UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _____________ TO _____________

Commission File Number: 001-37523

PURPLE INNOVATION, INC.

(Exact name of registrant as specified in its charter)

Delaware		47-4078206
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4100 NORTH CHAPEL RIDGE ROAD, SUITE 200

LEHI, UTAH 84043

(Address of principal executive offices, including zip code)

(801) 756-2600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share		PRPL		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of November 5, 2021, 66,479,872 shares of the registrant’s Class A common stock, $0.0001 par value per share, and 448,279 shares of the registrant’s Class B common stock, $0.0001 par value per share, were outstanding.

PURPLE INNOVATION, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

			Page
Part I.	Financial Information		1
	Item 1.	Financial Statements (Unaudited):	1
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Operations	2
		Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	3
		Condensed Consolidated Statements of Cash Flows	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44
	Item 4.	Controls and Procedures	45

Part II.	Other Information		46
	Item 1.	Legal Proceedings	46
	Item 1A.	Risk Factors	46
	Item 6.	Exhibits	55
	Signatures		56

In this Quarterly Report on Form 10-Q, references to “dollars” and “$” are to United States (“U.S.”) dollars.

We have several trademarks registered with the U.S. Patent and Trademark Office, including EquaPressure^{^®}, WonderGel^® and EquaGel^® (for cushions), and Purple^®, No Pressure^®, Hyper-Elastic Polymer^®, Somnigel^®, and Gel Matrix^® (for plasticized elastomeric gel and certain types of products including mattresses, seat cushions, bed linen, mattress foundation and others). Additional registered trademarks include Purple Grid^®, The Purple Mattress^®, Purple Hybrid^®, and Purple Hybrid Premier^®. Applications are pending for registration of additional trademarks and some of these listed trademarks for additional classes of goods both in the U.S. and internationally. Our Purple, No Pressure and Hyper-Elastic Polymer trademarks are also registered and have applications pending for various classes of goods in numerous foreign jurisdictions, some of which include Australia, Canada, China, Europe, United Kingdom, Japan and Korea. Certain international trademark applications previously resided with EdiZONE, LLC, which is an entity owned by our founders, and were licensed to Purple LLC and we have taken the necessary steps to have those trademarks assigned to Purple LLC upon registration.

We also have a number of common law trademarks, including Harmony^™, Purple Harmony Pillow^{^™}, Harmony Pillow^™, Purple +^™, Purple Plus^™, Find Comfort^™, Dreams On Dreams^™, Reinventing Comfort^™, Gelflex^™, Ascent^™, Purple Ascent^™, Comfort Reinvented^™, Softstretch^™, Purple Powerbase^™, Purple Powerbase Premier^™, Purple Powerbase Plus^™, Purple Glove^™, Eidertech^™, Mattress Max^™, WonderGel Original^™, WonderGel Extreme^™, DoubleGel^™, DoubleGel Plus^™, DoubleGel Ultra^™, Roll n’ Go^™, Fold N’ Go^™, Purple Bed^™, Purple Top^™, Purple Pillow^™, Portable Purple^™, Everywhere Purple^™, Simply Purple^™, Lite Purple^™, Royal Purple^™, Double Purple^™, Deep Purple^™, Ultimate Purple^™, Purple Back^™, EquaGel Straight Comfort^™, EquaGel General^™, EquaGel Protector^™, and EquaGel Adjustable^™.

Solely for convenience, we refer to our trademarks in this Quarterly Report without the ^™ or ^® symbol, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our trademarks.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PURPLE INNOVATION, INC.

Condensed Consolidated Balance Sheets

(unaudited – in thousands, except for par value)

	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	83,616		$	122,955
Accounts receivable, net		27,570			29,111
Inventories, net		84,045			65,726
Prepaid inventory		1,316			826
Other current assets		11,739			10,453
Total current assets		208,286			229,071
Property and equipment, net		101,049			61,486
Operating lease right-of-use assets		61,798			41,408
Intangible assets, net		11,466			9,945
Deferred income taxes		213,951			211,244
Other long-term assets		1,390			1,578
Total assets	$	597,940		$	554,732

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	70,407		$	69,594
Accrued sales returns		6,903			8,428
Accrued compensation		13,392			14,209
Customer prepayments		9,283			6,253
Accrued sales tax		4,512			6,015
Accrued rebates and allowances		8,071			10,891
Operating lease obligations – current portion		5,776			3,235
Other current liabilities		15,031			13,583
Total current liabilities		133,375			132,208
Debt, net of current portion		39,899			41,410
Operating lease obligations, net of current portion		75,340			48,936
Warrant liabilities		9,018			92,708
Tax receivable agreement liability, net of current portion		165,632			165,426
Other long-term liabilities, net of current portion		9,826			6,503
Total liabilities		433,090			487,191

Commitments and contingencies (Note 11)

Stockholders’ equity:
Class A common stock; $0.0001 par value, 210,000 shares authorized; 66,449 issued and outstanding at September 30, 2021 and 63,914 issued and outstanding at December 31, 2020		7			6
Class B common stock; $0.0001 par value, 90,000 shares authorized; 448 issued and outstanding at September 30, 2021 and 536 issued and outstanding at December 31, 2020		—			—
Additional paid-in capital		404,214			333,047
Accumulated deficit		(240,283	)		(265,856	)
Total stockholders’ equity		163,938			67,197
Noncontrolling interest		912			344
Total stockholders’ equity		164,850			67,541
Total liabilities and stockholders’ equity	$	597,940		$	554,732

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Operations

(unaudited – in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues, net	$	170,781		$	187,111		$	539,796		$	474,582
Cost of revenues		109,701			98,857			309,505			251,515
Gross profit		61,080			88,254			230,291			223,067
Operating expenses:
Marketing and sales		48,841			51,206			163,053			127,313
General and administrative		17,037			11,087			54,024			27,312
Research and development		1,784			1,687			5,430			4,712
Total operating expenses		67,662			63,980			222,507			159,337
Operating income (loss)		(6,582	)		24,274			7,784			63,730
Other income (expense):
Interest income (expense), net		10			(1,232	)		(1,129	)		(4,045	)
Other income (expense), net		12			3			(30	)		109
Change in fair value – warrant liabilities		5,362			(103,962	)		19,369			(212,593	)
Loss on extinguishment of debt		—			(5,782	)		—			(5,782	)
Tax receivable agreement income (expense)		846			(567	)		639			(33,512	)
Total other income (expense), net		6,230			(111,540	)		18,849			(255,823	)
Net income (loss) before income taxes		(352	)		(87,266	)		26,633			(192,093	)
Income tax benefit (expense)		2,479			106			(1,005	)		35,818
Net income (loss)		2,127			(87,160	)		25,628			(156,275	)
Net income (loss) attributable to noncontrolling interest		(44	)		(147	)		55			7,178
Net income (loss) attributable to Purple Innovation, Inc.	$	2,171		$	(87,013	)	$	25,573		$	(163,453	)

Net income (loss) per share:
Basic	$	0.03		$	(1.97	)	$	0.39		$	(5.09	)
Diluted	$	(0.05	)	$	(1.97	)	$	0.09		$	(5.09	)

Weighted average common shares outstanding:
Basic		66,335			44,266			65,741			32,117
Diluted		67,287			44,266			68,319			32,117

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(unaudited – in thousands)

	Class A				Class B					Additional			Accumulated			Total
	Common Stock				Common Stock					Paid-in			Equity			Stockholders’			Noncontrolling			Total
	Shares		Par Value		Shares			Par Value		Capital			(Deficit)			Equity			Interest			Equity

Balance - December 31, 2020		63,914	$	6		536		$	—	$	333,047		$	(265,856	)	$	67,197		$	344		$	67,541
Net income		—		—		—			—		—			20,824			20,824			115			20,939
Stock-based compensation		—		—		—			—		479			—			479			—			479
Exchange of stock		88		—		(88	)		—		—			—			—			—			—
Exercise of warrants		2,291		1		—			—		64,261			—			64,262			—			64,262
Exercise of stock options		10		—		—			—		83			—			83			—			83
Tax Receivable Agreement liability		—		—		—			—		(777	)		—			(777	)		—			(777	)
Deferred income taxes		—		—		—			—		971			—			971			—			971
Accrued distributions		—		—		—			—		(99	)		—			(99	)		—			(99	)
InnoHold indemnification payment		—		—		—			—		4,142			—			4,142			—			4,142
Impact of transactions affecting NCI		—		—		—			—		(265	)		—			(265	)		265			—
Balance – March 31, 2021		66,303	$	7		448		$	—	$	401,842		$	(245,032	)	$	156,817		$	724		$	157,541
Net income (loss)		—		—		—			—		—			2,578			2,578			(16	)		2,562
Stock-based compensation		—		—		—			—		1,113			—			1,113			—			1,113
Exercise of warrants		1		—		—			—		26			—			26			—			26
Exercise of stock options		45		—		—			—		369			—			369			—			369
Tax Receivable Agreement liability		—		—		—			—		(3	)		—			(3	)		—			(3	)
Deferred income taxes		—		—		—			—		3			—			3			—			3
Accrued distributions		—		—		—			—		(87	)		—			(87	)		—			(87	)
Issuance of common stock		22		—		—			—		—			—			—			—			—
Impact of transactions affecting NCI		—		—		—			—		(192	)		—			(192	)		192			—
Balance – June 30, 2021		66,371	$	7		448		$	—	$	403,071		$	(242,454	)	$	160,624		$	900		$	161,524
Net income (loss)		—		—		—			—		—			2,171			2,171			(44	)		2,127
Stock-based compensation		—		—		—			—		765			—			765			—			765
Exercise of warrants		6		—		—			—		149			—			149			—			149
Exercise of stock options		72		—		—			—		590			—			590			—			590
Tax Receivable Agreement liability		—		—		—			—		4			—			4			—			4
Deferred income taxes		—		—		—			—		(5	)		—			(5	)		—			(5	)
Accrued distributions		—		—		—			—		(304	)		—			(304	)		—			(304	)
Impact of transactions affecting NCI		—		—		—			—		(56	)		—			(56	)		56			—
Balance – September 30, 2021		66,449	$	7		448		$	—	$	404,214		$	(240,283	)	$	163,938		$	912		$	164,850

	Class A						Class B						Additional			Accumulated			Total Stockholders’						Total
	Common Stock						Common Stock						Paid-in			Equity			Equity			Noncontrolling			Equity
	Shares			Par Value			Shares			Par Value			Capital			(Deficit)			(Deficit)			Interest			(Deficit)

Balance – December 31, 2019		22,494		$	2			31,394		$	3		$	2,822		$	(28,989	)	$	(26,162	)	$	(2,378	)	$	(28,540	)
Net income		—			—			—			—			—			16,835			16,835			11,166			28,001
Stock-based compensation		—			—			—			—			250			—			250			—			250
Exchange of stock		1,124			—			(1,124	)		—			—			—			—			—			—
Exercise of warrants		1			—			—			—			17			—			17			—			17
Tax Receivable Agreement liability		—			—			—			—			(221	)		—			(221	)		—			(221	)
Accrued distributions		—			—			—			—			(196	)		—			(196	)		—			(196	)
Issuance of common stock		3			—			—			—			—			—			—			—			—
Impact of transactions affecting NCI		—			—			—			—			120			—			120			(120	)		—
Balance – March 31, 2020		23,622		$	2			30,270		$	3		$	2,792		$	(12,154	)	$	(9,357	)	$	8,668		$	(689	)
Net loss		—			—			—			—			—			(93,275	)		(93,275	)		(3,841	)		(97,116	)
Stock-based compensation		—			—			—			—			962			—			962			—			962
Exchange of stock		12,760			1			(12,760	)		(1	)		—			—			—			—			—
Exercise of warrants		1			—			—			—			19			—			19			—			19
Exercise of stock options		5			—			—			—			(61	)		—			(61	)		—			(61	)
Tax Receivable Agreement liability		—			—			—			—			(45,045	)		—			(45,045	)		—			(45,045	)
Deferred income taxes		—			—			—			—			56,636			—			56,636			—			56,636
Accrued distributions		—			—			—			—			(4,327	)		—			(4,327	)		—			(4,327	)
Issuance of common stock		80			1			—			—			—			—			1			—			1
Impact of transactions affecting NCI		—			—			—			—			6,453			—			6,453			(6,453	)		—
Balance – June 30, 2020		36,468		$	4			17,510		$	2		$	17,429		$	(105,429	)	$	(87,994	)	$	(1,626	)	$	(89,620	)
Net income (loss)		—			—			—			—			—			(87,013	)		(87,013	)		(147	)		(87,160	)
Stock-based compensation		—			—			—			—			347			—			347			—			347
Exchange of stock		16,905			2			(16,905	)		(2	)		—			—			—			—			—
Exercise of warrants		266			—			—			—			5,240			—			5,240			—			5,240
Exercise of stock options		184			—			—			—			1,394			—			1,394			—			1,394
Tax Receivable Agreement liability		—			—			—			—			(89,677	)		—			(89,677	)		—			(89,677	)
Deferred income taxes		—			—			—			—			112,670			—			112,670			—			112,670
Accrued distributions		—			—			—			—			(176	)		—			(176	)		—			(176	)
Forfeiture of unvested common stock		(36	)		(1	)		—			—			1			—			—			—			—
Impact of transactions affecting NCI		—			—			—			—			(1,817	)		—			(1,817	)		1,817			—
Balance – September 30, 2020		53,787		$	5			605		$	—		$	45,411		$	(192,442	)	$	(147,026	)	$	44		$	(146,982	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited – in thousands)

	Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	25,628		$	(156,275	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		6,355			6,366
Non-cash interest		388			2,973
Paid-in-kind interest		—			(6,616	)
Loss on extinguishment of debt		—			5,782
Change in fair value – warrant liabilities		(19,369	)		212,593
Tax receivable agreement (income) expense		(639	)		33,512
Stock-based compensation		2,357			1,559
Non-cash lease expense		3,361			2,210
Deferred income taxes		(1,737	)		(35,818	)
Changes in operating assets and liabilities:
Accounts receivable		1,541			6,798
Inventories		(18,319	)		(3,147	)
Prepaid inventory and other assets		2,169			(5,740	)
Accounts payable		(2,199	)		9,678
Accrued sales returns		(1,525	)		3,014
Accrued compensation		(817	)		4,561
Customer prepayments		3,030			(51	)
Accrued rebates and allowances		(2,820	)		1,921
Operating lease obligations		(1,824	)		(1,274	)
Other accrued liabilities		4,552			5,354
Net cash provided by operating activities		132			87,400

Cash flows from investing activities:
Purchase of property and equipment		(40,146	)		(14,194	)
Investment in intangible assets		(1,352	)		(10,890	)
Net cash used in investing activities		(41,498	)		(25,084	)

Cash flows from financing activities:
Proceeds from term loan		—			45,000
Payments on term loan		(1,688	)		—
Payments on related party loan		—			(37,497	)
Payments for debt issuance costs		—			(2,460	)
Proceeds from InnoHold indemnification payment		4,142			—
Tax receivable agreement payments		(628	)		—
Distributions to members		(957	)		(5,006	)
Proceeds from exercise of warrants		116			706
Proceeds from exercise of stock options		1,042			1,418
Net cash provided by financing activities		2,027			2,161

Net (decrease) increase in cash		(39,339	)		64,477
Cash and cash equivalents, beginning of the year		122,955			33,478
Cash and cash equivalents, end of the period	$	83,616		$	97,955

Supplemental disclosures of cash flow information:
Cash paid during the period for interest, net of amounts capitalized	$	389		$	954
Cash paid during the period for income taxes	$	4,495		$	2,422

Supplemental schedule of non-cash investing and financing activities:
Property and equipment included in accounts payable	$	5,707		$	2,786
Non-cash leasehold improvements	$	3,238		$	615
Accrued distributions	$	304		$	4,523
Tax receivable agreement liability	$	776		$	134,943
Deferred income taxes	$	969		$	169,306
Exercise of liability warrants	$	64,321		$	4,570

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

1. Organization

The Company’s mission is to help people feel and live better through innovative comfort solutions.

Purple Innovation, Inc. collectively with its subsidiary (the “Company” or “Purple Inc.”) is a digitally-native vertical brand founded on comfort product innovation with premium offerings. The Company designs and manufactures a variety of innovative, branded and premium comfort products, including mattresses, pillows, cushions, bases, sheets, and other products. The Company markets and sells its products through its direct-to-consumer (“DTC”) online channels, retail brick-and-mortar wholesale partners, Company showrooms, and third-party online retailers.

The Company was incorporated in Delaware on May 19, 2015 as a special purpose acquisition company under the name of Global Partnership Acquisition Corp (“GPAC”). On February 2, 2018, the Company consummated a transaction structured similar to a reverse recapitalization (the “Business Combination”) pursuant to which the Company acquired a portion of the equity of Purple Innovation, LLC (“Purple LLC”). At the closing of the Business Combination (the “Closing”), the Company became the sole managing member of Purple LLC, and GPAC was renamed Purple Innovation, Inc.

As the sole managing member of Purple LLC, Purple Inc. through its officers and directors is responsible for all operational and administrative decision making and control of the day-to-day business affairs of Purple LLC without the approval of any other member.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The Company consists of Purple Inc. and its consolidated subsidiary, Purple LLC. As of September 30, 2021, Purple Inc. held approximately 99% of the common units of Purple LLC and Purple LLC Class B Unit holders held approximately 1% of the common units in Purple LLC.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the 2020 audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K/A filed May 10, 2021. The unaudited condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which were considered of normal recurring nature) considered necessary to present fairly the Company’s financial results. The results of the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 or for any other interim period or other future year.

On December 31, 2020, the Company ceased to be an emerging growth company (“EGC”) and was no longer exempt from certain reporting requirements that apply to public companies. As an EGC prior to this date, Purple Inc. had elected to use extended transition periods available to private companies for complying with new or revised accounting standards.

Variable Interest Entities

Purple LLC is a variable interest entity (“VIE”). The Company determined that it is the primary beneficiary of Purple LLC as it is the sole managing member and has the power to direct the activities most significant to Purple LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At September 30, 2021, Purple Inc. had approximately a 99% economic interest in Purple LLC and consolidated 100% of Purple LLC’s assets, liabilities and results of operations in the Company’s unaudited condensed consolidated financial statements contained herein. The holders of Purple LLC Class B Units (the “Class B Units”) held approximately 1% of the economic interest in Purple LLC. For further discussion see Note 13 — Stockholders’ Equity.

PURPLE INNOVATION, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on net income (loss), cash flows or stockholders’ equity previously reported.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The Company regularly makes significant estimates and assumptions including, but not limited to, estimates that affect revenue recognition, accounts receivable and allowance for doubtful accounts, valuation of inventories, cost of revenues, sales returns, warranty returns, warrant liability, stock based compensation, the recognition and measurement of loss contingencies, estimates of current and deferred income taxes, deferred income tax valuation allowances and amounts associated with the Company’s tax receivable agreement with InnoHold, LLC (“InnoHold”). Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. Actual results could differ materially from those estimates.

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (“ASC 842”), which required an entity to recognize lease liabilities and assets on the balance sheet and to disclose key information about an entity’s leasing arrangements. Because the Company ceased being an EGC on December 31, 2020, the standard became effective for the Company for its annual reporting period beginning January 1, 2020, and interim reporting periods within the annual period beginning January 1, 2020. The adoption of ASC 842 and all related amendments using the modified retrospective transition approach effective for the Company’s annual reporting period beginning January 1, 2020 resulted in the initial recognition of operating lease right-of-use (“ROU”) assets of $27.9 million and operating lease liabilities of $33.0 million in the Company’s consolidated balance sheet. Pre-existing liabilities for deferred rent and various lease incentives totaling

SEC Form 10-Q filed by Purple Innovation, Inc.