STANDEX INTERNATIONAL CORP/DE/MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

GROWGENERATION CORP. Managing discussion and analysis of financial position and results of operations (Form 10-Q)

The next dialogue needs to be learn along with our consolidated
monetary statements and associated notes that seem elsewhere on this report as
properly as our Annual Report on Kind 10-Ok for the yr ended December 31, 2021
filed with the SEC on March 10, 2022. We warning readers relating to sure
forward-looking statements, inside the that means of the Securities Act of 1933, as
amended, the Securities Change Act of 1934, as amended, and the Non-public
Securities Litigation Reform Act of 1995 within the following dialogue and
elsewhere on this report. Ahead wanting statements are statements not primarily based on
historic data and which relate to future operations, methods,
monetary outcomes or different developments. Ahead wanting
statements, notably these recognized with the phrases, "anticipates,"
"believes," "expects," "plans," "intends," "aims," and comparable
expressions, are essentially primarily based upon estimates and assumptions which might be
inherently topic to vital enterprise, financial and aggressive
uncertainties and contingencies, a lot of that are past our management and plenty of
of which, with respect to future enterprise selections, are topic to vary.
These uncertainties and contingencies can have an effect on precise outcomes and will trigger
precise outcomes to vary materially from these expressed in any forward-looking
statements made by, or on our behalf. We disclaim any obligation to replace
ahead wanting statements, besides as required by legislation.

Overview

GrowGeneration Corp. (along with all of its direct and oblique wholly-owned
subsidiaries, collectively "GrowGeneration" or the "Firm") was integrated
in Colorado in 2014. GrowGeneration is the most important chain of hydroponic backyard
facilities in North America and is a number one marketer and distributor of vitamins,
rising media, superior indoor and greenhouse lighting, environmental management
programs and equipment for hydroponic gardening. GrowGeneration additionally owns and
operates an e-commerce platform, www.growgeneration.com, Cellular Media, a
vertical racking and storage options enterprise, Horticultural Rep Group, a
horticultural merchandise gross sales consultant and distributor group, and
Drip Hydro, PowerSi, CharCoir, and a number of other different proprietary private-label
manufacturers throughout a number of product classes from LED lighting to vitamins and
components and environmental management programs for indoor cultivation.

Markets and Enterprise Sectors

GrowGeneration sells hundreds of merchandise, together with vitamins, rising media,
superior indoor and greenhouse lighting, environmental management programs, vertical
benching and equipment for hydroponic gardening, in addition to different indoor and
out of doors rising merchandise, which might be designed and meant for rising a large
vary of crops. As well as, vertical farms producing natural fruits and
greens additionally make the most of hydroponics because of a rising scarcity of farmland as properly
as environmental vulnerabilities together with drought, different extreme climate
situations and bug pests.

Our retail operations are pushed by a big selection of all hydroponic merchandise,
service and options pushed employees and choose, pack and ship distribution and
achievement capabilities. We employed roughly 494 workers as of
September 30, 2022, a majority of them we've got branded as "Develop Execs."
Presently, our operations span over 873,000 sq. ft of retail and warehouse
house.

The Firm has three major reportable segments, together with retail operations,
e-commerce and all different. The Firm has segmented its operations to mirror
the style wherein administration evaluations and evaluates the outcomes of its
operations. The construction displays the style wherein the chief working
choice maker frequently assesses data for decision-making functions,
together with the allocation of assets.

We acknowledge particularly identifiable working prices akin to price of gross sales,
distribution bills, promoting and basic administrative bills inside every
section. Sure basic and administrative bills, akin to administrative and
administration bills, salaries and advantages, share primarily based compensation, director
charges, authorized bills, accounting and consulting bills and expertise prices,
will not be allotted to the precise segments and are mirrored within the enterprise
outcomes.

