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Item 1. Financial Statements

2022-05-12 compared with 2021-11-12 · 275 added, 523 removed, 434 unchanged (65% of the section changed)

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CONSOLIDATED BALANCE SHEETS

October 3, 2021 and January 3, 2021

(In thousands, except share information)

October 3, 2021

April 3, 2022 and January 2, 2022

(In thousands)

April 3, 2022

As of January 2, 2022

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Current Liabilities

Current portion of term debt and financing obligations $ 10,672 $ 469

Current portion of term debt $ 11,414 $ 11,414

Current portion of other notes payable 13,057 9,957

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Accrued expenses and other 53,356 71,280

Current warrant liability — 52,580

Total current liabilities 182,794 188,020

Non-current portion of term debt, revolving credit facility and financing obligations 793,024 778,000

Non-current portion of term debt and revolving credit facility 852,722 830,548

Non-current portion of other notes payable 23,129 24,709

Non-current accrued expenses and other 56,109 55,838

Deferred tax liability 74,634 73,786

Non-current warrant liability 44,280 46,224

Deferred tax liability 136,837 136,334

Total non-current liabilities 1,113,077 1,093,653

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1,000,000,000 shares authorized;

77,570,422 and 71,094,714 shares issued and outstanding as of October 3, 2021 and January 3, 2021, respectively.

78,597,175 and 77,644,645 shares issued and outstanding as of April 3, 2022 and January 2, 2022, respectively.

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

61,249,000 shares authorized;

59,349,000 and 60,349,000 shares issued and outstanding as of October 3, 2021 and January 3, 2021, respectively.

59,349,000 shares issued and outstanding as of April 3, 2022 and January 2, 2022.

Additional paid-in capital 909,144 912,574

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Utz Brands, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the fiscal periods ended October 3, 2021, September 27, 2020 and August 28, 2020

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the thirteen weeks ended April 3, 2022 and April 4, 2021

(In thousands, except share information)

Successor Predecessor

Thirteen weeks ended October 3, 2021 Thirty-nine weeks ended October 3, 2021 From

August 29, 2020

September 27, 2020 From

June 29, 2020

August 28, 2020 From

December 30, 2019

August 28, 2020

Thirteen weeks ended April 3, 2022 Thirteen weeks ended April 4, 2021

Net sales $ 340,767 $ 269,182

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Gross profit 103,807 95,241

Selling, general and administrative expenses

Selling 67,985 189,152 16,859 33,648 131,579

General and administrative 30,724 89,698 8,451 25,626 64,050

Total selling, general and administrative expenses 98,709 278,850 25,310 59,274 195,629

Gain on sale of assets

Gain (loss) on disposal of property, plant and equipment, net 60 964 5 ( 14 ) 79

(Loss) gain on sale of routes, net ( 1,103 ) 1,001 59 233 1,264

Total (loss) gain on sale of assets ( 1,043 ) 1,965 64 219 1,343

Income (loss) from operations 2,875 16,543 ( 1,179 ) 3,117 32,781

Other income (expense)

Selling, distribution, and administrative expenses

Selling and distribution 88,110 56,728

Administrative 38,551 29,933

Total selling, distribution, and administrative expenses 126,661 86,661

Gain on sale of assets, net 367 719

(Loss) income from operations ( 22,487 ) 9,299

Other (expense) income

Interest expense ( 9,103 ) ( 10,861 )

Other income (expense) 740 2,216 ( 2,323 ) 432 1,271

Other income 520 718

Gain (loss) on remeasurement of warrant liability 1,944 ( 21,501 )

Other income (expense), net 29,302 9,888 ( 22,149 ) ( 6,597 ) ( 25,388 )

Income (loss) before income tax expense 32,177 26,431 ( 23,328 ) ( 3,480 ) 7,393

Income tax expense (benefit) 827 2,251 ( 2,889 ) 1,344 3,973

Net income (loss) 31,350 24,180 ( 20,439 ) ( 4,824 ) 3,420

Other (expense) income, net ( 6,639 ) ( 31,644 )

Loss before taxes ( 29,126 ) ( 22,345 )

Income tax expense 2,772 1,004

Net loss ( 31,898 ) ( 23,349 )

Net loss attributable to noncontrolling interest 14,328 820

Net income (loss) attributable to controlling interest $ 33,252 $ 28,302 $ ( 18,119 ) $ ( 4,824 ) $ 3,420

Earnings per Class A Common stock:

Basic $ 0.43 $ 0.36 $ ( 0.31 )

Diluted $ 0.40 $ 0.34 $ ( 0.31 )

Net loss attributable to controlling interest $ ( 17,570 ) $ ( 22,529 )

Earnings (loss) per Class A Common stock:

Basic & diluted $ ( 0.22 ) $ ( 0.30 )

Weighted-average shares of Class A Common stock outstanding

Basic 76,713,241 76,380,244 59,369,050

Diluted 80,906,618 81,082,177 59,369,050

Other comprehensive income (loss):

Change in value of interest rate swap $ 686 $ 2,115 $ 252 $ 454 $ ( 7,463 )

Comprehensive income (loss) $ 33,938 $ 30,417 $ ( 17,867 ) $ ( 4,370 ) $ ( 4,043 )

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

Utz Brands, Inc.

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

For the fiscal periods ended October 3, 2021, September 27, 2020 and August 28, 2020

(In thousands, except share data)

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 )

Net income 8,244 — — 8,244

Other comprehensive loss — ( 7,917 ) — ( 7,917 )

Merger of noncontrolling interest ( 7,314 ) — 7,314 —

Distributions to members ( 5,196 ) — — ( 5,196 )

Balance at June 28, 2020 ( 31,712 ) ( 6,509 ) — ( 38,221 )

Basic & diluted 78,572,404 75,927,005

Net loss $ ( 31,898 ) $ ( 23,349 )

Other comprehensive income:

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

Balance at August 28, 2020 $ ( 37,755 ) $ ( 6,055 ) $ — $ ( 43,810 )

Change in fair value of interest rate swap 27,809 822

Comprehensive loss ( 4,089 ) ( 22,527 )

Net comprehensive loss attributable to noncontrolling interest 2,362 —

Net comprehensive loss attributable to controlling interest $ ( 1,727 ) $ ( 22,527 )

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 October 3, 2021, September 27, 2020 and August 28, 2020

For the thirteen weeks ended April 3, 2022 and April 4, 2021

(In thousands, except share data)

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 $ 472,329 $ ( 134,331 ) $ — 338,010 $ 950,768 $ 1,288,778

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

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

Shares Amount Shares Amount

Balance at January 3, 2021 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

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Other comprehensive income — — — — 822 822 — 822

Cash dividends ($ 0.05 per share of

Class A Common

— — — ( 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 $ 473,387 $ ( 155,418 ) $ 252 $ 318,233 $ 945,359 $ 1,263,592

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

Balance at January 2, 2022 77,644,645 $ 8 59,349,000 $ 6 $ 912,574 $ ( 236,598 ) $ 3,715 $ 679,705 $ 754,968 $ 1,434,673

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

Stock-based compensation 498,991 1 — 6,638 — — 6,639 — 6,639

Payments of tax withholding requirements for employee stock awards — — ( 6,217 ) — — ( 6,217 ) — ( 6,217 )

Share-based compensation 952,530 — — 1,379 — — 1,379 — 1,379

Tax impact arising from share issuance — — 1,408 — — 1,408 — 1,408

Net loss — — — ( 17,570 ) — ( 17,570 ) ( 14,328 ) ( 31,898 )

Other comprehensive income — — — — 15,843 15,843 11,966 27,809

Cash dividends ($ 0.10 per share of

Class A Common

— — — ( 7,645 ) — ( 7,645 ) — ( 7,645 )

Distribution to noncontrolling interest — — — — — — ( 10,829 ) ( 10,829 )

