10-Q 1 eb-20220331.htm 10-Q eb-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 March 31, 2022
or
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: 001-38658
_______________________________________________________________________________
EVENTBRITE, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________________________________
Delaware14-1888467
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
535 Mission Street, 8th floor,
San Francisco, CA 94105
(Address of principal executive offices) (Zip Code)

(415) 692-7779
(Registrant's telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A common stock, $0.00001 par valueEBNew York Stock Exchange 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 Data 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-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 April 21, 2022, 79,965,551 shares of Registrant's Class A common stock and 17,719,087 shares of Registrant's Class B common stock were outstanding.


EVENTBRITE, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 2022
TABLE OF CONTENTS

Page
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
PART I. FINANCIAL INFORMATION
Item 1.Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Stockholders' Equity
Condensed Consolidated Statements of Cash Flows
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.Exhibits



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "appears," "shall," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements related to the impacts of the COVID-19 global health pandemic, including its impact on us, our operations, or our future financial or operational results; the duration and extent of, and recovery from the COVID-19 global health pandemic, including the impact of vaccines, the introduction and spread of new variants of the virus, the removal or reimposition of restrictions on in-person events, the market response to the recovery, our expectations regarding the timing of recovery of paid ticket volumes and event creator and event attendees’ behavior in relation to the recovery; statements regarding our convertible senior notes, including the intended use of the net proceeds; statements about our future financial performance, including our revenue, costs of revenue and operating expenses; our anticipated growth and growth strategies and our ability to effectively manage that growth; our ability to achieve and grow profitability; changes in our business model; our advance payout program; the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; our predictions about industry and market trends; our ability to attract and retain creators; our ability to successfully operate internationally; our ability to attract and retain employees; our ability to comply with modified or new laws and regulations applying to our business; and our ability to successfully defend litigation brought against us and the potential effect of any current litigation or audits in certain jurisdictions with regard to indirect tax matters on our business, financial position, results of operations or liquidity.
The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors, including those described in the section titled "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2021 and this Quarterly Report on Form 10-Q. We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events.
All forward-looking statements are based on information and estimates available to the Company at the time of this Quarterly Report on Form 10-Q and are not guarantees of future performance. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.







PART I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements

EVENTBRITE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value amounts and share data)
(Unaudited)
March 31, 2022December 31, 2021
Assets
Current assets
          Cash and cash equivalents$709,853 $634,378 
          Funds receivable24,492 18,197 
          Accounts receivable, net1,752 1,110 
          Creator signing fees, net1,152 1,184 
          Creator advances, net1,284 862 
          Prepaid expenses and other current assets10,816 17,877 
                    Total current assets749,349 673,608 
Restricted cash1,416 1,781 
Creator signing fees, noncurrent1,494 2,225 
Property and equipment, net6,665 7,162 
Operating lease right-of-use assets9,110 10,940 
Goodwill174,388 174,388 
Acquired intangible assets, net28,735 31,116 
Other assets1,744 1,756 
                    Total assets$972,901 $902,976 
Liabilities and Stockholders’ Equity
Current liabilities
          Accounts payable, creators$380,602 $285,222 
          Accounts payable, trade1,173 1,083 
          Chargebacks and refunds reserve20,981 21,395 
          Accrued compensation and benefits7,465 10,910 
          Accrued taxes8,475 11,068 
          Operating lease liabilities4,192 4,149 
          Other accrued liabilities12,916 24,139 
                    Total current liabilities435,804 357,966 
Accrued taxes, noncurrent12,094 12,868 
Operating lease liabilities, noncurrent6,523 8,677 
Long-term debt354,044 353,564 
Other liabilities 1 
                    Total liabilities808,465 733,076 
Commitments and contingencies (Note 15)
Stockholders’ equity
Preferred stock, $0.00001 par value; 100,000,000 shares authorized, no shares issued or outstanding as of March 31, 2022 and December 31, 2021
  
Common stock, $0.00001 par value; 1,100,000,000 shares authorized; 97,680,690 shares issued and outstanding as of March 31, 2022; 97,246,465 shares issued and outstanding as of December 31, 2021
1 1 
Additional paid-in capital916,191 903,470 
Accumulated deficit(751,756)(733,571)
                    Total stockholders’ equity164,436 169,900 
                    Total liabilities and stockholders’ equity$972,901 $902,976 

(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
2


EVENTBRITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
20222021
Net revenue$55,875 $27,818 
Cost of net revenue19,973 13,675 
                    Gross profit35,902 14,143 
Operating expenses
          Product development 18,518 15,319 
          Sales, marketing and support13,148 5,639 
          General and administrative18,817 19,028 
                    Total operating expenses50,483 39,986 
                    Loss from operations(14,581)(25,843)
Interest expense(2,798)(7,610)
Loss on debt extinguishment (49,977)
Other income (expense), net(603)(948)
                    Loss before income taxes(17,982)(84,378)
Income tax provision (benefit)203 513 
Net loss$(18,185)$(84,891)
Net loss per share, basic and diluted$(0.19)$(0.91)
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted97,554 92,879 
(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
3

EVENTBRITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
(Unaudited)

Common Stock-Class ACommon Stock-Class BAdditional Paid-In CapitalAccumulated DeficitTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 202179,524,112 $1 17,722,353 $ $903,470 $(733,571)$169,900 
Issuance of common stock upon exercise of stock options207,361 — — — 1,464 — 1,464 
Issuance of restricted stock awards2,515 — — — — — — 
Issuance of common stock for settlement of RSUs341,723 — — — — — — 
Shares withheld related to net share settlement(117,374)— — — (1,711)— (1,711)
Conversion of common stock from Class B to Class A3,266 — (3,266)— — —  
Stock-based compensation— — — — 12,968 — 12,968 
Net loss— — — — — (18,185)(18,185)
Balance at March 31, 202279,961,603 $1 17,719,087 $ $916,191 $(751,756)$164,436 