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Aggressive Benefits

As the most important chain of water park facilities by way of income and variety of shops in United State Based mostly on administration’s estimates, we consider we’ve got the next major aggressive benefits over our opponents:

•We provide a one-stop procuring expertise to all kinds of growers by offering
"choice, service, and options";
•We offer end-to-end options for our industrial prospects from capex
built-out to consumables to nourish their crops;
•We've got a knowledge-based gross sales group, all with horticultural expertise;
•We provide the choices to transact on-line, in retailer, or purchase on-line and choose up;
•We think about ourselves to be a pacesetter of the merchandise we provide, from launching
new applied sciences to the event of our personal label merchandise; and
•We've got knowledgeable group for mergers and acquisitions, and to accumulate and
open new places and efficiently add them to our firm portfolio.

development technique

The core of our development technique is to ascertain a presence with our retail park facilities in key markets world wide United State. Along with the 15 states wherein we at present function, we’ve got recognized new market alternatives in another states the place the marketplace for our merchandise is rising. The corporate acquired 23 new places in 2021 and expects to open further shops in 2022 and 2023.

A further element of our development technique is to increase the distribution and gross sales capabilities of merchandise the corporate owns, distributes, or represents to impartial retail parks for resale.

Operations outcomes

Comparability of the three months ended September 30, 2022 and 2021

Internet income for the three months ended September 30, 2022 was roughly
$70.9 million, in comparison with $116.0 million for the three months ended September
30, 2021, a lower of roughly $45.2 million or 39%. The lower was
primarily attributed to a lower of roughly $55.4 million associated to
similar retailer gross sales, which represented a lower of 58% yr over yr. General
gross sales in our retail section declined from $100.8 million to $47.9 million.
Distributed gross sales had been $19.8 million for the three months ended September 30,
2022, up 322% year-over-year as a result of acquisitions of HRG and MMI. E-commerce
gross sales decreased from $10.5 million for the three months ended September 30, 2021
to $3.1 million for the three months ended September 30, 2022.

Gross sales price

Price of gross sales for the three months ended September 30, 2022 was roughly
$52.5 million, in comparison with roughly $81.9 million for the three months
ended September 30, 2021, a lower of roughly $29.4 million or 36%. The
lower in price of gross sales was primarily as a result of 39% lower in gross sales
evaluating the three months ended September 30, 2022 to the three months ended
September 30, 2021.

Gross Revenue

Gross revenue was roughly $18.3 million for the three months ended
September 30, 2022, in comparison with roughly $34.1 million for the three months
ended September 30, 2021, a lower of roughly $15.7 million or 46%. The
lower in gross revenue is primarily associated to the 39% lower in web gross sales
evaluating the three months ended September 30, 2022 to the three months ended
September 30, 2021. Gross revenue as a share of revenues was 25.9% for the
three months ended September 30, 2022, in comparison with 29.4% for the three months
ended September 30, 2021. Gross revenue in our retail section declined from $29.0
million for the three months ended September 30, 2021 to $10.4 million for the
similar interval in 2022. Gross revenue from distributed gross sales was $7.2 million for
the three months ended September 30, 2022 up from $1.8 million for a similar
interval in 2021. Gross revenue from e-commerce income was $0.8 million for the
three months ended September 30, 2022.

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Working bills

Working bills are comprised of retailer operations, promoting, basic, and
administrative, and depreciation and amortization. Working prices had been
roughly $26.4 million for the three months ended September 30, 2022 and
roughly $29.4 million for the three months ended September 30, 2021, a
lower of roughly $3.0 million or 10%.

Retailer working prices had been approx $13.6 million For the three months ending September 30, 2022In comparison with $14.8 million For the three months ending
September 30, 2021down 1.3 million {dollars} or 8%.

Complete company overhead, which is comprised of Promoting, basic, and
administrative expense and Depreciation and amortization expense, was
roughly $12.8 million for the three months ended September 30, 2022,
in comparison with $14.5 million for the three months ended September 30, 2021, a
lower of $1.7 million or 12%. Promoting, basic, and administrative prices had been
roughly $8.8 million for the three months ended September 30, 2022,
in comparison with roughly $10.5 million for the three months ended September 30,
2021. Salaries expense decreased to $4.0 million from $5.2 million primarily due
to a lower in company employees. Basic administrative bills decreased to
$3.6 million for the three months ended September 30, 2022 from $3.7 million for
the identical interval in 2021.

