Retail sales grew by 1.2% year on year in January, slowing down from growth of 4.2% in January 2023, a survey showed on Tuesday. The figures from the BRC and KPMG showed food sales growth decelerated to 6.3% over the three months to January, down from 8.0% a year prior. Meanwhile, non-food sales fell by 1.8% annually over the three months to January. Helen Dickinson, chief executive of the British Retail Consortium, said: "Easing inflation and weak consumer demand led retail sales growth to slow.”  “While t ...

Investors should keep their eyes on a few ‘Trump stocks’ if the former president makes it to the second term. These companies have close direct and indirect ties to Trump. So, this makes them potentially influential in a market shaped by his policies and decisions. Notably, these stocks might not just react to Trump’s potential election victory. They could also see changes in anticipation of such an event.I’m bullish on these Trump stocks as the market seems to be anticipating a shift in the political lands ...

BRC Inc. (NYSE:BRCC) Q3 2023 Earnings Call Transcript November 9, 2023 4:30 PM ET Company Participants Tanner Doss - VP of IR Evan Hafer - Founder and CEO Chris Mondzelewski - President Steve Kadenacy - CFO Conference Call Participants Michael Baker - DA Davidson Sarang Vora - Telsey Group Joe Altobello - Raymond James Jon Andersen - William Blair Matt McGinley - Needham and Company Operator Greetings and welcome to the Black Rifle Coffee Company's Third Quarter 2023 Earnings Call. At this time, all partici ...

Our barter arrangement may not provide the benefits we expect. If, for any reason, our co-manufacturers or raw material suppliers cannot fulfill their obligations, or our contract with one or more of our co-manufacturers is terminated, or if our needs are less than we have contracted for, our business may suffer. We have historically experienced meaningful variability of our needs for co-manufacturing and various components of co-manufactured goods, and if we do not effectively manage those arrangements or ...

BRC Inc. (NYSE:BRCC) Q2 2023 Earnings Conference Call August 10, 2023 4:30 PM ET Company Participants Tanner Doss – Vice President-Investor Relations Evan Hafer – Founder and Chief Executive Officer Tom Davin – Co-Chief Executive Officer Greg Iverson – Chief Financial Officer Chris Mondzelewski – President Conference Call Participants Joe Altobello – Raymond James Keegan Cox – D.A. Davidson Jon Andersen – William Blair George Kelly – ROTH Capital Partners Matt McGinley – Needham & Company Operator Greetings ...

[Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section cautions that the report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note emphasizes that forward-looking statements are based on current expectations and beliefs, with actual results potentially differing due to various risks detailed in the report - Forward-looking statements are based on current expectations and beliefs, but actual results may vary materially due to various risks and uncertainties[8](index=8&type=chunk) - Key risks include competition, ability to manage growth, achieve profitability, negative publicity, limited operating history, failed marketing campaigns, customer acquisition/retention, social media dependence, supply chain issues, changes in commodity markets, and failure to expand Outposts[6](index=6&type=chunk)[27](index=27&type=chunk) [Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) This part presents the company's unaudited consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with management's discussion and analysis [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, with detailed accounting notes [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | $19,782 | $38,990 | | Total current assets | $166,788 | $145,293 | | Total assets | $264,985 | $225,334 | | Total current liabilities | $85,482 | $62,192 | | Total liabilities | $195,681 | $129,398 | | Total stockholders' equity | $69,304 | $95,936 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net loss over specific reporting periods | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue, net | $91,947 | $66,365 | $175,437 | $132,201 | | Gross profit | $32,206 | $22,556 | $59,717 | $45,769 | | Operating loss | $(13,661) | $(16,840) | $(30,876) | $(32,683) | | Total non-operating expenses | $(947) | $(28,178) | $(997) | $(269,034) | | Net loss | $(14,665) | $(45,085) | $(31,986) | $(301,912) | | Net loss attributable to BRC Inc. | $(4,228) | $(10,755) | $(9,028) | $(73,676) | | Basic and diluted Net loss per share (1) | $(0.07) | $(0.22) | $(0.15) | $(1.49) | [Consolidated Statements of Stockholders' Equity (Deficit)](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) This statement outlines changes in the company's equity accounts, including additional paid-in capital and accumulated deficit | Metric | Balance at January 1, 2023 (in thousands) | Balance at June 30, 2023 (in thousands) | | :-------------------------------------- | :---------------------------------------- | :-------------------------------------- | | Additional Paid-In Capital | $129,508 | $134,953 | | Accumulated Deficit | $(103,733) | $(112,761) | | Non-Controlling Interest | $70,140 | $47,091 | | Total Stockholders' Equity (Deficit) | $95,936 | $69,304 | - Total stockholders' equity decreased from **$95,936 thousand** at January 1, 2023, to **$69,304 thousand** at June 30, 2023, primarily due to net loss and a decrease in non-controlling interests[62](index=62&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(40,457) | $(54,536) | | Net cash used in investing activities | $(9,823) | $(9,400) | | Net cash provided by financing activities | $31,072 | $138,687 | | Net increase (decrease) in cash | $(19,208) | $74,751 | | Ending cash and cash equivalents | $19,782 | $93,085 | - Net cash used in operating activities decreased by **$14.1 million (26%)** for the six months ended June 30, 2023, primarily due to an increase in accounts payable and decreases in accounts receivable and prepaid expenses, partially offset by an increase in inventory[311](index=311&type=chunk) - Net cash provided by financing activities decreased by **$107.6 million (78%)** for the six months ended June 30, 2023, mainly due to non-recurring activities related to the Business Combination in 2022[338](index=338&type=chunk) [Index for Notes to Consolidated Financial Statements](index=11&type=section&id=Index%20for%20Notes%20to%20Consolidated%20Financial%20Statements) This index lists the comprehensive notes that provide additional detail and context to the consolidated financial statements - The index provides a comprehensive list of the 15 notes to the consolidated financial statements, covering topics from organization and accounting policies to commitments and subsequent events[67](index=67&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the company's accounting policies, financial line items, and other relevant disclosures [Note 1. Organization and Nature of Business](index=12&type=section&id=Note%201.%20Organization%20and%20Nature%20of%20Business) This note describes the company's corporate structure and primary business operations, including its reverse recapitalization - BRC Inc. operates primarily through its subsidiary, Authentic Brands, which became a subsidiary via a reverse recapitalization on February 9, 2022, with Authentic Brands considered the accounting acquirer[41](index=41&type=chunk)[43](index=43&type=chunk)[69](index=69&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=12&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition - Revenue is recognized when control of a product or service transfers to a customer, with estimates used for delivery dates and unredeemed gift cards/loyalty points[47](index=47&type=chunk)[49](index=49&type=chunk)[73](index=73&type=chunk) | Sales Channel | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Wholesale | $50,010 | $23,971 | $90,007 | $45,926 | | Direct to Consumer | $34,586 | $36,962 | $71,366 | $75,294 | | Outpost | $7,351 | $5,432 | $14,064 | $10,981 | | Total net sales | $91,947 | $66,365 | $175,437 | $132,201 | - The company operates as a single reportable segment, managing its business as a single-brand consumer products entity[109](index=109&type=chunk) [Note 3. Inventories, Net](index=20&type=section&id=Note%203.%20Inventories,%20Net) This note details the composition and valuation of the company's inventory, including unroasted coffee and finished goods | Inventory Category | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :--------------------------- | :------------------------------- | | Unroasted Coffee | $3,940 | $4,867 | | Finished Goods | $17,329 | $15,365 | | Ready-to-Drink (raw materials) | $17,026 | $16,610 | | Ready-to-Drink (finished goods) | $64,286 | $33,413 | | Apparel and other merchandise | $7,139 | $6,928 | | Total inventories, net | $109,720 | $77,183 | - Total inventories, net, increased by **$32.5 million** from December 31, 2022, to June 30, 2023, primarily driven by a significant increase in Ready-to-Drink finished goods[152](index=152&type=chunk) [Note 4. Property, Plant and Equipment, Net](index=20&type=section&id=Note%204.