What changed in this filing

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Item 1. Financial Statements

2021-05-13 compared with 2020-11-05 · 354 added, 485 removed, 460 unchanged (65% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 27, 2020 and December 29, 2019

April 4, 2021 and January 3, 2021

(In thousands)

Successor Predecessor

September 27, 2020

As of December 29, 2019

April 4, 2021

As of January 3, 2021

(Unaudited) (as restated)

Current Assets

2 unchanged sentences

130,599 118,305

Inventories, net 57,164 50,894

Inventories 67,584 59,810

Prepaid expenses and other assets 12,276 11,573

9 unchanged sentences

Total assets $ 2,567,235 $ 2,584,164

LIABILITIES AND EQUITY (DEFICIT)

LIABILITIES AND EQUITY

Current Liabilities

3 unchanged sentences

Accrued expenses and other 49,585 80,788

Current warrant liability — 52,580

Total current liabilities 129,441 200,109

Non-current portion of term debt 410,711 633,826

Non-current portion of term debt and revolving credit facility 718,443 778,000

Non-current portion of other notes payable 25,418 24,564

1 unchanged sentence

Deferred tax liability 74,847 73,786

Non-current warrant liability 104,400 85,032

Total non-current liabilities 960,591 999,153

1 unchanged sentence

Commitments and Contingencies

Equity (Deficit)

Members' equity (deficit) ( 27,446 )

Shares of Class A Common Stock (Successor), $ 0.0001 par value;

Shares of Class A Common Stock, $ 0.0001 par value;

1,000,000,000 shares authorized;

59,369,050 shares issued and outstanding at September 27, 2020

Shares of Class V Common Stock (Successor), $ 0.0001 par value;

61,249,000 shares authorized, issued and outstanding at September 27, 2020

Additional paid-in capital (Successor) 479,028

Accumulated deficit (Successor) ( 10,172 )

76,481,833 and 71,094,714 shares issued and outstanding as of April 4, 2021 and January 3, 2021, respectively.

Shares of Class V Common Stock, $ 0.0001 par value;

61,249,000 shares authorized;

60,349,000 shares issued and outstanding as of April 4, 2021 and January 3, 2021.

Additional paid-in capital 941,003 793,461

Accumulated deficit ( 264,019 ) ( 241,490 )

Accumulated other comprehensive income 1,746 924

Total stockholders' equity and members' equity (deficit) 469,120 ( 26,038 )

Total stockholders' equity 678,743 552,908

Noncontrolling interest 798,460 831,994

Total equity (deficit) 1,414,479 ( 33,352 )

Total liabilities and equity (deficit) $ 2,061,479 $ 778,547

Total equity 1,477,203 1,384,902

Total liabilities and equity $ 2,567,235 $ 2,584,164

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

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the fiscal periods ended September 27, 2020, August 28, 2020, and September 29, 2019

For the thirteen weeks ended April 4, 2021 and March 29, 2020

(In thousands, except share information)

Successor Predecessor Predecessor

August 29, 2020

September 27, 2020

June 29, 2020

August 28, 2020

For the 13 weeks ended September 29, 2019

December 30, 2019

August 28, 2020

For the 39 weeks ended

September 29, 2019

Successor Predecessor

Thirteen weeks ended April 4, 2021 Thirteen weeks ended March 29, 2020

Net sales $ 269,182 $ 228,029

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Gross profit 95,241 80,014

Selling and administrative expenses

Selling, general and administrative expenses

Selling 56,728 48,333

Administrative 8,451 25,626 10,432 64,050 33,908

Total selling and administrative expenses 25,310 59,274 50,922 195,629 147,858

General and administrative 29,933 19,940

Total selling, general and administrative expenses 86,661 68,273

Gain on sale of assets

Gain (loss) on disposal of property, plant and equipment 5 ( 14 ) 4,790 79 5,806

Gain on disposal of property, plant and equipment 297 68

Gain on sale of routes, net 422 404

Total gain on sale of assets 719 472

(Loss) income from operations ( 1,179 ) 3,117 24,882 32,781 52,549

Income from operations 9,299 12,213

Other (expense) income

Interest expense ( 10,861 ) ( 9,643 )

Other (expense) income ( 2,323 ) 432 ( 921 ) 1,271 ( 1,125 )

Other income 718 580

Loss on remeasurement of warrant liability ( 21,501 ) —

Other (expense) income, net ( 31,644 ) ( 9,063 )

(Loss) income before taxes ( 22,345 ) 3,150

Income tax (benefit) expense ( 2,889 ) 1,344 1,021 3,973 2,787

Income tax expense 1,004 1,458

Net (loss) income ( 23,349 ) 1,692

Net loss (income) attributable to noncontrolling interest 2,320 — ( 723 ) — ( 1,420 )

Net loss attributable to noncontrolling interest 820 —

Net (loss) income attributable to controlling interest $ ( 22,529 ) $ 1,692

Earnings per share of Class A Common stock:

Earnings per Class A Common stock:

Basic & diluted $ ( 0.30 )

Weighted-average shares of Class A Common stock outstanding

Basic 59,369,050

Diluted 68,271,930

Other comprehensive gain (loss):

Basic & diluted 75,927,005

Other comprehensive income (loss):

Interest rate swap $ 822 $ ( 7,208 )

Comprehensive income (loss) $ 141 $ ( 4,370 ) $ 10,512 $ ( 4,043 ) $ 9,205

Comprehensive loss $ ( 21,707 ) $ ( 5,516 )

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

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CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

For the fiscal periods ended September 27, 2020, August 28, 2020, and September 29, 2019

For the thirteen weeks ended April 4, 2021 and March 29, 2020

(In thousands, except share data)

Predecessor Members'

(Deficit) Equity Accumulated Other Comprehensive (Loss) Income Noncontrolling Interest Total (Deficit) Equity

Balance at December 30, 2018

$ ( 119,971 ) $ — $ ( 11,345 ) $ ( 131,316 )

Net (loss) income ( 1,118 ) — 1,420 302

Distributions to members and noncontrolling interest ( 3,491 ) — ( 1,339 ) ( 4,830 )

Balance at June 30, 2019

$ ( 124,580 ) $ — $ ( 11,264 ) $ ( 135,844 )

Net income $ 9,600 $ — $ 723 $ 10,323

Other comprehensive income — 912 — 912

Distributions to members and noncontrolling interest ( 5,328 ) — ( 560 ) ( 5,888 )

Balance at September 29, 2019

$ ( 120,308 ) $ 912 $ ( 11,101 ) $ ( 130,497 )

Predecessor Members' (Deficit) Equity Accumulated Other Comprehensive (Loss) Income Noncontrolling Interest Total (Deficit) Equity

Balance at December 29, 2019 $ ( 27,446 ) $ 1,408 $ ( 7,314 ) $ ( 33,352 )

$ ( 27,446 ) $ 1,408 $ ( 7,314 ) $ ( 33,352 )

Net income 1,692 — — 1,692

2 unchanged sentences

Distributions to members ( 2,657 ) — — ( 2,657 )

Balance at June 28, 2020

$ ( 31,712 ) $ ( 6,509 ) $ — $ ( 38,221 )

Net loss $ ( 4,824 ) $ — $ — $ ( 4,824 )

Other comprehensive income — 454 — 454

Distributions to members ( 1,219 ) — — ( 1,219 )

Balance at August 28, 2020

$ ( 37,755 ) $ ( 6,055 ) $ — $ ( 43,810 )

Balance at March 29, 2020 $ ( 35,725 ) $ ( 5,800 ) $ — $ ( 41,525 )

Class A Common Stock Class V Common Stock Additional Paid-in Capital Accumulated (Deficit) Accumulated Other Comprehensive Income Total Stockholders' Equity Non-controlling Interest Total Equity

Successor Shares Amount Shares Amount

Balance at August 29, 2020 57,369,050 $ 6 57,765,978 $ 6 $ 477,970 $ ( 7,093 ) $ — $ 470,889 $ 950,768 $ 1,421,657

Conversion of Restricted Sponsor Shares 2,000,000 — — — — — — — —

Conversion of Continuing Members' Retained Restricted Units — 3,483,022 — — — — — — —

Balance at January 3, 2021 (as restated) 71,094,714 $ 7 60,349,000 $ 6 $ 793,461 $ ( 241,490 ) $ 924 $ 552,908 $ 831,994 $ 1,384,902

Conversion of warrants 4,976,717 — — 144,659 — — 144,659 ( 32,714 ) 111,945

Share-based compensation 410,402 — — 2,883 — — 2,883 — 2,883

1 unchanged sentence

Other comprehensive income — — — — 822 822 — 822

Dividends declared ($0.05 per share of Class A Common Stock) — — — ( 2,968 ) — ( 2,968 ) — ( 2,968 )

Distribution to noncontrolling interest — — — — — — ( 3,089 ) ( 3,089 )

Balance at September 27, 2020 59,369,050 $ 6 61,249,000 $ 6 $ 479,028 $ ( 10,172 ) $ 252 $ 469,120 $ 945,359 $ 1,414,479

Balance at April 4, 2021 76,481,833 $ 7 60,349,000 $ 6 $ 941,003 $ ( 264,019 ) $ 1,746 $ 678,743 $ 798,460 $ 1,477,203

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS

For the fiscal periods ended September 27, 2020, August 28, 2020, and September 29, 2019

For the thirteen weeks ended April 4, 2021 and March 29, 2020

(In thousands)

Successor Predecessor Predecessor

August 29, 2020

September 27, 2020

December 30, 2019

August 28, 2020

For the 39 weeks ended September 29, 2019

Successor Predecessor

Thirteen weeks ended April 4, 2021 Thirteen weeks ended March 29, 2020

Cash flows from operating activities

Net (loss) income $ ( 23,349 ) $ 1,692

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Depreciation and amortization 19,407 8,912

Amortization of step-up of inventory 5,795 — —

Loss on remeasurement of warrant liability 21,501 —

Gain on disposal of property and equipment ( 297 ) ( 68 )

1 unchanged sentence

Stock based compensation 2,883 —

Loss on debt extinguishment 2,500 — —

Deferred taxes 1,061 975

2 unchanged sentences

Accounts receivable, net ( 11,176 ) ( 15,374 )

Inventories, net 904 ( 6,883 ) ( 951 )

Inventories ( 7,040 ) 2,676

Prepaid expenses and other assets 866 ( 618 )

Accounts payable and accrued expenses and other ( 19,487 ) ( 1,217 )

Net cash (used in) provided by operating activities ( 27,748 ) 30,627 4,085

Net cash used in operating activities ( 13,183 ) ( 2,773 )

Cash flows from investing activities

Acquisition of Utz Brands Holdings, LLC, net of cash acquired ( 185,467 ) — —

Acquisitions, net of cash acquired ( 25,189 ) ( 8,789 )

1 unchanged sentence

Purchases of intangibles ( 1,200 ) ( 650 )

Proceeds on sale of property and equipment 62 615 11,474

Proceeds from sale of property and equipment 391 152

Proceeds from sale of routes 1,450 1,159

Proceeds on the sale of IO notes — — 31,916

Proceeds from the sale of IO notes 2,295 —

Notes receivable, net ( 924 ) ( 2,780 )

Net cash (used in) provided by investing activities ( 188,501 ) ( 21,516 ) 27,247

Net cash used in investing activities ( 25,311 ) ( 14,464 )

Cash flows from financing activities

Line of credit borrowings, net 15,000 10,000

Borrowings on term debt and notes payable 720,000 2,650

Repayments on term debt and notes payable ( 783,735 ) ( 2,178 )

Payment of debt issuance cost ( 8,372 ) —

Exercised warrants 57,232 —

Dividends ( 4,261 ) —

Distributions to members — ( 2,657 )

Distribution to noncontrolling interest ( 181 ) —

Net cash used in financing activities ( 239,399 ) ( 10,451 ) ( 15,936 )

Net (decrease) increase in cash and cash equivalents ( 455,648 ) ( 1,340 ) 15,396

Net cash (used in) provided by financing activities ( 4,317 ) 7,815

Net decrease in cash and cash equivalents ( 42,811 ) ( 9,422 )

Cash and cash equivalents at beginning of period 46,831 15,053

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OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying unaudited consolidated financial statements comprise the financial statements of Utz Brands, Inc.

Basis of Presentation – The accompanying consolidated financial statements comprise the financial statements of Utz Brands, Inc.

("UBI", the "Company", or "Successor", formerly Collier Creek Holdings ("CCH")) and its wholly owned subsidiaries.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S.

Securities and Exchange Commission (the "SEC").

They do not include all information and notes required by U.S.

