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In particular, our plan for the: (1) 2021 cash flow forecast, considered the use of our working capital line with FastPay (as described in Note 28, Subsequent Events, to our accompanying consolidated financial statements) to fund changes in working capital, where we have available credit of approximately $8.7 million as of the issuance date of our accompanying consolidated financial statements for the year ended December 31, 2019, and that we do not anticipate the need for any further borrowings that are subject to the holders approval, from our Term Note (as described in Note 28, Subsequent Events, to our accompanying consolidated financial statements) where we may be permitted to borrow up to an additional $5 million; and (2) 2021 operating budget, considered that approximately sixty-five percent of our revenue is from recurring subscriptions, generally paid in advance, and that digital subscription revenue, that accounts for approximately thirty percent of subscription revenue, grew approximately thirty percent in 2020 demonstrating the strength of our premium brand, and the plan to continue to grow our subscription revenue from our 2019 acquisition of TheStreet (as described in Note 28, Subsequent Events, to our accompanying consolidated financial statements) and to launch premium digital subscriptions from our Sports Illustrated licensed brands (as described in Note 28, Subsequent Events, to our accompanying consolidated financial statements), in January 2021. |
The fair value measurement of equity awards and grants used for stock-based compensation is as follows: (1) restricted stock awards which are time-vested are determined using the quoted market price of the Company’s common stock at the grant date; (2) restricted stock units and stock option grants which are time-vested and performance-vested are determined utilizing the Black-Scholes option-pricing model at the grant date; (3) restricted stock awards which provide for performance-vesting and a true-up provision are determined through consultants with our independent valuation firm using the binomial pricing model at the grant date; (4) stock option grants which provide for market-based vesting with a time-vesting overlay are determined through consultants with our independent valuation firm using the Monte Carlo model at the grant date; (5) Channel Partner warrants are determined utilizing the Black-Scholes option-pricing model; and (6) AGB Warrants are determined utilizing the Monte Carlo model (as further described in our accompanying consolidated financial statements in Note 21, Stock Based Compensation). |
The Warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants will vest in equal monthly increments over a period of two years beginning on the one-year anniversary of the date of issuance of the Warrants (any unvested portion of such Warrants to be forfeited by ABG upon certain terminations by us of the Sports Illustrated Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants will vest based on the achievement of certain performance goals for the Sports Illustrated Licensed Brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances we may require ABG to exercise all (and not less than all) of the Warrants, in which case all of the Warrants will be vested; (4) all of the Warrants will automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of us; and (5) ABG will have the right to participate, on a pro-rata basis (including vested and unvested Warrants, exercised or unexercised), in any of our future equity issuances (subject to customary exceptions). |
In particular, the Company’s plan for the: (1) 2021 cash flow forecast, considered the use of its working capital line with FastPay (as described in Note 28 to fund changes in working capital, where the Company has available credit of approximately $8.7 million as of the issuance date of these consolidated financial statements for the year ended December 31, 2019, and that the Company does not anticipate the need for any further borrowings that are subject to the holders approval, from its Term Note (as described in Note 28) where the Company may be permitted to borrow up to an additional $5 million; and (2) 2021 operating budget, considered that approximately sixty-five percent of the Company’s revenue is from recurring subscriptions, generally paid in advance, and that digital subscription revenue, that accounts for approximately thirty percent of subscription revenue, grew approximately thirty percent in 2020 demonstrating the strength of its premium brand, and the plan to continue to grow its subscription revenue from its 2019 acquisition of TheStreet (as described in Note 3) and to launch premium digital subscriptions from its Sports Illustrated licensed brands (as described in Note 3), in January 2021. |
The fair value measurement of equity awards and grants used for stock-based compensation is as follows: (1) restricted stock awards which are time-vested, are determined using the quoted market price of the Company’s common stock at the grant date; (2) restricted stock units and stock option grants which are time-vested and performance-vested, are determined utilizing the Black-Scholes option-pricing model at the grant date; (3) restricted stock awards which provide for performance-vesting and a true-up provision, are determined through consultants with the Company’s independent valuation firm using the binomial pricing model at the grant date; (4) stock option grants which provide for market-based vesting with a time-vesting overlay, are determined through consultants with the Company’s independent valuation firm using the Monte Carlo model at the grant date; (5) Channel Partner Warrants are determined utilizing the Black-Scholes option-pricing model; and (6) AGB warrants are determined utilizing the Monte Carlo model (further details are provided in Note 21). |
Licensing Agreement with ABG-SI LLC - On June 14, 2019, the Company and ABG, a Delaware limited liability company and indirect wholly owned subsidiary of Authentic Brands Group, entered into the Sports Illustrated Licensing Agreement, pursuant to which the Company has the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia, and New Zealand to operate the Sports Illustrated media business (in the English and Spanish languages), including to (i) operate the digital and print editions of Sports Illustrated (including all special interest issues and the swimsuit issue) and Sports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands, and (iii) operate certain related businesses, including without limitation, special interest publications, video channels, bookazines and the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “Sports Illustrated Licensed Brands”). |
HubPages, Inc. - On March 13, 2018, the Company and HubPages, together with HP Acquisition Co, Inc. (“HPAC”), a wholly owned subsidiary of the Company incorporated in Delaware on March 13, 2018 in order to facilitate the acquisition of HubPages by the Company, entered into an Agreement and Plan of Merger (the “Agreement and Plan of Merger”), and as amended by the Amendment to Agreement and Plan of Merger, dated April 25, 2018 (the “First Amendment”), the Second Amendment to Agreement and Plan of Merger, dated June 1, 2018 (the “Second Amendment”), the Third Amendment to Agreement and Plan of Merger, dated May 31, 2019 (the “Third Amendment”), and the Fourth Amendment to Agreement and Plan of Merger, dated December 15, 2020 (the “Fourth Amendment” and, collectively with the Agreement and Plan of Merger, the First Amount, the Second Amendment, and the Third Amendment, the “HubPages Merger Agreement”), pursuant to which HPAC merged with and into HubPages, with HubPages continuing as the surviving corporation in the merger and as a wholly owned subsidiary of the Company (the “HubPages Merger”). |
Fundamental Transaction - Fundamental Transaction, in general, means: (a) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation; (b) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions; (c) any, direct or indirect, purchase offer, tender offer or exchange offer is completed pursuant to which the Company common stock holders are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the Company’s outstanding common stock; (d) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Company’s common stock or any compulsory share exchange pursuant to which the common stock is effectively converted into or exchanged for other securities, cash or property, or (e) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination whereby such transaction results in an acquisition of more than 50% of the outstanding shares of the Company’s common stock, subject to certain other conditions. |
Preferred Stock The Company has the authority to issue 1,000,000 shares of preferred stock, $0.01 par value per share, consisting of authorized and/or outstanding shares as of December 31, 2019 as follows: ● 2,000 authorized shares designated as “Series F Convertible Preferred Stock,” none of which are outstanding; ● 1,800 authorized shares designated as “Series G Convertible Preferred Stock” (as further described below), of which 168.496 shares are outstanding; ● 23,000 authorized shares designated as “Series H Convertible Preferred Stock” (as further described below), of which 19,400 shares are outstanding; ● 25,800 authorized shares designated as “Series I Convertible Preferred Stock” (as further described below), of which 23,100 shares were outstanding (further details subsequent to the date of these consolidated financial statements are provided below); and ● 35,000 authorized shares designated as “Series J Convertible Preferred Stock” (as further described below), of which 20,000 shares were outstanding (further details subsequent to the date of these consolidated financial statements are provided below). |
The warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants vest in equal monthly increments over a period of two years beginning on the one year anniversary of the date of issuance of the warrants (any unvested portion of such warrants to be forfeited by ABG upon certain terminations by the Company of the Sports Illustrated Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants vest based on the achievement of certain performance goals for the licensed brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances the Company may require ABG to exercise all (and not less than all) of the warrants, in which case all of the warrants will be vested; (4) all of the warrants automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company; and (5) ABG has the right to participate, on a pro-rata basis (including vested and unvested warrants, exercised or unexercised), in any future equity issuance of the Company (subject to customary exceptions). |
Condensed Consolidated Statements of Operations (unaudited) Condensed Consolidated Statements of Cash Flows (unaudited) Table A - The following table sets forth information about contract balances: Table B - The following table sets forth prepayments and other current assets: Table C - The following table sets forth capitalized costs for platform development: Table D - The following table sets forth acquired and other intangible assets: Table E - The following table sets forth goodwill: Table F - The following table sets forth accrued expenses and other: Table G - The following table sets forth liquidated damages payable: Table H - The following table sets forth the carrying value and roll-forward of activity for the Company’s warrants accounted for as a derivative liability (see Note 15) and classified within Level 3 of the fair-value hierarchy: Table I - The following table sets forth the carrying amount, valuation and a roll-forward of activity for the conversion option features, buy-in features, and default remedy features for the 12% Convertible Debentures (see Note 17) accounted for as embedded derivative liabilities and classified within Level 3 of the fair-value hierarchy: Table J - The following table sets forth the operating lease liabilities: Table K - The following sets forth stock-based compensation expense that is included in the line items presented on the consolidated statements of operations and capitalized platform development: Table L - The following table sets forth the carrying value and related debt components of the 12% Convertible Debentures: Table M - The following table sets forth information about revenue by product line, geographical market and timing of revenue recognition: Table N - The following table sets forth information about interest expense: 28. |
3 to Licensing Agreement, dated July 28, 2020 (the “Third Amendment” and, together with the Initial Licensing Agreement, First Amendment, and the Second Amendment, the “Sports Illustrated Licensing Agreement”) with ABG-SI LLC (“ABG”), a Delaware limited liability company and indirect wholly-owned subsidiary of Authentic Brands Group, pursuant to which we have the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia and New Zealand to operate the Sports Illustrated (“Sports Illustrated”) media business (in the English and Spanish languages), including to (i) operate the digital and print editions of Sports Illustrated (including all special interest issues and the swimsuit issue) and Sports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands and (iii) operate certain related businesses, including without limitation, special interest publications, video channels, bookazines and the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “Sports Illustrated Licensed Brands”). |
A number of factors could negatively affect user retention, growth, and engagement, including if: ●users increasingly engage with competing platforms instead of ours; ●we fail to introduce new and exciting products and services, or such products and services do not achieve a high level of market acceptance; ●we fail to accurately anticipate consumer needs, or we fail to innovate and develop new software and products that meet these needs; ●we fail to price our products competitively; ●we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we display; ●we are unable to combat spam, bugs, malwares, viruses, hacking, or other hostile or inappropriate usage on our products; ●there are changes in user sentiment about the quality or usefulness of our existing products in the short-term, long-term, or both; ●there are increased user concerns related to privacy and information sharing, safety, or security; ●there are adverse changes in our products or services that are mandated by legislation, regulatory authorities, or legal proceedings; ●technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our products in a fast and reliable manner; ●we, our Channel Partners, or other companies in our industry are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; or ●we fail to maintain our brand image or our reputation is damaged. |