%20Property,%20Plant%20and%20Equipment,%20Net) This note provides information on the company's tangible assets, including gross values, accumulated depreciation, and impairment charges | Asset Category | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :---------------------------------- | :--------------------------- | :------------------------------- | | Property, plant, and equipment, gross | $73,968 | $69,184 | | Less: accumulated depreciation | $(10,435) | $(9,733) | | Total property, plant and equipment, net | $63,533 | $59,451 | - The company recorded an impairment of **$1.2 million** on assets held for sale related to an Outpost location, recognizing the assets at their estimated net realizable value less costs to sell[155](index=155&type=chunk) - An office property is also held for sale with an expected closing in Q3 2023, anticipated to result in a gain of approximately **$1.4 million**[133](index=133&type=chunk) [Note 5. Deferred Revenue and Gift Card Liability](index=21&type=section&id=Note%205.%20Deferred%20Revenue%20and%20Gift%20Card%20Liability) This note explains the accounting for deferred revenue and gift card liabilities, including sales, redemptions, and loyalty program activity | Metric | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :-------------------------------------------- | | Balance at beginning of period | $9,345 | $9,505 | | Sales of gift cards | $216 | $562 | | Redemption of gift cards | $(115) | $(489) | | Increase from deferral of revenue | $2,847 | $2,847 | | Decrease from revenue recognition | $(3,127) | $(3,560) | | Loyalty Program points earned | $1,043 | $1,565 | | Loyalty Program points redeemed/expired | $(134) | $(355) | | Balance at end of period | $10,075 | $10,075 | [Note 6. Accrued Liabilities](index=22&type=section&id=Note%206.%20Accrued%20Liabilities) This note itemizes the company's accrued expenses, such as inventory purchases, compensation, and marketing | Accrued Liability Category | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------ | :--------------------------- | :------------------------------- | | Accrued inventory purchases | $10,969 | $15,035 | | Accrued compensation and benefits | $5,414 | $7,393 | | Accrued marketing | $2,400 | $3,077 | | Accrued freight | $1,158 | $2,153 | | Other accrued expenses | $10,474 | $6,935 | | Total accrued liabilities | $31,617 | $36,660 | [Note 7. Long-Term Debt](index=22&type=section&id=Note%207.%20Long-Term%20Debt) This note details the company's long-term debt obligations, including credit facilities, mortgages, and future maturities | Debt Category | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------ | :--------------------------- | :------------------------------- | | Senior credit facility | $61,849 | $30,000 | | Mortgages | $4,808 | $7,102 | | Equipment term loan | $3,577 | $3,814 | | Equipment financing loan | $3,336 | $3,336 | | Notes payable | $3,140 | $3,540 | | Total principal | $78,260 | $49,560 | | Long-term debt, net | $77,878 | $49,160 | | Future Contractual Maturities (in thousands) | | :------------------------------------------- | | Remainder of 2023: $1,596 | | 2024: $2,864 | | 2025: $5,265 | | 2026: $3,587 | | 2027: $62,791 | | Thereafter: $2,157 | | Total: $78,260 | - The Senior Credit Facility, with a variable interest rate based on BSBY plus a margin, had **$61.8 million** outstanding as of June 30, 2023, and requires maintaining minimum liquidity and a fixed charge coverage ratio[136](index=136&type=chunk)[160](index=160&type=chunk) [Note 8. Stockholders' Equity](index=24&type=section&id=Note%208.%20Stockholders'%20Equity) This note describes the company's capital structure, including authorized stock, voting rights, and ownership percentages - The company's authorized capital stock includes Class A, Class B, and Class C common stock, and preferred stock. Class A and B common stock holders have one vote per share, while Class C has no voting rights[143](index=143&type=chunk)[188](index=188&type=chunk) - Class A common stockholders are entitled to dividends, while Class B and C common stock are not. No preferred stock is currently issued[188](index=188&type=chunk)[189](index=189&type=chunk) - BRC Inc.'s ownership percentage in Authentic Brands' controlling and non-controlling interests increased from **22.5%** and **77.5%** post-Business Combination to **28.6%** and **71.4%** as of June 30, 2023, respectively[191](index=191&type=chunk) [Note 9. Equity-Based Compensation](index=25&type=section&id=Note%209.%20Equity-Based%20Compensation) This note provides details on the company's equity award programs, including stock options, RSUs, PSUs, and unrecognized compensation expense | Equity Award Type | Outstanding at Jan 1, 2023 | Granted (6 months) | Forfeited (6 months) | Outstanding at Jun 30, 2023 | | :---------------- | :------------------------- | :----------------- | :------------------- | :-------------------------- | | Incentive Units | 14,210 | — | — | 14,210 | | Stock Options | 792,370 | 1,888,882 | (72,347) | 2,608,905 | | RSUs | 823,829 | 1,347,403 | (101,401) | 1,762,189 | | PSUs | — | 8,462,412 | — | 8,462,412 | - Total unrecognized equity compensation expense as of June 30, 2023, includes **$1,829 thousand** for Incentive Units (over ~2 years), **$7,382 thousand** for Stock Options (over ~3 years), and **$10,236 thousand** for RSUs (over ~2 years)[195](index=195&type=chunk)[199](index=199&type=chunk)[174](index=174&type=chunk) - The company granted **8,462,412** performance-based restricted stock units (PSUs) to a key employee in December 2022, vesting based on market capital growth rates through April 2027, with **$2,480 thousand** in unrecognized expense[175](index=175&type=chunk) [Note 10. Defined Contribution Plan](index=28&type=section&id=Note%2010.%20Defined%20Contribution%20Plan) This note outlines the company's contributions to its defined contribution retirement plan for employees | Metric | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :-------------------------------------------- | | Company matching contributions | $254 | $511 | [Note 11. Income Taxes](index=28&type=section&id=Note%2011.%20Income%20Taxes) This note explains the company's income tax treatment, including its partnership status and valuation allowance against deferred tax assets - BRC Inc. is subject to U.S. federal and state taxes on its allocable share of Authentic Brands' taxable income/loss, while Authentic Brands is treated as a partnership for tax purposes[179](index=179&type=chunk) - A valuation allowance has been recorded against deferred tax assets due to significant uncertainty regarding their realization, primarily stemming from the company's limited operating history and historical losses[180](index=180&type=chunk) [Note 12. Net Loss Per Share](index=29&type=section&id=Note%2012.%20Net%20Loss%20Per%20Share) This note presents the calculation of basic and diluted net loss per share, including the impact of potentially dilutive securities | Metric | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :---------------------------------------- | :------------------------------- | :----------------------------- | | Net loss attributable to Class A Common Stock | $(4,228) | $(9,028) | | Weighted-average shares of Class A Common Stock outstanding | 58,741,717 | 58,607,290 | | Net loss per share, basic and diluted | $(0.07) | $(0.15) | - Potentially dilutive securities, including stock options, Common Units, RSUs, PSUs, Incentive Units, and ESPP shares, totaling **163.99 million units**, were excluded from diluted net loss per share computation due to their anti-dilutive effect[207](index=207&type=chunk) [Note 13. Concentrations](index=30&type=section&id=Note%2013.%20Concentrations) This note identifies significant concentrations of risk related to customers, suppliers, and revenue sources | Vendor Category | Number of Vendors (6M 2023) | Concentration Rate (6M 2023) | Number of Vendors (6M 2022) | Concentration Rate (6M 2022) | | :------------------------------ | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------------- | | Coffee supplier accounts | 5 | 54.3% | 2 | 66.9% | | Shipping provider accounts | 4 | 60.6% | 4 | 80.9% | | Primary fulfillment service provider accounts | 3 | 84.3% | 1 | 98.2% | | Marketing provider accounts | 6 | 43.8% | 8 | 40.5% | - Two customers and their affiliates accounted for **52%** of total outstanding accounts receivable as of June 30, 2023, indicating a concentration of credit risk[96](index=96&type=chunk) - One wholesale customer and its affiliate represented **27%** of revenue for the three months ended June 30, 2023, and **25%** for the six months ended June 30, 2023[107](index=107&type=chunk) [Note 14. Commitments and Contingencies](index=31&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note discloses the company's future purchase commitments and ongoing legal proceedings | Future Minimum Purchase Commitments (in thousands) | | :------------------------------------------------- | | Remainder of 2023: $19,330 | | 2024: $46,400 | | 2025: $22,410 | | Total: $88,140 | - The company is involved in various legal actions, including a lawsuit by SEI alleging disputed royalties and expense reimbursements, and a lawsuit by Tang Capital Partners regarding warrant exercise refusal[210](index=210&type=chunk)[213](index=213&type=chunk)[239](index=239&type=chunk) - The company is negotiating with suppliers to amend or terminate certain purchase agreements, with potential losses if negotiations are unsuccessful[237](index=237&type=chunk) [Note 15. Subsequent Events](index=32&type=section&id=Note%2015.