GAAP for annual financial statements.

The balance sheet as of December 29, 2019 has been derived from the audited combined financial statements as of and for the year ended December 29, 2019 of Utz Brands Holdings, LLC ("UBH", or the "Predecessor").

In the opinion of management, such financial information reflects all normal and recurring adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with the U.S.

They do not include all information and notes required by US GAAP for annual financial statements.

However, except as disclosed herein, there has been no material changes in the information disclosed in the Notes to Consolidated Financial Statements included in the Company’s financial statements, as amended for the year ended January 3, 2021.

The balance sheet as of January 3, 2021 has been derived from the audited combined financial statements as of and for the year ended January 3, 2021.

Operating results for the interim period are not necessarily indicative of the results that may be expected for any future period or for the full year.

The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited combined financial statements of UBH (formerly UM-U Intermediate, LLC, or "Intermediate U") and notes thereto for the year ended December 29, 2019 that was included in the definitive proxy statement that was filed with the SEC on August 7, 2020 for the Business Combination that is described below.

CCH was incorporated in the Cayman Islands on April 30, 2018 as a blank check company.

CCH was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company had not then identified.

CCH’s sponsor was Collier Creek Partners LLC, a Delaware limited liability company.

CCH’s sponsor was Collier Creek Partners LLC, a Delaware limited liability company (the "Sponsor").

On August 28, 2020, CCH domesticated into a Delaware corporation and changed its name to "Utz Brands, Inc." (the “Domestication”) and consummated the acquisition of certain limited liability company units of UBH, the parent of Utz Quality Foods, LLC (“UQF”), as a result of a new issuance by UBH and purchases from UBH’s existing equity holders pursuant to a Business Combination Agreement, dated as of June 5, 2020 (the “Business Combination Agreement”) among CCH, UBH and Series U of UM Partners, LLC (“Series U”) and Series R of UM Partners, LLC (“Series R” and together with Series U, the “Continuing Members”) (the Domestication and the transactions contemplated by the Business Combination Agreement, collectively, the “Business Combination”), following the approval at the extraordinary general meeting of the shareholders of CCH held on August 27, 2020.

The statements include the accounts of the Predecessor, prior to the Business Combination, which was determined to be consolidated UBH, which includes the accounts of its wholly-owned subsidiary, Utz Quality Foods, LLC (“UQF”).

The Noncontrolling interest represents the common limited liability company units of UBH held by the Continuing Members.

The financial statements include the accounts of the Predecessor, prior to the Business Combination, which was determined to be consolidated UBH, which includes the accounts of its wholly-owned subsidiary, Utz Quality Foods, LLC (“UQF”).

UQF is consolidated with its wholly-owned subsidiaries:

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and GH Pop Holdings, LLC, with its wholly-owned subsidiaries Good Health Natural Products, LLC (“Good Health”), Condor Snack Foods, LLC, and Snikiddy, LLC (“Snikiddy”).

SRS Leasing LLC and its subsidiaries (“SRS”) were companies formed to acquire, hold and lease real estate to UQF.

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation of Variable Interest Entities, UQF was determined to be the primary beneficiary of SRS, an entity under common ownership.

The accounts of SRS have been consolidated with those of UQF as of and for the fiscal year ended December 29, 2019.

On December 30, 2019, the first day of the fiscal year of 2020, SRS were merged into UQF, with UQF surviving the transaction.

The accumulated (deficit) equity of SRS was presented on the noncontrolling interest line of the consolidated balance sheet as of December 29, 2019 and was moved to members’ (deficit) equity on December 30, 2019, the date of the merger.

Rice Investments, L.P.

(“RILP”) was formed as a limited partnership pursuant to the Delaware Revised Uniform Limited Partnership Act on January 30, 2004 for the purpose of acquiring, owning, managing, and selling or otherwise disposing of intellectual property (namely trade names) that are used by UQF.

RILP had one general partner, UQF, and one limited partner, UM-R Intermediate, LLC (“Intermediate R”).

UQF, in accordance with ASC 810, was determined to be the primary beneficiary of RILP, an entity under common ownership.

The accounts of RILP have been consolidated with those of UQF as of and for the fiscal year ended December 29, 2019.

On December 30, 2019 Intermediate R was merged into Intermediate U with Intermediate U surviving the transaction.

Finally, and immediately following that merger, RILP merged into UQF, with UQF being the surviving entity and Intermediate U remaining the sole member of UQF.

Prior to these mergers the statements of SRS, RILP, and Intermediate R were combined within the statements of Intermediate U.

On March 18, 2020, Intermediate U changed its name to Utz Brands Holdings, LLC upon filing a Certificate of Amendment with the Secretary of State of the State of Delaware.

All intercompany transactions and balances have been eliminated in combination/consolidation.

Operating Entities Holding Entities

Utz Quality Foods, LLC Utz Brands, Inc.

UTZTRAN, LLC Utz Brands Holdings, LLC

Golden Flake Snack Foods, Inc.

GH Pop Holdings, LLC

Inventure Foods, Inc.

and its subsidiaries Heron Holding Corporation

Kennedy Endeavors, LLC

Good Health Natural Products, LLC

Condor Snack Foods, LLC

Snikiddy, LLC

Kitchen Cooked, Inc.

All intercompany transactions and balances have been eliminated in consolidation.

Restatement of Previously Issued Condensed Consolidated Financial Statements – The notes included herein should be read in conjunction with the Company's restated audited consolidated financial statements included in the Company's Annual Report on Form 10-K/A filed with the SEC on May 13, 2021 (the "2020 Form 10-K/A").

As previously disclosed in our 2020 Form 10-K/A as filed on May 13, 2021, we restated the Company’s previously issued consolidated financial statements as of and for the fiscal year ended January 3, 2021, as well as the fiscal quarter ended September 27, 2020 to make the necessary accounting corrections related to warrant accounting.

We have also restated related amounts within the accompanying footnotes to the condensed consolidated financial statements.

Since the Warrants were not part of the Predecessor, and therefore no warrant liability or expense due to the remeasurement of the warrant liability is shown in such periods, we have not restated herein our condensed consolidated financial statements as of and for the fiscal quarter ended March 29, 2020.

Emerging Growth Company – The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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The Company has steadily expanded its distribution channels to where it now sells products to supermarkets, mass merchants, club stores, dollar and discount stores, convenience stores, independent grocery stores, drug stores, food service, vending, military, and other channels in most regions of the United States through routes to market that include direct-store-delivery, direct to warehouse, and third-party distributors.

With the acquisition of Golden Flake in September 2016, Inventure Foods in December 2017 and Kennedy in October 2019, the Company expanded its national production and distribution capabilities.

The Company manufactures and distributes a full line of high-quality salty snack items, such as potato chips, pretzels, cheese balls, pork skins, party mixes, tortilla chips, and popcorn.

The Company also sell dips, crackers, dried meat products and other snack food items packaged by other manufacturers.

The Company manufactures and distributes a full line of high-quality salty snack items, such as potato chips, tortilla chips, pretzels, cheese balls, pork skins, party mixes, and popcorn.

The Company also sells dips, crackers, dried meat products and other snack food items packaged by other manufacturers.

Cash and Cash Equivalents – The Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents.

The majority of the Company’s cash is held in financial institutions with insurance provided by the Federal Deposit Insurance Corporation (“FDIC”) of $250,000 per depositor.

At various times, account balances may exceed federally insured limits.

Accounts Receivables – Accounts receivable are reported at net realizable value.

The net realizable value is based on management’s estimate of the amount of receivables that will be collected based on analysis of historical data and trends, as well as review of significant customer accounts.

Accounts receivable are considered to be past due when payments are not received within the customer’s credit terms.

Accounts are written off when management determines the account is uncollectible.

Finance charges are not usually assessed on past-due accounts.

Inventories – Inventories are stated at the lower of cost (first-in, first-out) or net realizable value.

Inventory write-downs are recorded for shrinkage, damaged, stale and slow-moving items.

Property, Plant and Equipmen t – Property, plant and equipment are stated at cost net of accumulated depreciation.

Major additions and betterments are recorded to the asset accounts, while maintenance and repairs, which do not improve or extend the lives of the assets, are charged to expense accounts as incurred.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations in the disposal period.

Depreciation is determined utilizing the straight-line method over the estimated useful lives of the various assets, which generally range from 2 to 20 years for machinery and equipment, 3 to 10 years for transportation equipment and 8 to 40 years for buildings.

Assets held for sale are reported at the lower of the carrying amount or fair value less costs to sell.

The Company assesses for impairment on property, plant and equipment upon the occurrence of a triggering event.

Income Taxes – The Company accounts for income taxes pursuant to the asset and liability method of ASC 740, Income Taxes, which requires it to recognize current tax liabilities or receivables for the amount of taxes it estimates are payable or refundable for the current year, and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards.

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The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling and administrative expenses.

As of September 27, 2020 and December 29, 2019, no liability for unrecognized tax benefits was required to be reported.

As of April 4, 2021 and January 3, 2021, no liability for unrecognized tax benefits was required to be reported.

The Company does not expect any significant changes in its unrecognized tax benefits in the next fiscal year.

Distribution Route Acquisition and Sale Transactions – The Company acquires and sells distribution routes as a part of the Company’s maintenance of its direct-store delivery (“DSD”) network.

As new independent operators (“IOs”) are identified, the Company either sells its newly-created or existing Company-managed routes to the IOs or sells routes that were previously acquired by the Company to the IOs.

Gain/loss from the sale of a distribution route is recorded upon the completion of the sale transaction, and is calculated based on the difference between the sale price of the distribution route and the asset carrying value of the distribution route as of the date of sale.

The Company records intangible assets for distribution routes that it purchases based on the payment that the Company makes to acquire the route, and records the purchased distribution routes as indefinite-lived intangible assets under FASB ASC 350, Intangibles – Goodwill and Other.

The indefinite lived intangible assets are subject to annual impairment testing.

Goodwill and Other Identifiable Intangible Assets – The Company allocates the cost of acquired companies to the identifiable tangible and intangible assets acquired and liabilities assumed, with the remaining amount classified as goodwill.

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Further, changes in business strategy and/or market conditions may significantly impact these judgments and thereby impact the fair value of these assets, which could result in an impairment of the goodwill or intangible assets.

Finite-lived intangible assets consist of distribution/customer relationships, technology and trademarks.

Finite-lived intangible assets consist of distribution/customer relationships, technology, certain master distribution rights and certain trademarks.

These assets are being amortized over their estimated useful lives.

Finite-lived intangible assets are tested for impairment only when management has determined that potential impairment indicators are present.

Goodwill and other indefinite-lived intangible assets (including certain trade names, master distribution rights and company-owned sales routes) are not amortized but are tested for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred.

Goodwill and other indefinite-lived intangible assets (including certain trade names, certain master distribution rights and company-owned sales routes) are not amortized but are tested for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred.

The Company tests goodwill for impairment at the reporting unit level.

The Company has identified the existing snack food operations as its sole reporting unit.

As the Company has early adopted the FASB Accounting Standards Updated (“ASU”) No.

As the Company has early adopted the FASB Accounting Standards Update (“ASU”) No.

2017-04, Intangibles - Goodwill and Other (“Topic 350”):

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2017-04, Topic 350, also permits an entity to first assess qualitative factors to determine whether it is necessary to perform quantitative impairment tests for goodwill and indefinite-lived intangibles.

If an entity believes, as a result of each qualitative assessment, it is more likely than not that goodwill or an indefinite-lived intangible asset is not impaired, a quantitative impairment test is not required.

Share-Based Compensation – Share-based compensation is rewarded to employees and directors of the Company and accounted for in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”).

Share-based compensation expense is recognized for equity awards over the vesting period based on their grant-date fair value.

During the Successor period, the Company uses various forms of long-term incentives including, but not limited to, Stock Options, Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”), provided that the exercise of such stock options was contingent upon the Company filing a Registration Statement on Form S-8 ("Form S-8") with the SEC and the issuance of the RSUs and PSUs was contingent upon the Company filing a Form S-8 with the SEC, which occurred on November 2, 2020.

The fair value of stock options is estimated at the date of grant using the Black-Scholes valuation model.

The exercise price of each stock option equals or exceeds the estimated fair value of the Company’s stock price on the date of grant.

Stock options can generally be exercised over a maximum term of ten years.

The grant date fair value of the PSUs is determined using the Monte Carlo simulation model.

The grant date fair value of the RSUs is determined using the Company’s share price on the grant date.

Share-based compensation expense is included within the same financial statement caption where the recipient’s other compensation is reported.

The Company accounts for forfeitures as they occur.

