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You should read the following discussion and analysis of our financial condition
and results of operations together with our audited consolidated financial
statements and related notes included elsewhere in this Annual Report on Form
10-K ("Form 10-K). This discussion and other parts of this Form 10-K contain
forward-looking statements, such as those relating to our plans, objectives,
expectations, intentions, and beliefs, which involve risks and uncertainties.
Our actual results could differ materially from those discussed in these
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those identified below and those
discussed in the sections titled "Special Note Regarding Forward-Looking
Statements" and "Risk Factors" included elsewhere in this Form 10-K.

Overview

Pioneer of the direct-to-consumer model, Warby Parker is one of the fastest growing brands at scale in United States. We are a mission-driven lifestyle brand that operates at the intersection of design, technology, health and social enterprise.

Since day one, our focus on satisfying our customers and doing good has created the foundation for continued innovation:


•We aim to provide customers with the highest-quality product possible by
designing glasses at our headquarters in New York City, using custom materials,
and selling direct to the customer. By cutting out the middleman, we are able to
sell our products at a lower price than many of our competitors and pass the
savings on to our customers. In addition to lower prices, we introduced simple,
unified pricing (glasses starting at $95, including prescription lenses) to the
eyewear market.
•We've built a seamless shopping experience that meets customers where and how
they want to shop, whether that's on our website, on our mobile app, or in our
more than 160 retail stores.
•We've crafted a holistic vision care offering that extends beyond glasses to
include contacts, vision tests and eye exams, vision insurance, and beyond. We
leverage leading (and in many cases proprietary) technology to enhance our
customers' experiences, whether it's to help them find a better-fitting frame
using our Virtual Try-On tool, or to update their prescription from home using
Virtual Vision Test, our telehealth app.
•We recruit and retain highly engaged, motivated team members who are driven by
our commitment to scaling a large, growing business while making an impact and
are excited to connect their daily work back to our mission.
•We are a public benefit corporation focused on positively impacting all
stakeholders, and hope to inspire other entrepreneurs and businesses to think
along the same lines. Working closely with our nonprofit partners, we distribute
glasses to people in need in more than 50 countries globally and many parts of
the United States. Over 10 million more people now have the glasses they need to
learn, work, and achieve better economic outcomes through our Buy a Pair, Give a
Pair program.

We generate revenue through selling our wide array of prescription and
non-prescription eyewear, including glasses, sunglasses, and contact lenses. We
also generate revenue from providing eye exams and vision tests, and selling
eyewear accessories. We maintain data across the entire customer journey that
allows us to develop deep insights, informing our innovation priorities and
enabling us to create a highly personalized, brand-enhancing experience for our
customers. We have built an integrated, multichannel presence that we believe
deepens our relationship with existing customers while broadening reach and
accessibility. And while we have the ability to track where our customers
transact, we're channel agnostic to where the transaction takes place and find
that many of our customers engage with us across both digital and physical
channels; for example, many customers who check out online also visit a store
throughout their customer journey, while others choose to browse online before
visiting one of our stores.

Financial Highlights
For the years ended December 31, 2021, 2020, and 2019:

•we generated net revenue of $540.8 million $393.7 million, and $370.5 million,
respectively;
•we generated gross profit of $317.7 million, $231.9 million, and $223.1
million, respectively, representing a gross profit margin of 59%, 59%, and 60%,
respectively;
•we generated net (loss) income of $(144.3) million, $(55.9) million, and zero,
respectively; and
•we generated adjusted EBITDA of $24.9 million, $7.7 million, and $21.9 million,
respectively.

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For a definition of adjusted EBITDA, a non-GAAP measure, and a reconciliation to
the most directly comparable GAAP measure, see the section titled "Key Business
Metrics and Certain Non-GAAP Financial Measures."

Direct Listing
On September 29, 2021, we completed a direct listing of our Class A common stock
(the "Direct Listing") on the New York Stock Exchange ("NYSE"). We incurred fees
related to financial advisory service, audit, and legal services in connection
with the Direct Listing and recorded general and administrative expenses of
$28.3 million for the year ended December 31, 2021.

Key Business Metrics and Certain Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements,
we use the following key business metrics and certain non-GAAP financial
measures to evaluate our business, measure our performance, develop financial
forecasts, and make strategic decisions. The following table summarizes our key
performance indicators and non-GAAP financial measures for the periods
presented, which are unaudited.

                                            Year Ended December 31,
                                       2021           2020          2019
Active Customers (in millions)          2.20          1.81           1.78
Store Count(1)                           161           126            119

Adjusted EBITDA(2) (in thousands) $24,861 $7,658 $21,868
Adjusted EBITDA margin(2)

                4.6  %        1.9  %         5.9  %


__________________

(1)Store Count number at the end of the period indicated.
(2)Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures.
For more information regarding our use of these measures and a reconciliation of
net loss, the most directly comparable GAAP measure, to adjusted EBITDA and
adjusted EBITDA margin, see the section titled "Adjusted EBITDA and Adjusted
EBITDA Margin"

Active Customers
The number of Active Customers is a key performance measure that we use to
assess the reach of our physical retail stores and digital platform as well as
our brand awareness. We define an Active Customer as a unique customer that has
made at least one purchase in the preceding 12-month period. We determine our
number of Active Customers by counting the total number of customers who have
made at least one purchase in the preceding 12-month period, measured from the
last date of such period. Given our definition of a customer is a unique
customer that has made at least one purchase, it can include either an
individual person or a household of more than one person utilizing a single
account.

Store Count
Store Count is a key performance measure that we use to reach consumers and
generate incremental demand for our products. We define Store Count as the total
number of retail stores open at the end of a given period. We believe our retail
stores embody our brand, drive brand awareness, and serve as efficient customer
acquisition vehicles. Our results of operations have been and will continue to
be affected by the timing and number of retail stores that we operate.

We have thoughtfully expanded our retail store footprint over the past several
years. During the years ended December 31, 2021, 2020, and 2019, we opened 35,
10, and 32 new retail stores. In 2020, we opened fewer retail stores than in
years prior due to the COVID-19 pandemic-related operating challenges, including
extended retail store closures and heightened safety measures.

From December 31, 2021107 of our 161 retail stores offered in-person eye exams.


Adjusted EBITDA and Adjusted EBITDA Margin
We define adjusted EBITDA as net income (loss) before interest and other income
(loss), taxes, and depreciation and amortization as further adjusted for
stock-based compensation expense and related employer payroll taxes, non-cash
charitable donations, and non-recurring costs such as direct listing or other
transaction costs. We define adjusted EBITDA margin as adjusted EBITDA divided
by net revenue. We caution investors that amounts presented in accordance with
our definitions of adjusted EBITDA and adjusted EBITDA margin may not be
comparable to similar measures disclosed by our competitors, because not all
companies and analysts calculate adjusted EBITDA and adjusted EBITDA margin in
the same manner. We present adjusted EBITDA and adjusted EBITDA margin because
we

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consider these metrics to be important supplemental measures of our performance
and believe they are frequently used by securities analysts, investors, and
other interested parties in the evaluation of companies in our industry.
Management believes that investors' understanding of our performance is enhanced
by including these non-GAAP financial measures as a reasonable basis for
comparing our ongoing results of operations.

Management uses Adjusted EBITDA and Adjusted EBITDA margin:


•as a measurement of operating performance because they assist us in evaluating
the operating performance of our business on a consistent basis, as they remove
the impact of items not directly resulting from our core operations;
•for planning purposes, including the preparation of our internal annual
operating budget and financial projections;
•to evaluate the performance and effectiveness of our operational strategies;
and
•to evaluate our capacity to expand our business.

By providing these non-GAAP financial measures, together with a reconciliation
to the most directly comparable GAAP measure, we believe we are enhancing
investors' understanding of our business and our results of operations, as well
as assisting investors in evaluating how well we are executing our strategic
initiatives. Adjusted EBITDA and adjusted EBITDA margin have limitations as
analytical tools, and should not be considered in isolation, or as an
alternative to, or a substitute for net loss or other financial statement data
presented in our consolidated financial statements as indicators of financial
performance. Some of the limitations are:

•such measures do not reflect our cash expenditures, or future requirements for
capital expenditures, or contractual commitments;
•such measures do not reflect changes in, or cash requirements for, our working
capital needs;
•such measures do not reflect the interest expense, or the cash requirements
necessary to service interest or principal payments on our debt;
•such measures do not reflect our tax expense or the cash requirements to pay
our taxes;
•although depreciation and amortization are non-cash charges, the assets being
depreciated and amortized will often have to be replaced in the future and such
measures do not reflect any cash requirements for such replacements; and other
companies in our industry may calculate such measures differently than we do,
limiting their usefulness as comparative measures.

Due to these limitations, adjusted EBITDA and adjusted EBITDA margin should not
be considered as measures of discretionary cash available to us to invest in the
growth of our business. We compensate for these limitations by relying primarily
on our GAAP results and using these non-GAAP measures only supplementally. Each
of the adjustments and other adjustments described in this paragraph and in the
reconciliation table below help management with a measure of our core operating
performance over time by removing items that are not related to day-to-day
operations.

For the year ended December 31, 2021, adjusted EBITDA and adjusted EBITDA margin
were $24.9 million and 4.6%, respectively, and for the year ended December 31,
2020, adjusted EBITDA and adjusted EBITDA margin were $7.7 million and 1.9%,
respectively. In 2020, we experienced a significant decline in adjusted EBITDA
due to the COVID-19 pandemic-related operating challenges, including extended
retail store closures and heightened safety measures.

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The following table reconciles Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable GAAP measure, net loss:

                                                  Year Ended December 31,
                                            2021             2020           2019
Net (loss) income                       $ (144,271)      $ (55,919)      $      -
Adjusted to exclude the following:
Interest and other (loss) income, net          347              97         

(1,939)

Provision for income taxes                     263             190          

276

Amortization expense 21,960 18,377 15,032 Stock-based compensation expense

           110,543          44,913          8,499
Non-cash charitable donation                 7,757               -              -
Transaction costs                           28,262               -              -
Adjusted EBITDA                         $   24,861       $   7,658       $ 21,868
Adjusted EBITDA margin                         4.6  %          1.9  %         5.9  %


Impact of COVID-19 Pandemic
The COVID-19 pandemic caused personal and business disruption worldwide
beginning in January 2020, and continues to impact global economies and supply
chains. Early on in the pandemic, we temporarily closed our retail stores,
transitioned our Corporate and Customer Experience teams to remote work, and
implemented robust safety and sanitization protocols. In 2021, our business
continued to experience disruption caused by the pandemic, including changes to
consumer shopping patterns as well as varying levels of restrictions in our
physical locations implemented by national, state, and local authorities.

Throughout the pandemic, our team has remained committed to ensuring we could
get our customers the glasses they needed to see and live their daily lives. We
continue to invest both in our physical stores, adding 35 new stores in 2021,
and in our at-home and digital offerings like Home Try-On, Virtual Try-On, and
Virtual Vision Test. In addition, we have onboarded and continue to onboard new
suppliers, as well as enhance inventory planning and monitoring capabilities. We
believe these actions have positioned us favorably for now and the future, and
despite the ongoing impact of new COVID-19 variants in 2021, we saw a return to
growth with a 37.4% and 46.0% increase in net revenue in 2021 as compared to
2020 and 2019, respectively.

We also evolved our do-good efforts to maximize impact during the pandemic by
responding to the immediate needs of our longest-standing partner, VisionSpring,
to protect healthcare workers and slow COVID-19 transmission in high risk
communities where they work. Starting on April 1, 2020, for a portion of Warby
Parker glasses purchased, we worked with VisionSpring to distribute personal
protective equipment and prevention supplies to people in need. This temporary
pivot continued through the end of 2020 and into 2021, at which point our
partners were able to scale their distribution efforts again. Through our
support, VisionSpring provided over four million units of PPE and preventative
health supplies in 2021 and 2020.

The health and safety of our customers and employees remains our top priority,
and to that end we will continue to monitor developments related to the COVID-19
pandemic and adjust policies and operations as needed. The full extent to which
the COVID-19 pandemic will directly or indirectly impact our business,
operations, and financial condition will depend on future developments that are
highly uncertain and cannot be accurately predicted. Given the uncertainty, we
cannot estimate the financial impact of the pandemic on our future results of
operations, cash flows, or financial condition. For additional details, refer to
the risks described elsewhere in this Annual Report on Form 10-K, including
those described in Part I, Item 1A. "Risk Factors."

Components of operating results

Net income We mainly derive our income from the sale of eyewear products, optical services and accessories. We sell products and services through our retail stores, website and mobile applications. Revenues generated by eyewear products include

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the sales of prescription and non-prescription optical glasses and sunglasses,
contact lenses, eyewear accessories, and expedited shipping charges, which are
charged to the customer, associated with these purchases. Revenue is recognized
when the customer takes possession of the product, either at the point of
delivery or in-store pickup, and is recorded net of returns and discounts.
Revenue generated from services consist of both in-person eye exams in cases
where we directly employ the optometrist, and prescriptions issued through the
Virtual Vision Test app. Revenue is recognized when the service is rendered and
is recorded net of discounts.

Cost of Goods Sold
Cost of goods sold includes the costs incurred to acquire materials, assemble,
and sell our finished products. Such costs include (i) product costs held at the
lesser of cost and net realizable value, (ii) freight and import costs, (iii)
optical laboratory costs, (iv) customer shipping, (v) occupancy and depreciation
costs of retail stores, and (vi) employee-related costs associated with our
prescription services and optical laboratories, which includes salaries,
benefits, bonuses, and stock-based compensation. We expect our cost of goods
sold to fluctuate as a percentage of net revenue primarily due to product mix,
customer preferences and resulting demand, customer shipping costs, and
management of our inventory and merchandise mix. Cost of goods sold also may
change as we open or close retail stores because of the resulting change in
related occupancy and depreciation costs. Over time we expect our cost of goods
sold to increase with revenue due to an increased number of orders and with the
opening of new retail stores driven by the resulting occupancy and depreciation
costs and employee-related costs associated with prescription services offerings
at our retail stores.

Gross Profit and Gross Margin
We define gross profit as net revenues less cost of goods sold. Gross margin is
gross profit expressed as a percentage of net revenues. Our gross margin has
remained steady historically, but may fluctuate in the future based on a number
of factors, including the cost at which we can obtain, transport, and assemble
our inventory, the rate at which we open new retail stores, and how effective we
can be at controlling costs, in any given period.

Selling, General, and Administrative Expenses
Selling, general, and administrative expenses, or SG&A, primarily consist of
employee-related costs including salaries, benefits, bonuses, and stock-based
compensation for our corporate and retail employees, marketing, information
technology, credit card processing fees, donations in connection with our Buy a
Pair, Give a Pair program, facilities, legal, and other administrative costs
associated with operating the business. Marketing costs, which consist of both
online and offline advertising, include sponsored search, online advertising,
marketing and retail events, and other initiatives. SG&A also includes
administrative costs associated with our Home Try-On program, which provides
customers the opportunity to sample eyewear at home prior to purchase. We expect
SG&A to increase in absolute dollars over time and to fluctuate as a percentage
of revenue due to the anticipated growth of our business, increased marketing
investments, and changing prices of goods and services. SG&A is expensed in the
period in which it is incurred.

Interest and Other (Loss) Income, Net
Interest and other (loss) income, net, consists primarily of interest generated
from our cash and cash equivalents balances net of interest incurred on
borrowings and fees on our undrawn line of credit, and are recognized as
incurred. We expect our interest and other income costs to fluctuate based on
our future bank balances and credit line utilization.

Provision for Income Taxes
Provision for income taxes consists of income taxes related to foreign and
domestic federal and state jurisdictions in which we conduct business, adjusted
for allowable credits, deductions, and valuation allowance against deferred tax
assets.

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Results of Operations
The results of operations presented below should be reviewed in conjunction with
the consolidated financial statements and notes included elsewhere in this
Annual Report on Form 10-K. The following tables set forth our results of
operations for the periods presented in dollars and as a percentage of net
revenue:

                                                         Year Ended December 31,
                                                    2021           2020           2019
                                                              (in thousands)
Consolidated Statements of Operations Data:
Net revenue                                     $  540,798      $ 393,719      $ 370,463
Cost of goods sold                                 223,049        161,784        147,355
Gross profit                                       317,749        231,935        223,108

Selling, general and administrative expenses 461,410 287,567

224,771

Loss from operations                              (143,661)       (55,632)  

(1,663)

Interest and other (loss) income, net                 (347)           (97)  

1,939

(Loss) income before income taxes                 (144,008)       (55,729)           276
Provision for income taxes                             263            190            276
Net (loss) income                               $ (144,271)     $ (55,919)     $       -


                                                                          Year Ended December 31,
                                                           2021                     2020                     2019
                                                                              % of Net Revenue
Consolidated Statements of Operations Data:
Net revenue                                                   100.0  %                 100.0  %                 100.0  %
Cost of goods sold                                             41.2  %                  41.1  %                  39.8  %
Gross profit                                                   58.8  %                  58.9  %                  60.2  %
Selling, general, and administrative expenses                  85.3  %                  73.0  %                  60.7  %
Loss from operations                                          (26.5) %                 (14.1) %                  (0.4) %
Interest and other (loss) income, net                          (0.1) %                     -  %                   0.5  %
(Loss) income before income taxes                             (26.6) %                 (14.1) %                   0.1  %
Provision for income taxes                                        -  %                     -  %                   0.1  %
Net (loss) income                                             (26.6) %                 (14.1) %                     -  %

Comparison of the years ended December 31, 2021 and 2020

Net Revenue
                     Year Ended December 31,
                       2021               2020         $ Change       % Change
                         (in thousands)
Net revenue    $     540,798           $ 393,719      $ 147,079         37.4  %


Net revenue increased $147.1 million, or 37.4%, for the year ended December 31,
2021 compared to the same period in 2020. The increase in net revenue was
primarily driven by an increase in our Active Customer base to 2.20 million
customers, or a 21.7% increase, as well as an increase in AOV that elevated
average revenue per customer to $246, or a 12.8% increase. AOV increased
primarily due to a higher mix of purchases of glasses with progressive lenses
which increased our total average price per unit sold, while our average units
per order increased moderately year-over-year.

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Due to COVID-19, we temporarily closed our retail stores, which impacted our net revenues for the year ended December 31, 2020 and also caused a shift in purchases through our e-commerce channel.

Cost of Goods Sold, Gross Profit and Gross Margin

                         Year Ended December 31,
                          2021              2020         $ Change      % Change
                             (in thousands)
Cost of goods sold   $    223,049       $ 161,784       $ 61,265         37.9  %
Gross profit              317,749         231,935         85,814         37.0  %
Gross margin                 58.8  %         58.9  %                     (0.1) %


Cost of goods sold increased by $61.3 million, or 37.9%, for the year ended
December 31, 2021 compared to the same period in 2020, and increased as a
percentage of revenue over the same period by 10 basis points, from 41.1% of
revenue to 41.2% of revenue. The increase in cost of goods sold was primarily
driven by increased product and fulfillment costs associated with the growth in
net revenue, as well as an increase in store occupancy and depreciation expense
due to new retail stores opened in 2021 and a full-year of expense from new
retail stores opened throughout 2020.

Gross profit, calculated as net revenue less cost of goods sold, increased by
$85.8 million, or 37.0%, for the year ended December 31, 2021 compared to the
same period in 2020, primarily due to the increase in revenue in 2021 as
compared to 2020.

Gross margin, expressed as a percentage and calculated as gross profit divided
by net revenue, decreased by 10 basis points for the year ended December 31,
2021 compared to the same period in 2020. The decrease in gross margin was
primarily a result of the growth in our contact lens offering, which is sold at
a lower margin than our other eyewear, and a prior year benefit generated from
retroactive tariff refunds. These decreases were partially offset by the impact
of the temporary closure of our retail stores in the year ended December 31,
2020 due to COVID-19. During 2020, we continued to incur retail store occupancy
and depreciation costs while stores were closed which negatively impacted gross
margin in the prior year period.

Selling, general and administrative expenses

                                               Year Ended December 31,
                                              2021                 2020              $ Change               % Change
                                                   (in thousands)
Selling, general, and administrative
expenses                                 $    461,410          $  287,567          $  173,843                      60.5  %
As a percentage of net revenue                   85.3  %             73.0  %                                       12.3  %


Selling, general, and administrative expenses increased $173.8 million, or
60.5%, for the year ended December 31, 2021 compared to the same period in 2020.
This increase was primarily driven by a $64.5 million increase in stock-based
compensation charges and related employer payroll taxes, higher compensation
costs from growth in our workforce, increased marketing costs as we continued to
invest in performance marketing and our Home Try-On program, $28.3 million of
costs incurred with our Direct Listing, and charitable expenses of $7.8 million
for the donation of stock to the Warby Parker Foundation in August 2021. The
stock-based compensation charges incurred in 2021 primarily related to the
satisfaction of the performance based vesting condition for RSUs and PSUs in
connection with our Direct Listing. The same period in the prior year included
elevated stock-based compensation of $41.7 million primarily associated with the
sale of shares by employees to a third-party investor.

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Interest and Other Loss, Net
                                        Year Ended December 31,
                                      2021                      2020       $ Change       % Change
                                            (in thousands)
Interest and other loss, net     $      (347)                 $ (97)      $    (250)       257.7  %
As a percentage of net revenue          (0.1)  %                  -  %                      (0.1) %


Interest and other loss, net decreased by $0.3 million, or 257.7%, for the year
ended December 31, 2021 compared to the same period in 2020. This decrease was
primarily driven by fair value adjustments to outstanding warrants that were
exercised in 2021 and a reduction in interest income due to a lower interest
rate environment, partially offset by lower interest expense due to the
repayment of borrowings under the Credit Facility in August 2020.

Provision for Income Taxes
                                        Year Ended December 31,
                                      2021                      2020       $ Change      % Change
                                            (in thousands)
Provision for income taxes       $      263                   $ 190       $     73         38.4  %
As a percentage of net revenue            -   %                   -  %                        -  %


Provision for income taxes increased $0.1 million, or 38.4%, for the year ended
December 31, 2021 compared to the same period in 2020 primarily due to the
change in pre-tax loss in addition to the tax effects of nondeductible officers'
stock-based compensation expense.

Comparison of the years ended December 31, 2020 and 2019

Net Revenue
                     Year Ended December 31,
                       2020               2019         $ Change      % Change
                         (in thousands)
Net revenue    $     393,719           $ 370,463      $ 23,256          6.3  %


Net revenue increased $23.3 million, or 6.3%, for the year ended December 31,
2020 compared to the same period in 2019. This increase was driven by an
increase of 1.5% in Active Customers from 1.78 million in 2019 to 1.81 million
along with an increase in AOV as orders per Active Customer remained consistent
from 2019 to 2020. The increase in AOV was driven by a higher mix of purchases
of glasses with progressive lenses and with lens treatments (e.g.,
blue-light-filtering, light-responsive) which increased our total average price
per unit sold, while our average units per order remained consistent
year-over-year. Due to COVID-19, we temporarily closed our retail stores, which
impacted our net revenue for the year ended December 31, 2020 and also led to a
shift in purchases through our e-commerce channel.

Cost of Goods Sold, Gross Profit and Gross Margin

                         Year Ended December 31,
                          2020              2019         $ Change      % Change
                             (in thousands)
Cost of goods sold   $    161,784       $ 147,355       $ 14,429          9.8  %
Gross profit              231,935         223,108         88,274          4.0  %
Gross margin                 58.9  %         60.2  %                     (1.3) %


Cost of goods sold increased by $14.4 million, or 9.8%, for the year ended
December 31, 2020 compared to the same period in 2019, and increased as a
percentage of revenue over the same period by 130 basis points, from 39.8% of
revenue to 41.1% of revenue. The increase in cost of goods sold was primarily
driven by increased product and fulfillment costs associated with the growth in
net revenue, as well as an increase in store occupancy and depreciation

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expenses due to new retail stores opened in 2020 and a full year of expenses related to new retail stores opened throughout 2019.


Gross profit, calculated as net revenue less cost of goods sold, increased by
$8.8 million, or 4.0%, for the year ended December 31, 2020 compared to the same
period in 2019, primarily due to the increase in revenue in 2020 as compared to
2019.

Gross margin, expressed as a percentage and calculated as gross profit divided
by net revenue, decreased by 130 basis point for the year ended December 31,
2020 compared to the same period in 2019. The decrease in gross margin was
primarily a result of an increase in costs that are not directly driven by
products sold, including retail store occupancy and depreciation costs and
employee-related costs associated with our prescription services. During 2020,
we continued to incur retail store occupancy and depreciation costs while stores
were closed which negatively impacted gross margin in the prior year period.

Selling, general and administrative expenses

                                               Year Ended December 31,
                                              2020                 2019              $ Change               % Change
                                                   (in thousands)
Selling, general, and administrative
expenses                                 $    287,567          $  224,771          $   62,796                      27.9  %
As a percentage of net revenue                   73.0  %             60.7  %                                       12.3  %


Selling, general, and administrative expenses increased $62.8 million, or 27.9%,
for the year ended December 31, 2020 compared to the same period in 2019. This
increase was primarily driven by a $41.7 million stock-based compensation
charge, or 10.8% of net revenue, in connection with shares held by employees
that were sold to a third-party investor at the same time as our Series G
redeemable convertible preferred stock issuance. Excluding these costs, SG&A
expenses increased $21.1 million or 9.4%. The increase in SG&A as a percentage
of net revenue was primarily driven by an increase in marketing and Home Try-On
costs to support and capitalize on increased demand for at-home shopping due to
the impact of the COVID-19 pandemic. This increase as a percentage of net
revenue was partially offset by a reduction in general corporate overhead
expenses as a percentage of revenue.

Interest and other (loss) income, net

                                            Year Ended December 31,
                                           2020                 2019              $ Change               % Change
                                                (in thousands)

Interest and other (loss) income, net ($97) $1,939

     $   (2,036)                   (105.0) %
As a percentage of net revenue                  -   %              0.5  %                                       (0.5) %


Interest and other (loss) income, net decreased by $2.0 million, or 105.0%, for
the year ended December 31, 2020 compared to the same period in 2019. This
decrease was primarily driven by a reduction in interest income due to a lower
interest rate environment, interest expense on borrowings under the Credit
Facility, and the timing and amounts of cash balances.

Provision for Income Taxes
                                        Year Ended December 31,
                                      2020                      2019       $ Change       % Change
                                            (in thousands)
Provision for income taxes       $      190                   $ 276       $     (86)        31.2  %
As a percentage of net revenue            -   %                 0.1  %                      (0.1) %


Provision for income taxes decreased $0.1 millionor 31.2%, for the year ended
December 31, 2020 compared to the same period in 2019, mainly due to a reduction in state taxes.

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Liquidity and Capital Resources
Since inception, we have financed our operations primarily from net proceeds
from the sale of redeemable convertible preferred stock and cash flows from
operating activities. As of December 31, 2021, we had cash and cash equivalents
of $256.4 million, which was primarily held for working capital purposes, and an
accumulated deficit of $493.2 million.

We expect that operating losses could continue in the foreseeable future as we
continue to invest in the expansion of our business and sales and marketing
activities. We believe our existing cash and cash equivalents, funds available
under our existing credit facility, and cash flows from operating activities
will be sufficient to fund our operations for at least the next 12 months.

However, our future capital requirements will depend on many factors, including,
but not limited to, growth in the number of retail stores, the needs of our
optical laboratories and distribution network, expansion of our product
offerings or service capabilities, and the timing of investments in technology
and personnel to support the overall growth in our business. To the extent that
current and anticipated future sources of liquidity are insufficient to fund our
future business activities and requirements, we may be required to seek
additional equity or debt financing. The sale of additional equity would result
in additional dilution to our stockholders. The incurrence of debt financing
would result in debt service obligations and the instruments governing such debt
could provide for operating and financing covenants that would restrict our
operations. There can be no assurances that we will be able to raise additional
capital. In the event that additional financing is required from outside
sources, we may not be able to negotiate terms acceptable to us or at all. In
particular, the recent COVID-19 pandemic has caused disruption in the global
financial markets, which could reduce our ability to access capital and
negatively affect our liquidity in the future. If we are unable to raise
additional capital when required, or if we cannot expand our operations or
otherwise capitalize on our business opportunities because we lack sufficient
capital, our business, results of operations, financial condition, and cash
flows would be adversely affected.

Credit Facility
In August 2013, we entered into the Loan and Security Agreement with Comerica
Bank, or the Credit Facility, as amended, that consists of a revolving credit
line of up to $50.0 million. The revolving credit line has a sub-limit of up to
$15.0 million for the issuance of letters of credit. Borrowings under the
revolving credit line bear interest on the principal amount outstanding at a
variable interest rate based on either LIBOR or the bank's prime rate (as
defined in the credit agreement), with no additional margin. We are charged fees
on the uncommitted portion of the credit line of approximately 0.2% as long as
total borrowings remain less than $15.0 million.

In February and March 2020we borrowed a total of $30.9 million under the credit facility, which was fully repaid in August 2020.


There were no other borrowings outstanding under the Credit Facility other than
letters of credit of $4.0 million and $3.7 million as of December 31, 2021 and
2020, respectively. We enter into standby letters of credit to secure certain
leases in lieu of a cash security deposit.

Cash Flows
The following table summarizes our cash flows for the periods presented:

                                                                Year Ended December 31,
                                                          2021           2020           2019
                                                                    (in thousands)

Net cash (used in) provided by operating activities ($31,994) $32,758 $21,394
Net cash used in investing activities

                    (48,513)       (20,070)       (32,632)
Net cash provided by (used in) financing activities       22,999        245,936        (83,362)
Effect of exchange rates on cash                            (161)            37            237

(Decrease) net increase in cash and cash equivalents ($57,669) $258,661 ($94,363)

Cash flow from operating activities Net cash used in operating activities was $32.0 million for the year ended
December 31, 2021consisting of a net loss of $144.3 millionadjusted for
$136.8 million non-cash expenses and $24.5 million net cash used as a result of

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changes in operating assets and liabilities. Net loss includes $28.3 million of
costs related to the Direct Listing. The non-cash charges included $107.1
million of stock-based compensation, $21.9 million of depreciation and
amortization, and $7.8 million of non-cash charitable contributions. The changes
in operating assets and liabilities were primarily driven by an increase in net
inventory to support the growth of our business and prepaid expenses and other
assets, decreases in accounts payable, deferred revenue, partially offset by
increases in accrued expenses and deferred rent.

Net cash provided by operating activities was $32.8 million for the year ended
December 31, 2020, consisting of a net loss of $55.9 million, adjusted for $63.3
million of non-cash expenses and $25.4 million of net cash provided as a result
of changes in operating assets and liabilities. The non-cash charges included
$44.9 million of stock-based compensation and $18.4 million of depreciation and
amortization. The changes in operating assets and liabilities were primarily
driven by an increase in accrued expenses, accounts payable, deferred revenue,
and deferred rent, partially offset by an increase in net inventory to support
the growth of our business.

Net cash provided by operating activities was $21.4 million for the year ended
December 31, 2019, consisting of break-even net income, adjusted for $23.0
million of non-cash expenses and $1.6 million of net cash used as a result of
changes in operating assets and liabilities. The non-cash charges included $14.5
million of depreciation and amortization and $8.5 million of stock-based
compensation. The changes in operating assets and liabilities were primarily
driven by an increase in accounts payable, deferred rent, deferred revenue, and
accrued expenses, partially offset by an increase in net inventory to support
the growth of our business.

Cash Flows from Investing Activities
For the year ended December 31, 2021, net cash used in investing activities was
$48.5 million related to purchases of property and equipment to support our
growth, primarily related to the build-out of new retail stores, as well as
investments in our supply chain infrastructure and capitalized software
development costs.

For the year ended December 31, 2020, net cash used in investing activities was
$20.1 million related to purchases of property and equipment to support our
growth, primarily related to the build-out of new retail stores, as well as
investments in our corporate facilities and capitalized software development
costs.

For the year ended December 31, 2019the net cash used in investing activities was
$32.6 million related to purchases of property, plant and equipment to support our growth, primarily related to the construction of new retail stores, as well as investments in capitalized software development costs.


Cash Flows from Financing Activities
For the year ended December 31, 2021, net cash provided by financing activities
was $23.0 million, which was primarily related to proceeds from repayments of
related party loans and proceeds from stock option exercises, partially offset
by repurchases of stock during the period, including shares repurchased in
connection with our Tender Offer and tax withholdings on exercises and releases
of employee equity awards.

For the year ended December 31, 2020, net cash provided by financing activities
was $245.9 million, which was primarily related to $243.6 million of net
proceeds from our Series F and Series G redeemable convertible preferred stock
issuances.

For the year ended December 31, 2019, net cash used in financing activities was
$83.4 million, which was primarily related to $79.5 million of stock repurchases
made during the year.

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Contractual Obligations and Commitments
The following table summarizes our contractual obligations and commitments as of
December 31, 2021:

                                                                       Payments Due by Period
                                                     Less than 1                                                       More than 5
                                    Total               year              1 to 3 years           3 to 5 years             years
                                                                           (in thousands)
Operating leases                 $ 173,341          $   28,520          $      61,409          $      44,280          $   39,132
Total                            $ 173,341          $  173,341          $     173,341          $     173,341          $  173,341

For more information about our operating lease obligations, see Note 9. “Commitments and Contingencies” in our consolidated financial statements included in Part II, Item 8 of this Form 10-K. After December 31, 2021we entered into 7 operating leases and extended the terms of 2 existing operating leases for commercial space in the we and Canada. Total commitments under the new agreements are approximately $4.8 million.


Recent Accounting Pronouncements
See Note 2 to our consolidated financial statements included elsewhere in this
Form 10-K for a description of recently adopted accounting pronouncements and
recently issued accounting pronouncements not yet adopted.

Critical Accounting Policies and Estimates
Management's discussion and analysis of our financial condition and results of
operations is based on our consolidated financial statements, which have been
prepared in accordance with GAAP. The preparation of our financial statements
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements, as well as
the reported revenue generated and expenses incurred during the reporting
periods, as well as related disclosures. Our estimates are based on our
historical experience and on various other factors that we believe are
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities and the
amount of revenue and expenses that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions, and any such differences may be material. We believe that the
accounting policies discussed below are critical to understanding our historical
and future performance, as these policies relate to the more significant areas
involving management's judgments and estimates.

Inventory

Inventory is stated at the lower of cost or net realizable value, with cost
determined on a weighted average cost basis. We continuously evaluate the
composition of our inventory and make adjustments when the cost of inventory is
not expected to be fully recoverable. The estimated net realizable value of
inventory is determined based on an analysis of historical sales trends, the
impact of market trends and economic conditions, and a forecast of future
demand. Adjustments for damaged inventory are recorded primarily based on actual
damaged inventory. Adjustments for inventory shrink, representing the physical
loss of inventory, are estimated based on historical experience and are adjusted
based upon physical inventory counts. Actual results may differ from estimates
due to the quantity and mix of products in inventory, consumer preferences, and
economic and market conditions. Our historical estimates of these costs and the
related provisions have not differed materially from actual results. However,
unforeseen adverse future economic and market conditions, such as those
resulting from disease pandemics and other catastrophic events, could result in
our actual results differing materially from our estimates.

Stock-Based Compensation
We recognize compensation expense for stock-based awards based on the grant date
fair value, on a straight-line basis over the requisite service period of the
awards, which is generally the vesting term of the outstanding stock awards.
Compensation expense for performance awards is recognized when it is determined
that it is probable that the vesting conditions will be satisfied.

We estimate the fair value of options on the date of grant using the
Black-Scholes option-pricing model, which utilizes assumptions subject to
management estimate. These assumptions include estimating the expected term, or
the length of time employees will retain their vested stock options before
exercising them, the estimated volatility of our common stock price over the
expected term, the fair value of our stock, the risk-free interest rate, and the
expected dividend

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yield. Changes in these assumptions can have a significant impact on the estimate of the fair value of stock-based compensation. We track forfeitures as they occur.

The following range of assumptions were used for options granted during the year ended December 31, 2021 (no options were granted in 2020):


                            For the year ended December 31, 2021
Risk-free interest rates                               0.1 - 0.6%
Expected dividend yield                                      -
Expected term                                   0.25 - 6.25 years
Volatility                                                  60  %


Risk-free interest rates: The risk-free interest rates were estimated based on
the yield curve in effect at the time of grant for zero-coupon U.S. Treasury
notes with terms consistent with the expected term of the option awards.

Expected Dividend Yield: The expected dividend yield is nil as we have never declared or paid cash dividends and do not intend to do so in the foreseeable future.


Expected term: The expected term is calculated using the simplified method using
the vesting term of four years and the contractual term of ten years, resulting
in a holding period of 6.25 years. Stock options expire ten years from the date
of the grant.

Volatility: As we do not have sufficient trading history of our common stock,
the volatility rate for the year ended December 31, 2021 was determined based on
an analysis of comparable public company historical volatilities adjusted based
on our stage of development. We intend to continue utilizing similar comparable
companies to estimate volatility until sufficient historical information as to
the volatility of our Class A common stock is available.

The majority of RSUs issued by the Company prior to the Direct Listing vest upon
the satisfaction of both a service and a performance condition. The
service-based vesting condition is satisfied so long as the participant remains
in service and employed by the Company as of each of the vesting dates. The
performance condition was satisfied upon the Company's Direct Listing on
September 29, 2021, and 936,646 RSUs for which the service condition had
previously been satisfied vested and were released to holders. RSUs granted
subsequent to the Direct Listing vest upon the satisfaction of a service based
vesting condition only. The Company will deliver one share of either Class A or
Class B common stock, depending on the terms of the grant, for each vested RSU.

We had concluded that as of December 31, 2020 it was not probable that the
liquidity-event performance-based vesting condition would occur, and therefore
did not record any stock-based compensation expense for any RSUs. Upon our
Direct Listing the liquidity-event performance-based condition was satisfied and
we recorded a cumulative catch-up expense for the service period completed to
such date and began recording stock-based compensation expense using the
accelerated attribution method, net of actual forfeitures, based on the
grant-date fair value of the RSUs for awards where the service period is not
complete. Stock-based compensation expense for RSUs granted after our Direct
Listing is recognized using the straight-line method, net of actual forfeitures.

Common Stock Valuations
Prior to our Direct Listing our common stock was not publicly traded. Our board
of directors exercised significant judgment in determining the fair value of our
common stock on the date of each stock-based grant, with input from management,
based on several objective and subjective factors. In determining the fair value
of our common stock, our board of directors considered the prices of our
redeemable convertible preferred stock sold to outside investors in arms-length
transactions; the rights, preferences, and privileges of our redeemable
convertible preferred stock relative to our common stock; our operating and
financial performance; our stage of development and current business conditions
and projections affecting our business. Such conditions and projections included
the introduction of new products and services; the likelihood of achieving a
liquidity event for the shares of common stock underlying these stock options,
such as a qualified public offering or sale of our company, in light of
prevailing market conditions; any adjustment necessary to recognize a lack of a
liquid trading market for our common stock; the market performance of

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comparable publicly traded companies; and the overall U.S. economic, regulatory,
and capital market conditions. In addition, we also considered any secondary
transactions involving our common stock. In our evaluation of those
transactions, we considered the facts and circumstances of each transaction to
determine the extent to which they represented a fair value exchange. Factors
considered include transaction volume, timing, whether the transactions occurred
among willing and unrelated parties, and whether the transactions involved
investors with access to our financial information.

In valuing our common stock, we first determined the equity value using both the
income and market approach valuation methods. In addition, we also considered
values implied by sales of redeemable convertible preferred and common stock, if
applicable. We then allocated the equity value to our classes of stock using an
option-pricing model, or OPM, or Probability Weighted Expected Return Method, or
PWERM.

The income approach estimates equity value based on the expectation of future
cash flows that a company will generate. These future cash flows, and an assumed
terminal value, are discounted to their present values using a discount rate
based on a weighted-average cost of capital that reflects the risks inherent in
the cash flows. The market approach estimates equity value based on a comparison
of the subject company to comparable public companies in a similar line of
business. From the comparable companies, a representative market value multiple
is determined and then applied to the subject company's financial forecasts to
estimate the value of the subject company.

Once we determined an equity value, we used a combination of approaches to
allocate the equity value to each of our classes of stock. We historically had
used the OPM, and more recently used the OPM in combination with the PWERM. The
OPM allocated values to each equity class by creating a series of call options
on our equity value, with exercise prices based on the liquidation preferences,
participation rights, and strike prices of the equity instruments. Using the
PWERM, the value of our common stock was estimated based upon a
probability-weighted analysis of varying values for our common stock assuming
possible future events, which included an initial public offering, merger or
sale, dissolution, or continued operation as a private company. In determining
the estimated fair value of our common stock, we considered the fact that our
stockholders could not freely trade our common stock in the public markets.
Accordingly, we also applied a lack of marketability discount to the equity
value.

Following our Direct Listing, it is not necessary to estimate the fair value of
our common stock, as the shares are traded in the public market, and the fair
value of our common stock is based on the closing price as reported by the NYSE.

Income Taxes
Management makes estimates, assumptions, and judgments to determine our
provision for income taxes, deferred tax assets and liabilities, and any
valuation allowance recorded against deferred tax assets. We utilize the asset
and liability method of accounting for income taxes. Deferred income taxes
reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes, as well as operating loss, capital loss,
and tax credit carryforwards. Valuation allowances are established against
deferred tax assets if it is more likely than not that they will not be
realized.

Our policy is to recognize interest expense and penalties, if any, related to unrecognized tax benefits as a component of income tax expense.


JOBS Act
We currently qualify as an "emerging growth company" under the Jumpstart Our
Business Startups Act of 2012, or the JOBS Act. Accordingly, we are provided the
option to adopt new or revised accounting guidance either (i) within the same
periods as those otherwise applicable to non-emerging growth companies or (ii)
within the same time periods as private companies. We have elected to adopt new
or revised accounting guidance within the same time period as private companies,
unless management determines it is preferable to take advantage of early
adoption provisions offered within the applicable guidance. Our utilization of
these transition periods may make it difficult to compare our financial
statements to those of non-emerging growth companies and other emerging growth
companies that have opted out of the transition periods afforded under the JOBS
Act.

© Edgar Online, source Previews

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3 safe dividend stocks to buy as recession risk rises https://eventplaner.net/3-safe-dividend-stocks-to-buy-as-recession-risk-rises/ Tue, 15 Mar 2022 18:04:00 +0000 https://eventplaner.net/3-safe-dividend-stocks-to-buy-as-recession-risk-rises/

The year has not been easy for stock market investors. Since the start of 2022, tighter central bank policy and the raging war between Russia and Ukraine have provided strong headwinds to the global economy, putting pressure on the 13-year-old bull run. years for US stocks.

While cutting its outlook for U.S. economic growth last week, Goldman Sachs said the likelihood of a recession next year could rise to 35% amid soaring prices and fallout from war in Ukraine. . Bank of America said the risk of an economic slowdown is low for now but higher next year.

In this highly uncertain environment, choosing the right stocks for your retirement portfolio is not easy, especially when a marked slowdown in economic growth is looming. However, a proven strategy that many retirees have relied on to secure growing income is to buy quality dividend-paying growth stocks.

Companies that increase their cash payouts quarter after quarter demonstrate that they can generate stable and reliable income for investors, not only during good times, but also during downturns and recessions.

Dividend growth stocks can also be a great way to fight inflation. The shares of these companies, unlike bonds which pay a fixed principal in addition to interest payments, provide a regular wage increase to stakeholders, in the form of increased dividends to increase purchasing power.

Below, we’ve listed three stocks for earning ever-growing income.

1. Texas Instruments

  • 5-year average dividend growth: 21%
  • Dividend yield: 2.76%
  • Payout rate: 50%

Texas Instruments (NASDAQ:) manufactures electronics, including microchips vital to many diverse industries. Its long-standing, consolidated market position and strong dividend history make it a reliable name to include in your retirement portfolio. The stock closed Monday at $166.72.

TXN Weekly Chart

The Dallas-based chip giant is the largest producer of analog and embedded processing chips, which go into everything from household gadgets to space hardware. TI has the widest reach in the industry, making its revenue base very diverse. This means the company could weather an economic downturn better than its peers.

But the biggest attraction for long-term investors is the company’s dividend program, which increases every year. With an annual dividend yield of around 3%, TI currently pays $1.15 per share per quarter, which has grown 21% per year over the past five years.

With a payout ratio of over 50%, TI is in a comfortable position to further increase its dividend in the near future. Additionally, the company’s long-term growth prospects are promising given the number of electronic devices being added to cars and machinery. Additionally, the company posted a strong performance in January.

2. CN Railway

  • Average dividend growth over 5 years: 11%
  • Dividend yield: 1.85%
  • Payout rate: 35%

Another important investment for dividend income growth is Canada’s largest railroad, Canadian National Railways (NYSE:). Because this rail operator benefits from a unique competitive advantage within the North American economy, CNI is particularly attractive. Shares closed Monday at $123.50.

CNI Weekly Chart

Montreal-based CN transports more than C$250 billion ($195 billion) worth of goods annually, ranging from petroleum energy products to consumer goods, on an approximately 20,000-mile rail network that stretches from Canada in the middle of America, connecting the Atlantic, the Pacific and the Gulf of Mexico. This wide economic moat makes CNR a safer bet in the long term.

Strong demand for commodities such as metals, lumber and oil helped CN post profits in 2021, nearly double a year ago when the COVID-19 pandemic took hold .

CN Rail pays $0.73 per share per quarter, which has increased by about 11%, on average, per year, over the past five years. The company also posted better than expected results in January.

3.Starbucks

  • Average dividend growth over 5 years: 18%
  • Dividend yield: 2.47%
  • Payout rate: 50%

Shares of global food companies can provide a safe haven for long-term investors during a market downturn. Their low-cost meal options, global footprint and stable earnings are some of the strengths that shield them from the extreme volatility that can plague high-flying growth stocks during uncertain times.

Global coffee chain Starbucks (NASDAQ:) is one such income-generating stock we recommend. It closed at $79.29 on Monday.

SBUX Weekly Chart

Shares of the Seattle-based specialty food and coffee supplier are currently under selling pressure, due to rising costs and the still challenging operating environment in China, the company’s second largest market where the local government is still imposing containment measures to prevent COVID infections.

But this bearish period, in our view, is a good buying opportunity, offering investors the opportunity to take a stake in a company that has strong long-term growth prospects and an excellent dividend record. The company’s strategy of keeping prices low to gain market share is the right one because it can pay off in the long run. SBUX sales in North America remain strong, and it’s only a matter of time before they pick up in China as well.

Although the company fell short of expectations last quarter, earnings remain strong.

Another reason to own Starbucks: management’s focus on returning more money to shareholders in the form of dividends. The stock currently pays a quarterly dividend of $0.49 per share, which translates to an annual yield of approximately 2.47%. His payment has increased by about 18% per year for the past five years.

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She-Cession Recession: The Outsized Impact of COVID-19 on Women in the Labor Market https://eventplaner.net/she-cession-recession-the-outsized-impact-of-covid-19-on-women-in-the-labor-market/ Fri, 04 Mar 2022 23:45:50 +0000 https://eventplaner.net/she-cession-recession-the-outsized-impact-of-covid-19-on-women-in-the-labor-market/

Early childhood teacher Imogen Held has witnessed the impact of the pandemic on her female colleagues who have had to take unpaid leave to care for their sick children.

“How is this not hurting teachers when all they can think about is ‘how am I going to pay my bills? ‘” Held told Newshub Nation.

“How am I going to cover expenses, how am I going to put food on the table for my family? And then they go to work, trying to be the best teacher they can be. Yet, in the back of their minds, they’re wondering, “What if I get COVID? How am I going to make things work?”

In her research on the impact of the pandemic on women, Dr. Holly Thorpe found that for many heterosexual couples, the decision to cut back on work is a financial decision.

“When families have to make these tough decisions, it often depends on who brings in the biggest income and the gender pay gap that exists,” says Dr Thorpe.

“This means that it is often men’s jobs and professions that have been prioritized in these decisions.”

Women are also the most likely to lose their jobs, as seen during the first national lockdown.

In the June quarter of 2020, 90% of the 11,000 New Zealanders who lost their jobs due to COVID-19 were women.

“We actually saw women’s employment being hit harder because they were employed in sectors like services and hospitality,” says ANZ Chief Economist Sharon Zollner.

She says after this decline in employment in 2020, employment has returned to record highs, but now with COVID in every community, women will likely be affected again.

“The sectors that are suffering are sectors like the hotel industry, where young people and women are overrepresented.

“I think there may still be a job security issue there.”

For some women this will be particularly acute, with Pakeha women experiencing less impact than Maori women or women with disabilities.

“The pandemic is having a gendered effect, but it also intersects with these other important aspects of people’s lives,” says Dr Thorpe.

“The effects are not felt equally by all women, and some groups are much more affected than others.”

The pandemic has also created an economic climate of inflation that could intensify the gender pay gap. The cost of living is rising, but salaries are not matching it.

“How quickly you get out of this situation and get a fair deal will to some extent depend on how proactively you ask for a raise,” Zollner says.

“Evidence suggests that men are somewhat better than women who wait to be told what they are worth to some extent.”

Women are more likely than men to take on the unpaid work of caring for friends and family, dropping off groceries and planning meals in isolation during outbreaks.

“Women definitely get a lot of emotional work done,” says Dr. Thorpe.

“They have to make decisions, day-to-day decisions, about risk calculations for their families, for themselves, for their children.”

The government knows that women are being hit hard by the COVID pandemic.

The Ministry for Women warns that “existing inequalities such as the gender pay gap and occupational segregation…mean that women are more susceptible to economic hardship and less resilient to the economic impacts of COVID-19.”

However, Finance Minister Grant Robertson’s major economic stimulus fund, the Shovel Ready Fund, has gone to male-dominated infrastructure projects.

“I think the targeted industries were really important because it was to get the economy going again,” said Minister for Women Jan Tinetti.

The OECD urges governments to pursue targeted policies to close gender gaps and level the playing field.

Targeted funding for women has been minimal for women in New Zealand, but Tinetti insists change is coming.

“One of the areas we’re doing more research on is compensation,” she says.

“Transparency is one example. We know that pay negotiations can sometimes be difficult for women, so we are really interested in pay transparency.

“We’re also looking at the barriers to putting women in this precarious nature of the work they do. And so an example of that is childcare.”

The pandemic is also creating a job shortage due to those caring or self-isolating and a lack of immigration which could be a silver lining for women.

“Potentially, the labor shortages we’ve seen also mean that women have the opportunity, perhaps to take on more roles where they haven’t had the traditional experience that employers might find necessary. “says Zollner.

“It’s a real plus, but it’s not going to abruptly change attitudes and change gender roles.”

It would take a bigger upheaval than a global pandemic.”

Watch Newshub Nation Saturday at 9:30 a.m. and Sunday at 10 a.m. on TV3 and follow us on Facebook and Twitter. Newshub Nation is supported by NZ On Air.

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DOMA HOLDINGS, INC. – 10-K – Management report and analysis of the financial situation and operating results https://eventplaner.net/doma-holdings-inc-10-k-management-report-and-analysis-of-the-financial-situation-and-operating-results/ Fri, 04 Mar 2022 22:00:40 +0000 https://eventplaner.net/doma-holdings-inc-10-k-management-report-and-analysis-of-the-financial-situation-and-operating-results/
The following discussion and analysis of the financial condition and results of
operations of Doma should be read together with the audited consolidated
financial statements as of December 31, 2021 and 2020 and for the years ended
December 31, 2021, 2020, and 2019 together with the related notes thereto,
contained in this Annual Report on Form 10-K (this "Annual Report").
Management's Discussion and Analysis of Financial Condition and Results of
Operations generally includes tables with 2 year financial performance,
accompanied by narrative for 2021. For further discussion of prior period
financial results, please refer to our Registration Statement on Form S-1 (No.
333-258942), as amended, filed with the SEC on September 3, 2021 and declared
effective on September 8, 2021. This discussion may contain forward-looking
statements based upon current expectations that involve risks and uncertainties
and should be read in conjunction with the disclosures and information contained
in "Cautionary Note Regarding Forward-Looking Statements" in this Annual Report.
Our actual results may differ materially from those projected in these
forward-looking statements as a result of various factors, including those set
forth under Part I, Item 1A "Risk Factors" or in other parts of this Annual
Report. Certain amounts may not foot due to rounding. All forward-looking
statements in this Annual Report are based on information available to us as of
the date hereof, and we assume no obligation to update any such forward-looking
statements to reflect future events or circumstances, except as required by law.

Unless the context otherwise requires, references to "company," "Company,"
"Doma," "we," "us," "our" and similar terms refer to Doma Holdings, Inc. (f/k/a
Capitol Investment Corp. V) and its consolidated subsidiaries. References to
"Capitol" refer to our predecessor company prior to the consummation of the
Business Combination. References to "Old Doma" refer to Old Doma prior to the
Business Combination and to States Title Holding, Inc. ("States Title"), the
wholly owned subsidiary of Doma, upon the consummation of the Business
Combination.

Our business model

Today, we primarily create, underwrite and provide title, escrow and
settlement services for the two most common types of transactions in the
residential real estate market: purchase and refinancing operations. We operate
and report on our activity through two complementary reporting segments,
Distribution and subscription. See “-Presentation Base” below.

Our Distribution segment reflects the sale of our products and services, other
than underwriting and insurance services reflected in our Underwriting segment,
that we provide through our captive title agents and agencies ("Direct Agents").
We market our products and services through two channels to appeal to our
referral partners and ultimately reach our customers, the individuals purchasing
a new home or refinancing their existing mortgage:

•Doma Enterprise - we target partnerships with national lenders and mortgage
originators that maintain centralized lending operations. Once a partnership has
been established, we integrate our Doma Intelligence platform with the partner's
production systems, to enable frictionless order origination and fulfillment.
Substantially all Doma Enterprise orders are underwritten by Doma.

•Local Markets ("Local") - we target partnerships with realtors, attorneys and
non-centralized loan originators via a 103-branch footprint across ten states as
of December 31, 2021. For the year ended December 31, 2021, approximately 90% of
our lender and owner policies from our Local channel were underwritten by Doma,
while the remaining share was underwritten by third-party underwriters.

Our Underwriting segment reflects the sale of our underwriting and insurance
services. These services are integrated with our Direct Agents channel and other
non-captive title and escrow agents in the market ("Third-Party Agents") through
our captive title insurance carrier. For customers sourced through the
Third-Party Agents channel, we retain a portion of the title premium
(approximately 16%) in exchange for underwriting risk to our balance sheet. The
Third-Party Agents channel includes the title underwriting and insurance
services we provide to Lennar, a related party, for its home builder
transactions.

The financial results of our Direct Agents channel impact both our Distribution
and Underwriting reporting segments, whereas the results from the Third-Party
Agents channel impact only the Underwriting reporting segment.

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Our expenses generally consist of direct fulfillment expenses related to closing
a transaction and insuring the risk, customer acquisition costs related to
acquiring new business, and other operating expenses as described below:

•Direct fulfillment expenses - comprised of direct labor and direct non-labor
expenses. Direct labor expenses refer to payroll costs associated with employees
who directly contribute to the opening and closing of an order. Some examples of
direct labor expenses include title and escrow services, closing services, and
customer service. Direct non-labor expenses refer to non-payroll expenses that
are closely linked with order volume, such as provision for claims, title
examination expense, office supplies, and premium and other related taxes.

•Customer acquisition costs - this category is comprised of sales payroll, sales
commissions, customer success payroll, sales-related travel and entertainment,
and an allocated portion of corporate marketing.

•Other operating expenses - all other expenses that do not directly contribute
to the fulfillment or acquisition of an order or policy are considered other
operating expenses. This category is predominately comprised of research and
development costs, corporate support expenses, occupancy, and other general and
administrative expenses.

We expect to continue to invest in our Doma Intelligence platform as well as
organic and inorganic growth opportunities in order to remain competitive with
existing large-scale industry incumbents who are well financed and have
significant resources to defend their existing market positions. Over time, we
plan to use our cash flows to invest in customer acquisition, research and
development, and new product offerings, to further improve revenue growth and
accelerate the elimination of the friction and expense of closing a residential
real estate transaction.

Basis of Presentation

We present the results of our two operating segments:

•Distribution - our Distribution segment reflects our Direct Agents operations
of acquiring customer orders and providing title and escrow services for real
estate closing transactions. We acquire customers through our Local and Doma
Enterprise customer referral channels.

•Underwriting - our Underwriting segment reflects the results of our title
insurance underwriting business, including policies referred through our Direct
Agents and Third-Party Agents channels. The referring agents retain
approximately 84% of the policy premiums in exchange for their services. The
retention rate varies by state and agent.

Costs are allocated to the segments to arrive at adjusted gross profit, our
segment measure of profit and loss. Our accounting policies for segments are the
same as those applied to our consolidated financial statements, except as
described below under "-Key Components of Revenues and Expenses." Inter-segment
revenues and expenses are eliminated in consolidation. See Note 7 in our
consolidated financial statements for a summary of our segment results and a
reconciliation between segment adjusted gross profit and our consolidated loss
before income taxes.

Important events and transactions

Business combination

On the Closing Date, Capitol consummated the Business Combination with Old Doma,
pursuant to the Agreement. In connection with the closing of the Business
Combination, Old Doma changed its name to States Title Holding, Inc., Capitol
changed its name to Doma Holdings, Inc. ("Doma") and Old Doma became a wholly
owned subsidiary of Doma. Doma continues the existing business operations of Old
Doma as a publicly traded company. Refer to Note 3 to the consolidated financial
statements for additional details on the Business Combination.

As a result of the Business Combination, we became the operating successor to an
SEC-registered and New York Stock Exchange-listed shell company. Becoming public
has required us to hire additional personnel and implement procedures and
processes to address public company regulatory requirements and practices. Also,
we

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have incurred additional annual expenses as a public company for, among other
things, directors' and officers' liability insurance, director fees, and
additional internal and external accounting, legal, and administrative
resources.

Impact of COVID-19 and other macroeconomic trends

On March 11, 2020, the World Health Organization declared COVID-19, the disease
caused by the novel coronavirus, a pandemic. COVID-19 has resulted in
significant macroeconomic impacts and market disruptions, particularly as
federal, state, and local governments enacted emergency measures intended to
combat the spread of the virus, including shelter-in-place orders, travel
limitations, quarantine periods and social distancing. In response, we took
appropriate measures to ensure the health and safety of our employees, customers
and partners, including work-from-home policies. Depending on the location and
timing, some of these measures still remain in place today.

We operate in the real estate industry and our business volumes are directly
impacted by market trends for mortgage refinancing transactions, existing real
estate purchase transactions, and new real estate purchase transactions,
particularly in the residential segment of the market. Responses to the COVID-19
pandemic initially led to a material decline in purchase transactions.
Subsequent U.S. federal stimulus measures, including interest rate reductions by
the Federal Reserve, and local regulatory initiatives, such as permitting remote
notarization, led to a quick recovery for the real estate industry and resulted
in an increase in mortgage refinancing and purchase volumes, which we believe
benefited our business model. These initiatives have also led to a greater
demand for homes, higher home prices, and record low home inventories. While
real estate transactions have largely returned to or exceeded pre-pandemic
levels, we continue to monitor economic and regulatory developments closely as
we navigate the volatility and uncertainty created by the pandemic.

Demand for mortgages tends to correlate closely with changes in interest rates,
meaning that our order trends are likely to be impacted by future changes in
interest rates. However, we believe that our current, low market share and
disruptive approach to title insurance, escrow, and closing services will enable
us to gain market share, which in turn should mitigate the risk to our revenue
growth trends relative to industry incumbents.

The acquisition of the North American title

At January 7, 2019we acquired from Lennar Corporation (“Lennar”) its
subsidiary company, North American Title Insurance Companywho used his title
insurance underwriting company and its third party title insurance agency
business, which operated under its North American Title Company brand
(collectively, the “Acquired Business”), for the aggregate of shares and deferred cash
consideration of $171.7 million (the “Acquisition of North American Securities”),
including $87.0 million in the form of a seller’s financing note.

The North American Title Acquisition provided us with insurance licenses and an
agency network across the United States, as well as a substantial data set to
accelerate our machine intelligence technology. This acquisition marked a
significant milestone for Doma in achieving national scale and licensure in
pursuit of our long-term growth strategy. Whereas we generated minimal revenue
prior to the North American Title Acquisition, following its consummation we
began to operate our business with a broad distribution footprint and data that
enabled us to accelerate the rollout of our Doma Intelligence platform. The
North American Title Acquisition also resulted in our recording of $111.5
million in goodwill and $61.4 million in acquired marketable securities.

Since the North American Title Acquisition, we have implemented several
initiatives to integrate and realign the operations of the Acquired Business.
This includes transforming the Acquired Business's retail agency operations by
streamlining our physical branch footprint, consolidating branch back office
functions into a common corporate operation, and implementing a common
production platform across all our branches. We continue to invest in the
development and rollout of the Doma Intelligence platform across our Local
branch footprint. We expect to realize significant cost savings over time as
manual processes are replaced with our proprietary machine learning platform and
data science-driven approach to title and closing services. The benefits of this
effort, particularly on margin growth, are likely to be realized gradually in
future reporting periods. As a result, our recent results of operations,
including for the years ended December 31, 2021, 2020, and 2019 may not be
indicative of our results for future periods.

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Key Operating and Financial Indicators

We regularly review several key operational and financial indicators to assess
our performance and trends and inform management budgets,
projections and strategic decisions.

The following table presents our key operating and financial indicators, as well
as the relevant generally accepted accounting principles ("GAAP") measures, for
the periods indicated:

                                                                         Year Ended
                                                                 2021                     2020
                                                          (in thousands, except for open and closed
                                                                       order numbers)
Key operating data:
Opened orders                                                    178,689                  136,873
Closed orders                                                    136,428                   92,389
GAAP financial data:
Revenue(1)                                               $       558,043            $     409,814
Gross profit(2)                                          $       103,261            $      85,830
Net loss                                                 $      (113,056)           $     (35,103)
Non-GAAP financial data(3):
Retained premiums and fees                               $       259,598            $     189,671
Adjusted gross profit                                    $       113,582            $      91,645
Ratio of adjusted gross profit to retained premiums and
fees                                                                  44    %                  48  %
Adjusted EBITDA                                          $       (71,592)           $     (18,986)


_________________

(1) Revenue includes (i) net premiums written, (ii) escrow, other
security and other costs, and (iii) investments, dividends and other income.
Net loss is made up of the revenue and expense components. For more
information about the measures included in our consolidated income statements,
see “-Key Components of Income and Expenses-Income” below.

(2)Gross profit, calculated in accordance with GAAP, is calculated as total
revenue, minus premiums retained by Third-Party Agents, direct labor expense
(including mainly personnel expense for certain employees involved in the direct
fulfillment of policies) and direct non-labor expense (including mainly title
examination expense, provision for claims, and depreciation and amortization).
In our consolidated income statements, depreciation and amortization is recorded
under the "other operating expenses" caption.

(3)Retained premiums and fees, adjusted gross profit and adjusted EBITDA are
non-GAAP financial measures. Refer to "-Non-GAAP Financial Measures" below for
additional information and reconciliations of these measures to the most closely
comparable GAAP financial measures.

Open and closed orders

Opened orders represent the number of orders placed for title insurance and/or
escrow services (which includes the disbursement of funds, signing of documents
and recording of the transaction with the county office) through our Direct
Agents, typically in connection with a home purchase or mortgage refinancing
transaction. An order may be opened upon an indication of interest in a specific
property from a customer and may be cancelled by the customer before or after
the signing of a purchase or loan agreement. Closed orders represent the number
of opened orders for title insurance and/or escrow services that were
successfully fulfilled in each period with the issuance of a title insurance
policy and/or provision of escrow services. Opened and closed orders do not
include orders or referrals for title insurance from our Third-Party Agents. For
avoidance of doubt, a closed order for a home purchase transaction typically
results in the issuance of two title insurance policies, whereas a refinance
transaction typically results in the issuance of one title insurance policy.

We review opened orders as a leading indicator of our Direct Agents revenue
pipeline and closed orders as a direct indicator of Direct Agents revenue for
the concurrent period, and believe these measures are useful to investors for
the same reasons. We believe that the relationship between opened and closed
orders will remain relatively consistent over time, and that opened order growth
is generally a reliable indicator of future financial performance. However,
degradation in the ratio of opened orders to closed orders may be a leading
indicator of adverse macroeconomic or real estate market trends.

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Retained premiums and fees

Retained premiums and fees, a non-GAAP financial measure, is defined as total
revenue under GAAP minus premiums retained by Third-Party Agents. See "-Non-GAAP
Financial Measures" below for a reconciliation of our retained premiums and fees
to gross profit, the most closely comparable GAAP measure, and additional
information about the limitations of our non-GAAP measures.

Our business strategy is focused on leveraging our Doma Intelligence platform to
provide an overall improved customer and referral partner experience and to
drive time and expense efficiencies principally in our Direct Agents channel. In
our Third-Party Agents channel in contrast, we provide our underwriting
expertise and balance sheet to insure the risk on policies referred by such
Third-Party Agents and, for that service, we typically receive approximately 16%
of the premium for the policy we underwrite. As such, we use retained premiums
and fees, which is net of the impact of premiums retained by Third-Party Agents,
as an important measure of the earning power of our business and our future
growth trends, and believe it is useful to investors for the same reasons.

Adjusted gross profit

Adjusted gross profit, a non-GAAP financial measure, is defined as gross profit
(loss) under GAAP, adjusted to exclude the impact of depreciation and
amortization. See "-Non-GAAP Financial Measures" below for a reconciliation of
our adjusted gross profit to gross profit, the most closely comparable GAAP
measure and additional information about the limitations of our non-GAAP
measures.

Management views adjusted gross profit as an important indicator of our
underlying profitability and efficiency. As we generate more business that is
serviced through our Doma Intelligence platform, we expect to reduce fulfillment
costs as our direct labor expense per order continues to decline, and we expect
the adjusted gross profit per transaction to grow faster than retained premiums
and fees per transaction over the long term.

Adjusted gross margin ratio on premiums and fees withheld

Ratio of adjusted gross profit to retained premiums and fees, a non-GAAP
measure, expressed as a percentage, is calculated by dividing adjusted gross
profit by retained premiums and fees. Both the numerator and denominator are net
of the impact of premiums retained by Third-Party Agents because that is a cost
related to our Underwriting segment over which we have limited control, as
Third-Party Agents customarily retain approximately 84% of the premiums related
to a title insurance policy referral pursuant to the terms of long-term
contracts.

We view the ratio of adjusted gross profit to retained premiums and fees as an
important indicator of our operating efficiency and the impact of our
machine-learning capabilities, and believe it is useful to investors for the
same reasons.

We expect improvement to our ratio of adjusted gross profit to retained premiums
and fees over the long term, reflecting the continued reduction in our average
fulfillment costs per order.

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss)
before interest, income taxes and depreciation and amortization, and further
adjusted to exclude the impact of stock-based compensation, COVID-related
severance costs and the change in fair value of Warrant and Sponsor Covered
Shares liabilities. See "-Non-GAAP Financial Measures" below for a
reconciliation of our adjusted EBITDA to net loss, the most closely comparable
GAAP measure and additional information about the limitations of our non-GAAP
measures.

We look at Adjusted EBITDA as an important measure of our recurring revenue and
underlying financial performance, and we believe it is useful for investors to
same reason.

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Key Components of Revenues and Expenses

Revenue

Net premiums written

We generate net premiums by underwriting title insurance policies and recognize
premiums in full upon the closing of the underlying transaction. For some of our
Third-Party Agents, we also accrue premium revenue for title insurance policies
we estimate to have been issued in the current period but reported to us by the
Third-Party Agent in a subsequent period. See "-Critical Accounting Policies and
Estimates- Accrued net premiums written from Third-Party Agent referrals" below
for further explanation of this accrual. For the years ended 2021 and 2020, the
average time lag between the issuing of these policies by our Third-Party Agents
and the reporting of these policies or premiums to us has been approximately
three months. Net premiums written is inclusive of the portion of premiums
retained by Third-Party Agents, which is recorded as an expense, as described
below.

In order to reduce the risk associated with our insurance policies underwritten, we
use reinsurance programs to limit our maximum exposure to loss. under our
reinsurance treaties, we cede the premiums of the underlying policies
exchange for a ceding commission from the reinsurer and our net written premiums
exclude these ceded premiums.

Our principal reinsurance quota share agreement covers instantly underwritten
policies from refinance and home equity line of credit transactions under which
we historically ceded 100% of the written premium of each covered policy during
2019, 2020, and during the period from January 1, 2021 through February 23,
2021. Pursuant to a renewed agreement, which became effective on February 24,
2021, we cede only 25% of the written premium on such instantly underwritten
policies, up to a total reinsurance coverage limit of $80.0 million in premiums
reinsured, after which we retain 100% of the written premium on instantly
underwritten policies. This reduction in ceding percentage has resulted in
higher net premiums written per transaction when compared to prior period
results. Refer to Note 2 to the consolidated financial statements above for
additional details on our reinsurance treaties.

Escrow, other title fees and other

Escrow fees and other title-related fees are charged for managing the closing of
real estate transactions, including the processing of funds on behalf of the
transaction participants, gathering and recording the required closing
documents, providing notary services, and other real estate or title-related
activities. Other fees relate to various ancillary services we provide,
including fees for rendering a cashier's check, document preparation fees,
homeowner's association letter fees, inspection fees, lien letter fees and wire
fees. We also recognize ceding commissions received in connection with
reinsurance treaties, to the extent the amount of such ceding commissions
exceeds reinsurance-related costs.

This revenue item is most directly associated with our Distribution segment. For
segment-level reporting, agent premiums retained by our Distribution segment are
recorded as revenue under the "escrow, other title-related fees and other"
caption of our segment income statements, while our Underwriting segment records
a corresponding expense for insurance policies issued by us. The impact of these
internal transactions is eliminated upon consolidation.

Investments, dividends and other income

Investment, dividends and other income are mainly generated from our investment
portfolio. We primarily invest in fixed income securities, mainly composed of
corporate debt obligations, U.S. government agency obligations, certificates of
deposit, U.S. Treasuries and mortgage loans.

Expenses

Premiums retained by third-party agents

When customers are referred to us and we underwrite a policy, the referring
Third-Party Agent retains a significant portion of the premium, which typically
amounts to approximately 84% of the premium. The portion of premiums retained by
Third-Party Agents is recorded as an expense. These referral expenses relate
exclusively to

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our Underwriting segment. As we continue to grow our Direct Agents channel
relative to our Third-Party Agents channel, we expect that premiums retained by
Third-Party Agents will decline as a percentage of revenue over time.

For segment-level reporting, premiums retained by our Direct Agents (which are
recorded as Distribution segment revenue) are recorded as part of "premiums
retained by agents" expense for our Underwriting segment. The impact of these
internal transactions is eliminated upon consolidation.

Title examination fees

Title examination costs are incurred as part of the search and
review of public information prior to issuance of title insurance
Strategies.

Provision for claims

The provision for claims expenses is considered by management to be made up of three
components: IBNR reserves, known claims and claims adjustment expenses
escrow reserves and losses.

IBNR is a loss reserve that primarily reflects the sum of expected losses for
unreported claims. The expense is calculated by applying a rate (the loss
provision rate) to total title insurance premiums. The loss provision rate is
determined at the beginning of each year based in part upon an assessment
performed by an independent actuarial firm utilizing generally accepted
actuarial methods. The assessment also takes account of industry trends, the
regulatory environment and geographic considerations and is updated during the
year based on developments. This loss provision rate is set to provide for
losses on current year policies. Due to our long claim exposure, our provision
for claims periodically includes amounts of adverse or positive claims
development on policies issued in prior years, when claims on such policies are
higher or lower than initially expected.

Based on the risk profile of premium vintages over time and on the basis of
projections from a firm of independent actuaries, we build up or release reserves
related to our old policies. Our IBNR may increase in proportion to our
revenues as we continue to increase the proportion of our businesses served
through our Doma Intelligence platform, although we believe it will decrease over time
in the long term, because our predictive artificial intelligence technology produces
improved results.

Known claims loss and loss adjustment expense reserves is an expense that
reflects the best estimate of the remaining cost to resolve a claim, based on
the information available at the time. In practice, most claims do not settle
for the initial known claims provision; rather, as new information is developed
during the course of claims administration, the initial estimates are revised,
sometimes downward and sometimes upward. This additional development is provided
for in the actuarial projection of IBNR, but it is not allocable to specific
claims. Actual costs that are incurred in the claims administration are booked
to loss adjustment expense, which is primarily comprised of legal expenses
associated with investigating and settling a claim.

Escrow-related losses are primarily attributable to clerical errors that arise
during the escrow process and caused by the settlement agent. As the proportion
of our orders processed through our Doma Intelligence platform continues to
increase, we expect escrow-related losses to decline over time.

Personnel costs

Personnel costs include base salaries, benefits, bonuses paid to
employees and social charges. This expenditure is mainly due to the average
number of employees and our hiring activities during a given period.

In our presentation and reconciliation of segment results and our calculation of
gross profit, we classify personnel costs as either direct or indirect expenses,
reflecting the activities performed by each employee. Direct personnel costs
relate to employees whose job function is directly related to our fulfillment
activities, including underwriters, closing agents, escrow agents, funding
agents, and title and curative agents, and are included in the calculation of
our segment adjusted gross profit. Indirect personnel costs relate to employees
whose roles do not directly support our transaction fulfillment activities,
including sales agents, training specialists and customer success agents,
segment management, research and development and other information technology
personnel, and corporate support staff.

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Other operating expenses

Other operating expenses are comprised of occupancy, maintenance and utilities,
product taxes (for example, state taxes on premiums written), professional fees
(including legal, audit and other third-party consulting costs), software
licenses and sales tools, travel and entertainment costs, and depreciation and
amortization, among other costs.

Change in fair value of liabilities related to Warrants and Sponsors Covered Shares

Change in fair value of Warrant and Sponsor Covered Shares liabilities consists
of unrealized gains and losses as a result of recording our Warrants and Sponsor
Covered Shares to fair value at the end of each reporting period.

income tax expense

Although we are in a consolidated net loss position and report our federal
income taxes as a consolidated tax group, we incur state income taxes in certain
jurisdictions where we have profitable operations. Additionally, we incur
mandatory minimum state income taxes in certain jurisdictions. Also, we have
recognized deferred tax assets but have offset them with a full valuation
allowance, reflecting substantial uncertainty as to their recoverability in
future periods. Until we report at least three years of profitability, we may
not be able to realize the tax benefits of these deferred tax assets.

Operating results

We discuss our historical results of operations below, on a consolidated basis
and by segment. Past financial results are not indicative of future results. As
previously mentioned, our results of operations include tables with two years of
financial performance, accompanied by narrative for 2021 as compared to 2020.
For further discussion of prior period financial results, refer to our
Registration Statement on Form S-1 (No. 333-258942), as amended, filed with the
SEC on September 3, 2021 and declared effective on September 8, 2021.

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Contents
Year ended December 31, 2021 Compared to the year ended December 31, 2020

The following table presents a summary of our consolidated results of
transactions for the periods indicated and changes between periods.

                                                                   Year Ended December 31,
                                           2021                2020              $ Change               % Change
                                                             (in thousands, except percentages)
Revenues:
Net premiums written                   $  475,352          $  345,608          $  129,744                        38  %
Escrow, other title-related fees and
other                                      79,585              61,275              18,310                        30  %
Investment, dividend and other income       3,106               2,931                 175                         6  %
Total revenues                         $  558,043          $  409,814          $  148,229                        36  %

Expenses:

Premiums retained by Third-Party
Agents                                 $  298,445          $  220,143          $   78,302                        36  %
Title examination expense                  22,137              16,204               5,933                        37  %
Provision for claims                       21,335              15,337               5,998                        39  %
Personnel costs                           238,134             143,526              94,608                        66  %
Other operating expenses                   79,951              43,285              36,666                        85  %
Total operating expenses               $  660,002          $  438,495          $  221,507                        51  %
Loss from operations                     (101,959)            (28,681)            (73,278)                      255  %
Other (expense) income:
Change in fair value of Warrant and
Sponsor Covered Shares liabilities          6,691                   -               6,691                            *
Interest expense                          (16,861)             (5,579)            (11,282)                      202  %
Loss before income taxes                 (112,129)            (34,260)            (77,869)                      227  %
Income tax expense                     $     (927)         $     (843)         $      (84)                       10  %
Net loss                               $ (113,056)         $  (35,103)         $  (77,953)                      222  %

* = Not shown because previous period amount is zero

Income

Net premiums written. Net premiums written increased by $129.7 million, or 38%,
for the year ended December 31, 2021 compared to the same period in the prior
year, driven by a 46% increase in premiums from our Direct Agents channel and a
35% increase in premiums from our Third-Party Agents channel.

For the year ended December 31, 2021, Direct Agents premium growth was driven by
closed order growth of 48%. Closed order growth overall increased due to new
customer and referral partner acquisitions, increased wallet share with existing
referral partners, an expanding geographical footprint, and market conditions
resulting in the higher volume of refinance orders. Closed order growth was
offset by lower average premiums per Direct Agent order of 2%, due to a higher
share of refinance orders during the course of the year.

Third-Party Agent growth reflects the results of management's continued efforts
to increase wallet share capture from existing Third-Party Agents as well as
efforts to generate new agent relationships to accelerate growth. The rise in
premiums was also driven by an overall increase in market activity due to the
low interest rate environment.

Escrow, other title-related fees and other. Escrow, other title-related fees and
other increased $18.3 million, or 30%, for the year ended December 31, 2021
compared to the same period in the prior year, driven by the corresponding
closed order growth, offset by the higher mix of Doma Enterprise closed orders,
which carry a lower price point as compared to the Local channel.

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Investment, dividend and other income. Investment, dividend and other income
increased $0.2 million or 6% for the year ended December 31, 2021 compared to
the same period in the prior year, primarily due to one-time realized gains on
investments from portfolio rebalancing.

Expenses

Premiums Withheld by Third-Party Agents. Premiums withheld by third-party agents
increased by $78.3 millionor 36%, for the year ended December 31, 2021
compared to the same period of the previous year. The increase was drawn
mainly by the growth of written policies referred by third parties
Agents, and there has been no material change in the average commissions paid to our
Third Party Agents.

Title examination expense. Title examination expense increased by $5.9 million,
or 37%, for the year ended December 31, 2021 compared to the same periods in the
prior year, principally due to growth in Direct Agent closed orders and premiums
written.

Provision for claims. Provision for claims increased by $6.0 million, or 39%,
for the year ended December 31, 2021 compared to the same period in the prior
year primarily due to new business written premiums from the corresponding
periods. The provision for claims, expressed as a percentage of net premiums
written, was 4.5% and 4.4% for the year ended December 31, 2021 and 2020,
respectively. The reported loss emergence in both periods on policies issued in
prior years was lower than expected.

Personnel costs. Personnel costs increased by $94.6 million, or 66%, for the
year ended December 31, 2021 compared to the same period in the prior year, due
to investments in direct labor and customer acquisition, the expansion of our
corporate support functions to enhance public company readiness, and an increase
in operations and management staff supporting the direct agents channel as the
organization invests in driving growth of Doma Intelligence-enabled closings.

Other operating expenses. Other operating expenses increased by $36.7 million,
or 85%, for the year ended December 31, 2021 compared to the same period in the
prior year, driven by 116% higher corporate support expenses to operate as a
public company, higher operating expenses to support revenue growth such as
hardware and software purchases, higher amortization expenses related to
investments in the development of the Doma Intelligence platform, and higher
amortization of intangibles related to our rebranding to "Doma." Depreciation
and amortization increased by $4.5 million, or 77%, respectively, for the year
ended December 31, 2021 compared to the same period in the prior year.

Change in fair value of Warrant and Sponsor Covered Shares liabilities. The
change in the fair value of Warrant and Sponsor Covered Shares (as defined in
Note 2) liabilities increased by $6.7 million for the year ended December 31,
2021 compared to the same period in the prior year due to the addition of these
liabilities from the Business Combination in 2021.

Interest expense. Interest expense increased by $11.3 million, or 202%, for the
year ended December 31, 2021 compared to the same period in the prior year, due
to a higher amount of debt outstanding as well as a higher effective interest
rate in 2021, which is a result of the funding of the new $150.0 million Senior
Debt facility during the first quarter of 2021.

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Supplemental Segment Results Discussion - Year Ended December 31, 2021 Compared
to the Year Ended December 31, 2020

The following table sets forth a summary of the results of operations for our
Distribution and Underwriting segments for the years indicated. See "-Basis of
Presentation" above.

                                                         Year Ended December 31, 2021                                                          

Year ended December 31, 2020

                               Distribution           Underwriting           Eliminations           Consolidated           Distribution           Underwriting           Eliminations           Consolidated
                                                                                                              (in thousands)
Net premiums written         $           -          $     476,328          $        (976)         $     475,352          $           -          $     345,608          $           -          $     345,608
Escrow, other title-related
fees and other (1)                 177,069                  3,520               (101,004)                79,585                129,590                  2,099                (70,414)                61,275
Investment, dividend and
other income                           205                  2,901                      -                  3,106                    699                  2,232                      -                  2,931
Total revenue                $     177,274          $     482,749         

($101,980) $558,043 $130,289 $349,939 ($70,414) $409,814
Premiums withheld by agents
(2)

                                      -                400,425               (101,980)               298,445                      -                290,557                (70,414)               220,143
Direct labor (3)                    81,204                  8,412                      -                 89,616                 55,334                  6,820                      -                 62,154
Other direct costs (4)              23,726                 11,339                      -                 35,065                 16,912                  3,623                      -                 20,535
Provision for title claim
losses                               2,257                 19,078                      -                 21,335                  1,415                 13,922                      -                 15,337
Adjusted gross profit (5)    $      70,087          $      43,495          $           -          $     113,582          $      56,628          $      35,017          $           -          $      91,645



__________________

(1)Includes revenue from closing costs, escrow, title examinations, sales commission
income, as well as bonuses withheld by direct agents.

(2)This expense represents a deduction from the net premiums written for the
amounts that are retained by Direct Agents and Third-Party Agents as
compensation for their efforts to generate premium income for our Underwriting
segment. The impact of premiums retained by our Direct Agents and the expense
for reinsurance or co-insurance procured on Direct Agent sourced premiums are
eliminated in consolidation.

(3) Includes all compensation costs, including salaries, bonuses, incentives
payments and benefits for staff involved in the direct performance of
title and/or escrow services.

(4) Includes title examination fees, office supplies, bonuses and other
taxes.

(5)See “-Non-GAAP Financial Measures-Adjusted Gross Profit” below for a
reconciliation of consolidated adjusted gross margin, which is a non-GAAP
measure, to our gross profit, the most comparable GAAP financial results
measure.

Distribution segment revenue increased by $47.0 million, or 36%, for the year
ended December 31, 2021 compared to the same period in the prior year driven by
the closed order growth of 48% discussed above. Revenue from closed order growth
was somewhat offset by the higher mix of Doma Enterprise closed orders, which
carry a lower price point as compared to the Local channel. Underwriting segment
revenue increased by $132.8 million, or 38%, for the year ended December 31,
2021 compared to the same period in the prior year, reflecting significant
growth in title policies underwritten from both Direct and Third-Party Agents.

Distribution segment adjusted gross profit improved $13.5 million, or 24%, for
the year ended December 31, 2021 compared to the same period in the prior year,
driven principally by closed order growth offset by the higher mix of Doma
Enterprise closed orders, which carry a lower margin as compared to the Local
channel. Underwriting segment adjusted gross profit increased by $8.5 million,
or 24%, for the year ended December 31, 2021 compared to the same period in the
prior year, reflecting increased demand across all channels of the business
offset by increases in direct expenses.

Discussion of the results of the additional key operational and financial indicators – Year
Ended December 31, 2021 Compared to the year ended December 31, 2020

The following table presents our key operating and financial indicators,
including our non-GAAP financial measures, for the periods indicated, and the
changes between periods. This discussion should be read only as a supplement to
the discussion of our GAAP results above. See "-Non-GAAP Financial Measures"
below for important information about the non-GAAP financial measures presented
below and their reconciliation to the respective most closely comparable GAAP
measures.

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                                                                 Year Ended December 31,
                                         2021                 2020              $ Change               % Change
                                          (in thousands, except percentages and open and closed order numbers)
Opened orders                           178,689              136,873              41,816                        31  %
Closed orders                           136,428               92,389              44,039                        48  %
Retained premiums and fees          $   259,598           $  189,671          $   69,927                        37  %
Adjusted gross profit                   113,582               91,645              21,937                        24  %
Ratio of adjusted gross profit to
retained premiums and fees                   44   %               48  %             (4) p.p                     (8) %
Adjusted EBITDA                     $   (71,592)          $  (18,986)         $  (52,606)                      277  %


Opened and closed orders

For the year ended December 31, 2021, we opened 178,689 orders and closed
136,428 orders, an increase of 31% and 48%, respectively, over the same period
in the prior year. Closed orders increased 387% year over year in our Doma
Enterprise channel due to new customer and referral partner acquisitions,
increased wallet share with existing referral partners, and an expanded
geographical footprint. Closed orders decreased slightly by 1% in our Local
channel in the year ended December 31, 2021 compared to the same period in the
prior year due to the contracting refinance market that occurred during the
second half of 2021, which was partially offset by growth in purchase orders.

Premiums and fees withheld

Retained premiums and fees increased by $69.9 million, or 37%, for the year
ended December 31, 2021 compared to the same periods in the prior year, driven
by strong closed order and title policy growth across Direct and Third-Party
Agents, respectively.

Adjusted gross profit

Adjusted gross profit increased by $21.9 million, or 24%, for the year ended
December 31, 2021 compared to the same period in the prior year, due to growth
in retained premiums and fees of $69.9 million in the same period. The growth in
retained premiums and fees was partially offset by investments in fulfillment
infrastructure to support future growth.

Adjusted gross margin ratio on premiums and fees withheld

The ratio of adjusted gross profit to retained premiums and fees decreased 4
percentage points for the year ended December 31, 2021 compared to the same
period in the prior year due to the higher mix of Doma Enterprise closed orders,
which carry a lower price point as compared to the Local channel. Contributing
to the decrease in the ratio was higher direct labor expenses of $27.5 million,
or 44%, for the year ended December 31, 2021 compared to the same period in the
prior year. The rise in direct labor expenses exceeded retained premium and fees
growth as fulfillment labor was hired in advance of future volume growth, and
the organization experienced redundancies in fulfillment staff as it migrated
Local volume to Doma Intelligence.

Adjusted EBITDA

Adjusted EBITDA decreased by $52.6 million, or 277%, to negative $71.6 million
for the year ended December 31, 2021, driven by $74.6 million of higher
operating costs from investments in corporate support functions to successfully
operate as a public company, research and development, and operations and
management staff to support growth and the transformation of the Direct Agents
channel. This was offset by a $21.9 million improvement in adjusted gross
profit.

Non-GAAP Financial Measures

The non-GAAP financial measures described in this prospectus should be
considered only as supplements to the results prepared in accordance with GAAP and
should not be considered substitutes for GAAP results. these

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measures, retained premiums and fees, adjusted gross profit, and adjusted
EBITDA, have not been calculated in accordance with GAAP and are therefore not
necessarily indicative of our trends or profitability in accordance with GAAP.
These measures exclude or otherwise adjust for certain cost items that are
required by GAAP. Further, these measures may be defined and calculated
differently than similarly-titled measures reported by other companies, making
it difficult to compare our results with the results of other companies. We
caution investors against undue reliance on our non-GAAP financial measures as a
substitute for our results in accordance with GAAP.

Management uses these non-GAAP financial measures, in conjunction with GAAP
financial measures to: (i) monitor and evaluate the growth and performance of
our business operations; (ii) facilitate internal comparisons of the historical
operating performance of our business operations; (iii) facilitate external
comparisons of the results of our overall business to the historical operating
performance of other companies that may have different capital structures or
operating histories; (iv) review and assess the performance of our management
team and other employees; and (v) prepare budgets and evaluate strategic
planning decisions regarding future operating investments.

Premiums and fees withheld

The following presents our retained premiums and fees and reconciles the measure
to our gross profit, the most closely comparable GAAP financial measure, for the
periods indicated:

                                                Year Ended December 31,
                                                  2021               2020
                                                    (in thousands)
Revenue                                   $     558,043           $ 409,814
Minus:
Premiums retained by Third-Party Agents         298,445             220,143
Retained premiums and fees                $     259,598           $ 189,671

Less:

Direct labor                                     89,616              62,154
Provision for claims                             21,335              15,337
Depreciation and amortization                    10,321               5,815
Other direct costs(1)                            35,065              20,535
Gross Profit                              $     103,261           $  85,830


________________

(1) Includes title examination fees, office supplies, bonuses and other
taxes.

Adjusted gross profit

The following table reconciles our adjusted gross profit to our gross profit,
the most closely comparable GAAP financial measure, for the periods indicated:

                                       Year Ended December 31,
                                         2021                2020
                                           (in thousands)
Gross Profit                     $     103,261            $ 85,830
Adjusted for:
Depreciation and amortization           10,321               5,815
Adjusted Gross Profit            $     113,582            $ 91,645


Adjusted EBITDA

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The following table reconciles our adjusted EBITDA to our net loss, the most
closely comparable GAAP financial measure, for the periods indicated:

                                                                       Year Ended December 31,
                                                                      2021                    2020
                                                                            (in thousands)
Net loss (GAAP)                                                $    (113,056)            $   (35,103)
Adjusted for:
Depreciation and amortization                                         10,321                   5,815
Interest expense                                                      16,861                   5,579
Income taxes                                                             927                     843
EBITDA                                                         $     (84,947)            $   (22,866)
Adjusted for:
Stock-based compensation                                              20,046                   2,495
COVID-related severance costs                                              -                   1,385
Change in fair value of warrant and sponsor covered shares
liabilities                                                           (6,691)                      -
Adjusted EBITDA                                                $     (71,592)            $   (18,986)

Cash and capital resources

We measure liquidity in terms of our ability to fund the cash requirements of
our business operations, including our working capital and capital expenditure
needs and other commitments. Our recurring working capital requirements relate
mainly to our cash operating costs. Our capital expenditure requirements consist
mainly of software development related to our Doma Intelligence platform.

We had $383.8 million in cash and cash equivalents as of December 31, 2021. We
believe our operating cash flows, together with our cash on hand, and the cash
proceeds from the Business Combination and the related private placement, will
be sufficient to meet our working capital and capital expenditure requirements
for a period of at least 12 months from the date of this Annual Report.

We may need additional cash due to changing business conditions or other
developments, including unanticipated regulatory developments and competitive
pressures. To the extent that our current resources are insufficient to satisfy
our cash requirements, we may need to seek additional equity or debt financing.

Debt

Financing note from seller Lennar

As part of the North American Title Acquisition, Lennar issued us a note for
$87.0 million on January 7, 2019 with a maturity date of January 7, 2029. Cash
interest on the note accrued at one-month LIBOR plus a fixed rate of 8.5% per
annum on a "pay-in-kind" ("PIK") basis. Old Doma repaid the note in full in
January 2021, after making several principal prepayments in 2019 and 2020.

Senior Secured Credit Agreement

In December 2020, Old Doma entered into a loan and security agreement with
Hudson Structured Capital Management Ltd. ("HSCM"), providing for a $150.0
million senior secured term loan ("Senior Debt"), which was fully funded by the
lenders, which are affiliates of HSCM, at its principal face value on January
29, 2021 (the "Funding Date") and matures on the fifth anniversary of the
Funding Date. The Senior Debt bears interest at a rate of 11.25% per annum, of
which 5.0% is payable in cash in arrears and the remaining 6.25% accrues to the
outstanding principal balance on a PIK basis. Interest is payable or compounded,
as applicable, quarterly. Principal prepayments on the Senior Debt are
permitted, subject to a premium, which declines from 8% of principal today to 4%
in 2023 and to zero in 2024.

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The Senior Debt is secured by a first-priority pledge and security interest in
substantially all of the assets of our wholly owned subsidiary States Title
(which represents substantially all of our assets), including the assets of any
of its existing and future domestic subsidiaries (in each case, subject to
customary exclusions, including the exclusion of regulated insurance company
subsidiaries). The Senior Debt is subject to customary affirmative and negative
covenants, including limits on the incurrence of debt and restrictions on
acquisitions, sales of assets, dividends and certain restricted payments. The
Senior Debt is also subject to two financial maintenance covenants, related to
liquidity and revenues. The liquidity covenant requires States Title to have at
least $20.0 million of liquidity, calculated as of the last day of each month,
as the sum of (i) our unrestricted cash and cash equivalents and (ii) the
aggregate unused and available portion of any working capital or other revolving
credit facility. The revenue covenant, which is tested as of the last day of
each fiscal year, requires that States Title's consolidated GAAP revenue for the
year to be greater than $130.0 million. The Senior Debt is subject to customary
events of default and cure rights. As of December 31, 2021, States Title is in
compliance with all Senior Debt covenants.

Upon financing, Old Doma issued penny warrants to HSCM affiliates equivalent to
1.35% of the fully diluted shares of Old Doma. The warrants were exercised net on
Closing Date and such HSCM Affiliates have been granted the right to receive
approximately 4.2 million shares of our common stock.

Other commitments and contingencies

Our commitments for leases, related to our office space and equipment, amounted
to $37.8 million as of December 31, 2021 of which $9.4 million is payable in
2022. Refer to Note 15 to our consolidated financial statements for a summary of
our future commitments. Our headquarters lease expires in 2024. As of
December 31, 2021, we did not have any other material commitments for cash
expenditures. We also administer escrow deposits as a service to customers, a
substantial portion of which are held at third-party financial institutions.
Such deposits are not reflected on our balance sheet, but we could be
contingently liable for them under certain circumstances (for example, if we
dispose of escrowed assets). Such contingent liabilities have not materially
impacted our results of operations or financial condition to date and are not
expected to do so in the near term.

Cash flow

The following table summarizes our cash flows for the periods indicated:

                                                  Year Ended December 31,
                                                    2021                

2020

                                                      (in thousands)
Net cash used in operating activities       $     (56,329)           $ 

(9,274)

Net cash used in investing activities             (23,128)            

(63,033)

Net cash provided by financing activities         351,263              42,661


Operating Activities

In 2021, net cash used in operating activities was $56.3 million driven by the
net loss of $113.1 million, cash paid for prepaid expenses of $6.2 million and
non-cash costs relating to the change in the fair value of warrant and Sponsor
Covered Shares liabilities of $6.7 million. This was offset by increases of
accrued expenses and other liabilities of $17.7 million, increases of the
liability for loss and loss adjustment expenses of $10.5 million, non-cash
stock-based compensation expense of $19.7 million and non-cash depreciation and
amortization of $10.3 million.

In 2020, net cash used in operating activities was $9.3 million driven by the
net loss of $35.1 million and cash paid for prepaid expenses of $2.3 million.
This was offset by increases of accrued expenses and other liabilities of $5.1
million, increases of the liability for loss and loss adjustment expenses of
$7.0 million, non-cash paid in kind interest expense of $6.5 million and
non-cash depreciation and amortization of $5.8 million.

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Investing Activities

Our capital expenditures have historically consisted primarily of costs incurred in
the development of the Doma Intelligence platform. Our other investments
activities generally consist of transactions in investments with fixed maturities
securities to provide regular interest payments.

In 2021, net cash used in investing activities was $23.1 million, and reflected
$36.2 million of purchases of investments offset by $44.3 million of proceeds
from the sale of investments. Cash paid for fixed assets was $32.2 million in
the same period, largely consisting of technology development costs related to
the Doma Intelligence platform.

In 2020, net cash used in investing activities was $63.0 million and reflected
$66.4 million of purchases of investments offset by $18.8 million of proceeds
from the sale of investments. In the same period, cash paid for fixed assets was
$17.0 million, largely consisting of technology development costs related to
Doma Intelligence. We also received $1.6 million from the sale of a title plant
in the same period.

Financing Activities

Net cash provided by financing activities was $351.3 million in 2021, reflecting
$625.0 million in proceeds from the Business Combination and PIPE Investment (as
defined in Note 3) and $150.0 million of proceeds from the Senior Debt. This
increase was offset by $294.9 million in redemptions of redeemable common and
preferred stock and $66.0 million in payment of costs directly attributable to
the issuance of common stock in connection with Business Combination and PIPE
Investment. The net cash provided by financing activities was also offset by the
$65.5 million repayment of the Lennar seller financing note.

Net cash provided by financing activities was $42.7 million in 2020, reflecting
$70.7 million in proceeds from the issuance of Series C preferred stock, offset
by a $28.4 million payment on the Lennar seller financing note.

Significant Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with
GAAP. Preparation of the financial statements requires management to make
several judgments, estimates and assumptions relating to the reported amount of
revenue and expenses, assets and liabilities and the disclosure of contingent
assets and liabilities. We evaluate our significant estimates on an ongoing
basis, including, but not limited to, liability for loss and loss adjustment
expenses, goodwill and accrued net premiums written from Third-Party Agent
referrals, and the Sponsor Covered Shares liability. We consider an accounting
judgment, estimate or assumption to be critical when (1) the estimate or
assumption is complex in nature or requires a high degree of judgment and (2)
the use of different judgments, estimates and assumptions could have a material
impact on our consolidated financial statements. Our significant accounting
policies are described in Note 2 to our annual audited consolidated financial
statements. Our critical accounting estimates are described below.

Liability for claims and claim settlement expenses

Our liability for loss and loss adjustment expenses include mainly reserves for
known claims as well as reserves for IBNR claims. Each known claim is reserved
based on our estimate of the costs required to settle the claim.

IBNR is a loss reserve that primarily reflects the sum of expected losses for
unreported claims. The expense is calculated by applying a loss provision rate
to total title insurance premiums. With the assistance of a third-party
actuarial firm, we determine the loss provision rate for the policies written in
the current and prior years. This assessment considers factors such as
historical experience and other factors, including industry trends, claim loss
history, legal environment, geographic considerations and the types of title
insurance policies written (i.e., real estate purchase or refinancing
transactions). The loss provision rate is set to provide for losses on current
year policies, but due to development of prior years and our long claim
duration, it periodically includes amounts of estimated adverse or positive
development on prior years' policies. The provision rate on prior year policies
will continue to change as actual experience on those specific policy years
develop. As the Company's claims experience matures, we refine estimates on
prior policy years to put more consideration to the Company's actual claims
experience as compared to industry experience. Changes in the loss provision
rate for recent policy years are considered likely and could result

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in a material adjustment to the IBNR reserves. For example, a 50 basis point
increase or decrease in the current estimated 2021 loss provision rate would
result in a $2.8 million corresponding increase or decrease to IBNR.

The estimates used require considerable judgment and are established as
management's best estimate of future outcomes, however, the amount of IBNR
reserved based on these estimates could ultimately prove to be inadequate to
cover actual future claims experience. We continually monitor for any events
and/or circumstances that arise during the year which may indicate that the
assumptions used to record the provision for claims estimate requires
reassessment.

Our total loss reserve as of December 31, 2021 amounted to $80.3 million, which
we believe, based on historical claims experience and actuarial analyses, is
adequate to cover claim losses resulting from pending and future claims for
policies issued through December 31, 2021.

A summary of the Company’s provisions for losses is as follows:

                                  Year Ended December 31,
                                 2021                      2020
                                      ($ in thousands)
Known title claims    $     7,578           9  %    $  4,727      7  %
IBNR title claims          72,621          90  %      64,390     92  %
Total title claims    $    80,199          99  %    $ 69,117     99  %
Non-title claims               68           1  %         683      1  %
Total loss reserves   $    80,267         100  %    $ 69,800    100  %

We continually review and adjust our reserve estimates to reflect losses
experience and any new information that becomes available.

Good will

We have significant goodwill on our balance sheet related to acquisitions as
goodwill represents the excess of the acquisition price over the fair value of
net assets acquired and liabilities assumed in a business combination. Goodwill
is tested and reviewed annually for impairment on October 1 of each year, and
between annual tests if events or circumstances arise that would more likely
than not reduce the fair value of any one of our reporting units below its
respective carrying amount. In addition, an interim impairment test may be
completed upon a triggering event or when there is a reorganization of reporting
structure or disposal of all or a portion of a reporting unit. As of
December 31, 2021, we had $111.5 million of goodwill, relating to the North
American Title Acquisition, of which $88.1 million and $23.4 million was
allocated to our Distribution and Underwriting reporting units, respectively.

In performing our annual goodwill impairment test, we first perform a
qualitative assessment, which requires that we consider significant estimates
and assumptions regarding macroeconomic conditions, industry and market
considerations, cost factors, overall financial performance, changes in
management or key personnel, changes in strategy, changes in customers, changes
in the composition or carrying amount of a reporting unit or other factors that
have the potential to impact fair value. If, after assessing the totality of
events and circumstances, we determine that it is more likely than not that the
fair values of our reporting units are greater than the carrying amounts, then
the quantitative goodwill impairment test is not performed, as goodwill is not
considered to be impaired. However, if we determine that the fair value of a
reporting unit is more likely than not to be less than its carrying value, then
a quantitative assessment is performed. For the quantitative assessment, the
determination of estimated fair value of our reporting units requires us to make
assumptions about future discounted cash flows, including profit margins,
long-term forecasts, discount rates and terminal growth rates and, if possible,
a comparable market transaction model. If, based upon the quantitative
assessment, the reporting unit fair value is less than the carrying amount, a
goodwill impairment is recorded equal to the difference between the carrying
amount of the reporting unit's goodwill and its fair value, not to exceed the
carrying value of goodwill allocated to that reporting unit, and a corresponding
impairment loss is recorded in the consolidated statements of operations.

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We conducted our annual goodwill impairment test as of October 1, 2021. We
determined, after performing a qualitative review of each reporting unit, that
the fair value of each reporting unit exceeded its respective carrying value.
Accordingly, there was no indication of impairment and the quantitative goodwill
impairment test was not performed. We did not identify any events, changes in
circumstances, or triggering events since the performance of our annual goodwill
impairment test that would require us to perform an interim goodwill impairment
test during the year.

Accumulated net premiums issued from third party agent referrals

We recognize revenues on title insurance policies issued by Third-Party Agents
when notice of issuance is received from Third-Party Agents, which is generally
when cash payment is received. In addition, we estimate and accrue for revenues
on policies sold but not reported by Third-Party Agents as of the relevant
balance sheet closing date. This accrual is based on historical transactional
volume data for title insurance policies that have closed and were not reported
before the relevant balance sheet closing, as well as trends in our operations
and in the title and housing industries. There could be variability in the
amount of this accrual from period to period and amounts subsequently reported
to us by Third-Party Agents may differ from the estimated accrual recorded in
the preceding period. If the amount of revenue subsequently reported to us by
Third-Party Agents is higher or lower than our estimate, we record the
difference in revenue in the period in which it is reported. The time lag
between the closing of transactions by Third-Party Agents and the reporting of
policies, or premiums from policies issued by Third-Party Agents to us has been
approximately three months. In addition to the premium accrual, we also record
accruals for the corresponding direct expenses related to this revenue,
including premiums retained by Third-Party Agents, premium taxes, and provision
for claims.

Responsibility for actions covered by the sponsor

The Sponsor Covered Shares, as described in Note 3, will become vested
contingent upon the price of our common stock exceeding certain thresholds or
upon some strategic events, which include events that are not indexed to our
common stock.

We obtained a third-party valuation of the Sponsor Covered Shares as of July 28,
2021 (i.e., the Closing Date) and December 31, 2021 using the Monte Carlo
simulation methodology and based upon market inputs regarding stock price,
dividend yield, expected term, volatility and risk-free rate. The share price
represents the trading price as of each valuation date. The expected dividend
yield is zero as we have never declared or paid cash dividends and have no
current plans to do so during the expected term. The expected term represents
the vesting period, which is 9.6 years years. The expected volatility of 55.0%
was calculated based on the average of (i) the Doma implied volatility
calculated using longest term stock option. (ii) the Doma implied warrant
volatility using the term of the Public and Private Warrants and (iii) median
leverage adjusted (asset) volatility calculated using a set of Guideline Public
Companies ("GPCs"). Volatility for the GPCs was calculated over a lookback
period of 9.6 years years (or longest available data for GPCs whose trading
history was shorter than 9.6 years years), commensurate with the contractual
term of the Sponsor Covered Shares. The risk-free rate utilizes the 10-year U.S.
Constant Maturity. Finally, the annual change in control probability is
estimated to be 2.0%.