Different Earnings/Expense

Complete different revenue was roughly $0.2 million for the three months ended
September 30, 2022, in comparison with expense of $0.4 million for the three months
ended September 30, 2021.

Section Working Earnings

Working revenue in our retail section dropped from $4.0 million to an working
lack of $23.7 million on account of decrease gross sales quantity, decrease gross margins and
increased bills at present shops mixed with working losses at two shops
not in operation in the identical interval in 2021, together with acquired and new retail
places. Working revenue in our e-commerce section decreased from a lack of
$30.0 thousand to a lack of $2.8 million, on account of the lower in gross
revenue primarily from declining demand all through the business. Working revenue
in all different decreased to a lack of $18.4 million within the three months ended
September 30, 2022 in comparison with revenue of $0.7 million within the three months ended
September 30, 2021.

Earnings Taxes

Earnings tax profit was $0.7 million for the three months ended September 30,
2022, in comparison with revenue tax expense of $1.1 million for the three months ended
September 30, 2021. Efficient tax price is impacted by variations in timing of
bills for share-based compensation, depreciation, amortization and the affect
of 162(m) on deductible wages. As such, the Firm's taxable revenue varies from
reported revenue in a fabric means. The Firm has evaluated constructive and
unfavourable proof and has concluded that its deferred tax belongings will not be
anticipated to be realizable and has recorded a valuation allowance within the present
interval.

Internet Earnings

Internet loss for the three months ended September 30, 2022 it was virtually $7.2 millionin comparison with a web revenue of roughly 4.0 million {dollars} For the three months ending September 30, 2021down approx $11.2 million.

Comparability of the 9 months ended September 30, 2022 and 2021

Internet income for the 9 months ended September 30, 2022 was roughly
$223.7 million, in comparison with $331.9 million for the 9 months ended
September 30, 2021, a lower of roughly $108.2 million or 33%. The
lower was primarily attributed to a lower of roughly $141.0 million
associated to similar retailer gross sales, which represented an approximate 51.6% lower
yr over yr. General gross sales in our retail section declined from $290.9 million
for the 9 months ended September 30, 2021, to $167.6 million for a similar
interval in 2022. Distributed gross sales elevated to $44.1 million for the 9 months
ended September 30, 2022 in comparison with $12.5 million for the 9 months ended
September 30, 2021 as a result of acquisitions of HRG and MMI. E-commerce gross sales
decreased from $28.5 million for the 9 months ended September 30, 2021, to
$12.0 million for a similar interval in 2022.

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Gross sales price

Price of gross sales for the 9 months ended September 30, 2022 was roughly
$163.0 million, in comparison with roughly $236.8 million for the 9 months
ended September 30, 2021, a lower of roughly $73.7 million or 31%. The
lower in price of gross sales was primarily as a result of 33% lower in gross sales
evaluating the 9 months ended September 30, 2022 to the 9 months ended
September 30, 2021.

Gross revenue

Gross revenue was roughly $60.7 million for the 9 months ended
September 30, 2022, in comparison with roughly $95.2 million for the 9 months
ended September 30, 2021, a lower of roughly $34.5 million or 36%. The
lower in gross revenue is primarily associated to the 33% lower in web gross sales
evaluating the 9 months ended September 30, 2022 to the 9 months ended
September 30, 2021. Gross revenue as a share of web gross sales was 27.1% for the
9 months ended September 30, 2022, in comparison with 28.7% for the 9 months
ended September 30, 2021. Gross revenue in our retail section declined from $81.5
million for the 9 months ended September 30, 2021, to $41.4 million for the
similar interval in 2022. Gross revenue from distributed gross sales elevated to $16.0
million for the 9 months ended September 30, 2022 in comparison with $5.5 million
for the 9 months ended September 30, 2021. Gross revenue from our e-commerce
section was $3.3 million for the 9 months ended September 30, 2022 in contrast
to $8.2 million for the 9 months ended September 30, 2021.

