What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-16 compared with 2020-03-30 · 1121 added, 288 removed, 2 unchanged (100% of the section changed)

for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases

of Equity Securities

Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Units, Class A Common Stock and warrants are each traded on the NASDAQ under the symbols “CPAAU,”

“CPAA”

and “CPAAW”, respectively.

Our Units commenced public trading on July 18, 2019, and our Class A Common Stock and warrants

commenced public trading on September 9, 2019.

December 31, 2019, there was one holder of record of our Units, one holder of record of our Class A Common Stock.

of our Class B Common Stock and two holders of record of our warrants.

have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of

our initial business combination.

The payment of cash dividends in the future will be dependent upon our revenues and earnings,

if any, capital requirements and general financial condition subsequent to completion of our initial business combination.

payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors

at such time.

In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends

in the foreseeable future.

Further, if we incur any indebtedness in connection with our initial business combination, our ability

to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Class A common stock and Warrants are currently listed on the Nasdaq Global Select Market under the symbols ADV and ADVWW, respectively.

Prior to the consummation of the Transactions (as herein defined), our Class A

common stock and our Warrants were listed on the Nasdaq Capital Market under the symbols CPAA and CPAAW, respectively.

As of December 31, 2020, there were 51 holders of record of our Class A common stock and 2

holders of record of our Warrants.

Dividend Policy

We have not paid any cash dividends on the Class A common stock to date.

We may retain future earnings, if any, for future operations,

expansion and debt repayment and has no current plans to pay cash dividends for the foreseeable future.

Any decision to declare and pay dividends in the future will be made at the discretion of the Board and will depend on, among other things, our

results of operations, financial condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant.

In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding

indebtedness we or our subsidiaries incur.

We do not anticipate declaring any cash dividends to holders of the Class A common stock in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

Recent Sales of Unregistered Securities;

Use of Proceeds from Registered Offerings

May 2, 2019, the sponsor paid $25,000, or approximately $0.002 per share, on behalf of the Company in exchange for a capital contribution

and in consideration of 11,500,000 shares of Class B Common Stock, par value $0.0001 per share.

Such securities were issued in

connection with the Company’s organization pursuant to the exemption from registration contained in Section 4(a)(2) of the

Securities Act.

On September 3, 2019, the remainder of the underwriters’

over-allotment option expired and the sponsor forfeited

250,000 Founder Shares.

As of December 31, 2019, there were 11,250,000 shares of Class B Common Stock outstanding.

July 22, 2019, the sponsor purchased 7,333,333 private placement warrants, each exercisable to purchase one share of Class A Common

Stock at $11.50 per share, at a price of $1.50 per warrant ($11,000,000 in the aggregate), in a private placement that closed

simultaneously with the closing of the initial public offering.

This issuance was made pursuant to the exemption from registration

contained in Section 4(a)(2) of the Securities Act.

underwriting discounts or commissions were paid with respect to such unregistered sales.

connection with the initial public offering we incurred offering costs of approximately $25.36 million (including underwriting

commissions of approximately $9.0 million and deferred underwriting commissions of approximately $15.75 million).

Other incurred

offering costs consisted principally preparation fees related to the initial public offering.

After deducting the underwriting

discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation of the initial business

combination, if consummated) and the initial public offering expenses, $450 million of the net proceeds from our initial public

offering and certain of the proceeds from the private placement of the private placement warrants (or $10.00 per Unit sold in

the initial public offering) was placed in the trust account.

The net proceeds of the initial public offering and certain proceeds

from the sale of the private placement warrants are held in the trust account and invested as described elsewhere in this Report.

has been no material change in the planned use of the proceeds from the initial public offering and private placement as is described

in the Company’s final prospectus related to the initial public offering and subsequent filings with the Commission.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Financial Data

Management’s

Discussion and Analysis of Financial Condition and Results of Operations

following discussion and analysis of our financial condition and results of operations should be read in conjunction with the

financial statements and the notes thereto contained elsewhere in this Report.

Certain information contained in the discussion

and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Note Regarding Forward-Looking Statements

statements other than statements of historical fact included in this Report, including, without limitation, statements under “Management’s

Discussion and Analysis of Financial Condition and Results of Operations”

regarding the Company’s financial position,

business strategy and the plans and objectives of management for future operations, are forward-looking statements.

in this Report, words such as “anticipate,”

“believe,”

“estimate,”

“expect,”

“intend”

and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements.

Such forward-looking

statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the

Company’s management.

Actual results could differ materially from those contemplated by the forward-looking statements as

a result of certain factors detailed in our filings with the Commission.

are a blank check company incorporated as a Delaware corporation on May 2, 2019 and formed for the purpose of effecting a

merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or

more businesses.

We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering

and the private placement of warrants that occurred simultaneously with the consummation of the initial public offering, our capital

stock, debt or a combination of cash, stock and debt.

issuance of additional shares of our stock in a business combination:

significantly dilute the equity interest of investors in our initial public offering,

which dilution would increase if the anti-dilution provisions in the Class B Common Stock

resulted in the issuance of shares of Class A Common Stock on a greater than one-to-one

basis upon conversion of the Class B Common Stock;

subordinate the rights of holders of our common stock if preferred stock is issued with

rights senior to those afforded our common stock;

cause a change in control if a substantial number of shares of our common stock is issued,

which may affect, among other things, our ability to use our net operating loss carry

forwards, if any, and could result in the resignation or removal of our present officers

and directors;

have the effect of delaying or preventing a change of control of us by diluting the stock

ownership or voting rights of a person seeking to obtain control of us;

adversely affect prevailing market prices for our Class A Common Stock and/or warrants.

if we issue debt securities, it could result in:

and foreclosure on our assets if our operating revenues after an initial business combination

are insufficient to repay our debt obligations;

● acceleration

of our obligations to repay the indebtedness even if we make all principal and interest

payments when due if we breach certain covenants that require the maintenance of certain

financial ratios or reserves without a waiver or renegotiation of that covenant;

immediate payment of all principal and accrued interest, if any, if the debt security

is payable on demand;

inability to obtain necessary additional financing if the debt security contains covenants

restricting our ability to obtain such financing while the debt security is outstanding;

inability to pay dividends on our common stock;

a substantial portion of our cash flow to pay principal and interest on our debt, which

will reduce the funds available for dividends on our common stock if declared, our ability

to pay expenses, make capital expenditures and acquisitions, and fund other general corporate

● limitations

on our flexibility in planning for and reacting to changes in our business and in the

industry in which we operate;

vulnerability to adverse changes in general economic, industry and competitive conditions

and adverse changes in government regulation;

● limitations

on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,

debt service requirements, and execution of our strategy;

purposes and other disadvantages compared to our competitors who have less debt.

indicated in the accompanying financial statements, at December 31, 2019, we had $951,060 in cash and cash equivalents.

to continue to incur significant costs in the pursuit of our acquisition plans.

We cannot assure you that our plans to complete

our initial business combination will be successful.

of Operations

the period from May 2, 2019 (inception) to December 31, 2019, we had a net income of approximately $2.5 million.

Our entire activity

from May 2, 2019 through December 31, 2019, consisted of formation and preparation for our initial public offering and since our

initial public offering, the search for a target business with which to consummate an initial business combination, and as such,

we had no operations and no significant operating expenses.

Subsequent to the closing of our initial public offering on July 22,

2019, our normal operating costs included costs associated with our search for the business combination, costs associated with

our governance and public reporting, state franchise taxes and charges of $10,000 per month from our sponsor for administrative

Our interest income earned on cash equivalents and marketable securities held in the trust account were approximately

$3.6 million.

and Capital Resources

the consummation of our initial public offering, our only sources of liquidity were an initial purchase of founder shares for

$25,000 by the sponsor and loans to us of up to $300,000 by our sponsor under an unsecured promissory note.

This promissory note

was non-interest bearing and was paid in full on July 22, 2019 in connection with closing of our initial public offering.

July 22, 2019, we consummated our initial public offering in which we sold 45,000,000 Units, including 5,000,000 overallotment

Units, at a price of $10.00 per Unit, generating gross proceeds of $450 million before underwriting discounts and expenses.

sponsor purchased an aggregate of 7,333,333 warrants at a price of $1.50 per warrant in a private placement that occurred simultaneously

with our initial public offering.

In connection with our initial public offering, we incurred offering costs of approximately

$25.36 million (including an underwriting discount of $9 million and a Deferred Discount of $15.75 million).

Other incurred offering

costs consisted principally of formation and preparation fees related to our initial public offering.

$450 million of the net

proceeds from our initial public offering and certain of the proceeds from the private placement of the private placement warrants

were deposited in a trust account established for the benefit of our public stockholders.

of December 31, 2019, we have available to us the $951,060 of cash and cash equivalents on our balance sheet.

We will use these

funds to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and

from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate

documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.

We are also entitled to up to $1,000,000 in interest from the trust account to be used for working capital purposes.

of interest available to us from the trust account may be less than $1,000,000 as a result of the current interest rate environment.

As of December 31, 2019, our interest income in the trust account is approximately $3.6 million.

order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination,

our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds

as may be required.

If we complete our initial business combination, we would repay such loaned amounts.

In the event that our

initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay

such loaned amounts but no proceeds from our trust account would be used for such repayment.

Up to $1,500,000 of such loans may

be convertible into warrants, at a price of $1.50 per warrant at the option of the lender.

The warrants would be identical to

the private placement warrants, including as to exercise price, exercisability and exercise period.

The terms of such loans by

our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.

not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties

will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

expect that we have sufficient resources subsequent to our initial public offering to fund our operations through July 22, 2021.

We do not believe we will need to raise additional funds following our initial public offering and the sale of our private placement

warrants in order to meet the expenditures required for operating our business.

However, if our estimates of the costs of identifying

a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual

amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination.

Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated

to redeem a significant number of our public shares upon completion of our business combination, in which case we may issue additional

securities or incur debt in connection with such business combination, which may include a specified future issuance.

to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our

business combination.

If we are unable to complete our initial business combination because we do not have sufficient funds available

to us, we will be forced to cease operations and liquidate the trust account.

In addition, following our initial business combination,

if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Sheet Financing Arrangements

have no obligations, assets or liabilities which would be considered off-balance sheet arrangements.

We do not participate in

transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest

entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt

or commitments of other entities, or entered into any non-financial assets.

granted the underwriters a 45-day option from the date of the final prospectus relating to the initial public offering to purchase

up to 6,000,000 Units to cover over-allotments, if any, at the initial public offering price less the underwriting discounts and

On July 22, 2019, the underwriters partially exercised their over-allotment option for 5,000,000 Units.

underwriters were entitled to underwriting discounts of $0.20 per unit, or $9.0 million in the aggregate, paid upon the closing

of the initial public offering.

In addition, $0.35 per unit, or approximately $15.75 million in the aggregate will be payable

to the underwriters for deferred underwriting commissions.

The deferred fee will become payable to the underwriters from the amounts

held in the trust account solely in the event that we complete a business combination, subject to the terms of the underwriting

Administrative

Support Agreement

on the date our securities were first listed on the NASDAQ, we agreed to pay our sponsor a total of $10,000 per month for office

space, utilities and secretarial and administrative support.

Upon completion of the initial business combination or our liquidation,

we will cease paying these monthly fees.

Accounting Policies

Securities Held in Trust Account

portfolio of investments held in Trust Account are comprised solely of U.S.

government securities, within the meaning set forth

in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less, classified as trading securities.

securities are presented on the balance sheet at fair value at the end of each reporting period.

Gains and losses resulting from

the change in fair value of these securities is included in gain on marketable securities (net), dividends and interest, held

in Trust Account in our statements of operations.

The fair value for trading securities is determined using quoted market prices

in active markets.

Common Stock Subject to Possible Redemption

of Class A Common Stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair

Conditionally redeemable shares of Class A Common Stock (including shares of Class A Common Stock that feature redemption

rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely

within our control) are classified as temporary equity.

At all other times, shares of Class A Common Stock are classified as stockholders’

Our shares of Class A Common Stock feature certain redemption rights that are considered to be outside of our control

and subject to the occurrence of uncertain future events.

Accordingly, at December 31, 2019, 43,313,166 shares of Class A Common

Stock subject to possible redemption at the redemption amount are presented as temporary equity, outside of the stockholders’

equity section of our balance sheet.