Common Stock-Class ACommon Stock-Class BAdditional Paid-In CapitalAccumulated DeficitTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 202069,475,511 $1 23,179,274 $ $913,115 $(597,544)$315,572 
Cumulative effect adjustment upon adoption of ASU 2020-06— — — — (45,452)3,053 (42,399)
Issuance of common stock upon exercise of stock options589,978 — — — 4,680 — 4,680 
Issuance of restricted stock awards4,137 — — — — — — 
Issuance of common stock for settlement of RSUs386,894 — — — — — — 
Shares withheld related to the net share settlement(140,325)— — — (2,611)— (2,611)
Conversion of common stock from Class B to Class A2,702,492 — (2,702,492)— — —  
Purchase of 2026 Capped Calls on 2026 Notes— — — — (18,509)— (18,509)
Stock-based compensation— — — — 11,450 — 11,450 
Net loss— — — — — (84,891)(84,891)
Balance at March 31, 202173,018,687 $1 20,476,782 $ $862,673 $(679,382)$183,292 

(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
4

EVENTBRITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three Months Ended March 31,
20222021
Cash flows from operating activities
Net loss$(18,185)$(84,891)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization3,763 5,288 
Stock-based compensation expense12,836 11,363 
Amortization of debt discount and issuance costs480 2,429 
Loss on debt extinguishment 49,977 
Payment in kind interest 2,178 
Non-cash operating lease expenses839 1,799 
Amortization of creator signing fees412 879 
Adjustments related to creator advances, creator signing fees, and allowance for credit losses(1,323)3,481 
Provision for chargebacks and refunds3,787 (1,840)
Other36 452 
Changes in operating assets and liabilities:
Accounts receivable(943)(160)
Funds receivable(6,295)(3,973)
Creator signing fees & creator advances1,553 1,182 
Prepaid expenses and other assets7,073 805 
Accounts payable, creators95,380 62,948 
Accounts payable135 216 
Chargebacks and refunds reserve(4,201)(3,363)
Accrued compensation and benefits(3,445)1,883 
Accrued taxes(3,382)(1,055)
Operating lease liabilities(1,120)(2,529)
Other accrued liabilities(11,181)2,062 
Payment in kind interest (8,962)
                         Net cash provided by operating activities76,219 40,169 
Cash flows from investing activities
Purchases of property and equipment(320)(93)
Capitalized internal-use software development costs(511)(25)
                         Net cash used in investing activities(831)(118)
Cash flows from financing activities
Proceeds from issuance of debt 212,750 
Debt issuance costs (5,319)
Purchase of convertible notes capped calls (18,509)
Principal repayment of debt obligations and prepayment premium (143,247)
Proceeds from exercise of stock options1,464 4,680 
Taxes paid related to net share settlement of equity awards(1,711)(2,611)
Principal payments on finance lease obligations(31)(93)
                         Net cash (used in) provided by financing activities(278)47,651 
                         Net increase in cash, cash equivalents and restricted cash75,110 87,702 
Cash, cash equivalents and restricted cash
Beginning of period636,159 508,430 
End of period$711,269 $596,132 
Supplemental cash flow data
Interest paid$857 $1,055 
Income taxes paid, net of refunds8 37 
Non-cash investing and financing activities
Reduction of right of use asset due to modification941  
Unpaid offering costs 435 
(See accompanying Notes to Unaudited Condensed Consolidated Financial Statements)
5


