|
☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
87-0634302
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
799 West Coliseum Way
|
|
|
Midvale
|
|
|
Utah
|
|
84047
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $0.0001 par value
|
|
OSTK
|
|
NASDAQ Global Market
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☒
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
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|
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Page
|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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the impact that the novel coronavirus, or COVID-19, pandemic may have on our business and the industries in which we and our subsidiaries and investee entities operate;
|
•
|
the impact that any litigation or regulatory matters could have on our business, financial condition, results of operations, and cash flows;
|
•
|
the possibility that we will be unable to generate sufficient cash flow from operations, raise any required additional capital or borrow additional funds, in the case of capital-raising or borrowing on acceptable terms, to successfully conduct our business or pursue our initiatives in a timely manner or at all;
|
•
|
any increases in the price of importing into the U.S. the types of merchandise we sell in our retail business or other supply chain challenges that limit our access to merchandise we sell in our retail business;
|
•
|
any difficulties we may encounter as a result of our reliance on third-parties that we do not control for the performance of critical functions material to our business;
|
•
|
any strategic transactions, restructurings or other changes we may make to our business;
|
•
|
any downturn in the U.S. housing industry or other changes in U.S. and global economic conditions or U.S. consumer spending, as a result of the COVID-19 pandemic or otherwise;
|
•
|
our exposure to cyber security risks, risks of data loss and other security breaches;
|
•
|
any challenges that result in the unavailability of our Website or reduced performance of our transaction systems;
|
•
|
the possibility that we are unable to protect our proprietary technology and to obtain trademark protection for our marks;
|
•
|
current claims of intellectual property infringement to which we are subject and additional infringement claims to which we may become subject in the future;
|
•
|
the commercial, competitive, technical, operational, financial, regulatory, legal, reputational, marketing and other obstacles we face in trying to create a profitable business from our blockchain initiatives, including tZERO;
|
•
|
the extensive regulatory regimes applicable to tZERO and the possibility that various tZERO subsidiaries or ventures do not receive the regulatory approval required to operate their anticipated businesses;
|
•
|
any losses or issues we may encounter as a consequence of accepting or holding bitcoin or other cryptocurrencies;
|
•
|
our inability to attract and retain key personnel;
|
•
|
the possibility that the cost of our current insurance policies may increase significantly or fail to adequately protect us as expected; and
|
•
|
the other risks described in this report or in our other public filings.
|
Overstock.com, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data)
|
|||||||
|
June 30,
2020 |
|
December 31,
2019 |
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
318,573
|
|
|
$
|
112,266
|
|
Restricted cash
|
2,637
|
|
|
2,632
|
|
||
Marketable securities at fair value
|
2,122
|
|
|
10,308
|
|
||
Accounts receivable, net of allowance for credit losses of $1,534 and $2,474 at June 30, 2020 and December 31, 2019, respectively
|
47,765
|
|
|
24,728
|
|
||
Inventories
|
6,340
|
|
|
5,840
|
|
||
Prepaids and other current assets
|
22,769
|
|
|
21,589
|
|
||
Total current assets
|
400,206
|
|
|
177,363
|
|
||
Property and equipment, net
|
126,795
|
|
|
130,028
|
|
||
Intangible assets, net
|
9,919
|
|
|
11,756
|
|
||
Goodwill
|
27,120
|
|
|
27,120
|
|
||
Equity securities
|
50,542
|
|
|
42,043
|
|
||
Operating lease right-of-use assets
|
23,387
|
|
|
25,384
|
|
||
Other long-term assets, net
|
7,173
|
|
|
4,033
|
|
||
Total assets
|
$
|
645,142
|
|
|
$
|
417,727
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
131,101
|
|
|
$
|
75,416
|
|
Accrued liabilities
|
144,110
|
|
|
88,197
|
|
||
Unearned revenue
|
89,705
|
|
|
41,821
|
|
||
Operating lease liabilities, current
|
4,785
|
|
|
6,603
|
|
||
Other current liabilities
|
4,332
|
|
|
3,962
|
|
||
Total current liabilities
|
374,033
|
|
|
215,999
|
|
||
Long-term debt, net
|
42,948
|
|
|
—
|
|
||
Operating lease liabilities, non-current
|
20,791
|
|
|
21,554
|
|
||
Other long-term liabilities
|
4,022
|
|
|
2,319
|
|
||
Total liabilities
|
441,794
|
|
|
239,872
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
|
|||||||
Continued on the following page
|
Overstock.com, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands, except per share data)
|
|||||||
|
June 30,
2020 |
|
December 31,
2019 |
||||
Stockholders' equity:
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value, authorized shares - 5,000
|
|
|
|
|
|
||
Series A-1, issued and outstanding - 4,204 and 4,210
|
—
|
|
|
—
|
|
||
Series B, issued and outstanding - 357 and 357
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 par value, authorized shares - 100,000
|
|
|
|
|
|
||
Issued shares - 43,885 and 42,790
|
|
|
|
|
|
||
Outstanding shares - 40,332 and 39,464
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
770,984
|
|
|
764,845
|
|
||
Accumulated deficit
|
(560,480
|
)
|
|
(580,390
|
)
|
||
Accumulated other comprehensive loss
|
(560
|
)
|
|
(568
|
)
|
||
Treasury stock at cost - 3,553 and 3,326
|
(70,537
|
)
|
|
(68,807
|
)
|
||
Equity attributable to stockholders of Overstock.com, Inc.