Income (Loss) Per Share of Common Stock

income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding

during the period.

We have not considered the effect of warrants sold in the initial public offering and private placement to

purchase 18,583,333 shares of Class A Common Stock in the calculation of diluted income per share, since their inclusion would

be anti-dilutive under the treasury stock method.

statements of operation include a presentation of income per share for shares of Class A Common Stock subject to redemption in

a manner similar to the two-class method of income per share.

Net income per share, basic and diluted for Class A common stock

are calculated by dividing the interest income earned on investments and marketable securities held in the trust account of approximately

$3.6 million, net of applicable taxes of $830,672 and $279,580 of working capital expenses (up to $1,000,000) available to be

withdrawn from the trust account, resulting in a total of $2,469,141 for the year ended December 31, 2019 by the weighted average

number of shares of Class A common stock outstanding for the period.

Net loss per share, basic and diluted for Class B common

stock is calculated by dividing the net income of $2,469,141, less income attributable to Class A common stock by the weighted

average number of shares of Class B common stock of $2,469,141 outstanding for the period.

Value of Financial Instruments

value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction

between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the

inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for

identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments

in active markets;

2, defined as inputs other than quoted prices in active markets that are either directly

or indirectly observable such as quoted prices for similar instruments in active markets

or quoted prices for identical or similar instruments in markets that are not active;

3, defined as unobservable inputs in which little or no market data exists, therefore

requiring an entity to develop its own assumptions, such as valuations derived from valuation

techniques in which one or more significant inputs or significant value drivers are unobservable.

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest

level input that is significant to the fair value measurement.

of December 31, 2019, the carrying values of cash, accounts payable and accrued expenses approximate their fair values due to

the short-term nature of the instruments.

The Company’s investments held in trust account is comprised of investments in

Treasury securities with an original maturity of 180 days or less and are recognized at fair value.

The fair value of investments

held in trust account is determined using quoted prices in active markets.

Growth Company

102(b)(1) of 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 and comply with

the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.

We have 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, we, as an emerging growth company, can adopt the new or revised standard at the time private

companies adopt the new or revised standard.

may make comparison of our 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.

and Qualitative Disclosures about Market Risk

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise

required under this item.

Information about securities authorized for issuance under equity compensation plans is incorporated by reference from Item 12Security

Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersEquity Compensation Plan Information .

The graph above compares the cumulative total stockholder return on our Class A common

stock with the cumulative total return on the Standard & Poors (S&P) 500 Stock Index and the S&P Consumer Staples Select Sector Index.

The graph assumes an initial investment of $100 in our common stock at the

market close on July 18, 2019, which was our initial trading day.

Data for the S&P 500 Stock Index and S&P Consumer Staples Select Sector Index assume reinvestment of dividends.

Total return equals stock price appreciation plus

reinvestment of dividends.

Recent Sales of Unregistered Equity Securities

Selected Financial Data.

Not applicable.

Managements Discussion and Analysis of Financial Condition and Results of Operations.

Executive Overview

a leading business solutions provider to consumer goods manufacturers and retailers.

We have a strong platform of competitively advantaged sales and marketing services built over multiple decades essential, business critical services like

headquarter sales, retail merchandising, in-store sampling, digital commerce and shopper marketing.

For brands and retailers of all sizes, we help get the right products on the shelf (whether physical or

digital) and into the hands of consumers (however they shop).

We use a scaled platform to innovate as a trusted partner with our clients, solving problems to increase their efficiency and effectiveness across a broad range of channels.

We have two reportable segments:

sales and marketing.

Through our sales segment, which generated approximately 65.3% of our total revenues in the year ended December 31, 2020, we offer

headquarter sales representation services to consumer goods manufacturers, for whom we prepare and present to retailers a business case to increase distribution of manufacturers products and optimize how they are displayed, priced and

We also make in-store merchandising visits for both manufacturer and retailer clients to ensure the products we represent are adequately stocked and properly displayed.

Through our marketing segment, which generated approximately 34.7% of our total revenues in the year ended December 31, 2020, we help

brands and retailers reach consumers through two main categories within the marketing segment.

The first and largest is our retail experiential business, also known as in-store sampling or demonstrations,

where we create manage highly customized large scale sampling programs (both in-store and online) for leading retailers.

The second business is our collection of specialized agency businesses, in which we

provide private label services to retailers and develop granular marketing programs for brands and retailers through our shopper, consumer and digital marketing agencies.

Recent Developments

Business Combination with

On September 7, 2020, Advantage Solutions Inc., now known as ASI Intermediate Corp.

(ASI), entered

into an agreement and plan of merger (as amended, modified, supplemented or waived, the Merger Agreement), with Conyers Park II Acquisition Corp., a Delaware corporation now known as Advantage Solutions Inc.

(Conyers Park),

CP II Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Conyers Park (Merger Sub), and Topco.

In September 2020 and in connection with its entry into the Merger Agreement, Conyers Park

entered into subscription agreements (collectively, the Subscription Agreements) pursuant to which certain investors, including participating equityholders of Topco (the Advantage Sponsors), agreed to purchase Class A

Common Stock of Conyers Park (Common Stock) at a purchase price of $10.00 per share (the PIPE Investment).

October 27, 2020, Conyers Park held a special meeting of stockholders (the Special Meeting), at which the Conyers Park stockholders considered and adopted, among other matters, a proposal to approve the business combination,

including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements.

Pursuant to the terms of the Merger Agreement, following the Special Meeting, on

October 28, 2020 (the Closing Date), Merger Sub was merged with and into ASI with ASI being the surviving company in the merger (the Merger and, together with the other transactions contemplated by the Merger Agreement,

the Transactions).

On the Closing Date, the PIPE Investment was consummated, and 85,540,000 shares of Common Stock were sold for aggregate gross proceeds of $855.4 million.

Of the 85,540,000 shares of Common Stock, the Advantage

Sponsors acquired 34,410,000 shares of Common Stock, and other purchasers acquired 51,130,000 shares of Common Stock.

32,114,818 shares of Common Stock sold in its initial public offering properly exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from Conyers Parks initial public offering,

calculated as of two business days prior to the consummation of the business combination, $10.06 per share, or $323.1 million in the aggregate (collectively, the Redemptions).

As a result of the Merger, among other things, pursuant to the Merger Agreement, Conyers Park issued to Topco, as sole stockholder of ASI

prior to the Merger, aggregate consideration equal to (a) 203,750,000 shares of Common Stock, and (b) 5,000,000 shares of Common Stock that vested upon achievement of a market performance condition on January 15, 2021.

giving effect to the Transactions, the Redemptions, and the consummation of the PIPE Investment, there were 313,425,182 shares of Common Stock issued and outstanding as of the Closing Date, excluding the 5,000,000 shares of Common Stock subject to

the market performance condition.

The Common Stock and outstanding warrants of Conyers Park (renamed Advantage Solutions Inc. following the Transactions) commenced trading on the Nasdaq Global Select Market under the symbols

ADV and ADVWW, respectively, on October 29, 2020.

As noted above, an aggregate of $323.1 million was

paid from the Conyers Parks trust account to holders in connection with the Redemption, and the remaining balance immediately prior to the closing of the Transactions of approximately $131.2 million remained in the trust account.

remaining amount in the trust account was used to fund the Transactions, including the entry into the New Senior Secured Credit Facilities (as defined below).

In connection with the Merger, ASI repaid and terminated $3.3 billion of debt arrangements under its First Lien Credit Agreement, Second

Lien Credit Agreement, and accounts receivable securitization facility (the AR Facility) that existed in 2020 (collectively, the Credit Facilities) with incremental costs of $86.8 million.

This amount was repaid by ASI

through a combination of (i) cash on hand, (ii) proceeds from certain private investments in Common Stock, (iii) the entry by Advantage Sales & Marketing Inc., a wholly owned subsidiary of ASI, into (a) a new senior

secured asset-based revolving credit facility, which permits borrowing in an aggregate principal amount of up to $400.0 million, subject to borrowing base capacity (the New Revolving Credit Facility), of which $100.0 million of

principal amount was borrowed as of October 28, 2020, and (b) a new secured first lien term loan credit facility in an aggregate principal amount of $1.325 billion (the New Term Loan Facility and, together with the New

Revolving Credit Facility, the New Senior Secured Credit Facilities), and (iv) the issuance by Advantage Solutions FinCo LLC, a direct subsidiary of Advantage Sales & Marketing Inc., of $775.0 million aggregate

principal amount of 6.50% Senior Secured Notes due 2028 (the Notes).

The Merger was accounted for as a reverse recapitalization in accordance with GAAP.

this method of accounting, Conyers Park was treated as the acquired company for financial reporting purposes.

This determination was primarily based on Topco having a relative majority of the voting power of the combined entity, the

operations of ASI prior to the Merger comprising the only ongoing operations of the combined entity, and senior management of ASI comprising the senior management of the combined entity.

Accordingly, for accounting purposes, the financial statements

of the combined entity represent a continuation of the financial statements of ASI with the acquisition being treated as the equivalent of ASI issuing stock for the net assets of Conyers Park, accompanied by a recapitalization.

The net assets of

Conyers Park was stated at historical cost, with no goodwill or other intangible assets recorded.

the COVID-19 Pandemic

The COVID-19 pandemic has had, and is likely to continue to have, a severe and unprecedented

impact on the world.

Measures to prevent its spread, including government-imposed restrictions on large gatherings, closures

of face-to-face events, shelter in place health orders and travel restrictions have had a significant effect on certain of our business

In response to these business disruptions, we have taken several actions including reducing certain of our discretionary expenditures, eliminating non-essential travel, terminating or

amending certain office leases, furloughing, instituting pay reductions and deferrals and terminating some of our employees, particularly with respect to COVID-19 impacted operations.

These measures to prevent the spread of COVID-19 have adversely impacted certain areas of

our business operations, including our in-store sampling, foodservice and European businesses.

Most notably, we temporarily suspended

all in-store sampling in all U.S.

locations starting in March and April of 2020 as well as in certain international locations.

More recently, we have started to re-open in-store sampling activities in certain retailers in certain geographies on a prudent, phased basis.

While the restrictions relating

to in-store sampling services have materially and adversely affected our results of operations during the year ended December 31, 2020, we have been successful in growing other adjacent services

in our experiential marketing business such as online grocery pick-up sampling and virtual product demonstrations, both of which have seen increased adoption and demand.

Our foodservice business

continues to be negatively impacted by lower away-from-home demand resulting from the impact of the COVID-19 pandemic on various channels, including restaurants, education and travel and lodging.

business continues to be negatively impacted by activity restrictions implemented in the various European geographies in which we operate.

We have also experienced a positive impact in our headquarter sales and private label services where, due to the large increase in consumer

purchases at retail to support incremental at-home consumption, our operations have experienced a favorable increase in volume and demand.

Additionally,

our e-commerce services have benefited due to the increase in consumer purchasing with online retailers.

These differing impacts are reflected in our financial results for the year ended December 31, 2020.

Compared to the year ended

December 31, 2019, our sales segment revenues increased 5.4% and its operating income and Adjusted EBITDA decreased 50.5% and increased 16.3% in the year ended December 31, 2020, respectively, while revenues, operating income and Adjusted

EBITDA for our marketing segment decreased 40.2%, 95.7% and 34.6% in the year ended December 31, 2020, respectively.

As a result, our sales segment revenues increased to almost two-thirds of our revenues

in 2020, while in 2019, our revenues were split approximately 51.6% to 48.4% between our sales and marketing segments, respectively.

also took various measures during the year ended December 31, 2020 to strengthen liquidity.

For example, in accordance with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27, 2020,

we have deferred the deposit and payment of our portion of Social Security taxes.

We have also received government aid from various countries in support of our local operations, including a government loan in Japan.

Also, we consummated the Merger

and the related Transactions, including the refinancing of our existing indebtedness and the incurrence of new indebtedness with the New Senior Secured

Credit Facilities and the Notes.

As of December 31, 2020, we had $204.3 million in cash and cash equivalents.

See Liquidity and Capital Resources .