Balance at July 4, 2021 76,570,422 $ 8 60,349,000 $ 6 $ 944,758 $ ( 254,085 ) $ 2,353 $ 693,040 $ 786,231 $ 1,479,271

Stock-based compensation — — 2,041 — — 2,041 — 2,041

Exchange 1,000,000 — ( 1,000,000 ) — 12,949 — — 12,949 ( 12,949 ) —

Net income (loss) — — — 33,252 — 33,252 ( 1,902 ) 31,350

Other comprehensive income — — — — 686 686 — 686

Cash dividends ($ 0.05 per share of

Class A Common

— — — ( 3,829 ) — ( 3,829 ) — ( 3,829 )

Distribution to noncontrolling interest — — — — — — ( 3,131 ) ( 3,131 )

Balance at October 3, 2021 77,570,422 $ 8 59,349,000 $ 6 $ 959,748 $ ( 224,662 ) $ 3,039 $ 738,139 $ 768,249 $ 1,506,388

Balance at April 3, 2022 78,597,175 $ 8 59,349,000 $ 6 $ 909,144 $ ( 254,168 ) $ 19,558 $ 674,548 $ 752,606 $ 1,427,154

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 October 3, 2021, September 27, 2020 and August 28, 2020

For the thirteen weeks ended April 3, 2022 and April 4, 2021

(In thousands)

Successor Predecessor

Thirty-nine weeks ended October 3, 2021 From

August 29, 2020

September 27, 2020 From

December 30, 2019

August 28, 2020

Thirteen weeks ended April 3, 2022 Thirteen weeks ended April 4, 2021

Cash flows from operating activities

Net income (loss) $ 24,180 $ ( 20,439 ) $ 3,420

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

Net loss $ ( 31,898 ) $ ( 23,349 )

Adjustments to reconcile net loss to net cash used in operating activities:

Impairment and other charges 3,319 —

Depreciation and amortization 22,121 19,407

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

(Gain) loss on remeasurement of warrant liability ( 1,944 ) 21,501

Gain on disposal of property and equipment ( 964 ) ( 5 ) ( 79 )

Gain on sale of routes ( 1,001 ) ( 59 ) ( 1,264 )

Stock-based compensation 8,680 1,058 —

Loss on debt extinguishment — 2,500 —

Gain on sale of assets ( 367 ) ( 719 )

Share-based compensation 1,379 2,883

Deferred taxes 1,912 1,061

Amortization of deferred financing fees 3,498 — 1,742

Deferred financing costs 341 2,870

Changes in assets and liabilities:

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Accounts payable and accrued expenses and other 464 ( 19,487 )

Net cash provided by (used in) operating activities 4,282 ( 27,748 ) 30,627

Net cash used in operating activities ( 36,004 ) ( 13,183 )

Cash flows from investing activities

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

Acquisitions, net of cash acquired ( 75 ) ( 25,189 )

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Proceeds from the sale of IO notes — 2,295

Proceeds from insurance claims 2,000 —

Notes receivable, net 221 ( 924 )

1 unchanged sentence

Cash flows from financing activities

Line of credit borrowings, net 20,000 15,000

Borrowings on term debt and notes payable 8,726 720,000

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Payment of debt issuance cost — ( 8,372 )

Payments of tax withholding requirements for employee stock awards ( 6,217 ) —

Exercised warrants — 57,232

Dividends ( 4,189 ) ( 4,261 )

Distributions to members — — ( 6,415 )

Distribution to noncontrolling interest — ( 181 )

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

("UBI" or the "Company", 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.

Securities and Exchange Commission (the "SEC").

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 2, 2022 has been derived from the audited combined financial statements as of and for the year ended January 2, 2022.

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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, as amended and notes thereto for the year ended January 3, 2021.

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 (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 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, UQF.

UQF is consolidated with its wholly-owned subsidiaries:

UTZTRAN, LLC;

Heron Holding Corporation (“Heron”), with its wholly-owned subsidiaries Golden Flake Snack Foods, Inc., Inventure Foods, Inc.

and its subsidiaries (“Inventure Foods”), and Kitchen Cooked Inc.

(“Kitchen Cooked”);

Kennedy Endeavors, LLC (“Kennedy”);

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

The consolidated interim financial statements, including our significant accounting policies, should be read in conjunction with the audited combined financial statements and notes thereto for the year ended January 2, 2022.

All intercompany transactions and balances have been eliminated in consolidation.

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.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statements with another public company which is either not an emerging growth company or is an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Under the JOBS Act, we will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering of common equity securities, (ii) the last day of the fiscal year in which we have annual gross revenue of $1.07 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt;

and (iv) the date on which we are deemed to be a “large accelerated filer,” which will occur at such time as the Company has an aggregate worldwide market value of common equity securities held by non-affiliates of $700.0 million or more as of the last business day of our most recently completed second fiscal quarter.

Since the aggregate worldwide market value of our Class A Common Stock held by non-affiliates exceeded $700.0 million as of the last business day of our most recently completed second fiscal quarter, we will not be an emerging growth company commencing on the last day of fiscal year 2021.

Operations – The Company through its wholly owned subsidiary UQF, is a premier producer, marketer and distributor of snack food products since 1921.

Reclassification – Certain prior year amounts have been reclassified for consistency with the current year presentation.

In our Q1 Consolidated Statement of Profit and Loss and Consolidated Statement of Cash flows, we began combining gain on disposal of property, plant and equipment, net and gain on sale of routes, net, into one line item as gain on sale of assets to simplify our reporting presentation.

The reclassification had no impact on total operating costs, earnings from operations, net earnings, earnings per share or total equity.

Operations – The Company through its subsidiary, Utz Quality Foods, LLC ("UQF"), is a premier producer, marketer and distributor of snack food products since 1921.

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.

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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 of $250,000 per depositor.

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.

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Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable.

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 October 3, 2021 and January 3, 2021, no liability for unrecognized tax benefits was required to be reported.

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling, distribution, and administrative expenses ("SD&A").

As of April 3, 2022 and January 2, 2022, 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.

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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.

There were no triggering events as of October 3, 2021 that would require an interim impairment analysis prior to the annual impairment test.

For the latest qualitative analysis performed, which took place on the first day of the fourth quarter of 2021, 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.

We have determined that there was no significant impact that affected the fair value of the reporting unit through April 3, 2022.

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.

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The Company sells its products in most regions of the United States primarily through its DSD network, direct to warehouse shipments, and third-party distributors.

These revenue contracts generally have a single performance obligation, and the Company recognizes revenue when such obligation is satisfied, as described below.

These revenue contracts generally have a single performance obligation.

Revenue, which includes shipping and handling charges billed to the customer, is reported net of variable consideration and consideration payable to customers, including applicable discounts, returns, allowances, trade promotion, consumer coupon redemption, unsaleable product, and other costs.

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The costs of these activities are recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure.

The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade or consumer.

The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade customer or consumer.

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

The Company has reserves in place of $ 25.7 million as of October 3, 2021 and $ 17.6 million as of January 3, 2021.

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

The Company has reserves in place of $ 26.3 million as of April 3, 2022 and $ 26.5 million as of January 2, 2022.

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

Business Combinations – The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

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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 US GAAP.

Distributor Buyouts - During the first fiscal quarter of 2022, we bought out and terminated the contracts of multiple third-party distributors who had previously been providing services to the Company.

These transactions were accounted for as contract terminations and resulted in expense of $ 23.0 million for thirteen weeks ended April 3, 2022, and are included within selling and distribution expense on the consolidated statement of operations and comprehensive loss.

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

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.

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.

Recently Issued Accounting Standards – In February 2016, the FASB issued ASU No.

2016-02, Leases (“Topic 842”), which requires a lessee to recognize in its balance sheet an asset and liability for most leases with a term greater than 12 months.

Lessees should recognize a liability to make lease payments and a right-of-use asset representing the lessee’s right to use the underlying asset for the lease term.

