earth is an innovative digital-first jewelry company and a global leader in ethically sourced fine jewelry, offering exclusive designs and supply chain transparency through an omnichannel experience[16] - Founded in 2005, the company has sold products to consumers in over 50 countries and operates 32 showrooms as of June 30, 2023[17][50] - The company invests in technology for dynamic product visualization, augmented reality try-on, blockchain transparency, and rapid fulfillment of flagship "create your own" products, enhancing customer satisfaction, engagement, and conversion[311] Key Factors Affecting Our Performance This section discusses key performance factors, including brand awareness, omnichannel growth, international expansion, and macroeconomic trends - Increasing brand awareness and favorable brand equity are crucial for the company's growth, with significant opportunities to expand customer reach and maximize customer lifetime value through dynamic marketing strategies[133] - The company plans to drive accelerated growth through strategic showroom openings, which are expected to increase average order value (AOV) and improve conversion rates[50] - International expansion is in early stages, showing potential for future global growth through localized websites in markets like Canada, Australia, and the UK, and sales to over 50 countries[24][51] - The company employs a unique asset-light operating model, featuring attractive working capital dynamics, capital-efficient showrooms, and a vast virtual inventory, leading to high inventory turnover and negative working capital[52] - Current inflationary environments and shifts in macroeconomic consumer spending trends may negatively impact the company's operating results[53] Components of Results of Operations This section defines key components of operating results, including net sales, cost of sales, SG&A, interest expense, and income tax - Net sales primarily comprise revenue from the retail sale of diamonds, jewelry, and gemstones through the company's website and showrooms, with all sales proceeds collected prior to fulfillment[27] - Cost of sales primarily includes the cost of merchandise sourced from global suppliers for diamonds and gemstones, production costs from third-party jewelry manufacturers, and freight, fulfillment, and inventory-related compensation costs[28] - Selling, general and administrative expenses primarily include marketing, advertising, and promotional expenses, employee salaries and benefits, merchant processing fees, facility-related costs, customer service, technology, and depreciation and amortization expenses[56] Results of Operations This section analyzes operating results, showing slight net sales changes, improved gross margin, but decreased operating and net income Comparison of Three Months Ended June 30, 2023 and 2022 Net sales grew 1.3% to $110.184 million, but net income fell 67.1% due to a 19.1% increase in SG&A expenses Financial Performance (Three Months Ended June 30, in thousands) | Indicator | 2023 Amount | 2022 Amount | Change Amount | Change Percentage | | :--- | :--------- | :--------- | :------- | :--------- | | Net Sales | $110,184 | $108,809 | $1,375 | 1.3% | | Gross Profit | $63,489 | $57,821 | $5,668 | 9.8% | | Selling, General and Administrative Expenses | $62,129 | $52,145 | $9,984 | 19.1% | | Operating Income | $1,360 | $5,676 | $(4,316) | (76.0)% | | Net Income | $1,235 | $3,751 | $(2,516) | (67.1)% | - Net sales increased by 1.3%, driven by a 21.2% increase in order volume, partially offset by a 16.4% decrease in average order value (AOV) due to slower growth in products over $10,000 and increased sales of lower-priced fine jewelry[59][326] - Gross profit increased by 9.8%, with gross margin improving by 450 basis points, primarily due to premium brand positioning, pricing engine performance, sourcing efficiencies, and an extended warranty program, partially offset by higher spot prices for platinum and gold[327] - Selling, general and administrative expenses increased by $10 million (19.1%), mainly due to a $5.5 million increase in marketing expenses, a $2.6 million increase in other general and administrative expenses, and a $1.9 million increase in employment expenses[35][136] - Interest expense increased by $0.1 million (11.7%), primarily due to higher variable interest rates on the SVB credit agreement[328] - Other income (expense), net, improved by $1.2 million, primarily due to increased interest income from cash balances[36] Comparison of Six Months Ended June 30, 2023 and 2022 Net sales decreased 0.5% to $207.882 million, while net income fell 88.8% due to a 19.5% increase in SG&A expenses Financial Performance (Six Months Ended June 30, in thousands) | Indicator | 2023 Amount | 2022 Amount | Change Amount | Change Percentage | | :--- | :--------- | :--------- | :------- | :--------- | | Net Sales | $207,882 | $208,847 | $(965) | (0.5)% | | Cost of Sales | $90,717 | $100,910 | $(10,193) | (10.1)% | | Gross Profit | $117,165 | $107,937 | $9,228 | 8.5% | | Selling, General and Administrative Expenses | $115,895 | $96,961 | $18,934 | 19.5% | | Operating Income | $1,270 | $10,976 | $(9,706) | (88.4)% | | Net Income | $795 | $7,120 | $(6,325) | (88.8)% | - Net sales decreased by 0.5%, primarily due to a 14.1% decrease in average order value (AOV) (influenced by slower growth in products over $10,000 and increased sales of lower-priced fine jewelry), partially offset by a 15.9% increase in order volume[63] - Gross profit increased by 8.5%, with gross margin improving by 470 basis points, primarily due to premium brand positioning, pricing engine, sourcing efficiencies, and an extended warranty program, partially offset by higher spot prices for platinum and gold[137] - Selling, general and administrative expenses increased by $18.9 million (19.5%), mainly due to an $8.2 million increase in marketing expenses, a $5.9 million increase in other general and administrative expenses, and a $4.8 million increase in employment expenses[332] - Interest expense decreased by $0.4 million (14.9%), primarily due to lower interest rates on the SVB credit agreement compared to the Runway term loan agreement[65][66] - Other income (expense), net, improved by $2.1 million, primarily due to increased interest income from cash balances[149] Key Metrics This section presents key performance indicators: net sales, total orders, and AOV, showing increased orders but decreased AOV Key Performance Indicators (in thousands, except total orders and AOV) | Indicator | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Change Amount | Change Percentage | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change Amount | Change Percentage | | :--- | :----------------------- | :----------------------- | :------- | :--------- | :----------------------- | :----------------------- | :------- | :--------- | | Net Sales | $110,184 | $108,809 | $1,375 | 1.3% | $207,882 | $208,847 | $(965) | (0.5)% | | Total Orders | 42,849 | 35,366 | 7,483 | 21.2% | 78,480 | 67,738 | 10,742 | 15.9% | | AOV | $2,571 | $3,077 | $(506) | (16.4)% | $2,649 | $3,083 | $(434) | (14.1)% | - For the three months ended June 30, 2023, total orders increased by 21.2%, driven by customer acquisition and conversion activities, omnichannel performance, and new showroom openings[59] - For the six months ended June 30, 2023, average order value (AOV) decreased by 14.1%, primarily due to slower growth in products over $10,000 and increased sales of lower-priced fine jewelry[63] Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA Margin, which both decreased Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin (in thousands) | Indicator | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Net Income | $1,235 | $3,751 | $795 | $7,120 | | Adjusted EBITDA | $7,737 | $9,623 | $13,284 | $17,997 | | Net Income Margin | 1.1% | 3.4% | 0.4% | 3.4% | | Adjusted EBITDA Margin | 7.0% | 8.8% | 6.4% | 8.6% | - For the three months ended June 30, 2023, Adjusted EBITDA decreased by 19.6%, and Adjusted EBITDA Margin decreased by 180 basis points[312] - Adjusted EBITDA is defined as net income excluding interest expense, income taxes, depreciation expense, amortization of cloud-based software implementation costs, equity-based compensation expense, showroom pre-opening expenses, loss on debt extinguishment, certain non-operating expenses and income, and other unusual and/or infrequent costs[46] Liquidity and Capital Resources This section discusses liquidity, cash flow, and capital resources, with $149.6 million in cash and negative working capital - As of June 30, 2023, the company had a cash balance of $149.6 million and negative working capital of $23.6 million (excluding restricted cash), attributed to high inventory turnover and collecting from customers before paying suppliers[71] - The company expects, based on current forecasts, to have sufficient liquidity to meet anticipated operating, debt service, and tax distribution requirements for at least the next 12 months following the filing of this quarterly report[342] - Future liquidity needs may include public company costs, payments under the TRA, and state and federal income taxes, with TRA payments expected to be substantial[49][141] - The SVB credit facility agreement contains covenants that may restrict Brilliant Earth, LLC's ability to make distributions, which would limit or impair the company's ability to declare and pay cash dividends if Brilliant Earth, LLC lacks sufficient funds for distributions[103][104] Cash Flow Analysis This section analyzes cash flows, showing a $6 million increase in operating cash flow and a $11.4 million decrease in financing outflow Cash Flow Summary (in thousands) | Category | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change | | :--- | :----------------------- | :----------------------- | :--- | | Net Cash Provided by Operating Activities | $10,870 | $4,873 | +$5,997 | | Net Cash Used in Investing Activities | $(9,159) | $(4,068) | -$(5,091) | | Net Cash Used in Financing Activities | $(6,753) | $(18,137) | +$11,384 | - Cash flow from operating activities increased by $6 million, primarily due to a $1.9 million increase in non-cash expenses and