From December 31, 2021the liabilities of the actions covered by the sponsor amounted to $5.4
million
.

New accounting statements

For more information on recently published accounting pronouncements, refer to note 2
to our consolidated financial statements included elsewhere in this file.

Accounting Election for Emerging Growth Companies

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the "JOBS
Act") exempts emerging growth companies from being required to comply with new
or revised financial accounting standards until private companies (that is,
those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange
Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the
extended transition period

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and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt
out of such extended transition period which means that when a standard is
issued or revised and it has different application dates for public or private
companies, the Company, as an emerging growth company, can adopt the new or
revised standard at the time private companies adopt the new or revised
standard. This may make comparison of the Company's financial statements with
another public company which is neither an emerging growth company nor an
emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in
accounting standards used.
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Infinity Q Investors Sue Founder of Collapsed $1.7 Billion Fund After Fraud Allegations | Lowenstein Sandler LLP https://eventplaner.net/infinity-q-investors-sue-founder-of-collapsed-1-7-billion-fund-after-fraud-allegations-lowenstein-sandler-llp/ Wed, 02 Mar 2022 23:35:14 +0000 https://eventplaner.net/infinity-q-investors-sue-founder-of-collapsed-1-7-billion-fund-after-fraud-allegations-lowenstein-sandler-llp/

Investors in Infinity Q Capital Management’s (Infinity Q) funds filed a proposed class action lawsuit against the company last week after the fund’s founder was charged with securities fraud and obstruction of justice for allegedly inflated assets of over $1 billion and falsified records.

The lawsuit, which was filed last Thursday in U.S. District Court for the Eastern District of New York, alleges that the hedge fund and mutual fund “lost more than 40% of their respective values ​​after a forced liquidation by the SEC” in “one of the most egregious investment fund collapses in history.[1]

The proposed investor class accuses Infinity Q, the investment adviser who managed the funds, of manipulating the fund’s asset pricing methodology and overestimating the net asset value (NAV) of the funds from 2017 to 2021.[2] Investors allege that at the same time, Infinity Q intentionally misled investors by providing them with marketing materials touting robust fund valuation procedures, methodologies, monitoring and controls designed to ensure accurate pricing of the net asset value.[3]

Investors further allege that Infinity Q halted investor redemptions in February 2021, when at least two whistleblowers reported concerns about the funds to the SEC, prompting a formal and ongoing investigation. of the SEC and the liquidation by Infinity Q of the assets of the funds.[4] “As a result of these egregious acts, investors in the funds have been unable to withdraw their money from the funds, and investors are still waiting and wondering how much they will receive from the wreckage as the defendants continue to deplete available assets on legal defense costs. “, say the investors.[5]

The investors filed the suit the day after Infinity Q founder and former chief investment officer James Velissaris was criminally charged with securities fraud and obstruction of justice. According to the indictment, Velissaris manipulated the ratings for at least four years, creating results that were not only false but “mathematically impossible.”[6] The indictment also says that Velissaris tried to cover up the scheme by lying to auditors and altering term sheets and other counterparty documents for over-the-counter (OTC) derivative positions so that they appear support inflated values.[7]

On the same day as the indictment, the SEC and the Commodity Futures Trading Commission (CFTC) charged Velissaris with fraud in parallel civil actions. The SEC alleges that Velissaris and Infinity Q inflated the funds’ reported valuations by, among other things, manipulating computer code in the valuation models and knowingly entering incorrect data into what Velissaris told investors was a pricing service. independent third-party pricing.[8] Through this conduct, Velissaris significantly inflated the mutual fund’s net asset value and total private fund assets while pocketing more than $26 million in management fees, according to the SEC.[9]

The SEC further alleges that in doing so, Velissaris misled investors who likely would have requested redemptions had they known the funds’ actual performance, particularly given the market volatility during the COVID-19 pandemic.[10] Echoing these claims, the CFTC further asserts that Velissaris’ “false record of success” allowed Infinity Q to charge inflated fees, entice existing pool participants to invest more, and attract new investors. .[11]

The aforementioned court documents appear to collectively suggest that Velissaris and Infinity Q were able to carry out this scheme undetected for years due to the complexity of investing in the “alternative strategies” offered by Infinity Q. For example, OTC derivatives over-the-counter transactions, which made up a substantial portion of Infinity Q’s mutual funds and hedge funds, are contracts between private parties rather than trades made on a public exchange. As a result, even when market conditions were stable, investors had little opportunity to perform their own risk assessments or analyses, and were therefore highly dependent on Infinity Q’s purported expertise and methodologies. , the market turmoil caused by the COVID-19 pandemic has only increased the uncertainty surrounding these investments. It is therefore not surprising that Velissaris was able to exploit the “unprecedented market volatility” caused by the pandemic, during which “the scope and scale of fraud have increased”, according to the CFTC.[12]

The SEC and CFTC are seeking injunctions, civil monetary penalties, restitution, restitution, pre- and post-judgment interest, and prohibitions on trading, registration, and service as an officer or director against Velissaris. In the proposed class action, the investors seek, among other remedies, compensatory damages and rescission for all proposed class members who purchased securities issued by the funds from December 2018 through February 2021.

[1] Schiavi + Company LLC dba Schiavi + Dattani et al. v. Trust for Advised Portfolios et al.No. 1:22-cv-00896 at ¶ 2 (EDNY filed February 17, 2022).

[2] Identifier.

[3] Identifier. at 10.

[4] Identifier. at 12.

[5] Identifier. at ¶ 19.

[6] United States vs. Velissaris#1:22-cr-00105 at ¶ 3 (SDNY February 17, 2022).

[7] Identifier. at ¶ 5.

[8] SEC against Valissaris, No. 1:22-cv-01345 at ¶¶ 3, 85 (SDNY filed February 17, 2022).

[9] Identifier. at 12.

[10] Identifier. at 6.

[11] CFTC v. Valissaris, No. 1:22-cv-01347 at ¶ 3 (SDNY filed February 17, 2022).

[12] Identifier. to 1.

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CHEFS’ WAREHOUSE, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K) https://eventplaner.net/chefs-warehouse-inc-management-report-and-analysis-of-financial-position-and-operating-results-form-10-k/ Tue, 22 Feb 2022 15:16:06 +0000 https://eventplaner.net/chefs-warehouse-inc-management-report-and-analysis-of-financial-position-and-operating-results-form-10-k/
The following discussion should be read in conjunction with information included
in Item 8 of this report. Unless otherwise indicated, the terms "Company",
"Chefs' Warehouse", "we", "us", and "our" refer to The Chefs' Warehouse, Inc.
and its subsidiaries.

Overview and recent developments

Overview


We are a premier distributor of specialty foods in the leading culinary markets
in the United States. We offer more than 50,000 SKUs, ranging from high-quality
specialty foods and ingredients to basic ingredients and staples, produce and
center-of-the-plate proteins. We serve more than 35,000 core customer locations,
primarily located in our nineteen geographic markets across the United States
and Canada, and the majority of our customers are independent restaurants and
fine dining establishments. Our Allen Brothers subsidiary sells certain of our
center-of-the-plate products directly to consumers. We expanded our
direct-to-consumer product offerings in fiscal 2020 by launching our "Shop Like
a Chef" online home delivery platform in several of the markets we serve.

We believe several key differentiating factors of our business model have
enabled us to execute our strategy consistently and profitably across our
expanding customer base. These factors consist of a portfolio of distinctive and
hard-to-find specialty food products, an extensive selection of
center-of-the-plate proteins, a highly trained and motivated sales force, strong
sourcing capabilities, a fully integrated warehouse management system, a highly
sophisticated distribution and logistics platform and a focused, seasoned
management team.

In recent years, our sales to existing and new customers have increased through
the continued growth in demand for specialty food and center-of-the-plate
products in general; increased market share driven by our large percentage of
sophisticated and experienced sales professionals, our high-quality customer
service and our extensive breadth and depth of product offerings, including, as
a result of our acquisitions; the expansion of our existing distribution
centers; our entry into new distribution centers, including the construction of
new distribution centers in San Francisco, Toronto, Dallas, Los Angeles and
Miami; and the import and sale of our proprietary brands. Through these efforts,
we believe that we have been able to expand our customer base, enhance and
diversify our product selections, broaden our geographic penetration and
increase our market share.

Effect of the COVID-19 pandemic on our business and operations


The COVID-19 pandemic ("Pandemic") has had and continues to have an adverse
impact on numerous aspects of our business and those of our customers including,
but not limited to, demand for our products, cost inflation and labor shortages.
Despite these challenges, we continued to provide our core customers with high
touch service, executed on our cost control measures and returned to
profitability during the second quarter of fiscal 2021. Furthermore, as of
December 24, 2021, we had $157.8 million of working capital, including $115.2
million of cash and cash equivalents, on our balance sheet and $109.5 million of
availability on our asset-based loan facility. Our liquidity position, puts us
in a strategic position to invest in growth and take advantage of business
development opportunities as we continue to recover from the Pandemic.

The extent to which the Pandemic will impact our financial condition or results
of operations is uncertain and will depend on future developments including new
information that may emerge on the severity or transmissibility of the disease,
new variants, government responses, trends in infection rates, development and
distribution of effective medical treatments and vaccines, and future consumer
spending behavior, among others.

Recent significant acquisitions


On January 27, 2020, we entered into an asset purchase agreement to acquire
substantially all of the assets, including certain real-estate assets, of Sid
Wainer & Son ("Sid Wainer"), a specialty food and produce distributor in New
England. The cash purchase price was approximately $44.1 million, inclusive of a
$2.4 million working capital true-up. We are required to pay additional
contingent consideration, if earned, of up to $4.0 million over a two-year
period upon successful attainment of certain gross profit targets.

On February 3, 2020, we entered into an asset purchase agreement to acquire
substantially all of the assets of Cambridge Packing Co, Inc. ("Cambridge"), a
specialty center-of-the-plate producer and distributor in New England. The cash
purchase price was approximately $16.4 million, inclusive of a $0.6 million
working capital true-up. We are required to pay additional
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contingent consideration, if won, of up to $3.0 million over a two-year period after achieving certain gross margin targets.


On February 25, 2019, pursuant to an asset purchase agreement, we acquired
substantially all of the assets of Bassian Farms, Inc. and related entities
("Bassian"), a specialty center-of-the-plate distributor based in northern
California. The aggregate purchase price for the transaction was approximately
$31.8 million, consisting of $28.0 million in cash paid at closing and the
issuance of a $4.0 million unsecured convertible note, partially offset by the
settlement of a net working capital true-up. We are also required to pay
additional contingent consideration, if earned, which could total $9.0 million
over a four-year period. The payment of the earn-out liability is subject to the
successful achievement of certain gross profit targets.

Trademark Transition


During the second quarter of fiscal 2021, we committed to a plan to shift our
brand strategy to leverage our Allen Brothers brand in our New England market
and determined our Cambridge trademark did not fit our long-term strategic
objectives. As a result, we recognized a $0.6 million impairment charge, $0.4
million net of tax, to fully write-down the net book value of our Cambridge
trademark.

During the fourth quarter of fiscal 2020, we committed to a plan to shift our
brand strategy to leverage our Allen Brothers brand in our west coast region and
determined that our Del Monte, Ports Seafood and Bassian Farms trademarks did
not fit our long-term strategic objectives. This brand transition began in the
second quarter of fiscal 2021. As a result, we recorded a $24.2 million
impairment charge, $17.5 million net of tax, to write-down the value of our Del
Monte and Bassian Farms trademarks.

Our growth strategies and outlook


We continue to invest in our people, facilities and technology in an effort to
achieve the following objectives and maintain our premier position within the
specialty foodservice distribution market:

• expansion of the sales and service territory; •operational excellence and high level of customer service; •expanded purchasing programs and improved purchasing power; •product innovation and the introduction of new product categories; •operational efficiency through system improvements; and •reduced operating costs by centralizing general and administrative functions.


Our growth has allowed us to improve upon our organization's infrastructure,
open new distribution facilities and pursue selective acquisitions. Over the
last several years, we have increased our distribution capacity to approximately
2.5 million square feet in 40 distribution facilities as of February 11, 2022.
From fiscal 2019 through the end of fiscal 2021, we have invested significantly
in acquisitions, infrastructure and management.

Key factors affecting our performance


Due to our focus on menu-driven independent restaurants, fine dining
establishments, country clubs, hotels, caterers, culinary schools, bakeries,
patisseries, chocolateries, cruise lines, casinos and specialty food stores, our
results of operations are materially impacted by the success of the
food-away-from-home industry in the United States and Canada, which is
materially impacted by general economic conditions, weather, discretionary
spending levels and consumer confidence. When economic conditions deteriorate,
our customers' businesses are negatively impacted as fewer people eat
away-from-home and those who do spend less money. As economic conditions begin
to improve, our customers' businesses historically have likewise improved, which
contributes to improvements in our business. Similarly, the direct-to-consumer
business of our Allen Brothers subsidiary is significantly dependent on
consumers' discretionary spending habits, and weakness or uncertainty in the
economy could lead to consumers buying less from Allen Brothers.

Volatile food costs may have a direct impact upon our profitability. Prolonged
periods of product cost inflation may have a negative impact on our profit
margins and results of operations to the extent we are unable to pass on all or
a portion of such product cost increases to our customers. In addition, product
cost inflation may negatively impact consumer discretionary spending decisions
within our customers' establishments, which could adversely impact our sales.
Conversely, our profit levels may be negatively impacted during periods of
product cost deflation even though our gross profit as a percentage of sales may
remain relatively constant. However, some of our products, particularly certain
of our center-of-the-plate protein items, are priced on a "cost plus" markup,
which helps mitigate the negative impact of deflation.

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Given our wide selection of product categories, as well as the continuous
introduction of new products, we can experience shifts in product sales mix that
have an impact on net sales and gross profit margins. This mix shift is most
significantly impacted by the introduction of new categories of products in
markets that we have more recently entered, the shift in product mix resulting
from acquisitions, as well as the continued growth in item penetration on higher
velocity items such as dairy products.

The foodservice distribution industry is fragmented but consolidating, and we
have supplemented our internal growth through selective strategic acquisitions.
We believe that the consolidation trends in the foodservice distribution
industry will continue to present acquisition opportunities for us, which may
allow us to grow our business at a faster pace than we would otherwise be able
to grow the business organically.

Performance indicators

In addition to evaluating our operating profit, our management team analyzes our performance based on growth in net sales, gross profit and gross profit margin.


•Net sales growth. Our net sales growth is driven principally by changes in
volume and, to a lesser degree, changes in price related to the impact of
inflation in commodity prices and product mix. In particular, product cost
inflation and deflation impacts our results of operations and, depending on the
amount of inflation or deflation, such impact may be material. For example,
inflation may increase the dollar value of our sales, and deflation may cause
the dollar value of our sales to fall despite our unit sales remaining constant
or growing.
•Gross profit and gross profit margin. Our gross profit and gross profit as a
percentage of net sales, or gross profit margin, are driven principally by
changes in volume and fluctuations in food and commodity prices and our ability
to pass on any price increases to our customers in an inflationary environment
and maintain or increase gross profit margin when our costs decline. Our gross
profit margin is also a function of the product mix of our net sales in any
period. Given our wide selection of product categories, as well as the
continuous introduction of new products, we can experience shifts in product
sales mix that have an impact on net sales and gross profit margins. This mix
shift is most significantly impacted by the introduction of new categories of
products in markets that we have more recently entered, impact of product mix
from acquisitions, as well as the continued growth in item penetration on higher
velocity items such as dairy products.

Key financial definitions


•Net sales: Net sales consist primarily of sales of specialty products, produce,
center-of-the-plate proteins and other food products to independently-owned
restaurants and other high-end foodservice customers, which we report net of
certain group discounts and customer sales incentives. Net sales also include
direct-to-consumer sales on our e-commerce platforms.
•Cost of sales: Cost of sales include the net purchase price paid for products
sold, plus the cost of transportation necessary to bring the product to our
distribution facilities and food processing costs. Food processing costs
include, but are not limited, to direct labor and benefits, applicable overhead
and depreciation of equipment and facilities used in food processing activities.
Our cost of sales may not be comparable to other similar companies within our
industry.
•Selling, general and administrative expenses: Selling, general and
administrative expenses include facilities costs, product shipping and handling
costs, warehouse costs, and other selling, general and administrative costs.
•Other operating expenses: Other operating expenses includes expenses primarily
related to changes in the fair value of the Company's earn-out liabilities,
gains and losses on asset disposals, asset impairments and certain third-party
deal costs incurred in connection with business acquisitions or financing
arrangements.
•Interest expense: Interest and other expense consists primarily of interest on
our outstanding indebtedness and, as applicable, the amortization or write-off
of deferred financing fees.











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Results of Operations

                                                                          Fiscal Years Ended
                                               December 24, 2021           December 25, 2020           December 27, 2019
Net sales                                    $        1,745,757          $        1,111,631          $        1,591,834
Cost of sales                                         1,355,272                     863,480                   1,205,266
Gross profit                                            390,485                     248,151                     386,568
Selling, general and administrative expenses            379,252                     336,394                     329,542
Other operating expenses                                    422                      14,417                       6,359
Operating income (loss)                                  10,811                    (102,660)                     50,667
Interest and other expense, net                          17,587                      20,946                      18,264

(Loss) income before income taxes                        (6,776)                   (123,606)                     32,403
Provision for income tax (benefit) expense               (1,853)                    (40,703)                      8,210
Net (loss) income                            $           (4,923)         $          (82,903)         $           24,193



Fiscal Year Ended December 24, 2021 Compared to Fiscal Year Ended December 25,
2020

Net Sales

                                2021             2020          $ Change       % Change
                Net sales   $ 1,745,757      $ 1,111,631      $ 634,126         57.0  %



Organic growth contributed $574.2 million, or 51.6%, to sales growth in the year
primarily driven by our recovery from the Pandemic. The remaining growth of
$59.9 million, or 5.4%, resulted from acquisitions. Organic case count increased
approximately 33.8% in our specialty category. In addition, specialty unique
customers and placements increased 26.1% and 31.6%, respectively, compared to
the prior year. Pounds sold in our center-of-the-plate category
increased 28.2% compared to the prior year. Estimated inflation was 9.6% in our
specialty category and 18.1% in our center-of-the-plate category compared to
fiscal 2020.

Gross Profit

                                       2021            2020         $ Change       % Change
           Gross profit            $ 390,485       $ 248,151       $ 142,334         57.4  %
           Gross profit margin          22.4  %         22.3  %



Gross profit increased primarily due to increased sales volumes. Gross profit
margin increased approximately 4 basis points. Gross profit
margins increased 379 basis points in the Company's specialty category
and decreased 350 basis points in the Company's center-of-the-plate category
compared to the prior year period. Our prior year gross profit results include a
charge of approximately $14.6 million related to estimated inventory losses from
obsolescence due to the Pandemic's impact on our customers' purchasing behavior.

Selling, general and administrative expenses


                                                       2021                     2020                  $ Change               % Change
Selling, general and administrative expenses            379,252                  336,394               42,858                      12.7  %
Percentage of net sales                                    21.7  %                  30.3  %



The increase in selling, general and administrative expense relates primarily to
increased sales volumes and acquisitions. Our prior year results include an
estimated non-cash charge of approximately $15.8 million to bad debt expense
incurred during the first quarter of fiscal 2020 at the onset of the Pandemic.
Our ratio of selling, general and administrative expenses to net sales was lower
as a result of sales growth.




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Other operating expenses, net

                                        2021        2020         $ Change        % Change
            Other operating expenses    422        14,417       (13,995)          (97.1) %



The decrease in net other operating expenses relates primarily to a $24.2
million impairment charge for Del Monte and Bassian trademarks as a result of a
shift in brand strategy to leverage our Allen Brothers brand in our west coast
region during the fourth quarter of fiscal 2020 and non-cash credits of $1.3
million for changes in the fair value of our contingent earn-out liabilities in
the fiscal 2021 period compared to non-cash credits of $11.5 million in the
prior year period.

Interest Expense

                                       2021          2020        $ Change      % Change
               Interest expense       17,587        20,946      $ (3,359)       (16.0) %



Interest expense decreased primarily due to $1.2 million in one-time third-party
costs incurred during the second quarter of 2020 in connection with the
extension of a majority of our senior secured term loans and lower effective
interest rates charged on our outstanding debt as a result of the $50.0 million
aggregate principal amount of Convertible Senior Notes issued on March 1, 2021
which were used to repay higher interest rate debt.

Provision for tax benefit


                                              2021          2020         $ 

Change % Change

Provision for tax benefit (1,853) (40,703) $38,850 (95.4)%

       Effective tax rate                     27.3  %        32.9  %



The higher effective tax rate in the prior period is primarily related to the
carryback of a portion of our fiscal 2020 net taxable loss which allowed us to
claim tax refunds against taxes paid in fiscal 2015 and 2017, both of which were
at statutory tax rates of 35%.

Fiscal Year Ended December 25, 2020 Compared to Fiscal Year Ended December 27,
2019

Net Sales

                               2020             2019           $ Change       % Change
               Net sales   $ 1,111,631      $ 1,591,834      $ (480,203)       (30.2) %



Sales growth from acquisitions contributed $136.5 million, or 8.6%, to sales
growth. Organic sales declined $616.7 million, or 38.8%, versus the prior year
primarily due to impacts of the Pandemic. Organic case count declined
approximately 43.5% in our specialty category. In addition, specialty unique
customers and placements declined 30.4% and 43.6%, respectively, compared to the
prior year. Pounds sold in our center-of-the-plate category decreased 38.0%
compared to the prior year. Estimated deflation was 0.3% in our specialty
category and inflation of 3.5% in our center-of-the-plate category compared to
fiscal 2019.

Gross Profit

                                      2020           2019          $ Change       % Change
           Gross profit             248,151        386,568       $ (138,417)       (35.8) %
           Gross profit margin         22.3  %        24.3  %



Gross profit decreased primarily due to decreased sales volumes. Gross profit
margin decreased approximately 196 basis points. Gross profit margins decreased
441 basis points in the Company's specialty category and increased 117 basis
points in the Company's center-of-the-plate category compared to the prior year
period. Our gross profit results include a charge of approximately $14.6 million
related to estimated inventory losses from obsolescence due to the Pandemic's
impact on our customers' purchasing behavior.


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Selling, general and administrative expenses


                                                       2020                     2019                 $ Change               % Change
Selling, general and administrative expenses            336,394                  329,542               6,852                       2.1  %
Percentage of net sales                                    30.3  %                  20.7  %



The increase in selling, general and administrative expense relates primarily to
our recent acquisitions and an estimated non-cash charge of approximately $15.8
million to bad debt expense incurred during the first quarter of fiscal 2020 at
the onset of the Pandemic, partially offset by cost measures implemented during
the year in response to the Pandemic's adverse impact on demand for our
products. Our ratio of selling, general and administrative expenses to net sales
was higher as a result of the Pandemic's adverse impacts on our sales growth and
a 161 basis point increase in non-cash charges related to bad debt expense.

Other operating expenses, net

                                          2020         2019       $ Change       % Change
            Other operating expenses     14,417       6,359       8,058           126.7  %



The increase in other operating expenses relates primarily to a $24.2 million
impairment charge on Del Monte and Bassian trademarks and non-cash credits of
$11.5 million for changes in the fair value of our contingent earn-out
liabilities compared to non-cash charges of $5.9 million in the prior year
period.

Interest Expense

                                       2020          2019        $ Change      % Change
               Interest expense       20,946        18,264      $  2,682         14.7  %



Interest and other expense increased primarily due to $1.2 million in one-time
third-party costs incurred during the second quarter of 2020 in connection with
the extension of a majority of our senior secured term loans and the full year
impact of interest charged on our Convertible Senior Notes issued on November
22, 2019.

Provision for income tax (benefits)


                                                  2020          2019        

$ Change % Change

  Provision for income tax (benefit) expense    (40,703)       8,210       $ (48,913)      (595.8) %
  Effective tax rate                               32.9  %      25.3  %



The higher effective tax rate is primarily related to our net taxable loss for
fiscal 2020 which allows us to claim tax refunds against taxes paid in fiscal
2015 and 2017, both of which were at statutory tax rates of 35%.

Cash and capital resources

We fund our ongoing operations and growth primarily through operating cash flow, borrowings under our senior secured credit facilities and other indebtedness, operating leases, trade and equity financing.

Debt


The following table presents selected financial information on our indebtedness
(in thousands):

                                            December 24, 2021           December 25, 2020           December 27, 2019
Senior secured term loan                  $          168,675          $          201,553          $          238,129
Total convertible debt                    $          204,000          $          154,000          $          154,000
Borrowings outstanding on asset-based
loan facility                             $           20,000          $           40,000          $                -
Finance leases and other financing
obligations                               $           11,602          $           15,798          $            3,905



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As of December 24, 2021, we have various floating- and fixed-rate debt
instruments with varying maturities for an aggregate principal amount of $392.7
million. See Note 9 "Debt Obligations" to our consolidated financial statements
for a full description of our debt instruments.

On March 1, 2021, the we issued $50.0 million aggregate principal amount of
1.875% Convertible Senior Notes at a premium which were offered as an additional
issuance of our $150.0 million Convertible Senior Notes due 2024 issued on
November 22, 2019. Net proceeds were used to repay all outstanding borrowings
under the our 2022 tranche of senior secured term loans of $31.2 million and
repay a portion of borrowings outstanding under our asset-based loan facility.
We incurred transaction costs of approximately $1.4 million which were
capitalized as deferred financing fees to be amortized over the term of the
underlying debt.

On June 8, 2020, we amended our senior secured credit agreement which converted
$238.1 million of the term loans then outstanding into a new tranche of term
loans (the "2025 Tranche"), which, among other things, extended the maturity
date by three years and increased the fixed-rate portion of interest charged by
200 basis points. The Company made a prepayment of $35.7 million on the 2025
Tranche immediately after it was established. See Note 9 "Debt Obligations" to
our consolidated financial statements for a full description.

On March 18, 2020, we drew $100.0 million on our asset-based loan facility to
increase our cash on hand during the early stages of the Pandemic's impact to
our business and have subsequently repaid $80.0 million of the draw.

On November 22, 2019, we issued $150.0 million aggregate principal amount of
1.875% Convertible Senior Notes (the "Senior Notes"). Approximately $43.2
million of the net proceeds were used to repay all borrowings then outstanding
under our ABL and the remainder was used for working capital, general corporate
purposes and acquisitions.

A portion of the interest rate charged on our Term Loan is currently based on
LIBOR and, at our option, a component of the interest charged on the borrowings
outstanding on our ABL, if any, may bear interest rates based on LIBOR. LIBOR
has been the subject of reform and was expected to phase out by the end of
fiscal 2021, however, on November 30, 2020, the ICE Benchmark Administration
Limited ("ICE") announced plans to delay the phase out of LIBOR to June 30,
2023. The consequences of the discontinuation of LIBOR cannot be entirely
predicted but could impact the interest expense we incur on these debt
instruments. We will negotiate alternatives to LIBOR with our lenders before
LIBOR ceases to be a widely available reference rate.

Share offering

At May 14 and June 2, 2020we completed public offerings for a total of 6,634,615 common shares, which generated net proceeds of approximately $85.9 million. See Note 10 “Equity” to our consolidated financial statements for a complete description.

Liquidity


The following table presents selected financial information on liquidity (in
thousands):

                                             December 24, 2021           December 25, 2020           December 27, 2019
Cash and cash equivalents                  $          115,155          $          193,281          $          140,233
Working capital,(1) excluding cash and
cash equivalents                           $          157,787          $           94,279          $          162,772
Availability under asset-based loan
facility                                   $          109,459          $           50,282          $           90,015


(1) We define working capital as current assets less current liabilities.


We believe our existing balances of cash and cash equivalents, working capital
and the availability under our asset-based loan facility, are sufficient to
satisfy our working capital needs, capital expenditures, debt service and other
liquidity requirements associated with our current operations over the next
twelve months.

Our capital expenditures, excluding cash paid for acquisitions, were approximately $38.8 million for fiscal 2021. We estimate that our capital expenditures, excluding cash paid for acquisitions, for fiscal 2022 will be approximately $35.0 million for $45.0 million.






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Cash Flows

                                                                       Fiscal Year Ended
                                           December 24, 2021           December 25, 2020           December 27, 2019
Net (loss) income                        $           (4,923)         $          (82,903)         $           24,193
Non-cash charges                         $           47,372          $           62,509          $           47,625
Changes in working capital               $          (62,348)         $           63,275          $          (26,811)
Cash (used in) provided by operating
activities                               $          (19,899)         $           42,881          $           45,007

Cash flows used in investing activities $ (48,991) $

     (67,968)         $          (44,154)
Cash (used in) provided by financing
activities                               $           (9,222)         $           78,056          $           96,947



Fiscal Year 2021 Cash Flows

Net cash used in operations was $19.9 million for fiscal 2021 consisting of a
$4.9 million net loss and and investments in working capital of $62.3 million,
partially offset by $47.4 million of non-cash charges. Non-cash charges
decreased predominately due to the $24.2 million write down of Del Monte and
Bassian trademarks in fiscal 2020. The cash used in working capital of $62.3
million is primarily driven by reinvestment in working capital to support
growth.

Net cash used in investing activities was $49.0 million in fiscal 2021 driven by
$38.8 million in capital expenditures which included the build-outs of our Los
Angeles, New England and Miami distribution facilities. We used $10.2 million in
cash to fund several acquisitions.

Net cash used in financing activities was $9.2 million for fiscal 2021 driven by
$37.6 million of payments made on senior term loans and finance lease
obligations and a $20.0 million payment on our asset-based loan facility,
partially offset by $51.8 million of proceeds from the issuance of additional
convertible senior notes.

Fiscal Year 2020 Cash Flows

Net cash provided by operations was $42.9 million for fiscal 2020 consisting of
a $82.9 million net loss, offset by $62.5 million of non-cash charges and an
increase in working capital of $63.3 million. Non-cash charges increased
predominately due to the $24.2 million write down of Del Monte and Bassian
trademarks. The increase in working capital of $63.3 million is primarily driven
by negotiating favorable credit terms with our customers and suppliers and
maintaining lower inventory balances as a result of reduced demand due to the
Pandemic.

Net cash used in investing activities was $68.0 million in fiscal 2020 driven by
$7.0 million in capital expenditures which included implementations of our
Enterprise Resource Planning ("ERP") system. We used $60.9 million in cash to
fund acquisitions, the most significant of which were Sid Wainer and Cambridge.

Net cash provided by financing activities was $78.1 million for the 2020 financial year carried by $85.9 million net proceeds from our common stock offering and $40.0 million net drawdowns on our asset-backed loan facility, partially offset by debt repayments and finance lease obligations of $40.4 million.

Seasonality


Excluding our Allen Brothers direct-to-consumer business, we generally do not
experience any material seasonality. However, our sales and operating results
may vary from quarter to quarter due to factors such as changes in our operating
expenses, management's ability to execute our operating and growth strategies,
personnel changes, demand for our products, supply shortages, weather patterns
and general economic conditions.

Our Allen Brothers direct-to-consumer business is subject to seasonal
fluctuations, with direct-to-consumer center-of-the-plate protein sales
typically higher during the holiday season in our fourth quarter; accordingly, a
disproportionate amount of operating cash flows from this portion of our
business is generated by our direct-to-consumer business in the fourth quarter
of our fiscal year. Despite a significant portion of these sales occurring in
the fourth quarter, there are operating expenses, principally advertising and
promotional expenses, throughout the year.

The pandemic has had a significant impact on our business and operations as well as those of our customers. Our net sales were most impacted during the second quarter of fiscal 2020 when, in an effort to limit the spread of the virus, federal, state,

                                       39
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and local governments began implementing various restrictions that resulted in
the closure of non-essential businesses in many of the markets we serve, which
forced our customers in those markets to either transition their establishments
to take-out service, delivery service or temporarily cease operations.

Inflation


Our profitability is dependent on, among other things, our ability to anticipate
and react to changes in the costs of key operating resources, including food and
other raw materials, labor, energy and other supplies and services. Substantial
increases in costs and expenses could impact our operating results to the extent
that such increases cannot be passed along to our customers. The impact of
inflation on food, labor, energy and occupancy costs can significantly affect
the profitability of our operations.

Significant contractual commitments and obligations

The following table summarizes our contractual obligations and commercial commitments to December 24, 2021:

Payments due per period (1, 2)

                                                                      Less than One           1-3                4-5
                                                      Total               Year               Years              Years            Thereafter
                                                                                         (In thousands)

Indebtedness                                       $ 403,991          $    5,662          $ 234,790          $ 163,539          $        -
Finance lease obligations                          $  12,748          $    3,834          $   5,553          $   3,192          $      169
Pension exit liabilities                           $   1,861          $      170          $     375          $     428          $      888
Long-term operating leases                         $ 216,423          $   24,726          $  38,167          $  27,644          $  125,886

Total                                              $ 635,023          $   34,392          $ 278,885          $ 194,803          $  126,943



(1)Interest on our various outstanding debt instruments is included in the above
table, except for our Term Loans and ABL, which have floating interest rates. At
December 24, 2021, we had borrowings of $168.7 million under our Term Loans and
$20.0 million under our ABL. See Note 9 "Debt Obligations" to our consolidated
financial statements for further information on our debt instruments.
(2)The table above excludes $6.9 million of total contingent earn-out
liabilities related to certain acquisitions as of December 24, 2021 and
approximately $10.0 million of lease payments related leases for distribution
facilities that do not commence until fiscal 2022.

We had outstanding letters of credit of approximately $20.5 million and $20.1
million at December 24, 2021 and December 25, 2020, respectively. Substantially
all of our assets are pledged as collateral to secure our borrowings under our
credit facilities.

Off-balance sheet arrangements

From December 24, 2021we had no off-balance sheet arrangements, as defined in Section 303(a)(4)(ii) of Regulation SK.

Critical accounting policies


The preparation of our consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. The SEC has defined critical accounting policies as those that are
both most important to the portrayal of our financial condition and results and
require our most difficult, complex or subjective judgments or estimates. Based
on this definition, we believe our critical accounting policies include the
following: (i) determining our allowance for doubtful accounts, (ii) inventory
valuation, with regard to determining inventory balance adjustments for excess
and obsolete inventory, (iii) business combinations, (iv) valuing goodwill and
intangible assets, (v) self-insurance reserves, (vi) accounting for income taxes
and (vii) contingent earn-out liabilities. For all financial statement periods
presented, there have been no material modifications to the application of these
critical accounting policies.

Allowance for doubtful accounts

We analyze customer creditworthiness, customer account balances, payment history, payment terms and bad debt history

                                       40
--------------------------------------------------------------------------------

levels when evaluating the adequacy of our allowance for doubtful accounts. In
instances where a reserve has been recorded for a particular customer, future
sales to the customer are either conducted using cash-on-delivery terms or the
account is closely monitored so that agreed-upon payments are received prior to
orders being released. A failure to pay results in held or cancelled orders. We
also estimate receivables that will ultimately be uncollectible based upon
historical write-off experience. Management incorporates current macro-economic
factors in existence as of the balance sheet date that may impact the
food-away-from-home industry and/or its customers, and specifically, beginning
in the first quarter of fiscal 2020, the impact of the Pandemic. We may be
required to increase or decrease our allowance for doubtful accounts due to
various factors, including the overall economic environment and particular
circumstances of individual customers. Our accounts receivable balance was
$172.5 million and $96.4 million, net of the allowance for doubtful accounts of
$20.3 million and $24.0 million, as of December 24, 2021 and December 25, 2020,
respectively.

Inventory Valuation

We adjust our inventory balances for excess and obsolete inventories. These
adjustments are primarily based upon customer demand, inventory age,
specifically identified inventory items and overall economic conditions. A
sudden and unexpected change in consumer preferences or change in overall
economic conditions could result in a significant change to these adjustments
that could require a corresponding charge to earnings. We actively manage our
inventory levels as we seek to minimize the risk of loss and have consistently
achieved a relatively high level of inventory turnover. As a result of the
impacts of the Pandemic on our customer demand we incurred additional inventory
valuation charges of $14.6 million in fiscal 2020.

Business combinations


We account for acquisitions in accordance with Accounting Standards Codification
Topic 805 "Business Combinations." Assets acquired and liabilities assumed are
recorded at their estimated fair values, as of the acquisition date. The
judgments made in determining the estimated fair value of assets acquired and
liabilities assumed, including estimated useful life, may have a material impact
on our consolidated balance sheet and may materially impact the amount of
depreciation and amortization expense recognized in periods subsequent to the
acquisition. We determine the fair value of intangible assets using an income
approach and, when appropriate, we engage a third party valuation firm.
Generally, we utilize the multi-period excess earnings method to determine the
fair value of customer relationships and the relief from royalty method to
determine the fair value of tradenames. These valuation methods contain
significant assumptions and estimates including forecasts of expected future
cash flows and discount rates. Determining the useful life of an intangible
asset also requires judgment, as different types of intangible assets will have
different useful lives. The excess of the purchase price over the fair values of
identifiable assets and liabilities is recorded as goodwill.

Valuation of Good will and intangible assets


We are required to test goodwill for impairment at each of our reporting units
annually, or more frequently when circumstances indicate an impairment may have
occurred. We have elected to perform our annual tests for indications of
goodwill impairment during the fourth quarter of each fiscal year.

Goodwill is tested at the reporting unit level, which is an operating segment or
a component of an operating segment. When analyzing whether to aggregate
components into single reporting units, management considers whether each
component has similar economic characteristics. We have evaluated the economic
characteristics of our different geographic markets, including our recently
acquired businesses, along with the similarity of the operations and margins,
nature of the products, type of customer and methods of distribution of products
and the regulatory environment in which we operate and concluded that the
business consists of three operating segments: East Coast, Midwest and West
Coast and these operating segments represent our reporting units.

In testing goodwill for impairment, we may elect to perform a qualitative
assessment to evaluate whether it is more likely than not that the fair value of
each reporting unit is less than its carrying amount. The qualitative analysis
considers various factors including macroeconomic conditions, market conditions,
industry trends, cost factors and financial performance, among others. If our
qualitative assessment indicates that goodwill impairment is more likely than
not, we proceed to perform a quantitative assessment to determine the fair value
of the reporting unit.

When a quantitative analysis is required, we estimate the fair value of our
reporting units using an income approach that incorporates the use of a
discounted cash flow model that involves many management assumptions that are
based upon future growth projections. Assumptions include estimates of future
revenue based upon budget projections and growth rates which include estimates
for the duration of the Pandemic's impact on the Company's customers. We develop
estimates of future levels of gross and operating profits and projected capital
expenditures. This methodology includes the use of estimated discount rates
                                       41
--------------------------------------------------------------------------------

based upon industry and competitor analysis as well as other factors. A goodwill
impairment loss, if any, would be recognized for the amount by which a reporting
unit's carrying value exceeds its fair value.

For the year ended December 24, 2021the Company has assessed the recoverability of goodwill using qualitative analysis and has determined that it is more likely than not that the fair value of its reporting units will exceed their respective carrying values.


Due to the Pandemic's adverse impact on our business in fiscal 2020, we
performed an interim quantitative goodwill impairment test as of March 27, 2020
and concluded that goodwill was not impaired. We performed our annual goodwill
impairment test during the fourth quarter of fiscal 2020 using a quantitative
analysis, the results of which indicated that goodwill was not impaired. Total
goodwill as of December 24, 2021 and December 25, 2020 was $221.8 million and
$214.9 million, respectively.

Definite life intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The cash flows expected to be generated by the related assets are estimated over the useful life of the assets based on discounted projections. If the assessment indicates that the carrying amount of the asset may not be recoverable, the potential impairment is assessed based on a discounted cash flow model.


During the second quarter of fiscal 2021, we committed to a plan to shift our
brand strategy to leverage the Allen Brothers brand in our New England region
and determined the Cambridge trademark did not fit our long-term strategic
objectives. As a result, we recognized a $0.6 million impairment charge, $0.4
million net of tax, to fully write-down the net book value of our Cambridge
trademark

During the fourth quarter of fiscal 2020, we committed to a plan to shift our
brand strategy to leverage our Allen Brothers brand in our west coast region and
determined our Del Monte, Ports Seafood and Bassian Farms trademarks did no fit
our long-term strategic objectives. This brand transition began in the second
quarter of fiscal 2021. The Company assessed these trademarks for impairment and
used the relief of royalty method to determine fair value. Significant
assumptions used include future sales forecasts, royalty rates and discount
rates. As a result, we recorded a $24.2 million impairment charge, $17.5 million
net of tax, to write-down the value of our Del Monte and Bassian Farms
trademarks.

There have been no other events or changes in circumstances during fiscal 2021
or 2020 indicating that the carrying value of our finite-lived intangible assets
are not recoverable. Total finite-lived intangible assets as of December 24,
2021 and December 25, 2020 were $104.7 million and $111.7 million, respectively.

The assessment of the recoverability of goodwill and intangible assets contain
uncertainties requiring management to make assumptions and to apply judgment to
estimate economic factors and the profitability of future operations. Actual
results could differ from these assumptions and projections, resulting in us
revising our assumptions and, if required, recognizing an impairment loss.

Self-insurance reserves


We maintain a self-insured group medical program. The program contains
individual stop loss thresholds of $300 thousand per incident and aggregate stop
loss thresholds based upon the average number of employees enrolled in the
program throughout the year. The amount in excess of the self-insured levels is
fully insured by third party insurers. Liabilities associated with this program
are estimated in part by considering historical claims experience and medical
cost trends. Projections of future loss expenses are inherently uncertain
because of the random nature of insurance claims occurrences and could be
significantly affected if future occurrences and claims differ from these
assumptions and historical trends.

We are self-insured for workers' compensation and automobile liability to
deductibles or self-insured retentions of $500 thousand per occurrence. The
amounts in excess of our deductibles are fully insured by third party insurers.
Liabilities associated with this program are estimated in part by considering
historical claims experience and cost trends. Projections of future loss
expenses are inherently uncertain because of the random nature of insurance
claims occurrences and could be significantly affected if future occurrences and
claims differ from these assumptions and historical trends.

Income taxes


The determination of our provision for income taxes requires significant
judgment, the use of estimates and the interpretation and application of complex
tax laws. Our provision for income taxes primarily reflects a combination of
income earned and taxed in the various U.S. federal and state jurisdictions.
Jurisdictional tax law changes, increases or decreases in permanent
                                       42
--------------------------------------------------------------------------------

differences between accounting and tax items, accruals or accrual adjustments for unrecognized tax benefits, and our change in the earnings mix of these tax jurisdictions all affect the effective tax rate global.


We estimate our ability to recover deferred tax assets within the jurisdiction
from which they arise. This evaluation considers several factors, including
recent results of operations, scheduled reversal of deferred tax liabilities,
future taxable income and tax planning strategies. As of December 24, 2021 and
December 25, 2020, we had valuation allowances of $2.0 million and $2.3 million,
respectively, relating to certain net operating losses that may not be
realizable in the future based on taxable income forecasts and certain state net
operating loss limitations.

Conditional commitments related to price supplements


We account for contingent consideration relating to business combinations as a
liability and an increase to goodwill at the date of the acquisition and
continually remeasure the liability at each balance sheet date by recording
changes in the fair value through our consolidated statements of operations. We
determine the fair value of contingent consideration based on future operating
projections under various potential scenarios, including the use of Monte Carlo
simulations, and weight the probability of these outcomes. The ultimate
settlement of contingent earn-out liabilities relating to business combinations
may be for amounts which are materially different from the amounts initially
recorded and may cause volatility in our results of operations.

Management has discussed the development and selection of these critical
accounting policies with our board of directors, and the board of directors has
reviewed the above disclosure. Our consolidated financial statements contain
other items that require estimation, but are not as critical as those discussed
above. These other items include our calculations for bonus accruals,
depreciation and amortization. Changes in estimates and assumptions used in
these and other items could have an effect on our consolidated financial
statements.

Recent accounting pronouncements


See Note 1 "Operations and Basis of Presentation" to our consolidated financial
statements for a full description of recent accounting pronouncements including
the respective expected dates of adoption and expected effects on our
consolidated financial statements.

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© Edgar Online, source Previews

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Stationery Market [2022-2028] Insights and forecasts https://eventplaner.net/stationery-market-2022-2028-insights-and-forecasts/ Thu, 17 Feb 2022 05:44:34 +0000 https://eventplaner.net/stationery-market-2022-2028-insights-and-forecasts/

Pune, 17 Feb. 2022 (GLOBE NEWSWIRE) — The Global Stationery Market The 2022 research report provides a top to bottom analysis of crucial aspects such as growth drivers, major challenges and opportunities that will impact industry trends during the forecast period. It offers precisely the information needed, along with advanced analytics, to help develop the best business strategy and determine the best path for maximum growth for market players. It thoroughly explores the geographical landscape of the market, focusing on crucial factors such as sales achieved, revenue generated, growth rate and prospects of regional markets. Apart from this, the industry is also studied from the perspective of product terrain and application spectrum. Detailed revenue information, sales volume forecast of each product type are presented.

Get a sample PDF of the report – https://www.marketreportsworld.com/enquiry/request-sample/19921037

Additionally, the research report provides in-depth data on major factors influencing Stationery market growth at country and local level, market size forecast, in terms of value, market share by region and segment , regional market positions, segment and growth opportunities by country, key company profiles, SWOT, product portfolio and growth strategies.

Impact of Covid-19 on the stationery industry:

Covid-19 pandemic has negatively impacted Stationery Market. with industrialists. Major companies have suspended operations in different locations due to lockdown and social distancing norms. After the pandemic, the industry expects a lot of requirements and demands due to the rapid urbanization and the increasing need for rational use of the present area.

COVID-19 (Coronavirus) Global Market Conditions and Competitors:- In this report, analysts compile existing research on COVID-19, share key insights and help the reader spot new market opportunities related to the pandemic. Topics include product development pipelines, diagnostic testing approaches, vaccine development programs, regulatory approvals and more.

About Stationery Market:

Stationery is a mass noun referring to commercially produced writing materials, including cut paper, envelopes, writing instruments, continuous stationery, and other supplies. Stationery includes writing instruments, paper products, office stationery and other stationery.

Get Sample Copy of Stationery Market Research Report 2022

This report gives a detailed description of all the factors influencing the growth of these market players along with their company profiles, product portfolios, marketing strategies, technology integrations and more information about these market players. Some of the major players are:

Leading companies reviewed in the Stationery Market‎ report are:

  • KOKUYO Co, Ltd
  • Shachihata
  • pentel
  • PILOT COMPANY
  • United Mitsubishi
  • Lexi Pens
  • Shanghai M&G Stationery
  • Grocery store
  • Shenzhen Comix Group
  • Beifa Group
  • Wenzhou Aihao pen
  • true color
  • Guangbo Group
  • Snow White Stationery
  • ICC
  • Navnet
  • GM International Pens
  • Cello Corporate (BIC)
  • Ballarpur Industries

Global stationery market: Pilots and Withholdings

The research report has integrated the analysis of different factors which are increasing the growth of the market. It constitutes trends, restraints and drivers that transform the market either positively or negatively. This section also provides the scope of different segments and applications that can potentially influence the market in the future. Detailed information is based on current trends and historical milestones. This section also provides an analysis of the production volume in the global market and each type.

A thorough assessment of the restrictions included in the report portrays the contrast with the drivers and gives room for strategic planning. Factors that overshadow the growth of the market are pivotal as they can be understood to devise different bends for getting hold of the lucrative opportunities that are present in the ever-growing market. Additionally, insights into the opinions of market experts have been taken to better understand the market.

Learn more and share questions, if any, before purchase on this report at – https://www.marketreportsworld.com/enquiry/pre-order-enquiry/19921037

Overall, the report proves to be an effective tool that players can utilize to gain a competitive edge over their competitors and ensure sustainable success in the global Stationery Market. All conclusions, data and information provided in the report are validated and revalidated using reliable sources. The analysts authoring the report have adopted a unique and industry-leading research and analytical approach for an in-depth study of the global stationery market.

Global Stationery Market: Segment Analysis

The research report includes specific segments by region (country), by company, by type and by application. This study provides information on sales and revenue over the historical and forecast period. Understanding the segments helps to identify the importance of different factors contributing to market growth.

By type:

  • writing instrument
  • Paper products
  • Office stationery
  • Other

Per application:

  • school
  • Government and Commercial
  • home and hobby
  • Other

Get Sample Copy of Stationery Market Research Report 2022

Geographic segment covered in the report:

The Stationery report provides information on the market area, which is further sub-divided into sub-regions and countries/regions. In addition to the market share in each country and sub-region, this chapter of this report also contains information on profit opportunities. This chapter of the report mentions the market share and growth rate of each region, country and sub-region over the estimated period.

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East and Africa

The objectives of the study for this report are:

  • To study and analyze the global Stationery market size (value & volume) by company, key regions/countries, products and application, historical data and forecast.
  • To understand the structure of Stationery market by identifying its various subsegments.
  • Share detailed information on key factors influencing market growth (growth potential, opportunities, drivers, industry-specific challenges and risks).
  • Focuses on the key global Stationery manufacturers, to define, describe and analyze the sales volume, value, market share, market competition landscape, SWOT analysis and development plans during the coming years.
  • To analyze the Stationery with respect to individual growth trends, future prospects, and their contribution to the total market.
  • To project the value and volume of Stationery submarkets, with respect to key regions (along with their respective key countries).
  • Analyze competitive developments such as expansions, agreements, new product launches and acquisitions in the market.
  • Establish a strategic profile of key players and analyze in depth their growth strategies.

This Stationery Market Research/Analysis Report Contains Answers to Your Following Questions

  • What manufacturing technology is used for Stationery? What are the ongoing developments in this technology? What trends are driving these developments?
  • Who are the Global Key Players in this Stationery Market? What are their company profiles, product information and contact details?
  • What Was Global Market Status of Stationery Market? What Was Capacity, Production Value, Cost and PROFIT of Stationery Market?
  • What is the current market status of stationery industry? What is the market competition in this industry, both at company and country level? What’s Market Analysis of Stationery Market Considering Applications and Types?
  • What is the projection of the global stationery industry considering capacity, production, and production value? What will be the estimate of cost and profit? What will be the market share, supply and consumption? What about import and export?
  • What is Stationery Market Chain Analysis by Upstream Raw Materials and Downstream Industry?
  • What is the economic impact on the stationery industry? What are the results of the analysis of the global macroeconomic environment? What are the development trends of the global macroeconomic environment?
  • What Are Market Dynamics of Stationery Market? What are the challenges and opportunities?
  • What should be the entry strategies, countermeasures to economic impact, and marketing channels for Stationery industry?

Buy this report (Price 4900 USD for single user license) – https://www.marketreportsworld.com/purchase/19921037

Detailed TOC of Global Stationery Market Report 2022

1 Coverage of the study

1.1 Stationery Product Introduction
1.2 Market by Type
1.2.1 Global Stationery Market Size Growth Rate by Type, 2017 VS 2021 VS 2028
1.2.2 Writing instrument
1.2.3 Paper products
1.2.4 Office stationery
1.2.5 Other
1.3 Market by Application
1.3.1 Global Stationery Market Size Growth Rate by Application, 2017 VS 2021 VS 2028
1.3.2 School
1.3.3 Government and commercial
1.3.4 Home and hobby
1.3.5 Other
1.4 Objectives of the study
1.5 years considered

2 Executive summary

2.1 Global Stationery Sales Estimates and Forecasts 2017-2028
2.2 Global Stationery Revenue Estimates and Forecasts 2017-2028
2.3 Global Stationery Revenue by Region: 2017 VS 2021 VS 2028
2.4 Global Stationery Sales by Region
2.4.1 Global Stationery Sales by Region (2017-2022)
2.4.2 Global Stationery Sales by Region (2023-2028)
2.5 Global Stationery Revenue by Region
2.5.1 Global Stationery Revenue by Region (2017-2022)
2.5.2 Global Stationery Revenue by Region (2023-2028)

3 Manufacturer competition

4 Market Size by Type

5 Market Size by Application

6 North America

7Europe

8 Asia-Pacific

9 Latin America

10 Middle East and Africa

11 company profiles

12 Industry Chain and Sales Channels Analysis

13 Analysis of Market Drivers, Opportunities, Challenges and Risk Factors

14 Key Findings from the Global Stationery Study

15 Appendix

Continued….

Browse Full Table of Contents at – https://www.marketreportsworld.com/TOC/19921037#TOC

About Us: –

Market Reports World is the credible source for getting the market reports that will give you the head start your business needs. The market is changing rapidly with the continuous expansion of the industry. Technological advancements have provided today’s businesses with multi-faceted benefits driving daily economic changes. Thus, it is very important for a business to understand the patterns of market movements in order to better strategize. An effective strategy gives companies a head start in planning and an advantage over their competitors.

        
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		COVID Restoration Loans: Guidelines for Rebuilding Your Business
		https://eventplaner.net/covid-restoration-loans-guidelines-for-rebuilding-your-business/
		
		
		Tue, 15 Feb 2022 04:56:33 +0000
				
		
		https://eventplaner.net/?p=5748

					
										It’s no secret that the COVID outbreak has left small-scale entrepreneurs reeling. Rebuilding your company after an event of natural destruction isn’t easy however, with the aid of COVID restoration loans it’s not an impossible task. This article we’ll review the requirements for getting these loans, and provide strategies for rebuilding your company following this devastating disaster.

The COVID pandemic has caused many problems for businesses across the globe. If your company was damaged by the COVID pandemic, then you could be wondering if there’s any loans for restoration that can aid in the recovery of your business. It’s true! In this blog we will go over the steps to apply for the COVID rehabilitation loan at Oak Park Financial Lending. We will also give you information on how you can make an application for these loans. Keep going!

What are the requirements for COVID rehabilitation loans ?

There are two kinds of COVID loan for restoration that are available through the Small Business Administration (SBA) which are: Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) loans. The two types of EIDL and PPP loans can be submitted online at any nearest SBA district office, or a participating credit union or bank.

To be eligible to be eligible for an EIDL business must have been operating up to the date of February, and must not have at least 500 staff members at any point during that time; meet the other eligibility requirements established by law, including those related to the business owner’s personal finances. They must also demonstrate an economic loss due to COVID-19-related pandemics, such as the loss of revenue resulting solely from of the effects of a disaster.

To be eligible to be eligible for the PPP loan, companies must have been operating up to the date of February, and must not have greater than 500 staff members at any point during the period, and meet the other eligibility requirements set in law, including those related to personal financial situation.

Additionally to that, the SBA has also waived a few of its standard collateral and credit score requirements for both types of loans.

If your company was impacted by COVID-19, you might consider making an application for one of the loans. Remember that the guidelines above are just a general overview. ensure you speak with the SBA representative or banks or credit unions to find out more details about the specific requirements for eligibility.

How do you apply for an COVID rehabilitation loan?

You are able to apply for an COVID rehabilitation loan on the internet via the nearest SBA district office, or through a participating credit union or bank. The SBA has lowered some of its standard collateral and credit score requirements, making it easier than ever before to apply for any of the loans.

Be aware that the guidelines above are only a general overview. ensure you speak with your SBA representative or bank or credit union to get more details on the specific requirements for eligibility. If you’ve been affected by COVID-19 don’t put off applying begin the application process now!

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Supreme owner VF Corp slashes full-year revenue forecast amid supply chain chaos https://eventplaner.net/supreme-owner-vf-corp-slashes-full-year-revenue-forecast-amid-supply-chain-chaos/ Mon, 31 Jan 2022 09:44:02 +0000 https://eventplaner.net/supreme-owner-vf-corp-slashes-full-year-revenue-forecast-amid-supply-chain-chaos/
VF Corporation bought global streetwear brand Supreme for £1.6 billion in December 2020.
// VF Corporation tumbles after slashing revenue outlook amid supply chain issues
// The company, which owns brands including The North Face, Supreme and Vans, now expects fiscal 2022 revenue to be around $11.85 billion.

Shares of VF Corp fell after slashing its revenue outlook for the year amid slowing sportswear brands and international sales.

The group also said it was hit by delivery delays and labor shortages at Vietnamese factories due to the Covid-19 pandemic.

The maker of Vans, Supreme and The North Face now expects revenue of around $11.85 billion for the fiscal year ending around April 1, down from an earlier forecast of around $12 billion. of dollars.


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Adjusted gross margin is now expected to be at least 55%, down one percentage point from the company’s October guidance.

Operating profit rose 40% to £479m in the three months, while direct-to-consumer revenue was up 30% in the quarter, while digital revenue was up 21% d one year to the next.

International revenue increased by 19%, including revenue in Europe, which increased by 26%. However, Greater China revenue fell 6%, including an 8% decline in Mainland China.

In EMEA, 6% of stores were closed during the third quarter, while in North America, stores were open. In the Asia-Pacific region, including mainland China, almost all stores were open at the start of the third quarter.

The company’s active segment, which is driven by revenue from its Vans brand, missed consensus revenue expectations, reporting $1.41 billion while analysts had expected $1.45 billion.

In October, VF said Active’s sales in China were hurt by weaker digital traffic for non-domestic brands.

Revenue for the full year to April 1, 2022 is expected to be £8.8bn, compared to VF’s previous estimate of £9bn.

VF said manufacturing capacity constraints related to Covid-19 continued during the third quarter, although “the situation has improved over time” and the company said it expects to return to almost full capacity in the coming weeks.

“In addition, continued port congestion, equipment availability and other logistical challenges have contributed to continued product delays. VF works with its suppliers to minimize disruption and uses expedited freight as required. VF’s fulfillment centers are operating in accordance with local government guidelines while maintaining enhanced health and safety protocols.

“We delivered strong double-digit revenue and earnings results and returned approximately $500 million in cash to shareholders in the third quarter, which was achieved amid continued macroeconomic headwinds,” said Steve Rendle, Chairman and CEO of VF.

VF Corporation bought global streetwear brand Supreme for £1.6 billion in December 2020.

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Lords watchdog launches inquiry into Michelle Mone over ‘VIP lane’ contract | Conservatives https://eventplaner.net/lords-watchdog-launches-inquiry-into-michelle-mone-over-vip-lane-contract-conservatives/ Mon, 17 Jan 2022 17:22:00 +0000 https://eventplaner.net/lords-watchdog-launches-inquiry-into-michelle-mone-over-vip-lane-contract-conservatives/

The House of Lords standards commissioner has launched an inquiry into Tory colleague Michelle Mone, over the PPE firm which secured £203m government contracts via the ‘VIP route’ after referring her to the Cabinet Office in May 2020.

The investigation follows a complaint by Labor peer George Foulkes on January 6, after the Guardian reported that leaked files appeared to suggest that Lady Mone and her husband, Isle of Man-based financier Douglas Barrowman, were secretly involved with the company, PPE Medpro.

Foulkes asked the commissioners to investigate whether Mone may have breached the Lords’ code of conduct by failing to declare an interest in the business and pressuring her for government contracts.

The commissioner confirmed that the investigation would focus on “alleged involvement in securing contracts for Medpro PPE, resulting in potential breaches” of three provisions of the Lords Code, which cover the requirement that peers publicly record “all relevant interests”, and prohibit them from lobbying for a business or person in which a peer “has a financial interest”.

The commissioner also said Mone would be investigated under the more general provisions of paragraph 9 of the code, which states that peers “must always act on their personal honour”; must never accept “any financial inducement as an inducement or reward for exercising parliamentary influence”; and “shall not seek to profit from membership in the chamber by accepting or agreeing to accept payment or other inducement or reward in exchange for the provision of parliamentary advice or services”.

Mone, named a Conservative peer by David Cameron in 2015 after selling an 80% stake in her lingerie company Ultimo, has always denied any “role or function” in the business, and her lawyers have said she is not “not related to PPE Medpro in any capacity”.

The possible penalties for a peer found guilty of breaching the Code of Conduct, which are determined by the Conduct Committee, range from simply having to correct a breach to the most serious penalty of expulsion from the Lords.

PPE Medpro won an £80.85m contract in May 2020 to supply face masks, followed by an £122m contract in June 2020 to supply 25m surgical gowns. Barrowman also denied being an investor, and his attorneys said he “was not personally involved in work for PPEM in connection with any PPE contracts.”

In December 2020, lawyers for Barrowman and the company also told the Guardian that: “Neither [Barrowman] nor has anyone involved in PPEM approached MPs, peers, government officials, ministers, NHS staff or other healthcare professionals as part of the government’s approach to offer to provide EAR.

The sole registered owner of the company registered in the UK is Anthony Page, who works for Barrowman’s family office at his Isle of Man financial services firm, Knox Group.

In November 2021, following a freedom of information request pursued by the Good Law Project, the government revealed that Mone had initially referred PPE Medpro to the Cabinet Office, contacting the office of Minister Theodore Agnew, his colleague curator who was in charge of purchases during the Covid pandemic. More recently, the government confirmed that Mone made this referral on May 7, 2020, five days before EPI Medpro was even set up.

Do you have any information about this story? Email david.conn@theguardian.com or (using a non-work phone) use Signal or WhatsApp to message +44 7584 640566

The Guardian reported on January 6 that leaked files appear to suggest Mone and Barrowman were involved in PPE Medpro business. A person closely involved with PPE Medpro claimed Barrowman was “part of the financial consortium that backed” the company and was even involved in initial conversations with the Department of Health and Social Care (DHSC).

The leaked files appear to suggest the UK company is actually a subsidiary of another company named PPE Medpro Ltd, registered in the Isle of Man a day earlier. Barrowman appears to have been personally involved in setting up deals for the Isle of Man company with a London import company, Loudwater Trade and Finance, who would source and supply the PPE.

In one of the deals, PPE Medpro (Isle of Man) said it would use its “extensive network to seek order contracts with the NHS and other government bodies in the British Isles”.

From the two contracts, to supply millions of face masks and surgical gowns, the Guardian understands that PPE Medpro may have made more than £40m in gross profit. The company declined to say whether that figure was accurate.

Representatives for Mone have said she has no interest in PPE Medpro and have denied any wrongdoing.

“The reason no interest in PPE Medpro appears in Baroness Mone’s register of interests is that no such interest exists,” her lawyer said in December 2020.

Barrowman’s lawyers said the Guardian’s reporting amounted to “sticking together” and was “largely incorrect”.

Mone’s lawyers said the Guardian reporting was “entirely based on supposition and speculation and not accuracy”, adding: “She is under no obligation to tell you anything.”

Representatives for Mone did not respond to requests for comment on the commissioner’s investigation.

Foulkes told the Guardian: ‘I welcome the commissioner’s decision to investigate what appear to be breaches of the code of conduct by Baroness Mone under three provisions dealing with non-registration of interests and paid lobbying.’

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