Hagerty Inc
For the period ended Dec 31, 2023. Filed Mar 12, 2024.
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FY2023 · Filed Mar 12, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Schedule I: Condensed Financial Information of Registrant Parent Company
Condensed Statement of Operations (Parent Company Only)
| Year Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| OPERATING EXPENSES: · (in thousands) | |||
| Sales expense | $7 | $14 | $— |
| General and administrative services | 791 | 1,018 | 43 |
| Total operating expenses | 798 | 1,032 | 43 |
| OPERATING LOSS | (798) | (1,032) | (43) |
| Change in fair value of warrant liabilities | 11,543 | 41,899 | (42,540) |
| Interest and other income (expense) | 2,788 | 529 | — |
| Intercompany dividend income (1) | 3,677 | — | — |
| INCOME (LOSS) BEFORE INCOME TAX EXPENSE | 17,210 | 41,396 | (42,583) |
| Income tax expense | — | (3) | — |
| Equity earnings (loss) in subsidiaries, net of tax | 10,969 | (38,990) | (18,771) |
| NET INCOME (LOSS) | 28,179 | 2,403 | (61,354) |
| Net (income) loss attributable to non-controlling interest | (7,948) | 29,675 | 398 |
| Net loss attributable to redeemable non-controlling interest | — | — | 14,598 |
| Accretion of Series A Convertible Preferred Stock | (3,677) | — | — |
| NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS | $16,554 | $32,078 | $(46,358) |
Condensed Balance Sheets (Parent Company Only)
| December 31, | ||
|---|---|---|
| 2023 | 2022 | |
| ASSETS | in thousands (except share amounts) | |
| Current Assets: | ||
| Cash and cash equivalents | $604 | $24,177 |
| Other current assets | 549 | 514 |
| Total current assets | 1,153 | 24,691 |
| Other long-term assets | 1,498 | 2,011 |
| Investment in subsidiaries (1) | 526,130 | 395,580 |
| TOTAL ASSETS | $528,781 | $422,282 |
| LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities: | ||
| Accounts payable, accrued expenses and other current liabilities | $— | $30 |
| Intercompany payable (1) | 846 | 6,114 |
| Total current liabilities | 846 | 6,144 |
| Warrant liabilities | 34,018 | 45,561 |
| Other long-term liabilities | 572 | 3,208 |
| TOTAL LIABILITIES | 35,436 | 54,913 |
| TEMPORARY EQUITY | ||
| Preferred Stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible Preferred Stock issued and outstanding as of December 31, 2023 and no shares issued and outstanding as of December 31, 2022) | 82,836 | — |
| STOCKHOLDERS' EQUITY | ||
| Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 84,588,536 and 83,202,969 issued and outstanding as of December 31, 2023 and December 31, 2022, respectively) | 8 | 8 |
| Class V Common Stock, $0.0001 par value (300,000,000 authorized, 251,033,906 shares issued and outstanding as of December 31, 2023 and December 31, 2022) | 25 | 25 |
| Additional paid-in capital | 561,754 | 549,034 |
| Accumulated deficit | (468,995) | (489,602) |
| Accumulated other comprehensive income (loss) | (88) | (213) |
| Total stockholders' equity | 92,704 | 59,252 |
| Non-controlling interest | 317,805 | 308,117 |
| Total equity | 410,509 | 367,369 |
| TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY | $528,781 | $422,282 |
Condensed Statements of Cash Flows (Parent Company Only)
| Year Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| OPERATING ACTIVITIES: | |||
| Net income (loss) | $28,179 | $2,403 | $(61,354) |
| Adjustments to reconcile net income (loss) to net cash from operating activities: | |||
| Equity in undistributed income (loss) of subsidiaries | (14,646) | 38,990 | 18,771 |
| Change in fair value of warrant liabilities | (11,543) | (41,899) | 42,540 |
| Other | (2,636) | (300) | — |
| Changes in operating assets and liabilities: | |||
| Prepaid expenses and other assets | 478 | 513 | (3,038) |
| Intercompany payable (1) | — | 1,616 | (1,334) |
| Accounts payable and accrued expenses | (32) | (50) | 140 |
| Net Cash Used in Operating Activities | (200) | 1,273 | (4,275) |
| INVESTING ACTIVITIES: | |||
| Investment in subsidiaries (1) | (102,635) | (30,000) | (210,179) |
| Net Cash Used in Investing Activities | (102,635) | (30,000) | (210,179) |
| FINANCING ACTIVITIES: | |||
| Proceeds from issuance of preferred stock, net of issuance costs | 79,262 | — | — |
| Cash received in Business Combination | — | — | 789,661 |
| Cash consideration to HHC at closing of Business Combination | — | — | (489,661) |
| Payment of capitalized transaction costs | — | (1,651) | (30,991) |
| Proceeds from issuance of common stock under employee stock purchase plan | — | — | — |
| Net Cash Provided by Financing Activities | 79,262 | (1,651) | 269,009 |
| Change in cash and cash equivalents and restricted cash and cash equivalents | (23,573) | (30,378) | 54,555 |
| Beginning cash and cash equivalents and restricted cash and cash equivalents | 24,177 | 54,555 | — |
| Ending cash and cash equivalents and restricted cash and cash equivalents | $604 | $24,177 | $54,555 |
| CASH PAID FOR: | |||
| Taxes | $— | $3 | $— |
Notes to Condensed Financial Statements (Parent Company Only)
1 — Summary of Significant Accounting Policies
Nature of Operations — Hagerty, Inc. (the "Parent Company") was formed in 2020 as a Delaware corporation and is a holding company with no direct operations. The Parent Company's assets and liabilities primarily consist of its equity interest in The Hagerty Group and its consolidated subsidiaries, as well as its warrant liabilities.
Basis of Presentation —The Parent Company's Condensed Financial Statements have been prepared using the equity method, whereby the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated subsidiaries since the date of acquisition. These Condensed Financial Statements should be read in conjunction with the Company's Consolidated Financial Statements and related notes thereto.
Use of Estimates — The preparation of the Parent Company's Condensed Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements, as well as the reported amounts of revenue and expenses during the reporting period. Although the estimates are considered reasonable, actual results could materially differ from those estimates.
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