If an entity believes, as a result of each qualitative assessment, it is more likely than not that the fair value of goodwill or an indefinite-lived intangible asset exceeds its carrying value then a quantitative impairment test is not required.

For the latest qualitative analysis performed, which took place on the first day of the fourth quarter of 2020, we had taken into consideration all the events and circumstances listed in FASB ASC 350, Intangibles—Goodwill and Other, in addition to other entity-specific factors that had taken place from the period of the business combination, which assessed goodwill, on August 28, 2020.

We have determined that there was no significant impact that affected the fair value of the reporting unit through April 4, 2021.

Therefore, we have determined that it was not necessary to perform a quantitative goodwill impairment test for the reporting unit.

Fair Value of Financial Instruments – Financial instruments held by the Company include cash and cash equivalents, accounts receivable, hedging instruments, purchase commitments on commodities, accounts payable and debt.

The carrying value of all cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to their short-term nature.

The carrying value of the debt is also estimated to approximate its fair value based upon current market conditions and interest rates.

The fair value of the hedging instruments are revalued at each reporting period.

Revenue Recognition – The Company’s revenues primarily consist of the sale of salty snack items to customers, including supermarkets, mass merchants, club stores, dollar and discount stores, convenience stores, independent grocery stores, drug stores, food service, vending, military, and other channels.

13 unchanged sentences

These estimates are made using various techniques including historical data on performance of similar promotional programs.

The Company has reserves in place of $ 18.0 million as of September 27, 2020 and $ 16.4 million as of December 29, 2019.

The Company has reserves in place of $ 26.0 million as of April 4, 2021 and $ 17.6 million as of January 3, 2021.

Differences between estimated expense and actual redemptions are recognized as a change in management estimate as actual redemptions are incurred.

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Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.

Use of Estimates – Management uses estimates and assumptions in preparing the consolidated financial statements in accordance with U.S.

Use of Estimates – Management uses estimates and assumptions in preparing the consolidated financial statements in accordance with US GAAP.

Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.

Examples include sales and promotional allowances, customer returns, allowances for doubtful accounts, inventory valuations, useful lives of fixed assets and related impairment, long-term investments, hedge transactions, goodwill and intangible asset valuations and impairments, incentive compensation, income taxes, self-insurance, contingencies and litigation.

Some examples, but not a comprehensive list, include sales and promotional allowances, customer returns, allowances for doubtful accounts, inventory valuations, useful lives of fixed assets and related impairment, long-term investments, hedge transactions, goodwill and intangible asset valuations and impairments, incentive compensation, income taxes, self-insurance, contingencies, litigation, and inputs used to calculate deferred tax liabilities, tax valuation allowances, tax receivable agreements, and warrant liabilities related to the private placement warrants further described in Note 16 "Warrants".

Actual results could vary materially from the estimates that were used.

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2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

Simplifying the Accounting for Income Taxes" ("Topic 740").

This ASU is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities.

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The amendments of this ASU should be applied on a prospective basis.

The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-15, Intangibles-Goodwill and Other-Internal-Use Software (“Subtopic350-40”):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

For non-public business entities or emerging growth companies, this ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted.

The Company adopted Subtopic 350-40 on the first day of fiscal 2020, and the adoption of this standard did not have a material impact on the consolidated financial statements.

The adoptions of ASU No.

2020-04 did not have a material impact to the Company.

Utz Brands Holdings, LLC

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At the closing of the Business Combination (the "Closing") on August 28, 2020 (the "Closing Date"), the Company domesticated into a Delaware corporation and changed its name to "Utz Brands, Inc." At the Closing, the Company (i) acquired certain common and preferred interests of the Continuing Members from third party members (“UPA Seller”), and the Continuing Members then redeemed such common and preferred interests for, and the Company received, an equivalent value of common limited liability company units of UBH, (ii) contributed cash in exchange for additional common limited liability company units of UBH, and (iii) purchased additional common limited liability company units and 100% of the managing interests of UBH from the Continuing Members.

As part of the Business Combination, the Continuing Members (a) received certain cash considerations for the common limited liability company units that they sold to the Company, (b) received such number of shares of newly issued non-economic Class V Common Stock in the Company equal to the common limited liability company units that the Continuing Members retained in UBH, and a unit of limited liability company units of UBH and a share of Class V Common Stock are exchangeable for one share of Class A Common Stock of the Company, (c) received certain restricted common limited liability company units in UBH (the "Retained Restricted Units") that would be vested under certain market conditions, which were vested as of the Closing, and (d) entered into a Tax Receivable Agreement (“TRA”) that requires the Company to pay to the Continuing Members 85% of the applicable cash savings, if any, in U.S.

As part of the Business Combination, the Continuing Members (a) received certain cash considerations for the common limited liability company units that they sold to the Company, (b) received such number of shares of newly issued non-economic Class V Common Stock in the Company equal to the common limited liability company units that the Continuing Members retained in UBH, and a unit of limited liability company units of UBH and a share of Class V Common Stock are exchangeable for one share of Class A Common Stock of the Company, (c) were entitled to receive certain restricted common limited liability company units in UBH (the "Retained Restricted Units") that would be vested under certain market conditions, which vested as of the Closing, and (d) entered into a Tax Receivable Agreement (“TRA”) that requires the Company to pay to the Continuing Members 85% of the applicable cash savings, if any, in U.S.

federal and state income tax determined based on certain attributes as defined in the TRA.

In connection with the Closing, UBH and the Company converted all of the outstanding phantom unit awards issued under the Utz Quality Foods, LLC 2018 Long-Term Incentive Plan ("2018 LTIP") into restricted stock units (“2020 LTIP RSUs”) issued by the Company under the Utz Quality Foods, LLC 2020 Long-Term Incentive Plan (the "2020 LTIP").

Refer to later part of this footnote for further discussion of the purchase consideration of the Business Combination.

Further discussion of the purchase consideration of the Business Combination is disclosed later in this footnote.

The Company was determined to be the accounting acquirer and UBH was determined to be the accounting acquiree, in accordance with ASC 810, as the Company is considered to be the primary beneficiary of UBH after the Business Combination.

Under the ASC 805, Business Combinations, acquisition method of accounting, purchase price allocation of assets acquired and liabilities assumed of UBH are presented based on their estimated fair values as of the Closing.

In accordance with the ASC 805, Business Combinations, acquisition method of accounting, the purchase price allocation of assets acquired and liabilities assumed of UBH are presented based on their estimated fair values as of the Closing.

ASC 805 establishes a measurement period to provide the Company with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date.

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Compensation expenses will be recorded evenly during the post-combination requisite service period through the end of fiscal 2021, which is the cliff vest date of the replacement awards.

Refer to Note 11.

"Share Based Compensation" for additional information on the 2020 LTIP RSUs.

(3) A total of 3,483,022 common limited liability company units that were initially subject to certain restrictions (the "Retained Restricted Units") in UBH were received by the Continuing Members at the Closing.

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Technology 43 5

Master distribution rights 4,677 Indefinite

Master distribution rights 2,221 15

Company owned routes 13,886 Indefinite

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A portion of the goodwill recognized is expected to be deductible for income tax purposes.

As of September 27, 2020, the purchase price allocation has not been finalized.

The predecessor financial statements of UBH include $ 18.0 million and $ 25.0 million of transaction costs from June 28, 2020 to August 28, 2020 and December 30, 2019 to August 28, 2020, respectively.

These transaction costs are recorded within administrative expenses within the consolidated statements of operations and comprehensive income.

Prior to the Closing Date, CCH incurred $ 13.4 million of transaction costs related to the Business Combination, which are not reported in the predecessor consolidated statements of operations and comprehensive income as CCH is not the predecessor.

The following unaudited pro forma financial information presents the results of operations as if the Business Combination had occurred on January 1, 2019.

These unaudited pro forma results may not necessarily reflect the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.

The unaudited pro forma information reflects the step-up depreciation and amortization adjustments for the fair value of the assets acquired, the adjustment in interest expense due to the reduction in long term debt as a result of the Business Combination, and the related adjustment to the income tax provision.

In addition, the pro forma net income is not adjusted to exclude transaction expenses and other non-recurring costs.

For the 13 weeks ended September 27, 2020 For the 13 weeks ended September 29, 2019 For the 39 weeks ended September 27, 2020 For the 39 weeks ended September 29, 2019

(in thousands) (unaudited) (unaudited) (unaudited) (unaudited)

Pro forma net sales $ 248,028 $ 231,341 $ 718,034 $ 653,311

Pro forma net (loss) income ( 9,382 ) 5,993 ( 5,880 ) ( 62 )

Pro forma net (loss) income attributable to controlling interest ( 3,481 ) 2,536 ( 1,210 ) 43

Pro forma net (loss) income attributable to noncontrolling interest ( 5,901 ) 3,457 ( 4,670 ) ( 105 )

Kitchen Cooked

On November 19, 2019 UBH entered into a stock purchase agreement to acquire all of the outstanding shares of common stock of Kitchen Cooked, an Illinois corporation.

UBH acquired Kitchen Cooked to expand its distribution and production capacity in Illinois and the surrounding area.

UBH closed the acquisition of Kitchen Cooked on December 30, 2019.

At the closing, UBH made a cash payment of $ 6.9 million and recorded $ 2.0 million in deferred payment obligations for the acquisition of the outstanding shares of Kitchen Cooked as well as certain real estate supporting its operations.

The $ 2.0 million in deferred payments are payable in installments of $ 1.0 million each on the first two anniversaries following the closing, with $ 1.0 million payable within fiscal year 2020 and $ 1.0 million payable within fiscal year 2021.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the Kitchen Cooked acquisition date:

As of April, 4, 2021, the purchase price allocation has not been finalized.

On November 2, 2020, the Company, through its subsidiary, UQF, acquired certain assets of the H.K.

Anderson business ("HKA Acquisition"), a leading brand of peanut butter-filled pretzels, from subsidiaries of Conagra Brands, Inc.

for approximately $ 8.0 million.

The acquisition, which includes certain intangible assets, is intended to broaden the Company's product offering to include peanut butter filled pretzels.

The provisional fair values to which the purchase price was allocated were $ 1.8 million to trademarks, $ 2.7 million to customer relationships, and $ 3.5 million to goodwill.

The trademarks and customer relationships are being amortized over a period of 15 years.

As of April 4, 2021, the purchase price allocation has not been finalized.

We expect to finalize the valuation report and complete the purchase price allocation no later than one-year from the acquisition date.

Truco Holdco Inc.

Acquisition and OTB Brand Purchase

On November 11, 2020, the Company caused its subsidiaries, UQF and Heron, to enter into a Stock Purchase Agreement among UQF, Heron, Truco Holdco Inc.

(“Truco”) and Truco Holdings LLC ("Truco Seller").

On December 14, 2020, pursuant to the Stock Purchase Agreement, the Company caused its subsidiary, Heron, to purchase and acquire from Truco Holdings LLC all of the issued and outstanding shares of common stock of Truco (the "Truco Acquisition").

Upon completion of the Truco Acquisition, Truco became a wholly owned subsidiary of Heron.

At the closing of the Truco Acquisition, the Company paid the aggregate cash purchase price of approximately $ 404.0 million to Truco Holdings LLC, including payments of approximately $ 3.0 million for cash on hand at Truco at the closing of the Truco Acquisition, less estimated working capital adjustments, subject to customary post-closing adjustments.

In addition, on December 14, 2020, UQF purchased and acquired from OTB Acquisition, LLC certain intellectual property ("OTB IP") assets (the "IP Purchase") pursuant to an Asset Purchase Agreement, dated November 11, 2020, among UQF, Truco Holdings LLC and OTB Acquisition LLC.

The IP Purchase was determined to be an asset acquisition under the provisions of ASC Subtopic 805-50.

The IP Purchase is accounted for separately from the Truco Acquisition, as Truco and the OTB IP were acquired from two different selling parties that were not under common control and the two acquisitions are separate transactions.

The OTB IP was initially recognized and measured by the Company based on its purchase price of $ 79.0 million since it was acquired in an asset purchase and is treated as an indefinite lived intangible asset.

For the Truco Acquisition, the Company was determined to be the accounting acquirer and Truco was determined to be the accounting acquiree, in accordance with ASC 805.

In accordance with the ASC 805 acquisition method of accounting, the purchase price allocation of assets acquired and liabilities assumed of Truco are presented based on their estimated fair values as of the closing date of the acquisition.