|
139,411
|
|
|
115,084
|
|
||
Equity attributable to noncontrolling interests
|
63,937
|
|
|
62,771
|
|
||
Total stockholders' equity
|
203,348
|
|
|
177,855
|
|
||
Total liabilities and stockholders' equity
|
$
|
645,142
|
|
|
$
|
417,727
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenue, net
|
|
|
|
|
|
|
|
|
|
|
|
||||
Retail
|
$
|
766,956
|
|
|
$
|
367,475
|
|
|
$
|
1,106,554
|
|
|
$
|
730,100
|
|
Other
|
15,588
|
|
|
6,234
|
|
|
27,563
|
|
|
11,338
|
|
||||
Total net revenue
|
782,544
|
|
|
373,709
|
|
|
1,134,117
|
|
|
741,438
|
|
||||
Cost of goods sold
|
|
|
|
|
|
|
|
|
|
|
|
||||
Retail
|
589,044
|
|
|
294,984
|
|
|
854,436
|
|
|
585,624
|
|
||||
Other
|
13,618
|
|
|
4,826
|
|
|
23,959
|
|
|
8,791
|
|
||||
Total cost of goods sold
|
602,662
|
|
|
299,810
|
|
|
878,395
|
|
|
594,415
|
|
||||
Gross profit
|
179,882
|
|
|
73,899
|
|
|
255,722
|
|
|
147,023
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
79,790
|
|
|
34,560
|
|
|
116,552
|
|
|
68,037
|
|
||||
Technology
|
33,678
|
|
|
33,153
|
|
|
66,474
|
|
|
68,586
|
|
||||
General and administrative
|
27,371
|
|
|
31,964
|
|
|
59,797
|
|
|
72,196
|
|
||||
Total operating expenses
|
140,839
|
|
|
99,677
|
|
|
242,823
|
|
|
208,819
|
|
||||
Operating income (loss)
|
39,043
|
|
|
(25,778
|
)
|
|
12,899
|
|
|
(61,796
|
)
|
||||
Interest income
|
614
|
|
|
630
|
|
|
886
|
|
|
1,033
|
|
||||
Interest expense
|
(588
|
)
|
|
(105
|
)
|
|
(788
|
)
|
|
(232
|
)
|
||||
Other income (expense), net
|
(4,171
|
)
|
|
(2,995
|
)
|
|
2,512
|
|
|
(9,267
|
)
|
||||
Income (loss) before income taxes
|
34,898
|
|
|
(28,248
|
)
|
|
15,509
|
|
|
(70,262
|
)
|
||||
Provision (benefit) for income taxes
|
517
|
|
|
(622
|
)
|
|
693
|
|
|
256
|
|
||||
Net income (loss)
|
34,381
|
|
|
(27,626
|
)
|
|
14,816
|
|
|
(70,518
|
)
|
||||
Less: Net loss attributable to noncontrolling interests
|
(1,975
|
)
|
|
(2,945
|
)
|
|
(5,207
|
)
|
|
(6,593
|
)
|
||||
Net income (loss) attributable to stockholders of Overstock.com, Inc.
|
$
|
36,356
|
|
|
$
|
(24,681
|
)
|
|
$
|
20,023
|
|
|
$
|
(63,925
|
)
|
Net income (loss) per common share—basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to common shares—basic
|
$
|
0.85
|
|
|
$
|
(0.69
|
)
|
|
$
|
0.48
|
|
|
$
|
(1.85
|
)
|
Weighted average common shares outstanding—basic
|
40,329
|
|
|
35,225
|
|
|
40,243
|
|
|
33,806
|
|
||||
Net income (loss) per common share—diluted:
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to common shares—diluted
|
$
|
0.84
|
|
|
$
|
(0.69
|
)
|
|
$
|
0.47
|
|
|
$
|
(1.85
|
)
|
Weighted average common shares outstanding—diluted
|
40,590
|
|
|
35,225
|
|
|
40,440
|
|
|
33,806
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income (loss)
|
$
|
34,381
|
|
|
$
|
(27,626
|
)
|
|
$
|
14,816
|
|
|
$
|
(70,518
|
)
|
Other comprehensive income
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on cash flow hedges, net of expense for taxes of $0, $0, $0, and $0
|
4
|
|
|
4
|
|
|
8
|
|
|
8
|
|
||||
Other comprehensive income
|
4
|
|
|
4
|
|
|
8
|
|
|
8
|
|
||||
Comprehensive income (loss)
|
34,385
|
|
|
(27,622
|
)
|
|
14,824
|
|
|
(70,510
|
)
|
||||
Less: Comprehensive loss attributable to noncontrolling interests
|
(1,975
|
)
|
|
(2,945
|
)
|
|
(5,207
|
)
|
|
(6,593
|
)
|
||||
Comprehensive income (loss) attributable to stockholders of Overstock.com, Inc.
|
$
|
36,360
|
|
|
$
|
(24,677
|
)
|
|
$
|
20,031
|
|
|
$
|
(63,917
|
)
|
Overstock.com, Inc.
Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(in thousands)
|
|||||||||||||||
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Accumulated deficit
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(596,723
|
)
|
|
$
|
(497,716
|
)
|
|
$
|
(580,390
|
)
|
|
$
|
(458,897
|
)
|
Net income (loss) attributable to stockholders of Overstock.com, Inc.
|
36,356
|
|
|
(24,681
|
)
|
|
20,023
|
|
|
(63,925
|
)
|
||||
Other
|
(113
|
)
|
|
—
|
|
|
(113
|
)
|
|
425
|
|
||||
Balance at end of period
|
$
|
(560,480
|
)
|
|
$
|
(522,397
|
)
|
|
$
|
(560,480
|
)
|
|
$
|
(522,397
|
)
|
Accumulated other comprehensive loss
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(564
|
)
|
|
$
|
(580
|
)
|
|
$
|
(568
|
)
|
|
$
|
(584
|
)
|
Net other comprehensive income
|
4
|
|
|
4
|
|
|
8
|
|
|
8
|
|
||||
Balance at end of period
|
$
|
(560
|
)
|
|
$
|
(576
|
)
|
|
$
|
(560
|
)
|
|
$
|
(576
|
)
|
Treasury stock
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(70,493
|
)
|
|
$
|
(68,753
|
)
|
|
$
|
(68,807
|
)
|
|
$
|
(66,757
|
)
|
Common stock repurchased through business combination
|
—
|
|
|
—
|
|
|
—
|
|
|
(643
|
)
|
||||
Tax withholding upon vesting of restricted stock
|
(44
|
)
|
|
7
|
|
|
(1,730
|
)
|
|
(1,346
|
)
|
||||
Balance at end of period
|
(70,537
|
)
|
|
(68,746
|
)
|
|
(70,537
|
)
|
|
(68,746
|
)
|
||||
Total equity attributable to stockholders of Overstock.com, Inc.
