Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of its Executive Chairman, Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act) as of December 31, 2021. Based upon that evaluation, the Company’s Executive Chairman, Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2021.
The Company is committed to maintaining a strong internal control environment which is accompanied by management’s ongoing focus on processes and related controls to achieve accurate and reliable financial reporting. However, all systems of internal control, no matter how well designed, have inherent limitations. Therefore, even those systems deemed to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of the effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
(b) Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. The Company conducted an evaluation of the effectiveness of its internal control over financial reporting based upon the framework established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are made only in accordance with the authorization of management and the Board of Directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.
If the Company identifies any material weaknesses, the COSO Framework does not allow the Company to conclude that our internal control over financial reporting is effective. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Based upon its assessment, management concluded that the Company’s internal control over financial reporting as of December 31, 2021 was effective using the COSO Framework.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm that audited the Company’s consolidated financial statements as of and for the year ended December 31, 2021, as stated in their report, included in Item 8 of this Form 10-K, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021.
(c) Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information concerning our executive officers is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
Information with respect to our directors and the nomination process is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
Information regarding our audit committee and our audit committee financial experts is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
Information required by Item 405 of Regulation S-K is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
Item 11. Executive Compensation
Information with respect to executive compensation is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information with respect to security ownership of certain beneficial owners and management is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information with respect to such contractual relationships and independence is incorporated herein by reference to the information in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
Item 14. Principal Accountant Fees and Services
Information with respect to principal accounting fees and services and pre-approval policies are incorporated herein by reference to information included in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.
PART IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as a part of this Form 10-K:
(a)(1) All Financial Statements
Index to Financial Statements: Page
Consolidated Balance Sheets as of December 31, 2021 and 2020
F- 1
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019
F- 2
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021, 2020 and 2019
F- 3
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019
F- 4
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019
F- 5
Notes to Consolidated Financial Statements
F- 6
(a)(2) Financial Statement Schedules
Schedule II—“Financial Information of Registrant”, is filed as part of this Annual Report on Form 10-K and should be read in conjunction with the financial statements and notes thereto contained in Item 8—“Financial Statements and Supplementary Data.”
The financial statements of Invesque Inc. required by Rule 3-09 of Regulation S-X will be provided as Exhibit 99.1 to this report.
All other financial statements and financial statement schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instruction, are not material or are not applicable and, therefore, have been omitted.
(a)(3) Exhibits
Exhibit No.
Description
3.1 Fifth Articles of Amendment and Restatement of the Registrant, effective June 6, 2018 (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on June 7, 2018 and herein incorporated by reference).
3.2 Fourth Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on January 4, 2017 and herein incorporated by reference).
3.3 Articles Supplementary of the Registrant, dated December 29, 2014 (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on December 29, 2014 and herein incorporated by reference).
4.1 Form of Certificate of Common Stock (previously filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-A/A (File No. 001-33549), filed on June 7, 2018 and herein incorporated by reference.
4.2 Form of Warrant to Purchase Common Stock (Expiring June 30, 2022) (previously filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on April 10, 2018 and herein incorporated by reference).
4.3 Description of the Registrant’s Securities Registered under Section 12 of the Securities Exchange Act of 1934 (previously filed as Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference).
10.1 Registrant’s 2017 Omnibus Incentive Plan (previously filed as Exhibit 10.1 to the Registrant’s Form S-8 Registration Statement (File No. 333-218827), filed on June 19, 2017 and herein incorporated by reference).**
Exhibit No.
Description
10.2 Form of Non-Qualified Stock Option Agreement under the Registrant’s 2017 Omnibus Incentive Plan (previously filed as Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 14, 2018 and herein incorporated by reference)**
10.3 Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (annual vesting) (previously filed as Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 14, 2018 and herein incorporated by reference). **
10.4 Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (cliff vesting) (previously filed as Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 14, 2018 and herein incorporated by reference). **
10.5 Form of Non-Qualified Stock Option Agreement under the Registrant’s 2017 Omnibus Incentive Plan (for 2020 and beyond) (previously filed as Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference) .**
10.6 Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (for 2020 and beyond) (annual vesting) (previously filed as Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference) .**
10.7 Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (for 2020 and beyond) (cliff vesting) (previously filed as Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference) .**
10.8 Form of Performance Restricted Stock Unit Agreement (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on August 4, 2021 and herein incorporated by reference). **
10.9 Form of Indemnification Agreement (previously filed as Exhibit 10.9 to the Registrant’s Registration Statement on Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference).