In particular, our plan for the: (1) 2021 cash flow forecast, considered the use of our working capital line with FastPay (as described in Note 24, Subsequent Events, to our accompanying consolidated financial statements) to fund changes in working capital, where we have available credit of approximately $8 million as of the issuance date of the accompanying consolidated financial statements, and that we do not anticipate the need for any further borrowings that are subject to the holders approval, from our 12% amended senior secured notes (as described in Note 24, Subsequent Events, to our accompanying consolidated financial statements) where we may be permitted to borrow up to an additional $5 million; and (2) 2021 operating budget, considered that approximately sixty-five percent of our revenue is from recurring subscriptions, generally paid in advance, and that digital subscription revenue, that accounts for approximately thirty percent of subscription revenue, grew approximately thirty percent in 2020 demonstrating the strength of our premium brand, and the plan to continue to grow our subscription revenue from our 2019 acquisition of TheStreet (as described in Note 24, Subsequent Events, to our accompanying consolidated financial statements) and to launch premium digital subscriptions from our Sports Illustrated licensed brands (as described in Note 24, Subsequent Events, to our accompanying consolidated financial statements), in January 2021. |
The Warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants will vest in equal monthly increments over a period of two years beginning on the one-year anniversary of the date of issuance of the Warrants (any unvested portion of such Warrants to be forfeited by ABG upon certain terminations by us of the Sports Illustrated Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants will vest based on the achievement of certain performance goals for the Sports Illustrated Licensed Brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances we may require ABG to exercise all (and not less than all) of the Warrants, in which case all of the Warrants will be vested; (4) all of the Warrants will automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of us; and (5) ABG will have the right to participate, on a pro-rata basis (including vested and unvested Warrants, exercised or unexercised), in any of our future equity issuances (subject to customary exceptions). |
The Warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants will vest in equal monthly increments over a period of two years beginning on the one-year anniversary of the date of issuance of the Warrants (any unvested portion of such Warrants to be forfeited by ABG upon certain terminations by us of the Sports Illustrated Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants will vest based on the achievement of certain performance goals for the Sports Illustrated Licensed Brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances we may require ABG to exercise all (and not less than all) of the Warrants, in which case all of the Warrants will be vested; (4) all of the Warrants will automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of us; and (5) ABG will have the right to participate, on a pro-rata basis (including vested and unvested Warrants, exercised or unexercised), in any of our future equity issuances (subject to customary exceptions). |
In particular, the Company’s plan for the: (1) 2021 cash flow forecast, considered the use of our working capital line with FastPay (as described in Note 24) to fund changes in working capital, where it has available credit of approximately $8 million as of the issuance date of these consolidated financial statements, and that it does not anticipate the need for any further borrowings that are subject to the holders approval, from its 12% Amended Senior Secured Notes (as described in Note 24) where it may be permitted to borrow up to an additional $5 million; and (2) 2021 operating budget, considered that approximately sixty-five percent of the Company’s revenue is from recurring subscriptions, generally paid in advance, and that digital subscription revenue, that accounts for approximately thirty percent of subscription revenue, grew approximately thirty percent in 2020 demonstrating the strength of its premium brand, and the plan to continue to grow its subscription revenue from the 2019 acquisition of TheStreet (as described in Note 24) and to launch premium digital subscriptions from its Sports Illustrated licensed brands (as described in Note 24), in January 2021. |
Upon issuance of the 12% Convertible Debentures, the Company recognized the following embedded derivative liabilities that were bifurcated from the note instruments: ● Conversion option - (1) At any time after the original issue date until the note is no longer outstanding, the note shall be convertible, in whole or in part, into shares of common stock at the option of the holder at a conversion price of $0.33 per share (or 39,671,296 shares), and (2) at any time and from time to time subject to: (i) an issuance limitations, which limits the holders conversion of the note into shares of common stock in excess of 566,398, proportional to the holders convertible shares to the total convertible shares under the note, until the Company has an authorized share increase (as further described in Note 2 and 24 under the heading Sequencing Policy), and (ii) a beneficial ownership limitations, which prevents conversion if the common stock shares held by the holder exceeds 4.99% of the common stock outstanding (subject to increase by the holder to 9.99%)). |
Fundamental Transaction - Fundamental Transaction, in general, means: (a) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation; (b) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions; (c) any, direct or indirect, purchase offer, tender offer or exchange offer is completed pursuant to which the Company common stock holders are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the Company’s outstanding common stock; (d) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Company’s common stock or any compulsory share exchange pursuant to which the common stock is effectively converted into or exchanged for other securities, cash or property, or (e) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination whereby such transaction results in an acquisition of more than 50% of the outstanding shares of the Company’s common stock, subject to certain other conditions. |
ABG-SI LLC Licensing Agreement On June 14, 2019, the Company and ABG-SI LLC (“ABG”), a Delaware limited liability company and indirect wholly-owned subsidiary of Authentic Brands Group, entered into a licensing agreement (the “Licensing Agreement”) pursuant to which the Company shall have the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia and New Zealand to operate the Sports Illustrated media business (in the English and Spanish languages), including to (i) operate the digital and print editions of Sports Illustrated (including all special interest issues and the swimsuit issue) and Sports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands and (iii) operate certain related businesses, including without limitation, special interest publications, video channels, bookazines and the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “licensed brands”). |
The Warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants shall vest in equal monthly increments over a period of two years beginning on the one year anniversary of the date of issuance of the Warrants (any unvested portion of such Warrants to be forfeited by ABG upon certain terminations by the Company of the Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants shall vest based on the achievement of certain performance goals for the licensed brands in calendar years 2020, 2021, 2022 or 2023; (3) under certain circumstances the Company may require ABG to exercise all (and not less than all) of the Warrants, in which case all of the Warrants shall be vested; (4) all of the Warrants shall automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company; and (5) ABG shall have the right to participate, on a pro-rata basis (including vested and unvested Warrants, exercised or unexercised), in any future equity issuance of the Company (subject to customary exceptions). |
On April 10, 2019, the Company entered into an Advisory Services Agreement with Mr. Levinsohn to provide advisory services with respect to strategic transactions in the media and digital publishing industries, in exchange for which Mr. Levinsohn was granted a stock option to purchase 532,004 shares of the Company’s common stock, exercisable for a period of 10 years at $0.46 per share (the closing market price on April 10, 2019) subject to vesting (i) based on the achievement by the Company of stock price and liquidity targets and becoming listed on a national securities exchange and (ii) a concurrent 36-month vesting period with a 12-month cliff, and were not exercisable until the Company increased its authorized shares of common stock to a sufficient number to permit the full exercise of the stock options granted; accordingly, these stock option grants were considered unfunded and were not permitted to be exercised until sufficient common shares were authorized (further details are provided under the heading Sequencing Policy). |
Factors that may slow or harm our business or cause our operating results to fluctuate include the following: · The market acceptance of, and demand for, our products; · Our ability to attract new Channel Partners and Internet unique visitors or maintain existing users’ satisfaction at a reasonable cost; · Our ability to close mergers and acquisitions of related online media, publishing and technology companies; · The revenue based on our technology; · Changes in alternative technologies, industry standards and customer or end user preferences; · The length of our advertising and membership sales cycles; · The timing of customer payments and payment defaults by customers; · Our ability to attract and retain key personnel, including experienced software developers; · A gain or loss of significant customers and publishers or their confidence in our platform; · Software design, development and operational defects and other quality problems; · Significant security breaches, technical difficulties, or interruptions to our technology platform; · Economic conditions affecting our potential customers; · Extraordinary expenses such as litigation; · The number, timing and significance of product enhancements and new product introductions by competitors; and · Our failure to increase sales and or penetrate new markets. |
Pursuant to the terms of the non-binding Letter of Intent, the aggregate consideration proposed to be payable in connection with the acquisition of Say Media is $20 million, comprised of (A) $7.5 million in cash, consisting of (i) a $1 million Note (as described below), and (ii) $6.5 million in cash; (B) $9.6 million of Maven common stock and options to purchase shares of Maven common stock (valued at a price of $2.50 per share), consisting of (i) 2,088,900 shares of common stock to be issued at closing to the stockholders of Say Media, and (ii) 1,751,100 options to purchase shares of common stock to be issued to certain employees of Say Media who accept offers of continued employment with Say Media as the surviving company; and (C) $2.9 million in cash and common stock consisting of (i) a $2.5 million short-term, secured promissory note due 90 days after closing, (the “Maven Note”), to be secured by all of the assets, tangible and intangible, of Maven and its subsidiaries (including HubPages, Inc. and/or Say Media, assuming the consummation of those respective acquisitions), and (ii) 160,000 shares of common stock, to be issued to an affiliated entity of Say Media’s chief executive officer (the “Say Lender”), in satisfaction of certain senior promissory notes issued by Say Media. |
Factors that may slow or harm our business or cause our operating results to fluctuate include the following: •The market acceptance of, and demand for, our products; •Our inability to attract new Channel Partners and Internet unique visitors or maintain existing users satisfaction at a reasonable cost; •The revenue based on our technology; •Changes in alternative technologies, industry standards and customer or end user preferences; •The length of our advertising and membership sales cycles; •The timing of customer payments and payment defaults by customers; •Our inability to attract and retain key personnel, including experienced software developers; •A gain or loss of significant customers and publishers or their confidence in our platform; •Software design, development and operational defects and other quality problems; •Significant security breaches, technical difficulties, or interruptions to our technology platform; •Economic conditions affecting our potential customers; •Extraordinary expenses such as litigation; •The number, timing and significance of product enhancements and new product introductions by competitors; and •Our failure to increase sales and or penetrate new markets. |
Based solely on a review of copies of the reports furnished to the Company and written representations from persons concerning the necessity to file these reports, the Company is not aware of any failure to file reports or report transactions in a timely manner including during the fiscal year ended December 31, 2012 except that: (i) during the period July 29, 2009 to December 31, 2012, Christopher Marlett did not file either Forms 4 or Forms 5 to report under Section 16(a) issuances of restricted stock of the Company as compensation under the provisions of Section 16b-3; however, these reports have now been filed as late forms to report the issuances, and no sale transactions or their equivalent were reported by Mr. Marlett; (ii) during the period July 29, 2009 to December 31, 2012, Robert Levande did not file either Forms 4 or Forms 5 to report under Section 16(a) issuances of restricted stock of the Company as compensation under the provisions of Section 16b-3; however, these reports have now been filed as late forms to report the issuances, and no sale transactions or their equivalent were reported by Mr. Levande; and (iii) during the period July 7, 2011 to December 31, 2012, Peter Mills did not file either Forms 4 or Forms 5 to report under Section 16(a) issuances of restricted stock of the Company as compensation under the provisions of Section 16b-3; however, these reports have now been filed as late forms to report the issuances, and no sale transactions or their equivalent were reported by Mr. Mills. |