|
$
|
139,411
|
|
|
$
|
127,294
|
|
|
$
|
139,411
|
|
|
$
|
127,294
|
|
|
|
|
|
|
|
|
|
||||||||
Equity attributable to noncontrolling interests
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
61,376
|
|
|
$
|
74,731
|
|
|
$
|
62,771
|
|
|
$
|
78,960
|
|
Paid in capital for noncontrolling interest
|
5,000
|
|
|
—
|
|
|
5,000
|
|
|
—
|
|
||||
Net loss attributable to noncontrolling interests
|
(1,975
|
)
|
|
(2,945
|
)
|
|
(5,207
|
)
|
|
(6,593
|
)
|
||||
Other
|
(464
|
)
|
|
—
|
|
|
1,373
|
|
|
(581
|
)
|
||||
Total equity attributable to noncontrolling interests
|
$
|
63,937
|
|
|
$
|
71,786
|
|
|
$
|
63,937
|
|
|
$
|
71,786
|
|
|
|
|
|
|
|
|
|
||||||||
Total stockholders' equity
|
$
|
203,348
|
|
|
$
|
199,080
|
|
|
$
|
203,348
|
|
|
$
|
199,080
|
|
Overstock.com, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
|
|||||||
|
Six months ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Consolidated net income (loss)
|
$
|
14,816
|
|
|
$
|
(70,518
|
)
|
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
15,117
|
|
|
15,518
|
|
||
Non-cash operating lease cost
|
3,029
|
|
|
2,992
|
|
||
Stock-based compensation to employees and directors
|
5,733
|
|
|
9,156
|
|
||
Impairment of equity securities
|
—
|
|
|
4,214
|
|
||
Losses on equity method securities
|
6,013
|
|
|
3,058
|
|
||
Gain on disposal of business
|
(10,705
|
)
|
|
—
|
|
||
Other non-cash adjustments
|
1,960
|
|
|
1,360
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Accounts receivable, net
|
(24,652
|
)
|
|
12,295
|
|
||
Inventories
|
(500
|
)
|
|
2,231
|
|
||
Prepaids and other current assets
|
(3,178
|
)
|
|
3,311
|
|
||
Other long-term assets, net
|
171
|
|
|
(547
|
)
|
||
Accounts payable
|
54,952
|
|
|
(31,722
|
)
|
||
Accrued liabilities
|
61,625
|
|
|
(5,317
|
)
|
||
Unearned revenue
|
48,109
|
|
|
(9,628
|
)
|
||
Operating lease liabilities
|
(3,612
|
)
|
|
(2,340
|
)
|
||
Other long-term liabilities
|
1,565
|
|
|
85
|
|
||
Net cash provided by (used in) operating activities
|
170,443
|
|
|
(65,852
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchase of equity securities
|
(170
|
)
|
|
(2,500
|
)
|
||
Proceeds from sale of equity securities and marketable securities
|
6,306
|
|
|
7,082
|
|
||
Acquisitions of businesses, net of cash acquired
|
—
|
|
|
4,886
|
|
||
Expenditures for property and equipment
|
(9,399
|
)
|
|
(10,586
|
)
|
||
Deconsolidation of cash of Medici Land Governance, Inc.
|
(4,056
|
)
|
|
—
|
|
||
Other investing activities, net
|
(659
|
)
|
|
(1,997
|
)
|
||
Net cash used in investing activities
|
(7,978
|
)
|
|
(3,115
|
)
|
||
|
|||||||
Continued on the following page
|
|||||||
|
Overstock.com, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
|
|||||||
|
Six months ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payment on long-term debt
|
(779
|
)
|
|
—
|
|
||
Proceeds from long-term debt
|
47,500
|
|
|
—
|
|
||
Proceeds from sale of common stock, net of offering costs
|
2,848
|
|
|
52,112
|
|
||
Payments of taxes withheld upon vesting of restricted stock
|
(1,730
|
)
|
|
(1,346
|
)
|
||
Other financing activities, net
|
(3,992
|
)
|
|
(1,006
|
)
|
||
Net cash provided by financing activities
|
43,847
|
|
|
49,760
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
206,312
|
|
|
(19,207
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
114,898
|
|
|
142,814
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
321,210
|
|
|
$
|
123,607
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period:
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
$
|
588
|
|
|
$
|
173
|
|
Income taxes paid (refunded), net
|
65
|
|
|
(469
|
)
|
||
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Purchases of property and equipment included in accounts payable and accrued liabilities
|
$
|
1,053
|
|
|
$
|
43
|
|
Recognition of right-of-use assets upon adoption of ASC 842
|
—
|
|
|
30,968
|
|
||
Deposit applied to business combination purchase price
|
—
|
|
|
7,347
|
|
||
Equity method security applied to business combination purchase price
|
—
|
|
|
3,800
|
|
•
|
Level 1—Quoted prices for identical instruments in active markets;
|
•
|
Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
|
•
|
Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
|
Fair Value Measurements at June 30, 2020:
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents - Money market mutual funds
|
$
|
2,814
|
|
|
$
|
2,814
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities, at fair value
|
500
|
|
|
500
|
|
|
—
|
|
|
—
|
|
||||
Marketable securities, at fair value
|
2,122
|
|
|
2,122
|
|
|
—
|
|
|
—
|
|
||||
Trading securities held in a "rabbi trust" (1)
|
108
|
|
|
108
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
5,544
|
|
|
$
|
5,544
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred compensation accrual "rabbi trust" (2)
|
$
|
112
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
112
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
— Trading securities held in a rabbi trust are included in Prepaids and other current assets and Other long-term assets, net in the consolidated balance sheets.
|
(2)
|
— Non-qualified deferred compensation in a rabbi trust is included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.
|
|
June 30,
2020 |
|
December 31, 2019
|
|||||
Computer hardware and software
|
$
|
230,950
|
|
|
$
|
223,309
|
|
|
Building
|
69,245
|
|
|
69,266
|
|
|||
Furniture and equipment
|
17,314
|
|
|
17,739
|
|
|||
Land
|
12,781
|
|
|
12,781
|
|
|||
Leasehold improvements
|
11,988
|
|
|
11,921
|
|
|||
Building machinery and equipment
|
9,782
|
|
|
9,796
|
|
|||
Land improvements
|
7,004
|
|
|
7,003
|
|
|||
|
359,064
|
|
|
351,815
|
|
|||
Less: accumulated depreciation
|
(232,269
|
)
|
|
(221,787
|
)
|
|||
Total property and equipment, net
|
$
|
126,795
|
|
|
$
|
130,028
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Capitalized internal-use software and website development
|
$
|
4,658
|
|
|
$
|
4,101
|
|
|
$
|
7,590
|
|
|
$
|
7,550
|
|
Depreciation of internal-use software and website development
|
$
|
3,577
|
|
|
$
|
3,124
|
|
|
$
|
6,923
|
|
|
$
|
6,361
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Cost of goods sold - retail
|
$
|
177
|
|
|
$
|
171
|
|
|
$
|
367
|
|
|
$
|
346
|
|
Technology
|
4,768
|
|
|
4,892
|
|
|
9,539
|
|
|
10,067
|
|
||||
General and administrative
|
1,685
|
|
|
1,277
|
|
|
3,370
|
|
|
2,501
|
|
||||
Total depreciation
|
$
|
6,630
|
|
|
$
|
6,340
|
|
|
$
|
13,276
|
|
|
$
|
12,914
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Intangible assets subject to amortization, gross
|
$
|
30,267
|
|
|
$
|
30,284
|
|
Less: accumulated amortization of intangible assets subject to amortization
|
(20,348
|
)
|
|
(18,528
|
)
|
||
Total intangible assets, net
|
$
|
9,919
|
|
|
$
|
11,756
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Technology
|
$
|
846
|
|
|
$
|
938
|
|
|
$
|
1,693
|
|
|
$
|
1,791
|
|
Sales and marketing
|
10
|
|
|
16
|
|
|
21
|
|
|
32
|
|
||||
General and administrative
|
62
|
|
|
170
|
|
|
127
|
|
|
(659
|
)
|
||||
Total amortization
|
$
|
918
|
|
|
$
|
1,124
|
|
|
$
|
1,841
|
|
|
$
|
1,164
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Impairments and downward adjustments of equity securities without readily determinable fair values
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,958
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net losses recognized during the period on equity securities and marketable securities
|
$
|
(836
|
)
|
|
$
|
(500
|
)
|
|
$
|
(2,455
|
)
|
|
$
|
(1,118
|
)
|
Less: Net gains recognized during the period on equity securities and marketable securities sold
|
228
|
|
|
—
|
|
|
2,161
|
|
|
—
|
|
||||
Unrealized losses during the reporting period on equity securities and marketable securities still held
|
$
|
(1,064
|
)
|
|
$
|
(500
|
)
|
|
$
|
(4,616
|
)
|
|
$
|
(1,118
|
)
|
|
Ownership interest
|
Bitt Inc.
