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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended
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Sep. 30, 2025
Accounting Policies [Abstract] |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with the audited annual consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to the Company's significant accounting policies disclosed in Note 2—Accounting Policies and Supplemental Disclosures, included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, except as disclosed below. The accompanying unaudited consolidated financial statements include the Company's accounts and the accounts of the Company's wholly-owned subsidiaries and other subsidiaries for which the Company exercises control, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the Company's opinion, necessary for a fair presentation of results for the interim periods presented. All intercompany account balances and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for any future period or the full fiscal year, due to seasonality and other factors. Revision of previously issued consolidated financial statements The Company identified errors in the consolidated statements of operations related to the classification of gains on the sale of intangible assets and write-downs of assets held for sale erroneously being included in Other income (expense), net instead of in operating expenses. The Company assessed the materiality of changes to prior period consolidated financial statements to address these errors in accordance with SEC Staff Accounting Bulletin No. 99, "Materiality", (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that these error corrections in its consolidated statements of operations were not material to any previously presented consolidated financial statements. The corrections had no material impact on the consolidated balance sheets, consolidated statements of comprehensive loss, consolidated statements of changes in stockholders' equity, or consolidated statements of cash flows, for any previously presented interim or annual consolidated financial statements. The financial reporting periods affected by these errors include the Company's previously reported audited consolidated financial statements for the fiscal years ended December 31, 2024 and 2023, and the Company's previously reported interim unaudited consolidated financial statements for each of the periods ended June 30, 2024, September 30, 2024, March 31, 2025, and June 30, 2025. To correct the immaterial errors, the Company elected to revise its previously reported interim unaudited consolidated financial statements, starting with the period ended September 30, 2024, in this Quarterly Report on Form 10-Q. The Company expects to present the corrected annual amounts in its Annual Report on Form 10-K for the year ending December 31, 2025. The following table presents the revisions to the consolidated statements of operations (in thousands):
| Three months ended September 30, 2024 |  | Nine months ended September 30, 2024
| As previously reported |  | Adjustment |  | As revised |  | As previously reported |  | Adjustment |  | As revised
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Other operating expense (income), net | $ | — |  |  | $ | 1,648 |  |  | $ | 1,648 |  |  | $ | — |  |  | $ | (8,627) |  |  | $ | (8,627) |
Total operating expenses | 109,528 |  |  | 1,648 |  |  | 111,176 |  |  | 368,581 |  |  | (8,627) |  |  | 359,954 |
Operating loss | (43,553) |  |  | (1,648) |  |  | (45,201) |  |  | (148,079) |  |  | 8,627 |  |  | (139,452) |
Other income (expense), net | (18,842) |  |  | 1,648 |  |  | (17,194) |  |  | (35,402) |  |  | (8,627) |  |  | (44,029) |
Loss before income taxes | (60,841) |  |  | — |  |  | (60,841) |  |  | (176,901) |  |  | — |  |  | (176,901) |
Consolidated net loss | (61,030) |  |  | — |  |  | (61,030) |  |  | (177,536) |  |  | — |  |  | (177,536) |
| Three months ended March 31, 2025 |  |
| As previously reported |  | Adjustment |  | As revised |  |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Other operating expense (income), net | $ | — |  |  | $ | (336) |  |  | $ | (336) |  |  |  |  |  |  |
Total operating expenses | 81,679 |  |  | (336) |  |  | 81,343 |  |  |  |  |  |  |
Operating loss | (23,547) |  |  | 336 |  |  | (23,211) |  |  |  |  |  |  |
Other income (expense), net | (16,933) |  |  | (336) |  |  | (17,269) |  |  |  |  |  |  |
Loss before income taxes | (39,718) |  |  | — |  |  | (39,718) |  |  |  |  |  |  |
Consolidated net loss | (39,912) |  |  | — |  |  | (39,912) |  |  |  |  |  |  |
| Three months ended June 30, 2025 |  | Six months ended June 30, 2025
| As previously reported |  | Adjustment |  | As revised |  | As previously reported |  | Adjustment |  | As revised
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Other operating expense (income), net | $ | — |  |  | $ | (5,454) |  |  | $ | (5,454) |  |  | $ | — |  |  | $ | (5,790) |  |  | $ | (5,790) |
Total operating expenses | 84,849 |  |  | (5,454) |  |  | 79,395 |  |  | 166,528 |  |  | (5,790) |  |  | 160,738 |
Operating loss | (17,880) |  |  | 5,454 |  |  | (12,426) |  |  | (41,427) |  |  | 5,790 |  |  | (35,637) |
Other income (expense), net | (2,035) |  |  | (5,454) |  |  | (7,489) |  |  | (18,968) |  |  | (5,790) |  |  | (24,758) |
Loss before income taxes | (19,026) |  |  | — |  |  | (19,026) |  |  | (58,744) |  |  | — |  |  | (58,744) |
Consolidated net loss | (19,313) |  |  | — |  |  | (19,313) |  |  | (59,225) |  |  | — |  |  | (59,225) |
Use of estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the Company's consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, loyalty program reward point and gift card breakage, sales returns, inventory valuation, asset useful lives, equity and debt securities valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities, and contingencies. Although these estimates are based on the Company's best knowledge of current events and actions that the Company may undertake in the future, the accounting of these estimates may change from period to period. To the extent there are differences between these estimates and actual results, the Company's consolidated financial statements may be materially affected. Noncontrolling interests In April 2025, the Company's controlled subsidiary, Commercial Strategies, Inc. ("Commercial Strategies"), launched a crowdfunding offering (the "token offering") of the right to acquire a tokenized digital security linked to Overstock intellectual property and eligible for future dividends, if any, from the licensing revenue that Commercial Strategies earns from the Overstock intellectual property. The token offering closed on May 16, 2025, and Commercial Strategies issued the tokenized digital security in the form of Series A Preferred Stock. The holders of the preferred shares will be entitled to receive, out of funds and assets legally available for such purpose, an annual dividend that is derived from the royalty fee paid by Bed Bath & Beyond, Inc. to Commercial Strategies for licensing of the Overstock intellectual property. The holders of the preferred stock have no voting rights. At September 30, 2025, cumulative proceeds from the token offering totaled $467,000, have been classified as a component of noncontrolling interest within the consolidated financial statements. As of September 30, 2025, Commercial Strategies has incurred $305,000 of offering costs associated with the token offering that are classified as a reduction in proceeds within noncontrolling interest within the consolidated financial statements. In May 2025, the Company's controlled subsidiary, Zion Peaks, Inc. ("Zion Peaks"), launched a crowdfunding offering (the "token offering") of the right to acquire a tokenized digital security linked to buybuy BABY intellectual property and eligible for future dividends, if any, from the licensing revenue that Zion Peaks earns from the buybuy BABY intellectual property. The token offering closed on August 11, 2025, and Zion Peaks issued the tokenized digital security in the form of Series A Preferred Stock. The holders of the preferred shares will be entitled to receive, out of funds and assets legally available for such purpose, an annual dividend that is derived from the royalty fee paid by Bed Bath & Beyond, Inc. to Zion Peaks for licensing of the buybuy BABY intellectual property. The holders of the preferred stock have no voting rights. At September 30, 2025, cumulative proceeds from the token offering totaled $396,000, have been classified as a component of noncontrolling interest within the consolidated financial statements. As of September 30, 2025, Zion Peaks has incurred $217,000 of offering costs associated with the token offering that are classified as a reduction in proceeds within noncontrolling interest within the consolidated financial statements. Debt securities carried at fair value On May 7, 2025, the Company entered into an Amended and Restated Term Loan Credit Agreement (the "Amended and Restated Credit Agreement"), which amended and restated the secured Term Loan Credit Agreement ("Existing Credit Agreement") entered on October 21, 2024 and pursuant to which the Company provided The Brand House Collective, Inc. (formerly known as Kirkland's Inc.) ("The Brand House Collective") with an additional term loan in an approximate aggregate original principal amount of $5.2 million (the "Additional Term Loan") and obligations arising under the Existing Credit Agreement in the aggregate amount of $8.5 million were rolled into the Amended and Restated Credit Agreement as obligations thereunder. On September 15, 2025, the Company entered into Amendment No. 1 to the Amended and Restated Credit Agreement (such amendment, the "Credit Agreement Amendment" and the Existing Credit Agreement as amended by the Credit Agreement Amendment, the "Amended Credit Agreement". Pursuant to the terms of the Amended Credit Agreement, new delayed-draw term loan commitments in an aggregate original principal amount of $20.0 million (the "Delayed Draw Term Loan Commitments") were established. The Amended Credit Agreement provides the Company the right to convert the outstanding loans (including loans extended in satisfaction of the Delayed Draw Term Loan Commitments) owing under the Amended and Restated Credit Agreement into shares of The Brand House Collective's common stock at a price equal to the closing price on the Nasdaq Stock Market LLC ("Nasdaq") on the day prior to the date on which a conversion election is made, up to a number of shares equal to 19.90% of the outstanding shares of The Brand House Collective's common stock on the date the Amended Credit Agreement was entered into, and up to a greater number of shares subject to Nasdaq shareholder approval rules. Bed Bath & Beyond is restricted from holding greater than 75% of outstanding The Brand House Collective's issued shares for so long as any obligations remain outstanding under The Brand House Collective's credit agreement with its senior lender, Bank of America, N.A. As a result of the Amended Credit Agreement, the Company remeasured the $8.5 million term loan and recorded an unrealized loss of $406,000 during the nine months ended September 30, 2025, which is recorded in Other income (expense), net in the consolidated statements of operations. Recently issued accounting standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to disclose disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. For public entities, ASU 2023-09 is required to be adopted for annual periods beginning after December 15, 2024, with early adoption permitted. This ASU will result in the Company including the additional required disclosures when adopted and does not otherwise have a material impact on the Company's consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires public entities to disclose disaggregated information about certain income statement line items in the notes to the financial statements. For public entities, ASU 2024-03 is required to be adopted for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. This ASU will result in the Company including the additional required disclosures when adopted and does not otherwise have a material impact on the Company's consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software, which clarified and modernizes the accounting for costs related to internal-use software. The amendments in ASU 2025-06 remove all references to project stages throughout Subtopic 350-40 and clarify the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. This ASU will result in the Company adopting the new threshold to apply to begin capitalizing costs and does not otherwise have a material impact on the Company's consolidated financial statements.

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