Based solely on a review of copies of the reports furnished to the Company and written representations from persons concerning the necessity to file these reports, the Company is not aware of any failure to file reports or report transactions in a timely manner during the fiscal year ended December 31, 2011 except that (i) Christopher Marlett is late on Form 4 filings reporting the acquisition of 68,480 shares, 23,150 shares, 21,522 shares, 19,532 shares, 20,834 shares, 20,162 shares, 18,383 shares, 18,940 shares, 16,892 shares, 16,892 shares and 22,332 shares (acquired on different dates) and may, through his ownership of, and management position at, MDB, be late on a Form 4 filing reporting the acquisition of 157,500 shares by MDB (of which Mr. Marlett may disclaim any beneficial ownership except to the extent of his pecuniary interest, and subsequently sold to Martin Stephen Walker) and (ii) Robert Levande is late on Form 4 filings reporting the acquisition of 68,480 shares, 23,150 shares, 21,552 shares, 19,532 shares, 20,834 shares, 20,162 shares, 18,383 shares, 18,940 shares, 16,892 shares, 16,892 shares and 22,332 shares (acquired on different dates). |
Based solely on a review of copies of the reports furnished to the Company and written representations from persons concerning the necessity to file these reports, the Company is not aware of any failure to file reports or report transactions in a timely manner during the fiscal year ended December 31, 2010 except that (i) Christopher Marlett is late on Form 4 filings reporting the acquisition of 68,480 shares, 23,150 shares, 21,522 shares, 19,532 shares, 20,834 shares, 20,162 shares, 18,383 shares and 18,940 shares (acquired on different dates) and may, through his ownership of, and management position at, MDB, be late on a Form 4 filing reporting the acquisition of 157,500 shares by MDB (of which Mr. Marlett may disclaim any beneficial ownership except to the extent of his pecuniary interest, and subsequently sold to Martin Stephen Walker) and (ii) Robert Levande is late on Form 4 filings reporting the acquisition of 68,480 shares, 23,150 shares, 21,552 shares, 19,532 shares, 20,834 shares, 20,162 shares, 18,383 shares and 18,940, shares (acquired on different dates). |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include, but are not limited to the following: The number of Associates and Preferred Customers who join our business, purchase our products, and stay with our business; The opening of new markets; The timing of Company-sponsored events, contests, and promotions; Fluctuations in currency exchange rates; New product introductions; The timing of holidays, which may reduce the amount of time that our Associates spend selling products or introducing USANA to potential Associates or Preferred Customers; The negative impact of changes in or interpretations of regulations that may limit or restrict our direct selling model or the sale of certain products in some countries; The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; The integration and operation of new information technology systems; The inability to introduce new products or the introduction of new products by competitors; Entry into one or more of our markets by competitors; Availability of raw materials; General conditions in the nutritional supplement, personal care, and healthy food industries or the direct selling industry; and Consumer perceptions of our products and business. |
USANA Health Sciences, Inc. By: /s/ Kevin G. Guest Kevin G. Guest Chief Executive Officer and Director Date: February 25, 2020 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kevin G. Guest and G. Douglas Hekking, jointly and severally, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorneys-in-fact and agents, or his, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
February 4, 2020 Signature Title Date /s/ Myron W. Wentz Myron W. Wentz, PhD Chairman February 25, 2020 /s/ Kevin G. Guest Kevin G. Guest Chief Executive Officer and Director (Principal Executive Officer) February 25, 2020 /s/ Gilbert A. Fuller Gilbert A. Fuller Director February 25, 2020 /s/ Robert Anciaux Robert Anciaux Director February 25, 2020 /s/ Frederic J. Winssinger Frederic J. Winssinger Director February 25, 2020 /s/ Feng Peng Feng Peng Director February 25, 2020 /s/ Timothy E. Wood Timothy E. Wood Director February 25, 2020 /s/ Peggie Pelosi Peggie Pelosi Director February 25, 2020 /s/ G. Douglas Hekking G. Douglas Hekking Chief Financial Officer (Principal Financial and Accounting Officer) February 25, 2020 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors USANA Health Sciences, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of USANA Health Sciences, Inc. and subsidiaries (the Company) as of December 28, 2019 and December 29, 2018, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 28, 2019, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). |
USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE C-INVENTORIES NOTE D-PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: NOTE E-INCOME TAXES Consolidated earnings before income taxes consists of the following for 2019, 2018, and 2017: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE E-INCOME TAXES - CONTINUED Income tax expense (benefit) included in income from continuing operations consists of the following: The effective tax rate for 2019, 2018, and 2017 reconciled to the statutory U.S. Federal tax rate is as follows: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE E-INCOME TAXES - CONTINUED The significant categories of deferred taxes are as follows: The Components of net deferred taxes on a jurisdiction basis are as follows: As of December 28, 2019, the Company had foreign tax credit carryforwards of approximately $57,749. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include, but are not limited to the following: • The number of Associates and Preferred Customers who join our business, purchase and sell our products, and stay with our business; • The opening of new markets; • The timing of Company-sponsored events, contests, and promotions; • Fluctuations in currency exchange rates; • New product introductions; • The timing of holidays, which may reduce the amount of time that our Associates spend selling products or introducing USANA to potential Associates or Preferred Customers; • The negative impact of changes in or interpretations of regulations that may limit or restrict our direct selling model or the sale of certain products in some countries; • The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; • The integration and operation of new information technology systems; • The inability to introduce new products or the introduction of new products by competitors; • Entry into one or more of our markets by competitors; • Availability of raw materials; • General conditions in the nutritional supplement, personal care, and healthy food industries or the direct selling industry; and • Consumer perceptions of our products and business. |
NOTE C-INVENTORIES Inventories consist of the following: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE D-PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: NOTE E-INCOME TAXES Consolidated earnings before income taxes consists of the following for 2016, 2017 and 2018: Income tax expense (benefit) included in income from net earnings consists of the following: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE E-INCOME TAXES (Continued) The effective tax rate for 2016, 2017, and 2018 reconciled to the statutory U.S. Federal tax rate is as follows: The significant categories of deferred taxes are as follows: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE E-INCOME TAXES (Continued) The Components of deferred taxes, net on a jurisdiction basis are as follows: As of December 29, 2018, the Company had foreign tax credit carryforwards of approximately $38,187. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include, but are not limited to the following: • The number of Associates and Preferred Customers who join our business, purchase and sell our products, and stay with our business; • The opening of new markets; • The timing of Company-sponsored events, contests, and promotions; • Fluctuations in currency exchange rates; • New product introductions; • The timing of holidays, which may reduce the amount of time that our Associates spend selling products or introducing USANA to potential Associates or Preferred Customers; • The negative impact of changes in or interpretations of regulations that may limit or restrict our network marketing model or the sale of certain products in some countries; • The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; • The integration and operation of new information technology systems; • The inability to introduce new products or the introduction of new products by competitors; • Entry into one or more of our markets by competitors; • Availability of raw materials; • General conditions in the nutritional supplement, personal care, and healthy food industries or the network marketing industry; and • Consumer perceptions of our products and business. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include, but are not limited to the following: • The recruiting and retention of Associates and Preferred Customers; • The opening of new markets; • The timing of Company-sponsored events, contests, and promotions; • Fluctuations in currency exchange rates; • New product introductions; • The timing of holidays, which may reduce the amount of time that our Associates spend selling products or recruiting new Associates; • The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products in some countries; • The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; • The integration and operation of new information technology systems; • The inability to introduce new products or the introduction of new products by competitors; • Entry into one or more of our markets by competitors; • Availability of raw materials; • General conditions in the nutritional supplement, personal care, and weight-management industries or the network marketing industry; and • Consumer perceptions of our products and operations. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include, but are not limited to the following: •The recruiting and retention of Associates and Preferred Customers; •The opening of new markets; •The timing of Company-sponsored events, contests, and promotions; •Fluctuations in currency exchange rates; •New product introductions; •The timing of holidays, which may reduce the amount of time that our Associates spend selling products or recruiting new Associates; •The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products in some countries; •The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; •The integration and operation of new information technology systems; •The inability to introduce new products or the introduction of new products by competitors; •Entry into one or more of our markets by competitors; •Availability of raw materials; •General conditions in the nutritional supplement, personal care, and weight-management industries or the network marketing industry; and •Consumer perceptions of our products and operations. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include, but are not limited to the following: •The recruiting and retention of Associates and Preferred Customers; •The opening of new markets; •The timing of Company-sponsored events, contests, and promotions; •Fluctuations in currency exchange rates; •New product introductions; •The timing of holidays, which may reduce the amount of time that our Associates spend selling products or recruiting new Associates; •The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products in some countries; •The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; •The integration and operation of new information technology systems; •The inability to introduce new products or the introduction of new products by competitors; •Entry into one or more of our markets by competitors; •Availability of raw materials; •General conditions in the nutritional supplement, personal care, and weight-management industries or the network marketing industry; and •Consumer perceptions of our products and operations. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include the following: •The recruiting and retention of Associates and Preferred Customers; •The opening of new markets; •The timing of Company-sponsored events, contests, and promotions; •Fluctuations in currency exchange rates; •New product introductions; •The timing of holidays, which may reduce the amount of time that our Associates spend selling products or recruiting new Associates; •The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products in some countries; •The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; •The integration and operation of new information technology systems; •The inability to introduce new products or the introduction of new products by competitors; •Entry into one or more of our markets by competitors; •Availability of raw materials; •General conditions in the nutritional supplement, personal care, and weight management industries or the network marketing industry; and •Consumer perceptions of our products and operations. |
Consolidated Statements of Earnings as a percentage of Net Sales: We may experience variations in the results of operations from quarter to quarter as a result of factors that include the following: •The recruiting and retention of Associates; •The opening of new markets; •The timing of Company-sponsored events, contests, and promotions; •Fluctuations in currency exchange rates; •New product introductions; •The timing of holidays, which may reduce the amount of time that our Associates spend selling products or recruiting new Associates; •The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products in some countries; •The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; •The integration and operation of new information technology systems; •The inability to introduce new products or the introduction of new products by competitors; •Entry into one or more of our markets by competitors; •Availability of raw materials; •General conditions in the nutritional supplement, personal care, and weight management industries or the network marketing industry; and •Consumer perceptions of our products and operations. |