|
21%
|
Boston Security Token Exchange LLC
|
50%
|
Chainstone Labs, Inc.
|
29%
|
FinClusive Capital, Inc.
|
11%
|
GrainChain, Inc.
|
18%
|
Medici Land Governance, Inc.
|
35%
|
Minds, Inc.
|
24%
|
PeerNova, Inc.
|
11%
|
SettleMint NV
|
29%
|
Spera, Inc.
|
19%
|
VinX Network Ltd.
|
29%
|
Voatz, Inc.
|
20%
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net loss recognized on our proportionate share of the net losses of our equity method securities and amortization of the basis difference
|
$
|
3,545
|
|
|
$
|
2,033
|
|
|
$
|
6,013
|
|
|
$
|
3,058
|
|
Impairments on equity method securities
|
—
|
|
|
1,256
|
|
|
—
|
|
|
1,256
|
|
||||
Net loss recognized during the period on equity method securities sold
|
—
|
|
|
—
|
|
|
—
|
|
|
524
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
|
|
|
||||
Accounts payable accruals
|
$
|
36,732
|
|
|
$
|
15,692
|
|
Accrued compensation and other related costs
|
25,305
|
|
|
13,012
|
|
||
Accrued marketing expenses
|
21,062
|
|
|
13,063
|
|
||
Allowance for returns
|
18,657
|
|
|
11,107
|
|
||
Sales and other taxes payable
|
14,222
|
|
|
10,105
|
|
||
Accrued freight
|
11,706
|
|
|
5,954
|
|
||
Accrued loss contingencies
|
2,337
|
|
|
9,550
|
|
||
Other accrued expenses
|
14,089
|
|
|
9,714
|
|
||
Total accrued liabilities
|
$
|
144,110
|
|
|
$
|
88,197
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Operating right-of-use assets
|
$
|
23,387
|
|
|
$
|
25,384
|
|
Operating lease liabilities, current
|
4,785
|
|
|
6,603
|
|
||
Operating lease liabilities, non-current
|
20,791
|
|
|
21,554
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Operating lease cost
|
$
|
1,936
|
|
|
$
|
2,363
|
|
|
$
|
4,068
|
|
|
$
|
4,868
|
|
Short-term lease cost
|
8
|
|
|
28
|
|
|
19
|
|
|
62
|
|
||||
Variable lease cost
|
471
|
|
|
442
|
|
|
888
|
|
|
972
|
|
|
Six months ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating cash flows used in operating leases
|
$
|
(4,658
|
)
|
|
$
|
(4,202
|
)
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
1,767
|
|
|
$
|
17,090
|
|
Weighted-average remaining lease term - operating leases
|
6.05 years
|
|
|
7.02 years
|
|
||
Weighted-average discount rate - operating leases
|
8
|
%
|
|
8
|
%
|
Payments due by period
|
|
Amount
|
||
2020 (Remainder)
|
|
$
|
3,522
|
|
2021
|
|
6,214
|
|
|
2022
|
|
6,087
|
|
|
2023
|
|
5,152
|
|
|
2024
|
|
3,965
|
|
|
Thereafter
|
|
7,651
|
|
|
Total lease payments
|
|
32,591
|
|
|
Less interest
|
|
7,015
|
|
|
Present value of lease liabilities
|
|
$
|
25,576
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Cost of goods sold — retail
|
$
|
49
|
|
|
$
|
54
|
|
|
$
|
103
|
|
|
$
|
101
|
|
Sales and marketing
|
309
|
|
|
533
|
|
|
697
|
|
|
974
|
|
||||
Technology
|
447
|
|
|
1,670
|
|
|
1,362
|
|
|
2,897
|
|
||||
General and administrative
|
1,660
|
|
|
2,914
|
|
|
3,571
|
|
|
5,184
|
|
||||
Total stock-based compensation
|
$
|
2,465
|
|
|
$
|
5,171
|
|
|
$
|
5,733
|
|
|
$
|
9,156
|
|
|
Six months ended
June 30, 2020 |
|||||
|
Units
|
|
Weighted
Average Grant Date Fair Value |
|||
Outstanding—beginning of year
|
1,051
|
|
|
$
|
26.22
|
|
Granted at fair value
|
471
|
|
|
8.89
|
|
|
Vested
|
(679
|
)
|
|
23.83
|
|
|
Forfeited
|
(101
|
)
|
|
25.91
|
|
|
Outstanding—end of period
|
742
|
|
|
$
|
17.45
|
|
|
Amount
|
||
Unearned revenue at December 31, 2018
|
$
|
50,578
|
|
Increase due to deferral of revenue at period end
|
36,622
|
|
|
Decrease due to beginning contract liabilities recognized as revenue
|
(45,379
|
)
|
|
Unearned revenue at December 31, 2019
|
41,821
|
|
|
Increase due to deferral of revenue at period end
|
80,287
|
|
|
Decrease due to beginning contract liabilities recognized as revenue
|
(32,403
|
)
|
|
Unearned revenue at June 30, 2020
|
$
|
89,705
|
|
|
Amount
|
||
Allowance for returns at December 31, 2018
|
$
|
15,261
|
|
Additions to the allowance
|
117,040
|
|
|
Deductions from the allowance
|
(121,194
|
)
|
|
Allowance for returns at December 31, 2019
|
11,107
|
|
|
Additions to the allowance
|
92,510
|
|
|
Deductions from the allowance
|
(84,960
|
)
|
|
Allowance for returns at June 30, 2020
|
$
|
18,657
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Gain on deconsolidation of net assets of Medici Land Governance, Inc.
