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What changed in BED BATH & BEYOND, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BED BATH & BEYOND, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+231 added−218 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in BED BATH & BEYOND, INC.'s 2023 10-K

231 paragraphs added · 218 removed · 166 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

48 edited+26 added−17 removed25 unchanged
Biggest changeDuring the years ended December 31, 2022, 2021 and 2020 our sales were almost entirely to customers located in the United States and no single customer accounted for more than 1% of our total net revenue. 6 Additional Offerings We offer additional products or services that may complement our primary retail offerings but are not significant to our revenues, including: • Businesses advertising products or services on our Website; • Marketplace, a service we provide to our partners where they can sell their products through third party sites; • International sales through third party logistics providers to certain customers outside the United States; and • Supplier Oasis, a single integration point through which our partners can manage their products, inventory and sales channels, and obtain multi-channel fulfillment services through our distribution network.
Biggest changeAdditional Offerings We offer additional products or services that may complement our primary retail offerings but are not significant to our revenues, including: • Business Advertising Opportunities: Providing businesses with a platform to showcase their products or services on our Website, fostering additional exposure and opportunities for collaboration. • Marketplace Services: Offering a unique service to our partners, enabling them to showcase and sell their products on third-party sites through our Marketplace, creating additional avenues for sales and visibility. • International Sales Support: Facilitating international sales for certain customers outside the United States through third-party logistics providers, broadening our reach and enhancing global accessibility. • Supplier Oasis Integration: Our Supplier Oasis platform, a singular integration point that empowers our partners to efficiently manage their products, inventory, and sales channels.
Available Information We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, available free of charge through the Investor Relations section of our main website, www.overstock.com, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the "SEC").
Available Information We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, available free of charge through the Investor Relations section of our main website, www.beyond.com, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the "SEC").
We strive for a work environment that is results-driven, inclusive, agile, and collaborative. Our corporate vision, mission, values, leadership principles, and employee qualities help define who we are, where we are going, and the behavior we expect of the Company and our employees to be successful in the organization.
We strive for a work environment that is performance-based, results-driven, inclusive, agile, and collaborative. Our corporate vision, mission, values, leadership principles, and employee qualities help define who we are, where we are going, and the behavior we expect of the Company and our employees to be successful in the organization.
The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information filed by us. Our Internet Website and the information contained therein or connected thereto are not a part of or incorporated into this Annual Report on Form 10-K. 12
The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information filed by us. Our Internet Website and the information contained therein or connected thereto are not a part of or incorporated into this Annual Report on Form 10-K. 13
Overstock places great value on its human capital management and knows its people are critical to driving the business to success. We focus on our human capital management in many ways including: Diversity & Inclusion We embrace diversity and collaboration in our workforce, our ways of thinking, and our decision-making.
Beyond places great value on its human capital management and knows its people are critical to driving the business to success. We focus on our human capital management in many ways, including: Diversity & Inclusion We embrace diversity and collaboration in our workforce, our ways of thinking, and our decision-making.
Workforce Compensation & Pay Equity The total rewards philosophy of Overstock is to create and maintain competitive programs that attract, motivate, develop, and retain employees based on the prevailing industry and geographic labor markets where the Company does business.
Workforce Compensation & Pay Equity The total rewards philosophy of Beyond is to create and maintain competitive programs that attract, motivate, develop, and retain employees based on the prevailing industry and geographic labor markets where the Company does business.
Elements of our compensation package for all non-executive employees consists of base salary or wages, short-term bonus incentives to reward the achievement of behavioral goals and business objectives, and for eligible key contributors, long-term equity incentives.
Elements of our compensation package for all non-executive employees consists of base salary or wages, short-term bonus incentives to reward the achievement of key business objectives, and for eligible key contributors, long-term equity incentives.
E. Glen Nickle has served as our Chief Legal Officer and Corporate Secretary since February 2021, and previously served as Vice President, Legal and General Counsel from July 2016 to February 2021. Nickle started with Overstock in May 2010 as Associate General Counsel. Prior to joining Overstock, Nickle served as Associate General Counsel at ICON Health & Fitness, Inc.
Glen Nickle has served as our Chief Legal Officer and Corporate Secretary since February 2021, and previously served as Vice President, Legal and General Counsel from July 2016 to February 2021. Nickle started with Beyond in May 2010 as Associate General Counsel. Prior to joining Beyond, Nickle served as Associate General Counsel at ICON Health & Fitness, Inc.
Our values articulate our commitment to an inclusive, outcome-driven, and positive work environment, and embody our "becoming" culture and spirit. Our five leadership principles guide our interactions with colleagues, creating a psychologically safe environment for productive and collaborative exchanges for improved outcomes.
Our values articulate our commitment to an inclusive, outcome-driven work environment, and embody our "becoming" culture and spirit. Our three leadership principles guide our interactions with colleagues, creating a psychologically safe environment for productive and collaborative exchanges for improved outcomes.
Nielsen originally joined Overstock in 2009 and previously served as our Senior Vice President of Business Development, Senior Vice President and General Merchandise Manager and Co-President. Carlisha Robinson was appointed as our Chief Product Officer in August 2022.
Nielsen originally joined Beyond in 2009 and previously served as our Senior Vice President of Business Development, Senior Vice President and General Merchandise Manager and Co-President. 12 Carlisha Robinson was appointed as our Chief Product Officer in August 2022.
Employee Safety & Wellness Creating a culture where all employees feel supported and valued is a key part of our corporate mission.
Employee Safety & Wellness Creating a culture where all employees feel supported and valued is a key part of our Company mission.
Our business is subject to general business regulations and laws, and regulations and laws specifically governing the internet, e-commerce, and other services we offer. Existing and future laws and regulations may result in increasing expense and may impede our growth.
Our business is subject to general business regulations and laws, and regulations and laws specifically governing the internet, e-commerce, and other financial products and services we offer or may offer. Existing and future laws and regulations may result in increasing expense and may impede our growth.
For further information, see (Item 1A—"Risk Factors") and the information set forth under Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 12—Commitments and Contingencies, Legal proceedings and contingencies , contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K. 8 Human Capital Management On December 31, 2022, we had approximately 1,050 full-time employees.
For further information, see (Item 1A—"Risk Factors") and the information set forth under Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 16—Commitments and Contingencies, Legal proceedings and contingencies , contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K. Human Capital Management On December 31, 2023, we had approximately 830 full-time employees.
Our company, based near Salt Lake City, Utah, was founded as a Utah limited liability company ("LLC") in 1997, reorganized as a C corporation in the State of Utah in 1998, and reincorporated in Delaware in 2002. We launched our initial website in March 1999.
Our company, based in Midvale, Utah, was founded as a Utah limited liability company ("LLC") in 1997, reorganized as a C corporation in the State of Utah in 1998, and reincorporated in Delaware in 2002. We launched our initial website in March 1999.
We have a strong employee value proposition that leverages our unique culture, collaborative and flexible working environment, shared sense of purpose, desire to do the right thing and innovative work to attract talent to our company.
We have a strong employee value proposition that leverages our culture, shared alignment to critical business and financial objective and goals, collaborative and flexible working environment, shared sense of purpose, desire to do the right thing and innovative work to attract talent to our company.
Oversight & Governance Our focus on human capital management has been a hallmark of the Company for years, understanding that people truly are a Company's most valuable asset, and that culture is an organization's ultimate competitive advantage.
The Company endeavors to regularly reinforce this culture throughout the entire employee experience. 11 Oversight & Governance Our focus on human capital management has been a hallmark of the Company for years, understanding that people truly are a Company's most valuable asset, and that culture is an organization's ultimate competitive advantage.
Dave Nielsen has served as our President of Retail (now President) since May 2019, and previously served as our Chief Sourcing and Operations Officer from October 2018 to May 2019, having returned to Overstock after serving as the Chief Executive Officer and board member for Global Access from July 2015 to October 2018.
Nielsen previously served as our Chief Sourcing and Operations Officer from October 2018 to May 2019, having returned to Beyond after serving as the Chief Executive Officer and board member for Global Access from July 2015 to October 2018.
Development & Training We recognize how important it is for our employees to develop and progress in their careers. We provide a variety of resources to help our employees grow in their current roles and build new skills, including online development resources from a competency model development library to hundreds of online courses in our learning management system.
We provide a variety of resources to help our employees grow in their current roles and build new skills, including online development resources from a competency model development library to hundreds of online courses in our learning management system.
To fulfill our vision of "Making Dream Homes Come True" and the long-term financial goals of the Company, we focus on our mission of being a customer-focused online furniture and home furnishings retailer, our leading technology-focused innovation capabilities, and creating enterprise value.
To fulfill the long-term financial goals of the Company, we focus on our mission of being a customer-focused online furniture and home furnishings retailer providing a broad assortment of products and services for the home, our leading technology-focused innovation capabilities, and creating enterprise value.
Prior to joining Overstock, Lee served as Senior Vice President and CFO of North America RAC from December 2018 to March 2020 and as Vice President - Global Financial Planning and Analysis and Corporate Development from December 2017 to December 2018 at The Hertz Corporation. 11 Carter Lee has served as our Chief People Officer since January 2023.
Prior to joining Beyond, Lee served as Senior Vice President and CFO of North America RAC from December 2018 to March 2020 and as Vice President—Global Financial Planning and Analysis and Corporate Development from December 2017 to December 2018 at The Hertz Corporation.
Our commitments to improving diversity include 1) increasing the diversity of our team at all levels, 2) continuing real and meaningful gender and race dialogue within our Company, 3) amplifying the voices of our underrepresented groups of employees, 4) fostering inclusion and safety within our workforce, 5) continuing to condemn all forms of gender and racial discrimination and harassment, 6) encouraging our employees to vote by expanding our paid time off program, and 7) tracking and monitoring our progress.
Our commitments to improving diversity include 1) increasing the diversity of our team at all levels, 2) continuing real and meaningful gender and race dialogue within our Company, 3) amplifying the voices of our underrepresented groups of employees, 4) fostering inclusion and safety within our workforce, 5) continuing to condemn all forms of gender and racial discrimination and harassment, 6) encouraging our employees to vote by utilizing their flexible time away or voting time off, 7) fostering an inclusive work environment where every employee feels valued and respected, and 8) tracking and monitoring our progress.
Our competitive compensation programs consist of cash and non-cash compensation based on relevant pay factors designed to balance market competitiveness and cost containment to retain the human capital that enables the Company to achieve business performance goals and objectives.
Our competitive compensation programs consist of cash and non-cash compensation based on relevant pay factors designed to balance market competitiveness and cost containment to incentivize achievement of business performance goals and objectives and to aid in retaining human capital.
Government Regulation and Legal Matters We are subject to a wide variety of laws, rules, mandates, and regulations, some of which apply or may apply to us as a result of our business, and others of which apply to us for other reasons, such as our status as a publicly held company or the places in which we sell certain types or amounts of products.
We rely on a combination of laws and contractual restrictions with our employees, customers, suppliers, affiliates, and others to establish and protect our proprietary rights, including the law pertaining to trade secrets. 8 Government Regulation and Legal Matters We are subject to a wide variety of laws, rules, mandates, and regulations, some of which apply or may apply to us as a result of our business, and others of which apply to us for other reasons, such as our status as a publicly held company or the places in which we sell certain types or amounts of products.
Our goal is to have every employee feel they are a valued and empowered member of a winning team, doing meaningful work, in an environment of trust. The Company endeavors to regularly reinforce this culture throughout the entire employee experience.
Our goal is for every employee to feel they are a valued and empowered member of a winning team, doing meaningful work, in an environment of trust.
Prior to joining Overstock, Robinson served as Vice President of Product at Volusion from July 2020 to July 2022, and Senior Director of Product Management at CPA Global (Innogrpahy) from November 2015 to July 2018. Tushon Robinson was appointed as our Chief Supply Chain Officer in January 2022.
Prior to joining Beyond, Robinson served as Vice President of Product at Volusion from July 2020 to July 2022, and Senior Director of Product Management at CPA Global (Innography) from November 2015 to July 2018.
Our panel interviews are set up with a diverse group of interviewers to ensure for the best candidate experience. We have taken the ParityPledge in support of women and in support of people of color, demonstrating our commitment to improve the opportunity for advancement of women and people of color into senior leadership positions.
We have taken the ParityPledge in support of women and in support of people of color, demonstrating our commitment to improve the opportunity for advancement of women and people of color into senior leadership positions.
These benefits include a medical clinic, fitness center, child daycare, and two dedicated counselors, employee assistance program (EAP) support, and a 9/80 flexible work schedule. We offer family planning services including fertility coverage to assist potential parents.
These benefits include an expanded employee assistance program (EAP) to better align with our national employee base and a 9/80 flexible work schedule. We offer family planning services including fertility coverage to assist potential parents.
We believe that competition in this industry is based predominantly on: • price; • product quality and assortment; • shopping convenience and product findability; • website organization and experience; • order processing and fulfillment; • order delivery time and accuracy; • customer service; • website functionality on mobile devices; • brand recognition; and • brand reputation. 7 We compete with other online pure play, brick-and-mortar, and omni-channel retailers which may specifically adopt our methods and target our customers.
We believe that competition in this industry is based predominantly on: • price; • product and relevant home financial products and services quality and assortment; • shopping convenience and product findability; • website organization and experience; • order processing and fulfillment; • order delivery time and accuracy; • customer service; • website functionality on mobile devices; • brand recognition; and • brand reputation.
We empower employees to find new and better ways of doing things and the scale of our business means that careers can develop in exciting and unexpected directions. To ensure the long-term continuity of our business, we actively manage the development of existing talent to fill the roles that are most critical to the on-going success of our Company.
We empower employees to find new and better ways of doing things and the scale of our business means that careers can develop in exciting and unexpected directions.
We currently or potentially compete with a variety of companies that specialize in several broad categories, including discount general retailers, private sales, specialty retailers, and liquidators. Our current and potential e-commerce competitors include entities that may have greater brand recognition, longer operating histories, larger customer bases, and significantly greater financial, marketing, and other resources than we do.
Our current and potential e-commerce competitors include entities that may have greater brand recognition, longer operating histories, larger customer bases, and significantly greater financial, marketing, and other resources than we do.
We now recruit talent from twenty-one states across the country, as much of our workforce can work in a mostly remote arrangement. We are establishing relationships with universities, professional associations, and industry groups to proactively attract talent. We look for ways to improve our recruiting process regularly and ensure each applicant feels welcome and comfortable through the recruiting process.
We are establishing relationships with universities, professional associations, and industry groups to proactively attract talent. We look for ways to improve our recruiting process regularly and ensure each applicant feels welcome and comfortable through the recruiting process. Our panel interviews are set up with a diverse group of interviewers to ensure for the best candidate experience.
We also offer a caregiver benefit to parents who need to travel for work, which allows employees who have a child under the age of two to travel with the employee. In January 2023, we expanded our benefits offerings to include pelvic care benefits for women and lowered copayments for mental health office visits to provide enhanced mental health support.
We also offer a caregiver benefit to parents who need to travel for work, which allows employees who have a child under the age of two to travel with the employee.
Among the many ways we demonstrate these commitments are through our hiring and development practices, flexible and working-parent-friendly programs, anti-discrimination policies, and efforts of our employee resource groups. Through our commitments, actions, words, investments, and values, we promote a work environment that enables employees to feel safe to express their ideas and perspectives and feel they belong within our team.
Through our commitments, actions, words, investments, and values, we promote a work environment that enables employees to feel safe to express their ideas and perspectives and feel they belong within our team.
Our intention is to offer every employee fair and equitable cash compensation and competitive non-cash benefits to help employees manage their wealth, health, and wellness and the wealth, health, and wellness of their families. 9 Talent Acquisition & Retention We work diligently to attract the best talent from a diverse range of sources and locations in order to meet the current and future demands of our business.
Our intention is to offer every employee fair and equitable cash compensation and competitive non-cash benefits to help employees manage the wealth, health, and wellness of both themselves and their families.
This program is designed to strengthen our organization by promoting the inclusion of various viewpoints from the natural talents and abilities of our people regardless of race, sexual orientation, gender, religion, or other differences. 10 Company Culture We attribute the high levels of employee engagement to our corporate culture.
We conduct annual Diversity and Inclusion training that emphasizes the value of embracing diverse perspectives and talents within our organization, regardless of race, sexual orientation, gender, religion, or other differences. This training aims to strengthen our Company by fostering inclusivity and understanding among our employees. Company Culture We attribute the high levels of employee engagement to our corporate culture.
Our Compensation Committee is actively involved in determining competitive compensation strategies to help us continually improve in attracting, developing, and retaining top talent for our Company. Information About Our Executive Officers The following persons were executive officers of Overstock as of February 24, 2023: Executive Officers Age Position Angela Hsu 55 Chief Marketing Officer Jonathan E.
Our Compensation Committee is actively involved in determining competitive compensation strategies to help us continually improve in attracting, developing, and retaining top talent for our Company.
We use the services of multiple telecommunications companies to obtain connectivity to the Internet. Currently, our primary computer infrastructure is in a data center in Utah. We also have other data centers and public cloud providers which we use for backups, redundancy, development, testing, disaster recovery, and corporate systems infrastructure.
Our primary computer infrastructure is in a data center in Utah. We leverage additional data centers and tap into the resources of public cloud providers which play a pivotal role in functions such as backups, redundancy measures, development and testing environments, disaster recovery protocols, and the overarching support of our corporate systems infrastructure.
We compete primarily based on: • Simple and easy customer experience with an emphasis on price, value, and quality with a wide assortment of products delivered in a personalized format with the convenience of our mobile app, and supported by our customer care team; • Proprietary technologies and strategic technical relationships which we believe help us provide our customers with an intuitive shopping experience; • Logistics capabilities tailored to the furniture and home furnishings category and developed over our many years of e-commerce experience; • Long-term mutually beneficial relationships with third-party manufacturers, distributors and other suppliers (referred to collectively as our "partners"), which numbered approximately 2,600 as of December 31, 2022; and • Our Club O Loyalty Program, which we believe increases customer engagement and retention.
Our extensive product range is delivered in a personalized format, accessible seamlessly through our mobile app, and complemented by our dedicated customer care team. • Cutting-edge Technologies: Our proprietary technologies and strategic technical alliances enhance the overall shopping experience, providing our customers with an intuitive and streamlined experience. • Specialized Logistics: Our logistics capabilities are finely tuned to the demands of the furniture and home furnishings category, which we have honed over years of e-commerce expertise. • Strategic Partnerships: We foster long-term, mutually beneficial relationships with third-party manufacturers, distributors, and suppliers, collectively referred to as our "partners," as of December 31, 2023.
Our use of the term "partner" does not mean that we have formed any legal partnerships with any of our retail partners. We provide our partners with access to a large customer base and convenient services for marketing, order fulfillment, customer service, returns handling, and other services.
The vast majority of our retail transactions are fulfilled through our network of partners, who benefit from the access we provide to a large customer base and a suite of convenient services, including marketing, order fulfillment, customer service, and returns handling.
Sales and Marketing We use a variety of methods to target our retail consumer audience, including direct mail and online campaigns, such as advertising through search engine marketing, display ads, affiliate marketing, e-mail, and social media campaigns. We also do brand advertising through television, video ads, streaming video and audio, social media, and event sponsorships.
Our outreach spans targeted direct mail and online initiatives, encompassing search engine marketing, display ads, affiliate marketing, e-mail campaigns, and social media promotions. Additionally, we enhance brand visibility through comprehensive advertising efforts across television, video ads, streaming video and audio platforms, social media channels, and strategic event sponsorships.
Our supply chain allows us to ship directly to our customers from our partners or from our warehouses. Our warehouses primarily fulfill orders from sales of our partners' owned inventory, including some customer returns of partner products.
Our asset-light supply chain allows us to ship directly to customers from our partners or our warehouses, which primarily handle orders from our partners' owned inventory. Our use of the term "partner" does not mean that we have formed legal partnerships with any of these entities.
We also have certain partners who handle their own customer service requests, and we hold them to the same high standards as our in-house services. Technology We use our internally developed Website and a combination of proprietary technologies, open source technologies, and commercially available licensed technologies and solutions to support our operations.
We uphold these partners to the same high standards as our internal customer service operations. 7 Technology We use our internally developed Website alongside a dynamic blend of proprietary technologies, open source solutions, and commercially licensed technologies to bolster our operational capabilities. We maintain connectivity to the Internet through partnerships with multiple telecommunications companies, promoting seamless access.
As used herein, "Overstock", "Overstock.com", "the Company", "we", "our" and similar terms include Overstock.com, Inc. and our majority-owned subsidiaries, unless the context indicates otherwise.
We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout this Annual Report on Form 10-K. As used herein, "Beyond", "the Company", "we", "our" and similar terms include Beyond, Inc. and its controlled subsidiaries, unless the context indicates otherwise.
Glen Nickle 58 Chief Legal Officer and Corporate Secretary Dave Nielsen 53 President Carlisha Robinson 54 Chief Product Officer Tushon Robinson 52 Chief Supply Chain Officer Joel Weight 48 Chief Technology Officer Angela Hsu joined Overstock as our Chief Marketing Officer in March 2022.
Glen Nickle 59 Chief Legal Officer and Corporate Secretary Dave Nielsen 54 Division Chief Executive Officer, Overstock (Co-Principal Executive Officer) Carlisha Robinson 55 Chief Product Officer Deb Bollom joined Beyond as our Chief Merchandising Officer in July 2023.
We know that fostering an inclusive culture delivers better business outcomes.
We know that fostering an inclusive culture delivers better business outcomes. We are committed to creating a workplace that values and celebrates the unique backgrounds, perspectives, and experiences of our employees.
Joel Weight was appointed as our Chief Technology Officer in February 2020. Weight joined Overstock in 2011 and previously served as Chief Operations Officer of Medici Ventures from January 2019 to February 2020, and Chief Technology Officer of Medici Ventures from October 2016 to January 2019, and various other positions.
Adrianne Lee was appointed as our Chief Financial & Administrative Officer in February 2024, and previously served as Chief Financial Officer from March 2020 to February 2024.
Customer Service We are committed to providing superior customer service through our app, Website, and customer service department. We staff our customer service department with dedicated in-house and outsourced professionals who respond to phone, SMS, instant online chat, and e-mail inquiries on products, ordering, shipping status, returns, and other areas of customer inquiry.
Staffed by a team of dedicated in-house and outsourced professionals, we seek to ensure prompt and thorough responses to customer inquiries via phone, SMS, instant online chat, and e-mail to address product information, order details, shipping status, returns, and various other customer queries. In addition to our in-house services, we have trusted partners who independently manage their customer service requests.
Generally, our manufacturers, distributors, or suppliers regularly communicate to us the quantity of products that are held in reserve for us, but our arrangements with them generally do not guarantee the availability of those products for a set duration.
While our manufacturers, distributors, and suppliers regularly update us on the available product quantities, our arrangements with them typically do not guarantee the sustained availability of these products over a predetermined period. Our relationships are generally non-exclusive. This allows us the flexibility to exercise discretion in selecting and changing suppliers based on our evolving needs.
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Introduction Through our online business, we offer a broad range of price-competitive products, including furniture, décor, area rugs, bedding and bath, home improvement, outdoor, and kitchen and dining items, among others. We sell our products and services through our Internet websites located at www.overstock.com, www.o.co, www.overstock.ca, and www.overstockgovernment.com (referred to collectively as the "Website") and through our mobile app.
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Introduction Beyond, Inc. is an e-commerce expert with a singular focus: connecting consumers with products and services they love. As the owner of the iconic Bed Bath & Beyond brand and several other brands, we strive to curate an exceptional online shopping experience.
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Although our four websites are located at different domain addresses, the technology and equipment and processes supporting the Website and the process of order fulfillment described herein are the same for all four websites.
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Specializing in furniture and home furnishings, Bed Bath & Beyond is a premier online retailer, catering to customers in the United States and Canada. Our e-commerce platform, accessible through our mobile app, www.bedbathandbeyond.com, www.bedbathandbeyond.ca, and www.overstockgovernment.com collectively referred to as the "Website," serves as a gateway for those seeking a diverse array of top-tier, on-trend home products at competitive prices.
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Our Business Our goal is to provide furniture and home furnishings to assist consumers in "Making Dream Homes Come True", particularly for our target customers—consumers who seek smart value on quality, stylish furniture and home furnishings at competitive prices, and who want an easy shopping experience.
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From furniture, bedding, and bath essentials to patio and outdoor gear, area rugs, tabletop and cookware, décor, storage and organization solutions, small appliances, and home improvement items – we offer an extensive range of furniture and home furnishings to elevate our customers' living spaces within the four corners of their home and the four corners of their property.
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We believe that the furniture and home furnishings market, which is highly fragmented and has traditionally been served by brick and mortar stores, will continue transitioning to online sales as consumers become increasingly comfortable shopping online for goods in this product category.
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In November 2023, we changed our corporate name from Overstock.com, Inc. to Beyond, Inc., and transferred the principal listing of our common stock from the Nasdaq Global Market to the New York Stock Exchange.
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We continue to increase the millions of items we offer by expanding the breadth and depth of our product assortment to meet the current and evolving trends and preferences of our customers. Nearly all our retail sales through our Website and mobile apps were from transactions in which we fulfilled orders through our network of partners.
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Our common stock ceased trading under the ticker symbol "OSTK" on the Nasdaq Global Market at the close of market November 3, 2023 and on November 6, 2023, our common stock began trading under the ticker symbol "BYON" on the New York Stock Exchange.
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Manufacturer, Distributor, and Supplier Relationships To the extent possible we maintain manufacturer, distributor, and supplier relationships, seek new manufacturer, distributor, and supplier relationships, and use our working capital, to ensure a continuous assortment of product offerings for our customers.
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Our Business Our mission revolves around delivering an unparalleled shopping experience for furniture and home furnishings and services, tailored especially for our target audience – discerning consumers who seek seamless support in their search for high-quality, stylish home products at competitive prices. Our commitment extends to providing a diverse range of offerings that cater to varied budget requirements.
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Our manufacturer, distributor, and supplier relationships are based on historical experience and are generally non-exclusive, and we retain the right to select and change our suppliers at our discretion. Generally, manufacturers, distributors, and suppliers do not control the terms under which products are sold through our Website.
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In an ever-evolving market landscape, our focus is on standing out in the online sphere by offering products and services for the home. We believe that our competitive edge lies in the following: • Simplified Customer Experience: We prioritize an easy, user-friendly interface, emphasizing price, value, and quality.
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We rely on a combination of laws and contractual restrictions with our employees, customers, suppliers, affiliates, and others to establish and protect our proprietary rights, including the law pertaining to trade secrets.
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This network forms the backbone of our supply chain, allowing us to consistently meet customer demands.
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In 2022, we hired 180 new employees, excluding our customer service and warehouse departments, and 28 new customer service and warehouse employees. We have a total average tenure of six years, with an average tenure of four and three quarters years in our customer service and warehouse departments.
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We also partner with third parties to provide various financial products and services. • Welcome Rewards Loyalty Program: Our customer engagement and retention are bolstered by our Welcome Rewards Loyalty Program, enhancing the overall value proposition for our customers. 6 We continually expand our product assortment, reaching into the millions, to keep pace with current trends and evolving customer preferences.
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We have an annual training for all employees on the topic of Diversity and Inclusion.
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During the years ended December 31, 2023, 2022 and 2021 our sales were almost entirely to customers located in the United States and no single customer accounted for more than 1% of our total net revenue.
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Johnson III 56 Chief Executive Officer and Director Adrianne Lee 45 Chief Financial Officer Carter Lee 53 Chief People Officer E.
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This streamlined interface also provides access to multi-channel fulfillment services through our expansive distribution network, enhancing operational efficiency for our valued partners. Manufacturer, Distributor, and Supplier Relationships We proactively cultivate and nurture relationships with manufacturers, distributors, and suppliers to help ensure an uninterrupted stream of diverse product offerings for our customers.
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Prior to joining Overstock, Hsu served as Senior Vice President of Marketing and eCommerce at Lamps Plus from June 2017 to March 2022 and held other roles at Lamps Plus including Vice President of Internet Business and Marketing. Jonathan E. Johnson III has served as Chief Executive Officer since September 2019 and as a Director since 2013.
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The terms under which products are sold through our Website are predominantly under our control rather than controlled by our manufacturers, distributors, and suppliers. Sales and Marketing We employ a diverse array of strategies to engage our retail consumer audience, using both traditional and digital channels.
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Johnson also served as President of Medici Ventures from August 2016 to April 2021, Interim Chief Executive Officer from August 2019 to September 2019, and Chairman of the Board of Directors from 2014 through 2017.
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Customer Service Our commitment to delivering unparalleled customer service extends across multiple channels, including our app, Website, and customer service department.
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Johnson joined Overstock in 2002 and previously served as our President, Executive Vice Chairman, Acting Chief Executive Officer, Senior Vice President, and General Counsel, and various other positions. Adrianne Lee joined Overstock as our Chief Financial Officer in March 2020.
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We compete with a diverse range of discount general retailers, off-price and club retailers, private sales platforms, specialty retailers, and liquidators in the online pure-play, brick-and-mortar, and omni-channel retail spheres, where the potential exists for competitors to emulate our strategies and target our customer base.
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Lee joined Overstock in 2001 and previously served as Chief International Officer from September 2022 to December 2022, Chief Administrative Officer from August 2018 to September 2022, Acting Chief Marketing Officer from August 2020 to March 2021, Senior Vice President of Technology and People Care from February 2015 to July 2018, and held other roles including Vice President of Technology Operations and Director of Internal Systems.
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Among the many ways we demonstrate these commitments are through our hiring and development practices, flexible and working-parent-friendly programs, anti-discrimination policies, a focus on pay equity, promoting mentorship programs to support career growth, conducting diversity and inclusion training for all employees and efforts of our employee resource groups. 9 We view diversity and inclusion as a competitive advantage that drives innovation, creativity, and success.
Removed
Prior to joining Overstock, Robinson served as Chief Operating Officer of Bractlet from October 2019 to January 2022, Advisory Board Member of Bractlet from May 2018 to October 2019, Vice President, Product Management of Pitney Bowes from October 2018 to October 2019, and various other executive leadership at Newgistics prior to October 2018.
Added
We are dedicated to creating a workplace where everyone has the opportunity to thrive, and we believe that our commitment to diversity and inclusion will contribute to our long-term growth and sustainability.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

56 edited+21 added−14 removed94 unchanged
Biggest changeWe believe that our sales of home-related products are affected by the strength of the U.S. housing industry. A recession or other economic downturn, in particular in the U.S. housing industry, has already negatively impacted our sales, and could have a material adverse effect on our financial results, business, and prospects.
Biggest changeA recession or other economic downturn, in particular in the U.S. housing industry, has negatively impacted our sales in the past, and could have a material adverse effect on our financial results, business, and prospects. Similarly, a substantial portion of the products and services we offer are products or services that consumers may view as discretionary items rather than necessities.
We have expended significant financial and legal resources responding to the SEC subpoena and such responses have required a significant amount of the time and attention of our senior management and personnel.
We have expended significant financial and legal resources responding to the SEC subpoena and such responses have required a significant amount of time and attention of our senior management and personnel.
Additionally, some providers of consumer devices and web browsers have implemented or plan to implement methods of making it easier for Internet users to prevent the placement of cookies, to block other tracking technologies or to require new permissions from users for certain activities, which have impacted us in the past and have the potential to significantly reduce the effectiveness of such practices and technologies in the future.
Additionally, some providers of consumer devices and web browsers have implemented or plan to implement methods of making it easier for Internet users to prevent the placement of cookies, to block other tracking 17 technologies or to require new permissions from users for certain activities, which have impacted us in the past and have the potential to significantly reduce the effectiveness of such practices and technologies in the future.
Any such loss could be material and could have a material adverse effect on our financial results. 16 If governmental entities or providers of consumer devices and internet browsers further restrict or regulate the use of "cookie" tracking technologies, the amount or accuracy of online user information we collect could decrease, which could harm our business and operating results.
Any such loss could be material and could have a material adverse effect on our financial results. If governmental entities or providers of consumer devices and internet browsers further restrict or regulate the use of "cookie" tracking technologies, the amount or accuracy of online user information we collect could decrease, which could harm our business and operating results.
Although we believe that we have fully complied with all relevant laws and regulations, there can be no assurance that the SEC will not commence an enforcement action against us or members of our management, or as to the ultimate resolution of any enforcement action that the SEC may decide to bring.
Although we believe that we have fully complied with all relevant laws and regulations, there can be no assurance that the SEC will not commence an enforcement action against us, or members of our management or former management, or as to the ultimate resolution of any enforcement action that the SEC may decide to bring.
Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, cyber-attacks, acts of war, break-ins, earthquake and similar events. Our back-up facility by itself is not adequate to support fulfillment of sales orders.
Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, cyber-attacks, acts of war, break-ins, earthquake and similar events. Our back-up facility by itself is not adequate to support 16 fulfillment of sales orders.
Under applicable law, the SEC has the ability to impose significant sanctions on companies and individuals who are found to have violated the provisions of applicable federal securities laws, including cease and desist orders, civil money penalties, and barring individuals from serving as directors or officers of public companies.
Under applicable law, the SEC has the ability to impose significant sanctions on companies and individuals who are found to have violated the provisions of applicable 18 federal securities laws, including cease and desist orders, civil money penalties, and barring individuals from serving as directors or officers of public companies.
Our servers and applications are vulnerable to malware, physical or electronic break-ins, internal sabotage, and other disruptions, the occurrence of any of which could lead to interruptions, delays, loss of critical data or the inability to accept and fulfill customer 15 orders.
Our servers and applications are vulnerable to malware, physical or electronic break-ins, internal sabotage, and other disruptions, the occurrence of any of which could lead to interruptions, delays, loss of critical data or the inability to accept and fulfill customer orders.
In January 2021, we received a subpoena from the SEC requesting 17 information regarding our Retail guidance in 2019 and certain communications with current and former executives, board members, and investors. We continue to cooperate with the SEC in these matters.
In January 2021, we received a subpoena from the SEC requesting information regarding our Retail guidance in 2019 and certain communications with current and former executives, board members, and investors. We continue to cooperate with the SEC in these matters.
Numerous potential economic factors, including a recession, other economic downturns, inflation, our increasing exposure to the U.S. housing industry, and the potential for a decrease in consumer spending, have affected and could continue to adversely affect us.
Numerous potential economic factors, including a recession, other economic downturns, inflation, our exposure to the U.S. housing industry, and the potential for a decrease in consumer spending, have affected and could continue to adversely affect us.
The sale of substantial amounts of our common or preferred stock, by us or a significant stockholder, or the perception that these sales may occur, could adversely affect the trading prices of our securities or subject us to limitations on our ability to use our net operating and tax credit carryforwards. 21 Anti-takeover provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, and provisions of Delaware law, could impair a takeover attempt.
The sale of substantial amounts of our common or preferred stock, by us or a significant stockholder, or the perception that these sales may occur, could adversely affect the trading prices of our securities or subject us to limitations on our ability to use our net operating and tax credit carryforwards. 22 Anti-takeover provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, and provisions of Delaware law, could impair a takeover attempt.
International sales and transactions are subject to inherent risks and challenges that could adversely affect us, including: • the need to develop new supplier and manufacturer relationships; • the need to comply with additional U.S. and foreign laws and regulations; • changes in international laws, regulatory requirements, taxes and tariffs; • our limited experience with different local cultures and standards; • geopolitical events, such as war and terrorist attacks; • the risk that the products we offer may not appeal to customers in international markets, whether due to the products themselves, the time to deliver, a lack of brand recognition, or another reason; and • the additional resources and management attention required for such expansion.
International sales and transactions are subject to inherent risks and challenges that could adversely affect us, including: • the need to develop new supplier and manufacturer relationships and create new logistics capabilities; • the need to comply with additional U.S. and foreign laws and regulations; • changes in international laws, regulatory requirements, taxes and tariffs; • our limited experience with different local cultures and standards; • geopolitical events, such as war and terrorist attacks; • the risk that the products we offer may not appeal to customers in international markets, whether due to the products themselves, the time to deliver, a lack of brand recognition, or another reason; and • the additional resources and management attention required for such expansion.
For example, the SEC has proposed rules that would affect publicly-traded company disclosure obligations in the areas of climate change and cyber security which, if approved, would increase our costs of doing business and expose us to potential compliance risk. In addition, new or revised tax regulations or court decisions may subject us or our customers to additional taxes.
For example, the SEC has proposed rules that would affect publicly-traded company disclosure obligations in the areas of climate change which, if approved, would increase our costs of doing business and expose us to potential compliance risk. In addition, new or revised tax regulations or court decisions may subject us or our customers to additional taxes.
The practice of short-selling activity may adversely affect our common stock price, which in turn could adversely affect our ability to raise capital and could have a material adverse effect on our financial results, business and prospects. 20 Significant fluctuations in our quarterly operating results may adversely affect the market prices of our common stock, and you may lose all or a part of your investment.
The practice of short-selling activity may adversely affect our common stock price, which in turn could adversely affect our ability to raise capital and could have a material adverse effect on our financial results, business and prospects. 21 Significant fluctuations in our quarterly operating results may adversely affect the market prices of our common stock, and you may lose all or a part of your investment.
In addition, the occurrence of any event that would adversely affect e-commerce or discourage or prevent consumers from shopping online or via mobile apps could significantly decrease the volume of our sales. We are subject to cyber security risks and risks of data loss or other security breaches.
In addition, the occurrence of any event that would adversely affect e-commerce or discourage or prevent consumers from shopping online or via mobile apps could significantly decrease the volume of our sales. We are subject to cybersecurity risks and risks of data loss or other security breaches.
Difficulties with any of our significant fulfillment partners or third-party carriers, delivery or product assembly services, payment processors or any of the third-party service providers involved in our business, regardless of the reason, could have a material adverse effect on our financial results, business and prospects.
Difficulties with any of our significant fulfillment partners or third-party carriers, insurers, warranty providers, delivery or product assembly services, payment processors or any of the third-party service providers involved in our business, regardless of the reason, could have a material adverse effect on our financial results, business and prospects.
Because it is difficult to predict demand, we may not be able to manage our facilities in an optimal way, which may result in excess or insufficient inventory or warehousing capacity. Our fulfillment and customer service centers may also fail to staff at optimal levels.
Because it is difficult to predict demand, we may not be able to manage our operations in an optimal way, which may result in excess or insufficient inventory or warehousing capacity. Our fulfillment and customer service centers may also fail to staff at optimal levels.
Slowdowns in the U.S. or global economy, or an uncertain economic outlook, could materially adversely affect consumer spending habits, have already negatively impacted our sales, and could have a material adverse effect on our financial results, business, and prospects.
Slowdowns in the U.S. or global economy, or an uncertain economic outlook, could materially adversely affect consumer spending habits, have negatively impacted our sales in the past, and could have a material adverse effect on our financial results, business, and prospects.
Tariffs, bans, the spread of illness, or other measures or events that increase the effective price of products or limit our ability to access products we or our suppliers or fulfillment partners import into the United States could have a material adverse effect on our business.
Tariffs, bans, or other measures or events that increase the effective price of products or limit our ability to access products we or our suppliers or fulfillment partners import into the United States could have a material adverse effect on our business.
We currently compete with numerous competitors, including: • online retailers with or without discount departments, including Amazon.com, AliExpress (part of the Alibaba Group), eBay, and Rakuten.com; • online shopping services, including Google Shopping, Facebook, Instagram, and TikTok; • online specialty retailers such as Wayfair, Build.com, Houzz, Hayneedle, Rugs.com, Groupon, World Market, and Zulily; • furniture specialists including Bob's Discount Furniture, Havertys, Raymour & Flanigan, At Home, Tuesday Morning, Living Spaces, Nebraska Furniture Mart, RC Willey, and Rooms To Go; • traditional general merchandise and specialty retailers and liquidators including Ashley Furniture, Bed, Bath & Beyond, Best Buy, Big Lots, Costco, Crate and Barrel, Ethan Allen, Gilt, Home Depot, HomeGoods, Hudson's Bay Company, IKEA, J.C.
We currently compete with numerous competitors, including: • online retailers with or without discount departments, including Amazon.com, AliExpress (part of the Alibaba Group), eBay, Temu, and Rakuten.com; • online shopping services, including Google Shopping, Facebook, Instagram, and TikTok; • online specialty retailers such as Wayfair, Build.com, Houzz, Hayneedle, Rugs.com, Groupon, and World Market; • furniture specialists including Bob's Discount Furniture, Havertys, Raymour & Flanigan, At Home, Tuesday Morning, Living Spaces, Nebraska Furniture Mart, RC Willey, and Rooms To Go; • traditional general merchandise and specialty retailers and liquidators including Ashley Furniture, Best Buy, Big Lots, Costco, Crate and Barrel, Ethan Allen, Gilt, Home Depot, HomeGoods, Hudson's Bay Company, IKEA, J.C.
If it were established that we were an investment company, it would have a material adverse effect on our business and financial operations and our ability to continue our business. 22 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If it were established that we were an investment company, it would have a material adverse effect on our business and financial operations and our ability to continue our business. 23 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Penney Company, Kirkland's, Kohl's, Lands' End, Lowe's, Macy's, Nordstrom, Pier 1 Imports, Pottery Barn, Restoration Hardware, Ross Stores, Saks Fifth Avenue, Sears, T.J. Maxx, Target, Walmart, West Elm, and Williams-Sonoma, all of which also have an online presence; and • online liquidators such as SmartBargains.
Penney Company, Kirkland's, Kohl's, Lands' End, Lowe's, Macy's, Nordstrom, Pottery Barn, Restoration Hardware, Ross Stores, Saks Fifth Avenue, Sears, T.J. Maxx, Target, Walmart, West Elm, and Williams-Sonoma, all of which also have an online presence; and • online liquidators such as SmartBargains.
In addition to competing with us for customers, suppliers, and employees, our competitors have and may continue to directly increase our operating costs, by driving up the cost of various forms of online advertising. Furthermore, our competitors may outspend us on various forms of advertising or marketing, making our marketing efforts less effective.
In addition to competing with us for customers, suppliers, and employees, our competitors have and may continue to directly increase our operating costs, by driving up the cost of various forms of online advertising. Furthermore, our competitors may outspend us or be more efficient on various forms of advertising or marketing, making our marketing efforts less effective.
We depend on third-party companies, including third-party carriers and a large number of independent fulfillment partners whose products we offer for sale on our Website, to perform functions critical to our ability to deliver products and services to our customers on time and at a reasonable cost.
We depend on third-party companies, including third-party carriers, insurers, warranty providers, and a large number of independent fulfillment partners whose products we offer for sale on our Website, to perform functions critical to our ability to deliver products and services to our customers on time and at a reasonable cost.
Even if a new general partner is appointed in a timely manner, it may be unable to manage the activities of the Medici Ventures, L.P. fund and its portfolio company investments, which would prevent us from receiving the anticipated benefits of the partnership. Our international business efforts could adversely affect us. We sell products in international markets.
Even if a new general partner is appointed in a timely manner, it may be unable to manage the activities of the Medici Ventures, L.P. fund and its portfolio company investments, which would prevent us from receiving the anticipated benefits of the partnership. Our international business efforts could adversely affect us.
Competition from our competitors, many of whom have longer operating histories, larger customer bases, greater brand recognition, greater access to capital and significantly greater financial, marketing and other resources than we do, affects us and has had and could continue to have a material adverse effect on our financial results, business and prospects. 13 Our business depends on effective marketing, including marketing via email, search engine marketing, influencer marketing, and social media marketing, and our competitors have and may continue to directly increase our marketing costs, may outspend us on marketing, and also have and may continue to cause us to decrease certain types of marketing.
Competition from our competitors, many of whom have longer operating histories, larger customer bases, greater brand recognition, greater access to capital and significantly greater financial, marketing and other resources than we do, affects us and has had and could continue to have a material adverse effect on our financial results, business and prospects. 14 Our business depends on effective marketing, including marketing via email, search engine marketing, influencer marketing, and social media marketing, and our competitors have and may continue to directly increase our marketing costs, may outspend us on marketing or be more efficient, and also have and may continue to cause us to decrease certain types of marketing.
We have developed certain software products to assist with the operation and management of our business which could contain flaws or vulnerabilities that could present cyber security-related risks, data loss, other security breaches, or damage to our business, our suppliers, or our customers.
We have developed certain software products to assist with the operation and management of our business, which could contain flaws or vulnerabilities that could present cybersecurity-related risks or result in data loss, other security breaches, or damage to our business, our suppliers, or our customers.
If we are not profitable and/or are unable to generate sufficient positive cash flow from operations, our ability to continue in business will depend on our ability to raise additional capital, obtain financing or monetize significant assets, and we may be unable to do so. At December 31, 2022 our accumulated deficit was $173.8 million.
If we are not profitable and/or are unable to generate sufficient positive cash flow from operations, our ability to continue in business will depend on our ability to raise additional capital, obtain financing or monetize significant assets, and we may be unable to do so. At December 31, 2023, our accumulated deficit was $481.7 million.
Moreover, any insurance coverage we may carry may be inadequate to cover the expenses and other potential financial exposure we could face as a result of a cyber-attack or data breach. We recently reversed the valuation allowance for a significant portion of our deferred tax assets, and we may not be able to realize these assets in the future.
Moreover, any insurance coverage we may carry may be inadequate to cover the expenses and other potential financial exposure we could face as a result of a cyber-attack or data breach. We have significant deferred tax assets and may not be able to realize these assets in the future.
Sanctions, bans, trade restrictions, or other economic actions in response to the present or future conflict in Ukraine, China, or in response to any other global conflict could result in an increase in costs, further disruptions to our supply chain, and a lack of consumer confidence resulting in reduced demand.
Sanctions, bans, trade restrictions, or other economic actions in response to present or future conflicts could result in an increase in costs, further disruptions to our supply chain, and a lack of consumer confidence resulting in reduced demand.
Although we have migrated and continue to migrate some of our computer systems and operations to the public cloud, a substantial majority of our computer and communications infrastructure is running in our private cloud on hardware that is located at a single Overstock owned and operated facility.
Although we have migrated and continue to migrate some of our computer systems and operations to the public cloud, a substantial majority of our computer and communications infrastructure is running in our private cloud on hardware that is located at a single Beyond owned and operated facility which we are currently marketing for sale.
We experienced significant losses in years leading up to 2020. Although our financial results were significantly better in 2020 and 2021, we incurred additional losses in 2022 which included significant non-cash losses on our equity method investments.
We experienced significant losses in years leading up to 2020. Although our financial results were significantly better in 2020 and 2021, we incurred additional losses in 2022 and 2023, which included significant non-cash losses on our equity method investments and a write-down loss on our corporate headquarters.
If the actual cost of our employees' health insurance claims and related expenses exceeds the amounts we have accrued, we may be required to record additional charges for these claims and/or to establish additional cash reserves, which could have a material adverse effect on our financial results, business and prospects. 18 We may be unable to protect our proprietary technology and to obtain trademark protection for our marks.
If the actual cost of our employees' health insurance claims and related expenses exceeds the amounts we have accrued, we may be required to record additional 19 charges for these claims and/or to establish additional cash reserves, which could have a material adverse effect on our financial results, business and prospects.
We depend on our carriers and fulfillment partners to perform traditional retail operations such as maintaining inventory, preparing merchandise for shipment to our customers and delivering purchased merchandise on a timely and cost-effective basis.
We depend on our carriers, insurers, warranty providers, and fulfillment partners to perform traditional retail operations such as maintaining inventory, preparing merchandise for shipment to our customers, delivering purchased merchandise on a timely and cost-effective basis, insuring the products, and offering warranty services associated with products.
Any of these items could have a material adverse effect on our business and financial results. We and certain of our former and current officers and directors are named in shareholder class action lawsuits and shareholder derivative lawsuits, which could require significant additional management time and attention, result in significant additional legal expenses or result in government enforcement actions.
We and certain of our former and current officers and directors are named in shareholder class action lawsuits and shareholder derivative lawsuits, which could require significant additional management time and attention, result in significant additional legal expenses or result in government enforcement actions.
Other new or revised legal, regulatory, or tax treatment could expose us to additional risk, increase the cost of doing business online, and increase internal costs necessary to capture data, report data, and collect and remit taxes.
Other new or revised legal, regulatory, or tax treatment could expose us to additional risk, increase the cost of doing business online, and increase internal costs necessary to capture data, report data, and collect and remit taxes. Any of these items could have a material adverse effect on our business and financial results.
If we are unable to successfully manage our business in the future, our ability to continue in business could depend on our ability to raise sufficient additional capital, obtain sufficient financing, or sell or otherwise monetize significant assets such as our corporate headquarters. Additionally, we may not be able to raise capital on acceptable terms or at all.
If we are unable to successfully manage our business in the future, our ability to continue in business could depend on our ability to raise sufficient additional capital, obtain sufficient financing, or sell or otherwise monetize significant assets such as our corporate headquarters which is currently being marketed for sale.
We may be unable to protect against such risks, in the United States or elsewhere, which could have a material adverse effect on our business. Although we have registered and are pursuing the registration of our key trademarks in the United States and some other countries, some of our trade names may not be eligible to receive registered trademark protection.
Although we have registered and are pursuing the registration of our key trademarks in the United States and some other countries, some of our trade names may not be eligible to receive registered trademark protection.
The occurrence of any of the foregoing could have a material adverse effect on our financial results, business, prospects, and the trading prices of our securities. 19 If Pelion is not successful in managing the Medici Ventures, L.P. fund or has to resign if there is a change in the interpretation or application of the Investment Advisers Act of 1940 (the "Advisers Act"), we would be unable to realize the anticipated benefits of this arrangement.
If Pelion is not successful in managing the Medici Ventures, L.P. fund or has to resign if there is a change in the interpretation or application of the Investment Advisers Act of 1940 (the "Advisers Act"), we would be unable to realize the anticipated benefits of this arrangement.
In prior years we added additional types of services and product offerings and in some cases, we modified or discontinued those offerings, and in some cases have re-launched offerings we had previously terminated. We may continue to try to offer additional types of products or services, and we do not know whether any of them will be successful.
In prior years we added additional types of services and product offerings and in some cases, we modified or discontinued those offerings, and in some cases have re-launched offerings we had previously terminated.
In addition, we continue to experiment with new technologies to enhance the customer experience and iterate on delivery of new features. The additions and modifications to our business have increased the complexity of our business and impacted our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions.
The additions and modifications to our business have increased the complexity of our business and impacted our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions.
Similarly, a substantial portion of the products and services we offer are products or services that consumers may view as discretionary items rather than necessities. As a result, our results of operations are sensitive to changes in macroeconomic conditions that impact consumer spending, including discretionary spending. Difficult macroeconomic conditions also impact our customers' ability to obtain consumer credit.
As a result, our results of operations are sensitive to changes in macroeconomic conditions that impact consumer spending, including discretionary spending. Difficult macroeconomic conditions also impact our customers' ability to obtain consumer credit.
We have experienced periodic systems interruptions due to server failure, application failure, power failure and intentional cyber-attacks in the past, and may experience additional interruptions or failures in the future. Any failure or impairment of our infrastructure or of the availability of the Internet or related systems could have a material adverse effect on our financial results, business and prospects.
We have experienced periodic systems interruptions due to server failure, application failure, power failure and intentional cyber-attacks in the past, and may experience additional interruptions or failures in the future.
The underlying equity interests are in entities that are in the startup or development stages. Equity method securities are inherently risky because we do not have the ability to influence business decisions. Further, these investments are inherently risky because the markets for the technologies or products these companies are developing are typically in the early stages and may never materialize.
Further, these investments are inherently risky because the markets for the technologies or products these companies are developing are typically in the early stages and may never materialize.
From time to time we have also modified aspects of our business model relating to our product mix and the mix of direct/partner sourcing of the products we offer. We recently eliminated our assortment of non-home goods offered for sale on our Website in order to increase our brand association with "home" expertise.
From time to time, we have also modified aspects of our business model relating to our product mix and the mix of direct/partner sourcing of the products we offer.
Our success depends to a significant degree upon the protection of our software and other proprietary intellectual property rights. We rely on a combination of laws and contractual restrictions with our employees, customers, suppliers, affiliates, and others to establish and protect our proprietary rights, including the law pertaining to trade secrets.
We rely on a combination of laws and contractual restrictions with our employees, customers, suppliers, affiliates, and others to establish and protect our proprietary rights, including the law pertaining to trade secrets. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our intellectual property or trade secrets without authorization.
Third parties have in the past recruited and may in the future recruit our employees who have had access to our proprietary technologies, processes and operations. These recruiting efforts expose us to the risk that such employees and those hiring them will misappropriate and exploit our intellectual property and trade secrets.
In addition, we cannot ensure that others will not independently develop similar intellectual property. Third parties have in the past recruited and may in the future recruit our employees who have had access to our proprietary technologies, processes and operations.
Further, any new business, technology, or website we launch that is not favorably received by consumers could damage our reputation or our brand.
Further, any new business, products or services, technology, or website we launch that is not favorably received by consumers could 20 damage our reputation or our brand. The occurrence of any of the foregoing could have a material adverse effect on our financial results, business, prospects, and the trading prices of our securities.
Further, our efforts to promote a culture of innovation amongst our technologists in an attempt to stay ahead of the competition may result in the introduction of technologies that are less mature or stable which could cause problems in our website or back-end logistics systems. Future additions to or modifications of our business are likely to have similar effects.
Further, our efforts to right-size our cost structure and create a more flexible technology stack may result in the introduction of technologies that are less mature or stable, which could cause problems in our website or back-end logistics systems.
Our deferred tax assets may also be subject to additional valuation allowances, which could adversely affect our operating results. Determining whether a valuation allowance for deferred tax assets is appropriate requires judgment and an evaluation of all positive and negative evidence.
We have established a valuation allowance for our net deferred tax assets, primarily due to recent operating losses, forecasted near-term losses, and uncertainty regarding our future taxable income. Determining whether a valuation allowance for deferred tax assets is appropriate requires judgment and an evaluation of all positive and negative evidence.
Various potential adverse economic conditions, including a recession, other economic downturns, inflation, and weakness in the U.S. housing market, could decrease consumer discretionary spending and further adversely affect our financial performance. Consumer prices for all items rose 6.5% percent from December 2021 to December 2022. High inflation rates have led to increased interest rates.
Various potential adverse economic conditions, including a recession, other economic downturns, inflation, and weakness in the U.S. housing market, could decrease consumer discretionary spending and further adversely affect our financial performance. We believe that our sales of home-related products are affected by the strength of the U.S. housing industry and overall consumer sentiment on discretionary goods.
We recently announced that under our FORWARD (Future of Remote Work and Re-entry Design) Plan, most of our local workforce will increase their onsite workdays to three days each week and perform the remaining workdays in that week remotely.
Currently, most of our local workforce works a hybrid schedule, where they work onsite three days each week and perform the remaining workdays in that week remotely. We are planning to sell our corporate headquarters, which if completed, could result in more remote work.
Our performance also depends on our ability to retain and motivate our officers and key employees. Given the current labor migration trends in the U.S., and more businesses allowing employees to work remotely, we are forced to compete with businesses in other locations and states to attract and retain key employees.
Uncertainties, including any substantial changes in leadership, or any negative impacts associated with performance-based compensation, may cause employees to seek other opportunities or impair our ability to recruit new employees. With more businesses allowing employees to work remotely, we are forced to compete with businesses in other locations and states to attract and retain key employees.
Employees may leave to work for businesses they find more attractive. Any such occurrences could have a material negative impact on the business. Our business depends on the Internet, our infrastructure and transaction-processing systems. We are completely dependent on our infrastructure and on the availability, reliability and security of the Internet and related systems.
We are completely dependent on our infrastructure and on the availability, reliability and security of the Internet and related systems.
Global conflict, increasing tensions between the United States and Russia, the United States and China, and other effects of the ongoing conflict in Ukraine, could negatively impact our business, results of operations, and financial condition.
Any problems with our implementation or use of AI or other technological advancements could negatively impact our business or results of our operations. Global conflict could negatively impact our business, results of operations, and financial condition.
At each reporting period, we assess the need for, or the sufficiency of a valuation allowance against deferred tax assets. During 2021, based on the weight of all the positive and negative evidence, we concluded that it was more likely than not that we will realize certain federal and state net deferred tax assets based on future taxable income.
At each reporting period, we assess the need for, or the sufficiency of a valuation allowance against deferred tax assets. We intend to maintain a valuation allowance on our net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of the allowance.
Removed
The changing job market, the loss of key personnel, the changing job structure, or any inability to attract, retain and engage additional key personnel could affect our ability to successfully grow our business. Our performance is substantially dependent on the continued service and performance of our senior management and other key personnel.
Added
Our changing business model and use of the Overstock brand, Bed Bath & Beyond brand, and Beyond brand, could negatively impact our business.
Removed
This hybrid job structure for most of our workforce, with increased time onsite, could create consequences such as a lack of productivity, a lack of engagement, employee dissatisfaction, and employee fatigue. Some key employees may leave to work for businesses that offer 14 full-time remote work schedules, full-time onsite work schedules, or for businesses they otherwise find more attractive.
Added
We changed our company name from Overstock.com, Inc. to Beyond, Inc., purchased the Bed Bath & Beyond brand, changed our company ticker symbol from OSTK to BYON, and transferred the listing of our common stock from NASDAQ to the NYSE.
Removed
The occurrence of any of the foregoing risks would have a material adverse effect on our financial results, business and prospects. Remote or hybrid work schedules, resulting from future pandemics or otherwise, could have technology and security consequences, could result in policies, mandates, or regulations that apply unevenly to businesses, could cause employee fatigue, and could negatively impact our operations.
Added
These changes may cause negative impacts to our business, including customers and shareholders, confusion about our brands, the need for higher promotional discounting or marketing costs to acquire and maintain customers, diversion of the attention of management or key personnel, employee fatigue resulting from implementation efforts, disruptions to existing business relationships, unexpected economic, political, or regulatory risks; or any other unforeseen costs, expenses, losses, disruptions, delays, or negative impacts. 15 The changing job market, the changes in our leadership team, the change in our compensation approach, the loss of key personnel, the changing job structure, or any inability to attract, retain and engage key personnel could affect our ability to successfully grow our business.
Removed
Many of our employees and contractors continue to work remotely or on a hybrid work schedule.
Added
Our performance is substantially dependent on the continued service and performance of our senior management, our board of directors, and other key personnel. We underwent significant changes to our executive management team and our board of directors in 2023, with certain key positions still remaining open.
Removed
Additional risks are inherent when employees and contractors work remotely, including risks that third-party Internet and phone service providers may not provide adequate services for employees and contractors to perform their responsibilities, risks that hardware, software, or other technological problems or failures could prevent employees or contractors from performing their responsibilities and could take an excessive amount of time to resolve and risks that employees and contractors may not be trained as effectively or monitored as closely from remote locations, creating greater risks for the security of confidential information.
Added
We also underwent changes to our workforce in 2023 when we had a reduction in force. We adjusted our approach to equity compensation provided to our executives from a time-based approach to a performance-based approach.
Removed
Additionally, government policies, mandates, or regulations created in response to the future spread of disease or illness could apply unevenly to businesses, whether based on business size, industry, or some other reason, which could make certain businesses less desirable for employment and could impair our ability to attract and/or retain key employees.
Added
The changes in leadership, the reduction in force, the changed approach to performance-based compensation, and the uncertainty of the future job structure could create consequences such as a lack of productivity, a lack of engagement, employee dissatisfaction, and employee fatigue and could result in key employees finding other employers more attractive than working for our Company.
Removed
Therefore, we reversed the valuation allowance on those deferred tax assets during 2021. We maintain a valuation allowance against our deferred tax assets for capital losses and the state of Utah where not supported by future reversals of taxable temporary differences, because of the uncertainty regarding the realizability of these deferred tax assets.
Added
Additionally, we may not be able to raise capital on acceptable terms or at all. The occurrence of any of the foregoing risks would have a material adverse effect on our financial results, business and prospects. Our business depends on the Internet, our infrastructure and transaction-processing systems.
Removed
Our conclusion that it is more likely than not that we will realize certain federal and state net deferred tax assets is primarily based on our estimate of future taxable income. Our estimate of future taxable income is based on internal projections which primarily consider historical performance, but also include various internal estimates and assumptions and certain external data.
Added
Any failure or impairment of our infrastructure or of the availability of the Internet or related systems caused by any source, including the transfer of our hardware to another location if we sell the facility where it is now located, could have a material adverse effect on our financial results, business and prospects.
Removed
We believe all of these inputs to be reasonable, although inherently subject to judgment. If actual results differ significantly from these estimates of future taxable income, we may need to reestablish a valuation allowance for some or all of our deferred tax assets.
Added
We may be required to recognize losses relating to our equity method investments. At December 31, 2023, we held equity method investments totaling approximately $155.9 million. The underlying equity interests are in entities that are in the startup or development stages. Equity method securities are inherently risky because we do not have the ability to influence business decisions.
Removed
Establishing an allowance on our net deferred tax assets could have a material adverse effect on our financial condition and operating results. We may be required to recognize losses relating to our equity method investments. At December 31, 2022, we held equity method investments totaling approximately $296.3 million.
Added
For example, in January 2024, Google began testing a new feature in Chrome that limits cross-site tracking by restricting website access to third-party cookies by default, with a goal of phasing out third-party cookies for everyone in the second half of 2024.
Removed
For example, the Tax Cuts and Jobs Act of 2017 eliminated the option to immediately deduct research and development expenditures in 2022, and instead required them to be amortized in future years. This new requirement caused us to utilize significant federal and state net operating loss carryforwards in the current year.
Added
For example, various jurisdictions around the world have enacted or are considering revenue-based taxes such as digital services taxes and other targeted taxes, which could lead to inconsistent and potentially overlapping international tax regimes.
Removed
We expect to continue to utilize federal and state tax attributes at a faster rate than our financial statement earnings in the future and there may be increases to cash taxes paid unless legislation is passed that would defer, repeal, or otherwise modify these new requirements.
Added
The Organization for Economic Cooperation and Development (OECD) is coordinating negotiations among more than 140 countries with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, we operated the following facilities (square feet in thousands): United States International Total Owned facilities 260 — 260 Leased facilities 1,018 13 1,031 Total facilities 1,278 13 1,291
Biggest changeAs of December 31, 2023, we operated the following facilities (square feet in thousands): United States International Total Owned facilities (1) 260 — 260 Leased facilities 496 13 509 Total facilities 756 13 769 ___________________________________________ (1) In December 2023, the Company listed its owned corporate headquarters for sale.
ITEM 2. PROPERTIES We own and lease various properties in the United States and internationally. We use the properties for corporate office space, data centers, and warehouse, fulfillment and customer service space.
ITEM 2. PROPERTIES We own and lease various properties in the United States and internationally. We use the properties for corporate office space, data centers, and warehouse and fulfillment space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we are involved in, or become subject to litigation or other legal proceedings concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we are involved in, or become subject to litigation or other legal proceedings concerning consumer protection, employment, privacy, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website.
For additional details, see the information set forth under Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 12—Commitments and Contingencies, subheading Legal Proceedings and Contingencies, contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K, which is incorporated by reference in answer to this Item. ITEM 4.
For additional details, see the information set forth under Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 16—Commitments and Contingencies, subheading Legal Proceedings and Contingencies, contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K, which is incorporated by reference in answer to this Item. ITEM 4.
MINE SAFETY DISCLOSURES Not applicable. 23 PART II
MINE SAFETY DISCLOSURES Not applicable. 25 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information The principal U.S. trading market for our common stock is the Nasdaq Global Market. Our common stock is traded under the symbol "OSTK." Holders As of February 17, 2023, there were 333 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information Beginning on November 6, 2023, the principal U.S. trading market for our common stock is the New York Stock Exchange.
We declared and paid a cash dividend of $0.16 per share on our preferred stock during 2021 and 2020. As discussed below under "—Preferred Stock Conversion," we converted all of our then-outstanding Series A-1 and Series B preferred stock into common stock on June 10, 2022, and did not pay a cash dividend prior to conversion in 2022.
We declared and paid a cash dividend of $0.16 per share on our preferred stock during 2021. As discussed below under "—Preferred Stock Conversion," we converted all of our then-outstanding Series A-1 and Series B preferred stock into common stock on June 10, 2022, and did not pay a cash dividend prior to conversion in 2022.
The shares of preferred stock previously designated as Series A-1 and Series B preferred stock returned to the status of authorized and undesignated shares of preferred stock under our certificate of incorporation. 25 COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN The following graph shows a comparison of the cumulative total stockholder return on our common stock with the cumulative total returns of NASDAQ Market Index, the S&P 500 Index and the S&P Retail Select Index.
The shares of preferred stock previously designated as Series A-1 and Series B preferred stock returned to the status of authorized and undesignated shares of preferred stock under our certificate of incorporation. 26 COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN The following graph shows a comparison of the cumulative total stockholder return on our common stock with the cumulative total returns of NASDAQ Market Index, the S&P 500 Index, the S&P Retail Select Index, and the NYSE Composite TR.
At December 31, 2022 we had no preferred stock outstanding. Recent sales of unregistered securities None.
At December 31, 2023 and 2022, we had no preferred stock outstanding. Recent sales of unregistered securities None.
The graph tracks the performance of a $100 investment in our common stock and in each of the indexes during the last five fiscal years ended December 31, 2022. Data for the NASDAQ Market Index, the S&P 500 Index and the S&P Retail Select Index assume reinvestment of dividends.
The graph tracks the performance of a $100 investment in our common stock and in each of the indexes during the last five fiscal years ended December 31, 2023. Data for the NASDAQ Market Index, the S&P 500 Index, the S&P Retail Select Index, and the NYSE Composite TR assume reinvestment of dividends.
The Repurchase Program expires in December 2023. 24 Preferred Stock Conversion On May 12, 2022, Overstock shareholders voted to approve separate proposals to approve the amendment of the Company's Amended and Restated Certificate of Designation for both classes of its preferred stock to provide that each share of our Series A-1 and Series B preferred stock would be automatically converted into 0.90 of a share of our common stock (the "Conversion").
Preferred Stock Conversion On May 12, 2022, Beyond shareholders voted to approve separate proposals to approve the amendment of the Company's Amended and Restated Certificate of Designation for both classes of its preferred stock to provide that each share of our Series A-1 and Series B preferred stock would be automatically converted into 0.90 of a share of our common stock (the "Conversion").
Index Data: Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved. Index Data: Copyright Standard and Poor's, Inc. Used with permission. All rights reserved. 26 ITEM 6. Reserved.
Index Data: Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved. 27 ITEM 6. Reserved.
Many of our shares of common stock are held by brokers and other institutions on behalf of the beneficial owners. Dividends We have never declared or paid any cash dividends on our common stock. We currently intend to retain any earnings for future growth and do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Dividends We have never declared or paid any cash dividends on our common stock. We currently intend to retain any earnings for future growth and do not anticipate paying any cash dividends on our common stock in the foreseeable future.
They do not necessarily reflect management's opinion that such indices are an appropriate measure of the relative performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of the Company's common stock. Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2023.
They do not necessarily reflect management's opinion that such indices are an appropriate measure of the relative performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of the Company's common stock.
Removed
Issuer purchases of equity securities The following table sets forth information with respect to repurchases of shares of our common stock made during the quarter ended December 31, 2022 (in thousands, except share and per share data): Period Total Number of Common Shares Purchased Average Price Paid per Common Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that may yet be Purchased under the Plans or Programs (1) October 1 - 31 — $ — — $ 39,923 November 1 - 30 808,803 $ 24.76 808,803 $ 19,884 December 1 - 31 — $ — — $ 19,884 Total 808,803 808,803 ___________________________________________ (1) In August 2021, our Board of Directors approved a stock repurchase program (the "Repurchase Program") for the repurchase of up to $100.0 million of our common stock.
Added
Our common stock is traded under the symbol "BYON." Our common stock previously traded on the Nasdaq Global Market under the symbol "OSTK." Holders As of February 16, 2024, there were 350 holders of record of our common stock. Many of our shares of common stock are held by brokers and other institutions on behalf of the beneficial owners.
Removed
On March 9, 2022, our Board of Directors expanded the Repurchase Program to include the repurchase of our Series A-1 preferred stock and/or Series B preferred stock.
Added
Issuer purchases of equity securities See Note 18—Stockholders' Equity in the "Notes to Consolidated Financial Statements" included in Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for information regarding our authorized share repurchase program. There were no repurchases made during the three months ended December 31, 2023.
Added
As of December 31, 2023, the approximate dollar value of shares that may yet be purchased under the stock repurchase program is $69.9 million.
Added
Because our common stock traded on both the Nasdaq Global Market and the New York Stock Exchange for different portions of 2023, we elected to add the NYSE Composite TR to the graph. Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2024. Index Data: Copyright Standard and Poor's, Inc. Used with permission. All rights reserved.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table summarizes our technology expenses for the years ended December 31, 2022 and 2021 (in thousands): Year ended December 31, 2022 2021 Technology expenses $ 121,158 $ 123,001 Year-over-year percentage change Technology expenses (1.5) % Technology expenses as a percent of net revenue 6.3 % 4.5 % The $1.8 million decrease in technology expenses for the year ended December 31, 2022, as compared to the same period in 2021, was primarily due to decreased third party spend and staff-related expenses.
Biggest changeThe following table summarizes our technology expenses for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Technology expenses $ 117,154 $ 121,158 Year-over-year percentage change Technology expenses (3.3) % Technology expenses as a percent of net revenue 7.5 % 6.3 % The $4.0 million decrease in technology expenses for the year ended December 31, 2023, as compared to the same period in 2022, was primarily due to a reduction in staff-related expenses. 34 General and administrative expenses The following table summarizes our general and administrative expenses for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 General and administrative expenses $ 90,410 $ 79,701 Year-over-year percentage change General and administrative expenses 13.4 % General and administrative expenses as a percent of net revenue 5.8 % 4.1 % The $10.7 million increase in general and administrative expenses for the year ended December 31, 2023, as compared to the same period in 2022, was primarily due to increased legal fees, Bed Bath & Beyond brand integration expenses, and severance.
The $12.5 million of net cash used by continuing operating activities during the year ended December 31, 2022 was primarily due to income from continuing operations, adjusted for non-cash items, of $67.8 million, offset by cash used by changes in operating assets and liabilities of $80.3 million.
The $12.5 million of net cash used by operating activities during the year ended December 31, 2022 was primarily due to income from continuing operations, adjusted for non-cash items, of $67.8 million, offset by cash used by changes in operating assets and liabilities of $80.3 million.
For information regarding our financing agreements, see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 10—Borrowings contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K. Tax contingencies We are involved in various tax matters, the outcomes of which are uncertain.
For information regarding our financing agreements, see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 13—Borrowings contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K. Tax contingencies We are involved in various tax matters, the outcomes of which are uncertain.
Changes in state, federal, and foreign tax laws may increase our tax contingencies. The timing of the resolution of income tax contingencies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued.
Changes in federal, foreign, state, and local tax laws may increase our tax contingencies. The timing of the resolution of income tax contingencies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued.
Costs associated with our discounted shipping and other promotions, such as coupons, are not included in sales and marketing expense. Rather, they are accounted for as a reduction in revenue as they reduce the amount of consideration we expect to receive in exchange for goods or services and therefore affect net revenues and gross margin.
Costs associated with our loyalty program, discounted shipping, and other promotions, such as coupons, are not included in sales and marketing expense. Rather, they are accounted for as a reduction in revenue as they reduce the amount of consideration we expect to receive in exchange for goods or services and therefore affect net revenues and gross margin.
For information regarding our operating lease obligations, see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 11—Leases contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K. (2) Represents future interest and principal payments on our financing agreements.
For information regarding our operating lease obligations, see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 14—Leases contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K. (2) Represents future interest and principal payments on our financing agreements.
Due to the inherent uncertainty of determining the fair value of Level 3 securities that do not have a readily available market value, the determination of fair value required significant judgment or estimation and changes in the estimates and assumptions used in the valuation models could materially affect the determination of fair value for these assets. 35
Due to the inherent uncertainty of determining the fair value of Level 3 securities that do not have a readily available market value, the determination of fair value required significant judgment or estimation and changes in the estimates and assumptions used in the valuation models could materially affect the determination of fair value for these assets. 36
Merchant fees, customer service, and other (previously labeled "Fulfillment and related costs") include merchant processing fees associated with customer payments made by credit cards and other payment methods and other variable fees, customer service costs, costs incurred to operate and staff our warehouses, including rent and depreciation expense associated with these facilities, costs to receive, inspect, pick, and prepare customer order for delivery, and direct and indirect labor costs including payroll, payroll-related benefits, and stock-based compensation, all of which we include as costs in calculating gross margin.
Merchant fees, customer service, and other include merchant processing fees associated with customer payments made by credit cards and other payment methods and other variable fees, customer service costs, costs incurred to operate and staff our warehouses, including rent and depreciation expense associated with these facilities, costs to receive, inspect, pick, and prepare customer order for delivery, and direct and indirect labor costs including payroll, payroll-related benefits, and stock-based compensation, all of which we include as costs in calculating gross margin.
Nevertheless, as of December 31, 2022, the challenges arising from these events have not adversely affected our liquidity or capacity to service our debt, nor have these conditions required us to reduce our capital expenditures. 28 Liquidity and Capital Resources Overview We believe that our cash and cash equivalents currently on hand and expected cash flows from future operations will be sufficient to continue operations for at least the next twelve months.
Nevertheless, as of December 31, 2023, the challenges arising from these events have not adversely affected our liquidity or capacity to service our debt, nor have these conditions required us to reduce our capital expenditures. 29 Liquidity and Capital Resources Overview We believe that our cash and cash equivalents currently on hand and expected cash flows from future operations will be sufficient to continue operations for at least the next twelve months.
As of December 31, 2022, and 2021, tax contingencies were $3.5 million and $3.2 million, respectively, which are included in our reconciliation of unrecognized tax benefits (see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 19—Income Taxes contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K).
As of December 31, 2023, and 2022, tax contingencies were $3.7 million and $3.5 million, respectively, which are included in our reconciliation of unrecognized tax benefits (see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 24—Income Taxes contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K).
It is also affected to a lesser extent by tax rates in foreign jurisdictions and the relative amount of income we earn in those jurisdictions, which we expect to be fairly consistent in the near term.
Our effective tax rate is also affected to a lesser extent by tax rates in foreign jurisdictions and the relative amount of income we earn in those jurisdictions, which we expect to be fairly consistent in the near term.
Income taxes Our effective tax rate for the years ended December 31, 2022 and 2021 was (4.1)% and (39.6)%, respectively. Our effective tax rate is affected by recurring items such as research tax credits and non-recurring items such as changes in valuation allowances.
Income taxes Our effective tax rate for the years ended December 31, 2023 and 2022 was (15.7)% and (4.1%), respectively. Our effective tax rate is affected by recurring items such as research tax credits and non-recurring items such as changes in valuation allowances.
Financing activities The $86.3 million net cash used in financing activities during the year ended December 31, 2022 resulted primarily from $80.1 million for repurchases of our common stock and Series A-1 preferred stock under the Repurchase Program, $3.7 million of payments of taxes withheld upon vesting of restricted stock, and $3.4 million of payments on long-term debt.
The $86.3 million of net cash used in financing activities during the year ended December 31, 2022 was primarily due to repurchases of our common stock and Series A-1 preferred stock under the Repurchase Program of $80.1 million, payments of taxes withheld upon vesting of employee stock awards of $3.7 million, and payments on long-term debt of $3.4 million.
We continue to monitor, evaluate, and manage our operating plans, forecasts, and liquidity considering the most recent developments driven by macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, and the current conflict between Russia and Ukraine.
We continue to monitor, evaluate, and manage our operating plans, forecasts, and liquidity considering the most recent developments driven by macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, and geopolitical events.
Due to the uncertain and constantly evolving nature and extreme volatility created by these disruptions in the capital markets, we cannot currently predict the long-term impact of these events on our operations and financial results.
Due to the uncertain and constantly evolving nature and volatility created by these disruptions to global economic activities, we cannot currently predict the long-term impact of these events on our operations and financial results.
We proactively seek opportunities to improve the efficiency of our operations and have in the past and may in the future take steps to realize internal cost savings, including aligning our staffing needs based on our current and expected future levels of operations and process streamlining.
We proactively seek opportunities to improve the efficiency of our operations and have in the past and may in the future take steps to realize internal cost savings, including aligning our staffing needs, creating a more variable cost structure to better support our current and expected future levels of operations and process streamlining.
However, actual shipping times may differ from our estimates, which can be further impacted by uncertainty, volatility, and any disruption to our carriers caused by certain macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, or the current conflict between Russia and Ukraine. 31 The following table shows the effect that hypothetical changes in the estimate of average shipping transit times would have on the reported amount of revenue and income before taxes (in thousands): Year Ended December 31, 2022 Change in the Estimate of Average Transit Times (Days) Increase (Decrease) Revenue Increase (Decrease) Income Before Income Taxes 2 $ (8,819) $ (1,810) 1 $ (5,794) $ (1,189) As reported As reported As reported (1) $ 3,702 $ 760 (2) $ 6,776 $ 1,392 Gross profit and gross margin Our overall gross margins fluctuate based on competitive pricing; inventory management decisions; sales coupons and promotions; product mix of sales; advertising revenue and our marketing allowance program; and operational and fulfillment costs.
However, actual shipping times may differ from our estimates, which can be further impacted by uncertainty, volatility, and any disruption to our carriers caused by certain macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, or geopolitical events. 32 The following table shows the effect that hypothetical changes in the estimate of average shipping transit times would have on the reported amount of revenue and income before taxes (in thousands): Year Ended December 31, 2023 Change in the Estimate of Average Transit Times (Days) Increase (Decrease) Revenue Increase (Decrease) Income Before Income Taxes 2 $ (8,966) $ (671) 1 $ (5,322) $ (433) As reported As reported As reported (1) $ 3,843 $ 295 (2) $ 7,088 $ 533 Gross profit and gross margin Our overall gross margins fluctuate based on competitive pricing; inventory management decisions; sales coupons and promotions, including our loyalty program; product mix of sales; advertising revenue and our marketing allowance program; and operational and fulfillment costs.
Gross margins for the past eight quarterly periods and years ending December 31, 2022 and 2021 were: Q1 Q2 Q3 Q4 FY 2022 23.4 % 22.9 % 23.3 % 22.1 % 23.0 % 2021 23.3 % 22.0 % 22.7 % 22.7 % 22.6 % Gross profit for the year ended December 31, 2022 decreased 29% compared to the same period in 2021, primarily due to decreased sales volume and partially offset by an increase in gross margin.
Gross margins for the past eight quarterly periods and years ending December 31, 2023 and 2022 were: Q1 Q2 Q3 Q4 FY 2023 23.5 % 22.4 % 18.7 % 15.6 % 20.1 % 2022 23.4 % 22.9 % 23.3 % 22.1 % 23.0 % Gross profit for the year ended December 31, 2023 decreased 29% compared to the same period in 2022, primarily due to lower sales and a decrease in gross margin.
We consider discounted shipping and other promotions, such as our policy for free shipping on orders, as an effective marketing tool. 32 The following table summarizes our sales and marketing expenses for the years ended December 31, 2022 and 2021 (in thousands): Year ended December 31, 2022 2021 Sales and marketing expenses $ 215,477 $ 302,430 Advertising expense included in sales and marketing expenses 205,523 289,019 Year-over-year percentage change Sales and marketing expenses (28.8) % Advertising expense included in sales and marketing expenses (28.9) % Percentage of net revenue Sales and marketing expenses 11.2 % 11.0 % Advertising expense included in sales and marketing expenses 10.7 % 10.5 % The 20 basis point increase in sales and marketing expenses as a percent of net revenues for the year ended December 31, 2022, as compared to the same period in 2021, was primarily due to increased brand advertising, partially offset by decreased performance marketing expenses.
We consider discounted shipping and other promotions, such as our policy for free shipping on certain orders, as an effective marketing tool. 33 The following table summarizes our sales and marketing expenses for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Sales and marketing expenses $ 224,547 $ 215,477 Advertising expense included in sales and marketing expenses 214,907 205,523 Year-over-year percentage change Sales and marketing expenses 4.2 % Advertising expense included in sales and marketing expenses 4.6 % Percentage of net revenue Sales and marketing expenses 14.4 % 11.2 % Advertising expense included in sales and marketing expenses 13.8 % 10.7 % The 320 basis point increase in sales and marketing expenses as a percent of net revenues for the year ended December 31, 2023, as compared to the same period in 2022, was primarily due to increased performance marketing expense, partially offset by lower brand advertising.
Sales and marketing expenses as a percentage of revenue increased to 11.2% in 2022 compared to 11.0% in 2021, primarily due to increased brand advertising, partially offset by decreased performance marketing expenses. Technology expenses decreased $1.8 million in 2022 compared to 2021, primarily due to decreased third party spend and staff-related expenses.
Sales and marketing expenses as a percentage of revenue increased to 14.4% in 2023 compared to 11.2% in 2022, primarily due to increased performance marketing expense, partially offset by lower brand advertising. Technology expenses decreased $4.0 million in 2023 compared to 2022, primarily due to a reduction in staff-related expenses.
Gross margin increased to 23.0% for the year ended December 31, 2022, compared to 22.6% for the same period in 2021, primarily due to merchandising actions, advertising revenue, and operational efficiencies. The increase was partially offset by higher promotional discounting and carrier costs.
Gross margin decreased to 20.1% for the year ended December 31, 2023, compared to 23.0% for the same period in 2022, primarily due to increased promotional discounting and carrier costs. The decrease was partially offset by operational efficiencies.
Current sources of liquidity Our principal sources of liquidity are existing cash and cash equivalents, and accounts receivable, net. At December 31, 2022, we had cash and cash equivalents of $371.3 million and accounts receivable, net of $17.7 million.
Current sources of liquidity Our principal sources of liquidity are existing cash and cash equivalents, and accounts receivable, net. At December 31, 2023, we had cash and cash equivalents of $302.6 million and accounts receivable, net of $19.4 million.
We cannot estimate the impact that macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, or the current conflict between Russia and Ukraine will have on our business in the future due to the unpredictable nature of the ultimate development and duration of these conditions.
We cannot estimate the impact that macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, or geopolitical events will have on consumer sentiment and our business in the future due to the unpredictable nature of the ultimate development and duration of these conditions. International net revenues were less than 3% of total net revenues for 2023 and 2022.
Gross profit decreased 29% in 2022 compared to 2021 primarily due to decreased sales volume and partially offset by an increase in gross margin. Gross margin increased to 23.0% in 2022, compared to 22.6% in 2021, primarily due to merchandising actions, advertising revenue, and operational efficiencies. The increase was partially offset by higher promotional discounting and carrier costs.
Gross profit decreased 29% in 2023 compared to 2022 primarily due to lower sales and a decrease in gross margin. Gross margin decreased to 20.1% in 2023, compared to 23.0% in 2022, primarily due to increased promotional discounting and carrier costs. The decrease was partially offset by operational efficiencies.
Contractual Obligations and Commitments The following table summarizes our contractual obligations as of December 31, 2022 and the effect such obligations and commitments are expected to have on our liquidity and cash flow in future periods (in thousands): Payments due by period Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Operating leases (1) $ 8,718 $ 4,816 $ 3,569 $ 333 $ — Loan agreements (2) 49,331 5,264 3,261 2,968 37,838 Total contractual cash obligations $ 58,049 $ 10,080 $ 6,830 $ 3,301 $ 37,838 ___________________________________________ (1) Represents the future minimum lease payments under non-cancellable operating leases.
Contractual Obligations and Commitments The following table summarizes our contractual obligations as of December 31, 2023 and the effect such obligations and commitments are expected to have on our liquidity and cash flow in future periods (in thousands): Payments due by period Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Operating leases (1) $ 4,008 $ 2,986 $ 939 $ 83 $ — Loan agreements (2) 44,067 1,777 2,968 2,972 36,350 Total contractual cash obligations $ 48,075 $ 4,763 $ 3,907 $ 3,055 $ 36,350 ___________________________________________ (1) Represents the future minimum lease payments under non-cancellable operating leases.
We believe that our estimates, assumptions, and judgments are reasonable. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ significantly from these estimates.
We believe that our estimates, assumptions, and judgments are reasonable. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ significantly from these estimates. Our critical accounting policies are as follows: • valuation of certain equity method securities carried at fair value.
The $98.0 million of net cash provided by continuing operating activities during the year ended December 31, 2021 was primarily due to income from continuing operations, adjusted for non-cash items, of $141.6 million, offset by cash used by changes in operating assets and liabilities of $43.6 million. 29 Investing activities The $33.0 million of net cash used in investing activities during the year ended December 31, 2022 was primarily due to purchases of equity securities of $18.9 million and expenditures for property and equipment of $14.9 million.
The $18.6 million of net cash used by operating activities during the year ended December 31, 2023 was primarily due to loss from continuing operations, adjusted for non-cash items, of $60.1 million, offset by cash provided by changes in operating assets and liabilities of $41.5 million.
This executive commentary includes forward-looking statements, and investors are cautioned to read "Special Cautionary Note Regarding Forward-Looking Statements." Our consolidated cash and cash equivalents balance decreased from $503.3 million as of December 31, 2021 to $371.3 million as of December 31, 2022, a decrease of $132.1 million, primarily as the result of repurchases of our common stock and Series A-1 preferred stock under the Repurchase Program of $80.1 million, purchases of equity securities of $18.9 million, expenditures of property and equipment of $14.9 million, and net cash outflows from operating activities of $12.5 million during the year ended December 31, 2022.
This executive commentary includes forward-looking statements, and investors are cautioned to read "Special Cautionary Note Regarding Forward-Looking Statements." Our consolidated cash and cash equivalents balance decreased from $371.3 million as of December 31, 2022 to $302.6 million as of December 31, 2023, a decrease of $68.7 million, primarily as the result of purchases of intangible assets of $25.8 million relating to our acquisition of the Bed Bath & Beyond brand, expenditures of property and equipment of $19.2 million, and net cash outflows from operating activities of $18.6 million during the year ended December 31, 2023.
Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes.
As of December 31, 2023, the cumulative amount of foreign earnings considered permanently reinvested upon which taxes have not been provided, and the corresponding unrecognized deferred tax liability, was not material. 35 Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes.
These assessments may or may not result in changes to our contingencies related to positions on prior years' tax filings. 30 Results of Operations Net revenue, costs of goods sold, gross profit and gross margin The following table summarizes our net revenue, costs of goods sold, gross profit and gross margin for the years ended December 31, 2022 and 2021 (in thousands): Year ended December 31, 2022 2021 Net revenue $ 1,929,334 $ 2,756,446 Cost of goods sold Product costs and other cost of goods sold 1,409,197 2,026,363 Merchant fees, customer service, and other 76,793 106,181 Total cost of goods sold 1,485,990 2,132,544 Gross profit $ 443,344 $ 623,902 Year-over-year percentage changes Net revenue (30.0) % Gross profit (28.9) % Percent of total net revenue Cost of goods sold Product costs and other cost of goods sold 73.0 % 73.5 % Merchant fees, customer service, and other 4.0 % 3.9 % Total cost of goods sold 77.0 % 77.4 % Gross margin 23.0 % 22.6 % The 30% decrease in net revenue for the year ended December 31, 2022, as compared to the same period in 2021, was primarily due to a 39% decrease in the number of customer orders, partially offset by a 15% increase in average order value driven by a continued product mix shift into furniture and home furnishings categories.
These assessments may or may not result in changes to our contingencies related to positions on prior years' tax filings. 31 Results of Operations Our Annual Report on Form 10-K for the year ended December 31, 2022, filed February 24, 2023, includes a discussion and analysis of our year-over-year changes, financial condition, and results of operations for the years ended December 31, 2022 and 2021 in Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations." Net revenue, costs of goods sold, gross profit and gross margin The following table summarizes our net revenue, costs of goods sold, gross profit and gross margin for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Net revenue $ 1,561,122 $ 1,929,334 Cost of goods sold Product costs and other cost of goods sold 1,185,170 1,409,197 Merchant fees, customer service, and other 61,946 76,793 Total cost of goods sold 1,247,116 1,485,990 Gross profit $ 314,006 $ 443,344 Year-over-year percentage changes Net revenue (19.1) % Gross profit (29.2) % Percent of total net revenue Cost of goods sold Product costs and other cost of goods sold 75.9 % 73.0 % Merchant fees, customer service, and other 4.0 % 4.0 % Total cost of goods sold 79.9 % 77.0 % Gross margin 20.1 % 23.0 % The 19% decrease in net revenue for the year ended December 31, 2023, as compared to the same period in 2022, was primarily due to a decrease in average order value of 16% and a 4% decrease in the number of customer orders delivered.
As we ship high volumes of packages through multiple carriers, it is not practical for us to track the actual delivery date of each shipment. Therefore, we use estimates to determine which shipments are delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times.
Therefore, we use estimates to determine which shipments are delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times. We review and update our estimates on a quarterly basis based on our actual transit time experience.
In the absence of quoted market prices (e.g., a privately held entity), the fair value was determined in good faith under our valuation policy and process using generally accepted valuation approaches. We utilized an independent third party valuation firm to assist us in determining the fair value of our direct minority interest in tZERO using a market approach.
Valuation of certain equity method securities carried at fair value We measured certain equity method securities at fair value at the reporting date. In the absence of quoted market prices (e.g., a privately held entity), the fair value was determined in good faith under our valuation policy and process using generally accepted valuation approaches.
Other income (expense), net The $76.3 million decrease in other income (expense), net for the year ended December 31, 2022, as compared to the same period in 2021, was primarily due to a $76.5 million decrease in income recognized on our equity method securities.
Other income (expense), net The $96.2 million decrease in other income (expense), net for the year ended December 31, 2023, as compared to the same period in 2022, was primarily due to a $76.5 million increase in loss recognized from our equity method securities and a $25.9 million write-down of assets held for sale, partially offset by a $6.4 million realized gain on the disposal of cryptocurrencies.
The $12.7 million net cash used in financing activities during the year ended December 31, 2021 resulted primarily from $8.3 million of payments of taxes withheld upon vesting of restricted stock and $3.0 million of payments on long-term debt.
The $33.0 million of net cash used in investing activities during the year ended December 31, 2022 was primarily due to purchases of equity securities of $18.9 million and expenditures for property and equipment of $14.9 million. 30 Financing activities The $5.5 million of net cash used in financing activities during the year ended December 31, 2023 was primarily due to payments of taxes withheld upon vesting of employee stock awards of $3.8 million and payments on long-term debt of $3.6 million.
Revenue decreased 30% in 2022 compared to 2021. This decrease was primarily due to a 39% decrease in the number of customer orders, partially offset by a 15% increase in average order value driven by a continued product mix shift into furniture and home furnishings categories.
Revenue decreased 19% in 2023 compared to 2022. This decrease was primarily due to a decrease in average order value of 16% and a 4% decrease in the number of customer orders delivered. The decrease in average order value was largely driven by orders mixing into categories with lower average unit retail price.
The market approach relied upon market transaction valuations of the subject company, adjusted for enterprise value changes in guideline public companies.
We utilized an independent third party valuation firm to assist us in determining the fair value of our direct minority interest in tZERO using a market approach. The market approach relied upon market transaction valuations of the subject company, adjusted for changes in enterprise value for guideline public companies.
This decreased order activity was largely driven by the absence of pandemic-related shopping behavior as seen in the prior year, the impact of macroeconomic factors including a heightened inflationary environment and uncertainty impacting consumer sentiment, a shift in consumer spending preferences, and our strategy to exit non-home categories.
The decrease in orders delivered was largely driven by the impact of macroeconomic factors and uncertainty impacting consumer sentiment, a shift in consumer spending preferences, and our strategy to exit non-home categories, partially offset by an increase in orders delivered following the launch of the Bed Bath & Beyond brand in August.
This decreased order activity was largely driven by the absence of pandemic-related shopping behavior as seen in the prior year, the impact of macroeconomic factors including a heightened inflationary environment and uncertainty impacting consumer sentiment, a shift in consumer spending preferences, and our strategy to exit non-home categories.
The decrease in orders delivered was largely driven by the impact of macroeconomic factors and uncertainty impacting consumer sentiment, a shift in consumer spending preferences, and our strategy to exit non-home categories, partially offset by an increase in orders delivered following the launch of the Bed Bath & Beyond brand in August.
We believe that the furniture and home furnishings market, which is highly fragmented and has traditionally been served by brick-and-mortar stores, will continue transitioning to online sales as consumers become increasingly comfortable shopping online. We regularly update our product assortment to meet the evolving preferences of our customers and current trends.
We anticipate a continued shift of the furniture and home furnishings market away from traditional brick-and-mortar stores and toward online sales as consumers increasingly embrace the convenience of online shopping. We regularly refresh our product assortment to reflect the evolving preferences of our customers and stay aligned with current trends.
The $56.4 million of net cash used in investing activities during the year ended December 31, 2021 was primarily due to contributions for capital calls relating to our limited partnership interest in the Medici Ventures, L.P. fund of $41.1 million and expenditures for property and equipment of $13.6 million.
Investing activities The $44.6 million of net cash used in investing activities during the year ended December 31, 2023 was primarily due to purchases of intangible assets of $25.8 million related to Bed Bath & Beyond and expenditures for property and equipment of $19.2 million.
Davidson & Co. ("D.A. Davidson"). We did not sell any shares under our at the market sales program during the years ended December 31, 2022 and 2021. Operating activities Cash received from customers generally corresponds to our net revenues as our customers primarily use credit cards to buy from us causing our receivables from these sales transactions to settle quickly.
Cash flow information is as follows (in thousands): Year ended December 31, 2023 2022 Cash used in: Operating activities $ (18,586) $ (12,535) Investing activities (44,630) (33,034) Financing activities (5,492) (86,340) Operating activities Cash received from customers generally corresponds to our net revenue as our customers primarily use credit cards to buy from us, causing our receivables from these sales transactions to settle quickly.
We are focused on growth drivers including, increasing our home assortment to improve our brand association with home, making it easier for our customers to find and view a broad assortment of products, increasing mobile app adoption driving higher customer retention and brand loyalty, optimizing our marketing efforts to grow Overstock consideration among home shoppers, growing our customer base in Canada, and gaining market share by strengthening our brand pillars of "Product Findability," "Smart Value," and "Easy Delivery and Support." 27 Executive Commentary This executive commentary is intended to provide investors with a view of our business through the eyes of our management.
Key drivers fueling our growth strategy include expanding our home assortment, including products and services, enhancing the findability of our products for customers, boosting mobile app adoption to drive higher customer retention and brand loyalty, optimizing marketing efforts to elevate consumer's consideration of our brands for shopping, expanding our customer base in Canada, and growing market share by fortifying our brand pillars of "Selection," "Findability," "Value," and "Support." For a comprehensive overview of our business, refer to Item 1—"Business—Our Business." We acquired the Bed Bath & Beyond brand and certain related intellectual property in July 2023.
International net revenues were less than 1% of total net revenues for 2022 and 2021. Estimate of unearned product revenue on undelivered product Our revenue related to merchandise sales is recognized upon delivery to our customers.
Estimate of unearned product revenue on undelivered product Our revenue related to merchandise sales is recognized upon delivery to our customers. As we ship high volumes of packages through multiple carriers, it is not practical for us to track the actual delivery date of each shipment.
Removed
In addition, our future results may be significantly different from our historical results. Financial Reporting Presentation Relating to Discontinued Operations Unless otherwise specified, disclosures throughout Management's Discussion and Analysis of Financial Condition and Results of Operations, including disclosures under “Liquidity and Capital Resources,” reflect continuing operations only.
Added
In addition, our future results may be significantly different from our historical results.
Removed
See Note 4—Discontinued Operations in the "Notes to Consolidated Financial Statements" included in Item 8 of Part II, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for further information.
Added
Overview Beyond is dedicated to providing, through our Bed Bath & Beyond brand and other brands, an extensive array of furniture and home furnishings and related services, tailored especially for our target customers—consumers who seek comprehensive support throughout their shopping journey, aspiring to discover quality, stylish products at competitive prices that align with their budget requirements.
Removed
Overview Overstock provides furniture and home furnishings to assist consumers in "Making Dream Homes Come True," particularly for our target customers—consumers who seek smart value on quality, stylish furniture and home furnishings at competitive prices, and who want an easy shopping experience.
Added
Our range of products includes furniture, bedding and bath essentials, patio and outdoor gear, area rugs, tabletop and cookware, décor, storage and organization solutions, small appliances, home improvement items, and more. In addition, we seek to provide customers with relevant home financial products and services.
Removed
Our products include furniture, décor, area rugs, bedding and bath, home improvement, outdoor, and kitchen and dining items, among others. Our supply chain allows us to ship directly to our customers from our suppliers or from our warehouses. See Item 1—"Business—Our Business" for an additional overview on our business.
Added
Leveraging an asset-light supply chain, we offer direct shipping to customers from both our suppliers and warehouses.
Removed
The decrease was partially offset by increased licensing costs. General and administrative expenses decreased $7.7 million in 2022 compared to 2021, primarily driven by reduced legal, third-party vendor, and facilities-related expenses, partially offset by increased staff-related expenses.
Added
In November 2023, we changed our corporate name from Overstock.com, Inc. to Beyond, Inc., and transferred the principal listing of our common stock from the Nasdaq Global Market to the New York Stock Exchange. 28 Executive Commentary This executive commentary is intended to provide investors with a view of our business through the eyes of our management.
Removed
Additional commentary related to macroeconomic trends We continue to monitor recent macroeconomic trends, including the impact caused by global developments such as the current conflict between Russia and Ukraine (including the related heightened geopolitical tensions and economic actions in response thereto by various countries), and their impact on our supply chain, customers, and employees.
Added
General and administrative expenses increased $10.7 million in 2023 compared to 2022, primarily due to increased legal fees, Bed Bath & Beyond brand integration expenses, and severance. Additional commentary related to macroeconomic trends We continue to monitor recent macroeconomic trends, including, but not limited to, geopolitical events, fluctuating interest rates, and inflation.
Removed
While we have no operations in or direct exposure to Russia or Ukraine, we believe the conflict between Russia and Ukraine combined with higher consumer price inflation has resulted in reduced consumer confidence and consumer spending which negatively impacted our sales during the year.
Added
These events have and may continue to negatively impact consumer confidence and consumer spending which have and may continue to adversely affect our business and our results of operations.
Removed
In addition, we have experienced increased employee turnover, inflation in product costs, higher wages, higher share-based compensation expenses, and higher energy and fuel costs, each at a higher rate than what we have experienced in recent years.
Added
The decrease in average order value was largely driven by orders mixing into categories with lower average unit retail price.
Removed
However, we continue to work with our partners to limit price increases in response to higher costs and have been able to improve gross margins year over year.
Added
Non-operating income (expense) Interest income (expense), net The $9.0 million increase in interest income (expense), net for the year ended December 31, 2023, as compared to the same period in 2022, was primarily due to increased interest income on our cash equivalents.
Removed
Cash flows from discontinued operations are disclosed on our statement of cash flows as separate line items in the operating, investing, and financing activities sections. We anticipate that the absence of cash flows from discontinued operations will positively affect future liquidity and capital resources.
Added
In addition, relative changes in expenses or losses for which tax benefits are limited or not recognized, fluctuations in our stock price, changes in laws, regulations, and administrative practices can impact our rate.
Removed
Cash flow information is as follows (in thousands): Year ended December 31, 2022 2021 Cash provided by (used in): Operating activities $ (12,535) $ 98,047 Investing activities (33,034) (56,433) Financing activities (86,340) (12,683) At December 31, 2022, we had $150.0 million available under our "at the market" sales program which permits us to conduct "at the market" public offerings of our common stock under a sales agreement, dated June 26, 2020, with JonesTrading Institutional Services LLC ("JonesTrading") and D.A.
Added
Our effective tax rate differs from the statutory federal income tax rate of 21% primarily due to the impacts of changes in the valuation allowance against our deferred tax assets, net of deferred tax liabilities. The OECD has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024.
Removed
We review and update our estimates on a quarterly basis based on our actual transit time experience.
Added
While the U.S. has not yet adopted the Pillar Two rules, various other governments around the world are enacting such legislation. As currently designed, we expect Pillar Two will ultimately apply to us.
Removed
The decrease was partially offset by increased licensing costs. 33 General and administrative expenses The following table summarizes our general and administrative expenses for the years ended December 31, 2022 and 2021 (in thousands): Year ended December 31, 2022 2021 General and administrative expenses $ 79,701 $ 87,399 Year-over-year percentage change General and administrative expenses (8.8) % General and administrative expenses as a percent of net revenue 4.1 % 3.2 % The $7.7 million decrease in general and administrative expenses for the year ended December 31, 2022, as compared to the same period in 2021, was primarily driven by reduced legal, third-party vendor, and facilities-related expenses, partially offset by increased staff-related expenses.
Added
Considering we do not currently have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, these rules are not expected to materially increase our global tax costs based on how we currently do business. There remains uncertainty as to the final Pillar Two model rules.
Removed
We record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions.
Added
We will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts. As we repatriate foreign earnings for use in the United States, the distributions will generally be exempt from federal and foreign income taxes but may be subject to certain state taxes.
Removed
The impact that macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, or the current conflict between Russia and Ukraine will have on our business in the future make estimates of future income more challenging due to the unpredictable nature of the ultimate development and duration of these conditions.
Removed
Our low effective tax rate is primarily attributable to an increase in our valuation allowance for capital loss deferred tax assets associated with unrealized losses on our equity method securities.
Removed
Our tax expense increased as compared to the same period in 2021 primarily due to the fact we no longer maintain a valuation allowance on most of our federal and state deferred tax assets. We have indefinitely reinvested foreign earnings of $7.1 million at December 31, 2022.
Removed
We would need to accrue and pay various taxes on this amount if repatriated. We do not intend to repatriate these earnings.
Removed
Our critical accounting policies are as follows: • valuation of certain equity method securities carried at fair value. 34 Valuation of certain equity method securities carried at fair value We measured certain equity method securities at fair value at the reporting date.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed5 unchanged
Biggest changeWe have elected to account for our direct minority interests in tZERO and SpeedRoute using the fair value option. Our assessment includes a review of recent operating results and trends, recent sales/acquisitions of the equity securities, other publicly available data, and the use of third-party valuation experts, as needed.
Biggest changeAt December 31, 2023, $41.0 million of our equity securities and $10.5 million of our debt securities are of private companies, recorded at fair value using Level 3 inputs. Our fair value assessment of private companies includes a review of recent operating results and trends, recent sales/acquisitions of the equity securities, and other publicly available data.
Our inability or failure to do so could harm our business, financial condition and results of operations. Investment Risk The fair values of our equity securities may be subject to fluctuations due to volatility of the stock market in general, investment-specific circumstances, and changes in general economic conditions.
Our inability or failure to do so could harm our business, financial condition and results of operations. Investment Risk The fair values of our equity and debt securities may be subject to fluctuations due to volatility of the stock market in general, investment-specific circumstances, and changes in general economic conditions.
For our equity interest in Medici Ventures, L.P., we record our proportionate share of the entity's reported net income or loss, which reflects the fair value changes of the underlying investments of the entity and any other income or losses of the entity.
For our equity interest in Medici Ventures, L.P., we record our proportionate share of the entity's reported net income or loss, which reflects the fair value changes of the underlying investments of the entity and any other income or losses of the entity. 37
Valuations of private companies are inherently more complex due to the lack of readily available market data. As such, we believe that market sensitivities are not practicable. 36
Valuations of private companies are inherently more complex due to the lack of readily available market data. As such, we believe that market sensitivities are not practicable.
At December 31, 2022, our recorded value in equity securities in public and private companies was $296.3 million, compared to $342.7 million at December 31, 2021, of which $36,000 relates to publicly traded companies, compared to $174,000 at December 31, 2021, recorded at fair value, which are subject to market price volatility.
At December 31, 2023, our recorded value in equity securities in public and private companies was $155.9 million, compared to $296.3 million at December 31, 2022, of which none relates to publicly traded companies at December 31, 2023, compared to $36,000 at December 31, 2022, recorded at fair value, which are subject to market price volatility.

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