On June 3, 2020, the FASB deferred the effective date of ASC 842 for private or emerging growth companies to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

However, as discussed within Emerging Growth Company caption above, the Company will no longer be an emerging growth company commencing on the last day of fiscal year 2021.

Therefore, the Company will adopt this standard as of January 4, 2021 for the purposes of the Company’s financial statements for the twelve months ending January 2, 2022 included within Form 10-K.

The Company continues to plan for the adoption and implementation of this guidance, including the implementation of new leasing systems capable of producing the data to prepare the required accounting and disclosures under the new accounting standard.

The Company plans to elect the package of practical expedients, permitted under the transition guidance within the new standard, which among other things, allows for the carry forward of the historical classification of leases.

The Company will complete this project in the fourth quarter of 2021.

Management believes that there will be assets and liabilities recognized on the Company’s consolidated balance sheet and an immaterial impact on the Company’s consolidated statement of operations.

Recently Issued Accounting Standards – In December 2019, the FASB issued "ASU No.

2019-12, Income Taxes (Topic 740):

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

This Accounting Standards Update ("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.

For public business entities, ASU 2019-12 was effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted.

We adopted this standard upon the loss of our emerging growth status as of January 2, 2022.

Adoption of the new standard did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued "ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting".

This ASU provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate ("LIBOR") or another reference rate expected to be discontinued as a result of reference rate reform.

2020-04 is elective and effective as of March 12, 2020 through December 31, 2022.

Once elected, this ASU must be applied prospectively for all eligible contract modifications.

The Company will adopt this guidance when relevant contracts are modified upon transition to alternative reference rates.

The Company is currently evaluating the impact of the new standard on the Company’s consolidated financial statements and related disclosures.

In June 2016, ASU No.

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This ASU requires entities to measure the impairment of certain financial instruments, including accounts receivables, based on expected losses rather than incurred losses.

For public entities this ASU was effective for fiscal years beginning after December 15, 2019 and for non-public business entities or emerging growth companies, this ASU is effective for fiscal years beginning after December 15, 2022.

As noted, the Company will lose its status as an emerging growth company and as such will implement the adoption of this standard during the fourth quarter of fiscal 2021.

The Company is currently evaluating the impact of the new standard on the Company’s consolidated financial statements and related disclosures.

In December 2019, the FASB issued "ASU No.

2019-12, Income Taxes (Topic 740):

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.

For non-public business entities or emerging growth companies, ASU 2019-12 is effective for annual periods beginning after December 15, 2021 and interim periods within those annual periods, with early adoption permitted.

An entity that elects early adoption must adopt all the amendments in the same period.

Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

This ASU is effective for the Company for fiscal years beginning after December 15, 2022, with early adoption permitted, and will be effective for the Company beginning in 2023.

The Company is currently evaluating the impact of the new standard on the Company’s consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (“Topic 848”):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting.

The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022.

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

The adoptions of ASU No.

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

Utz Brands Holdings, LLC

On June 5, 2020, UBH entered into a definitive Business Combination Agreement with CCH and the Continuing Members.

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 consisting 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").

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.

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.

As a result of the Business Combination, the Company’s financial statement presentation distinguishes UBH as the “Predecessor” through the Closing Date.

The Company, which includes consolidation of UBH subsequent to the Business Combination, is the “Successor” for periods after the Closing Date.

As a result of the application of the acquisition method of accounting in the Successor period, the financial statements for the Successor period are presented on a full step-up basis as a result of the Business Combination, and are therefore not comparable to the financial statements of the Predecessor period that are not presented on the same full step-up basis due to the Business Combination.

The following table summarizes the total business enterprise value, comprised of the fair value of certain purchase consideration paid by the Company to the Continuing Members, the fair value of the noncontrolling interest and the fair value of certain net debt assumed by the Company at Closing:

(in thousands)

Total cash consideration $ 199,161

Tax Receivable Agreement obligations to the Continuing Members (1)

Replaced Awards (2)

Continuing Members’ Retained Restricted Units in UBH (3)

Total purchase consideration 289,705

Noncontrolling interest (4)

Net debt assumed 648,150

Total business enterprise value $ 1,834,556

(1) Under the terms of the TRA, the Company generally will be required to pay to the Continuing Members 85% of the applicable cash savings, if any, in U.S.

federal and state income tax based on its ownership in UBH that the Company is deemed to realize in certain circumstances as a result of the increases in tax basis and certain tax attributes resulting from the Business Combination.

The fair value of these contingent payments at the Closing was $ 25.3 million which has been recorded as a non-current accrued expense.

Refer to Note 14.

"Income Taxes" for additional information on the TRA.

(2) Represents the fair value of the Phantom Units associated with the pre-combination requisite service period and issued under the 2018 LTIP that were converted into 2020 LTIP RSUs of the Company issued under the 2020 LTIP at the Closing.

The difference between the fair value of the Phantom Units and the fair values of the 2020 LTIP RSUs represents the fair value of the compensation expenses for the post-combination requisite service period for the replacement awards.

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.

(3) A total of 3,483,022 Retained Restricted Units in UBH were received by the Continuing Members at the Closing.

These Retained Restricted Units were vested and converted to common limited liability company units of UBH at the Closing, as the vesting conditions were all met as of the Closing.

The fair value of the Retained Restricted Units was calculated based on the stock price of the Company on the Closing Date, less a 5 % lack of marketability discount due to a restriction on the exchange of the Continuing Members’ common limited liability company units to Class A Common Stock of the Company for a period not to exceed 12 months from the Closing Date.

(4) The noncontrolling interest represents the common limited liability company units of UBH held by the Continuing Members.

The fair value of these units was determined based on the Class A Common Stock price of the Company on the Closing Date, less a 5 % lack of marketability discount due to a restriction on the exchange of the Continuing Members’ common limited liability company units to Class A Common Stock of the Company for a period not to exceed 12 months from the Closing Date.

The following table summarizes the fair values of the assets acquired and liabilities assumed of UBH at Closing:

(in thousands)

Assets acquired:

Cash and cash equivalents $ 13,713

Accounts receivable 119,339

Inventory 63,862

Prepaid expenses and other assets 6,116

Notes receivable 29,453

Property, plant and equipment, net 269,951

Identifiable intangible assets (1)

Other assets 7,086

Total assets acquired:

Liabilities assumed:

Accounts payable 49,531

Accrued expenses 78,223

Notes payable 34,547

Deferred tax liability 25,381

Total liabilities assumed:

Net identifiable assets acquired 1,192,988

(1) The Company has determined that certain of the acquired trade names included in Intangible assets, net will be amortized over a period of 15 years, and the customer relationships asset will be amortized over a period of 25 years on a straight-line basis commensurate with the acquisition date expectations for the economic value (i.e.

net cash flow generating capability) that is to be provided by the trade names and customer relationships, respectively.

The fair values allocated to identifiable intangible assets and their estimated useful lives are as follows:

Fair Value Useful Life

(In Thousands) (In Years)

Indefinite lived trade names $ 355,500 Indefinite

Finite lived trade names 56,000 15

Customer relationships 443,500 25

Technology 43 5

Master distribution rights 2,221 15

Company owned routes 13,886 Indefinite

Total $ 871,150

(2) The goodwill of $ 641.6 million represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable intangible assets acquired.

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 UBH.

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

As of August 28, 2021, the purchase price allocation had 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 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.

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 $ 25.2 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, $ 1.9 million of other net assets, and $ 17.9 million to goodwill.

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

As of October 3, 2021, the purchase price allocation has been finalized.

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 $ 405.1 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.

As of February 8, 2022, the purchase price allocation had been finalized.

Festida Foods

On May 11, 2021, the Company announced that its subsidiary, UQF, entered into a definitive agreement with Great Lakes Festida Holdings, Inc.

to acquire all assets including real estate located in Grand Rapids, Michigan related to the operations of Festida Foods ("Festida Foods acquisition" or "acquisition 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 closed this transaction on June 7, 2021 and the purchase price of approximately $ 40.3 million was funded in part from incremental financing on an existing term loan.