We expect the ultimate significance of the impact of the pandemic on our financial condition, results of operations and cash flows will be

dictated by the length of time that such circumstances continue, which will depend on the currently unknowable extent and duration of the COVID-19 pandemic and the nature and effectiveness of

governmental, commercial and personal actions taken in response.

We expect the COVID-19 pandemic will continue to impact our various businesses through at least the first half of 2021 based on the belief that

certain restrictions on mobility and activities are likely to remain in place until such time a vaccine can be broadly distributed and administered.

Our financial performance for

the year ended December 31, 2020 as compared to the year ended December 31, 2019 includes:

Revenues decreased by $629.4 million, or 16.6%, to $3,155.7 million;

Operating income decreased by $146.7 million, or 68.6%, to $67.0 million;

Net loss increased by $141.9 million, or 718.5%, to $161.7 million;

Adjusted Net Income increased by $13.9 million, or 8.2%, to $182.9 million;

Adjusted EBITDA decreased by $16.9 million, or 3.3%, to $487.2 million.

We completed five business acquisitions during the year ended December 31, 2020, consisting of three sales agencies, which have been

incorporated into our sales segment and two marketing agencies, which have been incorporated into our marketing segment.

The aggregate purchase price for these acquisitions was $88.1 million, of which $68.0 million was paid in cash,

$14.8 million in contingent consideration, and $5.3 million in holdbacks.

Factors Affecting Our Business and Financial

There are a number of factors, in addition to the impact of the

ongoing COVID-19 pandemic, that affect the performance of our business and the comparability of our results from period to period including:

Organic Growth.

Part of our strategy is to generate organic growth by expanding our existing

client relationships, continuing to win new clients, pursuing channel expansion and new industry opportunities, enhancing our digital technology solutions, developing our international platform, delivering operational efficiencies and expanding into

logical adjacencies.

We believe that by pursuing these organic growth opportunities we will be able to continue to enhance our value proposition to our clients and thereby grow our business.

Acquisitions.

We have grown and expect to continue to grow our business in part by acquiring

quality businesses, both domestic and international.

In December 2017, we completed the Daymon Acquisition, a leading provider of retailer-centric services, including private label development and management, merchandising and experiential marketing

In addition to the Daymon Acquisition, we have completed 65 acquisitions from January 2014 to March 1, 2021, ranging in purchase prices from approximately $0.3 million to $98.5 million.

Many of our acquisition

agreements include contingent consideration arrangements, which are described below.

We have completed acquisitions at what we believe are attractive purchase prices and have regularly structured our agreements to result in the generation of

long-lived tax assets, which have in turn reduced our effective purchase prices when incorporating the value of those tax assets.

We continue to look for strategic and tuck-in acquisitions that can

be completed at attractive purchase prices.

Contingent Consideration.

Many of our acquisition agreements include contingent consideration

arrangements, which are generally based on the achievement of financial performance thresholds by the operations attributable to the acquired businesses.

The contingent consideration arrangements are based upon our valuations of the acquired

businesses and are intended to share the investment risk with the sellers of such businesses if projected financial results are not achieved.

The fair values of these contingent consideration arrangements are included as part of the purchase price

of the acquired companies on their respective acquisition dates.

For each transaction, we estimate the fair value of contingent consideration payments as part of the initial purchase price.

We review and assess the estimated fair value of contingent

consideration on a quarterly basis, and the updated fair value could differ materially from our initial estimates.

Changes in the estimated fair value of contingent consideration liabilities related to the time component of the present value

calculation are reported in Interest expense, net. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in Selling, general and administrative expenses in the Consolidated

Statements of Operations and Comprehensive Loss.

Depreciation and Amortization.

As a result of the acquisition of our business by Topco on

July 25, 2014 (the 2014 Topco Acquisition), we acquired significant intangible assets, the value of which is amortized, on a straight-line basis, over 15 years from the date of the 2014 Topco Acquisition, unless determined to

be indefinite-lived.

The amortization of such intangible assets recorded in our consolidated financial statements has a significant impact on our operating income (loss) and net loss.

Our historical acquisitions have increased, and future

acquisitions likely will increase, our intangible assets.

We do not believe the amortization expense associated with the intangibles created from our purchase accounting adjustments reflect a material economic cost to our business.

depreciation expense which has an economic cost reflected by the fact that we must re-invest in property and equipment to maintain the asset base delivering our results of operations, we do not have

any capital re-investment requirements associated with the acquired intangibles, such as client relationships and trade names, that comprise the majority of the finite-lived intangibles that create

our amortization expense.

Foreign Exchange Fluctuations.

Our financial results are affected by fluctuations in the

exchange rate between the U.S.

dollar and other currencies, primarily the Canadian dollars, British pounds and euros, due to our operations in such foreign jurisdictions.

See also Quantitative and Qualitative Disclosure of Market

RiskForeign Currency Risk.

Our quarterly results are seasonal in nature, with the fourth fiscal quarter

typically generating a higher proportion of our revenues than other fiscal quarters, as a result of higher consumer spending.

We generally record slightly lower revenues in the first fiscal quarter of each year, as our clients begin to roll out new

programs for the year, and consumer spending generally is less in the first fiscal quarter than other quarters.

Timing of our clients marketing expenses, associated with marketing campaigns and new product launches, can also result in

fluctuations from one quarter to another.

How We Assess the Performance of Our Business

Revenues related to our sales

segment are primarily comprised of commissions, fee-for-service and cost-plus fees for providing retail services, category and space management, headquarter

relationship management, technology solutions and administrative services.

A small portion of our arrangements include performance incentive provisions, which allow us to earn additional revenues on our performance relative to specified quantitative

or qualitative goals.

We recognize the incentive portion of revenues under these arrangements when the related services are transferred to the customer.

Marketing segment revenues are primarily recognized in the form of a fee-for-service (including retainer fees, fees charged to clients based on hours incurred, project-based fees or fees for

executing in-person consumer engagements or experiences, which engagements or experiences we refer to as events), commissions or on a cost-plus basis, in each case, related to services including

experiential marketing, shopper and consumer marketing services, private label development or our digital, social and media services.

Given our acquisition strategy, we analyze our financial performance, in part, by measuring revenue growth in two waysrevenue growth

attributable to organic activities and revenue growth attributable to acquisitions, which we refer to as organic revenues and acquired revenues, respectively.

We define organic revenues as any revenues that are not acquired revenues.

Our organic revenues exclude the impacts of acquisitions and

divestitures, when applicable, which improves comparability of our results from period to period.

In general, when we acquire a business,

the acquisition includes a contingent consideration arrangement ( e.g ., an earn-out provision) and, accordingly, we separately track the financial performance of the acquired business.

cases, we consider revenues generated by such a business during the 12 months following its acquisition to be acquired revenues.

For example, if we completed an acquisition on July 1, 2019 for a business that included a contingent

consideration arrangement, we would consider revenues from the acquired business from July 1, 2019 to June 30, 2020 to be acquired revenues.

We generally consider growth attributable to the financial performance of an acquired business

after the 12-month anniversary of the date of acquisition to be organic.

cases, including the Daymon Acquisition, when the acquisition of an acquired business does not include a contingent consideration arrangement, or we otherwise do not separately track the financial performance of the acquired business due to

operational integration, we consider the revenues that the business generated in the 12 months prior to its acquisition to be our acquired revenues for the 12 months following its acquisition, and any differences in revenues actually

generated during the 12 months after its acquisition to be organic.

For example, if we completed an acquisition on July 1, 2019 for a business that did not include a contingent consideration arrangement, we would consider the amount of

revenues from the acquired business from July 1, 2018 to June 30, 2019 to be acquired revenues during the period from July 1, 2019 to June 30, 2020, with any differences from that amount actually generated during the latter

period to be organic revenues.

All revenues generated by our acquired businesses are considered to be organic revenues after the 12-month anniversary of the date of acquisition.

When we divest a business, we consider

the revenues that the divested business generated in the 12 months prior to its divestiture to be subtracted from acquired revenues for the 12 months following its divestiture.

For example, if we completed a divestiture on July 1, 2019 for a

business, we would consider the amount of revenues from the divested business from July 1, 2018 to June 30, 2019 to be subtracted from acquired revenues during the period from July 1, 2019 to June 30, 2020.

We measure organic revenue growth and acquired revenue growth by comparing the organic revenues or acquired revenues, respectively, period

over period, net of any divestitures.

Cost of Revenues

Our cost of revenues consists of both fixed and variable expenses primarily attributable to the hiring, training, compensation and benefits

provided to both full-time and part-time associates, as well as other project-related expenses.

A number of costs associated with our associates are subject to external factors, including inflation, increases in market specific wages and minimum

wage rates at federal, state and municipal levels and minimum pay levels for exempt roles.

Additionally, when we enter into certain new client relationships, we may experience an initial increase in expenses associated with hiring, training and

other items needed to launch the new relationship.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of salaries, payroll taxes and benefits for corporate personnel.

Other overhead

costs include information technology, occupancy costs for corporate personnel, professional services fees, including accounting and legal services, and other general corporate expenses.

Additionally, included in selling, general and administrative

expenses are costs associated with the changes in fair value of the contingent consideration of acquisitions and other acquisition-related costs.

Acquisition-related costs are comprised of fees related to change of equity ownership, transaction

costs, professional fees, due diligence and integration activities.

We also expect to incur additional expenses as a result of operating

as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of

the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and professional services.

Interest Expense

Interest expense relates primarily to borrowings under our First Lien Credit Agreement (including the Revolving Credit Facility),

Second Lien Credit Agreement and New Senior Secured Credit Facilities as described below.

See Liquidity and Capital Resources.

Depreciation and Amortization

Included in our depreciation and amortization expense is amortization of acquired intangible assets.

We have ascribed

value to identifiable intangible assets other than goodwill in our purchase price allocations for companies we have acquired.

These assets include, but are not limited to, client relationships and trade names.

To the extent we ascribe value to

identifiable intangible assets that have finite lives, we amortize those values over the estimated useful lives of the assets.

Such amortization expense, although non-cash in the period expensed,

directly impacts our results of operations.

It is difficult to predict with any precision the amount of expense we may record relating to future acquired intangible assets.

As a result of the 2014 Topco Acquisition, we acquired significant intangible assets, the value of which is amortized, on a straight-line

basis, over 15 years from the date of the 2014 Topco Acquisition, unless determined to be indefinite-lived.

We recognized a non-cash intangible asset impairment charge of $580.0 million

during the year ended December 31, 2018, related to our sales trade name resulting from the 2014 Topco Acquisition considered to be indefinite lived.

The impairment charge has been reflected in Impairment of goodwill and

indefinite-lived assets in our Consolidated Statements of Operations and Comprehensive Loss, in addition to a $652.0 million non-cash goodwill impairment charge in the sales reporting

Depreciation Expense

Depreciation expense relates to the property and equipment that we own, which represented less than 1% of our total assets at December 31,

(benefit) expense and our effective tax rates can be affected by many factors, including state apportionment factors, our acquisition strategy, tax incentives and credits available to us, changes in judgment regarding our ability to realize our

deferred tax assets, changes in our worldwide mix of pre-tax losses or earnings, changes in existing tax laws and our assessment of uncertain tax positions.

We have positive cash flow characteristics, as described below, due to the limited required capital investment in the fixed assets and working

capital needs to operate our business in the normal course.

See Liquidity and Capital Resources.

consummation of the Transactions (including our entry into the New Senior Secured Credit Facilities), our principal sources of liquidity have been cash flows from operations, borrowings under the Revolving Credit Facility (as herein defined) and

Following the Transactions, our principal sources of liquidity are cash flows from operations, borrowings under the New Revolving Credit Facility, and other debt.

Our principal uses of cash are operating expenses, working capital

requirements, acquisitions and repayment of debt.

Adjusted Net Income

Adjusted Net Income is a non-GAAP financial measure.

Adjusted Net Income means net loss before

(i) impairment of goodwill and indefinite-lived assets, (ii) amortization of intangible assets, (iii) private equity sponsors management fees and equity-based compensation expense, (iv) fair value adjustments of contingent

consideration related to acquisitions, (v) acquisition-related expenses, (vi) costs associated with COVID-19, net of benefits received, (vii) EBITDA for economic interests in investments,

(viii) restructuring expenses, (ix) litigation expenses, (x) (Recovery from) loss on Take 5, (xi) deferred financing fees, (xii) costs associated with the Take 5 Matter, (xiii) other adjustments that management believes are

helpful in evaluating our operating performance, and (xiv) related tax adjustments.