Working bills

Working bills are comprised of retailer operations, promoting, basic, and
administrative, and depreciation and amortization. Working prices had been
roughly $212.8 million for the 9 months ended September 30, 2022 and
roughly $73.1 million for the 9 months ended September 30, 2021, an
improve of roughly $139.7 million or 191%. The rise in working
bills is primarily attributable to the impairment lack of $127.8 million
recorded through the 9 months ended September 30, 2022.

Retailer working prices had been roughly $41.9 million for the 9 months ended
September 30, 2022, in comparison with $35.6 million for the 9 months ended
September 30, 2021, a rise of $6.2 million or 17%. The rise in retailer
working prices was immediately attributable to the addition of 23 places that
had been acquired throughout 2021, together with two shops that had been added subsequent to
September 30, 2021.

Complete company overhead, which is comprised of Promoting, basic, and
administrative expense and Depreciation and amortization expense, was
roughly $43.1 million for the 9 months ended September 30, 2022,
in comparison with $37.5 million for the 9 months ended September 30, 2021, an
improve of $5.6 million or 15%. Promoting, basic, and administrative prices had been
roughly $28.2 million for the 9 months ended September 30, 2022,
in comparison with roughly $28.1 million for the 9 months ended September 30,
2021. Salaries expense decreased to $14.7 million for the 9 months ended
September 30, 2022, from $14.9 million for a similar interval in 2021. Basic
administrative bills elevated to $11.3 million for the 9 months ended
September 30, 2022, from $8.8 million for a similar interval in 2021, to help
increasing operations.

Impairment loss was roughly $127.8 million for the 9 months ended
September 30, 2022 following goodwill impairment testing carried out within the second
quarter on account of the Firm's market capitalization falling beneath whole
web belongings. As well as, monetary efficiency continued to weaken through the
quarter for which testing was carried out. Confer with Essential Accounting Insurance policies,
Judgements, and Estimates and Notice 8 - "Goodwill and Intangible Belongings" of the
notes to the condensed consolidated monetary statements for extra
data.

Earnings / Different Bills

Different whole revenue was approx $0.7 million For the 9 months ended
September 30, 2022in comparison with bills $0.4 million For the 9 months ended September 30, 2021. This improve is primarily because of features recorded through the 9 months ended September 30, 2022associated to the achieve reassessment adjustment related to harvest firm Obsession.

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Sector working revenue

Working revenue in our retail section dropped from $18.9 million to an
working lack of $137.9 million. The working loss for the present yr
consists of an impairment of Working revenue in our e-commerce section declined
from $0.4 million for the 9 months ended September 30, 2021 to a lack of
$11.9 million for a similar interval in 2022, on account of decrease income and
increased working bills in addition to integration prices of Agron.IO webstore that
was consolidated with our core e-commerce webstore within the 9 months ended
September 30, 2022. Working revenue in all different decreased to a lack of $2.3
million within the 9 months ended September 30, 2022 in comparison with revenue of $2.7
million within the 9 months ended September 30, 2021.

Earnings Taxes

Earnings tax profit was $2.6 million for the 9 months ended September 30,
2022, in comparison with revenue tax expense of $5.6 million for the 9 months ended
September 30, 2021. Efficient tax price is impacted by variations in timing of
bills for share-based compensation, depreciation, amortization and the affect
of 162(m) on deductible wages. As such, the Firm's taxable revenue varies from
reported revenue in a fabric means. The Firm has evaluated constructive and
unfavourable proof and has concluded that its deferred tax belongings will not be
anticipated to be realizable and has recorded a valuation allowance within the present
interval.

Internet Earnings

Internet loss for the 9 months ended September 30, 2022 it was virtually 148.8 million {dollars}in comparison with a web revenue of roughly $16.9 million For the 9 months ended September 30, 2021down approx $165.6 million.

Working actions

Internet money supplied by working actions for 9 months ended September 30,
2022 was roughly $9.9 million in comparison with $1.9 million supplied for the
9 months ended September 30, 2021. The Firm diminished pay as you go stock by
$11.3 million within the present yr in addition to stock by $20.7 million, which
was partially offset by funds for accounts payable, accrued payroll, and a
discount in buyer deposits..

Internet money supplied by investing actions was roughly $21.4 million for
the 9 months ended September 30, 2022 in comparison with money used of roughly
$114.8 million for the 9 months ended September 30, 2021. Investing
actions in 2022 had been primarily attributable to the maturity of marketable
securities of $39.8 million partially offset by acquisitions of $6.8 million and
autos and retailer tools purchases of $11.6 million. Investing actions
for the 9 months ended September 30, 2021 had been primarily associated to retailer
acquisitions of $71.8 million, buy of marketable securities of $75.0
million, the acquisition of autos and retailer tools to help new retailer
operations of $10.8 million, and intangible belongings of $2.3 million.

Internet money utilized in financing actions for the 9 months ended September 30,
2022 was roughly $1.5 million and was primarily attributable to frequent
inventory withheld for worker payroll taxes. Internet money utilized by financing actions
for 9 months ended September 30, 2021 was $1.9 million and was primarily
attributable to inventory withheld to cowl payroll taxes.

Use of non-GAAP monetary data

The Firm believes that the presentation of outcomes excluding sure objects in
"Adjusted EBITDA," akin to non-cash fairness compensation costs, offers
significant supplemental data to each administration and traders,
facilitating the analysis of efficiency throughout reporting durations. The Firm
makes use of these non-GAAP measures for inside planning and reporting functions. These
non-GAAP measures will not be in accordance with, or an alternate for, typically
accepted accounting rules and could also be totally different from non-GAAP measures used
by different firms. The presentation of this extra data is just not meant
to be thought-about in isolation or as an alternative choice to web revenue or web revenue
per share ready in accordance with typically accepted accounting rules.


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Set forth beneath is a reconciliation of Adjusted EBITDA to web revenue (loss):

                                                                              Three Months Ended
                                                                                September 30,
                                                                          2022                  2021
                                                                          (000)                (000)
Internet revenue (loss)                                                    $     (7,202)         $     4,027
Earnings taxes                                                                 (718)               1,096
Curiosity expense                                                                3                   25
Depreciation and amortization                                               3,875                3,539
EBITDA                                                               $     (4,042)         $     8,687
Share primarily based compensation (choice compensation, warrant compensation,
inventory issued for providers)                                                  1,291                2,106
Fastened asset disposal                                                          165                    -
Adjusted EBITDA                                                      $     (2,586)         $    10,793

Adjusted EBITDA per share, primary                                     $      (0.04)         $      0.18
Adjusted EBITDA per share, diluted                                   $      (0.04)         $      0.18





                                                                              9 Months Ended
                                                                                September 30,
                                                                          2022                 2021
                                                                         (000)                (000)
Internet revenue (loss)                                                    $  (148,758)         $    16,887
Earnings taxes                                                              (2,637)               5,569
Curiosity expense                                                              16                   31
Depreciation, and amortization                                            13,164                8,510
EBITDA                                                               $  (138,215)         $    30,997
Impairment loss                                                          127,831                    -
Share primarily based compensation (choice compensation, warrant compensation,
inventory issued for providers)                                                 3,980                5,347
Fastened asset disposal                                                          81                    -
Adjusted EBITDA                                                      $    (6,323)         $    36,344

Adjusted EBITDA per share, primary                                     $     (0.10)         $      0.62
Adjusted EBITDA per share, diluted                                   $     

(0.10) $0.60

Liquidity and capital assets

As of September 30, 2022, we had working capital of roughly $145.8
million, in comparison with working capital of roughly $169.8 million as of
December 31, 2021, a lower of roughly $24.0 million. The lower in
working capital from December 31, 2021 to September 30, 2022 was due primarily
to a lower in marketable securities, stock and pay as you go stock
partially offset by decreases in present liabilities. At September 30, 2022, we
had money and money equivalents of roughly $71.1 million. Presently, we've got
no extraordinary calls for, commitments or uncertainties that would scale back our
present working capital. Our core technique continues to give attention to increasing our
geographic attain throughout the US and constructing our retailer and model
portfolio by way of natural development and acquisitions. We consider that a few of our
retailer acquisitions and new retailer openings can come from money stream from
operations.

We anticipate that we may have further financing by way of fairness choices
and/or debt financings sooner or later to proceed to accumulate and open new shops
and associated companies. So far we've got financed our operations by way of the
issuance and sale of frequent inventory, convertible notes and warrants.

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Important accounting insurance policies, judgments and estimates

Enterprise integration

Notice 1 - Operations and Abstract of Important Accounting Insurance policies to the
consolidated monetary statements included in Half II. Merchandise 8 of our Kind 10-Ok
for the yr ended December 31, 2021 describes the numerous accounting
insurance policies utilized in preparation of those consolidated monetary statements. We
consider the next important accounting coverage and assumptions could have a
materials affect on reported monetary situation and working efficiency and
contain vital ranges of judgement to account for extremely unsure issues
or are prone to vital change. In every of those areas, administration
makes estimates primarily based on historic outcomes, present tendencies and future
projections. Due to this fact, these are thought-about to be our important accounting
insurance policies and estimates.

We account for transactions that characterize enterprise mixtures beneath the
acquisition technique of accounting, which requires us to allocate the entire
consideration paid for every acquisition to the belongings we purchase and liabilities
we assume primarily based on their truthful values as of the date of acquisition, together with
identifiable intangible belongings. The allocation of the acquisition value makes use of
vital estimates in figuring out the truthful values of identifiable belongings
acquired and liabilities assumed, particularly with respect to intangible belongings.
We could refine our estimates and make changes to the belongings acquired and
liabilities assumed over a measurement interval, to not exceed one yr.

The Firm has monetary liabilities ensuing from our enterprise mixtures,
together with contingent consideration preparations. We estimate the truthful worth of
these monetary liabilities utilizing Degree 3 inputs that require using
quite a few assumptions, which can change primarily based on the incidence of future occasions
and result in elevated or decreased working revenue in future durations.
Estimating the truthful worth at an acquisition date and in subsequent durations
entails vital judgements, together with projecting the longer term monetary
efficiency of the acquired companies. The Firm will replace its assumptions
every reporting interval primarily based on new developments and report such quantities at truthful
worth primarily based on the revised assumptions. Adjustments within the truthful worth of those
monetary liabilities are recorded within the Consolidated Statements of Operations
inside different revenue (expense).

weak point good intention and intangible belongings

Goodwill displays the price of an acquisition in extra of the truthful values
assigned to identifiable web belongings acquired. The Firm evaluations goodwill for
impairment through the fourth fiscal quarter or extra often if occasions or
modifications in circumstances point out the asset could be impaired. The Firm
performs impairment evaluations for its reporting models utilizing a good worth technique
primarily based on administration's judgements and assumptions or third-party valuations. For
goodwill impairment testing functions, the Firm decided 4 reporting
models, three of which had been topic to a quantitative evaluation. The truthful worth
of a reporting unit refers back to the value that may be acquired to promote the unit
as a complete in an orderly transaction between market contributors on the
measurement date. In estimating the truthful worth, the Firm makes use of the revenue
method wherein discounted money stream analyses are used to derive estimates of
truthful worth of every reporting unit. Multiples of earnings primarily based on the typical of
historic, printed multiples of earnings of comparable entities with comparable
operations and financial traits are additionally utilized in creating estimated
truthful values. The inputs utilized within the analyses are categorised as Degree 3
inputs inside the truthful worth hierarchy as outlined in ASC 820, "Honest Worth
Measurement." These calculations comprise uncertainties as they require
administration to make assumptions about market comparables, future money flows and
applicable low cost charges (primarily based on weighted common price of capital ranging
from 13% to 16% at June 30, 2022) to mirror the danger inherent sooner or later
money flows and to derive an inexpensive enterprise worth and associated premium. The
estimated future money flows mirror administration's newest assumptions of the
monetary projections primarily based on present and anticipated aggressive panorama,
together with estimates of income primarily based on manufacturing volumes over the foreseeable
future and long-term development charges, and working margins primarily based on historic
tendencies and future price containment actions. A change in any of those
estimates and assumptions may produce a unique truthful worth, which may have
a fabric affect on the outcomes of the goodwill impairment check and on the
Firm's outcomes of operations. The estimated truthful worth is then in contrast with
the carrying quantity of the reporting unit, together with recorded goodwill. The
Firm is topic to monetary assertion threat to the extent that the carrying
quantity exceeds the estimated truthful worth. On account of the assessments, the Firm
recorded an impairment to goodwill through the second quarter of 2022. Confer with
Notice 8, "Goodwill and Intangible Belongings," of the notes to the condensed
consolidated monetary statements for extra data.

The Firm evaluations long-lived belongings, together with property, plant and tools
and different intangible belongings with particular lives, for impairment every time occasions
or modifications in circumstances point out that the asset's carrying quantity might not be
recoverable. The Firm conducts its long-lived asset impairment analyses in
accordance with ASC 360-10-15, "Impairment or Disposal of Lengthy-Lived Belongings."
ASC 360-10-15 requires the Firm to group belongings and liabilities on the lowest
degree for which identifiable money flows are largely impartial of the money
flows of different belongings and liabilities and consider the asset group towards the
sum of the undiscounted future money flows. If the undiscounted money flows don't
point out the carrying quantity of the
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asset is recoverable, an impairment cost is measured as the quantity by which
the carrying quantity of the asset group exceeds its truthful worth primarily based on
discounted money stream evaluation or value determinations. Intangible belongings with particular
lives proceed to be amortized over their estimated helpful lives and are topic
to impairment testing as a part of their asset group if occasions or modifications in
circumstances point out that the asset could be impaired. A substantial quantity
of administration judgement and assumptions are required in performing the
impairment assessments. Throughout the second quarter of 2022, the Firm concluded it
had a triggering occasion. The Firm's market capitalization fell beneath whole web
belongings. As well as, monetary efficiency continued to weaken through the
quarter, which is opposite to prior expertise. Administration reassessed enterprise
efficiency expectations, following persistent opposed developments in fairness
markets, deterioration within the surroundings wherein the Firm operates,
inflation, decrease than anticipated gross sales, and a rise in working bills.
These indicators, within the mixture, required impairment testing for finite-lived
intangible belongings on the asset group degree and goodwill on the reporting unit
degree. These impairments had been measured both beneath an revenue method using
forecasted discounted money flows to find out truthful values of the impaired
belongings. These strategies are in line with the strategies the Firm employed in
prior durations to worth intangible belongings. The inputs utilized within the analyses
are categorised as Degree 3 inputs inside the truthful worth hierarchy as outlined in
ASC 820, "Honest Worth Measurement," and primarily include anticipated future
working margins and money flows, weighted common price of capital charges
(13.3%), estimated salable values and third-party appraisal methods akin to
market comparables. To the extent that profitability declines as in comparison with
forecasted profitability or if opposed modifications happen to key assumptions or different
truthful worth measurement inputs, additional impairment of long-lived belongings may
happen sooner or later. Confer with Notice 8, "Goodwill and Intangible Belongings," of the
notes to the condensed consolidated monetary statements for extra
data.


unbalanced preparations

We don't have any off-balance sheet preparations (as that time period is outlined in
Merchandise 303 of Regulation S-Ok) which might be moderately prone to have a present or
future materials impact on our monetary situation, income or bills, outcomes
of operations, liquidity, capital expenditures or capital assets.

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