EVENTBRITE, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Overview and Basis of Presentation
Description of Business
Eventbrite, Inc. (Eventbrite or the Company) has built a powerful, broad technology platform to enable creators to solve the challenges associated with creating in-person and online live experiences. The Company’s platform integrates components needed to seamlessly plan, promote and produce live events. To further enhance the value of the creators’ self-service experience, the Company is working to reframe the Eventbrite product around the ongoing operational needs of creators in addition to the requirements of individual events. To this end, the Company has improved events calendaring, streamlined the event creation process and launched tools to assist creators in promoting multiple events and increasing audience size for their events.
Impact of COVID-19
The Company continues to be significantly impacted by the COVID-19 pandemic. The full extent and duration of the impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition remain uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the introduction and spread of new variants of the virus, including, for example, the Omicron variant, the continuation of existing or implementation of new government restrictions, and the extent of containment actions taken on event gatherings in general, and the impact of these and other factors on the Company’s business in particular, which may result in a reduction in events and an increase in event cancellation losses. The effect of and uncertainties surrounding the COVID-19 pandemic have caused the Company to make significant estimates in its consolidated financial statements as of and for the three months ended March 31, 2022, specifically related to chargebacks and refunds due to cancelled or postponed events, which impact net revenue, advance payouts, creator signing fees and creator advances.
The COVID-19 pandemic is ongoing in nature and the Company will continue to revise such estimates in future reporting periods to reflect management's best estimates of future outcomes. Significant uncertainty remains regarding the extent and duration of the impact that the COVID-19 pandemic will have on the Company’s business, and the impact of COVID-19 may persist for an extended period of time or become more pronounced.
Basis of Presentation
The accompanying condensed consolidated financial statements of the Company are unaudited. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal and recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations and cash flows for the interim periods. All intercompany transactions and balances have been eliminated. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other future annual or interim period.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K).
Significant Accounting Policies
There have been no changes to our significant accounting policies described in our 2021 Form 10-K that have had a material impact on our unaudited condensed consolidated financial statements and related notes.
Use of Estimates
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In order to conform with U.S. GAAP, the Company is required to make certain estimates, judgments and assumptions when preparing its consolidated financial statements. These estimates, judgments and assumptions affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reported periods. These estimates include, but are not limited to, the recoverability of creator signing fees and creator advances, chargebacks and refunds reserve, certain assumptions used in the valuation of equity awards, assumptions used in determining the fair value of business combinations, the allowance for credit losses, and indirect tax reserves. The Company evaluates these estimates on an ongoing basis. Actual results could differ from those estimates and such differences could be material to the Company’s consolidated financial statements.
Comprehensive Loss
For all periods presented, comprehensive loss equaled net loss. Therefore, the condensed consolidated statements of comprehensive loss have been omitted from the unaudited condensed consolidated financial statements.
Segment Information
The Company’s Chief Executive Officer (CEO) is the chief operating decision maker. The Company's CEO reviews discrete financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates as a single operating segment and has one reportable segment.
2. Revenue Recognition
The Company derives its revenues primarily from ticketing and payment processing. The Company also derives a smaller portion of revenues from marketing services. The Company's customers are event creators who use the Company's platform to sell tickets and market events to attendees. Revenue is recognized when or as control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.
Transaction Revenue
For ticketing services, the Company's service provides a platform to the event creator and attendee to transact. The Company's performance obligation is to facilitate and process that transaction and issue the ticket, and revenue is recognized by the Company when the ticket is sold. The amount that the Company earns for its services is fixed which typically consists of a flat fee and a percentage based fee per ticket. As a result, the Company records revenue on a net basis related to its ticketing service fees.
For payment processing services, the Company's service provides the event creator with the choice of whether to use Eventbrite Payment Processing (EPP) or to use a third-party payment processor, referred to as Facilitated Payment Processing (FPP).
Under the EPP option, the Company is the merchant of record and is responsible for processing the transaction and collecting the face value of the ticket and all associated fees at the time the ticket is sold. The Company is also responsible for remitting these amounts collected, less the Company's fees, to the event creator. For EPP services, the Company determined that it is the principal in providing the service as the Company is responsible for fulfilling the promise to process the payment and has discretion in establishing the price of its service. As a result, the Company records revenue on a gross basis related to its EPP service fees. Costs incurred for processing the ticketing transactions are included in cost of net revenues in the consolidated statements of operations. Under the FPP option, the Company is not responsible for processing the transaction or collecting the face value of the ticket and associated fees. In this case, the Company records revenue on a net basis related to its FPP service fees.
Revenue is presented net of indirect taxes, customer refunds, payment chargebacks, estimated uncollectible amounts, creator royalties, and amortization of creator signing fees. Previously, the Company offered upfront payments to creators entering into new or renewed ticketing arrangements. However, the Company is shifting from upfront payment incentives to performance based incentives on a limited basis.
If an event is cancelled by a creator, then any obligations to provide refunds to event attendees are the responsibility of that creator. If a creator is unwilling or unable to fulfill their refund obligations, the Company may, at its discretion, provide attendee refunds.
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Marketing Revenue
Revenue from marketing services is derived from providing creators with access to various marketing tools and functionalities for a monthly subscription fee. The Company considers that it satisfies its performance obligation as it provides the services to customers and recognizes revenue ratably over the service term which varies from one month to a year.
3. Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents includes bank deposits and money market funds held with financial institutions with an original maturity of three months or less at the date of purchase.
Cash and cash equivalents balances include the face value of tickets sold on behalf of creators and their share of service charges, which are to be remitted to the creators. Such balances were $358.1 million and $268.6 million as of March 31, 2022 and December 31, 2021, respectively. Although creator cash is legally unrestricted, the Company does not utilize creator cash for its own financing or investing activities as the amounts are payable to creators on a regular basis. These amounts due to creators are included in accounts payable, creators on the consolidated balance sheets. See Note 8, "Accounts Payable, Creators", for more details.
The Company has issued letters of credit relating to contracts entered into with other parties under lease agreements and other agreements which have been collateralized with cash. This cash is classified as noncurrent restricted cash on the consolidated balance sheets. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows (in thousands):
March 31,
2022
December 31,
2021
March 31,
2021
Cash and cash equivalents$709,853 $634,378 $593,342 
Restricted cash 1,416 1,781 2,790 
Total cash, cash equivalents and restricted cash $711,269 $636,159 $596,132 
4. Funds Receivable
Funds receivable represents cash-in-transit from third-party payment processors that is received by the Company within approximately five business days from the date of the underlying ticketing transaction. The funds receivable balances include the face value of tickets sold on behalf of creators and their share of service charges, which amounts are to be remitted to the creators. Such amounts were $22.5 million and $16.7 million as of March 31, 2022 and December 31, 2021, respectively.
5. Accounts Receivable, Net
Accounts receivable, net is comprised of invoiced amounts to customers who use FPP for payment processing as well as other invoiced amounts. In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers various factors including the age of the balance, the creditworthiness of the customer and the customer’s current financial condition. Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. The following table summarizes the Company’s accounts receivable balance (in thousands):
March 31,
2022
December 31,
2021
Accounts receivable, customers$2,831 $2,085 
Allowance for credit losses(1,079)(975)
Accounts receivable, net$1,752 $1,110 
6. Creator Signing Fees, Net
Creator signing fees are incentives that are offered and paid by the Company to secure exclusive ticketing and payment processing rights with certain creators. The benefit the Company receives by securing exclusive ticketing and payment processing rights with certain creators from creator signing fees is inseparable from the customer relationship with the creators and accordingly the amortization of these fees is recorded as a reduction of revenue in the consolidated statements of operations.
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As of March 31, 2022, the balance of creator signing fees, net is being amortized over a weighted-average remaining contract life of 3.7 years on a straight-line basis. The following table summarizes the activity in creator signing fees for the periods indicated (in thousands):
Three Months Ended March 31,
20222021
Balance, beginning of period $3,409 $9,495 
Creator signing fees paid  18 
Amortization of creator signing fees (412)(879)
Write-offs and other adjustments (351)(2,213)
Balance, end of period $2,646 $6,421 
Creator signing fees are classified as follows on the condensed consolidated balance sheet as of the dates indicated (in thousands):
March 31,
2022
March 31,
2021
Creator signing fees, net$1,152 $2,626 
Creator signing fees, noncurrent1,494 3,795 
Total creator signing fees$2,646 $6,421 
7. Creator Advances, Net
Creator advances are incentives that are offered by the Company which provide the creator with funds in advance of the event. These are subsequently recovered by withholding amounts due to the Company from the sale of tickets for the event until the creator payment has been fully recovered.
The following table summarizes the activity in creator advances for the periods indicated (in thousands):
Three Months Ended March 31,
20222021
Balance, beginning of period$862 $6,651 
Creator advances paid96  
Creator advances recouped(964)(1,200)
Write-offs and other adjustments1,290 (1,096)
Balance, end of period
$1,284 $4,355 
8. Accounts Payable, Creators
Accounts payable, creators consists of unremitted ticket sale proceeds, net of Eventbrite service fees and applicable taxes. Amounts are remitted to creators within five business days subsequent to the completion of the related event. Creators may apply to receive a portion of these proceeds prior to completion of their events.
For qualified creators, the Company passes ticket sales proceeds to the creator prior to the event, subject to certain limitations. Internally, the Company refers to these payments as advance payouts. When an advance payout is made, the Company reduces its cash and cash equivalents with a corresponding decrease to its accounts payable, creators. As of March 31, 2022 and December 31, 2021, advance payouts outstanding was approximately $356.3 million and $319.3 million, respectively. This included $114.0 million and $79.5 million of advance payouts issued since the third quarter of 2020, when the Company resumed the advance payout program on a limited basis.
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9. Chargebacks and Refunds Reserve
The terms of the Company's standard merchant agreement obligate creators to reimburse attendees who are entitled to refunds. The Company records estimates for refunds and chargebacks of its fees as contra-revenue. When the Company provides advance payouts, it assumes risk that the event may be cancelled, fraudulent, or materially not as described, resulting in significant chargebacks and refund requests. See Note 8 “Accounts Payable, Creators”. If the creator is insolvent or has spent the proceeds of the ticket sales for event-related costs, the Company may not be able to recover its losses from these events, and such unrecoverable amounts could equal the value of the transaction or transactions settled to the creator prior to the event that is disputed, plus any associated chargeback fees not assumed by the creator. The Company records reserves for estimated advance payout losses as an operating expense classified within sales, marketing and support.
Reserves are recorded based on the Company's assessment of various factors, including the amounts paid and outstanding to creators in conjunction with the advance payout program, the nature of future events, the remaining time to event date, macro-economic conditions and current events, and actual chargeback and refund activity during the current year. The chargebacks and refunds reserve was $21.0 million and $21.4 million which primarily includes reserve balances for estimated advance payout losses of $18.3 million and $18.5 million as of March 31, 2022 and December 31, 2021, respectively.
Due to the nature of the COVID-19 situation and the limited amount of currently available data, there is a high degree of uncertainty around the outcome of events that are currently postponed or rescheduled and the remaining advance payouts balance. It is possible that this amount will not be sufficient and the Company's actual losses could be materially different from its current estimates. The Company will adjust reserves in the future to reflect best estimates of future outcomes. The Company cannot predict the outcome of or estimate the possible recovery or range of recovery from these matters.
10. Property and Equipment, Net
Property and equipment, net consisted of the following as of the dates indicated (in thousands):
March 31,
2022
December 31,
2021
Capitalized internal-use software development costs $51,935 $51,292 
Furniture and fixtures 983 1,298 
Computers and computer equipment 7,103 6,854 
Leasehold improvements 4,809 4,841 
Finance lease right-of-use assets605 605 
Property and equipment65,435 64,890 
Less: Accumulated depreciation and amortization (58,770)(57,728)
Property and equipment, net $6,665 $7,162 
The Company recorded the following amounts related to depreciation of fixed assets and capitalized internal-use software development costs during the periods indicated (in thousands):
Three Months Ended March 31,
20222021
Depreciation expense$378 $679 
Amortization of capitalized internal-use software development costs1,004 1,831 
11. Leases
Operating Leases
The Company has operating leases primarily for office space. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Right-of-use assets also include adjustments related to prepaid or deferred lease payments and lease incentives. In calculating the present value of the lease payments, the Company utilizes its incremental borrowing rate, as the rates implicit in the leases were not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.
The Company subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease income is recorded as a reduction of operating expenses.
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The components of operating lease costs were as follows (in thousands):
Three Months Ended March 31,
20222021
Operating lease costs$839 $1,799 
Sublease income(54)(1,083)
Total operating lease costs, net$785 $716 
As of March 31, 2022, the Company's operating leases had a weighted-average remaining lease term of 3.4 years and a weighted-average discount rate of 3.2%.
As of March 31, 2022, maturities of operating lease liabilities were as follows (in thousands):
Operating Leases
The remainder of 2022$3,362 
20233,313 
20241,944 
20251,988 
2026420 
Thereafter375 
Total future operating lease payments11,402 
Less: Imputed interest(687)
Total operating lease liabilities$10,715 
Reconciliation of lease liabilities as shown in the consolidated balance sheets
Operating lease liabilities, current$4,192 
Operating lease liabilities, noncurrent6,523 
Total operating lease liabilities$10,715 

12. Goodwill and Acquired Intangible Assets, Net
The carrying amounts of the Company's goodwill was $174.4 million as of March 31, 2022 and December 31, 2021. The Company tests goodwill for impairment at least annually, in the fourth quarter, or whenever events or changes in circumstances would more likely than not reduce the fair value of its single reporting unit below its carrying value. We did not record any goodwill impairment during the three months ended March 31, 2022.
Acquired intangible assets consisted of the following (in thousands):
March 31, 2022December 31, 2021
CostAccumulated
Amortization
Net Book
Value
CostAccumulated
Amortization
Net Book
Value
Developed technology $22,396 $20,233 $2,163 $22,396 $20,029 $2,367 
Customer relationships 74,884 48,328 26,556 74,884 46,157 28,727 
Tradenames1,650 1,634 16 1,650 1,628 22 
Acquired intangible assets, net $98,930 $70,195 $28,735 $98,930 $67,814 $31,116 
The following tables set forth the amortization expense recorded related to acquired intangible assets for the three months ended March 31, 2022 and 2021 (in thousands):
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Three Months Ended March 31,
20222021
Cost of net revenue $203 $203 
Sales, marketing and support2,172 2,569 
General and administrative 6 6 
Total amortization of acquired intangible assets $2,381 $2,778 
As of March 31, 2022, the total expected future amortization expense of acquired intangible assets by year is as follows (in thousands):
The remainder of 20226,828 
20238,593 
20248,300 
20255,014 
2026 
Thereafter 
    Total expected future amortization expense$28,735 
13. Fair Value Measurement
The Company measures its financial assets and liabilities at fair value at each reporting date using a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – Other inputs that are directly or indirectly observable in the marketplace.
Level 3 – Unobservable inputs that are supported by little or no market activity.
The Company’s cash equivalents, funds receivable, accounts receivable, accounts payable and other current liabilities approximate their fair value. All of these financial assets and liabilities are Level 1, except for debt. See Note 14, “Debt”, for details regarding the fair value of the Company's convertible senior notes.
14. Debt
As of March 31, 2022 and December 31, 2021, long-term debt consisted of the following (in thousands):
March 31, 2022December 31, 2021
2026 Notes2025 NotesTotal2026 Notes2025 NotesTotal
Outstanding principal balance$212,750 $150,000 $362,750 $212,750 $150,000 $362,750 
Less: Debt issuance costs(4,670)(4,036)(8,706)(4,915)(4,271)(9,186)
Carrying amount, long-term debt$208,080 $145,964 $354,044 $207,835 $145,729 $353,564 
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The following tables set forth the total interest expense recognized related to the term loans and the convertible notes for the three months ended March 31, 2022 and 2021 (in thousands):
Three Months Ended March 31,
20222021
Cash interest expense$2,253 $2,968 
Payment in kind interest 2,178 
Amortization of debt discount
 1,750 
Amortization of debt issuance costs480 679 
Total interest expense$2,733 $7,575 

