FUNERAL AGENCY, INC.

Funeral Agency, Inc. (FAI) is a marketer and seller of prepaid funerals and various insurance products on behalf of FDL in the states of Texas and Colorado. FAI is a licensed insurance agency and holds a prepaid funeral permit issued by the Texas Department of Banking and the Colorado Department of Insurance. A Texas corporation organized on June 18, 1982, FAI was acquired by DIG on January 1, 2006.

FAI ended the year with assets of $2.3 million, consisting mostly of cash, claims receivable from FDL, and goodwill. Liabilities of $3.1 million consisted largely of agent credit balances and suspense items. Equity ended the year at negative $750.0 thousand.

Through an agency agreement with FDL, FAI received commission income on premiums collected by FDL on preneed funeral business written in Texas. Revenues for 2022 were $2.5 million – consistent with 2021. FAI contributed approximately 22.9% of FDL’s preneed sales volume during 2022, producing $106.8 million in new business. Expenses consisted mostly of salaries and benefits of sales managers employed by the company and sales-related incentive programs. Net loss for 2022 was $29.0 thousand compared to net income of $9.7 thousand in 2021.

PASSARE – A DIVISION OF DIG

Originally a Delaware corporation created November 26, 2012, Passare was merged into DIG effective January 1, 2020. Passare is a software as a service company providing an online administrative platform specifically designed for funeral homes. DIG initially invested in Passare in 2013 and also provided an operating line of credit to sustain Passare’s operations. In April 2015, DIG negotiated an exchange of all outstanding debt with Passare in return for additional shares of stock, resulting in majority ownership. In 2019, DIG gained 100% ownership in Passare after an exchange of cash or stock for remaining minority interests in Passare. Gaining 100% control of Passare paved the way to substantial expense reduction and sharing of resources between Passare and other DIG affiliates as reflected in the 2022 financial results.

While Passare’s assets and liabilities were combined with DIG’s due to the merger, the operations of Passare are monitored and recorded as a separate division within DIG.

During 2022, Passare increased revenues by 30.99%, or $1.0 million, ending the year with approximately 856 customers. Passare continued to improve features to the software in line with the Company’s vision to “make Passare the system through which a funeral home can run its entire business.” Passare also expanded on its consulting services, such as premium support and client services. Revenues were $4.3 million compared to $3.3 million in 2021. Total expenses in 2022 were $4.6 million compared to $3.6 million in 2021 – a $967.7 thousand increase. The increase in expenses was due largely to an increase in contract labor expense and salaries and benefits. Labor-related expenses account for approximately 88% of total operating expenses with the majority of those expenses dedicated to further development of the software. Operating losses decreased by $58.4 thousand from 2021. Net loss was $215.0 thousand compared to a gain of $12.4 thousand in 2021 after reporting $288.2 thousand in gain from forgiveness of a Paycheck Protection Program loan received in April 2020.