10.10 Amended and Restated Transition Services Agreement between Tricadia Holdings, L.P. and Tiptree Inc., dated as of February 15, 2019 (previously filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on April 22, 2019 and herein incorporated by reference).
10.11 Credit Agreement, dated as of February 21, 2020, between Tiptree Inc., Tiptree Operating Company, LLC, Fortress Credit Corp. as Administrative Agent, Collateral Agent and Lead Arranger, and the lenders party thereto. (previously filed as Exhibit 10.1 to Form 8-K (File No. 001-33549), filed February 21, 2020 and herein incorporated by reference).
10.12 Amended and Restated Credit Agreement, dated as of August 4, 2020 by and among Fortegra Financial Corporation (“Fortegra”) and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (previously filed as Exhibit 10.1 to Form 8-K (File No. 001-33549), filed August 5, 2020 and herein incorporated by reference).
10.13 Credit Agreement, dated as of October 16, 2020 by and among South Bay Financial Corporation, South Bay Funding LLC, the lenders from time to time party thereto and Fifth Third Bank, National Association as the administrative agent (previously filed as Exhibit 10.1 to Form 8-K (File No. 001-33549), filed October 21, 2020 and herein incorporated by reference).
10.14 Equity Interest Purchase Agreement, dated December 16, 2019, by and among Tiptree Warranty Holdings, LLC and Peter Masi (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on December 17, 2019 and herein incorporated by reference).
10.15 First Amendment to the Equity Interest Purchase Agreement, effective November 3, 2021, by and among Fortegra Warranty Holdings, LLC and Peter Masi (previously filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-33549) filed on November 3, 2021 and herein incorporated by reference).
10.16 Amendment to Partner Emeritus Agreement, effective January 1, 2022, by and between Tiptree Inc. and Arif Inayatullah (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on January 3, 2022 and herein incorporated by reference).
10.17 Securities Purchase Agreement between and among Tiptree Inc., The Fortegra Group, Inc. and WP Falcon Aggregator, L.P. dated October 11, 2021 (previously filed as Exhibit 10.1 to the Registrant ’ s Current Report on Form 8-K (File No. 001-33549) filed on October 12 , 2021 and herein incorporated by reference).
Exhibit No.
Description
10.18 Form of Warrant to Purchase Common Stock (previously filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33549) filed on October 12 , 2021 and herein incorporated by reference).
10.19 Form of Investor Additional Warrants to Purchase Common Stock (previously filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-33549) filed on October 12 , 2021 and herein incorporated by reference).
10.20 Form of Tiptree Additional Warrants to Purchase Common Stock (previously filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 001-33549) filed on October 12 , 2021 and herein incorporated by reference).
10.21 Form of Certificate of Designation of Series A Preferred Stock (previously filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 001-33549) filed on October 12 , 2021 and herein incorporated by reference).
10.22 Form of Stockholders Agreement between and among Tiptree Holdings LLC, The Fortegra Group Inc. and WP Falcon Aggregator, L.P. (previously filed as Exhibit 10.6 to Form 8-K (File No. 001-33549) filed on the Registrant’s Current Report on October 12 , 2021 and herein incorporated by reference).
10.23 Form of Registration Rights Agreement between and among Tiptree Holdings LLC , The Fortegra Group Inc., WP Falcon Aggregator, L.P. and the other holders set forth therein (previously filed as Exhibit 10.7 to the Registrant’s Current Report on Form 8-K (File No. 001-33549) filed on October 12 , 2021 and herein incorporated by reference).
10.24 Investment Advisory Agreement by and among Tiptree Inc., The Fortegra Group, LLC and subsidiaries and Corvid Peak Capital Management, LLC effective as of May 3, 2021 and July 1, 2021 (previously filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-33549) filed on August 4, 2021 and herein incorporated by reference).
10.25 Executive Employment Agreement by and among Tiptree Inc. and Randy Maultsby, dated as of July 14, 2021 (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on July 14, 2021 and herein incorporated by reference). **
21.1 Subsidiaries of the Registrant (filed herewith).
23.1 Consent of Independent Registered Public Accounting Firm (filed herewith).
23.2 Consent of KPMG LLP, Independent Auditors of Invesque Inc. (filed herewith).
31.1 Certification of Executive Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.3 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1 Certification of Executive Chairman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.3 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
99.1 Consolidated Financial Statements of Invesque Inc. as at December 31, 2021 and 2020 (filed herewith).
99.2 Consolidated Financial Statements of Invesque Inc. as at December 31, 2020 and 2019 (filed herewith).
101.INS XBRL Instance Document*
101.SCH XBRL Taxonomy Extension Schema Document*
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB XBRL Taxonomy Extension Label Linkbase Document*
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document*
Exhibit No.