We present Adjusted Net Income because we use it

as a supplemental measure to evaluate the performance of our business in a way that also considers our ability to generate profit without the impact of items that we do not believe are indicative of our operating performance or are unusual or

infrequent in nature and aid in the comparability of our performance from period to period.

Adjusted Net Income should not be considered as an alternative for net loss, our most directly comparable measure presented on a GAAP basis.

Adjusted EBITDA and Adjusted EBITDA by Segment

Adjusted EBITDA and Adjusted EBITDA by segment are supplemental non-GAAP financial measures of our

operating performance.

Adjusted EBITDA means net loss before (i) interest expense, net, (ii) (benefit from) provision for income taxes, (iii) depreciation, (iv) impairment of goodwill and indefinite-lived assets, (v) amortization of

intangible assets, (vi) private equity sponsors management fees and equity-based compensation expense, (vii) fair value adjustments of contingent consideration related to acquisitions, (viii) acquisition-related expenses,

(ix) costs associated with COVID-19, net of benefits received, (x) EBITDA for economic interests in investments, (xi) restructuring expenses, (xii) litigation expenses, (xiii) (Recovery

from) loss on Take 5, (xiv) costs associated with the Take 5 Matter and (xv) other adjustments that management believes are helpful in evaluating our operating performance.

We present Adjusted EBITDA and Adjusted EBITDA by segment because they are key operating measures used by us to assess our financial

These measures adjust for items that we believe do not reflect the ongoing operating performance of our business, such as certain noncash items, unusual or infrequent items or items that change from period to period without any material

relevance to our operating performance.

We evaluate these measures in conjunction with our results according to GAAP because we believe they provide a more complete understanding of factors and trends affecting our business than GAAP measures alone.

Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA.

Neither Adjusted EBITDA nor Adjusted EBITDA by segment should be considered as an alternative for

net loss, for our most directly comparable measure presented on a GAAP basis.

For a reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA by segment to

operating income (loss), see Non-GAAP Financial Measures.

On April 1, 2018, we acquired certain assets and liabilities of Take 5 for total consideration of $81.6 million,

including the fair value of contingent consideration of $4.6 million and holdback liabilities of $0.8 million.

As a result of a review of internal allegations related to inconsistency of data provided by Take 5 to its clients, we commenced

an investigation into Take 5s operations.

In July 2019, as a result of our investigation, we determined that revenues during the fiscal year ended December 31, 2018 attributable to the Take 5 business had been recognized for services that

were not performed on behalf of clients of Take 5 and that inaccurate reports were made to Take 5 clients about those services.

As a result of our investigation into Take 5, in July 2019, we terminated all operations of Take 5, including

the use of its associated trade names and the offering of its services to its clients and have offered refunds to Take 5 clients of collected revenues attributable to Take 5 since our acquisition of Take 5.

As a result of the Take 5 Matter, we determined that Take 5s reported revenues were improperly recognized during the year ended

December 31, 2018.

We also determined that the amounts previously assigned to the assets of Take 5 acquired on the acquisition date had been improperly established based on inaccurate assumptions as to the fair value of the assets

We also voluntarily disclosed information about the misconduct at Take 5 to the United States Attorneys Office and the

Federal Bureau of Investigation and committed to cooperate in any governmental investigation.

We are currently in arbitration proceedings with the sellers of Take 5, in which both us and the sellers of Take 5 have brought claims against each

As a result of the Take 5 Matter, we may be subject to a number of harms, risks and uncertainties, including substantial

unanticipated costs for potential lawsuits by clients or other interested parties who claim to have been harmed by the misconduct at Take 5, other related costs and fees (in excess of the amounts already being offered as refunds), potential

resulting governmental investigations and a reduction in our current and anticipated revenues.

In addition, if we do not prevail in any litigation or governmental investigation related to these matters, we could be subject to costs related to such

litigation or governmental investigation, including equitable relief, civil monetary damages, treble damages, repayment or criminal penalties, which may not be covered by insurance or may materially increase our insurance costs.

We have incurred and

will continue to incur additional substantial defense and investigation costs regardless of the outcome of any such litigation or governmental investigation.

In addition, there can be no assurance to what degree, if any, we will be able to recover

any such costs or damages from the former owners of Take 5, or whether such former owners of Take 5 engaged in further unknown improper activities that may subject us to further costs or damages, including potential reputational harm.

The Take 5 Matter may lead to additional harms, risks and uncertainties for us, including litigation and governmental investigations, a

reduction in our current or anticipated revenues, a potential deterioration in our relationships or reputation and a loss in investor confidence.

In connection with the Take 5 Matter, we have removed previously recognized revenues of $18.7 million for the year ended

December 31, 2018, attributable to the Take 5 business.

Additionally, we recognized a $79.2 million loss on Take 5 in our Statement of Comprehensive Loss during the year ended December 31, 2018, representing the

$76.2 million in cash we paid for Take 5, together with restated acquired liabilities of $3.0 million.

For the years ended

December 31, 2020 and 2019, we incurred $3.6 million and $7.7 million, respectively, of costs associated with the investigation and remediation activities in connection with the Take 5 Matter,

primarily professional fees and other related costs.

For the years ended December 31, 2020 and 2019, the cost associated with the Take 5 Matter recognized as a component of Selling, general

and administrative expenses was as follows;

For the Year Ended

(in thousands)

Historical operating costs of Take 5

Investigation related costs

Remediation actions and other related cost

Total cost associated with Take 5 Matter

On May 15, 2020, we received $7.7 million from our representation and warranty insurance policy

related to the acquisition of Take 5 for claims related to the Take 5 Matter, the maximum aggregate recovery under the policy.

Restructuring Charges

Restructuring charges include severance plans designed to integrate and reduce costs intended to further improve efficiencies in

operational activities and align cost structures consistent with revenue levels associated with business changes.

In response to the COVID-19 pandemic, we commenced a plan involving terminating certain employees, particularly with respect to

COVID-19 impacted operations.

In addition, we established a global work from home policy.

A significant portion of our office-based workforce temporarily transitioned to working from home and we commenced a plan to strategically exit certain offices

during the year ended December 31, 2020.

Refer to Note 8 Leases , for additional information.

During the years ended December 31, 2019 and 2018, in connection with the Daymon Acquisition, we commenced restructuring programs

designed to achieve cost savings through transaction synergies.

We recorded severance expenses of $4.6 million, $2.3 million, and $7.9 million included in Selling, general, and administrative expenses in the Consolidated Statements of

Operations and Comprehensive Loss for the years ended December 31, 2020, 2019, and 2018, respectively.

Results of Operations

Our results of operations provide details of our financial results for 2020 and 2019 and year-to-year comparisons between 2020 and 2019.

Discussion of 2018 items and year-to-year comparisons between 2019 and 2018 that

are not included in this Annual Report can be found in Managements Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 7 of our Registration Statement on Form

S-1 filed with the SEC on December 4, 2020.

Results of Operations for the Years Ended December 31, 2020 and 2019

Year Ended December 31,

(amounts in thousands)

Cost of revenues

Selling, general, and administrative expenses

Recovery from Take 5

Depreciation and amortization

Total expenses

Operating income

Interest expense, net

Loss before income taxes

(Benefit from) provision for income taxes

Other Financial Data

Adjusted Net Income (1)

Adjusted EBITDA (1)

Adjusted Net Income and Adjusted EBITDA are financial measures that are not calculated in accordance with GAAP.

For a discussion of our presentation of Adjusted Net Income and Adjusted EBITDA and reconciliations of net loss to Adjusted Net Income and Adjusted EBITDA, see Non-GAAP Financial

Comparison of the Years Ended December 31, 2020 and 2019

Year Ended December 31,

(amounts in thousands)

Total revenues

Total revenues decreased by $629.4 million, or 16.6%, during the year ended December 31, 2020, as

compared to the year ended December 31, 2019.

The sales segment revenues increased $105.9 million, of which $61.3 million

were revenues from acquired businesses during the year ended December 31, 2020 as compared to the year ended December 31, 2019.

Excluding revenues from acquired businesses, the segment experienced an increase of $44.6 million in

organic revenues primarily due to growth in our headquarter sales and retail services where we benefitted from several new clients and an increase in commission revenues as a result of significant increases in purchases of consumer goods in the

retail channel with an increase in eat-at-home consumption due to the COVID-19 pandemic, as well as expansion in our e-commerce services.

These were partially offset by weakness in both our foodservice and our European businesses due to the temporary closures affecting those industries and locations and other adverse impacts of

the COVID-19 pandemic has had on these services.

The marketing segment revenues declined

$735.3 million during the year ended December 31, 2020 as compared to the year ended December 31, 2019, which includes revenues of $9.4 million from acquired

Excluding revenues from acquired businesses, the segment experienced a decline of $744.7 million in organic revenues.

The decrease in revenues were primarily due to temporary

suspensions or reductions of certain in-store sampling services as a result of the COVID-19 pandemic.

Cost of Revenues

Cost of revenues as a

percentage of revenues for the year ended December 31, 2020 was 80.9%, as compared to 83.6% for the year ended December 31, 2019.

The decrease as a percentage of revenues was largely attributable to the change in the revenue mix of our

services as a result of the COVID-19 pandemic, with an increase in commission-based revenues as a result of increased purchases of consumer goods within the retail channel, the temporary suspension or

reduction of certain in-store sampling services and reduced travel related expenses.

General and Administrative Expenses

Selling, general and administrative expenses as a percentage of revenues for the year ended

December 31, 2020 was 9.7%, as compared to 4.6% for the year ended December 31, 2019.

The increase as a percentage of revenues for the year ended December 31, 2020 was primarily attributable to an increase in equity-based compensation

expense related to equity units of Topco as a result of the consummation of the Transactions.

The Company recognized non-cash compensation expenses of $62.7 million in connection with the Common Series C

Units and $13.3 million in connection with the Common Series C-2 Units for the year ended December 31, 2020.

For additional information, refer to Note 11 Equity-Based Compensation

of our audited consolidated financial statements for the year ended December 31, 2020.

The activity and expense associated with the units at Topco had no impact on the outstanding Common Stock of Advantage Solutions Inc.

contributing to the increase in Selling, general and administrative expenses was an increase in $34.3 million of restructuring charges primarily associated with terminating certain office leases, $39.8 million of transaction bonuses and

certain retention and anniversary payments paid shortly following the completion of the Transactions, offset by $12.7 million reduction of expenses related to the Take 5 Matter.

Depreciation and Amortization Expense

Depreciation and amortization expense increased $6.0 million, or 2.6%, to $238.6 million for the year ended December 31, 2020,

from $232.6 million for the year ended December 31, 2019.

The increase was primarily attributable to the amortization of additional intangibles from recently acquired businesses.

Operating Income

Year Ended December 31,

(amounts in thousands)

Total operating income

In the sales segment, the decrease in operating income during the year ended December 31, 2020 was

primarily attributable to an increase in equity-based compensation expense related to Topco units as a result of the consummation of the Transactions, acquisition-related expenses, and

one-time restructuring charges associated with terminating certain office leases, offset by the growth in revenues in the sales segment as described above.

In the marketing segment, the decrease in operating income during the year ended December 31, 2020 was primarily attributable to the

decrease in revenues as described above coupled with an increase in equity-based

compensation expense related to the equity units of Topco as a result of the consummation of the Transactions and one-time restructuring charges

associated with terminating certain office leases offset by reduction of expenses related to the Take 5 Matter including the insurance recovery and government grants received as a result of

the COVID-19 pandemic.

Interest Expense, Net

Interest expense, net increased $1.9 million, or 0.8%, to $234.0 million for the year ended December 31, 2020, from

$232.1 million for the year ended December 31, 2019.

The increase in interest expense, net was primarily due to an increase of

$41.4 million of fees associated with the issuance of the New Senior Secured Credit Facilities and the Notes offset by the decrease in interest rates applicable to certain indebtedness for the year ended December 31, 2020 as compared to

the year ended December 31, 2019.

(Benefit from) Provision for Income Taxes

Benefit from income taxes was $5.3 million for the year ended December 31, 2020 as compared to a provision for income taxes of

$1.4 million for the year ended December 31, 2019.