%20Subsequent%20Events) This note reports significant events occurring after the balance sheet date, such as new credit agreements - On August 10, 2023, Authentic Brands entered into new ABL and Term Loan Credit Agreements, providing up to **$75 million** revolving credit and **$56 million** in term/bridge loans, respectively[214](index=214&type=chunk) - Proceeds from the new credit facilities were used to retire previous credit facilities with Regions Bank and pay transaction fees[243](index=243&type=chunk) - The new credit agreements include financial covenants requiring maintenance of consolidated EBITDA, fixed charge coverage ratio, and minimum liquidity[215](index=215&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, highlighting key business strategies, operational trends, and detailed comparisons of financial results for the three and six months ended June 30, 2023 and 2022 [Overview](index=34&type=section&id=Overview) This overview introduces the company's business model, market position, and recent revenue growth drivers - Black Rifle Coffee Company is a veteran-controlled coffee and media company with a loyal community, operating through Direct to Consumer (DTC), Wholesale, and Outpost channels[250](index=250&type=chunk)[224](index=224&type=chunk) - The company experienced strong revenue growth, with net revenue increasing **39% to $91.9 million** for Q2 2023 and **33% to $175.4 million** for H1 2023, primarily driven by expansion into the FDM market and RTD product sales in the Wholesale channel[252](index=252&type=chunk) [Trends](index=35&type=section&id=Trends) This section discusses revenue trends across different sales channels, including wholesale, direct-to-consumer, and outpost - Wholesale channel revenue increased due to new customers and FDM market entry, with expected continued growth from increased investment[254](index=254&type=chunk) - DTC revenue slightly declined due to redirected investments to other growing areas and elevated customer acquisition costs[254](index=254&type=chunk) - Outpost channel revenue increased with the opening of additional company-owned and franchised stores[254](index=254&type=chunk) [Key Factors Affecting Our Performance](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) This section identifies critical elements influencing the company's performance, such as customer base growth, brand awareness, and supply chain management - Key performance factors include growing the customer base in Outposts and Wholesale channels, expanding brand awareness through national advertising and social media, and effectively managing the supply chain for coffee beans and co-manufacturers[229](index=229&type=chunk)[260](index=260&type=chunk)[284](index=284&type=chunk) - The company aims to expand its product line, exemplified by the successful launch and growth of RTD coffee products, to increase growth opportunities and diversify product-specific risks[262](index=262&type=chunk) [Results of Our Operations](index=36&type=section&id=Results%20of%20Our%20Operations) This section provides a detailed comparison of the company's financial results for the current and prior reporting periods | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue, net | $91,947 | $66,365 | $175,437 | $132,201 | | Gross profit | $32,206 | $22,556 | $59,717 | $45,769 | | Operating loss | $(13,661) | $(16,840) | $(30,876) | $(32,683) | | Net loss | $(14,665) | $(45,085) | $(31,986) | $(301,912) | [Comparison of the three months ended June 30, 2023 to the three months ended June 30, 2022](index=38&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030,%202023%20to%20the%20three%20months%20ended%20June%2030,%202022) This comparison analyzes the company's financial performance for the second quarter of 2023 versus the same period in 2022 | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | % Change | | :------------------------ | :------------------ | :------------------ | :-------------------- | :------- | | Revenue, net | $91,947 | $66,365 | $25,582 | 39% | | Wholesale | $50,010 | $23,971 | $26,039 | 109% | | Direct to Consumer | $34,586 | $36,962 | $(2,376) | (6)% | | Outpost | $7,351 | $5,432 | $1,919 | 35% | | Cost of goods sold | $59,741 | $43,809 | $15,932 | 36% | | Gross margin | 35.0% | 34.0% | 1.0 pp | | | Total operating expenses | $45,867 | $39,396 | $6,471 | 16% | | Marketing and advertising | $7,013 | $9,026 | $(2,013) | (22)% | | Salaries, wages and benefits | $18,356 | $15,539 | $2,817 | 18% | | General and administrative | $19,296 | $14,831 | $4,465 | 30% | | Impairment on assets held for sale | $1,202 | — | $1,202 | 100% | - Gross margin improved by **100 basis points to 35.0%** due to a favorable product mix shift towards higher-margin coffee and rounds sold to FDM customers[292](index=292&type=chunk) - Non-operating expenses significantly decreased from **$(28.2) million** in Q2 2022 to **$(0.9) million** in Q2 2023, primarily because of non-recurring fair value changes related to earn-out, warrant, and derivative liabilities in the prior year[330](index=330&type=chunk)[405](index=405&type=chunk) [Comparison of the six months ended June 30, 2023 to the six months ended June 30, 2022](index=40&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030,%202023%20to%20the%20six%20months%20ended%20June%2030,%202022) This comparison analyzes the company's financial performance for the first half of 2023 versus the same period in 2022 | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | % Change | | :------------------------ | :------------------ | :------------------ | :-------------------- | :------- | | Revenue, net | $175,437 | $132,201 | $43,236 | 33% | | Wholesale | $90,007 | $45,926 | $44,081 | 96% | | Direct to Consumer | $71,366 | $75,294 | $(3,928) | (5)% | | Outpost | $14,064 | $10,981 | $3,083 | 28% | | Cost of goods sold | $115,720 | $86,432 | $29,288 | 34% | | Gross margin | 34.0% | 34.6% | (0.6) pp | | | Total operating expenses | $90,593 | $78,452 | $12,141 | 15% | | Marketing and advertising | $14,157 | $17,177 | $(3,020) | (18)% | | Salaries, wages and benefits | $38,180 | $31,557 | $6,623 | 21% | | General and administrative | $37,054 | $29,718 | $7,336 | 25% | | Impairment on assets held for sale | $1,202 | — | $1,202 | 100% | - Gross margin decreased by **60 basis points to 34.0%** due to increased product costs from higher raw coffee bean prices and RTD raw materials, and increased transportation/carrying costs, despite a favorable product mix shift[282](index=282&type=chunk) - Non-operating expenses significantly decreased from **$(269.0) million** in H1 2022 to **$(1.0) million** in H1 2023, primarily due to non-recurring fair value changes related to earn-out, warrant, and derivative liabilities in the prior year[331](index=331&type=chunk)[332](index=332&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and strategies for funding future operations and capital requirements - As of June 30, 2023, cash and cash equivalents were **$19.8 million**, and working capital was **$81.3 million**. The company had **$4.9 million** available borrowings under its credit facility, subject to a **$15.0 million** minimum liquidity condition[333](index=333&type=chunk)[334](index=334&type=chunk) - The company expects to fund future capital requirements, mainly working capital, through operations and its asset-backed revolving credit facility, potentially seeking additional debt or equity financing[310](index=310&type=chunk) - Net cash used in operating activities decreased by **$14.1 million** for the six months ended June 30, 2023, while net cash provided by financing activities decreased by **$107.6 million** due to non-recurring Business Combination activities in the prior year[311](index=311&type=chunk)[338](index=338&type=chunk) [Critical Accounting Estimates](index=45&type=section&id=Critical%20Accounting%20Estimates) This section highlights the significant judgments and assumptions underlying the company's financial reporting - The company's financial statements rely on critical accounting estimates and assumptions, such as estimated losses on accounts receivable, inventory reserves, impairment of long-lived assets, and equity-based compensation, which require significant judgment[72](index=72&type=chunk)[316](index=316&type=chunk) [JOBS Act](index=44&type=section&id=JOBS%20Act) This section explains the company's status as an emerging growth company under the JOBS Act and its accounting