The following table summarizes the provisional fair values of the assets acquired and liabilities assumed by the Company at the date of the acquisition:

(in thousands)

Purchase consideration $ 403,963

Tax consideration (1)

Total consideration 408,431

Assets acquired:

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Prepaid expenses and other assets 5,090

Income tax prepayments 212

Property, plant and equipment 461

Other assets 1,219

Trademarks 1,623

Customer relationships (2)

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Accrued expenses 4,492

Other liabilities 26

Deferred tax liability 50,855

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Net identifiable assets acquired 194,744

Goodwill $ 4,060

As of September 27, 2020, the purchase price allocation has not been finalized.

The Company has determined that all the acquired customer relationships and trademarks will be amortized over a period of 15 years on a straight-line basis commensurate with the acquisition date expectations for the economics that are to be provided by the trademarks and customer relationships.

The goodwill of $ 4.1 million arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations and intangible assets that do not qualify for separate recognition.

None of the goodwill recognized is expected to be deductible for income tax purposes.

The following unaudited pro forma financial information presents the results of operations for the thirteen weeks and thirty-nine weeks ended September 29, 2019, as if the acquisition of Kitchen Cooked had occurred on December 31, 2018, the beginning of fiscal year 2019.

These unaudited pro forma results may not necessarily reflect the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.

13 weeks ended 39 weeks ended

September 29, 2019 September 29, 2019

(in thousands) (unaudited)

Pro forma net sales $ 2,224 $ 6,314

Pro forma net income (loss) 22 ( 25 )

There were no material adjustments to the pro forma results.

(1) The Stock Purchase Agreement provided that Truco Holdings LLC is entitled to receive any tax refunds received by the Company after the closing date for any pre-closing date tax period of Truco.

The Company estimated an income tax refund receivable in the amount of $ 4.5 million related to the pre-acquisition tax periods, which was reflected on the Company's consolidated balance sheet as of January 3, 2021.

The Company recorded a corresponding payable of $ 4.5 million to Truco Holdings LLC.

(2) The identifiable intangible assets represent the existing customer relationships of Truco that were valued using a discounted cash flow model using projected sales growth, attrition and a useful life of 15 years.

Truco’s provisional customer relationship fair value is $ 225.0 million.

The Company has determined that all the acquired customer relationships will be amortized over a period of 15 years on a straight-line basis commensurate with the acquisition date expectations for the economics that are to be provided by the customer relationships.

(3) The goodwill of $ 213.7 million represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable intangible assets acquired and liabilities assumed.

Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill.

Intangible assets not recognized apart from goodwill consist primarily of the strong market position and the assembled workforce of Truco.

As of January 3, 2021, the purchase price allocation has not been finalized.

We expect to finalize the valuation report and complete the purchase price allocation no later than one-year from the acquisition date.

The Company incurred $ 5.6 million of transaction costs directly related to the acquisition.

These transaction costs are recorded within administrative expenses within the consolidated statements of operations and comprehensive income (loss).

Truco contributed revenues of $ 44.3 million and net income of $ 4.7 million in the consolidated statement of operations and comprehensive income (loss) for the for the first fiscal quarter of 2021.

On January 11, 2021, the Company announced that its subsidiary, UQF entered into a definitive agreement with Snak-King Corp.

to acquire certain assets of the C.J.

Vitner business ("Vitner's acquisition" or "acquisition of Vitner's"), a leading brand of salty snacks in the Chicago, IL area.

The Company closed this transaction on February 8, 2021 and the purchase price of approximately $ 25 million was funded from current cash-on-hand.

The provisional fair values to which the purchase price was allocated were $ 2.9 million to trademarks, $ 0.8 million to customer relationships, $ 1.7 million to DSD routes, and $ 17.8 million to goodwill.

The trademarks and customer relationships are being amortized over a period of 15 years.

As of April 4, 2021, the purchase price allocation has not been finalized.

We expect to finalize the valuation report and complete the purchase price allocation no later than one-year from the acquisition date.

Inventories consisted of the following:

Successor Predecessor

(in thousands) As of

September 27, 2020

As of December 29, 2019

April 4, 2021

As of January 3, 2021

Finished goods $ 33,981 $ 28,935

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Maintenance parts 6,059 5,746

57,164 51,144

inventory reserve — ( 250 )

Total inventories $ 67,584 $ 59,810

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Property, plant and equipment, net, consisted of the following:

Successor Predecessor

(in thousands) As of

September 27, 2020

As of December 29, 2019

April 4, 2021

As of January 3, 2021

Land $ 22,674 $ 22,750

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Property, plant and equipment, net $ 262,999 $ 270,416

Depreciation expense was $ 3.8 million for the Successor period from August 29, 2020 to September 27, 2020, $ 4.8 million for the Predecessor period from June 29, 2020 to August 28, 2020, and was $ 5.5 million for the 13 week period ended September 29, 2019.

Depreciation expenses for the Predecessor period from December 30, 2019 to August 28, 2020 was $ 19.0 million and $ 16.5 million for the 39 weeks ended September 29, 2019.

Depreciation expense was $ 9.9 million and $ 7.0 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.

Depreciation expense is classified in cost of goods sold, selling expenses, and administrative expenses on the consolidated statements of operations and comprehensive income (loss).

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(in thousands)

Balance as of December 29, 2019 $ 202,407

Acquisition of Kitchen Cooked 4,060

Kennedy acquisition adjustment 989

June 28, 2020 207,456

August 28, 2020 $ 207,456

(in thousands)

Balance as of August 29, 2020

September 27, 2020

For the first fiscal quarter 2020, the change to goodwill was attributable to the acquisition of Kitchen Cooked and a measurement period adjustment to the Kennedy opening balance sheet.

For the second fiscal quarter 2020, the change to goodwill was attributable to a measurement period adjustment to the Kitchen Cooked opening balance sheet.

For the successor period, the balance of goodwill was attributable to the business combination with CCH as described in the "Note 1 Operations and Summary of Significant Accounting Policies" and "Note 2 Acquisitions".

Balance as of Balance as of January 3, 2021 $ 862,183

Acquisition of Vitner's 17,880

Balance as of April 4, 2021 $ 880,063

For the first fiscal quarter of 2021, the change to goodwill was attributable to the acquisition of Vitner's.

Intangible assets, net, consisted of the following:

Successor Predecessor

(in thousands) As of

September 27, 2020

As of December 29, 2019

April 4, 2021

As of January 3, 2021

Subject to amortization:

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Trade names 60,750 57,810

Unfavorable lease — ( 85 )

Master distribution rights 2,221 2,221

Amortizable assets, gross 734,954 731,224

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Trade names 434,513 434,513

Master distribution rights 4,677 4,677

Company owned routes 15,540 14,240

Intangible assets, net $ 1,167,268 $ 1,171,709

Amortizable trademark intangible assets increased by $ 1.6 million and distributor/customer relationships increased by $ 2.1 million during the first quarter of fiscal 2020 due to the acquisition of Kitchen Cooked.

Trade names increased by $ 0.7 million due to the purchase of the rights for certain intellectual property.

For the successor period, the balance of the intangible assets were recorded at fair value and the historical accumulated amortization was recognized as a result of the business combination with CCH as described in the Note 1 " Operations and summary of significant accounting policies" and Note 2 "Acquisitions".

These changes resulted in additional amortization of $ 1.1 million in the successor period from August 29, 2020 to September 27, 2020.

There were no other changes to intangible assets during the thirteen weeks ended September 27, 2020 other than that which arises from the regular buying and selling of Company owned routes and amortization.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 1.8 million for the Successor period from August 29, 2020 to September 27, 2020, $ 1.3 million for the Predecessor period from June 29, 2020 to August 28, 2020, and was $ 1.4 million for the 13 week period ended September 29, 2019.

Amortization expenses for the Predecessor period from December 30, 2019 to August 28, 2020 was $ 5.1 million, and $ 4.1 million for the 39 weeks ended September 29, 2019.

Amortizable trademark intangible assets increased by $ 2.9 million and distributor/customer relationships increased by $ 0.8 million during the first quarter of fiscal 2021 due to the acquisition of Vitner's.

Company owned routes increased by $ 1.7 million related to routes acquired in the acquisition of Vitner's and $ 1.2 million related to the purchase of certain distribution rights in the Central Florida region from an existing third party distributor.

There were no other changes to intangible assets during the thirteen weeks ended April 4, 2021 other than those which arise from the normal course of business of buying and selling of Company owned routes and amortization.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 9.5 million and $ 1.9 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.

Amortization expense is classified in administrative expenses on the consolidated statements of operations and comprehensive income (loss).

Estimated future amortization expense is as follows:

(in thousands) As of September 27, 2020

2020 (Q4) $ 5,311

Thereafter 371,499

Total $ 480,775

NOTES RECEIVABLE

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The notes bear interest at rates ranging from 0.00 % to 8.55 % with terms ranging generally from one to ten years .

The notes receivable balances due from IOs at September 27, 2020 and December 29, 2019 totaled $ 28.2 million and $ 34.0 million, respectively, and are collateralized by the routes for which the loans are made.

Of the balance at September 27, 2020 and December 29, 2019, $ 25.6 million and $ 33.7 million, respectively relates to corresponding notes payable, as discussed in further detail within “Note 8.

The notes receivable balances due from IOs at April 4, 2021 and January 3, 2021 totaled $ 27.9 million and $ 27.1 million, respectively, and are collateralized by the routes for which the loans are made.

Of the balance at April 4, 2021 and January 3, 2021, $ 23.6 million and $ 23.1 million, respectively relates to corresponding notes payable, as discussed in further detail within Note 8.

"Long-Term Debt".

Other notes receivable totaled $ 0.8 million and $ 1.4 million as of September 27, 2020 and December 29, 2019, respectively.

Other notes receivable totaled $ 0.4 million and $ 0.6 million as of April 4, 2021 and January 3, 2021, respectively.

ACCRUED EXPENSES AND OTHER

Accrued expenses and other consisted of the following:

Successor Predecessor

(in thousands) As of September 27, 2020 As of December 29, 2019

(in thousands) As of April 4, 2021 As of January 3, 2021

Accrued compensation and benefits $ 17,789 $ 36,968

Insurance liabilities 7,541 7,880

Accrued distributions 6,031 —

Accrued freight and manufacturing related costs 7,013 6,972

Insurance liabilities 7,256 8,100

Short term interest rate hedge liability 3,009 3,048

Accrued interest 576 1,220

Accrued business combination transaction fees 1,683 —

Accrued sales tax 1,300 1,300

Truco acquisition tax consideration 4,468 4,468

Accrued distributions — 4,261

Other accrued expenses 8,174 14,451

Total accrued expenses and other $ 49,585 $ 80,788

As of September 27, 2020, the long term accrued expenses and other primarily consists of $ 51.4 million related to the TRA, described in "Note 2 Acquisitions", $ 6.4 million related to supplemental retirement and salary continuation plans, $ 2.8 million related the long term portion of an interest rate hedge liability and $ 0.1 million of other long term accrued.

As of December 29, 2019, the long term accrued expenses and other primarily consists of $ 14.4 million related to the 2018 LTIP, $ 5.2 million related to supplemental retirement and salary continuation plans.

As of April 4, 2021, the long term accrued expenses and other primarily consists of $ 28.7 million related to the TRA, described in Note 2.

"Acquisitions", $ 7.1 million related to supplemental retirement and salary continuation plans, $ 1.3 million related the long term portion of an interest rate hedge liability and $ 0.4 million of other long term accrued.

As of January 3, 2021, the long term accrued expenses and other primarily consists of $ 28.7 million related to the TRA, described in Note 2.

"Acquisitions", $ 6.9 million related to supplemental retirement and salary continuation plans, $ 2.1 million related the long term portion of an interest rate hedge liability and $ 0.1 million of other long term accrued expenses.

LONG-TERM DEBT

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On April 1, 2020, the ABL facility was amended to increase the credit limit up to $ 116.0 million and to extend the maturity through August 22, 2024.

No amounts were outstanding under this facility as of September 27, 2020 or December 29, 2019.

On December 18, 2020 the ABL facility was amended to increase the credit limit up to $ 161.0 million and as of April 4, 2021, the outstanding balance of the ABL facility was $ 15.0 million.

No amounts were outstanding under this facility as of January 3, 2021.

Availability under the ABL facility is based on a monthly accounts receivable and inventory borrowing base certification, which is net of outstanding letters of credit.

As of September 27, 2020 and December 29, 2019, $ 101.8 million and $ 83.0 million, respectively, was available for borrowing, net of letters of credit.

As of April 4, 2021 and January 3, 2021, $ 93.4 million and $ 106.4 million, respectively, was available for borrowing, net of letters of credit.

The facility bears interest at an annual rate based on LIBOR plus an applicable margin of 1.50 % (ranging from 1.50 % to 2.00 % based on availability) or the prime rate plus an applicable margin of 0.50 % (ranging from 0.50 % to 1.00 %).

Under the Prime rate, had there been outstanding balances, the interest rate on the facility as of September 27, 2020 and September 29, 2019 would have been 3.75 % and 5.50 %, respectively.

Had there been outstanding balances and the Company elected to use the LIBOR rate, the interest rate on the ABL facility as of September 27, 2020 and September 29, 2019 would have been 1.68 % and 3.48 %, respectively.

The ABL facility is also subject to unused line fees ( 0.5 % at September 27, 2020) and other fees and expenses.

The Company incurred interest expense of $ 0.1 million for the Successor period from August 29, 2020 to September 27, 2020, $ 0.1 million for the Predecessor period from June 29, 2020 to August 28, 2020, and was $ 0.4 million for the 13 week period ended September 29, 2019.

The Company incurred interest expense of $ 0.5 million for the Predecessor period from December 30, 2019 to August 28, 2020 and $ 0.9 million for the 39 weeks ended September 29, 2019.

Standby letters of credit in the amount of $ 14.1 million have been issued as of September 27, 2020 and December 29, 2019.

Had the Company elected to use the Prime rate, the interest rate on the facility as of April 4, 2021 and March 29, 2020, would have been 3.75 % and 3.75 %, respectively.

The Company elected to use the LIBOR rate, the interest rate on the ABL facility as of April 4, 2021 was 1.61 %.

The Company elected to use the LIBOR rate as of March 29, 2020 and the interest rate was 2.36 %.

The ABL facility is also subject to unused line fees ( 0.5 % at April 4, 2021) and other fees and expenses.

Standby letters of credit in the amount of $ 14.1 million have been issued as of April 4, 2021 and January 3, 2021.

The standby letters of credit are primarily issued for insurance purposes.

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The First Lien Term Loan requires quarterly principal payments of $ 1.3 million beginning March 2018, with a balloon payment due for any remaining balance on the seventh anniversary of closing, or November 21, 2024.

On August 28, 2020, as part of the Business Combination (as described in Note 1 " Operations and Summary of Significant Accounting Policies" and Note 2 "Acquisitions") an advance payment of principal was made on the First Lien Term Loan of $ 111.6 million, as such no principal payments are due until November 21, 2024.

On August 28, 2020, as part of the Business Combination (as described in Note 1.

" Operations and Summary of Significant Accounting Policies" and Note 2.

"Acquisitions") an advance payment of principal was made on the First Lien Term Loan of $ 111.6 million.

The First Lien Term Loan bears interest at an annual rate based on either LIBOR plus an applicable margin of 3.50 %, or prime rate plus an applicable margin of 2.50 %.

The interest rate on the First Lien Term Loan as of September 27, 2020 and September 29, 2019 was 3.70 % and 5.60 %, respectively.

The interest rate on the First Lien Term Loan as of March 29, 2020 was 5.10 %.

In connection with Amendment No.

2 to the Credit Agreement, dated November 21, 2017 with Bank of America, N.A., as further described within this note, the outstanding balance of $ 410 million was repaid in full the interest rate on this instrument was 3.64 % at the time of payoff.

The Company incurred closing and other costs associated with the Term Loans, which were allocated to each loan on a specific identification basis based on original principal amounts.

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Deferred fees are amortized ratably over the respective lives of each term loan.

Deferred fees associated with the term loans under the January 2017 credit agreement were fully expensed during 2017 and deferred financing fees were derecognized as a result of the Business Combination as described in the Note 1 " Operations and Summary of Significant Accounting Policies" and Note 2 "Acquisitions".

On October 1, 2019, the Company repaid the Second Lien Term Loan with the proceeds of the sale of preferred and common units by Series U, Series R, and SRS.

The Company accounted for the repayment of the Second Lien Term Loan as a debt extinguishment as the investors who purchased the preferred stock and common units were not parties to the Second Lien Term Loan.

The total repayment was $ 126.3 million, and resulted in a loss on early extinguishment of approximately $ 4.3 million.

" Operations and Summary of Significant Accounting Policies" and Note 2.

"Acquisitions".

Separately, on October 21, 2019, the Company entered into a Senior Secured First Lien Floating Rate Note (the “Secured First Lien Note”) in a principal amount of $ 125.0 million.

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The Secured First Lien Note bears interest at an annual rate based on 3 month LIBOR plus an applicable margin of 5.25 %.

The interest rate on the Secured First Lien Note on August 28, 2020, prior to payoff was 6.7 %.

On August 28, 2020, as part of the Business Combination Agreement with CCH (as described in Note 1 " Operations and Summary of Significant Accounting Policies" and Note 2 "Acquisitions", the Senior Secured First Lien Floating Rate Note was paid off.

The total repayment was $ 128.8 million, which includes a $ 2.5 million early termination fee included within other expense (income), net in the Successor period and $ 1.3 million of interest expense which had been accrued in the Predecessor period.

The First Lien Term Loan, the Secured First Lien Note and the ABL facility are collateralized by substantially all of the assets and liabilities of the Company.

On December 14, 2020, the Company entered into a Bridge Credit Agreement with a syndicate of banks, led by Bank of America, N.A.

(the “Bridge Credit Agreement”).

The proceeds of the Bridge Credit Agreement were used to fund the Company’s acquisition of Truco and the IP Purchase from OTB Acquisition, LLC, in which the Company withdrew $ 490.0 million to finance the Truco Acquisition and IP Purchase.

The Bridge Credit Agreement bears interest at an annual rate based on 4.25 % Base plus 1 month LIBOR with scheduled incremental increases to the base rate, as defined in the Bridge Credit Agreement.

The loan converts into an Extended Term Loan if the Loan remains open 365 days after the closing date.

As of January 3, 2021, the outstanding balance of the Bridge Credit Agreement was $ 370.0 million, with $ 120.0 million being repaid from the redemption of the Company's warrants.

Commitment fees and deferred financing costs on the Bridge Credit Agreement totaled $ 7.2 million, of which $ 2.6 million remained on the books as of January 3, 2021.

In connection with Amendment No.

2 to the Credit Agreement, and a $ 12.0 million repayment in the first quarter of 2021, the outstanding balance of $ 370.0 million was repaid in full.

On January 20, 2021, the Company entered into Amendment No.

2 to the Credit Agreement ("Amendment No.

2") which provided additional operating flexibility and revisions to certain restrictive covenants.

Pursuant to the terms of Amendment No.

2, the Company raised $ 720 million in aggregate principal of Term Loan B ("Term Loan B") which bears interest at LIBOR plus 3.00 %, and extended the maturity of the Credit Agreement to January 20, 2028.

The proceeds were used, together with cash on hand and proceeds from our exercised warrants, to redeem the outstanding principal amount of existing Term Loan B and Bridge Credit Agreement of $ 410 million and $ 358 million, respectively.

The refinancing was accounted for as an extinguishment.

The Company incurred debt issuance costs and original issuance discounts of $ 8.4 million.

The interest rate on this instrument was 3.11 % as of April 4, 2021.

The First Lien Term Loan, the Secured First Lien Note, Term Loan B, and the ABL facility are collateralized by substantially all of the assets and liabilities of the Company.

The credit agreements contain certain affirmative and negative covenants as to operations and the financial condition of the Company.

The Company was in compliance with its financial covenant as of September 27, 2020.

The Company was in compliance with its financial covenant as of April 4, 2021.

Other Notes Payable and Capital Leases

During the first fiscal quarter of 2020, the Company closed on the acquisition of Kitchen Cooked, as described in Note 2 "Acquisitions" and the acquisition included a deferred purchase price of $ 2.0 million.

Additionally, during the first fiscal quarter of 2020, the Company purchased intellectual property that include a deferred purchase price of $ 0.5 million.

During the first fiscal quarter of 2020, the Company closed on the acquisition of Kitchen Cooked and the acquisition included a deferred purchase price of $ 2.0 million, of which $ 1.0 million is still outstanding as of April 4, 2021 and January 3, 2021.

Additionally, during the first fiscal quarter of 2020, the Company purchased intellectual property that include a deferred purchase price of $ 0.5 million, of which $ 0.4 million and $ 0.5 million is outstanding as of April 4, 2021 and January 3, 2021, respectively.

Amounts outstanding under notes payable consisted of the following:

Successor Predecessor

(in thousands) As of

September 27, 2020

As of December 29, 2019

April 4, 2021

As of January 3, 2021

Note payable – IO notes $ 23,567 $ 23,106

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During fiscal 2019, the Company sold $ 33.2 million of notes receivable from IOs on its books for $ 34.1 million in a series of transactions to a financial institution.

Due to the structure of the transaction, the sale did not qualify for sale accounting treatment and the Company has recorded the notes payable obligation owed by the IOs to the financial institution on its books;

During the first quarter of fiscal 2021, the Company sold an additional $ 2.3 million of notes receivable from IOs on its books for $ 2.5 million to a financial institution.

Due to the structure of the transactions, the sale did not qualify for sale accounting treatment and the Company has recorded the notes payable obligation owed by the IOs to the financial institution on its books;

the corresponding notes receivable also remained on the Company’s books.

5 unchanged sentences

Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default.

Interest expense for the Successor period from August 29, 2020 to September 27, 2020 was $ 1.8 million, $ 1.7 million of which was related to the Company’s credit facility and other long-term debt and $ 0.1 million of which was related to IO loans.

Interest expense for the Predecessor period from June 29, 2020 to August 28, 2020 was $ 7.0 million, $ 6.2 million of which was related to the Company’s credit facility and other long-term debt, $ 0.4 million of which was related to amortization of deferred financing fees, and $ 0.4 million of which was related to IO loans.

Interest expense for the 13 week period ended September 29, 2019 was $ 12.6 million, $ 11.4 million of which was related to the Company’s credit facility and other long-term debt, $ 0.5 million of which was related to amortization of deferred financing fees, and $ 0.7 million of which was related to IO loans.

The interest expense on IO loans is a pass-through expense that has an offsetting interest income within Other Income (Expense).

Interest expense for the Predecessor period from December 30, 2019 to August 28, 2020 was $ 26.7 million, $ 23.3 million of which was related to the Company’s credit facility and other long-term debt, $ 1.7 million of which was related to amortization of deferred financing fees, and $ 1.7 million of which was related to IO loans.

Interest expense for the 39 weeks ended September 29, 2019 was $ 38.0 million, $ 34.9 million of which was related to the Company’s credit facility and other long-term debt, $ 1.5 million of which was related to amortization of deferred financing fees, and $ 1.6 million of which was related to IO loans.

The interest expense on IO loans is a pass-through expense that has an offsetting interest income within Other Income (Expense).

Interest expense for the thirteen weeks ended April 4, 2021 (Successor) was $ 10.9 million, $ 7.6 million of which was related to the Company’s credit facility and other long-term debt, of which $ 2.9 million was related to amortization of deferred financing fees, and $ 0.4 million of which was related to IO loans.

Interest expense for the thirteen weeks ended March 29, 2020 (Predecessor) was $ 9.6 million, $ 8.3 million of which was related to the Company’s credit facility and other long-term debt, $ 0.7 million of which was related to amortization of deferred financing fees, and $ 0.6 million of which was related to IO loans.

The interest expense on IO loans is a pass-through expense that has an offsetting interest income within Other (expense) income.

DERIVATIVE FINANCIAL INSTRUMENTS AND PURCHASE COMMITMENTS

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The Company entered into this transaction to reduce its exposure to changes in cash flows associated with its variable rate debt and has designated this derivative as a cash flow hedge.

At September 27, 2020, the effective fixed interest rate on the long-term debt hedged by this contract was 4.2 %.

At April 4, 2021, the effective fixed interest rate on the long-term debt hedged by this contract was 3.47 %.

For further treatment of the Company’s interest rate swap, refer to Note 10.

"Fair Value Measurements" and Note 12.

Accumulated Other Comprehensive (Loss) Income.”

"Accumulated Other Comprehensive Income (Loss)."

Warrant Liabilities

The Company has outstanding warrants which are accounted for as derivative liabilities pursuant to ASC 815-40.

"Warrants" for additional information on our warrant liabilities.

A reconciliation of the changes in the warrant liability during the thirteen weeks ended April 4, 2021 (Successor) is as follows:

(in thousands)

Fair value of warrant liabilities as of January 3, 2021 $ 137,612

Loss on remeasurement of warrant liability 21,501

Reclassification of warrant liability to equity for exercised or cancelled warrants ( 54,713 )

Fair value of warrant liabilities as of April 4, 2021 $ 104,400

Purchase Commitments

Additionally, the Company has outstanding purchase commitments for specific quantities at fixed prices for certain key ingredients to economically hedge commodity input prices.

These purchase commitments totaled $ 53.0 million as of September 27, 2020.

The Company has recorded purchase commitment gain (losses) totaling $ 0.2 million for the Successor period from August 29, 2020 to September 27, 2020, $ 0.3 million for the Predecessor period from June 29, 2020 to August 28, 2020, and $( 0.5 ) million for the 13 week period ended September 29, 2019.

The Company has recorded purchase commitment losses totaling $( 0.7 ) million for the Predecessor period from December 30, 2019 to August 28, 2020 and $( 0.8 ) million for the 39 weeks ended September 29, 2019.

These purchase commitments totaled $ 81.2 million as of April 4, 2021.

The Company has recorded purchase commitment losses totaling $ 0.0 million and $ 0.3 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.

FAIR VALUE MEASUREMENTS

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Derivative assets and liabilities included in Level 2 primarily represent commodity and interest rate swap contracts.

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of September 27, 2020:

(in thousands) Level 1 Level 2 Level 3 Total

(in thousands) Level I Level II Level III Total

Cash and cash equivalents $ 4,020 $ — $ — $ 4,020

2 unchanged sentences

Interest rate swaps — 4,351 — 4,351

Private placement warrants — 104,400 — 104,400

Debt — 725,943 — 725,943

Total liabilities $ — $ 834,914 $ — $ 834,914

(in thousands) Level 1 Level 2 Level 3 Total

(in thousands) Level I Level II Level III Total

Cash and cash equivalents $ 46,831 $ — $ — $ 46,831

Interest rate swaps — 1,486 — 1,486

Total assets $ 46,831 $ — $ — $ 46,831

Commodity contracts $ — $ 248 $ — $ 248

Interest rate swaps — 5,163 — 5,163

Public warrants 52,580 — — 52,580

Private placement warrants — 85,032 — 85,032

Debt — 778,469 — 778,469

Total liabilities $ 52,580 $ 868,912 $ — $ 921,492

SHARE-BASED COMPENSATION

2020 Omnibus Equity Incentive Plan

In August 2020, CCH’s shareholders approved the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”).

The 2020 Plan provides for the grant of various equity-based incentive awards to eligible employees and directors of the Company and its subsidiaries.

The types of equity-based awards currently outstanding under the 2020 Plan include RSUs, PSUs, and stock options.

There are 9,500,000 shares of Class A Common Stock reserved for issuance under the 2020 Plan.

All awards currently issued under the 2020 Plan may be settled only in shares of Class A Common Stock.

Restricted Stock Units

2020 LTIP RSUs

In connection with the Business Combination, the Phantom Units issued under the 2018 LTIP were converted into the RSUs issued under the 2020 Long-Term Incentive Plan (the “2020 LTIP RSUs”), with each RSU vesting on December 31, 2021, provided that if a change in control of Utz, under the terms of the 2020 LTIP occurs prior to December 31, 2021, the 2020 LTIP RSUs will become 100% vested, unless earlier forfeited under their terms, and representing an unfunded, unsecured promise by the Company to issue a participant one share of Class A Common Stock.

Holders of 2020 LTIP RSUs are subject to substantially similar terms to the holders of Phantom Units, including requisite service period and vesting conditions.

The conversion of the 2018 LTIP Phantom Units was accounted for as a modification under ASC 718.

The 2020 LTIP RSUs are equity-classified due to settlement being in shares.

As a result of the Business Combination, the Company converted the Phantom Units under the 2018 LTIP into 2020 LTIP RSUs, which may settle into up to 1,479,445 shares of Class A Common Stock plus such number of shares the Company may deliver, in its discretion, to satisfy certain gross-up obligations, under the 2020 LTIP at a fair value of $ 16.34 per unit to holders of the Phantom Units.

The fair value of the Phantom Units being replaced was approximately $ 11.2 million at the Closing, which was attributable to the pre-combination service period and was included in the purchase price of the Business Combination.

The fair value of the 2020 LTIP RSUs at the Closing of the Business Combination in excess of the fair value of the replaced Phantom Units attributable to the pre-combination period was approximately $ 13.9 million and is attributable to the post-combination requisite service period.

Unrecognized compensation expense related to the 2020 LTIP RSUs was $ 13.0 million at September 27, 2020, which is expected to be recognized as expense over the remaining post-combination service period of approximately 1.3 years.

The Company incurred $ 0.9 million of share-based compensation expense from August 29, 2020 through September 27, 2020.

There were no forfeitures of 2020 LTIP RSUs during the Successor period.

Initial Grant RSUs

Under the 2020 Plan, the Company has granted certain employees and directors RSUs as a result of their significant contributions.

These grants will settle upon vesting into shares of the Company’s Class A Common Stock, subject to continued employment.

The Initial Grant RSUs for directors will vest on May 6, 2021, while the Initial Grant RSUs for certain employees will vest in equal installments on December 31, 2022 and December 31, 2023.

The Initial Grant RSUs will participate in dividends of the Company beginning with the fiscal 2020 end-of-year dividend declaration, which is expected to be paid out in the first quarter of fiscal 2021.

During the period from August 29, 2020 through September 27, 2020, the Company granted 128,935 Initial Grant RSUs at a grant date fair value of $ 18.40 per unit, which is the closing share price of the Company’s Class A Common Stock on the grant date, provided that the issuance of the Initial Grant RSUs was contingent upon the Company filing a Form S-8 with the SEC, which occurred on November 2, 2020.

All such RSUs remained unvested at September 27, 2020.

Unrecognized compensation expense related to unvested Initial Grant RSUs was $ 2.3 million at September 27, 2020, which is expected to be recognized as expense over the weighted-average period of 2.3 years.

The Company incurred $ 0.1 million of share-based compensation expense from August 29, 2020 through September 27, 2020.

There were no forfeitures of Initial Grant RSUs during the Successor period.

Performance Share Units

The Company issued PSUs as part of the 2020 Plan, which settle into shares of the Company’s Class A Common Stock subject to the continued employment of the grantees and achievement of certain performance criteria, provided that the issuance of the PSUs was contingent upon the Company filing a Form S-8 with the SEC, which occurred on November 2, 2020.

The number of PSUs that will vest is determined by the Company’s Class A Common Stock achieving a certain Total Shareholder Return (“TSR”) for the Company, relative to the TSR of a specified peer group.

Depending on the Company’s TSR relative to the peer group TSR, the actual number of shares that will be vested can range from zero and up to 200 % of the initial grant.

The awards will vest 50 % on December 31, 2022 and 50 % on December 31, 2023, subject to the market condition described above.

The PSUs will participate in dividends of the Company beginning with the fiscal 2020 end-of-year dividend declaration, which is expected to be paid out in the first quarter of fiscal 2021.

Since the PSUs vest based on market conditions, a Monte Carlo simulation model was used to determine the grant-date fair value of the PSUs.

The assumptions used in the Monte Carlo simulation model included a weighted average expected term of 2.8 years, weighted average expected volatility of 53.6 %, and weighted average risk-free rate of 0.2 %.

During the period from August 29, 2020 through September 27, 2020, the Company granted 140,076 PSUs at a weighted average grant date fair value of $ 23.67 per unit, all of which remained unvested at September 27, 2020.

As of September 27, 2020, the Company had 3.2 million of total unrecognized compensation cost related to PSUs that will be recognized over a weighted average period of 2.8 years.

The Company incurred $ 0.1 million in share-based compensation expense from August 29, 2020 through September 27, 2020 related to the PSUs.

There were no forfeitures of PSUs during the period.

Stock Options

The Company granted its Executive Leadership Team stock options exercisable for Class A Common Stock of the Company, provided that the exercise of such stock options was contingent upon the Company filing a Form S-8 with the SEC, which occurred on November 2, 2020.

Subject to continued employment, 50% of these options will vest on December 31, 2022 and 50% on December 31, 2023.

The Company granted 286,268 stock options on August 28, 2020 and the exercise price of the options is the Company’s closing share price of $ 16.34 on August 28, 2020.

The stock options have a maximum contractual life of 10 years from the grant date.

No options were exercised or forfeited during the period, and no stock options were granted prior to the Business Combination.

The fair value of each stock option granted was determined to be $ 7.38 using the Black-Scholes Option Pricing Model based on an expected volatility of 46.8 %, expected option term of approximately 6.4 years, and risk-free rate of return of 0.4 %.

The risk-free rates are based on the implied yield available on U.S.

Treasury zero-coupon issues with an equivalent remaining term.

The expected option term was determined based on the simplified method as allowable under ASC 718 due to a lack of sufficient trading history for the Company’s common stock.

The use of this method effectively assumes that exercise occurs evenly over the period from vesting until expiration, and therefore the expected term is the midpoint between the service period and the contractual term of the award.

As of September 27, 2020, the Company had $ 1.7 million of total unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 2.8 years.

For the period from August 29, 2020 through September 27, 2020, the stock compensation expense related to the stock options was $ 0.0 million.

Utz Quality Foods, LLC 2018 Long-Term Incentive Plan

UBH recorded a reserve for the estimated fair value of vested Phantom Units under the 2018 LTIP of $ 14.4 million as of December 29, 2019 and $ 11.2 million as of August 28, 2020, the Closing Date of the Business Combination.

The 2018 LTIP liability is included in non-current accrued expenses and other on the consolidated balance sheets of the Predecessor.

In connection with the Business Combination, these awards were replaced by the 2020 LTIP, a sub-plan under the 2020 Plan.

CONTINGENCIES

2 unchanged sentences

The Company received an assessment from the Commonwealth of Pennsylvania pursuant to a sales and use tax audit for the period from January 1, 2014 through December 31, 2016.

As of September 27, 2020 and December 29, 2019, the Company had a reserve of $ 1.3 million, to cover the assessment.

As of April 4, 2021 and January 3, 2021, the Company had a reserve of $ 1.3 million, to cover the assessment.

The Company partially guarantees loans made to IOs by Cadence Bank for the purchase of routes.

The outstanding balance of loans guaranteed was $ 4.2 million and $ 5.1 million at September 27, 2020 and December 29, 2019, respectively, all of which was recorded by the Company as an off balance sheet arrangement.

The outstanding balance of loans guaranteed was $ 3.3 million and $ 4.1 million at April 4, 2021 and January 3, 2021, respectively, all of which was recorded by the Company as an off balance sheet arrangement.

The maximum amount of future payments the Company could be required to make under the guarantees equates to 25 % of the outstanding loan balance up to $ 2.0 million.

2 unchanged sentences

The Company partially guarantees loans made to IOs by Bank of America for the purchase of routes.

The outstanding balance of loans guaranteed that were issued by Bank of America was $ 4.3 million and $ 0.7 million at September 27, 2020 and December 29, 2019, respectively, which are off balance sheet.

The outstanding balance of loans guaranteed that were issued by Bank of America was $ 8.4 million and $ 7.1 million at April 4, 2021 and January 3, 2021, respectively, which are off balance sheet.

As discussed in Note 8.

Long-Term Debt”, the Company also sold notes receivable on its books to Bank of America during fiscal 2019, which the Company partially guarantees.

The outstanding balance of notes purchased by Bank of America at September 27, 2020 and December 29, 2019 was $ 18.3 million and $ 25.1 million, respectively.

Due to the structure of the transaction, the sale did not qualify for sale accounting treatment, as such the Company records the notes payable obligation owed by the IOs to the financial institution on its books;

the corresponding note receivable also remained on the Company’s books.

"Long-Term Debt", the Company also sold notes receivable on its books to Bank of America during fiscal 2019 and fiscal 2021, which the Company partially guarantees.

The outstanding balance of notes purchased by Bank of America at April 4, 2021 and January 3, 2021 was $ 17.4 million and $ 16.5 million, respectively.

Due to the structure of the transactions, the sale did not qualify for sale accounting treatment, as such the Company records the notes payable obligation owed by the IOs to the financial institution on its Consolidated Balance Sheets;

the corresponding note receivable also remained on the Company’s Consolidated Balance Sheets.

The maximum amount of future payments the Company could be required to make under these guarantees equates to 25 % of the outstanding loan balance on the first day of each calendar year plus 25 % of the amount of any new loans issued during such calendar year.

3 unchanged sentences

The agreement with M&T Bank was amended in January 2020 so that the Company guaranteed up to 25% of the greater of the aggregate principal amount of loans outstanding on the payment date or January 1st of the subject year.

The outstanding balance of loans guaranteed was $ 7.2 million and $ 8.6 million at September 27, 2020 and December 29, 2019, respectively, all of which was on balance sheet.

The outstanding balance of loans guaranteed was $ 6.2 million and $ 6.6 million at April 4, 2021 and January 3, 2021, respectively, all of which was the Company's consolidated balance sheets.

These loans are collateralized by the routes for which the loans are made.

Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default.

Unclaimed Property

The Company was notified in September 2016 that several states requested an audit of the Company’s unclaimed property practices.

The states initiating the audit include Connecticut, Idaho, Maryland, Massachusetts, New Hampshire, New York, South Dakota, and Tennessee but was later expanded to include a total of 22 states.

The audit is limited to UQF and does not include any other legal entities.

The audit consists of three components including accounts payable, payroll, and accounts receivable customer over-payments.

The Company estimates that the potential liability for the accounts payable and payroll components is approximately $ 0.2 million, which has been included in the other accrued expenses section of the balance sheet as of September 27, 2020 and December 29, 2019.

As of the date of these financial statements, the Company is not able to reasonably estimate the potential liability for the accounts receivable customer over-payments.

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Total accumulated other comprehensive income was $ 0.3 million as of September 27, 2020 and $ 1.4 million as of December 29, 2019.

Total accumulated other comprehensive (loss) income consists solely of unrealized gains (losses) from the Company’s derivative financial instruments accounted for as cash flow hedges.

During the period ended September 27, 2020, changes to the balance in accumulated other comprehensive (loss) income were as follows:

(in thousands) Gains/(Losses) on

Cash Flow Hedges

Balance as of December 29, 2019 $ 1,408

Unrealized gain (loss) on cash flow hedges ( 7,917 )

Balance as of June 28, 2020 ( 6,509 )

Unrealized gain (loss) on cash flow hedges 454

Balance as of August 28, 2020 $ ( 6,055 )

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Total accumulated other comprehensive income (loss) was $ 1.7 million as of April 4, 2021 and $ 0.9 million as of January 3, 2021.

Total accumulated other comprehensive income (loss) consists solely of unrealized gains (losses) from the Company’s derivative financial instruments accounted for as cash flow hedges.

During the periods ended April 4, 2021 and March 29, 2020, changes to the balance in accumulated other comprehensive income (loss) were as follows:

(in thousands) Gain on

Cash Flow Hedges

Balance as of August 29, 2020 $ —

Balance as of January 3, 2021 $ 924

Unrealized gain on cash flow hedges 822

Balance as of September 27, 2020 $ 252

Balance as of April 4, 2021 $ 1,746

(in thousands) Loss on

Cash Flow Hedges

Balance as of December 29, 2019 $ 1,408

Unrealized loss on cash flow hedges ( 7,208 )

Balance as of March 29, 2020 $ ( 5,800 )

SUPPLEMENTARY CASH FLOW INFORMATION

Cash paid for interest was $ 1.6 million for the Successor period from August 29, 2020 to September 27, 2020, $ 28.8 million for the Predecessor period from December 30, 2019 to August 28, 2020, and $ 40.2 million for the 39 weeks ended September 29, 2019.

Refunds related to income related taxes were $ 0.0 million for the Successor period from August 29, 2020 to September 27, 2020, $ 0.2 million for the Predecessor period from December 30, 2019 to August 28, 2020, and $ 0.1 million for the 39 weeks ended September 29, 2019.

Payments made for income-related taxes were $ 0.3 million for the Successor period from August 29, 2020 to September 27, 2020, $ 0.5 million for the Predecessor period from December 30, 2019 to August 28, 2020, and $ 1.8 million for the thirty-nine weeks ended September 29, 2019.

The following non cash considerations were part of the Business Combination Agreement with CC H;

Continuing Members' retained restricted units totaling $ 54.1 million, TRA totaling $ 51.4 million, and LTIP RSU awards totaling $ 11.2 million.

UBI is taxed as a corporation and is subject to corporate federal, state and local taxes on the income allocated to it from UBH, based upon UBI’s economic interest in UBH, as well as any stand-alone income or loss it generates.

UBH wholly-owns UQF, UTZTRAN LLC, Kennedy, GH Pop Holdings LLC, Good Health, Condor Snack Foods LLC, and Snikiddy, which are disregarded entities for federal and most applicable state and local tax purposes.

UBH and its disregarded subsidiaries are treated as a partnership for U.S.

federal and most applicable state and local income tax purposes.

As a partnership, UBH is not subject to U.S.

federal and certain state and local income taxes.

UBH’s members, including UBI, are liable for federal, state and local income taxes based on their allocable share of UBH’s pass-through taxable income, which includes income of UBH's subsidiaries that are treated as disregarded entities separate from UBH for income tax purposes.

UBH wholly-owns Heron Holding Corporation ("Heron"), which wholly-owns Golden Flake, Inventure Foods, and Kitchen Cooked.

Heron and its subsidiaries are subject to corporate federal, state and local taxes on income they generate.

As such, the consolidated tax provision of UBI addresses corporate taxes that it incurs based on its flow-through income from UBH as well as corporate taxes that are incurred by Heron and its subsidiaries.

The Company accounts for income taxes in accordance with ASC 740, Income Taxes.

The Company’s effective tax rates for the period August 29, 2020 through September 27, 2020 and June 29, 2020 through August 28, 2020 were 54.3 % and ( 38.6 )%, respectively.

The Company’s effective tax rate for December 29, 2019 through August 28, 2020 was 53.7 %.

The Company’s effective tax rates for the thirteen and thirty-nine week periods ended September 29, 2019 were 9.0 % and 20.8 %, respectively.

The Company’s effective rates differ from the federal statutory rate of 21% primarily due to the impact of UBH, which is a partnership, is not taxed at the Company level, and is required to allocate some of its taxable results to the Continuing Members, as well as state taxes.

As a result of the Business Combination, the Company recognized a deferred tax asset (“DTA”) in the amount of $ 52.5 million to account for the difference between the Company’s book and tax basis in its UBH limited liability company units.

At the Closing, the Company concluded, based on the weight of all positive and negative evidence, that the DTA is not likely to be realized.

As such, a full valuation allowance was recorded.

The financial statements reflect a net deferred tax liability (“DTL”) of $ 23.0 million, the detail of which is outlined in the following table.

(in thousands) Asset or (Liability)

Investment in UBH partnership $ 52,538

Valuation Allowance - non-reversing temporary differences ( 52,538 )

Subtotal - UBI —

Heron and Subsidiaries

Fixed assets ( 10,915 )

Intangible assets ( 26,069 )

Federal and state net operating losses 14,029

Other temporary differences 1,551

Subtotal ( 21,404 )

Valuation allowance - state net operating losses ( 1,554 )

Subtotal - Heron and Subsidiaries ( 22,958 )

Total $ ( 22,958 )

The Company files federal and state tax returns.

These returns are generally open to examination by the relevant tax authorities from three to four years from the date they are filed, although there is variation by jurisdiction.

The tax filings relating to the Company's US federal tax returns are currently open to examination for years beginning in 2017 and state tax returns are open to examination for tax years beginning in 2015.

Cash paid for interest was $ 9.8 million and $ 9.5 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.

Refunds related to income related taxes were $ 0.2 million and $ 0.2 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.

Payments made for income-related taxes were $ 0.0 million and $ 0.0 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.

Dividends paid during the thirteen weeks ended April 4, 2021 (Successor) were $ 4.3 million and were included within the "accrued expense and other" of the Consolidated Balance Sheet as of January 3, 2021.

There were no accrued dividend as of April 4, 2021.

The Company is subject to federal and state income taxes with respect to our allocable share of any taxable income or loss of UBH, as well as any standalone income or loss the Company generates.

UBH is treated as a partnership for federal income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in most jurisdictions.

Instead, UBH taxable income or loss is passed through to its members, including the Company.

Despite its partnership treatment, UBH is liable for income taxes in those states not recognizing its pass-through status and for certain of its subsidiaries not taxed as pass-through entities.

The Company has acquired various domestic entities taxed as corporations, which are now wholly-owned by us or our subsidiaries.

Where required or allowed, these subsidiaries also file and pay tax as a consolidated group for federal and state income tax purposes.

The Company anticipates this structure to remain in existence for the foreseeable future.

The Company recorded income tax expense of $ 1.0 million and $ 1.5 million for the thirteen-week periods ended April 4, 2021 and March 29, 2020, respectively.

The effective tax rates for the thirteen-week periods ended April 4, 2021 and March 29, 2020 were ( 4.5 )% and 46.3 %, respectively.

The Company’s effective tax rates differ from the federal statutory rate of 21% primarily due to the impact of UBH, which is a partnership, is not taxed at the Company level, and is required to allocate some of its taxable results to the Continuing Members, as well as state taxes and the fair value impact of warrant liabilities.

The Company’s effective tax rate for the thirteen-week period ended April 4, 2021 is 6.5 % before consideration of any discrete items.

During the thirteen-week period ended April 4, 2021, the effective tax rate was impacted by statutory state tax rate changes which resulted in a discrete tax expense of $ 1.1 million.

The Company regularly evaluates valuation allowances established for deferred tax assets ("DTA's") for which future realization is uncertain.

The Company assessed the available positive and negative evidence to estimate whether future taxable income would be generated to permit use of the existing DTA's.

As of April 4, 2021, a significant piece of objective negative evidence evaluated was the twelve-quarter cumulative loss before taxes.

Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth.

The Company determined that there is uncertainty regarding the utilization of certain DTA's such as the investment in Utz Brands Holdings, LLC and state net operating losses where the Company does not expect to continue to have nexus.

Therefore, a full valuation allowance has been recorded against the DTA's for which it is more-likely-than-not they will not be realized.

The amount of DTA considered realizable;

however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for growth.

As of April 4, 2021, tax years 2017 through 2021 remain open and subject to examination by the Internal Revenue Service and the majority of the states where the Company has nexus, and tax years 2016 through 2021 remain open and subject to examination in selected states that have a longer statute of limitations.

Upon audit, tax authorities may challenge all or part of a tax position.

The Company regularly assesses the outcome of a potential examination in each tax jurisdiction and does not expect to record any material changes during 2020 to the balance of unrecognized tax benefits of $ 0 reported at December 29, 2019.

A tax position successfully challenged by a taxing authority could result in an adjustment to our provision for income taxes in the period in which a final determination is made.

The Company did not maintain any unrecognized tax benefits as of April 4, 2021 and January 3, 2021, respectively.

Tax receivable agreement liability

Pursuant to an election under section 754 of the Internal Revenue Code, the Company obtained an increase in its share of the tax basis in the net assets of UBH when it was deemed to purchase UBH units from the Continuing Members and UPA Seller per the Business Combination.

Pursuant to an election under section 754 of the Internal Revenue Code, the Company obtained an increase in its share of the tax basis in the net assets of UBH when it was deemed to purchase UBH units from the UPA Seller and purchased UBH units from the Continuing Members per the Business Combination.

The Continuing Members have the option to exchange UBH units for UBI common stock post-Business Combination.

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The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors.

As of September 27, 2020, the Company had a liability of $ 51.4 million related to its projected obligations under the TRA, which is reflected as a non-current accrued expense in the consolidated balance sheet.

VARIABLE INTEREST ENTITIES

Prior to the merger of SRS and UQF described in “Note 1.

Operations and Summary of Significant Accounting Policies”, UQF held a variable interest in SRS a commonly controlled entity, for which UQF is the primary beneficiary since UQF had the power to direct the activities of SRS and the obligation to absorb losses and the right to receive benefits.

UQF leased properties owned by SRS.

The acquisitions of these properties were funded by UQF through notes receivable.

As the primary beneficiary of this variable interest entity, the assets, liabilities and results of operations are included in UQF’s consolidated financial statements.

The equity holders’ interests were reflected in “Net income attributable to noncontrolling interest” in the consolidated statements of operations and comprehensive income (loss) and “Noncontrolling interest” in the consolidated balance sheets.

The total amount of lease expense/income between SRS and UQF for the thirteen and thirty-nine weeks ended September 29, 2019 was $ 1.1 million and $ 3.3 million, respectively, which was eliminated in consolidation.

When SRS merged with UQF, UQF assumed all assets and liabilities of SRS and any notes receivable or payable between the two companies were relieved.

As of April 4, 2021 and January 3, 2021, the Company had a liability of $ 28.7 million related to its projected obligations under the TRA, which is reflected as a non-current accrued expense in the consolidated balance sheet.

The Company leases certain vehicles, equipment and distribution centers under operating leases expiring in various years through 2031.

Lease terms range from one month to twelve years .

Capital leases, net, are included in Property, Plant and Equipment as follows:

(in thousands) As of April 4, 2021 As of January 3, 2021

Leases $ 9,423 $ 9,335

accumulated depreciation 1,113 526

Leases, net $ 8,310 $ 8,809

Charges resulting from the depreciation of assets held under capital leases are recognized within depreciation expense in the consolidated statements of operations and comprehensive income (loss).

Rental expense for leases to third parties totaled was $ 2.6 million and $ 2.9 million for the thirteen weeks ended April 4, 2021 (Successor), and the thirteen weeks ended March 29, 2020 (Predecessor), respectively.

Future minimum payments, to third parties, by year and in the aggregate, consisted of the following at April 4, 2021:

(in thousands)

2021 Remaining $ 11,848

Thereafter 5,005

Total $ 45,941

Prior to the Business Combination, CCH issued 15,833,332 warrants that were initially sold by CCH in its initial public offering of securities (the “Public Warrants”), including 1,166,666 warrants issued pursuant to those certain Forward Purchase Agreements entered into by CCH, the Sponsor, and the independent directors of CCH (the “Forward Purchase Agreements”) that were issued at the Closing of the Business Combination as part of the Forward Purchase Agreement discussed below (the “Forward Purchase Warrants”), and 7,200,000 warrants initially sold to the Sponsor simultaneously with the closing of its initial public offering (the “Private Placement Warrants,” collectively, with the Public Warrants and Forward Purchase Warrants, the “Warrants”).

As a result of the Business Combination, the Company assumed the CCH warrants and such warrants are now exercisable for shares of UBI Class A Common Stock instead of Class A ordinary shares of CCH.

All other features of the warrants remain unchanged.

On December 14, 2020, the Company provided notice to the holders of the Public Warrants and Forward Purchase Warrants that their warrants would be redeemed in accordance with the original terms on January 14, 2021.

As of April 4, 2021, all Public Warrants of 7,466,666 and Forward Purchase Warrants of 1,166,666 have been exercised.

Prior to January 3, 2021, 10,825,664 Public Warrants and Forward Purchase Warrants were exercised.

As of April 4, 2021, there were 7,200,000 Private Placement Warrants outstanding.

As of January 3, 2021, there were 4,575,645 Public Warrants, 432,000 Forward Purchase Warrants, and 7,200,000 Private Placement Warrants outstanding.

The Private Placement Warrants and the shares of Class A Common Stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until after the completion of the Business Combination, subject to certain limited exceptions.

Additionally, the Private Placement Warrants are exercisable on a cashless basis, at the holder’s option, and are non-redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees.

If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

We account for the Warrants as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815-40”), due to certain settlement provisions in the corresponding warrant agreement that do not meet the criteria to be classified in stockholders’ equity.

Pursuant to ASC 815-40, the Warrants are now classified as a liability at fair value on the Company’s consolidated balance sheet, and the change in the fair value of such liability in each period is recognized as a non-cash gain or loss in the Company’s consolidated statements of operations and comprehensive income (loss).

The Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no tax accounting relating to changes in the fair value of the Warrants recognized.

The remeasurement of the warrant liability resulted in a loss of $ 21.5 million for the thirteen weeks ended April 4, 2021 (Successor).

The Predecessor did not have warrants and as such no remeasurement of warrant liability is recorded in the thirteen week period ended March 29, 2020 (Predecessor).

BUSINESS RISK

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The Company is taking necessary preventive actions and implementing additional measures to protect its employees who are working on site.

The Company continues to experience higher demand for its products versus the prior year, and we are servicing that demand by increasing production and distribution activities.

Generally, producers of food products, including salty snacks, have been deemed “essential industries” by federal, state, and local governments and are exempt from certain COVID-19-related restrictions on business operations.

The Company’s strategic manufacturing capabilities and DSD distribution network have allowed it to effectively service increases in demand and be responsive to evolving market dynamics driven by changes in consumer behavior.

The Company continues to monitor customer and consumer demands, and intends to adapt its plans as needed to continue to meet these demands.

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Class A Common Stock

The Company is authorized to issue 1,000,000,000 shares of Class A Common Stock, par value $ 0.0001 per share, of which 59,369,050 shares of UBI were issued and outstanding on September 27, 2020.

The Company is authorized to issue 1,000,000,000 shares of Class A Common Stock, par value $ 0.0001 per share, of which 76,481,833 and 71,094,714 shares of UBI were issued and outstanding on April 4, 2021 and January 3, 2021, respectively.

Upon the Closing of the Business Combination, all shares of CCH Class A ordinary shares, including 3,500,000 Forward Purchase Class A Ordinary Shares of CCH that were issued at the Closing of the Business Combination as part of the Forward Purchase Agreement discussed below, and Class B ordinary shares, less shareholder redemptions, were converted on a one-for-one basis into shares of Class A Common Stock, including 2,000,000 shares of Class B Common Stock initially issued to the Sponsor, which immediately vested upon the Closing of the Business Combination and converted into shares of Class A Common Stock of the Company.

1 unchanged sentence

The Company is also authorized to issue 61,249,000 shares of Class V Common Stock, par value of $ 0.0001 all of which were issued to the Continuing Members in connection with the Closing of the Business Combination, as described in Note 2, “Acquisitions”.

Each of the Continuing Members' common limited liability company units of UBH along with a share of Class V Common Stock may be exchanged for one share of Class A Common Stock of the Company upon certain restrictions being satisfied, as described in Note 2 “Acquisitions”.

All 61,249,000 shares of Class V Common Stock were outstanding as of September 27, 2020.

Prior to the Business Combination, CCH issued 15,833,332 public warrants, including 1,166,666 Forward Purchase Warrants that were issued at the Closing as part of the Forward Purchase Agreement discussed below, and 7,200,000 private placement warrants.

As a result of the Business Combination, the Company assumed the CCH equity warrants and such warrants are now exercisable for shares of UBI Class A Common Stock instead of Class A ordinary shares of CCH.

All other features of the warrants remain unchanged.

As of September 27, 2020, there were 15,833,332 public warrants and 7,200,000 private placement warrants outstanding.

“Acquisitions”.

As of April 4, 2021 and January 3, 2021, there were 60,349,000 shares of Class V Common Stock outstanding.

Forward Purchases

In connection with the Closing of the Business Combination and pursuant to a Forward Purchase Agreement entered into between CCH, CCH’s Sponsor, and CCH’s independent directors, CCH consummated the sale and issuance of 3,500,000 Forward Purchase Shares and Forward Purchase Warrants to acquire up to 1,166,666 Class A ordinary shares of CCH at $ 11.50 per share, for aggregate proceeds of $ 35,000,000 that were used to fund the Business Combination.

In connection with the Closing of the Business Combination and pursuant to a Forward Purchase Agreement entered into between CCH, CCH’s Sponsor, and CCH’s independent directors, CCH consummated the sale and issuance of 3,500,000 shares issued pursuant to the Forward Purchase Agreements and Forward Purchase Warrants to acquire up to 1,166,666 Class A ordinary shares of CCH at $ 11.50 per share, for aggregate proceeds of $ 35,000,000 that were used to fund the Business Combination.

EARNINGS PER SHARE

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Diluted earnings per share is based on the weighted average number shares of Class A Common Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share-based awards outstanding during the Successor period.

Refer to Note 11.

Share-Based Compensation for further information on the share based awards considered in the diluted EPS computation.

Given the historical partnership equity structure of UBH, the Company determined that the calculation of earnings per membership unit results in values that are not a valuable metric to users of these consolidated financial statements.

1 unchanged sentence

The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share:

(in thousands, except share data) From August 29, 2020 through September 27, 2020

Basic earnings per share:

Net loss attributable to controlling interest $ ( 111 )

Weighted average Class A Common Stock shares, basic 59,369,050

Basic earnings per share $ —

Diluted earnings per share:

Net loss attributable to controlling interest $ ( 111 )

(in thousands, except share data) Thirteen weeks ended April 4, 2021

Basic and diluted earnings per share:

Net loss attributable to common stockholders $ ( 22,529 )

Weighted average Class A Common Stock shares, basic 75,927,005

Effect of dilutive securities:

Basic and diluted earnings per share $ ( 0.30 )

Anti-dilutive securities excluded from diluted earnings per share calculation:

Warrants 4,092,590

2020 LTIP RSUs 1,307,549

Initial Grant RSUs 57,742

Stock options 93,211

Weighted average Class A Common Stock shares, diluted 68,271,930

Diluted earnings per share $ —

Total 5,693,633

Class V Common Stock not subject to earnings per share calculation 60,349,000

2 unchanged sentences

Shares of the Company’s Class V Common Stock do not participate in earnings or losses of the Company and, therefore, are not participating securities.

Additionally, none of the share based compensation awards participated in earnings or losses of the Company during the Successor period from August 29, 2020 through September 27, 2020.

Additionally, none of the share based compensation awards participated in earnings or losses of the Company the thirteen weeks ended April 4, 2021 (Successor).

As such, basic and diluted earnings per share calculations under the two-class method were not required.

At September 27, 2020, the Continuing Members held all 61,249,000 shares of Class V Common Stock issued and outstanding and also held an equal number of common limited liability company units of UBH, which comprise the noncontrolling interest.

The net loss attributable to the noncontrolling interest was $ 2.3 million for the Successor period from August 29, 2020 through September 27, 2020.

At April 4 2021, the Continuing Members held 60,349,000 shares of Class V Common Stock issued and outstanding and also held an equal number of common limited liability company units of UBH, which comprise the noncontrolling interest.

The net loss attributable to the noncontrolling interest was $ 0.8 million for the thirteen weeks ended April 4, 2021 (Successor).

SUBSEQUENT EVENTS

On November 2, 2020, the Company, through its subsidiary UQF acquired certain assets of the H.K.

Anderson business, a leading brand of peanut butter-filled pretzels, from Conagra Brands, Inc.

for less than $ 10 million (including the price of certain inventory on hand at the closing of such acquisition).

The acquisition includes certain intangible assets and inventory and is intended to broaden the Company's product offering to include filled pretzels.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for the Company’s business.

Specifically, forward-looking statements may include statements relating to:

• the financial position, capital structure, indebtedness, business strategy and plans and objectives of management for future operations

• the benefits of the Business Combination;

• the future performance of, and anticipated financial impact on, the Company following the Business Combination;

• expansion plans and opportunities;

• other statements preceded by, followed by or that include the words “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and the Company management’s current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of the Company and its directors, officers and affiliates.

Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date.

The Company does not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, the Company’s results or performance may be materially different from those expressed or implied by these forward-looking statements.

Some factors that could cause actual results to differ include:

• the risk that the proposed Business Combination disrupts current plans and operations;

• the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, and the ability of the Company to grow and manage growth profitably and retain its key employees;

• the outcome of any legal proceedings that may be instituted against the Company following the consummation of the Business Combination;

• changes in applicable laws or regulations;

• costs related to the Business Combination;

• the inability of the Company to maintain the listing of the Company’s Class A Common Stock and warrants on the New York Stock Exchange;

• the inability to develop and maintain effective internal controls;

• the risk that the Company’s gross profit margins may be adversely impacted by a variety of factors, including variations in raw materials pricing, retail customer requirements and mix, sales velocities and required promotional support;

• changes in consumers’ loyalty to the Company’s brands due to factors beyond the Company’s control;

• changes in demand for the Company’s product affected by changes in consumer preferences and tastes or if the Company is unable to innovate or market its products effectively;

• costs associated with building brand loyalty and interest in the Company’s products which may be affected by the Company’s competitors’ actions that result in the Company’s products not suitably differentiated from the products of competitors;

• fluctuations in results of operations of the Company from quarter to quarter because of changes in promotional activities;

• the possibility that the Company may be adversely affected by other economic, business or competitive factors;

• other risks and uncertainties indicated in this Quarterly Report on Form 10-Q or the Current Report on Form 8-K filed by the Company with the SEC on September 3, 2020, including those set forth under the section entitled “ Risk Factors .”

On April 8, 2021, our Board of Directors declared a cash dividend of $ 0.05 per share on our Class A Common Stock, to the stockholders of record on April 19, 2021.

Payment of the dividend was executed on May 10, 2021.

On May 11, 2021, the Company announced that it entered into a definitive agreement with Great Lakes Festida Holdings, Inc., to acquire all of the assets including real estate related to the operation of Festida Foods, a manufacturer of tortilla chips, corn chips, and pellet snacks, and the largest manufacturer of tortilla chips for the Company's ON THE BORDER® brand.

The Company expects to close on the deal in the second quarter of 2021, with the purchase price of approximately $ 41 million that will be funded from the revolving credit facility.

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-Q

Item 1. Financial Statements