The fluctuation was primarily attributable to the greater pre-tax loss and lower tax adjustments associated with Global Intangible Low Tax Income

(GILTI), meals and entertainment, foreign taxes for the year ended December 31, 2020.

Net loss was $161.7 million for the year ended December 31, 2020, compared to net loss of $19.8 million for the year ended

December 31, 2019.

The increase in net loss was primarily driven by the decrease in operating income and increase in interest expense which were impacted by non-recurring expenses primarily as a result of

the consummation of the Transactions, partially offset by favorability associated with the benefit from income taxes as described above.

The increase in Adjusted Net Income for the year ended December 31, 2020 was attributable to the decrease in interest

expense after adjusting for non-recurring costs incurred as part of the Transactions offset by the decline in the marketing segment related to the temporary suspension or reductions of in-store sampling programs during the pandemic and increase in provision for income taxes after adjusting for non-recurring costs incurred as a result of the consummation of

the Transactions.

For a reconciliation of Adjusted Net Income to Net loss, see Non-GAAP Financial Measures .

Adjusted EBITDA and Adjusted EBITDA by Segment

Year Ended December 31,

(amounts in thousands)

Total Adjusted EBITDA

Adjusted EBITDA decreased $16.9 million, or 3.3%, to $487.2 million for the year ended

December 31, 2020, from $504.0 million for the year ended December 31, 2019.

The decrease in Adjusted EBITDA was primarily

attributable to the decline in revenues in the marketing segment, primarily due to the temporary suspension of certain in-store sampling services, offset by the growth in

revenues in the sales segment with favorable margin contributions from our headquarter sales services as described above.

For a reconciliation of Adjusted EBITDA to net loss, see Non-GAAP Financial Measures .

Financial Measures

Adjusted Net Income is a non-GAAP financial measure.

Adjusted Net Income

means net loss before (i) impairment of goodwill and indefinite-lived assets, (ii) amortization of intangible assets, (iii) private equity sponsors management fees and equity-based compensation expense, (iv) fair value

adjustments of contingent consideration related to acquisitions, (v) acquisition-related expenses, (vi) costs associated with COVID-19, net of benefits received, (vii) EBITDA for economic

interests in investments, (viii) restructuring expenses, (ix) litigation expenses, (x) (Recovery from) loss on Take 5, (xi) deferred financing fees, (xii) costs associated with the Take 5 Matter, (xiii) other adjustments that

management believes are helpful in evaluating our operating performance, and (xiv) related tax adjustments.

We present Adjusted Net

Income because we use it as a supplemental measure to evaluate the performance of our business in a way that also considers our ability to generate profit without the impact of items that we do not believe are indicative of our operating performance

or are unusual or infrequent in nature and aid in the comparability of our performance from period to period.

Adjusted Net Income should not be considered as an alternative for our Net loss, our most directly comparable measure presented on a GAAP

A reconciliation of Adjusted Net Income to Net loss is provided in the following table:

Year Ended December 31,

(in thousands)

Net income attributable to noncontrolling interest

Impairment of goodwill and indefinite-lived assets

Sponsors management fee and equity-based compensation expense (a)

Fair value adjustments related to contingent consideration related to acquisitions (b)

Acquisition-related expenses (c)

Restructuring expenses (d)

Litigation expenses (e)

Amortization of intangible assets (f)

Costs associated with COVID-19, net of benefits received (g)

Deferred financing fees (h)

(Recovery from) loss on Take 5

Costs associated with the Take 5

Tax adjustments related to non-GAAP adjustments (j)

Adjusted Net Income

Adjusted EBITDA and Adjusted EBITDA by segment are supplemental

non-GAAP financial measures of our operating performance.

Adjusted EBITDA means net loss before (i) interest expense, net, (ii) (benefit from) provision for income taxes, (iii) depreciation, (iv)

impairment of goodwill and indefinite-lived assets,

(v) amortization of intangible assets, (vi) Advantage Sponsors management fees and equity-based compensation expense, (vii) fair value adjustments of contingent consideration

related to acquisitions, (viii) acquisition-related expenses, (ix) costs associated with COVID-19, net of benefits received, (x) EBITDA for economic interests in investments,

(xi) restructuring expenses, (xii) litigation expenses, (xiii) (Recovery from) loss on Take 5, (xiv) costs associated with the Take 5 Matter and (xv) other adjustments that management believes are helpful in evaluating our operating

We present Adjusted EBITDA and Adjusted EBITDA by segment because they are key operating measures used by us to assess our

financial performance.

any material relevance to our operating performance.

We evaluate these measures in conjunction with our results according to GAAP because we believe they provide a more complete understanding of factors and trends affecting our business than GAAP

measures alone.

Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA.

Neither Adjusted EBITDA nor Adjusted EBITDA by segment should be considered as an

alternative for our Net loss, our most directly comparable measure presented on a GAAP basis

A reconciliation of Adjusted EBITDA to Net

loss is provided in the following table:

Year Ended December 31,

(in thousands)

Interest expense, net

(Benefit from) provision for income taxes

Depreciation and amortization

Impairment of goodwill and indefinite-lived assets

Sponsors management fee and equity-based compensation expense (a)

Fair value adjustments related to contingent consideration related to acquisitions (b)

Acquisition-related expenses (c)

EBITDA for economic interests in

investments (k)

Restructuring expenses (d)

Litigation expenses (e)

Costs associated with COVID-19, net of benefits received (g)

(Recovery from) loss on Take 5

Costs associated with the Take 5

Adjusted EBITDA

Financial information by segment, including a reconciliation of Adjusted EBITDA by segment

to operating income (loss), the closest GAAP financial measure, is provided in the following table:

Sales Segment

Year Ended December 31,

(in thousands)

Operating income (loss)

Depreciation and amortization

Impairment of goodwill and indefinite-lived assets

Sponsors management fee and equity-based compensation expense (a)

Fair value adjustments related to contingent consideration related to acquisitions (b)

Acquisition-related expenses (c)

EBITDA for economic interests in

investments (k)

Restructuring expenses (d)

Litigation expenses (e)

Costs associated with COVID-19, net of benefits received (g)

Sales Segment Adjusted EBITDA

Marketing Segment

Year Ended December 31,

(in thousands)

Operating income (loss)

Depreciation and amortization

Sponsors management fee and equity-based compensation expense (a)

Fair value adjustments related to contingent consideration related to acquisitions (b)

Acquisition-related expenses (c)

EBITDA for economic interests in

investments (k)

Restructuring expenses (d)

Litigation expenses (e)

Costs associated with COVID-19, net of benefits received (g)

(Recovery from) loss on Take 5

Costs associated with the Take 5

Marketing Segment Adjusted EBITDA

Represents the management fees and reimbursements for expenses paid to certain of the Advantage Sponsors (or

certain of the management companies associated with it or its advisors) pursuant to a management services agreement in years ended December 31, 2020, 2019 and 2018.

Also represents expenses related to (i) equity-based compensation expense

associated with grants of Common Series D Units of Topco made to one of the Advantage Sponsors, (ii) equity-based compensation expense associated

with the Common Series C Units of Topco as a result of the Transactions, (iii) compensation amounts associated with the Companys Management Incentive Plan originally scheduled for

potential payment March 2022 that were accelerated and terminated as part of the Transactions, and (iv) compensation amounts associated with the anniversary payments to Tanya Domier.

Certain of Ms.

Domiers anniversary payments were

accelerated as part of the Transactions.

Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our

acquisitions, excluding the present value accretion recorded in interest expense, net, for the applicable periods.

See Note 6 Other Liabilities to our audited consolidated financial statements for the year ended December 31, 2020.

Represents fees and costs associated with activities related to our acquisitions and restructuring activities

related to our equity ownership, including transaction bonuses paid in connection with the Transactions, professional fees, due diligence and integration activities.

Represents fees and costs associated with various internal reorganization activities among our consolidated

The increase during the year ended December 31, 2020 relates primarily to costs related to the abandonment of certain office leases offset by the decrease relates primarily to the non-cash

settlement of lease liabilities.

For additional information, refer to Note 8 Leases of our audited consolidated financial statements for the year ended December 31, 2020.

Represents legal settlements that are unusual or infrequent costs associated with our operating activities.

Represents the amortization of intangible assets recorded in connection with the 2014 Topco Acquisition and our

other acquisitions.

Represents (i) costs related to implementation of strategies for workplace safety in response to COVID-19, including employee-relief fund, additional sick pay for front-line associates, medical benefit payments for furloughed associates, and personal protective equipment;

and (ii) benefits received from

government grants for COVID-19 relief.

Represents fees associated with the issuance of the New Senior Secured Credit Facilities and the Notes.

additional information, refer to Note 7 Debt of our audited consolidated financial statements for the year ended December 31, 2020.

Represents $3.6 million and $7.7 million of costs associated with investigation and remediation

activities related to the Take 5 Matter, primarily, professional fees and other related costs, respectively for the years ended December 31, 2020 and 2019, respectively.

Represents $8.6 million and $14.2 million of operating expenses

associated with the Take 5 business, which we believe do not reflect the ongoing operating performance of our business for the years ended December 31, 2019 and 2018, respectively.

Represents the tax provision or benefit associated with the adjustments above, taking into account the

Companys applicable tax rates, after excluding adjustments related to items that do not have a related tax impact.

Represents additions to reflect our proportional share of Adjusted EBITDA related to our equity method

investments and reductions to remove the Adjusted EBITDA related to the minority ownership percentage of the entities that we fully consolidate in our financial statements.

Liquidity and Capital Resources

Prior to the Transactions, our principal sources of liquidity were cash flows from operations, borrowings under the Credit Facilities,

including $2.5 billion under the First Lien Credit Agreement and $760 million under the Second Lien Credit Agreement which were scheduled to mature in July 2021 and July 2022, respectively.

On October 28, 2020, in connection with the

Transactions, we (i) repaid the outstanding debt under the First and Second Lien Credit Agreements and a separate accounts receivable securitization facility, (ii) entered into the New Senior Secured Credit Facilities consisting of the

$1.325 billion New Term Loan Facility and the $400.0 million New Revolving Credit Facility, (iii) borrowed $100.0 million under the New Revolving Credit Facility and (iv) issued $775.0 million of Notes.

Following the

Transactions, our principal sources of liquidity have been cash flows from operations, borrowings under the New Revolving Credit Facility, and other debt.

Our principal uses of cash are operating expenses, working capital requirements, acquisitions,

and repayment of debt.

A summary of our cash provided by or used in our operating, investing and financing activities are shown in the following table:

Year Ended December 31,

(in thousands)

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Net effect of foreign currency fluctuations on cash

Net change in cash, cash equivalents and restricted cash

Net Cash Provided by Operating Activities

Net cash provided by operating activities during the year ended December 31, 2020, consisted of net loss of $161.7 million adjusted

for certain non-cash items, including depreciation and amortization of $238.6 million and effects of changes in working capital.

Net cash provided by operating activities for the year ended

December 31, 2019 consisted of net loss of $19.8 million adjusted for certain non-cash items, including depreciation and amortization of $232.6 million and effects of changes in working capital.

The increase in cash provided by operating activities during the year ended December 31, 2020 relative to the same period in 2019 was primarily due to the reduced working capital need as a result of the temporary suspension and reduction of certain in-store sampling services during the year ended December 31, 2020.

To a lesser extent, the reduction of income taxes and the deferral of payment of our portion of Social Security taxes of

$48.0 million have also contributed to the increase in cash provided by operating activities.

Net Cash Used in Investing Activities

For the years ended December 31, 2020 and 2019, our net cash used in investing activities primarily consisted of

acquisitions.

Additionally, we invest cash for the purchase of property and equipment to support our increased employee headcount and overall growth in our business.

We expect that we will make additional capital expenditures and investments in the

future to support the future growth of our business.

Net Cash Used in Financing Activities

We primarily finance our growth through cash flows from operations, however, we also incur long-term debt or borrow under lines of credit when

necessary to execute acquisitions.

Cash flows from financing activities consisted of borrowings related to these lines of credit and subsequent payments of principal and financing fees.

Additionally, many of our acquisition agreements include

contingent consideration arrangements, which are generally based on the achievement of future financial performance by the operations attributable to the acquired companies.