standard adoption elections - The company qualifies as an 'emerging growth company' under the JOBS Act and has elected to delay the adoption of new or revised accounting standards, which may affect comparability with other public companies[314](index=314&type=chunk)[366](index=366&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, including commodity price, interest rate, and inflationary pressures - The company faces commodity price risk primarily from coffee beans, which are subject to volatility due to weather, natural disasters, and economic conditions. Increases in coffee prices could materially impact profitability[317](index=317&type=chunk)[367](index=367&type=chunk) - Interest rate risk stems from variable-rate debt, such as the Senior Credit Facility (BSBY plus 2.25%). A hypothetical **5%** increase in interest rates would result in approximately **$3.3 million** in additional annual interest expense[318](index=318&type=chunk) - Inflationary factors, including increased costs for products, overhead, and freight, have impacted operating results. While price increases and efficiency improvements have partially offset these, future cost increases may not be fully absorbed[369](index=369&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures and confirms that there have been no material changes in internal control over financial reporting during the reporting period - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[370](index=370&type=chunk) - There were no changes in internal control over financial reporting during the three and six months ended June 30, 2023, that materially affected or are reasonably likely to materially affect internal control over financial reporting[371](index=371&type=chunk) [Part II - Other Information](index=48&type=section&id=Part%20II%20-%20Other%20Information) This part provides additional disclosures, including legal proceedings, updated risk factors, and information on executive appointments [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed disclosures on legal actions and disputes affecting the company - Information regarding legal proceedings can be found in Note 14, Commitments and Contingencies, to the unaudited consolidated financial statements[347](index=347&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section updates previously disclosed risks, focusing on supply chain reliance and substantial debt obligations - The company relies heavily on co-manufacturers and third-party suppliers for production, especially for RTD products. Loss of these partners or failure to manage agreements could harm operations and lead to losses from excess inventory or 'take or pay' charges[348](index=348&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk) - Substantial debt obligations could impair financial condition by limiting cash flow for growth, imposing restrictive covenants, increasing interest rate costs, and raising default risk, which could materially and adversely affect the business[351](index=351&type=chunk)[352](index=352&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the current reporting period - This item is not applicable[357](index=357&type=chunk)[378](index=378&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the current reporting period - This item is not applicable[358](index=358&type=chunk)[378](index=378&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the current reporting period - This item is not applicable[386](index=386&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section provides details on recent executive appointments and compensation adjustments - Chris Clark was appointed Chief Technology and Operations Officer on August 8, 2023, with a base salary of **$400,000**, a target bonus of **75%** of base salary, and equity awards[359](index=359&type=chunk)[387](index=387&type=chunk) - Chris Mondzelewski's compensation was updated in connection with his appointment as President (in addition to CMO), with a base salary of **$500,000**, a target bonus of **75%** of base salary, and significant equity awards[388](index=388&type=chunk)[389](index=389&type=chunk) - An agreement was entered for the interim Chief Financial Officer, Mr. Weinsten, with a monthly payment of **$200,000** and a completion fee[386](index=386&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all supplementary documents filed with the report, including agreements and certifications - Exhibits include Transition and Separation Agreements, Certifications of Principal Executive and Financial Officers (31.1, 31.2, 31.3, 32.1, 32.2, 32.3), and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[383](index=383&type=chunk)

Financial Data and Key Metrics Changes - Total revenue increased by 27% to $83.5 million in Q1 2023, compared to $65.8 million in Q1 2022, driven primarily by the wholesale channel which grew by 82% [13][50] - Gross margin for Q1 was 33%, a decrease of approximately 230 basis points from 35.3% in Q1 2022, attributed to rising costs of coffee and RTD raw materials [51] - Adjusted EBITDA loss improved to $5.1 million in Q1 2023 from a loss of $6.3 million a year ago, indicating progress towards profitability [53] Business Line Data and Key Metrics Changes - Revenue from the wholesale channel reached $40 million, up 82% from $21.9 million in Q1 2022, marking it as the largest revenue driver for the quarter [50][116] - Revenue from Outposts increased by 21% to $6.7 million, driven by an increase in company-owned store count to 16 [14] - Direct-To-Consumer revenue decreased by 4% to $36.8 million, primarily due to reduced digital advertising spend [29] Market Data and Key Metrics Changes - The company maintained a market share of 3.8% in the overall Walmart coffee segment, achieving significant growth without prior marketing or promotion [47][36] - Ready-To-Drink (RTD) percent ACV more than doubled to 38.5% from 15.5% a year ago, driven by the addition of 16,000 incremental doors [120] Company Strategy and Development Direction - The company is shifting focus from maximizing growth to profit and capital-efficient growth, particularly emphasizing the food, drug, and mass (FDM) channel [8][25] - Plans to enter one or more new FDM accounts in the second half of 2023, aligning with Walmart's reset windows [117] - The company aims to optimize marketing spend to enhance growth across all channels, including Direct-To-Consumer [12][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changing economic conditions and maintain growth [8][24] - The company reaffirmed its full-year outlook of revenue between $400 million to $440 million, with gross margin targets of 36% to 37.5% and positive adjusted EBITDA of $5 million to $20 million [54][119] Other Important Information - The company has committed to supporting the veteran community through various initiatives, including donations from product sales [10][23] - The addition of a new Chief Marketing Officer is expected to enhance marketing strategies and drive growth [12][112] Q&A Session Summary Question: What are the top priorities for the new Chief Marketing Officer? - The focus will be on aligning the omnichannel business with marketing initiatives and optimizing marketing dollars to reach the customer base effectively [55][57] Question: How is the company deepening its relationship with Walmart? - Increased marketing efforts are planned to drive awareness and trial, including the first end cap promotion at Walmart [40][41] Question: What is the outlook for inventory levels by the end of the year? - Inventory levels are expected to normalize in the third and fourth quarters as sales volumes ramp up [69] Question: Can you provide an update on market share growth at Walmart? - The company has maintained a 3.8% market share and is optimistic about driving trial and awareness through promotional efforts [36][64] Question: What is the expected impact of the RTD promotion on gross margins? - The promotion will have some negative impact on Q2 gross margins, but is expected to drive customer trial and market share [32][58]

Gift Cards 10 For those points that are earned through other activities, the Company recognizes the redemption of these points as a discount to the transaction price at time of sale. Refer to Note 5, Deferred Revenue and Gift Card Liability for information about changes in the current portion of deferred revenue and gift card liability for the three months ended March 31, 2023 and 2022. The franchise agreements also typically require upfront franchise fees such as initial fees paid for the execution of a fr ...

BRC, Inc. (NYSE:BRCC) Q4 2022 Earnings Conference Call March 15, 2023 4:30 PM ET Company Participants Tanner Doss - VP, Investor Relations Evan Hefer - Founder & CEO Tom Davin - Co-CEO, Black Rifle Coffee Company Gregory Iverson - CFO Toby Johnson - Chief Operating Officer Heath Nielsen - Chief Retail Officer Conference Call Participants Michael Baker - D.A. Davidson Bill Chappell - Truist Securities Joe Altobello - Raymond James Steve Powers - Deutsche Bank Operator Greetings. Welcome to the Black Rifle Co ...