Description
101.DEF XBRL Taxonomy Extension Definition Linkbase Document*
104 Cover page from Tiptree Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, formatted in iXBRL (included in Exhibit 101).
* Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets (audited) for December 31, 2021 and December 31, 2020, (ii) the Consolidated Statements of Operations (audited) for the years ended December 31, 2021, 2020 and 2019, (iii) the Consolidated Statements of Comprehensive Income (Loss) (audited) for the years ended December 31, 2021, 2020 and 2019, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (audited) for the years ended December 31, 2021, 2020 and 2019, (v) the Consolidated Statements of Cash Flows (audited) for the years ended December 31, 2021, 2020 and 2019 and (vi) the Notes to the Consolidated Financial Statements (audited).
** Denotes a management contract or compensatory plan, contract or arrangement.
Item 16. Form 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Tiptree Inc. has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Tiptree Inc.
Date: March 11, 2022 By:/s/ Jonathan Ilany
Jonathan Ilany
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/ Jonathan Ilany
Jonathan Ilany
Chief Executive Officer and Director (Principal Executive Officer) March 11, 2022
/s/ Sandra Bell
Sandra Bell
Chief Financial Officer (Principal Financial Officer and
Principal Accounting Officer) March 11, 2022
/s/ Michael G. Barnes
Michael G. Barnes
Executive Chairman and Director March 11, 2022
/s/ Randy S. Maultsby
Randy S. Maultsby
President and Director March 11, 2022
/s/ Paul M. Friedman
Paul M. Friedman
Director March 11, 2022
/s/ Lesley Goldwasser
Lesley Goldwasser
Director March 11, 2022
/s/ Bradley E. Smith
Bradley E. Smith
Director March 11, 2022
/s/ Dominique Mielle
Dominique Mielle
Director March 11, 2022
Schedule II — Condensed Financial Information of Registrant
TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF INCOME
(All amounts in thousands) For the Year Ended December 31,
2021 2020 2019
Revenues
Interest income $ 259 $ 223 $ —
Other revenue 67 232 —
Total revenues 326 455 —
Expenses
Employee compensation and benefits 28,060 15,195 —
Interest expense — 4,681 —
Professional fees 6,656 4,476 —
Rent and facilities 1,993 2,094 —
General and administrative 1,254 1,259 —
Depreciation and amortization 805 807 —
Loss on extinguishment of debt — 353 —
Other expenses 1,305 1,513 3
Total expenses 40,073 30,378 3
Equity in earnings (losses) of subsidiaries, net of tax (1)
73,164 ( 24,855 ) 18,364
Income (loss) before taxes 33,417 ( 54,778 ) 18,361
Less: provision (benefit) for income taxes ( 4,715 ) ( 25,620 ) —
Net income (loss) attributable to Tiptree Inc. common stockholders $ 38,132 $ ( 29,158 ) $ 18,361
(1) E liminated in consolidation.
TIPTREE INC.
PARENT COMPANY ONLY CONDENSED BALANCE SHEETS
(All amounts in thousands, except share data) As of December 31,
2021 2020
Assets
Investment in subsidiaries (1)
$ 370,632 $ 337,951
Cash and cash equivalents 2,456 712
Notes and accounts receivable, net 2,897 2,622
Intercompany receivables, net (1)
— —
Income taxes receivable 15,968 15,590
Deferred tax assets 20,830 44,161
Other assets 14,100 15,332
Total assets $ 426,883 $ 416,368
Liabilities and Stockholders’ Equity
Liabilities
Deferred tax liabilities $ — $ 23,889
Operating lease liability 11,319 12,241
Intercompany payables, net (1)
7,136 9,861
Accrued expenses 18,731 7,490
Other liabilities 6,743 6,743
Total liabilities $ 43,929 $ 60,224
Stockholders' Equity
Preferred stock: $ 0.001 par value, 100,000,000 shares authorized, none issued or outstanding
$ — $ —
Common stock: $ 0.001 par value, 200,000,000 shares authorized, 34,124,153 and 32,682,462 shares issued and outstanding, respectively
34 33
Additional paid-in capital 317,459 315,014
Accumulated other comprehensive income (loss), net of tax ( 2,685 ) 5,674
Retained earnings 68,146 35,423
Total stockholders’ equity 382,954 356,144
Total liabilities and stockholders' equity $ 426,883 $ 416,368
(1) E liminated in consolidation.
TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS
(All amounts in thousands) For the Year Ended December 31,
2021 2020 2019
Operating Activities:
Net income (loss) attributable to Tiptree Inc. common stockholders $ 38,132 $ ( 29,158 ) $ 18,361
Adjustments to reconcile net income to net cash provided by operating activities
Equity in earnings of subsidiaries (1)
( 73,164 ) 24,855 ( 18,364 )
Depreciation expense 805 807 —
Deferred provision (benefit) for income taxes ( 528 ) ( 15,815 ) —
Non-cash lease expense 1,843 1,660 —
Non-cash compensation expense 8,580 3,110 —
Amortization of deferred financing costs — 172 —
Changes in operating assets and liabilities
Net changes in other operating assets and liabilities 5,412 1,264 ( 583 )
Net cash provided by (used in) operating activities ( 18,920 ) ( 13,105 ) ( 586 )
Investing Activities:
Proceeds from the sale of businesses 125 — —
Proceeds from notes receivable 169 — —
Issuance of notes receivable ( 432 ) — —
Asset acquisitions due to merger with Operating Co. — 488 —
Net cash flows provided by (used in) provided by investing activities ( 138 ) 488 —
Financing Activities:
Distributions from subsidiaries (1)
30,996 35,092 14,587
Dividends paid ( 5,409 ) ( 5,565 ) ( 5,502 )
Repurchases of common stock ( 2,882 ) ( 13,889 ) ( 9,085 )
Subsidiary RSU exchanges ( 1,458 ) ( 2,034 ) —
Cash paid in connection with the vesting of units ( 445 ) ( 362 ) —
Net cash provided by (used in) financing activities 20,802 13,242 —
Net increase (decrease) in cash and cash equivalents 1,744 625 ( 586 )
Cash and cash equivalents at beginning of period 712 87 673
Cash and cash equivalents at end of period $ 2,456 $ 712 $ 87
Cash (received) paid for income taxes $ 61 $ ( 166 ) $ 2,168
(1) E liminated in consolidation.
Note 1. Basis of Presentation
Tiptree Inc. (together with its consolidated subsidiaries, collectively, Tiptree, the Company, or we) is a Maryland Corporation that was incorporated on March 19, 2007. Tiptree’s common stock trades on the Nasdaq Capital Market under the symbol “TIPT”. Tiptree is a holding company that combines specialty insurance operations with investment management capabilities. We allocate our capital across our insurance operations and other investments. We classify our business into two reportable segments: Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable segments and other business activities, as Tiptree Capital.
Pursuant to the terms discussed in Note— (11) Debt, net in the notes to consolidated financial statements, a secured corporate credit agreement of a subsidiary of Tiptree restricts that subsidiary’s ability to pay or make any dividend or distribution to Tiptree Inc. In addition, certain other subsidiaries’ activities are regulated, or subject to specific restriction on transfers as a result of financing arrangements. As a result of these restrictions, these condensed financial statements of the Registrant have been prepared in accordance with Rule 12-04 of Regulation S-X, as restricted net assets of the Company's subsidiaries (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the Company's consolidated net assets as of December 31, 2021.
For the period ending December 31, 2019, the Company was a holding company without any operations of its own. On July 17, 2020, Operating Company merged into Tiptree, with Tiptree as the surviving entity (the Reorganization). In connection with the Reorganization, Operating Company contributed substantially all of its assets to Caroline Holdings LLC, a wholly owned subsidiary of Operating Company, which was renamed Tiptree Holdings LLC. Prior to the Reorganization, the Company was
allocated itemized expenses of $ 2,000 related to operating as a public company from Operating Company for the six months ended June 30, 2020.
These condensed financial statements have been prepared on a "parent-only" basis. Under a parent-only presentation, the Parent Company's investments in subsidiaries are presented under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying condensed financial information should be read in conjunction with the Tiptree Inc. consolidated financial statements and related Notes thereto.
Note 2. Dividends Received
The Company received distributions of $ 30,996 , $ 35,092 and $ 14,587 for the years ended December 31, 2021, 2020 and 2019, respectively.