The following table summarizes the Company's contractual obligation to settle commitments related to the 2026 Notes and 2025 Notes as of March 31, 2022 (in thousands):
Payments due by Year
Total20222023202420252026Thereafter
Convertible Senior Notes Due 2026$212,750 $ $ $ $ $212,750 $ 
Interest obligations on 2026 Notes (1)
7,182 798 1,596 1,596 1,596 1,596  
Convertible Senior Notes Due 2025150,000    150,000   
Interest obligations on 2025 Notes (1)
30,000 7,500 7,500 7,500 7,500   
(1) The 2026 Notes and 2025 Notes bear interest at a fixed rate of 0.750% and 5.000% per year, respectively.
Senior Notes
2025 Notes
In June 2020, the Company issued $150.0 million aggregate principal amount of 5.000% convertible senior notes due 2025 (the 2025 Notes), in a private offering to qualified institutional buyers. Interest is payable in cash semi-annually in arrears on June 1 and December 1 of each year. The 2025 Notes mature on December 1, 2025, unless earlier repurchased, redeemed or converted. The total net proceeds from the 2025 Notes, after deducting the debt issuance costs of $5.7 million, was $144.3 million.
Prior to the adoption of ASU 2020-06, the Company separated the conversion option of the 2025 Notes from the debt instrument and classified the conversion option in equity. The Company early adopted ASU 2020-06 on January 1, 2021 using the modified retrospective transition method. Adoption of ASU 2020-06 resulted in a decrease to additional paid-in capital of $45.5 million, an increase to retained earnings of $3.1 million, and a net increase to long-term debt of $42.4 million.
The effective interest rate of the 2025 Notes is 5.8%. The Company recorded cash interest of $1.9 million, and amortization of debt issuance costs of $0.2 million during each of the three months ended March 31, 2022 and March 31, 2021.
The 2025 Notes are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2025 Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.
The terms of the 2025 Notes are governed by an Indenture by and between the Company and Wilmington Trust, National Association, as Trustee (the Indenture). The Company may irrevocably elect a settlement in cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock.
The 2025 Notes are convertible at an initial conversion rate of 79.3903 shares of Class A common stock per $1,000 principal amount of 2025 Notes, which is equal to an initial conversion price of approximately $12.60 per share of Class A common stock. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. Holders of the 2025 Notes may convert all or a portion of their 2025 Notes only in multiples of $1,000 principal amount, under the following circumstances:
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during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price per share of our Class A common stock exceeds 130% of the conversion price of the 2025 Notes for each of the at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 2025 Notes for each trading day of that 10 consecutive trading day period was less than 98% of the product of the last reported sale price of Class A common stock and the conversion rate on such trading day;
upon the occurrence of certain corporate events or distributions on the Company's Class A common stock, as described in the Indenture;
if the Company calls the 2025 Notes for redemption; or
at any time from, and including, June 2, 2025 until the close of business on the second scheduled trading day immediately before the maturity date.
Holders of the 2025 Notes who convert their 2025 Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the Indenture) are, under certain circumstances, entitled to an increase in the conversion rate.
No sinking fund is provided for the 2025 Notes. The 2025 Notes are redeemable, in whole or in part, at the Company's option at any time and from time to time, on or after June 1, 2023 and on or before the 40th scheduled trading day immediately prior to the maturity date, at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of Class A common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading dates ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. Additionally, calling any of the 2025 Notes for redemption will constitute a make-whole fundamental change with respect to that portion of the 2025 Notes, in which case the conversion rate applicable to the conversion of those 2025 Notes will be increased in certain circumstances (as described in the Indenture) if it is converted after it is called for redemption.
If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, note holders may require the Company to repurchase their 2025 Notes at a cash repurchase price equal to the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the Fundamental Change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s Class A common stock.
The 2025 Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the 2025 Notes; (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the 2025 Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) the rendering of certain judgments against the Company or any of its subsidiaries for the payment of at least $10,000,000, where such judgments are not discharged or stayed within 45 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; (vi) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $10,000,000; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries.
If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of 2025 Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants
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in the Indenture consists exclusively of the right of the noteholders to receive special interest on the 2025 Notes for up to 180 days at a specified rate per annum not exceeding 0.50% on the principal amount of the 2025 Notes.
The fair value of the 2025 Notes, which we have classified as a Level 2 instrument, was $218.3 million as of March 31, 2022. The fair value of the 2025 Notes is determined using observable market prices on the last business day of the period.