FORM 10-K Filing Information [General Information](index=1&type=section&id=General%20Information) This section details BRC Inc.'s Form 10-K filing for fiscal year 2022, including its incorporation, SEC file, and emerging growth company status - BRC Inc. filed its Annual Report on Form 10-K for the fiscal year ended **December 31, 2022**[145](index=145&type=chunk) - The company is incorporated in Delaware with **SEC file number 001-41275**[145](index=145&type=chunk)[157](index=157&type=chunk) - BRC Inc. is classified as a **'non-accelerated filer'** and an **'emerging growth company'**[146](index=146&type=chunk)[158](index=158&type=chunk) Common Stock Information (as of March 8, 2023) | Class of Stock | Shares Outstanding | | :------------- | :----------------- | | Class A Common | 58,378,857 | | Class B Common | 153,181,442 | [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements in the report are subject to risks and uncertainties, and the company does not commit to updating them - Forward-looking statements are based on current expectations and beliefs, subject to risks and uncertainties[2](index=2&type=chunk) - Actual results or performance may materially differ from those expressed or implied by forward-looking statements[2](index=2&type=chunk) - The company will not update or revise forward-looking statements unless required by applicable securities laws[2](index=2&type=chunk) [Summary of Risk Factors](index=5&type=section&id=Summary%20of%20Risk%20Factors) This section summarizes numerous risks that could negatively impact the company's business, financial condition, and operating results - Risks include negative publicity affecting brand and reputation, especially concerning key employees and the veteran/military community[162](index=162&type=chunk)[187](index=187&type=chunk) - Challenges in managing rapid growth, integrating into new markets, and successfully opening new Outposts are significant risks[2](index=2&type=chunk)[163](index=163&type=chunk)[166](index=166&type=chunk) - Dependence on third-party supply chain, co-manufacturers, and wholesale partners poses risks to product delivery and profitability[1](index=1&type=chunk)[166](index=166&type=chunk) - Increased costs from inflation, competition, and reliance on information technology systems are also highlighted[166](index=166&type=chunk) [Item 1. Business](index=8&type=section&id=Item%201.%20Business) [Company Overview](index=8&type=section&id=Company%20Overview) Black Rifle Coffee Company is a veteran-controlled coffee and media company serving premium coffee, content, and merchandise to its community - Black Rifle Coffee Company is a veteran-controlled company serving premium coffee, content, and merchandise to military, veterans, first responders, and patriots[8](index=8&type=chunk)[173](index=173&type=chunk) - The brand is mission-driven, focusing on cause-related content and community building[8](index=8&type=chunk)[174](index=174&type=chunk) - Veterans and veteran spouses comprise approximately **half of the company's over 900 employees**[12](index=12&type=chunk) - In 2022, Black Rifle Coffee donated over **$1.6 million** in coffee and **$1.8 million** in other donations through its affiliated non-profit, BRCC Fund, focusing on veteran-related causes[197](index=197&type=chunk) [Our Business Model and Channels](index=8&type=section&id=Our%20Business%20Model%20and%20Channels) The company operates a digitally native brand with an omnichannel distribution strategy across Direct to Consumer, Wholesale, and Outposts - Omnichannel distribution strategy includes Direct to Consumer (DTC), Wholesale, and Outposts[194](index=194&type=chunk) Revenue Growth (2020-2022) | Year | Revenue (Millions USD) | Growth Rate (%) | | :--- | :--------------------- | :-------------- | | 2020 | $163.9 | - | | 2021 | $233.1 | 42.2 | | 2022 | $301.3 | 29.3 | Revenue by Channel (2021 vs 2022) | Channel | 2022 Sales (Millions USD) | 2021 Sales (Millions USD) | Change (%) | | :------ | :------------------------ | :------------------------ | :--------- | | DTC | $159.0 | $165.3 | -3.8 | | Wholesale | $119.4 | $55.8 | 114.1 | | Outpost | $22.9 | $12.0 | 90.5 | - DTC channel revenue decreased by **3.8%** in 2022, primarily due to a strategic shift in advertising spend, while customer retention remained steady[49](index=49&type=chunk)[681](index=681&type=chunk) - Wholesale channel revenue increased by **114.1%** in 2022, driven by entry into the FDM market (e.g., Walmart) and growth in Ready-To-Drink (RTD) products[48](index=48&type=chunk)[177](index=177&type=chunk) - Outpost channel sales increased by **90.5%** in 2022, primarily due to opening seven new company-operated Outposts and three new franchise stores[457](index=457&type=chunk) - As of December 31, 2022, the company had **270,000 Coffee Club subscribers** and **13.1 million social media followers**[198](index=198&type=chunk) [Product Supply and Roasting](index=8&type=section&id=Product%20Supply%20and%20Roasting) The company owns two U.S. roasting facilities and uses co-manufacturers to source and produce high-quality coffee beans and RTD products - The company owns two roasting facilities in the U.S. for in-house roasting, ensuring consistency and quality[171](index=171&type=chunk) - Coffee beans are sourced from Colombia, Nicaragua, Brazil, and over ten other countries, with an **83-point grade or higher**[171](index=171&type=chunk)[234](index=234&type=chunk) - Co-manufacturers are used for a portion of production capacity, especially for RTD products, to scale quickly[172](index=172&type=chunk) [Human Capital](index=9&type=section&id=Human%20Capital) Black Rifle Coffee prioritizes hiring veterans and veteran spouses, who comprise approximately half of its employees, offering comprehensive development and benefits - Veterans and veteran spouses make up about **50% of the company's 918 employees** (as of December 31, 2022)[12](index=12&type=chunk)[180](index=180&type=chunk) - The company aims to be an employer of choice for post-military careers and inspire veteran entrepreneurship[12](index=12&type=chunk) - Employee development and training are customized, and a comprehensive 'Total Rewards Package' is offered[204](index=204&type=chunk)[237](index=237&type=chunk) [Competition](index=10&type=section&id=Competition) The company competes in the highly competitive **$45.0 billion** coffee market by leveraging product quality, brand recognition, and a mission-led lifestyle - The company competes in the **$45.0 billion** coffee market across at-home, RTD, and out-of-home segments[201](index=201&type=chunk) - Competition is based on product quality, roasting methods, brand recognition, and technology[201](index=201&type=chunk) - The company differentiates itself through superior product, powerful media platform, mission-led lifestyle, and loyal customer base[201](index=201&type=chunk) - Entry into the Food, Drug and Mass (FDM) market, in collaboration with Walmart, is expected to significantly boost brand awareness and revenue[9](index=9&type=chunk) [Intellectual Property](index=11&type=section&id=Intellectual%20Property) Black Rifle Coffee Company owns numerous registered trademarks, including 'Black Rifle Coffee Company' and its 'BRCC' logo, which are crucial to its brand identity - The company owns many registered trademarks and service marks in the U.S., including **'Black Rifle Coffee Company'** and the **'BRCC' logo**[181](index=181&type=chunk) - These marks are considered of significant value and importance to the business[181](index=181&type=chunk) - The company licenses its marks to franchise partners and third-party vendors, with agreements restricting use and imposing brand standards[238](index=238&type=chunk) [Government Regulations](index=11&type=section&id=Government%20Regulations) The company is subject to extensive federal, state, and local regulations covering public health, food safety, and franchising, requiring complex and costly compliance - The company is subject to extensive federal, state, and local regulations, including public health, safety, nutritional labeling, and food safety[52](index=52&type=chunk) - Franchising activities are regulated by the Federal Trade Commission (FTC) and state laws, requiring a franchise disclosure document (FDD)[182](index=182&type=chunk) - Compliance with labor laws such as the Fair Labor Standards Act and Americans with Disabilities Act is also required[239](index=239&type=chunk) [Environmental](index=12&type=section&id=Environmental) Federal and state environmental regulations have not materially impacted operations, but stricter local requirements could increase development costs for new facilities - Federal and state environmental regulations have not had a material effect on operations[240](index=240&type=chunk) - More stringent local government requirements could delay construction and increase development costs for new facilities[240](index=240&type=chunk) - The company is working to manage risks and costs related to environmental sustainability matters, including climate change, water resources, and waste[214](index=214&type=chunk) [Business Combination and Organizational Structure](index=12&type=section&id=Business%20Combination%20and%20Organizational%20Structure) BRC Inc. completed a business combination in February 2022, becoming the parent of Authentic Brands, operating under an umbrella partnership C corporation (Up-C) structure - BRC Inc. consummated a business combination on **February 9, 2022**, becoming the parent company of Authentic Brands[207](index=207&type=chunk) - The organizational structure is an **'umbrella partnership C corporation' (Up-C) structure**[54](index=54&type=chunk) - This structure allows certain Authentic Brands owners to retain equity in Authentic Brands, classified as a partnership for U.S. federal income tax purposes[54](index=54&type=chunk) [Available Information](index=12&type=section&id=Available%20Information) The company files annual, quarterly, and current reports with the SEC, which are publicly available on its investor relations website and the SEC's website - Annual, quarterly, and current reports are filed with the SEC and available on **www.blackriflecoffee.com/pages/investor-relations** and **www.sec.gov**[22](index=22&type=chunk) - Information on the company's website is not part of its SEC filings[22](index=22&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) [Risks Related to Our Business](index=12&type=section&id=Risks%20Related%20to%20Our%20Business) This section details various business-specific risks, including those related to brand reputation, growth strategy execution, supply chain, competition, and information technology - Damage to brand or reputation, including negative publicity or perceived abandonment of mission, could significantly impact business and financial results[23](index=23&type=chunk)[28](index=28&type=chunk)[209](index=209&type=chunk)[246](index=246&type=chunk) - Failure to successfully execute strategic initiatives for growth in DTC, Wholesale, and Outpost channels, or market cannibalization, could adversely affect growth and profitability[29](index=29&type=chunk)[30](index=30&type=chunk)[61](index=61&type=chunk)[215](index=215&type=chunk) - Disruptions in the supply chain for coffee beans, store supplies, or merchandise, or issues with co-manufacturers, could negatively impact production and profitability[40](index=40&type=chunk)[259](index=259&type=chunk) - Intense competition in the coffee market and challenges in opening new Outposts or achieving planned operating levels could hinder expansion and profitability[44](index=44&type=chunk)[45](index=45&type=chunk)[109](index=109&type=chunk) - Dependence on information technology systems and third-party service providers for operations, sales, and data processing exposes the company to risks of security breaches, system failures, and data loss[87](index=87&type=chunk)[115](index=115&type=chunk)[126](index=126&type=chunk) - Inability to adequately protect intellectual property, including trademarks and roasting methods, could harm brand value and competitive advantage[127](index=127&type=chunk)[129](index=129&type=chunk)[135](index=135&type=chunk) - Food safety and quality concerns, evolving consumer preferences, and health perceptions related to caffeine or other ingredients could reduce demand and negatively impact sales[132](index=132&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - Reliance on franchise partners, over whom the company has limited control, poses risks to operational standards, brand image, and financial results[470](index=470&type=chunk)[492](index=492&type=chunk) - Inflationary pressures on raw materials, labor, and operating costs could adversely affect profitability if not offset by price increases or efficiency gains[478](index=478&type=chunk)[787](index=787&type=chunk) [Risks Related to People and Culture](index=28&type=section&id=Risks%20Related%20to%20People%20and%20Culture) This section outlines risks associated with human capital, including dependence on key executives, labor costs, unique workplace culture, and potential litigation - The company's success is highly dependent on its founder, executive officers (Evan Hafer, Mat Best, Tom Davin), and other key employees, whose loss could harm the business[479](index=479&type=chunk)[483](index=483&type=chunk)[533](index=533&type=chunk) - Increases in labor costs (minimum wage, healthcare) and difficulty attracting/retaining qualified employees could negatively impact operations and profitability[484](index=484&type=chunk)[503](index=503&type=chunk)[534](index=534&type=chunk) - The company's unique workplace atmosphere, including a policy permitting firearms, creates inherent risks and potential liability[485](index=485&type=chunk)[537](index=537&type=chunk) - Unionization activities could disrupt operations, increase costs, and affect profitability[487](index=487&type=chunk)[506](index=506&type=chunk) - Litigation or legal proceedings, including employee claims or those related to risky content creation, could expose the company to significant liabilities and reputational damage[5](index=5&type=chunk)[507](index=507&type=chunk)[557](index=557&type=chunk) [Risks Related to Regulation, Litigation and Taxation](index=30&type=section&id=Risks%20Related%20to%20Regulation,%20Litigation%20and%20Taxation) This section covers extensive regulatory risks, potential litigation, and the increased costs and burdens associated with being a public company - The company is subject to extensive federal, state, and local laws and regulations, including food safety, labor, and franchising laws, with non-compliance leading to costly litigation or enforcement actions[5](index=5&type=chunk)[509](index=509&type=chunk)[540](index=540&type=chunk)[553](index=553&type=chunk) - Stringent and evolving data protection laws (e.g., CCPA, CPRA) increase compliance costs and exposure to liability for data breaches or privacy failures[5](index=5&type=chunk)[517](index=517&type=chunk)[519](index=519&type=chunk)[546](index=546&type=chunk)[548](index=548&type=chunk) - Liability for inappropriate or misleading advertisements, especially concerning product claims or national symbols, could harm marketing and brand reputation[5](index=5&type=chunk)[514](index=514&type=chunk) - Changes in accounting principles (GAAP) or interpretations could significantly affect reported financial results[5](index=5&type=chunk)[527](index=527&type=chunk) - As a public company, the company faces increased legal, accounting, and administrative costs, and burdens related to SEC reporting and Sarbanes-Oxley Act compliance[6](index=6&type=chunk)[530](index=530&type=chunk)[561](index=561&type=chunk) [Risks Related to Our Corporate Structure](index=35&type=section&id=Risks%20Related%20to%20Our%20Corporate%20Structure) This section addresses risks from the company's corporate structure, including Tax Receivable Agreement payments, public benefit corporation status, and anti-takeover provisions - The Tax Receivable Agreement requires substantial cash payments to Unitholders of Authentic Brands for tax benefits, which could significantly exceed actual tax savings and impact liquidity[531](index=531&type=chunk)[532](index=532&type=chunk)[594](index=594&type=chunk)[596](index=596&type=chunk) - As a public benefit corporation, the board must balance stockholder interests with a public benefit purpose, which may negatively impact financial performance or make acquisitions more difficult[565](index=565&type=chunk)[597](index=597&type=chunk)[598](index=598&type=chunk)[599](index=599&type=chunk) - Anti-takeover provisions in the Charter and Bylaws, along with the influence of controlling stockholders (Evan Hafer), could delay or prevent acquisitions and changes in management[573](index=573&type=chunk)[574](index=574&type=chunk)[581](index=581&type=chunk)[605](index=605&type=chunk) - As a holding company, BRC Inc. is dependent on distributions from its subsidiaries to pay dividends and expenses, which could be restricted by debt agreements or regulations[572](index=572&type=chunk)[602](index=602&type=chunk) - Being an **'emerging growth company'** allows exemptions from certain reporting requirements, potentially making securities less attractive to investors or comparisons with other public companies difficult[584](index=584&type=chunk)[615](index=615&type=chunk)[644](index=644&type=chunk) - As a **'controlled company'** under NYSE rules, the company is exempt from certain corporate governance requirements, potentially reducing protections for public stockholders[618](index=618&type=chunk)[647](index=647&type=chunk) - There are no current plans to pay cash dividends, meaning stockholders must rely on stock appreciation for returns[621](index=621&type=chunk)[649](index=649&type=chunk)[664](index=664&type=chunk) [Item 1B. Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments from the SEC - No unresolved staff comments are reported[652](index=652&type=chunk)[975](index=975&type=chunk) [Item 2. Properties](index=42&type=section&id=Item%202.%20Properties) The company's material properties include owned facilities in Salt Lake City, San Antonio, and Manchester, along with leased stores and third-party warehouses Key Property Locations | Property Location | Approximate Size (sq. ft.) | Function | Owned/Leased | | :---------------- | :------------------------- | :---------------------------- | :----------- | | Salt Lake City, UT | 30,295 | HQ, Corporate and Manufacturing | Owned | | San Antonio, TX | 33,980 | Corporate | Owned | | Manchester, TN | 65,000 | Corporate and Manufacturing | Owned | - As of December 31, 2022, the company had **fifteen company-operated stores**, mostly leased[653](index=653&type=chunk) - Inventory is also held at various third-party warehouses[653](index=653&type=chunk) [Item 3. Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal actions, including an ongoing lawsuit by Tang Capital Partners, LP regarding warrant exercise - The company is subject to various legal actions in the ordinary course of business, with no expected material adverse effect[654](index=654&type=chunk)[971](index=971&type=chunk) - A lawsuit by Tang Capital Partners, LP, filed in **April 2022**, alleges damages from the company's refusal to permit warrant exercise[624](index=624&type=chunk)[973](index=973&type=chunk) - As of **March 8, 2023**, a breach of contract claim in the Tang Capital lawsuit was not dismissed, and the ultimate outcome or loss cannot be reasonably estimated[624](index=624&type=chunk)[973](index=973&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[625](index=625&type=chunk)[655](index=655&type=chunk) [Information About Our Executive Officers](index=42&type=section&id=Information%20About%20Our%20Executive%20Officers) This section provides biographical information for the company's executive officers, many of whom have military backgrounds, aligning with its veteran-focused mission Executive Officers and Positions | Name | Age | Position(s) Held | | :------------------------ | :-- | :--------------------------------------------- | | Roland Smith | 68 | Executive Chairman, Director | | Evan Hafer | 45 | Chief Executive Officer, Director | | Mat Best | 36 | Chief Branding Officer | | Tom Davin | 65 | Co-Chief Executive Officer, Director | | Greg Iverson | 47 | Chief Financial Officer | | Kristina Braendel (Smith) | 58 | Chief Accounting Officer | | Toby Johnson | 46 | Chief Operations Officer | | Andrew McCormick | 37 | General Counsel and Corporate Secretary | | Heath Nielsen | 55 | Chief Retail Officer | - Evan Hafer, founder and CEO, has **fifteen years of U.S. military service** as a Green Beret and worked as a CIA contractor[657](index=657&type=chunk) - Mat Best, co-founder and Chief Branding Officer, deployed **five times to Iraq and Afghanistan** with the 2nd Ranger Battalion[628](index=628&type=chunk) - Toby Johnson, COO, served **seven years as a U.S. Army AH-64D Apache Longbow pilot**[630](index=630&type=chunk) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) BRC Inc.'s Class A Common Stock began trading on the NYSE in February 2022, all warrants were redeemed in May 2022, and no cash dividends are planned - Class A Common Stock (BRCC) began trading on the NYSE on **February 10, 2022**[663](index=663&type=chunk) - All outstanding public and private warrants were redeemed in **May 2022**, with approximately **99.0%** of public warrants and **100.0%** of private placement warrants exercised on a cashless basis[687](index=687&type=chunk)[915](index=915&type=chunk) - The Board intends to retain future earnings for business operations and has no current plans to pay cash dividends[664](index=664&type=chunk) [Item 6. [Reserved]](index=44&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Overview and Business Combination](index=44&type=section&id=Overview%20and%20Business%20Combination) This section overviews Black Rifle Coffee Company's business and details the February 2022 Business Combination, accounted for as a reverse acquisition - Black Rifle Coffee Company is a rapidly growing, veteran-controlled coffee and media company with a loyal community and omnichannel distribution[691](index=691&type=chunk) - The Business Combination on **February 9, 2022**, resulted in BRC Inc. becoming the sole managing member of Authentic Brands, accounted for as a reverse acquisition[639](index=639&type=chunk)[693](index=693&type=chunk) - The company's omnichannel strategy includes Direct to Consumer (DTC), Wholesale, and Outposts[668](index=668&type=chunk) [Key Factors Affecting Our Performance](index=45&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Key performance drivers include increasing brand awareness, cost-effectively acquiring customers, driving repeat usage, expanding product lines, and managing the supply chain - Brand awareness and loyalty are critical, driven by an **'Inform, Inspire, Entertain'** marketing approach and leveraging social media[667](index=667&type=chunk)[694](index=694&type=chunk) - Ability to acquire and retain customers at a reasonable cost is key, with plans to expand brand awareness through national advertising and social media[672](index=672&type=chunk)[697](index=697&type=chunk) - Growth is affected by repeat usage of products and the successful expansion of product lines, such as the RTD coffee products[698](index=698&type=chunk)[699](index=699&type=chunk) - Supply chain management, including sourcing high-quality green coffee beans from diverse international suppliers and in-house roasting, is crucial[700](index=700&type=chunk) [Components of Our Results of Operations](index=46&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section defines the key components of the company's financial statements: net revenue, cost of goods sold, operating expenses, interest expense, and income tax provision - Revenue, net, reflects product sales adjusted for returns, discounts, and loyalty rewards[673](index=673&type=chunk) - Cost of goods sold includes raw materials, direct labor, shipping, warehousing, fulfillment, and credit card fees[674](index=674&type=chunk) - Operating expenses encompass marketing, advertising, salaries, wages, benefits, professional fees, and general corporate infrastructure costs[675](index=675&type=chunk) - Income taxes are accounted for using the asset and liability method, with a valuation allowance for deferred tax assets if realization is not more likely than not[677](index=677&type=chunk) [Results of Operations (Comparison of the year ended December 31, 2022 to the year ended December 31, 2021)](index=48&type=section&id=Results%20of%20Operations%20%28Comparison%20of%20the%20year%20ended%20December%2031,%202022%20to%20the%20year%20ended%20December%2031,%202021%29) Net revenue increased significantly in 2022, driven by channel growth, but a substantial net loss was reported due to fair value changes of liabilities Key Financial Highlights (2022 vs 2021) | Metric | 2022 (Thousands USD) | 2021 (Thousands USD) | Change (Thousands USD) | Change (%) | | :------------------------- | :------------------- | :------------------- | :--------------------- | :--------- | | Revenue, net | $301,313 | $233,101 | $68,212 | 29 | | Cost of goods sold | $202,134 | $143,414 | $58,720 | 41 | | Gross profit | $99,179 | $89,687 | $9,492 | 11 | | Gross margin | 32.9% | 38.5% | -5.6 percentage points | | | Total operating expenses | $166,941 | $101,266 | $65,675 | 65 | | Operating income (loss) | $(67,762) | $(11,579) | $(56,183) | 485 | | Total other expense, net | $(269,915) | $(2,088) | $(267,827) | 12827 | | Earnings (loss) before tax | $(337,677) | $(13,667) | $(324,010) | 2370 | | Net income (loss) | $(338,044) | $(13,845) | $(324,199) | 2342 | - Net revenue increased by **$68.2 million (29.3%)** to **$301.3 million** in 2022, driven by Wholesale and Outpost channel growth[707](index=707&type=chunk) - Cost of goods sold increased by **$58.7 million (40.9%)** due to higher sales and a product mix shift towards RTD, leading to a **560 basis point decrease** in gross margin[709](index=709&type=chunk) - Operating expenses increased by **$65.7 million (64.9%)** due to higher headcount, increased marketing spend, and corporate infrastructure expansion[710](index=710&type=chunk)[737](index=737&type=chunk) - Significant non-operating losses of **$269.9 million** were recognized from changes in fair value of earn-out liabilities (**$209.7 million**), warrant liabilities (**$56.7 million**), and derivative liabilities (**$2.3 million**)[713](index=713&type=chunk)[738](index=738&type=chunk)[740](index=740&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash sources include cash on hand, operating activities, and credit facilities, with significant financing from the Business Combination in 2022 - Primary cash sources are cash on hand, operating activities, and credit facilities[715](index=715&type=chunk) Cash Flows (2022 vs 2021) | Activity | 2022 (Thousands USD) | 2021 (Thousands USD) | | :------------------- | :------------------- | :------------------- | | Operating activities | $(116,190) | $(7,691) |\n| Investing activities | $(30,404) | $(19,287) |\n| Financing activities | $167,250 | $9,680 | - Net cash used in operating activities increased by **$108.5 million** in 2022, primarily due to net loss and increases in accounts receivable and inventories[721](index=721&type=chunk) - Net cash provided by financing activities increased by **$157.6 million** in 2022, mainly from Business Combination proceeds (**$338.0 million**) offset by preferred equity redemption and transaction costs[750](index=750&type=chunk) - As of December 31, 2022, cash and cash equivalents were **$39.0 million**, with **$31.3 million** available under credit facilities[715](index=715&type=chunk)[743](index=743&type=chunk) - The company entered into a new Senior Credit Facility in **November 2022** for up to **$65 million**, bearing a variable interest rate[746](index=746&type=chunk) - Significant purchase commitments for coffee products are **$44.6 million** for 2023 and **$26.5 million** for 2024[751](index=751&type=chunk)[970](index=970&type=chunk) - Operating lease commitments not yet commenced total **$66.8 million**, primarily for real estate leases starting in 2023-2024[725](index=725&type=chunk) [Critical Accounting Estimates](index=53&type=section&id=Critical%20Accounting%20Estimates) This section highlights critical accounting estimates requiring significant judgment, including revenue recognition for loyalty programs and equity-based compensation fair value - Revenue recognition involves estimates for product delivery dates and variable consideration like discounts and returns[754](index=754&type=chunk)[780](index=780&type=chunk) - The Loyalty Program requires deferring revenue for expected redemptions, with estimates based on historical expiration rates[729](index=729&type=chunk)[755](index=755&type=chunk)[756](index=756&type=chunk) - Equity-based compensation fair value estimates for incentive units, stock options, and PSUs involve complex assumptions about future revenue, expenses, cash flows, and discount rates[730](index=730&type=chunk)[757](index=757&type=chunk)[783](index=783&type=chunk) [Recent Accounting Pronouncements](index=54&type=section&id=Recent%20Accounting%20Pronouncements) The company adopted new FASB guidance on convertible instruments and leases in 2022, with the lease standard materially impacting the balance sheet - Adopted new FASB guidance on convertible instruments and contracts in own equity on **January 1, 2022**, with no material impact[861](index=861&type=chunk) - Adopted new FASB guidance on leases (ASU No. 2016-02) on **January 1, 2022**, materially impacting the consolidated balance sheet by recognizing **$7.56 million** in right-of-use assets and **$7.69 million** in lease liabilities[791](index=791&type=chunk)[862](index=862&type=chunk) - As an **'emerging growth company'**, the company delays adoption of new accounting standards, which may affect comparability[758](index=758&type=chunk)[784](index=784&type=chunk) - A new credit loss standard, effective after **December 15, 2022**, is not expected to have a material impact[893](index=893&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks primarily from commodity price volatility (coffee beans, dairy, aluminum) and interest rate fluctuations on its variable-rate debt - Commodity price risk is a primary market risk, affected by the cost of coffee beans, dairy products, and aluminum cans[785](index=785&type=chunk) - Increases in the **'C' coffee commodity price** directly impact the cost of high-quality coffee beans[785](index=785&type=chunk) - Interest rate risk stems from variable-rate debt (Senior Credit Facility, Equipment Line) tied to BSBY, with a hypothetical **5% increase** potentially adding **$1.7 million** in interest expense[786](index=786&type=chunk) - Inflation adversely affects operating results by increasing costs for products, overhead, and freight, which the company attempts to offset through price increases and efficiency[787](index=787&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) [Report of Independent Registered Public Accounting Firm](index=57&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on BRC Inc.'s consolidated financial statements for 2022 and 2021, noting a change in lease accounting - Ernst & Young LLP provided an unqualified opinion on the consolidated financial statements for **2022 and 2021**[790](index=790&type=chunk) - The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement[766](index=766&type=chunk)[793](index=793&type=chunk) - The company changed its method of accounting for leases in **2022** due to the adoption of ASU No. 2016-02[791](index=791&type=chunk) [Consolidated Financial Statements](index=58&type=section&id=Consolidated%20Financial%20Statements) This section presents the audited consolidated financial statements, including Balance Sheets, Statements of Operations, Stockholders' Deficit, and Cash Flows Consolidated Balance Sheets (Amounts in Thousands) | Assets/Liabilities/Equity | Dec 31, 2022 | Dec 31, 2021 | | :------------------------ | :----------- | :----------- | | **Assets:** | | | | Cash and cash equivalents | $38,990 | $18,334 | | Accounts receivable, net | $22,337 | $7,442 | | Inventories | $77,183 | $20,872 | | Total current assets | $145,293 | $53,025 | | Property and equipment, net | $59,451 | $31,114 | | Operating lease, ROU asset | $20,050 | — | | Total assets | $225,334 | $87,082 | | **Liabilities:** | | | | Accounts payable | $12,429 | $17,387 | | Accrued liabilities | $36,660 | $22,233 | | Deferred revenue | $9,505 | $7,334 | | Total current liabilities | $62,192 | $59,018 | | Long-term debt, net | $47,017 | $22,712 | | Operating lease liability | $19,466 | — | | Total liabilities | $129,398 | $82,292 | | **Equity:** | | | | Total stockholders' equity/members' deficit | $95,936 | $(149,491) | Consolidated Statements of Operations (Amounts in Thousands) | Metric | 2022 | 2021 | 2020 | | :------------------------- | :----------- | :----------- | :----------- | | Revenue, net | $301,313 | $233,101 | $163,909 | | Gross profit | $99,179 | $89,687 | $69,409 | | Operating income (loss) | $(67,762) | $(11,579) | $5,780 | | Earnings (loss) before tax | $(337,677) | $(13,667) | $4,506 | | Net income (loss) | $(338,044) | $(13,845) | $4,321 | | Net loss attributable to BRC Inc. | $(82,906) | | | | Basic and diluted EPS | $(1.62) | | | Consolidated Statements of Cash Flows (Amounts in Thousands) | Activity | 2022 | 2021 | 2020 | | :------------------- | :----------- | :----------- | :----------- | | Operating activities | $(116,190) | $(7,691) | $11,546 | | Investing activities | $(30,404) | $(19,287) | $(9,760) | | Financing activities | $167,250 | $9,680 | $28,811 | | Net increase (decrease) in cash | $20,656 | $(17,298) | $30,597 | | Ending cash | $38,990 | $18,334 | $35,632 | [Notes to Consolidated Financial Statements](index=64&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies, estimates, and specific financial statement line items, offering crucial context for the financial figures - The Business Combination was accounted for as a reverse recapitalization, with Authentic Brands as the accounting acquirer[835](index=835&type=chunk) - Revenue is recognized when control of products or services transfers to the customer, with estimates for delivery dates and variable consideration[838](index=838&type=chunk) Revenue by Sales Channel (Amounts in Thousands) | Channel | 2022 | 2021 | 2020 | | :--------------- | :-------- | :-------- | :-------- | | Direct to Consumer | $159,022 | $165,299 | $137,724 | | Wholesale | $119,360 | $55,761 | $23,351 | | Outpost | $22,931 | $12,041 | $2,834 | | Total net sales | $301,313 | $233,101 | $163,909 | - Deferred revenue and gift card liability increased to **$9.5 million** in 2022 from **$7.3 million** in 2021[276](index=276&type=chunk) - Long-term debt, net, increased to **$49.2 million** in 2022 from **$34.7 million** in 2021, including mortgages, equipment loans, and a new Senior Credit Facility[931](index=931&type=chunk) - Operating lease liabilities, recognized under new guidance, totaled **$13.8 million** for ROU assets, with future minimum payments of **$109.7 million**[369](index=369&type=chunk)[942](index=942&type=chunk) - Significant losses were recognized from changes in fair value of earn-out liabilities (**$209.7 million**) and warrant liabilities (**$56.7 million**) in 2022 due to stock price increases[346](index=346&type=chunk)[349](index=349&type=chunk)[713](index=713&type=chunk)[946](index=946&type=chunk)[948](index=948&type=chunk) - Equity-based compensation expense for 2022 was **$6.1 million**, with unrecognized expense of **$6.8 million** for RSUs, **$3.3 million** for stock options, and **$3.9 million** for PSUs[84](index=84&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[804](index=804&type=chunk)[956](index=956&type=chunk) - The company recognized a full valuation allowance of **$84.1 million** against its deferred tax assets in 2022 due to cumulative losses[419](index=419&type=chunk) - Net loss per share attributable to Class A Common Stock was **$(1.62)** for the period after the Business Combination through December 31, 2022[800](index=800&type=chunk)[968](index=968&type=chunk) - The company has significant concentrations with **five coffee vendors (55.6% of purchases in 2022)** and **four shipping vendors (73.7% of expenses in 2022)**[425](index=425&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=91&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) This section states that there have been no changes in or disagreements with accountants on accounting and financial disclosures - No changes in or disagreements with accountants on accounting and financial disclosures are reported[407](index=407&type=chunk)[975](index=975&type=chunk) [Item 9A. Controls and Procedures](index=91&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management assessed the effectiveness of disclosure controls and internal control over financial reporting as effective as of December 31, 2022 - Disclosure controls and procedures were evaluated and deemed effective as of **December 31, 2022**[976](index=976&type=chunk) - Management concluded that internal control over financial reporting was effective as of **December 31, 2022**[446](index=446&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended **December 31, 2022**[406](index=406&type=chunk) [Item 9B. Other Information](index=91&type=section&id=Item%209B.%20Other%20Information) This section states that there is no other information to report - No other information is reported[447](index=447&type=chunk)[978](index=978&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=91&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section states that there are no disclosures regarding foreign jurisdictions that prevent inspections - No disclosures regarding foreign jurisdictions that prevent inspections are reported[431](index=431&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=92&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from Part I and the 2023 Proxy Statement - Information on executive officers is reported in Part I of this report[448](index=448&type=chunk) - Other information is incorporated by reference from the **2023 Proxy Statement**[980](index=980&type=chunk) [Item 11. Executive Compensation](index=92&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 'Executive Compensation' section of the 2023 Proxy Statement - Information on executive compensation is incorporated by reference from the **'Executive Compensation'** section of the **2023 Proxy Statement**[433](index=433&type=chunk)[449](index=449&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=92&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and related stockholder matters is incorporated by reference from the 2023 Proxy Statement - Information on security ownership and related stockholder matters is incorporated by reference from the **2023 Proxy Statement**[434](index=434&type=chunk)[981](index=981&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=92&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2023 Proxy Statement - Information on certain relationships and director independence is incorporated by reference from the **2023 Proxy Statement**[434](index=434&type=chunk)[450](index=450&type=chunk) [Item 14. Principal Accounting Fees and Services](index=92&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2023 Proxy Statement - Information on principal accounting fees and services is incorporated by reference from the **2023 Proxy Statement**[435](index=435&type=chunk)[450](index=450&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=93&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the financial statements and schedules included in the report, along with a comprehensive list of exhibits filed - Financial statements and schedules are included as part of this item[452](index=452&type=chunk) - A list of exhibits, including business combination agreements, organizational documents, and incentive plans, is provided[436](index=436&type=chunk)[936](index=936&type=chunk) - Certain schedules and similar attachments to exhibits have been omitted[328](index=328&type=chunk) [Item 16. Form 10-K Summary](index=95&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section indicates that there is no Form 10-K summary provided - No Form 10-K summary is provided[329](index=329&type=chunk)[455](index=455&type=chunk) [Signatures](index=96&type=section&id=Signatures) This section contains the required signatures for the Form 10-K report, confirming authorization and responsibility for the filing - The report is signed by Evan Hafer, Chief Executive Officer, and other executive officers and directors[333](index=333&type=chunk)[334](index=334&type=chunk)[337](index=337&type=chunk) - Signatures confirm due authorization and responsibility for the report[332](index=332&type=chunk)