a $10.4 million increase in changes in assets and liabilities related to operating activities, partially offset by a $6.3 million decrease in net income[73] - Cash outflow from investing activities increased by $5.1 million, primarily due to increased purchases of property and equipment related to new leased facilities[75] - Cash outflow from financing activities decreased by $11.4 million, primarily due to a $9.8 million decrease in tax distributions to members and the absence of 2022 debt activities (Runway term loan repayment and SVB term loan issuance) in 2023, partially offset by SVB term loan payments[76] Critical Accounting Policies and Estimates No material changes occurred in critical accounting policies and estimates from the 2022 Form 10-K - The company's critical accounting policies and estimates have not materially changed from those described in the 2022 Form 10-K[105] Recent Accounting Pronouncements Refer to Note 1 of the unaudited condensed consolidated financial statements for recent accounting pronouncements - For information on recent accounting pronouncements, refer to Note 1 of the unaudited condensed consolidated financial statements[106] JOBS Act This section explains the company's 'emerging growth company' status under the JOBS Act, allowing delayed accounting standard adoption - The company qualifies as an "emerging growth company" under the JOBS Act and has elected to delay adoption of new or revised accounting standards, which may make its unaudited condensed consolidated financial statements not comparable to non-emerging growth companies[82] - The company will remain an emerging growth company until the earliest of: the last day of the fiscal year following the fifth anniversary of its IPO (December 31, 2026); annual gross revenues of at least $1.235 billion; becoming a large accelerated filer (market value of common equity held by non-affiliates exceeding $700 million); or issuing more than $1.07 billion in non-convertible debt during the prior three-year period[108] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[109] Item 4. Controls and Procedures Management assessed disclosure controls and procedures as effective, with no material changes in internal control over financial reporting - Management assessed that, as of June 30, 2023, the company's disclosure controls and procedures were effective at a reasonable assurance level[110] - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2023[111] - Management recognizes that any control and procedure, no matter how well designed and operated, can only provide reasonable assurance of achieving its control objectives[154] Part II - Other Information Item 1. Legal Proceedings This section discusses potential legal proceedings, including a PAGA lawsuit, with no expected material impact on operations - The company does not believe any current legal proceedings will materially impact its business, consolidated financial condition, or results of operations[88] - In December 2022, the company received a representative action lawsuit under California's Private Attorneys General Act (PAGA) from a former employee alleging violations of California labor laws; the company is actively defending and has appealed the denial of a motion to compel arbitration[112] - Currently, any liability related to the PAGA lawsuit is uncertain or not reasonably estimable[112] Item 1A. Risk Factors No material changes occurred in the risk factors disclosed in the 2022 Form 10-K, which could adversely affect the company - There have been no material changes to the risk factors disclosed by the company in its 2022 Form 10-K[122] - These risk factors could materially and adversely affect the company's business, financial condition, liquidity, results of operations, and capital position, potentially causing actual results to differ materially from historical results or forward-looking statements[122] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities No unregistered equity sales, use of proceeds, or issuer purchases of equity securities occurred during the period - None[113] Item 3. Defaults Upon Senior Securities This item is not applicable - Not applicable[123] Item 4. Mine Safety Disclosures The company has no mine safety disclosures - None[124] Item 5. Other Information The company has no other information to disclose - None[114] Item 6. Exhibits This section lists exhibits filed with the quarterly report, including officer certifications and corporate documents - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer (31.1, 31.2, 32.1, 32.2), Amended and Restated Certificate of Incorporation (3.1), Amended and Restated Bylaws (3.2), specimen Class A common stock certificate (4.1), and various Inline XBRL taxonomy extension files (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[92][93][116][117][125] Signatures This section contains the report signed by Jeffrey Kuo, Chief Financial Officer of Brilliant Earth Group, Inc. - The report was signed by Jeffrey Kuo, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), on behalf of Brilliant Earth Group, Inc. on August 10, 2023[126]