NOTE C-INVENTORIES Inventories consist of the following: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE D-PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: NOTE E-INCOME TAXES Income tax expense (benefit) included in income from continuing operations consists of the following: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE E-INCOME TAXES (Continued) The income tax provision, as reconciled to the tax computed at the federal statutory rate of 35% for 2006, 2007, and 2008, is as follows: Deferred tax assets and liabilities consist of the following: USANA HEALTH SCIENCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except per share data) NOTE E-INCOME TAXES (Continued) The Company files income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. |
Consolidated Statements of Earnings as a percentage of Net Sales: We may experience variations in the results of operations from quarter to quarter as a result of factors that include the following: •The recruiting and retention of Associates; •The opening of new markets; •The timing of Company-sponsored events, contests, and promotions; •Fluctuations in currency exchange rates; •New product introductions; •The timing of holidays, which may reduce the amount of time that our Associates spend selling products or recruiting new Associates; •The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products in some countries; •The adverse effect of a failure by us or an Associate (or allegations of such failure) to comply with applicable governmental regulations; •The integration and operation of new information technology systems; •The inability to introduce new products or the introduction of new products by competitors; •Entry into one or more of our markets by competitors; •Availability of raw materials; •General conditions in the nutritional supplement, personal care, and weight management industries or the network marketing industry; and •Consumer perceptions of our products and operations. |
and USANA Health Sciences, Inc. (incorporated by reference to Report on Form 10-Q for the period ended July 3, 2004) 10.5 Amendment, dated May 17, 2006, to Credit Agreement, dated June 16, 2004 (incorporated by reference to Report on Form 10-Q for the period ended September 30, 2006) 10.6 Amendment, dated April 24, 2007, to Credit Agreement, dated June 16, 2004 (incorporated by reference to Report on Form 10-Q for the period ended March 31, 2007) 10.7 USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (incorporated by reference to Report on Form 8-K, filed April 25, 2006)* 10.8 Form of Stock Option Agreement for award of non-statutory stock options to employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.9 Form of Stock Option Agreement for award of non-statutory stock options to directors who are not employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.10 Form of Incentive Stock Option Agreement for award of incentive stock options to employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.11 Form of Stock-Settled Stock Appreciation Rights Award Agreement for award of stock-settled stock appreciation rights to employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.12 Form of Stock-Settled Stock Appreciation Rights Award Agreement for award of stock-settled stock appreciation rights to directors who are not employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.13 Form of Deferred Stock Unit Award Agreement for grants of deferred stock units to directors who are not employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 11.1 Computation of Net Income per Share (included in Notes to Consolidated Financial Statements) Code of Ethics of USANA Health Sciences, Inc. (posted on the Company's internet web site at www.usanahealthsciences.com) Subsidiaries of the Registrant, as of March 3, 2008 (filed herewith) 23.1 Consent of Independent Registered Public Accounting Firm (Grant Thornton LLP) (filed herewith) 23.2 Consent of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP) (filed herewith) 31.1 Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 31.2 Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 32.1 Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include the following: · The recruiting and retention of Associates; · The opening of new markets; · The timing of company-sponsored Associate events; · Fluctuations in currency exchange rates; · New product introductions; · The timing of holidays, which may reduce the amount of time Associates spend selling products or recruiting new Associates; · The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products in some countries; · The adverse effect of a failure by us or an Associate, or allegations of a failure, to comply with applicable governmental regulations; · The integration and operation of new information technology systems; · The inability to introduce new products or the introduction of new products by competitors; · Entry into one or more of our markets by competitors; · Availability of raw materials; · General conditions in the nutritional supplement, personal care, and weight management industries or the network marketing industry; and · Consumer perceptions of our products and operations. |
The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: · Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, · Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and · Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
and USANA Health Sciences, Inc. (Incorporated by reference to Report on Form 10-Q for the period ended July 3, 2004) 10.3 Amendment dated May 17, 2006 to Credit Agreement dated June 16, 2004 (Incorporated by reference to Report on Form 8-K filed April 25, 2006) 10.4 USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (Incorporated by reference to Report on Form 8-K, filed April 25, 2006)* 10.5 Form of Stock Option Agreement for award of non-statutory stock options to employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (Incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.6 Form of Stock Option Agreement for award of non-statutory stock options to directors who are not employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (Incorporated by reference to Report on Form 8-K, filed April 26, 2006) 10.7 Form of Incentive Stock Option Agreement under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (Incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.8 Form of Stock-Settled Stock Appreciation Rights Award Agreement for employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (Incorporated by reference to Report on Form 8-K, filed April 26, 2006)* 10.9 Form of Stock-Settled Stock Appreciation Rights Award Agreement for directors who are not employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (Incorporated by reference to Report on Form 8-K, filed April 26, 2006) 10.10 Form of Deferred Stock Unit Award Agreement for grants of deferred stock units to directors who are not employees under the USANA Health Sciences, Inc. 2006 Equity Incentive Award Plan (Incorporated by reference to Report on Form 8-K, filed April 26, 2006) 10.11 Form of employee or director non-statutory stock option agreement under the 2002 Stock Option Plan (Incorporated by reference to Report on Form 10-K, filed March 6, 2006)* 10.12 Form of employee incentive stock option agreement under the 2002 Stock Option Plan (Incorporated by reference to Report on Form 10-K, filed March 6, 2006)* 11.1 Computation of Net Income per Share (included in Notes to Consolidated Financial Statements) Code of Ethics of USANA Health Sciences, Inc. (Posted on the Company’s internet web site at www.usanahealthsciences.com) Subsidiaries of the Registrant, as of February 28, 2007 (Filed herewith) Consent of Independent Registered Public Accounting Firm (Filed herewith) 31.1 Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith) 31.2 Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith) 32.1 Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. |
Signature Title Date /s/ MYRON W. WENTZ Chairman and Chief Executive Officer March 8, 2007 Myron W. Wentz, PhD (Principal Executive Officer) /s/ DAVID A. WENTZ President March 8, 2007 David A. Wentz /s/ RONALD S. POELMAN Director March 8, 2007 Ronald S. Poelman /s/ ROBERT ANCIAUX Director March 8, 2007 Robert Anciaux /s/ DENIS E. WAITLEY Director March 8, 2007 Denis E. Waitley, PhD /s/ JERRY G. MCCLAIN Director March 8, 2007 Jerry G. McClain /s/ GILBERT A. FULLER Executive Vice President and Chief Financial March 8, 2007 Gilbert A. Fuller Officer (Principal Financial Officer and Principal Accounting Officer) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders USANA Health Sciences, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of USANA Health Sciences, Inc. and Subsidiaries (the “Company”) as of December 31, 2005 and December 30, 2006, and the related consolidated statements of earnings, stockholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended December 30, 2006. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include the following: • The recruiting and retention of Associates, • The opening of new markets, • The timing of company-sponsored Associate events, • Fluctuations in currency exchange rates, • New product introductions, • The timing of holidays, especially in the fourth quarter, which may reduce the amount of time Associates spend selling products or recruiting new Associates, • The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products, • The adverse effect of a failure by us or an Associate, or allegations of a failure, to comply with applicable governmental regulations, • The integration and operation of new information technology systems, • The inability to introduce new products or the introduction of new products by competitors, • Availability of raw materials, • General conditions in the nutritional supplement, personal care, and weight management industries or the network marketing industry, and • Consumer perceptions of our products and operations. |
0-21116, effective April 16, 1993] 10.1 Business Loan Agreement by and between Bank of America National Trust and Savings Association, d/b/a Seafirst Bank (“Seafirst Bank”) and USANA [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.2 Loan Modification Agreement by and between Seafirst Bank and USANA [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.3 Amended and Restated Long-Term Stock Investment and Incentive Plan [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998]* 10.4 Amended Term Note, dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.5 Amended Revolving Note, dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.6 Amended Credit Agreement, dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.7 Purchase Agreement, dated March 21, 2002 [Incorporated by reference to Annex A of the Preliminary Schedule 14A, filed March 26, 2002] 10.8 Termination of Purchase Agreement, dated April 11, 2002 [Incorporated by reference to Report on Form on 10-K/A, filed May 1, 2002] 10.9 Amended Credit Agreement, dated April 17, 2002 [Incorporated by reference to Report on Form 10-Q for the period ended March 30, 2002] 10.10 2002 USANA Health Sciences, Inc. Stock Option Plan [Incorporated by reference to Registration Statement on Form S-8, filed July 18, 2002]* 10.11 Second Amendment to Credit Agreement, dated August 21, 2002 [Incorporated by reference to Current Report on Form 8-K, filed August 23, 2002] 10.12 Third Amendment to Credit Agreement, dated December 27, 2002 [Incorporated by reference to Report on Form 10-K, filed March 27, 2003] 10.13 Consent and Fourth Amendment to Credit Agreement, dated July 8, 2003 10.14 Fifth Amendment to Credit Agreement, dated September 1, 2003 10.15 Sixth Amendment to Credit Agreement, dated December 1, 2003 11.1 Computation of Net Income per Share (included in Note N of the Notes to Consolidated Financial Statements) Subsidiaries of the Registrant, as of March 4, 2004 31.1 Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley act of 2002, 18 U.S.C. |
Signature Title Date /s/ Myron W. Wentz Chairman and Chief Executive Officer March 12, 2004 Myron W. Wentz, PhD (Principal Executive Officer) /s/ David A. Wentz President and Director March 12, 2004 David A. Wentz /s/ Ronald S. Poelman Director March 12, 2004 Ronald S. Poelman /s/ Robert Anciaux Director March 12, 2004 Robert Anciaux /s/ Denis E. Waitley Director March 12, 2004 Denis E. Waitley, PhD /s/ Jerry g. Mcclain Director March 12, 2004 Jerry G. McClain /s/ Gilbert A. Fuller Senior Vice President and Chief March 12, 2004 Gilbert A. Fuller Financial Officer (Principal Financial Officer and Principal Accounting Officer) REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors and Stockholders USANA Health Sciences, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of USANA Health Sciences, Inc. and Subsidiaries (the Company) as of December 28, 2002 and January 3, 2004 and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the three years in the period ended January 3, 2004. |
We may experience variations in the results of operations from quarter to quarter as a result of factors that include the following: • The recruiting and retention of Associates, • The opening of new markets, • The timing of company-sponsored Associate events, • Fluctuations in currency exchange rates, • New product introductions, • The timing of holidays, especially in the fourth quarter, which may reduce the amount of time Associates spend selling products or recruiting new Associates, • The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products, • The adverse effect of a failure by us or an Associate, or allegations of a failure, to comply with applicable governmental regulations, • The integration and operation of new information technology systems, • The inability to introduce new products or the introduction of new products by competitors, • Availability of raw materials, • General conditions in the nutritional supplement, personal care, and weight management industries or the network marketing industry, and • Consumer perceptions of our products and operations. |
0-21116, effective April 16, 1993] 10.1 Business Loan Agreement by and between Bank of America National Trust and Savings Association, d/b/a Seafirst Bank (“Seafirst Bank”) and USANA [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.2 Loan Modification Agreement by and between Seafirst Bank and USANA [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.3 Amended and Restated Long Term Stock Investment and Incentive Plan [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998]* 10.4 Amended Term Note dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.5 Amended Revolving Note dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.6 Amended Credit Agreement dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.7 Purchase Agreement dated March 21, 2002 [Incorporated by reference to Annex A of the Preliminary Schedule 14A, filed March 26, 2002] 10.8 Termination of Purchase Agreement dated April 11, 2002 [Incorporated by reference to Report on Form on 10-K/A,filed May 1, 2002] 10.9 Amended Credit Agreement dated April 17, 2002 [Incorporated by reference to Report on Form 10-Q for the period ended March 30, 2002] 10.10 2002 USANA Health Sciences, Inc. Stock Option Plan [Incorporated by reference to Registration Statement on Form S-8, filed July 18, 2002]* 10.11 Second Amendment to Credit Agreement dated August 21, 2002 [Incorporated by reference to Current Report on Form 8-K, filed August 23, 2002] 10.12 Third Amendment to Credit Agreement dated December 27, 2002 11.1 Computation of Net Income per Share (included in Note N of the Notes to Consolidated Financial Statements) Subsidiaries of the Registrant as of December 28, 2002 Certifications pursuant to 18 U.S.C. |
This covenant does not prohibit USANA and its board of directors from (1) taking and disclosing a position with respect to a tender offer by a third party pursuant to Rules 14d-9 and 14e-2 (a) promulgated by the SEC under the Exchange Act, or (2) furnishing information, including without limitation nonpublic information to, or entering into negotiations with, any person or entity that has indicated its willingness to make an unsolicited bona fide proposal to acquire USANA pursuant to a merger, consolidation, share exchange, purchase of a substantial portion of the assets, business combination or other similar transaction, if, and only to the extent that, (A) the unsolicited bona fide proposal is made by a third party that the board of directors in good faith determines has the good faith intent to proceed with negotiations to consider, and financial capability to consummate, such a proposal, and (B) the board of directors, after duly considering the written advice of outside legal counsel, determines in good faith that response to the proposal is required for the board of directors to comply with its fiduciary duties to shareholders imposed by applicable law. |
USANA may experience variations in its results of operations from quarter to quarter as a result of factors that include the following: • The timing of Company-sponsored Associate events, • The recruiting and retention of Associates, • Fluctuations in currency exchange rates, • The opening of new markets, • New product introductions, • The timing of holidays, especially in the fourth quarter, which may reduce the amount of time Associates spend selling products or recruiting new Associates, • The operation of the network marketing system, • The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain products, • The adverse effect of a failure by USANA or an Associate, or allegations of a failure, to comply with applicable governmental regulations, • The integration and operation of new information technology systems, • The inability to introduce new products or the introduction of new products by competitors, • Availability of raw materials, • General conditions in the nutritional supplement, personal care and weight management industries or the network marketing industry, and • Consumer perceptions of USANA’s products and operations. |
0-21116, effective April 16, 1993] 10.1 Business Loan Agreement by and between Bank of America National Trust and Savings Association, d/b/a Seafirst Bank (“Seafirst Bank”) and USANA [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.2 Loan Modification Agreement by and between Seafirst Bank and USANA [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.3 Employment Agreement dated June 1, 1997 by and between USANA and Gilbert A. Fuller, expired May 31, 2000 [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.4 Amended and Restated Long-Term Stock Investment and Incentive Plan [Incorporated by reference to Report on Form 10-Q for the period ended June 27, 1998] 10.5 Promissory Note and Redemption Agreement dated April 28, 1999 [Incorporated by reference to Report on Form 10-Q for the period ended April 3, 1999] 10.6 Stock Pledge Agreement dated April 28, 1999 [Incorporated by reference to Report on Form 10-Q for the period ended April 3, 1999] 10.7 Redemption Agreement dated July 30, 1999 [Incorporated by reference to Report on Form 8-K, filed September 24, 1999] 10.8 Amended Term Note dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.9 Amended Revolving Note dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 10.10 Amended Credit Agreement dated March 26, 2001 [Incorporated by reference to Report on Form 10-K, filed March 30, 2001] 11.1 Computation of Net Income per Share (included in Note N of the Notes to Consolidated Financial Statements) Subsidiaries 99.1 Press Release dated September 21, 1999. |
Signature Title Date /s/ Myron W. Wentz Chairman, President (Principal Executive Officer) March 20, 2002 Myron W. Wentz, PhD /s/ Ronald S. Poelman Director March 20, 2002 Ronald S. Poelman /s/ Robert Anciaux Director March 20, 2002 Robert Anciaux /s/ Denis E. Waitley Director March 20, 2002 Denis E. Waitley, PhD /s/ David A. Wentz Director March 20, 2002 David A. Wentz /s/ Jerry g. Mcclain Director March 20, 2002 Jerry G. McClain /s/ Gilbert A. Fuller Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) March 20, 2002 Gilbert A. Fuller REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors and Stockholders USANA Health Sciences, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of USANA Health Sciences, Inc. and Subsidiaries (the Company) as of December 30, 2000 and December 29, 2001 and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the three years in the period ended December 29, 2001. |
The Company may experience variations on a quarterly basis in its results of operations, in response to, among other things: * The timing of Company-sponsored distributor events * New product introductions * The opening of new markets * The timing of holidays, especially in the fourth quarter, which may reduce the amount of time distributors spend selling the Company's products or recruiting new distributors * The adverse effect of distributors' or the Company's failure, or allegations of their failure, to comply with applicable governmental regulations * The negative impact of changes in or interpretations of regulations that may limit or restrict the sale of certain of the Company's products * The operation of its network marketing system * Fluctuations in currency exchange rates * The recruiting and retention of distributors * The integration and operation of new information technology systems * The inability of the Company to introduce new products or the introduction of new products by the Company's competitors * Availability of raw materials * General conditions in the nutritional supplement, personal care and weight management industries or the network marketing industry * Consumer perceptions of the Company's products and operations Because the Company's products are ingested by consumers or applied to their bodies, the Company is highly dependent upon consumers' perception of the safety, quality and efficacy of its products. |
0-21116, effective April 16, 1993] 10.1 Business Loan Agreement by and between Bank of America National Trust and Savings Association, d/b/a Seafirst Bank ("Seafirst Bank") and the Company [Incorporated by reference to the Company's Report on Form 10-Q for the period ended June 27, 1998] 10.2 Loan Modification Agreement by and between Seafirst Bank and the Company [Incorporated by reference to the Company's Report on Form 10-Q for the period ended June 27, 1998] 10.3 Employment Agreement dated June 1, 1997 by and between the Company and Gilbert A. Fuller [Incorporated by reference to the Company's Report on Form 10-Q for the period ended June 27, 1998] 10.4 Amended and Restated Long-Term Stock Investment and Incentive Plan [Incorporated by reference to the Company's Report on Form 10-Q for the period ended June 27, 1998] 11.1 Computation of Net Income per Share (included in Notes to Consolidated Financial Statements) 22.1 Subsidiaries of the Company 27.1 Financial Data Schedule SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 3rd day of April, 1998: USANA, INC. By:____________________________________ Myron W. Wentz, PhD, President and Chairman Date: March 26, 1999 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: /s/ Myron W. Wentz - --------------------------------------- March 26, 1999 Myron W. Wentz, PhD,Chairman, President Date (Principal Executive Officer) /s/ Ronald S. Poelman - --------------------------------------- March 26, 1999 Ronald S. Poelman, Director Date /s/ Robert Anciaux - --------------------------------------- March 26, 1999 Robert Anciaux, Director Date /s/ Ned M. Weinshenker - --------------------------------------- March 26, 1999 Ned M. Weinshenker, PhD, Director Date /s/ David A. Wentz - --------------------------------------- March 26, 1999 David A. Wentz, Director Date /s/ Gilbert A. Fuller - --------------------------------------- March 26, 1999 Gilbert A. Fuller, Vice President Date And Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) USANA, INC. AND SUBSIDIARIES FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS DECEMBER 28, 1996, DECEMBER 27, 1997 AND JANUARY 2, 1999 C O N T E N T S Page REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS CONSOLIDATED FINANCIAL STATEMENTS BALANCE SHEETS STATEMENTS OF EARNINGS STATEMENT OF STOCKHOLDERS' EQUITY STATEMENTS OF CASH FLOWS NOTES TO FINANCIAL STATEMENTS REPORT OF INDEPENDENT --------------------- CERTIFIED PUBLIC ACCOUNTANTS ---------------------------- Board of Directors and Stockholders USANA, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of USANA, Inc. and Subsidiaries (the Company) as of December 27, 1997 and January 2, 1999 and the related consolidated statements of earnings, stockholders' equity and cash flows for each of the three years in the period ended January 2, 1999. |
Under the regulations, an FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 8% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 6% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
EGRRCPA’s highlights include, among other things: (i) exempting banks with less than $10 billion in assets from the ability-to-repay requirements for certain qualified residential mortgage loans held in portfolio; (ii) not requiring appraisals for certain transactions valued at less than $400,000 in rural areas; (iii) clarifying that, subject to various conditions, reciprocal deposits of another depository institution obtained using a deposit broker through a deposit placement network for purposes of obtaining maximum deposit insurance would not be considered brokered deposits subject to the FDIC’s brokered-deposit regulations; (iv) raising eligibility for the 18-month exam cycle from $1 billion to banks with $3 billion in assets; and (v) simplifying capital calculations by requiring regulators to establish for institutions under $10 billion in assets a community bank leverage ratio (tangible equity to average consolidated assets) at a percentage not less than 8% and not greater than 10% that such institutions may elect to replace the general applicable risk-based capital requirements for determining well capitalized status. |
Exhibits UWHARRIE CAPITAL CORP Exhibit Index Exhibit Number Description of Exhibit 3.1 Registrant’s Articles of Incorporation (Incorporated by reference to Exhibit 3(a) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.2 Registrant’s By-laws (Incorporated by reference to Exhibit 3(b) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.3 Articles of Amendment effective April 24, 1997 (Incorporated by reference to Exhibit 3.3 of Registrant’s Annual Report on Form 10-K filed with SEC on March 4, 2020) 3.4 Articles of Amendment effective November 1, 1999 (Incorporated by reference to Exhibit 3(c) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.5 Articles of Amendment effective May 31, 2000 (Incorporated by reference to Exhibit 3(d) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.6 Articles of Amendment effective December 19, 2008 (Incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K filed with SEC on December 29, 2008) 4.1 Form of common stock certificate (Incorporated by reference to Exhibit 4(a) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 4.2 Description of Registrant’s Securities Registered under Section 12 of the Exchange Act (Incorporated by reference to Exhibit 4.2 of Registrant’s Annual Report on Form 10-K filed with SEC on March 4, 2020) 10.1 2006 Incentive Stock Option Plan, a compensatory plan (Incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q filed with SEC on August 13, 2007) 10.2 2006 Employee Stock Purchase Plan, a compensatory plan (Incorporated by reference to Exhibit 10.2 of Registrant’s Quarterly Report on Form 10-Q filed with SEC on August 13, 2007) 10.3 Nonqualified Deferred Compensation Plan and Executive Supplemental Retirement Plan Agreement between Uwharrie Capital Corp and Roger L. Dick, a compensatory plan (Incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed with SEC on December 31, 2008) 10.4 Nonqualified Deferred Compensation Plan and Executive Supplemental Retirement Plan Agreement between Uwharrie Capital Corp and R. David Beaver, III, a compensatory plan (Incorporated by reference to Exhibit 10(e) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 10.5 2015 Stock Grant Plan (Incorporated by reference to Exhibit 4.1 of Registrant’s Form S-8 filed with SEC on October 27, 2015) 2020 Annual Report to Shareholders (filed herewith) Subsidiaries of the Registrant (filed herewith) Consent of Dixon Hughes Goodman LLP (filed herewith) 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) Interactive data files providing financial information from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020, in XBRL (eXtensible Business Reporting Language) (filed herewith) Item 16. |
Under the regulations, an FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 8% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 6% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
EGRRCPA’s highlights include, among other things: (i) exempts banks with less than $10 billion in assets from the ability-to-repay requirements for certain qualified residential mortgage loans held in portfolio; (ii) not requiring appraisals for certain transactions valued at less than $400,000 in rural areas; (iii) clarifies that, subject to various conditions, reciprocal deposits of another depository institution obtained using a deposit broker through a deposit placement network for purposes of obtaining maximum deposit insurance would not be considered brokered deposits subject to the FDIC’s brokered-deposit regulations; (iv) raises eligibility for the 18-month exam cycle from $1 billion to banks with $3 billion in assets; and (v) simplifies capital calculations by requiring regulators to establish for institutions under $10 billion in assets a community bank leverage ratio (tangible equity to average consolidated assets) at a percentage not less than 8% and not greater than 10% that such institutions may elect to replace the general applicable risk-based capital requirements for determining well capitalized status. |
Exhibits UWHARRIE CAPITAL CORP Exhibit Index Exhibit Number Description of Exhibit 3.1 Registrant’s Articles of Incorporation (Incorporated by reference to Exhibit 3(a) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.2 Registrant’s By-laws (Incorporated by reference to Exhibit 3(b) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.3 Articles of Amendment effective April 24, 1997 (filed herewith) 3.4 Articles of Amendment effective November 1, 1999 (Incorporated by reference to Exhibit 3(c) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.5 Articles of Amendment effective May 31, 2000 (Incorporated by reference to Exhibit 3(d) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 3.6 Articles of Amendment effective December 19, 2008 (Incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K filed with SEC on December 29, 2008) 4.1 Form of common stock certificate (Incorporated by reference to Exhibit 4(a) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 4.2 Description of Registrant’s Securities Registered under Section 12 of the Exchange Act (filed herewith) 10.1 2006 Incentive Stock Option Plan, a compensatory plan (Incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly Report on Form 10-Q filed with SEC on August 13, 2007) 10.2 2006 Employee Stock Purchase Plan, a compensatory plan (Incorporated by reference to Exhibit 10.2 of Registrant’s Quarterly Report on Form 10-Q filed with SEC on August 13, 2007) 10.3 Nonqualified Deferred Compensation Plan and Executive Supplemental Retirement Plan Agreement between Uwharrie Capital Corp and Roger L. Dick, a compensatory plan (Incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed with SEC on December 31, 2008) 10.4 Nonqualified Deferred Compensation Plan and Executive Supplemental Retirement Plan Agreement between Uwharrie Capital Corp and Brendan P. Duffey, a compensatory plan (Incorporated by reference to Exhibit 10.2 of Registrant’s Current Report on Form 8-K filed with SEC on December 31, 2008) 10.5 Nonqualified Deferred Compensation Plan and Executive Supplemental Retirement Plan Agreement between Uwharrie Capital Corp and R. David Beaver, III, a compensatory plan (Incorporated by reference to Exhibit 10(e) of Registrant’s Annual Report on Form 10-K filed with SEC on March 1, 2017) 10.6 Change in Control Severance Agreement dated January 1, 2015, between the Registrant and R. David Beaver, III, a compensatory plan (Incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K filed with SEC on June 30, 2015) 10.7 2015 Stock Grant Plan (Incorporated by reference to Exhibit 4.1 of Registrant’s Form S-8 filed with SEC on October 27, 2015) 2019 Annual Report to Shareholders (filed herewith) Subsidiaries of the Registrant (filed herewith) Consent of Dixon Hughes Goodman LLP (filed herewith) 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) Interactive data files providing financial information from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, in XBRL (eXtensible Business Reporting Language) (filed herewith) SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
Under the regulations, an FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 8% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 6% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
EGRRCPA’s highlights include, among other things: (i) exempts banks with less than $10 billion in assets from the ability-to-repay requirements for certain qualified residential mortgage loans held in portfolio; (ii) not requiring appraisals for certain transactions valued at less than $400,000 in rural areas; (iii) clarifies that, subject to various conditions, reciprocal deposits of another depository institution obtained using a deposit broker through a deposit placement network for purposes of obtaining maximum deposit insurance would not be considered brokered deposits subject to the FDIC’s brokered-deposit regulations; (iv) raises eligibility for the 18-month exam cycle from $1 billion to banks with $3 billion in assets; and (v) simplifies capital calculations by requiring regulators to establish for institutions under $10 billion in assets a community bank leverage ratio (tangible equity to average consolidated assets) at a percentage not less than 8% and not greater than 10% that such institutions may elect to replace the general applicable risk-based capital requirements for determining well capitalized status. |
Under the regulations, a FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 8% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 6% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
Under the regulations, a FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 8% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 6% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
Under the regulations, a FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 4% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 3% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
Under the regulations, a FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 4% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 3% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
Under the regulations, a FDIC-insured bank will be: • “well capitalized” if it has a Total Risk-Based Capital ratio of 10% or greater, a Tier 1 Risk-Based Capital ratio of 6% or greater and a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate regulatory authority to meet and maintain a specific capital level for any capital measure; • “adequately capitalized” if it has a Total Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of 4% or greater and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized;” • “undercapitalized” if it has a Total Risk-Based Capital ratio of less than 8%, a Tier 1 Risk-Based Capital ratio of less than 4% or a leverage ratio of less than 4% (3% in certain circumstances); • “significantly undercapitalized” if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 3% or a leverage ratio of less than 3%; and • “critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible assets. |
The Dodd-Frank Act included, among other things: • the creation of a Financial Stability Oversight Council to identify emerging systemic risks posed by financial firms, activities and practices, and to improve cooperation between federal agencies; • the creation of a Bureau of Consumer Financial Protection authorized to promulgate and enforce consumer protection regulations relating to financial products, which would affect both banks and non-bank financial companies; • the establishment of strengthened capital and prudential standards for banks and bank holding companies; • enhanced regulation of financial markets, including derivatives and securitization markets; • the elimination of certain trading activities by banks; • a permanent increase of FDIC deposit insurance to $250,000 per deposit category and an increase in the minimum deposit insurance fund reserve requirement from 1.15% to 1.35%, with assessments to be based on assets as opposed to deposits; • amendments to the Truth in Lending Act aimed at improving consumer protections with respect to mortgage originations, including originator compensation, minimum repayment standards, and prepayment considerations; and • new disclosure and other requirements relating to executive compensation and corporate governance. |
The Dodd-Frank Act includes, among other things: • the creation of a Financial Stability Oversight Council to identify emerging systemic risks posed by financial firms, activities and practices, and to improve cooperation between federal agencies; • the creation of a Bureau of Consumer Financial Protection authorized to promulgate and enforce consumer protection regulations relating to financial products, which would affect both banks and non-bank financial companies; • the establishment of strengthened capital and prudential standards for banks and bank holding companies; • enhanced regulation of financial markets, including derivatives and securitization markets; • the elimination of certain trading activities by banks; • a permanent increase of the previously implemented temporary increase of FDIC deposit insurance to $250,000 per account, an extension of unlimited deposit insurance on qualifying noninterest-bearing transaction accounts, and an increase in the minimum deposit insurance fund reserve requirement from 1.15% to 1.35%, with assessments to be based on assets as opposed to deposits; • amendments to the Truth in Lending Act aimed at improving consumer protections with respect to mortgage originations, including originator compensation, minimum repayment standards, and prepayment considerations; and • new disclosure and other requirements relating to executive compensation and corporate governance. |
The Dodd-Frank Act includes, among other things: • the creation of a Financial Stability Oversight Council to identify emerging systemic risks posed by financial firms, activities and practices, and to improve cooperation between federal agencies; • the creation of a Bureau of Consumer Financial Protection authorized to promulgate and enforce consumer protection regulations relating to financial products, which would affect both banks and non-bank financial companies; • the establishment of strengthened capital and prudential standards for banks and bank holding companies; • enhanced regulation of financial markets, including derivatives and securitization markets; • the elimination of certain trading activities by banks; • a permanent increase of the previously implemented temporary increase of FDIC deposit insurance to $250,000 per account, an extension of unlimited deposit insurance on qualifying noninterest-bearing transaction accounts, and an increase in the minimum deposit insurance fund reserve requirement from 1.15% to 1.35%, with assessments to be based on assets as opposed to deposits; • amendments to the Truth in Lending Act aimed at improving consumer protections with respect to mortgage originations, including originator compensation, minimum repayment standards, and prepayment considerations; and • new disclosure and other requirements relating to executive compensation and corporate governance. |
We believe that we offer the highest level of service in the auction and vehicle remarketing industry and have established our leading market position by: •providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially trained teams; •providing a comprehensive range of services that includes merchandising, efficient title processing, timely pick-up and delivery of vehicles, and internet sales; •establishing and efficiently integrating new facilities and acquisitions; •increasing the number of bidders that can participate at each sale through the ease and convenience of internet bidding; •applying technology to enhance operating efficiency through internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, and vehicle imaging; and •providing a venue for insurance customers through our Virtual Insured Exchange (“VIX”) product to contingently sell a vehicle through our auction process to assess true market value, equipping our insurance customers with market data in its negotiations with owners who wish to retain their damaged vehicles. |
Value-Added Services We believe that we offer the most comprehensive range of services in our industry, including: •internet bidding, internet proxy bidding, and virtual sales powered by VB3, which enhance the competitive bidding process; •mobile applications, which allow members to search, bid, create watch lists, join auctions and bid in numerous languages from anywhere; •a tailored experience by way of predictive analytics through collaborative filtering, such as the Recommendations Engine feature that suggests similar makes and models based on a member’s behavior; •Buy It Now, which provides an option to our members to purchase specific pre-qualified vehicles immediately at a set price before the live auction process; •Make An Offer, which provides an option to our members to submit an offer amount on certain selected vehicles and if the offer is accepted, purchase the vehicle before the live auction process; •online payment capabilities via our ePay product, credit cards and dealer financing programs; •email notifications available in numerous languages to potential buyers of vehicles that match desired characteristics; •sophisticated vehicle processing at storage sites, including digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available from us over the internet; •specialty sales, which allow buyers the opportunity to focus on such select types of vehicles as motorcycles, heavy equipment, boats, recreational vehicles and rental cars; •interactive online counter-bidding, which allows sellers who have placed a minimum bid or a bid to be approved on a vehicle to directly counter-bid the current high bidder; and •Night Cap sales, which provides an additional opportunity for bidding on vehicles that have not previously achieved their minimum bid. |
In addition, we anticipate our international operations will continue to subject us to a variety of risks associated with operating on an international basis, including: •the difficulty of managing and staffing foreign offices; •the increased travel, infrastructure, and legal compliance costs associated with multiple international locations; •the need to localize our product offerings, particularly the need to implement our online auction platform in foreign countries; •the need to comply with complex foreign and U.S. laws and regulations that apply to our international operations; •tariffs, trade barriers, trade disputes, and other regulatory or contractual limitations on our ability to operate in certain foreign markets; •exposure to foreign currency exchange rate risk, which may have an adverse impact on our revenues and revenue growth rates; •adapting to different business cultures, languages, and market structures, particularly where we seek to implement our auction model in markets where insurers have historically not played a substantial role in the disposition of salvage vehicles; •repatriation of funds currently held in foreign jurisdictions to the U.S. may result in higher effective tax rates; •military actions; •public health issues; •environmental issues; •natural and man-made disasters; and •political issues. |
Factors that may affect our operating results include, but are not limited to, the following: •fluctuations in the market value of salvage and used vehicles; •fluctuations in commodity prices, particularly the per ton price of crushed car bodies; •the impact of foreign exchange gain and loss as a result of international operations; •our ability to successfully integrate our newly acquired operations in international markets and any additional markets we may enter; •the availability of salvage vehicles or other vehicles we sell; •variations in vehicle accident rates; •member participation in the internet bidding process; •delays or changes in state title processing; •changes in international, state or federal laws, regulations, or treaties affecting the vehicles we sell; •changes in the application, interpretation, and enforcement of existing laws, regulations or treaties; •trade disputes and other political, diplomatic, legal, or regulatory developments; •inconsistent application or enforcement of laws or regulations by regulators, governmental or quasi-governmental entities, or law enforcement or quasi-law enforcement agencies, as compared to our competitors; •changes in laws affecting who may purchase the vehicles we sell; •the timing and size of our new facility openings; •the announcement of new vehicle supply agreements by us or our competitors; •the severity of weather and seasonality of weather patterns; •the amount and timing of operating costs and capital expenditures relating to the maintenance and expansion of our business, operations, and infrastructure; •the availability and cost of general business insurance; •labor costs and collective bargaining; •changes in the current levels of out of state and foreign demand for salvage vehicles; •the introduction of a similar internet product by a competitor; •the ability to obtain or maintain necessary permits to operate; •military actions; •natural and man-made disasters; •public health issues, including COVID-19 and other pandemics; and •political issues. |
Registrant COPART, INC. By: /s/ A. JAYSON ADAIR A. Jayson Adair Chief Executive Officer (Principal Executive Officer and Director) Date: September 28, 2020 COPART, INC. By: /s/ JEFFREY LIAW Jeffrey Liaw, President and Chief Financial Officer (Principal Financial and Accounting Officer and duly Authorized Officer) Date: September 28, 2020 POWER OF ATTORNEY KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints A. Jayson Adair and Jeffrey Liaw, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
We believe that we offer the highest level of service in the auction and vehicle remarketing industry and have established our leading market position by: • providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially trained teams; • providing a comprehensive range of services that includes merchandising, efficient title processing, timely pick-up and delivery of vehicles, and internet sales; • establishing and efficiently integrating new facilities and acquisitions; • increasing the number of bidders that can participate at each sale through the ease and convenience of internet bidding; • applying technology to enhance operating efficiency through internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, and vehicle imaging; and • providing a venue for insurance customers through our Virtual Insured Exchange (VIX) product to contingently sell a vehicle through our auction process to assess true market value, equipping our insurance customers with market data in its negotiations with owners who wish to retain their damaged vehicles. |
Value-Added Services We believe that we offer the most comprehensive range of services in our industry, including: • internet bidding, internet proxy bidding, and virtual sales powered by VB3, which enhance the competitive bidding process; • mobile applications, which allow members to search, bid, create watch lists, join auctions and bid in numerous languages from anywhere; • a tailored experience by way of predictive analytics through collaborative filtering, such as the Recommendations Engine feature that suggests similar makes and models based on a member’s behavior; • Buy It Now, which provides an option to our members to purchase specific pre-qualified vehicles immediately at a set price before the live auction process; • Make An Offer, which provides an option to our members to submit an offer amount on certain selected vehicles and if the offer is accepted, purchase the vehicle before the live auction process; • online payment capabilities via our ePay product, credit cards and dealer financing programs; • email notifications available in numerous languages to potential buyers of vehicles that match desired characteristics; • sophisticated vehicle processing at storage sites, including digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available from us over the internet; • specialty sales, which allow buyers the opportunity to focus on such select types of vehicles as motorcycles, heavy equipment, boats, recreational vehicles and rental cars; • interactive online counter-bidding, which allows sellers who have placed a minimum bid or a bid to be approved on a vehicle to directly counter-bid the current high bidder; • second chance bidding, which allows the second highest bidder the opportunity to purchase the vehicle for the seller’s current minimum bid after the high bidder fails to consummate the purchase; and • Night Cap sales, which provides an additional opportunity for bidding on vehicles that have not previously achieved their minimum bid. |
In addition, we anticipate our international operations will continue to subject us to a variety of risks associated with operating on an international basis, including: • the difficulty of managing and staffing foreign offices; • the increased travel, infrastructure and legal compliance costs associated with multiple international locations; • the need to localize our product offerings, particularly the need to implement our online auction platform in foreign countries; • the need to comply with complex foreign and U.S. laws and regulations that apply to our international operations; • tariffs and trade barriers and other regulatory or contractual limitations on our ability to operate in certain foreign markets; • exposure to foreign currency exchange rate risk, which may have an adverse impact on our revenues and revenue growth rates; • adapting to different business cultures and market structures, particularly where we seek to implement our auction model in markets where insurers have historically not played a substantial role in the disposition of salvage vehicles; and • repatriation of funds currently held in foreign jurisdictions to the U.S. may result in higher effective tax rates. |
Factors that may affect our operating results include, but are not limited to, the following: • fluctuations in the market value of salvage and used vehicles; • fluctuations in commodity prices, particularly the per ton price of crushed car bodies; • the impact of foreign exchange gain and loss as a result of international operations; • our ability to successfully integrate our newly acquired operations in international markets and any additional markets we may enter; • the availability of salvage vehicles or other vehicles we sell; • variations in vehicle accident rates; • member participation in the internet bidding process; • delays or changes in state title processing; • changes in international, state or federal laws, regulations, or treaties affecting the vehicles we sell; • changes in the application, interpretation, and enforcement of existing laws, regulations or treaties; • trade disputes and other political, diplomatic, legal, or regulatory developments; • inconsistent application or enforcement of laws or regulations by regulators, governmental or quasi-governmental entities, or law enforcement or quasi-law enforcement agencies, as compared to our competitors; • changes in laws affecting who may purchase the vehicles we sell; • our ability to integrate and manage our acquisitions successfully; • the timing and size of our new facility openings; • the announcement of new vehicle supply agreements by us or our competitors; • the severity of weather and seasonality of weather patterns; • the amount and timing of operating costs and capital expenditures relating to the maintenance and expansion of our business, operations and infrastructure; • the availability and cost of general business insurance; • labor costs and collective bargaining; • changes in the current levels of out of state and foreign demand for salvage vehicles; • the introduction of a similar internet product by a competitor; and • the ability to obtain or maintain necessary permits to operate. |
Registrant COPART, INC. By: /s/ A. JAYSON ADAIR A. Jayson Adair Chief Executive Officer (Principal Executive Officer and Director) Date: September 30, 2019 COPART, INC. By: /s/ JEFFREY LIAW Jeffrey Liaw, President and Chief Financial Officer (Principle Financial and Accounting Officer and duly Authorized Officer) Date: September 30, 2019 POWER OF ATTORNEY KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints A. Jayson Adair and Jeffrey Liaw, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
We believe that we offer the highest level of service in the auction and vehicle remarketing industry and have established our leading market position by: • providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially-trained teams; • providing a comprehensive range of services that includes merchandising, efficient title processing, timely pick-up and delivery of vehicles, and internet sales; • establishing and efficiently integrating new facilities and acquisitions; • increasing the number of bidders that can participate at each sale through the ease and convenience of internet bidding; • applying technology to enhance operating efficiency through internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, and vehicle imaging; and • providing a venue for insurance customers through our Virtual Insured Exchange (VIX) product to contingently sell a vehicle through our auction process to assess true market value, equipping our insurance customers with market data in its negotiations with owners who wish to retain their damaged vehicles. |
Value-Added Services We believe that we offer the most comprehensive range of services in our industry, including: • internet bidding, internet proxy bidding, and virtual sales powered by VB3, which enhance the competitive bidding process; • mobile applications, which allow members to search, bid, create watch lists, join auctions and bid in numerous languages from anywhere; • a tailored experience by way of predictive analytics through collaborative filtering, such as the Recommendations Engine feature that suggests similar makes and models based on a member’s behavior; • Buy It Now, which provides an option to our members to purchase specific pre-qualified vehicles immediately at a set price before the live auction process; • online payment capabilities via our ePay product, credit cards and dealer financing programs; • email notifications available in numerous languages to potential buyers of vehicles that match desired characteristics; • sophisticated vehicle processing at storage sites, including digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available from us over the internet; • specialty sales, which allow buyers the opportunity to focus on such select types of vehicles as motorcycles, heavy equipment, boats, recreational vehicles and rental cars; • interactive online counter-bidding, which allows sellers who have placed a minimum bid or a bid to be approved on a vehicle to directly counter-bid the current high bidder; • second chance bidding, which allows the second highest bidder the opportunity to purchase the vehicle for the seller’s current minimum bid after the high bidder fails to consummate the purchase; and • Night Cap sales, which provides an additional opportunity for bidding on vehicles that have not previously achieved their minimum bid. |
In addition, we anticipate our international operations will continue to subject us to a variety of risks associated with operating on an international basis, including: • the difficulty of managing and staffing foreign offices; • the increased travel, infrastructure and legal compliance costs associated with multiple international locations; • the need to localize our product offerings, particularly the need to implement our online auction platform in foreign countries; • the need to comply with complex foreign and U.S. laws and regulations that apply to our international operations; • tariffs and trade barriers and other regulatory or contractual limitations on our ability to operate in certain foreign markets; • exposure to foreign currency exchange rate risk, which may have an adverse impact on our revenues and revenue growth rates; • adapting to different business cultures and market structures, particularly where we seek to implement our auction model in markets where insurers have historically not played a substantial role in the disposition of salvage vehicles; and • repatriation of funds currently held in foreign jurisdictions to the U.S. may result in higher effective tax rates. |
Factors that may affect our operating results include, but are not limited to, the following: • fluctuations in the market value of salvage and used vehicles; • fluctuations in commodity prices, particularly the per ton price of crushed car bodies; • the impact of foreign exchange gain and loss as a result of international operations; • our ability to successfully integrate our newly acquired operations in international markets and any additional markets we may enter; • the availability of salvage vehicles or other vehicles we sell; • variations in vehicle accident rates; • member participation in the internet bidding process; • delays or changes in state title processing; • changes in international, state or federal laws, regulations, or treaties affecting the vehicles we sell; • changes in the application, interpretation, and enforcement of existing laws, regulations or treaties; • trade disputes and other political, diplomatic, legal, or regulatory developments; • inconsistent application or enforcement of laws or regulations by regulators, governmental or quasi-governmental entities, or law enforcement or quasi-law enforcement agencies, as compared to our competitors; • changes in laws affecting who may purchase the vehicles we sell; • our ability to integrate and manage our acquisitions successfully; • the timing and size of our new facility openings; • the announcement of new vehicle supply agreements by us or our competitors; • the severity of weather and seasonality of weather patterns; • the amount and timing of operating costs and capital expenditures relating to the maintenance and expansion of our business, operations and infrastructure; • the availability and cost of general business insurance; • labor costs and collective bargaining; • changes in the current levels of out of state and foreign demand for salvage vehicles; • the introduction of a similar internet product by a competitor; and • the ability to obtain or maintain necessary permits to operate. |
Registrant COPART, INC. By: /s/ A. JAYSON ADAIR A. Jayson Adair Chief Executive Officer (Principal Executive Officer and Director) Date: October 1, 2018 COPART, INC. By: /s/ JEFFREY LIAW Jeffrey Liaw, Chief Financial Officer (Principle Financial and Accounting Officer and duly Authorized Officer) Date: October 1, 2018 POWER OF ATTORNEY KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints A. Jayson Adair and Jeffrey Liaw, and each of them, as his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
We believe that we offer the highest level of service in the auction and vehicle remarketing industry and have established our leading market position by: • providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially-trained teams; • providing a comprehensive range of services that includes merchandising, efficient title processing, timely pick-up and delivery of vehicles, and Internet sales; • establishing and efficiently integrating new facilities and acquisitions; • increasing the number of bidders that can participate at each sale through the ease and convenience of Internet bidding; • applying technology to enhance operating efficiency through Internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, and vehicle imaging; and • providing a venue for insurance customers through our Virtual Insured Exchange (VIX) product to contingently sell a vehicle through our auction process to assess true market value, equipping our insurance customers with market data in its negotiations with owners who wish to retain their damaged vehicles. |
Value-Added Services We believe that we offer the most comprehensive range of services in our industry, including: • Internet bidding, Internet proxy bidding, and virtual sales powered by VB3, which enhance the competitive bidding process; • mobile applications, which allow members to search, bid, create watch lists, join auctions and bid in numerous languages from anywhere; • online payment capabilities via our ePay product, credit cards and dealer financing programs; • e-mail notifications available in numerous languages to potential buyers of vehicles that match desired characteristics; • sophisticated vehicle processing at storage sites, including digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available from us over the Internet; • specialty sales, which allow buyers the opportunity to focus on such select types of vehicles as motorcycles, heavy equipment, boats, recreational vehicles and rental cars; • interactive online counter-bidding, which allows sellers who have placed a minimum bid or a bid to be approved on a vehicle to directly counter-bid the current high bidder; • second chance bidding, which allows the second highest bidder the opportunity to purchase the vehicle for the seller’s current minimum bid after the high bidder fails to consummate the purchase; and • Night Cap sales, which provides an additional opportunity for bidding on vehicles that have not previously achieved their minimum bid. |
In addition, we anticipate our international operations will continue to subject us to a variety of risks associated with operating on an international basis, including: • the difficulty of managing and staffing foreign offices; • the increased travel, infrastructure and legal compliance costs associated with multiple international locations; • the need to localize our product offerings, particularly the need to implement our online auction platform in foreign countries; • the need to comply with complex foreign and U.S. laws and regulations that apply to our international operations; • tariffs and trade barriers and other regulatory or contractual limitations on our ability to operate in certain foreign markets; • exposure to foreign currency exchange rate risk, which may have an adverse impact on our revenues and revenue growth rates; • adapting to different business cultures and market structures, particularly where we seek to implement our auction model in markets where insurers have historically not played a substantial role in the disposition of salvage vehicles; and • repatriation of funds currently held in foreign jurisdictions to the U.S. may result in higher effective tax rates. |
Factors that may affect our operating results include, but are not limited to, the following: • fluctuations in the market value of salvage and used vehicles; • fluctuations in commodity prices, particularly the per ton price of crushed car bodies; • the impact of foreign exchange gain and loss as a result of international operations; • our ability to successfully integrate our newly acquired operations in international markets and any additional markets we may enter; • the availability of salvage vehicles; • variations in vehicle accident rates; • member participation in the Internet bidding process; • delays or changes in state title processing; • changes in international, state or federal laws or regulations affecting salvage vehicles; • changes in local laws affecting who may purchase salvage vehicles; • our ability to integrate and manage our acquisitions successfully; • the timing and size of our new facility openings; • the announcement of new vehicle supply agreements by us or our competitors; • the severity of weather and seasonality of weather patterns; • the amount and timing of operating costs and capital expenditures relating to the maintenance and expansion of our business, operations and infrastructure; • the availability and cost of general business insurance; • labor costs and collective bargaining; • changes in the current levels of out of state and foreign demand for salvage vehicles; • the introduction of a similar Internet product by a competitor; and • the ability to obtain necessary permits to operate. |
Registrant COPART, INC. By: /s/ A. JAYSON ADAIR A. Jayson Adair Chief Executive Officer (Principal Executive Officer and Director) Date: September 27, 2017 COPART, INC. By: /s/ JEFFREY LIAW Jeffrey Liaw, Chief Financial Officer (Principle Financial and Accounting Officer and duly Authorized Officer) Date: September 27, 2017 POWER OF ATTORNEY KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints A. Jayson Adair and Jeffrey Liaw, and each of them, as his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
We believe that we offer the highest level of service in the auction and vehicle remarketing industry and have established our leading market position by: • providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially-trained teams; • providing a comprehensive range of customer services that includes merchandising services, efficient title processing, timely pick-up and delivery of vehicles, and Internet sales; • establishing and efficiently integrating new facilities and acquisitions; • increasing the number of bidders that can participate at each sale through the ease and convenience of Internet bidding; • applying technology to enhance operating efficiency through Internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, vehicle imaging, and an online used vehicle parts locator service; and • providing the venue for insurance customers through our Virtual Insured Exchange (VIX) product to contingently sell a vehicle through the auction process to establish its true value, enabling the insurance customer to access market value information when negotiating with owners who wish to retain their damaged vehicles. |
Value-Added Services We believe that we offer the most comprehensive range of services in our industry, including: • Internet bidding, Internet proxy bidding, and virtual sales powered by VB3, which enhance the competitive bidding process; • mobile applications, which allows members to search, bid, create watch lists, join auctions and bid from anywhere; • online payment capabilities via our ePay product, credit cards and dealer financing programs; • e-mail notifications to potential buyers of vehicles that match desired characteristics; • sophisticated vehicle processing at storage sites, including digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available from us over the Internet; • specialty sales, which allow buyers the opportunity to focus on such select types of vehicles as motorcycles, heavy equipment, boats, recreational vehicles and rental cars; • interactive online counter-bidding, which allows sellers who have placed a minimum bid or a bid to be approved on a vehicle to directly counter-bid the current high bidder; • second chance bidding, which allows the second highest bidder the opportunity to purchase the vehicle for the seller’s current minimum bid after the high bidder fails to consummate the purchase; and • Night Cap sales, which provides an additional opportunity for bidding on vehicles that have not previously achieved their minimum bid. |
In addition, we anticipate our international operations will continue to subject us to a variety of risks associated with operating on an international basis, including: • the difficulty of managing and staffing foreign offices and the increased travel, infrastructure and legal compliance costs associated with multiple international locations; • the need to localize our product offerings, particularly the need to implement our online auction platform in foreign countries; • the need to comply with complex foreign and U.S. laws and regulations that apply to our international operations; • tariffs and trade barriers and other regulatory or contractual limitations on our ability to operate in certain foreign markets; • exposure to foreign currency exchange rate risk, which may have an adverse impact on our revenues and revenue growth rates; • adapting to different business cultures and market structures, particularly where we seek to implement our auction model in markets where insurers have historically not played a substantial role in the disposition of salvage vehicles; and • repatriation of funds currently held in foreign jurisdictions to the U.S. may result in higher effective tax rates. |
Factors that may affect our operating results include, but are not limited to, the following: • fluctuations in the market value of salvage and used vehicles; • fluctuations in commodity prices, particularly the per ton price of crushed car bodies; • the impact of foreign exchange gain and loss as a result of international operations; • our ability to successfully integrate our newly acquired operations in international markets and any additional markets we may enter; • the availability of salvage vehicles; • variations in vehicle accident rates; • member participation in the Internet bidding process; • delays or changes in state title processing; • changes in international, state or federal laws or regulations affecting salvage vehicles; • changes in local laws affecting who may purchase salvage vehicles; • our ability to integrate and manage our acquisitions successfully; • the timing and size of our new facility openings; • the announcement of new vehicle supply agreements by us or our competitors; • the severity of weather and seasonality of weather patterns; • the amount and timing of operating costs and capital expenditures relating to the maintenance and expansion of our business, operations and infrastructure; • the availability and cost of general business insurance; • labor costs and collective bargaining; • changes in the current levels of out of state and foreign demand for salvage vehicles; • the introduction of a similar Internet product by a competitor; and • the ability to obtain necessary permits to operate. |
Registrant COPART, INC. By: /s/ A. JAYSON ADAIR A. Jayson Adair Chief Executive Officer (Principal Executive Officer and Director) Date: September 28, 2016 COPART, INC. By: /s/ JEFFREY LIAW Jeffrey Liaw, Chief Financial Officer (Principle Financial and Accounting Officer and duly Authorized Officer) Date: September 28, 2016 POWER OF ATTORNEY KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints A. Jayson Adair and Jeffrey Liaw, and each of them, as his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
We believe that we offer the highest level of service in the auction and vehicle remarketing industry and have established our leading market position by: • providing coverage that facilitates seller access to buyers around the world, reducing towing and third-party storage expenses, offering a local presence for vehicle inspection stations, and providing prompt response to catastrophes and natural disasters by specially-trained teams; • providing a comprehensive range of customer services that include merchandising services, efficient title processing, timely pick-up and delivery of vehicles, and Internet sales; • establishing and efficiently integrating new facilities and acquisitions; • increasing the number of bidders that can participate at each sale through the ease and convenience of Internet bidding; • applying technology to enhance operating efficiency through Internet bidding, web-based order processing, salvage value quotes, electronic communication with members and sellers, vehicle imaging, and an online used vehicle parts locator service; and • providing the venue for insurance customers through our Virtual Insured Exchange (VIX) product to contingently sell a vehicle through the auction process to establish its true value, allowing the insurance customer to avoid dealing with estimated values when negotiating with owners who wish to retain their damaged vehicles. |
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