The portion of the cash payment up to the acquisition date fair value of

the contingent consideration liability are classified as financing outflows, and amounts paid in excess of the acquisition date fair value of that liability are classified as operating outflows.

Cash flows related to financing activities during the year ended December 31, 2020, were primarily related to the proceeds from new

borrowings under the New Term Loan Facility and issuance of the Notes of $2.1 billion, the repayment of our First and Second Lien Credit Agreements and principal payments on our long-term debt of $3.2 billion, and the proceeds from

issuance of our common stock of $929.2 million, net of fees, as a result of the consummation of the Transactions.

In connection with

the Transactions, our debt arrangements that existed in 2020 were repaid and terminated.

At the closing of the Transactions, we also had $100.0 million of borrowing under the New Revolving Credit Facility, of which, $50.0 million was paid

off in 2020 due to the reduced working capital need.

On May 25, 2020,

one of our majority owned subsidiaries operating in Japan entered into two loan agreements and had aggregate principal amount of $2.8 million borrowings from a bank lender pursuant to a

local government loan program.

Subsequently, one of the loans was refinanced on October 26, 2020 for reduction of the interest payments.

The loans, which includes the refinanced loan, bear interest rates of 1.82% and 1.83% per annum with

maturity dates of May 27, 2029, and October 27, 2029, respectively, and amounts under the loans will be repayable to the lender in monthly installments.

Cash flows related to financing activities during the year ended December 31, 2019 were primarily related to $25.8 million in

principal payments on our long-term debt and $21.2 million related to payments of contingent consideration.

Description of Credit Facilities

New Senior Secured Credit Facilities

In connection with the consummation of the Transaction, Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the

Company (the Borrower) entered into the New Senior Secured Credit Facilities consisting of (i) the New Revolving Credit Facility, which is a senior secured asset-based revolving credit facility in an aggregate principal amount of up

to $400.0 million, subject to borrowing base capacity and (ii) the New Term Loan Facility, which is a secured first lien term loan credit facility in an aggregate principal amount of $1.325 billion.

New Revolving Credit Facility

New Revolving Credit Facility provides for revolving loans and letters of credit in an aggregate amount of up to $400.0 million, subject to borrowing base capacity.

Letters of credit are limited to the lesser of (a) $150.0 million and

(b) the aggregate unused amount of commitments under our New Revolving Credit Facility then in effect.

Loans under the New Revolving Credit Facility may be denominated in either U.S.

dollars or Canadian dollars.

Bank of America, N.A., will act

as administrative agent and ABL Collateral Agent.

The New Revolving Credit Facility matures five years after the date we enter into the New Revolving Credit Facility.

We may use borrowings under the New Revolving Credit Facility to fund working

capital and for other general corporate purposes, including permitted acquisitions and other investments.

Borrowings under the New

Revolving Credit Facility are limited by borrowing base calculations based on the sum of specified percentages of eligible accounts receivable plus specified percentages of qualified cash, minus the amount of any applicable reserves.

Borrowings will

bear interest at a floating rate, which can be either an adjusted Eurodollar rate plus an applicable margin or, at the Borrowers option, a base rate plus an applicable margin.

The applicable margins for the New Revolving Credit Facility are

2.00%, 2.25% or 2.50%, with respect to Eurodollar rate borrowings and 1.00%, 1.25% or 1.50%, with respect to base rate borrowings, in each case depending on average excess availability under the New Revolving Credit Facility.

The Borrowers

ability to draw under the New Revolving Credit Facility or issue letters of credit thereunder will be conditioned upon, among other things, the Borrowers delivery of prior written notice of a borrowing or issuance, as applicable, the

Borrowers ability to reaffirm the representations and warranties contained in the credit agreement governing the New Revolving Credit Facility and the absence of any default or event of default thereunder.

The Borrowers obligations under the New Revolving Credit Facility are guaranteed by Karman Intermediate Corp.

(Holdings) and

all of the Borrowers direct and indirect wholly owned material U.S.

subsidiaries (subject to certain permitted exceptions) and Canadian subsidiaries (subject to certain permitted exceptions, including exceptions based on immateriality

thresholders of aggregate assets and revenues of Canadian subsidiaries) (the Guarantors).

The New Revolving Credit Facility is secured by a lien on substantially all of Holdings, the Borrowers and the Guarantors assets

(subject to certain permitted exceptions).

The Borrowers New Revolving Credit Facility has a first-priority lien on the current asset collateral and a second-priority lien on security interests in the fixed asset collateral (second in priority

to the liens securing the Notes and the New Term Loan Facility discussed below), in each case, subject to other permitted liens.

The New Revolving Credit Facility has the following fees:

(i) an unused line fee of

0.375% or 0.250% per annum of the unused portion of the New Revolving Credit Facility, depending on average excess availability under the New Revolving Credit Facility;

(ii) a letter of credit participation fee on the aggregate stated amount of

each letter of credit equal to the applicable margin for adjusted Eurodollar rate loans, as applicable;

and (iii) certain other customary fees and expenses of the lenders and agents thereunder.

The New Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on the Borrowers ability and

that of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, optionally

prepay or modify terms of any junior indebtedness, enter into transactions with affiliates or change our line of business.

The New Revolving Credit Facility will require the maintenance of a fixed charge coverage ratio (as set forth in the credit

agreement governing the New Revolving Credit Facility) of 1.00 to 1.00 at the end of each fiscal quarter when excess availability is less than the greater of $25 million and 10% of the lesser of the borrowing base and maximum borrowing

Such fixed charge coverage ratio will be tested at the end of each quarter until such time as excess availability exceeds the level set forth above.

The New Revolving Credit Facility provides that, upon the occurrence of certain events of default, the Borrowers obligations thereunder

may be accelerated and the lending commitments terminated.

Such events of default include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material

indebtedness, voluntary and involuntary bankruptcy, insolvency, corporate arrangement, winding-up, liquidation or similar proceedings, material money judgments, material pension-plan events, certain change of

control events and other customary events of default.

New Term Loan Facility

The New Term Loan Facility consists of a term loan facility denominated in US dollars in an aggregate principal amount of $1.325 billion.

Borrowings under the New Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount.

Borrowings will bear interest at a floating rate, which can be either an adjusted Eurodollar rate

plus an applicable margin or, at the Borrowers option, a base rate plus an applicable margin.

The applicable margins for the New Term Loan Facility are 5.25% with respect to Eurodollar rate borrowings and 4.25% with respect to base rate

The Borrower may voluntarily prepay loans or reduce commitments under the New Term Loan Facility, in whole or in part,

subject to minimum amounts, with prior notice but without premium or penalty (other than a 1.00% premium on any prepayment in connection with a repricing transaction prior to the date that is twelve months after the date we entered into the New Term

Loan Facility).

The Borrower will be required to prepay the New Term Loan Facility with 100% of the net cash proceeds of certain asset

sales (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios) and subject to certain reinvestment rights, 100% of the net cash proceeds of certain debt issuances and 50% of excess cash flow (such

percentage subject to reduction based on the achievement of specific first lien net leverage ratios).

The Borrowers obligations

under the New Term Loan Facility are guaranteed by Holdings and the Guarantors.

Our New Term Loan Facility is secured by a lien on substantially all of Holdings, the Borrowers and the Guarantors assets (subject to certain permitted

The New Term Loan Facility has a first-priority lien on the fixed asset collateral (equal in priority with the liens securing the Notes) and a second-priority lien on security interests in the current asset collateral (second in

priority to the liens securing the New Revolving Credit Facility), in each case, subject to other permitted liens.

The New Term Loan

Facility contains certain customary negative covenants, including, but not limited to, restrictions on the Borrowers ability and that of our restricted subsidiaries to merge and consolidate with other

companies, incur indebtedness, grant liens or security interests on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with

The New Term Loan Facility provides that, upon the occurrence of certain events of default, the Borrowers obligations

thereunder may be accelerated.

Such events of default will include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and

involuntary bankruptcy, insolvency, corporate arrangement, winding-up, liquidation or similar proceedings, material money judgments, change of control and other customary events of default.

Senior Secured Notes

connection with the Transactions, Advantage Solutions FinCo LLC (Finco) issued $775.0 million aggregate principal amount of 6.50% Senior Secured Notes due 2028 (the Notes).

Substantially concurrently with the

Transactions, Finco merged with and into Advantage Sales & Marketing Inc.

(the Issuer), with the Issuer continuing as the surviving entity and assuming the obligations of Finco.

The Notes were sold to BofA Securities, Inc.,

Deutsche Bank Securities Inc., Morgan Stanley & Co.

LLC and Apollo Global Securities, LLC.

The Notes were resold to certain non-U.S.

persons pursuant to Regulation S under the Securities Act of 1933,

as amended (the Securities Act), and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 100% of their principal amount.

The terms of the Notes

are governed by an Indenture, dated as of October 28, 2020 (the Indenture), among Finco, the Issuer, the guarantors named therein (the Notes Guarantors) and Wilmington Trust, National Association, as trustee and

collateral agent.

Interest and maturity

Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 at a rate of 6.50% per annum, commencing on

May 15, 2021.

The Notes will mature on November 15, 2028.

The Notes are guaranteed by Holdings and each of the Issuers direct and indirect wholly owned material U.S.

subsidiaries (subject to

certain permitted exceptions) and Canadian subsidiaries (subject to certain permitted exceptions, including exceptions based on immateriality thresholders of aggregate assets and revenues of Canadian subsidiaries) that is a borrower or guarantor

under the New Term Loan Facility.

Security and Ranking

The Notes and the related guarantees are the general, senior secured obligations of the Issuer and the Notes Guarantors, are secured on a

first-priority pari passu basis by security interests on the fixed asset collateral (equal in priority with liens securing the New Term Loan Facility), and are secured on a second-priority basis by security interests on the current asset

collateral (second in priority to the liens securing the New Revolving Credit Facility and equal in priority with liens securing the New Term Loan Facility), in each case, subject to certain limitations and exceptions and permitted liens.

The Notes and related guarantees rank (i) equally in right of payment with all of the Issuers and the Guarantors senior

indebtedness, without giving effect to collateral arrangements (including the New Senior Secured Credit Facilities) and effectively equal to all of the Issuers and the Guarantors senior indebtedness secured on the same priority basis as

the Notes, including the New Term Loan Facility, (ii) effectively subordinated to any of the Issuers and the Guarantors indebtedness that is secured by assets that do not constitute collateral for the Notes to the extent of the

value of the assets securing such indebtedness and to indebtedness that is secured by a senior-priority lien, including the New Revolving Credit Facility to the extent of the value of the current asset collateral and (iii) structurally

subordinated to the liabilities of the Issuers non-Guarantor subsidiaries.

Optional redemption for the Notes

The Notes are redeemable on or after November 15, 2023 at the applicable redemption prices specified in the Indenture plus accrued and

unpaid interest.

The Notes may also be redeemed at any time prior to November 15, 2023 at a redemption price equal to 100% of the aggregate principal amount of such Notes to be redeemed plus a make-whole premium, plus accrued and

unpaid interest.

In addition, the Issuer may redeem up to 40% of the original aggregate principal amount of Notes before November 15, 2023 with the net cash proceeds of certain equity offerings at a redemption price equal to 106.5% of the

aggregate principal amount of such Notes to be redeemed, plus accrued and unpaid interest.

Furthermore, prior to November 15, 2023 the Issuer may redeem during each calendar year up to 10% of the original aggregate principal amount of the Notes

at a redemption price equal to 103% of the aggregate principal amount of such Notes to be redeemed, plus accrued and unpaid interest.

If the Issuer or its restricted subsidiaries sell certain of their respective assets or experience specific kinds

of changes of control, subject to certain exceptions, the Issuer must offer to purchase the Notes at par.

In connection with any offer to purchase all Notes, if holders of no less than 90% of the aggregate principal amount of Notes validly tender

their Notes, the Issuer is entitled to redeem any remaining Notes at the price offered to each holder.

Restrictive covenants

The Notes are subject to covenants that, among other things limit the Issuers ability and its restricted subsidiaries ability to:

incur additional indebtedness or guarantee indebtedness;

pay dividends or make other distributions in respect of, or repurchase or redeem, the Issuers or a parent entitys capital stock;

prepay, redeem or repurchase certain indebtedness;

issue certain preferred stock or similar equity securities;

make loans and investments;

sell or otherwise dispose of assets;

enter into transactions with affiliates;

enter into agreements restricting the Issuers subsidiaries

ability to pay dividends;

and consolidate, merge or sell all or substantially all of the Issuers assets.

