For example, Contribution margin does not reflect: general and administrative expense necessary to operate our business;research and development expenses necessary for the development, operation and support of our software platform;the fixed costs portion of our sales and distribution expenses including stock-based compensation expense; orchanges in fair value warrant liabilities Contribution Margin The following table provides a reconciliation of Contribution margin to gross profit and Contribution margin as a percentage of net revenue to gross profit as a percentage of net revenue, which are the most directly comparable financial measures presented in accordance with GAAP. Three Months Ended March 31, 2024 2025 (in thousands, except percentages)Gross Profit$13,168 $9,424 Less: E-commerce platform commissions, online advertising, selling and logistics expenses (10,320) (7,373)Contribution margin$2,848 $2,051 Gross Profit as a percentage of net revenue 65.1% 61.4%Contribution margin as a percentage of net revenue 14.1% 13.4% Adjusted EBITDA The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net loss, which is the most directly comparable financial measure presented in accordance with GAAP: Three Months Ended March 31, 2024 2025 (in thousands, except percentages)Net loss$(5,162) $(3,896)Add: Provision for income taxes 71 20 Interest expense, net 323 175 Depreciation and amortization 428 408 EBITDA (4,340) (3,293)Other expense, net 7 60 Change in fair market value of warrant liabilities (517) (55)Restructuring expense 558 — Stock-based compensation expense 1,667 783 Adjusted EBITDA$(2,625) $(2,505)Net loss as a percentage of net revenue (25.5)% (25.4)%Adjusted EBITDA as a percentage of net revenue (13.0)% (16.3)% Each of our products typically goes through the Launch phase and depending on its level of success is moved to one of the other phases as further described below: Launch phase: During this phase, we leverage our technology to target opportunities identified using AIMEE (Artificial Intelligence Marketplace e-Commerce Engine) and other sources.
Consolidated Balance Sheets(in thousands, except share and per share data) December 31,2024 March 31,2025ASSETS Current assets: Cash$17,998 $14,337 Accounts receivable, net 3,782 3,391 Inventory 13,749 18,144 Prepaid and other current assets 3,190 3,512 Total current assets 38,719 39,384 Property and equipment, net 685 689 Intangibles, net 9,757 9,366 Other non-current assets 381 379 Total assets$49,542 $49,818 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Credit facility$6,948 $7,511 Accounts payable 3,080 6,164 Seller notes 466 471 Accrued and other current liabilities 8,804 8,404 Total current liabilities 19,298 22,550 Other liabilities 227 229 Total liabilities 19,525 22,779 Commitments and contingencies Stockholders' equity: Common stock, $0.0001 par value, 500,000,000 shares authorized and 8,750,741 and 8,748,741 shares outstanding at December 31, 2024 and March 31, 2025, respectively 9 9 Additional paid-in capital 742,591 743,374 Accumulated deficit (711,677) (715,573)Accumulated other comprehensive loss (906) (771)Total stockholders’ equity 30,017 27,039 Total liabilities and stockholders' equity$49,542 $49,818 ATERIAN, INC. Consolidated Statements of Operations (in thousands, except share and per share data) Three Months Ended March 31, 2024 2025 Net revenue$20,214 $15,360 Cost of goods sold 7,046 5,936 Gross profit 13,168 9,424 Operating expenses: Sales and distribution 13,214 9,661 General and administrative 5,232 3,459 Total operating expenses 18,446 13,120 Operating loss (5,278) (3,696)Interest expense, net 323 175 Change in fair value of warrant liabilities (517) (55)Other expense, net 7 60 Loss before provision for income taxes (5,091) (3,876)Provision for income taxes 71 20 Net loss$(5,162) $(3,896)Net loss per share, basic and diluted$(0.76) $(0.52)Weighted-average number of shares outstanding, basic and diluted 6,789,955 7,452,957 ATERIAN, INC. Consolidated Statement of Cash Flows (in thousands, except share and per share data) Three Months Ended March 31, 2024 2025 OPERATING ACTIVITIES: Net loss$(5,162) $(3,896)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 428 408 Provision for sales returns 64 (72)Amortization of deferred financing cost and debt discounts 83 37 Stock-based compensation 1,667 783 Change in deferred tax expense (5) — Change in inventory provisions (976) 86 Change in fair value of warrant liabilities (517) (55)Allowance for credit losses — (147)Changes in assets and liabilities: Accounts receivable 1,843 538 Inventory 2,846 (4,481)Prepaid and other current assets 249 33 Accounts payable, accrued and other liabilities (526) 2,898 Cash used in operating activities (6) (3,868)INVESTING ACTIVITIES: Purchase of fixed assets (36) — Purchase of minority equity investment (200) — Cash used in investing activities (236) — FINANCING ACTIVITIES: Repayments on seller notes (153) — Borrowings from MidCap credit facilities 11,453 10,296 Repayments for MidCap credit facilities (13,244) (9,777)Insurance obligation payments (254) (235)Insurance financing proceeds — 156 Cash provided by (used in) financing activities (2,198) 440 Foreign currency effect on cash and restricted cash (49) 123 Net change in cash and restricted cash for the year (2,489) (3,305)Cash and restricted cash at beginning of year 22,195 19,143 Cash and restricted cash at end of year$19,706 $15,838 RECONCILIATION OF CASH AND RESTRICTED CASH: Cash 17,545 14,337 Restricted Cash—Prepaid and other current assets 2,032 1,372 Restricted cash—Other non-current assets 129 129 TOTAL CASH AND RESTRICTED CASH$19,706 $15,838 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest$402 $200 Cash paid for taxes$3 $5 NON-CASH INVESTING AND FINANCING ACTIVITIES: Non-cash consideration paid to contractors$620 $— Non-cash minority equity investment$50 $— Non-GAAP Financial Measures We believe that our financial statements and the other financial data included in this press release have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the U.S.("GAAP”).
Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue should not be considered in isolation or as alternatives to net loss, loss from operations or any other measure of financial performance calculated and prescribed in accordance with GAAP.
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