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,741
|
|
|
$
|
—
|
|
Impairment of equity securities
|
—
|
|
|
(1,256
|
)
|
|
—
|
|
|
(4,214
|
)
|
||||
Gain/(loss) on equity securities and marketable securities
|
(836
|
)
|
|
220
|
|
|
(2,455
|
)
|
|
(1,376
|
)
|
||||
Equity method losses
|
(3,545
|
)
|
|
(2,033
|
)
|
|
(6,013
|
)
|
|
(3,058
|
)
|
||||
Other
|
210
|
|
|
74
|
|
|
239
|
|
|
(619
|
)
|
||||
Total other income (expense), net
|
$
|
(4,171
|
)
|
|
$
|
(2,995
|
)
|
|
$
|
2,512
|
|
|
$
|
(9,267
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc.
|
$
|
36,356
|
|
|
$
|
(24,681
|
)
|
|
$
|
20,023
|
|
|
$
|
(63,925
|
)
|
Less: Preferred stock TZROP repurchase loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(425
|
)
|
||||
Less: Preferred stock dividends - declared and accumulated
|
179
|
|
|
19
|
|
|
198
|
|
|
38
|
|
||||
Undistributed income (loss)
|
36,177
|
|
|
(24,700
|
)
|
|
19,825
|
|
|
(63,538
|
)
|
||||
Less: Undistributed income (loss) allocated to participating securities
|
2,039
|
|
|
(333
|
)
|
|
687
|
|
|
(892
|
)
|
||||
Net income (loss) attributable to common shares
|
$
|
34,138
|
|
|
$
|
(24,367
|
)
|
|
$
|
19,138
|
|
|
$
|
(62,646
|
)
|
Net income (loss) per common share—basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to common shares—basic
|
$
|
0.85
|
|
|
$
|
(0.69
|
)
|
|
$
|
0.48
|
|
|
$
|
(1.85
|
)
|
Weighted average common shares outstanding—basic
|
40,329
|
|
|
35,225
|
|
|
40,243
|
|
|
33,806
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Stock options and restricted stock awards
|
261
|
|
|
—
|
|
|
197
|
|
|
—
|
|
||||
Weighted average common shares outstanding—diluted
|
40,590
|
|
|
35,225
|
|
|
40,440
|
|
|
33,806
|
|
||||
Net income (loss) attributable to common shares—diluted
|
$
|
0.84
|
|
|
$
|
(0.69
|
)
|
|
$
|
0.47
|
|
|
$
|
(1.85
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Stock options and restricted stock units
|
168
|
|
|
904
|
|
|
451
|
|
|
967
|
|
|
Three months ended June 30,
|
||||||||||||||||||
|
Retail
|
|
tZERO
|
|
MVI
|
|
Other
|
|
Total
|
||||||||||
2020
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
766,956
|
|
|
$
|
12,737
|
|
|
$
|
2,851
|
|
|
$
|
—
|
|
|
$
|
782,544
|
|
Cost of goods sold
|
589,044
|
|
|
10,769
|
|
|
2,849
|
|
|
—
|
|
|
602,662
|
|
|||||
Gross profit
|
177,912
|
|
|
1,968
|
|
|
2
|
|
|
—
|
|
|
179,882
|
|
|||||
Operating expenses
|
124,991
|
|
|
11,216
|
|
|
2,543
|
|
|
2,089
|
|
|
140,839
|
|
|||||
Interest and other income (expense), net (1)
|
(117
|
)
|
|
(1,268
|
)
|
|
(2,760
|
)
|
|
—
|
|
|
(4,145
|
)
|
|||||
Income (loss) before income taxes
|
$
|
52,804
|
|
|
$
|
(10,516
|
)
|
|
$
|
(5,301
|
)
|
|
$
|
(2,089
|
)
|
|
34,898
|
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
517
|
|
|||||||||
Net income (2)
|
|
|
|
|
|
|
|
|
$
|
34,381
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
367,475
|
|
|
$
|
5,551
|
|
|
$
|
683
|
|
|
$
|
—
|
|
|
$
|
373,709
|
|
Cost of goods sold
|
294,984
|
|
|
4,143
|
|
|
683
|
|
|
—
|
|
|
299,810
|
|
|||||
Gross profit
|
72,491
|
|
|
1,408
|
|
|
—
|
|
|
—
|
|
|
73,899
|
|
|||||
Operating expenses
|
81,596
|
|
|
11,743
|
|
|
2,903
|
|
|
3,435
|
|
|
99,677
|
|
|||||
Interest and other income (expense), net (1)
|
40
|
|
|
340
|
|
|
(2,847
|
)
|
|
(3
|
)
|
|
(2,470
|
)
|
|||||
Loss before income taxes
|
$
|
(9,065
|
)
|
|
$
|
(9,995
|
)
|
|
$
|
(5,750
|
)
|
|
$
|
(3,438
|
)
|
|
(28,248
|
)
|
|
Benefit for income taxes
|
|
|
|
|
|
|
|
|
(622
|
)
|
|||||||||
Net loss (2)
|
|
|
|
|
|
|
|
|
$
|
(27,626
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30,
|
||||||||||||||||||
|
Retail
|
|
tZERO
|
|
MVI
|
|
Other
|
|
Total
|
||||||||||
2020
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
1,106,554
|
|
|
$
|
22,976
|
|
|
$
|
4,425
|
|
|
$
|
162
|
|
|
$
|
1,134,117
|
|
Cost of goods sold
|
854,436
|
|
|
19,536
|
|
|
4,423
|
|
|
—
|
|
|
878,395
|
|
|||||
Gross profit
|
252,118
|
|
|
3,440
|
|
|
2
|
|
|
162
|
|
|
255,722
|
|
|||||
Operating expenses
|
207,826
|
|
|
23,474
|
|
|
5,451
|
|
|
6,072
|
|
|
242,823
|
|
|||||
Interest and other income (expense), net (1)
|
(416
|
)
|
|
(3,050
|
)
|
|
6,073
|
|
|
3
|
|
|
2,610
|
|
|||||
Income (loss) before income taxes
|
$
|
43,876
|
|
|
$
|
(23,084
|
)
|
|
$
|
624
|
|
|
$
|
(5,907
|
)
|
|
15,509
|
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
693
|
|
|||||||||
Net income (2)
|
|
|
|
|
|
|
|
|
$
|
14,816
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net revenue
|
$
|
730,100
|
|
|
$
|
10,047
|
|
|
$
|
1,291
|
|
|
$
|
—
|
|
|
$
|
741,438
|
|
Cost of goods sold
|
585,624
|
|
|
7,500
|
|
|
1,291
|
|
|
—
|
|
|
594,415
|
|
|||||
Gross profit
|
144,476
|
|
|
2,547
|
|
|
—
|
|
|
—
|
|
|
147,023
|
|
|||||
Operating expenses
|
166,929
|
|
|
27,297
|
|
|
7,157
|
|
|
7,436
|
|
|
208,819
|
|
|||||
Interest and other income (expense), net (1)
|
175
|
|
|
(623
|
)
|
|
(8,011
|
)
|
|
(7
|
)
|
|
(8,466
|
)
|
|||||
Loss before income taxes
|
$
|
(22,278
|
)
|
|
$
|
(25,373
|
)
|
|
$
|
(15,168
|
)
|
|
$
|
(7,443
|
)
|
|
(70,262
|
)
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
256
|
|
|||||||||
Net loss (2)
|
|
|
|
|
|
|
|
|
$
|
(70,518
|
)
|
(1)
|
— Excludes intercompany transactions eliminated in consolidation, which consist primarily of service fees and interest. The net amounts of these intercompany transactions were $1.2 million and $491,000 for the three months ended June 30, 2020 and 2019, and $2.3 million and $907,000 for the six months ended June 30, 2020 and 2019.
|
(2)
|
— Net income (loss) presented for segment reporting purposes is before any adjustments attributable to noncontrolling interests.
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
SpeedRoute
|
|
|
|
||||
Net capital
|
$
|
1,535
|
|
|
$
|
850
|
|
Required net capital
|
364
|
|
|
145
|
|
||
Net capital, in excess of required
|
$
|
1,171
|
|
|
$
|
705
|
|
Net capital ratio
|
3.55
|
|
|
2.56
|
|
||
|
|
|
|
||||
tZERO ATS, LLC
|
|
|
|
||||
Net capital
|
$
|
139
|
|
|
$
|
110
|
|
Required net capital
|
5
|
|
|
5
|
|
||
Net capital, in excess of required
|
$
|
134
|
|
|
$
|
105
|
|
Net capital ratio
|
0.14
|
|
|
0.27
|
|
•
|
Improve Mobile Experience - As more website visitors move to mobile, we are focusing on ensuring our mobile experience is fast, frictionless, and meets the unique needs of the mobile shopping journey. We believe an improved mobile experience improves product findability, conversion, search engine rankings, and organic traffic.
|
•
|
Overhaul Discounting and Pricing Experience - "Smart Value" is the central brand pillar of our value proposition. We believe clarifying our pricing and discounting experience allows customers to more confidently purchase at Overstock. Savvy shoppers expect a "smart deal," including saving through coupons, site sales, Club O rewards and financing. We have historically offered free shipping (over $45) but during the COVID-19 pandemic, in order to serve our customers during this challenging time, we are offering free shipping on everything to the continental U.S. We believe our net promoter score (NPS), repeat purchase rates and conversion will improve as we better optimize the mix of offers and clarify the pricing and discounting experience.
|
•
|
Real Time Performance and SKU Profitability - We are improving our ability to address site, assortment and pricing issues more quickly by enhancing our real-time visibility into site, category, and marketing channel performance. We believe this initiative allows us to improve margin by more quickly resolving site issues for an improved customer experience.
|
•
|
Expand Partner Sponsored Marketing - We are expanding the "Overstock Sponsored Product" program, a platform for our drop ship partners to promote their products to shoppers through a cost-per-click auction platform. In addition, we have implemented a marketing allowance program across our partner network. This marketing allowance program allows us to optimize the marketing promotion type, mix and on-sale assortment to better meet the needs of our target customer segments and adapt to seasonal relevance.
|
•
|
Enable existing keiretsu companies to extend runway to profitability - The companies in Medici Ventures' keiretsu continue to release products into production. Medici Ventures supports its keiretsu companies by offering a variety of services including development, design, public relations services, and assistance in raising capital from third parties to extend the companies' runway to profitability.
|
•
|
Educate the public and policy makers on blockchain technologies - Medici Ventures works to increase general knowledge of blockchain technology, use cases, and corresponding value through speaking opportunities, article publication, policy maker outreach, and other public relations work.
|
•
|
Opportunistically approach future partnerships - Medici Ventures continues to review and seek out strategic opportunities to take ownership interests in seed-stage and startup companies that effectively use blockchain technology. This includes looking for companies that can effectively use Medici Ventures' enterprise-level technology development and design talent.
|
•
|
Promote trading - tZERO ATS is focused on quoting for trading high-quality digital securities. tZERO ATS, LLC is working with prospective issuers spanning various industries, including real estate, technology, health care and sports, as they seek to structure and issue new digital securities using the tZERO Technology Stack, as well as to provide liquidity to existing investors. Additionally, tZERO is enhancing the tZERO Technology Stack to support third party issuance protocols in order to support securities which have been digitally enabled by other technology companies and is cultivating relationships with established investment banks to help prospective issuers raise capital, prior to tokenizing and trading on the tZERO ATS.
|
•
|
Enhance liquidity - tZERO ATS is focused on enhancing liquidity. To achieve this, tZERO ATS, LLC is in discussions with several broker-dealers interested in subscribing to the tZERO ATS, which would enable their customers to trade digital securities traded on the ATS. tZERO also continues to develop new trading venues for digital securities such as BSTX as it seeks regulatory approval for a U.S. national exchange facility, as well as working to launch tZERO Markets (subject to regulatory approval) to support further investors who wish to access such trading venues.
|
•
|
Create a world class trading experience - tZERO continues to seek opportunities to enhance the tZERO Technology Stack and improve investors' trading experience for all types of financial products. tZERO is working to allow digital securities to be traded via a mobile application. It is also developing further enhancements of tZERO Crypto's separate wallet and exchange services, such as ensuring it is accessible on a web platform. tZERO believes a world-class trading experience will be key to investors' adoption of digital securities and tZERO's products and services.
|
•
|
Advocacy - tZERO operates businesses which are subject to complex and often uncertain legal environments and believes active engagement with regulatory authorities is necessary to realize the full potential of its business. tZERO continues, in partnership with other industry participants, to advocate regulatory reform with legislators and regulators in order to spur market innovation through the adoption of distributed ledger technology.
|
|
Three months ended
June 30, |
|
|
|
|
|
Six months ended
June 30, |
|
|
|
|
||||||||||||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
||||||||||||||
Revenue, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Retail
|
$
|
766,956
|
|
|
$
|
367,475
|
|
|
$
|
399,481
|
|
|
108.7
|
%
|
|
$
|
1,106,554
|
|
|
$
|
730,100
|
|
|
$
|
376,454
|
|
|
51.6
|
%
|
Other
|
15,588
|
|
|
6,234
|
|
|
9,354
|
|
|
150.0
|
%
|
|
27,563
|
|
|
11,338
|
|
|
16,225
|
|
|
143.1
|
%
|
||||||
Total revenue, net
|
$
|
782,544
|
|
|
$
|
373,709
|
|
|
$
|
408,835
|
|
|
109.4
|
%
|
|
$
|
1,134,117
|
|
|
$
|
741,438
|
|
|
$
|
392,679
|
|
|
53.0
|
%
|
|
|
Three months ended
June 30, 2020 |
||||||
Change in the Estimate of Average Transit Times (Days)
|
|
Increase (Decrease)
Revenue
|
|
Increase (Decrease)
Income Before Income Taxes
|
||||
2
|
|
$
|
(17,302
|
)
|
|
$
|
(3,654
|
)
|
1
|
|
$
|
(8,044
|
)
|
|
$
|
(1,690
|
)
|
As reported
|
|
As reported
|
|
|
As reported
|
|
||
-1
|
|
$
|
7,362
|
|
|
$
|
1,516
|
|
-2
|
|
$
|
21,678
|
|
|
$
|
4,667
|
|
|
Three months ended
June 30, |
|
|
|
|
|
Six months ended
June 30, |
|
|
|
|
||||||||||||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
||||||||||||||
Revenue, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Retail
|
$
|
766,956
|
|
|
$
|
367,475
|
|
|
$
|
399,481
|
|
|
108.7
|
%
|
|
$
|
1,106,554
|
|
|
$
|
730,100
|
|
|
$
|
376,454
|
|
|
51.6
|
%
|
Other
|
15,588
|
|
|
6,234
|
|
|
9,354
|
|
|
150.0
|
%
|
|
27,563
|
|
|
11,338
|
|
|
16,225
|
|
|
143.1
|
%
|
||||||
Total net revenue
|
782,544
|
|
|
373,709
|
|
|
408,835
|
|
|
109.4
|
%
|
|
1,134,117
|
|
|
741,438
|
|
|
392,679
|
|
|
53.0
|
%
|
||||||
Cost of goods sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Retail
|
589,044
|
|
|
294,984
|
|
|
294,060
|
|
|
99.7
|
%
|
|
854,436
|
|
|
585,624
|
|
|
268,812
|
|
|
45.9
|
%
|
||||||
Other
|
13,618
|
|
|
4,826
|
|
|
8,792
|
|
|
182.2
|
%
|
|
23,959
|
|
|
8,791
|
|
|
15,168
|
|
|
172.5
|
%
|
||||||
Total cost of goods sold
|
602,662
|
|
|
299,810
|
|
|
302,852
|
|
|
101.0
|
%
|
|
878,395
|
|
|
594,415
|
|
|
283,980
|
|
|
47.8
|
%
|
||||||
Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Retail
|
177,912
|
|
|
72,491
|
|
|
105,421
|
|
|
145.4
|
%
|
|
252,118
|
|
|
144,476
|
|
|
107,642
|
|
|
74.5
|
%
|
||||||
Other
|
1,970
|
|
|
1,408
|
|
|
562
|
|
|
39.9
|
%
|
|
3,604
|
|
|
2,547
|
|
|
1,057
|
|
|
41.5
|
%
|
||||||
Total gross profit
|
$
|
179,882
|
|
|
$
|
73,899
|
|
|
$
|
105,983
|
|
|
143.4
|
%
|
|
$
|
255,722
|
|
|
$
|
147,023
|
|
|
$
|
108,699
|
|
|
73.9
|
%
|
|
Q1 2019
|
|
Q2 2019
|
|
Q3 2019
|
|
Q4 2019
|
|
FY 2019
|
|
Q1 2020
|
|
Q2 2020
|
|||||||
Retail
|
19.9
|
%
|
|
19.7
|
%
|
|
20.0
|
%
|
|
20.7
|
%
|
|
20.1
|
%
|
|
21.9
|
%
|
|
23.2
|
%
|
Other
|
22.3
|
%
|
|
22.6
|
%
|
|
20.6
|
%
|
|
19.1
|
%
|
|
21.0
|
%
|
|
13.6
|
%
|
|
12.6
|
%
|
Combined
|
19.9
|
%
|
|
19.8
|
%
|
|
20.0
|
%
|
|
20.6
|
%
|
|
20.1
|
%
|
|
21.6
|
%
|
|
23.0
|
%
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||
Total revenue, net
|
$
|
782,544
|
|
|
100%
|
|
$
|
373,709
|
|
|
100%
|
|
$
|
1,134,117
|
|
|
100%
|
|
$
|
741,438
|
|
|
100%
|
Cost of goods sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product costs and other cost of goods sold
|
575,783
|
|
|
74%
|
|
283,502
|
|
|
76%
|
|
835,729
|
|
|
74%
|
|
560,719
|
|
|
76%
|
||||
Fulfillment and related costs
|
26,879
|
|
|
3%
|
|
16,308
|
|
|
4%
|
|
42,666
|
|
|
4%
|
|
33,696
|
|
|
5%
|
||||
Total cost of goods sold
|
602,662
|
|
|
77%
|
|
299,810
|
|
|
80%
|
|
878,395
|
|
|
77%
|
|
594,415
|
|
|
80%
|
||||
Gross profit
|
$
|
179,882
|
|
|
23%
|
|
$
|
73,899
|
|
|
20%
|
|
$
|
255,722
|
|
|
23%
|
|
$
|
147,023
|
|
|
20%
|
|
Three months ended
June 30, |
|
|
|
|
|
Six months ended
June 30, |
|
|
|
|
||||||||||||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
||||||||||||||
Sales and marketing expenses
|
$
|
79,790
|
|
|
$
|
34,560
|
|
|
$
|
45,230
|
|
|
130.9
|
%
|
|
$
|
116,552
|
|
|
$
|
68,037
|
|
|
$
|
48,515
|
|
|
71.3
|
%
|
Sales and marketing expenses as a percent of net revenues
|
10.2
|
%
|
|
9.2
|
%
|
|
|
|
|
|
|
|
10.3
|
%
|
|
9.2
|
%
|
|
|
|
|
||||||||
Advertising expense included in sales and marketing expenses
|
$
|
75,115
|
|
|
$
|
29,923
|
|
|
$
|
45,192
|
|
|
151.0
|
%
|
|
$
|
107,718
|
|
|
$
|
58,443
|
|
|
$
|
49,275
|
|
|
84.3
|
%
|
Advertising expense included in sales and marketing expense as a percent of net revenue
|
9.6
|
%
|
|
8.0
|
%
|
|
|
|
|
|
9.5
|
%
|
|
7.9
|
%
|
|
|
|
|
|
Three months ended
June 30, |
|
|
|
|
|
Six months ended
June 30, |
|
|
|
|
||||||||||||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
||||||||||||||
Technology expenses
|
$
|
33,678
|
|
|
$
|
33,153
|
|
|
$
|
525
|
|
|
1.6
|
%
|
|
$
|
66,474
|
|
|
$
|
68,586
|
|
|
$
|
(2,112
|
)
|
|
(3.1
|
)%
|
Technology expenses as a percent of net revenues
|
4.3
|
%
|
|
8.9
|
%
|
|
|
|
|
|
|
|
5.9
|
%
|
|
9.3
|
%
|
|
|
|
|
|
|
|
Three months ended
June 30, |
|
|
|
|
|
Six months ended
June 30, |
|
|
|
|
||||||||||||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
||||||||||||||
General and administrative expenses
|
$
|
27,371
|
|
|
$
|
31,964
|
|
|
$
|
(4,593
|
)
|
|
(14.4
|
)%
|
|
$
|
59,797
|
|
|
$
|
72,196
|
|
|
$
|
(12,399
|
)
|
|
(17.2
|
)%
|
General and administrative expenses as a percent of net revenues
|
3.5
|
%
|
|
8.6
|
%
|
|
|
|
|
|
|
|
5.3
|
%
|
|
9.7
|
%
|
|
|
|
|
|
|
|
Six months ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
Cash provided by (used in):
|
|
|
|
|
|
||
Operating activities
|
$
|
170,443
|
|
|
$
|
(65,852
|
)
|
Investing activities
|
(7,978
|
)
|
|
(3,115
|
)
|
||
Financing activities
|
43,847
|
|
|
49,760
|
|
Contractual Obligations
|
Total
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than 5 years
|
||||||||||
Operating leases (1)
|
$
|
32,591
|
|
|
$
|
6,692
|
|
|
$
|
12,039
|
|
|
$
|
7,312
|
|
|
$
|
6,548
|
|
Loan agreements (2)
|
62,490
|
|
|
5,264
|
|
|
10,528
|
|
|
5,149
|
|
|
41,549
|
|
|||||
Technology services (3)
|
1,932
|
|
|
1,315
|
|
|
617
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
97,013
|
|
|
$
|
13,271
|
|
|
$
|
23,184
|
|
|
$
|
12,461
|
|
|
$
|
48,097
|
|
(1)
|
— Represents the future minimum lease payments under non-cancellable operating leases. For information regarding our operating lease obligations, see Note 9—Leases, in the Notes to Unaudited Consolidated Financial Statements included in Item 1, Part I, Financial Statements (Unaudited) of this Quarterly Report on Form 10-Q.
|
(2)
|
— Represents future interest and principal payments on the financing agreements with Loan Core Capital Funding Corporation LLC. For information regarding our financing agreements, see Note 8—Borrowings, in the Notes to Unaudited Consolidated Financial Statements included in Item 1, Part I, Financial Statements (Unaudited) of this Quarterly Report on Form 10-Q.
|
(2)
|
— Represents the future payments for enforceable and legally binding long-term contractual agreements for technology services and finance leases for equipment included in such service agreements.
|
(a)
|
|
Exhibit Number
|
|
Exhibit Description
|
|
|
10.1
|
|
|
|
|
10.2
|
|
|
|
|
10.3
|
|
|
|
|
10.4*
|
|
|
|
|
10.5*
|
|
|
|
|
10.6*
|
|
|
|
|
31.1*
|
|
|
|
|
31.2*
|
|
|
|
|
32.1**
|
|
|
|
|
32.2**
|
|
|
|
|
101
|
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Stockholders' Equity, and (vi) Notes to Consolidated Financial Statements.
|
Date:
|
August 6, 2020
|
OVERSTOCK.COM, INC.
|
|
|
|
|
|
/s/ ADRIANNE B. LEE
|
|
|
Adrianne B. Lee
|
|
|
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
Participant:
|
|
Type of Grant:
|
Restricted Stock Units
|
Date of Grant:
|
|
Time Vesting Commencement Date:
|
|
Number of RSUs:
|
|
Delivery Date:
|
As set forth in the RSU Agreement
|
|
|
a.
|
Time Vesting. The RSUs will time vest over a period with, subject to the Participant’s Continuous Service on each vesting date, the RSUs time vesting as to of the total number of shares of Common Stock on each of the Time Vesting Commencement Date, the of the Time Vesting Commencement Date and the of the Time Vesting Commencement Date (the “Time Vesting Condition”). Any fractional shares will be allocated to the first vesting tranche.
|
b.
|
Liquidity Vesting. The RSUs will liquidity vest upon the occurrence of a Liquidity Event, so long as such Liquidity Event occurs within 10 years from the Date of Grant (the “Liquidity Vesting Condition”). “Liquidity Event” means the earlier of: (a) a Change in Control; or (b) the effective date of a Qualified IPO.
|
tZERO Group, Inc.:
|
|
By: ____________________________________
Signature
|
Name:
__________________________________
|
Title: __________________________________
|
Date: __________________________________
|
Participant:
|
|
By: ____________________________________
Signature
|
Name:
__________________________________
|
Title: __________________________________
|
Date: __________________________________
|
(i)
|
For Officers, Directors and Consultants: six (6) months;
|
(ii)
|
For other Employees: four (4) months;
|
Type of Grant:
|
Restricted Stock Units
|
Date of Grant:
|
June 1, 2020
|
Time Vesting:
|
RSUs will time vest in accordance with the existing vesting schedule applicable to the Options, including, for the avoidance of doubt, Options that are vested as of the Date of Grant
|
Number of RSUs:
|
Number of RSUs is equal to the amount to Options outstanding, including, for the avoidance of doubt, Options that are vested as of the Date of Grant
|
Expiration Date:
|
RSUs will expire 10 years from the date of grant of the corresponding Options
|
a.
|
Time Vesting. The RSUs will time vest as indicated under Time Vesting, above (the “Time Vesting Condition”).
|
b.
|
Liquidity Vesting. The RSUs will liquidity vest upon the occurrence of a Liquidity Event, so long as such Liquidity Event occurs within 10 years from the date of grant of the corresponding Options (the “Liquidity Vesting Condition”). “Liquidity Event” means the earlier of: (a) the date of: any merger, consolidation or other business combination transaction, pursuant to an agreement or agreements to which the Company is a party, of the Company with or into another corporation, entity or person, other than a transaction in which the stockholders of the Company immediately prior to the transaction own 50% or more of the voting power of the Company (or the surviving entity) following the transaction; a sale or other transfer by the holders of outstanding voting stock and/or other voting securities of the Company possessing more than 50% of the total voting power of the Company, whether in one transaction or in a series of related transactions, pursuant to an agreement or agreements to which the Company is a party, and pursuant to which such outstanding voting securities are sold or transferred to a single person or entity, to one or more persons or entities who are Affiliates of each other, or to one or more persons or entities acting in concert; or a sale of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis pursuant to an agreement or agreements to which the Company is a party, and pursuant to which such outstanding assets are sold or transferred to a single person or entity, to one or more persons or entities who are Affiliates of each other, or to one or more persons or entities acting in concert, other than to a corporation or other entity owned directly or indirectly by the holders of capital stock of the Company in substantially the same proportions as their ownership of Common Stock (each of the foregoing, a “CIC”); provided that an equity financing undertaken primarily for purposes of raising primary capital for the Company in which the Company is the surviving corporation shall not be considered a CIC; or (b) the effective date of the initial public offering of the Company’s common stock pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (an “IPO”).
|
tZERO GROUP, Inc.
|
|
By: ________________________________
Signature
|
Name: Saum Noursalehi_______________
|
Title: Chief Executive Officer___________
|
Date: June 1, 2020____________________
|
Date:
|
August 6, 2020
|
/s/ JONATHAN E. JOHNSON III
|
|
|
Jonathan E. Johnson III
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date:
|
August 6, 2020
|
/s/ ADRIANNE B. LEE
|
|
|
Adrianne B. Lee
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
Date:
|
August 6, 2020
|
/s/ JONATHAN E. JOHNSON III
|
|
|
Jonathan E. Johnson III
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date:
|
August 6, 2020
|
/s/ ADRIANNE B. LEE
|
|
|
Adrianne B. Lee
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|