Most of these covenants will be suspended on the Notes so long as they have investment grade ratings from both Moodys Investors

Service, Inc.

and S&P Global Ratings and so long as no default or event of default under the Indenture has occurred and is continuing.

Events of default

following constitute events of default under the Notes, among others:

default in the payment of interest;

default in the payment of principal;

failure to comply with covenants;

failure to pay other indebtedness after final maturity or acceleration

of other indebtedness exceeding a specified amount;

certain events of bankruptcy;

failure to pay a judgment for payment of money exceeding a specified aggregate amount;

voidance of subsidiary guarantees;

failure of any material provision of any

security document or intercreditor agreement to be in full force and effect;

and lack of perfection of liens on a material portion of the collateral, in each case subject to applicable grace periods.

First Lien Credit Agreement and Second Lien Credit Agreement

In connection with the Transactions, our debt arrangements under the First Lien Credit Agreement and Second Lien Credit Agreement as well as

the AR Facility that existed as of September 30, 2020 were repaid and terminated with incremental costs of $86.8 million.

For a description of the First Lien Credit Agreement and Second Lien Credit Agreement that have been refinanced in

connection with the consummation of the Transactions on October 28, 2020, please see the additional information set forth in Note 7 Debt , to our audited consolidated financial statements for the year ended December 31, 2020.

Future Cash Requirements

The following table summarizes certain estimated future cash requirements under the Companys various contractual obligations at

December 31, 2020, in total and disaggregated into current and long-term obligations:

(in thousands)

Operating lease liabilities (1)

Client deposits (2)

Total debt excluding deferred issuance

Other long-term liabilities on the consolidated balance sheets

Contingent consideration (4)

Unpaid claims (5)

Holdbacks (6)

Total contractual obligations

Refer to Note 8 Leases of our audited consolidated financial statements for the year ended

December 31, 2020 for additional information regarding the maturity of operating lease liabilities.

Represents payments collected from our clients, primarily, associated with market development funds that arise

out of our business.

We have an aggregate principal amount of $1.325 billion borrowing on the New Term Loan Facility, which

bears interest at a floating rate, which can be either an adjusted Eurodollar rate plus an applicable margin or, at the Borrowers option, a base rate plus an applicable margin, and $775.0 million in Senior Secured Notes, which is subject

to a fixed interest rate of 6.5%.

Refer to Note 7 Debt of our audited consolidated financial statements for the year ended December 31, 2020 for additional information regarding the maturities of debt principal.

excluding deferred issuance costs does not include the obligation of future interest payments.

Refer to Note 6 Other Liabilities of our audited consolidated financial statements for the year

ended December 31, 2020 for additional information regarding the contingent consideration liabilities.

Represents $56.2 million of an estimated liability under our workers compensation programs for

claims incurred but unpaid and $8.8 million of employee insurance reserves as of December 31, 2020.

Represents $6.2 million of holdback amounts which are used to withhold a portion of the initial purchase

price payment until certain post-closing conditions are satisfied and are typically settled within 24 months of the acquisition.

Cash and Cash Equivalents Held Outside the United States

As of December 31, 2020 and 2019, $87.7 million and $59.3 million, respectively, of our cash and cash equivalents and marketable

securities were held by foreign subsidiaries.

As of December 31, 2020 and 2019, $28.9 million and $31.8 million, respectively, of our cash and cash equivalents and marketable securities were held by foreign branches.

We assessed our determination as to our indefinite reinvestment intent for certain of our foreign subsidiaries and recorded a deferred tax

liability of approximately $2.1 million of withholding tax as of December 31, 2020 for unremitted earnings in Canada with respect to which the Company does not have an indefinite reinvestment assertion.

We will continue to evaluate our

cash needs, however we currently do not intend, nor do we foresee a need, to repatriate funds from the foreign subsidiaries except for Canada.

We have continued to assert indefinite reinvestment on all other earnings as it is necessary for

continuing operations and to grow the business.

If at a point in the future our assertion changes, we will evaluate tax-efficient means to repatriate the income.

In addition, we expect existing domestic cash

and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and

thereafter for the foreseeable future.

If we should require more capital in the United States than is generated by our domestic

operations, for example, to fund significant discretionary activities such as business acquisitions, we could elect to repatriate future earnings from foreign jurisdictions.

These alternatives could result in higher tax expense or increased interest

We consider the majority of the undistributed earnings of our foreign subsidiaries, as of December 31, 2020, to be indefinitely reinvested and, accordingly, no provision has been made for taxes in excess of the $2.1 million noted

Off-Balance Sheet Arrangements

We do not have any off-balance sheet financing arrangements or liabilities, guarantee

contracts, retained or contingent interests in transferred assets or any obligation arising out of a material variable interest in an unconsolidated entity.

We do not have any majority-owned subsidiaries that are not included in our consolidated

financial statements.

Additionally, we do not have an interest in, or relationships with, any special-purpose entities.

Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and

assumptions about future events that affect amounts reported in our consolidated financial statements and related notes, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements.

We evaluate our

accounting policies, estimates and judgments on an on-going basis.

We base our estimates and judgments on historical experience and various other factors that are believed to be reasonable under the

circumstances.

Actual results may differ from these estimates under different assumptions and conditions.

We evaluated the development

and selection of our critical accounting policies and estimates and believe that the following involve a higher degree of judgment or complexity and are most significant to reporting our results of operations and financial position, and are

therefore discussed as critical.

The following critical accounting policies reflect the significant estimates and judgments used in the preparation of our consolidated financial statements.

With respect to critical accounting policies, even a

relatively minor variance between actual and expected experience can potentially have a materially favorable or unfavorable impact on subsequent results of operations.

More information on all of our significant accounting policies can be found in

the footnotes to our audited consolidated financial statements included elsewhere in this Annual Report.

Revenue Recognition

We recognize revenues when control of promised goods or services are transferred to the client in an amount that reflects the consideration

that we expect to be entitled to in exchange for such goods or services.

Substantially all of our contracts with clients involve the transfer of a service to the client, which represents the performance obligation that is satisfied over time because

the client simultaneously receives and consumes the benefits of the services provided.

In most cases, the contracts include a performance obligation that is comprised of a series of distinct services that are substantially the same and that have the

same pattern of transfer (i.e., distinct days of service).

We allocate variable consideration to each period of service to which it relates.

Revenues related to the sales segment are primarily recognized in the form of

commissions, fee-for-service or on a cost-plus basis for providing headquarter relationship management, analytics, insights and intelligence services,

administrative services, retail services, retailer client relationships and in-store media programs and digital technology solutions (which include our business intelligence solutions, e-commerce services and content services).

Marketing segment revenues are primarily recognized in the form of a fee-for-service (including retainer fees, fees charged to clients based on hours incurred, project-based fees or fees for

executing in-person consumer engagements or experiences, which engagements or experiences we refer to as events), commissions or on a cost-plus basis for providing experiential marketing, shopper and

consumer marketing services, private label development and our digital, social and media services.

Our revenue recognition policies

generally result in recognition of revenues at the time services are performed.

Our accounting policy for revenue recognition has an impact on our reported results and relies on certain estimates that require judgments on the part of management.

record an allowance as a reduction to revenue for differences between estimated revenues and the amounts ultimately invoiced to our clients based on our historical experience and current trends.

Cash collected in advance of services being performed

is recorded as deferred revenues.

We have contracts that include variable consideration whereby the ultimate consideration is contingent

on future events such as the clients sales to retailers, hours worked, event count, costs incurred and performance incentive bonuses.

Commission revenues are generally earned upon performance of headquarter relationship management, analytics,

insights and intelligence, e-commerce, administration and retail services arrangements.

As part of these arrangements, we provide a variety of services to consumer goods manufacturers in order to

improve the manufacturers sales to retailers.

This includes primarily outsourced sales, business development, category and space management, relationship management and in-store sales strategy

In exchange for these services, we earn an agreed upon percentage of our clients sales to retailers, which is agreed upon on

a manufacturer-by-manufacturer basis.

We may be entitled to additional fees upon meeting specific performance goals or thresholds, which we refer to as bonus

The variability of the consideration for the services transferred during a reporting period is typically resolved by the end of the reporting period.

However, for certain client contracts, we estimate the variable consideration for the

services that have been transferred to the client during the reporting period.

We typically estimate the variable consideration based on the expected value method.

Estimates are based on historical experience and current facts known during the

reporting period.

We recognize revenue related to variable consideration if it is probable that a significant reversal of revenue recognized will not occur.

When such probable threshold is not satisfied, we will constrain some or all of the variable

consideration, and such constrained amount will not be recognized as revenue until the probable threshold is met or the uncertainty is resolved and the final amount is known.

We record an adjustment to revenue for differences between estimated

revenues and the amounts ultimately invoiced to the client.

Adjustments to revenue during the current period related to services transferred during prior periods were not significant for the year ended December 31, 2020.

We have contracts that include fixed consideration such as a fee per project or a fixed monthly fee.

For contracts with a fee per project,

revenue is recognized over time using an input method such as hours worked that reasonably depicts our performance in transferring control of the services to the client.

We determined that the input method represents a reasonable method to measure

the satisfaction of the performance obligation to the client.

For contracts with a fixed monthly fee, revenue is recognized using a time-based measure resulting in a straight-line revenue recognition.

A time-based measure was determined to represent

a reasonable method to measure the satisfaction of the performance obligation to the client because we have a stand ready obligation to make itself available to provide services upon the clients request or the client receives the benefit from

our services evenly over the contract period.

We evaluate each client contract individually in accordance with the applicable accounting

guidance to determine whether we act as a principal (whereby we would present revenue on a gross basis) or as an agent (whereby we would present revenue on a net basis).

While we primarily act as a principal in our arrangements and report revenues

on a gross basis, given the varying terms of our client contracts, we will occasionally act as an agent and in such instances present revenues on a net basis.

For example, for certain advertising arrangements, our clients purchase media content in

advance, and we do not take on any risk of recovering the cost to acquire the media.

As a result, we determined we act as the agent in these arrangements and record revenues and their

related costs on a net basis as its agency services are performed.

However, in cases where media is not purchased in advance by our clients, we record such revenues and the related costs on a

gross basis, as we bear the risk of recovering the costs to acquire the media and are responsible for fulfillment of the services.

record revenues from sales of services and the related direct costs in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent.

In situations where we act as a principal in the transaction, we report

gross revenues and cost of revenues.

When we act as an agent, we report the revenues and their related costs on a net basis.

Cost of revenues does not include depreciation charges for fixed assets.

Goodwill represents the excess

of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition.

We test for impairment of goodwill at the reporting unit level.

We generally combine reporting units, which are a component

of an operating segment when they have similar economic characteristics, nature of services, types of client, distribution methods and regulatory environment.

We have two reporting units, sales and marketing, which are also our operating segments.

We test our goodwill for impairment at the beginning of the fourth quarter of a given fiscal year, and whenever events or changes in

circumstances indicate that the carrying value of a reporting unit may exceed its fair value.

We have the option to perform a qualitative assessment of whether it is more likely than not that a reporting units fair value is less than its

carrying value before performing a quantitative impairment test.

If the qualitative assessment indicates it is not more likely than not that the fair value of a reporting unit, as determined applying the quantitative impairment test described below,

is less than the carrying amount, then there is no need to perform the quantitative impairment test.

Upon performing the quantitative impairment test, if the fair value of the reporting unit is less than its carrying amount, goodwill is impaired and

the excess of the reporting units carrying value over the fair value is recognized as an impairment loss;

however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit.

Our annual goodwill impairment assessment for the year ended December 31, 2020 was performed as of October 1, 2020.

combination of income and market approaches to estimate the fair value of our reporting units.

The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for, the reporting units revenue

growth rates, operating margins terminal growth rates, and discount rates, all of which require significant management judgment.

These assumptions are based on significant inputs not observable in the market and thus represent Level 3

measurements within the fair value hierarchy (described in Fair Value Measurements in Note 1, Organization and Significant Accounting Policies,).