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

1 unchanged sentence

Purchase consideration $ 40,324

Tax consideration (1)

Total consideration 408,749

Assets acquired:

Accounts receivable 2,776

Inventory, net 2,629

Inventory 2,704

Prepaid expenses and other assets 182

Property, plant and equipment 24,650

Other assets 1,219

Customer relationships 1,270

3 unchanged sentences

Accrued expenses 844

Other liabilities 26

Deferred tax liability 50,980

Total liabilities assumed:

Net identifiable assets acquired 28,721

(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 $ 3.7 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 $ 3.7 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 $ 214.9 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 October 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).

For the thirteen weeks ended October 3, 2021, Truco contributed revenues of $ 56.0 million and a net income of $ 5.8 million in the consolidated statement of operations and comprehensive income (loss).

For the thirty-nine weeks ended October 3, 2021, Truco contributed revenues of $ 152.9 million and net income of $ 6.8 million in the consolidated statement of operations and comprehensive income (loss).

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 $ 25.2 million was funded from current cash-on-hand.

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

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

Goodwill $ 11,603

The customer relationships are being amortized over a period of 10 years.

As of April 3, 2022, 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.

Festida Foods

On April 11, 2021, the Company announced that its subsidiary, UQF entered into a definitive agreement with Great Lakes Festida Holdings, Inc.

The Company closed this transaction on June 7, 2021 and the purchase price of approximately $ 40.3 million was funded in part from incremental financing on an existing term loan.

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

On November 2, 2021, the Company announced that its subsidiaries, entered into a definitive agreement to acquire the equity of R.W.

Garcia Holdings, LLC and its' wholly-owned subsidiary R.W.

Garcia Co., Inc.

("RW Garcia"), an artisan maker of high-quality organic tortilla chips, crackers, and corn chips ("RW Garcia acquisition").

The Company closed on this transaction on December 6, 2021, and the cash purchase price of approximately $ 57.8 million funded in part from a draw on the Company's line of credit and cash on hand.

In addition to this acquisition on December 6, 2021, the Company closed on an acquisition of a manufacturing facility of which RW Garcia was a tenant.

The cost of the manufacturing facility was approximately $ 6.0 million .

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

(in thousands)

Purchase consideration $ 56,430

Tax consideration 1,414

Total consideration 57,844

Assets acquired:

3 unchanged sentences

Property, plant and equipment 20,210

Trade name 3,100

Customer relationships 4,720

3 unchanged sentences

Accrued expenses 1,838

Deferred tax liability 6,140

Total liabilities assumed:

1 unchanged sentence

Goodwill $ 25,969

The customer relationships are being amortized over a period of 10 years.

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

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

As of April 3, 2022, 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.

1 unchanged sentence

(in thousands) As of

October 3, 2021

April 3, 2022

As of January 2, 2022

6 unchanged sentences

(in thousands) As of

October 3, 2021

April 3, 2022

As of January 2, 2022

8 unchanged sentences

Property, plant and equipment, net $ 298,656 $ 303,807

Depreciation expense was $ 11.5 million, $ 31.8 million, and $ 3.8 million for the thirteen and thirty-nine weeks ended October 3, 2021 (Successor) and for the Successor period from August 29, 2020 to September 27, 2020, respectively.

Depreciation expense was $ 4.8 million and $ 19.0 million for the predecessor periods from June 29, 2020 to August 28, 2020 and December 30, 2019 to August 28, 2020, 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).

Depreciation expense was $ 12.4 million and $ 9.9 million for the thirteen weeks ended April 3, 2022 and April 4, 2021, respectively.

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

GOODWILL AND INTANGIBLE ASSETS, NET

1 unchanged sentence

(in thousands)

Balance as of January 3, 2021 $ 862,183

Acquisition of Vitner's 17,880

Acquisition of Festida Foods 11,603

Acquisition adjustments ( 2,145 )

Balance as of October 3, 2021 $ 889,521

January 2, 2022 $ 915,438

RW Garcia acquisition adjustment 52

Balance as of April 3, 2022 $ 915,490

For the first fiscal quarter of 2022, the change to goodwill was attributable to the RW Garcia acquisition adjustment.

Intangible assets, net, consisted of the following:

(in thousands) As of

October 3, 2021

April 3, 2022

As of January 2, 2022

9 unchanged sentences

Trade names 434,513 434,513

IO routes 12,341 14,240

Route assets 8,316 9,176

Intangible assets, net $ 1,130,208 $ 1,142,509

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 during the first quarter of fiscal 2021.

Distributor/customer relationships increased by $ 1.5 million during the second quarter of fiscal 2021 due to the acquisition of Festida Foods.

Distributor/customer relationships decreased by $ 0.3 million during the third quarter of fiscal 2021 due to an acquisition adjustment for Festida Foods.

There were no other changes to intangible assets during the thirty-nine weeks ended October 3, 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 $ 8.9 million, $ 27.3 million, and $ 1.8 million for the thirteen and thirty-nine weeks ended October 3, 2021 (Successor) and for the Successor period from August 29, 2020 to September 27, 2020, respectively.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 1.3 million and $ 5.1 million for the predecessor periods from June 29, 2020 to August 28, 2020 and December 30, 2019 to August 28, 2020, respectively.

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

Previously, we were granted certain exclusive distribution rights for certain products manufactured by another manufacturer.

During the first fiscal quarter of 2022 we shifted our relationship with that manufacturer and worked with them to help convert that shelf space to Company-branded products.

As a result, we recorded impairment expense of $ 2.0 million and the amortizable master distribution rights decreased by $ 2.2 million.

There were no other significant changes to intangible assets during the thirteen weeks ended April 3, 2022 other than those which arise from the normal course of business of buying and selling of Company owned route assets and amortization.

Amortization of the distributor/customer relationships, technology, and trade names amounted to $ 9.4 million and $ 9.5 million for the thirteen weeks ended April 3, 2022 and April 4, 2021, respectively.

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

NOTES RECEIVABLE

2 unchanged sentences

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 October 3, 2021 and January 3, 2021 totaled $ 28.6 million and $ 27.1 million, respectively, and are collateralized by the routes for which the loans are made.

Of the balance at October 3, 2021 and January 3, 2021, $ 24.1 million and $ 23.1 million, respectively relates to corresponding notes payable, as discussed in further detail within Note 8.

The notes receivable balances due from IOs at April 3, 2022 and January 2, 2022 totaled $ 25.8 million and $ 27.2 million, respectively, and are collateralized by the routes for which the loans are made.

Of the balance at April 3, 2022 and January 2, 2022, $ 22.9 million and $ 24.8 million, respectively relates to corresponding notes payable, as discussed in further detail within Note 8.

"Long-Term Debt".

Other notes receivable totaled $ 0.2 million and $ 0.6 million as of October 3, 2021 and January 3, 2021, respectively.

Other notes receivable totaled $ 0.2 million and $ 0.2 million as of April 3, 2022 and January 2, 2022, respectively.

ACCRUED EXPENSES AND OTHER

Accrued expenses and other consisted of the following:

(in thousands) As of October 3, 2021 As of January 3, 2021

Current accrued expenses and other consisted of the following:

(in thousands) As of April 3, 2022 January 2, 2022

Accrued compensation and benefits $ 15,183 $ 20,081

Right-of-use liability 10,742 9,152

Accrued freight and manufacturing related costs 8,817 8,928

Insurance liabilities 7,779 8,620

Short term interest rate hedge liability 3,016 3,048

Acquisition tax consideration 1,594 5,660

Accrued interest 494 371

Short term interest rate hedge liability 150 4,548

Accrued dividends — 4,189

Accrued sales tax — 1,300

Truco acquisition tax consideration 3,668 4,468

Accrued distributions 3,829 4,261

Other accrued expenses 8,597 8,431

1 unchanged sentence

Non-current accrued expenses and other consisted of the following:

(in thousands) As of October 3, 2021 As of January 3, 2021

TRA liability

(in thousands) As of April 3, 2022 As of January 2, 2022

Right-of-use liability $ 24,445 $ 23,226

Tax Receivable Agreement liability

24,336 24,443

Supplemental retirement and salary continuation plans 7,245 8,117

Long term portion of an interest rate hedge liability — 2,082

Other long term accrued expenses 83 52

2 unchanged sentences

Revolving Credit Facility

On November 21, 2017, UBH entered into an asset based revolving credit facility (as amended, the “ABL facility”) in an initial aggregate principal amount of $ 100.0 million.

The ABL facility was set to expire on the fifth anniversary of closing, or November 21, 2022.

On November 21, 2017, UBH entered into an asset based revolving credit facility (as amended, the "ABL facility"), pursuant to the terms of that certain First Lien Term Loan Credit Agreement, dated November 21, 2017 (the "Credit Agreement").

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.

On December 18, 2020, the ABL facility was amended to increase the credit limit up to $ 161.0 million.

No amounts were outstanding under this facility as of October 3, 2021 and 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 and amounts borrowed.

As of October 3, 2021 and January 3, 2021, $ 133.2 million and $ 106.4 million, respectively, was available for borrowing, net of letters of credit.

As of April 3, 2022 and January 2, 2022, $ 56.0 million and $ 36.0 million, respectively, were outstanding under this facility.

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 April 3, 2022 and January 2, 2022, $ 80.8 million and $ 96.9 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 %).

Had the Company elected to use the Prime rate, the interest rate on the facility as of October 3, 2021 and September 27, 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 October 3, 2021 was 1.58 %.

Had there been outstanding balances and the Company elected to use the LIBOR rate as of September 27, 2020, the interest rate would have been 1.68 %.

The ABL facility is also subject to unused line fees ( 0.5 % at October 3, 2021) and other fees and expenses.

Standby letters of credit in the amount of $ 11.6 million and $ 14.1 million have been issued as of October 3, 2021 and January 3, 2021, respectively.

Had the Company elected to use the Prime rate, the interest rate on the facility as of April 3, 2022 and April 4, 2021, would have been 3.75 %.

The Company elected to use the LIBOR rate, the interest rate on the ABL facility as of April 3, 2022 was 1.95 %.

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

The ABL facility is also subject to unused line fees ( 0.5 % at April 3, 2022) and other fees and expenses.

Standby letters of credit in the amount of $ 10.3 million have been issued as of April 3, 2022 and January 2, 2022.

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

On November 21, 2017, the Company entered into a First Lien Term Loan Credit Agreement (the “First Lien Term Loan”) in a principal amount of $ 535.0 million and a Second Lien Term Loan Credit Agreement (the “Second Lien Term Loan”, and collectively with the First Lien Term Loan, the “Term Loans”) in a principal amount of $ 125.0 million.

The proceeds of the Term Loans were used to refinance the Company’s January 2017 credit facility and fund the acquisition of Inventure Foods and the repurchase of the predecessor membership units held by a minority investor.

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.

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 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.

Finance fees allocated to the First Lien Term Loan and the Second Lien Term Loan were $ 10.7 million and $ 4.1 million, respectively, which were presented net within “non-current portion of debt” on the consolidated balance sheets for the predecessor periods.

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".

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.

Proceeds from the Secured First Lien Note were used primarily to finance the Kennedy acquisition.

The Secured First Lien Note requires quarterly interest payments, with a repayment of principal on the maturity date of November 21, 2024.

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

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 base rate of 4.25 % plus 1 month LIBOR with scheduled incremental increases to the base rate, as defined in the Bridge Credit Agreement.

("Truco" and such acquisition, the "Truco Acquisition") and purchase and acquisition of certain intellectual property from OTB Acquisition, LLC (the "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.

Commitment fees and deferred financing costs on the Bridge Credit Agreement totaled $ 7.2 million, of which $ 2.6 million was expended in the thirteen weeks ended April 4, 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 and the Bridge Credit Agreement was terminated.

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.

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

The interest rate on Term Loan B was 3.08 % as of October 3, 2021.

On June 22, 2021, the Company entered into Amendment No.

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Pursuant to the terms of Amendment No.

3, the Company increased the principal balance of Term Loan B by $ 75.0 million to bring the aggregated balance of Term Loan B proceeds to $ 795.0 million, of which $ 789.1 million remains outstanding as of October 3, 2021.

3, the Company increased the principal balance of Term Loan B by $ 75.0 million to bring the aggregated balance of Term Loan B proceeds to $ 795.0 million.

The Company incurred additional debt issuance costs and original issuance discounts of $ 0.7 million related to the incremental funding.

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 of UBH and its subsidiaries, including equity interests in certain of UBH’s subsidiaries.

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

UBH and its subsidiaries were in compliance with its financial covenant as of October 3, 2021.

On July 2, 2021, the Company entered into an agreement with Banc of America Leasing & Capital, LLC, whereby the Company agreed to sell and lease-back certain manufacturing equipment and warehouse/distribution equipment for $ 13.0 million.

This was accounted for as a financing transaction.

The terms of the sale leaseback transaction are for 60 months at an interest rate of 3.26 %.

On July 28, 2021, the Company entered into an agreement with Banc of America Leasing & Capital, LLC, whereby the Company amended a master lease agreement to draw up to $ 19.0 million on new capital improvement projects.

During the thirteen weeks ended October 3, 2021 the Company has drawn $ 9.8 million related to certain manufacturing equipment and warehouse/distribution equipment.

This was accounted for as a financing transaction, and bears interest at the Bloomberg Short-Term Bank Yield index plus 1.75 %.

Only interest is due on these loans until the capital projects are completed.

The outstanding principal balance as of October 3, 2021 related to the equipment financing transactions above is $ 22.8 million.

Amounts outstanding under term debt and financing obligations consisted of the following:

(in thousands) As of October 3, 2021 As of January 3, 2021

Term debt $ 789,142 $ 410,000

Bridge credit agreement — 370,000

Equipment financing arrangements 22,904 1,108

Deferred financing fees ( 8,350 ) ( 2,639 )

Total term debt and financing obligations 803,696 778,469

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 April 3, 2022.

Debt (in thousands)

Issue Date Principal Balance Interest Rate Maturity Date April 3, 2022 January 2, 2022

Term loan B June-21 $ 795,000 3.21 % January-28 $ 785,248 $ 787,236

Equipment loans 30,476 26,655

Revolving credit facility 56,000 36,000

Net impact of debt issuance costs and original issue discounts ( 7,588 ) ( 7,929 )

Total long-term debt 864,136 841,962

current portion ( 11,414 ) ( 11,414 )

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Other Notes Payable and Capital Leases

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 was outstanding as of October 3, 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 was outstanding as of October 3, 2021 and January 3, 2021, respectively.

During the third quarter of 2021, the Company recorded liabilities related primarily to reclaiming distribution rights from distributors, of which $ 2.8 million was outstanding as of October 3, 2021.

During the first fiscal quarter of 2022, we bought out and terminated the contracts of multiple distributors who had previously been providing services to the Company.

These transactions were accounted for as contract terminations and resulted in expense of $ 23.0 million for the thirteen weeks ended April 3, 2022.

As a condition of our buyout of distributors an additional $ 4.1 million is expected to be paid out and is included in other in the table below.

During the third quarter of 2021, the Company recorded liabilities related primarily to reclaiming distribution rights from distributors, of which $ 1.3 million was outstanding as of April 3, 2022 and January 2, 2022, respectively.

During the first fiscal quarter of 2020, the Company purchased intellectual property that include a deferred purchase price of $ 0.5 million, of which $ 0.3 million is outstanding as of April 3, 2022 and January 2, 2022, respectively.

Amounts outstanding under notes payable consisted of the following:

(in thousands) As of

October 3, 2021

April 3, 2022

As of January 2, 2022

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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.

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.

During the second quarter of fiscal 2021, the Company sold an additional $ 5.6 million of notes receivable from IOs on its books for $ 5.8 million to a financial institution.

Due to the structure of the transactions, the sales 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 fiscal 2021, the Company sold an additional $ 11.8 million of notes receivable from IOs on its books for $ 12.5 million in a series of transactions to a financial institution.

Due to the structure of the transactions, they 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.

The Company services the loans for the financial institution by collecting principal and interest from the IOs and passing it through to the institution.

The underlying notes have various maturity dates through December 2028.

The underlying notes have various maturity dates through March 2032.

The Company partially guarantees the outstanding loans, as discussed in further detail within Note 11.

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

Interest expense for the thirteen weeks ended October 3, 2021 (Successor) was $ 7.7 million, $ 7.0 million of which was related to the Company’s credit facility and other long-term debt, of which $ 0.3 million was related to amortization of deferred financing fees, and $ 0.4 million of which was related to IO loans.

Interest expense for the thirty-nine weeks ended October 3, 2021 (Successor) was $ 26.5 million, $ 21.9 million of which was related to the Company’s credit facility and other long-term debt, of which $ 3.5 million was related to amortization of deferred financing fees, and $ 1.1 million of which was related to IO loans.

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 28, 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 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.

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

Interest Expense

Interest expense consisted of the following:

(in thousands) Thirteen weeks ended April 3, 2022 Thirteen weeks ended April 4, 2021

Company’s ABL facility and other long-term debt $ 8,331 $ 7,574

Amortization of deferred financing fees 341 2,870

IO loans 431 417

Total interest $ 9,103 $ 10,861

DERIVATIVE FINANCIAL INSTRUMENTS AND PURCHASE COMMITMENTS

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Both the fixed and floating payment streams are based on a notional amount of $ 250 million.

On December 21, 2021, with an effective date of December 31, 2021, the Company entered into an accreting interest rate swap contract with a counter party to make a series of payments based on a fixed interest rate of 1.3885 % and receive a series of payments based on the greater of LIBOR or 0.00 %.

Both the fixed and floating payment streams are based on a notional amount of $ 250 million, accreting to $ 500 million and maturing on September 30, 2026.

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 October 3, 2021, the effective fixed interest rate on the long-term debt hedged by this contract was 3.48 %.

At April 3, 2022, the effective fixed interest rate on the long-term debt hedged by these contracts was 3.94 %.

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

Fair Value Measurements" and "Note 12.

"Accumulated Other Comprehensive Income (Loss)."

Accumulated Other Comprehensive Income."

Warrant Liabilities

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"Warrants" for additional information on our warrant liabilities.

A reconciliation of the changes in the warrant liability during the thirty-nine weeks ended October 3, 2021 (Successor) is as follows:

A reconciliation of the changes in the warrant liability during the thirteen weeks ended April 3, 2022 is as follows:

(in thousands)

Fair value of warrant liabilities as of January 2, 2022 $ 46,224

Loss on remeasurement of warrant liability 2,133

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

Fair value of warrant liabilities as of July 4, 2021 85,032

Gain on remeasurement of warrant liability ( 1,944 )

Fair value of warrant liabilities as of October 3, 2021 $ 48,744

Fair value of warrant liabilities as of April 3, 2022 $ 44,280

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 $ 44.8 million as of October 3, 2021.

The Company has recorded purchase commitment gain (losses) totaling $ 0.1 million, $ 0.1 million and $ 0.2 million for the thirteen and thirty-nine weeks ended October 3, 2021 (Successor) and for the Successor period from August 29, 2020 to September 27, 2020, respectively.

The Company has recorded purchase commitment gain (losses) totaling $ 0.3 million and $( 0.7 ) million for the predecessor periods from June 29, 2020 to August 28, 2020 and December 30, 2019 to August 28, 2020, respectively.

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 $ 46.3 million as of April 3, 2022.

The Company accrues for losses on firm purchase commitments in a loss position at the end of each reporting period to the extent that there is an active observable market.

The Company has recorded purchase commitment losses totaling $ 0.0 million for the thirteen weeks ended April 3, 2022 and April 4, 2021 .

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 October 3, 2021:

(in thousands) Level I Level II Level III Total

Cash and cash equivalents $ 14,899 $ — $ — $ 14,899

Interest rate swaps — 25,593 — 25,593

Total assets $ 14,899 $ 25,593 $ — $ 40,492

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Cash and cash equivalents $ 41,898 $ — $ — $ 41,898

Interest rate swaps — 2,208 — 2,208

Total assets $ 41,898 $ 2,208 $ — $ 44,106

1 unchanged sentence

Interest rate swaps — 4,600 — 4,600

Public warrants 52,580 — — 52,580

Private placement warrants — 46,224 — 46,224

5 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 October 3, 2021 and January 3, 2021, the Company had a reserve of $ 1.3 million, to cover the assessment.

As of January 2, 2022, the Company had a reserve of $ 1.3 million to cover the assessment.

On January 7, 2022, the Company settled the audit with the Commonwealth of Pennsylvania for $ 0.9 million.

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

The outstanding balance of loans guaranteed was $ 2.5 million and $ 4.1 million at October 3, 2021 and January 3, 2021, respectively, all of which was recorded by the Company as an off balance sheet arrangement.

The outstanding balance of loans guaranteed was $ 2.0 million and $ 2.2 million at April 3, 2022 and January 2, 2022, 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 $ 13.1 million and $ 7.1 million at October 3, 2021 and January 3, 2021, respectively, which are off balance sheet.

The outstanding balance of loans guaranteed that were issued by Bank of America was $ 22.2 million and $ 18.6 million at April 3, 2022 and January 2, 2022, 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 and fiscal 2021, which the Company partially guarantees.

The outstanding balance of notes purchased by Bank of America at October 3, 2021 and January 3, 2021 was $ 18.7 million and $ 16.5 million, respectively.

Due to the structure of the transactions, the sales 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 outstanding balance of notes purchased by Bank of America at April 3, 2022 and January 2, 2022 was $ 18.5 million and $ 19.7 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.

4 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 $ 5.4 million and $ 6.6 million at October 3, 2021 and January 3, 2021, respectively, which are included in the notes payable and notes receivable sections of the Company's consolidated balance sheets.

The outstanding balance of loans guaranteed was $ 4.4 million and $ 4.9 million at April 3, 2022 and January 2, 2022, respectively, all of which were included included in 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.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Total accumulated other comprehensive income (loss) was $ 3.0 million as of October 3, 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 October 3, 2021 and September 27, 2020, changes to the balance in accumulated other comprehensive income (loss) were as follows:

ACCUMULATED OTHER COMPREHENSIVE INCOME

Total accumulated other comprehensive income was $ 31.5 million as of April 3, 2022 and $ 3.7 million as of January 2, 2022.

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

Changes to the balance in accumulated other comprehensive income were as follows:

(in thousands) Gain on

Cash Flow Hedges

Balance as of August 29, 2020 $ —

Unrealized gain on cash flow hedges 252

Balance as of September 27, 2020 $ 252

Balance as of January 3, 2021 $ 924

Unrealized gain on cash flow hedges 822

Balance as of July 4, 2021 2,353

Unrealized gain on cash flow hedges 686

Balance as of October 3, 2021 $ 3,039

(in thousands) (Loss)/Gain on

Cash Flow Hedges

Balance as of December 29, 2019 $ 1,408

Unrealized loss on cash flow hedges ( 7,917 )

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

Balance as of April 4, 2021 $ 1,746

Balance as of January 2, 2022 $ 3,715

Unrealized gain on cash flow hedges 27,809

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

Balance as of April 3, 2022 $ 31,524

SUPPLEMENTARY CASH FLOW INFORMATION

Cash paid for interest was $ 23.5 million, $ 1.6 million and $ 28.8 million for the thirty-nine weeks ended October 3, 2021 (Successor), for the successor period August 29, 2020 to September 27, 2020, and the predecessor period December 30, 2019 to August 28, 2020, respectively.

Refunds related to income related taxes were $ 0.2 million, $ 0.0 million and $ 0.2 million for the thirty-nine weeks ended October 3, 2021 (Successor), for the successor period August 29, 2020 to September 27, 2020, and the predecessor period December 30, 2019 to August 28, 2020, respectively.

Payments made for income-related taxes were $ 3.3 million, $ 0.3 million and $ 0.5 million for the thirty-nine weeks ended October 3, 2021 (Successor), for the successor period August 29, 2020 to September 27, 2020, and the predecessor period December 30, 2019 to August 28, 2020, respectively.

Dividends paid during the thirty-nine weeks ended October 3, 2021 (Successor) were $ 11.9 million, of which $ 4.3 million was included within the "accrued expense and other" of the consolidated balance sheet as of January 3, 2021.

There were accrued dividends as of October 3, 2021 of $ 3.8 million.

(in thousands) Thirteen weeks ended April 3, 2022 Thirteen weeks ended April 4, 2021

Cash paid for interest $ 9,627 $ 9,787

Refunds related to income taxes $ 4,075 $ 182

Payments for income taxes $ 107 $ —

Dividends paid $ 4,189 $ 4,261

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.

5 unchanged sentences

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

The Company recorded income tax expense for the thirteen and thirty-nine week periods ended October 3, 2021 (Successor) of $ 0.8 million and $ 2.3 million, respectively.

Comparably, the Company recorded income tax expense and (benefit) for the periods August 29, 2020 through September 27, 2020 (Successor) and June 29, 2020 through August 28, 2020 (Predecessor) of $( 2.9 ) million and $ 1.3 million, respectively.

The Company recorded income tax expense for the period December 30, 2019 through August 28, 2020 (Predecessor) of $ 4.0 million.

The effective tax rates for the thirteen and thirty-nine week periods ended October 3, 2021 (Successor) were 2.6 % and 8.5 %, respectively.

Comparably, the effective tax rates for the periods August 29, 2020 through September 27, 2020 (Successor) and June 29, 2020 through August 28, 2020 (Predecessor) were 12.4 % and ( 38.6 )%, respectively.

The effective tax rate for the period December 30, 2019 through August 28, 2020 (Predecessor) was 53.7 %.

The Company recorded income tax expense of $ 2.8 million and $ 1.0 million for the thirteen weeks ended April 3, 2022 and April 4, 2021, respectively.

The effective tax rates for the thirteen weeks ended April 3, 2022 and April 4, 2021 were ( 9.5 )% and ( 4.5 )%, 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 rates for the thirteen and thirty-nine week periods ended October 3, 2021 (Successor) are ( 39.8 )% and ( 23.7 )%, respectively, before consideration of any discrete items.

During the thirteen and thirty-nine week periods ended October 3, 2021 (Successor), the effective tax rate was impacted by return to provision items and statutory state tax rate changes which resulted in a discrete tax expense and (benefit) of $( 0.8 ) million and $ 0.4 million, respectively.

The Company’s effective tax rate for the thirteen weeks ended April 3, 2022 is ( 7.2 )% before consideration of any discrete items.

During the thirteen weeks ended April 3, 2022, the effective tax rate was impacted by statutory state tax rate changes which resulted in a discrete tax expense of $ 0.5 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 October 3, 2021, a significant piece of objective negative evidence evaluated was the twelve-quarter cumulative loss before taxes.

As of April 3, 2022, 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 UBH 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 October 3, 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.

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

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

The Company has DTA’s related to its investment in partnership that are expected to be realized in the ordinary course of operations or generate future net operating losses for which a portion will have an indefinite carryforward period.

Additionally, the Company has deferred tax liabilities ("DTL’s") related to its investment in the partnership that will not reverse in the ordinary course of business and will only reverse when the partnership is sold or liquidated.

The Company has no intention of disposing of or liquidating the partnership and therefore has not considered the indefinite lived DTL as a source of income to offset other DTA’s.

In weighing positive and negative evidence, both objective and subjective, including its twelve-quarter cumulative loss, the Company has recorded a valuation allowance against its DTA’s related to net operating losses and deductible book/tax differences and recorded a DTL primarily related to the book over tax basis in the investment in the partnership that will not reverse in the ordinary course of operations.

The Company considered that an indefinite lived DTL may be considered as a source of taxable income for an indefinite lived DTA;

however, given our indefinite lived DTL will only reverse upon sale or liquidation, the Company determined that it was more appropriate to record a valuation allowance against its DTA’s.

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 3, 2022, tax years 2018 through 2022 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 2017 through 2022 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.

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 October 3, 2021 and January 3, 2021, respectively.

The Company did not maintain any unrecognized tax benefits as of April 3, 2022 and January 2, 2022.

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 UPA Seller and purchased UBH units from the Continuing Members in connection with the Business Combination.

Following the Business Combination, the Continuing Members may exchange UBH units (along with the forfeiture of a corresponding number of Class V Common Stock of the Company for Class A Common Stock of the Company).

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 third party members of UBH 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.

The Company intends to treat any such exchanges as direct purchases for U.S.

2 unchanged sentences

They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

Pursuant to the Business Combination Agreement, the Company entered into the TRA, which provides for the payment by the Company of 85% of the amount of any tax benefits realized as a result of (i) increases in the share of the tax basis in the net assets of UBH resulting from the Business Combination and any future exchanges by the Continuing Members of UBH units (along with the forfeiture of a corresponding number of Class V Common Stock of the Company for Class A Common Stock of the Company);

Pursuant to the Business Combination Agreement, the Company entered into the Tax Receivable Agreement in connection with the Business Combination (the "Tax Receivable Agreement" or "TRA") , which provides for the payment by the Company of 85% of the amount of any tax benefits realized as a result of (i) increases in the share of the tax basis in the net assets of UBH resulting from the Business Combination and any future exchanges by the Continuing Members of UBH units for UBI common stock;

(ii) tax basis increases attributable to payments made under the TRA;

and (iii) tax amortization deductions attributable to the acquisition of Kennedy and the election to treat the transaction as an asset deal for tax purposes (the "TRA Payments").

and (iii) tax amortization deductions attributable to the acquisition of Kennedy Endeavors, LLC and the election to treat the transaction as an asset deal for tax purposes (the "TRA Payments").

The rights of each party under the TRA other than the Company are assignable, subject to certain restrictions.

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 October 3, 2021 and January 3, 2021, the Company had a liability of $ 25.3 million and $ 28.7 million, respectively, related to its projected obligations under the TRA, which is reflected as a non-current accrued expense in the consolidated balance sheets.

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 October 3, 2021 As of January 3, 2021

Leases $ 9,285 $ 9,335

accumulated depreciation 2,469 526

Leases, net $ 6,816 $ 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 totaled $ 4.6 million, $ 10.2 million, and $ 0.9 million for the thirteen and thirty-nine weeks ended October 3, 2021 (Successor) and for the Successor period from August 29, 2020 to September 27, 2020, respectively.

Rental expense for leases to third parties totaled $ 2.0 million and $ 7.7 million for the predecessor periods from June 29, 2020 to August 28, 2020 and December 30, 2019 to August 28, 2020, respectively.

Future minimum payments by year and in the aggregate, consisted of the following at October 3, 2021:

(in thousands)

2021 Remaining $ 3,446

Thereafter 6,939

Total $ 46,824

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 with the Sponsor and each of 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 of April 3, 2022 and January 2, 2022, the Company had a liability of $ 24.5 million and $ 24.6 million, respectively, related to its projected obligations under the TRA, which is reflected as a non-current accrued expense in the consolidated balance sheet.

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.

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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 October 3, 2021, there were 7,200,000 Private Placement Warrants outstanding.and all Public Warrants and Forward Purchase Warrants have been exercised (except for the Public Warrants that were redeemed by the Company on January 14, 2021).

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.

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

As of April 3, 2022 and January 2, 2022, there were 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.

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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 gain (loss) of $ 36.3 million, $ 34.2 million, and $( 18.0 ) million for the thirteen and thirty-nine weeks ended October 3, 2021 (Successor) and for the Successor period from August 29, 2020 to September 27, 2020, respectively.

Such gain (loss) is not attributable to the noncontrolling interest.

The Predecessor did not have warrants and as such no remeasurement of warrant liability is recorded for the predecessor periods from June 29, 2020 to August 28, 2020 and December 30, 2019 to August 28, 2020, respectively.

The remeasurement of the warrant liability resulted in a gain (loss) of $ 1.9 million and $( 21.5 ) million for the thirteen weeks ended April 3, 2022 and April 4, 2021, respectively.

BUSINESS RISK

The novel coronavirus, or COVID-19, outbreak began to impact consumption, distribution and production of the Company’s products in March 2020.

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

The novel coronavirus, or COVID-19, outbreak began impacting consumption, distribution and production of our products in March 2020.

We have taken necessary preventive actions and implemented additional measures to protect our employees that work on site.

We continue to experience higher demand for our products compared to historical volumes, 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 continues to monitor customer and consumer demands, and intends to adapt its plans as needed to continue to meet these demands.

The event is still ongoing, and the Company continues to evaluate the financial impact of COVID-19 and potential vaccine mandates.

Our strategic manufacturing capabilities and DSD distribution network have allowed us to effectively service increases in demand and be responsive to evolving market dynamics driven by changes in consumer behavior.

During this time we experienced significant inflationary pressures on input and supply chain costs.

We continue to monitor these pressures and have implemented some pricing actions in response.

Additionally, we continue to monitor customer and consumer demands and stand ready to adapt our plans to meet changes in demand.

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 77,570,422 and 71,094,714 shares of UBI were issued and outstanding on October 3, 2021 and January 3, 2021, respectively.

The Company is authorized to issue 1,000,000,000 shares of Class A Common Stock, par value $ 0.0001 per share, of which 78,597,175 and 77,644,645 shares of UBI were issued and outstanding on April 3, 2022 and January 2, 2022, 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.

Class V Common Stock

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 ("Common Company Units") 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”.

As of October 3, 2021 and January 3, 2021, there were 59,349,000 and 60,349,000 , respectively, of shares of Class V Common Stock outstanding.

On September 21, 2021, the Continuing Members exchanged 1,000,000 Common Company Units together with the surrender and cancellation of the same number of Class V Common Stock for an equal number of shares of Class A Common Stock.

The Company did not receive any proceeds as a result of this exchange.

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, 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 of April 3, 2022 and January 2, 2022, there were 59,349,000 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 and each of the 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 (excluding proceeds paid upon exercise of the Forward Purchase Warrants).

EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding during the Successor period.

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 stock-based awards outstanding during the Successor period.

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.

Therefore, EPS information is omitted for the Predecessor periods.

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 (LOSS) PER SHARE

Basic earnings (loss) per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding during the periods.

Diluted earnings (loss) 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 periods.

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) Thirteen weeks ended October 3, 2021 Thirty-nine weeks ended October 3, 2021

Basic earnings per share:

Net income attributable to controlling interest $ 33,252 $ 28,302

Dividends and income related to participating stock-based compensation awards ( 601 ) ( 525 )

Net income attributable to common stockholders $ 32,651 $ 27,777

Weighted average Class A Common Stock shares, basic 76,713,241 76,380,244

Basic earnings per share $ 0.43 $ 0.36

Diluted earnings per share:

Net income attributable to common stockholders $ 33,252 $ 28,302

Dividends and income related to participating stock-based compensation awards ( 601 ) ( 525 )

Net income attributable to common stockholders $ 32,651 $ 27,777

Weighted average Class A Common Stock shares, basic 76,713,241 76,380,244

Dilutive securities included in diluted earnings per share calculation:

Warrants 3,100,280 3,618,794

RSUs 1,058,087 1,024,192

PSUs 33,605 34,247

Stock options 1,405 24,700

Total diluted weighted average shares 80,906,618 81,082,177

Diluted earnings per share $ 0.40 $ 0.34

Class V Common Stock not subject to earnings per share calculation 60,206,143 60,301,381

Net loss attributable to noncontrolling interest $ 1,902 $ 4,122

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

(in thousands, except share data) Thirteen weeks ended April 3, 2022 Thirteen weeks ended April 4, 2021

Basic and diluted earnings per share:

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Weighted average Class A Common Stock shares, basic 78,572,404 75,927,005

Basic and diluted earnings per share $ ( 0.31 )

Basic and diluted earnings (loss) per share $ ( 0.22 ) $ ( 0.30 )

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

Warrants 1,901,376 4,092,590

RSUs 57,914 1,365,291

PSUs 40,545 142,541

Stock options — 93,211

Total weighted average anti-dilutive shares 8,902,880

Total 1,999,835 5,693,633

Class V Common Stock not subject to earnings per share calculation 59,349,000 60,349,000

Net loss attributable to noncontrolling interest $ ( 14,328 ) $ ( 820 )

The diluted earnings per share computation for the for the Successor period from August 29, 2020 to September 27, 2020 excludes the effect of certain RSUs granted to Directors and Management which convert to Class A Common Stock upon vesting 50 % at December 31, 2022 and 50 % at December 31, 2023, as their inclusion would have been anti-dilutive.

The diluted earnings (loss) per share computation excludes the effect of certain RSUs, PSUs, and stock options granted to Directors and Management which convert to Class A Common Stock upon vesting, as their inclusion would have been anti-dilutive if the Company had positive earnings.

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 stock-based compensation awards participated in earnings or losses of the Company for the Successor period from August 29, 2020 to September 27, 2020 .

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

At October 3, 2021, the Continuing Members held 59,349,000 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 PSUs, RSUs, and 2020 LTIP RSUs were participating securities in the periods because the holders of these stock-based compensation awards are entitled to participate in dividends declared on Class A Common Stock, if and when declared, on a one-to-one per-share basis.

As such, earnings per share calculations were completed under the two-class method.

As of April 3, 2022 and January 2, 2022, the Continuing Members held 59,349,000 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 $ 14.3 million and $ 0.8 million for thirteen weeks ended April 3, 2022 and April 4, 2021, respectively.

SUBSEQUENT EVENTS

On November 2, 2021, the Company announced that its subsidiaries, entered into a definitive agreement with R.W.

Garcia Holdings, LLC and related entities ("RW Garcia") to acquire equity and certain real estate assets related to the operation of RW Garcia., an artisan maker of high-quality organic tortilla chips, crackers, and corn chips.

The Company expects to close on the deal in the fourth quarter of 2021, with the purchase price of approximately $ 56.0 million.

The Company anticipates funding the acquisition using cash on hand as well as utilizing the ABL facility.

On April 7, 2022, our Board of Directors declared a cash dividend of $ 0.054 per share on our Class A Common Stock, to the stockholders of record on April 18, 2022.

Total dividend payment of $ 4.2 million was executed on April 28, 2022.

On April 28, 2022, the Company purchased a brand new, recently completed snack food manufacturing facility in Kings Mountain, North Carolina from Evans Food Group Ltd.

d/b/a Benestar Brands and related affiliates.

The total purchase price of the facility was approximately $ 38.4 million, plus assumed liabilities of $ 1.3 million, and was funded with approximately $ 10.4 million in cash and $ 28.0 million of proceeds from the issuance and sale of 2.1 million shares of the Company’s Class A Common Stock to affiliates of Benestar in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

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