2026 Notes
In March 2021, the Company issued $212.75 million aggregate principal amount of 0.750% convertible senior notes due 2026 (the 2026 Notes) in a private offering to qualified institutional buyers, inclusive of the initial purchaser's exercise in full of its option to purchase additional notes. The 2026 Notes bear interest at a fixed rate of 0.750% per year. Interest is payable in cash semi-annually in arrears on March 15 and September 15 of each year. The 2026 Notes mature on September 15, 2026 unless earlier repurchased, redeemed or converted. The total net proceeds from the 2026 Notes, after deducting debt issuance costs of $5.7 million, was $207.0 million.
The 2026 Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2026 Notes and effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iii) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.
Before March 15, 2026, noteholders will have the right to convert their 2026 Notes under the following circumstances:
during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price per share of our Class A common stock exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our Class A common stock on such trading day and the conversion rate on such trading day;
upon the occurrence of certain corporate events or distributions on our Class A common stock, as described in the Indenture and
if the Company call such notes for redemption;
From and after March 15, 2026, noteholders may convert their 2026 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion, the 2026 Notes may be settled in cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at the Company's election. The Company may irrevocably elect a settlement in cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock.
The 2026 Notes are convertible at an initial conversion rate of 35.8616 shares of Class A common stock per $1,000 principal amount of 2026 Notes, which is equal to an initial conversion price of approximately $27.89 per share of Class A common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.
No sinking fund is provided for the 2026 Notes. The 2026 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 15, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s Class A common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. In addition, calling any 2026 Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that 2026 Note will be increased in certain circumstances if it is converted after it is called for redemption.
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If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their 2026 Notes at a cash repurchase price equal to the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest, if any. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s Class A common stock.
The 2026 Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Notes (which, in the case of a default in the payment of interest on the Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $10,000,000; and (vi) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries.
If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2026 Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then the Trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2026 Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the 2026 Notes for up to 180 days at a specified rate per annum not exceeding 0.50% on the principal amount of the 2026 Notes.
In accounting for the issuance of the 2026 Notes, total issuance costs of $5.7 million related to the 2026 Notes are being amortized to interest expense over the term of the 2026 Notes using the effective interest rate method.
The effective interest rate of the 2026 Notes is 1.3%. During the three months ended March 31, 2022, the Company recorded cash interest of $0.4 million, and amortization of debt issuance costs of $0.2 million. During the three months ended March 31, 2021, the Company recorded cash interest of $0.1 million, and amortization of debt discount and issuance costs of $0.1 million.
The fair value of the 2026 Notes, which we have classified as a Level 2 instrument, was $186.1 million as of March 31, 2022. The fair value of the 2026 Notes is determined using observable market prices on the last business day of the period.

Capped Call Transactions
In March 2021, in connection with the offering of the 2026 Notes, the Company entered into privately negotiated capped call transactions (2026 Capped Calls) with certain financial institutions (2026 Option Counterparties). The 2026 Capped Calls cover, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 2026 Notes, the number of shares of Class A common stock initially underlying the 2026 Notes. The 2026 Capped Calls are expected generally to reduce potential dilution to the Class A common stock upon any conversion of 2026 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted 2026 Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the 2026 Capped Calls will initially be $37.5375 per share of Class A common stock, and is subject to certain customary adjustments under the terms of the 2026 Capped Calls. The 2026 Capped Calls will expire in September 2026, if not exercised earlier.
The 2026 Capped Calls are separate transactions entered into by the Company with each 2026 Option Counterparty, and are not part of the terms of the 2026 Notes and will not affect any noteholder’s rights under the 2026 Notes. Noteholders will not have any rights with respect to the 2026 Capped Calls.
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The 2026 Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the company, including merger events, tender offers and announcement events. In addition, the 2026 Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the 2026 Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions.
The 2026 Capped Call Transactions do not meet the criteria for separate accounting as a derivative. The aggregate premium paid for the purchase of the 2026 Capped Calls of $18.5 million was recorded as a reduction to additional paid-in capital on the consolidated balance sheets.
In June 2020, in connection with the offering of the 2025 Notes, the Company entered privately negotiated capped call transactions with certain financial institutions (2025 Capped Calls). The 2025 Capped Calls have an initial strike price of approximately $12.60 per share, which corresponds to the initial conversion price of the 2025 Notes. The 2025 Capped Calls cover, subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 2025 Notes, the number of shares of Class A common stock initially underlying the 2025 Notes. The 2025 Capped Calls are expected generally to reduce potential dilution to the Company’s Class A common stock upon any conversion of the 2025 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2025 Notes, as the case may be, with such reduction and/or offset subject to a cap, initially equal to $17.1520, and is subject to certain adjustments under the terms of the 2025 Capped Call transactions. The 2025 Capped Calls will expire in December 2025, if not exercised earlier.
The 2025 Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the company, including merger events, tender offers and announcement events. In addition, the 2025 Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the 2025 Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. For accounting purposes, the 2025 Capped Calls are separate transactions, and not part of the terms of the Notes.
The 2025 Capped Call Transactions do not meet the criteria for separate accounting as a derivative. The aggregate premium paid for the purchase of the 2025 Capped Calls of $15.6 million was recorded as a reduction to additional paid-in capital on the consolidated balance sheets.
Term Loans
On March 11, 2021, the Company repaid all borrowings outstanding under the Credit Agreement, dated as of May 9, 2020 (and as amended on June 15, 2020), by and among the Company, FP EB Aggregator, L.P. (FP) and Wilmington Trust, National Association, as the administrative agent (the May 2020 credit agreement), and subsequently terminated the May 2020 credit agreement. In connection with the early termination of the borrowings outstanding under the May 2020 credit agreement, the Company paid $153.2 million, which consisted of $125.0 million in principal payments, a $18.2 million make-whole premium, $9.0 million payment in kind interest and $1.0 million of accrued cash interest.
The Company recorded a loss on debt extinguishment of $50.0 million during three months ended March 31, 2021. The loss primarily related to the write-off of unamortized debt discount and issuance costs of $31.8 million and a $18.2 million make-whole premium.
During the three months ended March 31, 2021, the Company recorded $2.2 million payment in kind interest, $2.2 million amortization of debt discount and issuance costs, and $1.0 million cash interest.

15. Commitments and Contingencies
The Company's principal commitments consist of obligations under the 2025 Notes and 2026 Notes (including principal and coupon interest), operating leases for office space, as well as non-cancellable purchase commitments. See Note 14 "Debt" and Note 11 "Leases" for contractual obligations to settle commitments relating to the 2025 Notes, 2026 Notes and operating leases for office space.
During the three months ended March 31, 2022, the Company entered into a purchase commitment with a third-party payment services provider. The Company plans to use the provider’s onboarding service for its creators, and other potential services, which are expected to streamline the Company’s payment infrastructure. The fees for this service will depend on certain volume and territory based rates. The Company expects to commence services by April 1, 2023. As of March 31, 2022, the Company's contractual obligation to settle the minimum fee commitment related to these services is $4.5 million, which is expected to be paid based on usage over a three year term ending March 31, 2026.
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Other than as described above, there were no material changes outside the Company's normal course of business in its commitments under contractual obligations from those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Litigation and Loss Contingencies
In addition to the litigation discussed below, from time to time, the Company may become a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, breach of contract claims, tax and other matters. Future litigation may be necessary to defend the Company or its creators.
The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.
The Company accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. The Company's assessment of losses is re-evaluated each accounting period and is based on all available information, including impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to each case. Nevertheless, it is possible that additional future legal costs including settlements, judgments, legal fees and other related defense costs could have a material adverse effect on the Company’s business, consolidated financial position, results of operations or liquidity.
The matters discussed below summarize the Company’s current ongoing pending litigation.
Refund Policy Arbitration
On June 4, 2020, three plaintiffs, seeking to represent a proposed class of individuals who purchased tickets on or after June 3, 2016, filed suit against the Company in the United States District Court for the Northern District of California, in a case captioned Snow, et al. v. Eventbrite, Inc., Case No. 20-cv-03698 (the Class Action). Plaintiffs allege that Eventbrite failed to provide an opportunity for purchasers of tickets to events sold through Eventbrite’s platform to obtain a refund where the event is postponed, rescheduled, or canceled. Plaintiffs seek injunctive relief in addition to restitution and monetary damages under California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, in addition to claims brought under California common law. The Company denies the allegations and intends to defend the case vigorously. Prior to answering Plaintiffs’ complaint, Eventbrite brought a motion to compel arbitration pursuant to its Terms of Service. The Court denied that motion. The Company thereafter answered Plaintiffs’ Complaint and brought a second motion to compel arbitration, based in part on facts established via the Company’s Answer. The Court granted that motion on September 2, 2021, and stayed the suit pending the results of arbitration. Two of the named Plaintiffs have since initiated individual arbitrations pursuant to the Company’s Terms of Service. The Company has not filed responses to Plaintiffs’ demands for arbitration, denying any and all liability. No further documents have been filed. The case is in its early stages. The Company is unable to predict the likely outcome at this point.
Securities Litigation
Beginning on April 15, 2019, purported stockholders of the Company filed two putative securities class action complaints in the United States District Court for the Northern District of California, and three putative securities class action complaints in the Superior Court of California for the County of San Mateo, against the Company, certain of its executives and directors, and its underwriters for the Company's initial public offering (IPO). Some of these actions also name as defendants venture capital firms that were investors in the Company as of the IPO.
On August 22, 2019, the federal court consolidated the two pending actions (the Federal Action). On October 11, 2019, the lead plaintiffs in the Federal Action filed an amended consolidated complaint. That complaint alleged that the Company misrepresented and/or omitted material information in its IPO offering documents in violation of the Securities Act. It also challenged public statements made after the IPO in violation of the Exchange Act. The amended complaint sought unspecified monetary damages and other relief on behalf of investors. On December 11, 2019, the defendants filed a motion to dismiss the amended complaint. On April 28, 2020, the court granted defendants’ motion to dismiss in its entirety with leave to amend and set a deadline of June 24, 2020 for lead plaintiffs to file their second amended consolidated complaint. On June 22, 2020, the Court extended lead plaintiffs' deadline to file their second amended consolidated complaint to August 10, 2020.
On July 29, 2020, the Company entered into a settlement agreement with the lead plaintiffs in the Federal Action. On August 27, 2020, the lead plaintiffs in the Federal Action filed a motion for preliminary approval of the settlement. On October 21, 2020, the Court vacated the preliminary approval hearing, and on October 30, 2020, the Court issued an order continuing
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the preliminary approval hearing, tentatively rescheduling the hearing for March 18, 2021. On January 22, 2021, the Court issued an order denying without prejudice the motion for preliminary approval. On February 9, 2021, the Company gave notice to the lead plaintiff that, in light of the denial of the preliminary approval motion, it was terminating the settlement agreement.
On June 24, 2019, the state court consolidated two state actions pending at that time (the State Action). On July 24, 2019, the two plaintiffs in the State Action filed a consolidated complaint. The consolidated complaint generally alleged that the Company misrepresented and/or omitted material information in its IPO offering documents, in violation of the Securities Act, and sought unspecified monetary damages and other relief on behalf of investors. On August 23, 2019, defendants filed demurrers to the consolidated complaint, which the court sustained with leave to amend at a hearing on November 1, 2019. Plaintiffs filed a first amended consolidated complaint (FAC) on February 10, 2020. Defendants filed demurrers to the FAC on March 26, 2020. On June 23, 2020, the court sustained the demurrers with leave to amend. On November 9, 2020, the plaintiffs filed their second amended consolidated complaint (SAC). On November 20, 2020, defendants filed demurrers to the SAC, which were overruled on December 17, 2020. On January 15, 2021, defendants filed their answers to the SAC. On January 22, 2021, the plaintiffs filed a motion for class certification. On February 11, 2021, the parties stipulated to class certification, and on February 17, 2021, the Court entered an order certifying a class of “all persons and entities who purchased or otherwise acquired Eventbrite, Inc. Class A common stock pursuant or traceable to the Registration Statement and Prospectus issued in connection with Eventbrite’s September 2018 Initial Public Offering and who were damaged thereby.”
On October 26, 2021, the Company entered into a binding settlement agreement with the two plaintiffs in the State Action described above. In connection with the settlement, the Company and its insurers have paid $19.3 million.
The proposed settlement “Class” is defined as “all persons and entities who purchased or otherwise acquired Class A common shares of Eventbrite between September 20, 2018, and May 24, 2019, inclusive,” excluding the defendants and other “Excluded Persons” defined in the settlement agreement. If the settlement is approved by the court in the State Action, any settlement “Class Member” that does not request exclusion from the proposed settlement “Class” will fully, finally, and forever release “any and all rights, liabilities, suits, debts, obligations, demands, damages, losses, judgment matters, issues, claims . . . and causes of action of every nature and description whatsoever that have been or could have been asserted in the [State] Action or the Federal Action or could in the future be asserted in any forum . .. whether individual, class, representative, on behalf of others, legal, equitable, regulatory, governmental, or of any other type or in any other capacity, whether brought directly or indirectly against any of the Defendants, that (i) arise out of, are based upon, or relate to in any way to any of the allegations, acts, transactions, facts, events,matters, occurrences, representations, or omissions which were or could have been alleged in the [State] Action or the Federal Action, and (ii) arise out of, are based upon, or relate to in any way to the purchase, acquisition, holding, sale, or disposition of Eventbrite Class A common stock between September 20, 2018 and May 24, 2019, inclusive.”
The Court has set a final settlement approval hearing for June 10, 2022. Final approval of the settlement is subject to a number of conditions and contingencies outside of the Company’s control. There can be no guarantee that all of those conditions and contingencies to final approval of the settlement will occur. Should a material condition or contingency to the settlement fail to occur, one or both of the parties to the settlement may exercise their right to terminate the settlement agreement.
Commercial Contract Litigation
On June 18, 2020, the Company filed a Complaint in the United States District Court for the Northern District of California against M.R.G. Concerts Ltd. (MRG) and Matthew Gibbons (Gibbons), asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, declaratory judgment, unfair competition, and common counts under California law, arising out of MRG and Gibbons’s termination of certain contracts with the Company and their refusal to make various payments to the Company required by those contracts. MRG asserted counterclaims against the Company for breach of one of the contracts in issue, as well as for breach of the implied covenant of good faith and fair dealing, unfair competition, and declaratory judgment. Fact discovery and expert discovery have closed, and trial is currently scheduled to commence on May 2, 2022. The Company cannot presently predict the likelihood of success.
Tax Matters
The Company is currently under audit in certain jurisdictions with regard to indirect tax matters. The Company establishes reserves for indirect tax matters when it determines that the likelihood of a loss is probable, and the loss is reasonably estimable. Accordingly, the Company has established a reserve for the potential settlement of issues related to sales and other indirect taxes in the amount of $10.3 million and $11.1 million as of March 31, 2022 and December 31, 2021, respectively. These amounts, which represent management’s best estimates of its potential liability, include potential interest and penalties of $2.1 million and $2.2 million as of March 31, 2022 and December 31, 2021, respectively.
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The Company does not believe that any ultimate liability resulting from any of these matters will have a material adverse effect on its business, consolidated financial position, results of operations or liquidity. However, the outcome of these matters is inherently uncertain. Therefore, if one or more of these matters were resolved against the Company for amounts in excess of management’s expectations, the Company’s financial statements, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.
Indemnification
In the ordinary course of business, the Company enters into contractual arrangements under which the Company agrees to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from the Company’s online ticketing platform or the Company’s acts or omissions. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has indemnification agreements with its directors and executive officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary.

16. Stockholders' Equity
Equity Incentive Plans
In August 2018, the 2018 Stock Option and Incentive Plan (2018 Plan) was adopted by the board of directors and approved by the stockholders and became effective in connection with the IPO. The 2018 Plan replaced the 2010 Stock Plan (2010 Plan) as the board of directors determined not to make additional awards under the 2010 Plan. The 2010 Plan will continue to govern outstanding equity awards granted thereunder.
The 2018 Plan allows for the granting of options, stock appreciation rights, restricted stock, restricted stock units (RSUs), unrestricted stock awards, dividend equivalent rights and cash-based awards. Every January 1, the number of shares of stock reserved and available for issuance under the 2018 Plan will cumulatively increase by five percent of the number of shares of Class A and Class B common stock outstanding on the immediately preceding December 31, or a lesser number of shares as approved by the board of directors.
As of March 31, 2022, there were 6,129,097 and 6,082,713 options issued and outstanding under the 2010 Plan and 2018 Plan, respectively (collectively, the Plans). The Company reserved 9,155,578 shares of Class A common stock and are available for grant under the 2018 Plan.
Stock options granted typically vest over a four-year period from the date of grant. Options awarded under the Plans are exercisable up to ten years.
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Stock Option Activity
Stock option activity for the three months ended March 31, 2022 is presented below:
Outstanding optionsWeighted average exercise priceWeighted average remaining contractual term (years)Aggregate intrinsic value (thousands)
Balance as of December 31, 202111,260,788 12.11 6.763,862 
Granted1,149,869 14.18 
Exercised(180,122)8.13 
Cancelled(18,725)13.72 
Balance as of March 31, 202212,211,810 12.36 6.938,775 
Vested and exercisable as of March 31, 20228,276,364 11.53 5.930,411 
Vested and expected to vest as of March 31, 202211,982,246 12.31 6.838,457 
The aggregate intrinsic value in the table above represents the difference between the fair value of common stock and the exercise price of outstanding, in-the-money stock options at March 31, 2022.
As of March 31, 2022, the total unrecognized stock-based compensation expense related to stock options outstanding was $27.1 million, which will be recognized over a weighted-average period of 2.6 years. The weighted-average fair value of stock options granted was $7.88 for the three months ended March 31, 2022.
Restricted Stock Activity
Restricted stock activity for the three months ended March 31, 2022 is presented below:
Outstanding RSUs and RSAsWeighted-average grant date fair value per shareWeighted average remaining contractual term (years)Aggregate intrinsic value (thousands)
Balance as of December 31, 20214,353,637 18.401.575,873
Awarded3,669,303 14.01
Released(344,238)18.36
Cancelled(283,908)17.65
Balance as of March 31, 20227,394,794 16.251.7109,142
Vested and expected to vest as of March 31, 20226,256,002 16.301.692,401
As of March 31, 2022, the total unrecognized stock-based compensation expense related to RSUs outstanding was $92.8 million, which will be recognized over a weighted-average period of 3.3 years.
Stock-based Compensation Expense
Stock-based compensation expense recognized in connection with stock options, RSUs and the employee stock purchase plan during each of the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

20222021
Cost of net revenue$240 $260 
Product development4,133 3,958 
Sales, marketing and support1,787 1,359 
General and administrative6,676 5,786 
      Total$12,836 $11,363 
The Company capitalized $0.1 million of stock-based compensation expense related to capitalized software costs during each of the three months ended March 31, 2022 and March 31, 2021.
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17. Net Loss Per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period. As the Company had net losses for the quarters ended March 31, 2022 and 2021, all potentially issuable shares of common stock were determined to be anti-dilutive.
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):
Three Months Ended March 31,
20222021
Net loss $(18,185)$(84,891)
Weighted-average shares used in computing net loss per share, basic and diluted 97,554 92,879 
Net loss per share, basic and diluted$(0.19)$(0.91)
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect (in thousands):