The market approach applies market multiples derived from the

historical earnings data of selected guideline publicly-traded companies to our reporting units businesses to yield a second assumed value of each reporting unit, which requires significant management judgement.

The guideline companies are

first screened by industry group and then further narrowed based on the reporting units business descriptions, markets served, competitors, operating margins and revenue size.

Market multiples are then selected from within the range of these

guideline companies multiples based on the subject reporting unit.

We based our fair value estimates on assumptions we believe to be reasonable but which are unpredictable and inherently uncertain.

A change in these underlying assumptions would

cause a change in the results of the tests and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.

Additionally, if actual results are not consistent with the estimates and

assumptions or if there are significant changes to our planned strategy, it may cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.

We compare a weighted average of the output from the income and market approaches to the carrying value of each reporting unit.

compare the aggregate estimated fair value of our reporting units to the estimated value of our total invested capital on a marketable basis.

Based on the results of our quantitative impairment test performed for our reporting units,

we determined that our goodwill was not impaired for the year ended December 31, 2020.

The fair value of the sales reporting unit exceeded its carrying value by 8.3%.

The fair value of the marketing reporting unit significantly exceeded its

carrying value, which we define as greater than 20%.

Management determined that no additional triggering events occurred that required us to perform an interim goodwill impairment test as of December 31, 2020.

In performing the quantitative impairment test for the year ended December 31, 2019, we had also determined that our goodwill was not

The fair value of the sales reporting unit exceeded its carrying value by 3.5%.

The fair value of the marketing reporting unit significantly exceeded its carrying value.

Management determined that no additional triggering events occurred

that required us to perform an interim goodwill impairment test as of December 31, 2019.

During the year ended December 31,

2018, based on the results of our quantitative impairment test performed for the sales reporting unit, we recognized a $652.0 million non-cash goodwill impairment charge in the sales reporting

unit for the year ended December 31, 2018.

While there was no single determinative event or factor, the consideration of the weight of evidence of several factors that led us to conclude that it was more likely than not that the fair value of

the sales reporting unit was below its carrying value.

These factors included:

(i) the decrease of revenues and profitability due to a large retailer revising its in-store retail merchandising

program to restrict manufacturers ability to select any third-party outsource provider to perform unrestricted and unmonitored retail merchandising, (ii) the unrelated decrease of revenues and profitability related to reduced services

from several clients in the grocery channel and foodservice channel, (iii) the combination of our completed third quarter and preliminary fourth quarter results being below managements expectations and (iv) the development and

approval of our 2019 annual operating plan in the fourth quarter of 2018, which provided additional insights into expectations such as lower long-term revenue growth and profitability expectations.

We are not aware of other larger retailers that intend to adopt a similar model and we have not identified any anticipated limitations on the

services we provide to clients that would have a material and adverse impact on our future cash flows.

We do not believe the circumstances described above are representative of a broader trend.

However, uncertainty in the way retailers conduct

business could have an impact on our future growth and could result in future impairment charges.

We recorded the non-cash goodwill impairment charge in 2018, which has been reflected in our

Consolidated Statements of Operations and Comprehensive Loss.

Based on the results of our quantitative impairment test performed for the

sales reporting unit for the year ended December 31, 2018, our sales reporting unit was written down to its respective fair value, resulting in zero excess fair value over its carrying value.

Based on the results of our quantitative impairment

test performed for the marketing reporting unit for the year ended December 31, 2018, we determined that goodwill was not impaired.

The fair value of the marketing reporting unit significantly exceeded its carrying value, which we define as

being greater than 20%.

Indefinite-Lived Assets

Our indefinite-lived intangible assets are comprised of our sales and marketing trade names.

Intangible assets with indefinite useful lives are

not amortized but tested annually, at the beginning of the fourth quarter, for impairment or more often if events occur or circumstances change that would create a triggering event.

We have the option to perform a qualitative assessment of whether

it is more likely than not that the indefinite-lived intangible assets fair value is less than its carrying value before performing a quantitative impairment test.

We test our indefinite-lived intangible assets for impairment using a relief

from royalty method by comparing the estimated fair values of the indefinite-lived intangible assets with the carrying values.

The estimates used in the determination of fair value are subjective in nature and involve the use of significant

These estimates and assumptions include revenue growth rates, terminal growth rates, discount rates and royalty rates.

which requires significant management judgement.

The assumptions are based on significant inputs not

observable in the market and thus represent Level 3 measurements within the fair value hierarchy.

We base our fair value estimates on assumptions we believe to be reasonable, but which are

unpredictable and inherently uncertain.

Actual future results may differ from the estimates.

In connection with our annual quantitative

impairment test as of October 1, 2020 and 2019, we concluded that our indefinite-lived intangible assets were not impaired for the years ended December 31, 2020 and 2019.

The fair value of the indefinite-lived intangible assets related to

sales trade names exceeded its carrying value by 13.3% and 8.3% for the years ended December 31, 2020 and 2019, respectively.

The fair value of the indefinite-lived intangible assets related to marketing trade names exceeded its carrying value by

8.4% and 10.0% for the years ended December 31, 2020 and 2019, respectively.

Management determined that no additional triggering events occurred that required us to perform an interim impairment test of indefinite-lived intangible assets as of

December 31, 2020 and 2019.

During the year ended December 31, 2018, we concluded the carrying value of the indefinite-lived trade

name in the sales reporting unit exceeded its estimated fair value.

While there was no single determinative event or factor, the factors that led to the impairment were the same circumstances outlined in the goodwill impairment discussion above.

a result, we recognized a non-cash intangible asset impairment charge of $580.0 million during the year ended December 31, 2018, which has been reflected in our Consolidated Statements of

Operations and Comprehensive Loss.

Based on the quantitative test performed for the indefinite-lived marketing trade name, we determined that the indefinite-lived marketing trade name was not impaired for the year ended December 31, 2018.

Equity-Based Compensation

2021 and February 2021, we granted performance restricted stock units with respect to our Class A common stock (PSUs) under the Advantage Solutions Inc.

2020 Incentive Award Plan (the 2020 Plan).

The grants provided for

a target of 2,557,188 shares to be issued pursuant to the PSUs under the 2020 Plan.

The PSUs are subject to the achievement of certain performance conditions based on the Companys Adjusted EBITDA and revenues and the recipients continued

service to the Company, the PSUs are scheduled to vest over a three-year period from the date of grant and may vest from 0% to 150% of the targeted number of shares set forth in the immediately preceding sentence (any shares that may be earned above

the target number are scheduled to vest on the third anniversary of the grant date).

In January 2021 and February 2021, we granted

restricted stock units with respect to our Class A common stock (RSUs) of 1,703,663 shares.

RSUs for 125,000 shares of our Class A common stock are scheduled to vest in two equal tranches on the first and second anniversaries

of the grant date.

The remaining RSUs are scheduled to vest in three equal tranches, and a tranche shall vest on each of the first, second and third anniversaries of the grant date.

In January 2021, we also granted RSUs to certain of our directors (Ronald E.

Blaylock, Beverly Chase, Virginie Costa and Elizabeth Muñoz-Guzman) with respect to 10,356 shares each.

The grants were made in accordance with the Companys Non-Employee Director Compensation Policy.

The RSUs granted

to these directors are scheduled to vest on the earlier of the one-year anniversary of the date of grant or the day immediately preceding the date of the first annual meeting of the Companys stockholders

occurring after the date of grant.

Topco, the parent company of the Company, has a long-term equity incentive plan that allows for the

grant of time- and performance-based profit interests, or Common Series C Units, in Topco to certain of its and its subsidiaries directors and employees in exchange for services provided to us.

Since we receive the benefit associated with

such services the related expense is recorded within our Consolidated Statements of Operations and Comprehensive Loss.

These profit interests are subject to certain vesting requirements including time and performance requirements based on specified

annual targets substantially similar to Adjusted EBITDA

These awards are subject to forfeiture unless the following performance conditions are met:

(i) 75% of the awards will vest when certain of the Advantage Sponsors as of the date

of the 2014 Topco Acquisition, or the Common Series A Limited Partners of Topco, realize a pre-tax internal rate of return of 8% compounded annually and (ii) the remaining 25% of the

awards vest when the Common Series A Limited Partners of Topco realize a pre-tax internal rate of return of 20% compounded annually.

On March 15, 2018, Topco modified the vesting requirements.

In accordance with the performance conditions, generally 75% of the awards will vest over a four-year term, subject to the employees continued employment.

The remaining 25% of the equity awards vest when the Advantage Sponsors as of the date

of the 2014 Topco Acquisition realize a pre-tax internal rate of return of 20% compounded annually.

Once the equity awards vest, forfeiture may still occur as a result of termination of employment of

the equity award holders or if an exit event occurs which is not a vesting exit event.

Notwithstanding prior vesting, certain awards are subject to a requirement that the Advantage Sponsors receive a specific return on their equity investment, prior

to the awards participating in any distribution whether in cash, property or securities of Topco.

Certain awards vest over the remaining initial four-year terms, subject to the employees continued employment.

The limited partnership agreement

also authorizes Topco to issue up to 35,000 Common Series C-2 Units to members of our management, which Common Series C-2 Units are subject

to substantially similar vesting and forfeiture provisions as the Common Series C Units, including forfeiture upon certain terminations of employment of the applicable holders or

a non-qualifying exit event.

As a result of the Transactions, the Company recognized non-cash compensation expenses of $62.7 million in connection with the Common Series C Units and $13.3 million in connection with the Common

Series C-2 Units for the year ended December 31, 2020.

Additional expenses of $5.7 million and $0.4 million are anticipated to occur, when the time-based options further vest in 2021

and 2022, respectively.

If the vesting exit event of the remaining 25% of the equity awards is deemed probable to occur, the Company would have recognized a compensation expense of $8.2 million and $0.1 million for the years ended

December 31, 2020 and 2021, respectively.

No expense was recorded in the years ended December 31, 2019, or 2018 since a vesting exit event was not yet deemed probable of occurring.

Topco also issued time-vesting profit interests to entities affiliated with one of the Advantage Sponsors, from whom we received services.

These time-vesting profit interests vested on a monthly basis beginning on October 1, 2014 through September 1, 2019.

We record the compensation expense associated with the issuance of such awards

for non-employees as we receive the benefit of the services being provided by the non-employees.

Topco is a private company with no active market for its equity securities.

In determining the fair value of Topcos equity, we utilize

three widely recognized valuation models:

Discounted Cash Flow Analysis (Income Model) The discounted cash flow analysis is dependent on

a number of significant management assumptions regarding the expected future financial results of us and Topco as well as upon estimates of an appropriate cost of capital;

Guideline Public Companies (Market Model) Multiples of historical and projected EBITDA from

guideline public companies are applied to estimate the fair value for the equity of Topco;

Mergers and Acquisition (Market Model) Multiples of historical enterprise value divided by

last twelve months revenues, and enterprise value divided by last twelve months EBITDA for mergers and acquisitions of comparable companies.

After considering the results of each of these valuation models, we then use the Backsolve Option Pricing Method, or OPM, to determine the

fair value of the profit interest awards and resulting equity-based compensation expense.

Assumptions used in the OPM include the expected life, volatility, risk-free rate and

dividend yield.

We utilize the observable data for a group of peer companies that grant options with substantially similar terms to assist in developing our volatility assumption.

The risk-free rate is based on U.S.

Treasury yields in effect at the

time of grant over the expected term.

We assume a dividend yield of 0% as we have not historically paid distributions.

The assumptions

used in estimating the fair value of equity-based payment awards represent managements best estimates, but these estimates involve inherent uncertainties and the application of management judgment.

As a result, if factors change and we use

different assumptions, equity-based compensation expense could be different in the future.

As a result of the publicly traded price of

our common stock, certain key valuation inputs to the option pricing method will be based on publicly available information.

These key valuation inputs include the fair value of our common stock, and once there is a sufficient trading history, the

volatility would be derived from the historical trading activity of our common stock.

Refer to Notes 11 Equity-Based

Compensation and 18 Subsequent Events , to our audited consolidated financial statements included elsewhere in this Annual Report for details regarding Topcos and our equity-based compensation plans.

Recently Issued Accounting Pronouncements

Refer to Note 1, Organization and Significant Accounting Policies Recent Accounting Pronouncements , to our audited

consolidated financial statements included elsewhere in this Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity